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Judson Brown, City of Santa Ana February 10, 2025 <br />Habitat Wellington – Preliminary Financial Gap Analysis Page 4 <br /> <br /> 2412002v3.SA.TRB <br /> 19090.018.035 <br /> <br />FINANCIAL GAP ANALYSIS <br />KMA prepared a pro forma analysis to estimate the Project’s financial gap. The analysis is <br />located at the end of this memorandum, and is organized as follows: <br />Table 1: Estimated Development Costs <br />Table 2: Estimated Available Revenue <br />Table 3: Estimated Financial Gap <br />Table 4: Silent Second Mortgage Revenue Calculations <br />Table 5: Affordable Sales Price Calculation <br />ESTIMATED DEVELOPMENT COSTS (TABLE 1) <br />KMA reviewed Habitat’s December 2024 pro forma, and then independently prepared a pro <br />forma analysis for the Project. The resulting development costs are estimated as follows: <br />Property Assemblage Costs <br />The property assemblage costs are estimated at $3.23 million as follows: <br />PROPERTY ACQUISITION COSTS <br />Based on information provided by Habitat, Habitat purchased the Site for $3.11 million, or <br />$345,000 per unit. Habitat provided an appraisal prepared by AEI Consultants on July 26, 2024 <br />that estimated the as-is market value of the property at $2.78 million, or $309,000 per unit. <br />As such, Habitat purchased the property for $325,000, or approximately 12% more than the <br />appraised value of the Property. <br />RELOCATION COSTS <br />The property is currently utilized as an apartment building that contains existing apartment <br />tenants. The funding source proposed to be provided by the City does not trigger the Federal <br />Uniform Relocation Act. To that end, Habitat estimates the relocation costs at $60,000, which is <br />based on three months of current rent payments. <br />EXHIBIT 3 <br />  <br />  <br />City Council 9 – 16 7/1/2025