The Council is set to consider on Tuesday, May 12 whether to loan ARHA an additional $1.44 million for the redevelopment of Glebe Park. As the Growler noted earlier, the money is required to get developer EYA started. Apparently their sources of construction money have dried up and while the City did press them to go back to the well again, EYA was only able to scratch up $800,000 of the total $2.3 million required. So now Alexandria must make up the difference.
One encouraging note: of the $5.6 million loaned to ARHA in 2007 to pay off the Glebe Park mortgage, $600,000 has already been repaid. But the repayment comes from escrow reserves released by HUD, which sounds like a one-shot deal.
What's interesting about the staff memo is that apparently the City knew the Glebe Park financing was in trouble back in March. The Affordable Housing Advisory Committee voted to support the loan (although a quorum wasn't present) on April 2. Interesting that the Council's deliberations on loan application were put off until after the election.
The project financials are also plagued by the decline in land values, which means ARHA will gain less from the sale of the handful of market rate units that will be built at Glebe Park. Now it appears the City is expecting more of the repayment to rely on Bland sales.
But does anyone believe this is the last time the City will be called on to lend money before this project is completed? What if housing remains soft and Bland market rate unit sales can't deliver the payback?
Questions to ponder ...