Video Description:
LHA Advisory Board – September 2023
Read along below:
Unknown Speaker 0:00
Roll Call. I didn’t call it order I just by the way. So swordman Jensen. Join me here. Maureen Kelly. Yes. And then staff we have Michael Donnell here, Lisa, calendar here and Sarah here
Speaker 1 0:26
everybody gotta have time to check the alert the mouths of the August meeting. I need a
Unknown Speaker 0:33
motion to approve motion. Second, I’ll second I’ll call it all in favor, or just raise your hand. Okay. All right, thank you. All right.
Unknown Speaker 1:02
We have any publisher invited to be here
Unknown Speaker 1:11
for a ride, organization of dates, you got to have any this go around standing.
Unknown Speaker 1:23
Development and project updates,
Speaker 2 1:26
those we do. Alright, so I’m gonna skip the lunch place for a moment, since that’s on the agenda, and more deaths further down. I did want to give an update on the sale of the 650 main building, WD they are completed we extended the period to close to November 30. On the sale, they are conducting a survey right now that will be done by the end of this month, because you’re doing some digging. Because there’s a you know, it’s it’s downtown Longmont, the property lines drawn very, very long ago, and all the buildings on this lock don’t even match up with them. So they’re conducting a survey just to make sure they know where the property boundary is. And if we need to, we would talk about how they would maintain legal access to the driveway in front because that would still be on this property. So we’re just working through those motions within working with the title company. And we should be closed by November 30. And that’s when the services MOU would kick into us once we close start providing disability related services to residents. On the Hoover, essentially Hoover project, were continuing with design development, in anticipation of being awarded tax credits, we made that lots of projects kind of hold at this point with them submitted for tax credits and wait to see if we were awarded. But we know we’re going to do this project, whether it’s this tax credit round or another. So we’re moving forward on design with the intent to be able to submit to the city for a first round of review. Once we do get tax credits awarded, which would be about November. And we have been putting in grants left and right or speaking to potential funders, because we’re trying to make sure that the Early Childhood Education Center can be included. And so we already have a potential commitment of $750,000 from the local community foundation, they’re going to be presenting that to their board on this coming Thursday morning. And so we’re hopeful that that will all work out because that would be wonderful. We’ve put in for the strong communities grant. This is a state grant and we have a preamp within next week. So that would also be very helpful. And then we’re just continuing to talk to people and put out feelers to try and make sure we can get that funded. The goal really is the Wild Plum center. Who is there confirming with their board, how onboard they are until they have to know what the funding situation is because we don’t have enough funding to complete the entire construction that you see. They they can’t their model does not support rent, they can’t pay rent, they need to own their building, and not have that as part of their operational costs. Because it’s just been so make enough money to cover that with serving the population. So they do and so they are going we’re just continually talking about the Wild Plum board giving them a prize. And once we start getting money out the door, let’s get something more formal from them. But it’s all everyone’s committed and working great and we’re hopeful that by the time we get the tax credit award if we do this round, we’ve got the EC funded as well. The Christmann project building threes now up, building four is starting now. I’m so I haven’t gotten a more recent update, but they were still planning on being leasing up to be occupied in about February. And so now I’m I need to check in with them if they will start with one building even though construction still ongoing on the rest. I’ll see how that’s going in terms of making sure that at least that starts in February. But that should be coming. And the Zinnia project, we have a groundbreaking next Tuesday at 1130. Let’s make sure to invite them if we didn’t already. Make sure you all get invited for the groundbreaking ceremony. And they’re gone vertical. What’s the I haven’t been to the suites in a couple of weeks. You know, it looks like lately.
Speaker 3 5:48
I think they’re courting some but this week, they’ve been off monitoring Summit.
Speaker 2 5:52
Oh, they haven’t Great. Start framing it. Okay, I guess that makes sense to do groundbreaking before you go start framing anyways. Not they’re not great at breaking ground, because the dirts already moved and already have foundation support. But it’s a little less messy out there to bring a bunch of people that are shaky. Yeah. And then recovery cafe. I believe I gave an update last month that we’ve determined that the building and the permitting of that building attachment to the suites is feasible. The construction cost estimate is around 5 million. And so right now they’re still continuing with design, and they’re doing sorting out capital campaigns and putting out funding requests to where because and others to try and get more money in the bank. You
Speaker 2 6:47
know, that’s what I have for Kelvin project updates. Sorry, questions.
Unknown Speaker 6:55
I noticed in the spreadsheet. I have looked at
Unknown Speaker 7:00
Christmas, from the street.
Unknown Speaker 7:04
And is that the actual
Speaker 1 7:06
color of the building that we are, which is the stuff we match
Unknown Speaker 7:11
the rest of the areas. So I just was wondering what that
Speaker 2 7:13
was. And that is the impeller, they they had some samples up early on. And the blue was much too it was like a sky blue. It was very wrong. And so they did change the that to more about stone blue, which I think looks nice. The orange is very orange, if that’s what you’re thinking. But yes, that is the color scheme. What I don’t know. And I can ask Danny this over mgL I saw that the two buildings that they put in are the same. But are they going to mix it up on the next two? Or are they all going to be that look? Yes. Okay. Isn’t it bright orange? I thought it’d be like a burnt orange. But it
Speaker 2 8:10
looks nice when the sign that goes down the the vertical sign that helps tie it all together a little bit, I think. But it is still striking. Is there any interest in hearing an update about the Adrian house that we talked about last month. So we finalized the management agreement, it did end up looking a bit different from what we’ve reviewed, but it was really all on the legal side, it wasn’t anything substantive to the way lmha would manage it. We did change the term to 10 years because that’s how long we’ve got built in to pay off the affordable housing fund loan that though that was put into the rehab. And so the council will be considering that tonight on they have to do two readings because it’s a lease. So tonight and then on the 26th and then lhsa board it will reconsider it on the 26th since the the attorneys made tweaks just to the form of the agreement basically. And so it will be rent ready as of October 1. And we actually have a four bedroom approved four bedroom voucher holder family that is geared up and ready to go. And so we will have a tenant ready to rock. So what we’re doing right now is final punch list items on the construction making sure we have we’re working with open space because there’s a locked gate that the farmer behind it has access to. We’re doing all the coordination stuff to make sure it’s a smooth and perfect tenant. So that’s our first one I became and there will be more to come. Probably more like next year.
