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All right, where's my clock? Is that right?

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Good morning. I like to call to order the meeting of the governing board of the Texas Department of Housing and Community Affairs.

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It is 10.07 in the morning of November 7, 2024.

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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.

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The start-out with the roll call, Mr. Martians, and Mr. Fariis, Mr. Thomas, Mr. Harper, Ms. Conroy,

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and I am here, so we have a quorum.

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As usual, we start the meetings with the pledges which will be

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

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this building, this room does not have an American flag, but we will start out

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I pledge allegiance to the United States of America and to the Republic for which it stands

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on the nation's underdog indivisible with the King's Justice law on the

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text law.

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On the text law, pledge allegiance to the Texas, one state underdog, one and indivisible.

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always be flexible.

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This brings us straight to our consent agenda. Are there any items listed

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on the consent agenda as posted that a board member remembered the public wishes to move

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to action.

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Hearing none, seeing none will entertain the motion on the consent agenda.

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Mr. Chairman, I move the board up to provide them as 1 through 11 as described and presented

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the respective board acts to request and reports.

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Thank you.

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Motion made by Ms. Furdius, seconded by Mr. Harper, all those in favor say aye.

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Any opposed hearing none, motion carries?

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Moving right along to our executive director's report.

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Not a whole lot this time.

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Just a few items in compliance.

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Just last week we promoted Robert Moore to the role of manager of compliance

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of subrecipient monitoring.

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He is 14 years of community action program and department funded housing program experience.

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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.

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His experience in weatherization has great benefit to the Department and our network of subrecipients.

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

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At this moment, we have staff over at Senate Local Government,

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testifying about our implementation of House Bill 271,

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the PFC Cleanup Bill, and our multi-family bond program.

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Next week, I'll be testifying before the Senate Health and Human Services Committee

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on their interim charge of protecting vulnerable Texans in emergencies.

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Jericho, of course, has asked me to speak about how we monitor our senior

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multi-family properties in the wake of a natural disaster

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and how closely we track any damage that may have occurred subsequent repairs in the conditions of the tenants.

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Also, next week, pre-filing of legislation begins for the 89th regular session,

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so Michael Lidal and his job will be tracking that closely and will keep you informed,

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because anything important to be pressing.

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We've already been in discussions with several offices regarding possible legislation.

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They will file which could impact our programs, so things are gearing up.

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It's the end of my prepared remarks from happy to answer any questions.

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Okay.

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I mean, board members have questions from Mr.

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Wilkinson.

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I trust you're going to be on top of the assisting the legislators with the legislative process.

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Yes, yeah.

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I mean, you know, no advocacy, just a resource, right?

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Some of it's a little high in the sky.

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I'm going to get you a billion dollars.

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to it, you know, it's well-made in one of that.

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Okay, okay.

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Yeah, and just letting people know this is

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as much smaller room that we're used to,

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so, come on, let's go ahead and use these front rows.

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I will make an effort to add people raise their hands

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if they're planning on speaking on

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in the agenda item when we come up.

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So, yeah, and try not to stand in front of the cameras

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and I'm sure these guys will tell you, please move.

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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.

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Right.

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I have to write a flight here.

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Do you have to hear?

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Okay, is she?

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So are we doing this later?

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Yeah, let's skip over it.

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For now.

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Okay, we're going to go back to,

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So that's 13, 14, and 15.

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We're going to bear with us right now.

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There's a house hearing, which Bobby was requested to be at.

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We said, can we send some other folks?

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I mean, we let them know we're at hearing the same time.

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And that's, you know, we schedule our meeting for like a year ago.

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Last week.

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So there may be some other adjustments in this schedule,

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but we will hit everything as opposed to 16.

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Yes?

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Resolio here?

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All right.

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We're jumping ahead.

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Item 16 on the agenda.

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Presentation discussion in possible action regarding the material amendment to the

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Housing Tax Credit application.

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Changes to the ownership structure and a waiver of ten-tack section 11.9 B2A for a

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Avanti Legacy Del Sol.

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Mr. Brenwells.

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Good morning.

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

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low in communities for the elderly and Brownsville Cameron County. The applicant has not requested

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approval for a material amendment to the application, changes the ownership structure and a waiver

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related to the requirement to have a historically underutilized business or hub. In the ownership

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structure of the general partner, the applicant also requested approval for a reallocation of

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

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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.

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

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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.

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The applicant indicates that due to increased construction cost, increased barring cost,

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and increased property insurance expense, the request of changes are necessary to maintain

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feasibility. In addition to the changes to the design, the applicant is requesting approval

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for changes to the ownership structure of the development, which requires a waiver of the provision

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on the QAP that specifies that the hub is required to have an ownership interest in the general

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partner. The applicant is seeking to add a special limit partner and move the hub from the

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department partner.

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Her answer will have an opportunity for preparation

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where we place the hub as a solo member of the new general

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partner.

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It should also be noted that one of the original members of the

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general partner will no longer be in the owner structure.

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The request that changes to the ownership structure will improve

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the financial feasibility

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of the development by providing your property tax extension.

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However, the application for the development

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received two points because the development was structured

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to include a hub and the ownership structure of the general

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partner of the owner.

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and the proposed change to the ownership structure would result in the development no longer meeting

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the requirements for the points because the hub will no longer be in the structure of the general partner.

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The applicant request approval for a waiver of this specific requirement and to allow the

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development to continue to qualify for the two points with the hub and the ownership structure of the

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special amendment partner. The hub would continue to be required to need all other requirements

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in the KAP and this revised ownership requirement would be codified in the law for the development.

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The applicant submitted a letter of continued support from state representative Erin Elizabeth Gomes and

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resolution number 2023-068 from the city of brands will pass on August 2024, which also

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states the city's continued support for the development. The development was re-underwritten with

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proposed amendment and revised financial information. The analysis supports no change to the tax credit

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allocation and demonstrates that the development remains feasible with the proposed changes.

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Additionally, staff reviewed the original application and scoring documentation against

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this amendment request and concluded that with the exception of the waiver, none of the changes

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would have affected the scoring or selection of the application in the competitive

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round.

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Staff recommends approval of the application amendment, the waiver request, and the changes to the

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infrastructure of the development, and I'm available for any questions.

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Okay, on the structure with the limited special limited partner, that's

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conforms that what we've been doing with many other

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restructures like that. Yes, right, it's correct. So there's nothing special.

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No problem with that part.

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Does the city, I guess, are there any restrictions on

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how many parking places per unit were required or not? Because they're

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reducing a bunch. It is my understanding that even with the reduction, there's

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the development has 84 units and they would have 90 parking spaces available.

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So there's no like 1.5 requirement or something like that.

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Just think of that as zero.

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I am not sure.

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Hang on, we'll get to the point.

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We have a standard, but if there's a local standard, we don't go code.

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I'm not sure what the requirement from the city is.

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

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And we could have...

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Well, that would be Austin.

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Yeah.

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Okay.

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All right.

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The other part that gave me a little pause.

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So, there were...

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Do we know how many stories this is?

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Three.

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Three story.

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And they're taking out one of the elevators.

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Do we have any kind of AVA type of compliance issues that what happens when that one elevator breaks now?

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And there's the low ladies and walkers who can't get up to their units.

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I'm not kidding.

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I mean, they've got a piece of requirements, even with one elevator.

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It's just one elevator.

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That's it.

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It was just earlier general population.

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It's an elevator.

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Okay, so an elevator is required in an elevator development,

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But we don't have a requirement for a second of it.

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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

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And this is particularly in my mind because

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

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It's like what happens better a little bit or so.

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We don't have any, my question that I guess more general, do we have any sort of requirements

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on this?

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I mean, it's the program I would state it, or is it what you want to do?

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I mean, there's very strict compliance, if they're meeting the compliance for whatever

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the code is that they're dating the ADA compliance and you'll tell you exactly what they've

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got to do.

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

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Oh, well, they could do two because they had it.

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They had two.

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They're taking one out.

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So again, I'm just curious if there's anything that we're accidentally approving here that

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just doesn't make sense.

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They can't especially form elderly.

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From the confasers perspective, the property would be inspected for physical conditions.

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So the elevator were out, it would be a finding for that.

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but in terms of an accessibility requirement,

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I am not aware of anything that would be problematic

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for them to have only one elevator.

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Mr. Benwin-Los, what is the maximum fee for G.C.

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for the general conditions and the fee

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for the contractor for the intent, do you remember?

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It's 14% collectively.

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And for the general, 15%.

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So on this sheet, it's just 15.04.

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I've y'all dressed that

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under the applicant's

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cost-based items,

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not a nor going to sell out of money, but it's not compliant.

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So on that line item for the developer fee, there's the applicant cost, which would be

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the $2,352,000, and then the TTHC cost, which is likely lower at $2,355,643.

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That would be the reduction over the amount over the access, I believe.

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Thank you.

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One last question, do we have any concern about the

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Biobility, continued financial viability of the developer,

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given that this...

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We reviewed the development itself.

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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.

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Yes,

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we've seen other projects have difficulty, but in context, I mean, we've had many developers

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have issues or less couple years, so I don't know that it's especially worrisome.

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Good.

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There's a margin.

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I just have a question about the two points that got taken away on the scoring head.

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Am I right about that here there, right?

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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.

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

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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.

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

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bolted someone up above?

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It is my understanding that that would have been the case, I believe.

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The score for this development was tied with four other developments in the area of application.

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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.

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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.

232
00:17:13,140 --> 00:17:19,400
decisions bigger than one elevator two elevator. Correct I don't know what

233
00:17:21,260 --> 00:17:24,160
waiting list would have been at that time if it would have ended but then the

234
00:17:24,160 --> 00:17:27,980
region or if it would have gone possible that we have some bad news that can answer

235
00:17:27,980 --> 00:17:30,300
that in the end.

236
00:17:32,380 --> 00:17:33,380
It's a 2023.

237
00:17:38,460 --> 00:17:40,960
The folks are hot.

238
00:17:41,380 --> 00:17:48,460
Oh, part of the way for everyone to know, I have this nifty little iPad looking thing

239
00:17:48,460 --> 00:17:50,120
where I can turn on and off your microphone.

240
00:17:50,980 --> 00:17:51,420
Fantastic.

241
00:17:51,940 --> 00:17:54,720
I'll be looking forward to using it in time for that.

242
00:17:54,920 --> 00:17:55,760
Thank you.

243
00:17:56,040 --> 00:17:58,260
Cody Campbell Director of Multifamily Programs for the Department.

244
00:17:59,160 --> 00:18:04,540
So Mr. Martint had the credits been returned the same year that they were allocated.

245
00:18:04,760 --> 00:18:07,080
There would have been somebody in line waiting for those credits.

246
00:18:07,080 --> 00:18:13,920
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.

247
00:18:14,500 --> 00:18:20,640
However, if for whatever reason these credits do come back to the department, they would go to this year's waiting list.

248
00:18:20,800 --> 00:18:21,940
Okay, thank you for that.

249
00:18:22,120 --> 00:18:22,780
Of course.

250
00:18:23,000 --> 00:18:23,300
I don't know.

251
00:18:23,680 --> 00:18:31,240
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,

252
00:18:31,240 --> 00:18:35,040
which is, you know, to wave the two points from the hub

253
00:18:35,040 --> 00:18:36,720
to change the ownership structure

254
00:18:36,720 --> 00:18:37,860
to get the property tax exemption.

255
00:18:38,220 --> 00:18:41,540
We've done this for like, I don't know how many deals now,

256
00:18:41,920 --> 00:18:42,780
but it's a lot.

257
00:18:43,200 --> 00:18:46,120
I can certainly, this would be a systemic thing

258
00:18:46,120 --> 00:18:50,040
that someone would begin to use and game in the system

259
00:18:50,040 --> 00:18:53,380
in your future, and has it done happen before,

260
00:18:54,740 --> 00:18:56,500
and should we allow to happen again?

261
00:18:58,120 --> 00:18:59,240
This is just, you can't answer that.

262
00:18:59,240 --> 00:19:01,200
Yeah, I think that was a rhetorical answer.

263
00:19:02,440 --> 00:19:06,000
Is this the two point scoring on them for this?

264
00:19:06,340 --> 00:19:10,440
Is that 2AB, is that statutory, is that it's KDP?

265
00:19:10,800 --> 00:19:11,240
KDP.

266
00:19:11,660 --> 00:19:13,080
Are we cleaning up?

267
00:19:13,100 --> 00:19:14,920
I guess we'll get to that at the end of meeting here,

268
00:19:15,160 --> 00:19:17,120
but we don't have to have anything about hub in the KDP,

269
00:19:17,580 --> 00:19:18,080
which I mentioned.

270
00:19:18,740 --> 00:19:24,900
Well, or should we can we at this point change

271
00:19:24,900 --> 00:19:28,400
to add these special one to the partnership format

272
00:19:28,400 --> 00:19:32,920
Just as a bill of either still get the points.

273
00:19:33,340 --> 00:19:38,020
I think it's a little late for us to do that today because we didn't publish it that way,

274
00:19:38,200 --> 00:19:42,400
but we can step back next time. Yeah, why not just allow this structure of the day?

275
00:19:42,880 --> 00:19:47,440
Yeah, yeah, why don't I mean, okay, that's.

276
00:19:50,160 --> 00:19:55,460
Do I, I don't recall, I mean, in the time I've been here, do you recall of

277
00:19:55,460 --> 00:19:59,720
I mean, it's similar situation in that beat two years ago.

278
00:20:00,200 --> 00:20:03,180
We have done a few transactions where the hub is moving over to this

279
00:20:03,180 --> 00:20:06,460
facility in a partner and I believe there have been some developments where the

280
00:20:06,460 --> 00:20:08,800
score would have affected the award.

281
00:20:09,140 --> 00:20:12,060
So I don't believe that this is the first development that would have been in this

282
00:20:12,060 --> 00:20:12,540
situation.

283
00:20:19,960 --> 00:20:20,120
Okay.

284
00:20:20,320 --> 00:20:28,160
Do any board members have further questions for Mr. Bunwellos or want to ask the developer applicant

285
00:20:28,160 --> 00:20:31,440
Any specific questions?

286
00:20:32,520 --> 00:20:35,360
The staff is making this recommendation.

287
00:20:36,040 --> 00:20:36,240
Yes.

288
00:20:36,480 --> 00:20:36,980
Staff is recommending.

289
00:20:39,040 --> 00:20:39,320
Okay.

290
00:20:40,560 --> 00:20:45,920
Anyone here to make a motion on this as I am 16 of the agenda.

291
00:20:51,870 --> 00:20:56,570
Mr. Chairman, I move the board grant the requested waiver of the syntax section 11.9b,

292
00:20:56,770 --> 00:20:59,790
regarding hub ownership interest as well as the requested amendment.

293
00:20:59,790 --> 00:21:06,150
The housing tax credit application or substructure for a Vante Legacy Del Sol for the reasons and this condition

294
00:21:06,150 --> 00:21:10,510
It described in the board action request resolutions and associated documents on this item

295
00:21:11,430 --> 00:21:14,630
Thank you motion made by Mr. Thomas is there a second

296
00:21:17,480 --> 00:21:22,620
second by Mr. Harper all those in favor say aye in the opposed

297
00:21:23,560 --> 00:21:25,200
Hearing none motion carries

298
00:21:26,300 --> 00:21:29,280
Thank you. Are we letting him go? Yes, okay, so

299
00:21:29,280 --> 00:21:30,540
continuing the 17

300
00:21:32,360 --> 00:21:50,620
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.

301
00:21:50,620 --> 00:21:56,320
the Hunden David B. Rattliff and Michael Bolts, Mr. Miller.

302
00:21:56,760 --> 00:22:00,660
The morning chairman Voskis members of the board, Sasha Strimler, here today in my

303
00:22:00,660 --> 00:22:05,420
capacity is Assistant General Council to present item 17, inserting in the agreed administrative

304
00:22:05,420 --> 00:22:10,500
penalty for Rosemodant Medellaine in a final order of debarment for Evan J. Hunden, David B.

305
00:22:10,640 --> 00:22:16,900
Rattliff and Michael Bolts. The property consists of a 264 unit development located in Dallas,

306
00:22:16,900 --> 00:22:23,200
which is subject to Alien Use Restriction Agreement signed by a prior owner in 2004, and exchange for...

307
00:22:30,000 --> 00:22:36,420
Education to construct and operate the property. Evan J. Huntington, David B. Rattliff, Michael Vols, Control,

308
00:22:36,860 --> 00:22:43,700
Rosemot, Medellaine, Manager, LLC, which is the sole member of Rosemot Medellaine Apartments, LLC. I will

309
00:22:43,700 --> 00:22:50,960
refer to them collectively as the responsible parties. The 2023 uniform physical standards inspection

310
00:22:50,960 --> 00:22:58,180
of the property resulted in a score of 47 out of 100. With 256 efficiencies cited, including

311
00:22:58,180 --> 00:23:05,000
131 level three deficiencies, which are the most severe, just for reference for the most recent

312
00:23:05,000 --> 00:23:09,760
round of inspections performed by the department, less than one half of one percent of all

313
00:23:09,760 --> 00:23:16,700
inspections done by TTHA score of 50 air below. The responsible party's failed to timely submit

314
00:23:16,700 --> 00:23:26,700
corrective documentation, despite being granted extensions by the department, the failure to correct

315
00:23:26,700 --> 00:23:29,100
resulted in an administrative penalty referral.

316
00:23:30,300 --> 00:23:32,040
After referral to enforcement committee,

317
00:23:32,640 --> 00:23:34,860
responsible parties submitted partial corrective documentation,

318
00:23:35,200 --> 00:23:38,160
but some events of non-compliance were still unresolved at the time of the

319
00:23:38,160 --> 00:23:41,320
informal conference which took place on July 30, 2024.

320
00:23:42,660 --> 00:23:45,960
Before you today is an agreed final order assessing an administrative penalty

321
00:23:45,960 --> 00:23:49,760
regarding the failure to submit corrective documentation for $15,000,

322
00:23:50,680 --> 00:23:53,860
as well as final orders of debarment for their responsible parties for repeated

323
00:23:53,860 --> 00:23:55,220
violations in a portfolio.

324
00:23:56,140 --> 00:24:00,800
10 tax section 2.401 E2A provides for mandatory

325
00:24:00,800 --> 00:24:03,720
department for repeated violations in a portfolio.

326
00:24:04,700 --> 00:24:07,200
When 50% or more of the actively monitored

327
00:24:07,200 --> 00:24:09,480
development under the control of the responsible

328
00:24:09,480 --> 00:24:11,440
parties have been referred for administrative

329
00:24:11,440 --> 00:24:13,760
penalty in the last three years.

330
00:24:14,620 --> 00:24:16,200
At exhibit two of your board materials,

331
00:24:16,460 --> 00:24:19,140
the chart showing the departments and analysis of the

332
00:24:19,140 --> 00:24:22,180
responsible parties control of accurately monitored

333
00:24:22,180 --> 00:24:27,280
developments, which concludes Mr. Ratliffe controls seven actively monitor developments,

334
00:24:27,500 --> 00:24:30,900
Mr. Vols controls seven and Mr. Huntington controls five.

335
00:24:31,420 --> 00:24:35,220
Of those developments, four actively monitor developments have been referred for an administrative

336
00:24:35,220 --> 00:24:40,520
penalty in the last three years, which exceeds the 50% threshold, which warrants mandatory

337
00:24:40,520 --> 00:24:41,840
department under the rules.

338
00:24:42,600 --> 00:24:46,060
If you'll indulge me, I do have to go a little further into the weeds about actively monitor

339
00:24:46,060 --> 00:24:50,540
developments because it is the basis under which the responsible parties assert that they have

340
00:24:50,540 --> 00:24:53,100
not met the 50% threshold which triggers department.

341
00:24:54,180 --> 00:24:58,500
Ten tax section 2.102 defines an actively monitored development.

342
00:24:59,100 --> 00:25:01,920
As a development that within the last three years,

343
00:25:02,240 --> 00:25:03,540
as a monitor by the department,

344
00:25:03,660 --> 00:25:05,760
either through a UPCS inspection,

345
00:25:06,000 --> 00:25:07,320
an inspire inspection,

346
00:25:07,860 --> 00:25:10,300
an on-site or desk file monitoring review,

347
00:25:10,460 --> 00:25:11,880
an affirmative market plan review,

348
00:25:12,060 --> 00:25:13,740
or written policies and procedures review.

349
00:25:14,520 --> 00:25:16,820
To determine if a development is actively monitored

350
00:25:16,820 --> 00:25:18,800
for the purposes of the department rule,

351
00:25:18,800 --> 00:25:26,940
To the HCA reviews each property in the ownership portfolio for one, the control start date, which is typically the purchase date.

352
00:25:27,860 --> 00:25:39,880
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.

353
00:25:40,620 --> 00:25:46,020
And three, whether there was an administrative penalty referral during the past three years under the responsible party.

354
00:25:47,460 --> 00:26:02,020
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

355
00:26:02,020 --> 00:26:06,520
Render the two properties actively monitored development.

356
00:26:07,100 --> 00:26:11,900
This would effectively lower the percentage of properties referred for the administrative penalties.

357
00:26:12,780 --> 00:26:15,500
Below the 50% threshold for the responsible parties.

358
00:26:16,380 --> 00:26:20,480
The two properties in question are post to all Medina and Brookside Gardens.

359
00:26:20,960 --> 00:26:25,080
Both of these properties were inspected by the department, received inspection reports,

360
00:26:25,280 --> 00:26:28,300
and had all non-compliance corrected under prior ownership.

361
00:26:29,060 --> 00:26:34,280
Staff feels that this question of the close-out letter is a bit of a red herring, as these

362
00:26:34,280 --> 00:26:38,460
are form letters that are sent out by the department, after all compliance issues have been

363
00:26:38,460 --> 00:26:44,680
corrected and no response or is requested or further action from the owners.

364
00:26:47,170 --> 00:26:57,010
Costa Almedina was inspected in July 2021 with all events of non-compliance corrected by the

365
00:26:57,010 --> 00:26:58,650
and December of 2021.

366
00:27:00,050 --> 00:27:05,310
TTHCA issued a close-out letter regarding the past inspection and corrections on March in March 2022,

367
00:27:05,670 --> 00:27:08,450
but required no further action a response on the owner's part.

368
00:27:09,590 --> 00:27:16,450
Workside Gardens was inspected April 2022 with all minutes of non-compliance corrected by the prior owner June 6, 2022.

369
00:27:17,250 --> 00:27:21,290
Responsible parties purchased the property June 22, 2022.

370
00:27:21,530 --> 00:27:24,950
TTHCA issued a close-out letter regarding the past inspection and corrections

371
00:27:24,950 --> 00:27:31,050
In October 2022, but it required no further action or response on the owner's part.

372
00:27:32,070 --> 00:27:35,730
In essence, the responsible parties would like to get credit for corrections made under

373
00:27:35,730 --> 00:27:40,430
prior owners in order to bolster their numbers to prevent triggering the 50% debarment

374
00:27:40,430 --> 00:27:40,830
threshold.

375
00:27:41,810 --> 00:27:45,710
The department has concerns about what precedent this may set for instance if other owners

376
00:27:45,710 --> 00:27:50,070
realize they are nearing the 50% threshold, they can purchase additional properties

377
00:27:50,070 --> 00:27:54,530
in good standing with a department to add to their portfolio essentially buying a prior

378
00:27:54,530 --> 00:27:57,430
owners good compliance history to prevent ever reaching

379
00:27:57,430 --> 00:27:58,110
that threshold.

380
00:27:58,550 --> 00:28:00,690
This goes against the intention of the rule.

381
00:28:01,790 --> 00:28:03,530
There is no required minimum or maximum

382
00:28:03,530 --> 00:28:04,610
debarment term.

383
00:28:05,270 --> 00:28:07,370
The enforcement committee reaches recommendation based on the

384
00:28:07,370 --> 00:28:10,530
material factors outlined under 10 tax section 2.401J,

385
00:28:11,290 --> 00:28:12,590
which is detailed in your materials.

386
00:28:14,090 --> 00:28:17,030
Also, of note, Mr. Vols and Mr. Ratliffe were previously

387
00:28:17,030 --> 00:28:18,550
referred to the enforcement committee for

388
00:28:18,550 --> 00:28:21,910
department in 2022, which was dismissed by the committee

389
00:28:21,910 --> 00:28:25,390
at the time, do you have a variety of factors including because they were new owners with

390
00:28:25,390 --> 00:28:29,910
a department, all non-compliance have been resolved, and the owners proposed a good plan

391
00:28:29,910 --> 00:28:33,830
to keep it from happening again, but the department did reserve the right to consider future

392
00:28:33,830 --> 00:28:38,670
department under 10 tax cheap.401, E2A, if there are additional future administrative penalty

393
00:28:38,670 --> 00:28:39,170
referrals.

394
00:28:42,310 --> 00:28:45,630
The Enforcement Committee recommends approval of the order of the department for

395
00:28:45,630 --> 00:28:50,350
Evan J. Hunden, David B. Ratliff, and Michael Vols for a period of two years. The Enforcement

396
00:28:50,350 --> 00:28:52,210
committee also recommends approval of the

397
00:28:52,210 --> 00:28:53,630
degree final order for administrative

398
00:28:53,630 --> 00:28:55,510
penalty in the amount of $15,000.

399
00:28:56,450 --> 00:28:57,570
I have available for questions.

400
00:28:58,770 --> 00:29:00,170
The questions come the month.

401
00:29:01,090 --> 00:29:04,490
Why only two years? Why not more?

402
00:29:04,670 --> 00:29:08,030
It means sounds like there's a pattern of

403
00:29:08,030 --> 00:29:11,030
non-compliance. The enforcement committee felt

404
00:29:11,030 --> 00:29:13,410
like this was enough to kind of, they have other

405
00:29:13,410 --> 00:29:15,910
properties in the portfolio. It was enough time for them

406
00:29:15,910 --> 00:29:18,710
to, the point of development is to make sure that they

407
00:29:19,250 --> 00:29:24,090
regrouping, making sure they're in control and managing their properties well and so they felt like a

408
00:29:24,090 --> 00:29:29,710
two year period was enough time for them to kind of regroup, get their affairs in order before they

409
00:29:29,710 --> 00:29:34,950
would be allowed to apply for additional funds with the department but of course the board has

410
00:29:34,950 --> 00:29:46,410
discretion to raise or lower that number. This is maybe a stupid question and I'm happy to take response

411
00:29:46,410 --> 00:29:57,850
really for a stupid question. What happens to their tax credits in this case? Who is receiving the tax credits?

412
00:30:01,520 --> 00:30:08,940
So they have recindicated six properties in 2023. So I believe for those, they would be receiving those,

413
00:30:11,000 --> 00:30:16,760
but I think this particular property has not been recindicated. So for this property, I believe they were with the prior owner.

414
00:30:16,980 --> 00:30:22,500
So the department does not affect them continuing to receive their tax credits.

415
00:30:22,500 --> 00:30:40,580
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.

416
00:30:40,580 --> 00:30:48,640
are that would they be allowed to be in another deal as a limited partner or a

417
00:30:48,640 --> 00:30:53,200
just a department preventive matter to your name show up on anything that comes

418
00:30:53,200 --> 00:30:55,740
across the your desk?

419
00:30:56,160 --> 00:31:00,740
I believe so for any applications they I believe they check they would check in the

420
00:31:00,740 --> 00:31:01,420
organizational chart.

421
00:31:01,440 --> 00:31:07,840
So if one of them was a limited partner on another deal, right, and that's why it's

422
00:31:07,840 --> 00:31:14,820
individuals because it's not for this particular management company or LLC. It's for the

423
00:31:14,820 --> 00:31:23,700
individuals in the LLC. And you're saying two years could it be rewarded to say until

424
00:31:23,700 --> 00:31:31,910
until it's such time that the applicant reapplies but not less, not sooner than two years so that

425
00:31:32,770 --> 00:31:37,330
I don't believe so I have to be a defined period of time for the department.

426
00:31:37,330 --> 00:31:37,670
Yeah.

427
00:31:39,870 --> 00:31:41,030
Thank you.

428
00:31:41,090 --> 00:31:42,110
Sure, I have a question.

429
00:31:42,850 --> 00:31:46,950
Did you say you found 51 deficiencies or 151?

430
00:31:48,450 --> 00:31:51,210
I believe it was 256.

431
00:31:53,310 --> 00:31:53,570
Okay.

432
00:31:54,630 --> 00:32:00,290
Could that have been one deficiency in every unit, the same deficiency in every unit?

433
00:32:00,290 --> 00:32:07,410
I believe it is sampling of units, but each, each deficiency is given as marked as a step.

434
00:32:07,410 --> 00:32:12,290
Yeah, what I meant was like, then a hood didn't work in any of the units right.

435
00:32:12,470 --> 00:32:15,770
Right, each of those units would that be 260.

436
00:32:15,830 --> 00:32:18,090
260 violations or would that just be one violation?

437
00:32:19,290 --> 00:32:21,110
I believe it would be one per.

438
00:32:26,410 --> 00:32:29,150
I believe each deficiency stands on its own.

439
00:32:29,630 --> 00:32:32,630
So theoretically, it could be that, but I believe,

440
00:32:32,630 --> 00:32:35,990
are the deficiencies included with this or it acts like that?

441
00:32:35,990 --> 00:32:38,870
Yes, they're outlined in the materials, if you'd like.

442
00:32:38,950 --> 00:32:40,130
Thank you.

443
00:32:43,060 --> 00:32:45,360
The my only other concern for questions,

444
00:32:46,720 --> 00:32:48,280
or any deficiencies,

445
00:32:48,940 --> 00:32:51,380
health safety, life safety that

446
00:32:51,940 --> 00:32:53,780
should have been,

447
00:32:53,780 --> 00:32:57,200
do we refer anything to the local health authorities

448
00:32:57,200 --> 00:33:01,920
and groups giving certificates of occupancy and things like that?

449
00:33:02,860 --> 00:33:07,680
So, if you look in the materials, it does outline which ones are health and safety violations.

450
00:33:08,620 --> 00:33:14,040
There were a number of them. A lot of them were like exposed wiring, exposed wiring near water.

451
00:33:15,400 --> 00:33:20,820
Those kinds of things. Also just to note, they do actually have an open city of Dallas's file,

452
00:33:21,260 --> 00:33:27,820
a lawsuit against the development for code enforcement violations, and they have an agreed temporary injunction currently.

453
00:33:27,820 --> 00:33:42,720
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.

454
00:33:43,160 --> 00:33:47,520
I mean, are we doing that when we encounter the exposed wires there?

455
00:33:49,140 --> 00:33:55,680
I don't believe in apartment works with local authorities, but the local authorities are, sort of, they're two separate different.

456
00:33:55,680 --> 00:34:03,060
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.

457
00:34:03,160 --> 00:34:13,680
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.

458
00:34:14,220 --> 00:34:19,680
I just, I think it was probably before you were on board, I mean, remember, was it Galveston

459
00:34:20,180 --> 00:34:25,020
that there was some development that would just, say, in HyperCOV, in HyperCOV, I mean,

460
00:34:25,540 --> 00:34:31,160
in HyperCOV, yes, in HyperCOV, that sounds right, we're, I mean, just, when we, I just

461
00:34:31,160 --> 00:34:35,280
want to ensure that the department, when we are doing these substantive inspections and we

462
00:34:35,280 --> 00:34:40,740
find these violations aren't just technical administrative things that those are important

463
00:34:40,740 --> 00:35:06,180
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.

464
00:35:06,180 --> 00:35:17,800
Does the simple two-year department, if they have other properties that are in some stage of non-compliance or not?

465
00:35:18,140 --> 00:35:20,860
What is the ultimate penalty?

466
00:35:21,480 --> 00:35:33,120
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?

467
00:35:33,120 --> 00:35:40,960
I mean, they can still be referred for additional administrative penalties for any other compliance

468
00:35:40,960 --> 00:35:44,120
violations for any other developments during this time period.

469
00:35:45,100 --> 00:35:49,380
So I would presume they would want to get those fixed so that they can, when their department

470
00:35:49,380 --> 00:35:54,500
period has ended, they could apply for additional tax credits.

471
00:35:54,820 --> 00:36:01,860
They did resendicate six properties in 2023, so they are seem actively trying to.

472
00:36:01,860 --> 00:36:07,080
So, really, and we haven't given them the ultimate penalty.

473
00:36:08,400 --> 00:36:12,020
Yeah, the penalties are per the development, really.

474
00:36:13,120 --> 00:36:17,420
The Department is separate from a penalty for non-compliance at a development.

475
00:36:18,280 --> 00:36:20,020
Okay. Mr. Chairman.

476
00:36:22,520 --> 00:36:26,480
So, in this one, I think we're really only seeing part of the problem.

477
00:36:26,480 --> 00:36:34,380
in addition to 156 deficiencies. Of course, we're just saying the housing aspect, but you

478
00:36:34,380 --> 00:36:41,280
also brought up Dallas and the criminal activity. Now oftentimes, what people will say is,

479
00:36:42,020 --> 00:36:47,840
what we could have gone to fix it, but we're afraid. So there's only, you know, we're only

480
00:36:47,840 --> 00:36:57,820
and it's obvious that there's a lot more to it, and I think on TV we've seen a lot of that.

481
00:36:58,440 --> 00:37:03,820
So that, I think there's a lot more than just 256 deficiencies.

482
00:37:07,710 --> 00:37:12,010
Okay, this is in the greed vinyl order that we have to make them.

483
00:37:12,010 --> 00:37:15,910
So I assume that the applicant, or his representatives,

484
00:37:16,970 --> 00:37:22,410
don't really have anything that they must share with us. But if you're welcome to share

485
00:37:22,410 --> 00:37:24,330
with us, if you want to, please come up in.

486
00:37:30,300 --> 00:37:33,580
We were about to vote on the agreed final order.

487
00:37:34,720 --> 00:37:37,400
So Mr. Chair, I'd get your name.

488
00:37:37,640 --> 00:37:37,960
Your name, I'd be with.

489
00:37:38,460 --> 00:37:45,100
The final order is on the 15,000 dollar fine.

490
00:37:45,540 --> 00:37:48,760
The developer is in agreement with that.

491
00:37:49,880 --> 00:37:56,580
The department, two year of the department, is not on the agreed final order.

492
00:37:56,580 --> 00:38:00,460
Well, so we can increase that. Is that what we're saying? Okay, all right, I'm sorry.

493
00:38:00,780 --> 00:38:02,520
Let's continue. I didn't. I thought this was a greeting.

494
00:38:03,100 --> 00:38:03,520
I thought this was a greeting.

495
00:38:04,220 --> 00:38:04,320
Yeah.

496
00:38:05,560 --> 00:38:11,720
I can say your name for the record.

497
00:38:12,520 --> 00:38:16,940
My name is Michael Falls. I'm with DevCo as the CFO.

498
00:38:18,140 --> 00:38:22,940
We believe that the department is a disproportionate response to the issues at hand.

499
00:38:22,940 --> 00:38:28,720
The administrative penalties imposed on DEFCO in 22 included UPCS referrals, but also included

500
00:38:28,720 --> 00:38:33,300
less severe issues that were focused on reporting deadlines. For example, the penalty for the

501
00:38:33,300 --> 00:38:38,840
Mandelo stem from a misdead line for submitting corrective documentation. And after a final

502
00:38:38,840 --> 00:38:44,040
file monitoring report, once a curative C follow-up was made, the documentation was provided the same

503
00:38:44,040 --> 00:38:48,420
day. And the penalty referral was closed. Following the resolution of these penalties,

504
00:38:48,420 --> 00:38:52,680
These Devco successfully pass 10 subsequent reviews across its portfolio.

505
00:38:53,820 --> 00:38:57,480
The penalty at Medellaine was due to failing to meet a specific time frame for addressing

506
00:38:57,480 --> 00:39:03,320
physical deficiencies, and although the deadline was not met, a recent September inspection

507
00:39:03,320 --> 00:39:09,700
and inspection on the anniversary of the original one showed a passing and spire score and confirmed

508
00:39:09,700 --> 00:39:11,460
that the outstanding issues had been resolved.

509
00:39:12,200 --> 00:39:15,860
As a result of the passing inspection, we do not meet the standard for the mandatory Department

510
00:39:15,860 --> 00:39:20,400
and the code that is required for two consecutive failing and spires scores.

511
00:39:21,140 --> 00:39:25,200
DevCos actively investing in improvements that meddling, including significant capital expenditures

512
00:39:25,200 --> 00:39:29,700
and a change in property management, and those efforts are reflected in the substantial

513
00:39:29,700 --> 00:39:31,300
improvement in our empire score.

514
00:39:32,220 --> 00:39:36,440
We asked the board consider the full context of DevCos efforts when evaluating these penalties.

515
00:39:37,680 --> 00:39:41,140
DevCos demonstrated a commitment to affordable housing by investing millions of dollars

516
00:39:41,140 --> 00:39:45,500
in the recent occasion and renovation of seven properties, and in particular the investments

517
00:39:45,500 --> 00:39:50,800
made recently and metled lane, underscore our dedication to improve even our most challenging

518
00:39:50,800 --> 00:39:57,220
property. Given that many of these penalties were earlier in the past, some of which were

519
00:39:57,220 --> 00:40:01,600
more administrative in nature, coupled with the fact that this would be a non-mandatory

520
00:40:01,600 --> 00:40:05,120
department. We believe that the department here would be an excessive penalty.

521
00:40:08,460 --> 00:40:14,780
By the way, do we have a timer in the room? Okay, we do. Okay, we do have one, so there's no lights

522
00:40:14,780 --> 00:40:16,860
but you'll hear the buzz.

523
00:40:18,300 --> 00:40:22,040
Also, we didn't do the Eccles rule.

524
00:40:23,020 --> 00:40:25,280
So, I entertain a motion to have a public comment.

525
00:40:25,500 --> 00:40:26,380
Today's meeting, okay.

526
00:40:26,780 --> 00:40:27,900
See public input.

527
00:40:28,320 --> 00:40:31,580
Okay, my Mr. Martian, seconded by Ms. Various,

528
00:40:31,720 --> 00:40:32,820
all of the favors say aye.

529
00:40:33,000 --> 00:40:35,100
Hearing them oppose motion carries.

530
00:40:35,360 --> 00:40:37,020
Let's continue on, Mr. Observe.

531
00:40:38,460 --> 00:40:40,040
Hi, my name is Kim Spinney.

532
00:40:40,060 --> 00:40:41,220
I am also with Dev call.

533
00:40:41,400 --> 00:40:42,680
I'm the director of asset management.

534
00:40:42,680 --> 00:40:49,040
But as Michael noted, since we have been under the three year windows, I'm sorry, that's

535
00:40:49,040 --> 00:40:49,340
the two.

536
00:40:49,500 --> 00:40:49,900
That's over.

537
00:40:50,480 --> 00:40:54,700
From 2022, we do acknowledge that we're 10 monitoring reviews during that period.

538
00:40:55,300 --> 00:40:57,080
Seven were corrected in the timely manner.

539
00:40:57,560 --> 00:41:00,600
One was referred for the administrative penalty, which is middle lane.

540
00:41:00,740 --> 00:41:04,940
And then two are pending corrective actions, middle lane, stemming from recent

541
00:41:04,940 --> 00:41:06,920
inspection in September of this year.

542
00:41:07,420 --> 00:41:11,260
And plain view, which had its findings closed out on October 3rd of this year.

543
00:41:11,260 --> 00:41:18,280
of those 10 reviews only one has escalated to the penalty status of medallain, and that was related to the physical deficiencies.

544
00:41:18,900 --> 00:41:26,000
The other review findings were administrative and nature and more so related to timing of submitting corrections as opposed to substantial deficiencies.

