Good morning to all director and to all of those.

We're going to get started.

It is roughly now 10 o'clock, and we want to make sure that we go over the agenda and make sure that all is well in the absence of our chair, and we're happy to uh step in and kind of take care of some of the important things of our city.

Let me just thank first and foremost.

Uh we are joined this morning by those of our council.

Uh Vice uh Mail Pro Tim, Councilman Amy Peck is joined with us.

I'm Mail Pro Tim Martha Castex Tatum, along also with our at-large one councilmember Junior Ramirez, and at large five, Councilmember Salah Alcorn.

We are represented also by uh representatives from District C, uh, also from District Elf and also from District G and H, the representatives are here, and so we are ready to get started.

Most of you know I am councilmember Willie Davis, at large two vice chair, and we of housing affordable uh board of uh we're so happy to have both of us here and our director, and so we called in this meeting to order and and compliance, and we're gonna get started on the agenda.

Our directors here.

Uh we want to today we're going to hear from all of these, uh, particularly our director, and regarding our agenda.

And so we're going to start off with compliance and grant administration presented by Director Mike Nichols and Deputy Director Derek Sellers.

Good morning, gentlemen.

Go right ahead.

Good morning, Mr.

Chairman.

Thank you, sir.

Uh, thank you for having here, other council members.

Thank you for being here.

Um, we have a some interesting items this morning.

We're going to go through after we talk about compliance and grant administration and a uh and changes there.

We're gonna spend a substantial amount of time on a public facility project, Eastern Maker Hub, uh, to really bring all of you up to date on that project and needs that we have there.

Um, one of the things that as I look over my two years, um, we've looked at a great deal at homelessness, at uh single family housing, at multifamily housing, a lot of public services.

Um, but we haven't spent much time on public facilities.

It is a big part of the work that the housing department does.

Again, much of it dealing with federal funds that come through.

Um, there's an economic development piece of that that's required out of many of the funds that come through our department.

And so this is an opportunity to look at one project.

Um, you'll see the complexities there, but also you'll see a little bit about how we do things and what we want to get done in a public facilities project.

Um overall, you know, just to take one step back.

I still believe we are going to see over the next year a greater emphasis nationally and locally on affordability of housing.

It is a real national problem.

Um we in Houston think we have a better situation than other parts of the country, and probably do, but we uh the affordability piece of our housing is a great component of our growth, and we'll spend more time thinking about that and talking about that.

Uh that's the big picture that we'll look at.

But so we'd like to open up with our deputy director Derek Sellers, who we're so appreciative to have on this on his team after with more than 20 years experience and certainly uh knows more about affordable housing than most people will ever learn.

So um, Mr.

Sellers.

Good morning.

So for agenda items two and three, they're both related to the East End Maker Hub, and we know that uh many of you may not have been on city council the time that this was originally voted on with the city's investment in this project, uh, much less when it was completed just a few years ago.

And so what we've done is we have this four-minute video that we're gonna show you that's gonna tell you a little bit more about the East End Maker Hub, and then we'll go into agenda items two and three about the actions that the department is recommending.

Empowered by a half million dollar capacity building grant from the East End district in 2017.

Empowered by a half million dollar capacity building grant from the East End District in 2017, UpCDC and TXRX Lab set out to transform Houston's East End, creating a first of its kind hub for advanced manufacturing, workforce training, and economic growth, a self-sustaining engine of opportunity.

With nearly 40 million dollars raised in capital investment to buy the site, including crucial support from the city of Houston, HUD, the EDA, and private partners all coming together, and over half the funding coming from the city of Houston.

Through a HUD loan and grant, the vision became a reality.

In February 2021, the East End Maker Hub opened its doors, and the impact has been undeniable.

Without the East End Maker Hub, we would have struggled.

We did struggle to find a place where we could dig in on our hardware development and our RD effort.

And without such an affordable facility with so many features, I don't know that we could afford to build this company in this environment.

This 37,000 square foot facility is a powerhouse of self-sustaining opportunity.

65,000 square feet dedicated to a manufacturing workforce incubator, equipping Americans to create world-class products, implementing world-leading technologies.

234,000 square feet least to high-tech manufacturing startups, providing affordable space for small businesses to grow.

But none of this would be possible without the city of Houston's partnership and funding.

At Maker Hub, rents are 25 to 30% below market rate.

That affordability isn't just helpful, it's essential.

It frees up critical resources for research, development, and innovation.

It creates a secure environment for startups to invest capital necessary to achieve commercialization.

These startups are assisted by on-site engineers and scientists at project partner TXRX Labs.

Thanks to the City of Houston's support with a $22.7 million Section 108 HUD loan and a $1.4 million grant.

Entrepreneurs can build, test, and thrive.

And the results are clear.

Over 620 high-quality career launching jobs created in under four years.

Over 1,300 low and moderate income individuals placed in jobs through apprenticeships and workforce training throughout the region.

97% occupancy rate.

Proof that demand for these spaces is stronger than ever.

Over 17,000 students impacted through STEM education, building the pipeline for the next generation of American innovators.

More than 150 teachers trained to bring maker skills to their classrooms.

Over 50 startups and small manufacturers under our roof.

Over 90 businesses launched or scaled here.

This is what a smart high impact investment in America's future looks like.

The East End Maker Hub isn't just revitalizing a neighborhood, it's stimulating Houston's economy, creating not just livable wages, but amazing jobs that lead to high paying career opportunities.

When we moved into this space, I think the team was three people, and we held, I think, five or six hundred square feet.

We now have 32 employees, and we occupy 8,000 square feet of the facility.

The East End Maker Hub has enabled us to grow the team and really have an impact on our industry and to have an impact here locally as well.

We employ 32 people, they all have families, and I'm excited to be a part of that change in their labs.

The City of Houston's model is one that cities across America can follow.

These public-private partnerships prove one thing.

Strategic partnerships with the city of Houston drive visionary projects that change the future of those in need.

Now is the time to support bold visionary projects like the East End Maker Hub.

Because when we invest in innovation, manufacturing, and people, we build a stronger, more competitive America.

Building Houston's future, strengthening America's workforce.

Thank you.

And so let's move on to agenda item two, because I think this helps uh set the stage for it and what we're asking for under this.

So for agenda item two, the Housing Community Development Department is recommending City Council approval of a substantial amendment to program years 2021, 2022, and 2023 action plans.

