Laserfiche WebLink
Judson Brown, City of Santa Ana March 1, 2017 <br />Santa Ana Arts Collective: Financial Gap Analysis Page 9 <br />Indirect Costs <br />KMA utilized the following assumptions in estimating the indirect costs: <br />1. The architecture, engineering and consulting costs are estimated at 10% of direct costs. <br />2. The Developer estimated the public permits and fees costs at $1.40 million, or $24,080 <br />per unit. City staff should verify the accuracy of this estimate. <br />3. The taxes, insurance, legal and accounting costs are estimated at 3% of direct costs. <br />4. An approximately $1,000 per unit allowance for marketing and leasing costs is provided. <br />5. The Developer Fee is set at $2.0 million, which is the maximum amount allowed for the <br />Project by TCAC. <br />6. An indirect cost contingency allowance equal to 5% of other indirect costs is provided. <br />KMA estimates the total indirect costs at $5.99 million. <br />Financing Costs <br />The financing costs for the Project are estimated as follows: <br />1. The Developer estimates the interest costs for the acquisition / predevelopment loan at <br />$617,000. This estimate is based on a $6.04 million loan amount, a 15 -month <br />predevelopment period, an 18 -month construction period, and a 5% interest rate. <br />2. The interest costs on the construction loan are estimated at $855,000. These costs are <br />based on the following assumptions: <br />a. The construction period interest costs are based on a 3.52% interest rate, an 18 - <br />month construction period, and a 60% average outstanding balance. <br />b. The absorption period interest costs are based on a three-month absorption <br />period and a 100% average outstanding balance. <br />The financing fees are estimated at $349,000, and are based on 1.50 points for the <br />construction and permanent loans. <br />1703001:SNA:TRB <br />65A-25 19090.014.007 <br />