545
00:41:27,760 --> 00:41:33,860
As mentioned before, we did have an informal conference underbarmant with the TDA, on July 30th of this year.

546
00:41:33,860 --> 00:41:38,900
At that time, we had asked the agency to postpone their decision on our department until that

547
00:41:38,900 --> 00:41:43,200
next inspired inspection at Medellaine, which would allow us the opportunity to showcase

548
00:41:43,200 --> 00:41:46,120
our commitment to the asset and improvement of that prior score.

549
00:41:46,980 --> 00:41:51,080
At that time, we expected the inspection to occur at the end of September, and we received

550
00:41:51,080 --> 00:41:55,220
notice in September that that would occur on the 26th.

551
00:41:55,280 --> 00:41:58,580
That inspection was successfully held on the 26th of September.

552
00:41:58,580 --> 00:42:05,200
We improved our score by 28 points to a 75.2, and we believe that that score would

553
00:42:05,200 --> 00:42:06,980
wave favorably in the department decision.

554
00:42:08,120 --> 00:42:12,920
We did receive the agency's report the next day on September 27th, and immediately began

555
00:42:12,920 --> 00:42:16,320
working on any of the life safety matters, which I want to point out.

556
00:42:16,500 --> 00:42:18,240
We're significantly reduced from last year.

557
00:42:18,360 --> 00:42:22,860
I believe to under 10 from the variety of level three inspections that were noted.

558
00:42:24,080 --> 00:42:29,020
Over the course of the past year since we had received our initial feeling inspection last September,

559
00:42:29,520 --> 00:42:35,000
we recognized that the prior property manager was not shepherding the property and paying attention

560
00:42:35,000 --> 00:42:39,740
to the items that they should have as required for a turn 64 unit property.

561
00:42:40,720 --> 00:42:44,860
We began discussions to replace the management company last year and after several months

562
00:42:44,860 --> 00:42:48,780
of interviewing different firms and determined who would be the best partner for us.

563
00:42:48,780 --> 00:42:54,040
We chose asset living, who does business as alpha barns on the affordable side, as our partner.

564
00:42:54,580 --> 00:43:02,460
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.

565
00:43:03,580 --> 00:43:18,020
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,

566
00:43:18,020 --> 00:43:24,240
necessary work that was required to turn these units, upwards of $50,000 per unit, which

567
00:43:24,240 --> 00:43:30,560
Devco has invested over $3 million this year alone to achieving that goal. In the short time

568
00:43:30,560 --> 00:43:36,240
that asset living has been the manager, they've been able to lease 20 units, which is a

569
00:43:36,240 --> 00:43:40,640
demonstration in the market that not only existing residents, but new applicants are encouraged

570
00:43:40,640 --> 00:43:46,320
to find their home at Medellaine, and they've been able to successfully make great strides

571
00:43:46,320 --> 00:43:49,740
of the city of Dallas as well as part of that temporary injunction.

572
00:43:53,150 --> 00:43:53,650
Any questions?

573
00:43:54,970 --> 00:43:55,370
Go ahead.

574
00:43:55,530 --> 00:43:55,770
This motion.

575
00:43:55,930 --> 00:44:00,530
How many total projects do you have?

576
00:44:00,530 --> 00:44:03,550
Were the financing was approved by this board?

577
00:44:04,150 --> 00:44:05,950
So in taxes we have ten.

578
00:44:06,310 --> 00:44:08,010
Not all of them are tax credits indicated.

579
00:44:08,290 --> 00:44:09,510
Seven of the ten are.

580
00:44:10,050 --> 00:44:10,130
Okay.

581
00:44:10,550 --> 00:44:14,530
Are all the any of those other seven in trouble?

582
00:44:15,250 --> 00:44:15,350
No.

583
00:44:15,350 --> 00:44:19,130
They have no complaints, nothing with the agency.

584
00:44:19,690 --> 00:44:24,230
No, and I would say that the seven that we've syndicated all either closed last year or this year,

585
00:44:24,430 --> 00:44:30,350
and we work with a variety of very reputable capital partners, and who have all worked with DevCo

586
00:44:30,350 --> 00:44:34,330
in a prior capacity, as well, given that we managed seven over 70 properties.

587
00:44:34,570 --> 00:44:40,590
I thought I heard you say that there were other properties that they had violations on.

588
00:44:44,300 --> 00:44:48,340
They were only referred for administrative penalty for the Rosemalyn Medo Lane.

589
00:44:48,680 --> 00:44:59,400
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.

590
00:45:00,000 --> 00:45:04,900
No other active referrals. For that, not this time now.

591
00:45:07,250 --> 00:45:08,830
Mr. Hubs, you have more?

592
00:45:09,250 --> 00:45:11,210
My name is Barry Palmer.

593
00:45:11,410 --> 00:45:13,030
Oh, I'm sorry.

594
00:45:13,830 --> 00:45:14,650
All right.

595
00:45:15,170 --> 00:45:18,310
With those rows law firm and we represent Sevco.

596
00:45:18,990 --> 00:45:22,550
Devco specializes in preserving affordable housing.

597
00:45:23,150 --> 00:45:28,250
Their business model is to acquire tax-predict properties that have completed their initial

598
00:45:28,250 --> 00:45:32,730
15-year compliance period, and to recapitalize the properties

599
00:45:32,730 --> 00:45:35,430
with bonds financing and 4% tax credits.

600
00:45:36,070 --> 00:45:39,150
This allows for a major renovation of the properties

601
00:45:39,150 --> 00:45:41,910
in the range of 50 to 80,000 per unit.

602
00:45:42,670 --> 00:45:45,310
And most importantly, it commits the properties

603
00:45:45,310 --> 00:45:50,190
to remain as affordable housing for an additional 30-year period.

604
00:45:51,070 --> 00:45:55,210
The developers like Devco, Serving, and Important Public Policy

605
00:45:55,210 --> 00:46:02,130
interest by working towards preserving affordable housing, rather than allowing it to convert

606
00:46:02,130 --> 00:46:03,730
to market rate housing.

607
00:46:04,650 --> 00:46:10,150
Defko is acquired 10 tax credit properties in Texas so far, and they have re- syndicated

608
00:46:10,150 --> 00:46:17,190
seven of those properties and invested over $87 million in improvements.

609
00:46:18,170 --> 00:46:23,550
Defko has had some compliance issues, they have not been as diligent as they should have

610
00:46:23,550 --> 00:46:30,530
and compliance reporting, this was primarily caused by their third party management company,

611
00:46:30,570 --> 00:46:36,770
which has since been replaced. They've only had one property that has had serious physical

612
00:46:36,770 --> 00:46:43,450
deficiencies, and as it relates to that property, they spent over $2.3 million this year,

613
00:46:43,750 --> 00:46:50,810
and over $8 million since 2021 to address those deficiencies, which have been all now been addressed.

614
00:46:50,810 --> 00:46:55,350
The TDACA's rule says the developer can be

615
00:46:55,350 --> 00:47:00,630
divided if over 50% of their properties that are actively monitored

616
00:47:00,630 --> 00:47:05,030
have been subject to a referral for administrative penalty.

617
00:47:05,810 --> 00:47:10,130
Here, there have been four properties referred out of 10 properties.

618
00:47:10,970 --> 00:47:16,350
The reason staff calculates that they meet 50% requirement is

619
00:47:16,350 --> 00:47:20,050
they are not counting two properties that Devka owns

620
00:47:20,050 --> 00:47:24,550
because the properties were last inspected prior to their acquisition.

621
00:47:25,430 --> 00:47:31,110
Depth code has only these properties in one case for three years and in the other case for two and a half years.

622
00:47:31,730 --> 00:47:41,610
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.

623
00:47:41,610 --> 00:47:48,530
The rules say that you're actively monitoring if the development has been inspected within

624
00:47:48,530 --> 00:47:54,890
the last three years by the TDACA, either by a fiscal inspection or a desk file monitoring

625
00:47:54,890 --> 00:47:58,470
review, both of these properties meet that definition.

626
00:47:58,470 --> 00:48:10,510
So, TTHCA should not be penalizing dev co when, because of the fact that the properties

627
00:48:10,510 --> 00:48:16,230
haven't been inspected in the last couple of years, and because they meet the threshold

628
00:48:16,230 --> 00:48:21,390
of having less than 50% of their properties being preferred for enforcement.

629
00:48:21,390 --> 00:48:46,270
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.

630
00:48:51,500 --> 00:49:01,120
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.

631
00:49:02,780 --> 00:49:05,720
Yeah, the language says, shall be referred for a department.

632
00:49:06,420 --> 00:49:13,400
Well, say, we buy the argument on less than 50%, does that prevent the board from debarring?

633
00:49:14,240 --> 00:49:16,100
They still have the authority to debar, right?

634
00:49:16,100 --> 00:49:18,380
Okay, so it's sort of new.

635
00:49:18,740 --> 00:49:19,080
Great.

636
00:49:19,580 --> 00:49:20,100
Okay, thanks.

637
00:49:21,400 --> 00:49:22,220
This is what it is.

638
00:49:22,640 --> 00:49:24,180
Mr. Chairman, I'm sorry.

639
00:49:24,960 --> 00:49:29,720
What I keep hearing is, we acquired on this affordable house.

640
00:49:29,820 --> 00:49:31,840
We acquired text credits.

641
00:49:32,080 --> 00:49:32,500
We acquired.

642
00:49:34,480 --> 00:49:37,520
And I keep saying the same thing over and over again.

643
00:49:38,180 --> 00:49:40,880
There's a very simple sentence.

644
00:49:41,740 --> 00:49:44,900
Safe, decent, and affordable.

645
00:49:46,100 --> 00:49:53,160
Yeah, you can acquire a lot, but a lot of this, Mr. Chairman, you're not safe for decent, so what's the point?

646
00:49:53,800 --> 00:49:56,100
We're quibbling with...

647
00:49:56,640 --> 00:49:59,200
I'm a retired lawyer, so I don't want to sound like a lawyer.

648
00:49:59,560 --> 00:50:04,240
I have seven properties, but you're willing to check two, so it's not 50%.

649
00:50:04,240 --> 00:50:08,060
Well, I can see why they don't like lawyers, but I'm retired, so that's it.

650
00:50:08,060 --> 00:50:15,500
But talk about safe and decent, that is the whole purpose of this, of our job.

651
00:50:16,300 --> 00:50:18,420
And I think you know which way I'm going to vote.

652
00:50:18,820 --> 00:50:20,920
So five years, I'll like give you five years.

653
00:50:21,380 --> 00:50:30,200
So in response to that, you know, Devco acquires expert at properties that have already gone

654
00:50:30,200 --> 00:50:33,720
through their initial 15-year compliance period plus some.

655
00:50:33,720 --> 00:50:41,220
So these properties are typically close to 20 years or more old by the time they require

656
00:50:41,220 --> 00:50:48,620
them and have been run down from usage and needs substantial capital infusions.

657
00:50:49,340 --> 00:50:53,980
And that's what they have done is recent decades of them and raised substantial amounts

658
00:50:53,980 --> 00:51:01,380
of capital put in and rehabilitated these properties spending in some cases $80,000 a unit

659
00:51:01,380 --> 00:51:02,820
to rehab the illness.

660
00:51:05,120 --> 00:51:09,140
So these are not brand new properties that they're acquiring.

661
00:51:10,960 --> 00:51:17,320
Are these penalties calendar would it start today and then go two years or is it

662
00:51:17,320 --> 00:51:23,900
round? Is it two years of applications for rounds or? It would be two years from the date.

663
00:51:24,100 --> 00:51:30,520
The order is signed, which is would be today. And would that preclude them from participating for

664
00:51:30,520 --> 00:51:32,700
to count two rounds?

665
00:51:35,360 --> 00:51:38,680
I believe it depends on what kind of credits are applying

666
00:51:38,680 --> 00:51:39,980
for in terms of the cycles.

667
00:51:42,340 --> 00:51:45,500
It'd be geared from any credit for, aren't they?

668
00:51:45,880 --> 00:51:46,140
Right.

669
00:51:46,320 --> 00:51:48,640
Yeah, it's just the application cycle periods

670
00:51:48,640 --> 00:51:51,060
for 4% and 9% are different, so.

671
00:51:51,100 --> 00:51:51,400
Okay.

672
00:51:57,090 --> 00:51:58,690
You have a statement in the packet here,

673
00:51:58,690 --> 00:52:00,390
the 2020 Department of Pro sure

674
00:52:00,390 --> 00:52:01,290
that had been a workup called,

675
00:52:01,370 --> 00:52:02,870
but the promised changes from 2020

676
00:52:02,870 --> 00:52:03,870
were not fully implemented.

677
00:52:04,570 --> 00:52:06,150
If you elaborate on that first moment.

678
00:52:08,050 --> 00:52:11,990
So, in the 2022 department referral,

679
00:52:14,210 --> 00:52:18,570
they were up for department for the same issue of having

680
00:52:18,570 --> 00:52:24,170
over 50% of portfolio, but at that time, I was not present for them, but I, for my

681
00:52:24,170 --> 00:52:29,710
understand, they offered a plan that showed how they would more properly manage more, you

682
00:52:29,710 --> 00:52:29,870
know.

683
00:52:30,000 --> 00:52:59,080
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.

684
00:52:59,080 --> 00:53:01,700
significant that they've been referred twice under this rule.

685
00:53:02,300 --> 00:53:03,460
Thank you very much.

686
00:53:04,420 --> 00:53:08,080
But since that 2022 incident,

687
00:53:09,020 --> 00:53:15,180
the death co has been inspected by the TTHCA 10 times seven times.

688
00:53:15,180 --> 00:53:21,340
It's been passing one property this one in Dallas had a lot of problems

689
00:53:21,340 --> 00:53:23,040
the other two are still in process.

690
00:53:23,040 --> 00:53:32,220
But, you know, they passed their inspections, you know, most of the time since the 2022 problem.

691
00:53:33,780 --> 00:53:35,920
The social let me ask you is the department.

692
00:53:36,940 --> 00:53:48,000
You and your team convinced that the developer is indeed investing substantial amounts of dollars to rectify these problems.

693
00:53:48,000 --> 00:53:54,060
I believe so at the enforcement committee meeting, I believe they told us they spent over

694
00:53:54,060 --> 00:53:57,840
a little over $2 million fixing up the issues that that's property.

695
00:54:00,580 --> 00:54:07,580
This year alone and since that meeting we've invested probably an average of $500,000 a month

696
00:54:07,580 --> 00:54:12,920
on unit turn work, exterior and community improvements as well as security.

697
00:54:13,840 --> 00:54:15,340
We have security seven days a week.

698
00:54:15,340 --> 00:54:19,900
We have data and grants, we have a robust security monitoring system.

699
00:54:19,980 --> 00:54:25,080
So we are doing what we feel is the appropriate measure to regain control of this property

700
00:54:25,080 --> 00:54:30,660
and all the measures with replacing the management company, our on-site partner, as well as the

701
00:54:30,660 --> 00:54:33,600
Dev Coating being very committed to this asset.

702
00:54:34,340 --> 00:54:34,480
Okay.

703
00:54:34,860 --> 00:54:38,480
When is the next schedule re-inspection?

704
00:54:40,770 --> 00:54:45,330
So this property compliance is put them on an annual inspection schedule.

705
00:54:45,330 --> 00:54:52,690
So they just had one in September 26th, 2024, so the next one would be in September of 2025, I believe.

706
00:54:53,650 --> 00:54:57,510
Or were we able to do it more frequently, saying six months rather than in a year?

707
00:54:57,970 --> 00:55:00,650
I believe so if that's something.

708
00:55:00,650 --> 00:55:10,350
And then my next question is, does the board have the ability to say, will do the two-year

709
00:55:10,350 --> 00:55:18,400
department suspended until pending the result of the next, the next inspection,

710
00:55:20,540 --> 00:55:20,680
and if

711
00:55:20,680 --> 00:55:22,400
it improves, then fine,

712
00:55:25,150 --> 00:55:26,670
if it doesn't, then hey,

713
00:55:30,740 --> 00:55:34,280
let's get this answer here first of

714
00:55:34,280 --> 00:55:35,060
that's even an option.

715
00:55:36,040 --> 00:55:41,040
I think that from a procedural standpoint it would be more rational to table

716
00:55:43,470 --> 00:55:44,850
itself rather

717
00:55:44,850 --> 00:55:48,330
than issue an order of department and then try to suspend that order.

718
00:55:51,000 --> 00:55:57,460
I believe in the department we did a few months ago, we gave it, I think I was at a five-year

719
00:55:57,460 --> 00:56:00,940
department, but after two years they would have the chance to come to the board and ask

720
00:56:00,940 --> 00:56:05,840
to reinstate it based on the stress properties, et cetera, so that would be something.

721
00:56:06,380 --> 00:56:11,600
That is something we have done before the ability to seek reinstatement after a different

722
00:56:11,600 --> 00:56:19,080
but that was an acting or a new department deal by the board, as opposed to suspending the actual order of

723
00:56:19,080 --> 00:56:19,540
department.

724
00:56:22,360 --> 00:56:23,900
Mr. Marshall, you have any thoughts?

725
00:56:26,660 --> 00:56:28,880
No, sir. I'm ready to go.

726
00:56:31,790 --> 00:56:33,990
Do you have any other board members of

727
00:56:35,800 --> 00:56:42,300
the thoughts? I am, if they are indeed investing the funds to fix everything,

728
00:56:44,650 --> 00:56:46,790
I could be persuaded to not

729
00:56:46,790 --> 00:56:58,940
do an immediate department, or table it, or that portion will defer to the feeling of the rest of the board.

730
00:57:01,320 --> 00:57:07,640
Be willing to, second amendment, a motion that would be farther than for two years,

731
00:57:08,120 --> 00:57:20,020
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.

732
00:57:20,020 --> 00:57:25,020
read a statement. And that's similar to what you, I could

733
00:57:25,020 --> 00:57:30,300
circle just said that the five year or down to two, if they

734
00:57:30,300 --> 00:57:34,560
show they did. This may have two year down to one, and basically just

735
00:57:34,560 --> 00:57:36,560
eliminate some from the next one. But if they don't want to

736
00:57:36,560 --> 00:57:39,220
harm Michael, they won't be eligible. Sure.

737
00:57:42,380 --> 00:57:45,240
Mr. Chairman, they are exalt this.

738
00:57:47,560 --> 00:57:47,860
Mr.

739
00:57:48,860 --> 00:57:51,000
I'm going to have the board approved the agreed final order

740
00:57:51,000 --> 00:57:53,240
assessment administrative penalty for non-compliance against the

741
00:57:53,240 --> 00:57:57,400
was Montmetto's laying departments in the issue of fall or a department for term of two years.

742
00:57:57,940 --> 00:58:05,080
So with the option for appeal, after one year, against responsible parties, Evan,

743
00:58:05,740 --> 00:58:10,360
day, hundred, David, B, Ratliffe, Michael Falls, all of the scrap, authorised in addition

744
00:58:10,360 --> 00:58:14,140
to Board Action and Quest Resolution, Associate Documents and Sodom, the intent of that

745
00:58:14,140 --> 00:58:17,520
is that they do what they're supposed to do, they can come back within one year and

746
00:58:17,520 --> 00:58:20,680
come before this board for an appeal of that department.

747
00:58:21,940 --> 00:58:25,520
That second I have a minute, it's a proper, I mean motion.

748
00:58:26,220 --> 00:58:29,460
The concept of appeal is a little bit sticky on this.

749
00:58:29,620 --> 00:58:39,040
If you mean with the option to seek reinstatement upon showing of satisfaction of, and then

750
00:58:39,040 --> 00:58:41,380
it's up to you to determine, what are they seeking?

751
00:58:41,380 --> 00:58:42,220
Let me satisfy.

752
00:58:43,180 --> 00:58:45,360
Let me be the ceiling base more clear.

753
00:58:45,360 --> 00:58:56,440
So, we're going to start back at the term of two years with the staff's review and compliance

754
00:58:56,440 --> 00:59:02,380
of their existing properties, they may be reinstated after one year against their responsibilities.

755
00:59:02,960 --> 00:59:03,840
I don't help you.

756
00:59:04,440 --> 00:59:05,020
It does.

757
00:59:05,260 --> 00:59:09,800
Do you want them to come back before the board to seek reinstatement because it is a board order?

758
00:59:11,340 --> 00:59:17,620
If they meet the obligations of staff, they're welcome that we will say these people at

759
00:59:18,880 --> 00:59:19,320
time.

760
00:59:19,340 --> 00:59:21,360
That makes sense to me.

761
00:59:21,840 --> 00:59:26,180
I mean, there's no reason why I'd say, or if they've done it, then the staff is going

762
00:59:26,180 --> 00:59:28,120
to recommend, yes, they did it.

763
00:59:28,180 --> 00:59:28,620
They're compliant.

764
00:59:29,380 --> 00:59:30,860
Why haven't they come all the way here and do all that?

765
00:59:30,860 --> 00:59:32,480
I take that back, bring them to the board.

766
00:59:32,800 --> 00:59:34,620
That way, they're paying off the staff.

767
00:59:34,620 --> 00:59:39,040
And he could be on could have said it in gender, since we'd previously agreed to.

768
00:59:39,220 --> 00:59:40,160
Oh, that's fine.

769
00:59:40,240 --> 00:59:41,360
I have to write this down to get this.

770
00:59:45,760 --> 00:59:46,480
All right.

771
00:59:46,860 --> 00:59:48,980
How's your recommendation for us?

772
00:59:51,730 --> 00:59:53,530
I don't think we have to put the end on the consent.

773
01:00:03,200 --> 01:00:12,660
I believe Mr. Harper your suggestion is a final order of debarment for a term of two years, the

774
01:00:12,660 --> 01:00:24,280
statement at one subject to the responsible party's ability to seek reinstatement after one year upon

775
01:00:24,280 --> 01:00:26,900
showing of satisfaction,

776
01:00:31,650 --> 01:00:37,920
of all outstanding deficiencies.

777
01:00:39,200 --> 01:00:43,740
What would it be that we need to respond to that one open order within the time frame,

778
01:00:43,740 --> 01:00:46,180
which I think is December 26 of this year?

779
01:00:47,260 --> 01:00:49,500
Has the pending corrective action period?

780
01:00:49,960 --> 01:00:54,940
Or would we give credit to the fact that our score already increased 28 points from last year

781
01:00:54,940 --> 01:00:58,740
to this year as a significant showmanship of improvement.

782
01:00:59,060 --> 01:01:01,220
I don't think we should be bragging that we all got something to talk about.

783
01:01:01,220 --> 01:01:05,320
No, I do want to recognize all that sport they don't prove.

784
01:01:05,880 --> 01:01:10,480
I believe, so they still have a 90-day corrective action period to fix the deficiencies that

785
01:01:10,480 --> 01:01:11,260
were cited in September.

786
01:01:12,000 --> 01:01:15,440
So assuming they have corrected all those deficiencies at that time, and I would say assuming

787
01:01:15,440 --> 01:01:21,700
they have a passing score, because they will have a September 2025 inspection, assuming

788
01:01:21,700 --> 01:01:25,500
And those two standards are mad. I would say that would make sense to you.

789
01:01:25,500 --> 01:01:31,820
We're looking to you during that year, they're just barred to bring this board back

790
01:01:31,820 --> 01:01:36,040
or recommendation. We'll put on consent agenda that they're they're good.

791
01:01:36,720 --> 01:01:44,180
Yeah. Okay. That's that way. They'll only miss a year of through activity.

792
01:01:44,760 --> 01:01:47,000
Chairman, do you want to read this? We think you got it.

793
01:01:48,440 --> 01:01:52,960
I think I got to do, is, do we legally have it?

794
01:01:54,360 --> 01:01:56,500
Well, I just want more clarification.

795
01:01:57,280 --> 01:01:59,340
If we're saying that

796
01:02:01,390 --> 01:02:04,510
after a year, and this is, this is what I'm struggling with,

797
01:02:04,950 --> 01:02:08,990
what is the standard that the board wants to see them to have satisfied?

798
01:02:09,550 --> 01:02:10,230
They meet the condition.

799
01:02:10,590 --> 01:02:13,110
They meet the subject, all the requirements and intent,

800
01:02:13,410 --> 01:02:17,770
that they have met the objective of compliance with the board

801
01:02:17,770 --> 01:02:24,910
and their properties in which it means a passing score just on this property is up to

802
01:02:24,910 --> 01:02:25,310
one.

803
01:02:25,490 --> 01:02:26,830
Oh no, no, no, no, no, no.

804
01:02:27,410 --> 01:02:27,550
Okay.

805
01:02:28,190 --> 01:02:35,230
So no outstanding issues in one year would be subject to reinstatement by the board.

806
01:02:36,030 --> 01:02:36,850
I'm going to read this again.

807
01:02:37,030 --> 01:02:37,970
So we have a very clear.

808
01:02:38,670 --> 01:02:42,210
I'm going to have the board approve the final agreed to order assessing administrative

809
01:02:42,210 --> 01:02:46,350
bill for noncompliance to get rosemont metal lane parts and issue a final over debarment

810
01:02:46,350 --> 01:02:53,370
for a term of two years. With reinstatement, after one year subject to upon satisfactory

811
01:02:53,370 --> 01:02:54,930
compliance of all properties.

812
01:02:57,380 --> 01:03:00,520
For against responsible parties of Evan J. Hundin, David B.

813
01:03:00,660 --> 01:03:05,380
Rattlip and Michael Fouls, Elvis Cripp, Authorized and Condition in the Board of

814
01:03:05,380 --> 01:03:08,160
Equity and Quest Resolution and Associated Doctors and Orders on the side.

815
01:03:09,840 --> 01:03:10,020
Second.

816
01:03:12,320 --> 01:03:17,320
We also have an agreed administrative order for the $15,000

817
01:03:18,460 --> 01:03:19,820
administrative penalty that needs to.

818
01:03:19,980 --> 01:03:23,360
I think that was something administrative penalty for non-competence.

819
01:03:24,460 --> 01:03:26,820
It was the end. It was the change.

820
01:03:28,260 --> 01:03:29,240
Okay, so

821
01:03:32,220 --> 01:03:36,320
the motion made by Mr. Harper as detailed,

822
01:03:38,600 --> 01:03:43,020
seconded by Mr. Martians, all those in favor say aye.

823
01:03:43,020 --> 01:03:46,740
in the opposed hearing none motion carries.

824
01:03:59,920 --> 01:04:01,020
Okay, good discussion.

825
01:04:02,320 --> 01:04:04,160
We're still on in order on 18.

826
01:04:05,880 --> 01:04:06,120
Anyone?

827
01:04:09,340 --> 01:04:11,060
Okay, moving to item eight.

828
01:04:11,860 --> 01:04:12,960
18 of the agenda.

829
01:04:13,380 --> 01:04:15,600
Presentation discussion and possible action on

830
01:04:15,600 --> 01:04:19,180
an order proposing the repeal of 10 tack chapter 22.

831
01:04:19,320 --> 01:04:20,820
Single family home program.

832
01:04:21,480 --> 01:04:24,180
And orders proposing new 10 tack chapter 23.

833
01:04:24,380 --> 01:04:27,240
Single family home program rules and directing their publication

834
01:04:27,240 --> 01:04:29,460
for public comment in the Texas Register.

835
01:04:30,980 --> 01:04:32,400
Good morning board members.

836
01:04:32,580 --> 01:04:35,620
I'm Abigail Versa, Director of Single Family and Homeless Programs.

837
01:04:36,720 --> 01:04:39,820
The item I'm presenting today is a repeal and replacement

838
01:04:39,820 --> 01:04:42,440
of the single family home program rules.

839
01:04:42,980 --> 01:04:44,800
These rules govern the administration

840
01:04:45,400 --> 01:04:48,960
of homeowner reconstruction, contract for deed,

841
01:04:49,360 --> 01:04:50,840
tenant-based rental assistance,

842
01:04:51,340 --> 01:04:53,320
home buyer assistance with new construction,

843
01:04:53,780 --> 01:04:54,960
and single-family development.

844
01:04:55,880 --> 01:05:18,640
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.

845
01:05:18,640 --> 01:05:25,700
Prior to the rule draft presented to you today, SFHP, single-family and homeless programs staff,

846
01:05:26,060 --> 01:05:28,800
conducted a series of roundtables with program stakeholders.

847
01:05:29,520 --> 01:05:36,920
That included local governments, nonprofits, builders and consultants based on the feedback

848
01:05:36,920 --> 01:05:39,440
from the initial roundtable that we held.

849
01:05:39,680 --> 01:05:46,620
We drafted a rule and presented two more roundtables, one in person for those that were able to come

850
01:05:46,620 --> 01:05:50,560
Austin and one virtually so that we can ensure good attendance statewide.

851
01:05:52,020 --> 01:05:58,480
The bulk of the discussion was centered around the existing construction cost limits and the

852
01:05:58,480 --> 01:06:03,000
feedback we received from all the stakeholders was that we needed to raise these limits,

853
01:06:03,540 --> 01:06:08,300
but we also needed to ensure that we were still maximizing the impact of the program.

854
01:06:08,640 --> 01:06:14,000
So raising them all the way to the HUD limits for all activities was not advised by stakeholders

855
01:06:14,000 --> 01:06:14,800
or staff.

856
01:06:14,800 --> 01:06:20,400
We worked with the stakeholders to come up with reasonable increases and to make sure that

857
01:06:20,400 --> 01:06:25,580
projects that need additional funding for accessibility features and a robotic septic

858
01:06:25,580 --> 01:06:31,320
systems would still be able to utilize the program in addition to extra funding specific

859
01:06:31,320 --> 01:06:38,380
to environmental mitigation because HUD and FEMA have recently changed some floodplain risk

860
01:06:38,380 --> 01:06:47,620
mitigation requirements that make other caps not really workable. Other major updates to the

861
01:06:47,620 --> 01:06:53,480
rule include a reorganization of some sections such as moving off threshold, application requirements,

862
01:06:54,140 --> 01:07:00,240
cost limits and building design requirements to sub-chapter B instead of them being scattered across multiple

863
01:07:00,240 --> 01:07:07,060
of chapters. We also recommended that since costs were increasing and increased to threshold

864
01:07:07,060 --> 01:07:13,000
financial capacity of an applicant was necessary to ensure that they have access to capital

865
01:07:13,000 --> 01:07:20,420
for reimbursement or prior to reimbursement from the program. We also expanded access to the

866
01:07:20,420 --> 01:07:25,740
single-family development program to all eligible developers and let the no-fid define who

867
01:07:25,740 --> 01:07:29,980
be eligible, rather than restricting the use of these funds to choke.

868
01:07:32,060 --> 01:07:43,440
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.

869
01:07:44,120 --> 01:07:49,060
Updates for ten-based rental assistance include expanding the use of HUD's small area

870
01:07:49,060 --> 01:07:54,040
fair market rent to all areas for which those rents are published rather than restricting

871
01:07:54,040 --> 01:07:59,880
this to metropolitan areas only and specifically stating that late fees are not an eligible

872
01:07:59,880 --> 01:08:05,220
program cost as this has been a source of confusion for some of our TBRA administrators.

873
01:08:05,840 --> 01:08:08,760
With that, I'm prepared for questions about the rule as proposed.

874
01:08:16,060 --> 01:08:38,480
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.

875
01:08:38,480 --> 01:08:45,700
This is usually shown through audited statements with an unrestricted net balance of whatever that amount may be.

876
01:08:45,940 --> 01:08:51,320
Sometimes they submit a verification of a line of credit in that amount.

877
01:08:51,600 --> 01:08:54,540
That's more typical for non-profits than units of local government.

878
01:08:55,380 --> 01:09:00,560
So it's just to ensure they have some cash in the bank to pay for expenses before reimbursement.

879
01:09:03,400 --> 01:09:20,640
And then a little bit more clarification on the TBRA programs in the language regarding the small area fair market rents.

880
01:09:20,880 --> 01:09:24,160
Sure, I think that's a pretty exciting change in the rule.

881
01:09:24,440 --> 01:09:26,780
It seems small, but it's a pretty big impact.

882
01:09:26,780 --> 01:09:34,220
So, HUD several years ago started publishing, instead of a fair market rent, which is

883
01:09:34,220 --> 01:09:39,980
a part of the calculation to determine how much subsidy we pay per month for a family,

884
01:09:40,320 --> 01:09:43,880
receiving 10-of-base rental assistance, it used to be county by county.

885
01:09:44,280 --> 01:09:49,480
So anywhere in, let's say, Williams and County, regardless of what area Williams and

886
01:09:49,480 --> 01:09:54,180
County were in, we used one amount of money to determine how much subsidy you'd get.

887
01:09:55,680 --> 01:10:02,420
Right now, we use HUD's small area of fair market rent only in metropolitan areas.

888
01:10:03,020 --> 01:10:08,520
And what the small area of fair market rent does is it breaks down that money not at a

889
01:10:08,520 --> 01:10:11,680
county-wide level, but zip code by zip code, by zip code, by zip code.

890
01:10:12,440 --> 01:10:19,980
And it's grown from certain areas, in certain metro areas, like initially it was just

891
01:10:19,980 --> 01:10:25,360
Antonio and Dallas, but now it appears that HUD is publishing the small area of fair market

892
01:10:25,360 --> 01:10:34,060
rent statewide. So what this does is it allows families to move to a higher quality unit,

893
01:10:34,260 --> 01:10:40,440
maybe with higher quality schools, in their same county without experiencing an increase of

894
01:10:40,440 --> 01:10:48,060
their out of pocket rent. So the rent matches the neighborhood more than the regular fair market

895
01:10:48,060 --> 01:10:50,880
So it's just breaking it down for zip code.

896
01:10:51,020 --> 01:10:53,520
Right, it's a more micro level breakdown.

897
01:10:54,020 --> 01:10:56,080
Computers and everything nowadays, it's a lot easier.

898
01:10:56,580 --> 01:10:57,040
Right, yeah.

899
01:10:57,600 --> 01:10:59,760
And, you know, it used to be just such a few small areas.

900
01:10:59,920 --> 01:11:01,680
But now they've published for every zip code in Texas.

901
01:11:01,880 --> 01:11:03,460
So we want to take advantage of that.

902
01:11:03,660 --> 01:11:04,100
Great.

903
01:11:04,860 --> 01:11:08,820
Do we have the board members of questions from the first up on this item?

904
01:11:11,970 --> 01:11:13,890
Any public comment on this item?

905
01:11:14,970 --> 01:11:15,130
Okay.

906
01:11:15,230 --> 01:11:18,870
Hearing none, I will entertain a motion for item 18 of the agenda.

907
01:11:20,980 --> 01:11:28,760
I moved the board to prove the proposed repeal of 10-tapped chapter 23 and the proposed new 10-tapped chapter 23

908
01:11:28,760 --> 01:11:37,480
got 10-tapped chapter 23, concerning the single-family home program, or publication of Texas Register for public comment.

909
01:11:37,940 --> 01:11:44,320
I'll ask this slide, conditioned and authorized in the Board Action Request Resolution and Associated Documents on this item.

910
01:11:44,320 --> 01:11:48,240
Okay. Thank you. Motion-based. Conoroy, seconded by Mr. Harper,

911
01:11:48,460 --> 01:11:51,080
all those in favor say aye. Aye. Any opposed?

912
01:11:51,300 --> 01:11:53,620
Hearing none? Motion carries. Thank you. Thank you, Abigail.

913
01:11:55,930 --> 01:12:00,150
We still staying in order. Okay. All right. Number 19 of the agenda.

914
01:12:00,510 --> 01:12:02,890
Presentation discussion in the possible action on an order

915
01:12:02,890 --> 01:12:06,630
adopt adopting amendments to ten-tack chapter 10.

916
01:12:08,030 --> 01:12:11,330
Uniform multifamily rules. Subchapter. Aye.

917
01:12:12,310 --> 01:12:21,250
It's an eye, okay, public facility corporation compliance monitoring section 10.1103 reporting

918
01:12:21,250 --> 01:12:26,570
requirements and directing it to be published for adoption in the Texas Register.

919
01:12:27,690 --> 01:12:28,570
Ms. Hammond.

920
01:12:29,190 --> 01:12:34,390
Hello, Chair men, board members, Mr. Wilkinson, I'm Amy Hammond, Manager of Compliance

921
01:12:34,390 --> 01:12:35,170
Monitoring.

922
01:12:35,670 --> 01:12:40,410
The next item on your agenda is the possible action on adopting amendments to the public

923
01:12:40,410 --> 01:12:49,770
facility corporation compliance monitoring rule. I'll be using PFC when referencing public facility corporations for the remainder of this presentation.

924
01:12:50,870 --> 01:13:01,090
Only 10 tax section 10.1103 reporting requirements went out for public comment. The public comment period was from August 9 through September 9.

925
01:13:01,090 --> 01:13:08,050
24 entities provided public comment and are available with the Department of Response in the Board Materials.

926
01:13:08,890 --> 01:13:19,990
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.

927
01:13:20,490 --> 01:13:24,490
I will be referring to this as the act for the remainder of this presentation.

928
01:13:25,190 --> 01:13:37,850
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.

929
01:13:38,530 --> 01:13:45,670
The Act included language that required all PFC's PFC developments to submit an audit report to the department.

930
01:13:45,670 --> 01:14:12,570
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.

931
01:14:12,570 --> 01:14:18,090
The first audit report was due to be submitted June 1, 2024.

932
01:14:18,870 --> 01:14:25,670
10.1103 reporting requirements as written did not clearly outline this requirement

933
01:14:25,670 --> 01:14:31,750
was applicable to all PSC developments that are not specifically excluded by the act.

934
01:14:32,070 --> 01:14:35,190
This rule changed codifies that language in the act.

935
01:14:35,590 --> 01:14:40,850
The department was requesting that all PSC multi-family residential developments that did not

936
01:14:40,850 --> 01:14:48,950
submit by June 1st, 2024, be allowed to submit a required audit report no later than December 1st, 2024.

937
01:14:49,670 --> 01:14:59,970
Based on overwhelming public comment, this first reporting deadline for PSE developments not previously included in the rule will be extended from December 1st.

938
01:15:00,000 --> 01:15:27,680
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.

939
01:15:27,680 --> 01:15:37,040
Per the act, all reports will be due to the Department by June 1st each year with no exceptions beginning June 1st, 2025.

940
01:15:37,900 --> 01:15:43,640
Today, the Department has reviewed and published 14 audit reports on its website.

941
01:15:44,440 --> 01:15:49,280
We have also received five engagement letters with reports to be followed.

942
01:15:49,280 --> 01:15:54,820
Additionally, the Department has created a new audit workbook for the PFC Development

943
01:15:54,820 --> 01:15:57,640
initiated prior to June 2023.

944
01:15:58,660 --> 01:16:03,540
Please note that the PFC multifamily developments that are required to report to the

945
01:16:03,540 --> 01:16:09,960
Department do not have any TTHCA funding and the Department does not collect any fees for

946
01:16:09,960 --> 01:16:11,040
these audit reviews.

947
01:16:11,660 --> 01:16:16,260
Staff recommends the approval of the adoption of the amendments to the Public Facility Corporation

948
01:16:16,260 --> 01:16:20,040
compliance monitoring rule, and then happy to answer any questions.

949
01:16:21,420 --> 01:16:35,740
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.

950
01:16:35,960 --> 01:16:42,460
So after this one-time initial report is going to go back to that.

951
01:16:42,460 --> 01:16:46,200
hard deadline of June 1st. Okay,

952
01:16:50,920 --> 01:16:53,640
okay, well first board members have questions on

953
01:16:53,640 --> 01:17:02,360
this item. Just want to make it clear that we're on top of the PFC reporting

954
01:17:02,360 --> 01:17:09,180
issues and we're taking this very seriously as a department and I guess on the

955
01:17:09,180 --> 01:17:13,280
big picture it'll be interesting to see in the next legislative session how

956
01:17:13,280 --> 01:17:19,420
a additional clarification to get brought to the subject area from the legislature.

