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SHARK TANK – 9% DEVELOPMENT PRESENTATION HARBOUR NORTH APARTMENTS – CHESAPEAKE, VA The Lawson Companies 373 Edwin Drive Virginia Beach, Virginia 23462 Strictly Private and Confidential
SHARK TANK – 9% DEVELOPMENT PRESENTATIONHARBOUR NORTH APARTMENTS – CHESAPEAKE, VAThe Lawson Companies373 Edwin DriveVirginia Beach, Virginia 23462
Strictly Private and Confidential
AGEN
DAAgenda
The Lawson Companies’ Experience
Site Location & Photos
Property Summary
Financing Pro Forma
Issues – The Good, The Bad, & The Hairy
EXPERIENCE
The Lawson Companies’ Experience
Established in 1972
Full-service real estate firm
Manages over 5,000 apartments from Virginia to South Carolina
Developed one of the first LIHTC communities in the State of Virginia in 1988
Received allocation of tax credits for 18 communities
In-house Tax Credit Compliance Department
SITE LOCATION & PHOTOGRAPHS
SITE LOCATIO
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Arial Photograph
SITE LOCATIO
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Arial Photograph – Proposed Site
SITE LOCATIO
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Harbour North Apartments – Pre-rehab
SITE LOCATIO
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Harbour North Apartments – Pre-rehab
SITE LOCATIO
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Harbour North Apartments – Pre-rehab
PROPERTY SUMMARY
PROPERTY SU
MM
ARYHarbour North Apartments Development Proposal
Acquisition/rehab of two 120-unit existing Rural Development communities built in 1978 and 1979 in Chesapeake, Virginia.
Utilize 9% Low-Income Housing Tax Credits Refinance and re-amortize existing RD debt Add new VHDA debt
Physical Features Thirty buildings, two stories in height, eight units in each building
192 - 1BR apartments 48 - 2BR apartments Rental office, laundry room, maintenance shop
Add new community center including a computer learning office ADA - convert 24 apartments to fully-accessible units with universal design features EarthCraft
In a Revitalization Area, not a QCT
FINANCING PRO FORMA
FINAN
CING
PRO FO
RMA
Financial Information
Rents 40% of AMI
24 – 1BR (553 SF) - $410 50% of AMI
24 – 1BR (600 SF) - $525 96 – 2BR (698 SF) - $645 96 – 2BR (745 SF) - $645
Operating Expenses $5,000 per unit per annum
Security budget $115,000 (almost 10% of annual OPEX budget) Insurance – Excess and Surplus Mkt + Flood Insurance
Loans – 25-year amortization Refinanced RD Debt - $1,985,744 (Rate – 1%) New SPARC/REACH Loan - $1,000,000 (Rate – 2.95%) New VHDA Taxable Bond - $3,100,000 (Rate – 6.92%)
Cash Flow After Debt Service - $75,102
FINAN
CING
PRO FO
RMA
Sources and Uses
Total Per Unit SOURCES OF FUNDS
First Mortgage $3,100,000 $12,917 SPARC Mortgage $1,000,000 $4,167 Assume RD Mortgage $1,985,744 $8,274 Deferred Dev Note $909,410 $3,789 Return from Sale of Investor Tax Credits $9,091,419 $37,881
TOTAL SOURCES OF FUNDS $16,086,573 $67,027
USES OF FUNDS Total Purchase of Land or Building $5,400,000 $22,500 Total New Construction / Rehabilitation $7,524,000 $31,350 Total Professional Fees $128,350 $535 Total Interim Costs $94,050 $392 Total Financing Fees & Expenses $225,563 $940 RD Debt Service $153,286 $639 Total Soft Costs $240,616 $1,003 Total Developer Fees $1,500,000 $6,250 Total Reserves $820,708 $3,420
TOTAL USES OF FUNDS $16,086,573 $67,027REMAINDER (SHORTAGE) OF FUNDS - -
ISSUES
ISSUES
The Good
Occupancy averages above 98% Many long-term residents TC eligible Located on an existing bus line Adding resident requested computer learning
center EarthCraft design will lower resident utility
expenses Post-rehab rents not substantially higher than
pre-rehab rents
The Bad
Aluminum wiring throughout apartments Located in a flood zone, has flooded to front steps several times Only 70% RA Some current residents exceed income limits – incentivize Adjacent to tough townhouse community Requesting to close side entrance on Channel Place
The Hairy
Timing of refinancing of two Rural Development loans to coincide with tax credit timelines
Renting accessible units slow without subsidy Cannot afford 24-hour security Development deferral is large (over 12 years) City wants non-residents to be able to use computer
learning center
THE REAL PRO
JECTThe Rivers Apartments – Post-rehab
THE REAL PRO
JECTThe Rivers Apartments – Post-rehab
THE REAL PRO
JECTThe Rivers Apartments – Post-rehab
THE REAL PRO
JECTThe Rivers Apartments – Post-rehab
THE REAL PRO
JECTThe Rivers Apartments – Post-rehab
