HomeMy WebLinkAboutAgenda Packet - CC - 2015.06.09City of Burlingame
Meeting Agenda - Final
City Council
BURLINGAME CITY HALL
501 PRIMROSE ROAD
BURLINGAME, CA 94010
Tuesday, June 9, 2015 6:00 PM Council Chambers
1. CALL TO ORDER
City Council Chambers - City Hall - 501 Primrose Road
2. ROLL CALL
3. PUBLIC COMMENTS, NON -AGENDA
Members of the public may speak about any item not on the agenda. Members of the public wishing to
suggest an item for a future Council agenda may do so during this public comment period. The Ralph M.
Brown Act (the State local agency open meeting law) prohibits the City Council from acting on any matter
that is not on the agenda.
4. PARKING LOTS F & N REQUEST FOR PROPOSALS
Presentation of Revised Proposals from Top Three Respondents, as Requested by the City Council on
March 26, 2015
a. Presentation by The Pacific Companies (20 -Minutes Maximum)
Attachments: The Pacific Companies Revised Proposal (060915)
i. City Council Questions/Discussion
ii. Public Comment
b. Presentation by Meta Housing Corporation (20 -Minutes Maximum)
Attachments: Meta Housing Corporation Revised Proposal (060915)
i. City Council Questions/Discussion
ii. Public Comment
C. Presentation by Mid -Peninsula Housing (20 -Minutes Maximum)
Attachments: Mid -Peninsula Housing Revised Proposal (060915)
i. City Council Questions/Discussion
ii. Public Comment
5. CITY COUNCIL DIRECTION (Next Steps)
& ADJOURNMENT
City of Burlingame Page 1 Printed on 6/2/2015
City Council Meeting Agenda - Final June 9, 2015
NEXT CITY COUNCIL MEETING - Next regular City Council Meeting - Monday,
June 15, 2015
VIEW REGULAR COUNCIL MEETING ONLINE AT WWW.BURLINGAME.ORG - GO
TO "CITY COUNCIL VIDEOS"
Notice: Any attendees wishing
accommodations for disabilities
please contact the
City Clerk at
(650)558-7203 at least 24 hours
before the meeting. A copy of
the Agenda Packet is available for
public review at the City Clerk's office, City Hall, 501 Primrose
Road, from 8.00 a.m.
to 5:00 p.m.
before the meeting and at the
meeting. Visit the City's website
at www.burliligame.org.
Agendas and
minutes are available at this site.
Any writings or documents provided to a majority of the City Council regarding any itein on this
agenda will be made available for public inspection at the Water Office counter at City Hall at 501
Primrose Road during normal business hours.
City of Burlingame Page 2 Printed on 61212015
The Pacific Companies - Revised Proposal
(060915)
N THE
PACIFIC
COMPANIES
May 8, 2015
Mr. William Meeker
Community Development Director
City of Burlingame
501 Primrose Road
Burlingame, CA 94010
Re: Amendment to Response to Request for Proposals
The Village at Burlingame
Dear Mr. Meeker,
Thank you for the opportunity to submit this amendment to our previous response to the City
of Burlingame's request for affordable housing proposals. We are pleased to present you this
modified development program which has been designed and crafted based on what we
learned at the presentation meeting.
Citv Council Policv Concerns:
We spent a significant amount of time reviewing the recorded comments of the City Council in
an effort to amend our proposal in ways that would properly take care of the public policy
concerns articulated during the meeting. The following core issues were raised, with some
being general in nature while others were specific to our proposal:
• The importance of good design and traditional architecture consistent with the
aesthetic values of the City of Burlingame
• A desire to see a mix of housing, especially housing for seniors, including seniors that
are not necessarily low-income but want to downsize their home and remain in
Burlingame
• Meeting the downtown specific plan and existing parking codes with no reductions /
waivers
• Creating open space where possible
• Producing the best public benefit in terms of both the amount of affordable housing and
additional public parking
• Too many larger units (3 bedroom) and the impacts on public services
• Avoid compromising the main purpose of the RFP, which was to produce affordable
housing
Residential Development Program — Lot F (Exhibit A)
In response to the concerns raised, we offer the following residential development program:
• A total of 144 units on Lot F, consisting of:
o For the Burlingame workforce (78 total units):
• 48 affordable 1 -bedroom units
■ 26 affordable 2 -bedroom units
• 3 affordable 3 -bedroom units
■ 1 manager's 2 -bedroom unit
o For Burlingame senior citizens (66 total units):
■ 42 affordable 1 -bedroom units
■ 6 market rate 1 -bedroom units at discounted rents
■ 11 affordable 2 -bedroom units
■ 6 market rate 2 -bedroom units at discounted rents
■ 1 manager's 2 -bedroom unit
• A below -grade parking garage consisting of 170 conveniently located spaces that fully
meets the City of Burlingame's parking codes as follows:
0 48 one -bedroom units at 1 space per unit -48 spaces
0 48 one -bedroom senior units at 1 space per unit -48 spaces
0 26 two-bedroom units at 1.5 spaces per unit -39 spaces
0 17 two-bedroom senior units at 1.5 spaces per unit — 26 spaces
0 3 three-bedroom units at 2 spaces per unit— 6 spaces
0 2 two-bedroom manager's units at 1.5 spaces per unit -3 spaces
Public Parking Program — Lot N (Exhibit B)
Consistent with our original proposal, we have programmed and budgeted for a 4 -level, free-
standing parking garage on the entirety of Lot N which will include 371 public parking spaces as
follows:
• Full replacement of the existing 199 public parking spaces
• The addition of 172 public parking spaces
This public parking garage will be provided at no additional cost to the City and is fully budgeted
in the development's financing structure without reliance on revenue from the parking garage,
additional taxes or proceeds from an infrastructure financing district. Furthermore, the City will
not be required to provide another land asset for construction of replacement parking.
Opportunity for more public parking: In the event the City is willing to use the revenue from the
new parking garage, a 5th level could be added that would generate an additional 103 public
parking spaces, bringing the total new public parking count to 275 spaces.
Project Design and Architecture (Exhibit C)
The previous public meeting provided meaningful insight into the aesthetic values held by the
Burlingame community. We have included the following design elements into our revised
proposal which we assess to be consistent with those values:
• Traditional craftsman style architecture
• Scaling of buildings consistent with existing structures and downtown specific plan
requirements
• Building form and massing that can accommodate alternative traditional architectural
styles if desired, such as Spanish or Art -Deco.
• Open space elements that invite resident community participation and passive
recreation
The architectural ideas, style and concepts presented are a starting point from which we expect
to receive further direction and input through a traditional public design and land -use approval
process.
Financing Structure (Exhibit D)
Our proposed financing structure remains consistent from our prior submittal. We believe
strongly in having a clear and certain path to access the available public financial resources, and
we remain committed to developing the project using non-competitive 4% tax credits.
Attached as Exhibit D is a revised financial analysis that reflects the changes in the development
program.
Core Elements of Our Amended Proposal
In summary, the value of our amended proposal rests in the following core elements:
• Affordable Housing for the Burlingame Workforce: Our proposal will deliver 78
affordable workforce housing units to the downtown area.
• Affordable and Market Rate Housing for Burlingame Seniors: Our proposal will deliver
66 affordable and market rate housing units for seniors in the downtown area.
• Additional Public Parking at No Cost to the City: Our proposal will replace the 199
public parking spaces on Lots F and N with a new parking garage that will contain 371
spaces, yielding an additional 172 public parking spaces with an opportunity to produce
up to 275 new public spaces.
• A Highly Experienced Development Team: Our development team has produced
approximately 150 projects consisting of over 9,000 units of affordable and market -rate
housing for seniors, individuals with special needs, working families and professionals.
• Consistency with Downtown Specific Plan and Parking Requirements: We are
proposing a project that requires no significant entitlements and is consistent with the
Burlingame Downtown Specific Plan and related residential parking requirements.
• Our Innovative Financing Strategy is Tested and Proven: Our development team has
executed dozens of tax-exempt bond and 4% tax credit projects, including several using
the specific financing structure we are proposing for this project. Each of those
financing transactions involved numerous bankers, attorneys, accountants and
consultants, all of whom would be pleased to provide references upon request.
• No Reliance on "Soft" Public Subsidies: Our financing structure does not rely on any
other soft financing or competitive public subsidies, thereby reducing the risk of the
project not moving forward or being delayed while at the same time vastly accelerating
the City's vision to provide housing opportunities in the downtown area.
• No Reliance on 9% Tax Credits: We are proposing a financing plan that will utilize the
heavily-undersubscribed tax-exempt bond and 4% tax credit programs which eliminates
the exercise of having to compete twice a year for the scarce and competitive 9% tax
credits.
• No New Taxes, Fees or Infrastructure Financing District: The construction of the public
parking garage will not require new fees, taxes or the formation of an infrastructure
financing district.
• No Co -Mingling of Residential and Public Parking: By creating a stand-alone parking
structure on its own lot, we are able to provide a clear separation of residential and
public parking, which produces the following public benefits:
o More "user-friendly" public parking that eliminates confusion about where to
park
o Public parking that is visible and can be easily located and used
o No need for cross -easements or a condominium map to separate ownership
o Eliminates pro -rating shared maintenance costs
o Avoids the potential inherent conflicts with assigning responsibility for damages
and normal wear -and -tear
o Provides long-term control to the City while preserving a public asset
o Eliminates problems associated with residential accidents or litigation affecting
the City, and vice versa
• Ownership of Land and Parking Garage: We propose that the City retain ownership of 1
Lot N and accept dedication of the public parking garage once complete, much like a city
handles the construction by a private party of improvements in the city's public right-of-
way. The land ownership of Lot F will depend on a couple factors to be resolved in the
near future, but our preference is to structure an agreement whereby the City either
dedicates / leases Lot F to The Pacific Companies at no cost in exchange for us building
and paying for the public parking garage on Lot N.
Thank you for the opportunity to remain engaged with this exciting project, and we look
forward to your response in the near future.
Sincerely,
Caleb Roope
President / C.E.O.
Exhibit A
Residential Development Program — Lot F
The Village at Burlingame
Affordable Workforce Housing -78 Units
#
Type
Sq. Ft.
% AMI
Rent
% Below
Market
Monthly Rent
Savings
5
1 BR / 1 Bath
650
50%
$1,057
61%
$1,683
43
1 BR / 1 Bath
650
60%
$1,277
53%
$1,463
3
2 BR / 1 Bath
850
50%
$1,261
63%
$2.139
23
2 BR / 1 Bath
850
60%
$1,525
55%
$1,875
3
F3 BR / 2 Bath
1,150
60%
$1,755
59%
$2,560
*112
BR / 1 Bath
8501
NA
$0
100%
$3,400
*Manager's Unit
Affordable & Market Rate Senior Housing -66 Units
#
Type
Sq. Ft.
% AMI
Rent
% Below
Market
Monthly Rent
Savings
7
1 BR / 1 Bath
573
50%
$1,057
61%
$1,683
35
1 BR / 1 Bath
573
60%
$1,277
53%
$1,463
6
1 BR / 1 Bath
573
Market
$1,740
36%
$1.000
11
2 BR / 1 Bath
850
60%
$1,525
55%
$1,875
6
2 BR / 1 Bath
850
1 Market
1 $2,400
29%
$1,000
*11
2 BR / 1 Bath
1 8501
NA
1 $01
100%
$3,400
*Manager's Unit
Residential Parking Analysis*
#
Type
Required
per Code
Total
Required
Total
Provided
48
1 Bedroom
1 Space
48
48
48
1 Bedroom —Senior
1 Space
48
48
26
2 Bedroom
1.5 Spaces
39
39
17
2 Bedroom—Senior
1.5 Spaces
26
26
3
3 Bedroom
2 Spaces
6
6
2
2 Bedroom — Mgrs.
1.5 Spaces
3
3
144
170
170
*Before application of reduced City parking standards for senior housing
Exhibit B
Public Parking Program — Lot N
The Village at Burlingame
Public Parking Analysis*
*+/- 3% variance due to handicap stalls, venting and mechanical, possible use of
compact stalls, etc.
Public
Current
Spaces
Lot
Public
Variance
Spaces
Project
Lot
105
0
-105
Lot
94
371
+277
Totals
199
371
+172
*+/- 3% variance due to handicap stalls, venting and mechanical, possible use of
compact stalls, etc.
Exhibit C
Project Design and Architecture
The Village at Burlingame
Please see the attached Parking / Housing Study prepared by Christiani Johnson
Architects.
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Exhibit D
Financing Structure
The Village at Burlingame
Please see the attached Financial Pro Forma that depicts the project's innovative
and proven financing strategy.
The Village at Burlingame
A 144 -Unit Workforce & Senior
Affordable Housing Community
Burlingame, CA
Financial Pro Forma
Rev. 5/2/15
Prepared By:
Caleb Roope
Pacific West Communities, Inc.
430 East State Street, Suite 100
Eagle, ID 83616
208.461.0022 x 3015
208.461.3267 fax
calebr@tpchousing.com
DEVELOPMENT BUDGET
The Village at Burlingame
Burlingame, CA
Total Land Costs
Total Acquisition Costs
New Construction and/or Rehabilitation
Off -Site Work - Parking Garage
Commercial Space
On Site Work
Structures
General Requirements
Contractor Overhead
Contractor Profit
Construction Contingency
Total Construction Costs
Financing Costs
Construction Loan Interest
Construction Loan Fee
Construction Lender Costs (Legal, Etc.)
