After undergoing an arduous construction process and then sitting vacant for more than a year, the Argent is set to be the newest home for scores of people in South Silver Spring. An
official ribbon cutting is tentatively scheduled for September 16 and residents are expected to move in shortly thereafter.
Built during the economic boom, the Argent was designed to be condominiums priced between $300,000 and $500,000. But after a nearly year-long construction delay, due to thick layers of bedrock, the building quickly closed its sales office after a soft opening in 2009. The residential bust turned into a financial failure for the project’s original backers, Corus Bank, a Chicago-based lender that was taken over the FDIC last September.
“The property was developed to be market rate condos,” said Stan Herskovitz, principal of Paradigm Financial Consulting, which bought the building licensed under Palas Properties, LLC. “Had the project gotten done a year earlier, it would have sold [as condos]. The market was there. But instead of getting done in the summer of ’08, it got done in ’09. There was no market.”
Herskovitz pointed to the dubious record of Corus Bank, saying the giant lender financed “many many many other condos in the Eastern and Western portions of the United States that either didn’t get done or were sold.” There was clearly a reason the bank collapsed.
As the building remained dormant, Herskovitz’s Park City, Utah based-firm purchased the Argent and asked Montgomery County for financial incentives to turn it into affordable housing. The complicated deal, finalized at the end of July, resulted in nearly $25.3 million in municipal bonds and tax credits for the project.
“The primary reason [for
supporting this project] is that there is a shortage of affordable housing in
downtown Silver Spring,” said Rick Nelson, Director of Montgomery County’s
Department of Housing and Community Affairs. “When you think about all the units
that have been produced over the years, there is a lot of it that is really
expensive. Considering the location, it was a prime spot for affordable
Herskovitz, a 40-year
veteran of the multi-family real estate business who has been creating
affordable housing since 1992, also saw the allure of expanding the housing
options in downtown Silver Spring.
“We want to go out to good
neighborhoods and good locations like Silver
Spring and give a good product at an affordable rent. This allows
people who otherwise couldn’t afford it the opportunity to live in a great
neighborhood, live a few blocks from the Metro, from downtown, and enjoy a
lifestyle at a rent they can afford,” said Herskovitz.
All of the building’s 96
units are subject to income limits, with 10 units going towards households that
make under 50 percent of the Montgomery County’s area median income and 86 units
going to households making under 60 percent. The area median income for Montgomery County (DC-metro area) is $103,500.
One bedroom units will be
rented for $1,069 and two bedroom units for $1,272.
Based on the 60 percent rate, an
individual renting a one bedroom unit must earn between $30,000 – $43,500. The
income range for a two person household is $34,000 – $49,680. More information
can be found on page 6 of this Housing Opportunities Commission document.
“We’re talking about people
going out every day and working. They are just like someone else,” says Nelson,
adding that the housing program is geared toward struggling families and recent
college graduates alike.
But some in South Silver
Spring have expressed concern about the building’s use, worrying about an
increase in crime and a decrease in property values– fears that Nelson says
“Whether its low income
housing, assisted housing, affordable housing – what people see is stuff we saw
on television in Chicago: decrepit, terrible shape, not very well managed,” he
says. Similar projects in Montgomery County, be they in Bethesda, Gaithersburg
or Silver Spring, are “well integrated into the community and not
an island unto itself.”
One shining example in South
Silver Spring is the Gramax Towers, which was the first residential building
built for lower income residents in South Silver Spring.
“In terms of the Gramax,
everyone know it’s there but it hasn’t caused a problem,” says Nelson.
Gary Cambpell of Grady
Management, the Argent’s local management company,
expects residents to move in by October 1 and for the entire building to occupied by