Master Plannning - Regular Meeting

Okay, it is 830. I am going to call the Corpus Christi Type B Corporation meeting to order. Ms. Huerta, would you please call the roll?

President Diana Summers. Here. Vice President Jesus Jimenez.

Here.

Secretary Mark LaRue.

Here.

Board members Victoria Holland. Here. Johnny Filippello. Here. Duke Conchola.

Here.

Claudia Mustagashi is absent. Okay, we do have a quorum present to conduct the meeting.

Thank you. Up next, we have public comment. Do we have anyone here that would like to make public comment? Seeing none, Ms. Huerta, have you received any public comment?

No, ma'am.

Thank you. Item D, executive session items. The board will go into recess in its regular session and reconvene in executive session pursuant to Texas Government Code Section 551-071 and Section 551-087. We will return. Thank you. All right, it is 10.09. I'm going to reconvene the Type B Corporation meeting. Ms. Huerta, can we please have the record reflect that Ms. Mostogashi joined us and Mr. Conchola had to leave?

Yes, ma'am.

Thank you. Up next is our agenda items. Item number two, consider action on the 2024 business incentive agreement between the Corpus Christi B Corporation and Elevate QOF LLC. Is there a staff presentation? Seeing none, does the board have any motions?

Madam Chairman. I'd like to make a motion, a resolution of the Board of Directors of the Corpus Christi B Corporation, terminating the business incentive agreement between the corporation and Elevate QOF LLC for the development of a hotel and retail project, approving a termination settlement and release agreement between the corporation and Elevate QOF LLC, and substituting the termination settlement and release agreement, therefore directing the president to execute the agreement and the secretary to attest the agreement directing the delivery of document directing the transfer of Consideration providing for repeal providing for severability and providing an effective date Is there a second second all those in favor say aye aye any opposed say no and the motion carries

With that, we want to state that we remain hopeful that by bringing this chapter to a close for the Type B Corporation, this will support the ongoing efforts of the parties in litigation to reach a resolution that will bring this matter to a conclusion. It is our sincerest hope that doing so will allow all involved to move forward in the best interests of the citizens of Corpus Christi and restore the community's full attention to the priorities and issues that matter most to the residents of our beloved city. With that, we are going to take a 15-minute recess. We will reconvene. All right, it is 1047. I'm going to reconvene the Corpus Christi type B meeting. As we have some guests here that have been waiting very diligently, I'm going to move to the public hearing items and come back to agenda item number three. Public hearing item number four has been withdrawn by staff. We're gonna go a bit out of order and go to public hearing item number six. Public hearing in motion authorizing eight Corpus Christi B Corporation small business assistance agreements with the following entities for two years. Lift Fund, Inc., Service Corps of Retired Executives, Texas A&M University, Corpus Christi, and Del Mar College for a total amount not to exceed $1,000. to assist small businesses within the city of Corpus Christi to invest and create and retain jobs. Is there, I'm going to, is there a staff presentation? Excuse me.

