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Lower San Antonio District Oakland Historic Landmark 3 acre site, 6 buildings Buildings range in condition from decent to dilapidated
St. Josephs Court
2005 Stanford Housing Team Bank of America Low-Income Housing Challenge
Build Community
Develop with Environment in Mind
AGENDA
Site Location & Community Overview Site Design Community Support & Services Financing Residential & Commercial
75%
50%
25%
0% '90 '00 '90 '00 '90 '00 '90 '00 '90 '00
Oakland
Alameda County
California
USA
54,000
22,000
20,000 10,000 0 Units Needed Units Available
AGENDA
Site Location & Community Overview Site Design Community Support & Services Financing Residential & Commercial
2/F:
G/F:
A. North Elevation
B. East Elevation
Public
St. Joseph Site Bank Gas Stations Supermarket/ Large Convenience Store Pharmacy Post Office Restaurant
St. Josephs Place is situated on a key transit corridor connecting the greater Bay Area
AGENDA
Site Location & Community Overview Site Design Community Support & Services Financing Residential
$1,475
$912
St. Joseph's Affordability Mix Average = 38% AMI 10 9 50% AMI 30% AMI 35% AMI 40% AMI 17 27
$676
$600
$400 $200 $0 1 Bd: 2 Bd: 3 Bd: LSA Median
$20.9 MM
$0.85 MM $1.56 MM
$20.9 MM
$0.91 MM $2.12 MM
Financing Costs Land Costs
$5.22 MM
$4.79 MM
Soft Costs
City of Oakland
$5.31 MM
$13.06 MM
4% tax credits
Hard Costs
$7.50 MM
Sources
Uses
AGENDA
Site Location & Community Overview Site Design Community Support & Services Financing Commercial
$9.7 MM
Op. Inc. $0.6 MM HRTC $0.5 MM Equity Partners $2.0 MM LISC $0.7 MM
Loans
$1.50
$1.34
Stabilized in 3rd year post-rehab Anticipate rise in vacancy in first year Cash back through increased TIs Reduce disparity in rents
Repositioned commercial assets offer attractive investment opportunity and will have positive impact on community
$2,500,000
$2.1 MM
$2,000,000
$1,500,000
$1.3 MM
NMTC
$1,000,000
Relatively small tax incentive 20% of rehab costs Discounted to $0.90 on the dollar Preferred distribution of 3% CFAF
New Markets Tax Credits
$0.3 MM
$500,000
$0.5 MM
HRTC
Allocation uncertain at time of proposal 39% of equity investment Discounted to $0.52 on the dollar Preferred distribution negotiable (6-12%)
Rent PSF/Month
$1.50 $1.40 $1.30 $1.20 $1.10 $1.00 $0.90 $0.80 $0.70 Com m ercial Non-Profit Medical
Com m ercial
Non-Profit
Medical
Number of Leases
14 12
Rent PSF/Month
Commercial
Non-Profit
Medical
14 12 10 8 6 4 2 0
2005
2006 Month to Month Month to Month 2005 Month to Month
Commercial
Non-Profit
Medical
HRTC Certification
Technical State Historic assistance Preservation Office
Soft Costs
Property Owner
Renovation of historic property
$0.6M 20%
equity
credits
Limited Partnership
equity
Hard Costs
$0.5M 90%
Equity
credits
credits claimed
$0
Equity Investor
IRS
Basis
Allocation
CDFI Fund
Technical assistance
Investors
equity credits
credits
Equity Investors
Developer
Commercial Lenders
US Treasury
Master Lease
FINANCIAL PERFORMANCE
Leveraged Internal Rate of Return. 18% Unleveraged Internal Rate of Return. 12% Internal Rate of Return on $1M Equity Investment 14% Minimum DCR on First Mortgage.. 1.37 Ten Year Sale/Refinance Value (10.5% cap rate)... $12.2 M Net Present Value (11% discount rate) .... $1.7 M
St. Josephs Court commercial development is an attractive investment opportunity that exceeds expected returns and financial metrics while benefiting the local community
LOAN TERMS
$2,124,175 $8,300,400 $703,440 $1,372,500 $385,120 $538,073 $225,991 $854,648 $683,731 $1,186,525 $732,555 $1,058,257 $233,227 $1,400,000 $217,598 $638,712 $20,654,951
Total
$20,654,951
