Development Authority Split over Affordable Housing Project
By STAN FENDLEY
and
STEPHEN SIEGEL
Falls Church Times Staff
March 2, 2010
The City of Falls Church’s Economic Development Authority split tonight in its consideration of the affordable housing project and related office building proposed for 350 and 360 S. Washington Street.
The Falls Church Housing Corporation (FCHC) and “Flower Building” developer Bob Young presented their latest plan for coordinated redevelopment of the two properties at the meeting, hoping to win the EDA’s support. After tough questioning, however, EDA members appeared divided over the issue, and Chairman David Tarter ruled that the body should simply supply comments on the projects to the City Council.
EDA members Bob Butchko, Phil Duncan and Ed Saltzberg voiced support for the redevelopment, with Butchko and Saltzberg noting that the proposed projects “would be better than what is there now.” By contrast, EDA members Ira Kaylin and Mike Novotny clearly opposed the projects, while Andy Rankin voiced mixed feelings. EDA Chairman David Tarter abstained from taking a position because of his previous work as City Attorney.
EDA members review information on proposed affordable housing project and related office building. From left, Andy Rankin, Mike Novotny, Chair David Tarter, Ira Kaylin, City Councilman Nader Baroukh, Phil Duncan, Ed Saltzberg, and Bob Butchko. (Baroukh is the City Council liaison to the EDA.)
The EDA is a seven-member body created to advise the City Council in economic development issues and projects.
Kaylin has been an outspoken critic of the Housing Corporation’s request for a $2 million City loan for the affordable housing project, stating that the loan terms are unduly favorable. The housing organization borrowed the same amount interest-free from the City in 2008, but was forced to begin repaying that loan when other funding could not be secured for a larger version of the affordable housing project.
Originally, the earlier loan was due for repayment in December 2009, but a substantial balance was carried over to 2010.
Novotny also has taken issue with the combined projects proposed by FCHC and Young, suggesting instead that a larger office and commercial complex would generate greater revenue for the City. Novotny revisited his proposal for S. Washington Street at last night’s EDA meeting, contrasting his ideas with those of FCHC and Young.
Taking questions from EDA members were, from left, Assistant City Manager Cindy Mester, Falls Church Housing Corporation (FCHC) CEO Carol Jackson, FCHC attorney David Lasso, developer Bob Young and City Economic Development Director Rick Goff.
If the City provides the $2 million loan to FCHC, financing for the affordable housing project presumably would be in place. The housing organization won federal low-income housing tax credits for the project last summer, which will be provided to the project builder in order to lower the cost of construction.
Even with the housing credits and a City loan, however, the affordable housing project hit a roadblock via objections from the then-owner of the adjacent property at 360 S. Washington. That roadblock potentially was removed when Young purchased the property and pledged to work with the Housing Corporation in a coordinated effort.
A question remains, however, whether Young can find the financial commitments to fund his part of the arrangement, originally envisioned as a 28,000 square foot office building over a three-story parking garage. Last month Young proposed that the City help fund the effort by making an equity investment in the office building and pre-leasing a large amount of the space. City officials declined that proposal, as well as a second idea relating to industrial development bonds.
Last night, Young indicated that he was seeking federal or state grant money to build the garage, as well as federal “intermodal” transportation dollars dedicated to the City. To finance the office building, Young will seek to pre-lease office space.
In response to a question from Rankin, Assistant City Manager Cindy Mester stated that the City would not pre-lease space in the project.
If the redevelopment goes forward, it will require a “Special Exception” ordinance to City zoning laws, as well as a real property tax exemption. The City Council is expected to vote on those requests on March 22. The City Planning Commission will consider technical aspects of the proposals prior to Council action.
The meeting featured a lively give-and-take between the EDA critics of the proposal on the one hand, and Carol Jackson, head of the Housing Corporation, Housing Corporation Attorney Dave Lasso, and City Council candidate (and former City Council member) Lindy Hockenberry on the other.
Novotny authored a presentation suggesting that the city would take on significant risk by approving the affordable housing project — risk in the form of a loss of revenue.
He suggested that a more comprehensive redevelopment of the S. Washington Street corridor for commercial uses could ultimately yield a revenue bonanza.
