Fannie Mae Lender Letter Issues New Rules Regarding Condominiums With Deferred Maintenance

 

In direct response to the tragic collapse of the Champlain South Tower Condominium in Surfside, Florida, Fannie Mae issued Lender Letter 2021-14. As of January 1, 2022, Fannie Mae’s new rules regarding the structural integrity of condominiums provide that Fannie Mae will not purchase loans for units in condominiums that have significant deferred maintenance or unsafe conditions. While the requirements set forth in the Lender Letter are styled as “temporary,” they are effective as of January 1, 2022 and “until further notice.”

Specifically, loans secured by units in condominium projects with significant deferred maintenance or in projects that have received a directive from a regulatory authority or inspection agency to make repairs due to unsafe conditions are not eligible for purchase.

“Significant deferred maintenance” is defined in Lender Letter 2021-14 as: (a) full or partial evacuation of the building to complete repairs is required for more than seven days or an unknown period of time; or (b) the project has deficiencies, defects, substantial damage, or deferred maintenance that: (i) is severe enough to affect the safety, soundness, structural integrity, or habitability of the improvements; (ii) the improvements need substantial repairs and rehabilitation, including many major components; or (iii) impedes the safe and sound functioning of one or more of the building’s major structural or mechanical elements, including but not limited to the foundation, roof, load bearing structures, electrical system, HVAC, or plumbing.

Additionally, projects that have failed to obtain an acceptable certificate of occupancy or pass local regulatory inspections or re-certifications would also be ineligible for purchase under Fannie Mae’s guidelines.

The above definition of significant deferred maintenance does not include routine maintenance to a building, or damage or deferred maintenance that is isolated to one or a few units. Loans secured by condominium units in need of routine maintenance or isolated deferred maintenance may still be eligible for purchase, subject to all of Fannie Mae’s other conditions and restrictions.

In response to the Lender Letter, condominium developers, unit owners associations, and management companies will need to ensure that reserves are properly budgeted and allocated to prevent deferred maintenance from accumulating.

Fannie Mae’s Lender Letter 2021-14 can be found here.

Freddie Mac, in bulletin 2021-38, issued similar guidance that went into effect on February 28, 2022, which can be found here.

If you need assistance understanding the impact of the new guidelines on a Virginia condominium, please contact Michael Kieffer at 703-528-4700.

Leesburg Approves Virginia Village Redevelopment

With land values and the demand for residential development at record-highs, localities across Northern Virginia have increasingly looked to the redevelopment of older commercial shopping centers as a way to accommodate new investment and housing.

On January 11, 2022, the Leesburg Town Council took a major step forward in this regard when it approved Keane Enterprises’ proposal to redevelop the aging approximately 18-acre Virginia Village Shopping Center into a new mixed-use neighborhood.

Once a bustling suburban shopping center, Virginia Village was initially developed in the mid-1950s under the direction of the late John Ours. The center gradually expanded until it reached its current state in the 1980s. Keane Enterprises purchased the center in 2017 and began contemplating ways to give the center a renewed sense of vibrancy. It performed a market assessment, which determined the center to be outmoded in its layout, architecture, and environmental sustainability. For example, parking lots currently comprise approximately 85 percent of the property, and more than 70 percent of the property is impervious.

After exploring the concept of simply updating and repositioning the center, Keane explored what might be possible under the Town’s comprehensive planning documents. Keane learned that, since the 2006 adoption of the Town’s Crescent District Master Plan, the Town has targeted Virginia Village (and the entire Crescent District) as being ripe for substantial mixed-use redevelopment.

The Crescent District Master Plan, generally, encourages reinvestment in the Town’s older “first ring” commercial centers in a way that would expand and complement the historic downtown. The plan also envisions a new grid of streets and a break from the single use, suburban automobile-oriented development pattern that has pervaded Leesburg over the past 60 years. It also seeks to diversify the Town’s housing supply by attracting a mix of housing types that will drive the demand for retail and employment uses as a part of the Town’s long-term economic development strategy. To implement the Crescent District Master Plan’s goals, the Town adopted the Crescent Design District in 2013 with design regulations.

As approved, the Virginia Village project will include 65,000 square feet of ground floor retail uses and 100,800 square feet of office uses. The project will offer the first Class A office space to be built proximate to downtown Leesburg in recent decades, which will keep the Town competitive as a jobs center relative to newer mixed-use centers and submarkets.

