Monthly meeting of the Health Education and Housing Facilities Board of the City of Chattanooga.

Today is Monday, September the 15th.

Have we had have we been properly advertised?

And do we have a quorum?

Yes, sir.

Yep, we have.

And Nico, this is our second second meeting.

So we appreciate you all being here.

And we will this is where you'll learn on the go.

So just fake it till you make it.

Okay.

But okay.

Our first uh order of business is election of officers.

We need a chair, a vice chair, and a secretary.

And I think currently, right now, uh I serve as chair, uh, Mr.

Johnson serves as uh the vice chair and Mr.

Wells serves as secretary.

So we can do them individually or collectively, whatever else to you all.

I well, Mr.

Chairman.

I think for consistency, the fact that we have some relatively new members.

I if uh the other two officers are amenable, I'm certainly I would say we'll move or make a motion that we keep the same officers in place uh just with consistency and you do such a stellar job.

So I knew you were gonna hose somebody somebody else.

Okay, uh we have a motion.

Is there a second?

Yeah, second.

Okay, but I would say this, and I've said it for a number of years.

I I think it's important that we uh involve our people and rotate.

So um I think we need to as we get more consistency with people.

I think we should do that.

Okay, we have a uh proper motion of the second.

Uh any discussion on the uh election of officers.

Seeing none will vote.

All in favor of keeping the same slate, please say aye.

Oppose like sign.

Okay.

Okay.

Um until next year.

Well, for some of us, that may be death.

You know what I mean?

Um the next order of business is the approval of the May 19th meetings.

You've been sent those.

Um chair would entertain a motion for discussion.

So move.

Have a motion.

Is there a second?

Second.

Second discussion on the May 19th minutes.

Questions or anything?

It all looked appropriate to me.

Okay.

Okay.

Seeing none.

All in favor approving the minutes of the May 19th meeting, please say aye.

Oppose, like, sign.

See none of the mission minutes or approved.

Um, what we do now is uh we allow anybody from the community or here to speak for three minutes if they want to, they can speak on something for their want to propose or against or anything like that, just so you all know.

So the floor is open if there's anyone who wants to address the board before we go any further.

It works real well.

Okay, seeing none, we'll move on.

Uh we have a final resolution authoring issuance of not to exceed 20 million.

Uh the Health Education Housing Facilities Board of the City of Chettinga, Tennessee, multifamily housing revenue bonds.

It is for one west side phase two B project.

Is there anyone here who's gonna speak to that?

Yes, good afternoon.

Good afternoon, Raleigh from Columbia Residential.

And I just introduced a couple other folks here.

You may have Betsy McRae is our um the two of us together are the sponsor and the borrower on these bonds, and on the financing for phase two.

Joe Kelly with is is the uh attorney for um CHA.

And Alc Samber is with Bass Perry, and uh we were here on the 27th of January and asked for a inducement for these 20 million dollars of bonds, and thanks to that, and we really appreciate that.

We were able to apply to the state of Tennessee.

We were able to receive an allocation of bonds.

Um they're highly competitive, but we have an advantage position with the choice neighborhoods overall project that we have, and we've actually received both the 4% credits and the bonds and the 9% credits allocation to build phase two.

So what we're asking for today is a final resolution so we can close those bonds.

Um Tennessee Housing Development Agency asks you to close the bonds within 120 days of receiving them.

So that's actually really fast.

We we actually need to close the bonds by October 15th.

And as we did with phase one, we plan to close the bonds into what is called a cash forward structure that all 20 million dollars of bonds will close, they'll go in, they'll offsetting have uh treasury securities that'll sit there, and then when we close the full financing and construction financing in January of 2026, it'll close into that structure.

Um we've lined this up with our permanent lender and with our equity investor, and so it actually went very very well last time.

We we we did this same exercise uh late in 2024, and then we closed and started construction on phase one in early 2025.

So, just a context and I won't take a long time, but just to give you some context here this is the master plan uh for the choice neighborhoods redevelopment.

There's a broader west side master plan, and then of course the bend is to the to the west of the site and over on a river.

Just for context, this is highway 27.

This is 12th Street that comes from the convention center right here.

This is Riverfront Parkway over here.

Um we're under construction, and the HEB issued balance for phase one.

So phase one is well under construction.

Um, pretty soon you'll start seeing buildings coming out of the ground right now.

It's mostly dirt and underground and foundations.

The phase two site that we're speaking of is up here on the hill on Boynton.

It's actually next to an existing building, it sits right about here.

This is the gateway tower, the one of the three towers you can see from all over the city.

Um just a look at what that building's gonna be like.

It's actually land that's owned by the housing authority, and the housing authority has petitioned already HUD to turn that land into a ground lease to the new partnership.

Okay, I was gonna say, isn't that that's a blank piece of property right now in phase two?

It is it is vacant.

And I failed to mention the the logic of this is very important for the promises made to the residents of the community and to the city and everybody involved, which is we are gonna create housing off site before these College Hill Courts units come down.

So people have an opportunity to move into these locations as opposed to going somewhere off site.

