title
Presentation, discussion, and possible action regarding a material amendment to the Housing Tax Credit Application, a waiver of 10 TAC §11.101(b)(4)(D) and (N), and changes to the ownership structure for Historic Lofts of Waco High (HTC #07192/25066)
end
RECOMMENDED ACTION
recommendation
WHEREAS, Historic Lofts of Waco High (Development) received 9% Housing Tax Credit (HTC) awards in 2007 and 2025 for the acquisition and rehabilitation of 104 units of multifamily housing for the general population in Waco, McLennan County;
WHEREAS, Historic Waco Lofts Rehab, LLC (Applicant) requests a waiver for 10 TAC §11.101(b)(4)(D) and (N), which are the requirements for screens on all operable windows and the requirement for Energy Star or equivalently rated windows as Mandatory Development Amenities for the three historic buildings in the Development;
WHEREAS, the waiver request is because the Development also received Historic Tax Credits through the Texas Historic Preservation Tax Credit program and the Federal Rehabilitation Tax Credit program, which required the Texas Historical Commission to approve the replacement windows installed in the buildings, and this entity determined that the original building would not have had window screens and that the best acceptable windows that are the closest match to the original windows have a clear glazing which does not meet Energy Star rating requirements;
WHEREAS, 10 TAC §11.101(b)(4) states that the Board may waive one or more of the requirements of the paragraph for Developments that include Historic Tax Credits, with evidence that the amenity has not been approved by the Texas Historical Commission or the National Park Service, as applicable;
WHEREAS, the Applicant provided a letter dated May 27, 2026, from the Texas Historical Commission citing that this entity does not approve window screens nor Energy Star windows for this historic campus and supports the waiver request;
WHEREAS, to improve the financial feasibility of the Development by obtaining a 50% property tax exemption, the Applicant is seeking approval to introduce Casa Tierra SA-1, Inc., a Texas nonprofit corporation, as managing member of the Applicant, Historic Waco Lofts Rehab, LLC, and to add a new special member that has as members LOK Texas, LLC, a Historically Underutilized Business (HUB), Fitch Irick Affordable, LLC, and Evans McNeill Investments, LLC;
WHEREAS, the HTC Application for the Development received two points for agreeing to include a Historically Underutilized Business (HUB), LOK Texas, LLC, in the ownership structure of the managing member and materially participating in the development and operation of the Development throughout the Compliance Period, and receiving a combination of ownership interest in the original managing member of the Applicant, cash flow from operations, and developer fee which taken together equal at least 50% and no less than 5% for any category;
WHEREAS, the Applicant requests that the Application be deemed to meet the requirements of 10 TAC §11.9(b)(2) for two points by including a Nonprofit Organization in the structure of the new managing member, which will also result in the Applicant providing a minimum of three additional points related to Resident Supportive Services under 10 TAC §11.101(7), in lieu of having the HUB in the structure of the managing member;
WHEREAS, as a result of an incorrect Rent Schedule submitted during the Application review process, the Applicant also requests approval for a correction to the unit mix, which results in one fewer two-bedroom unit and one additional three-bedroom unit; and
WHEREAS, the requested waiver and approvals do not negatively affect the Development, impact the viability of the transaction, impact Tex. Gov't Code §§2306.001, 2306.002, 2306.359, and 2306.6701, or affect the amount of the tax credits awarded;
NOW, therefore, it is hereby
RESOLVED, that the requested waiver under 10 TAC §11.101(b)(4) for the screens on all operable windows and Energy Star or equivalently rated windows, changes to the ownership structure, and amendment for the correction to the unit mix for Historic Lofts of Waco High are each approved as presented at this meeting, and the Executive Director and his designees are each hereby authorized, directed, and empowered to take all necessary action to effectuate the foregoing.
end
BACKGROUND
Historic Lofts of Waco High (HTC #07192/25066) received 9% HTC awards in 2007 and 2025 for the acquisition and rehabilitation of 104 units of multifamily housing, of which all 104 units are low-income units, for the general population in Waco, McLennan County. In a letter dated August 3, 2026, Robbye G. Meyer, representative of the Applicant, requested approval for a material amendment to the Housing Tax Credit Application for a correction to the unit mix identified in the 2025 HTC Application for the Development, a waiver of 10 TAC §11.101(b)(4)(D) and (N), changes to the ownership structure, and amendment of the LURA for the 2007 HTC award.