Bond Issuer & Trustee Fees
Permanent Loan Fees
Permanent Loan Costs
Tax Credit Fees
Bond Counsel
Financial Advisor
Total Financing Costs
Soft Costs
Architectural
Engineering/Surveying/Environmental
Taxes During Construction
Insurance
Title & Recording
Borrower Attorney
Appraisal
Local Tap, Building Permit, & Impact Fees
Marketing
Relocation Costs
Furnishings
Cost Certification
Market Study
Soft Cost Contingency
Developer Overhead & Profit
Consultant Fee
Total Soft Costs
Reserves
Rent Reserve (Post Cons. Interest)
Operating Reserve
Total Reserve Costs
Totals
Project Cost Per
Costs Unit
Rev. 5/2115
Cost Per Tax Credit
Res. Sq. Ft. Eligible Basis
1'iDi�11
$
10,276,000
$
71,361
$
99.88
$
10,276,000
$
-
$
-
$
-
$
$
2,880,000
$
20,000
$
27.99
$
2,880,000
$
28,601,280
198,620
$
278.01
$
28,601,280
$
2,505,437
$
17,399
$
24.35
$
2,505,437
$
885,254
$
6,148
$
8.60
$
885,254
$
2,655,763
$7-
18,443
$
25.81
$
2,655,763
2,450,000
$
17,014
$
23.81
$
2,450,000
$
50,253,734
$
348,984
$
488.47
$
50,253,734
$
1,150,000
$
7,986
$
11.18
$
1,150,000
$
380,000
$
2,639
$
3.69
$
380,000
$
100,000
$
694
$
0.97
$
100,000
$
200,000
$
1,389
$
1.94
$
200,000
102,500
$
712
�34T
-$'--1.00
-$
6dS
XXXXXXXXXX
$
78,497
$
545
$
0.76
XXXXXXXXXX
$
80,000
$
556
$
0.78
XXXXAAXAXA
30,000
$
208
0.29
XXXXXXXXXX
$
2,170,997
$
15,076
$
21.10
$
1,830,000
$
600,000
$
4,167
$
5.83
$
600,000
$
200,000
$
1,389
-$-1
94
$
200,000
80,000
556
$
0.78
80,000
$
753,800
$
5,235
$
7.33
$
753,800
$
80,000
$
556
$
0.78
$
80,000
$
100,000
$
694
$
0.97
$
100,000
$
10,000
$
69
-$-O
10
$
10,000
$
3,840,000
$
26,667
$
37.33
3,840,000
$
185,374
$
1,287
$
1.80
XXXXXXXXXX
$
-
$
-
$
-
XXXXXXXXXX
$
60,000
$
417
$
0.58
$
60,000
10,000
$
69
$
0.10
10,000
$
10,000
$
69
$
0.10
$
10,000
$
500,000
7
3,472
$
4.86
$
500,000
$
2,500,000
$
17,361
$
24.30
$
2,500,000
$
8,929,174
$
62,008
$
86.79
$
8,743,800
$
650,000
$
4,514
$
6.32
XXXXXXXXXX
$
506,334
75
3,516
7-4.92
XXXXXXXXXX
$
1,156,334
$
8,030
$
11.24
XXXXXXXXXX
$ 62,510,239 $ 434,099 $ 607.60 $ 60,827,534
Rev. 5/2/15
SOURCES & USES
The Village at Burlingame
Burlingame, CA
CONSTRUCTION PHASE PERMANENT PHASE
Sources of Funds Sources of Funds
Tax Credit Financing
$
5,202,048
Total Tax Credit Financing
$
26,010,239
Tax -Exempt Bonds - Series B
$
16,000,000
Tax -Exempt Bonds - Series A
$
20,500,000
Other
$
-
Tax -Exempt Bonds - Series B
$
16,000,000
Other
$
-
Other
$
-
Other
$
-
Other
$
-
Other
$
-
Other
$
-
Deferred Costs
$
1,156,334
Other
$
-
Deferred Contractor Profit
$
-
Other
$
-
Deferred Developer Fee
$
2,500,000
Other
$
-
Tax -Exempt Bonds - Series A
$
37,651,857
Other
$
-
Total Sources of Funds
$
62,510,239
Total Sources of Funds
$
62,510,239
Uses of Funds
Uses of Funds
Total Land Costs
$
-
Total Land Costs
$
-
Total Acquisition Costs
$
-
Total Acquisition Costs
$
-
New Construction and/or Rehabilitation
$
47,803,734
New Construction and/or Rehabilitation
$
47,803,734
Construction Contingency
$
2,450,000
Construction Contingency
$
2,450,000
Financing Costs
$
2,170,997
Financing Costs
$
2,170,997
Architecture & Engineering
$
800,000
Architecture & Engineering
$
800,000
Other Soft Costs
$
5,129,174
Other Soft Costs
$
5,129,174
Developer Fees
$
2,500,000
Developer Fees
$
2,500,000
Soft Cost Contingency
$
500,000
Soft Cost Contingency
$
500,000
Reserves
$
1,156,334
Reserves
$
1,156,334
Total Uses of Funds
$
62,510,239
Total Uses of Funds
$
62,510,239
FINANCING & COMPLIANCE DETAILS
The Village at Burlingame
Burlineame, CA
Total Project Costs
Tax Credit Financing
Tax Credit Eligible Basis $ 60,827,534
Less. Grant Proceeds & Other Exclusions $ -
Voluntary Basis Reduction $ -
RequestedEligibleBasis $ 60,827,534
Difficult to Develop Bonus (Yes -130%, No - 100%) 130%
Total Adjusted Eligible Basis $ 79,075,794
Times % of Affordable Units or Sqr. Ft. 91.50%
Qualified Basis Eligible to Receive Tax Credits $ 72,354,352
Less Voluntary Credit Reduction 0.00% $ $ 72,354,352
Federal Credits Strs[e Credits
Times Credit % Est. April'15 3.21% 13.00%
Times Number of Years 10 1
Total Tax Credits $ 23,225,750 + $ _ Es—723,225,750
Syndicated at an Investment Rate of 99.99% at a Price of $ 1.1200
Credit Price $1.12 $0.00
Equals Tax Credit Equity Proceeds $ 26,010,239
Total Tax Credit Financing
Tax -Exempt Bonds - Series A
Tax -Exempt Bonds - Series B
Other
Other
Other
Other
Financing Shortfall / (Overage)
Rev. 5/2/15
$ 62,510,239
41.61%
$
(26,010,239)
32.79%
$
(20,500,000)
25.60%
$
(16,000,000) /
0.00%
$
- F
0.00%
$
-
0.00%
$
-
0.00%
$
-
0.00%
$
$
Max. HOME - No Davis Bacon
HOME Units #
Max. Subsidy
Sub
Max. HOME Units
0
1 -Bedroom 0
$ -
$
Ratio to Tot. Units
0.00%
1
2 -Bedroom 0
$ -
$
Tot. Project Costs
$ 62,510,239
3 -Bedroom 0
$ -
$
HOMELoars
4 -Bedroom 0
$ -
$
$
Compliance with LIHTC Eligible Basis Limits
San Mateo
Unit
Number
County Basis
Size
I of Units
Limits
Totals
I -Sr.
48
$
291,808
$
14,006,784
l
48
$
291,808
$
14,006,784
2
45
$
352,000
$
15,840,000
3
$
450,560
$
1,351,680
Base Limit Plus Adjustments
Requested Eligible Basis
% Beloit,/(lhone) Cost Lindt
Construction Fit
Credit Financing
Exempt Bonds - Series B
Deferred Costs
Deferred Contractor Profit
Deferred Developer Fee
Tax -Exempt Bonds - Series A
Total Limit
Loan Amount
V
$ 5,202,048
$ 16,000,000
$ 1,156,334
$ 2,500,000
$ 37,651,857
OPERATING & LOAN DETAILS
Project: The Village at Burlin ameLocation: Burlingame, CA Rev. 5/2/15
Type
IBR/1BA - Sr.
IBR/IBA - Sr.
IBR/IBA - Sr.
1BR/1BA - Sr.
1BR/1BA
1BR/1BA
IBR/IBA
IBR/IBA
2BR/1BA
2BR/1BA
2BR/1BA - Sr.
2BR/1BA - Sr.
3BR/2BA
3BR/2BA
3BR/2BA
3BR/2BA
2BR/1BA - Mgr
AMI Number Avg. Unit Gross Utility Net Monthly Annual
Rent Level of Units Sq. Ft. Rent Allowance Rent Totals Totals
0%
0
0
0
0
0
0
0
50%
7
573
1,099
42
1,057
7,399
88,788
60%
35
573
1,319
42
1,277
44,695
536,340
Market
6
573
1,782
42
1,740
10,440
125,280
0%
0
0
0
0
0
0
0
50%
5
650
1,099
42
1,057
5,285
63,420
60%
43
650
1,319
42
1,277
54,911
658,932
Market
0
0
0
0
0
0
0
50%
3
850
1,318
57
1,261
3,783
45,396
60%
23
850
1,582
57
1,525
35,075
420,900
60%
11
850
1,582
57
1,525
16,775
201,300
Market
6
850
2,457
57
2,400
14,400
172,800
50%
0
0
0
0
0
0
0
60%
0
0
D
0
0
0
0
60%
3
1,150
1,828
73
1,755
5,265
63,180
Market
0
0
0
0
0
0
0
Manager's
2
850
0
0
0
01[
0
Total Units & Sq. Ft. 144 100,380
Communtiy Facilities 2,500
Total Project Sq. Ft. 102,880
% ofSq. Ft.
Affordable
% of Units
Affordable
91.50%
91.67%
Operating Deficit Guarantee
t0%of Perm. $ 2,050,000
°
Year 102. Exp. $ 861,120
Guarantee $ 2,050,000
Replacement Reserves
Standard/Unit
UMR Mm/Unit
$ 300
$ 600
Reserve / Unit
$ 300
Project Unit Mix
Unit Type
Number
% of Total
1 Bdnn. - Senior
48
33.33%
1 Bdnn./1 Bath.
48
33.33%
E2.08%
2 Bdrm./1 Bath.
45
31.25%
3 Bdnn./2 Bath.
3
115
l 15
Totals
144
99.990%
Total Annual Rental Income $ 2,376,336
Other Income
Laundry /Unit/Year $ 75 $ 10,800
Tenant Charges & Interest /Unit/Year $ 50 $ 7,200
Total Annual Other Income $ 18,000
Total Annual Potential Gross Income $ 2,394,336
Vacancy & Collection Loss 5% $ (119,717)
Annual Effective Gross Income $ 2,274,619
Average Affordability
Unit Type
Number
% of UnitsF
Factor
O..99
0.00
50%
15
10.56/°
0.06
0
60 /°
115
l 15
80.99 /°
0.53
Market
12
8.45%
0.00
Average Affordability
58.850/.
OPERATING & LOANDETAILS (continued)
Project: The Village at Burlingame
ANNUAL EXPENSES
Location: Burlingame, CA Rev. 5/2/15
Real Estate Taxes & Special Assessments
EGI
Operating Exp.
** ° Fixed Loan
Per Unit
Amount
L15 1.20 1.21
Total
2.25% 5.93% $ 355.00 $
51,100
State Taxes
0.04%
0.09%
$
5.00
$
800
Insurance
1.14%
3.01%
$
180.00
$
25,920
Licenses
0.02%
0.04%
$
2.00
$
350
Fuel & Gas
0.10%
0.25%
$
15.00
$
2,200
Electricity
1.89%
5.00%
$
299.00
$
43,100
Water&Sewer
5.30%
14.00%
$
837.00
$
120,500
Trash Removal
2.27%
6.00%
$
359.00
$
51,700
Pest Control
0.08%
0.22%
$
13.00
$
1,900
Building & Maintenance Repairs
4.55%
12.00%
$
718.00
$
103,400
Building & Maintenance Supplies
2.27%
6.00%
$
359.00
$
51,700
Other Services
0.00%
0.00%
$
-
$
-
Annual Issuer & Trustee Fees
0.80%
2.12%
$
127.00
$
18,250
Gardening & Landscaping
1.89%
5.00%
$
299.00
$
43,100
Management Fee
5.00%
13.10%
$
783.00
$
112,800
On -Site Manager(s)
3.04%
8.03%
$
480.00
$
69,120
Other Payroll
1.51%
4.00%
$
239.00
$
34,400
Manager's Unit Expense
0.00%
0.00%
$
-
$
-
Cleaning Supplies
0.76%
2.00%
$
120.00
$
17,300
Benefits
0.09%
0.23%
$
14.00
$
2,000
Payroll Taxes & Work Comp
1.05%
2.76%
$
165.00
$
23;800
Advertising
0.57%
1.50%
$
90.00
$
13,000
Telephone
0.13%
0.35%
$
21.00
$
3,00'
Legal & Accounting
0.44%
1.16%
$
69.00
$
10,OL
Operating Reserves (Funded in Budget)
0.00%
0.00%
$
-
$
-
Office Supplies & Expense
0.22%
0.58%
$
35.00
$
5,000
Miscellaneous Administrative
0.59%
1.61%
$
96.00
$
13,480
Replacement Reserves
1.90%
5.02%
$
300.00
$
43,200
Annual Expenses - Per Unit & Total
Annual Net Operating Income - Per Unit & Total
PERMANENT DEBTANALYSIS
Cap Rate
Loan -To -Value Restriction
Debt Service Coverage
Loan Anvount
Constant
Interest Rate
Amortization Period in Years
Annual Debt Service
Annual Cash Flow
Loan Selection
$ 5,980 $ 861,120
$ 9,816 $1,413,499
LTVRestrictedLoan Amounts
DSCRatio Restricted Loan Amounts
8.500% 9.01010"o9.500%
** ° Fixed Loan
90% 90% 90%
1.66 1 1.76 1.86
Amount
L15 1.20 1.21
$ 14,966,460
$ 14,134,990
$ 13,391,043
$ 21,643,108
$ 20,741,311
$ 20,500,000
**I
0.056791
0.056791
4.500%
4.500%
4.500%
4.500%
4.500%
4.500%
35
35
35
35
35
35
$ 849,957
$ 802,737
$ 760,488
$ 1,229,130
$ 1,177,916
$ 1,164,216
$ 563,542
$ 610,762
$ 653,011
$ 184,369
$ 235,583
$ 249,283
000000
The Village at Burlingame Burlingame, CA
Multi -Year Stabilized Operating Pro -Forma
Rev. 5/2/15
RENTAL INCOME
% AMI
Net Rent /
Unit - Year 1
No. of
Units
Annual
Increase
Year
1
2
YearP692,290
Year
4
Year
5
1BR/1BA-Sr.
0%
0
0
2.5%
IBR/IBA - Sr.
50%
1,057
7
2.5%
88,788
91,008
95,615
98,005
1BR/1BA-Sr.
60%
1,277
35
2.5%
536,340
549,749
577,580
592,019
IBR/IBA - Sr.
Market
1,740
6
2.5%
125,280
128,412
134,913
138,286
IBR/IBA
0%
0
0
2.5%
IBR/IBA
50%
1,057
5
2.5%
63,420
65,006
68,296
70,004
1BR/IBA
60%
1,277
43
2.5%
658,932
675,405
709,598
727,338
IBR/IBA
Market
0
0
2.5%
2BR/lBA
50%
1,261
3 1
2.5%
45,396
46531
47,694
48,887
50,109
2BR/1BA
60%
1,525
23 1
2.5%
420,900
431,423
442,208
453,263
464,595
2BR/1BA-Sr.
60%
1,525
II
2.5%
201,300
206,333
211,491
216,778
222,198
2BR/IBA-Sr.
Market
2,400
6
2.5%
172,800
177,120
181,548
186,087
190,739
3BR/2BA
50%
0
0
2.5%
3BR/2BA
60%
0
0
2.5%
3BR/2BA
60%
1,755
3
2.5%
63,180
64,760
66,378
68,038
69,739
3BR/2BA
Market
0
0
2.5%
2BR/IBA-Mgr
Manager's
0
2
2.5%
TOTAL RENTAL INCOME
144
2,376,336
2,435,744
2,496,638
2,559,054
2,623,030
OTHER INCOME
Units
Incr./Yr.
Year -1
Year -2
Year -3
Year -4
Year -5
Laundry
144
2.5%
10,800
11,070
11,347
11,630
11,921
Tenant Charges & Interest
144
2.5%
7,200
7,380
7,565
7,754
7,947
TOTAL OTHER INCOME
18,000
18,450
18,911
19,384
19,869
TOTALINCOME
2,394,336
2,454,194
2,515,549
2,578,438
2,642,899
Less Vacancy Allowance
5%
(119,717)
(122,710)
(125,777)
(128,922)
(132,145)
GROSS INCOME
2,274,619
2,331,484
2,389,772
2,449,516
2,510,754
OPERATING EXPENSES
Per Unit- Yr.I
%EGI
Incr./Yr.
Year -1
Ycar-2
Year -3
Year -4
7 ear -5
Advertising
$
90
0.6%
3.5%
13,000
13,455
13,926
14,413 1
14,918
Legal
$
14
O.1%
3.5%
2,000
2,070
2,142
2,217
2,295
Accounting/Audit
$
56
0.4%
3.5%
8,000
8,280
8,570
8,870
9,180
Security
$
0.0%
3.5%
Other: Telephone, Office Expense, Misc.
$
149
0.9%
3.5%
21,480
22,232
23,010
23,815
24,649
Management Fee
$
783
5.0%
3.5%
112,800
116,748
120,834
125,063
129,441
Fuel
$
1
0.0%
3.5%
200
207
214
222
230
Gas
$
14
0.1%
3.5%
2,000
2,070
2,142
2,217
2,295
Electricity
$
299
1.9%
3.5%
43,100
44,609
46,170
47,786
49,458
Water/Sewer
$
837
5.3%
3.5%
120,500
124,718
129,083
133,601
138,277
On -Site Manager
$
480
3.0%
3.5%
69,120
71,539
74,043
76,635
79,317
Maintenance Personnel
$
239
1.5%
3.5%
34,400 1
35,604P773""","',695105
38,140
39,475
Other: Payroll Taxes, Work Comp, Benefits
$
179
1.1%
3.5%
25,800
26,703
28,605
29,606
Insurance
$
ISO
1.1%
3.5%
25,920
26,827
28,738
29,744
Painting
$
50
0.3%
3.5%
7,200
7,452
7,983
8,262
Repairs;
$
599
3.8%
3.5%
86,200
89217
95,571
98,916
Trash Removal
$
359
2.3%
3.5%
51,700
53,510
57,321
59,327
Exterminating$
13
0.1%
3.5%
1,900
1,9675
2,107
2,180
Grounds
$
299
1.9%
3.5%
43,100
44,6090
47,786
49,458
Elevator
$
69
0.4%
3.5%
10,000
10,3502
11,087
11,475
Other: Cleaning&Buildin Supplies
$
479
3.0%
3.5%
69,000
71,4155
76,502
79,179
Other: Licenses
$
2
0.0%
3.5%
350
362
375
388
402
Other. State Tax
$
6
0.0%
3.5%
800
828
857
887
918
Other: Issuer/ Trustee Fees
$
127
0.8%
3.5%
18,250
18,889
19,550
20,234
20,942
Other:
$
0.0%
3.5%
Other:
$
0.0%
3.5%
TOTAL OPERATING EXPENSES
S
5,325
766,820
793,659
821,437
850,187
879,944
Internet Expense
$
0.0%
3.5%
Service Amenities
-Replacement
$
0.0%
3.5%
Reservef r
$
300
1.9%
0.0%
43,200
43,200
43,200
43,200
43,200
Real Estate Taxes
$
355
2.2%
2.0%
51,100
52,122
53,164
54,228
55,312
TOTAL EXPENSES, TAXES & RESERVES
$
5,980
861,120
888,981
917,801
947,615
978,456
CASH FLOW AVAILABLE FOR DEBT SERVICE
19413,499
1,442,504
1,471,971
1,501,901
1,532,298
DEBT SERVICE & OTHER DISTRIBUTIONS
Loan Amount
Year -1
Year -2
Year -3
Year -4
Year -5
Tax-ExemptBonds-SeriesA
Hard
$ 20,500,000
1,164,216
1,164,216
1,164,216
1,164,216
1,164,216
Other
NA
$
_
Asset Management Fees
Soft
$
24,400
24,400
24,400
24,400
24,400
24,400
Other
SO
$
Tax -Exempt Bonds - Series 3
Soft
$ 16,000,000
168,662
190,416
212,516
234,964
257,762
Other
SO
$
Other
Sot
$
Other
Soft
$
ANNUAL NET CASH FLOW
56,221
63,472
70,839
78,321
85,921
Deferred Dev. Fee Balance
Interest Rate:
0.00%
Debt Service Coverage Ratio on Hard Deb
1
1.21 1
1.21 1
1.26
1.29
1.32
The Village at Burlingame Burlingame, CA
Multi -Year Stabilized Operating Pro -Forma
10
156,458 1
IBR/IBA
0%
$
0
1.5%
0
2.5%
42,286
43,766
45,298
46,884
Other: Payroll Taxes, Work Comp, Benefits
IBR/IBA
50%
179
1,057
15%
5
2.5%
71,754
73,548
75,386
77,271
79,203
IBR/IBA
60%
1.1%
1,277
30,785
43
2.5%
745,521
764,159
783,263
802,845
822,916
IBR/lBA
Market
3.5%
0
8,851
0
2.5%
9,813
Repairs
$
599
2BR/1BA
50%
102,379
1,261
109,670
3
2.5%
51,361
52,645
53,962
55,311
56,693
2BR/1BA
60%
63,553
1,525
68,079
23
25%
476,210
488,115
500,318
512,826
525,646
2BR/1BA-Sr.
