CECILTON — The town’s planned senior housing and early education center project is drawing new scrutiny after the town council learned about land sale and utility hookup concessions negotiated by the mayor and the project’s developer.
At Tuesday night’s town meeting, Cecilton council members and residents in attendance questioned Mayor Joe Zang about the project’s status in the approval process and previous statements he had made about it in recent meetings.
The project dates back to 2014 as Zang expressed the desire for a senior housing project in town to Frank Hodgetts, CEO of Home Partnerships Inc., a facilitator of multi-family housing development that also completed the North Street Residences project in Elkton.
Over the last five years, the project’s size has fluctuated, at times planning for as many as 44 apartment units and as few as 12 ranch-style units on 8.11 acres of town-owned land near the Dollar General and town water tower. After consultation from state officials, whose grant support is needed to help subsidize the cost of the project, the plan now calls for 20 ranch-style apartment units for those 55 or older.
As a part of that plan, the current Head Start building fronting Route 213 would be demolished and replaced with speculative retail store space. A new education facility would be constructed to the rear of the property near the water tower.
Questions about the town’s contribution to the project began to be raised in the last six weeks, however, after resident Stephen Duphily came to the March 18 and April 15 town meetings to seek more info on the project. In those meetings, it was revealed that the council was unaware of Zang’s proposed concessions.
All three council members present Tuesday — Michael Cooper, Craig DeVary and Danielle Zack — said they had no knowledge about a July 2018 signed development services agreement between Zang and Hodgetts for a 60% reduction on water and sewer hookups for the project.
While the town code calls for a hookup fee of $17,000 per equivalent development unit, Zang signed the agreement to reduce the fee to $6,500 per EDU. That concession would result in a decrease of $224,000 in hookup fees for the 20-unit housing project. Hookup fees are typically used to support infrastructure expansion and pay down debt servicing on major facilities.
The council and residents also questioned Zang about a recent revelation that he had proposed selling the town-owned parcel for as little as $10, and had not sought a professional appraisal of the property to date.
Under the town’s charter, both land sales and fee reductions must be approved by a majority vote of the town council, and cannot be unilaterally approved by the mayor. Phone and email messages left by the Whig for Hodgetts on whether he was aware that the concessions had not been approved by the town council were not returned as of Thursday afternoon.
During the meeting and in an interview with the Whig afterward, Zang asserted that the concessions he was proposing were necessary to obtain $7 million in state grant funding for the project. He emphasized that the sale and fee reduction cannot be approved without council’s approval, and that to date only the site design and subdivision plans have been approved by council.
“The project has been approved, that much is done, but what we’re trying to do now is work out the rest of the numbers. The numbers have to work for the town, the council and the developer, but the first thing that had to happen is that project had to get approved,” Zang told those in attendance.
Councilman DeVary agreed that some concession may be needed to move the project forward, but questioned how the proposals came together, especially without the input of council.
“I get that to make it work you have to discount whatever ... let’s say it’s appraised for $300,000, so we sell it for 30% of the assessed value. We all agree on that and we move forward,” DeVary said. “That’s a heck of contribution … (the town) is a business, I’m not a charity.”
Zang agreed, but advised that his council look at the proposal as a long-term gain rather than a short-term concession. Accepting the proposed terms would bring a project to town that most are excited for and would also convert town-owned land, which collects no property tax or utility fees, to a property that would contribute to town coffers, further lessening the financial burden on current town residents.
The council questioned why the town was offering Home Partnerships a fee rate reduction when the Willows at Cecilton apartment complex, formerly known as Parklands; Dollar General and the Royal Farms all did not receive reduced utility hookups in recent years. Furthermore, a developer for the Dollar General purchased the town-owned land in 2012 for $115,000.
It is unclear whether Cecilton has a minimum local grant match provision for the state funding and if so at what level. When Home Partnerships developed the North Street Senior Residences in Elkton from 2012 to 2015, it purchased the former Cecil County Jail from the county for $415,000 — which was reimbursed in a state pass-through grant — and paid more than $700,000 in hookup fees at their full rate, according to Elkton officials.
In the end, Cecilton Town Administrator Mary Cooper said that she was concerned about the disparity of reducing fee rates for some but not others.
“What concerns me, and ultimately it’s your decision, is that we’re charging our neighbors full price, so a person likes me who works a regular job who wants to live in Cecilton is getting charged $17,000 to hook in,” she said, noting a new resident paid $17,000 in recent weeks to hook up a modular home in town.
DeVary said it would be “absolutely absurd” to not offer a hookup discount to the owner of 16 undeveloped lots in Frisby’s Meadows, which is preparing for new development soon, if one is offered to the Senior Village.
“If you’re going to (discount the rate) here, you have to do it there. It’s small town politics, that will run through the town like wildfire,” he said.
Zang agreed with their concerns, and added that he was prepared to lower the hookup rates town-wide to entice building in town. He said that he’s intrigued by what Elkton has done in recent years in waiving all hookup fees for residential building.
In 2017, Elkton approved a two-year full waiver of the $15,000 water and sewer hookup fees and is proposing to extend that waiver before it expires in August. According to Elkton Planning Director Jeanne Minner, the waiver helped persuade builders to file 11 new building permits in Elkton in 2018 and is one of the most-discussed benefits from prospective builders looking in town.
In order to prevent future confusion on the project and any future issues, Cooper recommended that the town reduce its meetings to once a month so legal counsel could advise.
“I think that’s critical,” she said, noting nearly every town in the region has legal counsel present to answer questions. “I think we can avoid confusion in the future if we have legal counsel here.”
Concurring with her recommendation, the mayor and council agreed to now only hold one meeting a month on the third Monday of each month, so that town attorney Tom Yeager, who also represents the Kent County Board of Commissioners as well as the towns of Chesapeake City, Galena, Rock Hall and Betterton, can attend.
The council will now have to weigh whether to proceed with the project under the terms negotiated by Zang or to try to renegotiate them, which could delay the project’s groundbreaking and jeopardize the grant funding allocated by the Maryland Department of Housing and Community Development. The next town meeting is set for 7 p.m. May 20.