1 Request for Proposal for Competitive Proposals Engagement LIHTC Investor Services for Kingfield, Jackson, TN 1. Introduction Tennessee Housing Development Corporation (“THDC”) wishes to obtain a LIHTC investor to finance a portion of the costs of its Kingfield low-income multi-family housing developments in Jackson, TN. THDC is a development instrumentality controlled by the Jackson Housing Authority (“JHA”). There are two possibilities of how Kingfield will be developed. Either way, when completed Kingfield will have 81-units, 31 existing and 50 new units. Kingfield involves use of HUD’s Rental Assistance Demonstration (RAD) program. Kingfield is the fifth LIHTC project of THDC. A summary of the THDC LIHTC properties is at Appendix C. The two options are: #1 — Two distinct properties and legal entities, named Kingfield North (50 units new construction) and Kingfield South (31 existing units). 15 of the 50 Kingfield North units will having RAD operating subsidy, and 16 of the 31 Kingfield South unis having RAD subsidy. The balance of units at each portion of Kingfield will have Project-Based Voucher (PBV) operating subsidy. The two-part owner structure came about because of the 9% allocation process of the Tennessee Housing and Development Authority (“THDA”). THDC as Sponsor/Developer applied to THDA for an allocation of 9% credits for the 50 new unit component, known as Kingfield North. The bifurcation of the property was done given an analysis of point awards, and calculation of probability of a 9% allocation. It was determined that a 9% application with both new and rehab units would not get sufficient points for an award. Thus Kingfield North will proceed using 9% credits, and Kingfield South with 31 rehab units will proceed using 4% credits. (A site plan showing the two components of Kingfield is found at Appendix B.) #2 — A single property and legal entity. This option would be used if THDA does not allocate 9% LIHTC to Kingfield North. The two components will be a single property and single legal entity. THDA announcement of allocation is to be in early June. If a 9% allocation is awarded to Kingfield North, immediate notice will be provided to RFP recipients, including elimination of option #2 from the RFP. Thus THDC is requesting proposals for… A) Investor participation in the 9% Kingfield North 50 unit deal, with associated proposal via an investor collaborator or affiliate for a construction bridge loan. B) Investor participation in the 4% Kingfield South 31 unit deal, with associated proposal via an lender collaborator or affiliate for the 4% bond. C) Investor participation in a 4% Kingfield 81 unit deal, with associated proposal via an lender collaborator or affiliate for the 4% bond.
Transcript
1
Request for Proposal for Competitive Proposals Engagement
LIHTC Investor Services for Kingfield, Jackson, TN
1. Introduction Tennessee Housing Development Corporation (“THDC”) wishes to obtain a LIHTC investor to finance a portion of the costs of its Kingfield low-income multi-family housing developments in Jackson, TN. THDC is a development instrumentality controlled by the Jackson Housing Authority (“JHA”). There are two possibilities of how Kingfield will be developed. Either way, when completed Kingfield will have 81-units, 31 existing and 50 new units. Kingfield involves use of HUD’s Rental Assistance Demonstration (RAD) program. Kingfield is the fifth LIHTC project of THDC. A summary of the THDC LIHTC properties is at Appendix C. The two options are: #1 — Two distinct properties and legal entities, named Kingfield North (50 units new construction) and Kingfield South (31 existing units). 15 of the 50 Kingfield North units will having RAD operating subsidy, and 16 of the 31 Kingfield South unis having RAD subsidy. The balance of units at each portion of Kingfield will have Project-Based Voucher (PBV) operating subsidy. The two-part owner structure came about because of the 9% allocation process of the Tennessee Housing and Development Authority (“THDA”). THDC as Sponsor/Developer applied to THDA for an allocation of 9% credits for the 50 new unit component, known as Kingfield North. The bifurcation of the property was done given an analysis of point awards, and calculation of probability of a 9% allocation. It was determined that a 9% application with both new and rehab units would not get sufficient points for an award. Thus Kingfield North will proceed using 9% credits, and Kingfield South with 31 rehab units will proceed using 4% credits. (A site plan showing the two components of Kingfield is found at Appendix B.) #2 — A single property and legal entity. This option would be used if THDA does not allocate 9% LIHTC to Kingfield North. The two components will be a single property and single legal entity.
THDA announcement of allocation is to be in early June. If a 9% allocation is awarded to Kingfield North, immediate notice will be provided to RFP
recipients, including elimination of option #2 from the RFP. Thus THDC is requesting proposals for…
A) Investor participation in the 9% Kingfield North 50 unit deal, with associated proposal via an investor collaborator or affiliate for a construction bridge loan.
