F.C. Senior Housing Plan Still Skating on Thin Ice

The Falls Church City Council gave unanimous approval Monday to a complicated plan of action designed to permit the Falls Church Housing Corporation to meet its March 11 deadline to apply for federal tax credits toward construction of a senior affordable housing building on West Broad St.

But word late yesterday indicated the Council's efforts may still have fallen short, based on disputed reports of what the Virginia Housing Development Authority requires in an application. "It's too soon to break out the champagne. There are still a lot of loose ends out there," the Falls Church Housing Corporation's Carol Jackson cautioned. She also lamented the sudden revelation Monday that the Council could not approve a land lease for the project without a more arduous, time consuming process.

Monday the Council thought it had cast the votes needed to mark a critical victory in the Housing Corporation's struggles since last summer to gain approval for a mixed-use project that is now designed to provide something under 50 affordable housing units.

In the process, it and City Attorney Roy Thorpe dodged a last-minute bullet that could have caused the FCHC to miss the application deadline, which would have killed the project.

City Attorney Roy Thorpe told the Council Monday that a new development came to light earlier in the day. Namely, insofar as the plan involves the City's purchase of the land in question, currently owned by the Falls Church Volunteer Firefighters, and the leasing of half of it back to the Housing Corporation, the law requires that the prospective lease of City-owned land must go out to bid before any commitment to a lease can be made.

In fact, it was when a citizen residing adjacent the tract who helped spearhead neighborhood efforts to downsize the proposed project submitted a last-minute bid to lease the property, that the specific requirements of the law were determined. It also came to light at Monday's meeting that two other citizens were also interested in bidding.

Only quick action by Thorpe prevented these developments from immediately torpedoing the Housing Corporation's aspirations by requiring a delay beyond March 11.

He separated out an ordinance on prospective leasing of the land for consideration under the law with a receipt of bids and a public hearing, reminding the Council that it was not bound by any particular criteria concerning which bid it would accept. "You simply have to state what the City's interest is in accepting the bid you chose," he said.

This ordinance will be passed with two readings beginning later this month.

But it remains to be seen if applying for the tax credits on March 11 without a secure access to the land will work, Jackson said. In addition, she said last minute language stipulating that the City's annual subsidy to the Housing Corporation will be "subject to annual appropriation" has weakened and maybe doomed the application, she said, based on her telephone conversations with top level figures at the VHDA yesterday. Even though everyone knows that all government contracts are subject to annual appropriations, making the language explicit in the Council resolution undermined a sense of certitude required by lenders, she was told.

Jackson stressed to the Council Monday that there is a very specific set of criteria that the Virginia Housing Development Authority, which rules on federal tax credit applications, uses to score and approve proposals. Come up short on any of them, she cautioned, and you might as well not even apply.

The complicated plan the Council OK'd Monday involves not only the City's purchase of the land and lease back to the Housing Authority for a dollar a year, but the donation of a 1995 fire truck to the Volunteer Firefighters and a subsidy to the FCHC of $50,000 per year to cover the construction cost, with a three percent inflation factor added annually, compounded over 30 years.

The Council's commitment to provide this sum, which adds up to $2.3 million over 30 years, is needed to cover 20% of the total debt incurred to cover the construction cost. The remainder will come from the rents of the units once the project is completed.

This annual sum will be above and beyond the $50,000 per year that the City has been providing the Housing Corporation, which will be used to cover operating expenses at the new facility.

"This involves a commitment by the City to stand by and work with the Housing Corporation for 30 years," Thorpe said.

While the original plan presented to the Council by the Housing Corporation last July called for a project large enough to generate income that would have covered all the costs without City support, relentless pressure from neighbors to the site caused the Council to demand the Housing Corporation downsize the project. As a result, instead of a self-sufficient project with 70 units, the project was shrunk to a 48-unit project requiring a considerable annual subsidy from the City over 30 years.

The land preserved by the downsizing will be added to the adjacent West End Park to expand the City's inventory of open space.