News

Billions In New Investment Could Put Baltimore Back On The Map

Baltimore is undergoing a significant transformation with billions in investments aimed at revitalizing the city. Key projects include a $500 million redevelopment of the Inner Harbor, major stadium renovations, and the $5.5 billion Baltimore Peninsula project. These developments are expected to attract investors, residents, and tourists, but also bring challenges such as housing affordability and congestion. City leaders emphasize the need for new housing and improved public transit to sustain growth and maintain Baltimore’s unique identity (Bisnow).

Housing starts fall to a four-year low

U.S. housing starts have plummeted to a four-year low, signaling potential trouble ahead for the real estate market. The sharp decline in new construction is attributed to rising interest rates, economic uncertainty, and higher material costs. This downturn could impact home affordability and availability, making it a critical moment for prospective buyers and investors to stay informed. (Bisnow).

Input wanted from Carroll residents on affordable and safe housing

Carroll County officials are seeking resident input to improve affordable and safe housing in the area. They are conducting a survey to gather community feedback on housing needs and challenges, aiming to develop better policies. Residents are encouraged to share their experiences and suggestions to help shape future housing strategies.
For more details and to participate in the survey, read the full article on the Baltimore Sun’s website here.

BoA Has Grim News for Homebuyers

Bank of America warns that the U.S. housing market faces prolonged challenges, predicting high prices, limited inventory, and persistently high mortgage rates until at least 2026. Despite slight recent declines in mortgage rates, economists see no immediate solutions, emphasizing that these issues will take years to resolve. Prospective homebuyers should brace for continued market difficulties and limited affordability. Read more about the implications for the housing market and potential strategies for buyers in the full article (Globest).

Four Key Findings From the 2024 State of the Nation’s Housing Report

The 2024 State of the Nation’s Housing report reveals persistent and widespread cost burdens, with 50% of renters spending over 30% of their income on housing. The U.S. faces a significant housing shortage, with rising costs and limited inventory hindering both rentals and homeownership. Federal rental assistance is lagging, covering only 25% of eligible households. Additionally, the nation’s housing stock is increasingly vulnerable to climate risks. Addressing these issues requires substantial public and private sector investment and innovative solutions. Read the full article here.

Dear Friends of Warfield:

On March 26, 2024, the five entities owning the various properties comprising Warfield at Historic Sykesville filed for Chapter 11 bankruptcy protection in the United States Bankruptcy Court. Under Chapter 11 protection, Warfield Companies will continue normal operations, which consists mainly of pursuing the development of Warfield’s vacant parcels and, most importantly, the rehabilitation of the project’s vacant buildings. Vendors and contractors will continue to be paid for work performed post-petition in connection with the project.  
 
The Chapter 11 filing was a direct response to the Town of Sykesville’s actions to take back ownership of the property after selling it to the developer in 2018. These actions most recently included an attempt to foreclose on the property and began in earnest last spring when the town filed lawsuits against Warfield entities in state court to wrest control of the project’s historic buildings from the owner. The town left the developer no other option but to file for Chapter 11 to protect its substantial investment in the Warfield project.
 
The developer currently has over $6 million invested in the project and has cumulatively invested over $14 million, and, subject to court approval, it will continue to fund the project while in Chapter 11 and beyond. In addition to making major capital investments, the developer has worked tirelessly to pursue the state’s original vision for the Warfield property when it was transferred to the town in 2002. This includes taking steps to make the project financially viable and attractive for both private and public investment, which is essential to preserving and putting back into service Warfield’s historic buildings, not to mention achieving the “smart growth” goals set forth in the Town of Sykesville’s original agreement with the state. 
 
It is important to distinguish between Chapter 7 and Chapter 11 bankruptcy. Chapter 7 is a liquidation, which is different from what the developer is pursuing here. Chapter 11 bankruptcy protection will allow Warfield to defend itself from the town’s continued attacks and reorganize while continuing to operate. We expect to file a timely reorganization plan with the court that will enable us to continue pursuing our vision for the project and pay all creditors in full.
 
