ILLINOIS HOUSING DEVELOPMENT AUTHORITY October 14, 2016

Transcription

1 ILLINOIS HOUSING DEVELOPMENT AUTHORITY Pursuant to notification given October 12, 2016, the Members of the Illinois Housing Development Authority (the Authority ) met for a regular scheduled meeting on, At the offices of the Authority, 401 North Michigan Avenue, Suite 700, Chicago, Illinois. Those present (unless otherwise noted below as absent): BOARD: King Harris Karen Davis Cristina Castro Mary Kane Harlan Karp William Malleris Alyssa Rapp Sam Tornatore STAFF: Audra Hamernik Debbie Olson Maureen Ohle Nandini Natarajan Colleen Synowiecki Christine Moran Michelle Adams Neil O Callaghan Vanessa Boykin Nicki Pecori Fioretti Tim Veenstra Sam Mordka John Chung Derek Walvoord Keith Pryor Gabriel Herrera Cheryl Cooper GUESTS: Rachel Smith Susan Jun Geoff Proulx Tom Coomes Janet Micheletto Natalie Moretz Paul Davis Scott Graham Steve Abbey Chairman Vice Chairperson Member Member Member (absent) Member Member Member (absent) Executive Director Chief of Staff General Counsel Chief Financial Officer Executive Coordinator Director, Multifamily Financing Director, Administrative Services Managing Director, Information Technology Comptroller Director, Community Affairs Director, Asset Management Sr. Policy and Strategic Initiatives Officer Assistant Director, Finance Structuring Multifamily Programs Multifamily Programs Multifamily Programs Asset Management Mayer Brown Morgan Stanley Morgan Stanley Citi Citi Citi Appelegate U.S. Bank Ameritrust

2 Page 2 of 8 Ansel Caine Caine Mitter Jennifer Miller Cook County John Germain Steve Boone Cuckeye Julian Boone Buckeye Rich Sciortino Brinshore Chad Hartle RCH Development Jerry Mohica Habitat for Humanity Sharnette Brown LGG Robert Demo Zion John Hayner Bridge Communities Sarah Brachle Wagner SBW Solutions Marrha Boone Buckeye Susan Wohlnant LGG Tom Barty D. Egidi DRE Inc T. Welsh DRE Inc N. Clemence ICADE Erik Lintuedt Rise Mark Stroker Rise R. Baer Gob Koky Carhon Prop I. Call to Order & Roll Call With a physical quorum consisting of Chairman Harris, Vice Chairperson Davis, Ms. Castro, Ms. Kane, Mr. Malleris and Ms. Rapp, Chairman Harris called the meeting to order at 10:05 a.m. A roll call was taken. II. Consent Agenda: Chairman Harris noted that there were twelve (12) Resolutions on the consent agenda. He asked the Members if anyone had comments or wanted to remove any resolution from the consent agenda. Mr. Malleris stated that he was pleased with construction numbers for all but one of the resolutions. Chairman Harris agreed. No one had any additional comments or wanted to remove any items from the consent agenda. A motion to adopt the Consent Agenda Resolutions was made by Mr. Malleris and seconded by Ms. Davis; voting was done by a roll vote and the twelve (12) Resolutions noted below were adopted by the affirmative votes of Chairman Harris, Vice-Chair Davis, Ms. Castro, Ms. Kane, Mr. Malleris and Ms. Rapp. 1. Minutes A. 16-IHDA-141 Resolution Approving the Minutes of the Meeting of the Members of the Illinois Housing Development Authority held on September 16, Procurement Contracts

