By Kate Keeley
Echelon Resources, Inc., which says it was hurt by higher interest rates and construction costs, has ditched plans to build apartments on two Lexington sites.
Instead, Lexington City Council is considering plans to build and sell condos and townhouses on the former Virginia Department of Transportation site.
This decision came after the council rejected Echelon’s request for a tax break for 62 rental units on Spotswood Drive and about 200 more on the VDOT site on Waddell Street.
The city council will consider proposals from other developers for the VDOT site and should reach a decision by the end of the year.
“We have determined that we would be well served as a city to see if there’s any other developer who would be interested in exploring a different housing” plan, City Manager Tom Carroll told the council members.
Council Member Leslie Straughan said the city needs both the taxes and housing from new developments.
“Whoever owns it, whether it’s individuals or one company like with multi-family housing, most likely personal property tax will be paid. If it’s used for housing, people will have to register their cars and pay that tax,” she said. “And it would be an increase in water users.”
The city lacks many rentals at any price. Only two Lexington apartments are listed for rent on Zillow. One costs $650 per month, while the other is priced at $1,500 per month.
Echelon’s plans would have provided more affordable housing for residents. Around 20% of the units at both sites were expected to be rented for lower than the market rate. Echelon did not respond to phone calls or emails for comment.
The potential switch to selling instead of leasing units means there would be no new rentals, and no guaranteed affordable housing.
“Echelon did commit to a minimum percentage of the apartments to be priced affordably for development at the old VDOT property but there are no such guarantees with a new developer,” said Arne Glaeser, Lexington’s director of planning and development.
Developers could be encouraged to build, thanks to the Federal Reserve’s recent cut in interest rates.
This is not the first time plans have dropped for the 2.3-acre property across from Oak Grove Cemetery. Development of the property has been a topic of discussion at City Council meetings for more than a decade. Previous proposals for the site included cottages and a public park.