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Presentation, discussion, and possible action on an appeal for Villas at Primrose
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RECOMMENDED ACTION
recommendation
WHEREAS, Villas at Primrose is a 2024 9% Housing Tax Credit Application that proposes the New Construction of 113 affordable Units in McAllen;
WHEREAS, the 2024 Qualified Allocation Plan (QAP) includes a new tie-breaker related to proximity to certain community amenities that gives priority to Applications based on proximity to features such as a full-service grocery store;
WHEREAS, this Application included a store that does not meet the QAP’s definition of grocery store to be used in the tie-breaker, and accordingly, staff excluded that store from consideration in the tie-breaker; and
WHEREAS, the Applicant appealed staff’s decision, and that appeal was denied by the Executive Director;
NOW, therefore, it is hereby
RESOLVED, that the appeal for Villas at Primrose is hereby denied.
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BACKGROUND
Villas at Primrose is a 2024 9% Housing Tax Credit Application that requests $2,000,000 in Housing Tax Credits for the New Construction of 113 affordable Units serving the elderly population in McAllen.
The 2024 Qualified Allocation Plan (QAP) includes a tie-breaker that determines priority based on cumulative proximity to a number of defined features, including grocery stores, public libraries, elementary schools, and recreational parkland. Grocery store is specifically defined in the rules as:
A full service grocery store of sufficient size and volume to provide for the needs of the surrounding neighborhood including the proposed Development; offering a wide variety of fresh, frozen, canned and prepared foods, including but not limited to a variety of fresh meats, poultry, and seafood; a wide selection of fresh produce including a selection of different fruits and vegetables; a selection of baked goods and a wide array of dairy products including cheeses, and a wide variety of household goods, paper goods and toiletry items. (emphasis added)
The subject Application was submitted using a Target location as the qualifying grocery store for tie-breaker purposes. A Request for Administrative Deficiency was submitted by a third party that suggested that the Target in question does not qualify under this rule, as fresh meats, poultry and seafood, and a wide variety of fresh produce are not offered. Staff issued an Administrative Deficiency in response to this request, and a response was timely received. The response to the deficiency acknowledges that fresh meats, poultry, seafood, and produce are not available at the Target location submitted for the tie-breaker, and instead suggests that the availability of these items being delivered by Target meets the requirements. Staff disagreed that a delivery service meets the definition, as those items are not offered at the location itself. This matter was presented to the Department’s Governing Board in a report item related to Requests for Administrative Deficiency on June 13, 2024, and the Board did not remand the matter back to staff for further consideration. Based on this, staff excluded the Target location from tie-breaker consideration for this Application, and the Applicant was formally notified of this decision on June 20, 2024. In accordance with 10 TAC §11.7(2)(D), in the event that a feature is disqualified from consideration in the tie-breaker, the remaining three items - in this case, the park, library, and elementary school - will be used to determine tie-breaker preference.
The Applicant timely appealed the determination related to the tie-breaker. In the Appeal, the Applicant the cites the Opportunity Index scoring item in the QAP, which awards points to Development Sites that are located in high opportunity areas in close proximity to certain amenities. While that specific scoring item does state that amenities may be considered so long as site work has commenced by the Pre-Application Final Delivery Date, this scoring item is not relevant to the tie-breaker established at 10 TAC §11.7(2), which specifically states that the features in question must be present as of the Full Application Delivery Date, with no additional language to allow for features that are under construction. The appeal also refers to an Application from 2017 that used an under-construction HEB grocery store as a tie-breaker factor. It is suggested that this situation, in which the appeal was granted, contradicts staff’s determination regarding the Target store. This decision, however, concerned a prior tie-breaker that has since been removed from the QAP and replaced with entirely new language.
Because the Target store did not meet the definition established in 10 TAC §11.7(2) as of the Full Application Delivery Date, the Executive Director denied the appeal on July 3, 2024. For the reasons outlined in this item, staff also recommends that the Board deny the appeal.