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OKAY, I AM GONNA GO AHEAD AND CALL THE MEETING
[Dallas Housing Finance Corporation on February 12, 2023.]
TO ORDER.UM, AND I'LL, UH, CALL UPON ERIN QUINTO TO, UH, DO THE ROLL.
I'LL MAKE SURE I VOLUME UP HERE.
SO WE'RE GONNA DO THE ROLL CALL.
MAY I CALL YOUR NAME? JUST SAY, HERE.
DAVID ELLIS SAID HE WAS NOT GONNA COME.
DIRECTOR CHRISTOPHER LEWIS THAT HE WAS NOT BEING ATTENDANCE AND DIRECTOR.
UM, I'LL CALL FOR PUBLIC TESTIMONY AND ITEMS FOUR THROUGH SEVEN OF THE AGENDA.
AND, UH, IF THERE'S ANYBODY WHO'S, UM, ONLINE AND, AND WANTS TO GIVE PUBLIC COMMENTS, WE DON'T HAVE ANYBODY IN THE ROOM, BUT I'LL GIVE A FEW MOMENTS IF ANYBODY HAS ANY PUBLIC COMMENTS.
I DON'T HEAR ANY, UM, WE'LL MOVE ON TO APPROVAL OF THE MINUTES FOR THE JANUARY 24TH, 2023, CITY OF DALLAS HOUSING FINANCE CORPORATION MEETING.
UM, AND DID WE MAKE THAT CORRECTION TO THAT ONE WORD? UH, IT HASN'T BEEN DISTRIBUTED, BUT IT'S BEEN NOTED.
UH, THE FIRST WORD IN THE ORIGINAL DRAFT WAS PUBLIC, BUT THAT WORD WAS SUPPOSED TO BE CONSIDERED.
SO, UM, SO I'LL OPEN THE FLOOR TO ANYBODY WHO HAS ANY OTHER, UM, ADDITIONS OR CORRECTIONS.
AND, UM, SO IF SOMEONE WOULD MAKE THE MOTION FOR APPROVAL, SO, OKAY.
WHO SECONDED? DIRECTOR VERNON.
CONSIDER AN ADOPT RE OH, SORRY.
MEETINGS, MINUTES ARE APPROVED.
CONSIDER AN ADOPT A RESOLUTION APPROVING A MEMORANDUM OF UNDERSTANDING WITH OPPORTUNITY HOUSING GROUP FOR THE ACQUISITION OF
AND WE HAVE IS MR. GRIGGS, ARE YOU ONLINE HERE? YEAH.
UM, SO WE HAVE A PRESENTATION HERE.
I CAN RUN IT FOR YOU IF YOU JUST WANNA GIVE US A QUICK OVERVIEW OF YOUR PROJECT.
WELL, HAPPY VALENTINE'S DAY TO ALL OF YOU.
UH, HOPE YOU'RE HAVING A GREAT DAY.
UM, WE ARE EXCITED TO BRING TO YOU THIS OPPORTUNITY FOR A 452 UNIT PROPERTY LOCATED IN DISTRICT TWO, UH, NEAR THE, DOWN NORTH TOWARDS CENTER OF DALLAS, UM, ON 27 0 7 NORTH HU AVENUE.
UH, THE PROPERTY IS, UM, A BEAUTIFUL PROPERTY, UH, AND, UH, WE'RE VERY EXCITED TO BE ABLE TO PRESENT THIS TO YOU.
UM, SO I'M GONNA, UH, YOU GUYS, I THINK YOU KNOW WHO WE ARE.
WE WERE THE, UH, UH, SPONSORS OF THE BRISCOE, AND RECENTLY YOU APPROVED ANOTHER PROPERTY FOR US AS WELL, WE'RE WORKING ON RIGHT NOW.
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UH, AND THIS IS OUR THIRD PROPERTY WE'RE BRINGING FORTH TO YOU RIGHT NOW.UM, UM, SO I CAN MOVE ON IF YOU'D LIKE TO THE, IN INFORMATION ABOUT THE PROPERTY, IF THAT'S IMPORTANT AT THIS POINT.
UM, SO THE PROPERTY IS, UH, A, UM, WHAT WE CALL A WRAP PROPERTY.
THERE'S ACTUALLY THREE GARAGES.
UH, IT'S SET UP WITH, UH, THREE DIFFERENT, UH, GARAGES ON, UH, A LARGE PIECE OF PROPERTY.
UH, IT IS A VERY RESORT STYLE, SORT OF A, A COMMUNITY.
IT HAS THREE DIFFERENT SWING POOLS, A CLUBHOUSE, UM, ALL THE FEATURES OF WHAT YOU WOULD CONSIDER TO BE KIND OF A CLASS A APARTMENT PROPERTY.
THE PROPERTY WAS COMPLETED IN 2008, UH, BY REMO CORE RESIDENTIAL.
IT WAS, UH, PURCHASED, UH, FROM GRAY STAR, UH, COMMUNITIES IN AROUND 2022.
AND ESSENTIALLY, UM, THE CURRENT, UH, OWNER, UH, HAS INVESTED AROUND 10 MILLION IN THIS PROPERTY OVER THE LAST COUPLE OF YEARS.
SO IT'S BEEN SUBSTANTIALLY RENOVATED.
AND YOU CAN SEE THE NICE PICTURES OF THE CLUBHOUSE, THE AMENITIES INSIDE, UM, AND YOU KNOW, HOW THE ASSET CURRENTLY LOOKS.
UM, SO IN THIS REGARD, IT'S, IT'S, IT'S GOT ALL THE FEATURES YOU WOULD EXPECT OF ANY CLASS A PROPERTY TODAY.
UM, I WOULD LIKE TO GO FURTHER WITH IT AND JUST, UH, GO, MAYBE YOU CAN JUMP DOWN TO THE, UH, THE, THE, THE BENEFITS OF THE PROGRAM.
UH, SPECIFICALLY THEY GO TO THE, THE RESIDENT RENT SAVINGS, UH, SLIDE.
UM, SO IN ESSENCE, THIS IS PROBABLY ONE OF THE, UM, THIS ACTUALLY IS, IS, UM, HIGHER RENT SAVINGS FOR THE TENANT.
SO WHAT WE HAD AT THE BRISCOE, THE BRISCOE, WE HAD ABOUT 15% RENT SAVINGS.
THIS IS ACTUALLY ABOUT 20.5% RENT SAVINGS, UM, ON THE CURRENT RENTS IN PLACE.
SO WHEN WE ACTUALLY, UH, BRING IN THE, THE, UH, THE MIDDLE INCOME HOUSING, UH, TENANTS, UH, YOU'LL SEE THAT, UH, UM, THE, THE, THE RENT SAVINGS WILL BE IMMEDIATELY FELT BY EVERYONE IN THE COMMUNITY THAT WILL QUALIFY FOR THE 50% OF THE UNITS THAT WILL BE SET UP FOR 80% OF A I, UH, SO IT'S A VERY NICE, UM, UH, RENT SAVINGS FOR THOSE FOLKS THAT ARE BE LIVING THERE.
UM, 181 UNITS WILL BE, UH, LESS THAN 140% A I AND THEN 10% WILL BE NON-RESTRICTED AS WE'VE HAD IN THE PAST.
UM, GO TO THE NEXT SLIDE PLEASE.
UM, SO THE EQUITY, AS YOU KNOW, THE PROGRAM, ESSENTIALLY A HUNDRED PERCENT OF THE EQUITY ACCRUES TO, UH, D H F C, UH, THERE IS NO EQUITY PARTNER.
UH, THE D H FFC HAS THE RIGHT TO SELL, REFINANCE THE PROPERTY ANYTIME AFTER YEAR 15.
UM, AND THESE ARE SOME OF THE NUMBERS THAT YOU'LL SEE JUST AT YEAR 15 IN TERMS OF, OF THE COST BENEFIT TO THE PROPERTY TAX SAVINGS THAT WILL EFFECTIVELY BE, UM, UH, ALLOWING US TO LOWER THE RENTS.
AND THEN THE RESIDENCE SAVINGS IS ABOUT 40 MILLION IN YEAR 15.
UH, THE D F C WILL RECEIVE HALF A PERCENT OF THE, UM, EFFECTIVE REVENUE, WHICH EQUATES TO ABOUT ALMOST $860,000 A YEAR BY YEAR 15.
AND THEN THE DISPOSITION PROCEEDS NET OF PAYING OFF THE OUTSTANDING DEBT.
UM, THE TOTAL BENEFITS AT YEAR 15, OR WE EQUATE TO ABOUT 128 MILLION, WHICH IS ABOUT ALMOST 1050% OF THE TAX, UH, SUBSIDY THAT'S BEING, UM, DEFERRED.
THE TARGET, UH, COMPLETION OF THE BONDS, YOU CAN SEE IT INCREASES SUBSTANTIALLY USING THE, THE PROGRAM AND THE, AND USING, ASSUMING JUST A, A NOMINAL 3% RUN INCREASE.
UM, SO THAT'S, UH, THE, THE BENEFITS, THE EQUITY TO THE D F H C.
UM, THE NEXT PAGE, UH, IF I GO TO THE NEXT PAGE, PLEASE, THAT'S A SUMMARY GONNA TELL YOU EFFECTIVELY THAT, UM, THAT IT'LL PROVIDE OF THE TOTAL 226 UNITS WILL BE LOW INCOME, THE INCOME FAMILIES.
