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Anna PFC + HFC
1/14/25 | Full Report
Welcome to Ultraground. We go to PFC meetings for you.
CC January 14, 2025
350-Unit Mixed-use PFC | NEC Outer Loop & S Central Expy | Pre-App Discussion
CC December 17, 2024
337-Unit PFC | 900 S Buddy Hayes Blvd | No Action
185-Unit Senior HFC | NWC of Finley Blvd & Florence Way | Approved
You saved: 2h 30m, 33m
US-75 & Outer Loop NEC Outer Loop & S Central Expy
Southwest Anna | 54 Acres | 350 Units | Pre-App Discussion
A proposed 54-acre mixed-use PFC deal at US-75 and Collin County Outer Loop in Anna, Texas illustrates current challenges in multifamily financing. Developer/Owner Jon Kendall currently holds entitlements for 700 multifamily units plus 3.2 acres of commercial space but faces prohibitive construction financing costs - a $75 million construction loan at 9.5-10.5% interest rates. As Kendall explained:
‟Those in the finance world know, those weren't the ideal numbers to go vertical with a 10% interest rate. We would like to move forward and our multifamily partners have really said 'this just doesn't pencil without a PFC.'
The Owner's revised proposal aims to reduce density while securing public support: halving the multifamily component to 350 units, converting the remainder to retail, and requesting a Public Facility Corporation (PFC) structure.
To sweeten the deal, he offered to donate land valued at approximately $5 million in exchange for $4 million in impact fee reductions.
The Anna City Council's response contained deep concerns about tax-exempt multifamily structures. Council Member Kevin Toten provided a statistic that emerged as a central point of resistance.
‟ Under construction, already being under construction, already opened or already zoned, we already have 14,802 apartment doors zoned in Anna currently. 317 of those are not HFC or PFC.
Mayor Pro Tem Stan Carver II offered a nuanced view of PFCs, acknowledging them as "a tool that we use to help encourage growth in certain areas," while suggesting alternative uses:
‟That PFC money can be used for things like event centers and other things that encourage the economy of the City of Anna. It's not just limited to multifamily.
The Council showed particular interest in the site's long-term potential. Carver compared it to "Bitcoin when it's first started to make money," highlighting major drivers.
‟In 10 or 15 years, that Outer Loop will look nothing like it looks today. We have a 30 billion-plus project being developed to the north of us. Raytheon is not getting any smaller to the south of us. There's a huge technology thrust and people are looking at us from an international standpoint.
Council Member Jody Bills captured the Council's overall stance, supporting "taking that property and using that to offset impact fees" while wanting to "see how you can make this work without an HFC/PFC."
In January 2024, JPI proposed a 700-unit Housing Finance Corporation (HFC) deal with 2, 350-unit phases on 20 acres of the site. Despite JPI's "impeccable track record," Council showed resistance, particularly to the HFC structure. Council Member Stan Carver notably opposed multifamily use entirely, viewing it as "a waste of very valuable commercial real estate."
January 2024 HFC Proposal:
Owner: Jon Kendall Phone: (903) 363-8100 Email: [email protected] LinkedIn
Note: Kendall stated he owns the 54 Acres. County records show this party involved: FrostFire Capital, Bhadresh Trivedi LinkedIn
Project Plans: US-75 & Outer Loop Plan
Meryl Street 900 Buddy Hayes Blvd
West Anna | 12.88 Acres | 340 Units | No Action
The Anna Public Facility Corporation (APFC) and The NRP Group’s partnership has reached its final approval stages as outlined in its September 2023 MOU although it hasn’t crossed the finish line. The 340-unit multifamily product will be constructed at 900 S Buddy Hayes Blvd, with an anticipated groundbreaking in January 2025 and completion in November 2026.
