Travis County Commssioners Court
February 4, 2003
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Housing Finance Corporation
Now let's call to order the Travis County housing finance corporation. 1. Consider contract extension and payment request from community mentor-protege initiative, and take appropriate action.
>> good afternoon, I'm harvey Davis, manager of the corporation. If you will recall, we have a $20,000 contract with cmpi, the contract period ended in may of 2002. The contract provided for quarterly payments of $5,000 based on cmpi meeting certain performance measures. During the contract period, they met performance measures to qualify for 15,000 of the $20,000 in the contract. And they have -- they have requested to the board for an extension of the contract because they have met the -- the final performance measures, but beyond the contract period. The -- there are several of the board members are in the audience and they are available to answer any questions that you may have.
>> any questions? I see a couple, three I guess of board members. This one will be match large businesses with small ones. To help them get started that way. And the contract was con continuing getting upon so many small businesses being --
>> right. And showing financial advancement of existing mentors and adding additional mentors. And I will represent to the board that -- that I have -- that I have done some work as far as their meeting the qualification for the fourth installment and they have met that qualification, in my opinion.
>> okay.
>> that's why I move approval.
>> second.
>> any more discussion? Any reason we should not do this, board members? All in favor? That passes by unanimous vote. We appreciate you all's continuing diligence and dedication and hard work in this difficult area.
>> thank you, sir .
>>
2. Consider results of compliance audit of $4,400,000 multi-family housing revenue bonds, series 1994a (bent oaks apartment project) and take appropriate action.
>> good afternoon, aim polly brussard financial analyst. I did the follow-up audit for bentwood apartments. You might recall back in November the board reviewed an audit and at that time determined that bentoaks was not in compliance with the 70% ratio for eligible tenants. And the primary reason this was the case is 24 of the units they claimed as eligible tenants didn't have income certifications. So at that time the board approved sending a letter giving the owner 06 days to -- to cure the default. And I went and reexamined the files, the 24 files that we were concerned about and they all have income certifications now. And so in our opinion, they are back in compliance and I'm here today to ask you to approve the attached letter acknowledging that they have regained compliance.
>> mr. Davis you are in agreement with everything ms. Broussard just told us?
>> yes, sir, I sure am.
>> that's why I move approval of the proposed letter.
>> second.
>> any more discussion? All in favor? That passes by unanimous vote. 3. Consider results of compliance audit of $9,800,000 multi-family housing revenue bonds, series 1991 (aspen hills apartment project) and take appropriate action. Okay. The apartment owners are required to send us quarterly reports in which they state whether they are in compliance with the low income and eligible leasing requirements. Aspen hills who is now called the falls on bull creek, which is a 344 unit apartment complex located on the capitol of Texas highway near the arboretum, their report states that they are below the 20% requirement for the low income tenants. I did call the regional manager and inquired about why they have fallen below the 20% requirement. Of course this -- this is a requirement for -- for the bonds to remain tax exempt. And they say they had some management problems and -- and that was the reason. So I'm -- I'm asking the board to -- to send or to -- to have our attorney send a letter to -- to the owner and the -- and the trustee informing them that they have 60 days to cure this default. I will add that -- that as this particular apartment complex we have had issues on two prior occasions, significant audit issues. And so it does concern me somewhat that -- that they have fallen down again and, you know, on an issue -- on an area that is as important as the low income requirements. I will during the -- shortly after the 60 day cure period, I will go out and do a -- do a -- go out and do a site visit audit to be sure that they are in compliance.
>> did we send letters the two prior times.
>> well, they regained compliance. We went out and did follow-up all of that.
>> part of the problem, if I remember right, with aspen hills, that's the one that's on very challenging terrain and had to do with the compliance related to the elderly and it really was just not a place why folks would think about going --
>> but they were substituting the income for the --
>> we worked through those issues, but a lot of what we had to deal with them was [multiple voices]
>> the first audit, which was maybe three or four years ago, it was a long time, but there were issues with the lower income leasing requirements in addition to the elderly requirements.
>> [inaudible] public transportation, because of the terrain --
>> yeah, yes, sir, right.
>> as far as -- okay. Uh-huh. I remember this one.
>> judge, I move we send the appropriate letter to the owners and trustees giving them the 60 day [ inaudible ] revisions.
>> second that.
>> any more discussion? All in favor? That passes by unanimous vote. We still need to give mr. Manly a chance to get here.
>> yes, sir, he should be here any minute.
>> I move that we recess the Travis County housing finance corporation --
>> there he is.
>> there he is.
>> withdraw that motion.
>> just in time. 4. Approve resolution authorizing the issuance, sale and delivery of multifamily housing revenue bonds (woodway square apartments) series 2003; approving the form and substance of and authorizing the execution and delivery of documents and instruments necessary to carry out the financing of such multifamily rental residential development; and containing other provisions relating to the subject, and take appropriate action.
