Where’s the $2 Million? (Part IV)

By STAN FENDLEY
Falls Church Times Staff

March 16, 2010

Since July of last year, the Falls Church Times has followed the status of the City’s 2008 $2 million no-interest loan to Falls Church Housing Corporation for a purchase option on property at 360 S. Washington Street.  That purchase option expired unexercised in December 2009, triggering a repayment requirement by the property owner and the Housing Corporation by the end of January, 2010.

Presently, $531,174 of the $2 million loan remains outstanding.  City officials say they expect the balance to be paid later this month.

The purpose of the 2008 loan was to help the Housing Corporation purchase 360 S. Washington Street in order to make it part of a 174-unit affordable housing project covering 350, 360 and 370 S. Washington.  That plan died in 2009 for lack of adequate funding.

Now the Housing Corporation has reduced the size of the project, called “The Wilden,” focusing on a 66-unit facility for senior citizens.  The Housing Corporation requested another $2 million loan to support the smaller project, which the Falls Church City Council approved on March 8 on a 6-1 vote.  Councilman Nader Baroukh cast the lone opposing vote.

The City Council is expected to vote on final approval for The Wilden on March 22.

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.

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.

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.

USA Today ‘Green Home’ Writer Gets Input on Color, Siding

February 24, 2010

Here are links to the latest two installments by Wendy Koch in her USA Today column as she details the saga of constructing a “green” home on North Virginia Avenue. On February 20 she wrote, “We submitted our grading and construction plans in January to the city of Falls Church, Va., where we’re building, and are waiting – increasingly impatient, I’ll admit — for our permits. We hope to break ground next month.” Read more

Falls Church Rejects Use of Public Funds for Office Building

By STAN FENDLEY
Falls Church Times Staff

February 18, 2010

Earlier today, the Falls Church City Council decided against using City monies to support redevelopment at 360 S. Washington Street, as was proposed by McLean-based Jefferson One LLC last week and reported in the Falls Church Times yesterday.

The following statement was received by a City spokesperson this morning following a meeting of the Economic Development Committee of the City Council:  

“[City] Council determined that public funds will not be committed to  support the redevelopment on 360 S. Washington St. (proposed office building). The Council’s Economic Development Committee continues to work with the developer to explore alternative options.”

 

New Wilden/Office Plan to Include $2.5 Million Equity from City, 10-Year Lease, $500K Grant

By STAN FENDLEY
Falls Church Times Staff

February 17, 2010

[NOTE FEB. 18 UPDATE AT BOTTOM OF THIS STORY]

“Flower Building” developer Bob Young of McLean-based Jefferson One LLC has proposed to City officials a financing arrangement in which the City would pay $2.5 million in equity plus other monies to help with the development of a proposed new office building at 360 S. Washington Street.

 Young’s presentation, made to the Economic Development Committee of the City Council Friday morning, envisions redeveloping 360 S. Washington Street in coordination with the construction of the “The Wilden” affordable housing project at 350 S. Washington Street.  The Wilden project will be built by the Falls Church Housing Corporation, which is requesting another $2 million loan from the City for the affordable housing project.  Falls Church Housing Corporation participated with Young in Friday’s presentation.

A City-supplied outline of Young’s concept contains the following bullet points characterizing elements of his plan regarding the proposed office building:
o       $2.5M equity investment by the City along with $780,000 from the Wilden Partnership LLC;
o       50% of the total office building to be pre-leased by the City
o       Proposed lease term of 10 years;
o       Office building reverts to City ownership or designee at end of mortgage;  value is estimated at $10M
o       Dividend of $100k per year per life of mortgage (i.e. 25 years) equates to $2.5M
o       Public parking for S. Washington St. redevelopment stimulated with approximately $500k +/- of  Intermodal funds (25%) for day/evening/ weekend public parking spaces along with transit resources such as bike racks, designated Zip car space, kiosk, bus shelter

According to meeting attendees, Young’s presentation envisions that the City monies would come primarily from the City water fund, and that water employees would lease 15,000 square feet of space at $29.50 per square foot ($442,500 annually).  The $500,000 contribution for the garage would be monies awarded to the  City via federal appropriation for  intermodal transportation.

Young’s project would be a 27,000-square-foot office building with three floors of office space above three floors of parking, which would include public parking.  Parking would be shared with The Wilden senior affordable housing complex.