Unknown Speaker 9:59
Yes Sponsored by these openings, single family homes,
Speaker 2 10:04
so that’s right. That’s right. That was that was your virtual one before. Alright, so the city owns multiple properties around town for water or open space purposes. Most of them around new reservoir that were that were involved in, they have homes on them. And some of them are leased back to the original owner as long as they manage the Ag associated with it. So there were four or five houses that the city in about 2018 council said, if if we own homes, and we have an affordable housing shortage, why are we Why would we rent those at market rate, let’s make them affordable. So the first one was 100 plus year old house, new big renovation. So we use the affordable housing fund to do that, and it will get paid back through these proceeds. And we’re reading into an article they’re just
Speaker 4 11:00
bringing it up because you see Jas several properties of this EVE Online. It’s really potentially so could be another.
Unknown Speaker 11:11
Let’s talk about this single families or duplexes, single families duplexes? Yes,
Unknown Speaker 11:20
they mentioned that
Unknown Speaker 11:22
it’s not a done deal. We’re just we’re exploring
Speaker 5 11:32
Yeah, and I said, Well, I’m gonna buy anything and got that text. Yeah. So we’ll see. But it’s interesting on that now and for sale market, we have acquired six Plex. So on the private market, we tested it. And it came back hot. So buyers are now met testing acquisitions,
Speaker 6 12:02
and we are leaving those stoners. Like literally open their hands on cleanup. Yeah.
Speaker 2 12:15
Talk about funding opportunity of the state something together for that?
Unknown Speaker 12:20
Yes. Well, let’s chat.
Speaker 5 12:29
Let’s just reach out to the mayor. And so we’re waiting on something on that.
Speaker 2 12:39
Alright, let’s move on to six. Okay, I’m just gonna keep rolling along. Yeah. All right. So several months ago, we talked about making updates to the property tax exemption partnership policy to reflect the wave of income averaging projects that are now coming through for light tech. And that did not fit well under what we had written up just in February for tax policy. So what you have in your packet is a redlined version is primarily to, to address income averaging. But then there was a couple of opportunities that Katie, our development project manager, in recent experience with Zinnia, and other projects made a recommendation for us to consider. So I thought I would throw that into here to see if you all would recommend anything to the LNG board regarding this. So on the first page, I opened like a junior packet, but first page of the policy. See red lines there. So there’s the here’s just a clarification about how this policy is really around property tax exemption, but there’s a separate process for sales and use tax exemption. But if you qualify for this, you would qualify for that as well. It just clarifies that which is just making sure everybody understands this is confusion with when some developers and had read it. Moving to page two, we ended up reworking the affordability criteria a bit to make sure it was just really once he added an income averaging, it kind of countered counter Thank you contradicted itself, copies are kicked in. So the first option, and this is really to intend it to be for a traditional life type project or just if it’s not like something that is intended to be an affordable property, so at least 50% of the units will not be restricted to 60% Ami or less. And then in option two, this is where we bring in the income averaging, where you have to have at least a 60% Ami on average. And then as as well as the Do you have to bring in more 30% Ami units because that’s really the intent. At least from our view, the benefit of income averaging is not just to boost the project financially is to allow more 3% units, which is what is most difficult to include and most needed.
Unknown Speaker 15:18
there any questions on that that’s
Speaker 2 15:19
really the meat of this so far. And that 15% It says at the end, at least 15% of your overall unit mix must be affordable to households earning 30% Ami or less, that is vetted, because of the first two income projects that income averaging projects that came through, however, an app would, both of those would have met that threshold. And when you looked at the overall mix, it looks like an appropriate number and more 30%, who has never been able to get on the field so far.
Speaker 2 15:56
And then we just clarify our third bullet here. Regardless of the option chosen above, at least 20% of the units must be below 50. And that’s really tied to our Longmont inclusionary housing code where we start really considering a property doing above and beyond the inclusionary housing requirement, once they meet 20%, you can start qualifying for incentives. But if you can’t meet that, then it’s not really considered a truly affordable property. But you could still get some Any questions before I move on?
Speaker 7 16:35
I have a question on average. So is it like a tiered approach? So if you reach 25%, or more units that are below 30%? It’s 10%. Yeah, doesn’t even move to the next. So
Speaker 2 16:46
if you if you scroll down to? Yes, thank you. And the we’ve got it’s written in the tearing is written into the policy. And then I also have attached the template calculator, which does show how you can tear it out that way. So if you do, let’s see. If you have 50% or more units at 30%, ami, and then your fee is only 5% of the property tax, and then it goes up as you get higher affordability. So that is tiered. So it’s incentivizing deeper affordability.
Speaker 2 17:39
down to our next edits, on numbers on page four, this is just a clarification about how we would take these to the board and the timing because that if we needed some flexibility in there for some projects, and then moving down to application and partnership fees. So this is a question that Kvr our development project manager came up with our application fee is $5,000. This can be waived if LJ is in the partnership. But it’s generally intended to cover the costs of attorneys to enter on to your insurer in as a partner on the entity that
Speaker 4 18:31
thank you, I would lower application fee and then right in alignment, so you’ll be fully reimbursed for your legal fees.
Speaker 2 18:40
That’s when I’m so it could be in some instances, it could be quite simple. Some might not be simple.
Speaker 4 18:48
And so $1,000 isn’t going to cover braincase,
Speaker 2 18:52
right, just to add Lhh in the most simple terms, just to add a LJ on the as a special limited partner. So is there. So that’s one recommendations or any other thoughts or discussion about that? Do we just say you’ll cover actual fees incurred with a minimum?
Speaker 4 19:11
Yeah, like we I think bcj is $500 application fee. And then we usually get try to cap it at like five or $10 for legal fees, depending on how straightforward it would be but I would recommend having to pay back so that you’re not coming out of pocket.
Speaker 1 19:33
My question was whether other other housing authorities charging you, at least for
Speaker 2 19:39
this 5000 was put in here when reviewing others as well. They’re kind of all over the board. Some of them have very low application fees, but then higher annual management fees, some it’s just where you’re gonna front loaded. And the intent for us is really to cover our costs of legal and At our cost of staff time to, to administer. And that’s really built in Washington annual fee.
