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04-11-2012SpecMtg r I MINUTES OF A SPECIAL MEETING OF THE 2 MESILLA VALLEY PUBLIC HOUSING AUTHORITY 3 BOARD OF COMMISSIONERS 4 April 11, 2012 5 6 The Board of Commissioners of the Mesilla Valley Public Housing Authority held a 7 Special Meeting at their conference room located at 926 S. San Pedro Street, 8 Las Cruces, NM 88001. 9 10 1. CALL TO ORDER 11 12 Chairman Jiron called the meeting to order at 1:30 p.m. 13 14 2. ROLL CALL 15 16 MEMBERS PRESENT: Art Jiron, Chairman 17 Ralph Chaffee, Vice Chairman 18 Felix Cordero, Commissioner 19 Arturo Marrujo, Commissioner 20 21 MEMBERS ABSENT: None 22 23 STAFF: Robbie R. Levey, Interim Executive Director 24 Jesse Padilla, Interim Deputy Director 25 Sharon Hansen, Accountant 26 Christine Gonzalez, Executive Assistant 27 28 GUESTS: None 29 30 3. WELCOME AND INTRODUCTIONS 31 32 Chairman Jiron thanked everyone for coming today and stated that the purpose of 33 today's meeting was to discuss Robledo Ridge and be provided with updates on the 34 project. 35 36 4. PUBLIC PARTICIPATION 37 38 Chairman Jir6n noted there was no one present from the public. 39 40 5. CONFLICT OF INTEREST 41 42 Pursuant to Resolution No. 783, Chairman Jiron inquired if any Commissioner or staff 43 member had any known conflict of interest with any item on the agenda. No one 44 expressed or revealed any conflicts. 45 46 6. APPROVAL OF REGULAR AGENDA 47 48 Commissioner Cordero made a motion to approve today's regular agenda. Motion was 49 seconded by Commissioner Marrujo. 50 1 1 Commissioner Art Jiron — aye 2 Commissioner Felix Cordero — aye 3 Commissioner Arturo Marrujo — aye 4 Commissioner Ralph Chaffee — aye 5 6 The regular agenda for today's meeting was approved. 7 8 7. CONSENT AGENDA — Those items on the Agenda indicated by an Asterisk (*) 9 are on the Consent Agenda and will be voted on by one motion. 10 11 Not applicable. 12 13 8. APPROVAL OF THE MINUTES OF THE PREVIOUS REGULAR MEETING AND 14 OF SPECIAL MEETINGS, IF ANY 15 16 Not applicable. 17 18 9. RESOLUTIONS 19 20 Not applicable. 21 22 10. UNFINISHED BUSINESS 23 24 Updates and discussion of Robledo Ridge/low income housing tax credit 25 development - Ms. Levey gave a brief history on Robledo Ridge, stating that the 26 Housing Authority had received tax credits for construction of Robledo Ridge in 2011 27 and there was currently a gap in financing the development. Funding sources of$1.1 28 million listed in a commitment letter with Enterprise were not actually committed: (1) 29 HOME funds (2) weatherization funds, and (3) AHP grant. An initial contingency loan of 30 $700,000 has been reduced to approximately $200,000. Ms. Levey stated that when 31 the bond closed for Section 8 New Construction, Burley Court did not get its portion of 32 the funds which were approximately $82,000; the money went directly to Robledo 33 Ridge. An agreement was recently reached where approximately $82,000 was given 34 back to the Housing Authority for Burley Court by Thomas Development Group and 35 New Mexico Housing Corporation (NMHC). 36 37 Vice Chairman Chaffee stated his concern is that Attorney Mark Berry represents the 38 Housing Authority as well as NMHC. He feels that Mr. Berry has a vested interest in 39 getting this closed by the partnership, and he believes this may be a conflict of interest. 40 Vice Chairman Chaffee stated that he does not feel the attorney should be giving us 41 advice on what should be done to close on this project. Ms. Levey stated that the 42 information provided by Mr. Berry was not advice, but only a summary of what has 43 occurred. 44 45 Vice Chairman Chaffee asked why the developer is using the Housing Authority funds, 46 instead of a bank for a loan. He stated the Housing Authority is not in the business of 47 lending money. Ms. Levey emphasized that Enterprise has stated, through a 48 conference call, that if this does not close by next Friday, April 20, 2012, they are pulling 49 out, resulting in a loss of approximately $1 million for the Housing Authority. Again, 50 2 1 Vice Chairman Chaffee stated that the developer and co-developer need to go to the 2 bank for the loan. Ms. Levey stated that she feels Attorney Mark Berry's conversations 3 with Enterprise convinced them to reduce the amount of the contingency loan from 4 $375,000 to $219,000. 