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EXHIBIT 3 <br />Judson Brown, City of Santa Ana January 9, 2019 <br />Francis Xavier Residence: Preliminary Financial Gap Analysis Page 10 <br />Deferred Developer Fee <br />The Developer is proposing to defer $365,000, or 73% of the Developer Fee that is <br />included in the Project's construction costs. The deferred amount will be repaid from <br />the cash flow generated by the Project over time. <br />Total Available Outside Funding Sources <br />As shown in Table 3, the outside funding sources available to the Project are estimated <br />at $3.16 million. <br />Financial Gap Calculation <br />Based on the preceding analysis, KMA estimates the Project's financial gap as follows: <br />Total Construction Costs $4,195,000 <br />(Less) Total Available Funding Sources (3,164,000) <br />Financial Gap $1,031,000 <br />Per Unit $85,900 <br />As shown in the preceding analysis, KMA estimates that the Project exhibits a $1.03 <br />million financial gap. In contrast, the Developer is requesting $1.07 million in financial <br />assistance from the Authority. This represents a $39,000 differential, which is an <br />approximately 1% difference. It is the KMA opinion that a difference of this magnitude <br />can be considered insignificant. <br />CONCLUSIONS / ISSUES FOR CONSIDERATION <br />The following summarizes the conclusions of the KMA analysis: <br />1. Based on the currently available information, it is KMA's conclusion that the <br />Project exhibits a $1.03 million financial gap, which is approximately equal to the <br />Developer's $1.07 million financial assistance request. As such, KMA concludes <br />that the Developer's request is warranted by the Project's economics. <br />1901007:SA:TRB <br />19090.017.010 <br />3-27 <br />