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ROWLETT RAMBLINGS

New thought

1/26/2017

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I've been thinking about something for a long time.  I have been thinking Rowlett could be a resort site or desirable retirement area for our northern neighbors.  Sound farfetched?  Not really.

I have been thinking about this for several years.  

When I was traveling all over the northern Mid-West and the Atlantic coast looking at real estate development, I learned something.   When most of we southern domiciled people think of retirement and resort settlements, we  think of sand, palm trees, water to look at, drinks with umbrellas in them, and very warm weather. 

Some of our northern senior citizens think a little differently.  They often think of moving a little closer to the kids, warmer than 15 degrees below zero in January, throwing away their snow blower, and settle for a few days during Winter where they can get outside and enjoy golf, boating, and visiting with friends wearing only  a light jacket.  Few know  it, but in the upper Mid-west and the Northeast Atlantic states, the people may go three months and never see the sun. 

I used to travel from Philadelphia to Manahauken, N.J. by car once a month.  I drove over an area an area called the "Pine Barrens."   We generally think of New Jersey as wall to wall asphalt.  It isn't.  There are some fine looking farms in South Jersey and the wilderness area of "Pine Barrens."  Atlantic City sits southeast of the Pine Barrens.  

I made this trip for years, once a month.  One time, I was sleepily driving along the road, when I noticed dirt moving equipment in the Pine Barrens.  I wondered what on earth they were getting ready to do out in the middle of nowhere.  Of course, I didn't learn anything on that trip.  Subsequent trips proved the activity out to be a real estate development.......out in the middle of nowhere.  I had to find out.  I started asking questions.  What I learned was that it was to be a retirement village.  That flew in the face of everything I had been taught.  All this time, I  thought it was in the middle of nowhere.  It wasn't.  It was in the middle of a fine pine forest with lots of wildlife, including bear.  It was close to excellent bass fishing.  Forty miles away was the Atlantic Ocean with plenty of sport fishing.  And, 40 miles the other way was Philadelphia, where their kids lived and worked.  The people who bought there were from Maine, Massachusetts, Pennsylvania. and New York.   The winter weather was slightly better, the kids were closer, and it was fun to live in the woods.    The last time I made this trip, there were several subdivisions, all catering to the same market.  I learned of a brand new market.  Who would have ever thought of several retirement villages in the middle of New Jersey?  I certainly hadn't.  Hell, I was from Texas. 

Then, 42 years ago, I moved to Rowlett from East Texas.  Rowlett was a burg.  There were 1500 people, probably counting dogs and cats.   The lake was here and had been for a couple of years, but it really wasn't used very much.  For that matter, it still isn't.  About 20-30 years ago, Rowlett began to grow in material amounts.   It began to become a real town.  With 27 miles of shoreline, I began to think in terms of a good area for a retirement village.  Nothing happened.   Then we grew some more.  We began to be a legitimate suburb of Dallas.  Still, nothing happened on our lakefronts.   For all practical matters, we really had no lake, or we weren't developing a valuable asset.  We stared at it for 40 years.  It seemed like no one had any imagination, or didn't have any money.

Then four things happened:
1.  A toll road came right thru town. 
2.  We got a DART terminal station.
3.  The Texas economy took off like  a shot.
4.  Bayside was born.

Dallas was (and is) growing by leaps and bounds.  The "spill over" from Dallas was creating demand for homes and businesses in Rowlett.  Rowlett's hospital and medical offices were growing by extraordinary amounts. 

Now, lets look at Rowlett again. 

The Dallas market is hiring people as fast as they can get out of school.....from all over the country.  New hires are moving to Dallas/Ft. Worth in huge amounts and leaving their families behind, as many of us have done.  Bayside is going to provide some pretty snazzy homes, and places to live.  The lakefront will definitely change around Bayside, including sandy beaches and clear water.  There still are 23,000 acres of lake surrounding Bayview.  You can get to anywhere in the metroplex via Interstate 30, DART, or the toll road.  If you approach Rowlett from the south on the toll road, it looks like you're driving over the Intercoastal Waterway to an off shore island.  Everything you see is undeveloped Rowlett. 

So, maybe Rowlett isn't setting on the Gulf coast down near Port O'Conner, but it's got some good "stand ins."  The kids are close by working in Dallas/Ft Worth. Medical care facilities are  superb, and growing.  Bayview will speak for itself, and its a lot warmer here than Kansas City.   As a resort site, Rowlett's market isn't residents of Dallas./Ft. Worth.  Rowlett's market is St. Louis, Chicago, Kansas City, Omaha, and Wichita, Kansas. 

Did I say it's close to where the kids work?

I, for one, would like to live in a resort area.  I prefer Lake Ray Hubbard over the Pine Barrens of New Jersey.

It's called branding.  We need to get off our unimaginative butts and go get it. 

If you doubt any of the above, take an afternoon and drive down to Granbury.  They were the same size as Rowlett, and all they had was a lake coursing through it.  Go look at their lakefront, now.  You'll want to throw rocks at our lakefront development.

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The Poll

1/22/2017

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Some poll numbers are beginning to come in.   Normally, anyone can "click" on a poll like this and see the results for themselves.  However, in this poll, I  am going to have to keep count and report later.  That is because some of the poll is narrative in nature and not a simple "yes or no" answer. 

No one, including me, knows any names or email addresses.  My service provider provides me a copy of each poll taken and I must post the results on my own report.  However, only the responses are sent to me........no other info.

Be sure and click on the  "Submit" button at the bottom of the poll.

Thanks for your interest in Rowlett, our hometown.

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In need of a favor.

1/21/2017

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I am in need of a favor.  I need your opinion.    Bear with me, here. 

