The owner of Cruz Bay’s only low-income housing community is still in the lengthy process of trying to pre-pay his U.S. Department of Agriculture, Rural Development loan.
The 20-unit Cruz Bay Apartments, located behind the V.I. National Park Visitor’s Center, was partially financed through a USDA RD loan. The USDA RD loan requires the complex be rented as federally regulated low-income units, as the Cruz Bay Apartments have been since the 1980s.
Virginia-based property owner Thomas Runquist began the process of requesting loan pre-payment last year, and is currently still in the appraisal stage, according to representatives of the Florida management company for the property, Southwind Management.
A series of up to three appraisals can be conducted before a price tag is decided, and the Cruz Bay Apartments has already undergone two, explained Southwind Management owner Pamela Borton.
“The owner hired a private appraiser who appraised the property,” Borton said. “The feds came in next using their appraiser and they did their own appraisal of value.”
“The owner received the USDA RD’s appraisal report about 90 days ago and there is quite a bit of difference between the two reports and some obvious errors,” continued Borton. “The owner, exercising his rights under the pre-pay procedure, appealed that appraisal and requested that determination of value be re-appraised and errors be corrected.”
A second round of appraisals will be conducted shortly and the process will continue from there. Depending on the data from the appraisers, either a third and final round of appraisals will be conducted or a determination of value will be reached.
Once a value is agreed upon by USDA RD officials and the property owner, Cruz Bay Apartments will be advertised for sale to non-profit companies in an effort keep it as low-income housing.
If there are no buyers after six months, however, the owner will then be allowed to pre-pay the USDA RD loan and all federally-regulated low income regulations will be rescinded.
That scenario would allow the owner to either operate the units as conventional, market value apartments or sell the property to a for-profit housing developer.
Whatever happens next, the only sure thing seems to be that nothing will happen overnight, explained Borton.
“Typically the goal is to try to resolve these types of conflicts within 45 to 60 days, but it could take longer,” she said. “Nothing with the federal government moves quickly.”
Since the passing of former on-island property manager Carole DeSenne, Southwind Management hired Kay Copeland to oversee the units, Borton added.