May 05, 2010; Baltimore Sun | We wrote in the Newswire some time ago about the pending bankruptcy of an otherwise well respected community development corporation in Baltimore, the Patterson Park Community Development Corporation. The CDC had been the owner of a commercial building in the Patterson Park neighborhood, which was used as a community meeting place as well as space for a restaurant.
The building has reverted to the ownership of M&T Bank, which was owed $790,000. M&T put the building up for auction, but rejected the winning bid of $298,000 offered by a group of residents who have already identified three tenants for the site. The bank apparently also rejected two additional offers from the residents, and decided to schedule another auction for next week.
The Patterson Park Neighborhood Association has protested the second auction vociferously, noting that the winning bid was from residents who were the only bidder to have “shown any interest in responsibly investing in our neighborhood.” The residents are getting help and advice from the Southeast Community Development Corporation, the Abell Foundation, and a nonprofit called Healthy Neighborhoods. The president of Healthy Neighborhoods, longtime affordable housing finance expert Mark Sissman (disclosure: Mark was the head of the Enterprise Social Investment Corporation when this author was the Vice President for the field operations of the Enterprise Foundation in Columbia, Maryland) said he “tried to open a door to M&T,” which is a participant in Healthy Neighborhoods’ $40 million home purchase and rehab loan pool and sits on the organization’s board of directors.
Nonprofit commercial office ventures are tough sledding even in the best of circumstances. A reference by the bank to the nonprofit CDC’s bankruptcy, even though the CDC isn’t involved in this purchase, seems to hint at the bank’s reluctance to enter into a community-oriented deal for the property. If the bank has qualms about the offer, the residents appear to have gathered an array of credible nonprofit and foundations in its camp to provide advice and hopefully access to investment capital, all of which could be brought to the table with M&T to discuss the options around the residents’ offer. So why go to a second auction? Something is missing in this story.—Rick Cohen