0
Votes

ARHA Seeks Developer Partner for Glebe Park

2006 budget subject to new HUD rules.

Adoption of a budget that forecasts a deficit of $162,500 and a plan to cut off the flow of a long standing financial drain were the prime actions taken by Alexandria Redevelopment and Housing Authority's Board of Commissioners at their meeting Monday night.

That financial drain is the deteriorating, partially-vacant Glebe Park Aparments. In the first step toward redevelopment, ARHA "will be publishing a request for qualifications for the redevelopment of its Glebe Park Apartments." That was to hit the streets March 28, according to Connie Lennox, ARHA's administrative director of development.

Constructed in 1965 and purchased by ARHA in 1987, Glebe Park's 151 apartments spread throughout nine buildings on three parcels of land fronting the 800 block of West Glebe Road and the 3900 block of Old Dominion Boulevard, have been losing money for years.

The property is currently 27 percent vacant with 41 units off line "due to its physical condition." ARHA will not occupy units as they become vacant this year in anticipation of the upcoming redevelopment, according to the press release issued Tuesday afternoon.

Responses to the RFQ are due into ARHA by noon April 28. A recommendation to the Board for "a preferred developer partner" is anticipated at the May board meeting. "Negotiations will begin immediately and result in execution of a pre-development agreement by May 31," according to the release.

"ARHA is the sponsor of the project, and the landowner, while the City of Alexandria holds land use approval authority," according to the release. "The ultimate goal is to create a complex similar to Chatham Square," Lennox explained.

However, there is one major difference. In the case of "The Berg," now Chatham Square, ARHA owned the land which placed it in an ideal bargaining position with any potential developer partner.

Glebe Park has a $5.5 million mortgage held by Patrician Mortgage Company of LaPlata, MD. That breaks down to approximately $43,000 per unit, according to Lennox. It is also "running about a $500,000 per year deficit" that is growing due to the increasing vacancy rate.

"We feel we might have to bring another piece of property to the table to make the deal palatable to a potential developer partner. But right now we are just looking at qualifications. The money aspects will come later," she said.

Although Glebe Park presently has 151 units, ARHA is obligated to replace only 40 as public housing/Section 8 units, according to Lennox. "The viability of the site will depend somewhat on the zoning process and density that' permitted, the same as what occurred at Chatham Square," Lennox explained.

In that case there were 152 ARHA units at The Berg. Under the redevelopment plan only 52 exist there today while the remainder are at three scattered sites that were part of the total redevelopment plan. City Planning and Zoning approved greater density for Chatham Square to make it more attractive for redevelopment to a private developer partner.

It is expected that the selected developer partner "will have the ability to secure low income housing credit funding from the state finance agency and/or other public/private funding in order to complete a one-for-one replacement of all public housing units with other publicly assisted housing units that are either debt free or with a mortgage that it can sustain through anticipated rental receipts," according to the release.

"We hope to be ready with a new developer partner team by March 2007," Lennox told the Board. They will make the ultimate decision on the selection of that team, Dearman told them Monday night.

WITH LITTLE DISCUSSION ARHA's Board unanimously adopted a $26,500,000 overall budget for Fiscal Year 2006, an increase of $610,838 over FY 2005. It forecasts a deficit of approximately $162,500.

"At a later date, we will be requesting the Board and HUD (U.S.Department of Housing and Urban Development) to approve and authorize the use of pre-2003 Section 8 administrative reserves to fund any deficit," ARHA's Executive Director William Dearman explained to the Commissioners in his budget cover memo.

He also cautioned against comparing the new fiscal blueprint with the 2005 version due to a mandated change by HUD to all housing authorities requiring they adopt "Project-Based Budgeting." This means that excess income from one project cannot be used to balance a loss in another. Each must rise or fall on its own merits.

"We have projected revenues and expenditures for each department, community, and program. As you compare prior year expenditures with the proposed budget for FY 2006 you will notice significant differences between the previous years and the current proposed budget," Dearman pointed out.

His reference to using "pre-2003 Section 8" reserves to fund the deficit pertains to this new HUD regulation. Those reserves could still be used with HUD approval since they occurred prior to the new "Project-Based" edict.

Included within the new budget are increased personnel expenses calling for "an average of 5 percent salary merit increase, a 2.5 percent cost of living allowance, and a 6 percent retirement benefit contribution," according to Dearman. Total Central Office expenditures amount to $2.2 million.

IN OTHER ACTIONS the Board recognized two individuals who have successfully participated in ARHA's Family Self Sufficiency and First Time Home Owner programs. Kim Wade, an ARHA Placement Officer, was presented with a check for $6,600 in recognition of her completion of the FSS Program.

The program calls for a five year contract with ARHA to increase employable skills and gain financial self sufficiency. "I started in the program in 2000, went to computer school and graduated at the head of my class. I hope to become a home owner within the next six months," Wade told the commissioners.

Renee Clark was recognized as a first time homeowner. "I would like to thank the housing authority. They have really stuck by me enabling me to become a home owner," she said.

She was aided in her quest for a home by the Shiloh Baptist Church Credit Union, represented at Monday night's meeting by John DuPree. Joining Clark before the Board, DuPree said, "These people have a lot to offer the community and they should be encouraged to move up the economic ladder."