We are watching this bill which will amend Section 7d of the General Property Tax Act that provides for a tax exemption for housing owned and operated by a nonprofit entity, the State, or a local unit of government where the housing is solely for occupancy by elderly and disabled families.    This is corrective legislation to assure that the State Treasurer can make the proper payment in lieu of taxes to the local unit of government.  The corrective legislation will streamline the process and provide for a fixed annual payment from the State.  Go to www.senante.michigan.gov if you would like to independently monitor this bill.

MSHDA Announces Extension of Federal Tax Credit Exchange Program

On January 29th MSHDA announced an extension of this program for sponsors who currently have 9% LIHTC awards for 2009 but are unable to secure equity financing and for sponsors who want to participate in the 4% Equity Support and Reinvestment and Innovation Program.  MSHDA estimates that if the 1602 Exchange Program is re-authorized as much as $45 Million in funding may become available for this particular program.

MSHDA also stated its intent to exchange 40% of its 2010 LIHTC if the 1602 Exchange Program is re-authorized by Congress.  As a result of this decision, MSHDA intends to only award $7.35 Million of LIHTC during the March general round.  Consequently, MSHDA also intends to extend the 9% Equity Support Program to provide gap funding for sponsors seeking credit awards in the March general round.  Remember there are limits to the funding and you must comply with MSHDA’s direct lending parameters.

For more information on this announcement go to:

http://www.michigan.gov/documents/mshda/Exchange_Program_Extension_Announcement_1_29_2010_FINAL_309270_7.pdf

Ex. Dir. Keith Molin reported that Chairman Bernie Glieberman resigned his board position effective 12/28/2009.  Mr. Molin expect that a new appointee to fill the vacancy will be in place by the next Board meeting in February.

Mr. Molin reported that he will have a response to the Denny Sturdevant presentation by the next board meeting.

Mr. Molin also reported that MSHDA is participating  with the City of Hamtramck and Wayne County to help comply with the long standing housing discrimination case and will be helping to fund the construction of 30 housing units in the City.

Mr. Molin reported that HUD Secretary Donavan announced the NSP 2 Grant - a $224 Million Grant award to the State and its participating communities.  This is the single biggest award in the nation.

Finally, Mr. Molin commented on the number of MSHDA employees who have participated in national conferences highlighting MSHDA’s endeavors in an advancing its ARRA implementation program.

Mr. Molin requested that Finance Director, Jeff Sykes, announce progress on the RFP for bond underwriting services.  Mr. Sykes advised the Board that the selection process was on time and that he expected to receive responses to the RFP by 3/5/2010, with recommendations being made to the Selection Committee by 3/9/2010.

In Board Action -

The Board elected new officers for the year - Chair, Robert Klein, State Treasurer;  Vice-Chair, Marianne Udow.

Approved a loan for Windsong - a multifamily development located in Ann Arbor.

Approved a 1602 Exchange loan for Wickes Park - a 24 unit single family scattered site project in Saginaw.

Approved the sale and refinancing of Longfellow Towers, a Section 8 Senior development located in Ludington.

Approved a mortgage loan modification of Suffolk Court.

Approved a reversal of the foreclosure sale for Algonquin Apartments in Detroit in anticipation of the sale of the general partner interest.

Approved the use of operating funds by Parkway Meadows to pay for certain legal fees incurred by it in support of litigation defense on a mold claim filed against a sister project.

The MSHDA Board met for the last time in 2009 without the Board Chair, Bernie Glieberman, who was reported to be “on leave”. 

The Board took action approving a massive re-underwriting of its Single Family Bond portfolio that is being financed, in part, by the U.S. Treasury.  It approved 4 multi-family developments under another Delegated Action and approved 6 new multi-family development under its TCAP and LIHTC Exchange Programs - Sheldon Place I, Village View, Midtown, Greentree, and Devon Square.  At the same time, it approved 5 workouts of existing loans, 4 that have not final closed (1777 Haslett was withdrawn at the request of the owner) and 1 existing development.  The 5 pre-final closing workouts used TCAP funds for the most part to write down the MSHDA debt along with project based vouchers, HOME funds, and investor contributions.  Those projects were:  Scott Building, Sunrise, Maxwell Place (its 2nd go around in hopes of final closing) and Park Meadows.  Mapleview II was also approved.

