STRATEGIC PRIORITY: Economic and Neighborhood Vitality
AGENDA DATE: December 8, 2021
COUNCIL DISTRICT(S): 8
DEPARTMENT: Department of Housing & Neighborhood Revitalization
EXECUTIVE: Dr. Eric A. Johnson
______________________________________________________________________
SUBJECT
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A public hearing to receive comments regarding an application by Estelle Community Partners, LP, or its affiliates (Applicant) to the Texas Department of Housing and Community Affairs (TDHCA) for 4% Non-Competitive Low Income Housing Tax Credits for the acquisition and renovation of the Estelle Village Apartment located at 5969 Highland Village Drive, Dallas, Texas 75241; and at the close of the public hearing adopt a Resolution of No Objection for Applicant, related to its application to TDHCA for the acquisition and renovation of the Estelle Village Apartments, an existing multifamily development (“Development”), and (1) in accordance with 10 TAC § 11.3(d) (the “Administrative Code”) and the Qualified Allocation Plan (“QAP”), specifically allow the construction of the Development, as required by the Administrative Code, because the Development is within one linear mile or less of Palladium Simpson Stuart (a recent 4% housing tax credit project located at 3380 Simpson Stuart Road), and is therefore subject to the One Mile Three Year Rule; and (2) pursuant to 10 TAC §11.101(a)(3) and the QAP, specifically acknowledge that the proposed Development is located in a census tract that has a poverty rate above 40% for individuals - Financing: No cost consideration to the City
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BACKGROUND
The Applicant, to be formed Texas limited partnership, submitted a Request for Resolution application to the City for a Resolution of No Objection for its application to TDHCA for 2021 4% Non-Competitive Housing Tax Credits (4% Housing Tax Credits). The 4% Housing Tax Credits will be used for the acquisition and renovation of the Estelle Village Apartments, an existing 291-unit affordable multifamily complex located at 5969 Highland Village Drive, Dallas, TX 75241 (Property). 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 residents to provide comment on the proposed development. Once a resolution is adopted and submitted to TDHCA, it cannot be changed or withdrawn.
The Appllicant will be a partnership that includes an affiliate of Community Preservation Partners and an affiliate of the Dallas Housing Authority (DHA). DHA is the current landowner and will remain the landowner in order to continue to receive a property tax exemption. A to be determined tax credit equity investor will be admitted as an investor partner once identified.
Community Preservation Partners (CPP), or its affiliate, will serve as the developer and guarantor of the project. CPP has successfully acquired, developed and renovate over 11,000 affordable multifamily units. The proposed property manager is WinnResidential, a professional management company that currently manages more than 100,000 multifamily units including over 50,000 affordable units.
The Applicant proposes to renovate all 291 units. The 291 units are comprised of 72 1-bedroom, 134 2-bedroom, 76 3-bedroom units, and 9 4-bedroom units. The renovation is
focused on the following: (1) life safety including security, (2) energy efficiency, (3) physical and functional obsolesce, (4) neighborhood stabilization, (5) accessibility. But for the investment of 4% non-competitive housing tax credits, this property would continue to deteriorate, add blight to the neighborhood, and provide substandard housing to the existing residents.
Planned unit renovations will include:
• Unit signage
• Accessibility UFAS upgrades
• New cabinets
• New solid surface countertops
• New entry doors, hardware and weather stripping
• New mechanical and storage doors
• New vinyl plank flooring
• New cove base
• Paint in the kitchens and bathrooms
• New appliances
• New vertical blinds
• New kitchen sinks, faucets, and supplies
• New bathroom faucets and supplies
• New angle stops
• New low flow toilets
• New low flow shower heads, valves and trim kits
• Refinish tubs and showers
• New air conditioning/heat packages as needed based on condition
• Duct cleaning and sealing
• Programmable thermostats
• New LED light fixtures throughout
• New energy smart bathroom fans
Planned property renovations will include:
• Security camera system upgrade, as needed
• Asphalt repairs (seal and restripe)
• Storage amenity space
• Site signage
• New paint scheme
• Repairs of insulated vinyl siding
• New mailboxes
• Americans with Disability Act path of travel
• Laundry room improvements (flooring, lighting, folding table)
• Landscaping and tree trimming per security plan
• Pedestrian gates
• Motorized gates
• Complete fencing
• Trash enclosures
• Waterproof and repair stair and landings
• New 20 year roof coating
• Gutter and downspout repairs
• Sandblast exterior of buildings
• New water heaters
• Hydro jet sewer lines
• New breezeway LED ceiling lights with cage and photocell
• Property wide WIFI
• Playground and amenity upgrades, seating areas and BBQs
• New roof mounted LED wall packs with photocells
The Applicant proposes to provide on-site resident services including:
1. 12 hours per week of after school tutoring;
2. 4 hours per week of adult financial literacy courses;
