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Money once again trumped the City Council's agenda Monday night as the members, meeting for the last time before Tuesday's election, voted against a number of items that would increase the city's expenditures, including a tax break for an affordable-housing provider.

The council originally approved an agreement granting the Montgomery Housing Partnership a break in taxes following its purchase of 8508 and 8510 Flower Ave. By exempting a large percentage of the nonprofit's taxes on the property, the city hoped to encourage the group to renovate the property and make its 21 units available at affordable-housing rates for low-income renters, according to spokeswoman Stephanie Roodman.

"Last year in the fall, we were about to set up the construction financing for the project when sort of the low-income tax credit world fell apart along with the rest of the economy," she said, explaining the delay in the project and why MHP was requesting an extension to the city's original 10-year tax break.

MHP has since received enough support from federal-recovery act and similar county and state grants to begin construction, but the nonprofit's primary lender, Citibank, will not support the project unless MHP is ensured an extended tax break from the city. Otherwise, the debt-return ratio would dip below the bank's acceptable minimum, jeopardizing the bank's stake in the agreement.

"And so what we're here to request is that the project maintain this 50 percent abatement of tax credits for as long as the property is affordable," Roodman said, adding that Montgomery County has ensured the group a 100 percent tax break for the life of the building.

Councilwoman Colleen Clay, (Ward 2) immediately took issue with the idea of extending the group's tax abatement indefinitely, or even restarting the 10-year agreement, which is already in its second year. Fellow council members were quick to agree. Clay proposed a slightly modified idea.

"I recommend that we change this to a 50 percent [Payment in Lieu of Taxes] for 15 years so that they can meet their loan criteria," she suggested. "So it's only a little bit more money than we've already committed so we're kind of staying even."

While Roodman agreed to run the numbers to determine if Clay's proposal would overcome the group's hurdle, Councilman Dan Robinson (Ward 3) encouraged Roodman and MHP to attempt to further lower its costs – and thus its debt ratio – by trying to spend less money on the renovations to each unit.

"That seems like a lot of money, $250,000 a unit for a rehab? I mean, wow, I'm stunned," he said. "I'm wondering if in the changed economic climate we have if you could get to the same outcome by reducing the amount you were borrowing."

Clay also pulled a consent agenda item regarding the renegotiation of a land-license agreement previously agreed to between the city and the Takoma Park/Silver Spring Co-Op on Ethan Allen Avenue. In the agreement, the Co-Op pays the city a fee for the use of space for parking dependent upon the amount of spaces available to the business.

Since the Takoma Park Volunteer Fire Department's station began reconstruction next door in October 2008, the Co-Op has indeed had fewer parking spaces available for its customers due to construction equipment for the station taking up space, according to City Manager Barbara Burns Matthews.

"I think the feeling of the Co-Op is just that what they had and what they were previously paying for has been reduced," she said, estimating that 30 spaces before construction has dwindled to about 14.

Clay and her fellow council members argued that, despite the drop, the city has always held up its side of the bargain with the Co-Op.

"They're asking us to reduce the fee of the licensure that they pay for space, I think by half, down to $9,000," Clay said. "[But] as far as I can see, we are complying with the original licensure agreement ... I don't see why we should go back and renegotiate it."