INDUSTRY NEWS

 

Shutdown Ends After Congress Passes Stopgap Measure, But Government Funding Expires February 8th

The Federal Government has reopened after a three day shut-down.  Congress passed a short-term funding bill that will continue to fund government activities through February 8, 2018.  The measure passed the House of Representatives on a 266-150 vote with all but 6 Republicans voting for the measure, who were joined by forty-five Democrats.  In the Senate the measure passed on an 81 – 18 vote.  A breakthrough was achieved when Majority Leader McConnell agreed to allow a vote in the Senate on a Deferred Action for Childhood Arrivals (DACA) measure.  There is still much to be sorted out before the expiration of the short-term Continuing Resolution (CR) and it seems unlikely that Congress will strike upon a compromise that funds the government through the September 30 fiscal-year end, likely resulting in another short-term or another potential government shutdown.

Unlike tax reform, which was passed under budget reconciliation rules only requiring simple majorities and thus could be passed on a partisan basis in the Congress, a spending measure will likely require at least 60 votes in the Senate to overcome a potential veto, thus requiring support from at least some Senate Democrats.

One significant hurdle to passage concerns a lack of compromise over the Deferred Action for Childhood Arrivals (DACA) program, which the Trump Administration announced will no longer be honored after March 5 – resulting in the deportation of roughly 690,000 people. Democrats have floated withholding their votes on any stopgap funding measure that lacked language addressing the DACA issue.

On January 16, the House of Representatives offered stopgap legislation which they believe includes enough perks to encourage Democratic support – including a six-year reauthorization of the Children’s Health Insurance Program.  The Senate failed to secure enough votes to pass the House Resolution.*

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Congress Discusses Raising Spending Caps, Including for Nondefense

Recent reports have brought to light that Republicans may have put several offers on the table in spending negotiations, as the current Continuing Resolution expires on February 8. One such proposal is to raise the spending caps by $80 billion for defense and $63 billion for nondefense, however more recently, that proposal has reportedly changed to provide less of an increase for nondefense.

While an increase would likely be beneficial to HUD, it’s possible that much of the increase goes towards transportation infrastructure, which would be in line with President Trump’s infrastructure plan to incentivize a now $1.5 trillion investment (increased from $1 trillion during the President’s State of the Union Address on January 30th).

The spending caps are the product of the Budget Control Act of 2011 (PL 112-25) – without an agreement, the law would reduce spending to $549 billion for defense and $516 billion for nondefense.*

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HUD Awards $1.5 Billion to Help Puerto Rico Recover from Hurricanes Irma and Maria

The U.S. Department of Housing and Urban Development (HUD) today awarded more than $1.5 billion to help Puerto Rico to recover from Hurricanes Irma and Maria. HUD's Deputy Secretary Pamela Hughes Patenaude announced the disaster recovery grants with Governor Ricardo Rosselló during her third visit to the island since Hurricanes Irma and Maria.

These recovery funds awarded today are provided through HUD's Community Development Block Grant – Disaster Recovery (CDBG-DR) Program and will support long-term recovery of seriously damaged housing and local businesses in Puerto Rico.

"President Trump and the entire HUD family stand with our fellow citizens in Puerto Rico to help them recover from these devastating hurricanes," said HUD Secretary Ben Carson. "These recovery funds will help repair damaged homes and businesses. As local leaders, along with their citizens, develop their recovery plans, HUD will reduce regulatory barriers and remove any unnecessary roadblocks to speed long-term recovery."

Governor Rosselló added, "On behalf of the many thousands of survivors here in Puerto Rico, I want to express our appreciation to the Administration and HUD for recognizing the tremendous needs that remain in so many of our neighborhoods. This grant will make a huge difference in repairing damaged homes and businesses and facilitating the social and economic recovery here in the island."

Congresswoman Jenniffer González-Colón said, "The $1.5 billion in CDBG-DR funding that we are announcing originates from the first Continuing Resolution (CR) that we advocated for and approved in Congress last September, out of a total of $7.4 billion that was assigned to HUD to assist in the aftermath of natural disasters. Today's announcement is just another example of our ongoing efforts in Congress to allocate federal funding that helps mitigate the hurricanes' disastrous effects and consequences."