Young successfully used the model of leasing to government entities at the “Flower Building,” where he secured both City school administrative offices and the U.S. Post Office as renters.

Economic Development Development Authority member Mike Novotny, who attended Friday’s meeting, previously presented an economic analysis on The Wilden to the EDA.  In that study, he reported that 350, 360 and 370 S. Washington  properties currently generate $59,000 in net revenue to the City, but that total revenue would decrease to $51,000 if Young’s proposed building at 360 S. Washington Street were 50% pre-leased to the City as Young has proposed.

Subsequent to Friday’s meeting Novotny asked City staff for a list of existing office buildings in the City which could provide space for the water employees.  The City Economic Development Office prepared the list below, showing a number of properties offering space at less than Young’s suggested $29.50 per square foot.  According to the list, lease rates at other buildings are available as low as $20 square foot.

City officials declined to respond to a question regarding whether the use of water funds to support Young’s project would conflict with restrictions recently placed on the City in litigation with Fairfax County Water Authority.  In that litigation, the judge ruled that the City could not return profits from Fairfax County customers to the City’s general fund.

According to City spokesperson Barbara Gordon, Young’s plan is now under review by City staff.

The City’s list of available office space follows.  (Click on “Full” at the bottom of the viewing window to see the document in full screen.)

 

UPDATE, NOON THURSDAY FEB. 18 -   The following statement was received today from Falls Church City officials following a meeting this morning of the Economic Development Committee of the City Council:

“[City] Council determined that public funds will not be committed to  support the redevelopment on 360 S. Washington St. (proposed office building). The Council’s Economic Development Committee continues to work with the developer to explore alternative options.”

EDA Member Challenges Housing Project’s Value to City

By STAN FENDLEY
Falls Church Times Staff

February 5, 2010

A member of the Falls Church Economic Development Authority challenged the wisdom of the proposed affordable housing project, “The Wilden,” Tuesday night, indicating that the City could gain over $1 million a year with a different approach.

At the organization’s monthly meeting EDA member Mike Novotny presented a 15-slide presentation considering alternative uses of The Wilden property at 350 South Washington Street, along with adjacent properties at 360 and 370 South Washington Street.  Earlier this week, City officials disclosed that the new owner of 360 South Washington, Bob Young of McLean-based Jefferson One LLC, intends to construct a new commercial building in a consolidated site plan with The Wilden.  The Wilden property is owned by the Falls Church Housing Corporation, which will team with Boston-based The Community Builders to construct the affordable housing project.   Falls Church Housing Corporation is seeking a $2 million 15-year loan from Falls Church taxpayers to support The Wilden.  City officials indicate that Young has discussed the possibility of the City renting space in his new building.

Novotny’s presentation estimates that together 350, 360 and 370 South Washington Street currently bring revenue of approximately $59,000 a year to the City, which could grow to approximately $95,000 a year as a result of the coordinated effort between Young and The Wilden partners.  Alternative scenarios, Novotny says, could raise as much as $1.3 million a year for Falls Church coffers based on modeling used by the City.

Falls Church Housing Corporation CEO Carol Jackson was present at the EDA meeting and subsequently offered to host a forum for Novotny to present his ideas to “a diverse group of community stakeholders.”

The Falls Church Times conducted the following interview with Novotny Wednesday concerning his presentation.

FCT:  Why did you present this alternative analysis?

Novotny:   The City Council asked the Economic Development Authority to review and make recommendations on the special exception proposed for the Wilden project. In response I tried looking at the broader economic impact by comparing the project with alternatives that are more consistent with the City’s future land use plans.

FCT: Why do your alternative schemes include office and retail uses but no residential?

Novotny:  First, the Wilden parcel is zoned for business use, and the City’s Comprehensive Plan calls for business use throughout that area. In fact, this portion of the City is one of only three main areas that are proposed for significant amounts of business use.  The other two are in the West End near West Falls Church Metro station and the East End near Seven Corners.

Second, attracting high-quality office and retail development on a scale that befits our community would do a lot of good for our City. These uses create significant new tax revenue while not burdening our schools or City services.

Third, in the big picture of our City’s finances, 75% of our real estate tax revenue comes from residential and 25% from commercial. We are not diversified with commercial development, so our residents pay an excessive portion of our overall real estate taxes as a result.