We're going to look to transfer 1 million 63,113 and 6062 cents from various activities to the economic development activity.

So specifically what we're asking for the substantial amendments, these transfers in program year 2021 will move $66,693 and 65 cents and lead-based paint funds to economic development.

In program year 2022, it this transfers $97,620 and 41 cents in code enforcement and 100,000 in public facilities funds to economic development.

And in program year 2023, the transfer of 798,799.56 cents in public facilities improvement funds to economic development.

Just to be clear, the funds being transferred from lead-based paint in 2021 and then code enforcement in 2022 are unused amounts that were remaining on our letters of agreements with other city departments that implemented those programs.

So this was leftover money in prior years that's being repurposed.

These economic development funds will be made available through this substantial amendment and will be utilized as part of an amendment with East End Maker Hub, which is being presented as item three on the agenda today.

This concludes my presentation on this specific item.

Okay, Derek, before we uh move on, we have uh a mail pro Tim uh Tatum in the queue.

Sure.

I was just curious as to what actually made these unexpended funds.

Did we just didn't spend we did enough people didn't say they had lead-based paint in their homes for us to help cure that?

And so we had this money left over.

So this uh our department enters into a letter of agreement with another city department for specific scope and budget related to these activities like lead-based paint and economic development.

At times, a lot of that is payroll, so it's city inspectors that are going about and doing this work.

I know specifically around like say the uh economic uh the code enforcement issue, they had struggles hiring enough individuals, enough inspectors to be able to spend all of that funding in that year.

I would imagine there may be similar things around lead-based paint as well, and so those letters of agreement ended in those years, and then we entered into new letters of agreement for other funds in in years since then.

So these were old funds that went unexpended.

And then when you talked about the public facilities funds, I I feel like you said 97,000, you meant 197,000.

Well, it's a total of 197,000, but that's being split between two activities.

One is the code enforcement activity that's coming out of 97,000 and then 100,000 for public facilities to total that 1970.

Okay, got it.

Thank you.

Uh we recognize Councilmember Ramirez.

Thank you, Mr.

Chair.

And thank you, uh Director and Derek for the presentations.

I'm curious, the money that you are proposing to move from lead-based paint and code enforcement in particular.

Uh, that's money that that has just been sitting on the books because it's been unspent, is that right?

Yes.

Um, how long can it stay in those places if if we don't vote vote to move it?

So there this HUD comes in at some point and sweeps funds that are unused from older years.

And so you I think I think it's eight years.

Is it six years or eight years?

Six years.

And so if you have a grant open for at least six years, it goes unused.

They they will sweep funding uh and it goes uh into they redirect it where it's going to go.

Okay.

We're not we're not quite there yet, right?

Correct.

And so in in case folks don't know, the the reason we have correct correct me if I'm wrong.

The reason we have lead-based paint programs is because it's been well shown that there is a connection between exposure to lead-based paint uh in utero or or when you are young with increased criminal activity as an adult.

Is that your understanding?

Yes.

Okay.

Um so I'm concerned because I I think last year, year before last, we took some money from lead-based paint as well and used it for other purposes.

Now, the code enforcement that uh Mayor Pro Tem alluded to, what what sort of code violations would this money go to enforce?

So it's the stri it's the typical neighborhood code enforcement activities.

And so it's the writing of issuing of citations.

Okay.

So we paid for inspectors for uh at that point, it was Department of Neighborhoods to go out and issue citations.

So the type of violations Houstonians complain about all the time, at least they they do uh when I'm out with them and and so forth.

What about the money that you proposed to take from public facilities?

Um what was that intended for?

So that was just unallocated funding that was budgeted into that line item uh but was not placed on a project.

So we didn't have a project lined up for that specifically.

All right.

And I assume a little bit later in your presentation you'll talk about uh moving more money to East Make East End Maker Hub, is that right?

That's going to be agenda item three.

Okay, thank you.

And a little bit of clarity on the lead-based paint line item.

We are a match to a grant that is being issued to the Houston Health Department.

So our funds only come in upon the Houston Health Department executing, they have the main grant with HUD, and then we they have a match requirement.

We help with that match requirement, but they are implementing that program.

It's not implemented by us, and it's not primarily funded through CDBG.

We are just a match component of it.

All right, thank you.

Thank you.

Uh Mr.

Chairman, let me add to this.

Sure.

And the two items, blood-based paint and and neighborhood um looking looking at the need for inspectors in neighborhoods are important items.

One of the complexities that we deal with all the time, and then and it is very complex, is the need to spend money more quickly within a time period.

And so the pressures on whether it's a city department or a nonprofit in public services, we want to make sure that money is spent more quickly, not just held there.

And that's in being it being uh being um uh moving more quickly to use that money is something we have to do.

It is not a uh comment on the importance of those two projects.

It's incumbent, it's a real comment on getting the money moved before it's swept by HUD.

So we use it or lose it.

Yes, sir.

Yes.

Yeah, following one.

We have we have one other council member.

We'll get back to you.

Councilmember Alcorn.

Thank you, Chair.

And so on on that same vein, you know, how many inspectors does uh CDBG pay for in code enforcement?

At this point in time, we are no longer funding code enforcement.

That moved over to HPW.

They as part of that transition.

Yeah, I understand what is happening, but we've we've historically funded about how much that about 100,000 a year, or it seems like more.

It was substantial amount of money.

We funded a lot.

So, colleagues, that was money that went to all the districts, you know, that in the low and moderate income areas to help with code enforcement.

So now we're not doing that anymore.

I mean, I love the East End Maker Hub.

I'm all about it.

I'm all about, you know, that money, but that does that does worry me that that would seem like a good source of funds that we used for code enforcement that we're no longer using.

Right?

I mean, we used to pay for what, five or six code enforcement officers?

It was more than that, but the the transition happened uh, I think in this fiscal year that we are in now as part of this year.

Well, it's the one or last year.

Yeah, so 25 and 26, we have it.

C D B G hasn't been able to do that.

I mean, I I knew we had moved it all to public works, but I I I guess I just wasn't I I just didn't know.

I have been at HGAC for all these meetings, so I'm I'm behind.

But but now I'm not there all the time.

So I'm an alternate.

So um I guess I just didn't realize we were no longer using C D B G to fund any of those activities.

And the reason was just we were going to bulk up and use more from public works.

