Affordable Housing Project Moves Toward Approval
By GEORGE BROMLEY
Falls Church Times Staff
March 17, 2010
The Falls Church Planning Commission voted 5-2 on March 15 to recommend approval of a special exception for the construction of The Wilden at 350 South Washington Street. The decision, which culminated the four hour session, clears the way for the City Council to approve the 66 unit senior affordable housing project on second reading next Monday, March 22.
Planning Commission Chair John Lawrence and Commissioner Rob Meeks voted against the exception and earlier were joined by Commissioner Ruth Rodgers in supporting a motion, introduced by Mr. Meeks and seconded by Ms. Rodgers, which would have recommended against Council approval of the project. That proposal was defeated by a 4-3 vote.
Commissioner Lindy Hockenberry led the opposition to Meeks’ motion, saying it was a disservice to kill the project at the Planning Commission level. She stated that she felt The Wilden is a very good project which in the long run would bring about many other development opportunities that would otherwise be lost.
Commissioner Michael Kearney concurred, stating he was comfortable with The Wilden’s financial model, although he expressed some skepticism that the project would come to fruition. Commissioner Melissa Teates saw the building as essential to improving the streetscape along South Washington and two adjacent sites on nearby Annandale Road. She noted that when the restaurant opens in the Tax Analysts building across the street from the project it would send a positive message for patrons to see the construction in progress. “I’m ready to take a leap of faith to get construction started down there.”
Commissioner Russell Wodiska stated that he had come to the meeting thinking that he would vote against the project but that a lot of the questions he’d had had been answered. Although expressing concern that the City was “putting all its affordable housing eggs in one basket”, he joined Ms. Hockenberry, Ms. Teates, and Mr. Kearney in voting down Mr. Meeks’ motion.
Following the vote, Falls Church Housing Corporation CEO Carol Jackson said, “We are obviously humbled and thrilled about the Planning Commission’s 5-2 vote.”
Much of the earlier discussion focused on the need to start work on the project by mid-summer. If construction is delayed and the building has not received a certification for occupancy by December 31, 2011, essential tax credits will be lost.
However, occupancy will be contingent on 38 parking spaces being provided at 360 South Washington. The adjacent building currently is owned by Thomas Sawner who has signed a non-binding letter of intent to sell the structure to developer Bob Young, who intends to build an office building with a parking garage on the site. In effect, the two buildings will have to be constructed concurrently in order for the required parking to be available on schedule.
Mr. Lawrence asked the status of the $2 million dollar loan earlier advanced to Mr. Sawner. Assistant City Manager stated that three quarters of the amount had been paid back to the General Fund.
Ira Kaylin, a candidate for City Council, spoke against the project’s loan arrangements, stating, “Everyone seems to be taken care of here except the taxpayers.” Mr. Kaylin estimated they would lose $1.4 million dollars and called the plan a very poor financial transaction for the City.
Ms. Hockenberry and Mr. Lawrence also are running for Council.
Relevant documents are available for review at the City’s website.
By George Bromley
March 17, 2010
What happens if we get construction started on time but fail to complete it and receive an occupancy permit by 12/31/11? If the tax credits go away at that point, who will pay for the project?
The version of the plan that was presented at the last EDA meeting tied The Wilden construction to the structured parking portion of Bob Young’s proposed building (but not to the office building itself). We were told that The Wilden could/would not be built if Bob wasn’t able to secure financing (and therefore build) the structured parking. I’ve heard that the plan has changed and the project can proceed without the structured parking – but I don’t know any of those details.
My concern is that many of the benefits (some of the things that apparently Melissa mentioned at the PC meeting) seem to depend on both 350 and 360 being redeveloped. If in the end we build The Wilden at 350 and do nothing with 360 (except make the existing surface parking available to The Wilden) I don’t see how that will have much of a positive impact on the streetscape or the general area.
Can someone tell me where the affordable housing issue falls in the City budget under consideration? I have looked over the proposed budget document but I do not see it specified…..
