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Res 069-2024 Application of 2024 Housing Tax Credits for Acquisition of OPG Sun Valley Apartments 06/18/2024 Resolution No. 69-2024 Public hearing and resolution of no objection from the City of Wichita Falls for an application from OPG Sun Valley Apartments, LP. to the Texas Department of Housing and Community Affairs for 2024 Housing Tax Credits at 1315 E. Central Fwy., Wichita Falls for acquisition/redevelopment of property by developer Overland Property Group and NORTEX Housing Finance Corporation; and authorizing City Manager to enter into a Payment in Lieu of Taxes (PILOT) agreement. WHEREAS, the multi-family housing project, currently known as Sun Valley Apartments, located at 1315 E. Central Freeway in Wichita Falls, will be acquired by OPG Sun Valley Apartments, LP; and, WHEREAS, OPG Sun Valley Apartments, LP. has proposed a development for affordable rental housing of 132 units that will be located at 1315 E. Central Freeway in City of Wichita Falls, Wichita County, Texas; and, WHEREAS, OPG Sun Valley Apartments, LP. has briefed the City Council of the City of Wichita Falls on its plan for the acquisition and redevelopment of the Sun Valley Apartments in the City of Wichita Falls, Wichita County, Texas; and, WHEREAS, OPG Sun Valley Apartments, LP. has advised the City Council for the City of Wichita Falls that it has submitted an application to the Texas Department of Housing and Community Affairs for 2024 4% Housing Tax Credits for said complex, currently known as Sun Valley Apartments; and, WHEREAS, the City Council of the City of Wichita Falls is not objecting to the application of OPG Sun Valley Apartments, LP. to the Texas Department of Housing and Community Affairs for such Tax Credits. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF WICHITA FALLS, TEXAS, THAT: 1 . The Governing Body of the City of Wichita Falls supports economic reinvestment to help ensure continued, high quality affordable housing for its' residents; and 2. Notice was provided to the Governing Body of the City of Wichita Falls in accordance with Texas Gov't Code, §2306.67071(a); and 3. The Governing Body of the City of Wichita Falls has had sufficient opportunity to obtain a response from the OPG Sun Valley Apartments, LP. regarding any questions or concerns about the proposed Development; and 4. The Governing Body of the City of Wichita Falls has held a hearing at which public comment may be made on the proposed Development in accordance with Tex. Gov't Code, §2306.67071(b); and 5. The findings and recitations set out in the preamble to this resolution are found to be true and correct and are hereby adopted by the City Council and made a part hereof for all purposes; and 6. After due consideration of the information provided by the OPG Sun Valley Apartments, LP. and public comment, the Governing Body of the City of Wichita Falls does not object to the proposed TDHCA Application, and that this formal Resolution is recorded in the minutes of the City of Wichita Falls on file with its City Clerk's Office; and 7. The Governing Body of the City of Wichita Falls further directs the City Clerk to send a certified and true copy of this Resolution to the TDHCA - Texas Department of Housing and Community Affairs. 8. The Governing Body of the City of Wichita Falls further authorizes the City Manager to enter into a Payment in Lieu of Taxes (PILOT) agreement with OPG Sun Valley Apartments, LP. And NORTEX Housing Finance Corporation upon acquisition of 1315 E. Central Freeway attached hereto, which may be amended by the City Attorney. 