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I SEE, LADIES, GENTLEMEN, I'M GOOD TO GO.
[Dallas Housing Finance Corporation on April 16, 2024.]
I'M CALLING THE MEETING TO ORDER AT 1207 AND UM, I'LL TURN IT OVER TO MS. SCHROEDER FOR THE ROLL CALL.MAY I STATE YOUR NAME AND PLEASE? IN CASE HERE, UH, DIRECTOR SEAN ALLEN.
PRESENT, UH, VICE PRESIDENT RYAN GARCIA.
HE'LL NOT BE JOINING US EITHER.
PRESENT, PRESIDENT MARCY HEIN.
PRESENT DIRECTOR JOSHUA VERNON.
DON'T SEE ON NAME DIRECTOR RYAN MOORE.
UH, SECRETARY ANTHONY PAGE PRESENT.
I'LL NOW OPEN THE FLOOR FOR ANY PUBLIC COMMENTS AND ITEMS FOUR THROUGH EIGHT, PUBLIC COMMENT.
WE'LL MOVE ON TO ITEM FOUR, APPROVAL OF THE MINUTES FOR THE FEBRUARY 13TH, 2024, CITY OF DALLAS HOUSING FINANCE CORPORATION MEETING.
UM, SO I WILL ENTERTAIN A MOTION FOR APPROVAL.
AND, UM, AND DO I HEAR A SECOND? I'LL SECOND.
ANY, UH, ARE THERE ANY, UM, AMENDMENTS OR FOR REVISION FOR AMENDMENTS TO THE MINUTES? OKAY.
WAIT, WAS THAT AN OPPOSITION? AYE.
IT'S NOT, THEN IT ARE APPROVED.
NEXT IS OUR MAJOR ACTION ITEM, WHICH IS THE RESOLUTIONS FOR THE WEST VIRGINIA APARTMENTS.
A MULTI-FAMILY RESIDENTIAL DEVELOPMENT LOCATED AT 8,004 WEST VIRGINIA DRIVE IN THE CITY OF DALLAS, DALLAS COUNTY, TEXAS.
A CONSIDER AN ADOPT A RESOLUTION APPROVING A MEMORANDUM OF UNDERSTANDING MOU WITH 8 0 0 4 WEST VIRGINIA DRIVE, TX DEVELOPER LLC FOR THE FINANCING, ACQUISITION AND REHABILITATION OF WEST VIRGINIA APARTMENTS AND APPROXIMATELY 202 UNIT MULTIFAMILY RESIDENTIAL DEVELOPMENT.
B, CONSIDER AND ADOPT A RESOLUTION APPROVING THE TRANSFER AND ASSIGNMENT OF DHFC WEST VIRGINIA, G-P-L-L-C-A TEXAS LIMITED LIABILITY COMPANY, A COMPANY TO THE CORPORATION AUTHORIZING THE DESIGNATION OF THE CORPORATION AS THE SOLE MEMBER OF THE COMPANY AND APPROVING THE FORM AND SUBSTANCE OF AN AMENDED AND RESTATED LIMITED LIABILITY COMPANY AGREEMENT AND THE EXECUTION THEREOF.
C, CONSIDER AND ADOPT A RESOLUTION APPROVING THE CREATION OF A LIMITED LIABILITY COMPANY WITH THE CORPORATION AS THE SOLE MEMBER WITH THE TEXAS SECRETARY OF STATE TO BE NAMED DHFC, WEST VIRGINIA DEVELOPER LLC AND APPROVING THE FORM AND SUBSTANCE OF A LIMITED LIABILITY COMPANY AGREEMENT AND THE EXECUTION THEREOF.
AND D CONSIDER AN ADOPT A RESOLUTION APPROVING THE CREATION OF A LIMITED LIABILITY COMPANY WITH THE CORPORATION AS THE SOLE MEMBER WITH THE TEXAS SECRETARY OF STATE TO BE NAMED DHFC WEST VIRGINIA LANDOWNER, LLC, AND APPROVING THE FORM AND SUBSTANCE OF A LIMITED LIABILITY COMPANY AGREEMENT AND THE EXECUTION THEREOF.
SO I WILL TURN IT OVER TO, UH, GENERAL MANAGER QUINTO.
SO THIS PROPERTY, WE GAVE A PRELIMINARY INDUCEMENT BACK IN OCTOBER, IF YOU GUYS RECALL.
IT LOOKED LIKE THEY, WELL THEY, THEY GOT A RESERVATION HERE IN LINE FOR US AND WE'RE LOOKING TO CLOSE IF WE CAN GET THIS.
MOU AGREED UPON SOMETIME THE NEXT FEW MONTHS.
SO WE ARE 99% THERE WITH THE MOU WITH THE BUSINESS TERMS, BUT WE FIGURED WE WOULD BRING IT TO THE BOARD FOR ANY COMMENTS SO THAT YOU
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GUYS CAN HAVE IT IN FRONT OF YOU SO YOU CAN, UH, SEE WHAT WE'RE AGREE TO AND, AND WE CAN ADJUST TO IF NECESSARY.UM, BUT WE, WE DO HAVE THE PRESENTATION IF YOU NEED A REMINDER AS TO WHAT WE'RE LOOKING AT
YOU COULD BREEZE THROUGH THE PRESENTATION 'CAUSE I WASN'T HERE OCTOBER.
YEAH, I'M JUST KIND OFE AND I FOR, FOR NEW BOARD MEMBERS, DIRECTOR HINTON AND, AND MORE.
SO OUR, OUR NORMAL PROCESS, YOU, YOU SEE ALL THESE DIFFERENT RESOLUTIONS.
IT'S REALLY JUST PART OF OUR, OUR STRUCTURE.
YOU SEE ALL THESE DIFFERENT CORPORATIONS.
SO OUR STRUCTURE INVOLVES, UM, THE HFC, WE WILL, WE WILL FORM AN ENTITY THAT'S THE LANDOWNER WILL FORM AN ENTITY THAT'S A DEVELOPER, WILL ALSO BE THE GP OF THE BORROWER ENTITY SO THAT WE CAN COMPLY WITH ALL THE STATE STATUTES.
AND SO THAT'S WHY YOU SEE FORM ALL THESE LLCS, IT'S ALL THE SAME PROPERTY, IT'S JUST ALL THE LEGALESE THAT NEEDS TO BE DONE SO THAT WE CAN HOLD THIS IN THE, IN THE RIGHT WAY TO, TO RECEIVE THE TAX EXEMPTION.
UM, BUT I THINK WERE YOU ASKING ABOUT A DESCRIPTION OF THE, OF THE PROPERTY? YEAH, PRESENTATION.
I WAS JUST SAYING
IT CAN BE CONFUSING IF, IF YOU DON'T KNOW WHAT YOU'RE LOOKING AT SOMETIMES.
SO, UM, WHAT ARE THE BUSINESS FIRMS CURRENTLY UNDER NEGOTIATION, FINANCING OR BUDGET? I'M PULLING UP A MAP RIGHT NOW, WHAT WE'RE LOOKING AT, RIGHT? THERE'S A LAG.
SEE IF YOU CAN JUST KEEP LOOKING THROUGH JACKET.
MM-HMM,
SO IT'S, IT'S CURRENTLY AN EXISTING LITECH PROPERTY.
UH, TWO, TWO UNITS OR TWO FOUR, SORRY.
THEY'RE ALL RESTRICTED AT 50% A MI RIGHT NOW.
UM, SO THE IDEA BEHIND THIS PARTICULAR PROPERTY, WE'RE NOT CREATING NEW UNITS OF NEW AFFORDABILITY, BUT WE ARE PRESERVING WHAT'S THERE.
SO, UM, THE RISK IS IF, IF YOU DON'T REINVEST INTO THIS PROPERTY, IT WILL KIND OF CONTINUE TO DETERIORATE AND FALL IN THE DISREPAIR.
SO, UH, THE COMMUNITY, UH, MOST COMMUNITIES YOU CAN SEE THE LIGHT DECK PROPERTIES ARE THE BEST ONES BECAUSE WE HAVE THESE, UH, STATUTORY RESTRICTIONS ON 'EM TO KEEP IT NICER.
SO WHAT IT DOES DO THE REINVESTMENT, I THINK THIS ONE'S SCHEDULED TO ABOUT $40,000 A A UNIT OF REHABILITATION.
UH, IT'S PRETTY, PRETTY SIGNIFICANT REHABILITATION.
AND, UM, BY DOING THAT IT KIND OF ACTS A LITTLE BIT OF PRESSURE ON THE NEIGHBORING PROPERTIES TO COMPETE WITH IT.
AND SO WE KIND OF ARE ARE A STANDARD THERE, THERE ON THE QUALITY OF, UH, SERVICE FOR DO YOU, DO YOU NEED A DESCRIPTION OF WHERE IT'S LOCATED OR? NO, I, I WOULDN'T VISIT THE COMPLEX OF FAMILIAR WITH THE AREA.
UH, SO THE MOU WOULD BE APPROVING TO MOVE FORWARD CONTINGENT UPON RECEIVING, FOR EXAMPLE, ALL OF THE INFORMATION IN EXHIBIT A, THE INITIAL AGREEMENT.
AND I THINK TO ANSWER SEAN'S QUESTION, DIRECTOR Z'S QUESTION, UM, AND, UH, MS. JENSEN, WHO'S HERE CAN, UH, TELL ME IF I'M OUTTA LINE, BUT I THINK THAT, UM, THAT SOME OF THE TERMS THAT WERE BEING NEGOTIATED HAD TO DO WITH THE GROUND LEASE PAYMENTS BECAUSE, UM, IN THE PAST WE SOMETIMES, UH, HAD A LARGER SHARE OF THE SALE PROCEEDS AND, AND FOR, AND DIDN'T HAVE THE GROUND, SIGNIFICANT GROUND LEASE PAYMENTS, THIS DEAL REALLY, UM, THEY CAN'T AFFORD ANY LARGE GROUND LEASE PAYMENTS BECAUSE THERE THE ECONOMICS ARE JUST NOT THERE.
BUT WE'VE, UH, BEEN NEGOTIATING ON THINGS LIKE THAT, THAT ONCE THE DEVELOP DEFERRED DEVELOPER FEE FEE IS PAID, THAT THERE WILL BE A JUMP IN THE GROUND LEASE PAYMENTS.
SO THAT'S ONE OF THE THINGS THAT I THINK IT'S THE NEGOTIATIONS INVOLVED WAS WITH THE ADVICE OF HILLTOP, WHO KNOWS, YOU KNOW, WHAT WE, UH, ATTEMPT TO RECOVER ON THESE PROPERTIES.
UM, THAT, UH, I I THINK THAT, UM, THAT THAT WAS PART OF THE NEGOTIATIONS IS MY THAT'S CORRECT.
BUT I THINK, I THINK WE'VE GOTTEN THAT AGREED UPON AT THIS POINT.
AND, AND WE ALSO, ONE OF THE OTHER REASONS THAT THERE COULDN'T BE SIGNIFICANT BONUS PAYMENTS AT THE BEGINNING IS BECAUSE THERE HAS
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TO BE A SELLER FINANCING ON THIS DEAL.'CAUSE AS, YOU KNOW, TO MAKE THESE DEALS WORK NOW, UH, THE TAX CREDITS AND THE TAX EXEMPT BOND FUNDING, YOU KNOW, ARE NOT ENOUGH.
AND SO THEY'RE DOING SELLER FINANCING.
UM, AND SO WITH ALL THOSE CONSTRAINTS AND THE PRETTY DEEP AFFORDABILITY, YOU KNOW, THEY COULDN'T MAKE SIGNIFICANT BROWNIES PAYMENTS, BUT OUR POSITION IS THAT IF IT GETS TO THE POINT WHERE THEY CAN, THEN WE'D LIKE THEM TO BE DOING THAT.
WHAT'S OUR SPLIT OF THE DEVELOPER FEE ON THIS? 30, 30%.
SO WE'RE GETTING A LITTLE BIT HIGHER ON THE DEVELOPER FEE BECAUSE WE'RE USUALLY ABOUT 25%.
SO THE GROUND LEASE PAYMENTS GOING DOWN A LITTLE BIT, BUT WE'RE GETTING IT.
NO, I THINK IT'S ALWAYS BEEN 30%.
UH, HEY MARCIA, THIS IS BRAXTON FROM HILLTOP.
UM, I, I, I CAN JUMP IN A LITTLE BIT, BUT, UH, USUALLY, TYPICALLY WE SEE AROUND 25% ON THE DEVELOPER FEE.
