Former Memorial Hospital site to be developed
Jan. 10—CUMBERLAND — The Cumberland Economic Development Corp. board voted Tuesday to transfer the former Memorial Hospital land in South Cumberland to a housing developer.
In a press release, CEDC officials said the 9-acre tract, located along Memorial Avenue, will be acquired by a Bethesda-based real estate developer with the potential of $36 million of investment taking place at the site.
"RAZ Development and its subsidiary, A1 Lateef Properties, LLC, and the Cumberland Economic Development Corp. are pleased to announce that they have entered a contract governing RAZ's acquisition and development of the former Memorial Hospital site for new market-rate apartments, town homes, and single-family homes," the release said.
According to the CEDC, RAZ is a privately held developer and asset manager with over 10 years' experience in all phases of residential and commercial real estate development.
"RAZ was introduced to, and fell in love with, the greater Cumberland region during its $10 million dollar acquisition of 10 Commerce Drive, Cumberland in 2021," the release said. "RAZ has partnered with local businessman Paul J. Kelly, Jr. (the former director of the CEDC) to lead the Memorial Avenue development. The partners are excited and well-positioned to deliver another multi-million dollar project to the region that will blend seamlessly into the adjoining neighborhoods, meet the pressing housing needs of the region, and attract new families and individuals to the area."
"I talked to Paul (Kelly) about this several months ago and I do trust his judgement," said Dustin Freas, CEDC board member. "These guys are the real deal. They have done a number of projects like this so I think it will be a good thing."
"We vetted several different developers with this particular site," said Miller. "RAZ seem to get what we wanted to do and were willing to work with us. Part of the attraction to this group was the fact they have a lot of personal capital. They are heavily capitalized."
Miller said the development of the hospital site has been a top priority since a comprehensive housing analysis was conducted in 2019 indicating the city needs additional modern housing.
"We want to make sure our employers remain here," said Miller. "It becomes about job retention. We need to be addressing housing in our community and it's been a long time coming."
Miller said the development will not be for low-income tenants. "It will not be subsidized housing," he said.
Three different plans, including drawings, were presented to the CEDC, according to Miller.
"It is basically mixed use," he said. "They will phase the project in. They will probably have a high-density unit which will then be surrounded by a couple of town homes with a second (round) after. They will judge the market as they build it out."
Miller said the CEDC recreated a credits program to provide incentives for the developer.
"Under the program a percentage of the new tax revenue (collected by the city) will be issued as a tax rebate back to the developer," said Miller. "There are two main incentives: the credits program and a local monetary contribution. A 10% match of the developer's investment not to exceed $3.6 million (is available). In others words, a maximum local contribution could turn into $36 million of private investment."
Miller said the project is tied to a timeline with certain performance measures, with the local contributions paid out similar to a draw schedule. He said the CEDC will be responsible for securing the funds for the local contribution.
RAZ is expected to perform additional due diligence in the next six months as well as conducting engineering, land surveys and permitting. Construction could begin after that.
CEDC board member Jonathan Hutcherson abstained from voting. He said he has done business with Paul (Kelly) and Kelly "owns shares" in Hutcherson's company. "I did not want any appearance of any kind of conflict," Hutcherson said.
Memorial Hospital operated from 1929 to 1996 before be razed in 2015. The parking garage remaining on the tract will likely be incorporated into the plans.
Michelle Martz, president of UPMC Western Maryland, said added housing would be "good to attract physicians and other medical professionals to the area."
"This is a big win," said Miller. "Not everyone wants a fixer-upper home and this will provide options."
Greg Larry is a reporter at the Cumberland Times-News. To reach him, call 304-639-4951, email glarry@times-news.com and follow him on Twitter @GregLarryCTN.