B) Investor participation in the 4% Kingfield South 31 unit deal, with associated proposal via an lender collaborator or affiliate for the 4% bond.
C) Investor participation in a 4% Kingfield 81 unit deal, with associated proposal via an lender collaborator or affiliate for the 4% bond.
2
The Kingfield North property is to be acquired via ground lease from the Jackson Housing Authority (“JHA”) by Kingfield LLC, a single-purpose LLC created by THDC. THDC is an instrumentality controlled by JHA. The LLC for the property is organized to complete new construction of units and a management/maintenance building with community space. The LLC will operate the affordable housing at this site. The property will be managed by the Jackson Housing Authority, which manages the four (4) other LIHTC properties of THDC. The Kingfield South property has 22 buildings (1 non-residential). The buildings are to be acquired from the Jackson Housing Authority (“JHA”) with a related ground lease. The owner entity would be Kingfield South LLC, a single-purpose LLC to be created by THDC. The Kingfield South LLC will operate the affordable housing at this site. The property also will be managed by the Jackson Housing Authority. Financials for Kingfield North, Kingfield South and Kingfield Combo are in Appendix A. The Kingfield North financial arrangement with the expected allocation of 9% LIHTC with the investor means that there needs to be a construction/bridge loan from a conventional lender. There will also be a “soft” JHA Affordable Housing Mortgage, which includes the pre-development, closing and initial hard costs. It is expected that there will be a portion of the LIHTC investor funds provided at closing, with timing of the balance of the funds a key element of the proposal. The Kingfield South financial arrangement with 4% LIHTC with the investor means that there needs to be a bond. There will be a “soft” JHA Affordable Housing Mortgage, which includes the pre-development, closing and initial hard costs. There will also be a JHA Purchase Money Note equal to 95% of the appraised value of the existing development. As with Kingfield North, it is expected that there will be a portion of the LIHTC investor funds provided at closing, with timing of the balance of the funds a key element of the proposal. The Kingfield Combo financial arrangement with 4% LIHTC with the investor means that there needs to be a bond. There will be a “soft” JHA Affordable Housing Mortgage, which includes the pre-development, closing and initial hard costs. There will also be a JHA Purchase Money Note equal to 95% of the appraised value of the existing development. As with Kingfield North and Kingfield South, it is expected that there will be a portion of the LIHTC investor funds provided at closing, with timing of the balance of the funds a key element of the proposal. A contract for construction services for each property is in process of being obtained, also by a Request for Proposals (RFP) process. If the Kingfield North and Kingfield South approach is used, construction services for each property will be by the same General Contractor (“GC”). It is expected that the selection of the GC will be complete by the end of June, 2016. Legal services for the LLCs are provided by Klein-Hornig (John Achatz, lead). Financial services are provided by CohnReznick (Nick Ratti, lead).
3
2. General Statement of Work The competitive proposals method considers the Offeror’s qualifications, capability, approach, price and schedule. The Offeror includes value-added elements as part of the proposal. Offerors are expected to apply techniques that meet each of the conditions set for in this Request for Proposal. Within these criteria, the Offeror is encouraged to be creative and innovative. The work is to provide syndicator/investor services for…
• The expected 9% LIHTC allocation for Kingfield North, with associated lender for the construction/bridge loan.
coordinated with • The 4% LIHTC allocation for Kingfield South, with associated underwriting of tax-
exempt debt related to the 4% LIHTC allocation. OR
• The 4% LIHTC allocation for all of Kingfield, with associated underwriting of tax-exempt debt related to the 4% LIHTC allocation.
Architectural drawings (50% completion) are found at Appendix B. Various due diligence documents (such as market study and environmentals) are available on request, in PDF form. 3. Proposal Documents All information associated with the RFP is contained in this document. 4. Proposal Security No Proposal Security is required with the submittal of a proposal. 5. Questions regarding this RFP Any questions from potential Offerors concerning this RFP must be submitted by email, directed
to Misty Gordon, THDC, at [email protected] All requests must be received by 11:30 a.m. CT on Thursday, June 23, 2016.
There will be no response to requests received after that date and time. There will no pre-proposal conference. 6. Special Contracting Requirements The work will be funded in part with financial assistance from the U.S. Department of Housing and Urban Development (HUD). Offerors are hereby notified to carefully familiarize themselves with all applicable conditions and requirements. Special attention is hereby drawn to the following:
Nondiscrimination in Employment: The successful Offeror will be required to comply with the President’s Executive Order Number 11246. Eligibility: Awards will not be made to individuals or firms which are on lists of contractors ineligible to receive awards from the United States as furnished from time to time by the Department of Housing and Urban Development.