Speaker 4 20:08
Do you think that’s fair because they’re paying a small fee for you to just look at it and see right and worth your time spent time. So I think it would be fair to to lower application fee and then get reimbursed for actual expenses. And then I noticed that partnership fees a one time fee, yeah, you don’t have any payment in lieu of taxes, you don’t have any ongoing fees in case if you’re not, if they’re getting the full benefit of a tax exemption, and they have money leftover in our operating, income averaging. You could draw additional funds, instead of just the $1,000. We call it an appliance fee or asset management fee.
Speaker 2 20:52
We have we do have one in there. Will that cover? How do you How does BCHA do it? So we have a compliance in here. And it’s an annual fee. Not really is to cover staff time the annual like we have to review they need to send us their audits, etc. But guys have to you have a as well, right? Do you have a clause in the BCHA policy that covers the operating
Speaker 4 21:19
it’s not a set amount with each one, it’s, it’s negotiated. But I’ve seen that where they’re like $3,000 a year,
Unknown Speaker 21:29
it depends on the performance.
Speaker 4 21:34
We have one partnership in Lafayette where they pay significant fee every year. A management like a compliance and asset management fee with an SOA every year.
Unknown Speaker 21:53
And then you want to make sure that’s higher than waterfall. Because if it’s below or
Unknown Speaker 21:59
above the line or below
Unknown Speaker 22:05
that’s where our legal fees start talking.
Unknown Speaker 22:10
And going back and forth and playing ping pong.
Speaker 8 22:13
Similar to not capping the legal fee reimbursement, I think you probably want to not under cabinet meaning not. So it’s going to be based off the performance but not less than $1,000 a year.
Unknown Speaker 22:34
Make it to nose, any other ideas, just throw them out.
Speaker 2 22:45
Okay, moving to the next piece. Okay, so on the next page, we’re starting to talk about the time period and the affordability, we’re just averaging in including income averaging in that as an option. And that is reflected on the template calculator, you can make sure that you get those included in there. Okay, moving to second to last page. So we’re talking about the incentive for LSU to be the property manager, this is something we just added in February, we basically provide a 10% boost to the fee calculation. So for example, if a project qualifies for 25% fee, so that means 25% of the property tax exemption, the value of the property taxes will be paid at the feet, then that fee will be reduced to 50%. If you bring on Ellijay as a property manager. So the intent of that was to incentivize developers to work with lhg. And then we would then bring in income on the management side. But we have a comment here from Katie, she would consider taking this out it gives them a discount on a 15 year benefit when Property Management Agreements are only for one year, and they could drop LNJ. After that. They may be for longer, but some of them are they just certainly aren’t always for 15 years. Maybe something more vague, like lhsaa could consider a reduction in percentage early to manage projects. But she thinks that taking it out entirely. It’s better because these projects sorry, myself. They’re applying. I’m sorry, I’m reading her comment out loud in this general speak. They need the tax exemption for the project to come to fruition. So lmha might as well get the revenue now. So the whole project qualifies for 25% fee. It is going down to 15% as is because at least They will manage the property. That’s a $200,000 discount, which is to have at two and a half years worth of management fee. So we were incentivizing property management with FHA, which would bring in income, but that income compared to the discount we’re giving is off kilter, is what her
Speaker 5 25:20
recommendation is. You just, you get the discount, if you sign a 15 year lease. And you don’t, you know, entertain, you know, what you want to do is make sure that the lease term isn’t greater to accrue more dollars in the managing.
Speaker 2 25:42
Have you seen, what’s the typical term of management agreement that you’ve seen?
Speaker 4 25:48
I don’t know that I know ours are where the manager determines, but you know that that would be heavily negotiated with the investor. And there’s always the option to remove them if you’re not performing. Right? By
Speaker 7 26:08
ours have always been one year and then it just automatically renews it was terminated. So it’s never ever been never even more than a year.
Unknown Speaker 26:18
This point, I see her point. And I don’t know if a 15 year something under an investor. But
Speaker 2 26:29
I, I certainly wouldn’t expect that Zinnia would be willing to do that. Because I think that who knows with some, some developers have different models, some want to stay in for a long time, some don’t necessarily. And like Chrisman wants to transfer over, in this case, Oh Ha. So that’s a safeguard there. But they do want to do the deal and then exit. And if they have a 15 year
Unknown Speaker 26:56
on there, I don’t know if that would screw up there.
Speaker 4 26:59
I’m just thinking through the timing, they wouldn’t be paying the fee until financial closing. By then they would have negotiated all of their LPs with their land investor. So they would have reviewed the 15 year that would determine what they pay, I say keep it in as an option, if they’re willing to sign a 15 year management fee, or management agreement, where the only time you can be removed is if you’re not performing.
Speaker 5 27:30
Are you just an ability to keep it in and negotiate it gives him two years is the right is the magic number seven year or five year may work because you’re now getting more management fee than you’re getting a discount. So
Speaker 2 27:45
we’ve had to adjust the discount based on the term management fee to. And we’ve also
Speaker 4 27:50
negotiated a BCHA, where we’ll take on the manager like we have the option if we so choose to become the property manager after
Speaker 7 28:01
right, two or five years or something. But well, would you want that at a property that you’re not determined if somebody else is determining because it’s agency that’s actually filling the need? You an example MHB to the example. They determine who goes into the suites. So do we need something on our side? Lhh side to be able to terminate? Yeah, you won’t have that 15 year? Because that’s the only my concern is if, yeah, we’re not performing make it terminate? How can we terminate if we’re in a 15 year lease? So we want to have some stipulation there of
Speaker 2 28:41
what in the management agreement not necessarily this though, because that’s, I don’t want to overlap too much with the management agreement. We’re just talking about how to calculate the fee, but then we would certainly want to negotiate it that way. Because we’re doing
Speaker 7 28:53
it we’re saying that was part of the fee. If they sign a lease, then well, or management agreement, then they’re getting a discount, but there’s an option for them to terminate that on an option for us.
Speaker 2 29:05
Well, we wouldn’t be negotiating the management agreement upfront, necessarily at the same time. That would come later. So they’re making a commitment to us at the LHC board. It’s like, formalized through a board action, that they will commit to us in X invermere management agreement, and then we get that in place. And then we go and negotiate with the management agreement, make sure that’s hit and whatever else.
