parkside II

D-Squared, part of the Pinnacle Housing Group, held a public meeting on the Parkside Village site redevelopment on December 8. This is a mandated community input meeting in order to secure tax credits.

Readers of previous columns should be aware of my bias toward affordable housing developers. Sadly, the performance by D-Squared only reinforced my view. However, in the interest of transparency, I will offer both their presented points and my take on what was and was not said. My commentary will be in bold.

The developer will have a pool on site. There will not be a lifeguard but it will have a punch code and fencing so as to restrict its use to residents. This is not atypical for apartment complexes. Someone will need to know about pool maintenance (more on staffing below).

The developer will also have an outdoor fitness area and improve the park area. Well and good.

The developer will have retail facing Colcord. They will rely upon current zoning laws and the ground lease with the city to keep out check-cashing stores, payday loan stores, pawn shops and the like. This is more of a city criticism--current zoning doesn't keep out these parasitic enterprises now. D-Squared also didn't mention how they would recruit retail stores; there seemed to be a Field of Dreams mentality that retail would just magically appear. In this economy, that outcome is not likely. I do applaud that these units will be multi-use with residential above retail.

The developer will not build the single family units until they are needed, i.e. buyers to purchase them. Here is where they got elusive. D Squared will build a 85/15 affordable/market rate rental housing complex to include senior housing. When asked about the single family homes, they kept referring to Waco CDC, Habitat for Humanity and NeighborWorks. D Squared seemed uninterested in this piece and I understand that these other organizations have not officially signed onto this partnership. The single family units are on an adjacent piece of property but will be separate from the D Squared complex and that seems to be how D Squared is looking at it. They won't make money off this aspect and seemed very detached from it.

The developer said that they have a May 1 deadline to submit an application to the Texas Department of Housing and Community Affairs. That state agency will announce funding recipients in late July. If this goes well, D-Squared anticipates an occupied housing complex by early 2014. In response to a question, they also noted that these tax credit, most likely originating with a major bank, would supply 60-70% of the financing for this endeavor. $30 gets you $100. This doesn't need anymore comment than has been supplied in previous posts.

The developer noted that they will have after-school programs. When asked, these programs will not be funded or administered by D-Squared but rather by volunteers. I asked what their annual budget would be for these programs as they said that they would dedicate funding. The answer was $15,000/year. So they promise programs but in reality they won't be doing anything hands on. They will not be on-site (though they will be sitting by the phone--more on this below) and won't staff. What exactly are they bringing to these after-school programs, other than a physical facility? Even that contribution seemed ironic as we met in the Dewey Community Center.

The developer will do background checks on all residential applicants and anyone with previous felony or drug convictions will be rejected. As well, the City and State will conduct annual inspections of the property. The management company will conduct monthly inspections. The equity investor may also do this twice a year. The income qualifications will be set by HUD, which is standard. The development will not accept Section 8 vouchers. D-Squared also puts in 5% of rent into escrow for residents to use in the future as down payment assistance. The 5% down payment piece is a sweetener, though I would like to know how often this has been utilized in previous developments (sounds like a letter I need to write). The background check stuff is standard and legally most renters have their hands tied. I was very disappointed that the inspections of this facility won't change from the standards under the previous Parkside incarnation. The City and State didn't do enough previously; those entities are the watchdogs on this. While residents will start with a new facility, what has changed inspection-wise?

The developer will not manage the property. They will not have a subsidiary manage the property. They will hire an outside group to manage the property. The D-Squared VP who drove down from Dallas, and was late by the way, argued that this arrangement was more favorable to the residents b/c D-Squared could fire the management company if the management company didn't do their job. The same VP, whose name I did not get, said that she would take calls of complaint against the property manager. They do have a particular management company in mind. What is more reassuring: that D-Squared lacks confidence in their management company hiring practicies so that the ability to fire that hired manager is a selling point or that the developer's involvement past construction is limited to its willingness to answer the phone? I'm undecided. This arrangement also provides evidence that profit in affordable housing comes in building it, not managing it. Expect that dynamic to impact management.

The developer noted that the City would own the land and lease the property to D-Squared for two 40 years leases. Our council representative even said that they could fire D-Squared if need be. I would like to see the language in that contract authorizing that. But, again, D-Squared gets it's return after completion of the project. It might prove more beneficial for them to cut ties to the development after it's developed. A way around this would be to include benchmarks over the course of the lease tied to incremental payments/tax credits allotments. That is probably not in the contract however.

I asked the developer about on site security. They won't provide any. They will have a live-in manager and possibly a courtesy officer [This didn't make a lot of sense. The VP said something about giving a law enforcement person a cut rate on an apartment if they too would live on the property and open and close from time to time. I can't see a police officer or sheriff doing this though.]. They could have up to 30 cameras on the property viewable on the web and with recording ongoing. The development will be part of the Crime Free Multi Housing Program city program. I ask again, how does this markedly improve on what was there before? The cameras could help but they are passive deterrents. No one will officially watch the cameras, only look at them after the fact. Will those cameras be maintained? The CFMHP is compulsory for new apartment complexes.

The developer will supply washers and dryers and use high end materials [we hit upon a "ceramic tile" chorus at one point]. Well and good. Will they also enter into a binding agreement to establish an independent tenants association with the ability to take D-Squared to court should it (or its hired management company) fail to abide in upkeep, security or other fiduciary responsibilities of the renting agency?

D-Squared is a private company and will not release its financial statement to the public; I asked this one. They did let the City look over this but then the company retrieved the data. Our Council rep remained silent during this portion of Q & A. I'm not sure this temporary glance would be legal in NJ. If a document is submitted to a public entity, particularly as public money is to be used, that document should become public. Perhaps not in Texas. However, other than the assurances of our public officials, assurances that did not come last Thursday by the way, how do we know the company is viable. The previous developer/owner of Parkside seemed flush with cash initially but was crying poor later as building were no longer maintained and families had to heat their apartments with gas ovens. I would like something in writing, but maybe that's a me problem.

I was probably in the minority with my disapproval. Most questions concerned aesthetics. There was some levity, at least as I heard it. I have pulled a quote below from a Trib article that was loudly repeated by our council representative. Her nomenclature aside, my fears of Parkside Village II, by any other name, have increased, not lessened.

“We need something that doesn’t say Park, side or village,” said Councilwoman Toni Herbert, who represents the North Waco neighborhood around Parkside. “We need a clean break. So many people are afraid of seeing Parkside Village II."--Waco Tribune, October 19, 2011.