I seem to have created somewhat of a storm (you pick type) with a member of City Council.  I can't copy you with a text message, but I can certainly transcribe it. 
Below is a string of texts from 1/20/17 between Tammy Dana-Bashion and myself.  I assure you the transcription is exactly as it appears on my cell phone.  There isn't even a period upside down.  I would like for you to read it, and the past few blog posts to be sure you understand the issue, and then answer the poll below.  I will confess up front that I can get to be a smart ass in a hurry if I detect that someone is being "superior" with me.  If I detect much of that, then buy tickets, because the fight is about to begin. 

Below is the text string:

"This is Tammy.  I am really confused by this whole thing.   . I thought I was making the right decision on how to move forward on an HFC.  In retrospect, the lack of information is really where I should have been focused.  I should have been asking what are the correct steps to form an HFC and how we should get started?  Policy is the starting point for most new programs.  Please don't view my desire to have a policy in place as lack of support for an HFC on my part.  I will read your document that I just now received for the first time.  I am frustrated by lack of relevant information."

(Point of information.....the mayor and city manager had 37 pages of information that I had sent to them on November 6, 2016.  Apparently, it was decided to not share the information with City Council.  Or, they just plain forgot they had it.)   Tammy sent a second text.
  

"After a quick read of your document I feel more informed.  However, I still see a need for policy discussions and decisions written all over your document.  Not necessarily tied to 2020.  But certainly many policy decisions required."

My response to Tammy:
___________
"Name some."
___________
"Terms of Articles of Incorporation, who will be incorporators.  Composition of board of directors' Terms of bylaws.  The entire section entitled "policy considerations".  Insurance decisions.  What subsidiaries to establish and why.  General Parameters of partnership agreements.  How will HFC cash flow?  Staffing requirements and resources require.  Not every I needs to be dotted nor every t crossed but we sure need a lot more discussion on how to move forward."
____________
My reply.
____________
Many of those decisions are not yours to make.  The HFC is divorced from the city.  The city does not manage the HFC.
_____________
"Yes but some are and we certainly need a complete understanding before we move forward."
_____________
"That's why I sent the contact list.  Are you going to inform yourself, or fuss with me via texting?"
_____________
Wow.  Why are you being nasty?  I am not fussing.  Just trying to work through the thought process with you.  I guess I am done with that now."
______________
You're such an angel.
______________

And that concludes the story.  In all fairness to Tammy, the mayor and city manager screwed up.  They should have distributed the information I sent them in plenty of time for the Council to read and understand the material that had been sent to them. Furthermore, there were experts willing to come to City Hall, at no charge, and answer all Council's questions.  All the contact info was in the 37 pages I sent to them.  What a disaster.  No one knew what questions to ask, and certainly no one knew the answers. 

My point:  It doesn't take months of policy discussions to decide if you want to proceed with steps leading to provide a financing vehicle to help Seniors and Workforce populations.  Remember, folks.  This is just a decision to proceed further.  Tammy seems to think she's going to manage the HFC.  She isn't.  It's against the law.  It has been at least hinted that I have a stake in this because I am in the real estate business.  Let me be clear.......I do not have a single solitary "deal" in which an HFC is of any benefit to me.  However, I suspicion that there are many citizens of Rowlett wish that I did.  The real hungry ones are just going to have to wait for policy.

Below is the  "Poll."  I wish you would click on it and vote.  It ain't hard and nobody knows it's you. 
________________________.

     Many months to develop a policy on helping citizens.

Submit
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Stirring the pot.

1/20/2017

1 Comment

 

It seems I have stirred the pot.   Apparently, I have aroused the defenses of some of our leadership.   I am getting some feedback from some Council members that take exception  to some of my comments about HFC's.  

I can escalate this situation.  I might.  I do not like being talked down to or treated like a dumb ass.  If they would like to "have a go," I'm game.  The citizens and readers might enjoy a match up.  Shoot, I might even enjoy it.

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email to Council; a followup.

1/20/2017

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Below is an email I sent to City Council.  The letter is posted in the previous blog post, but I have highlighted parts.  I wanted to emphasize some of what I had written.  All 37 pages of info were sent as an attachment.  Unfortunately, that is too much info to put into this blog, however I am going to see  if I can somehow get the info on to a site that you can  visit, and print if you want.

The Work Session segment about Housing Finance Corporations was practically worthless.  Nobody knew any answers.    However, the persons that had the answers were willing to come to Rowlett and provide those answers.   Instead, we settled for the blind leading the blind.   That seems to happen a lot.  Some of this is my fault for not providing information to the entire City Council.   I screwed up.

Kudos are due for Debby, Bruce, and Robbert for engaging and doing their own research.    They're not grandstanding.  They have the community interest at heart.  .
____________________________________

To: Members of City Council
       January 20, 2017


I made a mistake.  I should have copied all of you  when I sent the email and attachment to others.  At the time I thought I was doing the right thing.  I thought the information contained would be circulated and then some basis for asking intelligent questions would be constructed. 

You all were horribly uninformed during the Work Session of the January 17 Council Meeting.  That meeting was the ideal time to take advantage of an offer, free to the city, to provide intelligent answers to all  your questions.  Two HFC organizations in Austin had agreed to travel to Rowlett to provide answers to your questions.

You need not take my word for anything.  Attached you will find contact information that will lead you to probably any questions you can ask.   I just presumed you would have received it.  I was wrong. 

Any of the contacts listed would be happy to talk to you.  I would suggest you contact either of the two HFC organizations for general questions.  They are a fountain of information.  Just tell them you're a City Council person from Rowlett, Texas.  They know about you.

Much of the 37 page attachment are just sample forms.

