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Judson Brown, City of Santa Ana March 1, 2017 <br />Santa Ana Arts Collective: Financial Gap Analysis Page 2 <br />Additional Financial Assistance Request <br />Between 2015 and the present, a number of factors created an additional financial gap. The <br />Developer estimates this gap at $3.49 million. If the City fills this increased gap, the City's total <br />financial assistance would be increased to $8.13 million.' <br />The Developer is currently pursuing to options for obtaining increased outside funding. If they <br />are successful, the unfunded gap will be eliminated. If additional outside funding cannot be <br />obtained, at a minimum, KMA recommends that the City require the Developer to defer or forgo <br />$600,000 of the $2.0 million Developer Fee that is included in the Project budget. This would <br />decrease the Project's unfunded financial gap to approximately $2.90 million. In that case, the <br />City's total financial assistance would equal approximately $7.54 million. <br />BACKGROUND <br />Outside Funding Sources <br />The following outside funding sources are proposed to be used to finance the Project: <br />1. A conventional permanent loan; <br />2. The Federal 9% Low Income Housing Tax Credits (9% Tax Credits) that are competitively <br />awarded by the California Tax Credit Allocation Committee (TCAC); and <br />3. Funding from multiple programs within the Affordable Housing and Sustainable <br />Communities Program (AHSC) administered by the California Department of Housing <br />and Community Development (HCD). <br />Reasons for Additional Financial Assistance Request <br />The Developer provided the following primary reasons for the unfunded financial gap: <br />Development Cost Increases <br />The total development costs in the Developer's Fall 2015 proposal were estimated at $26.56 <br />million. The Developer is currently estimating the total development costs at $34.18 million, <br />' It is our understanding that the City has not determined the specific breakdown of City funds <br />that would be utilized to fulfill the Developer's financial assistance request. <br />1703001:SNA:TRB <br />19090.014.007 <br />65A-18 <br />