30 IS, UH, IT, IT HAS BEEN DONE IN PREVIOUS DEALS, BUT IT IS A LITTLE HIGHER THAN THE LAST FEW.
UM, SO, SO DAVID, YOU ARE CORRECT THERE.
UM, AND FOR THE, UH, THE, THE FEES THAT ARE UNDER NEGOTIATION, SO WE, WE HAVEN'T, LIKE WE SPOKE, YOU KNOW, A COUPLE WEEKS AGO, MARCY, IT IS DIFFICULT FOR 'EM TO HAVE A HIGHER GROUND LEASE PAYMENT IN THIS AND BE ABLE TO PAY OFF THAT DEFERRED DEVELOPER FEE WITHIN THE COMPLIANCE PERIOD.
SO THEY, THEY HAVE KIND OF BASICALLY AGREED TO THE CURRENT TERMS THAT ARE IN THE MOU.
THERE WAS ONE CAVEAT THAT WE'RE, WE'RE KIND OF GOING BACK AND FORTH ON RIGHT NOW IS LIMITING THE BACKEND PARTICIPATION TO A ROUGHLY 40% OF THE ESTIMATED TAXES EVADED, WHICH WE'VE NEVER DONE IN A, IN A PREVIOUS DALLAS HFC DEAL.
UM, SO WE'RE, WE'RE TRYING TO KIND OF GET, GET OUR HEADS WRAPPED AROUND THAT, THAT CONCEPT.
UH, I THINK THE DEVELOPER IS, IS KIND OF LOOKING INTERNALLY TO SEE IF, 'CAUSE WE RECOMMENDED STRIKING THAT FROM THE MOU.
SO THEY'RE, THEY'RE LOOKING INTERNALLY TO SEE IF THEY CAN, YOU KNOW, GO AHEAD AND MOVE FORWARD WITHOUT THAT, THAT CAVEAT TO HAVE A 40% MAX RETURN OF THE, THE TOTAL GP REVENUES, SO OVER A 15 YEAR PERIOD.
SO THAT, THAT, THAT'S WHERE WE'RE REALLY AT.
BUT THEY HAVE SO FAR AGREED TO THE, THE CURRENT LEASE PAYMENT AND THE STEP UP ONCE DEFERRED DEVELOPER FEE IS PAID OFF AS WELL AS THE STANDARD GP MANAGEMENT FEE AND, AND THE DEVELOPER FEE SPLITS THAT ARE CURRENTLY IN THE MOU.
SO, SO THE 40%, YOU MAY HAVE TO ELABORATE.
WHAT IS THAT? THAT'S A RETURN ON THE TOTAL TAX EXEMPTION.
WHAT ARE THEY ASKING FOR THE SPONSOR? THEY'RE, THEY'RE JUST ASKING ABOUT OUR RETURN LIMITED TO THAT MUCH, IS THAT CORRECT? SO WE'RE KEPT AND THEN THEY GET ANY OF THE ADDITIONAL S SO WE PARTICIPATE IN THE BACKEND SALE, NO.
YEAH, BUT WE WOULD SEE, YES, THE 1.5% ARE GROSS, BUT THEY DON'T WANT THE TOTAL, THEY, THEIR, THEIR TERM LIMIT, THE TOTAL RETURN AT THAT 40.
YEAH, BECAUSE THAT'S OUR SORT OF, YOU KNOW, UM, RULE OF THUMB, SO TO SPEAK.
AND WE'VE NEVER LIMITED IT TO THAT.
IT'S JUST THAT THAT'S WHAT OUR CALCULATION CALCULATIONS, UNLESS THERE'S A BIG UPLIFT ON THE VALUE OF THE PROPERTY.
WHAT THAT'S WHAT'S ON THE, IT'S NOT ON THE TAXABLES RIGHT NOW.
NOT, DON'T THINK, THEY DON'T CURRENTLY HAVE A PARTNERSHIP WITH US.
SO IT IS PART OF THE, IT IS PART OF THE LITECH INVENTORY.
UM, WHAT WE'RE JUST DOING IS INFUSING IT WITH A SIGNIFICANT AMOUNT OF CAPITAL, BUT THE WAY DEALS UNDERWRITE RIGHT NOW, YOU CAN'T DO IT WITHOUT PARTNERSHIP AND APPARENTLY YOU CAN'T DO WITHOUT SELLER FINANCIAL OR MOVING THOSE, OR MOVING THE GROUND LEASE DOWN TO ZERO OR EVEN EVEN WITH THAT.
BUT UNLESS THERE'S OTHER FUNDS LIKE FEDERAL FUNDS ONE YEAH.
OR JUST OTHER SECTIONS HOME OR, YOU KNOW, SEEM TO BE, SO YEAH.
IT, I GUESS THIS IS CONVERSATION THE OTHER DAY.
WE HAD A WHOLE CONVERSATION ABOUT FIXED GROUND LEASE PAYMENTS VERSUS CASHFLOW SPLITS.
SOUNDS LIKE WE'RE ENCOUNTERING A BIT OF A PROBLEM GOING TO THE FIXED GROUND LEASE PAYMENTS BECAUSE OF THESE DEALS.
AND UNDERWRITING A CASHFLOW SPLIT WOULD PROBABLY SOLVE THAT.
I MEAN, EITHER WAY UP UPFRONT, LIKE OUR RULE, LIKE MENTIONS THIS 4% RETURN, THAT'S REALLY JUST, IT HELPS US COMPARE APPLES TO APPLES WITH ALL OUR OTHER INVESTMENTS FOR SITES.
IS IT WORTH IT TO PARTICIPATE IN THIS DEAL? CAN WE GET TO THIS NUMBER? UM, SO THAT, THAT'S KIND OF WHAT, IT'S NOT LIMITING US, BUT YOU KNOW, IT'S JUST, WE, WE BASE IT ON A FORECAST AND I THINK WHAT THEY'RE ASKING FOR IS, OH, YOU KNOW, IF YOU TURNED OUT THE FORECAST IS OFF, WE SHOULD BENEFIT.
BUT I DON'T REALLY, WE'RE TALKING ABOUT WHAT THE THINGS THAT HAPPEN 15 YEARS.
SO, BUT WHAT'S THE ELIGIBLE BASIS OF THE DEAL? I MEAN, WHAT'S THE COST OF THE DEVELOPMENT FEES GOING BASED ON 40 SOMETHING? 49,000,040? YEAH, IT WAS 32,000 IN BONDS AND SEVEN 32 MILLION.
IT'S NOT GONNA GET A CHUNK OF MONEY WHEN
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THE DEVELOPER FEE IS PAID.SO I THINK THAT'S AND APRIL HOUSING, THAT'S A SUBSIDIARY? THIS IS OUR SPONSOR, CORRECT.
IF FOR HOUSING, THEY'RE SUBSIDIARY OF BLACKSTONE.
THEY'RE, THEY'RE ON THE CALL AS WELL.
AND THIS IS CURRENTLY OWNED BY LICOR, BLACKSTONE, APRIL HOUSING SLASH SLASH SLASH YES.
SO THIS IS THE CURRENT OWNER WE'RE TALKING ABOUT.
THEY BOUGHT IT, IT LOOKS LIKE THIS DEAL GOT PURCHASED BY, OR GOT BUILT BY TRAMELL CROW, UH, LONG TIME AGO, WHICH I THINK IS GOOD.
YOU KNOW, SO IT'S HIGH QUALITY CONSTRUCTION, JUST PUTTING A LOT OF MONEY INTO IT AND EXTENDING THE RESTRICTIONS, SO TO SPEAK.
BUT EXTENDING THE RESTRICTIONS FOR ANOTHER 30 YEARS, WHICH IS WHAT LITECH IS, AND TAKING IT OFF THE TAX RULES.
AND TAKING OFF THE TAX RULES, WHICH THAT'S WHAT WE DO
THAT'S, UH, SO RIGHT NOW IT'S AT 60% OF THE UNITS ARE 50% A MI OH, A HUNDRED PERCENT ARE RIGHT NOW.
LIKE, THIS IS A COMPLETELY AFFORDABLE PROPERTY.
ANY OTHER QUESTIONS? I YEAH, GO AHEAD.
UM, WHAT IS THE, THE, UH, TOTAL, UH, CAPITAL IMPROVEMENT BUDGET? I BELIEVE IT WAS 8.8 MILLION.
EIGHT POINT SOMETHING MILLION.
THAT'S CLOSE ENOUGH FOR WHAT I, MY NEXT QUESTION.
SO IF I'M LOOKING AT THIS SITE, UM, ON THE SOUTHWEST CORNER, THERE'S LIKE A DRIVEWAY THAT GOES TO THE HIGHWAY 67 SERVICE ROAD.
UM, I DON'T KNOW IF YOU HAVE A MAP HANDY.
WELL, OR IF SOMEONE FROM ABEL HOUSING WANTS TO CHIME IN.
THE ONE THAT GOES TO THE SERVICE ROAD? YEAH.
AND SO THERE'S A, AND I'VE JUST PULLED IT UP ON GOOGLE EARTH.
THERE'S A BLOCKED LIKE CAR GATE.
IT LOOKS LIKE IT'S ACTIVATED BY MOTOR VEHICLES.
IF YOU WANNA GET OUT, IT CAN GO OUT THAT WAY, BUT THERE'S NOT A PEDESTRIAN GATE THERE.
AND, UM, MY CONCERN IS THAT THERE'S, YOU KNOW, I'M ALWAYS ABOUT HOW DO WE MAKE THESE PLACES MORE WHERE PEOPLE AREN'T JUST FORCED TO GET IN A CAR EVERY TIME THEY WANT TO GO AND DO ANYTHING.
AND IF YOU PUT IN A PEDESTRIAN GATE THERE, THERE'S A SIDEWALK ALL THE WAY DOWN TO WHEATLAND ROAD AND THERE'S A CONVENIENT, THERE'S A SHELL ON A SUBWAY CONVENIENCE STORE RIGHT THERE.
THERE'S, IF YOU GO UNDER THE HIGHWAY, AGAIN, EASY WALKING DISTANCE, THERE'S A STRIPPED CENTER OVER THERE.
AND I CAN TELL A LOT OF PEOPLE ARE WALKING THERE FROM THE EAST SIDE OF, OF 67.
'CAUSE I CAN SEE, 'CAUSE THE CITY DOESN'T, YOU KNOW, FOR WHATEVER REASON IT'S NOT A SIDEWALK THERE, BUT THERE'S A DIRT PATH.
SO THAT TELLS ME THERE'S A LOT OF PEOPLE WALKING OVER THERE.
AND SO LONGWINDED WAY ME SAYING, UM, I WANT A PEDESTRIAN GATE PUT IN THERE AS A CONDITION OF DOING THIS.
UM, IT WOULDN'T BE THAT SINCE IT'S SOMETHING THAT PEOPLE COULD ACTIVATE, YOU KNOW, SO THEY CAN HAVE A SHORTCUT TO GET TO, UM, THE CONVENIENCE RETAIL TO GET TO ALL THE SERVICE STUFF THAT'S DOWN THERE.
IT'S LIKE, YOU KNOW, IT'S LIKE A NAIL SALON OR IT'S LIKE, I MEAN, IT'S ALL THE STUFF THAT YOU'D LIKE WANNA DO.
YOU WANNA GO GET A, LIKE, YOU KNOW, CAR AND MILK OR YOU WANNA GET SOME STACKS AND STUFF.
SO IS THAT SOMETHING WE CAN DO? YES.
ARE THE APRIL HOUSING PEOPLE CANADIAN BRAD, ARE, ARE YOU FOLLOWING WITH, UH, SECRETARY PAGE'S COMMENTS? YEAH, THIS IS, THIS IS BRAD FISHER WITH APRIL HOUSING.
UM, YOU'RE TALKING ABOUT ADDING A PEDESTRIAN DATE? YEAH, PEDESTRIAN GATE.
THE PEOPLE COULD ACTIVATE, THEY COULD HAVE A LITTLE, YOU KNOW, I DON'T KNOW, THEY HAVE A CODE OR SOMETHING, BUT JUST TO GET IN AND OUT OF THAT, UM, ENTRANCE, IT'S ON THE SOUTHWEST, THERE'S A DRIVEWAY, LIKE BASICALLY ON THE KIND OF SOUTHWEST OR, YOU KNOW, WEST CORNER OF THE PROPERTY.
THERE'S LIKE A, UM, IT GOES TO THE 67 SERVICE ROAD IN SUBWAY.
