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HomeMy WebLinkAbout2010/02/10-Minutes-Fort Worth Housing Finance Corporation (FWHFC)CITY OF FORT WORTH, TEXAS FORT WORTH HOUSING FINANCE CORPORATION CALLED — SPECIAL SESSION TUESDAY, FEBRUARY 2, 2010 Present: President Kathleen Hicks Vice President Danny Scarth Director Mike Moncrief (Arrived at 1:08 p.m.) Director Salvador Espino Director W. B. "Zim" Zimmerman Director Jungus Jordan Director Carter Burdette Director Joel Burns (Arrived at 1:09 p.m.) Absent: Secretary Frank Moss City staff: Tom Higgins, Assistant City Manager Vicki Ganske, Senior Assistant City Attorney Ron Gonzales, Assistant City Secretary Jay Chapa, Director of Housing & Economic Development Department Other staff: Marty Hendrix, City Secretary LeAnn Guzman, Assistant City Attorney Cynthia Garcia, Assistant Director, Housing & Economic Development Department Mark Folden, Housing Program Manager, Housing & Economic Development Department Guests: Brad Knolle, with NRP Holdings LLC Debra Guerrero, with NRP Holdings LLC Jay Johnson, with NRP Holdings LLC Call to Order (Agenda Item 1) With a quorum present, President Hicks called the meeting to order for the Board of Directors of the Fort Worth Housing Finance Corporation (Corporation) at 1:06 p.m. on Tuesdav, February ?, 2010, in the Pre- Council Chamber of the Fort Worth Municipal Building. 1000 Throckmorton, Fort Worth, Tcxas, with Directors Moncrief and Burns temporarily absent and with Secretary Moss absent. CITY OF FORT WORTH, TEXAS FORT WORTH HOUSING FINANCE CORPORATION CALLED — SPECIAL SESSION TUESDAY, FEBRUARY 2, 2010 PAGE 2 Approval of Minutes of the November 3, 2009 Meeting (Agenda Item 2) President Hicks opened the floor for a motion on the approval of the minutes of the Tuesday, November 3, 2009, meeting. MOTION: Upon a motion made by Director Zimmerman and seconded by Director Espino, the Board of Directors voted six (6) "ayes" and zero (0) "nays ", with Directors Moncrief and Burns temporarily absent and with Secretary Moss absent, to approve the Tuesday, November 3, 2009, minutes of the Corporation as presented. The motion carried. Written Reports: Fort Worth Housing Finance Corporation Financial Report through December 31, 2009 (Agenda Item 3 -A) President Hicks referenced the Financial Report through December 31, 2009, and opened the floor for discussion on the report. The written report was provided to the Board as a matter of information. There was no formal action taken on the report. Written Reports: Memo Regarding the Administration of the Fort Worth Housing Trust Fund (Agenda Item 3 -B) President Hicks referenced the report and opened the floor for discussion on this issue. The written report was provided to the Board as a matter of information. There was no formal action taken on the report. President Hicks recessed the called — special session into Executive Session at 1:07 p.m. in accordance with the requirements of the Texas Open Meetings Law. Executive Session items: (Agenda Item 4) President Hicks convened the Executive Session at 1:08 p.m. to discuss the following (Director Moncricfarri�cd at the mccting.) CITY OF FORT WORTH, TEXAS FORT WORTH HOUSING FINANCE CORPORATION CALLED — SPECIAL SESSION TUESDAY, FEBRUARY 2, 2010 PAGE 3 Executive Session (cont'd) (Agenda Item 4) A. Seek the advice of its attorneys concerning the following items that are exempt from public disclosure under Article X, Section 9, of the Texas State Bar Rules, as authorized by Section 551.071 of the Texas Government Code: (i) legal issues concerning any current agenda item; B. Discuss the purchase, sale, lease or value of real property, as authorized by Section 551.072 of the Texas Government Code. Deliberation in an open meeting would have a detrimental effect on the position of the Corporation in negotiations with a third party; and (Director Burns arrived at the meeting.) C. Discuss or deliberate negotiations relating to any economic development negotiations, as authorized by Section 551.087 of the Texas Government Code. President Hicks adjourned the Executive Session at 1:32 p.m. President Hicks reconvened from the Executive Session into the called — special session at 1:34 p.m. with Director Jordan temporarily absent. Adopt Resolution Approving an Agreement with NRP Holdings LLC, for the Terrell Heights Proiect (Agenda Item 5) Mr. Jay Chapa, Director, Housing and Economic Development Department, addressed the Corporation regarding the proposed resolution. He prefaced his presentation with a brief summary of the