STRATEGIC PRIORITY: Housing & Homelessness Solutions
AGENDA DATE: January 22, 2025
COUNCIL DISTRICT(S): 2
DEPARTMENT: Department of Housing and Community Development
EXECUTIVE: Robin Bentley
______________________________________________________________________
SUBJECT
Title
A public hearing to receive comments regarding an application by LIH Paradise Gardens Preservation, LP, an affiliate of LEDG Capital, LLC (collectively referred to as Applicant) to the Texas Department of Housing and Community Affairs (TDHCA) for 4% Non-Competitive Low Income Housing Tax Credits (4% Housing Tax Credits) for Paradise Gardens located at 1500 North Garrett Avenue, Dallas, Texas 75206 (Project); and, at the close of the public hearing, authorize a Resolution of No Objection for Applicant, related to its application to TDHCA for the redevelopment of Paradise Gardens - Financing: No cost consideration to the City
Body
BACKGROUND
LIH Paradise Gardens Preservation, LP, a Texas limited partnership, submitted an application to the City for a Resolution of No Objection for its application to TDHCA for 2024 4% Non-Competitive Housing Tax Credits (4% Housing Tax Credits). The 4% Housing Tax Credits will be used for the redevelopment of Paradise Gardens, a 113-unit multifamily complex located at 1500 North Garrett Avenue, Dallas, TX 75206 (Project). TDHCA requires 4% Housing Tax Credit applicants to provide a Resolution of No Objection from the governing body of the jurisdiction in which the proposed development will be sited. As part of these TDHCA requirements, the governing body must also conduct a public hearing for citizens to provide comment on the proposed development. Once a resolution is adopted and submitted to TDHCA, it cannot be changed or withdrawn.
The Project is located one linear mile or less from a development that serves the same type of household Target Population as the proposed Project and has received an allocation of Low-Income Housing Tax Credits (or private activity bonds) for new construction in the three-year period preceding the date the Certificate of Reservation is issued (the “One Mile Three Year Rule”). Pursuant to 10 Tex. Admin. Code § 11.3(d), the City Council, as the Governing Body, must by vote specifically allow the construction of the Project and authorize an allocation of Housing Tax Credits for the Project. This Project is located in Council District 2, it is not a Racially/Ethnically Concentrated Area of Poverty (R/ECAP) and therefore a TDHCA waiver regarding the One Mile Three Year Rule is supported by City staff for the project location.
The Applicant, LIH Paradise Gardens Preservation, LP, is proposing to redevelop the Property. A to-be-formed single asset entity or its affiliate with the Dallas Housing Finance Corporation (DHFC) as 100% owner, will be the general partner. A to-be-formed limited liability company or its affiliate with Paradise Gardens Manager, LLC, a Texas limited liability company as 100% owner, will be the special limited partner. An amended and restated agreement of limited partnership will be executed to admit the tax credit equity investor as investor member once identified.
Paradise Gardens is a 1932 built, 113-unit, affordable housing property located in Dallas, Texas where 80% of the units are unrestricted (market-rate) and 20% of the units are under a one-year Housing Assistance Payment (HAP) contract. The Applicant proposes to acquire the property and renovate all 113 units. The units are comprised of 96 one-bedroom and 17 two-bedroom units. The scope of the rehab will be a comprehensive interior renovation of common areas and unit interiors, mechanical systems (Heating, Ventilation and Air Conditioning [HVAC]), elevators, roof repairs, common grounds/landscaping, exterior doors, fences and parking lot repairs. The rehab scope will be focused on in-unit improvements that more directly benefit residents and avoid issues typical of wood-framed older properties.
The full scope of work will include but is not limited to:
• New asphalt shingle roofing
• New windows and doors at all dwelling units
• HVAC replacement/upgrades in all units
• New flooring at all dwelling units
• Replacement of all unit kitchen cabinets, countertops, appliances, and plumbing fixtures
• Repainting of unit interiors
• Parking lot improvements
• Repair/replacement of drywall, baseboards as needed
• Replacement of all dwelling unit bathroom cabinets, countertops, and finishes
• New exterior paint
• Accessibility upgrades including making 4 units fully handicapped accessible
• Repair/replacement of accessible path of travel
• Landscaping improvements
Amenities include a shared laundry room, library, community room, security cameras and supportive services. The Applicant plans to add free community-wide Wi-Fi, picnic areas, and barbeques. Social services will include financial literacy, employment readiness, and health and nutrition education.