CONSTRUCTION FINANCING
Tax-Exempt Construction Loan (Wells Fargo) Oakland Redevelopment Agency AHP Loan TOTAL $13,210,173 $5,308,005 $409,500 $18,927,678
FIGURE 5: Construction Loan Loan Terms Loan Term Interest Rate Draw Down Loan Fees Amount Construction Period Interest Fees Loan Available for Construction Costs Test: 50% of project costs are funded with tax exempt bonds Tax-Exempt Construction Loan 24 4.48% 0.55 0.70% 732,372 92,471 13,210,173 65.22%
Ratio Tests for Construction Loan First Mortgage 1,563,884 Tax Credits 7,502,057 St. Josephs Court Oakland CityStanford Housing Team Bank of America Low-Income Housing Challenge Tax Increment 5,308,005 2005
Total Acquisition Price Total Site area (SF) Current comparable land cost in Oakland (per sf) Total Land Value Land Cost Allocation to Commercial Land Cost Allocation to Affordable Value of buildings (acquisition cost less land value) Total Building Square feet SF allocated to Commercial SF Allocated to Affordable / res (including demolition) Building cost allocated to commercial Building cost allocated Affordable/res Total Cost Allocated to Commercial Total Cost Allocated to Affordable/res Total
91% 9%
$8,000,000
MHP SCORECARD
MHP Score Card - Summary
Section 7320 (b) (1)-(7) of the MHP Regulation
SECTION
Extent Project Serves Households at the Lowest Income Levels (1) Maximum 35 Extent Project Addresses the Most Serious Identified Housing Needs (2) Maximum 15 Development and Ownership Experience of the Project Sponsor (3) Maximum 20 Percentage of Units for Families or Special Needs Population and "At-Risk" Rental Housing Developments (4) Maximum 35 Leverage of Other Funds (5) Maximum 20 Project Readiness (6) Maximum 15 Adaptive Reuse, Infill, or Proximity to Site Amenity (7) Maximum 10
Self Score 35 15 20
35
20 15 10
Scoring Factor
0.75 1.0 35
20 14
MHP Exhibit 2 Total Number of Project Units (include the manager's unit) B Unit Size or Designation 2 Bedroom 3+ Bedroom Total Point Award (maximum 35) C D E Scoring Factor 0.2 0.7
Number of % Of Total Project Units in this Units in this Category Category 28 25 43.75% 39.06%
MHP Exhibit 3 A Permanent Non MHP Funding Amount (Exclude other funds to be used with the NSSS funds) $15,667,744 D. MHP Funds Requested Non-Rural Projects B % of Total Non-MHP Funding Amount Attributable to 1, 2 Restricted Units 100% Exclude NSSS funding Point Award
C Dollar Amount of Permanent NonMHP Funds Attributable to Restricted Units (A X B) $15,667,744 $5,222,581
C divided by D (as a percentage) less 100 divided by 5, rounded down to the next whole number, x 0.5 will equal the point award, to a maximum of 20 points
20
Total Redevelopment Agency Funds Actual % of development costs funded Interest (soft loan) Loan Fees (%) Loan Fees
NOI
Affordable Housing Program (AHP) Maximum AHP Loan Interest rate AHP Loan/Unit During Lease-Up Eligible AHP Units Captures NOI before debt service from permanent Total AHP Loan Requested NOI During Leasup Year 1 NOI Months of pre-interest NOI Total NOI During Leasup
147,195 3 36,799
First Mortgage Info Wells Fargo: 1st Mortgage: Tax Exempt Private Activity Bonds $1.6 M 30 Years, 5.7% (10 Year AAA Tax exempt Muni bond index + 1.5%) Required DCR of 1.15
Predevelopment Sources
CalHFA Predevelopment Finance Program - loans up to $250,000 for predevelopment activities with 4% interest required, a 24 month maximum term, and a 1% finance fee charged at closing. Northern California Community Loan Fund (NCCLF) NCCLF has expressed interest in loaning up to $800,000 for St. Josephs predevelopment activities. Terms call for 6-7% fixed rate interest with a loan-to-value maximum of 100%.