Consider that in Arlington 15% of the land pays for 50% of the taxes. They are using their commercial areas wisely and have achieved a better balance of commercial uses to residential.

To move even to a 70% residential/30% commercial ratio, we would need to add about one million square feet of commercial space – about ten new office buildings of 5-stories each.  And to get to a 65% residential/35% commercial ratio, we would need two million square feet – about twenty buildings.

That’s a significant amount of new commercial space in a City that’s only 2.2 square miles, and since we only have a few areas that are really suitable for commercial development, we would be smart to plan them really well and encourage that type of use.

FCT: Why do you think we could attract Class A offices to that area?

Novotny: You don’t have to look far outside of the City to find great examples of other jurisdictions that have planned specific commercial areas, put the right incentives in place, and successfully attracted class A commercial development. Falls Church is a well-located and desirable place, and I believe we can use similar strategies to attract high-quality development.

FCT: What would it take for the city to accomplish the kind of development there that you envision?

Novotny: We need to start with very detailed long range planning. I’ll quote the Columbia Pike Initiative main page to show the process they used:

Through the course of numerous meetings with the community in 2000 and 2001, a long-range vision and plan was established that focused on economic development, land use and zoning, urban design, transportation and public infrastructure initiatives, as well as existing and future open space and recreational needs.  The development of the resulting two-volume Columbia Pike Initiative – A Revitalization Plan, adopted in March 2002, was a cooperative effort between County staff, the Columbia Pike Revitalization Organization (CPRO) and area residents, business and property owners.

To plan areas like the South Washington Corridor in a more comprehensive way and to attract high-quality development, we need to follow a planning process like the one used for Columbia Pike. The alternative is keep bumping along and deciding our future on a project-by-project basis.  Occasionally we’ll get lucky and get a good development project, but more often we’ll be disappointed with the outcome.

FCT: With the office market down why would your proposal make sense?

Novotny: Now is the best time to plan while the market is down.  Real estate is cyclical, when the market turns back we need to be ready.

—

Novotny finished the interview offering to meet with other key City decision makers to exchange ideas about the South Washington Street area.

Novotny’s complete presentation appears below, followed by reactions from EDA members Bob Butchko, Phil Duncan, and Andy Rankin, as well as FCHC CEO Carol Jackson and developer Bob Young.

—–

REACTION TO NOVOTNY PRESENTATION

Bob Butchko, EDA Member:

Mike’s aggressive “development zone approach” is completely refreshing and spot on. It has worked well in many jurisdictions. most notably, Arlington County, a extraordinary success story.

This approach gives the city a chance to take the bull by the horns, and reach out to developers with a plan not, just a prayer.

—-

Phil Duncan, EDA Member:

I really appreciated the effort Mike put into his presentation at EDA last night. It stimulated the sharing of some very useful information about the challenges the City has faced through its history in accomplishing economic revitalization.

One thing Mike said that stood out to me is that the City’s economic viability hinges on a very aggressive campaign to encourage new, revenue-generating development (including 2 million square feet of office space, I believe he said).

To my mind, redevelopment on this scale is more likely to be proposed by developers, and would more likely be supported by the citizenry, if we encourage it to occur on the City’s west and east ends, on the land in the City that is closest to the East and West Falls Church Metro stations and I-66 access. I think it would be very valuable for Mike to apply his “visioning” approach to the City’s perimeters, so citizens could begin to see how we could generate significantly more tax revenues by capitalizing on our proximity to Metro & I-66, while still preserving at the heart of Falls Church the “small town” feel that is so widely cherished.

Listening last night to the various points of view, which were consistent with what I’ve heard many times in my 25 years as a City resident, I wondered if we might attract more developer interest in, and citizen support for, revitalization of the City Center area if we focused there on uses of what I’d call a civic nature — government services, social outreach (to elderly, youth, workforce, etc.), indoor and outdoor community gathering spaces, educational and recreational facilities, arts/culture/heritage venues and amenities, and neighborhood retail/restaurant/services. These are the kind of uses that can help Falls Church retain the special sense of place that so many hold dear.

