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Council reviews VA Village MOU: EDA holds title, city to manage rentals with affordability conditions
Summary
Council reviewed a memorandum of agreement that keeps title with the Economic Development Authority while city staff will manage Virginia Village rentals; the MOU establishes a rental fund, allowed uses, and repayment/ROI rules for $475,000 EDA investment, and council sought clearer language tying market sales proceeds to broader affordable-housing goals.
Council members discussed a memorandum of agreement that would formalize how the Economic Development Authority (EDA) and the city will manage nine Virginia Village properties the EDA currently owns.
Under the proposed MOU, the EDA retains legal title to the properties while city staff will administer property management and set rents in line with the city's affordable dwelling-unit policy. Rents will be deposited into a Virginia Village Rental Fund held in the EDA's name but supervised by the city's finance director and subject to public-fund rules.
The agreement specifies permitted uses of rental revenues: maintenance and repair of the properties; acquisition of additional Virginia Village properties; consultant services for planning or marketing; and, if needed in the future, to offset debt. The EDA also has $475,000 currently invested in the properties; the MOU lets the EDA receive CPI plus 1% annually as a return or have the capital repaid under defined disposition scenarios.
City staff described two scenarios: a market-sale scenario in which the EDA would recover its investment plus profit, and an affordable-housing disposition scenario in which proceeds would be retained or repaid according to council direction. Multiple councilmembers asked that the MOU be clearer that market sales used to generate proceeds can be applied to fund affordable housing within the Virginia Village portfolio rather than undermining the project's affordability goals.
"We want to be sure proceeds used to subsidize affordable housing in the Virginia Village area are treated as part of the affordable-housing strategy," a councilmember said during the discussion, urging staff to clarify the language.
Why it matters: The MOU defines how the city and the EDA will preserve and possibly redevelop a set of small multifamily properties as affordable housing. The agreement assigns day-to-day management to the city but preserves EDA ownership and repayment protections. Councilmembers asked to clarify how proceeds from any market disposition would be constrained to support the broader affordable-housing mission.
Next steps: Staff suggested tightening the MOU language to confirm that sales or transfers that generate proceeds intended for affordable-housing preservation are treated under the "affordable-housing" disposition scenario. Council indicated a preference to further refine the MOU and the associated recitals before a final signature and asked to see the proposed RFP and selection process that would guide conveyance to a nonprofit partner if the city proceeds with a competitive selection.
