Thursday, August 8, 2019

The mysterious case of 262 completed apartments standing empty for 9 months

One should think that a gigantic brand-new apartment complex covering two entire city blocks of a struggling inner-city neighborhood should draw plenty of attention, if it remains completely empty a full nine months after a much celebrated ribbon cutting and building tour and if 262 apartments and 17,000 square feet of retail remain frozen in time like Sleeping Beauty ever since.
262 Units completed since Nov 2018 still sit unoccupied (photo: Philipsen)

This morning the eerie quiet around the entire complex was only interrupted by a dark unmarked Sprinter van that furtively backed into one of the alley side parking garage entries before the gate closes again. The scene could not be any more mysterious.

The project in question is La Cite's CenterWest phase 1A apartment complex on Poppleton's Schroeder Street, a project that had been 14 years in the making. At the ribbon cutting on November 2, 2018 Housing Commissioner Braverman said about it: "this is what [Mayor Pugh's] new era of neighborhood investment looks like."  Today, he probably wonders about that.

In all the time since November 2, 2018 only one article in the Baltimore SUN tried to shed some light on the mystery. In May of this year, six month into the hibernation period, the paper headlined "Major Poppleton redevelopment drowning in delays".  At the time, the title seemed to play on the topic of water that the article brought to light: "Major water damage" was quoted from a report that the developer had filed regarding municipal bonds. Those are in play, because the city had to sell them to fund $58 million of tax increment financing (TIF) for the project.  “Due to the failure of these insurance carriers to begin funding the approved scope of [remediation] work the project has been delayed by 6 months at this point", the report was further quoted.

The TIF itself had a somewhat tortured genesis with opposition from Board of Finance member Larry Silverstein after city officials conceded in 2015 that the project was highly problematic and might never get built. In a second session the spending board approved the TIF anyway.
Groundbreaking in February 2017 with Mayor Pugh
(photo: Philipsen)

La Cite's project has been in the making since 2004 when the City had issued a request for proposals and subsequently awarded initial site control to La Cite in 2006.

The course from there was anything but a straight line to success. The entire project had been in question, for example in 2012 when the City and the developer threatened to sue each other for non performance on the awarded sites and Housing had notified the developer of defaulting on the agreement.

But eventually La Cite developer Dan Bythewood and his partner Ian Arias produced. At the ribbon cutting speaker after speaker seemed to have forgotten all past headaches and sang the praises of the project and the entire development team. Development team member Susan Taylor of the magazine Essence closed off with “job well done” and something about “doing God’s work”. The developers also noted that the completed portion was just "8% of what we will build", referring the full 33 acre $800 million project they have in mind for Poppleton.

What could possibly go on right now? Why hasn't been there much visible activity? (In May a few contractors could be seen sitting in one of the retail spaces surrounded by rolled up drawings and papers.) Today furniture in the lobby remains wrapped, doors locked and the garage empty.
Wrapped furniture remains untouched in the
lobby (photo: Philipsen)

Where would water damage come from, in both of the large buildings at once? The note about “extensive water damage to all the project’s cabinets in the kitchens and bathrooms, portions of the cabinets must be removed, replaced, and all surfaces treated, repaired and/or replaced” in the bond report seem mysterious in itself: No roof leak would extend over two large buildings which are separated by a street. Nor would sprinklers go off all at once to cause such damage. Rumor has it that the HVAC system was adjusted incorrectly and caused too much humidity and subsequent condensation. That also appears unlikely during the winter period after the ribbon cutting when heating usually causes air to be too dry. If the heating and cooling is water based (hydronic), a malfunction could cause damage or even bursting pipes from freezing.
Two city blocks rebuilt from the ground up. (photo: Philipsen)

The worker who let the unmarked van into the garage was adorned with a tiny sticker on his shirt that spelled PBI. There seem to be two construction companies in the country under that name. The man was tight-lipped when I asked him what was going on. "Construction issues" he said. When I  asked "mold?" he responded "no". When I pressed on further and asked "structural?" he nodded "yes" and added: "it will be done soon". When I asked about a date, he responded "I can't say that" .

Dan Bythewood, the developer,  responded equally curt to my email inquiry:
"We are building ductwork for HVAC and we are really far along in building 201, with 101 being the larger building and needing more time to complete, but it looks great" Dan Bythewood in an email on 8/7/2019).
This seems to pint towards an HVAC problem but doesn't sound like completion in August as was quoted in the SUN article in May. Further requests to elaborate remained unanswered. So did an inquiry to Housing Commissioner Braverman who is on vacation, two inquiries to the architects at Gensler and an inquiry to Councilman Bullock.
Ribbon cutting Nov 2, 2018 (CharmTV screenshot)

The wall of silence and the difficulties in obtaining public records in the wake of the Baltimore computer outage could explain why the traditional media have not reported on the mystery apartments. They hardly can report rumors.

Not having been able to unearth the hard facts myself, I feel ambivalent about writing this article. But maybe it can help to bring out the truth, at least as far as what happened in terms of basic facts.

The root cause of whatever shortcomings that blocked the buildings from obtaining an occupancy permit are likely mired in some controversy among the many parties involved in construction. In the case something big goes wrong, it is typical that the design team points the finger to the construction team, which in turn may point right back to the design team, whether it is the architect or the engineers. 
The only sign of life: Papers on a table in an
unfinished retail space with gravel floor
The construction team could also point towards errors in the post construction building management if the damage occurred after substantial completion and "turnover" to the owner. However, it isn't clear if that step was ever completed. Apparently no "use and occupancy" permit was ever issued, a fact that saves the owners taxes. Within each of the player teams (Architect, general contractor, owner) there are a slew of subcontracts, each with its own set of responsibilities and liabilities. It isn't surprising that nobody wants to talk.

Meanwhile, cost is racking up. The cost of whatever remediation work itself, the cost of lost rent, the cost of loans and upkeep and the cost for the community for having a white elephant sitting in Poppleton, a community which hoping for a turn-around that 262 households and new retail would bring.

Kitchens and cabinets seemed complete and fine during
the tour at the ribbon cutting
The tax-payers of Baltimore are on the hook, too. The bonds which funded the TIF must be repaid from the increased tax benefits this project would flush into City coffers. But classified as vacant, the project is not yielding the expected property taxes nor the tax benefits from new residents living and shopping in the neighborhood. I don't have the information how much of the TIF has been drawn to date and when the bond service becomes due.

All this is very unfortunate in the long string of hardships that seems to befall this City on a regular base. But whatever happened, it should not be another occasion to gleefully point fingers. However, I think everybody would be better off with more daylight on the indisputable basic facts.

Klaus Philipsen, FAIA

The article has been updated

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