We were gonna like it's not like we're losing inspectors, it's that we're just hiring them with different funds.

Correct.

Okay.

Thanks.

Thank you.

Um uh councilmember Ramirez, did you add a comment before we get to the question?

I do.

Thank you.

Follow just to follow up on your on your comments, uh Director.

So does does the move uh for code enforcement to public works mean that we can no longer use these funds for code enforcement?

So we we when that transition happened, we were informed by HPW that they had the funding to handle this the payroll needed to implement code enforcement on it.

Okay, so so public works is telling you they don't need this money in order to do code enforcement.

Okay.

And uh on the lead-based paint director, um, if if we can't spend it quickly enough, is there is there a better better model of somebody else who should be handling lead-based paint abatement?

Again, that's done through the health department.

So I do not have an answer on that.

Is do they have the right system or other parts of that?

I am sure that's something that Dr.

Trent can answer.

I do not know.

Again, we would just match for that for their programming money.

All right.

Thank you.

Thank you.

Before we uh get to Mill Pro Tim, we'll recognize that we have representative from District B as well as um also from uh at large three's office as well.

Mayor Pro Tim.

Thank you, Chair.

Um, colleagues, I think it would be um helpful for us if we could maybe in one of our additional committee meetings get an update from public works on the trained code enforcement officers.

It's my understanding that we moved them there to public works so that they could be cross-trained and not have individual inspectors that were paid by CDBG.

Y'all know my push for each district having their own inspectors.

I'm hopeful that now that they're all being cross-trained, now we can actually move to have our own code enforcement officers in specific districts so that we have a direct line of accountability.

Yeah.

Um, but when we were paying for them with CDBG, that was one of the reasons that they kept giving me is that we can't have our own inspectors in the districts because they were assigned to specific areas based on income and what was happening in those particular areas.

So I'm hopeful that now that we are cross-training and moving all of our code enforcement officers to public works, we'll be able to specifically have some assignments in our districts as well.

Sounds good.

Sounds good.

All right.

Thank you.

All right.

Right.

We do have Ryan Pibbs will be up and we'll speak to the other issues around Eastern Maker Hub.

Uh item three.

If we move the slide.

Uh we do have Patrick Yazell, who is the CEO for the East End Maker Hub, here today uh for to answer any questions that you may have from him.

Um for those of you who have not been to the Eastern Maker Hub to see what's going on in person.

Ryan.

Good morning.

Good morning, Coach Pro Tim, Council members, chief of staff.

Uh HCD recommends approval of an ordinance authorizing a second amendment to the loan agreement and grant agreement between the City of Houston and East End Maker Hub to provide an increase up to 1.5 million dollars in C D B G funding.

Uh next two slides uh describes how in May 2024 the city approved about $3.3 million in CDBG funding for the first amendment, and then on November 19, 2019, City and HUD entered into an agreement for the Section 108 loan funds for about 22 million dollars, as well as a 1.0 CDBG for the investment into the development of East End Maker Hub.

Next slide.

These next few slides describe uh Eastern Maker Hub's capacity as far as uh 307,000 square footage warehouse located at 6501 Navigation Boulevard.

Uh it helps facilitate economic development by providing below market rental spaces for small manufacturers, uh spaces for incubating new startup businesses while also providing training, education, apprenticeship programs for the minority for the community.

The programs will provide low-income individuals with skills to assess uh to access higher paid employment.

Uh the uh as the director explained earlier, the founder is here, Patrick Gazale.

Uh, if there's any questions in regards to the to the property, uh I will say this property is um producing hundreds of uh on-site manufacturing jobs and hundreds of regional uh job placement.

I know the founder can can speak to that as well as a number of uh our startups as well.

Thank you for your presentation.

Yes, thank you, Chair.

Um is this the extent of the presentation on the East End Maker Hub?

Yes.

Okay.

I'm just trying to understand um how much money the city is committed to this.

So in 2019, the city loaned uh East End Maker Hub 22.7 million?

Correct.

Is that correct?

And then um there was another 1.39 million grant.

Yes.

So that's the grant.

Is it 1.39 million?

The other the loan was through the Section 108 loan program, which has a number of complex issues that I certainly would run away from if I had to do it again.

But that's the that's the program that we uh that they raised the money through.

Okay.

And then uh Which is a federal program.

Amendment to the 2019 loan approved by this council in May of 24 for another 3.3 million?

Correct.

To did I did I get this right to uh help them make uh interest payments?

Yes.

Are there any uh principal payments being made at the present time?

No.

All right.

And um the item that uh we will be presented with on an agenda is for is for what?

100% 825.

Okay.

And when should we expect to see that on one of our agendas?

Um we are going to uh March 18th.

Okay.

Um so that original 22.7 million dollar loan from 2019, was it a forgivable loan or was it anticipated the it would be paid back?

Section 1081.

This was uh the 22 million dollar?

This is a section 108 loan.

This is uh definitely to be paid back, so it's guaranteed by by HUD.

Uh it's a loan to the city, but we are to definitely pay all of it back.

And and when do we have to pay that back or start paying it back?

We're gonna we're working on the extension right now with HUD, and we're having the uh the actual uh extended timeline to be extended to 2039.

And is the East End Maker Hub uh capable of of making loan payments?

Um that's what we're and I can have the president come up and speak to that, but that's what we're working on right now.

He has a number of other options that he's working on to get his principal payments uh in place very soon, but he's working on a number of uh uh scenarios as well as selling a piece of the property, expanding the pre a piece into the tourist 2023, uh tours 23, as well as us extending our loans.

So that's what we're in the process of uh negotiating now.

Okay, yeah, more information will be helpful.

Yeah.

Okay.

We can bring uh Mr.

Ezel up.

Um and I'm happy to tell I'm happy to sit down while he comes up.

I think um and again I can go into detail, but part of what happened, I'm sure Patrick can bring us up to date on this, is that the plan has always been to get a fixed rate loan um through HUD, and we missed there were not opportunities to do that over the last couple of years, so the rate has been much higher than we had planned for when this was originally started.

And that's one of the reasons we're having to do this.

Uh the other thing just to know that if there's any default, then this then the city has to come up with 22 million dollars now.

So part of what we're doing is we're looking through many different ways to make this a sustainable project, and again to take it to 2039 um to get the fixed rate loan in place at a reduced rate or all things and sell a little piece of the property off, or all things we would do to get there, but Patrick can move that forward.

