The Alexandria Redevelopment and Housing Authority held a pre-proposal conference with the two development teams who are finalists to redevelop the Samuel Madden Homes, also known as The Berg.
The pre-proposal conference that was held on May 3, was part of a process that has taken more than 10 years, but appears to be on track. The two development teams, Eakin/Youngentob Associates, Inc. and The Communities Group Professional Development Services, LLC., asked questions prior to submitting a final concept plan. ARHA's development director, Connie Lennox, responded to the questions.
Most of the inquiries centered around the issue of a performance bond and funding for demolition.
"We have applied for a demolition grant from the U.S. Department of Housing and Urban Development because we believe that the site is more valuable if it is given to the developer cleared," Lennox explained. "If we do not receive the demolition grant from HUD, however, we plan to use Hope Six funds to clear the site."
Lennox told the development teams that the site would be cleared by September, prior to the scheduled signing of a final development contract on Oct. 2. "If it is not cleared before that time, that is certainly something that will affect negotiations," she said.
ARHA IS requiring that the developer have a performance bond before beginning the project. Lennox could not tell the developers whether a letter of credit or cash would be acceptable.
Another question was whether the development teams could speak with members of the community prior to submitting final proposals. Lennox said that the ARHA Board would prefer that any questions go through them.
"I disagree with that," said Councilman David G. Speck, who is a member of the Council/ARHA Berg Task Force. "This process should be as open as possible and should certainly include the neighbors. It has been a challenge to try and help ARHA understand and accept the political process that is involved in this kind of a project. I have certainly learned more about the Housing Authority than I anticipated."
The process is being driven by a March 15, 20003, deadline for tax credit applications. To apply for tax credits through the Virginia Housing Development Authority for this federal program, local housing authorities must have a plan that has received all of the land use approvals to make it a real project as opposed to a concept.
"That means it has to go through Planning and Zoning staff review, be heard at the Planning Commission and be approved by City Council before we can apply to VHDA for tax credits," said
Mark Jinks, assistant city manager for finance.
"It's [tax credit program] the federal government's way of supporting the development or redevelopment of affordable or public housing without giving outright grants to local Housing Authorities," Jinks said. "The federal government allocates so many dollars to each state and the process for that money is extremely competitive. The applications alone, are hundreds of pages."
WHEN VHDA receives applications, they review them, rate them and then notify each local authority how much funding, in the form of federal tax credits is available. Then, the authority or the project developer or both contact a broker who is familiar with this type of funding. The broker contacts corporations that are looking for tax shelters and the corporations and the Housing Authority form a partnership. The housing authority gets cash for its project and the corporation gets to take a certain amount of a deduction off its federal income taxes for a specified number of years. During that time, the corporation owns 99 percent of the project and the local Authority owns 1 percent. When the tax credits have all been used by the corporation, that entity sells its interest in the project back to the Authority for a specified, minimal amount.
"We are going to apply for the redevelopment of the Samuel Madden Homes and the 48 off-site units at the same time," Jinks said. "We hope to get a minimum of $10 million, hopefully more. That's why the March 15, 2003, deadline is so important. I would think that we would need to be through the approval process by the end of this year in order to get the application completed and ready to go by then."
The ARHA Board is scheduled to choose the developer on June 24.