Royal Arms Apartments redevelopment plan would not displace residents

‘It pays to care – the better you treat residents the better they take care of the property,’ CPP-Housing Vice President Seth Gellis said of his company’s rental property business model. Project Manager John Frazer is partially obscured, seated to Gellis’s right. Photos/Roger Bianchini

Following an early-morning public hearing at which two representatives of a nationwide affordable housing redevelopment company pitched their plan to purchase and upgrade The Royal Arms Apartments on Criser Road, the Front Royal-Warren County Economic Development Authority unanimously authorized a resolution in support of issuance of a revenue bond of “up to $17 million” for the project.

CPP-Housing Senior Project Manager John Fraser explained the company’s plan to upgrade the 144-unit complex, including an existing outdoor pool, but keep it affordable for the existing residents.  The goal is for there to be no displacement of tenants during the project, Frazer told the EDA board.

Improvements would include replacement of the HVAC system and water heaters, as well as internal fixes to apartments including counters and other amenities, site improvements to the parking lot and pool, and restoration of drainage lines.

“With residents in?” EDA board Chairman Gray Blanton asked.

“It’s not easy but it is possible – it’s a sequencing art,” Frazer replied.

The entrance to Royal Arms Apartments

Frazer added that the project’s “main goal” was “to preserve and extend” the lower income, affordable housing aspect of the development over an anticipated 40 to 50-year life of the existing buildings.  Frazer said his company projects additional renovation work on an approximate 15-year cycle.  Responding to a question, Frazer said the plan was to maintain federal “Section 8” housing assistance parameters.

“We are a for-profit but mission-based company,” CPP-Housing Vice President Seth Gellis told the EDA.  His company, with a home office in Irvine, California, and an “Eastern Division” headquarters in Reston, Virginia, is a subsidiary of WNC, described on its website as “a leading provider of investment, asset management and development services to a wide array of partners.”

One of four, three-story buildings totaling 144 units at Royal Arms.

Those partners range “from for-profit and nonprofit developers and property owners to the nation’s largest corporations and financial institutions” according to the WNC website.  WNC is described as “a family-owned business for more than 47 years” which has “acquired more than 1,375 properties representing $9.3 billion in assets” since its 1971 inception.

“Our success is built on enduring partnerships with our developers and investors. We’ve earned their trust, which is why they choose to work with us time and time again,” WNC states.

CPP-Housing’s website includes glowing reviews for its business approach and results:

“CPP brings a creative and sophisticated approach to acquiring and developing low income multifamily communities. Citi values their relationship with CPP because they are true professionals and have always performed as advertised,” Citi Community Capital Managing Director Mike Hemmings is quoted on the site;

“My apartment looks amazing! I now can invite my family and friends over and not be embarrassed of my home. The morale is higher than it’s ever been.  My neighbors now have a new sense of pride and are coming together,” Cunningham Village resident Jennifer Brown reports.

CPP’s Monte Vista Gardens project in San Jose, California – from CPP website

Of its “mission-based” business model, Gellis told the EDA, “It pays to care – the better you treat residents, the better they take care of the property.”

As with the Valley Health revenue bond, no liability for payment of the bond is incurred by the EDA or either involved municipality or member thereof.  The bond issue is to a subsidiary entity “Royal Arms Community Partners LP” whose address is CPP’s Irvine, California address.

Gellis explained his company’s desire for the revenue bond issued through the local EDA as a means to access federal and state tax credit programs from its resulting work.

Royal Arms pool facility is also earmarked for improvements.