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[ Dallas Housing Finance Corporation on June 9, 2026.]
YES, MA'AM.SORRY, WE HAD YOU, YOU GUYS ON MUTE, BUT WE'RE DOING ROLL CALL.
PRESENT PRESIDENT DAVID ELLIS.
PRESENT DIRECTOR CLIFF PRESENT.
LET'S JUST GO ON, UH, TO PAULO COMMENT.
OH, MY ARMS, WE'RE GONNA CUT ITEM THREE, PUBLIC COMMENTS ON AGENDA ITEMS, UH, FOUR THROUGH 11.
ARE THERE ANY PUBLIC COMMENTS? YEAH.
WE'RE GONNA OFF SCRIPT A A LITTLE BIT.
I'M JUST GONNA PASS THE FLOOR TO, UH, LESLIE.
SHE'S JUST GONNA MAKE A, UH, LITTLE INTRODUCTION FOR US, OR A DIRECTOR.
I KNOW THIS POINT OF PERSONAL PRIVILEGE.
I JUST WANTED TO INTRODUCE EVERYONE TO OUR SUMMER INTERN WITH THE SOUTH RHYTHM BUTLER.
SHE IS A SENIOR AT UNIVERSITY OF TEXAS OF ARLINGTON, UM, STUDYING BROADCASTING AND JOURNALISM, AND SHE'S HELPING OUR ORGANIZATION WITH SOCIAL MEDIA AND OUR, UM, OUR FIFTH ANNIVERSARY CAMPAIGN THIS YEAR.
UM, SO SUPER EXCITED TO HAVE HER, BUT REALLY WANTED TO HIGHLIGHT THE, THE DALLAS'S HOUSING COALITION.
THIS IS THEIR FIRST YEAR DUE A SUMMER INTERNSHIP PROGRAM TO, UM, MATCH HOUSING ORGANIZATIONS, UH, WITH INTERNS IN THE AREA.
AND SO FOR THOSE OF YOU WHO ARE IN THE HOUSING SPACE AND ARE INTERESTED IN HAVING AN INTERN, I YOU TO DO IT NEXT YEAR, THERE WERE 30 ORGANIZATIONS INCLUDING HABITAT, UNITED BAY, MY LITTLE NONPROFIT IN, UH, SO WE'RE HAVING THEM WITH US FOR THE SUMMER.
ITEM NUMBER FOUR, APPROVAL OF MINUTES FOR THE MAY 12TH, 2026, CITY OF DALLAS HOUSING FINANCE CORPORATION MEETING.
HAS EVERYONE REVIEWED THE MINUTES? AND DOES ANYONE HAVE ANY COMMENTS? UM, I HAVE COMMENTS.
DO WE NEED A MOTION FIRST TO, UH, UH, HAVE IT BEFORE THE AUDIT BEFORE MY COMMENTS? SOUNDS REASONABLE.
I, DIRECTOR MOORE, UH, AND SO WHO JUST SECOND ME.
AND, UH, VICE PRESIDENT, UH, ALLEN.
I THINK THE TECHNICALLY WAY THE MEETINGS, UH, WENT LAST TIME WAS I OPENED THE MEETING, DID, AND GOT HANDED OVER TO YOU AT SOME POINT.
SO I DON'T KNOW IF WE HAVE A, I THINK I NEED TO RECORD.
I LOOKED AT, I LOOKED AT THAT.
I THINK WE HAVE NEED THOSE TWO.
UH, MY DUTIES NEXT TO MY NAME.
UH, THEY CAME 'CAUSE I CAME LATE.
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REFERENCED THAT.UH, SECRETARY PAGE CONVENED THE MEETING AND I CAME IN AND, WHICH, WHICH AGENDA ITEM? IT WAS, IT WAS DURING THE TORRINGTON FOR AT THE TAIL END.
SO LET'S JUST KIND OF MAKE THAT ADJUSTMENT.
ALL IN FAVOR? ALL IN FAVOR SAY AYE.
ALL ITEM NUMBER FIVE, RESOLUTION RELATING TO THE RENEWAL OF THE CORPORATION'S PARTICIPATION IN THE SINGLE FAMILY HOME MORTGAGE PROGRAM.
I APPROVING AN ASSIGNMENT AGREEMENT WITH THE DHCA AUTHORIZING T-D-H-C-A TO ISSUED BONDS FOR THE PURCHASE OF OBTAINING FUNDS TO FINANCE HOME MORTGAGE LOANS FOR PERSONS OF LOW AND MODERATE INCOME.
AND B, CONSIDER AND ADOPT A RESOLUTION APPROVING APPLICATION, TEXAS BOND REVIEW BOARD FOR A SINGLE FAMILY PRIVATE ACTIVITY BOND ALLOCATION IN AN AMOUNT UP TO 65 MILLION AND APPROVING ALL OTHER MATTERS IN CONNECTION THEREWITH, RIGHT.
SO JUST TO PREFACE THIS, WE'VE DONE THIS NOW FOR FOUR YEARS.
UH, WE WITH T-D-H-C-A AND WE HAVE PARTNERED WITH T-D-H-C-A IN THE LAST SEVERAL YEARS, AND WE ASSIGNED A PORTION OF OUR VOLUME CAP TO THEM, AND, AND THEY IN TURN, UH, UTILIZE IT FOR A SINGLE FAMILY HOME MORTGAGE PROGRAM.
SO WE HAVE MR. SCOTT FLETCHER HERE WHO RUNS THIS PROGRAM, AND, UH, HE'S HERE TO KIND OF BRIEF US ON, ON HOW TO DO THAT.
I'M THE, UH, DEPUTY EXECUTIVE DIRECTOR OF HOUSING FINANCE FOR THE TEXAS DEPARTMENT OF HOUSING COMMUNITY AFFAIRS.
UH, I REALLY WANNA THANK, THANK YOU FOR PARTICIPATION IN THIS PROGRAM.
A LOT LIKE THE 2225 PROGRAM, UH, UH, THAT DALLAS HAS PARTICIPATED IN, UH, EACH OF THOSE YEARS.
AND I KNOW MOST OF YOU'RE FAMILIAR WITH THE PROGRAM, THE RATIONALE BEHIND VOLUME CAP ASSIGNMENTS.
UH, BUT AS A BRIEF REFRESHER, UH, THE PARTNERSHIP PROGRAM, UH, ALLOWS, UH, DALLAS HOUSING FINANCES CORPORATION TO PUT ITS VOLUME, SINGLE BAND VOLUME CAP, UH, TO WORK GLOBALLY THROUGH, UH, TDHC, A STATEWIDE MORTGAGE FOR BOND PROGRAM AND OUR HOME OWNERSHIP PLATFORM.
UH, RATHER THAN ALLOWING THAT UNUSED VOLUME CAP TO BE REALLOCATED ELSEWHERE IN THE STATE, DALLAS CAN LEVERAGE, UH, DHCA ESTABLISHED INFRASTRUCTURE TO PROVIDE AFFORDABLE, UH, MORTGAGE FINANCING AND DOWN PAYMENT ASSISTANCE TO LOCAL HOME BUYERS WHILE GENERATING ONGOING REVENUE STREAM FOR THE HC.
UH, T-D-H-C-A ADMINISTERS THE PROGRAM FROM END TO END, INCLUDING BOND ISSUANCE, COMPLIANCE, LENDER MANAGEMENT, UH, AND REPORTING, UH, CREATING NO OPERATIONAL BURDEN, FINANCIAL LIABILITY FOR ACCOUNT HC I'M GONNA BOUNCE FORWARD A COUPLE SLIDES HERE TO SLIDE FIVE.
UM, UH, AND THIS IS REALLY JUST KIND OF TALKING ABOUT THE SCALE.
UM, UH, OVER THE PAST YEAR, UH, OUR PROGRAM HAS, UH, SUPPORTED MORE THAN ONE 3 BILLION IN HOME OWNERSHIP ACROSS THE STATE, UH, PROVIDING, UH, APPROXIMATELY 45 MILLION IN DOWN PAYMENT ASSISTANCE AND HELPING MORE 5,500 FAMILIES, UH, IN TEXAS PURCHASE HOMES.
UH, WE COME TO MARKET ABOUT FOUR, THREE OR FOUR TIMES A YEAR.
UH, AND, UH, OUR BOND PROGRAMS ARE STRONG, UH, STRONG PARITY RATIOS, UH, AND WITH NEARLY 4 BILLION IN ASSETS IN HIGH INVESTMENT GRADE, UH, RATINGS, UH, FROM SP.
UM, BUT LOOKING SPECIFICALLY AT DALLAS, SINCE JANUARY 20, 25, 5, UM, ACTUALLY THIS IS 4 20 25, UH, WE DID 125, UH, LOANS IN TEXAS, OR IN, SORRY, IN DALLAS COUNTY.
THIS JURISDICTION, UH, REPRESENTING ABOUT 32 MILLION IN MORTGAGE FINANCING.
UM, AVERAGE BORROWER INCOME WAS AROUND 64,500, UH, DOLLARS A YEAR.
UM, AVERAGE PURCHASE PRICE HERE IS AROUND $270,000, UH, WHICH IS HIGHER THAN OUR, OUR AVERAGE, UH, BORROWER, ACTUALLY, WE'RE RIGHT AROUND 2 25, 2 30, TYPICALLY ACROSS THE STATE.
UH, AND NEARLY 80% OF THE BORROWERS, UH, THAT WE SERVED HERE IN DALLAS WERE, UH, UM, LAST YEAR.
UH, WE ORIGINATED, UM, AGAIN, ABOUT 32 MILLION IN LOANS IN DALLAS HFC JURISDICTION.
UM, UH, SINCE 2022, DALLAS, HFC HAS ASSIGNED $211 MILLION OF VOLUME CAP TO T-D-H-C-A TO DATE.
UH, WE HAVE UTILIZE APPROXIMATELY 70% OF THOSE FUNDS, UM, AND WE ARE ONLY NOW BEGINNING TO LEND, UH, AGAINST LAST YEAR'S ASSESSMENT.
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UM, NOT GONNA LIE, NOT SATISFIED WITH THE PRODUCTION LEVEL THAT WE'VE HAD HERE.UM, AND THAT SAID, UH, VOLUME CAP IS, UH, REMAINS AVAILABLE AND, AND, UH, HAS A THREE YEAR EXPIRATION DATE.
AND WE'VE BEEN, WE'VE BEEN MAKING SOME SIGNIFICANT INVESTMENTS TO IMPROVE THE UTILIZATION, WHICH WE'LL DISCUSS MORE IN A MOMENT.
UM, AS I'LL COVER SHORTLY, UH, TDHC IS SIGNIFICANT REVENUES AND RESOURCE SIGNIFICANT RESOURCES, EXCUSE ME, TO, UH, INCREASING LOAN PRODUCTION.
UM, AND, UM, YOU KNOW, WE WERE ABLE TO GET THE 65 MILLION, UH, FOR THIS YEAR.
WE WOULD ANTICIPATE THERE'LL BE APPROXIMATELY 247 HOUSEHOLDS IN, IN DALLAS, UH, AND PROVIDE MORE THAN 2.2 MILLION IN DOWN PAYMENT ASSISTANCE.
UM, THE PARTNERSHIPS, UH, ARE TRULY, UH, THE LIFEBLOOD OF OUR, OUR PROGRAMS. UM, T-D-H-C-A, AS I SAID, ISSUES ABOUT, UH, UTILIZING ABOUT 1.3 BILLION A YEAR IN VOLUME CAP.
UH, OUR ANNUAL, UH, ASSIGNMENT OF VOLUME CAP, UH, IS AROUND FOUR YEAR, 4 30, 4 30 MILLION THIS YEAR.
SO YOU CAN SEE THE IMPORTANCE OF HAVING THESE PARTNERSHIPS WITH AGENCIES ACROSS THE STATE.
UH, WE JUST WOULD NOT HAVE FUNDS AVAILABLE TO DO, UH, TO DO WHAT WE DO.
UM, AND, UM, ELIGIBLE BORROWERS CAN ARE ABLE TO ACCESS LOW MARKET, UH, FIXED RATE MORTGAGE LOANS, DOWN PAYMENT ASSISTANCE UP TO 5%, AND, UH, MORTGAGE CREDIT CERTIFICATES, WHICH PROVIDE, UM, ONGOING FEDERAL TAX CREDIT.
UH, TOGETHER THESE TOOLS MAKE HOME OWNERSHIP MORE AFFORDABLE AND MORE SUSTAINABLE FOR FIRST TIME HOME BUYERS AND QUALIFIED VETERANS.
AND I WANNA SPEND A LITTLE BIT OF TIME, UH, FOCUSING ON THE, THE FOR MARKETING EFFORT.
IF YOU GO TO SLIDE 12, UH, SORRY, THAT'S CONFUSING,
UM, SO WE'VE MADE A SIGNIFICANT INVESTMENT IN GROW, IN GROWING OUR, UH, UTILIZATION AND ENSURING THAT VOLUME CAP IS CONVERTED BELOW.
UH, WE'VE COMMITTED APPROXIMATELY $1 MILLION ANNUALLY, UH, TO MARKETING AND OUTREACH.
UH, WE'VE ENGAGED A PROFESSIONAL MARKETING FIRM.
UH, WE DID THAT ABOUT A YEAR AGO.
UM, AND WE'RE FINALLY STARTING TO SEE, STARTING TO SEE SOME FRUITS, UH, OF THAT INVESTMENT.
UM, WE'VE EXTENDED EXPANDED OUR INTERNAL MARKETING AND BUSINESS DEVELOPMENT TEAMS. UH, WE'VE LAUNCHED, UH, NEW TECHNOLOGY TOOLS, INCLUDING A LENDER PORTAL, UH, TO IMPROVE LENDER ENGAGEMENT AND BORROW ACCESS.
AND IF WE CAN BORROW YOUR, UH, YOUR INTERN, UH, WE PEOPLE
WE'VE GOT A PRETTY GOOD BUDGET FOR THAT, THAT, UM, BOTH DALLAS AND THE, UH, AREAS.
UM, THE, UH, UM, YOU KNOW, UH, STATEWIDE MARKETING, WE WANNA WORK DIRECTLY, UH, WITH DALLAS, HHC, UM, AND WE TRY AND MAKE THIS AS HANDS OFF AS WE CAN, BUT WE ALSO RECOGNIZE NO ONE KNOWS YOUR COMMUNITY BUT YOU, UM, WE WANNA WORK, UH, HAND IN HAND WITH YOU TO DEVELOP, UH, TARGETED CO-BRANDED MARKETING CAMPAIGNS, LENDER OUTREACH, UH, REALTOR ENGAGEMENT, HOME BUYER EDUCATION EFFORTS, TAILORED SPECIFICALLY TO THE DALLAS MARKET.
WE JUST WANNA GENERATE GREATER AWARENESS, UH, UM, FIND MORE QUALIFIED BUYERS, INCREASE, UH, LENDER PARTICIPATION, AND ULTIMATELY, UH, REACH OUR GOAL OF HAVING, UH, MORE FAMILIES IN DALLAS, UH, ACHIEVING HOME OWNERSHIP.
UM, I'M GONNA BACKTRACK A LITTLE BIT.
UM, I'D LIKE TO HIGHLIGHT THIS SLIDE BECAUSE IT, IT ACTUALLY, UH, SHOWS WHO WE SERVE.
UM, FAMILIES BENEFITING THIS PROGRAM ARE REALLY THE PEOPLE WHO KEEP OUR COMMUNITIES RUNNING EVERY DAY.
UH, TEACHERS, NURSES, FIREFIGHTERS, POLICE OFFICERS, MEDICAL ASSISTANTS, LIBRARIANS, AND OTHER ESSENTIAL WORKERS, UH, STATEWIDE, 86% OF TDHC BORROWERS ARE LESS THAN 80% OF THE AREA IN THE AREA MEETING INCOME, DEMONSTRATING THAT THESE RESOURCES ARE REACHING, UH, THE FAMILIES, UH, THEIR ACTIVITIES SERVED.
UH, AND THIS ONE IS ENTIRELY OPTIONAL.
UH, MOVING TO SLIDE, UH, 11, SORRY,
UH, BUT WE'VE FOUND THAT, UM, HFC, UH, GIFT FUNDS CONVENIENTLY, UH, INCREASE PROGRAM, UH, PARTICIPATION, UH, CAPITAL AREA OF HFC IN THE, IN THE AUSTIN AREA.
OBVIOUSLY, UH, DESPITE OPERATING A VERY HIGH PRICED, UH, HOUSING MARKET, HAS HISTORICALLY PROVIDED ADDITIONAL GIFT, UH, GIFT FUNDS, AND, UH, CONSISTENTLY ACHIEVED, UH, PROBABLY STRONG PRODUCTIONAL.
WE'VE, UH, WE HAVE CONSISTENTLY, FULLY UTILIZING THROUGH THE, UH, UH, HFC ASSIGNMENT PROGRAM.
I'VE GOT YOU ALL
UM, THE PARTNERSHIP, UM, ALSO PROVIDES A HIGH LEVEL OF TRANSPARENCY AND ACCOUNTABILITY.
UM, YOU'LL, YOU'LL RECEIVE A QUARTERLY, UH, REPORTING ON VOLUME CAP, UNPRODUCTIVE GRAPHICS, LENDER ACTIVITY, AND FEES EARNED THROUGH THE PROGRAM.
UH, WE'VE ALSO ENHANCED THESE REPORTS TO MAKE THEM BOARD READY,
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UH, AND PROVIDE A CLEAR VIEW OF PROGRAM PERFORMANCE, COMMUNITY IMPACT IN CLOSING, UH, DEMAND FOR TD HCAS HOME OWNERSHIP PROGRAMS, UH, GENUINELY CONTINUES TO EXCEED, UH, OUR VOLUME CAP BY, BY A LARGE MARGIN, UH, THE PARTNERSHIP, UH, CLOUD DALLAS, KEEP IT BUYING PLATFORM, BE LOCALLY, UH, EXPAND ACCESS TO AFFORDABLE HOME OWNERSHIP, GENERATE REVENUE FOR THE HFC, LEVERAGE TO HC EXPECT STATEWIDE PLATFORM.UM, I WANNA ANSWER ANY QUESTIONS YOU MAY HAVE, BUT I TRULY APPRECIATE, UH, YOU GUYS, UH, PUTTING ME ON THE AGENDA TODAY, UH, AND FOR TAKING YOUR TIME AND
UM, YEAH, MR. FLETCHER, UH, THANKS FOR COMING UP DURING I MAKE THIS PRESENTATION, UM, REALLY LIKE THIS PROGRAM.
UM, I DON'T THINK I WAS, I THINK I WAS AT ABSENT BOARD MEETING LAST YEAR WHEN THIS CAME UP, BUT YEAR BEFORE, I THINK WE TOUCHED ON IT.
UM, AND I'VE SEEN IN THE NUMBERS NOW, IF I COMPARE THE 65 MILLION SINCE I, WITH WHAT THE UTILIZATION HAS BEEN OVER THE LAST, UH, YEAR PLUS PERIOD, THERE'S A HUGE GAP THERE.
AND SO I WANNA UNDERSTAND, THIS IS SOMETHING I BROUGHT UP TWO YEARS AGO, HOW, HOW WE CAN, UH, INCREASE UTILIZATION.
I SEE YOU SAYING THAT STATEWIDE DEMAND, UM, EXCEEDS THE ANNUAL BOND CAP ALLOCATION, BUT HERE IN DALLAS, FOR WHATEVER REASON, IT'S NOT.
DO YOU, CAN YOU, DO YOU HAVE ANY INSIGHT AS TO WHAT'S GOING ON HERE? AND, YOU KNOW, IT'S, I, I THINK IT'S WHAT WE HAVE FOUND, UM, YOU KNOW, WE WERE IN A PLACE WHERE, UM, WE HAD SUCH STRONG DEMAND THAT WE WERE JUST RUNNING, UM, WELL ABOVE ALL OF OUR, UH, UH, ALLOCATION.
WE WERE MAXING OUT WITH EVERYONE EVERY YEAR.
UM, AND THEN IN
WE HAD UNCERTAINTY ELECTION, WE HAD 25 OVER, UH, A LOT OF UNCERTAINTY THAT KIND OF WENT THROUGH THAT, UH, LATE MID TO LATE 24 INTO EARLY 25.
I FEEL LIKE WE'VE TURNED THE CORNER NOW.
UH, WE'RE STARTING TO SEE REALLY STRONG VOLUMES, UH, YEAR TO DATE.
UM, IN DALLAS, WE'VE DONE 30 MILLION, UM, AND, UM, WE'RE SEEING THAT RAMP UP EVERY DAY.
BUT I THINK THE KEY, AND WHAT I, WHAT I REALLY HAVE MY LEADERSHIP TEAM FOCUSED ON IN OUR MARKETING FOLKS IS, UM, WE WANNA CREATE THE, THE
WE NEED A ADDITIONAL LENDER OPPORTUNITY IN THE DALLAS MARKET, ADDITIONAL OUTREACH TO REALTORS IN THE DALLAS MARKET, AND JUST REALLY MAKE SURE THAT WE'VE GOT THE AWARENESS OF THE PROGRAM.
UM, AND SO THAT'S, UH, ON THE AGENDA OF MY HOME OWNERSHIP TEAM.
UM, AND WE REALLY DO ANTICIPATE WITH THE, WE'VE SEEN STRONGER VOLUME BOARD, UM, UH, AND, UH, IT IS ME, THIS IS KIND OF ONE OF THE MARKETS THAT I FEEL LIKE WE SHOULD BE DOING SO MUCH MORE VOLUME, HAVING SO MUCH MORE IMPACT.
WE SHOULD BE RUNNING OUT OF FUNDS ON THE STEEL EVERY SINGLE YEAR.
SO I'VE GOT MY, MY HOME OWNERSHIP TEAM DOUBLING EFFORTS TO, TO DO THAT.
THE INVESTMENTS THAT WE'VE MADE IN MARKETING, UM, ARE START, LIKE I SAID, WE'RE FINALLY STARTING TO SEE THOSE TAKE HOLD, UM, AND REALLY SEEING THEIR VOLUMES INCREASE, UH, ACROSS THE STATE.
BUT WE WANNA HAVE IN DALLAS OPEN SEPARATE AS WELL.
AND, YOU KNOW, KIND OF ON, ON THAT POINT, UM, GIVEN THE FACT THAT, YOU KNOW, THE FUNDS DEPLOYED HAVE BEEN, YOU KNOW, PRESUMABLY SIGNIFICANTLY BELOW, WHAT BEEN, UM, YOU KNOW, KIND OF, UH, YOU KNOW, REALLOCATING BACK TO, TO YOU GUYS, IS THERE, IS THERE ANY RECOURSE THERE? CAN WE EP DEPLOY THAT MONEY? OR IS THAT MONEY GOING ELSEWHERE IN THIS? IS IT, IS IT GOING OUTSIDE? YOU KNOW, WE'RE SENDING THAT ASIDE.
IS IT GOING TO LAREDO OR, YOU KNOW, THAT'S A GREAT QUESTION.
SO, UM, UH, THE, THE STATE OF, OF TEXAS, GOING BACK TO THE 1986 AND FEDERAL TAX BOND FOR THE CREATION OF PRIVATE ACTIVITY, UH, VOLUME CAP, UM, OBVIOUSLY THE STATE OF TEXAS GETS A FAIRLY LARGE, UH, AMOUNT OF MONEY EACH YEARED IN MONEY CAP FROM THE FEDERAL GOVERNMENT.
UM, AND THEN THAT'S ALLOCATED, UM, UH, IT, UH, FOR THE SUB, THE SUBE ONE IS MORTGAGE REVENUE BONDS.
UM, AND BASICALLY WHAT HAPPENS WITH THAT SUB, IF YOU DON'T RESERVE THAT, UM, IT WILL JUST GO INTO MM-HMM
RIGHT? AND THE VOLUME CAP IS ACTUALLY GOOD FOR THREE YEARS.
SO IN RESERVING THAT VOLUME CAP, WE HAVE THREE YEARS TO SPEND IT.
WE ARE, WE'RE ALREADY SPENDING, UH, 20, I THINK WE'RE IN 24, UH, LATE 24, UH, VOLUME CAP ALREADY ON OUR, OUR VOLUME CAP THAT WE BUILT.
BUT WHAT WE DO WITH VOLUME CAP, WE BASICALLY DISAPPEAR MARKET.
SO WE, ON OUR RECORDS RIGHT NOW, WE SHOW YOU HAVE $211 MILLION THAT YOU'VE ALLOCATED TO US.
IF YOU DO ANOTHER ALLOCATION, WE'LL ADD THAT TO THAT.
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OF THAT, WE CONTINUE TO MAKE LOANS IN DALLAS, WE DON'T LOOK AT EARMARKED, AND WE WILL TAKE, WE'LL MANAGE THE THREE YEAR, UH, RISK ON THAT, UM, BY USING IT ELSEWHERE.BUT WE ALWAYS HAVE THAT EARMARKED TO GO BACK TO DALLAS.
SO WE'LL ALWAYS HAVE
SO WE'VE GOT THIS KIND OF LIKE THIS BUILDUP OF UNDERUTILIZED FUNDS.
AND SO IF YOU TAKE THAT AGAINST WHAT'S BEEN DEPLOYED OVER THE LAST 14, 14 MONTHS, IT SOUNDS LIKE IF WE WANT TO, YOU KNOW, IF WE'RE GOING TO USE THAT MONEY, WE GOTTA LIKE REALLY, REALLY RAMP UP, UH, PRODUCTION HERE.
AND LIKE HOW DO, HOW DO WE DO THAT? YEAH.
YOU KNOW, AND, AND, AND IT, IT REALLY DOES COME DOWN TO, TO LEDGER OUTREACH.
IT COMES OUT, IT COMES DOWN TO, UM, YOU KNOW, WE'RE, WE'RE CONTINUALLY MAKING PROGRAM ENHANCEMENTS.
UM, BUT AT THE END OF THE DAY, FOR ME, THIS IS REALLY, IT REALLY IS DRIVEN BY, UH, UNDER OUTREACH, HAVING PEOPLE BE ABLE, IT'S REALLY ABOUT AWARENESS.
UM, YOU KNOW, IF YOU THINK ABOUT WE'VE DONE 20 MILLION YEAR TO DATE, UM, THAT WAS AS OF CALL IT END, END OF MAY.
