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KMA has recommended that Meta forgo at least $600K in developer fee to help close the financial gap, which while <br />onerous, we can still live with. <br />CSG has recommended that Meta forgo $1,269,942 of its developer fee via a $269,942 fee deferral and a $1M GP <br />contribution. This $1M contribution would need to be taken as income and taxed, further reducing the actual net <br />developer fee received to only about $380K (a total deferral of $1,620,000). In short, Meta's financial upside for nearly <br />five years of work and incredible construction risk would be limited to $380K, which does not even cover overhead. <br />Additionally and perhaps more importantly, developer fee, specifically un -deferred developer fee, is viewed by the <br />lenders and investors as Project Contingency and necessary to avoid capital shortfalls that could inhibit construction <br />completion. In other words, under the KMA option, lenders and investors can rely upon Meta's un -deferred developer <br />fee to cover $1.4 million in unanticipated cost increases. Under the CSG option, they would only see $380K in net <br />developer fee to cover unanticipated cost increases, which is insufficient for their underwriting. <br />In summary, we respectfully request that the City Council elects to move forward with KMA's suggested financial <br />assistance of $2.9 million, with a minimum deferred developer fee of $600K. We are prepared to shoulder $600K of the <br />gap, but anything further leaves us unable to cover 5 years of our own internal costs and the financial risks of <br />guaranteeing completion of a $34M project. <br />We remain hopeful that we can continue moving forward in partnership with the City on this exciting and innovative <br />project. Thank you again for your time and consideration. <br />Chris <br />Christopher Maffris, Senior Vice President <br />META HOUSING CORPORATION <br />1640 Sepulveda Blvd., Suite 425 <br />Los Angeles, CA 90025 <br />T. (310) 575-3543 ext. 108 <br />F. (310) 575-3563 <br />Email: cmaffris@metahousins.com <br />Website: www.metahousing.com <br />This email and any files or attachments transmitted with it may contain privileged or otherwise confidential <br />information. If you are not the intended recipient, or believe that you may have received this communication in <br />error, please advise the sender via reply email and immediately delete the email you received. <br />65A-78 <br />