—-

Andy Rankin, EDA Member:

From an EDA perspective I worry about using land in that area for the Wilden project – Mike’s analysis shows why we need to be careful about how the limited commercial areas in the City are used.  If the potential problems for the Wilden encourage Bob Young to put a small office building on the other lot then that’s a good thing – although if he mostly rents it to the City then that’s not a great thing (if the City needs office space, there is already some available for rent).  Bob’s office building would be a ton better than having the Wilden stuck next to the existing 360 building (although it seems like such an arrangement might not ever have gotten through), but ultimately it will do little to encourage additional redevelopment in that area.

It didn’t get discussed in the meeting too much but apparently the owner of 370 has no intention of selling/redeveloping – which isn’t good.  If the City put incentives in place to try and consolidate the lots on that block you could eventually get to the point where the economics would sway 370 to sell (everyone has a price).  However, with the Wilden and a Bob Young building next door it sounds like 370 will sit there forever.  It will be hard for anyone to justify buying it for a price that would sway the current owner, and the current owner says he’s staying put.  I think that would be too bad – those buildings do not benefit the City aesthetically or economically.

From a non-EDA perspective (i.e. my personal point of view) I think it’s too bad that the FCHC has been trying to get stand alone buildings built instead of doing more to get affordable units included with the mixed use developments.  I haven’t been around long enough to know the history, and obviously it’s easy for me to say this now – after the recent projects in the City have been completed – but I really think it would be better for the City and the affordable housing residents if they could be integrated and not concentrated.  Ultimately, I think City residents should pay a similar amount in taxes dedicated to affordable housing as people in Fairfax County and Arlington County do – but that might mean supporting affordable housing initiatives in those jurisdictions where they might have more appropriate spaces for dedicated buildings (although I still think it’s a bad approach).

—-

Comment of Carol Jackson, CEO, Falls Church Housing Corporation

I would like to thank Mr. Novotny, Rick Goff and the EDA for giving us all some meaty food for consideration as we contemplate the bigger economic development picture and decisions made to foster our city as a truly sustainable community for the future.

There have been many discussions and plans put forward in pursuit of this topic during the 32 years my family has lived in Falls Church.  There is always room for one more, and I think we should make a holistic effort to chew on this as soon as possible for the sake of our city’s land owners and citizens and decision-makers.

To that end, Falls Church Housing is interested in hosting an informal forum where Mr. Novotny will be invited to present his ideas to a diverse group of community stakeholders.  I make note of Phil Duncan’s response to you today as another good idea that deserves vetting in the same context.

Personally, I am a progressive who has always wanted our community to embrace change and the decisions that make sense in context with our long term community values.

Professionally, I represent an organization whose mission is to serve the City’s goals for providing and sustaining a continuum of housing opportunities for those who live, work and want to retire in their community no matter their income nor life stage.  The FCHC tag line is “defending our City’s historic strength; preserving affordable housing choices”.  Until this community instructs us differently, we are dedicated to that challenging mission and the people we serve.  In the meantime, the joint venture partners proposing The Wilden believe that our project as now proposed will serve as a catalyst for additional redevelopment in an area that has seen lots of effort but little results.

—-

Bob Young, developer, Jefferson One LLC, and new owner of the property at 360 S. Washington Street

I admire the thought that Mike has put into this topic because, as we all know, it is critical to our Little City’s future.  Unfortunately, Mike does not (like many others) have the benefit of knowing the history of development in the City, especially for the last decade or so during which I have been involved.  While I cannot tackle providing a detailed history here, I just want to point out that I got the first major project approved in the City for perhaps 20 years or so in July, 2000.  That was a 120,000 sq. ft. office building on the land now occupied by the Spectrum.  I note that the City agreed at that time to invest $1.5million in the parking garage of that proposed building to (hopefully) make it feasible.  I sold the land to Akridge which is what brought them to the City in the first place.  As big and sophisticated as they are combined with the fact that we were at the peak of the market for that cycle, they still were unable to prelease any of the space and eventually abandoned the project.

The point here is that I simply do not understand why anyone would think that anything has changed since then, except for the worse.  That certainly is the case for the office market.  There is no question in my mind that millions of square feet of new office space would be great for the City.  Unfortunately, I don’t see that ever happening—at least not for the next 20 years or so.  The demand by large (over 20 or 25 thousand square foot) users for office space in the City is virtually nil and always has been, notwithstanding the unique cases of Tax Analysts and Kaiser.  If anyone can find such users, I will be the first to stand in line to build buildings for them. I just do not see it happening and analyses that “prove” that high (2.5) density office buildings are “the way to go” I’m afraid rather miss the point.  We need to attract the development we can rather than always holding what might be but virtually never is.

