RAP attempts Riverwood for second time

Related Apartment Preservation (RAP) is back in Colonial Beach asking for a reference for financing their project to upgrade Riverwood Apartments.

In 2008, RAP approached the Colonial Beach Town Council with a similar offer. At that time, RAP was seeking to acquire a large bond through Harrisonburg Redevelopment and Housing Authority for the purpose of purchasing and improving Riverwood Apartments. In order to be approved for the bond, the council was required to adopt Resolution #88-08, declaring the need for a bond to be issued and giving its approval.
Harrisonburg stood to gain a considerable amount of money from the transaction.

Later in 2008, the council negotiated with RAP through their Bond Council, Richard L Hurlbert. The members of council, at that time under Mayor Fred Rummage, conducted several meetings with Hurlbert and shared email exchanges through the town. Ultimately, RAP withdrew its offer to purchase Riverwood after council, in a bold move, refused to act on three key resolutions that would give RAP the green light to pursue financing for the project.

Currently, Related Apartment Preservation (RAP) has again contracted with the current owners of Riverwood to acquire the low-income housing complex. Riverwood is located between McKinney Blvd. (Route 205) and Euclid Ave., and between Fourth and Sixth Streets.

RAP sent Hurlbert back to Colonial Beach last week to brief the town council on the company’s intentions for the property, and to get feedback from council members.

RAP plans to invest more than $2.4 million dollars to improve Riverwood’s appearance, increasing the town’s tax revenues, and improve the quality of both the apartment units and the lives of its residents.

Again, RAP proposed to use Harrisonburg Redevelopment and Housing Authority, but after being informed by Town Attorney Andrea Erard that the town’s Redevelopment and Housing Authority was being reformed, Hurlbert was verbally in agreement with using Colonial Beach to seek the funding.

Hurlbert provided the town with a list of renovations they plan to perform including total upgrades to bathrooms, kitchens and living areas, as well as replacing water heaters and heating/air units. Many upgrades are planned for the exterior, as well.

Hurlbert said he has worked with RAP before, and that many of the upgrades can actually take place in less than a day. He assured the council that these renovations would not displace the current residents. The company would coordinate with residents, and for example, could make plans to replace an entire kitchen while the resident is away at work for the day.

Hurlbert said that in his experience, these types of renovations are transformative to the attitudes of the residents, instilling pride and an “ownership” mentality that raises spirits, and deters loitering and other potentially offensive conduct.

The property is under a covenant to be used as residences for people with low-to-moderate income levels for the next 20 years. The financing structure, to be used to fund the rehabilitation, will include low-income tax credits, which is one component of the overall plan for financing. With these tax credits, the company will be bound for 15 years to continue to run the property as low-to-moderate income residences. This will increase the assurance that the current purchasers will not be allowed to change the use of the property. Hurlbert said that even in the unlikely event that the property was foreclosed upon, it would still be protected by the previous 20-year covenant.

Since the town will incur no expenses or liability for the bonds used to perform the work, the council had no objections to the renovations at the outset of Hurlbert’s presentation, leaving him with a positive attitude about the project.

Other than Councilman Tommy Edwards expressing concerns for security on the grounds, all other council questions seemed to be answered to their satisfaction.

Edwards brought up the same concerns that the previous council members brought up four years ago. No one on the current council seemed to be informed about the events that led to RAP pulling from the project in 2009.

In Nov. 2008, Anne Congdon reported for the Journal that the council seemed to be onboard with RAP’s plans to purchase and renovate the Riverwood Apartments. However, in December, negotiations between the town and RAP crumbled in a matter of one week.

On Dec. 11, 2008, the council kept Hurlbert standing at the podium for over an hour while they conducted a heated discussion. The council had previously held a public hearing on the matter, but few residents stayed long enough for the meeting. No opposition or support from residents was heard.

During that first meeting in Dec. 2008, council members questioned Hurlbert about assurances that RAP would provide the security that had been requested. During talks, the council members were left with the impression that RAP could not guarantee that the physical work would be done, if RAP deemed the property unsound.

The meeting was continued to Dec. 17, 2008. In a bold move made by Colonial Beach Town Council, three resolutions regarding the Riverwood Apartments in Colonial Beach were suspended.

The meeting was called to order; Mayor Rummage made a motion to approve the first Resolution #89-08. When no one came forward to second the motion the Mayor called a ten-minute recess. Rummage walked into the back room. While some members of Council sat thumbing through papers, others sat back in their chairs waiting. After roughly two minutes, Rummage returned to his chair. After a few more moments of awkward silence Vice Mayor Trish King asked the Mayor if they could come out of recess. Rummage asked, “What is the purpose of coming back into session at this point?” To which King responded, “So we can move on with the agenda for this evening.”

Mayor Rummage said, “Well we tried #89-08 and we didn’t get it before us, shall we try #93-08? Do I hear a motion?”

This continued with the other two motions, and ultimately left RAP with no approval from the town.

At the core of the matter was resolution #93-08. It comprised an agreement between the town and the current owners of the Riverwood Apartments to provide greater access to the property by CB Police, and provisions for the current owners to pay a yearly salary of $40,000 for an officer to patrol the premises. The agreement was for a period of three years, and would be carried over to the prospective buyers. Members of the council were finding it difficult make a decision that would only temporarily handle the situation and result in a new problem for the council in three years.

During these discussions, some had mistaken the scope of CB Police powers over the 83-unit complex. Mayor Rummage had expressed in the Dec. 11 meeting his concerns that if the resolution did not pass, that Riverwood would become a “Federal Island”. Some members seemed worried that CB Police would not be able to enforce the law. “The resolution would only make access easier in certain situations, but was not needed for CB Police to carry out their lawful duties,” Councilman Ronald Ridgely stated.

Another resolution involved was #89-08 which set out an agreement that ensured that certain improvements would be conducted by the new owners, as well as various actions that would call for a “zero tolerance” policy to be enforced with respect to criminal conduct and unlawful behavior by tenants.

According to Vice Mayor Trish King, many of the improvements outlined by the prospective buyer were already required by law from the HUD manual.

The big argument during the Dec. 11 meeting was, “These agreements had ‘no teeth’ with no legal recourse.”

Hurlbert, the attorney for the prospective buyers argued that these resolutions were binding contracts and the town had legal recourse through the laws concerning breach of contract.

Councilman Sparky Ridgely stated he didn’t want to enter into a contract on the basis that they would have to seek legal action through the court that would take time and taxpayers’ money.

Ridgely’s concerns echoed that of other members of council by saying, “We were assured certain security improvements to the tune of $18,000 per unit by the prospective buyers, only to be told later that those improvements were contingent on the buildings being ‘sound,’ that they [RAP] didn’t have to make any major improvements.”

After the December 17, 2008 meeting, Mayor Rummage had this to say, “We have a number of people here that just absolutely, I think, its not that they don’t want to do anything for Riverwood, I think they’re very upset that we have a disproportionate amount of subsidized housing in this town. But they’re here and that’s a problem, and we should address that. I’ve got a number of people who have contacted me who live out there who are really looking forward to having a change. And we could have made a difference. But now we’ll have to use a different approach.” Rummage was particularly concerned about the elderly residents of Riverwood.

Now the issue is back before the council, which consists of all new members. RAP is hoping for a better outcome this time around.

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