Chesapeake approves $20M bond for Landmark Apartments' affordable housing renovations
CHESAPEAKE — Bond funding of up to $20 million approved this week will help fund the renovation of 120 units at Landmark Apartments in Campostella Square over the next several years.
Once completed — hopefully by late 2027 — all units will be considered affordable housing. Half of the units will be set aside for project-based rental assistance, and the other half will be income-restricted for those who earn 50% to 60% of the area median income.
Chesapeake City Council voted unanimously Tuesday to approve the issuing of $20 million in tax-exempt multifamily housing revenue bonds by the Chesapeake Redevelopment and Housing Authority for the project.
Renovation projects are also underway at other housing communities in the area, including Peaceful Village and MacDonald Manor — formerly known as Foundation Park, an area of post-World War II housing for ship builders that was later acquired and converted into low-income and public housing.
Though the CRHA owns some of those housing communities, Landmark Apartments is privately owned but working with CRHA on the renovation project. The apartments were renovated in 2005 using low-income housing tax credits. Through that transaction, the housing authority obtained a right that grants it the exclusive opportunity to consider acquiring the property at the end of the 15-year low-income housing tax credit agreement.
CRHA Executive Director John Kownack said the authority is using that right and has been working to solicit a co-developer, ultimately landing on New York-based development firm Fairstead to work with it on the project.
'We're really doing this because we want to sustain the property in the community, and we wanted to make sure that the purchase price would be low enough to support comprehensive renovations,' Kownack said.
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The acquisition and renovations are estimated to cost $33 million, and will be covered by a combination of the bonds and low-income housing tax credits. Landmark II Limited Partnership, which owns the property, and the CRHA agreed to a negotiated purchase price of $8 million. Though the property is assessed at $9.7 million and could sell for more on the market, Kownack said the lowered purchase price will allow the developer to cover all the costs.
He said renovations will amount to roughly $90,000 per unit and include new kitchens, appliances, bathrooms, fixtures, floors and repainted walls, as well as improvements to the community space and laundry room. No tenant displacements are expected as the approach will be to set aside a portion of vacant units to be renovated and then move tenants into the newly renovated units.
Kownack said priority will be given to current tenants who qualify for the rental assistance.
The project will also change the way low-income renters access units. Currently, a portion of apartments are set aside for tenants using housing choice vouchers, a subsidy that can be used at any rental property location that accepts them. By contrast, the completed renovation project will convert 60 units into project-based housing, meaning the subsidy stays with the units and is only offered to those who qualify for such assistance.
Kownack said the mixed-income approach is a way to prevent overconcentration of poverty in one area.
'Our income-based housing serves people that, say, make $30,000 or less. And then the other 60 units will serve people that make $30,000 to $65,000,' Kownack said. 'So we're trying to do a kind of a mixed-income approach here, but still expand the number of units that are available to the people that we serve that have extremely low income.'
Kownack said about 100 families in Chesapeake at this time have been granted housing choice vouchers, with 9,000 other families on the waitlist.
Fairstead is also behind a project to acquire and renovate the 65 apartments at Peaceful Village in the Campostella Square area. On Wednesday, the company finalized a deal to invest $10 million into that project — $150,000 per unit — using low income housing tax credits and the U.S. Housing and Urban Development's rental assistance demonstration program in partnership with the CRHA.
That project includes interior renovations like new flooring, bathrooms, cabinets, lighting and appliances. It also includes the construction of a 2,500-square-foot community center, leasing office and playground.
'Our philosophy is we go where we have an opportunity to make an impact on the local community, and our particular expertise is in affordable housing,' said Estelle Chan, senior director of development at Fairstead.
Fairstead also worked on a project to revamp Atlantis Apartments in Virginia Beach, a government-subsidized apartment complex near the Oceanfront where Grammy-winning singer Pharrell Williams lived as a child.
Natalie Anderson, 757-732-1133, natalie.anderson@virginiamedia.com
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