Sarah Tindall with the Corpus Christi Regional Economic Development Corporation. Thank you for hearing us out today and considering this item. This is my favorite item that we bring to you every year because everyone, including you guys, always asks what we do to support small businesses in our community. And these programs are the boots on the ground that help us to get the funding and the business supports that these small businesses need. to help them get started and then to also grow in our community. So we're asking for a total of 1.226750 on all of these grants together. I had a PowerPoint presentation that I printed for everyone. Do you guys have it? Because there's a test later. What I want to do is highlight what the programs are asking for this year and then how they helped businesses individually last year so you can kind of see what that impact was. So we're going to start with SCORE. SCORE is asking for $98,500 for this upcoming fiscal year. Last fiscal year, They delivered 2,000 service hours and 89 workshops to more than 1,600 attendees, with a 96% client satisfaction rate. The funding will retain staff to coordinate workshops and client intake, ensuring continued high-quality mentorship for our entrepreneur community. So that's Service Corps of Retired Executives funding. Next is Lift Fund, asking for $75,000 for their interest buy-down program. In fiscal year 2025 alone, 10 loans totaling $281,596 helped to create 26 jobs and retain 45 more using that program. The Texas A&M University Jobs and Development Internship Program is asking for $199,500. Last year, they supported 66 employers and 85 student interns. Eight of those interns converted to full-time roles through that program. So that's keeping local students local, which is a really, really important part of this program. Now, Del Mar also has an internship program, and they are asking for $150,000. They placed 105 interns with 74 employers in 2025. Eight of those transitioned to full-time employment, and seven of them are pursuing higher education. another wonderful internship program. So those are where we match the intern wages. So as those interns go through with the local employers, the local employers will pay them and then the internship pays them and that way they can be making as much as they would be making as employees there and it really helps for the employers and for the interns to be able to make that work. So that program's been going on for several years and has resulted in lots of full-time employers, employees coming through from Del Mar and A&M into our local workforce. Okay. Apex accelerator is asking for $160,000. They, let's see, they supported 274 million in contracts and 5,488 jobs in 2025 alone. That's a big one. Um, Apex Accelerator helps to get folks who are doing government contracting. Contract Resource Center, $150,000 requested. They assisted 224 clients and facilitated $1.7 million in contracts in 2025. the Del Mar College Cyber Center, which is a fairly new program and is really helpful because there have been a lot of new requirements that have come in from the feds on what cybersecurity companies have to do to remain in compliance. And a lot of them, local companies, had been concerned about the cost and also the implementation process for those cyber programs. So Del Mar stepped into the breach and did a wonderful job building this program. And then they have all these companies coming through. So it's not only helping them to meet those requirements, but it's also making our businesses more secure here. So they supported 51 businesses with cybersecurity compliance and training in the past fiscal year, helping five achieve the CMMC compliance to retain Department of Defense contracts. Very important. They also trained 239 attendees and placed eight interns in full-time IT roles. We've talked before with this group and with the city council about the difficulty that we've had in getting IT jobs into our community and then also attracting and retaining those jobs. So eight interns and full-time IT roles through this program last year has been a wonderful addition. And then last but not least, the Small Business Development Center at Del Mar College, which is asking for $198,750. Last fiscal year, they assisted 633 businesses, facilitating $17 million in capital investment and supported the creation or expansion of 101 businesses in 2025. So it's a lot of numbers and it's a lot of impact. You've got it on your PowerPoint. Everyone from those programs is here If you'd like to ask them about what they've done and what their impact has been, or if you have specific questions about their programming, they're happy to answer it.

Thank you. Is there any questions from the board on the programs? Seeing none.

Oh, okay. In the past, we've always had... fiscal year comparisons of funding and impact, which I see is missing from this presentation. Would it be possible to get the differentials and fundings requested from year to year, from at least the past fiscal cycle?

Yes, absolutely.

Yes, absolutely. Was it in the agenda, was it in the memo, I believe?

Some of them, but most of them don't. Okay, yes, absolutely.

What we see, too, is year over year, small business, the climate is very good, so we're always ebbing and flowing between 2% and 10%. We've never taken a step backwards.

That is excellent. I would still like to see that year to year, just to It's nice to have the comparisons and it's also nice to be able to tout when we are providing services to more and more small businesses. It's a great story for our region if that is the case. And then I had questions on the internship programs. Do we have a general job salary range for the full-time role positions that the interns were able to transition into?

I don't think that the employers, whenever they transition from being part-time interns to being full-time, and, in fact, you see the same trend between Texas A&M and Del Mar, that typically somewhere between 8% and 15% of the interns turn into full-time employment. But I don't think they typically tell us what they're going to start making, but understand inside of that statute that the small businesses... 50 to zero to you know one to 50 are competing with much bigger businesses because they're hiring those interns in at 1450 and so our anticipation is probably whenever they make them full-time now they're starting right there in that range as well typically a business scenario is if you stay i'm going to give you a dollar two dollars three dollars more than what you're making right now and then it It's in that comparison whenever you look at the stats for those demanded occupations to median wages.