TFC – I think the budget effect for next year is something like $35000 lost from the commercial tax roll, but otherwise nil. This will likely be the question of the campaign – how can the city allow affordable housing to go forward when the budget is so bad.
Thanks, no wonder I could not find it.
Mr. Anderson is right; the tax exemption would remove the property (2010 assessment is $2.3M) from the tax rolls, but not until next year. Based on the $1.27 proposed tax rate this means a hair under $30k of lost revenue. The project would also pay permit fees and the construction and other services are subject to BPOL tax, which would aggregate as much as $100k in the next two years, not counting the adjoining development. The other factor is that the money would be borrowed over 15 years, and the Affordable Housing Trust Fund has a balance of $500k+ which would be used to pay debt service at least for FY2011 and 2012, so at least that far (July or December 2013) the fiscal impact of the project is slightly POSITIVE, and then as the AFT funds are depleted the taxpayers would contribute less than a penny on the tax rate to support the project until the loan is repaid after 15 years, when the funds would be available to pay the general fund back in full. From 2014 through 2025, the maximum annual subsidy to this project would be less than 1% of the school budget, so I would disagree that the project deserves all of the symbolic meaning that is attributed to it, although I suppose the same kind of hyperbole has been used by supporters as well.
Dan, I truly appreciate your analytical mind. I have read all the documents and still can’t make up in my mind if this is a good project. I support affordable housing and I want to support this project. It is not a financial winner but is it a community home run? Should we wait to include this in a higher density project that could occur in a couple of years? I’m on the fence….
Barry, I am with you on this matter. I want to support the spirit and intention of the project…just not sure if it is wise to take on the cost. I listened intently to the answer to your question at the Town Meeting this morning. I’m still not sure. Clearly, we can afford anything we want (as a City) as long as we are willing to pay for it. Thant’s my stuck point. The thought of leaving the 12M in grants available on the table would be a shame but that’s a small portion of the cost. It’s like buying a new vehicle…there are deals out there, no interest loans…all that but, I still can’t afford it so I am leaving the deals available on the table.
I turned in favor after seeing the plans for Mr. Young’s building and his vision, already endorsed by neighboring property owner Mr. Sawner, for redevelopment of the area. Sometimes the city has to invest a bit to get what it wants – look at the money in grants sitting around for parking and housing. With the addition of the Young development, public parking addition that can be used for all of the things around it including Elevation Burger and Pizzeria Orzo, new bus transportation hub, and renewal of a portion of the horrible S. Washington streetscape, this looks to be a pretty good deal.
On affordable housing, this is housing for seniors – not really a drain on the budget in terms of city services – and could potentially open up work force housing options in the Winter Hill area, and the Winter Hill apartments aren’t big enough for a family with school aged children. If we want to debate costs, then it should be done on the numbers Mr. Maller lists above or other numbers that one might find, but as pointed out by Anderson and Maller, there is virtually no impact on the current budget debate.
After spending days going over dense and often confusing City documents re the Wilden and sorting through all the financing and “repayment” terms, I am convinced that this Wilden deal is a very good deal for the FCHC and a very bad deal for City taxpayers, particularly now, when our finances are so strained.
Here’s why. The City finances will be drained over the life of the 15-year, $2 million loan and beyond by the following: continuing annual debt service costs which the City is legally obligated to pay over the 15-year term of the loan, in amounts far in excess of what it will be able to collect from FCHC; the lost purchasing power of $2 million-plus that is tied up in a long-term outstanding loans; the long-term adverse affect on the City’s bonding ability of the outstanding loan; the lost revenue from the Wilden’s tax-free status for at least 30 years; the cost of City services to the expanded FCHC properties (Wilden and repurposed Winter Hill, the latter also tax-exempt); the legal provisions in the financing agreement that strongly favor FCHC by conditioning and limiting FCHC’s duty to pay back the City for the loans; and other financial concessions.
