Housing Corp Emergency Request for $1 Million Dominates City Council Meeting

By GEORGE BROMLEY
Falls Church Times Staff

July 27, 2010

An item not on the published agenda became the highlight of last night’s meeting of the Falls Church City Council – the Falls Church Housing Corporation’s  request for immediate access to $1 million to save the “McKeever” office building and parking garage, which in turn is necessary for “The Wilden” affordable housing project.  

According to those in attendance at last night’s meeting, financing is still lacking for the McKeever project four days before a crucial July 31 deadline.   

The McKeever and Wilden projects were approved in March by the previous City Council as a joint package.  Because of their close ties, if one project fails, the other likely also will fail.  The Falls Church Housing Corporation (FCHC) has told the City Council that unless financing for both projects is secured by the end of this month, the housing organization will miss out on essential federal and state affordable housing monies intended for the Wilden.     

Originally, the Wilden was to be built by the FCHC and its partner The Community Builders, and the McKeever was to be built by “Flower Building” owner Bob Young.  According to discussions last night, however, Young’s  project appears to lack necessary funding, putting both projects at risk.  To avoid missing its July 31 deadline, FCHC has proposed that it buy the property upon which Young’s building would stand, relieving Young of that obligation and allowing the  McKeever project – and hence the Wilden project – to go forward.  To allow it to buy the property underlying the McKeever project, FCHC is asking the City Council to let it use $1 million of a $2 million loan intended for the Wilden, and to provide the $1 million immediately. 

The FCHC currently owns the site of the Wilden project at 350 S. Washington Street.  The McKeever project is planned for the adjacent property at 360 S. Washington, currently owned by the estate of local businessman Thomas Sawner, who died last week.  Young signed documents earlier this year indicating his intent to purchase the Sawner property, but the sale has not been finalized.

Last night Mayor Nader Baroukh began the discussion of the FCHC’s request for early payment of  $1 million with a number of questions to City staff.  Included among Baroukh’s questions was why there now is a shortage of $1 million, where funds to cover the gap would come from, why the FCHC was facing a July 31 deadline, and what would be the potential financial impact on the City if it approves the FCHC’s request but the McKeever project is not built concurrently with The Wilden.  He also inquired regarding the status of $2 million in Capital Improvements Program funds set aside for affordable housing and asked for a report on the potential risk to the City, given revised financing arrangements.  

Answers to the mayor’s questions weren’t immediately available, but other Council members were not hesitant to express their opinions on the topic.

Former mayor Robin Gardner, who advised that she had learned of FCHC’s concerns only last Wednesday night, viewed the proposed change in the loan agreement as essentially an amendment to the previously approved resolution; i.e., that instead of funding the $2 million at a later point the City would fund half of the money sooner. 

New members Ira Kaylin and Johannah Barry saw things differently.  Mr. Kaylin called the change “a new proposal, in terms of its financial complexity.”  Ms. Barry concurred, stating “This lack of financial planning is not our crisis.  Though it looks as if we’re shifting distribution dates, in fact this puts the City at a much higher financial risk, instead of the third or fourth contributor to this process we’ve become capital investors, the first in line.” 

Vice Mayor Dave Snyder referenced a statement from The Community Builders, the FCHC’s partner in the project, which claimed that the risk to the City had not increased.  He observed that although there are risks to the City in proceeding, there are also risks in not doing so.  Councilman Ron Peppe agreed with Mr. Snyder and pointed out that the Council had previously endorsed the project by a 6-1 vote.  

Mayor Baroukh, who cast the lone negative vote in the Council’s March 6-1 approval of the Wilden, stated that he did not know why the matter was being raised “at the 11th hour” and said the change was not what he would call a minor amendment.  “This has some significant implications on some text that took hours upon hours to work through, but now we’re only going to have a few days to fully assess this.”  

One key question will be how the diversion of $1 million from the Wilden to the McKeever project would affect construction of the Wilden, and whether FCHC has identified a source for replacement of the $1 million. 

At press time only the agenda for Thursday’s meeting had been posted on the City’s website.  The primary documents regarding the FCHC’s request were not available.  A link will be added to this story when the documents are posted.  

Late Monday night Councilmen Lawrence Webb and Ron Peppe each told the Falls Church Times by email that they were awaiting more information before forming a position on FCHC’s request.  Councilwoman Gardner said she did know her position, but due to the lateness of the hour, would provide that information along with a comment on the matter on Tuesday.   

Inquiries to FCHC and Young regarding the matter were sent late Monday night after the City Council meeting concluded.  Information received will be made available when received.  

At the request of Gardner and Pepper, the Council has schedule a special meeting Thursday night for consideration of the FCHC request.  The Council is expected to vote at that time on whether to grant the FCHC’s request for early receipt of $1 million. 

On a separate matter, the GEORGE bus service, which was the primary item on last night’s Council agenda, did not receive a lengthy discussion.  Two residents spoke in support of the system and one in favor of its termination.  Mayor Baroukh asked the public to offer their views via email before the Council’s work session next Monday. 

