A plan by local nonprofits to transform an old motel into 140 apartments for some of the area’s poorest people has been delayed by at least a year.

The problem is the groups are short $3.6 million.

About two years ago, in late 2020, five area nonprofit organizations embarked on this project, called Premier Circle.

With the help of a $4.25 million recoverable grant (which is a grant that is repaid) from the Charlottesville Area Community Foundation, the local housing nonprofit Piedmont Housing Alliance purchased the run-down Red Carpet Inn for $4.3 million.

As each phase of the project is completed, a portion of the funds will be returned to CACF to pay back the grant.

The plan was to first run a temporary emergency shelter on the site for people who are elderly or have serious medical conditions, which would close when construction on 140 apartments began. 

The first phase of the plan went well — even better than the partners could have hoped. Many of the guests who came through the shelter are now housed.

But the second phase, which is for Virginia Supportive Housing to build 80 units, will get a late start. That pushes the third phase, Piedmont Housing Alliance’s 60 units, back as well. It’s also created a question mark for the fourth phase, a non-residential building that the groups would then sell to earn the money to repay the grant.

Virginia Supportive Housing was due to begin construction on 80 units of supportive housing this spring. But a pre-construction estimate from Charlottesville-based contractor Martin Horn Inc. came in at $24 million —  $3.6 million over budget — in part because of extraordinary increases in construction and materials costs since the project was first planned two years ago. 

It will take VSH about a year to fundraise that amount, said Julie Anderson, the organization’s director of real estate development.

In May 2021, after some renovations, People And Congregations Engaged in Ministry (PACEM) opened a shelter for seniors and people with serious medical conditions who were also experiencing homelessness — people who were especially vulnerable to COVID-19 — in May 2021. 

In the two years since, the shelter has served more than 170 people (up to 100 at a time), providing not just a private room and a warm bed, but meals, clean laundry, case management and, in partnership with UVA Hospital, medical care.

PACEM stopped taking new guests at the shelter last fall, knowing that it would close in the spring. That way, shelter staff could prioritize helping existing guests obtain housing before the shelter closed. 

So far, most guests have moved into permanent housing. But about 40 remain as of this week, said PACEM Executive Director Jayson Whitehead, and some of them are waiting for their leases to start so that they can move out of the shelter and into their own apartments. By the time April rolls around, there will be about 25 folks left at the shelter, mostly people who face the most tremendous barriers to housing, such as criminal charges, poor or nonexistent credit history, or no recent rental history. It’s difficult to find a landlord who will rent to someone with one of these issues, said Whitehead. And some of the residents there have a combination of them.

The shelter was going to close in April, but now it will close in June. “We’re really hoping that the extra 60 days just helps everybody find a place,” said Whitehead.

But it’s possible that not everyone will.

Two people stand in front of a hotel room door. One sits in a camp chair, wearing a hat, a puffy jacket, and a pair of sunglasses. The other stands next to him, wearing an animal-print cardigan with large buttons, long pants, and a butterfly earring in his left ear. Both are smiling.
Sunshades and Courtney are two of the more than 170 people who’ve stayed at the Premier Circle shelter since May 2021. Ézé Amos/Charlottesville Tomorrow

Some of them might be able to find continuing shelter at the Salvation Army, but that’s not a solution for all guests, particularly those with disabilities or health conditions, said Anthony Haro, executive director of the Blue Ridge Area Coalition for the Homeless (BRACH), another partner in the project. The Salvation Army is also a little stricter than PACEM about alcohol and drug use.

There’s a strong possibility they’ll be able to shelter a few folks in hotel rooms, too, said Haro. “We’ll consider that when we get there. It’s quite a fluid process right now.”

Some of the shelter guests might be able to get a spot in one of the apartments that will be built at the site. But that’s if they qualify, and that’s still years away.

The permanent supportive housing planned for Premier Circle is mainly for single adults living independently. Residents sign leases and stay as long as they need to, either until they move out into the broader community or into an assisted living facility. While there, residents have access to on-site case management services such as mental health and substance abuse counseling or vocational and employment support. The Crossings, located near downtown Charlottesville, is one example of this type of housing.

If construction indeed begins in spring 2024 and stays on schedule, the units will be leased starting in summer 2025 and ready for move-in that fall. 

Because the site “is not large,” Piedmont Housing Alliance can’t start work on its 60 apartments, until VSH’s units are done, said Sunshine Mathon, PHA’s executive director. PHA will watch VSH’s timeline closely, said Mathon, because it will affect when PHA can apply for the IRS’s Low Income Housing Tax Credit program to help fund its portion of the project. Those units will be income-restricted, intended for people with Section-8 housing choice vouchers and other low-income individuals and families. They’re different from the supportive housing units VSH will build.

It will be at least two years before PHA can get started on its portion of Premier Circle.

After June, the site will remain empty until it is demolished to make way for the VSH construction, even though there’s still demand for emergency shelter.

Continuing the PACEM shelter on the site wasn’t feasible because it’s falling apart, said Whitehead and Haro. 

The hotel buildings were in rough shape when PHA bought the building — some rooms were so overcome by mold it wasn’t safe for anyone to be in the rooms next door — and the project partners did some renovations on the better rooms to make them safe and habitable for guests. But it’s been two years of wear and tear, “and the life of those renovations is coming to an end,” said Haro. 

“For us to stay on the site significantly longer would require another investment into a site which is temporary still,” not to mention operational costs that there’s no money for, said Haro. “A big part of what’s made this program possible, in addition to community support for renovations, is operational funding from COVID relief monies, which have ended.”

If it seems messy, that’s because it is. “Developing this type of housing is never simple and straightforward,” said Anderson. They’ve worked through delays before and they’ll do it again. “We will get this project finished. These units are needed. They always have been. They’re just needed more now.”


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