HRHA approves financing resolutions for Bluestone Town Center; board flagged guarantee risks

The Harrisonburg Housing Authority approved resolutions Aug. 20 authorizing construction and permanent financing steps for the Bluestone Town Center development but emphasized the financial responsibilities the agency will assume.

Michael (S3) outlined the financing plan: construction infrastructure financing already exists from United Bank, and the board was asked to approve a permanent financing arrangement using Atlantic Union Bank for the senior housing portion and authorization to sign instruments for an estimated $4 million erosion-and-sediment/land disturbance bond. "We have, owner financing on the property too and then that would also pay off some of the National Housing Trust monies," S3 said as he summarized the capital stack for the project.

Board members discussed the implications of greater HRHA ownership and co-guarantees. One commissioner said Equity Plus has not performed as strongly as hoped, and members emphasized that, while they feel the need for these units, greater guarantees increase HRHA's exposure. S3 said the proposed ownership structure would be 51/49 and staff expects HRHA to play the lead on management responsibilities if it takes ownership of the senior and multifamily components.

The resolution to enter the loan transaction and sign the associated documents passed after a motion from S1 and second from S4; a roll call recorded affirmative votes with some absences. Staff said closing is targeted for September or early October to preserve tax credit awards and move to Phase 1 site construction.