UM, YOU KNOW, WE'RE ON TRACK TO DO 40 TO 50 MILLION THIS YEAR, WHICH IS GETTING CLOSER TO THAT, THAT, THAT NUMBER.
BUT WITH THE ADDITIONAL, UH, MARKETING EFFORTS THAT WE'RE PUTTING IN PLACE, UM, I'M PRETTY CONFIDENT THAT WE'RE GONNA BE ABLE TO, TO WRAP THAT UP.
UM, AND AGAIN, YOU KNOW, IT'S NOT LIKE, UM, IF YOU DON'T DO THE ASSIGNMENT OR SAY, YOU SAID WE'RE GONNA DO 40 THIS YEAR, THE 25 THAT YOU DID RESERVE FOR SINGLE FAMILY, UNLESS YOU'RE GONNA DO AN MCC PROGRAM OR HAVE YOUR OWN, UH, RESPOND PROGRAM, UM, UH, IT BASICALLY JUST GOES TO THE POOL, RIGHT? AT LEAST THIS WAY WE YEAR MARK THAT, THOSE DOLLARS FOR DALLAS, ONCE WE KIND OF CATCH UP, THEN WE MAKE SURE THAT HERE, IS THIS UNDER UTILIZATION OF DALLAS SPECIFIC PROBLEM, OR IS THIS COMMON IN OTHER URBAN AREAS UP THE MARKET? UM, CHALLENGE, UM, YOU KNOW, WE SEE IT.
UM, UH, YOU KNOW, THE, THE INTERESTING THING IS I LOOK AT THIS DATA, UM, YOU KNOW, $270,000, UM, THINK ABOUT AFFORDABILITY AND YOU THINK ABOUT THE PEOPLE THAT WE'RE SERVING.
UM, AND WE SEE THIS IN CERTAIN, UH, SUBURBS OF DALLAS AS WELL.
UH, WE SEE IT IN ARLINGTON, WE SEE IT, UM, IT'S IN, UH, AUSTIN AREA WHERE YOU JUST GET LOWER UTILIZATION RATES, PRIMARILY BECAUSE THERE'S FEWER PEOPLE THAT CAN ACTUALLY QUALIFY, UH, AND AFFORD HOME.
UM, AND THIS JUST AS MUCH AS, AS IMPORTANT AS I THINK THIS PROGRAM IS, IT ONLY MOVES THAT NEEDLE A LITTLE BIT.
IT'S, HOME OWNERSHIP IS STILL EXTREMELY CHALLENGING FOR A LOT OF FAMILIES.
UM, AND SO I THINK IT A LITTLE BIT HAS TO DO WITH THE OVERALL PRICING, UM, IN THE MARKETPLACE.
UM, OBVIOUSLY HIGHER DALLAS, HIGHER, UM, IN AUSTIN.
UM, BUT IT, TO ME, IT'S ALSO ABOUT OUR MARKETING EFFORT.
AND SO THERE IS NO REASON THAT WE CAN'T BE UTILIZING $65 MILLION A YEAR, A HUNDRED MILLION DOLLARS A YEAR, MAKING A HUNDRED MILLION DOLLARS A YEAR LOANS AND
WANNA GIVE OTHER PEOPLE OPPORTUNITY, ASK SOME QUESTIONS HERE? I, I WOULD, I WOULD JUST ADD, UH, AND SCOTT DOESN'T EVEN KNOW THIS, IT'S JUST ONE OF THE MANY PROJECTS WE HAVE GOING ON IN THE BACKGROUND AS WE STEP UP AND THIS, THIS TRAIN MOVING ON THE SAME TRACKS HERE.
UM, BUT WE ARE WORKING ON THE MARKETING PROGRAM FOR OUR ENTIRE CORPORATION, AND THIS IS SOMETHING THAT WE'VE, UH, CONTEMPLATED PUT IT ON OUR WEBSITE, AND WE DOUBLING MORE EFFORTS TO PROMOTE OURSELVES MORE.
SO HOPEFULLY WE CAN AGAIN, WORK TOGETHER ON THAT.
SO WHEN, WHEN YOU TALK ABOUT MARKETING, ARE YOU MARKETING TO LENDERS SO THAT THEY KNOW TO OFFER THE PROGRAM TO BUYERS? OR ARE YOU MARKETING TO BUYERS SO THAT THEY KNOW THEY MIGHT QUALIFY TO OWN WHERE THEY OTHERWISE MIGHT NOT EVEN BE IN THE MARKET? SO IT'S A LITTLE BIT, IT'S A LITTLE BIT BOTH.
IF YOU KIND OF THINK ABOUT THE, THE, HOW WEIRD MARKETING ENROLLERS ARE GONNA GO, THE FAR ONE LENDER IS WORTH, UH, HAVING ONE LENDER IN YOUR PROGRAM IS WORTH REACHING OUT TO 50 BORROWERS.
UM, HAVING REALTORS LIKE REACHING OUT TO 20 BORROWERS.
AND SO, YOU KNOW, IF WE REALLY WANNA INVEST OUR DOLLARS, UM, UH, RATHER THAN, UM, WITH THAT LENDER COMMUNITY, WITH THAT REALTOR COMMUNITY, WE DO HAVE SOME GENERAL AWARENESS, UM, ACTIVITIES THAT ARE GOING ON AS WELL.
UM, WE'RE ACTUALLY SPENDING ABOUT $40,000 A MONTH ON GOOGLE ADS TO TARGET END USER AS WELL.
UM, SO IT'S KIND OF ALL OF THE ABOVE.
UM, I THINK THAT WHEN YOU LOOK AT THE BEST SPEND ON THOSE DOLLARS, IT'S PROBABLY IN THE LENDERS AND HAVING THAT LETTER AWARENESS, BECAUSE THEY MAY HAVE SOMETHING THAT COMES AND, AND THEY MAY SAY, OR THE REALTOR MAY PRESENT SOMEONE IN, THEY'RE LIKE, THIS PERSON DOESN'T QUALIFY FOR THIS, BUT THEY WOULD QUALIFY FOR ONE THESE, RIGHT? UM, SO WHERE THEY WOULDN'T TRADITIONALLY QUALIFY HAVING THIS IN THEIR BACK POCKET, THEY SEE THOSE OPPORTUNITIES, UM, THAT THEY'LL PRESENT THEM AND, AND UTILIZE IN FOUR MODEL.
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I, IF A REALTOR OR AN AGENT PUTS IN A PROFILE A BUYER, DOES IT SHOW UP AS AN OPPORTUNITY FOR THEM? OR IS IT SOMETHING THAT THEY HAVE TO KNOW AND THEY'RE OFFERING? YEAH, SO, UM, WHAT WE HAVE IS, IT'S ON OUR WEBSITE.UM, WE BUILT A PORTAL WHERE YOU CAN JUST SEE, AM I QUALIFIED? UM, SO PEOPLE CAN GO IN AND WE'RE TRYING TO LEAD PEOPLE TO THAT WEBSITE, UM, THROUGH OUR, UM, OUR, UH, SOCIAL MEDIA.
UM, WE HAVE, UH, ALSO CREATED PARTNERSHIPS WITH SEVERAL OF THE HFCS WHERE THEIR, OUR WEBSITES ARE LINKED.
UM, WE HAVE, UH, WE BUILD UP TEMPLATES, UM, THAT, UH, HFCS CAN PUT ONTO THEIR WEBSITES THAT WILL LINK BACK AND FORTH.
SO IF WE HAD SOME COME TO OUR WEBSITE OR DALLAS AND REFER 'EM TO DALLAS WEBSITE AND, AND REALTORS AND MOTHERS IN DALLAS.
SO IT REALLY TAKES IT, IT'S REALLY INTENDED TO TAKE IT FROM, HEY, AM I QUALIFIED? AND IF YOU ARE, THEN HERE'S THE LENDER IN YOUR AREA THAT, THAT CAN REACH OUT TO THAT KNOWS THE PROGRAM, WE CAN HELP YOU.
UM, SO I DON'T KNOW IF THAT ANSWERS YOUR QUESTION.
UH, THE PORTAL IS REALLY DRIVEN, UH, TOWARDS, UH, UH, POTENTIAL BORROWERS.
UM, AND, AND THEN IT REFERS THEM TO, TO LENDERS, UM, AND REALTORS, UH, YOU KNOW, WE'VE GOT SEPARATE OUTREACH WE DO WITH REALTORS.
UH, SO WE'RE, WE'RE, AND WE'RE ALWAYS UP IN FRONT.
MY TEAM IS, UH, WILLING TO GET ON THE ROAD AT ANY TIME.
I HAVE ONE SUGGESTION AND ONE QUESTION.
SO ON THE MARKETING OUTREACH, I WOULD SAY, YOU KNOW, AS WE EXPLORE THIS MAYBE AN NORTH EFFORT, UH, I KNOW WE BOTH FROM CITY COUNCIL AND I THINK, UH, LOCAL LEADERSHIP REALLY PUSH FOR HOW DO WE GET, UM, OUR NEIGHBORS IN SOUTH OF WEST DALLAS TO HOME OWNERSHIP AND SINGLE FAMILY HOME OPPORTUNITIES.
UM, AND THERE ARE A LOT OF LOCAL GROUPS LIKE
IT IS ALMOST ALL REALTORS AND SMALL LENDERS IN THOSE COMMUNITIES THAT I THINK ARE THE RIGHT PEOPLE TO GET THIS INFORMATION INTO THE COMMUNITY.
YOU HAVE, UH, SOUTHEAST, UH, CHAMBER OF COMMERCE, UH, PLEASANT GROVE AREA, UM, AND, AND THEY ARE, UH, UH, PREDOMINANTLY SAME THING LIKE REAL ESTATE PROFESSIONALS, UH, BANKING PROFESSIONALS THEY NEED AT DALLAS COLLEGE.
UM, AND SO THERE'S GROUPS LIKE THAT THAT I THINK, UH, YOU GUYS WOULDN'T NECESSARILY KNOW ABOUT, UM, WITHOUT WORKING WITH, UM, OUR STAFF OR, OR OTHER MEMBERS THAT ARE PROBABLY MORE FAMILIAR WITH GROUPS IN THEIR DISTRICTS, BUT JUST ENCOURAGE YOU TO KIND OF GET TO SOME OF THOSE LOCAL, UM, REAL ESTATE GROUPS AND LENDERS WHO REALLY HAVE THE BOOTS ON THE GROUND OR, YOU KNOW, VERSUS PEOPLE THAT MIGHT HAVE, YOU WOULD KNOW ABOUT LARGER LENDERS AND REAL ST.
AND THEN, BECAUSE I AM NEWER TO THE BOARD, I THINK I HEARD THIS IN AN INFORMAL DISCUSSION, UM, BUT I, I'M SORRY IF I MISSED THIS OR IT'S NOT TRUE.
MY QUESTION IS, IF, IF WE DON'T DO AN ALLOCATION IT, DO I UNDERSTAND IT CORRECTLY THAT THE DALLAS CITIZENS WOULDN'T BE ABLE TO APPLY FOR THE PROGRAM? WE HAVE TO PARTICIPATE IN COURT DALLAS BENEFIT OR TELL ME ABOUT THAT.
UH, WE'VE CHANGED THE PROGRAM QUITE BIT, USED TO ISSUE BONDS IN AND MAKE THE LOANS UNTIL WE RAN OUT OF FUNDS AND THEN WE TURN THE PROGRAM OFF.
WE ARE NOW CONTINUOUSLY LENDING, UH, WE DIDN'T WANT IT TO BE LUCK OF THE DRAWS FROM
UM, I HAVE SAID THIS, UH, UH, AND IT DEFINITELY WASN'T CLEAR.
UM, AS LONG AS THERE IS A BORROWER WHO WANTS TO BORROW FUNDS THROUGH OUR PROGRAM, I DON'T CARE WHERE IN THE STATE OF TEXAS THEY ARE, IF THEY'RE QUALIFIED, UM, WE'LL LEND THEM MONEY, FIND
SO IF WE DID CATCH UP, RIGHT, WE, YOU GUYS DO THE 65 AND WE END UP, UH, BY THE MIDDLE OF NEXT YEAR WE'RE, WE'VE DONE ALL 275 THAT YOU'VE EVER ALLOCATED, THAT DOESN'T SAY GAME'S OVER, UH, WE'RE NOT GONNA MAKE THAT LOAN TO DALLAS.
SO IT JUST, IT DOES, IT'S NOT, YOU NOT PARTICIPATING DOES NOT PREVENT US FROM MAKING MONTHS.
OH, THANK YOU FOR THAT CLARIFICATION.
SO ERIC, YOU KNOW, ONE THING I'D LIKE, UM, SOUNDS LIKE WE'RE DOING, YOU PROVIDE QUARTERLY REPORTS IF WE CAN PUT THESE ON THE BOARD, YOU KNOW, AGENDA LIKE ONCE A QUARTER, SO WE'LL STAY ON TOP OF IT.
AND SO WE WON'T JUST KIND OF LIKE COME AROUND NEXT YEAR, SAY, OH YEAH, WE TALKED ABOUT THIS A YEAR AGO.
UH, AND THEN, YOU KNOW, AND SEE, DEPENDING ON WHAT THE QUALITIES REPORTS ARE OR HOW THEY'RE SET UP, IT SOUNDS LIKE YOU'VE GOT THE ABILITY TO DO CUSTOM FORMATTING AND STUFF.
AND THEN ALSO LOOKING AT HOW WE CAN EITHER CO-BRAND THIS OR SOMEHOW BE WHERE, UH, AS AN HFC WE GET CREDIT FOR BEING INVOLVED IN THIS BECAUSE IT'S, YOU KNOW, WE WERE AT THAT BEING WITH COUNCIL MEMBER RIPLEY, AND WE MENTIONED THIS SEEMS LIKE WHAT YOU GUYS ARE INVOLVED IN, SINGLE FAMILY, YOU
[00:30:01]
KNOW, YOU SHOULD REALLY GET THE WORD OUT.I THINK, YOU KNOW, ALL THE COUNCIL MEMBERS, THIS IS LIKE SOMETHING WE CONTINUALLY HEAR IS HOW CAN WE HELP SINGLE FAMILY HOMEOWNERS? AND SO THIS IS A GREAT PROGRAM WE'VE ALREADY GOT GOING.
AND YEAH, I MEAN, I THINK YOU'RE RIGHT.
THE FACT THAT WE SO $50 MILLION SINGLE FAMILY LOANS.
SO THAT'S A PRETTY SIGNIFICANT OVERVIEW.
SO, UH, SORT SOMETHING WE'RE WORKING ON AND I APPRECIATE YOU BRINGING THAT UP IN TERMS OF THE CUSTOMIZATION, UM, YOU KNOW, HOUSTON, UH, WE DO A HIGH LEVEL OF CUSTOMIZATION.
WE DO, UH, YOU GET A SPECIAL REQUEST FOR WHAT'S HAPPENED IN THIS PRECINCT AND WHAT'S HAPPENED IN THIS AREA.
SO TO WHATEVER LEVEL OF CUSTOMIZATION WOULD BE HELPFUL FOR YOU GUYS AND COUNCIL, WHATEVER YOU NEED, JUST LET US KNOW.
YEAH, I MEAN, IT'S, THE THING THAT JUMPS OUT TO BE IS LIKE HAVING A SPIKE BE BEING ABLE TO SHOW BY COUNCIL DISTRICT.
SO WE HAVE A SPECIFIC COUNCIL MEMBER.
WE CAN SAY YOU WANNA GO TO MEET WITH THEM, LIKE, THIS IS WHAT WE'VE BEEN DOING IN YOUR DISTRICT.
AND ASK THEM IF THERE'S ANYTHING YOU CAN DO THAT THEY KNOW THAT THEY CAN DO TO HELP US, LIKE HELP OUT BEST DOLLARS.
ANY OTHER COMMENTS ON QUESTION ON THIS, BUT JUST A COMMENT.
THE RESOLUTION WE'RE ABOUT TO VOTE ON SAYS THAT WE, WE'VE BEEN PRESENTED A FORM ASSIGNMENT AGREEMENT AND THAT'S BEEN EMAILED.
IT CAME FROM ME THROUGH AARON JUST A LITTLE WHILE AGO.
I'LL DROP IT IN THE, IN THE, UM, SHARED DRIVE.
YEAH, AND TO ADD TO THAT, APOLOGIES FOR NOT HAVING THAT, UH, SO PROCESS THAT, BUT THIS AGREEMENT ISN'T MATERIAL DIFFERENT THAN THE, IF THAT MATTERS ALL, WOULD YOU AGREE WITH THAT? YEAH, I I THINK GEORGE IS HERE.
IT DOESN'T CHANGE FROM YEAR TO YEAR.
IT DOESN'T REALLY CHANGE FROM H-F-C-H-F-C, IT'S, UH, PRETTY STANDARDIZED AGREEMENT.
AND CLIFF ALREADY REVIEWED IT FOR IT SOUNDS LIKE, SO I JUST
ALRIGHT, WELL I GUESS IF THERE'S NO OTHER COMMENTS, DO I, DO WE WANNA ENTERTAIN A MOTION? SO MOVED.
SECOND VICE PRESIDENT ALLEN MOVED.
ALRIGHT, JACKIE, WHY DON'T WE DO A ROLL CALL.
VOTE VICE PRESIDENT SEAN ALLEN, DIRECTOR DEWAN.
RUDOLPH, UH, DEWAN, YOU'RE ON MUTE.
DIRECTOR RUDOLPH, YOU'RE ON MUTE.
ALRIGHT, UH, TREASURER JACK MARSHALL, APPROVE DIRECTOR PATTY COLLINS, APPROVE DIRECTOR KEVIN HUON, APPROVED DIRECTOR LESLIE BRU APPROVED PRESIDENT DAVID ELLIS, APPROVED DIRECTOR CLIFF RIEMAN APPROVED DR. OLIVER ROBINSON.
ALRIGHT, LET'S GO ON TO ITEM NUMBER SIX.
CONSIDER AND ADOPT AN INDUCEMENT RESOLUTION DECLARING AND INTENT TO ISSUE BONDS IN AGGREGATE PRINCIPLE AMOUNT NOT TO EXCEED 40 MILLION FOR A LOAN TO TEXAS OR PX DEBT 2027 LIMITED, OR A RELATED PERSON TO PROVIDE FINANCING FOR A MULTI-FAMILY RESIDENTIAL RENTAL DEVELOPMENT FOR PERSONS OF LOW AND MODERATE INCOMES.
BE KNOWN AS THE PEMBERTON, AND TO BE LOCATED AT OR ABOUT ONE ONE THREE ZERO ONE DENNIS ROAD, DALLAS TELEPHONE SEVEN FIVE TWO TWO NINE AUTHORIZING THE FILING OF AN APPLICATION FOR ALLOCATION OF PRIVATE ACTIVITY BONDS FROM THE TEXAS BOND REVIEW BOARD AND CONTAINING OTHER RELATED PROVISIONS.
SO WE HAVE HERE OUR, UH, ILLUSTRIOUS FRIENDS FROM FORMER GENERATION HOUSING NOW TITANIUM.
UH, SO YEAH, WE, WE WORKED WITH THESE FOLKS A COUPLE TIMES, UH, SHILOH AND WEST MORELAND STATION, WEST ONE STATION, AND
SO, UH, THEY ARE HERE TO PRESENT AN INDUCEMENT.
SO JUST TO REMIND ANY NEW BOARD MEMBERS, WE'RE NOT PROPOSING
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A PARTNERSHIP TODAY.THIS IS REALLY JUST A, A OPPORTUNITY FOR US TO SUPPORT THEIR APPLICATION TO THE STATE TO GO AND APPLY FOR BOX.
THE ONLY THING I WOULD MENTION, UH, IT'S HIGHLY LIKELY THEY'LL GET IT, SO YOU KNOW, IT WILL NOT BE COMING BACK AGAIN.
BUT IF YOU SEE THIS IS STILL COMING FIRST PART OF THE APPLE TO, YOU KNOW, THERE'S ENGAGEMENT ISSUES, BRING 'EM UP NOW.
SO OUR, YOU KNOW, DEVELOPMENT PARTNER KNOWS HOW TO ADDRESS THE NUMBER.
IF YOU ABSOLUTELY HATE THIS PROJECT, I THINK THEY WOULD LIKE TO KNOW WHY SO THAT THEY DON'T LIKE
UM, DO WANNA MAKE SURE, I THINK THIS ONE, THE OH, ALL RIGHT.
UH, WE'RE EXCITED TO BE HERE BEFORE YOU BOARD.
THANK YOU FOR ALLOWING US ON YOUR AGENDA TODAY.
UH, FIRST I'LL GIVE YOU A BRIEF OVERVIEW OF TITANIUM HOUSING.
SO WE'RE A LOCAL, HIGHLY EXPERIENCED DEVELOPER, OWNER AND ASSET WHO HAVE CONTRIBUTED TO OVER 1000 HIGH QUALITY AFFORDABLE UNITS IN THE CITY OF DALLAS.
UM, SINCE 2018, WE'VE LEVERAGED PARTNERSHIPS WITH THE CITY OF DALLAS HOUSING FINANCE CORPORATION AND UTILIZE A MIX OF CITY HOME, CDBG AND OTHER TYPES OF FEDERAL FUNDING.
SPECIALIZE IN COMPLEX HIGHER, UH, I'M SORRY, LATER FINANCING TRANSACTIONS INCLUDING 9% AND 4% BIOTECH DEVELOPMENT, TAX CREDIT, TAX EXEMPT PRIVATE ACTIVITY, BONDS, GRANTS, PUBLIC PRIVATE PARTNERSHIPS.
UM, MENTIONED TITANIUM IS A SUCCESSOR TO THE SUCCESSFUL GENERATION HOUSING DEVELOPMENT LEGACY.
UM, ADRIAN IGL REMAINS THE LEAD PRINCIPAL, THE HEAD OF OPERATIONS, AND WE'RE COMMITTED TO UPHOLDING THE SAME STANDARDS, UM, EXPERTISE PROVIDED, UH, OVER THE PAST SIX TO SEVEN YEARS.
UH, NOT NOTABLE DEVELOPMENTS IN OUR CONSTRUCTION OR COMPLETED BY THE PRINCIPALS OF OUR TEAM ARE STATES OF SHILOH WEST STATION, STATES OF FERGUSON, TENNISON LOSS, HIGHLINE, ILLINOIS, AND THE PEMBERTON MARK THE SIXTH SUCH PROJECT HC BOND.
AND WE'LL JUMP IN QUICKLY TO THE UNIT MIX.
SO THIS IS A TRULY MIXED INCOME DEVELOPMENT THAT WE'RE PROPOSING.
UH, A MI RANGES FROM 30% TO 70%, UH, WITH 10% OF THE UNITS SET ASIDE FOR MARKET RATE.
ALSO MIXING THE FLOOR PLANS WITH 36, 1 BEDROOM OF 24 2 BEDROOM, 23 BEDROOM FLOOR PLAN TYPES, SOME PROJECT OVERVIEWS.
SO THE COMMUNITY AMENITIES WE'RE PROPOSING.
ALL OF THE ITEMS WOULD NORMALLY INCLUDE A CLUBHOUSE AND COMMUNITY CENTER.
UH, 1200 SQUARE FOOT RESIDENT SERVICES SPACE WHERE WE LIKE TO BRING IN NONPROFITS TO OPERATE AND RUN.
WRAPAROUND RESIDENT SERVICES WILL ALSO INCLUDE STYLE POOL, BUSINESS CENTER, STATE OF FITNESS CENTER, AND CONTROLLED ACCESS THROUGHOUT THE PROPERTY.
THESE PHOTOS ARE FROM
UM, AS FAR AS OUR UNIT, UNIT AMENITIES, WE WILL INCLUDE GRANITE COUNTERTOPS, TINT LIGHTING, HARDWOOD FLOORING, UH, COVER BALCONIES, SPACIOUS HARDWOOD CABINETRY, OPEN STYLE FLOOR PLANS, AND ENERGY STAR APPLIANCES.
SO THE SITE IS LOCATED IN COUNCIL DISTRICT SIX.
UH, WE'VE MET WITH COUNCIL MEMBER KINA AND GOT HER SUPPORT IN FORWARD WITH OUR RESOLUTION.
UM, AND IT'S ALSO IN A REALLY, REALLY AWESOME AREA IN TERMS OF PROXIMITY TO PUBLIC AMENITIES.
FOR EXAMPLE, WE ARE LESS THAN A QUARTER MILE FROM THE MARCUS PARK, MARCUS ELEMENTARY SCHOOL, AND THE MARCUS RECREATIONAL CENTER.
WE'RE ALSO CLOSE TO LARGE RETAILERS SUCH AS CINEMA DEPOT, UH, IN THE BURLINGTON.
AND WE ALSO WITHIN HALF A MILE OF THE DART ROYAL LANE PARK AND RIDE STATION, REALLY EXCITED ABOUT IT GIVES OUR RESIDENTS TREMENDOUS OPPORTUNITY TO USE, UM, BIKE RAIL, PUBLIC TRANSIT OR ACCESS THROUGHOUT.
UM, AS FAR AS THE NUMBER OF LITECH DEVELOPMENTS IN THIS DISTRICT AND IN THIS AREA, THERE HAVE BEEN VERY FEW,
[00:40:01]
UM, RECENTLY IMPROVED DISRUPTION, UH, AFFORDABLE, TRULY AFFORDABLE DEVELOPMENTS THAT KIND OF CATER TO THE MISSING MIDDLE IN THIS AREA, WE THINK DUE TO THE NUMBER OF JOBS OF PROXIMITY TO SCHOOLS, GROCERY STORES AND TRANSIT, UH, WILL SET US UP FOR A VERY SUCCESSFUL DEVELOPMENT.THIS IS JUST A QUICK SNAPSHOT OF OUR CENSUS TRACK SHOWING THE, UH, AREA OF HOUSEHOLD INCOME OF $56,000.
THE POVERTY RATE BELOW 20%, RIGHT ABOVE 16%.
AS FAR AS THE, UH, MARKET STUDY GOES, WE, WE HAVE ENGAGED A FULL MARKET STUDY, WHICH WE'LL HAVE BY THE END OF THE MONTH, BUT IN THE MEANTIME, WE HAVE RECEIVED SOME PRELIMINARY MARKET FEEDBACK.
UM, SPECIFICALLY WE'VE RECEIVED FEEDBACK ON ALL OF OUR, THOSE RENTS.
