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Presentation, discussion, and possible action on recommendation to adopt an Agreed Final Order assessing an administrative penalty relating to Jubilee at Texas Parkway (HTC 17317 / CMTS 5333)
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RECOMMENDED ACTION
recommendation
WHEREAS, Jubilee at Texas Parkway (HTC 17317 / CMTS 5333) (Jubilee) had uncorrected compliance findings relating to the applicable land use restriction agreement and the associated statutory and rule requirements;
WHEREAS, Jubilee is owned by Jubilee at Texas Parkway, LP, which is controlled by Mark E. Gardner of Gardner Capital;
WHEREAS, TDHCA identified findings of noncompliance at Jubilee as part of a 2025 complaint, and referred the Owner for an administrative penalty when findings of noncompliance were not timely corrected;
WHEREAS, all referred noncompliance has now been resolved;
WHEREAS, owner representatives participated in an informal conference with the Enforcement Committee on August 21, 2025;
WHEREAS, the owner has agreed, subject to Board approval, to enter into an Agreed Final Order for Jubilee, assessing an administrative penalty of $1,250.00; and
WHEREAS, staff has based its recommendations for an Agreed Final Order for Jubilee on the Department’s rules for administrative penalties and an assessment of each and all of the statutory factors to be considered in assessing such penalties, applied specifically to the facts and circumstances present in this case.
NOW, therefore, it is hereby
RESOLVED, that an Agreed Final Order assessing an administrative penalty of $1,250.00 for noncompliance at Jubilee, substantially in the form presented at this meeting, and authorizing any non-substantive technical corrections, is hereby adopted as the order of this Board.
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BACKGROUND
PROPERTY INFORMATION: 2017 9% HTC award for new construction of a Qualified Elderly Project. 82 units in Missouri City, Fort Bend County, with 8 units restricted at 30% AMI, 32 units restricted at 50% AMI, and 39 units restricted at 60% AMI. Although there are five BINs for tax credit purposes, the property is designed as a four-story U-shaped building, with two elevators. The HTC LURA was effective in 2020. The 15-year federal HTC Compliance Period will run through December 31, 2035, and the state HTC Extended Use Period runs 40 years, terminating on December 31, 2055.
RESPONSIBLE PARTIES IN CONTROL: Jubilee at Texas Parkway MM, LLC, controlled by Mark E. Gardner, is the sole member for Jubilee at Texas Parkway GP, LLC, the general partner of Jubilee at Texas Parkway, LP, the owner of Jubilee. It is the original owner. Mark E. Gardner is also the guarantor, and is the principal and chairman of the Board for Gardner Capital, a private equity firm specializing in affordable housing, and operating in twenty states.
REFERRED VIOLATIONS SUBJECT TO ADMINISTRATIVE PENALTIES:
1. Complaint - National Standards for the Physical Inspection of Real Estate (NSPIRE): The Department received a legislative complaint regarding two nonfunctional elevators. Elevator 1 had reportedly been nonfunctional since Hurricane Beryl on July 8, 2024, and Elevator 2 broke on May 5, 2025. As noted above, this is a four-story building restricted to elderly residents. Broken elevators are a violation of NSPIRE, and having no functional elevator is also an accessibility violation because it is part of an accessible route. The Department issued a notice of noncompliance on June 25, 2025, setting a corrective action deadline of July 2, 2025. Elevator 1 was repaired on July 2, 2025, and Elevator 2 was repaired on July 24, 2025.
FACTORS CONSIDERED TO DETERMINE ADMINISTRATIVE PENALTY: The Enforcement Committee analyzed the required statutory factors for determining an appropriate administrative penalty as follows:
1. The seriousness, extent, and gravity of the violations, and whether a hazard is posed to the health, safety, or economic welfare of the public: Elevator 1 was down for 359 days, and Elevator 2 was down for 80 days. There was 58-day period between May 5, 2025 and July 2, 2025, where there was no functional elevator for the building. Having no functional elevator is extremely serious, with multiple reports of elderly and/or disabled residents who were unable to get downstairs without assistance.
2. History of previous violations: There is no history for this property. Six properties in the TDHCA portfolio are controlled by Mark Gardner, two of which have been referred for final construction inspection noncompliance during the past three years, but were resolved informally. No additional actively monitored properties controlled by Mr. Gardner have been referred during the past three years.
3. Efforts made to correct the violations: It appears that there may have been a disconnect between ownership and property management. In initial correspondence with TDHCA staff regarding the complaint in June 2025, the property management company, Asset Living, stated that it was initially unable to proceed with elevator repairs due to lack of available funds, but that it was now working with an equity partner to release operational escrow reserve funds in order to repair both elevators. Gardner Capital representatives later stated during the informal conference that it was unaware Elevator 1 had gone down in 2024, and that it first learned of the elevator problems on May 10, 2025, when it was presented with a repair estimate for approval. If this is accurate, it appears that there was little effort to repair Elevator 1 until the problem escalated in urgency when the second elevator broke. This is a risky strategy in an elevator-serviced building, particularly when occupancy is restricted to the elderly population. The result was a 58-day period with no operable elevator, leading to tenant complaints, legislative complaints, and media inquiries.