60%
2,417
1,525
2,590
11
2.5%
227,752
233,446
239,282
245,265
251,396
2BR/IBA-Sr.
Market
56,754
2,400
.Elevator
6
2.5%
195,507
200,395
205,405
210,540
215,804
3BR/2BA
50%
13,629
0
0
2.5%
3.0%
3.5%
81,950
84,819
87,787
3BR/2BA
60%
Other. Licenses
0
$
0
2.5%
3.5%
416 1
430
445
461
3BR/2BA
60%
1,755
6
3
2.5%
71,482
73,269
75,101
76,979
78,903
3BR/2BA
Market
$
0
0.8%
0
15
22,434
23,219
24,032
24,873
Other:
2BR/IBA-Mgr
Managets
0
3.5%
2
2.5%
-
Other:
TOTAL RENTAL INCOME
0.0%
3.5%
144
2,688,606
2,755,821
2,824,717
2,895,335
2,967,718
OTHERINCOME
910,742
942,618
Units
Incr./Yr.
Year -6
Year -7
Year -8
Year -9
Year -10
Laundry
3.5%
144
2.5%
12,219
12,525
12,838
13,159
13,488
Tenant Charges & Interest
144
1.5%
8,146
8,350
8,559
8,773
8,992
TOTAL O'FIRR1NCOME
43,200
43,200
43,200
43,200
Real Estate Taxes$
20,365
20,874
21,396
21,931
22,480
TOTALINCOME
58,698
59,872
61,069
TOTAL EXPENSES, TAXES & RESERVES
S
2,708,971
2,776,696
2,846,113
2,917,266
2,990,198
Allance
Less Vacancy ow
1,112,827
1,149,366
CASH FLOW AVAILABLE FOR DEBT SERVICE
5%
(135,449)
(138,835)
(142,306)
(145,863)
(149,510)
GROSS INCOME
1,691,321
DEBT SERVICE& OTHER DISTRIBUTIONS
Loan Amount
29573,522
2,637,861
2,703,807
2,771,403
2,840,688
OPERATING EXPENSES
Hard
Per Unit -
Yr. 1
%EGI
Incr./Yr.
Year -6
Year -7
Year -8
Year -9
Year -10
Advertising
NA
$
90
0.6%
3.5%
15,440
15,980
16,540
17,119
17,718
Legal
$
$
14
0.1%
3.5%
2,375
2,459
2,545
2,634
2,726
Accounting/Audit
$
56
0.4%
3.5%
9,501
9,834
10,178
10,534
10,903
Security
$
280,910
304,410
0.0%
3.5%
377,029
Other
Sop
$
Other: Telephone, Office Expense, Mise.
$
149
0.9%
3.5%
25,512
26,404
27,329
28,285
29,275
Management Fee -
$
783
5.0%
3.5%
133,971
138,660
143,513
148,536
153,735
Fuel -
$
1
0.0%
3.5%
238
246
254263
273
Gas
$
14
0.l%
3.5%
2,375
2,459
2,545
2,634
2,726
ElecMcity 1 299 L9% 3.5% 51,189 52,981 54,835 56,754 58,74
Water/Sewer $ 837 5.3% 3.5% 143,116 148,]25 153,310 158,675 164,22
On -Site Manaaer 1 $ 480 1 3.0% 1 3.5% 1 82,093 1 84,966 1 87,940 1 91,018 1 94,2031
Maintenance Personnel
$
239
1.5%
3.5%
40,856
42,286
43,766
45,298
46,884
Other: Payroll Taxes, Work Comp, Benefits
$
179
1.1%
15%
30,642
31,715
32,825
33,974
35,163
Insurance
$
180
1.1%
3.5%
30,785
31,862
32,977
34,132
35,326
Tainting
$
50
0.3%
3.5%
8,551
8,851
9,160
9,481
9,813
Repairs
$
599
3.8%
3.5%
102,379
105,962
109,670
113,509
117,482
Trash Removal
$
359
2.3%
3.5%
61,403
63,553
65,777
68,079
70,462
Extemunating
$
13
0.1%
3.5%
2,257
2,336
2,417
2,502
2,590
Grounds
$
299
1.9%
3.5%
51,189
52,981
54,835
56,754
58,741
.Elevator
$
69
0.4%
3-5%
11,877
12193.
12,723
13,168
13,629
Other. Cleaning& Building Supplies
$
479
3.0%
3.5%
81,950
84,819
87,787
90,860
94,040
Other. Licenses
$
2
0.0%
3.5%
416 1
430
445
461
477
Other. State Tax
$
6
0.0%
3.5%
950 1
983
1,018
1,053
1,090
Other. Issuer/ Trustee Fees
$
127
0.8%
3.5%
21,675 1
22,434
23,219
24,032
24,873
Other:
$
0.0%
3.5%
Other:
$
0.0%
3.5%
TOTAL OPERATING EXPENSES
$
5,325
910,742
942,618
975,609
1,009,756
1,045,097
Internet Expense
$
0.0%
3.5%
Service Amenities
$
0.0%
3.5%
Reserve for Re Iacement
$
300
1.9%
0.0%
43200
43,200
43,200
43,200
43,200
Real Estate Taxes$
355
2.2%
2.D%
56,419
57,547
58,698
59,872
61,069
TOTAL EXPENSES, TAXES & RESERVES
S
5,980i
1,010,360
1,043,364
1,077,507
1,112,827
1,149,366
CASH FLOW AVAILABLE FOR DEBT SERVICE
1,563,162
1,594,496
1,626,300
1,658,576
1,691,321
DEBT SERVICE& OTHER DISTRIBUTIONS
Loan Amount
Year -6
Year -7
Year -8
Year -9
Year -10
Tar-Exem tBonds-SeriesA
Hard
$
20,500,000
1,164,216
1,164,216
1,164,216
1,164,216
1,164,216
Other
NA
$
Asset Management Fees
Soft
$
24,400
24,400
24,400
24,400
24,400
24,400
Other
Sot
$
Tax-Exem t Bonds - Series B
Sot
$
16,000,000
280,910
304,410
328,263
352,470
377,029
Other
Sop
$
Other
Sop
$
Other
Soft
$
CASH FLOW
The Village at Burlingame Burlingame, CA
Multi -Year Stabilized Operating Pro -Forma
RENTAL INCOME
% AMI
Net Rent/
Unit - Year 1
No. of
Units
Annual
Increase
Yen
11
Year
12
Year
13
Year
14
Year
15
IBR/1BA-Sr.
0%
0
0
2.5%
IBR/1BA-Sr.
50%
1,057
7
2.5%
113,656
116,498
119,410
122,395
125,455
IBR/IBA - Sr.
60%
1,277
35
2.5%
686,561
703,725
721,318
739,351
757,834
IBR/IBA - Sr.
Market
1,740
6
2.5%
160,369
164,378
168,488
172,700
177,017
IBR/IBA
0%
0
0
2.5%
IBR/IBA
50%
1,057
5
2.5%
81,183
83,213
85,293
87,425
89,611
IBR/IBA
60%
1,277
43
2.5%
843,489
864,576
886,190
908,345
931,054
IBR/IBA
Market
0
0
2.5%
213R/1BA
50%
1,261
3
2.5%
58,111 1
59,563
61,053
62,579
64,143
2BR/1BA
60%
1,525
23
2.5%
538,788 1
552,257
566,064
580,215
594,721
2BR/IBA-Sr.
60%
1,525
11
2.5%
257,681
264,123
270,726
277,494
284,432
2BR/1BA-Sr.
Market
2,400
6
2.5%
221,199
226,729
232,397
238,207
244,162
3BR/2BA
50%
0
0
2.5%
3BR/2BA
60%
0
0
2.5%
3BR/2BA
60%
1,755
3
2.5%
80,876
82,898
84,970
87,094
89,272
3BR/2BA
Market
0
0
2.5%
2BR/IBA-Mgr
Manager's
0
2
2.5%
TOTAL RENTAL INCOME
144
3,041,911
3,117,959
3,195,908
3,275,805
3,357,701
OTRERINCOME
Units
Incr./Yr.
Year -11
Year -12
Year -13
Year -14
Year -15
Laundry1
144
2.5%
13,825 1
14,171
14,525
14,888
15,260
Tenant Charges&Interest
144
2.5%
9,217
9,447
9,683
9,925
10,173
TOTAL OTHER INCOME
23,042
23,618
24,208
24,813
25,434
TOTAL INCOME
3,064,953
3,141,576
3,220,116
3,300,619
3,383,134
Less Vneancy Allowance
5%
(153,248)
(157,079)
(161,006)
(165,031)
(169,157)
GROSS INCO31L
2,911,705
2,984,497
3,059,110
3,135,588
3,213,977
OPERATING EXPENSES
Per Unit -Yr.I
%EGI
Incr./Yr.
Year -11
Yea'12
Year -13
Year -14
Year -15
Advertising
$ 90
0.6%
3.5%
18,338
18,980
19,644
20,331
21,043
Legal
$ 14
0.1%
3.5%
2,821
2,920
3,022 1
3,128
3,237
Accounting/Audit
$ 56
0.4%
3.5%
11,285
11,680
12,089
12,512
12,950
Seeuri
$
0.0%
3.5%
Other: Telephone, Office Expense, Mise.
$ 149
0.9%
3.5%
30,300 1
31,360
32,458
33,594
34,770
Management Fee
$ 783
5.0%
3.5%
159,116 1
164,685
170,449
176,414
182,589
Fuel
$ 1
0.0%
3.5%
282
292
302
313
324
Gas
$ 14
0.1%
3.5%
2,821
2,920
3,022
3,128
3,237
Electrics
$ 299 1
1.9%
1 3.5%
60,797
62,925
65,127
67,407
69,766
Water/Sewer
$ 837
5.3%
3.5%
169,977
175,926
182,084
188,457
195,053
On -Site Mena er
$ 480
3.0%
3.5%
97,501
100,913
104,445
108,101
111,884
Maintenance Personnel
$ 239
1.5%
3.5%
48,525
50,223
51,981
53,800
55,683
Other. Payroll Taxes, Work Comp, Benefits
$ 179
1.1%
3.5%
36,393
37,667
38,986 1
40,350
41,762
Insurance
$ 180
1.1%
3.5%
36,563
37,842
39,167
40,538
41,957
Painting
$ 50
0.3%
3.5%
10,156
10,512
10,880
11,260
11,655
Repairs
$ 599
3.8%
3.5%
121,594
125,849
130,254
134,813
139,531
Trash Removal
$ 359
2.3%
3.5%
72,928
75,480
78,122
80,857
83,687
Extenninating
$ 13
0.1%
3.5%
2,680
2,774
2,871
2,972
3,076
Grounds
$ 299
1.9%
3.5%
60,797
62,925
65,127
67,407
69,766
Elevator
$ 69
0.4%
1 3.5%
14,106
14,600
15,111
15,640
16,187
Other: Cleaning & Building Supplies
$ 479
3.0%
3.5%
97,331
100,738
104,264
107,913
111,690
Other: Licenses
$ 2
0.0%
3.5%
494
511
529
547
567
Other: State Tax
$ 6
0.0%
3.5%
1,128
1,168
1,209
1,251
1,295
Other: Issuer/ Trustee Fees
$ 127
0.8%
3.5%
25,743
26,644
27,577
28,542
29,541
Other:
$
0.0%
3.5°%
Other:
$
0.0%
3.5%
-
-
TOTAL OPERATING EXPENSES
S 5,325
1,081,675
1,119,534
1,158,718
1,199,273
1,241,247
Internet Expense
$
0.0%
3.5%
Service Amenities
$
0.0%
3.5%
Reserve for Replacement
$ 300
1.9%
0.0%
43,200
43,200
43,200
43,200
43,200
Rest Estate Taxes
$ 355
2.2%
2.0%
62,291
63,536
64,807
66,103
67,425
TOTAL EXPENSES, TAXES & RESERVES
S 5,980
1,187,166
1,226,270
1,266,725
1,308,576
1,351,873
CASH FLOW AVAILABLE FOR DEBT SERVICE
1,724,539
1,758,227
1,792,385
1,827,012
1,862,104
DEBT SERVICE& OTHER DISTRIBUTIONS
Loan Amount
Year - II
Year -12
Year -13
Year -14
Year -15
Tax-Exem tBonds-SeriesA
Hard
$ 20,500,000
1,164,216
1,164,216
1,164,216
1,164,216
1,164,216
Other
NA
$
Asset Management Fees
Soft
$ 24,400
24,400
24,400
24,400
24,400
24,400
Other
Soft
$
Tax-Exem tBonds-SeriesB
So
$ 16,000,000
401,942
427,208
452,827
478,797
505,116
Other
S - ft
$
Other
So r
$
Other
Sofi
$
ANNUAL NET CASH FLOW
133,981
142,403
150,942
159,599
168,372
Deferred Dev. Fee Balance
Interest Rate:
0.00%
-
Debt Service Coverage Ratio on Hard Deb
I
I
I
1.48
1.51
1.54
1.57
1.60
Meta Housing Corporation - Revised Proposal
(060915)
BURLINGAME ARTS COLONY
META HOUSING CORPORATION
RESPONSE TO THE CITY OF BURLINGA31E RFP DATED 1/30/15
Revised 5/8/15
Tkv Art of Airy:`,,,,,
r��Ox- -
Meta Housing Corporation
0a�a aaka,ArchlWe
JCbarchilecGcom
Submitted: May 8, 2015
COVER LETTER
May 8, 2015
William Meeker
Community Development Director
City of Burlingame
501 Primrose Road Meta Housing Corporation
Burlingame, California 94010
RE: Downtown Burlingame Affordable Housing Development Opportunity Revised Proposal
Dear Mr. Meeker:
Meta Housing Corporation ("Meta") is excited to present the enclosed revised proposal to develop the Burlingame Arts Colony ("BAC") on Lots
F and N in downtown Burlingame. At your request we have taken the comments and feedback received at the March 26th, 2015 City Council
meeting and further refined and improved our project design concept and financing strategy.
To address the City's requests we have incorporated the following revisions to our original proposal:
Financing
» Additional gap funding from San Mateo County and the Housing & Community Development Department of the State of California will
be secured for the project, and no additional direct subsidy will be requested of the City of Burlingame.
Design
» We have limited the project to a reasonable density while maintaining financial feasibility.
» The BAC provides a significant net increase in total public parking spaces on the site.
» We will both collaborate closely with City stakeholders and consider current downtown Burlingame architecture and the project's fit
into the downtown context when designing the BAC.
Miscellaneous
» We have added the option of developing the BAC for seniors if the City prefers, as it will have less of an impact on the already -high
demand for parking in the downtown core.
» We have maintained the arts connectivity and the open courtyard and walkability that our originally proposed design provided.
The proposed BAC will still be a LEED-Platinum certified affordable housing project with iconic design and plentiful community facilities. It will
include the construction and delivery to the City of a five -story parking structure to replace the existing surface parking, and will additionally
provide up to 75 additional parking spaces in the Senior option or 63 additional parking spaces in the Family option. The parking structure will
be lined by apartments along Park Road to maintain the attractiveness of the block, and the BAC will transform an underused surface lot into
a beautiful, thriving housing community richly supporting the creation, display, and promotion of arts of all types and the continued health and
growth of the residents and the community.