Background

On September 8, 2017, President Trump signed the Continuing Appropriations Act, 2018 and the Additional Supplemental Appropriations for Disaster Relief Requirements Act, 2017. The Act appropriated $7.4 billion in CDBG-DR funding for major disasters declared in calendar year 2017. To distribute these funds, the Act requires HUD to direct the funds to the areas most impacted by qualifying disasters. HUD will continue to work with Puerto Rico to address its remaining unmet needs.

In making today's allocation to Puerto Rico, HUD relied upon data from the Federal Emergency Management Agency (FEMA) and the Small Business Administration (SBA) to determine the extent of unmet housing and small business needs in the areas most impacted by the disasters. HUD's analysis found thousands of middle- and lower income homeowners and renters experienced serious damage to their residences and who were not adequately insured (or uninsured) for their losses. Similarly, businesses suffered serious damage that is not adequately covered by insurance or other resources. The grant announced today is designed to help meet needs not being met by private insurance or other sources of federal assistance.

CDBG-DR grants support a variety of disaster recovery activities including housing redevelopment and rebuilding, business assistance, economic revitalization, and infrastructure repair. Grantees are required to spend the majority of these recovery funds in "most impacted" areas as identified by HUD. HUD will issue administrative guidelines shortly for use of the funds to address grantees' long-term recovery needs, particularly in the area of housing recovery.**

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Senior Housing or Amazon Headquarters for McDonald’s Former HQ?

It’s not too uncommon to repurpose older buildings into senior living communities, but it’s pretty uncommon for senior living developers to be considering the same potential sites as Amazon.com, Inc. (Nasdaq: AMZN).

Still, that may be what’s currently happening in Chicago.

Chicago is one of the 20 U.S. cities currently vying to become the home of Amazon’s second-ever headquarters, or “HQ2.” Among the 10 sites the city has submitted for Amazon’s consideration are the former global headquarters of McDonald’s Corp. (NYSE: MCD) in the suburb of Oak Brook, Illinois, and the former Motorola Solutions (NYSE: MSI) worldwide headquarters in nearby Schaumburg.

It remains to be seen exactly where Amazon will build its HQ2, or if these two sites are even on the retail giant’s radar. But there are a few potential back-up plans for both of these locations, should Chicago’s pleas to Amazon fall on deaf ears.

And both of the potential back-up plans, interestingly, may involve senior housing.

Golden years for the Golden Arches

McDonald’s Oak Brook campus is ideal for residential housing of some sort, including senior housing, according to the architect who originally designed the property.

The fast food giant is set to move its corporate headquarters to Chicago by this spring, which means leaving the three separate buildings that currently sit on the 74-acre Oak Brook campus—an office building, a Hamburger University training center, and a Hyatt Lodge.

Dirk Lohan, the grandson of famed German-American architect Ludwig Mies Van der Rohe and a principal at Illinois-based architecture and planning firm Wight & Co., believes that one of the buildings in particular is a great candidate to be repurposed into senior housing.

“I was envisioning converting the office building—which could be easily done—into senior residential living,” Lohan tells Senior Housing News. “It would be spectacular.”

The office building comprises 330,000 square feet, according to the Chicago Tribune. Its unique design, according to Lohan, means it can be converted into a residential building relatively easily.

“The office building, when you look at it, it’s not just an office box. It’s a building that is very carefully set into a landscape and into the contours of the earth,” Lohan explains. “It’s a rich environment that lends itself to living there, and not just working there.”

Most likely, if the office building were to be turned into senior housing, the resulting community would be targeted toward upper-class seniors.

“This would be a custom-tailored, probably upscale senior residential living design,” Lohan says. “It’s a very generous setting, it’s a spacious building.”

The idea to turn the office building into senior housing has caught on among some people, according to Lohan.

“I have had some contacts about that sort of thing already,” he says.