Speaker 5 29:30
You know, Tinder just gave me an idea. So on some of these properties, I mean, the MHP example, with what we’re dealing with this leads,
Speaker 2 29:42
and remember, he has nothing to do with property management. Again,
Speaker 5 29:45
I’m just saying. There’s a point in some of these properties in the societal impact that we’re dealing with, in terms of the broader challenges that we have many You know, what I’m thinking about is if you get the property tax, you get the labor and fee if we can find a way to tie it to management of the property and dealing with the issues that are
Speaker 2 30:18
we did that in the last edit. So further down, you’ll see that we have to find it. You certainly put that we said the it has to be crime, multiple multifamily, Humphrey multifamily housing, maintain decent, safe and sanitary living conditions. If you do not adhere to the requirements of these, including llama code enforcement directives, and generally make a concerted effort to properly maintain and monitor the activities on site and benefit the residents, then we could pull it, we put that in
Unknown Speaker 30:51
my public safety directors most of our issues are
Speaker 4 31:02
not so maybe where it says if the property is no longer in compliance with affordability, covenants, requirements, or agreements, you can add something in there.
Speaker 2 31:15
Yep, we have a whole paragraph down under the partnership terms. You word in the comment bubbles screw me up every single time. There we go. I can easily add that into the section that we already talked about about commitments basically, for the residents.
Speaker 5 31:42
No reason I’m saying that I mean, for the board. We’ve been talking about issues that we’re having on other properties, that at the end of the day, the tax exemption is outpacing the operational expense that we’re having put in for a police fire. At a certain point, it makes no sense to give them a tax exemption for Thanksgiving.
Unknown Speaker 32:08
tax money
Unknown Speaker 32:10
to deal with an issue.
Speaker 4 32:13
Okay. Something else I noticed in a recent version if they this is something that can be reserved for later, but I think it’s worth making a note. So don’t forget, but if if they sell the property at any point, their interest, you have to renegotiate an LPA
Unknown Speaker 32:34
you should get their legal fees covered again. That makes sense.
Speaker 8 32:44
So where did we land on the partnership? The discount was that the recommendation is just that they tie it to a negotiated term of the management agreement. So
Unknown Speaker 32:53
stay with one and a half
Speaker 2 32:57
years, sometimes some sort of proportionate scale.
Speaker 8 33:03
Do you think there’s projects where they if they didn’t get a discount to the management or to the partnership fee that they wouldn’t apply and move forward? Because the tax exemption is so great.
Speaker 2 33:17
The tax exemption, they needed to be financially feasible, right? Most most do if they’re deeply affordable? They certainly do. Because that’s, that’s obvious. But
Unknown Speaker 33:31
we’re already getting into that, right?
Speaker 2 33:33
If the tax exemption is proportionate to the affordable units, we have some discretion to say what is an affordable unit, this is basically making it 80% and below as long as you meet certain conditions. So if you have a higher AMI level in your property, then you are getting more income, which would be more tax, but also still have some cash flow. It’s kind of a balance if you have low AMI if you don’t get much income, but you also have you need that tax exemption to exist. So they kind of all need it. And we have in the past several deals that we’ve done, not a single partner has blinked an eye about the fee. It’s about the long term benefit property.
Speaker 8 34:17
So then I guess the only it’s almost like we’re flipping it, then by saying, We’ll give you a reduction in the partnership B if you come into a longer management agreement. So there’s when you’re flipping it so that there’s benefit to the LH a that outweighs the partnership fee. So you just want to make sure that math is really in your favor. So we’ve if you’re gonna do it by 5% and the break even points two and a half years, it’s a five year commitment or something like that writing.
Speaker 5 34:48
You’re fortunate to have the time plus
Speaker 2 34:54
so I want to move back up for a moment to I am I’m inserting page numbers right now for the final version, because I’m already needing it. So on the page where we’re breaking down the calculation methodology, I skipped over a comment there. Katie recommended that we look at the cap rate that we put in here, this cap rate is not set to change for the policy. It’s it is what it is. But recent economic conditions have changed enough where the cap rate might be different. I tried to look it up is a little out of my wheelhouse, but it seems to be all over the place. I saw 4%, somewhere in 7%, somewhere. So I was going to ask this group, if anybody has the expertise, what a good source would be to look that up on a consistent annual basis, or if we shouldn’t even consider updating the first basis.
Unknown Speaker 35:54
Does anybody I don’t know what that’s about. That’s like a whole
Unknown Speaker 35:58
technical degree.
Speaker 8 36:00
So on the lending side, we’ll be looking at an appraisal to the appraiser identifies a cap rate just based off of market conditions for recent sales. So they’ll take the sales price, they’ll get an noi for the property, and they’ll back into it, and they’ll do some average and adjusting. I don’t know if there’s a national source, and you wouldn’t want to use a national source. I don’t know that there’s a Colorado source. That is an actual reference. It’s a point in time.
Speaker 2 36:25
Yep. So this was put in at the recommendation of Sarah Bock, one of our our tax credit finance consultants, and that’s kind of like an average overtime. And so I think we are in a more extraordinary financial state of the world today than you know, two years ago and this was the wealth that was extraordinary in a different way. But should we look at changes annually? Or do we think that change is enough to make that even worth it?
Speaker 7 36:56
I would say you want to look at it with every every deal you don’t put 5% and you just say cap rate based on market Yeah. Yeah, and then you go from there because you can have it especially since you’re already seeing it scattered all over the place.
Speaker 2 37:20
So that come through the appraisal or the market study or both feel like it’s in the market study as well.
Speaker 8 37:26
It might be the morning so it’s certainly an appraisal the problem with it if you pull it from the appraisal the timeline to where you have this negotiated is right prior to having the appraisal unless you unless you’re working
Speaker 2 37:36
well right that’s in the home for example, we have a cap rate is there but it’s taken land so it’s
Unknown Speaker 37:43
not the same as multifamily building
Speaker 7 37:47
I get putting a percentage and making an annual as we were getting like steals monthly, monthly monthly, but I think it should be for basis.
Speaker 2 37:59
We always struggle with that if they can’t as they’re preparing a pro forma before they know they’re they’re trying to gauge whether this is a deal worth doing. They won’t have that much detail early enough
Speaker 5 38:14
me when I talk to Western states to see if they could look at the site plan and give an estimate and they go through their appraisal process and see if there’s a way they can come up with
Speaker 8 38:35
I can look through a recent appraisal to see if there’s a specific Index published index that we can look
Speaker 2 38:41
at. And then I when I was researching, it does seem that there it’s not in Chapter doesn’t provide any specificity but there are other states out there that do provide like a light tech specific cap rate because I assume that would be different from typical family resources and a little bit
Unknown Speaker 39:11
okay, we’ll dig in on that one.