Sorry for the screw up.  I thought I was doing the right thing.

Ron









-----Original Message-----
From: ronm145 <ronm145@verizon.net>
To: bfunderburk <bfunderburk@rowlett.com>; tgottel <tgottel@rowlett.com>
Sent: Sun, Nov 6, 2016 9:00 pm
Subject: Housing Finance Corporations--- Preliminary Info



Brian/Todd--

Attached is some preliminary information regarding Housing Finance Corporations.  I think there's 37 pages.  Don't worry.  I'm not going to get into anything remotely resembling 37 pages of information.  However, I think it is information you will need if we proceed further.  I put it in email format so that you can forward to anyone you feel has a need.  Much is simply sample forms.

My visit will be relatively brief.  I want to visit about what I have found around Texas, and what I feel Rowlett needs.  My major thrust is that Rowlett should be looking out after it's own workforce and senior needs, and the Rowlett taxpayers should not have to subsidize it. 

The attached info is part of the material that has been supplied to me by various people "in the business."  I must say, I was most impressed by the people I talked to.  In this email there is all the contact information for any questions that might arise.  The email addresses within are "live," therefore all you have to do is click on. 

I shouldn't keep you long.  Oh, by the way, I will make an early apology for my wearing apparel tomorrow.  I have a 4 hour stress test immediately after leaving your office.   And, on Monday, too.  Yuk!!

Ron







 




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Email to "officialdom"

1/19/2017

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Below is an email I sent to "some" of  Rowlett's "officialdom" on October 23, 2016.  Yet, I sat and observed a meeting whereby the mayor said he didn't know anything about HFC's.  He shouldn't feel bad.  No one else did, either.    And I thought I was communicating with someone.  I should have sent copies to the entire City Council.  I thought the info would be shared.  I was wrong.  My mistake forced some of Council to do their own research.   Some Council members should be saluted for their efforts.
_____________________.


-----Original Message-----
From: ronm145 <ronm145@verizon.net>
To: tgottel <tgottel@rowlett.com>; bfunderburk <bfunderburk@rowlett.com>
Cc: mkurbansade <mkurbansade@rowlett.com>; jgrabenhorst <jgrabenhorst@rowlett.com>
Sent: Sun, Oct 23, 2016 4:00 pm
Subject: Housing Finance Corporations





Todd/Brian--

As leaders of the elected officials and the city staff, I would like to visit with you briefly about Housing Finance Corporations.  As you know, I have been researching salient information about HFCs.    It's my understanding you have had at least exploratory discussions about HFCs.

It's my opinion that we narrowly missed an involvement with the Dallas Housing Authority.  I feel more proposed associations with DHA are "in the works."  I have nothing against the good work they do, however as a citizen of Rowlett, I , and other citizens I have talked to, prefer that Rowlett have more control over our under served markets than Dallas County.  I am aware of the financial risks to the city and political exposures to elected officials.  I feel these concerns are satisfactorily addressed. 

I have been researching other municipalities.  Rowlett is not unique in their under served citizens.  It's nobody's fault.  Everywhere, the Senior and Workforce real estate  markets have been surprisingly and unexpectedly ignored by events favoring upscale real estate development.  These are not "low income" people.  They are policemen, firemen, staff in city offices, small business operators, and retired people on Social Security.  They are the absolutely essential lubrication that make any community work. This adverse condition has been created because of the extraordinary good economic conditions that have spurred the economic explosion for Texas.  Costs of housing have simply outdistanced many citizens ability to pay for suitable housing.  It is incumbent upon city governments to address this problem.   It is not felt that Section 8 and Walker Vouchers are the best way to address the under served market problem.  These programs are more utilized in "low income" markets.  This is not to be confused with workforce markets.

HFCs offer a more diversified, yet more targeted,  alternative to Section 8.  There is no use of subsidies such as Section 8 or Walker Vouchers.  The HFC vehicle is the financing vehicle offered to Lenders and Investors.  Lenders receive tax credits and CRA credits for their willingness to participate in financing the projects.  There are rules, but very acceptable rules.

I have talked to experts in legal, financial, and administration of HFCs.  I can share with you my findings, then provide you the contact information to verify my observations.

Essentially, two markets are addressed:

    1.  Senior housing
    2.  Workforce housing

Four advantages of Rowlett using HFCs in lieu of Dallas Housing Authority:

    1.  More control of who occupies and/or finances housing for selected market
    2.  Near 75%-80% of typical normal tax revenue  with contract with city to offset          tax exempt status.
    3.  No risk to city after HFC organized and running.
    4.  Political ties with HFC severed.  No "blow back" to elected officials.

Four sources of reliable information:

    1.  Jim Shaw, Director, Capital Area Housing Finance Corporation, Austin
    2.  Jeanne Talerico, Executive Director, Texas Association of Local Housing                  Finance Agencies, Austin
    3.  Ryan Bowen, attorney, Chapman and Cutler, Chicago
    4.  Tim Nelson, financial consultant, Hilltop Securities, Austin

I have offers from both Jeanne Talerico and Jim Shaw to travel to Rowlett and make themselves available to questions from City Council.  If the results of our meeting are positive, I would recommend this visit as a next step.

I have discussed briefly my interests in HFC with Jim Grabenhorst and Marc Kubansade.  By copy of this email, I am also inviting them to any meeting. 

If you could see your way clear to try to meet sometime in the coming week, I can then put some of this "stuff" in a file.  It's getting a bit cumbersome........and I've lost my calculator somewhere in there.

I believe it is worthy of your time to review my findings.  Then, you will be given contact information to verify my representations.  

Thanks for your time.