City Council 12/17/24
No Action
December 17, 2024 resolutions identify Comerica Bank as the administrative agent for a construction loan financing. The borrower is Meryl Street LP (operating as a tenant), which will lease the property from APFC Anna Apartments SLP, LLC (the PFC's subsidiary) through a 99-year ground lease. The loan is secured by a leasehold deed of trust and includes standard construction loan documentation like assignments of leases, rents, and construction contracts. The structure allows for multiple lenders to participate in the facility through Comerica as the administrative agent
City Council 9/26/23
MOU | Approved
APFC's compensation comes through multiple streams. At closing, they receive an $806,552 structuring fee and an upfront lease payment equal to the price of the land. Once the property stabilizes, they begin collecting $27,000 annually in ground lease payments, which increase by 3% each year. They also receive a $10,000 annual partnership management fee that likewise increases 3% annually. On disposition, APFC gets 1% of any third-party sale price, and they're entitled to 10% of net proceeds on the first refinancing only. These various payment streams are projected to generate $2M over 15 years.
The developer's returns are structured through several mechanisms. NRP receives a 3.5% development fee, paid in stages with 30% at construction loan closing, 50% drawn monthly during construction, and the final 20% held until certificate of occupancy. Their property management arm earns the greater of $35 per unit monthly or $9,000 monthly during lease-up. After stabilization, this shifts to the greater of $35 per unit monthly or 3% of effective gross income, never falling below $9,000 monthly.
The construction arrangement is designed to capture sales tax exemption through APFC's public status. An APFC affiliate serves as general contractor, earning a 1% fee of $554,421 split between closing and completion. NRP Contractors II LLC, as master subcontractor, receives a 5% contractor fee plus general conditions, a 1.5% IGA fee, and carries a 3% contingency.
Professional fees are front-loaded. Both Chapman and Cutler LLP as Special LP Counsel and Hilltop Securities receive identical compensation: $25,000 each at MOU execution (non-refundable) and $100,000 each at closing.
U/ Finance
Term | |
|---|---|
PFC Structuring Fee | $806,552 |
PFC Management Fee | $10,000/year + 3% escalator |
Contractor Fee | 1% of construction hard costs ($554,421) |
Lease Payment | Land price upfront + $27,000 annually w/ 3% escalator |
First Sale/Refi Fee | 1% gross sale, 10% net refinancing |
Subsequent Sale/Refi Fee | 1% of gross sales price |
Contingency | 3% |
‟I think you did an excellent job of presenting your project this evening because not only are you showing us what we're going to be looking at, you told us how you were inspired to design the look that you looked at on an existing building in Anna. You talked about the density and how it impacts The Independent School District. I hope that other groups will take a look at what you just did in the matter of a two-minute period and take that to heart. I thought you did excellent job.
‟We are focusing on the professional and the couples to help mitigate the impact on the schools.
The Council voted unanimously to approve the project.
You saved: 1h 41m
Developer: The NRP Group, Alena Savera Phone: (817) 657-8368 Email: [email protected] LinkedIn
Public Partner: Anna Public Facility Corporation (PFC), Mayor Pro Tem Stan Carver II Phone: (214) 831-5394 Email: [email protected]
Original Owner: David Claassen Phone: (214) 361-8300 Email: [email protected]
GP Resolutions: Meryl Street Res
Project Plans: Meryl Street Plan
Memorandum of Understanding (MOU): Meryl Street MOU
Anna PFCs
Term | Reserve | Meryl | Finley | Arbor | Palladium | Powell |
|---|---|---|---|---|---|---|
PFC Dev Fee | 25% | $806,552 | 20% | 20% | 25% of 15% of tot Dev Costs | $451,271 |
PFC Mgmt Fee | $10,000/yr + 3% esc | $10,000/yr + 3% esc | $10,000/yr + 3% esc | $10,000/yr + 3% esc | $10,000/yr + 3% esc | $25,000 |
Lease Payment | $20,000 | $27,000 | $27,500 | $288,812 | N/A | $150,000 |
Lease Escalator | 3% | 3% | 3% | 2.5% | N/A | 3% |
Sale/Refi Fee | 1.5% | 1%, 10% net on first refi | 1% | 10% net sale or refi | 25% net sale or refi | $1,256,565 /cont |
Parmore Anna NWC of Finley Blvd & Florence Way
South Anna | 9.93 Acres | 185 Units | Approved
AHFC 12/17/24
Perm. Financing | Approved
The Parmore Anna deal, initiated through a July 2021 MOU between Anna Housing Finance Corporation (AHFC) and JPI, reached its permanent financing phase on December 17, 2024. The project delivers 185+ senior housing units on 9.93 acres at the northwest corner of Finley Blvd and Florence Way in Anna, Texas. 100% of the units are at 60% AMI.
