[00:00:01]
YEAH.[Public Facilities Corporation on April 6, 2026.]
ALL RIGHT,UH, FIRST ITEM ON AGENDA IS PUBLIC COMMENTS.
MADAM SECRETARY, OR ANYBODY SIGNED UP TO SPEAK FOR THIS, SIR? NOPE.
WE HAVE NO ONE SIGNED UP TO SPEAK.
ALL RIGHT, THEN, UH, YOU HAVE THE MINUTES IN FRONT OF YOU DIRECTORS.
THIS IS THE MIN MINUTES FROM THE JULY 15TH, 2024 MEETING.
I HAVE A MOTION, UH, DE UH, DIRECTOR LUCK.
I HAVE MOTION TO APPROVE THE MINUTES.
I HAVE A MOTION TO APPROVE AND A SECOND BY DIRECTOR BASS.
ALRIGHT, WE'LL JUST USE OUR HANDS.
WE DON'T HAVE THE VOTING HERE.
FIRST ITEM FOR INDIVIDUAL CONSIDERATION IS THE SECOND MODIFICATION AGREEMENT, LOAN EXTENSION, AND FINANCING TERMS. GOOD EVENING.
SO I WANTED TO QUICKLY GIVE A LITTLE BACKGROUND FOR THOSE THAT, UM, WERE NOT ON COUNCIL.
WHEN THE PUBLIC FACILITY CORPORATION WAS CREATED, IT WAS CREATED IN 2018 AND REALLY FOR ONE SPECIFIC PROJECT, IT'S THE FILAMENT, UH, MULTIFAMILY PROJECT ON 46 89 SATURN ROAD.
AND THE, AND WHAT GOVERNS THIS IS THE PUBLIC FACILITY CORPORATION IS GOVERNED BY SECTION 3 0 3 OF THE TEXAS LOCAL GOVERNMENT CODE.
AND WHAT IT DOES IS ALLOW US TO ENTER INTO PUBLIC PRIVATE PARTNERSHIPS, SPECIFICALLY MOST OF THE TIME WITH MULTI-FAMILY UNITS.
AND WHAT WE, WHAT IT BASICALLY IS, IS WE ACT AS THE OWNER AND, UH, THE DEVELOPER ACTS AS THE FINANCER AND THE DEVELOPER OF THE PROJECT AND REALLY TAKES ON MOST OF THE RISKS.
WHAT THEY'RE GETTING FROM US IS OUR TAX EXEMPTION.
SO THEY'RE ABLE TO GET OUR TAX EXEMPTION TO, IN THIS CASE, UH, DEVELOP A CLASS A PRODUCT AND GET SOME SAVINGS IN ORDER TO DO THAT.
IN RETURN, UH, THERE IS CASHFLOW THAT IS PROVIDED TO THE CITY OR TO THE PUBLIC FACILITY CORPORATION FOR THE LOST TAX REVENUE THAT THE CITY WOULD'VE RECEIVED.
SO, UM, THE SCHOOL DISTRICT AND THE COUNTY WOULD NOT RECEIVE ANY TAXES, BUT WE HAD SET UP THE AGREEMENT FOR US TO GET OUR TAXES THAT WE WOULD'VE RECEIVED ON AN ANNUAL BASIS THROUGH THIS.
AND, UH, THIS IS KIND OF THE TERMS OF THE AGREEMENT AS IT SITS NOW, THEY PAID US A $300,000 ORIGINATION FEE WHEN THEY CLOSED ON THE PROPERTY.
UH, THE NEXT FEE TO GET IS A STRUCTURE FEE OF $300,000 WHEN THEY REFINANCE.
AND YOU'LL, YOU'LL NOTICE THAT THEY ARE EXTENDING THEIR REFINANCING WHILE WE'RE HERE TODAY, BUT IT'S EITHER REAP AT DAY OF REFINANCING OR 48 MONTHS.
SO THEY WILL OWE US AT 48 MONTHS, WHICH WOULD BE AUGUST, ANOTHER $300,000 THEY HAVE WRITTEN IN THEIR AGREEMENTS THAT IS GUARANTEED TO GET THAT PAYMENT.
AND THEY'RE ALSO PAYING US WHAT'S CALLED AN ASSET MANAGEMENT FEE OF ABOUT 25,000 A YEAR.
AND THEN STARTING IN YEAR FOUR, WHICH WILL BE IN OCTOBER OF THIS NEXT YEAR, THEY WILL PAY US.
SO THIS, THEY HAVE TO PAY US THESE AMOUNTS EACH YEAR, WHICH IS EQUAL TO, AGAIN, A, A ROUGH ESTIMATE OF WHAT OUR PROPERTY TAXES WOULD BE FOR THIS.
