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[Dallas Oak Cliff Gateway TIF District Board of Directors Meeting on December 15, 2025.]
EVERYONE.WE'RE GONNA CALL THE OAK CLIFF GATEWAY TO SUPPORT MEETING TO ORDER ON DECEMBER 15TH, 2025 AT 2:02 PM AND I'LL GO AHEAD AND TURN THE MEETING OVER TO OUR CHAIRS.
THANK YOU FOR JOINING US TODAY.
UM, WE ARE CALLING MEETING TO ORDER.
UM, WE HAVE WHAT? THE REVIEW OF THE, UH, CONSIDERATION.
SO, UM, REVIEW AND CONSIDERATION FOR THE MEETING, UH, RECORD DECEMBER 16TH, 2024, MEETING OF THE OAK CLIFF GATEWAY, TIFF, UH, DISTRICT BOARD OF DIRECTORS.
SO, UH, IS THERE ANY COMMENTS OR DISCUSSION ON THE MEETINGS? NO.
UH, WE CAN GET A, UH, MOTION FOR APPROVAL.
WE CAN'T HEAR YOU, BUT, UH, SORRY ABOUT THAT.
I'LL MAKE A MOTION FOR APPROVAL.
SO WE WILL ATTEMPT TO PULL UP THE ANNUAL REPORT.
UM, IT'S ALWAYS A LITTLE BIT TRICKY GETTING THE, DO YOU HAVE ANY ADVICE THAT MARK STARTED? SO
ACTUALLY NEXT, YEAH, THINK YOU PULL IT OUT FIRST, SO, OKAY.
AND THEN NEXT TO THE X, THERE'S LIKE A LITTLE, IS IT TWICE? YEAH, WE CAN SEE THAT.
CAN EVERYONE SEE THE, UH, REPORT TWICE? I FEEL LIKE THERE'S AN ECHO.
SO, UM, HOPEFULLY EVERYONE HAD A CHANCE TO PERUSE THE REPORT A LITTLE BIT, UM, REALIZE IT WAS KIND OF LATE GETTING IT OUT.
IT'S BEEN KIND OF A BUSY COUPLE OF WEEKS.
BUT, UM, JUST TO START OUT, WE HAVE A COUPLE OF PHOTOS FROM, UM, OUR MOST RECENT, UM, PROJECT THAT THE DISTRICT HAS SUPPORTED THE EAST OFF PROJECT.
AND I'LL JUST KIND OF, KIND OF HIT THE HIGHLIGHTS FOR YOU.
UM, IN TERMS OF THIS MOST RECENT YEAR, UM, THE ESTOCK PROJECT DID WIN AN, UM, IEDC AWARD, AN EXCELLENCE AWARD.
UM, WE HAVE THE, UM, SIGNIFICANT PROJECTS FOR THE DISTRICT IN THE NEXT COUPLE OF TABLES.
UM, WE'VE GOT A COUPLE OF PENDING REQUESTS, ONE THAT WE'LL HEAR ABOUT LATER TODAY.
UM, AND SO ALTOGETHER, UM, WE'VE GOT ROUGHLY ABOUT CLOSE TO 1.4 BILLION IN NEW INVESTMENT, EITHER COMPLETED OR PLANNED, AND ABOUT 36 MILLION, UM, THAT'S BEEN COMMITTED TO DATE TO THOSE PROJECTS.
UM, IN TERMS OF OUR FIXED INCOME HOUSING SUMMARY, UM, WE DO HAVE PROJECTS THAT, UM, WERE SUPPORTED BY THE TIP DISTRICT THAT HAVE AN AFFORDABLE HOUSING COMPONENT.
UM, WE ALSO NOTE THAT THERE'S BEEN SEVERAL, UM, PUBLIC FACILITY CORPORATION PROJECTS THAT ARE BRINGING, UH, MIXED INCOME AFFORDABLE UNITS TO THE DISTRICT AS WELL.
UM, YOU MAY REMEMBER THAT WE, UM, BEGAN IN 2022, A SET ASIDE RELATED TO HOMEOWNER STABILIZATION, HOME REPAIR, DISPLACEMENT MITIGATION.
UM, THE LATEST FIGURES ARE, UM, IN THE MOST RECENT FISCAL YEAR, UM, JUST UNDER 1.4 MILLION WAS TRANSFERRED TO THE HOUSING DEPARTMENT.
UM, THIS LAST YEAR, THEY'VE BEEN FOCUSED A LOT ON TRYING TO, UM, SPEND FEDERAL FUNDS GIVEN ALL OF THE CHANGES IN THE FEDERAL GOVERNMENT.
AND SO THEY, UM, HAVE BEEN SLOW TO KIND OF GET UP AND RUNNING ON LOSE USING LOCAL FUNDING.
BUT AT THE CLOSE OF THE FISCAL YEAR, THERE WAS A, UM, A THIRD PARTY VENDOR THAT HAD BEEN IDENTIFIED THROUGH A PROCUREMENT PROCESS TO ADMINISTER THE HOME REPAIR PROGRAM.
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CONTRACT WAS APPROVED BY CITY COUNCIL IN NOVEMBER.AND SO WE'RE ANTICIPATING THAT HOPEFULLY WITH NEXT YEAR'S ANNUAL REPORT, WE'LL ACTUALLY HAVE SOME RESULTS AND USE OF THAT, THOSE FUNDS TO REPORT.
UM, IN TERMS OF VALUE AND INCREMENT, UM, AS OF THE 2025 TAXABLE VALUE, UM, WE'VE GOT A LITTLE OVER 1.7, UM, BILLION, UM, THAT'S AN INCREASE OF 1.4 BILLION OVER, UM, THE BASE YEAR OR ABOUT 504%.
UM, BASED ON THIS, WE WOULD ANTICIPATE THE DISTRICT COLLECTING ABOUT 9.5 MILLION, UM, FOR TAX YEAR 2025 IN CALENDAR YEAR, CALENDAR YEAR 26.
UM, IN TERMS OF WHERE WE ARE WITH BENCHMARKS, UM, WE HAVE A GOAL OF, UM, ADDING 600 6400 RESIDENTIAL UNITS, UM, TO DATE ABOUT, UM, A THOU 4,905 HAVE BEEN CONSTRUCTED AND ANOTHER, UM, 637 ARE UNDER CONSTRUCTION AND 310 ARE PLANNED.
