Consider and take appropriate action to approve resolutions related to participation in various capacities in the construction, financing and operation of the 7333 Bluff Springs Apartments development, and other related matters. (Commissioner Shea)

Staff Report & Agenda Item Details

The Board of Directors of the Corporation previously considered resolutions on July 16, 2025 and May 19, 2026 related to this proposed transaction, which would be a workforce housing deal with RPM Living Development and does not involve the issuance of bonds or tax credits. In order to obtain the ad valorem tax exemption, the Corporation, through a wholly owned subsidiary, would serve as the landowner and lessor under a long-term ground lease. <br><br>The project consists of the construction, equipping, and operation of an approximately 287 unit development located at 7333 Bluff Springs Road; Austin, Travis County, Texas 78744 and 2100 Patsy Parkway; Austin, Travis County, Texas 78744, or adjacent thereto, to be known as “7333 Bluff Springs”. At least 50% of the units will be available for families earning less than 60% of the area median income and 40% of the units available for families earning less than 120% AMI. Rent charged will not exceed 30% of the applicable AMI, provided that the rent charged for the 60% units will not exceed 80% of market rental rates for units with the same number of bedrooms.<br data-pasted="true"><br>A detailed underwriting assessment prepared by First Housing Development Corporation of Florida and reviewed by the Corporation’s financial analysts, Hilltop Securities, is included as additional back-up for the Board’s consideration. Generally, this underwriting assessment meets the requirements in HB 21 (now codified in Chapter 394, Texas Local Government Code), and confirms that, among other things, based on the projections contained in the report, the rent reduction at the Apartments would not be less than 50% of the amount of the estimated ad valorem taxes if there was not an abatement. In reaching this conclusion, First Housing noted that “in order to achieve a rent reduction of at least 50% of the abated ad valorem taxes, First Housing is projecting that a 20% discount to market on the 60% AMI units will need to be charged.”   RPM has also agreed to the following public benefits, among others: (1) the income restricted units have the same unit finishes and equipment and access to community amenities and programs as market rate units, and (2) the restricted units are disbursed across the unit mix on a pro rata basis.  The underwriting assessment was posted on the TCHFC website as required by the State in advance of the May 19, 2026 meeting.  A copy of the underwriting report and the public benefit analysis by Hilltop Securities, provided with the May 19th agenda item, has been attached this agenda item as well.  <br><br>The resolutions approve the final loan, ground lease, partnership/equity, and construction documents, which have been updated to comply with the new requirements of HB 21.