From Motorola to Senior Living

It’s looking even more likely that senior housing will be built on the site of the former Motorola headquarters, according to local news reports.

In fact, a senior housing project to be built on the site is “progressing,” Bob Burk, managing partner of developer UrbanStreet Group LLC, tells the Daily Herald.

UrbanStreet Group owns 225 acres of the 322-acre Schaumburg campus.

A senior housing community is one of several projects—including medical offices, row homes, apartments, and a Top Golf entertainment building—that are being planned for the former Motorola site, though none would prevent Amazon from selecting the campus for its HQ2, according to Burk.***

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COMPANY NEWS:

Events (2018)

  • Gill Group plans to attend the National Housing & Rehabilitation Association’s Annual Meeting, February 21st – 25th in Palm Beach, FL.
    • Cash Gill will be speaking on a panel on Wednesday, February 21st entitled “Rent & Revenue Management Strategies” along with Robyn Eaton (Herman & Kittle Properties, Inc.), Doug Koch (Dauby O’Connor & Zaleski, LLC), Monica Sussman (Nixon Peabody LLP) and Jeff Woda (The Woda Group, Inc.).
  • Gill Group attended the Council for Affordable Rural Housing’s (CARH’s) Midyear Meeting, January 22nd – 24th in Napa, CA.
    • Cash Gill spoke on a panel on Tuesday, January 23rd entitled “Finding Equity in a Haystack” along with C.B. Alonso (Director of Multi-Family Housing/Preservation and Direct Loan Division with Rural Development), Don Beaty (The Summit Group), Campbell Brown (Greystone Affordable Development) and Karl Edmonson (Bellwether Enterprise).
      Events (2017)
  • In 2017, Gill Group attended and sponsored meetings and conferences across the entire United States.
  • Several members of Gill Group also spoke on panels at the largest events in in the country and published articles regarding appraisals, market studies, and other due diligence pieces needed for affordable housing transactions.
  • Cash Gill, of Gill Group, gave a training session to the staff at MFA (New Mexico’s HFA) to further their knowledge on appraisal and market study processes in Albuquerque, NM.

GROWTH (2017 - Highlights):

  • Gill Group added over dozens of staff members throughout our 15 national and regional offices including MAIs, General Certified Appraisers, PE Engineers and AIA Architects.
  • Gill Group’s subsidiary, National Title & Escrow (NTE), expanded their client base substantially and used their new underwriters (Fidelity National Title Insurance Company and Stewart Title Guaranty Company) to ensure that the clients were very satisfied and had all of their needs met.

  Gill Group has published the following:

  • New York Real Estate Journal - How can low-income housing facilities translate into high profits?
  • New York Real Estate Journal - Up, up and away: Home mortgage interest rates and gasoline prices continue ascending.
  • Tax Credit Advisor - Boston MSA Market Snapshot
  • Tax Credit Advisor - Seattle MSA Market Snapshot
  • Northeast Industrial Development Resource Guide - What Appraisers Know About Investing.
  • Affordable Housing Finance – Urban and Rural Market Studies.
  • Tax Credit Advisor – LIHTC Appraisals 101
  • Affordable Housing Finance – Five Ways to Optimize a Market Study

Cash Gill, MAI has had the opportunity to speak on the following topics:

