ST. JOHN, U.S.VIRGIN ISLANDS. - Families who dreamed of owning a home close to work and school on this island were pretty much out of luck before Bellevue Village Apartments started leasing here in June 2006.

Most of the island’s homes are owned by visitors from the mainland for vacation escapes and are priced far out of reach of the locals, many of whom work in the hospitality or tourism industry. As a result, most employees of St. John businesses must live on the island of St. Thomas and commute by ferryboat.

Now 72 families are living in affordable apartments close to their jobs on the island. Some are able to send their kids to a private school next door to the homes, according to the developer, Reliance Bellevue, LLC. After renting for 15 years, they will have a chance to buy their homes.

The property consists of 36 two-story duplex buildings on a 24-acre site.

The $22.2 million development faced huge challenges. The most daunting was to find a suitable site on an island of only 20 square miles, with about half of that area devoted to the Virgin Islands National Park.

The Rockefeller family acquired the land that included the project site and donated much of that land for the park. Through an affiliated entity called the Jackson Hole Preserve, a deed restriction was imposed that prevented construction of more than one unit per acre.

The developer was able to effectively triple that density by agreeing to preserve much of the site as common green space. Instead of building on all 36 acres it originally purchased, Reliance Bellevue sold nine acres of the site to the Gifft Hill School for a new educational facility. It donated 2.55 acres to the St. John Community Foundation after discovering ruins of an 18th century cotton estate. The foundation will preserve the ruins and build a visitors’ center.

The property has 24 three-bedroom units and 12 four-bedroom units, which the developer says are “nonexistent” on the island. One- and two-bedroom units make up the balance. All the units are for families earning no more than 60 percent of the AMI, or $22,860 for a one-person household.

Rents range from $509 for a one-bedroom to $740 for a four-bedroom. There is also a community center.

High construction costs were a major challenge. In addition to the obvious constraints on labor and supplies inherent in the island site, the developer had to provide cisterns for drinking water and septic tanks for each building. No public water or sewer service exists for the site.

The cost of the land was $2.2 million. Construction cost per square foot came in at $273, which is less than the typical cost of $500 on the island, according to Reliance Bellevue.

The tax credit allocation per targeted unit was $286,528. There was no government soft money involved.

Key financing components were a permanent loan from Greystone Servicing Corp. and tax credit equity capital from AIG SunAmerica Affordable Housing Partners. Construction financing came from Bank of America.

Additional project information, as provided in application by the nominator.

Q. Why does the nominated project deserve to be recognized based on the award criteria of this contest?

A. Bellevue Village, located on the island of St. John in the U.S. Virgin Islands, comprises 36 two-story duplex buildings, totaling 72 apartments. It offers its families and the surrounding community a wide range of enriching programs that enhance the social fabric across diverse socio-economic backgrounds. Additionally, Bellevue was developed with energy-efficiency in mind, on an island where any development faces unique challenges.

The U.S. Virgin Islands are the most popular tourist destination in the Caribbean. Residents have the highest per capita standard of living in the western hemisphere outside the continental U.S. The result is that for families living in this vacation paradise, finding affordable housing that is safe and decent is a nightmare. In fact, 85 percent of the service and construction employees on St. John actually live on St. Thomas, a 32-square-mile island three miles west of St. John.

St. John’s economy is built almost entirely on tourism. The smallest of the Virgin Islands at 20 square miles, 50 percent of the island is protected by the Virgin Islands National Park. Local families own much of the remainder of the island in large tracts, and the bulk of residential development targets the affluent who have second homes on the island. In 2006, the average sales price for a home on St. John was $1.5 million.

Unlike many affordable housing projects, Bellevue will not fall victim to “expiring use” problems at the end of the tax credit compliance period. Reliance has built in measures to guarantee that Bellevue Village will be affordable to St. John families for years to come. Bellevue Village will convert from a rental community to an affordable homeownership community in 15 years.

Q. How does this project represent an innovative solution to a specific development challenge?

A. Reliance encountered two specific development challenges: the location, topography, and zoning of the site were in conflict with the development of a larger-scale affordable community; and the site would require a unique financing structure to meet the concerns and demands of the close-knit community, and thereby gain local support.

Reliance worked with the local government and the Jackson Hole Preserve, an affiliate of the Rockefeller Foundation, to preserve much of the site as common green space. In exchange for increased density, Reliance was approved to build on smaller lots, creating more affordable housing stock than originally thought possible. Our architects designed attractive units that are in consistent with the traditional style of Virgin Islands homes. This typically consists of an owner’s main dwelling unit on the upper floor, with a cistern and a rental apartment on the lower level. West Indian traditions utilize high ceilings, and Bellevue units have high ceilings, cross-ventilation, and are oriented to take advantage of the breezes and views. The design also included front porches and rear balconies or terraces.

Reliance utilized low income housing tax credits to finance Bellevue’s construction, but we knew that the community desperately needed and wanted affordable homeownership opportunities. It was important to Reliance to meet as many of the community’s wishes and desires as possible. Bellevue was structured in a way that the apartments would be 100 percent affordable rental for the initial 15-year tax credit compliance period; at the end of that period, all units will be made available for sale to the qualified low-income families, at an affordable, below-market price. Families living in the U.S. Virgin Islands dream of owning their own home, just like families on the mainland United States, but for many it is impossible to purchase million-dollar houses. At Bellevue Village, the dream of homeownership will one day be realized by 72 families. Down-payment assistance will be provided by Reliance through our Homeownership Incentive Program.