3 Page 3 of 8 A. 16-IHDA-142 Resolution Authorizing Execution of Agreement for the Purchase of Software Services. B. 16-IHDA-143 Resolution Authorizing the Purchase of Software and Services for the Hardest Hit Fund Voice-Over-Internet Protocol Systems. 3. Administrative Matters A. 16-IHDA-144 Resolution Ratifying Permitted Financial Activities. B. 16-IHDA-145 Resolution Amending Financial Management Policy. C. 16-IHDA-146 Resolution Authorizing the Disbursement of Administrative Funds. 4. Other Matters A. 16-IHDA-147 Resolution Authorizing a Correction of Federal Tax Credit Reservation Amount for Fox Meadows Independent Living. B. 16-IHDA-148 Resolution Authorizing an Increase in Federal Tax Credits for Lincoln Park Villas. C. 16-IHDA-149 Resolution Authorizing an Increase in Federal Tax Credits for Prairie Meadows. D. 16-IHDA-150 Resolution Authorizing an Increase in Federal Tax Credits for Fulton Commons. E. 16-IHDA-151 Resolution Authorizing a Return of 2015 Federal Tax Credits and a Reallocation of 2016 Federal Tax Credits for the Reserve at Tinley Park. F. 16-IHDA-152 Resolution Authorizing a Return of 2015 Federal Tax Credits and a Reallocation of 2016 Federal Tax Credits for McCrory Senior Apartments. III. Chairman Harris indicated that the Additional Resolutions noted on the Agenda would now be discussed. 1. Multifamily Transactions A. Executive Director Hamernik introduced the following agenda item: 16-IHDA-153 Resolution Authorizing State Tax Credits (STC-11383) for Homes in Hope Phase IV Westmont, Illinois. Administrator for the Illinois State Tax Credits. Mr. Herrera stated that the Authority is the low income housing tax credit agency for the State of Illinois ( State Tax Credit Agency ). Bridge Communities, Inc. has applied to the Authority for State Tax Credits in connection with the rehabilitation and permanent financing of a housing development to be known as Homes in Hope Phase IV ( Project ) in the amount of 111,438 as described in Exhibit A attached to the Resolution. Mr. Malleris asked if there was a potential to increase the number of accessible units. The sponsor explained that they do try to make as many units accessible as possible, but that this is an older building and the first floor is below ground level.

4 Page 4 of 8 A motion to adopt the Resolution was made by Mr. Malleris and seconded by Ms. Rapp; voting was done by a roll vote and the Resolution was adopted by the affirmative votes of Chairman Harris, Vice-Chair Davis, Ms. Castro, Ms. Kane, Mr. Malleris and Ms. Rapp. B. Executive Director Hamernik introduced the following agenda item: 16-IHDA-154 Resolution Authorizing State Tax Credits (STC-11382) for Habitat McHenry Scattered Site Wonder Lake, Illinois. Mr. Herrera stated that Habitat for Humanity of McHenry County has applied to the Authority for State Tax Credits in connection with the acquisition, construction and permanent financing of a housing development to be known as Habitat McHenry Scattered Site ( Project ) in the amount of 288,005 as described in Exhibit A attached to the Resolution. Mr. Malleris stated he was pleased to see that the Project is 100% adaptable. A motion to adopt the Resolution was made by Mr. Malleris and seconded by Ms. Rapp; voting was done by a roll vote and the Resolution was adopted by the affirmative votes of Chairman Harris, Vice-Chair Davis, Ms. Castro, Ms. Kane, Mr. Malleris and Ms. Rapp. C. Executive Director Hamernik introduced the following agenda item: 16-IHDA-155 Resolution Authorizing a HOME Loan and a Credit Advantage or FFB Risk Sharing Loan for Spring Hill Senior Residences f/k/a West Dundee Senior Residences (CA/FFB-HOME ) West Dundee, Illinois. Mr. Walvoord stated that the Authority is the administrator of the HOME Investment Partnership Program ( HOME Program ) in Illinois. He also stated that the Authority administers a program knows as the Risk Sharing Program wherein the Authority makes mortgage loans to borrowers ( Risk Sharing Program ). He then stated that West Dundee Senior Housing LP, has requested the Authority make a second position loan under the HOME Program in an amount not to exceed $1,900, for the acquisition, construction and permanent financing of a housing development to be known as Spring Hill Senior Residences ( Project ). He further stated that upon construction complete, a first position permanent loan under either the Risk Share Program in an amount not to exceed $5,500, or 85% of the loan to value of the Project, whichever is greater or the Credit Advantage Program in an amount not too exceed $5,500, or 85% of the loan to value of the Project, as described in Exhibit A attached to the Resolution. There was a discussion regarding the per unit cost. Chairman Harris stated that the costs were high for a development in West Dundee. He thought one could build a single family home for less. The Sponsor stated that the City s impact fees have increased the costs and that the development is gold rated because it is geo thermal. Vice Chair Davis stated that the construction costs are high. The Sponsor responded that the construction boom in Chicago has impacted the suburbs. It is very hard to find a subcontractor who will bid lower because they can get the high prices in Chicago.