UM, AND I WANNA JUST WANNA NOTE AGAIN THAT AS, AS WE ALL KNOW, THAT UH, ABOUT 40%, ABOUT 30% OF ALL THE RENTERS ARE EXTREMELY RED BURDENED IN THE DEFINITION, WHICH THEY PAY OVER 40% OF THE INCOME.
SO THIS WILL REALLY HELP THE RESIDENTS IN THE COMMUNITY.
UM, ADDITION THERE IS THE SAVINGS WE MENTIONED ON THE, UH, YEAR ONE.
UH, THERE IS NOT RECOURSE FOR THE D H F C, UH, AS YOU KNOW, WE HAVE A VERY EXPERIENCED TEAM WHO'VE BEEN DOING THIS FOR A LONG TIME.
AND, UM, WE'VE BEEN VERY INVOLVED WITH THE PROGRAM FOR THE LAST THREE YEARS.
UH, VERY EXCITED TO BE HERE WITH YOU IN, IN DALLAS.
UM, AND AGAIN, THE DISPOSITION PROCEEDS I MENTIONED EARLIER, AND ESSENTIALLY, UM, IT'S READY TO BE CONVERTED IMMEDIATELY TO PUBLIC OWNERSHIP
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HERE ONCE WE GO THROUGH OUR PROCESS OF DUE DILIGENCE AND THEN BRINGING IT BACK THROUGH THE PROCESS FOR YOU TO PUT FINAL APPROVAL.SO AT THIS POINT, I'D LIKE TO ASK THAT WE, UM, UH, GET YOUR VOTE FOR APPROVAL APPROVAL, AND I'M OPEN TO ANY QUESTIONS YOU MIGHT HAVE.
UM, SO WHAT IS THE, UH, VACANCY RATE RIGHT NOW? UH, VACANCY RATE RIGHT NOW IS, UH, LESS THAN 5%, IF NOT MISTAKEN.
I HAVE TO GO BACK AND VERIFY THAT.
UM, BUT I BELIEVE IT'S, IT'S, IT'S OPERATING REALLY VERY WELL RIGHT NOW IN THAT REGARD.
THE REASON I'M ASKING IS BECAUSE I THINK THAT, UM, WE ARE NOW SEEING, UH, IN THE D F W AREA, UM, KIND OF A STABILIZATION OF RENTAL RATES.
AND I GUESS I'M JUST WONDERING IN THE CHART, YOU KNOW, WHEN YOU SAY MARKET RENT AS OPPOSED TO IN PLACE RENT, WHETHER THEY'RE REALLY GETTING THOSE MARKET RENTS.
YEAH, THAT'S A GREAT QUESTION.
UM, WE'RE ONLY $70, $80 OFF THE MARKET RENT RIGHT NOW IN TERMS OF LOSS TO LEASE IN THE, IN THE UNIT.
SO, UM, UH, YOU KNOW, THAT IS, THAT IS NOT SOMETHING THAT, I MEAN, THAT'S ESSENTIALLY, WE'VE SEEN SUCH INCREASE IN RENTS.
THIS IS NOT UNEXPECTED IN TERMS OF WHAT WE'VE SEEN OVER THE LAST YEAR IN DALLAS THE LAST COUPLE YEARS.
I THINK THERE'S BEEN, I'M NOT MISTAKEN.
I THINK IN THE, IN THE, IN TOTAL MARKET, THERE'S BEEN ABOUT 27% RENT INCREASE IN THE LAST TWO YEARS.
SO IT'S NOT EXPECTED TO SEE, TO SEE THIS KIND OF LOSS TO LEASE IN TERMS OF WHERE THE IN PLACE RENT ARE AND WHERE THE MARKET RENTS ARE, I GUESS.
SO CUZ THAT KIND OF WOULD AFFECT, YOU KNOW, WHERE YOU'RE GIVING THIS.
SO THE 20.5% WAS IN PLACE RENTS FOR THE SAVINGS, RIGHT? UH, 25% IS FOR THE, IT IS THE IN PLACE RENTS, YES.
SO, SO EVEN IF, YOU KNOW, WE COULDN'T GET WHAT YOU'RE SHOWING IS THE MARKET RENTS, IT WOULD STILL BE THAT KIND OF A SAVINGS, WHICH WOULD BE GREAT, RIGHT? THAT'S CORRECT.
UH, ANY OTHER QUESTIONS? UM, YEAH, QUESTION THE CURRENT OWNERS, IS THERE ANYBODY IN THE CURRENT OWNERSHIP GROUP WHO IS A PART OF THE GROUP THAT'S GONNA BE THE SPONSOR GROUP, WHICH WAS SAID FOR NO TRANSACTION? NO, NO.
THAT, THAT IS NOT LOOKED UPON IN A POSITIVE WAY.
SO WE, WE, WE ARE COMPLETELY SEPARATE FROM THE, FROM THAT, FROM THE, FROM THAT THE GROUP.
AND I ASSUME THERE'S GONNA BE AN APPRAISAL, UM, TO SUPPORT THIS? THE PURCHASE PRICE MAY HAVE.
SO THE BOND UNDERWRITERS GONNA REQUIRE THAT? THAT'S CORRECT.
UM, AND WHAT'S THE, UH, UH, YOU KNOW, GOING IN, WHAT'S, WHAT'S THE PROJECTED DEBT SERVICE COVERAGE FOR THE FIRST UNIT, SAY ONE TO THREE YEARS? I DIDN'T SEE, IS THERE A PROFORM HERE OR THERE IS, THERE WAS ONE.
UM, YEAH, CAN YOU JUST TELL US, I APOLOGIZE, I DON'T HAVE IT PULLED UP RIGHT NOW.
I, I NEED TO GET BACK TO YOU ON THAT.
I DON'T HAVE THAT IN FRONT OF ME.
UM, THE SPONSOR BOND, HOW, LOOKS LIKE IT'S, SINCE THE INTEREST RATE WOULD BE AROUND 10%, IS IT, HAVE YOU FIXED WHAT THE RATE WOULD BE ON THE SPONSOR BOND? AND IF AND HOW IS THAT DETERMINED? SPONSORED BOND IS REALLY DETERMINED BY, BY WORKING WITH YOU, UH, WITH THE AUTHOR, WITH THE AUTHORITY IN YOUR CASE, THE D H FFC.
UH, IT'S BEEN PRETTY, IT'S BEEN A, A PRETTY COMMON PRACTICE THROUGHOUT ALL OF THE, UH, PROPERTIES THAT WE'VE BEEN INVOLVED WITH THAT THE SPONSOR WILL RECEIVE, UH, SUB UH, UH, SUBSIDIZED, UH, I'M SORRY, A SUBORDINATED, UH, C BOND IN THE PROCESS BE YOUR C BOND.
UH, AND THAT RATE WILL BE AT 10%.
SO BRAD, WAS IT IN THE PAST, HAS, HAS IT BEEN KIND OF A STEPPED UP RATE OR HAS IT BEEN A LEVEL 10%? UH, IT, YEAH, GOOD QUESTION.
SO IT DEPENDS ON, ON HOW THE DEAL FILING GETS CUT.
AT THE END OF THE DAY, IT COULD BE STEPPED UP OR IT COULD BE FIXED.
MOST OF THE TIME IT'S A FIXED RATE FROM DAY ONE.
THAT IT, YEAH, THAT'S ALL MY QUESTIONS.
AND I GUESS, UM, THIS PROPERTY, I GUESS WE DON'T HAVE TOO MUCH CONCERN THAT THERE'S PLENTY OF, UM, GROCERY STORES AND, UM, AND THOSE KINDS OF AMENITIES.
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AND, UM, WHAT WOULD THE SCHOOLS BE? SCHOOL DISTRICT, I HAVE TO LOOK INTO THE SCHOOL DISTRICT, ELEMENTARY AND SO FORTH.WILL THEY BE RUNNING? WELL? WE HAVE THAT PROBLEM NOW.
UH, ANY OTHER QUESTIONS? YEAH, MR. GRIGGS, HOW DID Y'ALL IDENTIFY THE SUBJECT PROPERTY? HOW'D Y'ALL FIRST COME TO IDENTIFY THIS PROPERTY? WELL, WE ARE ACTIVELY LOOKING AND SEARCHING FOR PROPERTIES THAT COME OFF MARKET.
WE'RE NOT TRYING TO GO OUT AND, YOU KNOW, USE THE TYPICAL SORT OF, UH, BROKERAGE COMMUNITY.
UM, SO WE HAVE A LOT OF CONTACTS, PEOPLE WE KNOW IN THE INDUSTRY.
UM, AND SO PART OF OUR TEAM, THAT'S WHAT THEY DO AND THEY GO OUT AND CONTACT OWNERS AND THIS IS HOW WE FOUND THIS PROPERTY.
HAVE Y'ALL LOOKED AT, OR WERE YOU, ARE THERE ANY OTHER PROPERTIES IN THAT SAME GENERAL VICINITY THAT YOU, YOU WERE THINKING ABOUT OR POTENTIALLY IN DISCUSSIONS WITH OTHER REPRESENTATIVES TO SEE IF THEY WERE AVAILABLE? OR IS THERE ANYTHING ELSE? OR IS THIS ONE THAT, IS THE OTHER ONE THAT'S AVAILABLE THAT YOU'RE AWARE OF IN THAT, IN THIS PARTICULAR JUST, YEAH, GOOD QUESTION.
AND IN, IN THIS PARTICULAR DISTRICT, THIS IS THE ONLY ONE WE'VE BEEN ABLE TO FIND THAT REALLY WE LIKE, THAT WE THINK HAS THE SAVINGS AND, UH, THE BENEFITS FOR THAT.