proposed project and explained that NRP was a multi- family developer and acknowledged NRP Holdings LLC representatives Brad Knolle, Debra Guerrero and Jay Johnson who were present at the meeting. He provided the following proposed project overview: • Corporation enters into an agreement with NRP to submit request for Affordable Housing Tax Credits to develop 54 single family rental homes in the Terrell Heights Neighborhood plus a Community Center. • Corporation creates a single asset entity to serve as General Partner of the development. • NRP secures financing, serves as development consultant, constructs and manages the property. • Home ownership offered to tenant after the tax credits are completed (15- years). CITY OF FORT WORTH, TEXAS FORT WORTH HOUSING FINANCE CORPORATION CALLED — SPECIAL SESSION TUESDAY, FEBRUARY 2, 2010 PAGE 4 Adopt Resolution Approving an Agreement with NRP Holdings LLC, for the Terrell Heights Proiect (cont'd) (Agenda Item 5) Mr. Chapa referred to the next slide that depicted an aerial map of the Terrell Heights Neighborhood. He explained that the properties in yellow were the 54 properties being considered and that a community center would anchor the development. He pointed out that the properties in red were properties built by K.T Land and City Homes and that the blue lots were lots being purchased by the Corporation for a single- family infill project. Mr. Chapa then presented a slide that portrayed examples of the proposed elevations of the homes to be built. He stated that the homes had to meet the historic overlay design guidelines and added that the homes would also have porches and detached garages. Mr. Chapa advised that NRP Holdings LLC was a national developer of multi - family homes and was one of the biggest affordable housing developers in the country. He pointed out that last year the City participated with HOME funds in one of the projects on the south end of town at Loop 820 and Oak Grove Road that was currently under construction (Woodmont Apartments) and then provided the following overview of the company: • A privately owned company created in 1995. • Over 275 years of collective development, construction and property management experience with communities throughout Texas, New Mexico, Arizona, Louisiana, North Carolina, Virginia, Ohio, Indiana and Michigan. • Offices in Texas, Arizona and Ohio with over 200 employees. • Extensive partnership experience with non - profits and public entities throughout the United States. • Built over 169 communities with $2.2 billion of financing and capital raised. • Developed and built over 3,000 units in Texas since opening the San Antonio office in 2004 Mr. Chapa's next slide presented information on the overview of the project. He stated that 54 units would be built in an approximate nine (9) month period, on -site services would be available to residents and a community building available to the neighborhood for community functions. He added that the project had the typical multi- family rental requirements relative to screening and background checks and that the idea of this project was to transition residents into home ownership. He further advised that residents would be required to maintain the landscaping but that NRP would provide all the equipment required. Specific information relative to the project overview is detailed below: CITY OF FORT WORTH, TEXAS FORT WORTH HOUSING FINANCE CORPORATION CALLED — SPECIAL SESSION TUESDAY, FEBRUARY 2, 2010 PAGE 5 Adopt Resolution Approving an Agreement with NRP Holdings LLC, for the Terrell Heights Proiect (cont'd) (Agenda Item 5) • 54 new 3 and 4 bedroom single - family homes that will be designed to complement Terrell Heights Historic District and meet design guidelines. • NRP will design, develop, construct and provide property management. • On -site property management and maintenance in the Community Center. • Community will provide Market Tailored Resident Services: • After School Program • Job Skill Access Training • Home Ownership Education • Credit Counseling • Referrals to other Social Services • Courtesy Officer Program • Rigorous screening process with strict zero tolerance policy. • Stringent Income Qualifications — Income must be 2.5x monthly rent. • Annual credit and criminal background checks • Residents will maintain their own yards and if problems arise, NRP Management will address the issues. Mr. Chapa then advised the Board of the following proposed terms for the project: • City provides HFC General Partnership Equity $900,000.00 