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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. ,' °s . 1 on �R ,. • � �r mmggt� die.. is U_ LL .n €ae CN 0 Q 9 m t a O Y a IL 2 O w LL I— U W O w a 0 LU U) O a O m IL ell N V/� a z z� C/ a U O 2„ Z CD z� —m Y cc a CL '`I O O Q r ED CM O � z= m -m EY I `A, 1YL I. -r `A, 1YL -r `A, 1YL W D Z W Q O ry Q O Imm EinNAAV 4NVIHJIH Z O J U K U u zinNDAV NOi2IM avob Mvd E r m J W W J W D Z w Q ry ry a O x 3m3AV dNVIHOIH 3nN3AV NOiUOI z 0 5 U K U a u G 5 I Ll T J W Ir is aVOb >ibVd u I QE Mas V) 0 Q w D z \w Q ry Q 0 x EinN3AH 4NdlHOIH zinN3AV NOlbOI z 0 z Y Q ❑ 11 ?)1 I H N a CD z Zo U O La 2 � z cm z= �m cc a a N r O N N J W z� aN W Z y 6 O S� U W D Z W Q ry O a 3 0 EmNDAV GNVlHJIH z 0 5 U U _I 3nN3nd NMI01 U M J W W J avow Havd V,I AANDAV aNVIHJIH EmN3nv NOIHOI _u E Q: UZ :a3 0 Q avow �]avd N w J W W J z O g U U M El a z z z Y s z_o Ll C cm N z_¢ m OC z Q ooa o CL avow �]avd N w J W W J 3nNEIAV GNVIHJIH 3nN3AV NOi2JO1 Z 0 F 3 U K U ❑ 0 L�L v Z C.D z z_o a (/1 a ❑I Q 2 N z_¢ z Y a P: a Z w a 0 w W YI J W W J a� � yz s cs..' W z W Q ry 0 0 x 3nN3nv GNvIH9IH z Imi 3nN3nd NOIHOI avow )*lvd n rf .71 u u E Q: :as i�), r lk 0 J W > zz a o W J HE E s� r lk W D z W Q Q O 3nN3A`d GNVIHJIH EinN3AV N012:101 oro.F,.r. `LLI LLI J LL O w �l T Ll u a EMMOL somms 11 u 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 mss;, f t �i J 7777./ R'�. ` i #�.� _: n. !"i'.. i � �s�al (�'Ii� n ec-- „�F� � y . ��'��. .1 Project Design: Senior Option C2meta Housing Corporation ])§§(\ »ƒƒW �Wo [22$-- /§o <2 ug §»o ' � ] 22) ° ®Zw / m§ ^ \ � ZP )\� 2 F� ( e k _ k §) < A �§g�.� , \}�� �// «m m- k�) ) %6 »ƒƒW �Wo [22$-- /§o <2 ug §»o ' � E&§� 22) ®Zw / � jk§— ^ \ � )\� 2 §� e k \§ k A �§g�.� , \}�� «m m- k�) 0 U) 2°® »ƒƒW �Wo [22$-- /§o <2 ug � ( ) ®Zw / To ^ \ � )\� 1 e ( k A »2 \fib�� � , G2. 00- Z \ / " \ //�. 2 ° o0Sg0 �w / {§>G± /� «]I/ {m %\ [ � ) ^ \ � »2 \fib�� � , G2. 00- Z \ / " \ //�. 2 ° o0Sg0 �w / {§>G± /� «]I/ {m %\ [ 9 I — — — a Z O to J O "o. 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U a c ui m W W awww ++ ono J �UUU N �r N Jaan¢. ai O QUw0 w F- O N r U N Pa Z w U UJ N ¢ W O o_ a W 11 J ¢ a o O N 1= LU N m w U O �_ WW W V_ =mm w C O WWW N w 0]m 0] O~ W, N Q FNM J Of W N cn W V CL U J a J Q I -- O I -- cm N C is U peol� vie d v; I N r J� r aoe.. u� a v 1 06 F I I o L I W I W J L J Y U Q m F W O r N m M Ia Project Design: Family Option eta Housing Corporation ) LL .� O —1 ~ U) w0 j\ \ j� m \ ( »§o § Of »±d « o (§ 2 } §§M >-Z(D §()� } (L Co (gym \ `/ / .\\133 - k � ƒ §§(2 \0 w � 0/ w §�Gw LL .� O —1 ~ U) w0 j\ \ j� m \ ( »§o § Of »±d « $\ (§ 2 \) >-Z(D §()� (L Co (gym / .\\133 LL .