AND WE, WE SHOW THAT THE CAPTURE RATE FOR ALL OF OUR, UH, TARGETED AND COMMANDS IS BELOW THE 5% MARK THAT WE ALWAYS TRY TO HIT, WHICH SUGGESTS A VERY STRONG DEMAND FOR AFFORDABLE UNITS IN THIS MARKET.
UM, AND WE CAN PROVIDE A FULL MARKET STUDY AT ANY POINT ONCE WE HAVE THAT.
AS FAR AS THE SITE DEVELOPMENT CONCEPT PLAN, UM, THIS IS OUR DESIGN AND OUR SITE PLAN.
UH, ZONING IS ALREADY IN PLACE.
PLACE AN EXCUSE TO, IT'S THE CURRENT ZONING FOR THE PROPERTY.
AND WHAT WE'RE PROPOSING IS ONE FIVE STORY WOOD FRAME STRUCTURE ABOVE CONCRETE PODIUM PARK STRUCTURE.
UH, THE TOTAL UNIT COUNT WILL BE 180 UNITS.
AGAIN, THAT WILL INCLUDE A MIX OF ONE THREE BEDROOM FLOOR PLANS.
WE WILL PROVIDE 216 PARKING SPACES OF WHICH 60 WILL BE SURFACE, AND 156 WILL BE PODIUM PARKING.
UH, THEN OF COURSE WE'LL HAVE OUR CENTER ON THE GROUND FLOOR COMMUNITY POOL ABOVE PODIUM AND STANDARD FITNESS CENTER RESIDENCE SERVICES CENTER AS WELL.
UH, THIS IS ANOTHER, UH, SLIGHTLY BIGGER VIEW OF OUR RENDERING.
SO THIS IS A BUILDING TYPE THAT WE HAVE DESIGNED FOR.
WE ACTUALLY HAVE THIS BUILDING TYPE UNDER CONSTRUCTION CITY OF AUSTIN.
AND, UM, WE'RE VERY PROUD OF THE EXTERIOR FINISH.
THE, THE LOOK, I THINK WE ALWAYS WANNA BUILD SOMETHING THAT OUR RESIDENTS CAN TRULY BE PROUD TO LIVE AT.
I THINK WE'VE HIT THAT MARK ON THIS DEVELOPMENT.
AND LASTLY, JUST A QUICK OVERVIEW OF OUR SOURCES AND USES FOR THE DEVELOPMENT.
SO TOTAL DEVELOPMENT COSTS IS COMING IN RIGHT AT ABOUT 64 MILLION, 700,000 ROUGHLY.
OF THAT WE WILL, YOU KNOW, APPLY FOR OUR PERMANENT FINANCING IN THE AMOUNT OF ABOUT $25 MILLION.
DO HAVE AN APPLICATION INTO THE CITY OF DALLAS FOR ABOUT $8.8 MILLION FOR CITY LOAN, WHICH WILL MOST LIKELY BE A MIX OF HOME AND CDBG FUNDING.
UH, TAX CREDIT EQUITY WILL AMOUNT TO ROUGHLY 22.4 BILLION OF THE TOTAL SOURCES.
AND OF COURSE, WE HAVE ALSO MODELED ON GREEN PROCEEDS IN OUR SOURCES OF JUST OVER FOUR AND A HALF MILLION.
UM, AS FAR AS THE USES, OUR, OUR LAND ACQUISITION COSTS 2.7 MILLION.
CONSTRUCTION USES ARE ESTIMATED ABOUT 35 5 MILLION.
UM, AND THEN FINANCING AND CLOSING COSTS ARE ALL SHOWN BELOW THERE.
THEY'RE DEFINITELY EXPENSIVE, UM, BUT WE ARE ABLE TO MAKE THIS DEAL WORK REALLY WELL MODELED.
I THINK FOR NOW THAT'S, THAT'S ALL I HAVE FOR YOU GUYS.
QUESTION ONE ON THE SOURCES ARE, IS THERE NO DEFER DEFERMENT OF THE DEVELOPER FEE? THERE IS.
SO WE'RE CURRENTLY DEFERRING ABOUT 50% OF OUR DEVELOPER FEE.
AND OUR SOURCES, I THINK THAT THAT LINE ITEM IS HIT.
WE CAN ISSUE A NEW UPDATE FOR THAT.
THAT'S GONNA BE GREAT FOR ANYTHING THAT'S, CONGRATULATIONS.
JUST IN GENERAL, WE, UM, IT'S, IT'S VERY DIFFICULT.
GET THERE AND WE ALWAYS TRY TO GET TO ABOUT 50%, RIGHT? SO IT'S 50%.
WE PUT IN AT LEAST 50% OF OUR FEE INTO EVERY DEVELOPMENT.
SO, SO IS THE DEVELOPER FEE, YOU'RE SHOWING ME A PAYMENT OF 1,000,001 95? IS THAT APP, THAT'S WHAT'S BEING USED DURING THE CONSTRUCTION PHASE, RIGHT? UHHUH
SO THAT'S JUST, OH, THERE IT IS.
[00:45:01]
CONSTRUCTION COST IS GONNA BE ABOUT 360,000 PER PER UNIT, ROUGHLY? THAT'S ROUGHLY CORRECT.YEAH, WE'RE, UH, WE'RE ABOUT $200 PER THAT VERTICAL SQUARE FOOT, WHICH, UH, IS IN LINE WITH ABOUT A FIVE 10% CONTINGENCY ON WHAT WE'VE CONSTRUCTED BEFORE.
SO WE'RE GIVING OURSELVES THAT BUFFER, BUT WE'RE, YOU KNOW, WE LIKE TO STAY BETWEEN FIVE TO 10% FROM ACTUAL COST.
AND YOU'RE TALKING TO THE CITY ABOUT ROUGHLY A $9 MILLION GAP GAP FINANCING? THAT'S CORRECT.
AND, UM, YOU KNOW, WE'RE WORKING THROUGH SEEING IF THAT CAN BE REDUCED SLIGHTLY TO ACCOMMODATE SOME OF THEIR, THEIR LIMITS AND AVAILABLE FUNDING.
FOR EXAMPLE, NEW RENTS WERE POSTED IN 2026, NEW TDHA RENTS, AND WE'RE GONNA SEE WHAT WE CAN DO TO REDUCE THAT GAP A LITTLE BIT.
UM, BUT OF COURSE IT ALL REALLY COMES DOWN TO TAX CREDIT EQUITY PRICING.
WHICH HAS BEEN, UH, YOU KNOW, IN AVOL YEAH, RECENTLY.
AND THEN WHAT'S YOUR, WHAT'S YOUR ASSUMPTION IN HERE? WE GOT 85 CENTS, WHICH IS THAT ABOUT, WE CLOSED OUR LAST, UH, PERMANENT FINANCING INTEREST RATE.
THIS IS OBVIOUSLY THE OTHER ITEM.
WE'VE, YOU KNOW, INTEREST RATES.
IF THEY COME DOWN HALF PERCENT, WE SEE THAT GAP SIGNIFICANTLY.
CAN YOU, UH, TELL ME A LITTLE BIT MORE ABOUT HOW YOU ALL ARRIVED AT YOUR, UH, YOUR MIX OF ONE, TWO OR THREE BEDROOMS, AND THEN HOW THAT INFORMS OR HOW YOUR RESEARCH HEALTH MARKET INFORM THOSE CHOICES? ABSOLUTELY.
YOU KNOW, IT'S ALWAYS A BALANCE BETWEEN TRYING TO GIVE AS MANY AFFORDABLE UNITS AS WE CAN.
AND INITIALLY WHEN WE PROPOSED THIS DEVELOPMENT TO THE COUNCIL MEMBER, WE HAD ABOUT 200 UNITS, BUT WE WERE VERY LIGHT ON OUR THREE BEDROOM FLOOR PLANS.
UM, COUNCIL MEMBER KINA MADE THE REQUEST THAT WE LOOK AT AFTER THREE BEDROOM UNITS.
SHE THOUGHT IN HER COUNCIL DISTRICT, UM, THERE'S ENOUGH FAMILIES TO SUPPORT LARGER UNITS, AND THAT WAS SOMETHING THAT WE UPDATED IN OUR PLANS IN GENERAL, WE ALWAYS LIKE TO INCLUDE, YOU KNOW, MOSTLY TWO BEDROOM UNITS.
WE SEE THE MARKET RECEIVES THOSE THE BEST IN TERMS OF FAMILIES HAVE ENOUGH SPACE TO ACTUALLY LIVE THERE AND HAVE A FAMILY.
UM, BUT THEY'RE NOT TOO SMALL AND, AND THEY CAN ACTUALLY AFFORD 'EM.
THREE BEDROOM UNITS ARE WHERE YOU, YOUR RENTS START GOING UP AND, YOU KNOW, I THINK FAMILIES, UM, THERE'S LESS FOLKS THAT PROBABLY QUALIFY FOR A THREE BEDROOM, UM, MINIMUM, IF THAT MAKES SENSE.
BUT THE OTHER CONCERN IS PARKING.
AND I THINK WE, YOU KNOW, WE NEED TO MAKE SURE WE HAVE ENOUGH PARKING SPACES AND DOING THE MORE THREE BEDROOMS AND TWO BEDROOMS THAT YOU DO, UM, WE DON'T WANNA PUT OURSELVES IN SITUATION WHERE WE'RE UNDER PART TO THE SITE.
SO WE'VE MAXED THIS OUT AS MUCH AS WE CAN TO BUILD, PROVIDE PARKING AND A UNIT MIX THAT PROVIDES THE MOST BENEFIT FOR KIND OF THAT TWO BEDROOM, TWO BEDROOM, UH, FAMILY.
AND SO YOU MENTIONED COUNSEL MENTIONED THAT, HEY, THERE MIGHT BE A NEED FAMILY, A THREE BEDROOM.
DID Y'ALL NOT SENSE THAT BEFORE SHE SU SUGGESTED IT, OR HOW DID Y'ALL, I'M JUST TRYING TO UNDERSTAND HOW YOU SEE OUR YEAH, WELL, INITIALLY WE HAD MOSTLY TWO BEDROOMS. WE HAD ABOUT 75% OF OUR DEVELOPMENTS, TWO BEDROOMS, AND THAT ALLOWED US TO REQUEST A SMALLER GAP AND THE DEAL MORE FINANCIALLY DECENT GAP THAT, BUT HER FEEDBACK WAS THAT THREE BEDROOMS WERE VERY IMPORTANT, EXPLAINED TO HER, IT WILL RESULT IN A, IN A LOWER UNIT COUNT, LOWER TOTAL UNIT COUNT FOR THE DEVELOPMENT, AND THEREBY BE SLIGHTLY LARGER GAP.
SHE FELT LIKE IT'S STILL IMPORTANT TO MAKE THAT CHANGE.
SO SHE FELT LIKE IT WAS IMPORTANT.
HOW DO YOU GUYS FEEL ABOUT THE VIABILITY OF IT? IT'LL ABSOLUTELY BE, I DON'T THINK WE'LL HAVE ANY ISSUES.
I THINK WE HAVE 23 BEDROOM UNITS, BUT WE WILL NOT HAVE ANY ISSUES GIVING THOSE FEES.
UM, IT'S JUST A MATTER OF, YOU KNOW, FOR 23 BEDROOM UNITS, YOU COULD HAVE BUILT, YOU KNOW, 28 2 BEDROOM UNITS.
SO WE'RE LOSING EIGHT TOTAL UNITS.
BUT, UM, AGAIN, I THINK CATERING TO THOSE FAMILIES WITH LARGER FAMILIES IS ALSO IMPORTANT.
I JUST LOOKING AT A PRICE PER SCORE ON HOW YOU COULD RENT IT, THE LARGER THE, YOU GET OUT THAT SPACE, THAT TRUTH THOUGH IS WHAT, WHAT DOES THE NEIGHBORHOOD NEED AS YOU THINK, RIGHT? SO YOU CAN FORMAL CERTAIN NUMBER OF WHAT, WHAT, WHAT DOES THE TRULY BE? AND, AND I HOPE THAT THAT STUDY HAS BEEN DONE FOR THE CANCER PERSON.
RACISM, I KNOW THIS IS JUST AN INDUCEMENT, SO IT'S MORE OF A PREVIEW OF WHAT SURE.
I'LL BE LOOKING AT LATER DOWN THE ROAD.
[00:50:01]
THIS SPOT, UH, IS CLOSE ON A MAP TO THE DARK STATION, BUT IT'S ALSO GOING TO BE A JOURNEY TO BRIDGE THAT GAP IN BETWEEN THAT.AND SO I JUST WANNA ENCOURAGE Y'ALL TO REMEMBER THAT Y'ALL ARE REALLY SETTING THE STANDARD FOR WHAT THE NEIGHBORHOOD CAN LOOK LIKE.
I DON'T THINK THERE'S BEEN ANY NEW MULTIFAMILY, LIKE TWO, TWO AND A HALF DECADES.
AND SO IN TERMS OF MAKING DECISIONS THAT MIGHT LOOK ODD JUST ON THIS PROPERTY, YOU KNOW, SETTING THE SIDEWALKS BACK, GET THE UTILITY WIRED OUT OF THE WAY, IT'S SOMETHING THAT YOU'LL BE MOLDED OR OTHERS WILL MOLD AFTER YOU.
AND, UH, OBVIOUSLY YOU'LL GET TO KNOW THE NEIGHBORHOOD A LITTLE BIT BETTER AS YOU'RE DESIGNING THINGS.
I SAW THAT THERE WAS A DOG PARK RIGHT ON THE ROAD.
UH, IT'S A VERY BIG DOG NEIGHBORHOOD.
SO IN TERMS OF KEEPING THE COMMUNITY, YOU KNOW, QUIET AND ENJOYABLE, PUTTING DOGS RIGHT AGAINST OTHER DOGS, I NOT BE THE BEST.
BUT AGAIN, JUST LITTLE THINGS THAT THERE'S RING DRINKS, I GET THAT.
UM, YEAH, I, I REALLY LIKE THIS LOCATION AS WELL.
UM, I NOTICED IT'S WALKING DISTANCE TO A FARM REC CENTER JUST A COUPLE BLOCKS AWAY.
SHARE THE SAME CONCERN ABOUT YOU GONNA BE ESTABLISHED A PRECEDENT FOR THIS AREA THAT WE KIND OF CHANGES IN THE PULLING SIDEWALK BACK AND MAKING IT VERY WALKABLE.
UM, I ALSO WANNA POINT OUT, I CHECKED, UM, A COUPLE MINUTES AGO, I KNOW THERE'S THIS KIND OF ONGOING CONCERN ABOUT LOSING TAX REVENUE.
UM, I PULLED UP THE 25 YEAR TAX HISTORY OF THIS PROPERTY'S PAID VIRTUALLY NO TAXES FOR THE LAST 25 YEARS, HAS BEEN AN AM AN AM BROWNFIELD SITE.
SO, YOU KNOW, IT'S LIKE I I THAT'S, I DON'T SEE ANY TAX IMPACT HERE, BUT THAT WE'RE GETTING BEFORE BILL.
WHATEVER WE SEE THE FOREGONE TAXES TO BE.
I MEAN, YOU KNOW, IF IT WAS 25 YEARS, NOTHING'S BEEN DONE ON THIS SITE.
I THINK FOR US IT'S GONNA BE ANOTHER 25 YEARS.
SO ANY OTHER QUESTIONS, COMMENTS? UNIFICATIONS? ALL RIGHT, GO AHEAD.
ONE COMMENT FOR ME, REALLY UNRELATED THE SPECIFICS.
SO I SEE THE THIRD PARTY ASSET MANAGEMENT, COMP MANAGEMENT COMPANIES IN THE ASSET LIVING, OUR LAW PARTNERS PROVIDED SOME LEGAL SERVICES TO THEM.
SO I'M, I'M GONNA, I'M GONNA ABSTAIN FROM THIS AND I PROBABLY NEED TO THE CITY ATTORNEY ABOUT IT.
DOES THAT PRESENT A PROBLEM? DO I NEED TO RECUSE? IS IT A NON-ISSUE? I, I, I DON'T PERSONALLY DO, RIGHT? AND I, AND I WON'T.
MY PARTNER, I THINK IF YOU REFUSE YOURSELF, THERE'S NOT A ISSUE.
CAN WE HAVE A TALK OUT THE YEAH, WE, I'LL JUST STAND ON THIS ONE THEN.
YOU GUYS ARE ALL PERFECTLY WHATSOEVER.
SO ALSO I THINK THE POINT THAT TONY RAISED IS SO IMPORTANT BECAUSE LIKE YOU SAID, IF THIS KEEPS TOO IMPORTANT, THIS GOES TO COUNCIL.
I JUST DON'T WANNA LOSE THAT POINT, UM, ON THE TAX REVENUE FROM THE LAST 25 YEARS.
SO WE JUST MAKE SURE, INCORPORATE THAT WE COME BACK FOR MO YOU WHEN YOU, YOU GUYS GO, YOU KNOW, JUST EVERY TIME WE CAN MAKE THAT POINT ON OUR DEALS, I THINK WE NEED TO MAKE SURE IT'S INCORPORATED.
I DON'T WANNA FORGET THAT AS MR. YES, ABSOLUTELY.
SHALL WE ENTERTAIN A MOTION? ALRIGHT, DIRECTOR ROBINSON HAS MOTION.
UH, JACKIE, LET'S DO A ROLL CALL.
VOTE VICE PRESIDENT SEAN ALLEN.
DIRECTOR DEWAN RUDOLPH FAVOR TREASURER JACK MARSHALL.
C IN FAVOR, DIRECTOR PATTY COLLINS.
IN FAVOR, DIRECTOR KEVIN HUNTON.
IN FAVOR, DIRECTOR LESLIE BRUIN.
IN FAVOR, DIRECTOR CLIFF FRIEDMAN.
AB ANG DIRECTOR OLIVER ROBINSON FAVOR, DIRECTOR RYAN MOORE FAVOR, SECRETARY TONY PAGE IN FAVOR AND DIRECTOR SEAN ZABE FAVOR.
ALL RIGHT, THANK YOU VERY MUCH.
AJOUR, WHAT ARE WE ON HERE? SO
[00:55:01]
ACTION ITEM SEVEN, RIGHT? YEAH.CONSIDER AND ADOPT AN INDUCEMENT RESOLUTION DECLARING INTEND TO ISSUE BONDS IN AN AGGREGATE PRINCIPAL AMOUNT NOT TO EXCEED 26 MILLION FOR LOAN TO EC CARPENTER'S POINT LLC, OR A RELATED PERSON TO PROVIDE FINANCING FOR A SENIOR MULTIFAMILY RESIDENTIAL RENTAL DEVELOPMENT FOR PERSONS OF LOW AND MODERATE INCOME, BE KNOWN AS CARPENTER'S POINT SENIOR LIVING AND BE LOCATED AT OR ABOUT 4 6 4 5 DOLPHIN ROAD, DALLAS, TEXAS 7 5 2 2 3 AUTHORIZING THE FILING OF AN APPLICATION FOR ALLOCATION OF PRIVATE ACTIVITY BONDS WITH THE TEXAS BOND REVIEW BOARD AND CONTAINING OTHER RELATED IONS.
SO WE HAVE HERE ETT RE WHO'S REPRESENTING THE CURRENT OWNERS.
THEY ARE GOING TO IQ AFTER A RECENT SYNDICATION OF BONDS FOR THIS PROJECT THAT THERE'S A CURRENT BREW ON THE PROJECT, IT'S INSPIRING, UM, AND THEY AT SOME POINT WANT TO DO A RENOVATION.
YES, THANK YOU SO MUCH FOR HAVING ME.
UM, YEAH, MY NAME IS RE I'M LIVE IN BULK AND THEN MY COLLEAGUES, MAJOR LEE'S ALSO CALLING IN.
UM, BUT YEAH, WE ARE THE OWNERS AND OPERATORS CARPENTER POINTS PROPERTY, UM, A LITTLE BIT ABOUT US INVOLVED IS A VERTICALLY INTEGRATED MULTIFAMILY REAL ESTATE ORGANIZATION.
UM, WE HAVE A FEW DIFFERENT LEGS.
WE HAVE, UM, AN OWNER AND OPERATING LEG AND THEN WE ALSO HAVE, UH, PROPERTY MANAGEMENT.
AND SO WE SPECIALIZE IN
WE HAVE 41,000 UNITS UNDER MANAGEMENT ACROSS 25 STATES.
UH, WE HAVE IN TEXAS ALONE, WE HAVE 103 PROPERTIES UNDER MANAGEMENT AND THAT'S ABOUT 10,000 UNITS.
AND THEN AS FAR AS PROPERTIES THAT WE OWN, WE HAVE, UM, OVER A HUNDRED, UM, ACROSS 17 DIFFERENT STATES.
AND THAT'S ABOUT 12, 13,000 UNITS.
AND THEN WE HAVE 20 SENIOR, OVER 20 SENIOR SPECIFIC PROPERTIES.
SO OUR INVESTMENT TEAM WILL BE, UM, HEADING UP THIS RE SYNDICATION AND WE HAVE, UM, OUR DEVELOPMENT TEAM HAS EXTENSIVE EXPERIENCE WITH, UM, 4% RECENT SYNDICATIONS AND ESPECIALLY, UM, A LOT OF EXPERIENCE IN TEXAS OVER THE PAST SEVERAL YEARS.
WE'VE DONE SO FORT WORTH, UM, THE WOODLANDS, AUSTIN, SAN MARCOS, EL PA, HOUSTON, PANERA.
AND WE'RE ALSO GROUND WORKING ON ONE CURRENT NEXT SLIDE.
THEY WILL BE WORKING ALONGSIDE US FOR THIS REHAB.
UM, THEY ARE A PREFERRED PARTNER AND THEY'RE BASED OUTTA HOUSTON.
UM, THEY MAY HAVE EXTENSIVE EXPERIENCE WITH, UM, B TECH AND
AND THEN THEY ALSO HAVE EXTENSIVE EXPERIENCE IN, UM, IN PLACE REHABS AND IN PLACE REHAB.
AND WE'RE ALSO WORKING WITH DNA WORKSHOP.
THEY WERE BASED OUT OF DALLAS, UM, NOT TOO FAR FROM HERE.
UM, AND LIITE AND AFFORDABLE HOUSE'S, KIND OF THEIR BREAD AND BUTTER AS WELL.
A LITTLE BIT ABOUT THE PROJECT AND THE PROPERTY.
UM, THIS IS A 150 UNIT AFFORDABLE SENIOR HOUSING DEVELOPMENT.
UM, BUT THE PROPERTY CONSISTS OF A SINGLE APARTMENT BUILDING, A LITTLE OVER, UM, FOUR ACRE LAND.
AND UM, IT IS LIMITED TO RESIDENCE AGE 55 AND BOULDER.
IT'S GOT A TON OF COMMUNITY AMENITIES.
IT'S GOT ONSITE MANAGEMENT MAINTENANCE, IT'S GOT FITNESS CENTER, IT'S GOT A BEAUTY AND BARBER SALON, UM, A LIBRARY.
THERE'S A BUSINESS CENTER, UM, HAVE THE CLUBHOUSE AND COMMUNITY KITCHEN.
UM, WE HAVE ELEVATORS, BARBECUE, PICNIC AREA PLACEBOS.
WE HAVE, UM, CONTROL ACCESS TO THE PROPERTY, UH, LAUNDRY FACILITIES AND COMMUNITY GARDEN.
AND THEN WITHIN THE UNITS WE HAVE, UM, JUST STANDARD AMENITIES, UM, REFRIGERATORS, WASHER AND DRY HOOKUPS, UM, MICROWAVES, CEILING FANS AND PATIO FOUNTAINS.
A LITTLE BIT MORE ABOUT THE PROJECT, UM, GONNA DIVE INTO SOME OF THE AFFORDABILITY RESTRICTIONS.
UM, WE'LL HAVE A NEW LURA IN PLACED AT CLOSING.
SO IT'LL BE THE 15 YEAR INITIAL, UM, USE PERIOD PLUS A 15 YEAR EXTENDED USE PERIOD.
AND THEN THERE IS AN EXISTING, UM, LRA AND THAT'LL RUN CONCURRENTLY THROUGH THE ORIGINAL COMPLIANCE PERIOD, UTILITY EXPIRES.
AND THE CURRENT
WE HAVE A HUNDRED PERCENT BUDGET BASED VOUCHERS AND, UH, RENTS ARE BASED ON THE APPLICABLE PRODUCT BASED VOUCHER
[01:00:01]
STANDARDS, UH, NOT THE AMI BASED STANDARDS.AND THEN WE ALSO HAVE, UM, AN ONSITE RESIDENT SERVICES COORDINATOR AND SHE PROVIDES, UM, ONGOING SUPPORT AND PROGRAMMING FOR THE RESIDENTS.
UM, SHE COORDINATES SOCIAL AND COMMUNITY EVENTS AND ALSO HELPS WITH LIKE HEALTHCARE, UM, RELATED MATTERS.
UM, MAKES A LOT, UH, A LITTLE BIT ABOUT UNIT MIX AND RENTS.
UH, IT'S MAINLY ONE BEDROOMS. UH, SO WE HAVE A HUNDRED TWENTY SIX ONE BEDROOM BATHS AND THEN THOSE CONTRACT RENTS WITH DHA ARE AT 1410.
AND THEN WE HAVE 24 2 BED, TWO BATHS IN THAT CONTRACT AROUND THA IS 1721.
AND THEN I GUESS TO HIT ON THAT, UH, I'M SURE Y'ALL ARE FAMILIAR WITH THA, BUT DO THEY, YOU KNOW, UM, THOSE RENTS EVERY YEAR.
AND SO EVEN IF THOSE RENTS DO INCREASE IN THE FUTURE, UM, THE AMOUNT THAT THE TENANT WILL BE PAYING WILL NOT.
AND THEN AS FAR AS SITE LOCATION IN DETAILS, WE ARE LOCATED AT 4 6 4 5 DOLPHIN ROAD AND THAT'S IN, UM, THAT'S IN DISTRICT SEVEN.
UM, WE HAVE TALKS WITH COUNCIL MEMBER, UM, ALUA AND THEN ALSO THE CHIEF OF STAFF, NATALIE.
WE'VE GOTTEN THERE, UM, PROGRAM CONFIRMATION THAT OKAY, THIS PROJECT AND WE ARE MORE SPECIFICALLY IN THE DOLPHIN HEIGHTS NEIGHBORHOOD, UH, JUST KIND OF IN THE SOUTH DALLAS FAIR PARK AREA, UM, EAST DOWNTOWN AND EAST FAIR PARK.