“The Wilden (affordable housing) project will eliminate future opportunities for land consolidation and preclude larger and higher quality commercial development in this area, which could generate substantial net positive revenue for the City,” he wrote in an email he circulated prior to the meeting.
It was that fear of the revenue loss that motivated other opponents as well. Kaylin, also a candidate for City Council, said the project “is a net drain on the City. We have to try our very best to maximize revenue.”
But developer Young, who has ridden in like a white knight to salvage the affordable housing project with his proposal to include an adjacent office building, suggested this is the best the City’s likely to get, and he said it also may jump-start development in the area.
By (see byline)
March 2, 2010
Thank you for the prompt and pretty accurate story, Stan and Stephen. It was good to meet you, Stephen. Welcome to Falls Church where there is never a dull moment in our meeting rooms. I’m looking forward to translating some of that consistent “meeting space” energy and drive to concrete accomplishments for our Little City. I enjoyed being able to go down the memory trail, like the old codgeress I am becoming, to remember the good times and successful end result when a group of we new and younger citizens helped our council in the mid-80s appreciate the economic development value of the State Theatre as a destination and hook for redevelopment in that part of town. It was especially gratifying to hear Lindy Hockenberry’s enthusiastic show and tell of the beginning success of the Little City marketing campaign at the Wammies at the State this weekend brought together by the team support among boosters like the News Press and EDA to make a visible Little City event of that great regional draw opportunity.
Many will not know that I was a member and then chaired the Private Public Partenership that was the business development arm of the City in the 90s. I was next chair of the citizen task force that planned and mapped out the charter for the creation of the EDA in mid-90s and have long been a propopent of a well planned holistic approach to pro-actively bringing development and business to our city. I look forward to volunteering for those efforts again after March 22.
I think what Bob Young more accurately said was, “know the worst down side to this two property redevelopment deal and expect the ‘upside,’ which can be predicted by lots of development models around the region”. He was alluding to the lengthy discussion of down side risk to the City: i.e. IF 360 office is delayed by unforeseen and NOT EXPECTED circumstances, THEN no new revenue from 360 to the City until the new 30,000 sf office/retail is built. During that transition awaiting completion of the office (now planned and under way to be unilaterally built on a single site plan and construction contract with 350), the City will be paying out $1,200 per year per Wilden Apartment (about one month’s rent, aka 1/4 Penny on the tax rate, plus covering the $2 mil Loan annual debt service (another, 1/2 Penny) until The Wilden fully repays the Loan and the Interest in Year 16 and the City recoups $3 million to use as the city council pleases.
The UPSIDE will leverage and create 2010 redevelopment and new construction (cranes over Maple Ave) that City Center part of town, now a dead zone (except for Bowl America). Mr. Young is already talking to potential investors who are interested to look at additional building sites in another 18-24 months, but they have to see something “going on” to believe there will be a better market for their involvement. Development begets development.
Let’s all get behind this newly energetic (YEA!!) EDA and help them bring a great new plan for their property on Broad St next to now vacant P.O. We need to harness their expertise and vision to bring some new cranes swinging over our Little City VERY SOON. The Wilden with federal funds ready to deliver and Bob Young (our not so secret economic development weapon) are doing their part on S. Maple. We would appreciate the community’s support as reasonably and fairly stated by long time EDA member Ed Saltzberg and long time activist Phil Duncan, newest EDA member, and Bob Butchko, who moved here inspired by the activity he saw in 2003 on Broad St, and said this plan is “good enough” to get behind. What’s not to like about achieving a variety of the City’s long standing goals in one fell swoop and taking one-time, never to be seen again, $8 Mil federal funds in the process. Thanks for the forum. Carol Jackson, FCHC Executive Director
The juxtaposition of the two articles is telling. The School Budget is cut 5% and the Falls Church Housing Corporation is asking for a $2.0 million loan/grant that would increase the City fiscal deficit, by 6 figures per year for the next 15 years during the repayment period of the subsidized loan.
It is particularly unfortunate that the cost is measured as a 3/4 cent tax increase. “Slicing and dicing” program costs in this fashion is simply bad budgeting and is what has helped cause the $9 million defict as costs are justified piecemeal and out of context.
I believe the $2.0 million Capital Improvement Program money would be better spent on refurbishing George Mason High School and building new schools for current and future needs.
No amount of good will or enthusiasm will change these facts.