BE ABLE TO THAT LIVE THERE, BE ABLE TO, TO USE TO GET OUT OF THAT GATE AND BE ABLE TO WALK DOWN THE SIDEWALK TO THE CONVENIENCE RETAIL THAT'S LOCATED AROUND ON DIFFERENT CORNERS OF THE INTERSECTION OF WHEATLAND ROAD AND 67.
THAT'S ALL, THAT'S AN EASY WALK.
BUT IF THEY DON'T HAVE THAT RIGHT NOW, THEY'VE GOTTA GO OUT THE MAIN ENTRANCE ON WEST VIRGINIA DRIVE AND GO DOWN TO WHEATLAND AND TO WALK ALONG BUSY STREET.
IT'S JUST LIKE, IT'S A LOT LONGER AND IT'S NOT, NOT AS COMFORTABLE TO WALK.
UM, YEAH, I THINK WE CAN, WE CAN ADD, WE CAN ADD A PEDESTRIAN GATE THERE.
BRAD, CAN YOU TURN ON YOUR CAMERA WHEN YOU'RE SPEAKING? OH YEAH, SORRY.
ATTENDEES TO THE CAMERA ONLY WHEN SPEAKING.
UM, YEAH, WE CAN ADD A PEDESTRIAN GATE AT THAT LOCATION.
SO I WANT THAT TO BE A CONDITION OF THIS, YOU KNOW, MAKE SURE THAT'S DONE.
AND THEN I WAS, I HAD SOME CONCERNS, DIRECTOR
I SEE THERE IS ACTUALLY, AND IT'S PEDESTRIAN GATEWAY ADDRESS, PART OF IT THERE IS CONVENIENCE RETAIL
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LOCATED NEARBY.THERE'S THE KIND OF STUFF THAT YOU'D WANNA LIKE, YOU KNOW, YOU NEED TO GET TO ON JUST A DAILY BASIS.
IT'S ALL HANDY WITHIN WALKING TO SINCERE.
AND THEN I ALSO REALIZED THAT THERE'S, UH, YEAH, THIS METHODIST HOSPITAL THERE, WHICH PRESUMABLY I WOULD IMAGINE THAT THIS WOULD BE A PRIME PLACE FOR EMPLOYEES WORKING IN THE HOSPITAL TO, UM, TO LIVE AND BE, YOU KNOW, SO THEY COULD LIVE HERE AND WALK TO THE HOSPITAL AND, UM, SOME OTHER EMPLOYMENT CENTERS HERE TOO.
SO ACTUALLY I'M KIND OF COMING AROUND AND THINKING THIS IS MORE WITH A BETTER, BETTER LOCATION.
I ORIGINALLY THOUGHT I, SO IT WAS LIKE JUST A BUNCH OF APARTMENTS AND NOTHING ELSE.
DID YOUR QUESTIONS GET ANSWERED? UM, FOR THE MOST PART, I, I WOULD ASK THAT WHEN THE EXHIBITS AREN'T PREPARED AND FINALLY PROVIDED TO US THAT ESPECIALLY THE FISCAL NEEDS ANALYSIS AND THE DETAILED DEVELOPMENT PLAN OR BUDGET, I WOULD HOPE THAT YOU COULD ERR ON PROVIDING TOO MUCH INFORMATION THAN THE MINIMUM AMOUNT OF INFORMATION.
UH, JUST TO FURTHER JUSTIFY OUR INVOLVEMENT IN THIS IN TERMS OF THE GRAND SCHEME OF, UH, THE BENEFIT OF THE TAX EXEMPTION.
UM, BECAUSE FOR VISITING THE PROPERTY, I KNOW YOU CAN ONLY SEE SO MUCH EXTERNALLY.
UM, IT SEEMS VERY WELL MAINTAINED.
UH, 95% OCCUPANCY, THE PLAYGROUND AND POOL AMENITIES DIDN'T SEEM TO NEED EGREGIOUS AMOUNTS OF IMPROVEMENT.
SO, UH, JUST TO FILL IN THOSE HOLES, UH, MATCH THE NUMBERS THAT ARE IN THE PROFORMA WOULD BE HELPFUL.
APPROACH YOU GET AROUND HERE, 15 IS WHEN YOU START TO NEED TO DO A LOT OF VERY INTENSE RENOVATIONS BECAUSE KIND OF YOU GET TO THE END OF THE USEFUL LIFE OF GROUPS AND, YOU KNOW, INTERIOR S AND THINGS.
AND SO TRYING TO STATE THAT OFF, I GUESS IS THE IDEA BEFORE THAT IT GETS TO THAT POINT AND, AND THERE'S MAJOR DETERIORATION.
WE CAN GO AHEAD AND PROACTIVELY DO THAT, BUT, BUT YOU MAY BE ASKING, HEY, THERE'S A 40,000 DOOR BUDGET, WHAT IS THE DETAIL LINE? I JUSTIFY ALL THE THINGS THAT ARE LISTED IN THE PROFORMA.
BECAUSE IT JUST DOESN'T SEEM SUSTAINABLE THAT WE TAKE EVERYTHING OFF THE TAX ROLL WHEN WE'RE 15 YEARS IN AND RENOVATION.
SO I MEAN, FOR THE NECESSITY OF THE TAX EXEMPTION IN ORDER TO FUND ALL THESE MAINTENANCE AND IMPROVEMENT MEASURES.
UM, JUST WANNA SEE MORE THAN JUST A EXCEL SHEET.
I WAS TRYING TO REMEMBER IF THERE'S SOMETHING THAT WE DO GET AS IT GETS CLOSER.
UH, YOU KNOW, WHEN, WHEN WE'RE ACTUALLY HEADING TOWARD THE CLOSING.
THERE IS, IS IT THE T-D-H-C-A-I THINK MAYBE REQUIRES MORE OF A BREAKDOWN? RACHEL, HAVE YOU SEEN THAT IN OUR CLOSING DOCUMENTS? I MEAN, IT'S NOT TYPICALLY ATTACHED TO WHAT DO YOU NEED TO GO? ALRIGHT.
UM, YEAH, SO IT'S NOT TYPICALLY ATTACHED TO WHAT IS PART OF THE CLOSING PACKAGE THAT THE BOARD WOULD RECEIVE FOR FINAL APPROVAL.
UM, BUT WE CAN FOLLOW UP WITH THE DEVELOPER TEAM ON THAT.
UM, THIS EXHIBIT A KIND OF CHECKLIST OR ITEMS THAT, YOU KNOW, ARE WITHIN THE BOARD'S DISCRETION TO REQUEST, UM, WHICH YOU'RE, YOU'RE DOING.
UM, SO CERTAINLY WE CAN FOLLOW UP ON ANY SPECIFIC ITEMS THAT YOU'D WANT TO SEE.
UM, AND I THINK TO KIND OF PIGGYBACK ON A, A QUESTION THAT YOU HAD ASKED EARLIER, THIS MOU SORT OF REPRESENTS THE TERMS THAT WE WOULD EXPECT TO SEE IN THE FINAL DOCUMENTS THAT WOULD COME BACK TO YOU IN ANOTHER COUPLE.
SO DO, ARE YOU SAYING THAT WE NEED TO ADD ANYTHING TO EXHIBIT A OR SO WE CAN, WE CAN ADD A GOOD ONE HERE, BUT IN OTHER WORDS, IS THERE ANYTHING ON EXHIBIT A NOW THAT WOULD SATISFY THAT? I, I MEAN, BASED ON IF I'M UNDERSTANDING YOUR, YOUR QUESTION CORRECTLY, DR. MOORE, I THINK THE PHYSICAL NEEDS ANALYSIS FOR REHABILITATION PROJECTS, UM, AND YOU KNOW, THE SITE PLAN, UM, YOU, YOU KNOW,
BUT IF THERE IS ANYTHING THAT, UM, THIS GROUP WOULD, YOU KNOW, FEEL IT'S APPROPRIATE TO ADD, WE CAN CERTAINLY LET YOU DO THAT.
I'M PLEASED WITH THE EXHIBIT DAY, BUT WE HAVEN'T RECEIVED ANYTHING.
AS LONG AS YOU'RE NOT ASKING US TO ADD ANYTHING.
UM, AND THEN THE FINAL THING I WILL SAY, 'CAUSE WE'RE APPROVING THE MOU, THAT WAS IN YOUR BOARD PACKET, BUT I HAVE SINCE REQUESTED A FEW LITTLE TWEAKS.
UM, NOTHING TO DO WITH THE FINANCIAL PARTS OF THE MOU, BUT JUST I LIKE TO BE
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VERY CAREFUL ON, UM, WHAT RIGHTS THE DHFC HAS TO APPROVE THINGS, UH, IN THE OPERATIONS OF THE PROPERTY.UM, AND THE WAY THESE DEALS WORK IS THAT EVEN THOUGH THE DHFC IS THE GENERAL PARTNER, WE UH, DELEGATE SOME OF OUR GENERAL PARTNER RESPONSIBILITIES TO THE SPECIAL LIMITED PARTNER.
UM, BUT WE REALLY DON'T WANT TO GO OVERBOARD ON THAT DELEGATION TO THE EXTENT THAT WE CAN'T KIND OF KEEP OUR HANDS ON WHAT'S HAPPENING.
THAT COULD BE A PRO THAT WE COULD CONSIDER TO BE A PROBLEM.
AND SO I'M VERY CAREFUL ABOUT THAT.
THOSE PIECES OF THE MOU, WHICH ARE, UM, I COULD DIRECT YOU TO IT, BUT I DON'T THINK ANYONE CARES ANYWAY.
I'VE BEEN WORKING WITH YOU DO CARE.
WELL SO IT WOULD BE CASES OF MISMANAGEMENT CASES OF LIKE YEAH, OR JUST WE'RE, SO IT WOULD BE ON PAGE THREE OF THE MOU AND IT SAYS IT DEFINES THE MAJOR DECISIONS THAT WE WOULD HAVE TO CONSENT TO.
AND UM, THERE WERE SOME REQUESTS TO CHANGE WHAT'S IN OUR STANDARD MOU.
THERE WERE SOME REQUESTS ON THE PART OF APRIL HOUSING AND UM, AND SO SOME OF THOSE REQUESTS I THOUGHT WERE OKAY AND SOME I THOUGHT WERE NOT, SO.
AND SO, UM, WE MADE A FEW LITTLE TWEAKS.
DO YOU WANNA KNOW WHAT THOSE ARE?
WHAT ARE THERE WE CAN THERE, GO AHEAD.
ALL RIGHT, SO HERE'S AN EXAMPLE.
IT TALKS ABOUT THAT THEY WON'T CHANGE THE PARTNERSHIP ACCOUNTANTS.
UH, ITEM 14 ON PAGE FOUR, ROMAN NUMERAL 14, IT SAYS TO ENGAGE A NEW FIRM AS PARTNERSHIP ACCOUNTANTS, BUT I ALWAYS WANT US TO HAVE THE RIGHT TO ALSO TO APPROVE ANY CHANGE TO THE PROPERTY MANAGER.
SO I ASK FOR THAT TO BE INCLUDED.
UM, THEN, UH, TRYING TO WHERE THESE OTHER ONES ARE, OH, LIKE ITEM 17, UM, IT'S BASICALLY SAYING THAT IF THEY DO SOMETHING THAT'S OUTSIDE OF THIS AUTHORITY THAT WE'RE DELEGATING TO THEM, THEN THEY HAVE TO COME TO US FIRST.
THEY WANNA DO SOMETHING OVER AND ABOVE WHAT WE'VE DELEGATED TO THEM.
THEY HAVE TO COME TO US FIRST AND THEY WANTED TO REVISE THE LANGUAGE TO SAY IF IT WOULD INCREASE OUR RISK OF LIABILITY.
WELL, I DON'T FEEL LIKE THAT, THAT DOESN'T MAKE ME I AGREE WITH YOU.
AND SO, UM, SO MY SUGGESTION THERE, FOR EXAMPLE, IS TO SAY TAKE ANY MATERIAL ACTION THAT IS OUTSIDE THE SCOPE.
IN OTHER WORDS, IF THERE'S SOMETHING SUPER MINOR THEN, YOU KNOW, THAT CAN HAPPEN I GUESS.
RIGHT? BUT I DIDN'T LIKE THE LANGUAGE ABOUT SUBJECTING US TO INCREASED RISK OF LIABILITY.
UM, AND THEN THERE WAS ONE OTHER THAT ALSO WAS THAT KIND OF LANGUAGE.
