Developers seeking $10 million in tax-exempt bonds to buy and renovate the Summit Apartments in Rockville last week won the informal approval of the mayor and City Council.
City officials agreed to the proposal by the Artery Organization pending a vote by the city Housing Authority and approval by Mayor John R. Freeland, said Douglas Horn, director of the city's community development department. Artery operates about 400 apartments in the metropolitan area.
The 20-year-old complex on Monroe Street could use renovation, Horne said, and the city is eager to back an arrangement that would save the 235 apartments from condominium conversion.
Under the arrangement, Artery would spend $5 million buying the buildings from Bernard Kapiloff, owner of the Montgomery Sentinel newspaper, and another $5 million to renovate the apartments.
In return for the tax-exempt bonds, Artery representatives have agreed to operate the apartments for at least 11 years, Horn said, and to offer 20 percent, or 47 dwellings, to low- and moderate-income tenants.
Artery also would give a $25 discount on the monthly rent of those units for the first two years, and a $50 monthly discount for the following six years, Horn said.
The city would get $75,000 for a city housing fund from Artery over the first three years, Horn said, and Artery would pay all administrative costs of the bond issue. City officials have stipulated that they will monitor Artery's relocation of tenants displaced by the conversion or by more expensive rental rates once the buildings are revamped.
If the housing authority approves the arrangement--a decison expected within two months--construction work could start next spring, Horn said.