I was hoping to have the next great American novel ready to post by this time. However, I'm getting delayed. I've had a little back trouble and while in the process of finding out what was wrong with my back, we learned I had an aneurysm.
So, I reckon I have to go into the aneurysm garage and get mine fixed. I might be away for a little while. I go into the garage on Thursday morning. With some heavenly blessing, I should be discharged over the weekend.
Basically, I write without a safety net. I don't have a proofreader nor an editor. I write pretty much "on the fly." Often, I don't have a lot of time. In that regard, I often make some grammatical and structure errors. I try to correct them when I discover them. However, sometimes my website software, for some cockamamie reason, will not let me edit. In those cases, I have to dance with what "brung" me. I wish to make a blanket apology for all errors in the past and what most assuredly will happen in the future, and ask that you cut me some slack. Thanks.
My last post seemed to arouse some interest. I'm glad. I put a lot of time in it. This is another fairly lengthy post, but I will break into three parts........1) Kudos to the mayor.....2) What I have really written.......and 3) discussion of the lender's letter to the mayor.
There was a response that I didn't expect. I was told by a good friend that my writing of the post seemed to favor a more negative outlook of The Villages of Rowlett project. I disagree. I want The Villages to succeed. However, I have some disappointments in The Villages. I will admit to them on a post such as my last. You have to read the details. This is not a Facebook post. There is meat on the bone. I received a phone call from the mayor, and I was not surprised by a seemingly "distressed" conversation.
In that regard, people reading my last post had a tendency to read what they thought they were going to read rather than what was actually said. In my opinion, Todd didn't read what was there......only what he thought was there. Also, my friend didn't read what was there.......only what he thought was there. An argument could be made that I didn't write the post clearly. On the other hand, an argument could be made that I upset both sides of the debate, and I wrote exactly what was needed. That's how good conversational debate begins.
Kudos to the mayor.
I posted my last post on June 15. On June 17, the mayor called me referencing a letter from the President of the mortgage company that is making the loan to the developer of The Villages of Rowlett. The letter was dated June 15. I will reproduce the letter below, but will redact the personal information.
That is fast, under anyone's rules. That meant, Todd had to read the post, or have someone report it to him; contact the president of the mortgage company looking for answers; and the president of the mortgage company writing the letter. Of course, the mayor had the letter in his hands when he called me. He offered to send me a copy of the letter, which I then requested, and he did.
Folks, no matter how you slice it, Todd's actions in this matter were very mayoral. It ranks right up there with giving away puppies, which I think is very noble. Good people can disagree. Just because I take exception to someone's position doesn't mean I am against them in all matters. I tell the truth as I see it. But, I always have a little bit of Will Rogers and Mark Twain type sarcasm in my casual writings. I'm a big fan of theirs. It's up to you to decide if I'm wrong. I'm sure I'll tag Todd and others in the future. That's the American Way.
However, Todd's main concern seemed to me to be that he was distressed that a lot of the public would not know about the HUD program and he was worried about the "backlash." I agreed with Todd. I told Todd to reference the title of the subject blog post, "A preemptive strike.......kinda." Actually, I was trying to inform the public as much as I reasonably could, and keep stupid questions out of the discussion. I only wanted valid questions answered. Here's where I disagree with Todd. I'm sure he feels much the same as "officialdom" in general. That is, don't raise eyebrows among the public. My opinion of the situation is just the opposite. I wish to inform the public of the facts and point out the good points and the bad points. Maybe I am wrong. Maybe "officialdom" is right. Standing alone, opposition to my opinion doesn't make Todd bad. He has done right in this discussion.
What I've really written.
Will Rogers was once asked how many comedy writers he had. He said, "I don't need any, as long as Congress is in session." On this blog, I don't reach as high as Congress. Was Will Rogers a bad guy?
1. About HUD...(HUD as a project), "standing alone is no cause for alarm." 2. "Being a HUD project does not necessarily mean a subsidized program." 3. "Just because The Villages is a HUD project, it doesn't mean it is bad." (Italicized and underlined.) 4. "The public can be dumb if they want to." 5. "There are many, many good HUD projects."