>> good afternoon, cliff blunt with thompson co issuance counsel. There was a formal resolution delivered to you all for backup. At that time we did not have the final maturity date of the bonds or the interest rates. So there were a few typos, but the only substantive changes from what I just handed out and what was delivered to you last week were those insertions. Other than that it's substantially the same. Larry paul manly, counsel for the developer, is here to -- to answer any questions or provide any information on the project. Just the timing on this, the 120 day period, provided by the Texas bond review board allocation rules is -- is expiring on the 15th, which is a week from Saturday. So closing on this transaction is scheduled for closing on February 13th, closing on February 14th. So I guess it will be a sweet closing. But -- so that's the timing. It's here for final approval. I don't know, larry paul, if you want to say anything or field questions?
>> we need all of the help we can get. The biggest impediment, of course, is that we have to go through the Texas department of housing and community affairs for their final approval. And we would request the support of the commissioners court both by letter and if at all possible, talk to the agency about affordable housing in Travis County, the need for it. I think it would be very, very helpful. One of the things that has occurred over the past is that due to certain allocation formula that the state uses, the Austin region, which is now known as the capital region, other than known as region 7, has been zeroed out for 2003 for affordable housing for tax credits. I think it's going to be -- msa and surrounding counties. That doesn't fit necessarily with what we see as the demand for affordablely priced housing for working people. As a matter of fact, I think the -- our knowledge is that people are being forced to move farther and farther away from Austin. In order to find housing. The only mechanism left to finance that kind of housing is the tax exempt bond programs. The 4% tax credit that comes with it is automatic if you can achieve under underwriting standards. Certain underwriting standards. We believe that we have done that with the lenders and investors that are willing to develop this project with us. We have to now convince the state agency that is in fact the case and -- and all help is requested to the extent that you can grant it. With that, I will be happy to answer any questions that you might have.
>> is this going to go through a lottery process?
>> yes, ma'am. We have already been through the lottery process. We are a lottery winner in that sense. What that means is we get a chance to spend a lot of money to put a deal together in the hopes that we can close it within 120 days from the time they say go. We have invested several hundred thousand dollars to get to this stage. And have in this case actually bought the property. This is the last multi-family zoned piece of land in the southeast quadrant of the city. To not do this transaction wouldn't make a lot of sense in our perspective, just from deliverability of affordablely priced housing. Neighborhood groups are behind it. The scan group has written support letters on our behalf to both senator barrentos and eddie rodriguez. We are -- we commissioned an economic survey from anglos angelou's group, he indicated a demand not only now but in the future for affordablely priced house in this that sector, predicting that that area will grow at 3 and a half times the rate of the rest of the Austin region. It's obviously where development is focused, where it's headed. It's where the airport is. We hope to be able to proit right kind of -- provide the right kind of house in this that area.
>> we normally ask if you have contacted the school system to let them know about the -- the further burden of additional populations, student population. What did they say?
>> well, through this -- the city's programs, we have been designated as a smart housing development. And in the process of that, we have notified all of the surrounding neighbors, the neighborhood, the schools, we've had hearings at one of the schools down there nearby. We haven't had any objections from the neighbors to this property at all. As a matter of fact we went through a rezoning for it at the city and had no objections at the city.
>> the other thing is that this is a low income neighborhood and if the -- we bring more low income folks, what -- how will the resources for the agencies that deal with poor people be addressed?
>> we don't think that we will be negatively impacting those agencies. This property is 100% set aside for people at 60% of median income. The Austin median income is 71-1 for a family of 4. A family of 4 can earn $42,600, I think, and still qualify as a qualifying low income family for this property. And if you think about what that means, I mean, that's -- that's more than what school teachers and firemen and policemen and state workers make. We are talking about working family environments as opposed to what a lot of people might call residents of projects and section 8, that sort of a thing. That this is not that kind of property. We are talking about people with jobs who just are looking for an affordable place to live and might be between saving up enough money and buying a new house or lost a house for whatever reason, need to have a good, safe and good quality place to live in the right location.
>> how many floors to this building.
>> this will be three stories. It will have -- some of the units will have covered garages attached to the units. Others will be open parking. We will have a community center and a daycare center on site. For all of the working parents. We will have after school programs, daycare programs, we will have computer centers for learning programs. And job counseling, homeowner counseling, actually we hope to be able to help people become homeowners. That might be counter intuitive, but we believe by helping people become homeowners, more people will want to move in there so they can make that transition as well. There are a lot of services that are attached to the [inaudible]
>> go ahead.
>> I just wanted to throw a couple of questions in as we look at the -- at the supporting of multi-family affordable housing. Projects. There are certain things that we also look for, that is the management history, I guess the management style, what we do not want to see happen is things become eyesores in the community. We have seen some -- some disastrous situations whereby folks have been awarded moneys and whatnot and have constructed apartments, but they have been kind of left on the down side. And where the -- they just don't look good in the community as far as incoming -- eyesores. So I think management style and management practice I think is very important and how long have you been around, are you going to continue to be around to ensure that this particular multi-family unit doesn't become one of the things that I just put before you. So could you just -- just give me a little history, your management style and share that this thing will not become eyesores to the community, stuff like that.