I believe in this circumstance that the proposed FCHC/TCB project is a good one to help kick off redevelopment of that part of the City and I hope to be able to develop a modest 100% office building concurrently but even that is uncertain at this time.  Our project would be a 1.0 FAR, not 1.5 or 2.5.  That’s just what might be feasible.  I would love to talk to anybody who can show me how to prudently build a 2.5 FAR instead.

Finally, I want to point out that my company is in the Falls Church office and retail market all day, every day.  That often includes weekends.  I believe we have a good sense of the market.  And, as a result, we believe that the City MUST attract mixed use projects to survive, at least for the next decade or two.  It has now been proven that they do not flood the schools with new kids, they provide a significant net income benefit to the City and they bring absolutely needed new professional residents to the City.  People wonder why we have so much vacant retail space.  The answer is, among other factors, that we do not have the population to support all the new goods and services our citizens would like to see in the City.

There are many more points to make and hope to be able to continue to contribute to what I believe is an important and robust community discussion that I hope we can bring to a conclusion soon.

–

Additional information regarding the City’s consideration of The Wilden proposal is available here.  The City Council and Planning Commission will schedule meetings to consider the project over the next few weeks.

Residential Real Estate Values Drop 3%, Commercial 14%

Over Half of Single-Family Homes Retained Full Value

By BARBARA J. GORDON
City of Falls Church Director of Communications

February 1, 2010

Falls Church City announced today that the total taxable assessed value of all City properties as of January 1, 2010, is $3.04 billion, which is a 6.4 % decline from a year earlier.

Overall residential real estate values declined 3% over the last year. Single family homes values declined by 2%, townhomes declined 2% and residential condominiums declined 10%. However, 1,308 of 2,405 (54%) of single family homes remained the same or increased in value due to improvements to the property, and 113 of 556 (20%) of townhomes remained unchanged.

Overall commercial properties value declined 14% since January 2009. The real estate value of multi-family apartments declined 12%, large office buildings are down 21% and large retail properties (stores and restaurants) are down 15%. The value of City hotels declined 11% and general commercial properties (smaller retail, office and general space) declined 10%.

The City plans to mail the latest assessments by Friday, February 5, so property owners should receive the notices on or after February 10. Updated assessment information will be posted on the City web site February 8.

As set forth in the Virginia Constitution, real estate is assessed at 100 percent of fair market value. The City’s Office of Real Estate Assessment calculates property value annually using mass appraisal techniques that are standard in the real estate assessment industry.

Real Estate Taxes and Public Hearings

The notice of assessment is an appraisal of the fair market value of the property; it is not a tax bill. Property tax payments will be due in two installments on June 5 and December 5; property owners will receive bills prior to these dates.

The real estate tax rate will be determined on April 26 when the Falls Church City Council adopts the FY 2011 Operating Budget and Capital Improvements Program and sets the tax rate. Public hearings on the FY 2011 Proposed Operating Budget will be held on March 22, April 12, and April 26 at 7:30 p.m. in Council Chambers, located at 300 Park Avenue. To see the complete budget schedule, visit www.fallschurchva.gov.

Assessment Appeals

Homeowners wondering if their assessment is correct should ask the question, “Would my home sell for the assessed value if I put it on the market?” If the answer is “yes,” the assessment is probably accurate. If the answer is “no,” contact the Office of Real Estate Assessment at 703-248-5022 (TTY 711).

Deadlines for assessment appeals are March 19 for an Office of Real Estate Assessment review and July 2 for a Board of Equalization review. More information about the assessment review process is available online at www.fallschurchva.gov.

Real Estate Tax Relief Program for the Elderly and Disabled

The City’s Real Estate Tax Relief program assists eligible City homeowners by reducing their property tax through exemptions (grants) and deferrals.

Eligibility requirements:

• The owner must be at least 65 years of age, or totally and permanently disabled;

• The property must be the owner’s primary residence;

• The combined income of all household members must not exceed $33,450 for exemptions (grants) and $75,000 for deferrals; and

• Assets must not exceed $540,000.

