[0:00] All right, where's my clock? Is that right?

[0:05] Good morning. I like to call to order the meeting of the governing board of the Texas Department of Housing and Community Affairs.

[0:11] It is 10.07 in the morning of November 7, 2024.

[0:20] It's been a great week in the United States and the state of Texas hasn't it, and we'll continue it with this meeting.

[0:27] The start-out with the roll call, Mr. Martians, and Mr. Fariis, Mr. Thomas, Mr. Harper, Ms. Conroy,

[0:35] and I am here, so we have a quorum.

[0:40] As usual, we start the meetings with the pledges which will be

[0:44] led by Mr. Wilkinson, and we're going to do a little adaptive work here on this because

[0:53] this building, this room does not have an American flag, but we will start out

[1:02] I pledge allegiance to the United States of America and to the Republic for which it stands

[1:09] on the nation's underdog indivisible with the King's Justice law on the

[1:22] text law.

[1:24] On the text law, pledge allegiance to the Texas, one state underdog, one and indivisible.

[1:46] always be flexible.

[1:51] This brings us straight to our consent agenda. Are there any items listed

[1:57] on the consent agenda as posted that a board member remembered the public wishes to move

[2:01] to action.

[2:04] Hearing none, seeing none will entertain the motion on the consent agenda.

[2:08] Mr. Chairman, I move the board up to provide them as 1 through 11 as described and presented

[2:15] the respective board acts to request and reports.

[2:20] Thank you.

[2:21] Motion made by Ms. Furdius, seconded by Mr. Harper, all those in favor say aye.

[2:25] Any opposed hearing none, motion carries?

[2:28] Moving right along to our executive director's report.

[2:36] Not a whole lot this time.

[2:37] Just a few items in compliance.

[2:39] Just last week we promoted Robert Moore to the role of manager of compliance

[2:43] of subrecipient monitoring.

[2:45] He is 14 years of community action program and department funded housing program experience.

[2:49] of that, the last seven has been with the Department, and the last two has seen your monitor in the compliance of subrecipient monitoring division.

[2:57] His experience in weatherization has great benefit to the Department and our network of subrecipients.

[3:04] In legislative affairs, things are heating up in the legislative world as we near the start of the next regular session in two months.

[3:11] At this moment, we have staff over at Senate Local Government,

[3:15] testifying about our implementation of House Bill 271,

[3:19] the PFC Cleanup Bill, and our multi-family bond program.

[3:23] Next week, I'll be testifying before the Senate Health and Human Services Committee

[3:27] on their interim charge of protecting vulnerable Texans in emergencies.

[3:32] Jericho, of course, has asked me to speak about how we monitor our senior

[3:34] multi-family properties in the wake of a natural disaster

[3:37] and how closely we track any damage that may have occurred subsequent repairs in the conditions of the tenants.

[3:44] Also, next week, pre-filing of legislation begins for the 89th regular session,

[3:48] so Michael Lidal and his job will be tracking that closely and will keep you informed,

[3:52] because anything important to be pressing.

[3:55] We've already been in discussions with several offices regarding possible legislation.

[3:59] They will file which could impact our programs, so things are gearing up.

[4:05] It's the end of my prepared remarks from happy to answer any questions.

[4:10] Okay.

[4:10] I mean, board members have questions from Mr.

[4:14] Wilkinson.

[4:15] I trust you're going to be on top of the assisting the legislators with the legislative process.

[4:22] Yes, yeah.

[4:22] I mean, you know, no advocacy, just a resource, right?

[4:27] Some of it's a little high in the sky.

[4:28] I'm going to get you a billion dollars.

[4:29] to it, you know, it's well-made in one of that.

[4:32] Okay, okay.

[4:35] Yeah, and just letting people know this is

[4:37] as much smaller room that we're used to,

[4:40] so, come on, let's go ahead and use these front rows.

[4:44] I will make an effort to add people raise their hands

[4:47] if they're planning on speaking on

[4:49] in the agenda item when we come up.

[4:56] So, yeah, and try not to stand in front of the cameras

[4:59] and I'm sure these guys will tell you, please move.

[5:03] Okay, moving right along to item 13 on the agenda, presentation discussion and possible action regarding the issuance of a determination, though, is for 4% housing tax credit support, Creek Bend departments in San Antonio, and this is Morales.

[5:21] Right.

[5:21] I have to write a flight here.

[5:22] Do you have to hear?

[5:23] Okay, is she?

[5:24] So are we doing this later?

[5:26] Yeah, let's skip over it.

[5:28] For now.

[5:29] Okay, we're going to go back to,

[5:31] So that's 13, 14, and 15.

[5:34] We're going to bear with us right now.

[5:36] There's a house hearing, which Bobby was requested to be at.

[5:41] We said, can we send some other folks?

[5:44] I mean, we let them know we're at hearing the same time.

[5:47] And that's, you know, we schedule our meeting for like a year ago.

[5:50] Last week.

[5:51] So there may be some other adjustments in this schedule,

[5:55] but we will hit everything as opposed to 16.

[5:59] Yes?

[6:01] Resolio here?

[6:03] All right.

[6:04] We're jumping ahead.

[6:05] Item 16 on the agenda.

[6:07] Presentation discussion in possible action regarding the material amendment to the

[6:10] Housing Tax Credit application.

[6:12] Changes to the ownership structure and a waiver of ten-tack section 11.9 B2A for a

[6:19] Avanti Legacy Del Sol.

[6:21] Mr. Brenwells.

[6:25] Good morning.

[6:27] received a 9% housing tax rate at award in 2023 for the new construction of 84 units all of which are

[6:33] low in communities for the elderly and Brownsville Cameron County. The applicant has not requested

[6:38] approval for a material amendment to the application, changes the ownership structure and a waiver

[6:42] related to the requirement to have a historically underutilized business or hub. In the ownership

[6:47] structure of the general partner, the applicant also requested approval for a reallocation of

[6:52] That's right, it's under 4th major, but this request will be presented in a separate item.

[6:57] The development will have a single three-story U-shaped building, and the proposed changes to the application include a reduction to the size of all units, which will result in a reduction of 3.03% or 2,146 square feet in the net runaway area, going from 70,719 square feet to 68,570 t's, 573 square feet.

[7:19] There will also be a 34.7% or 8,775 square feet decrease in the common area going from 25,290 square feet.

[7:30] To 16,515 square feet. Other proposed changes to the architectural design include, but are not limited to a reduction from 30% masonry on the exterior to approximately 10% masonry. Removal of all balconies, reduction of the number of parking spaces from 110, including 16 carports to 90 parking spaces with no carports. Removal of one of the two elevators and removal of the pool, to be replaced by more affordable outdoor amenities such as the picnic area and a bunch of all courts.

[8:01] The applicant indicates that due to increased construction cost, increased barring cost,

[8:06] and increased property insurance expense, the request of changes are necessary to maintain

[8:10] feasibility. In addition to the changes to the design, the applicant is requesting approval

[8:14] for changes to the ownership structure of the development, which requires a waiver of the provision

[8:19] on the QAP that specifies that the hub is required to have an ownership interest in the general

[8:23] partner. The applicant is seeking to add a special limit partner and move the hub from the

[8:29] department partner.

[8:31] Her answer will have an opportunity for preparation

[8:33] where we place the hub as a solo member of the new general

[8:35] partner.

[8:37] It should also be noted that one of the original members of the

[8:40] general partner will no longer be in the owner structure.

[8:43] The request that changes to the ownership structure will improve

[8:45] the financial feasibility

[8:47] of the development by providing your property tax extension.

[8:51] However, the application for the development

[8:52] received two points because the development was structured

[8:55] to include a hub and the ownership structure of the general

[8:57] partner of the owner.

[8:59] and the proposed change to the ownership structure would result in the development no longer meeting

[9:02] the requirements for the points because the hub will no longer be in the structure of the general partner.

[9:08] The applicant request approval for a waiver of this specific requirement and to allow the

[9:12] development to continue to qualify for the two points with the hub and the ownership structure of the

[9:16] special amendment partner. The hub would continue to be required to need all other requirements

[9:20] in the KAP and this revised ownership requirement would be codified in the law for the development.

[9:27] The applicant submitted a letter of continued support from state representative Erin Elizabeth Gomes and

[9:32] resolution number 2023-068 from the city of brands will pass on August 2024, which also

[9:41] states the city's continued support for the development. The development was re-underwritten with

[9:46] proposed amendment and revised financial information. The analysis supports no change to the tax credit

[9:50] allocation and demonstrates that the development remains feasible with the proposed changes.

[9:55] Additionally, staff reviewed the original application and scoring documentation against

[9:58] this amendment request and concluded that with the exception of the waiver, none of the changes

[10:02] would have affected the scoring or selection of the application in the competitive

[10:05] round.

[10:07] Staff recommends approval of the application amendment, the waiver request, and the changes to the

[10:10] infrastructure of the development, and I'm available for any questions.

[10:14] Okay, on the structure with the limited special limited partner, that's

[10:20] conforms that what we've been doing with many other

[10:24] restructures like that. Yes, right, it's correct. So there's nothing special.

[10:28] No problem with that part.

[10:32] Does the city, I guess, are there any restrictions on

[10:37] how many parking places per unit were required or not? Because they're

[10:44] reducing a bunch. It is my understanding that even with the reduction, there's

[10:49] the development has 84 units and they would have 90 parking spaces available.

[10:54] So there's no like 1.5 requirement or something like that.

[10:59] Just think of that as zero.

[11:03] I am not sure.

[11:05] Hang on, we'll get to the point.

[11:06] We have a standard, but if there's a local standard, we don't go code.

[11:11] I'm not sure what the requirement from the city is.

[11:15] So, theoretically, Steve Austin goes, no parking, well, we're going to write bikes, it would be really good.

[11:21] And we could have...

[11:21] Well, that would be Austin.

[11:22] Yeah.

[11:23] Okay.

[11:25] All right.

[11:28] The other part that gave me a little pause.

[11:31] So, there were...

[11:33] Do we know how many stories this is?

[11:36] Three.

[11:36] Three story.

[11:38] And they're taking out one of the elevators.

[11:41] Do we have any kind of AVA type of compliance issues that what happens when that one elevator breaks now?

[11:51] And there's the low ladies and walkers who can't get up to their units.

[12:01] I'm not kidding.

[12:02] I mean, they've got a piece of requirements, even with one elevator.

[12:04] It's just one elevator.

[12:06] That's it.

[12:07] It was just earlier general population.

[12:08] It's an elevator.

[12:10] Okay, so an elevator is required in an elevator development,

[12:12] But we don't have a requirement for a second of it.

[12:16] I'm just curious what happens when that one elevator breaks down and there's like one elevator company and that try-counting the area that can come and fix it and there is

[12:32] And this is particularly in my mind because

[12:37] Moving into a place that only has one elevator. I don't care because I can walk the stairs, but

[12:43] It's like what happens better a little bit or so.

[12:47] We don't have any, my question that I guess more general, do we have any sort of requirements

[12:53] on this?

[12:54] I mean, it's the program I would state it, or is it what you want to do?

[12:59] I mean, there's very strict compliance, if they're meeting the compliance for whatever

[13:04] the code is that they're dating the ADA compliance and you'll tell you exactly what they've

[13:09] got to do.

[13:09] So if they're architect finds that you're going to do one elevator, then it would be one elevator.

[13:15] Oh, well, they could do two because they had it.

[13:17] They had two.

[13:17] They're taking one out.

[13:19] So again, I'm just curious if there's anything that we're accidentally approving here that

[13:27] just doesn't make sense.

[13:28] They can't especially form elderly.

[13:30] From the confasers perspective, the property would be inspected for physical conditions.

[13:34] So the elevator were out, it would be a finding for that.

[13:36] but in terms of an accessibility requirement,

[13:38] I am not aware of anything that would be problematic

[13:42] for them to have only one elevator.

[13:45] Mr. Benwin-Los, what is the maximum fee for G.C.

[13:49] for the general conditions and the fee

[13:51] for the contractor for the intent, do you remember?

[13:54] It's 14% collectively.

[13:56] And for the general, 15%.

[13:59] So on this sheet, it's just 15.04.

[14:01] I've y'all dressed that

[14:08] under the applicant's

[14:09] cost-based items,

[14:12] not a nor going to sell out of money, but it's not compliant.

[14:18] So on that line item for the developer fee, there's the applicant cost, which would be

[14:24] the $2,352,000, and then the TTHC cost, which is likely lower at $2,355,643.

[14:33] That would be the reduction over the amount over the access, I believe.

[14:38] Thank you.

[14:44] One last question, do we have any concern about the

[14:51] Biobility, continued financial viability of the developer,

[14:57] given that this...

[15:01] We reviewed the development itself.

[15:06] Developer perspective, we don't look at the entire portfolio or the development developer asshole. The development was considered to be feasible with proposed changes. So this deal itself would work, but overall speaking for the developer or a review of the developer was not done. It is not part of the process.

[15:27] Yes,

[15:30] we've seen other projects have difficulty, but in context, I mean, we've had many developers

[15:37] have issues or less couple years, so I don't know that it's especially worrisome.

[15:44] Good.

[15:44] There's a margin.

[15:45] I just have a question about the two points that got taken away on the scoring head.

[15:55] Am I right about that here there, right?

[15:57] We are asking for a waiver for those points three main, and the application, the points would have been lost with the hub, not being in the general partner structure.

[16:10] The hub will remain in the ownership structure of the development, but it will just be under the special limit partner.

[16:16] And the request is for a waiver that would allow the development to continue to qualify for the points, having the hub under the special limit.

[16:24] I guess my question is, would there have been another project approved had this tube been taken off with that had been

[16:36] bolted someone up above?

[16:39] It is my understanding that that would have been the case, I believe.

[16:43] The score for this development was tied with four other developments in the area of application.

[16:49] So they went to a tiebreaker at that point and they ended up getting the award, so the two points would have cost the award potentially for this development.

[16:58] What we are in effect doing is waving this, we have bumped the next person in line from if this were to drop out, they would just step up and they would get them.

[17:13] decisions bigger than one elevator two elevator. Correct I don't know what

[17:21] waiting list would have been at that time if it would have ended but then the

[17:24] region or if it would have gone possible that we have some bad news that can answer

[17:27] that in the end.

[17:32] It's a 2023.

[17:38] The folks are hot.

[17:41] Oh, part of the way for everyone to know, I have this nifty little iPad looking thing

[17:48] where I can turn on and off your microphone.

[17:50] Fantastic.

[17:51] I'll be looking forward to using it in time for that.

[17:54] Thank you.

[17:56] Cody Campbell Director of Multifamily Programs for the Department.

[17:59] So Mr. Martint had the credits been returned the same year that they were allocated.

[18:04] There would have been somebody in line waiting for those credits.

[18:07] the waiting list expires at the end of the year every year, and so that person who was previously waiting in line no longer has an active application.

[18:14] However, if for whatever reason these credits do come back to the department, they would go to this year's waiting list.

[18:20] Okay, thank you for that.

[18:22] Of course.

[18:23] I don't know.

[18:23] We don't know if that next person in line, if that had been returned, if they would be here asking for the same thing,

[18:31] which is, you know, to wave the two points from the hub

[18:35] to change the ownership structure

[18:36] to get the property tax exemption.

[18:38] We've done this for like, I don't know how many deals now,

[18:41] but it's a lot.

[18:43] I can certainly, this would be a systemic thing

[18:46] that someone would begin to use and game in the system

[18:50] in your future, and has it done happen before,

[18:54] and should we allow to happen again?

[18:58] This is just, you can't answer that.

[18:59] Yeah, I think that was a rhetorical answer.

[19:02] Is this the two point scoring on them for this?

[19:06] Is that 2AB, is that statutory, is that it's KDP?

[19:10] KDP.

[19:11] Are we cleaning up?

[19:13] I guess we'll get to that at the end of meeting here,

[19:15] but we don't have to have anything about hub in the KDP,

[19:17] which I mentioned.

[19:18] Well, or should we can we at this point change

[19:24] to add these special one to the partnership format

[19:28] Just as a bill of either still get the points.

[19:33] I think it's a little late for us to do that today because we didn't publish it that way,

[19:38] but we can step back next time. Yeah, why not just allow this structure of the day?

[19:42] Yeah, yeah, why don't I mean, okay, that's.

[19:50] Do I, I don't recall, I mean, in the time I've been here, do you recall of

[19:55] I mean, it's similar situation in that beat two years ago.

[20:00] We have done a few transactions where the hub is moving over to this

[20:03] facility in a partner and I believe there have been some developments where the

[20:06] score would have affected the award.

[20:09] So I don't believe that this is the first development that would have been in this

[20:12] situation.

[20:19] Okay.

[20:20] Do any board members have further questions for Mr. Bunwellos or want to ask the developer applicant

[20:28] Any specific questions?

[20:32] The staff is making this recommendation.

[20:36] Yes.

[20:36] Staff is recommending.

[20:39] Okay.

[20:40] Anyone here to make a motion on this as I am 16 of the agenda.

[20:51] Mr. Chairman, I move the board grant the requested waiver of the syntax section 11.9b,

[20:56] regarding hub ownership interest as well as the requested amendment.

[20:59] The housing tax credit application or substructure for a Vante Legacy Del Sol for the reasons and this condition

[21:06] It described in the board action request resolutions and associated documents on this item

[21:11] Thank you motion made by Mr. Thomas is there a second

[21:17] second by Mr. Harper all those in favor say aye in the opposed

[21:23] Hearing none motion carries

[21:26] Thank you. Are we letting him go? Yes, okay, so

[21:29] continuing the 17

[21:32] Okay, I am 17 of the agenda, presentation discussion and post election on recommendation to adopt and agreed final order assessing and administer the penalty relating to Rosamont at Meadow Lane and the final order of debarment for Evan J.

[21:50] the Hunden David B. Rattliff and Michael Bolts, Mr. Miller.

[21:56] The morning chairman Voskis members of the board, Sasha Strimler, here today in my

[22:00] capacity is Assistant General Council to present item 17, inserting in the agreed administrative

[22:05] penalty for Rosemodant Medellaine in a final order of debarment for Evan J. Hunden, David B.

[22:10] Rattliff and Michael Bolts. The property consists of a 264 unit development located in Dallas,

[22:16] which is subject to Alien Use Restriction Agreement signed by a prior owner in 2004, and exchange for...

[22:30] Education to construct and operate the property. Evan J. Huntington, David B. Rattliff, Michael Vols, Control,

[22:36] Rosemot, Medellaine, Manager, LLC, which is the sole member of Rosemot Medellaine Apartments, LLC. I will

[22:43] refer to them collectively as the responsible parties. The 2023 uniform physical standards inspection

[22:50] of the property resulted in a score of 47 out of 100. With 256 efficiencies cited, including

[22:58] 131 level three deficiencies, which are the most severe, just for reference for the most recent

[23:05] round of inspections performed by the department, less than one half of one percent of all

[23:09] inspections done by TTHA score of 50 air below. The responsible party's failed to timely submit

[23:16] corrective documentation, despite being granted extensions by the department, the failure to correct

[23:26] resulted in an administrative penalty referral.

[23:30] After referral to enforcement committee,

[23:32] responsible parties submitted partial corrective documentation,

[23:35] but some events of non-compliance were still unresolved at the time of the

[23:38] informal conference which took place on July 30, 2024.

[23:42] Before you today is an agreed final order assessing an administrative penalty

[23:45] regarding the failure to submit corrective documentation for $15,000,

[23:50] as well as final orders of debarment for their responsible parties for repeated

[23:53] violations in a portfolio.

[23:56] 10 tax section 2.401 E2A provides for mandatory

[24:00] department for repeated violations in a portfolio.

[24:04] When 50% or more of the actively monitored

[24:07] development under the control of the responsible

[24:09] parties have been referred for administrative

[24:11] penalty in the last three years.

[24:14] At exhibit two of your board materials,

[24:16] the chart showing the departments and analysis of the

[24:19] responsible parties control of accurately monitored

[24:22] developments, which concludes Mr. Ratliffe controls seven actively monitor developments,

[24:27] Mr. Vols controls seven and Mr. Huntington controls five.

[24:31] Of those developments, four actively monitor developments have been referred for an administrative

[24:35] penalty in the last three years, which exceeds the 50% threshold, which warrants mandatory

[24:40] department under the rules.

[24:42] If you'll indulge me, I do have to go a little further into the weeds about actively monitor

[24:46] developments because it is the basis under which the responsible parties assert that they have

[24:50] not met the 50% threshold which triggers department.

[24:54] Ten tax section 2.102 defines an actively monitored development.

[24:59] As a development that within the last three years,

[25:02] as a monitor by the department,

[25:03] either through a UPCS inspection,

[25:06] an inspire inspection,

[25:07] an on-site or desk file monitoring review,

[25:10] an affirmative market plan review,

[25:12] or written policies and procedures review.

[25:14] To determine if a development is actively monitored

[25:16] for the purposes of the department rule,

[25:18] To the HCA reviews each property in the ownership portfolio for one, the control start date, which is typically the purchase date.

[25:27] Two, whether a monitoring report or other deadline has been issued to the responsible parties for a physical inspection, a file review or affirmative marking or policy review in the past three years.

[25:40] And three, whether there was an administrative penalty referral during the past three years under the responsible party.

[25:47] Responsible parties asserted in their formal conference and they're written appeal and I presume in person today that because they had two properties in their portfolio that received compliance close-out letters after they took over ownership of the properties that those close-out letters

[26:02] Render the two properties actively monitored development.

[26:07] This would effectively lower the percentage of properties referred for the administrative penalties.

[26:12] Below the 50% threshold for the responsible parties.

[26:16] The two properties in question are post to all Medina and Brookside Gardens.

[26:20] Both of these properties were inspected by the department, received inspection reports,

[26:25] and had all non-compliance corrected under prior ownership.

[26:29] Staff feels that this question of the close-out letter is a bit of a red herring, as these

[26:34] are form letters that are sent out by the department, after all compliance issues have been

[26:38] corrected and no response or is requested or further action from the owners.

[26:47] Costa Almedina was inspected in July 2021 with all events of non-compliance corrected by the

[26:57] and December of 2021.

[27:00] TTHCA issued a close-out letter regarding the past inspection and corrections on March in March 2022,

[27:05] but required no further action a response on the owner's part.

[27:09] Workside Gardens was inspected April 2022 with all minutes of non-compliance corrected by the prior owner June 6, 2022.

[27:17] Responsible parties purchased the property June 22, 2022.

[27:21] TTHCA issued a close-out letter regarding the past inspection and corrections

[27:24] In October 2022, but it required no further action or response on the owner's part.

[27:32] In essence, the responsible parties would like to get credit for corrections made under

[27:35] prior owners in order to bolster their numbers to prevent triggering the 50% debarment

[27:40] threshold.

[27:41] The department has concerns about what precedent this may set for instance if other owners

[27:45] realize they are nearing the 50% threshold, they can purchase additional properties

[27:50] in good standing with a department to add to their portfolio essentially buying a prior

[27:54] owners good compliance history to prevent ever reaching

[27:57] that threshold.

[27:58] This goes against the intention of the rule.

[28:01] There is no required minimum or maximum

[28:03] debarment term.

[28:05] The enforcement committee reaches recommendation based on the

[28:07] material factors outlined under 10 tax section 2.401J,

[28:11] which is detailed in your materials.

[28:14] Also, of note, Mr. Vols and Mr. Ratliffe were previously

[28:17] referred to the enforcement committee for

[28:18] department in 2022, which was dismissed by the committee

[28:21] at the time, do you have a variety of factors including because they were new owners with

[28:25] a department, all non-compliance have been resolved, and the owners proposed a good plan

[28:29] to keep it from happening again, but the department did reserve the right to consider future

[28:33] department under 10 tax cheap.401, E2A, if there are additional future administrative penalty

[28:38] referrals.

[28:42] The Enforcement Committee recommends approval of the order of the department for

[28:45] Evan J. Hunden, David B. Ratliff, and Michael Vols for a period of two years. The Enforcement

[28:50] committee also recommends approval of the

[28:52] degree final order for administrative

[28:53] penalty in the amount of $15,000.

[28:56] I have available for questions.

[28:58] The questions come the month.

[29:01] Why only two years? Why not more?

[29:04] It means sounds like there's a pattern of

[29:08] non-compliance. The enforcement committee felt

[29:11] like this was enough to kind of, they have other

[29:13] properties in the portfolio. It was enough time for them

[29:15] to, the point of development is to make sure that they

[29:19] regrouping, making sure they're in control and managing their properties well and so they felt like a

[29:24] two year period was enough time for them to kind of regroup, get their affairs in order before they

[29:29] would be allowed to apply for additional funds with the department but of course the board has

[29:34] discretion to raise or lower that number. This is maybe a stupid question and I'm happy to take response

[29:46] really for a stupid question. What happens to their tax credits in this case? Who is receiving the tax credits?

[30:01] So they have recindicated six properties in 2023. So I believe for those, they would be receiving those,

[30:11] but I think this particular property has not been recindicated. So for this property, I believe they were with the prior owner.

[30:16] So the department does not affect them continuing to receive their tax credits.

[30:22] Right, it doesn't, it doesn't, it just prevents them from, from applying for, for more funding from the department during that period of department because we want to make sure this is, this is to make sure that they are taking accountability for, for the properties and making sure they're able to effectively manage those properties in their portfolio before they would be able to get any additional.

[30:40] are that would they be allowed to be in another deal as a limited partner or a

[30:48] just a department preventive matter to your name show up on anything that comes

[30:53] across the your desk?

[30:56] I believe so for any applications they I believe they check they would check in the

[31:00] organizational chart.

[31:01] So if one of them was a limited partner on another deal, right, and that's why it's

[31:07] individuals because it's not for this particular management company or LLC. It's for the

[31:14] individuals in the LLC. And you're saying two years could it be rewarded to say until

[31:23] until it's such time that the applicant reapplies but not less, not sooner than two years so that

[31:32] I don't believe so I have to be a defined period of time for the department.

[31:37] Yeah.

[31:39] Thank you.

[31:41] Sure, I have a question.

[31:42] Did you say you found 51 deficiencies or 151?

[31:48] I believe it was 256.

[31:53] Okay.

[31:54] Could that have been one deficiency in every unit, the same deficiency in every unit?

[32:00] I believe it is sampling of units, but each, each deficiency is given as marked as a step.

[32:07] Yeah, what I meant was like, then a hood didn't work in any of the units right.

[32:12] Right, each of those units would that be 260.

[32:15] 260 violations or would that just be one violation?

[32:19] I believe it would be one per.

[32:26] I believe each deficiency stands on its own.

[32:29] So theoretically, it could be that, but I believe,

[32:32] are the deficiencies included with this or it acts like that?

[32:35] Yes, they're outlined in the materials, if you'd like.

[32:38] Thank you.

[32:43] The my only other concern for questions,

[32:46] or any deficiencies,

[32:48] health safety, life safety that

[32:51] should have been,

[32:53] do we refer anything to the local health authorities

[32:57] and groups giving certificates of occupancy and things like that?

[33:02] So, if you look in the materials, it does outline which ones are health and safety violations.

[33:08] There were a number of them. A lot of them were like exposed wiring, exposed wiring near water.

[33:15] Those kinds of things. Also just to note, they do actually have an open city of Dallas's file,

[33:21] a lawsuit against the development for code enforcement violations, and they have an agreed temporary injunction currently.

[33:27] Okay, and that's, I guess this is more, this is more of a big picture question than just this particular one, but you know, our referral process to local authorities who have more direct enforcement capabilities, authority.

[33:43] I mean, are we doing that when we encounter the exposed wires there?

[33:49] I don't believe in apartment works with local authorities, but the local authorities are, sort of, they're two separate different.

[33:55] We have our own, our own inspections and our own rules that we're reviewing when we're doing compliance and the city has the code that they're enforcing.

[34:03] I know the city of Dallas's lawsuit also is a large part of it is about criminal activity, which is not something which is not a standard that we review and are in our compliance inspections.

[34:14] I just, I think it was probably before you were on board, I mean, remember, was it Galveston

[34:20] that there was some development that would just, say, in HyperCOV, in HyperCOV, I mean,

[34:25] in HyperCOV, yes, in HyperCOV, that sounds right, we're, I mean, just, when we, I just

[34:31] want to ensure that the department, when we are doing these substantive inspections and we

[34:35] find these violations aren't just technical administrative things that those are important

[34:40] But at the same time that we are having some mechanism to actively refer our findings to these local health departments or building code departments and so that someone who can do something about these does something about them.

