STRATEGIC PRIORITY: Government Performance and Financial Management Housing & Homelessness Solutions
AGENDA DATE: February 12, 2025
COUNCIL DISTRICT(S): 4
DEPARTMENT: Office of Government Affairs
EXECUTIVE: Elizabeth Saab
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SUBJECT
Title
Authorize the approval of the City Council of the City of Dallas, as the applicable elected representative as defined by Section 147(f)(2)(E) of the Internal Revenue Code of 1986, as amended (the “Code”), of the issuance of multifamily residential mortgage revenue bonds issued by the Dallas Housing Authority (”DHA”) through its subsidiary, Housing Options, Inc. in a series of tax-exempt bonds in an amount not to exceed $35,000.000.00 (the “Bonds”); proceeds of the Bonds will be loaned to Royal Crest Preservation, LLC to finance a portion of the cost of the renovation of units for an affordable multifamily complex to be known as Royal Crest Apartment located at 3558 Wilhurt Avenue, Dallas, Texas 75216 - Financing: No cost consideration to the City
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BACKGROUND
Pursuant to Chapter 392 of the Texas Local Government Code, the DHA may authorize the issuance of bonds in one or more series for a corporate purpose of the DHA, including the issuance of mortgage revenue bonds for the financing of Low-Income Housing Tax Credit (“LIHTC”) multifamily development projects. The DHA, through its subsidiary, Housing Options, Inc. (collectively, the “Issuer”), intends to issue its Multifamily Housing Mortgage Revenue Bonds (Royal Crest) Series 2025 in an amount not to exceed $35,000,000.00; proceeds of the Bonds will be loaned to Royal Crest Preservation, LLC (the “Borrower”) to finance a portion of the cost of the renovation of the Development. Since the Development is located within the city of Dallas (”City”), Section 147(f) of the lnternal Revenue Code of 1986, as amended (the “Code”), requires that in order for the Bonds to be tax exempt, any issuance of tax-exempt multifamily housing revenue bonds be approved, after a public hearing following reasonable public notice of the proposed bond issuance, the City Council, as by the applicable elected representative of the governmental unit on behalf of which such bonds are issued and having jurisdiction of the area in which the multifamily project is located. City, must approve the bond issuance by the Issuer. Approval of the City is for the sole purpose of satisfying the conditions and requirements of Section 147(f) of the Code and is not to be construed as an undertaking by the City. That is, the Bonds are not issued by, or on behalf of, the City. The Bonds shall not, therefore, constitute a City liability, indebtedness, or obligation, nor shall any City assets be pledged to pay the Bonds. The City’s name will not appear on the Bonds. City staff has not reviewed or approved any documents related to the Bond issuance or reviewed any credit issues regarding the Development. The Bonds shall specifically provide that the Bonds are not a debt of the City of Dallas, Dallas County or the state of Texas and that the City of Dallas, Dallas County and state of Texas are not liable with respect to the Bonds. The City is not responsible for the payment of the Bond obligations nor to fulfill DHA’s or the Issuer’s authority under any of the documents related to the Development.
The Tax Equity and Fiscal Responsibility Act (“TEFRA”) public hearing notice was published in the Dallas Morning News on December 23, 2024. On December 30, 2024, at 10:30am, the public hearing was held with no outside participants in attendance, and thus, no comments made. Under applicable federal income tax law, the TEFRA approval may only be valid for a one-year term. It is anticipated that the Bonds will close in April. On September 9, 2024, the Texas Bond Review Board issued a bond reservation to the Issuer for the Development in an amount not to exceed $35,000,000.00.
The Borrower previously received a Resolution of No Objection from the Dallas City Council for its application to the Texas Department of Housing and Community Affairs for a 4% Non-Competitive LIHTC on August 28, 2024 by Resolution No. 24-1232. The Development is a multifamily residential complex with 167 units to be made available for families earning between 0%-60% of the Area Median Income.
Dallas Housing Authority’s entity Housing Options, Inc. will issue the bonds for the Royal Crest transaction. The Tax, Equity and Fiscal Responsibility Act for the project was held December 30, 2024 following notice in the Dallas Morning News.
PRIOR ACTION/REVIEW (COUNCIL, BOARDS, COMMISSIONS)
The Housing and Homelessness Solutions Committee was briefed regarding this matter on August 26, 2024.
On August 28, 2024, the City Council held a public hearing regarding this matter by Resolution No. 24-1232
This item has no prior action.
FISCAL INFORMATION
No cost consideration to the City.
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