STRATEGIC PRIORITY: Housing & Homelessness Solutions
AGENDA DATE: January 22, 2025
COUNCIL DISTRICT(S): 7
DEPARTMENT: Department of Housing and Community Development
EXECUTIVE: Robin Bentley
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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 $50,000,000.00 (the “Bonds”); proceeds of the Bonds will be loaned to The Culbreath, LP, an affiliate of DHA, to finance a portion of the cost of the construction of units for an affordable multifamily complex to be known as The Culbreath located at 2770 Bethurum Avenue, Dallas, Texas 75215 - Financing: No cost consideration to the City
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BACKGROUND
One of the authorities of the DHA is the responsibility to authorize and issue mortgage revenue bonds through its subsidiary, Housing Options, Inc. (collectively with DHA, the “Issuer”), for the financing of Low-Income Housing Tax Credit (LIHTC) multifamily development projects. The Issuer intends to issue its Multifamily Housing Mortgage Revenue Bonds (The Culbreath) Series 2025 in an amount not to exceed $50,000,000.00; proceeds of the Bonds will be loaned to The Culbreath, LP (the “Borrower”), an affiliate of DHA, to finance a portion of the cost of construction of units for The Culbreath, an affordable multifamily complex to be located at 2770 Bethurum Avenue, Dallas, Texas 75215 (the “Development”). Since the Development is located within the city of Dallas (City), Section 147(f) of the Code requires that in order for the Bonds to be tax-exempt, after a public hearing following reasonable public notice of the proposed bond issuance, the City Council, as the applicable elected representative of the city of Dallas, 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 authority under any documents related to the Development.
The Tax Equity and Fiscal Responsibility Act (TEFRA) public hearing notice was published in the Dallas Morning News on November 6, 2024. On November 14, 2024, at 10:00 am, 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 tax-exempt bonds to fund a portion of the costs for the Development will close within the next three months.
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 October 23, 2024, by Resolution No. 24-1601. The Development is a newly constructed multifamily project with 327 units for families earning below 60% of the Area Median Income (AMI). This Development supports the Dallas Housing Policy 2033 for Equity Strategy Target Area 1 by providing housing below 50% AMI and redevelopment in an underdeveloped area.
PRIOR ACTION/REVIEW (COUNCIL, BOARDS, COMMISSIONS)
The City Council was briefed by memorandum regarding this matter on January 3, 2025. <https://dallascityhall.com/government/citymanager/Documents/FY24-25%20Memos/Upcoming%20Agenda%20Item%20The%20Culbreath%20TEFRA%20Hearing%20Approval.pdf>
FISCAL INFORMATION
No cost consideration to the City.
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