Planned rehab includes light tenant-relocation during rehab. The project team is committed to minimizing the disruption and hardship this temporary relocation will cause and will work with households to ensure they are well informed and well supported during their relocation. A relocation coordinator will work directly with households to ensure that counseling and advisory services are offered to residents in an efficient manner by a familiar face. Renovations will be completed under occupied renovation with displacement only between the hours of 8:00 a.m. to 5:00 p.m. If for any reason the unit is not secure by 5:00 p.m., the household is provided with a meal allowance of up to $59.00 per person in the household and overnight lodging in a local hotel facility.
The Applicant will also work with the Office of Emergency Management & Crisis Response for security input/upgrades, community activities, and incorporate best practices of Crime Prevention Through Environmental Design. Additionally, the Applicant will provide modern security features to include a full camera system, controlled access, a community crime watch program, and participation in National Night Out to ensure a safe living environment for all residents and staff.
Total development costs are estimated to be approximately $34,078,746.00 which includes the acquisition price for the land. The construction budget is estimated to be approximately $5,284,299.00 which is $46,354.00 per unit.
|
Proposed Financing Sources |
Amount |
|
Permanent Financing |
$ 13,913,300.00 |
|
Tax Credit Equity |
$ 10,955,000.00 |
|
Net Operating Income |
$ 831,521.00 |
|
Seller Note |
$ 5,750,000.00 |
|
Deferred Developer Fee |
$ 2,628,925.00 |
|
Total |
$ 34,078,746.00 |
|
Proposed Uses |
Amount |
|
Acquisition Cost |
$ 20,075,000.00 |
|
Construction Contract |
$ 5,284,299.00 |
|
Construction Contingency |
$ 528,430.00 |
|
Soft Costs |
$ 739,896.00 |
|
Financing Costs |
$ 1,736,281.00 |
|
Syndication Costs |
$ 65,000.00 |
|
Capitalized Interest |
$ 831,521.00 |
|
Reserves |
$ 997,197.00 |
|
Developer Fee |
$ 3,821,122.00 |
|
Total |
$ 34,078,746.00 |
The existing 90 market-rate units will become affordable housing units with a Low Income Housing Tax Credit (LIHTC) Land Use Restrictive Agreement and include the 23 HAP units The rental restrictions will be broken down as follows: 23 of the 113 units are reserved for households earning between 0%-30% of Area Median Income (AMI), 62 of the 113 units are reserved for households earning between 0%-60 of AMI, and 28 of the 113 units are reserved for households earning between 0%-80% of AMI.
On April 12, 2023, the City Council adopted the Dallas Housing Policy 2033 (DHP33) by Resolution No. 23-0443, and the Dallas Housing Resource Catalog to include the Low-Income Housing Tax Credit program for development of multifamily housing by Resolution No. 23-0444.
On January 9, 2024, the DHFC Board of Directors adopted a resolution declaring its intent to issue bonds for the Property and authorized the filing of an application for allocation of private activity bonds with the Texas Bond Review Board.
To receive a staff recommendation for a Resolution of No Objection, the Applicant must satisfy all threshold requirements, rehabilitation requirements, and affirmatively further fair housing.
PRIOR ACTION/REVIEW (COUNCIL, BOARDS, COMMISSIONS)
On January 9, 2024, the Dallas Housing Finance Corporation (DHFC) authorized a preliminary inducement resolution declaring intent to issue $18,000,000.00 in private activity bonds for a loan to Applicant) to provide financing for the Project.
The Housing and Homelessness Solutions Committee was briefed by memorandum regarding this matter on December 10, 2024. <https://cityofdallas.legistar.com/View.ashx?M=F&ID=13608494&GUID=59BF0C4F-BD64-430E-A54E-C9D714E0BEB0>
FISCAL INFORMATION
No cost consideration to the City.
MAP
Attached