By Emma Deihle

The dream of an energy-efficient, affordable new neighborhood with scenic country views will have to find another dreamer.

Lexington is looking to sell the 14 remaining Thompson’s Knoll lots to a private developer after years of failing to secure qualified buyers for the housing project.

At its Aug. 20 meeting, the city council voted to have City Manager Noah Simon negotiate reimbursement terms for the $700,000 federal community block grant the city received in 2011 from the state Department of Housing and Community Development (DHCD) to fund land acquisition and infrastructure.

At the city council meeting on Nov. 5, Thursday, the re-negotiation of the grant is to be discussed in executive session.

Simon will also request permission from the DHCD to auction off the undeveloped land.

Thompson’s Knoll grew out of a public-private partnership among three entities:

  •      Rockbridge Area Habitat for Humanity,
  •      Threshold, the city’s housing board, and
  •      Thompson’s Knoll Partners, LLC, the private sector developer
Lexington is seeking to sell the remaining lots after money got tight and time ran out.

The partners were tasked with developing 20 lots on the 4.4-acre site with affordability and sustainability in mind.

The city originally was given two years to complete the project and received one extension. Even with the extra time, it will not meet the modified deadline of Dec. 31 this year.

Habitat for Humanity committed to building at least four houses and did so. Three of the properties have sold and the fourth will close within the next two weeks.

Architect Heidi Schweizer of Thompson’s Knoll Partners, LLC, built and sold one EarthCraft certified home and her partner MaxMark Homes is finishing construction on another.

Threshold has not found anyone interested in purchasing the four lots it was supposed to develop.

Simon has been authorized to inform the DHCD of the city’s intent to repay the grant and to pursue the private sale of the unoccupied property. Though Lexington put forth $480,000 to the development, all money from the sale would be used to pay off the grant.

Simon’s goal is to reach a cost-effective, pro-rated reimbursement plan based on the number of houses that have been constructed among other things. Lexington Housing Coordinator Joan Neel confirmed the city manager’s office is still in talks with the DHCD and all proposed changes to the agreement remain under review.

Now that the city has decided to vacate the agreement, the involved parties are reflecting on why the housing program was not as successful as predicted.

Schweizer thinks a combination of high city property taxes and timing had a lot to do with it. The endeavor launched in 2011 as the economy was turning down following the collapse of bad housing mortgages that hit in late 2008.

This homeowner was qualified but the city saw a lack of qualified applicants for other homes in Thompson’s Knoll.

“As people were losing their jobs and things were getting tighter and tighter,” she said, “people were compromising their credit because times got really hard.”

Neel said bad credit disqualified most applicants for Thompson’s Knoll housing and mortgage loans.

“People are ill-informed when it comes to credit issues,” she said.

In her 20-year career, Neel said she has seen only one client follow through on a credit improvement plan. But she acknowledged how daunting the process can be.

“It’s hard for people who don’t see the light at the end of the tunnel to stay encouraged.”

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