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Judson Brown, City of Santa Ana
<br />May 12, 2017
<br />First Street Apartments Financial Feasibility
<br />Page 3 of 7
<br />Understanding this clearly should assist the City in understanding the ultimate purpose of its funds and
<br />therefore, the amount it is willing to provide in order to achieve the desired outcome. (In order to cause
<br />a winner among perfectly scoring projects, CTCAC institutes a "tie-breaker" that largely relies on public
<br />subsidy to determine winners. Le., the more public subsidy, the more likely a project to "win" the tie-
<br />breaker.)
<br />In order to achieve the foregoing, the analysis proceeds as follows
<br />• Side-by-side comparison of the Developer's sources and uses budget with a "Base Budget"
<br />constructed by CSG, with explanation of variances.
<br />• Building upon the CSG Base Budget, comparison of the Developer's sources and use budget
<br />with a CSG -constructed budget including deferred developer fee.
<br />Each of the above maintains the same tie-breaker score (44.7%) targeted by the Developer.
<br />We then provide three financing scenarios, starting from no City financing, and the resulting tie-breaker
<br />score, and two additional scenarios with increasing higher tie-breaker scores and the resulting City funds
<br />necessary to achieve them.
<br />Table 3, below, provides a consolidated form of the Developer's budget compared to the CSG "Base
<br />Budget" showing modifications proposed by CSG. In creating this analysis and variance, we have used
<br />the Developer's assumptions (except as noted) and modeled the Project using the CTCAC application
<br />form applicable to the upcoming application round.
<br />Table 3: Variance Analysis of Developer's Budget to CSG "Base Budget"
<br />USES
<br />Budget Item
<br />Developer
<br />CSG
<br />Variance
<br />Explanation of Variance
<br />Total Land Cost
<br />$4,894,375
<br />$4,894,375
<br />$0
<br />Total Acquisition Cost
<br />$98,039
<br />$98,039
<br />$0
<br />Predevelopment Interest/Holding
<br />Cost
<br />$826,991
<br />$826,991
<br />$0
<br />See Discussion, below
<br />Site Remediation
<br />$175,000
<br />$175,000
<br />$0
<br />Relocation Expenses
<br />$955,161
<br />$955,161
<br />$0
<br />See Discussion, below
<br />Total New Construction Costs
<br />$13,683,815
<br />$13,683,815
<br />$0
<br />See Discussion, below
<br />Total Architectural Costs
<br />$520,550
<br />$520,550
<br />$0
<br />_
<br />Total Survey and Engineering
<br />$1,130,140
<br />$1,130,140
<br />$0
<br />Construction Loan Interest
<br />$1,017,061
<br />$675,955
<br />($341,106)
<br />See Discussion, below
<br />Construction Loan
<br />Origination Fee
<br />$193,857
<br />$130,392
<br />($63,465)
<br />0.75% commitment Fee per chase letter
<br />Other Construction Interest and Fees
<br />$442,398
<br />$442,398
<br />$0
<br />Permanent Origination Fee
<br />$65,600
<br />$0
<br />($65,600)
<br />No Commitment Fee per Chase letter
<br />Other Permanent Financing Costs
<br />$45,000
<br />$45,000
<br />$0
<br />Total Attorney Costs
<br />$225,000
<br />$225,000
<br />$0
<br />Total Reserve Costs
<br />$214,053
<br />$214,053
<br />($0)
<br />Total Appraisal Costs
<br />$15,000
<br />$15,000
<br />$0
<br />Total Contingency Costs
<br />$716,593
<br />$716,593
<br />$0
<br />CSG Iadvisors SAN FRANCISCO•A m.A TLL PAP'd • LOS ANGELES NEW YORK
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