Yeah, we might be able to stratify it kind of a ballpark figure. Yeah. But, you know, so you've got interns that are, you know, at the university in engineering or whatever. And that's going to be different than the ones.

And that's why I queried for a range. You know, we're not going to get a number that is meaningful out of a mean or an average in this particular situation. But it's nice to have a range. Again, it just sort of helps us understand the impact that we may be making. And then the other one I wanted to kind of ask. So. We see that we have fully expended the grant request for fiscal year 24 and 25 for Texas A&M, and now we are being asked to provide about, an increase of about 25% more this year. Will we have more, but it also looks like we have fewer student interns in fiscal year 26. Can we, Can you expand on that?

Good morning.

I'm with Texas A&M Corpus Christi Career and Professional Development Center. So just to give you a background story, so we successfully expanded the 150K request over fiscal year, over the past three fiscal year. So fiscal year 26, which is, we start on the calendar years of January this year through December this year, we did have the approval for an increase of 50K extra to support the business continuity between semester breaks. So right now our programs, they have semester breaks from spring to summer and then summer to fall and then fall to spring. It's about a month break in between while business do have the necessity to run their own operation and then our students kind of like don't have any funding to, we don't have enough funding to support them to continue during the break time. So this actually, the 50K that was approved last year, and we are in the fiscal year 26 right now, in the middle of the fiscal year 26. So we would like to keep or maintain the level of funding for fiscal year 27. But seeing we are in the middle of fiscal year 26 right now, we don't have the entire number to share with you.

So I think I understand what you're saying, but it would be nice to have, if there is an increase in cost, per student, which is what the numbers are reflecting. It would be good to know what that increased in cost per student is, and then it would be great to have it summarized because the duration of the internship is lasting longer, which I believe is what you're communicating.

Yes, yeah. So we have bridge program between semester right now to allow business to continue hiring the interns.

Okay, Ms. Holland, the fiscal year 26 numbers, that's only January through July, whereas the 25 numbers are for the 12 months. So we're only looking at seven months instead.

okay so there will be a new cohort of students this fall that will be later added to this and so the funds are not but these funds are not expended fully on those 53 students okay thank you that helps me a lot thanks appreciate that um all right that that gives me a great peace of mind all right and so then i did also just note in del mar we We don't have a comparison of year-to-years. I'm not so much concerned with grant amount so much as number of interns served.

So in the AV room from the June 8th presentation, there is a budget presentation from June 8th in the Type B folder. Can you bring up that budget presentation? It was item number... Yeah, I think it's the last presentation in the folder. But does it say number of students served? It shows the year-over-year in dollars.

Right, that was my specific question, was do we have a change in increase in students served year-over-year, or is it the same? No, but we have dollars. Okay. Would Del Mar have that information? Yes, yes.

Yeah, and I think the numbers, our numbers typically... keep going up. We become a little bit more efficient every year with the same amount of money, and then our challenge is when we run out of money, we're done for the year.

But that's the good story.

Hi.

Here, let me chime in a little bit. My name is Jackie, or Jacqueline Roberson. I'm the program coordinator for the Delmar College Small Business Internship Program. So not only have we been providing, I've been probably two and a half years serving this role. We provide quarterly reports and also fiscal year, and so we have the whole 12-month of where we started, even from 24, 25, and we turned in up to where we are in 26. And it is broken down by students, full-time students, part-time students, those that have gone on to higher ed. So I know that we've turned all that in. I have it. So if there's a specific number or question, we can resend it. because it's grown every year.

Do you have with you then, so in just 2024 to 2025, number of students that transition to full-time roles year over year?

