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[Dallas Housing Finance Corporation on March 10, 2025.]
ON MARCH 10TH, 2026.WE'RE GONNA CALL TO ORDER THE, UH, REGULAR SESSION OF THE DALLAS CITY OF DALLAS HOUSING FINANCE CORPORATION.
UM, LET US GET STARTED ON AGENDA ITEM TWO, THE ROLL CALL.
SO JACKIE, CAN YOU LIST OUT THE YES.
SEAN ALLEN, PRESENT, DIRECTOR DEWAN RUDOLPH.
PRESENT DIRECTOR SHALANDA OLA.
PRESENT, UH, DIRECTOR PATTY COLLINS.
PRESENT AND DIRECTOR? SEAN SADIE.
SO LET'S DO, UH, PUBLIC COMMENTS.
UH, AGENDA ITEM FOR OUR PUBLIC COMMENTS FOR ITEMS FOUR THROUGH 11.
WE HAVE A PUBLIC COMMENTS, ANYONE THAT HAS SIGNED UP TO SPEAK.
WE ARE GOING TO REARRANGE THE AGENDA JUST A LITTLE BIT.
I THINK WE GOT SOME, UH, PLANES THAT, UH, PEOPLE NEED TO CATCH.
DAVID, I YOU GOT, UH, ITEM FOUR THOUGH FIRST, RIGHT? APPROVAL OF MINUTES.
APPROVAL OF THE MINUTES FOR THE FEBRUARY 10TH, 2026.
CITY OF HOUSING, CITY OF DALLAS HOUSING FINANCE CORPORATION MEETING.
EVERYONE HAVE BEEN ABLE TO REVIEW THE MINUTES.
DOES ANYONE HAVE ANY COMMENTS? EDITS? YES.
IT SAYS THAT I WAS ON LINE, BUT I WAS FIRST.
UH, YOU SHOULD, SORRY, I THAT I WAS ON LINE.
UH, WE HAVE A MOVE TO APPROVE DIRECTOR MOORE.
NOW LET'S GET TO, LET'S REARRANGE AGENDA THIS.
UM, WE'RE GONNA GO TO DIRECTLY TO ITEM SIX, WHICH IS THE RESOLUTION REGARDING THE PROJECT ADMINISTRATOR FOR BRISCOE MULTIFAMILY RESIDENTIAL DEVELOPMENT, LOCATED AT 12 6 3 9 COTE ROAD, DALLAS, TEXAS.
UH, CONSIDER TO ADOPT A RESOLUTION TO AUTHORIZING THE TERMINATION OF THE PROJECT ADMINISTRATOR AGREEMENT.
OHD, BRISCOE ADMINISTRATOR, LLP, CURRENT PROJECT ADMINISTRATOR AND IMPROVING A PROJECT ADMINISTRATIVE AGREEMENT, WATERPROOF LLC AS A PLACEMENT PROJECT ADMINISTRATOR AND AUTHORIZING RATIFYING ACTIONS AND EXECUTION OF DOCUMENTS BY THE CORPORATIONS PRESENT.
OTHER OFFICERS, GENERAL MANAGER AND ASSISTANT GENERAL MANAGER IN CONNECTION WITH THE ABOVE REFERENCE.
UM, WE MAY HAVE TO EXPLAIN THIS A LITTLE BIT.
UM, WHAT'S JUST HAPPENED AND WHAT WE'RE IS BEING PROPOSED.
SO I'M GONNA TRY TO DO IT IN THE MOST UN TORTURED AND SIMPLE WAY AS POSSIBLE.
UM, SO THE BRISCOE, WE PURCHASED THIS DEAL WITH A UNIQUE FINANCING YESTERDAY CALLED ESSENTIAL FUNCTION LOSS.
WE OWN THIS DEAL OUTRIGHT FEE SIMPLE.
A LOT OF THESE OTHER PROJECTS THAT WE OWN, IT'S LIKE A PARTNERSHIP OVER THE GP, THE GROUND DONOR.
BUT THEY'RE REALLY, YOU KNOW, PRIVATELY CAPITALIZED WITH TRADITIONAL DEBT NET.
WITH THESE ESSENTIAL FUNCTION BONDS.
UH, THIS CONCEPT GOT PRESENTED TO US, GOD, IT WAS LIKE 2022.
UH, IT GOT PIONEERED OUT IN CALIFORNIA AND THE ATTORNEY JOURNAL HAD JUST APPROVED, UH, AN HSC CIVILITY ALONG WITH HOUSING ISSUED THESE BONDS.
UH, THE BOARD AT THE TIME AND ME DIRECTOR PAIGE, AND THINK MARCY WAS THERE IN A MEETING.
WE KIND OF GOT, WE GOT EXCITED ABOUT THE ABILITY TO, YOU KNOW, PURCHASE ASSETS AND PROVIDE WORKFORCE FOR MIDDLE INCOME AFFORDABILITY AND REALLY HIGH OPPORTUNITY AREAS LIKE, YOU KNOW, UNAFFORDABLE AREAS, YOU KNOW, CENTRAL TO CORRIDOR.
WHEREAS LITECH HAS A HARD TIME REALLY, YOU KNOW, PENETRATING THE MARKET.
EVEN THE PFC HAS HAD A HARD TIME WITH JUST GROUND DEVELOPMENT.
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TO PURCHASE THIS ASSET, A HUNDRED PERCENT BOND FINANCING.SO IT'S A HUNDRED PERCENT LEVERAGE AND IT'S SOLD ON THE MARKET TO, UH, YOU KNOW, ON BUYERS AS WELL.
UH, THE FIRST ONE WE DID WAS THE BRISCOE.
UM, IT WAS THE PROJECT ADMINISTRATOR THAT BROUGHT THAT TO US.
UH, AND THE PROPOSAL WAS IS OHG AND THEY'RE OUR CURRENT PROJECT ADMINISTRATOR.
UH, WE DID ONE AFTER THAT CALLED
NOW
NOW, DYLAN SEEMS TO BE DOING WELL NOW IN THIS CAPITAL STACK.
IT'S VERY COMPLICATED, BUT THERE'S TWO BONDS THAT HAVE BEEN A LITTLE BIT OF AN ISSUE, UH, WITH THIS PROJECT.
ONE, THE WAY THE PROJECT ADMINISTRATOR GETS INCENTIVIZED, THEY GET AN UPFRONT FEE.
AND OHG INCURRED A LOT OF THAT RISK AND ACTUALLY PUT TWO OTHER DEALS UNDER CONTRACT THAT DIDN'T WORK AND DEFINITELY LOST MONEY ON THAT.
BUT THEY DID GET A, A FRONT FEE FOR THE BRISCOE AS PART OF THE AGREEMENT, WHICH IS INTENDED TO INCENTIVIZE THE PROJECT ADMINISTRATOR.
THEY DON'T BUY THE BOND, BUT THEY GIFTED THE BOND AND THAT BOND TOTALED ABOUT $5 MILLION AS WELL.
THEY ALSO GET AN ASSET MANAGER AS WELL.
NOW THE INTENTION IS IN NORMAL CASES, UH, THAT C BOND IS THE INCENTIVE FOR THE PROJECT ADMINISTRATOR TO RUN IT, THE UH, RIGHT WAY TO, YOU KNOW, MAKE SURE IT'S CASH FLOWING BECAUSE THEY GET RETURNED, THEY GET, UH, A YIELD OFF THAT BOND AS WELL.
I THINK IN NORMAL SITUATIONS, I THINK THAT'S A GOOD WAY TO INCENTIVIZE, BUT IT HAS TO BE IN THE FORM OF A BOND BECAUSE THEY CANNOT HAVE EQUITY IN IT.
THIS HAS TO BE GOVERNMENT OWNED.
ONLY A GOVERNMENT ENTITY CAN HAVE TITLE TO IT, RIGHT? WELL, YOU BOUGHT IT A BIG PRICE.
AND OH, BEHIND THAT BOND IS ALSO WHAT ARE CALLED CAPITAL APPRECIATION BONDS AS WELL.
THAT'S BEEN THE BIG PROBLEM AS WELL.
THEY'RE CALLED, UH, THEY'RE CALLED CALS FOR SHORTER NAME.
IT'S BASICALLY LIKE CREDIT CARD.
YOU DON'T PAY THOSE CAP BONDS.
IT INCREASES AND INCREASES INCREASES.
SO THE CURRENT SITUATION WITH THE BRISCOE IS WE'RE ABOUT $103 MILLION IN DEBT.
AND MY BACK OF THE NAPKIN VALUATION OF THE PRODUCT, UH, DEAL, IT'S WORTH $65 MILLION.
UM, BUT THAT BEING SAID, LOOK, THESE ARE 40 YEAR BONDS AND WE BOUGHT AT THE WRONG TIME OF MARKET.
THESE BOND HOLDERS, I MEAN THEY'RE, YOU KNOW, THEY DON'T WANT TO TAKE BACK THIS ASSET.
THEY JUST WANT TO KIND OF BE ABLE TO WORK OUT THE SITUATION WHERE THEY ARE PAYING OFF THESE BONDS AS WELL.
OKAY? BUT WHAT THEY'RE MOST HONED IN ON IT ARE THESE CAP BONDS, WHICH THEY SHOULD, YOU KNOW, THEY WANT TO BE ABLE TO PROJECT, YOU KNOW, IN THE NEXT FEW YEARS, THESE CAP BONDS STARTING TO PAY DOWN AS WELL.
AND THAT'S REALLY IMPORTANT TO THEM.
THE WAY THIS WATERFALL WORKS A'S AND BS, YOU KNOW, THIS AMOUNT OF CASH FLOW GOES TO THE A'S 'CAUSE THEY'RE AND LINE AND IT GOES TO THE BS, THEY'RE IN LINE.
WELL THEN THERE'S A CERTAIN SET OF CASH FLOW THAT IS, UH, GOES TO THE, YOU KNOW, PAYMENT OF THESE CAPS TO KEEP 'EM FROM GETTING TOO HIGH.
THE GIFTED C BOND, I THINK WAS AHEAD IN SOME WAY OF IT'S CAUSING PROBLEMS WHERE IT'S, YOU KNOW, IT'S IN THIS WATERFALL.
WELL, OKAY, THE BOND HOLDERS WHO ARE THE BOND HOLDERS WHO ACTUALLY PUT UP THE MONEY, UH, MAY PUT UP ALL THE MONEY FOR THIS.
IT'S FRANKLIN TEMPLETON AND ALLIANCE BERNSTEIN.
SO THEY'VE BEEN ASKING OUR PROJECT ADMINISTRATOR, OUR CURRENT PROJECT ADMINISTRATOR TO DO THE FIRM, UH, SOME OF THEIR RETURNS OVER LIKE A FOUR OR FIVE YEAR PERIOD IN ORDER TO, YOU KNOW, ALLOW, YOU KNOW, CABS TO BE PAID, PAID DOWN.
WELL, UM, THEY WERE NOT ABLE TO COME TO ANY KIND OF AGREEMENT, UM, ON THE KIND OF DEFERMENT AS WELL.
AND THIS HAS BEEN GOING ON, I THINK FOR ABOUT SIX, SEVEN MONTHS.
THESE TALKS ABOUT DEFERRING THESE, UH, PAYMENTS TO THE C BOND.
SO, UM, WITH THAT, UH, GEORGE, YOU KNOW, HE KIND OF GOT THE BALL ROLLING IN MY LITTLE HEAD.
HE SAID, DAVID, BOY, IT WOULD BE REALLY NICE IF THAT CBO COULD JUST GO AWAY
SO I WAS LIKE, OH, YEAH, THAT MAKES SENSE.
UM, THE C THE C BOND IS, YOU KNOW, IT'S ON TOP OF THIS 103 MILLION AS WELL.
SO IN OUR VIEW, THE VALUE OF THAT C BOND IS NOT 5 MILLION RIGHT NOW.
I MEAN, IT IS MUCH, MUCH LESS.
SO WE MADE AN OFFER AND WE'VE TALKED TO FRANKLIN 10TH ALLIANCE, HEY, MAKE AN OFFER TO PURCHASE THIS BOND AT A VERY DISCOUNTED PRICE AND IT'S LIKE UNDER 500,000.
UH, THE BOND HOLDER SAID, WE'LL FREE UP SOME CASH FLOW THAT COULD COME TO THE HFC AS WELL BECAUSE WE DON'T GET ANY MONEY IN FROM THE SECOND WE OWN IT AND WE GET THE UPSIDE IF WE SELL 15 YEARS FROM NOW.
UM, BUT WE DON'T GET CASH FLOW.
WE MADE THE OFFER TO OUR PROJECT ADMINISTRATOR AND THEY SAID NO.
UM, US AND THE BONDHOLDERS GOT TOGETHER, OR THEY SAID THEY WOULD RELEASE SOME OF THESE RESERVES AS WELL TO INCREASE THE PRICE.
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WE WOULD SHIP IN AS WELL, STILL GET THE EXCESS CASHFLOW.THEY VALUED IT VERY DIFFERENTLY, UH, THAN WE DID, AND THEY VALUED IT VERY DIFFERENTLY THAN THE BONDERS DID.
SO WE BASICALLY HIT AN IMPASSE.
UM, SO I WAS, YOU KNOW, AARON AND I WERE KIND OF VERY MUCH INVOLVED IN TALKING TO OHG AND TALKING TO, UH, THE BONDHOLDERS.
AND WE REALIZED, I TOLD OHG, I SAID, LOOK, IF WE ARE ABLE TO CASH YOU OUT, WE'RE PROBABLY GONNA HAVE TO ASK YOU TO STEP AWAY THE DEAL.
IF WE LIQUIDATE THE BOND AND THEY'RE COMPLETELY CASHED OUT, THEY WILL ONLY HAVE REALLY ONE DEAL, UH, IN THE STATE OF TEXAS AS WELL.
AND I JUST DIDN'T SEE THE FINANCIAL INCENTIVE AND I JUST DIDN'T THINK FOR A LOT OF REASONS, IT'S GOOD FOR US TO COMPLETE A CASH OUT THE SPONSOR AND THEY'RE STILL JUST RUNNING IT AND THEY'VE GOT ONE DEAL IN THE CITY.
I SAID, I DIDN'T TELL THEM THAT I KNEW MY REASONS.
WELL, NOW WE'RE ACTUALLY AT AN IMPASSE WITH, UH, YOU KNOW, TRYING TO LIQUIDATE THIS BOND.
AND THAT WAS AN UNCOMFORTABLE SITUATION AS WELL.
AND SO WITH THAT, WE HAD A LOT OF DISCUSSION WITH THE BOND OWNERS, AND I WILL SAY THEY NEVER OUTRIGHT SAID, MADE ANY EXPLICIT, BUT THERE WAS I THINK, SOME CONCERN ABOUT HOW THE PROJECT WAS BEING RUN IN TWO PHASES.
ONE, YOU KNOW, THE ACTUAL OPERATIONS OF THE PROJECT, BUT ALSO THEIR STRATEGY FOR ACTUALLY RETIRING THESE BONDS.
YOU KNOW, I THINK THERE WAS SOME LEVEL OF CONCERN ABOUT THEM AS A PROJECT ADMINISTRATOR.
AGAIN, THEY NEVER SAID, AND I THINK THEY WERE VERY CAREFUL 'CAUSE THEY WORKED FOR US, THE PROJECT ADMINISTRATOR.
UH, AND YOU KNOW WHAT, ALSO THE DISCUSSION ALSO KIND OF WENT INTO WHAT OTHER PROJECT ADMINISTRATORS WERE OUT THERE.
WELL, THERE WAS SOME, HEY, YOU KNOW, FINE, FINE, FINE.
BUT ONE GROUP WAS, OH, WE LIKE THEM.
THAT WAS A WATERFORD PROPERTY COMPANY.
SO IT'S VERY CLEAR THAT THEY WERE VERY HIGHLY REGARDED AMONG THESE BONDHOLDERS AS WELL.
I'VE KIND OF HEARD THE SAME, YOU KNOW, THROUGHOUT THE INDUSTRY.
SO WITH THAT, UM, WE'RE KIND OF IN THE CONUNDRUM BECAUSE, UH, WE NEED THESE BONDHOLDERS TO PUT UP THE, THIS MONEY TO BE HAPPY WITH US.
UH, I DO BELIEVE IN THIS PROGRAM.
CAN SOMEONE GO ON ME? THANK YOU.
UM, SO WE WERE IN AN UNCOMFORTABLE IMPASSE.
UM, I BELIEVE IN THE ESSENTIAL BONDS.
I KNOW SOME PEOPLE DO NOT AS WELL.