[35:06] Does the simple two-year department, if they have other properties that are in some stage of non-compliance or not?

[35:18] What is the ultimate penalty?

[35:21] I mean, if they've received the penalty, what will motivate them to clean up other issues since they've already received the two-year department?

[35:33] I mean, they can still be referred for additional administrative penalties for any other compliance

[35:40] violations for any other developments during this time period.

[35:45] So I would presume they would want to get those fixed so that they can, when their department

[35:49] period has ended, they could apply for additional tax credits.

[35:54] They did resendicate six properties in 2023, so they are seem actively trying to.

[36:01] So, really, and we haven't given them the ultimate penalty.

[36:08] Yeah, the penalties are per the development, really.

[36:13] The Department is separate from a penalty for non-compliance at a development.

[36:18] Okay. Mr. Chairman.

[36:22] So, in this one, I think we're really only seeing part of the problem.

[36:26] in addition to 156 deficiencies. Of course, we're just saying the housing aspect, but you

[36:34] also brought up Dallas and the criminal activity. Now oftentimes, what people will say is,

[36:42] what we could have gone to fix it, but we're afraid. So there's only, you know, we're only

[36:47] and it's obvious that there's a lot more to it, and I think on TV we've seen a lot of that.

[36:58] So that, I think there's a lot more than just 256 deficiencies.

[37:07] Okay, this is in the greed vinyl order that we have to make them.

[37:12] So I assume that the applicant, or his representatives,

[37:16] don't really have anything that they must share with us. But if you're welcome to share

[37:22] with us, if you want to, please come up in.

[37:30] We were about to vote on the agreed final order.

[37:34] So Mr. Chair, I'd get your name.

[37:37] Your name, I'd be with.

[37:38] The final order is on the 15,000 dollar fine.

[37:45] The developer is in agreement with that.

[37:49] The department, two year of the department, is not on the agreed final order.

[37:56] Well, so we can increase that. Is that what we're saying? Okay, all right, I'm sorry.

[38:00] Let's continue. I didn't. I thought this was a greeting.

[38:03] I thought this was a greeting.

[38:04] Yeah.

[38:05] I can say your name for the record.

[38:12] My name is Michael Falls. I'm with DevCo as the CFO.

[38:18] We believe that the department is a disproportionate response to the issues at hand.

[38:22] The administrative penalties imposed on DEFCO in 22 included UPCS referrals, but also included

[38:28] less severe issues that were focused on reporting deadlines. For example, the penalty for the

[38:33] Mandelo stem from a misdead line for submitting corrective documentation. And after a final

[38:38] file monitoring report, once a curative C follow-up was made, the documentation was provided the same

[38:44] day. And the penalty referral was closed. Following the resolution of these penalties,

[38:48] These Devco successfully pass 10 subsequent reviews across its portfolio.

[38:53] The penalty at Medellaine was due to failing to meet a specific time frame for addressing

[38:57] physical deficiencies, and although the deadline was not met, a recent September inspection

[39:03] and inspection on the anniversary of the original one showed a passing and spire score and confirmed

[39:09] that the outstanding issues had been resolved.

[39:12] As a result of the passing inspection, we do not meet the standard for the mandatory Department

[39:15] and the code that is required for two consecutive failing and spires scores.

[39:21] DevCos actively investing in improvements that meddling, including significant capital expenditures

[39:25] and a change in property management, and those efforts are reflected in the substantial

[39:29] improvement in our empire score.

[39:32] We asked the board consider the full context of DevCos efforts when evaluating these penalties.

[39:37] DevCos demonstrated a commitment to affordable housing by investing millions of dollars

[39:41] in the recent occasion and renovation of seven properties, and in particular the investments

[39:45] made recently and metled lane, underscore our dedication to improve even our most challenging

[39:50] property. Given that many of these penalties were earlier in the past, some of which were

[39:57] more administrative in nature, coupled with the fact that this would be a non-mandatory

[40:01] department. We believe that the department here would be an excessive penalty.

[40:08] By the way, do we have a timer in the room? Okay, we do. Okay, we do have one, so there's no lights

[40:14] but you'll hear the buzz.

[40:18] Also, we didn't do the Eccles rule.

[40:23] So, I entertain a motion to have a public comment.

[40:25] Today's meeting, okay.

[40:26] See public input.

[40:28] Okay, my Mr. Martian, seconded by Ms. Various,

[40:31] all of the favors say aye.

[40:33] Hearing them oppose motion carries.

[40:35] Let's continue on, Mr. Observe.

[40:38] Hi, my name is Kim Spinney.

[40:40] I am also with Dev call.

[40:41] I'm the director of asset management.

[40:42] But as Michael noted, since we have been under the three year windows, I'm sorry, that's

[40:49] the two.

[40:49] That's over.

[40:50] From 2022, we do acknowledge that we're 10 monitoring reviews during that period.

[40:55] Seven were corrected in the timely manner.

[40:57] One was referred for the administrative penalty, which is middle lane.

[41:00] And then two are pending corrective actions, middle lane, stemming from recent

[41:04] inspection in September of this year.

[41:07] And plain view, which had its findings closed out on October 3rd of this year.

[41:11] of those 10 reviews only one has escalated to the penalty status of medallain, and that was related to the physical deficiencies.

[41:18] The other review findings were administrative and nature and more so related to timing of submitting corrections as opposed to substantial deficiencies.

[41:27] As mentioned before, we did have an informal conference underbarmant with the TDA, on July 30th of this year.

[41:33] At that time, we had asked the agency to postpone their decision on our department until that

[41:38] next inspired inspection at Medellaine, which would allow us the opportunity to showcase

[41:43] our commitment to the asset and improvement of that prior score.

[41:46] At that time, we expected the inspection to occur at the end of September, and we received

[41:51] notice in September that that would occur on the 26th.

[41:55] That inspection was successfully held on the 26th of September.

[41:58] We improved our score by 28 points to a 75.2, and we believe that that score would

[42:05] wave favorably in the department decision.

[42:08] We did receive the agency's report the next day on September 27th, and immediately began

[42:12] working on any of the life safety matters, which I want to point out.

[42:16] We're significantly reduced from last year.

[42:18] I believe to under 10 from the variety of level three inspections that were noted.

[42:24] Over the course of the past year since we had received our initial feeling inspection last September,

[42:29] we recognized that the prior property manager was not shepherding the property and paying attention

[42:35] to the items that they should have as required for a turn 64 unit property.

[42:40] We began discussions to replace the management company last year and after several months

[42:44] of interviewing different firms and determined who would be the best partner for us.

[42:48] We chose asset living, who does business as alpha barns on the affordable side, as our partner.

[42:54] We requested that the lender consent to this management change in June of this year, and they received, we received that consent august, and we issued the notice of termination.

[43:03] As it living took over a management of our property on October 1st, and in that short amount of time, they were able to prioritize turning 70 of the 114 basic units that the prior management company neglected to turn, or notify ownership of the depth,

[43:18] necessary work that was required to turn these units, upwards of $50,000 per unit, which

[43:24] Devco has invested over $3 million this year alone to achieving that goal. In the short time

[43:30] that asset living has been the manager, they've been able to lease 20 units, which is a

[43:36] demonstration in the market that not only existing residents, but new applicants are encouraged

[43:40] to find their home at Medellaine, and they've been able to successfully make great strides

[43:46] of the city of Dallas as well as part of that temporary injunction.

[43:53] Any questions?

[43:54] Go ahead.

[43:55] This motion.

[43:55] How many total projects do you have?

[44:00] Were the financing was approved by this board?

[44:04] So in taxes we have ten.

[44:06] Not all of them are tax credits indicated.

[44:08] Seven of the ten are.

[44:10] Okay.

[44:10] Are all the any of those other seven in trouble?

[44:15] No.

[44:15] They have no complaints, nothing with the agency.

[44:19] No, and I would say that the seven that we've syndicated all either closed last year or this year,

[44:24] and we work with a variety of very reputable capital partners, and who have all worked with DevCo

[44:30] in a prior capacity, as well, given that we managed seven over 70 properties.

[44:34] I thought I heard you say that there were other properties that they had violations on.

[44:44] They were only referred for administrative penalty for the Rosemalyn Medo Lane.

[44:48] They have had multiple referrals in the past, but the only active one at the time of the enforcement committee hearing was for Rosemalyn Medo Lane for the 2023.

[45:00] No other active referrals. For that, not this time now.

[45:07] Mr. Hubs, you have more?

[45:09] My name is Barry Palmer.

[45:11] Oh, I'm sorry.

[45:13] All right.

[45:15] With those rows law firm and we represent Sevco.

[45:18] Devco specializes in preserving affordable housing.

[45:23] Their business model is to acquire tax-predict properties that have completed their initial

[45:28] 15-year compliance period, and to recapitalize the properties

[45:32] with bonds financing and 4% tax credits.

[45:36] This allows for a major renovation of the properties

[45:39] in the range of 50 to 80,000 per unit.

[45:42] And most importantly, it commits the properties

[45:45] to remain as affordable housing for an additional 30-year period.

[45:51] The developers like Devco, Serving, and Important Public Policy

[45:55] interest by working towards preserving affordable housing, rather than allowing it to convert

[46:02] to market rate housing.

[46:04] Defko is acquired 10 tax credit properties in Texas so far, and they have re- syndicated

[46:10] seven of those properties and invested over $87 million in improvements.

[46:18] Defko has had some compliance issues, they have not been as diligent as they should have

[46:23] and compliance reporting, this was primarily caused by their third party management company,

[46:30] which has since been replaced. They've only had one property that has had serious physical

[46:36] deficiencies, and as it relates to that property, they spent over $2.3 million this year,

[46:43] and over $8 million since 2021 to address those deficiencies, which have been all now been addressed.

[46:50] The TDACA's rule says the developer can be

[46:55] divided if over 50% of their properties that are actively monitored

[47:00] have been subject to a referral for administrative penalty.

[47:05] Here, there have been four properties referred out of 10 properties.

[47:10] The reason staff calculates that they meet 50% requirement is

[47:16] they are not counting two properties that Devka owns

[47:20] because the properties were last inspected prior to their acquisition.

[47:25] Depth code has only these properties in one case for three years and in the other case for two and a half years.

[47:31] And there's nothing in the rule that defines actively monitored to mean the properties that T-D-H-E-A has inspected while you own them.

[47:41] The rules say that you're actively monitoring if the development has been inspected within

[47:48] the last three years by the TDACA, either by a fiscal inspection or a desk file monitoring

[47:54] review, both of these properties meet that definition.

[47:58] So, TTHCA should not be penalizing dev co when, because of the fact that the properties

[48:10] haven't been inspected in the last couple of years, and because they meet the threshold

[48:16] of having less than 50% of their properties being preferred for enforcement.

[48:21] We suggest that rather than a department that the Board impose a probationary period to await the results of the two properties that staff is saying are not actively monitored, or in the alternative to increase the monetary fighting being levied as opposed to a department.

[48:51] We've been talking about the, arguing with the size of the portfolio, right, actively murdered, and over 50% of that triggers what, in the role, like a mandatory department.

[49:02] Yeah, the language says, shall be referred for a department.

[49:06] Well, say, we buy the argument on less than 50%, does that prevent the board from debarring?

[49:14] They still have the authority to debar, right?

[49:16] Okay, so it's sort of new.

[49:18] Great.

[49:19] Okay, thanks.

[49:21] This is what it is.

[49:22] Mr. Chairman, I'm sorry.

[49:24] What I keep hearing is, we acquired on this affordable house.

[49:29] We acquired text credits.

[49:32] We acquired.

[49:34] And I keep saying the same thing over and over again.

[49:38] There's a very simple sentence.

[49:41] Safe, decent, and affordable.

[49:46] Yeah, you can acquire a lot, but a lot of this, Mr. Chairman, you're not safe for decent, so what's the point?

[49:53] We're quibbling with...

[49:56] I'm a retired lawyer, so I don't want to sound like a lawyer.

[49:59] I have seven properties, but you're willing to check two, so it's not 50%.

[50:04] Well, I can see why they don't like lawyers, but I'm retired, so that's it.

[50:08] But talk about safe and decent, that is the whole purpose of this, of our job.

[50:16] And I think you know which way I'm going to vote.

[50:18] So five years, I'll like give you five years.

[50:21] So in response to that, you know, Devco acquires expert at properties that have already gone

[50:30] through their initial 15-year compliance period plus some.

[50:33] So these properties are typically close to 20 years or more old by the time they require

[50:41] them and have been run down from usage and needs substantial capital infusions.

[50:49] And that's what they have done is recent decades of them and raised substantial amounts

[50:53] of capital put in and rehabilitated these properties spending in some cases $80,000 a unit

[51:01] to rehab the illness.

[51:05] So these are not brand new properties that they're acquiring.

[51:10] Are these penalties calendar would it start today and then go two years or is it

[51:17] round? Is it two years of applications for rounds or? It would be two years from the date.

[51:24] The order is signed, which is would be today. And would that preclude them from participating for

[51:30] to count two rounds?

[51:35] I believe it depends on what kind of credits are applying

[51:38] for in terms of the cycles.

[51:42] It'd be geared from any credit for, aren't they?

[51:45] Right.

[51:46] Yeah, it's just the application cycle periods

[51:48] for 4% and 9% are different, so.

[51:51] Okay.

[51:57] You have a statement in the packet here,

[51:58] the 2020 Department of Pro sure

[52:00] that had been a workup called,

[52:01] but the promised changes from 2020

[52:02] were not fully implemented.

[52:04] If you elaborate on that first moment.

[52:08] So, in the 2022 department referral,

[52:14] they were up for department for the same issue of having

[52:18] over 50% of portfolio, but at that time, I was not present for them, but I, for my

[52:24] understand, they offered a plan that showed how they would more properly manage more, you

[52:29] know.

[52:30] Corrected at the time of the enforcement committee meeting and they were also relatively new to Texas and to TTHCA. So the enforcement committee felt like they were, this would be like, oh, hi, here you're here in Texas. These are the rules and now you'll follow them. And then, and I just, just to kind of, this, this rule only came about in 2021 where it was the 50% of actually modern developments would be referred for department. And it's significant, it only handful of properties have been referred for this.

[52:59] significant that they've been referred twice under this rule.

[53:02] Thank you very much.

[53:04] But since that 2022 incident,

[53:09] the death co has been inspected by the TTHCA 10 times seven times.

[53:15] It's been passing one property this one in Dallas had a lot of problems

[53:21] the other two are still in process.

[53:23] But, you know, they passed their inspections, you know, most of the time since the 2022 problem.

[53:33] The social let me ask you is the department.

[53:36] You and your team convinced that the developer is indeed investing substantial amounts of dollars to rectify these problems.

[53:48] I believe so at the enforcement committee meeting, I believe they told us they spent over

[53:54] a little over $2 million fixing up the issues that that's property.

[54:00] This year alone and since that meeting we've invested probably an average of $500,000 a month

[54:07] on unit turn work, exterior and community improvements as well as security.

[54:13] We have security seven days a week.

[54:15] We have data and grants, we have a robust security monitoring system.

[54:19] So we are doing what we feel is the appropriate measure to regain control of this property

[54:25] and all the measures with replacing the management company, our on-site partner, as well as the

[54:30] Dev Coating being very committed to this asset.

[54:34] Okay.

[54:34] When is the next schedule re-inspection?

[54:40] So this property compliance is put them on an annual inspection schedule.

[54:45] So they just had one in September 26th, 2024, so the next one would be in September of 2025, I believe.

[54:53] Or were we able to do it more frequently, saying six months rather than in a year?

[54:57] I believe so if that's something.

[55:00] And then my next question is, does the board have the ability to say, will do the two-year

[55:10] department suspended until pending the result of the next, the next inspection,

[55:20] and if

[55:20] it improves, then fine,

[55:25] if it doesn't, then hey,

[55:30] let's get this answer here first of

[55:34] that's even an option.

[55:36] I think that from a procedural standpoint it would be more rational to table

[55:43] itself rather

[55:44] than issue an order of department and then try to suspend that order.

[55:51] I believe in the department we did a few months ago, we gave it, I think I was at a five-year

[55:57] department, but after two years they would have the chance to come to the board and ask

[56:00] to reinstate it based on the stress properties, et cetera, so that would be something.

[56:06] That is something we have done before the ability to seek reinstatement after a different

[56:11] but that was an acting or a new department deal by the board, as opposed to suspending the actual order of

[56:19] department.

[56:22] Mr. Marshall, you have any thoughts?

[56:26] No, sir. I'm ready to go.

[56:31] Do you have any other board members of

[56:35] the thoughts? I am, if they are indeed investing the funds to fix everything,

[56:44] I could be persuaded to not

[56:46] do an immediate department, or table it, or that portion will defer to the feeling of the rest of the board.

[57:01] Be willing to, second amendment, a motion that would be farther than for two years,

[57:08] allow them to be eligible after one year to have it reconsidered if they had if the department said they had done what they needed to be.

[57:20] read a statement. And that's similar to what you, I could

[57:25] circle just said that the five year or down to two, if they

[57:30] show they did. This may have two year down to one, and basically just

[57:34] eliminate some from the next one. But if they don't want to

[57:36] harm Michael, they won't be eligible. Sure.

[57:42] Mr. Chairman, they are exalt this.

[57:47] Mr.

[57:48] I'm going to have the board approved the agreed final order

[57:51] assessment administrative penalty for non-compliance against the

[57:53] was Montmetto's laying departments in the issue of fall or a department for term of two years.

[57:57] So with the option for appeal, after one year, against responsible parties, Evan,

[58:05] day, hundred, David, B, Ratliffe, Michael Falls, all of the scrap, authorised in addition

[58:10] to Board Action and Quest Resolution, Associate Documents and Sodom, the intent of that

[58:14] is that they do what they're supposed to do, they can come back within one year and

[58:17] come before this board for an appeal of that department.

[58:21] That second I have a minute, it's a proper, I mean motion.

[58:26] The concept of appeal is a little bit sticky on this.

[58:29] If you mean with the option to seek reinstatement upon showing of satisfaction of, and then

[58:39] it's up to you to determine, what are they seeking?

[58:41] Let me satisfy.

[58:43] Let me be the ceiling base more clear.

[58:45] So, we're going to start back at the term of two years with the staff's review and compliance

[58:56] of their existing properties, they may be reinstated after one year against their responsibilities.

[59:02] I don't help you.

[59:04] It does.

[59:05] Do you want them to come back before the board to seek reinstatement because it is a board order?

[59:11] If they meet the obligations of staff, they're welcome that we will say these people at

[59:18] time.

[59:19] That makes sense to me.

[59:21] I mean, there's no reason why I'd say, or if they've done it, then the staff is going

[59:26] to recommend, yes, they did it.

[59:28] They're compliant.

[59:29] Why haven't they come all the way here and do all that?

[59:30] I take that back, bring them to the board.

[59:32] That way, they're paying off the staff.

[59:34] And he could be on could have said it in gender, since we'd previously agreed to.

[59:39] Oh, that's fine.

[59:40] I have to write this down to get this.

[59:45] All right.

[59:46] How's your recommendation for us?

[59:51] I don't think we have to put the end on the consent.

[1:00:03] I believe Mr. Harper your suggestion is a final order of debarment for a term of two years, the

[1:00:12] statement at one subject to the responsible party's ability to seek reinstatement after one year upon

[1:00:24] showing of satisfaction,

[1:00:31] of all outstanding deficiencies.

[1:00:39] What would it be that we need to respond to that one open order within the time frame,

[1:00:43] which I think is December 26 of this year?

[1:00:47] Has the pending corrective action period?

[1:00:49] Or would we give credit to the fact that our score already increased 28 points from last year

[1:00:54] to this year as a significant showmanship of improvement.

[1:00:59] I don't think we should be bragging that we all got something to talk about.

[1:01:01] No, I do want to recognize all that sport they don't prove.

[1:01:05] I believe, so they still have a 90-day corrective action period to fix the deficiencies that

[1:01:10] were cited in September.

[1:01:12] So assuming they have corrected all those deficiencies at that time, and I would say assuming

[1:01:15] they have a passing score, because they will have a September 2025 inspection, assuming

[1:01:21] And those two standards are mad. I would say that would make sense to you.

[1:01:25] We're looking to you during that year, they're just barred to bring this board back

[1:01:31] or recommendation. We'll put on consent agenda that they're they're good.

[1:01:36] Yeah. Okay. That's that way. They'll only miss a year of through activity.

[1:01:44] Chairman, do you want to read this? We think you got it.

[1:01:48] I think I got to do, is, do we legally have it?

[1:01:54] Well, I just want more clarification.

[1:01:57] If we're saying that

[1:02:01] after a year, and this is, this is what I'm struggling with,

[1:02:04] what is the standard that the board wants to see them to have satisfied?

[1:02:09] They meet the condition.

[1:02:10] They meet the subject, all the requirements and intent,

[1:02:13] that they have met the objective of compliance with the board

[1:02:17] and their properties in which it means a passing score just on this property is up to

[1:02:24] one.

[1:02:25] Oh no, no, no, no, no, no.

[1:02:27] Okay.

[1:02:28] So no outstanding issues in one year would be subject to reinstatement by the board.

[1:02:36] I'm going to read this again.

[1:02:37] So we have a very clear.

[1:02:38] I'm going to have the board approve the final agreed to order assessing administrative

[1:02:42] bill for noncompliance to get rosemont metal lane parts and issue a final over debarment

[1:02:46] for a term of two years. With reinstatement, after one year subject to upon satisfactory

[1:02:53] compliance of all properties.

[1:02:57] For against responsible parties of Evan J. Hundin, David B.

[1:03:00] Rattlip and Michael Fouls, Elvis Cripp, Authorized and Condition in the Board of

[1:03:05] Equity and Quest Resolution and Associated Doctors and Orders on the side.

[1:03:09] Second.

[1:03:12] We also have an agreed administrative order for the $15,000

[1:03:18] administrative penalty that needs to.

[1:03:19] I think that was something administrative penalty for non-competence.

[1:03:24] It was the end. It was the change.

[1:03:28] Okay, so

[1:03:32] the motion made by Mr. Harper as detailed,

[1:03:38] seconded by Mr. Martians, all those in favor say aye.

[1:03:43] in the opposed hearing none motion carries.

[1:03:59] Okay, good discussion.

[1:04:02] We're still on in order on 18.

[1:04:05] Anyone?

[1:04:09] Okay, moving to item eight.

[1:04:11] 18 of the agenda.

[1:04:13] Presentation discussion and possible action on

[1:04:15] an order proposing the repeal of 10 tack chapter 22.

[1:04:19] Single family home program.

[1:04:21] And orders proposing new 10 tack chapter 23.

[1:04:24] Single family home program rules and directing their publication

[1:04:27] for public comment in the Texas Register.

[1:04:30] Good morning board members.

[1:04:32] I'm Abigail Versa, Director of Single Family and Homeless Programs.

[1:04:36] The item I'm presenting today is a repeal and replacement

[1:04:39] of the single family home program rules.

[1:04:42] These rules govern the administration

[1:04:45] of homeowner reconstruction, contract for deed,

[1:04:49] tenant-based rental assistance,

[1:04:51] home buyer assistance with new construction,

[1:04:53] and single-family development.

[1:04:55] Each of these home activities share a federal funding source, the home investment partnerships program, however, each of these activities is distinct and fills a specific need for affordable housing, spanning from monthly rental subsidy to home ownership and beyond including demolition and replacement of single family housing already owned by families, but that's unsafe and dilapidated.

[1:05:18] Prior to the rule draft presented to you today, SFHP, single-family and homeless programs staff,

[1:05:26] conducted a series of roundtables with program stakeholders.

[1:05:29] That included local governments, nonprofits, builders and consultants based on the feedback

[1:05:36] from the initial roundtable that we held.

[1:05:39] We drafted a rule and presented two more roundtables, one in person for those that were able to come

[1:05:46] Austin and one virtually so that we can ensure good attendance statewide.

[1:05:52] The bulk of the discussion was centered around the existing construction cost limits and the

[1:05:58] feedback we received from all the stakeholders was that we needed to raise these limits,

[1:06:03] but we also needed to ensure that we were still maximizing the impact of the program.

[1:06:08] So raising them all the way to the HUD limits for all activities was not advised by stakeholders

[1:06:14] or staff.

[1:06:14] We worked with the stakeholders to come up with reasonable increases and to make sure that

[1:06:20] projects that need additional funding for accessibility features and a robotic septic

[1:06:25] systems would still be able to utilize the program in addition to extra funding specific

[1:06:31] to environmental mitigation because HUD and FEMA have recently changed some floodplain risk

[1:06:38] mitigation requirements that make other caps not really workable. Other major updates to the

[1:06:47] rule include a reorganization of some sections such as moving off threshold, application requirements,

[1:06:54] cost limits and building design requirements to sub-chapter B instead of them being scattered across multiple

[1:07:00] of chapters. We also recommended that since costs were increasing and increased to threshold

[1:07:07] financial capacity of an applicant was necessary to ensure that they have access to capital

[1:07:13] for reimbursement or prior to reimbursement from the program. We also expanded access to the

[1:07:20] single-family development program to all eligible developers and let the no-fid define who

[1:07:25] be eligible, rather than restricting the use of these funds to choke.

[1:07:32] This allows us to broaden the use of home funds in the event the development of single-family housing for home ownership is prioritized and are updated our upcoming consolidated plan.

[1:07:44] Updates for ten-based rental assistance include expanding the use of HUD's small area

[1:07:49] fair market rent to all areas for which those rents are published rather than restricting

[1:07:54] this to metropolitan areas only and specifically stating that late fees are not an eligible

[1:07:59] program cost as this has been a source of confusion for some of our TBRA administrators.

[1:08:05] With that, I'm prepared for questions about the rule as proposed.

[1:08:16] Yes, absolutely. So cash reserve requirement is what we require from an applicant when they apply, they need to show that they have unrestricted cash of a certain amount of money depending on the activity, because the home program is reimbursement. So we need to make sure that they have some capacity to pay for cost and advance prior to requesting reimbursement from the department.

[1:08:38] This is usually shown through audited statements with an unrestricted net balance of whatever that amount may be.

[1:08:45] Sometimes they submit a verification of a line of credit in that amount.

[1:08:51] That's more typical for non-profits than units of local government.

[1:08:55] So it's just to ensure they have some cash in the bank to pay for expenses before reimbursement.

[1:09:03] And then a little bit more clarification on the TBRA programs in the language regarding the small area fair market rents.

[1:09:20] Sure, I think that's a pretty exciting change in the rule.

[1:09:24] It seems small, but it's a pretty big impact.

[1:09:26] So, HUD several years ago started publishing, instead of a fair market rent, which is

[1:09:34] a part of the calculation to determine how much subsidy we pay per month for a family,

[1:09:40] receiving 10-of-base rental assistance, it used to be county by county.

[1:09:44] So anywhere in, let's say, Williams and County, regardless of what area Williams and

[1:09:49] County were in, we used one amount of money to determine how much subsidy you'd get.

[1:09:55] Right now, we use HUD's small area of fair market rent only in metropolitan areas.

[1:10:03] And what the small area of fair market rent does is it breaks down that money not at a

[1:10:08] county-wide level, but zip code by zip code, by zip code, by zip code.

[1:10:12] And it's grown from certain areas, in certain metro areas, like initially it was just

[1:10:19] Antonio and Dallas, but now it appears that HUD is publishing the small area of fair market

[1:10:25] rent statewide. So what this does is it allows families to move to a higher quality unit,

[1:10:34] maybe with higher quality schools, in their same county without experiencing an increase of

[1:10:40] their out of pocket rent. So the rent matches the neighborhood more than the regular fair market

[1:10:48] So it's just breaking it down for zip code.

[1:10:51] Right, it's a more micro level breakdown.

[1:10:54] Computers and everything nowadays, it's a lot easier.

[1:10:56] Right, yeah.

[1:10:57] And, you know, it used to be just such a few small areas.

[1:10:59] But now they've published for every zip code in Texas.

[1:11:01] So we want to take advantage of that.

[1:11:03] Great.

[1:11:04] Do we have the board members of questions from the first up on this item?

[1:11:11] Any public comment on this item?

[1:11:14] Okay.

[1:11:15] Hearing none, I will entertain a motion for item 18 of the agenda.

