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<br />...EHLERS
<br />ii. PUBLIC FINANCE ADVISORS
<br />Phase 1 Project and Pro Forma Analysis:
<br />• Project Financing: The Developer proposes to finance Phase 1 with a combination of debt
<br />and equity. The project assumes 68% debt financing (including the TIF portion) and 32%
<br />equity. The proposed financing is acceptable for the project.
<br />• Total Development Costs (TDC): The TDC of the project is nearly $88.9 million or $317,361
<br />per unit. Projects like this one are generally ranging between $250,000 and $325,000 per
<br />unit so the Phase 1 building is within the market range.
<br />• Land Acquisition Costs: The proposed land acquisition cost is $3.5 million or approximately
<br />$12,500 per unit. We would expect the cost of land to be between $7,000 and 15,000 per
<br />unit, so this land purchase price is acceptable for the project.
<br />• Rents: 20% of the units (56 total) will be set aside for those with incomes at or below 50%
<br />of area median income (AMI), which qualifies the project for inclusion in a Housing Tax
<br />Increment Financing district. The projected affordable rents are inflated for occupancy in
<br />2026 and acceptable for the project. Market rate rents are projected at $2.70 per sq. ft.
<br />which is the high end of the market for Ramsey.
<br />The affordable rent and income limits are set by the United States Department of Housing
<br />and Urban Development (HUD) on an annual basis. The following tables include the current
<br />rent and income limits.
<br />Income Limits by Household Size (2023)
<br />30%
<br />50%
<br />60%
<br />1 2 3 4 5 6 7 8
<br />26,100 29,820 33,540 37,260 40,260 43,230 46,230 49,200
<br />43,500 49,700 55,900 62,100 67,100 72,050 77,050 82,000
<br />52,200 59,640 67,080 74,520 80,520 86,460 92,460 98,400
<br />Maximum Gross Rents by Bedroom Size (2023)
<br />30%
<br />50%
<br />60%
<br />Studio 1 2 3 4 5 6
<br />652 699 838 969 1,080 1,192 1,304
<br />1,087 1,165 1,397 1,615 1,801 1,988 2,173
<br />1,305 1,398 1,677 1,938 2,616 2,385 2,608
<br />• Operating Expenses: The operating expenses of approximately $6,606 per unit per year
<br />are higher than the typical range of $3,500 to $4,500 per unit per year (before
<br />management fees, property taxes, and replacement reserves). These operating expenses
<br />include the management fee, however, and are acceptable for the project.
<br />• Reserves: The annual deposit to replacement reserves are proposed to be at $275 per unit
<br />per year. Typical deposits to the replacement reserve range between $250 - $450.
<br />BUILDING COMMUNITIES. IT'S WHAT WE DO.
<br />info@ehlers-inc.com yL) 1 (800) 552-1171
<br />www.ehlers-inc.com
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