The proposed changes to the Application include: 1) a waiver for 10 TAC §11.101(b)(4)(D) and (N), which are the requirements for screens on all operable windows and the requirement for Energy-Star or equivalently rated windows as Mandatory Development Amenities, for the historic Development; 2) introduction of Casa Tierra SA-1, Inc., a Texas nonprofit corporation, as managing member of the Applicant, Historic Waco Lofts Rehab, LLC, and addition of a new special member, Historic Waco Lofts Rehab MM, LLC, that has as members LOK Texas, LLC, a Historically Underutilized Business (HUB), Fitch Irick Affordable, LLC, and Evans McNeill Investments, LLC; and, 3) amendment to the LURA for the 2007 award to change the accessible units numbers, with no changes to the number or unit types of the accessible units, as part of the current rehabilitation process.
Also, upon review of the amendment request, it was discovered that the unit mix in the revised Rent Schedule submitted during the Application review process contained an error in the unit mix. The Applicant is now requesting that the unit mix be correctly identified by decreasing the number of two-bedroom units by one and increasing the number of three-bedroom units by one, which results in 31 one-bedroom, 57 two-bedroom, and 16 three-bedroom units instead of the 31 one-bedroom, 58 two-bedroom, and 15 three-bedroom units identified in the revised Rent Schedule in the Application. Board approval is required for a modification of the bedroom mix of units as directed in Tex. Gov’t Code §2306.6712(d)(2) and 10 TAC §10.405(a)(4)(B).
The Applicant also requests approval of amendment to the LURA for the 2007 HTC award to change the accessible unit numbers, with no changes to the number or unit types of the accessible units, as part of the current rehabilitation process. This change does not require approval from the Board and can be processed administratively, and the Department will also update the required 504 accessibility standard to reflect 2010 ADA with HUD’s 11 exceptions.
10 TAC §11.101(b)(4)(D) and (N) require screens on all operable windows and Energy Star or equivalently rated windows as Mandatory Development Amenities. However, the Development received Historic Tax Credits, which required the Texas Historical Commission to approve the replacement windows installed in the buildings, and this entity determined that the original buildings would not have had window screens and that the best acceptable windows that are the closest match to the original windows have a clear glazing which does not meet Energy Star rating requirements. 10 TAC §11.101(b)(4) states that the Board may waive one or more of the requirements of the paragraph for Developments that include Historic Tax Credits, with evidence that the amenity has not been approved by the Texas Historical Commission or the National Park Service, as applicable. The Applicant provided a letter dated May 27, 2026, from the Texas Historical Commission stating that this entity does not approve window screens nor Energy Star windows for this historic campus and supports the waiver request.
To achieve a 50% ad valorem property tax exemption, the Applicant requests approval of introduction of Casa Tierra SA-1, Inc., a Texas nonprofit corporation, as managing member of the Applicant, Historic Waco Lofts Rehab, LLC, and addition of a new special member, Historic Waco Lofts Rehab MM, LLC, that has as members LOK Texas, LLC, a Historically Underutilized Business (HUB), Fitch Irick Affordable, LLC, and Evans McNeill Investments, LLC. The HTC Application for the Development received two points for agreeing to include a certified Historically Underutilized Business (HUB) in the ownership structure of the original managing member and materially participating in the development and operation of the Development throughout the Compliance Period, and receiving a combination of ownership interest in the original managing member of the Applicant, cash flow from operations, and developer fee which taken together equal at least 50% and no less than 5% for any category. The Applicant requests that the Application be deemed to meet the requirements of 10 TAC §11.9(b)(2) to gain two Application Sponsor points by including a Nonprofit Organization in the structure of the new managing member in lieu of having the HUB in the structure of the original managing member. As part of this change to the structure, the Applicant will provide a minimum of three additional points related to Resident Supportive Services under 10 TAC §11.101(7) as required for this option under the 2025 Qualified Allocation Plan.
The Applicant states the reason for the requested changes to the ownership structure is to maintain the financial stability of the Development. The Applicant cites interest rate fluctuation, investor cooperation and construction volatility, and states that these factors were not foreseeable by the Applicant.
The Applicant provided letters of acknowledgment from United Bank and PNC Real Estate for the addition of the nonprofit organization to the ownership structure, which will allow a 50% property tax exemption. Also, although not required under the rules for this transaction, the Applicant provided Resolution No. 2026-379 from the City of Waco affirming continued support for the Development as well as a resolution of continued support from the Waco Independent School District. The Applicant’s representative stated that they also reached out to the McLennan County officials for a letter of support, but a letter of support from the county has not yet been received.
None of the proposed changes would have affected the scoring or selection of the Application in the competitive round.
Staff recommends approval of the requested waiver under 10 TAC §11.101(b)(4) for screens on all operable windows and for Energy Star or equivalently rated windows, changes to the ownership structure, and correction to the unit mix for Historic Lofts of Waco High.