� O —1 ~ U) w0 j\ \ j� m \ ( LU a x 0 0 m z O U Z 7 U) U) U) y :E � � �- OOOZ 0ClOQ wwwF M C3 M � N M I M r NIW ZF OZ) J M V F n I � J Z wO Z ON �I J J wY W J O Z J ZM>Z O N �FQ�­l 0 C J w JO Z ON w A 0 0 u I 'o 2 B w I o it II LU 11 _ II I IL I I w N py W O m C l uj W ¢www a W Z w W W II o II - o " a J U' N O Ico O U) (L J N I I ' U ¢wwww a m b z (n W ZN(OM W a W o c) Pa YU p J UU N U K d w II J d aS It" z ¢n.wwco w X w n �_ w O F= w o U N a II ' II ❑DD w P Wv vco d a II- N w N Co CO rc W d I w l l N J F N M = N V M w _ E�XX z I, I:�•IL': N X 0 0 w W p W W 9� W m m O J O W M N M y ui J O 0 - N e f0 0 0 u I 'o 2 B w LU U IL d N py v O m C uj W ¢www a W o " o Ln o J U) N O U) (L w w m b z (n W ZN(OM W Q a Pa YU p w Q U K d w II J d It" z N X w n �_ w O 0,wLd N J ❑DD LL 5m03 W N it N Co CO O W y Of F N M = N V M LTi 0 0 u I 'o 2 B , 4 £ } ` $ }� �! Aaal �K #c (k £ } ` $ }� �! Aaal ./2 (k PJeooe Vol y& I Pend'Alpd Al z 0 I� II I I I I I I I I C u QW K O O 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 O a p p m m m 0 n ^ ^ 1 m14 z oo m ^ z C%i ^V p H � m^� pIq o e o N r o N — — S pNp Ifs C M M iy T m I� pp m n Ip o rpf � m tt (C ffib p m m m m_o n m M til N N o p N N m a C m m 0 N N N N N Lrk cqOW ^ o p p Q m (m•1 M C r IL n > O N tNV N � O Q O ONl m M N m m N m� M Ol N I� 10 01 m mOm q C S C C f 0 M H m m m W N ^ N_ Y N N 12 Q W LSA ' L C a _ a o VJJ 2 aj c w o U BVI •L/�/) U= N 2 y ur � Q U O —� W G^� Zoe w y Z D ¢ W ➢ m ' a O S J CJ W 2 Q H OW W !u. F Lz b 6' C Z O O Z 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 z O m W a< N O N N a m _ N o O w O o C C N m I�Ca y Nm f'l w U H [m➢ a N ^ m m Ww {y Q ^ v a � (MD_ a N N m n a ry a M N C m n C m Wni m YWi M N dO m p d'_ N n O N Ai e � n O d U � O _ o _ O n] N o M m N � _ W m Q p za C M ONI Q m p! m 1% C y N O 0 O O � 1D Od' o � C M. S pH o_ Z d m N n n ^ N �n min <e v m o m e o m (�] (➢ O m m G {OyI OI a- N - bp [O W � o Q N Q bA o z H W N OI = o C C o Q d —C7 W O u O ^ m E x' Of T W 1- W 6 G m W O r O a w H m Ww {y Q ^ v � a a m d U o _ O n] N o M r � p n C y — o � tQ+l ^ N o N m [O W C Q N Q OI T o Q N d ^ m Of T � q ^ rym ry� O m M M N C LA b O a 0 U G .N � o 3 � T - tn y a U U Z O 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 p Q H Q h m N m N O O V m fp N pmp V N m N N N n m m n ha O O N� J 01 01 N O O O O w mmmmmmmmmmm m��FF��F�rr y ZU 2 N��-'NmV U N rN O W N N N N N V N 00 N m m ^ n N m E o Q o RU L 00 E 2 N o w'g=aU J a Cd m C m � � N N 0 J #I � Q 6yN� m N m0 E E E E n ne N �`m m ��ov ? �'a`I� m v E Q Of-rq �- a a a a a QU ❑ `o ._ O `a m C N N O O J N p m O O m m O O O O N (W Vpj m V O Z � d m m N r O n n n N N m Q N d� W amx` .- r vmo ai r of i SEE Wwmmw» ~❑ � � o a Y o a v o� Q oor� mm mN omp000 - U m ni 6 n of p K L O m U W mo�an�n��m� am Z y =� ry of 6aim of nN m Q v x ary mM ��y m � U s m O 0 BOLL m N o• -Nm J C a v UN E m m U ami « 2 O N dal J J J v m u O « LL W O d E C U a N a) m UO C7 fOl [ml ❑ NLLK' mE m'�2223 v E¢ - w ¢ 2 m m m IL `m vOA Q H Q h W ¢ � J w mmmmmmmmmmm m��FF��F�rr 2 U Q N 7 N N N N ¢ f N 00 N m m ^ n N m E o Q o RU L 00 E 2 N o w'g=aU J a Cd m C m � � N N 0 J #I Z