Update 1: Elkton Sr. Housing Loses in Court, But Golden Parachute Firmly in Place

July 13, 2010

ELKTON– The Town of Elkton agreed Tuesday afternoon to settle a lawsuit brought by two citizens challenging the concessions made by the town to accomodate a proposed senior citizens housing project, after a Circuit Court judge refused the town’s motion to dismiss the case.

     After the ruling by visiting judge Raymond E. Beck to let the case go forward, both sides hammered out an agreement under which the town conceded it lacked the proper legal authority under town ordinances last December when it granted concessions and waivers of fees to an unrelated property at 110 Collins Street, owned by Cecil Bank, and sought to transfer those waivers to the Elkton Senior Housing Project on High Street.  The town also agreed to pay $4,000 in legal bills incurred by the plaintiffs, Robert Litzenberg and James Nicholson.

   In addition, the developer of the project,  the Ingerman Group, of New Jersey, agreed not to sue Litzenberg and Nicholson. Keith Baynes, the attorney representing Litzenberg and Nicholson, told the court that the developer had threatened to sue his clients for speaking out about and filing their lawsuit over the town’s handling of the project.

   But evidence presented in court also showed that the Town of Elkton has been busy changing ordinances in recent weeks to accomodate the developers, in what appeared to be a back up plan in case the town lost the lawsuit.  So, while previous town approvals and concessions for the project were voided by the court settlement, the town, the developer and other interested business entities will get a “do-over” under recently revised ordinances tailored to fit the senior housing project.

    Before the agreement was reached, Judge Beck observed, “It seems that whenever a mistake was found you’re (the town) backing up and changing the ordinances.” It appeared that the town was saying, “can we make it all retroactive” when the question, the judge said, was really “shouldn’t they have to start all over again?” 

   As a result of the settlement, that is exactly what will have to happen: the developer and Cecil Bank, the owner of the Collins street property that is to be sold to the developer under a separate agreement, will get a “do-over” through the town review process. Given the town board’s support of the project, the outcome is hardly in doubt. But opponents will have a chance to raise more questions in public meetings.

  UPDATE: The court hearing revealed that the Town of Elkton has repeatedly revised its ordinances in recent weeks to accomodate the Elkton Senior Housing project. (The project is a profit-making undertaking by The Ingerman Group of New Jersey, with more than $6  million in federal aid, most of which has been passed through the state government, according to records of the state Department of Housing and Community Development.)

    Plaintiff’s attorney Keith Baynes pointed out that the senior housing project did not meet the minimum acreage requirements for such a project in Elkton under town ordinances in place at the time the concessions were made. The required acreage was 1.2 acres but a few weeks ago, a site plan submitted to town planning officials showed that the site was .2 acres short. So the developer, and representatives of the politically-connected Cecil Bank, asked the Cecil County government to sell more than 3,897 square feet of nearby county-owned land to the project. After a brief public hearing at which no citizens spoke out, the county commissioners voted in a subsequent work session in June to sell the land to the developer for $14,925. ( No independent appraisal of the land was performed, sources told The Cecil Times.)  Norman Wilson, the county attorney, signed off on the deal. Wilson also represented the Town of Elkton in Circuit Court on Tuesday.

   With the county land ostensibly in hand, the senior housing project would seem to meet the 1.2 acreage requirement. But, apparently taking no chances, the Elkton town board held a 4-minute public hearing in late June, at which no citizens spoke, and subsequently approved, on July 7, a revision to town zoning ordinances allowing a senior housing project to be located on just 1 acre of  land.  Judge Beck on Tuesday questioned that action, saying, “It seems that whenever a mistake was found, you’re backing up and changing the ordinances.”

   Attorney Baynes told the court Tuesday that the key issue was that, under town ordinances then in effect, the town lacked the legal authority to grant the Cecil Bank-owned property concessions on water and sewer and other fees that were then transferred to the Ingerman Group’s senior housing project. Under the settlement reached Tuesday, the town conceded that point.

   Baynes pointed out that the Ingerman group did not actually own the Collins Street property, or the High Street properties on which the actual 60-unit apartment project was to be located, at the time the concessions were made. He noted that the recent town board changes in relevant ordinances require an applicant for concesssions to actually own the properties in question. So as part of the “do-over” the developers would have to actually purchase the properties before being eligible for the fee waivers and concessions.

  The Ingerman Group told the State Department of Housing and Community Development that the cost of the project was $10.8 million, state records show. However, David Holden, a self-described “development principal” of the Ingerman Group, told The Cecil Times Tuesday that the actual cost of the 60-unit project was now up to at least $11.5 million. Part of the increased costs related to the token sum paid to county government for the small parcel sold recently to the developer. But much of that figure is related to the undisclosed amount that the developer will have to pay to Cecil Bank (a subsidiary of Cecil Bancorp) for the Collins Street property.

    The Collins Street property was not included in initial filings either with the state housing agency or the town of Elkton. That additon suddenly surfaced a few months ago as part of the water/sewer/and related fee charges that the Town decided to waive and were a target of the lawsuit.

    The Collins Street property owned by Cecil Bank, which the developer has identified as a partial financier of the senior housing project, is a derelict property condemned by Elkton health officials, according to town records. Cecil Bank is under current order by the Federal Reserve to clean up its inventory of “non-performing assets,” federal records show.  The Collins Street property, which reverted to bank ownership after a borrower defaulted, would fall into such a category.


UPDATE:  An email from Kimberly Kamp, assistant administrator for the Town of Elkton, states that the Ingerman Group has agreed to pay the $4,000 costs ordered by the Circuit Court to be paid to the winning plaintiffs for their legal fees. In court, it was stated that the town would have to pay those fees.  Considering that the Ingerman Group now has to do a “do over” with the town of Elkton on its various c0ncessions, zoning enhancements, etc., under the court ruling, the developer’s decision to take on the fees levied by the court raises new questions to be addressed by opponents of the town  processes on this project.

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