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Presentation, discussion, and possible action on Inducement Resolution No. 25-016 Multifamily Housing Revenue Bonds regarding authorization for filing an application for private activity bond authority for Waters at Waterchase (#24613)
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RECOMMENDED ACTION
recommendation
WHEREAS, Board approval of the inducement resolution is the first step in the application process for a multifamily bond issuance by the Department; and
WHEREAS, approval of the inducement will allow staff to submit an application to the Bond Review Board (BRB) for the issuance of a Certificate of Reservation associated with the Development;
NOW, therefore, it is hereby
RESOLVED, that based on the foregoing, Inducement Resolution No. 25-016, to proceed with the application submission to the BRB for possible receipt of State Volume Cap issuance authority under the Private Activity Bond Program for the pre-application listed herein, is hereby approved in the form presented to this meeting.
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BACKGROUND
General Information: The BRB administers the annual private activity bond authority for the State of Texas. The Department is an issuer of Private Activity Bonds and is required to induce an application for bonds prior to the submission to the BRB. Approval of the inducement resolution does not constitute approval of the development but merely allows the Applicant the opportunity to move into the full application phase of the process. Once the application receives a Certificate of Reservation, the Applicant has 180 days to close on the private activity bonds.
During the 180-day process, the Department will review the complete application for compliance with the Department’s Rules, including, but not limited to, site eligibility and threshold, as well as previous participation as it relates to developments previously funded through the Department. During the review of the full application, staff will also underwrite the transaction and determine financial feasibility in accordance with the Real Estate Analysis Rules. The Department will schedule and conduct a public hearing, and the complete application, including a transcript from the hearing, will then be presented to the Board for a decision on the issuance of bonds as well as a determination on the amount of housing tax credits anticipated to be allocated to the development.
This inducement resolution would reserve approximately $20,000,000 million in private activity bond volume cap. Staff notes that the Department’s set-aside for the 2025 program year is $213,559,922, and is oversubscribed in requests. The pre-application below will be added to the Department’s list of participating applications for 2025.
Waters at Waterchase
The acquisition and rehabilitation of 134 multifamily units to serve the general population is proposed for the project. The existing development, which was originally built in 1984, is located at 12365 Plano Road, Dallas, Dallas County. Waters at Waterchase was originally part of a Qualified 501(c)(3) Bond portfolio issued by the Department in 1993, which was redeemed in 2004 and the bonds are no longer outstanding. The applicant will elect the Priority 2 designation, which requires a minimum of 80% of the units to be rent- and income-restricted at 60% of the Area Median Family Income (AMFI). This designation allows up to 20% of the units to be leased at market rate. The Development will adhere to the requirements of the priority designation, as it preliminarily reflects that all of the units will be rent- and income-restricted at 60% of AMFI. The Department has not received any letters of support or opposition for the development.
The application was previously induced by the Board on October 10, 2024, with a requested bond amount of $15,450,000. Given the increase in construction costs since the original inducement due to an expanded scope of rehabilitation for the project, the applicant has requested additional volume cap to provide additional flexibility as it relates to the 50% test calculation. While the inducement amount provides a parameter, the actual application for volume cap, when filed, can be for a lesser amount.
Bond Inducement Amount: $20,000,000