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ARC Drops Berg Lawsuit

After nearly 11 months of legal infighting and judicial negotiations, the Alexandria Residents Council (ARC) has abandoned its lawsuit to stop the planned redevelopment of "The Berg."

"This is really good news and means we now can move ahead with this project unhindered," said William Dearman, executive director, Alexandria Redevelopment and Housing Authority (ARHA).

In a Sept. 10 meeting, the newly elected board of ARC passed a resolution to approve a settlement offer that ultimately will result in dismissal of the lawsuit, pending since November 2002, according to ARHA.

"The settlement offer is contained in a Memorandum of Understanding which will be executed by ARC, ARHA, the City of Alexandria, and Eakin/Youngentob Associates (EYA) [developers]," noted a release from ARHA. The offer spells out benefits for the residents who will become a part of the project costs, according to A. Melvin Miller, chairman, ARHA Board of Commissioners.

"It defines what the residents can receive, particularly in the way of training to make them eligible to work on the project," Miller explained. "The money for this was already included in our Hope VI grant. But the city is also putting up some additional moneys."

Tracey Roberson, ARC's new first vice president and acting president at the time of the agreement, said, "I believe this was a good settlement. It's going to be very good for the residents. In addition to offering skills training, it will also help people moving back into the new residences when they are finished."

"This agreement, in effect, nullifies the lawsuit and removes the final constraint to the project. It isn't necessary for the court to take any action since the parties have agreed to the settlement and the termination of the suit," Miller clarified. Counsel for HUD has also agreed to terminate the suit, according to ARHA

EYA WAS SELECTED by ARHA in June 2002 to develop the Samuel Madden Homes (Downtown) property, which triggered the lawsuit. It was ARC's contention that the residents should have been given an equal opportunity to purchase the property and undertake the redevelopment.

In order to further their position, ARC initiated a federal lawsuit against the U.S. Department of Housing and Urban Development (HUD). ARC alleged HUD "violated federal law by denying public housing residents the opportunity to purchase the Samuel Madden (Downtown) public housing project." It was filed in Federal District Court in Washington, D.C., on Nov. 25, 2002.

The suit maintained that "beginning in 1996 ... ARC... sought to purchase Samuel Madden" and that "ARHA, and now HUD, have stood in the way of ARC's opportunity to purchase," and HUD's action also "prevented the residents' involvement" from participating "in the redevelopment of their homes."

ARC further argued, "Federal law requires that before public housing projects are sold, residents must be given the first opportunity to purchase." Although ARHA was not an original party to the suit, it decided at its Jan. 27, 2003, meeting to retain counsel to argue their point of view before the court at a February hearing. That action was taken in collaboration with Alexandria City Council.

The reason the city became a party to the suit originally is that ARHA was prohibited from doing so because it involved HUD, Mark Jinks, assistant city manager for fiscal and financial Affairs, explained.

"This settlement is a win-win for all involved. The residents were very reasonable in their desires," Jinks said.

WITH JUDGE Thomas Penfield Jackson presiding, the court was faced with two decisions: whether to grant a preliminary injunction to stop the development in its tracks, and whether the proposition of the basic ARC case had merit.

"In February 2003 ... Jackson denied ARC's motion for a preliminary injunction" based on the reasoning that such an injunction would cause the city "irreparable harm" and that "the public interest weighs in favor of completing the redevelopment as expeditiously as possible," the ARHA release stated.

ARC appealed Jackson's decision to the U.S. Court of Appeals for the District of Columbia. That appeal was later dropped by ARC, but the action in the District Court remained, according to ARHA. Although the ARHA board assumed the court would ultimately find in HUD's favor, the suit has left a legal cloud over the project.

"The city and EYA joined the suit in August, filing motions to expedite review of the case," the press release noted. The reason for this action was to "save the millions of dollars received through the application for state-allocated low-income tax credits," according to Dearman's press release.

ARHA was faced with filing for the tax credits no later than March 14. If this deadline was not met, the fear was that another window of opportunity for credits would not open for another year and that this could doom the entire project.

Miller noted at the time, "We have moved 100 residents to other locations. Those who are scheduled to return to the new development couldn't get back. It (losing the tax credits) would be very detrimental to them. And we couldn't do anything with the boarded-up properties without the necessary funds."

Upon completion, there will be 152 housing units on the now-cleared two-block property. Of those, 52 will be ARHA units, and 100 will be market-rate units to be sold to individual purchasers. There are also three scattered sites in the overall project plans.

"The plan is an innovative public/private partnership that relies on federal, state, local and private funding to replace what was the oldest and most distressed public housing in the city," Dearman said.