Views At Clarendon

Here is a guest post from Raighne Delaney, a shareholder of Bean, Kinney & Korman, P.C. and lead counsel in the successful dismissal of a case on April 12, 2010 pending against the Views at Clarendon Corporation, Inc. Raighne’s comments regarding the case follow:

On April 12, 2010, Judge Hilton of the U.S. District Court for the Eastern District of Virginia dismissed a suit seeking to halt the Views at Clarendon affordable housing project in Arlington, Virginia. The plaintiff, Peter Glassman, claimed the project violated the U.S. and Virginia Constitutions’ establishment clause by allegedly using Arlington County government funds to erect and repair a church and support the church’s ministry. The court roundly disagreed with these allegations, finding that the plaintiff’s complaint failed to properly allege an Establishment Clause case. The court granted the various defendants motions to dismiss as to all counts of the case with prejudice and no leave to amend was granted.

The project, known as the Views at Clarendon, is being constructed on property formerly owned by the First Baptist Church of Clarendon (“FBCC”). In 2003, the FBCC decided to develop its property located one block from the Clarendon metro stop. Rather than sell the property, the FBCC felt that the best use for the site was to erect a ten story building, of which the first two floors would consist of a church sanctuary. The building’s remaining eight floors were designed as affordable housing.

Neighbors raised vocal objections to the project through typical Arlington County entitlement processes and extending into multiple iterations of litigation. After losing their case at the trial court level in the initial litigation, in 2006, various neighbors prevailed in challenging the County’s initial rezoning of the property. The County corrected the zoning procedural issues and again approved the project. The zoning approval eventually survived legal challenge. This latest Establishment Clause case was thus the fourth separate lawsuit filed by nearby property owners using various legal means to challenge this affordable housing project.

However, the suit failed because there is the FBCC, which is building the church sanctuary, and the Views at Clarendon Corporation (“Views”) which is constructing the residential units. The FBCC created the Views as a separate secular non-profit entity. Once created, the Views runs as a separate entity and the FBCC has no further involvement or control over the Views. For a variety of economic reasons, the secular and separate Views entity decided to create a new limited partnership, 1210 North Highland-Clarendon, LP (“1210 NHCLP”), and became 1210 NHCLP’s general partner.

FBCC entered into an arms-length transaction to sell the entire property for $5.6 million to 1210 NHCLP, a price well below the full value $14 million appraisal for the property. Arlington County lent $13.1 million to 1210 NHCLP, the Virginia Housing Development Authority (“VHDA”) lent $14.5 million to 1210 NHCLP, and 1210 NHCLP received an $18.6 million federal grant, collectively for use by 1210 NHCLP in the property acquisition and in construction of the residential units, though some of the funds had designated purposes.

When finished, the building will consist of two condominiums. Condominium A will consist of the former church steeple and the first two floors of the 10 story building for use as a church sanctuary. Condominium B will consist of the underground parking and the third through tenth floors of the 10 story building. The funding for the FBCC project (Condominium A) and the separate affordable housing project (Condominium B) are strictly separated. Not one penny of Arlington County’s money is being used by anyone to pay for the construction of Condominium A.

To access their apartments, future residents will not step onto the church’s land, and will use their own entrance, not the church’s entrance. Furthermore, the condominium rules and state regulations prohibit any religious indoctrination of residents. The FBCC will have zero control over the selection and retention of Condominium B’s residents. Furthermore, the Views’ has contracted with a private management company to run that process.

Ultimately, the court ruled that Arlington’s loan was for the secular purpose of providing affordable housing in Arlington. The judge further found that there was “no factual allegation” of religious indoctrination that would allow for the case to move forward. The court expressly found that the separate entities, their creation, their structure, and their membership created “no legal infirmity.” Finally, the court ruled that the funds received by the FBCC when it sold the property to 1210 NHCLP were not related to the FBCC’s status as a religious entity because a church can sell its property like any other person. We are very pleased as a firm that this exciting and important project is moving forward, particularly after prevailing in the face of repeated oppositions, lawsuit and challenges.