AHP SCORECARD
Compares favorably to the rough cutoff of 64 points in the most recent funding round
TCAC 4% SCORECARD
4% Tax Credit Scorecard Sub-Category Points Note 1 6 2 3 3 10 4 17 5 10 6 8 7 72.5 8 20 Max Possible 6 3 10 15 10 8 52 20 124 St. Joseph Points 6 3 10 15 10 8 52 20 124 General Partner Experience Management Company Experience Housing Needs Site Amenities Service Amenities Sustainable Building Methods Lowest Income Readiness to Proceed Total
Notes 1 BRIDGE experience meets requirement 2 BRIDGE experience meets requirement 3 Large family project 4 Transit-oriented development strategy - bear bus stops and BART (7 points) Within .5 mile of a public library (2 points) Site is within .25 mile of convenience store (2 points) Within .25 miles of public schools (3 points) Within .5 miles of medical clinic (3 points) 5 Wired for Internet access and educational classes in community center 6 Project will exceed 15% improvement over Title 24 standards (5 points) Also will have energy efficient appliances, fluorescent light fixtures, and water conserving technologies (3 points) 7 Based on project affordability levels, score of 72.5 on TCAC Lowest Income Table 8 Expect to have full readiness to proceed
Public Funds B General Partner Experience C Management Company Experience D Housing Needs E Site Amenities F Service Amenities G Neighborhood Revitalization H Balanced Communities I Sustainable Building Methods J Lowest Income K Readiness to Proceed L State Credit Substitution Total
3 4 5 6 7 8 9 10 11 12 13 14
TCAC 9% SCORECARD
9% Tax Credit Scorecard A Cost Efficiency Credit Reduction Public Funds B General Partner Experience C Management Company Experience D Housing Needs E Site Amenities F Service Amenities G Neighborhood Revitalization H Balanced Communities I Sustainable Building Methods J Lowest Income K Readiness to Proceed L State Credit Substitution Total Sub-Category Points Max Possible St. Joseph Points Note 20 20 1 13 2 2 3 37 4 5 6 7 8 9 10 11 12 13 14 6 3 10 17 10 9 8 72.5 20 2 6 3 10 15 10 9 8 52 20 2 155 6 3 10 15 10 9 8 52 20 2 155
Notes 1 Total Adjusted Threshold Limit Basis 15,655,454 Project's Total Eligible Basis 17,841,073 Difference (2,185,620) Calculated % below adjusted threshold basis lim -14.0% Points 13 2 2% voluntary credit reduction - 2 points 3 Committed Public Funds AHP 409,500 City of Oakland 7,241,298 Total 7,650,798 % of total development cost 37% Points 37 4 BRIDGE experience meets requirement 5 BRIDGE experience meets requirement Stanford Housing 2005
Notes 1 Total Adjusted Threshold Limit Basis 15,655,454 Project's Total Eligible Basis 17,841,073 Difference (2,185,620) Calculated % below adjusted threshold basis lim -14.0% Points 13 2 2% voluntary credit reduction - 2 points 3 Committed Public Funds AHP 409,500 City of Oakland 7,241,298 Total 7,650,798 % of total development cost 37% Points 37 4 BRIDGE experience meets requirement 5 BRIDGE experience meets requirement 6 Large family project 7 Transit-oriented development strategy - bear bus stops and BART (7 points) Within .5 mile of a public library (2 points) Site is within .25 mile of convenience store (2 points) Within .25 miles of public schools (3 points) Within .5 miles of medical clinic (3 points) 8 Wired for Internet access and educational classes in community center 9 Fruitvale / Lower San Antonio is a designated Neighborhood Revitalization area with public funds and planning efforts led by city council chair de la Fuente with aggressive involvement from organizations such as the Annie E. Casey Foundation 10 Ineligible for balanced communities points if taking neighborhood revitalization points 11 Project will exceed 15% improvement over Title 24 standards (5 points) Also will have energy efficient appliances, fluorescent light fixtures, and water conserving technologies (3 points) 12 Based on project affordability levels, score of 72.5 on TCAC Lowest Income Table 13 Expect to have full readiness to proceed 14 Agree to exchange Federal tax credits for State credits