UPDATED: Former school property eyed for apartments in Hampton Roads
A Virginia Beach real estate group with multiple deals in the pipeline has another apartment community in the works that aims in part to provide housing for local teachers.
The Franklin Johnston Group plans to develop Renaissance Apartments at 273 N. Witchduck Road in Virginia Beach. The Virginia Beach real estate firm plans to build a 240-unit apartment community with a mix of low-income and market-rate workforce housing. The community will have one-, two- and three-bedroom units.
Franklin Johnston bought in April the 10.6-acre parcel on North Witchduck Road for $4.5 million from the Virginia Beach School Board, says Tom Johnston, Franklin Johnston’s chief development officer. The property was most recently assessed by the city at $3.6 million, according to online records.
Franklin Johnston has lined up financing for Renaissance Apartments through the Virginia Housing Development Authority. Maryln Development Corporation is the general contractor. Cox, Kliewer & Company P.C. is the architect.
Development of Renaissance apartments will be done in three phases. In addition to the apartments plans call for a clubhouse, swimming pool and playground.
The first phase includes 96 units financed with taxable bonds and a 9% low-income housing tax credit. Incomes for tenants at these units will range between 40% and 80% of the area median income, Johnston says. The median househould income of Virginia Beach is $70,500, according to U.S. Census data. Rents will range from $480 a month to $1,300.
The second 96-unit phase will be financed with tax-exempt bonds, a 4% low-income housing tax credit and the Resources Enabling Affordable Community Housing (REACH) program. REACH is a VHDA program designed to address permanent mortgage financing for a variety of rental housing opportunities and provides financing at below market interest rate.
Franklin Johnston has secured a $9.3 million construction loan from VHDA to finance the second phase of Renaissance Apartments. The 30-year loan has an interest rate of 5.25% on $2.2 million and a 2.95% interest rate on $7.1 million. Tenants for the second phase apartments will have 60% of the median area income and range in rents from $760 to $1,025 a month.
The third phase for Renaissance Apartments calls for 48 workforce market-rate units that would also be VHDA-financed. Johnston says these units will rent for between $1,100 and $1,300.
Johnston says the structure of Renaissance Apartments was driven in part by the desire of Virginia Beach city and school officials for there to be housing for new teachers. Johnston says it’s not possible to discriminate so only teachers can rent certain units but Franklin Johnston can alert the school division when units become available. In addition, VHDA strongly encourages mixed-income communities, Johnston says.
Johnston says construction on Renaissance Apartments will start by the end of May and wrap up in 2020. He says there is a lack of supply of workforce and low-income housing particularly in Virginia Beach and Northern Virginia because of high land values.
Elsewhere in Virginia Beach, Franklin Johnston is developing a similar 240-unit apartment community nearby the Renaissance Apartments site called 200 West. It will open in the summer at the corner of Price and Mac streets. The firm is also breaking ground in June on a 245-unit market-rate apartment community called Coastal 61 near Virginia Wesleyan University that will have rents that run from $1,200 to $1,700 a month.
Virginia Beach School Board Chairwoman Beverly M. Anderson says the North Witchduck Road parcel was property that the school division was not using. Money from the sale went into the school division’s capital improvement plan, Anderson says.
Tony Arnold, executive director of facilities services for Virginia Beach’s schools, says the property was previously part of a larger tract that once housed a number of facilities. The property was part of the site of the Princess Anne County Training School, a school established by the African-American community in 1930s in response to segregation.
Cushman & Wakefield | Thalhimer’s Robert M. Thornton represented Renaissance Apts. I L.P. in the sale of the property.