Ron



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City Council Work Session 1/17/17

1/18/2017

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On the above referenced date, I attended the meeting above.  There were two very important topics that I think citizens of Roweltt should take interest.  One is Rowlett 2020, and the other is Housing Finance Corporations (HFC's).  

Rowlett 2020

The first thing one must realize in any kind of zoning and  planning in any city is that nobody cares about it unless there is a market for what's being zoned or planned.  If there is no market for houses, apartments, shopping centers, or 10 story buildings, intense planning and zoning discussions are a waste of time.   It only becomes important when developers want to build something in your city.  Developers want to build something in your city if they think they can make money.  This is a capitalist society.  It's okay to make money.  It's also okay to make a weekly salary.

Builders and developers study markets and decide where they can produce the best profits at acceptable costs.  The key words here is that "builders and developers study markets."  They don't go off willy nilly and build anywhere.  They go where their study says it is a good place to go.

City leaders know this.  They study and say, "Yes, we have a market, and we're going to control it."  They probably have consultants that tell them how the available land should be used.  Consultants study.  Developers study.  Elected officials try to figure out what both of them are doing.  "Officialdom" might be taking the first step toward acknowledging that they don't have any idea what creates various types of markets.  Some admit it.  Some don't like to admit it.      Elected officials should try to learn from ones that do know what's going on.  Some do.   Some don't.

The problem is that most consultants are probably pretty right much of the time, but usually have no experience developing real estate of any kind.  They like to call themselves the "academicians."  The good developers are also pretty right much of the time.  They have a lot of experience getting beat up and losing money, and then at other times, making a lot of money studying and developing markets.  They like to call themselves the "practitioners."

The point of the above commentary was to point out that both sides have smart people, but they have different skills and disciplines.  Easily, both can be right on an issue.  Take trees.  Close spacing under Form Base Codes builds a beautiful canopy over a street after a few years.  However, the developer might point out that such rules might cause a tree to be in the garage drive of many front entry houses.   Sometimes builders try to comply with codes, but create a problem.......say garage drives that make cars stick out in alleys.  Of course, that happened with our form base codes.  So, who wins in a dispute?  The city does.  However, the city has a duty and obligation to it's citizens to make the most correct decision.  To make a poor decision just because of a technicality is not good stewardship of the citizen's money and well being.

My opinion is that there should be some provision to modify Rowlett 2020 and Form Base Codes when there is undeniable evidence that a developer has a good product that is needed by the community and can achieve everything the elected officials want.  The location of the product is important to the point it doesn't hurt anything.  Otherwise, it's unimportant.  Houston seems to have done quite well without any zoning at all. 

The mayor wants to reserve North Shore for "employment opportunities."  If jobs form up on Lakeview Pky and Bayview, but not at North Shore, leave it alone.  If North Shore isn't meant to be a job campus, it isn't the end of the world.  If there is a dead horse in the road, quit beating it.  Oh yeah, it was mentioned that North Shore might still be barren many years from now.  North Shore has considerable practice at being barren.  Just tell me how you, the citizens, benefit from that.

Notes:
Tammy made a statement that she felt a more local consultant than a Denver based consultant would be preferable.  I totally agree. 

Marc Kurbansade made a noble attempt to explain how good planning took into account both market demands represented by the developer, and the planning demands that were desired by the city.   About half of the Council seemed to understand, or care about Marc's attempt to meld the developers and the city together.  But, Marc made a good effort.

One thing I noticed in the Rowlett 2020 meeting was that some of the above concepts seem to be missing.  At least at first.  The meeting started off talking in general about what was going where.  For example, North Shore was reserved for job  creation.  Then, it gravitated to some consultant to be hired and discussions of what the consultants were to analyze.  Then, there seemed to be a desire of some council members to have some input in what the consultant were to research. Then, there was polite "push back" from Staff about council sticking their nose into Staff's business.  Staff seemed to think they knew what to do in selecting consultants and areas of research, and council would be left to decide whether they did it right, or not.  The question occurred to me, how would council know if Staff did a good job if they didn't know who the competing players for the consultant job were and what they were instructed to review? Who would Council compare Staff's choice with?  I think Brian (City Manager) took a long time to say, "Trust us."   Marc Kurbansade (Director of Development) softened the confrontation  by saying there would be lots of conversation back and forth between council and staff while putting this together.  That seemed to satisfy most and they went on to other topics

Therefore, I don't see much chance of Rowlett 2020 improving much.  If there are pretty pictures, like before, there will be little substance.  If there are some good facts, there's a chance.  There will be a lot of hype about the "New and improved" Rowlett 2020, but I don't expect much.  Probably something less than the $100,000 worth. 

Housing Finance Corporations (HFC's)
When this discussion was started, the mayor made it clear that Debby and Bruce requested that the topic be put on the agenda.  I presume that statement was important for some reason. 

Let me start by telling you what a HFC is.  It is a financing vehicle, designed to provide funding to develop apartments and houses for Senior and Workforce families.  It doesn't have anything to do with where they are located, how many stories it has, whether there are 6 houses to the acre, or 3 houses to the acre.  It does not have one thing to do with zoning or codes.  It just provides funding (money) for development projects. 

Early on in this discussion, it was clear that Debby, Bruce, and Robbert were solidly behind this financing vehicle.  It was all for the right reasons.  They knew how much money it would take to qualify for an average house in Rowlett.  They knew workforce average salaries weren't sufficient to buy the average house.  They also knew the problems retired Seniors could have even tho they owned their own houses.  Many Seniors, if not most, were taught that if their house was paid off when they retired, and they had just a little nest egg, they would be fine.  That simply isn't true.  The above mentioned council persons did their homework.  They wanted the council to render a "proclamation" that the City of Rowlett should issue a letter stating they were in favor of investigating the forming a Housing Financial Corporation. 