UM, I THINK IT'S SOMETHING THAT THE STATE OF DALLAS IS GONNA WANT TO USE.
IN FACT, WE'RE WORKING ON A VERY MASSIVE PROJECT IN D 10, UH, THAT WE HAVE A LITTLE BIT OF A HOUSING CRISIS WHERE THAT MAY BE A POSSIBLE EXECUTION.
THIS IS A VERY FINITE UNIVERSE, UH, OF BOND BUYERS THAT REALLY BUY THIS STUFF.
AND I REALLY THINK IT'S IMPORTANT THAT THE CITY OF DALLAS IS SEEN AS A VERY GOOD PARTNER, UM, FOR THESE BONDHOLDERS FOR THEM TO PUT UP ALL THE MONEY TO, YOU KNOW, BUY THESE ASSETS IF THE SITUATION, YOU KNOW, UM, YOU KNOW, MERITS.
SO I DO KNOW, AND LOOK, SWITCHING THE PROJECT ADMINISTRATOR IS A BIG DEAL JUST BECAUSE THE BONDHOLDERS, YOU KNOW, MAYBE LIKED SOMEONE VERSUS THE OTHER.
THAT WAS NOT GONNA BE A REASON WHY WE DID IT.
SO IN THE WHOLE SCENARIO, UH, DURING THIS WHOLE AFFAIR, I WAS KIND OF REALIZING WE HAVE NOT BEEN GETTING ANY ANALYSIS ON THIS PROJECT.
I'M NOT SEEING ANY PROJECTIONS.
I'VE GOT THE OPERATING STATEMENTS, BUT WE DON'T HAVE, HEY, WHAT ARE WE PROJECTED TO MAKE ON THIS PROJECT FOR 40 YEARS? WHAT IS THE PLAN, YOU KNOW, FOR PAYING DOWN THESE BONDS NOW, THE, YOU KNOW, WE ASKED BONDHOLDERS, HEY, CAN YOU PROVIDE YOUR ANALYSIS? THEY SAID, UH, LOOK, THESE ARE SECURITIES.
THERE'S ISSUES WITH BOND HOLDERS SUBMITTING TO THE, YOU KNOW, THE LENDER TERM, WHETHER IT'S RIGHT OR WRONG.
THEY WERE NOT OBLIGATED TO DO IT.
SO WE ASKED OUR PROJECT ADMINISTRATOR TO DO IT.
I SAID, HEY, YOU KNOW, WE NEED YOUR ANALYSIS ON, UH, YOU KNOW, WHAT IT, WHAT IS THE PLAN? WHAT ARE WE PROJECTED? HOW ARE WE GOING TO RESOLVE THE CAPS? UM, THEY SAID THAT WASN'T REALLY THEIR JOB.
UH, AND YOU KNOW, THEY ADVISED THAT MAYBE HILLTOP SECURITY IS NOT ALWAYS GONNA, FOR WHICH I THINK THAT'S CLEARLY NOT THEIR JOB, UH, TO DO THAT AS WELL.
AND SO THAT WAS KIND OF THE FIRST MOMENT WHERE WE THOUGHT, YOU KNOW, POTENTIALLY WE MAY HAVE TO REMOVE HIM.
HE WENT THROUGH THE PROJECT ADMINISTRATOR AGREEMENT.
HE SAID, NO, THAT'S CLEARLY THE JOB.
I NEED TO PROVIDE THE ANALYSIS TO ADVISE YOU, THE OWNER, YOU KNOW, ABOUT WHERE WE'RE HEADING WITH THIS ASSET.
WHERE ARE THE PROJECTIONS? SO I MADE THAT COMP, I CONVEYED THAT TO OHG, AND THEY FURTHER DECLINED TO GIVE US A ANALYSIS ON PROJECT, UH, OR, AND SO I THINK IT WAS THAT MOMENT WHERE, LOOK, THEY PROBABLY TRULY BELIEVED.
AND LOOK, I'VE KNOWN, I KNOW OHG VERY WELL, I KNOW BRIAN LAUREN VERY WELL.
AND THEY BROUGHT ONE OF THE FIRST WORKFORCE DEALS TO DALLAS.
I HAVE A HIGH REGARD AND HIGH AMOUNT OF RESPECT FOR IT.
WE WERE JUST HAVING AN IMPASSE ON WHAT THE ROLE WAS OF THE PROJECT ADMINISTRATOR.
AND I JUST, WE WEREN'T GETTING PAST THIS AS WELL.
AND SO I THINK, YOU KNOW, EVEN THOUGH WE SAID, OUR COUNCIL SAID THAT IS
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WITHIN YOUR SCOPE, THEY DECLINED AS WELL.I THINK WE FELT AT THAT MOMENT, OR I CERTAINLY FELT THAT THERE NOW APPEARS TO BE A CONFLICT, WHEREAS THE C BOND IS INTENDED TO GET US IN ALIGNMENT, GIVEN HOW UPSIDE DOWN WE ARE WITH THE DEAL, THE CBO BOND IS NOW CONFLICTING WITH THEIR, UH, ROLE AS A PROJECT ADMINISTRATOR.
BECAUSE I THINK IT'S AS IMPORTANT, I UNDERSTAND, TO PRESERVE THE VALUE OF THE C BOND.
I DON'T, I'M NOT MAKING ANY ASPERSIONS TO WHAT THE MOTIVATIONS ARE, BUT I THINK PRESERVING THE C BOND AND SERVICING US AND HANDLING THE BOND HOLDERS IS JUST NOT WORKING.
UH, ONE OF THE THING THEY DID ENCOURAGE US TO COME UP WITH OUR OWN ANALYSIS AND SEND IT TO THE BOND HOLDERS, AND IT WAS INDICATED THAT MAY HELP IN THE NEGOTIATION OF, UH, YOU KNOW, THE LIQUIDATED SEED BOND, WHICH WOULD EXPOSE US TO LIABILITY BONDHOLDERS.
I THINK IT WAS THAT MOMENT WHERE ME, RYAN, AARON, FEW OTHER BOARD MEMBERS SAID, LOOK, OUR ORGANIZATION NEEDS TO BE SEPARATED FROM THESE CONVERSATIONS WITH THE BONDHOLDERS, WHICH NOW WE GOT THREE FRANKLIN TEMPLETON, OHG, AND ALLIANCE STEIN.
WE DO NOT NEED TO BE INVOLVED IN ANY MORE NEGOTIATIONS.
WE DO NOT NEED TO BE INVOLVED IN ANY OF THIS AFFAIR ANYMORE.
THAT IS THE ROLE OF THE PROJECT ADMINISTRATOR TO SEPARATE US FROM THAT.
SO WE DID SEND A TERMINATION, UH, NOTICE TO OHG.
IT IS CONTINGENT UPON A BOARD OF APPROVAL AS WELL.
SO THAT IS KIND OF WHY WE'RE HERE.
UM, ANYWAYS, WHAT I, WE, WE HAVE BROUGHT IN WATERFORD.
WE HAVE CLOSED TWO PROJECTS WITH, UH, THE DOMAIN IN ACCESS SER PARK.
THEY WERE INTENDED TO BE BOND DEALS THEMSELVES.
THEY VERY ELEGANTLY WHEN THINGS KIND OF WENT A LITTLE SCREWY FOR US IN 2023.
UH, WHEN THE BOND MARKET KIND OF WENT OUT AT THAT TIME, THEY VERY ELEGANTLY SWITCHED TO A TRADITIONAL PART PARTNERSHIP, WHICH IS VERY MUCH APPRECIATED.
WE HAVE APPROVED ONE MORE DEAL, UH, OAK ELLUM, WHICH THAT HAS BEEN KIND OF HUNG UP AFTER THE PASSAGE OF HB 21.
AND WE'RE HOPEFULLY GONNA GET THE FINANCING PROSPECTS FROM FANNIE MAE, UM, YOU KNOW, WHAT THEIR STANCE IS SOON.
AND WE CAN HOPEFULLY CLOSE THAT.
SO THAT WILL BE, YOU KNOW, FOUR DIFFERENT PROJECTS THAT, YOU KNOW, THEY WILL HAVE WITH US.
UM, SO I THINK WITH THAT, WHAT I'M GONNA ASK, I'M GONNA ASK SEAN AND JOHN AND THEIR TEAM TO MAYBE GET UP, UH, WELL COME UP PRESENT THEIR BACKGROUND.
THEY PRESENT THEIR BACKGROUND WITH THE, THE BONDS.
UH, MAYBE TALKING NOW, I THINK THIS IS THE BRISCO OR AT LEAST SEE DRIVEN JUST THOUGHTS ON THE PROPERTY, BUT ALSO MAYBE EDUCATE US ON YOUR THOUGHTS ON WHAT THE PROJECT ADMINISTRATOR ROLE IS SPECIFICALLY RELATED TO HANDLING THE BONDHOLDERS.
AND DOES ANYONE, BEFORE WE GET IN AARON, BUT ANYONE ELSE HAVE ANY QUESTIONS? 'CAUSE THIS WAS, I WAS FEARING MY EXPLANATION LAST NIGHT.
HOW DO I EXPLAIN ALL THIS AND, UH, YOU KNOW, WHAT, HOW CONFUSING THIS IS GONNA BE.
SO GO AHEAD AND, YOU KNOW, PEPPER ME WITH WHATEVER.
I JUST, I JUST WANNA CLARIFY FOR ALL YOU HERE, FOR THOSE ONLINE AND IN THE AUDIENCE, THIS, THIS ISSUE IS NOT ABOUT THE HEALTH OF THE ASSET OR ABOUT THE OPERATIONS ON SITE.
WE'RE PROVIDING AFFORDABILITY TO THE RESIDENTS.
IT'S REALLY JUST ABOUT THE FINANCING.
YOU KNOW, AT THE CURRENT PROFORMA, WE'RE MISSING PROFORMA BECAUSE THE MARKET HASN'T INCREASED LIKE IT WAS UNDERWRITTEN.
IT'S, IT'S JUST AN ISSUE OF THE FINANCING.
HOW, HOW DO WE MANAGE THAT? AND, UH, IT WAS AGGRESSIVELY UNDERWRITTEN.
I MEAN, WE ENTERED UP 5% VACANCY THROUGHOUT THE ENTIRE LIFE OF THE, UH, YEAH.
WHAT HAPPENED OVER THE ENTIRE LIFE OF THE PROJECT? WELL, RIGHT NOW WE'RE AT, UH, 10% AGENCY.
THE RENTS, WE'RE IN A SOFT TIME IN THE MARKET.
SO RENTS ARE UNDER BY A FEW HUNDRED BUCKS FOR MONTH, YOU KNOW, UH, FOR EACH UNIT.
SO, I MEAN, WE JUST, AGAIN, WE BOUGHT THIS AT THE HIGH MARKET CLIFF.
SO I DO WANNA TALK ABOUT THE HEALTH OF THE ASSET FOR, GO AHEAD.
UM, IS IT CASHFLOW OR, OR IS IT PAYING THE BONDS? IT'S IT'S PAYING THE CURRENT PAY FOR THE BONDS.
MY UNDERSTANDING IS PAYING THE CURRENT PAY FOR THE BONDS A BONDS, THE B BONDS, THE ACTUAL INTEREST THAT THEY REQUIRE, THEY ARE PAYING THEM.
IT'S THESE CABS THAT REQUIRE SOME LEVEL OF PAYMENT FOR THE FUTURE.
THE WAY THEY'RE PROJECTING OUT, THEY'RE NOT PAYING DOWN THE CALS IN A SUFFICIENT AMOUNT OF TIME THAT THE PRINCIPAL'S NOT GOING DOWN.
THE PRINCIPAL'S NOT GOING DOWN.
AND WHAT IS THE CORPORATION'S EXPOSURE? IT'S LIMITED.
AND THAT'S WHY WE AGREED TO DO THIS.
UH, AND WHO'S PAYING? IF, IF YOU'RE ABLE TO REACH A DEAL WITH THIS C BOND, THE GIFTED BOND, WE WILL FINE.
UM, WHO PAYS IT? WELL, WHEN IT WAS 300, WHEN WE WERE OFFERING $300,000, WE WERE OKAY WITH US PAYING, UH, WHEN WE WERE GONNA OFFER $600,000.
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THE BOND HOLDERS RELEASING RESERVES THAT THEY FUNDED.AND THEY WERE SAYING, WELL, WE'RE REALLY, THERE'S A LOT OF RESERVES ON THIS PROPERTY.
A LOT OF OP RESERVES, INTEREST RESERVES, TONS OF RESERVES THAT THEY FUNDED.
SO UP FRONT, YEAH, THEY FUNDED UP FRONT.
UM, THEY WERE GONNA RELEASE HALF AND HALF, AND WE WOULD STILL GET THE CASH FLOW.
WHEN THEY SAID, HEY, WHAT DO YOU THINK ABOUT A MILLION BUCKS? I SAID, WE'RE TAPPING OUT OF THIS AND YOU ALL DO IT.
YOU CAN FORGET ABOUT THE CASH FLOW.
UM, THEY HAVE STILL NOT, THEY'RE STILL VERY FAR APART BETWEEN OHG ON THE VALUE OF THE BOND.
SO ARE THE, ARE THE CAP BONDS IN DEFAULT? DEFAULT? NO, THEY'RE JUST GROWING IN BASIS.
IT'S REALLY ABOUT STRATEGIC FUTURE PLANS.
LIKE, YOU KNOW WHAT, THE CAB BONDS ARE LIKE A MECHANISM TO PREVENT THE ALL RIGHT.
BECAUSE THEY DECIDE IF MORE HALF MONEY IS NEEDED OR THEY GET FUNDED ON THESE CAB BONDS.
BUT IT'S LIKE A CREDIT CARD, RIGHT? YOU DON'T ACTUALLY HAVE TO PAY, IT'S LIKE AN UNLIMITED CREDIT CARD.
YOU DON'T HAVE TO PAY THE PRINCIPAL.
NOW, YOU DON'T HAVE TO PAY THE CAB BONDS.
I MEAN, EVENTUALLY YOU HAVE TO GET A CAP BOX.
ARE FUTURE ADVANCES FOR CAPEX OR IS IT, IS IT A FIXED DEAL? LIKE THERE'S NOT A, WHAT I'M, WHAT I'M PROBABLY GONNA ASK IS I THINK THE, THE REAL EXPERTS, UH, ARE KIND OF SITTING OVER THERE.
THEY COULD PROBABLY ANSWER THIS QUESTION.
UM, I MAY, THAT MAY BE A SEAN OR JOHN QUESTION, BUT ARE YOU OKAY, CLIFF, BECAUSE LOOK, I HAVE EXPLAINED THIS TO THE EXTENT OF THE CAPACITY.
I CAN, YOU KNOW, I GUESS MY BIG ISSUE WOULD JUST BE WHAT FINANCIAL POTENTIAL FINANCIAL OBLIGATION THE CORPORATION HAS WITH ITS OWN MONEY IN A, IN A, IN A, AND IT LOOKS LIKE A HOPELESSLY UNDERWATER.
HAS IT? NO, I WOULD SAY IT'S NOT HOPELESSLY, IT'S NOT HOPELESSLY UNDERWATER.
AND LOOK, I'VE SEEN ON THAT STRIP AT KU, I MEAN, I HAVE SEEN VALUES LIKE, YOU KNOW, IT'S ONE DEAL SOLD FOR 60,000,002 YEARS LATER IT'S SOLD IT FOR 90, YOU KNOW, BUT LIKE THESE VALUES DO FLUCTUATE.
UH, AND WELL, IT'S A 40 YEAR TIMELINE AND IT'S 40 YEAR TIMELINE.
SO YEAH, I MEAN, IT'S NOT LIKE WE'RE DRIVING TOWARDS AN IRR.
LIKE WE DON'T HAVE NO, WE'RE NOT.
AND WE'RE IN IT FOR THE LONG HAUL, MEAN WE'RE HERE TO OWN THIS FIELD FOREVER.
WHAT'S THE OCCUPANCY OF THE PROPERTY, RIGHT? I THINK SO WHAT'S THE DSCR? WELL, WHEN YOU TAKE INTO ACCOUNT THE, THESE ARE, THESE ARE TURBO BONDS.
SO IT, IT IS NOT LIKE A FANNIE MAE FAN MAC FIXED, UH, FIXED, YOU KNOW, PAYMENT.
AND SO I, SEAN YEAH,
THEY, THEY KNOW THE ASSET, BUT, UH, CAN I JUST GO THE QUESTION HERE, BECAUSE I THINK WE WERE ON THE SAME PAGE.
LET'S JUST SAY THE WHOLE THING GOES UPSIDE DOWN.