UM, AS FAR AS THE CENSUS TRACK POVERTY RATE, IT'S AT 18 7% OUT IN 2024.
AND THEN, UM, UNEMPLOYMENT RATE IN THE AREA IS 7.1%.
AND THEN NEARBY AMENITIES, UM, THERE IS A LINING DUCK CRAFT RECREATION CENTER, UM, ABOUT 0.3 MILES SOUTH OF THE PROPERTY.
AND IT'S OTHER, UM, FOOD MARKS NEARBY, UM, WITH ACCESS TO HEALTHCARE DAILY CENTER, LESS THAN THREE MILES.
AND THERE'S ALSO A, UM, A CLINIC, UM, ABOUT THREE MILES SOUTH OF THE PROPERTY NEAR THAT REC CENTER.
AND WE ALSO HAVE, UM, NEARBY TRANSIT.
UM, WE HAVE THE DARK BUS SERVICE ON DOLPHIN ROAD, SO IT'S JUST US PROPERTY.
AND THERE'S A CLOSER SNAPSHOT OF THE, THE AREA OF THE PROPERTY, UM, WITHIN THE 7 5 2 2 3 ZIP CODE.
THERE ARE NO OTHER LITECH PROPERTIES.
UM, I GUESS AS FAR AS OTHER NEARBY LITECH PROPERTIES, THERE ARE, UH, THERE IS THE FRAZIER FELLOWSHIP TOWN HOMES, WHICH IS OWNED BY DALLAS HOUSING AUTHORITY.
AND THAT'S, UM, JUST SOUTH OF OUR PROPERTY.
AND THAT'S ALSO, UM, YEAH, LIITE.
AND THERE'S ANOTHER ONE NEARBY CALLED SOUTHDALE, AND THAT'S LIITE PROPERTY ABOUT, OH, LESS THAN TWO MILES SOUTH.
AND THEN THERE'S SOME, UM, MARKET RATE APARTMENTS WITHIN TWO MILES.
WE KIND OF PULL SOME OF THESE FROM THE COAST STAR.
THESE ARE ALL AVERAGE, UM, ONE BEDROOM RACE.
SO AS FAR AS THE, THE REHAB AND THE CONCEPT DESIGN, UM, SUPER EXCITED FOR THIS REHAB.
UM, IT'S A GREAT PROPERTY AND, UM, OUR RESIDENTS VOICE EXPRESSION OF, UM, APPROVAL FOR THIS.
VERY, REALLY EXCITED, BUT FOCUSING MAINLY ON UNIT INTERIOR.
SO WE'RE GONNA DO, UM, KITCHEN TO BATH REMODELS, UH, ALSO GONNA DO NEW, UH, EXTERIOR ENTRY DOORS AS WELL AT WINDOWS AND THEN DO FLOORING.
AND THEN ELECTRIC LIGHTING, UPDATED PLUMBING FIXTURES.
WE'RE GONNA BE DOING SOME ENERGY EFFICIENT HVAC SYSTEMS AND, UH, NEW WATER HEATERS.
AND THEN AS FAR AS RELOCATION PLAN, UM, LIKE I MENTIONED EARLIER, THIS WILL BE A TENANT IN PLACE REHAB, AND SO THERE WILL BE NO PERMANENT DISPLACEMENT, UM, FROM THE REHABS.
UM, IT WILL BE, UM, JUST KINDA A UNIT BY UNIT FOUR BY FOUR REHAB.
AND THE, THE WORK WILL BE DONE DURING THE DAY AROUND EIGHT TO FIVE AND, UH, UNITS RETURN TO DELIVERABLE CONDITIONS BY THE END OF THE DAY, AND FOR SOME REASON THEY'RE NOT.
THEN WE WILL HAVE OFFSITE HOUSING PROVIDED, UM, TO OUR RESIDENTS AND ALSO THEM.
AND THEN WHILE THE RENOVATIONS ARE GOING ON, YOU KNOW, WE HAVE PLENTY OF COMMUNITY AND AMEN SPACE FOR THEM TO SPEND TIME AT, WE'LL PROVIDE MEALS.
JUST A LITTLE BIT ABOUT OUR SOURCES AND USES AND, UM, THESE ARE, THESE ARE KIND OF CHANGING AND BEING MORE REFINED AS, UM, WE'RE RECEIVING, UM, YOU KNOW, UPDATED SCOPE WORKS AND THINGS LIKE THAT.
UM, BUT OUR FIRST MORTGAGE THAT'LL BE A CREDIT FORWARD WAS AROUND 22 MILLION.
AND WE'RE 4% TAX CREDIT EQUITY, UH, IT'S ABOUT 15, 16 MILLION RIGHT NOW.
UH, WE JUST LOWERED OUR SELLER NET, ACTUALLY I THINK IT'S GONNA BE CLOSER TO 5 MILLION.
[01:05:01]
BASE WILL BE, I THINK WE ALSO JUST LOWERED THAT TO ABOUT 25 MILLION IMPROVEMENTS WILL BE ABOUT 7 MILLION.UH, COST ISSUANCE WILL BE 6 MILLION, THEN MISCELLANEOUS WILL BE DOWN SET.
WHAT'S THE IMPROVEMENT? WHAT'S THAT ON BASIS ON IMPROVEMENTS? THE, THE IMPROVEMENTS IS THE REHAB, RIGHT? YES, THAT'S THE REHAB.
HOW MUCH IS THAT
AND SO THE ACQUISITION PRICE, SO THE PARTNERSHIPS YOU CURRENT, IT IS ENTITY YOU HAVE CURRENTLY OWNS THE DEAL, RIGHT? YES.
SO YOU SELLING IT TO THE PARTNERSHIP FOR 26 MILLION AND IT HAS A NOTE OF 5 MILLION? YES, CORRECT.
WHEN DID YOU PURCHASE, WHEN DID YOUR AFFILIATE ENTITY PURCHASE THE ASSET? IN 2023, DECEMBER OF 2023 SALES PRICE, AT THAT TIME IT WAS 2020 1 MILLION.
BUT THIS, THE SELLER NOTE YOU REFER TO, IS THAT, IS THAT CURRENTLY OWED TO YOUR SELLER OR IS THAT BEING CREATED IN A, IN AN, IN, IN
AND IT AND, AND WHERE WILL THAT FIT IN THE CAPITAL STACK ONCE IT, WHAT WILL IT BE SUBORDINATED TO? UH, I THINK THAT'S, THINK MAJOR, MY COLLEAGUE CAN ANSWER MORE.
MA MAJORLY OF ALL COMMUNITIES, I, I WASN'T ABLE TO MAKE IT, BUT, UM, I THOUGHT I'D INTERJECT HERE.
UM, WE DID JUST RECEIVE AN UPDATED APPRAISAL.
UM, OUR LENDER, UH, FREDDIE LENDER ORDERED THAT IN COMPLIANCE WITH THEIR GUIDELINES AS WELL AS T-D-H-C-A.
SO THAT NEW AMOUNT'S GONNA BE 23.4 MILLION.
UM, WE GOT THAT IN, I THINK TWO DAYS AGO, AND I DON'T BELIEVE WE WERE ABLE TO UPDATE THE PRESENTATION, UH, BEFORE THEN.
AS WE HAD ALREADY SUBMITTED LAST WEEK.
UM, THE SELLER NOTE WILL HAVE, UM, PRIORITY AFTER THE PFC PARTNERSHIP FEES, UH, WITH CITY OF DALLAS.
SO, UM, THAT WILL GET PAID OFF BEFORE ANY CASH FLOW SPLITS WITH OUR L WITH OUR LP.
AND YOU CAN JUST THINK OF THAT AS ESSENTIALLY MONEY THAT INVOLVE IS LEAVING IN THE DEAL, UM, IN ORDER TO, UH, MAKE UP ANY GAP IN FINANCING.
UM, AND WE ANTICIPATE THAT SELLER NOTE BEING PAID OFF BY YEAR 11.
SO WE SAY THAT'S THE PARTNERSHIP FEES.
SO OUR PARTICIPATION OF THE DEVELOPER FEES COMES FIRST OVER THE SELLER.
NO, BUT WHEN WE GO FROM THAT GROUND LEASE, HOW ARE WE STRUCTURING THESE DEALS NOW? GROUND LEASE OR WHETHER IT'S A GROUND LEASE, UH, PAYMENT UNDER THE GROUND LEASE OR SOME SORT OF ADMINISTRATIVE PAYMENT UNDER THE LPA, IT'S WANTING THE SAME.
ARE WE COMING FIRST BEFORE THE SELLER CASES? THAT'S BEEN OUR PRACTICE.
I THINK THAT'S WHY I JUST HEARD HERE, CORRECT.
SO, SO WILL THEY BE SEEKING A PROPERTY TAX EXEMPTION THROUGH A UH, YES.
AND HOW'S IT STRUCTURE? WELL, THEY, THIS IS A BOND INDUCEMENT, RIGHT? WE, WE HAVEN'T NEGOTIATED ABOUT YET.
NO, BUT TODAY, AS OF TODAY ON THE, IT'S ON THE TAX.
SO WE'RE GONNA TAKE AN EXISTING TAX BANK OFF THE TAX.
YOU, YOU SAID ALL THIS, BUT I WANNA MAKE SURE I UNDERSTAND IT CORRECTLY.
THERE'S A LAWYER ON IT RIGHT NOW THAT MAKES YOU SUBJECT TO LITECH INCOME LIMITS, BUT DHA HAS IT AS A VOUCHER PROGRAM.
SO YOU'RE NOT SUBJECT OF RENT LIMITS, SO, OR THAT'S CORRECT.
THE VOUCHERS ARE PAYING MARKET RATE FOR THE UNITS AND THE RESIDENTS ARE JUST INCOME RESTRICTED.
AND IT WAS BOUGHT 23 FOR 21 MILLION.
AND IT'S THE INTERNAL TRANSFER PRICE HERE IS 26.
YEAH, HE SAID THAT RACHEL CAME IN AND DOWN WITH 23 MILLION STILL.
I, I HAVEN'T SEEN ANY MULTIFAMILY GO UP IN VALUES COMPARED TO 23.
THAT, THAT, THAT CAUSES ME PAUSE.
WHAT'S YOUR, WHAT'S
UM, THAT, THAT CHANGE IN PRICE REPRESENTS ABOUT A 10% APPRECIATION OVER THE COURSE OF THREE YEARS, WHICH IS, UM, NOT SIGNIFICANT.
WELL, IT IS WHEN THE OVERALL MARKET HAS GONE DOWN 10 OR 15%, 20%.
IT'S A BIG DELTA FROM MARKET FOR SURE.
WELL, WE, WE, YOU KNOW, WE AREN'T MAKING UP THIS PURCHASE PRICE.
THIS IS, UM, THIS IS COMING FROM AN APPRAISAL THAT WILL BE APPROVED BY FREDDIE MAC AS WELL AS OUR LP.
AND YOU KNOW, WE DIDN'T ORDER, WE, WE DIDN'T, YOU KNOW, SPAWN THIS PURCHASE PRICE OUT OF THIN AIR.
IT CAME FROM AN APPRAISAL ORDER BY OUR LENDER.
[01:10:02]
YEAH.SHOULD WE NOT APPROVE THE, UM, STATED MEMORANDUM, IF YOU WILL, WHAT, WHAT WE ALL DO WITH THE PROPERTY AS THE LU EXPIRES? WHAT'S YOUR PLAN? SURE.
THE OPTION, UH, IF YOU DON'T YEP.
UH, I THINK JUST TO PROCEED BRIEF, JUST PLANNING ON EXTENDING OUR, UM, CONTRACT WITH DHA.
SO YOU PLAN ON IF THEY NEED AFFORDABLE HOUSING PER FOR REMAIN OR OWNERSHIP.
AND CURRENTLY, DO YOU ALL HAVE ANY CAPEX OR RESERVES TO DO ANY TYPE OF IMPROVEMENT ALONG THE WAY? WE'VE ACTUALLY BEEN DOING SOME RECENTLY, WE'RE SOMETHING'S GOING ON RIGHT NOW, WE JUST REPLACED THE ROOF.
SO I THINK YEAH, IN, OF LAST YEAR.
AND WE'RE DOING SOMETHING FOR INTERIOR CORRIDOR DOOR ORGANIZATIONS, UM, BECAUSE IT'S ALL ONE BUILDING'S A LOT REPLACING FLOORING AND HANDING ALL THAT RIGHT NOW.
BUT NOTHING IN SO TO SPEAK, UH, AS WE'RE, AS WE'RE FLIPPING SOME UNITS, UM, IT'S SOME VACANT, WE DO MAKE SOME IMPROVEMENTS, UM, FLOORING, THINGS LIKE THAT.
NOW, WHERE ARE WE AT THE, WE WE'RE IN THE EXTENDED USE PERIOD RIGHT NOW.
IS THAT WHERE THIS IS IN THE PROGRAM? YES.
SORRY, THAT'S A, I I DON'T THINK I, BECAUSE I WAS TRYING TO FIGURE OUT, SO YOU SAID THE LAURA WAS ABOUT TO EXPIRE WHEN INITIALLY WAS JUST EXPIRES.
THERE'S TWO SEPARATE SEPARATE MOTORS ON EACH PROPERTY, RIGHT? SO YOU CORRECT ME.
THERE'S INITIAL 15 YEARS AND THEN THESE BONDS, THERE'S ANOTHER 15 YEARS ON TOP OF THAT ANTI, SO YOU STILL HAVE 15 YEARS OF COMPLIANCE.
AND YOU STILL HAVE THE DHA BELT S YES.
AND IF WE ENTER INTO THE DEAL RIGHT NOW, IT'S STRUCTURED AS A DEVELOPER FEE.
SO DID I SEE THAT CORRECTLY? IT'S ABOUT 18, 20,000 BACK HSEA YEAR.
UH, I DON'T KNOW THAT I'M TOP LINE EDGE.
SORRY, WHAT WAS THAT QUESTION? WAS THE FEE COMING BACK TO THE HFC ON ANNUAL BASIS? UM, THE HFC TAKES 20% OF EACH DEVELOPER FEE INSTALLMENT.
UM, SO TOTAL, UM, THROUGHOUT THE COURSE OF THE CONSTRUCTION PERIOD, TWO STABILIZATION WILL BE AROUND A MILLION DOLLARS.
THAT, THAT'S, THAT, THAT'S NOT BEING DISCUSSED THOUGH.
WE'RE NOT, WE HAVEN'T GOT MOU TERMS. WE'RE YEAH, YEAH.
THAT'S A NEGOTIATION RIGHT NOW.
THIS IS JUST A PRELIMINARY INDUCED MEAN, RIGHT NOW YOU CAN, WE CAN TALK ABOUT ISSUER FEES.
I MEAN, YOU'LL, YOU'LL SEE THOSE.
OR WHOEVER HAS, WHAT IS THE PUBLIC BENEFIT CALCULATION? HOW MUCH ARE WE GETTING IN RENTS? WELL, AGAIN, THE PUBLIC BENEFIT KIND OF COMES WHEN WE ACTUALLY PROVIDE THE TAX EXEMPTION.
FOR TAX EXEMPTION, SO, RIGHT, RIGHT.
WELL THE, IT'S ON THE ROOF ON THE RULES FOR 200 OR TRUE, BUT THAT'S NOT THE VOTE TODAY.
IT'S JUST DO WE WANNA ISSUE THE BONDS ON THIS? I GUESS THE OTHER QUESTION WOULD BE IF YOU GUYS, FOR THE TAX EXEMPTION, WOULD YOU STILL BE WILLING TO ISSUE THE BONDS IF THEY WANTED TO GO THROUGH WITH THE BOND? 'CAUSE SECOND, WE DON'T HAVE, WE DON'T HAVE TO DO THE YEAH, I THINK THAT'S IT.
WE CAN BE PARTNER, WE CAN BE BOND ISSUER.
BUT WHAT IS THIS ASSUMED LIKE YOUR SOURCES DEAL OF RIGHT NOW? THIS IS ASSUMING TAX.
IS THE AFFORDABILITY CHANGING POSING A CHANGE IN THE AFFORDABILITY LEVEL, OR IS IT IT'S GONNA LOCK IT IN FOR ANOTHER 30 YEARS? THAT'S, IT'S, RIGHT NOW IT'S LONG.
BUT I IMAGINE RE SYNDICATE A DELTA BETWEEN THE MARKET RENTS.
WELL, AND WHAT'S INTERESTING IN THIS PRESENTATION, IF YOU LOOK AT THE ONE BEDROOMS, IT LOOKS AS IF THE RENTS PROPOSED RENTS ARE HIGHER WITH MARKET.
IF YOU LOOK AT THE PROPERTIES THAT THEY'VE LISTED IN THEIR DOCUMENT, WHICH IS INTERESTING, THOSE ARE, THOSE ARE RENTS THAT ARE JUST ASSESSED IN THE BY GATE YEAR.
UM, SET THE RENTS THAT THEY OFFER BASED ON, YEAH.
SO, SO RIGHT NOW DHA IS PAYING A HUNDRED PERCENT OF THE RENT.
IT'S, IT'S RESTRICTED AND CURRENTLY FOR AN EXTENDED PERIOD, AND YOU'RE GONNA KEEP IT RESTRICTED AND OPERATE THE SAME WAY YOU'VE BEEN DOING IT.
I'M NOT SAYING SO, BUT THE BENEFIT IS ALSO THAT JUST SO YOU KNOW, WE'RE EXTENDING FOR ANOTHER 15 YEARS FOR LOCKING AFFORDABILITY FOR ANOTHER, YOU KNOW, FOR 30 YEARS.
ON TOP OF THAT, THERE'S A 50,000 REHAB THAT THAT IS BEING
[01:15:01]
INVESTED, THAT WE'RE GETTING CREDIT THAT, I MEAN, I DON'T KNOW HOW TO QUANTIFY WHETHER THAT'S QUOTE NEEDED.RIGHT? I MEAN, WE'RE GONNA SPEND MONEY AND THE ALL THAT STAYS THE SAME.
I, I IT'S LEASE NOW, PRESUMABLY IT'S WHAT ARE WE GAINING? I GUESS WE'RE GIVING UP TAX GETTING 15 YEARS ON THE BACK END.
WE'RE NOT, WE GOT 15 YEARS FOR A DIFFERENT DEAL.
WE'RE NOT GIVING UP TAX ON THIS BOAT.
IT'S FOR, IT'S THE VOTE THAT'S UP PER VOTE TODAY IS ARE WE GOING TO LOCK IN THE RESTRICTIONS FOR ANOTHER 30 YEARS AND ARE WE GOING TO FUND AND FINANCE A 50,000 DOOR REHAB? SO WE'RE NOT TALKING ABOUT A TAX EXEMPTION AT THIS TIME.
NOW THERE ARE CONCERNS I HAVE ABOUT THE BLANKETS, NOT NOT AN ARMS LENGTH TRANSACTION AND THAT IT'S GONNA BE MARKED UP THAT, YOU KNOW, I UNDERSTAND THE APPRAISAL, BUT YOU KNOW, THERE'S A SELLER NOTE THAT'S FINANCING THAT AS WELL.
SO IT'S KINDA LIKE WHAT, I MEAN, EVERYONE KIND OF VOTE HOWEVER THEY WANT.
I MEAN, IT'S SOMEONE'S BOSS, BUT I'M JUST TRYING TO CLARIFY WHAT EXACTLY IS THE ISSUE ON THE TABLE TODAY.
AND IN TERMS OF LOCKING IN THE AFFORDABILITY, IF YOU GET THE TAX EXEMPTION, THEN YOU WILL MAINTAIN THE WAR THAT KEEPS THE LITECH INCOME LIMITS.
AND JUST SO THAT MAINTAINING AND KEEPING YOUR AFFORDABLE PRESERVATION STOCK IS SOMETIMES A MAJOR INITIATIVE.
YOU GOTTA MAKE SURE I'M CONFUSED IF THEY'RE
BUT IF, IF YOU TAKE AWAY THE INCOME LIMITS, THE RENT, YOU'RE STILL GETTING PAID THE RENT.
SO I'M, I WANNA MAKE SURE THAT WHEN WE'RE LOCKING AFFORDABILITY, IT'S NOT JUST THEIR ASSOCIATION WITH DHA, IT'S ALSO THE PEOPLE THAT HAVE THE AVAILABLE AT THAT SEEMS LIKE THERE'S TWO AND I, BUT THERE IS, YEAH.
LIKE YOU HAVE TO QUALIFY FROM AN INCOME BASIS, RIGHT? YOU HAVE TO BE AT BELOW 50%
BUT ALSO IT'S, SO THE RENT'S THE SAME.
SO YEAH, I I GUESS YOU'D BE MAKING A MILLION DOLLARS A YEAR IF YOU GET RID OF THE AFFORDABILITY, YOU COULD PAY 1400 PER MONTH.
I'M SAYING THE, THE LIMITS ARE THE LITECH RESTRICTIONS.
IT'S WHAT WELL, THE DHA SETS THE, THE RENTS IS ROUGH.
THEY SAID WHAT THEY SAID ARE MARKET RENTS AND THEN THEY FUND THE GAP YEAH.
BETWEEN WHAT THE TENANT PAYS AND THE MARKET RENTS.
NOW, THE RESTRICTIONS, THE LIVE TECH RESTRICTIONS ARE BASED OFF WHAT IS THE OUT OF POCKET FROM THE TENANT, RIGHT.
WHICH IS GONNA BE WAY LOWER THAN THE LIVE TECH RESTRICTIONS BECAUSE I MEAN, THE PROJECT BASED PROGRAM IS JUST COMPLETELY SEPARATE FROM THE LITECH PROGRAM.
THEY FUND A MARKET, SAY, HEY, THIS IS THE MARKET RENT, WE'RE GOING TO FUND X PORTION THAT COUPLES WELL WITHIN LITECH, BECAUSE WHAT THE OUT-OF-POCKET PAY IS TO THE TENANT IS WELL UNDER THE LITECH RESTRICTIONS.
SO THOSE, THOSE ARE TWO SEPARATE PROGRAMS. BUT THAT IS VERY COMMON THAT YOU DO GET PROJECT BASED VOUCHERS WITH A LITECH.
BUT THEY ARE 2 1 2 SEPARATE PROGRAMS, BUT THEY STARTED INTERMIX WITH EACH OTHER.
WELL, SO THE DA VOUCHER PROGRAM IMPOSES LIMITS.
BUT THE DEVELOPERS EARNING MARKET GRANTS, CORRECT? THEY, I'M, I'M, I'M TO FIND THE IMPROVEMENT, I'LL JUST SAY I SAY ABOUT THIS, BUT I HAVE A, I HAVE A HARD TIME IT, WHEN I WAS LOOKING THROUGH THE PRESENTATION, I WAS LIKE, WHEN DOES ALL EXPIRE? I THOUGHT IT WAS LIKE A YEAR OR TWO FROM NOW.
I WOULD DEFINITELY CONSIDER WE WERE GOING TO TRY TO PRESERVE EXISTING BEFORE, BUT TO ME, THE, WHEN THERE'S 15 YEARS LEFT ON IT RIGHT NOW, IT'S GONNA STAY AFFORDABLE.
IT'S ALREADY THERE FOR SENIORS.
UNLESS YOU WERE TO SHOW ME THAT IT WAS GONNA BE TRANSFORMATIONAL FOR THE AREA, LIKE SOME OTHER BENEFIT.
I DON'T UNDERSTAND WHY OUR BOARD WOULD PAY FOR A RENOVATION WHEN IT'S ALREADY AFFORDABLE, UNLESS THERE'S ANOTHER CASE TO BE MADE.
MAYBE DAVID, YOU'RE GONNA SELL ME ON IT, BUT I HAVEN'T HEARD THAT.
WELL, I MEAN, IT, IT, IT'S REALLY WHAT KIND OF GETS INTO WHAT IS THE Y TECH PROGRAM FOR.
SO THERE'S REALLY CERTAIN INTERVALS THAT A PROPERTY COULD HAVE MADE MASSIVE CAPITAL FUTURE.
IF YOU'RE LIKE A NORMAL MARKET RATE DEAL AND THEY TRADE HANDS FIVE, YOU KNOW, EVERY 5, 3, 5, 7 YEARS, WELL, AT THAT TIME, A CAPITAL REHAB IS DONE AT THAT TIME, RIGHT? FOR A LIVE TECH PROPERTY, IT IS A 15 YEAR HALT.
OKAY? SO YOU BUILD THE DEAL AND IT WON'T HAVE ANY MASSIVE MAJOR CAPITAL INVESTMENT INTO IT UNLESS SOMEONE RESATE IT 15 YEARS FROM NOW.
SO THIS IS THAT WINDOW WHICH YOU CAN GET SOME LEVEL OF MASSIVE CAPITAL REHAB.
OR IF YOU DON'T DO IT, THEN YOU JUST KIND OF RIDE THROUGH THE EXTENDED USE PERIOD.
AND AT THE END OF 30 YEARS, YOU'VE GOT A, A PROPERTY THAT HAS HAD NO CAPITAL INVESTMENT FOR 30 YEARS SINCE IT WAS ORIGINALLY BUILT.
[01:20:01]
IT IS VERY COMMON THAT AT THE END OF THE COMPLIANCE PERIOD, EITHER A, SOMEONE BUYS THE PROPERTY SAYING, I'M JUST GONNA WRITE OUT, AND, YOU KNOW, IT'S A GREAT AREA, I CAN TAKE IT TO MARKET, MAKE A BIG BANG IN 15 YEARS, UH, OFF MY BUCK 10 YEARS NOW.OR WE GET A LITECH DEVELOPER THAT SAYS, I'M GOING TO PUT A MAJOR REHAB, DO A MASSIVE REHAB THAT OTHERWISE WOULD NOT GET.
AND THEN, YOU KNOW, I AM GONNA LOCK INTO AFFORDABILITY FOR 30, UH, FOR 30 MORE YEARS.
IT'S HOWEVER, WE WANT ABOUT 30 MORE YEARS.