Um they also have a choice of where they want to live, they don't have to move there, but um the housing authority and their partners on relocation are going to handle that starting once we have phase one underway, and then we have phase two, and we'll work our way through.

So essentially they'll be able to move to have to relocate, but they won't be without some place to go by the way.

You're phasing it.

Yes, they're actually even if they choose not to live here, everybody will be well taken care of.

And Betsy could better than me articulate that, but it's very detailed, very extensive, hands-on approach with each family that lives there and their and their housing options.

So this is just uh a view of the building.

This is a architectural rendering.

This is actually on Boynton Street, if you're up on the top of the hill.

Um, and this is the elevation.

There's a lot of slope.

So actually, there's a parking structure on the first level here, and there's a parking structure on this side.

But this is the side that that the trade center is on the back side, correct, or is on this side.

Which which side am I looking at?

The front or the back.

We're looking at the front as you're standing on Boynton Street.

Okay.

So this is actually facing east, so downtown would be behind it.

Okay, so actually, a lot of trees and a line of trees behind it that will continue to be there.

Um, and so it's a five-story building on top of the parking structures.

This is the main entrance for visitors and other, and this is the area that's the amenity area and the leasing office.

Um, I think it's a it'll be a spectacular building.

It's a tight site, so this is a little bit more.

This just shows you the view from the ends and a little bit of the 3D perspective of how it fits on the site.

So it's a um again, structure parking underneath, very nice courtyard for residents here, and we're also going to rebuild this little park area here with amenities for outdoor amenities.

This is um, it's a hundred and forty-four apartment units, one and two bedroom units.

Um interestingly, College Hill Courts is made up of mostly one and two bedroom units, and so we're replacing that, but also we're have a big eye towards the market, and our colleagues from the city.

This is 60% one bedrooms.

It's also very high for apartments that are in that 80% AMI range, which has become unaffordable.

There's nothing getting built to that right now.

So that's that's a lot of what we're building here.

So I was gonna ask you.

So what do you anticipate the average rent in there being?

Well, we have we have three actually four different levels of affordability.

66 of the of these uh apartments will be for residents moving out of College Hill Court.

They will have a Section 8 project-based voucher from the housing authority that they will pay the same rent, that's 30% of their income for rent and utilities, and then there are our apartments at 60% of area median income under the tax credit program, and at 80% of area median income.

Um, those the 80% rents approach where our market rents are.

The market rents that we're we have in our pro forma, and really supported by the market study that that we have one bedroom.

This would be the highest rents, one bedrooms are at 1325 and two bedrooms at uh 1550.

And so those are for new construction are below where the rest of the market is right now.

Um part of the market study says this is new, it's unproven, we're we're we're revitalizing an area, so we expect that some of those may increase over time, but the majority of the units in the entire development will be permanently affordable at those left at those levels at 80, 60 and below 40 percent area median income.

So, what what you just gave me is really gonna be true for almost all the phases in, correct?

It's a similar template, they they vary a little bit.

We had to tell HUD what we were gonna do for all seven phases, so we're we're following that pretty closely.

When you look at this, the the big principles of it are um replace every one of the 497 College Hill units in the overall master plan, and then 40 percent of the units overall are at market rate because Chattanooga as a city and the housing authority, and we certainly believe in this as a developer and partner, we want to see a mixed-income neighborhood.

And our observation, having done this for a lot of years, is over time you see that those those rents lift at first, they're very close to where the affordable rents are, but it really helps sustain it over time, and the mixed income creates a more economically vibrant neighborhood, and then a lot of units also at 60 and 80 percent of AMI.

So 60 percent of the units that are being built here are for people who are gonna move here, and then um 40 percent of them are for are offered for people in the public housing program moving from the neighborhood.

So go ahead.

I'm sorry.

Uh first of all, I want to say that I'm so grateful to be in the room because I grew up in the west side.

My grandparents, mom, I went to school at James A.

Harry, the school across the street.

So this is great that I'm a part of a group that can make decisions like this.

So I just want to make sure that I heard what you said, uh, understood what you said.

So HUD's loadsome moderate income standard.

You're outside of your aligned with that, or you are you going by a different benchmark?

And I I'll restate because I want to make sure I understand your question.

Okay.

I believe what you're asking is our the HUD low moderate income standard is based on that, and housing policy nationwide, when you talk about the affordability levels, is based on the area median household income, and then what can a family at that income afford for rent and utilities?

So the 40% of the units will be they're all at for we have several programs overlaying each other, so they're all at 40% of area mean income or lower, but that means somebody at 10% of each area median income could live here, and they'll have a housing authority voucher that pays the difference in the rent as opposed to what they pay.

Okay, then there's a band of them that are at 60% of AMI and at 80% AMI, and those are restricted, so they're based on whatever Chattanooga's area median income is across the area, and so you can't rent them for more than that amount that is affordable to a family, say a family of of three at 60% of area median income.

That's how the rents get set.

So those rents come out every year from HUD, and they say this is your maximum rents, and so that's permanently there for a minimum of 30 years, and really longer because of the underlying ground lease that the housing authority has on the land, and then the the remainder of the units are unrestricted, so they are at market, so they can move up down whichever way with the market, and so those don't have a particular restriction.