DO YOU REMEMBER RACHEL? UH, I THINK ITEM SEVEN ABOVE.
AND THAT ONE'S TO AMEND ANY OF THE DOCUMENTS.
UM, AND IT, AGAIN, IT SAYS UNLESS IT HAS A MATERIAL ADVERSE EFFECT ON THE GENERAL PARTNER, WELL I WASN'T TOO HAPPY WITH THAT EITHER.
AND SO WE'RE GONNA MAYBE BEAT THAT UP BY INCLUDING IF IT HAS ANY MATERIAL ADVERSE EFFECT ON THE, UH, GROUND LESSOR OR, YOU KNOW, WHAT WAS THAT OTHER LANGUAGE, RACHEL, THAT WE AFFILIATES OR YEAH.
MANAGEMENT OF THE PROJECT MAKE THAT A LITTLE BROWN BROADER THAN JUST, SO THAT'S, I KNOW EVERYONE LOVES TO DO THIS WORDSMITHING THAT I DO ON A DAILY BASIS.
BUT ANYWAY, THAT'S, THAT'S THE THINGS SO THAT EVERYONE UNDERSTANDS THAT WHAT YOU WERE GIVEN WILL CHANGE A LITTLE BIT.
DID YOU HAVE SOMETHING ELSE? NO, JUST SOMETHING I'M GONNA ADD.
I TRYING TO GO BACK TO THE
THAT WAS EMAILS, BUT IS THIS IT WHAT WAS EMAILED TO THAT'S WHAT YOU HAVE ON THE TABLE? YES.
UH, JUST DEALS PROFORM, IT MAY LEAD TO KIND OF DIRECTOR MOORE WAS SAYING PROFORMA CONSTRUCTION BUDGET SOURCES USELESS.
JUST THOSE THREE ITEMS WE KIND WANT.
I THINK ALSO, YOU KNOW, WHEN THESE PRIOR TO AARON, HIS SUCCESSOR KIND OF SAID, HEY, WE KIND SAID, LOOK, PUT THESE, UH, DEALS IN FOR A BOND INDU, BUT WE JUST SEE IF THEY GET THE RESERVATION, THEN WE REALLY SCRUTINIZED THEM, BUT, YOU KNOW, MADE SO, RIGHT.
[00:30:01]
CORRECT.THIS IS SUPPOSED TO BES WHEN WE'RE REALLY DRILLING DOWN ON WHETHER WE WANT THIS DEAL OR NOT.
I THINK MAYBE THE ORIGINAL PRESENTATION THAT PRESENTS THE DEAL, WHAT IT LOOKS LIKE, WHAT'S THE SCOPE.
I MEAN, NOT THAT, BUT THE SPONSOR SAYS, HEY, WE'RE GONNA INSTALL STAINLESS STEEL, WE'RE GONNA DO THIS, YOU KNOW, WE'RE GONNA RE GUT THIS.
LIKE THIS IS IT, YOU KNOW, THIS IS WHEN WE'RE REALLY KIND OF APPROV IT.
WHEREAS THIS PRESENTATION DOES SEEM A LITTLE LIGHT.
UH, GIVEN WHAT MY UNDERSTANDING IS ON RESERVATION, LET'S SEE.
MU YOU WANNA PARTNER WITH US AND GET THE TAX ABATEMENT.
OKAY, LET'S, LET'S DRILL DOWN AND SCRUTINIZE THIS.
SO THAT'S KIND OF WHAT THIS TRUE FOR.
SO, SO YOU KNOW, IF HOUSING GOOD SPONSOR, BUT JUST SETTING EXPECTATIONS FOR FUTURE DEALS, UH RIGHT.
JUST MORE INFORMATION WHEN WE GET TO THIS POINT.
THIS ONE, SINCE IT'S NOT FULLY VAGUE AS WELL, KIND HAVE TO WIRE JUST TO GET SOMETHING PRESENTABLE AS WELL, BUT WELL, 20 WELL TAKEN.
LIKE THIS IS THE TIME WHERE YOU GUYS NEED TO REALLY GET INTO THE MEAT OF IT ALL AND UM, YEAH.
BUT THAT'S, THAT IS ALSO WHY WE WANTED RUSH TO GET IT ON HERE SO IT CAN BE IN FRONT OF YOU.
GIVE THE PROPER CONSIDERATION.
'CAUSE THAT'S THE LAST THING WE WANT TO DO IS JUST RUSH IT.
THE DECISION ON SOMETHING THAT IS VERY VALUABLE.
THIS, THIS IS IMPACT ATTENTION THAT YEAH.
WE'RE INDUCEMENTS JUST THE INDUCEMENT.
TAKING WATER, GETTING SOMETHING RIGHT.
BUT THEN IT'S LIKE, THIS IS, DO WE, THIS IS THE MOMENT WHERE DO WE REALLY WANT TO DO STEAL? EXACTLY.
I DON'T THINK THE BOND RESERVATION VOTE IS QUITE THAT.
IT'S, I MEAN, THERE'S A MAJOR OBJECTION THAT, YOU KNOW, JUST IN THEORY
ANYWAYS, JUST YES, GOOD POINT.
THANK YOU SATING FOR EVERYBODY.
AND IS IT A TIMING ISSUE WHERE WANT APPROVAL TO MOVE FORWARD ON THESE RESOLUTIONS IN ORDER TO DRAFT AND BECAUSE IT TAKES A LONG TIME TO DO THE DRAFTING, RIGHT? YEAH.
BUT WHEN IT CLOSES, WHEN WE ARE TRULY GOING TO AFFIRM, RIGHT? YES.
YOU, YOU LITERALLY APPROVE NOTHING, RIGHT.
UNTIL THE FINAL, HOWEVER, I MEAN YEAH.
WE BETTER HAVE A DANGER LICENSE, SAY NO, ALL FA WORKED LIFE, IT BETTER BE SOLID.
WHY GET US AN OBJECTION THAT CAN JUSTIFY A LOT OF PEOPLE THAT WON'T MAKE LUCK.
SO I WOULD, SO THIS IS BEFORE WE GET EVERYONE PREGNANT WITH THE DEAL.
IF YOU DON'T WANNA DO THE DEAL, IT'S BETTER KNOWN NOW YES.
WELL, AND THE TIMING ALSO, WHEN YOU GET THE RESERVATION, THEY GOT LIKE, WHAT, SIX MONTHS TO CLOSE THE DEAL AFTER GET RESERVATION.
SO THERE'S, THEY ARE UNDER, YEAH.
ALL LIKE EASY CLOSING FLIGHT TEST.
YOU GUYS ARE PROBABLY A VERY TRICKY, LIKE, IT, IT IS A JUGGLING PROCESS, RIGHT? LIKE IF THEY, THE DEVELOPER, US, THE CITY, ALL THE LENDERS, AND THEN ALL OF OUR PARTNERS, RIGHT? EVERYBODY'S GOTTA JUGGLE THEIR OWN BALLS, LIKE THE DEVELOPER.
AND SO THEY HAVE TO BE READY MONTHS AND MONTHS BEFORE TO GET INTO THE LOTTERY.
THEN ONCE THEY GET INTO THE LOTTERY, THEY HAVE TO COME TO US AND SAY, ALL RIGHT, HERE'S KIND OF WHAT WERE IDEA IS.
DO YOU WANT TO SAY? WE SAY, OKAY, GIVE IT A SHOT.
THEN THEY, THEY, THEY GET THE RESERVATION.
THEY'RE LIKE, OKAY, NOW WE, IT IS GO TIME.
THEN WE ACTUALLY KIND OF START DIGGING INTO THIS AND SAYING, OKAY, HERE'S THE, HERE'S THE FINE DETAILS OF THIS.
WHAT, WHAT DO WE REALLY WANT OUT OF IT? WHAT DO WE WANT TO SEE? LIKE, ONLY STOP TODAY.
SO IT'S THIS PROCESS AGAIN, IT'S, IT'S VERY DIFFICULT.
EVERYONE WOULD DO IT
IT'S NOT LIKE THE BOND BOTH PERFUNCTORY VOTING ANYWAYS.
I MEAN, IF, I MEAN, IF EVERYONE HAS WITH A WELL ON THE RIGHT, IF THERE'S SOMEBODY OBJECTION ABOUT THAT LOCATION WHERE THEY KNOW NO MATTER WHAT HAPPENS OR HOW GOOD THE DEAL IS, I'M NOT VOTING FOR SOME OF THE ALLOCATIONS.
THEY KNOW WHEN THE BOND VOTE EXPRESS BY.
THERE'S NO POINT IN GOING FORWARD THEN IT'S BETTER JUST NOT EVEN GET THE RESERVATION.
THIS IS, THERE'S GATE TO PUT IN OR STUFF TO MU OVER.
THIS IS A GOOD TIME TO ABSOLUTELY MAKE THAT.
WE, WE'VE DONE THAT WITH NO, OF COURSE.
DOES THE ORIGINAL LITE CREDIT EXPIRE? OR HOPEFULLY JUST I SOMEONE SAY LIKE WE WERE EXTENDING IT, EXTENDING THE RESTRICTIONS.
SO THIS DEAL IS OUTTA THE COMPLIANCE PERIOD, WHICH MEANS THAT THE SPONSOR REALLY DOESN'T HAVE ANY MORE LIABILITY PAYING BACK THE TAX CREDIT.
THEY'RE NOT IN, UH, COMPLIANCE.
THERE'S, THERE'S STILL OTHER RECOURSE AT THIS POINT.
BUT WHAT THIS DOES IS SORT OF WHAT THEY CALL RE CREDITS PROPERTY.
IT GETS ANOTHER TAX CREDIT INVESTOR INTO THE DEAL, TAKES OUT THE OLD ONE.
IT REHABS THE PROPERTY WITH A LOT MORE MONEY.
THEY GET SUB TAX PAYMENT, YOU KNOW, BUT
[00:35:01]
IT RESETS THE RESTRICTIONS FOR ANOTHER 30 YEARS.SO IT'S A HUGE, IT'S STILL A HUGE COMMITMENT DOING THIS THING, YOU KNOW, AND IT'S ANOTHER 15 YEARS OF COMPLIANCE.
THEY GOT THE COMPLIANCE PERIOD RESET, WHICH IS A VERY ONEROUS AND THAT, YOU KNOW, THE DEVELOPERS REALLY GOTTA RUN IT RIGHT? UH, OR UNCLE SAM SAYS, WELL, I SAID, THAT'S WHY YOU SEE MOST OF THE TIME THESE TAX CREDIT PROJECTS, THEY'RE THE BEST IN THE NEIGHBORHOOD BECAUSE THEY ARE, YEAH.
THEY'RE COMPELLED TO, TO BE THE BEST.
OKAY, I THINK WE'RE READY FOR A VOTE.
UM, I NEED A MOTION AND A SECOND THOUGH.
ANYONE WANNA MOVE FOR APPROVAL ON I AGENDA ITEM FIVE? I'LL MOVE IT.
UM, OKAY, I'M GONNA GO DOWN THE LIST.
DIRECTOR ALLEN, IN FAVOR, UH, DIRECTOR MARSHALL C IN FAVOR, DIRECTOR HINTON.
IN FAVOR, DIRECTOR ELLIS IN FAVOR? I'M IN FAVOR, UH, DIRECTOR MOORE IN FAVOR.
SECRETARY PAGE IN FAVOR AND DIRECTOR ZADY IN FAVOR.
AND THANK YOU TO APRIL HOUSING FOR
UM, OUR NEXT ITEM IS, UH, REVIEW AND DISCUSSION OF THE DHFC TREASURER'S REPORT FOR THE TWO MONTH PERIOD ENDING ON FEBRUARY 29TH, 2024.
SO IS SHANNON ON? SHANNON, ARE YOU ON? SHE IS, YES, I AM, ERIN.
I DON'T KNOW IF WE, WE CAN TAKE US THROUGH THIS REPORT, UM, AND WE'LL, UH, WE'LL STOP THERE.
SO THIS IS FOR THE TWO MONTHS, UM, ENDED ON FEBRUARY 29TH.
AND, UH, JUST SO YOU, YOU KNOW, I ALWAYS LIKE TO START OFF WITH CASH BALANCES.
AS OF, UH, THE END OF FEBRUARY, CASH AND CASH EQUIVALENCE TOTALED, UH, 14 MILLION, UH, ROUGHLY $765,000.
THAT'S UP FROM THE 14,000,583 AT, UH, 12 31 20 23.
