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County Sued Over Affordable Housing

Lyon Village man says loan to church crossed the line separating church and state.

A Lyon Village man is taking the Arlington County Board to court in a lawsuit that alleges its $4.5 million loan to a local church crossed the constitutional line separating church and state.

The case stems from an October 2004 decision by the County Board to loan the First Baptist Church of Clarendon money to renovate its existing building near the Clarendon Metro station and add a 10-story housing complex. Church leaders argue the project is aimed at providing affordable housing, one of Arlington's most pressing community needs. Yet residents in Lyon Village, many of whom voiced outrage over the project at the Board's meeting last year, are angry at the prospect of a high-rise building on the border of their quiet, residential neighborhood. The suit, filed by Steve Kaufman, could derail the project.

In it, Kaufman, who is currently representing himself, states that money from the loan will also be used to rehabilitate the church itself, which was built in the 1950s and is beginning to deteriorate.

"The church's plan was to build a new structure that would, among other things, house a new church sanctuary and place of worship for the church and generate cash flow for the church," he writes in his complaint. "The linchpin of the church's plan was to obtain Arlington County funds by including in the building some affordable housing units."

The loan approved by the County Board will cover the cost of constructing the 116-unit housing complex along with two stories of underground parking. The loan is to be paid back over the course of 40 years. Kaufman states that duration of time is 33 percent longer than normal for other loans from the county's affordable housing fund. The loan also provides the church with $64,000 in affordable housing money for each rental apartment, nearly twice the average of $35,000 granted on other housing projects. The county's loan, he adds, will open up more funding opportunities for the church.

"Essentially, the County Board is providing public (affordable housing) moneys to the church ... to allow the church to seek Virginia state and commercial loans for the demolition and reconstruction of the building that will contain its sanctuary, seminary and other religious-based facilities," he writes.

KAUFMAN IS now seeking legal help from the political action group Americans United for the Separation of Church and State. Construction on the project is set to begin this summer once the loan is finalized, according to pastor Alan Stanford.

"Everything is proceeding despite the suit," Stanford said, adding that the next benchmark for the project is the approval of its tax credits in March. "We're in the process of selecting a contractor."

Stanford's church is a landmark in the Clarendon area. For years, it has operated a child day-care center within its walls. Stanford sees the project as an innovative way to address a serious crisis in Arlington, the lack of affordable homes. Stanford faced vehement testimony from the Lyon Village community against his project when the loan was approved, but the suit, he said, makes resolving the conflict much more difficult.

"It makes open discussion about it next to impossible," he said. "I'm sympathetic to our neighbors on one level, but this project is for the greater good of the community and families it will help."

Much of the discord, he added, may be based on fears that the property values of surrounding homes will drop because of nearby low-income housing.

"It is an unwarranted fear that this will negatively affect property values," he said.

On the constitutional implications of the loan, Stanford said the money is closely monitored and will not be used to restore the church.

"The money is very carefully watched, and none of it will be for the church," he said. "Historically, the Baptist Church is against getting involved in government. All we're trying to do is take advantage of the same grants a private developer could get to do the same thing. There is a clear legal wall of separation."

The county plans to uphold its decision in court.

"OUR VIEW, of course, is that we're not entangled with the church," said County Attorney Steve MacIsaac. "The loan is clearly for the housing element only."

MacIsaac added that the county is still waiting to finalize the loan application because the parties involved have yet to determine just who will be the official loan recipient.

Representatives from Americans United for the Separation of Church and State are uncertain whether they will take up Kaufman's case.

"This project does send up some red flags," said Robert Boston, a spokesman for the group's Washington-area chapter. "The government is not supposed to be in the business of funding and supporting religious institutions. The law allows for churches to receive government money is some ways, but it’s usually for existing operations."

Arlington's affordable housing crisis is directly tied to its success as a community. The county has seen a real estate boom in recent years, which has caused dramatic rises in property values. Yet while Arlington has prospered, according to Stanford, many longtime residents have been priced out of their own neighborhoods.

"The project is not just for families," he said. "It is for teachers and firefighters, nurses, people who can't afford anymore to live in the communities where they work."

KAUFMAN'S CASE marks the second time the county's affordable housing initiatives have found their way into a courtroom. Arlington lost a case filed by a local development group in 2004 over the guidelines it implemented to create more affordable housing units in the county. Arlington plans not to appeal the ruling in exchange for the dismissal of legislation in the General Assembly and the state Senate that would limit the amount of money jurisdictions may ask from developers for affordable housing funds, according to County Board chairman Jay Fisette. In a statement Tuesday, he reaffirmed Arlington's commitment to constructing more low-cost homes with a special resolution.

"Arlington will continue its commitment to smart growth principles and will continue to seek affordable housing — through voluntary negotiation consistent with state law — in exchange for increased density,” said Fisette. “We will do so in a way that supports the objectives I outlined in January: to grow smart, be inclusive and ensure value for all Arlingtonians."

The resolution passed with a unanimous vote.