5 Page 5 of 8 A brief discussion then ensued regarding prevailing wage costs. Ms. Rapp stated she would like to see statistics on how Illinois ranks nationally and insisted that the Authority focus on this in its strategic planning. Executive Director Hamernik stated that this is a priority of the Housing Task Force to learn more about prevailing wages. Mr. Malleris stated this project is 100% adaptable and accessible and that this is important. A motion to adopt the Resolution was made by Vice Chair Davis and seconded by Mr. Malleris; and the resolution was adopted by the affirmative votes of Chairman Harris, Vice- Chair Davis, Ms. Castro, Ms. Kane, Mr. Malleris and Ms. Rapp. D. Executive Director Hamernik introduced the following agenda item: 16-IHDA-156 Resolution Authorizing a Loan and State Tax Credits for Liberty Towers (CDT-STC-11315) Libertyville, Illinois. Mr. Pryor stated that the Authority is the administrator of the Multifamily Housing Revenue Bond Program whereby the Authority acquires funds to make conduit bond loans ( Conduit Loan ). He then stated that Liberty Towers Associates III, L.P. ( Owner ) has applied to the Authority for State Tax Credits in connection with the acquisition, rehabilitation and permanent financing of a housing development to be known as Liberty Towers ( Project ) in the amount of 1,300,000. He further stated that the Owner requested the Authority make a Conduit Loan for the Project in an aggregate principal amount not to exceed $17,000, , as described in Exhibit A attached to the Resolution. A robust discussion regarding the project costs, the developer fee and the low number of accessible units ensued between the Members and the Sponsor. Chairman Harris said this is important for Libertyville but expressed concern about the size of the developer fee as compared to the money being spent on rehabilitation. He pointed out that the rehabilitation work is a little under $5,500,000 and the developer fee is almost $2,500,000. He inquired as to why the acquisition cost was included in calculating the developer s fee. Mr. Egidi indicated that the developer fee was increased in order to maximize basis. Mr. Egidi also indicated that the appraisal numbers were low and that a developer fee equal to 12% of the total project cost is standard across the nation. A motion to adopt the Resolution was made by Ms. Kane and seconded by Ms. Rapp; voting was done by a roll vote. Chairman Harris, Vice-Chair Davis and Ms. Castro voted no and Ms. Kane, Ms. Rapp and Mr. Malleris voted yes. With a 3-3 vote, the Resolution was not adopted. Mr. Malleris suggested the Sponsor work with staff and increase the number of accessible units.

6 Page 6 of 8 Vice Chair Davis said the deal needs to be reworked. Chairman Harris said he could understand that they would be disappointed by the vote but encouraged Mr. Egidi to work with staff and come back before the Board. 2. Bond Transactions A. Executive Director Hamernik introduced the following agenda item: 16-IHDA-157 Resolution Authorizing the issuance of Not to Exceed $11,000,000 Aggregate Principal Amount of Multifamily Housing Revenue Notes, Series 2016A (Liberty Towers Project) and $6,000,000 Aggregate Principal Amount of Multifamily Housing Revenue Note, Series 2016B (Liberty Towers Project). Ms. Natarajan requested this Resolution will be tabled due to the previous resolution not passing the Board. A motion to table the Resolution was made by Ms. Castro and seconded by Vice Chair Davis; and the Resolution was adopted by the affirmative votes of Chairman Harris, Vice-Chair Davis, Ms. Castro, Ms. Kane, Mr. Malleris and Ms. Rapp. 3. Chairman Harris indicated that the Asset Management Transactions would now be discussed. A. Executive Director Hamernik introduced the following agenda item: 16-IHDA-158 Resolution Authorizing a Transfer of Physical Assets, Assignment and Assumption of Loan and Transfer of HAP Contract for The Coventry Apartments (TEB-2094) Rock Island, Illinois. Ms. Cooper stated that on March 1, 2005, the Authority made a first position mortgage loan in the original principal amount of $5,879, ( Loan ) through the issuance, sale and delivery of its Housing Bonds, Series 2005 A to Rock Island Venture and LaSalle Bank, National Association, as successor trustee to American National Bank and Trust company of Chicago, not personally but as Trustee under a Trust Agreement dated May 1, 1979 (collectively, the Owner ) for the rehabilitation, construction and permanent financing of a multifamily housing development commonly known as The Coventry Apartments located in Rock Island, Illinois ( Development ). She then stated that the Loan is evidenced by a First Mortgage Note ( Note ), secured by a First Mortgage, Security Agreement and Assignment of Rents and Leases ( Mortgage ) and governed by a Regulatory and Land Use Restriction Agreement ( Regulatory Agreement ), together with the Note and the Mortgage, ( Loan Documents ). She added that the Owner desires to transfer 100% of its ownership interests in the Development to Coventry Apartments, LLC ( New Owner ) and the New Owner desires to assume the obligations of the Owner under the Loan and the Loan Documents ( Ownership Transfer ) and that Harris F. Webber, the 100% Member of Rock Island Venture, LLC ( Current General Partner ), desires to transfer 100% of his ownership interests in the Current General Partner to James Carmichael and Eugene Levental ( New Owner s Members ), and the New Owner s Members desire to assume the obligations of the Current

