STRATEGIC PRIORITY: Housing & Homelessness Solutions
AGENDA DATE: August 28, 2024
COUNCIL DISTRICT(S): 4
DEPARTMENT: Department of Housing & Neighborhood Revitalization
EXECUTIVE: Robin Bentley
______________________________________________________________________
SUBJECT
Title
A public hearing to receive comments regarding an application by Royal Crest Preservation, LLC (Applicant) to the Texas Department of Housing and Community Affairs (TDHCA) for 4% Non-Competitive Low Income Housing Tax Credits for Royal Crest Apartments located at 3558 Wilhurt Avenue, Dallas, TX 75216; and, at the close of the public hearing, authorize a Resolution of No Objection for Applicant, related to its application to TDHCA for the development of Royal Crest Apartments - Financing: No cost consideration to the City
Body
BACKGROUND
Royal Crest Preservation, LLC (Applicant), submitted a Request for Resolution application to the City for a Resolution of No Objection for its application to Texas Department of Housing and Community Affairs (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 Royal Crest Apartments, a 167 multifamily complex, located at 3558 Wilhurt Avenue, Dallas, TX 75216 (Project). A purchase and sale agreement for the Property has been executed between the current owner of the Property and an affiliate of the Applicant. TDHCA requires 4% Housing Tax Credit applicants 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 comments on the proposed development. Once a resolution is adopted and submitted to TDHCA, it cannot be changed or withdrawn.
The Project consists of 167 multifamily residential units. The site consists of 11 two-story apartment buildings totaling 167 units, and one single-story mechanical building. Amenities include leasing office, laundry rooms, and community space. Proposed work is moderate rehab of existing units to include paint, flooring, doors, kitchen cabinets and countertops, appliances, bathroom vanities and accessories, as well as mechanical, electrical, and plumbing upgrades and replacements throughout. The existing property was developed in 1969.
The work at the units will generally consist of replacement of finishes, doors, kitchen and bathroom cabinetry, countertops, sinks, appliances, bathroom accessories and plumbing fixtures (with Water Sense), exhaust fans, fan coil units, thermostats, light fixtures (with light emitting diodes (LED)), ceiling fans, smoke/CO detectors, electrical panels, and GFCI receptacles.
Five Percent of total units (nine units) will be converted to Uniform Federal Accessibility Standards (UFAS)/Americans with Disabilities Act (ADA) mobility compliant. Two Percent (four units) will be converted to fully HVI-compliant. Two of the UFAS mobility units will be housed in a 2,340 SF addition to Building 3. Site-wide, work will include repair or replacement of central plant boiler; new site lighting, new LED lighting for all corridors, amenity spaces, Operations spaces, and stairwells as needed; jetting waste stacks and sewer mains as needed; repairs/replacements of sanitary sewer lines as needed; repairs/replacements of underground boiler lines as needed.
Other site work will include new site signage, accessibility upgrades at exterior paths of travel, repair/replace damaged sidewalks, reseal/restripe parking areas including configuration of ADA parking as required, repairs to fencing, new accessible trash enclosures, landscape/planting upgrades, new gazebo and grill area, and new playground.
Work on building exteriors will include painting and repairs to brick masonry, cleaning, and repairs to siding, repair/replace roofing as needed, replacement of gutters and downspouts, replacement of concrete stair treads and landings as needed, additional attic insulation. If approved, this tax credit re-syndication and bond issuance will allow the Applicant to implement much needed capital improvements and modernize the property thereby extending its useful life. Without this investment of new capital, the property will either fall into a state of disrepair or be subject to a conversion to market rate units, further eliminating access to affordable housing in the city. The preservation of existing affordable housing is a priority of the City to ensure our residents are provided with safe, decent affordable housing and are not displaced due to expiring income restrictions or forced to reside in substandard living conditions. Over the next decade, the income restrictions on almost 10,000 units developed through the LIHTC program will expire unless they are acquired, renovated, or redeveloped by affordable housing preservation.
Total development costs are estimated to be approximately $41,071,680.00, which includes the acquisition price for the land. The construction budget is estimated to be approximately $21,071,680.00 which is $126,177.72 per unit. The funding resources includes a direct grant from the U.S. Department of Housing and Urban Development in the amount of $10M as shown below.
|
Proposed Uses |
Amount |
|
Tax Credit Equity |
$19,675,000.00 |
|
Conventional Loan |
$20,411,000.00 |
|
Deferred Developer Fee |
$ 3,171,879.00 |
|
HTC Equity |
$ 1,772,097.00 |
|
HUD GRRP Leading Edge |
$10,000,000.00 |
|
Total |
$55,029,976.00 |
|
Proposed Uses |
|
|
Acquisition Costs |
$20,000,000.00 |
|
Hard Costs |
$21,071,680.00 |
|
Project Soft Costs |
$ 4,266,444.00 |
|
Other Soft Costs |
$ 185,000.00 |
|
Financing Issuance Costs |
$ 975,176.00 |
|
Financing Legal Costs |
$ 376,000.00 |
|
Equity Syndication Costs |
$ 103,788.00 |
|
Reserves and Escrows |
$ 1,309,383.00 |
|
Soft Cost Contingency |
$ 295,320.00 |
|
Developer Fee |
$ 6,447,185.00 |
|
Total |
$55,029,976.00 |
The current income restrictions will be maintained at the property to ensure no residents are displaced due to increased rents. The current rental restrictions are broken down as follows: 167 of the 167 units are reserved for households earning between 0%-60% of Area Median Income.
The Dallas City Council on May 9, 2018, adopted the Comprehensive Housing Policy (CHP), Resolution Nos. 18-0704 and 18-1680, as amended on November 28, 2018, which provided a policy including evaluation criteria for developers requiring Resolutions of Support or No Objection for rental housing developments seeking Housing Tax Credits through TDHCA. On June 12, 2019, Resolution No. 19-0884 authorized an amendment to the CHP to modify the evaluation criteria for developers requiring Resolutions of Support or No Objection for rental housing development seeking Housing Tax Credits through TDHCA. The modified evaluation criteria include standard thresholds for both 4% and 9% HTC applications such as evidence of site control, TDHCA minimum site standards, affirmatively further fair housing, and other requirements.
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)
The Housing and Homelessness Solutions Committee will be briefed regarding this matter on August 26, 2024.
FISCAL INFORMATION
No cost consideration to the City.
MAP
Attached