The city’s housing authority has purchased a failing 11-story apartment building in Downtown in a bid to keep it as an income- restricted property offering lower than market rents.

Richmond Redevelopment and Housing Authority’s takeover of the 58-unit Grace Place at 400 E. Grace St. was announced Tuesday.

According to RRHA, about 15 units are still occupied. The authority has turned the property, valued at nearly $5 million, over to its development arm, Richmond Development Corp., city records show.

RRHA’s plan is to send engineers and contractors to assess the building’s condition and determine what improvements need to be made before resuming leasing to individuals and families that would qualify, according to a statement from the authority.

The building’s use as “affordable housing” dates to 2001. The building’s status as an income-restricted complex was to remain for 30 years under an agreement signed then.

The building’s most recent owner, Franklin Capital Corp. of Alexandria, struggled to maintain the property and collect rents. During the spring and summer, the company sought to evict all the tenants in order to clear the building and sell it, but the Central Virginia Legal Aid stopped that effort.

“They say, they’re losing money, and it costs too much to run the building. We don’t believe that that is legally a sufficient reason for them to evict people and shut the building down,” Martin D.“Marty” Wegbreit, CVLA’s director of litigation in Richmond, said.

In October 2021, the city condemned the building after finding 18 violations of health and safety codes, forcing Franklin Capital to bring it up to code before allowing residents to return.

RRHA had owned the land under the building since at least 2014, city records show, but had marketed the building. Now RRHA owns the building, too, the authority stated. The purchase price was not immediately disclosed.