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Baltimore City readies $1.

3M loan for Savannah


Daily Record, The (Baltimore), Jan 10, 2007 by Jen Degregorio
Copyright 2007 Dolan Media Newswires
Provided by ProQuest Information and Learning Company. All rights Reserved.
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Baltimore City is poised to loan $1.32 million to the developer who failed to provide affordable
housing in a building she bought with city money and later sold for $1 million more than she first paid.
Developer BettyJean Murphy would use the loan to pay for upgrades to the Alcott Place Apartments, a
senior-housing complex in Northwest Baltimore that her company, Savannah Development Corp.
helped create in 1990.
Meanwhile, Murphy has yet to repay the city for the sale of 10 W. Chase St. She sold that building in
late 2005 for $1.3 million, a decade after the city gave her $368,000 in federal grant money to buy the
property and redevelop it as an affordable housing complex.
"Before we give her a loan, I would hope all the outstanding issues surrounding 10 West Chase Street
were resolved," said City Councilman Robert W. Curran, chair of the council's legislative investigations
committee.
The city is close to settling Murphy's debt for 10 W. Chase St. The agreement, which has not yet been
signed, calls for Murphy to pay the city $350,000 in seven equal installments of $50,000 each.
The city could not recoup an additional $18,000 it gave Murphy for legal fees associated with the
$350,000 building purchase, said David Tillman, a spokesman for the city housing department.
"With this deal in place I am confident that moving forward with the recapitalization of Alcott place is
in the best interest of the city and the many seniors who call Alcott Place home," Christopher Shea, the
city housing department's deputy commissioner of development, wrote in a statement to The Daily
Record yesterday.
A controversy erupted last year over whether Murphy would have to repay the city for money she used
in 1995 to purchase 10 W. Chase St., and profits she may have reaped by selling it in late 2005.
The Daily Record first reported in March that Murphy had sold the building, the former Calvert School
in Baltimore's Mount Vernon neighborhood. Murphy promised to transform the abandoned property
into an affordable housing complex but failed do so. When she sold the property, Murphy did not repay
the grant and any profit she might have earned from the sale.
After The Daily Record's article, the city began negotiations with Murphy to determine how much she
owed the city.
"Everything has been resolved" regarding 10 W. Chase St., Kenneth Frank, Murphy's attorney, said.
"So there should really be no controversy about this Alcott thing."
Frank said Murphy did not profit from the building's sale.
"BettyJean Murphy spent a ton of money on this project," he said. "The perception that she walked
away with a windfall is just not accurate."
Baltimore's Board of Estimates, the city's spending panel, is scheduled to vote today on the loan for the
Alcott Place Apartments, according to the board's agenda. The $1.32 million loan would come from the
federal HOME Investment Partnerships Program.
Savannah would use the money to modernize Alcott Place, a former elementary school at the corner of
Reisterstown Road and Keyworth Avenue in the city's Park Heights neighborhood.
Savannah redeveloped the former Louisa May Alcott school in 1990, partnering with Baltimore
developer Struever Bros. Eccles & Rouse to convert the facility into 44 apartments for the elderly.
Struever Bros. has since withdrawn from the partnership and is conveying its interest to Savannah,
according to the board agenda.
With the HOME loan, Savannah would upgrade the apartments' appliances, hardware and common
areas. The company would also complete roof repair and begin alterations to make Alcott Place
compliant with the Americans with Disabilities Act, the agenda said.
"This is needed repairs for a low-income housing project," Frank said. "This is not a money-making
project."
The city earmarked funds to upgrade Alcott Place months ago, he said, but delayed them when
criticism over 10 W. Chase St. cropped up last year.
"Everyone is not happy that this has been put off this long," Frank said of the loan for the upgrades.
"The people there are the ones who are suffering."
Robert C. Embry Jr., president of Baltimore's Abell Foundation and a former city housing
commissioner, said it is difficult to determine whether the city should loan money to a developer before
settling past debts.
"I don't know what would motivate them to do it in light of the controversy [with 10 W. Chase St.],
unless the benefits outweigh the burden," Embry said. "It may be the right thing to do; it may be not."
Curran thinks the sale of 10 W. Chase St. should be a lesson for city housing and development officials.
"As we move forward in the future, dealing with developers in situations like this, we need to ensure
that the city's position in these loans and grants that we give is protected," Curran said.
Copyright 2007 Dolan Media Newswires
Provided by ProQuest Information and Learning Company. All rights Reserved.