That's why I said I have always had problems with the Section 108 loans.

Okay.

Okay.

Would you just be in here?

Thank you.

Give me a name and just hi.

I'm Patrick Kizell.

Um thank you for having me here, Councilmember.

Oh, I'm the uh CEO of the East End Maker Hub.

Uh founder of uh Up C D C which is a partnership community development corporation.

Uh Roland von Kernatowski is the founder of TXRX Labs.

He's sitting over here.

Uh and together we founded the East End Maker Hub.

We also have Jason Bullen, my VP of development, and we have uh Mike Rodriguez over here, director of uh workforce development here on today.

Okay.

Um so the city's put forth uh uh quite a bit of money.

Um I assume this was not supposed to be a self-susta it it was intended to be self-sustaining at some point, right?

If you may I can give you some context.

So uh we put together our financing in 2019.

The original uh pro forma called for uh carry cost of uh $394,000 a year in interest uh with the interest rate environment that we had at the time is an interest-only loan of $22.7 million and an additional $1.39 million dollars in uh community block funding.

Subsequently we completed construction during COVID in the summer of 2020.

At that time we began inquiring with the city to do rate lock in which our loan documents provided for I think um the city at the time uh reached out to HUD and HUD uh delayed essentially so that this is basically based on commercial paper.

So the HUD issues commercial paper to the public they loan the money to the city the city loans the money to us just to give you an idea how it works.

They didn't do a rate lock in and so in the in uh 2021 I began to panic because I saw the rate environment changing changing and pushed really hard um to get the rate lock in and I finally got a note uh from housing that there wouldn't be a rate lock in lock in which meant that we had a floating uh interest rate and so from um December of uh 2020 through about April of 2021 our our uh interest payments quadrupled and we went from expecting to pay just under 400 thousand to I think the high was about a million five a year and so it wasn't sustainable from our standpoint.

We went to HUD the city went to HUD and uh talked to them about it and it turned out that this is not actually government money so they couldn't do a rate lock in for us.

But what they uh suggested was that the city use part of their uh community block funding capacity to carry the maker hub and that carried us for a period of time and caught up on the past interest rate um and so that's where the $3.3 million dollars came came in and uh starting in May I was contacted by um uh by the director uh to say how we're gonna work on this and uh we began to work on a plan for sustainability for the East End Maker Hub and our plan essentially is to uh we have 21.5 acres at the maker hub we don't need it and so uh we can sell off a parcel of land that's uh could sustain about a hundred thousand square foot building uh we are uh have callers working on that we think we can bring in a little over two million dollars for that um we approached the uh TURS uh 23 and talked to Gwen Tellson about doing an annexation we're surrounded by 274,000 uh acre excuse me 274 acres of uh industrial land and they're looking at doing an annexation of that property and so over time starting about three years we generate money from that but the bottom line is um through 2039 we would generate about 11 million dollars at the East End Maker Hub through our operations and through our sale of property uh to cover this loan the TURS would generate another 11 or 12 million dollars on top of that and we would bring this loan down to about 20 around 14 to 15 million dollars by 2039.

Now I would say we have a um an appraisal being done right now uh on the maker hub property itself because the alternative is we sell it.

Uh we've been told by the appraiser that he thinks the appraisal is going to come in between 28 and 32 million dollars as is where is so your asset substantially exceeds the value of that loan.

In 2039, if this property continues like interloop properties have done in the last 20 years it will be substantially higher than that.

So the city is covered from that standpoint at the maker hub we are required under our documents to provide below market rents.

So in addition to the loan increase um our rent our interest excuse me insurance went from what we expected to be 165,000 a year to over 4000 a year and um the other costs were much more expensive than we thought.

So the the culmination of that was that it does cost money to operate it.

We aren't generating enough cash flow to cover this type of debt but we do we do have a plan to make that happen.

I would say that last year we trained $736 people at the maker hub and we're continuing to train uh individuals and make a huge economic impact.

The initial economic impact study showed that this facility would have a hundred and fifty six million dollar year impact on the city and that was based on about 400 jobs were exceeding all those numbers.

Bottom line is you know we'd love your support on this but that's sort of how we got here.

Have you let me ask the question have you have you submitted that proposal to housing?

Yes.

And we work on that together.

I mean, we have mu literally monthly meetings with uh when Patrick said I called him, I think I was yelling.

Um monthly meetings about how we do this, what we need to do to make uh the Eastern Maker Hub as sustainable as possible as quickly as possible.

Um even as even as he sits and tells these what he's doing now, I begin thinking about more ideas about how to bring it sustainability.

Um looking at councilwoman Alcorn when with her work with HGAC and and you know, they have a huge sum of money on training.

I think not very well done.

My personal view because of the work I've done, it's something that maybe we could bring in some help on that too.

And we do an event, we have an event next uh month with HGC.

There will be 1,500 uh youth there on a workforce day.

Okay, all right.

Well, I like to ask if if we could get more of the information, Brother Ruck, in regards to uh the status, I think it would be helpful to to everyone and consideration.

I think the idea of regular updates on this is important, and I'll put that on as a regular update.

Okay.

Well I I do want you to know that Patrick, my team and I know the serious nature of this.

It takes and even coming to you at this time, we really did it because it was what was needed, and then we go to our let me make uh to give you a slightly more context.

This has new market tax credits underlying it.

And if you understand those uh somewhat the new market tax credit have a first lien on this.

The city's lien for its loan is a leasehold improvement lien.

Um which you can't really sell loose hold improvement very well, right?

But the new market tax credits will go away at the end of this year.

And so part of the reason we need this bridge right now is that once the new market tax credit structure goes away at the end of the year, uh then we can do the refinancing with HUD after that, and then the city transfers their leasehold improvement lien to a first lien position on the property.

And so if we could get all this done now, we wouldn't need the bridge, but we literally cannot get this done now with HUD, um, and we can get it done in the first six months of next year.

And so this bridge will carry us through that, it'll give us enough time for the TURS annexation, and we have people looking at this property now.

We think we can generate revenue, so we think that once this gets done, we're aiming for a sustainability plan to carry us through 2039.

Okay.

And at that point, we can either sell the property or we could uh refinance it with cash flow.

Very good.

Any other questions?

Yes, Chair, I've got a few follow-ups.

Sure.

Thank you.

Um so refresh my memory.

