STRATEGIC PRIORITY: Housing & Homelessness Solutions
AGENDA DATE: August 24, 2022
COUNCIL DISTRICT(S): 4
DEPARTMENT: Department of Housing & Neighborhood Revitalization
EXECUTIVE: Majed Al-Ghafry
______________________________________________________________________
SUBJECT
Title
Authorize a development loan agreement with Brompton Community Housing Development Corporation and/or its affiliates, conditioned upon Skyline at Cedar Crest receiving 9% Housing Tax Credit award for the development of a 107-unit mixed-income affordable multifamily complex located at 2720 East Kiest Boulevard in Dallas, Texas - Not to exceed $3,750,000.00 Financing: HOME Investment Partnership Program Funds
Body
BACKGROUND
Brompton Community Housing Development Corporation (BCHDC) submitted a proposal under the City’s Notice of Funding Availability (NOFA), issued on August 7, 2020, as amended, to receive gap financing in the form of a cashflow loan to support acquisition and development of affordable housing units located within the City limits. The NOFA was issued by the Department of Housing and Neighborhood Revitalization (Housing) in accordance with the City’s Comprehensive Housing Policy (CHP).
The Department of Housing & Neighborhood Revitalization administers programs to appropriately incentivize private investment for the development of quality, sustainable housing that is affordable to the residents of the City. Specifically, Housing administers the New Construction and Substantial Rehabilitation Program which, when necessary, seeks to provide financial assistance to new developments or to substantially rehabilitate existing developments. All projects seeking financial assistance are required to submit a Notice of Intent to apply for financial assistance through the NOFA to Develop Affordable Homeownership and Rental Housing. As outlined in the NOFA, multiple sources of funding are available, however, proposed projects must meet specific thresholds to qualify for the use of a specific funding source. At minimum, each proposed project must be composed of at least five affordable units and must achieve a fundable score as outlined in the NOFA solicitation. The proposed Skyline at Cedar Crest project received a fundable score of 114 points.
In addition to NOFA funding, BCHDC plans to utilize 9% Competitive Low Income Housing Tax Credits (HTC) from the Texas Department of Housing and Community Affairs (TDHCA) to acquire and construct the property. The Resolution of Support for the development received City Council approval on February 24, 2021 during the 2021 tax credit cycle, by Resolution No. 21-0126. The requested NOFA funds, if approved, will cover the gap created by recent market conditions, increased construction costs, and stabilize the viability and economics of the development. TDHCA requires all 9% Competitive HTC projects have final commitment of all funding sources by the August tax credit cycle deadline.
BCHDC proposes to develop 107 mixed-income multi-family units on 6+ acres within the Cedar Crest community at 2720 East Kiest Blvd. The 107 units are comprised of forty-one 1-bedroom, fifty 2-bedroom, and sixteen 3-bedroom units ranging from 700-1,140 square feet. The project will include common area amenities, such as on-site leasing center, fitness center, swimming pool, business/computer center, multifunctional learning center, community room, pergola, barbeque grills, and picnic tables. Unit amenities include ceiling fans, garden tubs and walk-in showers, walk-in closets, high-end cabinetry and finishes, Energy Start appliances, nine-foot ceilings, full size washer/dryer connections, faux wood flooring, and central heating, ventilation and air conditioning. Also, WiFi will be provided in the common areas/community space for residents. Security features will include security cameras, perimeter fencing, security lighting on buildings, common areas/pathways, and parking lot. Additionally, the project will provide a robust portfolio of resident services to include classes on adult, job and career, and family development. Other targeted resident services include shuttle service, K-12 programming, afterschool programming, National Night Out, crime watch meeting, recreational activities, social events, social services and referrals, and annual health fair.
The proposed development is 0.5 miles from the nearest high frequency public transit stop, and 0.25 mile from three different public parks with northern views of the Dallas skyline. Fiesta Mart, a full-scale grocery store, pharmacy, John Neely Bryan Elementary School are all within a mile of the site. The development of workforce housing in this location helps the City of Dallas to meet its housing goals and provide high quality housing in a neighborhood currently underserved with new housing construction.
