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Judson Brown, City of Santa Ana June 4, 2022 <br />WISEPlace PSH Preliminary Financial Gap Analysis Page 6 <br /> <br /> 2206004.SA.TRB <br /> 19090.018.025 <br /> <br />Prior to formally committing any funds, the City should review the general contractor’s <br />contract to confirm the validity of the cost estimates used in this analysis. If the costs <br />identified in the general contractor’s contract differ from the estimates used in this <br />analysis, this analysis may need to be updated accordingly. <br />Indirect Costs <br />1. The architecture, engineering and consulting costs are estimated at 7% of direct <br />costs <br />2. The Developer estimates the public permits and fees costs at $1.49 million, or <br />approximately $31,000 per unit. City staff should verify the accuracy of this <br />estimate. <br />3. The taxes, insurance, legal and accounting costs are estimated at 3% of direct <br />costs. <br />4. The Developer included an $85,000 allowance for relocation costs in the <br />development budget. <br />5. An approximately $2,700 per unit allowance for marketing and leasing costs is <br />provided. <br />6. The Developer Fee is set at $2.20 million, which is the maximum amount allowed <br />to be included in the Project by TCAC. <br />7. An indirect cost contingency allowance equal to 10% of other indirect costs is <br />provided. <br />KMA estimates the total indirect costs at $6.25 million. <br />Financing Costs <br />The financing costs for the Project are estimated as follows: <br />1. The construction period and absorption period interest costs are estimated at <br />$1.16 million. This estimate is based on the following assumptions: <br />a. A $16.58 million construction loan; <br />EXHIBIT 3