TURS 23 is which one?

That's Harrisburg TURS.

Harrisburg Tours.

And so so if if this property is annexed, then we'll be using uh other tax revenue to to bolster this.

Is that right?

You would be using the uh increment from the industrial base in that location that we're surrounded by.

And we have seen stimulation of this industrial base since we built the maker hub.

And so the thinking is we were a catalyst for that location, and it will continue to catalyze those properties.

You've seen another a number of properties being redeveloped over there.

Okay.

And so so you you don't have the cash flow right now that that you had hoped to have.

What was what was the model?

Where's the cash flow coming from?

Is it coming from the the reduced rents that customers are paying?

Or is that it?

Did you have other cash flow coming?

No, nothing substantial.

Okay.

You know, TXRX.

Uh and we have we now have five workforce development partners at the Maker Hub.

Uh, but and some of that money comes from the Department of Labor, but that all goes towards um programming and operations, not towards the facility.

And and you're at 90%, did I hear right 97 percent occupancy?

Yeah, I think today I calculated last night.

We're 94 percent.

We re range between 92 and 100 percent.

Well, we've never got to 100.

We keep thinking we're gonna get there, but then something will move.

We have um about 30 suites that are below two 2500 square feet, and those are the ones that tend to turn, and then we have a number of suites that are um uh 3,000 feet to 11,000 feet, and we have a couple of large suites, and those are the ones that tend to hold longer.

Okay.

And so we get some movement, but we've we've uh we were leased up um by the end of 2021.

We only opened in and you know, we were leased up in 10 months.

We were over 95 percent occupied six months after that, and we've stayed full.

Okay, thank you.

Thank you.

We're gonna move forward.

Thank you so much for the information, and there are more to come.

Um at uh so at this time I want to welcome uh again, Dr.

Good morning.

Good morning.

We're we're we're again very proud of the senior team.

We have to directed guns plays a significant role in what we do.

Um I love about her work is uh transparency behind it.

Sometimes I think you have finance people who are always hiding money and waiting needed last second that come forward.

Um as our Chief Financial Host Jones really is proactive about showing us where their dollar, where we're short, good where we can use it.

Absolutely.

Thank you, Mike.

Good morning again.

Um what I'd like to talk to you about this morning is our Uptown TURS bond series 2021.

Um if you remember, these are the bond proceeds that we receive from the actual Uptown TURS organization.

So what we are recommending this morning is council appropriation of 1,454 dollars, 1,454,981 dollars and ninety-one cents of Uptown TUR series 2021 funds for single family activities.

Um these funds are generated from the sale of single family homes through the single family new home development program and are the sales proceeds.

So what we would consider it in our um HUD entitlement programs, these are like program income.

And so if you remember from those programs, if we treat everything on a similar basis, we would come back to City Council and ask for those funds to be reappropriated for use back to the single family program.

And so that's what this action is recommending council approval of.

Any specific contracts will be brought back to you for council approval, but essentially this action is just flipped to the next page, please.

This action is just requesting council appropriation for use of that program income just to go back to the single family program for to be used, but uh for either home repair, new construction, down payment assistance, or activity delivery costs, all within the single family program, which is what created the program income.

And that concludes my presentation.

I do believe there was a fact sheet also included so you can see all of the various previous appropriations uh in case you have questions.

Yes.

We thank you.

We want to recognize Councilmember Alcorn.

I was just gonna ask about what's on the sheet.

What was what was the total amount of bonds from that?

Uh 100 million.

Yeah.

So this is the 100 million.

That's pretty much gone, right?

It has either all been committed, um, spent, committed, or on its way to be committed.

There are very few funds remaining.

We will receive some program income, like you'll see some of the program income here that was generated, but that will all go back out to be reappropriated again.

There's very, very little.

How much more do you think we can expect on program income through those bonds?

Yep.

I will defer to Cedric on that one.

Since he runs the single family program.

Good morning.

Uh so the money is used in perpetuity.

So we have 10 properties that are currently for sale under NHDP, and as we generate sales from those properties, that money will be coming back to council for approval uh in perpetuity.

So this 1.4 million dollars that's going back into the pot will continue to be used to create more affordable houses.

And then and and then as as houses sell down the road, we get that.

That's correct.

It won't just be these 10, it's just like uh how many houses have been developed with this.

So currently we've developed about 35 homes out of these uh funds.

Um we have 10 that are um currently for sale.

Okay, and another eight that's under construction.

Okay, I'll I'll look at the backup.

As you as you say out of these funds, you mean out of the profit funds.

Yes, all the program income.

Thank you.

Program income funds, thank you.

Yeah, not out of the hundred million.

That's not out of the hundred program manager.

I would hope not.

Or I want one of those houses.

That's why everybody understand that.

So if you think about it, the hundred million, the hundred million has all been either spent or omitted.

And so this is things that already have gone.

But in this particular one, if you look, I think like I said, it's at the back of the agenda packet.

The 1.4, this 1.4 represents the sale of about 12.

I can pass this one around.

The last two pages of the agenda.

I believe when we answered the question, maybe for your chief of staff, it was just short of 240,000 or 235,000 or so that was remaining in the hundred million dollar bond that was not that was unallocated.

Yep, not very much.

Good.

Any other questions?

Okay.

Chair, we recognize uh Councilman Remares.

Uh thank you, Chair.

And uh thank thank you, folks.

Um on this uh single family uh money.

I I presume this will be uh part of the comprehensive uh housing plan that that we will see soon.

It should be because this is part of what we spend our dollars on for affordable housing.

Yes, sir.

I think it will be.

Although uh yes, it it will be.

Let me make clear.

Okay.

And uh although that's a future looking plan, it's still probably will be, or I'll do some kind of separate report on it.

Okay, and and when you say future looking plan, uh not necessarily this fiscal year, but yeah, so I'll I'll answer.

I'll speak to the housing plan just a minute.

Great, thank you.

Great.

All right, thank you.

Thank you.

You want to stay in time.

Yep, yep.

If we can flip to the next page, I believe I'll give a short DR 17 update.

We are winding down.

The light is much brighter.

Oh my gosh, can I this the excitement in my voice?

Um, since the last uh committee update, we are moving closer to close out in a number of areas.

Um I'll stick with the middle section here, our hope, which is our homeowner assistance program, small rental program, and economic development program.