THE BOND HOLDERS ONLY AGREE COURSES TO GO AFTER THE PROPERTY, RIGHT? SO WE HAVE NO OTHER EXPOSURE OUTSIDE OF THE YEAH, NO FINANCIAL.
WE HAVE NO FINANCIAL EXPOSURE.
THAT WAS THE ONLY REASON WE AGREED TO A HUNDRED PERCENT FINANCE.
SO I THINK THAT ANSWERS CLOSE FIRST QUESTION.
BUT THE SECOND QUESTION, WHICH I ALSO HAD, SO I JUST WANNA DRILL IN SPECIFICALLY, IS ON THIS, UH, PAYMENT OF THE GIFT, LIKE WE'RE TERMINATING POTENTIALLY THIS, UH, ADMINISTRATOR.
AND IT SOUNDS LIKE AS PART OF THAT, WE WANT TO, UH, RETIRE THE BOND THAT WAS GIFTED TO THIS.
IS THERE ANY MONEY THAT WOULD BE COMING FROM US? OR IS THAT AN UNKNOWN? NO, NO, THAT'S THE POINT.
NO, WE'RE DONE, WE'RE DONE WITH THAT CONVERSATION.
UH, AND WE'RE JUST, WE'RE DONE WITH THAT CONVERSATION.
GIVEN WITH, GIVEN WITH THE POSTURE OF OUR CURRENT PROJECT ADMINISTRATORS POSITION IS ON THE VALUE OF THE BOND, IN NO WAY IS IT ACCEPTABLE FOR OUR ORGANIZATION TO FUND THAT LEVEL OF LIQUIDATION THAT HAS CLEARLY A CONVERSATION BETWEEN THE A AND B BOND MOWERS AND GAB BOND MOWERS THEN AND THEIR RESERVES THAT THEY'RE WILLING TO RELEASE TO LIQUIDATE THAT.
AND LOOK, I'M OKAY WITH THAT, JUST 'CAUSE THAT IS THEIR MONEY AND YOU KNOW, THAT'S, I THINK THAT'S IN THEIR PURVIEW.
BUT THERE IS NO RECOURSE TO US.
BUT THE REASON I THINK WE NEED A NEW PROJECT ADMINISTRATOR IS BECAUSE OF THIS SITUATION.
LIKE WE HAVE TO SEPARATE OURSELVES FROM ALL THAT.
AND THAT HAS TO BE SOMEONE ELSE'S PROBLEM.
GEORGE SAYS, I'M GONNA TAKE YEAH, YEAH, PLEASE, GEORGE.
SO WE GET BACK TO THE STRUCTURE OF THIS FIELD.
YOU HAVE EIGHT BONDS ARE YOUR TRADITIONAL BONDS AND PAY INTEREST AND PRINCIPLE AMOUNT.
THE BONDS ARE WHAT? CAPITAL APPRECIATION BONDS.
THOSE HAVE A STARTING VALUE AND THEN THE INTEREST FREE.
SO THE INTEREST IS NEVER PAID UNTIL THE BOND ITSELF IS PAID.
AND THIS DEAL IS STRUCTURED SUCH THAT THE EXCESS CASH FLOW WOULD BE TO PAY 50 BONDS COMES UP, HAS TO MAKE EXCESS CASH FLOW.
SO INSTEAD OF THE BE BONDS GETTING SMALLER, GETTING BIGGER BECAUSE
[00:25:02]
THEY'RE NOT GETTING PAID AT THATTHAT'S THE OF BONDS GIFT THAT THE BONDS, THEY DIDN'T HAVE TO PAY ANY CASH DOWN.
THEY WERE GIVEN AS THEY WERE GIVEN THAT FOR SERVICES PROVIDED.
OH, NO WONDER THEY DON'T WANNA TAKE PAID 10% ON $5 MILLION.
THEREIN LIES WHY THE, THE BOND OF BOND IS ACTUALLY INCREASED FROM WHEN WE CLOSE TO NOW BECAUSE IT'S FEE BONDS DOES NOT PAY DOWN.
IS IS THERE A PAY OBLIGATION ON THE C BOND OR IS THAT, IS THAT ACCRUE AS WELL? YES.
NO, IT'S, WHAT HAPPENS ON THE C BONDS IS THAT THERE'S INSUFFICIENT CASH FLOW.
THEN THAT INTEREST JUST SIMPLY GETS DEFERRED.
AND IT COULD GET DEFERRED, BUT IT DOESN'T INCREASE THE PRINCIPLE.
SO YOU DON'T GET THE INTEREST ON INTEREST YEAH.
SO THE CBO THERE IS A CURRENT VACANT COMPONENT TO IT.
SO YES, IT, CO IS, IT'S THE, BUT IN TERMS OF, UH, WATERFALL INTEREST ON C BONDS, IT'S PAID FOR ANY PRINCIPLE THAT'S PAID ON THE VEHICLE.
SO IF, IF THE C BOND IS OUT OF MONEY RIGHT NOW AND PROJECTED TO BE OUTTA MONEY FOR, YOU KNOW, YEARS, YOU EVER, UM, HOW, HOW, HOW, I GUESS AGAIN, WE'RE, WE'RE THE NO OVER THIS THING.
UM, JUSTIFY PAYING, SERVICING A DEBT OBLIGATION, WHICH APPEARS TO HAVE, IF YOU VALUE BASED UPON VALUE ON COLLATERAL.
LIKE I WOULDN'T JUST
THIS THING IS PAY OUT MONEY, QUITE BE ONE THING.
CERTAIN YOU DON'T HAVE A LEGAL OF CHOICE.
SO IT'S, IT'S NOT A MATTER OF, I MEAN IT'S SUFFICIENT.
SEE, BONDS WOULD ACTUALLY HAVE TO JUST DIRECT TRUSTEE NOT TO PAY THE C BONDS A TRANSACTIONAL, WE'RE NOT IMPLICATION.
SO THEY ARE, THEY ARE REQUIRED TO PAY THE INTEREST ON THE CBOS, OTHERWISE THE PRINCIPAL ON THE CBOS IS VERY LASTING.
SO THEY, THEY WOULD BE THE LAST, THE LAST FILE STANDARD AT THE END OF THIS PROJECT.
BUT THE INTEREST IS HIGHER UP ON, ON THE WATERFALL, THAT PAYMENT OF CAPITAL
SO THE, THE TRUSTEE, UM, THE
AND SO IF THE TRUSTEE, SO IF THE C IS OUT OF THE MONEY AND THE TRUSTEE'S SITTING THERE SAYING, UM, WE'RE GONNA KEEP ON PAYING INTEREST ON THIS C NOTE, ESSENTIALLY THEY DISADVANTAGE THE B IF THE B'S GONNA BE IMPAIRED AT SOME POINT TOO.
LIKE HOW, HOW, HOW DOES THE TRUSTEE SAY, UM, WE'RE GONNA KEEP ON PAYING INTEREST ON THIS ON THE C NOTE.
UM, EVEN THOUGH THAT'S GOING TO, UH, IMPAIR THE VALUE OF YOU'VE GOT PROPERTY, THEN YOU'VE GOT CASH THERE.
AND, AND SO THAT'S GONNA WORK TO THE DETRIMENT OF THE LEAD WHO'S SENIOR AND, UH, PRIORITY TO THE, THE SEAT.
TRUSTEE SIMPLY FOLLOWS THE
TO PAY INTEREST ON THE C BONDS
[00:30:01]
INTEREST ON TO SEE BOB.SO IT'S BEEN A WHILE SINCE I'VE BEEN INVOLVED, SO SINCE, BUT LIKE WHAT I'VE BEEN INVOLVED SOME THESE STRUCTURED THINGS PAST FOR TRACH STUFF IS THAT THEY'RE IN THERE PROVISIONS TO VALUE THE THING ON A ANNUAL BASIS OR, YOU KNOW, SOMETHING LIKE THAT.
THEN KIND OF DETERMINE WHO THE CRU POSITION IS.
AND, AND THAT ONE, SO BASICALLY TRIGGERED INTO, UH, SORT STOP SERVICING OBLIGATIONS THAT, THAT WERE, THAT PART OF THE ACK IS, IS OUT OF THE MONEY.
IS THERE ANYTHING LIKE THAT IN THIS DEAL? OR THE TRUSTEE AT THIS POINT IS THE DEAL IS NOT IN DEFAULT.
YEAH, IT'S CASH FLOW, RIGHT? TRUSTEE IS REALLY SIMPLY ACTING
DO I PAY, WOULD BE HELD BACK AND ACTUALLY DO SOME OF THAT MONEY PAY ME ALL.
THAT'S NOT SO IS, SO THERE'S NO LIKE ONGOING APPRAISAL, LIKE A REQUIREMENT OR A OBLIGATION OR PART.
THEY FEEL LIKE THE C IS HOW TO GOVERNMENT COMMISSION AN APPRAISAL THAT FIGURES THE VALUE OF THE COLLATERAL VALUE.
THE ASSET OF THE VALUE OF THE CASH HERE IS CASH.
THE BOND PAID ON THE A BONDS, OTHER BONDS JUST MECHANICAL.
SO, SO THE SEA BONDS ARE THE MOST JUNIOR BONDS, BUT THEY GET PAID BEFORE THE B BOND.
SO THE ISSUE RIGHT NOW IS THAT BECAUSE THE PRINCIPAL'S WORTH NOTHING, THERE'S NO SCHEDULE PAID, RIGHT? IF THERE'S EXCESS CASH, HOW MUCH EXCESS CASH IS THERE? I MEAN, IS THERE SUFFICIENT TO PAY THE 10% COUPON ON THE SEED? WELL, WE DON'T KNOW BECAUSE WE DON'T HAVE ANYONE GIVING US THAT ANALYSIS.
I MEAN THAT'S, I MEAN THAT'S, THAT'S REALISTICALLY WHAT'S HAPPENING.
WE DON'T KNOW BECAUSE NO ONE'S GIVING US THAT.
OHC IS THE ONE THAT THAT'S, THAT'S THE ISSUE.
THE ISSUE, RIGHT? I MEAN, ALL THESE QUESTIONS LOVE TO ANSWER FOR YOU, BUT I MEAN, O C'S SOLE MOTIVATION IS TO GET ENOUGH MONEY OUT OF THE PROPERTY TO PAY THEIR SEED.
SO THERE'S A CONFLICT OF INTEREST.
WELL, I WOULD SAY I'M NOT GONNA, I'M NOT GONNA SPECULATE.
IS ANYONE MOTIVE? I THINK JUST LOOKING FROM AN OBJECTIVE STANDPOINT, GIVEN THE SITUATION SURE.
HOW COULD THERE NOT BE A ACCOMPLISHED? YEAH, I MEAN IF IT'S $38 MILLION UNDERWATER, THEN THE NOMINAL VALUE OF THE C BONDS IS ZERO, BUT THE CASH FLOW IS STILL THE CASH.
I MEAN, LIKE, REALISTICALLY, WE CAN ANSWER QUESTIONS ON CONCEPTUALLY AND LEGALLY HOW THIS WORK.
WE CAN'T, WE DON'T, WE DON'T HAVE AN ANSWER FOR YOU ON HOW WE'RE DOING.
BUT THAT'S WHY WE WANNA REPLACE THAT'S EXACTLY, EXACTLY.
SO HOW, HOW WATER, HOW WOULD WATERFORD BE COMPENSATED? THEY'RE GONNA GET AN A.
I MEAN, TELL US WHY DO YOU WANNA DO THIS
FIRST OF ALL, I, I THINK I KNOW MOST OF YOU, BUT FOR THOSE THAT I DON'T KNOW, I'M SEAN ROSS AND I'M THE CO-FOUNDER, ONE OF THE COMPANY, MY PARTNER JOHN JACKMAN'S HERE, AND NAPAL IS HERE AS WELL.
YEAH, I THINK IT'S, THERE YOU GO.
UM, JUST REAL QUICK BACKGROUND AND THEN I'M GONNA ANSWER YOUR QUESTION.
UM, SO WE'RE, SO WATERFORD, WE'RE AFFORDABLE HOUSING DEVELOPERS AND WORKFORCE HOUSING DEVELOPERS, COMPETITORS.
UH, WE HAVE, UH, 6,500 UNIT PORTFOLIO BOTH, UH, TEXAS AND CALIFORNIA.
UM, WE'RE THE LARGEST OPERATOR OF CENTRAL BOND, UM, DEALS IN THE COUNTRY.
UH, SO WE KNOW THE STRUCTURE REALLY WELL.
I, I DO NEED TO PUT A QUICK DISCLAIMER IN.
WE'RE NOT MUNICIPAL ADVISORS, MEANING
WE'RE WE'RE REAL ESTATE OPERATORS.
UM, SO OUR EXPERTISE IS ON THE OPERATIONS SIDE.
UH, UM, BOARD, REMEMBER YOU ASKED ABOUT WHAT OUR INCENTIVE IS, IS FIRST AND FOREMOST WE'RE EXISTING PARTNERS WITH THE DALLAS HOC ON TWO TRANSACTIONS THAT, UH, CHAIR ELLIS MENTIONED, UM, ACCESS KESSER PARK DOMAIN AND MIDTOWN.
AND, UM, AND WE KNOW THIS STRUCTURE WELL AND CANDIDLY, UM, WE WANT TO BE GOOD PARTNERS TO THE HFC, THE WAY THAT WE COMPENSATED, UM, ON THIS TRANSACTION.
[00:35:01]
WE WOULD JUST GET OUR, UH, OUR PROPERTY OR PROJECT ADMINISTRATOR FEE, WHICH, UM, I THINK IN THIS INSTANCE IS 180,000, 180,000 CANDLE.UM, SO IT'S NOT, THERE'S NOT SOME HUGE PROFIT CENTER HERE.
IT, IT, IT REALLY FOR US, UM, GETTING INVOLVED, YOU KNOW, WE, YOU KNOW, WE BECOME GOOD FIDUCIARIES TO, YOU WANNA BE GOOD PARTNERS.
CANDIDLY, WE WANNA BE LONG-TERM PARTNERS WITH DALLAS HFC.
UM, AND WHEN CHAIR ELLIS REACHED OUT, UM, WE KNOW THE STRUCTURE, WE KNOW ALL THE BOND INVESTORS.
UM, AND SO WE SAID WE, WE WERE WILLING TO, TO STEP IN, UM, TO BE CLEAR, WE DIDN'T HELP STRUCTURE THIS DEAL.
UM, AND WE'RE STILL GETTING OUR ARMS AROUND, UM, ALL THE FINANCIALS.
UM, BUT YOU KNOW, WE'VE GOT A GOOD HANDLE ON IT AND WE CAN ANSWER QUESTIONS TO THE BEST OF OUR ABILITY.
I WANTED TO GIVE THAT QUICK BACKGROUND.
JUST, UM, SO IF YOU TAKE OVER WHAT HAPPENS TO THE CWA, SO I'M GONNA DEFER TO THE ATTORNEYS ON THAT.
SO YOU JUST DO, OUR ROLE IS TO MAKE SURE THAT THE PROJECT STAYS WITHIN INFORMANTS OF THE, UH, THE REGULATORY AGREEMENT.
WE OVERSEE ALL THE, THE CAPITAL EXPENDITURES AND THE ASSET.
WE'LL PROVIDE FINANCIAL PROJECTIONS.
AT THE END OF THE DAY, WE'RE RUNNING THE REAL ESTATE FOR YOU.
THAT'S OUR EXPERTISE IN TERMS OF THE BOND STRUCTURE AND C BONDS OF AN THE ATTORNEY OF THE ROOM.
SO YOUR, YOUR JOB IS MAKE, MAKE SURE THE ASSET IS ACTUALLY HOPEFULLY PRODUCING.
SO WE ACTUALLY HAVE SOME MONEY TO CORRECT.
OUR INCENTIVE IS TO MAKE SURE THAT WE RUN THE ASSET IN CONFORMANCE WITH THE RATE AGREEMENT, YOU KNOW, ALL THE, THE, THE REGULATORY COMPONENTS OF THE BOND OFFERING AND THEN, AND, AND THEN RUN IT IN MOST EFFICIENT AND POSSIBLE TO MAXIMIZE YOUR RETURN UNDER YOUR ARREST.
I MEAN, AND YOU WERE SAYING THAT IT'S THE, UM, IN RESPONSE TO THE QUESTION AT THAT POINT C BONDHOLDER SIMPLY TO THE GO, THE, THE BOND, THEY ARE MOST JUNIOR POSITION OF THE BOTTOM.
AND I JUST WANNA WEIGH IN ON THIS, UH, ALLIANCE AND FRANKLIN ARE STILL, LOOK, WE INFORMED 'EM OF WHAT'S HAPPENING.