The project will also provide a full continuum of housing opportunities by delivering 53 townhomes, 28 two-over-twos (stacked townhomes), 72 condominiums, and 490 multifamily rental units. Importantly, the project’s apartments will be the first to be built inside the Leesburg bypass since 1988, and a majority of them will be studios and one-bedroom units. This represents a substantial departure from the Town’s existing apartment stock, approximately 70 percent of which is comprised of two- and three-bedroom units.

Of critical importance, the project commits to 33 new Affordable Dwelling Units – the largest number of rent-controlled units yet delivered in the Town. Keane’s approach to housing diversity will add to the attraction of the Town as Loudoun County’s only HUBZone, which is a Small Business Administration program that requires 35 percent of employees to physically reside within a HUBZone.

Complementing the eclectic architecture found in the historic downtown, the project will include traditional vernacular brick materials, stone, and dark industrial metal accents. Shops and restaurants will seamlessly blend with the office and residential buildings. Structured parking will be provided and will be architecturally treated and shielded, ensuring an uninterrupted streetscape.

Recognizing that the Crescent District today lacks parks and opportunities for passive and active recreation, Keane spent substantial efforts on transforming much of Virginia Village into a series of highly-amenitized outdoor gathering spaces and parks. Keane intentionally focused on the quality of each open space and the types of activities that are likely to take place within these spaces.

A central green, for example, will serve as a focal point for the project’s townhomes and stacked townhomes, and will feature a multipurpose lawn and playground. A continuously-activated linear park along High Street will offer a lively-activated space adjacent to ground floor retail and outdoor dining. The proposed Ours Overlook—named in honor of the Ours Family, will serve as a publicly-accessible civic plaza and include an outdoor amphitheater for events.

Adjacent to Ours Overlook, Keane will dedicate land for an extension of Raflo Park, which will result in create the largest concentration of passive recreational space proximate to the historic downtown. As part of this open space, Keane has proposed a pedestrian bridge over the Town Branch stream that will connect the Ours Overlook to S. Harrison Street. This bridge will enhance pedestrian connectivity and provide an innovative signature visual element for the entire Crescent District.

Keane is particularly proud of the project’s environmental benefits, which will expand the mitigation of stormwater runoff,  enhance the site’s habitat and aesthetic opportunities, and ultimately aid in the reduction of the existing urban “heat island” effect. More than 400 new trees will be planted, and some 2.55 acres of existing floodplain along Town Branch Stream will be preserved, ensuring the protection of the natural habitat for wildlife and enjoyment of the public.

Over the course of more than two years, Keane and its design team – which included MV+A Architects, LandDesign, Urban, Ltd., and Gorove/Slade Associates – worked collaboratively with staff and decision-makers on myriad issues such as architecture, layout, and parking. Common ground was found regarding regulations that had never before been interpreted or applied. Keane solicited substantial community input through seven community meetings and through CoUrbanize, an online community engagement platform that generated more than 7,500 unique visits and nearly 1,200 comments. The Town Council public hearing included more than 20 speakers voicing support for the project.

The result of these efforts will be a regionally-significant marquis project that will provide a blueprint for how to transform an aging and environmentally unsustainable commercial strip mall into an exciting mixed-use neighborhood. By introducing job-friendly housing and increasing the amount of commercial square footage on the site, the project will also serve as a catalyst for encouraging redevelopment and new investment in the Crescent District.

 

 

Fairfax City Council Approves the Long-Awaited Redevelopment of the Breezeway Motel

On March 8, 2022, Fairfax City Council approved a rezoning and certificate of appropriateness application submitted by Pulte Homes to allow the long-anticipated redevelopment of the Breezeway Motel located on Fairfax Boulevard.

Walsh Colucci land use attorney Bob Brant guided Pulte through the application process, which included numerous work sessions with the City’s Planning Commission, Board of Architectural Review, and City Council, and outreach to the surrounding residential communities.  The approval allows Pulte to build upon the success of its nearby Mt. Vineyard community in the City, through the delivery of a vibrant neighborhood that will include 40 townhouses, 20 two-over-two condominium units, and a significant amount of publicly accessible open space.  Council’s approval also paves the way for a new 10,000 square foot commercial building that will take the place of the Breezeway Motel on Fairfax Boulevard.

