COUNTY OF ALBEMARLE
Park View Senior Apartments at South Pantops
JABA Request for County subsidy of $36,000 per year for ten years, for above-referenced senior housing.
Bob Tucker, Melvin Breeden, Larry Davis, Ron White, and Steve Allshouse
LEGAL REVIEW: Yes
May 4, 2005
ACTION: X INFORMATION:
The Jefferson Area Board for Aging has partnered with Shelter Development, LLC to build Park View at South Pantops, a 90 unit senior rental community. This development presently is in the construction phase and has experienced a dramatic increase in development expenses – specifically $763,000 – that JABA attributes to unexpected site improvements and construction cost inflation. The unexpected site improvements, according to JABA, include three retaining walls, an extension of cement footings, and VDOT-mandated sidewalk improvements. JABA claims that the $763,000 increase in construction costs will severely limit the number of amenities that can be provided in the facility and contends that the lack of these amenities could detract from the potential success of the project. JABA requests, therefore, an annual County subsidy of $400 per unit for a period of ten years. The total amount of this request comes to $360,000.
The proposed development will be owned by a private, for-profit entity with JABA having an option to purchase the facility after fifteen years.
Goal 3.1 – “Make the County a safe and healthy community in which citizens feel secure to live, work, and play.”
Goal 3.2 – “Promote a variety of safe, sanitary & affordable housing types.”
Albemarle County Office of Housing has worked with JABA and Shelter Group for almost two years on the proposed development. The Board of Supervisors passed a resolution supporting the development’s application for Low-Income Housing Tax Credits and to commit 12 rental vouchers to subsidize rents for households below 40% of the area median income. These vouchers, with an annual value of approximately $54,000, are committed for ten years provided that HUD continues to provide sufficient funding. In addition to supporting the application for tax credits, County staff provided a written appeal on behalf of the applicant and made this appeal in person to the Virginia Housing Development Authority’s Board of Commissioners when the applicant did not initially receive tax credits. After hearing the appeal, the Board of Commissioners agreed to extend tax credits to the project.
Unlike Woods Edge Elderly Apartments, in which JABA was also a partner with a similar purchase option, Park View does not propose that the requested annual subsidy will result in reduced rents. At Woods Edge approximately 40 apartments are subsidized using $40,000 in annual contributions for eight years. The apparent use of the requested funds for Park View will be to support debt service on additional funds borrowed to cover the additional development costs identified above. There will be no direct impact on rents paid by the tenants. It should be noted that Park View will have rent restrictions on all 90 units as a result of using tax credits, density bonus provisions, and housing vouchers. The most restrictive rents will be using housing vouchers ($623 for one-bedroom and $745 for two-bedroom)
Based on the above information, staff cannot support the requested subsidy for the following reasons:
However, if the Board desires to fund this request, it should direct staff to develop a legal approach to implement the funding. This will require adoption of an ordinance and/or development of agreements to insure that the funding will be used for the intended purpose. It is likely funding for this in FY 06 would have to be from the Board’s contingency reserve.
View JABA letter
Return to regular agenda