  • (Indianapolis, IN) National Council of Affordable Housing Market Analysts - Maximize Your Market: Understanding the Methodology Behind Market Studies.
  • (Reno, NV) Nevada Council of Affordable and Rural Housing - Don't Get Caught in the Red. New Guidelines for Audits and Inspections.
  • (Washington, DC) The Institute for Professional and Executive Development - Nonrecourse HUD Deals - So You Closed Your Nonrecourse HUD Deal. Now What? And Is It Really Nonrecourse?
  • (Arlington, VA) Council for Affordable and Rural Housing - Property Valuation: The Correct Way to Value Properties.
  • (New Orleans, LA) National Council of Affordable Housing Market Analysts - Affordable Housing Site Analysis
  • (Las Vegas, NV) Nevada Council of Affordable and Rural Housing - Auditing and Accounting Guidelines for Section 42 Low Income Housing Tax Credits.
  • (Washington, DC) Council for Affordable and Rural Housing - Rural Development Appraisals and Market Studies
  • (Miami, FL) Council for Affordable and Rural Housing - The Equity Market - Impact on Rural Housing
  • (Washington, DC) Council for Affordable and Rural Housing - How to Foster Affordable Green and Rural Housing Needs Assessments
  • (Indianapolis, IN) Affordable Housing Association of Indiana - Market Analysis – Best Ways Use Market Studies to Ensure Application Points
  • (Portland, ME) Enterprise Buyer/Seller Conference for RRH 515 Properties – Valuing the Product. What Is My Development Worth?
  • (Washington, DC) National Housing and Rehabilitation Association – Financing and Underwriting Special Needs Housing.
  • (Atlanta, GA) National Council of State Housing Agencies – Comprehensive Market Analysis.
  • (Chicago, IL) AHF Live – Strategies for Rural Deals.
  • (Dallas, TX) Crittenden Multifamily – Financing Special Use Properties.
  • (Washington, DC) Council for Affordable Rural Housing – Rural Housing Preservation
  • (Denver, CO) National Council of State Housing Agencies – Rural Housing Strategies
  • (Denver, CO) National Council of State Housing Agencies – Y15: Preservation and Disposition Seminar
  • (San Antonio, TX) Rural Rental Housing Association – LIHTC Legislative Update
  • (Key Largo, FL) Council for Affordable Rural Housing – How National Appraisal Practices Impact USDA Assisted Properties
  • (San Francisco, CA) National Council of State Housing Agencies – Changes and Challenges in Rural Housing Development
  • (Chicago, IL) AHF Live – Preservation of Older LIHTC Deals
  • (Franklin, TN) Regional Affordable Housing and RAD Training – Valuation, Feasibility and Capital Needs Assessments
  • (Columbus, OH) Council for Rural Housing & Development of Ohio – Rural Housing Market Research
  •  (South Bend, IN) Great Lakes Capital Fund’s University of Affordable Housing – Valuation Risks Using Financing for RAD Deals
  • (Chicago, IL) National Council of State Housing Agencies – Rural Development Opportunities
  • (Orlando, FL) National Association of Housing and Redevelopment Officials – Affordable Housing Appraisals, Market Studies, Rent Comparability Studies and Rent Reasonableness Studies
  • (Alexandria, LA) Regional Affordable Housing and RAD Training – Valuation, Feasibility and Capital Needs Assessments
  • (Ft. Lauderdale, FL) Southeastern Affordable Housing Management Association (SAHMA) – Rent Comparability Studies 101
  • (Indianapolis, IN) Midwest Buyer/Seller Conference – CNAs and Appraisals
  • (Chicago, IL) AHF Live – Acquisition Challenges and Opportunities (2014)
  • (St. Pete Beach, FL) CARH – Preservation Challenges and Opportunities
  • (Nashville, TN) TAHRA – Appraisals, Market Studies, Rent Comparability Studies and Rent Reasonableness Studies for LIHTC and RAD Transactions
  • (Los Angeles, CA) NCSHA – Successful Development in Challenging Markets
  • (Chicago, IL) AHF Live – Acquisition Challenges and Opportunities
  • (Seattle, WA) NCSHA – Rural and Native American Development Strategies
  • (French Lick, IN) AHAIN – Appraisals and CNAs
  • (French Lick, IN) AHAIN – Pulling it All Together
  • (Chicago, IL) AHF Live – Preservation of Older LIHTC Deals
  • (Albuquerque, NM) MFA – Appraisals 101 (personal training for HFA staff)
  • (Atlanta, GA) NCSHA – Using Market Studies to Inform Site Selection
  • (Napa, CA) – Finding Equity in a Haystack
  • (West Palm Beach, FL) – Rent and Revenue Management Strategies (upcoming)

 *as seen on housingonline.com

**as seen on hud.gov

***as seen on seniorhousingnews.com