9. This ordinance shall take effect July 18, 2024. PASSED AND APPROVED this the 18th day of June, 2024. MAYOR ATTEST: Ctu City Clerk Exhibit A - Location Map OPG Sun Valley Apartments, LP. ' III in SUNNYSI'DE LN_ 1 -11+._ BANDERA BLVD 4 •• is aSaR�°F' C LI I H 1 I MHR � I frIC �' — 1 HIGHWAY 79 US 287 W US 287 E ..... GC 1315 E.Central Fwy. CENTRAL FWY E _..7/././e- I•— ce I r t cr),1 : : r - 1 I - 't -- � Di l II -rx l= BANDERA CIR jl c l } , ssi DR iu I LI ce `� m I Lu 5F2 ' 1— in mak IS SANTA BARS— s SF1 to GLENDORA DR L--_- r- I Feet 0 150 300 600 900 1,200 1315 E. Central Fwy. N OPG Sun Valley Apartments, LP. Legend Location Map Q Subject Property bra ��rm rw•��rid�-�*•��+�*A�� CITY 4F W9CFIITA FALLS,PLANNING Dh'I�ION «, v. w w-•mn sw,*+-........a,a IMP PRODUCED BY.Cadric Fw w+..r.+..w. DATE PRODUCED:June 2024 Exhibit B - Aerial Site Plan OPG Sun Valley Apartments, LP. We" R " �..., �q �t4@y �ti .,. • RFC .. , 12013 A' ,, A. :, )1 "pf, _ri 1 ,.. ,,, .., . , _). ...., ,. _ Viti , 1 Th-°'' ..ii z —_ _ US 287/E - _� 1315 E Central Fwy ' . �. i, CENTRAL+FW Y E --,.._ -44101.411 • :327IY F z ( 27 , in 1 BANDERACIR;, r. _. .xa • Sow 9 ':. . 4 ¢,;.YK_TJ - ram; u.6.12. 2 y3 Eery ) 1F G _ C6 M , r yDE � . - -, 2998` �pF�` ax A,n ta3 "Paa '. 2997 "98',7d 4 1 _A_ YFf _ 0 100 200 400 GOD 800 Feet 1315 E. Central Fwy. OPG Sun Valley Apartments, LP. Aerial Map .'...ra.n n..�.®...:.a.n..°ao.n CITY OF WICHITA FALLS.PUNNING DIJISCH e.g.i ,-wn. ..F.. •..a�w rn.waR,==. MAP PROOUCED[5Y:Cedric Yw DATA PRODUCED.June 2024 w..m au..... IMAGERY NDYE.lcin.Relrp AhN2722 Exhibit C — Photos/Site Plan Existing Sun Valley Apartments I ii H 11 II Idi jllil"1 1 , , 1 I i d _.. lllr",4111 /" /- TTTT7-1f:1"111111111I-I1Il111Il1111ii, -—'—-—--- ---- I 0 ._...-..., sill y l�I-- i �- d I `61 . .. � a ,±61 _ _r 1 i ,, , Er -.- . IR fir-' , r44-----Oc ', �; 1' Q: .t x 3s• �.. .1 Xpil r,.,+:.—'—n 7r,r''' ,_,—.1..!„. T- ____ - --ii -\ L ;. ffi Idr T 71--—,--_ W — 1 I 1,_I I '''''L-'i..4•-11..„,'•,,J1 1 -- ==_, _z::::: \77,13.7 ; 4r1r — �- II A SITE RrN Exhibit D — Sample Photo/Floor Plan OPG Sun Valley Apartments, LP. . VI; i 10-- , S4 r __.,... .k '---..„1.4.4rr.1-,,t001071.-Al• 0 '.".20,'''''....::`‘,. ..', ..:^1.,''. ;,::^',... ti • ,- ..- ,....::,..,: -..;.,..,..,_ 1'i, 'i.VA ' , T* ..,, '•.: , . .,':::r.:.',.':'r, .:, III ..... ( 1 1 •' • CEL/ • r.zu i : _I--- . I, ...11‘1.1.4%. s.--:•01....!. _ n L . L . 1- i . .- .. . . ......,,..,‘„ .0.4 d 0 _ . 1, . , Lai ... Rai I -- i \ 1 '11 7.!.. . . ....e..,.-.,-7..4,„ .• . - F —r-1 7—......1 „ Le' . ......4. .3: i :.:-.9. !.. l• .7.-4 Ili Tr I I—[ „„.. . \, . %'+' . 0 ( Tam r !II yi.• : ,..... .1, ..7. ..t3 :'.Ci .4 441 — J I 24 ma 4 I r . .4.. ----7, Li ii , 31.111-011,0 T-Tp r-rraraseo B 917ZT 11-CICel...-4 la TOPOSED-1.114ff 111 0 Imr.1-14,...431411114.I reproccid Crileilli Exhibit E NORTEX HOUSING FINANCE CORPORATION OVERVIEW PURPOSE Founded in 1995, the NORTEX Housing Finance Corporation (HFC) is a Texas non-profit corporation, formed by counties in the NORTEX Regional Planning area. An HFC is authorized by the Texas Local Government Code, Chapter 394, "to provide a means to finance the cost of residential ownership and development that will provide decent, safe, and sanitary housing at affordable prices for residents of local governments". Actions have included issuing single family mortgage revenue bonds, special down payment assistance finance, multifamily housing bonds, and loans for the development of multifamily units. To date, several thousand home owner families and apartment dwellers in the local region have been assisted by the actions of the NORTEX HFC. Mortgage revenue bond loans that operated several years ago were fixed rate 30-year loans that required financial qualification by the homebuyers. Eligible homebuyers