957
01:17:20,540 --> 01:17:20,580
Great.

958
01:17:22,300 --> 01:17:22,660
All right.

959
01:17:23,380 --> 01:17:28,000
Does anyone care to make a motion on item 19?

960
01:17:28,620 --> 01:17:30,720
Do we have some public comment first?

961
01:17:30,860 --> 01:17:31,100
I'm sorry.

962
01:17:31,360 --> 01:17:32,020
Thank you.

963
01:17:32,040 --> 01:17:32,360
Thank you.

964
01:17:32,860 --> 01:17:33,080
Thank you.

965
01:17:33,080 --> 01:17:33,100
Thank you.

966
01:17:33,680 --> 01:17:35,400
Thank you.

967
01:17:35,400 --> 01:17:35,580
Remember

968
01:17:38,270 --> 01:17:43,730
to come in and introduce yourself in what the organization you're with.

969
01:17:45,030 --> 01:17:47,390
You have three minutes, but you don't have to use them all.

970
01:17:47,750 --> 01:17:48,310
Thank you.

971
01:17:48,650 --> 01:17:48,930
Good morning.

972
01:17:49,230 --> 01:17:50,710
My name is Kirk Presley.

973
01:17:50,990 --> 01:17:52,170
I'm with O'Holopartners.

974
01:17:52,790 --> 01:17:58,190
O'Holopartners is a Dallas-based developer of workforce and affordable housing all across the state of Texas.

975
01:17:58,750 --> 01:18:07,750
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.

976
01:18:07,750 --> 01:18:22,150
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.

977
01:18:22,150 --> 01:18:30,590
The law, HB-271, had three sections, O-421, which was new requirements to approve a new

978
01:18:30,590 --> 01:18:37,510
PFC to minimum standards for any new PFC, and three audit requirements for new

979
01:18:37,510 --> 01:18:42,310
PFCs, which is O-426, the specific section at issue today.

980
01:18:43,050 --> 01:18:48,910
Section O-426 be specifically says that that section only applies to developments to which

981
01:18:48,910 --> 01:18:55,970
O421 applies. O421, a section of all about approving new developments, how could it apply

982
01:18:55,970 --> 01:19:01,150
to old developments that had already been approved? We believe it is a mistake to make

983
01:19:01,150 --> 01:19:06,310
these changes to chapter 10 and that it law as it stands currently correctly interprets

984
01:19:07,090 --> 01:19:13,210
HP271. We also believe it is most egregiously a mistake to implement them with a due date

985
01:19:13,210 --> 01:19:18,850
out in only a few weeks. I beg the board not to commit an unforced error on this issue and

986
01:19:18,850 --> 01:19:23,170
to leave the rules that we adopted only eight months ago in place. Thank you.

987
01:19:29,400 --> 01:19:34,660
We did disagree. Yeah, we did disagree. And we think we've done the right thing. And we

988
01:19:34,660 --> 01:19:39,260
want these reports before the legislative session, not after. So that's why December.

989
01:19:41,500 --> 01:19:48,920
We understand the implementation roll out in the detail of how the laws and legislation

990
01:19:48,920 --> 01:19:54,440
was presented to us unclear, we're trying to help add clarity while giving some flexibility in this.

991
01:19:55,660 --> 01:19:57,580
So thank you. Thank you for your comment.

992
01:20:00,900 --> 01:20:02,860
Are there any other public comments on this

993
01:20:03,800 --> 01:20:11,370
agenda item here in the I get a motion yet? No, I'm asking for a motion on item 19 of the agenda.

994
01:20:18,550 --> 01:20:24,410
I move the board of proof for adoption into rule the amendments to 10 text and administrative code

995
01:20:25,150 --> 01:20:32,230
Registrate, all is described, conditioned, and we go back to our administrative code, Chapter

996
01:20:32,230 --> 01:20:32,890
10.

997
01:20:33,230 --> 01:20:33,650
There you go.

998
01:20:33,990 --> 01:20:41,070
Section 10.1103, reporting requirements, and published the amended rule for adoption,

999
01:20:41,930 --> 01:20:47,350
in the Texas Registrate, all is described, conditioned, and authorized in the board action

1000
01:20:47,350 --> 01:20:52,170
request, resolution, and associated documents on this item.

1001
01:20:53,010 --> 01:20:55,610
The motion made by Ms. Pardillas is there a second.

1002
01:20:56,250 --> 01:20:57,510
It's likely to be by Mr. Thomas.

1003
01:20:57,870 --> 01:20:59,550
All those in favor say aye.

1004
01:20:59,730 --> 01:21:01,730
In your pose, hearing none, motion carries.

1005
01:21:02,950 --> 01:21:06,730
Moving on to item 20 of the agenda.

1006
01:21:09,010 --> 01:21:12,710
Presentation discussion and possible action regarding material amendments to

1007
01:21:13,390 --> 01:21:16,990
previous 9% competitive housing tax credit applications

1008
01:21:16,990 --> 01:21:19,850
to award state housing tax credits.

1009
01:21:20,650 --> 01:21:27,670
state housing tax credits and approval of the waiting list for the 2024 state housing tax

1010
01:21:27,670 --> 01:21:29,230
credit applications.

1011
01:21:30,590 --> 01:21:31,330
Mr. Goldberger.

1012
01:21:31,890 --> 01:21:36,230
Good morning Chairman, members of the Ford, Josh Goldberger, 9% program manager.

1013
01:21:37,030 --> 01:21:42,330
Item 20 concerns are inaugural awards of state housing tax credits to 9% applicants.

1014
01:21:43,230 --> 01:21:48,190
In 2023, the Department was authorized by the legislature to allocate a new funding source.

1015
01:21:48,190 --> 01:21:51,490
It credits against state insurance and franchise taxes.

1016
01:21:52,290 --> 01:21:57,510
The enacting legislation established an annual credit ceiling of 25 million a year.

1017
01:21:57,790 --> 01:21:59,890
It's important to note that unlike a federal credit,

1018
01:22:00,390 --> 01:22:03,950
this figure represents the total 10-year value of what was available.

1019
01:22:05,050 --> 01:22:10,050
The legislation also established a 5 million one-year priority set aside

1020
01:22:10,050 --> 01:22:17,390
Expressly took assist existing 9% deals that received an allocation of credits in 2021 or 2022.

1021
01:22:18,530 --> 01:22:25,750
For the cycle, the remaining 20 million has been distributed evenly between 20-24, 9% and 4% applicants.

1022
01:22:26,930 --> 01:22:28,930
They didn't before you today, so the-

1023
01:22:30,000 --> 01:22:37,620
Tax Credit Awards, 29% applicants, staff has recommended a total of nine awards, of which four are prior year applications

1024
01:22:37,620 --> 01:22:44,800
of pride for the priority allocation, and five are 20, 24, 9% applicants. The nine recommendations

1025
01:22:44,800 --> 01:22:53,720
reflect commitments of 14,675,000. These were not the only 9% applicants for state credits. The department

1026
01:22:53,720 --> 01:22:59,500
received requests for more sales and tax grants than were available for both 2024 and 9%

1027
01:22:59,500 --> 01:23:05,620
applicants and previously awarded deals. The authorizing legislation allows the department to

1028
01:23:05,620 --> 01:23:10,400
create a metric to prioritize applications in years in which the program is over subscribed.

1029
01:23:11,460 --> 01:23:17,440
In 2024, the department chose to prioritize applications proposing the most additional low-income

1030
01:23:17,440 --> 01:23:24,760
units for households at or below 30% of area median income relative to their request amount.

1031
01:23:25,500 --> 01:23:30,020
Applicants for the state credit met this priority by converting units previously proposed in their original

1032
01:23:30,020 --> 01:23:37,420
application for 60% or so to 30%. So they're not necessarily constructing new units but making

1033
01:23:37,420 --> 01:23:43,400
already proposed units more affordable to be competitive for the credit. The initial state tax credit

1034
01:23:43,400 --> 01:23:47,380
award was made to the applicant with the lowest request amount per additional

1035
01:23:47,380 --> 01:23:52,140
hands provided. Subsequent awards were made using the same metric until the

1036
01:23:52,140 --> 01:23:56,540
department could no longer fund a full credit request. Collectively, the nine

1037
01:23:56,540 --> 01:24:02,460
awardees committed an additional 262, 30% yets to be competitive for the award.

1038
01:24:03,240 --> 01:24:08,580
Since only full credit requests were to be funded, 325,000 remains available and will

1039
01:24:08,580 --> 01:24:12,220
be carried forward to next year's ceiling pending any changes to the award

1040
01:24:12,220 --> 01:24:18,380
lists. The awards before you will be processed as material amendments to add the state tax credit

1041
01:24:18,380 --> 01:24:24,220
as a source, increase the number of 30% units, and revise all necessary exhibits. In addition

1042
01:24:24,220 --> 01:24:28,620
to the list of awards, staff has also included a waiting list of eligible applications that have

1043
01:24:28,620 --> 01:24:34,520
not been terminated or withdrawn ranked into sending order of priority. This concludes my presentation.

1044
01:24:34,520 --> 01:24:39,080
I'm happy to answer any questions you might have okay, thanks Josh. The

1045
01:24:40,480 --> 01:24:42,340
These are a

1046
01:24:43,380 --> 01:24:45,500
It's a one year

1047
01:24:45,500 --> 01:24:52,900
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

1048
01:24:52,900 --> 01:24:55,980
So they'll be getting their request amount over 10 years

1049
01:24:56,640 --> 01:25:00,740
But yes, that's correct. That's the total value of what we are this are being

1050
01:25:03,540 --> 01:25:06,820
They will be getting their total value over 10

1051
01:25:06,920 --> 01:25:12,860
10-year increments that add up to the request amount that is reflected on the award mark.

1052
01:25:13,700 --> 01:25:19,460
So for simple math, if it was a million dollars of credits of state credits,

1053
01:25:20,080 --> 01:25:21,120
it would be a hundred thousand.

1054
01:25:21,220 --> 01:25:23,040
It would be a hundred thousand a year.

1055
01:25:26,360 --> 01:25:27,440
Yeah, I didn't write the bill.

1056
01:25:29,880 --> 01:25:33,180
And there will be changes sought by the industry.

1057
01:25:34,740 --> 01:25:35,360
This question.

1058
01:25:36,660 --> 01:25:39,400
Okay. Thank you for that clarification.

1059
01:25:41,880 --> 01:25:41,880
Okay,

1060
01:25:45,220 --> 01:25:51,320
these are stacked sort of on already the federal

1061
01:25:51,320 --> 01:25:59,680
tax rate. And what we're doing is by this we're trying to get as many of the 30% AMI units

1062
01:25:59,680 --> 01:26:11,580
as possible, so are converting higher AMI units down to the 30% to 262, that's great.

1063
01:26:12,240 --> 01:26:13,860
That's great.

1064
01:26:14,520 --> 01:26:23,200
And we are anticipating additional playerifications and tweaks to the state program in this legislative session.

1065
01:26:23,200 --> 01:26:25,240
Tom, I expect so, guys.

1066
01:26:27,820 --> 01:26:33,200
Do any board members have questions on this agenda item for Mr. Goldberg here?

1067
01:26:34,280 --> 01:26:38,880
Or do any members of the public have comments they wish to share with the board?

1068
01:26:40,860 --> 01:26:45,160
Hearing none, I'll entertain a motion on item 20 of the agenda.

1069
01:26:45,580 --> 01:26:46,360
Mr. Board.

1070
01:26:47,340 --> 01:26:51,660
I'm of the board approve the recommended list of applications for final certifications.

1071
01:26:51,660 --> 01:26:56,700
in the state housing tax credits in the 2024 state housing tax credit waiting list, all

1072
01:26:56,700 --> 01:27:00,200
as described, conditioned and authorizing the board action request, resolutions, and associate

1073
01:27:00,200 --> 01:27:02,080
documents on this item.

1074
01:27:03,000 --> 01:27:09,020
Motion made by Mr. Harper, seconded by Mr. Thomas, okay, all those in favor say aye.

1075
01:27:09,560 --> 01:27:11,680
In the opposed, hearing none, motion carries.

1076
01:27:12,140 --> 01:27:12,900
Thank you.

1077
01:27:14,200 --> 01:27:19,360
Okay, what am I on now, or I understand there, is this section where somewhere being pulled from

1078
01:27:19,360 --> 01:27:20,180
to raise the agenda.

1079
01:27:20,480 --> 01:27:20,900
Next page.

1080
01:27:22,380 --> 01:27:22,740
Let's go ahead.

1081
01:27:22,880 --> 01:27:23,360
Okay, 21.

1082
01:27:23,540 --> 01:27:24,020
We're still going ahead.

1083
01:27:24,160 --> 01:27:25,420
I'm 21 of the agenda.

1084
01:27:25,740 --> 01:27:30,560
Presentation discussion and possible action on a request for return and reallocation and tax

1085
01:27:30,560 --> 01:27:30,900
credits.

1086
01:27:31,340 --> 01:27:40,320
Under 10 tax section, 11.65 relating to credit returns resulting from force measure events for

1087
01:27:40,320 --> 01:27:41,940
3,300 caroline.

1088
01:27:42,640 --> 01:27:47,920
Mr. Campbell, he's silver tongue devil, convincing why we're supposed to do this again.

1089
01:27:48,140 --> 01:27:48,520
Good morning.

1090
01:27:48,520 --> 01:27:53,160
Well, I have good news for you. Several more have been kicked to next month since this morning,

1091
01:27:53,420 --> 01:27:55,900
but not this one. So this is good. It's moving forward.

1092
01:27:56,820 --> 01:27:59,880
It feels very strange to be sitting down. My name is Cody Campbell on the Director of

1093
01:27:59,880 --> 01:28:04,680
Multifamily Programs for TTHCA and as Mr. Voskas just said, this item concerns a request to

1094
01:28:04,680 --> 01:28:12,040
extend the placement and service deadline for 3300 caroline, which proposes 149 units in central Houston.

1095
01:28:12,800 --> 01:28:18,200
This development was initially awarded tax credits in 2020 and received its first extension in 2022.

1096
01:28:18,520 --> 01:28:21,980
Their current deadline to place in service is the end of this year.

1097
01:28:22,680 --> 01:28:29,590
This request is somewhat unique as the development is 98% complete with a current completion date of December 5th.

1098
01:28:30,460 --> 01:28:35,640
The remaining items needed to place in service involved some part work for the development emergency generator,

1099
01:28:36,080 --> 01:28:40,900
some plumbing work on the water main and the issuance of the development certificate of occupancy.

1100
01:28:41,520 --> 01:28:49,520
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.

1101
01:28:50,280 --> 01:28:57,480
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.

1102
01:28:58,280 --> 01:29:05,220
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.

1103
01:29:06,200 --> 01:29:09,540
Staff recommends approval of this item and I'm happy to answer any questions that you have.

1104
01:29:09,540 --> 01:29:17,780
Okay, so this particular force measure request as specific dates. We're not painting other financing debt.

1105
01:29:19,120 --> 01:29:21,260
Sit your jurisdiction local jurisdiction.

1106
01:29:21,480 --> 01:29:23,280
This is almost done.

1107
01:29:23,500 --> 01:29:24,380
Yes, sir.

1108
01:29:24,400 --> 01:29:25,860
In case let's get the lecture.

1109
01:29:27,080 --> 01:29:27,440
Okay.

1110
01:29:27,780 --> 01:29:28,620
That's a force measure.

1111
01:29:28,720 --> 01:29:29,460
I can get behind.

1112
01:29:30,300 --> 01:29:32,880
Do any board members have questions on this?

1113
01:29:32,900 --> 01:29:33,780
I them.

1114
01:29:33,940 --> 01:29:36,920
Do any members of the public which do you make a comment on this item?

1115
01:29:36,920 --> 01:29:40,800
If not, I'll entertain the motion in item 21 of the agenda.

1116
01:29:41,460 --> 01:29:44,960
Mr. Chairman, I move the board grant to request a treatment under an application of the

1117
01:29:44,960 --> 01:29:50,900
Force Measure Rule to 3300 Caroline with a placed in service deadline of March 31st,

1118
01:29:51,360 --> 01:29:56,120
2025, all is described conditioned and authorized in the board action request resolution

1119
01:29:56,120 --> 01:29:58,120
and associated documents on this item.

1120
01:29:58,380 --> 01:29:59,100
Second, thank you.

1121
01:30:00,000 --> 01:30:03,180
Mr. Thomas, seconded by Ms. Various, all those in favor say aye.

1122
01:30:03,240 --> 01:30:03,540
Aye.

1123
01:30:04,000 --> 01:30:05,940
In the opposed, hearing none, motion carries.

1124
01:30:06,080 --> 01:30:06,480
Fantastic.

1125
01:30:06,920 --> 01:30:09,400
Okay, so before I announce, sure.

1126
01:30:09,560 --> 01:30:11,620
It's on the agenda whether we're pulling from the agenda.

1127
01:30:11,620 --> 01:30:12,800
I was going to say I'll save you some reading.

1128
01:30:13,100 --> 01:30:20,660
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.

1129
01:30:21,280 --> 01:30:22,560
Berkburn at Royal Gardens.

1130
01:30:23,060 --> 01:30:27,320
Okay, so we are pulling items 22 and 23 from this month's agenda.

1131
01:30:27,320 --> 01:30:34,020
I am 24, presentation discussion and possible action on that request for return and reallocation

1132
01:30:34,020 --> 01:30:40,960
tax credits under 10 tax section 11.65 related to credit returns resulting from force

1133
01:30:40,960 --> 01:30:46,160
measure of events for Burnett Royal Garden as a great desire.

1134
01:30:46,480 --> 01:30:46,980
Great.

1135
01:30:46,980 --> 01:30:47,700
Thank you Mr. Vasquez.

1136
01:30:48,320 --> 01:30:52,000
This development proposes the construction of 80 units in Burke Burnett.

1137
01:30:52,000 --> 01:30:56,660
It was first awarded credits and home funds from the Department in 2022.

1138
01:30:57,400 --> 01:31:01,800
The board granted an extension in 2023, and because of that, the development has a placed

1139
01:31:01,800 --> 01:31:04,860
in service deadline of December 31, 2025.

1140
01:31:05,840 --> 01:31:11,080
After award, the development had to get a phase-to-environment review, which presented significant

1141
01:31:11,080 --> 01:31:16,940
complications related to potential groundwater contamination, which required significant mitigation

1142
01:31:16,940 --> 01:31:17,400
efforts.

1143
01:31:17,960 --> 01:31:21,980
As part of that mitigation, the groundwater had to be monitored for a period of one year.

1144
01:31:21,980 --> 01:31:25,980
during which the environmental clearance for the development could not be issued.

1145
01:31:27,080 --> 01:31:34,240
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.

1146
01:31:34,860 --> 01:31:43,620
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.

1147
01:31:43,940 --> 01:31:47,080
So it is a pretty significant reward block to not have this environmental clearance.

1148
01:31:47,080 --> 01:31:52,840
The applicant has worked with TCEQ since that time to obtain the necessary documentation

1149
01:31:52,840 --> 01:31:55,840
clearing the groundwater so that they can get their environmental clearance.

1150
01:31:56,820 --> 01:32:00,460
This documentation was initially anticipated to be received in April of this year.

1151
01:32:00,800 --> 01:32:04,680
Then in October, I believe they had, when they submitted this request, stated that they were

1152
01:32:04,680 --> 01:32:09,760
going to have it by October 24th, but that's now been pushed out in additional 30 days by TCEQ.

1153
01:32:10,620 --> 01:32:15,280
Once the letters received, the applicant can finalize their environmental clearance and move forward

1154
01:32:15,280 --> 01:32:18,740
with closing on financing, the land and commencing construction.

1155
01:32:19,520 --> 01:32:22,080
Unfortunately, until that letter is in hand, they can't do that.

1156
01:32:22,180 --> 01:32:26,840
They have requested the extension based on the extensive delays that they've had getting

1157
01:32:26,840 --> 01:32:29,800
that no further action required letter from TCEQ.

1158
01:32:30,060 --> 01:32:34,000
Staff does recommend approval of this item, and I'm happy to answer any questions you may have.

1159
01:32:34,220 --> 01:32:37,760
Mr. Campbell, can you give me some clear color of why we went through a phase one,

1160
01:32:38,020 --> 01:32:41,980
and then needed a phase two, and the developer did not realize that they had issues?

1161
01:32:41,980 --> 01:32:46,940
Certainly, so the QAP requires that they submit a phase one with their application.

1162
01:32:47,640 --> 01:32:52,520
If a phase two is required, then they are required to certify that they will have that

1163
01:32:52,520 --> 01:32:56,880
phase two completed before they close on their financing and meet any mitigation recommended

1164
01:32:56,880 --> 01:33:01,660
by that phase two report before they submit their cost certification.

1165
01:33:02,060 --> 01:33:06,700
I'm not sure that they anticipated having these issues with the groundwater as part of the phase

1166
01:33:06,700 --> 01:33:07,540
one.

1167
01:33:09,180 --> 01:33:14,560
on what the issue is in the phase two it is there was potential contamination

1168
01:33:14,560 --> 01:33:20,220
with the groundwater mtb mt do you know what it was unfortunately I do not

1169
01:33:20,220 --> 01:33:22,680
off the top of my head I did ask the developer to be here today though in case

1170
01:33:22,680 --> 01:33:30,780
you have any questions for them they're here and back because so sure can you go

1171
01:33:30,780 --> 01:33:38,140
the timeline again for us on. I guess when we expected the first T.C.C.C.C.C.C.C.

1172
01:33:38,140 --> 01:33:42,040
would have been due to the report and then the 30 day delay certainly I'd be happy to

1173
01:33:42,040 --> 01:33:46,040
and they also provided a written timeline if you're more of a visual person so they got

1174
01:33:46,040 --> 01:33:52,580
their award in July. They were required to get their phase two which I believe was done in September

1175
01:33:53,100 --> 01:34:00,200
of 2023. I'm sorry September of 2022 they completed their phase two and that was when they

1176
01:34:00,200 --> 01:34:03,960
discovered that they were going to have to have the mitigation that required monitoring

1177
01:34:03,960 --> 01:34:09,360
the groundwater for a year. That was completed in September of 2023, at which point

1178
01:34:09,360 --> 01:34:15,660
that report was compiled and submitted to TCEQ. They had anticipated having that review

1179
01:34:15,660 --> 01:34:20,260
in hand. I believe that's on the next slide. Yes, in April of 2024. And unfortunately,

1180
01:34:20,580 --> 01:34:26,140
there have just been delays with getting that that close out letter from TCEQ ever since.

1181
01:34:27,300 --> 01:34:45,840
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.

1182
01:34:46,240 --> 01:34:50,840
Sure. We'd be six months ahead and not have to necessarily do this.

1183
01:34:50,940 --> 01:34:55,760
That is correct. So they've submitted everything necessary for their environmental clearance except for that final letter from TCEQ.

1184
01:34:55,760 --> 01:35:01,720
EQ, once that clearance is ready, we've already awarded the home funds, staff has been monitoring

1185
01:35:01,720 --> 01:35:04,880
this because we've got a loan that we're waiting to close on it and it really has been

1186
01:35:04,880 --> 01:35:07,900
hedging on this letter for months at this point.

1187
01:35:08,900 --> 01:35:15,080
So after this, and do we have any indication, the weather that's eventually going to be received?

1188
01:35:15,580 --> 01:35:15,900
Sure.

1189
01:35:15,900 --> 01:35:21,200
you is the most informally said they no problem we're just we'll get it out to you.

1190
01:35:21,420 --> 01:35:28,280
So the most recent date was October 2024 that was kicked 30 days and I have not gotten any

1191
01:35:28,280 --> 01:35:32,400
correspondence that indicates that there's an issue that they're not wanting to issue the

1192
01:35:32,400 --> 01:35:36,260
letter. I think it's just delays if the getting it out the door is my understanding of the situation.

1193
01:35:38,000 --> 01:35:44,780
Okay and then every other piece of the home loan is approved just pending

1194
01:35:44,780 --> 01:35:48,860
signing once we get this that is that is correct so we're limited in how much we can do

1195
01:35:48,860 --> 01:35:52,600
without that environmental clearance but the loan has been approved they've been giving us

1196
01:35:52,600 --> 01:35:58,180
updated documents I will say that this is a very experienced developer you know this is

1197
01:35:58,180 --> 01:36:03,340
not a brand new operation and so I am in clients to believe that they have done everything

1198
01:36:03,340 --> 01:36:05,780
that they could to get this out as quickly as they can.

1199
01:36:06,600 --> 01:36:11,940
Okay maybe we should let me I would love to have a representative from the developer

1200
01:36:11,940 --> 01:36:25,520
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.

1201
01:36:29,140 --> 01:36:30,360
All right.

1202
01:36:30,580 --> 01:36:34,340
Remember, sign in and introduce yourselves and

1203
01:36:36,900 --> 01:36:37,660
your mic's on.

1204
01:36:46,190 --> 01:36:51,470
Michael Beardbeck who consulting and Mr. Chair to directly answer your first question.

1205
01:36:51,470 --> 01:37:02,670
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

1206
01:37:03,530 --> 01:37:11,690
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

1207
01:37:12,590 --> 01:37:16,890
As it relates to T.C.Q, it's been over a year delay.

1208
01:37:17,770 --> 01:37:19,310
They have come back with comments.

1209
01:37:19,590 --> 01:37:25,410
We actually had to resummit the report I believe in August with additional comments.

1210
01:37:26,450 --> 01:37:29,090
They've kicked down the can 30 days for the response.

1211
01:37:30,000 --> 01:37:45,640
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?

1212
01:37:47,080 --> 01:37:50,460
Well, I'm sorry, I'm sorry, you're losing your thoughts.

1213
01:37:50,460 --> 01:37:53,420
So as I'm Shamsiden, I'm with HKC and the associates,

1214
01:37:53,780 --> 01:37:56,480
we are the environmental consultant for the property.

1215
01:37:57,400 --> 01:38:01,180
After they did the phase two, we did the initial investigation

1216
01:38:01,180 --> 01:38:04,560
and the prepared the big report for the TCQ.

1217
01:38:05,020 --> 01:38:08,820
There was some contamination in the soil, which is deep.

1218
01:38:09,400 --> 01:38:10,760
And it's not an issue.

1219
01:38:11,840 --> 01:38:16,560
that we propose to do a geotechnical barrier on the top.

1220
01:38:16,920 --> 01:38:19,060
It's not a big deal about it.

1221
01:38:19,320 --> 01:38:20,820
That's you with the ground water.

1222
01:38:20,960 --> 01:38:21,900
What is the contamination?

1223
01:38:22,480 --> 01:38:25,400
It's hydrocarbons related to the property.

1224
01:38:25,540 --> 01:38:32,280
It was part of a big refinery that ended its operation in the 1970s.

1225
01:38:33,520 --> 01:38:47,260
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.

1226
01:38:47,780 --> 01:38:53,480
The action level is 2.1 and so we did it the first time.

1227
01:38:53,480 --> 01:39:01,140
And then at the second time we are at 2.4, out of 400 compounds, we only have barrier exceeding

1228
01:39:01,140 --> 01:39:04,900
the limit at 2.4 compared to 2.1.

1229
01:39:05,540 --> 01:39:14,900
So what we are proposing, we told the city of Bergprinet, they have in the rule a prohibition

1230
01:39:14,900 --> 01:39:16,860
of use of ground water.

1231
01:39:16,860 --> 01:39:22,800
And we did a drinking water well survey that isn't any well affecting it.

1232
01:39:23,340 --> 01:39:31,000
So the TCQ, we proposed to them to put a geotechnical barrier for the soil and for the ground

1233
01:39:31,000 --> 01:39:38,980
water that it's to do a long term monitoring that every six months we will collect samples until

1234
01:39:38,980 --> 01:39:44,000
this barrier dropped to below the 2.1, they'll give us closure.

1235
01:39:44,000 --> 01:39:52,220
So we requested from them to give us a conditional closure so that they can start their construction

1236
01:39:52,220 --> 01:39:57,300
and move with the property and every six months for a period of two years

1237
01:39:57,300 --> 01:40:03,060
to collect the water sample to prove that it's stable, decreasing, it's not a problem.

1238
01:40:03,560 --> 01:40:10,260
Although from the beginning, it's not a problem because the city does not allow the use of a groundwater.

1239
01:40:10,260 --> 01:40:17,440
Okay, so that was like just to sort of clarify, we're not there's no wells on this property for the drinking water.

1240
01:40:17,600 --> 01:40:21,860
No, it's fair credit red tape is what we're really into.

1241
01:40:22,020 --> 01:40:27,580
We're literally not going to tie into the water, but we can't get it without checking the boxes for TCQ.

1242
01:40:28,300 --> 01:40:35,520
Now the TCQ, they want to make sure, now how sure they want to be sure? I don't know.

1243
01:40:35,520 --> 01:41:04,740
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

1244
01:41:04,740 --> 01:41:13,140
So everybody is working from his home and it's a little bit dissatisfied over there to get things on time

1245
01:41:13,740 --> 01:41:21,120
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

1246
01:41:21,120 --> 01:41:25,080
Response time lines at this point. Hopefully soon

1247
01:41:25,080 --> 01:41:30,180
But unfortunately it's taken much longer than we had already were hoping it would be resolved

1248
01:41:30,180 --> 01:41:32,480
when is the

1249
01:41:32,480 --> 01:41:34,840
on the state of the weather, if there is.

1250
01:41:34,840 --> 01:41:43,140
I have here a response, this is from their website, that the reports where we submitted

1251
01:41:43,140 --> 01:41:53,500
them on 822, 24 August 22nd, and their first response should be 1025, and we never received

1252
01:41:53,500 --> 01:41:57,200
that, and their second response is 1124.

1253
01:41:57,200 --> 01:42:03,080
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.

1254
01:42:03,420 --> 01:42:04,560
I don't know.

1255
01:42:05,040 --> 01:42:07,780
It's, you know, they request this stuff.

1256
01:42:08,020 --> 01:42:08,580
We do it.

1257
01:42:08,680 --> 01:42:09,760
We submit it to them.

1258
01:42:10,060 --> 01:42:11,660
And now we sit and wait.

1259
01:42:11,880 --> 01:42:13,520
Three, four months for them to respond.

1260
01:42:15,000 --> 01:42:15,460
Mr. Morse.

1261
01:42:16,520 --> 01:42:18,100
Uh, extension.

1262
01:42:18,760 --> 01:42:20,340
This, if it didn't happen.

1263
01:42:20,900 --> 01:42:22,860
Regardless of what doesn't happen.

1264
01:42:22,860 --> 01:42:50,320
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.

1265
01:42:50,320 --> 01:42:57,150
Once we do, we're hopeful we can move forward with this quickly with closing with the agency as the only

1266
01:42:57,600 --> 01:43:06,000
permanent lender in this transaction with locked-in rates. So the model should not really move much at this point.

1267
01:43:09,250 --> 01:43:14,430
So if we were to approve the extension, there's nothing else

1268
01:43:14,430 --> 01:43:22,270
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.

1269
01:43:22,270 --> 01:43:26,550
No, we will. I mean, we need to get the agency to stamp off on our submitted environmental package

1270
01:43:26,550 --> 01:43:31,550
for clearance to actually be able to get the notice to proceed. But once we have that and we

1271
01:43:31,550 --> 01:43:38,430
complete the closing process with them, FDL team, no, it's a fully big transaction at that point.

1272
01:43:41,480 --> 01:43:48,100
One more, just, I'm sorry, general question just understand, and there's a reason behind the question.

1273
01:43:49,920 --> 01:43:53,540
Do you do any environmental work in the Houston region?

1274
01:43:54,760 --> 01:43:55,580
I did few.

1275
01:43:55,860 --> 01:43:59,480
But do you have any current big projects that you've been working on as the environmental?

1276
01:43:59,660 --> 01:44:00,040
No.

1277
01:44:00,440 --> 01:44:01,840
Because we are based on Afghanistan.

1278
01:44:01,840 --> 01:44:08,240
we do with all our most of how it is, Texas, North, Texas, East.

1279
01:44:08,240 --> 01:44:13,940
Okay, as we'll make sure there wasn't any particular newsworthy project in the Houston area that

1280
01:44:14,380 --> 01:44:15,660
in the environmental consultant.

1281
01:44:17,080 --> 01:44:17,980
All right.

1282
01:44:18,180 --> 01:44:19,460
Mr. Harper, you have a question?

1283
01:44:19,460 --> 01:44:19,680
Sure.

1284
01:44:19,720 --> 01:44:22,300
Curiosity, you chose this asset, this property.

1285
01:44:23,080 --> 01:44:23,920
You went through the phase one.

1286
01:44:24,080 --> 01:44:27,840
You failed the phase one that triggered the phase two.

1287
01:44:27,840 --> 01:44:31,080
You moved forward with the asset and the application.

1288
01:44:31,880 --> 01:44:34,260
What did you know that you had very important problems?

1289
01:44:35,180 --> 01:44:39,860
What was it triggered that you decided to keep moving forward with this piece of product?

1290
01:44:40,740 --> 01:44:46,260
So for clarification, this is the second asset that this developer has in Berkburnet.

1291
01:44:48,100 --> 01:44:51,720
The brand new elementary school was literally built right across the street.

1292
01:45:00,000 --> 01:45:17,700
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.

1293
01:45:17,700 --> 01:45:31,580
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.

1294
01:45:32,020 --> 01:45:43,900
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.

1295
01:45:43,900 --> 01:45:48,440
it's just time has been not on our side.

1296
01:45:49,100 --> 01:45:52,860
Okay, I have a proposed solution.

1297
01:45:52,860 --> 01:45:54,380
We're just stretching or you want to comment.

1298
01:45:55,160 --> 01:45:56,020
Okay, okay.

1299
01:45:56,620 --> 01:45:57,680
Can you let me know?

1300
01:46:00,000 --> 01:46:01,520
This is

1301
01:46:03,920 --> 01:46:05,000
our approval and the extension.

1302
01:46:05,580 --> 01:46:08,360
There's no outside financial institution

1303
01:46:08,360 --> 01:46:10,720
waiting to get this approval

1304
01:46:10,720 --> 01:46:13,300
before they can close their documents.

1305
01:46:13,300 --> 01:46:18,900
is just us. So, and this needs to be approved, the extension needs to be approved before December

1306
01:46:18,900 --> 01:46:26,360
20th or so, which is after our next meeting, it is correct. So, is there any reason,

1307
01:46:26,960 --> 01:46:34,480
and we expect the letters from the TCQ in the next couple of weeks, and I didn't imagine

1308
01:46:34,480 --> 01:46:40,000
that this was my development. I would be ringing their doorbell every day to get that.

1309
01:46:40,000 --> 01:46:48,360
is there any reason why we can't just table this until next meeting and then if we have that

1310
01:46:48,360 --> 01:46:54,540
letter in hands approving it all, which it sounds like it will be that if we can just get them to do it,

1311
01:46:55,760 --> 01:47:01,300
we could just put it back on the agenda and this will be a consent approval only because it's the

1312
01:47:01,300 --> 01:47:06,220
extension. Sure. From staff's perspective I don't believe that there's any issue with

1313
01:47:06,220 --> 01:47:14,220
going a direction. Do you have the only concern I have is T.C.Q. just hasn't given me any inclination

1314
01:47:14,220 --> 01:47:19,560
that they aren't going to possibly attempt to kick this down to can or kick this down the road

1315
01:47:19,560 --> 01:47:26,480
in other 30 days, especially with the holidays. We've got two holidays between now and the next time.

1316
01:47:28,220 --> 01:47:35,040
I just don't want to come back up next month and not have any additional information outside of

1317
01:47:35,040 --> 01:47:42,860
been presented today. I do understand the concern for kicking the can down the road, but I guess

1318
01:47:42,860 --> 01:47:52,260
from maybe our standpoint is what would y'all do with TCQ had not responded next month and we're

1319
01:47:52,260 --> 01:48:00,860
still in the same position. Would it really change y'all's perspective on this? If that fact pattern

1320
01:48:00,860 --> 01:48:08,060
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.

1321
01:48:08,180 --> 01:48:08,540
Is that correct?

1322
01:48:09,460 --> 01:48:13,540
If we don't get our fourth measure by next month, this deals dead either way.

1323
01:48:13,860 --> 01:48:23,840
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.

1324
01:48:23,980 --> 01:48:26,640
If you got your fourth measure today, it gives you more time.

1325
01:48:26,640 --> 01:48:31,720
to the group of clock doesn't really matter for the TCQ letter quite as right and and I guess what I'm

1326
01:48:31,720 --> 01:48:37,740
saying is if the language holds true and the QAP we get this force measure we don't close

1327
01:48:37,740 --> 01:48:44,120
we're dead in the water next year either way because the new force measure language requires that you

1328
01:48:44,120 --> 01:48:50,120
close on construction before you're even eligible to consider for a force measure in the future

1329
01:48:50,120 --> 01:48:56,840
If I'm going to act correct, so effectively, you know, get the letter and I'm going to get the

1330
01:48:56,840 --> 01:49:01,660
deal of time. If we don't get the letter, the deal is going to naturally collapse. It's kind of

1331
01:49:01,660 --> 01:49:07,660
what I'm saying. So this just buys this time from not having to come back up, bring back the

1332
01:49:07,660 --> 01:49:12,960
environmental consultant if you have, it's just kind of, I don't know, it seems the logical thing

1333
01:49:12,960 --> 01:49:18,920
since it will naturally implode, implode if we don't get the letter. And then we just let's

1334
01:49:23,180 --> 01:49:28,240
Do you all know who the State representative is for that area?

1335
01:49:28,940 --> 01:49:29,830
I would have to look back.

1336
01:49:30,320 --> 01:49:37,720
I knew them when we applied a couple years ago, but I'd have to look to see who they are right now.

1337
01:49:43,260 --> 01:49:52,700
You have to hear other opinions from the Board, but to me it's this department, the Board has been continuously

1338
01:49:52,700 --> 01:50:01,380
And continually ask, not just, well, you guys, but project after project to have us be the ones

1339
01:50:01,380 --> 01:50:11,760
who give extensions in hopes of something happening with some other time down in the future.

1340
01:50:13,000 --> 01:50:22,680
In this particular case, you're all saying, I'm hearing that I understand it's kind of

1341
01:50:22,680 --> 01:50:26,860
hopeful, but again, I just can't speak for T.C.Q.

1342
01:50:27,080 --> 01:50:30,660
I just mean the squeakyist wheel possible at T.C.Q.

1343
01:50:30,860 --> 01:50:36,580
and start if this deal is going to die after our D-sum,

1344
01:50:36,620 --> 01:50:38,680
if we don't have the approved buyer December 18,

1345
01:50:39,960 --> 01:50:41,800
whatever the next meeting is,

1346
01:50:45,710 --> 01:50:49,030
think there are other advocates that in the area

1347
01:50:49,030 --> 01:50:54,670
who want this and they could be pounding on T.C.Q.

1348
01:50:54,670 --> 01:50:58,750
the same way you all are, or that I'm assuming that you all are.

1349
01:50:58,770 --> 01:51:02,670
This might encourage you to be even more persistent with them.

1350
01:51:07,790 --> 01:51:16,990
What circumstance would you get into if they came back with a remedial plan?

1351
01:51:18,850 --> 01:51:22,570
So it's what it was contingent on this remediation.

1352
01:51:22,570 --> 01:51:38,010
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

1353
01:51:38,010 --> 01:51:46,590
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

1354
01:51:46,590 --> 01:51:49,670
of the least amount of heartburn for issuing very quickly.