SO THAT TRANSLATES INTO ABOUT 91% OF THE GOAL.
AND IN TERMS OF NEW AND RENOVATED COMMERCIAL AND FLEX SPACE, UM, WE'RE AT ABOUT 84% OF OUR GOAL OF ADDING 900,000 SQUARE FEET.
SO, UM, LAST YEAR THE, THE BOARD ONLY MET ONCE DURING THE FISCAL YEAR.
UM, IF THERE'S ANY ATTENDANCE CORRECTIONS NEEDED, LET US KNOW.
IN TERMS OF, UM, COUNCIL ITEMS FOR THE DISTRICT, UM, THERE WERE THREE APPROVED, UH, RELATED TO THE DISTRICT.
UM, THE EOP PROJECT THAT THE BOARD APPROVED, UM, LAST SEPTEMBER, UM, WENT TO CITY COUNCIL FOR, UM, FINAL APPROVAL IN OCTOBER.
UM, THE OAK HOUSE, WHICH WAS ONE OF THE PUBLIC FACILITY CORPORATION PROPERTIES, UM, WAS APPROVED FOR, UM, THAT STRUCTURE IN OCTOBER AS WELL.
AND THEN THE ANNUAL REPORT WAS APPROVED IN FEBRUARY.
SO THIS IS OUR, YOU KNOW, CURRENT BUDGET CAPACITY.
UM, AGAIN, THIS IS NOT ACTUAL CASH, BUT IT'S, UM, CAPACITY BASED ON, UM, TOTAL DOLLAR PROJECTIONS, UM, USING OUR, UM, NET PRESENT VALUE BUDGET AS A BENCHMARK.
OUR, UM, 20 25 26 WORK PROGRAM.
VERY SIMILAR, CONTINUE TO HELP IMPLEMENT PROJECTS IN THE DISTRICT, UM, ENCOURAGE, UM, ALTERNATE MODES OF TRANSPORTATION CONNECTIONS TO PARKS AND TRAILS.
UH, WE'LL CONTINUE TO WORK WITH THE HOUSING DEPARTMENT ON, UM, DEPLOYING FUNDS FOR, UM, HOMEOWNER STABILIZATION AND HOME REPAIR.
UM, OUR ONLY PENDING ITEM CURRENTLY IS THE, UM, ANNUAL REPORT.
UH, WE HAVE A PHOTO THERE OF ONE OF THE EVENTS THAT WAS HELD AT THE ESTOCK PROJECT.
UM, THE JUNTO BAKERY, UM, IS ANTICIPATED TO OPEN IN THE SPRING.
UH, WE HAVE OUR FINANCIAL STATEMENTS AND WE HAVE A COUPLE OF OUR, UM, FINANCE TEAM STAFF ONLINE IF THERE'S SPECIFIC QUESTIONS.
UM, THIS IS ACTUALLY THE ONLY PART OF THE REPORT THAT STATE LAW REQUIRES EVERYTHING THAT WE'VE TALKED ABOUT UP UNTIL THIS POINT IS ADDITIONAL INFORMATION THAT WE'VE ADDED TO PROVIDE A MORE COMPREHENSIVE UPDATE OF ACTIVITY IN THE DISTRICT.
SO IN TERMS OF FINANCIAL OBLIGATIONS, UM, THE GOOD NEWS IS WE ACTUALLY PAID OFF THREE OBLIGATIONS THIS YEAR.
UM, THE HOG ELEMENTARY SCHOOL FUNDING, UM, THE GATEWAY CLIFF PROJECT, AS WELL AS, UM, THE, UM, SAME PLAZA.
AND, UM, THE ONLY OUTSTANDING DEVELOPER OBLIGATION AT THIS TIME IS THE, UM, ESTOCK PROJECT WHERE WE HAVE A COMMITMENT OF, UM, JUST A LITTLE OVER 2.6 MILLION IN TERMS OF DISTRICT-WIDE SETASIDE.
UM, THE CURRENT BALANCE IS A LITTLE OVER 2.5 MILLION.
UM, WE'VE BEEN UNDER BEEN HAVING SOME DISCUSSIONS ABOUT POTENTIAL SUPPORT FOR REMAINING FUNDING NEEDS AT, AT THE PHASE ONE OF HALFORD PARK.
AND WITH THAT, I THINK WE ARE THROUGH THE HIGHLIGHTS AND HAPPY TO ANSWER ANY QUESTIONS.
DOES, UM, ANY FINANCIAL, UH, STATE LEVEL, UM, RESTRUCTURING OF PROPERTY TAX HAVE ANY AND WHAT POTENTIAL IMPLICATIONS? UM, NOT THAT WE'RE AWARE OF IN TERMS OF, UM, LIKE TAXABLE VALUE IMPLICATIONS? THE ONE THING THAT, UM, MAY OR MAY NOT IMPACT
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THE DISTRICT, SOME FOLKS MIGHT HAVE HEARD ABOUT, UM, I THINK IT WAS SENATE BILL THREE OR SIX.IT'S THE ONE WHERE ESSENTIALLY, UM, ANY COMMERCIAL PROPERTY, UM, AS OF RIGHT CAN BUILD MULTIFAMILY.
UM, SO THAT KIND OF, YOU KNOW, FOR SOME FOLKS REMAIN ELIMINATE SORT OF A HURDLE IN TERMS OF LIKE ENTITLEMENTS, BUT, UM, FINANCIALLY OF COURSE IT STILL HAS TO MAKE SENSE TO, TO DO A PROJECT.
ANY COMMENTS, QUESTIONS, CONCERNS, WELL PRESENTED? SO, UH, CAN WE GET A MOTION TO, UH, APPROVE AND FORWARD THE RECOMMENDATION THE FOR APPROVAL FOR THE CITY COUNCIL? THUMBS UP IF BEST YEAR
ALRIGHT, UH, NEXT UP ON THE, UH, AGENDA IS THE REVIEW AND CONSIDERATION OF THE REGULAR MEETING SCHEDULE, UH, FOR, UH, THE CALENDAR YEAR 2026.