The long-term and continuing costs of the Wilden to City taxpayers are far greater than you might think, if you listened only to the Wilden cheerleaders. If you could get a mortgage for your house on these same terms, you’d be in fat city and your banker would be in deep trouble.
Moreover, the notion that the Wilden will be a catalyst for commercial development — even if coupled with an office building next door — appears to be farfetched. The Wilden is proposed as a stand-alone assisted living facility for senior citizens with limited income and will be run by a non-profit agency with tight funding. Not likely to be an economic powerhouse or cash cow. Moreover, the office building that only recently materialized as part of the Wilden plan appears to be far from a certainty; I have seen no evidence that the developer has obtained construction financing or potential tenants. In fact, there has been some mention that the City government might be a future tenant in the proposed commercial building, which would reduce any net income to the City from the building by the amount the City would pay in rent.
On balance, count me in with the folks who think it would be wise, and fairer to City taxpayers, to disapprove this project and wait a few years until the economy and City finances stabilize, and until affordable housing can be incorporated into a comprehensive, tax revenue producing commercial and mixed use development plan for the downtown area.
Gordon, I also started to come around on The Wilden when I heard about Bob Young’s building. The project still leaves me with a lot of concerns but I thought that getting a small office building in there would be nice. However, how realistic is this office building?
At the last EDA meeting we were told that approval of The Wilden was strictly tied to the addition of structured parking (i.e. not just surface parking). Apparently they couldn’t tie it to the office building because the lenders wouldn’t go along with that unless the office building was already financed (or something like that). However, everyone agreed that it would make no sense for Bob to build the parking without the office building so the assumption was that the office building would have to go up for any of this to work.
Now it seems like The Wilden’s not tied to even the structured parking. In fact, it sounds like the 360 building could remain as is and The Wilden could end up just using the parking currently available at 360. If that’s how the project shakes out then we’re back to where we were before (except maybe worse) because we’ll have a new building crammed in close to two older buildings – which will then be even harder to redevelop in the future (especially if any future redevelopment of 360 would need to continue to provide parking for The Wilden). That wouldn’t do much for the streetscape in the area, that’s for sure.
The other problem is the parking. We don’t really need that much parking down here. Pizzeria Orzo has parking in the deck behind/under the Tax Analyst building. Elevation Burger doesn’t have tons of parking but there’s actually quite a bit of street parking that would be closer than the proposed deck at The Wilden (especially if the time limits on the street were enforced). And while more parking is always nice, we might end up squandering federal money on parking in the wrong place. We need parking up closer to Broad Street – no down by The Wilden.
If City Council passes resolutions that allow The Wilden to go forward without the new office building I think we’ll regret it some day.
One final thing – it’s nice to say that The Wilden won’t cost us anything for a couple of years and then it will be less than a penny on the tax rate (I know Dan said that, not Gordon) – but how do I compare that to other things? How many pennies on the tax rate would it cost to keep the library open on Sundays? Give us some context with this number.
Hi, there — me again. Apropos the difficulty of obtaining straightforward, easily understandable information about the financing and constantly evolving parameters of the proposed Wilden project, there is an interesting article in today’s (Sunday’s) Washington Post, beginning on page C1 of the Metro section. The article is about a proposed development in Maryland, but it could just as well apply to Falls Church and the Wilden project.
The article is headed “Science city plan’s projections challenged: revenue estimate among concerns.” The article begins:
“In debates over new development, data are often the most valuable currency, cited to demonstrate a project’s value … But the Washington area’s legions of sophisticated community activists are increasingly reluctant to accept data from local officials, saying the numbers are unreliable.”
Maryland county officials were attempting to sell the development as a potential business development and job-producing mecca that would have a minimal impact on the surrounding community. However, “speaker after speaker at a recent community meeting said the data aren’t telling the real story. [Speakers] are concluding that the … project is too big and too dependent on the not-yet-built [transit project]” and is unlikely to perform as described. The article compares county government economic projections to contradictory conclusions reached by county citizens using the same data used by county officials.
