|
CCHT Request for Funding Recommendation- Page 2 of 4
<br />
<br />2.0 Project Financing Review and Summary
<br />
<br />2.1 The HRA Staff and Board subcommittee have review detailed financial information
<br />which is summarized as follows. The project was reviewed individually for each phase
<br />as well as collectively. The more detailed financial information is attached.
<br />
<br />a. The Sources (revenues) against the Uses (expenses) is summarized as follows:
<br />
<br />Costs: Rehab New
<br />Acquisition $4,374,000 $1,102,000
<br />Construction $5,193,071 $6,978,425
<br />Contingency (5%) $411,046 $277,137
<br />Environmental $63,000 $6,000
<br />Soft Costs $2,501,407 $2,201,471
<br />Total $12,542,524 $10,565,033
<br />Per Unit Cost $121,772 $211,301
<br />
<br />Revenues:
<br />Mortgage $4,498,855 $2,108,309
<br />Equity $33,909 $0
<br />Public Sources $8,009,760 $8,456,724
<br />Total $12,542,524 $10,565,033
<br />
<br /> HRA/TIF %
<br />of Public Sources
<br />4.4% 7.1%
<br />
<br />b. The per unit cost on the project is a significant i nvestment in the property. Due to its current
<br />condition, site factors, years of deferred maintena nce, acquisition cost and need to convert units
<br />from one to two bedrooms there is a $121,772 per unit cost to renovate the units. The new
<br />construction cost per unit is over $200,000 which is a factor of the rising costs of materials.
<br />
<br />c. The amount of CCHT’s mortgage is a factor of how much public funding they can receive as well
<br />as the amount of property taxes, rents and interest ra tes. If the values per unit are lower, they will
<br />pay a lower tax and can increase their mortgage. On the flip side, if the per unit valuation is
<br />higher, they will pay higher tax and their mortgage ability will decrease. This works the same
<br />with regards to the amount of funding they can recei ve. Currently they are estimating the value of
<br />the renovated units between $70,000 - $80,000 and the new between $90,000-$100,000 per unit
<br />which seem reasonable in this market.
<br />
<br />d. CCHT is a non-profit housing developer. This does not mean that they do not collect a developer
<br />fee. The developer fee is necessary to sustai n their business and ensure the longevity of the
<br />company. In addition, the company makes a long-term commitment to their properties. They
<br />provide a substantial amount of care and oversi ght not only of the physical component of the
<br />property but also the social components. They pr ovide on-site services that are not provided in
<br />other typical apartment complexes.
<br />
<br />e. The request for HRA funds is needed for the renovati on of the project. It is upfront assistance that
<br />may or may not be recovered. However, a devel opment agreement can be structured so that if
<br />revenues exceed what is expected and/or if costs are reduced, the HRA could recapture some of its
<br />investment.
<br />
<br />f. The TIF assistance is needed to support the new de velopment. However, if the new development
<br />does not proceed (either due to market factors or land use decisions) then the tax increment can be
|