Ira Kaylin
Thank you, Ira. Good people can agree to disagree.
The repayment of the $2 mil specific purpose CIP bond issuance by City to The Wilden will not even begin until FY2014 and only then if the City has not made any more proffer deals with private commercial developers to put cash into the City’s Affordable Housing Fund established to leverage housing development and teed up to pay the debt on the City’s behalf the first 3 years or longer. As you said that debt and the $2 mil principal will be fully repaid no later than Year 16 beginning year 1 from Wilden operating funds.
In my opinion, equating costs with the actual tax dollars spent each year is very informative to we average tax payers and businesses who can relate those costs to the portion of our tax rate.
Yes, the AH Loan is subsidized for 15 years, and yes, the City services supplied to The Wilden residents will be paid the first 15 years by all FC City tax payers. None of those costs will impact our City’s general fund until late in FY 2012. At that time, the sum of those annual expenses will equate to @3/4 of ONE PENNY on the tax rate.
Since the loan will be fully repaid, essentially it’s only the 1/4 PENNY that is a permanent subsidy to The Wilden that can’t be recouped.
In my bleeding heart opinion, that’s a fair price to pay to help our seniors reside in housing that will be beautiful, convenient and safe for their elder years.
Thanks for this opportunity to comment. Enjoy a good campaign, Ira.
Carol Jackson, FCHC
Carol, what’s the outlook for affordable housing initiatives after The Wilden? If future proffers are used to pay down The Wilden debt will that limit our options for future housing (maybe geared towards workforce residents)?
I know it’s a complex process and one of the more interesting things that was discussed in the EDA meeting was the idea that Winter Hill might eventually evolve into workforce housing as the seniors move to The Wilden. But other than that I’m wondering what other options there are for workforce housing down the road.
Good question, Andy. FCHC has long known that workforce housing priced to serve the truly typical workers in our town is the most unmet housing need in FC. After The Wilden we will be pursuing our earlier plan to create a 2nd facility for “workforce priced ” rentals. That will all depend on the lending credit markets coming back beyond where they are stuck now and of course our local officials and citizens “will power” for enabling these efforts with favorable land use decisions, etc.
If you mean can the City continue to negotiate for ADUs in addition to the @$150,000-$175,000 in cash for the AH Fund needed to pay annual debt service for The Wilden loan, then absolutely! The original mixed use commercial developments approved by Council had a split housing contribution–some ADUs and some cash.
Winter Hill as is will not answer workforce housing for households. Those units are 520 sf with one small bedroom. They are great start up apartments but our City needs some 2 and 3 bedroom options to be a truly well rounded mix.
Again, I appreciate your good question. As one of our wise regional housing gurus says, creating a continuum of housing opportunities for a community or region is like layering a lasagna. You need lots of ingredients that work together for the one dish meal. Carol J
Just wondering where Carol expects the future workforce housing project will be located in the city. Also, if workforce is our greatest need, why press forward with the Wilden and use all of the dollars available for that.
Thanks for the info, Carol. The lasagna analogy sounds like a good one.
I agree that Winter Hill won’t help with family housing (from what I know about Winter Hill) – but at least it could help with individuals or young couples (without kids yet) – it seems like we don’t currently have any affordable options for those folks.
With Winter Hill’s limitations in mind, what’s the long term vision there? Would FCHC keep it for retired residents or is there some option to try and redevelop Winter Hill at some point?
3/4 of a penny on the tax rate = $45 for a home worth $600K in FCC. What could the city do with $45/home other than fund a building for people who already have a home in Winter Hill? Why should the City Council burden each property owner with an involuntary contribution?
I guess it is all how you ask the question. First, the impact of this project on the FY11 budget would be substantially POSITIVE, so I would ask why you like to give away $millions of federal subsidy, which will create BPOL and permit revenue for the City, as well as jobs for an industry that has borne the brunt of this devastating recession? In FY12, the City would be liable for debt service on the $2 million loan, but we have ~$500k set aside in a trust fund to be used for affordable housing, so for FY12 and FY13, and longer depending on how the debt was structured, taxpayers would have no expense for servicing the debt.
The fiscal model assumes some “service cost” but this is simply a construct which assumes that all government costs are spread over all of the population, and really the FCHC is the primary service provider to this population. The only identifiable direct cost of the project until July 1, 2013, would be the $35k of property tax presently paid by the owner, which is a 2008 number and probably overstated.