AND THEY WERE, THEY WERE IN AGREEMENT WITH THIS.
UM, THEY'RE STILL GONNA TALK WITH OHG ABOUT, YOU KNOW, NEGOTIATING AND LIQUIDATE PRICE.
BUT AS FAR AS I'M CONCERNED, THAT AIN'T OUR PROBLEM.
I, I WOULD ADD TOO, MOST OF THE, OR ALL OF THE FINANCIAL RISK IS WITH THOSE BOND HOLDERS, IT WAS AN INVESTMENT, RIGHT? THEY INVESTMENT CARRIES RISK.
THIS ONE OBVIOUSLY, IT'S NOT HIDDEN PRO PERFORMANCE.
SO, BUT ALSO LIKE WE'VE HAD, LIKE, I'VE HAD A LOT OF DISCUSSIONS WITH THE MARI HAS TOO.
THEY'RE NOT, ODDLY ENOUGH, THEY'RE NOT FLIPPED OUT OVER THIS, YOU KNOW, THEY JUST WANT THAT CBO TO GO AWAY, YOU KNOW, AND YEAH, I THINK THERE WAS, THEY PREFER THE ROUTE THAT WE'RE GOING 100%.
THEY'RE, SO I THINK THEY JUST WANNA GET THIS.
THEY'RE, THEY, THESE ARE AGAIN, LONG MULTI-DECADE BONDS.
THEY'RE NOT PLUGGING OUT OVER THE PERFORMANCE.
IT'S JUST, THERE'S A PRACTICAL REALITY OF, YOU KNOW, LOOK, THEY, THEY JUST GOTTA GET, THEY GOTTA GET RID OF THE SAME BOND AND THEY GOTTA NEGOTIATE THIS OUT.
AND THEN WE JUST GOTTA BE, WE HAVE TO BE SEPARATED.
ALL THE TALKS THAT'S, I THINK WE'RE LOOKING AT THESE LONG TIMELINES.
EARLY COURSE CORRECTION IS A LOT.
DO WE NEED A MOTION? WELL, CAN I ASK ONE MORE QUESTION? YEAH.
DO WE HAVE ANY OTHER DEALS WITH OHG OR THAT'S IT.
THAT'S ONLY, I THINK MY KNOWLEDGE, IT'S AN ONLY PROPERTY IN THE STATE OF TEXAS ON THE NEW ASSET MANAGER OR THE, UH, PROJECT ADMINISTRATION AGREEMENT.
I SEE THERE'S A FEE, HUNDRED $61,000.
SO THAT, SO, SO THE, THE, THE, THE, THE TRUST IN DENTURE OR WHATEVER WE HAVE WITH ALL, ALL THE BOTTLE HOLDERS SAY THIS IS AN EXPENSE.
THE PROPERTY GETS PAID FOR NET CASH FIRST.
YEAH, IT'S LIKE PROPERTY MANAGEMENT PLUMBING.
THEY'RE NOT, THEY'RE NOT BEHIND ANYTHING.
THEY HAVE TO, AND, AND IF, IF WE HAD A MUCH BIGGER STAFF, I ASSUME WE COULD HAVE DONE THIS IN HOUSE, BUT DON'T HAVE STAFF TO DO THAT.
I MEAN, I WOULDN'T WANT EVEN WITH THAT.
LOOK, WE'RE NOT ASSET MANAGER.
WELL, THEY'RE NOT ASSET MANAGERS.
BUT NOT ONLY THAT, I MEAN, LOOK, THERE IS STILL A LEVEL OF SERVICE TO THE BOND HOLDERS THEY PROVIDE.
AND I'M TELLING YOU RIGHT NOW WHAT I'VE SEEN, I DON'T WANNA TOUCH THAT.
I DON'T WANT OUR ORGANIZATION TOUCH THAT.
I WANT THEM TO TOUCH THAT ONE MORE OTHER ASK, WHAT QUESTION DO YOU WANT? DO YOU HANDLE THE ONSITE MANAGEMENT
[00:40:01]
AND HOUSE, OR DO YOU LIKE HIRE A THIRD PARTY MANAGEMENT PROPERTY MANAGER? WE HAVE, UM, SO THE THIRD PART THERE WILL, THERE WILL BE A THIRD PARTY ONSITE MANAGER.IT'S RAY STAR, UH, WHO LOT, UH, TO CHAIR ELLIS'S, UH, COMMENTS.
UM, WE HAVE A WHOLE TEAM THAT, UH, THAT HANDLES THE AUDITS BECAUSE THESE ARE PUBLIC
SO THERE'S HUGE AUDIT REQUIREMENTS.
SO WE HAVE A WHOLE ACCOUNTING STAFF THAT OVERSEES THAT.
WE REPORT TO BOND INVESTORS AS CHAIR ELLIS MENTIONED.
SO THERE'S A, IN ADDITION TO THE CAPITAL EXPENDITURE BUDGETS, ALL THE FORECAST OF THE ASSET AND THERE'S A WHOLE ACCOUNTING POINT BEHIND THAT, UM, TO BOND HOLDERS THAT ARE PART OF, AS PART OF THE BOND OPERATING.
SEAN, YOU ACTUALLY HANDLING SITUATIONS LIKE THIS RIGHT NOW? CALIFORNIA, CORRECT.
WE WHERE THE PROJECT ADMINISTRATORS BEEN TAKEN OUT.
SO, UH, THERE WAS TWO, TWO ASSETS IN CALIFORNIA ON HOLDERS ASKED US TO STEP IN, SAY THAT, UH, THEY, THEY WERE NOT HAPPY THEY CURRENT PROJECT ADMINISTRATOR.
SO, UH, THEY ASKED US TO STEP IN.
FINAL QUESTION, ARE WE HAPPY WITH THE PROPERTY MANAGEMENT OR IS THERE SOME, IS THAT, WHAT ARE OUR PROJECT ADMINISTRATOR HELP? LOOK AT THAT.
STAR, I THINK BY THE THOUGHT IS, LOOK, IT'S GREAT STAR.
IT'S NOT, IT'S BEING COMPETENTLY FINE.
UM, I THINK PROBABLY IT WAS, UH, PHIL, UH, YOUR ASSET MANAGER MADE A GOOD COMMENT.
HE SAID, BUT I THINK THEY REALLY JUST NEED AN ASSET MANAGER THAT'S REALLY PUSHING IT WITH THEM, WHICH I CAN SEE WITH GRAYSTAR, THAT'S KIND OF HOW YOU HANDLE IT.
IT COULD PROBABLY RUN, IT'S RUNNING FINE.
IT PROBABLY COULD BE RUN MORE OPTIMALLY, BUT I THINK THAT'S, I THINK THEY'LL HAVE A GOOD ANGLE.
UM, SO AS I UNDERSTAND O HT, I KIND UNDERSTAND WHY WE'RE KIND OF
THE INCENTIVE, THEY'RE NEVER GONNA GET THE INCENTIVE.
SO, UH, SO BASICALLY NOT, YOU KNOW, I EXPLAIN THEIR BEHAVIOR, BUT HERE, AND I, I APPRECIATE YOU GUYS STEP IN.
I'M USED TO, WHEN YOU GET IN A SITUATION WHERE SOMETHING'S UPSIDE DOWN, YOU'VE GOT SOMEBODY THAT'S INCENTIVIZED THAT'S OUTRIGHT PROPERTY BECAUSE WE'RE NOT LIKE
SO HOW, HOW DO WE, UM, IT SOUNDS LIKE WE DON'T HAVE THAT ABILITY IN THIS CASE, IT'S REALLY, IT'S PROBABLY A AND B HOLDERS WHO ARE, YOU KNOW, SITTING.
BUT, UM, UNDERSTAND YOU'RE SHOWING UP EVERY DAY TO MAKE SURE THE PROPERTY IS READ WELL.
LIKE IN THE ABSENCE OF AN INCENTIVE THAT OKAY, IF YOU DO WELL, YOU KNOW, BEEN IN FIVE YEARS, YOU'RE GONNA, YOU KNOW, MAKE, MAKE FINAL MONEY.
LIKE THIS SOMETHING YOU'RE KIND OF WIRED TO DO.
KIND OF KEEP THE ASSET FROM JUST KIND OF GOING DRIFTING SIDEWAYS AND, YOU KNOW, THREE YEARS FROM NOW WE'RE IN A BAD SITUATION BECAUSE NOBODY'S REALLY INCENTIVIZED TO MAKE THIS THING RUN.
YEAH, THAT'S A GREAT QUESTION.
IS THIS IS IT'S, I'M JOHN JACK ON THE CO-FOUNDER OF RASH, SEAN WATERFORD.
UM, YOU KNOW, I THINK ONE OF THE BIG PICTURE THINGS IS THE FACT THAT, YOU KNOW, THESE BOND HOLDERS, BOTH FRANKLIN AND ALLIANCE, UH, YOU KNOW, IN OUR PORTFOLIOS IN CALIFORNIA, THEY HOLD A LOT OF OUR BONDS.
UM, AND SO I THINK THAT NOT ONLY WE MOTIVATED TO ENSURE THAT WE MAINTAIN A GREAT RELATIONSHIP WITH THE HFC, DO THINGS, YOU KNOW, 'CAUSE WE WOULD LIKE TO DO MORE PROJECTS WITH THE DALLAS HFC, UH, AND BE A TRUSTED PARTNER WITH THE DALLAS HFC.
YOU HAVE TO UNDERSTAND MORE STANDPOINT TOO.
THESE BOND HOLDERS ARE LARGE INVESTORS OF OURS ALREADY.
SO US STEPPING IN IS US WANTING TO TRY TO HELP THEM AS WELL.
AND SO I THINK FROM A MOTIVATIONAL STANDPOINT, UM, YOU KNOW, WE HAVE, WE, WE HAVE A STRONG MOTIVATION THERE BECAUSE WE'RE ALSO TRYING TO DO MORE PROJECTS MOVING FORWARD.
AND SO FOR US TO MAINTAIN GREAT RELATIONSHIPS WITH THEM, FEEL LIKE THEY'RE GETTING GREAT SERVICE FOR US, THAT'LL ALLOW US TO CONTINUE TO TRY TO GROW THIS POTENTIAL, UH, PLATFORM FOR US.
SO HOPEFULLY THAT ADDRESSES THAT QUESTION.
UM, YEAH, IT PRETTY MUCH DOES.
SO JUST I GUESS AS A FOLLOW UP TO THAT, THE, THE BASE FEE WE'RE TALKING ABOUT HERE, IS THAT ENOUGH FOR, YOU KNOW, FOR IT TO BE WORTH YOUR, WHILE I UNDERSTAND THIS, YOU'RE NOT GONNA BE LOSING MONEY ON THIS.
I MEAN, LOOK, THERE'S CERTAINLY A COST FOR US TO DO THE ASSET MANAGEMENT, OUR TEAM TO DO ALL THE REPORTING AND ALL THAT.
UM, YOU KNOW, THIS FEE WILL ALLOW US TO EARN SOME PROFIT ON THAT.
NOT A LOT, BUT WILL ALLOW US TO DO IT.
I JUST THINK WE'RE PLAYING FOR SORT OF A BIGGER PICTURE IS THAT, YOU KNOW, THIS IS SOMETHING WHERE BOTH, YOU KNOW, THE HFC HAD CONVERSATION WITH BONDHOLDERS AND WE JUST WANNA DO.
UM, YOU KNOW, WE THINK THIS PROGRAM CAN ENSURE WORK WELL AND SO THAT IT'S, IT'S
I I I WOULDN'T BE, TRUTHFULLY, I WOULDN'T WITH US, YOU KNOW, WE'VE BEEN, UH, WE PLAYED THE LONG GAME, SO I WOULDN'T REALLY WORRY ABOUT US TOO MUCH FROM THE STANDPOINT YOU HAVE RIGHT? INTEREST.
I, I SAY THIS WITH ALL THE INTERACTIONS I'VE HAD WITH THE, UH, AL TEMPLES AND ALLIANCE, YOU
[00:45:01]
KNOW, WE WENT THROUGH A LIST OF WHO'S OUT THERE, WHO'S DOING IT, WHO THEY LIKE, YOU KNOW, WHEN YOU KIND OF HEAR THE WORD WATERFORD FROM THEM, IT'S CLEAR.THEY'RE A FAVORITE PROJECT ADMINISTRATOR.
AND I THINK THAT LEVEL OF PRESENCE WITH THOSE BONDHOLDERS, WHICH IS A FINITE UNIVERSE, LOOK, I MEAN, THEY DO GET SOMETHING OUT OF IT.
IT'S FUTURE, IT'S FUTURE WORK, FUTURE PRESENCE, FUTURE EXPANSION.
SO YEAH, IT'S A LITTLE BIT MORE, IT'S TANGIBLE, BUT THEY, THEY ARE GETTING SOMETHING OUTTA IT.
WELL, AND THEY HAVE TO CONTINUE TO CONTINUE TO FEED.
WE CAN HAVE THAT SCOPE UP AGAIN.
AND JUST, WE CAN'T REALLY DO ANY OTHER INCENTIVE JUST BECAUSE THEN I THINK GEORGE WILL SAY, YEAH, IF YOU DO THIS, IT TURNS INTO EQUITY AND THAT'S PRIVATE GROUP HAVING EQUITY, THESE BONDS, THAT'S A NO NO, BLAH, BLAH BLAH.
SO WE'RE, WE'RE VERY INCENTIVIZED TO MAKE SURE THAT THIS PROJECT WORKS WELL AND IT LAYERS ONTO YOUR EXISTING PORTFOLIO.
YOU'VE GOT TWO OTHER DEALS, SO NOW YOU HAVE THREE, HOPEFULLY FOUR, YOU KNOW, SO WELL YEAH.
SO IF THE FULL PROPOSITION IS, I DON'T KNOW, I DON'T REALLY SAY
ANYONE HAS ANY OTHER QUESTIONS? I JUST AIR IT OUT.
GOT THE RIGHT PEOPLE HERE TO ANSWER.
I JUST ASK THIS SOMEONE I CARE ABOUT.
THE ANSWER IS, IS, IS, UM, UH, RESIDENTIAL 10, A SINGLE PURPOSE ENTITY FOR THIS DEAL IS TO DO OTHER STUFF.
YOUR WATER FOR RESIDENTIAL 10.
OH, THAT'S JUST A SINGLE PURPOSE FOR THIS.
I THANK THE AGREEMENT WE'RE GUARANTEE DIDN'T SEE THAT.
AND THEN I JUST KIND OF KNOW, IT SOUNDS LIKE IF THEY REALLY KICK THE MANAGER PROPERTY MANAGER AND GET THEM, GET THE WHOLE THING PERFORMED BETTER, THAT THE FIRST $500,000 A YEAR IS GOING TO C BOND UNLESS THEY'RE TAKING DOWN AFTER THE EASE.
I KNOW THEY'RE, THEY'RE, THEY'RE, THEY GET YOU, THEY'RE GETTING 10% INTEREST ON THE C BOND, BUT, BUT IT'S BEHIND THE A BONDS.
YEAH, BUT THE A BONDS ARE GETTING PAID.
A BONDS ARE GETTING PAID INTEREST, WHICH SOUNDS LIKE THEY ARE NOW B IS ACCRUING ANYTHING ELSE IS GOING TO THE C, RIGHT? WELL, AGAIN, WE DON'T HAVE ANY PROJECTIONS TO JUDGE STAFF BOND, BUT YES, I THINK THAT THAT IN THEORY THAT SOUNDS RIGHT.
SOMETHING IT SOUNDS LIKE THEY NEED TO GET TAKEN OUT.
IN A PERFECT WORLD, THE BONDHOLDERS BOND HOLDERS NEGOTIATE WITH OHG AND THEY'LL FIGURE OUT SOMETHING.
LOOK, MY MY HOPE, MY DREAM, MY AMBITION IS AT SOME POINT THESE BOND HOLDERS CAN FIGURE IT OUT.
I MEAN IT'S A DOLLAR, IT'S A DOLLAR AMOUNT, RIGHT? IT'S A TRADE OF UP ON CASH FLOWS VERSUS BACKEND PAYMENT, WHATEVER THAT NUMBER IS.
FIGURE YEAH, WE DON'T NEED TO BE IN ON THAT BECAUSE WE'RE NOT PROVIDING, OH, I MEAN, WE WANT IT TO BE RESOLVED ON THE BACKEND.
WE DO HUNDRED PERCENT, BUT I JUST DON'T SEE, BUT THE CURRENT PROJECT ADMINISTRATOR THAT'S GETTING RESOLVED, WE HAD JUST HAD TO UPDATE.
