Novel Tool Aimed At Easing Access To Financing
For the first time in the history of Falls Church, a novel and effective economic development tool known as a “Capital Development Authority” is being proposed to help “fast track” a non-profit commercial office building known as The McKeever Building on S. Washington St. The ultimate success of the newly-approved Wilden Senior Affordable Housing Apartments is tied to it.
If the Falls Church City Council approves the establishment of this Capital Development Authority (known as a CDA) this summer, not only will the developers of that building have a better shot at securing the financing to launch its construction, but it will pave the way for the creation of other CDAs around the City. In particular, the same means could be replicated to expedite the construction of a large public parking garage on City-owned land next to the State Theatre.
CDAs have been authorized by the Virginia law for 50 years and have been used, sometimes very effectively, in other parts of the state. However, the one now under consideration in Falls Church, known as the “360 CDA” will be The Little City’s first. In short, CDAs can help immensely in securing low-cost financing for development projects.
Developer Bob Young and the Jefferson Investment Group acquired recently the old 360 S. Washington Street building, located adjacent the 350 S. Washington Building where the Wilden project will go.
Young’s willingness to provide parking at his building for use by Wilden residents was key to the Wilden winning final approval from the Falls Church City Council this spring, and Young has begun the paperwork to turn his project into a non-profit. He will not make a dime on it, according to sources.
But while he has been working aggressively to line up “letters of intent” from prospective buyers of office condos in the building, it is not clear he can nail enough of them down in time to obtain the financing for the building by July 31.
July 31 is the drop-dead deadline for the Falls Church Housing Corporation and its partners to have everything in order to file for the Virginia Housing Development Authority credits to move ahead with the Wilden project.
Part of that package must include evidence of secured financing for The McKeever, because of The McKeever’s required Wilden parking component.
So, Young has initiated the formation of the “360 CDA” in hopes that, with the blessings of the City Council, access to financing instruments that the Virginia Municipal League uses will become available for a “fast track” financing approval.
Young and others involved in forming the CDA have been in conversations at City Hall for over a month. “There are no secrets about this,” a source told the News-Press, as personnel from the City Manager’s office and the Economic Development Office has been in extensive discussions about it.
Young hopes that with the establishment of the “360 CDA,” not only can The McKeever provide parking for The Wilden, but also a parking deck in connection with the multi-modal transit center that the City Council determined to be located across the street from The McKeever with $2 million in federal funds. Both uses would be considered for “public purposes.”
The first formal meeting with the Economic Development Committee of the City Council is slated for next week, and a legal notice submitted by the City of Falls Church is published in this edition of the News-Press announcing a public hearing for late June on a Council resolution to form the “360 CDA.”
There need to be three public notices prior to a hearing on the matter, according to Virginia law, and the Council must then vote to establish the CDA and appoint a five-member board of directors. The CDA entity exists only for as long as it takes to complete its mission, which in the case of the “360 CDA” it to secure the funding in a timely manner for The McKeever.
CDAs can be formed by any petition to the City Council of at least 51 percent of the land owners in any given area. They normally are initiated by land owners seeking improvements or redevelopment in their area, and with a local government blessing, can win financing that may not otherwise be available.
Some are hoping that success with the trailblazing “360 CDA” will lead to many more creative uses of the same tool to kick-start a revival of development in the commercially-zoned corridors of the City, including the public parking garage next to the State Theatre, behind the Argia’s and Beach Shack restaurants.
There are clues that a recovery of commercial real estate values is underway in the region, which could contribute, along with the use of CDAs, to a significant loosening of the credit flows from lending institutions to help buoy the City’s commercial sector, taking pressure off of homeowners to provide the bulk of the resources to maintain the City’s school system and core services.