Five options for GEORGE have been under consideration.  Mr. Snyder suggested adding an option of reducing service hours on 26E, while still retaining some rush hour trips on 26W.  The vice mayor also encouraged Gary LaPorta of the Chamber of Commerce, who spoke in favor of the service, to offer recommendations as to how the bus could be used as an economic development tool.  

The Council unanimously approved second reading of a change in the City code to allow the use of photo monitoring systems to enforce traffic light signals.  Police Chief Harry Reitze stated that the department was still pushing for installation of two enforcement systems by early fall but could not offer a specific date. 

Ms. Gardner reported that she and City Manager Wyatt Shields had attended Monday’s memorial service for local developer Thomas Sawner.  She expressed regret that Falls Church had only known him for a short time and praised “the amount of giving he gave to his community.”

In his report to the Council Mr. Shields stated that 130 people dropped off hazardous materials during last Saturday’s collection event.

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July 27, 2010 

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11 Responses to “Housing Corp Emergency Request for $1 Million Dominates City Council Meeting”

  1. Andy Rankin (Falls Church) on July 27th, 2010 8:42 am

    I didn’t see the meeting – but this report (and the one at the FCNP) mentions Mr. Snyder’s comment that there are risks to the City if we don’t proceed with this change – can anyone explain what those risks are?

    Will this change result in the City owning part of the McKeever or the land that it will be built on? Would it result in a revenue stream for the City?

    When the original plan was put together the $2M from the City was contingent on the McKeever getting financing. This was because without the McKeever the Wilden had no planned parking and I think a lot of people (including me) worried about building an apartment building with no parking. For me it wasn’t just the parking issue – but also that sticking the Wilden at 350 without also redeveloping 360 and/or 370 would really make it hard to redevelop those lots in the future.

    I’m looking forward to additional information about this situation. So far it seems like a huge change to what was planned before (with a huge $1M gap since half the City’s money seems to now be going to something else).

    One more thing… how is it that almost every step of the way with this Wilden project the City Council has 1-2 days to make some critical decision? Does the FCHC maintain a calendar that stretches out into the future with due dates on it? Could someone publish that calendar somewhere? It’s almost comical at this point how often we’re up against some do or die deadline (most of which seem to pass without any ill effects).

  2. Manny Little on July 27th, 2010 9:36 am

    What’s another million? We have taxpayers who will just pay more taxes.

  3. TFC on July 27th, 2010 10:49 am

    Andy, I agree with your observation about the time line here….something seems to be “on fire” with this project on a regular basis. I wonder if the close deadlines result in hasty decisions?

  4. Mike Novotny on July 27th, 2010 11:14 am

    Isn’t this why the Council approved the project with the contingency to begin with…to avoid the McKeever not having its own financing and placing taxpayer money at more risk?

    Look, it’s really hard to cobble together financing for any new building “as you go”, much less two buildings. That’s not how the rest of the development world operates.

    So now I’m wondering what happens when the $1M gap can’t be secured later? Or there are cost overruns because they rushed through the design? Or there are maintenance or capital costs after the building is completed? And who pays the debt service for the bond after the affordable housing fund is depleted (which will now happen sooner than 2013 if we issue the bond earlier)?

    This isn’t the first request for more City help, and I’m sure it won’t be the last. It’s obviously for a very worthwhile cause, but this project is more than we should be handling, it may be time to move on to other issues.

  5. Abe Wheeler on July 27th, 2010 11:31 am

    Ditch George once and for all

  6. Gary LaPorta (City of Falls Church on July 27th, 2010 12:03 pm

    My remarks on George at last night’s City Council meeting were me speaking as a private citizen and NOT as a Chamber representative. The Chamber does not have a position on this one way or the other at this point in time

  7. j bowman City of Falls Church on July 27th, 2010 5:21 pm

    The Wilden Project has been discussed at past Council meetings…but, I still do not have enough information to have an informed opinion. But, I do know that the City really wants it!
    Last week at the joint City Council and Planning Commission meeting, the discussion was on special exceptions. Builders ask for zoning exceptions AND THEN offer the City proffers (aka voluntary contributions.)
    The City’s next redevelopment project to be reviewed is “The Gateway.” There are four proffers. One most notable and the largest amount is: $4.2 million to the affordable housing program.
    When I asked why… I was told that this is a City priority.

  8. FCC Resident on July 27th, 2010 10:49 pm

    A City priority? My, I would think the City would have other “Priorities”.

  9. Gordon Theisz, City of Falls Church on July 27th, 2010 10:51 pm

    Juanita, as I understand it, the $4.2 M proffer for affordable housing, if accepted, would go to the affordable housing fund, not the Wilden. I would prefer to see affordable units there – I’m a proponent of spreading the affordable housing around. The proffers have nothing to do with the quality of the project.

  10. j bowman City of Falls Church on July 28th, 2010 10:07 am

    Gordon,
    Thanks for the clarification.

  11. Gordon Theisz, City of Falls Church on July 28th, 2010 10:24 am

    Re-reading my post, I want to clarify that I would prefer the affordable units included in the Gateway and in other mixed use buildings rather than monetary proffers.

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