IS ANYONE, ARE WE ALL GOOD FOR QUESTIONS? AND IF YOU WANT SIDE CONVERSATIONS, CALL ME.
YEAH, NO, AARON, OR CALL RYAN.
ANYONE WANNA MAKE A MOTION ON THIS? WE, OKAY, SO SECRETARY APPROVING THE PROJECT MINISTRY, OR DO WE HAVE TO ALSO APPROVE? I THINK IT'S THE MOTION, IT'S THE RESOLUTION.
SO I HAD A MOTION APPROVED FROM SECRETARY PAGE.
ANYONE, ANYONE WANT A SECOND? SECOND.
UH, JACKIE, CAN YOU DO THE VOTE? YES.
DIRECTOR SEAN ALLEN FAVOR, DIRECTOR JOWAN RUDOLPH.
I, DIRECTOR SHALANDA APPROVE TREASURER JACK MARSHALL SEAT.
UH, JUST DIRECTOR PATTY APPROVE.
C**N APP APPRO APPROVED DIRECTOR LESLIE
DR. RYAN MOORE, APPROVED SECRETARY TONY PAGE APPROVED.
ALRIGHT, I YOU ALL ON PLANE CATCH, UH, FORWARD WORKING WITH YOU GUYS.
[00:50:02]
ALL RIGHT, WE'RE GONNA GO BACK TO AGENDA ITEM FIVE.CONSIDER AN ADOPT AN INDUCEMENT RESOLUTION DECLARING INTEND TO ISSUE BONDS IN AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED 75 MILLION FOR A LOAN TO FAIRFIELD HALL LP TO PROVIDE FINANCING FOR A MULTI-FAMILY RESIDENTIAL RENTAL DEVELOPMENT FOR PERSONS OF LOW AND MODERATE INCOME TO BE KNOWN AS FAIRFIELD HALL STREET.
AND TO BE LOCATED AT 1823 NORTH HALL STREET, DALLAS, TEXAS 7 5 2 0 1.
AUTHORIZING FILING OF AN APPLICATION FOR ALLOCATION OF PRIVATE ACTIVITY BONDS WITH, EXCUSE ME, THE TEXAS BOND REVIEW BOARD, AND CONTAINING OTHER RELATED ISSUES ALL BACK OUR PROGRAM.
I'LL INVITE MR. DANIELS HERE, THIS PROJECT PROPOSAL.
THIS IS A STRAIGHT UP TEXT DEAL.
I THINK IT'S ONE OF OUR BETTER LOCATIONS WE'VE SEEN TODAY.
I'M OUR DEVELOPMENT PARTNER FOR THE TEXAS MARKETS.
UH, AND TODAY I'M PRESENTING, UH, A PROJECT AT 1823 NORTH WALL STREET.
I'LL JUST TAKE AN ORDER OF THE SLIDES HERE.
SO START STARTING WITH, UH, A LITTLE BACKGROUND ON FAIRFIELD.
SO WE ARE A FULLY INTEGRATED MULTI-FAMILY PLATFORM DEVELOPMENT, UH, CONSTRUCTION, PROPERTY MANAGEMENT, ACQUISITIONS, REHAB, UH, AFFORDABLE.
UH, WE, WE USE THAT ALL IN-HOUSE, UH, WITH A VARIETY OF, UH, PARTNERS HEADQUARTERED SAN DIEGO AND, UH, DALLAS SERVE AS OUR LARGEST, UH, SATELLITE OFFICE, ABOUT 60 PEOPLE.
UH, WE'VE GOT DESIGN, CONSTRUCTION, UM, DEVELOPMENT, ASSET MANAGEMENT, UH, AND, AND PROPERTY MANAGEMENT.
ALL THE, UH, HEADQUARTERED DATABASE, UH, REGIONAL OFFICE.
UH, WE'VE BEEN AROUND SINCE 1984.
UH, IN OUR HISTORY WE'VE DEVELOPED CLOSE TO 400 PROJECTS AND, UH, OVER 125,000 UNITS.
UH, SO LONG DEVELOPMENT EXPERIENCE SPECIFICALLY IN TEXAS.
UH, AND JUST IN THE PAST EIGHT YEARS OR SO, WE'VE DEVELOPED, UM, ABOUT 15 PROPERTIES IN TEXAS.
UH, AND ABOUT HALF OF THOSE IN DALLAS.
UH, THESE ARE SOME OF THE RELEVANT, UH, PARTICIPANTS ON OUR TEAM.
BUT WE INVOLVED, UH, TOMMY HAS RUN ALL DEVELOPMENT AND CONSTRUCTION OUT OF OUR SAN DIEGO OFFICE.
ME, LARRY LEE, WHO IS A VETERAN, UM, PRE-DEVELOPMENT GUY.
HE HAS ENTITLEMENTS AND, UM, YOU KNOW, A LOT MORE HATS THAN HIS TITLE WOULD SUGGEST.
UH, AND THEN WE'VE GOT PROJECT FINANCES AS WELL, DESIGN CONSTRUCTION, PROPERTY MANAGEMENT.
AND THEN WE ALSO HAVE OUR OWN IN-HOUSE AFFORDABLE TEAM, UH, WHO I'LL BE COLLABORATING WITH.
I'LL BE KIND MANAGING SIDE AND WORKING IN T WITH OUR, UH, AFFORDABLE FINANCING TEAM.
[00:55:03]
UH, AND THIS JUST THIS SLIDE JUST SHOWS WHO WILL BE, UM, SOME OF THE CONSULTANTS WILL BE USING HL MULTI ARCHITECT.THEY ARE, UH, EXPERIENCED, WELL, WELL VERY EXPERIENCED IN, UH, BUILDING, YOU KNOW, ALL TYPES OF MULTIFAMILY, SPECIFICALLY SERVICE PARK AND WRAP PRODUCT.
UM, AND THEY'VE DONE SOME AFFORDABLE DEALS AS WELL.
SO, UH, WE'RE LOOKING FORWARD TO WORK WITH THEM ON THIS PROJECT.
WE'RE ENTERING IN THE SD BASE NOW.
UM, WEDNESDAY IS OUR MAIN USE ATTORNEY.
AND THEN, UH, PGE WE'VE HAD GREAT EXPERIENCE WITH HERE LOCALLY, UH, WILL BE OUR CIVIL MOVING INTO, UH, PROJECT.
THE PROJECT HAS 354, I THINK WE ACTUALLY HAVE 3 55 UNITS, UH, 71 BUTCHER, ONE BEDS, 181 TWOS AND 101 THREES.
UM, AND SO JUST A LITTLE, LITTLE HISTORY ON THE SITE.
SO, UM, THIS PREVIOUSLY WAS, UH, OWNED BY DHA.
UM, THEY PLACED A DE RESTRICTION ON IT, REQUIRING 20% OF THE UNITS BE, UH, RESTRICTED AT 60% A MI, UM, TRANSIT THAN AUDIT FROM THEM BACK IN, I BELIEVE 2015 OR 2016, WE'RE PLANNING ON BUILDING A SIX STORY APARTMENT PROJECT WITH, UH, A ON THE BOTTOM LEVEL BOTTOM.
THEY BROUGHT IN KROGER, ENDED UP BIND THEM OUT, UM, AND BROUGHT IN SOUTHEASTERN DEVELOPMENT AND THEN DECIDED NOT TO MOVE FORWARD.
AND SO KROGER CURRENTLY OWNS THE SITE AND WE'RE UNDER CONTRACT, UH, SCHEDULED TO CLOSE IN DECEMBER OF 2026.
UH, WE ARE PLANNING TO BUILD A FOUR STORY WRAP WITH A SIX STORY STRUCTURED PARKING GARAGE.
UM, AND I WILL MOVE ON TO SITE SPECIFICS.
SO HERE'S THE LOCATION, HALL STREET IN 75.
UM, THE MIDDLE HALL STREET IS 75, SO RIGHT NEXT TO THE STARBUCKS RIGHT THERE.
UH, YOU'VE GOT ROSALY ACROSS THE STREET ON ROSS TO THE EAST, AND THEN MILL CREEK STEEL JUST THERE ON THE EASTERN BORDER OF THE SITE.
UH, SO TONS OF DRIVE BY TRAFFIC HERE WITH I 75.
I MEAN, THIS IS, IT IS, IT IS REALLY A CLASS A SITE.
UH, SO I THINK WE'RE REALLY EXCITED TO BE ABLE TO PROVIDE SOME, UM, YOU KNOW, A SIGNIFICANT AMOUNT OF AFFORD CLASS UNITS HERE.
SO IT'S GOT A POVERTY RATE, UH, IN 16 POINT, A POVERTY RATE OF 11.32.
SO BELOW THE, UH, AVERAGE FOR METRO SURROUNDING MY COURSE IS, YOU KNOW, THE ROSE DHA ROSE PROPERTIES.
AND, UH, WORTH POINTING OUT THAT ON THEIR MARKET RATE, THE, THE MARKET RATE PORTION OF THEIR PROJECT THERE, UH, IN THE MIDST OF A $50,000 UNIT REHAB.
SO A VERY SUBSTANTIAL REHAB AS WELL TO THEIR, UH, SOME OF THEIR COMMON AREA SPACES.
SO ONE OF THE THINGS THAT MAKES THIS ATTRACTIVE AS A, AS AN AFFORDABLE HOUSING DEVELOPMENT IS THE DISCOUNT TO MARKET RENTS.
SO THIS, THIS SLIDE SHOWS YOU CONSIDER TO BE OUR MARKET RATE COMPS.
UM, YOU KNOW, WHEN WE INITIALLY HAD THE
UM, SO WE'RE LOOKING AT, YOU KNOW, ABOUT A FIVE TO $600 DISCOUNT TO MARKET RENT IN THIS LOCATION.
AND THIS JUST SHOWS SOME OF THE SURROUNDING AREAS.
UH, YOU HAVE YOUR BUS STOP RIGHT THERE AT HALL STREET IN 75.
YOU'VE GOT A DARK STATION AT CITY PLACE, UH, JUST A NORTH, WE'VE GOT THE BE AVENUE TROLLEY, UM, CLOSE PROXIMITY TO BAYLOR HOSPITAL.
UM, THE MEDICAL DISTRICT IS WITHIN THREE MILES.
AND THEN OF COURSE, ALL OF THE JOBS IN DOWNTOWN AND UPTOWN.
THIS SHOWS OUR CONCEPT DESIGN.
UH, SO WE, WE WILL BE BUILDING IN AS PART OF THE PD I SHOULD MENTION.
SO THIS IS ZONE PD, UH, AND WE WILL BE COMPLYING WITH ALL, UM, ASPECTS OF PD.
WE DON'T NEED ANY SORT OF AMENDMENT TO, UH, THE PD
[01:00:01]
TEXT.UH, ALL WE NEED IS A DEVELOPMENT AMENDMENT, WHICH, UM, IS A, WILL BE A MINOR AMENDMENT AND WE'LL JUST BE AN ADMINISTRATIVE WITH, UH, SO WE'RE STILL WORKING WITH OUR CIVIL AND ARCHITECT TO GET, UM, PRODUCE ALL THOSE NECESSARY MATERIALS TO PROCESS THAT AMENDMENT.
SO, UH, WE WILL BE WIDENING HALL STREET, UH, AT MUNGER, UH, TO INCORPORATE LEFT HAND TURN LANES, UH, FOR THE FLOW OF TRAFFIC.
UH, WE'VE ALREADY ENGAGED WITH DAVID
UM, WE'LL BE HOLDING A PRIVATE DRIVE THAT WILL CONNECT WALK-INS AND COCHRAN.
UM, AND WE'LL HAVE A SECONDARY ENTRANCE INTO THE GARAGE OFF THAT PRIVATE DRIVE.
UH, JUST THESE ARE SOME SIMILAR PROJECTS THAT WE'VE BUILT SO WE DON'T NEED TO SPEND TOO MUCH TIME ON YOU.
FEEL FREE TO GO THROUGH THEM OR ASK QUESTIONS.
UH, SEVENS IS A PFC DEAL THAT WE DID IN PARTNERSHIP WITH DH OR WITH, SORRY, DHA.
UM, THAT PROJECT IS STILL ONLY SEVEN, FIVE MINUTES, SO IT'S BEEN A LONG LEASE RESET, BUT THAT PROJECT TURNED OUT REALLY NICE AND, UM, IT HAS PERFORMED PRETTY WELL.
UH, INWOOD STATION IS ANOTHER PROJECT WE BUILT THAT BEEN BACK IN 2017.
UH, IT WAS LEASED UP TO MARKET A YEAR OLD, THEN CONVERTED TO A PFC WITH DHA, AND THAT'S A MEDICAL DISTRICT DEAL DRIVE.
AND THEN 5 5 5 ROSS, UH, WAS A PROJECT WE BUILT IN A DISTRICT IN THE WEST END WITH A SMALL AFFORDABLE COMPONENT.
UM, THAT WOULD'VE BEEN PROBABLY 2016.
UM, THAT, THAT PROJECT TURNED OUT REALLY NICE.
HIGHLY MAGNETIZED, UM, REALLY NICE ROOF JOB DECK WITH A POOL LOOKING DOWNTOWN AND SOURCES AND USES.
I DON'T KNOW HOW MUCH DETAIL I WANT ME TO GO INTO HERE.
WHAT'S THE BASIS TOTAL? THIS TOTAL AGGREGATE BASIS IS 136 MILLION.
PRETTY GOOD UNIT DIVIDED BY 3 54.
YEAH, I CAN'T, I EITHER FIVE FIVE, I THINK THAT'S GONNA BE, THEY'RE ASKING FOR 75 MILLION AND THE BOND DO SOME FOR RESERVATION? YEAH, THE RESERVATION, YES.
WHAT'S, WHAT'S THE REST OF THE CAPITAL EFFECT? YEAH, SO IT'S, IT'LL BE, YOU KNOW, WE'LL, WE'LL HAVE A, A CONSTRUCTION LENDER, WE'LL PROBABLY HAVE A TAX OR TAX CREDIT BUYER.
CONSTRUCTION LENDER WILL PROBABLY BE THE SAME ENTITY.
SO, UM, YOU KNOW, IT'LL BE THE TAX EXEMPT BONDS, TAXABLE BONDS.
AND THEN, UM, OUR CONSTRUCTION LOAN AND, UH, OUR GP, WE'LL NEED A GP LOAN ON THIS AS WELL.
WHAT'S THE FOUR RESTRICTION IS ALL 60.
60% FOR 90% OF THE, FOR HUNDRED PERCENT PERCENT.
I MEAN, YOU CAN ONLY OFFER THE LOWEST.
60 IS ALL, YOU CAN, CAN'T GO DEEPER, I GUESS.
I'M SURPRISED YOU'RE ABLE TO DO THAT.
YEAH, I KNOW THAT'S, YOU FEEL CONFIDENT IN THE UNDERWRITING.
IT SEEMS LIKE A HIGH PRICE TO GET, UH, 60% RESTRICTED UNITS DONE.
WHAT'S YOUR, WHAT'S YOUR ASSUMPTION ON THE SYNDICATION RATE? UH, TAX CREDIT PRICING, 84 CENTS.
WHERE ARE WE AT? WE'RE AT LIKE 82, 83, 84 RIGHT NOW.
YEAH, I THINK THE LAST DEAL WE CLOSED WAS 84 8 5.
IS IT REALLY? I KNOW IT DIPPED DOWN.
UM, IT'S DIPPED, BUT IT'S STILL BACK UP FOR, FOR MORE URBAN MARKETS.
AND THAT'S THE FEEDBACK WE'VE GOTTEN FROM PRELIMINARY CONVERSATIONS WITH SOME OF OUR TAX CREDIT BUYER PARTNERS FOR THIS TYPE OF LOCATION.
I WAS HEARING LIKE 80 CENTS, JUST, IS THAT WHERE WE DID TOO? NOW EVEN HAVE LIKE 78, WE'VE DONE 70 EIGHTS, LIKE IN, IN, IN MORE RURAL AREAS LIKE FAR EAST TEXAS, OR I THINK IN LUBBOCK WE WERE AT HIGH SEVENTIES.
UM, CAN YOU PULL UP THE DEVELOPMENT PLAN AGAIN? UP BIT UP? OKAY.
UM,
[01:05:01]
THATAND THEN ON THE, UM, ON HALL STREET, THE, YOU KNOW, AS YOU KNOW, THE CITY JUST GOT FINISHED.