We are now in contract amendment number five, but we are actually in close out where the finance team is preparing some of the final financial close out documents for the Texas General Land Office, and then we will um have those closeouts completed with the remaining close the remaining programs to close out will be multifamily buyout admin and then our home buyer assistance 2.0.

And if we flip to the last slide or the next slide, what I'd like to point out here is just how well our home buyer assistance 2.0 program is doing, which is right in the middle of the slide.

All of the other numbers you can see have remained relatively flat.

This is um just a quick snapshot of all of the programs and submittals and uh some of the refunds that we have done.

But you can see that the team, Cedric's team along with finance, have submitted just over $4.6 million in reimbursements for our home buyer 2.0 program.

We did meet our benchmark for December 31st, which was um I believe 2.6 or 2.8 million.

I I don't recall right off the top of my head.

But we are actively working towards the next benchmark for June 2020, June 30th, 2026.

Um, but that program is uh rolling and and moving.

And that concludes my presentation.

Any questions?

Very good.

Thank you.

Any other questions?

Okay.

TJ, as you sit down, one of the things I was as I was thinking big picture.

Um this is the funding on DR 17.

Um like to bring back the committee is about when did we get our first dollar on that?

January of 2019 is when we signed the grant agreement.

So even though the storm happened in August uh 2017, we did not receive our grant agreement and authorization to spend funds really until uh almost two years later.

Yeah.

And uh it's seven seven years later plus.

And uh we're still yeah, we're still spending.

I think when we get ready to show you our reports going forward on DR 24, you'll see we've made a lot of progress in moving things along more quickly.

I know there's a lot of frustration with other departments about where's the money, um, but it's much faster than we've ever had.

So with all that, I think we have learned a great deal, and you'll see that in our timetables on DR24 going forward.

Yep, and as the contractors have just been selected, I believe council action was just completed on the DR21 contractors.

You'll start seeing as part of the um DR updates, you'll start seeing a DR update on DR21, just as we have seen the updates on DR 17.

So this way this committee can see the progress that DR21 is making, and when DR24 does get up and moving, you'll also see an update on DR24 as well.

All right.

Thank you.

Thank you.

Thank you so much.

Director comments, I'll I'll just start before we go through some slides to discuss the housing strategy plan that's underway this week.

The consultant at HRNA will be in town meeting with a number of people and stakeholders.

We saw the first chapter of what they were doing, and they have a some work to do because as I said, we just don't we don't want a plan that's going on the shelf.

We want a plan that gives us a strategy for both the city and the county, for the housing authorities, plural city and county, um, for the housing finance corporation, city and county, um, about how we can move forward with more affordable housing.

We recognize the need for it.

We recognize the concerns as the federal funds have keep changing on the availability.

Yeah.

But it doesn't matter.

We're gonna we recognize the need going forward.

Uh we we think this plan is going to be, in fact, we know it will be meaningful, and again, we will look and see how we can make these dollars really better.

Um the Deputy Director Sellers and I spoke about even this morning is begin doing a better analysis on square footage cost, and to say even with inflation, we just need to find a way to get square footage cost down.

We need some creativity to get there.

Um we need to make sure we do have a great partner in the housing authority to make sure they are using every opportunity and dollar that they have to have greater affordable housing, a greater number of affordable housing.

So again, looking forward to that plan, and my guess is housing plans like homelessness plans.

If you can get collaboration between the city and county and the various authorities, it makes a big difference and really can push that envelope forward.

Um again, I'm I'm not the greatest planner.

I'm a I'm a more of an action-oriented person, um, but I think it's very important for us to have a plan going forward for the next five and ten years.

Well, Brother Rector, let me let me just say that um we really appreciate the work and uh certainly we know we have still places to go in direction of housing, but certainly it represents the fact the city is moving in a better direction uh for our affordable housing projects.

Happy to go through some slides if you have time.

Sure.

Next page, please.

Um next few slides is just some of the openings this last few months.

Uh we had an opening of the Leo Daniels Tower most recently on Harrell Street.

It's a beautiful facility.

And we're glad to have the chairwoman there to speak before us.

Next slide.

Um Search Homelessness Services opened their new building after their building was taken by the highway project.

Uh again, great county city collaboration.

Um, and it's a beautiful building, and we'll will make a difference to those who serve the homeless.

Um, and and will be a place that they feel comfortable growing, and it's a plus plus for the area.

It's on P Street and plus for the for search.

Great organization, uh raises a huge amount of private money also.

Richmond Senior Villages was opened on on Richmond Avenue.

It's a new $35 million affordable community for seniors.

Again, the city invested $15 million of its DR 17 money.

It's a long time coming as far as that money, but these are pluses that you'll see uh going forward for affordable housing and for really quality affordable housing.

Uh next slide.

This is a single family community, Brentwood Found Community Foundation.

Uh, this is a uh 13,000 landmark in District K.

Uh again, these are homes that anyone would love to live in, and uh we think that's a substantial community going forward.

Next uh next slide.

Um meeting with the community is something that we do.

We're very serious about the community development part of our mission.

Um we had a great fall session.

Uh thank you for Deputy Sellers who was able to take that when I wasn't there.

And again, we had council support and great input, and it does have a significant impact on our community plans and our national plans.

Next slide.

We have our spring uh meeting coming up in A-leaf uh in District F on March 31st at 6 p.m.

Um and uh again hopefully we'll have people there just put it on your calendar.

Just put it on your calendar.

We'd love to see as many of the leadership team as there as possible.

Our team, and I know we have some people here to work on that, are very it's very important we get community members out there, especially new members who haven't been to a meeting like this before.

It's educational, but it's also impactful to us.

Next slide.

Uh we have a community survey online that's going out right now.

I'm sure it was sent to all of your staff to send out to folks.

There is a QR code on here.

Um we do need input, and we look forward to doing that again.

Federal government may require this, but in the end, we want that input.

Uh community lunch and learns go to many, not many nonprofits.

Uh January 14th, we went to uh had a significant meeting.

We thought it was very well attended in our building called Partnering for Recovery, and had a number of people who were in interest nonprofits and individuals who are interested in our recovery programs.

Next slide.

Um next slide.

All right.

Uh HCD spotlight, um, our home buyer assistance program 2.0 that was coming out of the uh some of the remainder money of DR 17.

I think that's yes, is um is the down payment assistance program.

This was a few this was really in a beautiful program.