3. Career training and placements partnerships;
4. Food pantry;
5. Annual health fair and flu shots;
6. Notary services;
7. Arts and crafts programming twice a month;
8. Organized social gatherings twice a month;
9. Partnership with local law enforcement for quarterly activities;
10. Weekly chore and preventative maintenance for elderly and disabled residents;
11. Education/tuition savings match/scholarship program for residents; and
12. Property-wide wireless internet.
CPP will also work with the Office of Innovative Public Safety Solutions for security input, community activities and the Crime Prevention Through Environmental Design (CPTED).
Total development costs are anticipated to be approximately $73,453,904.00 which includes the acquisition price for the property. The hard construction budget is anticipated to be approximately $16,085,491.00 which is $55,277.00 per unit.
|
Proposed Financing Sources |
Amount |
|
Private Activity Bonds |
$38,552,720.00 |
|
Housing Tax Credits Equity |
$26,991,867.00 |
|
Income Through Completion |
$3,846,299.00 |
|
Deferred Developer Fee |
$4,063,018.00 |
|
Total |
$73,453,904.00 |
|
Proposed Uses |
Costs |
|
Acquisition |
$38,000,000.00 |
|
Total Const. Costs |
$16,085,491.00 |
|
Financing, Reserves, Soft Costs |
$8,648,468.00 |
|
Interim Interest |
$1,710,000.00 |
|
Developer Fee |
$9,009,945.00 |
|
Total |
$73,453,904.00 |
After the development is complete, all 291 units will be made available to households earning 0%-50% of Area Median Income (AMI) based on an existing Land Use Restrictive Agreement. The Property currently has a Project-Based Section 8 Housing Assistance Payments (HAP) Contract and the Applicant intends to extend the HAP Contract for a period of 20 years to continue to provide housing options to the extremely low-income tenants that current reside at the Property. This will ensure that no residents will be displaced.
The Development is within one mile of the Palladium Simpson Stuart, a recently awarded 4% housing tax credit project located at 3380 Simpson Stuart Road. Per the requirements of TDHCA’s Qualified Action Plan and 10 TAC § 11.3(d), City Council must vote to specifically approved the construction of a new tax credit development within one linear mile of a tax credit development authorized within the past three years. The agenda item includes language acknowledging this proximity.
The Development is located within a census tract with a poverty rate over 40%. Per the requirements of TDHCA’s Qualified Action Plan and 10 TAC §11.101(a)(3), City Council must specifically approve the construction of a new tax credit development in such a census tract. The agenda item includes language acknowledging this proximity.
The Development has been found to affirmatively further fair housing by the Office of Fair Housing. While the property has seen some recent improvements, a substantial renovation is still needed to provide the existing residents with the safe, decent and affordable housing they deserve. The introduction of additional safety measures and a robust menu of resident services will ensure that the residents have access to additional onsite opportunities they currently do not receive.
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, 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 Housing Tax Credits 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.
For developments involving rehabilitation of existing housing, the proposed scope of work must be informed by a capital needs assessment (“CNA”), prepared by a qualified third-party professional that is independent from the development’s architect or engineer, builder/general contractor, or other member of the development team. The City will review the CNA and conduct a site visit. The CNA must demonstrate to the City’s satisfaction that the initial scope of work is sufficient to address all City code violations (whether formally cited or not). Further, the scope of work, combined with planned replacement reserve funding, must be determined sufficient to address all projected repairs or replacements of the following items through the entire term of the development’s affordability period:
• All major systems including roof, foundation, electrical, HVAC, and plumbing;
• Interior and exterior windows and doors;
• The interiors of all units including the kitchen and bathroom and all major appliances;
• The exterior of the development, including balconies, walkways, railings, and stairs;
• Communal facilities such as community rooms, fitness centers, business centers, etc.;
• Security features including gates and security cameras; and
• Accessibility
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. After review, the Applicant has satisfied all application requirements and staff recommend a resolution of no objection.
PRIOR ACTION/REVIEW (COUNCIL, BOARDS, COMMISSIONS)
The Housing and Homelessness Solutions Committee was briefed regarding this matter on November 9, 2021.
FISCAL INFORMATION
No cost consideration to the City.
MAP
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