So I pulled up 24 and 26 where we are. I can probably find the 24 if you give me a few minutes, but I can tell you that for 25, we have higher eds, well, you asked for employment in the area, we had eight year to date, and then we have higher ed seven. So I've already started pulling up 26 numbers and we already have. And again we're only in August we're August 10th so we haven't even finished the third quarter. And right now I have employment in the area as of 6 and I also have higher ed students already that are about 4. And again, we haven't finished this summer semester. We haven't even started the fall semester. That's amazing progress. Thank you so much. It's amazing because not only, I think before we used to put the number down of those that are getting full-time jobs and not counting the ones that are continuing their education at A.M. Corpus Christi for even further education. So then they get handed off to their internship program. They get turned into full-time jobs. So I think I see it as a win as well. All of them aren't getting full-time jobs, but because they're pursuing higher ed. So they're not going into full-time yet, even though they finished with Del Mar, they're not ready for full-time employment. They want to keep going for more education. So I started including both of those numbers.

I really appreciate that. And I really appreciate putting these numbers in focus because it's so important that people realize that what we're funding here is not just something that is stagnant or something that is faltering, you know, that more money is needed because the fruits of that are expanding year over year. Thank you.

And I'll ask a question on even salary. So you have to consider that as an intern, they hadn't gotten their degree yet. Once they graduate, now they can say, not only do I have the experience, but I have my degree too. So then it's the negotiating for what kind of salary they're going to be with that full-time job. You know, they're going to say, now I have my degree. So the $1,450 I was making as an intern, you know. Now I have the degree and I have the six months experience, so what are we talking about full-time? So hopefully it's competitive.

My understanding is that not all interns are graduating. So some of those numbers are reflected that you have underclassmen, freshmen, sophomores, juniors in the college programs that are included in these numbers.

Over the last couple of years I've tried to transition to focus on last year students because some of the educational plans do require internship hours to graduate. So again those that are freshmen sophomore you know the early on they are taking up that internship spot for someone that is trying to get the hours to graduate. So I've kind of molded since I've been there to try and look for those last year students. So right now I'm looking for students to sign up for fall that are going to be graduating either next May or next summer. So again, we're not filling those spots that people are just coming in not sure what they're studying. They're kind of, you know, I just say, you know what, let's pump the brakes, let's pause, let's get you into a program, and once you're a little bit further in, let's get you into an internship.

That's a great strategy, and it gives me a lot of peace of mind that these funds are being stewarded really well. Thank you. um and i think those were most of my questions and mostly just to clarify and make sure that we're uh making a point about what we're doing i did want to mention i think the lift fund interest buy down program is staying the same amount if i have that correct from previous year although it's not written here i think i remember uh what we

All these years walking up this... Good morning, everybody.

Laura Leal Estrada. I'm the market manager for Lift Fund. I service Corpus Christi, the Coastal Bend, and the Louisiana area. Your question is, did the amount stay the same from last year, 75? Yes. It has been observed by myself and others that Although we try very diligently to help many of our business owners who have a need for access to capital, many of them cannot meet our underwriting guidelines. We also are having our SBA microloan programs being utilized quite a bit now because of some of those risk factors that are involved when we have challenging credit and lack of capacity and lack of collateral. And then we also have larger credit amounts being requested. People no longer want to be leasing. They want to buy their own property. Here's an example. One of our clients was funded for $350,000 through our SBA guarantee program. So that was the reason when I spoke to a former colleague of mine, that we decided to keep it at the 75,000. We do have clients that don't understand the SBA program, the risk involved, and when they're, especially if they're startups, And they do get a little upset that they're not being able to get the 5.5% when they're asking for a $60,000 loan in their startup. And so when we offer them the SBA guarantee program, it's a little bit different. And through the SBA program, we have other requirements for collateral. So everything that's available will be used as collateral, so long as there's not a leased lean against it so again we have parallel programs we still have a lot of ask and we have a need to market more to these underserved communities that don't have the time to come and participate in different programs that we make available to them I appreciate that thank you so much thank you and I appreciate the work that you do educating and providing alternatives to people trying to start businesses and start new things here in our city thank you I have great partners at the SBDC, by the way. Yes, thank you.

