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Judson Brown, City of Santa Ana <br />Lacy Street Project: Preliminary Financial Gap Analysis <br />EXHIBIT 2 <br />January 18, 2019 <br />Page 2 <br />KMA <br />Habitat <br />Difference <br />Total Construction Costs $1,189,000 <br />$1,196,000 <br />($7,000) <br />Total Available Revenue 926,000 <br />870,000 <br />56,000 <br />Financial Gap $263,000 <br />$326,000 <br />($63,000) <br />As shown in the preceding table, KMA estimates the Project's financial gap at $263,000. <br />Comparatively, Habitat estimates the Project's financial gap at $326,000. This equates <br />to a $63,000 differential. The differential is primarily due to a difference in the KMA and <br />Habitat "Affordable Sales Price" estimates. <br />The City proposes to provide up to $231,000 in Inclusionary Housing Funds to the <br />Project. This amount is lower than both the financial gap identified by KMA and the <br />dollar amount of Habitat's assistance request. As such, it can be concluded that the <br />proposed City assistance package will not provide a windfall profit to Habitat. <br />It is our understanding that subsequent to the completion of KMA's financial analysis, <br />City staff and Habitat discussed the difference between the demonstrated financial gap <br />and the available City assistance funds. It is our understanding that Habitat has <br />committed to fund any portion of the Project's financial gap amount in excess of the <br />City's $231,000 financial assistance commitment. <br />PROJECT DESCRIPTION <br />Background <br />The Site is located in the French Park Historic District (French Park). Any proposed <br />development is subject to the design guidelines imposed on French Park as well as a <br />review by the French Park Design Committee (Design Committee). In Fall 2018, Habitat <br />met with the Design Committee to discuss the proposed Project, and the Design <br />Committee requested revisions to Habitat's original design. Specifically, the Design <br />Committee and residents of French Park requested that Habitat construct homes that <br />incorporate the historic architectural elements and finishes that are currently present in <br />the neighborhood. In response, Habitat proposes the following: <br />1901009:SA:TRB <br />19090.017.011 <br />