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Judson Brown, City of Santa Ana <br />May 9, 2017 <br />Santa Ana Arts Collective Financial Feasibility <br />Pace 4 of 5 <br />Debt $ervico <br />Term <br />• Total Other Costs; The Developer's budget includes Relocation costs of $1,610,000, However, the <br />Developer has provided supporting documentation for only $1,486,811. We have adjusted the cost <br />to reflect the supporting documantatlon. <br />The "Sources" portion of the table illustrates proposed corrections to certain of the sources. <br />CCRC: We have adjusted the CCRC permanent can to reflect the most recently released 2107 <br />restricted rents, as illustrated below <br />Table 3: 2016 vs 2017 Restricted Rents <br />2016 Low <br />Homo Rent <br />AMI (by bedroom <br />2016 CTCAC 2017 CTCAC Utility <br />Bedroom S17o Restriction 21111a, <br />Rent, Renta Allowance Net Rent <br />1 Bedroom 30% $553 <br />$548 $887 $43 $544 <br />3 Bedrooms 30% 51,267 $760 $813 S71 $742 <br />3 Bedrooms 60% NA $1,520 $1,627 $71 $1,556 <br />• Deferred Developer Fee: The Developer budgets shows $3.4M of deferred developer fee, The <br />Developer has Indicated that this was Intended to demonstrate the size of the financing deficit (the <br />project only can earn, per CTCAC restrictions, a $2M developer fee). <br />General Partner (GP) Capital Contribution, CSG proposes that the Developer/GP contribute a <br />portion of its Developer Fee to the partnership In the form of a GP capital contribution. This amount <br />Is subject to negotiation between the Developer and the City land may be limited bytax concerns), <br />but is suggested as tool to reduce the remaining financial deficit. Based on the project's cashflows, <br />approximately $371,912 is available to repay of Developer Fee within 14 years. We have discounted <br />the annual cashflows by 4% (i.e., a risk adjustment) in order to derive a net amount of fee to be <br />deferred (i.e., $250,526). The suggested GP capital contribution, when subtracted from the total <br />Developer Fee of $2,000,000, yields the total Developer fee to be paid In cash — to be allocated <br />between the net present value of deferred fee paid over time and cash fee received during <br />development and construction. The amount of suggested GP capitat contribution, therefore, equals: <br />' HUD, 04/2016 <br />2 California Tax Credit Allocation Committee, April 2016 <br />3 California Tax Credit Allocation Committee, April 2017 <br />m1advisors SAN FRANCISCO LOS ANGELES NEW Y09K <br />