san diego housing commission transition of assets from a ... pdfs/presentations/south east...
TRANSCRIPT
Richard C. Gentry
President & CEO
San Diego Housing Commission
San Diego Housing Commission
Transition of Assets from a Public Housing Model March 6, 2013
2005:
• Federal subsidies were decreasing and dependency on housing programs were not sustainable
• Difficult to set aside adequate funds for on-going maintenance and future capital improvement
needs (aging portfolio)
• Traditional public housing model was not sustainable for this large portfolio
(1,366 units in 137 properties)
Action:
• In the FY2006-2008 Business Plan, SDHC committed to reducing its dependency on Federal
subsidy and housing programs through asset development and enhancement of alternative
financial resources
• SDHC application submitted to the U.S. Department of Housing & Urban Development (HUD)
November 2006
• HUD approval in September 2007—landmark agreement, largest public housing conversion at
the time
SDHC Background
2
SDHC requested and HUD Approved:
• SDHC to own and operate 1,366 units of Public Housing
• Rents at or below 80% AMI for Families and 50% AMI for Seniors
• Housing Choice Vouchers awarded to all tenants with an option to relocate
• SDHC to leverage equity in former Public Housing (PH) portfolio (1,366 units)
• Create a minimum of 350 additional affordable workforce housing units
• rents at or below 80% AMI
• affordable for 55 years
• Sale Price of $1.00/unit = $1,366
SDHC Background – HUD Approval
3
Phase 1
• Withdraw approximately $100 mil. in equity from former PH portfolio
• Former PH portfolio to support debt service
• Acquire/Invest in new affordable rental units
Phase 2
• Refinance new acquisitions to acquire more affordable housing
Critical Aspect of Plan - minimal risk and diversification
• Minimal Financial Risk (low LTV, several lenders, high DSC, etc.)
• Acquisitions/Investments (type, location, age, size, etc.)
SDHC Finance Plan
4
Loans proceeds to be spent on Public/Private partnerships
• Approximately 40% of total capital funds
• Good vehicle for SDHC Investments in Tax Credit transactions
Loans proceeds to be used on Publically Owned acquisitions
• Approximately 60% of total capital funds
• 100% SDHC or in partnership with another municipal agency
• Also utilized BAB’s funds (Build America Bonds)
Meetings:
• Real Estate Developers (Nonprofit and For Profit)
• Public/Neighborhood Groups and the Business Community
• Appointed and Elected Officials (HC, HA, IBA, LU&H)
SDHC Finance Plan - continued
5
Loan Underwriting – Risk Averse
• FHA/Fannie Mae
• 70 - 75% LTV
• 1.37 DCR
• Fixed interest rate, 30 year vs. 10 year
• Reserve Accounts established
Loans Closed - $95 Million Raised in Total
• Fannie Mae – December 30, 2009
• $37,140,000, 30 year amortized, 7.32% interest rate
• FHA - August 31, 2010
• $58,243,400, 35 year amortized, 3.76% interest rate
• Effective interest rate of 2.44% with BABs rebate
SDHC Due Diligence for Financing
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SDHC Partnership Investments
Partnerships # of
Units (incl.
Mgr’s Units)
# of
Affordable
Units
Type SDHC Investment
SDHC
Investment per
Affordable Unit
Acquisition/Rehab
Arbor Village Apartments 112 111 Family $7,980,976 $71,901
Vista Grande Apartments 49 48 Family $3,851,025 $80,230
New Construction
Riverwalk Apartments 50 49 Family $4,525,391 $92,355
Estrella del Mercado Apartments 92 91 Family $7,111,224 $78,145
Mission Apartments 85 84 Family $6,027,000 $71,750
Park Terramar Apartments 21 20 Family $2,151,699 $107,585
Total 409 403 $31,647,315
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SDHC Owned Investments
Property
# of
Units (incl. Mgr’s
Units)
# of
Affordable
Units
Type SDHC
Investment
SDHC
Investment per
Affordable Unit
Acquisition/Rehab
Hotel Sandford 130 129 Senior $6,460,700 $50,083
Mariner's Village Apartments 172 171 Family $34,819,289 $203,622
Courtyard Apartments* 37 37 Family $7,851,633 $212,206
Park Crest Apartments 71 70 Senior $8,915,520 $125,571
Total 410 407 $58,047,142
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*No Manager’s Unit
SDHC Total Investments # of
Units (incl. Mgr’s
Units)
# of Affordable
Units
SDHC
Investment
Total 819 810 $89,694,457
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SDHC Owned Investments
• 129 Affordable Units (Seniors) and 1 Manager Unit • Acquisition/Rehabilitation (Occupied) • SDHC Investment: $6.4 million ($50,083/unit) • Remains affordable for 99 years • To be completed: Early 2013 • Transit-oriented development • Historic
• 171 Affordable Units and 1 Manager Unit
