News from the Executive Office

Construction in Cherry Hill

I used to be a Deputy Commissioner for the Department of Housing and Community Development/Housing Authority of Baltimore City.  I know from the inside how hard it is to get work done.  At that time and to this date, there have been lots of complaints from customers – citizens and others — about how hard it is to get projects done in the City.

Concerns I’ve heard include the delays caused by lots of red tape; inspection issues that come up unexpectedly, not just over the course of perhaps multiple housing inspections, but also sometimes contradictory requirements of fire, health, safety and licensing authorities of various sorts; and financing processes – if public money is involved – can be cumbersome and time consuming and expensive (e.g. Davis Bacon wage rates).  If a developer is acquiring or building on or renovating City property, that can cause delays. And there’s a frustration with decisions that seem arbitrary or political.

We’re involved now with a project to renovate a Housing Authority property for an Early Head Start program that’s to be operated by the Housing Authority with funding from Maryland Family Network.  Due to the City’s lack of resources, we’ve gone ahead and raised 100% of the money needed to do the rehab.  And we’re experiencing lots of difficulty getting to the start of rehab.  The Mayor’s proposal to fund the project with Casino Impact Funds was rejected.  The Housing Authority disputed our architect’s estimate of cost and submitted a proposal to do the work (it has a construction company called HABCO) that’s approximately $150,000 higher than the lowest bid we received.  The Housing Authority has no evidence that it ever had an environmental inspection/review of the property (mainly for asbestos and lead), so we have had to get that done (and will take special measures during renovation to check the floor tiles and replace them as necessary).   The Housing Authority gave us a construction agreement — allowing us to do the $450,000 worth of improvements to their property – but we can’t sign because of clause 14 that accepts responsibility that anything that may happen as a result of the renovations.  MFN’s commercial insurance carrier, a specialty insurer for nonprofits, does not anticipate construction as an activity for its insureds and, in fact, specifically excludes from general liability coverage any agreement that includes indemnification for claims that arise from any construction or remodeling.  As such, no liability protection can be expected from MFN’s liability policy.  Plus HABC is asking for an additional $13,000 for its agents to inspect the work of our contractor, adding even more cost to the project – more money we’ll have to raise?  And  $190,000 of the construction funds, transferred from MFN to HABC in our operating contract, must be encumbered by contract on or by June 30 (that’s tomorrow), but HABC is reluctant to make this commitment without the signed construction agreement.

Maybe this is the nature of such projects.  No one person is blocking progress. It’s not a matter of money. It’s just a steady stream of individual barriers to moving the project along, and each has to be worked out, and some, like the construction agreement, introduce a whole new set of issues to be resolved.

How can we all come together to construct a better future for our children if we can’t even efficiently construct a building to do it in?