Then, the wheels came off.  All the rest of the council, mayor, and City Manager started talking about developing a "policy" first.  Let me ask you a question.  After you get past the policy question of whether you want to provide housing aid to Seniors and Workforce, how much more policy do you have?  I couldn't believe some of the discussion.  Some wanted to tie HFC's to Rowlett 2020, which is months away.  The only reason given was that, and I quote the City Manager, "You don't let the tools drive the policy.  You let the policy drive the tools." 

HUH?  Just how much policy do you need?  Do you need months to develop it?   Do you want to provide aid, or not?  What other policy do you want to talk about?  Admittedly, there are still many details to be worked out, but I would think you could work them out as you progressed.  Working out the details doesn't have much to do with policy.  If you run into an insurmountable problem, shut down the program. 

You must understand, no taxpayer money is involved after the HFC is formed.  Then, from fees earned, the HFC returns the start up money to the city.

Therefore, I guess the council has to concoct and script a policy before they can issue a letter saying HFC's are desirable.  How does a policy determine if an HFC is okay, or not?  Is well intentioned money wrong?  Every day that Council lingers and acts "studious" is a disservice to Rowlett in general, and Seniors and Workforce populations in particular. 

Notes:
Tammy said she would like to tie the determination of the HFC to the Rowlett 2020 "redo."  Since HFC's are a financing vehicle, she must mean we need to incorporate all lenders into Rowlett 2020.  Why just one lender?  Should we keep Chase and Wells Fargo out of Rowlett?  How about all the Savings and Loans?  They caused all the problems in the 1980's didn't they?  What about Fred and Ethyl's Mortgage Company?  Do we need a  policy on all them?  Goodness, they even keep our money.  Shouldn't they have a policy?  Tammy's comment to incorporate the HFC's into the Rowlett 2020 "redo" is very uninformed and is without any defense.  Stated another way, it's bizarre.  Martha Brown seemed to "team up" with Tammy.  Sheffield kept his head down below the rocks.  Brian said, "Now we're cookin."  (I jest)

Brian Funderbunk spoke up.  At one time I thought he was in favor of the HFC's.  Now I'm not sure.  He spoke about "the many options Rowlett has for housing aid."  Well, if we have so many options, why aren't we doing something for Seniors and Workforce families?  Does Rowett prefer that workforce families work in Rowlett but live somewhere else?  Another of the things Brian mentioned was the "use of 380 funds."  Folks, if you hear "380 funds," run and hide.  Mostly they're called "380 Grants."  When most people hear "Grants" they usually think of Federal Grants or State Grants.  Well, 380 Grants are your money.  These are funds that are advanced from the city.......your money that never left town.  They would be paid out of your annual taxes.  Please, please believe me.  There is no one in Rowlett's "officialdom" that has a clue how to underwrite a loan, any development loan, and know how to administer it.  It would be a disaster.  They would be lending millions of dollars of your money, and no clue what is involved.

Which leads me to the last observation I will make in this blog.  It's not so much an observation, but a story.

On November 6, 2016, I sent Todd Gottel and Brian Funderburk a memo.  Attached to that memo was 37 pages of data, contacts, professionals I had talked to, and copies of correspondence.  The attachments were the culmination of a lot of work I did researching HFC's. I spent a lot of time accumulating the info.  I did what I thought was right.  I was nobody important.  I was just a citizen.  I sent it to the boss of the staff (Funderbunk) and the boss of the elected officials (Gottel).  I knew I couldn't present the information to City Council, so I thought our two "bosses" would know what to do with the information. 

Contained within the information sent to Todd and Brian was the promise from two HFC professional organizations in Austin that offered to travel, at no cost to Rowlett,  and bring their staff to answer any questions our City Council had.  Folks, these people were professionals.  When I listened to them on the phone and compared their answers to the questions I heard asked last night and the gobblygook answers coming from attendees last night, my head spun in disbelief.  I worked hard to get them the best information I could.  I talked to a lawyer in Chicago that did this business for a living.  I talked to a financial consultant in Austin, and two organizations in Austin.  I talked to two developers.  I sent it all the Todd and Brian.  I knew my job  was as far as it could go.  It was now in the city's hands.

Last night, I could have provided the best information available for Council to ask questions, and they sit there listening to junk. 

Below is a copy of my email to Todd and Brian.  I am working on setting up some kind of link whereby all my readers can click on the link and read the 37 pages of information.

My hat's off to Debby, Bruce, and Robbert.  I think they care a great deal about our Seniors, Policemen, Firemen, and others that fit into the workforce strata.  Some of the others, I don't think so.   I am disappointed.  I have a good place for their policy.  The email is below.  It's in reference to setting up a meeting:
_________________________

From: ronm145@verizon.net [mailto:ronm145@verizon.net]
Sent: Sunday, November 6, 2016 9:01 PM
To: Brian Funderburk <bfunderburk@rowlett.com>; Todd Gottel <tgottel@rowlett.com>
Subject: Housing Finance Corporations--- Preliminary Info

 
Brian/Todd--

Attached is some preliminary information regarding Housing Finance Corporations.  I think there's 37 pages.  Don't worry.  I'm not going to get into anything remotely resembling 37 pages of information.  However, I think it is information you will need if we proceed further.  I put it in email format so that you can forward to anyone you feel has a need.  Much is simply sample forms.

My visit will be relatively brief.  I want to visit about what I have found around Texas, and what I feel Rowlett needs.  My major thrust is that Rowlett should be looking out after it's own workforce and senior needs, and the Rowlett taxpayers should not have to subsidize it. 

