The National Corporation for Housing Partnerships has dropped its controversial plan to purchase and rehabilitate the Abingdon Apartments in Alexandria with tax-exempt financing -- a proposal that had drawn widespread criticism from opponents who argued that it would displace most of the tenants from one of the city's few remaining affordable rental complexes.
NHP, which was chartered by Congress in 1968 to encourage private investment in low- and moderate-income housing, said yesterday that it terminated the purchase contract for the 243-unit garden apartment complex because the seller failed to get certificates of occupancy from the city as stipulated in the contract. Negotiations with the seller fell apart last week, NHP officials said.
NHP had already received all the necessary approvals from city agencies for the project on West Abingdon Drive, despite protests from the tenants and the Alexandria Landlord-Tenant Board that NHP's proposed rental rates would displace up to 90 percent of the residents.
The Alexandria City Council reluctantly gave the Alexandria Redevelopment and Housing Authority approval to issue $11 million in tax-exempt bonds to finance the project last month, saying that while they were concerned about affordability, NHP had made an effort to lower some of the rents.
Under federal law, a developer receiving tax-exempt financing must set aside 20 percent of the units to house low- and moderate-income tenants. Because the median income in the Washington area is so high, however, NHP was able to propose a rate structure for the complex that nearly doubled the rents and still met the federal regulation.
Rents at the complex today are $375 for a one-bedroom and $400 for a two-bedroom.
NHP originally proposed setting the rents for the low- and moderate-income units at $536 and $635. After negotiations with the city, NHP agreed to lower them to $436 and $535. The other 80 percent of the units would have rented for $625 and $725.
Councilmembers said they agreed to the financing because they feared a condominium developer would buy the complex if NHP did not. Councilmember Donald Casey said that representatives for the seller, Raymond N. Nourha, told the council there was a backup contract from a condominium developer. A condominium developer would not be required to set aside 20 percent of the units for low- and moderate-income people. Casey also said, however, that he understood that backup contract had terminated after the council approved the project Jan. 12.
In a press release announcing the decision not to buy the Abingdon, NHP blamed the seller for breaking the terms of the contract, but it indicated that additional factors behind the corporation's decision were "the greater risk of the project resulting from substantial rental concessions and tenant relocation payments, adverse publicity, increased costs . . . and uncertainties in the equity capital markets."
Neither the seller or his representatives could be reached for comment. However, one of the members of the Alexandria Landlord-Tenant Board said that the seller's lawyer told him NHP had agreed in a letter to extend the settlement deadline to March 1 so that the certificates of occupancy could be obtained.
NHP's general counsel said yesterday that "there was correspondence indicating a willingness to extend the deadline but that there had been no actual extension."
Rep. Henry B. Gonzalez (D-Tex.), chairman of the House banking committee's subcommittee on housing, had complained to NHP in January about the proposed rental rates for the Abingdon project, saying that NHP had fought for and won an expansion of its charter last year to help finance projects that would help low- and moderate-income people.
Gonzalez questioned William Comings, executive vice president for NHP, at a congressional hearing on low-income housing last week, asking how NHP could justify its proposed rent structure at the Abingdon.
Comings responded to Gonzalez at the hearing by saying that NHP should do projects like the one at the Abingdon because "if we don't proceed on the Abingdon, someone else will . . . [someone with] even less resources to serve the existing tenants."