I MEAN, THE, THE QUALITY OF THE ASSET LOCATION, THE RENT SAVINGS, YOU KNOW, THINGS THAT WE'RE LOOKING FOR THAT WE KNOW WILL BE A GOOD ASSET FOR YOU TO OWN FOR YEARS TO COME.
SO THAT'S, THAT'S WHAT WE'RE TRYING TO FIND IS THOSE KINDS OF ASSETS.
AND, UM, THIS IS ONE THAT WE THINK FITS THE, FITS THE, THE BOX THAT I SAY.
SO WE HAVEN'T BEEN ABLE TO FIND ANOTHER ONE YET IN THIS PARTICULAR DISTRICT YET.
AND WHAT WAS INCLUDED IN THAT 10 MILLION IN CAPITAL IMPROVEMENT, UM, THAT THEY DID BEFORE? YES, SIR.
UM, THEY DID, UM, $650,000 OF EXTERIOR WORK, WHICH INCLUDED EVERYTHING FROM FENCING TO GENERAL REPAIRS TO PAINTING TO ROOFS, ROOFS, THAT SORT OF THING.
THEY PUT 2.1, 2.2 MILLION INTO GENERAL AMENITIES.
THEY DID CLUBHOUSE AND LEASING CENTER, FITNESS CENTERS, LANDSCAPING POOLS, PACKAGE ROOM SIGNAGE, SMART HOME PACKAGE, GENERAL AMENITIES.
UH, THE INTERIORS, THEY IMPROVED THE UNITS WHERE, WHERE THEY PUT IN FOR PAINT, FLOOR APPLIANCES, COUNTERTOPS, KITCHEN, BLACK SPLASHES, YOU KNOW, CABINET DOORS, FIXTURES, BASEBOARDS, TUBS, SURROUNDS, LABOR, MISCELLANEOUS FOR ALMOST 6.1 MILLION.
SO THEY, THEY HAD, UM, A LOT IN THERE.
SO THEY, THEY DID A LOT OF WORK ON THIS PROPERTY.
AND ARE YOU ALL, DO Y'ALL ANTICIPATE ANY ADDITIONAL SUBSTANTIAL CAPEX AS WE GO IN OR POTENTIALLY GOING INTO THE PARTY? WE HAVE BUDGETED, UM, OVER $4 MILLION FOR WHAT WE CONSIDER TO BE DEFERRED CAPEX ON A PROPERTY LIKE THIS.
WE'RE JUST MAKING SURE WE HAVE THE MONEY IN THE BUDGET BECAUSE ONE OF THE THINGS ABOUT THE PROGRAM IS YOU WANNA MAKE SURE YOU HAVE ENOUGH MONEY IN THE, IN THESE, IN THESE, YOU KNOW, UH, RESERVES SO THAT IN THE CASE SOMETHING COMES UP, YOU WANNA MAKE SURE YOU CAN TAKE CARE OF IT.
SO THAT'S, WE PUT A LOT OF MONEY IN THIS JUST TO MAKE SURE THAT WE HAVE ENOUGH, KNOWING THAT IT'S A LARGE NUMBER OF UNITS AND THAT WE'RE GONNA OWN THIS FOR A LONG TIME.
UM, ANY QUESTIONS FOR THE ONLINE GROUP? ANY HANDS RAISED, NOT SEEING ANY.
DOES SOMEONE WANNA PUT A MOTION ON THE FLOOR MOVE FOR APPROVAL? AND DO I HAVE A SECOND? I SECOND THAT, PATTY? YES.
UM, WE'LL GO THROUGH THE LIST.
UH, DID VICE PRESIDENT GARCIA EVER GET TO, I DON'T THINK YOU EVER, UM, SECRETARY PAGE.
IN FAVOR, UH, I GUESS DIRECTOR LEWIS NEVER CAME ON.
AND DIRECTOR COLLINS IN FAVOR.
MOTION PASSES, UH, ONTO THE NEXT ITEM.
CONSIDER AND ADOPT A RESOLUTION APPROVING A MEMORANDUM OF UNDERSTANDING WATERFORD PROPERTY COMPANY FOR THE ACQUISITION OF AVERA MIDTOWN, A MULTIFAMILY RESIDENTIAL DEVELOPMENT LOCATED AT 82 50 MEADOW ROAD, AND THE CREATION WITH THE TEXAS SECRETARY
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OF STATE OF A LIMITED LIABILITY COMPANY TO OWN THE DEVELOPMENT WITH THE CORPORATION AS THE SOLE MEMBER TO BE NAMED D H F C, AVERA MIDTOWN, L L C, AND APPROVING THE FORM OF A LIMITED LIABILITY COMPANY AGREEMENT.I THINK WE HAVE, UH, MR. SEAN ROSSON HERE.
YOU CAN IF IT COME UP AND SIT NEXT TO DIRECT PAGE.
WHERE, WHEREVER, WHEREVER MAKES THE MOST SENSE.
WE HAVE YOUR PRESENTATION LOADED UP, READY TO GO.
SO, UH, WELL, GOOD AFTERNOON EVERYONE.
UH, I'M SEAN ROSSON, THE CO-FOUNDER OF WATERFORD PROPERTY COMPANY.
UH, WE ARE MULTI-FAMILY DEVELOPERS AND INVESTORS, UH, WITH JUST OVER 6,500 UNITS IN OUR PORTFOLIO.
AND ABOUT 85% OF THOSE UNITS ARE INCOME RESTRICTED AT EITHER DEEP, AFFORDABLE, 50 AND 60%, A AMI OR, UM, TRADITIONAL MODERATE WORKFORCE HOUSING IN THE 60 TO 140% A M I SPACE.
UM, THE LAST THREE YEARS WE'VE BEEN VERY ACTIVE IN THIS WORKFORCE HOUSE HOUSING, UH, BOND FINANCING PROGRAM IN CALIFORNIA.
UM, WE'VE DONE A LITTLE OVER 2.1 BILLION OF ACQUISITIONS IN CALIFORNIA.
UM, WE'RE BASED IN CALIFORNIA.
WE'RE IN THE PROCESS OF OPENING AN OFFICE HERE IN TEXAS.
UH, WE'RE EXCITED TO BE HERE TODAY TO PRESENT AVERA MIDTOWN, UM, WHICH WILL BE OUR FIRST, UM, HOPEFUL ACQUISITION, UH, IN, IN THE CITY OF DALLAS.
UM, I CAN JUMP INTO THE PROJECT, IF YOU DON'T MIND.
GOING TO THE NEXT SLIDE, AARON.
SO, AVERA MIDTOWN IS A 422 UNIT PROJECT, UM, LOCATED AT 82 50 MEADOW ROAD.
UM, WHAT WE LIKE ABOUT THIS PROJECT, IT'S ADJACENT TO, UM, HIGHWAY 75, UH, ABOUT THREE BLOCKS TO THE EAST OF HIGHWAY 75.
AND THEN IT IS LITERALLY A, ABOUT, I WALKED IT THE OTHER DAY, ABOUT A FIVE MINUTE WALK TO THE, THE WALNUT HILL, UH, DART STATION, UM, FROM A PRO REGIONAL PROXIMITY LOCATION, UM, THE PROPERTIES NEAR MAJOR EMPLOYER, EMPLOYERS, SPECIFICALLY PRESBYTERIAN, TEXAS HEALTH.
UM, AND IF YOU LOOK AT THE, THE TARGET DEMOGRAPHIC FOR, UH, THESE TYPES OF PROJECTS, YOU KNOW, REALLY WHAT WE'VE, UH, WHAT WE SEE THROUGHOUT OUR PORTFOLIO IS THAT IT'S, UH, HEALTHCARE PROFESSIONALS, IT'S GOVERNMENT EMPLOYEES, UM, PUBLIC SAFETY EMPLOYEES, BOTH POLICE AND FIRE NONPROFIT EMPLOYEES, UM, MEMBERS OF LABOR AND, AND, UH, UM, UH, SERVICE EMPLOYEES AS WELL.
UM, AND SO FROM JUST A, AN ACCESS TO PUBLIC TRANSIT, UM, ALSO THE PROXIMITY TO, UM, THE, THE TWO TRAILS THAT ARE JUST TO THE NORTH OF THE PROPERTY, UH, COTTONWOOD TRAIL AND WHITE WALK TRAIL, WE THINK THAT THIS PROPERTY MAKES A LOT OF SENSE, UM, FOR, FOR THIS PROGRAM.
UM, ERIN, IF YOU DON'T MIND GOING TO THE NEXT SLIDE.
SO WHAT WE'RE PROPOSING, UM, FROM AN AFFORDABILITY LEVEL, UM, IS SIMILAR TO, UH, THE PREVIOUS PROJECTS THAT YOU'VE SEEN HERE.
UM, UM, AND SIMILAR TO, UH, WHAT, UH, MR. GRIGS FROM OPPORTUNITY HOUSING JUST, UH, PRESENTED ON THEIRS WHERE 50% OF THE UNITS WILL BE AFFORDABLE TO 80%, UM, AMI AND BELOW.
AND THEN, UM, 40%, UM, OF THE UNITS WILL BE AFFORDABLE BETWEEN 140% AMI BELOW, UM, AND THEN REMAINING AT, AT MARKET.
SO WITH THAT TRANSLATES TO IS ABOUT A 15.4 DISCOUNT, UH, IMMEDIATE DISCOUNT TO WHERE IN PLACE RENT ARE TODAY.
UM, AND I, I HEARD THE PREVIOUS QUESTIONS FROM THE PREVIOUS, UH, PRESENTER.