YOUR TOTAL INCOME FOR THESE FIRST TWO MONTHS ON ACCRUAL BASIS IS RIGHT AT, UH, RIGHT UNDER $588,000, WHICH IS $315,000 HIGHER THAN THE SAME TIME PERIOD LAST YEAR.
UH, SO COMING INTO THE YEAR STRONG WITH THESE FIRST TWO MONTHS, UM, YOU KNOW, WE, WE HAVE A COMPARISON TO BUDGET WITHIN YOUR PREPARED FINANCIALS AT THE VERY END, BUT THAT BUDGET'S AT A, AT THE ANNUAL BASIS, UH, SO REALLY WE, WHAT WE DO IS WE ANNUALIZE SAY, WHAT ARE, YOU KNOW, TAKE IT DOWN AND SAY WHAT'S, YOU KNOW, TWO TWELFTHS OR ONE SIXTH OF THE, THE REVENUE EXPECTED FOR THESE TWO MONTHS IF WE WERE DOING IT ON AN EVEN BASIS.
AND THAT WOULD BE, UH, THAT WOULD BE HIGHER THAN WHAT WE'VE GOT.
UH, 696,000 COMPARED TO THE ACTUAL OF 5 88, BUT STILL REALLY GOOD STRONG START THERE.
EXPENSES ARE EXTREMELY LOW FOR THESE FIRST TWO MONTHS, LESS THAN 16,000.
AGAIN, IT'S BECAUSE WE'RE TAKING TWO MONTHS OF THE TOTAL EXPENSES.
AND JUST AS IN 2023, THERE'S THE BIGGEST EXPENSE IS THE BUDGETED TRANSFER FOR SALARY COSTS AND, UH, OTHER PERSONNEL REIMBURSEMENTS TO THE CITY OF DALLAS, WHICH, UH, IS, HAS NOT YET OCCURRED.
SO THAT ACCOUNTS FOR ALMOST 90,000 OF THE VARIANCE BETWEEN BUDGET AND ACTUAL.
SO THE NET CHANGE IN FINANCIAL POSITION FOR THE TWO MONTHS DID TOTAL 572,243.
REALLY A QUIET FIRST TWO MONTHS TO THE YEAR, BUT, UH, THE DOLLARS ARE, ARE COMING IN.
QUESTIONS, I GUESS IT'S REALLY FOR ERIN.
UM, SO WE HAD REQUESTED THAT THE CITY BILL US QUARTERLY, SO THAT WE WOULDN'T HAVE TO JUST BE SURPRISED AT THE END OF THE YEAR.
I GOT A REQUEST LIKE A MONTH AGO, AND THEY SAID, WELL, HOW MUCH? AND THEN I TOLD 'EM, BUT THEY HAVEN'T COME BACK, SO I THINK, I DON'T KNOW, I'LL, I'LL JUST FOLLOW UP AGAIN AND SAID, HEY, CAN WE SET THESE QUARTERLY BILLINGS SO THAT WE'RE NOT, YES.
DO YOU HAVE SOMETHING? DIRECTOR ELLIS? THE LAND LEASE.
OKAY, SO THE MOST RECURRING REVENUE IS GONNA BE OUR LEASE? YES.
THAT RIGHT NOW WE ABOUT 190,000 YEAR DATE OR, OH, TWO MONTHS.
WE JUST STARTED ON THE DOMAIN, RIGHT?
[00:40:01]
PLANNED LEASE PAYMENT.THAT'S WHAT WE, AND WE HAD A CLOSING PAYMENT ON FEBRUARY.
SO WE'RE LOOKING PRETTY GOOD AT RECURRING BANKABLE, LIKE, HEY, THIS COMES TO US EVERY MONTH.
AND THE LAND LEASE OR MONTHLY PAYMENTS, THE GROUND LEASE PAYMENTS.
THEY'RE NOT ALL, THEY'RE NOT ALL CASH THOUGH.
I WILL TELL YOU THAT YOU HAVE SOME LAND LEASE THAT'S A AMORTIZED COST.
SO I'LL JUST, I'M GONNA INPUT THAT IN, YOU KNOW, THE MAJOR PLACE THAT YOU'RE GONNA SEE ACTUAL CASH COMING IN IS, UH, DEFINITELY ON YOUR BOND APP FEES, UM, ANNUAL ISSUER FEES, UM, THAT CAN ALSO HAVE SOME ACCRUAL.
DEVELOPER FEES ARE DEFINITELY CASH COMING IN.
AND GC FEES, UM, CAN BE A MIX AS WELL.
SO IT'S REALLY HARD TO, YOU KNOW, I HATE TO TELL YOU ALL THIS, BUT IT'S HARD JUST TO TELL WHAT'S CASH, WHAT'S ACTUAL CASH IN THE DOOR DURING THESE, DURING THIS MONTH VERSUS WHAT'S GETTING ACCRUED NOW? YOUR TOTAL AS, AS IT SHOWS ON THE TREASURE REPORT IN FRONT OF YOU, YOU CAN SEE INCOME ON A CASH BASIS FOR THESE TWO MONTHS WAS 413,000.
SO THERE WAS A, A GOOD AMOUNT OF CASH COMING IN.
UH, BUT I WOULD NOT, YOU CAN'T BLANKET SAY ALL OF LAND LEASES IS CASH IN THE DOOR.
ALL, UH, THAT LITTLE PROJECTS THAT ARE EXISTING FOR YOU ON WHAT? THOSE ARE ALL
DOMAIN'S GONNA BE OUR BIGGEST FLIGHT.
WELL, FROM NOW GOING FORWARD, I THINK OUR FIRST ONE WAS THE STATES OF FERGUSON THAT WE KIND OF SWITCHED TO THIS, UH, LEASE PAYMENT.
THAT ONE'S STILL UNDER CONSTRUCTION, BUT WITH DOMAIN.
YEAH, THAT'LL BE LIKE A REALLY GOOD
PLUS DID YOU NOTICE WE HAVE INTEREST IN INCOME ON HERE? OH YEAH.
SO YEAH, ACTUALLY I DO WANNA UPDATE ON THAT.
ANA, IT'S NOT GONNA BE HERE TODAY.
SHE HAS SOME MORE THINGS, BUT SHE IS ALMOST DONE WITH THE TRAINING.
I THINK SHE SAID SHE'LL BE DONE BY MAY 1ST AND THEN WE CAN GO AHEAD AND MOVE OVER ALL OUR STUFF TO THOSE ACCOUNTS AND, UH, START, THAT'S THE INVESTMENT INCOME.
OH, I DON'T KNOW WHAT THIS INVESTMENT, I WAS THINKING MAYBE.
NO, THAT'S WHAT IT, IT'S OFF OF THIS, THIS SAVINGS IN DIFFERENT THINGS.
NO, THERE'S NOTHING IN INVESTED, LIKE HE SAID, AARON SAID.
YEAH, SO PROBABLY SOMETIMES SOON.
ALRIGHT, WERE THERE ANY OTHER QUESTIONS ON THE TREASURER'S REPORT? UM, THIS IS DIRECTOR AND I, I HAD LIKE ONE QUICK QUESTION.
UM, HOW MUCH IS IN, IF AT ALL, IS INFLATION BAKED INTO ANY OF THESE FINANCIAL FIGURES? LIKE SAY BUDGET OR ANYTHING LIKE THAT? IS THAT TAKEN INTO ACCOUNT? OKAY.
AND FOR THE BUDGET IT WOULD'VE BEEN OKAY.
YOU KNOW, I'M SURE IN THE PROCESS THAT AARON WENT THROUGH, BUT IT'S DEFINITELY NOT IN THE ACTUALS THAT YOU'RE SEEING IN THE FINANCIALS.
IT'S BACKWARD LOOKING EXCEPT AS IT COMES THROUGH IN REALITY, I GUESS I SHOULD SAY THAT.
BUT WE'RE NOT CLOSING ANYTHING UP.
THE MONTHLY FINANCIALS ARE DEFINITELY BACKWARD LOOKING.
OUR BUDGET WILL BE FORWARD LOOKING AND WE DO TRY TO TAKE INTO ACCOUNT INFLATION INTO THAT TO, TO MAKE SURE THAT WE'RE, OUR BASES ARE COVERED THOUGH.
ANY OTHER QUESTIONS? THANK YOU TO SHANNON.
UM, OKAY, SO MOVING ON TO THE PIPELINE.
I THINK, UM, THIS IS AGENDA ITEM SEVEN REVIEW AND DISCUSSION OF THE CORPORATION'S PIPELINE REPORT AS OF APRIL 5TH, 2024.
UM, GENERAL MANAGER, QUINTO, DID YOU, UH, HAVE ANYTHING YOU WANNA SAY JUST IN GENERAL ABOUT THE PIPELINE BEFORE WE HAVE THOSE REPORTS THAT WE REQUESTED? UH, JUST CALL OUT, YOU KNOW, WE CLOSED ON DOMAIN AT MIDTOWN, SO IT WAS A GREAT ACQUISITION.
SO SAY HI AFTER, SAW THE ANNOUNCEMENT ON LINKEDIN, WHICH IS PRETTY COOL.
WE'RE GOING TO BE HAVING A, UH, RIBBON CUTTING SORTS NEXT WEEK ON THE 24TH, SO HOPEFULLY WE CAN GET A COUPLE OF YOU GUYS OUT THERE AND HAVE A GOOD TIME.
AND THEN, UH, WALK THE PROPERTY AGAIN AND THEN LOOK OVER ALL OF OUR
MOORE'S GONNA BE ESPECIALLY EXCITED ABOUT THAT
UM, JUST KIDDING HERE, BUT NO, NOT NOTHING ELSE REALLY THAT'S, THAT'S CHANGED.
UM, BUT WE DO HAVE, I THINK JEFF T AND STEVEN CLARK.
SO, SO I, UH, WAS, SINCE WE HAD A FAIRLY LIGHT AGENDA TODAY, UM, AND
[00:45:01]
IT'S BEEN, UH, WELL OVER A YEAR SINCE WE CLOSED ON THE BRISCOE AND THE DYLAN, WHICH WERE OUR, UH, NEW FORAY INTO A HUNDRED PERCENT OWNED, UH, COMMUNITIES.UM, AND SO I WAS WANTING THEM TO KIND OF GIVE US AN UPDATE ON, YOU KNOW, WHERE WE ARE AFTER THE FIRST YEAR.
SO I DON'T KNOW WHO YOU WANT TO GO FIRST.
STEVE, EVAN ON BOTH STEVE AND JEFF.
HELLO, THIS IS, UH, JEFF T I'M, UH, ASSET MANAGER WITH OPPORTUNITY HOUSING GROUP.
AND, UH, FIRST I'D LIKE TO THANK, UH, AARON AND JACKIE FOR, YOU KNOW, THE GREAT PARTNERSHIP THAT WE'VE GOT GOING, UH, TO HELP MAKE THIS, UH, PROJECT IMPACTFUL TO THE, UH, MIDDLE INCOME DALLAS RESIDENTS.
UM, I THINK THE PROJECT HAS BEEN REALLY SUCCESSFUL SO FAR, UH, IN, IN TERMS OF ACHIEVING THE AVAILABILITY, THE AFFORDABILITY GOALS SET BY, UH, BY THE CITY.
UH, WE'RE VERY PLEASED WITH THE RESULTS AND, UH, YOU KNOW, WE HOPE TO BE ABLE TO DO, UH, MORE PROJECTS IN THE FUTURE.
UM, TO GIVE YOU AN IDEA OF THE PARTICIPATION, UM, PROJECTS 322 UNITS, UH, 80 45% OF THE UNITS ARE ALLOCATED TO THE 80% A MI LIMIT.
UH, WE CURRENTLY HAVE 103 U UH, RESIDENTS IN UNITS THAT ARE PARTICIPATING IN THE PROGRAM.
SO THAT'S 71% OF THE, YOU KNOW, GOAL OF 145 UNITS.
SO, UM, UH, THINGS ARE MOVING ALONG REALLY WELL IN THAT AREA.
AND THE AVERAGE SAVINGS AT THAT LEVEL IS $237 A MONTH.
SO, UH, YOU KNOW, WHICH IS SIGNIFICANT TO PEOPLE THAT MAKE THAT KIND OF MONEY.
AT THE 140% A MI LIMIT, AGAIN, WHICH IS 45% OF THE PROPERTY, UH, WE'VE GOT 78 PARTICIPANTS, UH, AND 54, THAT'S 54% OF THE GOAL.