We propose financing the BAC with 9% tax credits, regardless of the City's preferred target population of seniors or families. Both options and
various innovative financing strategies are discussed in detail within the proposal.
Our financing plan is both practical and achievable, and our qualifications reinforce our dedication to successful projects. We are confident in
our ability to make this project a success, and look forward to discussing with you further. Please contact me at your convenience at (310) 575-
3543 x109 or amandel@metahousing.com at any time to discuss in greater detail the contents of the enclosed proposal. Thank you for your
consideration.
Sincerely,
Aaron Mandel, Senior Vice President
Meta Housing Corporation
Ti Meta Housing Corporation JILIY 8, 20]5 CITY OF BURLINUAME- REVISED PROPOSAL/ 2
Cover Letter
Cover Letter/Introduction.........................................2
1. Development Team
Development Team....................................................5
2. Proposed Project
A. Project Overview
Development Concept (Vision and Usage)...............8
Target Population....................................................11
Additional Benefits.................................................13
B. Project Design Summary
Design Concept.......................................................16
Type of Use and Anticipated Number of Units ....... 17
UnitMix..................................................................19
Parking Summary ....................................................19
Project Design Precedents......................................20
Senior Option
SitePlan..................................................................24
FloorPlans..............................................................25
Site Section............................................................27
SiteAerial...............................................................28
Art Garden Vignette................................................29
Zoning Diagram......................................................30
(Meta Housing Corporation
TABLE OF CONTENTS
BURLINGAME ARTS COLONY RFP
Family Option
SitePlan..................................................................32
FloorPlans..............................................................33
Site Section............................................................35
SiteAerial...............................................................36
Art Garden Vignette................................................37
Zning Diagram........................................................38
3. Financing Summary
A. Financing Plan
Financing Plan.........................................................41
Senior 9% Option
Sources and Uses...................................................44
Residential Rent Assumptions and Unit Mix ......... 45
Project Budget........................................................46
Operating Budget....................................................48
Family 9% Option
Sources and Uses...................................................50
Residential Rent Assumptions and Unit Mix ......... 51
Project Budget........................................................52
Operating Budget....................................................54
4. Anticipated Project Timeline
Development Timeline............................................56
iWAY 8, 2015 CITY OF BURLINGAME- REVISED PROPOSAL/ 3
1 CIA'
ACQUIRING ENTITY
To Be Formed LP c/o Meta Housing Corporation
1640 S. Sepulveda Blvd., Suite 425, Los Angeles, CA 90025
DEVELOPER / ADMINISTRATIVE GENER 1L PARTNER
Meta Housing Corporation
1640 S. Sepulveda Blvd., Suite 425, Los Angeles, CA 90025
(310) 575-3543 x1081 cmaffris@metahousing.com
Aaron Mandel Senior Vice President Oversight
Tim Soule Senior Project Manager Project Management
Frannie Hemmelgarn Asst. Project Manager Project Management
I KaseyBurke ) President ( Oversight I
6\:INiIYYNNY
David Baker Architects
461 Second Street I Loft cl27 1 San Francsico, CA 94107
(415) 896-6700 info@dbarchitect.com
Name Title
,i
David Baker, FAIA Principal Project Design
Daniel Simons, AIA Principal Project Design
Amanda Loper, AIA Principal Project Cesign
KKG, Inc.
123 E. 9th Street, Suite 2011 Upland CA 91786
(909)624-6222 1 bkent@kkginc.com
Brian Kent Founder/ President Construction
Management
r%Meta Housing Corporation
DEVELOPMENT TEAM
SUSTAINABILITY CONSULTANT
Davis Energy Group
123 C Street I Davis, California
(530) 753-1100 I deq@davidenergy.com
Name
Title
Role
David Springer
Founding Principal
Sustainability
Consultant
Mark Berman
President
Sustainability
Consultant
Pepper Smith
Director of Residential
Sustainability
Programs
Consultant
PROPERTY )LANAGEI4 ENT
Cambridge Real Estate Services
PO Box 2966 1 Portland, OR 97208
(503) 450-0230 1 jpassadore@cambridgeres.com
RESIDENT SERVICES
Ell
240 E. Verdugo Avenue I Burbank, CA 91502
(818) 563-9750 1 tim@engagedaging.org
Name Title Role
Tim Carpenter Executive Director Resident Services
Coordinator
111.1Y 8, 2015 CITY OF BURLINGAME. REVISED PROPOSAL/ 5
Jeff Passadore President
Property Management
Contact
RESIDENT SERVICES
Ell
240 E. Verdugo Avenue I Burbank, CA 91502
(818) 563-9750 1 tim@engagedaging.org
Name Title Role
Tim Carpenter Executive Director Resident Services
Coordinator
111.1Y 8, 2015 CITY OF BURLINGAME. REVISED PROPOSAL/ 5
PROPOSED PROJECT
Project Overview
Meta Housing Corporation
PROJECT OVERVIEW
Development Concept (Vision and Usage)
Overview
The Burlingame Arts Colony (BAC) supports and encourages the creative class by fostering an environment where artists
and their families can thrive. It will draw in seniors or families from the adjacent neighborhood with its programming and
events. Lots F and N will be transformed into a creative campus with affordable artist housing, maker and community
facilities, and a parking structure for the central business district.
The deed -restricted affordable housing will target a variety of income levels, from 30% of Area Median Income (AMI) to
60% AMI. The blend of 1 -bedroom, 2 -bedroom, and 3 -bedroom (family option) units will encourage a diverse selection
of working artists and creative seniors or artists and their families. The overall unit count in the Senior Option is 73
units, while the overall unit count in the family option is 66 units; the breakdown of unit counts and sizes is shown in
Section 2B: Project Design Summary.
Incomes of residents will vary from $23,250 for a single artist in a 1 -bedroom, up to $71,760 for a family of five in a
three-bedroom unit. 1 -bedroom rents will range from $622 to $1,245.2-hedroom rents will range from $747 to $1,495.
The 3 -bedroom unit rents will vary from $863 to $1,727. These income and rent levels will result in a symbiotic mix of
working artists and creative working professionals, who might not be able to interact otherwise.
Parking
A crucial component of our plan is to include a public parking structure an Lot Fwith parking that exceeds the current
counts of Lots F and N combined. Lot F will contain 273 spaces in both the Senior and Family options, and Lot N will
contain 82 space in both the Senior and Family options, for a total of 355 spaces in both options. The 31 to 36 Residents
who live in the units along Park Road will have shared access to the structures. There will be a total of 274 and 261
public spaces in the Senior and Family options, respectively, and a total of 81 and 94 public spaces in the Senior and
Family options, respectively.
We have paid close attention to minimizing the impact of the parking structure on the surrounding neighborhood. First,
we will line Park Street with residential units, hiding the parking structure behind them. Aside from the parking ramp
on Park Street, passersby will not be able to identify the site as a parking structure. Second, we will transform the long
connector portion of Lot F to Lorton Street into an arts garden with maker spaces, planter beds for gardening, and an
outdoor performance space.
BAC honors Burlingame's economic development vision
Burlingame Arts Colony will provide an iconic arts -related entry that represents the working creative class that is
rapidly fleeing the area as housing costs spike. BAC artists may have an opportunity for exposure to the community
by either displaying their work in the lobby gallery fronting Lorton, in the forecourt gallery, or in the sculpture garden
in the art garden on Lot F. It should be added that these galleries can include physical art, musical arts, or be used for
small performances or readings. This ability to share resident art with the greater community is what will connect the
development to the greater vision of catalyzing the downtown area.
That said, the Burlingame Arts Colony isn't just for artists. BAC will promote for cultural symbiosis, as BAC families
need only walk a block or two to see, hear, and be inspired by all the charm that downtown Burlingame has to offer.
Our decision to line Park Road with apartment units as the facade instead of a parking structure as the facade will result
in more residents having closer access to Howard Avenue and the rest of the central business district.
Meta Housing Corporation AIAY8, 2015 CITY OF BURLINGAME- REVISED PROPOSAL/ 8
PROJECT OVERVIEW
The BAC satisfies the following elements of the Downtown Specific Plan:
*Arts -related goals are highlighted
LAND USE
,/ Policy LU -2.2: Encourages a mix of uses in areas currently dominated by a single land use.
✓ Policy LU -3.1: Provides for sufficient residential density to support those uses.
✓ Policy LU -4.2: Promotes the civic role of Downtown through public art, open space, and public facilities
✓ Policy LU -5.2: Promotes public/private partnerships for redevelopment of City -owned properties.
✓ Policy LU -5.3: Encourages a diverse mix of uses that includes a variety of business types and housing options.
PARKING
✓ Policy P-1.1: Encourages the use of "alternative" vehicle types with ample bicycle parking and free parking for
electric cars.
✓ Policy P-1.2: Devotes less land for parking Downtown while accommodating increased demand by using the land
more efficiently with decked or underground parking.
✓ Policy P-1.3: Conceals parking areas through the use of attractively designed above- or below -ground parking
structures.
✓ Policy P-1.4: Provides incentives for joint ventures between the City and developers for new development that
includes public parking facilities.
✓ Policy P-3.2: Ensures downtown parking is conveniently located.
✓ Policy P-3.3: Provides better signage showing the location of parking facilities, the range of parking payment
levels, and parking terms (i.e. 1 hour, 2 hours, etc.).
✓ Policy P-5.1: Consolidate parking lots in a convenient, centralized location such as a parking structure or
underground parking on Lot J.
✓ Policy P-5.2: Construct well-designed parking garages in central locations.
STREETSCAPE
Policy S-4.1: Provides ample room for pedestrians, including accommodating pedestrians with varying levels of
mobility.
✓ Policy S-4.2: Encourages outdoor business activities on the streets and sidewalks such as outdoor displays.
✓ Policy S-4.4: Creates spaces for pedestrian pausing; small areas out of the main flow.
✓ Policy S-4.5: Incorporates more public art Downtown, including sculptures and murals. Provide opportunities for
"art for the public" that is fitting and relevant to the context. Create a mechanism to facilitate art Downtown.
OPEN SPACE
Policy D-3.1: Ensures that new development is appropriate to Burlingame with respect to size and design.
✓ Policy D-4.1: Buildings will be built out to the sidewalk, with doors and windows facing the sidewalk to create a
lively pedestrian environment.
✓ Goal 0-5: Explores ways of promoting green design in the downtown area; includes design that decreases the
carbon footprint.
INFRASTRUCTURE
,✓ Policy 1-2.1: Includes solar (photovoltaic) panels and/or small wind turbines on top of parking lots/structures.
Ti Meta Housing Corporation MAY8, 2015 CITY OF BURLINGAME- REVISED PROPOSAL/ 9
PROJECT OVERVIEW
BAC maximizes leverage of Burlingame's resources f
We respectfully request that the City of Burlingame donate the land to the project so that we can leverage outside 1
resources.
Thanks to very high land prices, the Project will leverage the City of Burlingame land donation to secure an award of
CTCAC 9% tax Credits in the First Round of 2015. Based on the anticipated conditions of the 9% tax credit equity
market, we have underwritten tax credit pricing conservatively at $1.13 per credit.
BAC is pursuing the LEED for Homes Platinum certification level under the USGBC
LIKED rating system.
Further detail about the sustainability engineer is provided in Development Team section of this proposal.
Meta Housing Corporation MAY8, 2815 CITY OF BURLINGAME- REVISED PROPOSAL/ 10
PROJECT OVERVIEW
Target Population
Creative class target population
The target population is people who express themselves through a medium. Described another way, it's people who
create, curate, teach, or propagate imaginative works of aesthetic, functional or theatrical value using a wide variety
of artistic mediums. They can be technicians, entertainers, artisans, fine artists or applied artists.
Though the following list of possible vocations is extensive, it is not intended to be comprehensive.
A person who works in, or is skilled in any of the fine arts, including but not limited to, painting, drawing, sculpture,
book arts, printmaking and mixed -media;
A person who creates imaginative works of aestheticvalue including butnot limited to literature, poetry, photography,
music composition, choreography, architecture, film and video;
A person who creates functional art including but not limited to jewelry, rugs, furniture, pottery, toys, and quilts;
A performer or theatrical artist, including but not limited to singers, dancers, musicians, actors, performance artists,
costume, lighting, sound, and set designers; and
In all art disciplines, a designer, technician, craftsperson, teacher, or administrator who is dedicated to using their
expertise within the community to support, promote, present, and/or teach and propagate their art form through
events, activities, performances, culinary arts and classes.
Artist preference is protected in the new housing law
H.R. 3221, also known as the Housing and Economic Recovery Act of 2008, confirms the right of developers to use
federal Low Income Housing Tax Credits to finance affordable housing targeted to certain specified groups — including
artists. Buried deep in the bill was this brief amendment to the tax credit law: "A project does not fail to meet the
general public use requirement solely because of occupancy restrictions or preferences that favor tenants... who are
involved in artistic or literary activities." Similar language protected projects for any "specified group" designated by
a federal or state program (farm workers, teachers, police and fire workers, unwed teen mothers, among others). Two
pages later, a second short passage made the entire amendment applicable "to buildings placed in service before, on,
or after the enactment" of H.R. 3221.
Such a preference is permissible under the "general public use" requirements of Section 42. However, in order to use
such a preference, you would still need to comply with federal and state fair housing laws (i.e. the use of the preference
cannot have a disparate impact on a protected class).
(g) CLARIFICATION OF GENERAL USE REQUIREMENT. —Subsection (g) of section 42 is amended by adding at
the end of the following new paragraph: "(9) CLARIFICATION OF GENERAL PUBLIC USE REQUIREMENT. —A
project does not fail to meet the general public use requirement solely because of occupancy restrictions or
preferences that favor tenants —
(A) with special needs,
(B) who are member of a specified group under a Federal program or State program or policy that supports
housing for such a specified group, or
(C) who are involved in artistic or literary activities. "
eta Housing Corporation IL4Y 8, 2015 CITY OF BURLINGAME- REVISED PROPOSAL/ 1 I
PROJECT OVERVIEW
Affordability Summary
The Senior Option will have 72 units of deed -restricted affordable housing that will target a variety of income levels,
from 30% of Area Median Income (AMI) to 60% AMI and 1 manager's unit. The Family Option will have 65 deed -
restricted affordable housing that will target a variety of income levels, from 30% of Area Median Income (AMI) to
60% AMI. In the Senior scenario the blend of 1 -bedroom and 2 -bedroom will encourage a diverse selection of working
artists and creative seniors, while in the Family scenario, the addition of 3 -bedroom units will also encourage artists
with families.
Incomes of residents will vary from $23,250 for a single artist in a 1 -bedroom, up to $71,760 for a family of five in a
three-bedroom unit. 1-hedroom rents will range from $626 to $1,286. 2 -bedroom rents will range from $751 to $1,542.
The 3 -bedroom unit rents will vary from $865 to $1,779.
%AMI #Units Snr.9%Option # Units Fam.9%Option
30% 8 6
40% 15 13
50% 29 26
60% 20 20
Total 72 65
Manager 1 1
BAC's affordable housing units are spacious and designed specifically for creative indviduals, families and arts
stakeholders. The apartments represent a variety of unit types, from one -bedroom lofts, to one -,two- and three-
bedroom flats.
Assumptions about occupancy and affordability
1. This development will service households earning 30% to 60% of the San Mateo County Area Median Gross
Income published by the California Tax Credit Allocation Committee.
2. Affordable monthly rents are calculated by multiplying the San Mateo County area income levels by30%, adjusting
for household size, and dividing by 12. A household size of 3 is used to calculate the affordable housing cost for a
2 bedroom unit and a household size of 4.5 is used to calculate affordable housing cost of a 3 bedroom unit.
3. Occupancy is set at a maximum of two persons per bedroom plus one. The range of occupancy per unit size is:
» One -bedroom
1-2 people
» Two -bedrooms
2-5 people
» Three -bedrooms
4-7 people
Meta Housing Corporation ATAY 8, 2015 CITY OF BURLBVGADIE- REVISED PROPOSAL/ 12
v
E
PROJECT OVERVIEW
Additional Benefits
Tenant leadership of arts programming and teaching to the broader community
It is our hope that the colony will foster creativity and a community connection to the creative process. In addition to
producing art, we anticipate our tenants will have two -fold involvement with the community. First, they can encourage
original thinking and imagination by helping people acquire the tools to generate original ideas. The ability to generate
ideas is central to the process of art, and indeed cultural progress. Second, we hope they can help each other and
broader community members gain the skills necessary to successfully convey ideas through works of art, designs, and
composition. While it's not our goal to grow a new generation of artists, it is our goal to build confidence in critical and
imaginative thinking and creativity.
Existing Resources in Burlingame
The established arts scene in Burlingame is very complementary to our plans for the BAC. The Peninsula Museum
of Arts conducts studio classes and contains artist studios. The BAC could become a feeder for resident artists to
move into those spaces, and the community programming between the two organizations can be symbiotic. With
the Museum of Art being located closer to Millbrae, California Ave would be effectively bookended with two exciting
community arts facilities for maximum reach in the community.
