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Council eyes final steps in support of major public housing redevelopment

Charlottesville City Council is ready to take the final steps to support massive redevelopments of the city’s public housing stock.

The council will consider two grants and a performance agreement for the Piedmont Housing Alliance and the Charlottesville Redevelopment and Housing Authority during its meeting Monday.

The council will review two ordinances for CRHA — one for Crescent Halls and one for the first phase of redevelopment on South First Street.

The ordinances deal with previous council allocations of about $1.2 million for South First Street and $1.9 million toward Crescent Halls.

The council has to approve the money again because it is being provided to a Community Development Corporation created by CRHA for the projects, requiring a different type of bond issuance. CRHA is transferring the money to the corporation on a 30-year term at no interest.

The two projects are the first of CRHA’s three-phase redevelopment project.

The combined projects come with an expected construction cost of about $26.94 million, with a total development cost of about $34 million. Work at Crescent Halls would cost $15.39 million and South First Street would be $11.55 million.

Crescent Halls will be modernized with improved access for residents, who are primarily seniors and people with disabilities. The renovated building will have 98 one-bedroom and seven two-bedroom apartments.

Crescent Halls work will start in conjunction with the first phase of work on South First Street, where 58 existing units will be redeveloped and 142 units will be added, at a total estimated cost of about $38 million.

Future phases of redevelopment include projects on Sixth Street, modernizing public housing on Madison and Riverside avenues and Michie Drive and redeveloping Westhaven.

Construction on phase one is expected to start this fall or winter, pending approval from the U.S. Department of Housing and Urban Development.

The council also will conduct a first reading of a forgivable loan to the Piedmont Housing Alliance for the first phase of its redevelopment of Friendship Court.

Phase one includes 106 units on about four acres of the property off Monticello Avenue. It includes units designated for those making an income ranging from 80% of area median income to less than 30%.

Construction would take place on undeveloped land along Sixth Street Southeast and includes 35 multi-family homes and a 71-unit apartment complex. Of those units, 46 will be used by current residents who will be moved from the next area of development.

The first phase of the four-part redevelopment is estimated to cost $30 million.

The council approved about $5.6 million for the project in its fiscal 2020 budget.

The loan would be for 40 years and would be forgivable if all units remain affordable in that timeframe. The units are required to have a 99-year affordability period to be enforced through the state. If the units do not remain affordable after 40 years, the city can file a court injunction to maintain their affordability.

The council also will consider a revenue-sharing agreement with the Piedmont Housing Alliance to generate the money necessary to start the project.

The agreement only applies to phase one of the project.

The agreement would require the city to contribute real estate tax revenues above the current tax bill to PHA as a grant. PHA will then use the grant to leverage other loans.

The agreement does not ask for new current revenue, only the future revenue coming with the increased tax base.

The property was valued at $8.2 million in 2020, translating to $77,714 in annual real estate taxes. Once the project is under way, the value will increase and the city will contribute the difference in the tax bills to PHA.

City documents say phase one is expected to come with a value of $20 million, translating to an additional $190,000 in tax revenue.

The grant payments would begin 15 months after the annual assessment once at least half of the units have received a certificate of occupancy.

Under the agreement, the funds would be transferred after performance criteria are met and would repeat annually until reaching a maximum of $6 million.

The agreement requires PHA to construct all 106 units. PHA must make all reasonable efforts to complete construction by June 1, 2022.

PHA plans to start construction on phase one in the spring and city documents indicate the agreement is a “critical piece” to securing the remaining financing.

Because the council cannot legally appropriate future funds, the agreement is nonbinding and only shows the city’s intent to follow the requirements.

In other housing-related business, the council will consider approving a recovery agreement between the city, CRHA and HUD.

HUD has given CRHA the status of a “troubled” agency, a title for housing authorities that are underperforming in several metrics.

The agreement requires CRHA to address concerns, provide an implementation strategy and develop a sustainability plan.

The agreement essentially charges the city with overseeing CRHA’s progress toward improving its performance. The city would not not have any financial obligations from the agreement.

The City Council meets virtually at 6:30 p.m. Monday. To register to participate, visit


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