The article concludes: “Some local officials and residents say they are uncertain whose numbers to believe.” Thus, “[t]hey have asked the County Council to either substantially revise the plan or send it back to the Planning Board for reevaluation.”
Sound familiar? I commend the article to the members of the FC City Council and to City taxpayers as a cautionary tale, along with my request that the Council reevaluate the Wilden plan. My efforts to sort through the short- and long-term financing data for the Wilden strongly suggest that the project will be much more costly to taxpayers than city officials might like us to think, and for a very long time.
Supporters of the Wilden project have generally limited their public comments about project financing and its effect on the City budget to the first 2 years, during which construction would be taking place. They claim there would be no effect on the City’s budget. The claim is technically true, at least in the beginning, in that $532,000 will be borrowed from one dedicated City housing fund to pay the debt service costs of the new Affordable Housing Trust (AHT). However, I note from City data that the “borrowed” money is in the form of an interest-free loan that will tie up that $532,000 for 15 years, after which the FCHC will pay back the city housing fund from which it borrowed. During the 15 years, the purchasing value of the money will decrease substantially, and the funds will be unavailable for other affordable housing needs, such as workforce housing.
Supporters of the Wilden project also claim that it will produce income from BPOL taxes and incidental restaurant and other taxes during the construction phase — also true enough. However, it is unclear whether the projections are based on an as yet unsupported assumption that the Wilden and a proposed office building will be built simultaneously. And, of course, once the existing, older office building associated with this plan is demolished, any new revenue would be offset by the loss of tax revenue associated with the demolished building.
I am delighted to see the thoughtful dialogue that this topic has engendered. I have been public in my opposition to this project, solely due to the fragile economic underpinnings of the 360/parking lot tie in. In the last planning commission meeting, the interventions that revealed that there was a very real possibility that this project would result in a net loss of affordable housing by 2016 were startling to me. Going back to the City’s Comprehensive Plan, we see that affordable housing is woven in to the planning of this City as a commitment to our city residents and a recognition and inclusion of different economic strata. To now see that this project would subvert the intent of 50 new units every 5 years, and jeopardize our economic situation at a time of real budget crisis causes me to wonder why this is on the fast track. Yes, there are leveraged dollars. No, those dollars do not relieve the City’s current or projected economic crisis. Sometimes, some money is too expensive to accept.
I don’t want to be in the position of defending this plan – I just posted my opinion based on what I heard in the planning commission debate last Monday.
To Andy, my understanding is that the parking deck/office building/Wilden are tied together such that if one fails to come to fruition, they all fail. I am wondering where you heard that the Wilden could use the existing 360 parking – this seems counterintuitive as they do not own that lot. As to where we put public parking, instead of holding out for a single parking garage at Washington/Broad, why not spread the public parking around downtown in the new developments, spreading the federal dollars around with it?
To Linda, I thought that the idea of the city leasing Mr. Young’s building went away weeks ago, and that Mr. Sawner has signed a letter of intent to lease space (15000 sq ft, about half) in the Young building while he redevelops the “500″ buildings.
Gordon, it looks like the project has been tied to the structured parking (at least that’s how I read the latest documents put out by the City that the FCT linked to on it’s most recent update) – which is great news. I had heard from people at that last planning commission meeting that the strict connection to structured parking might go away. I’m glad to hear the connection remains. I don’t think there’s any specific connection to the office building though (other than that the structured parking has to be build so that it could physically support an office building on top of it) – but that’s how it was at the last EDA meeting too. The thinking there is that Bob can’t financially support building a parking deck with no revenue so he’ll only do the deck if he can do the office building too.
The parking will be at 360 whether it’s surface or structured (sounds like it has to be structured or it’s a no-go on the City’s $2M loan) – The Wilden (350) has to plans for parking on their lot – from what I understand.
