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Presentation, discussion, and possible action on a request for an extension of the previously approved deadline to Place in Service for Maple Park Manor
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RECOMMENDED ACTION
recommendation
WHEREAS, the above listed development was awarded 9% housing tax credits during the 2023 competitive Application round;
WHEREAS, the Governing Board approved a request for the return and reallocation of those credits in 2024, and imposed a deadline to place in service of August 31, 2026, which is shorter than would have been allowed federally;
WHEREAS, the Department received a request from the Development Owner to extend the placement in service deadline to December 31, 2026, which can be accomplished within returning and reallocating the credits; and
WHEREAS, the Development Owner has presented evidence that this request is appropriate.
NOW, therefore, it is hereby
RESOLVED, the deadline to place in service for Maple Park Manor is extended to December 31, 2026.
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BACKGROUND
|
Development |
Maple Park Manor |
|
Target Population |
Elderly |
|
HTC Award |
$900,000 |
|
City |
Lockhart |
|
Total Units |
30 |
|
HTC Units |
30 |
|
Initial Year of Award |
2023 |
|
Extension Requested |
Four additional months (an extension to August 31, 2026, was previously granted) |
Maple Park Manor is a 30-unit development located in Lockhart, Caldwell County. The Development received 9% housing tax credits in 2023, and in 2024 the Board approved a request to reallocate the credits, effectively creating an eight-month extension to place in service. As a result, the current deadline to place in service is August 31, 2026.
The project is currently on track to be completed on time; however, because there is no scheduled meeting of the Governing Board in August, the Developer has proactively requested this extension to account of any unexpected delays. Because the project is scheduled to complete within days of the existing deadline, staff finds this request reasonable and recommends approval.
APPLICABLE RULE
Under 10 TAC §11.6(5), a Development Owner may return credits and receive a reallocation outside the standard allocation process if the return is the result of a qualifying force majeure event occurring prior to issuance of IRS Form(s) 8609. Pursuant to 10 TAC §11.6(5), the Department’s Governing Board may approve execution of a Carryover Allocation Agreement for the current program year with the Development Owner that returned the credits, but only if the following conditions are met:
(A) The credits were returned as a result of "Force Majeure" events that occurred before issuance of Forms 8609. Force Majeure events are the following sudden and unforeseen circumstances outside the control of the Development Owner: acts of God such as fire, tornado, flooding, significant and unusual rainfall or subfreezing temperatures, or loss of access to necessary water or utilities as a direct result of significant weather events; explosion; vandalism; orders or acts of military authority; unrelated party litigation; changes in law, rules, or regulations; national emergency or insurrection; riot; acts of terrorism; supplier failures; or materials or labor shortages. If a Force Majeure event is also a presidentially declared disaster, the Department may treat the matter under the applicable federal provisions. Force Majeure events must make construction activity impossible or materially impede its progress.
The Applicant previously met this standard to the Board’s satisfaction when a request under this provision of the rule was approved in September 2024. Because the current request only asks to extend the previously approved extension to the fully allowable federal deadline of December 31, 2026, the Developer is not strictly required by rule to qualify under one of these standards.
IMPACT OF BOARD DECISION
If the Board approves the request:
• The new deadline to place in service will be December 31, 2026.
If the Board denies the request:
• The current placed-in-service deadline of August 31, 2026, remains in place.
• The Development Owner may either meet the existing deadline, return the credits, or have the award terminated for failing to meet the deadline.
• Returned credits will first be reallocated within the original subregion in accordance with 10 TAC §11.6(2). If no pending applications are eligible within the subregion, the credits will be added to the statewide collapse for reallocation.
This request has no impact on any funding source other than the Low Income Housing Tax Credit program.
RECOMMENDATION
Staff recommends approval of the request to extend the deadline to place in service.