Res 128-2017 9/19/2017Resolution No. 128-2017
Resolution approving the programs and expenditures of the Wichita
Falls 4B Sales Tax Corporation Board of Directors and amending the
budget to include funding up to $300,000 for Overland Property
Management Group/OPG Lamar Partners, LLC to historically preserve
and renovate the building at 1100-1102 Lamar Street.
WHEREAS, Texas Local Gov't. Code § 501.073(a) provides "The corporation's
authorizing unit will approve all programs and expenditures of a corporation and annually
review any financial statements of the corporation;" and,
WHEREAS, on September 7, 2017, the Wichita Falls 4B Sales Tax Corporation
(413STC) approved the project listed below and as stated in its agenda.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY
OF WICHITA FALLS, TEXAS, THAT:
1. The Wichita Falls 4B Sales Tax Corporation's approval and funding of the
following programs and expenditures, in a total amount not to exceed $300,000 as
described below and in said corporation's agenda, is approved:
To Overland Property Management Group/OPG Lamar Partners, LLC to
historically preserve and renovate the building at 1100-1102 Lamar Street
for senior living units.
2. The current fiscal year budget of the 4B Sales Tax Corporation is amended to
provide for the aforementioned expenditures and changes thereto.
PASSED AND APPROVED this the 19t" day of September, 2017.
ATTEST:
City Cfdrk
fit
Overland Property Group, LLC
5345 VV, 151 stTerrace
Leawood, Kansas 66224
ph (913) 396-6310
OVERLANDfax (913) 396-6312
PROPiMWGROUP www.ovpgroup.com
8/30/17
Jim Dockery
Deputy City Manager
Community Development Director
City of Wichita Falls
Municipal Building
1301 Seventy St.
Wichita Falls, TX 76301
Re; application for 4b sales tax funds - the Maskat building
Dear Jim:
As a follow up to my letter dated June 2nd requesting funding from 4B Sales Tax
Funds, I would like to update you on the status of our application with TDHCA as
well as provide you with a revised 4B request based on refined construction bids
and market conditions.
At the time of my letter, we indicated a $625,000 gap in financing and subsequently
asked the 4B Sales Tax Board for $558,000 in funding. When we made that request,
we still had not received an allocation of Federal tax credits from TDHCA nor were
our architectural plans and engineering studies complete. I am pleased to announce
that the formal allocation of tax credits from TDHCA was sent to my office last week
and we are now progressing with the due -diligence necessary to obtain equity and
debt for this project.
Part of that process involves the syndication of the tax credits. We have been
approached by many syndicators, most of whom we have dealt with over the past
15 years, and we are encouraged to see that equity pricing has trended upward
since time of application. While this certainly helps "fill the gap" it has been
countered by higher construction costs across the country. We have been working
diligently with our architect, contractor and suppliers to value engineer (VE) the
plans in an effort to bring down costs while still meeting or maintaining all local
codes, State and Federal requirements as well as historic demands, while still
providing our future senior residents with an exceptionally unique place to call
home.
Despite the increased construction costs detailed below, we were able to reduce the
financial gap and thus our request to the 413 board.
Hard Cost:
Originally we had a Total Construction Contract of $3,479,963. Our contractor has
updated the numbers based on additional information and the market. The original
Construction Contract Bid went up from $3,479963 to $4,634,631. Through
meetings with our Contractor, engineers and architects e believe we have
identified VE savings that can get the contract down to $4,228,289. This would
mean construction costs went up $748,326 from time of application until now.
Total Development Budget:
After meeting with a handful of experienced and trusted syndicators, we believe we
can sell the tax credits for a higher price than what was 'projected when the tax
credit application was submitted in March. These changes leave our gap at
$548,326 -down from $625,000. Asa result we are nodiffying ur initial request
from S68 t�00 t ' 400 �QQ and will su plemot the remahung.gap�out of a
combination of ddeeferred developer fees _perm debt structuring.and
contingency. Without these funds, the gap we be insurmountable and will result in
a deal that will not meet underwriting requirements from the syndicator, investors
and lenders:
Below is a detailed breakdown of the updated bids:
Paving/Curbing (Sidewalk -ROW): $44,000
Fire Protection: $139,417
ADA: Cuts, Ramps, Signage: $15,768
Fire Escape Stairs: $12,250
Elevator: $180,000
Parking Curbing (New Parking Lot): $129,202
Facades: (12 exterior openings). $52150
Revised 4B Request: $400,000
l look forward to presenting to the board and answering all of your questions,
Brett Johnson
Partner
Overland Property Group, LLC
w i$.