The 2021 MOU established key economic terms that carried through to permanent financing. HFC structured its participation through a for-profit subsidiary serving as sole General Partner, while the developer maintained a 0.01% Special Limited Partner position. The deal pairs a $25 million tax-exempt bond allocation from Collin County Housing Finance Corporation and 4% Low Income Housing Tax Credits purchased by CREA at $0.89, generating $16,602,866 in equity.
For land control, HFC took fee title and executed a ground lease to the partnership. Rather than implementing annual lease payments with escalators, the structure utilized an up-front ground lease payment of $1,443,404 to cover HFC's land acquisition costs. This approach maintained the property tax exemption while providing immediate economic benefit to HFC.
The development budget of $41,295,718 included a 15% developer fee ($4,698,678), with HFC receiving 10% paid pro-rata with developer payments. The initial construction financing from Regions Bank consisted of a $23,475,376 loan at 3.75% and an $8,524,624 bridge loan at 3.75%.
The December 17, 2024 permanent conversion marked several key milestones. The construction financing converted to a $23,475,376 Freddie Mac permanent loan at 3.50% for 40 years. The deferred developer fee balance adjusted from $1,824,428 to $1,217,476, maintaining the 90/10 developer/HFC split. The operating pro forma demonstrated stabilized performance with a 1.20 debt service coverage ratio improving to 1.27 by year five.
Looking forward, the deal transitions to an ongoing 70/30 cash flow split between developer and HFC after debt service and priority payments. HFC maintains significant control through consent rights over management, construction, and design decisions. The ground lease provides HFC a market value purchase option after year 15, though exercising this requires maintaining property tax exemption through continued HFC involvement or qualified replacement.
The structure notably avoided typical HFC ongoing fees like annual administrative charges or asset management fees, instead concentrating economic participation in developer fee sharing and disposition proceeds. The contractor fee cap of 14% per TDHCA guidelines flows entirely to the contractor. The developer retained responsibility for ongoing compliance and provided standard guarantees for completion, operations, and tax credit delivery.
U/ Finance
Term | |
|---|---|
HFC Developer Fee | 10% of 15% Total Development Costs ($4,698,678) |
HFC Management/Admin Fee | None |
Contractor Fee | Up to 14% per TDHCA guidelines |
Lease Payment | $1,443,404 upfront |
Cash Flow Split | 30% HFC/70% Developer |
HFC Sale/Refi Distribution | 30% HFC/70% Developer |
The Collin County Housing Finance Corporation Multifamily Housing Revenue Note (Parmore Anna) Series 2025 was authorized at the December 17, 2024 meeting. This was a refinancing of the original Series 2022 bonds. The documents indicate Berkadia Commercial Mortgage LLC agreed to originate a funding loan to the Issuer in the amount of up to $25,000,000, which would be evidenced by the Governmental Note. This funding loan was structured to provide permanent financing through Freddie Mac, who agreed to purchase the loan upon satisfaction of certain conditions. The permanent loan amount is $23,475,376 at 3.50% for 40 years, which refinances the construction debt that included a $23,475,376 loan at 3.75% and an $8,524,624 bridge loan at 3.75%.
The new authorization appears to be for new Series 2025 bonds that would refund the existing Series 2022 bonds as part of the permanent financing conversion, rather than a new bond allocation. The MOU from 2021 had contemplated "up to $25,000,000 (or such amount as may be permitted by the Texas Bond Review Board) in tax-exempt private activity bond financing."
The permanent conversion represents successful execution of construction and lease-up while maintaining compliance with TDHCA requirements, bond covenants, and local obligations.
Developer: JPI, Payton Mayes Phone: (972) 556-1700 Email: [email protected] LinkedIn
Public Partner/Owner: Anna Housing Finance Corporation (HFC), Stan Carver II Phone: (214) 831-5394 Email: [email protected]
Staff Report: Parmore Anna
Project Plans: Parmore Anna Plan
Memorandum of Understanding (MOU): Parmore Anna MOU
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