The attached info is part of the material that has been supplied to me by various people "in the business."  I must say, I was most impressed by the people I talked to.  In this email there is all the contact information for any questions that might arise.  The email addresses within are "live," therefore all you have to do is click on. 

I shouldn't keep you long.  Oh, by the way, I will make an early apology for my wearing apparel tomorrow.  I have a 4 hour stress test immediately after leaving your office.   And, on Monday, too.  Yuk!!

Ron

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Keeping abreast.

1/18/2017

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I attended the Executive Session of the City Council meeting last night.    There were two topics I was interested in; Rowlett 2020 and Housing Finance Corporations (HFC's). 

I heard some encouraging comments, and unfortunately, I heard some pretty poor comments. 

I need to work on the report a bit.  I'll post something, soon.

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Rowlett 2020

1/14/2017

1 Comment

 
There is beginning to be some discussion about "tweaking" Rowlett's long term growth policy, known as Rowlett 2020.  There is a lot wrong with the current Rowlett 2020.  It's a growth forecast, or plan, of which many events aren't fitting the anticipated and proposed growth patterns. 

This is going to be a long blog post, so go to the frig and fix a really good sandwich and get a bottle of your favorite drink.  Get comfortable, then come back and read.  

The first reference point in this discussion is the Rowlett 2020 presentation that is on the City of Rowlett website:   http://www.rowlett.com/index.aspx?NID=1090   You will probably need to return to this link several times, if you are going to do your own research.

In the early years of Rowlett 2020, I didn't have that much of a problem with Rowlett 2020.  It was often referred to as "looking at things from the 50,000 foot level."  That meant a general overview without a lot of specifics.  Certainly, there was a desire for planning our city's growth pattern well in advance of events.  We knew the DART station and the GWBT was either here or on it's way.  Most knew that good economics influences would be changing for the better in Rowlett because of these events.  The question was how?  Certainly all believed the tollway and DART were good influences, as far as business development was concerned. 

The first sub-areas addressed under Rowlett 2020 were, 1. Woodside,
2. Downtown, 3. Gateway, 4. Healthy Living, and 5. North Shore.  The North Shore plan was adopted on April 15, 2014, and stated:

"Intent.  It is intended that North Shore be the City of Rowlett’s major employment hub.  This is achieved by permitting an integrated mix of uses and building types in order to facilitate and support an employment base."  (My emphasis.)

I believe the above premise is the root cause of many mistakes made by City Council in North Shore.  Whether intended, or not, the plan fails to recognize that many times there are extenuating circumstances in any plan.   How many times have you picked up a manual to learn how to do something, and the very first page says, "This manual is intended to be used as a guide only."  Almost any manual I have ever read has started out with the same words.  Rowlett's "officialdom" has taken the absence of these words literally.  There could be a creation of 40,000 jobs about 15 minutes from North Shore, and there is no provision for modifying the plan to accommodate that event.  And, of course, that's exactly what happened. 

The discussions of the above  areas were still very generalized when adopted. I was on City Council at the time and saw no danger in any discussions to date.  I saw great things in store for Rowlett, however because of the complexity of the development business, I began to worry about Rowlett's ability to adapt and make maximum use of the city's potential as events unfolded.  Everything seemed to be very "lock step," as one might expect in a controlled society.  I was uncomfortable with this.  We had no maneuvering room.  We didn't have any real estate professionals on board that recognized the potential.  In fact, my first exposure to the  real estate expertise of Rowlett "officialdom" was horrifying.  I've written about it before, but the story is worth repeating as an example of our dismal real estate acumen at the time. 

I had just been sworn in as a City Councilman.  I attended one of our early meetings and our THEN City Manager was expounding on a new apartment developer she favored to build apartments on the land surrounding the Community Centre.  She wanted to lease the land, rather than selling it.    In front of witnesses, I ask why she wanted to lease the land instead of selling it.  She responded by saying she wanted to keep some control over the land.  That was  her M.O.  Which was control, control, control.   Debate was not welcome.

Folks, I'm a former real estate lender.  I responded to the former City Manager's "control" answer by saying that no lender was going to lend $20 million on any project in which they didn't have 100% control of the collateral.  It was probably okay for the city to lease the land, but they would have to sign a Subordination  Agreement and an Assignment Agreement with the lender.  The city would have to relinquish all control.  That would give the lender control of the project all the while the project remained as collateral, and the ability to sell the project in the case of foreclosure.  In my opinion, the City Manager didn't know what the hell I was talking about.  That comment stopped her cold.  She never responded.  Clearly, we didn't get along at anytime after that dialogue.   I never heard another peep about leasing the land after that.  Our relationship never got better.  It was not good, anyway, and it only got worse.  The above story exemplified the limit of Rowlett "officialdom's" real estate knowledge.  All the rest of our Council expertise came from maybe a book and  experience gained from council members buying a house.

Somebody thought it would be a good idea to go get some expertise.  I agreed.  We interviewed nine consultants.  We selected one.  I voted for the consulting firm that got the contract.  They had the most marketing experience.  The first cost was $50K.  I didn't see how they could do everything expected for $50K.  They couldn't.  The last bill I was aware of brought the total up to $1.5 million.  But, I was gone by that time.  The first Rowlett 2020 review was in 2011, subsequent adoptions were in November, 2013.    All the above market areas, and the specs controlling the areas, can be found on the above website. 

