On July 8, 2015, City Council approved an Ordinance consenting to a new senior loan for up to $2,000,000 that the borrower had negotiated with Community Bank of Texas, to complete the renovation of the Heights Tower property. The loan proceeds allowed the owner to add back several items of scope that had previously been eliminated from the construction budget due to cost increases, and to provide a cushion of operating funds until occupancy increases (within this eight-story building, two full floors are vacant at all times during construction – one floor under renovation and one floor housing relocated tenants). The scope items include common area flooring and finishes, energy upgrades, increase in drywall allowance, landscaping and irrigation, elevator lobby finishes, and additional contingency, general conditions and architect’s fee.
Subsequent to receiving Council approval for the senior loan, the owner determined that there was $240,000 in additional expenses they wanted to include in the budget, which the senior lender agreed to fund. These include additional contingency required by the senior lender ($131,700), loan origination fee ($20,000), and several construction line item increases.
The Community Bank loan agreement includes a clause requiring City Council approval of the additional $240,000. HCDD believes that securing this senior loan is important for the continued success of the Heights Tower project.
Due to delays primarily relating to negotiations between Community Bank and the borrower, HCDD recommends extending the construction completion date from December 31, 2015 to March 31, 2016.
This item was reviewed by the Housing and Community Affairs Committee on October 20, 2015.