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CSG Advisors Incorporated January 28, 2015 Proposal: Housing Fin racial Analytical and Advisory Services Page 7 of 25 not for developments with no programmatic market equivalent e.g., special needs, etc.). This analysis establishes a ceiling that represents the maximum amount required to subsidize affordability - preventing the City from subsidizing basic project feasibility (this counters the occasional efforts of developers to use public agency funds to subsidize an otherwise infeasible project under the guise of subsidizing affordability). The maximum subsidy thus is equivalent to the ceiling, less certain expected sources (e.g., low income housing tax credits). We do this work to help public agencies such as the City determine how much to assist a project. The expertise we bring is demonstrated by the even more extensive modeling we have to do for those public agencies (such as housing authorities) who act as their own developer on 4% and 9% tax credit projects. We assist in the formulation of (and perform 'analyses of) the development program, including affordability, rent structure; proposed financial structure and relevant restrictions; develop and maintain the development pro formats and cashflow analyses; develop the bond and financial structure solicit, select and negotiate with lenders /credit enhancers;' identify and coordinate application for financing sources (including low income housing tax credits, tax - exempt bonds, Multifamily Housing Program funds (in California), AHP, etc.). We also solicit and negotiate with tax < credit investors. Agencies for which we have provided these types of services include the New York City Housing Authority, Housing Authority of the County of Monterey, the Housing Authority of the City of Oakland, the San Francisco Housing Authority, and the Housing Authority of the City of New Orleans, among others. This type of work enables to us remain fully abreast of market conditions that have a practical impact on project feasibility as well as providing practical knowledge of developer goals and incentives. Example: Santa Monica Civic Center Housing. CSG assisted the City of Santa Monica in developing a financing plan for the Civic Center housing developments. Understanding the financial feasibility of the projects helped Santa Monica structure the best possible deal with the third -party developer(s) that will execute the projects and to understand the likely amount of subsidy that will be required, the tradeoffs between affordability and subsidy levels, and the types of financing the developer is likely to need. Developers need this type of information before responding to an RFO/RFP in order to provide substantive proposals. In Our work we met with Agency staff to review the goals for the project and constraints. We explored issues such as affordability targets, rent levels for market and affordable units, commercial space feasibility, construction cost limits in the tax credit program, phasing and timing issues, competitiveness for 9% credit awards, and differences between financings using 9% tax credits and those using bonds and 4% tax credits. This work resulted in a comprehensive Financial planning model for the Civic Center housing developments. Using this model, we worked with Agency staff to evaluate financing scenarios and develop a "base case" for the financing. We then assisted in the review of proposals and negotiations with the selected developer. Responses to the Foreclosure Crisis- CSG helped design the Neighborhood Stabilization Program initiatives for the City of Los Angeles, Los Angeles County, Orange County Housing Authority, the City of Phoenix and numerous other communities. In the example of Phoenix, we helped utilize a significant portion of NSP funds for the City to help acquire and rehabilitate large troubled multi- family projects insured by FHA. We thus helped the City negotiate the discounted purchase of a 500 -unit property with 50% vacancy, using NSP funds for the rehabilitation work.