UM, THOSE ARE THE, THE CURRENT MARKET RENTS ARE THE IN PLACE RENTS.
UM, AND SO, YOU KNOW, WE'LL SEE ABOUT A $282 A MONTH IMMEDIATE RENTAL SAVINGS, UM, AT THE PROPERTY FOR THE RESIDENCE, UM, AND YEAR ONE SAVINGS, BUT TIME, FOR INSTANCE, THE 15 YEAR RENTAL SAVINGS IF THE PROPERTY WOULD BE 38 MILLION 165, 293.
SO SIGNIFICANT RENTAL SAVINGS, UM, AT THE PROPERTY.
IF YOU DON'T MIND GOING TO THE NEXT SLIDER.
UM, SO I, I JUST MENTIONED WHAT THE 15 YEAR, UM, THIS LOOK, THIS ASSUMES A 40 YEAR AGGREGATE HOLD.
SO I'LL START WITH THE, THE, THE 40 YEAR, UM, STATISTICS, AND THEN I'LL, I'LL ACTUALLY GO THROUGH THE 15 YEAR AS WELL.
ESSENTIALLY WHAT WE'RE SHOWING HERE, THIS IS THAT OVER THE, THE LIFE OF THE PROJECT, UM, THAT MR. GRIGGS TOUCHED ON IT, HIS PRESENTATION STARTING IN YEAR 15, THE, UH, HFC CAN DECIDE TO, UM, REFINANCE OR SELL THE PROPERTY.
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BUT IF YOU WERE TO GO THROUGH THE ENTIRE OLD PERIOD AND PAY OFF THE BONDS, THE TOTAL RENTAL SAVINGS WILL BE, UM, 101 MILLION 775, 7 95.UM, AND, AND WHAT THAT TRANSLATES TO IS THAT OVER THAT PERIOD, THE CITY, UM, WOULD BE GIVING UP, UH, JUST UNDER 36 MILLION IN TOTAL TAX LOSS.
BUT THE, THE NET RESIDUAL IN ADDITION TO THE RENTAL SAVINGS WOULD BE, UM, 226 MILLION, 2 99, 549.
SO YOU SEE A SIGNIFICANT RESIDUAL AT THE END OF IT.
UM, THE 15 YEAR RESIDUAL, UM, ON THIS PROPERTY WOULD BE 84 MILLION 862, 300 $30.
SO, UM, I KNOW I THREW A LOT OF NUMBERS OUT THERE, BUT I WANTED TO JUST MAKE SURE THAT WE, WE TOUCHED ON THAT.
UM, IF YOU DON'T MIND, GO TO THE NEXT SLIDE.
SO, UM, YOU TALK ABOUT THIS RENT INCREASE CARE, BUT, UM, IT SEEMS LIKE WHAT WE'VE BEEN DOING IS WE'VE BEEN USING THE CALCULATOR TO DETERMINE THE RENTS SO THAT THEY'RE AT THAT 30% LEVEL, CORRECT.
SO THAT, THAT WAS, UH, AND THAT'S, THAT'S WHAT YOU I'VE BEEN DOING, AND WE'RE FINE DOING IT THAT WAY.
UM, THERE'S DIFFERENT SCHOOLS OF THOUGHT IN TERMS OF HOW YOU DO IT.
YOU CAN JUST CAP RENTS OR YOU CAN JUST RECALCULATE THEM.
BUT I KNOW IN PREVIOUS PROJECTS YOU'LL JUST DO THE, THE RECALCULATION BASED AT THE 30% LEVEL AND, AND WE'RE FINE DOING THAT.
SO THAT'S, IT WOULD, IT WOULD BE DONE THAT WAY AS OPPOSED TO THIS, CORRECT.
AND, AND I APOLOGIZE THAT WAS A TYPO FROM A, A PREVIOUS PRESENTATION, BUT THAT'S A, THAT'S A GREAT, GREAT CATCH.
UM, UM, THE TARGET DEMOGRAPHIC, I, AS I MENTIONED, I, I TOUCHED ON IT, BUT YOU KNOW, IT REALLY, IT'S, IT'S THE MISSING MIDDLE.
UM, AND IT'S FOLKS THAT, THAT MAKE TOO MUCH TO QUALIFY FOR TRADITIONAL AFFORDABLE HOUSING, BUT ARE SPENDING AN INORDINATE AMOUNT OF THEIR MONTHLY INCOME ON, ON, ON THE HOUSING.
UM, ERIN, IF YOU DON'T MIND GOING TO THE, THE NEXT SLIDE, PLEASE.
UM, SO, UM, SO JUST BACKGROUND.
SO, UM, AS I MENTIONED, THE, THE, THE STRUCTURE, UM, OF THIS IS THAT WATERFORD PROPERTY COMPANY WILL BE THE PROJECT ADMINISTRATOR.
UM, WE WORK WITH GOLDMAN SACHS TO, TO ISSUE THE BONDS AND SELL THE BONDS.
AND THEN WE BRING IN GRAY STAR AS OUR PROPERTY MANAGER.
UH, RIGHT NOW GRAY STAR MANAGES, UH, JUST OVER 4,100 UNITS, UH, FOR WATERFORD IN OUR PORTFOLIO.
SO WE'VE GOT A LONG STANDING, DEEP RELATIONSHIP WITH GRAY STAR.
AND, YOU KNOW, THIS IS, WE SPECIALIZE IN INCOME RESTRICTED HOUSING.
AND SO THIS IS SOMETHING THAT THE WATERFORD TEAM IS VERY, UM, ADEPT AND, AND VERY EXPERIENCED, UH, IN, IN DOING, UM, FOR ALL TYPES OF AFFORDABLE HOUSING.
UM, AARON, IF YOU DON'T MIND GOING TO THE, THE NEXT SLIDE.
THIS IS, UM, AN EXAMPLE OF OTHER, UM, MIDDLE INCOME PROJECTS THAT WE HAVE IN OUR, OUR PORTFOLIO.
UM, AND I THINK THIS, THIS SPEAKS TO THE QUALITY OF THE ASSETS, THE QUALITY OF THE ASSET MANAGEMENT IN A VERY MIDTOWN, UM, IS A VERY SIMILAR, UM, UM, QUALITY ASSET.
IT'S A 2017 CONS, UH, BUILT ASSET.
UM, IN TERMS OF AMENITIES, IT HAS A, UM, FULLY AMENITIZED CLUBHOUSE, UM, WORKOUT FACILITY POOL.
IT HAS EXTERIOR, UH, KITCHEN AND BARBECUE AREA.
IT HAS, UH, ENERGY SAVER APPLIANCES FOR THE TENANTS AND UNIT WASHERS AND DRYERS.
AND SO FROM A, FROM A LIVING EXPERIENCE, UM, YOU KNOW, THIS IS A VERY, UM, WELL DESIGNED, UM, AND WELL KEPT AND, AND A CLASS, A MULTIFAMILY ASSET THAT WE THINK FITS REALLY WELL, UH, FOR THIS, FOR THIS PROGRAM.
AND BECAUSE ULTIMATELY THE, UH, HFC, UM, BECOMES THE RESIDUAL OWNER, THIS IS A, A PROPERTY THAT WE THINK WOULD FIT EXTREMELY WELL, UM, INTO, INTO THE, THE LONG TERM PORTFOLIO.
UM, AARON, IF YOU DON'T MIND GOING TO THE, I THINK THERE'S ONE MORE SLIDE, I BELIEVE, UM, AND AGAIN, YOU KNOW, THERE'S, THIS IS, YOU GUYS ARE FAMILIAR WITH THE STRUCTURE, BUT OBVIOUSLY THE HFC OWNS THE ASSET.
THERE'S A REGULATORY AGREEMENT THAT'S RECORDED ON IT.
UM, WE PROVIDE FINANCIAL REPORTING AND ASSET MANAGEMENT FUNCTIONS ON BEHALF OF THE HFC.
AND THEN ULTIMATELY, UM, THE HFC IS THE RESIDUAL BENEFICIARY TO, TO ALL THE LONG-TERM EQUITY AT THE OUTSET.
UM, I THINK THAT'S THE ENTIRETY OF OUR PRESENTATION, ERIN, SO I'M HAPPY TO, UH, THOSE WERE JUST SOME TESTAMENTS OF, UH, OF TENANTS.
[00:30:01]
BUT, UM, BUT I HAVE TOUCHED ON, UM, YOU KNOW, REALLY THE BULK OF, UH, OF WHAT OUR TENANT DEMOGRAPHIC LOOKS LIKE, BUT I'M HAPPY TO OPEN IT UP FOR QUESTIONS.SO I HAD A QUESTION ABOUT, UM, THE GROUND LEASE NATURE OF THIS DEAL.
COULD YOU EXPLAIN THAT? YEAH, SO I, I KNOW THAT, SO TAKING A STEP BACK, SO IN THIS PROGRAM, THERE HAVE BEEN OTHER GROUND LEASE TRANSACTIONS.
UM, IT'S SOMETHING THAT WE'VE SPENT QUITE A BIT OF TIME WITH OUR UNDERWRITERS COUNCIL AND OUR, UM, OUR BOND TEAM, UH, AT GOLDMAN SACHS.
AND SO THERE, THERE'S PRECEDENT, UM, FOR MOVING FORWARD WITH, WITH A GROUND LEASE.
TO YOUR POINT, UM, AS IT RELATES TO THIS ASSET, UM, THE TERM OF THE GROUND LEASE, IT'S A 99 YEAR GROUND LEASE, UM, WITH, THERE'S, I THINK 94 YEARS OF TERM REMAINING.
