Waynesboro: Attorney backs off threat to sue over affordable-housing grant

A retired local attorney has backed off her threat to sue the City of Waynesboro over a $500,000 grant for an affordable-housing project that was approved by Waynesboro City Council last week.

“I informed the City Council today that I will not challenge the City’s donation to the Alston project in any court or other forum,” Mary McDermott wrote in a comment on our AFP website on Monday.

City Council voted 5-0 on April 13 to approve a resolution authorizing the $500,000 grant to the $36 million project being led by Enterprise Community Development, a subsidiary of the Columbia, Md.,-based nonprofit Enterprise Community Partners.

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The city grant is meant to help ECD meet a $750,000 budget shortfall that the developer fears could delay the project, with construction slated to begin in the third quarter of the current year.

The project is leveraging private financing and local, state and federal grants to build 96 housing units – all 96 going to households at or below 80 percent of the area’s annual median household income.

Enterprise Community Development was approved for a $4.4 million loan for the 1030 Alston Court project from the Affordable and Special Needs Housing program, administered by the Virginia Department of Housing and Community Development, in December.

The Alston Court project also received a $560,000 grant in July that will be administered through the Central Shenandoah Planning District Commission.

Del. Ellen McLaughlin, a Waynesboro Republican who represents the local area in the House of Delegates, submitted a budget amendment earlier this year to fund a $750,000 state grant to 1030 Alston Court.

The $750,000 figure is what ECD has identified as a funding gap that needs to be closed, citing:

• a freeze in federal Greenhouse Gas Reduction Funds.
• new federal Build America Buy America requirements that require sourcing construction materials domestically as a condition of the project receiving state funds through the Affordable and Special Needs Housing

An aide in McLaughlin’s office told me that the delegate is hopeful that the amendment will make it into the final two-year state budget.

Legislators are due back in Richmond this week to try to wrap things up on the budget.

Should that money be approved at the state level, that will factor in to what the city does going forward with the grant that City Council approved last week, according to City Manager Mike Hamp.

“One contingency will be what if other funding sources, including the one you reference, materialize,” Hamp wrote to me by email.