All of the above ignores the potential development of the neighboring property, which would more than offset the expected costs in years 3-15 which would peak around $50. Mike Novotny has speculated on a proposed development which would produce more revenue, but this is little different from saying that we could build a world trade center where the bowling alley is, or better yet drill for oil in Cherry Hill Park.
So allow me to rephrase the question: why would you reject a project that would pay for itself for many years into the future, thereby requiring CUTS to education or other government services, based on the policy of wishful thinking that failed to deliver any commercial development whatsoever for years if not decades? The proposed project would accomplish something real and meaningful, even if you look only at the economics, and would advance important social and community goals that I personally see as part of the core identity of this community and a source of pride and inspiration that will pay dividends well beyond the incredibly modest commitment of public funds involved.
So that would be Maller – Yes. That’s good.
So here are some questions in follow up:
- the federal subsidy is part of our transportation subsidy that could be used in total elsewhere, or is it just lost if not used in this project?
- who is paying the BPOL from the subsidy?
- doesn’t this project take $2M from our CIP? Is there a better use for this $2M?
- should the City be willing to give up more commercial land for long-term residential use?
- Novotny is incorrect in his assumptions that the land could be put to better use? He should be mocked when you suggest building a WTC at the bowling alley site?
- Please better explain your social goals. Are there seniors not presently in affordable housing in FCC who are looking to move into the Wilden or are we providing this housing more for the region so that seniors outside of FCC can move here?
- ” the policy of wishful thinking that failed to deliver any commercial development whatsoever for years if not decades” = repetitive phrase seen on another local blog.
Mr Anderson,
The federal funds allocated to The Wilden are thru Low Income Housing Tax Credits combined with onetime ARRA (stimulus) funds specified by US Treasury only to assist developments having won 2009 Tax Credits–these funds have no relationship to the transportation funds to which the City also must commit this year. If not used by The Wilden, Va Housing Dev Authority (the issuer of the tax credits) retrieves them AND uses for other applicants elsewhere in VA. In addition, FC City gets a big blackmark entry in VHDA’s “failure to use funds” ledger and won’t be eligible to compete successfully for foreseeable future.
That seems not to be a compelling reason for you, if I’m reading between your lines, but it does matter to most of our conscientious officials.
The CIP line item has been approved for affordable housing since 2007 and will disappear from the City’s CIP budget at the end of this fiscal year–June 2010. It can not be reprogrammed, but could be dropped, no problem, by doing nothing to use it now. We can’t build The Wilden without that local government appropriation as the state and federal funds are tied to its commitment by FC Council.
We are building more appropriate affordable housing for seniors as they choose to remain in their community, but not in their single family or garden style walk up apartments. Winter Hill will transition to income eligible housing for all ages–probably ideal for entry level and others in the workforce with incomes @$40,000 per year. We will be working with our City to figure out additional methods by which we can continue to create affordable rental units for locally employed households. Thanks for the dialogue. Carol Jackson
Mr. Anderson:
(1) No; whether or not any of that federal transportation money is used is not counted in my comment. The subsidies referenced are the tax credits, ARRA and state funds awarded in the competitive grant process, which must be used in this project or they will be lost.
(2) The BPOL tax is payable at 16¢ per $100 of contracting services performed in the City, so $1 million of construction would generate $16,000 of revenue. Other services, such as professional, are taxed at higher amounts, and all of these are on Gross Receipts. Also construction workers or residents who eat and shop in the City will be paying meals taxes and sales taxes.
(3) These are funds earmarked to be borrowed for a specific purpose to support affordable housing, so it is a bit of a fallacy to propose they be diverted, but of course there are numerous capital needs identified in the CIP. The CIP is not a separate pool of money but merely a planning tool; all of the local tax dollars spent come from the General Fund (or the Affordable Housing Trust Fund or other funds which are separate) so there is no CIP as a separate entity with its own assets. It true that any borrowing budgeted to be paid by GF dollars limits the total borrowing. We are spending a little over $5 million per year presently on debt service, and in 3 years or more this project would cost as much as 6% of our total debt service costs. Put another way, the City has the capacity to carry perhaps $60-80M of debt (our legal limit I think is $300M), so this project would use between 2 to 4% of our borrowing capacity.
