25J - AGMT ARTS COLLECTIVE GRANT

Home Browse Search

1. Architecture, engineering and consulting costs are estimated at 16% of direct costs, or $2.86 million. This estimate is higher than typical due to the complex nature of designing and engineering an adaptive reuse project. 2. The Developer estimated the public permits and fees costs at $1.64 million, or $28,200 per unit. 3. The taxes, insurance, legal and accounting costs are estimated at 3% of direct costs, or $537,000. 4. The marketing and leasing budget equates to $140,000, or $2,400 per unit. 5. The Developer Fee is set at $2.0 million, which is the maximum amount allowed by TCAC. 6. A 2% indirect cost contingency allowance is provided.° KMA estimates the total indirect costs at $7.32 million, which are reasonable and necessary for the development of the Project. financing Costs The financing costs for the Project are estimated as follows: 1. The Developer included $206,000 in property carrying costs. 2. The interest costs on the construction loan are estimated at $995,000. These costs are based on the following assumptions a 4.86% interest rate, a 21 -month development period, and a 55% average outstanding balance 3. The financing costs are estimated at $318,000 and are based on 1.25 points for the construction loan and 1.50 points for the permanent loan. 4. A $162,000 capitalized operating reserve is provided. This equates to three months of operating expenses and debt service payments on the permanent loan supported by the Project's income. 5. The Tax Credit fees are estimated at $97,000 based on the following: a. A $2,000 application fee; b. A $410 per unit monitoring fee; and 4 A 5% indirect cost contingency allowance would be more typical for underwriting purposes. However, given that the Project is already under construction, KMA reduced the indirect cost contingency allowance amount. City of Santa Ana HOME Subsidy Layering Review: Santa Ana Arts Collective Page 16 25J-28