June 2, 2017
Jim Dockery
Deputy City Manager
Community Development Director
City of Wichita Falls
Municipal Building,
1301 Seventh Street
Wichita Falls, Texas 76301
APPLICATION FOR 413 SALES TAX FUNDS — 4B SALES TAX BOARD
Dear .rim:
"The number ofunits of affordable housing produced has been trending downward" says Jeratifer
Schwartz, assistant director for tax policy and advocacy of the National Council of'State Housing
Agencies. By year end (2016) should finish construction and rehabilitation projects on 62,Ci54 units
ofaf ardable housing units Nationwide fainted through the 9%LIT'CE[CPrograms in 2014, 39,928
new apartments for 9% LITCPICs should be completed (2017), but funded in 2015 according to State
Qf'N atianul Houring Report (2016). Demand to increase funding 50% for the LITCHC program with
bipartisan support was introduced in the Senatedifficult, but,passing any expensive legislation may-bo
Overland Property Group (OPG)/OPG Lamar Partners has an application with TDHCA in the
2017, 9% Tax Credit Competitive :Program, as presented in February. A. resolution of support was
granted by the city of Wichita Falls. Currently, the property at 1100 —1102 Lamar (former Maskat
Temple) is undei contract and OPG is in the underwriting phase at TDIf A. OPG plans to
historically preserve and develop the building into 30 affordable apartments and provide a mixed --use,
component of 6,000 SF of retail on the first floor. Andy Lee is representing the new ownership for
the 413 application.
Request for Development Assistance from 4B Board to historically preserve and renovate the
building, as a MFR affordable apartments (age restrictive / 55 or older) and Retail rnixed use
occupancy,
The Landmark at Lamar — Texas Historical Commission former Maskat Temple -Part A
submitted. Located in Core cifDoumtown — C13D Distriet
TIF # 4 District:
Legat 1100-1102 Lamar: Lots 1 and 2A , Block 201, Original `fownsite to the City OfWichita Fails,
Wichita County, Texas.
Zoning: CBD
Previous occupancy: Maskat Temple Shrine Bldg. headquarters with short term stay facilities
Occupancy Future Multifamily - Retail Mixed Use,
2015 Building Code: Transition change of occupancy Multi -family residences/retail,.
Property Tax Value: 1100 Lamar $5I;679; 1102 Lamar (vacant lots) $18,00o (WC - 2016).
Qualified Expenses; Historic Tax Credits Proceeds (est.) Federal-$755,3 5 State - $746,602'
Estimated TOTAL DEVELOPMENT COST- $6,456,125a D
Rehabilitation Approvals. Landmark Commission (Design Review); texas Historical Commission,
Pederal Nationaxl P arks (Farts A, B, 0; City of Wichita Falls Building Inspection.
Building Sq. Footage: 38,724 SF consisting of 34,845 SF (30 sots. 3 879 SF of Retail (first floor).
Parking' C"BD - site plan shows (10) -60-•degree space on 11h street for Retail and (4) parallel
parking spaces at front entry on Lamar. The "New" Parking Lot on the south two (2) lots, 39 spaces.
Tax credit incentives are required (Federal, State). $1,501,981 ass portion of loan /equity of
$6,456,121.
OPG Lamar- Partners, LLC would like to request economic development assistance from the 4B
Sales Tax Board for Development of The Landmark on Lamar, and its "Historic preservation which
provides a base for strung; stable, downtown residences as an ANCHOR for generalurban
revitalization." Vision 20- 20 Plan.