(4) The mixed use policy was adopted to supplant the “wishful thinking” policy and has resulted in nearly 10¢ relief to taxpayers by using about 10 acres of the 200 commercial acres in the City [5%]. In 2006 when we were considering the CCS proposal, the Council unanimously came to a decision that the proposed CCS development should be the limit of the large-scale mixed use, so the answer to your question is no, this policy was intended and has brought more tax revenue and people to begin the development of a more vibrant commercial district. The essential outline of this policy to me is that we should be thinking of a population of perhaps 15,000, and the CCSA and several other smaller developments would be enough to achieve the intended goals without killing the goose.
(5) Yes, every person who enters the public arena is fair game, and I am certain Mike can handle it. He is absolutely knows of what he speaks regarding commercial development, but there are over 100 acres of commercial land in the City available right now and in the past 40 years for any such development, and it hasn’t happened. I am in total agreement that we should be seeking high density commercial office development, but that is going to take what I said in the FCNP this week, a more concentrated effort aided by people like Mike Novotny, Bob Young, and other professionals, entrepreneurs and the right kind of public-private partnerships.
(6) This project is just one part of what I called a “full spectrum” of housing, and what Carol Jackson called a “continuum.” The senior project is on the agenda because the experts found through a competitive process that it was the best project of its kind in the region, and no matter who is fortunate enough to move there they will contribute to our community. More generally, if we want to be a real community we need to offer a full range of housing for families, work force, seniors, etc., and this particular project will allow Winter Hill eventually to be repurposed to provide another piece of the spectrum.
(7) Those are my words but I happily associate myself with whoever dares speak their mind and envision the best for the City of Falls Church.
Carol, Dan, Someone — it would be very helpful to know specifically:
(a) how many current Falls Church residents (not residents of other surrounding jurisdictions) who must depend on housing assistance have been identified to move into the Wilden if it is built;
(b) how many of those current Falls Church residents would be relocated from Winter Hill;
(c) how many current Falls Church residents have been identified who would move into the repurposed Winter Hill apartments; and
(d) how many total affordable housing units will exist if the FCHC plans come to fruition, as compared to the total number of affordable units extant now?
The answers to these questions are undoubtedly floating around out there, but I haven’t been able to sort through the reams of reports and documents to figure them out . So, ask the experts!
Those of us who support provision of affordable housing as part of the tapestry of housing in the city and, and who agree with Dan Maller’s paragraph 6 above as a general principle, are struggling to weigh the pros and cons of building this project now, in the proposed location, with its attendant short- and long-term costs during a time of punishing belt-tightening, against the benefits to be gained by the city and its current residents. Mine is certainly not an argument in favor of isolationist thinking on the housing issue; but in the difficult economic circumstances in which we now find ourselves over the short term, a legitimate issue is being raised as to whether there is a demonstrable and specific need in Falls Church for, and ability to pay for, the Wilden and resulting repurposing of Winter Hill now.
There is also the question of plunking the Wilden down in what should be a largely commercial and entirely revenue-producing location, notwithstanding Bob Young’s efforts to add a commercial building into the mix. I am a fan of Mr. Young’s Reade (sp?) and “Flower” buildings, for both their aesthetics and the appropriateness of their size in context. I would like to see more such interesting buildings in our evolving downtown sector. But I, like many others, have found compelling arguments by Mr. Novotny and others favoring development of (and adherence to) a comprehensive, long-term, carefully thought out development plan for the area, rather than a piecemeal buildout, as the best hope to maximize the community character of our downtown and the income it could produce.
Which brings me back to my original question: what is the present need among current Falls Church residents for the proposed 64 Wilden units and any resulting vacancies at Winter Hill? I think if we could have a clear, straightforward answer to the questions I have posed, it would help to quell the fear that Falls Church taxpayers are being railroaded by good people with good intentions into paying to import people in need, when many current residents are increasingly hard-pressed to pay the taxes that will be necessary to keep the city afloat, even without the additional direct and indirect costs associated with the Wilden project.
Thanks for any light you can shed. And Dan, I, too, happily associate myself with
whoever dares to speak his or her mind and envision the best for the city, whether they agree with me or not..