4
7. Form of Proposals A Proposal is to be submitted organized in the sections outlined below. The proposal must have a cover letter signed by a person authorized to bind the firm. The proposal must contain the address, office, cell phone and email address for the primary contact person. The proposal is to be submitted in PDF, via email. Note that elaborate proposals are not expected. What is sought in the proposal is a simple, straightforward presentation of how the Offeror will provide the services, the experience that qualifies the Offeror to do so (with particular reference to key individuals), references from similar, recent syndications, issues that impinge on meeting the schedule, and fee and payment terms. The relative importance of each factor is indicated by point assignment of the 100 total. It is THDC’s intent to maximize financial yield and minimize legal and operational complications in the LIHTC financing. The proposal must clearly distinguish Kingfield North and Kingfield South elements.
7.1 Approach — 45 points Present your proposed approach to the syndication. Discuss the steps to be taken, and the assistance that will be required of THDC staff and/or consultants. Provide proposed timing of pay-in and pricing for the LIHTC allocation for Kingfield North and Kingfield South assuming a closing date by end of September 2016, construction completion in September 2017, and leasing completed no later than December 2017. The THDC-created managing member and THDC as sponsor will be the guarantor for each property. Describe guarantees that will be required and for how much. Describe (by words and/or other means) how your approach achieves THDC’s intended objectives, and the benefits/costs of your proposed approach, both in general and in detail. In particular address improvements and/or efficiencies to the structure of the deal. Provide information on “value added” elements of your proposal. Examples of value-added include recent completion of deals of a similar sort, THDA experience, packaging of 4% and 9% LIHTC investor packages, proximity of key personnel to Jackson, and so on. In particular provide alternative pay-in amounts for (a) a traditional phased pay-in beginning at closing, (b) pay-in mostly at the 8609 stage, and (c) a third option of your choosing. Provide details for the proposed Bridge Loan and Bond financing associated with each property. Relate the bridge loan to the proposed syndication pay-in. Identify loan terms and interest rate. 7.2 Experience — 15 points Present the professional qualifications of the lead firm and other firms, notably legal counsel. Establish the specific qualifications relative to performance of the services necessary for this transaction. THDC is especially interested in knowing the skills, capabilities and experience of the key individuals who will be involved in this effort. The key individuals must be named, and their roles identified. This information is to be provided in both narrative and resume form. What is most important is to clearly understand who will be doing what, and why. The individuals proposed for the work must in fact conduct the work. It is expected the Proposal will provide evidence of the ability to undertake the syndication. Experience
5
working in multifamily settings involving HUD’s RAD regulations is considered an important qualification. 7.3 References — 10 points Provide at least three (3) references for syndications and for bond/loan work. The references must be for deals either currently in progress or completed ideally within the past two (2) years. Ideally the references will be for deals of a similar type. For each reference provide name and title of contact person, address (surface and email), phone and cell numbers. Describe the nature of deal for the reference. Describe the extent to which the proposed team (firms and individuals) was involved in the deal.
7.4 Schedule — 10 points Provide a proposed schedule by week in elapsed time, showing activity and milestones. Assume that the closing will occur by late September, 2016. 7.5 Fee and Payment Terms — 20 points Provide details on the amount and nature of fees you will charge associated with the LIHTC element, including but not limited to (for example), Asset Management fees, investor services fees, legal fees, and construction inspection fees. Provide similar details on fees and rates for the loan and bond components.
9. Acceptance of Proposals The Proposal must be submitted electronically in PDF format, to be received on or before the time and date below.
by NOON CT Thursday 23 June 2016 PDF copies of the proposal are to be sent to: Tom Nutt-Powell at [email protected] John Achatz at [email protected] Proposals submitted after the specified time and date will not be accepted. THDC reserves the right to accept or reject any or all proposals, to waive any non-conformances with the requirements of this RFP, to waive any formalities, to re-advertise this Request for Proposals, to withhold the award for any reason the Owner determines and/or to take any other appropriate action 9. Withdrawal of Proposals Proposals may be withdrawn on written request (PDF, via email) addressed to THDC. Such requests may be emailed by PDF on corporate stationery. Said written request must be received prior to the due date and time for proposal submittal. Proposals may not be withdrawn after the due date and time for proposal submittal. Negligence on the part of the Offeror in preparing his or her Proposal confers no right of modification of his or her Proposal after the Proposal due date.