UM, THERE IS NO AVERAGE SAVINGS BECAUSE THE CAP, UH, THAT A MI LIMIT IS, IS WELL ABOVE THE CURRENT, UH, RENTAL RATES.
UM, WE ALSO ACCEPT, UH, SECTION EIGHT HOUSING.
UH, WE HAVE BEEN PURSUING, UH, PEOPLE THAT ARE APPLYING ON THE, UH, DHFC WEBSITE.
UM, SOME DON'T MAKE ENOUGH MONEY, SO WE CAN'T PURSUE ALL OF 'EM, BUT, UH, WE ARE, UH, ACTIVELY, UH, YOU KNOW, ATTRACTING, UH, SECTION EIGHT, UH, HOUSING PARTICIPANTS.
UH, WE'VE HAD A NUMBER OF PEOPLE COMMENT ON THE PROGRAM, UH, YOU KNOW, HOW IT'S BENEFITED THEM.
AND, YOU KNOW, WE FOUND THAT, UH, YOU KNOW, THIS 80% CAP OR, YOU KNOW, WE, UH, WHERE PEOPLE ARE GONNA END UP PAYING LESS THAN WHAT THE MARKET RATE IS FOR THE, FOR THE PROPERTY, FOR THE UNIT, UH, IS, IS A GREAT MARKETING TOOL.
UM, IN TERMS OF ADDRESSING OCCUPANCY, WE, UH, WHEN WE TOOK THE PROPERTY OVER, IT WAS 90% OCCUPIED.
UH, THE GOAL IS OBVIOUSLY 95%.
UM, AND RENTS, UH, UH, DID GO DOWN PRIMARILY FOR TWO REASONS.
ONE, BECAUSE WHEN WE, UH, YOU KNOW, PEOPLE, UH, COME IN AT THE 80% LEVEL, THE CAP REDUCES, YOU KNOW, THE REDUCES THE RENT PLUS THE MARKET, UH, HAS BEEN, UH, YOU KNOW, WE'VE, WE'VE BEEN OUT, EXCUSE ME, PERFORMING THE SUBMARKET BY ABOUT ONE TO 2%.
UH, BUT IT'S BEEN RUNNING AROUND 91, 90 2%.
SO, AND, AND WE'RE AT THE UPPER END OF THE, OF THE MARKET, UH, WITH OUR RENT LEVELS.
UM, WE'VE BEEN OFFERING, UH, WE FOUND THAT RESIDENTS SEEM TO BE PRETTY TRANSIENT IN DALLAS, UH, WE LOOKED AT THE TURNOVER AND 75% OF THE NOTICES THAT WE'VE GOTTEN ARE EITHER FOR BUYING A HOME OR CONDO OR A JOB CHANGE.
UH, WHICH, YOU KNOW, WE REALLY CAN'T DO TOO MUCH ABOUT.
UH, WE DO ON EVERY RESIDENT THAT DOES GIVE NOTICE, THE STAFF CALLS EACH RESIDENT AND THEY CAN OFFER FREE RENT IF IT'S, YOU KNOW, APPROPRIATE IF THEY THINK THEY CAN KEEP THE RESIDENT THERE.
UM, FROM A MARKETING STANDPOINT, THE PROPERTY'S GOT GREAT CURB APPEAL BOTH INSIDE NOW.
UH, WE FEEL WE'VE GOT VERY THOROUGH EXPOSURE ON THE INTERNET AND SOCIAL MEDIA.
UH, WE REVIEW THE RENTAL RATES, UH, EVERY DAY AGAINST COMPETITION AND, AND LOOK AT OUR INTERNAL STATUS, YOU KNOW, IF WE HAVE A SURPLUS OF A CERTAIN UNIT TYPE AND WE'LL PROMOTE THEM.
AND, UH, WE UPDATE THE WEBSITE DAILY WITH THOSE PROMOTIONS.
[00:50:01]
WE HAVE, UH, ONE LEASING AGENT WILL MAKE OUTREACH MARKETING CALLS, UH, ONE DAY A WEEK.SO WE'RE TRYING TO EXPAND, UH, YOU KNOW, OUR EXPOSURE, UH, THAT WAY.
WE'VE HAD A NUMBER OF, UH, SPECIAL EVENTS, UH, INCLUDING THE MAIN LOBSTER TRUCK, IF ALL OF YOU ARE FAMILIAR WITH THAT.
AND THAT'S BEEN A REAL SUCCESS.
UH, WE, WE HADN'T HAD TOO MUCH SUCCESS WITH LOCATORS, BUT WE FOUND A SERVICE WHO CAME IN AND DID SOME, UH, VIDEO AND TOOK SOME STILL SHOTS, PUT IT ON THEIR WEBSITE.
IT ENDED UP DRAWING 25 TOURS AND EIGHT LEASE APPLICATIONS.
UM, AND YOU KNOW, OBVIOUSLY WE PLAN ON DOING THAT.
AGAIN, YOU CAN'T DO IT EVERY WEEK, BUT YOU DO IT INTER INTERMITTENTLY THROUGHOUT THE YEAR AND, AND, UH, UH, YOU KNOW, GET, GAIN THE BENEFIT OF IT.
UM, ONE OF THE THINGS WE'RE DOING, WE FINALLY GOT THE, UH, ELECTRIC VEHICLE CHARGERS TRANSFERRED OVER TO US.
SO THAT'S ANOTHER, UH, MARKETING, UH, UH, PLUS FOR US, UH, GIVEN, YOU KNOW, THERE'S MORE AND MORE PEOPLE WITH, UH, ELECTRIC VEHICLES AND, YOU KNOW, THEY NEED A PLACE TO CHARGE 'EM.
THEY NEED, THEY NEED TO BE ABLE TO CHARGE 'EM WHERE THEY LIVE.
UM, REGARDING CAPITAL EXPENSES, UH, WE'VE COMPLETED, UH, UH, ALL THE MAJOR YEAR ONE CAPITAL PROJECTS.
UH, WE IMPROVED THE ANCHORING OF THE, UH, HVAC UNITS ON THE ROOF, UH, 65,000.
UH, WE PAINTED, UH, ALL THE BUILDING GROUND FLOOR HALLWAYS TO IMPROVE THE CURB APPEAL.
THEY HAD BEEN BEATEN UP PRETTY, PRETTY WELL OVER THE, YOU KNOW, FIRST FOUR OR FIVE YEARS OF THE PROPERTY.
UH, WE MADE SOME ROOF REPAIRS AT THE VARIOUS PENETRATIONS TO AVOID ROOF LEAKS.
IT'S ABOUT 40,000 AND WE'VE ADDED MULCH TO THE LANDSCAPING AGAIN TO IMPROVE THE CURB APPEAL, AND THAT'S ABOUT 25,000.
SO WE'VE EXECUTED 420,000 OUT OF THE $448,000 BUDGET.
UM, PROPERTY MANAGEMENT STANDPOINT, THE PROPERTY'S BEEN FULLY STAFFED WITH GOOD CONTINUITY SINCE INCEPTION, WHICH IS REALLY IMPORTANT.
UH, UH, PARTICULARLY WITH THE RESIDENTS.
THEY GET USED TO SEEING SOMEBODY AT THE, AT THE FRONT DESK FOR HELP AND, AND THE MAINTENANCE PEOPLE THAT'S, UH, CREATING THAT KIND OF, UH, LONGER TERM RELATIONSHIP IS, IS ALWAYS A BENEFIT.
STAFF'S VERY MOTIVATED, UH, COMMITTED TO SEEING THE PROPERTY SUCCEED.
AND, UH, GRAYSTAR IS THE PROPERTY MANAGER AND IN GENERAL, THEY'RE DOING A VERY GOOD JOB.
ANY QUESTIONS? SO, UM, I HAVE QUESTIONS.
UM, SO I WENT BACK AND LOOKED AT THE PROFORMA AND COMPARED IT TO THE ACTUALS.
AND, UM, AND I, AND I GUESS MY QUESTION IS, UM, DID YOU HAVE TO DO A SIGNIFICANT ADDITIONAL DRAW DOWN OF THE RESERVES OVER WHAT YOU HAD ANTICIPATED IN THE PRO FORMA? NO, AND THE, THE, THE BIGGEST, YOU KNOW, ISSUE THERE IS THE FACT THAT THE OCCUPANCY'S NOT BEEN AT 95%, AND THAT'S, THAT'S WHERE YOU SEE THE, THE BIG VARIANCE.
WE'VE HAD, YEAH, I THINK IT'S 4 35 WAS BELOW BUDGET, SO IT'S SIX AND A HALF PERCENT.
UM, WHAT IT'S, THE IMPACT IT'S HAD IS NOT THAT WE HAVE TO DRAW FUNDS FROM.
BECAUSE EXPENSES, EXPENSES, OPERATING EXPENSES ARE PRETTY MUCH ON TARGET IT LOOKS LIKE.
BUT ANYWAY, IN ANSWER TO YOUR QUESTION ABOUT, UH, WHETHER WE HAVE TO DRAW DOWN RESERVES, THE ANSWER IS NO.
WE HAVEN'T HAD TO, IT JUST MEANS THAT WE DON'T HAVE AS MUCH CASH AVAILABLE TO MAKE THE PRINCIPAL PAYMENT ON THE, UH, ON, ON THE BOND.
THE SECONDARY BOND INTEREST PORTION.
IT'S, UH, IN ACCORDANCE WITH THE PROFORMA, YOU'RE SAYING THE INTEREST DRAW.
SO THAT'S, SO WE'RE, YOU KNOW, WE'RE BEHIND SCHEDULE FROM, FROM THAT ASPECT ON THE EXPENSE SIDE, UM, ONE OF THE THINGS THAT'S SKEWS THE NUMBERS A LITTLE BIT, IF YOU, UH, YOU KNOW, IF YOU LOOK CLOSELY, IT, IT, UH, WE WERE OVER BUDGET BY 7.2%, BUT, UM, DURING THE YEAR, PEOPLE HAVE BEEN GOING FROM BUYING ENERGY DIRECTLY, UH, FROM OTHER, UH, VENDORS.
[00:55:01]
UH, BECAUSE WE'VE, WE'VE BEEN ABLE TO INSTITUTE A, A LESSER EXPENSIVE PROGRAM AND, UH, THE BUDGET DIDN'T SHOW ANY INCOME OR ANY EXPENSE FOR UTILITIES.BUT WHEN PEOPLE ARE CONVERTING, UH OH, OKAY.
PAY THE BILLS AND THEY REIMBURSE US.
SO YOU'LL SEE UTIL YOU'LL SEE A NEGATIVE VARIANCE IN THE UTILITY EXPENSE.
I MEAN, TWO 15 WAS THE PRO FORMA, TWO 90 WAS THE ACTUAL, YEAH.
AND SO IF YOU TAKE THAT OUT, UM, BECAUSE THERE IS INCOME ON THE OTHER INCOME SIDE, UH, WHERE WE'RE COLLECTING, IN FACT, THERE'S A, UH, THERE'S A PRI THERE'S, I THINK WE'RE 6,000, WE COLLECTED $6,000 MORE THAN WE PAID OUT.
SO THE VARIANCE THEN BECOMES, WE WERE OVER BUDGET BY ABOUT 2.3%.
AND, UH, THAT WAS VARIOUS DIFFERENT, UH, YOU KNOW, AREAS.
I KNOW ONE OF WHICH IS A, UH, UH, REVENUE MANAGEMENT, UH, UH, PROGRAM THAT WE USE CALLED A IRM THAT WASN'T BUDGETED FOR, BUT IT'S BEEN EXTREMELY HELPFUL IN, UH, MANAGING THE RENTS AND ON THE, UM, I'M THE BEING UNDER GOAL ON THE AFFORDABLE UNITS.
UM, IS THAT BECAUSE YOU'RE NOT GETTING APPLICANTS WHO MEET THE INCOME REQUIREMENTS? UM, OR IS THAT BECAUSE YOU'RE HAVING LOWER TURNOVER THAN EXPECTED? WELL, IT, WE FOUND THAT IN OTHER PROPERTIES IT TAKES UP TO, YOU KNOW, SOMETIMES UP TO TWO YEARS TO JUST FIND, YOU KNOW, YOU HAVE PEOPLE THAT ARE LIVING THERE THAT RENEW, THAT YOU KNOW, ARE CONVENTIONAL OR, YOU KNOW, DON'T WANT, YES, THAT'S PROGRAM FOR WHATEVER REASON.
