JBG Companies, owner of the Beauregard apartment complex in Alexandria approved for renovation years ago, announced in late February that it has put the project up for sale, according to published reports.
The buyer, Alexandria city officials say, will be required to preserve 800 units of affordable housing of the new development’s 2,664 total units, in accordance with a governing plan for the area. Half of the new affordable units will be for tenants earning at or below 40 percent of the Area Median Income. The remainder of those “market-affordable units” will be for tenants earning between 40 and 75 percent of AMI, according to that Beauregard Small Area Plan.
Ninety-five percent of the 2,475 currently low-cost units scheduled for replacement are still occupied. The redevelopment plan is being phased in over 30 years, according to the Small Area Plan and city officials.
Because the developer agreed with the city to keep a significant part of the development market-affordable, city officials think the new buyer will be a developer who is used to building affordable housing alongside market-rate projects. Increased density allowed in the new development was traded for preserving housing that is affordable for low-income tenants, said Stephanie Landrum, President and CEO of the Alexandria Economic Development Partnership.
“The theme was how to protect the number of affordable units in the area, and [the Small Area Plan] was used as a tool to provide increased density in exchange for affordable units,” she said, adding that they negotiated and came up with a plan.
These negotiations were not easy and required a lot of work from city officials as well as other stakeholders, Caridad Palermo, Relocation Advisor, Landlord Tenant Division, Office of Housing, said in an e-mail exchange. The city will not involve itself in private sale transactions about selling the property, Landrum said.
Landrum also said she is not surprised JBG is “re-evaluating other properties.” Published reports say the commercial real estate firm, headquartered in Bethesda, Maryland., is looking to concentrate on high-end real estate. They merged forces with another very high-end developer last year, Vornado, worth $8.4 billion.
Landrum speculated that JBG may be wanting to liquidate or test the value of their Beauregard property on the open market. A spokesman for JBG said in an e-mail the company had no comment on this sale.
Alexandria officials will work with the new developer and local nonprofits to help those people being displaced find new, satisfactory housing, according Landrum. Natural attrition of residents moving out of the apartments is part of the plan to clear it for redevelopment. Landrum said that a staff person from the city will be designated to assist others in finding new affordable housing. The community is made up of predominantly Hispanics, African-Americans and Ethiopians. The city’s printed materials about affordable housing have also been translated into several languages.
“I think 30 years is pretty accurate from the adoption of the plan to when we might see it fully envisioned,” Landrum said.
The city economic development head also noted that at least a “handful” of investors would view this property as a real investment. The published reports say that large-scale private equity firms in New York City are seriously eyeing this development for purchase, as are local investors; the most important thing for them is that increased density, again in exchange for market-affordable housing, has already been approved by the city. It has already been re-zoned for more than six million square feet of development, the Small Area Plan says.
“We see a developer in this long [timetable of] a plan as sort of a partner,” Landrum said.