Collaborative service delivery —
We anticipate that Burlingame Arts Colony will house an informed citizenry. What this means for our service provider
EngAge and the tenant population is that public service delivery relationship will be more collaborative. To demonstrate,
Meta's President John Huskey jokes that activities at the arts colonies involve "letting the inmates manage the asylum"
and that sometimes it is "like herding cats," but working together "makes people healthier, helps them to live longer,
and raises their self-reported level of happiness."
Service provider EngAGE will provide high-quality coordination services designed to improve the quality of life for
tenants. Through direct and active coordination, services will be appropriate to meetthe needs of the tenant population
served and designed to generate positive changes in the lives of tenants, such as by increasing tenant knowledge of
and access to available services, increasing household income and assets, and improving the educational success of
children and youth. EngAGE will create collaborative partnerships between organizations and stakeholders, to ensure
that community members have access to a full array of timely, tenant -responsive educational, health and wellness, and
skill building classes. On-site services will complement off-site services already available to tenants.
EngAGE's responsibilities may include:
» Assisting tenants, through interviews, surveys, and community meetings, to identify the services needed.
» Identifying needed arts equipment including pottery wheels, easels, a spray box, and supply storage.
» Identifying appropriate arts -related software
» Hosting workshops to explore hot topics in the arts including creative writing, computer literacy.
» Developing and maintaining partnerships with local providers of services to use the site as platform in which to
deliver services.
» Linking tenants with existing programs and services in the community.
» Serving as a representative in the community for services offered to tenants.
» Coordinating the staffing and presentation of on-site classes, programs and services.
(Meta Housing Corporation MAY 8,2015 CITY OF BURLINGAME- REVISED PROPOSAL/ 13
PROJECT OVERVIEW
» Developing and maintaining relationships with property managers and arranging biannual meetings to discuss
program opportunities or needs.
» Integrating the BAC into the fabric of the Burlingame community.
» Facilitating partnerships with local arts organizations.
» Participating in the creation of budgets for tenant service programs, and monitoring adherence to those budgets.
» Developing and maintaining the resource directory that lists local service providers.
The project includes abundant physical space for service amenities. We are committed to providing services within six
(6) months of the project's placed -in-service date and for a minimum period of 10 years. All services will be of a regular
and ongoing nature and provided to tenants free of charge.
Sustainable/green features
The project is pursuing the LEED for Homes Platinum certification level under the well-recognized USGBC LEED rating
system. The LEED (Leadership in Energy and Environmental Design) rating system has been selected for a number of
reasons:
» It is a well-recognized program amongst affordable and market -rate residential projects
» It provides the most comprehensive set of requirements of any residential green rating system available in the
United States, allowing the team to pursue the credits which best suit the project
» The design team's familiarity and success with the rating system
» Site location and proximity to community services provide a number of 'free' credits
To achieve LEED Platinum, Meta will utilize a combination of passive and active systems. Below is our preliminary list
of sustainability strategies.
» Use of drought -tolerant landscaping to reduce reliance on water for irrigation
» High efficiency plumbing fixtures, including high efficiency cooling and heating systems (SEER 16), and high
efficiency, centralized domestic hot water system (at 98% thermal efficiency)
» HERS measures (Duct Leakage Testing, Quality Insulation Installation, Refrigerant Charge Testing, and Verified Air
Conditioning EER)
» Energy Star Appliances
» High efficiency lighting throughout all the common areas of the building and site
» Maximize possible credits under energy efficiency by the using high insulation values at wall (R21), roof IRK), and
exposed floors (R30); and high efficiency vinyl windows (SHGC=0.18, Tvis=0.50 and U-factor=0.28 Btu/hF sq ft)
» Framing efficiency to cut down on timber waste
» The use of certified wood and environmentally preferable products (whenever available)
» Reduced waste during construction
Additional Parking
In both Options, additional parking will be provided that can be utilized by visitors and local businesses.
; Meta Housing Corporation MAY 8, 2015 CITY OF RDRLINGAAIE- REVISED PROPOSAL/ 14
Project Design Summary
Meta Housing Corporation
Design Concept
Burlingame Arts Community (BAC) brings a vibrant locus
of creativity and affordable housing to the Downtown
Burlingame area. This development is inspired by—and
in turn will inspire --a sense of creative collaboration
between the City, the new downtown specific plan, and
the individuals and/or families looking for a dynamic
home that supports creative expression.
The senior and family options have very similar designs,
but for unit count and unit mix, so the following design
description applies to both project options.
This affordable arts -oriented community will target
working artists and creative types, as well as the growing
family population in Burlingame or seniors with an interest
in the arts, depending on the City's preference. Ample new
affordable homes and significant replacement and new
parking to enhance the City's downtown infrastructure
will be included as a keycomponent in the project design.
The overall development provides either 66 (Family) or 73
(Senior) residential units with approximately 355 parking
spaces across two parking structures. The parking totals
incorporate the replacement for parking from Lots F and
N, all parking for new units, and an additional 63 to 75
new public parking spaces in the Lot F Structure.
The BAC spans two lots bounded by Park Street and
Highland Ave. and creates an enhanced connection
across Lorton Avenue, which becomes a central node
of the new neighborhood. The plan includes three
residential structures, a full ground -floor of community
uses, freestanding art pavilions, and two main courtyards,
each with a different focus.
The new buildings actively engage the street with
residential entries, art and garden plazas, and event
spaces at these edges, and provide sheltered spaces
dedicated to cultivating community.
At its center, the development's most public faces span
Lorton Ave. The central building has a dynamic gallery
space that opens onto a plaza on the north side of the
street, and the lobby will be entered from Lorton as well.
Art and community events percolate out to the street
and throughout the ground floor of this building, which
is dedicated to flexible common uses—including a tech
�iMeta Housing Corporation
PROJECT DESIGN SUMMARY
lab, craft space, and community kitchen. At the far end,
the building opens onto a large "cultivation" courtyard,
dotted with garden planting beds, kids' play areas, and a
large and shaded shared farm table.
Atop this community hub, either 19 two- and three-
bedroom units designed for families or 23 one- and two-
bedroom units designed for seniors overlook the plaza
or courtyard. The four levels of housing step down to
two levels as the building nears the Lorton Ave. street
edge, with a living roof bringing a flash of green to the
apartmentviews and helping manage rain water.
To the north the courtyard is bounded by a smaller
residential structure housing 16 units (family) or 27 units
(senior) and entered from Highland Ave., which frames
and shelters the center courtyard.
Lot N accommodates these two structures—actually one
building sharing a one -level below -grade parking garage,
which provides 82 secured and assigned residential
parking stalls for the units above.
Across Lorton Ave. the gallery corner faces the entry
to the Art Garden, a dynamic multi -use plaza. The Art
Garden is the spine of the development, serving as a
connector between the central community building, the
parking garage, and the Park Ave. housing, as well as
being a destination in itself.
The Art Garden opens with a mixed-use plaza. Lined with
permeable pavers and riotous planted bioswales, this
dynamic garden plaza that contains spaces for sculptures
and sculptural seating, movable seating, a performance
area, and flexible spots for inspired contemplation or
collaboration. On the west edge it is lined with studio
and maker spaces—both indoors and out for small -
and large-scale works—that can accommodate a wide
range of creative enterprises. Designed for gathering and
inspiration, the Art Garden also serves as a delightful
pathway to the residential garage.
At the south end of the site along Park Road, a finer -
grained row of 7 live -work artist -style lofts connects
to the active sidewalk. In keeping with the pedestrian
upgrades recently completed by the City, this residential
row features at -grade patios and windows overlooking
the street.
MAY8, 2015 CITY OF BURLINGAME- REVISED PROPOSAL/ 16
Topped with 23 (senior) or 31 (family) units, the housing
fronts the community -serving garage. The garage, with
one level below grade and four levels above grade, is
topped with roof parking open to the air and lined on three
sides with a living bamboo screen, providing glimpses of
green for the Art Garden and surrounding streets.
Contextual Design
Both proposals are inspired by Burlingame's Downtown
plan and future aspirations while keeping in mind the rich
architectural history of Burlingame's existing architecture
and scale. This plan balances density with livability by
not exceeding or even meeting the allowable height
limit on most of the site. An efficient garage on Lot F
meets the height limit but is hidden from the street by
a contextually scaled four-story apartment building with
active ground floor residences and patios. The rest of
the site consists of lush green spaces, one to two story
structures and another four story building residential
stoops facing Highland Avenue.
Burlingame Design
The architectural design of Lots F and N will be heavily
influenced by a collaborative and authentic community
design process. When working in any neighborhood
Meta Housing Corp. and David Baker Architects meet
early and often with community and city stakeholders
to gather feedback that will influence and inspire the
architectural design, and collaborate closely with the
community and stakeholders throughout the design
process until consensus is achieved. With this process
in mind, the project team has gathered local precedents
to understand important and noteworthy buildings within
Burlingame, and we anticipate these structures and the
public process will significantly inspire and inform the
final architectural product.
Project Design Precedents can be found on page 20 of
this proposal.
Type of Use and Anticipat-
ed Number of Units
Breakdown of site use
The building design addresses artists' needs for light,
volume, privacy, integration, display, and function. While
Meta Housing Corporation
PROJECT DESIGN SUMMARY
the development connects residents to downtown and
the train station with its location, it also creates within
a sanctuary for them. The building will contain artist loft
studios on Lot N, and one-, two-, and three-bedroom flats
(Family Option) organized around a podium -level outdoor
plaza on Lot F. The massing and organization emphasizes
light, cross views, and transparency.
Sixty -Six to Seventy -Three Affordable
Housing Units
BAC's affordable housing units will include a variety of
unit types, from one -bedroom lofts, to one-, two- and
three-bedroom flats (Family Option). Unit sizes exceed
TCAC thresholds by 15% to 25% and range from 610
to 1,160 square feet. The spaces are large in order to
accommodate large works and any equipment required
to create it. In addition to this interior square footage,
some units have extra exterior space. Units fronting the
podium -level courtyard will have large patios of eight
feet deep to allow artists to work outside within the
courtyard. Some units may also have large roll -up doors
that will provide even larger work areas.
These outdoor work areas will help sculptors explore the
process of doing and understanding. It is messy, non-
precious space where people can experiment with the
creation and communication of ideas through sculpture.
On occasion the podium level garden can also be opened
to the outside for public sculpture displays.
Additional arts -focused features within the units will
include open floor plans and durable flooring, millwork,
and countertops.
Unit Type # Units # Units Size
Snr 9% Fam 9%
Option Option
1 Bedroom 58 31 610 - 730 sf
2 Bed/l Bath 15 15 885 - 955 sf
3 Bed/2 Bath 0 20 1,160 sf
Total 73 66
Landmark Towers with Active
Programming Uses
Activated spaces are clustered along Norton and in Lot F.
The building on Lot F will contain a residential entry, arts
ATAY8,20I5 CITY OF BURLING_AME- REVISED PROPOSAL/ 17
PROJECT DESIGN SUMMARY
display area, services space, and a media lab. The smaller building on Lot N will house an arts studio, classroom, and
gallery space. Together the arts studio and gallery space front Norton and will be visible from Howard Ave.
Here is more about specific community spaces within the Burlingame Arts Colony.
1. An Idea Lab will be housed in the building on the Lot N side. The Idea Lab is where the process of doing and
understanding takes place. It is messy, non -precious space where people can experiment with the creation and
communication of ideas. We hope to include in this space pottery wheels, easels, a spray box, and supply storage.
2. An Art Gallery will also be housed in the tower at the parking court. A gallery is iconic in nature and this one
should be utilized by tenants and broader community members alike. It can be occupied by physical art, musical
arts, or used for small performance space or readings.
3. Digital and Media Lab. This space will be a hazard -free area for children to use for arts and education.
4. Outdoor Work Decks will be available to flats on the podium level that backup onto the central outdoor plaza.
The outdoor work decks serve the same purpose as the Idea Lab but are primarily for sculpture. These decks are
eight feet deep.
Iconic arts -related entry
The Burlingame Arts Colony building will provide an iconic architecture that can be seen from Howard Avenue. This
arts -related facade will draw patrons farther east on their way to and from the Caltrain station.
The Lot F parking structure will include wide sidewalks and lush landscaping that links the structure to Lorton. This
small section that connects Lot F to Lorton will be transformed into an Arts Garden, with maker spaces, raised planter
beds, and outdoor performance space. This space will instantly become a key attraction downtown.
The building fagade will tell a story about BAC, its occupants, its programs, and its community linkages. The ground
floor community center on Lot N reveals a messy fine arts lab next to an arts galleryand the common areas. Visitors are
instantly confronted with the Colony's mission: to provide tools and opportunity for original thinking and imagination,
and to give people the confidence to transform these ideas into works of value. As a gallery should, this story changes
with who is using the spaces.
Other Amenities
The project will also have other amenities to ease living, including:
» On-site laundry
» Tot lot
» Offices for property managers and social service providers
» ADA accessible units
» Manager's unit
l I meta Housing Corporation MAY8,2015 CITY OF BURLINGAAIE- REVISED PROPOSAL/ III
PROJECT DESIGN SUMMARY
Unit Mix
Unit Breakdown
Bedrooms AMI
No. of Units Snr. 9%
No. of Units Fam 9%
1 BR 30%
6
3
11319 40%
12
6
1 BR 50%
24
12
1 BR 60%
15
10
2 BR 30%
2
1
2 BR 40%
3
3
2 BR 50%
5
6
2 BR 60%
4
4
3 BR 30%
0
2
3 BR 40%
0
4
3 BR 50%
0
8
3 BR 60%
0
6
Total Affordable
72
65
2 BR Manager
1
1
Total Units
73
66
Parking Summary
i Space Breakdown
Parking
Family
Senior
Lot F - Public
240
246
Lot F - Residential
33
27
Subtotal - Lot F
Lot N - Public
273
21
273
28
Lot N - Residential
61
54
Subtotal - Lot N
82
82
Total
355
355
Subtotal - Public
261
274
Subtotal - Residential
94
81
Total
355
355
}, Meta Housing Corporation IT4Y 8, 2015 CITY OF BURLINGAME- REVISED PROPOSAL/ 19
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FINANCING SUMMARY
Financing Plan
Meta Housing Corporation
FINANCING PLAN
Financing Plan
Summary
In an effort to meet a wider variety of City objectives, we propose financing the BAC with 9% tax credits for the Senior
and Family design options. The differences in the Options are summarized as follows:
Summary of Financing Options
Financing Tools
» Leased land from the City of Burlingame. BAC proposes to lease both parcels for the appraised value
(approximately $8.5 Million), paid as a capitalized ground lease payment, plus a share of residual receipts for a
minimum of 55 years. The City would then loan us back the full amount of the capitalized lease payment.
» Low Income Housing Tax Credits. Tax Credits are administered by the California Tax Credit Allocation Committee
(TCAC).
» 9% tax credits are competitively allocated twice per year.
» Meta Housing is one of the State's most successful applicants for tax credits over the last 10 years and we
are confident that we can produce a winning application.
» Impact fees. We assume the City Council will require the project pay outsized parking impact fees in exchange for
entitlements of at least $4 Million. We request this fee be loaned back to the project to offset some of the costs of
replacing parking. This money would be loaned from the City to the project, resulting in no net cost to the City on
the project, and would generate additional tax credit proceeds.
» Federal Home Loan Bank Affordable Housing Program (AHP). If the City of Burlingame chooses to develop
either a 9% senior project, BAC will apply for AHP funds. Meta Housing Corporation has a very successful track
record structuring projects so they are successful in competition for AHP grants.
Affordable Housing and Sustainable Community Program (AHSC) The AHSC program funds land -use housing
and transportation projects to support infill and compact development that reduce greenhouse gas emissions. The
second round of the program is expected to have least $200 million in funding for AHSC projects, and even more in
2010. There are two funding set -asides for the AHSC program, Transit Oriented Development (TOD) and Integrated
Connectivity Projects (ICP). We believe we can put together a winning application for the ICP set-aside if we pursue
a 9% Senior or Family financing strategy. A project that meets the threshold requirements and scores competitively
in the AHSC program is a project that not only creates affordable housing but also increases accessibility to
employment centers, key destinations in the community and transit. Below is an outline of some key points and
requirements that will be relevant to BAC:
» Integrated Connectivity Project (ICP) require at least one transit station/stop that has qualifying transit,
the BAC project site is close enough to several qualifying transit stops
» ICP projects must include at least two capital projects, BAC will apply with either two or three capital
projects including an Affordable Housing Development, Housing Related Infrastructure and Transportation
Related Infrastructure.
