Council Narrowly Opposes State Subsidy For The Crossing at Olde Towne

In a 3-2 vote Monday night, the Gaithersburg City Council opposed state financing for a proposed apartment community that would have brought 105 income-restricted apartments to the city.

The developer wanted to fund the construction of a 199-apartment building, The Crossing at Olde Towne at 200 Olde Towne Ave., through the Maryland Department of Housing and Community Development.

Because the city council passed a resolution opposing state financing, the Department of Housing and Community Development won’t be able to finance the project.

“They are required by their own regulation to withdraw the application if the local government provides a resolution not supporting the project,” said Gaithersburg City Manager Tony Tomasello.

But the project could still move forward if the developer gets financing elsewhere, Tomasello said.

Council members who objected to the financing said that what the developer is proposing now was not the deal the city agreed to when it sold the land for $2.3 million back in July 2012.

The city was looking to draw residents with higher incomes to Olde Towne, as outlined in the Gaithersburg Olde Towne District Master Plan adopted in 2005.

"We sold this with the idea that it would not have any affordable housing," said Council Vice President Henry F. Marraffa Jr., who voted in favor of opposing state financing.

But under the developer’s plans, more than half the apartments would be income-restricted.

"Any property owner can rent at rates affordable to lower-income tenants if they choose so,” said Councilwoman Cathy Drzyzgula, who voted in favor of opposing state financing. “The question is whether the public benefit of subsidized financing for this project justifies the use of tax dollars."

Drzyzgula said the project would increase “economic segregation” in Gaithersburg, bringing the share of income-restricted apartments to 27 percent of the rental housing stock in that part of the city.

Citing statistics from the Frederick Avenue Corridor & Vicinity Development Capacity Study, Drzyzgula said that the project was proposed an area with the lowest median household income in the city.

Councilman Ryan Spiegel said that while he agreed that the developer’s plans had issues, he couldn’t support a resolution opposing state financing for it. The project has already obtained approvals through the city’s zoning and planning processes.

“I don't think we should be trying to retro-actively force what is a larger question of our housing policy on one particular project that's already been approved,” Spiegel said.

Spiegel said he’d rather the council not take any position on the matter, a point of view shared by Councilman Michael A. Sesma, who said he thought the project would “collapse under its own weight.”

“There are so many things that are unappealing about this particular project. I don't disagree with any of the statements in the resolution,” Sesma said. “Yet I think procedurally I think the city has more to lose in terms of its image, in terms of how we manage development and how we deal with developers going forward.”