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Judson Brown, City of Santa Ana <br />EXHIBIT 5 <br />November 8, 2018 <br />Cornerstone Apartments Rehabilitation Analysis Page 8 <br />a. To comply with IRS timing regulations, 100% of the Project's cash flow <br />after payment of operating expenses and Bond debt service will need to <br />be allocated to repaying the deferred Developer Fee. <br />b. The payment of Limited Partner asset management fees should <br />terminate at the end of 15 years. <br />C. The repayment of the seller carryback loan should not be treated as a <br />Project cost. Instead, the repayment should be derived solely from JHC's <br />50% share of the Project's residual receipts. <br />5. It is anticipated that the residual receipts payments generated by the Project will <br />be insufficient to cover the 3% simple interest obligation currently imposed on <br />the City Loans. This will likely result in a large balloon payment obligation at the <br />end of the term. It may be advisable to consider reducing the interest rate that <br />is imposed on the City Loans to mitigate this financial burden. <br />1810020.SNA:KHH <br />19190.017.003 <br />FO • <br />