In my opinion, all market areas but North Shore were worthy of adoption, however I thought North Shore totally missed the mark.  When North Shore began to evolve as a market area, I had great expectations.  North Shore was a good looking piece of land to any developer or lender.  While our "expert consultants" began to gather up pretty pictures to prove that North Shore should be developed as distribution centers and office buildings, (therefore creating employment) I started looking at the land as a lender would, beyond the pretty pictures.  There is no doubt the consultants found pretty pictures.  Boy!!  Did they have pretty pictures.  However, they were missing facts.  There were  some pretty charts, but none were relevant.  The charts did not show how much land north of North Shore was being absorbed for commercial development.  There were no residential forecasts. No estimates were  made regarding when Rowlett could expect to benefit from expanding distribution centers and office buildings.  In fact, all I saw from North Shore was dreams......not evidence.

While our consultants were pasting pretty pictures and multi-colored graphs on presentations to City Council, I was looking at boring "stuff."  I was talking to warehouse people about the suitability of North Shore for their needs.  I also talked to office park developers.  They both said the same thing:  They would have to pay their workers $1 per hour more  for tolls getting to work.  There was no substantial cost-free way to get to work.  Rowlett had no major free cross streets.  We have Merritt Road and Liberty Grove, but they don't go anywhere, and they are primarily residential access streets.    Furthermore, the warehouse people said they would have to pay tolls for all their rolling stock entering and leaving their facility.  One even estimated that it would cost his profit center $250K a year more to locate in North Shore, if all other comparable costs were equal.  Another additional cost was the building of a service road along the tollway.  There isn't any.

Well, how long has GWBT been there?  Four years? 5 years?  And how many inquiries have been made from the distribution center and office building users?  Zero.  Do we have anything from what our consultants said we were going to get?  Nada.  I would suggest the consultants missed the market.  

During all the above, I was already hearing stories about the new major office construction of State Farm, 15 minutes up the tollway from Rowlett.  Then, it seemed like every day another major office complex was announcing new offices from Legacy and the North Tollway to the State Farm complex.  There was to be job creation of approximately 40,000 new positions taking place anywhere from 15 minutes to 30 minutes from Rowlett.  That was incredible good fortune. 

Now, just where did you think many of  those people were going to live?  There are not many tracts of land between the above office development and Rowlett that is big enough to provide a good residential housing development.  Smaller tracts were available, but they were too expensive for popular priced houses.  So, what's now being built on these smaller tracts between Rowlett and the new jobs?  Apartments and more apartments. 

I wasn't the only one to notice that Rowlett had the first major pieces of land suitable for residential development.  This was new evidence noticed by many.  Developers noticed.  However, every time they tried to get approval to develop a subdivision in the North Shore area, they were squashed like a bug.  Reasons for denial ranged from "holding land for a credit card company" to "it doesn't fit Rowlett 2020."  I attempted to find out who the credit card company was from the then City Manager and one other Councilman that seemed to have knowledge about it.  No answer was forth coming.  One might think it was not a true story.  However, we all know we wouldn't be lied to, don't we?  That was about three years ago.  I have no knowledge of any credit card company making application to build a 50 acre complex on Liberty Grove Road.  However, that same piece of dirt had been denied three times as residential development.  Each time the residential developer produced a proposed subdivision plan, the proposed  home to be sold were priced at about $3ooK and up.  About 250 homes were proposed.  The proven absorption rate at the time was about one house per week, or 52 units  per year.  The project was denied about three years ago.  Therefore, if it had been approved at the time, the subdivision by this time would have produced about 150 homes valued at about $45 million and added to our tax base, with another $30 million to be added over the next two years.  Our tax base was denied these revenues for no documented reason, except Rowlett 2020 had decreed that the land was to be used for commercial development.  FAT CHANCE.  Interestingly, when City Council was sitting at the dais to discuss the pros and cons of the development in front of the camera, there were only six votes present.  One council seat was vacant.  Of the six voters, one talked "for" approval of the subdivision, one "against" the subdivision, and one "neutral" for the subdivision.  The other three council persons didn't say a word. 

Folks, the Council had an $75-$80 million dollar deal in front of them and three council persons had no observations or questions?  Give me a break!!  The citizens never knew what the real discussion was.  In fact, I know one council member that changed his vote from his previous comments made in my presence. Who talked him into changing his vote?   I know the then City Manager didn't want the development.  She already had her favorite developer selected, who wanted to build 1/4 mile up Liberty Grove to the east.  But, that is a story that I will comment on later in this blog post.

If the above wasn't reason enough for angst, about a quarter mile to the west, on the west side of the tollway and serviced by the last remaining segment of Liberty Grove road, another subdivision was presented and denied.  This denial was a few months after the above project.  Apparently, the credit card company excuse had been already used, therefore another reason was needed to deny by the City Council. 

Did you ever hear of a "Super Majority" required to pass anything by City Council?  Me neither.  The mayor subsequently told me he hadn't heard of it, as well.  However, when we went to City Council that night expecting to get the project approved, we learned what a "super majority" was.  It was a scene right out of the first Frankenstein movie I ever saw.  The citizens of the Toler Road and Larkin Road area marched on City Hall.  It was dark.  The voices were loud.  I fully expected to walk outside and see ox pulled carts with wooden wheels, hungry and skinny underfed wives and small kids with dirty clothes, and all of them carrying straw torches.  They were fighting to get room to sit in City Hall.  it was a rebellion.

One thing they all knew in common, and that was what a "super majority" was.  Apparently, if 90% of the citizens living within 200 feet of a zoning request object to the zoning, it takes a super majority to pass, or 6 of the 7 total votes.  Nobody I knew in city government knew, or admitted to knowing what a "super majority" was.  We were advised by Rowlett Planning that night. Who else would know?   Do you think someone on Staff knew (including the then City Manager)?   If so, how did that information get to the citizens on Toler and Larkin Roads."  How did they know about "super majority?" Why wasn't the developer told before investing $100K in the project?

