9% Low Income Housing Tax Credits Pre-Applications with Texas Department of Housing and Community Affairs for 2008 Funding Year.

Transcription

1 9% Low Income Housing Tax Credits Pre-Applications with Texas Department of Housing and Community Affairs for 2008 Funding Year A Briefing To The Housing Committee Housing Department February 4, 2008

2 Purpose Consideration of the pre-application waiver of five projects that have been submitted for 9% tax credits as determined by the pre-application waiver procedure established in Council Resolution # adopted on January 11, March Avenue Townhomes fits priority 1 which is demolition/reconstruction of existing substandard multifamily projects Life Net SRO fits priority 3 which is special needs projects such as transitional housing for the homeless Carrington Place project fits priority 4 which is new construction for families Possible reconsideration of Fiji Senior Project and Frazier Berean Senior Project that both received final approval from the City of Dallas on February 28, 2007, but were not awarded 9 % tax credits by the Texas Department of Housing and Community Affairs for 2007 Both projects have reapplied to TDHCA for 9% tax credits for the 2008 funding year 2

3 Pre-application Waiver Procedure The applicants are required to submit a package along with an initial waiver fee of $500 February 4, 2008 briefing to the Housing Committee February 13, 2008 Council consideration of the preapplication waiver for the five individual projects February 13 March 3, 2008 Community Meetings March 3, 2008 Housing Committee briefing, for those projects that were granted a pre-application waiver on February 13, 2008 March 26, 2008 Council consideration of the support of the tax credits and any additional City funding Support letters are sent to TDHCA 3

4 March Avenue Townhomes March Avenue, Council District unit demolition/reconstruction of 60 New Townhomes 33 two-bedrooms, 24 three-bedrooms and 3 four-bedrooms 6 units for households at or below 30% area median family income 54 units for households at or below 60% area median family income 0 Market rate units Rents set at tax credit rents based on income levels Applicant A to be formed limited partnership sponsored by Dallas City Homes Tax credit investor will be limited partner Developer Dallas City Homes, Inc. is a certified CHDO and has developed a total of 1,000 multifamily units with 464 units financed with Low Income Housing Tax Credits Property Manager Lincoln Property Management Company Demolition/Redevelopment project qualifies under priority 1 demolition/redevelopment of an existing development 4

5 Map of March Avenue Townhomes 5

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8 Site Plan March Avenue Townhomes 8

9 Rendering March Avenue Townhomes 9

10 March Avenue Townhomes Sources and Uses SOURCES Tax Credit Equity $3,120,000 Taxable Debt 5,732,466 Deferred Developer Fee 206,205 TOTAL SOURCES $9,058,671 USES Land Acquisition $701,700 Demolition/Site Work 539,940 Hard Construction Costs 3,904,468 Other Direct Construction Costs 929,436 Soft Costs 643,000 Financing Costs 700,074 Marketing/Reserves 618,269 Developer Fee 1,021,784 Other TOTAL USES $9, 058,671 10

11 Issues: March Avenue Townhomes The Reserve Accounts on March Street were used to provide a loan for $180,000 without the prior consent of the City of Dallas Forgiveness of the $1.6 Million City loan Outstanding IRS issue whether they can demolish the project and rebuild while under a continuing compliance period for tax credits awarded in

12 Life Net Supportive Housing SRO Project 2734 Clarence Street, Council District units for families for rehabilitation 121 SRO Efficiency Units and 4 one-bedroom 100 units for households at or below 50% area median family income 25 units for households at or below 60% area median family income Rents will be further restricted to 50%, 40% and 30% and below to meet requirements for additional sources of funding Rents set at tax credit rents based on income levels Applicant Life Net-Supportive Housing SRO Community, L.P. Tax credit investor will be limited partner Developer LifeNet Community Behavioral Health has developed between 1300 and 1400 units of multifamily financed with Low Income Housing Tax Credits state wide, including Churchill at Pinnacle Park (200 units) on Cockrell Hill Road in Dallas where they are the General Partner Property Manager Churchill Residential Management, L.P. 12