15 MORE YEARS, NO, 30 MORE YEARS ON TOP OF, WELL, NO, NO, 30, 30 YEARS FROM TODAY.
RIGHT? SO, SO THE QUESTION AT HAND, IF THEY BOUGHT IN 2023, WHAT WAS THE PLAN COMING THREE YEARS AGO? AND SO YOU TALKED ABOUT THE MAJOR CAPITAL EVENTS, IF YOU'LL, SO THAT WAS ONE, THREE YEARS AGO.
MY, MY ASSUMPTION IS THEY BOUGHT IT KNOWING THE COMPLIANCE PERIOD, I ASSUME
IT SEEMS LIKE NATURALLY AFFORDABLE, NATURALLY OCCURRING AFFORDABLE HOUSING.
THAT'S OUR, OUR OUR MONEY TO, WELL, IT'S NOT OUR MONEY, IT'S IT'S MONEY.
IT'S THE US GOVERNMENT, THE MONEY RESOURCES, REPHRASE THAT.
THE MONEY THAT WE'RE STEWARDING AND RESPONSIBLE, WELL, THERE'S TWO DIFFERENT PLANS.
THERE'S WHAT WE MIGHT BE GIVING UP IN TERMS OF TAX EXEMPTION WON'T BE MIGHT BESU TAX EXEMPTION.
THERE'S QUESTIONS I HAVE ON THIS PROPERTY RELATED TO PROVIDING A TAX EXEMPTION.
NOW, THIS IS REALLY ABOUT, HEY, PRESERVING AFFORDABLE STOCK.
I MEAN, IT IS, IF YOU DO, IF YOU ARE COMMITTED, IN MY OPINION, IF YOU'RE COMMITTED TO KEEPING THIS UNDER THE RENT RESTRICTIONS THAT THERE CURRENTLY ARE, RIGHT? AND YOU WANNA KEEP HAVE CAPITAL INVESTMENT, MY BELIEF IS EVERY 15 YEARS IT'S TIME TO REHAB IT.
THAT'S, THAT'S JUST A PERSONAL BELIEF I HAVE RELATED TO THIS PROGRAM.
IF YOU DON'T WANNA DO IT, THEN THE PLAN IS LOOK, JUST WRITE IT OUT.
LET IT GO TO MARKET 15 YEARS FROM NOW.
THAT TO ME, THOSE ARE THE TWO CHOICES WHEN YOU'RE FACING A, A DEAL LIKE THIS.
NOW THE TERMS IN WHICH WE OFFER A TAX EXEMPTION, THAT'S DIFFERENT, BUT THAT'S NOT WHAT'S ON THE TABLE TODAY.
AND THE INTERNAL, YOU KNOW, IF THAT'S THE PLAN, YOU NEED A REHAB.
BUT MARKING IT UP A COUPLE MILLION DOLLARS IS A WHOLE DIFFERENT BALLGAME.
TO ME THAT IS, AGAIN, THAT'S, THAT'S A QUESTION FOR WHEN WE PARTNER ON THE DEAL AND WE'RE THE ONES BY THE EXEMPTION AND WE'RE PART OF THE PARTNERSHIP THAT'S BUYING IT AT THAT MARKUP.
I KNOW YOU'RE SAYING WE'RE NOT THERE YET, BUT I JUST WANNA GO BACK TO, BECAUSE I DON'T WANNA SEND Y'ALL DOWN DOING ALL THIS WORK FOR THE NEXT FEW MONTHS.
YOU COME BACK IN MOU AND WE ALL SAY WE'RE NOT DOING A TAX EXEMPTION.
SO IF WE WERE TO, I DON'T KNOW WHAT EVERYONE SAY, BUT IF WE WERE TO SAY WE WILL ONLY CONSIDER THE, I THINK YOU'RE GONNA ASK THIS QUESTION, BUT I THINK WE GOTTA BACK TO THIS.
WHAT, LIKE, WOULD Y'ALL STILL MOVE FORWARD WITH JUST DOING BONDS WITHOUT A TAX EXEMPT? CAN YOU STILL MAKE IT WORK? AND WHAT, IF ANYTHING, WOULD THAT CHANGE ABOUT THE RENOVATION? BECAUSE YOU'RE, YOU WOULDN'T HAVE TAX EXEMPT.
ARE YOU WILLING TO LEAVE IT IN THE EXISTING DEAL, NOT SELL IT, NOT TAKE A, SELL IT BOTH.
IT'S INTERNAL TO THE TRANSACTION.
JUST MAKE IT A STREET STRAIGHT RE REFUND THAT AGAIN, IF, IF, IF THERE WAS NO TRANSFER OF TIME AND IT WAS A STRAIGHT REFINANCE AND THERE WAS NO SELLER NOTE THAT THAT JUST STAYED IN AS EFFORT AND, AND, AND THAT, THAT WOULD MAKE ME FEEL BETTER.
I HAVE TO SAY, DO YOU MIND IF I INTERJECT HERE AND JUST, JUST TAKE A STEP BACK AND TRY TO PAINT A BIGGER PICTURE ABOUT WHAT WE'RE TRYING TO ACCOMPLISH HERE? AND I THINK AARON SAID IT BEST.
UM, YOU KNOW, WE ARE, WE ARE LOW INCOME HOUSING DEVELOPERS, OWNERS AND OPERATORS.
UM, YOU KNOW, THIS IS NOT OUR FIRST RODEO WITH AN ASSET LIKE THIS.
UH, WE BOUGHT IT AT THE END OF ITS COMPLIANCE PERIOD.
AND, UM, THIS PROPERTY FRANKLY NEEDS A LOT OF, YOU KNOW, CAPITAL INVESTMENT TO KEEP IT GOING FOR THE RESIDENTS HERE.
SO, YOU KNOW, THIS BOND ISSUANCE AND THIS DEAL IS TO FUND, UM, YOU KNOW, A REHAB FOR THESE RESIDENTS.
UH, THIS IS A SENIOR PROPERTY, UM, LOW INCOME.
THESE FOLKS PRESUMABLY WOULD HAVE NOWHERE ELSE TO GO IF NOT FOR THIS PROPERTY.
AND IT'S BEEN 15 YEARS SINCE IT, YOU KNOW, WAS BUILT.
AND, YOU KNOW, AS WITH ANY PIECE OF REAL ESTATE AFTER THAT PERIOD OF TIME, UH, IT'S GONNA NEED A LITTLE BIT OF LOVE.
SO THAT'S WHAT WE'RE TRYING TO DO HERE WITH THIS PROJECT.
UM, YOU KNOW, WE'RE, WE, WE'RE CURRENTLY 53 AND A HALF, UH, A DOOR AROUND $8 MILLION INVESTMENT.
IT'S GONNA GO A LONG WAY FOR PRESERVING THIS ASSET.
AND, UH, REALLY NOTHING IS CHANGING ON THE AFFORDABILITY REQUIREMENTS, UM, YOU KNOW, FOR THESE TENANTS.
SO THEIR LIVES WILL ONLY BE IMPACTED POSITIVELY AS A RESULT OF
[01:25:01]
THIS TRANSACTION.I'M GONNA ASK ONE OTHER QUESTION ON THE FUNDING USES.
SO $8 MILLION FOR IMPROVEMENTS.
THERE'S 6 MILLION, THREE FOR COST OF ISSUANCE AND 8 MILLION, TWO FOR MISCELLANEOUS.
WHAT ARE THOSE COST? UM, MS HAS GOTTA BE THE DEVELOPMENT FEE, RIGHT? YES.
NO, THIS, NO, IT'S THAT, THAT INCLUDES CONSTRUCTION INTEREST.
UM, UH, LE THERE'S A LOT OF ATTORNEYS INVOLVED WITH THESE DEALS.
LEGAL FEES, UH, FOR THE COST OF ISSUANCE, THAT'S A LOT OF COST RELATED TO THE BOND ISSUANCE ITSELF.
AND WHAT ABOUT THE MISCELLANEOUS OF 8 MILLION? TWO? YEAH, YEAH.
MI MISCELLANEOUS IS GONNA BE, UM, UH, CONTINGENCIES FOR THE CONSTRUCTION PERIOD, OPERATING RESERVES THAT ARE GONNA BE REQUIRED BY THE STATE AGENCY AS WELL AS OUR LP, UM, TAX CREDIT RELATED, UH, RESERVATION FEES, UH, PFC FEES.
UM, AND THEN DEVELOPMENT PROFIT IS INCLUDED IN THE MISCELLANEOUS EXPENSES.
DO YOU HAVE A DEVELOPER BUDGET THAT WAS UPLOADED ON THE WEBSITE? I DIDN'T SEE SOMETHING ON PAGE 16.
YEAH, WE, WE DON'T GET THAT PART.
YEAH, I MEAN, YOU MENTIONED EARLIER THAT A LOT OF IT'S GONNA BE COSMETIC FLOORING, APPLIANCES, PAINT, HOW MUCH IS IT STRUCTURAL? YOU KNOW, ARE YOU DOING THE ROOTS? ARE YOU DOING THE H BAGS? ARE YOU DOING THE ROOFS ALREADY? YEAH, WE ALREADY DID.
SOME OF THIS WILL ACTUALLY BE SOME ADDITIONAL FOUNDATION REPAIRS.
UM, BUT WE ARE DOING THE ALL NEW HVAC ON WATER HEATERS.
UM, YEAH, IT IS, IT IS GOOD PROPERTY, SO IT'S NOT FALLING APART.
UM, BUT WE DO WANNA EXTEND THE USEFUL LIFE OF IT.
AND A LOT THAT DOES INCLUDE, YOU KNOW, THE COUNTERTOPS, THE CABINET STICK, UM, SHALL TOILET.
I THINK THE ONLY THING SAVING IT FOR ME POTENTIALLY IS THAT IT'S, SO I'M NOT SAYING THAT IT'S SENIOR, SO I'M NOT SAYING NO, I, YOU KNOW, I'M HAPPY TO LET IT MOVE FORWARD AND, BUT I, I HAVE A LOT OF QUESTIONS AND I WOULD WANT TO REALLY UNDERSTAND WHAT THIS LOOKS LIKE, WHAT THE RENOVATION LOOKS LIKE.
'CAUSE SO FAR I JUST DON'T SEE THE VALUE IN IT OF OUR VAULT.
BUT, YOU KNOW, I THINK IF THE GROUP WANTED TO LET IT GO BOARD AND YOU GUYS WANTED TO MOVE IT ALONG, I THINK WE WOULD, I, FOR ME TO GET ON BOARD, NEED TO SEE A LOT MORE ABOUT WHAT THE RENOVATION ACTUALLY GONNA ENTAIL.
I DON'T LOVE THE, THE PLAN YOU LAID OUT FOR THE SENIORS TO LIKE, HANG OUT IN THE COMMON AREA WHILE THERE'S, I DON'T KNOW WHAT THE RIGHT SOLUTION IS, BUT I, I'D WANNA UNDERSTAND THAT BETTER.
I, YOU KNOW, LIKE, TO ME SILLY THINGS, BUT FOR ME, LIKE IF THERE'S WASHER AND DRYER HOOKUPS IN THE, UM, UNITS, BUT OUR, IT SOUNDS LIKE YOU'RE NOT PROVIDING WASHER DRYERS, LIKE OUR SENIORS SHOULDN'T BE GOING DOWN TO LIKE A, A LAUNDRY FACILITY.
THEY SHOULD, THERE, THERE NEEDS TO BE THOSE KIND OF CONSIDERATIONS OF LIKE, WHAT, HOW ARE WE REALLY CHANGING THESE PEOPLE'S LIVES? AND A CASE MADE FOR THAT, THAT IN THE PRESENTATION TODAY, I THINK IT'S A LITTLE LACKING, BUT I'M, I'M OPEN TO GIVING Y'ALL ANOTHER CHANCE TO LIKE, KEEP WORKING THROUGH IT AND COMING THROUGH.
UM, BUT, UH, I, I HAVEN'T SEEN IT YET.
TO ADD TO THAT, PRESIDENT ELLIS MENTIONED, YOU KNOW, THE FACT THAT WE HAVE TO THINK ABOUT PRESERVING AFFORDABILITY.
SO WE HAVE, NOW THE QUESTION THAT I HAVE TO YOUR POINT IS THE 2010 VINTAGE, IF YOU'LL, AND YOU SAY EVERY 15 YEARS, SO THERE NEEDS TO BE SOME MAJOR IMPROVEMENT.
DOES THE INHERENT STRUCTURE OF THE PROPERTY LEND ITSELF AGAIN FOR REALLY A CONDUCIVE ENVIRONMENT FOR SENIORS? IF, IF FOR WHATEVER REASON WE DON'T APPROVE OUR WELL TONIGHT, BUT SHOULD WE GO DOWN THE ROAD AND THEY ASK FOR MOU, WE SAY ALL NO.
IS THERE TRULY A DELTA BETWEEN MARKET TODAY FOR THOSE UNITS, FOR SENIORS AND OR ANY ASSISTANCE THAT WE WOULD'VE OTHERWISE GIVE THEM BY PARK? AND I, I STILL NOT COMFORTABLE.
I DON'T, I AGREE WITH YOU THAT WE NEED TO CONTINUE TO MAINTAIN FOR YOU.
I JUST DON'T KNOW THAT THIS PARTICULAR PROPERTY, I DON'T KNOW, WHICH IS SOMETHING DOESN'T JUMP AND SAY, YEAH, WE NEED TO KEEP THIS ONE, THIS ONE WORKS WELL FOR US AND WE'RE GOING TO SUFFER A SIGNIFICANT LOSS IF YOU DON'T PARTNER.
I THINK THERE'S A LITTLE BIT OF A CONFUSION BETWEEN WHAT PRESERVE MEANS BECAUSE, MAN, I DON'T HAVE A CRYSTAL BALL, BUT I IMAGINE IN 10 OR 15 YEARS THE RENT WILL BE THE SAME AS THE MARKET RENT.
UH, THERE'S NOT GONNA BE A MASS APPRECIATION IN RENT SINCE AREA.
[01:30:01]
I MEAN, I DON'T KNOW.UM, SO PRESERVING IN THIS CASE REALLY MEANS INVESTING IN THE PROPERTY, PRESERVING THE PHYSICAL ASSETS, NOT A MIRACLE CHAIN, NOT GETTING A HUGE NUMERICAL SAVINGS.
REMEMBER THE MISSION OF A FOR OF ORGANIZATION AND HSC IS NOT AFFORD HOUSING SAFE, SANITARY, DECENT HOUSING AT AFFORDABLE LIMITS.
SO SOMETIMES IT'S A QUESTION OF KEEPING A SAFE, SANITARY DECENT.
SO IS THIS PROJECT NOT SAFE, SANITARY, DECENT RIGHT NOW? IT'S THE PICTURES I SAW.
IN 15 YEARS, AND THIS CAN BE A SLUMP.
THERE'S NO CAPITAL INVESTMENT.
THAT'S WHAT, THIS IS A PREVENTATIVE CASE.
THIS IS A VERY COMMON STANDARD WITHIN THE STATE OF TEXAS.
15 YEARS YOU DO A 50,000 REHAB.
THIS IS NOT OUT OF THE NORMAL, I ASSURE YOU THIS.
NO, I, I'M, I'M, AND I'M TELLING YOU, THESE CAN TURN INTO SLUMPS IF WE DON'T DO IT AT TIMES LIKE THIS.
2010, BUT I'M TELLING YOU RIGHT NOW, APARTMENTS BETWEEN TWO, UH, 15 YEAR AGE TO 30 YEAR AGE CAN TURN BAD REALLY QUICK, JUST SO I'M ON TOP OF IT, ASSISTING BY BASICALLY FACILITATING THE REFINANCE AND ISSUE RESPONSE TO BOND ISSUER IN THIS CASE.
YEAH, I I, I'M, I'M JUST STILL, WHAT WHAT STILL HITS ME IS, IS THE INTERNAL MARKUP TO DO THIS.
THE A A THE KIND OF DEVELOPER FEE YOU GET FOR BRINGING NEW STOCK INTO PLAY.
UM, AND, AND WHEN YOU START ADDING IN ALL THESE COSTS AND THEN ALL THE ISSUANCE COSTS, YOU ADD ALL THAT STUFF IN, YOU'RE GOING FROM A $30,000 UNIT REHAB TO A $70,000 UNIT, LESS THAN HALF IT ACTUALLY GOING INTO THE REHAB.
THAT JUST DOESN'T SEEM EFFICIENT.
I MEAN, WELCOME TO HEAVILY SUBSIDIZED EXECUTION.
I MEAN, YOU GOT TAX CREDITS, YOU GOT BONDS, YOU GOT, YOU KNOW, MULTIPLE SETS OF LAWYERS, YOU GOT ISSUER FEES.
I MEAN, THIS IS THE TAX NOT A 50 50 RATIO.
LISTEN, THIS IS A SMALLER PROPERTY TOO.
YEAH, THAT'S, IT'S NOTHING THE SCALE, I MEAN, WE'VE BEEN SEEING DEALS OVER 300 UNITS.
SO YEAH, AS IT GETS SMALLER FIXED COSTS THAT ARE RELATED TO ISSUE, IT'S BECOME A LOT HIGHER RELATIVE TO THE, YOU KNOW, BASIS OF THE DEAL.
WHICH AGAIN, THAT MAY BE A CRITERIA WE'VE GOTTA CONSIDER.
LIKE WHERE IS IT EFFICIENT TO DEPLOY OUR PRECIOUS CAPITAL? UM, WE'RE NOT HITTING, NO, WE'RE NOT EVEN CLOSE.
BUT NEVERTHELESS, I DON'T THINK THAT GIVES US LICENSE TO BE INEFFICIENT AND THE INDUCEMENT SAYS PROVING UP TO A CERTAIN NUMBER, RIGHT? MM-HMM
SO WE'RE NOT EVEN LOCK IN ON TODAY.
YEAH, WE'RE NOT, I I THINK IT, I THINK IT WOULD BE HELPFUL JUST IN FUTURE CASES TO HAVE A LITTLE BIT MORE DETAIL ON THE ISSUANCE COSTS, THE MISCELLANEOUS ITEMS THAT IT DOES STAND OUT.
YOU KNOW, THERE'S A LOT OF QUESTIONS TO THAT, SO TOTALLY GET THAT IMPROVEMENTS.
BUT THAT'S, WELL, AND LOOK, AND LOOK THE IMPROVEMENTS AS WELL, JUST TO GREATER DETAIL, WHAT IS THE SCOPE OF WORK THAT NEEDS TO HAPPEN? SURE.
IS THIS TIME SENSITIVE IN THAT COULD WE DEFER THIS AND SAY, HEY GUYS, COME BACK IN A MONTH AND GIVE US THE DETAIL, GIVE US PICTURES, GIVE US BUDGETS.
LIKE, I MEAN, AS FAR AS EXISTING PROPERTY, SO WE'RE NOT CHANGING AS FAR AS THE LOOK AT THE PROPERTY REPAINT THE WHOLE PROPERTY, BUT IT'S NOT STATION HEALTH, I UNDERSTAND.
NO, BUT WE, WE NEED, WE NEED, WE NEED A GREATER SCOPE OF WORK.
AND I THINK THERE'S JUST TOO MANY QUESTIONS FROM THE PEOPLE, YOU KNOW, FROM THE BOARD MEMBERS ABOUT WHAT'S BEING DONE AT THE PROPERTY.
YEAH, I'D LIKE TO SAY MORE ABOUT THE SCOPE WORKS, WHAT, YOU KNOW, 53,000 ARE PER TO UNDERSTAND EXACTLY WHAT THAT IS.
THINK A LOT OF PEOPLE BROUGHT UP ON THIS LANE AND, AND THE, UH, ALL THE, YOU KNOW, 15, JUST WANNA, CAN WE SEE SOME PICTURES OF THE INSIDE OF YES.
BACK TO AND TO DAVID'S POINT, I MEAN, SOME OF THIS IS PREEMPTIVE, RIGHT? AND AS WE'VE LEARNED
MONEY ON, I MEAN, THERE RESPECT AT THE AGENCY MEETING, YOU DON'T HAVE TO TALK ABOUT THAT.
RIGHT? AND JUST A REMINDER ABOUT THE LEVEL THAT WE'RE AT RIGHT NOW WITH AN INDUCEMENT, IF WE INDUCE AND ASK FOR ALL THESE THINGS WHEN THEY COME BACK, THE WORST THING THAT HAPPENS IS THEY WASTE THEIR TIME.
SO I'M JUST WONDERING WHY WE WOULD NECESSARILY YOU WANT YEAH, YOU WANNA APPROVE THE O YOU AND LET THEM, BECAUSE WE'RE STILL CONSIDERING DETAILS, BUT WE DO WANT THOSE DETAILS, BUT THEY CAN GO AHEAD DO THAT IF THEY WANT TO SPEND THE TIME DOING IT.
YEAH, YOU'RE YOU'RE RIGHT, BECAUSE IT STARTS THE CLOCK, RIGHT? SO I GUESS THAT'S MY THING.
IT'S LIKE, I DON'T MIND APPROVING IT, THE INDUCEMENT TODAY, BUT
[01:35:01]
UNDERSTANDING LIKE THERE'S A LOT OF WORK ON YOUR END THAT NEEDS TO COME BACK AND GET AN MOU.WOULD YOU RATHER US DO THAT? OR WOULD YOU RATHER US GIVE YOU A MONTH AND COME BACK AND HAVE THIS DISCUSSION AGAIN? SO INDUCEMENT GIVE FOR 18 MONTHS, SO MAYBE TOO MUCH.
WELL, WHAT, WHAT YEAR ARE WE TALKING? IS THIS LOTTERY OR IS THIS THIS YEAR'S LONG AGO? THIS YEAR.
IF I CAN INTERJECT, I THINK, YOU KNOW, WE, WE'VE, I I'VE BEEN TAKING NOTES AND WE, WE, I HEAR YOUR CONCERNS AND, AND WHERE YOU WOULD LIKE TO SEE ADDITIONAL INFORMATION AND, YOU KNOW, TO SAVE US FROM ME GOING THROUGH AN ENTIRE SCOPE OF WORK RIGHT NOW, I DON'T THINK YOU GUYS WANT TO SIT THROUGH THAT, BUT I'M, IT'S, I'VE GOT IT IN FRONT OF ME AND WE CAN CERTAINLY BRING A HARD COPY OF THAT AND SEND IT TO YOU GUYS IN ADVANCE OF THE NEXT MEETING, UM, AND GO OVER, YOU KNOW, MORE ABOUT THE RELOCATION PLAN, UM, SCOPE OF WORK AND, AND ANY OTHER CONCERNS THAT YOU MAY HAVE.
BUT, UM, YOU KNOW, IT, IF WE COULD, YOU KNOW, SEEK AN APPROVAL TODAY IF Y'ALL ARE COMFORTABLE WITH IT, AND THEN STAY WITHIN OUR TIMELINE.
YOU KNOW, WE HAVE A VERY KIND OF REGIMENTED TIMEFRAME IN WHICH, YOU KNOW, WE NEED TO HIT COURT, UM, YOU KNOW, DIFFERENT MEETINGS AND EVERYTHING ELSE WITH THIS DEAL IN ORDER TO MEET OUR CLOSING TARGET LATER THIS YEAR, LET'S PUT, ARE YOU IN A REFI SITUATION RIGHT NOW? OR WHAT'S, WHAT'S SET CLOSING TARGET? THE CLOSING TARGET IS NOVEMBER.
UH, WE ARE, WE ARE IN A BRIDGE DEBT SITUATION.
UM, SO WE, WE WOULD, WE WOULD CLOSE INTO A PERMANENT MORTGAGE WITH FREDDIE MAC.
I LOOK, IF THIS WERE TO GET APPROVED, I JUST TELL YOU RIGHT NOW, I THINK THERE'S SERIOUS CONCERNS FROM THIS BOARD.
UH, SO IT'S ONE OF THOSE, LOOK, I'M OKAY APPROVING IT.
JUST TELL YOU, THERE'S JUST A LOT OF WORK TO BE DONE TO MAIL YOU.
AND I'M, I CERTAINLY THANKED THE PRICING AND THE ACQUISITION PRICE PARTNERSHIP THAT WE'LL BE ENTERED INTO IS GONNA BE A MASSIVE, UH, DISCUSSION.
AND WE HAVE BEEN THROUGH THIS BEFORE AND WE DID SOME DEALS WITH A GROUP CALLED DEVCO, WHERE I LIVED TO REGRET THAT WE WENT OFF AN APPRAISAL, WHICH HAD A PROPERTY VALUE FORECAST, YOU KNOW, ABOUT TWO YEARS AGO, YOU KNOW, AND THERE WAS A MASSIVE SELLER NOTE DONE AFTER THAT.
SO THAT IS SOMETHING THAT'S GONNA BE A BIG PART OF DISCUSSION AS WELL.
SO THAT IS NOT FOR SURE, I ASSURE YOU WE'RE NOT GONNA GO OFF ON APPRAISAL.
SO THIS, THIS APPRAISAL DOES NOT, THIS APPRAISAL DOES NOT ALIGN WITH, WITH THAT, WITH THE FOUR CAP OR, UM, I UNDERSTAND, YOU KNOW, ANY, ANY OF THAT.
SO YOU GOTTA HEAR WHAT'S BEING TOLD TO YOU RIGHT NOW,
IT'S JUST THE, THE APPRAISAL, THERE'S OTHER FACTORS AND THAT'S, YOU'RE GONNA HAVE TO ACCEPT THE RISK THAT WE WILL NOT GO OFF THE APPRAISAL FOR THE ACT OF DISTRICT PRICE.
I'M TELLING YOU RIGHT NOW, HISTORICALLY, WHAT OFF THE, WELL, HISTORICALLY WE'VE GONE ON THE APPRAISAL AND RIGHT NOW WE HATE IT BECAUSE YOU BUY SOMETHING IN 2003 AND YOU MARK IT UP, YOU KNOW, X PERCENT, I MEAN, VALUES HAVE GOTTEN DONE NOTHING BUT GONE DOWN.
AND THEN YOU HAVE A SELLER NOTE THAT FINANCED IT.
WELL, THAT MEANS IF YOU HAVE A SELLER NOTE THAT NEEDS TO FINANCE IT, IT'S NOT WORTH IT.
THAT'S WHAT A SELLER NOTE DOES.
SO THAT'S GONNA BE A PART OF THE DISCUSSION.
AND ONE MORE THING WHEN YOU COME BACK, I WANNA KNOW MORE ABOUT THE RESIDENTIAL SERVICES.
SOMETHING WE HAVEN'T TALKED ABOUT TODAY WAS REALLY LIKE YOUR PRESENTATION TODAY.