Unknown Speaker 39:25
Okay, now going back down
Unknown Speaker 39:33
you sold something
Speaker 2 39:39
we would also pull our recent market studies from high tech deals in the city and see what they don’t say anything really very much. They might not very much. If it doesn’t vary much then I would be in favor of keeping it simple and looking at it like every five years or something. But maybe it’s not worth looking at every deal or every project if it really doesn’t vary that much. But we’ll see what says. Okay, moving back down. So we’ve already gone over the property manager benefit. Okay, the last large chunk of red lines that you see in here, this I want to play with I didn’t have time to do it before this, but this is a term that Ben from Ryan cave added in our Zinnia deal, and it it seems extremely legalese. And so for a policy, I want to play with it a little bit and make it a little more easy to understand. But generally, it’s just talking about reviewing every three years making sure this is still worth doing, etcetera. You have to determine financial viability, making sure that debt rated debt service coverage ratio was good just protecting Ellijay in case this property takes financially so let me know if there’s any questions on that I’m certainly going to make it not sound like a legal resolution
Speaker 4 41:09
because you wouldn’t even negotiate the more the nitty gritty details okay, but I think just notification that it will be reviewed every three years compliance period
Unknown Speaker 41:29
and I think you should increase your consultation, escalator assumption, okay.
Speaker 2 41:43
And again, the examples that we reviewed and when putting this together it’s all over the board, some do a high upfront fee low long term fees or some switch it just what are we trying to do with it
Speaker 2 42:11
there any other thoughts or comments on this, we will plan to take this to allergy board at the October 17 meeting.
Unknown Speaker 42:32
Short, so we’re getting into the fun parts. So I’m gonna let everybody after the meeting, you know, come over here and
Speaker 2 42:44
and review these as much as you want. I’m just gonna set them out. You can see what our proposed floor plan is, this is four. This is this floor right here. So the main change really is just what we’re going to do in this room, it’s going to stay the same shape and everything but we’re just trying to make it a living space accordion fold so that you could separate them and use them for different purposes if you want. We’re going to try and reuse the tables and chairs as much as we can probably be upholstered make it all. Nice floral. Um, and then our fitness room is moving up here, which you’ll see why when we go through the second floor, laundry room, so they’re redoing the kitchen. This is huge. So the kitchen would not be a commercial kitchen anymore. It’d be a typical residential multifamily kitchen and this wall around the corner would be opened up so there’s a nice countertop for potlucks and things and it’s just gonna be much more usable. The residents don’t even it’s just shut off and totally unused at this point. So I’ll let you browse lists after since our unit layouts, just some examples, just gonna be putting these around it just really shows what flooring will be carpet and what would be laminate Vinyl tiles would look outside landscape markets. We got a new patio and barbecue area here. There’ll be a barbecue this is like a pergola type structure with some benches and rearranging the parking and the dumpster area so it’s not all we got more ADA parking and then moving the dumpsters was not right there right next to the patio and next still be around
Speaker 2 44:51
second floor so we are adding extra laundry up here and adding a bathroom because there’s no public restroom on the second floor. And so that’s the major change here, or keeping these two common spaces, but just making them more purposeful as a game room and an art room. And we like Rison, the first one. That’s the third.
Speaker 2 45:32
This kind of shows I thought we had blown up one, thank you. But in the lobby, what we’re going to do is the atrium is going to stay, the two largest trees have to go, because they dropped staff and nobody will sit under them. And so they’re completely unusable. Nobody uses them at this point, we’re going to make a new ADA ramp that goes up, it’ll be nice and open, we’ll be on a little coffee bistro over here. And it’ll pop out so that you can sit in the atrium area a little bit elevated, just feels like a nice place to hang out. And then still have the two seating areas here. And then rearranging the office to add a conference room. And just making this a lot more usable. So feel free to come and check these out. And then these are our carpet and flooring samples and paint samples that we were considering. We presented these to the residents here a few weeks ago. And the feedback was generally great. I’m really it was trying to be warm and homey and kind of more of a classic look not to modern. And then again on the outside Make, make it fit in with historic downtown. Trying to get red brick by staining it, make it not pink makes it look like it’s old, even though it is built in 1990. So I just encourage everyone to go check those out. Some of those carpets will be in different areas. So the hallways get one. This gets one the unit’s get one, I can’t remember off the top of my head, which one goes to which right now. But it’s generally just to get an idea of what’s what’s coming. I wanted to go over some of the major design decisions that we’re working through right now. So the biggest one is solar panels. This is a huge effort. As it turns out. So there are solar panels on the zooming. Now, they are not photovoltaic for for energy, they are for a water heating system, that technology they were put on about 2007. The technology is already totally out of date. They don’t function right now. But we’ve got the mountain. So we wanted to look and say, Could we replace those with photovoltaic to offset the energy here, and is that worth doing. And so this has been a very complex decision with wait loads on the roof and type of roof. And we have because this was originally set up to be a typical multifamily apartment complex it was we have 72 different electric meters downstairs, which means every single time our meter readers come out, they have to read 72 Different meters. And the meter fee for reading for each one is $14 per month. And so that is $12,000 a year that we pay for basically no reason we don’t need to. And if we put solar on, there’s not enough room in the mechanical room to hook up 72 meters to the solar. So we would have to convert to a master meter, which is complicated because the lead time is over a year to get the equipment to do it because of supply chain issues. And we’d have to shut down the power for a period of time to get them all on that. But in the end, that would save us $12,000 A year on unnecessary fees that we really don’t need to pay because other charity pays all the bills, all the utility bills for these residents. It’s not like every resident pays their own anyway. So if we’re paying if it’s one bill, it’s actually 72 bills that we pay at once, then why pay that fee. So between that and the offsets from the energy that the solar would produce? It looks like we would save the property about $25,000 a year through the life of a solar panel. So it’s worth doing as long as we can afford to do it. You’ll get a 30% tax credit. That’s a whole process in itself. But this is just an I just want to highlight an example of how all of these design decisions all play together and how complicated it gets. But it looks like we’ve come to resolution that the solar is feasible. We can afford to do it and it’s worth it. So that’s the plan. Pricing we’re waiting pricing next, but we at least have we know what the solar pricing would be, but overall pricing for the project to make sure we can afford everything and that we want
Unknown Speaker 50:10
to apply to the county for sustainability.
