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Brokered Gift Yields Award for Orchard Development
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Healthy Families is one of the social services organizations in Howard County, Md. that receives funds from the nonprofit Columbia Foundation. | Orchard Development Corp. in Ellicott City, Md. received the 2007 Gold Builder Achievement Award for Outstanding Community Service from the National Housing Endowment, the philanthropic arm of NAHB, for brokering the largest donation to a nonprofit in the history of Howard County, Md.
The $2 million donation to the Columbia Foundation, a community philanthropic organization that provides grants and emergency funding to about 60 nonprofit organizations servicing Howard County, has already generated $270,000 and is expected to continue to add between $25,000 and $50,000 annually to foundation grants, according to Barbara Lawson, president and CEO of the foundation.
“When I was presented with the largest gift ever received in this community, it was a little hard to stand up,” Lawson said.
The donation is an interest in the Orchard Club apartments, a successful mixed-income housing complex in Elkridge, Md. The interest had been held by Orchard Club’s limited partner, Enterprise Community Investment, Inc., the equity syndicator for the investor, the Maryland Housing Equity Fund.
“This gift will have a hugely positive effect on the Howard County community,” said Gary Garczynski, endowment chairman and 2002 NAHB president. “And its creativity is a great example for other home builders looking to make a similar impact in their communities.”
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Earl and Mary Armiger | The gift has roots extending back to 1991 when Orchard Club was first developed. The apartments were financed using federal Low Income Housing Credits administered by the state of Maryland, said Earl Armiger, president of Orchard Development. Twenty-five percent are for low-income housing, 25% are for moderate-income housing and 50% are rented at market rates.
Enterprise agreed to purchase the tax credits, providing some of the equity to build the 196-unit complex. In exchange for the credits, the complex had to keep designated units at low-income rates — defined as 50% of the area’s median income — for 30 years.
But after 15 years, Enterprise wanted to divest its portion of the apartment complex. To avoid paying a heavy exit tax, it proposed that Armiger and his wife, Mary, create their own charitable foundation using Enterprise’s interest in Orchard Club. Armiger counter-proposed that Enterprise donate its interest to the Columbia Foundation instead, he said.
Enterprise agreed, which not only resulted in a windfall for the foundation, it also obviated the sale of Orchard Club to cover the costs of an exit tax.
“Here we are taking the same money out of the project and circulating it back into the community,” said Armiger. “It fits into the concept of giving back to the community and it fits into the concept of creating affordable housing.”
Founded in 1969, the Columbia Foundation uses investment proceeds from its endowment to fund human services charities such as the Ulman Cancer Fund for Young Adults and the Domestic Violence Center of Howard County. The foundation also supports cultural organizations such as the Howard County Ballet and educational and community service nonprofits such as the Korean American Community Service Association of Howard County and the Baltimore and Ohio Railroad Museum’s Ellicott City Station ― the site of the first terminus of the first 13 miles of commercial railroad track ever built in America.
“There are so many things in the community that we enjoy, at least partly, because of the Columbia Foundation,” said Armiger, who is foundation trustee.
The foundation’s Lawson added that businesses, particularly area home builders, like to donate to it because the foundation helps improve the community, and because donors can keep track of yields from their donation and how those yields are being spent.
One donor has sent the foundation $5,000 annually for years and those donations now generate between $12,000 and $13,000 a year and the investment continues to grow, Lawson noted.
In many ways, the gift brokered by Armiger is a testament to the legacy of home building visionary James Rouse, who founded the Columbia Foundation and Enterprise Community Partners, the parent of Enterprise Community Investment, and the town of Columbia. Both Rouse and Armiger have been vocal advocates of affordable housing communities such as the Orchard Club apartments.
“I think it probably stems from my starting off as a city planner,” said Armiger, who has built more than 700 units of affordable housing in his career. “As a planner, I had a background in social issues and community planning from the social aspect.”
While noting that building affordable housing can be difficult at times, doing so can serve both the public interest and private enterprise. “You can make money building affordable housing,” he said.
For winning the builder achievement award, Orchard Development received a $10,000 donation to give to a charity of its choice, the Columbia Foundation.
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