I, I THINK WE HAVE, UM, THE SCHEDULE AND THE PACKET HERE.
UH, YEAH, THESE ARE MOSTLY PLACEHOLDER DATES.
THE REASON WHY WE HAVE A ONE PROPOSED EARLY IN THE YEARS, BECAUSE WE HAVE AT LEAST ONE ITEM THAT WE WERE HOPING TO HAVE READY FOR THIS MEETING THAT MIGHT BE READY IN JANUARY.
UM, BUT MOST OF THE OTHERS FROM THE DECEMBER MEETING ARE JUST PLACEHOLDERS UNLESS THERE'S BUSINESS, CHECK THEIR CALENDARS.
DOES EVERYONE HAVE THE DATES OR DO WE NEED TO CALL THEM OUT? I DO HAVE THEM, YEAH, I GOT THEM TOO.
UM, IF THESE DATES DO WORK FOR EVERYBODY, UM, CALL FOR, I'LL MAKE A MOTION THAT WE ADOPT THE DATES AS PROPOSED BY STAFF FOR FUTURE MEETINGS.
ALRIGHT, WE HAVE, UH, SOME SPECIAL GUESTS HERE FOR REVIEW AND CONSIDERATION OF THE DEVELOPMENT AGREEMENT WITH, UH, 5 49 EAST JEFFERSON BOULEVARD AND OR ITS AFFILIATES IN AMOUNT NOT TO EXCEED 10 MILLION PAYABLE FROM THE CURRENT FUTURE OAK CLIFF GATEWAY TIP FUNDS IN CONSIDERATION FOR THE JEFFERSON PROJECT ON PROPERLY CURRENTLY ADDRESSED FIVE 49TH.
LISA JEFFERSON, CAN EVERYONE SEE THE PRESENTATION? YES, I CAN.
SO, UM, I'LL GO THROUGH, UM, THE STAFF PRESENTATION AND THEN WE DO HAVE REPRESENTATIVES HERE FROM, UM, THE DEVELOPMENT TEAM TO ANSWER ANY QUESTIONS AND MAYBE GIVE A LITTLE BIT MORE, UM, INSIGHT INTO THE PRODUCT.
SO HOPEFULLY YOU LIKE OUR NEW, UH, BRIEFING TEMPLATE.
THIS WAS ROLLED OUT OF THE, THE CITY MANAGER'S PR WIZARDS.
IT'S QUITE A BIT DIFFERENT THAN OUR, OUR PRIOR, UM, FORMAT, WHICH TAKES A LITTLE BIT OF GETTING USED TO FOR STAFF.
SO, UM, I'LL KIND OF HIT THE HIGHLIGHTS ON THE PROPOSED PROJECT, GIVE A LITTLE BACK BIT OF BACKGROUND, UM, COVER SOME OF THE DETAILS OF THE PROJECT, THE STAFF RECOMMENDATION NEXT STEPS.
SO, UM, MOST OF YOU HAVE BEEN ON THE BOARD FOR A WHILE, SO YOU KNOW THAT THE
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DISTRICT WAS CREATED IN 1992, UM, SUBSTANTIALLY AMENDED A FEW TIMES.UM, CURRENTLY WE HAVE THREE SUBDISTRICTS.
SO THE PROJECT LOCATION IS, UM, THERE AT THE, UM, NORTHWEST CORNER OF, UM, MARCELLUS AND, UM, JEFFERSON BOULEVARD.
UM, A LITTLE LIKE 1.7 ACRES APPROXIMATELY.
UM, THE PROPERTY WAS ONCE HOME TO THE OAK CLIFF UNITED METHODIST CHURCH.
UM, IT'S A LANDMARK, UM, PROPERTY.
THE, UM, 2025 CERTIFIED VALUE IS JUST A LITTLE OVER 2 MILLION.
UM, WE'RE ESTIMATING ONCE THE PROJECT WAS COMPLETE.
ITS COMPLETION OF VALUE OF AROUND 5 MILLION, UM, CURRENTLY ZONED, UM, FOR MIXED USE.
THOSE OF YOU THAT LIVE IN OAK CLIFF ARE PROBABLY DRIVEN BY THE PROPERTY A NUMBER OF TIMES.
UM, THE PROPERTY HAS THREE EXISTING BUILDINGS.
UM, IT'S BEEN VACANT SINCE 2015.
UM, THERE WAS FIRE DAMAGE AND THEN WHEN THE DEVELOPER BOUGHT IT IN 2023, THEY HAD THE INTENTION OF DELIVERING THE PROPOSED PROJECT.
SO THERE IS AN, UM, AN LLC FOR THE PROJECT 5 49 EAST JEFFERSON.
UM, THEY ARE PROPOSING TO, UM, REHABILITATE AND ADAPTIVELY ADAPTIVELY REUSE ALL THREE BUILDINGS, UM, COMPLETE INTERIOR AND EXTERIOR RENOVATIONS, UM, TO CREATE APPROXIMATELY 14,000 SQUARE FEET OF, UM, COMMERCIAL RENTABLE SPACE AND, UM, 45, UM, RESIDENTIAL UNITS AS WELL AS, UM, SITE IMPROVEMENTS AND STREETS SCAPE IMPROVEMENTS.
UM, THE TOTAL PROJECT COST IS, UM, A LITTLE OVER 19 MILLION.
UM, HERE'S THE SITE PLAN, UM, OF THE ENTIRE AREA.
WE'VE GOT, UM, A LITTLE MORE OF AN ILLUSTRATIVE SITE PLAN THERE, WHICH SHOWS, UM, THE PROPOSAL FOR THE THREE BUILDINGS AS WELL AS, UM, THE SITE IMPROVEMENTS.
UM, SO PROPOSED RENDERINGS OF THE PROJECT.
UM, THIS DID GO TO THE URBAN DESIGN PEER REVIEW PANEL IN MAY, AND WE'VE BEEN WORKING OVER SEVERAL MONTHS WITH THE TEAM TO INCORPORATE, UM, THE RECOMMENDATIONS OF THE PANEL, UM, REPORTS, PROPOSED PROJECT SOURCES AND USES.
