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HomeMy WebLinkAbout2010/03/02-Minutes-Fort Worth Housing Finance Corporation (FWHFC)CITY OF FORT WORTH, TEXAS FORT WORTH HOUSING FINANCE CORPORATION CALLED — SPECIAL SESSION TUESDAY, MARCH 2, 2010 Present: President Kathleen Hicks Vice President Danny Scarth Secretary Frank Moss (Arrived at 1:01 p.m.) Director Mike Moncrief Director Salvador Espino Director W. B. "Zim" Zimmerman Director Jungus Jordan Director Carter Burdette Director Joel Burns (Arrived at 1:16 p.m.) City staff- Tom Higgins, Assistant City Manager Vicki Ganske, Senior Assistant City Attorney Ron Gonzales, Assistant City Secretary Jay Chapa, Assistant General Manager Cynthia Garcia, Assistant Director, Housing & Economic Development Department Jean Petr, Gas Lease Program Manager, Planning & Development Department Other staff. Marty Hendrix, City Secretary LeAnn Guzman, Assistant City Attorney Mark Folden, Housing Program Manager, Housing & Economic Development Department 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 1:00 p.m. on Tuesday, March 2, 2010, in the Pre - Council Chamber of the Fort Worth Municipal Building, 1000 Throckmorton, Fort Worth, Texas, with Directors Moss and Burns temporarily absent. Approval of Minutes of the February 2, 2010 Meeting (Agenda Item 2) President Hicks opened the floor for a motion on the approval of the minutes of the Tuesday, February 2, 2010, meeting. CITY OF FORT WORTH, TEXAS FORT WORTH HOUSING FINANCE CORPORATION CALLED — SPECIAL SESSION TUESDAY, MARCH 2, 2010 PAGE 2 Approval of Minutes of the February 2, 2010 Meeting (cont'd) (Agenda Item 2) MOTION: Upon a motion made by Director Jordan and seconded by Director Espino, the Board of Directors voted seven (7) "ayes" and zero (0) "nays ", with Directors Moss and Burns temporarily absent, to approve the Tuesday, February 2, 2009, minutes of the Corporation as presented. The motion carried. Written Reports: Fort Worth Housing Finance Corporation Financial Report through January 31, 2010 (Agenda Item 3 -A) President Hicks referenced the Financial Report through January 31, 2010, and opened the floor for discussion on the report. The written report was provided to the Corporation as a matter of information. There was no formal action taken on the report. Written Reports: Hardy Street Infill Housing Proiect (Agenda Item 3 -13) President Hicks referenced the report and opened the floor for discussion on this issue. (Director Moss arrived at the meeting.) The written report was provided to the Corporation 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 1:01 p.m. in accordance with the requirements of the Texas Open Meetings Law. Executive Session (Agenda Item 4) President Hicks convened the Executive Session at 1:02 p.m. to discuss the following items: 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: (1) legal issues concerning any current agenda item, CITY OF FORT WORTH, TEXAS FORT WORTH HOUSING FINANCE CORPORATION CALLED — SPECIAL SESSION TUESDAY, MARCH 2, 2010 PAGE 3 Executive Session (cont'd) (Agenda Item 4) 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 1:23 p.m. President Hicks reconvened from the Executive Session into the called — special session at 1:24 p.m., with Director Zimmerman temporarily absent. Adopt Resolution Approving a Gas Lease with Chesapeake Exploration, LLC for 2511 Mitchell Boulevard (Agenda Item 5) Director Jordan recused himself from discussion and voting on this item and left the Pre - Council Chamber. Ms. Jean Petr, Gas Lease Program Manager, Planning and Development Department, addressed the Corporation regarding the proposed resolution. She prefaced her presentation with a brief summary of the proposed project and advised that the proposed project was in Council District 5. She displayed an aerial map and stated that the red circle depicted the general location that was along Mitchell Boulevard right before Martin Luther King Freeway a.k.a. US Highway 287. She then displayed another aerial map with a closer view of the site which illustrated that the site was within the Maddox Unit. She provided the following proposed project overview: • Approximately 2.65 mineral acres. • Chesapeake included property in the Maddox Unit. • Lease Offer. o $3,000.00 per acre bonus. 