title
Presentation, discussion, and possible action regarding an increase to the Housing Tax Credit amount for Bridge at Estancia (HTC #21457)
end
RECOMMENDED ACTION
recommendation
WHEREAS, Bridge at Estancia formerly known as El Prado at Estancia (the Development) received a 4% Housing Tax Credit (HTC) award in 2021 for the construction of 318 units for the general population in Austin, Travis County;
WHEREAS, construction of the Development has been completed, and El Prado at Estancia Ltd. (the Development Owner or Owner) requests, at cost certification, to increase the annual HTC amount from $2,196,552, the amount reflected in the Determination Notice, to $2,645,494, which represents a 20.44% ($448,942) increase;
WHEREAS, §42(m)(2) of the Internal Revenue Code allows an increase of tax credits for a bond financed project when the increase is determined necessary as demonstrated through the submission of the cost certification package;
WHEREAS, 10 TAC §10.401(d) requires approval by the Board if an increase to the amount of tax credits exceeds 120% of the amount of credit reflected in the Determination Notice; and
WHEREAS, a review of the cost certification package submitted by the Development Owner supports the need for the additional tax credits requested, and staff has determined that the increase is necessary for the viability of the transaction;
NOW, therefore, it is hereby
RESOLVED, that the housing tax credit increase for Bridge at Estancia requested by the Development Owner is approved as presented to this meeting, and the Executive Director and his designees are each authorized, directed, and empowered to take all necessary action to effectuate the foregoing.
end
BACKGROUND
Bridge at Estancia formerly known as El Prado at Estancia received a 4% HTC award in 2021 for the construction of 318 units for the general population in Austin, Travis County. On October 1, 2021, a Determination Notice was issued with an approved annual tax credit amount of $2,196,552. The residential buildings in the Development placed in service between December 10, 2024, and February 24, 2025, and the final cost certification documentation is currently under review by the Department.
The cost certification documentation for the Development requests an annual tax credit award of $2,645,494, and this amount represents an increase of $448,942 (20.44%) from the amount reflected in the Determination Notice. A comparison of the development costs from the time of the Application, in 2021, to Cost Certification indicates that total development costs increased $8,236,252 (11.20%), from $73,544,678 to $81,780,930.
In a letter as of December 1, 2025, George Currall, the representative for the Development Owner, explained that the cost overruns stem primarily from an 11-month delay in unit turns. Additionally, approximately $800k in change orders were due to unexpected increases in the price of construction materials such as plumbing ($264k), precast concrete ($56k), cabinets ($52k), HVAC ($223k), and more. An additional increase of approximately $400k was associated with regulatory, code, and permit-driven changes. Changes required by city officials or discovered during the permitting process led to revisions in civil, structural, and mechanical plans. Examples include added stormwater features, pressure-reducing valves, and foundation changes, all of which increased costs and, in some cases, delayed work. There were also over 80 days of documented weather delays and an additional 57 days of delay due to a delayed water meter application.
Staff’s analysis of this transaction at cost certification has concluded that the Development supports an annual tax credit allocation of $2,645,494, and that the requested increase is necessary for the financial feasibility of the project and its viability as a qualified low-income housing project throughout the credit period. This results in a 20.44% increase from $2,196,552, the original annual HTC amount in the Determination Notice. In accordance with 10 TAC §10.401(d), Board approval is required because the requested tax credit amount exceeds 120% of the HTC amount reflected in the Determination Notice. The Development Owner will be required to submit the Tax-Exempt Bond Credit Increase Request Fee required in 10 TAC §11.901(8) prior to issuance of Forms 8609. Additionally, all required pending documentation for the cost certification review must be provided for the issuance of 8609s.
Staff recommends approval of the increase in the tax credit award as presented herein.