And so those don't have a particular restriction.

Right.

Okay.

I hope I answered that.

Yeah.

You answered it.

Um can I ask another question?

Okay.

Are we going to be tracking like the demographics with low to moderate populations to ensure that it things are equitable across racial and ethnic groups that are moving into the area?

Um Betsy, you want to answer that from with the work we've already done and other sure.

Um what was really important to us as we started out is we wanted to make sure that the families who lived at College Hill Courts now during this process were able to eventually have homes on that footprint.

So, like your family has lived there for a couple of generations.

We didn't want to put people off.

So we've been very conscious about the number of units that are dedicated to College Hill Courts residents, actually, 92 in phase one, and 66 in phase two.

And right now, in the first area where we'll be relocating residents, if every single resident asks to move into a new unit, we can accommodate that resident.

Because we've stopped leasing at the site, we're down to about 348 households, so we can more than accommodate in the new units.

And if I may um just add, we give options because it's really about the choice for the residents.

So the housing authority will give three different options for residents as we're counseling them for the relocation.

They can either choose to go into a brand new unit that we've constructed, they can get a housing choice voucher, which would enable them to go anywhere in the country with a subsidized voucher, or they can elect to move into one of the units that we currently have in our portfolio.

But the beauty of it is somebody could elect to move off-site because they don't want to be on site during construction, they take a voucher, they move off-site.

For eight years, they have the ability to return.

It's absolutely guaranteed under the CNI grant.

So somebody may say, hey, my mother is sick in Ohio, I want to move there for now to take care of her, but mother passes, they want to come back to China guaranteed right to come back.

What's the uh comparison of what they're paying now, what they would pay when they go in for public housing residents' rent does not change because it's based on their rent based on their income.

What there's a lot of things that the housing authority and the choice neighborhoods program is doing to try to help families improve their income.

And so as their income rises, their their rent can rise with that, but only to a certain level.

It can never go above the 40% AMI rent on the on the tax credit units or above the standards that that um CAJ has.

Can I just have something that you might be interested in?

Um the average income for residents on the west side is at or below $15,000.

So as Jim mentioned, we're putting project-based vouchers in, and that has an AMI level of up to 50% of AMI.

So all of the folks who live there now are well below that threshold.

We're trying to bring that up.

And if I may, we've engaged a company who's working actively with each of the households there on all of their goals, educational jobs, uh, everything that you can imagine their health goals, and they're working one-on-one with each household to address that.

So we expect that the incomes will rise over the years.

And I I just add that to the other question about tracking the demographics and the like.

There's a lot of that, particularly with the choice neighborhoods program.

The housing authority has that data on the residents named their program, and we typically track that.

It's confidential information, so we don't do it, we don't release names and things like that, but we track it overall for a lot of our developments.

So because we want to see people want to see, people will ask and say, Did that mixed income thing work?

Yeah.

Were people who live there able to improve their lives and raise their their uh their income and their standard of living as a result of all this help and all these things that are going on?

And so people want to know that they want to see outcomes, so it's very important to track it.

Thank you.

Yes, Mr.

Chairman.

I'm sorry.

So did you have to use it?

If I remember correctly, if last time we saw a presentation on AEMI, it's like 44,000 a year.

Yes, sir.

Yes, sir.

And so my concern is that you got by your own numbers, the average income level narrow is 15.

I don't have to.

And I don't have my AMI statistics in my head, but that 44,000 figure relates to um a family of four, I would imagine.

Yes, just it was family of four.

So a lot of our folks are gonna be one bedroom households, which you do.

As long as you've looked at it and you think they're similar, that's fine.

But I just want to point that out because I know that you know I had a daughter who now has moved, but she had a master's degree and was working in town making 25,000 dollars a year, and she couldn't afford anything around town.

Because I don't know who paid it.

And you're looking at it.

I have a daughter who lives here too.

27.

She's an artist, which is always starving artists.

But um, but but that with our friend that demand, and I think the folks from the city here can speak to that.

The demand for that is really high.

Yeah.

Because there's not really options downtown.

And so I think I think we're really hoping that this is gonna meet the market in addition to housing folks who were already here in dramatically better housing.

Yeah, so I think that when we look, she's been gone year and a half, stayed someplace two years.

I think that we start out paying 17, 1800 a month.

And that was for one bedroom.

That was probably at least three years ago, and maybe four.

Well, I will say the taxes and bonds that are issued by this board and the the substantial help from the city and the state, that's what allows us to build to those price points because it's otherwise it's really just a math problem.

These are expensive to build, these are as high quality as anything gonna get built in town, but we're able to offer rents at a lower level because of the public uh benefit.

One more question.

You said College Hill today has 497 units.

So how many will that all phases what seven all things uh 1,126?

Okay, and so it's very substantial.

That's that's how you're gonna be able to let people who are there move in before the the next phase or with not having to relocate if they don't want to.