SO AGAIN, THE BUDGET'S A LITTLE OVER, UM, 19 MILLION, UM, AND THE DEVELOPMENT, UM, THE FINANCING INCLUDES A PERMANENT LOAN, UM, HISTORIC TAX CREDITS, DEVELOPER EQUITY, AND A BRIDGE LOAN, UM, UNTIL, UM, THE TIF SUBSIDY COULD BE PAID.
UM, THERE'S A BREAKDOWN OF THE PROJECT COSTS AS WELL.
UM, THE STAFF RECOMMENDATION IS, UM, A TIF SUBSIDY UP TO 10 MILLION, UM, OF APPROXIMATELY THESE CATEGORIES OF SOME ENVIRONMENTAL REMEDIATION, DEMOLITION, HISTORIC FACADE IMPROVEMENTS, PUBLIC INFRASTRUCTURE, AND AN ECONOMIC DEVELOPMENT GRANT TO MAKE THE PROJECT VIABLE.
WE'RE PROPOSING TO, UM, STRUCTURE THE TIF SUBSIDY AND INSTALLMENTS.
SO, UM, UPON SUBSTANTIAL COMPLETION, UM, WE WOULD BE LOOKING TO PAY UP TO, UM, 6.3 MILLION.
UM, AND AGAIN, DEPENDING ON THE AVAILABILITY OF FUNDING, AND THEN A SECOND INSTALLMENT UPON, UM, MEETING SOME MINIMUM OCCUPANCY REQUIREMENTS.
UM, A LOT OF OUR, UM, SUBSIDY CONDITIONS ARE, ARE FAMILIAR TO, UM, MOST PROJECTS.
UM, WE ARE WANTING TO SEE, UM, PROOF OF FINANCING BEFORE THE AGREEMENT WOULD BE EXECUTED.
UM, THE REQUIRED MINIMUM, UH, PROJECT COMPONENTS WOULD BE AT LEAST 12,000 SQUARE FEET OF NON-RESIDENTIAL SPACE, AT LEAST 40 MULTI-FAMILY RESIDENTIAL UNITS AS WELL AS SITE IMPROVEMENTS, A MINIMUM INVESTMENT OF AT LEAST 9 MILLION.
AND THAT'S FOR PARTICULAR ITEMS, UM, THAT ARE, UM, HARD COST AND PROFESSIONAL FEES.
UM, AND THAT'S JUST A SUBSET OF THE OVERALL, UM, TOTAL BUDGET COST.
UM, WE WILL BE REQUIRING 20% OF THE UNITS TO BE AFFORDABLE TO 80% A MI.
UM, THE PROJECT WILL BE SUBJECT TO THE VOUCHER REQUIREMENT AS ARE ANY, UM, RESIDENTIAL, UM, PROJECTS THAT ARE, UM, APPROVED FOR CITY FUNDING.
UH, WE HAVE A BUILDING PERMIT DEADLINE OF, UM, DECEMBER 26TH, A SUBSTANTIAL COMPLETION DEADLINE OF DECEMBER 28, UH, REQUIREMENT FOR REVIEW OF PROPERTY MANAGEMENT, UM, AND OPERATING A MAINTENANCE AGREEMENT FOR ANY STANDARD IMPROVEMENTS.
UM, DESIGN REVIEW COMPLIANCE, UM, LOCAL HIRING FOR ANY, UM, PERMANENT JOBS CREATED, UM, MINOR MODIFICATIONS, UM, AND A
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DEADLINE EXTENSION COULD BE APPROVED.WITH THE BOARD'S RECOMMENDATION, UH, WE ARE LOOKING AT A MINIMUM OCCUPANCY REQUIREMENT BEFORE WE WOULD MAKE THE SECOND INSTALLMENT OF THE TIF PAYMENT.
UM, AT LEAST 65% OF THE MULTI-FAMILY UNITS, UM, LEASED AND OCCUPIED AND AT LEAST 25% OF THE GROSS RENTABLE AREA OF THE NON-RESIDENTIAL SPACE.
UM, AND THEN WE'RE ALSO REQUIRING A, AN ONGOING MINIMAL OCCUPANCY REQUIREMENT FOR FIVE YEARS.
UM, AFTER THE SECOND INSTALLMENT.
UM, ASSIGNMENT PROVISIONS ARE PRETTY STANDARD THAT WE DON'T ALLOW THE AGREEMENT TO BE ASSIGNED EXCEPT TO A DIRECT AFFILIATE, UM, UNTIL THE PROJECT IS COMPLETED.
AND, UM, COLLATERAL ASSIGNMENTS TO LENDERS ARE ALLOWED.
COURSE MAJEURE IS PRETTY STANDARD.
UM, YOU KNOW, WITH THE FAVORABLE RECOMMENDATION FROM THE BOARD, WE'RE ANTICIPATING, UM, BRIEFING THE COUNCIL'S ECONOMIC DEVELOPMENT COMMITTEE JANUARY 6TH, AND THEN CITY COUNCIL CONSIDERATION IN JANUARY AS WELL.
UM, KIND OF BRIEFLY GO INTO THE APPENDIX, THE PROJECT TEAM, UM, AJ RAMBLER, UM, ARCHITECT, GENERAL CONTRACTOR AND PROPERTY MANAGER.
UM, WE DO USE AN OUTSIDE UNDERWRITER TO REVIEW ALL OF OUR INCENTIVE APPLICATIONS.
AND SO, UM, THE DEVELOPER INITIALLY REQUESTED 10.7 MILLION, UM, AS A RESULT OF THE UNDERWRITING PROCESS, UM, WE'RE RECOMMENDING A SUBSIDY OF 10 MILLION.
UM, JUST A JUST QUICK LITTLE SNAPSHOT OF THE BUDGET, IF THIS WORK APPROVED, YOU CAN SEE THAT IN THE BISHOP JEFFERSON SUBDISTRICT WILL STILL HAVE PLENTY OF, UM, BUDGET CAPACITY AND, UM, IT'S ANTICIPATED WE HAD TO KIND OF DO SOME, UM, A LOT OF ASSUMPTIONS, BUT, UM, OUR CURRENT ASSUMPTION IS THAT THE PROJECT COULD BE FULLY PAID BY 2030.
AND WITH THAT, UM, HAPPY TO ANSWER ANY QUESTIONS.
