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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 4 <br />8. The Project's units are targeted towards homeless veterans and homeless <br />individuals. <br />FINANCIAL GAP ANALYSIS <br />KMA prepared a pro forma analysis to estimate the Project's financial gap. The analysis <br />is located at the end of this memorandum, and is organized as follows: <br />Table 1: Estimated Construction Costs <br />Table 2: Stabilized Net Operating Income <br />Table 3: Financial Gap Calculation <br />Estimated Construction Costs (Table 1) <br />KMA reviewed the Developer's January 9, 2019 pro forma and then independently <br />prepared a pro forma analysis of the Project. The resulting construction costs are as <br />follows: <br />Direct Costs <br />The direct costs assume that the Project will not be subject to State of California and/or <br />Federal Davis Bacon prevailing wage requirements. The direct costs applied in this <br />analysis can be summarized as follows: <br />1. The on-site improvement costs are estimated at $15 per square foot of land <br />area, or $225,000. <br />2. The residential building costs are estimated at $130 per square foot of GBA, <br />which equates to $1.92 million. <br />3. A $50,000 allowance for furnishings, fixtures and equipment is provided. <br />4. The contractor costs are estimated as follows: <br />a. A 12% allowance for contractors' fees and general requirements is <br />provided. <br />1901007:SA:TRB <br />19090.017.010 <br />3-21 <br />