In addition to the long overdue revitalization of the site, the development will result in a number of significant benefits to the City including road improvements and enhancements to the existing transportation infrastructure, streetscape improvements, the removal of above-grade utilities, and a substantial contribution to the City’s affordable housing fund.  The approved development is consistent with the City’s vision for the area as set forth in its Comprehensive Plan, and will serve as a catalyst for future redevelopment along the Fairfax Boulevard corridor.

The approval represents the Walsh Colucci land use team’s latest in a series of recent successful applications in the City of Fairfax, with several others in progress and on the horizon.  Please contact us regarding any of your land use needs in the City, or throughout the region.

 

Image Credits:  LPDA – Land Planning & Design Associates

Frederick County’s One Logistics Park Approval Moves Forward

In a recently-approved rezoning victory in the greater Winchester area of Frederick County, Virginia, Walsh Colucci secured approval of the One Logistics Park rezoning allowing for a development of 277 acres of land for industrial, logistics park, or data center uses together with a smaller, 12-acre commercial area along Millwood Pike (Route 50) for supportive retail and commercial uses.  Randy Minchew, Managing Shareholder of our Loudoun Office, took the lead on this application and secured its approval. A map and concept plan showing the One Logistics Park approval is attached.  One Logistics Park will also provide a critically-needed regional transportation improvement through the completion of Coverstone Drive from the Frederick County Public Safety Center through the One Logistics Park property to a new full-movement, signalized intersection with Millwood Pike.  It is envisioned that One Logistics Park will provide jobs, tax base, and other related benefits as new business and economic activity continues to come to the Winchester Regional Airport area of Frederick County.

Regrettably, the approval of One Logistics Park was not without citizen opposition and, following approval of the rezoning, an adjacent neighbor filed a lawsuit against the applicant of the One Logistics Park rezoning, the Frederick County Board of Supervisors, and the owners of the land that were a part of the application, challenging the rezoning approval. Walsh Colucci’s land use litigation team, led by John Foote and Matt Westover, employed a strategy involving the filing of a “Motion Craving Oyer,” which was granted by the Frederick County Circuit Court and resulted in the entire rezoning application record coming into the body of evidence before the court.  Based on this body of evidence, which included the staff report, proffers, and related explanations of the sizeable project benefits, the court granted the defendants’ respective Demurrers and dismissed the Complaint without granting the Plaintiff opportunity to amend its pleadings.  Through their quick and decisive work, John and Matt were able to secure dismissal of this challenge within three months following the filing of the initial complaint.

One Logistics Park will now move forward to the site plan process and building of the proffered road improvements to serve the project and Frederick County.

 

Arlington Magazine’s Top Attorneys

Arlington Magazine recently conducted a survey where attorneys were asked to nominate their peers in 21 practice areas.  The list includes attorneys who are located in Arlington County, Fairfax County, the City of Falls Church, and the City of Alexandria.

Firm attorneys Art Walsh, Nan Walsh, Andrew Painter, and Michael Kieffer were voted Arlington Top Attorneys in their respective practice areas. Congratulations!

Andrew Painter – Land Use & Zoning

 

Michael Kieffer – Real Estate Transactions

 

Nan Walsh – Land Use & Zoning

 

Art Walsh – Land Use & Zoning

Arlington County Moves Forward With Pentagon City Planning Study

Brimming with shops, restaurants, housing, and hotels, and proximate to a heavily-used Metrorail station that bears its name, Arlington County’s Pentagon City neighborhood exists today as one of the region’s foremost examples of transit-oriented development. While much of the community was developed between the 1960s and early 2000s, Pentagon City has experienced renewed development interest in recent years, particularly following the November 2018 announcement that Amazon had selected nearby National Landing as its preferred location for its second headquarters.

Anticipating these changes, the Arlington County Board in April 2019 embarked upon a comprehensive review of the 1976 Pentagon City Phased Development Site Plan (PDSP) and planning guidance for nearby properties. Following retention of a consulting team to assist staff, as well as several months of public engagement, the County released a draft of its newest Sector Plan to the public on November 24, 2021. Known as the “Pentagon City Sector Plan,” the document sets forth an updated vision for Pentagon City, as well as expectations for urban design, public spaces, and conditions under which additional density may be appropriate.