could then have family incomes up to $65,000, depending on family size, essentially a moderate-income program. NORTEX programs are available to eleven counties—Archer, Baylor, Clay, Cottle, Foard, Hardeman, Jack, Montague,Wichita,Wilbarger, and Young.This includes the citizens of the City of Wichita Falls and Vernon. These governmental units have no financial liability for the HFC programs. The counties' responsibilities include the confirmation of Board appointments and the approval of bond issues. The HFC is considered to be an instrumentality of local government. BOARD OF DIRECTORS Paul Wylie, Jr., President; Archer County Greg Ross, Vice President; Attorney, Wichita County Dennis Wilde, Secretary/Treasurer, Executive Director, NORTEX Regional Planning Commission Michael Smith, Councilman; City of Wichita Falls Tammy Martinez, Hardeman County EXECUTIVE DIRECTOR Dave Clark Office: 940 691-6857 Cell: 940 235-0119 PROFESSIONAL SUPPORT Bond development and other affordable housing operations are accomplished with the assistance of field professionals that include bond counsel, financial advisors (underwriters, placement agents), trustees, and servicers. Program "team" members and the location of their participating offices have included: Bond Counsel: Chapman &Cutler LLP, Chicago, IL Trustees: TX Bank of New York Mellon Trust Co., Dallas, TX Bank of Texas, Ft. Worth, TX Financial Advisor & Placement Agents: Raymond James, Memphis, TN, Dallas TX George K. Baum & Company (Stifel), Denver, CO Municipal Advisor: Hilltop Securities, Dallas, Austin TX Servicers: U.S. Bank Home Mortgage, Cleveland, OH; Bank of America, TX, CA Lender Training: E Housing Plus, Cooper City, FL Exhibit E - Cont'd NORTEX HFC PROGRAM HISTORY 5/2024 MORTGAGE REVENUE BONDS (MRB) These bonds facilitate lower than market rate home mortgages in an 11-county region primarily to first time homebuyers. NORTEX Housing Finance Corporation has issued: Mortgage Revenue Bonds $82,805,000 (Tax Exempt Total) 1996 $13,750,000 1998 $4,235,000 1999A $15,000,000 2002 $10,000,000 2006 $15,370,000 2009 $24,450,000 Taxable Mortgage Revenue Bonds (2000) $10,000,000 Recycling Bonds (2001) $30,000,000 Operation for mortgage loans is ultimately dependent on the participation of local mortgage lending institutions. Participants have included: American National Bank• First Bank • First National Bank. First United Bank Herring National Bank • Prime West Mortgage • Security National -Wells Fargo MULTI-FAMILY NORTEX HFC has issued multi-family bonds for the acquisition and rehabilitation of affordable apartment units. It has also provided a loan as part of the general financing for the construction of a new complex. This has facilitated the development of 628 units. Multi-family Bonds $9,352,000 American Housing Foundation, 320 units Development Loan $15,000 Woodview Apartments, 104 units Development Loan $155,000 Chisholm Trail Crossing Apts., Vernon TX, 44 units *Development Loan $495,000 Washington Village Apts., Wichita Falls, 96 units *Development Loan $300,000 Parkstone II, Wichita Falls, 64-unit addition *In cooperation with Southeast Texas HFC BOND RATINGS The complete total of bonds issued has been $132,157,000. All of the senior bonds have been AAA rated and purchased by the Federal National Mortgage Association (Fannie Mae) or the Transamerica Life Insurance Company. CURRENT PROGRAMS NORTEX presently offers the Housing Across Texas (HAT) and the 5 Star Texas Advantage programs allowing up to 5% down payment assistance. The program is operated through 5 mortgage providers. The HFC owns Leslie Manor, an affordable senior citizen complex in Quanah, Texas. Projects are being developed that may include