6
10. Award Proposals are binding upon the Offeror for ninety (90) days after the date for submittal, subject to any agreed upon extension. The Competitive Proposals Process is being used. Each proposal will be evaluated on its individual merits by a ranking panel, in accordance with ranking criteria contained in the RFP which clearly identify the relative importance of price and other evaluation factors. Price will be used in determining the Competitive Range, which is those offers with a reasonable chance of obtaining the award, taking into account price and other evaluation factors as published in the RFP.
If interviews are held, they will be conducted by telephone at a mutually convenient time on Wednesday June 29. Notice will be given by 2:30 pm CT on Tuesday June 28.
The proposal that best conforms to the needs of the Owner will be recommended for approval. The Owner reserves the right to interview Offerors deemed in the Competitive Range, and/or negotiate a contract with the Offeror whose qualifications, price and other factors considered, are ranked the highest. Should one or more Offerors be asked to submit Best and Final Offers (BAFO), those Offers are also ranked and shall be binding upon the BAFO Offeror(s) for ninety (90) days after the deadline for receipt of Best and Final Offers if any. 11. Equal Opportunity THDC is an Equal Opportunity Employer.
Kingfield North FINANCING PRO FORMA9% LIHTC, PMN, RAD, 50 units, 75% allocation 22-May-16TOTAL UNITS 50 ALL
100.00% of total% of 0
FINANCE D E T A I L S Sources per Unit NOTESJHA Affordable Housing Mortgage JHA 31.83% $3,065,000 $87,571 SOFT DEBT (estimate, actual TBD)Interest Rate 2.24% AFR (May 2016)Term in years 40Purchase Money Note (95% of acquisition price) JHA 0.00% $0 $0 land leaseInterest Rate (PMN) 2.24% AFR (May 2016)Term (PMN) in years 40
THDC Pre-Dev Loan $850,000 covers Pre-Dev Soft Costs; repaid at close-outBridge Loan $6,000,000 assumes 10% equity at closing
HARD C O S T S Total % $0 per Unit NOTES Acquisition $0 0.00% $0 $0 Land lease only Construction (direct trades) $5,010,716 52.04% $5,010,716 $143,163 estimate Contingency $718,725 7.46% $718,725 $20,535 Estimate (all purposes) 12.5% trades & markup Permits & Fees $37,580 0.39% $37,580 $1,074 GC General Conditions 6% $300,643 3.12% $300,643 $8,590 6/2/6 per requirements GC Overhead 2% $100,214 1.04% $100,214 $2,863 6/2/6 per requirements GC Profit 6% $300,643 3.12% $300,643 $8,590 6/2/6 per requirements
Total Acq & HardCosts $6,468,522 67.18% $6,468,522 $184,815Total Hard Costs $6,468,522 $291,083 4.50% of hard costs ($393k= 5%)
Total Hard Cost per DU $129,370
SOFT C O S T S Total $0 per Unit NOTESFees & Soft Costs s Professional Fees (A/E +) $418,722 4.35% $418,722 $11,963 6.47% of hard costs Split 1&2 Kings Project Administration $40,123 0.42% $40,123 $1,146 includes clerk-of-works Document Review Costs $20,741 0.22% $20,741 $593 includes due diligence, A/E, legal Accounting & Cost Certifications $55,000 0.57% $55,000 $1,571 includes pre-closing,, 8609, audit/tax returns Developer Legal/Org/Partnership $60,000 0.62% $60,000 $1,714 Filings, Deal Documents, Closing, Close-out Market Study $6,500 0.07% $6,500 $186 Due Diligence Environmental $15,000 0.16% $15,000 $429 Due Diligence Survey $19,877 0.21% $19,877 $568 Due Diligence Appraisal $0 0.00% $0 $0 Due Diligence Capital Needs Assessment $0 0.00% $0 $0 Not needed for newFinancing Costs Title & Recording Fees $20,000 0.21% $20,000 $571 JHA Interest Costs during Development $102,984 1.07% $102,984 $2,942 Bridge Loan Fees & Costs $120,000 1.25% $120,000 $3,429 estimate Bridge Loan Interest Costs $600,000 6.23% $600,000 $17,143 24 months 5% Financing Documentation (HUD, other) $51,100 0.53% $51,100 $1,460 includes conventional, LIHTC, M-FTax Credit & Syndication Costs Tax Credit Fees $43,638 0.45% $43,638 $1,247 Reservation is 6.25% of allocation. App is $1575 TC Monitoring Fees $25,000 0.26% $25,000 $714 Monitoring $500/duReserves & Escrows
Marketing and Lease-Up $29,630 0.31% $29,630 $847 Escrow for staff expenses during lease-up Operating Reserve $125,000 1.30% $125,000 $3,571 $2500/duOther
Developer's Fee $1,250,000 12.98% $1,250,000 $35,714 99.46% < % of permitted. Cap is 15% of Costs (excluding Acq) + 10% of Acq
Relocation $0 0.00% $0 $0 31 households temporary Contingency $156,429 1.62% $156,429 $4,469 4.95% < Actual 5%± of soft costs.
