6/26/2010 - Third Saturday Class

What a surprise...No AC and no Internet!!!  Class canceled?  Not so fast speed racer!

We have guest speakers lined up today...what do we do?

Forgey to the Rescue, hello Sheraton.  Forgey arranges a private dining room at the Sheraton's Shula's 347 Grill and buys everyone breakfast and had I known, I would have skipped breakfast before class.  At least I saved him $15.99 for the buffet.  I did however take advantage of the free lunch though.  Forgey buys lunch for everyone too.  Thank you Dr. Forgey.

Now we had to contact the speakers and give them the new venue, but wait, I had Owen coming at the my scheduled time of 10 am but Jason double books his speaker for my time slot...can anything else challenge this morning start?  It's all good, Owen is early and we get started.  Just giving you a hard time Jason!!

Owen tells us of his experience and how he went about acquiring the building and what he envisioned.  He brought before and after pictures and let me tell you, one had to have a vision to see the diamond in this ruff.  As Forgey has said, "either you have it or you don't...it can't be taught".  Well Owen has it.  Not only did Owen acquire the building, apply for the tax credits, retrofit the building with all the preservationists looking over his shoulder, installed two new elevators, repaired all the exterior windows, new electrical and plumbing, he got it done in 10 months.  Matter of fact, he was within weeks of filing bankruptcy getting it done.  One key take away was:  in order to use the tax credits, you have to have the buyers of the credits be a partner from day one or you can't use them.  Owen found this out the hard way and of $500,000 of credits available, I think he said he was only able to use $14,000 of them and they expire this year.  Ouch!

While Owen was presenting, Jason's guest speaker, Leslie Houston of Wells Fargo's Community Lending and Investment division joined us.  She chimed in and added to the discussion with Owen.  After Owen completed his presentation, Leslie discussed the lending perspective.  She was very helpful however, the bottom line had not changed...personal guarantees, 50% LTV's, 1.25-1.5 DCR's, and financial statements back by tax returns.  Lending is not a reality in this market without meeting these criteria.  She did however share with us there is a gov't program from the US Treasury called the "Community Development Financial Institutions" whereby they give large loans to these institutions and in turn they break them down into smaller loans and make them available to the community.  Check out this site for more details.  http://cdfi.org  and this site for the US Treasury.   www.cdfifund.gov/  This could provide a better source of funding however, we would need to research it further.

Dana Burghdoff, Deputy Director for the City of Ft. Worth's Planning and Development Dept. then joined us.  she was very helpful and in particular for us.  We were not sure about the parking requirement and unfortunately we have a minimum due to a certain section of the historic district that is less than 250 feet from our site.  It is four little houses that fall into this A-5 zoning and thus we have to meet a minimum number of parking spaces.  Not good for our deal.  She also helpful for us in that I was going down the wrong path for meeting with the appropriate people for what is called a "Certificate of Appropriateness".  The City has a department to aide developers with the conceptual plans and determining if they will be appropriate and if not, how to assist developers get their projects done.  Dana also referred us to Randy Hutchinson in the planning and development dept. if we needed any further assistance.  Another area helpful to developers is the Urban Design Commission.

Great day considering how it started.

Peace out,


J2M