Charlottesville City Council has two items on their regular agenda on February 20, 2024 related to the ongoing partnership the city has with the Charlottesville Redevelopment and Housing Authority, a separate political jurisdiction yet one closely related to city government.
The first item is a resolution of support for the second phase of Charlottesville Redevelopment and Housing Authority’s redevelopment of South 1st Street.
“The proposed plan includes demolishing existing public housing units and constructing approximately 113 residential units alongside office and community spaces,” reads the staff report.
Council previously supported this second phase in February 2020 and since then $3 million in city funds have been allocated and disbursed. CRHA wants to confirm that Council is still committed to helping pay for a lot of the cost.
“The request, as articulated by John Sales, Executive Director of CRHA, involves a total funding requirement of $6 million for the project,” reads the staff report.
According to an email from Sales to Alex Ikefuna of the Office of Community Solutions, the construction cost in 2020 for the second phase was estimated at $23 million and the Total Development Cost was $31.815 million.
“After two rounds of open bids and an extended 6-month period of re-design and negotiation with general contractors, the cost of construction is now expected to be $41 million and the Total Development Cost is projected at $56,642,000,” Sales wrote to Ikefuna on February 9.
The CRHA entered into an agreement with Riverbend Development in January 2019 to partner on construction, according to an article on Charlottesville Tomorrow. As part of the process, each redevelopment is being created by a different Limited Liability Company. In this case, the firm is South First Phase Two LLC, with an office address that corresponds with Riverbend Development.
How all of this financing works is something I don’t entirely understand but in a community where the city is purchasing land from CRHA at market-rate and where CRHA is purchasing a new headquarters, these are big ticket items worth tracking. And an important question: What is the breakdown of the Total Development Costs and who is getting paid to do what?
Additionally, the project requires site plan approval by the end of January in order to meet the timeline to secure Low Income Housing Tax Credits necessary for the financing to work. That does not appear to have happened yet, according to the city’s permit portal.
Next up, there is a discussion of amending the formula for grant payouts through Charlottesville’s Rental Relief Program for Elderly and Disabled. The proposal is to increase the maximum income for the program. This is highly technical as you can see in the staff report.
Then Council is scheduled to go back to CRHA to consider an authorization that would allow City Manager Sam Sanders to purchase 405 Avon Street and 405 Levy Avenue from the other government agency. There is no reference to any reason the city might purchase the property, but the January 22 staff report suggested how it might be used.
“This acquisition supports the City Manager’s commitment to homelessness intervention as it could become the site of a facility that serves to meet that need among others,” reads the January 22 staff report. “The intention is to hold the property until a comprehensive assessment of homeless service needs – including shelter beds -is completed, along with a feasibility study to operate 24/7, 365 days a year.”
CRHA will continue to play a role in the property’s future, both now and into the future.
“CRHA will lease a portion of the property back from the City at a nominal rate,” reads the February 20 staff report. “The City will have the ability to terminate the lease on thirty days’ notice when it determines the future use of the property and obtains a building permit for Construction.”
That rent appears to be $10 a month.
CRHA will also develop the property on behalf of the city. Here’s how that looks in the purchase and sales agreement.
“The Seller and Buyer acknowledge that it is the intent of the Seller and the Buyer to enter into an agreement pursuant to which the Buyer will designate the Seller as the developer who will handle the development and/or redevelopment of the Real Property,” reads the purchase and sales agreement.
The city is using funds from the American Rescue Plan Act to pay CRHA for the property, property that the CRHA will continue to use and potentially develop in the future.
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