THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Wednesday, October 16, 1996 TAG: 9610160394
SECTION: LOCAL PAGE: B1 EDITION: FINAL
SOURCE: BY PAUL CLANCY, staff writer
DATELINE: VIRGINIA BEACH LENGTH: 81 lines
The developer of Sunstates House, the senior citizens' complex that was torched by an arsonist in August, offered Tuesday to make a number of concessions to both City Council and residents of the Shore Drive area, where the charred buildings are now being demolished.
Dr. Richard B. Barrick, managing partner of Sunstates House Inc., said the company will submit plans for rebuilding that are more ``aesthetically pleasing'' to the city Planning Commission and City Council.
And, if his company can get favorable tax credits from the state - a key to the project's financing - all of the complex's units will be offered to low- and moderate-income residents.
This was a key concern of City Council members who threatened to block reconstruction of Sunstates House without the 100 percent guarantee.
The developing partners will seek 9 percent tax credits from the Virginia Housing Development Authority early next year. That would allow the developers to borrow less and keep their mortgage payments low enough to offer all of the more than 100 units at lower rents.
``Financially, there's no way you can build and rent to low- and moderate-income people without it,'' said Barrick, a retired Portsmouth dentist. ``You can't build and be a half-million dollars in the hole.''
Sunstates House, on Shore Drive near Great Neck Road, suffered about $3.5 million in damage when an Aug. 6 fire destroyed about two-thirds of the complex. Investigators called it arson.
Tuesday, wreckers from Creech Construction Corp., which built the project, continued to tear it down. A crane with a heavy clamshell scoop battered and chomped at the charred wooden structures.
``We're trying to get it cleaned up and make it safe,'' said Shawn Smith, Creech's project manager.
Beyond the demolition, there are no immediate plans for rebuilding until financing can be arranged, and possibly until a key misunderstanding is cleared up.
Barrick and his development manager, Lou Joyner, stressed that they are not required to make the concessions, but they would rather complete the project with the city's approval than without it.
``We don't have to,'' Joyner said. ``We would like to do it, for the city, for ourselves and for the community.''
Barrick added, ``Legally, we've been told we can rebuild it exactly like it was.''
The offer to provide 100 percent low- and moderate-income units was met with cautious enthusiasm by the city.
``That would be wonderful,'' said Assistant City Attorney Gary Fentress.
But he repeated the city's contention that the developer agreed to 100 percent in the first place. That's the sticking point.
``We never promised that,'' Joyner said.
``Somebody should have stood up and said, `Let's be very specific here,' but no one did,'' she said. ``They shouldn't have assumed we meant all of those units.
``It's not a choice. It's what we can finance and how we can finance it that determines what the rental rates will be.''
Joyner explained that under federal guidelines, only 20 percent of the units must be offered at below-market rent. But the developers intended to set aside 40 percent or more of the units - even though they didn't get the 9 percent tax credits.
The tax credits originally had been granted but were withdrawn because of construction delays. The developers reapplied earlier this year but were turned down on a technicality.
Barrick said his company plans to reapply for the tax credits early next year.
In late August, City Council passed a resolution warning that the developers would lose their zoning permit unless all 109 units were rented at below-market prices.
Representatives of three local civic leagues - Cape Henry Shores, Cape Henry by the Sea and Lynnhaven Colony - supported the council's action, saying the project looked more like ``a warehouse'' than a home for seniors.
Barrick said the new plans would have fewer units, and added, ``We're trying to make it aesthetically pleasing, so hopefully we can make everybody happy.'' ILLUSTRATION: STEVE EARLEY photo/The Virginian-Pilot
Debris is being cleared from the Sunstates House site on Shore Drive
as preparations begin to rebuild after an August fire. The developer
has offered lower rents and a new design this time.
KEYWORDS: SENIOR CITIZEN HOUSING RETIREMENT CENTER FIRE by CNB