0 25 percent royalty. o Three (3) year term. Ms. Petr presented intOnnation on the negotiated tenns rctlected below: CITY OF FORT WORTH, TEXAS FORT WORTH HOUSING FINANCE CORPORATION CALLED — SPECIAL SESSION TUESDAY, MARCH 2, 2010 PAGE 4 Adopt Resolution Approving a Gas Lease with Chesapeake Exploration, LLC for 2511 Mitchell Boulevard (cont'd) (Agenda Item 5) • $3,000.00 per acre bonus. o $7,950.00 total bonus. • 25 percent royalty. • Two (2) year term. • Standard lease form. • No surface use. Ms. Petr noted that in discussions with Chesapeake they were willing to come down to a two (2) year term which was the standard for the Corporation. Ms. Petr concluded her presentation and advised that staff's recommendation was that the Corporation proceed with leasing the property at the negotiated terms. Secretary Moss inquired if the location was south of US Highway 287 and Ms. Petr responded that it was north of the highway. (Director Zimmerman assumed his place at the table.) President Hicks opened the floor for discussion on this issue. MOTION: Upon a motion made by Director Espino and seconded by Director Burdette, the Board voted eight (8) "ayes" and zero (0) "nays ", and with one abstention by Director Jordan, to approve Resolution No. FWHFC 2010 -03. The motion carried. (Director Jordan returned to his place at the table.) Adopt Resolution Authorizing the Acquisition of the Granbury Hills Apartments Located at 5250 Wonder Drive from Blue Valley Apartments, Inc. (Agenda Item 6) Mr. Jay Chapa, Assistant General Manager, addressed the Corporation regarding the proposed resolution. He provided a brief summary of the proposed project by displaying an aerial map of the location and stated that the property was just east of Granbury Road and south of Interstate Highway 20. He the displayed an aerial view of the location that reflected the CITY OF FORT WORTH, TEXAS FORT WORTH HOUSING FINANCE CORPORATION CALLED - SPECIAL SESSION TUESDAY, MARCH 2, 2010 PAGE 5 Adopt Resolution Authorizing the Acquisition of the Granbury Hills Apartments Located at 5250 Wonder Drive from Blue Valley Apartments, Inc. (cont'd) (Agenda Item 6) property was on two parcels, the old Wedgewood Bowling Alley and the Granbury Shopping Complex. Mr. Chapa displayed a slide of updated pictures of the property and advised that the property was in foreclosure. He also noted there had been a lot of issues with the property and it would be reviewed by the Building Standards Commission this month. He provided the following detailed information on City Code violations at the property: • Code has issued 17 citations since 2008 for: • No hot water. • No air conditioning. • Water damage. • Rotted wood. • Damaged balconies. • Exposed electrical wiring. • Failure to obtain a certificate of occupancy. • Due to water leaks, multiple apartment units have mold coverage from floor to ceiling. Mr. Chapa also displayed a slide with the following information that reflected crime issues that occurred at the property in 2008 and 2009: 34 Crimes in 2008: Robbery of Person - 2 Burglary - 8 Auto Theft - 2 Criminal Mischief - I I Aggravated Assault - 2 Theft - 1 Narcotics Violations - 1 Public Intoxication - 1 Child Abandonment, Endangerment or Neglect - 4 Other - 2 40 Crimes in 2009: Kidnapping -1 Burglary - 12 Counterfeiting (Fraud) - 1 Criminal Mischief - 9 Aggravated Assault - 2 Burglary Vehicle - 3 Theft - 1 Impersonation (Fraud) - 2 Narcotics Violation - 2 Disorderly Conduct - 1 Public Intoxication - 1 Runaway - 3 Criminal Trespass - I Other - 1 CITY OF FORT WORTH, TEXAS FORT WORTH HOUSING FINANCE CORPORATION CALLED — SPECIAL SESSION TUESDAY, MARCH 2, 2010 PAGE 6 Adopt Resolution Authorizing the Acquisition of the Granbury Hills Apartments Located at 5250 Wonder Drive from Blue Valley Apartments, Inc. (cont'd) (Agenda Item 6) Mr. Chapa advised the Corporation on the status of the property as reflected below: • Property was foreclosed in December by Fannie Mae and turned over to a management company for disposition. • Currently owner of the property intends to sell it at auction. • Open house on the property was conducted two (2) weeks ago. • The highest bidder would likely perform minimal repairs to meet code requirements and continue leasing