CRHA approves $23 million in bonds for Midway Manor renovations
The Board of Commissioners for the Charlottesville Redevelopment and Housing Authority has taken the first step toward issuing up to $23 million in bonds for a California-based company to renovate Midway Manor in a way that will keep existing affordability requirements in place.
“This is a 98-unit elderly affordable housing development on Ridge Street very close to the Greyhound station and the proposal is to issue some bonds to assist with the financing of a comprehensive renovation of this project,” said Delphine Carnes, the legal counsel for the CRHA.
Standard Communities closed on their $16.45 million acquisition of Midway Manor on January 13. They say that the current affordability levels will be maintained, and common spaces and amenities will be upgraded. They’re asking the CRHA to issue “exempt facility” bonds to renovate the 98 units. No new market-rate units would be added.
“The role of the housing authority in this particular project is as a conduit bond issuer,” Carnes said.
That means the CRHA would not have any obligations for the property, and neither CRHA or the City of Charlottesville would be responsible for paying back the bonds. Carnes said there were benefits to issuing the bonds.
“First, they ensure the continued renovation and redevelopment of affordable housing units in the City of Charlottesville which is very complementary to your own mission but it doesn’t cost you a dime,” Carnes said. “As a matter of fact, it creates some revenue to you because you are receiving a fee for being the issuer of these bonds.”
Carnes did not have a number on hand at the public hearing, but said the funding could be used for any purpose by the CRHA.
The CRHA will need to approve the project once more after the bond documents are finalized.
Steven Kahn is a director with Standard Communities. During the public hearing, he acknowledged that many do not know what his company does.
“We’ve got about 13,000 units of affordable housing across the country in 19 different states,” Kahn said. “This will be our first project in Charlottesville but hopefully not our last as we see to it that we try to do our business the right way and always get invited back for repeat performances and we’ve done that very successfully across the country.”
Kahn called Midway Manor a tremendous asset that has served a population in need of housing and a need for certainty. The current affordability requirements are running out.
“And our intentions with Midway Manor are to take the federal rental subsidy contract that does expire in a couple of years and renew that for as long as the [U.S. Department of Housing and Urban Development] to do so which is at present is a 20-year contract,” Kahn said. “And in partnership also work with [Virginia Housing Development Authority] to receive an allocation of four percent low-income housing tax credits which will allow us in partnership with these bonds to do a very extensive renovation of the property.”
Kahn said the renovations would be expansive with full upgrades of interiors as well as an energy-efficient retrofit of heating and cooling systems and electric systems.
The specifics of how renovation will work are not yet available, but Kahn said the hope is to not relocate tenants while the work is done over an 18-month period.
“We’ve got a tremendous amount of experience doing that,” Kahn said. “North of ten thousand units completing renovations without displacing residents, even during the renovation process.”
The executive director of the Public Housing Association of Residents asked for careful consideration of the issuance of the bonds.
“I’ve spoken with two resident leaders at Midway Manor and their desire is to come to an answer as expeditiously as possible about the status of the building,” said Shelby Marie Edwards. “To be clear, I know CRHA does not own the building. And if anybody can help them make sure the units are affordable and that the building is upgrade and becoming of our citizens they would be grateful for the help. They are looking for the answer to the question: What’s going to happen to the resident. Where are we going?”
Kahn said Standard Communities is a “high-touch” organization when it plans for these projects to make sure residents know what is going on. He said there will be a kickoff meeting for residents when the project is closer to moving forward.
“Miscommunication or misinformation spreads very quickly through communities and we try to make sure that it is not something we are a part of,” Kahn said.
Kahn said they are hoping to close the sale of the bonds this summer and get started with construction soon after. In the meantime, he said there were a number of issues that Standard Communities know need to be fixed.
“There are a lot of things that we became aware of during our due diligence of the property that need some attention before then,” Kahn said. “We’ve put those underway. Elevator modernization is one of them. I know there [are] some concerns with the intercom system at the entryway.”
The five CRHA Commissioners who were present on the virtual meeting voted unanimously to authorize the bond issuance.
It is important to note that the Low Income Housing Tax Credits are in a separate category than the competitive ones that are being sought for other projects in the area.
“The four percent LIHTC pool is noncompetitive while the nine percent pool is very competitive,” said John Sales, executive director of the CRHA.
Sales said Council will also have to approve the issuance of the bonds.
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