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Judson Brown, City of Santa Ana March 19, 2020 <br />Westview House: Financial Gap Analysis Page 14 <br />Developer Equity <br />TCAC regulations allow the Project to receive a $3.93 million Developer Fee, and the <br />Developer Fee can be included in the Project's eligible Tax Credit basis. Thus, a portion <br />of the Developer Fee is funded by Tax Credit equity. <br />The City is requiring that any amount of the Developer Fee above $2.5 million to be <br />contributed as Developer Equity. This amount is currently estimated at $1.43 million, or <br />36% of the total Developer Fee. The Developer Equity will be repaid through the <br />Developer's share of residual receipts or upon the sale/transfer of the Project after the <br />City Loans are repaid in full. The Developer Equity will not be secured by a promissory <br />note. <br />Total Available Outside Funding Sources <br />As shown in Table 3, the outside funding sources available to the Project are estimated <br />at $35.13 million, which is approximately equal to the Developer's estimate. <br />Financial Gap Calculation <br />Based on the preceding analysis, KMA estimates the Project's financial gap as follows: <br />Total Development Costs $39,020,000 <br />(Less) Total Available Funding Sources (35,125,000) <br />Financial Gap $3,895,000 <br />Per Unit $45,800 <br />As shown in the preceding table, KMA estimates that the Project exhibits a $3,895,000 <br />financial gap based on the information currently available. In contrast, the Developer is <br />requesting $3,904,000 in financial assistance from the City This represents a $9,000 <br />differential, which is a less than 1% difference. It is the KMA opinion that a difference of <br />this magnitude can be considered insignificant. <br />2003012:SA:TRB <br />60 B Q 19090.017.022 <br />