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Judson Brown, City of Santa Ana <br />EXHIBIT 3 <br />January 3, 2019 <br />Santa Ana United Methodist Church: Financial Gap Analysis Page 15 <br />4. While the construction costs appear reasonable, they are at the low end of the <br />range currently being seen for similar projects in the Southern California region. <br />As such, KMA recommends that the City require the Developer to obtain three <br />general contractor bids prior to selecting a general contractor. The three bids <br />should be provided to the City for review and approval. <br />5. The Developer proposes to receive a $5.22 million Developer Fee for the Project, <br />which is the maximum amount allowed by the California Tax Credit Allocation <br />Committee (TCAC). However, the Developer proposes to defer $300,000 of the <br />Developer Fee. In addition, the Developer proposes to contribute $2.72 million <br />in General Partner equity to the Project. As such, the cash portion of the <br />Developer Fee to be received by the Developer at the completion of construction <br />is $2.20 million. The City should ensure that the cash Developer Fee component <br />is in line with similar affordable housing projects developed in partnership with <br />the City. <br />6. As noted above, the Developer proposes to contribute $2.72 million of the <br />Developer Fee to the Project as Developer Equity. The City should ensure that <br />the following repayment terms are applied to the Developer Equity: <br />a. The Developer Equity can only be repaid via the Project's cash flow <br />through the Developer's share of residual receipts; <br />b. The Developer Equity will not be secured by a promissory note; and <br />C. The Developer Equity can only be repaid upon sale/transfer of the Project <br />after the City's financial assistance is repaid in full. <br />1812009:SA:TRB <br />19090.017.008 <br />FO ' <br />