[1:11:20] I moved the board to prove the proposed repeal of 10-tapped chapter 23 and the proposed new 10-tapped chapter 23

[1:11:28] got 10-tapped chapter 23, concerning the single-family home program, or publication of Texas Register for public comment.

[1:11:37] I'll ask this slide, conditioned and authorized in the Board Action Request Resolution and Associated Documents on this item.

[1:11:44] Okay. Thank you. Motion-based. Conoroy, seconded by Mr. Harper,

[1:11:48] all those in favor say aye. Aye. Any opposed?

[1:11:51] Hearing none? Motion carries. Thank you. Thank you, Abigail.

[1:11:55] We still staying in order. Okay. All right. Number 19 of the agenda.

[1:12:00] Presentation discussion in the possible action on an order

[1:12:02] adopt adopting amendments to ten-tack chapter 10.

[1:12:08] Uniform multifamily rules. Subchapter. Aye.

[1:12:12] It's an eye, okay, public facility corporation compliance monitoring section 10.1103 reporting

[1:12:21] requirements and directing it to be published for adoption in the Texas Register.

[1:12:27] Ms. Hammond.

[1:12:29] Hello, Chair men, board members, Mr. Wilkinson, I'm Amy Hammond, Manager of Compliance

[1:12:34] Monitoring.

[1:12:35] The next item on your agenda is the possible action on adopting amendments to the public

[1:12:40] facility corporation compliance monitoring rule. I'll be using PFC when referencing public facility corporations for the remainder of this presentation.

[1:12:50] Only 10 tax section 10.1103 reporting requirements went out for public comment. The public comment period was from August 9 through September 9.

[1:13:01] 24 entities provided public comment and are available with the Department of Response in the Board Materials.

[1:13:08] During the 88th legislative session, House Bill 2071 was enacted and amended Texas Local Government Code 303 with an effective date of June 18, 2023.

[1:13:20] I will be referring to this as the act for the remainder of this presentation.

[1:13:25] Per the Act, PFC developments acquired, approved or occupied prior to the effective date are governed by the law in effect at the date that that PFC was approved by a corporation or sponsor.

[1:13:38] The Act included language that required all PFC's PFC developments to submit an audit report to the department.

[1:13:45] However, PSC developments that are predate the act, the audit report requirements will be satisfied by simply demonstrating its eligibility to continue under the former law, but must fully address the requirements of 303.046B2 that identifies the difference and rent charge for income restricted units and the estimated market friends that could be charged for those units without restrictions.

[1:14:12] The first audit report was due to be submitted June 1, 2024.

[1:14:18] 10.1103 reporting requirements as written did not clearly outline this requirement

[1:14:25] was applicable to all PSC developments that are not specifically excluded by the act.

[1:14:32] This rule changed codifies that language in the act.

[1:14:35] The department was requesting that all PSC multi-family residential developments that did not

[1:14:40] submit by June 1st, 2024, be allowed to submit a required audit report no later than December 1st, 2024.

[1:14:49] Based on overwhelming public comment, this first reporting deadline for PSE developments not previously included in the rule will be extended from December 1st.

[1:15:00] 15, 2024. In addition, the Executive Director make ran a one-time discretionary extension of 30 days for good cause during the first reporting period only. The department must receive this written extension request by December 15, 2024 by FIPM Central Standard Time. Please note, this is a one-time extended deadline and possible extension request.

[1:15:27] Per the act, all reports will be due to the Department by June 1st each year with no exceptions beginning June 1st, 2025.

[1:15:37] Today, the Department has reviewed and published 14 audit reports on its website.

[1:15:44] We have also received five engagement letters with reports to be followed.

[1:15:49] Additionally, the Department has created a new audit workbook for the PFC Development

[1:15:54] initiated prior to June 2023.

[1:15:58] Please note that the PFC multifamily developments that are required to report to the

[1:16:03] Department do not have any TTHCA funding and the Department does not collect any fees for

[1:16:09] these audit reviews.

[1:16:11] Staff recommends the approval of the adoption of the amendments to the Public Facility Corporation

[1:16:16] compliance monitoring rule, and then happy to answer any questions.

[1:16:21] Okay, so to recap some of us, we're making a one-time extension exception, because the rules were unclear on the timing that everything.

[1:16:35] So after this one-time initial report is going to go back to that.

[1:16:42] hard deadline of June 1st. Okay,

[1:16:50] okay, well first board members have questions on

[1:16:53] this item. Just want to make it clear that we're on top of the PFC reporting

[1:17:02] issues and we're taking this very seriously as a department and I guess on the

[1:17:09] big picture it'll be interesting to see in the next legislative session how

[1:17:13] a additional clarification to get brought to the subject area from the legislature.

[1:17:20] Great.

[1:17:22] All right.

[1:17:23] Does anyone care to make a motion on item 19?

[1:17:28] Do we have some public comment first?

[1:17:30] I'm sorry.

[1:17:31] Thank you.

[1:17:32] Thank you.

[1:17:33] Thank you.

[1:17:35] Remember

[1:17:38] to come in and introduce yourself in what the organization you're with.

[1:17:45] You have three minutes, but you don't have to use them all.

[1:17:47] Thank you.

[1:17:48] Good morning.

[1:17:49] My name is Kirk Presley.

[1:17:50] I'm with O'Holopartners.

[1:17:52] O'Holopartners is a Dallas-based developer of workforce and affordable housing all across the state of Texas.

[1:17:58] And we were one of the over 20 groups that supported a letter asking the TTHA to reconsider the rule change to chapter 10 that was proposed.

[1:18:07] These rules were only first adopted in February and we believe the TTHA in error is re-interpretating, re-interpreting HP-271, only eight months after we believe they got it right.

[1:18:22] The law, HB-271, had three sections, O-421, which was new requirements to approve a new

[1:18:30] PFC to minimum standards for any new PFC, and three audit requirements for new

[1:18:37] PFCs, which is O-426, the specific section at issue today.

[1:18:43] Section O-426 be specifically says that that section only applies to developments to which

[1:18:48] O421 applies. O421, a section of all about approving new developments, how could it apply

[1:18:55] to old developments that had already been approved? We believe it is a mistake to make

[1:19:01] these changes to chapter 10 and that it law as it stands currently correctly interprets

[1:19:07] HP271. We also believe it is most egregiously a mistake to implement them with a due date

[1:19:13] out in only a few weeks. I beg the board not to commit an unforced error on this issue and

[1:19:18] to leave the rules that we adopted only eight months ago in place. Thank you.

[1:19:29] We did disagree. Yeah, we did disagree. And we think we've done the right thing. And we

[1:19:34] want these reports before the legislative session, not after. So that's why December.

[1:19:41] We understand the implementation roll out in the detail of how the laws and legislation

[1:19:48] was presented to us unclear, we're trying to help add clarity while giving some flexibility in this.

[1:19:55] So thank you. Thank you for your comment.

[1:20:00] Are there any other public comments on this

[1:20:03] agenda item here in the I get a motion yet? No, I'm asking for a motion on item 19 of the agenda.

[1:20:18] I move the board of proof for adoption into rule the amendments to 10 text and administrative code

[1:20:25] Registrate, all is described, conditioned, and we go back to our administrative code, Chapter

[1:20:32] 10.

[1:20:33] There you go.

[1:20:33] Section 10.1103, reporting requirements, and published the amended rule for adoption,

[1:20:41] in the Texas Registrate, all is described, conditioned, and authorized in the board action

[1:20:47] request, resolution, and associated documents on this item.

[1:20:53] The motion made by Ms. Pardillas is there a second.

[1:20:56] It's likely to be by Mr. Thomas.

[1:20:57] All those in favor say aye.

[1:20:59] In your pose, hearing none, motion carries.

[1:21:02] Moving on to item 20 of the agenda.

[1:21:09] Presentation discussion and possible action regarding material amendments to

[1:21:13] previous 9% competitive housing tax credit applications

[1:21:16] to award state housing tax credits.

[1:21:20] state housing tax credits and approval of the waiting list for the 2024 state housing tax

[1:21:27] credit applications.

[1:21:30] Mr. Goldberger.

[1:21:31] Good morning Chairman, members of the Ford, Josh Goldberger, 9% program manager.

[1:21:37] Item 20 concerns are inaugural awards of state housing tax credits to 9% applicants.

[1:21:43] In 2023, the Department was authorized by the legislature to allocate a new funding source.

[1:21:48] It credits against state insurance and franchise taxes.

[1:21:52] The enacting legislation established an annual credit ceiling of 25 million a year.

[1:21:57] It's important to note that unlike a federal credit,

[1:22:00] this figure represents the total 10-year value of what was available.

[1:22:05] The legislation also established a 5 million one-year priority set aside

[1:22:10] Expressly took assist existing 9% deals that received an allocation of credits in 2021 or 2022.

[1:22:18] For the cycle, the remaining 20 million has been distributed evenly between 20-24, 9% and 4% applicants.

[1:22:26] They didn't before you today, so the-

[1:22:30] Tax Credit Awards, 29% applicants, staff has recommended a total of nine awards, of which four are prior year applications

[1:22:37] of pride for the priority allocation, and five are 20, 24, 9% applicants. The nine recommendations

[1:22:44] reflect commitments of 14,675,000. These were not the only 9% applicants for state credits. The department

[1:22:53] received requests for more sales and tax grants than were available for both 2024 and 9%

[1:22:59] applicants and previously awarded deals. The authorizing legislation allows the department to

[1:23:05] create a metric to prioritize applications in years in which the program is over subscribed.

[1:23:11] In 2024, the department chose to prioritize applications proposing the most additional low-income

[1:23:17] units for households at or below 30% of area median income relative to their request amount.

[1:23:25] Applicants for the state credit met this priority by converting units previously proposed in their original

[1:23:30] application for 60% or so to 30%. So they're not necessarily constructing new units but making

[1:23:37] already proposed units more affordable to be competitive for the credit. The initial state tax credit

[1:23:43] award was made to the applicant with the lowest request amount per additional

[1:23:47] hands provided. Subsequent awards were made using the same metric until the

[1:23:52] department could no longer fund a full credit request. Collectively, the nine

[1:23:56] awardees committed an additional 262, 30% yets to be competitive for the award.

[1:24:03] Since only full credit requests were to be funded, 325,000 remains available and will

[1:24:08] be carried forward to next year's ceiling pending any changes to the award

[1:24:12] lists. The awards before you will be processed as material amendments to add the state tax credit

[1:24:18] as a source, increase the number of 30% units, and revise all necessary exhibits. In addition

[1:24:24] to the list of awards, staff has also included a waiting list of eligible applications that have

[1:24:28] not been terminated or withdrawn ranked into sending order of priority. This concludes my presentation.

[1:24:34] I'm happy to answer any questions you might have okay, thanks Josh. The

[1:24:40] These are a

[1:24:43] It's a one year

[1:24:45] Tax credit. It's not this year times 10 it is not this year times 10 the total value of this ceiling is 25 million

[1:24:52] So they'll be getting their request amount over 10 years

[1:24:56] But yes, that's correct. That's the total value of what we are this are being

[1:25:03] They will be getting their total value over 10

[1:25:06] 10-year increments that add up to the request amount that is reflected on the award mark.

[1:25:13] So for simple math, if it was a million dollars of credits of state credits,

[1:25:20] it would be a hundred thousand.

[1:25:21] It would be a hundred thousand a year.

[1:25:26] Yeah, I didn't write the bill.

[1:25:29] And there will be changes sought by the industry.

[1:25:34] This question.

[1:25:36] Okay. Thank you for that clarification.

[1:25:41] Okay,

[1:25:45] these are stacked sort of on already the federal

[1:25:51] tax rate. And what we're doing is by this we're trying to get as many of the 30% AMI units

[1:25:59] as possible, so are converting higher AMI units down to the 30% to 262, that's great.

[1:26:12] That's great.

[1:26:14] And we are anticipating additional playerifications and tweaks to the state program in this legislative session.

[1:26:23] Tom, I expect so, guys.

[1:26:27] Do any board members have questions on this agenda item for Mr. Goldberg here?

[1:26:34] Or do any members of the public have comments they wish to share with the board?

[1:26:40] Hearing none, I'll entertain a motion on item 20 of the agenda.

[1:26:45] Mr. Board.

[1:26:47] I'm of the board approve the recommended list of applications for final certifications.

[1:26:51] in the state housing tax credits in the 2024 state housing tax credit waiting list, all

[1:26:56] as described, conditioned and authorizing the board action request, resolutions, and associate

[1:27:00] documents on this item.

[1:27:03] Motion made by Mr. Harper, seconded by Mr. Thomas, okay, all those in favor say aye.

[1:27:09] In the opposed, hearing none, motion carries.

[1:27:12] Thank you.

[1:27:14] Okay, what am I on now, or I understand there, is this section where somewhere being pulled from

[1:27:19] to raise the agenda.

[1:27:20] Next page.

[1:27:22] Let's go ahead.

[1:27:22] Okay, 21.

[1:27:23] We're still going ahead.

[1:27:24] I'm 21 of the agenda.

[1:27:25] Presentation discussion and possible action on a request for return and reallocation and tax

[1:27:30] credits.

[1:27:31] Under 10 tax section, 11.65 relating to credit returns resulting from force measure events for

[1:27:40] 3,300 caroline.

[1:27:42] Mr. Campbell, he's silver tongue devil, convincing why we're supposed to do this again.

[1:27:48] Good morning.

[1:27:48] Well, I have good news for you. Several more have been kicked to next month since this morning,

[1:27:53] but not this one. So this is good. It's moving forward.

[1:27:56] It feels very strange to be sitting down. My name is Cody Campbell on the Director of

[1:27:59] Multifamily Programs for TTHCA and as Mr. Voskas just said, this item concerns a request to

[1:28:04] extend the placement and service deadline for 3300 caroline, which proposes 149 units in central Houston.

[1:28:12] This development was initially awarded tax credits in 2020 and received its first extension in 2022.

[1:28:18] Their current deadline to place in service is the end of this year.

[1:28:22] This request is somewhat unique as the development is 98% complete with a current completion date of December 5th.

[1:28:30] The remaining items needed to place in service involved some part work for the development emergency generator,

[1:28:36] some plumbing work on the water main and the issuance of the development certificate of occupancy.

[1:28:41] Because construction is scheduled to be completed so close to the deadline, the developer has requested that a three-month extension be allowed should become necessary.

[1:28:50] If the board approves this request, then staff will not execute that extension unless it becomes apparent that the development will not meet its deadline.

[1:28:58] If the next two months go according to plan and the development places in service timely, then no extension will be necessary and none will be executed.

[1:29:06] Staff recommends approval of this item and I'm happy to answer any questions that you have.

[1:29:09] Okay, so this particular force measure request as specific dates. We're not painting other financing debt.

[1:29:19] Sit your jurisdiction local jurisdiction.

[1:29:21] This is almost done.

[1:29:23] Yes, sir.

[1:29:24] In case let's get the lecture.

[1:29:27] Okay.

[1:29:27] That's a force measure.

[1:29:28] I can get behind.

[1:29:30] Do any board members have questions on this?

[1:29:32] I them.

[1:29:33] Do any members of the public which do you make a comment on this item?

[1:29:36] If not, I'll entertain the motion in item 21 of the agenda.

[1:29:41] Mr. Chairman, I move the board grant to request a treatment under an application of the

[1:29:44] Force Measure Rule to 3300 Caroline with a placed in service deadline of March 31st,

[1:29:51] 2025, all is described conditioned and authorized in the board action request resolution

[1:29:56] and associated documents on this item.

[1:29:58] Second, thank you.

[1:30:00] Mr. Thomas, seconded by Ms. Various, all those in favor say aye.

[1:30:03] Aye.

[1:30:04] In the opposed, hearing none, motion carries.

[1:30:06] Fantastic.

[1:30:06] Okay, so before I announce, sure.

[1:30:09] It's on the agenda whether we're pulling from the agenda.

[1:30:11] I was going to say I'll save you some reading.

[1:30:13] The next two are going to be brought to the December meeting when they'll be a little more fully baked and ready to go to the next one that we'll be hearing today's number 24.

[1:30:21] Berkburn at Royal Gardens.

[1:30:23] Okay, so we are pulling items 22 and 23 from this month's agenda.

[1:30:27] I am 24, presentation discussion and possible action on that request for return and reallocation

[1:30:34] tax credits under 10 tax section 11.65 related to credit returns resulting from force

[1:30:40] measure of events for Burnett Royal Garden as a great desire.

[1:30:46] Great.

[1:30:46] Thank you Mr. Vasquez.

[1:30:48] This development proposes the construction of 80 units in Burke Burnett.

[1:30:52] It was first awarded credits and home funds from the Department in 2022.

[1:30:57] The board granted an extension in 2023, and because of that, the development has a placed

[1:31:01] in service deadline of December 31, 2025.

[1:31:05] After award, the development had to get a phase-to-environment review, which presented significant

[1:31:11] complications related to potential groundwater contamination, which required significant mitigation

[1:31:16] efforts.

[1:31:17] As part of that mitigation, the groundwater had to be monitored for a period of one year.

[1:31:21] during which the environmental clearance for the development could not be issued.

[1:31:27] Of note, with home funds, if you are required to get an environmental clearance, you cannot do anything with the site until that clearances obtained.

[1:31:34] If you do purchase the site, take down the land, do any site work that's considered to be a choice limiting action federally, and you are then rendered ineligible for those funds.

[1:31:43] So it is a pretty significant reward block to not have this environmental clearance.

[1:31:47] The applicant has worked with TCEQ since that time to obtain the necessary documentation

[1:31:52] clearing the groundwater so that they can get their environmental clearance.

[1:31:56] This documentation was initially anticipated to be received in April of this year.

[1:32:00] Then in October, I believe they had, when they submitted this request, stated that they were

[1:32:04] going to have it by October 24th, but that's now been pushed out in additional 30 days by TCEQ.

[1:32:10] Once the letters received, the applicant can finalize their environmental clearance and move forward

[1:32:15] with closing on financing, the land and commencing construction.

[1:32:19] Unfortunately, until that letter is in hand, they can't do that.

[1:32:22] They have requested the extension based on the extensive delays that they've had getting

[1:32:26] that no further action required letter from TCEQ.

[1:32:30] Staff does recommend approval of this item, and I'm happy to answer any questions you may have.

[1:32:34] Mr. Campbell, can you give me some clear color of why we went through a phase one,

[1:32:38] and then needed a phase two, and the developer did not realize that they had issues?

[1:32:41] Certainly, so the QAP requires that they submit a phase one with their application.

[1:32:47] If a phase two is required, then they are required to certify that they will have that

[1:32:52] phase two completed before they close on their financing and meet any mitigation recommended

[1:32:56] by that phase two report before they submit their cost certification.

[1:33:02] I'm not sure that they anticipated having these issues with the groundwater as part of the phase

[1:33:06] one.

[1:33:09] on what the issue is in the phase two it is there was potential contamination

[1:33:14] with the groundwater mtb mt do you know what it was unfortunately I do not

[1:33:20] off the top of my head I did ask the developer to be here today though in case

[1:33:22] you have any questions for them they're here and back because so sure can you go

[1:33:30] the timeline again for us on. I guess when we expected the first T.C.C.C.C.C.C.C.

[1:33:38] would have been due to the report and then the 30 day delay certainly I'd be happy to

[1:33:42] and they also provided a written timeline if you're more of a visual person so they got

[1:33:46] their award in July. They were required to get their phase two which I believe was done in September

[1:33:53] of 2023. I'm sorry September of 2022 they completed their phase two and that was when they

[1:34:00] discovered that they were going to have to have the mitigation that required monitoring

[1:34:03] the groundwater for a year. That was completed in September of 2023, at which point

[1:34:09] that report was compiled and submitted to TCEQ. They had anticipated having that review

[1:34:15] in hand. I believe that's on the next slide. Yes, in April of 2024. And unfortunately,

[1:34:20] there have just been delays with getting that that close out letter from TCEQ ever since.

[1:34:27] So, you are satisfied that it is the delays or TCEQ that are all of this short, that if they had just put it delivered it in April or whatever it was.

[1:34:46] Sure. We'd be six months ahead and not have to necessarily do this.

[1:34:50] That is correct. So they've submitted everything necessary for their environmental clearance except for that final letter from TCEQ.

[1:34:55] EQ, once that clearance is ready, we've already awarded the home funds, staff has been monitoring

[1:35:01] this because we've got a loan that we're waiting to close on it and it really has been

[1:35:04] hedging on this letter for months at this point.

[1:35:08] So after this, and do we have any indication, the weather that's eventually going to be received?

[1:35:15] Sure.

[1:35:15] you is the most informally said they no problem we're just we'll get it out to you.

[1:35:21] So the most recent date was October 2024 that was kicked 30 days and I have not gotten any

[1:35:28] correspondence that indicates that there's an issue that they're not wanting to issue the

[1:35:32] letter. I think it's just delays if the getting it out the door is my understanding of the situation.

[1:35:38] Okay and then every other piece of the home loan is approved just pending

[1:35:44] signing once we get this that is that is correct so we're limited in how much we can do

[1:35:48] without that environmental clearance but the loan has been approved they've been giving us

[1:35:52] updated documents I will say that this is a very experienced developer you know this is

[1:35:58] not a brand new operation and so I am in clients to believe that they have done everything

[1:36:03] that they could to get this out as quickly as they can.

[1:36:06] Okay maybe we should let me I would love to have a representative from the developer

[1:36:11] Welcome, give us a short recap on what we're potentially waiting for, what happens, why we're not going to hear from you again if we approve this.

[1:36:29] All right.

[1:36:30] Remember, sign in and introduce yourselves and

[1:36:36] your mic's on.

[1:36:46] Michael Beardbeck who consulting and Mr. Chair to directly answer your first question.

[1:36:51] The proposed changes to the 2025 QAP effectively give this the last bite at the apple for a force measure if we don't close this transaction in 2025

[1:37:03] Unless that language is changed. We're locked out from an additional kick of the can down the road. So that's that's the first thing I wanted to kind of say

[1:37:12] As it relates to T.C.Q, it's been over a year delay.

[1:37:17] They have come back with comments.

[1:37:19] We actually had to resummit the report I believe in August with additional comments.

[1:37:26] They've kicked down the can 30 days for the response.

[1:37:30] Start with construction. And once that's obtained, we will be able to submit that final piece for the environmental review to be closed out and officially start closing the transaction with TTHCA, which what is the issue with the property?

[1:37:47] Well, I'm sorry, I'm sorry, you're losing your thoughts.

[1:37:50] So as I'm Shamsiden, I'm with HKC and the associates,

[1:37:53] we are the environmental consultant for the property.

[1:37:57] After they did the phase two, we did the initial investigation

[1:38:01] and the prepared the big report for the TCQ.

[1:38:05] There was some contamination in the soil, which is deep.

[1:38:09] And it's not an issue.

[1:38:11] that we propose to do a geotechnical barrier on the top.

[1:38:16] It's not a big deal about it.

[1:38:19] That's you with the ground water.

[1:38:20] What is the contamination?

[1:38:22] It's hydrocarbons related to the property.

[1:38:25] It was part of a big refinery that ended its operation in the 1970s.

[1:38:33] So, we did the groundwater monitoring initial one and there was one compound barium which is a metal net native to the soil that exceeded the level.

[1:38:47] The action level is 2.1 and so we did it the first time.

[1:38:53] And then at the second time we are at 2.4, out of 400 compounds, we only have barrier exceeding

[1:39:01] the limit at 2.4 compared to 2.1.

[1:39:05] So what we are proposing, we told the city of Bergprinet, they have in the rule a prohibition

[1:39:14] of use of ground water.

[1:39:16] And we did a drinking water well survey that isn't any well affecting it.

[1:39:23] So the TCQ, we proposed to them to put a geotechnical barrier for the soil and for the ground

[1:39:31] water that it's to do a long term monitoring that every six months we will collect samples until

[1:39:38] this barrier dropped to below the 2.1, they'll give us closure.

[1:39:44] So we requested from them to give us a conditional closure so that they can start their construction

[1:39:52] and move with the property and every six months for a period of two years

[1:39:57] to collect the water sample to prove that it's stable, decreasing, it's not a problem.

[1:40:03] Although from the beginning, it's not a problem because the city does not allow the use of a groundwater.

[1:40:10] Okay, so that was like just to sort of clarify, we're not there's no wells on this property for the drinking water.

[1:40:17] No, it's fair credit red tape is what we're really into.

[1:40:22] We're literally not going to tie into the water, but we can't get it without checking the boxes for TCQ.

[1:40:28] Now the TCQ, they want to make sure, now how sure they want to be sure? I don't know.

[1:40:35] But they have not given you a indication whether the leather that we're expecting that we expected already that they are late on it like 30 days and now they extended it for another 30 days because the TCQ they are remodeling the whole complex they are doing remodeling on it

[1:41:04] So everybody is working from his home and it's a little bit dissatisfied over there to get things on time

[1:41:13] We would love to be able to speak on T.C. He was behalf, but unfortunately they haven't given us any sort of assurances to meeting their promise

[1:41:21] Response time lines at this point. Hopefully soon

[1:41:25] But unfortunately it's taken much longer than we had already were hoping it would be resolved

[1:41:30] when is the

[1:41:32] on the state of the weather, if there is.

[1:41:34] I have here a response, this is from their website, that the reports where we submitted

[1:41:43] them on 822, 24 August 22nd, and their first response should be 1025, and we never received

[1:41:53] that, and their second response is 1124.

[1:41:57] So, I don't know if we will get them by the end of the year, or they are going to kick it through January.

[1:42:03] I don't know.

[1:42:05] It's, you know, they request this stuff.

[1:42:08] We do it.

[1:42:08] We submit it to them.

[1:42:10] And now we sit and wait.

[1:42:11] Three, four months for them to respond.

[1:42:15] Mr. Morse.

[1:42:16] Uh, extension.

[1:42:18] This, if it didn't happen.

[1:42:20] Regardless of what doesn't happen.

[1:42:22] And if we don't get this extension before December 20th, 20th of this year, this deal effectively dies, which has had a lot of work put into it, both from our standpoint and the agencies standpoint, like was right up, it's already been awarded funds, it's already got a committed investor, this is just a chicken before the A issue that we can't get past.

[1:42:50] Once we do, we're hopeful we can move forward with this quickly with closing with the agency as the only

[1:42:57] permanent lender in this transaction with locked-in rates. So the model should not really move much at this point.

[1:43:09] So if we were to approve the extension, there's nothing else

[1:43:14] Hending that you all need from any outside authority other than this T.C.C.C.C.C.C.C.C.C.C.C.C.

[1:43:22] No, we will. I mean, we need to get the agency to stamp off on our submitted environmental package

[1:43:26] for clearance to actually be able to get the notice to proceed. But once we have that and we

[1:43:31] complete the closing process with them, FDL team, no, it's a fully big transaction at that point.

[1:43:41] One more, just, I'm sorry, general question just understand, and there's a reason behind the question.

[1:43:49] Do you do any environmental work in the Houston region?

[1:43:54] I did few.

[1:43:55] But do you have any current big projects that you've been working on as the environmental?

[1:43:59] No.

[1:44:00] Because we are based on Afghanistan.

[1:44:01] we do with all our most of how it is, Texas, North, Texas, East.

[1:44:08] Okay, as we'll make sure there wasn't any particular newsworthy project in the Houston area that

[1:44:14] in the environmental consultant.

[1:44:17] All right.

[1:44:18] Mr. Harper, you have a question?

[1:44:19] Sure.

[1:44:19] Curiosity, you chose this asset, this property.

[1:44:23] You went through the phase one.

[1:44:24] You failed the phase one that triggered the phase two.

[1:44:27] You moved forward with the asset and the application.

[1:44:31] What did you know that you had very important problems?

[1:44:35] What was it triggered that you decided to keep moving forward with this piece of product?

[1:44:40] So for clarification, this is the second asset that this developer has in Berkburnet.

[1:44:48] The brand new elementary school was literally built right across the street.

[1:45:00] From this plot of land. So, you know, in the 70s, if it did operate as a small, you know, refinery, which is not uncommon in that area, but that was since gone, phase one said additional groundwater studies need to be performed, phase two, we did perform those.

[1:45:17] But the fact that matter is, the location outside of this one little hiccup is an amazing location for a family development in Burke Burnett because the parents, kids, can literally walk right across the street to the brand new school.

[1:45:32] And we felt pretty confident that since that brand new school was in close proximity to this, and they had to go through TCQ clearance as well, that it wasn't an insurmountable hurdle.