The above are just some of the comments I made in the last post to keep uniformed citizens off "officialdom's" back. Regarding stoplights on GWBT and Lakeshore Parkway, I wrote regarding "officialdom": "although the above is not a part of theirjurisdiction" ....to keep uninformed citizens from complaining to City Hall about their efforts to effect the awful traffic lights. I don't get any thanks from City Hall for these efforts to save City Hall from unproductive correspondence and phone calls.
Regarding the current discussion about HUD subsidies, up until we received the letter from the mortgage company (which is below), the only fact we had was that The Villages was a HUD 221 d(4) project. Nothing else.
1. Throughout several posts, I have written that we gave away too much money to the developer for development of The Villages. (My opinion) 2. We didn't know if there were any subsidized apartment units to be rented. (Fact) 3. Did the developer not inform the city about subsidized units? Yes or No? We don't know. (Fact) 4. Did the city know and not tell the citizens? We don't know. (Fact) 5. I have always felt the city's representation of the city's investment of $6 million was horribly understated, when considering the tax abatement and costs of moving the Chamber Building. The city is now an anchor tenant for the library supporting the developer.......costing rent we never had to pay because we owned the library building. (Facts)
Now......Tell me where I lied or misinformed the public. I helped the city with the liquor vote. I tried to keep undue complaints from "officialdom" because of the dreadful traffic lights, and keep people from asking uninformed questions about HUD projects. I try to keep from pointing fingers by using the term "officialdom." I never hear any thanks for these little things. However, I will hear if someone doesn't like what I write. That is because people read for what they want to read. Ignore the details. The story is in the details. Frankly, communication is not a strong suit of Rowlett's Officialdom.......reading or writing. (another jab).
Below is a reproduction of the Mortgagee's letter mentioned above. They are the lender to The Villages of Rowlett. You can scroll down the read the entire letter.
Most of the letter is a rehash of what I have already told you. For the most part, it concurs that what I have told you is the truth. All the rhetoric about HUD being an insurance company and the project being a 221 d(4) is true. It also discussed the 40 year mortgage, which was also true. There was enough in the letter to prove I knew a little bit about the program. The letter is from the President of a well respected mortgage company. I have never done business with them, but they have a good reputation.
In the third paragraph, the writer gets off into the MPS (minimum property standards--how the projects are built) and the various audits they have, but I didn't think you would be interested in that and didn't write about it in an already too long blog post.
The main remaining question to me is are there any subsidized units allocated for The Villages? You must read the letter carefully. In the very first paragraph, the author writes of the 221D (4) program ".......it does not require any rent subsidy, nor does it require any affordable use component." Of course, the operative words are "does not require." I don't like that choice of words. I would have preferred a more definitive comment, like: Neither HUD nor the developer have requested that any subsidized units be included in the underwriting of the project. The underwriting of the project is where the cash flow of the project reveals any payments coming from HUD.
In addition, I have my own experts. Thru a favor of a bank president I know, I was connected to a developer that has done as many projects as the developer for The Villages. He tells me that, as a matter of routine, subsidized units are not routine in a 221 d (4) project. However, he further states that on rare occasion, subsidy units are either requested by the developer or imposed by HUD. It is that eventuality that I would wish to eliminate. I, too, was a development loan underwriter, and I would try to eliminate all possible risk that I could, ergo, a stronger statement from someone that no subsidized units are involved.
Now, after all the above has been discussed, I start to put the letter away from the President of the mortgage company and I notice the date on the front page of the letter is dated June 15, 2015, and the date on the second page is dated March 13, 2015. People, that really doesn't inspire confidence.
I have been away doing some research and some of the news will probably be unsettling to you. You are not going to like it. However, the news is probably not as bad as you initially think it is. I have spent a good bit of time researching what I am reporting below. I get to the reason for this blog at the end of the post.
Rowlett's new downtown apartment project is a HUD project. In fact, it is a HUD 221 d(4) project.
Yes, The Villages of Rowlett, the 225 unit rental project that is being relied upon to revitalize downtown Rowlett is a HUD project. The project that "officialdom" reports is going to cost Rowlett taxpayers $6 million (but by my calculations, $11 million, and counting), and counting a 15 year tax abatement, will take 65 years to recover our investment, (15 years, plus 50 years to recapture $11M divided by $220,000/year in taxes) is a HUD project. Now, if you are still reading this blog, that means you have avoided a heart attack. To aid in your recovery, I need to tell you that that information, standing alone, is no cause for alarm.