A number of important policy recommendations are included within the draft plan. For example, it calls for a general increase in density throughout the Pentagon City neighborhood and corresponding changes to the General Land Use Plan (GLUP) designations for the area. Approximately 10 million square feet of new development is anticipated under the draft plan, which is nearly double the amount of square feet contemplated by the decades-old Pentagon City PDSP.

Like other areas of the County, density above what is permitted today would be “earned” by providing community benefits which may include, but not be limited to:

  • Achievement of new publicly-accessible green pathways and plazas;
  • Multimodal improvements within the study area;
  • Contributions to on-site affordable housing. To that end, the draft Sector Plan establishes a goal of a minimum of 10 percent of new residential density be designated for on-site Committed Affordable Units; and
  • Improvements to the existing pedestrian passageway though the Fashion Centre at Pentagon City.

To allow increased flexibility for landowners, the draft plan places few restraints on preferred land use mixes. Instead, the draft plan generally emphasizes the importance of new residential development – somewhat similar to the 2010 Crystal City Sector Plan and the 2015 Rosslyn Sector Plan. For multiple office building developments, the draft plan recommends that a minimum of one additional building with a significant residential, hotel, or weekend/evening destination uses should already exist or be proposed.

In terms of green infrastructure, the draft plan sets forth a series of new public open spaces, as well as an approximately three-mile network of pedestrian pathways throughout the planning area, which it calls “Green Ribbons.” While the plan builds in limited flexibility in the location of specific pathways, the Green Ribbons network is intended to result in approximately five acres of connected parks and plazas. Where proposed Green Ribbons traverse private property, the draft Sector Plan anticipates that private developers would grant public easements over these spaces, as well as develop and maintain them as part of their respective community benefits package with each redevelopment.

LEED Gold is anticipated as the minimum for all building sites, and exceptional green building performance could be considered as a community benefit. Additionally, new developments must satisfy a series of tree canopy coverage, planted surface area, and other vegetative requirements.

In terms of height, the draft plan recommends that the tallest buildings be located in the northern portion of the planning area, and that no building should exceed 330 feet in height. Height variation, upper floor setbacks, sculpting, other measures are recommended to mitigate the impact of additional height and density.

County staff is currently preparing a final draft of the Sector Plan for consideration by the Planning Commission and the County Board for final adoption in February. Concurrent with adoption of the new Sector Plan, the County Board will consider corresponding amendments to the GLUP, Master Transportation Plan, and Zoning Ordinance. Additional follow-on items may include studying transportation performance standards, developing a master plan for Virginia Highlands Park, and identifying potential locations for a new school and fire station within the planning area.

For questions about this article, please contact land use attorneys Andrew Painter and Nicholas Cumings.

Nicholas Cumings Named Shareholder

Walsh, Colucci, Lubeley & Walsh is pleased to announce that Nicholas V. Cumings has been named a Shareholder of the firm effective January 1, 2022.

Nick Cumings joined the firm in 2017 and works in the Land Use and Zoning practice group in the Arlington office. He primarily focuses on securing zoning and land use entitlements in Arlington County. Before joining the firm, Nick practiced for several years as an associate with a Fairfax law firm where he focused on real estate litigation, title issues, local government, and financial services litigation. Nick earned a Bachelor of Arts degree from the College of William and Mary in 2008 and graduated from William and Mary Law School in 2011, where he was a member of the William and Mary Law Review.

After Nick graduated from law school, he clerked for the honorable Michael F. Devine of the Fairfax Circuit Court. He is an active member of the Fairfax Bar Association. Nick was also named a Super Lawyers Rising Star in Virginia from 2015 to 2022.

“Nick demonstrates the most important traits of a land use attorney” said Land Use and Zoning practice leader Lynne Strobel. “He is exceptionally bright, dedicated to his clients’ cause, and committed to obtaining the best results. These traits are recognized by the firm, and are the foundation of Nick’s successful practice.”

Nicholas V. Cumings

Robert D. Brant Named Shareholder

Walsh, Colucci, Lubeley & Walsh is pleased to announce that Robert D. Brant has been named a Shareholder of the firm effective January 1, 2022.

