CAMBRIDGE — Following a Cambridge City Council closed session meeting Monday, April 22, Mayor Stephen Rideout publicly shared three decisions made behind closed Council Chambers doors that evening relating to Cambridge Harbor and Cambridge Waterfront Development Inc.
TAX INCREMENT FINANCING
For one, the council has determined that it is a “worthwhile undertaking” to look at establishing a policy or an ordinance on how the city should deal with tax increment financing, commonly called TIFs.
TIFs increase taxes in a certain area. The tax revenues from that increase are used to pay for bonds, which have been issued for public improvement projects in that area.
CWDI has proposed a TIF for its Cambridge Harbor project — a project to develop the space along the Cambridge waterfront — that would increase taxes on the property as it gets developed to pay for two $30-million bonds taken out by the city and county.
In October, the city expressed its concerns with the proposed TIF in a letter to CWDI Executive Director Matt Leonard. It said the council had concerns that the TIF would take too much tax revenue from too large of an area for too long, and the city and county would not receive a “meaningful” tax revenue benefit for decades.
After the council returned to open session April 22, Rideout said that pending getting information about sample policy and getting advice from counsel, “the city will not be moving forward with any consideration of TIFs or a TIF program.”
ARTICLES OF INCORPORATION
The second decision Rideout shared is that he will hold off on amending the CWDI Articles of Incorporation until after the CWDI Board of Directors has had it’s next meeting on May 22.
Rideout said that council had a discussion on this in closed session and that he requested direction from the commissioners. He said the commissioners voted in favor of holding off on amending the articles, with Commissioner Brian Roche abstaining.
Last week, the Star Democrat reported that Roche’s brother-in-law, Mike LeMire, is an attorney with Miles and Stockbridge, a law firm that represents CWDI. In an interview April 19, Roche said he has followed protocol with this potential conflict of interest, including asking for an opinion from the Cambridge Ethics Commission.
April 16, Rideout held a meeting where he proposed amendments to the Articles of Incorporation. At that meeting, Rideout said he thought the amendments would make it more likely that the project is successful. He said he would make a decision in the 10 days following.
Rideout said CWDI has indicated its Board of Directors will discuss the proposed amendments at its May 22 meeting. He said he will hold off on amending the articles to give the board time for comment.
As mayor, Rideout is the sole member of CWDI. Similar to the a shareholder of a company, under Maryland law, a non-profit can have a member or members that represent the group which founded the nonprofit, Rideout said in an interview. As sole member of CWDI, Rideout said he has the authority to make amendments to the articles.
Before the City Council went into closed session Monday, both Commission President Lajan Cephas and Commissioner Sputty Cephas commended Rideout for holding the meeting April 16.
Sputty Cephas offered his support to Rideout.
“We’re in support of development,” he said about the CWDI project. “It’s just how we get it done.”
MEETING WITH HUTCHINSON
The third piece of information Rideout shared after the closed session was that he and Commissioner Laurel Atkiss would be meeting with Del. Tom Hutchinson (R-Dorchester, Talbot, Wicomico), CWDI board President Angie Hengst and CWDI Board Secretary-Treasurer Frank Narr on Tuesday, April 23.
Rideout said he told the council during closed session that he and Atkiss had been invited to meet with the others to discuss the challenges with collaboration on the Cambridge Harbor project. Rideout said he and Atkiss will report back to council with any information worth sharing.
TRANSFER AGREEMENT
Before the City Council went into closed session Monday, Roche said he wanted to make it clear that he supports the sale by CWDI of the Yacht Maintenance Company parcel and the prospect of a hotel being built on the Cambridge Harbor site.
Both of these properties were discussed in an April 12 memo to City Council from City Manager Tom Carroll.
According to council meeting documents, in his memo, Carroll said he recently learned that CWDI is in breach of the covenants of a March 2022 property transfer agreement between the city and CWDI.
In the memo, Carroll said the city conveyed approximately 10 acres of property to CWDI in the agreement. He said CWDI was supposed to issue a request for proposal, select a developer or developers and make a public summary of the request for proposal, per the covenants of the agreement. He said CWDI didn’t do any of those things.
Carroll said that under the transfer agreement, CWDI can’t transfer property the city has conveyed to it until all the covenants are fulfilled.
This means CWDI would not have the legal grounds to transfer the Yacht Maintenance property to Yacht Maintenance, a Cambridge company that offers boat and yacht services, or the land for the construction of a boutique hotel.
At a CWDI Board of Directors meeting March 20, Narr said CWDI plans to sell the Yacht Maintenance property to Yacht Maintenance this year. At the same meeting, Hengst said CWDI is making progress on its agreement with a boutique hotel developer to build on the Cambridge Harbor site, and she hopes the signing of the agreement is imminent.
At the City Council meeting Monday, Roche said the transfer of the Yacht Maintenance property is important so that Yacht Maintenance can invest in and install an 850-pound boat lift.
”This is a comparative economic advantage unique to Yacht Maintenance and the city of Cambridge,” he said. “It is also a fundamental step in expanding the education and employment opportunities alongside the Richardson boat works facility for our citizens.”
Roche said he supports CWDI’s efforts to bring a hotel to Cambridge’s waterfront.
”And although some members of this council and our outgoing city manager have made it known that there are other aspects of CWDI that they want to continue to discuss, that is fine,” he said. “But I do think it’s the obligation of every commissioner here tonight to make it abundantly clear that we will support and take whatever steps are necessary for the expansion of Yacht Maintenance and the prospect of a hotel being built at the site on the waterfront.”
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