By Ruby Gregg
The developer of the proposed Spotswood Drive apartments wants Lexington City Council to cut the property’s real estate taxes in half over the next 15 years.
At tonight’s meeting, council will consider the request from Edwin Gaskin, owner of Richmond-based Echelon Resources, who plans to build 65 apartments on 2.3 acres on Spotswood Drive. In an email to council, he said he needs the tax break because of increases in construction costs.
In a report for council, City Manager Jim Halasz recommended approval, saying the city would still collect a little more than $2 million over 20 years.
“He basically said that’s what he needs to make this deal work,” City Council Member Leslie Straughan said.
“Unfortunately, current economic conditions continue to pose challenges for these types of projects,” Gaskin wrote to council. “As a result, it has been challenging to identify viable sources of conventional financing that would provide a feasible path forward for the Spotswood project.”
Halasz, in his report, said city council had anticipated collecting more in taxes when it approved the project. “However, that review and approval was several years ago, and economic conditions have changed dramatically since then.”
Gaskin is also seeking a low-interest loan from Virginia Housing, a nonprofit agency created by the General Assembly to provide mortgages to first-time homebuyers and developers of rental housing.
“As of now, we see Virginia Housing as the only option that will move this project forward over the next 12-18 months,” Gaskin told council in an email.
Halasz said Virginia Housing doesn’t specify how much local governments should help developers as a condition of approving a loan. “But since we, as the city, are getting the benefits of it, they expect us to also participate financially in some fashion,” he said in an interview.
If Gaskin’s request is approved, the city would receive $2,083,000, according to the project’s cost benefit analysis created by Halasz.
“He basically said that’s what he needs to make this deal work,” City Council Member Leslie Straughan said in an interview. “That doesn’t necessarily mean that the city’s willing to give that much.”
The 65-unit apartment complex was approved by city council in July 2022.
Straughan said construction could begin within a year if Echelon gets a loan from Virginia Housing. If not, Echelon would postpone construction in hopes that interest rates would decrease, she said.
The development’s contract does not require construction to begin until November 2026.
“With interest rates, Echelon wants to push it as far out to see if things improve,” Straughan said. “It could be as long as three years.”
Details and background of the Spotswood development
Lexington officials approved the Spotswood development because it would add much-needed rentals for low-income residents and other people who earn more.
Houses in the city are often large—and expensive.
“If you want a 3,000 square-foot house … oftentimes, they’ve been available,” Halasz said. “If you want 1,800 to 2,000 square feet, it’s not even here. You can’t find it.”
Straughan said developing the Spotswood Drive property has been a part of the city’s Comprehensive Plan for the last 20 years. She said she believes the public supports the development.
“It is hard to move or find some transitional housing right now,” she said. “People know there’s a need for housing.”
The majority of the Spotswood units would be sold at market rate, Halasz said. But the price of the units available for residents earning 80% or below the area median income (AMI) would be less.
“Housing is in really short supply here, especially housing that’s reasonable,” Halasz said. “We really need the housing.”