Pampa City Commissioners approve Housing Tax Credit Community to be built in Pampa

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The Pampa City Commissioners met over Zoom on Monday evening for a regularly-scheduled meeting. Commissioner Karen McLain was absent for the meeting.

Among the items passed by the Commissioners was a resolution to support a proposed Housing Tax Credit Community known as Summer Village to be built and located at the northwest corner of North Sumner Street and West Somerville.

City Manager Shane Stokes said this is a similar process as the City did with the Harvest Park Apartments a few years ago. 

Stokes introduced Ryan Garcia of JES Holdings, who also introduced Michael Ash of the same company.

“We are presenting on a proposed development,” Garcia said. “We are looking at a 36-unit senior housing community in Pampa.”

JES Holdings is a real-estate company based in Dallas who develops and invest in housing in Texas and the Southeast/Midwest regions. 

They also build, manage invest in the properties, as well as handle the tax syndication.

“We are involved in this at all levels,” Garcia said. “We will not just come in and set it up and try to sell it off in a year or two. We are here for a minimum of 20 years and most of the time even longer than that.”

Garcia showed some of their other properties across Texas in Bastrop, Salado and Crandell.

The property will be set up in the northwest corner of Somerville and Sumner and will feature six residential six-plexes with one or two-unit buildings. 

“This will be an age-restricted community with all tenants being 55-plus,” Garcia said. “There will be 104 parking spaces. Some of the amenities in the community will be the leasing office, mailboxes, library, a community kitchen, fitness area and computer lab. Overall it’s not going to be a dense development, about eight-and-a-half units an acre.”

The program will be financed with the nine percent housing tax credit. 

“Every year the State of Texas has an allocation of tax credits they will distribute across the 13 regions,” Garcia said. “We are hopeful we will be successful in our full application. In tax credit properties, the sale of the tax credit is to help with the construction of the development. It’s not to subsidize the tenants’ rents.”

The tenants will still pay a lower rate in rent, based on their income and the size of their unit. 

Rents will vary between $360 to $600/month for a one-person unit, and $432 to $864/month for two-person units.

“We are going to have 12 one-bedroom units at approximately 750-square-feet and 24 two-bedroom units at 880-square-feet,” Garcia said. “Wide spacious kitchens, big living areas and then one and two bedrooms with single-full bathrooms in each of them. The kitchens will have energy-efficient appliances to help with energy costs for seniors living here. They will have washer/dryers, carpet and vinyl tile flooring.”

Garcia said the positive impact in Pampa will be the addition of the property to the affordable housing stock, addition to tax roll and the $7.7 million investment. They will not be seeking a tax abatement.

JES Holdings hopes to find out if they are awarded the tax credits by July and, if they are, they will start permitting in August and plan to start construction in January 2022. They hope to finish construction by January 2023 and be at 100 percent occupancy by February 2023.

Commissioner Gary Winton said he understands the tax credit system works and said they are good programs.

Mayor Brad Pingel asked if there were any employment requirements for the seniors living in the facility.

Ash clarified that residents are screened for credit quality, income verification, past landlord-tenant history and criminal backgrounds.

“They’ll have to have some source of outside income whether it’s retirement, a job, etc.,” Ash said. 

The housing does not fall under Section 8 rental.

Earlier in the meeting, the Commissioners approved an engagement agreement for bond counsel services between the Pampa Economic Development Corporation and Norton Rose Fulbright US LLP.

“This is in regards to the project discussed in executive session,” Stokes said. “The EDC by-laws require that any professional services regardless of the costs has to be approved by the City Commission. Once the engagement is approved by the City Commission they will get information to Norton Rose Fulbright and move forward.”

The costs of the agreement will depend on how the project goes moving forward.

The Commissioners also approved a resolution approving a net surcharge submitted by the Southwestern Public Service Company. 

Stokes said this item is a rate-case situation that goes back to 2017, which was a wind-farm case.

“Historically when a rate-case goes to the Public Utility Commission it takes six months to a year or longer before the final order is given,” Stokes said. “In the interim, the money is lost by SPS and in the wind farm case we (Axiom, the coalition of about 55 similar-sized communities Pampa belongs to) agreed they could relate back and do a surcharge to capture that lost revenue. That’s what they’ve done here.”

Stokes added the Axiom steering committee, which is made up of almost a dozen cities including Pampa, discussed the options of extending the surcharge time from one year to two years to soften the blow to the customers, but SPS has already filed another rate-case.

“We knew there was a good chance that if we extended this surcharge over two years, we could be facing two surcharges at once,” Stokes said. “It was determined that it was best to bite the bullet and pay for this over one year. It’ll start April 1 and run through March 31, 2022. It’s not insignificant by any means, it’s about a 12 percent increase to an average Xcel customer.”

Mayor Brad Pingel wanted to assure residents that the City of Pampa isn’t the entity behind the surcharge.

“We have delayed this and fought this as long as we could for our consumers,” Pingel said. 

Stokes concurred and said Axiom is one group of several that negotiate rate-cases through SPS.

“It is a matter of the company to make enough revenue to cover their costs and capital,” Stokes said. “But it’s good we have Axiom and the other groups to keep them honest at every turn. But the City of Pampa has nothing to do with the rates except that we negotiate with them at every rate-case.”

Commissioner Gary Winton asked what would happen if the Commissioners voted, “no.” Stokes said it would go back to Axiom, who would vote to intervene, but ultimately there is no stopping the surcharge from coming.

“We could say we want to pay it out over two years instead of one,” Stokes said. “But the facts are there, they’ve got a new rate and they weren’t able to start it for 11-and-a-half months after the date we all agreed they could. So the amount is set.”

The Commissioners also approved the following items:

• Minutes of Jan. 11, 2021 regular commission meeting

• Absence of Commissioner Karen McLain from the Jan. 11, 2021 regular commission meeting

• List of disbursements dated December 2020

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