Travis County Commssioners Court
January 27, 2004
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Housing Finance Corporation
Let's call to order the Travis County housing finance corporation. 1. Approve minutes of board of directors meeting of October 28, 2003.
>> so move.
>> second.
>> all in favor? That passes by unanimous vote. 2. Receive briefing from corporation attorney, give direction and take appropriate action regarding collection of past due annual fees, do we need to go into executive session on that?
>> probably -- seem to be fairly [indiscernible]
>> something you cannot tell us in open court?
>> [indiscernible]
>> I can provide with the response of [inaudible - no mic]
>> do that, see if we need to go. If there's my threatening -- if there's y threatening to be done, we will do that anyway, right? [laughter]
>> okay. As long as we don't compromise the county's position getting your advice in open court, if you feel comfortable with it.
>> the letter from -- did we call this item up? I --
>> yes.
>> okay. The letter from agape Austin was received by e-mail around noon today. So that's why I haven't had a chance to get it to you before this meeting. I -- I don't know that it was particularly responsive to my request.
>> not at all.
>> basically she is saying they are trying to seek out some type of non-profit agency to take advantage of their facilities. Other than that, there's really not a specific proposal, which is what I had requested to be paid the fee or alternatively a proposal that provided more benefit to the public of Travis County than the amount of the fee. In my letter of the 14th.
>> [indiscernible] pursuing this. In which case it seems to me that we can check with our health and human services service and identify corporate agencies. Or whether we want to go back to a demand for our money in cash.
>> yes, sir.
>> or -- or it could be done as my initial demand, kind of an alternative, either pass the cash or provide us with an acceptable proposal. Obviously this -- this proposal is not acceptable. So --
>> I'm kind of going back to when we were sitting as Commissioners, taking note of our social services contracts that we just issued. There are a number of agencies that are on here that have housing as a component of what it is that they do on behalf of Travis County. So -- so that might be worth a conversation as to have stephen williams and his group, folks, look at the possibility of those two or more --
>> yes, would you like me to coact stephen williams and explain the situation with this organization and see if -- if that might provide some needs of theirs?
>> makes accepts to me at least to pursue it. I think that we have a list of agencies. It would be of significant value to -- to Travis County residents if we could assist in that matter and if their ability to pay us our little fee is based on the occupancy rate, there's no telling when the market may change, right?
>> yeah. Hopefully it's changing, but we don't know.
>> two apartments or whether it's three or four is not something that is going to so change the nature of what it is that they have to --
>> it's a product in excess of 500 units, so at 30 or 40% vacancy, they are looking at 150 to 200 empty units right now.
>> okay. We are not going to pay or give them credit of the full amount of what they would rent it for. But 56% would be fair. So the motion basically is asking mr. Davis to talk to stephen williams.
>> to see if we have a match with some of our social service agencies that we contract with --
>> we being Travis County not the corporation, correct?
>> right, Travis County.
>> yes. To the extent that mr. Blunt needs to be involved, it's a huge hourly fee, probably worth the additional investment to get his offices. So let's pull him in. I guess we would write something in writing I guess like a contract that clearly sets forth what they deliver, how we credit, if we get to that point.
>> if mr. Davis and mr. Williams can reach an agreement, I will be glad to get it in writing in the form of a contract.
>> second that motion. Yes?
>> let me make sure that I understand what we are contemplating here. Given that we are owed $55,000, in lieu of that payment, we are going to go to the apartment coment plex and say okay here is how you can pay us. We have social service needs and we are going to use some of your apartments to offset that.
>> in some form.
>> I can see where if we get started down this road, I mean, these folks might say you know what that's how we are going to pay you from now on. Do we -- what are our real capabilities with regards to collecting these dollars? I mean, are we in a position that we can either force I mean the trustee to either call this note, move towards something where these people say you know what I mean there could be some foreclosures, maybe we don't have the capabilities of forcing a foreclosure, but I will assure that the sale of that property will certainly give us -- there will be enough moneys in that thing for us to get our money out of this, I would suppose, unless, you know,er in that second, third, fourth tier deal if that's all done they are never going to sell it for probably what they have outstanding. Are we basically giving up on being able to just get them to give us our due moneys?
>> no, sir. We do do that several ways. We could put in the contract this arrangement will be until such time as occupancy rose to a particular level that would provide the cash flow to begin paying the fee again. Obviously that's just an idea that off the top of my head we can do a lot of things. But in terms of how much -- how much negotiating power, we can declare a default and if the trustee has money in certain other of the accounts, they could use that to potentially pay the default money. We -- I need to go back and check. I don't believe that the issuer controls the remedy to foreclose at this point until the senior bonds are paid off. Those senior bond holders again readily control those remedies, so we would have a cause of action, a lawsuit against the borrower if we would like. But if they don't have the money to pay this fee out of the -- out of the revenues of the project, my guess is that it might be a little difficult to collect on that judgment once we received it, also. I don't know that for a fact, but that would be a guess.