» BAC will work with the city to plan the Transportation Related Infrastructure that will strengthen
�_Imeta Housing Corporation MAY 8, 2015 CITY OF BURLINGAME- REVISED PROPOSAL/ 41
FINANCING PLAN
the connection to transit stations/stops around the project site. This will benefit the entire Burlingame
community.
» The Department of Housing (DOH) & Housing Authority of the County of San Mateo (HACSM). Each year
DOH and HACSM invites developers of affordable new -construction multifamily rental housing projects to submit
application for funding assistance under a NOFA. DOH/HACSM allocates up to $100,000 per DOH/HACSM unit,
and a maximum of $2,500,000. Given the proposed unit count, BAC believe we can be competitive applying for the
maximum amount of $2,500,000.
» Parking Revenues. We will design and build the parking structure, and at this time we assume the City would be
the owner and operator of the garage in perpetuity for efficiency and scalability reasons. We do not include any
annual parking revenues or costs in our financial pro forma's. We believe there may be additional opportunities to
leverage debt for the parking structure using net revenue from operations, which Meta would arrange.
i' Meta Housing Corporation 1CIY8, 2015 CITY OF BURLINGAME- REVISED PROPOSAL/ 42
Project Financials: Senior 9% Option
Meta Housing Corporation
PROJECT FINANCIALS: SENIOR 9% OPTION
Sources and Uses
Sources - Permanent
(Gap) or Surplus
Uses
Investor Equity
17,720,767
Permanent Loan
6,999,668
FHLB AHP
710,000
San Mateo County
2,500,000
Burlingame Land Contribution
8,500,000
City Loan/Impact Fee
4,000,000
Deferred Developer Fee
800,000
General Partner Equity
133
Total
41,230,535
(Gap) or Surplus
Uses
i"SMeta Housing Corporation 1L IY 8, 2015 CITY OF BURLINGAME. REVISED PROPOSAL/ 44
Land Cost/Acquisition
8,510,000
Construction incl structure)
21,184,225
Architect and Engineering
1,505,000
Financing
1,136,329
Legal Fees
175,000
Reserves
206,041
Other Soft Costs
8,513,943
Total
41,230,535
i"SMeta Housing Corporation 1L IY 8, 2015 CITY OF BURLINGAME. REVISED PROPOSAL/ 44
Two Bedroom -
Total 1
jSMeta Housing Corporation ILII -8,2015 CITY OF BURLINGAME- REVISED PROPOSAL/ 45
PROJECT FINANCIALS: SENIOR 9% OPTION
Residential Rent Assumptions and Unit Mix
Affordable Units 30%AMI
Utility
One Bedroom
Number of Units
6
Grass Rents Allowance Net
659 33
Rents
B26
Monthly Total
3,756
Two Bedroom
2
791 40
751
1,502
Total
8
5,258
Affordable Units 40%AMI
Utility
One Bedroom
Number of Units
12
Gross Rents Allowance Net
879 33
Rents
846
MonthlyTotal
10,152
Two Bedroom
3
1,055 40
1,015
3,045
Total
15
13,197
Affordable Units 50%AMI
Utility
One Bedroom
Number of Units
24
Gross Rents Allowance Net
1,099 33
Rents
1,066
Monthly Total
25,584
Two Bedroom
5
1,318 40
1,278
6,390
Total
29
31,974
Affordable Units 60%AMI
Utility
One Bedroom
Number of Units
16
Gross Rents Allowance Net
1,319 33
Rents
1,286
Monthly Total
20,576
Two Bedroom
4
1,582 40
1,542
6,168
Total
20
26,744
Two Bedroom -
Total 1
jSMeta Housing Corporation ILII -8,2015 CITY OF BURLINGAME- REVISED PROPOSAL/ 45
PROJECT FINANCIALS: SENIOR 9% OPTION
Project Budget
LAND COST/ACQUISITION 94% 6%
Land Cost or Value 8,500,000 7,990,000 510,000
Demolition 10,000 9,400 600
Subtotal Land Cost/ Acquisition Cost 8,510,000 7,999,400 510,600
NEW CONSTRUCTION
Site Work
1,250,000
1,175,000
75,000
1,175,000
Structures
275,000
-
-
232,650
Community Center / Management
520,000
520,000
-
520,000
Residential Parking
1,340,000
1,340,000
-
1,340,000
Commercial Parkling Structure
2,000,000
-
2,000,ODO
-
Residential
12,500,OOD
12,500,000
-
12,500,000
General Requirements
981,600
922,704
58,896
608,985
Contractor Overhead
327,200
307,568
19,632
202,995
Contractor Profit
981,600
922,704
58,896
608,985
Construction Contingency
995,020
935,319
59,701
617,310
General Liability Insurance
238,805
224,477
14,328
148,154
LEED
50,000
47,000
3,000
47,000
Subtotal New Construction Costs
21,184,225
18,894,771
2,289,453
17,768,429
ARCHITECTURAL FEES
Design
950,000
893,000
57,000
803,700
Supervision
275,000
258,500
16,500
232,650
Landscape Architect
40,606
37,600
2,400
33,840
Subtotal Architectural Costs
1,265,000
1,189,100
75,900
1,070,190
SURVEY & ENGINEERING
Civil engineer
100,000
94,000
6,000
75,200
Survey
20,000
18,800
1,200
15,040
Geotech
120,000
112,800
7,200
90,240
Subtotal Survey & Engineering
240,000
225,600
14,400
180,480
CONSTRUCTION FINANCING
Construction Loan Interest
630,000
592,200
37,800
444,150
Origination Fee
131,250
123,375
7,875
123,375
Insurance
317,763
298,698
19,066
298,698
Title & Recording
35,000
32,900
2,100
32,900
Subtotal Construction Interest & Fees
1,114,013
1,047,173
66,841
899,123
PERMANENT FINANCING
Loan Origination Fee 12,315 11,576 739 -
Title & Recording 10,000 9,400 600 -
Subtotal Permanent Financing Costs 22,315 20,976 1,339 -
LEGAL FEES
117
)� Meta Housing Corporation MAY 8, 2015 CITY OF BURLDVOAME- REVISED PROPOSAL / 46
PROJECT FINANCIALS: SENIOR 9% OPTION
Project Budget
RESERVES
Total Cost
Residential Cost Commercial
Cost
TCAC casis
3 -Month Operating Reserve
206,041
206,041
-
-
Subtotal Reserve Costs
206,041
206,041
-
-
APPRAISAL
-
-
Appraisal
15,000
14,100
900
14,100
Subtotal Appraisal Costs
15,000
14,100
900
14,100
OTHER PROJECT COSTS
-
-
TCAC App/Allocation/Monitoring Fees
45,000
45,000
-
45,000
Environmental Audit
5,200
4,888
312
4,668
Soils Report
8,000
7,520
480
7,520
Local Development Impact Fees
5,000,000
5,000,000
-
5,000,000
Permit Processing Fees
539,500
507,130
32,370
507,130
Marketing
51,100
48,034
3,066
48,034
Furnishings
250,D00
250,000
-
250,000
Market Study
8,000
8,000
-
8,000
Lender Inspections
16,000
15,040
960
15,040
Subtotal Other Costs
5,922,800
5,885,612
37,188
5,885,612
Soft Costs Contingency (50/6)
296,140
278,372
17,768
236,616
DEVELOPER COSTS
-
-
DeveloperFee- Residential
2,000,000
2,000,000
-
1,400,000
Developer Fee -Parking Garage
250,000
-
250,000
-
Subtotal Developer Costs
2,250,000
2,000,000
250,000
1,400,000
SYNDICATION COSTS
Cost certification
15,000
14,100
900
-
Partnership formation & taxes
15,000
14,100
900
-
Subtotal Syndication Costs
30,000
28,200
1,800
-
TOTAL PROJECT COSTS
41,230,535
37,953,845
3,276,690
27,561,474
ti-
j� Meta Housing Corporation ➢1AY 8, 2015 CITY OF BURLINGAilIE- REVISED PROPOSAL/ 47
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Project Financials: Family 9% Option
rl^meta Housing Corporation
PROJECT FINANCIALS: FAMILY 9% OPTION
Sources and Uses
Sources - Permanent
Uses
Land Cost/Acquisition
8,510,000
Investor Equity
17,156,640
Permanent Loan
6,977,371
San Mateo County
2,500,000
Burlingame Land Contribution
8,500,000
City Loan/Impact Fee
4,000,000
AHSC - Cap & Trade
2,000,000
Deferred Developer Fee
600,000
General Partner Equity
100
Tote, -
41,934,111.
Uses
Land Cost/Acquisition
8,510,000
Construction (incl structure)
21,824,717
Architect and Engineering
1,505,000
Financing
1,211,147
Legal Fees
175,000
Reserves
210,478
Other Soft Costs
8,497,770
Total
41,934,111
f-��Meta Housing Corporation DTAY 8, 2015 CITY OF BURLINGAME- REVISED PROPOSAL/ 50
PROJECT FINANCIALS: FAMILY 9% OPTION
Residential Rent Assumptions and Unit Mix
Affordable Units 30%AMI
Total 20 29,702
Two Bedroom
Total 1
Meta Housing Corporation MAY 8, 2015 CITY OF BURLINGAME- REVISED PROPOSAL/ 51
One Bedroom
3
659
33
626
1,878
Two Bedroom
1
791
40
751
751
Three Bedroom
2
914
49
865
1,730
Total
6
4,359
Affordable Units 40%AMI
utility
Number of Units
6
Gross Rents
879
Allowance Net
33
Rents Monthly
846
Total
5,076
One Bedroom
Two Bedroom
3
1,055
40
1,015
3,045
Three Bedroom
4
1,219
49
1,170
4,680
Total
13
12,801
Affordable Units 50%AMI
Utility
Number of Units
Gross Rents
Allowance Net
33
Rents Monthly
1,066
Total
12,792
One Bedroom
12
1,099
Two Bedroom
6
1,318
40
1,278
7,666
Three Bedroom
B
1,523
49
1,474
11,792
Total
26
32,252
Affordable Units 60%AMI
Utility
Number of Units
10
Gross Rents
1,319
Allowance Net
33
Rents Monthly
1,286
Total
12,860
One Bedroom
Two Bedroom
4
1,582
40
1,542
6,168
Three Bedroom
6
1,828
49
1,779
10,674
Total 20 29,702
Two Bedroom
Total 1
Meta Housing Corporation MAY 8, 2015 CITY OF BURLINGAME- REVISED PROPOSAL/ 51
PROJECT FINANCIALS: FAMILY 9% OPTION
Project Budget
LAND COST/ACQUISITION
1,250,000
94%
6%
Land Cost or Value
8,500,000
7,990,000
510,000
Demolition
10,000
9,400
600
Subtotal Land Cost/ Acquisition Cost
8,510,000
7,999,400
510,6DO -
NEW CONSTRUCTION
Site Work
1,250,000
1,175,000
75,000
1,175,000
Structures
275,000
256,500
16,500
232,650
Community Center / Management
520,000
520,000
-
520,000
Residential Parking
1,340,000
1,340,000
-
1,340,ODO
Commercial Parkling Structure
2,000,000
-
2,000,000
-
Residential
13,200,000
13,200,000
-
13,200,000
General Requirements
1,023,600
962,184
61,416
635,041
Contractor Overhead
341,200
320,726
20,472
211,680
Contractor Profit
1,023,600
962,184
61,416
635,041
Construction Contingency
827,936
778,260
49,676
513,651
General Liability Insurance
248,381
233,478
14,903
154,095
LEED
50,000
47,000
3,000
47,000
Subtotal New Construction Costs
21,824,717
19,538,834
2,285,883
18,431,510
ARCHITECTURAL FEES
C`
Design
950,000
893,000
57,000
803,700
Supervision
275,000
256,500
16,500
232,650
Landscape Architect
40,000
37,600
2,400
33,840 !-
Subtotal Architectural Costs
1,265,000
1,189,100
75,900
1,070,190
SURVEY & ENGINEERING
Civil engineer
100,ODC
94,000
6,000
75,200
Survey
20,000
18,B00
1,200
15,040
Geotech
120,OD0
112300
7,200
90,240
Subtotal Survey & Engineering
240,000
225,600
14,400
180,480
CONSTRUCTION FINANCING
Construction Loan Interest
684,000
642,960
41,040
482,220
Origination Fee
142,500
133,950
8,550
133,950
Insurance
327,371
307,729
19,642
307,729
Title & Recording
35,000
32,900
2,100
32,900
Subtotal Construction Interest & Fees
1,188,871
1,117,539
71,332
956,799
PERMANENT FINANCING
Loan Origination Fee 12,276 11,539 737 -
Title & Recording 10,000 9,400 600 -
Subtotal Permanent Financing Costs 22,276 20,939 1,337 -
LEGAL FEES
7Meta Housing Corporation WAAY8, 2015 CITY OF BURLING �11E- REVISED PROPOSAL/ 52
PROJECT FINANCIALS: FAMILY 9% OPTION
Project Budget
Total Cost Residential Cost Commercial Cost TCAC casis i
RESERVES
3 -Month Operating Reserve 210,478 210,478 - -
Subtotal Reserve Costs 210,478 210,478 - -
APPRAISAL - -
Appraisal 15,000 14,100 900 14,100
Subtotal Appraisal Costs 15,000 14,100 900 14,100
OTHER PROJECT COSTS
TCAC App/Allocation/Monitoring Fees
45,000
45,000
-
45,000
Environmental Audit
5,200
4,888
312
4,888
Soils Report
8,DC0
7,520
480
7,520
Local Development Impact Fees
5,000,000
5,000,000
-
5,000,000
Permit Processing Fees
529,D00
497,260
31,740
497,260
Marketing
46,200
43,428
2,772
43,428
Furnishings
2501000
250,000
-
250,000
Market Study
8,000
13,000
-
0,000
Lender Inspections
16,000
15,040
960
15,040
Subtotal Other Costs
5,907,400
5,871,136
36,264
5,871,136
Sok Costs Contingency (5%) 295,370 277,648 17,722 236,001
DEVELOPER COSTS
DeveloperFee- Residential 2,000,000 2,000,000 - 1,400,000
DeveloperFee - Parking Garage 250,000 - 25D,000 -
Subtotal Developer Costs 2,250,000 2,000,000 250,000 1,400,000
SYNDICATION COSTS - Cost certification 15,000 14,100 900
Partnership formation & taxes 15,000 14,100 900 -
Subtotal Syndication Costs 30,000 28,200 1,800 -
TOTAL PROJECT COSTS 41,934,111 38,657,473 3,276,638 28,267,140
L-Llyeta Housing Corporation MAY8, 2015 CITY OF BURLINGAME- REVISED PROPOSAL/ 53
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2
TIMELINE
ANTICIPATED DEVELOPMENT TIMELINE
Development Timeline
Identify a rough timeline for the project, including how soon the firm would expect to complete the entitlement process,
secure financing, and begin and complete project construction. Summarize your estimates for market absorption for the
dwelling units within the project. Also indicate if the firm would pursue a phased project or would anticipate building
the entire project in a single phase. If the project is proposed to be phased, identify the breakdown of each phase and
how long the overall project would take to complete.
May 2015
Updated RFP submitted to City
June 2015
Developer Selected, enter into ENA (90 days)
July 2015
Developer begins outreach to community groups, stakeholders, and City Officials
February 2016
Secure entitlements for project
February 2016
City/Developer enter Development Agreement
March 2016
AHP Application submitted (As appropriate)
March 2016
AHSC Application submitted (As appropriate)
May 2016
County NOR Application submitted
June 2016 AHP Awarded
June 2016
County NOFA Awarded
July 2016
AHSC Awarded
July 2016
Tax Credit Application Submitted
October 2016
Tax Credits Awarded
February 2016 Secure building permit, remaining financing
November 2016 Commence construction
February 2018 Commence tenant selection process
May 2018 Complete construction (18 months)
June 2018 Complete lease -up
r��Meta Housing Corporation AIAY8, 2015 CITY OF BURLINGAME- REVISED PROPOSAL/ 56
ANTICIPATED DEVELOPMENT TIMELINE
Lease -Up and Timing
Across our portfolio, we have deep experience showing that lease up will be completed within the first months after
the project opens.
Our latest Arts Colony to complete lease up was the San Pedro Pacific Arts Colony. This project is fully leased although
it has not even opened yet. The Pacific Arts Colony received many times more applications than there are units, and in
addition to being already fully leased there is a waiting list of hundreds of potential residents.
In Burlingame, the acute shortage of affordable housing will likely result in hundreds, if not thousands, of applications
from qualified local tenants.
We will begin accepting applications in the months before construction is completed so that move -ins can begin
immediately after occupancy permits are issued.
Phasing
We anticipate completing this project as one contiguous phase. We can work with the City to carve the public parking
structure out as a standalone phase if necessary or preferable.