Speaker 2 50:14
Yeah, we’ve been working with LPC two on how that would all fit together. So there’s still a bit out there for stuff. But I’ll make a note to make sure that that is certainly on the radar.
Unknown Speaker 50:25
The tax credit work with the nonprofit status you saw it.
Speaker 2 50:29
So it’s actually not a nonprofit. So the general partnership is not officially a nonprofit. lhsa is not officially a nonprofit. So there would be the tax credit is anticipated to be 30%. Or there is a new program out there, we’re going to apply for an additional 20%. But nobody’s gotten through it yet. We don’t know how how the timeline is or how feasible it is. All right. What were you thinking specifically? What?
Speaker 8 51:02
Well, I just I guess I didn’t realize I was thinking that there. There was a nonprofit status. And if it’s a federal tax credit, then you don’t get any benefit, because you’re not paying taxes. But what if that’s not the case, and that doesn’t matter.
Speaker 2 51:17
So there really does extend the tax exempt status to the property. But for construction, but the tax credit does end up. Yeah, it’s with the investor. And then it comes in over time, because we only get the tax exempt sales and use tax at least up front. So solely on us, it’s very weird. It’s It’s its own tax credit system, or that layers with the light tech. It’s been around for a while. Standard, but I don’t know the exact mechanics of how that works.
Unknown Speaker 51:55
So we still we still have an individual meter for every you know, the idea is to get the master meter. Okay, so
Unknown Speaker 52:04
I’m gonna have to figure out how we’re going to be struggling.
Speaker 5 52:10
Because we already have projects that are master major. Well, yeah, so I just need to talk with Becky on that one. But I think it’s pretty. So after just go ahead with Bill.
Speaker 2 52:26
So that’s just one example of all of the decisions at play. There’s conversations lying around constantly about everything. And there’s plenty of other idiosyncrasies that if you want to have a conversation offline, I will tell you about there’s plenty of stories. Weird water, like this whole building is on one water shut off. So if you have to fix one person’s like, plumbing, you have to shut the whole building up. So we’re trying to change that to help ongoing operations a bunch of things. So we’re in the fine tuning phase of design, we walked the building with a ton of subcontractors on Friday, to start getting through pricing, and start really making we got our priority list. And we’re going to be working on once we get those pricing elements in really starting to make some real decisions about what we can manage to include. And that will also determine the schedule. So getting the subs with their pricing, they’re going to tell us what their timelines are or availability. And what we need to do next is nail down the relocation schedule and get back to the residence as soon as we can. So by October, we plan on presenting the residents exactly what that’s all going to look like. We do have a relocation firm that’s already gotten move estimates and hotel estimates. And so we’re just waiting for that schedule to put it all together. And then the last thing, is there any design questions? I’m going to talk about the loan forgiveness next. So the original lie tech deal from 2006 on this while he bought the property there, FHA received for funding sources that had been loaned into the village place partnership. One was a city affordable housing fund loan that has been lhg has been paying that on behalf of village place, primarily for the past since 2011. And so we are requesting to city council on September 26. If they would consider forgiving the remainder of that loan. It was a $600,000 loan 2% interest. lhhs paid 440,000 of it and we’re requesting them to forgive the rest. The reason? One reason well wonder is it is that’s just more money that the project would have to pay that week. wouldn’t do other things with on site. And number two, the city is already providing a new CDBG and affordable housing loan. And so if they denied the RE forgiveness, we’ve just the project will come back and request more of new loans. So it’s kind of a wash, assuming Council approves that on the 26th. Then on October 17, we will ask li che to forgive the four funding sources that they loaned and into the project. So one is that same affordable housing loan, so FHA received that from the city at 2% interest rate loaded into the partnership at 3.5%. And so there’s a couple of options for that. They can forgive all of it, they can require repayment for all of it, or they could require repayment for just the portion that FHA fronted on their behalf. Either way, the project would have to pay for it. The project has $350,000 slated for loan payoffs, so if so that would probably go there. But any project anything, not paid by the project means more features we can include. But if lhsa doesn’t get paid back, at least what they fronted for the project, the city that LA cigs general funds, it’s just a, which which basket Do you want to pull from. And then the three other sources were grants to LH j. So they’re really not intended to be paid back. But you know, I’m in the partnership, because that’s what you do for bases and such. So they will be requesting to forgive the remaining balances of those three, which are quite high. So those will be coming to the board in October as well.
Speaker 8 56:39
On your grid, so the top loan, we say principal and interest payments of 202,000. So that’s what the partnership is repaid to LJ but not what Oh, ha.
Speaker 2 56:50
Yes. Yes. So the partnership has paid 200 to two le J lhf. pics for 47 off the top my head to the city?
Speaker 8 57:01
Is that what you do want it to go to to show or do you want the amount that’s actually been repaid to the city to show
Speaker 2 57:08
I want this to show because LA chain. So it’s the same people right? But the city is going to consider the forgiveness for the loan more than PIPA la JS made work for you by La J board has to consider configuring the loans that village place associates Odelay check which is 200.
Unknown Speaker 57:28
Okay, I assume it to
Speaker 2 57:30
the way that they did this in 2006 is certainly not the way we would do this today. Makes it very confusing.
Speaker 5 57:38
Your basic routine was the way we used to do things. Probably starting prior to three years ago, we were talking.
Speaker 2 57:48
Yeah, if it’s a loan, if the city loaned the project, something it would go straight to the partnership not to really check only grants should go through le J and they loved it. That makes it a lot simpler.
Unknown Speaker 57:59
I thought this was the requested sitting
Speaker 2 58:03
on a separate one of numbers. That’s why it’s confusing. So if there’s any any advice that you would provide to the board, as I consider this, I can put that into this apartment. The real question is, is the affordable housing for them and what amount if any, should be paid back? The other three are much more straightforward. But we will be providing three options to LIG board on the affordable housing.
Speaker 1 58:45
So I have just found a really strange question. I know that you said you’re taking out two trees out front. What are you wondering?
Unknown Speaker 58:55
Oh, sorry, in the back.
Speaker 1 58:58
Like a tree with the trees in the front not only know who they belong
Speaker 2 59:01
to You mean the outside trees are right here. Okay, we’re not taking out any of the outside trees, just the two large trees inside the atrium.
