Plans for the redevelopment of the Ladrey Senior Hi-Rise in Old Town have been declared “infeasible” by the Alexandria Redevelopment and Housing Authority (ARHA).
This decision comes after the U.S. Department of Housing and Urban Development (HUD) terminated operating support for building management and maintenance due to delays in proposed redevelopment plans.
As a result, ARHA is preparing to relocate over 150 residents from the 1970s-era building by the end of the year.
To facilitate this process, ARHA has requested the city to back loans that would enable the acquisition of The Alate, a newly constructed senior housing apartment building located at 1122 First Street in the Braddock neighborhood.
In a memo from city staff, it was noted that the developer of The Alate has expressed a desire to exit the project and has agreed to its sale for $56.8 million, despite the property being assessed at $53.1 million earlier this year.
The City Council is slated to review this proposal at its upcoming meeting on Tuesday, June 10.
ARHA has determined that its original redevelopment plan for the Ladrey Senior Housing, which involved a partnership with a development firm, is no longer feasible due to a shift in the debt and equity markets.
As a result of these unforeseen challenges, HUD now requires that ARHA relocate the residents of Ladrey, having also provided 168 vouchers to assist in this move.
ARHA’s relocation plan will not only involve moving residents to Silver Fox but also ensuring that others are placed in housing of their choice either within the city limits or beyond.
The relocation efforts are anticipated to be completed by the end of 2025.
Looking forward, ARHA is in discussions with Winn, its development partner, aimed at significantly renovating the existing building to become part of ARHA’s future stock of senior housing.
However, any renovation plan must receive review and approval from HUD, and it remains undetermined if such renovations will need further City approvals aside from regular permits.
The City Council had previously approved the demolition of the existing 11-story, 170-unit affordable apartment building at 300 Wythe Street, which houses seniors and residents with disabilities.
In its place, an L-shaped development was proposed featuring 270 units, with the new structure comprising six to seven stories.
Former Mayor Justin Wilson has emphasized the importance of this project for the city’s vulnerable populations, stating his excitement over the positive impact it could have on the community.
City staff have expressed concerns regarding ARHA’s capacity to execute and maintain this project effectively.
They have recommended a contingent approval, which would empower the city manager to approve the project if specific conditions are satisfied by the bond pricing deadline, currently set for July 22, 2025.
Failure to meet this deadline could lead to a complicated and costly process of unwinding the bonds, where VRA (Virginia Resources Authority) and its investors would need to be compensated for expected returns.
This contingent flexibility is intended to allow the City Manager to consult with the City Council and the City Attorney to assess any changes to the project’s financial implications.
ARHA plans on investing $6 million of its own savings into the First Street property, with plans to rename it Silver Fox, alongside its application for VRA bond funding.
City staff have raised alarms about the housing authority’s ability to manage and maintain the Silver Fox property, as well as the logistics of relocating residents efficiently.
Concerns also extend to ARHA’s capacity to navigate HUD’s requirements for project-based vouchers aimed at helping relocate Ladrey residents.
ARHA has projected that, with the right project-based vouchers, one-bedroom and two-bedroom units at Silver Fox could generate monthly rents of over $2,600 and $3,600, respectively.
These elevated payment standards are crucial for ensuring enough rental revenue to service the VRA loan.
However, city staff find the assumption that these voucher funds will remain steady to be questionable, especially if HUD cuts funding in the future.
The implications of channeling ARHA’s limited voucher resources to satisfy the VRA debt could further restrict the overall number of vouchers the agency can distribute, a matter that staff are looking to clarify.
In an effort to alleviate these uncertainties, ARHA plans to engage a third-party management firm for the Silver Fox property.
They will also make payments in lieu of taxes (PILOT) to offset some of ARHA’s tax-exempt status, enter into an agreement with the city to repay any expenses or debt incurred on ARHA’s behalf, and offer additional collateral for debt service coverage.
Should ARHA default, it could result in the city facing $3.5 million in annual debt service payments, which would subsequently be added to the city’s financial obligations, potentially limiting opportunities for funding other projects.
As city staff work collaboratively with ARHA to mitigate these concerns, it is clear that the two main risks surrounding Silver Fox include the unpredictability of federal voucher funding and the housing authority’s ability to effectively manage and maintain the project.
As ARHA aims to convert tenant protection/relocation vouchers allocated by HUD into project-based vouchers for Silver Fox, the timeline and processes for these transitions remain of key importance.
The staff is specifically seeking clarifications from HUD regarding these processes and the potential need for approvals.
ALXnow has reached out to the Alexandria Redevelopment and Housing Authority for further insights on this vital development.
This complex situation reflects both the challenges and the critical importance of providing adequate housing for Alexandria’s senior population.
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