UH, ONE THING THAT WILL COME UP AT SOME POINT IN THE FUTURE IS IF THEY WERE TO SELL THE PROPERTY, IF THEY WERE TO SELL THE PROPERTY, THERE'S TWO CONDITIONS AND, UH, AND REALLY MOST OF THE TIME THE SALE OF A PROPERTY USUALLY HAPPENS WITHIN 10 YEARS.
SO WE'RE TALKING ABOUT PULLING UP ON YEAR FOUR.
SO AT SOME POINT THEY WILL BE LOOKING TO SELL THE PROPERTY.
ONE IS TO CONTINUE THE RELATIONSHIP OF A PUBLIC FACILITY CORPORATION WITH, UH, ANOTHER INDIVIDUAL TO KEEP IT GOING OUT IN, INTO THE FUTURE.
OR WE COULD SELL OUR PIECE OF THAT AT THAT TIME.
AND RIGHT NOW I CALCULATE THAT THAT'LL PROBABLY BE ABOUT A $2 MILLION.
SO IT'S BASICALLY EITHER A $2 MILLION UPFRONT OR YOU CAN JUST CONTINUE ON WITH THIS $150,000, UM, PAYMENT EACH YEAR.
SO THERE WILL BE AN OPTION IN THE FUTURE AT SOME POINT.
WHY WE'RE HERE, UH, TODAY IS HERE'S A PICTURE OF THE LUMINATE PROPERTY.
UM, IT'S, UM, 298 UNITS MARKET RATE, CLASS A, UH, VERY NICE FACILITY.
WHAT THEY ARE LOOKING TO DO AND WHAT WAS IN OUR AGREEMENTS IS FOR THEM TO HAVE THE CAPABILITIES TO EXTEND THEIR CURRENT LOAN FOR UP TO TWO YEARS.
SO THEIR LOAN ACTUALLY WAS EXPIRED AT THE END OF MARCH, BUT THEY HAVE BEEN WORKING WITH THEIR BANKS BECAUSE THEY NEED THE OWNER OF THE PROPERTY TO ALSO SIGN OFF THAT THEY AGREE TO MOVE FORWARD WITH THIS.
THEY WOULD LIKE TO EXTEND THAT LOAN TO FEBRUARY 26TH, 2028.
AND THE REASON WHY THEY TYPICALLY DO THIS IS, IS THEY WANT TO MAKE SURE THAT THEY HAVE A STEADY, ONGOING STREAM OF REVENUE.
UH, THEY CALL IT LEASING UP BEFORE THEY WANT TO ACTUALLY PAY THAT LOAN OFF.
[00:05:01]
UM, USUALLY YOU WANT TO BE AT ABOUT 90%, UH, OCCUPANCY.UH, THEY, THEY HAVE ABOUT, THEY'RE ROUGHLY AT 75% NOW, WHICH IS GOOD FOR A PRODUCT THAT JUST OPENED IN 2024.
SO THEY'RE JUST REALLY, IT'S JUST AN ES A THING OF CASH FLOW, ENSURING THAT THEY GET THE RIGHT RETURN ON INVESTMENTS.
UH, THE PRODUCT IS DOING WELL.
SO I, I PARTICULARLY DIDN'T HAVE ANY ISSUES WITH BRINGING THIS FORWARD TO THE PUBLIC FACILITY CORPORATION TO HAVE Y'ALL LOOK AT THIS AND GO AHEAD AND EXTEND THAT, UH, EXTEND THAT LOAN.
SO THEIR LOAN, I PUT IT SAYS 4.1, THAT SHOULD HAVE BEEN 41 MILLION.
SO THEY HAVE ABOUT A $41 MILLION LOAN.
THERE IS NO RISK ASSOCIATED WITH THE CITY.
IT'S JUST WE ARE THE OWNER OF THE PROPERTY, SO WE HAVE TO SIGN IT.
THERE IS NO FINANCIAL EXPOSURE.
WE ARE NOT A GUARANTEE IN THIS LOAN.
WE HAVE NOTHING REALLY TO DO WITH THE LOAN OTHER THAN THE FACT THAT WE OWN THE LAND.
SO, UH, WHAT WE'RE ASKING FOR TONIGHT IS JUST FOR, UH, THE EXECUTIVE DIRECTOR TO SIGN THAT AGREEMENT SO THAT THEY CAN EXTEND THIS LOAN.
UH, YOU KNOW, OBVIOUSLY IF THEY DON'T EXTEND THIS LOAN, THEY WILL BE IN DEFAULT.
SO, UH, WHAT WE WANTED TO BRING THIS FOR BECAUSE, UH, AGAIN, THEY'VE BEEN GOOD PARTNERS WITH US, UM, IT'S WOLF DEVELOPMENT.
AND SO REALLY THAT'S ALL THE ASK IS, IS FOR, UH, Y'ALL AS THE BODY TO ALSO SIGN OFF AS THE OWNER.
