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Judson Brown, City of Santa Ana
<br />May 9, 2017
<br />Santa Ana Arts Collective Financial Feasibility
<br />Page 3 of 5
<br />Table 2: Variance Analysis of Developer's Budget (Cont.)
<br />Budget Item Developer CSG Variance Explanation of Variance
<br />Developer has provided documentation
<br />supporting $1,486,811 of Relocation costs,
<br />rather than the $1,610,00 included in the
<br />budget. We have therefore reduced the
<br />Total Other Costs
<br />$4,488,627
<br />$4,365,438
<br />($123,189) Relocation by the difference (i.e., $123,189)
<br />Subtotal Development Costs
<br />$32,178,764
<br />$32,061,736
<br />($117,028)
<br />Developer Overhead/Profit
<br />$2000000
<br />$2000000
<br />$0
<br />Total Project Cost
<br />$34,178,764
<br />$34,461,736
<br />1 _
<br />SOURCES
<br />CCRC
<br />City of Santa Ana
<br />AHSC
<br />AHSC
<br />AHSC
<br />Deferred Developer Fee
<br />GP Capital Contribution
<br />Federal Tax Credit Equity
<br />Total Sources
<br />FINANCING GAP
<br />Discussion of Table 1
<br />Increase loan amount assuming 2017 CTCAC
<br />rents and underwriting rate of 5.65%
<br />$2,093,389 $2,709,532 $616,143 (consistent with CCRC termsheet)
<br />$4635,000 $4,635,000 $0
<br />$22,500 $22,500 $0
<br />$1,288,000 $1,288,000 $0
<br />$4,944,130 $4,944,130 $0_-_-. _.
<br />Correction of deferred fee to net present
<br />value of maximum 15 -year cash flow
<br />available after asset and partnership
<br />$3,491,484 $269,942 ($3,221,542) management fees.
<br />(Proposed) GP Contribution required to net
<br />$0 $1,000,000 $1,000,000 $1 M Developer Fee
<br />Federal Equity reflects $0.989 net pricing per
<br />$17.704.254 $17,711.417 1711Q developer
<br />$34,178,757 $32,580,522 ($1,364,180)
<br />($7) .(.$1,481;215)
<br />The "Uses" portion of Table 1 shows the Developer's budget, contrasted with necessary modifications
<br />proposed by CSG.
<br />• Total Permanent Financing Costs: The Developer's budget reflects origination fee of 1% (per CCRC
<br />term sheet) of a permanent loan amount of $2,093,389. We have adjusted the fee to reflect a loan
<br />amount of $2,709,532 (reflecting higher 2017 restricted rents as published by CTCAC). The loan
<br />amount reflects:
<br />➢
<br />Effective Gross Rents
<br />$653,243 (per Developer unit mix, 2017 CTCAC rents, and 5% vacancy)
<br />➢
<br />Operating Expenses and Reserves
<br />($424,875)
<br />➢
<br />Net Cash Flow
<br />$22$368
<br />➢
<br />DSCR
<br />1.15 (per CCRC commitment letter)
<br />➢
<br />Cash Flow Available to Support
<br />$198,581
<br />Debt
<br />CSG Iadvlsm
<br />SAN FRANCISCO6
<br />AjLA31 LOS ANGELES NEW YORK
<br />5
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