1355
01:51:50,490 --> 01:51:51,150
We just-

1356
01:51:51,150 --> 01:51:53,070
And that would be a sufficient letter.

1357
01:51:54,190 --> 01:51:58,850
We are confirming with TDACA's environmental staff that they will accept that as part

1358
01:51:58,850 --> 01:52:02,290
of the environmental review, especially given the fact that we aren't going to tie into the ground

1359
01:52:02,290 --> 01:52:02,730
water.

1360
01:52:03,710 --> 01:52:08,490
And we have not heard back yet because this is a very new information we received from TCQ.

1361
01:52:09,250 --> 01:52:13,930
But assuming we can get that letter in the very new future, we'll hopeful that that should

1362
01:52:13,930 --> 01:52:15,830
solve the problem with kind of this caveat.

1363
01:52:15,830 --> 01:52:21,470
it resolved with our staff that they would accept that. Correct. We've already

1364
01:52:21,470 --> 01:52:25,590
posed the question and staff in, Laura, can speak more to that. And sorry,

1365
01:52:25,810 --> 01:52:29,970
we're saying oh, yes. So, even if they, even if they, if they,

1366
01:52:32,120 --> 01:52:40,600
TCEU gave you a letter saying, just we need to keep monitoring for two years. Does that allow you to start construction?

1367
01:52:41,480 --> 01:52:41,500
Yes.

1368
01:52:41,840 --> 01:52:41,900
Yes.

1369
01:52:42,080 --> 01:52:44,960
Okay, so we wouldn't have to wait another two years.

1370
01:52:45,020 --> 01:52:45,620
That is correct.

1371
01:52:46,160 --> 01:52:47,000
That is correct.

1372
01:52:48,500 --> 01:52:49,480
Lord, you want to add some of that.

1373
01:52:49,520 --> 01:52:50,960
Yes, absolutely.

1374
01:52:51,780 --> 01:52:53,600
Laura, am I right with Becker Consulting?

1375
01:52:54,160 --> 01:52:59,660
I am the one that reached out to TTHCA to make sure that if we were to receive a conditional

1376
01:52:59,660 --> 01:53:05,600
approval, conditioned upon the two years of additional monitoring that we could start construction.

1377
01:53:06,060 --> 01:53:12,180
What I wanted to do is I reached out to environmental staff at TTHCA to kind of, okay, we're getting

1378
01:53:12,180 --> 01:53:18,100
this letter, what do you environmental staff need from TTHCA, this conditional letter, a certification

1379
01:53:18,100 --> 01:53:24,420
from the owner that they will continue that monitoring for two years. Do you wish to see those reports?

1380
01:53:24,420 --> 01:53:28,320
So I have not heard back from TTHCA staff yet,

1381
01:53:28,320 --> 01:53:32,220
but we're trying to work to ensure that as we're getting

1382
01:53:32,220 --> 01:53:35,640
information, we are piping it over TTHCA's environmental

1383
01:53:35,640 --> 01:53:36,340
staff.

1384
01:53:36,740 --> 01:53:40,520
I will say with the comment earlier, I have gone actually

1385
01:53:40,520 --> 01:53:45,300
to TCEQ and sat there in a lobby that's, as was mentioned

1386
01:53:45,300 --> 01:53:47,800
earlier, disarray and just not moved until I've gotten

1387
01:53:47,800 --> 01:53:48,680
what I've needed.

1388
01:53:49,080 --> 01:53:49,860
It has been difficult.

1389
01:53:50,080 --> 01:53:52,400
It took me three months to get what I needed.

1390
01:53:52,400 --> 01:53:55,520
So we are prepared to go back and sit there, I guess,

1391
01:53:55,540 --> 01:53:56,480
and I'll take my lunch.

1392
01:53:56,740 --> 01:53:59,460
And sit there and wait for someone to get us the letter

1393
01:53:59,460 --> 01:54:02,780
because we have waited for a long period of time

1394
01:54:02,780 --> 01:54:04,540
for this letter, and they keep telling us, yes,

1395
01:54:04,660 --> 01:54:05,660
we're going to get you the letter.

1396
01:54:06,080 --> 01:54:07,920
There's never been a, no, there's a problem.

1397
01:54:08,080 --> 01:54:09,100
No, we can't do this.

1398
01:54:09,160 --> 01:54:11,840
There's another thing that's come up.

1399
01:54:12,160 --> 01:54:14,440
What it's been is, yes, we're going to get you the letter.

1400
01:54:14,680 --> 01:54:15,940
Yes, we're going to get you the letter.

1401
01:54:17,780 --> 01:54:19,900
It's probably on somebody's desk,

1402
01:54:19,900 --> 01:54:26,340
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

1403
01:54:26,340 --> 01:54:30,920
to do that because I know that we are so close and I can see the light at the end of the

1404
01:54:30,920 --> 01:54:35,480
tunnel but I did want to confirm that yes I have reached out to TTHCA staff about the

1405
01:54:35,480 --> 01:54:37,560
conditional letter to start construction.

1406
01:54:39,580 --> 01:54:40,420
Okay thank you.

1407
01:54:44,750 --> 01:54:44,850
Okay

1408
01:54:48,980 --> 01:54:51,440
I'm happy to entertain the motion

1409
01:54:51,440 --> 01:54:56,380
My thought would be, table, until next month, I move, I move them, go ahead.

1410
01:54:56,500 --> 01:55:00,280
Or grant the requested treatment under the application of force matured to the burn,

1411
01:55:01,040 --> 01:55:09,360
Burke, I'm sorry, Burke, that, all right, Burke, that, that, that shouldn't be that hard.

1412
01:55:09,600 --> 01:55:10,240
There just shouldn't be that hard.

1413
01:55:10,240 --> 01:55:10,800
Work for that.

1414
01:55:11,160 --> 01:55:14,220
Will gardens, all described, conditioned, authorized in the board action request resolution,

1415
01:55:14,380 --> 01:55:15,620
so she documents it out of.

1416
01:55:15,700 --> 01:55:21,360
Second, motion made by Mr. Harper, seconded by Ms. Sparius, all those

1417
01:55:21,360 --> 01:55:24,260
in favor say aye. Aye. Any opposed?

1418
01:55:25,400 --> 01:55:26,240
Note my abstention.

1419
01:55:27,420 --> 01:55:28,280
Thank you so much.

1420
01:55:28,740 --> 01:55:30,480
Five, five, five, one, one.

1421
01:55:33,870 --> 01:55:35,050
Get them to take.

1422
01:55:36,570 --> 01:55:36,790
Okay.

1423
01:55:37,850 --> 01:55:41,170
I am having somebody whispering in my ear saying.

1424
01:55:42,310 --> 01:55:43,290
We need to.

1425
01:55:44,130 --> 01:55:46,370
Get out of order because.

1426
01:55:46,390 --> 01:55:47,550
I hear that.

1427
01:55:48,510 --> 01:55:51,490
The critically important this morale is back in here.

1428
01:55:51,490 --> 01:55:57,710
But she's got to leave pretty soon here. So we're going to go back to item 14 on the agenda, correct?

1429
01:55:58,750 --> 01:56:00,890
13 or 14.

1430
01:56:02,990 --> 01:56:05,270
13. Okay.

1431
01:56:05,810 --> 01:56:09,630
Item 13 of the agenda. Presentation discussion and possible action,

1432
01:56:09,850 --> 01:56:13,790
regarding the issuance of a determination notice for 4% housing tax credits,

1433
01:56:14,210 --> 01:56:17,290
for Creek Bend Departments and San Antonio. Ms. Morales.

1434
01:56:18,390 --> 01:56:21,830
Good afternoon, Theresa Morales, Director of Multi-Family Bonds.

1435
01:56:22,010 --> 01:56:25,430
Item 13 includes the issuance of a determination notice for

1436
01:56:25,430 --> 01:56:26,550
Creek Band Apartments.

1437
01:56:27,070 --> 01:56:32,270
This is a 4% tax credit application where the private activity bonds will be issued by a local

1438
01:56:32,270 --> 01:56:35,350
issuance, the San Antonio Housing Trust PFC.

1439
01:56:35,990 --> 01:56:41,130
Normally, consideration of the issuance of a determination notice would not come before the board.

1440
01:56:41,750 --> 01:56:47,190
As part of the adoption of the stream line approach to local issuance 4% tax credit transaction

1441
01:56:47,190 --> 01:57:03,930
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.

1442
01:57:04,370 --> 01:57:15,550
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.

1443
01:57:15,550 --> 01:57:22,050
Creek Bend departments proposes the new construction of 312 units in San Antonio, serving

1444
01:57:22,050 --> 01:57:29,190
general population households at 30% 60% and 70% of the area median income.

1445
01:57:29,930 --> 01:57:35,010
The application was submitted in July and while it has been under review, there have been

1446
01:57:35,010 --> 01:57:40,510
opposition letters received from state senator Donna Campbell, state representative Mark

1447
01:57:40,510 --> 01:57:48,170
Dorazio, Erikaani Commissioner Grant Moody, and Dr. John Chapman, Superintendent for Komal ISD.

1448
01:57:48,870 --> 01:57:53,490
Several letters of opposition have also been submitted from individual members of the community.

1449
01:57:54,050 --> 01:57:58,590
The applicant also submitted a letter in response to some of that opposition.

1450
01:57:59,270 --> 01:58:02,050
All of these letters are included in your board package.

1451
01:58:02,970 --> 01:58:10,310
Staff has completed the program, underwriting, and compliance reviews and deems the application to have met the QAP requirements.

1452
01:58:10,310 --> 01:58:19,130
And is therefore recommending that a determination notice in the amount of 4,972,498 in

1453
01:58:19,130 --> 01:58:21,430
4% housing tax credits be issued.

1454
01:58:23,610 --> 01:58:28,790
Okay, so this is a 4% deal where we are not the bond issuer.

1455
01:58:30,250 --> 01:58:35,910
And again, 4% deals is not a competitive award.

1456
01:58:36,570 --> 01:58:47,530
It's, you check all the boxes, dial the eyes, cross all the keys, the department, automatically pass to approve it.

1457
01:58:48,010 --> 01:58:55,670
Well, I'm sure there are some exceptions as to if we do something wasn't true or something like that.

1458
01:58:55,730 --> 01:58:58,610
Yeah, I mean, we can't say like you have to vote.

1459
01:58:58,650 --> 01:59:05,190
Staff recommendation necessarily, but yeah, it's, it's pretty much not quite ministerial,

1460
01:59:05,190 --> 01:59:16,410
but close and okay and the so as it's presented to us and this is still just a 4% determination

1461
01:59:16,410 --> 01:59:23,770
saying if you get all your other stuff done and you come back to us with your your cost certification

1462
01:59:25,250 --> 01:59:29,910
then we establish the actual bond amount or the tax credit amount.

1463
01:59:29,930 --> 01:59:34,490
Correct there is no legal requirement that a determination notice be issued.

1464
01:59:34,490 --> 01:59:59,970
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-

1465
02:00:04,700 --> 02:00:05,260
So,

1466
02:00:08,160 --> 02:00:10,600
if anyone is trying to

1467
02:00:13,060 --> 02:00:18,640
stop this project from proceeding forward, this isn't the right department that actually stops it.

1468
02:00:19,540 --> 02:00:28,520
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.

1469
02:00:28,520 --> 02:00:31,800
we say yes you're eligible because you checked the boxes.

1470
02:00:32,280 --> 02:00:37,760
In a way we are a party to the transaction by allocating the or issuing a preliminary

1471
02:00:37,760 --> 02:00:42,920
amount of credits to be eligible for. Typically in this type of situation what I've done is

1472
02:00:42,920 --> 02:00:48,980
referring to individuals to the issuer. They're required to hold a public hearing to meet federal law.

1473
02:00:49,320 --> 02:00:56,060
And so that is really the opportunity for individuals to make their comments known to the issuer

1474
02:00:56,060 --> 02:01:00,520
who is really the largest portion of the funding stack.

1475
02:01:00,880 --> 02:01:01,620
Right, okay.

1476
02:01:02,740 --> 02:01:05,700
Do any board members have questions from Ms. Morales on this?

1477
02:01:05,920 --> 02:01:07,880
And I'll get to public comment here in a second.

1478
02:01:08,240 --> 02:01:11,240
Does the board have the authority to say no?

1479
02:01:12,930 --> 02:01:14,410
Don't give them the comfort letter.

1480
02:01:15,710 --> 02:01:16,230
Yes.

1481
02:01:18,660 --> 02:01:19,660
Do we need to answer that?

1482
02:01:19,760 --> 02:01:21,180
That's what you're asking us.

1483
02:01:21,380 --> 02:01:24,400
No, no, that's what the other speakers are about to ask us.

1484
02:01:24,660 --> 02:01:25,400
I'm safe.

1485
02:01:25,400 --> 02:01:25,740
I'm safe.

1486
02:01:26,100 --> 02:01:26,440
I'm safe.

1487
02:01:26,440 --> 02:01:29,640
that your recommendation notice the issue that you give the

1488
02:01:29,640 --> 02:01:34,520
governor to correct but that's and that's because the application has

1489
02:01:34,520 --> 02:01:39,820
met everything in our rules that it says it has to be correct in the reason

1490
02:01:39,820 --> 02:01:47,160
for the appearance is to just inform us of what's going on correct

1491
02:01:48,980 --> 02:01:49,540
Okay,

1492
02:01:52,140 --> 02:02:01,980
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.

1493
02:02:02,220 --> 02:02:04,540
Now the curious are there's going to be multiple speakers here.

1494
02:02:14,080 --> 02:02:14,520
Good afternoon.

1495
02:02:14,940 --> 02:02:20,300
I'm Mason Brand, a retired Marine Corps officer, a husband and father of two children, and I live in the area.

1496
02:02:20,300 --> 02:02:26,220
We have 5,256 signatures on our Chainsaw dork petition and county against this project.

1497
02:02:26,580 --> 02:02:30,700
This is supported by the strong letters of opposition from Representative D'Aresio, Senator

1498
02:02:30,700 --> 02:02:35,540
Campbell, Bear County Commissioner Grant Moody, and even Kamala St. Superintendent, Dr.

1499
02:02:35,680 --> 02:02:36,360
John Chapman.

1500
02:02:37,340 --> 02:02:39,320
There's no school buses provided in this area.

1501
02:02:39,700 --> 02:02:42,680
There's no sidewalks on highly dangerous Borkfield Drive.

1502
02:02:43,260 --> 02:02:47,260
Should the future children in these apartments walk to schools in the heat and the rain,

1503
02:02:47,260 --> 02:02:52,580
the cold or the shoulders of highly dangerous workout drive during peak traffic hours with

1504
02:02:52,580 --> 02:02:58,060
this twist is turns in its blind spots. The two driveways plan for this project are subject

1505
02:02:58,060 --> 02:03:02,440
of highly dangerous vehicular blind spots being presented from the front. It's road on to

1506
02:03:02,440 --> 02:03:06,900
workout drive with blind spots brought on both sides of the steep hill in front of the project.

1507
02:03:07,360 --> 02:03:11,800
People are going to be put at an unacceptable increase risk for traffic accidents at this location

1508
02:03:11,800 --> 02:03:13,680
because of this traffic quagmire.

1509
02:03:14,220 --> 02:03:17,060
Additionally, our parents will not stand

1510
02:03:17,060 --> 02:03:19,600
for San Antonio City via buses coming in

1511
02:03:19,600 --> 02:03:21,620
and out of our local Kamala SD schools

1512
02:03:21,620 --> 02:03:23,260
when there can be no guarantee

1513
02:03:23,260 --> 02:03:25,540
that criminal elements will not end up

1514
02:03:25,540 --> 02:03:27,640
on these public bus routes and into our campuses.

1515
02:03:28,160 --> 02:03:30,240
This is supported in Dr. Chapman's letter.

1516
02:03:31,360 --> 02:03:32,800
The environmental side assessment

1517
02:03:32,800 --> 02:03:36,280
wreaks of poisoning in the future occupants of these apartments.

1518
02:03:36,800 --> 02:03:39,660
The 37 acre property runs all downhill

1519
02:03:39,660 --> 02:03:45,400
on a steep, great slope, northward, immediately into Cibilot Creek, a contributing zone to the Edwards

1520
02:03:45,400 --> 02:03:45,780
Occupy.

1521
02:03:46,400 --> 02:03:52,300
You mentioned the Houston Housing Authority being raided in October by the FBI and HUD in

1522
02:03:52,300 --> 02:03:57,040
Spectra General's Office because a similar project was planned on top of toxic ash that was deemed

1523
02:03:57,040 --> 02:03:57,540
acceptable.

1524
02:03:58,740 --> 02:04:02,780
Although the Creek-Bin environmental side assessment remarks some of these talks and levels are

1525
02:04:02,780 --> 02:04:07,640
acceptable, three are not marked acceptable, and none of these should be marked acceptable

1526
02:04:07,640 --> 02:04:13,160
as it's right next to Cible O' Creek, as an example, polychlorinated bifiniles are highly

1527
02:04:13,160 --> 02:04:18,400
cross-indogenic and can stunt reproductive system development in athletics, as adolescents

1528
02:04:18,400 --> 02:04:23,680
excuse me. There's also a red-on gas being emitted from the ground according to the report.

1529
02:04:24,480 --> 02:04:29,560
This property basically was used as a landfill, and now we know that TCEQ is conducting an

1530
02:04:29,560 --> 02:04:34,440
investigation into this property. Petcore in the San Antonio Housing Trust should have had the

1531
02:04:34,440 --> 02:04:38,260
environmental side assessment performed before they purchased the property.

1532
02:04:38,460 --> 02:04:40,380
I thank you for your time.

1533
02:04:40,700 --> 02:04:43,060
Mr. Grant, thank you for being here.

1534
02:04:43,400 --> 02:04:46,000
Thank you for your persistent communications.

1535
02:04:46,480 --> 02:04:49,680
I have been reaching the department in the board.

1536
02:04:50,240 --> 02:04:52,780
Again, as I was trying to explain before,

1537
02:04:53,360 --> 02:04:57,800
and that works with the same thing with the Houston project you referenced.

1538
02:04:58,820 --> 02:05:01,480
Unfortunately, the way the tax credit process works.

1539
02:05:02,840 --> 02:05:11,420
This particular type of text credit and the process were not the right group that can stop this.

1540
02:05:11,520 --> 02:05:16,220
All those other bond issuers and financiers and TCEQ and local.

1541
02:05:16,220 --> 02:05:18,160
Those were the groups that can do it.

1542
02:05:18,160 --> 02:05:24,580
If this was a 9% application, all those factors that you brought up could really have impact.

1543
02:05:25,080 --> 02:05:29,200
But unfortunately with the way this is right now, we're not that.

1544
02:05:29,200 --> 02:05:35,180
There's not a whole lot of leeway that we can do unless we start breaking some rules.

1545
02:05:35,880 --> 02:05:36,300
The summation.

1546
02:05:38,820 --> 02:05:43,940
Is the property zoned for the purpose or intended to use it?

1547
02:05:43,940 --> 02:05:51,140
My understanding is that it was re-zoned when they convinced the property owner to allow

1548
02:05:51,140 --> 02:05:53,720
the city to re-zone it from multifamily housing.

1549
02:05:54,160 --> 02:05:57,600
And then once that was completed they then purchased the property.

1550
02:05:57,600 --> 02:05:59,460
it's in the co-mall.

1551
02:06:00,380 --> 02:06:05,740
So, to be accurate, because I know not all of you may be familiar with that area, this is

1552
02:06:05,740 --> 02:06:09,020
in Northern Baracown and the city of San Antonio and San Antonio and San Antonio and exit

1553
02:06:09,020 --> 02:06:11,940
thousand feet to the left and a thousand feet to the right of the two-ede one.

1554
02:06:12,120 --> 02:06:15,860
Mostly, against people's will, part of the House bill 347 passing.

1555
02:06:16,480 --> 02:06:19,680
Either way, the circumstances exist as it is.

1556
02:06:19,900 --> 02:06:25,640
If the area is zoned for co-mall-independent school districts, and there's a long history behind

1557
02:06:25,640 --> 02:06:31,900
Why other school districts in that area did not provide schools in Northern Barre County understand what I'm

1558
02:06:32,920 --> 02:06:40,340
I'll get right to my question. I'm sorry. It's own department if they weren't seeking 4%

1559
02:06:41,860 --> 02:06:44,440
credits that we could that we basically

1560
02:06:45,120 --> 02:06:45,760
are

1561
02:06:47,300 --> 02:06:48,580
Given that

1562
02:06:48,580 --> 02:06:51,040
we're talking about the federal government.

1563
02:06:52,730 --> 02:06:55,070
They could build an apartment complex there,

1564
02:06:55,530 --> 02:06:57,830
just a market apartment complex.

1565
02:06:57,990 --> 02:06:59,490
Sure, and our community was still

1566
02:06:59,490 --> 02:07:01,130
be opposed to it based on that.

1567
02:07:03,750 --> 02:07:06,150
I'm trying to get that straight in my mind.

1568
02:07:08,290 --> 02:07:11,950
That us say no doesn't stop apartments from going there.

1569
02:07:12,410 --> 02:07:14,470
No, because the city of San Antonio's

1570
02:07:14,470 --> 02:07:17,670
reasoned the property for most of the family housing.

1571
02:07:17,670 --> 02:07:21,190
Yeah, and our community would be opposed to the project regardless.

1572
02:07:21,290 --> 02:07:22,450
I understand, thank you.

1573
02:07:25,030 --> 02:07:26,610
Okay, thank you.

1574
02:07:26,710 --> 02:07:27,950
Again, we're appreciate your comments.

1575
02:07:28,810 --> 02:07:29,890
Again, Teresa Staffs recommended.

1576
02:07:30,000 --> 02:07:34,000
The motion is just to issue the determination of this at this time.

1577
02:07:34,920 --> 02:07:35,600
That's correct.

1578
02:07:36,700 --> 02:07:39,380
Would anyone care to make a motion on?

1579
02:07:40,300 --> 02:07:40,740
Oh, do we?

1580
02:07:41,500 --> 02:07:48,240
Well, the motion is asking for a staff's determination to agreement to issue the determination.

1581
02:07:49,220 --> 02:07:51,680
Anything else you say could only work against you?

1582
02:07:52,840 --> 02:07:54,480
Would anyone care to make a motion?

1583
02:07:56,450 --> 02:07:56,970
This is convoy.

1584
02:07:59,390 --> 02:08:04,150
I moved the Board of Proof, the issuance of the determination notice for 4% housing

1585
02:08:04,150 --> 02:08:06,490
tax credits for creating bond departments.

1586
02:08:07,150 --> 02:08:11,310
All of this described condition and authorized in the Board Action Request Resolution and

1587
02:08:11,310 --> 02:08:13,050
Associated Documents on this side.

1588
02:08:13,690 --> 02:08:17,610
Motion by my Ms. Conner, we're seconded by Mr. Harper, all those in favor say aye.

1589
02:08:18,310 --> 02:08:18,890
Any opposed?

1590
02:08:19,290 --> 02:08:20,230
Here's your announcement.

1591
02:08:20,310 --> 02:08:24,150
I would like to be soon as abstain, you know, okay.

1592
02:08:24,150 --> 02:08:28,590
So, five, four, no, Mr. Chairman, my vote is now

1593
02:08:30,890 --> 02:08:34,830
four in favor, one, one, one, one,

1594
02:08:34,830 --> 02:08:38,070
one opposed, one abstention, motion carries.

1595
02:08:38,850 --> 02:08:39,610
Okay, thank y'all.

1596
02:08:39,970 --> 02:08:40,090
So, no.

1597
02:08:41,650 --> 02:08:48,850
Mr. Morales is up in another legislative hearing.

1598
02:08:49,250 --> 02:08:52,630
So, we're going to go out of order again.

1599
02:08:53,610 --> 02:09:01,150
That jumps us back to 25. Is that correct? Is anyone see otherwise? Okay.

1600
02:09:04,660 --> 02:09:10,040
Okay. Hang on. So we are pulling at this point.

1601
02:09:10,440 --> 02:09:13,580
So we're going to need to reset that. Can anyone else do to resources presentation?

1602
02:09:14,460 --> 02:09:23,410
We are pulling 25 through 30,

1603
02:09:28,530 --> 02:09:31,210
okay?

1604
02:09:33,870 --> 02:09:38,050
So I ins 25 through 30 are being pulled from today's agenda,

1605
02:09:48,820 --> 02:09:51,340
scanning ahead here to see where we are.

1606
02:09:52,080 --> 02:09:55,400
Okay, so we're back to 31 of the agenda for everyone.

1607
02:09:55,400 --> 02:10:00,880
The presentation discussion and possible action on a request for return and reallocation of tax credits.

1608
02:10:01,060 --> 02:10:10,840
Under 10 tax section, 11.65 related to credit returns resulting from force measure events for a bounty legacy they'll sold.

1609
02:10:11,240 --> 02:10:11,570
They're back.

1610
02:10:13,620 --> 02:10:14,220
Item 31.

1611
02:10:14,580 --> 02:10:21,910
Well, again, item 31 concerns a bounty legacy they'll sold in 84 unit elderly development in Brownsville.

1612
02:10:22,820 --> 02:10:26,720
Originally awarded in 2023 the project has been delayed by a funding gap.

1613
02:10:26,720 --> 02:10:30,180
caused by increased interest rates and unfavorable credit pricing.

1614
02:10:30,920 --> 02:10:34,880
In order to remain feasible, the applicant has extensively redesigned the project and

1615
02:10:34,880 --> 02:10:38,560
introduced an affiliate of the housing authority of the city of Brownsville into the

1616
02:10:38,560 --> 02:10:43,380
ownership structure. These items were presented to this board earlier today as a material

1617
02:10:43,380 --> 02:10:47,800
amendment. While these changes are expected to offset the financial shortfall,

1618
02:10:47,940 --> 02:10:51,080
they have extended the project's pre-development and construction timelines.

1619
02:10:51,700 --> 02:10:55,600
The applicant now expects to close in early December and start construction in February

1620
02:10:55,600 --> 02:10:57,780
with a 16 to 18 months schedule.

1621
02:10:58,640 --> 02:11:11,640
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.

1622
02:11:12,640 --> 02:11:17,540
Staff recommends approval and representatives of the development, our present should you have any specific questions.

1623
02:11:18,380 --> 02:11:24,620
Okay, our, and let me know if we need to have the applicant representatives talk.

1624
02:11:25,180 --> 02:11:25,180
The

1625
02:11:27,230 --> 02:11:32,390
one else is pending for approvals on this project.

1626
02:11:33,510 --> 02:11:34,430
Nothing from the department.

1627
02:11:34,850 --> 02:11:35,030
Okay.

1628
02:11:35,290 --> 02:11:41,450
Well, outside the department, I mean, so funding, yes, no funding that I'm aware of.

1629
02:11:41,790 --> 02:11:44,670
I don't believe they're permit ready quite yet, but I know they've submitted.

1630
02:11:46,630 --> 02:11:47,010
Okay.

1631
02:11:47,130 --> 02:11:49,890
But there's no big structural financing that.

1632
02:11:49,890 --> 02:11:50,510
Nothing that's been submitted.

1633
02:11:50,510 --> 02:11:53,470
when you think more from the local jurisdictions.

1634
02:11:54,310 --> 02:11:55,890
Yes, and that looking can correct me on that,

1635
02:11:55,990 --> 02:11:57,950
but nothing of that nature has been related to us.

1636
02:11:58,250 --> 02:11:58,470
Okay.

1637
02:11:58,930 --> 02:12:01,810
Well, let's have Mr. Floor just come up with just...

1638
02:12:01,810 --> 02:12:03,790
And Mr. Chairman, I'm just thank you for the opportunity.

1639
02:12:04,810 --> 02:12:07,590
I represent the partnership as now the special limited

1640
02:12:07,590 --> 02:12:09,550
partner given the adoption of the previous issue.

1641
02:12:09,550 --> 02:12:10,170
Who are you?

1642
02:12:10,430 --> 02:12:13,230
I'm Henry Floor, I'm the president of the House Development

1643
02:12:14,110 --> 02:12:15,830
and I respond to your questions.

1644
02:12:16,190 --> 02:12:17,430
We are prepared to close.

1645
02:12:17,570 --> 02:12:20,070
We've actually established a closing date, not in early December,

1646
02:12:20,070 --> 02:12:27,130
for December 20th, representatives of the new owner, our president, the CEO for the Brownsville

1647
02:12:27,130 --> 02:12:31,110
Housing Authority as well as the CFL for the Housing Authority may get alert.

1648
02:12:32,830 --> 02:12:34,570
We submitted actually for permits.

1649
02:12:34,770 --> 02:12:38,170
We're hoping to get permits back in the next couple of days and then be able to close

1650
02:12:38,170 --> 02:12:39,090
in December 20th.

1651
02:12:39,230 --> 02:12:42,090
But we have a confirmed close and date.

1652
02:12:42,130 --> 02:12:45,490
Our investor and our lenders have been selected and are in place already.

1653
02:12:46,190 --> 02:12:46,290
Okay.

1654
02:12:46,490 --> 02:12:47,790
The investors in.

1655
02:12:47,790 --> 02:12:52,990
The Royal Bank of Canada is the investor and still are back out of Houston as the bank is the lender.

1656
02:12:53,610 --> 02:12:54,870
Okay, but they have everything approved.

1657
02:12:55,010 --> 02:12:57,410
Yes, they're just we've gone to committee and we're approved.

1658
02:12:58,810 --> 02:13:04,310
So, are you in process of already getting the docs paper up yet?

1659
02:13:04,550 --> 02:13:09,750
I mean, is it I assume so I don't know that definitively I would hate to answer incorrectly.

1660
02:13:11,030 --> 02:13:14,390
Good afternoon, my name is Alyssa Flottis, my house development.

1661
02:13:15,330 --> 02:13:19,810
I have been the lead project manager on this deal, but Senior is correct.

1662
02:13:20,050 --> 02:13:23,050
We do have, we are getting loan docs this week, hopefully tomorrow.

1663
02:13:23,710 --> 02:13:26,870
Our limited partnership agreement is supposed to come in next week.

1664
02:13:27,350 --> 02:13:28,250
A draft, I'm sorry.

1665
02:13:29,530 --> 02:13:32,910
Okay, there's nothing left for some committee to approve.

1666
02:13:33,230 --> 02:13:35,590
The city to approve the housing authority to approve.

1667
02:13:35,790 --> 02:13:36,370
No, that's correct.

1668
02:13:36,370 --> 02:13:40,010
anything like every room for the housing authorities taking the official action, the city has

1669
02:13:40,010 --> 02:13:45,330
reviewed matter and concurred with the support of us, and that both the lender and the investor

1670
02:13:45,330 --> 02:13:46,770
have gone to convey it approved.

1671
02:13:47,570 --> 02:13:53,830
And if all the stuff has come together on December 20th, you're just waiting for city permits

1672
02:13:53,830 --> 02:13:55,550
before you can start breaking grounds.

1673
02:13:55,830 --> 02:13:56,950
That's correct, yes, sir.

1674
02:13:57,230 --> 02:13:57,650
Mr. Moore.

1675
02:13:58,030 --> 02:13:58,350
I'm sorry.

1676
02:13:58,630 --> 02:13:58,730
I'm sorry.

1677
02:13:58,730 --> 02:13:58,930
I'm sorry.

1678
02:13:59,210 --> 02:13:59,310
I'm sorry.

1679
02:13:59,310 --> 02:13:59,490
I'm sorry.

1680
02:14:00,870 --> 02:14:01,330
I'm sorry.

1681
02:14:01,330 --> 02:14:06,370
schedule here. These credits for a ratio to you in 23 is a correct. Yes, so that's correct.

1682
02:14:06,490 --> 02:14:15,950
I don't see any activity on your schedule until the earliest date is 6124. What happened before

1683
02:14:15,950 --> 02:14:22,350
that? That's a good question. And really when we created that timeline, it was not necessarily

1684
02:14:22,350 --> 02:14:26,910
to look at the begin dates, but to look at the end dates, we did start development early in

1685
02:14:27,970 --> 02:14:30,990
We started the zoning process, actually the site was owned.

1686
02:14:31,650 --> 02:14:34,610
We started the plot process, the design process, all in 2023.

1687
02:14:35,570 --> 02:14:41,130
We got drawings done by the fall of 2023, preliminary pricing came back.

1688
02:14:41,530 --> 02:14:43,030
We had to go back and redesign.

1689
02:14:43,570 --> 02:14:45,590
So that was all in the fall of 2023.

1690
02:14:46,770 --> 02:14:48,450
2024, we did our redesign.

1691
02:14:49,070 --> 02:14:53,310
We started our plot entitlement process with the city based on the new site plan.

1692
02:14:53,310 --> 02:14:58,090
and have since been trying to get through our entitlements and our permit process and get our

1693
02:14:58,090 --> 02:14:58,990
I'm going to go in there.

1694
02:14:59,490 --> 02:14:59,970
And I would...

1695
02:15:03,460 --> 02:15:06,600
I would request

1696
02:15:12,680 --> 02:15:24,620
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.

1697
02:15:26,020 --> 02:15:27,780
We'll note that for the future.

1698
02:15:28,880 --> 02:15:31,640
We actually received three allocations in that particular year,

1699
02:15:31,760 --> 02:15:33,080
where we were able to close one.

1700
02:15:33,600 --> 02:15:36,760
These two would have resulted in perhaps a unit reduction,

1701
02:15:37,620 --> 02:15:39,680
and we did not want to reduce just tremendous demand

1702
02:15:39,680 --> 02:15:41,140
for elderly housing in Brownsville,

1703
02:15:41,520 --> 02:15:43,960
which is why we chose to partner with the local housing authorities.

1704
02:15:44,520 --> 02:15:45,800
There's two items, even for that.

1705
02:15:45,800 --> 02:15:46,560
Two forced measures.

1706
02:15:47,140 --> 02:15:49,440
The second deal, even though that hasn't been presented,

1707
02:15:49,660 --> 02:15:51,360
is also going to involve ownership change,

1708
02:15:51,360 --> 02:15:55,260
we're bringing in the Cameron County Housing Authority for that chance.

1709
02:15:55,840 --> 02:15:56,240
Thanks, Marshall.

1710
02:15:57,340 --> 02:16:03,660
Does the, does this granting a force, your influence, your closing?

1711
02:16:04,860 --> 02:16:11,460
No, sir, so that we could, once she's closed, then we could have a meeting and grant

1712
02:16:11,460 --> 02:16:12,260
force measure.

1713
02:16:12,600 --> 02:16:15,640
And, and you know, why we're here today is for our B.C.

1714
02:16:15,740 --> 02:16:20,920
On a B.R. investor does not like to close without confirmation that you've received

1715
02:16:20,920 --> 02:16:21,740
of force measure.

1716
02:16:22,720 --> 02:16:24,740
So it is contingent on us.

1717
02:16:24,780 --> 02:16:26,720
Yes, I'm a, I'm a sensor to question.

1718
02:16:27,040 --> 02:16:32,100
Yes, sir, the, it is a request from RBC because if we do the math, it's going to take us past their deadline.

1719
02:16:32,600 --> 02:16:35,460
And they want to form a margin of error for construction.

1720
02:16:35,660 --> 02:16:38,560
Construction and Texas is running long, almost every single transaction.

1721
02:16:38,720 --> 02:16:39,820
Not just ours, but everybody.

1722
02:16:40,140 --> 02:16:41,940
Okay, so.

1723
02:16:42,320 --> 02:16:43,740
Back to my reason of question.

1724
02:16:44,000 --> 02:16:47,360
Your closing is contingent on us giving you force.

1725
02:16:47,360 --> 02:16:48,120
Sure.

1726
02:16:48,520 --> 02:16:49,380
That's great.

1727
02:16:49,860 --> 02:16:50,640
Are he won't close?

1728
02:16:50,640 --> 02:16:51,600
Are they won't close?

1729
02:16:51,600 --> 02:16:51,800
All right.

1730
02:16:51,960 --> 02:16:52,640
That's great.

1731
02:16:59,540 --> 02:17:00,700
Well, you're the board members.

1732
02:17:00,920 --> 02:17:03,460
I have questions on this item.

1733
02:17:06,190 --> 02:17:06,670
Chairman, members.

1734
02:17:06,710 --> 02:17:07,450
Thank you.

1735
02:17:08,250 --> 02:17:08,690
Um, well.

1736
02:17:09,150 --> 02:17:09,470
Hang on.

1737
02:17:09,650 --> 02:17:11,590
I want to come in.

1738
02:17:11,890 --> 02:17:12,070
One little comment.

1739
02:17:12,070 --> 02:17:14,530
One little comment to make on the, let's get the vote.

1740
02:17:15,010 --> 02:17:17,990
Or see if we can get a motion.

1741
02:17:19,130 --> 02:17:19,890
Chairman, I'm ready.

1742
02:17:20,810 --> 02:17:21,390
This for us.

1743
02:17:21,950 --> 02:17:23,250
I moved the board grant.

1744
02:17:23,250 --> 02:17:29,170
the request to treatment under an application of the force mature rule to a vantigly go on

1745
02:17:29,170 --> 02:17:34,930
legacy that's sold. All is described, condition and authorized in the board action request,

1746
02:17:34,930 --> 02:17:41,130
resolution, and associated documents on this side. Is there a second?

1747
02:17:45,490 --> 02:17:46,770
Motion made by Ms.

1748
02:17:46,770 --> 02:17:52,870
For us to approve Mr. Thomas 2nds, all those in favor say aye, aye,

1749
02:17:55,530 --> 02:18:02,310
I'm going to, I'm going to, I'm going to, I'm going to abstain and I have a comment after.

1750
02:18:02,770 --> 02:18:04,270
Okay, and I'm staying also.

1751
02:18:04,990 --> 02:18:07,450
Ms. Conroy, how did you vote?

1752
02:18:10,110 --> 02:18:15,710
Okay, all right, so we, three eyes, that's not enough, right?

1753
02:18:19,830 --> 02:18:21,790
Four eyes, and two extensions.

1754
02:18:25,580 --> 02:18:30,920
or zero one. So motion carries, when, okay, Mr.

1755
02:18:31,160 --> 02:18:34,080
Mark, my only comment is that

1756
02:18:36,510 --> 02:18:39,990
the year is my, I've been happy to grant them an

1757
02:18:39,990 --> 02:18:45,130
anti-dair or something, so that they get closed and make it, make it, make it contingent

1758
02:18:45,130 --> 02:18:50,610
on a closing to get the year, but I am understanding his explanation.

1759
02:18:50,610 --> 02:19:07,160
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.

1760
02:19:11,020 --> 02:19:12,240
That's the right answer.

1761
02:19:13,480 --> 02:19:16,020
Next, we are going to make sure work as hard as possible.

1762
02:19:16,480 --> 02:19:18,260
Make sure there is not in next time.

1763
02:19:18,300 --> 02:19:19,840
Now, as a point of clarity.

1764
02:19:20,640 --> 02:19:22,120
Again, I apologize for speaking.

1765
02:19:22,340 --> 02:19:25,600
I was referring to a Vonti Legacy Leon, which is coming next month.

1766
02:19:25,800 --> 02:19:27,580
And we'll provide a much more expansive timeline.

1767
02:19:28,660 --> 02:19:30,880
And he does say that, but we are next on the agenda.

1768
02:19:31,540 --> 02:19:32,340
Oh, yes.

1769
02:19:32,340 --> 02:19:32,780
I guess hopefully.

1770
02:19:32,980 --> 02:19:33,300
Okay.

1771
02:19:33,760 --> 02:19:33,820
All right.

1772
02:19:33,820 --> 02:19:39,600
So we're, I guess y'all can stand there for now, right?