Generally speaking, when the public hears "HUD," they automatically think substandard housing, instant slums, junk cars in the parking lot, and a personal observation of mine, field dressing a deer in the parking lot. I actually witnessed the field dressing of a deer in a HUD project parking lot in Independence, Missouri. I was with the property manager of the well run project. I am happy to report that the miscreant tenant was given a short period of time to vacate his apartment. It is stories like this that create the poor public image of HUD projects. One bad project will overshadow 10 good projects.
There are many, many HUD projects around that nobody knows are HUD projects. Being a HUD project does not necessarily mean a subsidized project. I used to know more about HUD 40-45 years ago than I do now. In fact, when I first heard The Villages was a HUD project, I sent an inquiry to the mayor, city manager, and Director of Development Services, asking which HUD program was involved. I was inquiring about the accuracy of the HUD story I had heard, and explaining some differences between some programs, as I remembered them. Time and probably old age fogged some of the information I was offering. I was wrong on some of the information.......but not where it counted. However, it was time to do some research.
I don't want to get off in the weeds too far. However, there is some information you need to know before you can ask intelligent questions. Of course, if you want to ask dumb questions, you can stop reading right here. If you continue on, I will try to keep the dry as un-dry as possible.
First, you have to understand HUD. Generally, HUD doesn't make loans to anybody. HUD is an insurance company. They issue insurance policies to other people (lending institutions) who make loans. There are rules to the myriad of HUD programs. Some programs are "market rate" programs. That means there is no subsidized interest rates or tenant subsidized rents. I would guess that most of the apartments built in Dallas are built under some HUD "market rate" program. The bane of HUD are the subsidized programs. Section 8 is an example of a HUD subsidized program. There are other subsidy programs.
In some rare occasions, there are combinations of market rate and subsidized programs. In these programs, a project is usually 80% market rate, and 20% subsidized tenants.
Market Rate: When the economic environment is not so good, and there is a need for rental housing, developers have a hard time getting the financing they need to develop the projects. They can go to HUD. HUD says, "you build the project to our standards, and we will help you." The developer knows that by going to HUD, the paperwork is enormous, the costs go up, and the timeline to secure financing extends. Why do that? Because the developer gets: 1) the loan is amortized over 40 years instead of 30 and therefore reduces monthly payments, and further allows a reduction in rents; 2) the lender is insured against losses in the event of default, thus getting the lenders interested; and 3) the developer has no personal liability. That is enough to get everybody on the bandwagon. However, it is not free to the developer. He must pay a fee every month, just like FHA residential loans. This market rate operation is probably the only money making department in the entire federal government. It pays for itself. Most "market rate" projects are 221 d (4).
Subsidized projects: This one doesn't take much thought. Many of the benefits of the "market rate" projects apply here, also. These projects are the ones most people think of as "HUD Projects." If someone pays part of the rent to somebody who doesn't make much money, that project is soon occupied by people that don't make much money. That conjures up the image of people field dressing deer in the parking lot, junk cars, police kiosks, and perpetual partying. It is unfortunate, but sometimes that's true. But, the real picture is a little different. The unsavory crowd is a direct result of property management and the developer. The rowdy crowd is handled at the front door, not by income. Subsidized rents are often quite helpful to young families just getting started, or senior citizens trying to live on Social Security. These stories are never reported in the press. The projects that seem to have the most problems are the rehab projects, not the newly constructed projects. They are usually in the poorest and most crime ridden neighborhoods. However, it still remains the responsibility of the property manager to keep the riff raff out. You either don't rent them space, or you throw them out at the first infraction of the rules. What do you do with these people? I don't know. I just know I don't want them as neighbors. I want to be clear.......income has nothing to do with who I like. Character and integrity does. I will admit that its hard to keep a 100% subsidy project tidied up, but management has got to do it........not our culture. It's an over simplification, but throw the bums out.
Combination Market Rate/Subsidize: This is as the name implies. It's a combination of the two types of programs above. However, it is overwhelmingly "market rate" so the projects are usually well built and designed to appeal to the market rate renters. The HUD requirement for the 20% subsidized rentals is an attempt to keep from concentrating all low income renters into the same projects. This seems to have had some limited success. I talked to a developer who has completed 10 221 d (4) projects. I asked him how often HUD requires the 20% subsidy rule. He answered, "very rarely." Apparently, this is a condition imposed by HUD based on some underwriting conditions they use. It would appear the developer never knows when he is "tagged" with this requirement. This condition is revealed early, so that if its a deal breaker, the developer can fold his tent early.