UM, UH, AND, UH, SO THAT, BUT WHEN YOU HAVE AN AFFORDABLE, A UNIT THAT WOULD GO TOWARD THE AFFORDABLE GOAL, UH, BECOME AVAILABLE, ARE YOU HAVING ANY DIFFICULTY FINDING APPLICANTS WHO ARE AT THAT INCOME LEVEL? NO, WE HAVEN'T.
YOU KNOW, THE FACT THAT WE'VE GOT A HUNDRED AND YOU KNOW, THREE IS, IS, YOU KNOW, A HUNDRED AND, YOU KNOW, THINK 71%, WHATEVER IT IS, 16 MONTHS NOW IS REALLY GOOD.
UM, YOU KNOW, WE HAVE THESE OTHER, OTHER PROPERTIES IN CALIFORNIA AND THEY, THEY, YOU KNOW, NOT, YOU KNOW, THIS, THIS HAS BEEN, THIS ONE'S BEEN THE MOST SUCCESSFUL IN TERMS OF HOW QUICKLY WE'VE GOTTEN TO WE ARE.
AND, UH, IT'S JUST A MATTER OF, YOU KNOW, PEOPLE WANTING TO LEASE AT THAT PROPERTY.
IT'S NOT AN ISSUE OF NOT HAVING UNITS AVAILABLE.
WE DON'T, YOU KNOW, NOTHING IS EARMARKED, UH, FOR ANY PARTICULAR, UH, UH, INCOME LEVEL.
ALL ANY UNITS THAT'S VACANT CAN BE LEASED TO ANY, YOU KNOW, ANYBODY, WHETHER IT'S 80%, ONE 40 OR SECTION EIGHT.
UM, SO THAT'S NOT, YOU KNOW, THAT'S NOT AN ISSUE.
UM, SO IT'S, IT'S JUST A MATTER OF FINDING, YOU KNOW, MORE PEOPLE THAT ARE INTERESTED IN THE PROPERTY THAT, OR AT THAT, UH, INCOME LOAN.
UH, OTHER QUESTIONS? UM, YEAH, WHAT IS, IS THIS THE PROPERTY WHERE WE WERE, UH, TALKING ABOUT THAT PILOT PROGRAM WITH HOUSING CONNECTOR? NO, 'CAUSE THAT WAS THE DILL.
ANY OTHER QUESTIONS? UM, ALL RIGHT.
WELL, THANK YOU FOR
I THINK IT'S, UH, VALUABLE, YOU KNOW, FOR US, AS I SAID, IT'S A, A NEW PROGRAM FOR US.
AND SO, UM, YOU KNOW, IT'S VERY HELPFUL TO HAVE THIS ONE YEAR, UM, INFORMATION.
NO, I WOULD JUST ADD, JUST I COULD COMMENT BOTH JEFF AND STEVEN, UH, BECAUSE DYLAN, THEY'RE CONS PROFESSIONALS.
THEY'RE VERY RESPONSIVE, AND AS YOU CAN TELL, JEFF KNOWS HIS NUMBERS BACK FORWARD, SO THEY, I, I DON'T THINK THEY COULD BE DOING BETTER JOBS.
I'M JUST VERY, VERY IMPRESSED WITH, WITH THE WAY THAT THEY THANK YOU, YOU GUYS.
SO I GUESS WE'LL HEAR ABOUT THE DI HI, IT'S, UH, STEVEN CLARK, UM, PROJECT ADMINISTRATOR FOR THE DI.
THE DI IS 125 UNITS, UH, LOCATED AT 45 33 CEDAR SPRINGS ROAD.
IT'S A COMBINATION OF ONE AND TWO BEDROOM UNITS WITH, UM, BOTH FLATS AND TOWN HOME FLOOR PLANS.
UM, IT WAS ACQUIRED IN DECEMBER 21ST, 2022.
[01:00:01]
CONVERTED, UM, 70 UNITS, THAT'S 56% OF THE PROPERTY, UM, TO OUR A MI LEVELS.AND OUT OF THOSE 70 UNITS, UM, WE'VE REALLY MADE A CONCERTED EFFORT TO, UM, DO OUTREACH TO THE HOUSING AUTHORITIES IN THE AREA.
SO 45 TENANTS AT 64%, UH, HAVE VOUCHERS.
UM, AND WE IN THOSE VOUCHERS COME FROM DALLAS HOUSING AUTHORITY, DALLAS COUNTY, MESQUITE HOUSING, UM, GARLAND, GRAND PRAIRIE.
SO WE HAVE, UM, ONE LEASING AGENT THAT DOES BOTH, UH, OUTREACH TO ALL THE HOUSING AUTHORITIES, UM, AS WELL AS, YOU KNOW, THE LOCAL HOSPITALS AND PLACES THAT WE THINK, UM, WE CAN ATTRACT TENANTS FROM.
UM, IN TERMS OF, UM, THE FINANCIAL PERFORMANCE FOR THE LAST YEAR, WE, UM, REVENUE IS BELOW WHERE WE, UH, HAD BUDGETED BY ABOUT, UH, 11%.
AND THAT'S REALLY ATTRIBUTABLE TO OUR EFFORTS TO TURN OVER THE, UM, THE UNITS.
UM, SO OUR AVERAGE VACANCY, UM, WAS ABOUT 11%, UM, WHERE WE WANTED TO BUDGET AT, UH, 95, GET THE 95% OCCUPANCY WE TOOK OVER AT ABOUT, UH, 90% OCCUPANCY.
AND, UH, REALLY THE, IT'S BEEN, UM, YOU KNOW, WHEN WE ATTRACT SOME OF THESE, UM, TENANTS FROM THE HOUSING AUTHORITIES, WE HAVE TO HOLD THE UNITS VACANT FOR SOMETIMES TWO OR THREE MONTHS IN ORDER TO GO THROUGH THE PROCESS TO GET THE TENANTS IN, RIGHT.
SO REALLY THAT'S WHAT'S, UM, THAT'S WHAT'S CAUSED THE MAJORITY OF THE VACANCY, AND WE DON'T THINK THAT'S GONNA BE A PROBLEM GOING FORWARD.
UM, WE'RE CURRENTLY PROJECTED TO BE AT 95% IN THE NEXT 30 DAYS, SO, UM, BUT WE'LL CONTINUE WITH OUR OUTREACH, UM, TO ALL THE HOUSING AUTHORITIES ON THE OPERATING SIDE.
UM, WE HAVE HAD SOME, YOU KNOW, UNANTICIPATED COSTS AND, UM, COSTS THAT HAVE GONE UP RELATED TO INFLATION.
AND I'LL GIVE YOU A FEW EXAMPLES OF THIS.
AND THIS IS PRETTY COMMON THROUGH, UM, YOU KNOW, A LOT OF THE DALLAS FORT WORTH PROPERTIES INSURANCE HAS GONE UP.
UM, YOU KNOW, IT WAS ABOUT ALMOST 30,000 MORE THAN WE HAD, UH, ORIGINALLY BUDGETED FOR.
FORTUNATELY THIS YEAR WHEN WE RENEWED IT HAS COME DOWN BY 25%.
SO IT'S BACK IN LINE TO WHERE WE HAD BUDGETED IT.
IT WAS JUST A, A REAL ONE, KIND OF ONE TIME INCREASE.
AND WE'RE USING, UM, GREYSTAR PROPERTY MANAGEMENT WHILE WE ALSO WENT OUT AND BID, UM, THE INSURANCE, WE, WE ENDED UP GOING WITH GREY STAR'S PROPERTY INSURANCE.
SO THEY HAVE A BLANKET PROGRAM AND THEY DID A TERRIFIC JOB THIS YEAR, NEGOTIATING THAT POLICY AND REALLY GOT SOME DISCOUNTS FOR, FOR A LOT OF THEIR PROPERTIES.
THE OTHER, SO A QUESTION, WHAT WAS THE OTHER INSURANCE OF 222,000? THAT WAS A, UM, 222,000 THAT WAS A, RELATED TO THE STORM DAMAGE BACK IN, YOU KNOW, RIGHT AFTER WE, UH, ACQUIRED THE PROPERTY.
REMEMBER DURING CHRISTMAS TIME, THERE WAS A BIG STORM DAMAGE AND IT CAUSED SOME, UH, SO WE FILED A CLAIM AND THAT'S THE, YOU KNOW, THAT'S THE CASUALTY FROM THAT CLAIM.
SO THAT WAS, HAS, HAS THAT CLAIM BEEN PAID? HALF OF IT'S BEEN PAID, AND WE JUST RECEIVED THE OTHER HALF.
SO HALF OF IT'S BEEN PAID OUT.
WE JUST RECEIVED THE OTHER HALF AND THAT'S BEING TRANSFERRED TO THE PROPERTY SO WE CAN PAY THOSE VENDORS.
AND WE, WE MAY ACTUALLY GET ANOTHER, 'CAUSE WE ALSO ASKED FOR SOME, SOME OF THE UNITS WERE DOWN DURING THAT TIME, SO WE'VE ASKED FOR SOME RENT TOO, AND THAT MAY, THOSE PROCEEDS MAY COME IN PRETTY SOON AS WELL.
WE DON'T HAVE A NUMBER ON THAT, SO THAT WILL HELP A LOT IN COMPARISON TO THE PRO FORMA.
[01:05:01]
THE OTHER BIG EXPENSE THAT, YOU KNOW, REALLY WE DIDN'T EXPECT WAS, UM, WE HAD TO HIRE A SECURITY PATROL THAT'S A MOBILE PATROL, SO THEY'RE NOT PHYSICALLY LOCATED ON SITE, BUT, UM, THEY DO ROUNDS, UM, THROUGHOUT MOST OF THE EVENING.AND THAT'S AN ADDITIONAL 26 AND A HALF THOUSAND A YEAR.
UM, JUST BECAUSE THE, WE'VE SEEN A PRETTY, UM, KIND OF HIGH INCREASE IN TRESPASSING AND VANDALISM AND THE, UM, THE POLICE RESPONSE TIME IN THAT AREA IS ABOUT TWO TO THREE HOURS.
SO WE JUST NEED SOMEBODY THAT CAN BE THERE, UH, QUICKER.
UM, AND THEN THERE ARE OTHER, YOU KNOW, CONTRACTED, OTHER CONTRACTED COSTS.
WE'VE HAD SOME TURNOVER IN OUR MAINTENANCE STAFF.
UM, WE HAD TO, UM, DO SOME ELEVATOR REPAIRS.
SOME OF THAT WAS CAUSED BY VANDALISM.
AND WE'VE HAD, UM, YOU KNOW, HIGHER THAN NORMAL, UH, TURNOVER COSTS JUST BECAUSE, YOU KNOW, 56% OF THE PROPERTY HAS TURNED OVER.
WE DO HAVE A PRETTY HIGH RENEWAL RATE, WHICH IS ALMOST, UM, YOU KNOW, ALMOST 50%.
AND, YOU KNOW, BARRING THAT WE PROBABLY WOULD BE, UM, A LOT CLOSER TO OUR, UH, EMI GOALS.
SO I'LL ASK THE SAME QUESTION.
DID YOU, WOULD, DID YOU, IN TERMS OF DRAWING DOWN ON ANY OF THE RESERVES, WAS ANYTHING UNEXPECTED OR WAS IT THE DRAWDOWN THAT HAD BEEN ANTICIPATED? YEAH, THE DRAWDOWNS HAVE ALL BEEN ANTICIPATED BY THE, UM, PROPERTY CONDITION REPORT.
SO WE'VE DONE, UM, ROOF AND BALCONY REPAIRS THAT WE KNEW ABOUT AND WE JUST SCHEDULED THEM AT THE RIGHT TIME OF THE YEAR.
WE HAD TO RETRIP THE PARKING LOT.
UM, WE DID SOME LANDSCAPING IMPROVEMENTS.
UM, WE HAVE REPLACED SOME, UM, APPLIANCES THAT, UH, WE'RE NO LONGER ABLE TO BE REPAIRED.
SO ALL OF THAT'S BEEN DRAWN DOWN, YOU KNOW, PER THE, THE BUDGET THAT WE HAD, UM, SET UP FOR OURSELVES.
WHAT'S THE, UH, STATUS OF, UM, THE HOUSING CONNECTOR PROGRAM? SO, UM, THIS IS A PROGRAM THAT WE WERE, UM, WE WERE ENTHUSED ABOUT.
WE'RE STILL ENTHUSED ABOUT IT.