The deadline to apply is April 15, 2010. For more information and an application, e-mail treasurer@fallschurchva.gov; call 703-248-5045 (TTY 711); or stop by the Treasurer’s Office in City Hall, located at 300 Park Ave., Suite 103 East Wing.

Washington Street Property Could Sell, Paving Way for Affordable Housing Project

By STAN FENDLEY
Falls Church Times Staff

January 29, 2010

An existing roadblock to “The Wilden” affordable housing project on South Washington Street could fall away through a change of ownership of property adjacent to The Wilden site, according to information communicated to City officials today.

In a memorandum written today, Assistant City Manager Cindy Mester informed the Falls Church City Council and Planning Commission that McLean-based Jefferson One, owned by “Flower Building” developer Bob Young, is in final negotiations to purchase property at 360 South Washington Street, next to The Wilden’s 350 South Washington Street location.  According to Mester, Young has stated a willingness to work with The Wilden partners on a consolidated site plan.  Young’s cooperation could remove existing barriers to the project that exist because of current owner Thomas Sawner’s unhappiness with effect of The Wilden’s design on his property.

At a recent City Council-Planning Commission joint session, Sawner told City officials that the plan for The Wilden would be unfavorable to his property, making his property an “orphan.”   Sawner has leverage in the matter, however, because of easements he holds which would be violated by the current design of The Wilden.  Failure to resolve the easement matter to Sawner’s satisfaction would likely make it impossible for The Wilden to proceed to construction.   (Video of Sawner’s statement, and the preceding debate between Mayor Robin Gardner and Planning Commission Chairman John Lawrence over whether to let Sawner speak, is available here.)

Young’s pledge to develop a plan jointly with The Wilden partners presumably would remove this barrier.    According to Mester’s memo, Young would develop a “by-right” commercial building with structured parking.  No diagrams or drawings of the joint site plan are publicly available at this time.

Partners in The Wilden are the Falls Church Housing Corporation (“FCHC”) and Boston-based The Community Builders.  The project, previously known as City Center South Senior Apartments, was renamed after long-time City resident Bob Wilden, who died last year.

Because of the possible ownership change at 360 South Washington Street, The Wilden partners have asked the City Council and Planning Commission to postpone further consideration of the project until mid-March.  In a Jan. 28 memorandum to City officials, Falls Church Housing Corporation executive director Carol Jackson notes on the basis of “some early draft concept work” with Young, The Wilden partners “are requesting a short delay in the timeline currently in place to ensure that we deliver critical outcomes” outlined by the City.

Currently, the City Council has scheduled a Feb. 22 vote on “second reading” of a Special Exception ordinance to allow The Wilden to proceed, but Jackson asked that the vote be moved to Mar. 22.  Similarly Jackson requested the city Planning Commission to defer until Mar. 15 two meetings on the project, now planned for Feb. 1 and 16.

The Wilden represents Falls Church Housing Corporation’s third attempt in recent years to construct an affordable housing project in the City.  Previous efforts focused on a location at the west end of the City and a second off North Washington Street near the State Theater.  The planned “City Center” project provided momentum for a third effort aimed at consolidating 350, 360 and 370 South Washington Street.  To support that 174-unit effort, the City Council approved a $2 million interest-free loan to FCHC as a “purchase option” on Sawner’s property.  Other financing for the project failed, however, and as a result FCHC never exercised the purchase option, resulting in Sawner’s requirement to repay $1.9 million to the City and FCHC’s requirement to repay the remaining $100,000.

Last summer, the State of Virginia granted FCHC federal low-income housing tax credits for the current 66-unit project, now known as The Wilden.  Whereas the earlier project would have housed both senior citizens and families, The Wilden is intended only for seniors.  FCHC is again requesting a $2 million City loan to support the project, although it is significantly smaller than the previous iteration.

City officials have been actively attempting to resolve the impasse with Sawner for weeks.  Earlier this month,  City Council members and other officials met with Sawner in an early morning session following the Council’s preliminary approval of The Wilden, but walked away with no resolution at that time.  Young’s involvement offers a potential roadmap to construction.  The path may not be easy, however, because as Jackson states in her memo, postponing City Council and Planning Commission consideration is “potentially risking the VHDA imposed June 30 construction start deadline which continues to be the end date driving The Wilden’s pre-construction deadline.”

The Wilden’s full timeline is available in Jackson’s memo.   Detailed information on the project is provided in a lengthy City staff background memo.

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