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Presentation, discussion, and possible action regarding a Material Amendment to the Land Use Restriction Agreement for Lake Ridge Apartments (HTC #16082)
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RECOMMENDED ACTION
recommendation
WHEREAS, Lake Ridge Apartments (Development) received an award of 9% Housing Tax Credits (HTCs) in 2016 for the acquisition and rehabilitation of 42 units for the elderly in Mabank, Kaufman County;
WHEREAS, the HTC Application received one point for agreeing to include a certified Historically Underutilized Business (HUB) in the ownership structure of the General Partner and materially participating in the development and operation of the Development throughout the Compliance Period, and this restriction is included in the Land Use Restriction Agreement (LURA) for the Development;
WHEREAS, due to challenges encountered in renewing the HUB certification for HVM 5G Development, LLC, the HUB identified in the LURA, with the Texas Comptroller, HVM 2016 Mabank, Ltd. (the Development Owner or Owner) is requesting approval for the removal of the HUB requirement from the LURA;
WHEREAS, the ownership structure or involvement of HVM 5G Development, LLC is not changing, and HVM 5G Development LLC will continue to serve as the General Partner but not as a HUB; and
WHEREAS, the requested change does not negatively affect the Development, impact the viability of the transaction, or affect the amount of the tax credits awarded;
NOW, therefore, it is hereby
RESOLVED, that the requested material amendment to the LURA for Lake Ridge Apartments 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.
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BACKGROUND
Lake Ridge Apartments was approved for a 9% HTC award in 2016 for the acquisition and rehabilitation of 42 units, all of which are designated as low-income units, of multifamily housing for the elderly population in Mabank, Kaufman County. The HTC Application for the Development received one point because the Development was structured to include a Historically Underutilized Business (HUB) in the ownership structure that would have some combination of ownership interest in the General Partner of the Owner, cash flow from operations, and Developer Fee. The HUB is also required to materially participate in the development and operation of the Development throughout the Compliance Period. Rehabilitation of the Development has been completed, and the cost certification documentation for the Development is currently under review by the Department.
In a letter dated August 15, 2025, Carrie Hoover, representative for the Development Owner, requested approval for the removal of the HUB requirement. Because this request is prior to issuance of IRS Forms 8609 for the Development, it must be processed as a material amendment.
The Owner indicated that they encountered challenges in renewing the HUB certification with the Texas Comptroller, and the Owner now finds itself in potential non-compliance with its LURA. There is no change in the ownership structure or involvement of HVM 5G Development, LLC, the HUB identified in the LURA. This entity will still serve as the General Partner but not as a HUB. No principals will change with this request, and day-to-day operations will remain the same. There are no new members being added.
The Development Owner has complied with the amendment and notification requirements under 10 TAC §10.405(b). The Development Owner held a public hearing on the matter at the Development on September 22, 2025. There was no public comment regarding the proposed amendment.
Staff confirmed that the loss of the Sponsor Characteristics point would not have affected the award. The requested change does not materially alter the Development in a negative manner or impact the viability of the transaction.
Staff recommends approval of the material amendment as presented herein.