And then I promise I'm almost done. So I just wanted to look at Apex Accelerator, finally. Again, this is one where we just don't have a comparison year over year from 2024 to 2025 in our presentation. And I would...

No, here we go, Bobby. We're going to do the shuffle over here.

What's that song? Something shuffle, anyway. So your question, oh, I'm sorry. My name is Robert Miraval, and I am the director of the APIC Accelerator Program at Del Mar College.

Thank you, Robert.

You're welcome.

Do you have a comparison year over year from 2024 to 2025 amounts in contracts and created or retained job positions?

I sure do. And, well, I don't want to overwhelm you with numbers, but the main categories you wanted were the contract dollar value?

Yes.

The total value of contracts in 24 was $254 million. The total value of contracts in 25 was $371.2 million. So it was quite an increase.

That is quite a bit more than is in our presentation, even. Mm-hmm. Very interesting. And wow, great job.

And this year, I mean, I know you didn't ask this year, but so far from January through June of 26, in six months, we're at $232.374 million, which is trending about 12% more than $25 million.

That is stupendous, absolutely. So for what is essentially a fairly small investment from the city's use of funds, we're able to generate an enormous level of business in this area that provides and supports jobs and really the continuation of our community as a successful community.

And the DOL and the Department of Labor They're still using a factor of $50,000 for a full-time job. Yes, they need to update that, but they're still using the factor of $50,000 per full-time job created or retained. So if you look at the number from 2025, $371.2 million of contracts awarded, that translates to 7,424 jobs, full-time jobs that were created or retained. So, and we're running ahead of that again this year. So that's, you know, I'm hoping that we'll eclipse 8,000 full-time jobs this year.

I really appreciate it. So again, thank you so much for answering my questions. I do think it's important to have it out there that we are not just funding something that, you know, the city throws money at because it's probably a good idea and we hope for the best. We have metrics and data that support that we're seeing year-over-year growth and investment in our community. Thank you.

That's it. In fact, in the midst of this, one of our successful approaches is the fact that it's actually chartered to target government entities federally. But we don't stop there. We go state, city, local, county, Porta Corpus Christi. So all of those are under that contract number. So as time goes on, more success is out there. So then we just keep getting the phone just keeps ringing. So and in fact, if there was one word to use in all of these programs, it's called intentional. We're very intentional in seeing the demand and then meeting those demands, especially now with cyber. Cyber touches everybody and everything. And so that's going to be the next big bow wave when it comes to the feds requiring CMMC training because it's going to go across the board at everybody, small business, large business, all need cyber something. And so we're right on the cutting edge.

Thank you so much. Are there any other questions from the board? I want to say thank you. I've seen these programs grow over my tenure here, and to see them being utilized and the success and the students that we're retaining locally is just a really wonderful thing. So thank you for all the hard work that y'all have poured into these programs.

And many thanks to the Type B Board for always supporting us and being there for the next step, because there's going to be next steps.

Real quick, I want to echo what our president just mentioned. You pretty much go full circle. Not only do you help small businesses thrive and grow or get established, you also help them through the internship program and then into the new cyber center. I think that is going to be something that's going to be really it's it's since infancy I guess right now as far as the center but the requirements are changing almost daily so that is going to be I think you're in the at the right time and yeah creating the right internships and the right program for it and it's going to be I think I think this is one that we're going to see grow pretty pretty fast and yeah and for a fact I know the our IT providers looking for personnel. So make sure to let them know.

Send them our way. Send them our way. We can help.

Thank you all for everything you do.

And many thanks to the CCRDC and most important to my staff who gets it done. Thank you so much.