WE SPENT QUITE A BIT OF TIME AS, UM, YOU KNOW, AARON KNOWS WE SPENT QUITE A BIT OF TIME NEGOTIATING THE CONTRACT AND IT WAS A, UM, IT WAS A CONTRACT, ESSENTIALLY A TRI-PARTY CONTRACT BETWEEN DALLAS HOUSING FINANCE CORP HOUSING CONNECTOR AND GREYSTAR.
'CAUSE GREYSTAR WAS THE ONE THAT WOULD BE ACTUALLY IMPLEMENTING THE PROGRAM ON SITE.
GREYSTAR PULLED OUT AND SAID THEY DIDN'T FEEL COMFORTABLE BEING PART PARTY TO THE CONTRACT.
SO WE ARE, WE'RE TRYING TO FIND A WORKAROUND AROUND THAT.
UM, AND, UM, AND WE HOPE TO GET THAT FINALIZED HERE IN THE NEXT MONTH.
WHAT, WHAT ARE, WHAT WERE GREY STAR'S CONCERNS? I THINK THEY WERE CONCERNED ABOUT, UM, ANY SORT OF LIABILITY RELATED TO THE IMPLEMENTATION OF THE PROGRAM.
I MEAN, WHEN THEY'VE ACTUALLY DONE IT BEFORE THEY'VE DONE IT IN COLORADO.
AND, UM, SO THEY LOOKED INTO THAT AND APPARENTLY THEY WEREN'T PARTY TO THAT AGREEMENT AT THEIR PROPERTY IN COLORADO.
UM, BUT IT WAS PRIMARILY, YOU KNOW, THE DAY-TO-DAY IMPLEMENTATION AND ANY SORT OF LIABILITY THAT THEY WOULD HAVE.
AND THEY WANTED US TO FOCUS MORE ON THE PROPERTY MANAGEMENT AGREEMENT.
UM, AND, UH, SO KEEP THEM OUT OF THE HOUSING CONNECTOR AGREEMENT AND, YOU KNOW, MAKE ANY CHANGES AS NEEDED TO THE PROPERTY MANAGEMENT AGREEMENT SO THAT THEY WOULD BE AUTHORIZED AND DIRECTED TO IMPLEMENT THE PROGRAM.
SO MEAN IT SOUNDS LIKE GRACE, THEY'RE, YOU KNOW, ONE OF THE LARGEST PROPERTY MANAGEMENT, MAYBE THEY'RE LARGEST, MULTI LARGEST.
AND SO THEY DON'T REALLY, IT DOESN'T SOUND LIKE THEY REALLY CARE ABOUT WHAT OUR, YOU KNOW, FUNDAMENTAL MISSION IS HERE.
I MEAN, WE'RE NOT LIKE A, YOU KNOW, CONVENTIONAL
[01:10:01]
PROPERTY OWNER THAT'S JUST OUT TO MAXIMIZE PROFITS.WE'VE GOT A MISSION HERE AND IF GRAYSTAR IS NOT ON BOARD FOR THE MISSION, I THINK THAT'S SOMETHING WE GOTTA THINK ABOUT.
WE LOOK AT FUTURE DEALS AND IF GREAT START'S PROPOSED PROPERTY MANAGER, IF THEY'RE NOT, THEY HAVE A LEVEL OF INDIFFERENCE TO, UH, WORKING WITH US TO SOLVE AFFORDABLE HOUSING PROBLEMS, EXPAND HOUSING ACCESS.
AND THAT'S SOMETHING WE NEED TO TAKE INTO CONSIDERATION.
AND, UH, JUST, UH, SINCE WE LAUNCHED INTO THIS WITHOUT DESCRIBING WHAT IT IS, TONY, MAYBE YOU SHOULD GIVE A SHORT DESCRIPTION OF WHAT HOUSING CONNECTOR IS.
OKAY, SO I'VE PULLED UP, YEAH, SO HOUSING CONNECTOR, AND I THINK THEY'RE, THE REASON I WAS IMPRESSED WITH THESE FOLKS IS THEY'VE DONE THIS STUFF BEFORE AND IT SOUNDS LIKE WE'VE WORKED WITH GRAYSTAR BEFORE AND DENVER, THEY'RE A, UH, TECH FOR GOOD, NOT-FOR-PROFIT INCREASES ACCESS TO HOUSING.
UM, THEY DO IT BY, BASICALLY WHAT THEY DO IS THEY PROVIDE A BACKSTOP TO INDIVIDUALS THAT DON'T MEET THE TECHNICAL CRITERIA TO QUALIFY FOR TRADITIONAL, UM, YOU KNOW, SCREENING CRITERIA.
THEY MIGHT, RIGHT? IN TERMS OF RENTAL HISTORY, RENT, INCOME RATIO, RENTAL HOUSING DEBT, EVICTIONS, CREDIT SCORE, BACKGROUND, CRIMINAL HISTORY.
AND SO WHAT THEY'LL DO IS THEY'LL DO THEIR OWN UNDERWRITING AND THEN THEY WILL PROVIDE A GUARANTEE TO PROPERTY OWNERS THAT IF TO THE EXTENT THERE'S, UM, YOU KNOW, THEY'LL VO BASICALLY VOUCH FOR THESE FOLKS.
THEY'LL PUT UP THEIR BALANCE SHEET AND THEN IF SOMETHING HAPPENS, THEN WE'VE GOT RECOURSE BACK TO THIS ENTITY.
AND SO THE BENEFIT TO US IS IF IT ALLOWS, UM, IT INCREASES ACCESS, UM, TO OUR ABILITY TO SERVE FOLKS THAT, YOU KNOW, IF THEY HAD A, YOU KNOW, I DON'T KNOW, LIKE A, YOU KNOW, MARIJUANA CONVICTION OR SOMETHING, OR THEY, YOU KNOW, OR TRESPASSING OR SOMETHING MIGHT NOT QUALIFIED TO, YOU KNOW, THEY DON'T MEET THE CRITERIA.
WELL THIS SAY, OKAY, WE'RE GONNA VOUCH FOR THESE FOLKS.
CHECKS AND THE THE BACKSTOP INCLUDES, UM, LIKE IF THEY VACATE, YOU KNOW, THE UNIT AND THERE'S DAMAGES TO THE UNIT.
THAT'S PART OF THE BACKSTOP, I THINK.
AND YEAH, THERE'S, THERE'S LE LEGAL FEES.
WE ALSO HAVE A CASE MANAGER THAT RIGHT.
YOU KNOW, WE CAN REACH OUT TO.
SO YEAH, IT'S A PRETTY WELL THOUGHT OUT PROGRAM IN MY OPINION.
I DON'T EVEN THINK MORE, IT'S JUST, IF YOU'RE GRACE STAR, I MEAN I KNOW BOB FATE, I DON'T KNOW WELL, BUT MAYBE THEY'RE SO BIG THAT, UH, YEAH, MAYBE THEY MAYBE DON'T REALLY CARE ABOUT THIS STUFF.
IT'S JUST NOT, IT'S JUST, IT'S JUST NOT HOW THEY MANAGE.
NOT IT'S, THEY DON'T KNOW THAT THEY DON'T, THAT I PROBABLY SEE WHY, AND THAT'S, THAT'S A VERY, IT DOES TAKE FOR A PROPERTY MANAGER LIKE THAT.
IT TAKES SOME YOUR MIND AROUND THAT SOUNDS LIKE THEY'VE DONE BEFORE.
SO WE ARE ACCEPTING SECTION EIGHT IN OUR VOUCHERS IN BOTH THESE PROPERTIES.
I THINK THAT'S SO GOOD BECAUSE, YOU KNOW, WE HAVE TO, LIKE ANY CITY THERE'S TO ACCEPT VOUCHERS, YOU KNOW, PEOPLE HAVE VOUCHERS AND EVEN THOUGH THAT THE, WITH THE VOUCHER, THEY CAN CLEARLY AFFORD THE UNIT.
THEY JUST CAN'T FIND UNITS TO LEASE.
WAS THAT KNOWN? WE SOLD THE BONDS CRAZY THAT WE, WE WOULD SEXTING, WE WE BE ACCEPTING VOUCHERS THAT WAS KNOWN.
I THINK ON THESE, YOU KNOW, UH, THESE DEALS AS LONG AS WHAT OUR BUSINESS PLAN AND, YOU KNOW, WHETHER IT BE PROPERTY CONNECTOR, HOUSING'S, AUTHORITY, TENANT, WHATEVER, IT'S JUST KNOWN ON THE OUTSET WHEN WE'RE GOING TO THE MARKET FOR THE BOND HOLDERS.
I JUST WANT THEM KNOWING THAT OH YEAH.
YOU KNOW, SO, AND AS OPPOSED TO, HEY, GO DO THIS.
IT'S LIKE, OOH, YOU KNOW, OUR LENDER'S LIKE, WE DIDN'T KNOW ABOUT THAT.
YOU KNOW? NO, I THINK THAT'S KIND OF, BECAUSE I KNOW THERE'S GOING TO BE A, UH, THERE'S A POSSIBILITY OF A BOND DEAL COMING NEXT MONTH.
THOSE WOULD BE ITEMS FOR DISCUSSION AND POTENTIALLY PROBLEMATIC.
SO JUST FLOATING THAT OUT THERE.
UH, YOU MENTIONED YOU HAD TO GET ADDITIONAL SECURITY.
DID YOU GET PRIVATE SECURITY FOR THE COMPLEX OR ARE YOU USING EXTENDED NEIGHBORHOOD PATROLS? SOUNDS LIKE SAY, UM, IT'S A MOBILE SECURITY COMPANY THAT DOES OTHER, UM, MULTIFAMILY PROPERTIES IN OUR AREA.
SO THEY'RE ON A KIND OF, THEY HAVE A LIMITED KIND OF PATROL AREA SO THEY CAN GET TO THE PROPERTY, YOU KNOW, WITHIN FIVE, 10 MINUTES OF CALLING THEM.
UM, SO IT'S NOT SPECIFIC TO OUR PROPERTY, BUT THEY SERVE THE AREA AND WE, WE PARTICIPATE IN THAT, UM, IN FINANCING THAT, I THINK THOSE DRIVE 5, 3, 4 TIMES A NIGHT, RIGHT? YES.
OH ONE I, UH, SINCE BOTH OF OUR PROPERTIES DROPPED 11% MAKE, SEE, YOU KNOW, IT SOUNDS LIKE IT WAS DUE TO, YOU KNOW, TURNING OVER THE RENTS.
I KNOW THESE DEALS UNDERWRITE PRETTY TIGHT ANYWAYS, BUT PROBABLY NEED TO FACTOR THAT IN IF WE SEE NEW DEALS.
HEY, DO YOU ASSUME YOU'RE GONNA HAVE A 5% VACANCY IN THE FIRST YEAR WHILE YOU'RE KIND OF EXACTLY.
THAT'S, THAT WAS MY POINT IN REQUESTING THIS.
[01:15:01]
THAT I THINK IT'S REALLY IMPORTANT FOR US TO TAKE A LOOK, YOU KNOW, SO THAT WE, YOU KNOW, I MEAN THIS IS JUST PART OF ONLY REAL ESTATE LEARNING.HAVE, YOU'VE DONE IT A FEW TIMES, SO NOW PERFORMANCE LIKE, OH DANG GONNA WORK.
THANK YOU FOR ALL THAT YOU'RE DOING.
UH, WE APPRECIATE, UM, BRINGING THIS PROGRAM TO US AND, AND WORKING SO HARD TO MAKE IT SUCCEED.
UM, AND TAKING YOUR TIME TODAY TO GIVE US THIS UPDATE.
WE APPRECIATE YOUR PARTNERSHIP TOO.
I BELIEVE WE ARE READY TO ADJOURN.
OH, UM, THE STAFFING UPDATES, IS IT STILL, I GUESS IT WAS STILL ON HERE.
UM, ONE THING THAT I'LL ANNOUNCE IS THAT, UM, THE, UH, WE, UH, THE CITY OF DALLAS HAD OFFERED TO, UH, WELL, WE, WE HAD EXPRESSED A NEED AND THE CITY OF DALLAS HAS, UH, COMPLIED WITH, UM, ADVERTISING FOR A COORDINATOR.
AND SO I'VE BEEN TOLD THAT, UM, THAT WE'VE GOT APPLICANTS AND WE WILL BE INTERVIEWING THOSE APPLICANTS SOMETIME SOON.
AND SO WE'RE EXCITED TO, UM, TO MAYBE ADD A COORDINATOR TO OUR YEAH.
I TO GO ALL WORK, BUT NOT SHE HAS ONE MORE PERSONAL
AND SO WE ARE ADJOURNED AT 1 23.