the issuance of Multifamily Bonds and Partnership for the Acquisition/Rehabilitation of a 132-unit apartment complex. Exhibit F PAYMENT-IN-LIEU-OF-TAX AGREEMENT This Payment-In-Lieu-Of-Tax Agreement (this "Agreement") dated as of , 2024 is entered into by and among the City of Wichita Falls, Texas ("City"), OPG Sun Valley Apartments, LP, a Texas limited partnership (as the "Owners") and Nortex Housing Finance Corporation ("Nortex"), a Texas public, nonprofit housing finance corporation, upon terms and conditions set forth herein. RECITALS WHEREAS, the Owners are seeking to rehabilitate existing low-income housing in Wichita Falls, Texas by acquiring leasehold ownership of Sun Valley Apartments, more fully described on Exhibit A (such apartment complex and land on which it is situated hereinafter referred to as the "Property"); and, WHEREAS, Nortex will partner with the Owners to provide certain financial incentives for the Property, and to participate in the ownership structure for the Property via Nortex subsidiaries acting as general partner of the Owners and as fee title owner and ground lessor of the land on which the Sun Valley Apartments development is situated; and, WHEREAS, the participation of Nortex with the Owners is anticipated to generate a property tax exemption for the Property; and, WHEREAS, the resolution of no objection of City to Nortex's application to the Texas Department of Housing and Community Affairs is critical for the Owners to obtain 2024 Housing Tax Credits; and, WHEREAS, the Owners wish to make a tax-equivalent payment in support of City's mission, goals, and objectives; and, WHEREAS, City finds that this Agreement serves the public purpose of promoting economic growth. NOW, THEREFORE, it is agreed by the parties hereto that: 1. For such time as the Property qualifies for exemption from property taxes, the parties hereto approve the PILOT payment schedule as shown on Exhibit B, and the Owners agree to make 20 annual payments to City based on the payment amounts shown therein. In the event that the Owners continue to own the Property for more than 20 years, and subject to the terms and conditions hereof, the Owners agree to continue to make annual PILOT payments to City based upon a continuation of the 3% annual increase shown in Exhibit B for every subsequent year the Owners own the Property and the Property receives an exemption from taxes. 2. The first PILOT payment is due from the Owners to City on or before the later of October 1 , 2025 or the date Owner acquires leasehold ownership of the Property. Annual PILOT payments will be due on or before October 1 each following year for which payment is being made. If the Owners fail to pay the PILOT payment to the City within such time, and such failure continues for ten days after written notice of such default to the Owners by the City, the City shall have the right to exercise any and all legal remedies available to it to obtain such payment. The Owners agree to pay the statutory amounts for penalties, interest, attorney's fees, and costs of collection applicable to suits to recover delinquent ad valorem taxes under Texas Tax Code Chapter 33 for failure to remit timely PILOT payments to City as a contractual obligation even though the Property will be exempt from local ad valorem taxation. 3. All payments shall be made payable to City of Wichita Falls and shall be sent to the Director of Finance, City of Wichita Falls, Wichita Tower, 705 8th Street, Wichita Falls, Texas 76301 . 4. Severability. To the extent permitted by law, a holding by any court that any part or any provision in this Agreement is invalid, illegal or unenforceable in any respect shall not affect any other provision, and this Agreement shall be construed as if the invalid, illegal, or unenforceable provision had never been a part of the Agreement. 