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Presentation, discussion, and possible action regarding an appeal of the termination of a loan Application for Braniff Lofts
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RECOMMENDED ACTION
recommendation
WHEREAS, the Governing Board approved the release of an Invitation to Apply on March 6, 2025, which made available $10 million in Tax Credit Assistance Program Repayment Funds (TCAP-RF) as loans to certain qualifying Developments;
WHEREAS, the Invitation required that any loan made under it carry a 2% interest rate and be fully amortizing, with no option for deferred or forgivable loan terms;
WHEREAS, Braniff Lofts applied for a $10 million loan from the Invitation; however, the Development is only feasible if the loan is deferred with no annual debt service;
WHEREAS, staff terminated the Application because it is facially infeasible under the terms of the Invitation;
WHEREAS, the Applicant timely appealed this termination, agreeing that the Development cannot support the $10 million loan with the loan terms required by the Invitation, and instead requesting that the Invitation be amended to allow for the requested loan terms; and
WHEREAS, while the Board could direct staff to issue a new Invitation to Apply with the requested loan terms, this would be a separate matter from the current termination;
NOW, therefore, it is hereby
RESOLVED, that the appeal of the termination of the loan application for Braniff Lofts is denied.
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BACKGROUND
The Governing Board approved the release of an Invitation to Apply on March 6, 2025, which made available $10 million in Tax Credit Assistance Program Repayment Funds (TCAP-RF) as loans to certain qualifying Development. An Applicant submitted Braniff Lofts in response to this Invitation, requesting $10 million for the Adaptive Reuse of a historic building in Dallas to provide 48 Units of Supportive Housing. The funding stack was completed with a permanent loan from the City of Dallas, federal and state historic tax credits, and a $20 million bond reservation.
The Invitation stipulated that any loan made under it carry a 2% interest rate and be fully amortizing, with no option for deferred or forgivable loan terms. The Application for Braniff Lofts requested a loan at 2% interest, but with no annual debt service. The Invitation does not allow for any deferred or forgivable loan terms. When fully amortizing the loan as required under the Invitation, the Application is facially infeasible. Because of this, staff terminated the loan Application, which the Developer timely appealed.
The appeal does not dispute that the Application is infeasible under the required terms of the Invitation; rather, it requests that the Board amend the Invitation to allow for the requested loan terms. Because the Invitation has already closed, it is not possible to amend it. The Board could direct staff to issue a new Invitation with the requested loan terms or with other loan terms suggested by the Board, in which case, that Invitation would be presented for approval at the October meeting. Such direction would have no bearing on the current item.
Because the Application is infeasible under the Invitation, staff recommends that the Board deny the appeal.