Excellent. Thank you. With that, I'm going to open the public hearing on the item. Ms. Huerta, have you received any public comments? No, ma'am. Is there anyone here that would like to make public comment on the item? Seeing none, I'm going to close the public hearing and I will entertain a motion.

Motion to approve funding. I second.

All those in favor say aye. Aye. Any opposed say no. The motion carries. Item number five in our public hearings is public hearing and resolution authorizing the 1525 North Shoreline Boulevard Property Acquisition Program project for economic development of tourism, convention, concession, public events, and or parking facility. Is there a staff presentation? Yes, ma'am. Oh, no, did somebody...

Good morning. I'm Jennifer Buxton with Planning and Economic Development Department. Not so much. Nope, Zach. Hang on folks, please, I'm sorry. Thank you. Okay, let's try again. I'm Jennifer Buxton with Planning and Economic Development. The item before you is the required public hearing and it does include an amendment to add closing costs to the approval that we did last month. Again, 1525 North Shoreline Boulevard You can see the piece. It is directly to the south of the Hilliard Center there. That is Resaca between the Hilliard Center and 1525 North Shoreline. It sits on the corner of Resaca and Shoreline. There's a couple of pictures of the exterior of the building. For the background, in June 8th, 2026, Corpus Christi B Corporation authorized staff to begin deliberations and negotiations for the acquisition of the property. On July 13th, Corpus Christi B Corporation approved the real estate purchase contract with Shoreline Diversifications. The negotiated purchase price was approved at $646,875. The property is adjacent to the Hilliard Center and is being considered as an extension of the complex. Today's requested action, staff is recommending approval of the resolution to authorize the 1525 North Shoreline Boulevard Property Acquisition Program Project, approve the $646,875 for the property purchase, approve $10,500 for closing costs, which includes surveys and inspections, for the total acquisition amount of $657,375, and of course to hold the required public hearing. And the purpose of the project is to support the continued expansion, functionality, and utilization of the Hilliard Center complex.

Does that conclude your presentation? Yes, ma'am. Thank you. Are there any questions from the board? Seeing none, I'm going to open the public hearing. Ms. Huerta, have you received any public comment on the item?

No, ma'am.

Is there anyone here that would like to make public comment on the item? Seeing none, I'm going to close public comment and I will entertain a motion. Is there a motion?

I'll make a motion to approve.

Is there a second?

Second.

All those in favor say aye. Aye. Any opposed say no. The motion carries. now going back to our agenda items item number three is a motion authorizing the first amendment to the affordable housing project loan agreement between the corpus christi b corporation and corpus christi huntwick avenue lp commonly known as the palo verde senior apartments is there a staff presentation yes ma'am

I'm Jennifer Buxton. I'm with Planning and Economic Development. We've discussed this project before. This is the Palo Verde Senior Apartments. It is at about Huntwick and Staples, just east of the big staples there on, or excuse me, HEB on Saratoga. Danco Communities is the developer. The address is 5501 Huntwick Avenue. It is in District 5. It's an 80 unit deal, 75 of which are affordable units. They are all for seniors. There's five market rate units. The total development costs are about $23 million. Since December, when you saw this project last, tax credit equity pricing for the deal and debt capacity has decreased based on the way lenders are underwriting rents locally. The project does have $1 million in U.S. Department of Housing and Urban Development home funding through the city's entitlement allocation awarded to it. And this board has previously, back in December, awarded $1 million from the Type B. Those are loans, 3% simple based on cash flow waterfall. Today the request is an additional $1 million from Type B. I do want to make a point here. You can see on the map the site in the big yellow square, everybody can see that. One of the things I'm gonna show you in the next slide is that they have, in order to address capital shortfalls, one of the things that they're doing is purchasing only the southern half of that site. It's not done, it's part of this proposal, is that if the project continues, they're gonna purchase the southern half of the site and put all facilities there. It's still about three, It's still about three acres, a little over three acres. It just won't be up on Huntwick. It will be back with an entrance, and they're still looking at doing the sidewalk along Huntwick to the HEB. Palo Verde development costs... You can see how this is tracked over time from their pre-application into further development. You'll notice the land cost has gone down, and that's why they're looking at halving the site. Construction costs have been stable since December. There have been increase in soft costs. Financing fees have gone down a little bit. The developer fee is the same, and there has been an increase in reserve. bringing us to the 2303325. I want to talk a little bit about the sources. You'll notice the change in lender, which is the debt capacity, which is how the lenders are underwriting rents in our market. And Mr. Matthew Ames can answer some questions about that if you have them. He's here with Danco today. And I think we may or may not have had Chris on the phone, but he had to jump at 1130 for another meeting. So I don't know if we've still got him or not. The home loan of a million dollars. This sources does show type B affordable housing at... $2 million. The low-income housing tax credit equity has decreased to 14.2, and the deferred developer fee has increased, bringing the sources and the uses to equal 23 million.