[1:45:43] it's just time has been not on our side.

[1:45:49] Okay, I have a proposed solution.

[1:45:52] We're just stretching or you want to comment.

[1:45:55] Okay, okay.

[1:45:56] Can you let me know?

[1:46:00] This is

[1:46:03] our approval and the extension.

[1:46:05] There's no outside financial institution

[1:46:08] waiting to get this approval

[1:46:10] before they can close their documents.

[1:46:13] is just us. So, and this needs to be approved, the extension needs to be approved before December

[1:46:18] 20th or so, which is after our next meeting, it is correct. So, is there any reason,

[1:46:26] and we expect the letters from the TCQ in the next couple of weeks, and I didn't imagine

[1:46:34] that this was my development. I would be ringing their doorbell every day to get that.

[1:46:40] is there any reason why we can't just table this until next meeting and then if we have that

[1:46:48] letter in hands approving it all, which it sounds like it will be that if we can just get them to do it,

[1:46:55] we could just put it back on the agenda and this will be a consent approval only because it's the

[1:47:01] extension. Sure. From staff's perspective I don't believe that there's any issue with

[1:47:06] going a direction. Do you have the only concern I have is T.C.Q. just hasn't given me any inclination

[1:47:14] that they aren't going to possibly attempt to kick this down to can or kick this down the road

[1:47:19] in other 30 days, especially with the holidays. We've got two holidays between now and the next time.

[1:47:28] I just don't want to come back up next month and not have any additional information outside of

[1:47:35] been presented today. I do understand the concern for kicking the can down the road, but I guess

[1:47:42] from maybe our standpoint is what would y'all do with TCQ had not responded next month and we're

[1:47:52] still in the same position. Would it really change y'all's perspective on this? If that fact pattern

[1:48:00] because your default support, if you don't get your fourth measure by December 20th, but not necessarily if you don't get your TCQ letter by December 20th.

[1:48:08] Is that correct?

[1:48:09] If we don't get our fourth measure by next month, this deals dead either way.

[1:48:13] So if we don't get the TCQ letter by two weeks from now, we won't have anything new to report next month other than we're still in the same way.

[1:48:23] If you got your fourth measure today, it gives you more time.

[1:48:26] to the group of clock doesn't really matter for the TCQ letter quite as right and and I guess what I'm

[1:48:31] saying is if the language holds true and the QAP we get this force measure we don't close

[1:48:37] we're dead in the water next year either way because the new force measure language requires that you

[1:48:44] close on construction before you're even eligible to consider for a force measure in the future

[1:48:50] If I'm going to act correct, so effectively, you know, get the letter and I'm going to get the

[1:48:56] deal of time. If we don't get the letter, the deal is going to naturally collapse. It's kind of

[1:49:01] what I'm saying. So this just buys this time from not having to come back up, bring back the

[1:49:07] environmental consultant if you have, it's just kind of, I don't know, it seems the logical thing

[1:49:12] since it will naturally implode, implode if we don't get the letter. And then we just let's

[1:49:23] Do you all know who the State representative is for that area?

[1:49:28] I would have to look back.

[1:49:30] I knew them when we applied a couple years ago, but I'd have to look to see who they are right now.

[1:49:43] You have to hear other opinions from the Board, but to me it's this department, the Board has been continuously

[1:49:52] And continually ask, not just, well, you guys, but project after project to have us be the ones

[1:50:01] who give extensions in hopes of something happening with some other time down in the future.

[1:50:13] In this particular case, you're all saying, I'm hearing that I understand it's kind of

[1:50:22] hopeful, but again, I just can't speak for T.C.Q.

[1:50:27] I just mean the squeakyist wheel possible at T.C.Q.

[1:50:30] and start if this deal is going to die after our D-sum,

[1:50:36] if we don't have the approved buyer December 18,

[1:50:39] whatever the next meeting is,

[1:50:45] think there are other advocates that in the area

[1:50:49] who want this and they could be pounding on T.C.Q.

[1:50:54] the same way you all are, or that I'm assuming that you all are.

[1:50:58] This might encourage you to be even more persistent with them.

[1:51:07] What circumstance would you get into if they came back with a remedial plan?

[1:51:18] So it's what it was contingent on this remediation.

[1:51:22] Yeah, so the possible most the quickest path forward at this point is for them to issue a letter for us to proceed with effective like a

[1:51:38] Conditional ability to start construction with his two years of additional monitoring of wells that we aren't going to use that seems to be the path that they're going to give

[1:51:46] of the least amount of heartburn for issuing very quickly.

[1:51:50] We just-

[1:51:51] And that would be a sufficient letter.

[1:51:54] We are confirming with TDACA's environmental staff that they will accept that as part

[1:51:58] of the environmental review, especially given the fact that we aren't going to tie into the ground

[1:52:02] water.

[1:52:03] And we have not heard back yet because this is a very new information we received from TCQ.

[1:52:09] But assuming we can get that letter in the very new future, we'll hopeful that that should

[1:52:13] solve the problem with kind of this caveat.

[1:52:15] it resolved with our staff that they would accept that. Correct. We've already

[1:52:21] posed the question and staff in, Laura, can speak more to that. And sorry,

[1:52:25] we're saying oh, yes. So, even if they, even if they, if they,

[1:52:32] TCEU gave you a letter saying, just we need to keep monitoring for two years. Does that allow you to start construction?

[1:52:41] Yes.

[1:52:42] Okay, so we wouldn't have to wait another two years.

[1:52:45] That is correct.

[1:52:46] That is correct.

[1:52:48] Lord, you want to add some of that.

[1:52:49] Yes, absolutely.

[1:52:51] Laura, am I right with Becker Consulting?

[1:52:54] I am the one that reached out to TTHCA to make sure that if we were to receive a conditional

[1:52:59] approval, conditioned upon the two years of additional monitoring that we could start construction.

[1:53:06] What I wanted to do is I reached out to environmental staff at TTHCA to kind of, okay, we're getting

[1:53:12] this letter, what do you environmental staff need from TTHCA, this conditional letter, a certification

[1:53:18] from the owner that they will continue that monitoring for two years. Do you wish to see those reports?

[1:53:24] So I have not heard back from TTHCA staff yet,

[1:53:28] but we're trying to work to ensure that as we're getting

[1:53:32] information, we are piping it over TTHCA's environmental

[1:53:35] staff.

[1:53:36] I will say with the comment earlier, I have gone actually

[1:53:40] to TCEQ and sat there in a lobby that's, as was mentioned

[1:53:45] earlier, disarray and just not moved until I've gotten

[1:53:47] what I've needed.

[1:53:49] It has been difficult.

[1:53:50] It took me three months to get what I needed.

[1:53:52] So we are prepared to go back and sit there, I guess,

[1:53:55] and I'll take my lunch.

[1:53:56] And sit there and wait for someone to get us the letter

[1:53:59] because we have waited for a long period of time

[1:54:02] for this letter, and they keep telling us, yes,

[1:54:04] we're going to get you the letter.

[1:54:06] There's never been a, no, there's a problem.

[1:54:08] No, we can't do this.

[1:54:09] There's another thing that's come up.

[1:54:12] What it's been is, yes, we're going to get you the letter.

[1:54:14] Yes, we're going to get you the letter.

[1:54:17] It's probably on somebody's desk,

[1:54:19] or it's just we're not sure but if we do need to I know how to be a squeaky wheel and I am happy

[1:54:26] to do that because I know that we are so close and I can see the light at the end of the

[1:54:30] tunnel but I did want to confirm that yes I have reached out to TTHCA staff about the

[1:54:35] conditional letter to start construction.

[1:54:39] Okay thank you.

[1:54:44] Okay

[1:54:48] I'm happy to entertain the motion

[1:54:51] My thought would be, table, until next month, I move, I move them, go ahead.

[1:54:56] Or grant the requested treatment under the application of force matured to the burn,

[1:55:01] Burke, I'm sorry, Burke, that, all right, Burke, that, that, that shouldn't be that hard.

[1:55:09] There just shouldn't be that hard.

[1:55:10] Work for that.

[1:55:11] Will gardens, all described, conditioned, authorized in the board action request resolution,

[1:55:14] so she documents it out of.

[1:55:15] Second, motion made by Mr. Harper, seconded by Ms. Sparius, all those

[1:55:21] in favor say aye. Aye. Any opposed?

[1:55:25] Note my abstention.

[1:55:27] Thank you so much.

[1:55:28] Five, five, five, one, one.

[1:55:33] Get them to take.

[1:55:36] Okay.

[1:55:37] I am having somebody whispering in my ear saying.

[1:55:42] We need to.

[1:55:44] Get out of order because.

[1:55:46] I hear that.

[1:55:48] The critically important this morale is back in here.

[1:55:51] But she's got to leave pretty soon here. So we're going to go back to item 14 on the agenda, correct?

[1:55:58] 13 or 14.

[1:56:02] 13. Okay.

[1:56:05] Item 13 of the agenda. Presentation discussion and possible action,

[1:56:09] regarding the issuance of a determination notice for 4% housing tax credits,

[1:56:14] for Creek Bend Departments and San Antonio. Ms. Morales.

[1:56:18] Good afternoon, Theresa Morales, Director of Multi-Family Bonds.

[1:56:22] Item 13 includes the issuance of a determination notice for

[1:56:25] Creek Band Apartments.

[1:56:27] This is a 4% tax credit application where the private activity bonds will be issued by a local

[1:56:32] issuance, the San Antonio Housing Trust PFC.

[1:56:35] Normally, consideration of the issuance of a determination notice would not come before the board.

[1:56:41] As part of the adoption of the stream line approach to local issuance 4% tax credit transaction

[1:56:47] And April of 2021 staff reserved flexibility on bringing these applications to the board if there were letters of opposition that were received and a desire of those individuals to address board directly or if a waiver of a QAP requirement was requested.

[1:57:04] The decision to issue a determination notices before you because of letters of opposition that have been received from several elected officials as well as members of the community.

[1:57:15] Creek Bend departments proposes the new construction of 312 units in San Antonio, serving

[1:57:22] general population households at 30% 60% and 70% of the area median income.

[1:57:29] The application was submitted in July and while it has been under review, there have been

[1:57:35] opposition letters received from state senator Donna Campbell, state representative Mark

[1:57:40] Dorazio, Erikaani Commissioner Grant Moody, and Dr. John Chapman, Superintendent for Komal ISD.

[1:57:48] Several letters of opposition have also been submitted from individual members of the community.

[1:57:54] The applicant also submitted a letter in response to some of that opposition.

[1:57:59] All of these letters are included in your board package.

[1:58:02] Staff has completed the program, underwriting, and compliance reviews and deems the application to have met the QAP requirements.

[1:58:10] And is therefore recommending that a determination notice in the amount of 4,972,498 in

[1:58:19] 4% housing tax credits be issued.

[1:58:23] Okay, so this is a 4% deal where we are not the bond issuer.

[1:58:30] And again, 4% deals is not a competitive award.

[1:58:36] It's, you check all the boxes, dial the eyes, cross all the keys, the department, automatically pass to approve it.

[1:58:48] Well, I'm sure there are some exceptions as to if we do something wasn't true or something like that.

[1:58:55] Yeah, I mean, we can't say like you have to vote.

[1:58:58] Staff recommendation necessarily, but yeah, it's, it's pretty much not quite ministerial,

[1:59:05] but close and okay and the so as it's presented to us and this is still just a 4% determination

[1:59:16] saying if you get all your other stuff done and you come back to us with your your cost certification

[1:59:25] then we establish the actual bond amount or the tax credit amount.

[1:59:29] Correct there is no legal requirement that a determination notice be issued.

[1:59:34] It's deemed by the industry to be a comfort letter of sorts that they can provide to their business partners indicating that the state allocating agency has looked at their application and is deemed it to have met the QAP requirements relating to threshold eligibility underwriting compliance and have determined a preliminary amount of tax credits that they could be eligible to receive, but then on the back end, when it comes back for cost sort of a-

[2:00:04] So,

[2:00:08] if anyone is trying to

[2:00:13] stop this project from proceeding forward, this isn't the right department that actually stops it.

[2:00:19] We're just, if we were doing the bonds or if we're doing another loan direct loans and stuff like that, maybe, but on the 4% know this, they're checking the boxes.

[2:00:28] we say yes you're eligible because you checked the boxes.

[2:00:32] In a way we are a party to the transaction by allocating the or issuing a preliminary

[2:00:37] amount of credits to be eligible for. Typically in this type of situation what I've done is

[2:00:42] referring to individuals to the issuer. They're required to hold a public hearing to meet federal law.

[2:00:49] And so that is really the opportunity for individuals to make their comments known to the issuer

[2:00:56] who is really the largest portion of the funding stack.

[2:01:00] Right, okay.

[2:01:02] Do any board members have questions from Ms. Morales on this?

[2:01:05] And I'll get to public comment here in a second.

[2:01:08] Does the board have the authority to say no?

[2:01:12] Don't give them the comfort letter.

[2:01:15] Yes.

[2:01:18] Do we need to answer that?

[2:01:19] That's what you're asking us.

[2:01:21] No, no, that's what the other speakers are about to ask us.

[2:01:24] I'm safe.

[2:01:25] I'm safe.

[2:01:26] I'm safe.

[2:01:26] that your recommendation notice the issue that you give the

[2:01:29] governor to correct but that's and that's because the application has

[2:01:34] met everything in our rules that it says it has to be correct in the reason

[2:01:39] for the appearance is to just inform us of what's going on correct

[2:01:48] Okay,

[2:01:52] if any members of the public wish to address the board on this, please come forward and sign in on the sheet and then identify who you're with.

[2:02:02] Now the curious are there's going to be multiple speakers here.

[2:02:14] Good afternoon.

[2:02:14] I'm Mason Brand, a retired Marine Corps officer, a husband and father of two children, and I live in the area.

[2:02:20] We have 5,256 signatures on our Chainsaw dork petition and county against this project.

[2:02:26] This is supported by the strong letters of opposition from Representative D'Aresio, Senator

[2:02:30] Campbell, Bear County Commissioner Grant Moody, and even Kamala St. Superintendent, Dr.

[2:02:35] John Chapman.

[2:02:37] There's no school buses provided in this area.

[2:02:39] There's no sidewalks on highly dangerous Borkfield Drive.

[2:02:43] Should the future children in these apartments walk to schools in the heat and the rain,

[2:02:47] the cold or the shoulders of highly dangerous workout drive during peak traffic hours with

[2:02:52] this twist is turns in its blind spots. The two driveways plan for this project are subject

[2:02:58] of highly dangerous vehicular blind spots being presented from the front. It's road on to

[2:03:02] workout drive with blind spots brought on both sides of the steep hill in front of the project.

[2:03:07] People are going to be put at an unacceptable increase risk for traffic accidents at this location

[2:03:11] because of this traffic quagmire.

[2:03:14] Additionally, our parents will not stand

[2:03:17] for San Antonio City via buses coming in

[2:03:19] and out of our local Kamala SD schools

[2:03:21] when there can be no guarantee

[2:03:23] that criminal elements will not end up

[2:03:25] on these public bus routes and into our campuses.

[2:03:28] This is supported in Dr. Chapman's letter.

[2:03:31] The environmental side assessment

[2:03:32] wreaks of poisoning in the future occupants of these apartments.

[2:03:36] The 37 acre property runs all downhill

[2:03:39] on a steep, great slope, northward, immediately into Cibilot Creek, a contributing zone to the Edwards

[2:03:45] Occupy.

[2:03:46] You mentioned the Houston Housing Authority being raided in October by the FBI and HUD in

[2:03:52] Spectra General's Office because a similar project was planned on top of toxic ash that was deemed

[2:03:57] acceptable.

[2:03:58] Although the Creek-Bin environmental side assessment remarks some of these talks and levels are

[2:04:02] acceptable, three are not marked acceptable, and none of these should be marked acceptable

[2:04:07] as it's right next to Cible O' Creek, as an example, polychlorinated bifiniles are highly

[2:04:13] cross-indogenic and can stunt reproductive system development in athletics, as adolescents

[2:04:18] excuse me. There's also a red-on gas being emitted from the ground according to the report.

[2:04:24] This property basically was used as a landfill, and now we know that TCEQ is conducting an

[2:04:29] investigation into this property. Petcore in the San Antonio Housing Trust should have had the

[2:04:34] environmental side assessment performed before they purchased the property.

[2:04:38] I thank you for your time.

[2:04:40] Mr. Grant, thank you for being here.

[2:04:43] Thank you for your persistent communications.

[2:04:46] I have been reaching the department in the board.

[2:04:50] Again, as I was trying to explain before,

[2:04:53] and that works with the same thing with the Houston project you referenced.

[2:04:58] Unfortunately, the way the tax credit process works.

[2:05:02] This particular type of text credit and the process were not the right group that can stop this.

[2:05:11] All those other bond issuers and financiers and TCEQ and local.

[2:05:16] Those were the groups that can do it.

[2:05:18] If this was a 9% application, all those factors that you brought up could really have impact.

[2:05:25] But unfortunately with the way this is right now, we're not that.

[2:05:29] There's not a whole lot of leeway that we can do unless we start breaking some rules.

[2:05:35] The summation.

[2:05:38] Is the property zoned for the purpose or intended to use it?

[2:05:43] My understanding is that it was re-zoned when they convinced the property owner to allow

[2:05:51] the city to re-zone it from multifamily housing.

[2:05:54] And then once that was completed they then purchased the property.

[2:05:57] it's in the co-mall.

[2:06:00] So, to be accurate, because I know not all of you may be familiar with that area, this is

[2:06:05] in Northern Baracown and the city of San Antonio and San Antonio and San Antonio and exit

[2:06:09] thousand feet to the left and a thousand feet to the right of the two-ede one.

[2:06:12] Mostly, against people's will, part of the House bill 347 passing.

[2:06:16] Either way, the circumstances exist as it is.

[2:06:19] If the area is zoned for co-mall-independent school districts, and there's a long history behind

[2:06:25] Why other school districts in that area did not provide schools in Northern Barre County understand what I'm

[2:06:32] I'll get right to my question. I'm sorry. It's own department if they weren't seeking 4%

[2:06:41] credits that we could that we basically

[2:06:45] are

[2:06:47] Given that

[2:06:48] we're talking about the federal government.

[2:06:52] They could build an apartment complex there,

[2:06:55] just a market apartment complex.

[2:06:57] Sure, and our community was still

[2:06:59] be opposed to it based on that.

[2:07:03] I'm trying to get that straight in my mind.

[2:07:08] That us say no doesn't stop apartments from going there.

[2:07:12] No, because the city of San Antonio's

[2:07:14] reasoned the property for most of the family housing.

[2:07:17] Yeah, and our community would be opposed to the project regardless.

[2:07:21] I understand, thank you.

[2:07:25] Okay, thank you.

[2:07:26] Again, we're appreciate your comments.

[2:07:28] Again, Teresa Staffs recommended.

[2:07:30] The motion is just to issue the determination of this at this time.

[2:07:34] That's correct.

[2:07:36] Would anyone care to make a motion on?

[2:07:40] Oh, do we?

[2:07:41] Well, the motion is asking for a staff's determination to agreement to issue the determination.

[2:07:49] Anything else you say could only work against you?

[2:07:52] Would anyone care to make a motion?

[2:07:56] This is convoy.

[2:07:59] I moved the Board of Proof, the issuance of the determination notice for 4% housing

[2:08:04] tax credits for creating bond departments.

[2:08:07] All of this described condition and authorized in the Board Action Request Resolution and

[2:08:11] Associated Documents on this side.

[2:08:13] Motion by my Ms. Conner, we're seconded by Mr. Harper, all those in favor say aye.

[2:08:18] Any opposed?

[2:08:19] Here's your announcement.

[2:08:20] I would like to be soon as abstain, you know, okay.

[2:08:24] So, five, four, no, Mr. Chairman, my vote is now

[2:08:30] four in favor, one, one, one, one,

[2:08:34] one opposed, one abstention, motion carries.

[2:08:38] Okay, thank y'all.

[2:08:39] So, no.

[2:08:41] Mr. Morales is up in another legislative hearing.

[2:08:49] So, we're going to go out of order again.

[2:08:53] That jumps us back to 25. Is that correct? Is anyone see otherwise? Okay.

[2:09:04] Okay. Hang on. So we are pulling at this point.

[2:09:10] So we're going to need to reset that. Can anyone else do to resources presentation?

[2:09:14] We are pulling 25 through 30,

[2:09:28] okay?

[2:09:33] So I ins 25 through 30 are being pulled from today's agenda,

[2:09:48] scanning ahead here to see where we are.

[2:09:52] Okay, so we're back to 31 of the agenda for everyone.

[2:09:55] The presentation discussion and possible action on a request for return and reallocation of tax credits.

[2:10:01] Under 10 tax section, 11.65 related to credit returns resulting from force measure events for a bounty legacy they'll sold.

[2:10:11] They're back.

[2:10:13] Item 31.

[2:10:14] Well, again, item 31 concerns a bounty legacy they'll sold in 84 unit elderly development in Brownsville.

[2:10:22] Originally awarded in 2023 the project has been delayed by a funding gap.

[2:10:26] caused by increased interest rates and unfavorable credit pricing.

[2:10:30] In order to remain feasible, the applicant has extensively redesigned the project and

[2:10:34] introduced an affiliate of the housing authority of the city of Brownsville into the

[2:10:38] ownership structure. These items were presented to this board earlier today as a material

[2:10:43] amendment. While these changes are expected to offset the financial shortfall,

[2:10:47] they have extended the project's pre-development and construction timelines.

[2:10:51] The applicant now expects to close in early December and start construction in February

[2:10:55] with a 16 to 18 months schedule.

[2:10:58] With this timeline, the project should place in service during the summer of 2026, but to provide a buffer of several months, the applicant is requesting a full year extension of the place in service deadline to December of 2026.

[2:11:12] Staff recommends approval and representatives of the development, our present should you have any specific questions.

[2:11:18] Okay, our, and let me know if we need to have the applicant representatives talk.

[2:11:25] The

[2:11:27] one else is pending for approvals on this project.

[2:11:33] Nothing from the department.

[2:11:34] Okay.

[2:11:35] Well, outside the department, I mean, so funding, yes, no funding that I'm aware of.

[2:11:41] I don't believe they're permit ready quite yet, but I know they've submitted.

[2:11:46] Okay.

[2:11:47] But there's no big structural financing that.

[2:11:49] Nothing that's been submitted.

[2:11:50] when you think more from the local jurisdictions.

[2:11:54] Yes, and that looking can correct me on that,

[2:11:55] but nothing of that nature has been related to us.

[2:11:58] Okay.

[2:11:58] Well, let's have Mr. Floor just come up with just...

[2:12:01] And Mr. Chairman, I'm just thank you for the opportunity.

[2:12:04] I represent the partnership as now the special limited

[2:12:07] partner given the adoption of the previous issue.

[2:12:09] Who are you?

[2:12:10] I'm Henry Floor, I'm the president of the House Development

[2:12:14] and I respond to your questions.

[2:12:16] We are prepared to close.

[2:12:17] We've actually established a closing date, not in early December,

[2:12:20] for December 20th, representatives of the new owner, our president, the CEO for the Brownsville

[2:12:27] Housing Authority as well as the CFL for the Housing Authority may get alert.

[2:12:32] We submitted actually for permits.

[2:12:34] We're hoping to get permits back in the next couple of days and then be able to close

[2:12:38] in December 20th.

[2:12:39] But we have a confirmed close and date.

[2:12:42] Our investor and our lenders have been selected and are in place already.

[2:12:46] Okay.

[2:12:46] The investors in.

[2:12:47] The Royal Bank of Canada is the investor and still are back out of Houston as the bank is the lender.

[2:12:53] Okay, but they have everything approved.

[2:12:55] Yes, they're just we've gone to committee and we're approved.

[2:12:58] So, are you in process of already getting the docs paper up yet?

[2:13:04] I mean, is it I assume so I don't know that definitively I would hate to answer incorrectly.

[2:13:11] Good afternoon, my name is Alyssa Flottis, my house development.

[2:13:15] I have been the lead project manager on this deal, but Senior is correct.

[2:13:20] We do have, we are getting loan docs this week, hopefully tomorrow.

[2:13:23] Our limited partnership agreement is supposed to come in next week.

[2:13:27] A draft, I'm sorry.

[2:13:29] Okay, there's nothing left for some committee to approve.

[2:13:33] The city to approve the housing authority to approve.

[2:13:35] No, that's correct.

[2:13:36] anything like every room for the housing authorities taking the official action, the city has

[2:13:40] reviewed matter and concurred with the support of us, and that both the lender and the investor

[2:13:45] have gone to convey it approved.

[2:13:47] And if all the stuff has come together on December 20th, you're just waiting for city permits

[2:13:53] before you can start breaking grounds.

[2:13:55] That's correct, yes, sir.

[2:13:57] Mr. Moore.

[2:13:58] I'm sorry.

[2:13:59] I'm sorry.

[2:14:00] I'm sorry.

[2:14:01] schedule here. These credits for a ratio to you in 23 is a correct. Yes, so that's correct.

[2:14:06] I don't see any activity on your schedule until the earliest date is 6124. What happened before

[2:14:15] that? That's a good question. And really when we created that timeline, it was not necessarily

[2:14:22] to look at the begin dates, but to look at the end dates, we did start development early in

[2:14:27] We started the zoning process, actually the site was owned.

[2:14:31] We started the plot process, the design process, all in 2023.

[2:14:35] We got drawings done by the fall of 2023, preliminary pricing came back.

[2:14:41] We had to go back and redesign.

[2:14:43] So that was all in the fall of 2023.

[2:14:46] 2024, we did our redesign.

[2:14:49] We started our plot entitlement process with the city based on the new site plan.

[2:14:53] and have since been trying to get through our entitlements and our permit process and get our

[2:14:58] I'm going to go in there.

[2:14:59] And I would...

[2:15:03] I would request

[2:15:12] that if you're going to ask for a force measures, I've asked about, I don't know, four months ago for timelines, present your story better than we started in June.

[2:15:26] We'll note that for the future.

[2:15:28] We actually received three allocations in that particular year,

[2:15:31] where we were able to close one.

[2:15:33] These two would have resulted in perhaps a unit reduction,

[2:15:37] and we did not want to reduce just tremendous demand

[2:15:39] for elderly housing in Brownsville,

[2:15:41] which is why we chose to partner with the local housing authorities.

[2:15:44] There's two items, even for that.

[2:15:45] Two forced measures.

[2:15:47] The second deal, even though that hasn't been presented,

[2:15:49] is also going to involve ownership change,

[2:15:51] we're bringing in the Cameron County Housing Authority for that chance.

[2:15:55] Thanks, Marshall.

[2:15:57] Does the, does this granting a force, your influence, your closing?

[2:16:04] No, sir, so that we could, once she's closed, then we could have a meeting and grant

[2:16:11] force measure.

[2:16:12] And, and you know, why we're here today is for our B.C.

[2:16:15] On a B.R. investor does not like to close without confirmation that you've received

[2:16:20] of force measure.

[2:16:22] So it is contingent on us.

[2:16:24] Yes, I'm a, I'm a sensor to question.

[2:16:27] Yes, sir, the, it is a request from RBC because if we do the math, it's going to take us past their deadline.

[2:16:32] And they want to form a margin of error for construction.

[2:16:35] Construction and Texas is running long, almost every single transaction.

[2:16:38] Not just ours, but everybody.

[2:16:40] Okay, so.

[2:16:42] Back to my reason of question.

[2:16:44] Your closing is contingent on us giving you force.

[2:16:47] Sure.

[2:16:48] That's great.

[2:16:49] Are he won't close?

[2:16:50] Are they won't close?

[2:16:51] All right.

[2:16:51] That's great.

[2:16:59] Well, you're the board members.

[2:17:00] I have questions on this item.

[2:17:06] Chairman, members.

[2:17:06] Thank you.

[2:17:08] Um, well.

[2:17:09] Hang on.

[2:17:09] I want to come in.

[2:17:11] One little comment.

[2:17:12] One little comment to make on the, let's get the vote.

[2:17:15] Or see if we can get a motion.

[2:17:19] Chairman, I'm ready.

[2:17:20] This for us.

[2:17:21] I moved the board grant.

[2:17:23] the request to treatment under an application of the force mature rule to a vantigly go on

[2:17:29] legacy that's sold. All is described, condition and authorized in the board action request,

[2:17:34] resolution, and associated documents on this side. Is there a second?