Please contact Steve McCleaf at 571-215-0000 or send an email to smccleaf@langleyrealtypartners.com should you have any questions or concerns. 
 
Regards, 

WARFIELD COMPANIES

Steven D. McCleaf
Senior Vice President

Gov. Wes Moore and housing secretary Jake Day: Maryland is facing a crisis; now is the time to take action | COMMENTARY

By WES MOORE and JAKE DAY – PUBLISHED: January 9, 2024 at 12:00 p.m. | UPDATED: January 9, 2024 at 12:02 p.m.

Originally published in by Sherry Greenfield Carroll County Times • Last Updated: Sep 04, 2023 at 12:27 pm

The Town of Sykesville and Warfield Historic Properties LLC continue to be embroiled in legal disputes, the first of which was filed in December 2021, and the most recent on Aug. 18.

Warfield, developer of Warfield at Historic Sykesville, a mixed-use housing and commercial development on Route 32, filed a counterclaim in the Circuit Court of Carroll County on Aug. 18, in response to the town’s June lawsuit, alleging that Warfield has made little or no progress in preserving and reusing nine historic buildings at the site for affordable housing, which it agreed to do when the property was purchased in 2018.

The town is asking the court to enter a judgment in its favor and against Warfield Historic Properties LLC and Warfield Historic Quad LLC for breach of contract, according to court documents. The town is also asking to be awarded $3 million in damages.

Warfield’s counterclaim states that the town violated its duty of good faith and fair dealing to cooperate with the developers, according to court papers.

“We have not abandoned a workforce housing project for the historic buildings at Warfield, but the town’s lawsuit and its subversion of our efforts in the past have put this part of the project — admittedly the most important part — on hold,” Steven McCleaf, president of Langley Realty Partners, LLC, which oversees the day-to-day operations of Warfield at Historic Sykesville, said in an email on Friday.

McCleaf said the company spent $8.2 million to purchase the property, helping to resolve more than $5 million in town debt related to Sykesville’s “failed effort” at Warfield, and has invested “millions” since closing on the property in 2018.

“Town leadership has actively disrupted millions in additional investment by disparaging the developer both publicly and in private with capital partners, contractors, and consultants,” he said. “In addition, town leadership has consistently refused to meet with the developer to discuss commercially reasonable proposals for the future of Warfield and has rejected mediation.”

McCleaf said the town’s denial of due process, and the lawsuits, indicated Mayor Stacy Link’s sole intent is to seize control of the property, and put at risk more than $30 million in state and federal incentives needed to make Warfield viable.

“The town owned the property for 16 years and failed in its efforts to rescue Warfield’s historic buildings or to create an economically viable project — going millions into debt in the process,” he said. “The town’s lawsuit is misguided. It is a recipe for disaster.”

Link issued her own statement Friday in response to Warfield’s countersuit.

“A party may assert as a counterclaim any claim that party has against any opposing party, whether or not arising out of the transaction or occurrence that is the subject matter of the opposing party’s claim,” Link said. “That’s exactly what they’ve done here. Besides its contents having nothing to do with the town’s original filing, which is merely an exercise in accountability to the preservation agreement, the counter claim lacks merit.”

Link is out of the country and issued her statement through email.

Click here to read the article.

Staff Commentary

Originally published in the Baltimore Sun by Dan Rodricks • Aug 25, 2023 at 12:50 pm 

If he can find time, Gov. Wes Moore might want to take a ride to Sykesville to deploy his big smile, positive nature and power of persuasion to resolve a bitter dispute between the Carroll County town and a developer. I mean, why not? There’s a legitimate place for the Maryland governor or his housing secretary in the Sykesville mess.

The state still has an interest in what happens on the grounds of the old Springfield Hospital Center, a Maryland institution that once housed and treated people with mental disorders.

Under a previous governor, Parris Glendening, the state conveyed a large parcel of Springfield, known as the Warfield complex, to the town. That happened in 2002, with a disposition agreement that emphasized the Smart Growth ideals Glendening championed during his two terms in Annapolis.

