Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: TUESDAY, January 4, 1994 TAG: 9401040285
SECTION: VIRGINIA PAGE: C4 EDITION: METRO
SOURCE: JOEL TURNER STAFF WRITER
DATELINE: LENGTH: Long
Council on Monday vetoed a financing plan to allow Countryside Estates apartments to be sold and renovated for low-income residents.
In rejecting a proposal by private developers to buy the apartments at the Countryside Golf Course, council members cited their recent concerns about the concentration of low-income housing in the city.
"We have to draw the line in the sand at some point," Councilman James Harvey said. "This may be it."
Councilman Delvis "Mac" McCadden dissented, saying he thought the city had waited too late to voice its objection.
Harvey said council members have nothing against Castle Development Corp., a Richmond real estate development company which has a contract to buy Countryside Estates.
City Manager Bob Herbert, who recommended interim disapproval of the project, said the developers have a good track record, but council has made its position clear on low-income housing.
Harvey said he hopes the developers can find private financing for the 108-unit project, so they won't have to convert it into a complex for low-income residents.
But the developers said the proposed financing plan by the Virginia Housing Development Authority provides the best opportunity for renovating the apartments.
The housing authority would provide a $3.2 million mortgage to cover 85 percent of the cost. The developers would use federal low-income housing tax credits for the remaining 15 percent.
As a condition of the state loan, 40 percent of the units would have to reserved for low-income tenants. Because of the federal tax credits, however, the developers would have to reserve all units for low-income residents. The federal restrictions prevail, because they are more restrictive.
Charles Wilson, a mortgage banker who is working with the Richmond developers, said the apartments are deteriorating and slowly becoming vacant.
Wilson said the owners have filed for bankruptcy protection. The occupancy rate has dropped to 70 percent, and "it will continue to spiral downward," he said.
If the Richmond developers can acquire the apartments, Wilson said, they will spend about $1 million to renovate them.
Under the terms of the proposed financing plan, tenants' income can be no more than 60 percent of the median income for families in the city. For a family of five, this would be no more than $25,320.
Wilson said low-income housing is a misnomer for the apartments, because the rents would be $385 to $440 a month. Despite the restrictions on income levels, he said, it is wrong to classify anyone with a salary of $25,000 as low-income.
Herbert said he is concerned that 24 current tenants in the apartment complex would be forced to move out because their incomes are too high.
"We don't oppose what you are doing, but we need more time to negotiate an arrangement that would be acceptable," Councilman John Edwards said.
"We are sympathetic to what you are doing, and that you are rehabbing the units."
Herbert said he needed more time for further analysis of the options and implications of the redevelopment's not occurring as proposed. He said the state's requirement that 40 percent of the tenants be low-income seemed to be a reasonable economic mix.
"Don't do anything to force us backward - to force some middle-income people to move out," Herbert said.
The developers could seek more federal tax credits to replace the state financing, but they said that would provide less money to renovate the apartments.
If the developers proceed solely with federal tax credits, they will not need council's approval.
\ ROANOKE CITY COUNCIL\ IN OTHER ACTION
Intent to lobby: Council signaled its intent to lobby for transcontinental Interstate 66 to pass through the Roanoke Valley. The proposed highway would extend from Tidewater Virginia to California. A national lobbying office for the I-66 project has been opened in Kansas. Council asked City Manager Bob Herbert to make contact with the national office and City Attorney Wilburn Dibling to prepare the necessary documents for the city to endorse the project.
Explore says thanks: Rupert Cutler, director of Explore Park, said he appreciates Mayor David Bowers' suggestion that the city should address its relationship with Explore. Cutler said some of Bowers' proposals such as a liaison to the Virginia Recreational Facilities Authority and loan of a city planner to Explore can be handled quickly. Explore supports more tourist information signs on the Blue Ridge Parkway, he said, and it would welcome a financial contribution, perhaps $25,000, in the current fiscal year. Cutler also wants the city to send letters of support for Explore Park's request for state funding. Cutler's remarks and request were referred to City Manager Bob Herbert.
More funds for schools: Council and School Board members told the city's representatives in the state legislature that Roanoke and other central cities in Virginia are being slighted in state school funds, just as rural counties are. Del. Vic Thomas, D-Roanoke, agreed that cities are hurt by the disparity in school funds. Thomas said he expects the legislature to deal with the disparity issue, but that it won't be completely resolved.
State Sen. Malfourd "Bo" Trumbo, R-Fincastle, who also attended the meeting, said equity in school funding "is not going to happen" in the legislature's upcoming session.
With an eye on industry: Asked the city's representatives in the legislature to permit localities to provide tax incentives and other concessions to attract businesses and industries. Councilman James Harvey said many nearby states authorize localities to negotiate tax concessions, but Virginia bars it. "We need a local option so we can negotiate with prospects," Harvey said. Del. Vic Thomas, D-Roanoke, said he understands the request, but he doesn't think the state and localities should get involved in a bidding war with other states and "give away everything except the kitchen sink" to attract new industries.
by CNB