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Judson Brown, City of Santa Ana <br />Westview House: Financial Gap Analysis <br />March 19, 2020 <br />Page 16 <br />The following summarizes the maximum HOME subsidy that can made to the Project <br />based on nine total HOME units: <br />Maximum HOME Minimum HOME <br />Assistance Designated Units <br />Proposed HOME Assistance $2,003,705 N/A <br />Cost Allocation Test $3,665,241 9 Units <br />Maximum Subsidy Test $2,128,449 9 Units <br />Maximum Allowable HOME Subsidy $2,003,705 9 Units <br />CONCLUSIONS / RECOMMENDATIONS <br />The following summarizes the conclusions and recommendations of the KMA analysis: <br />1. Based on the currently available information, it is KMA's conclusion that the <br />Developer's request for $3.90 million in City assistance is supported by the <br />Project economics. <br />2. $400,000 of the City's financial assistance will be set -aside as a City -controlled <br />contingency allowance. The City must approve any disbursements from this <br />contingency allowance. Any funds remaining in the contingency allowance at <br />the end of construction may be utilized for project amenities and/or community <br />benefits at the City's sole discretion. <br />3. The City is requiring that any amount of the Developer Fee above $2.5 million to <br />be contributed as Developer Equity. This amount is currently estimated at $1.43 <br />million, or 36%of the total Developer Fee. The Developer Equity should have <br />the following terms: <br />a. The Developer Equity will not be secured by a promissory note; <br />b. The Developer Equity may only be repaid from the Developer's share of <br />the Project's residual receipts; and <br />C. Any portion of the Developer Equity that is not repaid from the <br />Developer's share of the Project's residual receipts may only be repaid <br />2003012:SA:TRB <br />60 B-30 19090.017.022 <br />