Meta Housing Corporation MAY 8, 2015 CITY OF BURLINGAME- REVISED PROPOSAL / 57
Mid -Peninsula Housing - Revised Proposal
(060915)
Proposal Update
Burlingame
Parking Lots
F&N
Submitted By:
MidPen Housing Corporation with Sares Regis
Updated proposal to develop Parking Lots F&N
providing housing, parking, and open space to
Downtown Burlingame
May 8
2015
MidPen
H O U S I N G
Building Communities. Changing Lives.
TABLE OF CONTENTS
A. SUMMARY OF PROPOSAL REVISIONS
B. ALTERNATIVE 1: MARKET RATE + AFFORDABLE
1. Proposal Updates
2. Program Summary
3. Finance Summary
4. Site Design
C. ALTERNATIVE 2: WORKFORCE + SENIOR
1. Proposal Updates
2. Program Summary
3. Finance Summary
4. Site Design
D. EXHIBIT 1: ARCHITECTURAL RENDERINGS
Mid Pen's Paulson Park in Mountain View exemplifies high quality affordable
housing using vernacular architectural forms
Mid Pen Housing with the Sores Regis Group of Northern California
Updates to Proposal for Lots F&N, Burlingame
A. SUMMARY OF PROPOSAL REVISIONS
MidPen Housing, with the Sares Regis Group of Northern California (SRGNC), is
pleased to present the below updates to our previously submitted RFP response dated
January 30, 2015, including the development scenario we presented to City Council on
March 26.
As part of this update, we are presenting two alternatives:
• Alternative 1: Mixed Income: Market Rate Housing on Lot F and Affordable
Workforce/Senior on Lot N, a partnership between MidPen Housing and SRGNC. 308
total public parking stalls are provided which adds 109 net new stalls to current
capacity
• Alternative 2: Workforce/Senior: Moderate Workforce Housing on Lot F and Affordable
Senior Housing on Lot N. 253 total public parking stalls are provided which adds 54
net new stalls the current capacity.
Our updated proposals take into account the comments from both the Council members
and the public at -large provided during the March hearing. That feedback, along with
the discussion that followed, helped to clarify the proposal requirements as well as
underscore the City's priorities as related to parking, density, architectural expression,
and community amenities. Based on that information, we have updated our proposal to
include the following key components:
1. All parking, both residential and public parking, is accommodated exclusively on Lots
F and N
2. Residential parking ratios meet or exceed parking requirements under the Downtown
Specific Plan
3. Existing public parking is preserved, and new public parking is created.
a. Under our Mixed Income Alternative, which leverages the full value of the market
rate parcel to create affordable housing and parking, we are creating a total of
308 public parking stalls which adds 109 net new stalls to current capacity.
b. Under our Workforce/Senior Alternative, which provides deeper levels of
affordability through a workforce housing model combined with senior housing,
we are creating a total of 253 public parking stalls which adds 54 net new stalls
the current capacity.
4. A publically-accessible pocket park is provided as a community amenity
5. Density is reduced to enhance neighborhood compatibility
Additionally, it's important to note that the following development components remain
consistent with our previous submissions:
Traditional architectural forms are used to reflect Burlingame's distinct architectural
character
MidPen Housing with the Sores Regis Group of Northern California
Updates to Proposal for Lots F&N, Burlingame
2. The City's contribution is limited to the provision of land only. No additional
contribution is needed from the City in order to achieve financial feasibility.
3. MidPen Housing and SRGNC are local development companies with a strong track
record of success and a sterling reputation for completing projects that contribute
positively to the communities where they are built
SRGNC's Ross Woods in Belmont presents a refined shingle -style residential environment
MidPen Housing with the Sores Regis Group of Northern California
Updates to Proposal for Lots F&N, Burlingame
B. ALTERNATIVE 1: MIXED INCOME (MARKET RATE AND AFFORDABLE)
1. Proposal Updates
Of the three development scenarios included in our original proposal, and at the
recommendation of the Council Selection Subcommittee, MidPen and SRGNC
presented our Mixed Income development alternative at the March 26 hearing. This
development alternative leverages the strong market value of land in Burlingame to
provide the necessary subsidy to create public benefits in the form of affordable housing
and new parking, in addition to providing new market rate housing opportunities for
professionals wanting to live close to transit and downtown.
Following the discussion at the hearing, we refined both our underwriting and design
assumptions, and are presenting here an updated site and financing proposals that
achieve the following:
Lot F:
Dwelling Units: Reduce number of units to 45 for -sale
condominiums in order to lower density while
maintain residual land value
Residential Parking: Increase residential parking ratio from 1.3 stalls per
unit to 1.55 stalls per unit, which exceeds the
requirements of the Downtown Specific Plan
Public Parking Provide 100% public parking replacement on site
Replacement:
New Public Parking: Provide 47 net new public parking spaces on site
Community Amenity: Include a publically accessible pocket park to create
an open space amenity for both residents and the
surrounding community
Lot N
Dwelling Units: Reduce number of units to 66 affordable apartments
in order to reduce density and limit required cross -
subsidy from the market rate component
Residential Parking: Increase residential parking ratio from 1 stall per unit
to 1.17 stalls per unit, which exceeds the
requirements of the Downtown Specific Plan
Public Parking Provide 100% public parking replacement on site
Replacement:
New Public Parking: Provide 62 net new public parking spaces
MidPen Housing with the Sores Regis Group of Northern California
Updates to Proposal far Lots F&N, Burlingame
2. Program Summary
As mentioned above, the Mixed Income Alternative maximizes the potential to leverage
land value to create significant community benefits in the form of affordable housing,
additional public parking, and a public open space. In this updated version, we shift the
market rate component from rental to ownership, and reduce the dwelling unit density on
both Lots F and N. Lot N continues to serve low-income households earning up to 60%
AMI. The smaller sized units on Lot N (primarily studios and one -bedrooms, with some
two bedrooms) are intended to serve lower wage individuals and couples, small families,
and seniors. Finally, by building three levels of parking on both sites, we are able to
exceed residential parking requirements, replace all existing public parking, and add 109
public stalls to the City's downtown parking resources.
Lot F — Market Rate Hous ng with Pocket Park
Unit Count/Unit Mix
45 condominiums (15 one -bedrooms, 18 two -
bedrooms, 12 three -bedrooms)
Affordability Levels
Market Rate
Construction Type
3 stories of wood frame construction over 3 levels of
concrete parking podium 5 stories above rade
Residential Parking
Stalls/Ratio
74 stalls; 1.55:1 parking ratio
Public Parking
Replacement
105 stalls
Net New Parking
47 stalls
Total Public Parking
152 stalls
Lot N — Affordable Workforce Housing
Unit Count/Unit Mix
66 units (23 studios, 29 one -bedrooms, 14 two -
bedrooms, one managers unit
Affordability Levels
All units at 50%-60% AMI
Construction Type
3 stories of wood frame construction over 3 level of
concrete parking podium (5 stories above rade
Residential Parking
Stalls/Ratio
77 stalls/1.17:1 parking ratio
Public Parking
Re lacement
94 stalls
Net New Parking
62 stalls
Total Public Parking
156 stalls
Totals
Total number of residential units
111 units
Total replacement parking
199 stalls/100% of existing
Total net new parking
109 stalls
Total Public Parking
308 stalls
Mid Pen Housing with the Sores Regis Group of Northern California �.
Updates to Proposal for Lots F&N, Burlingame
3. Finance Summary
SRGNC will structure the development of Lot F as a joint venture with an institutional
equity capital partner. Historically, these partners have included firms such as JP
Morgan Investment Management, Tricon Capital, The Resmark Companies and
CaIPERS advisors such as Hearthstone and Pacific Coast Capital Partners. Such
transactions are normally capitalized with 65% debt and 35% equity. The lender
required guarantees are provided by SRGNC guarantor entities.
To develop Lot N, MidPen will combine the market rate cross -subsidy generated through
the development of Lot F with 4% tax credit equity, and tax-exempt bond financing,
creating a financing structure that is not dependent on a competitive funding process
and can be executed immediately upon entitlement approval.. Given MidPen's strong
balance sheet and exemplary track record, MidPen is able to command top of the
market pricing for both debt and equity from the strongest financial institutions in the
country.
Following are summary proformas for both Lots F and N
BAR's Woodmark in Palo Alto employs craftsman -style gables, dormers, and eaves to gracefully reduce
sense of scale and building mass.
MidPen Housing with the Sores Regis Group of Northern California
Updates to Proposal for Lots F&N, Burlingame
Lot F Summary Proforma
LOT F - PRO FORMA
Total Units
45
Total Cost
Per Unit
% of Cost
Land
$10,000,000
$222,222
23.2%
Closing Costs
200,000
4,444
0.5%
Municipal Fees and Indirects
2,468,000
54,844
5.7%
Construction Costs
19,230,000
427,333
44.6%
Financing Costs
3,646,000
81,022
8.5%
Soft Costs, Marketing and Selling
6,243,500
138,744
14.5%
Contingency
1.295.000
28.778
3.0%
Total Project Cost
$43,082,500
$957,389
100.0%
GROSS SALES PROCEEDS
$48,000,000
NET PROFIT
$4,917,000
GROSS MARGIN %
10.2%
The $10M land cost shown above represents the sources of the subsidy used to support
affordable housing and additional parking on Lot N
SRGNC's Colonnade project in Los Altos uses Spanish colonial architectural references that enliven a
shared pedestrian/parking courtyard
Mid Pen Housing with the Sores Regis Group of Northern California F
Updates to Proposal for Lots F&N, Burlingame
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4. Site Design
Our site planning approach remains consistent with our earlier proposal, with the
exceptions noted above, including:
• Reduction in dwelling unit density on both lots
• Provision of additional parking level(s)
• Creation of a publically-accessible pocket park
It is important to underscore that in addition to replacing existing parking, this proposal
creates 109 net new public parking spaces, and does so not through the segregation of
uses (parking vs. housing) but by placing housing over parking. In so doing, we are able
to avoid the creation of an unsightly multi-level garage, which in turn provides the
opportunity to wrap the parking elements on each site with a residential architectural
expression.
Following is the Site Plan and Site Section for the Mixed Income Alternative
BAR'S design for II Fornaio in Downtown Burlingame
Mid Pen Housing with the Sores Regis Group of Northern California
Updates to Proposal for Lots F&N, Burlingame
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C. ALTERNATIVE 2: MODERATE INCOME "WORKFORCE" AND
SENIOR HOUSING
1. Proposal Updates
In our RFP submission, we included what we called a `Baseline' proposal that
maximized affordable senior and workforce housing opportunities on both Lots F and N,
while preserving existing public parking, and providing a modest increase in public
parking capacity through attendant parking during peak business hours.
Our updated proposal here serves the same workforce and senior populations.
"Workforce" under this scenario is defined as households earning between 100%-150%
of area median income. Examples of working individuals and families in this income
range include a:
• Teacher in the Burlingame School District earning $77,000/year (100% AMI)
• Registered nurse with one child earning $87,000/year (100% AM])
• Professional couple each working for the City of Burlingame as an Accounting
Assistant and Planner, with a combined income of $127,212 (150% AMI)
Senior Housing is reserved for individuals and couples 62 years and older, and earning
less than 60% AMI.
With the comments from City Council in mind, we have made revisions to our Baseline
Workforce/Senior scenario to include: 1) additional public parking (without the need for a
parking attendant, 2) a small pocket park similar to that shown in the Mixed Income
scenario, and 2) reduced dwelling unit density on both lots.
The updated designs for Lot F and N under this Workforce/Senior scenario achieve the
following:
Lot F:
Dwelling Units: Reduce number of units from 83 to 66 rental
apartments. The property still serves working
households earning between 100%-150% of area
median income.
Residential Parking: Increase residential parking ratio from 1 stall per unit
to 1.1 stalls per unit to meet the requirements of the
DSP. The parking ratio is still relatively efficient
given that the smaller sized units are intended to
serve primarily singles and couples, with limited two-
bedroom units for small families.
Public Parking Provide 100% public parking replacement on site.
Replacement: This is consistent with our original proposal.
New Public Parking: Provide 47 net new public parking spaces on site
Community Amenity: Include a publically accessible pocket park to create
an open space amenity for both residents and the
surrounding community
Mid Pen Housing with the Sores Regis Group of Northern California
Updates to Proposal for Lots F&N, Burlingame
Lot N
Dwelling Units:
Residential Parking:
Public Parking
Replacement:
Reduce number of units from 78 to 66 affordable
senior apartments in order to reduce density. The
income targeting has not changed.
Increase residential parking ratio from .7 stall per
unit to just over 1 stall per unit, in order to meet the
requirements of the DSP.
Provide 101 public parking spaces on site, 7 more
than the replacement requirement, without the need
for a parking attendant.
2. Program Summary
This Workforce/Senior Alternative maximizes affordability by serving a moderate income
working population on Lot F, and by accessing the 9% tax credit program to serve low-
income seniors on Lot N. Both sites will serve primarily singles and couples, with Lot F's
workforce development also including some units for small families. This population mix
serves an important need while minimizing impacts on traffic and schools.
Lot F —Workforce Housing
Unit Count/Unit Mix
Unit Count/Unit Mix
65 units (9 studios, 40 one -bedrooms, 16 two -
bedrooms
Affordability Levels
100%-150% AMI
Construction Type
3 stories of wood frame construction over three levels
of concrete parking podium 5 levels above rade
Residential Parking
Stalls/Ratio
74 stalls/1.14:1 parking ratio
Public Parking
Replacement
105 stalls
Net New Parking
47 stalls
Total Public Parking
152 stalls
Lot N — Affordable Senior Housing
Unit Count/Unit Mix
66 units (6 studios, 54 one -bedrooms, 6 two -
bedrooms
Affordability Levels
60% AMI and below
Construction Type
3 stories of wood frame construction over two levels
of concrete parking podium 4'% levels above rade
Residential Parking
Stalls/Ratio
69 stalls/1.05:1 parking ratio
Public Parking Replacement
94 spaces
Net New Parkin
7 stalls
Total Public Parkin
101 stalls
Totals
Total number of residential units
132 units
Total residential parking
143 stalls
Total replacement parking
199 stalls/100% of existing
Total net new parking
54 stalls
Total Public Parking
253 stalls
Mid Pen Housing with the Sores Regis Group of Northern California
Updates to Proposal for Lots F&N, Burlingame
3. Finance Summary
Lot F's financing plan is based on the desire to balance the provision of affordable
workforce housing, with the need to generate sufficient revenue to support debt, and
create a land residual cross -subsidy necessary for the development of senior affordable
housing on Lot N.
Lot F's development will access traditional construction and permanent financing, as well
as take advantage of MidPen's own equity fund, paired with a private equity investor.
We anticipate that Lot F will generate a residual land payment of approximately $1.75
million. That payment will be provided to the City to then be dedicated to Lot N as a
local contribution/public subsidy source. Increasing the local subsidy improves the
competitiveness for 9% tax credits that will serve as a primary source of funding for Lot
N.
Lot N's financing plan is based on the ability to leverage both the value of the land and
the cross -subsidy, to compete for 9% tax credits. In addition to the workforce cross -
subsidy, land value, and tax credits, we anticipate accessing the County of San Mateo's
Project -Based Section 8 program. MidPen has a strong and accomplished track record
of collaborating with the Housing Authority of San Mateo County to produce affordable
senior housing communities. Our financing scenario assumes 50% of the units will
receive Project Based Section 8 rental assistance. Although we do not have a
commitment for this allocation and would need to submit an application to the Housing
Authority, this assumption is consistent with the Housing Authority's historical policies for
assisting in the financing of affordable housing. For example, MidPen currently has
two such communities under construction: our Foster Square and Half Moon Village
projects, both of which serve very low income seniors and received an allocation of
Project Based Section 8 Rental Assistance.
In addition, although the 9% tax credit program is competitive, MidPen has an
outstanding track record in securing allocations. In 9 of the last 10 funding cycles for the
South and West Bay region, MidPen secured an allocation on our first application.
MidPen has structured our financing strategy to ensure our project will be competitive.
The 9% tax credit program essentially requires that all projects receive a perfect score.
The actual allocation, then, comes down to a tie breaker calculation which measures
public funding as a percentage of total development cost and credit efficiency. In the
last several rounds, tie breakers have ranged from 41% to 60%. MidPen has structured
this project to achieve a 61% tie breaker which we believe will be competitive in
upcoming allocation rounds based on our knowledge of the current pipeline of projects in
the region.
Following are summary proformas for both Lots F and N
MidPen Housing with the Sores Regis Group of Northern California
Updates to Proposal for Lots F&N, Burlingame
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4. Site Design
Again, our site planning approach remains consistent with our earlier proposal, with the
exceptions noted earlier, including:
• Reduction in dwelling unit density on both lots
• Provision of additional level(s)
• Creation of a publically accessible pocket park
It is important to underscore that in addition to replacing existing parking, this proposal
creates 54 net new public parking spaces, and likewise does so through combining
housing and parking on each parcel to improve each structure's urban design
expression. Fewer public parking stalls are created in this option relative to our Mixed
Income Alternative given that this Workforce/Senior option includes deeper levels of
affordability.