Let me tell you something, folks.  I will die convinced that someone on Rowlett's "officialdom" roster sabotaged the developer's request.  I think someone from City Hall visited, or caused to have someone else, visit the citizens to tell them about the "super majority."  I believe someone from Rowlett "officialdom" incited a riot.  I have never seen such resistance to a project that, on the average, the homes being proposed were worth more, on the average, than the homes already there.  One resident even said he wished they would build a commercial building in his back yard.  The movie Forrest Gump quickly came to mind.  Also, the old saying of, "You can't fix stupid" flashed.  The denied development would have been the best thing to happen to the area residents.  It would have improved the real estate values of all in the neighborhood.   Yes, some pasture next to the protesters would have been lost, but the subsequent development would have been the best the current residents could have asked for.   Not only that, but I think the land owner suffered unwarranted deprivation of his right to sell his property.  What a terrible, terrible mistake of our City Council.  What did it cost you?

This subdivision would be running slightly behind the first subdivision mentioned above.  By this time, it would probably have added $30 million to the tax base.  Both subdivisions would now be adding $600K per week, or better,  to the tax base.  Instead, both sites are languishing as pastures for a couple of horses and goats, and taxed at hardly anything because the land is listed as agricultural.  What a waste of assets.  However, it is true that the subdivisions did not fit the Rowlett 2020 forecast.   I estimate the total loss to our tax base at this time to be in the neighborhood of $75 million.  The Rowlett taxpayers are making up the loss of this revenue.

Three or four month ago, a developer requested that he would like to build a subdivision that very closely followed Form Base Code requirements. I was interested in the project.  I drove out and looked at the site.  Clearly, the highest and best use was residential development.   This subdivision was in the far west part of North Shore.  The developer asked for some concessions from Form Base Codes.  The concessions were minor.  In fact, Rowlett Planning spoke in favor of the concessions.  One issue that remained in my mind was the spacing of trees.  The developer requested that trees be spaced 30 feet apart, instead of the  FBC requirement of 20 feet apart.  I presume everyone on Council thought the developer was trying to save some money and "cheat" the system out of trees.  Folks, I was watching this on Live Feed.  The lots for the houses were proposed in accordance with FBC.  That meant the houses were quite close together.  If you space the trees 20 feet apart, most certainly there will be many driveways with trees in the middle of their garage drive on front entry houses.  Thirty feet spacing allows some leeway.  This issue and some others were the best presentation I have ever seen in attempting to meld the marketplace with the Form Base Code.  The developer was really trying to comply.

The project was turned down.  The loudest reason given was, "that it didn't comply with Rowlett 2020, and we don't have any idea what will develop in the future."  Folks, that reason was given rather loudly.  The council person saying it was citing exactly what's wrong with having no flexibility.  Please note the words, "we have no idea."  That council person is still on council. 

Now, lets talk about the residential development that DID get approved up near the North Shore area.......the one the then City Manager wanted.  It was announced with a lot of fanfare, with bugles playing, parties thrown at the site, newspaper articles, photo ops for everybody, etc., etc., etc.  If you want detail about this subdivision, just read the blog a few pages back from this one.  I have concerns about this subdivision.  Please be advised......I don't want it to fail.  It would be bad for Rowlett.  However, the ground breaking was June of 2014.  Even with the horrible wet weather we had the following Spring, the subdivision should have completed within 12 months.  This is part of what I do for a living.  I know how much time it takes, unless there is government interference or incompetence.  The land development took a year longer than it should have.  I told the mayor several times that he was being lied to. I even bet him $20 one time than a certain promise the developer made wouldn't happen.  The mayor didn't take the bet.  I would have been $20 richer if he did.  The subdivision in question is Homestead at Liberty Grove.  It was highly touted as Rowlett's first Form Base Code subdivision.  It was to be the grandest thing to ever come to Rowlett and would preview the future of Rowlett development.  The grins from Rowlett "officialdom" were  stretching from ear to ear. 

But, alas.  The subdivision, with two of the best residential marketers in the D/FW area selling, and a far superior housing market to sell in, can't keep up with the Lennar subdivision across the street.  Absorption rates of the subdivisions are discussed a couple of blogs back.  One can not blame the builders.  They're good builders.   I don't think their product fits well on these lots.  Also, I think the street design is awful, and cars won't fit in the rear garage drives, and it's against HOA policy to park in front, and you can practically lean against any house to rest while walking.  The sidewalks are so close to the front of the houses.   In any event, this is what your previous City Manager wanted. It's my belief that she did what she could to torpedo the two denied subdivisions to protect Homestead.  Once again, a demonstration of her incompetence as a real estate analyst.  Sadly, she still has disciples with Rowlett.  Her influences are probably still with Rowlett.

Folks, there is nothing wrong with a plan of action.  In fact, its desirable.  However, its wrong in any business to fail to change the plan in the presence of evidence that says the plan is inaccurate or wrong.  It's just common sense.  Shouting out that, "It doesn't fit the plan" is simply a poor excuse, if you can't prove the plan is accurate. 

We need real estate development experience, or know how to get it.  Please note, the operative word is "development."  There's more to real estate than selling houses.  A good developer may not have $30K in dental work.  That's because a good developer is focusing on numbers, not selling houses. 

This post has become far too long.  However, I felt all had to be said.  The other Rowlett market areas and the Form Base Codes deserve some discussion, but they will have to wait.  Most are not as "off base" as North Shore.




1 Comment

Daughter's newspaper article.

1/9/2017

0 Comments

 
The Dallas Morning News article that mentioned my daughter was published today in the Metro Section.  It's about an old house.
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