1773
02:19:39,960 --> 02:19:44,760
We're, okay, so I then 32 of the agenda presentation,

1774
02:19:45,140 --> 02:19:48,000
discussion and possible action on a request for return and

1775
02:19:48,000 --> 02:19:53,140
reallocation and tax credits under 10 tax section 11.65 related

1776
02:19:53,140 --> 02:19:56,400
to credit returns resulting from force measure events for

1777
02:19:57,160 --> 02:20:00,240
candlewood village, Mr. Goldberg or introduce.

1778
02:20:00,240 --> 02:20:01,320
That's not me.

1779
02:20:01,320 --> 02:20:03,460
Is that the skip to one item?

1780
02:20:03,800 --> 02:20:04,240
The skip?

1781
02:20:04,400 --> 02:20:05,200
The number 32.

1782
02:20:07,740 --> 02:20:08,920
Which is to the bottom?

1783
02:20:09,280 --> 02:20:09,560
Which is to the bottom?

1784
02:20:09,920 --> 02:20:10,000
No.

1785
02:20:10,620 --> 02:20:10,980
No.

1786
02:20:14,040 --> 02:20:15,320
I'm sorry.

1787
02:20:15,900 --> 02:20:17,940
I see my stake.

1788
02:20:18,280 --> 02:20:18,480
No.

1789
02:20:18,600 --> 02:20:20,420
I have multiple windows open.

1790
02:20:22,800 --> 02:20:23,000
Okay.

1791
02:20:23,720 --> 02:20:24,360
32.

1792
02:20:25,520 --> 02:20:26,160
Okay.

1793
02:20:26,500 --> 02:20:26,740
I apologize.

1794
02:20:28,120 --> 02:20:31,660
So everything I said before except it's for a bond.

1795
02:20:31,660 --> 02:20:33,480
Lange Legacy Leon.

1796
02:20:34,840 --> 02:20:35,480
Lion.

1797
02:20:35,560 --> 02:20:35,620
Lion.

1798
02:20:35,620 --> 02:20:35,900
Lion.

1799
02:20:36,240 --> 02:20:37,740
L-Y-O-N.

1800
02:20:37,960 --> 02:20:38,760
Mr. Goldberger.

1801
02:20:39,100 --> 02:20:45,320
Yes, Item 32 concerns Avanti Legacy Leon, which is an application almost identical circumstances

1802
02:20:45,320 --> 02:20:46,780
as our previous request.

1803
02:20:47,280 --> 02:20:52,860
This is also an 84 unit, elderly development in Brownsville, that is proposed by the same applicant.

1804
02:20:53,840 --> 02:20:57,580
Just as Avanti Legacy Del Sol, a funding gap required a material amendment.

1805
02:20:57,580 --> 02:21:02,040
this particular amendment request just came in a little bit later than the previous

1806
02:21:02,040 --> 02:21:05,900
force measure, so this still under-reviewed by staff and we are not quite able to

1807
02:21:05,900 --> 02:21:10,320
get it to the new member meeting. We'll say it does appear to be basically the

1808
02:21:10,320 --> 02:21:15,120
same proposed changes as the amendment to Dell Sol. Again, these developments are

1809
02:21:15,120 --> 02:21:19,940
essentially identical. So that will be taken before this board in December, but we

1810
02:21:19,940 --> 02:21:23,940
were able to take the force measure request to this meeting. The request is

1811
02:21:23,940 --> 02:21:26,280
the same as the previous item and again, Sapphire Commence

1812
02:21:28,590 --> 02:21:28,870
of.

1813
02:21:29,250 --> 02:21:35,390
So, are we separately doing the ownership change?

1814
02:21:35,790 --> 02:21:39,410
Or is that the whole material amendment will be taken to the December meeting?

1815
02:21:39,690 --> 02:21:43,130
And that will contain the ownership change and all of the design changes.

1816
02:21:43,530 --> 02:21:45,670
So, today is just the force measure for this particular.

1817
02:21:45,810 --> 02:21:47,550
Why aren't we doing this all in the same meeting?

1818
02:21:48,290 --> 02:21:49,490
I can answer that for you.

1819
02:21:49,570 --> 02:21:52,830
Again, Alyssa Flores, Maths, Development, I represent the developer on this deal.

1820
02:21:53,490 --> 02:21:56,730
We have a 10% test deadline at 121.

1821
02:21:56,730 --> 02:22:01,550
And unfortunately, we have to come up before that's full of one deadline, and that's why we're here today.

1822
02:22:01,730 --> 02:22:04,310
Otherwise, it would definitely have been all one agenda item.

1823
02:22:07,640 --> 02:22:15,980
And are we waiting for other outside groups to give the approvals or will we waiting for after?

1824
02:22:16,760 --> 02:22:25,680
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.

1825
02:22:25,680 --> 02:22:25,840
Okay.

1826
02:22:32,660 --> 02:22:38,840
That's one of the big changes. The thing that may delay this, probably, 30 to 60 days more than

1827
02:22:38,840 --> 02:22:45,840
those all, is an issue with the utility company. We are at a location where the Brownsville Public Utility Board,

1828
02:22:46,420 --> 02:22:53,260
an AEP, another utility operator, a provider, overlap. We're going to get our services from Brownsville Public Utility Board,

1829
02:22:53,620 --> 02:22:57,640
but they have to request permission because of the overlap from the Public Utility Commission.

1830
02:22:57,640 --> 02:23:02,120
And they had to say that that made the last up to 60 days, even though we're calling folks,

1831
02:23:02,260 --> 02:23:06,080
some parents to see if we could get that expedited, should be a priority for fun to review,

1832
02:23:06,580 --> 02:23:09,300
but then the last they'd made the last another 30 to 60 days.

1833
02:23:09,820 --> 02:23:12,400
So this one is the solicitor's calls in December.

1834
02:23:12,600 --> 02:23:16,760
This one is scheduled in January, but it may set the February depending on the response from the puck.

1835
02:23:22,160 --> 02:23:24,000
Board members of questions on this item.

1836
02:23:28,770 --> 02:23:31,550
Chairman Florida's I say Chairman, because this I recall.

1837
02:23:32,010 --> 02:23:35,070
We were the very first chairman at TDCHA.

1838
02:23:35,070 --> 02:23:40,170
many, many months ago. When I was running E.D. He was just E.D.

1839
02:23:40,930 --> 02:23:43,730
He had to know that's right. That's the first idea.

1840
02:23:44,990 --> 02:23:48,210
I used to run the housing authority in Crystal City.

1841
02:23:48,830 --> 02:23:56,910
Question, I have seen the quality of elderly housing that the bronze field people do.

1842
02:23:57,490 --> 02:24:03,070
They look like condominiums. I'm just top notch. Everything and they're gated.

1843
02:24:04,130 --> 02:24:07,950
Cameron, Cameron, are you going to be kind of similar?

1844
02:24:08,770 --> 02:24:09,050
It's good.

1845
02:24:09,470 --> 02:24:10,830
Yeah, that's good.

1846
02:24:10,830 --> 02:24:11,570
That's good.

1847
02:24:11,570 --> 02:24:12,410
That's good.

1848
02:24:12,470 --> 02:24:14,390
But the plans are very similar.

1849
02:24:15,090 --> 02:24:16,690
The amendment request is very similar.

1850
02:24:17,010 --> 02:24:17,490
It's not identical.

1851
02:24:17,930 --> 02:24:20,950
You know, my mantra is, say, decent and affordable.

1852
02:24:21,490 --> 02:24:23,610
Yes, or say, fintes and being overall.

1853
02:24:24,250 --> 02:24:26,310
Now, Brownsville Housing Authority is an extraordinary job.

1854
02:24:26,470 --> 02:24:28,390
This is the deal we're doing with them.

1855
02:24:28,430 --> 02:24:30,010
Actually, we are second deal with them.

1856
02:24:30,010 --> 02:24:31,410
We did one back in 2012.

1857
02:24:31,410 --> 02:24:35,170
Well, we're part of that portfolio that you referenced here.

1858
02:24:36,210 --> 02:24:39,930
But this is Cameron County Council in the city of Brownsville, though.

1859
02:24:40,410 --> 02:24:44,170
I'm just happy to see this doing a project actually in Cameron County.

1860
02:24:45,390 --> 02:24:46,930
I need it.

1861
02:24:46,970 --> 02:24:47,190
I do.

1862
02:24:49,630 --> 02:24:50,070
Okay.

1863
02:24:50,570 --> 02:24:53,590
Again, do any other board members have questions on this item?

1864
02:24:53,690 --> 02:24:56,530
We're asking for how long is the one year?

1865
02:24:56,990 --> 02:25:00,110
This one's a full year because you're still waiting in another 60 days.

1866
02:25:00,190 --> 02:25:00,870
That's correct, Mr.

1867
02:25:00,870 --> 02:25:01,710
I'm

1868
02:25:06,510 --> 02:25:07,370
going to make a motion.

1869
02:25:07,850 --> 02:25:12,090
Chairman, I'm moved to the Board grant or the request of treatment under an application of the force measure rule to

1870
02:25:12,090 --> 02:25:19,230
Montellian, like I said, Leon, all is described, conditioned and authorized in the board action or quest resolution, and associated documents on this item.

1871
02:25:20,570 --> 02:25:21,970
Motion, baby, Mr. Thomas.

1872
02:25:22,730 --> 02:25:25,470
Seconded by Ms. Conoroy, all those in favor say aye.

1873
02:25:26,350 --> 02:25:28,450
And the opposed or abstaining.

1874
02:25:29,970 --> 02:25:32,050
So five, oh and one.

1875
02:25:32,630 --> 02:25:33,510
Motion carries.

1876
02:25:34,710 --> 02:25:35,370
Thank you.

1877
02:25:35,370 --> 02:25:46,930
much. I just want to say for the board, I mean, the and the community here, the importance

1878
02:25:46,930 --> 02:25:55,830
of not having a amorphous ill undetermined dates in the future. This was bought in my mind,

1879
02:25:55,850 --> 02:26:03,870
borderline on because the date is still undetermined when we're going to get that. Those

1880
02:26:03,870 --> 02:26:07,050
final P.C. I think I heard the

1881
02:26:07,050 --> 02:26:09,810
approvals, but they'll be back.

1882
02:26:11,790 --> 02:26:12,950
I just can't. Mr. Chairman.

1883
02:26:13,730 --> 02:26:16,030
Yeah, Mr. Harper.

1884
02:26:16,330 --> 02:26:17,910
Mr. Goldberg and Mr. Campbell.

1885
02:26:18,430 --> 02:26:22,010
I really want schedules from the time you were issued to the current.

1886
02:26:22,450 --> 02:26:26,950
Because giant years of no activity does not impress.

1887
02:26:32,600 --> 02:26:34,900
I'm sure for the whole speaking for the whole board,

1888
02:26:35,020 --> 02:26:36,360
we'll agree with that.

1889
02:26:36,400 --> 02:26:36,700
Absolutely.

1890
02:26:37,220 --> 02:26:37,480
Okay.

1891
02:26:37,480 --> 02:26:45,180
Okay. 33. Correct? Correct. Okay. 33 on the agenda. Presentation discussion and possible

1892
02:26:45,180 --> 02:26:50,480
action on a request for return and reallocation and tax credits under 10 tax section 11.6.

1893
02:26:51,640 --> 02:26:58,940
5 related to credit returns resulting from force measure events for candlewood village. Mr. Goldberger.

1894
02:26:59,740 --> 02:27:05,680
All right. Our next two requests, considering candlewood village and country villa, two applications

1895
02:27:05,680 --> 02:27:11,740
awarded in 2023 that proposed the rehabilitation of USDA rural development properties.

1896
02:27:12,620 --> 02:27:16,120
The circumstances of these two requests are basically identical but we will not

1897
02:27:16,120 --> 02:27:21,160
let's take them one by one. Candlewood Village is a 24-unit elderly development

1898
02:27:21,160 --> 02:27:27,800
originally constructed in 1991, is located in Frankenstein, Anderson County. The project

1899
02:27:27,800 --> 02:27:33,540
has encountered significant delays due to difficulties closing the acquisition transfer

1900
02:27:33,540 --> 02:27:39,600
of the property with USDA. The applicant has related in their request that the transfer process

1901
02:27:39,600 --> 02:27:44,740
was started in February of 2023 before the application was submitted to the department,

1902
02:27:45,520 --> 02:27:49,900
and that the USDA was in receipt of their full application by October of that year.

1903
02:27:50,480 --> 02:27:54,700
The applicant has provided a letter from USDA substantiating this timeline into King

1904
02:27:54,700 --> 02:27:59,460
that they've been doing their due diligence here, but nonetheless stating that closing is not expected

1905
02:27:59,460 --> 02:28:01,500
until February of next year.

1906
02:28:02,160 --> 02:28:07,460
It seems that this process is simply taken longer than usual following a recent reorganization

1907
02:28:07,460 --> 02:28:08,260
at USDA.

1908
02:28:09,100 --> 02:28:14,240
Without finalizing the transfer, the application cannot meet its 10% test timely and cannot

1909
02:28:14,240 --> 02:28:17,320
start construction, which puts the placed in service deadline.

1910
02:28:17,800 --> 02:28:18,520
It's a separate amendment.

1911
02:28:18,740 --> 02:28:20,660
Staff recommends approval of this request.

1912
02:28:21,060 --> 02:28:24,520
I'm available for any questions and again, representatives of the development or present.

1913
02:28:25,380 --> 02:28:25,480
Okay.

1914
02:28:25,480 --> 02:28:25,960
So,

1915
02:28:28,180 --> 02:28:35,000
do we have a more firm timeline at this point, when do we expect USDA's

1916
02:28:36,340 --> 02:28:37,100
final sign off?

1917
02:28:37,420 --> 02:28:40,840
We have a letter from USA that states February of 2025.

1918
02:28:43,500 --> 02:28:48,220
That's when they expect to issue their final approval or

1919
02:28:48,220 --> 02:28:49,680
that as my understanding is.

1920
02:28:50,020 --> 02:28:52,020
But it has not been finally approved.

1921
02:28:52,800 --> 02:28:53,520
That is of now.

1922
02:28:53,720 --> 02:28:54,400
I believe so yes.

1923
02:28:55,200 --> 02:29:05,180
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.

1924
02:29:05,180 --> 02:29:06,320
And that's December.

1925
02:29:07,360 --> 02:29:11,160
Is there

1926
02:29:13,460 --> 02:29:16,980
anything else that is pending?

1927
02:29:19,900 --> 02:29:28,140
We extend their time and the USDA issues their February letter.

1928
02:29:29,400 --> 02:29:32,340
At that point, is there any other financing there?

1929
02:29:33,220 --> 02:29:35,920
City were behind us.

1930
02:29:36,160 --> 02:29:37,340
Letters that need to be done.

1931
02:29:37,340 --> 02:29:43,700
The applicant can speak to specifics, but in the request letter this was the sole reason given for the delay.

1932
02:29:43,920 --> 02:29:44,220
I'm okay.

1933
02:29:44,380 --> 02:29:45,680
Maybe we can hear from the

1934
02:29:45,680 --> 02:29:46,140
Mr. Rift.

1935
02:29:46,280 --> 02:29:46,540
Mr. Rift.

1936
02:29:47,540 --> 02:29:52,840
I missed the recent why the delay

1937
02:29:52,840 --> 02:29:54,220
at agriculture.

1938
02:29:54,860 --> 02:29:56,420
What's going on at agriculture?

1939
02:29:57,720 --> 02:29:59,700
I'm Dennis Hoover and I've represented these two.

1940
02:30:00,270 --> 02:30:05,070
Kind of wood village, and the facts for the same for country bill apartments.

1941
02:30:05,290 --> 02:30:11,970
I'm sorry, are you a consultant or a developer or owner or a manager builder?

1942
02:30:12,690 --> 02:30:13,270
I understand.

1943
02:30:16,330 --> 02:30:17,330
This is not unusual.

1944
02:30:19,010 --> 02:30:19,710
I mean,

1945
02:30:22,560 --> 02:30:30,620
since their reorganization where they disbanded the state offices and now everything is a regional national.

1946
02:30:32,340 --> 02:30:37,220
It's, you know, this is, I guess, the second, the third time we've been into for a

1947
02:30:37,220 --> 02:30:43,660
force major on identical USDA role development properties, the dentist,

1948
02:30:46,280 --> 02:30:47,440
I looked at the

1949
02:30:47,440 --> 02:30:53,560
last one that we did from the time, you go through, you go through application, several

1950
02:30:53,560 --> 02:30:59,700
months, you go through underwriting, several months and then it's handed off for the closing

1951
02:30:59,700 --> 02:31:04,460
department, which these two are now, and that's everything's done, everything's approved,

1952
02:31:04,620 --> 02:31:09,460
everything's ready to go. The last one, it took them six months before they issued clothes

1953
02:31:09,460 --> 02:31:10,080
and instructions.

1954
02:31:10,820 --> 02:31:13,040
Then USDA, or them TTH's, yes.

1955
02:31:13,040 --> 02:31:13,880
No, USDA.

1956
02:31:14,600 --> 02:31:16,560
All right. Thank you.

1957
02:31:16,740 --> 02:31:24,220
So, it's not unusual. This is, I, it's going to continue until something changes. I know, no,

1958
02:31:24,220 --> 02:31:27,760
I may be here next year, not on this one, but on the next year's new.

1959
02:31:27,760 --> 02:31:32,020
Mr. Chairman, the reason I asked that is that, because of all this constant rare

1960
02:31:32,020 --> 02:31:41,780
conversations, was I served in the Fed 25 years and I went through five different

1961
02:31:43,480 --> 02:31:48,340
administrations so that they're telling you that you might have in February something is

1962
02:31:48,340 --> 02:31:54,100
going to happen on the 20th and even before that sir there's going to be enormous

1963
02:31:54,100 --> 02:32:00,500
people are going to be leaving and reshuffling. And what is the guarantee that you're going to

1964
02:32:00,500 --> 02:32:10,060
get a letter saying go? I've been there four times when we had to pack and pack and pack and pack.

1965
02:32:10,100 --> 02:32:15,800
I mean, exactly what's happening right now. A lot of packing. And a lot of your career people

1966
02:32:15,800 --> 02:32:23,360
are trying to come and disappear. But that is reality. That's why I'm asking. Why is that assurance

1967
02:32:23,360 --> 02:32:27,960
that they're going to give you, it's anybody's going to give you a letter in February.

1968
02:32:28,860 --> 02:32:32,120
If there are a lot of acting directors, they say we don't have the authority.

1969
02:32:33,700 --> 02:32:37,200
And that's very agricultural service. I'll always be in bad.

1970
02:32:38,340 --> 02:32:44,560
I worked at Hartford 12 years. It was always agriculture who delayed, delayed, delayed.

1971
02:32:45,000 --> 02:32:46,420
And that's going to get worse.

1972
02:32:47,380 --> 02:32:48,840
For your personal statement.

1973
02:32:48,840 --> 02:32:52,160
Well, so I live through this, or I live through this.

1974
02:32:52,240 --> 02:32:55,940
I mean, I'm not trying to work with agriculture often times.

1975
02:32:55,960 --> 02:32:59,040
The only time we were able to work with them was not the colonelists.

1976
02:32:59,560 --> 02:33:04,260
And that was because the president of the United States had the Secretary of

1977
02:33:04,260 --> 02:33:10,940
HUD called the Secretary of Agriculture and they were able to work together for four months.

1978
02:33:11,300 --> 02:33:13,540
And then that's just reality.

1979
02:33:17,660 --> 02:33:26,160
We do have a statutory obligation to award 5% of the ceiling to USDA deals, so this is going to be a recurring thing.

1980
02:33:26,540 --> 02:33:36,800
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.

1981
02:33:38,160 --> 02:33:46,240
I hope not. I hope we can get it done in less time, but it's not happening so far.

1982
02:33:46,240 --> 02:33:49,260
And this is not the first time that we've encountered this from Cracker.

1983
02:33:49,540 --> 02:33:52,640
The board that there's got to be some way to

1984
02:33:54,240 --> 02:33:59,340
mesh the timelines that USDA requires versus what's in our tax credit.

1985
02:33:59,840 --> 02:34:07,640
Cycle that it just, it seems like there's no way that the USDA, any USDA deal

1986
02:34:07,640 --> 02:34:13,200
is going to be done in the timeline of the tax credit requirements.

1987
02:34:13,200 --> 02:34:20,140
I don't know what the answer is, except for making USDA more efficient somehow, send Mr. Musco

1988
02:34:20,140 --> 02:34:21,280
over there and see what you can do.

1989
02:34:22,960 --> 02:34:31,880
Mr. Marshall, is there a statutory reason that they're in the same time frame that others

1990
02:34:31,880 --> 02:34:43,760
are if this is a specific mandatory allotment, could we say on this specific mandatory allotment

1991
02:34:43,760 --> 02:34:49,160
for USDA that the timeline we grant him is a longer timeline?

1992
02:34:50,420 --> 02:34:54,700
No, because the timeline for tax credits is federal.

1993
02:34:56,500 --> 02:34:58,980
So it's almost like we're having to do this.

1994
02:34:59,200 --> 02:35:03,960
And you know, when we issue it, technically there are no extensions, but we force

1995
02:35:03,960 --> 02:35:06,840
measure as our extension that's going to happen.

1996
02:35:07,080 --> 02:35:11,080
And force measures, something you really can't do anything about the USDA if they're

1997
02:35:11,080 --> 02:35:18,160
not responding. And again, obviously not just picking on you, but in general, we need to understand

1998
02:35:18,160 --> 02:35:25,780
that timeline that it wasn't because the USDA was waiting on the applicant, it's because

1999
02:35:25,780 --> 02:35:32,340
the applicant was waiting on the USDA. There just understaffed. And it always happened.

2000
02:35:32,340 --> 02:35:36,440
You know, again, you're not the first one who's come to us with us.

2001
02:35:36,440 --> 02:35:37,300
Mr. Chairman, you ready?

2002
02:35:40,420 --> 02:35:45,380
And assuming no one wants to speak against the staff's recommendation, okay?

2003
02:35:45,900 --> 02:35:49,320
So part of the board grant to request a treatment on the application of force measure

2004
02:35:49,320 --> 02:35:52,740
over to candlewood village, all to describe condition authorized by the board

2005
02:35:52,740 --> 02:35:55,560
action request resolution to associate documents inside of them.

2006
02:35:55,720 --> 02:36:00,680
Second motion, baby, my Mr. Harper, seconded by Ms. Farias, all those in favor.

2007
02:36:00,680 --> 02:36:10,220
I, in the opposed, during the unemotion care, okay, I am 30, can't, can't read my handwriting.

2008
02:36:10,440 --> 02:36:13,280
34 of the agenda, this one should go faster.

2009
02:36:13,480 --> 02:36:19,560
Presentation discussion in possible action on a request for return and reallocation of tax credits under ten tech.

2010
02:36:19,800 --> 02:36:26,240
Section 11.65 related to credit returns resulting from force reserve events for country villa.

2011
02:36:26,240 --> 02:36:33,560
Yes, the global country villa is a USDA rehab from the same applicants. Circumstances are identical to our previous force measure

2012
02:36:33,560 --> 02:36:37,820
But this time we're dealing with a 32 unit development in pre-air

2013
02:36:37,820 --> 02:36:38,960
Duval County

2014
02:36:38,960 --> 02:36:46,600
Staff again recommends a cripple. Okay, so timelines were all we're still waiting the same

2015
02:36:47,480 --> 02:36:51,780
Yes, the we're the difference in year on the most of the same here and

2016
02:36:51,780 --> 02:36:58,380
And the USDA letter referenced earlier also mentions this application with the same.

2017
02:36:58,980 --> 02:36:59,180
Okay.

2018
02:37:02,640 --> 02:37:07,940
I move the board grant, the request, the treatment, under an application of the force

2019
02:37:07,940 --> 02:37:09,900
of material rule to count of the law.

2020
02:37:10,140 --> 02:37:13,740
All is described, condition and authorized in the board action request.

2021
02:37:14,280 --> 02:37:17,560
Resolution and associated documents on this item.

2022
02:37:17,560 --> 02:37:22,070
Second motion be my Nesparias seconded by Mr. Harper all those in favor say aye

2023
02:37:22,440 --> 02:37:25,800
I'm in the oppose hearing none motion carries. Thank you sir

2024
02:37:25,800 --> 02:37:28,620
I am 35 of the agenda

2025
02:37:30,000 --> 02:37:36,300
You know, maybe Mr. Speaker, yes, you should under retire and go back and go clean up USDA.

2026
02:37:38,540 --> 02:37:41,560
Well, it's all a reasonable reason for you to be there, yeah.

2027
02:37:43,300 --> 02:37:49,420
Okay, I'm 35 presentation discussion and possible action on a request for return and reallocation of tax credits.

2028
02:37:49,800 --> 02:37:58,440
Under 10 tax section, 11.65 related to credit returns resulting from force measure events for VISTA at 1000 Oaks, Mr. Goldberger.

2029
02:37:58,440 --> 02:38:04,960
Item 35 concerns VISTA at Thousand Oaks, a development to be constructed in San Antonio.

2030
02:38:05,640 --> 02:38:12,860
Award in 2022, the Project's original and current placed in Service Deadline is December 31, 2024.

2031
02:38:13,580 --> 02:38:18,080
This project was originally slated for completion in September, but during the properties construction

2032
02:38:18,080 --> 02:38:24,060
the builder experienced material weather issues that resulted in a delay of approximately 54 days.

2033
02:38:24,060 --> 02:38:33,940
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.

2034
02:38:34,760 --> 02:38:44,280
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.

2035
02:38:44,820 --> 02:38:50,580
Now, this project is still on track to place and service this year and hit that original

2036
02:38:50,580 --> 02:38:55,880
place in service deadline, but with far room less room for air due to that two month delay.

2037
02:38:56,620 --> 02:39:00,720
To give a little breathing room and account for potential last minute issues, the applicant

2038
02:39:00,720 --> 02:39:07,120
has requested to extend the place and service deadline three months to March 31st, 2025.

2039
02:39:07,820 --> 02:39:08,700
Staff recommends approval.

2040
02:39:09,020 --> 02:39:11,840
I'm available for any questions and representatives of the applicants are present.

2041
02:39:11,840 --> 02:39:18,240
Okay, this one's almost done. Yep, it probably will make it, but and I'll likely if it yes, but just in case

2042
02:39:18,700 --> 02:39:19,760
Let's give another

2043
02:39:20,500 --> 02:39:21,620
90 days

2044
02:39:21,620 --> 02:39:29,980
I mean board members have questions on this one. I think we want to speak against the staff recommendation

2045
02:39:31,240 --> 02:39:44,890
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

2046
02:39:45,170 --> 02:39:55,290
to Vista at 1000 Oaks with a placed in service deadline at March 31st, 2025 all is described

2047
02:39:55,290 --> 02:40:02,130
conditioned and authorized in the board action request resolution and associated documents

2048
02:40:02,130 --> 02:40:02,950
on this item.

2049
02:40:03,150 --> 02:40:04,030
That's award salad.

2050
02:40:04,630 --> 02:40:05,030
Second.

2051
02:40:06,030 --> 02:40:07,750
Motion made by Mr. Martian.

2052
02:40:07,990 --> 02:40:09,410
Seconded by Ms. Padeus.

2053
02:40:09,570 --> 02:40:10,930
All those in favor say aye.

2054
02:40:11,470 --> 02:40:12,770
Any opposed, tearing none.

2055
02:40:12,950 --> 02:40:13,550
Motion carries.

2056
02:40:13,550 --> 02:40:16,510
I am 36 of the agenda.

2057
02:40:17,850 --> 02:40:29,310
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.

2058
02:40:29,690 --> 02:40:30,350
Mr. Goldberger.

2059
02:40:30,850 --> 02:40:41,190
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.

2060
02:40:41,190 --> 02:40:47,210
The board previously approved force measure treatment for this development in 2022, and approved

2061
02:40:47,210 --> 02:40:52,050
an allocation of supplemental credits in 2023, which extended the project's placed in service

2062
02:40:52,050 --> 02:40:58,650
deadline, to December of 25. This project, like many awarded during that period, has struggled

2063
02:40:58,650 --> 02:41:04,390
to maintain visibility amid significant construction cost increases. There are quest states that at

2064
02:41:04,390 --> 02:41:10,670
the time of preparing the application in 2020, hard costs were anticipated to be 112,000 per unit.

2065
02:41:11,190 --> 02:41:16,590
This figure is now projected to be almost $191,000 in nearly 70% increase.

2066
02:41:17,150 --> 02:41:21,010
This is, of course, in addition to rising interest rates and, as a project in Houston,

2067
02:41:21,570 --> 02:41:27,090
insurance costs that have gone from 425 a unit to 1,800 in the wake of several major storms.

2068
02:41:28,170 --> 02:41:32,810
These visibility issues delay the project significantly as the applicant sought out various

2069
02:41:32,810 --> 02:41:35,110
gap funding to keep the project alive.

2070
02:41:35,750 --> 02:41:39,830
This is obviously taken quite a bit of time given the increases they are dealing with.

2071
02:41:39,830 --> 02:41:45,710
But with the help of sources from Harris County and the city of Houston, the applicant has found a way forward.

2072
02:41:46,390 --> 02:41:51,450
The project is now permit ready, they are set to close in weeks, and construction will begin within the month.

2073
02:41:52,250 --> 02:41:57,230
The applicant is requesting a one year extension to the place and service deadline to December of 26.

2074
02:41:58,030 --> 02:42:01,990
It does seem that with their anticipated timeline, they should be able to meet this pretty complete.

2075
02:42:03,030 --> 02:42:08,930
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.

2076
02:42:08,930 --> 02:42:13,610
Nonetheless, they have related to staff there and now ready to get this project built.

2077
02:42:14,110 --> 02:42:19,210
Staff recommends approval and represents of the development our here should you have any specific questions.

2078
02:42:20,910 --> 02:42:38,170
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

2079
02:42:38,170 --> 02:42:42,450
that still need to take place, still need to be approved.

2080
02:42:42,710 --> 02:42:43,470
I see that.

2081
02:42:43,510 --> 02:42:45,930
Your representatives of the applicant are approaching.

2082
02:42:46,270 --> 02:42:49,770
They should be able to talk to that structure in the meeting items.

2083
02:42:51,030 --> 02:42:53,370
Yes, so yeah, it's a performer.

2084
02:42:53,630 --> 02:42:56,990
This very former with coach Rose, we represent the developer.

2085
02:42:57,890 --> 02:43:02,570
And we have a closing schedule for November 14th,

2086
02:43:02,650 --> 02:43:07,490
but before that we are going to the Houston City Council on November 13th

2087
02:43:07,490 --> 02:43:15,050
for final approval of their money, we've been told by the mayor's office and by the district

2088
02:43:15,050 --> 02:43:20,810
council member that they are in support and they fully expect it to be approved on the

2089
02:43:20,810 --> 02:43:26,510
13th and we're moving forward with closing documents and anticipating a closing.

2090
02:43:26,790 --> 02:43:35,270
The county is putting in $6.000 million to the steel and they have deadlines that they have

2091
02:43:35,270 --> 02:43:39,830
to expend their money, it's our pothons that have to be spent by the end of this year.

2092
02:43:40,630 --> 02:43:48,210
So they are pressuring us to make sure that we do close in November and we have everything

2093
02:43:48,210 --> 02:43:54,370
in place except you're approval and this final City Council approval.

2094
02:43:55,850 --> 02:43:59,190
And the district council member is on board?

2095
02:43:59,550 --> 02:43:59,870
Yes.

2096
02:43:59,870 --> 02:44:00,490
and supporting?

2097
02:44:02,070 --> 02:44:02,990
Yes, yes, yes.

2098
02:44:04,250 --> 02:44:06,810
Now that you said something, you get an introduced yourself.

2099
02:44:09,090 --> 02:44:11,850
This is, I'm Jordan Finkelman, Vice President of Development,

2100
02:44:12,110 --> 02:44:13,730
for our housing trust group.

2101
02:44:16,230 --> 02:44:17,570
Happy to answer any other questions.

2102
02:44:18,330 --> 02:44:20,330
So, I mean, you haven't heard any,

2103
02:44:20,330 --> 02:44:25,170
both of you have heard any grumblings from the council members

2104
02:44:25,850 --> 02:44:29,110
that anyone wants to tag something or their

2105
02:44:29,110 --> 02:44:32,250
That's a bad link with Mr.

2106
02:44:32,470 --> 02:44:33,930
Myer or anything like that.

2107
02:44:34,630 --> 02:44:41,250
All indications are that we are good to go for this 13th meeting and that will have signature

2108
02:44:41,250 --> 02:44:45,850
pages the same day as well, that we should be able to meet our closing on the 14th.

2109
02:44:45,990 --> 02:44:50,650
Is the housing authority using the housing authority involved in the transaction they were?

2110
02:44:58,510 --> 02:44:59,070
That's...

2111
02:44:59,070 --> 02:44:59,970
The 13th.

2112
02:45:00,500 --> 02:45:09,100
There's a process whereby anything they pass that has to be ratified at a following meeting, usually.

2113
02:45:09,280 --> 02:45:10,160
I'm not in Houston.

2114
02:45:10,380 --> 02:45:18,060
I'm in Houston. Okay. So, we're lenders willing to accept that vote to proceed to close.

2115
02:45:18,760 --> 02:45:20,100
Right. So, I can monitor.

2116
02:45:20,240 --> 02:45:28,340
Usually in Houston, there's some time lag between getting a resolution approved and getting a signed resolution.

2117
02:45:28,340 --> 02:45:34,240
yeah that's what I was referring to but because of the time pressure that we're under

2118
02:45:34,240 --> 02:45:43,040
with the county to close and spend their money the mayor has agreed to get signed the same

2119
02:45:43,040 --> 02:45:53,000
day well congratulations on that and then I was going to point out in this particular

2120
02:45:53,000 --> 02:45:54,440
So the circumstances,

2121
02:45:58,260 --> 02:46:01,380
I would normally say let's get all these approvals before we give the

2122
02:46:01,380 --> 02:46:01,900
force measure.

2123
02:46:02,440 --> 02:46:10,390
But if they don't get the city of Houston vote approval and then the county money falls

2124
02:46:10,390 --> 02:46:16,490
through because you're not going to get it closed necessarily before they have to apply those

2125
02:46:17,650 --> 02:46:21,650
So, our extension wouldn't make a difference because the deal is going to die anything.

2126
02:46:22,970 --> 02:46:23,030
Basically.

2127
02:46:24,010 --> 02:46:24,330
Yes.

2128
02:46:25,010 --> 02:46:25,230
All right.

2129
02:46:30,990 --> 02:46:34,930
So, in questions, or are you ready to make a motion?

2130
02:46:35,830 --> 02:46:36,350
Mr. Harper.

2131
02:46:37,270 --> 02:46:39,690
Move the board grant or request or treatment on the application of course.

2132
02:46:39,770 --> 02:46:40,750
Make sure to the rush for more.

2133
02:46:40,890 --> 02:46:41,310
All is described.

2134
02:46:41,450 --> 02:46:43,250
Conditioned authorize the board action request resolution.

2135
02:46:43,450 --> 02:46:44,870
So, should you document the thought of?

2136
02:46:45,050 --> 02:46:45,450
Second.

2137
02:46:45,850 --> 02:46:46,990
Motion made by Mr. Harper.

2138
02:46:46,990 --> 02:46:49,610
seconded by Ms. Padeus, all those in favor say aye.

2139
02:46:49,610 --> 02:46:49,950
Aye.

2140
02:46:50,290 --> 02:46:52,290
Any opposed, sir, in none motion carries?

2141
02:46:53,690 --> 02:46:54,210
Thank you, guys.

2142
02:46:58,520 --> 02:47:00,660
And again, just to reiterate for everyone,

2143
02:47:01,680 --> 02:47:03,400
some of the key factors in my mind,

2144
02:47:03,560 --> 02:47:04,760
not that I have to explain myself,

2145
02:47:05,820 --> 02:47:11,480
but this had specific dates where there could need to meet.

2146
02:47:12,440 --> 02:47:15,860
There's, we know when those approvals are going to be,

2147
02:47:16,220 --> 02:47:18,280
it's not maybe, and in this case,

2148
02:47:18,280 --> 02:47:21,700
if it doesn't get approved, well, it's kind of our extension

2149
02:47:21,700 --> 02:47:23,900
that I'm almost a minute point.

2150
02:47:24,820 --> 02:47:25,740
You done Josh?

2151
02:47:26,160 --> 02:47:26,380
I'm done.

2152
02:47:26,540 --> 02:47:27,420
OK, thank you.

2153
02:47:27,480 --> 02:47:27,860
Thank you.

2154
02:47:30,580 --> 02:47:33,320
So given what staff we have available,

2155
02:47:35,580 --> 02:47:38,220
we're moving on to item 37,

2156
02:47:40,520 --> 02:47:44,700
which is the last posted item, but we still have a couple of,

2157
02:47:46,840 --> 02:47:47,040
OK.

2158
02:47:47,040 --> 02:47:55,360
So item 37 of the agenda, let's keep this nice and short, presentation, discussion and

2159
02:47:55,360 --> 02:48:01,660
possible action on the adoption of the repeal of 10 tech chapter 11 concerning the housing

2160
02:48:01,660 --> 02:48:10,480
tax credit program qualified allocation plan, adoption of new 10 tech chapter 11 concerning

2161
02:48:10,480 --> 02:48:15,720
the housing tax credit program qualified allocation plan and directing their publication

2162
02:48:15,720 --> 02:48:22,500
for adoption in the Texas Register following the statutory opportunity for gubernatorial acceptance,

2163
02:48:22,840 --> 02:48:28,800
revision, or rejection. Mr. Campbell, thank you. Thank you. Thank you just said it all.

2164
02:48:29,760 --> 02:48:35,200
This item is the QAP. The board approved the draft QAP at the September meeting which was released

2165
02:48:35,200 --> 02:48:41,060
for public comments and we received 54 comments on it in total. After your approval today,

2166
02:48:41,220 --> 02:48:45,600
the QAP will be transmitted to the governor, no later than November 15th. The governor

2167
02:48:45,600 --> 02:48:52,640
then has the option to approve a proof of changes or reject the QAP no longer than December 1st.

2168
02:48:52,860 --> 02:49:00,040
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.

2169
02:49:00,680 --> 02:49:07,560
The changes made to it are largely clerical or administrative, although a few more substantial changes have been made in response to public comment

2170
02:49:07,560 --> 02:49:10,280
and I'll go over these significant ones of those shortly.

2171
02:49:10,280 --> 02:49:15,220
You may recall the staff went through two rounds of QAP revisions this year with an informal

2172
02:49:15,220 --> 02:49:18,460
first draft of the QAP release for comment earlier this year.

2173
02:49:18,800 --> 02:49:23,120
Comments were accepted on that early draft and responsive edits were made prior to the

2174
02:49:23,120 --> 02:49:23,880
September meeting.

2175
02:49:24,880 --> 02:49:29,820
Of the 54 comments that were received, many focused on a small number of issues in the QAP.

2176
02:49:30,560 --> 02:49:34,560
The item that received the most public comment by far was the quantity of low-income

2177
02:49:34,560 --> 02:49:35,820
units scoring item.

2178
02:49:35,820 --> 02:49:42,840
Just as a brief refresher, the department saw a drastic decline in the number of units produced during the pandemic.

2179
02:49:43,320 --> 02:49:55,760
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.

2180
02:49:55,760 --> 02:50:06,360
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.

2181
02:50:07,220 --> 02:50:12,960
Comments are overwhelmingly requested that these thresholds be lowered to 4% and 6%.

2182
02:50:12,960 --> 02:50:21,820
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%.

2183
02:50:21,820 --> 02:50:25,600
anticipate that there will be a significant amount of public comments on this item.