>> commissioner Davis, that's a very important point. I'm glad you raised it to give you an opportunity to address it, these properties were made affordable to working families. They don't mean that you have to make the units available to anybody that shows up and says I want to live there. Our management company, first of all, the developer does is he engages an outside third party management company that specializes in handling tax credit and tax exempt bond program properties. The state of Texas in -- in providing the -- the financing require that's we put a land use restriction agreement on the property. Which states that we will provide a certain level of services to the property and furthermore that we will keep it maintained. In addition to that, we have the requirements of the lenders and the syndicators, investors that put the money up, that they require us to keep the property up to what we think is better than a market grade property. Because it's their collateral. If we let it go down, they are going to be sorely put out. Their remedies are to eliminate us at the developer owners if we don't take care of it. That's I think a very mainly incentive to do this properly. That land use restriction agreement is in place for 30 years. This Monday -- it's monitored and audited by the state on at least an every other year basis. And onsite inspection. The -- the properties themselves, as to this developer, don't know the exact number of units he has, but I know that he's got two large properties in dallas. He's got three in houston, one in hempstead, one in san marcos. And has built numerous others for other people. He has an outstanding track record and is totally in compliance with the program. I think that in and of itself speaks highly for him. The properties are available for those who would like to see them. The one most close to Austin is the one down in san marcos. As you are driving south on i-35, you can see it at the wonder world drive exit off to your right. If anybody cares to see how he handles a property. It's a prime example.
>> can you just answer one more question for me. Can you tell me what probably the -- the [inaudible] affordable rent of -- what the -- what figure are we starting at as far as your -- your range from your low to the highest range.
>> are you talking about the represent ranges?
>> yes, exactly.
>> doing this from memory, cliff may have to help me, but I think in the one bedrooms we are looking at 6 $35 plus or minus. -- $635 plus or minus. 735 to 750 on the two bedrooms and on the three bedrooms we are projecting these at around a thousand dollars a month.
>> okay.
>> is that before -- before utility al lowps.
>> that's after taking out utilities.
>> okay. That's all of the questions that I have, thank you.
>> further questions? Larry paul, in the event that you don't get the tax credits, is that -- is that a deal kill?
>> yes, sir. That's where the equity comes from.
>> so we basically could sign-off on this today and the deal would still get killed in the event that the state doesn't allow the tax credit and from what I'm hearing from you, those have at least been told to you that those have been used up?
>> no, sir. What I'm suggesting is that there are some concerns that in this area of town there are too many apartments being built, which we -- we don't agree with that projection because we have done the count. We know what's going on out there and we know what's coming in the future. Commissioner Gomez's area, she can tell you probably better than I can about the demand for housing. This property it's directly across the street from the wal-mart, sam's club, half a block from terry road. As I understand the new construction of i-35, there's going to be an on ramp and off ramp at terry road. There is walking distance to employment for thousands of jobs around there. This is an ideally situated property. It's on a bus line. Been designated as smart housing by the city. The city says we need it. Our own economic analysis, both from a feasibility study and independent economics perspective says we will need it. Our lenders and investors have looked at our underwriting and said, we agree with you, we are willing to put our money at risk. All of those things say, yes, we should do this. We are hope thank we can convince tdhca that it needs to get done.
>> but this is sort of a step that you do, you need this in order to go to the state.
>> that's correct.
>> and say okay we have done the necessary steps, now the final thing that we need from you all is the tax issue.
>> that's correct.
>> tax exempt.
>> it's not tax exempt.
>> tax credit.
>> tax credit, that s right.
>> I would just kind of I think most people in the southeast or southwest would prefer sfaesm homes. There is also a need -- take one step at a time. But if I hear you correctly, you will be taking steps to transition people from artment living to -- to single family. The only catch here is that we have got to -- to start getting some affordable single family homes. So if there were ever an opportunity for tdhca to get into that business, I would sure like to be notified. I have an affinity for tdhca, I have an opportunity to run the program. If from that perspective we did take a lot of interest in this area, fair way ridge subdivision, for instance, is the site of almost 300 affordable homes. And in that community, 88% of the occupants are affordable qualifying owners. I think that was a major success for the program. We are looking at other sites right now in the same quadrant for single family development. I am involved in one where there's a pending contract to acquire townhome sites to make them for affordable, affordablily priced for townhome sites because the -- as the densities get strung down, we have to -- shrunk down we have to look at condos and town homes to make them affordable in addition to the lots. Because the development cost of lots these days is getting so expensive it's getting very hard to put an affordable house on them, so we have to make them more dense, yes, commissioner, we agree with you.
>> well, with all of those, I would move approval knowing that it's going to go to the tdhca and we will see what happens.
>> second.
>> let me help you get a couple of those letters. [inaudible] yeah. They will indicate -- basically we need you -- to hear you think there's a need for additional rental units as we try to help people transition toward home ownership.
>> thank you, judge.
>> all in favor? That passes by unanimous vote.
>> thank you very much.
>> thank you.
>> move we adjourn.
>> second.
>> all in favor? That passes by unanimous vote, also.
Last Modified: Wednesday, April 2, 2003 10:25 AM