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.

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Comments

2 Responses to “Old School Contract Amended to Allow Low-Income Housing”

  1. Wayne Creed on February 27th, 2013 8:33 am

    Great reporting of the facts. The bottom line here is that the Town never could prevent it from becoming a low-income housing unit. At the rent levels ($650 per month), that is pretty much in line with most low-income prices, and given the current state of Sea Breeze, affordable housing is much needed. The only reason section 15f was ever entered in the first place was to create a false sense of “upscaleness” for the project, that would appease and please the yearn for a BMW-Mercedes aesthetic status quo. Now that the genie is out of the box, citizens need to accept the reality of what is really going to happen to that building. It also begs a bigger question: not whether the apartments should be upscale lofts or low-income housing, but whether a 90-person multi-family structure should be located in Central Park in the first place. And why should the taxpayers be on the hook over the mediocre terms of the contract — by footing the 75% reduction in hookup fees, not to mention giving public property away for a mere $10? “The first responsibility of every citizen is to question authority” — Benjamin Franklin. Our questions to the authorities that be are: why did they put discriminatory language in the contract in the first place, why did they take it out, and under whose authority was all this undertaken?

  2. Susan Bauer on March 4th, 2013 4:10 pm

    Is it a bad thing for poor people to have access to clean, well appointed, affordable rental housing, located in a safe historic town on the Eastern Shore of Virginia?

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