Following is the Site Plan and Site Section for the Workforce/Senior Alternative
Mid Pen's Devnes Place in Milpitas provides a welcoming courtyard for its senior residents
Mid Pen Housing with the Sores Regis Group of Northern California
Updates to Proposal for Lots F&N, Burlingame
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Exhibit 1: Architectural Renderings
MidPen Housing, the Sares Regis Group of Northern California, and BAR Architects are
committed to creating communities that contribute to the neighborhoods where they are
built, and enliven the urban and residential fabric that surrounds them. For the
Burlingame sites we intend to create an architecture that "fits in;" one that extends the
patterns of use, scale, and form of the downtown district, and which embodies the
architectural values and distinct historical character of the City.
The following renderings (applicable to both the Mixed Income and Workforce/Senior
Alternatives) show a use of vernacular architecture and fagade articulation that provides
a sense of scale and proportion, creates visual interest, and contributes to a vibrant
pedestrian streetscape, all the while elegantly masking the podium -level parking.
MidPen Housing with the Sores Regis Group of Northern California
Updates to Proposal for Lots F&N, Burlingame
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Low Income HousingTax Credit Program
By Ed Gramlich, Director of Regulatory Affairs, National Low Income Housing Coalition
Administering Agency: Internal Revenue Service (IRS) of the Department of the Treasury
Year program started: 1986
Number of households served: 53,048 in 2011, the latest data available
Population targeted: Households with incomes either below 80% of area median income (AMI) or 50% AMI
FY13 funding: Joint Committee on Taxation estimates $5.9 billion for 2013; 2014 estimates not available at
press time
See also: Qualified Allocation Plan
The Low Income Housing Tax Credit program (LIHTC) finances the construction, rehabilitation, and
preservation of housing affordable to lower income households. The LIHTC program encourages private
investment by providing a tax credit: a dollar -for -dollar reduction in federal taxes owed on other income.
Although housing tax credits are federal, each state has an independent agency that decides how to allocate
the state's share of federal housing tax credits within a framework formed by the Internal Revenue Code.
HISTORY
LIHTC was created by the Tax Reform Act of 1986 and is codified at Section 42 of the Internal Revenue
Code, 26 U.S.C. 42, so tax credit projects are sometimes referred to as Section 42 projects. The IRS provides
additional guidance through revenue rulings, technical advice memorandums, notices, private letter rulings,
and other means.
PROGRAM SUMMARY
The LIHTC program finances the construction, rehabilitation, and preservation of housing affordable to lower
income households. LIHTC can be used to support a variety of projects: multifamily or single-family housing;
new construction or rehabilitation; special needs housing for elderly people or people with disabilities; and
permanent supportive housing for homeless families and individuals. The latest data from HUD indicates that
LIHTC has provided more than 2.3 million rental units between 1987 and 2011.
LIHTC is designed to encourage private individuals and corporations to invest cash in housing affordable to
lower income people by providing a tax credit over a 10 -year period: a dollar -for -dollar reduction in federal
taxes owed on other income. The cash investors put up, called equity, is used along with other resources to
build new affordable housing or to make substantial repairs to existing affordable housing. Tax credits are
not meant to provide 100% financing. The infusion of equity reduces the amount of money a developer has to
borrow and pay interest on, thereby reducing the level of rent that needs to be charged.
The Furman Center for Real Estate and Urban Policy at New York University released a report in October 2012
using tenant -level data from 15 states representing 30% of all LIHTC units. The report found that LIHTC
recipients tend to have higher incomes than households assisted by other federal rental assistance programs,
but that 43% of the households were extremely low income, with incomes below 30% AMI. However, 69% of
those extremely low income households also had other forms of rental assistance, such as vouchers. For the
31% of extremely low income LIHTC households who do not have rental assistance, more than half pay more
than 50% of their income for rent, have "severe cost burden.'
Although housing tax credits are federal, each state has an independent agency, generally called a housing
finance agency, or HFA, that decides how to allocate the state's share of federal housing tax credits. Tax credits
are allocated to states based on population. For 2014, each state received $2.30 per capita, with small states
receiving a minimum of $2.635 million.
Each HFA must have a qualified allocation plan (QAP), which sets out the state's priorities and eligibility
Advocates' Guide - i - National Low Income Housing Coalition
criteria for awarding federal tax credits, as well as tax-exempt bonds and any state -level tax credits, to housing
projects. Developers apply to an HFA and compete for tax credit allocations. The law requires that a minimum
of 10% of an HFAs total tax credits be set aside for nonprofits.
Once awarded tax credits, a developer then sells them to investors, usually to a group of investors pulled
together by someone called a syndicator. Syndicators sometimes pool several tax credit projects together and
sell investors shares in the pool. The equity that the investors provide is used by the developer, along with
other resources such as conventional mortgages, state loans, and funds from the HOME program to construct
or substantially rehabilitate affordable housing.
When applying to an HFA for tax credits, a developer has two lower income unit set-aside options, and must
stick with the chosen option during a required lower income occupancy period. The two lower income unit set-
aside choices are:
Ensuring that at least 20% of the units are rent -restricted and occupied by households with income below
50% of area median income (AMI).
Ensuring that at least 40% of the units are rent -restricted and occupied by households with income below
60% AMI.
Rent -restricted units have fixed maximum gross rents, including allowance for utilities, that are less than
the rent charged to a hypothetical tenant paying 30% of either 50% AMI or 60% AMI, whichever option the
developer chose. Tenants may have to pay rent up to that fixed maximum tax credit rent even if it is greater
than 30% of their income. In other words, the maximum rent a tenant pays is not based on 30% of the
tenant's income; rather it is based on 30% of the fixed AMI level (50% or 60%).
Consequently, lower income residents of tax credit projects might be rent burdened, meaning they pay more
than 30% of their income for rent and utilities. Or, tax credit projects might simply not be financially available
to very low and extremely low income people because rents charged are not affordable to them. HUD's tenant -
based or project -based vouchers or USDA Rural Development Section 521 Rental Assistance are often needed
to fill the gap between 30% of a resident's actual income and the tax credit rent.
Tax credits are available only for rental units that meet one of the above rent -restricted minimums (20/50
or 40/60). With these minimums it is possible for LIHTC projects to have a mix of units occupied by lower
income people and moderate and middle income people. These are minimums; projects can have higher
percentages of rent -restricted units occupied by lower income people. In fact, the more rent -restricted lower
income units in a project the greater the amount of tax credits provided. Some HFAs choose to create deeper
targeting in order to serve households with even lower incomes.
The law requires units to be rent -restricted and occupied by income -eligible households for at least 15 years,
called the compliance period, with an extended use period of at least another 15 years, for a total of 30 years.
Some states require low income housing commitments greater than 30 years or provide incentives for projects
that voluntarily agree to longer commitments. Where states do not mandate longer restricted -use periods,
an owner can submit a request to the HFA to sell a project or convert it to market rate during year 14 of the
15 -year compliance period. The HFA then has one year to find a buyer willing to maintain the rent restrictions
for the balance of the 30 -year period. If the property cannot be sold to such a preservation purchaser, then the
owner's obligation to maintain rent -restricted units is removed and lower income tenants receive enhanced
vouchers enabling them to remain in their units for three years.
HFAs must monitor projects for compliance with the income and rent restriction requirements. The IRS can
recapture tax credits if a project fails to comply, or if there are housing code or fair housing violations.
Advocates' Guide - 2 - National Low Income Housing Coalition
There are two levels of tax credit, 9% and 4%, formally known as the applicable percentages. Projects can combine
9%and4%tax credits. For example, buildings canbe bought with 4% tax credits and then substantially rehabilitated
with 9% tax credits. Instead of 9% and 4%, tax credits are sometimes referred to by the net present value they are
intended to yield, either 70% or 30%. This is just another way of saying, in the case of a 9% credit, that the stream
of tax credits over the 10 -year credit period has a value today equal to 70% of the eligible development costs.
The 9% tax credit is available for new construction and substantial rehabilitation projects that do not have
other federal funds. Federal funds include loans and bonds with below market -rate interest. Rehabilitation is
substantial if the greater of an average of $3,000 is spent on each rent -restricted lower income unit or 10% is
spent on the eligible basis during a 24 -month period.
The 4% tax credit is available for three types of activities:
Acquisition of existing buildings for substantial rehabilitation;
New construction or substantial rehabilitation subsidized with other federal funds; and,
Projects financed with tax-exempt bonds. (Every year, states are allowed to issue a set amount, known as
the volume cap, of tax-exempt bonds for a variety of economic development purposes.)
The figures 9% and 4% were only approximate rates. IRS computed actual rates monthly based on Treasury
Department interest rates, the applicable percentage. For any given project, the real tax credit rate was set
the month a binding commitment was made between an HFA and developer, or the month a finished project
was first occupied, placed in service. This applicable percentage is applied to the `qualified basis' to determine
the investors' tax credit each year for 10 years (the credit period). However, for 9% projects, the Housing
and Economic Recovery Act of 2008 (HERA) established a fixed 9% value for projects placed in service
between July 30, 2008 and January 1, 2014. The American Taxpayer Relief Act of 2012 allowed any project
receiving a LIHTC allocation before January 1, 2014 to qualify for the fixed 9% credit. Because there was no
Congressional action in 2013 to set a fixed the 9% value, the applicable percentage for March 2014 is 7.60%.
The 4% credit continues to float, with an applicable rate of 3.26% in March 2014.
The amount of tax credit a project can receive, and therefore how much equity it can attract, depends on a
several factors. First, the eligible basis must be determined by considering cost such as building acquisition,
construction, soil tests, engineering costs, and utility hookups. Land acquisition and permanent financing
costs are not counted toward the eligible basis. The eligible basis is usually reduced by the amount of any
federal funds. The eligible basis of a project can get a 30% increase, or basis boost, if the project is located in
a census tract designated by HUD as a low income tract (Qualified Census Tract, or QCT) or a high-cost area
(Difficult to Develop Area, or DDA). HERA expanded the use of this basis boost to areas designated by a state
as requiring an increase in the credit amount in order to be financially feasible.
Next, the applicable fraction must be determined. This is a measure of rent -restricted lower income units in a
prezct. There are two possible percentages: the ratio of lower income units to all units (the unit fraction), or
the ratio of square feet in the lower income units to the project's total square feet (the floor space fraction). The
lowest percentage is the applicable fraction. The applicable fraction agreed to by the developer and IRS at the
time a building is first occupied is the minimum that must be maintained during the entire affordability period.
The qualified basis is the eligible basis multiplied by the applicable fraction. The amount of annual tax credits a
project can get is the qualified basis multiplied by the tax credit rate (9% or 4%).
FUNDING
The LIHTC is a tax expenditure, which does not require an appropriation. The Joint Committee on Taxation
estimated that the program would cost $5.9 billion in tax expenditures in 2013. The committee's 2014
estimates are not available as of March 27. 2014.
Advocates' Guide - 3 - National Low Income Housing Coalitlon
FORECAST FOR 2014
Chief issues of concern for the LIHTC program last year, tax reform and deficit reduction, have diminished for
the time being. Several advisory commissions in previous years recommended either the elimination of or a
substantial reduction in tax expenditures. In 2012 there was strong bipartisan support in both the House and
the Senate for lowering statutory corporate tax rates. However, as 2013 drew to a close, the likelihood of tax
reform diminished for two reasons. First, a proponent of major tax reform and Chair of the Senate Finance
Committee, Senator Max Baucus (D -MT), was confirmed to be the next U.S. ambassador to China, disrupting
momentum for tax reform. Second, House Ways and Means Committee Chair Dave Camp (R -MI) encountered
reluctance from House leadership because of the divisive nature of tax reform. Because the LIHTC is one of
the largest corporate tax expenditures, it remains vulnerable to future elimination or substantial reduction to
help pay for the lowered rates.
Some advocates continue to seek to permanently set the 9°Io credit at that level rather than the lower floating
rate that took effect when the HERA and American Taxpayer Relief Act of 2012 fixed 9976 provisions expired
on January 1, 2014. In addition advocates want to establish a fixed rate for 4% credits. On August 1, 2013,
Senator Maria Cantwell (D -WA) introduced S. 1442, which would achieve these aims.
On March 15, 2013, Representative Keith Ellison (D -MN) introduced H.R. 1213, a bill to reform the mortgage
interest deduction by changing it to a 15% nonrefundable tax credit and lowering the maximum mortgage
amount eligible for a tax break from $1 million to $500,000. Such reform is estimated to both make the
tax break available to 16 million more households and save the federal government $196 billion over ten
years. Mr. Ellison proposed to dedicate 60% of the savings to the National Housing Trust Fund. In addition,
Mr. Ellison's bill proposes significant LIHTC provisions. Before determining the 60% in federal savings for
the National Housing Trust Fund, the LIHTC per capita allocation would be raised to $2.70 and increased
annually by a cost -of -living index. The $2 million minimum allocation for small states would also be increased
by an annual cost -of -living adjustment. Most importantly, the LIHTC program would create an incentive to
develop units affordable to extremely low income people by providing a 150% basis boost.
The President's budget request for FY15 contains six proposed changes to the LIHTC program:
1. As in previous years, Treasury is proposing an `income -mixing" provision that would add a third rent -
restricted category (in addition to the 20/50 and 40/60 options). That option would require that at least
40% of the units in a project to be occupied by households with incomes averaging 60% of AMI, allowing
LIHTC units to serve households with income up to 80% AMI. Proponents of this provision think it will
provide an incentive to include some units targeted to extremely low income households in a project's mix.
For purposes of computing the average, the proposal would treat any unit with an income limit below 20%
of AMI as if it were at 20% AMI, a feature that would be a disincentive to provide housing for individuals
with Supplemental Security Income (SSI) -level incomes, which is 13.5% of the 2014 national median
income for an individual (20% for a couple).
2. Rather than extend the 9% credit floor, the Administration proposes revising the formula to more closely
reflects the cost of borrowing when interest rates are very low or very high. The proposed new discount
rate would be the average of the mid-term and long-term applicable federal rates, plus 200 basis points.
3. In order to make more LIHTC available to states, the Administration proposes allowing states to convert
up to 8% of their private activity bond cap to LIHTCs. For each $1,000 of private activity bond cap
foregone, a state would receive additional LIHTC authority amounting to $1,000 x twice the applicable
percentage for 4% bond -financed LIHTCs. The Administration explains that 4% credits sometimes do
not provide adequate equity for some projects, and that the transaction costs of issuing bonds can be a
significant economic impediment to financing smaller projects.
4. Because preservation and rehabilitation of existing properties is often more efficient, the Administration
proposes adding preservation of federally assisted affordable housing to the current list of ten selection
criteria that every QAP must include.
Advocates' Guide - 4 - National Low Income Housing Coalition
5. The Administration proposes providing protections similar to those in the Violence Against Women Act
(VAWA) for both low income and market -rate units.
6. Finally, the Administration proposes allowing a Real Estate Investment Trust (REIT) to designate as tax
exempt some of the dividends it distributes.
On February 26, 2014, the House Ways and Means Chair, David Camp (R -Mn, proposed LIHTC changes in his
Tax Reform Act of 2014, including:
Eliminating 4% credits and private activity bonds;
• Changing the length of the tax credit period to 15 years from 10 years;
Eliminating the 130% basis boost for QCTs and DDAs; and,
Removing energy efficiency and historic nature of a property from the list of ten required selection criteria
in QAPs.
NLIHC and other advocates are seeking to modify the program to deepen the income targeting and modify
the rent structure in order to reduce potential rents burdens on extremely low and very low income tenants.
TIPS FOR LOCAL SUCCESS
Low Income Housing Tax Credits are distributed based on a state's Qualified Allocation Plan. See the QAP
chapter for advocacy ideas for influencing how LIHTC is used in your state.
WHATTO SAYTO LEGISLATORS
LIHTC is an important source of funding for affordable housing. Congress should act to protect the program
and provide a means to target more units that are affordable to extremely low income residents paying no
more than 30% of their income for rent and utilities.
FOR MORE INFORMATION
• National Low Income Housing Coalition, 202-662-1530, www.nhhc.org
Affordable Rental Housing A.C.T.I.O.N. Campaign, http://rentalhousingaction.org
• HUD training material about LIHTC, www.hud.gov/offices/cpd/affordablehousing/training/web/hhtc
HUD's database of LIHTC projects, updated through 2011, www.huduser.org/datasets/lihtc.html
List of QCTs and DDAs, www.huduser.org/datasets/qct.html
Novogradac, a consulting firm, lists the HFAs in all states, http://bit.ly/XoOL2b
Advocates' Guide - 5 - National Low Income Housing Coalition
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