of a loan of HOME funds as local participation in financing to secure tax credit allocation (20 year affordability). • Corporation serves as General Partner of a partnership with tax credit buyer to own property development. • Corporation enters into contracts with NRP for NRP to serve as Development Consultant, Master Sub - Contractor and Property Manager of the completed development. • Corporation receives 80 percent of Developer Fee, NRP receives 20 percent of Developer Fee and a Construction Management Fee. (Director Jordan returned to his place at the table.) Mr. Chapa explained information contained on the next two slides relating to resident profiles and purchase strategy. He stated that this was an affordable project and that people chgible to rent these units would be at the 60 percent of the area median income (AMl) or CITY OF FORT WORTH, TEXAS FORT WORTH HOUSING FINANCE CORPORATION CALLED — SPECIAL SESSION TUESDAY, FEBRUARY 2, 2010 PAGE 6 Adopt Resolution Approving an Agreement with NRP Holdings LLC, for the Terrell Heights Proiect (cont'd) (Agenda Item 5) less. He added that the homes would be about the same size as the homes currently in the neighborhood and there would be set - asides for very low incoming families down to 30 percent of AMI. He pointed out that at the end of 15 years, the resident in the home had the opportunity to buy the house for the debt left on the home. He stated that the majority of debt would be paid by tax credits that were sold and that at the end of 15 years there would be about $28,000.00 debt left on the home that staff believed would be worth approximately $150,000.00 to $175,000.00. Mr. Chapa added that the person who met the affordable requirements for living in the home would have an opportunity to buy the home for that debt. He pointed out that the person purchasing the home would probably like to refresh the interior of the home and a Disposition Cost of $20,000.00 would be added to the mortgage costs. This would provide the person with approximately $100,000.00 or more in equity, depending on the value of the home at that time. Mr. Chapa summarized the following project impact information: • Creates 150 immediate construction jobs. • Constructs all 54 homes in approximately nine (9) months. • Provides needed housing density quickly to a neighborhood with many vacant lots. • Supports the Corporation's current single - family infill project in the neighborhood. • Could become a model to be replicated in Central City neighborhoods with high numbers of vacant lots. Mr. Chapa concluded his presentation with the staff's recommendation as follows: (Director Jordan left his place at the table.) Staff recommends approval of the resolution to: • Enter into a Memorandum of Understanding with NRP Holdings LLC, • Allow staff to finalize negotiations of specific project details and contracts, • Allow the creation of a single purpose affiliate of the Corporation to own the project with the limited partner (purchaser of tax credits), • Apply for an allocation of low income tax credits, and • Expend up to $20,000.00 for legal and other professional services related to the project. .�Xdditional contracts will be subject to the Board's approval. CITY OF FORT WORTH, TEXAS FORT WORTH HOUSING FINANCE CORPORATION CALLED — SPECIAL SESSION TUESDAY, FEBRUARY 2, 2010 PAGE 7 Adopt Resolution Approving an Agreement with NRP Holdings LLC, for the Terrell Heights Proiect (cont'd) (Agenda Item 5) President Hicks opened the floor for discussion on this issue. Director Moncrief stated that this project made tremendous sense as it helped the City not only build but rebuild neighborhoods as those lots would just be left empty if no action was taken, which would affect everything around them. He added that even though this was a new approach than those previously used in the past, it was still a tool in the City's toolbox. (Director Jordan returned to his place at the table.) MOTION: Upon a motion made by Director Moncrief and seconded by Director Espino, the Board voted eight (8) "ayes" and zero (0) "nays ", with Secretary Moss absent, to approve Resolution No. FWHFC 2010 -01. President Hicks stated that she was very impressed by the work she had seen by NRP Holdings LLC in San Antonio and elsewhere and that their work had really stood the test of time as she saw projects that were 10 to 15 years old. She added that this project was very similar to the Hillside project near downtown and this sort of mixed income effort would really help with the concerns that some