Speaker 1 59:09
Okay. So whatever that drops, which I think is flower, is there a way for somebody to spray those early in the spring before that flower comes on because once it drops, it is all of a sudden safety concerns. So it’s,
Speaker 2 59:24
it’s it’s the draw, but it’s also that those trees are so large that they are a threat to the foundation. They’re too large to be inside the atrium at this point and plus one of them has to come out to make the ADA RAM but all the other trees are staying the smaller ones so it’ll still look like Adria. It’s just the two trees and we’ve been prepping the residents on this for a year. And then I think we ran
Unknown Speaker 59:49
into issues.
Speaker 1 59:50
I’m talking about the trees that drunk and I think it’s the flower. And I always call it a word because that’s what it looks like. But that’s really a safety concern. Oh It’s actually you know, drops everything right here where people walk,
Unknown Speaker 1:00:05
that’d be a forestry question.
Unknown Speaker 1:00:07
Yeah. Well, I asked them and they said it was Ellijay. Yeah, that’s kind of that’s, yeah, that’s
Speaker 5 1:00:19
an ongoing battle working on this project, but we can just ask them if there’s anything we can put on it.
Speaker 1 1:00:26
Yeah, just kind of prevent those things from falling. Because I’m pretty sure some louder,
Speaker 2 1:00:31
we are going to rework the agreement with LD dA over maintenance of this area, as before, November, it’s our plan. Because there’s just confusion, it’s very old. It’s from 1989, the agreement that says who will do but it’s not really reflecting actual practice, everyone is confused. And so we’re gonna rewrite it, make it more clear, and consider what to do with the gazebo, which is a special project of Sara’s because that’s caused the public safety concerns.
Unknown Speaker 1:00:59
So you’re getting rid of the word. Flow, I can follow the forestry.
Unknown Speaker 1:01:07
Syrup? Sure.
Speaker 5 1:01:08
I think, you know, part of it, is it really getting into the property lines? So the trees adjacent to the building? I think we know are the Housing Authority trees, the trees out here are different question. And then let’s say there’s nothing to put on the trees and you wanted to take them down, we have to go through a process facility entries. And if you don’t get five,
Unknown Speaker 1:01:38
you might have to replace it.
Speaker 2 1:01:40
So what’s interesting, and this is what the CWD is dealing with as well. The property boundary is actually about right here. The edge of the building is over the property boundary. Same with our little media next to the building and landscaping. That’s why title is so our survey, monkey. And that’s the same for every property on this block. The buildings are all shifted over the property lines. So that’s why we coordinate with LTD is kind of what do you have in your wheelhouse what we have in our wheelhouse we kind of share the responsibilities, even though it is city land over there. That’s a fun one. We’ll be hearing more about it because it’ll be
Speaker 5 1:02:29
downtown and old town. It’s not fun for us. I mean, we have an older homes to get in the historic east side and West Side.
Speaker 2 1:02:43
area. Okay, so would you if I was going to report to the board, what the Advisory Board would recommend on this one with a supportive housing fund loan? Would you lay out the three options for item one? Would you forgive the entire balance due which is actually 163,000 because of the interest rate? Would you forgive all that 350,000 Because that’s what the project has budgeted. And recall that Lhh has paid lmha has paid $243,000 on those places behalf to the city when it should have been those like staffing. So for requiring that $243,000 be paid to LH a to cover the amount that they’ve rented
Speaker 4 1:03:48
get le Jason and then leave some money in the emergency room. Any other thoughts recommendations?
Unknown Speaker 1:04:00
Alright, that makes sense
Unknown Speaker 1:04:07
middle ground get some money. She wanted more
Speaker 2 1:04:19
but we’ll see when the board says okay, I will note that in this memo that I update. Okay, now that is everything I had on the list place.
Unknown Speaker 1:04:30
Okay, next is registered quality of life. There’s anything
Unknown Speaker 1:04:36
nothing from staff and then
Speaker 3 1:04:47
a whole bunch of us so I’ll start the occupancy solely on like five, maybe six even fluttering back and forth. do anticipate drop for this month we’ve had quite a few move outs out have residency for timeshare and if you’ve passed away and some of you expect that we’re working quickly to easily have quite a few these my our admin assistant came back yesterday since she’s what we used to call the waitlist before we were when she was on maternity leave she came back yesterday so she’s going to start calling again so hopefully we can get these these frequently asked meadows we still have three minutes now to bend down format to our very low we’re just waiting for the cleaning reports those ones just had to have a bath when each had to have a bathroom and one had to have the locker room as well ripped out so those should be easy put back together. It’s not the whole unit. Due to the one unit that has been down for an extended amount of time we signed a proposal for the ductwork and the drywall so I’m just waiting for the complete scope and insurance paperwork so we can start moving on that one in getting that one rebuilt in house. Aspen senior we have the end of the two vacant or once been rented for the end of this month Fall River three vacancies but we’re calling the waitlist on this part so no vacancies wise one vacant and that was just that was our last eviction over there. The unit just as we started turning the unit ran into interesting things at the globes on the lights were super glued on we had to rip out the whole light Yeah, the outlets were double sided tape on and a lot more work than we anticipated when we took possession the suites we have the five Vegas tomorrow down units for math and then the two LH in the two llj for image p but we’re working to sell those I know we have I believe all three rented now when I talked to Ruby and Andre yesterday. Firewood there is a typo there we have two units and and both of those are meth units that are completely gutted. Had two different contractors walk last week and we’re just waiting on those bids. And village place we’re holding all units here and we still have the one unit down for that
Speaker 3 1:07:27
gonna move on into the property updates just a few things that happened because I picked these up last week. Metropolitan State University who we paired with earlier this year to do the nutrition training, they’re going to start back up on the 27th of this month and that’s going to be for Aspen, senior Aspen neighborhood heart show in the lodge. So they’ll be bringing their nutrition programs into the residence and doing multiple things that love around cooking classes nutrition and just other fun activities. A lot of senior services will be bringing their peer support groups into all coffee conversations in September and October to kind of introduce what that team does and how it can help benefit the properties. And then last week, cat and I were met with Kaiser Permanente Foundation, which is a nonprofit arm which they are looking to bring one activity class to every property every month, starting next month, and there’s a soother nonprofit arm they can’t sales they can’t pitch KP they can just do activities and then if we want to do a sales pitch thing we can or the residents have to see them outside of that activity. So lots of fun stuff happening there. Just a few other fun things most of these are same things we have a offer for manager Apple sweets. relief for who is our Housing Choice Voucher specialist will be transitioning to manager at the end of the month for village place in Athens. Our new assistant manager started yesterday. I as the senior I’m working on a partnership with Wild Plum on the side to start doing intergenerational activities with the seniors at the Aspen senior and the kids at wild plums are right next door to each other. And while hum does use us as their emergency shelter if there was ever to be a disaster so we figured it might be a good relationship so the kids feel that that place is safe and they know that they can go there and then the seniors aren’t why are these kids running around they know the kids so great idea.