units. Mr. Chapa's next slide provided an aerial view of the targeted redevelopment area and he advised that staff was proposing purchasing the project and demolishing the structures as it was in a key redevelopment area for the City and Corporation. He added that it was located at a future rail stop on the southwest and northeast rail and pointed out that The "T" had actually started procedures to obtain the property by eminent domain and create a parking area for the future rail station. He further stated that Chesapeake had purchased the entire complex for a future drilling site and advised that staff had discussed with Chesapeake representatives the possibility of the area being used as a transit oriented development once Chesapeake's use of the area was completed. Mr. Chapa advised the Corporation that there were 114 units at the property with 123 tenants remaining who would need to move to other apartments in the area. He outlined the following terms of purchase for the property: • Purchase of $650,000.00 (includes $50,000.00 in relocation incentives). • The Corporation has the right to terminate the contract until March 10, 2010. • Corporation will purchase the apartment complex vacant. • Seller may extend the closing date if more time is needed to vacate the current tenants. • The acquisition must be either terminated or closed by December 31, 2010. Mr. Chapa completed his presentation with the following recommendation of staff: • Approve the acquisition of Granbury Hills Apartments for $650,000.00. • Allocate funds for demolition of the property. 250,000.00 for demolition costs. CITY OF FORT WORTH, TEXAS FORT WORTH HOUSING FINANCE CORPORATION CALLED — SPECIAL SESSION TUESDAY, MARCH 2, 2010 PAGE 7 Adopt Resolution Authorizing the Acquisition of the Granbury Hills Apartments Located at 5250 Wonder Drive from Blue Valley Apartments, Inc. (cont'd) (Agenda Item 6) • Estimated $500,000.00 (maximum) for asbestos abatement to be provided from Environmental Protection Fee fund. • Total cost to the Corporation: $900,000.00. • Corporation has $1.7 Million available in unrestricted funds. • Redevelop property into a mixed income multi- family development complementing Transit Oriented Development associated by Rail Stop on Granbury Road. President Hicks opened the floor for discussion on this issue. Director Jordan stated that this was significant for the people in south Fort Worth and would eliminate blight in the area. He added that it held great vision in store for the area. President Hicks concurred with Director Jordan and added that this project would also serve as a model for all of Fort Worth. There being no further discussion, President Hicks opened the floor for a motion. MOTION: Upon a motion made by Director Jordan and seconded by Director Moncrief, the Board voted nine (9) "ayes" and zero (0) "nays ", to approve Resolution No. FWHFC 2010 -04 with appreciation to staff. The motion carried. Adopt Resolution to Accept $696,907.00 in HOME Funds and $500,000.00 in CDBG Funds from the City of Fort Worth to Administer the Fort Worth Housing Trust Fund (Agenda Item 7) Ms. Cynthia Garcia, Assistant Director, Housing and Economic Development Department, addressed the Corporation regarding the proposed resolution. She advised the Corporation on June 23, 2009, the City of Fort Worth proposed the transfer of $696,907.00 in HOME funds and $500,000.00 in CDBG funds to the Fort Worth Housing Finance Corporation to administer the Fort Worth Housing Trust Fund. She noted that the trust fund was a loan program for low income individuals to perform rehabilitation projects to their homes. She added that staff was asking that the Corporation accept these funds to continue the program. CITY OF FORT WORTH, TEXAS FORT WORTH HOUSING FINANCE CORPORATION CALLED — SPECIAL SESSION TUESDAY, MARCH 2, 2010 PAGE 8 Adopt Resolution to Accept $696,907.00 in HOME Funds and $500,000.00 in CDBG Funds from the City of Fort Worth to Administer the Fort Worth Housing Trust Fund (cont'd) (Agenda Item 7) President Hicks opened the floor for discussion on this issue. There being no discussion, President Hicks opened the floor for a motion. MOTION: Upon a motion made by Director Moncrief and seconded by Director Espino, the Board voted