m m0 E E E E Ear �`m m o o Q o ? �'a`I� m v E m d Of-rq �- a a a a Q QU ❑ `o ._ O `a m C N N LL O N W a) al J .00 m amx` 2 m of i SEE ~❑ � � o a Y o a v o� Q H Q h W ¢ � J w mmmmmmmmmmm m��FF��F�rr 2 U v mm w a g E 3 !n U v o aU v E o Q o RU L 00 E 2 N o w'g=aU J a Cd m C � QWW C Q Q O R(L O ILFUU�am 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 w�o 0 0 0 Ut- Zr 0� w X__ E o 0 w >a Q =E m w J Q 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 L 0 Y L Rr d O V d Td V CO C LL 0 W R tm C L m Lo Q g C. W CO ami CL .Qco I N L d N a u n e o m v ro M o U a [J'rG Oi pi N Z � N E Q �' �r F. O a W Nmm a w a lam o rvm .rv'n - Wim- 2 m� N a m Z W2? 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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 3AV ONV7HDIH 3AV NOIUOI Ir Z W LL U) LU W V Z J m 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 0 h Ed- r_ 0 L Q. E 0 0 cn f; 0 Q 0 L- L L n L p d N Q Cn O a, s9.. Em a) C C O Y N N N N O U O OD f nN N'N O N�NNO' CN LYY LYYa dYa' O"m O aL N ca W C ONN�OO— COa(p� • O rr(n Y N 0 a7 CD O`NO 0E w 0 0 a) O � O O O E O Km O 0 .0 c a) o2&20a a¢ da C9 19 �m COOmOm omE O C S C U- L6 06 cli CN \ mO C:j O O N N F F me o (O x o x Z LL aw M r (O (O N J o O ._ F- d'd'm m Z m m Z CO m Co i i m CL 0 N r N M -0, O Q r 06 Ld QM I T �r U N(nOL N • • • CD C Y N N R n � M 6 _ @ 0 N oda) a)(D�af .. 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(D (D O m O� -O m= L_ O O .N- 0 L J (a O L "6 > N "6 >U.N. 3v° gn `o avv v Q 0LL(n N O E O C N 'w 'oa c E d >' E= c n o av c a).0 c o U- U N c > E WY -0 0 O LL N O Q Q o. mw m rn C E O m J Eg C V— cu ._ o ._ c Q (" `o N N L Y () Y m'C Oa) J J N 2Q (n S O- LL fn a- 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 a) 7 O E O N N N E O o E a a) a '0 C � w > -NO a7 O o O w `o a) n }l0 a V, a5 O a) LL 0 CD �L N L 6 O L Cn E3 O O a C � v, (DE L m L O` r+ SZ O` L- N m E m � O 0 OW m as E a O d = in N LL pO O O O V V � 0) 00 V n rn co pp I O O V O (O I - N -;r- Cl) (h N m N7 r� m r 0000 cop o(00rn O V m (0 m O r v o 0000 v O cM m V r 10 m co LO r N M (O n O N 0 0 s 0 N_ O oO O O 0 W r (O Cl) W V M� N r W7 a •£ IL O 001_ O YNOOOO p £ 1010OO co t M 0 EFJ Jr(NM V 0 y M(O mm O E c 0 V N C 100 0O W 0 N C(p N � N N V CoO E 0000 CD W (_ (00r - C:) L r N 0) LO N V V m a o � * i Q \' Q N O 0 0co Q p N 3 0 c 01 m O O J Lo E a h y alOJ O E E J w m m Lll 0u�x��� DL r- To T LU w O 2 m U bi E m m O Q C N E CD a) a) l0 C 0 O U N l0 R O) 0 * O O000 O O O co �(h LOM rz N M m r I O LO r m O v r C14 - (61`C') N CT V I,- N r LO 00 (0 a000��Nr MD (0O r 00 a O O Q N( n 1O On - -M M re M m0 al N � O O O O O— N O NG a Ey.- mw N L co 0) O 0 a) LL LOO r 0 � O L w C E O O O O Z JM(CO r-100�- a m a E 17 ComT M 1N 98 00 C 0 0 0 0 0 O N 10 0 0 0 0) ON Wm V1- a) 0 00 G 1LO000LO �(0 0- 1,-- m V , m N m m N V m l� `o * E aa)) Q O `L Q LO 0VQ* ¢o to 0 p Owe (0i1 U>3o�a) >- E E-im aDi o m -0oa W E Lll> J