WE CAN ALSO ENTERTAIN ANY COMMENTS FROM THE DEVELOPMENT TEAM.
YEAH, I, I'D LIKE TO ASK A COUPLE QUESTIONS.
UM, THANK YOU FOR PRESENTING THIS FIRST OFF.
UM, LOOKS LIKE A BEAUTIFUL PROJECT, VERY EXCITED, UH, FOR SURE.
UM, WHO IS THE GROUP, UH, BACKING THIS? IT'S PROPERTY.
AND, UH, DO YOU HAVE OTHER, UM, PROJECTS THAT ARE SIMILAR TO THIS? YEAH, THE ONE Y'ALL.
UM, WE HAVE TWO, TWO COMPARABLE PROJECTS THAT ARE, I WOULD SAY VERY COMPARABLE, LARGE ADAPTIVE REUSE COMMERCIAL PROPERTIES.
FIRST IS ESTOCK, THAT'S, UM, DEVELOPMENT NOW THAT Y'ALL HELP US WITH.
UM, AND THEN THE OTHER ONE IS THE OPEN OAKLAND ASSEMBLY, WHICH IS ALSO CHURCH CONVERSION.
IT'S ON MOREL, VERY CLOSE TO DESTOCK.
UM, IT'S A 20,000 FOOT CHURCH THAT WE, UH, CONVERTED INTO OFFICE CREATIVE SPACE.
IT'S A THEATER IN IT, A PHOTOGRAPHY STUDIO, UM, IS 23 DIFFERENT ORGANIZATIONS THAT OPERATE OUT OF THAT CHURCH.
UH, UH, AND WE FOUND THAT THE ROOF WAS CAVED IN.
IT WAS IN VERY SIMILAR CONDITION TO THIS ONE.
THIS ONE'S DAMAGED BY FIRE, THAT ONE WAS DAMAGED BY WATER, BUT THE RESULTS WERE A SIMILAR BEGINS.
DID, UH, YOU GUYS SEEK FUNDING ON THE, ON THAT PROJECT? WE DID NOT USED TO FUNDING, WHICH WE HAD.
UM, NOW JUST LOOKING AT THE MATH HERE, UH, IT SAYS THE DEVELOPER EQUITY IS, UH, 2 MILLION 309 7.
UH, SO THAT'S ROUGHLY 12%, UH, CORRECT.
UM, FOR THE AMOUNT OF FUNDING THAT YOU GUYS ARE REQUESTING ON THIS, UM, IN THE SUBSIDY, UH, 12% DOWN PAYMENT JUST SEEMS LIKE A PRETTY LOW AMOUNT COMPARED TO ANY OTHER PROJECT IN MARKETS.
WHY THESE, THE HISTORIC CAPITAL STATE HISTORIC TAX CREDITS ARE SEEN AS EQUITY IN ADDITION TO THE, WELL, THEY'RE, THEY'RE PERSPECTIVE BY THE SENIOR LENDER.
SO WHEN YOU'RE USING, WHEN WE'RE BRIDGING THE CASH AND THE HISTORIC, TYPICALLY THEY'RE ONLY LOOKING FOR MINIMUM 10% OF OWNER EQUITY IN THE
SO THE SENIOR LENDER WILL ONLY LOOKING FOR 10%.
THE BRIDGE LENDERS ARE, ARE LOOKING AT THE FIFTH GRANT AND THE HISTORIC FUNDS AS WHAT THEY'RE LEVERAGING.
SO THEY'RE NOT PUTTING A LIEN AGAINST THE ACTUAL ASSET.
YEAH, SO, UH, THE, WE HAVE THE HISTORIC TAX CREDITS, WHICH IS A FORTUNATE MINE COUNTY FARM.
WE HAVE THE TIFF FUNDS, WHICH IS FORTUNATELY WE HAVE A SENIOR LENDER.
THE TIFF FUNDS AND THE HISTORIC CREDITS ARE BRIDGED, UH, BUT THE BRIDGE LENDER, BUT THAT LENDER DOESN'T PUT A LIEN ON THE PROPERTY.
THEY'RE ONLY PUTTING A LIEN ON THE CREDITS.
SO THE LENDER VIEWS OF NOT, MAYBE NOT EQUITY, BUT SOMETHING CLOSER TO EQUITY.
SO THEN THEY ONLY REQUIRE THE OWNER EQUITY PORTION TO BE 10%.
SO WHAT, UH, ON A PROJECT LIKE THIS, AND I DON'T KNOW IF YOU'RE ABLE TO SHARE, WHAT IS YOUR
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EXPECTED ROI WITH THE FEDERAL, STATE HISTORIC CREDITS AND THE D SUBSIDY? IT'S IN THE, IN UNDERWRITING FOR FORM.I'D HAVE TO PULL IT UP TO THE, I WOULD SAY IT'S THE STANDARD TO A, WHAT WAS I, I DON'T THINK WE INCLUDED AN ACTUAL, UM, RATE OF RETURN.
WE, THAT'D BE MORE LIKE WE JUST CALL IT MID TEENS.
AND AGAIN, OUR, OUR UNDERWRITER LOOKS, YOU KNOW, CERTAIN LIKE FUNDAMENTAL THINGS LIKE THAT THEY MAXIMIZE DEBT, UM, AND EQUITY AND, YOU KNOW, BASED ON THIS PARTICULAR KIND OF PROJECT, WHICH IS A CHALLENGING HISTORIC RENOVATION.
UM, THEY WERE COMFORTABLE WITH THAT SUBSIDY RANGE.
AND, AND THAT'S THE QUESTION BEHIND THE ANSWER BEHIND THE QUESTION I WAS REALLY TRYING TO GET TO BECAUSE IT JUST SEEMS LIKE COMING IN WITH SUCH A SMALL EQUITY OUT THE DEVELOPER'S SIDE, UM, ON SUCH A LARGE PROJECT, SEEMS LIKE, YOU KNOW, ONE WOULD THINK WOULD BE A HUGE ROI OH YEAH.
SO, UH, SUE, THE UNDERWRITING FOLKS, UM, THOSE WERE REQUIRED BY THE CITY? YES.
