Published: January 05, 2008 10:52 pm      

Klots Mill still in the running

CUMBERLAND — The Klots Mill project may not have been successful in receiving federal funds this fall, but no worry, Paul Fitch isn’t about to abandon it.

Fitch of The Landmark Group — Fitch Development in Winston-Salem, N.C., is behind the potential redevelopment of the former Klots Throwing Co., a silk manufacturing business at 917 Gay St. The large brick building eventually housed the Tri-State Discount Center and most recently the Western Maryland Food Bank.

Klots Mill is to become home to 36 lot apartments with townhouses to be constructed nearby. The most financially feasible way to do so, though, was to apply for the Community Development Association Federal Low-Income Tax Credit Program.

A competitive process, the Klots Mill project was not successful this year.

Fitch said he’s already met with representatives from the state agency and went over for what they deducted points.

“There were a couple of things we misunderstood,” he said of the original submission. “But they’re easy to correct.”

Because Fitch still believes this will be a “great project for the city,” he intends to resubmit an application in March and expects funding awards to be announced in June.

Should the application be successful, it will be the group’s first project in Maryland. Construction also could begin in the October-November time period and take 12 to 14 months to complete.

Fitch also credits his son, Hollis, with finding the building on the Internet. With a company known for converting historic buildings into apartments, Fitch said the Gay Street building fits well into that structure.

“We’ve had a very positive response from everyone in local government,” Fitch said. “That meant we really wanted to develop this project.”

Mayor Lee Fiedler also remains 100 percent behind the development and said the city will do what’s necessary to see it come to fruition.

“This is a top project for us. ...,” he said. “I have assured Paul Fitch that this one is important to us.”

In August, the city endorsed the project and agreed to a payment in lieu of taxes for 15 years with $11,200 to be subtracted annually from the property tax bill. Fitch has said previously that he plans to put between $6 million and $8 million worth of renovations into the building alone.

The Housing Authority of the City of Cumberland also is a 10 percent partner in the venture and has been shadowing Landmark. The authority eventually will submit an application for the program for funding to build townhouses on the former Benjamin Banneker Apartments site on Frederick Street.

One project, however, was successful in the tax credit program.

East Side School, which was built in 1921 and has been vacant since 1984, will be converted into apartments with two-story townhouses with third-floor loft apartments constructed nearby.

Al Borvice of the Housing Development and Neighborhood Preservation Corp., based in San Francisco, is behind this project that was awarded $7.5 million in those housing tax credits and a $2 million Rental Fund Loan from the state’s Department of Housing and Community Development. A private mortgage will provide the remaining funds.

The city agreed to a 15-year abatement on city property taxes, not to exceed 60 percent. The city also plans to provide $200,000 in improvements such as water, sewer, road and storm water.

Borvice said last month that the renovated building and townhouses off Reynolds Street could be ready for occupancy in mid to late 2009.

The projected $10.5 million project will renovate a blighted property that’s easily seen from westbound Interstate 68.

Contact Maria Smith at msmith@times-news.com.