Sub-Total Soft Costs $3,159,743 32.82% $3,159,743 $90,278Total Per DU $63,195
Total Project Development Costs $9,628,265 $9,628,265 $275,093Total Per DU $192,565
Total Per Res SF $231.43 % by category 100.0%
Kingfield North 9% LIHTC, PMN, RAD, 50 units, 75% allocation OPERATING PRO FORMA22-May-16
TOTAL UNITS 50 35 Non-RAD 15 RAD Comments70.0% of total 30.0% of total
I N C O M E per Unit per Unit
Gross Potential Non-RAD Rent $209,400 $5,983 NA NA
Gross Potential RAD Rent NA $88,920 $5,928 See "Rent Calc" tab for detail
Total Gross Potential Rent (GPR) $209,400 $5,983 $88,920 $5,928
Less Vacancy (Non-RAD) 6% ($12,564) ($359) NA Less Vacancy (RAD) 6% $0 n/a ($5,335) ($356)
Net Rental Income $196,836 $5,624 $83,585 $5,572
Total Other Income $4,597 $131 $1,970 $131 See "Rent Calc" tab for detail
Effective Gross Income (EGI) $286,987 $201,433 $5,755 $85,555 $5,704
E X P E N S E S % of total Non-RAD per Unit RAD per Unit NOTESFixed (RE Taxes +) 20.5% $33,747 $964 $14,463 $964 Estimated. Utilities 16.3% $26,771 $765 $11,473 $765 Estimated. Maintenance Contracts + 12.6% $20,620 $589 $8,837 $589 Estimated. Staff + Mgt Fee 38.3% $62,821 $1,795 $26,923 $1,795 Estimated. Other Direct Costs 12.3% $20,267 $579 $8,686 $579 Estimated. Includes "placeholder".Subtotal Expenses 100.0% $164,226 $4,692 $70,382 $4,692Contribution(s) to:
Total Expenses and Reserves $255,608 $5,112 $178,926 $76,682
PUPM $426.00
Kingfield South FINANCING PRO FORMA4% LIHTC, JHA "soft" Debt, PMN, RAD 22-May-16
TOTAL UNITS 31 ALL100.00% of total
% of 0FINANCE D E T A I L S Sources per Unit NOTESJHA Affordable Housing Mortgage JHA 33.15% $1,373,000 $85,813 SOFT DEBT (includes PreDev)Interest Rate 2.24% AFR (May 2016)Term in years 40Purchase Money Note (95% of acquisition price) JHA 30.67% $1,270,250 $79,391 SOFT DEBTInterest Rate (PMN) 2.24% AFR (May 2016)Term (PMN) in years 40
Bridge Loan $2,184,000 52% of total costs Repaid at close-out
HARD C O S T S Total % $0 per Unit NOTES Acquisition $1,335,000 32.23% $1,335,000 $83,438 Per Nov 2015 appraisal excludes land value (ground lease) Construction (direct trades) $1,186,828 28.66% $1,186,828 $74,177 estimate Contingency $170,236 4.11% $170,236 $10,640 Estimate (all purposes) 12.5% trades & markup Permits & Fees $8,901 0.21% $8,901 $556 GC General Conditions 6% $71,210 1.72% $71,210 $4,451 6/2/6 per requirements GC Overhead 2% $23,737 0.57% $23,737 $1,484 6/2/6 per requirements GC Profit 6% $71,210 1.72% $71,210 $4,451 6/2/6 per requirements
Total Acq & HardCosts $2,867,121 69.23% $2,867,121 $179,195Total Hard Costs $1,532,121 $68,945 4.50% of hard costs ($393k= 5%)
Total Hard Cost per DU $49,423
