Council approves funding changes for Ramsey Homes, Lacy Court Apartments

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A Ramsey Homes rendering from 2016 (File photo)
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By Alexa Epitropoulos | aepitropoulos@alextimes.com

City council voted unanimously at its legislative meeting on May 22 to approve funding changes for Ramsey Homes and Lacy Court Apartments.

The city’s loan to the Ramsey Homes development, operated by the Alexandria Redevelopment and Housing Authority, will increase from $2 million to $3.6 million. Helen McIlvaine, the city’s director of housing, said the hike was due to multiple factors. Increased construction costs and the loss of a $500,000 tax credit equity necessitated more city funding, as did a decrease in the amount of money it has on hand due to delays in the redevelopment of Andrew Adkins.

The loan will be financed by the city’s $5 million set-aside created from ARHA’s repayment of a loan for the Glebe Park redevelopment. That fund, with the new loan amount, would have a $1.4 million balance. The loan terms require that the $1.6 million increase be a priority repayment for ARHA.

“Approving the loan will keep the project on track, allow ARHA to make good use of tax credit funding and, most importantly, the project would close and begin construction next month,” McIlvaine said at the meeting.

The Ramsey Homes redevelopment is scheduled for completion in late fall of 2019.

McIlvaine also represented the Alexandria Housing Development Corporation’s request that the city relieve it of a requirement to repay a $500,000 city loan at the end of construction on the Lacy Court Apartments. The repayment was part of a plan the city approved in 2017, but McIlvaine said since then the nonprofit has faced a number of obstacles, including increased construction costs.

“While AHDC has been successful in getting tax credits awarded and securing financing, increases in construction costs have stretched the margins for the project to the point where this payment would be very burdensome, as they would have to fundraise additional money to make sure they had it in their budget at the end of the project,” McIlvaine said.

McIlvaine said, since realizing that construction costs were more than anticipated, AHDC has taken several steps to reduce the project’s budget, including rebidding the construction contract, deferring their developer fee to the maximum amount allowed by the organization’s investors and borrowing low interest loans.

While McIlvaine said those efforts have been successful in saving AHDC money, she said construction ultimately cost $1 million more than what it anticipated in 2017.

McIlvaine said city staff recommended approval of the loan repayment relief. City council unanimously approved the measure.

During the meeting, council received recommendations from the Environmental Policy Commission to update the city’s environmental action plan and held a work session with the commission about the recommendations.

The commission recommended transitioning city government facilities to 100 percent clean energy by 2023, decreasing its energy usage by 22 percent per square footage between 2018 and 2023 and increasing its open space and tree canopy coverage, among other measures.

Council also received a presentation from the Alexandria Fund for Human Services’ grant program and approved the Alexandria Age-Friendly Plan for a Livable Community 2019 to 2021.

The Alexandria Fund for Human Services presentation followed the approval of several changes to its grant program in 2014, including the performance benchmarks for nonprofits that receive awards from the city. Grant program recipients for its 2019 to 2021 cycle were announced last week.

The initiative gives funding to support human service programs relating to young children, youth, families, immigrants, seniors, persons with disabilities and low-income individuals. Some of the changes to the fund approved in 2014 included changing the grants from single-year to multiyear and requiring grant recipients to achieve 75 percent, versus 50 percent, of expectations set forth by the city.

Kate Garvey, the city’s director of the department of community and human services, said the benchmarks were proving difficult for some nonprofits to achieve.

“The range of challenges for providers to reach those goals begin at difficulty getting referrals, not getting information and data back from partners who they’re dependent upon and, in some cases, and this is an issue across the board, organizational turnover – either direct staff or leadership staff,” Garvey said at the meeting.

Garvey said, since the changes have been implemented, her department has worked to educate participating nonprofits about the new expectations. She said her department is still struggling with the lack of funding available for program participants.

Vice Mayor Justin Wilson, who said he initiated the changes along with Councilor Paul Smedberg in 2014, said the new benchmarks paved the way for a leaner, more efficient group of awardees.

“I guess my struggle is, generally, that I’d much rather have a smaller amount of very effective grantees than have a larger group of less effective grantees,” Wilson said.

When asked about challenges facing nonprofits in the city, Garvey said a number of factors are feeding into their budget constraints.

“We are not providing enough funding, in some cases, to be frank, and in other cases it’s how challenging it is for nonprofits to operate,” Garvey said. “We recently hosted a session on challenges. It ranges from eliminated funding, reducing the number of funding sources that are out there, turnover in direct staff and leadership and trying to get support for administrative staff. It’s rare that it’s possible to get that.”

Council didn’t take action on the presentation, as no vote was required.

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