nine (9) "ayes" and zero (0) "nays ", to approve Resolution No. FWHFC 2010 -05. The motion carried. Adopt Resolution Approving an Agreement with NRP Holdings, LLC., for the Race Street Apartments (Agenda Item 8) Mr. Jay Chapa, Assistant General Manager, addressed the Corporation regarding the proposed resolution. He provided a brief overview of the project as follows: • Staff of the Housing Finance Corporation entered into a letter agreement with NRP to submit a request for Affordable Housing Tax Credits to develop a 36 -unit multi - family development on Race Street (Race Street Lofts). • The Corporation is being asked to ratify the agreement (application will be rescinded if not approved). • Corporation to serve as General Partner and developer. • NRP Group • Secures financing, • Secures guarantor of project, • Constructs the project, and • Manages the property. Mr. Chapa then displayed two (2) slides that reflected aerial views of the property and two (2) slides reflecting the facade of the apartments near the Six Points intersection in the City's Six Points Urban Village. He advised that the property was actually comprised of an old hotel and a couple of single family units that were under option by NRP. Mr. Chapa drew Corporation members' attention to his next two slides that depicted the proposed site plan and proposed elevations for the project. He stated that the there would be 36 multi- family units �k lth I. 2 and 3 bedroom and that the elevation would be urban in nature since it was in a mixed use development area which would contorm to the urban architecture. CITY OF FORT WORTH, TEXAS FORT WORTH HOUSING FINANCE CORPORATION CALLED — SPECIAL SESSION TUESDAY, MARCH 2, 2010 PAGE 9 Adopt Resolution Approving an Agreement with NRP Holdings, LLC., for the Race Street Apartments (cont'd) (Agenda Item 8) Mr. Chapa presented a brief overview of NRP Holdings, LLC, as reflected below: • 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 — over 3,000 units in Texas. • Currently under construction of Woodmont Apartments located at Loop 820 and Oak Grove Road (partnership with Fort Worth Housing Authority). Mr. Chapa the provided an overview of the Race Street Lofts as follows: • Demolition of existing abandoned apartment complex at 2817 Race Street. • 36 new 1, 2 and 3 bedroom multi - family units that will be designed to sensitively complement the urban fabric and architectural context of the area. • Quality Control — Design, Development, Construction and Property Management under the same company. • On -site property management and maintenance in the Community Center. • Rigorous Screening Process with Strict Zero Tolerance Policy. • Stringent Income Qualifications — Income must be 2.5x monthly rent. • Annual Credit and Criminal Background Checks. Mr. Chapa summarized the detailed information contained in the next slide relative to proposed unit mix and rent levels. He stated that there would be ten (10) three (3) bedroom, 14 two (2) bedroom, and 12 one (1) bedroom apartments with the size and rent limit as specified and that the units would be at the 30, 50 and 60 percent Area Median Income, respectively. Mr. Chapa advised the Corporation of the following proposed terms: • City provides Corporation (General Partnership Entity) 5862.000.00 in HOME funds lean as local participation of financing to secure tax credit allocation (20 year affordability. CITY OF FORT WORTH, TEXAS FORT WORTH HOUSING FINANCE CORPORATION CALLED — SPECIAL SESSION TUESDAY, MARCH 2, 2010 PAGE 10 Adopt Resolution Approving an Agreement with NRP Holdings, LLC., for the Race Street Apartments (cont'd) (Agenda Item 8) • Corporation serves as General Partner of a partnership with special limited partner (guarantor) and Equity Investor (tax- credit buyer) to own property development. • Corporation enters into contracts with NRP for it to serve as Development Consultant, Master Sub - Contractor and Property Manager of the completed development. • Corporation receives 20 percent of Developer Fee, Special Limited Partner receives 70 percent of Developer Fee and NRP receives 10 percent of Developer Fee and a Construction Management Fee. • Net Cash flow will be split 50 percent to Corporation and 50 percent to Special Limited Partner. Mr. Chapa