Again, just to give it a little uh give it a little bit of personal part.

Our team was out with a young mom who had her first new house, and uh you could there were a lot of tears, and this was she said when she made a presentation that uh it's life-changing for her and her family.

Wow.

Next slide.

Update on HBAP 2.0.

Um the total in tag intake was 605.

Um there's 266 people in the acting in the pipeline, 54 are closed.

Again, pressure is under our team to get this done, but make sure it's done well.

Yeah, 166 uh uh awards were approved by GLO because it's DR17 money, totaling 4.8 million dollars.

On the DR21 money, which is uh coming forward now.

We have the um uh contractors approved.

We had 307 applications, 17 approvals, and again we've had a number of ineligibles because the rules are very strict, but we're again moving forward and hope to have those dollars spent.

Uh that is a 40 million dollar program.

Next slide.

Um on the home buyer census program again.

It's very important we work with applicants.

We had a applicant workshop on February 11th.

Um, very well attended.

It was virtually, and then we've had on February 18th, we have upcoming a realtor and lender workshop again to make sure they are well educated on this.

A lot of our work comes from our realtors and lenders in making sure it's not just a small group of people but a large group of people who know a great deal about how this program works so we can have enough qualified applicants.

Next slide.

One of the pro one of the programs we're most proud of is the Road to Honey Home Ownership 360.

Um, this is the first uh section one is credit 101.

Uh buyers who have not owned homes need to be part of this.

It's a terrific educational program.

I'm very impressed with the staff as they do this in a way that's both respectful and make sure people understand what it takes to get eligible for one of these programs.

The next slide.

Again, this is a picture of the crowd program uh with councilwoman Thomas and a key exchange on a home repair program.

Um a lot of excitement there, and the homeowners it's a it's a significant issue for them.

Next slide.

I like it.

I'm sorry there are a lot of slides, but I like it that it shows you a lot is going on.

Um another uh the another one of the 2021 winter storm URI.

Make sure that information is available.

We've done a lot to simplify that progress process easier than it's been in the past, and we're trying to get people to sign up and work with us again.

If you know folks, use this QR code, and let's get more people even signing up to see if they're eligible.

Have that been have there been numerous ones applied for the Storm Ure.

Yes.

Yes, sir.

Okay.

All right.

Next slide.

Multifamily, uh, the Rushmore, if you remember that was out a year ago or so.

Um some controversy there, but it's going up at 68 percent complete, total of 101 units, again 60 percent.

I mean, 85 units at 30 to 60 percent AMI, total cost of 32 million.

We invested 3 million in home funds, and uh we expect it to open up November of 2026.

Uh this is a major project uh um in District G.

It's taken a long time.

I know uh Councilwoman Huffman was saying this has been an issue for a long time.

She's gonna be very proud of this project.

Next slide.

Um This is Boulevard 61 at 6,000 Richmond in District J, 84 percent complete 100 units.

90 of them, 90 percent of them are restricted for low income.

Again, $4 million of home funds was used.

Uh when I look at other cities and I see what we do, what we've really tried to make sure is our money is that wedge between getting a project done and not.

And we make sure the developers have skin in the game.

Um the loans work, but again, we can get a lot more done with fewer dollars.

And it's very impressive what we do.

Next slide.

No, the new hope housing project called Avenue C, 93 percent completed, 120 units, all 120 are restricted.

Uh we have $3 million of uh of uh H C D funding.

Um again, New Hope is our developer, a great program.

Uh we were there when the project began, uh, and it's excited that we're uh by springtime, by April, we'll have up and running, and this is a terrific project and will be typical of New Hope quality.

Um and something that makes the neighborhood proud and give the residents something exciting to place to live.

And last, you know, again, talk to your constituents.

We want to be folks to be connected.

We want them to be informed.

Uh this means developers, realtors, people who are interested in affordable housing.

Um I wish we could solve this overnight, but as you see, this is incremental work that's making a significant difference as we move funds into our city.

I think when you look when we look at back over the mayor's two-year tenure and see the number of units uh that were completed, the number in process, I think you'll be very impressed uh with the last two years of meant very good.

Thank you.

Thank you, Brother Director.

Certainly uh any questions?

Yes, uh Mail Pro Tim is in the queue.

I don't know why it's not showing up.

Is that showing up?

Uh I just wanted to ask first, that's my favorite part of the committee meeting is to actually um see the pictures and see the work uh that we've voted on and that we can actually see the kind of fruits of our labor.

I hope that the next committee meeting will have a uh two-year overview.

I wanted the mayor to see it first and see what he's done because it's it's it is significant.

Yeah.

Um my question, though, was on the spring 2026 community meeting.

We've got to save the date.

Uh, what what can we expect in that community meeting?

When we put this in our our newsletter, we want to give some specifics around what we're going to cover in that community meeting.

I'm on the ask Derek to stand up and answer that because as I said, he was at the previous meeting.

I I happen to miss it, and we try to make every meeting different and learn from what we learned from the previous meeting.

Sure.

So uh as part of our annual action plan process, we do four community meetings, two in the fall and two in the spring.

We use the ones in the fall to get an idea of what uh Houstonians want to see out of these funds and how to use them.

And then we come back to them in the spring and present to them a draft of our budgets for our entitlement grants that we will be submitting to HUD for our FY27.

Uh so we walk through and inform them what the grants are, what these budgets uh will be and the activities included within them.

We usually ask for feedback and public comment related to them and help them to kind of understand how we've been implementing some of these programs along the way.

Thank you very much.

We recognize Councilman Malcorn.

Thank you.

Uh Mike, when you you had the picture up with the home buyer assistance program with the 125,000 dollar check.

That's that's big check.

I mean, uh back in my day, they were like they would give them like 30,000 or something.

What's the rank?

What's the range of the thing?

Yeah, the question between the range of um of amounts and what what are the prices of the houses and they have to keep them five years or thank you for answering the asking the question.

Thank you, Cedric.

So um it's up to the 125,000.

So it depends on 125,000.

Up to court it depends on income and all that.

Yeah, based on their income and based on the home that they choose.

Um we are closing the gap and making sure that they're only using a third of their income for housing needs, and that's where it ranges from, you know, fifty thousand dollars receive a five-year uh lien, uh up to 75,000 receive an eight-year lien, and up to one hundred and twenty-five thousand receive a tenure lien.

Okay, so so she has to stay there ten years.

