By JIM SMILIE
After electing At-Large Councilman Jim Villard as council president and District 4 Councilwoman Lizzie Felter as vice president, a divided Alexandria City Council ultimately decided to follow the advice of Mayor Jacques Roy’s administration and legal team and opted not to move forward with a proposal to work with a Monroe-based company to build a $16.5 million, 64-unit affordable housing complex on South MacArthur Drive.
“The city just lost a $16.5 million hurricane and flood-resistant facility with community-wide wifi and a tele-med suite, that would have provided $25 million in economic impact and met the needs of residents for decades because they are afraid to spend money” said Jeff Glover of MGM Development after the meeting. “They lost the opportunity to meet the needs in an under-served area because of fear.”
A request for comment from Mayor Roy was not responded to as of publication deadline.
City officials have been working with MGM Development regarding construction of a new housing complex at 4761 South MacArthur Drive for nearly a year. Glover, a graduate of Louisiana College (now Louisiana Christian University), has invested in building multi-family housing facilities across the state and recently completed a gated senior citizen community on England Drive in Alexandria.
When the item came up for final approval, Villard said the administration requested that the council remove the item from the agenda. No council member offered a motion to remove the item, so the council moved forward.
Attorney Trey Gist explained to the council members that under the proposed ordinance the city would receive an interest-free loan of $1.2 million from the federal government, which it would then loan to MGM for the project. The loan would need to be paid back over a 30-year period, and the city would be responsible for monitoring the project for 20 years. If for any reason the project fell through or the owner became in default on the loan, the city would be responsible for repaying the $1.2 million from the city’s General Fund. Gist also noted that the city would not be the primary mortgage holder, further increasing the risk to the city.
In addition, he said officials learned late last week that the city would be required to provide a 12.5 percent match, which comes to $150,000. “If we move forward, we are looking at some long-term obligations,” Gist told the council. “And it has to come from the General Fund – no federal dollars can be used if we have to repay the $1.2 million.”
Gist also noted the city is already facing the potential to have to repay funds on a defaulted loan. He said owners of the Bethel Apartments are currently in default on their loan and the city has been told it must repay an $800,000 loan.
After hearing Gist’s explanation of the administration’s concerns, Glover told the council members, “this reminds me of reading the side effects of my medication – this may happen.” He then went on to say his company has a solid history of success and a substantial balance sheet that proves the company has the resources to ensure the project is successfully completed and the loan would get repaid.
He also noted millions has already been arranged in financing for the project and that “this is literally the last step in the puzzle.” Glover noted a Letter of Intent from the city was used to help secure funding for the project, and that a decision now not to proceed could have “long-term consequences,” making investors hesitant to support projects in Alexandria.
Regarding the need for a $150,000 match, Glover said he learned of that requirement at 3 p.m. last Friday and that since then his team has identified $123,500 in funds and credits that can be applied to that requirement, reducing the expense to the city to $26,500.
Glover also stressed the revenue to the city that would be generated from the 64-unit complex, including roughly $40,000 per year in property tax and an estimated $100,000 annually in utility revenue. “So, for roughly $26,000 you get a 64-unit development and all the utility revenue and the property tax revenue. The payback is fast,” he said. He also estimated the project would generate 300 construction jobs over the 16-month construction period and the city would get sales tax revenues from workers as well as the purchase of building materials.
A number of council members spoke in favor of the project despite the risks. District 3 Councilwoman Cynthia Perry, who represents the district where the complex was planned, urged support for the project. “Housing is needed. I’m for the project. I know in my district, and Mr. Johnson’s district, we see a lot of people living in homes that aren’t livable.”
District 2 Councilman Gary Johnson agreed, adding, “Anything we do is a risk. We need housing.”
Villard asked about rental rates. Glover said a few units would be priced at $200-$300 per month for handicap use. The majority of units would be in the $600-$800 range with the highest rate at $900-to $1,000 per month. He noted all units will be “certified green” and will have wifi and all appliances. He also said he was prepared to break ground as early as next month with estimated completion in early 2025.
At-Large Councilman Lee Rubin said he initially supported the project but changed his mind over the concerns raised by the administration. “I was all in favor, but the devil is in the details,” he said. “All I can do is go by the recommendation of 4-5 city attorneys. I’m just worried about the details. I wish we had more time to talk about it.”
In public comment, Stephen “Uncle Willie” Chark urged council members to vote in favor of the project. “We have an issue in the City of Alexandria as far as affordable housing,” he said. “If you live in District 4 or 5 you may not know that. I urge you to vote in favor.”
When the vote was called, council members Felter, Fowler and Rubin voted against the proposal while council members Johnson, Perry and Washington voted in favor. President Villard abstained, leaving a 3-3 tie. Per council rules, items must receive at least four votes to pass, so the motion failed.
The vote for council leadership at the start of the meeting followed similar lines. Councilman Villard, along with outgoing Vice President Washington were each nominated for council president. Villard won getting votes from himself along with Felter, Fowler and Rubin while Johnson, Perry and Washington supported Washington.
In the election for vice president, the nominees were councilwomen Felter and Perry. The votes were the same as in the president’s election, with Fowler, Rubin and Villard supporting Felter and Johnson and Washington voting for Perry.
Following the election, Perry congratulated the winners and then asked why the council members did not think she was qualified to be vice president. “Nobody said you weren’t qualified,” replied Fowler. Perry then asked him why he didn’t vote for her to which he replied, “she asked first,” referring to Felter. Rubin added he also had promised to support Felter for vice president before he learned Perry would be nominated.
In other business, the council voted to make Dec. 26, 2023 as well as Jan. 2, 2024 city holidays. They also voted to cancel the council meeting scheduled for Dec. 26, making this the final scheduled meeting of the year. The next scheduled meeting of the council will be at 5 p.m. January 9.