The Board approved changes to the Property Improvement Program, approved the slate of board members of the Michigan Magnet Fund and approved the last extension of the multi-year contract with Public Policy Associates.

Copies of all board docket material can be obtained through the Parmenter Group.  Please contact Mary Levine.

The Lansing State Journal reported on 11/27/2009 that the Great Lakes Capital Fund is offering buyouts to some of its employees to cut costs.  According to the LSJ article the Cap Fund hopes to save $1.2 - $1.4 million or about 20% of its overhead costs over the next 12 months.  In the statement issued by the Cap Fund, Mark McDaniel, CEO, stated that the organization has been hurt by the tight credit market and reduced access to capital.  The article went on to say that the Cap Fund hopes to avoid layoffs through the buyouts.  The Cap Fund employs 45 staffers in Michigan, Illinois, Indiana and Wisconsin with the most employees in its Lansing area office (32 employees).

MSHDA  took the following action at its board meeting last week:

1.  Approved through another delegated authority process 8 projects participating in the 9% Exchange Program and three participating in the 9% Equity Support Program.

2.  Approved changes in the 9% Equity Support Program increasing the pricing support by 10 cents to 35 cents or higher if necessary to fill the equity gap.

3.  Approved by individual action 3 other MSHDA-bond backed projects that combine TCAP and Section 1602 funds.  Those projects are: Grandview Estates; Southside II and Silver Maple Village.

4.   Authorized a settlement offer on a litigated broadband project that is in default called Michigan Light Wave. 

5.  Approved a 3 year contract with On-Site/Insight to conduct CNAs.

6.  Approved a 1 year extension of two contractors performing LIHTC compliance monitoring.

7.  Approved a contract with the National Trust for Historic Preservation to assist MSHDA and local communities participating in the MAIN Street Program.

8.  Approved contracts for 5 vendors to conduct market studies for LIHTC projects.

9.  Approved a MSHDA-bonded TCAP and 1602 Exchange project called Cass Plaza Apartments.

Jeff Sykes announced that with the new program available through the US Treasury, he will be bringing a large bond sale to the board next month for MSHDA’s homeownership program.  The sale will allow Treasury to purchase or provide a liquidity facility to MSHDA that will lower the interest on its bonds by up to 75 basis points.  This bond offering will be purchased 60% by the GSEs and 40% will be publicly offered.  Additionally, Treasury will be providing replacement liquidity for up to 3 years for another Single Family Bond issue.  That replacement facility will lower MSHDA’s borrowing costs.  Once the market comes back, the replacement facility will be taken out.

Copies of MSHDA board docket are available from the Parmenter Group.  Contact Mary Levine at 517-347-0927.

DTE and Consumers Power are offering to install, free of charge, energy efficient light bulbs in apartment units - up to 8 per unit.  Other energy efficiency upgrades that they will install are:  low flow shower heads, low flow faucet aerators, pipe wrapping for individual hot water heaters. 

They will also work with owners on energy audits of common interior and exterior common areas.  Audits are conducted ala carte and they will work with your contractor on a scope of work.  Up to 85% of the entire cost of these energy upgrades will be funded by the Utilities.

For more information use the links below:

DTE:  http://www.dteenergy.com/businessCustomers/saveEnergy/rebates/bizMultiFamily.html

Consumers Energy:  http://www.consumersenergy.com/eeprograms/Landing.aspx?ID=750

Program coordinator is:  Matt Callans, Eco Consulting - 313-297-1278 or mcallans@ecoconsulting.com

MSHDA met on 10-28-09 and took the following actions:

1.  Authorized the Executive Director to grant TCAP and/or 1602 loans to 8 projects - LaVogue, St. Aubin Sq., Gadenview IIA & IIB, Oakland Place, Goodrich Apartments, and Ballentine Apartments. 