Now, all the above sets out most of the HUD programs. The only fact we know is that The Villages is a 221 d (4). Even though we know that most 221 d (4) projects are "market rate," we also know about "Combination" projects. The first question that comes to mind is, "Does The Villages contain any subsidized units?" I don't know. I only found out by accident that The Villages was a HUD project, let alone know if it had subsidized units. The next question would be, "Why didn't Officialdom tell me it was a HUD project, then proceed to tell me which HUD program so that I didn't worry about it?"
During the extensive presentation at the council meeting whereby The Villages was approved, I never heard the word HUD used anywhere.....by the developer, .....by Rowlett's consultant.......by City Council.......by staff........no one. By the way, where did our consultant come from? He came from Denver. My granddaughter knew more about what was going on in Rowlett than he did.
The big questions is, "What else was purposely or inadvertantly held back from us?"
Most certainly the developer knew the project was a HUD project. If so, the developer knew if there was a 20% subsidized rental requirement, or less. Did the developer keep this information from the city? Did the developer even mention HUD to city authorities? If that information was withheld from the city, I would be absolutely furious. I would be looking for ways to throw them in jail. If the developer was straight with city authorities, why didn't they inform the public? That question makes me nervous. What else does "officialdom" know that they do not want the citizens to know? Was there a conspiracy between the developer and Rowlett's "officialdom" to keep the public in the dark about the project? I don't know any of these answers.
One of the purposes of this post is to explain many of the HUD programs to keep you from getting too excited about something you don't know enough about......yet. Just because The Villages is a HUD project, doesn't mean its bad. I can understand why "officialdom" kept it from the citizens, if they knew. However, I think that would be a big mistake, if that was what was decided. I think it is always better to tell the truth and the whole story. If "officialdom" explained the terms of the HUD involvement, I think the hue and cry would be minimal. Now, some schmuck (me) found out about it, and started asking questions. Now, the repairs for keeping information from the citizens might be worse than telling the truth in the first place.
What do we know? Not much. We know The Villages is a HUD 221 d (4) project. That's it. Oh, I know one other thing. If the City Council approved The Villages knowing it was to contained subsidized units, it would be the dumbest thing I have seen in 50 years in the real estate development business. They would have approved a subsidized apartment project to "anchor" downtown Rowlett. We could do well without that quality of guidance.
Do you still wonder why some people think Rowlett's "officialdom" is less than candid with the citizens? Do you ever wonder how "officialdom" got there?
Some years ago, I wrote an article in the DMN about cutting down the trash trees that had grown up along the bridge on Interstate 30. I have nothing against trees. However, sometimes they are in unwanted positions. For example, to ignore a willow tree that is growing next to your foundation is sure to cost you several thousand dollars eventually. Approximately the same amounts of dollars are involved if that same tree might be growing near your sewer outfall line.
Although trees are beautiful, and necessary for replenishing oxygen, there can be other things of beauty. For example, ask a real estate agent would they rather try to sell land next to 23,000 acres of trees, or 23,000 acres of lake, such as Lake Ray Hubbard. The answers will almost always favor the water.
When I wrote the article, I didn't fully consider all the other problems that arise with indiscriminate cutting of trees. There are many thing to consider. Please view the hypertext below. It reminds me to think things thru.
Yesterday, the mayor circulated an email informing citizens of an increase of toll charges. On July 1, 2015, Toll Tag users will have their fees increase from $0.16.16 per mile to $0.17.06 per mile. That is a 5.5% increase. That's about what your salary increased last year, wasn't it?
Well, I have an observation and a question. I will make my observation first, to set the stage for the question.
I have noticed an increase in "jamming up" or "bottlenecking" at the intersection of PGWB and Lakeview Parkway. The "jamming up" is only for east/west traffic. North/south traffic seems to be fine. During rush hour, it is not unusual for me to wait 3-4 light changes to clear that intersection. Last Friday, I set a record five changes in line. Therefore, there is always a line of traffic stopped to watch the new spring grass grow. They watch a long time. However, while the east/west traffic is always lined up for three or four traffic changes, the north/south lines always clear. When the north/south traffic lights turn red, there is no longer anyone waiting. The line is gone. People, this isn't Chinese arithmetic. It isn't hard.