Yes, and we went through a very careful phasing and planning exercise to demonstrate to city council and we discussed it previously with this board of how we were able to make sure that people had the opportunity to move into new housing, as many as chose to do so.

Okay, so our ask is for the final resolution on the second phase.

As you can see, there's a lot of phases.

Um but we we really appreciate this board has been instrumental in allowing the plan to be on track um uh since we started in 2023.

So you're doing it phase by phase, so at each phase you have to you'll have to be back in front of us, correct?

We will.

Um they may you know we've had two very similar financing structures on the first two phases.

There they're um we gave a package to banker, and one of the bankers said that's that's the most complicated thing I've ever seen in my life.

But anyway, it's complicated because we're having to put a lot of things and meet a lot of goals at the same time, and you know, costs exploded in the early 2020s, and and the rates are still high.

So um that's in our working on a permanent uh financing campaign to figure out how to do this.

But the the work that and the and the inducement and the resolution that you all are doing is is really valuable.

Thank you.

Well, thank you for what you're doing.

Um will this board receive regular reports on occupancy affordability compliance and financial requirements?

We can I we can certainly do that, and I I would be interested in whether there's a specific compliance sort of function.

We have some uh issuers that have a uh specific compliance sort of overlay, um, but we can certainly provide updates if we knew.

I was gonna think that we do an annual report on all of our projects.

And I think you'll have most of what you're asking for in here.

And that has to go to the state as well.

Yeah, so yeah, there'll be a format for you.

Okay, no, we'd be happy to do that.

Okay, and we provide it to lots of folks.

Everybody wants to see that.

Yeah, um, excuse me.

Mr.

Chairman, I have to.

You cited a market analysis.

How recent was that?

Do you know who did that market analysis?

The um if I could defer to some people in the room that helped us with it that from the city.

The you want to speak to that?

All right, hi everybody.

I'm Hanukkah Venderson Director of the Housing Highlands.

So we have a number of different market analyses, one of which is on the agenda today, and we'll talk about that when that comes up.

But we did a deep dive on the census data because that gives us some of the more current data systems that's currently running to 2023.

I mean, we're looking what we compared was household size in Chattanooga with the housing we have.

And what we found is most households are either one or two people, or average household size is two people, but when you kind of distributed out, we have a lot of one in two percent households.

And this is a surprise to us, it's been a surprise to our elected officials.

We tend to think of Chattanya place with a lot of families, but the reality is we have a lot of seniors, we have a lot of young people moving here, and they need different housing than the supply we have.

And the supply is largely three and four plus uh two bedroom units.

And so from that we've identified there's a gap of 14,000 one-bedroom units.

We have 14,000 more households that are one-person households, and we have one-bedroom units for them to live in, which means there are plenty of people who I'm sure would trade a little bit of nothing, right?

For a slightly smaller pay space.

That that means they're household size a little better.

And RCL Co has done a number of housing studies.

Um RPA, and so we share those slides.

Yeah, share our data.

Okay.

Thank you for the code.

We also had a market study done as we do for all the financing specific to this building, this location, and the unit mix that we have, and that looks at what do they believe from the market data is achievable rents, and and of course that guides our our our rent structure and the lenders and investors underwriting and lots of things, and then also it looks at absorption.

So one of the things that parallels that is the absorption estimate on one bedrooms in particular is is really low.

So, in other words, you this project would have to get a relatively very low percentage of the overall market who's looking for those in this market area.

So you have a question?

Oh no, just a comment.

Uh primarily for the newer members.

Uh Betsy and C and E and really the choice neighborhood, they have a great reputation as far as I'm concerned.

I've been on this committee a long time.

They they always do their due diligence, they do their homework in anything and everything asked them for that they they didn't have now it's come back to it promptly.

So thank you, Betsy.

A lot of credibility as far as I'm concerned.

So thank you.

This is an exciting project, so well done.

Okay.

And can I just ask one other it's e it seems to me that it's easier for us to talk about numbers and how many folks are in each category, and I appreciate Richard talking about C and E and the work that they've done.

So I my question, I guess maybe is for Betsy.

But uh it's more of a feel good question for me.

So we're we know how what the numbers are, and we know that we were offering people opportunity to move.

How's that going?

What kind of reactions are we getting?

Well, we're doing a survey right now, which will be completed at the end of September again to gauge what people's desires are.

Um, but we haven't started moving.

We will not move anyone off of the opportunity move until these units have been built.

I will tell you that at our board meeting in two weeks, we'll be bringing on housing opportunities unlimited.

This is a national firm that's an expert in doing relocation for residents, and they too, in addition to our other partner, will be meeting individually with every single resident, and they they ask about schools, medical needs, and really help them find you know what's the best living situation for them.

So um, we haven't moved anyone yet.

Right.

I guess I I was really more concerned about they know what's coming.

Oh my goodness, yes.

And are they happy about what's coming?

Are they grumbling or are they well I will tell you this, and I'll I'll make it really brief because I know this is ancient history now.

We started this process the day before COVID started.

So what we had to survey the residents to find out what they wanted, we were able to um survey 82% of the residents at College Hill Courts and 82% at Gateway Tower, which is a second property down the road, and we asked them 56 different questions about all of their needs.

