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Presentation, discussion, and possible action on a waiver of 10 TAC §11.302(e)(6) for Sunset Gardens (HTC #22445)
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RECOMMENDED ACTION
recommendation
WHEREAS, Sunset Gardens (Development) was approved for a 4% Housing Tax Credit (HTC) award in 2022, for the acquisition and rehabilitation of 330 units, all of which are designated as low-income units, in Houston, Harris County, and was issued a Determination Notice reflecting an annual HTC award in the amount of $3,058,153;
WHEREAS, Sunset Gardens Preservation, LP (Development Owner or Owner) purchased the Development on September 1, 2022, and rehabilitation was completed in September 2024;
WHEREAS, the cost certification documentation for the Development has been submitted by the Owner with an annual credit request of $3,354,150, and is under review the Department;
WHEREAS, staff’s analysis at cost certification identified $1,553,553 representing construction security expenses that are capitalized and classified in the Development Cost Schedule as Indirect Construction Costs and included Development’s rehabilitation basis;
WHEREAS, §11.302(e)(6) of the 2022 Qualified Allocation Plan (QAP) identifies jobsite security as one of the general requirements that is a General Contractor Fee, and the General Contractor Fee is limited to 14% of the Hard Costs for this Development;
WHEREAS, the amount classified in the Development Cost Schedule as General Contractor Fee is at the maximum threshold allowed under 10 TAC §11.302(e)(6) prior to the reclassification of the construction security costs, and therefore, the costs must be excluded from eligible basis in staff’s underwriting analysis, which results in an annual recommended HTC amount of $3,245,168, a reduction of $108,982 from the annual HTC amount requested by the Owner;
WHEREAS, the Board has the duty under Section 2306.148 of the Texas Gov’t Code to adopt underwriting standards for housing tax credits allocated by the Department; and
WHEREAS, t...
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