Ms. Buxton, he is on, Mr. Dart, in case you need him.

Thank you. And that concludes my presentation. Mr. Matthew Ames and Chris Danko are with us today to answer questions from the developer.

Are there any questions from the board? I have a couple. So you've said that they're going to go to about a three acre developed project?

The project was always about three acres. The purchase of the land is no longer the larger piece. It is only about the three acre site that they need. for the development.

So the original proposal of the land was not all going to this property?

Correct. It was a larger parcel, but in order to bring down some costs, they're almost having the site going to the back half of the lot, and we'll have access onto Huntwick and include then the sidewalk along Huntwick to the AGB.

So there's been no reduction in the overall units from what was originally approved? It is just... there will be less green area owned by Danco properties.

Yes, ma'am. There are still aspects on the back side. They're looking at how their site is going to lay out now, and I can have Matthew talk about what those site amenities might still include. Excuse me, but they are still working on their civil. Correct, but it is still 80 units, 75 affordable, all senior, four persons at 30, 50, 60, and then the five market rate units.

Okay, and one of the big things I know that we discussed when we originally approved this project was the walkability of this. We didn't want people walking up and down Huntwick, being that that's a pretty well-traveled road into that HEB, so the sidewalks are still part of this project.

Yes, ma'am, that's not negotiable.

Excellent. Can you bring back the chart with all the expenses?

You bet.

Thank you. A couple of things that just pop out here. We have seen some reduction in the hard costs, which is great, and a little bit of fluctuation in the soft costs as well as the financing costs. One of the things that stood out to me is the reserves. Those have increased. Is that a requirement?

Matthew, do you want to come? So the operating reserves, replacement reserves are usually a requirement at a baseline in order to move forward with your tax credits. But Matthew can tell us further.

I'm waiting for Matthew Ames with Danco Communities. The reserves are actually a requirement of the lender. And so that's what they're, we now have lenders on board and that's what they're requiring.

Okay, thank you. And I'm so sorry, can we go to the next slide? So a couple of things on here. So the $2 million that will be coming from us, Ms. Buxton, in your presentation, you spoke on the million dollars that was originally approved as a loan, would that $2 million still be as a loan at the 3%?

Yes, ma'am, three, simple interest, Payable from income from net cash flow.

Okay.

It would still be a waterfall. And I believe the type B loan is in second position over the home loan.

Okay, so the type B would come first over home.

Yes, I believe so.

Okay.

Are there any other questions?

What do the reserves cover? Is it like a contingency or?

They're actually operating reserves for stabilization. Okay. And so in order for the property to pay bills, they have to have a reserve in place that they, in case they need to tap into during stabilization or any sort of market fluctuation where they're not able to get rented up at the rents they need or the rents where it was underwritten.