WE HAVE NO FINANCIAL EXPOSURE AGAIN WITH ANY OF THE LOAN DOCUMENTS.
OTHER THAN THAT WE ARE THE OWNER.
CAN I ASK A QUESTION TO THE ATTORNEYS QUESTION? UM, IT'S PROBABLY THE SAME QUESTION.
SO MR. REX IS CURRENTLY THE LISTED AS THE EXECUTIVE DIRECTOR.
SINCE THE BOARD HAS NOT VOTED, CAN WE, WHEN THEY MAKE THE MOTION, CAN THEY AUTHORIZE ME ACTING ON BEHALF OF MR. REX OR DO YOU, SHOULD THEY, UH, AUTHORIZE CHIEF FINANCIAL OFFICER OR SOMEONE ELSE TO ACTUALLY EXECUTE THIS DOCUMENT? YEAH, I WOULD RECOMMEND THAT THEY BE THE CHIEF FINANCIAL UNTIL SUCH TIME AS THEY CAN APPOINT AN EXECUTIVE DIRECTOR.
WE WILL BE BACK IN JUNE TO DO THAT.
IT'S GONNA BE JUNE, BY THE WAY.
BOARD, YOU HEARD, YOU HEARD THE REQUEST TO MODIFY THE, THE, UH, FINANCING TERMS, LOAN TERM AND UH, LOOKING FOR A MOTION AS WELL AS A MOTION TO ALLOW THE, UH, NEW, NEW, THE FINANCE DIRECTOR TO SIGN THE DOCUMENT.
I HAVE A MOTION DIRECTOR BASS.
MAKE A MOTION TO UM, UM, CHANGE THE DIRECTOR TO FINANCE.
WHO, WHO DID I SAY NO, NO, NO, NO, NO, NO.
BUT YEAH, BUT THEN TO CHANGE, UH, AUTHORIZE THE DIRECTOR, AUTHORIZED FINANCE DIRECTOR, SORRY, AUTHORIZED FINANCE DIRECTOR TO, UH, TO CHANGE.
OH, JUST SAYS, IT JUST SAYS STAFF PRESENT TITLE.
IT DOESN'T HAVE A TITLE ON THE MINUTES THOUGH, FOR JUDGE.
MAKE A MOTION TO UM, EXTEND THE SECOND MODIFICATION AGREEMENT.
BUT I WAS TALKING ABOUT ON HERE WHERE, WHERE YOU'RE TALKING ABOUT JUDD THOUGH IT DOESN'T HAVE A TITLE FOR HIM.
ON HERE IT JUST SAYS STAFF PRESENT.
WELL IF YOU LOOK ON ITEM NUMBER THREE ABOVE MINUTES, ITEMS FOR INDIVIDUAL CONSIDERATION, IT HAS APPOINTEES.
AND SO WHO ARE, WHO ARE WE WANTING TO PUT INSTEAD THE FINANCE OFFICER TO ALLOW HIM TO SIGN.
OH, TO ALLOW FINANCE OFFICER TO SIGN.
WHAT'S THAT? HE'S STILL PRESENT.
OH, I KNOW HE'S STILL PRESENT.
I THINK I'M THE ONLY ONE ON THERE THAT CAN SIGN THIS.
ALRIGHT, I'M STILL GONNA SEE WHERE, WHERE IT SAYS ANYTHING ABOUT JUDGE TITLE ON HERE FOR THIS THOUGH, I'M NOT THE PARLIAMENTARIAN.
I THINK, I THINK WE HAVE THE MOTION.
SO IT'S, THE MOTION IS TO MODIFY THE AGREEMENT ACCORDING TO WHAT WAS JUST DISCUSSED.
THIS IS GONNA BE YOUR MOTION IF YOU ACCEPT MY ADVICE.
MY ADVICE WOULD BE TO MAKE A MOTION THAT Y'ALL AUTHORIZE THE CHIEF FINANCIAL OFFICER TO EXECUTE A SECOND MODIFICATION, NECESSARY PAPERWORK TO ALLOW THE, UM, WOLF TO UM, GET REFINANCED, GET REFINANCING.
IS THAT CORRECT? SECOND MODIFICATION TO THEIR LOAN.
SO AUTHORIZE THIS, AUTHORIZE, UH, MAKE A MOTION TO AUTHORIZE OUR CFO TO, UM, HAVE AUTHORITY TO MAKE A SECOND MODIFICATION TO THEIR AGREEMENT.
[00:10:01]
THERE.STILL NOT SAYING ANYTHING ABOUT A TITLE FOR IN HERE THOUGH.
WITH THAT BEING THE LAST ITEM ON THE AGENDA AT 8 32, THIS BOARD MEETING IS ADJOURNED.