7 Page 7 of 8 General Partner under the Loan and the Loan Documents ( GP Transfer ), as described in Exhibit A attached to the Resolution. She further added that the Development is currently under a Section 8 Housing Assistance Payments Contract that covers 100% of the Development s units and expires on January 31, 2021 ( HAP Contract ) and the Owner desires to transfer the HAP Contract to the New Owner (together with the Ownership Transfer and the GP Transfer, the Transfer ). Ms. Rapp asked if the Board was voting on the Management transfer. Mr. Veenstra stated that the Board is voting on a change in ownership and not a change in the property manager per se. A motion to adopt the Resolution was made by Mr. Malleris and seconded by Ms. Rapp; and the Resolution was adopted by the affirmative votes of Chairman Harris, Vice-Chair Davis, Ms. Castro, Ms. Kane, Mr. Malleris and Ms. Rapp. B. Executive Director Hamernik introduced the following agenda item: 16-IHDA-159 Resolution Authorizing a Loan Modification for Emerald House II-CSLC (HTF-546) Chicago, Illinois. Ms. Cooper stated that on July 2, 1996, the Authority made a first position mortgage loan under the Illinois Affordable Housing Program in the original principal amount of $88, ( TF Loan ) to Community Supportive Living Systems, Inc. ( Owner ) for the rehabilitation and permanent financing of the housing development commonly known as Emerald House II- ( Development ). She then stated that pursuant to the terms of the TF Loan, Owner is required to make one single principal only payment in the full amount of the TF Loan on July 2, 2016 ( Maturity Date ). Ms. Cooper further stated that the Owner has requested that the Authority modify the TF Loan as follows: (i) extend the Maturity Date for a period of five (5) years; and (ii) forgive the balance of the TF Loan at the end of the five (5) year extension provided the Development remains in compliance with its mission (collectively, TF Loan Modification ), as described in the summary of the Development attached to the Resolution. Ms. Rapp inquired about the structure of the forgivable loan versus a grant. Mr. Veenstra responded. Chairman Harris advised that they should be thinking beyond year 5. A motion to adopt the Resolution was made by Vice Chair Davis and seconded by Mr. Malleris; and the resolution was adopted by the affirmative votes of Chairman Harris, Vice- Chair Davis, Ms. Castro, Ms. Kane, Mr. Malleris and Ms. Rapp. IV. Public Comments other than responses to Member questions during the course of the meeting, no public comments were made. V. Chairman Harris indicated that the Committee Minutes would now be considered.

8 Page 8 of 8 1. Finance Committee Report, Ms. Kane presented the Finance Committee Report from the meeting. Ms. Kane recommended the Members approval of the minutes from the September 16, 2016 Finance Committee meeting. A motion to adopt the Resolution was made by Ms. Kane and seconded by Vice Chair Davis; the Resolution was adopted by the affirmative votes of Chairman Harris, Vice-Chair Davis, Ms. Castro, Ms. Kane, Mr. Malleris and Ms. Rapp. VI. Written Reports: Chairman Harris referred the Members to the electronic Board book material for the following reports: Hardest Hit Fund, Human Resources, Authority Financial Statements, Contract List, IHDA Investment Portfolio. Mr. Malleris asked why the HHF Report didn t show any additional funds going to MRF. Mr. Selke indicated that was never the intent and someone would follow-up with Mr. Malleris to show him the Resolution. Vice Chair Davis asked that the HR Report include a column showing the actual salary of a new hire as opposed to the salary grade range. VII. Executive Closed Session: At 10:56 a.m., Chairman King moved that the Board retire immediately to a Closed Session pursuant to the exception noted under Section 2(c) (7) of the Open Meetings Act to discuss the sale of purchase of securities, investments, or investment contracts. Vice Chair Davis seconded the motion and the Board approved the motion by the affirmative votes of Chairman Harris, Vice Chairperson Davis, Ms. Castro, Ms. Kane, Mr. Malleris and Ms. Rapp. After a brief restroom break closed session commenced at approximately 11:10 a.m. Those present in the closed session included the 6 Members present at the meeting. Executive Director Hamernik, Mr. Caine, Mr. DeCoux, Ms. Moran, Ms. Jurmu, Ms. Olson and Ms. Ohle. The Board reconvened in open session at 11:57 a.m. Chairman Harris stated that no action had been taken at the closed session. Adjournment: Chairman Harris adjourned the meeting at 11:59.