MAYBE THEY'RE STILL FINISHING UP, BUT, UM, UH, PROJECT THERE, THEY IN FRONT OF, IF MY RECOLLECTION IS CORRECT, THEY POURED THE SIDEWALK IN THE WRONG LOCATION IN COR RIGHT UP AGAINST THE CURB, WHICH LET THAT PD SAYS SOMETHING DIFFERENT.
IT'S PROHIBITED BY THE CITY SIGN MANUAL.
SO WHAT'S YOUR PLAN FOR THE SIDEWALK THERE? THE REASON I'M ASKING 'CAUSE THAT'S VERY, YEAH.
IT'S LIKE A LOT OF PEDESTRIANS THERE AND IT'S LIKE, UM, THE REQUIREMENT CURRENTLY IS THAT SIDEWALK BE BACK THE CURB? YEAH.
IS THAT, YEAH, WE'LL TEAR THAT HOLE.
YOU TEAR THAT OUT BECAUSE PD, WE HAVE TO ADD THOSE TURN LANES.
THEY'RE NOT NECESSARY ONLY MEETINGS BEFORE WE STOPPED, BUT, UH, TO REMOVE THAT REQUIREMENT, WE, IT WOULD REQUIRE A TEXT AMENDMENT TO THE PD, WHICH WOULD OPEN UP THE WHOLE THING.
AND SO I, WE, WE JUST DECIDED WE'RE BETTER OFF GOING, GOING AHEAD, GO AHEAD AND BUILDING THOSE LEFT HAND TURN LANES.
SO IT, IT, IT MAKES IT TIGHTEN UP THE SIDE A LITTLE BIT, BUT IT DIDN'T AFFECT OUR YIELD AND WE'RE ABLE TO, UM, MAINTAIN THAT SIX FOOT, THERE WOULD BE A SIX FOOT LANDSCAPE BUMPER FROM THAT CURVE TO THE SIDEWALK.
SO IS THIS PD, WAS THAT DONE WHEN THEY, KROGER HAD THIS THING AND THEY WERE THINKING ABOUT DOING THAT? OH GOSH, I'M TRYING TO WHAT YEAR ROUGHLY? DO YOU KNOW IF I, YEAH.
UM, AND THEN HAVE, UH, A REQUIREMENT IN THERE TOO FOR LIKE A STREET TREES LIKE LANDSCAPING ALONG PAUL STREET THERE.
SOMETHING I SAID THERE'S, YEAH, THERE'S LANDSCAPER APARTMENT.
UM, AND THEN YOU SAID THAT IT SAID, UH, FOUR STORY WRAP AROUND A SIX LEVEL.
I ASSUME THE SIX LEVEL CROSS IS GONNA BE ROUGHLY SAME HEIGHT AS THE FOUR STORY.
IT'LL BE, IT'LL BE OVER IT, BUT, UM, IT WON'T, YOU KNOW, REALLY BE VISIBLE JUST BECAUSE OF SIGHT LINES.
YEAH, I'D LOVE TO SEE A SITE DEVELOP.
YEAH, IT'S, IT'S, THIS IS A DREAM PROJECT.
YEAH, WELL IT'S, IT, I AM, YOU KNOW, I GOT IN FRONT OF STATE COUNCIL WHEN WE THOUGHT THOSE STATEMENTS WERE, YOU KNOW, IT WENT ON CONSENT AGENDA.
I BASICALLY SAID, YOU KNOW, WITH THESE, UH, RED LINES TURNING OUR DEVELOPERS UNICORN ON, UH, WE STUMBLE ON A UNICORN, THIS IS A UNICORN.
AND I THINK IN A GOOD TRY IT'S HARD TO RATE.
AND THEN WITH THAT 20% EXEMPTION OR THE, THE DEED RESTRICTIONS, THE PRIVATE DEED RESTRICTIONS THAT DHA WHEN THEY, HE HAD TO HAVE 20% AT SIX.
SO WE ACTUALLY TRIED TO DO WITH THE PFC, IT GOT APPROVED THAT THE POC, BUT THE INTERNAL INVESTMENT COMMITTEE DIDN'T LIKE THE LONG TERM.
NO, INTERNALLY THERE WERE CONCERNS ABOUT, UH, RAISING CAPITAL ON A PP DEAL JUST BASED ON THE, YOU IT'S JUST IN CALIFORNIA, SO IT'S LIKE THEY'RE A LITTLE, THEY'RE A LITTLE REMOVED.
I WAS TRYING TO EXPLAIN, YOU KNOW, HB 20.
OH, SO THE LEGISLATIVE RISK, THERE'S, IT WAS, IT WAS ESPECIALLY WITH REALLY BECAUSE THE, ALL THAT RETROACTIVE STUFF STILL SITTING OUT THERE AND SO, YOU KNOW, FOR HFCS, YEAH, YEAH.
BUT PEOPLE ARE NOT SPLITTING PARENTS RIGHT NOW.
AND I, I THINK IT'S JUST THE GENERAL SENTIMENT AND, AND IT'S HARD ENOUGH TO RAISE EQUITY ON A DEVELOPMENT DEAL.
UH, STER TER OWNS FAIRFIELDS PLATFORM AND, UH, THEY, YEAH, THEY WE'RE VERY FORTUNATE.
THEY BOUGHT OUT BROOKFIELD, WHO WAS A DIFFICULT, UH, ELDER.
SO, UM, THEY HAVE, CALSTERS HAS AN AFFORDABLE HOUSING INITIATIVE.
UH, SO THEY'RE PUSHING US TO GET INTO DEVELOPMENT.
WE WERE HISTORICALLY JUST CLASS A DEVELOPERS, BUT UM, THEY WANT US TO GET THE AFFORDABLE SPACE, WHICH I THINK IS A GREAT IDEA.
AND THEY WANTED A REALLY HIGH QUALITY LOCATION, UM, FOR THEIR FIRST AFFORDABLE DEAL.
AND SO HOW WE HAD A PATIENT SELLER ON THIS ONE WHO WAS WILLING TO WORK WITH US AND ACCEPT ALL OF THE ASSOCIATED CLOSING CONTINGENCIES WITH, UM, YOU KNOW, WHY TECHNICALLY SALE YOU SAID IRIN, THEY'RE THEY OURS? NO, UH, SO KROGER, RIN RIN BOUGHT IT FROM DHA AND THEN KROGER BOUGHT RINS OUT PARTNERSHIP.
SO KROGER THE SELLER, AND THEN THEY DECIDED THEY GOT A NEW CEO.
WELL, YOU KNOW, WITHOUT GOING INTO TOO MUCH DETAIL, THEY GOT A NEW CEO WHO REALIZED THIS WASN'T, WASN'T A VERY GOOD LOCATION BASED ON TRAFFIC FOR KROGER, WHICH, YOU KNOW, I THINK
[01:10:01]
IT WAS WISE.SO JUST THAT UP COUPLE BLOCKS DOWN, THEY GOT TARGET, THE WALMART NEIGHBORHOOD MARKET GOT KROGER AT CITY PLACE.
AND THE TARGET, YOU'VE GOT THE, I THINK THEY RELATE TO THE GROCERY STORE THERE.
UH, WHAT HAPPENED TO THE, UH, I'M TRYING TO REMEMBER WHAT IT WAS.
SOME SORT SAID MAYBE IT WAS JUST ATTACK TAX CASE THAT, DO YOU, ARE YOU AWARE OF THAT OR WHAT THIS, WHAT THAT DEAL WAS ON THIS SITE? UH, A NEIGHBORHOOD.
SO WHAT INTRINSIC WAS TRYING TO DO WAS ESTABLISH A NEIGHBORHOOD EMPOWERMENT ZONE.
AND I'M ACTUALLY A LITTLE UNCLEAR IF THEY, IF IT WAS FORMALLY APPROVED.
I KNOW IT WAS PRESENTED TO CITY COUNCIL.
UM, BUT IT WOULD'VE BEEN NEIGHBORHOOD, NEIGHBORHOOD EMPOWERMENT ZONE 19, I THINK.
AND SO THEY WERE GONNA GO THROUGH ECONOMIC DEVELOPMENT AND GET A CITY TAX ABATEMENT FOR 10 YEARS OR WHATEVER, RIGHT.
AND, UH, THE DISCOUNTED, UH, VALUE JUST WASN'T, UH, WASN'T ENOUGH DIVERS FINANCING GAP.
YEAH, IT WAS APPROVED IN 2021.
SO ANECDOTALLY, THE SEVENS IS ACTUALLY RIGHT DOWN THE STREET FROM THE DOMAIN.
AND IT WAS, THERE WAS NOTHING DEVELOPED ON THERE.
AND I WAS THRILLED THAT THEIR PROPERTY AND OR IMPROVED SAFETY AND SECURITY, THE PEDESTRIAN INFRASTRUCTURE WAS IMPROVED UPON, NOT JUST WELL INTEGRATED.
SO I TRUST THAT THERE'LL BE A GREAT DEPARTMENT FROM THAT PERSPECTIVE.
AND I HAD A QUESTION ABOUT, YOU KNOW, I KNOW IN OUR PROGRAM STATEMENT, WE ENDEAVOR TO PROVIDE COUNSEL WITH ANTICIPATED FOREGONE TAX REVENUE.
BUT SINCE THIS WAS OWNED BY THE CITY DHA SINCE AT LEAST THE EARLY NINETIES, NOT WITH ANY TAX REVENUE, THEN THERE'S ELECTION PAGE, POTENTIAL NEIGHBORHOOD IMPROVEMENT, EMPOWERMENT ZONE.
WHEN WE PROPOSE THIS TO COUNCIL, CAN WE COUCH THIS AS WE'LL? PUT A NET ZERO SO THAT IT'S BEEN AN OBJECT, THIS DISCUSSION ON HOW WE PRESENT TAX EXEMPTIONS TO CITY COUNCIL.
NOW THIS, TO BE CLEAR, THIS IS JUST AN INDUCEMENT SO THAT I CAN TAKE THE APPLICATION TO
BUT IF WE GET THERE, YEAH, WE WILL, WE'RE ACTUALLY GOING DISCUSS THIS AT ANOTHER COMMITTEE MEETING ON HOW WE PRESENT POST TAX EXEMPTIONS.
UH, I THINK COUNCIL MEMBER WEST SENT OUT A MEMO YESTERDAY HIGHLIGHTING THIS, HIS ARGUMENT.
AND OURS IS AS WELL AS, YOU KNOW, IF IT'S BEEN 30 YEARS OR, OR SO MANY YEARS WITHOUT DEVELOPMENT, WE CAN'T PRESENT IT THE CITY COUNCIL AS IF IT WERE A MARKET RATE FULLY TAXABLE SITE BECAUSE IT WOULDN'T EXIST.
WE'D LIKE TO PRESENT IT WITH JUST THE BASE TAX RATE THAT EXISTS AS IS.
AND THEN ONCE WE COME IN AND IT MAKES SOMETHING HAPPEN THERE, THERE ARE OTHER BENEFITS.
AND THAT BEING SAID, THIS IS UNIQUELY GOOD PROPERTY, THAT THE PUBLIC BENEFIT WOULD BE WELL OVER 60% EVEN IF YOU WERE TO TAX IT FULL BOAT.
RIGHT? WE, THEY HAVE TO WAIT UNTIL THE COLLAPSE OR THEY GOTTA GET THEIR RESERVATION.
ARE YOU GUYS GOING IN FOR FULL 75? WE WOULD, IF YOU NEED 75, WE CAN'T APPLY TO COLLAPSE.
I, I THINK WE, WE, WE ASKED FOR APPROVAL FOR THE MAXIMUM AMOUNT, AMOUNT.
BUT IF THEY GO IN NOW, THEY CAN GET A RESERVATION.
NOW THERE'S ROUGHLY 300 MILLION AVAILABLE.
SO THIS IS LIKELY COMING BACK, I WOULD SUSPECT IN THE NEXT MONTHS WE HAVE A AN MU SO THAT WE CAN GET, THE GOOD NEWS IS WE'VE ALREADY BEEN THROUGH THOSE NEGOTIATIONS WITH SUMMER ON THE PSC.
SO HOPEFULLY A LOT OF THE MINUTIA WORKED OUT.
UH, YES AND NO FULL DISCLOSURE, I'VE KNOWN DANIEL A. LONG TIME.
WE'VE WORKED TOGETHER AT FAIRFIELD.
SOME OF THESE THINGS THAT HE PRESENTED TO YOU, I WORKED ON THE 5, 5, 5 BROAD DEAL.
THEY DID REALLY QUALITY CONSTRUCTION.
UH, GOOD PRODUCT MANAGER GROUP.
I THINK IT WOULD BE A VERY GOOD PARTNER TO ADD ARE STABLE.
SO YEAH, I'VE KNOWN ABOUT YOUR GROUP FOR A LONG TIME.
SO YOU HAVE GREAT REPUTATION AND SEE IT ALL HERE IN THE PORTABLE SPACE.
'CAUSE THAT'S WHY ALL NEW ABOUT JUST MORE CLASS STATE TRADITIONAL DEVELOPERS.
ANYONE WANNA A MOTION? RIGHT? WE GOT A MOTION, UH, BY DIRECTOR.
[01:15:01]
UM, JACKIE SHOULD READ THE, UH, YES, DIRECTOR SEAN ALLEN, DIRECTOR DEWAN RUAL, DIRECTOR SHALANDA, OLA APPROVED.JACK MARSHALL, C APPROVED DIRECTOR, PATTY COLLIN, APPROVE DIRECTOR KEVIN HINTON, APPROVED DIRECTOR LESLIE BCI APPROVED PRESIDENT.
DAVID ELLIS, APPROVED DIRECTOR.
SO RESOLUTION AUTHORIZING THE FORMATION OF THE FOLLOWING COMMITTEES.
GOVERNANCE, OPERATIONS, PERSONNEL, NEW PROJECTS, ASSET MANAGEMENT AND PORTFOLIO STRATEGY AND POLICY, EXECUTIVE EXECUTIVE, UH, CORPORATION AND DESIGNATING CERTAIN DIRECTORS, CORPORATIONS CONSTITUTE SUCH COMMITTEES.
SO I CAME TO A REALIZATION, UH, THAT, UH, YOU KNOW, A LOT OF US SORT OF COMING MY WAY, UH, JUST THROUGHOUT THE MONTH, YOU KNOW, WE HAVE A BOARD MEETING, STUFF HAPPENS FOR THE MONTH, WE HAVE ANOTHER BOARD MEETING, YOU KNOW, AND I THINK WE SORT OF OPERATED IN A LITTLE BIT OF LOOSE FASHION.
I THINK A FEW YEARS AGO, MAYBE FOUR YEARS AGO, WE ACTUALLY TRIED TO DO SUBCOMMITTEES WHERE WE KIND OF, UH, BREAK OUT AND HAVE DIFFERENT AREAS OF RESPONSIBILITIES.
THE BEST I CAN SAY IS A BIT OF A HOT MESS.
AND SO AFTER THE LAST FEW MEETINGS, I'M LIKE LOOKING AT THIS WONDERFUL BOARD WITH EXTRAORDINARILY, UH, YOU KNOW, INTELLIGENT, TALENTED, AND, UH, YOU KNOW, EDUCATED PEOPLE.
I THINK WE KIND OF NEED TO BREAK OUT SOME OF THIS, UH, BETWEEN THE MEETINGS WORK SO FORTH.
BUT ALSO I THINK, YOU KNOW, AARON, YOU KNOW, PROBABLY NEEDS A LITTLE MORE RESOURCES TO CALL UPON FOR CERTAIN SUBJECT ITEMS. AND I THINK IT'S A GOOD WAY TO SORT OF STRUCTURE HOW WE OPERATE IN BETWEEN OUR REGULAR MEETINGS AS WELL.
SO, UM, THAT SAID, I HAD, I KIND OF THOUGHT THROUGH WHAT ARE THE KIND OF AREAS RESPONSIBILITY.
I DIDN'T WANNA DO TOO MANY COMMITTEES, UH, DO TWO BIG COMMITTEES.
UM, I DID TALK TO SOME OF YOU.
I WASN'T ABLE TO GET TO EVERYONE.
UM, AND REALLY THIS IS JUST TO BE STARTING, RIGHT? IT'S NOT LIKE THIS IS IT, YOU KNOW? AND IF YOU, IF SOMEONE WANTS TO SERVE A MORE THAN ONE, THAT'S FINE.
UH, IF YOU DON'T WANNA SERVE ON A COMMITTEE AT ALL, THAT'S FINE.
I THINK SOME PEOPLE HAVE EXPRESSED THAT.
SO WE DIDN'T ASSIGN A COMMITTEE TO EVERYBODY AS WELL.
THIS IS JUST TO KIND OF GET US STARTED.
