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Judson Brown, City of Santa Ana June 4, 2022 <br />WISEPlace PSH Preliminary Financial Gap Analysis Page 4 <br /> <br /> 2206004.SA.TRB <br /> 19090.018.025 <br /> <br />Tax Credit @ 30% Median / Low HOME 47 <br />Unrestricted Manager’s Unit 1 <br /> Total Units 48 <br /> <br />FINANCIAL GAP ANALYSIS <br />KMA prepared a pro forma analysis to assist in evaluating the Developer’s proposal. The <br />analysis is located at the end of this memorandum, and is organized as follows: <br />Table 1: Estimated Development Costs <br />Table 2: Stabilized Net Operating Income <br />Table 3: Financial Gap Calculation <br />Table 4: Capitalized Operating Subsidy Reserve Analysis <br />Table 5: Cash Flow Analysis <br /> <br />ESTIMATED DEVELOPMENT COSTS (TABLE 1) <br />KMA reviewed the Developer’s development cost estimates, and then independently <br />prepared a pro forma analysis for the Project. The resulting development costs are <br />estimated as follows: <br />Direct Costs <br />The direct cost estimates assume that the Project will be subject to State of California <br />and/or Federal Davis Bacon prevailing wage requirements. The direct costs applied in <br />this analysis are based on estimates provided by the Developer and can be summarized <br />as follows: <br />1. The Developer estimated the off-site improvement costs at $463,000. City staff <br />should verify the scope and cost of the off-site improvements required to serve <br />the Project. <br />EXHIBIT 3