25J - AGMT ARTS COLLECTIVE GRANT

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4. The units will be restricted for affordability purposes by the City with the following affordability mix: Tax Credit Median @ 30% 20 Tax Credit Median @ 35% 6 Tax Credit Median @ 40% 6 Tax Credit Median @ 60% 25 Manager's Unit (unrestricted) 1 Total Units 58 5. The Project will include 11 HOME -designated units. At least 20% of these units will be restricted to Low HOME households. Ili. PROJECT UNDERWRITING ASSESSMENT KMA prepared a pro forma analysis to assist in evaluating Developer's proposal. The analysis is in Appendix A located at the end of this report and is organized as follows: Table 1: Estimated Development Costs Table 2: Stabilized Net Operating Income Table 3: Financial Gap Calculation Table 4: Cash Flow Analysis Table 5: HOME Cost Allocation Analysis A. Estimated Development Costs (Table 1) KMA reviewed Developer's cost estimate provided in July 2018. The Developer provided a general contractor contract from Westport Construction, Inc. as well as requested and approved change orders to support the construction cost estimates. After reviewing the proposed scope of work and the acquisition costs, KMA found the assumptions to be reasonable and necessary to complete the proposed Project. The resulting estimated development costs are as follows: PropeityAssemb/age Costs The total property assemblage costs are estimated to total $8.91 million, or $206 per square foot of land area as follows: Property Acquisition Costs The Developer acquired the property for $7.48 million on January 11, 2016. According to an appraisal prepared by Pacific Real Estate Appraisal, dated June 27, 2017, the As -Is market value of the property is $8.20 million, which is $795,000 higher than the purchase price. City of Santa Ana HOME Subsidy Layering Review: Santa Ana Arts Collective Page 14 25J-26