Dan, your comments and tone about Mike’s ideas for development are disappointing to me. First of all, the basics of Mike’s ideas are not on par with building a word trade center or drilling for oil and the fact that you compare it that way is frustrating (and maybe a clue to why we’ve had so little success over the years). For those who have seen Mike’s presentations (I’ve seen two – but I didn’t see Dan at either of those so he’s either going off of what he’s read or Mike’s given the presentation other times) you know he’s just trying to give people an idea of what might happen in this area, with some planning, patience, and probably a lot of luck (and hard work).
Dan mentions the 200 acres of commercial property in the City – but pull out a map and show me how many places where there are good chunks of continuous commercial lots. There aren’t a lot of options. The Wilden site isn’t the only place, and building The Wilden won’t completely ruin the possibilities in that area, but I think it’s a valid concern and something I hope people are looking at. If City Council is just looking at 5 acres vs. 200 acres on paper (which I don’t think they’re doing – even though Dan made that comment) then they’re doing the City a disservice.
I’m sure Mike can take the heat so that doesn’t bother me – but comments like “the policy of wishful thinking” drive me nuts. Mike is not promoting just wishful thinking. He, along with others (like me), want the City to do more than wishful thinking. We want to do planning. Before everyone tells me I’m an idiot and that the City has tried that before let me ask people to point me to the previous plans – not because I don’t believe there were previous plans but because we obviously don’t want to try the exact same thing again. So, let’s look at the old plans and figure out how to do new plans.
When I ask, “why can’t more dense commercial development work in Falls Church?” the answer I almost always get is, “because it hasn’t worked in the last 20 years.” That is not an answer. That is what happened – but why has it happened like that? The only other answer I’ve heard is “the will of the people” – as in, the people of Falls Church have never had the will to make development happen.
This is an odd juxtaposition to me because that’s something that is often mentioned related to affordable housing. People have wondered if Falls Church still has the will to build affordable housing. Personally, I’d like to see both. I’d like to see affordable housing and more commercial development (which, incidentally, would give us the means to provide more affordable housing).
(I should probably read Dan’s comments in the FCNP – maybe I’m overreacting to his comments in this thread.)
Oh, one other thing. Whenever people speculate about real estate revenue from specific properties I like to mention that it’s easy to figure out the exact number. In the database available online you can see that 350 S Washington was assessed at $2,234,700 for 2010. That means at the current tax rate it will generate $23,911.29. If the tax rate goes up to $1.25 then we’ll get $27,933.75 (unless City Council passes the real estate tax exemption ordinance, in which case it will generate $0).
One interesting thing I noticed when poking around in the database is that historically (since 2007) 360 S Washington (the building Bob Young is hoping to redevelop) has been assessed at about $100,000 more than 350 S Washington (The Wilden site). However, on 02/06/08, 360 was sold for $3,000,000 (it was assessed at $3,116,800 in 2008). The next day, 350 was sold for $3,250,000 (it had been assessed at $3,014,000). I know assessments are complex things but it just seems odd that the two buildings would sell at the same time for prices that were the inverse of their assessed values and the assessed values wouldn’t flip flop over time. (It also seems like either the buyer of 360 got a deal or the buyer of 350 overpaid.)
And one more thing (sorry!) – I’m not at all opposed to the mixed-use development that has occurred over the past 5 or so years. It seems like historically the “more commercial development” people butt heads with the “mixed-use” people – but I think both make sense (which means I obviously butt heads with the people who don’t want anything to change).
And one more thing (sorry!) – I’m not at all opposed to the mixed-use development that has occurred over the past 5 or so years. It seems like historically the “more commercial development” people butt heads with the “mixed-use” people – but I think both make sense (which means I obviously butt heads with the people who don’t want anything to change).
In brief response to LInda’s stats questions: See the staff report on City’s website for The Wilden council agenda item tonight for a list of 2010 Consolidated Plan “needs” for this type of housing by current community members.
The last time we informally surveyed current Winter Hill residents in Spring 2009, @70 households said they would prefer to relocate to a new building on Maple Ave. We will not do a repeat of that survey until later this spring when we hope we’ll have a specific plan to discuss with them. They will not “have to” move and we will not give them a preference, but we will begin our marketing plan among current Winter Hill residents.