Bob Brant joined Walsh, Colucci, Lubeley & Walsh in 2015 and is a member of the firm’s Land Use and Zoning practice group in the Arlington office. His practice focuses on securing land use entitlements including rezonings, special exceptions, special use permits and associated approvals in Fairfax County, the City of Alexandria, the City of Fairfax and the Town of Vienna. Prior to joining the firm, Bob gained valuable experience representing condominium and homeowners associations throughout Northern Virginia. Bob earned a Bachelor of Arts degree from the College of William and Mary in 2006 and graduated from the Catholic University, Columbus School of Law in 2011, where he was a member of the Catholic University Law Review. Bob is a graduate of the Leadership Fairfax Institute and was named a Virginia Super Lawyers Rising Star in 2021 and 2022.

“Bob is an outstanding land use attorney. He has earned his position as a shareholder by demonstrating expertise in a complex practice, providing outstanding service to clients, and his commitment to the communities we work in,” said Lynne Strobel, Land Use and Zoning practice group leader. “We are fortunate and proud to have Bob as a shareholder in the firm.”

Robert Brant

Employee Spotlight: Erin Swisshelm

Erin L. Swisshelm joined the firm this year as an associate for the Land Use & Zoning practice group in the Loudoun office. Prior to joining the firm, Erin was an Assistant County Attorney at the Frederick County Attorney’s office in Winchester, Virginia. Prior to working at the Frederick County Attorney’s office, Erin worked as an Assistant Prosecuting Attorney for the Berkeley County Prosecuting Attorney in Martinsburg, West Virginia. Erin attended law school at the University of Pittsburgh School of Law.

Thank you for participating in this month’s Employee Spotlight, Erin! Tell us a little more about yourself — where did you grow up?

I grew up in a suburb of Indianapolis, Indiana. When I was there, it was still a pretty small town, but much like Northern Virginia, it’s experienced quite the development boom since I left after college. I now live in Leesburg, Virginia.

What did you think you wanted to be when you were younger?

When I was little I wanted to be a scientist of some kind, but as I got older I started becoming interested in law and the way our legal system worked. I majored in biochemistry in college, and I had some really awesome science research opportunities in undergrad, but it just wasn’t the right fit. I ended up in law school, thinking that maybe I’d work as a patent lawyer. While I still really enjoy learning and reading about science, I’m glad my career has taken me in the direction it has.

What interested you in land use and zoning field?

I got my introduction to land use law when I was working in a local government office and was asked to help review land use applications. Over time, I discovered that land use and zoning is a really good blend of all the things I like about being a lawyer.  In any given week, this kind of practice allows me to write both persuasively and technically, to collaborate with other professionals, and to solve problems for our clients. It’s never boring, and each application presents new opportunities to learn something, and to help shape the way our community develops.

What aspect of your role do you enjoy the most?

I really enjoy the problem solving and teamwork portions of my role. It’s extremely satisfying to work with other professionals to  find a solution for a client and to help them realize their vision for their project.

Who would you consider your role model at the firm?

That’s a hard one – everyone I’ve had the pleasure of working with has been great, and I’ve had the opportunity to learn a lot from everyone. If I have to pick, I’d have to say Randy Minchew, because he has such a great way of problem-solving. It’s always fun to discuss strategy with him.

Aside from a very busy schedule, what do you like to do for fun outside of work?

In my spare time I like to attend Crossfit, and to get outside for a long walk or hike. I also like to use my weekends to catch up with family and friends, or try out new recipes. I’ve also been slowly exploring all the fun things to do here in Loudoun since moving in June.

Favorite place(s) to travel to?

Internationally, so far my favorite has been Costa Rica. I’m hoping travel conditions will stay stable, and have dreams of visiting Germany and Italy in the coming years. Domestically, a lot of my travel time has been spent seeing friends, and usually involves an annual trip to the Outer Banks. I also really like making it back to the Midwest when I get a chance.

What is your favorite show at the moment?

I just finished Ted Lasso, and I thought it was excellent. There are so many good things out right now that it’s hard to find the time to keep up!

What is your favorite book?

This is a hard one – I love to read. But I do an annual re-read of American Gods by Neil Gaiman, so that’s probably my favorite. I also deeply enjoy the work of my fellow Hoosier, Kurt Vonnegut.

Why do you think makes Walsh, Colucci, Lubeley & Walsh is a great place to work?

The people, hands down. We have a really wonderful group of professionals who are both extremely knowledgeable and are great team players.

Thank you for sharing, Erin!