Henrico takes first step to fixing troubled apartment community (2024)

Later this month, something out of the ordinary for Richmond-area real estate will happen: a partly uninhabitable, nearly 80-year-old apartment community on 32 acres will change hands, with the help of a loan from Henrico County.

It will mark the start of the county’s efforts to do something for some of its most vulnerable residents — including the 106 kids at Glen Lea Elementary School, whose chronic asthma and respiratory illnesses, linked to the mold and vermin infestations at the Glenwood Farms apartments, alarmed Supervisor Roscoe D. Cooper when he was serving on the School Board.

“A lot of people were there. They’re not there under their own volition, right? It’s because I don’t have anywhere else that I can probably afford, or this is the only place I can find,” Cooper said.

“The question you asked was would you want to live in these conditions; what do you want your parents or your child to live in?”

County building inspectors asked just that.

And when they went to look, they found more than 2,200 violations of the building and property maintenance code over a six-year period — violations ranging from toilet water leaking through kitchen ceilings to sewage spills on the grounds to dangling live wires to gas water heaters that weren’t properly vented and could emit toxic fumes to collapsed floors because the wood framing underneath had rotted.

But despite hundreds of trips to court, little was ever fixed. Finally, in November, the lender that had refinanced a New Jersey real estate operation’s 2018 purchase and the county convinced a circuit court judge to order the complex into receivership.

“As we were going through and seeing more and more violations, we were also on the policy side thinking what can we do?” County Manager John Vithoulkas said.

“So we knocked on a lot of doors, had a lot of conversations with state officials, some foundations and, ultimately, we realized that if we were going to succeed, we were going to have to take the point on this.”

That meant finding a developer that wanted to tackle the challenge of addressing the conditions that the roughly 115 families living there were dealing with.

One incentive was Glenwood’s location and that there was a lot of land available — Glenwood’s 294 units, more than half of them empty because they are uninhabitable, are very spread out. Also, the complex is bordered by two busy eastern Henrico arteries — Laburnum Avenue and Harvie Road and is only a few blocks from Mechanicsville Turnpike.

To county planners, it looked like a good location for the kind of mixed-use development that could provide affordable housing to more people than Glenwood ever did, without displacing current tenants or jacking up rents.

The site and its potential looked that way, too, to the two Richmond developers — Spy Rock Real Estate and Crescent Development — that earlier this year teamed up to replace an abandoned Henrico motel on Chamberlayne Avenue with a 186-unit, solar-powered apartment complex for people earning well under the area’s average income.

“We’ve bought properties that are in physical and operational distress from receivership before; we know what’s involved,” said Andrew Basham, co-founder of Spy Rock. “We do affordable housing — we’re comfortable with that.

“There’s demand for affordable housing, and for housing for county workers,” Basham said. “This is a chance to create a new community in a thoughtful way.”

Still, redeveloping a site in the kind of shape Glenwood is in is a heavy lift.

Vithoulkas and his team thought using the county’s existing economic development tools and looking at a crying need for affordable housing in the county, meant looking at Glenwood as an economic development project might be an option.

The county’s Board of Supervisors easily agreed.

They knew about those thousands of code violations, and they were frustrated that court actions and fines did not change things. After touring the complex, they voted in 2021 to approve a special rental inspection district covering Glenwood — a step that enhances county officials’ authority to inspect property but that many Virginia localities balk at.

And they had in recent years gone through a long battle over another troubled complex, Essex Village, where they had argued with a developer and the U.S. Department of Housing and Urban Development over the need for major improvements — and in the course of that discovered a tool few others use to make improvements happen.

HUD’s rental voucher program subsidizes rent for low-income families so that landlords renting to them receive a market rate. Landlords wanting access to the voucher program need a sign-off from county or city officials.

Henrico told Essex Village’s owners if they wanted that sign-off, they needed to sign an agreement to improve the units and maintain the complex. The county has now signed similar agreements with owners of some 20% of apartment units in Henrico, Vithoulkas said.

For Glenwood, what the supervisors approved was a commitment of $4.5 million, to be matched by an additional $4.5 million from the Economic Development Authority as a short-term loan to help Spy Rock and Crescent buy the property. That purchase is slated for later this month.

“The developer will repay us with interest,” Vithoulkas said

The county also agreed to provide $2 million to help with demolition of the apartments, as well as for urgent repairs to apartments where current tenants will be living for a short time until they can move to new homes.

County officials are pressing federal and state agencies, as well as foundations, to step in with funds to ensure that when Glenwood tenants do move, they will not be landed with rent payments higher than what they now pay. As a backstop to those efforts, the county is setting aside $3 million for this rental support.

“I want to make sure that people have safe housing, and that we don’t displace and there’s a plan for that,” Vithoulkas said.

“We want to ensure that right now, if someone is paying $800 in rent, and the rent goes up to $1,200, that what they pay is what they can afford,” said Vithoulkas, adding that solutions could include rent vouchers or resources from the foundations.

“(The county will) be the backstop, because you can’t get all the way here and then fumble, if you will, on the one-yard line and say okay, well, I’m sorry. You know, go live somewhere else.”

The county has also committed to much the same kind of things local governments routinely do when a new industry comes to town. In this case, Henrico will undertake the multimillion-dollar task of replacing a half-century-old sewer system and street repairs.

The next step is to build some 800 to 900 new homes and, to help make that happen, Henrico is trying the same approach it used to redevelop the Regency Square mall.

The idea is to take advantage of the increased value of the property as new homes and commercial facilities are built. That will mean additional taxes — currently, the property should be paying just under $84,000 a year, based on its latest assessed value. Over the next 15 years, the additional taxes that come with new buildings will be dedicated to help finance the redevelopment: that stream of money will allow the developer to raise some of the upfront lump sum needed to get going.

After 15 years, those taxes flow directly into the county coffers.

The end result will be a community where the roughly 115 families trying to cope with Glenwood’s current challenges will have a new home at a rent they can afford.

Plus, the county will achieve its aim of a collection of town homes and apartments that planners call “workforce housing” — that is, homes that do not price out county employees like teachers, police officers and firefighters.

There will be senior housing, too — affordable places for aging residents are a growing concern of city and county officials across the Richmond region.

Construction should be underway next year, Vithoulkas said.

“When we went into this, we had no idea this is how it was going to end up,” he said. “We just knew we were going to work the problem.”