IT'S PART OF OUR STANDARD PROCESS NOW THAT THE VAST MAJORITY OF OUR PROJECTS ARE SENT TO OUTSIDE ON WRITER.
AND, UH, THEY, THEY CHECK ALL OF THOSE BOXES.
BASICALLY JUST LIKE WE WERE DISCUSSING EARLIER ABOUT RETAIL RIGHT NOW AND IT'S NOT GREAT
SO, UM, YOU HAVE MY PLANS IN PLACE TRY THINGS AND ALSO OUR, YEAH, SO WE, WE ARE VERTICALLY INTEGRATED, SO OUR MANAGEMENT COMPANY'S THE SAME DEVELOP COMPANY, UM, PROXY PROPERTY.
AND WE WORKED A LOT, UM, WITH COMMUNITY ORGANIZATIONS AND TRIED IT USING GRASSROOTS MOVEMENT AND ATTRACT TENANTS.
AND EXAMPLE, AT ESTOCK WE HAVE 17 SPOTS, 15 OF 'EM ARE LEAST 14 OF THOSE PEOPLE ARE FRONT.
SO OUR GOAL IS TO WORK WITHIN THE NEIGHBORHOOD FOR OUR TENANTS TO BE NEIGHBOR TOWN HALL AS WELL THAT YOU GUYS CORRECT.
WE'VE ALREADY DONE, WE'VE ALREADY DONE SOME FEEDBACK EVENTS FOR, UM, JEFFERSON
SO YEAH, I THINK VERY, WAS VERY POSITIVE I WOULD SAY IS FEEDBACK WE RECEIVED.
UM, THE, SO THAT'S THE FIRST THING THAT'S LIKE OUR FOUNDATION IS WE TRY TO BE INVOLVED IN THE COMMUNITY WITH THE PEOPLE THAT ARE THE ENTREPRENEURS AND THE PEOPLE THAT ARE TRYING TO BUILD SOMETHING.
THE SECOND IS WE'LL WORK WITH OBVIOUSLY LIKE A BROKERAGE FIRM, BUT AROUND ESTOCK WE'RE WORKING WITH VENTURE.
I WILL SHARE THAT AT ESTOCK VENTURES BROUGHT TWO OF THE LEASES OUT OF THE, SO ALMOST ALL OF 'EM CAME DIRECT THROUGH OUR MANAGEMENT PLAN.
SO, UH, BUT WE WANT TO DO BOTH 'CAUSE WE WANNA, WE WANNA LOOK AT BOTH WAYS AND VENTURE'S BEEN GREAT AT, UM, KIND OF PARTNERING WITH US AND GETTING OUTSIDE THE BOX AND HOW THEY DO OUR AGREEMENTS.
SO WE'RE STILL ABLE TO LEASE OURSELVES WITHOUT HAVING TO WORK WITH THEM.
BUT IF THEY BRING US SOMEONE WHO WORKS, REAL QUESTION, I'VE NEVER REALLY UNDERSTOOD THIS.
UM, FOR TIP FUNDING, LET'S SAY THAT THE LEASE IS TRANSFERRED OR SOLD OR IN SOME WAY HAPPENS, WHAT HAPPENS WITH CONTRACTS WITH THE DEVELOPER? GOT IT.
SO THE DEVELOPER, WE HAVE OCCUPANCY REQUIREMENTS, BUT WE DON'T GET INVOLVED IN THE TENANT SELECTION WE'RE GOT AND THE, WE LIKE, LIKE LOCAL HIRING PROVISIONS AND THE LEASES, BUT OUTSIDE OF THAT, YOU KNOW, OUR CONTRACTS WITH THE DEVELOPER AND THE OWNER AND RIGHT.
HOW THEY DO BUSINESS WITH THEIR TENANTS IS LARGELY THEIR BUSINESS.
ASIDE FROM LIKE ANY REQUIREMENTS FOR LIKE LOCAL HIRING OR THE OCCUPANTS WELL SALE, OH, IF THEY WERE TO SELL A PROJECT, WE BASICALLY WANT THEM TO COMPLETE THE PROJECT BEFORE WE WOULD LIKE ASSIGN THE AGREEMENT, YOU KNOW, UPON SALE OR ANYTHING LIKE THAT.
IN THIS CASE, THAT WOULD BE THE FIVE YEARS, BECAUSE WE HAVE FIVE YEAR OCCUPANCY PIECE ON YEAH.
OR AT LEAST UNTIL THE PROJECT'S DONE.
AND THEN, UM, THERE WOULD BE LIKE MAYBE A CONSENT TO ASSIGN OR A CONSENT TO SALE.
SOMETIMES WHAT'S HAPPENED WITH SOME PROJECTS IS THE PROJECT WILL BE COMPLETED, THE ORIGINAL DEVELOPER WILL BE FULLY PAID AND THEN THEY SELL THE PROJECT.
THEN MAYBE THERE'S SOME CONSENT PROVISIONS FOR ONGOING REQUIREMENTS LIKE, UM, OPERATIONS AND MAINTENANCE.
AND IT'S JUST KIND OF A ROUTINE ASSIGNMENT.
SO A LOT DEPENDS ON WHETHER THEY'RE FULLY PAID WHEN AN ASSIGNMENT'S REQUESTED, BUT BY AND LARGE, WE WANT THE ORIGINAL DEVELOPER TO COMPLETE THE PROJECT.
WE'RE NOT LETTING PEOPLE, UM, ESSENTIALLY SELL THE ENTITLEMENT TO A NEW OWNER.
WHAT, WHAT IS YOUR LONG TERM STRATEGY? THIS A HOLDER? YOU KNOW, WE HOLD ALMOST EVERYTHING WE DO.
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GOAL IS ALL ALMOST ALWAYS ONCE IN A BLOOM.TYPICALLY IT'S NOT
AND, AND, AND THE NAME OF THE GROUP ONE MORE TIME.
GRASS, THE PROPERTY AND, AND NOT JUST IN DALLAS.
DO YOU OPERATE ELSEWHERE? WE ALMOST ONLY OPERATED IN NORTH IN OAKLAND.
WE WORK IN, WE'VE WORKED IN WEST DALLAS.
