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HomeMy WebLinkAbout20220690 Crescent and Jefferson Petition for Zoning Amendment Narrative ResponseLIBERTY AFFORDABLE HOUSING INC. P . O . B ox 549 R o m e , N e w Y o r k 1 3 4 4 2 315/334-9333 The below are responses to some inquiries the planning board raised during the October 27, 2022 meeting. Re-syndication: An extension of the time frame for affordability compliance When Low-Income Housing Tax Credit (LIHTC) properties reach year 15 of their initial tax credit compliance period, the Limited Partner (Investor Member) will typically leave the partnership at that time as they have already received the benefit of the tax credits. The general partner has an opportunity for a re-syndication of LIHTC. This provides a source of funding which can be utilized to update aging structures. Re-syndication is an attractive option given the current strong tax credit equity market and the state’s interest in funding which helps preserve existing affordable rental housing communities. Most LIHTC properties at year 15 are faced with extensive physical needs but inadequate reserves to address them. All major building components (i.e HVAC, roof and interior updates) are nearing the end of their life cycle and the building(s) and units will typically need to be modernized in order to keep up with the competitive market of the newer housing developments in the community. Re-syndication gives the general partner the needed financing to achieve the projects physical needs. When a project is re-syndicated, one of the requirements is the project “re-sets” the 30-year affordability clock and the compliance period starts over upon the LIHTC closing. The result is that the project ends up with a minimum of 45 years of affordability. Timing of Sunset Provision: The planning board inquired about the timing of the 5-year sunset provision. The below provides the anticipated Liberty schedule for the Saratoga project. As has been outlined, this process is minimally 3 years. Delays can result in the Liberty application missing more than a year or two of funding streams, depending on funds available and other projects already in the pipeline. As you can see from the below, the Liberty Saratoga project is only on the second step, but it is no longer on schedule. The shifting of the municipal approvals impacts the later timeline items which are contingent upon the approvals being granted. The sunset provision is purposely elongated in order to allow for these unanticipated delays because some of the tasks are beyond Liberty’s control. These include, but are not limited to, the municipal approval processes and meeting schedule timelines, requirements by necessary funding partners and governmental agencies that depend on the turn-around time/completion of due diligence items involving outside consultants, and lastly, the availability of NY state’s subsidy dollars affecting the timing of our project application and slotting of our project within the funding pipeline. Date Task Description Comments 2/1/2022 - 3/1/2022 Initial due diligence - Concept Phase Develop Concept, Environmental Investigation, designs/drawings, etc. 4/1/2022- 12/31/2022 Municipal Approvals Amendment to Zoning (City Council), Height Variance (ZBA), Site Plan (Planning Board) NOTE: The anticipated timeframe for these approvals has been delayed, which will modify all the other dates. 12/31/22 Contract to Purchase Land Expires The landowners’ agreement to extend the Purchase Option will be necessary if determined that we have obtained municipal support needed to continue. LIBERTY AFFORDABLE HOUSING INC. P . O . B ox 549 R o m e , N e w Y o r k 1 3 4 4 2 315/334-9333 1/1/2023- 6/30/2023 Prepare for submission of HFA Application Identify LIHTC Syndicator, appraisal, application and underwriting model July 2023 Application to HFA State funded Project applications have already been committed for 2023 and into first quarter of 2024. In each year, there is competition for funding, and once funding has been committed, it pushes applications into future years’ funding cycles. Our hope is to get into the NYSHFA (NYS Housing Finance Agency) pipeline as soon as possible to be awarded by YE 2024 or first QTR 2025. *It is important to note that the application cannot be made for funding absent municipal approvals. The state carefully examines the city’s support, or lack thereof, for projects and considers that in their awards. September 2023 Tax Equity and Fiscal Responsibility Act (TEFRA) Hearing before Housing Finance Agency (HFA) Note: A TEFRA hearing is a public inquiry required by the IRS of non-profit borrowers that intend to issue tax-exempt debt. 9/1/2023 - 6/30/2024 HFA diligence period Liberty provides answers and back-up documentation to HFA questions and requests for additional information. July 2024 HFA Credit Committee Approval Once HFA is comfortable with the application and our response to their due diligence requests, HFA will present the project to their credit committee for approval. September 2024** HFA Board Approval Once credit committee approves, the project is submitted to the HFA Board for review and approval. Late fall- 2024 Local Approvals Building permits and other local approvals will be required to be submitted formally as to not cause funding delay. Building permit may take 12+ weeks. January 2025 Closing and Project Funding Final Closing of Real estate purchase occurs with project funding approximately 1 week later. Spring 2025 Construction Commencement ** This timeline could be delayed by as much as 12-18 months depending on approvals of all above requirements and steps. It is anticipated that the HFA pipeline will continue to be filled at a rapid pace with the current housing shortage crisis. Any delays in Liberty’s application submission will push the project farther out into the pipeline for funding.