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�EHLERS <br />LEADERS IN PUBLIC FINANCE <br />Memo <br />To: Sean Sullivan, Economic Development Manager <br />From: Jason Aarsvold, Ehlers <br />Date: 1-4-2023 <br />Subject: Home2 Suites — Request for Assistance <br />The City of Ramsey received a request for assistance to construct a 98 room Home2 Suites <br />within the COR area on City -owned land. The developer is requesting the City write -down the <br />cost of the land to $1 and provide apay-as-you-go (PAYGO) TIF note in the amount of <br />$550,000 to make the project financially feasible. <br />You requested that Ehlers review the developer's proposal to determine whether the request is <br />reasonable and within industry standards. Ehlers conducted a thorough review of the <br />developer's budget and operating pro forma to ensure all development costs, anticipated <br />revenues, and expenditures were represented appropriately. The table below depicts the <br />sources and uses of funds for the project as proposed by the developer. <br />SOURCES <br />" M <br />ON <br />First Mortgage <br />12145,250 <br />66.5% 123,931 <br />TIF PAYGO Note <br />550,000 <br />3.0% 5,612 <br />Developer Equity <br />5,555,239 <br />30.4% 567686 <br />TOTAL SOURCES <br />18,250,489 <br />100% 186,229 <br />USES <br />Acquisition Costs <br />1 <br />0.0% <br />0 <br />Construction Costs <br />14,0231063 <br />76.8% <br />1437092 <br />Permits/Fees <br />88,200 <br />0.5% <br />900 <br />Furniture, Fixtures, & Equipment <br />2,187,360 <br />12.0% <br />22,320 <br />Professional Services <br />497,500 <br />2.7% <br />5,077 <br />Financing Costs <br />536,209 <br />2.9% <br />5,472 <br />Developer Fee <br />373,698 <br />2.0% <br />37813 <br />Cash Accounts/Escrows <br />544458 <br />3.0% <br />5,556 <br />TOTAL USES <br />181250,489 <br />100% <br />186,229 <br />Analysis <br />Generally, this project meets the expectations of a limited service, or upper midscale, hotel <br />project as it relates to the financing structure, projected revenues, developer fee, and on -going <br />operational costs. Following are our findings from the analysis completed for the project: <br />BUILDING COMMUNITIES. IT'S WHAT WE DO. [ - info-,,ehlers-inc,com 1 (800) 55 -1171 a www,ehlers-inc.com <br />