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EXHIBIT 3 <br />Judson Brown, City of Santa Ana January 3, 2019 <br />Santa Ana United Methodist Church: Financial Gap Analysis Page 7 <br />Indirect Costs <br />KMA utilized the following assumptions in estimating the indirect costs: <br />1. The architecture, engineering and consulting costs are estimated at 6% of direct <br />costs. <br />2. The Developer estimated the public permits and fees costs at $2.43 million, or <br />approximately $26,000 per unit. City staff should verify the accuracy of this <br />estimate. <br />3. The taxes, insurance, legal and accounting costs are estimated at 1.5% of direct <br />costs. <br />4. There are two external church congregations that utilize space to conduct their <br />ministries in the existing Church buildings. The Developer included a $50,000 <br />allowance to relocate these organizations. <br />5. An approximately $1,000 per unit allowance for marketing and leasing costs is <br />provided. <br />6. The Developer set the Developer Fee at $5.22 million, which is the maximum <br />amount allowed by the California Tax Credit Allocation Committee (TCAC). <br />However, the Developer proposes to defer $300,000 of the Developer Fee. In <br />addition, the Developer proposes to contribute $2.72 million in General Partner <br />equity to the Project. As such, the cash portion of the Developer Fee to be <br />received by the Developer at the completion of construction is $2.20 million. <br />7. An indirect cost contingency allowance equal to 5% of other indirect costs is <br />provided. <br />KMA estimates the total indirect costs at $10.73 million. <br />Financing Costs <br />The Project is proposed to be developed with Tax -Exempt Multifamily Bonds allocated <br />by the CDLAC. To comply with the Internal Revenue Service (IRS) requirements, the <br />Bonds must be equal to at least 50% of the land acquisition costs plus the eligible Tax <br />1812009SA:TRB <br />19090.017.008 <br />80A-27 <br />