Evening star., 1955-02-27
FuiirIuwn
Continued From First Pageo

NOIlJlllucQ ClUIH HllSt oSC'
project Is Isadore Frank, New
York securities broker whose one
and onlysventure into mass hous-
ing was the Laurel subdivision.
In March. 1851. he formed the
FairlaWn Development Corp.
and purchased most of subdi-
vision owned at that time by the
Green Hill Corp, of Hyattsvllle.
In November, 1851. the Fair
lawn Development Co. was au-
thorized by the FHA to build
houses under Section 903 Of the
Defense Housing Act enacted as
a result of the Korean War and
designed to spur building in the
neighborhood of such defense
centers as Fort Meade.
Section 903, Mr. Barringer ex-
planned, permitted the granting
Of insured loans directly to The
builder. up to 80 per cent or ap-
praised value. The section no
longer is in effect.
At that time, said Mr.. Barrin-
ger, the FILA loans were ap-
proved on the assumption there
would be no assessments for
streets. curbs. sidewalks or water
or sewerage lines.
However trouble was brewing.
In 1850, at a special one-day seS-
sion of the General Assembly. the
187-acre tract embracing Fair
lawn was annexed to the city Of
Laurel and the city was author
lied to float S4O0 900 in bonds for
improvements at Fairlawn. In
1851. tie bonding power was
boosted to 100000.
Mr.. Frank, in his role as Sc
curities broker, arranged the sale
Of the bonds.
The city hired Whitman. Re-
quardt & Associates. Baltimore
engineers, to design the plan of
improvements. The project
lunged ahead. In February, 1858,
it hit a snag in Annapolis.
The city sought legislation
to boost the bonding authorize
ton to $500, 900. so the improve
ments could be completed at
Fairlawn.
Edward c. Bell, jr., then
Laurel's city solicitor. urged the
bonds be changed from special
assessment to general obligation
bonds. He maintained the bonds
would be self-liquidating and
would not hurt the towns credit
rating.
Kent r. Mullikin, former floor
leader of the House of Dele
gates and spokesmen for resi-
dents of the "old section of
Laurel. argued the change would
''bust the credit of the town"
and might make the whole town
responsible for paying the in
debtedness if the bonds fell into
default.
The legislators accepted Mr..
Mulllkin's views, pinpointed the
responsibility for payment of the
100000 on the subdivision by
way of special assessments, and
limited the bond issues to 20
years.
With this. the Improvements
were completed and the $780,
900 in bonds were sold.
Mr.. Frank said the first $780,
900 worth Of bonds sold at an
interest rate of 3.9 per cent. The
last 100000 were sold at a SIS
per cent rate.
They were high-risk bonds
because there was no municipal
credit behind them" says Mr..
Frank. A lower interest rate
could have been obtained if the
city had pledged its credit and
this would have permitted lower
carrying charges for the home
owners, he said.
Mr.. Frank said his group 'lost
heavily" on the Fairlawn project,
and added: 1T looked good in
the beginning, but there were
too many things over which we
had no control"
Completed Project.
Last year, the development
firm, he said, completed the prof.
ect so as to fulfill commitments
to the FHA and because we
didn't want to leave a ghost
town"
His interests were ended when
the project was turned over to
u