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Presentation, discussion, and possible action regarding a Material Amendment to the Housing Tax Credit Application and Land Use Restriction Agreement for Lakeview Pointe Senior Living (HTC #17435)
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RECOMMENDED ACTION
recommendation
WHEREAS, Lakeview Pointe Senior Living (the Development) received an award of 4% Housing Tax Credits (HTCs) in 2017 for the construction of 272 units of elderly housing in Rowlett, Dallas County;
WHEREAS, TX Lakeview Seniors, LP (the Development Owner or Owner) has applied for an allocation of tax-exempt volume cap under Priority 1b in 2025 and requests approval to change the rent and income restrictions for the Development by replacing 41 (15.07%) of the units at 60% of the Area Median Income (AMI) with 30% AMI units as a result of a supplemental bond allocation, which leaves 231 units at 60% AMI;
WHEREAS, a change to the income or rent restrictions is a material amendment to the Land Use Restriction Agreement (LURA) requiring approval from the Board under 10 TAC §10.405(b)(2)(B), and the Owner has complied with the amendment requirements in 10 TAC §10.405(b)(2);
WHEREAS, if the Board approves the requested amendment, the amount of tax credits currently forecasted by the Department (based on total costs and eligible basis not yet fully reviewed by a CPA) will be 93.91% ($1,393,913) greater than the HTC amount in the Determination Notice, which exceeds the 20% threshold for administrative approval by the Executive Director or designee and requires Board approval under 10 TAC §10.401(d); and
WHEREAS, the requested change does not negatively affect the Development, impact the viability of the transaction, or impact the selection of the application for an award;
NOW, therefore, it is hereby
RESOLVED, that the requested material amendment for Lakeview Pointe Senior Living is approved as presented at this meeting, and the Executive Director and his designees are each authorized, directed, and empowered to take all necessary action to effectuate the foregoing; and
FURTHER RESOLVED, that following staff’s review of the cost certification, if the amount of tax credits determined to be necessary as required by §42(m)(2)(D) exceeds 120% of the amount of tax credits reflected in the Determination Notice as forecasted at the time of this amendment, a credit amount not to exceed 200% of the amount in the Determination Notice is hereby approved under 10 TAC §10.401(d), and will require no further Board action but will require the Owner to pay the applicable fee under 10 TAC §11.901(8).
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BACKGROUND
Lakeview Pointe Senior Living Apartments was approved for a 4% HTC award in 2017 for the new construction of 272 units of elderly housing in Rowlett, Dallas County. The Development was originally underwritten and approved based on all 272 units restricted at 60% AMI. Construction of the Development was completed in late 2024.
In a letter dated January 8, 2025, James R. (Bill) Fisher, representative for the Owner, requested approval for a material amendment to the Application and Land Use Restriction Agreement (LURA). The request is to revise the set-asides of 15% of the units to those earning up to 30% AMI. The Owner is in the process of obtaining an additional bond allocation, which is now requiring 15% of the units to be targeted to those earning up to 30% AMI. The Owner states that the amendment is in the best interest of the state, the residents, and the Development. Due to a demand for lower income targeted units, this change will enhance overall occupancy and reduce turnover. The proposed amendment identifies 41 units (15.07%) at 30% AMI and 231 units at 60% AMI.
The Owner held a public hearing on March 10, 2025, at the clubhouse of the Development. No public comment was received regarding the requested amendment.
The Owner has also provided a letter from IBC Bank, the lender for the Development, and from 42 Equity Partners, LLC, the equity provider, acknowledging the change to the set-asides.
The Development was re-underwritten based on the proposed set-asides and revised financial information submitted. The results of the analysis indicate that the Development remains feasible, but total development cost increased approximately $22.8 million (56.83%). In addition, as a result of the passage of the Consolidated Appropriations Act of 2020, the Development is expected to be eligible for the fixed 4% tax credit percentage upon issuance of a supplemental bond allocation from the Texas Bond Review Board. With these changes, the current analysis supports a recommended annual HTC amount of $2,878,163, which is an increase of $1,393,913 (93.91%) from the original credit award of $1,484,250 in the Determination Notice. Provided the full amount of projected credits is justified following CPA review and staff’s acceptance of the cost certification package, the credits requested will exceed the 20% increase threshold requiring Board approval under 10 TAC §10.401(d).
Staff recommends approval of the requested material amendment. Staff further recommends that, following staff’s review and approval of the cost certification, if the amount of tax credits determined to be necessary as required by §42(m)(2)(D) exceeds 120% of the amount of tax credits reflected in the Determination Notice under 10 TAC §10.401(d) as forecasted at the time of this amendment, that the Board approve such request not to exceed 200% of the HTC amount in the Determination Notice as part of this amendment, subject to the payment of the applicable fee under 10 TAC §11.901(8).