[2:17:45] Motion made by Ms.

[2:17:46] For us to approve Mr. Thomas 2nds, all those in favor say aye, aye,

[2:17:55] I'm going to, I'm going to, I'm going to, I'm going to abstain and I have a comment after.

[2:18:02] Okay, and I'm staying also.

[2:18:04] Ms. Conroy, how did you vote?

[2:18:10] Okay, all right, so we, three eyes, that's not enough, right?

[2:18:19] Four eyes, and two extensions.

[2:18:25] or zero one. So motion carries, when, okay, Mr.

[2:18:31] Mark, my only comment is that

[2:18:36] the year is my, I've been happy to grant them an

[2:18:39] anti-dair or something, so that they get closed and make it, make it, make it contingent

[2:18:45] on a closing to get the year, but I am understanding his explanation.

[2:18:50] Okay. The only comment I want to add for get which one of you answered Mr. Harper when he said we want to see more detail timelines understood and you all said next time.

[2:19:11] That's the right answer.

[2:19:13] Next, we are going to make sure work as hard as possible.

[2:19:16] Make sure there is not in next time.

[2:19:18] Now, as a point of clarity.

[2:19:20] Again, I apologize for speaking.

[2:19:22] I was referring to a Vonti Legacy Leon, which is coming next month.

[2:19:25] And we'll provide a much more expansive timeline.

[2:19:28] And he does say that, but we are next on the agenda.

[2:19:31] Oh, yes.

[2:19:32] I guess hopefully.

[2:19:32] Okay.

[2:19:33] All right.

[2:19:33] So we're, I guess y'all can stand there for now, right?

[2:19:39] We're, okay, so I then 32 of the agenda presentation,

[2:19:45] discussion and possible action on a request for return and

[2:19:48] reallocation and tax credits under 10 tax section 11.65 related

[2:19:53] to credit returns resulting from force measure events for

[2:19:57] candlewood village, Mr. Goldberg or introduce.

[2:20:00] That's not me.

[2:20:01] Is that the skip to one item?

[2:20:03] The skip?

[2:20:04] The number 32.

[2:20:07] Which is to the bottom?

[2:20:09] Which is to the bottom?

[2:20:09] No.

[2:20:10] No.

[2:20:14] I'm sorry.

[2:20:15] I see my stake.

[2:20:18] No.

[2:20:18] I have multiple windows open.

[2:20:22] Okay.

[2:20:23] 32.

[2:20:25] Okay.

[2:20:26] I apologize.

[2:20:28] So everything I said before except it's for a bond.

[2:20:31] Lange Legacy Leon.

[2:20:34] Lion.

[2:20:35] Lion.

[2:20:36] L-Y-O-N.

[2:20:37] Mr. Goldberger.

[2:20:39] Yes, Item 32 concerns Avanti Legacy Leon, which is an application almost identical circumstances

[2:20:45] as our previous request.

[2:20:47] This is also an 84 unit, elderly development in Brownsville, that is proposed by the same applicant.

[2:20:53] Just as Avanti Legacy Del Sol, a funding gap required a material amendment.

[2:20:57] this particular amendment request just came in a little bit later than the previous

[2:21:02] force measure, so this still under-reviewed by staff and we are not quite able to

[2:21:05] get it to the new member meeting. We'll say it does appear to be basically the

[2:21:10] same proposed changes as the amendment to Dell Sol. Again, these developments are

[2:21:15] essentially identical. So that will be taken before this board in December, but we

[2:21:19] were able to take the force measure request to this meeting. The request is

[2:21:23] the same as the previous item and again, Sapphire Commence

[2:21:28] of.

[2:21:29] So, are we separately doing the ownership change?

[2:21:35] Or is that the whole material amendment will be taken to the December meeting?

[2:21:39] And that will contain the ownership change and all of the design changes.

[2:21:43] So, today is just the force measure for this particular.

[2:21:45] Why aren't we doing this all in the same meeting?

[2:21:48] I can answer that for you.

[2:21:49] Again, Alyssa Flores, Maths, Development, I represent the developer on this deal.

[2:21:53] We have a 10% test deadline at 121.

[2:21:56] And unfortunately, we have to come up before that's full of one deadline, and that's why we're here today.

[2:22:01] Otherwise, it would definitely have been all one agenda item.

[2:22:07] And are we waiting for other outside groups to give the approvals or will we waiting for after?

[2:22:16] No, sir, the primary change between this transaction and the one that was just previously discussed is that we're only working with the Brownsville Housing Authority working with the camera.

[2:22:25] Okay.

[2:22:32] That's one of the big changes. The thing that may delay this, probably, 30 to 60 days more than

[2:22:38] those all, is an issue with the utility company. We are at a location where the Brownsville Public Utility Board,

[2:22:46] an AEP, another utility operator, a provider, overlap. We're going to get our services from Brownsville Public Utility Board,

[2:22:53] but they have to request permission because of the overlap from the Public Utility Commission.

[2:22:57] And they had to say that that made the last up to 60 days, even though we're calling folks,

[2:23:02] some parents to see if we could get that expedited, should be a priority for fun to review,

[2:23:06] but then the last they'd made the last another 30 to 60 days.

[2:23:09] So this one is the solicitor's calls in December.

[2:23:12] This one is scheduled in January, but it may set the February depending on the response from the puck.

[2:23:22] Board members of questions on this item.

[2:23:28] Chairman Florida's I say Chairman, because this I recall.

[2:23:32] We were the very first chairman at TDCHA.

[2:23:35] many, many months ago. When I was running E.D. He was just E.D.

[2:23:40] He had to know that's right. That's the first idea.

[2:23:44] I used to run the housing authority in Crystal City.

[2:23:48] Question, I have seen the quality of elderly housing that the bronze field people do.

[2:23:57] They look like condominiums. I'm just top notch. Everything and they're gated.

[2:24:04] Cameron, Cameron, are you going to be kind of similar?

[2:24:08] It's good.

[2:24:09] Yeah, that's good.

[2:24:10] That's good.

[2:24:11] That's good.

[2:24:12] But the plans are very similar.

[2:24:15] The amendment request is very similar.

[2:24:17] It's not identical.

[2:24:17] You know, my mantra is, say, decent and affordable.

[2:24:21] Yes, or say, fintes and being overall.

[2:24:24] Now, Brownsville Housing Authority is an extraordinary job.

[2:24:26] This is the deal we're doing with them.

[2:24:28] Actually, we are second deal with them.

[2:24:30] We did one back in 2012.

[2:24:31] Well, we're part of that portfolio that you referenced here.

[2:24:36] But this is Cameron County Council in the city of Brownsville, though.

[2:24:40] I'm just happy to see this doing a project actually in Cameron County.

[2:24:45] I need it.

[2:24:46] I do.

[2:24:49] Okay.

[2:24:50] Again, do any other board members have questions on this item?

[2:24:53] We're asking for how long is the one year?

[2:24:56] This one's a full year because you're still waiting in another 60 days.

[2:25:00] That's correct, Mr.

[2:25:00] I'm

[2:25:06] going to make a motion.

[2:25:07] Chairman, I'm moved to the Board grant or the request of treatment under an application of the force measure rule to

[2:25:12] Montellian, like I said, Leon, all is described, conditioned and authorized in the board action or quest resolution, and associated documents on this item.

[2:25:20] Motion, baby, Mr. Thomas.

[2:25:22] Seconded by Ms. Conoroy, all those in favor say aye.

[2:25:26] And the opposed or abstaining.

[2:25:29] So five, oh and one.

[2:25:32] Motion carries.

[2:25:34] Thank you.

[2:25:35] much. I just want to say for the board, I mean, the and the community here, the importance

[2:25:46] of not having a amorphous ill undetermined dates in the future. This was bought in my mind,

[2:25:55] borderline on because the date is still undetermined when we're going to get that. Those

[2:26:03] final P.C. I think I heard the

[2:26:07] approvals, but they'll be back.

[2:26:11] I just can't. Mr. Chairman.

[2:26:13] Yeah, Mr. Harper.

[2:26:16] Mr. Goldberg and Mr. Campbell.

[2:26:18] I really want schedules from the time you were issued to the current.

[2:26:22] Because giant years of no activity does not impress.

[2:26:32] I'm sure for the whole speaking for the whole board,

[2:26:35] we'll agree with that.

[2:26:36] Absolutely.

[2:26:37] Okay.

[2:26:37] Okay. 33. Correct? Correct. Okay. 33 on the agenda. Presentation discussion and possible

[2:26:45] action on a request for return and reallocation and tax credits under 10 tax section 11.6.

[2:26:51] 5 related to credit returns resulting from force measure events for candlewood village. Mr. Goldberger.

[2:26:59] All right. Our next two requests, considering candlewood village and country villa, two applications

[2:27:05] awarded in 2023 that proposed the rehabilitation of USDA rural development properties.

[2:27:12] The circumstances of these two requests are basically identical but we will not

[2:27:16] let's take them one by one. Candlewood Village is a 24-unit elderly development

[2:27:21] originally constructed in 1991, is located in Frankenstein, Anderson County. The project

[2:27:27] has encountered significant delays due to difficulties closing the acquisition transfer

[2:27:33] of the property with USDA. The applicant has related in their request that the transfer process

[2:27:39] was started in February of 2023 before the application was submitted to the department,

[2:27:45] and that the USDA was in receipt of their full application by October of that year.

[2:27:50] The applicant has provided a letter from USDA substantiating this timeline into King

[2:27:54] that they've been doing their due diligence here, but nonetheless stating that closing is not expected

[2:27:59] until February of next year.

[2:28:02] It seems that this process is simply taken longer than usual following a recent reorganization

[2:28:07] at USDA.

[2:28:09] Without finalizing the transfer, the application cannot meet its 10% test timely and cannot

[2:28:14] start construction, which puts the placed in service deadline.

[2:28:17] It's a separate amendment.

[2:28:18] Staff recommends approval of this request.

[2:28:21] I'm available for any questions and again, representatives of the development or present.

[2:28:25] Okay.

[2:28:25] So,

[2:28:28] do we have a more firm timeline at this point, when do we expect USDA's

[2:28:36] final sign off?

[2:28:37] We have a letter from USA that states February of 2025.

[2:28:43] That's when they expect to issue their final approval or

[2:28:48] that as my understanding is.

[2:28:50] But it has not been finally approved.

[2:28:52] That is of now.

[2:28:53] I believe so yes.

[2:28:55] However, the applicant cannot meet its 10% test without the force measure, which is kind of why we're in this situation with these two U.S.D.A. rehabs.

[2:29:05] And that's December.

[2:29:07] Is there

[2:29:13] anything else that is pending?

[2:29:19] We extend their time and the USDA issues their February letter.

[2:29:29] At that point, is there any other financing there?

[2:29:33] City were behind us.

[2:29:36] Letters that need to be done.

[2:29:37] The applicant can speak to specifics, but in the request letter this was the sole reason given for the delay.

[2:29:43] I'm okay.

[2:29:44] Maybe we can hear from the

[2:29:45] Mr. Rift.

[2:29:46] Mr. Rift.

[2:29:47] I missed the recent why the delay

[2:29:52] at agriculture.

[2:29:54] What's going on at agriculture?

[2:29:57] I'm Dennis Hoover and I've represented these two.

[2:30:00] Kind of wood village, and the facts for the same for country bill apartments.

[2:30:05] I'm sorry, are you a consultant or a developer or owner or a manager builder?

[2:30:12] I understand.

[2:30:16] This is not unusual.

[2:30:19] I mean,

[2:30:22] since their reorganization where they disbanded the state offices and now everything is a regional national.

[2:30:32] It's, you know, this is, I guess, the second, the third time we've been into for a

[2:30:37] force major on identical USDA role development properties, the dentist,

[2:30:46] I looked at the

[2:30:47] last one that we did from the time, you go through, you go through application, several

[2:30:53] months, you go through underwriting, several months and then it's handed off for the closing

[2:30:59] department, which these two are now, and that's everything's done, everything's approved,

[2:31:04] everything's ready to go. The last one, it took them six months before they issued clothes

[2:31:09] and instructions.

[2:31:10] Then USDA, or them TTH's, yes.

[2:31:13] No, USDA.

[2:31:14] All right. Thank you.

[2:31:16] So, it's not unusual. This is, I, it's going to continue until something changes. I know, no,

[2:31:24] I may be here next year, not on this one, but on the next year's new.

[2:31:27] Mr. Chairman, the reason I asked that is that, because of all this constant rare

[2:31:32] conversations, was I served in the Fed 25 years and I went through five different

[2:31:43] administrations so that they're telling you that you might have in February something is

[2:31:48] going to happen on the 20th and even before that sir there's going to be enormous

[2:31:54] people are going to be leaving and reshuffling. And what is the guarantee that you're going to

[2:32:00] get a letter saying go? I've been there four times when we had to pack and pack and pack and pack.

[2:32:10] I mean, exactly what's happening right now. A lot of packing. And a lot of your career people

[2:32:15] are trying to come and disappear. But that is reality. That's why I'm asking. Why is that assurance

[2:32:23] that they're going to give you, it's anybody's going to give you a letter in February.

[2:32:28] If there are a lot of acting directors, they say we don't have the authority.

[2:32:33] And that's very agricultural service. I'll always be in bad.

[2:32:38] I worked at Hartford 12 years. It was always agriculture who delayed, delayed, delayed.

[2:32:45] And that's going to get worse.

[2:32:47] For your personal statement.

[2:32:48] Well, so I live through this, or I live through this.

[2:32:52] I mean, I'm not trying to work with agriculture often times.

[2:32:55] The only time we were able to work with them was not the colonelists.

[2:32:59] And that was because the president of the United States had the Secretary of

[2:33:04] HUD called the Secretary of Agriculture and they were able to work together for four months.

[2:33:11] And then that's just reality.

[2:33:17] We do have a statutory obligation to award 5% of the ceiling to USDA deals, so this is going to be a recurring thing.

[2:33:26] We can't pull back from USDA Reabs, we have to award and if USDA is going to take more than a year to approve something, we'll be doing this again.

[2:33:38] I hope not. I hope we can get it done in less time, but it's not happening so far.

[2:33:46] And this is not the first time that we've encountered this from Cracker.

[2:33:49] The board that there's got to be some way to

[2:33:54] mesh the timelines that USDA requires versus what's in our tax credit.

[2:33:59] Cycle that it just, it seems like there's no way that the USDA, any USDA deal

[2:34:07] is going to be done in the timeline of the tax credit requirements.

[2:34:13] I don't know what the answer is, except for making USDA more efficient somehow, send Mr. Musco

[2:34:20] over there and see what you can do.

[2:34:22] Mr. Marshall, is there a statutory reason that they're in the same time frame that others

[2:34:31] are if this is a specific mandatory allotment, could we say on this specific mandatory allotment

[2:34:43] for USDA that the timeline we grant him is a longer timeline?

[2:34:50] No, because the timeline for tax credits is federal.

[2:34:56] So it's almost like we're having to do this.

[2:34:59] And you know, when we issue it, technically there are no extensions, but we force

[2:35:03] measure as our extension that's going to happen.

[2:35:07] And force measures, something you really can't do anything about the USDA if they're

[2:35:11] not responding. And again, obviously not just picking on you, but in general, we need to understand

[2:35:18] that timeline that it wasn't because the USDA was waiting on the applicant, it's because

[2:35:25] the applicant was waiting on the USDA. There just understaffed. And it always happened.

[2:35:32] You know, again, you're not the first one who's come to us with us.

[2:35:36] Mr. Chairman, you ready?

[2:35:40] And assuming no one wants to speak against the staff's recommendation, okay?

[2:35:45] So part of the board grant to request a treatment on the application of force measure

[2:35:49] over to candlewood village, all to describe condition authorized by the board

[2:35:52] action request resolution to associate documents inside of them.

[2:35:55] Second motion, baby, my Mr. Harper, seconded by Ms. Farias, all those in favor.

[2:36:00] I, in the opposed, during the unemotion care, okay, I am 30, can't, can't read my handwriting.

[2:36:10] 34 of the agenda, this one should go faster.

[2:36:13] Presentation discussion in possible action on a request for return and reallocation of tax credits under ten tech.

[2:36:19] Section 11.65 related to credit returns resulting from force reserve events for country villa.

[2:36:26] Yes, the global country villa is a USDA rehab from the same applicants. Circumstances are identical to our previous force measure

[2:36:33] But this time we're dealing with a 32 unit development in pre-air

[2:36:37] Duval County

[2:36:38] Staff again recommends a cripple. Okay, so timelines were all we're still waiting the same

[2:36:47] Yes, the we're the difference in year on the most of the same here and

[2:36:51] And the USDA letter referenced earlier also mentions this application with the same.

[2:36:58] Okay.

[2:37:02] I move the board grant, the request, the treatment, under an application of the force

[2:37:07] of material rule to count of the law.

[2:37:10] All is described, condition and authorized in the board action request.

[2:37:14] Resolution and associated documents on this item.

[2:37:17] Second motion be my Nesparias seconded by Mr. Harper all those in favor say aye

[2:37:22] I'm in the oppose hearing none motion carries. Thank you sir

[2:37:25] I am 35 of the agenda

[2:37:30] You know, maybe Mr. Speaker, yes, you should under retire and go back and go clean up USDA.

[2:37:38] Well, it's all a reasonable reason for you to be there, yeah.

[2:37:43] Okay, I'm 35 presentation discussion and possible action on a request for return and reallocation of tax credits.

[2:37:49] Under 10 tax section, 11.65 related to credit returns resulting from force measure events for VISTA at 1000 Oaks, Mr. Goldberger.

[2:37:58] Item 35 concerns VISTA at Thousand Oaks, a development to be constructed in San Antonio.

[2:38:05] Award in 2022, the Project's original and current placed in Service Deadline is December 31, 2024.

[2:38:13] This project was originally slated for completion in September, but during the properties construction

[2:38:18] the builder experienced material weather issues that resulted in a delay of approximately 54 days.

[2:38:24] These unexpected weather delays affected early construction activities such as framing, roofing, and paving, which have knock on effects for other trades complaining their subsequent work.

[2:38:34] The project was then further impacted by a CPS energy extended installation timeline of meters and other equipment, resulting in an additional delay of 22 days.

[2:38:44] Now, this project is still on track to place and service this year and hit that original

[2:38:50] place in service deadline, but with far room less room for air due to that two month delay.

[2:38:56] To give a little breathing room and account for potential last minute issues, the applicant

[2:39:00] has requested to extend the place and service deadline three months to March 31st, 2025.

[2:39:07] Staff recommends approval.

[2:39:09] I'm available for any questions and representatives of the applicants are present.

[2:39:11] Okay, this one's almost done. Yep, it probably will make it, but and I'll likely if it yes, but just in case

[2:39:18] Let's give another

[2:39:20] 90 days

[2:39:21] I mean board members have questions on this one. I think we want to speak against the staff recommendation

[2:39:31] See none. I'll entertain the motion on item 35 of the agenda. I move the board grant the requested treatment under an application of the force measure rule

[2:39:45] to Vista at 1000 Oaks with a placed in service deadline at March 31st, 2025 all is described

[2:39:55] conditioned and authorized in the board action request resolution and associated documents

[2:40:02] on this item.

[2:40:03] That's award salad.

[2:40:04] Second.

[2:40:06] Motion made by Mr. Martian.

[2:40:07] Seconded by Ms. Padeus.

[2:40:09] All those in favor say aye.

[2:40:11] Any opposed, tearing none.

[2:40:12] Motion carries.

[2:40:13] I am 36 of the agenda.

[2:40:17] Presentation discussion in possible action on a request for return and reallocation of tax credits under 10 tax section 11.65 related to credit returns resulting from forced measure events for the Rushmore.

[2:40:29] Mr. Goldberger.

[2:40:30] Our final request of the day, item 36, concerns the Rushmore, a 101 unit development in Keystone that received an allocation of housing tax credits back in 2021.

[2:40:41] The board previously approved force measure treatment for this development in 2022, and approved

[2:40:47] an allocation of supplemental credits in 2023, which extended the project's placed in service

[2:40:52] deadline, to December of 25. This project, like many awarded during that period, has struggled

[2:40:58] to maintain visibility amid significant construction cost increases. There are quest states that at

[2:41:04] the time of preparing the application in 2020, hard costs were anticipated to be 112,000 per unit.

[2:41:11] This figure is now projected to be almost $191,000 in nearly 70% increase.

[2:41:17] This is, of course, in addition to rising interest rates and, as a project in Houston,

[2:41:21] insurance costs that have gone from 425 a unit to 1,800 in the wake of several major storms.

[2:41:28] These visibility issues delay the project significantly as the applicant sought out various

[2:41:32] gap funding to keep the project alive.

[2:41:35] This is obviously taken quite a bit of time given the increases they are dealing with.

[2:41:39] But with the help of sources from Harris County and the city of Houston, the applicant has found a way forward.

[2:41:46] The project is now permit ready, they are set to close in weeks, and construction will begin within the month.

[2:41:52] The applicant is requesting a one year extension to the place and service deadline to December of 26.

[2:41:58] It does seem that with their anticipated timeline, they should be able to meet this pretty complete.

[2:42:03] So what we're dealing with here is a project that seems to overcome a lot of hurdles to maintain visibility and get to this point.

[2:42:08] Nonetheless, they have related to staff there and now ready to get this project built.

[2:42:14] Staff recommends approval and represents of the development our here should you have any specific questions.

[2:42:20] So again, this gets to the question of are there any if we grant the force pressure the extra time are there any other approvals financing of the city backing or anything like that

[2:42:38] that still need to take place, still need to be approved.

[2:42:42] I see that.

[2:42:43] Your representatives of the applicant are approaching.

[2:42:46] They should be able to talk to that structure in the meeting items.

[2:42:51] Yes, so yeah, it's a performer.

[2:42:53] This very former with coach Rose, we represent the developer.

[2:42:57] And we have a closing schedule for November 14th,

[2:43:02] but before that we are going to the Houston City Council on November 13th

[2:43:07] for final approval of their money, we've been told by the mayor's office and by the district

[2:43:15] council member that they are in support and they fully expect it to be approved on the

[2:43:20] 13th and we're moving forward with closing documents and anticipating a closing.

[2:43:26] The county is putting in $6.000 million to the steel and they have deadlines that they have

[2:43:35] to expend their money, it's our pothons that have to be spent by the end of this year.

[2:43:40] So they are pressuring us to make sure that we do close in November and we have everything

[2:43:48] in place except you're approval and this final City Council approval.

[2:43:55] And the district council member is on board?

[2:43:59] Yes.

[2:43:59] and supporting?

[2:44:02] Yes, yes, yes.

[2:44:04] Now that you said something, you get an introduced yourself.

[2:44:09] This is, I'm Jordan Finkelman, Vice President of Development,

[2:44:12] for our housing trust group.

[2:44:16] Happy to answer any other questions.

[2:44:18] So, I mean, you haven't heard any,

[2:44:20] both of you have heard any grumblings from the council members

[2:44:25] that anyone wants to tag something or their

[2:44:29] That's a bad link with Mr.

[2:44:32] Myer or anything like that.

[2:44:34] All indications are that we are good to go for this 13th meeting and that will have signature

[2:44:41] pages the same day as well, that we should be able to meet our closing on the 14th.

[2:44:45] Is the housing authority using the housing authority involved in the transaction they were?

[2:44:58] That's...

[2:44:59] The 13th.

[2:45:00] There's a process whereby anything they pass that has to be ratified at a following meeting, usually.

[2:45:09] I'm not in Houston.

[2:45:10] I'm in Houston. Okay. So, we're lenders willing to accept that vote to proceed to close.

[2:45:18] Right. So, I can monitor.

[2:45:20] Usually in Houston, there's some time lag between getting a resolution approved and getting a signed resolution.

[2:45:28] yeah that's what I was referring to but because of the time pressure that we're under

[2:45:34] with the county to close and spend their money the mayor has agreed to get signed the same

[2:45:43] day well congratulations on that and then I was going to point out in this particular

[2:45:53] So the circumstances,

[2:45:58] I would normally say let's get all these approvals before we give the

[2:46:01] force measure.

[2:46:02] But if they don't get the city of Houston vote approval and then the county money falls

[2:46:10] through because you're not going to get it closed necessarily before they have to apply those

[2:46:17] So, our extension wouldn't make a difference because the deal is going to die anything.

[2:46:22] Basically.

[2:46:24] Yes.

[2:46:25] All right.

[2:46:30] So, in questions, or are you ready to make a motion?

[2:46:35] Mr. Harper.

[2:46:37] Move the board grant or request or treatment on the application of course.

[2:46:39] Make sure to the rush for more.

[2:46:40] All is described.

[2:46:41] Conditioned authorize the board action request resolution.

[2:46:43] So, should you document the thought of?

[2:46:45] Second.

[2:46:45] Motion made by Mr. Harper.

[2:46:46] seconded by Ms. Padeus, all those in favor say aye.

[2:46:49] Aye.

[2:46:50] Any opposed, sir, in none motion carries?

[2:46:53] Thank you, guys.

[2:46:58] And again, just to reiterate for everyone,

[2:47:01] some of the key factors in my mind,

[2:47:03] not that I have to explain myself,

[2:47:05] but this had specific dates where there could need to meet.

[2:47:12] There's, we know when those approvals are going to be,

[2:47:16] it's not maybe, and in this case,

[2:47:18] if it doesn't get approved, well, it's kind of our extension

[2:47:21] that I'm almost a minute point.

[2:47:24] You done Josh?

[2:47:26] I'm done.

[2:47:26] OK, thank you.

[2:47:27] Thank you.

[2:47:30] So given what staff we have available,

[2:47:35] we're moving on to item 37,

[2:47:40] which is the last posted item, but we still have a couple of,

[2:47:46] OK.

[2:47:47] So item 37 of the agenda, let's keep this nice and short, presentation, discussion and

[2:47:55] possible action on the adoption of the repeal of 10 tech chapter 11 concerning the housing

[2:48:01] tax credit program qualified allocation plan, adoption of new 10 tech chapter 11 concerning

[2:48:10] the housing tax credit program qualified allocation plan and directing their publication

[2:48:15] for adoption in the Texas Register following the statutory opportunity for gubernatorial acceptance,

[2:48:22] revision, or rejection. Mr. Campbell, thank you. Thank you. Thank you just said it all.

[2:48:29] This item is the QAP. The board approved the draft QAP at the September meeting which was released

[2:48:35] for public comments and we received 54 comments on it in total. After your approval today,

[2:48:41] the QAP will be transmitted to the governor, no later than November 15th. The governor

[2:48:45] then has the option to approve a proof of changes or reject the QAP no longer than December 1st.

[2:48:52] The QAP in front of you today is substantially similar to the version that you approved for public comment in September and introduces no significant new comments.

[2:49:00] The changes made to it are largely clerical or administrative, although a few more substantial changes have been made in response to public comment

[2:49:07] and I'll go over these significant ones of those shortly.

[2:49:10] You may recall the staff went through two rounds of QAP revisions this year with an informal

[2:49:15] first draft of the QAP release for comment earlier this year.

[2:49:18] Comments were accepted on that early draft and responsive edits were made prior to the

[2:49:23] September meeting.

[2:49:24] Of the 54 comments that were received, many focused on a small number of issues in the QAP.

[2:49:30] The item that received the most public comment by far was the quantity of low-income

[2:49:34] units scoring item.

[2:49:35] Just as a brief refresher, the department saw a drastic decline in the number of units produced during the pandemic.

[2:49:43] In response to this, the 2024 QAP included a new scoring item that awarded points to applications that proposed a number of low-income units that exceeded the average produced between the 2022 and 2023 rounds.

[2:49:55] The item provides a number of options to score points with the most common options being for applications that provide either 10% or 20% more units than the average.

[2:50:07] Comments are overwhelmingly requested that these thresholds be lowered to 4% and 6%.

[2:50:12] Staffel leads that this is a drastic decrease from what is currently in the QAP and instead has suggested lowering those thresholds to 9% and 18%.

[2:50:21] anticipate that there will be a significant amount of public comments on this item.

[2:50:26] Moving on from that, you may recall that there was a significant amount of discussion at the

[2:50:30] September meeting concerning the at-risk and USDA set of sites. Each year, 15% of our

[2:50:36] credit ceiling must go towards developments that are at-risk, losing affordability. One third of

[2:50:41] this set of sites is reserved for developments that receive assistance from USDA, although these

[2:50:46] USDA developments may also qualify for the remaining 10% of the funding that's available.