SOFT C O S T S Total $0 per Unit NOTESFees & Soft Costs s Professional Fees (A/E +) $160,252 3.87% $160,252 $10,016 10.46% of hard costs Shared with 2nd Kings Project Administration $24,877 0.60% $24,877 $1,555 includes clerk-of-works Document Review Costs $12,859 0.31% $12,859 $804 includes due diligence, A/E, legal Accounting & Cost Certifications $65,000 1.57% $65,000 $4,063 includes pre-closing,, 8609, audit/tax returns Developer Legal/Org/Partnership $30,617 0.74% $30,617 $1,914 Filings, Deal Documents, Closing, Close-out Market Study $2,488 0.06% $2,488 $155 Due Diligence Environmental $5,741 0.14% $5,741 $359 Due Diligence Survey $12,323 0.30% $12,323 $770 Due Diligence Appraisal $4,593 0.11% $4,593 $287 Due Diligence Capital Needs Assessment $7,500 0.18% $7,500 $469 Due DiligenceFinancing Costs Title & Recording Fees $12,500 0.30% $12,500 $781 JHA Interest Costs during Development $46,133 1.11% $46,133 $2,883 Bond Fees & Costs $100,000 2.41% $100,000 $6,250 estimate Bond Interest Costs $245,700 5.93% $245,700 $15,356 30 months 4.5% Financing Documentation (HUD, other) $19,557 0.47% $19,557 $1,222 includes conventional, LIHTC, M-FTax Credit & Syndication Costs Tax Credit Fees $13,750 0.33% $13,750 $859 Reservation is 5% of allocation. App is $1200 TC Monitoring Fees $12,400 0.30% $12,400 $775 Monitoring $400/duReserves & Escrows
Marketing and Lease-Up $18,370 0.44% $18,370 $1,148 Escrow for staff expenses during lease-up Operating Reserve $77,500 1.87% $77,500 $4,844 $2500/duOther
Developer's Fee $308,000 7.44% $308,000 $19,250 99.98% < % of permitted. Cap is 15% of Costs (excluding Acq) + 10% of Acq
Relocation $18,600 0.45% $18,600 $1,163 31 households temporary Contingency $75,814 1.83% $75,814 $4,738 5.95% < Actual 5%± of soft costs.
Sub-Total Soft Costs $1,274,573 30.77% $1,274,573 $79,661Total Per DU $41,115
Total Project Development Costs $4,141,694 $4,141,694 $258,856Total Per DU $133,603
% by category 100.0%Equity Required $1,498,444 $93,653 includes Deferred JHA Loan interest
Housing-SolutionsDeal Designer
Kingfield South 4% LIHTC, JHA "soft" Debt, PMN, RAD OPERATING PRO FORMA22-May-16
TOTAL UNITS 31 16 Non-RAD 15 RAD Comments51.6% of total 48.4% of total
I N C O M E per Unit per UnitGross Potential Non-RAD Rent $108,384 $6,774 NA NAGross Potential RAD Rent NA $94,080 $6,272 See "Rent Calc" tab for detail
Total Gross Potential Rent (GPR) $108,384 $6,774 $94,080 $6,272
Less Vacancy (Non-RAD) 3% ($3,252) ($203) NA Less Vacancy (RAD) 3% $0 n/a ($2,822) ($188)Net Rental Income $105,132 $6,571 $91,258 $6,084
Total Other Income $2,654 $166 $2,488 $166 See "Rent Calc" tab for detail
Effective Gross Income (EGI) $201,532 $107,787 $6,737 $93,746 $6,250
E X P E N S E S % of total Non-RAD per Unit RAD per Unit NOTESFixed (RE Taxes +) 18.5% $15,427 $964 $14,463 $964 Estimated. Utilities 16.8% $13,964 $873 $13,091 $873 Estimated. Maintenance Contracts + 11.3% $9,426 $589 $8,837 $589 Estimated. Staff + Mgt Fee 34.5% $28,718 $1,795 $26,923 $1,795 Estimated. Other Direct Costs 18.9% $15,716 $982 $14,734 $982 Estimated. Includes "placeholder".Subtotal Expenses 100.0% $83,252 $5,203 $78,049 $5,203Contribution(s) to:
Total Expenses and Reserves $174,321 $5,623 $89,972 $84,349
PUPM $468.58
Kingfield N&S Combo FINANCING PRO FORMA4% LIHTC, JHA 1st & PMN, RAD, 81 units 22-May-16TOTAL UNITS 81 ALL