UM, I I JUST REALLY WANNA SEE LIKE WHAT THE, THE DAY-TO-DAY LIVES OF ARE THESE SENIORS THAT ARE LIVING THERE AND WHAT KIND OF SERVICES THAT YOU'RE PROVIDING.
YOU ALL ABLE TO SEE THE, I GUESS Y'ALL ABLE TO THE APPLICATION.
THERE'S THERE, THERE'S VARIOUS DIFFERENT ACQUISITION PRICES ON THE APPLICATION, BY THE WAY,
SO THAT'S ANOTHER THING THAT PROBABLY NEED TO TALK.
WE CAN DEFINITELY HIT ON THAT NEXT TIME.
THAT'S, WELL, OKAY, SINCE THEY GO AHEAD, I ASKED WHAT THEY PREFER AND THEY SAID RATHER HAVE US VOTE TODAY TO COME BACK NEXT MONTH.
SO I'M GONNA MOVE TO APPROVE THE DO SMITH.
SO, UH, WE HAVE A MOTION TO APPROVE BY DIRECTOR PERIN AND, UH, SECOND BY DIRECTOR SADIE.
WAIT, CAN I ASK ONE MORE QUESTION? YEAH, GO AHEAD.
WHAT HAP I MEAN, IF YOU HAVE A HARD A DROP DEAD DATE WITH THIS BRIDGE LOAN OF NOVEMBER, WHAT ARE THE CHANCES THAT WE CAN GET A DEAL DONE BY THEN? WELL, THAT SEEMS THAT IS NOT, THAT, THAT IS NOT OUR DROP DEAD DATE.
THAT, THAT'S JUST OUR INTERNAL TARGET FOR RES SYNDICATION BASED ON THE MEETING TIMELINES WITH THIS BOARD AS WELL AS, UH, T-D-H-C-A.
WHEN DOES THE BRIDGE LOAN EXPIRE? AND, I MEAN, I'M SURE THERE'S REMEDIES, BUT WHEN DOES IT EXPIRE? UM, WE TOOK OUT A FIVE YEAR LOAN IN 2023, SO TWO YEARS FROM NOW.
WHAT, WHAT RANGE IS THAT LOAN? SORRY, WHAT WAS THAT? WHAT'S THE RATE OF THE
[01:40:01]
LOAN? LTV, CAN YOU US? I MEAN, WE NEED TO KNOW THE RATE OF THE LOAN.UM, I'LL HAVE TO GO BACK AND LOOK.
IT WAS A FREDDY FACILITATED BRIDGE LOAN, BUT I'LL, I'LL, I CAN GO BACK AND CHECK THREE.
FAVOR, DIRECTOR DEWAN RUDOLPH.
UH, NONE IN FAVOR, NO TREASURER JACK MARSHALL SEAT.
UH, VOTE TO APPROVE, OBVIOUSLY WITH ALL THE QUESTIONS THAT YOU HAD ANSWERED, DIRECTOR PATTY COLLINS, APPROVE DIRECTOR KEVIN HUNTON, ABSTAIN, DIRECTOR LESLIE
NOT IN FAVOR, DIRECTOR RYAN WARREN APPROVED, OR SECRETARY TONY PAGE APPROVE.
SEAN, I, I WILL GO ALONG WITH THE FAVOR RIGHT NOW.
THANK YOU FOR NOT MAKING ME DECIDING.
THAT'S, UH, SIX YESES AND FOUR NOS, UH, BY MYSELF.
SO ACTUALLY MY A I THINK WE'RE TABLING THAT ONE FIRSTLY, RIGHT? YES.
WHICH ONE? UH, PAUL? YEAH, WE'RE TABLING SO THEY'RE NOT HERE, BUT IT'S COMING BACK TO JOHN.
OH, THEY ACT YOU DON'T HAVE TO ACT.
OKAY, LET'S GO TO SOMETHING EASY.
NINE RESOLUTION HARFORD LIVING LOCATED AT 400 NORTH STREET FALLS, SORRY, NORTH FALLS STREET, DALLAS, TEXAS.
AND THEN CONVERTED TO A MULTIFAMILY RESIDENTIAL DEVELOPMENT.
A CONSIDER ADOPT A RESOLUTION APPROVING A MEMORANDUM OF UNDERSTANDING WITH HARFORD LIVING LLC OR DESIGNATED AFFILIATE FOR THE ACQUISITION, FINANCING, DEVELOPMENT AND OPERATION OF THE HARTFORD, WHICH WE CONVERTED INTO A MULTI-FAMILY RESIDENTIAL DEVELOPMENT.
B, CONSIDER AND ADOPT A RESOLUTION PURSUANT TO SECTION 3 94 9 0 5 OF THE TEXAS LOCAL COURT REGARDING ANTICIPATED ANNUAL RATE REDUCTION, OR THE HARTFORD GENERAL MANAGER.
WHAT WE HAVE HERE, MR. I, THIS PRESENTATION THAT IS CONCERNING THE HAR GROUP.
WE HAVE HAD THIS PROPOSAL PENDING NOW FOR QUITE A WHILE.
IT'S GONE THROUGH, UH, A LOT OF DIFFERENT THINGS, INCLUDING THE LEGISLATIVE CHANGES.
IT'S REALLY KINDA SCREWED UP A LOT OF TIMING ON THIS.
UH, IT'S BEEN A LONG TIME WAITING AND NOW THERE'S A LOT OF NEW REQUIREMENTS AND WE HAD TO JI ALL OF THE MLU AND SO NOW WE'RE, WE'RE BACK.
AND I BEEN NICE ENOUGH TO COME AT 10% AGAIN.
SO I THINK THEY HAVE A SMALL
I KNOW WE HAVE A LOT OF NEW BOARD MEMBERS.
UH, AND SO MIKE, THANK YOU FOR, FOR COMING.
UH, AND YOU GOTTA TURN OFF THE MIC.
THANK YOU FOR INVITING US TODAY.
UM, UH, THANK YOU BOARD MEMBERS.
SO WE HAVE A SLIGHT DECK ON THE SCREEN.
UH, MYSELF AND JOHN WILLIAMS, WERE PART OF DEVELOPMENT TEAM THAT BEEN WORKING ON THIS PROJECT FOR THE PAST KIND TWO YEARS NOW, SINCE 2020.
MY NAME IS JOHN WILLIAMS, AND AS I MENTIONED, THIS IS LIKE BS.
WE LEAD THE DEVELOPMENT EFFORTS OF THE 14TH STORY HARTFORD BUILDING IN DOWNTOWN DALLAS.
UH, DEAR MEMBERS OF THE BOARD, OUR COMMITMENT TO THE CITY, UH, COMES DOWN TO A TRIPLE BOTTOM LINE.
SO SHALI, UH, WE ARE EMPOWERING CITY OF DALLAS BY PROVIDING HIGH QUALITY WORKFORCE HOUSING FOR THE PEOPLE THAT KEEP THE CITY
[01:45:01]
RUNNING.WE ARE TRANSFORMING AN UNDERUTILIZED BUILDING, UH, INTO AN ECONOMIC ENGINE THAT CREATES OPPORTUNITY FOR LOCAL RESIDENTS AND BUSINESSES.
THIS PROPERTY IS LOCATED AT THE INTERSECTION OF ST.
PAUL AND THE DART STATION, THE ST.
PAUL DART STATION, WHICH PROVIDES DIRECT ACCESS TO PUBLIC TRANSPORTATION.
AND OUR REDEVELOPMENT OF THE HARTFORD BUILDING WILL HELP CLEAN UP AND MAINTAIN THESE STREETS AROUND THE ST.
AND THEN, OF COURSE, UH, THIRDLY, ECOLOGICALLY, UH, WE ARE RECYCLING AN EXISTING STRUCTURE.
SO WE'RE PROVING THAT MODERN LIVING CAN SEAMLESSLY MEET AFFORDABILITY AND ENVIRONMENTAL PRESERVATION.
LOCATED IN THE, IN DOWNTOWN DALLAS IS 217 UNIT MIXED USED WORKFORCE HOUSING DEVELOPMENT.
IT'S FULLY DE AND READY TO MOVE.
UH, WE HAVE RECEIVED FULLY APPROVED CITY OF DALLAS BUILDING PERMITS.
OUR CONTRACTOR HAS COMPLETELY REID THIS PROJECT, ENSURING OUR COSTS ARE A HUNDRED PERCENT UPDATED.
THEY DID THAT TWICE BEFORE THE PERMITS AND THEN ONCE AFTER THE PERMIT.
THIS MAKES, THIS ENSURES THAT WE'RE ALIGNED WITH ALL OF CITY OF DALLAS'S REQUIREMENTS.
WE'RE, WE'RE NOT GUESSING THE NUMBERS WE'RE COMPLETELY LOCKED THEM IN OFFICE TO RESIDENTIAL CONVERSION.
IT IS THE LARGEST GROWING SEGMENT IN MULTIFAMILY HOUSING.
AND DALLAS MARKS NUMBER FOUR, NATIONALLY.
UH, IT IS BACKED BY TEXAS'S ADAPTIVE REUSE LEGISLATION.
CAPITAL IS FLOODING IT INTO THE SPACE, BUT REALLY EXECUTION IS EVERYTHING.
SOME ADAPTIVE REUSE PROJECTS, THEY FAIL, UH, DUE TO ZONING DELAYS AND UNPREDICTABLE COST.
AND WE'VE DESIGNED THIS HARD FOR A LIVING TO COMPLETELY BYPASS THIS.
THOSE, UH, CONTROLS FINANCIAL VIABILITY AND, AND THE CAPITAL STACK SAY, WHILE MANY PROJECTS FAILED BECAUSE OF THE GAP BETWEEN ACQUISITION AND CONVERSION, COST IS TOO WIDE.
THE HARTFORD LIVING UTILIZES A LAYERED CAPITAL STACK TO KEEP PROJECT FINANCIAL STRONG AND RENTS HIGHLY ACHIEVABLE.
NUMBER TWO, ENTITLEMENT RUNWAY AND ZONING WHERE OTHER DEVELOPERS FACE DEVASTATING 18 TO 36 MONTH DELAYS, ZONING DELAYS.
WE HAVE COMPLETELY ELIMINATED THAT TIME ENTITLEMENT RISK BY SECURING THIS FULLY APPROVED CITY OF DALLAS BUILDING.
PERMIT NUMBER THREE IS THE, THE BUILDING TYPOLOGY IN THE ARCHITECTURE.
INSTEAD OF FIGHTING DEEP FLOOR PLATES AND SPIRALING CONSTRUCTION, UH, STRUCTURAL COSTS, OUR BUILDING FEATURES THE IDEAL ARCHITECTURAL FOOTPRINT, PERFECTLY OPTIMIZED FOR AN EFFICIENT RESIDENTIAL CONVERSION.
HARTFORD BUILDING HAS WINDOWS ON ALL SIDES, WHICH ALLOWS EVERY UNIT TO HAVE A VIEW.
LASTLY, THE, THE MARKET DEMAND AND THE A MI ALIGNMENT, RATHER THAN TARGETING LOW ABSORBING LUXURY TIERS, ELIMINATE MARKET MISMATCH BY FOCUSING ON WORKFORCE HOUSING.
THIS IS THE HIGHEST DEMAND AND THE FASTEST ABSORBING RENTAL SEGMENT IN DALLAS.
THE HEARTFORD LIVING HAS THE PERMIT, IT HAS THE PRICING AND THE PURPOSE.
IT IS OUR SHARED RESPONSIBILITY TO MOVE FORWARD DALLAS FORWARD TOGETHER WHERE WE CAN BRING THIS VISION LIFE.
I'D LIKE TO BRING MY BAS HERE TO, TO COMPLETE THE REST OF THIS.
SO THE, ON THE NEXT SLIDE, UH, WE TRY TO PLAY WITH THE CAPITAL STACK THAT'S VERY CONSERVATIVE RIGHT NOW.
OUR CONSTRUCTION DEBT IS AROUND 47% ON COST.
AND, UH, AGAIN, UH, LIKE JOHN SAID, WE'VE BEEN WORKING ON THIS PROJECT FOR THE PAST TWO YEARS.
SO WE HAVE A HUNDRED PERCENT COMPLETE TT AND, UM, YOU KNOW, ALSO FULLY BID OUT COMES WITH OUR CONTRACTOR, AND NOW WE HAVE A HISTORICAL TAX WITH, IN OUR CAPITAL STOCK RIGHT NOW, WE IZING OUR TAX CREDIT.
93 CENTS ON THE DOLLAR, RIGHT? HOW MANY? 93 90 3 CENTS ON THE DOLLAR.
AND THAT'S HELPING US IF YOU ON THE NEXT ONE, THAT'S FINE.
THAT'S HELPING US KEEPING OUR 47% LEVERAGE.
AND THAT, AGAIN, IT'S GONNA BE A COMBINATION OF THIS SORT,
UH, ON THE NEXT SLIDE HERE, IT'S A LIST OF TWO DIFFERENT PROJECTS THAT'S BEEN AROUND HERE IN
UH, THE SAME NATURE OF ADAPT ADAPTER, REUSE, AGAIN, THERE'S ALMOST 3000 UNITS IN THE TOP LINE, AND OUR OURSELF AS WELL.
WE HAVE MORE THAN 800,000 SQUARE FOOT OF ADAPTER, REUSE COMPLETED ACROSS THE COUNTRY.
UH, IF YOU NEXT SLIDE, SEE, UH, ON THE NEXT SLIDE, ONE OF THE CASE STUDY, IT'S, UH, ONE OF OUR MOST ICONIC PROJECT.
THIS IS, UH, ONE OF OUR COMPLETE PROJECT THAT WE'VE DONE IN CLEVELAND.
THE AT TH BUILDER WAS VACANT FOR 10 YEARS, UH, 600,000 SQUARE FOOT THAT WE TOOK FROM A HUNDRED UTILIZED,
[01:50:01]
UH, OFFICE BUILDING INTO A MIXED USE APARTMENT BUILDING WITH ONE FOR RETAIL.AND IF YOU GO ON THE NEXT SLIDE, YOU'LL SEE, UH, WE TOOK THIS BUILDING FROM INSTITUTIONALIZED, UH, OFFICE BUILDING, UH, THIS SLIDE.
FOR AN INSTITUTIONALIZED UP OFFICE BUILDING.
AND WE CONVERT SAME OFFICE BUILDING AND 360 7 UNITS AND FULL DECK AS WELL.
AND THE LOBBY THAT'S PRETTY INVITING TO DOWNTOWN TAN.
IT'S THE SAME STORY HERE WE TRYING TO DO WITH THE
AND THEN THE BUILDING, IT'S, WE BE ON A SMALL SIDE IN THIS ONE AND, UH, WE FEEL PRETTY GOOD ABOUT THE BUILDING.
AND, UH, WE ARE TRY TO ACHIEVE 2017 UNITS WITH THE GOOD BETWEEN 60 AND 8% AND, UH, UH, AROUND 10% OF THE UNIT WOULD BE MARKET.
UM, THAT'S THE END OF THE PRESENTATION QUESTION.
UM, BEFORE WE BEGIN OR START WITH QUESTIONS, WE HAD THE, UH, NEW DEAL COMMITTEE, UH, LOOK AT THIS LAST WEEK AND THINK YOU KIND OF SCRUTINIZED IN PRETTY GOOD DETAIL.
UM, SAYS DIRECTOR READ, UH, MARSHALL SEAT, KIND OF WHAT WAS YOUR, WHAT WERE THE CONCERNS? WHAT WERE THE THOUGHTS? WHAT WAS, UH, MAYBE THE RESULT OF THE DISCUSSION? WELL, THERE WAS A LOT OF CONCERN ABOUT THIS DEAL.
SO I, I PERSONALLY, I GUESS I'M GONNA STICK WITH MY HUNDRED PERCENT NEGATIVITY,
UM, I'VE DONE A LOT OF THESE DOWNTOWN DEALS.
MY, UH, ONE OF MY MAIN CLIENTS HAS REALLY DONE SEVERAL OF THE ONES YOU HAD IN YOUR STACK, BUT THEY'RE NOT WORKING.
UM, THESE, UH, THINGS ARE VERY EXPENSIVE TO REDO.
THESE DEALS WERE ALL LUXURY DEALS AT, AT, AT HIGH RATES, MARKET RATES AND THE NUMBERS STILL ONE'S GONE BACK TO BLEND, OTHER ONE'S FAILED OUT OF, UM, THEY, MY, MY CONCERN IS THE COSTS JUST TOO HIGH TO TO, TO MAKE THESE THINGS WORK.
UM, THIS IS NOW, THIS BUILDING HAS BEEN SITTING EMPTY PLUS YEARS.
I KNOW MY CLIENT WILL AT IT 10 PLUS YEARS AGO.
AND BASIC, THIS BUILDING, THIS BUILDING PART, UH, IF, UM, IF THIS THING WAS BEING GIVEN FREE, YOU KNOW, MAYBE THERE'S A POSSIBILITY TO, I THINK THERE'S, WHAT WAS THAT, $13 MILLION OR $16 MILLION PURCHASE PRICE, SOMETHING LIKE THAT.
I THINK IN THERE, ADD ALL THAT, ADD ALL THE COSTS, ADD THE OFFICE OF DOWNTOWN, YOU KNOW, WHERE DOWNTOWN'S GOING.
UM, THEY'RE, THEY'RE THE, THE MARKET RATIOS AREN'T, AREN'T FILLING UP.
AND IT JUST SEEMS THE LAW HAUL RIGHT NOW EXPENSIVE.
RAISE HAVE, FIND A, FIND A PIECE OF LAND AND GO FLAT TO TRY TO PUT ALL THE MONEY THERE AS THE NORMAL POSITIVE POLL WANTS.
UM, AND I RECOGNIZE THAT WE'RE ALREADY, YOU KNOW, I THINK WE'D ALREADY DONE AN MOU WITH YOU AND I WANTED ALL THIS WITH, I KNOW Y'ALL DONE A LOT OF WORK TO GET TO, THERE WE ARE TODAY.
AND IT'S KIND OF UNFORTUNATE THAT YOU'VE GOT A LOT OF, UM, ONE, WE'VE GOT THE HB 21 THAT CHANGES AND THAT ONE OF THE DISCUSSION POINTS WE HAD WAS THAT THIS IS A WORKFORCE DEAL, UM, NOT LITECH.
SO WE HAD THE NEW REQUIREMENT OF THE, UH, RENT SAVINGS.
AND FROM WHAT I UNDERSTAND, ALTHOUGH I KNOW ERIN WAS ON VACATION, WASN'T ABLE TO BE ON THE CALL WITH US.
UH, I THINK WE WERE GONNA HAVE SOME TROUBLE WITH HOW ARE WE GONNA MEET THAT REQUIREMENT.
UM, SO I THINK WE HAVE THAT ISSUE, BUT, AND THEN I THINK CLIFF'S POINT OF JUST THE ECONOMICS OF THE DEAL, IS IT REALLY GONNA WORK? AND THEN THE THING THAT WE DON'T WANNA TALK ABOUT, BUT THERE'S JUST A LOT OF POLITICAL ISSUES ABOUT DOWNTOWN RIGHT NOW.
AND I'M NOT SURE, I THINK AS A, THE SUBCOMMITTEE WE TALKED ABOUT, I LOVE THE IDEA OF, OF OFFICE CONVERSION IN DOWNTOWN WORKING ON HOUSING IN DOWNTOWN.
I THINK IT'S PROBABLY JUST NOT THE RIGHT TIME GIVEN THE OTHER ISSUES THAT, THAT WE SAW.
SO THAT WAS THE GENERAL TAKEAWAY.
BUT, BUT WE ARE ONLY THREE PEOPLE.
UM, BEFORE WE BEGIN, I GUESS A QUICK QUESTIONS.
YOUR LENDER ODD ISSUE WITH THE 3 9 4 HSC WORKFORCE PARTNERSHIP.
IT'S LIKE THE FINANCING HAS BECOME REALLY UNSURE.
YOU KNOW, I'M NOT SURE AGENCIES ARE LENDING OFF OF, UH, YOU KNOW, HSC DEALS FOR STRAIGHT UP WORKFORCE.
WHO IS YOUR LENDER? WHAT IS THE, WHAT IS THE DEBT EXECUTION ON THIS PROJECT? WE HAVE, WE HAVE
[01:55:01]
RESOURCE FINANCING FROM THE LOCAL BANK.UH,
WE TRANSFERRED INTO TERM, INTO LONG TERM FINANCING, REFINANCING WITH THAT SAME BANK.
IT'S THE SAME LENDER WHO IS THE LENDER.
SO RIGHT NOW, I'M JUST TRYING TO KEEP THE NAME PRIVATE, BUT UH, LIKE, UH, IT, IT'S OUR CONNECTION.
UH, IT'S ENTERPRISE BANK ACTUALLY.
SO YOU HAVE A, THAT'S FROM, YOU HAVE A COMMIT.
UH, SO WE HAVE THAT BIG INTO OUR, I GUESS THE REAL BIG QUESTION I HAVE IS WHY DIDN'T YOU GO TO THE PFC FOR THIS? THE OWNERSHIP STRUCTURE IS WAY MORE SIMPLER THAN OURS.
THE FINANCING IS WAY, I MEAN, IT'S MORE FINANCEABLE, YOU KNOW, THERE'S NO PUBLIC BENEFIT TESTS, ANNUAL PUBLIC BENEFIT TESTS.
THE EXECUTION OF TAKING A DOWNTOWN TOWER INCURRING TO RESIDENTIAL TO ME JUST MAKES WAY MORE SENSE FOR THE PUBLIC FACILITY CORPORATION IN THE HFC.
WHY DO YOU COME TO UP AND WHY HAVE THE CON I'VE KIND OF ASKED THIS OF STAFF, I'VE ASKED THIS OF EVERYBODY, WHY IS THIS BEFORE OUR TABLE AS OPPOSED TO THE PFC? AND IT MADE NO SENSE TO ME OR AARON, MAYBE, I THINK PREVIOUS TO HB 21 IT WAS MORE ATTRACTIVE.
I THINK PFC HAS, WELL THIS, THIS IS NOT REALLY AN ACQUISITION.
RIGHT, BUT IN TERMS OF, BECAUSE THEY ALREADY OWN THE BUILDING.
WELL, NO, IT, IT'S NOT A, YOU NOT, YOU'RE NOT BUYING MULTIFAMILY YET RENOVATING, YOU'RE CONVERTING I PERSPECTIVE OF WHAT THE PFC BOARD DOES.
I THINK THE TERMS INITIALLY WHEN WE STARTED TALKING ABOUT THIS WERE FAVORABLE WITH THE HFC.
YOU KNOW, LIKE, LIKE JUST GO AT IT EVERYBODY.
AARON, CAN YOU SPEAK TO KIND OF FROM OUR PERSPECTIVE, WHAT OUR ROLE IS IN TERMS OF ANALYZING THE DEAL? TO MY UNDERSTANDING THAT WE'RE TYPICALLY MORE CONCERNED WITH WHAT OUR BOARD RISK IS IN ENTERING INTO A DEAL AND LESS ABOUT TRYING TO FEEL OUT WHETHER OR NOT IT'S GREAT FOR THEM IN THE LONG RUN.
I KNOW WE HAVE A RESPONSIBILITY TO BE, BE RESPONSIBLE AND STEWARD MONEY APPROPRIATELY, BUT TO WHAT EXTENT IS THE UNCERTAINTY OF DOWNTOWN THEIR RISK TO BEAR? AND IT DOESN'T HAVE ANY EFFECT ON HOW WE PARTICIPATE FIELD.
I MEAN, IT'S A TOUGH QUESTION TO ANSWER, RIGHT? I THINK OBVIOUSLY CLIFF HAS A POINT, YOU KNOW, WE DON'T WANNA GET INTO A DEAL THAT IS GOING TO FULL FAIL.
WE DON'T KNOW IF IT WILL OR IF IT WON'T.
BUT YOU CAN ONLY MAKE A DECISION BASED ON THE INFORMATION YOU HAVE, RIGHT? UH, NOW WOULD WE BE LIABLE FINANCIALLY? NO.
THAT'S HOW OUR AGREEMENTS ARE SET UP.
BUT THERE'S THAT OTHER PIECE OF THE MAJORITY OF THE RISK, RIGHT? BUT I WILL SAY THERE'S A CLEAR DISTINCTION BETWEEN A LUXURY HIGH-END APARTMENT THAT'S TRYING TO GET $4 SQUARE FOOT RENTS VERSUS WHERE THEY'RE AT.
AND CERTAINLY WE LOOK AT PUBLIC DEBT BENEFIT.
WE HAVE TO SEE WHERE THE DIFFERENCE IS ACTUALLY GONNA BE OVER TIME.
THAT'S SOMETHING THAT YOU GUYS CAN BE CONSIDERED AS WELL.
UH, BUT THERE'S A REAL NEED FOR WORKFORCE HOUSING IN DOWNTOWN, ANYWHERE IN THE CITY.
BUT PARTICULARLY IN DOWNTOWN, MOST OF THE STUFF THAT'S BUILT IS LUXURY.
YOU'RE TALKING ABOUT MOUNTAIN PLACE, YOU'RE TALKING ABOUT, UM, YOU KNOW, THE STUFF THAT'S BEING BUILT BY
THAT'S 99% PEOPLE CAN NEVER, EVER AFFORD, RIGHT? UM, AND SO I THINK IT'S A LITTLE BIT OF A FALSE EQUIVALENCY.
I ALSO SEE THE STORY OF DOWNTOWN IS A RESIDENTIAL STORY.
MORE PEOPLE ARE MOVING THERE, THERE'S 15,000 RESIDENTS.
THE GOAL IS TO HAVE IT UP TO 30,000 IN THE NEXT DECADE OR TWO, RIGHT? I MEAN, I'D RATHER BE PART OF THE SOLUTION AS OPPOSED TO JUST SUPPLEMENTING THE OFFICE VACANCIES.
BUT THIS DOES HELP SOLVE SOME OF THE OFFICE AGENCY.
HECK, I MEAN, YOU'RE TAKING 170,000 SQUARE FOOT BUILDING AND CARVING IT UP INTO 217 UNITS, WHICH IS A PRETTY GOOD UTILIZATION COMPARED TO WHAT I'VE SEEN.