people had about gentrification. She added that the houses were very nice and looked a lot like the homes in the Sierra Vista neighborhood and that she was very happy with the Community Center in the location. She further stated that she thought that in a very short period of time the City could see this neighborhood transform in a very positive manner. She added that she looked forward to working with NRP Holdings LLC and hoped that this type of development could be used in other parts of the City. The motion carried. Adopt Resolution Authorizing the Sale of 3601 Hardy Street to the City of Fort Worth (Agenda Item 6) Mr. Jay Chapa, Director, Housing and Economic Development Department, addressed the Corporation regarding the proposed resolution. He provided a brief summary of the proposed project and stated this was a project that the Corporation had previously seen. He presented various slides which depicted aerial views of the property and explained that the project was located on the north side of the City in the Diamond Hill area and that the Board had previously approved the purchase of this property that was a old and dilapidated nursing home that needed to be demolished. He provided the ti)lluwing detailed int6rmation on the proposed housing development t6r this location: CITY OF FORT WORTH, TEXAS FORT WORTH HOUSING FINANCE CORPORATION CALLED — SPECIAL SESSION TUESDAY, FEBRUARY 2, 2010 PAGE 8 Adopt Resolution Authorizing the Sale of 3601 Hardy Street to the City of Fort Worth (cont'd) (Agenda Item 6) steps: • Corporation will close on purchase of former nursing home site and eliminate blight. • Sell property to the City of Fort Worth to demolish building and construct required infrastructure (CDBG funded). • City then purchases adjacent property. • City will sell improved lots to private developer or HFC for appraised value. • Private developer or Corporation builds houses. Mr. Chapa concluded his presentation by providing the following recommended next • Board approve resolution authorizing sale of 3601 Hardy Street to City for $75,000.00 • City Council approves M &Cs for purchase of property from Corporation and demolishes building. • Finalize negotiations for purchase of adjacent property and place under option agreement. • Initiate project. President Hicks opened the floor for discussion on this issue. Director Espino stated that the Diamond Hill community was very excited about this project and that it was an ideal location for the development as it was in the heart of the Diamond Hill neighborhood. He encouraged everyone to support the resolution to have this project move forward. There being no further discussion, President Hicks opened the floor for a motion. MOTION: Upon a motion made by Director Espino and seconded by Director Jordan, the Board voted eight (8) "ayes" and zero (0) "nays ", with Secretary Moss absent, to approve Resolution No. FWHFC 2010 -02. The motion carried. President Hicks stated that she appreciated the work of the Housing and Economic Development Department and added that Andrea McEwing had communicated with her often and asked her to mention that Southeast Fort Worth, Inc.. �cas also doing rehabilitation work in F- errell Hcights and stated that the City also appreciated the work ot'Southeast Fort Worth. Inc. CITY OF FORT WORTH, TEXAS FORT WORTH HOUSING FINANCE CORPORATION CALLED — SPECIAL SESSION TUESDAY, FEBRUARY 2, 2010 PAGE 9 Request for Future Agenda Items and /or Reports President Hicks opened the floor on requests for future agenda items. (Agenda Item 7) Director Espino requested that Mr. Chapa provide a report to the Corporation on the nine (9) percent low income tax credit relative to the agreement with NRP Holdings, LLC, and determine how it can be prioritized and leveraged to point to assist the Council and staff in their decision of which projects merited the strongest support. President Hicks also requested that the Infrastructure and Transportation Committee, chaired by Director Espino, utilize the criteria created relative to bus line access for that area. Adjourn (Agenda Item 8) With no further discussion, President Hicks adjourned the called — special session of the Fort Worth Housing Finance Corporation Board at 1:45 p.m. on Tuesday, February 2, 2010. These minutes approved by the Fort Worth Housing Finance Corporation Board of Directors on the _2" d _ day of March APPROVED: -)-� t[tp P �f � Kathleen Hicks President ATTEST: Frank Moss Secretary Pre ared and respectfully submitted by: onald P. Gonzales Assistant City Secretary