Okay, so it's an operation fund type deal. Yes, sir. What about the, on another, you're purchasing three acres in the back property, Is there a future plan to purchase the front, or what is the plan for the front? And also, too, with the three acres, now you're in a smaller site, are you going to be able to accommodate all the parking and everything that's required for increases?

Yeah, so the seller is going to retain the front two acres, and I don't know what their plans are for that. And then on parking, we're going to be able to accommodate all the parking that we had initially planned to have. We do have a parking. It's a reduced parking. I think it's 70 spaces. Okay. But none of the parking changes, none of the amenities change. We're just collapsing it into three acres.

Okay. So the frontage, in essence, could become a commercial spot for businesses, right? Yeah. Coffee shop or other stuff or whatever. Okay. Thank you.

Looking at the face of this, overall costs have decreased while your request for funding has increased. Could you go a bit more into the specifics of why you need the additional funding increase? I know it's been mentioned, and I appreciate that, but could you... And could you expand on that a little bit more because it wasn't and it may be difficult for a taxpayer to understand why it's necessary to increase funding to ensure that this facility can be built and operate the way we want it to be operated.

So there's two main things that have happened in terms of other sources of financing. The first is when we came here in December, we were showing 75 cents as what a tax equity investor, tax credit equity investor would pay for our tax credits. That's reduced to 73 cents. We have a letter of intent that we shared with the city that shows that. And so that represents about $400,000 of decreased financing. And then... Since then also interest rates for the lending that we've been going for as well as how lenders are underwriting our project is slightly different than how we underwrote the project. So they're allocating different rent amounts to each unit which lowers our debt capacity. And so we've had both tax credit equity coming down and our lending amount has dropped as well. And so that's creating another gap in all of our financing.

Does this meaningfully change the amount of rent you plan to charge as you presented it to us in December?

I didn't track that question.

The rents are still capped at the different income targeting, the 30%, the 50%, and the 60%. Those rents would not go up. Usually when this happens, it means the lender says, we're not sure you're going to be able to get those rents. You might have to charge less. Therefore, we're going to underwrite less debt for you because we're not sure you're going to be able to pull in even those amounts of debt. There's a lot of questions about our market currently and the amount of rent that people can actually pay in those income targets and in the market. Thank you, I appreciate that.

So in other words, in order to ensure that you're able to stay below the income caps that you've presented to the city, that income fluctuates, and a bank looked at this and said, hey, this is not going to represent the dollar amount that you're presenting here. It could be less, and that means that you might need more funding from us. I'm trying to simplify it. I know that might not be exact. I'm trying to put it in a way that can be easily understood because the goal here is to provide affordable housing to seniors. And I think we all agree with that goal. And I'm just trying to explain to a curious taxpayer, and I know several, exactly how this represents meaningful investment from the city in ensuring that we get to that goal.

A development subsidy like the Type B loan for $1 million or $2 million decreases the amount of money the property needs to borrow. The less money they borrow, the less money they have to pay back, the less in interest they pay, the lower they can keep the rents and still pay their bills. Is that what you're trying to say? Yes.

I think I just said that, although they do need to... This is a loan, so they will need to repay this money to us as well. Our interest rates are just lower.

And it is a net income cash flow loan. So when they have money available, then the loan comes due. That's when we start getting waterfall payments. And then if the property changes hands, and if there's a sale, then we get the loan back then too. I appreciate that.

And so... Have there been any changes to the amenities provided as this was presented in December? Have any of those been reduced?

No.

Thank you, appreciate that.

I have no further questions.

Thank you. Are there any other questions from the board? Seeing none, I will entertain a motion. Is there a motion?

Motion to approve.

Is there a second? I second. All those in favor say aye. Aye. Any opposed say no. The motion carries.

Thank you.

All right. Item G's. Executive Director comments. Mr. Dice, do you have a report?

I do not.

Excellent. Well, thank you very much for sticking with us. With there being no further business, this meeting is now adjourned.