UM, SO IT'S A VERY FINANCEABLE ASSET.
YOU KNOW, TYPICALLY 99 YEARS IS THE LONGEST THAT YOU CAN HAVE A GROUND LEASE FOR.
SO, UM, ASSUMING LET'S ASSUME THAT THERE WAS A REFINANCE OR A SALE IN YEAR 15, UM, THERE WOULD BE ROUGHLY 79 YEARS OF TERM LEFT.
SO THERE WOULD STILL BE SIGNIFICANT TERM.
THERE'S STILL SIGNIFICANT RESIDUAL EQUITY AT THE ASSET.
UM, SO I'LL STOP, I DON'T KNOW IF I ANSWERED YOUR QUESTION WELL, CAUSE YOU KNOW, OF COURSE, UM, WHEN YOU GAVE THESE, UH, YOUR 40 FIGURES WHEN YOU'RE DEALING WITH A GROUND LEASE, THEN YOU'RE GONNA HAVE SOME DISCOUNT THERE.
YEAH, I, SO WHAT WE FOUND IS IN TERMS OF, YOU KNOW, THE SALES VALUE AT THE END OF THE GROUND LEASE, IF YOU HAVE, YOU KNOW, CALL IT TWO YEARS OR, OR TWO YEARS OF FINANCING OR TWO, TWO TIMES THE AMORTIZATION TERM OF THE, OF, OF THE GROUND LEASE LEFT, YOU GET CLOSE TO WHERE, WHERE MARKET IS.
AND SO, YOU KNOW, THE TYPICAL AMORTIZATION PERIOD FOR A MARKET RATE PROJECT WOULD BE 30 YEARS.
SO, FOR INSTANCE, IF THERE WAS A SALE OR A REFINANCE OF THE ASSET, CALL IT IN YOUR, UM, 79, YOU KNOW, OUR ANALYSIS SHOWS THAT YOU WOULD BE GETTING AT MARKET FOR THE VALUE OF THE ASSET.
TO YOUR POINT, IN TERMS OF IF YOU WENT ALL THE WAY TO YEAR 40, AND NOW LET'S SAY YOU HAD, UM, 39, 39 YEARS OF, THERE WOULD BE A DISCOUNT ASSOCIATED WITH THAT, YOU KNOW, I WOULD TELL YOU THAT THAT'S HARD TO, TO ANALYZE EXACTLY WHAT THAT DISCOUNT WOULD BE.
UM, BUT THERE'S STILL GONNA BE SIGNIFICANT LONG-TERM EQUITY IN DS.
WHY DO YOU THINK IT, AND HOW DID IT BECOME GROUND LEASED FROM THE START? SO IT'S A GREAT, YOU KNOW, GROUND LEASE IS, THERE'S, THERE'S MULTIPLE ASSETS THAT HAVE GROUND LEASES, RIGHT? AND, AND, AND REALLY TO YOUR POINT, IT'S A GREAT QUESTION.
UM, IT JUST COMES DOWN TO, YOU KNOW, WHO THE, THE OWNING ENTITY IS IN THIS INSTANCE.
UM, IT'S A, I THINK, PRIVATE FAMILY AND THEY JUST DECIDED TO ENTER INTO A LONG-TERM GROUND LEASE.
UM, WE WILL WORK WITH, DID THEY OWN THE WHOLE THING THAT'S NOW UNDER THESE DE RESTRICTIONS? SO, WELL THEY OWN THE FEE TITLE OR THE FEE LAND, UH, BUT THEY OWN, SO ALL OF IT.
SO DID THEY OWN THAT BIG AREA THAT HAS MORE THAN THIS DEVELOPMENT IN IT? AND THEN THEY DECIDED TO TAKE, I, I THAT'S, I DON'T KNOW IF THEY OWN THE ADJACENT PARCELS.
I CAN GET BACK TO YOU ON THAT.
THAT'S A, THAT'S A GREAT QUESTION.
UM, BUT I DO KNOW THAT THEY OWN THE FEE TITLE UNDER THIS ASSET, UM, AND I GUESS IS RYAN, RYAN OR NORA ON RYAN OR NORA ON.
AND SO, UM, I GUESS, UM, I, I ASSUME THAT THAT DOESN'T INTERFERE WITH THE TAX EXEMPTION.
UM, YOU KNOW, I I, I, I WOULD HAVE CONCERNS ABOUT THAT AND I, I THINK THAT, UM, AARON, YOU MAY HAVE HAD A CONVERSATION WITH, UH, UH, RACIAL EARLIER THIS WEEK.
UM, BUT IF THE H FFC DOES NOT OWN THE PROPERTY, UM, YOU KNOW, UNDERLYING PROPERTY, I, I THINK THERE WOULD BE A CONCERN WE WE'D LEAST HAVE TO, UH, VET THAT WITH THE APPRAISAL DISTRICT, CUZ THAT THAT'S NOT TYPICAL.
NO, AND I CAN'T SPEAK ON BEHALF BEHALF OF YOUR TAX COUNCIL.
WHAT I HAVE RUN IT BY IS OUR UNDERWRITERS COUNCIL AND OUR COUNCIL, BECAUSE WE'VE BEEN PARTY TO THESE TRANSACTIONS.
NOW, AGAIN, IT'S IN CALIFORNIA.
HAVE YOU DONE THEM IN TA? HAVE YOU DONE THEM IN TEXAS THOUGH? NO, I, I, AND THAT'S A, WE, UM, I KNOW THAT A DIFFERENT LEGAL ANALYSIS IN TEXAS THAN THERE IS IN CALIFORNIA.
AND I, AND SO OUR ANALYSIS HAS BEEN THAT IT'S, THAT IT'S FEASIBLE, BUT I REALIZE THAT WE WOULD NEED TO, TO DO SOME ADDITIONAL ANALYSIS.
AND THEN, UM, SO THERE IS THEN ALSO THIS SET OF D RESTRICTIONS AND, UH, YOU KNOW, GIVE ME A FLAVOR OF WHAT THE NATURE OF
[00:35:01]
THOSE ARE.SO THE, WE'RE GOING THROUGH THE, THE TITLE ANALYSIS AS WE SPEAK.
UM, BUT IN TERMS OF THE D RESTRICTIONS, IT DOESN'T AFFECT THE OPERATIONS OF, OF THE, UM, THE PROPERTY.
UM, THE PROPERTY WAS BUILT WITH THOSE SAME D RESTRICTIONS IN PLACE, AND THEN IT HAS, IT HAS ZERO EFFECT ON THE AFFORDABILITY.
SO AT THIS POINT, UM, YOU KNOW, WE'RE, WE HAVEN'T SEEN ANY D RESTRICTIONS THAT WOULD PREVENT US FROM MOVING FORWARD WITH THIS TRANSACTION.
AND, UM, WHAT WAS MY FINAL QUESTION? I HAVE ONE OTHER QUESTION.
UH, FOR ANYBODY ELSE WHO HAS, OH, THE FINAL ONE THAT I HAD ALREADY CONVEYED WAS, UM, WHAT'S THE CRIME RATE LIKE? YEAH, SO FOR THE, FOR THAT ZIP CODE, UM, WHICH IS 7 52 31, UM, YOU KNOW, IT'S, IT'S JUST ABOVE WHERE THE, UM, THE DALLAS CITY OF DALLAS AVERAGE IS.
UM, AND WE WERE LOOKING AT CRIME RATE BASED ON ZIP CODE.
SO IT IS SLIGHTLY HIGHER THAN, UM, UM, THE, THE, THE OVERALL CITY'S AVERAGE.
UM, YOU KNOW, IN TERMS OF, UM, I CAN SEND YOU SPECIFICS, UM, IN TERMS OF LIKE, YOU KNOW, SERIOUS CRIMES, HOMICIDES, THINGS LIKE THAT.
UM, BUT JUST IN TERMS OF GENERAL, IT'S SLIGHTLY HIGHER THAN CITY OF DALLAS.
AND, UM, HAVE YOU ASKED THE, UH, SELLER WHAT THEIR EXPERIENCE HAS BEEN? YEAH, SO THE, THE CURRENT OWNER, THEY'VE OWNED IT FOR FIVE YEARS.
UM, AND THEY'VE, UM, YOU KNOW, AGAIN, THE ASSET WAS BUILT IN 2017.
UM, WE'VE DUG INTO THE OPERATIONS, UM, WE'VE ACTUALLY ALREADY DONE ALL OF OUR ONSITE THIRD PARTY DUE DILIGENCE, UM, WHICH IS CONSISTS OF OUR, OUR APPRAISAL, UM, THE ASSET SHE APPRAISED FOR ABOVE WHAT WE'RE PAYING FOR IT.
UM, AND THEN THE PCA, WHICH IS THE PROPERTY CONDITION ASSESSMENT, UM, OPERATIONALLY, THE, THE PROPERTY'S BEAUTIFUL AND, AND THE, THE CURRENT SELLER, UM, SO THAT THEY, OUTSIDE OF JUST NORMAL WEAR AND TEAR AND NORMAL JUST OPERATIONS OF HAVING A 422 UNIT PROJECT, THERE HASN'T BEEN ANYTHING, YOU KNOW, EXTRAORDINARY THAT, THAT THAT'S HAPPENED, UM, AT THE SF.
ANYBODY ELSE?
SO IF I'M LOOKING AT THE TERMS OF THE, UH, SPONSOR BOND AND A FEE ON THIS BILL COMPARED TO THE ONE WE JUST, UM, VOTED TO, TO SUPPORT, UM, BUT I LOOK AT THE LAST ONES THAT THE FIRST TIME IN AGENDA WAS 125 MILLION PURCHASE PRICE, 160 MILLION BONDS, AND THIS ONE IS AN 85 MILLION PURCHASE, 104 MILLION BONDS.