Elevator 1 was repaired and fully operational as of July 2, 2025, when Centerpoint determined that the problem with Elevator 1 was a loose external wire at the transformer serving the building, which was causing voltage drops and fluctuations. This makes sense due to Hurricane Beryl. Elevator 1 was then restored to service that evening after the wire was secured by Centerpoint, and a series of checks were completed by the elevator repair company.
Elevator 2 was repaired and fully operational as of July 24, 2025. The repair timeline for Elevator 2 shows a timelier response, and indicates that the drive replacement order was quickly approved by Gardner Capital on May 13, 2025, after two electrical inspections and three elevator repair company inspections conducted between May 5, 2025 and May 10, 2025. A series of complications and delays ensued, with missing and defective shipped parts, and Elevator 2 was ultimately repaired on July 24, 2025.
4. Any other matters that justice may require: While investigating the elevator compliant, the Department learned that Jubilee was not current with its elevator certification requirements for the Texas Department of Licensing and Regulation (TDLR). The certification problems have since been addressed with TDLR. It is our understanding that TDLR and Missouri City are also pursuing separate enforcement cases relating to the broken elevators.
Compliance confirms that broken elevators are becoming a more frequent problem as buildings with elevators age, and parts become difficult to find, but this is a new building, with construction completed on October 13, 2021. With that said, elevator repairs are highly specialized, and can be complicated and time consuming, as experienced for Elevator 2.
Per Gardner Capital, the property suffered hurricane damage from Hurricane Beryl on July 8, 2024, including water damage to units. Repairs were prioritized for tenant units. Elevator 1 was reportedly damaged during this storm, but Gardener states it was not aware of that until May 2025. Despite the elevator problems, the property is in good condition, scoring 99.31 out of 100 during its 2025 NSPIRE inspection.
Property management did attempt to help residents during the period when both elevators were down. On May 8, 2025, property management started serving daily breakfast and sack lunches to residents on floors two through four. It provided daily resident updates. Upon request, it delivered groceries and prescriptions directly to the residents. It held a public town hall meeting to address tenant concerns in July, and another is scheduled for October.
Finally, Gardner Capital has implemented multiple changes for its portfolio to prevent the reporting disconnect between property management and ownership that caused the extended outage for Elevator 1. It has hired a building engineer, and implemented an incident reporting system going directly to Gardner Capital for urgent matters and incidents requiring immediate owner action. There is a rapid response team for more effective resolution, and Gardner Capital indicates that ongoing management meetings are focusing on quarterly inspections, daily meetings regarding critical systems, and training for all appropriate staff. Vitally, Gardner Capital also signed an elevator maintenance contract on July 30, 2025, for all of its Missouri City properties.
5. Amount necessary to deter future violations: In light of the above factors, the Committee recommends an Agreed Final Order assessing administrative penalties of $1,250.00, currently the maximum potential administrative penalty. There is no recommended forgivable or probated portion to the administrative penalty.
TDHCA is also implementing changes relating to elevators:
1. Memorandum of Understanding with TDLR: The Department is working with TDLR to develop a Memorandum of Understanding to improve elevator compliance and timely repairs at multifamily developments in the TDHCA portfolio. Performing timely elevator inspections and certifications as required by TDLR can help to avoid elevator outages since periodic maintenance is key to keeping an elevator online long-term. Among other things, TDLR will alert TDHCA of affordable housing developments with elevator problems that may require action by TDHCA, and TDHCA will alert TDLR when it identifies elevators with noncompliant certifications and/or licenses.
2. Rule updates: The Department is proposing multiple rule updates to reflect the seriousness of elevator violations, to incentivize timely correction, and to deter future violations, including:
a. 10 TAC §2.302: The proposed amendment increases the potential administrative penalty for elevator noncompliance. The current administrative penalty schedule at Figure 2 of 10 TAC §2.302(k) did not account for circumstances in which extended elevator outage periods would result in an affected building failing to have an accessible route. Department staff had anticipated administrative penalty referrals for multiple violations of NSPIRE being referred together after a regularly scheduled TDHCA inspection, and for the resulting administrative penalties to be stacked for each said violation, rather than seeing stand-alone NSPIRE and accessibility violations for an elevator that breaks outside of the typical TDHCA inspection schedule. HUD’s NSPIRE protocol classifies an inoperable elevator as a violation of moderate seriousness. The maximum potential administrative penalty under the schedule is therefore currently $1,250.00, including $250.00 for a moderate NSPIRE violation and $1,000.00 for an accessibility violation. The rule amendment will increase that to $1,000.00 per instance plus up to $2,500.00 per week if an elevator-serviced building has no operable elevators, or $1,000.00 per instance plus up to $500.00 per week if an elevator-serviced building has an inoperable elevator, but other operable elevators are available in the building.
b. 10 TAC §2.401: The rule currently includes potential debarment for refusal to correct an NSPIRE violation. The proposed amendment adds debarment criteria for a Responsible Party that Controls a multifamily Development where there is no operable elevator in an elevator-serviced building after January 1, 2026, unless the Owner can provide evidence that necessary repairs were under contract and scheduled for repair with a licensed repair company within the corrective action period.
RECOMMENDATION: Accordingly, after consideration of all appropriate factors, the Enforcement Committee and Executive Director recommend an Agreed Final Order for an administrative penalty in the amount of $1,250.00 against Jubilee at Texas Parkway, LP.