BUT ON TOP OF THAT, UM, YOU KNOW, WE KIND HAVE TO FIGURE OUT HOW DO WE OPERATE.
SOME OF THESE COMMITTEES MAY NOT EVEN, MOST OF 'EM WON'T BE STANDING MEETINGS.
YOU'RE ON AN EMAIL THREAD OR, YOU KNOW, YOU JUST KIND OF, STUFF COMES UP.
UH, AARON, YOU KNOW, CAN KIND OF USE SOME, UH, YOU KNOW, GET ADVICE FROM THESE COMMITTEES BASED ON THE SUBJECT MATTER, AND WE'LL KIND OF FIGURE IT OUT GOING FORWARD.
SO WHAT I THOUGHT WAS, UM, ONE, WE HAVE A GOVERNANCE OPERATIONS PERSONNEL COMMITTEE.
SO REALLY JUST HOW WE OPERATE AS A CORPORATION, UH, A GROUP THAT REALLY DEALS WITH THAT.
THAT'S, YOU KNOW, BOARD, UH, ISSUES.
I'VE LEARNED FOUR MONTHS, WE'RE A LITTLE BIT ALMOST SELF-POLICING IN TERMS OF OUR TERMS, HOW LONG WE'RE TRIPPING, YOU KNOW, I DIDN'T REALIZE, REALIZE THAT, YOU KNOW, UH, IF THERE'S CONFLICTS, UH, POLICIES, WE PROBABLY NEED TO IMPLEMENT THAT OURSELVES.
MADE THAT REALIZATION AS WELL.
UM, ALSO COMP BONUSES, PERSONNEL KPIS, UM, ALSO JUST, YOU KNOW, CASH MANAGEMENT, REALLY JUST HOW WE OPERATE.
SO I PUT, UH, SEAN DEWAN AND RYAN IN THOSE, AGAIN, WE'RE NOT MARRIED TO IT, BUT THIS IS JUST A START AS WELL.
SO, YOU KNOW, SOMETIMES, UH, WE GET JUST A BIG PROJECT LOADED ON A FRIDAY, AND THEN, YOU KNOW, GOING OUT ON A TUESDAY, I THINK MAYBE HAVING, WELL ONE, MAYBE A COMMITTEE THAT COULD KIND OF SEE HOW WE COULD COMPARE THE BOARD A LITTLE BIT BETTER FOR, UH, YOU KNOW, REVIEW THESE DEALS.
BUT ALSO HAVING, YOU KNOW, TWO OR THREE MEMBERS THAT, YOU KNOW, HAVE, THEY'RE, THEY'RE KIND OF KNOWING ABOUT THE DEAL A LITTLE BIT AHEAD OF TIME.
YOU KNOW, IF WE'RE HAVING ISSUES AT THE CLOSING TABLE, UH, MAYBE I'M NOT GETTING CALLED
LOOK, WE'RE HAVING AN ISSUE ABOUT THIS, THAT THE OTHER THING WE NEED RESOLVE
[01:20:01]
IT.WE CAN'T WAIT, WEIGH IN ON IT.
AND JUST IN ON, JUST, YOU KNOW, THE NEW DEAL.
IF WE GET A POLICY IN PLACE, WHICH WE'RE COMMITTED TO, YOU KNOW, DOES IT BETTER OUR GOALS SO FORTH.
BUT JUST A LITTLE BIT DEEPER UNDERSTANDING ABOUT THE NEW PROJECTS SITTING THEIR DESK.
AND THEN THIS IS THE ONLY ONE I WOULD RECOMMEND, MAYBE A STANDING MEETING, JUST CALL, UH, AS SORT OF A PORTFOLIO COMMITTEE.
UM, I THINK, AND I, WE'RE GONNA BE MAKING A HIRE, I THINK FAIRLY SOON, AARON, CORRECT.
SO MAYBE THAT NEW POSITION COULD MEET WITH THIS, UH, COMMITTEE MAYBE ONCE A MONTH.
LIKE, HOW ARE WE DOING? HEY, DO WE HAVE A DEAL THAT'S WORTH 65 MILLION AND THE DEBT'S ON? IT'S 103.
UH, YOU KNOW, IS THIS SPONSOR ABOUT TO BLOW OUT AND WHAT ARE WE GONNA DO ABOUT IT? HOW'S THE POLICING GOING ON THIS? HEY, WE'VE HAD FOUR FIRES.
WHAT'S THE STORY BEHIND IT? YOU KNOW, THOSE KIND OF CONVERSATIONS, UH, AS WELL.
SO JUST A, A GROUP OF TWO OR THREE THAT REALLY UNDERSTAND, YOU KNOW, JUST KIND OF WHAT'S HAPPENING, UH, AT THAT COMMITTEE LEVEL.
SO I, YOU KNOW, MY THOUGHT WAS PUTTING, I HEAR SEAN AND OLIVER ON, OH, AND ON THE NEW PROJECTS, LESLIE, CLIFF AND JACK AS WELL, UH, ON THE NEW PROJECTS.
AND THEN MY PERSONAL PASSION, I THINK AT THE MOMENT IS STRATEGY AND POLICY.
UH, WHICH, UH, LOOK THE, THE PROGRAM STATEMENTS, YOU KNOW, WHAT IS OUR STANCE, YOU KNOW, KIND OF FORMULATING OUR VISION TO COUNCIL, COUNCIL RELATIONSHIPS.
I THINK THE BIG ONE IS WHAT WE DO, 26 MILLION.
LIKE, YOU KNOW, WHAT IS THAT WORK WITH THE STAFF AND AARON ON WHAT IS OUR STRATEGY TO PRESENT TO THE WORLD? WHAT THE HECK ARE WE DOING WITH THIS WORK? YOU KNOW? AND SO I THINK THAT'S GONNA BE IMPORTANT.
UM, ONE THING, UH, I THINK AARON AND I ARE ABOUT TO DO, WE'RE GONNA BE POTENTIALLY ENGAGING AN ECONOMIST WHO WORKS AT UT SOUTHWEST, UM, TAMMY LEONARD, WHO IS, UH, TERRIFIC TO REALLY DO A GOOD DEEP, I THINK WHAT WE KIND OF REALIZED, HOUSING, D-H-A-P-F-C, ALL THESE ENTITIES, AFFORDABLE HOUSING, THERE'S REALLY NO INITIATIVE TO KIND OF REALLY EVALUATE WHAT ARE AFFORDABLE HOUSING NEEDS RIGHT, IN THE CITY, LIKE, AND PUTTING REAL MONEY BEHIND IT.
AND I THINK THE GROUP THAT ACTUALLY HAS MOST WHEREWITHAL TO SOLVE THIS, LIKE WHEN WE PUT AN AFFORDABLE HOUSING PROJECT IN A LOCATION, WHAT IS THE NEED OF THAT MICRO LOCATION, NOT THE CENSUS TRACK THIS AND THE ZIP CODE AND POVERTY.
LIKE WHAT IS THE, YEAH, WHAT IS THE NEED EXACTLY.
LIKE, AND THEN THIS PERSON CAN TRACK LIKE THE, YOU KNOW, IT CAN ACTUALLY, IT'LL BE VOLUNTARY.
AND THEY WORK THROUGH THE PRIVACY ISSUES OF LIKE, WHAT WERE THEY LIVING BEFORE? WHAT WERE THEY MAKING BEFORE? WHAT WERE THE HEALTH, YOU KNOW, ISSUES.
AND THEY'RE TRACKING OUR TENANTS OVER TIME, REALLY DOING A DEEP DOWN.
I THINK THAT IS KIND OF, I THINK WILL HELP US ARTICULATE THE NEED TO COUNSEL AS WELL.
THAT'S PART OF STRATEGY AND POLICY.
SO THAT BE THAT, UH, YOU KNOW, AND SO I PUT, UH, MYSELF ON IT.
UH, UH, WHO ELSE DID I GO ON? WELL, SO, SORRY, I WANTED YOU, UH, A SHOTGUN WITH ME ON THIS ONE, BUT IF YOU, IF NO ONE WANTS TO SERVE, THAT'S FINE.
YOU KNOW, AND WE'LL THINK THROUGH HOW DO WE MEET? SO NO ONE'S TIME IS BEING TAXED.
AGAIN, THIS IS GONNA BE A WORK IN PROCESS, BUT I THOUGHT THIS IS A GOOD WAY TO SORT OF BREAK OUT, YOU KNOW, THE BOARD TO SORT OF GROUPS, YOU KNOW, A WAY TO KIND OF LEVERAGE ALL THE BACKGROUND AND TALENTS OF EVERYONE ON THIS BOARD, WHICH THEY ARE IMMENSE.
AND LOOK, NO OFFENSE TO PASS, YOU KNOW, PAST PEOPLE I'VE WORKED WITH.
I MEAN, THIS IS THE MOST IMPRESSIVE MENTALITY GROUP, UH, IN THE FIVE YEARS I'VE BEEN ON THIS BOARD.
SO I THINK WE ALL NEED TO HAVE A LITTLE MORE ENGAGEMENT, WHAT'S GOING ON? UM, WHEREAS THE THINGS HIT US AT A MEETING.
MAYBE NOT EVERYONE KNOWS EVERYTHING ABOUT EVERYTHING, BUT THERE ARE SOME THAT KNOW EVERYTHING ABOUT A FEW THINGS THAT ARE GOING ON, YOU KNOW? AND SO I THINK THAT'S PROBABLY A BETTER WAY TO OPERATE.
SO I JUST WANTED TO PRESENT THIS TO EVERYBODY.
YOU DON'T WANNA SAY, HEY, I'M HERE TO MAKE MY VOTE AND GET A FREE LUNCH.
I DON'T WANNA BE ON A COMMITTEE.
SO WE ALL THINK ABOUT HOW WE STRUCTURE THIS.
I KNOW YOU AND I HAVE TALKED ABOUT IT.
I'VE BEEN ON THE EXECUTIVE COMMITTEE UPTOWN DALLAS FOR, UH, 15 OR 20 YEARS.
AND THIS IS THE WAY WE OPERATE.
WE HAVE COMMITTEES, UM, SET UP THAT SPECIALIZED FOLKS,
OH, THERE'S AN EXECUTIVE COMMITTEE THAT, THAT'S MORE OF A STANDING, IT'S THE PRESIDENT, VICE PRESIDENT, TREASURER, AND SECRETARY AS WELL.
AND THAT'S A SENSE OF BOARD ISSUES, JUST STUFF THAT COMES UP.
I THINK THE BUDGET MAYBE STILL RUN BY THE TREASURER, BUT I THINK THE ORGANIZATION COMMITTEE NEEDS TO EVERY, AT LEAST EVERY YEAR RECOMMEND LIKE NEW PERSONNEL WE NEED TO ADD TO THE ASSET MANAGER.
[01:25:01]
I THINK MAYBE A POLICY PERSON, SOME OTHER, LIKE YOU, YOU GUYS ASSESS THAT WORK WITH THE TREASURER.I MEAN, JUST SO EXECUTIVE COMMITTEE KIND OF HIT THAT.
I WOULD SAY THANK YOU DOING THIS.
UH, IT HELPS Y'ALL STAY ENGAGED TOO.
AND AGAIN, TO DAVID'S POINT, THE PC DOES THIS AS WELL.
AND YEAH, PEOPLE CAN PARTICIPATE AS MUCH AS LITTLE AS POSSIBLE.
OBVIOUSLY THERE'S NO EXPECTATION, BUT THE EXTENT THAT YOU CAN SERVE, LET'S, LET'S UTILIZE YOUR, UH, YOUR TALENTS.
WE'RE GROWING AS AN ORGANIZATION.
SO, YOU KNOW, AS YOU'VE SEEN IN THE LAST CALL IT SIX YEARS, WE'VE HAD VERY FEW PROPERTIES.
NOW WE'VE HAD A WHOLE TON OF CONSTRUCTION NOW.
MOVING INTO THIS MORE OPERATION SPACE AS WE CONTINUE TO DO CONSTRUCTION AS YOU SEE TODAY.
UH, SO WE'RE, OUR BASE IS CHANGING A LITTLE BIT.
WE HAVE A LITTLE BIT DIFFERENT NEEDS AND, UH, I THINK WE'RE GONNA HAVE TO LEAN ON FOLKS JUST TO KEEP US RUNNING THE RIGHT DIRECT.
YEAH, AND I JOKE ABOUT HOW IT WAS FIVE YEARS.
WE WERE VERY DORM ORGANIZATION.
AND IF YOU REALLY FACTOR IN HOW MUCH WE'VE DONE IN FIVE YEARS, SPENT 10,000 UNITS HEARD THE DHA, YOU KNOW, MENTIONED, WE'VE BEEN AROUND FOR DECADES.
THEY HAVE 3000 UNITS, 10,000, WE'VE BEEN OUT FIVE YEARS.
SO I, I THINK WE HAVE GROWN A LOT FASTER THAN WE EVER COULD HAVE EXPECTED.
UM, WHICH IS GREAT, YOU KNOW, UM, BUT I THINK HOW WE OPERATE AS A BOARD NEEDS TO HAVE A LITTLE MORE STRUCTURE TOO, UH, AS WELL.
AND SO I THINK THAT WAS KIND OF A REALIZATION I MADE.
NOW THESE, THESE COMMITTEES DON'T VOTE ON ANYTHING THE BEST THAT THEY, THEY ADVISE STAFF.
UM, THE BEST THEY CAN DO IS MAKE A RECOMMENDATION TO THE BOARD.
SO CASE IN POINT, SEAN AND HIS COMMITTEE, YOU KNOW, THEY STUDY KPIS, THEY STUDY METRICS THAT COME IN, HEY, WE RECOMMEND THIS, BUT THE ACTUAL VOTES REALLY STILL HAPPEN AT THIS, AT THIS BOARD.
I THINK YOU DID A GOOD JOB OF IDENTIFYING ALL THE THINGS THAT WE ALL COLLECTIVELY SAY, YEAH, WE REALLY NEED TO DO THAT ONE TO BE THINKING ABOUT IT ONCE WE LEAVE.
SO THIS IS A GREAT WAY TO KEEP THE BRISCOE POLICY STATEMENTS, YOU KNOW, UH, WORKING THROUGH COMP, I WAS LIKE, WAIT A MINUTE.
I LIKE, I KNOW HOW MARCY, LIKE, SHE WAS GREAT, YOU KNOW, AND SHE WAS THE MAGNIFICENT LEADER AS WELL, GIVEN HOW WE STARTED.
I CAN SEE HOW THINGS WERE VERY JUST MORE INFORMAL.
AND SO A LOT OF JUDGMENT CALLS WERE MADE, YOU KNOW, YOU HAVE GROWN SO FAST THAT'S LIKE, WAIT A MINUTE, I'VE KIND OF STEPPED INTO THIS ROLE.
AND I FELT LIKE I HAD SORT OF SAY THE, THE STAR
I MEAN, WE NEED TO LEVERAGE OUR ABILITIES AND INTERESTS.
AND AGAIN, THIS IS JUST THE START.
YOU CAN KIND OF FIGURE IT OUT.
BUT I JUST FEEL LIKE JUST IT APPARENTLY DOES HAVE TO BE VOTED ON.
UH, SEAN ASKED ME, I WAS LIKE, YEAH, NO, THIS IS GOTTA BE VOTED ON.
SO, UH, WE DO HAVE TO VOTE, BUT THERE'S A ONE MORE COMMENT ON, UH, I JUST, UH, WE DON'T, IT DOESN'T HAVE TO INCLUDE THIS FUNCTION OR NOT.
PEOPLE MAY NOT LIKE IT, BUT WHAT I'VE SEEN IN OTHER ORGANIZATIONS, IN ADDITION TO THE HERE, IT'S A, UH, AND I THINK YOU TOUCHED ON IT, IS A FINANCE GRADE THAT'S TYPICALLY HIT BY THE TREASURER.
AND, UH, AND THEY WILL LIKE LOOK AT THE FINANCIALS ON A MONTHLY BASIS.
I I THOUGHT IT WAS JUST EXECUTIVE COMMITTEE FOR THAT.
AND LET THE TREASURER, THE BUDGET HANDLED BETWEEN THEM.
I DID THINK ABOUT THAT, BUT I FELT THAT COULD BE SPLIT.
THOSE ROLES COULD BE SPLIT BETWEEN ORGANIZATION AND EXECUTIVE FOR NOW, IF WE WANNA HIT ON AGAIN, CHANGE IT.
SO BASED ON THIS GUY, I KNOW YOU MENTIONED THAT THESE NO WOULDN WANT TO BE ON.
