My View / Giuseppe Cecchi

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A plan for preserving workforce housing for Alexandria
I have been a developer in the Washington Metropolitan Area for 48 years.

Starting with Watergate in the 60s and later with IDI, I have developed numerous projects, office buildings, hotels, mixed use complexes, but most of all large condominium communities like Watergate at Landmark, The Rotonda, Montebello, Carlyle Towers, Leisure World and many more.

While most of my projects have been in the luxury category, whenever I saw the opportunity I also pursued the preservation of affordable and workforce housing.  I am one of the largest developers of condominiums in this region, having built more than 13,000 units. 

But I am by far the largest preserver of affordable and workforce housing with over 3,000 units between Parkfairfax and Parc East in Alexandria, Belleview in Fairfax County and Dominion Terrace in Arlington.

The majority of this happened in the 70s and in the 80s, the golden era for conversions, where most developers were acquiring old rental properties, evicting all existing tenants and converting the buildings to upscale condominiums. 

I instead developed a plan whereby the existing tenants were offered a realistic opportunity to become homeowners at a price they could afford without ever having to move from their homes.  My plan proved to be very successful. About 70 percent of the residents were able to purchase their units because under my plan the monthly cost of ownership was comparable to the market rent for their units. 

So if they could afford to rent, they could afford to buy.

Hunting Terrace and Towers
Today, I see the same potential in the re-development of Hunting Terrace and Hunting Towers, where a new opportunity exists for preservation of workforce housing.

As you probably know in 2001 VDOT acquired by condemnation both Hunting Terrace and Hunting Towers, and subsequently demolished approximately one third of each property in order to build the new Woodrow Wilson Bridge.

When I learned about VDOTs plan I saw again an opportunity for the preservation of 530 existing units of  workforce housing right in the heart of Alexandria, where it is needed the most.  An opportunity that in this day and age is quite rare and unique. 

To put this number into the proper perspective, during the past 15 years the number of affordable workforce housing produced or preserved in the whole City of Alexandria was 137 units.

In recognition of the strong concern expressed also by the City Council about the depletion of the existing stock of workforce housing which forces first responders and other city employees to live far outside the City, IDI conceived and proposed a creative plan for Hunting Towers and Hunting Terrace aimed at preserving the highest possible number of affordable workforce housing.

IDI is proposing to rehabilitate and preserve all 530 existing units at Hunting Towers as affordable workforce condominiums, by developing a luxury condominium community on the Hunting Terrace site. 

This extraordinary commitment represents the largest private contribution of affordable workforce housing to the City of Alexandria since IDI converted Parkfairfax and Parc East in the 1970s.

The acquisition price for the Towers property is set by Virginia law at Fair Market Value which reflects the highest and best use for the property.  In order to reduce the fair market value price to a level that would allow the preservation of all units as workforce housing, a substantial subsidy is needed in the range of $20 million.

To generate this large subsidy, IDI has requested the City to allow additional height and density on part of the Hunting Terrace site.  IDI is proposing to construct a luxury condominium community, Hunting Creek Plaza, consisting of 361 units that include two 5-story buildings facing Washington Street and two buildings stepping up from 8 to 14 stories at the back of the site over 250 feet from Washington Street.

Granting of height and density
There are good reasons for the City Council to grant additional height on the Hunting Terrace site. First and foremost, the Hunting Creek Area Plan specifically provides for the granting of additional height and density in return for an exceptional contribution toward affordable workforce housing. 

Second, Historic Old Town ends in fact at the Beltway.  There are only three multifamily building complexes along Washington St. south of the Beltway: Hunting Towers with nine stories and Porto Vecchio with eight stories on the east side and Hunting Terrace on the west side of the street. 

Based on the existing situation there is no logical reason for a 50 foot height limitation on the Hunting Terrace site.

Our plan for the Hunting Towers is as follows:  We will perform the necessary repairs and restoration to the buildings in order to bring them to a good level of livability with an indefinite life expectancy subject to proper maintenance.  The units will be converted to a condominium regime.

The renovated condominium units will be sold first to the tenants at prices which will make the net monthly cost of ownership equal to or lower than the market rent for such units.  Second, the units not purchased by the tenants will be offered to the City workforce (firefighters, police force, teachers, nurses, etc.) at prices that will allow the majority of them to qualify for 97% financing. Third, up to 120 units will be offered to the Alexandria Housing Corporation (or other non-profit designated by the City) to be managed as workforce rentals; and fourth, any remaining unit will be offered to the public workforce at the same prices for the City workforce.

Elderly, disabled or long term tenants who do not wish to purchase will be allowed to continue to rent indefinitely.

In order to insure the long term affordability of these units, appropriate re-sale criteria will be established and enforced in cooperation with Citys Office of Housing.

Just to put things in perspective the differential in total gross sales income if all the units  would be sold at market prices is approximately $32 million.

We believe that our proposal offers a win-win opportunity for the tenants of Hunting Towers to become homeowners at a cost they can afford; For the city workforce to find a home in the City that they can afford to purchase;  For homeowners in Alexandria to move to a luxury condominium community on the waterfront, and for the City of Alexandria to improve its quality of life, to improve the ability to retain its workforce and to achieve substantial economic growth.

What will happen if our proposal is not approved? We will be forced to develop a by-right project on the Hunting Terrace site within the 50 feet height limitation; the subsidy needed to preserve Hunting Towers as affordable workforce housing will not be generated; the Towers will obviously be redeveloped and sold at market prices.

And, the unique opportunity to preserve 530 units of workforce housing in the City of Alexandria will be lost forever.

Giuseppe Cecchi is chairman of the IDI Group Companies, based in Arlington.

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