If there’s enough federal money for parking in other places then sure, spending some down at 360 isn’t terrible. But I have no idea how much federal money there is and how much of it might be spent at 360. If there’s enough to go around then that’s great – but if a potential project crops up near/on Broad Street and we could help close the deal by offering some public parking but we don’t have enough funds because they’ve been spent at 360 then that’s where I’ll be disappointed. I’m not sure who at the City knows all these details and takes them into account when projects are being considered.
As for who might rent Bob’s building – it sounds like the City is out of the mix but keep in mind that “the City” and “the water system” are two different things.
The Wilden funding chart at
http://fallschurch-va.granicus.com/MetaViewer.php?view_id-2&clip_id-84&meta_id-5243
notes “public tenant to reduce pressure on City Hall CIP” as a future option for the office building. Unclear if this has gone away; unclear who “public tenant” would be. That’s part of the problem for anyone trying to understand the scope of the taxpayers’ committment and costs associated with the project — its a moving target that changes with the wind. Now a structured garage, now surface parking, now no Wilden without the office building, now a Wilden possible without the office building. The office building exists as a “vision”, or is it more an apparition? Gotta hurry so we can collect those federal and state funds and start construction by June; no time to clarify. It’s project design and development by the seat of the pants.
My understanding of “public tenant to reduce pressure on City Hall CIP” is that there are improvements that need to be made to City Hall and moving some of the occupants out for a while (City staff or water system staff) could make it easier to make those improvements (or delay when they need to be made by). Of course, reducing pressure on the CIP in exchange for adding pressure to the general fund doesn’t necessarily make a lot of sense.
And my bigger point is that there is quite a bit of available office space in the City – we wouldn’t need to lease space for a premium in a brand new building if we need to move some folks out of City Hall for a while.
Andy,
In your next to last comment you stated that the Wilden and the construction of the structured parking were tied together; actually they aren’t.
As Linda mentioned the sheer volume of changes regarding site plans, Office construction, structured parking with an office building, without an office building, etc. make it very difficult to see under which shell the pea is located.
The Planning Commission, at its March 15, has effectively pre-approved a waiver of assured on site parking for the Wilden project. That is, elderly residents of Winter Hill can be transferred to Wilden without assurance of on site parking.
Quoting from paragraph 4 of City Council document 10 (a) (1) (TR10-09)-1 SE preliminary site plan (3-4-10) the Planning Commission in its summary stated, “If the structured parking is not qualified for a Certificate of Occupancy (CO) at the time the Wilden building and site are qualified for a CO, that the Council craft language to allow for temporary, short term, off site parking”.
Since the Planning Commission did not define, by location or time limit, the concept of “temporary, short term off site parking” it is not clear when or if parking for the Wilden project will ever be available.
I would have attached a link but the City’s website is not functioning properly.
Ira J. Kaylin
The Little City, our little city, committed to affordable housing for the refugees post Viet Nam a long time ago. To now attack the only project that has a chance of suceeding of being built in an economic downturn and by translation, of attacking the senior citizens living in tiny 500 SF 1BR apartments, seems really wrong. You should be ashamed of yourselves.
Thank you for the words, Mr. Sze. My advice to you in the sentiment of Mark Twain, Will Rogers and Jon Stewart, is to “please chill.” Good people can agree to disagree.
As the City’s Cooperative Agreement Housing Partner since 1981, FCHC has long appreciated that some community members choose to remain principled and unmoveable in their opposition to the use of tax dollars for the provision and/or leveraged subsidy of housing opportunities that most localities set goals and make plans to assist for income challenged folks who choose to live where they work or remain during retirement years. We have never minded hearing those honest and principled statements in response to any of the work plans and projects we have brought forward to City leadership and its public arena over the last many years of trying to create housing in response to our City’s demographic and people needs. It comes with our housing mission territory.