The owner proposes assistance in the form of an agreement, as public/private partnership and
requests a Five(5) year forgivable loan at no interest for construction costs associated with concrete
ROW /ADA replacement, replacement of too linear feet of sidewalk, fire escape repair;
Replacements of a new 15,000 SF parking lot, fagade openings -- required for Preservation/AD?A
compliances for MFR and retail on the ground floor, installation of a NEW elevator which is required
for MFR residency and installation of a NEW Fire Suppression System, as the historic preservation
and renovation of this multi -tenant building is working with compliances under the 2015 Building
Code. The contract would require completion of project, Certificate of Occupancy and open for
business before any payment is requested: Owner will also agree to a claw -back provision; if for any
reason, the project does not shove forward. T6s funding request isfor the 201712078 4B Budget
.Yens OPG Lamar Partners, LLC has submitted this request for incentives that would assist
underwriting the project during the 9% competitive TD14CA round. The TDHCA Board's: award
decision shall occur near the end of July 2017.
OPG Lamar Partners, LLC has provided the cost estimates (included in the package) in tine
requested aanount of $55 ,0ft The total development cost is $6,465,121900. The 4B Application
re west is for 11457®i® df ras'cct rust.
The investment by the 413 Tax Board would return multiple bone Its to the City of Wichita 1 alls:
"The dernand for downtown housing, however is strong. Thus, astrology that features downtown
residential development; as a meccas of'stimulating demand fbr retail and ofjiee space should be
considered. Advantages of downt€ ern housing: support L3verall economic development, Improved
Safety and Security, Use OfSpeeYic Historic Resources Civic Pride. Downtoam-housing
developments will maximize the return on existing public investment in capital and local government
services. 4' Vision 20 - 20 Plan, Downtown Objectives.
Growth in .Sales and Ad Valorem Tao- Rate: The mixed -use development will add renovation (10%)
and sales tax on construction materials, bring a retail tax generator (6,000 SF) and PAY ad valorem
property taxes.
Reahze Greatest Valuefrom Public Investments: Core C BD traffic corner, preservation of an historic
building, new sidewalks, landscaping, and a new 15,000 SF fenced parking lot on the corder of I 1
& Lamar:
.) Real and personal property tax increases would benefit "TIF #4 and city tax revenues.
2.) Impact: 12 temporary and 4 new employees. Historic Renovation: 50 jobs.
3.) Heritage Tourism Impact: Direct Spending $6,591 (10.5 % of $500It M) persons spent on
Texas Travel. In "Texas, Historic Residential $168.6 MM, $1,000,219 (000's) - GDP with
total tax contributions (local) $44, 896 (000's).
4:) Provides I" Affordable Housing Development in the Downtofvn Core CBD.
5) Economic Effect of Historic Rehabilitation vs. New Construction: (GDP) $1,350 (000's) vs.
$1,354 (000's). -Texas
6.) Centrally located - US Post office, WF Public Library (Senior Citizens 55 or over Program,
C WF'); Red boor Meals on Wheels, YIVICA IYW€yA, downtown churches:
The Landmark at Lamar is an historic preservation development by OPG, who developed
Reserves of Maplewood and The Summit rest on Eamet Road, provides the Largest opportunity
for tax base growth, as it combines new preservation construction with operational gains, It also
triggers the highest cost and need for economic gap financing in this case. A, high-level of the
economic gap is depicted below:
Cost Model-,
program- 42,000 SF
Acquisition Cost; $750,000
Shell Development Cost (New construction) $4,370,796
Site costs (Concrete, Paving, Utilities to site) $390,000
Site Amenities: (Landscaping, Fencing) $90,000
Soft Costs; $699,700
Debt Coverage Ratio: 1.34
Federal /State Tax Credits. (year l) ($1,510,9$0)
Economic Gap requiting Incentive',
w
Requested 4B Grant
$ 558,000
1.) Paving /curbing (sidewalk- OW)
$ 44,000
2.) ADA Is issues: Cuts, Ramps, Signage
12,000
3.) Fire Escape Stairs (2) repair:
11,000
4.) Parking Curbing (new parking Lot) 39 spaces
127,500
5.) Facades: U2 exterior openings)
48,000
6.) Elevator (bldg. never had one)
180,000
7,) Fire Protection {crew code/new:6" line
135,449
�"Dial Ike ues€:
f
S S57 449
9
The Landmark at Lamar former Maskat Temple
e appreciate your consideration and review of the enclosed materials as The Landmark at
Lamar presents a great opportunity for downtowns Wichita Falls.
Respectfully submitted,
Brett Johnson,
Palmer, Overland Property Group and OPG Lamar partners, LLB
Andy Lee, Andy Lee Company