BUT THE SPONSOR BOND, THE AMOUNT OF SPONSOR BOND IN BOTH CASES IS 5 MILLION.
INTEREST RATE IS THE SAME AND A 2 MILLION FEE IN BOTH CASES.
SO YES, IT SEEMS LIKE THIS ONE'S MUCH, UH, MUCH RICHER DEAL, UH, RELATIVE TO THE OTHER ONE.
I MEAN, IT, UM, YOU KNOW, I THINK THAT FEES LOT STUFF WITH THE YEAH.
YOU KNOW, IT'S, IT'S, SO THAT'S THE, THE, SO WE'RE VERY FAMILIAR, UM, WITH, UM, OPPORTUNITY HOUSING.
AND SO I KNOW MR. GREGS, UH, UM, AND, UH, YOU KNOW, I WILL TELL YOU THAT FROM PRECEDENT, UM, IN OTHER TRANSACTIONS, UM, THESE FEES ARE IN LINE WITH, WITH OTHER TRANSACTIONS WE'RE, YOU KNOW, HAPPY TO HAVE A CONVERSATION ABOUT THAT.
UM, TO YOUR POINT ABOUT THE SPONSORSHIP BONDS, YOU KNOW, THIS, THE, THE, THE, THE PURPOSE OF THE BOND IS TO CREATE AN ALIGNMENT OF INTEREST YEAH.
BETWEEN THE SPONSOR, THE BOND INVESTORS, AND ULTIMATELY THE HFC.
BECAUSE AT THE END OF THE DAY, THE INVESTORS WANT TO KNOW THAT IT, THAT THERE'S SOMEONE THAT HAS A FINANCIAL INTEREST IN THIS PROPERTY, AND IF ADDITIONAL CAPITAL NEEDS TO BE PUT BACK INTO IT, UM, THAT SOMEONE WILL DO.
SO HENCE THE BONDS FOR US, BECAUSE OBVIOUSLY, UM, YOU KNOW, WE WOULDN'T, WOULDN'T WANT TO DO ANYTHING THAT WOULD, UM, UM, YOU KNOW, DESTROY OUR, OUR LONG-TERM, UH, BOND BOND PROCEEDS.
UM, SO WE'RE GONNA MAKE SURE THAT, AND SO IT'S, IT REALLY CREATES THAT ALIGNMENT OF INTEREST.
UM, TO YOUR POINT ON THE UPFRONT ACQUISITION FEE, UM, YOU KNOW, I, I, AGAIN, I'M NOT FAMILIAR WITH THE, THE PROJECT THAT YOU MENTIONED, BUT IN GENERAL,
AND SO THAT'S WHAT WE WERE GOING OFF OF.
WE'VE DONE 15 OF THESE, AND SO WE WERE JUST GOING OFF HISTORICAL PRECEDENT AND IS IT TRUE THAT WE WOULDN'T BE PAYING THE PROJECT ADMINISTRATION FEE FOR THE FIRST FOUR YEARS? CORRECT.
THE, SO THAT KIND OF, YOU KNOW WHAT I MEAN? LIKE THAT'S $211,000 PER YEAR FOR FOUR YEARS, AND ARE WE PAYING ON THE FIRST ONE ON OUR PREVIOUS DEALS? WE PAID
[00:40:01]
IT FROM DAY ONE.SO THAT'S JUST THE WAY YOU TEND TO STRUCTURE IT.
IT'S JUST WE WILL LOOK AT DIFFERENT WAYS TO SIZE AND MAKE THE PROJECT MORE CREATIVE AND THAT, THAT'S ULTIMATELY HOW WE, WE DECIDED TO DESIGN IT ON THIS ONE.
I, YEAH, I GUESS I, I GET THE CONCEPT OF THE ALIGNMENT OF INTEREST.
IT'S, IT'S, I, WHAT I'M STRUGGLING WITH IS THAT, UM, YOU KNOW, WE'VE GOT TWO DEALS SIDE BY SIDE, ONE'S SIGNIFICANTLY, LARGELY OTHER YET IN THE, THE SIZE THE SPONSOR FEES ARE SUBSTANTIALLY.
AND THE SPONSOR BOND IS, IS THE SAME WITH BOTH.
AND I WOULD THINK THAT, UM, IT SHOULD TRACK, UM, THE SIZE OF THE DEAL, UM, JUST LIKE, UH, YOU KNOW, DEVELOPMENT DEVELOPMENT DEVELOPMENT FEES.
IT'S KIND OF A FIXED PERCENTAGE OF WHATEVER THE TOTAL DEAL DEAL IS.
UM, NO, IT, IT, IT, LOOK, IT'S, I UNDERSTAND THE CONCEPT THAT WE HADN'T, WE SIZED IT TO.
WHAT, WHAT WHAT'RE, UM, YOU KNOW, I I THINK AT THE END OF THE DAY, YOU KNOW, WHAT WE'RE TRYING TO DO NOW, WHAT MAKES THIS ONE DIFFERENT IS, IS WE HAVEN'T VALUED THE GROUND LEASE.
SO FOR INSTANCE, THE PREVIOUS PROJECT WAS FOUR 50 UNITS.
UM, WE'RE NOT VALUING IS THAT GROUND LEASE.
AND, AND SO THAT'S THE DIFFERENCE IN THE PRICE.
AND SO WHAT WE WERE LOOKING AT WAS JUST BASED ON THE SIZE OF THE PROJECT.
I I CAN UNDERSTAND WHAT YOU'RE DOING IS YOU'RE BACKING INTO THE TOTAL ISSUANCES AMOUNT.
BUT WE WERE LOOKING AT MORE JUST THE SIZE OF THE PROJECT.
BECAUSE AT THE END OF THE DAY, IT'S 422 UNITS, SO IT'S STILL A LAR, WHICH IS LARGER THAN WHERE THE BRISCO WAS IN TERMS OF TOTAL UNITS.
AND SO FROM A, AN AFFORDABILITY STANDPOINT, YOU KNOW, THERE'S SIGNIFICANT, UM, SAVINGS AND, AND THAT'S HOW WE LOOKED AT THIS.
HEY, HEY, MARCY, I KNOW I'M NOT A BOARD MEMBER HERE,
AND I'M NOT COMFORTABLE PUTTING THIS ON A COUNCIL AGENDA.
SO, YOU KNOW, I THINK THE DISCUSSION IS HEALTHY, BUT UNTIL RYAN CAN, CAN GET US BACK A LEGAL RAMIFICATION FOR HOW AN H F C IS GENERAL PARTNER ON A PROJECT, THAT THEY DON'T ACTUALLY HAVE THE LAND.
I DON'T SEE, I, I I AGREE THERE ARE, UH, SERIOUS CONCERNS AND, UM, NO.
WITH THIS, NO, I NEED AN ANSWER FROM YOU, RYAN.
I NEED NO A DEFINITIVE ANSWER.
NO, AND THAT, THAT'S ONE WE'LL HAVE TO, UH, RYAN, RYAN, YOU HAVE, I, I DON'T KNOW HOW LONG THIS HAS GONE ON AT THIS POINT, BUT WE SHOULDN'T BE HERE WITHOUT THAT ANSWER IN PLACE BECAUSE THE BOARD IS BEING ASKED TO VOTE ON SOMETHING THAT YOU HAVE NOT WEIGHED IN ON YET.
THAT IS MY EXPECTATION, BECAUSE FROM HERE, WE GO TO CITY COUNCIL, AND I DON'T SIGN OFF ON THIS IF, IF, IF, UM, IF IT'S NOT LEGAL.
SO NOT IF MAYBE NO, I NEED AN AFFIRMATIVE DECISION BEFORE WE GET TO THIS POINT.
SO I'M A LITTLE DISTURBED THAT YOU HAVEN'T, UM, PROVIDED THAT LEVEL OF, OF INFORMATION TO THE BOARD, BUT HERE WE ARE.
SO OTHER THAN TABLING THIS, I, I DON'T KNOW WHERE, HOW WE GO FORWARD.
JUST A LITTLE COMMENT, UM, SAYS IT'S IN THE HEART OF LAKE HIGHLANDS.
I WOULD REALLY LOOK AT THAT MAP, AND THEN YOU ALSO ON YOUR DESCRIPTION SAYING YOU'RE IN UPTOWN DALLAS, I WOULD LOOK AT YOUR MATH.
YOU CAN'T, YOU CAN'T BE IN BOTH PLACES.
AND THEN I HAVE CONCERNS OF IF YOU'RE IN LAKE HIGHLANDS, ARE YOU, IF YOU ARE, THEN THAT MAKES IT A DIFFERENT SCHOOL DISTRICT, WHICH WOULD BE APPEALING TO SOME FOLKS.
SO IF YOU'RE IN D I S D, THAT MEANS YOU'RE NOT REALLY IN, YOU'RE NOT IN LAKE HIGHLANDS.
YOU'RE, YOU'RE MORE ON THE, FOR LACK OF A BETTER DESCRIPTION, YOU'RE MORE ON THE PRESTON HOLLOW SIDE, AND THE SCHOOLS ARE TOTALLY DIFFERENT RIGHT THERE.
SO CONCERNED ABOUT YOUR DESCRIPTIONS.
THEY'RE, IN MY OPINION, THEY'RE NOT.
SO I I I I COMPLETELY AGREE THAT PRESENTATION IS TWO WEEKS OLD AND WE HAD UPDATED IT AND THAT WENT OUT.