They were very, very excited about it.

And we and what I'm really happy about, and this is a team effort with everybody in this room.

We have walked together with the residents throughout the past five and a half years, advising them along the way, seeking their input along the way, and they're really excited.

In fact, we're gonna be really quick.

We're renovating the James A.

Henry School, and there is an apartment building right next door to it's 13 units.

And we asked every resident there, you know, it's gonna be a lot of construction, gonna be a lot of dust.

Do any of you want to move to a different place on the site, so you don't have to be subjected to that?

And they're like, Are you kidding, Betsy?

We want to watch this.

And they're they're really embracing the whole renovation of the school right now and the start on the hill.

Uh Columbia Residential is moving with block construction moving a lot of dirt, and they tell me every day they go up and look at it to see what's happening.

So I feel excitement.

I might be a cocky optimist, but um, I feel really good about it.

We are all optimists in this business, but um, I feel the same from being on site a lot with our team.

We we also meet with the residents very regularly, so we go to them first and talk about show this sort of in earlier designs and ask about what they're interested in.

I think the I I think people are naturally a little bit of a skeptic until they can actually see it.

So we're still in the in the drawing mode of what people have seen, but I think in the next um we're we're delivering the first phase in late 2026, and so I think people will be able to walk in, see what their their opportunity is to live in a dramatically different uh residential experience.

Um, and and at that point the excitement grows.

Frankly, at first you have to make sure people know it's actually for them because you know it it it that that's something we always have to work to overcome, but I think all the dialogue is really important with everybody.

And this is anecdotal, and Jim and I have had talks about this.

What they're most excited about is every unit is gonna have a washer and dryer.

And when people hear that, they're like, oh my goodness.

We've chatted a lot about the expense of that.

No, no, we're we it's it we we are doing that.

It's more and more the market.

I mean, I I've walked all the market properties around here too, and it's more and more the standard, and so people are moving into a market rate apartment when they move in here.

They don't have air conditioning right now.

Somebody asked in the last meeting whether the new housing would have HEAC.

I mean, that gives you an idea of the contrast of what it's gonna be for residents moving from that, but so that the balance of mixed income housing is creating that opportunity for people who are living in an 85 1940 housing, and also making it attractive for people from all over the city to want to live there downtown in a in a mixed income community.

So Chair, if I may.

Um I have a question regarding so in section eight of this resolution, it's requesting uh a bond term of 40 years.

Um I was calculating a few things on the gross rents, gross rents estimated around just under 2.5 million a year based on the the two bedroom and one bedroom numbers that you all provided.

Um do you anticipate needing the full term of the bonds for um for execution?

I think let me see repayment.

Well, what what the bonds are are backing this, and then there's credit enhancement that's put on it.

So at first the the bonds are gonna are gonna be back, uh, are gonna back the construction financing.

Um, and so but and then they'll and then some of them will get paid down because in in affordable housing, the permanent financing is always a lower amount than uh construction financing.

And so um in the long term, we have we have a we'll have a loan from Freddie Mac, and it'll be an 18-year loan.

So those will get paid off in 18 years, um, fully and it won't f it's amortizing at 40 years.

Got it, but it's a balloon payment at the end of 18 years, which is pretty typical for our industry.

Um, you know, the the investor wants to see a minimum 15 year term, they don't want to take any interest rate risk or have to think about it laying in bed at night or anything like that.

So, you know, typically have a 15-year term after the project's built and stabilized.

Okay.

Did that answer the question?

Yeah, that that helps.

Yeah, we won't we won't have a in this case.

If you had a HUD loan, you could perhaps have a 40-year amortization and 40-year term, but in this one we'll have an 18-year-old.

And typically the investor will exit the housing authority.

Uh we'll have choices to buy to purchase the investor's interest at the end of the 15-year period.

The housing authority will always own the underlying ground and have the first option to what we do usually with our partners is work to recapitalize it at that point with with a different debt structure.

At that point, the bonds would be paid off.

Okay, thank you.

Any other questions?

Yes.

So since you have new folks on here, maybe give you a little bit of more stuff.

Um, this body is a corporation under Tennessee law.

Uh y'all are the directors of this corporation under Tennessee law.

Y'all have the authority under 48101302 to be able to issue certain things for uh things that are based upon health education and housing facilities needs in our community.

So we may have a different group each time coming to see uh, but one of the powers that you have under state law is the power to make additional safe and sanitary multi-family housing facilities to be used by persons of low and moderate income.

So that's one of the reasons that they came to this board for the issuance of bonds.

Those bonds will be issued and uh will be uh at least approved here after there is a closing, and people go and purchase those bonds because they can get a lower interest rate for the development than they might get otherwise.

So that's the reason they're coming to you.

Okay, and I believe uh we do not have a motion nor a second yet.

Correct.

We're supposed to throw an apple at and remind me to do that.

Okay.

Um so uh one who back up and we need to have a motion to bring this to the floor.

So Chair wouldn't have motion, so moved for a second.

Second.

Thank you.