13 Map of Life Net Supportive Housing Project 13

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16 Site Plan Life Net Supportive Housing SRO 16

17 Renderings Life Net Supportive Housing SRO 17

18 Life Net Supportive Housing SRO Sources and Uses SOURCES Tax Credit Equity $5,900,000 Conventional Loan 600,000 City G O Bonds 1,000,000 FHLB Bank 500,000 Private Fund Raising 850,000 Deferred developer fee 54,460 TOTAL SOURCES $8,904,460 USES Land Acquisition $900,000 Site work 100,000 Hard Construction Costs 5,077,056 Indirect Construction Costs 212,500 Architech/Engineering 445,000 Construction Loan 82,013 Operating Deficit 181,669 Financing Costs 203,713 Development Consulting Fee 75,000 Soft Cost Contingencies 50,000 Debt Sinking Fund 850,000 Developer Fee 727,509 TOTAL USES $8,904,460 18

19 Issues: Life Net Supportive Housing SRO The Developer is seeking a partnership with DHA for the purposes of obtaining a 100% ad valorem tax exemption 19

20 Carrington Place Apartment Project 2200 block of N. St. Augustine Road, Council District units for families for new construction of 30 units of Townhouse Design and 75 flat rental units 18 one-bedroom, 45 two-bedrooms and 42 three-bedrooms 105 units for households at or below 60% area median family income Rents set at tax credit rents based on income levels Applicant Carrington Villas Apartments of Dallas, L.P. Tax credit investor will be limited partner Developer Mark Wolcott has developed 8,000 units of tax credit projects statewide, including the Masters Apartments located at 1180 N. Masters Road and the St. Augustine Senior Project located at N. E. corner of Bruton and St. Augustine and Fairway Crossing at 7229 Ferguson Road in the City of Dallas (596 Units total for all three) Property Manager United Apartment Group 20

21 Map of Carrington Place Apartments 21

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24 Site Plan Carrington Place 24

25 Renderings Carrington Place No renderings are available at this time The proposed project will be 30 units of three story townhome design and 75 three story garden style design rental units 25

26 Carrington Place Apartment Project Sources and Uses SOURCES Bond Proceeds $6,500,000 Tax Credit Equity 4,244,163 GIC Income 31,179 Construction Period Income 309,053 Deferred Developer Fee 318,657 TOTAL SOURCES $11,403,052 USES Land Acquisition $500,000 Site work 1,109,500 Hard Construction Costs 5,111,772 Total Contractor Fees/General 870,978 Contingcncy 311,064 Indirect Construction Costs 359,000 Interim Financing Fees 1,137,470 Permanent Financing Fees 478,300 Other Soft Costs 50,000 Syndication 20,000 Developer Fee 1,334,968 Total Reserves 120,000 TOTAL USES $11,403,052 26

27 Issues: Carrington Place Apartment Project With an initial low score of 153, Carrington Place ranked last in the urban category for Region 3 27

28 Fiji Senior Project and Frazier Berean Projects Resubmitted 9% Application to TDHCA for 2008 Both the Fiji Senior Project and the Frazier Berean Senior Projects received approval from the City of Dallas for 9% tax credits on February 28, 2007 Neither of these senior projects was awarded 9% tax credits by TDHCA in 2007, therefore the developers/owners resubmitted their applications to TDHCA for 9% tax credits for the 2008 funding year 28

29 Fiji Senior Project 201 Fran Way, Council District new construction units for seniors 65 one-bedroom and 65 two-bedrooms 104 units for households at or below 50% area median family income 20 units for households at or below 60% area median family income 6 Market rate units Rents set at tax credit rents based on income levels Applicant SDC Fiji Senior, L.P. SDC-CG Senior, LLC, General Partner LLC ownership Initial members 60% owned by Jay Oji and 40% owned by Joseph Ogumadu Tax credit investor will be limited partner Developer Sphinx Development Corporation has developed 740 units of multifamily in the City of Dallas that were financed with Low Income Housing Tax Credits Property Manager Alpha Barnes 29