[2:50:50] Without getting too far into the weeds, the disagreement heard at the September meeting largely focused on whether or not these USDA developments were taking up too much of that 15% set aside.

[2:51:01] Staff has made responsive updates to the QAP that we believe strikes a good compromise and we do anticipate that we'll continue this discussion for the 2026 QAP.

[2:51:11] This is the shortest QAP presentation that I've ever given this board.

[2:51:15] I know that we've all spent a lot of time and energy on this document, but the result is that we've got a set of rules that most people seem to be mostly okay with.

[2:51:23] As previously mentioned, I do anticipate that there would be a lot of public comments on one or two items, but overall I consider this to be one of the more successful QAP revisions that we've done, and I'm happy to recommend that you approve it.

[2:51:35] Thank you, Cody.

[2:51:35] Sure. So just to help manage expectations,

[2:51:41] Boo in here is wanting to make public comment on this.

[2:51:48] Okay. Do you all have you coordinated with each other,

[2:51:53] so you're not coming up here and saying the exact same thing

[2:51:57] to the extent possible.

[2:51:59] Okay, let's, I think I should we do this in order of all this tissue.

[2:52:15] What is his recommendation that we adopt the lower numbers? Is that in the QAP?

[2:52:21] In dispersion, that's in the board, that's what's in the board.

[2:52:26] Okay, we're going to start with the random topic here in the fuel.

[2:52:30] I'm just asking if you have a real, if you took speaking on the same topic, I want you to come up next so we can group you all together.

[2:52:38] So, please, okay,

[2:52:44] please endeavor to keep your comments short. I'm still going to set the timer at three minutes, but you don't have to use the full three minutes.

[2:52:55] I have my little thing that I'm looking forward to cutting off your microphone if you wrap up when after that thing goes.

[2:53:01] I mean, really, I really want to do that, you know, I hope them will be talks long, so I can cut it off.

[2:53:08] So, please introduce yourself, proceed, let us know what you're, which part of the topic you want to speak on.

[2:53:16] Absolutely, good afternoon, board. My name is Carson Loan, I'm with JPI, and I'm also the QAP Co-Chair for tap this year.

[2:53:24] And today, as you'll hear from a number of our colleagues, we are going to be speaking on the quality of low income housing units.

[2:53:30] I would like to start by thanking staff for a phenomenal draft, I mean, throughout we've had a lot of discourse and conversation and we do feel overall and overwhelmingly the QIP is in a good place in a good direction for 2025.

[2:53:43] But the one area that we do as an industry feel that there is some room to gain is on this quality of low-income unit scoring.

[2:53:50] Tap is of the opinion that the best affordable housing units are the ones that are being built and the ones that are being lived in by Texans.

[2:53:57] We are also of the opinion that competitive tax credits or a limited resource and should be used to maximize affordable housing and taxes.

[2:54:05] But to do so, the deals have to be financially viable.

[2:54:10] See, this quality of low-income unit point item did come about in this 2024 program cycle,

[2:54:17] and it was under the 20% and 10% program thresholds for the overwhelming amount of applications.

[2:54:24] It was a core concern of tap back when this was first appeared in the 2024 cycle.

[2:54:29] It has been an issue for us even when we spoke before you back in June in our large presentation.

[2:54:36] And it still remains a core concern of the industry today.

[2:54:40] And a big reason of that is you are virtually obligated to take these points.

[2:54:44] And I know it sounds like you have the option, but let me clarify what I mean by that.

[2:54:50] Developers often spend upwards of $100,000 to take the risk to submit an application for this program.

[2:54:57] We understand that that is a part of playing in this business.

[2:55:00] But if you are trying to spend this money and take that level of risk, you have to be cognizant

[2:55:05] about what are your chances you think of scoring a competitive application.

[2:55:09] And so developers are often pit against one another trying to obtain a scoring or winning application.

[2:55:16] And so to take that risk, you have to be able to maximize those points.

[2:55:20] So it often takes out, takes a matter of figuring out how to make the capital stack work.

[2:55:25] And oftentimes these developers are maxing out the housing tax credit request amount

[2:55:29] and they're maxing out the amount of debt they can request as a party to this.

[2:55:33] But enable to make those deals work, they're often relying on soft funding sources and tax

[2:55:38] exemptions as a means to either get more debt or find ways to fill in that capital stack to make

[2:55:43] the quality of units they committed to achievable.

[2:55:46] Today, before you, there were 16 force major requests on the agenda, and though I know we didn't cover all of them.

[2:55:52] The each deal has their own unique reasons for making that request.

[2:55:56] The issue still remains that there are still challenges for these deals to get done.

[2:56:01] And we believe as an industry that having these thresholds so high forces developers to try and take those points in order to make these deals work.

[2:56:10] See, the economic realities of these deals is you're hitting that maximum credit ceiling.

[2:56:15] And so that's why as an industry, we felt that the 4% and 6% requests are suitable for

[2:56:22] this year based on the numbers.

[2:56:23] Now I'd like to introduce Rachel Tom's Phillips to speak about the economic impacts.

[2:56:30] Good afternoon.

[2:56:31] As he said, my name is Rachel Tom's Phillips, and it's a little bit different of a perspective

[2:56:35] I am with regions affordable housing, so I am one of the financing partners.

[2:56:40] So today what I'm hoping to share with you guys is my perspective on the financing environment for these affordable transactions as well as my observations of the trends and the impacts of projects that are structuring themselves so that they meet these minimal unit threshold.

[2:56:58] So starting with the, starting with the current financing environment equity pricing has decreased four to five cents per credit just in the past year.

[2:57:07] This is with no anticipation of increase in the foreseeable future.

[2:57:11] What that means is on a per deal basis, there's a reduction in equity of approximately a million dollars.

[2:57:18] That's assuming a full allocation of two million, so that's right off the bat.

[2:57:22] The first mortgage debt proceeds available to the project have declined.

[2:57:26] That's for reasons such as inflation, operating expenses are higher.

[2:57:30] We've talked about insurance, that's higher, and interest rates, of course.

[2:57:34] Construction costs, they're stable as of current, which is great, but it's at a higher baseline per unit to construction cost amount.

[2:57:43] So the bottom line is projects awarded and developed today as compared to even a year ago need higher transaction equity allocations to have just the same amount of equity dollars invested.

[2:57:54] debt available to cover the cost is lower today than it has been, and at the same time cost

[2:58:01] of construction and financing have increased.

[2:58:05] So, that basically means that to construct a project that is on par with what it has

[2:58:11] been in the past, it's taking more financing resources.

[2:58:15] So, despite all that, we are seeing developers elect these points and structure their

[2:58:21] So what that's resulting in is the financing process is no longer on the nine percent's a streamlined financing process.

[2:58:31] It used to be a simple financing stack that you could guarantee was going to go from award to closing in a short time period.

[2:58:39] That is no longer the case.

[2:58:41] They're coming to us and there are gaps that need to be filled that are being filled in ways such as additional soft sources.

[2:58:50] restructuring the ownership to bring in a partner that will bring in a tax abatement.

[2:58:56] Those things, uh, the soft sources a lot of times the schedules for awarding those is

[2:59:01] not in sync with the tax credits.

[2:59:04] So ultimately for us, what is a really big red flag is the timeline for these projects.

[2:59:09] They're becoming more complex, less streamlined, and there's really a concern about the

[2:59:14] two-year federal place in service deadline. As you've heard earlier today, investors stop and take a look when they're reaching that place and getting close to that place in service deadline. We need a cushion. Unsecured equity partners are putting in capital dollars and they have to feel comfortable at the end of the day tax credits are going to be delivered.

[2:59:38] Hello,

[2:59:50] I am Sarah Andre and I am a consultant and developer in the tax credit world.

[2:59:55] I am going to try to boil down for you what Rachel just...

[3:00:00] I said as an impacts one specific deal. And I am using a specific project in Houston. So it's not made up. It's not theoretical. In 2022, I had a hundred and eight unit development in Houston. It costs 22.5 million dollars to develop. And we paid for that with a $4.7 million loan, 17.5 million equity. And there was a very small percentage of the capital stack.

[3:00:29] 2% little under 2% which was deferred developer fee and you know in case you don't know

[3:00:35] what a deferred developer fee is that's a paycheck that takes 15 years to arrive.

[3:00:40] So it's you know can be painful.

[3:00:45] It can be fine if it's small.

[3:00:48] In 2024 this exact same 108 unit development now costs 26.2 million.

[3:00:55] dollars, $4 million, a $17 increase, and the mortgage that it generated only increased by

[3:01:04] 0.1 percent, a whopping $74,000. And that is in my model. I kept the operating expenses the same

[3:01:14] as they were in 2022. The operating expenses, as you just heard, are not the same. If I do increase

[3:01:23] as operating expenses, well, even if hold on before I get to that.

[3:01:29] So this 20, 20, 40, all exactly the same as the 2022 one.

[3:01:33] You've now got a gap of $3.2 million, which cannot be paid out of a deferred fee.

[3:01:39] That's not just a paycheck that doesn't arrive.

[3:01:41] That's a paycheck that never arrives.

[3:01:44] And not just that, it wouldn't meet TTHCA criteria for financial feasibility.

[3:01:49] not to mention any lender or equity provider. So now let's talk about the expense of the impact

[3:01:56] of actual expenses on that same project. Now the gap goes to $4.8 million. We lose a million in loan

[3:02:06] proceeds, we lose 600,000 in equity pricing and I might have been overly generous with my equity

[3:02:13] pricing, but I tried to give, you know, best case scenario. So now let's see what happens

[3:02:20] when you add 10%. I'm not even going to add 20% because that is out of the question.

[3:02:25] 10% more units. And the reason I got to all this was because I was sitting around for clients,

[3:02:30] trying to noodle and go, well, is this viable? Can you buy this land? Can we make it work?

[3:02:35] So when you add 10% more units to that 108 unit development, you now have a 6.2 million

[3:02:42] dollar hole. So yes, we are going to go and try to seek tax abatement, soft money that

[3:02:48] as you heard today, you know, doesn't line up. So that is how these impacts one deal.

[3:02:59] Bottom line, you just can't buy as much as you used to be able to buy with the same amount of money.

[3:03:05] Thank you, Sarah.

[3:03:07] So, anyone else on this section of the

[3:03:20] rubby mire, I'm with Arkset Vanage and also speaking

[3:03:23] on for tap, I'm actually addressing the whole point category, Carson actually started on

[3:03:32] that and as I've said before many times, the points, you say don't, you don't have to take

[3:03:39] points, but as you know, we do have to take the points.

[3:03:42] And last year I gave you a baseball analogy that we had to swing the bat, and I think

[3:03:48] everybody remembers that that was there, but we were in the World Series last year so that

[3:03:52] would make sense.

[3:03:54] But we do.

[3:03:55] We have to take every point, it doesn't matter.

[3:03:59] And when I source sites for my clients, I look for sites that will score max.

[3:04:06] And if they don't score max, I throw a math window and we move on.

[3:04:10] And I'm looking for sites now that score the max and I can get the closest to the

[3:04:16] tie breaks.

[3:04:17] Because that's what I'm competing for is the tie breaks and who can I beat in the tie

[3:04:21] breaks.

[3:04:22] And then we all end up on top of each other.

[3:04:24] So score is not a matter of an option.

[3:04:29] It's a requirement for us to be able to compete with each other.

[3:04:33] I'm also on that the member of the Tap QAP Committee.

[3:04:38] We spent a long time on this item and we went back and forth of what was a reasonable

[3:04:44] percentage because we knew we weren't going to say it can go away.

[3:04:48] That wasn't going to be an option.

[3:04:50] So we looked to see what could be a reasonable percentage that you all could accept.

[3:04:57] To increase the units, not have a decrease in units, you could still get an increase in

[3:05:01] And it's, but that we could still make a viable development work, and the four and six was a reasonable amount that we really thought that we could move forward with as an industry, and that's what we brought to you.

[3:05:16] And I ask that you also be reasonable and accept our request. Thank you.

[3:05:22] It's really

[3:05:35] just in my or arcs advantage, I'm also speaking on the in support of taps comments.

[3:05:41] Chairman Vasquez, I know that you're a fan of Ditto and I'm here before you,

[3:05:47] bringing all the force that my Ditto can bring to bear.

[3:05:51] It's critical to note that we in the development community deeply want to provide as many housing units as possible.

[3:05:57] That incentive already exists outside of this point category.

[3:06:00] And the very, really issue that we're continuing with is the shrinking capital stack that we have less resources in order to make these units possible.

[3:06:11] We have increased interest rates, decreased credit pricing, increased costs, and the tax credit resource that isn't growing at a rate suitable to have a commensurate increase in the unit production at the level of this point items going to require.

[3:06:25] We're asking for the change in this point category to what is already a barely tenable

[3:06:29] four and six percent.

[3:06:30] This is an increase over the present unit production rate, which is already unsustainable

[3:06:36] for all the reasons that we've so carefully laid out.

[3:06:39] This point category at the described levels and the board materials is going to require

[3:06:43] creative solutions on the part of the development community and ultimately result in solutions,

[3:06:48] like requesting property tax exemptions, which is already even pointed out.

[3:06:52] The most egregious part of this is that none of this type of creative capital structuring

[3:06:57] should be required in healthy 9% transactions.

[3:07:00] Thank you.

[3:07:02] Thank you, sir.

[3:07:11] Good afternoon, Emily Ablin, with Brinshore Development.

[3:07:15] I'd like to quote Mr. Marchant from earlier, where he said,

[3:07:19] is this a systemic problem when you were talking about a rule that was creating an adverse

[3:07:23] consequence and unintended consequence?

[3:07:26] And that's exactly what this rule is doing.

[3:07:29] So...

[3:07:30] I would like to just point out that in 2024, this rule was introduced to increase the number of units.

[3:07:37] And I want to tell you what's going to happen because you don't yet see it in front of you, but we see it and we feel it.

[3:07:44] Next year, you are going to get a tidal wave of waver requests, or smuzure requests, amendment requests, because everyone, and I have a deal in 2024.

[3:07:58] Everyone for the most part I can imagine does not have a feasible deal because they are oversized with these additional units.

[3:08:06] So some credits have already been returned, which is extremely unusual to get credit returns

[3:08:13] this early.

[3:08:15] The rest of us are scrambling to find soft sources and figure out a way to make this

[3:08:20] deal work.

[3:08:21] We're optimist by nature, the only way that we could get the credits to begin with was to

[3:08:27] take the point.

[3:08:28] So here we are trying to figure out how to make it work.

[3:08:31] It's going to take time and it's going to take soft sources, both of which are severely constrained.

[3:08:38] So keeping this rule really inhibits our ability to deliver the units in a timely manner,

[3:08:45] because it takes so much more effort to get those units on the ground.

[3:08:49] And we can play out the scenario of, okay, well, we're just going to stop,

[3:08:53] allowing for some measures. We're not going to grant waivers. That's fine.

[3:08:57] You just go to the next oversized, infeasible deal on the list and we start the cycle over again.

[3:09:03] The end of the day, no units get developed when we could have been developing units all along,

[3:09:09] and we could have right-sized them from the beginning.

[3:09:14] As was a stutely noted in the last board meeting, creating effective policy is best achieved by

[3:09:20] collaborating with the folks who are charged with the development of these units.

[3:09:25] These are your boots on the ground partners telling you, this is not tenable, please at best or at worst go to the 4 in 6% that we have provided.

[3:09:40] It's still not tenable, but we wanted to give something.

[3:09:43] And, yeah, I, I, Sue's saying for a second here, yes, sir.

[3:09:50] Do you think that if we eliminated this rule that we would stop the soft money given

[3:09:54] the cost, the increased interest rates, increasing construction, increase in taxes, and increase

[3:10:00] in insurance this end of the market today?

[3:10:02] You are absolutely correct.

[3:10:04] The gap exists no matter what.

[3:10:06] The problem is it just makes the gap that much larger.

[3:10:09] It makes it that much harder.

[3:10:11] So whereas you have a municipality that has maybe two or three million to give to it, and I'm from Houston, so that's the kind of circumstance we're in, but you've got a ten million dollar gap.

[3:10:22] So now you've got to figure out some other way, and there's just no way to dumb down the build enough to make it financially feasible.

[3:10:31] So it's taking us an existing large gap and exacerbating it.

[3:10:34] I mean, what about the availability of soft funding?

[3:10:37] We have less than we did a year ago.

[3:10:39] I assume, Harper's going away.

[3:10:40] We just talked about that.

[3:10:41] Is that the case for the program?

[3:10:43] Absolutely.

[3:10:44] The state really enjoyed the benefit of a windfall post-harvey.

[3:10:50] And that created so many units.

[3:10:52] And those deals, you notice that those deals

[3:10:54] closed faster because they were able to,

[3:10:57] they could meet the readiness deadline

[3:10:58] because lots of additional funding was infused into those.

[3:11:02] All of that is evaporated.

[3:11:04] And so here we are with very little funds to chase to fill these gaps.

[3:11:16] Thank you, Miss Album.

[3:11:24] Hi, Catherine Sarr.

[3:11:27] Chair of the QAB committee.

[3:11:29] I just wanted to kind of wrap up the taps comment on this particular scoring item.

[3:11:35] So, you know, we've heard a lot about how 9% program has historically been a very streamlined process.

[3:11:43] It has a very simple execution because it doesn't have a lot of soft funding or additional

[3:11:49] partners, tax exemptions, all of these things that increase our timelines.

[3:11:56] In this inflationary environment that we've been in for the last several years, we've

[3:12:01] had to adapt and bring in all of these extra things and it does increase our timelines and

[3:12:07] you can see that in the levels of force measure requests that you've been seeing over

[3:12:12] the last several months, and frankly, for the last several years, I think that this scoring

[3:12:19] item will perpetuate that timeline unless this board says no. If you start denying these

[3:12:28] things, as Emily said, those units don't get developed, because you're going to go to the next

[3:12:34] deal in line, which is going to have the exact same problem, and then you're going to have to take

[3:12:39] credits back again and reallocate them, and this scoring item helps perpetuate that extended

[3:12:46] time period.

[3:12:49] It incentivizes us going and getting tax exemptions, which I know is not something

[3:12:56] that we want to be doing for a program that has historically been able to sustain itself.

[3:13:03] You know, TTHCA's underwriting box for these developments is very, very small, which is

[3:13:08] why we only have the ability to size the units kind of up front, and we have to size our

[3:13:16] debt within a 115 to a 135 DCR, that's a really small box, and when insurance increases

[3:13:23] dramatically, then we're way upside down, and the only option we have is to go seek a

[3:13:32] So, you know, we came to this scoring item trying to provide a compromise solution that would meet the objective of the state, which is to increase the unit production over what we currently have and what we've seen.

[3:13:51] without over extending these deals to where they're just not financially viable anymore.

[3:13:59] Last year we went to the governor's office with a two and a half and five percent.

[3:14:05] Benchmark request and now we've come up to four and six percent.

[3:14:09] I just don't think there's a lot more room to go up in this environment where we have decreasing equity pricing.

[3:14:17] So the energy credits that are in the market today are eating up all of the capacity that investors

[3:14:24] have for tax credits.

[3:14:27] So it's putting deflationary pressure on light tech credit pricing.

[3:14:34] So again we request that the 4 and 6% is what you adopt and we thank you very much for all

[3:14:41] your work on the QAP. Again, we're very happy with where it is, but for this item. Thank you.

[3:14:48] Did you get together and hang on? Okay. So, I mean, I'm assuming you're kind of wrapping up the groups.

[3:14:54] That's that's the efficient half comment. All right. One thing I want everyone to just think about.

[3:15:00] When we were talking about what force measures were approved today, versus what, which ones were I think were pull off off the agenda today. We weren't awarding any more money to anybody.

[3:15:13] A great.

[3:15:13] I mean, it was, and the retirement lines that were pretty narrow are defined rather than ill-defined and and or needing more money or more approvals some day may be we hope.

[3:15:28] So, those weren't approved to once today fit into a certain criteria that make that hurdle.

[3:15:38] What I'm now going more directly to the percentages that we're asking to increase,

[3:15:50] reading between the lines, I'm hearing that the responsible developers won't overstep and try to take a bigger bite,

[3:16:00] they won't reach these higher percentages

[3:16:02] to try to get the points and then later come back.

[3:16:07] So you're saying that,

[3:16:09] because everyone was on the same plane field in this, right?

[3:16:11] I mean, all the applicants are gonna have

[3:16:13] to, they're being scored on the same criteria.

[3:16:16] That's over.

[3:16:16] If some of them have more equity in their deals

[3:16:20] and are able to increase, get that 9% or 18%.

[3:16:27] they can they'll get they'll get the points you're well I'm hearing y'all say is that

[3:16:31] there's going to be groups that say oh I'm not going to win the award if I don't

[3:16:37] stretch even though I know I can't afford it because I don't have enough equity

[3:16:41] in the deal or other sources and things so is that really the internal debate that

[3:16:48] y'all are saying well some of these guys are going to go ahead and go for the points

[3:16:52] yes. Do you know that they can't have a viable deal? Yeah and I think you're starting to see some of

[3:16:59] those credits come back because the unit counts are not achievable. I'm obviously not going to

[3:17:05] name names but I know of specific deals that are very much underwater and are trying

[3:17:15] like hell to figure out a way to make it work because, again, this is, you know, a resource that's highly competitive and we all are going after it, but there are a lot of us in the room that we had applications that we couldn't make these unit counts work and we did not submit those applications because we knew that we couldn't achieve those unit counts.

[3:17:44] So it would be unfair for you to grant relief for the people that did take the points at a later time when they wouldn't have received those allegations without the points.

[3:18:01] And I think maybe Sally can speak to this.

[3:18:05] We ran through the list and looked at how many of the applicants took the points.

[3:18:13] And in the vast majority of the regions, you pretty much had to take the point to get the

[3:18:19] award.

[3:18:25] Mr. Kelly, would you like to touch on it just a couple of things, Chair?

[3:18:31] Catherine and I are for the record.

[3:18:32] Nathan Kelly with Blazer and President of the tap.

[3:18:36] We're competitors, right?

[3:18:37] at the end of the day, and this is a competitive process.

[3:18:41] We both feel like we can go to the city of Houston or any other municipality in which we're

[3:18:45] working and win those soft dollars, but ultimately those soft dollars are limited.

[3:18:50] And so we are going to elect to take those points and then go try to work our soft dollars,

[3:18:55] but that's not going to be the case for every deal.

[3:18:58] I was privileged to be invited to testify in front of the local government committee this

[3:19:03] morning, and the comptroller walks through the report that they published in August, and

[3:19:09] ultimately, you know, a lot of this question that was had was focused on supply.

[3:19:13] Supply is the issue.

[3:19:15] And speeding units to the market is the way that we solve the supply issue.

[3:19:20] As has been noted, this particular point scoring item slows our ability to get supply to

[3:19:27] the market.

[3:19:27] We have to complicate the transactions through the partnership structures that have historically not been a part of the 9% program.

[3:19:38] We have to seek soft dollars that have historically been reserved for the 4% program, not the 9% program.

[3:19:44] And it causes us to add time to the cycle, come back to you all on multiple occasions, and at the end of the day exacerbates that timeline to deliver that supply.

[3:19:56] to your point, y'all weren't allocating any more dollars.

[3:19:58] You were allocating time to the forced media request that we're here today.

[3:20:01] But that's the issue, right?

[3:20:02] That additional time to deliver those units,

[3:20:05] ultimately is what continues to compound our affordability problem and supply problem.

[3:20:11] And so what we are trying to work towards is a metal ground that gets us

[3:20:16] to delivering those units as we've promised,

[3:20:20] uh, under a structure that has historically been efficient,

[3:20:23] And that we feel like works for everybody at the end of the day.

[3:20:32] And in Texas, we allocate our credit six months into the year.

[3:20:37] In other states, they're allocating their $25 in 24 so that they have the full two years for purposes of place and service.

[3:20:46] We don't do that in Texas because of statutory reasons, that's not something that you all can change.

[3:20:55] But we, you know, it does eat into that time and that's why it's been so necessary in the past

[3:21:02] that nine percent tax credits be quickly deployable and not have these complicated structures.

[3:21:10] We talked about these complicated partnership structures, but ultimately the result of that is a tax exemption and a loss of tax revenue to a local municipality.

[3:21:21] There was a lot of discussion at local government regarding tax exemptions related to what I would consider non-housing tax credit finance to property.

[3:21:30] These tools have long been used to finance housing tax credit finance communities, and rightly so.

[3:21:35] But they've largely not been used to finance 9% housing tax credit deals.

[3:21:42] And so I would love not to complicate the issue from a political perspective by adding

[3:21:48] on additional deals, claiming tax exemptions that are ultimately going to raise the

[3:21:56] hair of smaller municipalities and give them another incentive not to support the development

[3:22:03] of affordable housing using the 9% housing tax credit.

[3:22:07] So Mr. Blazer, would you be interested in... I'm just going to throw this out here.

[3:22:12] Let's say magically this went away.

[3:22:16] Before the six, the 10, the 25, it's all gone.

[3:22:20] When I look up here and I'm sitting all these applications and I see non-taxable assets

[3:22:25] because we put it in the housing development in there, that's not the best for those cities

[3:22:30] How is long term? Would you be interested in a penalty? If you did that, it doesn't seem fair for the development. It's pushing the developers, but I feel like we're in a race for all these soft dollars and to remove cost and the easiest cost to get out of is a pay taxes, which is not long term that the best of that community to pay for roads, sewer, water, infrastructure, police forces and all the rest.

[3:22:55] Like I noted, 9% housing tax credit program has largely produced taxable assets in its history.

[3:23:03] And if this scoring item, the removal of this scoring item gets us back to a framework wherein

[3:23:09] we're not having to request tax exemptions on 9% housing tax rate for these communities,

[3:23:13] I think that would be fantastic.

[3:23:15] Do I think there needs to be a penalty associated with claiming exemption?

[3:23:20] No, I mean ultimately a developer has to come back before you all all right with the partnership structure

[3:23:26] Yeah, which in order to get that amendment if you if you did not take it's off money inside that

[3:23:31] No

[3:23:31] We

[3:23:32] Self money

[3:23:34] Is available to

[3:23:36] Rage the gaps, right ultimately what you're saying is you need a deal that has a clean capital stack in order for you to award tax credits to ideally yes

[3:23:46] Unfortunately, you know, I don't know that there's a way to regularly mandate, bringing clean capital stacks to you in an application.

[3:23:57] I mean, the other policy priorities that are driving specific sites while they've been opened up are still going to, in certain markets, mandate expensive sites or complicated construction or other elements that, you know,

[3:24:15] to invest money in in order to see housing go somewhere.

[3:24:18] And to that point, sorry, if we, if we didn't have these arbitrary unit counts that we

[3:24:26] are trying to get, we could bring you clean capital stocks that didn't have these complicated

[3:24:31] tax exemptions or lots of different layers of soft funding.

[3:24:36] If we could size the deal up front based on the available capital we have, then we wouldn't

[3:24:44] need to go out and seek all of these other things after the fact.

[3:24:49] Thank you.

[3:24:50] This is part of it.

[3:24:51] I think that along the lines of what he's talking about, would you be, would you not, I, I do not want this,

[3:25:03] these tax, these little taxes lost.

[3:25:08] So, in your capital stack, you can preclude, I mean, you can take out the tax exemption in exchange for, but it will cost you units.

[3:25:23] Well, in exchange for, not having, as you call unrealistic, unit demands.

[3:25:34] Yeah, ultimately, it's a function of how much debt the NLI on the properties create, correct?

[3:25:39] So, if you're paying taxes, you have lower NLI, which means you can support less debt.

[3:25:44] If you have zero taxes, you can greater NLI, you support more debt.

[3:25:48] That balances that capital stack.

[3:25:51] But what I think I hear you saying is, we don't want the loss of tax revenue.

[3:25:58] Ultimately, I would argue that's up to the municipality to decide whether or not they want to give up that tax revenue

[3:26:03] in the support of developing housing.

[3:26:06] It is in a perfect world, in a world where we're setting the criteria for the point for the scoring.

[3:26:15] I don't think it's illegal for us to have a criteria for scoring that protects the tax base.

[3:26:25] In my opinion, that's pretty much the only way I would go, I would be willing to think about not having some kind of incentive for unit production.

