By Richard Caines

SALISBURY — The future of a downtown parking lot in Salisbury could become clearer with a proposed subrecipient agreement by its developer and the city.

Lot 10, situated next to a state office building, has attracted interest from multiple developers since it was declared surplus property in 2016. Salisbury-based Mentis Capital Partners plans to build a hotel and conference center on the site.

The state of Maryland previously approved $4 million in grants for the project, but during a March 24 Salisbury City Council meeting, questions were raised about what the subrecipient agreement would look like and if the developer would be willing to accept less funding.

A subrecipient agreement is a portion of an award that is distributed to a third party by the recipient of the original award to conduct a portion of the project work that is a collaborative or a substantive contribution to the project, according to the University of Maryland.

“I’d love to see a conference center and hotel built in that section,” Mayor Randy Taylor said. “The question becomes is, with the funding that we have been given, how can we participate legally within the terms of the grant?”

Taylor said he has been in contact with the Maryland Department of General Services and asked the state agency if the developer does not use the entire $4 million for the Lot 10 project, could it be repurposed?

“We have to make a recommendation to the state and then the state gets to decide if they want to repurpose it for our project,” City Administrator Andy Kitzrow said. “Once we give back money, we may not get it back.”

Mentis was one of three companies to submit offers for the land at the intersection of Routes 50 and 13 after the city listed it for sale a few years ago. Founded by Nick Simpson, the company was also behind The Ross, a multi-story building located on East Main Street.

“These funds are pretty close to making that hotel happen, or it won’t happen,” Simpson said. “We’ve already spent at least half a million dollars in good faith working with the city.”

Simpson told the council his company is getting to a point where they are getting tight on deadlines, and they have commitments to Hilton in moving the project forward. He said when they break ground on the site, a pay permit use will be sent to the city that is the equivalent of a house assessed at $250,000 for a period of 80 years.

“That’s day one. We’ll pay a check back to the city,” Simpson said. “Hundreds of thousands of dollars that can be used in other regards.”

Salisbury resident Robert Taylor said during the public comment period that as far as he is concerned, if the developer and the city do not get the $4 million, then they are better off. He said he could show officials other infrastructure projects in the city where the funding could be better used.

“There are plenty of other hotels in Salisbury,” Taylor said. “They don’t get tax breaks. They pay the cost to develop their project. How is this fair?”

Officials said a draft of the subrecipient agreement between the city and the developer is currently in the works, and it tentatively could be presented to the council at its April 8 work session meeting.

Kitzrow said the city sold the parking lot outright with some strings attached on what type of development could go there but stressed to the council that they don’t own it anymore.

“If this was to fall apart, we do not have the same relationship to that parking lot that we have under other parking lots, so I am concerned about our future use of that space if this project falls apart and that relationship fails,” Kitzrow said.

Simpson said the city previously sent in a $6 million request to the state. He said he could make the $4 million work, but it is razor-thin, and they would have to be creative in the design phase.

“It’s like a train leaving the station,” Simpson said. “Once it’s gone, it is so expensive to stop it and go in a different direction. It just doesn’t work. And all that cost gets added on and it’s over.”

Reach Managing Editor Richard Caines at rcaines@iniusa.org.