PILOT Goes Out

Dear Readers,
The city council stuffed the president of the Montgomery Housing Partnership into a catapult bucket and hurled him at the Annapolis state house.
The Montgomery Housing Partnership (MHP) buys, renovates, or builds affordable housing. One of their properties is the large Edinburgh House apartment building on Maple Ave. The city granted them a PILOT (payment in lieu of taxes) deal 15 years ago. The deal was to reduce the building’s property tax payment by 50% for 5 years, then 25% for another five – so they could use the money to renovate it.
But, after ten years they came back and asked for another 5 year 50% PILOT – which the city, wanting to support affordable housing, granted.
Now, after 15 years straight of getting tax discounts, they are back again! This time, they want a 100% 10-year PILOT. This would be a loss to the city of around $12,436 per year, $124,360 total over 10 years.

Holding Green Hostage
Nervy! And, it’s not like they are really asking – there’s a sharp, pointy threat in their request along the lines of “of course, the state expects ‘local governments’ to help out, and if you refuse to cooperate, Annapolis may withhold funds for YOUR projects. AND, we know how much you like ‘green investments:’ energy efficiency and the like – so if you don’t cough up, we won’t make any.”
Please give generously, kind councilmembers, OR ELSE!
So, when MHP president Robert Goldman voiced his appeal, including this same threat, to the council Oct. 18, he was nearly drowned out by the sound of locking-and-loading.
It wasn’t just the thinly veiled threats. Those were icing on the pile of doo-doo.
Shovel Brigade
The council kindly shoveled through that pile layer by layer for Goldman’s edification.
Councilmember Josh Wright said he was unwilling to give even a 50% PILOT. Neither the state nor the county subsidizes the city for it’s own affordable housing program (rent control), he said. Why then would the city subsidize theirs? He also cited the deep revenue cuts the state imposed this year, and the unfair tax rebate the county gives us. $12,436 he, said, would cover the salary of the part-time library shelver the city had to lay off this year.
Councilmember Colleen Clay rephrased it more colorfully, “they totally hosed us” on the state budget, she said.
As for Goldman’s threats, she continued, the way the state sees it, “local government” is the county, so take it up with them, she said, not us. And, why would you be so shortsighted as to cut green construction? Green investment pays for itself, she said.
Furthermore, crunching the Edinburgh House figures, as she and councilmember Dan Robinson had, the amount to be spent is “a TON of money,” she told him. As a taxpayer in a time of tight budgets, she questioned whether this was a wise expenditure. Why rehab after 15 years, she wanted to know, when they appear to be livable units? Why not use this money to buy additional properties?
“Frankly, the city can’t afford it,” said Councilmember Fred Schultz. Takoma Park “got the shaft” from the state, leaving a large revenue shortfall, so the idea of waiving taxes is “disturbing,” he said.
Councilmembers Terry Seamans and Josh Wright each noted that the so-called “affordable” rent rate at the MHP property is higher than the city’s controlled rents. The city achieves that by limiting the amount landlords can earn, said Seamens, whereas MHP is subsidized. Why should MHP get a PILOT and not the others, he asked.
Councilmember Dan Robinson, seeing the pile had been well-shoveled already, simply said “I won’t support” the PILOT.
One Half Support
Councilmember Reuben Snipper said he could see both sides, and he appreciates how a MHP property in his ward spruces up the neighborhood. So, he alone said he would support a 50% PILOT.
Goldman, wiping doo-doo from his face, answered many of the points, saying, for instance, that the renovation expenses were actually moderate – given the market, and that substantial investment pays off in the long run. He also answered Fred Schultz’s questions about the nature of the partnership change underway for the Edinburgh House.
But, his answers did not appease, or change any minds. it looks like the PILOT has sunk. The Oct. 18 session was just a discussion, however. There was no official vote. Just the catapult throw.

– Gilbert

About the Author

Gilbert is the pseudonym of a hard-bitten, hard-drinking, long-time Takoma Park resident who maintains the granolapark blog. Gilbert and William L. Brown — Granola Park's mild-mannered chief of staff, researcher, and drink pourer — have never been seen in the same place at the same time.