In 2008, when the Chamber helped us with an informal salary survey of local employers, we found that using those results as an indicator gave us the ability to project that @70% of the locally employed workforce would qualify for housing subsidies aimed at incomes < or equal to 60% of area median.
Since we will never aspire nor be able to build housing to accomodate all who are justifiably "housing costs burdened", I believe it's worth it to support NOW our Council's decision to assist the housing needs "spectrum or continuum" with a LOAN subsidy to provide 12% of the total Wilden development to leverage $12 mil of one time federal and state funds. Such a leverage tool was recommended to Council by the housing industry experts, Jones Lang LaSalle, hired under Dan McKeevers watch. At that time JLL advised the Council that $2 mil would get them @20 new permanently affordable units. They said yes to that plan; the budget approval resides in the CIP and the City will get 66 new units instead of 20.
Thanks for asking.
Andy, I plan to introduce you and Mike to Mr. Paul Barkley, longstanding architect and keeper of the "lost Falls Church files". He has made a hobby of cataloguing old plans for city betterment. I'm serious; we do want to give him a forum. Good idea. Carol Jackson
Sometimes it’s hard to track down links on the web site – this might be the staff report Carol mentions (but maybe not, it’s hard for me to tell): http://fallschurch-va.granicus.com/MetaViewer.php?view_id=2&event_id=19&meta_id=4921
I’d love to see what Mr. Barkley has kept over the years – sounds really interesting.
Andy, there appears to be either a revised staff report or addendum to the one you have cited, as there is a report or something with a larger sequential number (TR-10-14-02???) listed with tonight’s Council agenda. I’m not sure — I have staff report -01 but am having trouble pulling -02 up, if it exists.
Carol, I have looked at your response above, and again at the FCHC website, and at the staff report for tonight’s Council session on this matter, and I’m wondering about the following questions. I don’t question the addition of affordable housing as meeting a goal in the comprehensive plan, or as a generally desirable social goal, or the judgment of state and federal funding agencies that this project fits well within the parameters of their program funding ability. Those, along with the FCHC’s mission and goals, are institutional concerns.
My questions and concerns have more to do with taxpayer issues, in the context of our current dire budget straits, now and for the foreseeable future. Specifically, it is my understanding that every additional $1 million dollars of city expenditure requires something like an additional 3 cents on the tax rate. It is more in that context that I ask the following:
- What is the “permanent loan” of $2 million by the city to the FCHC referred to
in the staff report — is that just a fancy term for “outright gift”? Notwithstanding
the rest of the financing details, this appears to be an outright giveaway of city
funds, without recourse to repayment, ever? Can this be? Are these $2 million
legally-binding, dedicated funds for affordable housing use, or could they be
repurposed within the city’s overall budget to meet other pressing needs?
- The staff report says that the lost revenue that will result from building the
Wilden project will be $148,000 to $253,000 per year in perpetuity if the
development is not taxable ($16,734 to $121,672 if it is taxable). Is there
any question but that the Wilden would be tax exempt? The staff report points
out that the FCHC-owned property at Winter Hill is tax-exempt, currently
representing $122,000 in lost revenue per year. Logically, it would appear that
like other FCHC properties, the Wilden would be tax-exempt. In that case,
it would appear that FCHC properties would account for annual lost revenue of
anywhere from $270,000 to $375,000 per year at today’s tax rate, in addition to
any direct annual subsidies the city might pay to the Wilden — correct?
- You say that, at last survey, all 70 Winter Hill households expressed an interest
in moving to the Wilden. Are the housing units at Winter Hill no longer suitable
for residential use, as is, over the next several difficult budget years, or does this
represent a perfectly human desire, from the residents’ perspective, for
newer housing? (Now that I reread that question, I see it might be construed
as ungenerous of spirit, and I don’t mean to be. The question goes purely to
the timing of spending city tax revenue now to build the Wilden, when we can’t
even pay for reduced city and school services without a large tax increase.)
Linda–sorry I did not read the Times yesterday after early morning. I don’t think you are looking at the 2010 staff reports as none of the numbers you are quoting are in the spreadsheet Cindy Mester has been explaining to Council and all B&Cs this week.
Why don’t you call me at FCHC tomorrow on Wed and we’ll discuss directly.
