Presbyterian Home Drops Carsins Run Project

UPDATE (4:40 p.m.)—A nonprofit has scrapped plans to build a  retirement community in Aberdeen after a state delegate withdrew a bill that would have granted that project a  15-year tax exemption.

The bill also included a Harford County hotel tax, long sought by local lawmakers but now dead for this General Assembly session.

The nonprofit, the Towson-based Presbyterian Home of Maryland Inc.,  announced Thursday it had withdrawn plans to develop and operate The Village at Carsins Run.

PHM said in a statement it still hopes to build a retirement community in Harford County, but not in Aberdeen.

“The real loser here is the City of Aberdeen,” said Susan Shea, president and CEO of Presbyterian Home.

Carsins Run, which was to have been located on 138 acres next to Ripken Stadium, would have offered 183 independent-living units, 10 assisted-living beds and 10 comprehensive-care beds.

“The Village at Carsins Run would have meant jobs in a community that desperately needs them," Shea said.

"It would have meant additional tax dollars because it would have paid for its own water, sewer, trash, and snow removal, while offering unreimbursed, long-term health care and unreimbursed housing for area seniors who run out of funds.”

State Del. Mary-Dulany James, introduced House Bill 584 last month. It would have established a 5 percent hotel room tax in Harford County, long sought by Aberdeen Mayor Michael Bennett and other local elected officials.

But the bill also stipulated Presbyterian Home would receive a $600,000 annual tax break, which the mayor and Aberdeen City Council members opposed.

The proposal split residents.

Opponents argued it would be unfair for some seniors to live tax-free while others struggle to cover basic living costs.

Supporters countered the retirement community's benefits would have outweighed  the drawbacks.

Bennett maintained Thursday evening that city officials objected to the tax exemption, not the project itself. 

But, he said,  if Presbyterian Home couldn’t make the project work without the tax exemption, it may not have been feasible.

“That makes me question the financial stability,” Bennett said. “I don’t know that’s the kind of business we want in the city.”

Bennett said he had no problem with the assisted-living and nursing home components of the project being deemed tax-exempt.

“We just had a problem with the independent-living units getting tax relief,” Bennett said.

The tax exemption for Presbyterian Home should never have been married to the Harford County hotel tax, Bennett asserted.

“They’re entirely two different entities,” the mayor said.

James could not be reached. But a spokesman for the delegate  confirmed the bill had been withdrawn from committee. James released a draft fact-finding document related to bill. It said such tax exemptions for retirement communities aren't unheard of.

Last year, Harford County government backed  a complete tax credit from both the county and municipalities “regarding real property that might otherwise be levied on a [continuing-care retirement community's] living units.”

James's question-and-answer document also gives the history of municipal property taxation of such communities in Maryland. Until the late 1980s, such facilities enjoyed tax exemption on all real property used for nonprofit purposes.

“Even though Maryland has passed an entire code section relating to CCRCs since 1988, including allowing independent-living units as the apartments are now called, to be tax-exempt, the decision is done on a case-by-case basis,” the document states.

In a case involving Asbury Methodist Home, a Montgomery County retirement community, the Maryland Court of Appeals reversed lower courts and ruled Asbury must pay taxes, costing the nonprofit its tax-exempt status.  But the court did so  because the “charitable giving” at Asbury's apartments in three buildings, separate one-room apartments and a health center was not enough to merit the tax break.

“The unclear, ambiguous Asbury ruling has resulted in a chilling effect on all housing combined with medical facilities for the elderly.... Once, the historically understood tax exemption [was] granted so long as the organization was a charity or not-for-profit,” James's Q&A states.

Shea said Presbyterian Home has not given up its goal of bringing Harford its first continuing-care retirement community, meaning it offers care at different levels according to residents' health needs.

“PHM is determined to build the continuing-care retirement community,” Shea said. “Unfortunately, it will not be built in Aberdeen.” 

The proposal came after years' planning and feasibility studies by the state’s Department of Aging and the SAGE Policy Research Group showing strong demand for senior housing in Harford, where the elderly population is growing rapidly.

Under House Bill 584, a portion of the proceeds from the hotel tax would have helped Aberdeen pay for maintenance and repairs at Ripken Stadium. Another portion of the hotel tax proceeds would have gone toward building a Harford County convention center.

The bill would have given a 15-year tax exemption from municipal and county property taxes to Presbyterian Home.

James has said she hoped the proposal would draw Aberdeen, Presbyterian Home and Harford County representatives to the bargaining table to hash out final details. But that didn’t happen.

Under the bill, Harford County would have had to distribute half of the total hotel tax revenue collected through a tentative funding agreement. Of that half, 70 percent would have gone to tourism and promoting Harford County. 30 percent to municipal grants in Harford County.

The other half of the projected annual tax revenues would have gone to Aberdeen to cover the $600,000 in annual lost revenues because of the tax credit for Carsins Run.

Bennett said the whole formula was flawed because at its inception the hotel tax had nothing to do with a retirement community.

“At the end of 15 years, if we had enacted this, we would be getting nothing from our hotels,” Bennett said. “It was just done wrong.”

Bennett said Aberdeen has 1,019 of the county’s estimated 2,700 hotel rooms.

“We asked for 3 percent of the 5 percent from our rooms,” Bennett said. “The other 2 percent would go to the county.”

Shea said Presbyterian Home already had made a commitment to build a $2.4 million water tank that would have been donated to the City of Aberdeen. 

This Carsins Run proposal, meant to sweeten the pot for Aberdeen, came at a time when the city is struggling to supply enough water for new development.

The City Council this week took up a measure that would raise the water-connection charge 25 percent, per household, to $10,500 from $8,400. A public hearing on the proposed increase is scheduled for March 28.

Shea said Carsins Run “would have meant that seniors, many of whom have spent their entire lives in Aberdeen, would have been able to stay in their community and continue to support local businesses, nonprofits and religious organizations. Now those seniors will have no choice but to move elsewhere if they want to take advantage of the lifestyle options a CCRC affords.”