2.  Besides this delegated authority granted to the Executive Director, MSHDA approved the following TCAP and/or 1602 Loans to the following developments - New Center Commons, Beacon Hill, Butternut Creek, Medical Center Senior, Woodside Square, and the Village of Royal Oak.

3.  Approved mortgage modifications for Ida Young and Cedar Bend.

4.  Approved participation in the “Pure Michigan” campaign to the tune of $250,000.

5.  Approved a Professional Services Contract for Housing Marketing Services for $98,000 per year.

6.  Appointed MSHDA as managing agent of Hidden Creek.

The MSHDA Board met this month and took the following actions of interest:

1.  Approved feasibility and loan commitment for Patterson Crossing a 56 family unit preservation project in Frankfort.  Funding for the project comes from Section 1602 funds, LIHTC, MSHDA and RD mortgages.

2.  Approved feasibility and loan commitment for Gateway Village - a new construction family project in Frankfort.  Funding for the project comes from Section 1602 funds, TCAP, LIHTC and a Green Build Grant.  Both Gateway Village and Patterson Crossing will have 10% of their units dedicated to permanent supportive housing.

3.  Approved feasibility and loan commitment for Park Place-City Center - a preservation-rehab project located in Sault St. Marie.  This is a mixed use project with retail/commercial on the first floor and 24 units on the upper floors.  This is a 1602 funded project combined with historic tax credits and a HOME loan from MSHDA.  There will be 6 permanant supportive housing units.

4.  Approved the transfer of all general partner interest if the owner of University Club - a 120 unit family development located near Wayne State Univiersty.  Approval also include approval of a HOME Loan and mortgage modification.  The seller is obligated to bring all payables current.

5.  Approved a MSHDA reserve loan for Reflections - a family development in Jackson.  The loan will be used to make repairs and renovations to the parking lot.  Repayment of the loan will come from available cash flow.

6.  Approved the sale of McGraw Apartments in Detroit for $10,000.  This was a REO property that had suffered serious deferred maintenance, vacancy and fire damage.

On 7/17/09 MSHDA published its list of applications for LIHTC Exchange funds.  This list represents the total universe of potential “monetized” deals that would be processed on the US Treasury’s 1602 program.  Total amount of returned credit is $201,971,968.

See the entire list at:  http://www.michigan.gov/documents/mshda/MSHDA-Recovery-TaxCreditExchangeProgramApplicants7.19.09_286395_7.pdf

The MSHDA Board met on 7/22/2009.  Executive Director, Keith Molin, gave a report on the status of its NSP2 Grant Application.  The Application was submitted on behalf of a consortium of local communities and land banks.  The total amount of the Application is $290 Million.  A copy of the application is not yet available, but you can go online at http://michigan.gov/mshda/0,1607,7-141–217713–,00.html and obtain an overview of the Application.

The Board approved the sale and refinancing of Greenbriar Apartments, a Section 8 MSHDA financed development located in Holland Michigan.

The Board approved the appointment of a managing agent for Benjamin Manor in order to stave of significant deferred maintenance problems, a high vacancy problem and the pending tax foreclosure of the property because of unpaid city supplied water bills.

The Board approved MSHDA’s 2009/2010 Budget.  A presentation by MSHDA’s Finance Director, Jeff Sykes, indicated that net income for last budget year and probably for this budget year is down due to the credit crisis; interest income is project to increase in the coming year; federal fees are up because of federal stimulus funds coming into MSHDA; and salaries and fringes are shown as if all positions are filled; cost of liquidity is up, also because of the affects of the credit criss.  MSHDA has increased is provision for mortgage loan losses to more closely match the actual results it is seeing in both the Single Family and Multi-family Programs.  MSHDA grants are down by about $8 Million.  MSHDA has made provision for the Governor’s Homeownership Counseling Program. 

The Board approved a multi-year professional services contract with a Washington DC law firm, Holland & Knight, to represent MSHDA regarding its ongoing dispute with HUD on ownership of certain Section 8 funds.

MSHDA’s Director of Finance along with representatives from both underwriting firms and MSHDA’s financial consultant gave a post-closing report on the sale of its Single Family and Multifamily Bonds that occurred early this year.

The Chair announced that there would be no meeting in August.