2184
02:50:26,760 --> 02:50:30,660
Moving on from that, you may recall that there was a significant amount of discussion at the

2185
02:50:30,660 --> 02:50:36,320
September meeting concerning the at-risk and USDA set of sites. Each year, 15% of our

2186
02:50:36,320 --> 02:50:41,520
credit ceiling must go towards developments that are at-risk, losing affordability. One third of

2187
02:50:41,520 --> 02:50:46,320
this set of sites is reserved for developments that receive assistance from USDA, although these

2188
02:50:46,320 --> 02:50:50,960
USDA developments may also qualify for the remaining 10% of the funding that's available.

2189
02:50:50,960 --> 02:51:00,900
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.

2190
02:51:01,660 --> 02:51:10,640
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.

2191
02:51:11,480 --> 02:51:15,120
This is the shortest QAP presentation that I've ever given this board.

2192
02:51:15,560 --> 02:51:23,500
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.

2193
02:51:23,740 --> 02:51:34,960
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.

2194
02:51:35,380 --> 02:51:35,980
Thank you, Cody.

2195
02:51:35,980 --> 02:51:40,420
Sure. So just to help manage expectations,

2196
02:51:41,260 --> 02:51:45,340
Boo in here is wanting to make public comment on this.

2197
02:51:48,680 --> 02:51:53,180
Okay. Do you all have you coordinated with each other,

2198
02:51:53,360 --> 02:51:56,140
so you're not coming up here and saying the exact same thing

2199
02:51:57,580 --> 02:51:59,120
to the extent possible.

2200
02:51:59,120 --> 02:52:08,640
Okay, let's, I think I should we do this in order of all this tissue.

2201
02:52:15,080 --> 02:52:20,700
What is his recommendation that we adopt the lower numbers? Is that in the QAP?

2202
02:52:21,220 --> 02:52:24,620
In dispersion, that's in the board, that's what's in the board.

2203
02:52:26,660 --> 02:52:29,980
Okay, we're going to start with the random topic here in the fuel.

2204
02:52:30,340 --> 02:52:37,540
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.

2205
02:52:38,320 --> 02:52:40,040
So, please, okay,

2206
02:52:44,770 --> 02:52:52,590
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.

2207
02:52:55,660 --> 02:53:01,000
I have my little thing that I'm looking forward to cutting off your microphone if you wrap up when after that thing goes.

2208
02:53:01,000 --> 02:53:06,660
I mean, really, I really want to do that, you know, I hope them will be talks long, so I can cut it off.

2209
02:53:08,900 --> 02:53:15,960
So, please introduce yourself, proceed, let us know what you're, which part of the topic you want to speak on.

2210
02:53:16,080 --> 02:53:24,200
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.

2211
02:53:24,820 --> 02:53:30,380
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.

2212
02:53:30,380 --> 02:53:42,900
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.

2213
02:53:43,700 --> 02:53:49,740
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.

2214
02:53:50,780 --> 02:53:57,000
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.

2215
02:53:57,000 --> 02:54:04,400
We are also of the opinion that competitive tax credits or a limited resource and should be used to maximize affordable housing and taxes.

2216
02:54:05,580 --> 02:54:09,820
But to do so, the deals have to be financially viable.

2217
02:54:10,920 --> 02:54:17,100
See, this quality of low-income unit point item did come about in this 2024 program cycle,

2218
02:54:17,100 --> 02:54:23,580
and it was under the 20% and 10% program thresholds for the overwhelming amount of applications.

2219
02:54:24,260 --> 02:54:29,720
It was a core concern of tap back when this was first appeared in the 2024 cycle.

2220
02:54:29,900 --> 02:54:34,880
It has been an issue for us even when we spoke before you back in June in our large presentation.

2221
02:54:36,300 --> 02:54:39,460
And it still remains a core concern of the industry today.

2222
02:54:40,180 --> 02:54:44,740
And a big reason of that is you are virtually obligated to take these points.

2223
02:54:44,860 --> 02:54:50,140
And I know it sounds like you have the option, but let me clarify what I mean by that.

2224
02:54:50,140 --> 02:54:56,280
Developers often spend upwards of $100,000 to take the risk to submit an application for this program.

2225
02:54:57,120 --> 02:54:59,760
We understand that that is a part of playing in this business.

2226
02:55:00,260 --> 02:55:05,120
But if you are trying to spend this money and take that level of risk, you have to be cognizant

2227
02:55:05,120 --> 02:55:08,680
about what are your chances you think of scoring a competitive application.

2228
02:55:09,360 --> 02:55:15,280
And so developers are often pit against one another trying to obtain a scoring or winning application.

2229
02:55:16,060 --> 02:55:19,100
And so to take that risk, you have to be able to maximize those points.

2230
02:55:20,140 --> 02:55:24,660
So it often takes out, takes a matter of figuring out how to make the capital stack work.

2231
02:55:25,500 --> 02:55:29,800
And oftentimes these developers are maxing out the housing tax credit request amount

2232
02:55:29,800 --> 02:55:33,280
and they're maxing out the amount of debt they can request as a party to this.

2233
02:55:33,600 --> 02:55:38,480
But enable to make those deals work, they're often relying on soft funding sources and tax

2234
02:55:38,480 --> 02:55:43,720
exemptions as a means to either get more debt or find ways to fill in that capital stack to make

2235
02:55:43,720 --> 02:55:45,580
the quality of units they committed to achievable.

2236
02:55:46,760 --> 02:55:52,760
Today, before you, there were 16 force major requests on the agenda, and though I know we didn't cover all of them.

2237
02:55:52,900 --> 02:55:56,280
The each deal has their own unique reasons for making that request.

2238
02:55:56,860 --> 02:56:01,360
The issue still remains that there are still challenges for these deals to get done.

2239
02:56:01,660 --> 02:56:09,400
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.

2240
02:56:10,320 --> 02:56:15,360
See, the economic realities of these deals is you're hitting that maximum credit ceiling.

2241
02:56:15,960 --> 02:56:22,060
And so that's why as an industry, we felt that the 4% and 6% requests are suitable for

2242
02:56:22,060 --> 02:56:23,340
this year based on the numbers.

2243
02:56:23,960 --> 02:56:27,920
Now I'd like to introduce Rachel Tom's Phillips to speak about the economic impacts.

2244
02:56:30,960 --> 02:56:31,560
Good afternoon.

2245
02:56:31,880 --> 02:56:35,620
As he said, my name is Rachel Tom's Phillips, and it's a little bit different of a perspective

2246
02:56:35,620 --> 02:56:40,380
I am with regions affordable housing, so I am one of the financing partners.

2247
02:56:40,380 --> 02:56:57,280
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.

2248
02:56:58,060 --> 02:57:07,340
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.

2249
02:57:07,340 --> 02:57:11,300
This is with no anticipation of increase in the foreseeable future.

2250
02:57:11,960 --> 02:57:18,100
What that means is on a per deal basis, there's a reduction in equity of approximately a million dollars.

2251
02:57:18,360 --> 02:57:22,080
That's assuming a full allocation of two million, so that's right off the bat.

2252
02:57:22,660 --> 02:57:25,940
The first mortgage debt proceeds available to the project have declined.

2253
02:57:26,300 --> 02:57:30,000
That's for reasons such as inflation, operating expenses are higher.

2254
02:57:30,280 --> 02:57:33,880
We've talked about insurance, that's higher, and interest rates, of course.

2255
02:57:34,640 --> 02:57:42,620
Construction costs, they're stable as of current, which is great, but it's at a higher baseline per unit to construction cost amount.

2256
02:57:43,380 --> 02:57:54,900
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.

2257
02:57:54,900 --> 02:58:01,980
debt available to cover the cost is lower today than it has been, and at the same time cost

2258
02:58:01,980 --> 02:58:04,140
of construction and financing have increased.

2259
02:58:05,380 --> 02:58:11,020
So, that basically means that to construct a project that is on par with what it has

2260
02:58:11,020 --> 02:58:14,040
been in the past, it's taking more financing resources.

2261
02:58:15,280 --> 02:58:21,080
So, despite all that, we are seeing developers elect these points and structure their

2262
02:58:21,080 --> 02:58:30,860
So what that's resulting in is the financing process is no longer on the nine percent's a streamlined financing process.

2263
02:58:31,180 --> 02:58:39,100
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.

2264
02:58:39,700 --> 02:58:41,140
That is no longer the case.

2265
02:58:41,520 --> 02:58:49,520
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.

2266
02:58:50,980 --> 02:58:55,240
restructuring the ownership to bring in a partner that will bring in a tax abatement.

2267
02:58:56,020 --> 02:59:01,640
Those things, uh, the soft sources a lot of times the schedules for awarding those is

2268
02:59:01,640 --> 02:59:03,480
not in sync with the tax credits.

2269
02:59:04,220 --> 02:59:09,360
So ultimately for us, what is a really big red flag is the timeline for these projects.

2270
02:59:09,500 --> 02:59:14,540
They're becoming more complex, less streamlined, and there's really a concern about the

2271
02:59:14,540 --> 02:59:38,580
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.

2272
02:59:38,580 --> 02:59:39,800
Hello,

2273
02:59:50,130 --> 02:59:54,890
I am Sarah Andre and I am a consultant and developer in the tax credit world.

2274
02:59:55,790 --> 02:59:59,970
I am going to try to boil down for you what Rachel just...

2275
03:00:00,000 --> 03:00:29,060
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.

2276
03:00:29,060 --> 03:00:35,160
2% little under 2% which was deferred developer fee and you know in case you don't know

2277
03:00:35,160 --> 03:00:39,280
what a deferred developer fee is that's a paycheck that takes 15 years to arrive.

2278
03:00:40,520 --> 03:00:43,520
So it's you know can be painful.

2279
03:00:45,500 --> 03:00:47,160
It can be fine if it's small.

2280
03:00:48,000 --> 03:00:55,780
In 2024 this exact same 108 unit development now costs 26.2 million.

2281
03:00:55,780 --> 03:01:04,300
dollars, $4 million, a $17 increase, and the mortgage that it generated only increased by

2282
03:01:04,300 --> 03:01:14,940
0.1 percent, a whopping $74,000. And that is in my model. I kept the operating expenses the same

2283
03:01:14,940 --> 03:01:23,340
as they were in 2022. The operating expenses, as you just heard, are not the same. If I do increase

2284
03:01:23,340 --> 03:01:28,920
as operating expenses, well, even if hold on before I get to that.

2285
03:01:29,320 --> 03:01:33,100
So this 20, 20, 40, all exactly the same as the 2022 one.

2286
03:01:33,440 --> 03:01:39,320
You've now got a gap of $3.2 million, which cannot be paid out of a deferred fee.

2287
03:01:39,360 --> 03:01:41,920
That's not just a paycheck that doesn't arrive.

2288
03:01:41,920 --> 03:01:43,700
That's a paycheck that never arrives.

2289
03:01:44,500 --> 03:01:49,500
And not just that, it wouldn't meet TTHCA criteria for financial feasibility.

2290
03:01:49,500 --> 03:01:56,760
not to mention any lender or equity provider. So now let's talk about the expense of the impact

2291
03:01:56,760 --> 03:02:06,420
of actual expenses on that same project. Now the gap goes to $4.8 million. We lose a million in loan

2292
03:02:06,420 --> 03:02:13,140
proceeds, we lose 600,000 in equity pricing and I might have been overly generous with my equity

2293
03:02:13,140 --> 03:02:20,120
pricing, but I tried to give, you know, best case scenario. So now let's see what happens

2294
03:02:20,120 --> 03:02:24,820
when you add 10%. I'm not even going to add 20% because that is out of the question.

2295
03:02:25,400 --> 03:02:30,340
10% more units. And the reason I got to all this was because I was sitting around for clients,

2296
03:02:30,520 --> 03:02:35,140
trying to noodle and go, well, is this viable? Can you buy this land? Can we make it work?

2297
03:02:35,860 --> 03:02:42,220
So when you add 10% more units to that 108 unit development, you now have a 6.2 million

2298
03:02:42,220 --> 03:02:48,920
dollar hole. So yes, we are going to go and try to seek tax abatement, soft money that

2299
03:02:48,920 --> 03:02:57,260
as you heard today, you know, doesn't line up. So that is how these impacts one deal.

2300
03:02:59,060 --> 03:03:03,960
Bottom line, you just can't buy as much as you used to be able to buy with the same amount of money.

2301
03:03:05,120 --> 03:03:06,160
Thank you, Sarah.

2302
03:03:07,780 --> 03:03:11,120
So, anyone else on this section of the

2303
03:03:20,690 --> 03:03:23,470
rubby mire, I'm with Arkset Vanage and also speaking

2304
03:03:23,470 --> 03:03:32,670
on for tap, I'm actually addressing the whole point category, Carson actually started on

2305
03:03:32,670 --> 03:03:39,330
that and as I've said before many times, the points, you say don't, you don't have to take

2306
03:03:39,330 --> 03:03:42,370
points, but as you know, we do have to take the points.

2307
03:03:42,650 --> 03:03:48,450
And last year I gave you a baseball analogy that we had to swing the bat, and I think

2308
03:03:48,450 --> 03:03:52,350
everybody remembers that that was there, but we were in the World Series last year so that

2309
03:03:52,350 --> 03:03:53,230
would make sense.

2310
03:03:54,030 --> 03:03:54,890
But we do.

2311
03:03:55,230 --> 03:03:59,530
We have to take every point, it doesn't matter.

2312
03:03:59,910 --> 03:04:06,350
And when I source sites for my clients, I look for sites that will score max.

2313
03:04:06,350 --> 03:04:09,910
And if they don't score max, I throw a math window and we move on.

2314
03:04:10,510 --> 03:04:16,770
And I'm looking for sites now that score the max and I can get the closest to the

2315
03:04:16,770 --> 03:04:17,270
tie breaks.

2316
03:04:17,410 --> 03:04:21,550
Because that's what I'm competing for is the tie breaks and who can I beat in the tie

2317
03:04:21,550 --> 03:04:21,910
breaks.

2318
03:04:22,250 --> 03:04:24,150
And then we all end up on top of each other.

2319
03:04:24,870 --> 03:04:29,370
So score is not a matter of an option.

2320
03:04:29,730 --> 03:04:33,470
It's a requirement for us to be able to compete with each other.

2321
03:04:33,470 --> 03:04:37,350
I'm also on that the member of the Tap QAP Committee.

2322
03:04:38,010 --> 03:04:44,390
We spent a long time on this item and we went back and forth of what was a reasonable

2323
03:04:44,390 --> 03:04:47,890
percentage because we knew we weren't going to say it can go away.

2324
03:04:48,150 --> 03:04:49,470
That wasn't going to be an option.

2325
03:04:50,290 --> 03:04:56,690
So we looked to see what could be a reasonable percentage that you all could accept.

2326
03:04:57,130 --> 03:05:01,850
To increase the units, not have a decrease in units, you could still get an increase in

2327
03:05:01,850 --> 03:05:16,570
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.

2328
03:05:16,730 --> 03:05:22,150
And I ask that you also be reasonable and accept our request. Thank you.

2329
03:05:22,150 --> 03:05:22,690
It's really

2330
03:05:35,300 --> 03:05:41,140
just in my or arcs advantage, I'm also speaking on the in support of taps comments.

2331
03:05:41,760 --> 03:05:46,920
Chairman Vasquez, I know that you're a fan of Ditto and I'm here before you,

2332
03:05:47,400 --> 03:05:50,360
bringing all the force that my Ditto can bring to bear.

2333
03:05:51,140 --> 03:05:57,160
It's critical to note that we in the development community deeply want to provide as many housing units as possible.

2334
03:05:57,540 --> 03:06:00,200
That incentive already exists outside of this point category.

2335
03:06:00,200 --> 03:06:10,640
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.

2336
03:06:11,920 --> 03:06:24,580
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.

2337
03:06:25,380 --> 03:06:29,360
We're asking for the change in this point category to what is already a barely tenable

2338
03:06:29,360 --> 03:06:30,700
four and six percent.

2339
03:06:30,880 --> 03:06:36,380
This is an increase over the present unit production rate, which is already unsustainable

2340
03:06:36,380 --> 03:06:38,740
for all the reasons that we've so carefully laid out.

2341
03:06:39,860 --> 03:06:43,600
This point category at the described levels and the board materials is going to require

2342
03:06:43,600 --> 03:06:48,000
creative solutions on the part of the development community and ultimately result in solutions,

2343
03:06:48,680 --> 03:06:52,120
like requesting property tax exemptions, which is already even pointed out.

2344
03:06:52,120 --> 03:06:57,240
The most egregious part of this is that none of this type of creative capital structuring

2345
03:06:57,240 --> 03:07:00,340
should be required in healthy 9% transactions.

2346
03:07:00,860 --> 03:07:02,260
Thank you.

2347
03:07:02,380 --> 03:07:03,060
Thank you, sir.

2348
03:07:11,420 --> 03:07:14,480
Good afternoon, Emily Ablin, with Brinshore Development.

2349
03:07:15,680 --> 03:07:19,060
I'd like to quote Mr. Marchant from earlier, where he said,

2350
03:07:19,180 --> 03:07:23,920
is this a systemic problem when you were talking about a rule that was creating an adverse

2351
03:07:23,920 --> 03:07:26,280
consequence and unintended consequence?

2352
03:07:26,280 --> 03:07:28,800
And that's exactly what this rule is doing.

2353
03:07:29,640 --> 03:07:29,980
So...

2354
03:07:30,000 --> 03:07:36,380
I would like to just point out that in 2024, this rule was introduced to increase the number of units.

2355
03:07:37,260 --> 03:07:44,440
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.

2356
03:07:44,440 --> 03:07:57,220
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.

2357
03:07:58,240 --> 03:08:06,640
Everyone for the most part I can imagine does not have a feasible deal because they are oversized with these additional units.

2358
03:08:06,640 --> 03:08:13,260
So some credits have already been returned, which is extremely unusual to get credit returns

2359
03:08:13,260 --> 03:08:14,140
this early.

2360
03:08:15,600 --> 03:08:20,820
The rest of us are scrambling to find soft sources and figure out a way to make this

2361
03:08:20,820 --> 03:08:21,360
deal work.

2362
03:08:21,620 --> 03:08:27,060
We're optimist by nature, the only way that we could get the credits to begin with was to

2363
03:08:27,060 --> 03:08:28,200
take the point.

2364
03:08:28,700 --> 03:08:31,760
So here we are trying to figure out how to make it work.

2365
03:08:31,760 --> 03:08:37,880
It's going to take time and it's going to take soft sources, both of which are severely constrained.

2366
03:08:38,700 --> 03:08:44,840
So keeping this rule really inhibits our ability to deliver the units in a timely manner,

2367
03:08:45,420 --> 03:08:49,040
because it takes so much more effort to get those units on the ground.

2368
03:08:49,700 --> 03:08:53,620
And we can play out the scenario of, okay, well, we're just going to stop,

2369
03:08:53,620 --> 03:08:57,160
allowing for some measures. We're not going to grant waivers. That's fine.

2370
03:08:57,160 --> 03:09:02,400
You just go to the next oversized, infeasible deal on the list and we start the cycle over again.

2371
03:09:03,000 --> 03:09:08,820
The end of the day, no units get developed when we could have been developing units all along,

2372
03:09:09,020 --> 03:09:12,660
and we could have right-sized them from the beginning.

2373
03:09:14,200 --> 03:09:20,640
As was a stutely noted in the last board meeting, creating effective policy is best achieved by

2374
03:09:20,640 --> 03:09:24,940
collaborating with the folks who are charged with the development of these units.

2375
03:09:25,960 --> 03:09:40,260
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.

2376
03:09:40,840 --> 03:09:43,700
It's still not tenable, but we wanted to give something.

2377
03:09:43,700 --> 03:09:49,420
And, yeah, I, I, Sue's saying for a second here, yes, sir.

2378
03:09:50,200 --> 03:09:54,020
Do you think that if we eliminated this rule that we would stop the soft money given

2379
03:09:54,020 --> 03:10:00,560
the cost, the increased interest rates, increasing construction, increase in taxes, and increase

2380
03:10:00,560 --> 03:10:02,580
in insurance this end of the market today?

2381
03:10:02,840 --> 03:10:04,240
You are absolutely correct.

2382
03:10:04,460 --> 03:10:06,340
The gap exists no matter what.

2383
03:10:06,500 --> 03:10:08,980
The problem is it just makes the gap that much larger.

2384
03:10:09,880 --> 03:10:11,020
It makes it that much harder.

2385
03:10:11,020 --> 03:10:21,880
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.

2386
03:10:22,460 --> 03:10:30,240
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.

2387
03:10:31,240 --> 03:10:34,960
So it's taking us an existing large gap and exacerbating it.

2388
03:10:34,960 --> 03:10:36,980
I mean, what about the availability of soft funding?

2389
03:10:37,520 --> 03:10:39,480
We have less than we did a year ago.

2390
03:10:39,700 --> 03:10:40,640
I assume, Harper's going away.

2391
03:10:40,760 --> 03:10:41,540
We just talked about that.

2392
03:10:41,900 --> 03:10:43,280
Is that the case for the program?

2393
03:10:43,280 --> 03:10:43,540
Absolutely.

2394
03:10:44,520 --> 03:10:49,600
The state really enjoyed the benefit of a windfall post-harvey.

2395
03:10:50,420 --> 03:10:52,320
And that created so many units.

2396
03:10:52,560 --> 03:10:54,660
And those deals, you notice that those deals

2397
03:10:54,660 --> 03:10:57,400
closed faster because they were able to,

2398
03:10:57,480 --> 03:10:58,720
they could meet the readiness deadline

2399
03:10:58,720 --> 03:11:02,640
because lots of additional funding was infused into those.

2400
03:11:02,800 --> 03:11:04,240
All of that is evaporated.

2401
03:11:04,960 --> 03:11:10,400
And so here we are with very little funds to chase to fill these gaps.

2402
03:11:16,040 --> 03:11:17,200
Thank you, Miss Album.

2403
03:11:24,940 --> 03:11:25,940
Hi, Catherine Sarr.

2404
03:11:27,480 --> 03:11:28,700
Chair of the QAB committee.

2405
03:11:29,180 --> 03:11:34,180
I just wanted to kind of wrap up the taps comment on this particular scoring item.

2406
03:11:35,260 --> 03:11:43,460
So, you know, we've heard a lot about how 9% program has historically been a very streamlined process.

2407
03:11:43,460 --> 03:11:49,580
It has a very simple execution because it doesn't have a lot of soft funding or additional

2408
03:11:49,580 --> 03:11:54,720
partners, tax exemptions, all of these things that increase our timelines.

2409
03:11:56,160 --> 03:12:01,940
In this inflationary environment that we've been in for the last several years, we've

2410
03:12:01,940 --> 03:12:07,900
had to adapt and bring in all of these extra things and it does increase our timelines and

2411
03:12:07,900 --> 03:12:12,280
you can see that in the levels of force measure requests that you've been seeing over

2412
03:12:12,280 --> 03:12:19,020
the last several months, and frankly, for the last several years, I think that this scoring

2413
03:12:19,020 --> 03:12:28,880
item will perpetuate that timeline unless this board says no. If you start denying these

2414
03:12:28,880 --> 03:12:34,800
things, as Emily said, those units don't get developed, because you're going to go to the next

2415
03:12:34,800 --> 03:12:39,760
deal in line, which is going to have the exact same problem, and then you're going to have to take

2416
03:12:39,760 --> 03:12:46,780
credits back again and reallocate them, and this scoring item helps perpetuate that extended

2417
03:12:46,780 --> 03:12:47,620
time period.

2418
03:12:49,900 --> 03:12:56,040
It incentivizes us going and getting tax exemptions, which I know is not something

2419
03:12:56,040 --> 03:13:01,860
that we want to be doing for a program that has historically been able to sustain itself.

2420
03:13:03,700 --> 03:13:08,740
You know, TTHCA's underwriting box for these developments is very, very small, which is

2421
03:13:08,740 --> 03:13:16,200
why we only have the ability to size the units kind of up front, and we have to size our

2422
03:13:16,200 --> 03:13:23,620
debt within a 115 to a 135 DCR, that's a really small box, and when insurance increases

2423
03:13:23,620 --> 03:13:32,200
dramatically, then we're way upside down, and the only option we have is to go seek a

2424
03:13:32,200 --> 03:13:51,160
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.

2425
03:13:51,160 --> 03:13:59,240
without over extending these deals to where they're just not financially viable anymore.

2426
03:13:59,980 --> 03:14:04,380
Last year we went to the governor's office with a two and a half and five percent.

2427
03:14:05,400 --> 03:14:08,960
Benchmark request and now we've come up to four and six percent.

2428
03:14:09,500 --> 03:14:17,200
I just don't think there's a lot more room to go up in this environment where we have decreasing equity pricing.

2429
03:14:17,200 --> 03:14:24,840
So the energy credits that are in the market today are eating up all of the capacity that investors

2430
03:14:24,840 --> 03:14:27,080
have for tax credits.

2431
03:14:27,400 --> 03:14:32,480
So it's putting deflationary pressure on light tech credit pricing.

2432
03:14:34,780 --> 03:14:41,960
So again we request that the 4 and 6% is what you adopt and we thank you very much for all

2433
03:14:41,960 --> 03:14:48,080
your work on the QAP. Again, we're very happy with where it is, but for this item. Thank you.

2434
03:14:48,400 --> 03:14:53,640
Did you get together and hang on? Okay. So, I mean, I'm assuming you're kind of wrapping up the groups.

2435
03:14:54,420 --> 03:14:59,980
That's that's the efficient half comment. All right. One thing I want everyone to just think about.

2436
03:15:00,000 --> 03:15:12,280
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.

2437
03:15:13,320 --> 03:15:13,560
A great.

2438
03:15:13,900 --> 03:15:28,300
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.

2439
03:15:28,300 --> 03:15:36,140
So, those weren't approved to once today fit into a certain criteria that make that hurdle.

2440
03:15:38,670 --> 03:15:48,360
What I'm now going more directly to the percentages that we're asking to increase,

2441
03:15:50,710 --> 03:16:00,080
reading between the lines, I'm hearing that the responsible developers won't overstep and try to take a bigger bite,

2442
03:16:00,080 --> 03:16:01,740
they won't reach these higher percentages

2443
03:16:02,400 --> 03:16:06,500
to try to get the points and then later come back.

2444
03:16:07,920 --> 03:16:09,020
So you're saying that,

2445
03:16:09,080 --> 03:16:11,360
because everyone was on the same plane field in this, right?

2446
03:16:11,420 --> 03:16:13,760
I mean, all the applicants are gonna have

2447
03:16:13,760 --> 03:16:15,820
to, they're being scored on the same criteria.

2448
03:16:16,640 --> 03:16:16,880
That's over.

2449
03:16:16,880 --> 03:16:20,000
If some of them have more equity in their deals

2450
03:16:20,540 --> 03:16:25,680
and are able to increase, get that 9% or 18%.

2451
03:16:27,580 --> 03:16:31,980
they can they'll get they'll get the points you're well I'm hearing y'all say is that

2452
03:16:31,980 --> 03:16:37,340
there's going to be groups that say oh I'm not going to win the award if I don't

2453
03:16:37,340 --> 03:16:41,800
stretch even though I know I can't afford it because I don't have enough equity

2454
03:16:41,800 --> 03:16:47,520
in the deal or other sources and things so is that really the internal debate that

2455
03:16:48,240 --> 03:16:52,560
y'all are saying well some of these guys are going to go ahead and go for the points

2456
03:16:52,560 --> 03:16:59,020
yes. Do you know that they can't have a viable deal? Yeah and I think you're starting to see some of

2457
03:16:59,020 --> 03:17:05,940
those credits come back because the unit counts are not achievable. I'm obviously not going to

2458
03:17:05,940 --> 03:17:15,780
name names but I know of specific deals that are very much underwater and are trying

2459
03:17:15,780 --> 03:17:44,760
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.

2460
03:17:44,760 --> 03:18:00,920
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.

2461
03:18:01,620 --> 03:18:04,880
And I think maybe Sally can speak to this.

2462
03:18:05,700 --> 03:18:12,400
We ran through the list and looked at how many of the applicants took the points.

2463
03:18:13,120 --> 03:18:19,280
And in the vast majority of the regions, you pretty much had to take the point to get the

2464
03:18:19,280 --> 03:18:19,880
award.

2465
03:18:25,560 --> 03:18:29,660
Mr. Kelly, would you like to touch on it just a couple of things, Chair?

2466
03:18:31,340 --> 03:18:32,840
Catherine and I are for the record.

2467
03:18:32,920 --> 03:18:35,940
Nathan Kelly with Blazer and President of the tap.

2468
03:18:36,060 --> 03:18:37,160
We're competitors, right?

2469
03:18:37,160 --> 03:18:40,980
at the end of the day, and this is a competitive process.

2470
03:18:41,580 --> 03:18:45,680
We both feel like we can go to the city of Houston or any other municipality in which we're

2471
03:18:45,680 --> 03:18:49,540
working and win those soft dollars, but ultimately those soft dollars are limited.

2472
03:18:50,300 --> 03:18:55,340
And so we are going to elect to take those points and then go try to work our soft dollars,

2473
03:18:55,460 --> 03:18:57,520
but that's not going to be the case for every deal.

2474
03:18:58,760 --> 03:19:03,060
I was privileged to be invited to testify in front of the local government committee this

2475
03:19:03,060 --> 03:19:09,340
morning, and the comptroller walks through the report that they published in August, and

2476
03:19:09,340 --> 03:19:13,360
ultimately, you know, a lot of this question that was had was focused on supply.

2477
03:19:13,620 --> 03:19:14,800
Supply is the issue.

2478
03:19:15,560 --> 03:19:19,580
And speeding units to the market is the way that we solve the supply issue.

2479
03:19:20,200 --> 03:19:27,200
As has been noted, this particular point scoring item slows our ability to get supply to

2480
03:19:27,200 --> 03:19:27,660
the market.

2481
03:19:27,660 --> 03:19:37,480
We have to complicate the transactions through the partnership structures that have historically not been a part of the 9% program.

2482
03:19:38,060 --> 03:19:43,980
We have to seek soft dollars that have historically been reserved for the 4% program, not the 9% program.

2483
03:19:44,620 --> 03:19:56,180
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.

2484
03:19:56,180 --> 03:19:58,520
to your point, y'all weren't allocating any more dollars.

2485
03:19:58,700 --> 03:20:01,360
You were allocating time to the forced media request that we're here today.

2486
03:20:01,620 --> 03:20:02,740
But that's the issue, right?

2487
03:20:02,820 --> 03:20:05,320
That additional time to deliver those units,

2488
03:20:05,880 --> 03:20:11,520
ultimately is what continues to compound our affordability problem and supply problem.

2489
03:20:11,900 --> 03:20:16,000
And so what we are trying to work towards is a metal ground that gets us

2490
03:20:16,000 --> 03:20:19,320
to delivering those units as we've promised,

2491
03:20:20,080 --> 03:20:23,440
uh, under a structure that has historically been efficient,

2492
03:20:23,440 --> 03:20:30,780
And that we feel like works for everybody at the end of the day.

2493
03:20:32,260 --> 03:20:36,620
And in Texas, we allocate our credit six months into the year.

2494
03:20:37,500 --> 03:20:46,600
In other states, they're allocating their $25 in 24 so that they have the full two years for purposes of place and service.

2495
03:20:46,600 --> 03:20:53,360
We don't do that in Texas because of statutory reasons, that's not something that you all can change.

2496
03:20:55,060 --> 03:21:02,720
But we, you know, it does eat into that time and that's why it's been so necessary in the past

2497
03:21:02,720 --> 03:21:09,240
that nine percent tax credits be quickly deployable and not have these complicated structures.

2498
03:21:10,320 --> 03:21:19,880
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.

2499
03:21:21,060 --> 03:21:29,800
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.

2500
03:21:30,540 --> 03:21:35,560
These tools have long been used to finance housing tax credit finance communities, and rightly so.

2501
03:21:35,560 --> 03:21:41,520
But they've largely not been used to finance 9% housing tax credit deals.

2502
03:21:42,260 --> 03:21:48,800
And so I would love not to complicate the issue from a political perspective by adding

2503
03:21:48,800 --> 03:21:56,380
on additional deals, claiming tax exemptions that are ultimately going to raise the

2504
03:21:56,380 --> 03:22:03,100
hair of smaller municipalities and give them another incentive not to support the development

2505
03:22:03,100 --> 03:22:05,860
of affordable housing using the 9% housing tax credit.

2506
03:22:07,160 --> 03:22:12,620
So Mr. Blazer, would you be interested in... I'm just going to throw this out here.

2507
03:22:12,780 --> 03:22:15,000
Let's say magically this went away.

2508
03:22:16,220 --> 03:22:18,560
Before the six, the 10, the 25, it's all gone.

2509
03:22:20,040 --> 03:22:25,560
When I look up here and I'm sitting all these applications and I see non-taxable assets

2510
03:22:25,560 --> 03:22:29,560
because we put it in the housing development in there, that's not the best for those cities

2511
03:22:30,000 --> 03:22:52,820
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.

2512
03:22:55,450 --> 03:23:01,890
Like I noted, 9% housing tax credit program has largely produced taxable assets in its history.

2513
03:23:03,130 --> 03:23:09,550
And if this scoring item, the removal of this scoring item gets us back to a framework wherein

2514
03:23:09,550 --> 03:23:13,230
we're not having to request tax exemptions on 9% housing tax rate for these communities,

2515
03:23:13,430 --> 03:23:14,730
I think that would be fantastic.

2516
03:23:15,350 --> 03:23:20,150
Do I think there needs to be a penalty associated with claiming exemption?

2517
03:23:20,150 --> 03:23:26,530
No, I mean ultimately a developer has to come back before you all all right with the partnership structure

2518
03:23:26,530 --> 03:23:30,520
Yeah, which in order to get that amendment if you if you did not take it's off money inside that

2519
03:23:31,550 --> 03:23:31,730
No

2520
03:23:31,730 --> 03:23:32,770
We

2521
03:23:32,770 --> 03:23:34,010
Self money

2522
03:23:34,750 --> 03:23:36,870
Is available to

2523
03:23:36,870 --> 03:23:45,560
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

2524
03:23:46,880 --> 03:23:57,620
Unfortunately, you know, I don't know that there's a way to regularly mandate, bringing clean capital stacks to you in an application.

2525
03:23:57,940 --> 03:24:15,160
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,

2526
03:24:15,160 --> 03:24:18,040
to invest money in in order to see housing go somewhere.

2527
03:24:18,940 --> 03:24:26,720
And to that point, sorry, if we, if we didn't have these arbitrary unit counts that we

2528
03:24:26,720 --> 03:24:31,840
are trying to get, we could bring you clean capital stocks that didn't have these complicated

2529
03:24:31,840 --> 03:24:36,540
tax exemptions or lots of different layers of soft funding.

2530
03:24:36,860 --> 03:24:44,500
If we could size the deal up front based on the available capital we have, then we wouldn't

2531
03:24:44,500 --> 03:24:47,520
need to go out and seek all of these other things after the fact.

2532
03:24:49,220 --> 03:24:49,560
Thank you.

2533
03:24:50,240 --> 03:24:51,040
This is part of it.

2534
03:24:51,100 --> 03:25:03,020
I think that along the lines of what he's talking about, would you be, would you not, I, I do not want this,

2535
03:25:03,020 --> 03:25:07,240
these tax, these little taxes lost.

2536
03:25:08,000 --> 03:25:22,250
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.

2537
03:25:23,710 --> 03:25:32,470
Well, in exchange for, not having, as you call unrealistic, unit demands.

2538
03:25:34,890 --> 03:25:39,310
Yeah, ultimately, it's a function of how much debt the NLI on the properties create, correct?

2539
03:25:39,870 --> 03:25:44,030
So, if you're paying taxes, you have lower NLI, which means you can support less debt.

2540
03:25:44,110 --> 03:25:48,070
If you have zero taxes, you can greater NLI, you support more debt.

2541
03:25:48,330 --> 03:25:50,930
That balances that capital stack.

2542
03:25:51,890 --> 03:25:57,930
But what I think I hear you saying is, we don't want the loss of tax revenue.

2543
03:25:58,050 --> 03:26:03,210
Ultimately, I would argue that's up to the municipality to decide whether or not they want to give up that tax revenue

2544
03:26:03,210 --> 03:26:05,950
in the support of developing housing.

2545
03:26:06,010 --> 03:26:14,710
It is in a perfect world, in a world where we're setting the criteria for the point for the scoring.

2546
03:26:15,470 --> 03:26:24,850
I don't think it's illegal for us to have a criteria for scoring that protects the tax base.

2547
03:26:25,970 --> 03:26:38,230
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.

2548
03:26:39,270 --> 03:26:46,830
So in reality, we don't need a point incentive to produce the maximum number of units that our capital stock can provide.

2549
03:26:46,830 --> 03:26:53,070
we as developers want larger developments because they're more efficient to run.

2550
03:26:53,770 --> 03:26:55,410
They carry higher debt levels.

2551
03:26:55,930 --> 03:27:01,430
They're just just better overall financially when you have more units that produce revenue.

2552
03:27:02,610 --> 03:27:11,670
So having a point incentive doesn't really produce the units that you're looking for.

2553
03:27:11,670 --> 03:27:20,750
It creates an artificial lower limit on what you're awarding credits for, and what we're

2554
03:27:20,750 --> 03:27:26,950
saying is that that limit is too high, that floor is too high in today's economic

2555
03:27:26,950 --> 03:27:27,470
environment.

2556
03:27:28,490 --> 03:27:36,970
Yeah, ultimately we're going to size the unit count on the affordable side in a way that

2557
03:27:36,970 --> 03:27:40,750
gets us to the credit allocation amount that makes the math work.

2558
03:27:42,750 --> 03:27:46,630
So that means we have to push more affordable units into the deal.

2559
03:27:46,890 --> 03:27:52,210
But to a point, because once that math is allocating more affordable units,

2560
03:27:52,390 --> 03:27:57,130
as a point structure currently requires, that isn't generating credits,

2561
03:27:57,810 --> 03:28:01,490
then you're paying for those with debt.

2562
03:28:02,350 --> 03:28:05,750
And the income generated from those units that aren't supported by credits

2563
03:28:05,750 --> 03:28:11,830
is not sufficient enough to pay for the debt that you're having to take out to finance them.

2564
03:28:14,740 --> 03:28:16,620
I understand you're argument.

2565
03:28:17,840 --> 03:28:22,600
In this much, if you're thinking about introducing a point incentive to remain taxable,

2566
03:28:23,080 --> 03:28:26,540
I think that would be kind of outside of the lines of what we could do now,

2567
03:28:27,700 --> 03:28:31,940
as it went out for formal comment, but we can explore that for next round for sure.

2568
03:28:32,080 --> 03:28:35,640
Well, I mean, that would be an exchange for you doing a way.

2569
03:28:35,640 --> 03:28:41,300
Well, we couldn't, yeah, I was just going to kind of explain my thought process.

2570
03:28:41,920 --> 03:28:50,840
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.

2571
03:28:51,240 --> 03:28:58,820
And if that's something that the state wants to incentivize, we, we don't have a problem with that necessarily.

2572
03:28:59,240 --> 03:29:04,460
It's just, we have to do it in a way that creates financially viable developments.

2573
03:29:04,460 --> 03:29:08,140
I'm just speaking myself, I

2574
03:29:10,730 --> 03:29:14,550
should, I'm hot. Look at that, he's so good.

2575
03:29:15,910 --> 03:29:20,530
I can do it. I can do it. We put a carrot there to incentivize taxable stuff. Something's got to pay for

2576
03:29:20,530 --> 03:29:23,550
a police, all those things to do that, right?