Uh any discussion or further questions for amongst yourselves or to the presenters.

Okay, seeing none, all in favor of the final resolution, please, and it will just be HEB 202508 or the one west side phase 2B project.

All in favor of the resolution, please say aye.

All right.

Oppose like sign.

Seeing none, resolution passes.

Thank you all very much.

It's run update to the city market value analysis to examine how Chattanooga's housing market has changed, particularly in response to various uh municipal-led housing activities in the last two years.

The amount of this is $50,000.

It would be a sole source approved by city purchasing.

And you'd addressed it before, but why don't you give us a high level again of what exactly this is, so we'll know.

Yeah, absolutely.

So uh in 2023, we completed market value analysis, and this is a tool uh created actually by reinvestment fund using cities around the country to identify the strength of housing markets throughout the city and to identify where market change is happening.

And so this is core data that we use to inform our policy work, and it's also data that we share with all of our partners so they can generate the type of housing that we need to see built in Chattanooga.

So the data that was used at the time of that original market value analysis pre-days COVID.

And so things have changed in our market, and we would like to update the market value analysis in order to see those changes and make sure that we are up to date with what it is that we're working with.

And so the reason for the sole source in this case is we want to engage the same firm who's the inventor of this methodology to make sure that we can compare apples to apples, and that they're using all the same uh metrics in order to construct that analysis.

So this is essentially for internal use, but it's not one of not a project.

Not for any specific processes.

It's what they use internally when people come to them and need to know what they're they have their own market analysis and we're updating that.

So is this new money or is this reallocated money you just send us?

Uh this is money coming out of the affordable housing trust fund.

Right.

I'm not sure.

Could we commit uh to have the uh update in MVA to be publicly available instead of internally?

Absolutely, and it is publicly available to her why is it more that it's not kind of tied to any one development?

So developers will do a market analysis for their project.

This is a citywide analysis, but with the last market value analysis we have presentation to city council uh and we make the whole presentation available.

I'm always sending it to my yes, absolutely, we will commit to make it a publicly available.

And the reason she's going to the sole source aspect of this is otherwise it would have to be bid out here for uh that to occur, and they would not have the same data going into this as a sample vendor.

Probably going to be very consistent.

They can pick up or lift off.

It's just an update.

Yes.

Yeah, a key component of this is for us to be able to see how our market has changed in the last few years.

Okay.

Um has your team considered using uh the realtors as a resource for this or uh UTC or any of the other education uh groups to do market analysis on this because I read on here that it says um contracting with the reinvestment fund is the only viable option to produce a valid and consistent update to Chattanooga's MBA.

So I'm just trying to understand how they're the only viable option.

Have you have you or communicated with any other groups?

Yeah, so that's it's a great question, and it really has to do with the methodology used to create the market value analysis.

So this group has their own sort of formula that they have created to value the different factors for our home prices at where quickly are they moving?

And so we want to be able to have that same methodology used in this update so that we're making an apple apples comparison.

That said, we do work with the realtors and uh we've engaged with UTC as well on data analysis broadly.

We're a really data-driven team, and so we try to get as much as we can have as long for the realtors to talk about sharing some kind of less data.

Um, and so we absolutely work with those groups, but for this product specifically, we want to make sure that we can have the same uh methodology and analysis just with updated data.

Thank you.

Okay, jump in and just add to that part of it is this is an update, the partial update.

So they've already done a lot of the ground work in there because they have formulas that already exist.

For example, Chat Nata has some unique topographic factors, and so they've made tweaks to their formula that already copied Chad.

So being able to bring them back on means that we won't have to start from scratch.

Um they're able to just plot paper into the work that they've already done, which makes it more costly.

So some of the issues used to be.

Exactly.

Yeah.

There's only ones who've created these formulas, and then they've already done a good portion of the work in the graphic already in the studies.

And how frequently will there need to be a um the next review?

It's a great question.

So the reason we're going uh forward with it now is because as I said, the data that was used in the first one was pre-COVID, and things have changed so quickly in Chattanooga that it's still really at this point, like it's not usable.

Now, do I expect our market to change as dramatically as it has in the last five years for the next 15 years?

I would hope not.

And so uh we can anticipate that as the pace of change slows, the need to revise this data can kind of come down as well.

But at this point, we really want to have that comparison between the pre-COVID and now you clarify that just a little bit with it being it looks like we we went under contract with them in 2023 and they used pre-COVID data.

So how did how did that where did that data come from that they used for that 2023 analysis?

Yeah, that's a great question.

So the data comes primarily from the census, which has a lot, and so that's the biggest why that data was using census data from 2020.

And just kind of the on on top of uh this question over there.

I looked on their website, and you know, they've done this for New Orleans and Philadelphia and I think Baltimore, a couple other, and there's their timeline is usually like every three, four years that they would would be doing this.

So we're really wanting to do it now just because of that census information, and that data has been updated.

So even waiting a year, we're gonna be basing it on the same data, the same census information.

Okay.

How does it look at reassessments?

Wondered about that since that occurs basically every four years.

Yeah, so that's also a component of the data they can look at.

