Midway Manor is one step closer to undergoing an extensive renovation that could drastically improve living conditions for its residents, all of whom are seniors and folks with disabilities living on limited income.
During a public hearing Monday night, the Charlottesville Redevelopment and Housing Authority Board of Commissioners unanimously voted for CRHA to issue up to $23 million in revenue bonds to the new owner, who has pledged to maintain the long-term affordability of the building’s 98 units.
The new owner, Standard Communities, plans to use the funds for a “pretty expansive” renovation, its director, Steven Kahn, said during the hearing. The company is planning on renovating each individual apartment and repair or replace building’s roof, windows, the plumbing and electricity systems, the long-malfunctioning elevators, and more.
“It’s not just putting some lipstick or cosmetic touches on the building, but also ensuring that it’s well-served for decades to come and able to continue fulfilling its mission of providing housing, high-quality housing,” said Kahn.
Though CRHA will issue the bonds, it will do so at no cost to the city or the housing authority.
The housing authority will serve as “a conduit bond issuer,” which means that the housing authority will issue the bonds, but it will have no ownership interest in the Midway Manor property, nor will it have control over management or any other project operations, CRHA legal counsel Delphine Carnes said during the hearing. What’s more, she said, neither the city nor CRHA will be liable for repayment of the bonds.
A revenue bond is a form of municipal finance, similar to a loan that government agencies can give to businesses for public goods. They raise the money by selling bonds to investors. Standard Communities will repay the investors with interest.
The housing authority stands to make a bit of money from administrative fees — about $29,000 over the lifetime of the loan, which could be years if not decades, said CRHA executive director John Sales.
“It’s not a lot of money at all, but it’s unrestricted money, so it allows us to invest in resident services, where currently we cannot do that with a lot of the federal money,” Sales says. The housing authority plans to put that money toward job training programs, “and just addressing [CRHA residents’] needs. That’s our goal,” said Sales.
The housing authority’s participation in this program will also have no negative effect on CRHA’s current projects, “none at all,” said Sales. It will bring nothing to bear on the ongoing redevelopment of CRHA’s public housing communities throughout the city, including Crescent Halls, Sixth Street, and Westhaven.
While the revenue bonds will be the major source of Standard Communities’ funding for the project, they’re also applying for an allocation from the Low Income Housing Tax Credit (LIHTC) program through Virginia Housing (a not-for-profit state housing organization), which would also help finance the project.
The LIHTC agreement, in combination with a new Housing Assistance Payment contract (i.e., Section 8 contract) with the U.S. Office of Housing and Urban Development — which the new owners are also applying for — will help ensure the affordability of Midway Manor’s 98 units for 20 years, the longest HUD will allow.
Sales told Charlottesville Tomorrow that he thinks “the developer is doing the right thing” by requesting the revenue bonds and applying for the LIHTC tax deal.
During Monday’s meeting, community members and CRHA commissioners expressed concern over what would happen to the affordability of those units after that 20-year period ends. Kahn said that the company would, at that point, plan on applying to renew the HAP (Section 8) contract with HUD. “So long as we are involved with the property, I don’t see this being an issue,” Kahn said, adding that he and his associates are “not in the business of turning things to market rate” housing.
City Councilor Michael Payne, who sits on the CRHA Board of Commissioners and voted to issue the bonds on Monday, told Charlottesville Tomorrow that as a whole, the project “certainly could be a positive thing, unless there’s something that’s not apparent, or [has] been missed.” Making sure that the building, which opened in 1980 and has since housed seniors and people with disabilities of what HUD defines as very low- and extremely-low income, remains affordable is crucial, Payne said.
Next, because the city formed the housing authority, the resolution goes to City Council for approval. It will be returned to the CRHA board of commissioners for final approval.
Kahn expects the renovations to begin this coming summer. The redevelopment and construction team is aiming to keep all residents in the building throughout the renovation process, if possible. That would hopefully mitigate any disruptions to residents’ routines and support systems, Kahn said.
If renovation work indeed begins over the summer, Midway Manor would be fully rehabilitated by the end of 2023.
Sales is hopeful about this opportunity to help longtime city residents, many of whom expressed concerns in recent years over the deteriorating conditions of the building.
“The current owners of the project, based upon the portfolio that they provided to me, they had the experience and knowledge needed to do right by the residents, and they have the assets needed to do right by the residents,” Sales told Charlottesville Tomorrow.
“Based upon what I’ve seen, I think their intentions are in the right place, and the housing authority took the first step [Monday] night toward assisting the developer and owner to do the right thing by the residents.”