Now as another sage in my life would say, “the proof of the pudding is in the eating”. We look forward to our next round of public meetings in pursuit of a combined Site Plan for permitting the demolition and redevelopment of the 350/360 S. Washington St properties as contracted with City Council on March 22. We trust that as the combined plan takes shape its actions will speak louder than all the words expended in getting to the place we are today.
We are humbly grateful for the wide base of community support we do enjoy and trust that FCHC, The Community Builders and The Young Group will add a few more supporters to that list from those who honestly are taking a “wait and see” approach to our achievements being the right plan for our Council to have committed to support by a 6-1 margin.
Thank you again, Mr. Sze, for your consistent and continued support. Carol Jackson, FCHC Executive Director.
PS I had not read all these comments prior nor since March 22nd. My door and phone lines remain open to any who have expressed interest in knowing more easily the answers to particular questions–many of which are answered by the Council packet produced for the March 22 hearing, but many are admittedly confusing to grasp as the terms of the SE and financial commitments were revised after the Planning Commission hearing on March 15. The 360 garage is tied to City $2 mil financing. Short term parking off site for The Wilden to obtain its needed COs will be permitted no more than 180 days in the unforeseen short term circumstance that 360 garage is not occupable based on currently unanticipated, Murphy’s law construction delay.
There has been some real mis-information about what happened at the Planning Commission meeting on March 15th. Basically, the Planning Commission (PC) appended four conditions to the Special Exception recommendation to the City Council. These conditions were drafted by staff to address concerns of the PC and a change in the Wilden’s design. These conditions briefly were:
1) Addressed a change in the voluntary concessions regarding the commercial space (dropped from 1,800 to 1,500 sq. ft. due to design changes).
2) That the project would be developed with substantial conformance with the prelim site plan. We had requested and received some significant design changes and wanted to make sure they remained including how the Wilden (350) and the McKeever (360) will fit together.
3) That the reduction in parking requested could not be for less than .5 spaces for seniors and one space per 300 sq ft for the commercial space. Again, we have already spent time on parking and did not want to start over at site plan.
4) That no Certificate of Occupancy (CO) be issued for the Wilden unless the parking at the McKeever is completed and ready. (Our attempt to tie the buildings closer together!)
Number 4 turned out to be a sticking point for The Community Builders (TCB). They must have COs on deadline (12/31/11) to receive the tax incentives. Therefore, potential investors told TCB they would not invest if the COs are dependent on another building being completed on time. At that point, FCHC’s council, Dave Lasso, requested we add a modification that they could use temporary/offsite parking for COs in the event the McKeever fails behind on their construction schedule. When we attempted to define temporary, we were asked not to at this point. They were fearful that a rigid definition would also be rejected by investors.
We asked the staff if temporary/offsite parking could even be used for a CO and if any suitable parking even existed and the staff was unsure. Also, there was no way to craft language that the investors would approve without their input. So we punted it to the council to allow staff time to research it and discuss language with the applicant.
Our actions on a recommendation have no weight other than the ability to push the council to need a super majority if we recommend against. The council can reject, ignore or keep our proposed conditions. They are just recommendations. The Council kept our conditions with new language in Number 4 as the PC requested defining temporary as 180 days or less (the staff worked with the applicant to develop a definition all could accept). Let me repeat temporary has been defined as 180 days and the location of the parking must be approved by the city.
Additionally, with our comments on the financial aspects of the project (TR10-9-1 and TR10-9-2), we asked that language be added saying if Winter Hill Apartments are sold in the future that FCHC would use the proceeds to pay off the loan or put the money in the Affordable Housing Trust Fund to cover the loan payments (to take the burden off the general fund). We also asked for closer financial ties between the Wilden and McKeever regarding the closing of the loan and language regarding potential loan default be added. These changes were accepted by Council.
See page 12 for our recommendations for changes to the financial agreement that were accepted by council:
http://fallschurch-va.granicus.com/MetaViewer.php?view_id=2&clip_id=105&meta_id=5948