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2022 01 27 WS MinutesMINUTES OF THE REGULAR WORK SESSION OF THE CITY COUNCIL OF THE CITY OF BAYTOWN January 27, 2022 The City Council of the City of Baytown, Texas, met in a Regular Work Session on Thursday, January 27, 2022, at 6:30 P.M. in the Hullum Conference Room of the Baytown City Hall, 2401 Market Street, Baytown, Texas with the following in attendance: Laura Alvarado Council Member Chris Presley Mayor Pro Tern Charles Johnson Council Member Heather Betancourth Council Member Jacob Powell Council Member Mike Lester Council Member Brandon Capetillo Mayor Rick Davis City Manager Trevor Fanning Interim City Attorney Angela Jackson City Clerk Mayor Capetillo convened the January 27, 2022, City Council Regular Work Session with a quorum present at 5:31 P.M., all members were present. 1. DISCUSSIONS a. Discuss the rehabilitation of approximately 250 affordable rental housing units located at 6033 Garth Road, Baytown, Texas, which is also known as Rosemont at Baytown Apartments. Assistant Director of Planning & Development Services Christopher Chavis introduced Executive Director Jonathan Campbell from Southeast Housing and Finance Corporation (SETH). Mr. Chavis relayed SETH was hoping to rehab the existing Rosemont apartment complex, which may be in order to seek low-income tax credits in the near future and for which Council would have to approve a resolution. However, at this time, Council will only receive SETH's presentation and provide feedback. Mr. Campbell introduced SETH as a regional housing finance corporation of which Baytown is an original incorporating member. SETH's Baytown Council -nominated board member was Manuel Escontrias. Mr. Campbell further explained SETH was a unit of government (a subdivision of the state) that served Baytown as well as nineteen other jurisdictions. Additionally, Mr. Campbell introduced the Texas Department of Housing Community (TDHC) as the state agency they interacted with the tax credit program. Urban areas received approximately 98% of the tax credits allocated in Region 6. Mr. Campbell relayed SETH was coming before Council that day for the 4% noncompetitive program. He noted that the tax credits are not as valuable to the investors and so the threshold for local support is less than what you would expect City Council Regular Work Session Minutes January 27, 2022 Page 2 of 4 from the 9% program. The 9% program jurisdictional support is a full resolution of support from the City Council and the state rep and projects directly, but for a 4%, it is just a resolution of no objection. Mr. Campbell continued to discuss area median income and their current portfolio. Baytown was considered to be part of the Houston Fair Market Rent area and according to the Department of Housing and Urban Development (HUD), Baytown's area median income was $79,200. SETH's projects consisted both of bonds and affiliated partnerships. In SETH's forty -year history, they had issued under a billion in bonds, which provided 14,000 units of affordable and workforce housing. SETH's current portfolio were eight multifamily developments that Mr. Campbell projected would be doubling in the next two years. He noted that SETH also participated in joint venture partnerships that insured properties with a property tax exemption. Their current portfolio consisted of six multifamily developments under those affiliated partnerships. Mr. Campbell indicated that SETH turned their profits from their participation in those programs to down payments and closing cost assistance for first -tune homebuyers across the state. SETH had six single-family programs they had administered since 2012 and ran those programs through mortgage companies. He continued to discuss their programs in further detail. The point being that SETH can take multifamily properties off the tax rolls, but what they were able to do is turn around and leverage that for far greater impact with single-family and every single one of those single- family homes is paying taxes. Moreover, Mr. Campbell informed the Council of the charity and advocacy ventures SETH undertook. In regards to the specifics of the project described in Agenda Item La., Mr. Campbell noted he was not prepared as that was the developer's job, but he was there only to discuss financing, and suggested having the developer at their next City Council Meeting on March I Ot" so the developer could do a deeper dive in to the specifics of the project. Mayor Capetillo requested to be reminded of what the Rosemont project would entail and asked if it would be to update the facility and Mr. Campbell answered yes. SETH was going to be investing in about 30,000 units in existing affordable housing and so they are effectively renewing the bonds and renewing investment in the 35,000 units. Council Member Johnson noted that back in 2017- 201 S, Council had approved renovations for two apartment complexes under a similar program, one of which was in his district, The Village. Mayor Pro Tem Presley inquired on the income restrictions as he was aware of the fifteen -year period for the tax credit projects and that those fifteen years were up so outside of those housing tax credits, he asked what would be the other options Mr. Campbell relayed the options were very limited. He offered they could take deeper affordability cuts, but to increase and go above the existing income restrictions would be extraordinarily difficult. Mr. Campbell also noted Mayor Pro Tem Presley was correct about the fifteen -year compliance; however, there would be a second fifteen -year compliance period. When the first compliance period expired, it would be open for recapitalization where additional tax credits could be layered in locking all partners together for the fifteen years. Mayor Pro Tem Presley further questioned whether there would be an option for a first right of refusal and Mr. Campbell replied yes, if a nonprofit could provide financing to purchase. Though, Mr. Campbell commented it was extraordinarily difficult for nonprofits to do that. City Council Regular