Um, and I know that they're tracking the sales data and other kind of metrics of housing.

The reassessment is certainly a component, yeah.

Any other questions?

Uh again, we did not have a motion, a motion or second.

So we're gonna back up a second time, maybe about the fourth time today.

I'll remember it.

Um so we need a motion uh to have discussion on the city's market value and analysis request.

Is there a motion?

So move.

Is there a second?

Second.

Okay, any further questions.

I'll just say before we vote.

Uh, every time you all come in here, you have all the answers.

So it's very impressive to me.

And your comment answer is the same.

Every question is a great question.

So when you have a bad one, I'm gonna know you're in trouble.

Okay.

Um all in favor of the resolution authorizing the sole searches purchase of the uh market value analysis, please say aye.

Aye.

Oppose like sign?

Nay.

Okay.

Uh we have uh one, five to one.

Five to one.

Okay.

Thank you.

Okay, uh, we're down to number eight.

Should I do the motion before I read it?

So I remember it.

Yeah, it would be good.

Okay, a resolution ratifying the chair's execution of the of an inspection and maintenance agreement of private stormwater management facilities relating to the CNELI pilot project.

And before we take a motion, um explain to you all, and you correct me now.

Yes, is that from time to time uh they will need to do something, and so they bring me after they have reviewed it, uh, something to sign for execution to do.

And so what you're doing is you're ratifying what I signed previously, but all of these are within what I never sign it without knowing that's what we're supposed to do, and and the chair has that authority.

Okay, so we'd entertain a motion for discussion on the uh private stormwater management facilities uh pilot project.

If we approve it.

Okay, I have a motions or a second.

Second, okay.

Uh discussion on this, and I think this was this is on a pilot, which you all will learn what that is, but it's one of the projects that that we do, and that's the report that you'll see annually is on pilots and other things, but that's one category of projects that we approve here.

Okay, questions or discussions on that?

Let me just uh I'll I'll explain a little bit since we got Hicks to sign this document when it came in on here.

Uh it was in between meetings, and the at least there was a need to do this.

This is on the Mill Town project here for uh Chattanooga and the land development office in Chattanooga was asking for an inspection and maintenance agreement so that they could actually enter in and do inspections on the property.

And uh the purpose for this uh any time there is a payment in lieu of tax program, like the one we just talked about on here, uh, there has to be a change in ownership of that property while that payment in lieu of tax uh process is ongoing.

So if there is a pilot that may be a 10-year pilot out there, then the health education and housing facilities board will be on the title as the property owner during that time frame.

And uh the reason for that is that we are a tax exempt entity, and we have the power to be able to issue uh specific uh payments that are usually based upon the value of the property before the development occurs, and that encourages development to ongo here in the city of Chattanooga if it's within our powers to be able to do so for health, educational, and housing facilities.

So that's the reason that people come to us to be able to see about a pilot.

In this case, it's just simply the inspection and maintenance of the property because it's in the board board's name during that time, and it's confirming that uh we will comply with the stormwater requirements and not let uh floods occur on our property because we have not maintained the property properly.

And uh we pass all of that obligation on to the leaseholder who actually has the lease in connection with this property for Milltown and this process, and it's it's actually a uh I guess the CNE Larely pilot project that is ongoing.

So Chattanooga Neighborhood Enterprises is involved in that process, and uh the Lowerly pilot is involved for a specific period of time uh that that y'all have that ownership of the old standard.

Standard Coose of Stature property.

Okay, yep, yes, yeah.

So that that's what it's about.

And uh uh Hicks did not do something that is terribly outside his authority at that point in time, but we got it done, and that's the reason we bring it to you to ask to ratify his execution of that document.

Yes, can you um I know you just kind of commented on it, but what what exactly are we ratifying?

Just ratifying his signature uh as the health and ed board because they because Hicks can't act by himself.

Yeah, they came in and did a stormwater management review is what it is.

Any other questions?

All in favor of the resolution ratifying the previous signature on the private stormwater management facilities for the um uh Larely pilot project, please say aye.

Aye aye.

Oppose like sign.

Seeing none, resolution passes.

We have uh two other pieces of quote business or discussion, and so um are you gonna give us an update on this?

Okay, that's what I thought.

Let me ask you this.

This is an update.

Is there a vote required on this or is it just an information?

Both of them are informational items.

That's what I thought.

Okay, so good.

Whenever you got it real quick, thank you.

Chairman, how many safe travels?

Thank you.

Thank you.

Yes, sir, Brum.

So we'll we'll uh inform Richard later, but uh this is uh simply a lawsuit that was filed first off by a group called Demolition and Environmental Companies LLC against a whole slew of people, as you can see on the lawsuit on here.

Uh apparently the contractor involved community construction group, the AIM Center Esparrow, Chattanooga LP, and the Health and Ed Board is also named as a a party to this case, as well as Cadence Bank, uh Cedar Rapids Bank and Trust Company, and then the trustee for those uh entities here.

And uh this is uh a claim that uh one of the contractors in connection with this matter has not been fully paid for their work that was involved in this project on here.