100.00% of total% of 0
FINANCE D E T A I L S Sources per Unit NOTESJHA Affordable Housing Mortgage JHA 51.49% $6,874,900 $134,802 SOFT DEBT (estimate, actual TBD)Interest Rate 2.24% AFR (May 2016)Term in years 40Purchase Money Note (95% of acquisition price) JHA 9.50% $1,268,250 $24,868 SOFT DEBT Interest Rate (PMN) 2.24% AFR (May 2016)Term (PMN) in years 40
THDC Pre-Dev Loan $850,000 covers Pre-Dev Soft Costs; repaid at close-outBond Loan $6,916,000 assumes 10% equity at closing
HARD C O S T S Total % $0 per Unit NOTES Acquisition $1,335,000 10.00% $1,335,000 $26,176 Per Nov 2015 appraisal minus land value (Ground lease) Construction (direct trades) $6,197,544 46.42% $6,197,544 $121,520 estimate Contingency $888,960 6.66% $888,960 $17,431 Estimate (all purposes) 12.5% trades & markup Permits & Fees $46,482 0.35% $46,482 $911 GC General Conditions 6% $371,853 2.78% $371,853 $7,291 6/2/6 per requirements GC Overhead 2% $123,951 0.93% $123,951 $2,430 6/2/6 per requirements GC Profit 6% $371,853 2.78% $371,853 $7,291 6/2/6 per requirements
Total Acq & HardCosts $9,335,643 69.92% $9,335,643 $183,052Total Hard Costs $8,000,643 $360,029 4.50% of hard costs ($393k= 5%)
Total Hard Cost per DU $98,773
SOFT C O S T S Total $0 per Unit NOTESFees & Soft Costs s Professional Fees (A/E +) $578,974 4.34% $578,974 $11,352 7.24% of hard costs Project Administration $65,000 0.49% $65,000 $1,275 includes clerk-of-works Document Review Costs $33,600 0.25% $33,600 $659 includes due diligence, A/E, legal Accounting & Cost Certifications $65,000 0.49% $65,000 $1,275 includes pre-closing,, 8609, audit/tax returns Developer Legal/Org/Partnership $60,000 0.45% $60,000 $1,176 Filings, Deal Documents, Closing, Close-out Market Study $8,988 0.07% $8,988 $176 Due Diligence Environmental $15,000 0.11% $15,000 $294 Due Diligence Survey $32,200 0.24% $32,200 $631 Due Diligence Appraisal $4,593 0.03% $4,593 $90 Due Diligence Capital Needs Assessment $7,500 0.06% $7,500 $147 Not needed for newFinancing Costs Title & Recording Fees $20,000 0.15% $20,000 $392 JHA Interest Costs during Development $273,610 2.05% $273,610 $5,365 1st & PMN Bond Loan Fees & Costs $121,030 0.91% $121,030 $2,373 estimate Bond Interest Costs $657,020 4.92% $657,020 $12,883 24 months 4.75% Financing Documentation (HUD, other) $51,100 0.38% $51,100 $1,002 includes conventional, LIHTC, M-FTax Credit & Syndication Costs Tax Credit Fees $43,638 0.33% $43,638 $856 Reservation is 6.25% of allocation. App is $1575 TC Monitoring Fees $40,500 0.30% $40,500 $794 Monitoring $500/duReserves & Escrows
Marketing and Lease-Up $48,000 0.36% $48,000 $941 Escrow for staff expenses during lease-up Operating Reserve $202,500 1.52% $202,500 $3,971 $2500/duOther
Developer's Fee $1,472,000 11.02% $1,472,000 $28,863 97.16% < % of permitted. Cap is 15% of Costs (excluding Acq) + 10% of Acq
Relocation $18,600 0.14% $18,600 $365 31 households temporary Contingency $197,824 1.48% $197,824 $3,879 4.93% < Actual 5%± of soft costs.