Actually taxes not collected equate to loss of current $35,000 paid by the 350 building. Anything greater than that is not a true loss as without tax exemption we can not finance The Wilden to cash flow successfully as subsidized rents SO there will be no larger taxes from that proposed new development as The Wilden will not go forward without the Tax Exemption award for 15 years.
Thanks again. Carol J
Carol—Linda asks some very good questions. Would it be possible to respond publicly (vs. a private phone call)? I am sure many citizen-taxpayers have the same or similar questions.
Carol, I see that there is a request for an answer here to my questions. So, if you would be so good . . . .
As for the lost revenue question, the lost revenue over the short term that would result from the tear-down of the 350 building is one thing. I was more asking about the long run, the lost revenue over the life of the building that would result from locating a tax-exempt property in the “city center” area, rather than taxable commercial and residential property. That is the figure in the staff report (lines 154 to 160), to which I referred. The reference to a $2 million “permanent loan” is also in the staff report to the Council (at line 173).
Andy Rankin
“If future proffers are used to pay down The Wilden debt will that limit our options for future housing (maybe geared towards workforce residents)?”
I am sorry Carol did not respond directly to your question. If future proffers are designated to pay down the debt of an existing building you better believe that it limits future affordable housing options. The units or proffers paid by developers should be used by the City or FCHC to gain more housing where it is needed most (non-senior workforce). Designating ALL future proffers for the next 15 years to debt of an existing project is ignorant and will only ensure no new affordable housing is built in the next 15 years. It is in Carol, the FCHC, the City and residents best interest to invest future proffer money in gaining ADDITIONAL affordable housing not paying for and old project.
I will look at the Staff report sections you quote, Linda and give you my best understanding of their meaning. As for future AH proffers, I agree with Mr. Acosta. It will be in the City’s best interest to leverage them for the creation of our most needed housing opportunities–workforce multi-family housing. Asking the City to cover from General Fund a half penny per year until repaid in full is not a large public subsidy–in actual cost and in comparison proportionately to what other jurisdictions experiencing unmet housing needs are contributing.
The momentum is growing for local government to pay attention to ensuring the infrastructure required for communities to remain sustainable into the future for our younger generations we are being so vigilant to educate well and care for. That infrastructure is being understood to include: education, public safety, transportation and housing. Without taxpayer support for each of those elements that define a jurisdiction with staying power the foundation begins to tilt at worrisome, if not dangerous degrees of downturn.
Have a good night. Carol J
The recent technique of equating things to pennies on the tax rate is interesting to me. Some might argue that it makes it easier to swallow a cost (a penny doesn’t seem like much) and so it’s not a fair tactic – but it is one way to compare things.
For example, how much of our current taxes trickles down for affordable housing? I assume it’s more than zero. Carol mentions a half penny and I’ve heard Fairfax County used to spend a penny but it’s being dropped to a half penny. I think it’s fair to expect us to invest about the same in affordable housing as our neighbors do – but it’s not clear right now how much we’re already investing.
It’s also complicated because not all the money comes directly from the tax rate. If a new development goes up we might negotiate some proffers (say $200k) to be used for affordable housing. That $200k doesn’t come from our real estate tax rate – but it comes from somewhere. If we didn’t take the $200k for affordable housing maybe we take it for schools (or parks or whatever) and that in turn reduces what’s needed from our real estate taxes. My point is just that it’s complicated to look at just the tax rate when we talk about how much we’re investing in different things.
We need more money for our schools, with a growing enrollment and needed infrastructure improvements at GMHS. We need added runs to the George Bus, not fewer. And we certainly should not close our national, award-winning library on Sundays! (see article reprinted below.) We do not need 66 units of affordable senior housing to visibly demonstrate our commitment to being good people, when we can’t provide for our own. While the affordable housing issue is presented as complicated, it’s also a simple, fiscally irresponsible decision to move forward with.
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From the December 2009 FCNP: F.C. Library Wins National Award:
“For the second year in a row, the Mary Riley Styles Public Library in the City of Falls Church has been named one of the best public libraries in the U.S. by the Library Journal. The F.C. library is one of only 258 top libraries out of 7,268 public libraries in the country to receive “star” ratings in a rating system similar to that used in the Michelin Guide. Once again, the Mary Riley Styles Public Library received a three-star rating; one of only three libraries in Virginia to receive stars, and one of only two in Virginia and 202 nationally to have won the award two years in a row.”