LET'S SAY I DIDN'T WANNA BE ON COMMITTEE, WHICH I'M HAVING PROBLEMS ON.
I WANT BE ON, OR YOU WANNA BE ON, OR YOU WANNA NEED TWO, I WANNA BE ON TWO.
WHAT IS THE PROCESS WITHIN THAT? OR HOW WOULD THAT WORK? DO WE HAVE TO DO THIS EVERY MONTH? WELL, THIS IS NO, NO, NO, NO.
THIS IS THE EXCEPTION OF THE COMMITTEE.
YOU WOULDN'T HAVE TO VOTE AS TO WHO'S ON THE COMMITTEE.
HEY, THIS IS ACTUALLY A QUESTION I HAVE BECAUSE WHAT, WHERE I'VE SEEN THIS DONE BEFORE IS, AND YOU CAN DO DIFFERENT WAYS.
THE CHAIRS, THE CHAIRS CHAIR APPROVED, YOU KNOW, ANNUALLY, AND THEN YOU DON'T HAVE THE MEMBERS ON THERE BECAUSE THE MEMBERS ARE JUST LIKE RIGHT, MOVING IN AND OUT, RIGHT? JUST KIND OF LIKE ONE OR NOT, YOU KNOW? SO THAT, THAT CAN CHANGE A LOT.
BUT I'M KIND GETTING USED TO LIKE CITY POLITICS AND HOW, BUT YOU KNOW, WHAT I FOUND FASCINATING IS LIKE THESE COMMITTEES THAT THE COUNCIL, YOU KNOW, HAVE, THEY HAVE HHS, FINANCE, WHATEVER, BUT SHOOT, YOU KNOW, IN THE LAST HHS COMMITTEE, IT WAS A VERY DRAMATIC EVENT WHERE EVERYBODY SHOWED, EVERYONE SHOWED THAT BECAUSE THEY WANTED TO TALK ABOUT THESE POLICY STATEMENTS.
IT WAS, IT WAS A HECK OF A MOMENT TO BE COMPLETELY HONEST WITH YOU.
BUT I GUESS WHAT I'M SAYING IS WE CAN KEEP THIS INFORMAL.
[01:30:01]
TO BE PART OF A PARTICULAR ISSUE, LIKE, HEY, WHATEVER, YOU KNOW, I WANNA, WE JUST CAN'T BREAK CORE, OR WE CAN'T MAKE CORE, CAN'T CREATE CORE CREATE CREATE CORE.THAT'S THE ONE THING WE'VE GOTTA BE CAREFUL OF THAT IS WE NEVER DO THAT.
SO IF THE COMMITTEE SAYS, LOOK, WE'RE GONNA DO COMP OR WE'RE GONNA GO TO AN RP PROCESS, WE'RE GONNA DO THIS.
LIKE, IF, LIKE THE CORE COMMITTEE WANTS TO BRING IN ANOTHER FEW PEOPLE TO KIND OF BE A PART OF THAT, THEY CAN DO IT.
I MEAN, DO WE HAVE TO THE COMMITTEE THAT, ARE WE ESTABLISHING THE COMMITTEES, NOT THE MEMBERSHIP? WE CAN, WE CAN AMEND THE RESOLUTION TO SAY THAT THE PRESIDENT CAN APPOINT.
IT'S JUST IN THE CITY COUNCIL.
WE JUST, WE'LL, WE'LL WORK THROUGH IT, YOU KNOW.
DO, UH, DOES ANYONE WANNA MAKE A MOTION WITH THE AMENDMENT THAT RYAN JUST THREW OUT THERE THAT I'LL MOVE.
WE APPROVE THE COMMITTEE STRUCTURE WITH ACTUAL COMMITTEE MEMBERS TO BE APPOINTED AND REMOVED FROM TIME AND SIGNED BY THE PRESIDENT.
I SECOND MOTION? SECOND MATION.
YOU SAY APPOINTED AND REMOVED THAT AT YOUR DISCRETION.
I WOULD SAY MY, MY PRESIDENCY DEPENDS.
I WOULD SAY MY, MY PRESIDENCY DEPENDS ON EVERYONE LIKING ME, YOU KNOW, AND THINKING I'M AT LEAST DOING A HALFWAY CAPABLE JOB.
YEAH, BUT WHOEVER THE BOARD CHAIR IS YEAH.
THE MAYOR DOES MAKE THESE APPOINTMENTS ON TERMS ON COMMITTEE.
BUT WE OF COURSE, HE'S BEEN ELECTED BY WE CAN VOTE FOR.
IF YOU DON'T LIKE, YOU CAN GET RID OF ME.
WHICH DON'T BE VOTE THE MAYOR.
NO, THEY CANNOT VOTE HAPPEN OR THEY VOTE.
UH, I THINK THE VOTE HAPPENED.
YOU WANNA DO IT AGAIN? ALL IN FAVOR SAY AYE.
LET'S GET THROUGH THIS, UH, REVIEW DISCUSSION AND DHFC TREASURER REPORT FOR ONE MONTH PERIOD ENDING, ENDING JANUARY 3RD.
SO THIS IS JUST THE VERY FIRST MONTH THOUGH OF THE YEAR FOR DALLAS HOUSING FINANCE, BUT YOU DID HAVE, UM, CLOSINGS WITHIN THIS MONTH.
SO YOUR CASH AND CASH EQUIVALENTS, UH, HAD ABOUT A, ABOUT A 1.5 INCREASE FROM THE PRIOR MONTH AT THE, UH, JUNE 31ST YEAR.
JUNE 31ST MONTH IN, UH, YOUR TOTAL WAS 26 MILLION, 2 30, 230 6,000.
UH, THE CLOSING WAS SABER VILLAGE, AS YOU MIGHT RECALL, HAD A VARIETY OF FEES WITHIN IT OF JUST OVER 740,000 AS WELL.
THIS IS, UH, THE TIMING FOR TWO ANNUAL LEASE PAYMENTS TO COME IN FROM ACCESS KESSLER IN DOMAIN AND MIDTOWN PARK, WHICH DID COME IN AT UH, 596,000 IN TOTAL.
PLUS THERE WAS A DEVELOPER FEE RECEIVED, UH, OF JUST OVER 90,000.
SO A GOOD MONTH COLLECTION WISE.
TOTAL, UH, CHANGE IN FINANCIAL POSITION DURING THIS MONTH WAS $707,013.
HOW OF OUR CASH, HOW MUCH IS, UH, KING THE BANK AND HOW MUCH IS THE TAX POOL ROUGHLY? I THINK WE HAVE, OUR INITIAL TRANSFER WAS LAST NOVEMBER CALL THAT WAS 22.
I'M TRYING TO SEE IF I, AND I GUESS THEN JUST AS A FOLLOW ON TO THAT, I DON'T NEED TO KNOW THE EXACT NUMBER.
I JUST CURIOUS IS, UM, IS TEXTABLE IT WORKING? BUT YES, IT'S OKAY.
SO YOU HAVEN'T HAD IT, I ASSUME SINCE I WAS LIKE, YEAH, NOT GONE.
WELL WHAT'S THAT? I JUST SEE HOW MUCH INTEREST WE MAKE EVERY MONTH.
[01:35:02]
SO WE HAVE TOWHERE DOES IT SAY THE INTEREST IN THE TREASURER'S REPORT? SEE THAT IT'S DOWN BELOW.
IT'S CONSIDERED NON-OPERATING IN THE GOVERNMENTAL KIND OF FINANCIAL STATEMENT.
SO IT'S IN THE INVESTMENT INCOME OF 85,000 7 53 FOR THE MONTH.
AND THEN, UH, REVIEW AND DISCUSSION OF CORPORATION'S PIPELINE FORECAST.
WE'RE STILL WORKING ON FLOOR INCOME.
FOREST SUPPOSED TO CLOSE THIS MONTH, BUT GONNA BE CLOSED AGAINST MONTH.
BUT 22ND
NO, I MEAN WE, WE REALLY DON'T HAVE ANY, UH, RULES YET.
THE RULES GOT APPROVED ON FRIDAY.
THEY DID GET APPROVED ON FRIDAY.
UM, THERE'S SOME LITTLE THING ABOUT THEM, HOW RENTS ARE GONNA BE DEFINED.
SO NOW OKANA, MY UNDERSTANDING WAS, AND BRAXTON WILL WEIGH IN, FANNIE MAE WAS, IT WAS GONNA BE A FANNIE MAE LOAN THAT WERE GONNA CLOSE WITH FANNIE MAE WAS WAITING FOR THE RULES TO GET FINALIZED FOR THEM TO DETERMINE IF THEY'RE EVER GONNA DO AN H-F-C-T-O WORKFORCE DEAL.
DID I GET THAT RIGHT? PRINT DEFINITION WAS FOR, UH, PROPERTY ALREADY APPROVED BY HFC.
SO SOMETHING NEW MOVING FORWARD THAT, THAT DEFINITION DIDN'T CHANGE.
THEY HAD JUST SOME ISSUES WITH OPTIONAL FEES FOR PREVIOUS DE OKAY.
BUT FOR, OK, IT'S, THERE'S STILL ISSUES WITH THE, THE RENTS AT THE PROPERTY GENERATING A SUBSTITUTE BEING REQUIRED BY H 20.
CAN WE JUST RESTRICT THE ENTIRE, UH, ALL THE UNITS AT, UM, OK THAT'S ANOTHER ISSUE WITH A 21 BECAUSE THERE WOULD BE NO MARKET RENT AT THE PROPERTY.
WELL, THAT MEANT, THAT'S GOOD BECAUSE THEN YOU CAN GO TO COMPS AND YOU CAN PICK THE COMPS THAT YOU WANT.
THAT'S HOW WE NEED TO HANDLE IT.
WE SHOULD HAVE MENTIONED THAT WHEN WATER WE'RE STILL HERE.
NAH, I ALREADY MENTIONED IT TO 'EM, BUT ANYWAYS, THAT'S GONNA BE OUR WORKAROUND.
UH, LIKE THEY PUT THAT SOMETHING TO TOMORROW, IT'S FINE.
YEAH, THAT'S WHAT THEY DIDN'T GET.
IT'S LIKE YOU CAN RESTRICT ALL THE RENTS.
SO YOU GO TO THE COMPS AND YOU PICK THE COMP, YOU GO THCA AND THAT'S GONNA DETERMINE PUBLIC BENEFIT.
SO SLOPPY LAWMAKING, THAT'S ALL I GOTTA SAY, AARON, ON THE PIPELINE, SORRY TO DIVERT FROM OK.
UM, THE TRAVELING HC DEALS IN DISTRICT 10, ANY OF THEM GONNA COME TO US? ARE ANY OF THEM WORTH COMING TO US? UM, I MEAN IT'S A QUAGMIRE.
SO THAT JUST GENERALLY, DAVID HAS HIS NOSE TO THE GROUND ON THIS ONE.
WE'RE, WE'RE TRYING TO FIGURE OUT A STRUCTURE THAT WORKS PLUS A STRATEGY, YOU KNOW, BECAUSE THE PROBLEM ISN'T ONLY THE TRAVELING CAN SEE DEALS.
THE PROBLEM WAS INITIALLY THE, THE DESIGN AND THE BUILDING OF THEM.
IT'S SUCH A CONCENTRATED AREA.
YOU HAVE VERY INEFFICIENT LAND USE AND THEN PAIR THAT WITH YEARS AND YEARS OF PER BIRD MAINTENANCE PROPERTIES THAT ARE AT END OF MUTUAL LIFE.
SO NOW YOU HAVE A BIG, A HUGE POPULATION OF APARTMENT RESIDENCE WITH, FOR LACK OF BETTER, THERE'S NO REAL WAY OUT OF THIS RIGHT NOW FOR THE OWNERSHIP.
THEY'RE GONNA, WE'RE TRYING TO FIGURE OUT THE BEST WAY TO GO IN THERE AND ENACT SOME SORT OF REDEVELOPMENT.
DO WE WAIT FOR THE FORECLOSURE PROCEEDINGS AND TRY GET ON THE BACKEND? THAT WHAT I WILL SAY IS THIS, I'VE HAD NUMEROUS, KATHY, I WENT OVER TO KATHY'S HOUSE.
SO I KIND OF GAVE HER WHAT WAS HAPPENING THAT I SORT OF IMPORTANT WHAT TRAVELING AGENCY WAS.
AND LAKE ISLANDS BEAT OUT THE CITY OF AUSTIN FROM A NUMBER OF TRAVELING AGENCY DEALS.
LIKE MY NEIGHBORHOOD BEAT OUT THE CITY OF AUSTIN FOR TRAVELING.
THAT'S HOW, 'CAUSE ALL THE DEALS, WELL, I MEAN, SHACKLEFORD IS RIGHT HERE ON 75.
LET'S JUST EDIT ANYWAYS, SO, UH, YEAH.
ANYWAYS, SO, BUT THE, THE DEALS ARE IN D 10, MY DISTRICT, I'M THE D 10 APPOINTEE, JUST SHOW Y ALL THAT.
UM, IT FIT THE PROFILE OF WHAT WENT TO TRAVELING HFC DEALS, OLDER STOCK DEALS, BUY AND FLIP, BUY AND FLIP, BUY AND FLIP.
AND WHEN THE RATES WENT UP, YOU KNOW, IN 2022 AND I USED DROP AND THE TRAVELING HFC WAS A BIT OF A, A LIFELINE AS WELL.
BUT THESE DEALS ARE SO DEEPLY DISTRESSED AS WELL.
BUT THERE'S A PARTICULAR CLUSTER OF APARTMENTS HIGHLY CONCENTRATED AT FORCE ELIA, THAT IS BECOMING A PUBLIC SAFETY HAZARD.
I MEAN, AND I MEAN A PUBLIC SAFETY HAZARD, WHEN THESE DEALS GO BAD, IT TURNS INTO A HORRIBLE AREA.
[01:40:01]
ON IT.I BROUGHT IN A SPONSOR, I'VE SUGGESTED A STRUCTURE.
IT COULD POTENTIALLY INVOLVE BONDS, ESSENTIAL BONDS AS WELL INVOLVING THE PFC.
POSSIBLY THE HFC CONTACT IS MADE WITH SOME OF THESE LENDERS.
I WOULD'VE, I THINK SOMETIME DOWN THE ROAD IT'S EITHER GONNA COME, UH, TO THE PFC OR THE HFC OR AN AMALGAMATION OF BOTH.
SO YES, ANY OF THEM FACT IMPORTANT BONDS NOT, YES, THEY ARE AT THE RIGHT PRICE AT THE BASIS, BUT WE'RE TALKING NOW 40 A DOOR THAT'S BEING TRADED.
SO HOW MUCH WILL THEY WANT TO INVEST IN 40 OR 50? YEAH, THAT'S WHAT THE, THAT'S WHAT, WHAT CAN WE DO AND WHAT SHOULD WE DO AND WHAT, WHAT NEEDED TO HAPPEN.
THESE, THE INVESTORS, UH, SO THE DALLAS APPRAISAL DISTRICT REVOKED ALL THE EXEMPTIONS IN DECEMBER.
AND SO WHEN I TOLD KATHY, I SAID, LOOK, HE'S JUST SUPPORTIVE OF IT.
I SAID, YES, BUT THAT'S GOING TO PUT ALL THE FORECLOSURES IN ONE CADENCE AT ONE AREA.
SO I MEAN, LIKE TWO OR THREE FORECLOSURES HAPPEN AT THAT INTERSECTION JUST IN THE LAST TWO WEEKS BECAUSE IT'S ALL HAPPENING AT THE SAME TIME.
AND NOW ALL THESE PROPERTIES ARE ENTERING INTO A ZOMBIE STATE AS WELL.
AND SO NOW THAT'S WHAT'S LEADING TO IT, UH, SAFETY HAZARD.
SO, BUT TO ANSWER YOUR QUESTION, YEAH.
AND IT'S A LOT OF UNANSWERED QUESTIONS, BUT, UM, BE WORKED ON AND YEAH, I THINK OUR ORGANIZATION WILL HAVE A ROLE.
I EVEN IF WE NEED TO MAKE AN EQUITY THAT MAKES DEALS, IT'S A POSSIBILITY IT COULD HAPPEN WITH BONDS.
WE'RE WORKING ON, I DON'T KNOW EXACTLY WHAT STRUCTURAL, YOU COULD DO A CENTRAL BOND FUNCTION THEN, BUT WE CAN'T ACTUALLY, WE CAN HAVE IT.
WE SOCIAL, THE P THE P THE PSC CAN DO AN ACQUISITION IF IT'S SUPPORTED BY BONDS.
IT IS NOW, UH, I'M JUST GONNA END THIS THING.