Redevelopment partnership will hinge on "radical approach"

In March, a team from the City of Charlottesville and the Charlottesville Redevelopment and Housing Authority (CRHA) began to look for the most effective way to overhaul the city’s public housing stock.

The group, made up of housing and grant specialists for the city and the director of redevelopment for the Housing Authority, found that a partnership between private and public entities was the best way to make the redevelopment of the 376 units, as highlighted in the existing master plan, become a reality. Since both scenarios of the plan are pricey and federal funding is limited, could a local developer become the missing link?

“It would take a pretty radical approach from where they are now,” said Dean Wenger, president and COO of Management Services Corporation (MSC) in Charlottesville.
“A private developer looks at it as, ‘What does it cost to redevelop? What is the end result?’”

MSC began managing student housing around the University in 1972, but also offers affordable housing to those in need. Wenger said that the company, founded by Douglas Caton, has had experienced working with the Housing Authority.

“Some of this housing is really in bad shape,” he said. “We have repaired some of these units and we know what it takes. We have a lot of experience actually rehabbing occupied housing while people still live there, and it is absolutely not for the faint of heart. If you do it wrong, you are affecting the people’s day-to-day life.”

According to the master plan created by Wallace Roberts & Todd (WRT), a Philadelphia consulting firm, the first redevelopment scenario would cost $116 million and calls for a total of 558 units. As part of the Residents’ Bill of Rights, a document approved by City Council in 2008, residents are guaranteed one-to-one replacement of the number of public housing units and will spend no more than 12 months in temporary housing.

The second scenario is much more expensive, $151 million, and denser at 719 units. In its estimates, the master plan also heavily relied on Hope IV funding, which is currently being replaced by a different U.S. Department of Housing and Urban Development (HUD) program known as Choice Neighborhoods. The program criteria have changed also, and CRHA will not qualify for Choice Neighborhoods.

“Accordingly, neither program can be relied upon as a viable source of funding,” reads a report by the team that was presented to City Council.

To open the redevelopment process to the possibility of partnership, city and CRHA staff recommended using the Charlottesville Development Corporation, a nonprofit established by the Housing Authority, as the public entity.

“As to a redevelopment partner, we will be looking for an entity with strong financial capacity which is interested in developing mixed income, and in some cases, mixed use developments,” said Kathy McHugh, housing specialist with the city, in an e-mail. “Ultimately, we want a development partner with experience leveraging funds and completing quality projects.”

Although MSC is interested in participating in the redevelopment, Wenger is cautious.
“We have been around long enough to see that nothing comes easily in this area with housing, and we would need a very, very strong advocate on the part of the city to say, ‘We are going to clear the roadway in front of you,’” he said.
McHugh said that although the city and Housing Authority “would love” to work with local developers, it is still too early to release incentives for those developers to be part of the redevelopment process.

For the deal to be appealing, Wenger said money and a sense of autonomy should be included.

“Neither of those is something that the city is quite ready to do,” he said. “I can absolutely appreciate that because they don’t have the same approach that we do.”

C-VILLE reached out to several local developers, but only Wenger returned our calls. 

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