STRATEGIC PRIORITY: Economic and Neighborhood Vitality
AGENDA DATE: February 24, 2021
COUNCIL DISTRICT(S): 10
DEPARTMENT: Department of Housing & Neighborhood Revitalization
EXECUTIVE: Dr. Eric A. Johnson
______________________________________________________________________
SUBJECT
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Authorize (1) the adoption of a Resolution of Support for Sycamore Strategies, LLC, or its affiliate (Applicant), related to its application to the Texas Department of Housing and Community Affairs for 9% Low Income Housing Tax Credits for the development of Cypress Creek at Forest Lane; and (2) an agreement with the Applicant for a line of credit in the amount of $500.00 for the proposed multifamily development - Not to exceed $500.00 - Financing: General Fund
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BACKGROUND
Sycamore Strategies, LLC. or its affiliates (Applicant) submitted a pre-application to the Texas Department of Housing and Community Affairs (TDHCA) for 2021 9% Competitive Housing Tax Credits (9% HTC) for the development of Cypress Creek at Forest Lane Apartments, a ground-up development of a 200-unit mixed-income multifamily complex located at 11520 North Central Expressway, Dallas, TX 75243. Anthem Interests, LLC (Anthem), an affiliate of applicant, has executed a purchase contract with Parula Partners LP, the current property owner. Anthem may transfer the purchase contract to an affiliate.
In the administration of its 9% HTC Program, TDHCA awards application points for a resolution from a governing body of a local municipality on the following basis:
Within a municipality, the application will receive:
§ 17 points for a resolution from the governing body of that municipality expressly setting forth that the municipality supports (Resolution of Support) the application or development; or
§ 14 points for a resolution from the governing body of that municipality expressly setting forth that the municipality has no objection (Resolution of No Objection) to the application or development.
Within the extraterritorial jurisdiction of a municipality, the Application may receive:
§ 8.5 points for a resolution from the governing body of that municipality expressly setting forth that the municipality supports (Resolution of Support) the Application or Development; or
§ 7 points for a resolution from the governing body of that municipality expressly setting forth that the municipality has no objection (Resolution of No Objection) to the Application or Development
The Applicant, a to be formed Texas limited partnership, is proposing to develop Cypress Creek at Forest Lane Apartments. The Applicant proposes the limited partnership include Cypress Creek Forest Lane LP, a to be a formed limited liability company with Sycamore Strategies, LLC or its affiliate as 100% owner of the Special Limited Partner as managing partner of the project. Additionally, a limited partner will be admitted to the partnership once a tax credit investor is identified.
The Applicant proposes to develop 200 units. The 200 units will be comprised of 80 one-bedrooms, 100 two-bedrooms, and 20 three-bedrooms. Planned amenities feature a resort style swimming pool, pavilion with seating and fans, a spacious dog park, a fitness studio, business center, library and movie theatre. Support staff will also be onsite to provide resources to residents. The site is also located within a half mile of the Forest Lane Dallas Area Rapid Transit rail station.
Total development costs are anticipated to be approximately $47,589,846.00 which includes the acquisition price for the land. The hard cost construction budget is anticipated to be $31,709,727.00 which is $158,549.00 per unit. The total construction amount includes a 5% contingency.
After the development is complete, 50 of the 200 units will be made available to households earning 0%-30% of Area Median Income (AMI), 57 of the 200 units will be made available to households earning between 61%-80% of AMI, and 93 of the 200 units will be made available at market rate.
|
Proposed Financing Sources |
Amount |
|
Permanent Loan |
$32,500,000.00 |
|
Housing Tax Credits Equity |
$14,098,590.00 |
|
Deferred Developer Fee |
$ 990,756.00 |
|
City of Dallas Grant |
$ 500.00 |
|
Total |
$47,589,846.00 |
|
Proposed Uses |
Cost |
|
Acquisition |
$ 6,000,000.00 |
|
Hard Construction Costs |
$31,709,727.00 |
|
Soft Costs & Financing Fees |
$ 3,593,094.00 |
|
Developer Fees |
$ 4,880,845.00 |
|
Reserves |
$ 1,406,180.00 |
|
Total |
$47,589,846.00 |
On May 9, 2018, City Council 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 HTC through TDHCA.
On June 12, 2019, City Council 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 HTC through TDHCA by Resolution No. 19-0884. 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.
The evaluation criteria for 9% HTC applications seeking a Resolution of Support also requires applications meet a priority housing need of the City. The applications must meet at least one of the following six priorities:
§ The project has been selected to receive City funding such as Community Development Block Grants, Home Investment Partnerships Program, or Generation Obligation Bond funding;
§ The applicant intends to partner with the Dallas Housing Finance Corporation or Public Facility Corporation;
§ The proposal involves the redevelopment of public housing owned by the Dallas Housing Authority under the Choice Neighborhoods, Rental Assistance Demonstration, HOPE IV, or other similar U.S. Department of Housing and Urban Department programs that may be created;
§ The project is located in a census tract with a poverty rate below 20%;
§ The project located in a Redevelopment Reinvestment Strategy Area (RSA) or Stabilization RSA; and
§ A 50-unit project dedicating 20% of the units for tenants referred from the Continuum of Care list.
Applications that do not qualify as a priority housing need must score at least 50 points based on if the proposed project is mixed income, includes a non-profit or historically underutilized business, its proximity of amenities to the development site, and resident services to be provided.
Cypress Creek at Forest Lane is qualified to receive a staff recommendation for a resolution of support as it is a priority housing need development, located in a census tract with a poverty rate less than 20% (Census Tract 48113007805 ) and met the required application thresholds. The proposed site has insufficient data to provide a Market Value Analysis market type, but is surrounded by B, D, E, and H market types.
PRIOR ACTION/REVIEW (COUNCIL, BOARDS, COMMISSIONS)
The Housing and Homelessness Solutions Committee will be briefed regarding this matter on February 22, 2021.
FISCAL INFORMATION
|
Fund |
FY 2021 |
FY 2022 |
Future Years |
|
General Fund |
$500.00 |
$0.00 |
$0.00 |