2577
03:29:24,930 --> 03:29:36,020
And we've already taken Fed dollars to make this work and it seems that it seems like we

2578
03:29:36,020 --> 03:29:40,060
that are allocated in 2025 to not have to bring you force

2579
03:29:40,060 --> 03:29:42,280
for sure requests, largely, right?

2580
03:29:42,460 --> 03:29:46,560
And in reality, that may mean that they get started faster

2581
03:29:46,560 --> 03:29:48,140
than some of the 2024 days.

2582
03:29:48,420 --> 03:29:49,720
Now, hopefully that's not the case.

2583
03:29:50,520 --> 03:29:54,660
But in a perfect world, we can take the allocations in July

2584
03:29:54,660 --> 03:29:57,440
of next year and be closing those deals

2585
03:29:57,440 --> 03:29:59,500
in accordance with the readiness to proceed guidelines.

2586
03:29:59,500 --> 03:29:59,740
Thanks.

2587
03:30:01,940 --> 03:30:31,050
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?

2588
03:30:31,050 --> 03:30:33,770
We always do that in part, right?

2589
03:30:33,910 --> 03:30:38,950
I mean, we put together budgets on very preliminary drawings with interest rate assumptions

2590
03:30:38,950 --> 03:30:43,130
that are 12 months in advance of when the deal is actually going to close and what that

2591
03:30:43,130 --> 03:30:45,090
means for equity pricing and everything else.

2592
03:30:45,190 --> 03:30:48,990
I mean, each one of these has a significant amount of assumptions that goes into it as

2593
03:30:48,990 --> 03:30:54,230
and that being soft dollars that aren't committed at that time, that application submitted

2594
03:30:54,230 --> 03:30:54,950
ultimately, right?

2595
03:30:55,150 --> 03:31:00,390
And so we have to compete for the credits, but we also have to compete for those other aspects

2596
03:31:00,390 --> 03:31:02,170
to the deal with the soft funding and whatever else.

2597
03:31:02,750 --> 03:31:04,970
If, if that's the case, but to your question,

2598
03:31:05,630 --> 03:31:07,530
yes, everybody's going to elect those two points,

2599
03:31:07,590 --> 03:31:09,610
because if they don't, they have no shot.

2600
03:31:09,910 --> 03:31:11,450
You're saying they're already doing it, though.

2601
03:31:12,010 --> 03:31:14,330
Yeah, I mean, I am saying that for this.

2602
03:31:14,330 --> 03:31:16,530
I'm 100% saying they'll make it worse.

2603
03:31:16,790 --> 03:31:17,090
It's amazing.

2604
03:31:17,490 --> 03:31:17,710
Yes.

2605
03:31:17,930 --> 03:31:20,130
It's going to continue what's happening now.

2606
03:31:20,450 --> 03:31:26,390
OK, the force measures that this board

2607
03:31:26,390 --> 03:31:31,770
been granting over time, recognizes that

2608
03:31:34,170 --> 03:31:40,690
the federal economic policies and the COVID, you know,

2609
03:31:41,050 --> 03:31:49,900
although all they truly unexpected, you universally, you know, problems weigh unforeseen

2610
03:31:49,900 --> 03:31:56,580
from forward developers. 100 percent. We recognize, I'm going to ask private business people,

2611
03:31:56,580 --> 03:32:01,900
we recognize. What the heck happened with these insurance costs tripling out? That's

2612
03:32:01,900 --> 03:32:02,760
the type of thing.

2613
03:32:06,630 --> 03:32:07,530
Going forward,

2614
03:32:10,120 --> 03:32:17,540
I don't think any of us really expect these unexpected

2615
03:32:17,540 --> 03:32:23,100
shocks to the system that may be coming up. We're not going to have rampant inflation

2616
03:32:23,100 --> 03:32:28,520
that interest rates aren't going to go sky high to the contrary, the regulatory environment

2617
03:32:28,520 --> 03:32:34,420
and business supply chain environment should actually lower, we should be seeing lower costs

2618
03:32:34,420 --> 03:32:37,920
in the near future, we should be seeing lower interest rates in the near future.

2619
03:32:40,650 --> 03:32:41,170
That should make

2620
03:32:41,170 --> 03:32:49,450
these financing stacks easier to obtain. Now, we'll not have the big Arpo type of value huge.

2621
03:32:49,690 --> 03:32:55,750
Right. There's still downward pressure on equity pricing right now because the equity market is over

2622
03:32:55,750 --> 03:32:56,430
That's correct.

2623
03:32:57,150 --> 03:33:06,750
Well, yeah, that aside, ultimately, like I said, those units are going to cost more than

2624
03:33:06,750 --> 03:33:11,670
what the debt is going to be able to fund, because of the income restrictions associated

2625
03:33:11,670 --> 03:33:12,970
with those extra units.

2626
03:33:13,650 --> 03:33:18,850
And so that is going to require us to take a position of soft funding in that deal.

2627
03:33:19,750 --> 03:33:24,070
We've said there's a limited amount of that soft funding, but we've got to elect those points

2628
03:33:24,070 --> 03:33:24,790
in order to be competitive.

2629
03:33:24,790 --> 03:33:29,550
that we've got to assume that our deal is going to win that self-funded, but ultimately there's

2630
03:33:29,550 --> 03:33:30,730
limited dollars to go around.

2631
03:33:31,030 --> 03:33:35,690
Well, and part of the point I'm trying to make is that we recognize over these unexpected

2632
03:33:35,690 --> 03:33:39,490
huge shocks to the system, and that's not going to happen going forward.

2633
03:33:39,590 --> 03:33:48,350
It's not going to happen going forward, so our approving force measures that aren't based on those

2634
03:33:48,350 --> 03:33:49,570
the system,

2635
03:33:51,710 --> 03:33:57,510
is going to be, I expect much more stringent and much more, we're, yeah, we're

2636
03:33:57,510 --> 03:34:02,750
not going to prove a lot of things that we do to prove because today, and then when you come back,

2637
03:34:02,750 --> 03:34:06,110
and I would expect that we're not going to be, we're not going to be, we're not going to be.

2638
03:34:06,150 --> 03:34:11,970
I would expect this, I would expect that the force measure requests that may come out of the 24

2639
03:34:11,970 --> 03:34:19,030
around or come out of the 25 round assuming it stays as it is right now are going to be

2640
03:34:19,030 --> 03:34:22,850
related to a failure to obtain the soft money they thought they were going to get.

2641
03:34:23,150 --> 03:34:27,370
And those deals were going to die and the process of action we were going to use them

2642
03:34:27,370 --> 03:34:28,890
and try again the next year.

2643
03:34:28,990 --> 03:34:29,290
Understood.

2644
03:34:29,490 --> 03:34:32,570
I mean, that's, it's just, that's what ultimately, that's the delay of.

2645
03:34:32,570 --> 03:34:37,830
Varring in these applying shock down to the, and again, I think, I think I've said this

2646
03:34:37,830 --> 03:34:44,530
Therefore, if we don't have this artificially high unit count, I think that we're at the

2647
03:34:44,530 --> 03:34:46,470
tail end of all the force measure requests.

2648
03:34:46,830 --> 03:34:55,030
But if we continue to mandate an unsustainable level of units in a capital market that

2649
03:34:55,030 --> 03:34:59,670
is declining, we are going to continue to see the force measure requests.

2650
03:35:00,030 --> 03:35:02,670
You are, as a board, are 100% right.

2651
03:35:02,670 --> 03:35:07,470
you can deny them, but it does delay that supply getting into the market.

2652
03:35:07,970 --> 03:35:14,770
How is rent rates in the market and the oversupply of multi-family in the private market affecting you?

2653
03:35:15,130 --> 03:35:21,590
It's not. HUD dictates what our incomes are each year. This year in the Houston area that was flat.

2654
03:35:22,170 --> 03:35:28,010
So while my insurance premiums went up 15% my real estate tax valuation went up 15%.

2655
03:35:28,010 --> 03:35:29,190
My income's for flat.

2656
03:35:29,510 --> 03:35:32,250
My net income actually dropped because the city of Houston's

2657
03:35:32,250 --> 03:35:35,590
cost of water and sewer increased and we deduct that out of our rent.

2658
03:35:36,510 --> 03:35:40,410
So my income's are declining year over year on my existing portfolio of properties.

2659
03:35:42,030 --> 03:35:47,010
But that was, I was saying, you know, what I'm seeing in the market is the rent rates

2660
03:35:47,010 --> 03:35:49,710
are not accelerating as fast as the costs are coming through.

2661
03:35:49,990 --> 03:35:51,290
That's 100% true.

2662
03:35:51,450 --> 03:35:55,190
And I also believe that there's way too many that multi-family with private equity

2663
03:35:55,190 --> 03:35:59,190
and then they're built a ton of stuff, which is now in a street fight for

2664
03:35:59,890 --> 03:36:00,530
Bill Andores.

2665
03:36:00,850 --> 03:36:02,410
In the luxury space, yes, sir.

2666
03:36:02,650 --> 03:36:04,630
Yeah, thank you.

2667
03:36:04,910 --> 03:36:08,710
What if the incentive was for total units rather than affordable, meaning you could use

2668
03:36:08,710 --> 03:36:09,670
market rate units?

2669
03:36:09,810 --> 03:36:11,070
I think that would be better.

2670
03:36:12,710 --> 03:36:20,190
Yeah, ultimately, you know, I would love to get back to a time where our average project size was north of

2671
03:36:20,190 --> 03:36:27,190
country units and more, right? 125, but we were developing 170 unit communities where in

2672
03:36:27,710 --> 03:36:32,610
120 or 25 of those were affordable and the balance for market rate.

2673
03:36:32,870 --> 03:36:35,410
That's a more efficient property at the end of the day.

2674
03:36:35,710 --> 03:36:40,630
Now, I can tell you the economics of that time in 2016 and 2017 were dramatically different

2675
03:36:40,630 --> 03:36:43,050
than they were today, so that unit count is no longer available.

2676
03:36:43,050 --> 03:36:47,750
But if we could get to a mixed income framework,

2677
03:36:50,790 --> 03:36:56,250
that ultimately doesn't have a requirement

2678
03:36:56,250 --> 03:37:01,070
for affordable units that's getting us over what those actually producing credits, then

2679
03:37:01,070 --> 03:37:03,710
yes, that makes for a more efficient property at the end of the day.

2680
03:37:05,150 --> 03:37:17,210
It's German. What is what powers does the board have in the subject that is before us?

2681
03:37:17,810 --> 03:37:25,990
Is it an end of all? What actions are available to us today?

2682
03:37:26,550 --> 03:37:29,330
I believe at this point in the QAP.

2683
03:37:30,000 --> 03:37:40,900
Global process, since the concept is already in, baked into the, we could use our higher incentive numbers

2684
03:37:41,470 --> 03:37:51,960
that we proposed, or we could accept the industry's arguments and lower the percentage incentives.

2685
03:37:53,340 --> 03:37:58,580
And all of us that we do, it's up to the governor to approve, he could change it.

2686
03:37:59,020 --> 03:38:03,400
We could lower it to 4 and 6 and he could put it back to 15 and 25.

2687
03:38:03,960 --> 03:38:06,960
I mean, there's all kinds of ways on.

2688
03:38:08,020 --> 03:38:10,780
Or we could, I don't know if can we eliminate the concept altogether?

2689
03:38:11,260 --> 03:38:12,380
I mean, he could change it to zero.

2690
03:38:12,860 --> 03:38:15,260
Then, you know, so he could change the numbers around as much as you'd like.

2691
03:38:15,540 --> 03:38:20,400
We cannot introduce new concepts that weren't published for formal comment.

2692
03:38:23,730 --> 03:38:28,590
I think even changing it from affordable units to total units is a slight enough.

2693
03:38:28,590 --> 03:38:30,470
I was wondering about that.

2694
03:38:30,470 --> 03:38:32,090
I'm both, you know.

2695
03:38:32,530 --> 03:38:35,110
Give a legal opinion on the fly, whether it was watching.

2696
03:38:36,170 --> 03:38:37,350
Well, that's Quentin Barrett.

2697
03:38:37,430 --> 03:38:38,070
Yeah, there we go.

2698
03:38:38,470 --> 03:38:38,570
Okay.

2699
03:38:38,990 --> 03:38:41,990
So you've said that was too far.

2700
03:38:42,590 --> 03:38:45,850
No, I think he said that would be, you know, there's some grey area there.

2701
03:38:46,030 --> 03:38:49,590
So that would be a slight enough of a change.

2702
03:38:49,810 --> 03:38:52,990
It's not a totally brand new scoring category or anything.

2703
03:38:52,990 --> 03:39:22,430
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.

2704
03:39:22,430 --> 03:39:27,610
are the government to moderate those numbers when he he can moderate for

2705
03:39:27,610 --> 03:39:33,730
2025 you can change it for you know in the next few weeks for us it wouldn't be

2706
03:39:33,730 --> 03:39:38,410
until the 2026 good people once it once you vote today yeah it's there's no

2707
03:39:38,410 --> 03:39:45,620
additional amendments that we can make so we have a number now right

2708
03:39:45,620 --> 03:39:50,440
he won in the air I thought it was a place all there was his nine in 18

2709
03:39:50,440 --> 03:39:53,260
No, I mean, in the QAP, that's 24.

2710
03:39:53,380 --> 03:39:56,580
The current one, it's, yeah, it's 10% and 20%.

2711
03:39:56,580 --> 03:40:01,860
Yeah, and how many, do we know how many applications

2712
03:40:01,860 --> 03:40:02,720
took those points?

2713
03:40:02,720 --> 03:40:03,660
Two points.

2714
03:40:05,540 --> 03:40:06,400
Functionally all of us.

2715
03:40:06,400 --> 03:40:07,680
Sally has this information.

2716
03:40:11,150 --> 03:40:12,950
If you were lucky enough to be in a sub region with the competitor,

2717
03:40:13,150 --> 03:40:14,790
you would not have to, you know, that might happen.

2718
03:40:14,890 --> 03:40:15,710
That's exactly right.

2719
03:40:16,010 --> 03:40:17,470
Sally Barge, it was starts for development.

2720
03:40:18,310 --> 03:40:20,390
Yes, so Catherine asked me to look into those numbers.

2721
03:40:21,350 --> 03:40:23,810
And there were about seven different categories,

2722
03:40:23,810 --> 03:40:32,470
but in summary, all the ones in pole position, or didn't have any competition, the ones in

2723
03:40:32,470 --> 03:40:37,950
pole position took the points, and there was one region, three are, were neither took the

2724
03:40:37,950 --> 03:40:44,110
points, there were two applications, but that was known at pre-app, and then so there's

2725
03:40:44,110 --> 03:40:51,230
one deal in six you that did not take the points that is at the bottom out of the money.

2726
03:40:51,230 --> 03:40:57,130
So, and basically, everybody, but one took this one category.

2727
03:40:58,130 --> 03:41:01,070
And while I'm hearing you say, they have no idea how they're going to fund their capital

2728
03:41:01,070 --> 03:41:01,570
sector.

2729
03:41:02,670 --> 03:41:09,510
I don't have a dog at that hunt, so, but I would assume that there are deals out there that

2730
03:41:09,510 --> 03:41:14,430
did not have a commitment of that soft funding at the time of application, and they city

2731
03:41:14,430 --> 03:41:17,910
of Houston, for instance, put forward a no-for that folks were applying for.

2732
03:41:18,030 --> 03:41:18,950
Some will get it.

2733
03:41:18,950 --> 03:41:25,170
will not. And so I believe the deadline for that submission was last month. I don't know that

2734
03:41:25,170 --> 03:41:30,270
they've made formal awards, but they're getting close. So you'll know soon enough.

2735
03:41:30,810 --> 03:41:38,750
And the other thing was anyone that had soft funds as part of their initial application to TTHCA,

2736
03:41:38,770 --> 03:41:45,190
you included a condition in your underwriting report that those soft funds a commitment for those

2737
03:41:45,190 --> 03:41:52,450
was due on November 1st with their carryover, that date just passed. I don't think that we know

2738
03:41:52,450 --> 03:42:01,030
how many of those people came in with the soft funds and how many did not. So I know I had asked

2739
03:42:01,030 --> 03:42:04,310
Cody that, but he said that they were still gathering that information since it was just last

2740
03:42:12,140 --> 03:42:21,520
So just let me bounce a concept off of you, raising the total number of toll units,

2741
03:42:25,440 --> 03:42:27,140
making the number 5 can.

2742
03:42:32,060 --> 03:42:36,640
So I think the language says low income units now, so it would be a simple strike of that, right?

2743
03:42:37,040 --> 03:42:38,440
And then that's just in the percentage.

2744
03:42:38,440 --> 03:42:39,100
Just asking.

2745
03:42:39,280 --> 03:42:40,900
Yeah, I believe that's what we're proposing.

2746
03:42:41,300 --> 03:42:44,700
Go to 5 and 10 and make it total units rather than just affordable units.

2747
03:42:45,020 --> 03:42:48,140
I think that's much more tentable than what we have now.

2748
03:42:48,140 --> 03:42:51,100
But that's just an idea.

2749
03:42:51,580 --> 03:42:55,380
One out five and ten on affordable units.

2750
03:42:56,100 --> 03:42:58,140
Not to have any opposition to that.

2751
03:42:58,260 --> 03:43:00,180
Just right now it's ten and twenty.

2752
03:43:00,700 --> 03:43:01,460
Nine and eight.

2753
03:43:02,020 --> 03:43:02,560
Yeah.

2754
03:43:02,740 --> 03:43:04,520
The key was published with nine and eight.

2755
03:43:04,900 --> 03:43:05,000
Yes.

2756
03:43:06,580 --> 03:43:09,500
And then we'll just experience next year.

2757
03:43:10,080 --> 03:43:16,280
I wouldn't have any objection to going forward to five and ten.

2758
03:43:16,280 --> 03:43:17,420
Five and ten.

2759
03:43:18,320 --> 03:43:26,880
affordable, yeah. It's not not totally. So it's 10% number is still going to be quite high in a lot of places.

2760
03:43:28,080 --> 03:43:31,680
And not to close up. Everyone's on that's playing with those same rules.

2761
03:43:32,140 --> 03:43:38,200
They are, but, you know, they are also as Emily said, we're all optimists.

2762
03:43:39,100 --> 03:43:42,720
We get the credits and then figure it out.

2763
03:43:43,420 --> 03:43:51,020
I'll be happy to vote on this as it's proposed, but I think about Cory, if we don't take that.

2764
03:43:51,480 --> 03:43:58,460
I mean, I would, if it were total units, I would argue you could stick with your original percentages.

2765
03:43:59,420 --> 03:43:59,500
Right.

2766
03:44:01,640 --> 03:44:06,820
Apparently the community doesn't agree with you, but nobody wants to do 100 and whatever unit deals these days.

2767
03:44:07,640 --> 03:44:08,880
Somebody said get a rope.

2768
03:44:08,880 --> 03:44:13,400
Yeah, I'll do that personally, but I'm not speaking on behalf of Depp.

2769
03:44:13,680 --> 03:44:15,920
All right, I'll do that personally,

2770
03:44:18,900 --> 03:44:18,900
but I'm not speaking on behalf of Depp.

2771
03:44:18,900 --> 03:44:22,520
We need to start moving this.

2772
03:44:27,920 --> 03:44:34,380
I think a reasonable compromise would be to go to the five and ten is supposed to

2773
03:44:34,380 --> 03:44:35,200
in 18,

2774
03:44:37,840 --> 03:44:38,760
affordable, affordable, affordable.

2775
03:44:41,250 --> 03:44:44,570
Does any board member have any objections to that or

2776
03:44:44,570 --> 03:44:45,150
they?

2777
03:44:50,900 --> 03:44:51,520
Sure, sure, good.

2778
03:44:57,220 --> 03:44:59,980
Most of Campbell are the argument from the tap in there.

2779
03:45:00,020 --> 03:45:21,200
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.

2780
03:45:25,070 --> 03:45:31,270
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.

2781
03:45:31,270 --> 03:45:37,890
And I had this printed out, and it is conveniently on my desk in the office, so I was

2782
03:45:37,890 --> 03:45:40,710
frantically calculating things on my phone and scribbling them down.

2783
03:45:40,890 --> 03:45:47,510
Just to give you an example, in what's a good region, region 7, let's use Austin as an example.

2784
03:45:47,950 --> 03:45:50,470
Our baseline average is 86.7 units.

2785
03:45:50,930 --> 03:45:54,270
The existing 20% threshold put to it 102 units.

2786
03:45:55,150 --> 03:46:00,030
The 18% threshold put to it 100, so it's a reduction of about 2 units, not super meaningful.

2787
03:46:01,110 --> 03:46:10,430
6% brings us down to 92 units. So it's a pretty big dip. That being said it is higher

2788
03:46:10,430 --> 03:46:14,250
than the average, which when we initially discussed this item was staff's concern was

2789
03:46:14,250 --> 03:46:20,290
how do we catch this falling knife and terrible analogy? But how do we catch the number and

2790
03:46:20,290 --> 03:46:24,410
keep it from dropping further? And so from staff's perspective as long as we continue to increase

2791
03:46:24,410 --> 03:46:28,090
above those really, really low numbers that we saw in the pandemic, I think that we've achieved

2792
03:46:28,090 --> 03:46:32,490
the goal that we were trying to hit, and so 4 and 6% does get us there and if the industry

2793
03:46:32,490 --> 03:46:35,830
is representing that they can do that without having to ask for a ton of force measures

2794
03:46:35,830 --> 03:46:40,850
and having to get all these tax exemptions at this F level. I think we could get comfortable

2795
03:46:40,850 --> 03:46:41,630
with that.

2796
03:46:44,700 --> 03:46:49,320
And then what do you think the effect would be on 5 and 10 versus 4 and 6? 5 and 10

2797
03:46:49,320 --> 03:46:58,120
including market rate units or just a low income. Just affordable? Just affordable? That would not

2798
03:46:58,120 --> 03:47:08,120
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.

2799
03:47:08,840 --> 03:47:10,500
Makes me feel good so.

2800
03:47:10,940 --> 03:47:17,700
And then in the next QAP when we do this, and I'm sorry, Mr. Summer, I just couldn't make the travels.

2801
03:47:18,260 --> 03:47:27,700
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.

2802
03:47:28,520 --> 03:47:34,640
And it puts weird structures together, which I know what they're doing to get that accomplished.

2803
03:47:36,780 --> 03:47:37,440
Thank you, sir.

2804
03:47:42,550 --> 03:47:43,610
We have a motion ready.

2805
03:47:44,370 --> 03:47:44,990
Well, okay.

2806
03:47:46,350 --> 03:47:52,670
If we have to be further comment on other things on the KAP and then in the end, someone will make a motion,

2807
03:47:53,530 --> 03:47:58,610
mentioning this 5 and 10 percent of what we'll change, and any other possible change that we might.

2808
03:48:00,530 --> 03:48:07,590
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

2809
03:48:07,590 --> 03:48:10,970
8 and 20 or 8 and 18, 9 and 18.

2810
03:48:13,950 --> 03:48:16,550
I think when we make an ultimate motion

2811
03:48:17,790 --> 03:48:19,770
We're gonna go with the 5 and

2812
03:48:19,770 --> 03:48:22,150
5 and 10, affordable, I

2813
03:48:25,800 --> 03:48:31,880
don't see any objections, some of them jumping up and down from the board who has a boat

2814
03:48:35,140 --> 03:48:41,080
Okay, let's move to the next topic, which was, let's all blur it out.

2815
03:48:41,660 --> 03:48:49,100
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.

2816
03:48:54,650 --> 03:48:56,190
Probably back in there.

2817
03:48:58,580 --> 03:49:04,000
Probably my or with rural housing, and I don't think this fine and are going to fight over this, hopefully.

2818
03:49:05,680 --> 03:49:14,800
I do want to appreciate staff's recommendations in the QAP of allowing us to hopefully clarify

2819
03:49:14,800 --> 03:49:18,360
all of this in legislation this next round.

2820
03:49:19,160 --> 03:49:20,740
I do have two things.

2821
03:49:21,640 --> 03:49:24,060
You did put it in there that, you know, pick a horse.

2822
03:49:24,480 --> 03:49:26,320
I'm fine with that.

2823
03:49:26,320 --> 03:49:27,980
I can live with that language.

2824
03:49:27,980 --> 03:49:33,000
One thing with picking a horse, if you do have a USDA finance

2825
03:49:33,000 --> 03:49:40,760
application that chooses to compete in at-risk, I do ask that in the application they

2826
03:49:40,760 --> 03:49:45,420
be able to identify themselves as a USDA application for all the other

2827
03:49:45,420 --> 03:49:54,460
entities, or items in the QAP that have exemption purposes, so that's really that

2828
03:49:55,860 --> 03:50:04,420
And Ms. Fine and I actually talked about this yesterday on the elimination of USDA getting

2829
03:50:04,420 --> 03:50:11,240
the second bite at the apple. If they are eligible for at risk and I'm not talking

2830
03:50:11,240 --> 03:50:18,820
competing purposes. But before at risk, if everything is already awarded, if there is funds

2831
03:50:18,820 --> 03:50:26,460
left over in at risk, it's a very limited resource for preservation activities. And if you have

2832
03:50:26,460 --> 03:50:34,620
a USDA application that still is eligible for at risk, we would ask that you allow them

2833
03:50:34,620 --> 03:50:41,040
to use up that resource before you sweep it in to statewide collapse. Because it is a very

2834
03:50:41,040 --> 03:50:46,800
limited resource for preservation activities. Everything else would be awarded, but if there

2835
03:50:46,800 --> 03:50:50,960
is a USDA application that does fit in that category,

2836
03:50:51,700 --> 03:50:55,040
allow it to be used at the end of the day

2837
03:50:55,040 --> 03:50:57,580
after all the other at risk applications have been awarded.

2838
03:50:58,880 --> 03:51:01,080
And I think Ms. Fine agrees with that.

2839
03:51:02,000 --> 03:51:03,800
But I'll let her acquiesce to it.

2840
03:51:03,980 --> 03:51:04,920
I thank you.

2841
03:51:05,140 --> 03:51:05,820
Thank you, Robbie.

2842
03:51:10,390 --> 03:51:12,770
Does anybody else want to know?

2843
03:51:15,100 --> 03:51:16,620
Well, get well.

2844
03:51:20,370 --> 03:51:22,490
Hi, Tim Smith with Hope Development Services.

2845
03:51:22,490 --> 03:51:26,570
I'll just do kind of ditto of what Robby said.

2846
03:51:26,730 --> 03:51:30,450
We just to back up that to ensure that after all of the

2847
03:51:30,450 --> 03:51:33,970
yet risk developments have been funded that, you know,

2848
03:51:34,030 --> 03:51:37,930
per statute, USDA is a part of that that money goes to any

2849
03:51:38,650 --> 03:51:43,310
unfunded USDA deals above the 5% on the sweep and then

2850
03:51:43,310 --> 03:51:47,130
just a confirmation from Cody that USDA deals that are

2851
03:51:47,130 --> 03:51:51,190
competing in the at risk set aside will be treated with the

2852
03:51:51,190 --> 03:51:55,010
in the view of the rules with the special treatment that U.S.D.D.

2853
03:51:55,010 --> 03:51:57,210
deals are for underwriting other things.

2854
03:52:02,270 --> 03:52:02,550
That's it.

2855
03:52:03,730 --> 03:52:05,750
So, so far, this is how we have the right people.

2856
03:52:05,950 --> 03:52:06,150
What's this?

2857
03:52:08,070 --> 03:52:11,010
Uh, Tracy's International Church Residence says just going

2858
03:52:11,010 --> 03:52:15,330
to come in on the treating of the U.S.D.A. deals differently

2859
03:52:16,490 --> 03:52:17,430
with their exceptions.

2860
03:52:17,830 --> 03:52:20,110
And the address that I say, there are a lot of underlying exceptions.

2861
03:52:20,310 --> 03:52:21,330
It only comes with that.

2862
03:52:21,330 --> 03:52:27,310
is one thing. I do think the QAP identifies it clearly enough that you can't do it in

2863
03:52:27,310 --> 03:52:29,970
that risk and that is, and it's it might not even-

2864
03:52:30,000 --> 03:52:36,300
I'm going to happen to ensure that that deals, that our USDA, that are in urban areas, are allowed to pick rural.

2865
03:52:36,640 --> 03:52:41,960
And it gives it a path for either CRP or opportunity points.

2866
03:52:42,880 --> 03:52:48,860
So that's an unfair advantage if a U.S. de-application is competing and at risk, and they're able to do that.

2867
03:52:49,420 --> 03:52:52,580
I do think there's some language that prohibits that in the QAP.

2868
03:52:53,560 --> 03:53:00,860
It's item B under the USDA set aside, language, side to side so that I think that's a good

2869
03:53:00,860 --> 03:53:04,000
of guardrail, but I think it could be questioned too.

2870
03:53:07,870 --> 03:53:08,710
Thank you, Tracy.

2871
03:53:15,070 --> 03:53:16,250
I promise I'll be quick.

2872
03:53:16,610 --> 03:53:22,230
Michael Beard-Bedko Consulting, we did provide preliminary comment related to one of the adjustments

2873
03:53:22,230 --> 03:53:29,790
in the wrath where they've now created priorities that limit all the credits available in

2874
03:53:29,790 --> 03:53:35,870
sub-region only 50% can go towards rehabilitation developments, both in urban and rural.

2875
03:53:36,690 --> 03:53:43,670
This effectively has blocked out historic rehabilitation in all that the major metroplexes

2876
03:53:43,670 --> 03:53:49,870
going forward with that rule, which might be an unintended consequence.

2877
03:53:50,590 --> 03:53:56,370
Just want to make sure everyone's aware that as it's read, you will never see another rehabilitation

2878
03:53:56,370 --> 03:54:06,910
development in historic specifically regions like five, four, he might and four, but three, two, one,

2879
03:54:07,870 --> 03:54:12,650
they're all going to be blocked out unless no one else ever applies. So, just wanted to make sure.

2880
03:54:16,280 --> 03:54:23,920
Okay, so for these, most recent comments, so far there isn't any specific request to change

2881
03:54:23,920 --> 03:54:25,080
to what we have in the document?

2882
03:54:25,740 --> 03:54:28,820
There, I believe there was from Robbie and Tim.

2883
03:54:29,820 --> 03:54:31,840
So within the at-risk set aside,

2884
03:54:32,160 --> 03:54:36,440
the first five percent, which is a third of the set aside,

2885
03:54:36,740 --> 03:54:38,280
is limited to USDA applications.

2886
03:54:38,760 --> 03:54:41,580
The remaining is for at-risk applications,

2887
03:54:42,180 --> 03:54:45,380
and a USDA application can qualify as at-risk.

2888
03:54:45,560 --> 03:54:47,300
This is so insane to try and explain,

2889
03:54:47,400 --> 03:54:48,500
it makes me feel like a crazy person.

2890
03:54:49,220 --> 03:54:52,220
So an application could in theory qualify for both of those,

2891
03:54:52,340 --> 03:54:53,820
but what we've seen over the last couple of years

2892
03:54:53,820 --> 03:54:59,060
the USDA has been taking up the significant amount of that 15 percent, which means very few of our

2893
03:54:59,060 --> 03:55:05,540
at-risk dollars are going to non-USDA urban deals. What we have proposed in the QAP is that an

2894
03:55:05,540 --> 03:55:11,800
application that qualifies for both has to choose either compete in USDA or at-risk. Tim and Robbie

2895
03:55:11,800 --> 03:55:16,980
have requested clarifying language in the QAP that if we get through all of the at-risk applications

2896
03:55:16,980 --> 03:55:22,940
and there is money remaining in that 15 percent set aside that applications that were submitted

2897
03:55:22,940 --> 03:55:27,280
under the USDA side to side that would otherwise qualify for at risk be eligible to get those

2898
03:55:27,280 --> 03:55:27,960
dollars.

2899
03:55:28,480 --> 03:55:29,180
I hope that made sense.

2900
03:55:29,220 --> 03:55:31,540
I find it to be a very reasonable request.

2901
03:55:34,310 --> 03:55:35,650
Do you actually need language or that?

2902
03:55:35,790 --> 03:55:37,550
Or is that just that you would interpret it?

2903
03:55:37,550 --> 03:55:41,250
I do think that we would need to tweak the language that we have slightly but we could do that

2904
03:55:41,250 --> 03:55:44,410
very easily and we could add a check-up to the application that says, you know, we're

2905
03:55:44,410 --> 03:55:48,410
not competing in at risk but if there's any of this company left over, we do believe that

2906
03:55:48,410 --> 03:55:49,350
we qualify for it.

2907
03:55:49,410 --> 03:55:50,310
So that would be pretty easy.

2908
03:55:50,310 --> 03:55:54,850
So why did this beaker last minute say that that would affect rural bills specifically?

2909
03:55:55,390 --> 03:56:01,350
Sure, so Mr. Beard spoke about a different rule that concerns the limit on credits that can

2910
03:56:01,350 --> 03:56:06,390
go to rehabilitation developments in a sub region. This was added, I believe, two years ago,

2911
03:56:06,690 --> 03:56:11,970
to help facilitate new construction over rehabilitation, so that is a very intended aspect of it.

2912
03:56:12,390 --> 03:56:18,030
And the issue that we run into is that in sub regions that only have enough money to fund

2913
03:56:18,030 --> 03:56:22,650
one deal, which is going to be a lot of our rural subregions, because no more than 50% of

2914
03:56:22,650 --> 03:56:26,890
the credits can go to rehabs, it does effectively mean that unless nobody else ever applies,

2915
03:56:27,210 --> 03:56:30,570
or unless there's only one application in that region and it is rehab that we won't

2916
03:56:30,570 --> 03:56:34,350
fund or rehab. Because if you have two competing applications and once in no construction and

2917
03:56:34,350 --> 03:56:39,110
one is rehab, we can only fund one of those only 50% of the credits can go to a rehab,

2918
03:56:39,170 --> 03:56:44,190
which means by default it would go. It would be rehab and existing asset or it would be rehab

2919
03:56:44,190 --> 03:56:47,530
of a previous Reddit deal.

2920
03:56:48,390 --> 03:56:50,050
So we've missed an area in place, please.

2921
03:56:50,210 --> 03:56:54,750
We'll say that Anna here has a deal and she wants to

2922
03:56:54,750 --> 03:56:56,850
we have an extra 15 years short, or 20 years

2923
03:56:56,850 --> 03:56:57,810
where the number is short.

2924
03:56:58,210 --> 03:57:00,110
We have a historic structure that you're going to turn

2925
03:57:01,150 --> 03:57:05,450
from XYZ into a low-income housing deal for those two

2926
03:57:05,450 --> 03:57:06,370
separate assets.

2927
03:57:07,330 --> 03:57:12,190
Sure, so the historic building that is not housing that you

2928
03:57:12,190 --> 03:57:17,490
turning into a rehab that's considered adaptive reuse under the QAP, and adaptive reuse is considered

2929
03:57:17,490 --> 03:57:23,690
no construction. But if it is a historic deal that you're rehabilitating, it's existing, housing

2930
03:57:23,690 --> 03:57:29,250
that you were rehabilitating as housing, that would be considered a rehabilitation, and you would

2931
03:57:29,250 --> 03:57:31,730
hit that 50% limit. Thank you.

2932
03:57:33,290 --> 03:57:40,950
Okay, so if I heard you correctly on the tick, pick your horse, you know, USDA or

2933
03:57:40,950 --> 03:57:41,910
at risk,

2934
03:57:44,600 --> 03:57:50,720
the boards get done there, do you have that or then, sure, if there are still

2935
03:57:50,720 --> 03:57:58,880
funds available in the 15 percent, you can then change that designation to the other.

2936
03:57:59,520 --> 03:58:05,610
We would get at risk and then you didn't get the award, but there's still 15 percent

2937
03:58:05,610 --> 03:58:08,810
you could then change it to USDA or right in the situation.

2938
03:58:09,030 --> 03:58:11,510
I'm not sure if you're applying for both, but here's how it gets considered as.

2939
03:58:11,550 --> 03:58:11,850
Exactly.

2940
03:58:13,490 --> 03:58:17,090
I find it very reasonable, reasonable idea.

2941
03:58:18,110 --> 03:58:22,290
I mean, anyone have questions on that concept or problems with

2942
03:58:24,980 --> 03:58:25,240
it?

2943
03:58:25,520 --> 03:58:26,100
Are you kidding or not?

2944
03:58:28,020 --> 03:58:32,660
Again, so the concept of you can apply under that.

2945
03:58:32,660 --> 03:58:35,320
There's 15%.

2946
03:58:35,320 --> 03:58:35,460
Oh.

2947
03:58:35,460 --> 03:58:40,800
And see on the ceiling, you know, for either USDA or at risk,

2948
03:58:43,400 --> 03:58:47,920
if you qualify for both, you have to pick one of them in your initial application.

2949
03:58:48,840 --> 03:58:53,160
So let's say you pick USDA and you don't get the award.

2950
03:58:54,080 --> 03:59:01,980
If there are then still funds available under that 15% cap, you can then say, well, let me go at risk.

2951
03:59:02,880 --> 03:59:05,080
And then if there's, again, there's funds available.

2952
03:59:05,080 --> 03:59:12,310
There's some sort of a second by that, but still that limited, it's just...

2953
03:59:12,310 --> 03:59:14,090
It's just one application to opportunity.

2954
03:59:14,850 --> 03:59:14,950
Correct.

2955
03:59:18,370 --> 03:59:19,110
There's so many of that.

2956
03:59:19,370 --> 03:59:19,710
Yeah.

2957
03:59:19,750 --> 03:59:24,810
If we qualify for both, and everyone who came in for that second part has already been funded, that's correct.

2958
03:59:25,890 --> 03:59:26,050
Yeah.

2959
03:59:26,330 --> 03:59:28,490
Sounds good idea.

2960
03:59:29,790 --> 03:59:30,070
Okay.

2961
03:59:30,350 --> 03:59:32,210
What's the next concept that we're...

2962
03:59:32,210 --> 03:59:36,110
What's the motion incorporate that?

2963
03:59:36,110 --> 03:59:44,590
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

2964
03:59:44,590 --> 03:59:46,770
I'd like to hear and then

2965
03:59:46,770 --> 03:59:50,870
You would you motion say plus everything could you just said yep

2966
03:59:50,870 --> 03:59:53,710
I don't have a pay what he said

2967
04:00:02,450 --> 04:00:07,190
Good morning. Good afternoon. Good afternoon. I'm sorry.

2968
04:00:07,230 --> 04:00:17,170
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

2969
04:00:17,170 --> 04:00:24,170
Royal Rental Housing contingency. I wanted to bring up a new topic, which was discussed in the last

2970
04:00:24,170 --> 04:00:30,350
board meeting, but wanted to put some more gray matter and to consider this before it gets enacted.

2971
04:00:31,130 --> 04:00:38,250
So, I'm rising today to speak in favor of increasing the leveraging factor from 9% to 10%.

2972
04:00:39,010 --> 04:00:41,710
Which is in the latest draft of the staff QAP.

2973
04:00:42,510 --> 04:00:48,130
But I think that in the last board meeting there was an add-on to that that was kind of added winsically.

2974
04:00:48,530 --> 04:00:53,090
But I think we should deliberate more on.

2975
04:00:53,090 --> 04:01:02,870
which was to only allow for projects that are less than 50 units to earn that higher 10% factor.

2976
04:01:05,000 --> 04:01:11,020
And what that's going to do is it is going to create greater financial feasibility

2977
04:01:11,020 --> 04:01:14,040
more equity for smaller projects.

2978
04:01:17,550 --> 04:01:20,550
And I was looking at three different scenarios for the next round.