I MEAN, THE BIGGEST ISSUE WITH THE CONVERSIONS IS COURSE THE COST, BUT TWO ALL LOSS SQUARE FOOTAGE, RIGHT? I MEAN, THE REASON THEY CAN'T DO BRIAN TOWER IS YOU ONLY GET LIKE 60% OF THE SQUARE FOOTAGE.
THAT BUILDING IS BASICALLY WORTHLESS.
BUT THIS ONE, YOU KNOW, THE 1950S BUILDING WHERE YOU CAN GET MOST OF THE SQUARE FOOTAGE INTO APARTMENTS, WHICH IS A UNIQUELY GOOD STORY.
I MEAN, THEY PUT TWO YEARS INTO IT.
UH, I'M INCLINED TO, TO TRUST THAT THEY'RE, YOU KNOW, THEY'VE DONE TWO YEARS WORTH OF WORK.
THEY WOULDN'T BE HERE IF IT WASN'T A SENSIBLE DEAL FOR THEM.
CAN I ASK A MAYBE DETAILED QUESTION? IN THAT HARD COST BUDGET, HOW MUCH CONTINGENCY DO YOU GUYS HAVE ABOVE WHAT YOUR CONTRACT CAME
[02:00:01]
BACK IN RIGHT NOW?BUT WE HAVE THE ABILITY 7% CONTINGENCY.
I, YEAH, I, I, I'VE LOOKED AT A FEW OF THESE CONVERSIONS IN MY CAREER.
THEY'RE JUST SO EXPENSIVE IN ALL THE SURPRISE WE FIND THAT THAT CONCERNS ME.
BUT, YOU KNOW, ON A NORMAL PROJECT GROUND UP, WE'RE USUALLY PUTTING 10, 12% ON THE PROJECT CONTINGENCY.
I WOULD THINK YOU WANT 15, 20% ON A DEAL LIKE THIS.
BUT AGAIN, THIS IS Y'ALL'S DEAL.
SO MAYBE THAT'S REFINED AND GOOD.
SO WHAT WE'VE DONE WHILE WE'RE WAITING ON, ON, ON, ON THE NEW LOG PASS, WE'VE DONE SELECTING DEMO ON THE EIGHT EIGHT FLOORS WHERE WE DEMOTION AND TYPE FLOOR.
SO WE SEE WHAT'S BEHIND THE WALLS AND THEN WE ARE BUILT, WE ARE BRINGING ALL OUR STUFF ON
WE, WE, WE SPEND A LOT OF TIME BEHIND THE SCENES TO MAKE SURE OUR COSTS ARE ACCURATE.
YOU KNOW, WE HAVE MORE FIVE LEADERS THAT CAME TO US.
WE LOCKED ALL THIS PRICES TO MAKE SURE WE CAN BUILD THIS, UH,
AND UH, WE, AND AGAIN, I WANT TO ADDRESS SOMETHING ABOUT THIS BUILDING HAS NOT BEEN VACANT IN FOR 15 YEARS.
SO THE, THE STORY OF PREVIOUS, SOMEONE TRIED TO STABILIZE THIS BUILDING AS AN OFFICE BUILDING, BUT IT DID NOT WORK.
SO THEY, THEY ENDED UP, IT TOOK, UM,
SO WHEN WE, WE, UH, WE, WE BOUGHT IT LIKE A FEW YEARS BACK.
YOU KNOW, THE BUILDING WAS AROUND UH, 40%, 45% OCC.
SO HE WAS NOT YOU OWN IT NOW? HUH? YOU OWN IT NOW? YEAH.
THAT'S WAY TO MITIGATE SOME OF THAT RISK.
'CAUSE YOU CAN GET IN THERE AND TEAR SOME BALLS OUT AND REALLY LOOK.
SO IT'S GOOD, BUT THEY'RE JUST INCREDIBLY EXPENSIVE FROM WHAT I'VE SEEN.
AFTER ALL THIS INCENTIVES, UH, UH, ACTUALLY INVESTED THAT HAVE MAXIMIZE EQUITY ARE HARD CALLS FOR UNITS TAKING DOWN ALL BOOKS, INCENTIVES COMING AROUND 178,000 PER MINUTE.
AND UH, THIS IS OUR TRUE COST FOR WE HAVE GOTTEN.
THAT'S BETTER THAN WE'RE DOING ANY OTHER DEALS.
AND DO I UNDERSTAND MO YOU CORRECTLY THAT THE FIRST FLOOR RIGHT NOW IT'S A RESIDENTIAL SPACE? YEAH, SO WE UH, COULD BE CONVERTED TO SOME KIND OF CONDO SITUATION SO THAT IT COULD BE RETAIL THEN WE WASN'T THAT THE HEALTH STUFF BEFORE.
SO WE REMOVE THAT PART REGIONAL PLAN WHERE WE CAME HERE, WE WANTED TO KEEP THE FIRST PART OF THE RETAIL.
THESE NEW USE IS GONNA BE HUNDRED PERCENT RESIDENTIAL AND THE FIRST FLOOR BE WE PUT A C THAT ALL WOULD HAVE FINANCIAL, HISTORIC TENANT FIRST FLOOR.
IS THERE ANY, IS THERE ANY CONCEPT OF, OF SEPARATE OWNERSHIP OF THIS STUFF? CONING AND TRYING TO, BECAUSE I KNOW THAT'S IN THE PREVIOUS ONE I WORKED ON WITH HISTORIC TAX, THAT IT'S, THAT KEPT THE HISTORIC TAX CREDIT COMPLIANCE PERIOD KEPT ANY OF THAT CO IMPLEMENTATION.
NO, MA HAVE A HUNDRED PERCENT.
THIS QUESTION FOR AARON, UH, I SAW THE PORTION OF THE MOU OR MAYBE THAT TALKED ABOUT, UH, CONSERVATION OR OTHER COLLECTIONS FOR SEWAGE WATER, SOMETHING LIKE THAT.
DOES THAT APPLY TO DBI AND THE DOWNTOWN PIT OR ARE THEY STILL SUBJECT TO THAT SPECIAL ASSESSMENT? YES.
CAN YOU ELABORATE? DBI DALLAS, UH, DOWNTOWN DALLAS INC.
YEAH, YOU PROBABLY HAVE TO PAY THAT PROBABLY YOUR TAX.
WELL IF, IF WE TAKE OWNERSHIP OF THE BUILDING, IT'LL BE A HUNDRED PERCENT TAX EXEMPT.
SO THEY WON'T BE GETTING, BILL WON'T BE GETTING ANY, YOU WOULDN'T HAVE TO PAY INTO THIS.
SEE THAT'S, I I THINK IT'S, I THINK IT'S CONFUSING BECAUSE IT'S NOT A TAX ASSESSMENT BASED OFF OF YOUR TAX REVENUE.
AND SO THAT'S WHY I WANNA BE CLEAR IN THE MOU SO THAT IT, IT'S NOT BEING USED AS A, A WAIVER OF THAT.
I I I JUST YOU'RE SAYING YOU WANT YEAH, I WANT YOU TO.
YEAH, I MEAN IT'S NOT, THE TAX ROLLS 4 MILLION BUCKS.
RIGHT? I I THINK THAT WAS SOMETHING WE WERE GONNA DO WITH THAT ONE DEAL CLOSE.
BUT THAT WAS AN ISSUE THAT BECAUSE OF THE DEEP EL RIGHT? I'M NOT GONNA, SORRY ABOUT THE TAX EXCEPTION.
IT'S BRIAN, IS THAT SOMETHING WE CAN INCLUDE, I GUESS YES.
MU OR WE CAN DISTRIBUTE IT ON DOCUMENTS? UH,
[02:05:02]
I THINK, I THINK WE WOULD, IF IT GETS APPROVED, IT'S APPROVED SUBJECT TO THAT CHANGE.IT USUALLY JUST SHOWS UP AS A SPECIAL DISTRICT IN YOUR TAX CALL.
WHAT? NO, IT'S, I JUST WANNA MAKE SURE YOU HAVE YOUR CITY OR YOUR COUNTY AND YOUR, POSSIBLY YOUR SCHOOL SPECIAL DISTRICT.
CAN I ASK A QUESTION TO YOU BX? UM, SO I KNOW WE TALKED ABOUT IT ON OUR COMMITTEE CALL ABOUT THE RENT SAVINGS AND SOME CONCERN ABOUT IF, IF THIS MEET THAT TEST.
AND MY QUESTION IS IF, IF WE FEEL LIKE IT CAN, BASED ON WHAT Y'ALL DISCUSSED SO FAR, AND IF IT CAN'T LIKE WE MOVE FORWARD, BUT THIS DEAL IT DOESN'T, THEN WHAT HAPPENS THAT, IS THAT A US RISK? A THEM RISK OF BOTH OF US RISK? I MEAN HOW DOES THAT WORK? WELL, SO BRIAN, YOU MIGHT WANNA TAG TEAM ME ON THIS.
'CAUSE WE HAD THE UNDERWRITING REPORT THAT HAS TO BE POSTED PRIOR TO LIKE FINAL APPROVAL, WHICH THAT'S STILL BEING DRAFTED.
SO AS OF LAST WEEK WHEN WE SPOKE AT REAL ESTATE COMMITTEE, THE, THE DRAFT UNDERWRITING REPORT WAS SHOWING THE AVERAGE UNITS HAD TO BE AT LEAST 18.5% MARKED DOWN FROM THE, THE MARKET RATE UNITS HAS SHOWN IN, IN THE DEVELOPER'S PROPOSAL.
I'M STILL WORKING WITH FIRST HOUSING ON THAT TO, TO SEE IF THAT IS ACCURATE.
'CAUSE THEY'RE ALSO KIND OF WORKING BACKWARDS TO SEE JUST DIRECTLY AGAINST THE DEVELOPER'S PROPOSED RENTS.
AND THEY'RE STATING THAT THOSE PROPOSED RENTS TO DON'T MEET THE QUAL THE UH, THE 50% REQUIREMENT AS OF YES.
AFTER NO WAS THE LAST I'VE HEARD BACK, SO I DUNNO HOW, I GUESS SO I DON'T KNOW HOW WE, I GUESS SO LIKE, I KNOW IT'S ALL NEW AND WE'RE WORKING IN THIS NEW ENVIRONMENT, BUT LIKE HOW DO WE MOVE FORWARD WITH IT? SO, I MEAN, BRIAN, WE, IF WE PRELIMINARY APPROVAL TO MOVE FORWARD WITH THE MOU AND THEN COME BACK.
YEAH, I MEAN, COME BACK FINAL.
THE STATUTE JUST REQUIRES THAT PRIOR TO FINAL APPROVAL AND THE UNDERWRITING REPORT HAS TO BE AVAILABLE AND POSTED.
UM, OBVIOUSLY WOULD'VE BEEN IDEAL TO HAVE THAT.
SO YEAH, THERE'S, YOU KNOW, TWO WAYS OF DOING IT.
JUST SIMPLY DELAY UNTIL THAT'S READY.
OR JUST KNOW THAT SUBJECT TO THAT REPORT COMING BACK IN ITS FINAL FORM, IT WILL NEED TO BE AVAILABLE AT POST.
SPEECH YOU'VE ALREADY SAID, LIKE, SEAN, WHERE'S THE WISDOM? YEAH, NO, NO, WE DON'T.
UM, I MEAN, THERE IS LIKE, FOR THREE 90 FOURS, THERE ACTUALLY ARE PERFECT FINANCING OPTIONS.
IT'S JUST WHETHER THEY'RE GONNA WRITE THE TAX EXEMPTION OR NOT.
YOU KNOW, YOU PROBABLY GET LOAN'S LIKE, WELL, WE'RE GONNA UNDERWRITE HUNDRED PERCENT OF THE TAX CREDIT FOR IT.
SO THERE ARE, YOU KNOW, THERE ARE FINANCING OPTIONS.
IT'S JUST TO GIVE YOU CREDIT FOR THAT.
UM, YEAH, I MEAN, I GUESS I'M TORN A LITTLE BIT.
IT'S LIKE, LOOK, WHAT IS THE HSC LOOK, I MEAN, HONEST WITH YOU.
I MAY BE BRINGING ONE HELL OF A RISKY DEAL NEXT MONTH.
UH, IT'S A HECK OF A STORY
SO IT'S NOT AS IF I'M NOT, YOU KNOW, GONNA BE BRINGING SOMETHING BEFORE THIS BOARD, BUT IT'S GOTTA, YOU KNOW, A DEATH OF PUBLIC PURPOSE.
UM, YOU KNOW, WHAT DO WE DO WITH DOWNTOWN? YES.
CAN I JUST START BY ONE BECAUSE I DIDN'T UNDERSTAND THIS.
SO THE, THE PURCHASE PRICE THAT I SAW IN THE PRESENTATION, THAT, THAT WAS ALREADY PAID.
I, AND, AND THEN, SO IT IS, YOU DEVELOP YOUR BUILDING
WE KNOW, WE KNOW WE TOP PERCENT SEND BROKER.
UM, I, AGAIN, WE, WE, WE ALSO HAVE A PORTION OF THAT BROKER, B2B THIRD.
SO IS THE, IS THE PARTNERSHIP, IS THE GROUP THAT OWNS IT NOW, THE ONE WHO'S GONNA DO THIS? OR IS THERE A SALE TO A NEW ENTITY OR THERE'S SOME CAPITAL, EITHER SOME PROFIT OR SOME EQUITY TAKEN OUT ON THE TRANSACTION.
IT'S NO WEEK FIVE, NO PROCEED.
[02:10:01]
IN THE DEAL.SO, SO PURCHASE PRICE, WHAT YOU GUYS PAY ON YOUR SETTLEMENT STATEMENT.
EVERYTHING INTO THE, WELL, YOU'RE PARTNERING WITH A, THAT PURCHASED IT.
CORRECT? THAT'S WHAT, THAT'S KIND OF WHAT I'VE READ THIS WHOLE THING.
THE HOSPITALITY, HOSPITALITY GROUP BOUGHT IT.
THEY'RE CONTRIBUTING THE BUILDING TO THE PARTNERSHIP.
BUT THERE IS THAT WHAT THE VALUE OF WHICH THEY'RE CONTRIBUTING TO THE PARTNERSHIP IS WHAT THEY PAID FOR IT.
MARKET VALUE, WHAT THEY, THAT'S BETTER.
WHAT WAS THE PLAN ORIGINALLY WITH THIS HOSPITALITY, WITH THIS AUDIT WAS TRYING TO THESE THINGS.
AND WHO IS YOUR PARTNER? WHO IS THE HOSPITALITY? UH, WILLIAM HOSPITALITY AND OLY.
UM, YEAH, ONE KIND OF GETS INTO, YEAH, DOWNTOWN IS NOT THE BEST STORY IN THE WORLD AT THE MOMENT, BUT WHAT IS THE HFC DID? I'M A LITTLE BIT TORN.
I DON'T WANNA STEP INTO THAT SITUATION.
'CAUSE LOOK, YOU KNOW, WHAT ELSE IS, WHAT ELSE IS GOING ON WITH MORE QUALITY OPEN? WE'RE GONNA STEP INTO, YOU KNOW, MEAN IT'S TOUGH.
UH, BUT WHAT, WHAT ARE WE HERE TO DO? YOU KNOW? DO WE TAKE MORE RISKS THAN AN OTHERWISE MARGARITA GROUP? 'CAUSE WE ARE A PUBLIC ENTITY AND WE DO WANT TO HELP, UH, REVITALIZE DOWNTOWN, YOU KNOW, BRING MORE FOOT TRAFFIC TO AN AREA.
BUT DOES THIS DO IT? I DON'T WANNA BE, BUT WHAT RISK ARE WE TAKING? WELL, THAT'S WHAT I'M TRYING TO, WE'RE WE'RE STILL THE GPS OF THE DEAL THAT YOU JUST CANNOT TELL ME.
I MEAN, WE'RE THE LANDOWNER TO THE GP.
WELL, SOMEBODY THAT THERE'S NOT SOME RISK.
I MEAN, NO, NO OFFENSE WHEN THE DEVELOPER LEAVES OFFICIAL RISK IS NOTHING ELSE.
I I WOULD SAY THAT THAT'S, THAT'S OUR BIGGEST RISK BECAUSE WHEN, IF THIS BOARD EVER GETS A BAD REPUTATION, YOU CAN SAY GOODBYE TO GETTING A COUNCIL.
I WOULD, I WOULD DISAGREE WITH THAT.
THERE'S ONE LITTLE, ONE LITTLE THING THAT KIND OF COMES TO, TO MIND IS PROVIDENCE BLACKBIRD TOWER.
ANYWAYS, SO, YOU KNOW, WE, WE OFFERED AN EQUAL CLOUD PARTNERSHIP.
I FIRST CAME ONTO THE BOARD AND I ASKED MYSELF, WHERE THE HECK IS THE SPONSOR TO THIS DEAL? IT WAS JUST THE TAX CREDIT INVESTOR.
AND WE, OUR GROUP WAS MANAGING THE DEAL.
THE G THE ACTUAL SPECIAL LIMITED PARTNER WAS THE SPONSOR.
THEY JUST PULLED, WELL, WHO'S LEFT HOLDING BACK? WELL, IT'S THE GP AND THE LANDOWNER, THE DEAL.
SO, YOU KNOW, I THINK THERE'S MORE RISK TO AN HSC THAN THERE IS ACTUALLY TO PFC BECAUSE THEY'RE NOT THE GENERAL PARK AND THEY OWN THE LAND IMPROVEMENTS.
BUT IT'S A STRAIGHT UP LEASEHOLD.
I MEAN, LIKE, I, I WANT TO HELP DOWNTOWN.
I, I, I WANT, I WANT THIS TO BE A GOOD PROJECT.
I CERTAINLY UNDERSTAND THE RISKS, BUT THERE ARE JUST CERTAIN RISKS TO THIS THING THAT I JUST HAVE A HARD TIME GRAPPL WITH RIGHT NOW.
I, I'M, YOU KNOW, IT'S FUNNY BECAUSE I'M COMING THE OTHER DIRECTION.
DO LESLIE, THIS, HERE'S, SO FOR ME, IF, IF YOU ALREADY OWN THE PROJECT AND YOU, YOU BOUGHT WHATEVER YOU BOUGHT IT FOR YOUR EQUITY'S IN YOUR DEBT'S, IN WHATEVER, IT'S, IF YOU'RE NOT PULLING ANY MONEY OFF AS, AS, AS PART OF A MARKUP AND, AND, AND PUTTING IT IN AND ALL THAT EQUITY STAYS IN, YOU'RE BRINGING IN NEW FINANCING.
UM, AND, AND YOU'RE GONNA GET SHORT TAX CREDITS.
UM, AND OUR OWN ONLY ROLE ON HERE IS, IS THAT WE'RE DOING THE TAX ACCEPT STRUCTURE.
UM, IF WE'RE COMFORTABLE WITH THE NUMBERS AND COMFORTABLE WITH ALL THAT, I'M, I'M, I'M PROBABLY MORE INCLINED TO TAKE, TAKE THE RISK AND THE, THE DOWNTOWN DOES NEED THIS.
AND IF, IF THEY CAN GET THIS DONE AT THE RIGHT PRICE, AS LONG AS, AS, YOU KNOW, AT A PRICE THAT, THAT THEY FIGURED OUT AND WE'RE COMFORTABLE THAT WE DON'T HAVE TO SUBSIDIZE ANY OF THIS.
AND IF THERE'S A BUST ON THE PRICE, THAT'S THE LENDER'S, UH, CONCERN.
WHAT ARE YOU DOING? HOW ARE YOU BRIDGING THE, THE HISTORIC TAX CREDIT MONEY.
'CAUSE THAT WON'T COME UNTIL IT'S PLACE TO SERVICE THE SAME LENDER.
SO IT'S ONE STOP SHOP NON OH OH, ENTERPRISE.
THE, BUT THEY'LL, IN ADDITION TO BRIDGING THE CONS, THEY'LL DO THE CONSTRUCTION LOAN.
THEY'LL ALSO BRIDGE THE TAX CREDIT.
BECAUSE THAT USUALLY DOESN'T COME INTO PLACE IN SERVICE, WHICH IS AFTER IT'S HOW MANY OFFICE CONVERSION DEALS IN DOWNTOWN CAN WE POINT TO THAT WERE SUCCESSFUL? ONE MAIN PLACE? YEAH.
[02:15:03]
PUBLIC BANK.THE OLD POST OFFICE CABLES I GUESS WAS WHAT POST OFFICE.
THERE'S ANOTHER PORTABLE DEAL ON PAUL FIVE TOUR PROBABLY.
I MEAN ENERGY PLAZA RENAISSANCE.
AND WE ALSO, UM, HAVE AN ONGOING CONVERSATION WITH DHC ABOUT THE BULK CURVE PROJECT BUILD VOUCHER.
YOU KNOW, THE CONVERSATION PRETTY WELL TO BE
SO THEY FEEL PRETTY GOOD ABOUT THIS PROJECT TO WALKER.
WELL, IS THERE A WAY THAT, WELL, SO WALKERS, ARE THOSE PROJECT BASED? YEAH.
HOW MUCH, HOW MUCH COULD BE PROJECT BASED RIGHT NOW? THE, THE
WHAT DO YOU DO WITH PARKING HERE? BORDER PARK? YEAH, SO WE HAVE A, THE PARKING, THERE'S A GARAGE UNDER WHAT'S KINDA THE RATIO SPOTS PER UNIT OR, SO RIGHT NOW WE HAVE JUST ONE AT 50 SPACE MORE THAN, SORRY, HOW MANY UNITS IS THIS AGAIN? 2, 2, 2 70.
DOES THAT PARKING GARAGE CONNECT TO THE ONE DALLAS CENTER PARKING GARAGE? IS THAT KIND OF CONNECTION? YEAH, IT IS.
I MEAN, IT'S A REALLY NEAT LOCATION, RIGHT? IT'S RIGHT ON THE BOTTOM.
THERE IS, LOOK, THERE IS A COMPELLING, WELL, MY OPINION THERE IS A, SOME COMPELLING LOCATIONS.
UH, YOU SAID 65% IS PROJECT BASED.
YOU BASICALLY GET A CHECK FROM WHOEVER FOR 65% OF THE UNITS EVERY MONTH.
HOW MANY VOUCHERS, WALKER VOUCHERS ARE DOWNTOWN RIGHT NOW? I MEAN, PLAY THE WALKER VOUCHERS AS YOU'RE SITTING SECTION EIGHT TO HIGH OPPORTUNITY.
I'M JUST WONDERING IN GENERAL, DOING, I IMAGINE NOT VERY MANY.
I DON'T CARE ABOUT MY SURPRISE, THERE'S NOT A LOT OF WORKFORCE HOUSING IN DOWNTOWN, BUT I HAVE TO.
THAT'S, WELL, THAT'S ALSO DEEPER AFFORDABILITY.
65% OF YOUR, UH, TENANT BASE IS ACTUALLY TAKEN VOUCHERS.
THAT MEANS YOU ACTUALLY GOT DEEPER AFFORDABILITY, FIXED INCOME WITH THE GAL.
SO IT IS A LEGAL REQUIREMENT AND PER EIGHT P 21 TO HAVE THAT MARKET SURVEY, CORRECT? CORRECT.
CAN WE, WE'RE ABOUT TO APPROVE AN MOUI MEAN, WE DO, WE DO SAY IN THE MOU THAT, UH, IT NEEDS TO BE RESTRICTED PURSUANT TO THAT UNDERWRITING REPORT.
SO THE CONCEPTS THERE JUST DON'T HAVE THE FINAL REPORT.
WELL, DOES THE, DO THE PROJECT BASED VOUCHERS AFFECT THE UNDERWRITING REPORT? 'CAUSE FRANKLY, I DON'T SEE HOW THAT CAN'T MAKE A SALE FIRST.
I JUST FOUND OUT THERE'S PROJECT BASED VOUCHERS SITTING.
THIS IS THE FIRST TIME YOU HEARD
BUT THAT'S NOT A, I MEAN, IT SOUNDS LIKE THE DISCUSSIONS ARE FAR LONG, BUT IT'S NOT A DONE DEAL OR, YES.
SO WE WE'RE NOT ON THE FINAL PHASE YET, BUT WE FOR A WHILE.
SO WE'D BE HAVING DISCUSSION WITH, SO WHEN, WHAT'S THE, WHEN WOULD YOU KNOW IF YOU'RE GONNA HAVE THOSE? UH, SO, SO RIGHT NOW WE DON'T KNOW, BUT THEY KNOW OUR HARD DATE TO ABOUT THIS PROJECT.
YOU KNOW, WE WANTED TO MAKE SURE THAT OUR NUMBER WORKS.
WE HAVE
SO, BUT I'M NOT THE DHA, BUT I IMAGINE THEY WOULD JUMP.
YOU WOULD THINK THEY WOULD THINK, YOU WOULD THINK.
AND THAT HELPS MITIGATE A SIGNIFICANT AMOUNT OF THE DEMAND RISK, RIGHT? JUST YOU HAVE GUARANTEED 65% OCCUPANCY ON PROJECT, PRESUMABLY.
I MEAN, I THINK THERE'S A SHORTAGE OF PLACES THAT ARE ACCEPTING BAPTIST, ESPECIALLY DOWNTOWN.
COUNCILMAN MEMBER LEY IS THE, JUST ASKING HER IS VERY SUPPORTIVE OF THE, THAT IS A, I MEAN, Y'ALL PROBABLY HAVEN'T BEEN ABLE TO TALK TO HIM SINCE WE HAVE IN PERSON.
HE CAME BACK OUT TO THE MEETINGS.
SO JUST, UM, IF THE RESOLUTIONS TO APPROVE THE MLU, THE MLU ALLOWS FOR DUE DILIGENCE, I THINK ON OUR PART, UM,
[02:20:01]
I, I, I WANNA DUE DILIGENCE.I'M, I, I PERSONALLY WANT TO GET TO A COMFORT LEVEL SO I HAVE AN UNDERSTANDING OF HOW MUCH SKIM THE DEVELOPER HAS IN THE GAME IN TERMS OF HOW MUCH MONEY THEY'VE ALREADY INVESTED, HOW MUCH IS STAYING IN, BECAUSE I DIDN'T HAVE A GOOD UNDERSTANDING OF THAT IN WHAT I WAS REVIEWING.
DIDN'T REALLY CLOSE ENOUGH NEGATIVE ABOUT THE CONCEPT.