Okay.

Correct.

To get that forgivable and all that.

Yeah, so she it so this is our just standard check that we uh utilize, but it says up to.

Uh I don't know the exact amount that she actually receives.

Oh, yeah, I see the small print up to.

So what's your target um AMI for this program?

So the target AMI is up to 120.

So the funds are designed out of the uh 18 million.

You have 70 percent of the dollars are being used for 80 percent below, and then you have 30 percent of the dollars used up to 120 percent AMI.

Okay.

Thank you.

You're welcome.

Again, those numbers are large, and we went through that as we increase the maximum amount uh because and because of the cost of the housing, which has gone up tremendously over the years, uh, because of the issues around so much of it being an 80 percent and below dollars, it's really required that again, as you saw the numbers, it uh you have to have a lot of applications to have a few acceptances, and everybody has to come in with that you know, mortgage already set up before they go through this process.

So it's not an easy process.

Um, and sometimes it is a needle in the haystack finding that individual who has the right credit, the right income, right, uh the right situation, but it's a it's a solid program that has made a difference in some people's lives.

It's you know, we do you wish we could do it many, many more?

Absolutely.

Yeah.

And and one question I didn't ask earlier when we were talking about public facilities, uh and I've asked it before, but wondering if you'll you will ever consider using some of the public facilities funds for sidewalks in certain neighborhoods.

I understand that it qualifies, but it hasn't really been the practice of the department.

But I'd I'd sure like to see some of that money for some improving some sidewalks.

I will come back.

I'll come to the spring meeting and let you know or fall meeting.

Oh, I'll I'll come back.

I'm sure that's the there's a huge issue there.

I was laughing about my my my own son-in-law was in town.

He says, Sure, sure in a nice neighborhood terrible sidewalks.

Um you're right.

And that and that is when we talk about a walkable city, that's an important walkable city.

Um thank you.

And I I actually did not know that it could be used for sidewalks, but I will Yeah, I think we've asked, and it is an eligible um, it is an allowable use of it, but there's usually other huge buildings that need help, and and it just it's not been prioritized, but just put it out there.

Yeah.

Before I get to the councilman, Mike, what is the what is the turnaround for the you know, up to that 125,000?

What is generally the turnaround for a person that applies uh with the application?

What what what is generally 30 the turnaround and approval with everything submitted?

Yeah, so generally it's usually uh eight to ten weeks.

Um you got to remember that the process you have to go to title company for closing.

So that's a process in itself.

Yeah.

So while they are pre-qualified for a mortgage, um, they still have to go out and find a home after we provide them an eligibility letter.

Okay.

Okay.

So right now we have, I think it's uh 104.

Uh tell you the exact number.

We have 116 that are currently looking for homes.

So out of that number, you know, you have you know all ranges of AMI that are there.

So once they find a home, they have to put a contract on that home.

Okay.

And then you know it goes to the closing process.

Okay.

And so of that 116, if uh say some don't meet that, then do they go back and correct?

So of that 116, they all are eligible.

Right.

So they've all been to uh it's it's a two-step process.

So first step is eligibility.

So they meet the criteria to be able to qualify for the funds, meaning that they lived here in 2017 doing Hurricane Harvey, and they have a mortgage.

They have taken a home by education class, um, and then they have their pre-quall uh for mortgage, and then once they are approved, that gives them their letter to go out and search for a home.

Okay.

Very good.

Thank you.

Uh recognize uh councilmember Ramirez in the queue.

Thank you.

Thank you, Chair.

Just just a comment.

Um 125,000 is a lot of money.

Um and might seem to some folks like a windfall for one family, you know, versus uh if we if we use that uh to try to help multifamily units, you know.

Could could we uh could we help more people?

But you know, we can we can save that that debate for another another time.

But I was gonna ask Director Um the comprehensive housing plan.

First of all, thank you for providing the opportunity.

Let me ask you this.

Remember HBAP 2.0 is from DR 17?

Correct.

And so that's part of that is that side DR 17.

DR 21.

We have no home bar assistance.

Do we have to there is no this isn't there?

No, that's all home.

And DR24 this night.

It's all home repair.

Okay.

Thank you.

Um comprehensive housing plan.

Thank thank you for uh providing the opportunity for for me to meet with the team working on that plan a few months ago.

Uh I know I know I think there's been uh community input on that as well.

Can you just speak to what the community input will be going going forward before a final plan is adopted?

Apologize.

I mean Conley, who is overseeing that is not here.

Um there will be community input.

I know HRA are back in town this week.

I'm meeting with them several times.

Some other folks are with community leaders.

Um I do not know if there's a community meeting set up yet.

I'll find that I can get back to you, Councilman.

I think that would certainly be a good idea.

Thank you.

Thank you.

Thank you.

So we have uh yeah, just one quick question about the um or actually a statement about the community input on page 28, the survey that y'all are putting out to the public.

I did the survey um when it was sent to us, and it actually auto-ranks your choice after you click it.

And I I talked with Amy and I think y'all changed it, but by that point you all had received about a couple of hundred responses.

So um the uh all of those responses would be um not representative uh of what the people actually rank, but uh just wanted to put that on your radar.

I think it's been changed, I think it's been changed, but you know, y'all had still received some of the responses.

Thank you.

I will I will come back to you on that too.

Okay, any other questions.

So they are none.

So we have one person that have uh registered for public comments.

This Ms.

Tanaha Harring Harrison.

Is she present?

Yes.

She has three minutes.

And pardon me if I didn't pronounce it right.

Your first name.

Yes.

Hi, good morning.

My name is Tanaya Hairston.

Tanae, okay, got it.

Yeah, nice to meet you.

Um I'm a real estate developer and fund manager focused on workforce and attainable housing here in Houston.

We structure white label projects using private capital, and we would welcome the opportunity to align with the housing and community development regarding land and partnership opportunities.

That's what I wanted to say.

Oh, okay.

Very good.

Thank you for coming.

Thank you.

Sure.

All right.

All right.

So there are no others who want to speak.

So we are before we adjourn, I want to remind you that everyone that the housing and affordable committee will have its next meeting March uh 17th at 10 a.m.

Uh the district F office, our chair will send out information uh for the upcoming meeting.

And so we want to thank everyone for being here today.

If there are any other comments, there are no other comments.

Thank you so much.

We are adjourned.

Thank y'all.