And we have forwarded copies of this on to the Asparo group and the AIM Center group who are supposed to hold harmless and indemnify the health education and housing facilities board from any claims that might occur while this project is ongoing.

Uh, but the um the person that is involved in this particular claim on here uh is a um a group that did some sort of environmental work in the amount of 95,754 and five cents, and they want to get paid for that work on here.

And I'm not sure exactly how that work has been proceeded at this point in time, but they've asserted that it is a violation of I guess breach of contract, unjust enrichment, mechanics, mechanics, and materialmen's liens, and violation of the prompt pay act here as well, they've asserted in connection with this matter to get paid.

And uh the only concern I I have, and we we immediately sent this on to Sandra and the folks over there that might be involved with the uh uh Esparrow group on on this is that you know there are some obligations to pay for attorney fees and costs on some of these claims if they don't pay them quickly enough.

So just trying to make sure that is in involved in connection with this matter.

This uh complaint was served on our office on August 27th.

That means we have 30 days to respond to it from that date.

Hadn't filed an answer yet, but we'll be filing an answer saying we've got a contract that uh this board is indemnified and held harmless by our agreement.

So we'll see where it goes from there.

What this is basically on is a pilot project, like what you saw the last one was.

So they they're probably in the process of doing a project, they had to demolish something or doing some type of environmental study.

Okay, that's what this is, and but and the reason we're named is that because we hold title as he mentioned earlier to the property until all that goes through.

Okay, that's why they're named everybody.

And Joe Kelly's got a little information for you.

Very briefly, uh Joe Kelly, I'm the uh general counsel for the Chattanooga Housing Authority.

Uh we are actually the the general partner or one of our entities, uh instrumentalities, not CHA itself, but one of our instrumentalities is the general partner for the LP because we're involved in this project with the issuance of vouchers.

Uh uh we're aware of of the claim.

Uh we know that the contractor has been engaged in discussions and uh we will be following up with the contractor to make sure that to the extent necessary this is resolved as quickly as possible, or if if not uh we're not able to resolve it, that answers are filed and it proceeds through litigation.

So we're aware of it.

Okay, thank you.

Okay, you want to talk about the second one?

Yes, sir.

These are reports at least on the back side and we get over to too many pages this time around.

Um these are both reports that we have sent to the comproller's office for any amounts of uh debt and obligations that are outstanding this year.

Uh this is principally on the bond uh amounts that were involved for the Silverdale Baptist project, and we are required to file that.

That is an educational facility that this body has uh done work for, and it was for bonding that they came to this group to get uh bonds in connection with that process.

One of them uh series 2025 A in the amount of two million one sixty-six seven twenty-seven, and then uh series twenty twenty-five B in the amount of two and a half million dollars, and uh every time we issue some sort of bond uh debt amounts by this board, we file that with the comptroller's office with the state, and they uh are appreciate us filing the report and keeping up with it, and that's one of the other requirements we do in our spare time.

So when it says report on debt obligations, so has Silverdale not paid no, no, those are just the bonds that have been issued this year for 2025.

So there are two different bond series 2025 A and B.

So the total amount of the bonds is not quite five million dollars, but it is saying that that they have not paid it, or are they just they're just reporting that there is an obligation?

There is an obligation now for that amount of money to be paid.

Okay, okay.

So it's not this delinquent.

No, sir.

It's just that that okay.

And we we report that directly to the comptroller's office.

Uh Maria in our office prepares it up, sends it to an online form, they get it and they know that that it's there.

And if for some reason there is a problem where somebody goes out and doesn't completely uh uh complete the the bond payments they're supposed to make, then they'll let us know as well.

So the state is keeping up with that process.

So if you look at the title on top of the page, it says health education and housing.

So you're gonna you're approving bonds, it's sometimes for health facilities, it can be a hospital educational, it can be a school, it can even be dorms for housing, and what you saw over there.

So that's a lot of what we do is bonds for that.

Okay, and otherwise those projects probably wouldn't get built.

Okay.

You're gonna you're approving bonds it's sometimes for health facilities it can be a hospital educational it can be a school it can even be norms for housing and what you saw over there so that's a lot of what we do is bonds for that okay and otherwise those projects probably wouldn't get built okay by my looking at this we're down to adjournment unless you're gonna stick something else in there not that I've got right now no sir okay any questions on anything we've done today okay seeing no other business uh chair want to have a motion that we adjourn motion to adjourn before we vote uh October what 20th okay do we have uh business for that meeting yes sir okay all right so we meet on a monthly basis and so you can and it's the third third Monday third Monday you can put on your calendar and then what we'll do is any time that we don't have enough then or don't have anything we cancel it because I didn't figure you want to drive downtown for a cardboard sandwich okay and and Mr.

Knoblett may not be here on the 20th but I will have someone that will be standing in my stuck in my mind too let me look at something and actually I will not be here as well um well I think we're done with we'll be fine I'll have someone familiar with it at that point yeah because Richard's shared them before okay all right so October 20th okay all in favor adjourning please say aye aye opposed you stay in guard the building okay thank you all thank you thank you