UM, I MEAN WE FIVE FEW DEALS OVER BY THE CEDARS, BUT MOST OF OUR WORK IS IN, IN, AND, AND THE FOUNDERS LIVE IN IFF AND MOST ALL, I DUNNO IF Y'ALL COULD HAVE HEARD, DID Y'ALL HEAR THAT CONVERSATION ONLINE? OKAY.
I DID HAVE A QUICK QUESTION ABOUT THE UPGRADED HVAC AND UTILITIES.
DID Y'ALL CONSIDER PACE FINANCING FOR THAT AT ALL? UH, NO.
YOU KNOW, WE USED PACE FINANCING ON DOWN EAST STOCK, UM, WHICH HAS BEEN A GREAT LEARNING CURVE.
I WON'T SAY I WOULDN'T USE IT AGAIN, BUT I WOULDN'T USE IT AGAIN ON HISTORIC ASSET BECAUSE THERE'S, IT'S TOO CHALLENGING TO MEET THE PACE REQUIREMENTS AND THE HISTORIC REQUIREMENTS, UM, ON THE THINGS LIKE WINDOWS.
WHAT, WHAT IS YOUR TIMELINE? UH, HAVE YOU ACQUIRED THE PROPERTY ALREADY? WE OWN THE PROPERTY, YEAH.
WE OWN THE PROPERTY AND WE'RE, UH, THE HOPE IS TO BREAK GROUND IN MARCH OR APRIL.
A LOT OF IT'S GONNA BE DEPENDENT ON US GETTING TO COUNCIL IN JANUARY ON THIS, AND THEN WE HAVE TO GET THROUGH THE PROCESS.
SO, SO YOU'VE ALREADY GONE THROUGH THE PERMITTING? WAIT, NOT PERMITTING, WHERE WE HAVE A, WE'RE HAVE A WORK ON THE CD SET, BUT WE LOOKED AT THE ZONING, WE HAD A ZONING CHANGE ALSO ON IT, THE ZONING CHANGE SET BECAUSE ESSENTIALLY WE BUILD OUT ALL TIME, WHICH IS AMAZING.
LIKE WHAT IS THE PROCESS FROM MOVING BACK TO FIRE MATCH? YEAH.
PROVE MORE DIFFICULTY FEASIBILITY, LIKE AGAIN, ACTUALLY COMPLETING YEAH.
AND MEAN, I THINK THIS, THE, THIS PROJECT HAS TWO VERY CHALLENGE, BOTH THREE VERY CHALLENGING ASPECTS.
UM, FIRST OFF, WE'RE DOING IN NATIONAL AND STATE HISTORIC DESIGNATION IN ADDITION TO THE LOCAL HISTORIC DESIGNATION, WHICH REQUIRES INTERIOR PROTECTION IN ADDITION TO THE EXTERIOR PROTECTION.
SO THERE'S ASPECTS OF, UM, LIKE THE SANCTUARY ITSELF HAS TO REMAIN VERY, VERY SIMILAR IN SCALE AND DESIGN AS IT IS NOW, WHICH ALSO POTENTIALLY HAS CHALLENGES FROM A TENANTING STANDPOINT.
SO THERE'S ALL KINDS OF THINGS THAT EVOLVE, THAT REVOLVE AROUND THE HISTORIC, WHETHER IT'S HOW WE DO THE TRIM, HOW WE DID THE, THE FLOOR IS CURRENTLY SLOPED, SO WE HAVE TO THINK ABOUT HOW DO WE, UH, MAKE A SPACE THAT DOESN'T HAVE A SLOPE FLOOR, BUT STILL THIS QUALIFIES FOR THE HISTORIC.
SO THE HISTORIC AS A LAYER, THAT'S THE LAYER COMPLEXITY THAT'S, UM, WILD.
THE FIRE IS ALSO SOMETHING THAT'S VERY COMPLEX, BUT THE FIRE IS, IS NOT SO DIFFERENT THAN THE WATER DAMAGE.
IT, THE WATER DAMAGE OF THE ASSEMBLY RESULTED IN THE WOOD, BASICALLY ROT OUT AT THE HERE, THE FIRED DAMAGE, THE WOOD'S GONE.
SO YOU, BOTH OF THEM ARE MORE LIKE A BIG, IT'S LIKE AN INTERNAL REFRAME.
SO IT'S LIKE A WHOLE BUNCH OF SCAFFOLDING, PEOPLE THAT KIND OF SCAFFOLD IT FROM THE INSIDE AND THEN REBUILD IT.
UM, AND THEN THE THIRD IS, UM, WE GOTTA ADD ELEVATOR STORE BUILDING THAT HAS FIVE DIFFERENT LEVEL CHANGES ON A THREE STORY BUILDING.
SO GIVING THE THING PDA COMPLIANT IS, IS WAS A BIG DESIGN CHALLENGE, UH, THE DEVELOPER FEE, UH, IS THAT, WHO, WHO'S THAT GOING TO? IS THAT, THAT GOES TO PROXY.
SO, SO I I DON'T MEAN THIS NEGATIVELY, THAT'S A SELF-SERVING FEE, RIGHT? CORRECT.
AND OTHER THAN THE VALUE CREATED IN THE PROPERTY, CORRECT.
AND WHAT WAS THAT? IT'S AN EXACT NUMBER.
SO I ASSUME THAT'S JUST BASED ON ANY CERTAIN PERCENTAGE.
WHAT PERCENTAGE WAS THAT COSTS? SO I GUESS SIX, YEAH, PROJECT COST, BUT I THINK IT'S ACTUALLY BASED ON THE PROJECT COST LEFT, JUST ON
I WOULD, I THINK THIS IS, UM, THE ONE THING THAT I DO LIKE ABOUT THIS PROJECT IS REALLY KIND OF THE GATEWAY TO THE WHOLE ENTRANCE.
YOU KNOW, ONCE YOU COME OFF OF MARLIS, THE DECK BARK AND, AND EVERYTHING IS, WHAT YOU HAVE DESIGNED IS GONNA BE REALLY BEAUTIFUL FOR THAT SPACE.
[00:35:01]
NUMBERS CHECK OUT.RIGHT? SO, UM, ANY ANY OTHER CONCERNS OR QUESTIONS? YEAH, CHRIS, UH, LET ME ASK SUE.