[3:26:39] So in reality, we don't need a point incentive to produce the maximum number of units that our capital stock can provide.

[3:26:46] we as developers want larger developments because they're more efficient to run.

[3:26:53] They carry higher debt levels.

[3:26:55] They're just just better overall financially when you have more units that produce revenue.

[3:27:02] So having a point incentive doesn't really produce the units that you're looking for.

[3:27:11] It creates an artificial lower limit on what you're awarding credits for, and what we're

[3:27:20] saying is that that limit is too high, that floor is too high in today's economic

[3:27:26] environment.

[3:27:28] Yeah, ultimately we're going to size the unit count on the affordable side in a way that

[3:27:36] gets us to the credit allocation amount that makes the math work.

[3:27:42] So that means we have to push more affordable units into the deal.

[3:27:46] But to a point, because once that math is allocating more affordable units,

[3:27:52] as a point structure currently requires, that isn't generating credits,

[3:27:57] then you're paying for those with debt.

[3:28:02] And the income generated from those units that aren't supported by credits

[3:28:05] is not sufficient enough to pay for the debt that you're having to take out to finance them.

[3:28:14] I understand you're argument.

[3:28:17] In this much, if you're thinking about introducing a point incentive to remain taxable,

[3:28:23] I think that would be kind of outside of the lines of what we could do now,

[3:28:27] as it went out for formal comment, but we can explore that for next round for sure.

[3:28:32] Well, I mean, that would be an exchange for you doing a way.

[3:28:35] Well, we couldn't, yeah, I was just going to kind of explain my thought process.

[3:28:41] And I think, you know, that is certainly something that, you know, the industry wants to look at the QAP from the top down for 2026.

[3:28:51] And if that's something that the state wants to incentivize, we, we don't have a problem with that necessarily.

[3:28:59] It's just, we have to do it in a way that creates financially viable developments.

[3:29:04] I'm just speaking myself, I

[3:29:10] should, I'm hot. Look at that, he's so good.

[3:29:15] I can do it. I can do it. We put a carrot there to incentivize taxable stuff. Something's got to pay for

[3:29:20] a police, all those things to do that, right?

[3:29:24] And we've already taken Fed dollars to make this work and it seems that it seems like we

[3:29:36] that are allocated in 2025 to not have to bring you force

[3:29:40] for sure requests, largely, right?

[3:29:42] And in reality, that may mean that they get started faster

[3:29:46] than some of the 2024 days.

[3:29:48] Now, hopefully that's not the case.

[3:29:50] But in a perfect world, we can take the allocations in July

[3:29:54] of next year and be closing those deals

[3:29:57] in accordance with the readiness to proceed guidelines.

[3:29:59] Thanks.

[3:30:01] And get a couple things. The, well, I'm hearing you all say, is that the, you're trying to warn us that the industry is willing to put in deals, applications to the tax credit process without having any idea. How are we going to pay for this? How are we going to fund this?

[3:30:31] We always do that in part, right?

[3:30:33] I mean, we put together budgets on very preliminary drawings with interest rate assumptions

[3:30:38] that are 12 months in advance of when the deal is actually going to close and what that

[3:30:43] means for equity pricing and everything else.

[3:30:45] I mean, each one of these has a significant amount of assumptions that goes into it as

[3:30:48] and that being soft dollars that aren't committed at that time, that application submitted

[3:30:54] ultimately, right?

[3:30:55] And so we have to compete for the credits, but we also have to compete for those other aspects

[3:31:00] to the deal with the soft funding and whatever else.

[3:31:02] If, if that's the case, but to your question,

[3:31:05] yes, everybody's going to elect those two points,

[3:31:07] because if they don't, they have no shot.

[3:31:09] You're saying they're already doing it, though.

[3:31:12] Yeah, I mean, I am saying that for this.

[3:31:14] I'm 100% saying they'll make it worse.

[3:31:16] It's amazing.

[3:31:17] Yes.

[3:31:17] It's going to continue what's happening now.

[3:31:20] OK, the force measures that this board

[3:31:26] been granting over time, recognizes that

[3:31:34] the federal economic policies and the COVID, you know,

[3:31:41] although all they truly unexpected, you universally, you know, problems weigh unforeseen

[3:31:49] from forward developers. 100 percent. We recognize, I'm going to ask private business people,

[3:31:56] we recognize. What the heck happened with these insurance costs tripling out? That's

[3:32:01] the type of thing.

[3:32:06] Going forward,

[3:32:10] I don't think any of us really expect these unexpected

[3:32:17] shocks to the system that may be coming up. We're not going to have rampant inflation

[3:32:23] that interest rates aren't going to go sky high to the contrary, the regulatory environment

[3:32:28] and business supply chain environment should actually lower, we should be seeing lower costs

[3:32:34] in the near future, we should be seeing lower interest rates in the near future.

[3:32:40] That should make

[3:32:41] these financing stacks easier to obtain. Now, we'll not have the big Arpo type of value huge.

[3:32:49] Right. There's still downward pressure on equity pricing right now because the equity market is over

[3:32:55] That's correct.

[3:32:57] Well, yeah, that aside, ultimately, like I said, those units are going to cost more than

[3:33:06] what the debt is going to be able to fund, because of the income restrictions associated

[3:33:11] with those extra units.

[3:33:13] And so that is going to require us to take a position of soft funding in that deal.

[3:33:19] We've said there's a limited amount of that soft funding, but we've got to elect those points

[3:33:24] in order to be competitive.

[3:33:24] that we've got to assume that our deal is going to win that self-funded, but ultimately there's

[3:33:29] limited dollars to go around.

[3:33:31] Well, and part of the point I'm trying to make is that we recognize over these unexpected

[3:33:35] huge shocks to the system, and that's not going to happen going forward.

[3:33:39] It's not going to happen going forward, so our approving force measures that aren't based on those

[3:33:48] the system,

[3:33:51] is going to be, I expect much more stringent and much more, we're, yeah, we're

[3:33:57] not going to prove a lot of things that we do to prove because today, and then when you come back,

[3:34:02] and I would expect that we're not going to be, we're not going to be, we're not going to be.

[3:34:06] I would expect this, I would expect that the force measure requests that may come out of the 24

[3:34:11] around or come out of the 25 round assuming it stays as it is right now are going to be

[3:34:19] related to a failure to obtain the soft money they thought they were going to get.

[3:34:23] And those deals were going to die and the process of action we were going to use them

[3:34:27] and try again the next year.

[3:34:28] Understood.

[3:34:29] I mean, that's, it's just, that's what ultimately, that's the delay of.

[3:34:32] Varring in these applying shock down to the, and again, I think, I think I've said this

[3:34:37] Therefore, if we don't have this artificially high unit count, I think that we're at the

[3:34:44] tail end of all the force measure requests.

[3:34:46] But if we continue to mandate an unsustainable level of units in a capital market that

[3:34:55] is declining, we are going to continue to see the force measure requests.

[3:35:00] You are, as a board, are 100% right.

[3:35:02] you can deny them, but it does delay that supply getting into the market.

[3:35:07] How is rent rates in the market and the oversupply of multi-family in the private market affecting you?

[3:35:15] It's not. HUD dictates what our incomes are each year. This year in the Houston area that was flat.

[3:35:22] So while my insurance premiums went up 15% my real estate tax valuation went up 15%.

[3:35:28] My income's for flat.

[3:35:29] My net income actually dropped because the city of Houston's

[3:35:32] cost of water and sewer increased and we deduct that out of our rent.

[3:35:36] So my income's are declining year over year on my existing portfolio of properties.

[3:35:42] But that was, I was saying, you know, what I'm seeing in the market is the rent rates

[3:35:47] are not accelerating as fast as the costs are coming through.

[3:35:49] That's 100% true.

[3:35:51] And I also believe that there's way too many that multi-family with private equity

[3:35:55] and then they're built a ton of stuff, which is now in a street fight for

[3:35:59] Bill Andores.

[3:36:00] In the luxury space, yes, sir.

[3:36:02] Yeah, thank you.

[3:36:04] What if the incentive was for total units rather than affordable, meaning you could use

[3:36:08] market rate units?

[3:36:09] I think that would be better.

[3:36:12] Yeah, ultimately, you know, I would love to get back to a time where our average project size was north of

[3:36:20] country units and more, right? 125, but we were developing 170 unit communities where in

[3:36:27] 120 or 25 of those were affordable and the balance for market rate.

[3:36:32] That's a more efficient property at the end of the day.

[3:36:35] Now, I can tell you the economics of that time in 2016 and 2017 were dramatically different

[3:36:40] than they were today, so that unit count is no longer available.

[3:36:43] But if we could get to a mixed income framework,

[3:36:50] that ultimately doesn't have a requirement

[3:36:56] for affordable units that's getting us over what those actually producing credits, then

[3:37:01] yes, that makes for a more efficient property at the end of the day.

[3:37:05] It's German. What is what powers does the board have in the subject that is before us?

[3:37:17] Is it an end of all? What actions are available to us today?

[3:37:26] I believe at this point in the QAP.

[3:37:30] Global process, since the concept is already in, baked into the, we could use our higher incentive numbers

[3:37:41] that we proposed, or we could accept the industry's arguments and lower the percentage incentives.

[3:37:53] And all of us that we do, it's up to the governor to approve, he could change it.

[3:37:59] We could lower it to 4 and 6 and he could put it back to 15 and 25.

[3:38:03] I mean, there's all kinds of ways on.

[3:38:08] Or we could, I don't know if can we eliminate the concept altogether?

[3:38:11] I mean, he could change it to zero.

[3:38:12] Then, you know, so he could change the numbers around as much as you'd like.

[3:38:15] We cannot introduce new concepts that weren't published for formal comment.

[3:38:23] I think even changing it from affordable units to total units is a slight enough.

[3:38:28] I was wondering about that.

[3:38:30] I'm both, you know.

[3:38:32] Give a legal opinion on the fly, whether it was watching.

[3:38:36] Well, that's Quentin Barrett.

[3:38:37] Yeah, there we go.

[3:38:38] Okay.

[3:38:38] So you've said that was too far.

[3:38:42] No, I think he said that would be, you know, there's some grey area there.

[3:38:46] So that would be a slight enough of a change.

[3:38:49] It's not a totally brand new scoring category or anything.

[3:38:52] So if we, Mr. Chairman, get a blue sky just a little bit, if we were to put some kind of a substance change in there and keep the number as the QAP has suggested that we could always, in fact, everything they say comes about the next year, then we can go back to the next QAP and moderate those numbers.

[3:39:22] are the government to moderate those numbers when he he can moderate for

[3:39:27] 2025 you can change it for you know in the next few weeks for us it wouldn't be

[3:39:33] until the 2026 good people once it once you vote today yeah it's there's no

[3:39:38] additional amendments that we can make so we have a number now right

[3:39:45] he won in the air I thought it was a place all there was his nine in 18

[3:39:50] No, I mean, in the QAP, that's 24.

[3:39:53] The current one, it's, yeah, it's 10% and 20%.

[3:39:56] Yeah, and how many, do we know how many applications

[3:40:01] took those points?

[3:40:02] Two points.

[3:40:05] Functionally all of us.

[3:40:06] Sally has this information.

[3:40:11] If you were lucky enough to be in a sub region with the competitor,

[3:40:13] you would not have to, you know, that might happen.

[3:40:14] That's exactly right.

[3:40:16] Sally Barge, it was starts for development.

[3:40:18] Yes, so Catherine asked me to look into those numbers.

[3:40:21] And there were about seven different categories,

[3:40:23] but in summary, all the ones in pole position, or didn't have any competition, the ones in

[3:40:32] pole position took the points, and there was one region, three are, were neither took the

[3:40:37] points, there were two applications, but that was known at pre-app, and then so there's

[3:40:44] one deal in six you that did not take the points that is at the bottom out of the money.

[3:40:51] So, and basically, everybody, but one took this one category.

[3:40:58] And while I'm hearing you say, they have no idea how they're going to fund their capital

[3:41:01] sector.

[3:41:02] I don't have a dog at that hunt, so, but I would assume that there are deals out there that

[3:41:09] did not have a commitment of that soft funding at the time of application, and they city

[3:41:14] of Houston, for instance, put forward a no-for that folks were applying for.

[3:41:18] Some will get it.

[3:41:18] will not. And so I believe the deadline for that submission was last month. I don't know that

[3:41:25] they've made formal awards, but they're getting close. So you'll know soon enough.

[3:41:30] And the other thing was anyone that had soft funds as part of their initial application to TTHCA,

[3:41:38] you included a condition in your underwriting report that those soft funds a commitment for those

[3:41:45] was due on November 1st with their carryover, that date just passed. I don't think that we know

[3:41:52] how many of those people came in with the soft funds and how many did not. So I know I had asked

[3:42:01] Cody that, but he said that they were still gathering that information since it was just last

[3:42:12] So just let me bounce a concept off of you, raising the total number of toll units,

[3:42:25] making the number 5 can.

[3:42:32] So I think the language says low income units now, so it would be a simple strike of that, right?

[3:42:37] And then that's just in the percentage.

[3:42:38] Just asking.

[3:42:39] Yeah, I believe that's what we're proposing.

[3:42:41] Go to 5 and 10 and make it total units rather than just affordable units.

[3:42:45] I think that's much more tentable than what we have now.

[3:42:48] But that's just an idea.

[3:42:51] One out five and ten on affordable units.

[3:42:56] Not to have any opposition to that.

[3:42:58] Just right now it's ten and twenty.

[3:43:00] Nine and eight.

[3:43:02] Yeah.

[3:43:02] The key was published with nine and eight.

[3:43:04] Yes.

[3:43:06] And then we'll just experience next year.

[3:43:10] I wouldn't have any objection to going forward to five and ten.

[3:43:16] Five and ten.

[3:43:18] affordable, yeah. It's not not totally. So it's 10% number is still going to be quite high in a lot of places.

[3:43:28] And not to close up. Everyone's on that's playing with those same rules.

[3:43:32] They are, but, you know, they are also as Emily said, we're all optimists.

[3:43:39] We get the credits and then figure it out.

[3:43:43] I'll be happy to vote on this as it's proposed, but I think about Cory, if we don't take that.

[3:43:51] I mean, I would, if it were total units, I would argue you could stick with your original percentages.

[3:43:59] Right.

[3:44:01] Apparently the community doesn't agree with you, but nobody wants to do 100 and whatever unit deals these days.

[3:44:07] Somebody said get a rope.

[3:44:08] Yeah, I'll do that personally, but I'm not speaking on behalf of Depp.

[3:44:13] All right, I'll do that personally,

[3:44:18] but I'm not speaking on behalf of Depp.

[3:44:18] We need to start moving this.

[3:44:27] I think a reasonable compromise would be to go to the five and ten is supposed to

[3:44:34] in 18,

[3:44:37] affordable, affordable, affordable.

[3:44:41] Does any board member have any objections to that or

[3:44:44] they?

[3:44:50] Sure, sure, good.

[3:44:57] Most of Campbell are the argument from the tap in there.

[3:45:00] Yes, and the market. Yes, sir. We could do zero. We should have in ten. We could do eight, nine and eighteen. We could do ten and twenty. Sure. You live this fight every day. Yes, I have a recommendation. So I presume that the taps request would be zero and five. I was kind of surprised when four and six came in. So much higher than what I expected, but it is a little bit higher.

[3:45:25] I would be, I've got numbers. If you'd like actual numbers, it's to what these things look like. We'd love the data.

[3:45:31] And I had this printed out, and it is conveniently on my desk in the office, so I was

[3:45:37] frantically calculating things on my phone and scribbling them down.

[3:45:40] Just to give you an example, in what's a good region, region 7, let's use Austin as an example.

[3:45:47] Our baseline average is 86.7 units.

[3:45:50] The existing 20% threshold put to it 102 units.

[3:45:55] The 18% threshold put to it 100, so it's a reduction of about 2 units, not super meaningful.

[3:46:01] 6% brings us down to 92 units. So it's a pretty big dip. That being said it is higher

[3:46:10] than the average, which when we initially discussed this item was staff's concern was

[3:46:14] how do we catch this falling knife and terrible analogy? But how do we catch the number and

[3:46:20] keep it from dropping further? And so from staff's perspective as long as we continue to increase

[3:46:24] above those really, really low numbers that we saw in the pandemic, I think that we've achieved

[3:46:28] the goal that we were trying to hit, and so 4 and 6% does get us there and if the industry

[3:46:32] is representing that they can do that without having to ask for a ton of force measures

[3:46:35] and having to get all these tax exemptions at this F level. I think we could get comfortable

[3:46:40] with that.

[3:46:44] And then what do you think the effect would be on 5 and 10 versus 4 and 6? 5 and 10

[3:46:49] including market rate units or just a low income. Just affordable? Just affordable? That would not

[3:46:58] seem to be significantly higher than the four and six that's proposed as we've seen just a, you know, a couple of percentages only makes a few units different five and ten is a very nice round number that I.

[3:47:08] Makes me feel good so.

[3:47:10] And then in the next QAP when we do this, and I'm sorry, Mr. Summer, I just couldn't make the travels.

[3:47:18] I want us to really think about how do we incentivize not taking all this soft money in our act because it don't think it's long term best for these municipalities.

[3:47:28] And it puts weird structures together, which I know what they're doing to get that accomplished.

[3:47:36] Thank you, sir.

[3:47:42] We have a motion ready.

[3:47:44] Well, okay.

[3:47:46] If we have to be further comment on other things on the KAP and then in the end, someone will make a motion,

[3:47:53] mentioning this 5 and 10 percent of what we'll change, and any other possible change that we might.

[3:48:00] Okay, it seems like the board has a consensus. I know it doesn't make everyone completely happy, but it should make you a lot happier than

[3:48:07] 8 and 20 or 8 and 18, 9 and 18.

[3:48:13] I think when we make an ultimate motion

[3:48:17] We're gonna go with the 5 and

[3:48:19] 5 and 10, affordable, I

[3:48:25] don't see any objections, some of them jumping up and down from the board who has a boat

[3:48:35] Okay, let's move to the next topic, which was, let's all blur it out.

[3:48:41] The other topic in my presentation was the at-risk and USDA qualifications, I'm not sure if there's any comments on that specifically.

[3:48:54] Probably back in there.

[3:48:58] Probably my or with rural housing, and I don't think this fine and are going to fight over this, hopefully.

[3:49:05] I do want to appreciate staff's recommendations in the QAP of allowing us to hopefully clarify

[3:49:14] all of this in legislation this next round.

[3:49:19] I do have two things.

[3:49:21] You did put it in there that, you know, pick a horse.

[3:49:24] I'm fine with that.

[3:49:26] I can live with that language.

[3:49:27] One thing with picking a horse, if you do have a USDA finance

[3:49:33] application that chooses to compete in at-risk, I do ask that in the application they

[3:49:40] be able to identify themselves as a USDA application for all the other

[3:49:45] entities, or items in the QAP that have exemption purposes, so that's really that

[3:49:55] And Ms. Fine and I actually talked about this yesterday on the elimination of USDA getting

[3:50:04] the second bite at the apple. If they are eligible for at risk and I'm not talking

[3:50:11] competing purposes. But before at risk, if everything is already awarded, if there is funds

[3:50:18] left over in at risk, it's a very limited resource for preservation activities. And if you have

[3:50:26] a USDA application that still is eligible for at risk, we would ask that you allow them

[3:50:34] to use up that resource before you sweep it in to statewide collapse. Because it is a very

[3:50:41] limited resource for preservation activities. Everything else would be awarded, but if there

[3:50:46] is a USDA application that does fit in that category,

[3:50:51] allow it to be used at the end of the day

[3:50:55] after all the other at risk applications have been awarded.

[3:50:58] And I think Ms. Fine agrees with that.

[3:51:02] But I'll let her acquiesce to it.

[3:51:03] I thank you.

[3:51:05] Thank you, Robbie.

[3:51:10] Does anybody else want to know?

[3:51:15] Well, get well.

[3:51:20] Hi, Tim Smith with Hope Development Services.

[3:51:22] I'll just do kind of ditto of what Robby said.

[3:51:26] We just to back up that to ensure that after all of the

[3:51:30] yet risk developments have been funded that, you know,

[3:51:34] per statute, USDA is a part of that that money goes to any

[3:51:38] unfunded USDA deals above the 5% on the sweep and then

[3:51:43] just a confirmation from Cody that USDA deals that are

[3:51:47] competing in the at risk set aside will be treated with the

[3:51:51] in the view of the rules with the special treatment that U.S.D.D.

[3:51:55] deals are for underwriting other things.

[3:52:02] That's it.

[3:52:03] So, so far, this is how we have the right people.

[3:52:05] What's this?

[3:52:08] Uh, Tracy's International Church Residence says just going

[3:52:11] to come in on the treating of the U.S.D.A. deals differently

[3:52:16] with their exceptions.

[3:52:17] And the address that I say, there are a lot of underlying exceptions.

[3:52:20] It only comes with that.

[3:52:21] is one thing. I do think the QAP identifies it clearly enough that you can't do it in

[3:52:27] that risk and that is, and it's it might not even-

[3:52:30] I'm going to happen to ensure that that deals, that our USDA, that are in urban areas, are allowed to pick rural.

[3:52:36] And it gives it a path for either CRP or opportunity points.

[3:52:42] So that's an unfair advantage if a U.S. de-application is competing and at risk, and they're able to do that.

[3:52:49] I do think there's some language that prohibits that in the QAP.

[3:52:53] It's item B under the USDA set aside, language, side to side so that I think that's a good

[3:53:00] of guardrail, but I think it could be questioned too.

[3:53:07] Thank you, Tracy.

[3:53:15] I promise I'll be quick.

[3:53:16] Michael Beard-Bedko Consulting, we did provide preliminary comment related to one of the adjustments

[3:53:22] in the wrath where they've now created priorities that limit all the credits available in

[3:53:29] sub-region only 50% can go towards rehabilitation developments, both in urban and rural.

[3:53:36] This effectively has blocked out historic rehabilitation in all that the major metroplexes

[3:53:43] going forward with that rule, which might be an unintended consequence.

[3:53:50] Just want to make sure everyone's aware that as it's read, you will never see another rehabilitation

[3:53:56] development in historic specifically regions like five, four, he might and four, but three, two, one,

[3:54:07] they're all going to be blocked out unless no one else ever applies. So, just wanted to make sure.

[3:54:16] Okay, so for these, most recent comments, so far there isn't any specific request to change

[3:54:23] to what we have in the document?

[3:54:25] There, I believe there was from Robbie and Tim.

[3:54:29] So within the at-risk set aside,

[3:54:32] the first five percent, which is a third of the set aside,

[3:54:36] is limited to USDA applications.

[3:54:38] The remaining is for at-risk applications,

[3:54:42] and a USDA application can qualify as at-risk.

[3:54:45] This is so insane to try and explain,

[3:54:47] it makes me feel like a crazy person.

[3:54:49] So an application could in theory qualify for both of those,

[3:54:52] but what we've seen over the last couple of years

[3:54:53] the USDA has been taking up the significant amount of that 15 percent, which means very few of our

[3:54:59] at-risk dollars are going to non-USDA urban deals. What we have proposed in the QAP is that an

[3:55:05] application that qualifies for both has to choose either compete in USDA or at-risk. Tim and Robbie

[3:55:11] have requested clarifying language in the QAP that if we get through all of the at-risk applications

[3:55:16] and there is money remaining in that 15 percent set aside that applications that were submitted

[3:55:22] under the USDA side to side that would otherwise qualify for at risk be eligible to get those

[3:55:27] dollars.

[3:55:28] I hope that made sense.

[3:55:29] I find it to be a very reasonable request.

[3:55:34] Do you actually need language or that?

[3:55:35] Or is that just that you would interpret it?

[3:55:37] I do think that we would need to tweak the language that we have slightly but we could do that

[3:55:41] very easily and we could add a check-up to the application that says, you know, we're

[3:55:44] not competing in at risk but if there's any of this company left over, we do believe that

[3:55:48] we qualify for it.

[3:55:49] So that would be pretty easy.

[3:55:50] So why did this beaker last minute say that that would affect rural bills specifically?

[3:55:55] Sure, so Mr. Beard spoke about a different rule that concerns the limit on credits that can

[3:56:01] go to rehabilitation developments in a sub region. This was added, I believe, two years ago,

[3:56:06] to help facilitate new construction over rehabilitation, so that is a very intended aspect of it.

[3:56:12] And the issue that we run into is that in sub regions that only have enough money to fund

[3:56:18] one deal, which is going to be a lot of our rural subregions, because no more than 50% of

[3:56:22] the credits can go to rehabs, it does effectively mean that unless nobody else ever applies,

[3:56:27] or unless there's only one application in that region and it is rehab that we won't

[3:56:30] fund or rehab. Because if you have two competing applications and once in no construction and

[3:56:34] one is rehab, we can only fund one of those only 50% of the credits can go to a rehab,

[3:56:39] which means by default it would go. It would be rehab and existing asset or it would be rehab

[3:56:44] of a previous Reddit deal.

[3:56:48] So we've missed an area in place, please.

[3:56:50] We'll say that Anna here has a deal and she wants to

[3:56:54] we have an extra 15 years short, or 20 years

[3:56:56] where the number is short.

[3:56:58] We have a historic structure that you're going to turn

[3:57:01] from XYZ into a low-income housing deal for those two

[3:57:05] separate assets.

[3:57:07] Sure, so the historic building that is not housing that you

[3:57:12] turning into a rehab that's considered adaptive reuse under the QAP, and adaptive reuse is considered

[3:57:17] no construction. But if it is a historic deal that you're rehabilitating, it's existing, housing

[3:57:23] that you were rehabilitating as housing, that would be considered a rehabilitation, and you would

[3:57:29] hit that 50% limit. Thank you.

[3:57:33] Okay, so if I heard you correctly on the tick, pick your horse, you know, USDA or

[3:57:40] at risk,

[3:57:44] the boards get done there, do you have that or then, sure, if there are still

[3:57:50] funds available in the 15 percent, you can then change that designation to the other.

[3:57:59] We would get at risk and then you didn't get the award, but there's still 15 percent

[3:58:05] you could then change it to USDA or right in the situation.

[3:58:09] I'm not sure if you're applying for both, but here's how it gets considered as.

[3:58:11] Exactly.

[3:58:13] I find it very reasonable, reasonable idea.

[3:58:18] I mean, anyone have questions on that concept or problems with

[3:58:24] it?

[3:58:25] Are you kidding or not?

[3:58:28] Again, so the concept of you can apply under that.

[3:58:32] There's 15%.

[3:58:35] Oh.

[3:58:35] And see on the ceiling, you know, for either USDA or at risk,

[3:58:43] if you qualify for both, you have to pick one of them in your initial application.

[3:58:48] So let's say you pick USDA and you don't get the award.

[3:58:54] If there are then still funds available under that 15% cap, you can then say, well, let me go at risk.

[3:59:02] And then if there's, again, there's funds available.

[3:59:05] There's some sort of a second by that, but still that limited, it's just...

[3:59:12] It's just one application to opportunity.

[3:59:14] Correct.

[3:59:18] There's so many of that.

[3:59:19] Yeah.

[3:59:19] If we qualify for both, and everyone who came in for that second part has already been funded, that's correct.

[3:59:25] Yeah.

[3:59:26] Sounds good idea.

[3:59:29] Okay.

[3:59:30] What's the next concept that we're...

[3:59:32] What's the motion incorporate that?

[3:59:36] Well, historically what's happened is when when the board is prepared to make a motion I go over the changes as I understand them at the board

[3:59:44] I'd like to hear and then

[3:59:46] You would you motion say plus everything could you just said yep

[3:59:50] I don't have a pay what he said

[4:00:02] Good morning. Good afternoon. Good afternoon. I'm sorry.

[4:00:07] Wait, wait, afternoon, skip to lunch. I'm Jonathan Campbell, I'm with L.C.J. Development and part of here. Here is part of the

[4:00:17] Royal Rental Housing contingency. I wanted to bring up a new topic, which was discussed in the last

[4:00:24] board meeting, but wanted to put some more gray matter and to consider this before it gets enacted.

[4:00:31] So, I'm rising today to speak in favor of increasing the leveraging factor from 9% to 10%.

[4:00:39] Which is in the latest draft of the staff QAP.

[4:00:42] But I think that in the last board meeting there was an add-on to that that was kind of added winsically.

[4:00:48] But I think we should deliberate more on.

[4:00:53] which was to only allow for projects that are less than 50 units to earn that higher 10% factor.

