Buncha legalese for those interested.
RECOMMENDATION:
It is recommended that the City Council:
1. Conduct a public hearing to allow citizen comment on the application of FW Katy Station, LP to the Texas Department of Housing and Community Affairs for 2018 Non-Competitive (4%) Housing Tax Credits for the tax exempt development of the Katy Station Lofts, a proposed mixed use, mixed income multifamily tax exempt development to be located at 200 West Vickery Street;
2. Waive the requirement in the Housing Tax Credit Policy for review of applications to the Texas Department of Housing and Community Affairs that requires the Katy Street Lofts to have ten percent of its total units dedicated as Rental Assistance Demonstration units;
3. Adopt the attached Resolution of No Objection to the application by FW Katy Station, LP to the Texas Department of Housing and Community Affairs for 2018 Non-Competitive (4%) Housing Tax Credits for the Katy Station Lofts, a proposed tax exempt development;
4. Acknowledge that the One Year, Three Mile Rule applies to the Katy Station Lofts and agree to specifically allow the construction of the development and an allocation of Housing Tax Credits for it; and
5. Determine that the Katy Station Lofts are specifically allowed to be located in a census tract that has more than 20 percent Housing Tax Credit units per total households and affirm that the development is consistent with the City's obligation to affirmatively further fair housing.
DISCUSSION:
FW Katy Station, LP is applying to the Texas Department of Housing and Community Affairs (TDHCA) for 2018 Non-Competitive (4%) Housing Tax Credits for the development of the Katy Station Lofts, a mixed use, mixed income multifamily tax exempt development and has requested a Resolution of No Objection from the City of Fort Worth. TDHCA requires Housing Tax Credit applicants to provide a Resolution of No Objection from the governing body of the jurisdiction in which the proposed development will be sited. As part of these TDHCA requirements, the governing body must also conduct a public hearing for citizens to provide comment on the proposed development.
The Katy Station Lofts will have approximately 236 units of workforce and market rate housing. There will be 116 market rate units, with the remaining 120 units set aside for households earning 60% or less of Area Median Income (AMI), 15 of which will be Rental Assistance Demonstration (RAD) units. The ten story residential building will have one- and two-bedroom units and will include a community room, equipped business center/computer center, controlled gate access, swimming pool and fitness center.
The Katy Station Lofts is part of a Transit Oriented Development (TOD), located within 500 feet of transit. The mixed use development, located in the Central City at the corner of West Vickery Boulevard and South Main Street, will also include a new six story hotel, retail space, a daycare facility, and a new six story parking garage for residents, customers and transit riders. The total development cost is approximately $94.2 million. City TOD Bond Funds are one possible funding source in addition to tax credits, Southside TIF funds, Council of Government (COG) funds, tax exempt bonds and private loans.
On April 19, 2018, the Board of Commissioners of Fort Worth Housing Solutions (FWHS) approved a partnership with RMGM Developers, LLC in which FWHS will be the sole member of FW Katy Station GP, LLC, the general partner of FW Katy Station, LP, the entity that will construct, own and manage the Katy Station Lofts. The FWHS will act as the general contractor. The Fort Worth Transportation Authority, now known as Trinity Metro currently owns the land on which the development will be sited and will lease it to the partnership under the terms of a long term ground lease. While the residential building will be exempt from property taxes, the retail space will produce sales tax revenue and the hotel will pay property taxes as well as hotel taxes.
FW Katy Station, LP and FWHS are requesting a waiver of the City' s Policy for Review of Applications to TDHCA for Housing Tax Credits (HTC Policy) (M&C G-19149). The HTC Policy requires, for this development, a set-aside of ten percent of the development' s total units as RAD units in order to receive a Resolution of No Objection from the City Council. The RAD unit set-aside was originally added to the policy in 2016 order to assist FWHS in converting public housing units to long term, project-based rental assistance for its clients that it needed to move out of aging public housing properties (M&C G-18664 and M&C G-18831). However, FWHS has informed Staff that with the 15 units in this development, it has substantially completed its requirements for one- and two-bedroom RAD units. Additionally, TDHCA requires a Debt Service Coverage (DSC) ratio of no less than 1.15 for project financing. The 15 RAD units result in rental revenue that sustains a 1.16 DSC ratio. Increasing the number of RAD units to 24 in order to meet the ten percent set-aside reduces rental revenue and results in a DSC ratio of 1.14. The residential portion of the development cannot be funded at the lower DSC ratio.
TDHCA's One Mile, Three Year Rule requires the local jurisdiction to vote specifically to allow the construction of a new development located within one mile or less of a current development which received tax credits within the last three years. The Katy Station Lofts will be located within one linear mile of another development serving similar types of households which received an allocation of Housing Tax Credits or private activity bonds for development on July 27, 2017. Staff recommends that City Council vote specifically to allow the development of the Katy Station Lofts.
TDHCA rules also state that if a proposed development will be located in a census tract with more than 20% Housing Tax Credit units per total households as established by the five year American Community Survey, it will be ineligible for Housing Tax Credits unless the governing body of the jurisdiction votes to specifically allow it and also submits a Resolution to TDHCA stating that the proposed development is consistent with the jurisdiction's federal obligation to affirmatively further fair housing. The Katy Station Lofts will be located in such a census tract. Staff recommends that City Council vote specifically to allow the development of the Katy Station Lofts and approve the additional determination in the attached Resolution of No Objection that the development is consistent with the City's obligation to affirmatively further fair housing.
Following the close of the public hearing, Staff requests that the City Council waive the RAD set-aside requirements in the HTC Policy and consider the attached Resolution of No Objection to support the application for 2018 Non-Competitive (4%) Housing Tax Credits for the proposed development of the Katy Station Lofts. The development could assist the City in fulfilling its goals under its Consolidated Plan and Comprehensive Plan by providing quality, accessible, affordable housing for low- to moderate income residents and supporting economic development.
This development is located in Council District 9.