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November 21, 2016 with 3312 W. First Street, LLC, a third -party owner, to purchase the Site for <br />$4,400,000. According to an appraisal prepared by Lea & Company, dated February 7, 2017, <br />the fair market value of the Site was set at $4,940,000. On January 10, 2018, the Developer <br />closed escrow on the Site with the assistance of a $4,400,000 acquisition loan from Century <br />Housing Corporation. <br />Given that the purchase price was approximately 11% lower than the appraised value, KMA <br />concludes that the purchase price of $4,400,000 for the Site is reasonable. <br />Direct Casts <br />The direct cost estimates assume that the Project will be subject to both federal and state <br />prevailing wage requirements. The direct costs are estimated at $17,275,000, or $227,300 per <br />unit and $255 per square foot of GBA. <br />1. Onsite costs are estimated at $1.28 million, or $19 per square foot of land area. <br />2. Building construction costs are estimated at $12.98 million , or $209 per square foot of <br />GBA. This cost estimate is on the high side of the typical range. However, it considers <br />the smaller units, meeting GreenPoint standards, and installation of solar hot water and <br />PV energy generation. <br />3. Furnishings, fixtures and equipment are estimated at $439,000, or $5,800 per unit. <br />4. The general conditions and contractor fees are estimated at 10% of construction costs, <br />which is lower than the maximum 14% allowed by TCAC and within the typical 10-12% <br />allowance. The Developer plans to use Quality Development and Construction, Inc., a <br />related party, as the Contractor for the Project. <br />5. Construction insurance is estimated at 2% of construction costs. <br />6. A 5% contingency allowance is provided. <br />KMA concludes that the proposed direct costs are reasonable and necessary for the <br />construction of the Project per the proposed scope of work. <br />Indirect Costs <br />KMA and Developer utilized the following assumptions for the indirect costs: <br />1. Architecture, engineering and consulting costs are estimated at 8% of direct costs, or <br />$1,305,000. <br />2. Developer estimated the public permits and fees costs at $1,271,000, or $16,700 per <br />unit. <br />City of Santa Ana Underwriting & Subsidy Layering Review: Veteran's Village Page 15 <br />25B-39 <br />