Council approves HRA payment-in-lieu and assessment agreements tied to Washington Manor sale

The City Council on Tuesday approved a resolution authorizing two agreements with the Housing and Redevelopment Authority (HRA) related to the forthcoming HRA purchase of Washington Manor.

Dana Hilton of the HRA described the documents as a payment-in-lieu-of-taxes (PILOT) reimbursement arrangement and a companion assessment agreement intended to cover a 0% loan from a public utilities fund. Hilton said the assessment agreement was drafted by bond counsel and needs final approval from the Virginia Public Utilities Commission (PUC) at the end of the month.

Councilor Paulson asked about the maximum aggregate bond amount shown in the packet (listed as $4,600,000) and whether that creates a new levy on Virginia taxpayers. Hilton said the $4.6 million is a statutory maximum and the HRA does not expect to borrow that full amount; the actual loan will be "just under $4,000,000." She said the HRA will use existing HRA levy revenues to service the debt and that no new levy is planned beyond the HRA levy already approved by council.

The council moved and passed the resolution by voice vote.

The agreements create a framework for how the city will reimburse the HRA for the city portion of PILOT payments once the HRA takes ownership and clarify how the assessment for the public-utilities loan will be handled if approved by the PUC. Hilton noted the PUC must still act on the assessment agreement at its next commission meeting.

Council staff recorded the motion and approved the resolution to move forward and to take the agreements to the council for final approval as appropriate.