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VIRGINIA BEACH — A proposed housing development in the southern part of the city that has dragged on for years is now asking Virginia Beach for another concession to bring the project to fruition.
Vanguard Landing, a nonprofit organization that plans to build housing for people with intellectual disabilities in Princess Anne, is still waiting for a final site plan approval from the city.
But it’s asking the city’s Development Authority to give the charity a $1.4 million discount on a loan tied to the project — or for more time in paying the full loan back.
“Time is of the essence,” said Vanguard Landing’s attorney John Faber. “We are now closer than Vanguard Landing has ever been to vertical construction on this property.”
The authority loaned Vanguard Landing $2.9 million, with zero interest, in 2014 to kickstart the project. Now, the nonprofit wants to either pay the loan back at the steep discount or convince the authority to get in line behind another lender.
At the authority’s meeting Tuesday, members agreed they need time to review Vanguard Landing proposals. In the meantime, the authority extended the deadline on the loan — which was set to expire at the end of this year — to March 31.
In 2014, the city gave Vanguard Landing eight years to raise money before it would be expected to begin repaying the authority’s loan.
However, in the spring 2022, City Auditor Lyndon Remias discovered that Vanguard Landing had defaulted on the terms of the loan, which included beginning construction in 2019.
Some factors, though, were outside of the development group’s control. Changes to the city’s stormwater regulations and the pandemic affected the project’s timeline, according to the city.
The authority had extended the terms of the loan in June 2021 for 12 months. It also eliminated a requirement to start construction, but forced Vanguard Landing to repay the authority $500,000 within 60 days, which it did. The rest of the money was to be returned when the nonprofit secured a construction loan from Virginia Housing, formerly known as the Virginia Housing Development Authority. The deadline for repayment was extended again last summer for six months.
Vanguard Landing Executive Director Debra Dear, who attended Tuesday’s meeting, envisioned creating a $40 million residential community for 185 people — 18 and older — with intellectual disabilities. The plans include cottages, rowhouses, a sportsplex, an event center and other buildings on 75 acres near Princess Anne and Sandbridge roads.
Vanguard Landing had $230,000 in revenue and $226,000 in expenses in 2020, according to the most recent financial documents available that are submitted to the federal government. Dear earned $76,000 in salary that year, the records show.
At Tuesday’s meeting, Faber asked the Development Authority to consider a discounted payback of $1.5 million on the $2.9 million loan.
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If the authority won’t accept the discount, Faber requested that the authority subordinate its loan to Virginia Housing, a not-for-profit organization that helps finance affordable housing projects. Faber said Virginia Housing has agreed to loan Vanguard Landing the money it needs to break ground as soon as Virginia Beach approves its final site plan.
“I hope it comes through,” said Remias, who attended the meeting. “Regardless of the type of funding going forward, we just need to make sure we make decisions that are in the best interest of the taxpayers.”
Some advocates for people with disabilities have urged the authority to cut ties with the project because it goes against widely supported recommendations to house people with disabilities within integrated communities close to resources and public transportation, The Virginian-Pilot has reported.
However, the authority recently received numerous letters in support of the project, and several speakers at Tuesday’s meeting voiced their desire to see it built.
Now, authority members have a homework assignment over Christmas break. Chair Lisa Murphy said they will expedite their deliberations, and return in January with a decision, so as not to delay the project any further.
“We’re certainly not going to pull the plug now on the project,” Murphy said. “Ninety days gives us the opportunity to explore these different options.”
Stacy Parker, 757-222-5125, stacy.parker@pilotonline.com