UM, BUT WITH, WITH, YOU KNOW, IF THERE'S A WAY TO, TO SEE THAT BEFORE IT'S FINALLY APPROVED WITH THE FINAL DEAL TERMS HAMMERED OUT, UM, YOU KNOW, I FEEL IF THAT'S WHAT KIND OF HEARING IT SOUNDS LIKE THERE'S MORE, THE DEVELOPER HAS MORE IN THIS GAME THAN MOST DEVELOPERS DO FOR GROUND UP CONSTRUCTION.
WELL, I MEAN, THIS WOULD, AND THAT WOULD GIMME A COMFORT LEVEL THAT, THAT I DIDN'T HAVE AT THE OUTSKIRT.
I MEAN, THIS IS WORKFORCE, WHICH IS TRADITIONALLY PRIVATELY CAPITALIZED, WHERE YOU'VE GOT EQUITY DEVELOPMENTS IN 10%, YOU KNOW, NOT EVEN MIDDLE, BLAH, BLAH, BLAH.
LITECH IS A STRUCTURALLY TOTALLY DIFFERENT.
YOU KNOW, UM, I GUESS I'M JUST DEFENDING LITECH.
SO IF THEY, IF THEY ALREADY OWN IT, IF, IF, IF THE, UM, IS IT STATE AND FEDERAL HISTORIC TAX CREDITS? YEAH.
SO IF YOU, YOU GOT ALL THAT IN, WHICH IS, YOU KNOW, FREE MONEY, BASICALLY YOUR TWO LINES PERIOD.
UM, UM, AND THERE'S ENOUGH EQUITY IN THAT, THAT SOMEBODY'S NOT, IF, IF, IF THEY RUN A BIG PROBLEM, THEY CAN'T JUST WALK AWAY.
WELL, IF THEY DO, IT HURTS, HURTS REALLY, REALLY BAD.
THAT, THAT, UH, THEN I'D FEEL PRETTY COMFORTABLE.
I, I, YOU KNOW, THE MORE I THINK ABOUT IT, I MEAN, I REALLY FEEL LIKE THIS IS WHAT KIND OF THINGS WE SHOULD BE DOING.
I LOOKING HERE MEAN THIS IN DISTRICT 14, MY DISTRICT
AND YOU COULD BE TRYING TO FIND PLACES WHERE PEOPLE THAT ARE, YOU KNOW, OF, UH, IN THE LOWER INCOME BANDS CAN'T GET TO WORK AND ALWAYS ABOUT NOT HAVING A CAR, BEING ABLE TO SAVE MONEY.
YOU EVEN GET YOUR TWO STOPS TO CITY PLACE UPTOWN, OR A ONE STOP TO THE ARTS DISTRICT.
YOU CAN GO THE OTHER DIRECTION.
YOU CAN BE AT PARKLAND WHERE THERE'S TONS OF JOBS AND IT SEEMS LIKE THIS IS KIND OF AN IDEAL, UH, SITUATION.
WE HAVE A MOVE, UH, BY DIRECTOR ZA AND A SECOND BY VICE PRESIDENT ALLEN.
UH, AND JUST BECAUSE WE TALKED ABOUT IT, IT, DO WE KNOW IF THERE'S A, IS IT IN THE, I MEAN, YEAH, EVERYTHING IN HIGHWAY SURFACE, IT'S PAGE NINE.
PARAGRAPH H, WE TALK ABOUT IT LATER.
YEAH, WELL I KNOW, I KNOW THE SECTION YOU'RE TALKING ABOUT, BUT, UH, UM, SUBJECT TO THAT.
OKAY, EXPLAIN AGAIN, BECAUSE I WASN'T SURE YOU WANT US, OR WE'RE WANT US TO BE EXEMPT.
I WANT US TO ONLY REMOVE THINGS FROM THE TAX RULES.
SO WHEN THERE'S EITHER A TIFF OR A PIT THAT'S GOT THE EFFORT TO SET THEIR STAGE AND KNOW WHAT THEIR ASSESSMENT IS EVERY YEAR.
I DON'T WANNA MESS WITH THAT BECAUSE IT'S SO MUCH.
YOU, YOU WANNA PILOT THE YOU PAPER TAX RULES.
WELL, WE'VE GOT TWO THINGS, JUST MAKE SURE I'M CONFUSED.
BECAUSE THERE'S A DOWNTOWN TIFF AND THERE'S A DOWN, THERE'S A DOWNTOWN PIT.
SO, AND THE DISTRICT, THE BOUNDARIES ARE NOT THE SAME.
AND, AND THE BOUNDARIES OF THE TIFF, THERE'S ACTUALLY TWO DOWNTOWN TIFFS.
IT WOULD BE, IT WOULD BE PILOT COMMITT T BUT PITS DON'T IMPOSE TAXES.
THEY IMPOSE A SPECIAL ASSESSMENT THAT'S SEPARATE FOR TAXES.
AND SO YOU EITHER SIGN ON TO BE IN THE PIT OR YOU GET SWALLOWED UP BECAUSE OF OTHER PEOPLE SIGN.
AND SO WHAT'S HAPPENING, IT IS WE'RE TAKING THINGS OFF THE TAX ROLLS AND YOU DON'T HAVE ANY IDEA WHAT THEIR RELATIONSHIP TO IS.
UH, AND IF THEY DIDN'T SIGN, THEY'RE GETTING SUCKED OUT.
AND I DON'T WANNA MESS WITH WELL, ISN'T THAT WHAT WE DEAL WITH THE OK.
WE KNEW IT WAS THERE IN THAT, YOU KNOW, WE ACCOUNTED FOR IT AND I THINK WE ADJUSTED THE GROUND LEASE PAYMENT ACCORDINGLY.
UM, FOR THAT, I MEAN, I GUESS THE QUESTION HERE, TO EASE THEIR PAYMENT, THE TIP FOR PIT, THAT WAS PIT, THAT WAS A PIT PIT.
BECAUSE WE DIDN'T DISCOVER IMMEDIATELY BECAUSE IT, THE CITY, IT'S THROUGH THE CITY END, BUT THE CITY PAYS PIT FOR WHATEVER.
WELL, WITH THE TIP, THERE'S NO TAX INCREMENT.
AND I GUESS WE CAN TALK ABOUT TAX INCREMENT BEYOND THE DEVELOPMENT OF THE PIT.
SO DO WE KNOW, ARE WE GONNA TIP IN A PIT? I BELIEVE BOTH DEF DEF IT'S DEFINITELY IN THE DOWNTOWN YOU, THE PIT AND
[02:25:01]
THE TIP.SO THE TIFF FAMILIES ARE VERY, UH, I THINK BACK YEARS AGO, I DISCUSSED THIS WITH DORSEY CLARK, WHO WAS IN GRO.
SHE'S NOT RETIRED, SHE'S CLYDE PARK NOW.
SHE SAID THAT THIS WAS NOT AFFECTING TIP.
NOW I DON'T KNOW IF THEY'VE RENEWED SINCE OF WHAT? I'VE NEVER LOOKED AT THE TIP.
IT'S LIKE A, BUT I CAN ASK POSSIBLY.
I MEAN, WHAT WAS THEIR ANSWER? YEAH.
THE PREVIOUS ONE TOOK, UM, $3 MILLION TIP MONEY TO RENOVATE THIS BUILDING YEARS AGO.
AN OFFICE TO WHEN, WHEN WE WENT TO THE, UH, STATE OFFICE REASON, BECAUSE YOU KNOW, THAT, SO IT'S, IT'S TAKEN 10 MONEY, $3 MILLION, TWO.
BUT JUST TO THROW A WRINKLE IN ONE OF THE DOWN STATED PURPOSES, THAT JUSTICE TO FEE SUPPORT OF AFFORDABLE HOUSING.
AND SO THEY'VE GOT A POLICY WHERE, UM, YOU KNOW, YOU'RE TAKING MONEY FROM A SET ASIDE, WHAT 20% PHILOSOPHY IS ON THE CALL PHILOSOPHY.
ARE YOU THERE LISTENING? CAN YOU UNMUTE? YES, I AM LISTENING.
SO IT IS IN THE, I I WAS JUST TEXTING YOU, AARON.
IT IS IN THE DOWNTOWN IMPROVEMENT DISTRICT.
THAT IS THE PIT, BUT IT IS NOT IN THE DOWNTOWN CONNECTION.
SO I, I MEAN, I'M SAYING EVEN THOUGH IT'S NOT IN THE DOWNTOWN TIP, I THINK IT'S, YOU KNOW, WORTH CONSIDERING THAT ONE OF, YOU KNOW, WE TAKE ABOUT TAKING THINGS OUT OF DISTRICTS THAT ONE OF THE PURPOSES OF, OF THE DOWNTOWN CONNECTION TO, EVEN THOUGH THIS ISN'T IN IT, BUT IT'S ALL AROUND IT, IS TO ENCOURAGE AFFORDABLE HOUSING.
IN FACT, THEY HAVE A, THEY DID HAVE AN AFFORDABLE HOUSING SET ASIDE IN THE ORIGINAL PROJECT PLAN, BUT THAT AFFORDABLE SET ASIDE, FROM WHAT I UNDERSTAND, THE REST OF IT WAS ALL TAKEN BY WEST BOSTON.
SO THERE'S NOTHING LEFT IN M1.
SO, UM, BUT CITY, I MEAN, THE MATTER OF PUBLIC POLICY, WE'VE BEEN VERY, IT'S BEEN VERY ENCOURAGING OF JUST AS SUPPORT.
WHAT'S THAT? JUST AS THE SIDE TO SUPPORT, YOU'RE SAYING? YEAH.
WELL, I'M SAYING YOU, THE CONCERN IS, OKAY, WELL WE'RE GONNA TAKE MONEY OUT OF, YOU KNOW, AN ENTITY.
UM, AND THAT'S DISADVANTAGING WITH THAT ENTITY'S PURPOSE, ENTITY'S PURPOSE.
ONCE DOWNTOWN, A BIG PART OF HAS BEEN TO, IN ADDITION TO HFC AND PFC, IF THOSE HAVE BEEN TO, UH, ENCOURAGE AFFORDABLE HOUSING.
SO, UM, AND THAT'S WHAT THEY'VE BEEN USING A LOT OF, A LOT OF MONEY FOR.
REGARDLESS HOW THIS VOTE GOES, I'M GONNA ASK THE STAFF REGULARLY UPDATE THE NEW DEAL COMMITTEE ABOUT THE ONGOING PROGRESS OF THIS DEAL.
I THINK I WANT REGULAR DISCUSSIONS.
I IF THAT'S, IF YOU'RE ALL OKAY WITH LESLIE CLIFF JACK, UM, JUST BECAUSE IT JUST SEEMS TO CHANGE THIS DEAL QUITE A BIT.
SO YEAH, THAT'S JUST KIND OF, I GUT FEEL ON THIS RIGHT NOW.
UM, DID WE HAVE A MOTION TO SECOND? WE DID.
BRIAN'S, UH, SO ARE, ARE, GO AHEAD.
ASSUMING THAT, UM, YOU KNOW, THE, THE, THE STRUCTURING EXEMPTS FROM THE
I LOOK, I THINK, I THINK IT JUST PERMANENTLY CHANGED THE PROVISION OF, SO IT JUST APPLIES TO
I MEAN, THAT'S KIND OF A POLICY DECISION, BUT I DO AGREE WITH THAT.
SORRY, I DEFINITELY INTERRUPTED FLOW WITH THAT.
I JUST WANNA MAKE SURE IT WAS SUBJECT TO THE CHANGE, CHANGE INCLUDE.
SO WE'RE MOTION, LET'S DO THIS OVER.
I'LL MOTION SUBJECT TO THE INCLUSION OF A PROVISION TO PAY A BID ON THIS.
SO, I MEAN, AND THEN THE, JUST PAUSE AGAIN.
UH, WE'RE GONNA HAVE PARTNERSHIP DOCUMENTS.
WE'LL HAVE A BETTER FEEL FOR THE, THE LOAN.
I MEAN, THE LENDER'S GOTTA BE PART OF THIS.
THE LOAN DOCUMENTS, EVERYTHING'S BUTTONED UP, SO WE'RE GONNA BE ABLE TO LOOK STILL.
USUALLY THAT'S KIND OF PERFUNCTORY, YOU KNOW, THOSE DOCUMENTS.
I THINK ON THIS ONE, IT'S JUST GONNA BE AN ADDITIONAL LOOK DEAL.
I JUST, WHAT I WANT TO REMEMBER THAT, BECAUSE EVERY TIME A FINAL BILL HAS COME, EVERYONE SITS AROUND AND SAYS, WE ALREADY SIGNED AN
[02:30:01]
MOU.WE'VE ALREADY, YOU KNOW, WE'RE AT THE FINAL.
THIS IS JUST TO CHECK THE BOX WHEN IT COMES BACK UP.
I JUST DON'T WANT PEOPLE SAY YOU ALREADY BEFORE YOU'RE OKAY.
AND I THINK AARON, YOU KNOW, AS PART OF THIS KIND OF ONGOING DUE DILIGENCE, I MEAN, I THINK, YOU KNOW, WE OUGHT TO GET SOME DETAIL KIND OF PROVING UP THE BASIS, MAKING SURE, YOU KNOW, UH, THAT WE'RE
BUT THIS IS WHY, I MEAN, THIS IS WHY I WANT NEW DEAL REGULARLY UPDATING.
BECAUSE IF THEY'RE, IF WE ARE, IF YOU KNOW A COMMITTEE, OUR NEW DEAL COMMITTEE IS GETTING BIE GBS ABOUT HOW WE'RE PROGRESSING DOWN THE PATH
HEY, THERE'S STARTING TO BE SOME CONCERNS AS WE'RE HEADING DOWN BECAUSE LOOK, THIS IS COMPLICATED.
YOU KNOW, SO IT'S, I THINK THAT'S KINDA WHY I'M ASKING TO KIND OF KEEP ON TOP OF THIS.
AND, AND JUST TO BE CLEAR, THERE IS A PROVISION THAT AT ANY POINT AFTER THE MO YOU ASSIGN YOU OR CAN'T TAKE ACTION TO DISPROVE AND KIND OF TERMINATE THE O YEAH.
IT'S LIKE, IT'S JUST A COURTESY PARTNER.
IT'S JUST A COURTESY TO OUR DEVELOPMENT PARTNERS AND YOU ALL, 'CAUSE YOU'RE PUTTING TIME AND RESOURCES INTO THESE PROJECT THAT IF WE'RE PULLING THE PLUG AT LAST MINUTE, IT JUST DOESN'T COME AS A SURPRISE THAT THERE'S, WE'RE LEADING SOMEWHERE.
SO, UM, JACK OR ANYONE ELSE? OKAY.
JACK, VICE PRESIDENT SEAN ALLEN, APPROVE DIRECTOR JUAN RUDOLPH, APPROVE TREASURER.
HI, UM, DIRECTOR KEVIN HINTON.
I MEAN, WE
WAS THAT APPROVED? OH, YES IT WAS.
UM, SORRY, JUST MAKING SURE I DON'T SEE PATTY.
I DON'T SEE DIRECTOR HINTON, UH, DIRECTOR LESLIE BRUIN NOT APPROVED.
AND I WOULD JUST SAY I LOVE THE CONCEPT, BUT CONCEPT I DON'T, AND I KNOW THAT MOU IS SUBJECT TO THE STUDY MARKET STUDY, BUT I DON'T FEEL COMFORTABLE MOVING FORWARD UNTIL WE, WE FIGURE OUT THE REST SITUATION TO BE COMPLIANT WITH SAFE PRESIDENT DAVID S UM, APPROVED.
UH, I'M GONNA, I'M GONNA, I'M GONNA NOT APPROVE PENDING IN PASSING ANY MORE INFO.
SO YEAH, THAT WAS A NEW ONE, BUT YEAH.
SECRETARY TONY PAGE APPROVE DIRECTOR SEAN ZA APPROVE.
I DIDN'T ASK ABOUT STANDARD PRACTICE PROCEDURE.
UH, IF WE GET AROUND TO THOSE POLICIES AND PROCEDURES AND YES, FORMALIZING THOSE, WE ARE, UH, WE ALWAYS TRY TO KIND OF CREATE THE LANE OF WHAT ARE WE WORKING WITHIN AT EACH LEVEL.
SO AT THIS LEVEL, APPROVING THE MOU 'CAUSE BASED OFF WHAT WE SAID BEFORE, I DEFINITELY SEEN YOUR CONCERNS BECAUSE WHEN WE GET THE FINAL DOCUMENTS, USUALLY IT'S, IF NOTHING HAS CHANGED FROM THE MOU, THEN WE'RE FINE WITH IT.
IF SOMETHING HAS CHANGED, THEN WE CAN, YOU KNOW, HAVE QUAL.
SO DO WE GENERALLY WANT TO BE ABLE TO APPROVE AN MOU AS LONG AS WE HAVE STATED QUESTIONS, IT'S KIND OF THE OPPOSITE OF THINGS CHANGING.
'CAUSE WOULD THAT HAVE CHANGED YOUR APPROACH? IF IT WAS, YOU KNOW, ON THE RECORD THAT I WANT TO KNOW A, B, AND C AND IF THOSE CHECKOUT GOOD, WE CAN MOVE FORWARD.
BUT I WOULD SAY THIS, LOOK, I'M GONNA GO DOWN.
I DON'T KNOW HOW EVERYONE'S GONNA FEEL.
[02:35:01]
I KNOW I'VE SAID, HEY, IT'S NOT GOOD FORM TO VOTE.NO, WE'RE DOWN TO DOCUMENTS AND ALL THESE MORE FAS BOND ISSUERS HAVE DONE ALL THIS WORK.
AT THE END OF THE DAY, YOU ARE INDEPENDENT DIRECTORS, I MEAN, FOR INDEPENDENT DIRECTORS.
AND YOU CAN GO, THEY BOTH KNOW FOR ANY DAMN REASON YOU WANT TO AT ANY POINT.
SO I'M JUST GONNA TELL YOU HOW I THINK, I MEAN, MY PHILOSOPHY.
UM, I'M JUST GONNA TELL YOU MY APPROACH.
YOU KNOW, I I, I'LL BE, YOU KNOW, I'LL BE VERY CLEAR WHY YOU OUGHT TO, BUT AGAIN, YOU ARE INDEPENDENT.
IF YOU KNOW, DURING THE DISCUSSION, YOU KNOW, AND, AND A YES VOTE, THE DIRECTOR SAYS, HEY, I'M GONNA HAVE SOME QUESTIONS LIKE Y'ALL DID.
I'VE GOT QUESTIONS OR SOMEBODY DID, YOU KNOW, I'M WANNA ANSWER BY THE TIME THESE, UH, YOU KNOW, DOCUMENTS GET GIVE UP, THEY BETTER BE READY TO ANSWER.
'CAUSE THEY NEED TO KNOW THAT IT'S NOT FOR SURE.
YEAH, I THINK, LESLIE, YOU BRING UP A VERY GOOD POINT, RIGHT? IF WE HAVE A PRELIMINARY INDUCEMENT AND WE SAY, OKAY, IT'S JUST A PRELIMINARY INDUCEMENT, WE READ IT THROUGH, THEN WE GET TO MOU AND THEY'RE LIKE, WELL, THEY ALREADY SPENT THE TIME FROM TO THE MOU.
AND THEN WE SAY, WELL, NOW WE CAN'T SAY NO.
THAT PUTS US IN A DOUBLE BIND, RIGHT? WHAT DO WE SAY? NO, WHEN WE RAISE THESE CONCERNS? YOU GUYS HAVE VALID CONCERNS.
YOU KNOW, MAYBE WE NEED TO SET UP SORT OF A, I'M TRYING TO PUT IT INTO, RIGHT.
I, I DON'T WANNA PUT IT INTO LIKE A POLICY PROCEDURE BECAUSE THAT THEN THAT'S KIND OF TELLING DIRECTOR, TELL PEOPLE WHAT ABOUT, BUT HERE, I, I THINK WE'VE, WE'VE TOLD OUR DEVELOPER, WE'VE VOTED YES, THERE NO CONCERNS AND RESERVATIONS.
SO MAYBE IT'S ON US TO DEVELOP THOSE QUESTIONS, GET 'EM OUT THERE QUICK SO THEY KNOW WHAT WE WANNA SEE.
IF WE DON'T LIKE WHERE THINGS ARE GOING, WE'RE ABLE TO SAY WE DON'T LIKE WHERE THINGS ARE GOING.
BUT AT THE END OF THE DAY, THE MLU GIVES US FLEXIBILITY.
SO, BUT, BUT I THINK IT'S ONLY FAIR TO THE DEVELOPER.
WE TRY TO GET OUR ISSUES OUT THERE, GET OUR QUESTIONS OUT THERE, GIVE A CHANCE TO ANSWER THEM EARLY SO WE CAN GIVE THE FEEDBACK OF WE DON'T SEE THIS GOING THE RIGHT DIRECTION.
TO YOUR POINT, IT, AS WE MOVE TOWARD THAT DIRECTION, AS WE GET THE FEEDBACK TO WHATEVER QUESTIONS WE HAVE AS THE CRISIS CONTINUES, HOW DO WE DISSEMINATE IT SO THAT EVERYBODY IN THE BOARD SEES, ALL RIGHT.
I I WAS GONNA SAY IN THIS PARTICULAR CASE, YOU CAN BRING THEM BACK WHENEVER WE DON'T HAVE TO VOTE ON ANYTHING AND SAY, HEY, I BROUGHT YOU RIGHT.
PUT IT ON THE AGENDA IF, WELL, THE QUESTION IS, SOMEBODY MAY NOT NECESSARILY BE, OH, WE NEED TO BRING OUT FOUR.
IS THAT SOMETHING THAT WEST PUBLIC? I DON'T THINK SO.
I MEAN, IF WE'RE ASKING A PUBLIC QUESTION, WE'RE MAKING OUR DECISION BASED OFF THE ANSWER.
THEY DON'T NECESSARILY BE HERE, BUT IT'S, IF IT'S, IF WE HAVE SOMETHING ON THE AGENDA, WE CAN TALK ABOUT IT.
IT'S PUBLIC JUST HAS TO BE ON THE AGENDA.
IT'S PUBLIC OR WHATEVER WE SAY IS PUBLIC AND HERE, BUT JUST, RIGHT.
BUT IF WE HAVE A GROUP THAT'S ALREADY FOLLOWING UP WITH THEM, WHO'S ABLE TO CASCADE THAT INFORMATION TO US AS A BOARD AS A WHOLE, I DON'T KNOW.
SO I, I JUST DON'T KNOW OUR PHONE, BUT I, UH,
OH, I'M TED REVIEW AND DISCUSSION OF DHSE TREASURY REPORT FOR THE FOUR MONTH PERIOD ENDING APRIL 30TH, 2026.
MR.
REALLY, REALLY PRETTY STRAIGHTFORWARD.
UM, THESE FOUR MONTHS, I'LL JUST KEEP IT SUPER SHORT FOR YOU GUYS.
UH, JUST KNOW THAT FOR THESE FOUR MONTHS, YOU, YOU'VE ALREADY EARNED, UH, OVER 70, UM, 6% OF THE TOTAL REVENUE THAT Y'ALL HAD ON THE BUDGET FOR 2026.
SO IN YOUR 2026 EXPENSES ARE RUNNING STRAIGHT IN LINE WITH, UH, WHAT WAS BUDGETED.
YOUR CHANGE IN FINANCIAL POSITION, UH, FOR THESE FOUR MONTHS IS A POSITIVE NET CHANGE OF 1,000,964, UH, A HUNDRED, 964,000.
LET'S JUST CUT IT RIGHT THERE.
NO REASON TO GO INTO THE SMALLER DOLLARS.
SO, UH, SITTING, UH, REALLY WELL WITH CASH, CASH EQUIVALENTS AND INVESTMENTS OF OVER
[02:40:01]
26.3 MILLION.BRAXTON, TORRINGTON FOR US, WHAT'S, WHEN WE CLOSE THAT, WHAT'S THE FEE COMING IN DAY ONE FOR THE HSC? DO YOU REMEMBER?
WELL, MONEY, HE SAID WATCH THIS BEFORE YEARS.
I THINK WE'RE DOING A COUPLE, UH, INSTRUCTION MANAGER CONSTRUCTION, BUT FOR THE GENERAL CONTRACT, I THINK THERE'S A COUPLE DEALS ON THE CONSTRUCTION THAT ARE CLOSING OUT.
SO WE'RE GONNA GET A COUPLE OF THOSE CHECKS AND FEES.
SO, UM, WHAT DID WE, AN AGENDA ITEM? $2 MILLION.
YEAH, THAT'S PROBABLY PRETTY GOOD.
THEY GOT THE FEEDBACK FROM OUR NEW COMMITTEE.
WE HAVE COMMITTEE DECIDED TO POST, RIGHT? THEY WANT, THEY WANNA DO SOME MORE GROUND BOARD, I THINK FROM SOME OF THE QUESTIONS WE RAISED.
THEY WANNA COME WITH SOME ANSWERS.
UH, TOTAL ISSUE FEES OF CLOSING SHOULD BE JUST OVER 300,000 BUCKS.
WHAT IS THAT CLOSING? UM, THAT IS CLOSING ON STUDENT ISH.
ANYTHING ELSE WANNA PUT ON THE, UH, FINANCIALS? EVERYBODY? ALRIGHT, LET'S JUST GO TO, UH, ITEM 11, REVIEW DISCUSSION.
CORPORATIONS PIPELINE REPORT AS JUNE 9TH, 2026.
WHAT ARE WE CLOSING THE DOORING? I KNOW WE'RE DOING IT SOON.
I SIGNED A WHOLE BUNCH OF DOCUMENTS IN A NICE COURIER.
HEY, THIS MORE DISCUSSION ON THE DYLAN? JUST DYLAN? YEAH.
ANY QUESTIONS ON THE PIPELINE? OH WOW.
WELL, THE LDG DEALS, DO WE, HOW ARE THEY DOING? ANY COMMUNICATION? YEAH, WE'RE, I MEAN, WE'RE GETTING CHECKS FROM A COUPLE OF MONTHS, SO, OKAY.
HOW'S THE CONSTRUCTION GOING? CONSTRUCTION CHECKS FOR WE L THE TECHNOLOGY BOULEVARD.
IT IS, BUT THEY'RE THE P THAT'S WHAT THE PSC US.
OKAY, WELL, I'M GONNA CALL, I'M GONNA ADJOURN.