>> what we have here is a chodo, not getting any taxes, now we are not getting the fees that are due us. And even if there are bank -- if there is a bankruptcy tt's -- that's caused by either us or someone, the likelihood of us getting the dollars back anywhere near immediate look police dismal.
>> probably.
>> so what we are embarking on here is going in and trying to get something, since we are not getting anything at this stage. Do you think that this apartment complex fully understands what we are asking? Because I would imagine that whoever we are going to put in this project is probably socio-economically not able to go out and get their own place. Isn't that --
>> well, at this point that specific proposal has not been given to them. I exchanged several e-mails with ms. Wingfield right after I September this initial letter. She September me an e-mail just asking what, you know, exactly that we were looking for. I responded that we were looking for some use of the property that was going to provide residents of Travis County with some benefit rather than receiving nothing at this point. I said one thing that was talked about was the possibility of allowing people to live there, to take some of the burden off of county government. But we didn't get any more specific than that. So at this point I would say that this particular proposal they did not understand it. But I would assume that mr. Williams and mr. Davis could -- could --
>> [indiscernible] it makes sense to maine it may not -- makes sense to me, maybe not to her. But I don't know if it makes sense us to forgive the $65,000. It does seem to me if they are sitting down their with 500 units with a vacancy rate of about 30%, there are a whole lot of units not being used, so I don't know that -- seems to me that we can screen who we refer. I don't see us screening out all of the poor people an sending the rich ones. The rich onces shouldn't be -- ones shouldn't be available anyway. I feel that this housing development shouldn't be frightened by poor families.
>> there are income restrictions anyway, so people above a certain income level, I don't remember exactly what they are on this one. But people above a certain eligible are not eligible to lease from this complex anyway.
>> are they set on the amount of rent that they are charging? Or could they adjust it to meet the needs of people who need --
>> on this property there are no rent restrictions in terms of you have to rent these units for no more than x or no legs than x. Just income restrictions.
>> but I think that -- I mean if they find the idea agreeable, then we can work out the specifics. It's just that based on what the non-profit agencies and the housing -- in the housing area are saying, we can generate more than enough eligible clients of ours to take advantage of it. We may want to just do last year's. And which would be half of it. See how that works, you know, as a pilot. We have never done this before, so I don't see us, you know, favorably considering the request no matter who it comes from. But we find ours in a sort of bind. This looks like one way to deal with it. But I think the managers have every right to say we don't want to go down that road with you. In which case we will have to say look now work a little harder on getting us that cash.
>> uh-huh.
>> the way ms. Wingfield's letter is written, I think she's presuming somehow this space would be used for business purposes in terms of meetings or vacant apartments could be utilized as though it is office space. You can't do that with zoning kinds of regulations. It is really intended in terms of apartments to be used as apartments.
>> residents.
>> I don't know if we would ever say that we would pay for the use of somebody's community room. I mean, when we are looking for community meetings, we are looking for freebies. I don't know of apartment complexes that really charge for the use of their party room unless you are, you know, having a party in which case it's more of a cleanup fee in a residential fee.
>> if there are agencies that have a case management component where there is a little oversight already, it may make them feel better about it appreciate just depositing people and see ya later. We do have place that's provide case management, job placement assistance, educational programs. I mean --
>> what's the address of this apartment building?
>> it's -- it's off riverside drive but I don't have --
>> it's at pleasant valley road and lakeview drive.
>> lakeview drive.
>> so this really is to try to put together a proposal, not move on it. But it is, if they are interested in going down this road, let's get with stephen and a few appropriate non-profit agencies or one, depending on the number of clients they may have, try to flesh it out. Bring it back let us look at it, let them look at it, decide whether to just scan the idea or move further.
>> okay. So this is to -- let's take a further look, try to iron something out. Will do, yes.
>> if we can help, let us know. Was there a motion for that?
>> I will make it.
>> okay.
>> let joe know in my office, he can work with you as well.
>> okay.
>> I did want to report that there were -- there are two other patch-through receivables. One has been collected. The one from mountain ranch have not received the funds at this time. The management company, which is headquarter understand baltimore, maryland, did tell they me they mailed the check last Thursday, but that fee has not been collected yet.
>> okay. Let's get a motion on the --
>> motion related to --
>> ed second.
>> mr. Davis and mr. Blunt coordinate with stephen williams to see if we can identify agencies that mitt -- [multiple voices]
>> seeing how that would work.