AND I AND YOUR CRIME RATE, YOUR CRIME RATE? 7 5 2 31.
UM, I WOULD LIKE INFORMATION ON CRIME RATE AROUND THIS PROPERTY.
[00:45:01]
CUZ 75, 2 31 GOES ALL THE WAY TO, UM, CENTRAL EXPRESS, I MEAN CENTRAL EXPRESSWAY, BUT ALSO NORTHWEST HIGHWAY, ABRAMS AND SKILLMAN.SO THE AREA THAT WE'RE LOOKING AT, UM, POSSIBLY HAS A HIGHER CRIME RATE BECAUSE OF APARTMENTS IN THAT LOCATION AND JUST THE RETAIL BUSINESS, THE TYPE OF RETAIL BUSINESS THAT'S AROUND THERE.
UH, YOU KNOW, 75, 2 31, YOU, YOU CAN CROSS IT AND YOU'RE AT NORTH PARK.
SO I, I WOULD WANT MORE INFORMATION ON THE CRIME RATE JUST AROUND THAT BUILDING.
AND LET ME BE THE FIRST TO SAY, I, I APOLOGIZE THAT PRESENTATION, WE HAD UPDATED IT AND WE NOTICED THAT BECAUSE THAT, SO THAT'S NOT THE PRESENTATION THAT I PRESENTED HERE, BUT I, AGAIN, I I, I APOLOGIZE FOR THAT IN TERMS OF THE LOCATION, SO THAT, THAT, THAT, I APOLOGIZE.
SO DO I HAVE A MOTION TO TABLE THIS DISCUSSION? BECAUSE IF IT'S NOT READY, IT'S READY.
YEAH, I WOULD, I WOULD MOVE IT.
I TAKE A NAP, BUT WE SHOULD TAKE, UH, TAKE A VOTE.
UM, KELSEY SAFO, ASSISTANT CITY ATTORNEY.
I JUST WANNA MAKE SURE THAT I'M UNDERSTANDING THE MOTION THAT'S ON THE TABLE.
SO, AM I UNDERSTANDING RIGHT THAT THE MOTION IS TO POSTPONE THIS, UM, THIS ITEM TO A CERTAIN TIME? I DON'T, I DON'T WANT US TO END UP TABLING IT AND HAVING TO DIFFICULTY BRINGING IT BACK.
SO I THINK THE SIMPLEST WAY WOULD BE TO POSTPONE IT TO A CERTAIN TIME, MAYBE TO THE NEXT MEETING OR TO A PARTICULAR EVENT.
UM, SO I JUST WANTED TO CLARIFY THAT, RYAN, HOW LONG IS IT GONNA TAKE RYAN? PROVIDE SOME DEFINITIVE INFORMATION? YEAH, DID YOU HEAR THAT, RYAN? WELL, LET'S GIVE HIM A DATE AND HE CAN I I DID, I CAN, I CAN PROVIDE THAT THIS WEEK.
AND WE, WE HAD KIND OF DISCUSSED THAT INTERNALLY, I THOUGHT, YOU KNOW, WE HAD A, UH, UM, MORE DEFINITIVE DIRECTION, BUT, UH, THAT WILL NOT TAKE LONG.
UM, I, I HAVE AN ANSWER THAT, UM, UM, UH, I BELIEVE, UH, IS, UH, ON ALL FOURS OF WHAT'S, UH, PERMITTED UNDER STATE LAW.
SO, UM, NEXT BOARD MEETING, THE NEXT BOARD MEETING'S.
SO, UH, SO, UM, I GUESS NEXT BOARD, WHAT'S THE NEXT BOARD MEETING? IT WILL BE THE SAME MARCH 14TH, BECAUSE FEBRUARY 1ST FOUR WEEKS.
SO, YEAH, WE'LL MOVE TO, UH, UH, POSTPONE THIS UNTIL THE, UH, MARCH 14TH, UH, 2023, UH, BOARD MEETING AND TREASURER MARTINEZ WITH ANSWERS TO OUR CONCERNS.
I CAN HAVE THAT TO BY THE, UM, BY THE END OF THIS WEEK.
UH, I CAN EMAIL ERIN OR WHATEVER THE EASIEST WAY TO, TO DO THAT.
I WANNA, AGAIN, APOLOGIZE FOR THAT.
WE NOTICED THE MISTAKE IN, IN THE, IN THE POWERPOINT AGAIN, THAT WENT OUT AND I, I JUST, YOU WERE RIGHT IN TERMS OF, AND SO IT GOT UPDATED, BUT, UM, BUT UNFORTUNATELY IT HAD ALREADY GOT OUT, SO I APOLOGIZE FOR THAT.
SO, UH, I'M IN FAVOR OF THE MOTION TO TABLE, UM, SECRETARY PAGE IN FAVOR, UH, TREASURER MARTINEZ IN FAVOR.
IN FAVOR, UH, DIRECTOR VERNON.
IN FAVOR, DIRECTOR PHARAOH EPSTEIN, DIRECTOR COLLINS IN FAVOR.
NEXT ITEM IS TO CONSIDER AN ADOPT A RESO RESOLUTIONS PROVING POST ISSUANCE COMPLIANCE PROCEDURES FOR GOVERNMENTAL AND PRIVATE ACTIVITY BONDS.
SORRY, I'M, UH, PULLING UP OUR NEXT ITEMS HERE.
GEORGE, ARE YOU GONNA PRESENT THIS OR, UH, SO I'M BRIAN TEWELL.
YEAH, BRIAN TE FROM BRACEWELL.
HE IS A ASSOCIATE OF GEORGIA'S.
UM, HE IS, HE'S ONE OF OUR TAX PARTNERS, RIGHT.
SO THE, TO TO PREFACE THIS, UM, WE ISSUE CERTAIN
[00:50:01]
TYPES OF BONDS, GOVERNMENTAL AND PRIVATE ACTIVITY BONDS, AND WE ACTUALLY JUST HAD A DEPARTMENTAL MEETING ABOUT COMPLIANCE YESTERDAY, HOW WE ALWAYS NEED TO MAKE SURE WE ARE DOING EVERYTHING BY THE BOOK, YOU KNOW, AND RECORDING IT PROPERLY AND MAKING SURE THAT OUR GUIDELINES ARE FOLLOWED FOR WHATEVER STATUTES WE NEED.UM, SO THIS IS A TIMELY ITEM THANKS TO GEORGE, TO, TO GETTING THIS ALL PREPARED FOR US.
UM, AND I THINK BRIAN TEEF, IF YOU COULD JUST GIVE US A, A SHORT SUMMARY AS, AS TO WHY WE'RE, WE'RE ADOPTING THESE, UM, COMPLIANCE PROCEDURES.
SO THE, UH, I APPRECIATE Y'ALL HAVING ME, THIS BRIAN, CHIEF PARTNER IN OUR, UH, HOUSTON OFFICE.
SO THE IRS ENCOURAGES ALL ISSUERS OF TAX EXEMPT BONDS TO HAVE WHAT THEY CALL POST ISSUANCE COMPLIANCE PROCEDURES.
AND TO THAT END, EVERY TIME THE H FFC ISSUES BONDS, UH, THERE'S A BOX WHETHER YOU CHECK, YOU KNOW, WHETHER YOU HAVE THOSE, UH, PROCEDURES OR NOT.
AND SO ADOPTING THESE PROCEDURES WILL ALLOW THE HFC TO CHECK YES ON THOSE, UH, ON THOSE TAX RETURNS THAT ARE FILED EVERY TIME.
UH, IT ISSUES TAX EXEMPT BONDS.
THE REASON WE HAVE TWO SETS OF PROCEDURES IS BECAUSE Y'ALL ARE, Y'ALL ARE NOW, UH, ISSUING TWO DIFFERENT TYPES OF BONDS.
SO FOR THE BONDS THAT Y'ALL HAVE TRADITIONALLY DONE, WHERE THERE'S VOLUME CAP, THE PROJECT IS OWNED BY A PRIVATE, YOU KNOW, DEVELOPER, THOSE ARE PRIVATE ACTIVITY BONDS.
AND SO THAT SET OF PROCEDURES, UM, PUTS THE BULK OF THE RESPONSIBILITIES ON THE BORROWER.
UH, EVERY TIME WE, UH, A TAX EXEMPTION CERTIFICATE AND AGREEMENT IS EXECUTED, THAT BORROWER WILL ACKNOWLEDGE THAT THEY'VE RECEIVED THE PROCEDURES AND THAT THEY WILL FOLLOW THEM.
AND THE PROCEDURES THEMSELVES TRACK THINGS SUCH AS IN A PRIVATE ACTIVITY BOND CONTEXT.
IT BASICALLY TRACKS MAKING SURE THE EXPENDITURES ARE IN COMPLIANCE WITH THE ARBITRAGE AND REBATE RULES APPLICABLE TO TAX EXEMPT BONDS.
AND THAT THE, UH, AFFORDABILITY REQUIREMENTS ARE MET FOR PURPOSES OF, UM, UH, UH, UH, OF MAINTAINING.
TYPICALLY IT'S THE 40 60 TEST.
THE OTHER SET OF PROCEDURES, THE GOVERNMENTAL BONDS, THOSE RELATE TO THE TYPES OF PROJECTS THAT WE'VE BEEN TALKING ABOUT TODAY WHERE THE HFC OR A WHOLLY OWNED LLC OF THE HFC, UH, OWNS THE FACILITIES.
AND SO IT'S A SEPARATE SET OF TAX RULES THAT ARE APPLICABLE TO THOSE TYPES OF BONDS.