• Acquisition/Rehabilitation (Occupied)
• SDHC Investment: $34.8 million ($203,622/unit)
• Remains affordable for 55 years • Renovations of nine units to ADA • Transit-oriented development
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Hotel Sandford Mariner’s Village Apartments
SDHC Owned Investments
• 37 Affordable Units • Acquisition (Occupied) • SDHC Investment: $7.8 million ($212,206/unit) • Remains affordable for 55 years • Foreclosure • Transit-oriented development
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• 70 Affordable Units (Seniors) and 1 Manager Unit • Acquisition/Rehabilitation (Occupied) • SDHC Investment: $8.9 million ($125,571/unit) • Remains affordable for 55 years • Transit-oriented development
Courtyard Apartments Park Crest Apartments
SDHC Partnerships: Acquisition/Rehab
• 111 Affordable Units and 1 Manager Unit • Acquisition/Rehabilitation (Occupied) • SDHC Investment: $7.9 million ($71,901/unit) • Total Cost: $24 million • Remains affordable for 55 years • Transit-oriented development
• 48 Affordable Units and 1 Manager Unit • Acquisition/Rehabilitation (Occupied) • SDHC Investment: $3.8 million ($80,230/unit) • Total Cost: $15.1 million • Remains affordable for 55 years • Transit-oriented development
Arbor Village Apartments Vista Grande Apartments
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SDHC Partnerships: New Construction
Riverwalk Apartments Park Terramar Apartments
• 49 Affordable Units and 1 Manager Unit • SDHC Investment: $4.52 million ($92,355/unit) • Total Cost: $14.1 million • Remains affordable for 55 years • Transit-oriented development
• 20 Affordable Units and 1 Manager Unit • SDHC Investment: $2.15 million ($107,585/unit) • Total Cost: $7.6 million • Remains affordable for 55 years
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Estrella del Mercado Apartments Mission Apartments
• 91 Affordable Units and 1 Manager Unit • SDHC Investment: $7.1 million ($78,145/unit) • Total Cost: $43 million • Remains affordable for 99 years • Transit-oriented development
• 84 Affordable Units and 1 Manager Unit • SDHC Investment: $6.02 million ($71,750/unit) • Total Cost: $25.9 million • Remains affordable for 55 years • Transit-oriented development
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SDHC Partnerships: New Construction
SDHC Real Estate Property Investments –
Locations www.sdhc.org
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• Individual property statements generated
• Utilization of new property specific documentation
• Strategic use of procurement processes = expeditious due diligence
• Creation of TOD Plan and energy sustainability guidelines ongoing at same time
• Performed capital improvements on properties to improve marketability to lenders
• Improved efficiency of operations via implementation of private sector
methodologies (enhanced Property Management approach)
SDHC Beneficial Outcomes and Results
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Creation of Portfolio Management Department
• Creation of Risk Rating system to identify portfolio concerns
• Managing on-going lender requirements
Replacement reserves
• Strategic plan for accumulating adequate reserves
(Physical Needs Assessment) and capital budgeting needs
• Establishment of reserve accounts - year 15 acquisition options
Continuous and integral collaboration for reporting requirements
• All business units
• Regular updates to SDHC Board of Commissioners and Housing Authority of the City of
San Diego
SDHC Beneficial Outcomes and Results
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SDHC Next Steps
Continue actively monitoring portfolio • Physical Needs Assessment
• Reserve Analysis
• Routine Reviews (HA/HC and Project Status Meeting)
Conduct analysis for potential Phase 2 of acquisitions • Equity refinance of Mariner’s Village, Courtyard and Park Crest
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SDHC Timeline
HUD
Application
2006
HUD
Application
Approved
2007
Collection of Section 8 vouchers &
Development of the Finance Plan
Finance Plan
HC/HA
Approval
2009
Due Diligence
Critical / Non Critical Repair
Loan Underwriting / Closing
LLC Formation
Project Selection
Acquisition / Investment
Time
Project Underwriting
Project Approval
Project Due Diligence
Project Construction, Monitoring, Portfolio Management
Oversight, Financial Analysis, Ongoing Update Reports
Fannie Mae
Loan Closing
Dec 2009
First Acquisition
Hotel Sandford
March 2010
FHA
Loan Closing
August 2010
Phase II - Refinance of newly acquired assets
2006 2013
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