30 Fiji Senior Project This project was approved for $1.2 Million in CDBG Funds and these funds were used to close on the Acquisition of the project on November 30, 2007 in the amount of $830, with demolition of the 3 industrial buildings to start by February 8, 2008 This project received at total of $3.5 Million, $2.8 Million from the North Texas Council of Government (NTCOG) along with $702,997 from the City of Dallas Public Infrastructure money on December 13, 2006 which represents the City s 20% required match for a transit oriented development The pre-application waiver was granted by the Dallas City Council on December 13, 2006 This transit oriented development project could also qualify under priority 4 new construction for families with a priority given to transit oriented developments 30

31 Map of Fiji Senior 31

32 Fiji Senior Project 32

33 Fiji Senior 33

34 Site Plan Fiji Senior 34

35 Renderings Fiji Senior 35

36 Fiji Senior Sources and Uses SOURCES Tax Credit Equity $10,558,944 Taxable Debt 3,300,000 City Funding 1,200,000 Deferred Developer Fee 234,315 TOTAL SOURCES $15,293,259 USES Land Acquisition $1,235,000 Tax Credit Costs 69,850 Hard Construction Costs 9,764,317 Other Direct Construction Costs 660,000 Soft Costs 133,698 Financing Costs 793,000 Reserves 616,791 Pre-stabilization costs 400,000 Developer Fee 1,620,603 TOTAL USES $ 15,293,259 36

37 Issues: Fiji Senior The City took the risk to fund the acquisition and demolition loan prior to Sphinx Development Corporation getting an award of 9% tax credits from TDHCA 37

38 Frazier Berean Senior Project 3326 Mingo Street, Council District new construction units for seniors 127 one-bedrooms and 23 two-bedrooms 8 units for households at or below 30% area median family income* 53 units for households at or below 50% area median family income* 89 units for households at or below 60% area median family income* Rents set at tax credit rents based on income levels Applicant Carpenter s Point, L.P. Hebron Partners, LLC, General Partner LLC ownership Affiliate of the Frazier Berean Group Tax credit investor will be limited partner Developer and/or Co-Developer Carleton Residential has developed 2,166 units state wide and 1,685 new multifamily units in the City of Dallas that were financed with Low Income Housing Tax Credits Property Manager To be determined * This is a change from the income mix contained in the approval resolution dated February 28, 2007 (CR# ) which stated income of 15 units at 30% and below, 130 units at 60% and below with 5 units at market rate and must be amended in March,

39 Frazier Berean Senior Project This project has re-applied for up to $750,000 in Bond Funds When this project was approved on February 28, 2007 it included a commitment for $750,000 in HOME funds When the project did not receive an award of the 9% tax credits from TDHCA, this $750,000 was reallocated This project is part of a redevelopment initiative for the Frazier Courts Neighborhood that will include residential, retail and commercial uses The applicant has requested that the in-kind social service requirement be increased to 100% (this is an exception of the 50% requirement) of the 200 per unit for a minimum of $40,000 due to the limited amount of cash flow and the ability of The Frazier Berean Group to provide a majority of the in-kind contributions 39

40 Map of Frazier Berean 40

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43 Site Plan Frazier Berean 43

44 Renderings Frazier Berean 44

45 Frazier Berean Senior Project SOURCES Tax Credit Equity $10,200,000 Conventional Loan 2,358,738 City Funding 1,050,000 In-kind developer fee 70,368 TOTAL SOURCES $13,679,106 USES Land Acquisition $ 0 Site work 896,271 Hard Construction Costs 6,869,069 Ancillary Hard Costs 1,410,408 Indirect Construction Costs 988,500 Financing Costs 1, 280,627 Reserves 300,000 Developer Fee 1,934,231 TOTAL USES $13,679,106 45

46 Issues: Frazier Berean In spite of the applicant s assumption of a new proposed $750,000 loan on their pre-application to TDHCA, this project received an initial score of 157 which is third from the bottom in the urban category for Region 3 46

47 Next Steps See Slide #3 47