Travis County Commssioners Court
January 28, 2003
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Housing Finance Corporation
Now let's call to order the Travis County housing finance corporation. First item is a public hearing. Relating to issuance of Travis County housing finance corporation multi-family housing revenue bonds, wood way square apartments in an aggregate principal amount not to exceed $14,000,000. Move we open the public hearing.
>> second.
>> all in favor.
>> that passes by unanimous vote with commissioner daugherty absent.
>> I would like to state that notice of this public hearing was published in the Austin american-statesman on January 13th as required by the internal revenue code. And this is a transaction for a multi-family -- a new multi-family apartment project on cherry ood in southeast Austin. Cherry road in southeast Austin, unless you all have questions of me, that's all that i'll say.
>> would anyone like to give testimony during this public hearing? Seeing none.
>> move we close.
>> second.
>> all in favor? That passes by unanimous vote. 2. Consider results of compliance audit of the lakeview apartment, and take appropriate action.
>> good afternoon, I'm harvey Davis, manager for the corporation. This is an -- has been an ongoing audit with the lakeview apartments. We last met on November the 26th. The -- the issue at that time was that the owner was not in compliance with the eligible tenant leasing requirements. They have to lease 90% of the units to eligible tenants who are people that are -- whose income are less than 80% of the Austin area median income. At that time, the -- the owner had asked for an extension, they had -- they had been issued a 60-day letter from the board, from cliff blunt, authorized by the board, and they had not been able to regain the eligible tenant leasing requirements. So -- so the board did grant them extension until -- and asked that I report back to them today, on the last meeting in -- in January. Unfortunately, I'm not able to report that they have regained compliance. Holly bussard and myself went out there last week, looked at probably over 80 files. They have made substantial improvements since I was out there in November. I have hired a new management company that -- that came on board in the middle of -- of December, this company has -- is a lot more experienced with managing bond type of properties. But I certainly am not able to report that they are in full compliance with the regulatory agreement. My recommendation to the board is that the board request that cliff blunt, our attorney, get together with the bond underwriter, piper jaffer and with the trustee and require them to come up with a written plan and -- of how they are going to regain compliance and what the time table is for -- for regaining the -- the leasing requirements. And so with -- with that, I would be happy to answer any questions.
>> just as a reminder, I believe we talked about this when this was on a couple of months ago. This is not -- there's two occupancy restrictions on this property. There's one that is -- that is income tax related, relating the tax ability on the interest and the bond and then there's a state law requirement. We are not talking about any problems with the tax related covenant. We are only talking about the state law requirement, so we have a much broader avenue in which to go about trying to gain compliance. This will not affect the tax exempt status of bonds, which is mostly a good thing, but just wanted to make sure that we were clear on which restrictions we were talking about.
>> so what can the trustee do?
>> well, I think the trustee and the -- the trustee is there to look after the bond holders. And the -- the underwriters of the party that sold the bonds to the public, I think, these bonds are owned not by one, you know, institutional bond holder, which is often the case in these types of transactions, but these people being on notice and -- and understanding that we have had an ongoing problem with -- with this owner in -- in adhering to this part of the regulatory agreement, putting them on notice and involving them in the process, I think, will -- will -- will move this process along and hopefully they will get back into compliance within a shorter period of time.
>> my suggestion is that any meetings or conference calls or however we can go about pursuing this, if this is how you want to proceed, is that we do have -- the borrower or borrower's representative involved as part of that process.
>> how close to complying, are they?
>> well, in my memo, I say that at least 12.3% of the units were not in compliance. Of course that is -- that is close to 90%, but, you know, again, we did not look at all of the files. I'm sure if we looked at all of the files, that we would find additional units that did not qualify. So, you know, it's -- as a guess, I would probably there in the 70 to 80% range.
>> move that we file a -- follow the recommendation and ask cliff blunt to work with the trustee and the bond underwriter to help this project come within compliance.
>> second.
>> any more discussion? Any other ideas? All in favor? That passes by unanimous vote. We are showing commissioner daugherty absent for the entire meeting, right. 3. Approve minutes for board of directors meeting of January 7, 2003.
>> so he move.
>> second.
>> all in favor? That passes by unanimous vote.
>> move we adjourn.
>> second.
>> all in favor? That passes by unanimous vote, also.
Last Modified: Wednesday, April 2, 2003 10:25 AM