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- Mesquite | 111-Unit HFC
Mesquite | 111-Unit HFC
2/17/25 | 930 Military Parkway
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MHFC February 17, 2025
District: 4 | Downtown Mesquite
111-Unit Workforce HFC | 930 Military Pkwy | Approved
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DISTRICT: 4
930 Military Parkway 930 Military Pkwy
Downtown Mesquite | 8.123 Acres | 111 Units | Postponed
The 930 Military Parkway deal is a 111-unit workforce multifamily product near downtown Mesquite from Riva Switzerland Inc. - part of the Palladium group. 65 Units (60.19% of total) will be restricted to 30% - 80% AMI using income averaging.
MHFC 2/17/25
MOU | Postponed
At the Mesquite Housing Finance Corporation (MHFC) meeting on February 17, 2025, Kim Parker from Palladium presented the deal, describing it as:
‟A spectacular community that will revitalize downtown and provide housing for the much needed and growing Mesquite workforce.
The product will be five stories with robust amenities including a pool, playground, gym, dog park, and children's playroom - representing a $35 million investment in the area.
The financial structure reveals why the partnership with Mesquite's Housing Finance Corporation is crucial. The developer has already secured $2 million in 9% tax credits from the state, but is now seeking a tax exemption through the HFC partnership estimated at $5.8 million over 15 years (with the city's portion being $1.7 million or about $116,000 annually).
Mesquite Finance Director Ted Chinn clarified what Mesquite HFC’s role in this deal entails:
‟No funding is coming from the Housing Corp. Actually, monies will be flowing to the Housing Finance Corp.
Chinn went on to further differentiate this deal from other recent HFC partnerships using 4% tax credits and bonds: Torrington Briarwood and Wooded Lake.
‟They're not asking for financing like Torrington Briarwood or Wooded Lake. They are merely seeking a partnership whereby the Housing Finance Corporation through an affiliated structure would own the property, therefore would get the benefit or their investor would get the benefit of not paying local taxes.
Wooded Lake Apartments | 1300 Wooded Lake Drive | Deal Update
Ted Chinn mentioned that they had gone through at least six construction draws for this project.
MHFC’s Board of Directors, made up of Mesquite city council members, had mixed reactions to partnering on the 930 Military Parkway deal. Jeff Casper, District 1, strongly supported the project:
‟In exchange for that local tax credit, this partnership structure downtown is getting $30 million-plus investment and a residential anchor of hundreds of new diners and shoppers for our Mesquite downtown corridor.
Kenny Green, District 2, focused on clarifying the relationship between Riva Switzerland and Palladium for public understanding. MHFC Directors Elizabeth Rodriguez-Ross and Tandy Boroughs asked practical questions about the financing structure and tax exemption duration. Ted Chinn explained the tax exemption would continue "so long as the ownership structure remains in place," typically 15-18 years before some "major capital event" like restructuring, refinancing, or sale.
However, B.W. Smith, District 5, expressed opposition, stating he would’ve opposed it when it initially came before the council, and would maintain that position in future votes.
‟I would have voted against this back in 2024, therefore if I vote against it now you know why I'm voting against it.
The developer noted significant challenges they've faced since beginning the project, including construction costs increasing 24%, worker shortages requiring higher wages, and higher interest rates despite Federal Reserve actions. These economic pressures likely contributed to the need for the tax exemption partnership.
U/ Finance
The project's 2023 operating pro forma shows first-year rental income of $1,754,436 with a debt service coverage ratio starting at 1.15 and improving to 1.38 by year 15. The permanent financing comes from a HUD 221(d)(4) loan for $14,363,200 with a 40-year term at 5.15% interest (including MIP). Regions Bank is providing a $10,042,438 equity bridge loan at 5.00% interest and will purchase the tax credits at $0.92 per credit, generating $13,798,620 in equity. The developer is deferring $348,559 of their fee.
Term | 930 Military Parkway Pro Forma |
|---|---|
Contingency | $594,111 (3.84% of total hard costs) |
HUD 221(d)(4) Loan | $14,363,200 at 5.15% interest for 40 years |
Investor Equity | $13,798,620 (tax credit equity at $0.92 per credit) |
GP Equity Ownership Percentage(s) | 30% ownership interest by The Land Experts LLC (HUB) |
Construction Loan (to permanent) | $14,363,200 at 4.90% interest, |
Equity Bridge Loan | $10,042,438 at 5.00% interest for 24 months |
Total Financing | $28,510,979 |
Land Acquisition | $1,500,000 |
Soft Costs | $2,361,645 |
Developer Fee | $3,224,983 |
Deferred Developer Fee | $348,559 |
Hard Construction Costs | $18,221,604 |
Financing Fees | $1,821,009 |
Reserves | $1,336,738 |
Housing Tax Credits Equity | $13,798,620 |
Other Nuanced Terms | $27,000 annual replacement reserve ($250/unit). |
The Memorandum of Understanding between the HFC and Riva Switzerland was postponed to the March 3rd meeting, with Kim Parker indicating they were "very close" to agreement with just a few items still being finalized. The project is 100% residential with no retail component, which Rodriguez-Ross specifically inquired about.
Note: The Land Experts LLC (HUB), which holds 30% GP ownership, is an entity owned by Kim Parker.
Developer: Riva Switzerland Inc. (part of Palladium group), Kim Parker Phone: (972) 774-4435 Email: [email protected] LinkedIn, Cody J. Hunt Phone: (765) 274-8885 Email: [email protected]
Capital Partner: Regions Bank (Construction/Permanent Lender & Tax Credit Investor), Graham Dozier Phone: (404) 279-7462 Email: [email protected] LinkedIn, Rachel Thomas-Phillips Phone: (512) 466-6742 Email: [email protected] LinkedIn
Public Partner: Mesquite Housing Finance Corporation (MHFC), Ted Chinn Phone: (972) 216-6287 Email: [email protected]
Original Owner: Selvi Pohar Phone: (469) 417-8187
Pro Forma: 930 Military Parkway
Project Plans: 930 Military Parkway Plan
As of February 24, 2025, the MOU for this deal is not yet complete.
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