The unit mix and rental rates are as follows:
|
Unit Type |
AMI |
Units |
Rent |
|
1BR |
30% |
4 |
$ 548.00 |
|
1BR |
50% |
13 |
$ 913.00 |
|
1BR |
60% |
16 |
$1,096.00 |
|
1BR |
Market Rate |
8 |
$1,150.00 |
|
2BR |
30% |
4 |
$ 657.00 |
|
2BR |
50% |
16 |
$1,096.00 |
|
2BR |
60% |
19 |
$1,315.00 |
|
2BR |
Market Rate |
11 |
$1,362.00 |
|
3BR |
30% |
1 |
$ 759.00 |
|
3BR |
50% |
5 |
$1,266.00 |
|
3BR |
60% |
7 |
$1,519.00 |
|
3BR |
Market Rate |
3 |
$1,736.00 |
Total development costs are anticipated to be approximately $26,597,686.00 which includes the $1,401,120.00 acquisition price for the property. The construction budget is anticipated to be approximately $18,049,981.00 which is $168,691.00 per unit. The anticipated financing sources and uses are as follows:
|
Financing Sources |
Amount |
|
Regions Capital Markets Loan |
$ 7,935,000.00 |
|
Regions Affordable Housing Equity |
$ 13,498,650.00 |
|
GP Capital |
$ 100.00 |
|
City of Dallas Loan |
$ 3,750,000.00 |
|
Deferred Developer Fee |
$ 1,413,936.53 |
|
Total |
$ 26,597,686.00 |
|
Proposed Uses |
Costs |
|
Acquisition |
$ 1,401,120.00 |
|
Construction Costs |
$ 18,049,981.00 |
|
Indirect Construction Costs |
$ 801,165.00 |
|
Financing, Soft Costs |
$ 2,162,082.00 |
|
Developer Fee |
$ 3,204,784.00 |
|
Reserves |
$ 978,554.00 |
|
Total |
$26,597,686.00 |
After the development is complete, and as a requirement of the Applicant’s Application to TDHCA for HTC, the Applicant will provide at least 9 of the 107 units to households earning 0%-30% of Area Median Income (AMI), 34 of the 107 units will be made available to households earning 31%-50% AMI, 42 of the 107 units will be made available to households earning 51%-60% AMI, and the remaining 22 units will remain non-income-restricted market-rate. As requirement of the HOME funding, the Applicant must provide 18 HOME-assisted units consisting of 14 High HOME and 4 Low HOME units. The affordable and HOME-assisted units must remain affordable for a minimum of twenty years, per federal and CHP requirements.
The Development has been found to affirmatively further fair housing by the Office of Fair Housing. Staff recommend approval of this item as it furthers the mixed-income housing goals of the CHP, meets the threshold requirements of the NOFA, and the financial gap confirmation is under review by third-party underwriting.
Staff confirmed that this Project would not be feasible but for the City’s participation and that the Project furthers the goals of the CHP. Staff recommends approval of this item to allow this mixed-income housing development to move forward.
ESTIMATED SCHEDULE OF PROJECT
Begin Construction January 2023
Complete Construction June 2024
PRIOR ACTION/REVIEW (COUNCIL, BOARDS, COMMISSIONS)
The Housing and Homelessness Solutions Committee (HHSC) was briefed on the development and the authorization of a Resolution of Support on February 22, 2021. The HHSC approved moving forward to Council for consideration.
On February 24, 2021, City Council held a public hearing and following the hearing, adopted a Resolution of Support related to the Development and Developer’s 9% Competitive Low Income Housing Tax Credits application to TDHCA by Resolution No. 21-0367.
The Housing and Homelessness Solutions Committee was briefed regarding this matter on June 27, 2022. The HHSC approved moving the item forward to Council for consideration.
FISCAL INFORMATION
|
Fund |
FY 2022 |
FY 2023 |
Future Years |
|
HOME Investment Partnership Program Funds |
$3,750,000.00 |
$0.00 |
$0.00 |
M/WBE INFORMATION
In accordance with the City’s Business Inclusion and Development Policy adopted on September 23, 2020, by Resolution No. 20-1430, as amended, the M/WBE participation on this contract is as follows:
|
Contract Amount |
Procurement Category |
M/WBE Goal |
M/WBE % |
M/WBE $ |
|
$18,049,981.00 |
Construction |
32.00% |
32.00% |
$5,775,993.92 |
|
• This contract meets the M/WBE goal. |
|
• Brompton Community Housing Development Corporation - Non-Local; Workforce 0.00% Local |
OWNER
Brompton Community Housing Development Corporation
Eleanor M.C. Fanning, Executive Director
MAP
Attached