Clarendon Court Apartments Preservation - Arlingtonva
Clarendon Court Apartments Preservation Action Item for the Housing Commission April 9, 2015
Clarendon Court Apartments is a 103-unit LIHTC property (100% affordable) in the Ashton Heights neighborhood. The property includes efficiency, 1-bedroom, 2-bedroom, and 3bedroom units with rents ranging from 50%-70% of area median income. 56 units were built in the 1940s (and renovated in 1993) and 47 units were built in 1993. Additional density may be available on the site only with a major site plan amendment and rezoning of the parcels.
The County provided a $1.5M AHIF loan to this property in 1992; this loan was repaid in 2003. The current affordability restrictions are in effect until 2018 under the existing AHIF Agreement; the 60% of AMI affordability is further protected until 2024 per the LIHTC extended use restrictions.
Premier wishes to sell Clarendon Court and has been working with MBS to purchase the property and preserve the affordability. If MBS acquires the property, MBS proposes deepening the affordability on some units and pursuing tax credit equity to fully renovate the property. MBS has agreed to provide six accessible units and provide up to ten permanent supportive housing units.
MBS signed a LOI with Premier in February 2015 for the acquisition of Clarendon Court and the Ashton Heights civic association has written a letter of support for the transaction.
The requested loan from the County is approximately $5.8 million ($56K/unit). MBS negotiated a reduced purchase price with Premier as well as a seller note payable only once the County funds are repaid in full. The County loan would be conditioned upon successful award of tax credit equity.
The County has a right of first offer (ROFO) in effect until March 2018. The County also has a purchase option, the term of which begins on March 7, 2015 and expires on March 7, 2018. MBS and Premier are requesting that the County provide a conditional waiver of its ROFO and purchase option, limited to this transaction. If MBS’ acquisition falls through, the County will retain its purchase option and ROFO for future transactions. In return for the waiver of its Option and ROFO, the County will receive: o Extension of affordability until 2075 (60 years) when MBS acquires the property. o Deeper affordability on some of the units. o Substantial renovation of the property with tax credits. o Future Option and ROFO that the County may exercise if MBS wishes to sell Clarendon Court in the future.
MBS’ preservation of Clarendon Court Apartments will support Arlington’s Goals and Targets for Affordable Housing by preserving existing CAFs that are family-sized units (Goal 1, Target 1A), providing a renovation opportunity with energy efficiency/sustainability components (Goal 4, Target 4E), preserving existing CAFs to ensure no net loss and specifically to minimize displacement of existing tenants during renovation (Goal 5, Target 5D), and preserving CAFs in Neighborhood Service Area D (Goal 8, Target 8A). This project, as presented, also meets nearly all of the underwriting targets established by Housing staff.
Given the affordable housing credentials and experience of MBS, the existing relationship between Premier and MBS, MBS’ proposed transaction and corresponding AHIF request, and impending expiration of the 50% of AMI affordability, staff recommends that the County Board provide a limited waiver of its purchase option and ROFO at Clarendon Court and allocate funds to support the transaction.
Staff will bring this project to the County Board for its consideration at the April 18 meeting. If this project receives County support, MBS will apply for 4% tax credits this fall with settlement planned for December 2015.
Current Unit and Affordability Mix: 50% of AMI
Efficiency
70-80% of AMI
Total
4 46
6
12
4
27
3 bedrooms Total
60% of AMI
4
1 Bedroom 2 Bedrooms
56% of AMI
10
46
62 33
2
2
4
41
6
103
70-80% of AMI
Total
Proposed Unit and Affordability Mix: 50% of AMI
56% of AMI
60% of AMI
Efficiency
4
4
1 Bedroom
11
51
62
2 Bedrooms
10
23
33
3 bedrooms
1
3
4
Total
26
77
103
Clarendon Court Map and Photos
Clarendon Court Apartments is a 103-unit LIHTC property (100% affordable) in the Ashton Heights neighborhood. The property includes efficiency, 1-bedroom, 2-bedroom, and 3bedroom units with rents ranging from 50%-70% of area median income. 56 units were built in the 1940s (and renovated in 1993) and 47 units were built in 1993. Additional density may be available on the site only with a major site plan amendment and rezoning of the parcels.
The County provided a $1.5M AHIF loan to this property in 1992; this loan was repaid in 2003. The current affordability restrictions are in effect until 2018 under the existing AHIF Agreement; the 60% of AMI affordability is further protected until 2024 per the LIHTC extended use restrictions.
Premier wishes to sell Clarendon Court and has been working with MBS to purchase the property and preserve the affordability. If MBS acquires the property, MBS proposes deepening the affordability on some units and pursuing tax credit equity to fully renovate the property. MBS has agreed to provide six accessible units and provide up to ten permanent supportive housing units.
MBS signed a LOI with Premier in February 2015 for the acquisition of Clarendon Court and the Ashton Heights civic association has written a letter of support for the transaction.
The requested loan from the County is approximately $5.8 million ($56K/unit). MBS negotiated a reduced purchase price with Premier as well as a seller note payable only once the County funds are repaid in full. The County loan would be conditioned upon successful award of tax credit equity.
The County has a right of first offer (ROFO) in effect until March 2018. The County also has a purchase option, the term of which begins on March 7, 2015 and expires on March 7, 2018. MBS and Premier are requesting that the County provide a conditional waiver of its ROFO and purchase option, limited to this transaction. If MBS’ acquisition falls through, the County will retain its purchase option and ROFO for future transactions. In return for the waiver of its Option and ROFO, the County will receive: o Extension of affordability until 2075 (60 years) when MBS acquires the property. o Deeper affordability on some of the units. o Substantial renovation of the property with tax credits. o Future Option and ROFO that the County may exercise if MBS wishes to sell Clarendon Court in the future.
MBS’ preservation of Clarendon Court Apartments will support Arlington’s Goals and Targets for Affordable Housing by preserving existing CAFs that are family-sized units (Goal 1, Target 1A), providing a renovation opportunity with energy efficiency/sustainability components (Goal 4, Target 4E), preserving existing CAFs to ensure no net loss and specifically to minimize displacement of existing tenants during renovation (Goal 5, Target 5D), and preserving CAFs in Neighborhood Service Area D (Goal 8, Target 8A). This project, as presented, also meets nearly all of the underwriting targets established by Housing staff.
Given the affordable housing credentials and experience of MBS, the existing relationship between Premier and MBS, MBS’ proposed transaction and corresponding AHIF request, and impending expiration of the 50% of AMI affordability, staff recommends that the County Board provide a limited waiver of its purchase option and ROFO at Clarendon Court and allocate funds to support the transaction.
Staff will bring this project to the County Board for its consideration at the April 18 meeting. If this project receives County support, MBS will apply for 4% tax credits this fall with settlement planned for December 2015.
Current Unit and Affordability Mix: 50% of AMI
Efficiency
70-80% of AMI
Total
4 46
6
12
4
27
3 bedrooms Total
60% of AMI
4
1 Bedroom 2 Bedrooms
56% of AMI
10
46
62 33
2
2
4
41
6
103
70-80% of AMI
Total
Proposed Unit and Affordability Mix: 50% of AMI
56% of AMI
60% of AMI
Efficiency
4
4
1 Bedroom
11
51
62
2 Bedrooms
10
23
33
3 bedrooms
1
3
4
Total
26
77
103
Clarendon Court Map and Photos
