City of Alexandria, Virginia
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MEMORANDUM
DATE: MARCH 19, 2026
TO: THE HONORABLE MAYOR AND MEMBERS OF CITY COUNCIL
THROUGH: JAMES F. PARAJON, CITY MANAGER
FROM: HELEN MCILVAINE, DIRECTOR, OFFICE OF HOUSING
DOCKET TITLE:
TITLE
Consideration of a Resolution to provide a Housing Opportunities Fund Loan of Up to $4 Million to Housing Alexandria to Facilitate Construction of the Naja Building
BODY
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ISSUE: Request for a City Housing Opportunities Fund (HOF) loan of up to $4 Million to Housing Alexandria (HALX) to Facilitate Funding for construction of the Naja building, the final phase of the Glebe-Mount Vernon Development in Arlandria (Attachment 1).
RECOMMENDATION: That Council approve a Resolution (Attachment 4) to provide the final installment of the planned City funding package for Building Two of the Glebe-Mount Vernon development redevelopment and authorize the City Manager to execute all documents necessary to implement the HOF loan.
BACKGROUND: Housing Alexandria (HALX) is actively implementing the multi-phase redevelopment on land it assembled at the intersection of Mount Vernon Avenue and Glebe Road. When complete the 3.2-acre site will offer 495 affordable rental units and more than 20,000 square feet of community-serving commercial space, including city flex space to be delivered later this year as part of Phase I. Both the Sanse and Naja buildings are located on a platform above the underground parking garage that will serve residents and other building users.
The project started in October 2024 with significant infrastructure upgrades and site consolidation efforts to modernize utilities and enable higher-density affordable housing and other future development in the area. In addition to predevelopment loans, prior Council actions in 2022, 2023 and 2024 included development approvals and multi-year funding commitments related to land acquisition, infrastructure work, and ultimately construction of Building One (The Sansé Apartments), as well as to induce tax credits, ARPA monies, Department of Health and Community Development and Virginia Housing grants, Virginia Housing bonds, Amazon Housing Equity Funds, federal earmarks, and many other sources. In December 2025, Council authorized provision of a city guaranty to back stop a letter of credit (to be funded with already-approved FY 2027 monies on July 1), to induce Virginia Housing bond financing. Sanse will deliver 416 affordable units this year, with marketing and lease up of the first phase beginning this Spring pursuant to an anti-displacement policy developed to help qualified Arlandria residents remain in their neighborhood.
Building Two (Naja Apartments) will deliver 79 affordable rental units and approximately 15,750 square feet of first floor commercial space along Mount Vernon Avenue. The majority of the space will be used by Neighborhood Health for operation as a clinic. It is noted that the original concept for Naja proposed 58 for-sale affordable condominium units and a two-story commercial use component, however, current market conditions do not support those uses. In response, HALX, in consultation with Arlandria community members and with the support of the Department of Planning and Zoning, now proposes a larger rental project, within the original building footprint. Across the development, all units will be affordable at or below 80% of Area Median Income, with more than 75% at or below 60% AMI and approximately 25% at or below 40% AMI. More than half of the units are two- and three-bedroom family-sized apartments (Attachment 3).
Council has approved approximately $79.7 million in funding support to date, and the project is both on schedule and on budget. At $4 million, the pending request is consistent with the funding plan presented by HALX in 2022 and represents the final installment of City funding. The full package for Naja also includes a $5.3 million HUD Section 108 CDBG loan with repayment guaranteed by the City. HALX will share proceeds from the developer fees it earns to help the City with loan repayment until project cash flow is sufficient to carry the loan in the future.
DISCUSSION: The Glebe-Mount Vernon development is the City’s most substantial project to date and represents its most significant affordable housing investment. Identified by Council as Alexandria’s highest housing priority, the project advances the City’s housing goals and helps implement recommendations of the Arlandria-Chirilagua Small Area Plan by delivering deeply affordable housing at scale and activating the Mount Vernon corridor with neighborhood-serving uses.
The development’s financing strategy was intentionally structured to leverage multiple Low-Income Housing Tax Credit (LIHTC) allocation rounds and a range of layered financing. Building One will be delivered in phases this year and the city flex space once planned to be part of Building Two, is now part of Sanse. Besides offering flex space for multiple departments active in the neighborhood (e.g., Housing, DCHS, Health, RPCA, and others), the space will be used outside of regular business hours for community meetings and youth recreational activities, which were both identified as very high needs during Small Area Plan engagements in 2020-21. An ALIVE! Food Hub will be located in Sanse, as well.
Building Two (Naja) is dependent upon a 4% low-income housing tax credit (LIHTC) allocation in 2026, Virginia Housing Trust Fund resources and related financing, first trust debt supported by residential and commercial income, the CDBG loan, and this final HOF gap loan. Making the commitment now will enable the general contractor to remain onsite with the project proceeding this year. Building on this timeline, substantial completion is anticipated in late 2027 with occupancy in early 2028.
It is noted that Housing Alexandria recently learned that a round of State Housing Tax Credits has been opened. HALX plans to apply for credits. If they are successful the amount of proposed City loan support will remain at $4 million, however these additional credits may reduce the amount of the Section 108 loan needed for the project. A separate docket item will be considered by council regarding rental subsidy.
The Alexandria Housing Affordability Advisory Committee (AHAAC) considered the project at its March 5 meeting and recommends Council approve the loan as requested. AHAAC’s Investment Subcommittee met on March 3, 2026 to review the progress of the project and the proposed funding request and proforma. Investment Subcommittee members helped guide AHAAC’s discussion at the March 5 meeting.
Going forward approval of City Housing loans will be memorialized through a City Council Resolution.
FISCAL IMPACT: Up to $4 million in Housing Opportunities Fund resources, including FY 2027-28 funds already programmed for the project, will be committed to complete Building Two (Naja Apartments).
ATTACHMENTS:
1. HALX Request for City HOF Funding
2. Project Description
3. HALX Presentation to AHAAC Investment Committee and AHAAC
4. Resolution to provide a Housing Opportunities Fund Loan of Up to $4 Million to Housing Alexandria
STAFF:
Emily A. Baker, Deputy City Manager
Christina Zechman-Brown, City Attorney
Aspasia Xypolia, Deputy Director, Housing
Tamara Jovovic, Housing Program Manager, Housing
Kenneth Turscak, Urban Planner III, Planning & Zoning