Old School Contract Amended to Allow Low-Income Housing
By DORIE SOUTHERN
Cape Charles Wave
February 27, 2013
Cape Charles Town Manager Heather Arcos has amended the contract with the purchasers of the Old School in Central Park to allow the possibility of low-income housing.
The original contract, signed June 28, 2012, by Mayor Dora Sullivan, stated: “To the extent permitted by law, Purchaser shall not operate the Project as a low-income housing facility under any state or federal program.”
The Town sold the Old School and adjoining parkland for $10 on December 20, 2012.
Three weeks ago, on February 7, Arcos signed an amendment to the contract removing the low-income prohibition.
The removal comes after three prominent civic leaders protested to elected state officials over alleged discriminatory housing practices by the Town.
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The contract language “is offensive to all of us who have fought for ‘fair housing’ in Virginia and in Northampton County,” the civic leaders wrote in letters to State Senator Ralph Northam and Delegate Lynwood Lewis, with copies to Senator Tim Kaine and Northampton Supervisor Willie Randall.
The letters were signed by Lenora Mitchell, president of Concerned Citizens of Cape Charles; Alice Coles, president of Bayview Citizens for Social Justice; and Jane Cabarrus, president of Northampton County NAACP.
Town Manager Arcos amended the contract without consulting members of Town Council.
However, Mayor Sullivan told the Wave that Arcos had her permission.
Emails obtained through the Virginia Freedom of Information Act indicate that Town Council members serving at the time wanted the low-income prohibition in the contract.
A February 27, 2012, email from Assistant Town Manager Bob Panek to Purchaser Edwin Gaskin states: “Heather [Arcos] indicated that Council does want a few refinements in the purchase contract language. The two significant things seem to be: 1) Prohibition for using the building for Section 8 subsidized housing. 2) Less than 100% waiver of water/sewer connection charges if the insurance proceeds with tax credit leverage exceed the $165K gap. Do you have any issue with the above?”
Gaskin wrote back the same day: “Bob — No problem on the Section 8 prohibition, and you should phrase it like that ‘HUD Section 8′ financing or something like that specifically.”
When the Town first made public its intent to sell the school and parkland for $10 to Echelon Resources, Town staff distributed a leaflet entitled “FREQUENTLY ASKED QUESTIONS,” which stated:
“Will this be low income housing?
No, they are not HUD Section 8 or Virginia Department of Housing and Community Development subsidized housing. They will be upscale, “urban loft” type units, with a targeted rental rate of $600-800 month.”
Arcos told the Wave that as Town Manager she had the authority to change the contract without receiving permission from Town Council.
But only weeks earlier, Arcos did request Council’s permission to make another change to the sales contract.
On January 16, Arcos wrote to purchaser David McCormack: “On January 10, 2013, the Cape Charles Town Council considered your request dated December 29, 2013 (sic) for an extension of the 90-day period specified in ‘Section 15.C of the Sale and Purchase Contract requiring construction to start within 90 days of closing.’ The Town Council approved a commencement date of January 25, 2013 to begin the 90-day period for construction to start with an ending date of April 25, 2013.”
The sale of the school and parkland and rezoning to allow an apartment building is being contested in Northampton Circuit Court by the civic group Old School Cape Charles.
Among issues that Judge Revell Lewis may have to consider are discrepancies between the contract and the deed of sale.
The contract is with Echelon Resources, a Virginia corporation. But the deed of sale is to Charon Ventures, LLC.
Sales negotiations were largely between the Town and Edwin Gaskin, a partner in Echelon Resources. But Gaskin does not appear to be an owner of Charon Ventures.
Town Council voted to override the Town attorney’s advice to require a performance bond and buyback option largely due to their faith in Echelon Resources.
According to the sales contract, the purchaser (Echelon) may not transfer the contract “without prior written approval of Seller (Town of Cape Charles).
Records do not reveal any prior written approval by the Town to transfer the contract to Charon Ventures.
The records do provide a bit of humor: The recorded deed of sale for the Old School states: “This Deed is made this 20th day of December, 2102 . . . .
That’s right — the official date of sale for the school is in 2102.