provided the below information regarding the impact of the project: • Creates 150 immediate construction jobs. • Eliminates current boarded up structure. • Provides needed density along Race Street which is within the Six Points Urban Village. • Supports development of new quality, affordable, accessible housing close to downtown. Mr. Chapa concluded his presentation with the following recommendation by staff: • Staff recommends approval of the resolution to: • Ratify the Letter Agreement between Corporation and NRP Holdings, LLC, • Allow staff to finalize negotiations of specific project details and contracts to replace Letter Agreement, and • Allow the creation of a single purpose affiliate of the Corporation to own the Project with the special limited partner. • Apply for an allocation of low income housing tax credits. • Expend up to $20,000.00 for legal and other professional services related to the project. President Hicks opened the floor tOr discussion on this issue. CITY OF FORT WORTH, TEXAS FORT WORTH HOUSING FINANCE CORPORATION CALLED — SPECIAL SESSION TUESDAY, MARCH 2, 2010 PAGE 11 Adopt Resolution Approving an Agreement with NRP Holdings, LLC., for the Race Street Apartments (cont'd) (Agenda Item 8) Director Espino expressed appreciation to staff for coming up with an innovative way to get this project done. He added that the Six Points Urban Village was critical to the development of the area in Riverside and that this was a good way to take a dilapidated structure into something that was consistent with the urban village program. Director Espino added that he wanted the City to look for opportunities to work with the Fort Worth Housing Authority (FWHA) on quality, affordable, accessible projects as the FWHA was ideally suited to work with the City on this issue. He further stated that he knew that the FWHA had applied for tax credits in Austin with the Department of Housing and Community Affairs and reiterated that he hoped the City continued to partner with FWHA in other ways to encourage them to do projects of this caliber. Director Moncrief asked if it would be appropriate to request the FWHA to meet with the City on at least a bi- annual basis and provide a report on their initiatives and challenges, especially with the legislature coming up next year. Mr. Chapa requested clarification on the type of presentation the Corporation desired from the FWHA, whether the format would be similar to the presentation given today or to have the two entities respective boards meet. Director Moncrief responded that meetings in both formats would be preferable. President Hicks added that it would be helpful to know what part of town the FWHA was working in to ensure that both the City and the FWHA were working as one cohesive unit. 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 Burns, the Board voted nine (9) "ayes" and zero (0) "nays ", to approve Resolution No. FWHFC 2010 -06. The motion carried. Request for Future Agenda Items and/or Reports (Agenda Item 9 President Hicks opened the floor on requests for future agenda items. CITY OF FORT WORTH, TEXAS FORT WORTH HOUSING FINANCE CORPORATION CALLED — SPECIAL SESSION TUESDAY, MARCH 2, 2010 PAGE 12 Request for Future Agenda Items and /or Reports (cont'd) (Agenda Item 9 President Hicks referred to the Financial Report through January 31, 2010, and requested the staff provide a report at the next meeting that reflected the remaining balance resulting from the $900,000.00 purchase of the Granbury Hills Apartments. Mr. Chapa advised that that if the full $900,000.00 were expended, there would be approximately $800,000.00 remaining; however, once the dollars were expended staff would have a more accurate figure and that information would be provided to the Corporation. Adiourn (Agenda Item 10) With no further discussion, President Hicks adjourned the called — special session of the Fort Worth Housing Finance Corporation Board at 1:38 p.m. on Tuesday, March 2, 2010. These minutes approved by the Fort Worth Housing Finance Corporation Board of Directors on the _6th _ day of APril_, 2010. APPROVED: Kathleen Hicks President ATTEST: Frank Moss Secretary Prepared and respectfully submitted by: Ronald P. Gonzales, TRMC /CMC Assistant City Secretary