5. Non-Waiver of Rights. This Agreement may not be amended except in a writing specifically referring to this Agreement and signed by the parties hereto. Any right created under this Agreement may not be waived, except in a writing specifically referring to this Agreement and signed by the party waiving the right. Provided, however, termination of this Agreement shall not relieve the Owners, or its successors, from any payments due City prior to such termination. 6. Liquidated Damages; No Lien. If for any reason the Owners should fail to make the PILOT payment in accordance with paragraph 3, the parties agree that (i) the amount of taxes that would have been imposed upon the Property plus (ii) the amount of any interest calculated in accordance with paragraph 2; plus (iii) City's reasonable attorney's fees and costs of collection should any action be required in order to compel payment of all such amounts shall serve as liquidated damages from the Owners to City. Nothing in this Agreement shall be construed as creating a lien against the Property, nor shall the City be entitled to place a lien on the Property for any unpaid portion of the PILOT payment or any related expenses and payables. 7. Notices. Any notice provided or permitted to be given pursuant to this Agreement must be in writing and may be served by depositing same in the United States mail, addressed to the party to be notified, postage prepaid, certified mail, with return receipt requested, by fax (with confirmation of receipt), by personal delivery service or nationally recognized air courier service. For purposes of notice, the addresses of the parties shall be as set forth below: Director of Finance City of Wichita Falls c/o Wichita Tower 705 8th Street Wichita Falls, Texas 76301 Nortex Housing Finance Corporation 2112 Indian Heights Boulevard Wichita Falls, Texas 76302 OPG Sun Valley Apartments, LP c/o Overland Property Group (OPG) 254 North Santa Fe Avenue, Suite A Salina, Kansas 67401 8. Governing Law and Venue. This agreement shall be governed by the laws of the State of Texas. Venue for any action concerning this Agreement shall be in the District Courts of Wichita County, Texas. 9. Assignment. The Owners may not assign, transfer or otherwise convey any of its rights or obligations under this Agreement to any other person or entity without the prior consent of City, which consent shall not be unreasonably withheld, conditioned on (i) the prior approval of the assignee or successor and a finding by City that the proposed assignee or successor is financially capable of meeting the terms and conditions of this Agreement and (ii) prior execution by the proposed assignee or successor of a written agreement with City under which the proposed assignee or successor agrees to assume and be bound by all covenants and obligations of the Owners under this Agreement. Any attempted assignment without City's prior consent shall constitute grounds for termination of this Agreement and following ten (10) calendar days of receipt of written notice from City to the Owners and Nortex. 10. Entire Agreement. This Agreement constitutes the entire understanding between the parties and supersedes any prior negotiations, discussions, agreements, and understandings between the parties with respect to the subject matter of this Agreement. 11. Termination. This Agreement shall continue for a term concurrent with the exemption of the Property. Notwithstanding anything herein to the contrary, at such time as the Property no longer receives an exemption from ad valorem taxes, this Agreement shall automatically terminate, and be of no further force and effect. 