UH, THE ARBITRAGE AND REBATE ARE, ARE THE SAME, BUT THE, UM, THE, THE, THERE'S LESS OF A CONCERN FROM A TAX PERSPECTIVE ON AFFORDABILITY REQUIREMENTS, AND THERE'S MORE OF A CONCERN TO MAKE SURE THAT THERE ISN'T IMPERMISSIBLE PRIVATE USE OF THE BOND FINANCE FACILITY.
AND SO, UM, THAT SET OF PROCEDURES IS FOCUSED ON THOSE ITEMS. I WOULD IMAGINE THAT SOME COMBINATION OF THE PROJECT ADMINISTRATOR AND GRAY STAR OR WHOEVER THE PROPERTY MANAGER WILL BE, WILL HELP ENSURE THOSE COMPLIANCE PROCEDURES ARE, UH, ARE, ARE ADDRESSED.
BUT ULTIMATELY BECAUSE THESE ARE HFC OWNED FACILITIES, UM, IT IT, IT RELATES TO AFC, THE HFC IS THE OWNER.
SO WITH THAT, I'M HA HAPPY TO ANSWER ANY QUESTIONS, BUT THAT'S A 50,000, UH, FOOT VIEW OF, OF WHAT WE'RE TALKING ABOUT TODAY.
SO, UM, MY QUESTIONS, YOU KNOW, A LOT OF THOSE REQUIREMENTS FOR DOCUMENT RETENTION REQUIREMENTS AND, UM, SO I GUESS I WOULD ASK ERIN AND GEORGE, UM, WHERE ARE WE RETAINING THOSE DOCUMENTS? SO WE RETAIN OUR DOCUMENTS ONLINE MOSTLY JUST IN OUR SHAREPOINT, OUR SHAREPOINT FILE SYSTEM.
UM, AND SO GEORGE, DO YOU CONVEY, YOU CONVEY THE DOCUMENTS THAT WE NEED TO RETAIN TO AARON AND THEN HE PUTS THEM IN THIS, WE HAVE A TRANSCRIPT OF THE TRANSACTION DOCUMENTS THAT THAT IS PROVIDED HERE AT THAT POINT.
SAVE THEM TO THEIR SHIP ONCE, AND THEN BRACE WILL ALSO SAVES THEM.
SO FOR THE LIFE OF THE PROJECT, BOTH ENTITIES HAVE IT CORRECT, AND THEN IT'S LIKE THREE YEARS AFTER OR SOMETHING, RIGHT? IN ADDITION TO THE LIFE OF THE PROJECT? THAT'S CORRECT.
JUST WANTED TO MAKE SURE I KEPT READING THROUGH ALL THOSE.
OH, NO, JUST WANNA MAKE SURE THAT WE WE'RE IN FACT RETAINING ALL THOSE DOCUMENTS.
UM, AND IF WE'VE GOT THAT WITH RESPECT TO ITEMS THAT ARE PREPARED SORT OF THROUGHOUT THE LIFE OF THE BONDS IN YOUR, IN YOUR PRIVATE ACTIVITY BONDS, LIKE REBATE REPORTS, THINGS LIKE THAT, THOSE WILL
[00:55:01]
BE, UH, THE BORROWER WILL RETAIN AND THE TRUSTEE WILL HAVE A COPY AS WELL.UM, AND, AND, AND SO YOU HAVE ADDITIONAL PROTECTIONS IN THOSE TYPES OF DEALS.
AND IT'S, IT, IT'S, IT, UM, SATISFIES THE REQUIREMENT IF THE TRUSTEE HAS IT.
I MEAN THE, THE WHOLE, THE, THERE'S NO SORT OF MAGIC FORMULA.
THE WHOLE POINT OF THESE IS, UM, SO THAT IN THE EVENT OF AN AUDIT, THESE SORTS OF THINGS CAN BE EASILY, EASILY PULLED, EASILY IDENTIFIED.
UM, AND SO, YOU KNOW, THE TRUSTEE HAVING THEM IS, IS, YOU KNOW, AND THEY TYPICALLY DO RETAIN THINGS, IS VERY EASY TO, UM, TO HELP PRODUCE AS WELL.
SO WE, THERE'S NOTHING THAT YOU THINK WE NEED TO GET ANNUALLY FROM THE TRUSTEE OR ANYTHING, OR ANYTHING WE NEED TO DO JUST TO MAKE SURE THAT WE, THAT ALL THOSE DOCUMENTS ARE ACCESSIBLE FROM SOMEBODY AND JUST THAT I DON'T THINK THAT NEEDS TO HAPPEN ON A MANUAL BASIS.
SO THERE, YEAH, SO YOU'RE, YOU'RE SAYING THERE'S NOTHING THAT WE HAVE TO DO ON AN ANNUAL BASIS TO MAKE SURE THAT YEAH, BUT THE, YEAH, AS GEORGE MENTIONED, THE BULK OF THE DOCUMENTS WILL BE THE TRANSCRIPT THAT'S DELIVERED, YOU KNOW, IN CONNECTION WITH CLOSING, Y'ALL WILL HAVE THAT AS, AS AND SO WILL, SO WILL THE TRUSTEE.
UM, AND WE HAVE IT AS WELL, AND I'M ASSUMING, YOU KNOW, PROBABLY TRUSTEE'S COUNSEL KEEPS A COPY AS WELL.
UM, BUT THEN THROUGHOUT THE, THROUGHOUT THE ISSUE, UM, THE TRUSTEE, YOU KNOW, HAS COVENANTED IN THE TAX EXEMPTION CERTIFICATE THAT IT WILL KEEP THE REQUIRED DOCUMENT, THE RECORD KEEPING THAT IS RELATED TO ARBITRAGE CALCULATIONS AND THINGS LIKE THAT.
AND Y'ALL CAN REQUEST THAT FROM THE TRUSTEE AT ANY TIME.
AND I THOUGHT IT EVEN LISTED LIKE ALL THE, UM, TENANT ON THE LINE TECH DEALS.
DIDN'T IT LIST EVEN LIKE ALL THE TENANT PAPERWORK? YEAH, SO ON THE, ON THE LITECH DEALS, THE BORROWER, UM, IS, IS HAS COVENANTED IN THE BOND DOCUMENTS AND IN THE, IN SORT OF NOTED IN THESE PROCEDURES, IT HAS TO KEEP RECORDS EVIDENCING COMPLIANCE WITH THE, UH, WITH THE INCOME RESTRICTIONS OR THE TENANT RESTRICTIONS AND THE TENANT CERTIFICATIONS, THINGS LIKE THAT.
AND SO THOSE PROCEDURES PUT THAT BURDEN ON THE BORROWER TO, UM, TO, TO, TO SATISFY THOSE REQUIREMENTS.
BECAUSE I THOUGHT I SIGN HERE SOMETHING LIKE, UH, THAT THEY HAD TO KEEP ALL OF THE, ALL OF THE TENANT INFORMATION, WHICH THAT SEEMED LIKE THAT WAS A LOT OF DOCUMENTATION.
THEY HAD TO KEEP THAT LANE UNTIL THREE YEARS AFTER.
IS THAT THE DEAL? YEAH, THE, THE, THE I, IT'S ANNOYING FOR SURE.
THE PROBLEM IS, SO THE BONDS COULD BE AUDITED TECHNICALLY AT, AT ANY TIME UP UNTIL USUALLY MATURITY PLUS THREE.
THE, THE MAGIC OF THE THREE YEARS IS GENERALLY THAT'S WHEN THE STATUTE OF LIMITATIONS RUNS TO AUDIT.
SO IF THEY, THEY CAN BE AUDITED AT ANY TIME, PLUS, YOU KNOW, SO THEY KEEP IT FOR THAT TIME.
PLUS THE THREE YEARS, THE THOUGHT USUALLY IS AT THE END OF THE, THE, THE END OF THE BOND PLUS THE THREE YEARS, YOU NO LONGER HAVE TO KEEP IT BECAUSE YOU KNOW, THE STATUTE HAS RUN AND THEY WON'T BE AUDITED.
UM, IT SAYS IN HERE DOCUMENTATION RELATING TO THE USE OF THE DEVELOPMENT, INCLUDING TENANT INCOME CERTIFICATIONS AND THE CERTIFICATES OF CONTINUING PROGRAM COMPLIANCE.
SO, SO I GUESS THAT SAYING THAT FOR ALL THESE HUGE NUMBER OF YEARS, THEY'RE SUPPOSED TO KEEP ALL OF THOSE MM-HMM.
SO WE, AND SO WE RELY UPON THE REPRESENTATION FROM THE, UM, DEVELOPER ON THOSE, CORRECT? ON THE, ON THE VOLUME CAP DEALS, CORRECT.
UM, ANY OTHER QUESTIONS?
I WENT INTO THIS PROBABLY WAY MORE DEEPLY THAN ANYBODY WAS REALLY INTERESTED IN DOING, BUT, UM, OKAY.
SO, UH, IF SOMEONE WANTS TO MAKE A MOTION TO, UM, ADOPT THESE RESOLUTIONS, I WILL MOVE THAT WE, UH, ADOPT THESE RESOLUTIONS.
AND DO I HAVE A SECOND? I'LL SECOND MARTINEZ AND, OKAY.
UM, SECRETARY PAGE IN FAVOR AND TREASURER MARTINEZ.
[01:00:01]
DIRECTOR VERNON.I HOPE EVERYBODY HAS A VERY NICE VALENTINE'S DAY AND UM, AND I GUESS WE ARE ADJOURNED.