Sub-Total Soft Costs $4,016,676 30.08% $4,016,676 $78,758Total Per DU $49,589
Total Project Development Costs $13,352,319 $13,352,319 $261,810Total Per DU $164,843
Total Per Res SF $189.21 % by category 100.0%Equity Required $5,209,169 $102,141 includes JHA interest costs (1st & PMN)
Housing-SolutionsDeal Designer
Kingfield N&S Combo 4% LIHTC, JHA 1st & PMN, RAD, 81 units OPERATING PRO FORMA22-May-16
TOTAL UNITS 81 51 Non-RAD 30 RAD Comments63.0% of total 37.0% of total
I N C O M E per Unit per UnitGross Potential Non-RAD Rent $313,464 $6,146 NA NAGross Potential RAD Rent NA $179,880 $5,996
Total Gross Potential Rent (GPR) $313,464 $6,146 $179,880 $5,996
Less Vacancy (Non-RAD) 6% ($18,808) ($369) NA Less Vacancy (RAD) 6% $0 n/a ($10,793) ($360)Net Rental Income $294,656 $5,778 $169,087 $5,636
Total Other Income $5,594 $110 $3,291 $110
Effective Gross Income (EGI) $472,629 $300,251 $5,887 $172,378 $5,746
E X P E N S E S % of total Non-RAD per Unit RAD per Unit NOTESFixed (RE Taxes +) 20.3% $47,222 $926 $27,778 $926 Estimated. Utilities 17.7% $41,115 $806 $24,185 $806 Estimated. Maintenance Contracts + 12.9% $30,046 $589 $17,674 $589 Estimated. Staff + Mgt Fee 39.3% $91,539 $1,795 $53,846 $1,795 Estimated. Other Direct Costs 9.9% $23,005 $451 $13,532 $451 Estimated. Subtotal Expenses 100.0% $232,926 $4,567 $137,016 $4,567Contribution(s) to:
8 Kingsfield Dr - Google Maps https://www.google.com/maps/place/8+Kingsfield+Dr,+Jackson,+T...
1 of 2 5/24/16, 9:13 AM
9
Appendix C
THDC Developments
TENNESSEE HOUSING DEVELOPMENT CORPORATION Tennessee Housing Development Corporation (“THDC”) is the project sponsor/developer for the a broad range of affordable housing development in Jackson, TN. THDC is a 501c3 affiliate of the Jackson Housing Authority (“JHA”). All developments received 4% or 9% LIHTC allocations from the Tennessee Housing Development Authority (“THDA”). All developments use the HUD mixed-finance method, with S8/PBV and S9 operating subsidy to provide a full breadth of afford-ability.
The Village at Old Hickory is the first THDC development. It involved acquisition in December 2004 of a 1970s private-sector development, with 143 units. Some major rehab was completed, including provision of fully-accessible ADA unit. The property has S8/PBV and S9 operating subsidy
East Pointe is the second THDC development. It involved acquiring in 2006 a 1960s-era FHA-subsidized development, with 50 units, with the HAP contract continuing The site size permitted construction of 49 new units, which have S9 subsidy, which were completed in 2007.
McMillan Towers is the third THDC development. It was acquired from JHA in 2007. Major rehab was completed in 2008. The rehab entailed reducing from 151 to 124 units, mainly combining 0BR units to make more appealing 1BR units. The property has both S8/PBV and S9 operating subsidy. It also used innovative financing via HUD’s CFFP program. The development received national recognition, including an article in Tax Credit Advisor.
Centennial Pass is the fourth THDC development. It provides 48 1BR units for seniors, on the site of a former JHA property destroyed by a 2003 tornado. Construction occurred during 2009, with fully occupancy in June 2010. with full occupancy in early 2013 The property has both S8/PBV and S9 operating subsidy.
The next THDC development is Kingfield. It will have 31 existing and 50 new construction units. It is being undertaken via HUD’s RAD program. There will be 1, 2 & 3BR units. Set on a hillside in the northern part of Jackson, it will dramatically transform the existing development and add to the neighborhood.
May, 2016
10
Appendix D Legal Notice
REQUEST FOR PROPOSALS Investor Services
Tennessee Housing Development Corporation Proposals are requested by Tennessee Housing Development Corporation (THDC) from firms capable of providing Investor Services for Low-Income Housing Tax Credits (LIHTC) and associated lender services. THDC is an “instrumentality” of the Jackson Housing Authority (JHA). The work is for new and rehabbed housing, located at the existing Kingfield development and on the vacant parcel to the north, located at Kingsfield Drive, just off North Royal Street, Jackson, TN. The projects are proceeding under HUD’s RAD program. Submittals will be evaluated according to published criteria. A clearly marked “Investor Services Proposals” in PDF must be received by email at the THDC offices attention Misty Gordon ([email protected]) by 11:30 am CT on Thursday June 23, 2016 in order to be considered. A PDF of the RFP package is available by emailing Ms. Gordon at the above email address. All persons requesting a copy of the RFP package must provide name, mailing address, telephone and cell numbers, and email address in case any addenda are issued. Written inquiries may be submitted no later than 2:30 pm, Monday, June 20, 2016. Inquiries may be sent via email to [email protected]. There will not be a pre-submission conference.
