Set the Wayback Machine to 2009, and in between listening to Nickelback and watching Lost on the teevee, you might have noticed that Fairfax County had gotten itself embroiled in the foreclosure proceedings of a Reston apartment complex. According to the Washington Times, the county lost $2.4 million in its investment in the Reston Glen apartment complex in South Reston -- an investment made to
ensure "web logs" make their quotas of angry comments about workforce housing help ensure affordable housing in the county. Lay it on us, old-timey "news paper":
In January 2007, Fairfield Properties bought the 200-unit Reston Glen apartment complex for $30,375,000. The company subsequently sought financing through the county to keep a fifth of the apartments affordable based on a preset rateand to rehabilitate the property.Our eyes started glazing over at the words "Goldman Sachs," but we're going to assume their involvement helped create value or something and move on. Right?
The county’s Redevelopment and Housing Authority facilitated $34 million in bond financing for the project, and also provided a $2.375 million loan from the county’s “Penny for Affordable Housing Fund,” which is funded by dedicating 1 cent of the value of the real estate tax rate.
In September 2009, Fairfield was unable to put up enough collateral after entering into an arrangement with Goldman Sachs, who bought the bonds, and so Goldman foreclosed on the property. In December 2009, Fairfield filed for Chapter 11 bankruptcy.
The $2.4 million was lost through the foreclosure, but the Department of Housing and Community Development (HCD) came to an agreement with the purchaser, Red Stone Partners IV LLC, to repay the note up to the full amount at 25 cents on the dollar. The catch, though, was that the money would only flow for every dollar the company got in excess of $34 million for a future sale of the property.
The property was sold in December 2010 for $28.5 million, however, so HCD wrote off the Penny Fund loan at the end of fiscal 2011. The affordability restrictions on the complex are still in place, it was rehabilitated, and the bonds were fully repaid.Here's a Fun Fact we didn't know. According to the complex's website (which has its own web log), the different apartment models are named after fancy painters -- e.g., the Monet, the Van Gogh, and the Picasso (just don't check the walls on the latter unit with a T-square). Things appear to be going A-OK there now, and the affordable units that were the reason the county got involved with the complex in the first place are still there.
So bygones? Apparently not. Some county supervisors are peeved that they were only formally notified of the loss this year, and the Washington Times, never one to miss a story about "affordable housing" or "not putting the poor in workhouses," was On The Scene. The county investment was part of a pilot project that won't be repeated, the article says, but Fairfax is now attempting to market another Reston affordable housing complex it owns -- Crescent Apartments -- as part of the broader redevelopment of Lake Anne. Bids were supposed to come in on those redevelopment proposals at some point this spring, so who knows what will come of that?