Alexandria housing authority asks city to guarantee $56.8 million VRA loan to buy Silver Fox senior building

ARHA CEO Eric Johnson told the Alexandria City Council on June 10 that the Alexandria Redevelopment and Housing Authority has an executed purchase-and-sale agreement to buy Silver Fox, a 133‑unit senior building, and is seeking a city guarantee for up to $56,800,000 in Virginia Resources Authority (VRA) bond financing to close the deal.

The request is intended to provide a permanent relocation option for many residents now living at the city’s aging Ladrey senior high‑rise while Ladrey is renovated. Johnson said the purchase price agreed with the seller was $56,800,000 and that ARHA would allocate about 110 project‑based vouchers to the property to raise the building’s share of affordable units from roughly 7% to about 83%.

Why this matters: ARHA said the acquisition would speed moves for seniors who otherwise face multi‑year renovation timelines at Ladrey and increase the city’s stock of permanently affordable senior housing. City staff and council members pressed ARHA on federal funding risk, underwriting, collateral and operational oversight — and emphasized that council would not vote on a guarantee the same night.

ARHA presentation and request Eric Johnson, ARHA’s chief executive, described Silver Fox as a newly constructed, market‑rate building delivered in June 2024 that is currently about 18% occupied and managed by a third party. Johnson said the building’s seller accepted ARHA’s offer and that ARHA’s plan is to use VRA bonds at a quoted interest rate of about 4.68% plus roughly $5.5 million in equity for a total project cost around $61 million. He told council the building would provide an immediate option for many Ladrey residents while Ladrey’s renovation proceeds and that residents would have a right to return when Ladrey’s work is finished.

City review, risks and mitigation City Housing Director Helen McElvain and the City Manager told council staff are conducting due diligence and laid out six categories of risk staff is reviewing, including federal funding uncertainty, financing structure, HUD approvals for project‑based vouchers, project delivery and project management.

The City Manager told council, "So it's really 6 categories of risk," adding that HUD concurrence on the availability and extent of vouchers is a central variable for the financing plan.

Finance Director Kevin Greenleaf explained the fiscal mechanics and what a city guarantee would mean if invoked: "Moral obligation is a guarantee on outstanding debt. If ARHA is not able to make the debt service payments, the VRA would require us to step in and make those debt service payments," Greenleaf said. He told council that if the guarantee were called the $56 million would be placed on the city’s balance sheet and could affect debt ratios and borrowing capacity in future capital planning years.

ARHA terms and proposed protections Johnson and ARHA staff said VRA requires a one‑year debt service reserve fund (about $3.63 million), and that ARHA has offered corporate guarantees and pledged hard assets or a line of credit initially equal to $6 million (about two years of debt service) that would decline to $3 million after 10 years. ARHA also described a voluntary tax payment equal to 2% of effective gross revenue and said the bond underwriting and detailed pro forma had been shared with city finance staff.

HUD vouchers and federal uncertainty Council members focused on HUD approval for the project‑based vouchers ARHA would use to support underwriting. Johnson said HUD granted ARHA additional voucher authority for resident relocations but stressed written HUD concurrence on project‑basing and other approvals remains an important open item. The City Manager said staff will seek written confirmation from HUD and noted ARHA’s lawyers have provided opinion letters, but that the written HUD position is critical for the city’s risk analysis.

Timing, next steps and council process Council members were told there was no vote that night. ARHA reported an anticipated closing date in early August if financing and approvals proceed. Staff said further steps would include a proposed council resolution and a performance agreement (if council chooses to proceed), and that the Housing Affordability Advisory Committee’s investment subcommittee planned to review the matter and submit a letter to council before a final vote. The City Manager also said staff were negotiating specific mitigation measures, including a requirement for a third‑party property manager, relocation specialists for current Ladrey residents, capital needs assessments and annual certifications or audits.

Council questions and concerns Council members and the mayor praised the goal of protecting seniors but repeatedly pressed ARHA for clarity on: how many Ladrey residents would move to Silver Fox; how many residents would remain to be relocated elsewhere; which ARHA assets would be pledged; how voucher authority would be used; and how the city’s exposure would be limited if federal funding were cut or vouchers were less than projected.

Johnson said Ladrey has about 168 residents in total, about 131 of whom are aged 62 or older (average age reported in the presentation was about 75 for that group). He said Silver Fox has 133 units and ARHA expects many—but not all—Ladrey residents will choose to move there, with others moving to alternative placements with support. He described plans for a relocation specialist to assist residents and for a right to return to Ladrey when renovations are complete.

What the council will see next City staff said they will continue due diligence, seek written HUD concurrence on project‑basing and voucher authority, confirm the collateral and letter‑of‑credit arrangements ARHA proposes, and negotiate specific contractual protections (performance agreement) to limit the city’s exposure. Council members were told public comment will also be taken at an upcoming Saturday public hearing and that the Housing Affordability Advisory Committee would offer input before a potential vote.

Status: no vote yet There was no council vote on a city guarantee on June 10; council members and staff said they expect further briefings and paperwork and that any guarantee would come through a separate resolution and performance agreement if the council decides to proceed.

Ending: next public steps City staff will provide additional materials, including ARHA’s underwriting and due diligence responses, a compendium of questions and answers developed after the June 10 discussion, and any letters from advisory committees. The council directed staff to continue review; ARHA said the VRA underwriting decision and HUD concurrence remain the schedule drivers if the deal is to close in August.