5 6 Vice Chairman Chaffee then asked Ms. Levey if the contingency loan was actually a 7 loan or a grant. Ms. Levey replied that this is a loan with a one (1) percent interest rate. 8 The Housing Authority is negotiating a side letter agreement between NMHC, the 9 Housing Authority and Thomas Development Group. Ms. Levey stated that Mr. Berry is to currently negotiating with the nonprofit and Thomas Development Group for them to use 11 their developer's fees before using the contingency funds. As developer fees come in, 12 they will be paying 50 percent of their developer's fees in the event that the contingency 13 loan is used. The final $95,000 that would be owed to the Housing Authority may take 14 approximately 10 years to repay. The suggestion was made that instead of having a 15 repayment plan for the final $95,000, it could be a grant instead. Vice Chairman 16 Chaffee stated that he wants to be certain that this money comes back to the Housing 17 Authority. Mr. Padilla explained that we have inherited what the former Executive 18 Director left us. Mr. Padilla stated that MFA, HUD and Enterprise make sure that 19 everything is in order to be sure the development will be done correctly. Ms. Levey 20 explained that there are weekly due diligence calls with Enterprise, attorneys, MVPHA, 21 Thomas Development Group and NMHC to make certain that this development is 22 financed correctly. 23 24 Ms. Levey stated that if we invest $95,000 in an $11 million development, it would still 25 be a good investment, considering the improvements at Robledo Ridge. Vice Chairman 26 Chaffee stated that he wants to hold firm on one thing —we want the money back and 27 not in 10 years. He questioned where the cash flow would be coming from. 28 29 After discussion, Ms. Levey was instructed to call Tom Andrews before Tuesday's 30 meeting and have him ask the bank for a loan; if not possible, then he needs to state his 31 reason why not. Ms. Levey stated that HOME funds are not available for a contingency 32 loan and cannot be used on this development. Mr. Padilla stated that if Enterprise pulls 33 out, we are still responsible for expenses to date, such as work that has been performed 34 until now, and we would end up with no development and a possible $1 million dollar 35 loss. 36 37 Commissioner Marrujo asked how this became such an issue? Mr. Padilla explained 38 that NMHC's plan was to eventually take over management of all tax credit 39 developments. 40 41 Commissioner Cordero stated that he is familiar with Robledo Ridge and that complex 42 definitely needs work done as it is falling apart and by moving forward, we will get a new 43 development. 44 45 Ms. Levey reminded the Commissioners that at next Tuesday's regular Board meeting, 46 the Housing Authority will have three Resolutions for the Board's consideration 47 regarding Robledo Ridge. 48 49 11. NEW BUSINESS 50 Not applicable 3 1 12. EXECUTIVE SESSION [CLOSED TO THE PUBLIC PURSUANT TO §10-15- 2 1(H)(7) NMSA 1978] 3 4 Commissioner Marrujo moved to close the Open Meeting and go into Closed Session at 5 2:07 p.m., pursuant to §10-15-1(H)(7) NMSA 1978, to conduct discussion on pending 6 litigation. Motion was seconded by Commissioner Cordero. 7 8 Commissioner Jir6n — aye 9 Commissioner Chaffee — aye to Commissioner Marrujo — aye 11 Commissioner Cordero — aye 12 13 Motion was approved unanimously. 14 15 Commissioner Cordero made a motion to end the Closed Session and return to an 16 Open Meeting at 2:38 p.m. Commissioner Marrujo seconded the motion. 17 18 Commissioner Jiron — aye 19 Commissioner Chaffee — aye 20 Commissioner Cordero — aye 21 Commissioner Marrujo — aye 22 23 Motion was unanimously approved. 24 25 The matter discussed in the Executive Session was limited only to that specified in the 26 motion for closure. 27 28 9. ADJOURNMENT 29 3o There being no further business, Commissioner Marrujo moved to adjourn the meeting 31 Motion was seconded by Commissioner Cordero. 32 33 Commissioner Jiron — aye 34 Commissioner Chaffee — aye 35 Commissioner Marrujo — aye 36 Commissioner Cordero — aye 37 38 Motion was unanimously approved. Meeting adjourned at 2:40 p.m. 39 40 41 SEAL APPROVED BY 42 43 44 45 46 Art Jir6n, hairman 47 48 49 50 4 1 2 SUBMITTED BY 3 4 )� f 5 7 Robbie R. Levey, Interim Executi a Director 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 5