UM, HAVE WE COMMITTED ANY TIFF MONEY TO, UH, THE JEFFERSON CORRIDOR PRIOR TO THIS PROJECT? THIS HAS, I BELIEVE THE FIRST PROJECT ON THE JEFFERSON CORRIDOR PROPER.
IS THIS SUBSIDY IN LINE, UH, WITH, UH, THE HISTORIC PROJECTS THAT WE'VE GIVEN? AS FAR AS A PERCENTAGE? UM, I MEAN THEY'RE ALL KIND OF UNIQUE, ESPECIALLY WHEN THEY'RE HISTORICAL.
I MEAN, THIS IS OBVIOUSLY MORE THAN ESTOCK, BUT, UM, YOU KNOW, THIS HISTORIC SANCTUARY AND HAVING THE THREE BUILDINGS IS, UM, MORE TO IT.
AND I WOULDN'T SAY IT'S MORE TO IT, BUT IT, IT IS MORE COMPLEX THAN I THINK THE ESTOCK.
I GOTTA BE HONEST, THE ONLY THING GIVING ME HEARTBURN IS SEEING THAT 51% OF THE PROJECT IS, IS TIFF.
RIGHT? IT JUST SEEMS LIKE THAT'S QUITE A BIT, ESPECIALLY LOOKING AT THE EQUITY SIDE FROM PROXY AT 12%.
UM, THAT'S THE ONLY THING THAT GIVES PAUSE TO ME.
I CAN FOLLOW THAT IF YOU WANT.
WE, WE STARTED WITH THE BUDGET THAT WAS MUCH SMALLER.
UM, AND THEN AS WE GOT MORE AND MORE FEEDBACK FROM THE CONTRACTORS, UM, WHICH I THINK SOME OF THE, THE TURNER BUDGET THEY BE IN THE APPLICATION.
UM, IT WAS JUST LIKE THE NUMBERS WERE HUGE.
I MEAN, WAY, WAY MORE THAN WE'VE SPENT PER FOOT ON PROFITS BEFORE.
AND WHICH THEN REQUIRES THE, THE NEED FOR FUNDS IS INCREASING, BUT ALSO THE, THE FUNDS COST MONEY.
SO IF YOU LOOK AT THE INTEREST CARRY ON THE PROJECT, IT'S GINORMOUS.
AND IF YOU LOOK AT THE ACTUAL, LIKE HARD COST COMPARED TO TOTAL PROJECT COSTS, BUT, BUT THE OTHER THING I'LL SAY IS LIKE THIS PROJECT THAT VACANT FOR, IT'S 24, UH, 2014, NOBODY WANTS IT.
IT'S BEEN PASSED AROUND FROM VICTOR BALLAS TO SOME OTHER GROUPS THAT ARE NOT THE, UH, GROUP THAT ARE TAKING THIS COUNTRY OWN IT FOR A WHILE.
IT'S BEEN PASSED AROUND AS A LAND DEAL.
IT WAS ON THE, UM, HIGH RISK AND IT WAS, IT WAS ACTUALLY ON TARGET FOR DATA BY NEGLECT UNDER WAS PREVIOUS OWNERSHIP.
I MEAN, THIS THING IS HANGING ON MY FINGERNAILS AND LIKE, I WISH WE DIDN'T NEED TO MILLION OWNERS TO DO IT BECAUSE I WANNA DO NEED MORE DEALS DOWN THE STREET AND I NEED THE GIFT MONEY TO BE THERE TOO.
LIKE, THIS IS WHAT IT'S GONNA TAKE TO MAKE THE PROJECT DONE.
AND IT REALLY IS AND IS REALLY IMPORTANT PROJECT.
THIS IS LIKE THE CORNER IN OAK OAKLAND THAT, THAT REALLY MATTERED.
THE ORIGINAL POSTOP HEY IS IN THE BUILDING NEXT DOOR TO THIS ONE, WHICH WAS THE FIRST POST OFFICE PRIOR TO OAKLAND BEING ANNEX.
IT IT DID, IT WASN'T REALLY A BROKEN CORNER FOR YEARS.
THE CARTIER LIBRARY, WHICH UNFORTUNATELY GOT TORN DOWN ACROSS THE STREET FROM IT, IT WASN'T REALLY AT ONE POINT.
AND IT CAN BE THEN IT STILL IS THAT, BUT IT CAN BE SOMETHING REALLY COOL AGAIN.
BUT THIS BUILDING IS STANDING IN BETWEEN THAT CORNER, LIKE BEING SUCCESSFUL AND IF WE CAN'T DO IT, LIKE IT'S JUST GONNA SIT FOR ANOTHER DECADE, YOU KNOW, COLLECTING WATER.
IS IT, YOU SAID IT WAS LANDMARKED.
UH, SO THAT MEANS THE ONLY WAY
I, I I CAN SEE THE REACTION IN YOUR EYES ON, YEAH.
SO DEFINITELY SEE SAYING FOR YOU GUYS
YOU GUYS HAVE, THIS IS HOW WE GO.
SO WE'LL STAFF IT WITH OUR, OUR, OUR MANAGEMENT TEAM.
WE WILL STAFF IT WITH MAINTENANCE AND MANAGEMENT.
YOU KNOW, WE HAVE, UM, THREE FULL-TIME MAINTENANCE PEOPLE RIGHT NOW AND WE'LL PROBABLY HAVE TWO MORE BY THE TIME THIS PROJECT'S COMPLETE.
THERE'S ONLY EVERYONE FOR TALK AND THEN ONE FOR KEEP.
ANY OTHER S VOTE? YEAH, CHRIS, I'LL MOVE APPROVAL.
THANK YOU TO ALL RIGHT, SO WE GOT A SECOND.
ANY OPPOSED? PASSES RELATIONS.
[00:40:01]
ME OTHERWISE I PUSH BACK REALLY HARD ON NOT, I THINK UNDERSTANDING THE HISTORICAL NATURE OF IT KIND OF PUTS IT INTO DIFFERENT CATEGORY THAN NORMAL.SO THE NEXT TIME, AGAIN, EXPECT A LITTLE
ALL RIGHT, THIS IS IT, RIGHT? ALRIGHT.
THANK YOU ALL EVERYONE HAPPY HOLIDAYS.