>> pulling together a pilot project during this time period, specifically limited during this time period when they are in arrears until their occupancy rate bounces back and we can take money instead.
>> would we attach to that a limit, I mean say okay we are going to try to find a way to capture 15,000 or come up with something, let's face it if you have a $500 a month rent, let's say $500 is what they said you can have this apartment or that's what we would sign-off on. So a year, I mean you basically have $6,000 for that one apartment. And let's say we are going to go into three of them. So we could basically, you know, take on $18,000 as a -- is that kind of what you see judge? Is that where we are headed, we are not trying to set something in motion here where they say, you know, what -- we will always have even an apartment that, you know, doesn't have a lot of, you know, unoccupied space can also find three or four. So I can see where that kind of goes here's how we are going to pay you guys, you know, you have already set that in motion. So I would like -- I just want there to be a definitive amount that we are going to try this, see how that works. Let's face it, something may blow up that we -- unforeseen at this stage. We get somebody in there all of a sudden we have a liability because we've tried to work something out, they get in there, somebody gets hurt whatever I mean I guess you can sit here and come up with something wild. But as long as we can come up with a set amount, see how that works.
>> now, 55,000 is due now. But half of it was due last year, right.
>> that's right.
>> how much was that?
>> it's half.
>> about 26 -- approximately $26,000.
>> let's focus on getting the old --
>> old stuff.
>> the old stuff. That would be half of it basically.
>> uh-huh.
>> and I don't know that I would start off at whatever they charge. I mean, I would troy to get a little better deal -- I will I would try to get a little better deal than that. Maybe do like a six-month model.
>> I probably would want it to be about a year. Only because you don't tell somebody hi, you are moving in here and six months later you yank them out.
>> I would think stephen would have people that six months --
>> rather than having a proper conceived idea bring us back a plan and we will evaluate it and tweak it.
>> uh-huh.
>> okay.
>> ma'am, with you with this housing development.
>> no. Sarah is here on --
>> 32.
>> let me ask a couple of questions before we conclude. If memory serves me correctly, I think that I can remember when agape came in and were interested in -- in taking offer the major responsibilities of this particular complex. I think, if my memory serves me correctly, they were really pushing to make sure that the occupancy requirements, that they have before now is adhered to as far as looking at some of the social structures as far as making sure that the economic downturns of those persons that needed these particular units, they would be able to accommodate and I don't recall them saying that they would have no problems in doing just that. However, from are some vacancy situations that occur there now. My concern is that if -- if we do this for this particular folks, [indiscernible] compliance, then how will we address others that may be out there have similar conditions and say, well, can you all do the same thing for us? I really don't know what the answer to all of that is. I'm curious to see what we are doing here. If we are setting a precedent, which it is a first-time deal that we are dealing, what would be the overall ramification of the whole entire program. Of course we understand that this is a chodo, where money is taken off the tax rolls. But again there is some question in my mind about the testimony that I -- if my memory serves me correctly, that was driven that there would be no problem in dealing with this particular contract.
>> and I have -- I have looked at -- at their pro formas that they provided at the time that -- when they came to us to apply for the bonds and those pro formas predicted occupancies that were in the low 90s. Their occupancy today is in the low 60s. So the whole economics of making anything work just is sort of down the drain when you have that low of an occupancy situation.
>> is it worthwhile to contact mr. Corey over at the appraisal district to let them know what is going on? Is there anything judge that can happen on that because they have tax exempt status. Is it outly because there's a chodo or is it something that calls into question them being a chodo that mr. Corey could apply pressure from his end?
>> mr. Davis and I were discussing that very point before the meeting. If they qualified as a chodo the exemption is automatic. The appraisal district might have a requirement or rule about this sort of thing. But it's -- there's not one in the property tax code. But I think it would probably be worth making a phone call and --
>> because there have been people that have gotten ag exemptions or the wildlife exemptions. He can flat out call them into question if he thinks that it's not what was represented to the district. They have to prove themselves.
>> it's very possible. I would be glad to -- [multiple voices]
>> looking for housing to chat with you. That would help more than anything else.
>> sure.
>> anything further? More discussion on the motion? All in favor? That passes by unanimous vote. Less -- mr. Davis you will put this back on when it ready, hopefully two or three weeks.
>> yes.
>> thank you very much. 3. Approve a budget amendment and transfer to allow a refund payment to cherry mountain partners, ltd., And take appropriate action. We approved this action last week. This is just to transfer the fund to carry it out.
>> yes.
>> that's why I move approval.
>> second.
>> any more discussion? All in favor? That passes by unanimous vote.
>> move adjourn.
>> sond.
>> all in favor? That passes by unanimous vote, also.
Last Modified: TUesday, January 28, 2004 6:44 AM