The agreement noted Sykesville’s desire to redevelop Warfield as “principally an employment center/office park,” but it allowed for other uses as well, including residential development that would accommodate people of different income levels.

I mention that because housing is central to the dispute between Sykesville and Warfield Historic Properties LLC, the group that paid the town $8.2 million for the parcel in 2018.
The development, Warfield at Historic Sykesville, prioritized the restoration of 19th-century buildings on the property and the development of office and retail space and townhomes.

But then came the COVID-19 pandemic.

The market for new office buildings and retail space dried up while the need for affordable housing, or workforce housing, grew.

In December 2021, the Warfield group requested permission to build less commercial space and more affordable workforce housing. That’s where things got messy.

A hearing in May 2022 on the developer’s request produced the tired, coded claims that workforce housing would change the “character of the community” and lead to more crime. A former Sykesville mayor warned that outsiders with federal housing vouchers — he actually referred to them as “those people” — would be “coming to our schools and our towns.”

For Timothy Maloney, the attorney representing the developer, that sentiment reflects the reason the town wants to now reclaim the historic Warfield properties from his client.
“‘Those people’ are precisely who the town leadership seeks to exclude from living at Warfield,” he says. “It’s why they are willing to walk away from $30 million in federal and state tax credits for housing and revitalization. And it’s why they are trying to take the property back — to keep ‘those people’ out of Sykesville. Sad to say, it’s the driving force behind all of this.” Mayor Stacy Link disagrees. “The Town would welcome affordable housing if it were proposed in a thoughtful, well-planned development,” she wrote in an email. “The plan the developers showed creates pockets of different housing types with the affordable component pushed to the back of the property instead of being incorporated throughout an accessible and inclusive mixed-use development. Our main issue was with the design of the project and its purely residential concept.”
Link said the town plans to address affordable housing in other ways, through “inclusionary zoning practices and relaxed regulations on accessory dwelling units,” the latter the subject of my Aug. 25 column.

But Steven McCleaf, a principal in the Warfield group, is not convinced. “Affordable housing of any kind was certainly not a pillar of the platform of either Mayor Link or her predecessor,” he says. “Despite a well- demonstrated shortage of affordable housing, the town has failed for decades to address the issue.”

On June 9, 2022, Ken Holt, in his final year as Secretary of Housing and Community Development, convened a meeting at Sykesville Town Hall to try and get local officials and the developers to work toward a resolution. It failed.

“The town never would even discuss a different range of housing mixes,” McCleaf says. “They essentially shut down communication with us.” Two weeks later, the Sykesville Town Council rejected the developer’s request for more affordable housing. Then, in May of this year, the town took steps to reclaim property from the Warfield group, charging that
the developer had failed to pay for the agreed-upon stabilization and preservation of nine historic buildings.

“This inaction,” said Sykesville Town Manager Joe Cosentini, “leaves the Town with two options: continue watching the buildings be demolished by neglect until they can no longer be saved or exercise the remedies available to the Town from the original sales contract, including reversion of the historic buildings to theTown’s ownership. The Town has chosen the latter.” Maloney filed a counterclaim, charging that Sykesville officials acted in bad faith with his client, and seeking damages. His filing says the town’s motivation for taking the property back is “opposition to affordable housing and animus toward residents of affordable housing.”

More than 140 houses, priced between $300,000 and more than $500,000, are mostly completed and already sold, and McCleaf vows to continue working on some elements of the project.
But litigation over the historic buildings has scuttled the partnership’s plan for workforce housing. Maloney says no other developer or lender would touch a project focused on office, commercial and retail space. “And residential development,” he says, “requires the kind of substantial support that the state was willing to provide.”

The relationship between the town and the Warfield group might have become too bitter to be saved. But, given the state’s historic interest in the place and the need for affordable housing, the governor might want to offer personal mediation. I mean, why not?

Click here to read the article