[4:01:05] And what that's going to do is it is going to create greater financial feasibility

[4:01:11] more equity for smaller projects.

[4:01:17] And I was looking at three different scenarios for the next round.

[4:01:20] I've got a 40 unit deal I can look at, I've got a 60 unit deal that I can look at, right now the lines drawn at 50% so this is almost equally distributed above and below that threshold and I've got a 100 unit deal that I can look at.

[4:01:34] And right now the most financially infeasible project is the 60 unit deal because of this metric.

[4:01:41] So, north of 50 units, project is going to earn 120,000 per unit in that equity.

[4:01:50] Below the threshold, it's going to be 140,000.

[4:01:54] So, that $20,000 per unit difference is going to get baked into the real estate fundamentals

[4:02:00] of the transaction.

[4:02:02] Smaller projects are going to have a premium term, which runs counter to real estate fundamentals,

[4:02:09] real estate theory, condoms of scale. You want more units. You want as big as

[4:02:14] project as you can get. Smaller projects have more risk. If this is

[4:02:20] enacted and then becomes a new precedent that the agency is going to put its

[4:02:24] thumb on the scales to create greater financial feasibility for small

[4:02:27] projects is going to concentrate agency resources, industry resources, into

[4:02:35] higher risk properties.

[4:02:43] The intent of what we were trying there is to give more opportunity to

[4:02:50] the smaller rural projects. If I could just give a little background for folks who might

[4:02:58] not be as familiar with the leveraging scoring category. So there's a scoring category in the

[4:03:02] QAP for leveraging of private resources I believe. And it awards points if your tax credit

[4:03:09] The request amount is below a certain percentage of your total development cost and historically

[4:03:14] that number has been set at 9%.

[4:03:17] What we've seen over the last couple years, because things are so expensive especially debt,

[4:03:22] and I have to shift my thinking when I think about rehab, rehab costs, what you have available

[4:03:26] to spend on the rehab.

[4:03:27] So if you have 9 million, that's how much the rehab is going to be.

[4:03:30] If you have 10 million, you're going to do a 10 million dollar rehab.

[4:03:32] As debt has gotten more expensive, the available capital to spend on these rehabs has gone

[4:03:37] down, and that has pushed that 9% into an amount that's so small that it threatens the financial

[4:03:42] feasibility of those really small developments.

[4:03:45] And so what we proposed at the September meeting is that for USDA deals, because they are

[4:03:50] the ones that have been affected so far by this squeeze, that we go up to 10% for that leveraging

[4:03:57] upon further discussion, I think where the room kind of landed is that because small deals are

[4:04:02] most affected, then that benefit should only be given to deals below a certain unit count,

[4:04:08] and I think we land it on 50, which is what it's in the QAP right now.

[4:04:12] I do believe that there is something to, one of the variables saying, no relation, by the way,

[4:04:17] that you could have the unintended consequence of incentivizing small deals because there's a little bit

[4:04:23] more leveraging available for them, that could be something that the board would want to consider.

[4:04:27] But that is the reasoning behind it, is that because small deals are the most affected,

[4:04:31] then small deals should be the only ones to get that benefit.

[4:04:36] And rural rental developers will always try to do scatter side deals for a possible.

[4:04:43] They will try to put smaller deals together to create some of the columns of scale.

[4:04:47] As long as they can point out, we want to do that.

[4:04:50] We try to do that every single year.

[4:04:52] We're looking to try to scoop small deals to create an economy as a scale.

[4:04:56] This disincentivizes us from doing that.

[4:04:59] It incentivizes us just to do single standalone one-off projects, not assembled in.

[4:05:10] Could this be just sort of a cork in the actual, these projects that you're comparing

[4:05:14] that the bigger one happens to be less affordable than, there is more than the at the smaller one?

[4:05:22] I think what I hear you saying is, there is a donut that gets created.

[4:05:26] So the donut starts with the 50-unit threshold right now and then the donut ends once

[4:05:30] you get out of the economies of scale that gets brought on by bigger projects. I don't know

[4:05:35] where that is exactly. This is a new concept. My gut says it's somewhere around 70 to 80 units.

[4:05:42] Your economies of scale pick up where the financial feasibility is ever come by that drop in equity.

[4:05:51] Does that address your question? Well, I'm just wondering if in this particular case you're not

[4:05:59] in pairing apples, apples, and so on.

[4:06:01] It's just that the smaller project, in this case,

[4:06:04] truly is just happens to be a better project.

[4:06:08] Well, when the agency puts its thumb on the scale

[4:06:10] to ensure the 20,000, there is a going to be a 20,000 unit

[4:06:14] difference in the amount of equity, that does translate

[4:06:18] into the transaction.

[4:06:22] When sellers start to realize that,

[4:06:24] they're going to start asking for more.

[4:06:27] So not all of this is going to go into

[4:06:28] the sticks and bricks so to speak of the rehab. There is going to be an awareness that if you're

[4:06:33] below 50 units and by the way, 50 units, 5 for kates, the USDA supply pretty evenly. So you're

[4:06:45] going to have a dramatic difference between 49 unit deals and 51 unit deals. And that is a good

[4:06:51] chunk of the USDA supply.

[4:06:57] John, did you give us formal comment on this or off of language?

[4:07:01] I believe rural rental provided a letter in written comment.

[4:07:06] Do you remember what our position was?

[4:07:11] I remember responding to this, but essentially the reason response was that the intention

[4:07:16] of this was to help out these small deals that are being squeezed.

[4:07:20] And I believe that the rural rental houses association, but their request was just to strike that 50 unit limit, so to leave the increase in leveraging available.

[4:07:30] Who wants the 50 unit limit. The 50 unit limit is only allows for projects that are less than 50 units to get that 10% leveraging factor. That additional 10% equity, so to speak. And perhaps the compromise could be that USDA is just exempt from this.

[4:07:49] You know, if there are projects that want to compete in the at risk, and we want to provide incentives, I don't want to speak for the entire at risk, but perhaps the compromise could be that USDA's exempt from this.

[4:08:00] The issue that we would run into there is that if we have an environment where an application can be can compete both in USDA and at risk and we have separate scoring for USDA and at risk we have created an administrative nightmare for ourselves and so striking the 50 unit threshold from this procedurally is more comprehensible than creating two separate scoring metrics for separate set of sites.

[4:08:30] And we get just fundamentally, as I recall, us going down this path,

[4:08:38] I think it's great

[4:08:39] you're trying to develop bigger rural properties, but from what I remember from industry

[4:08:45] and staff saying, we couldn't, it was almost economically invisible to do the small projects.

[4:08:52] So how can we help the small projects?

[4:08:56] This may be an unintended consequence of-

[4:09:02] So I think raising the bar from 9% to 10% helps that.

[4:09:09] Let's not punish so to speak projects that are slightly larger

[4:09:13] than that threshold.

[4:09:18] Can I do compromise first?

[4:09:22] Robby Meyer with rural housing and I got to compromise to the situation

[4:09:26] and Tracy and I talked about it.

[4:09:28] For this year, for 2025,

[4:09:29] then let us revisit the whole thing for 2026 for a broader ethic. For 2025, if we could leave the

[4:09:39] cap in, but apply the cap to if somebody wanted to do say a scattered site development where

[4:09:46] you had a 2026 unit deals to small deals so that it would go to the cap. Have the cap apply

[4:09:54] to each development in the scattered site.

[4:09:57] So there's not first the development site or the application.

[4:10:04] And we'll put a guardrail on it, that you can only have two scattered sites.

[4:10:11] So that you can't, you know, can't bust the cap really high.

[4:10:15] Now that does mean that you could have two 50 unit deals and you'd have 100 units,

[4:10:19] but it would have a guardrail on it.

[4:10:20] have to be a scattered site, not a phase one, phase two, a true scattered site and that would

[4:10:27] be for 2025. We revisit the whole thing for 2026 and tracing, I agree. We would work together

[4:10:35] on the whole issue and work out between at risk and USDA and how that would affect if that

[4:10:40] is a conformizable situation. I understand exactly what Jonathan is saying. I don't disagree

[4:10:50] with what he's saying, there's got to be a workable solution, because as we're old and

[4:10:54] or housing, we're the ones that started this, and we asked for the increase, because we

[4:11:00] were having to give up that we were having to give up credits because we're trying to maximize

[4:11:06] the rehabilitation and we couldn't get there. And every USDA development this year gave up credits

[4:11:13] because of that. And a lot of times when in at risk they're given up credits because they

[4:11:20] hit the 2 million mark. And happen for everybody, but they hit the 2 million cap anyway,

[4:11:25] so they're giving up credits that way and not necessarily because of our situation.

[4:11:32] So you're proposing that we could have a two scattered sites of 49 units each?

[4:11:39] You could potentially, if you look at the number of units for most USDA, they're 36 units or less, for the majority of them.

[4:11:49] Now, you do, and I agree with Jonathan, we do have 48 unit deals and 49 unit deals.

[4:11:55] We have 60 unit deals and higher, but for the most part, most USDA deals are small.

[4:12:00] They're all in the middle of nowhere, so you're not going to have a lot of large complexes out there.

[4:12:06] So for, you know, developments or developers that are owners that have, you know, 24 units over here and you got another 36 units over here on the other side of Texas, they can actually do a scattered site for that for those two deals and that that would be a compromise and I'm looking out for rural rental as a whole.

[4:12:33] As far as what would the problem be if we just eliminate the cap of 50 units?

[4:12:38] I will let Ms. Fine get into that. I'm for that, but I understand the guard realm

[4:12:47] that Ms. Fine wants to have. I'm trying to be compromising here.

[4:12:55] I'm compromising to that

[4:12:57] if we can just not just have it for the whole development site

[4:13:02] because there are a couple of portfolios

[4:13:05] that are being purchased in Texas right now.

[4:13:08] I'm not party to that,

[4:13:09] but I know there's portfolios that are out there

[4:13:11] and I'm sure that we're gonna see some of those

[4:13:13] part of those portfolios come in.

[4:13:15] And there's small deals and I want them to have the ability

[4:13:19] to be able to come in as scattered sites.

[4:13:24] So.

[4:13:24] This is fun.

[4:13:25] Tracy Finney, National Twitch Residence says, yes, I'm I'm supportive of Robby's suggestion of limiting

[4:13:32] scattered site two projects doing a bundle

[4:13:36] each max 50 units the reason why I I

[4:13:40] I'm not supportive of eliminating the total unit count is I have discussed this previously is that there's not a guardrail for cash-out on

[4:13:50] any of interest transactions. It is allowed. It's not illegal. Our rules permit it and it is happening.

[4:13:59] And so all these transactions, if you're you own your project, there are all a little bit different.

[4:14:04] For example, I might have a $4 million project in it. It's going to cost me $4 million to acquire it.

[4:14:09] And I have $3 million in debt and therefore there's only this $1 million difference.

[4:14:16] But some of them have a lot less, so for if you have a little bit of debt or no debt at all and you acquire that project you can get more credits, you pocket, you pocket that difference.

[4:14:30] That is what is the cash out. And that's absolutely happening in half and last year when one application in particular I'm guessing took about 400,000 extra tax credits to cash out that 400,000 could have flown through.

[4:14:44] through the collapse and funded another deal.

[4:14:48] Again, it is allowed, it's not considered

[4:14:50] if used the way our rules are written.

[4:14:52] So when you allow projects to increase leverage,

[4:14:56] you are allowing them to take more credits.

[4:14:59] But there's nothing required.

[4:15:00] Hearing us to make those extra credits go to, you know, hard-cost and construction. There's not a guardrail for that.

[4:15:10] Okay, but how's that affect this?

[4:15:12] Because you can grab more tax credits, but you don't have to use those tax credits to put in hard-cost into your project.

[4:15:20] You can cash them out into your pocket.

[4:15:22] And just to trace the, we haven't had that particular issue in USDA, USDA has a thumb on that particular item.

[4:15:34] So we haven't had that over in USDA and that's I think that's kind of one of the reasons you're hearing Jonathan say just take

[4:15:42] It's a way to take it out, just have the supply to USDA.

[4:15:47] But I understand Ms. Faina, I understand Jonathan,

[4:15:51] I'd like to compromise here and work it out in 2026

[4:15:56] if, however, the board's pleasure is to fix it.

[4:16:01] That's either reducing it or doing it with it one at a time.

[4:16:04] We compromise with the allowing

[4:16:08] scattered sight, as long as each scattered sights under the 50, that sort of a balance

[4:16:14] for YouTube, and then that partially reach your Jonathan's issue and being able to, I

[4:16:24] guess it doesn't really, if you have one side of it.

[4:16:26] Yeah, it's still going to create a donut, there's still going to be projects that are not

[4:16:33] as financially feasible as smaller ones.

[4:16:35] I think I understand, I do fully understand what your position is where you're coming from,

[4:16:41] but I believe it's been the boards intent to help these smaller deals and small communities

[4:16:50] that there's no way it's going to support a 75-unit, you know, I mean, build a man.

[4:16:59] from, as we've seen over the years, it's so tough to get there for economies of scale and

[4:17:06] everything like that. It's tough to get over even a 20-unit deal in some small amounts.

[4:17:12] There are some costs that definitely hit the economies of scale.

[4:17:17] You know, it costs my, I'm going to pay the, by attorney the same amount, whether it's a 25-unit deal

[4:17:22] or 75-unit deal. I'm going to pay the same amount for my market statement. It's paid the same amount

[4:17:25] for my appraisal. So we need to help the slum in this way. So it's just a corner point to the

[4:17:35] larger deals.

[4:17:38] Okay, so we need to introduce the

[4:17:44] compromise. I gave you a compromise. It's really

[4:17:48] up to the board's discretion of how you want to do it. If you remove the cap, we'll still work

[4:17:52] and try to fix it next year. I'm committed to that. However, we try to fix it going forward,

[4:17:58] whether that means trying to figure out a different cap, or we try to put out a guardrails

[4:18:03] in next year.

[4:18:04] How will we do that role rental housing is committed to doing that?

[4:18:07] Okay, if we leave it as written up right now,

[4:18:14] that doesn't give that extra multi-skethered

[4:18:18] site.

[4:18:21] But it'll be a lot easier to evaluate and score and everything like that.

[4:18:26] And then if there's some way that we can work in some other things next year or maybe it's scattered site maybe it's

[4:18:32] Exempting in USDA up to a certain size or maybe there's all kinds of waste it

[4:18:39] I read you that, but it's selling to me like it'd be easier and still a reasonable to

[4:18:46] Leave it in this year as we have written up

[4:18:49] It put a lot more applications in front of you.

[4:18:52] I mean, if you did the scatter site,

[4:18:54] the compromise you'd have less applications presentably.

[4:18:59] I would just caution against accepting the premise entirely.

[4:19:03] I think it'd be creates an awkward precedent for the agency to put its thumb on determining financial feasibility to this degree.

[4:19:13] I understand the desire to compromise,

[4:19:16] but I think it's probably a better problem.

[4:19:19] Wasn't this a rural housing request for us to do this in the first place?

[4:19:23] For it to go from 9% to 10%.

[4:19:26] The concept of limiting it to just projects less than 50 units is what we're objecting to.

[4:19:31] You can leave it for one year. See how it goes.

[4:19:39] We've heard over time that we're trying to do

[4:19:42] these smaller in slightly invisible deals or invisible make-em-visable.

[4:19:55] Again, I'm just not

[4:19:56] moved to change it. Just one question. I know all about small towns from rural communities

[4:20:03] are very small. How many have you done that were 50 or more?

[4:20:12] Our group focuses on larger projects

[4:20:15] just because of the comms of scale, these are managed. So we do seek out larger deals for

[4:20:21] their possible. And are these in rural communities, population, that's quite...

[4:20:28] It's suburban and rural is where we're focused on suburban projects, get better attention from

[4:20:37] the investment and when the community. My only question was about rural communities. Those are small

[4:20:43] Projects. Most rural projects are going to be less than 50 and it's 32 to 48 units is kind of the preponderance of it.

[4:20:53] Yes.

[4:20:54] Okay.

[4:20:57] Unless someone on the board feels differently as would say we go with the as it's presented right now.

[4:21:03] Thank you.

[4:21:04] Any?

[4:21:05] Okay.

[4:21:17] So were there other topics say?

[4:21:19] Go to the mentions or didn't mention.

[4:21:27] So I've only got two changes before we ship it off to that.

[4:21:34] That is what I have as well.

[4:21:36] So what I have on my list is adjusting the thresholds in the quantity of low-income units,

[4:21:40] scoring item from 10% to 5% and 10%

[4:21:43] believing all other language unchanged, and within the USDA and at risk set aside, adding

[4:21:49] language that if we have funded all at risk deals and we still have remaining money in that

[4:21:54] 15% to go back to the USDA side aside, and fund deals that would qualify under the at risk

[4:22:01] set aside had they not been submitted under the USDA side, both of which I think we can accomplish

[4:22:05] very easily in the QAP.

[4:22:13] I would like to entertain the motion on item 37 of the agenda and everyone remember don't

[4:22:19] run out we slept Theresa.

[4:22:26] So I make a motion that we

[4:22:30] Some of my paper on. Set the QIP, Justice Miller's interview and according to what Mr. Campbell just stated.

[4:22:37] Second, and that we delivered to the Governor and a later than November 15th, 2024, typo.

[4:22:47] For his review, revision, approval, and thereafter to the published in the Texas Register for adoptions.

[4:22:52] All have authorized, expressed and subject to the conditions in the board actually request on this item.

[4:22:58] Yes, that's exactly what I'm going to say.

[4:23:00] Second.

[4:23:02] Okay.

[4:23:03] So motion made by Mr. Harper.

[4:23:08] Seconded by Ms. Various.

[4:23:11] Subject to the edits that we've agreed upon.

[4:23:16] All those in favor say aye.

[4:23:18] Any opposed?

[4:23:20] Hearing none, motion carries.

[4:23:21] Thank you.

[4:23:22] Everybody.

[4:23:23] For that.

[4:23:24] But wait, there's more.

[4:23:26] Okay.

[4:23:26] So, where are we, okay, somebody tell me 14, 14, 14, 14, 14, but there's only a couple

[4:23:36] is 14 through what? 14, 15, that's it? Okay, we can do this.

[4:23:46] And thank you all for being willing

[4:23:49] to plow through this. Okay, so I'm 14 of the agenda, presentation, discussion and possible action,

[4:23:56] regarding a waiver of 10-tax section 11.101B1A7 of the qualified allocation plan relating to the percentage

[4:24:08] of efficiency and or one bedroom units for Oak Hill Lofts. Ms. Morales, you've had a busy day.

[4:24:15] Theresa Morales, Director of Multifamily Bonds. Item 14 includes a request for a waiver for a property

[4:24:20] that exceeds the 30% limitation on efficiency in one bedroom unit. Oak Hill Lofts proposes the

[4:24:26] construction of 90 units in Austin. Of those 90 units, 50 will be one

[4:24:31] bedrooms which comprise 55 and a half percent of the total unit count.

[4:24:36] A waiver was previously considered and tabled by the board last month,

[4:24:41] pending submission to staff of application exempts that reflect a unit mix that

[4:24:46] does not exceed 34 percent one bedroom units. The revised application

[4:24:52] and exhibits have been provided and reflect a unit mix of 33.33 percent.

[4:24:57] One bedroom unit, recognizing the discussion at last month's board meeting and recognizing

[4:25:03] the proposed change to the 2025 QAP, that increases the efficiency in one bedroom limitation

[4:25:09] to 35 percent.

[4:25:11] Staff recommends that a waiver of 10-tapped 11.101 B1A, Reminette 7, Be Granted.

[4:25:19] Okay, so this is what we were presented in the last meeting they actually have put together the drawings or correct.

[4:25:29] To affect this change.

[4:25:31] Yes.

[4:25:32] They're not asking for anything else other than that.

[4:25:34] Correct.

[4:25:34] Change so the waivers are really at this point now from 30 to 33%.

[4:25:39] I mean, 34% I think is where we landed last month because the 33.

[4:25:45] three packet in recognizing that we're changing the whole thing to 35% going forward.

[4:25:54] So do any board members have questions on this item or would Mr. Thomas like to make

[4:25:59] a motion?

[4:26:00] Yes, sir.

[4:26:00] I'll make a motion.

[4:26:02] Mr. Chairman, I move the board grant the requested waiver of 10 tax section 11.101B of the

[4:26:08] 2,024 qualified allocation plan relating to the percentage of efficiency and role 1 bedroom

[4:26:14] units for Oak Hill Lofts all for the reasons and is expressly conditioned and described in the

[4:26:19] board action request and associated documents on this item.

[4:26:24] Who should be made by Mr. Thomas, seconded by Ms. Conroy.

[4:26:27] Well, is in favor say aye.

[4:26:29] Any opposed?

[4:26:30] Hearing none.

[4:26:31] Motion carries.

[4:26:32] 15 of the agenda.

[4:26:33] Presentation discussion in possible action regarding the issuance of multi-family housing

[4:26:38] The revenue bonds series 2024-A-1 and A-2 resolution number 25-08 and a ward of direct loan funds

[4:26:53] and a determination notice of housing tax credits from RELUS.

[4:26:58] At M15 involves a bond issuance for the new construction of 177 units in SEGAIN serving

[4:27:03] the general population. The units will serve households at 50% 60% and 70% of the area

[4:27:10] median income. The financing structure involves a private placement with new point real estate

[4:27:16] capital. There will be two series of bonds. The series A-1 bonds will be construction to

[4:27:21] perm with a 17-year term and a 40-year amortization. The series A-2-A-2 bonds will be construction

[4:27:29] only for approximately 32 months. The resolution that's attached to this agenda item is a little

[4:27:36] different from what the board typically sees. Specifically exhibit B to the resolution includes

[4:27:42] a schedule of possible interest rates in five basis point increments that correspond to a specific

[4:27:49] bond amount for the A-1 and A-2 series. The need for this exhibit is due to a limitation in our

[4:27:59] set the interest rate, bond amount, and maturity date on transactions that involve unrated

[4:28:04] debt.

[4:28:05] For publicly offered bond transactions that are rated, statute allows the department to

[4:28:10] delegate pricing to another party, usually the underwriter, and we can adopt a resolution

[4:28:15] that includes a not-to-exceed amount in term.

[4:28:19] In the case of walnut springs, because rate lock does not occur until a few weeks, prior

[4:28:25] When we start closing, it is difficult for the business partners to locked down a specific

[4:28:29] bond amount to be issued for each series and given the structure the amount specified in

[4:28:35] the resolution is the only amount that we can issue.

[4:28:39] Effectively, the way the bond resolution is drafted it provides flexibility to land somewhere

[4:28:44] in the range listed.

[4:28:46] Meet the statutory requirement for unrated debt and not unduly delay board approval and subsequently

[4:28:52] the closing timeline.

[4:28:53] In addition to the bonds and the 4% credits, the capital stack also involves the multi-family

[4:28:59] direct loan from the department under the Tax Credit Assistance Program or T-CAP repayment

[4:29:05] funds 2024-3 NOFA.

[4:29:08] The recommended loan amount is 10 million at 2% interest with a 40-year amortization and

[4:29:14] a term that mirrors the senior loan of 17 years.

[4:29:19] With all THCA bond issuances, we are required to hold a public hearing, there were no attendees at that public hearing for this transaction and no letters of support or opposition have been received.

[4:29:31] Staff recommends approval of bond resolution number 25-008 in the aggregate principal amount of the series A-1 and series A-2 bonds that correspond to the applicable all and rate for such series.

[4:29:46] as further specified on exhibit be of the resolution.

[4:29:50] Staff also recommends approval of an award of tax credit assistance program repayment funds for $10 million,

[4:29:57] and a determination notice of 4% housing tax.

[4:30:04] Okay,

[4:30:08] I know everyone's ready to go, but I actually have some mathematical questions here. How much is this development supposed to cost?

[4:30:18] 52.6.

[4:30:20] Okay, 52.6 million.

[4:30:22] Harper helped me on this.

[4:30:26] Okay, so there's 27 million dollars in bonds. Correct.

[4:30:34] Plus, $10 million alone. Correct. The 37.

[4:30:40] And then 2.4 million bonds of tax credits

[4:30:48] recommended on the allocation. Correct. You multiply that by 10. It's 24 million

[4:30:55] But only give 90% of that's a takeoff 2% of that or 10% of that, this is say roughly 22 million.

[4:31:05] So, 37 plus I'm sorry, 27 plus 10, 37 plus 22 is what 59 million.

[4:31:16] So perhaps a better way to look at it as an underwriting report, which is on page 157.

[4:31:24] of 1366 in the Supplemental Board book and then also on page 158. If you look at the

[4:31:35] permanent sources, table that comes to 27.9 million.

[4:31:45] So if you take your total development

[4:31:46] cost of 52 and some change and then subtract out those permanent sources in the capital

[4:31:53] stack, you arrive at what is effectively the gap that needs to be filled, which would be

[4:31:58] filled in the form of the housing tax credits as well as deferred developer fee.

[4:32:05] And so under that conclusions box,

[4:32:11] you see the total development cost minus the permsources

[4:32:14] leaves us a gap of about 24 million.

[4:32:17] The next box talks about the housing credit amount and how that is determined.

[4:32:23] And in this case, we're going with the amount that was requested by the applicant,

[4:32:30] which

[4:32:31] still leaves a gap to fill and reach that 52 and that gap is coming in the form of deferred

[4:32:38] developer fee.

[4:32:39] So there's about 4.4 million or 73% of the deferred of the developer fee that's being deferred.

[4:32:55] But do you see my?

[4:32:57] There's an amount there that's considered for interim only.

[4:33:01] So it depends on which side you're looking at, whether it's in our own repurn, but this section provides a breakdown of how you get to the 52, which is primarily in the form of deferred fee and equity.

[4:33:16] So you're right up with saying there's 27 million bonds.

[4:33:22] That is split between permanent construction.

[4:33:26] Okay, so the permanent bond level is...

[4:33:29] Is 13 and some change?

[4:33:30] 1696. Correct.

[4:33:37] It's under the permanent sources on page 157. Correct. 13.9 plus the T

[4:33:46] cap loan, which will be permanent. 10 plus the match and then the note. Okay. So 13.14 million is

[4:33:57] the permanent part of the 27 million. Correct. And there's there's a 13 million construction

[4:34:02] loan. Which goes away. That goes away. That gets us to worry. Okay. We're looking at them.

[4:34:10] Good. I'm good. Anyone else? Mr. Jeremy? I'm ready to make a motion. Please.

[4:34:18] I'm ready to entertain the motion. Very well. I moved the Board of Proving,

[4:34:22] Distance and Resolution number 25 to ask there is there. Eight regarding these students of

[4:34:28] tax exempt multi-family housing revenue bonds, approve the issuance of a termination notice

[4:34:34] for 4% housing tax credits, and approve TCAP direct loan funds for Walnut Springs apartment

[4:34:42] all is conditioned and authorized in the board exchange request, resolutions, and associated

[4:34:49] documents on this item.

[4:34:53] Motion, babe, my misparias. Is there a second? Second. Seconded by Mr. Harper. All those

[4:35:00] in favor say aye. Aye. And the opposed, sir, and then motion carries.

[4:35:04] Thank you. Go get a drink through, sir. Okay. The board has addressed the posts of the agenda

[4:35:11] items. Now is the time to the meeting when members of the public can raise issues, issues

[4:35:15] with the board on matters of relevance to the department's business, or request that the board

[4:35:19] specific items on future agendas for consideration. Is there anyone who would like to provide

[4:35:25] public comment at this time?

[4:35:30] Seeing none, the next scheduled meeting of the governing board

[4:35:32] is at 10 a.m. on Thursday, December 12th, 2024. Currently scheduled in room in this tiny

[4:35:43] Co-Z room without flags, so room E1, E1, O1, 2, right?

[4:35:51] Okay,

[4:35:53] flags with flags next time, so E1, 0, 1, 2 with a tap, Texas capital extension,

[4:36:00] this room, and if you put this in, so come early and you'll get a bonus in the finance

[4:36:09] committee meeting that precedes the governing board meeting.

[4:36:12] So that should be at 9.30, 9.45, 9.30, 9.30.

[4:36:21] Bonus, bonus to the GXD.

[4:36:24] Seeing that there's no other business.

[4:36:28] It is 2.43 and we are adjourned.

Nov 07, 2024 Board Meeting - Texas Department of Housing and Community Affairs

Agenda

Transcript