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Council unenthusiastically approves permit for high-rise on Artful Lodger site

Charlottesville City Council has unenthusiastically approved a special-use permit for a high-rise building on the Downtown Mall.

The council voted 4-1 to approve the permit for Heirloom Development during its virtual meeting Tuesday. Mayor Nikuyah Walker cast the dissenting vote.

Heirloom sought the permit to construct a 101-foot-tall, mixed-use building. The council deferred action on the permit when it was considered in December over concerns for the character of the mall and affordability.

The permit is required to increase the height and density allowed for the project from 70 feet and 24 units to 101 feet and 134 units.

The proposed structure will sit on Market Street on the current site of The Artful Lodger, The Livery and other small businesses. If a building permit is approved, the existing buildings will be demolished.

Heirloom and developer Jeff Levien are also behind two complexes on West Main Street. Unit prices in that development range from $1,290 for a studio apartment to $4,300 for a three-bedroom unit.

Levien said he could put a drive-thru pharmacy on the site and likely receive a better return on investment, but he felt increasing the city’s housing stock was the right move.

“If I just built a CVS or these condos, I could probably yield better,” he said. “And I’d like to say unselfishly it’s all social, and part of it is, but part of it is, like I say, this passion of the urban landscape and using the land for its best purpose.”

The revised permit proposal included three new conditions since it initially was presented.

The first creates setbacks from adjacent streets on the upper levels of the building.

The second condition promises eight affordable units either on site or off, with Levien indicating they likely would not be in the building.

Four units would be for those making 80% of the area median income. Two would be for those at 60% and two would be at 50%. Six of the units would be affordable for eight years and two would be affordable for 16 years.

According to the Virginia Housing Development Authority, a person earning 80% of area median income would be making $52,600. At 60%, the income is $39,480 and 50% is $32,900.

For a family of four, the income is $75,100 at 80%, 56,340 at 60% and $46,950 at 50%.

“This one project’s not going to solve every problem for the city, but it’s a start,” Levien said.

Levien will be unable to receive a certificate of occupancy before the affordable units are constructed.

The final condition on the permit provides rental benefits for a proposed community space. The space would be available to a nonprofit “whose primary mission is to further financial literacy, job creation, or business growth for the Black community of Charlottesville,” a staff report says.

The space would be at least 700 square feet and come with a base rent rate at 50% of the market rate for at least five years.

Levien said he could have instead contributed to the Affordable Housing Fund, but wanted to construct units to ensure they were built. He said his contribution to the housing fund would have been $300,000, but constructing units was an investment of $550,000. On top of that, the investment in the community space was another $275,000.

Walker said the duration of affordability was insufficient.

“It’s good that you’ve added the extra units, but by the time the family got settled in the unit, that would be potentially expiring,” she said.

Levien noted that “there’s no limit to how many people you can help” through the nonprofit space, but constructing more affordable housing on the site presents financial hurdles.

“There’s only so much one project can take on without another subsidy,” he said.

Levien said it would probably be about three and a half years before the project was completed.

Councilor Lloyd Snook commended Levien for taking on extra costs to add affordable housing and provide the community space.

“If he’s accomplished the architectural problem and he’s making really extraordinary efforts and financial costs on what I’ll term the social problem of the SUP, I would like to encourage that,” he said. “I’d like to see if he can make it work, and if he can make it work, it’ll be a lesson to us and other developers. … I just think this proposal is substantially better than the proposal that was brought up in December.”

Councilor Michael Payne said the project was a better development than what would be allowed by-right. He added that he has “no illusions” about its effect on affordable housing.

“Capitalism and the free market without subsidy and partnerships are not going to build deeply affordable units,” he said. “It seems to me that it’s just better than the by-right development even though it’s not going to get us anywhere close to where we need to be in terms of affordability. And I don’t think we can kid ourselves that this project is going to make a huge dent in the affordable housing crisis.”


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