Unknown Speaker 1:09:42
And then
Speaker 3 1:09:43
see have a lot of inspections and audits the suites had one last week they have one today they have one tomorrow. I have Spring Creek and small river both having mortgage inspections. Those coming out with your village place next week. Very busy Have any questions on the property?
Speaker 6 1:10:10
Right. First of all, Michelle golden came out to extreme Creek in Fall River, just a few weeks back for coffee conversations. Very, very good turnouts and we are hanging are working on hanging the back maps on every floor for the properties that don’t have them. So that was great. That detector update, we did get a quote for three that we may be purchasing a new circle level staff on that. The current detectors are still reading. I mean, they definitely were like we talked about their new ones that are coming in and have a different battery system. And we’re going back with questions about hardwiring. When will that happen? And lastly, the Zeebo. I have due to one, you need to get a scope of work done for that because you were asking two things, either a total removal and the vast gorgeous removal of the the Zeebo and maybe repurposed the area with maybe our public places or something like that. So, working on the scope of work to get that done to get the bids out and do, I did contact three different contractors, and they all want to bid on it. So that’s that. And calls for service. You know, sweets is always number one for us. But it’s been pretty quiet. And we just recently recently had someone released from jail that we thought was going to cause more problems, but has been super quiet. And that’s a good thing. So everything else is pretty status quo. Questions for me?
Speaker 5 1:12:15
Alright, so, for me, we did a city budget conversations. Kendra and I are about store Lhh budget in the next week or so. Next week. One of the things that we did with the City Council that’s related to the lmha work is when we were looking at all of the projects that we have going on right now specifically looking at Katie’s workload in terms of Chrisman, oh Zinnia. And then the Senate and looking at staffing loans, and then looking at the funding sources that are available in the state for affordable and attainable housing because Katie does both. As we’re looking at this, we talked to the council last Tuesday as part of the Affordable attainable housing fund budget presentation and specifically asked them to adjust the administrative cap from 10% to 20%. So we can hire more staff to actually come in and take these projects on, and then give us some capacity to go for the state funding for all of these projects. The council did say yes to that. And at the same time, I asked for direction to allow me to use on the city side. But it does impact the Housing Authority, cost savings or dollars that we have in the organization to go ahead and fund those positions. So we can start the hiring process now as I started looking for the next year. And so that’s actually really good news for everything that we’re doing here because it gives us the ability to start turning more projects on a continual basis. What we didn’t say is, in addition to the ascent project and the tax credit process, we’re also part of partnering with the developer on third in that way, and the biotech crosswave two projects. And if that moves forward, willing to be involved because will also happen. That was one of those where we negotiated the management responsibility for that project. And then if the voters in November pass, the recreation package that is put forward to the community. That joint project with the city and the Y actually will include 100 affordable housing units of which we’re going to be involved in that have to work through the same white tech process. So a lot of projects in the hopper led to the increased staffing to start helping us manage that In terms of the budget, I know, we’re still looking at some positions that we need to deal with this budget process. In addition, you know, one of the things that this board worked on in conjunction with the City Council was the via project network needs. Really interested in that, we are going to be able to carry some money over next year from what the city council allocated based on current projections, that can drain out and talk about how we start including that ongoing budget. So that, you know, it’s just a permanent fixture in terms of the services that we provide to the residents of all the properties. One of the things that’s helping us in this budget process is making good final transfer this stuff up. So as we look at the operating budget for next year, definitely factoring that into each one of the properties in terms of, and that’s actually making increasingly significant difference in the ongoing operating revenues for properties, it has worsened. The following are, we still need to get some more equipment. And that’s just based on right now the supply chain, we have a second truck identified, and then the manufacturer cancelled our order for the other trucks. So we weren’t able to do the switch of the city. As we looked at the budget, generally, I don’t know if we’re gonna be able to do it this year or not, Molly and I were talking, in addition to some of the staffing issues, you know, really, within the next few years, trying to create an assistant director position that will slide in and do some of this work, because the work that Molly’s doing HCI and other things, with Prop 123 funds and everything starting to come into play. We’re seeing that work start to really increase. And I’m managing people workloads right now in terms of what we can absorb and how much and try not to constrain the pipeline of housing. So I did have that conversation with the City Council as part of my review, and kind of what’s on the horizon in giving, you know, now or so that right, like right now the ball is going underwater at certain times without the underwater dunes. What’s happening then? And just needing to provide some relief to some folks. I think that’s all I
Speaker 2 1:17:45
know, we’ll be going over the budget in more detail on the October 10 Advisory Board meeting, because that will also go to the board on October 17. When we get more detail
Unknown Speaker 1:18:02
is there any other business
Speaker 1 1:18:03
as far as any of the advisory council members? minutes? I just have one, which came up at another meeting that I attended. And I think it’s probably a federal issue. But somebody was concerned that the rate is being used for the AMI or for the 30% or whatever it is. When’s the last time that that was looked at? They think it’s not exactly accurate.
Speaker 2 1:18:30
So you may know rents are just generally in housing one word,
Speaker 1 1:18:35
or Santissima brands but yeah, it’s kind of a general time.
Speaker 2 1:18:38
So that’s the federal standard. HUD uses 30% of your income and says that that housing is affordable to you if you don’t spend more than 30% of your income for city programs. So this is not like
Unknown Speaker 1:18:52
the question is very interested in AMI
Speaker 2 1:18:57
that MX set annually by high 30 equate 30% Ami or 30% of your income. Da Am I Am I yes at nearly yes
Unknown Speaker 1:19:09
it’s it’s depends on the County. County Bullitt County has one of the highest so the good news is you can make better more money and still be very present and qualify for
Unknown Speaker 1:19:25
assistance. Thank you
Unknown Speaker 1:19:30
very much. Really said it wrong.
Unknown Speaker 1:19:34
Okay, most gender.
Unknown Speaker 1:19:37
We’ve never been early and a lot of time I guess
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