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Judson Brown, City of Santa Ana February 21, 2019 <br />Budget Inn: Preliminary Financial Gap Analysis Page 2 <br />EXECUTIVE SUMMARY <br />Estimated Financial Gap <br />The results of the KMA financial gap analysis are compared to the Developer's financial <br />proposal in the following table: <br />KMA <br />Developer <br />Difference <br />Total Development Costs $29,745,000 <br />$29,761,000 <br />($16,000) <br />Outside Funding Sources (28,075,000) <br />(28,074,000) <br />1,000 <br />Financial Gap $1,670,000 <br />$1,687,000 <br />($17,000) <br />As shown in the preceding table, KMA estimates the Project's financial gap at $1.67 <br />million. Comparatively, the Developer is requesting $1.69 million in financial assistance <br />from the City. This differential can be considered inconsequential. However, it is <br />important to note that the KMA and Developer estimates differ on a line item by line <br />item basis. In addition, KMA has concerns regarding the proposed social services <br />budget. <br />Proposed Funding Sources <br />The following summarizes the proposed funding sources for the Project: <br />1. <br />2. <br />3. <br />4. <br />KMA estimates that the Project's net operating income (NOI) can support a <br />$6.40 million permanent loan. <br />The Developer is proposing to apply for 9% Federal Low Income Housing Tax <br />Credits (Tax Credits) that are competitively awarded by the California Tax Credit <br />Allocation Committee (TCAC). The net Tax Credit proceeds are estimated at <br />$15.59 million. <br />The Developer is proposing to apply for a $1.50 million loan from the Orange <br />County Community Foundation (OCCF). <br />The Developer is proposing to apply for a loan of $3.56 million from the Veterans <br />Housing and Homelessness Prevention Program (VHHP). <br />1902016.SA.TRB <br />80B-20 19090.017.009 <br />