12. No Continuation by Nortex. In the event that an affiliate of Overland Property Group no longer participates in the ownership of the Owners: (i) Nortex shall promptly notify the City; and (ii) Nortex and the Owners shall not continue to seek and/or receive an exemption for the Property without the express consent of the City. 13. Role of Nortex. Nortex is entering into this Agreement for the limited purposes set forth herein. The parties hereto agree that the PILOT payments are the sole obligations of the Owners and that neither Nortex nor any affiliates or subsidiaries of Nortex (including such entities serving as general partner of the Owners and as fee title owner and ground lessor of the land on which the Sun Valley Apartments development is situated) shall have any obligation to make such PILOT payments. Executed to be effective as of the date set forth above. CITY OF WICHITA FALLS, TEXAS NORTEX HOUSING FINANCE CORPORATION By: By: Darron Leiker, City Manager David A. Clark, Executive Director Attest: Attest: City Clerk Approved as to form: Kinley Hegglund, City Attorney OPG SUN VALLEY APARTMENTS, LP, a Texas limited partnership By: OPG Sun Valley Managers, LLC, a Texas limited liability company Its: General Partner By: Overland Communities Group, LLC, a Delaware limited liability company Its: Sole Member By: Overland Property Group, LLC a Delaware limited liability company Its: Manager By: Overland Property Group, LLC a Kansas limited liability company Its: Manager By: Matthew Gillam Its: Manager EXHIBIT A LEGAL DESCRIPTION OF PROPERTY A oar: cyl RInr.k i 1,1.!:-F: 01: F Ha: Plat u SL14 VALLEY, SECTION THREL ari A.14-liti..,1" t tne City of'ilVichi:eFiII . Wiz.- t1 nty,Texas, accnord in rj1.0 th0 Volume 115, es 30 & 51. chitd iit PlotIiIS R.: Ir ciolcrited by metes an.: ho.inrls .5PRE 4.LL C =11)=-:3-•e. f_-‘1 7- 7.) 1161 0. bL I 77. TF.,7 IN:7.- rp. PF :I.. 6NL.. _II I A ..".11,▪11 - ; .7)1:r T F. r::: v). - C r-cri rn.d a. C1:F 1:-.).7": gun cs - L., la. PL-,:;es, 3C. cr.: 31, ii! '..-..411:1-11.v 7'17:0 r n'71 r r Ite 53_1`.1 i 31 1 I C1111(.; &IC -.7' ..at 1. 3 cick. • .".) .r.7r r.:.C.Dr ' Volun-e 21. I J4e d•E. chi:: cud 'Dr the !-.i.-1-1.,-least corr-,er of knis tract; TI the Lcs: ii, c' rind 6.-7: F.,ie of 317.75 1)30 !.0 ircr, '1,r/I iCt! itI'rlk of for an ang14! correr I 54;th of 7- nnf:.c carnr•• fr G- i ..J .it .1.! 1.i' ' ▪ :1 . /I/ •'• ": E C- :i• • • .„ • tr. T; • e•3' 77.! • 0."1 r. V.C..r"Pr .; 're iiit: .) ▪ on h:/Z1 i ../d er '7 - C Ctid t.1E EGSEIin :" - 1-.,.-C•7 tract; :70: (1(1" F if 'A-kJ Irirtge .)r7vt, feC. 110u . StheL come,- or 3Iock 2, • . r, Three na Pacc. ir Ph Rccords„ for an I L-oi rice ol tracl., 7-1ENV: S -5±8' OS 26 L, W.th I ne I uic" c f.e.7 7.) rIrl ir,71- rn.7, 0.7.0 J., 71 7:-.7. 7 .17.- 7..--rirr cid 3 for ver, !!' o .7=9; CR' 17, - 1P•e; [At 3, • F.cit lint 2, 77. -- • • K.ir It I .11-= nr,i 2, :1•1 3. .1. ,•3`. cice t7_7:71 fett •-• • - .if ,t 1, rod jr ° '..-;en:rcr, Few . Ei fe.r the •Ir.:r:h-Lv.lst ids !rcc1; -11tr....'.11 3.2' 56 Er with tne South fin4i or car -precv,c.,, East, 6 starcc• Feet to the AC í na EXHIBIT B PILOT PAYMENT SCHEDULE PILOT Payment Schedule: Sun Valley Apartments,LP. City of Wichita Falls•Payment in Lieu of Taxes Yrl Yr2 Yr3 Yr4 Yr5 Yr6 Yr7 Yr8 Yr9 Yr10 Yr11 Yr12 Yr13 Yr14 Yr15 Sun Valley Apartments,LP 519,366.40 519,947.39 520,545.81 521,152.19 521,797.05 522,450.97 523,124.49 0,81823 524,532.78 525,258.76 526,026.82 526,807.63 527,611.85 528,440.21 529,293.42 Yr16 Yr17 Yr18 Yr19 Yr20 $30,172.22 $31,077.39 $32,009.71 $32,970.00 $33,959.10 3%Annual increase after first year 20-yeartimeframe