Work Session Minutes January 27, 2022 Page 3 of 4 b. Discuss any or all of the agenda items on the City Council Regular Meeting Agenda for January 27, 2022, which is attached below. City Manager Rick Davis requested to touch on the land use issues Council would have for the meeting that night. Regarding such issues, Planning & Development Director Martin Scribner relayed they would have two rezones and an annexation. The annexation being 34.45 at the northwest intersection of Interstate 10 and John Martin Road that would be rezoned from Open Space/Recreation (OR) to General Commercial (GC). The 57 acres at Hunt Road and North Main Street would also be rezoned from Single -Family Estate (SFE) to a Mixed Residential at Low to Medium Densities (SF2). Mr. Scribner noted they did not have any major comments for nor against any of those. Mr. Scribner additionally touched on the Planned Unit Development (PUD) for the 13.51 acres east of San Jacinto Boulevard and South of Santavy Road. Staff had recommended approval, yet the Planning and Zoning Commission ("P&Z") had concerns over parking, maintenance, and architectural quality. Assistant City Manager Kevin Troller noted the project had 126 more parking spaces than needed and did not understand why parking was such an issue at the P&Z meeting. Mr. Scribner stated the developers did not have the infonnation P&Z members were looking for until after their meeting, and the developer would be providing that infonnation at the Council Meeting that night for clarity. In regards to the PUD, Mr. Scribner relayed they tried to get a better project by requesting back higher quality. He also mentioned the parking requirements. The project had 46 spaces over what was normal for a multifamily. With that, Mr. Scribner reiterated that staff recommended approval. However, the recommendation to Council from P&Z was a denial. Mr. Davis brought awareness to, in between the public hearing and the creation of the PUD, there would be a discussion about detention. Interim City Attorney Trevor Fanning explained there was a detention agreement where the city's property for water retention would be fixed up by the developers. The developer would put a trail around the detention along with vegetation. Furthermore, Mr. Fanning relayed there would be two conveyances: 1) underneath West Archer, Baytown would be selling to the developers for their access; and 2) there was a conveyance from the developer to Baytown where their detention would be widened. Mayor Pro Tern Presley had a question over sequencing and asked why they would take action on the conveyance of property and detention before the PUD itself. Mr. Fanning answered they should all be done together to which he had brought it to Mr. Scribner's attention; however, Mr. Scribner did note Mr. Fanning and Mayor Pro Tern Presley made a good point since the conveyances would not be needed unless the PUD is approved. At the same time, if the conveyances were not approved, then the PUD would have to change. In regards to the rezoning of the acres on John Martin, Council Member Johnson inquired if they knew what they had planned. Mr. Scribner stated the whole area would be zoned to a General Commercial. They had not shown any kind of detail or concept plan so for now, it would be speculative. City Council Regular Work Session Minutes January 27, 2022 Page 4 of 4 Mayor Capetillo queried if Council had anything else to discuss. Council Member Alvarado discussed Agenda Item 2.b., It's Time Texas, and relayed that she and Mayor Capetillo had been working on the It's Time Texas Challenge. She noted Baytown was currently in second place as far as the healthiest community, and they were going to get additional points due to the Mayor making a video. Council Member Alvarado conveyed that Council would have a speaker for this item and their City Council pledge located at their place at the dais would need to be signed. They would then take a photo, which would be uploaded for additional points. She thanked the Mayor for doing the resolution and she believed they would get a total of 5,000 points for all their efforts. Mayor Pro Tem Presley wanted to discuss Agenda Item 8.h., the investment policy. He was curious about the amendment and asked if it would be the same thing that was proposed before about adding an investment officer. Council Member Betancourth responded that was the change and it was the same proposal that was tabled and came back to Council. Council Member Betancourth relayed that the Finance Committee did not recommend any changes beyond what the Director of Finance Victor Brownlees had already recommended. Council Member Lester communicated what he heard was that there were proposed changes the Finance Committee did not have a chance to discuss so Council tabled it until the Finance Committee had a chance to overlook it and now that they had, it was going back to Council for consideration. Council Member Betancourth agreed and reiterated it was the original staff recommendation. Council Member Lester requested they rehashed the matter as it had been a while and had forgotten about it. Mr. Brownlees explained further that there were some adjustments to the policy to bring it into the line of changes to secure and also clarify allegations of authority and Council Member Betancourth stated they rehashed the investment officer portion. Mr. Brownlees replied the City's Charter made it clear the Director of Finance is the Treasurer and there was a lack of clarity in the previous policy about where that responsibility laid. The changes brought the investment policy further in to line with the City Charter. Mayor Pro Tern Presley supposed they were no longer naming the Controller as the second investment officer and presumed then the Director of Finance could appoint whoever for this role at his discretion and Mr. Brownlees clarified it would be whoever was qualified. 2. ADJOURN With there being no further business to discuss, Mayor Capetillo adjourned the January 27, 2022, City Council Regular Work Session at 6:04 P.M. Angela JMkson; City of Baytown