A relatively simple observation reveals that there is at least 3-4, and sometimes 5 times more traffic moving east/west than north south, yet the light timing seems to be much the same for both directions of travel. Therefore, the obvious. There seems to be four times more traffic on Lakeview Parkway than the service roads of PGWB tollway.
To add another element to the equation, A right turn lane for north bound traffic off Lakeshore Parkway would seem to be a good idea......until one realizes Oncor is involved. One of their power cable towers is in the way. That complicates the equation considerably. You see, Oncor thinks they own everything.......and its a horrible inconvenience to them to discuss their equipment with mere mortals. That was probably enough to keep them out of as much of the original planning as possible.
Now we have a situation that calls for a very expensive "fix"......meaning millions of dollars. Who pays? I don't even want to be near that fight. Or, we can help the situation by changing the timing of the traffic signals.
Now, we're facing a 5.5% increase of toll costs. Some of that money should be dedicated toward solving the traffic problem above. The traffic lighting at the intersection comes under the jurisdiction of NTTA or TxDot.......I'm not sure which. NTTA and TxDot spend a lot of money (I've been told) hiring people that study these situations. However, I feel the Rowlett leadership, although the above is not part of their jurisdiction, should throw a wall-eyed fit with NTTA and/or TxDot about the deplorable and stupid situation we have. And, while they're bitching, they should get us some signs on the tollway that tells people they are entering Rowlett, a rising new star.
My question? Does NTTA and/or TxDot hire anybody that ever got out of the 8th grade?
Ya know.....when you write a blog, you can't have a thin skin. I'm fortunate. My ratio of good to bad is pretty well stacked up on the good side.
Probably the highest compliment I could receive is that I'm honest. I strive to be honest. I strive to remain above the political mud wrestling. I can compliment someone, and point out their warts at the same time. Sometimes, being honest is painful. It has cost me friends. That is always painful.
Whenever possible, I strive to tell a story about Rowlett without making reference to individuals. I use the word "officialdom" often to avoid singling out a single person for both compliments and complaints. Sometimes, it is not possible to generalize. I always avoid "cheap shots." I don't like them when used against me, and I don't use them against others. If I have a complaint, I don't need to chose a "cheap shot." I think I can make myself clear and register a complaint without such childish devices. "Cheap shots" are used by mental incompetents and persons that have no reasonable answer to an opposing view. Productive debate is always good. It often produces mutually acceptable compromise. "Cheap shots" are counter-productive and never come to a good end.
Now, why all this discussion about honesty? By honesty, I don't mean you refrain from stealing your neighbor's car or don't walk your bar bill. I mean honesty in your heart. I mean telling the truth. I mean two way conversation. Conversation is 50% listening. Only 50% is talking or writing. Ya gotta listen and think, and that includes "officialdom."
I am not perfect. I am quick to admit I am wrong when so proven. It does not hurt me to do so. I feel no shame when I recognize a superior argument. That is what being honest can do for you. If proven wrong, I admit it, apologize if needed, and move on. None of us are perfect. That includes you, and an assortment of various individuals usually referred to as "officialdom." Recently, it's my opinion, that there appears to be some evidence that some of "officialdom" is a little stressed.
Now, all of you that think I am talking about the recent term limits discussion are wrong. However, that discussion did, to me, reveal what could be some undercurrents that could be counter-productive to Rowlett's future. We now have less than a year remaining before campaigning begins for a new mayor and three city councilpersons. That is motive enough for some posturing. That's understandable and okay. However, on this campaign, I want all of us to demand "honesty." I don't want any back room dealing. I want answers to questions based on the candidate's analysis of a situation, not their deft abilities with el torro poo poo. Even tho answers will most certainly vary in response to good questions, honest answers will give voters opportunities to evaluate different approaches to solutions. Stated another way, it demonstrates the candidate's skill in problem solving. What then accrues to the candidate's balance sheet are clear perceptions of their honesty. In my way of thinking, both sides win.
My hunch is that intelligent voters will respond well to "honesty." The big question is, "how many intelligent voters do we have in Rowlett?" I know intelligent people are here. I have met them. I just don't know if they'll engage in the process and vote. We should absolutely hate dog and pony shows, and throw out all who try to dupe us.