2979
04:01:20,550 --> 04:01:34,330
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.

2980
04:01:34,770 --> 04:01:40,490
And right now the most financially infeasible project is the 60 unit deal because of this metric.

2981
04:01:41,830 --> 04:01:49,270
So, north of 50 units, project is going to earn 120,000 per unit in that equity.

2982
04:01:50,410 --> 04:01:53,590
Below the threshold, it's going to be 140,000.

2983
04:01:54,210 --> 04:02:00,410
So, that $20,000 per unit difference is going to get baked into the real estate fundamentals

2984
04:02:00,410 --> 04:02:01,270
of the transaction.

2985
04:02:02,890 --> 04:02:09,930
Smaller projects are going to have a premium term, which runs counter to real estate fundamentals,

2986
04:02:09,930 --> 04:02:14,810
real estate theory, condoms of scale. You want more units. You want as big as

2987
04:02:14,810 --> 04:02:20,930
project as you can get. Smaller projects have more risk. If this is

2988
04:02:20,930 --> 04:02:24,890
enacted and then becomes a new precedent that the agency is going to put its

2989
04:02:24,890 --> 04:02:27,950
thumb on the scales to create greater financial feasibility for small

2990
04:02:27,950 --> 04:02:35,170
projects is going to concentrate agency resources, industry resources, into

2991
04:02:35,170 --> 04:02:37,170
higher risk properties.

2992
04:02:43,210 --> 04:02:49,470
The intent of what we were trying there is to give more opportunity to

2993
04:02:50,890 --> 04:02:58,650
the smaller rural projects. If I could just give a little background for folks who might

2994
04:02:58,650 --> 04:03:02,710
not be as familiar with the leveraging scoring category. So there's a scoring category in the

2995
04:03:02,710 --> 04:03:09,710
QAP for leveraging of private resources I believe. And it awards points if your tax credit

2996
04:03:09,710 --> 04:03:14,550
The request amount is below a certain percentage of your total development cost and historically

2997
04:03:14,550 --> 04:03:17,510
that number has been set at 9%.

2998
04:03:17,510 --> 04:03:22,170
What we've seen over the last couple years, because things are so expensive especially debt,

2999
04:03:22,390 --> 04:03:26,550
and I have to shift my thinking when I think about rehab, rehab costs, what you have available

3000
04:03:26,550 --> 04:03:27,550
to spend on the rehab.

3001
04:03:27,750 --> 04:03:30,170
So if you have 9 million, that's how much the rehab is going to be.

3002
04:03:30,290 --> 04:03:32,210
If you have 10 million, you're going to do a 10 million dollar rehab.

3003
04:03:32,850 --> 04:03:37,690
As debt has gotten more expensive, the available capital to spend on these rehabs has gone

3004
04:03:37,690 --> 04:03:42,830
down, and that has pushed that 9% into an amount that's so small that it threatens the financial

3005
04:03:42,830 --> 04:03:44,830
feasibility of those really small developments.

3006
04:03:45,730 --> 04:03:50,290
And so what we proposed at the September meeting is that for USDA deals, because they are

3007
04:03:50,290 --> 04:03:57,250
the ones that have been affected so far by this squeeze, that we go up to 10% for that leveraging

3008
04:03:57,250 --> 04:04:02,450
upon further discussion, I think where the room kind of landed is that because small deals are

3009
04:04:02,450 --> 04:04:08,070
most affected, then that benefit should only be given to deals below a certain unit count,

3010
04:04:08,090 --> 04:04:11,330
and I think we land it on 50, which is what it's in the QAP right now.

3011
04:04:12,190 --> 04:04:15,650
I do believe that there is something to, one of the variables saying, no relation, by the way,

3012
04:04:17,790 --> 04:04:23,430
that you could have the unintended consequence of incentivizing small deals because there's a little bit

3013
04:04:23,430 --> 04:04:26,870
more leveraging available for them, that could be something that the board would want to consider.

3014
04:04:27,450 --> 04:04:31,010
But that is the reasoning behind it, is that because small deals are the most affected,

3015
04:04:31,010 --> 04:04:33,530
then small deals should be the only ones to get that benefit.

3016
04:04:36,720 --> 04:04:42,600
And rural rental developers will always try to do scatter side deals for a possible.

3017
04:04:43,240 --> 04:04:46,900
They will try to put smaller deals together to create some of the columns of scale.

3018
04:04:47,600 --> 04:04:50,660
As long as they can point out, we want to do that.

3019
04:04:50,820 --> 04:04:52,280
We try to do that every single year.

3020
04:04:52,480 --> 04:04:56,260
We're looking to try to scoop small deals to create an economy as a scale.

3021
04:04:56,960 --> 04:04:59,760
This disincentivizes us from doing that.

3022
04:04:59,760 --> 04:05:06,320
It incentivizes us just to do single standalone one-off projects, not assembled in.

3023
04:05:10,090 --> 04:05:14,590
Could this be just sort of a cork in the actual, these projects that you're comparing

3024
04:05:14,590 --> 04:05:22,030
that the bigger one happens to be less affordable than, there is more than the at the smaller one?

3025
04:05:22,650 --> 04:05:26,190
I think what I hear you saying is, there is a donut that gets created.

3026
04:05:26,310 --> 04:05:30,890
So the donut starts with the 50-unit threshold right now and then the donut ends once

3027
04:05:30,890 --> 04:05:35,810
you get out of the economies of scale that gets brought on by bigger projects. I don't know

3028
04:05:35,810 --> 04:05:42,190
where that is exactly. This is a new concept. My gut says it's somewhere around 70 to 80 units.

3029
04:05:42,410 --> 04:05:49,150
Your economies of scale pick up where the financial feasibility is ever come by that drop in equity.

3030
04:05:51,230 --> 04:05:59,050
Does that address your question? Well, I'm just wondering if in this particular case you're not

3031
04:05:59,050 --> 04:06:01,870
in pairing apples, apples, and so on.

3032
04:06:01,890 --> 04:06:04,350
It's just that the smaller project, in this case,

3033
04:06:04,530 --> 04:06:08,010
truly is just happens to be a better project.

3034
04:06:08,530 --> 04:06:10,510
Well, when the agency puts its thumb on the scale

3035
04:06:10,510 --> 04:06:14,570
to ensure the 20,000, there is a going to be a 20,000 unit

3036
04:06:14,570 --> 04:06:18,110
difference in the amount of equity, that does translate

3037
04:06:18,110 --> 04:06:19,890
into the transaction.

3038
04:06:22,230 --> 04:06:24,750
When sellers start to realize that,

3039
04:06:24,830 --> 04:06:26,430
they're going to start asking for more.

3040
04:06:27,050 --> 04:06:28,970
So not all of this is going to go into

3041
04:06:28,970 --> 04:06:33,410
the sticks and bricks so to speak of the rehab. There is going to be an awareness that if you're

3042
04:06:33,410 --> 04:06:45,130
below 50 units and by the way, 50 units, 5 for kates, the USDA supply pretty evenly. So you're

3043
04:06:45,130 --> 04:06:51,910
going to have a dramatic difference between 49 unit deals and 51 unit deals. And that is a good

3044
04:06:51,910 --> 04:06:53,350
chunk of the USDA supply.

3045
04:06:57,550 --> 04:07:00,710
John, did you give us formal comment on this or off of language?

3046
04:07:01,690 --> 04:07:05,430
I believe rural rental provided a letter in written comment.

3047
04:07:06,630 --> 04:07:10,030
Do you remember what our position was?

3048
04:07:11,110 --> 04:07:16,610
I remember responding to this, but essentially the reason response was that the intention

3049
04:07:16,610 --> 04:07:19,110
of this was to help out these small deals that are being squeezed.

3050
04:07:20,110 --> 04:07:29,110
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.

3051
04:07:30,000 --> 04:07:49,180
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.

3052
04:07:49,480 --> 04:07:59,980
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.

3053
04:08:00,940 --> 04:08:29,690
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.

3054
04:08:30,350 --> 04:08:34,570
And we get just fundamentally, as I recall, us going down this path,

3055
04:08:38,710 --> 04:08:39,350
I think it's great

3056
04:08:39,350 --> 04:08:45,530
you're trying to develop bigger rural properties, but from what I remember from industry

3057
04:08:45,530 --> 04:08:51,850
and staff saying, we couldn't, it was almost economically invisible to do the small projects.

3058
04:08:52,890 --> 04:08:55,130
So how can we help the small projects?

3059
04:08:56,190 --> 04:09:02,850
This may be an unintended consequence of-

3060
04:09:02,850 --> 04:09:08,030
So I think raising the bar from 9% to 10% helps that.

3061
04:09:09,390 --> 04:09:13,830
Let's not punish so to speak projects that are slightly larger

3062
04:09:13,830 --> 04:09:14,670
than that threshold.

3063
04:09:18,790 --> 04:09:20,970
Can I do compromise first?

3064
04:09:22,690 --> 04:09:26,150
Robby Meyer with rural housing and I got to compromise to the situation

3065
04:09:26,150 --> 04:09:27,850
and Tracy and I talked about it.

3066
04:09:28,390 --> 04:09:29,910
For this year, for 2025,

3067
04:09:29,910 --> 04:09:39,050
then let us revisit the whole thing for 2026 for a broader ethic. For 2025, if we could leave the

3068
04:09:39,050 --> 04:09:46,030
cap in, but apply the cap to if somebody wanted to do say a scattered site development where

3069
04:09:46,030 --> 04:09:54,150
you had a 2026 unit deals to small deals so that it would go to the cap. Have the cap apply

3070
04:09:54,150 --> 04:09:57,410
to each development in the scattered site.

3071
04:09:57,890 --> 04:10:01,950
So there's not first the development site or the application.

3072
04:10:04,130 --> 04:10:10,530
And we'll put a guardrail on it, that you can only have two scattered sites.

3073
04:10:11,550 --> 04:10:14,730
So that you can't, you know, can't bust the cap really high.

3074
04:10:15,090 --> 04:10:18,590
Now that does mean that you could have two 50 unit deals and you'd have 100 units,

3075
04:10:19,090 --> 04:10:20,450
but it would have a guardrail on it.

3076
04:10:20,450 --> 04:10:27,950
have to be a scattered site, not a phase one, phase two, a true scattered site and that would

3077
04:10:27,950 --> 04:10:35,350
be for 2025. We revisit the whole thing for 2026 and tracing, I agree. We would work together

3078
04:10:35,350 --> 04:10:40,870
on the whole issue and work out between at risk and USDA and how that would affect if that

3079
04:10:40,870 --> 04:10:50,010
is a conformizable situation. I understand exactly what Jonathan is saying. I don't disagree

3080
04:10:50,010 --> 04:10:54,250
with what he's saying, there's got to be a workable solution, because as we're old and

3081
04:10:54,250 --> 04:11:00,370
or housing, we're the ones that started this, and we asked for the increase, because we

3082
04:11:00,370 --> 04:11:06,490
were having to give up that we were having to give up credits because we're trying to maximize

3083
04:11:06,490 --> 04:11:13,870
the rehabilitation and we couldn't get there. And every USDA development this year gave up credits

3084
04:11:13,870 --> 04:11:20,110
because of that. And a lot of times when in at risk they're given up credits because they

3085
04:11:20,110 --> 04:11:25,130
hit the 2 million mark. And happen for everybody, but they hit the 2 million cap anyway,

3086
04:11:25,870 --> 04:11:32,610
so they're giving up credits that way and not necessarily because of our situation.

3087
04:11:32,830 --> 04:11:39,850
So you're proposing that we could have a two scattered sites of 49 units each?

3088
04:11:39,850 --> 04:11:49,210
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.

3089
04:11:49,530 --> 04:11:55,050
Now, you do, and I agree with Jonathan, we do have 48 unit deals and 49 unit deals.

3090
04:11:55,090 --> 04:12:00,370
We have 60 unit deals and higher, but for the most part, most USDA deals are small.

3091
04:12:00,630 --> 04:12:06,690
They're all in the middle of nowhere, so you're not going to have a lot of large complexes out there.

3092
04:12:06,690 --> 04:12:33,070
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.

3093
04:12:33,070 --> 04:12:36,750
As far as what would the problem be if we just eliminate the cap of 50 units?

3094
04:12:38,890 --> 04:12:47,390
I will let Ms. Fine get into that. I'm for that, but I understand the guard realm

3095
04:12:47,390 --> 04:12:53,670
that Ms. Fine wants to have. I'm trying to be compromising here.

3096
04:12:55,770 --> 04:12:57,850
I'm compromising to that

3097
04:12:57,850 --> 04:13:02,130
if we can just not just have it for the whole development site

3098
04:13:02,130 --> 04:13:05,570
because there are a couple of portfolios

3099
04:13:05,570 --> 04:13:07,650
that are being purchased in Texas right now.

3100
04:13:08,010 --> 04:13:09,150
I'm not party to that,

3101
04:13:09,390 --> 04:13:11,730
but I know there's portfolios that are out there

3102
04:13:11,730 --> 04:13:13,690
and I'm sure that we're gonna see some of those

3103
04:13:13,690 --> 04:13:15,370
part of those portfolios come in.

3104
04:13:15,550 --> 04:13:19,330
And there's small deals and I want them to have the ability

3105
04:13:19,330 --> 04:13:22,810
to be able to come in as scattered sites.

3106
04:13:24,010 --> 04:13:24,390
So.

3107
04:13:24,390 --> 04:13:25,190
This is fun.

3108
04:13:25,190 --> 04:13:32,370
Tracy Finney, National Twitch Residence says, yes, I'm I'm supportive of Robby's suggestion of limiting

3109
04:13:32,970 --> 04:13:36,010
scattered site two projects doing a bundle

3110
04:13:36,010 --> 04:13:40,570
each max 50 units the reason why I I

3111
04:13:40,570 --> 04:13:50,890
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

3112
04:13:50,890 --> 04:13:59,050
any of interest transactions. It is allowed. It's not illegal. Our rules permit it and it is happening.

3113
04:13:59,870 --> 04:14:04,430
And so all these transactions, if you're you own your project, there are all a little bit different.

3114
04:14:04,470 --> 04:14:09,370
For example, I might have a $4 million project in it. It's going to cost me $4 million to acquire it.

3115
04:14:09,610 --> 04:14:15,410
And I have $3 million in debt and therefore there's only this $1 million difference.

3116
04:14:16,210 --> 04:14:30,090
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.

3117
04:14:30,290 --> 04:14:44,590
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.

3118
04:14:44,590 --> 04:14:48,170
through the collapse and funded another deal.

3119
04:14:48,350 --> 04:14:50,110
Again, it is allowed, it's not considered

3120
04:14:50,110 --> 04:14:51,850
if used the way our rules are written.

3121
04:14:52,330 --> 04:14:55,810
So when you allow projects to increase leverage,

3122
04:14:56,590 --> 04:14:58,650
you are allowing them to take more credits.

3123
04:14:59,010 --> 04:14:59,970
But there's nothing required.

3124
04:15:00,000 --> 04:15:09,700
Hearing us to make those extra credits go to, you know, hard-cost and construction. There's not a guardrail for that.

3125
04:15:10,000 --> 04:15:12,120
Okay, but how's that affect this?

3126
04:15:12,340 --> 04:15:19,580
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.

3127
04:15:20,120 --> 04:15:22,140
You can cash them out into your pocket.

3128
04:15:22,980 --> 04:15:33,860
And just to trace the, we haven't had that particular issue in USDA, USDA has a thumb on that particular item.

3129
04:15:34,380 --> 04:15:42,140
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

3130
04:15:42,140 --> 04:15:45,620
It's a way to take it out, just have the supply to USDA.

3131
04:15:47,300 --> 04:15:50,560
But I understand Ms. Faina, I understand Jonathan,

3132
04:15:51,560 --> 04:15:56,260
I'd like to compromise here and work it out in 2026

3133
04:15:56,260 --> 04:16:00,840
if, however, the board's pleasure is to fix it.

3134
04:16:01,360 --> 04:16:04,380
That's either reducing it or doing it with it one at a time.

3135
04:16:04,460 --> 04:16:07,560
We compromise with the allowing

3136
04:16:08,440 --> 04:16:14,940
scattered sight, as long as each scattered sights under the 50, that sort of a balance

3137
04:16:14,940 --> 04:16:24,420
for YouTube, and then that partially reach your Jonathan's issue and being able to, I

3138
04:16:24,420 --> 04:16:26,860
guess it doesn't really, if you have one side of it.

3139
04:16:26,860 --> 04:16:33,260
Yeah, it's still going to create a donut, there's still going to be projects that are not

3140
04:16:33,260 --> 04:16:34,980
as financially feasible as smaller ones.

3141
04:16:35,640 --> 04:16:41,320
I think I understand, I do fully understand what your position is where you're coming from,

3142
04:16:41,700 --> 04:16:50,320
but I believe it's been the boards intent to help these smaller deals and small communities

3143
04:16:50,320 --> 04:16:57,940
that there's no way it's going to support a 75-unit, you know, I mean, build a man.

3144
04:16:59,700 --> 04:17:06,000
from, as we've seen over the years, it's so tough to get there for economies of scale and

3145
04:17:06,000 --> 04:17:12,420
everything like that. It's tough to get over even a 20-unit deal in some small amounts.

3146
04:17:12,500 --> 04:17:16,480
There are some costs that definitely hit the economies of scale.

3147
04:17:17,700 --> 04:17:22,220
You know, it costs my, I'm going to pay the, by attorney the same amount, whether it's a 25-unit deal

3148
04:17:22,220 --> 04:17:25,820
or 75-unit deal. I'm going to pay the same amount for my market statement. It's paid the same amount

3149
04:17:25,820 --> 04:17:35,120
for my appraisal. So we need to help the slum in this way. So it's just a corner point to the

3150
04:17:35,120 --> 04:17:35,660
larger deals.

3151
04:17:38,500 --> 04:17:42,600
Okay, so we need to introduce the

3152
04:17:44,900 --> 04:17:48,360
compromise. I gave you a compromise. It's really

3153
04:17:48,360 --> 04:17:52,240
up to the board's discretion of how you want to do it. If you remove the cap, we'll still work

3154
04:17:52,800 --> 04:17:58,500
and try to fix it next year. I'm committed to that. However, we try to fix it going forward,

3155
04:17:58,500 --> 04:18:03,540
whether that means trying to figure out a different cap, or we try to put out a guardrails

3156
04:18:03,540 --> 04:18:04,180
in next year.

3157
04:18:04,260 --> 04:18:07,440
How will we do that role rental housing is committed to doing that?

3158
04:18:07,560 --> 04:18:11,280
Okay, if we leave it as written up right now,

3159
04:18:14,690 --> 04:18:18,590
that doesn't give that extra multi-skethered

3160
04:18:18,590 --> 04:18:18,890
site.

3161
04:18:21,130 --> 04:18:26,110
But it'll be a lot easier to evaluate and score and everything like that.

3162
04:18:26,110 --> 04:18:32,650
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

3163
04:18:32,650 --> 04:18:37,790
Exempting in USDA up to a certain size or maybe there's all kinds of waste it

3164
04:18:39,470 --> 04:18:45,150
I read you that, but it's selling to me like it'd be easier and still a reasonable to

3165
04:18:46,130 --> 04:18:48,850
Leave it in this year as we have written up

3166
04:18:49,670 --> 04:18:52,730
It put a lot more applications in front of you.

3167
04:18:52,930 --> 04:18:54,690
I mean, if you did the scatter site,

3168
04:18:54,790 --> 04:18:59,230
the compromise you'd have less applications presentably.

3169
04:18:59,750 --> 04:19:03,070
I would just caution against accepting the premise entirely.

3170
04:19:03,710 --> 04:19:13,170
I think it'd be creates an awkward precedent for the agency to put its thumb on determining financial feasibility to this degree.

3171
04:19:13,710 --> 04:19:16,870
I understand the desire to compromise,

3172
04:19:16,870 --> 04:19:19,430
but I think it's probably a better problem.

3173
04:19:19,450 --> 04:19:23,570
Wasn't this a rural housing request for us to do this in the first place?

3174
04:19:23,730 --> 04:19:26,470
For it to go from 9% to 10%.

3175
04:19:26,470 --> 04:19:31,590
The concept of limiting it to just projects less than 50 units is what we're objecting to.

3176
04:19:31,730 --> 04:19:33,750
You can leave it for one year. See how it goes.

3177
04:19:39,780 --> 04:19:42,820
We've heard over time that we're trying to do

3178
04:19:42,820 --> 04:19:52,080
these smaller in slightly invisible deals or invisible make-em-visable.

3179
04:19:55,010 --> 04:19:56,530
Again, I'm just not

3180
04:19:56,530 --> 04:20:03,770
moved to change it. Just one question. I know all about small towns from rural communities

3181
04:20:03,770 --> 04:20:08,650
are very small. How many have you done that were 50 or more?

3182
04:20:12,620 --> 04:20:15,100
Our group focuses on larger projects

3183
04:20:15,100 --> 04:20:21,500
just because of the comms of scale, these are managed. So we do seek out larger deals for

3184
04:20:21,500 --> 04:20:28,080
their possible. And are these in rural communities, population, that's quite...

3185
04:20:28,080 --> 04:20:37,820
It's suburban and rural is where we're focused on suburban projects, get better attention from

3186
04:20:37,820 --> 04:20:43,380
the investment and when the community. My only question was about rural communities. Those are small

3187
04:20:43,380 --> 04:20:51,440
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.

3188
04:20:53,740 --> 04:20:54,060
Yes.

3189
04:20:54,060 --> 04:20:54,360
Okay.

3190
04:20:57,400 --> 04:21:03,160
Unless someone on the board feels differently as would say we go with the as it's presented right now.

3191
04:21:03,160 --> 04:21:04,720
Thank you.

3192
04:21:04,720 --> 04:21:04,800
Any?

3193
04:21:05,560 --> 04:21:05,760
Okay.

3194
04:21:17,470 --> 04:21:19,830
So were there other topics say?

3195
04:21:19,970 --> 04:21:22,190
Go to the mentions or didn't mention.

3196
04:21:27,440 --> 04:21:34,280
So I've only got two changes before we ship it off to that.

3197
04:21:34,400 --> 04:21:35,560
That is what I have as well.

3198
04:21:36,300 --> 04:21:40,200
So what I have on my list is adjusting the thresholds in the quantity of low-income units,

3199
04:21:40,200 --> 04:21:43,440
scoring item from 10% to 5% and 10%

3200
04:21:43,440 --> 04:21:49,880
believing all other language unchanged, and within the USDA and at risk set aside, adding

3201
04:21:49,880 --> 04:21:54,460
language that if we have funded all at risk deals and we still have remaining money in that

3202
04:21:54,460 --> 04:22:01,160
15% to go back to the USDA side aside, and fund deals that would qualify under the at risk

3203
04:22:01,160 --> 04:22:05,860
set aside had they not been submitted under the USDA side, both of which I think we can accomplish

3204
04:22:05,860 --> 04:22:08,260
very easily in the QAP.

3205
04:22:13,760 --> 04:22:19,560
I would like to entertain the motion on item 37 of the agenda and everyone remember don't

3206
04:22:19,560 --> 04:22:20,660
run out we slept Theresa.

3207
04:22:26,710 --> 04:22:29,310
So I make a motion that we

3208
04:22:30,000 --> 04:22:36,300
Some of my paper on. Set the QIP, Justice Miller's interview and according to what Mr. Campbell just stated.

3209
04:22:37,140 --> 04:22:46,480
Second, and that we delivered to the Governor and a later than November 15th, 2024, typo.

3210
04:22:47,060 --> 04:22:52,620
For his review, revision, approval, and thereafter to the published in the Texas Register for adoptions.

3211
04:22:52,800 --> 04:22:58,040
All have authorized, expressed and subject to the conditions in the board actually request on this item.

3212
04:22:58,040 --> 04:23:00,720
Yes, that's exactly what I'm going to say.

3213
04:23:00,820 --> 04:23:01,200
Second.

3214
04:23:02,440 --> 04:23:02,920
Okay.

3215
04:23:03,320 --> 04:23:07,440
So motion made by Mr. Harper.

3216
04:23:08,340 --> 04:23:10,240
Seconded by Ms. Various.

3217
04:23:11,380 --> 04:23:15,600
Subject to the edits that we've agreed upon.

3218
04:23:16,500 --> 04:23:18,300
All those in favor say aye.

3219
04:23:18,680 --> 04:23:19,420
Any opposed?

3220
04:23:20,300 --> 04:23:21,420
Hearing none, motion carries.

3221
04:23:21,420 --> 04:23:21,780
Thank you.

3222
04:23:22,260 --> 04:23:22,420
Everybody.

3223
04:23:23,440 --> 04:23:23,800
For that.

3224
04:23:24,460 --> 04:23:25,540
But wait, there's more.

3225
04:23:26,040 --> 04:23:26,060
Okay.

3226
04:23:26,940 --> 04:23:36,300
So, where are we, okay, somebody tell me 14, 14, 14, 14, 14, but there's only a couple

3227
04:23:36,300 --> 04:23:41,880
is 14 through what? 14, 15, that's it? Okay, we can do this.

3228
04:23:46,220 --> 04:23:49,120
And thank you all for being willing

3229
04:23:49,120 --> 04:23:56,300
to plow through this. Okay, so I'm 14 of the agenda, presentation, discussion and possible action,

3230
04:23:56,300 --> 04:24:08,460
regarding a waiver of 10-tax section 11.101B1A7 of the qualified allocation plan relating to the percentage

3231
04:24:08,460 --> 04:24:14,900
of efficiency and or one bedroom units for Oak Hill Lofts. Ms. Morales, you've had a busy day.

3232
04:24:15,220 --> 04:24:20,280
Theresa Morales, Director of Multifamily Bonds. Item 14 includes a request for a waiver for a property

3233
04:24:20,280 --> 04:24:26,200
that exceeds the 30% limitation on efficiency in one bedroom unit. Oak Hill Lofts proposes the

3234
04:24:26,200 --> 04:24:31,140
construction of 90 units in Austin. Of those 90 units, 50 will be one

3235
04:24:31,140 --> 04:24:35,920
bedrooms which comprise 55 and a half percent of the total unit count.

3236
04:24:36,460 --> 04:24:40,960
A waiver was previously considered and tabled by the board last month,

3237
04:24:41,320 --> 04:24:46,760
pending submission to staff of application exempts that reflect a unit mix that

3238
04:24:46,760 --> 04:24:52,000
does not exceed 34 percent one bedroom units. The revised application

3239
04:24:52,000 --> 04:24:57,740
and exhibits have been provided and reflect a unit mix of 33.33 percent.

3240
04:24:57,900 --> 04:25:03,020
One bedroom unit, recognizing the discussion at last month's board meeting and recognizing

3241
04:25:03,020 --> 04:25:09,580
the proposed change to the 2025 QAP, that increases the efficiency in one bedroom limitation

3242
04:25:09,580 --> 04:25:11,360
to 35 percent.

3243
04:25:11,360 --> 04:25:18,400
Staff recommends that a waiver of 10-tapped 11.101 B1A, Reminette 7, Be Granted.

3244
04:25:19,660 --> 04:25:28,880
Okay, so this is what we were presented in the last meeting they actually have put together the drawings or correct.

3245
04:25:29,080 --> 04:25:31,260
To affect this change.

3246
04:25:31,740 --> 04:25:31,840
Yes.

3247
04:25:32,040 --> 04:25:34,360
They're not asking for anything else other than that.

3248
04:25:34,540 --> 04:25:34,740
Correct.

3249
04:25:34,960 --> 04:25:38,400
Change so the waivers are really at this point now from 30 to 33%.

3250
04:25:39,060 --> 04:25:45,340
I mean, 34% I think is where we landed last month because the 33.

3251
04:25:45,340 --> 04:25:53,720
three packet in recognizing that we're changing the whole thing to 35% going forward.

3252
04:25:54,620 --> 04:25:59,900
So do any board members have questions on this item or would Mr. Thomas like to make

3253
04:25:59,900 --> 04:26:00,300
a motion?

3254
04:26:00,420 --> 04:26:00,840
Yes, sir.

3255
04:26:00,960 --> 04:26:01,920
I'll make a motion.

3256
04:26:02,200 --> 04:26:08,880
Mr. Chairman, I move the board grant the requested waiver of 10 tax section 11.101B of the

3257
04:26:08,880 --> 04:26:14,000
2,024 qualified allocation plan relating to the percentage of efficiency and role 1 bedroom

3258
04:26:14,000 --> 04:26:19,140
units for Oak Hill Lofts all for the reasons and is expressly conditioned and described in the

3259
04:26:19,140 --> 04:26:23,040
board action request and associated documents on this item.

3260
04:26:24,640 --> 04:26:27,020
Who should be made by Mr. Thomas, seconded by Ms. Conroy.

3261
04:26:27,580 --> 04:26:28,980
Well, is in favor say aye.

3262
04:26:29,580 --> 04:26:30,260
Any opposed?

3263
04:26:30,720 --> 04:26:31,160
Hearing none.

3264
04:26:31,240 --> 04:26:31,920
Motion carries.

3265
04:26:32,680 --> 04:26:33,800
15 of the agenda.

3266
04:26:33,900 --> 04:26:38,280
Presentation discussion in possible action regarding the issuance of multi-family housing

3267
04:26:38,280 --> 04:26:53,540
The revenue bonds series 2024-A-1 and A-2 resolution number 25-08 and a ward of direct loan funds

3268
04:26:53,540 --> 04:26:58,060
and a determination notice of housing tax credits from RELUS.

3269
04:26:58,340 --> 04:27:03,960
At M15 involves a bond issuance for the new construction of 177 units in SEGAIN serving

3270
04:27:03,960 --> 04:27:10,840
the general population. The units will serve households at 50% 60% and 70% of the area

3271
04:27:10,840 --> 04:27:16,080
median income. The financing structure involves a private placement with new point real estate

3272
04:27:16,080 --> 04:27:21,780
capital. There will be two series of bonds. The series A-1 bonds will be construction to

3273
04:27:21,780 --> 04:27:29,380
perm with a 17-year term and a 40-year amortization. The series A-2-A-2 bonds will be construction

3274
04:27:29,380 --> 04:27:36,100
only for approximately 32 months. The resolution that's attached to this agenda item is a little

3275
04:27:36,100 --> 04:27:42,220
different from what the board typically sees. Specifically exhibit B to the resolution includes

3276
04:27:42,220 --> 04:27:49,100
a schedule of possible interest rates in five basis point increments that correspond to a specific

3277
04:27:49,100 --> 04:27:59,360
bond amount for the A-1 and A-2 series. The need for this exhibit is due to a limitation in our

3278
04:27:59,360 --> 04:28:04,720
set the interest rate, bond amount, and maturity date on transactions that involve unrated

3279
04:28:04,720 --> 04:28:05,260
debt.

3280
04:28:05,920 --> 04:28:10,720
For publicly offered bond transactions that are rated, statute allows the department to

3281
04:28:10,720 --> 04:28:15,840
delegate pricing to another party, usually the underwriter, and we can adopt a resolution

3282
04:28:15,840 --> 04:28:19,140
that includes a not-to-exceed amount in term.

3283
04:28:19,820 --> 04:28:25,040
In the case of walnut springs, because rate lock does not occur until a few weeks, prior

3284
04:28:25,040 --> 04:28:29,660
When we start closing, it is difficult for the business partners to locked down a specific

3285
04:28:29,660 --> 04:28:35,400
bond amount to be issued for each series and given the structure the amount specified in

3286
04:28:35,400 --> 04:28:38,400
the resolution is the only amount that we can issue.

3287
04:28:39,100 --> 04:28:44,500
Effectively, the way the bond resolution is drafted it provides flexibility to land somewhere

3288
04:28:44,500 --> 04:28:45,780
in the range listed.

3289
04:28:46,400 --> 04:28:52,580
Meet the statutory requirement for unrated debt and not unduly delay board approval and subsequently

3290
04:28:52,580 --> 04:28:53,720
the closing timeline.

3291
04:28:53,720 --> 04:28:59,720
In addition to the bonds and the 4% credits, the capital stack also involves the multi-family

3292
04:28:59,720 --> 04:29:05,460
direct loan from the department under the Tax Credit Assistance Program or T-CAP repayment

3293
04:29:05,460 --> 04:29:08,060
funds 2024-3 NOFA.

3294
04:29:08,620 --> 04:29:14,960
The recommended loan amount is 10 million at 2% interest with a 40-year amortization and

3295
04:29:14,960 --> 04:29:18,200
a term that mirrors the senior loan of 17 years.

3296
04:29:19,000 --> 04:29:30,860
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.

3297
04:29:31,880 --> 04:29:46,040
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.

3298
04:29:46,040 --> 04:29:49,540
as further specified on exhibit be of the resolution.

3299
04:29:50,380 --> 04:29:56,960
Staff also recommends approval of an award of tax credit assistance program repayment funds for $10 million,

3300
04:29:57,280 --> 04:29:59,960
and a determination notice of 4% housing tax.

3301
04:30:04,100 --> 04:30:05,020
Okay,

3302
04:30:08,030 --> 04:30:18,330
I know everyone's ready to go, but I actually have some mathematical questions here. How much is this development supposed to cost?

3303
04:30:18,790 --> 04:30:20,050
52.6.

3304
04:30:20,550 --> 04:30:22,850
Okay, 52.6 million.

3305
04:30:22,850 --> 04:30:24,410
Harper helped me on this.

3306
04:30:26,550 --> 04:30:33,710
Okay, so there's 27 million dollars in bonds. Correct.

3307
04:30:34,350 --> 04:30:37,670
Plus, $10 million alone. Correct. The 37.

3308
04:30:40,810 --> 04:30:47,310
And then 2.4 million bonds of tax credits

3309
04:30:48,130 --> 04:30:54,330
recommended on the allocation. Correct. You multiply that by 10. It's 24 million

3310
04:30:55,610 --> 04:31:03,590
But only give 90% of that's a takeoff 2% of that or 10% of that, this is say roughly 22 million.

3311
04:31:05,010 --> 04:31:14,370
So, 37 plus I'm sorry, 27 plus 10, 37 plus 22 is what 59 million.

3312
04:31:16,900 --> 04:31:24,340
So perhaps a better way to look at it as an underwriting report, which is on page 157.

3313
04:31:24,340 --> 04:31:35,640
of 1366 in the Supplemental Board book and then also on page 158. If you look at the

3314
04:31:35,640 --> 04:31:43,520
permanent sources, table that comes to 27.9 million.

3315
04:31:45,670 --> 04:31:46,970
So if you take your total development

3316
04:31:46,970 --> 04:31:53,050
cost of 52 and some change and then subtract out those permanent sources in the capital

3317
04:31:53,050 --> 04:31:58,950
stack, you arrive at what is effectively the gap that needs to be filled, which would be

3318
04:31:58,950 --> 04:32:03,810
filled in the form of the housing tax credits as well as deferred developer fee.

3319
04:32:05,130 --> 04:32:07,690
And so under that conclusions box,

3320
04:32:11,240 --> 04:32:14,140
you see the total development cost minus the permsources

3321
04:32:14,140 --> 04:32:16,660
leaves us a gap of about 24 million.

3322
04:32:17,500 --> 04:32:23,020
The next box talks about the housing credit amount and how that is determined.

3323
04:32:23,020 --> 04:32:28,810
And in this case, we're going with the amount that was requested by the applicant,

3324
04:32:30,850 --> 04:32:31,070
which

3325
04:32:31,070 --> 04:32:38,850
still leaves a gap to fill and reach that 52 and that gap is coming in the form of deferred

3326
04:32:38,850 --> 04:32:39,570
developer fee.

3327
04:32:39,710 --> 04:32:46,930
So there's about 4.4 million or 73% of the deferred of the developer fee that's being deferred.

3328
04:32:55,450 --> 04:32:56,630
But do you see my?

3329
04:32:57,130 --> 04:33:01,190
There's an amount there that's considered for interim only.

3330
04:33:01,190 --> 04:33:13,090
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.

3331
04:33:16,960 --> 04:33:20,340
So you're right up with saying there's 27 million bonds.

3332
04:33:22,060 --> 04:33:24,340
That is split between permanent construction.

3333
04:33:26,580 --> 04:33:29,480
Okay, so the permanent bond level is...

3334
04:33:29,480 --> 04:33:30,860
Is 13 and some change?

3335
04:33:30,860 --> 04:33:33,200
1696. Correct.

3336
04:33:37,400 --> 04:33:46,680
It's under the permanent sources on page 157. Correct. 13.9 plus the T

3337
04:33:46,680 --> 04:33:57,520
cap loan, which will be permanent. 10 plus the match and then the note. Okay. So 13.14 million is

3338
04:33:57,520 --> 04:34:02,560
the permanent part of the 27 million. Correct. And there's there's a 13 million construction

3339
04:34:02,560 --> 04:34:09,860
loan. Which goes away. That goes away. That gets us to worry. Okay. We're looking at them.

3340
04:34:10,040 --> 04:34:17,200
Good. I'm good. Anyone else? Mr. Jeremy? I'm ready to make a motion. Please.

3341
04:34:18,560 --> 04:34:22,020
I'm ready to entertain the motion. Very well. I moved the Board of Proving,

3342
04:34:22,080 --> 04:34:28,240
Distance and Resolution number 25 to ask there is there. Eight regarding these students of

3343
04:34:28,240 --> 04:34:34,580
tax exempt multi-family housing revenue bonds, approve the issuance of a termination notice

3344
04:34:34,580 --> 04:34:42,860
for 4% housing tax credits, and approve TCAP direct loan funds for Walnut Springs apartment

3345
04:34:42,860 --> 04:34:49,640
all is conditioned and authorized in the board exchange request, resolutions, and associated

3346
04:34:49,640 --> 04:34:52,340
documents on this item.

3347
04:34:53,380 --> 04:35:00,320
Motion, babe, my misparias. Is there a second? Second. Seconded by Mr. Harper. All those

3348
04:35:00,320 --> 04:35:04,180
in favor say aye. Aye. And the opposed, sir, and then motion carries.

3349
04:35:04,500 --> 04:35:11,680
Thank you. Go get a drink through, sir. Okay. The board has addressed the posts of the agenda

3350
04:35:11,680 --> 04:35:15,600
items. Now is the time to the meeting when members of the public can raise issues, issues

3351
04:35:15,600 --> 04:35:19,960
with the board on matters of relevance to the department's business, or request that the board

3352
04:35:19,960 --> 04:35:25,680
specific items on future agendas for consideration. Is there anyone who would like to provide

3353
04:35:25,680 --> 04:35:27,640
public comment at this time?

3354
04:35:30,250 --> 04:35:32,990
Seeing none, the next scheduled meeting of the governing board

3355
04:35:32,990 --> 04:35:43,410
is at 10 a.m. on Thursday, December 12th, 2024. Currently scheduled in room in this tiny

3356
04:35:43,410 --> 04:35:50,570
Co-Z room without flags, so room E1, E1, O1, 2, right?

3357
04:35:51,650 --> 04:35:51,650
Okay,

3358
04:35:53,860 --> 04:36:00,500
flags with flags next time, so E1, 0, 1, 2 with a tap, Texas capital extension,

3359
04:36:00,900 --> 04:36:09,920
this room, and if you put this in, so come early and you'll get a bonus in the finance

3360
04:36:09,920 --> 04:36:12,880
committee meeting that precedes the governing board meeting.

3361
04:36:12,880 --> 04:36:19,980
So that should be at 9.30, 9.45, 9.30, 9.30.

3362
04:36:21,080 --> 04:36:23,340
Bonus, bonus to the GXD.

3363
04:36:24,880 --> 04:36:27,420
Seeing that there's no other business.

3364
04:36:28,980 --> 04:36:33,420
It is 2.43 and we are adjourned.