Agenda - Economic Development Authority - 05/14/2026

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FREERS Financial Analysis Total Development Cost - The total development cost for the project is $32.3 million, which is $316,667 per unit. For projects like this one, total development costs range between $300,000 and $350,000 per unit. The projected total development cost for this Project is within an acceptable range. Debt and Equity — Equity is the consideration (usually cash) that a Developer or investor provides as a down payment on the total development cost. For this Project, the Developer is providing 30% equity and financing the remainder with a traditional permanent loan and TIF (TIF is imbedded within the First Mortgage amount). Equity contributions for similar projects range from 20-45%. Rent, Revenue, and Operating Expenses — Project revenue for an assisted -living and memory care project such as this is comprised of rent and the services provided. The rental component is approximately one-third of the total amount paid by tenants, with services making up the remaining two-thirds. The proposed revenue and operating expenses are in line with other similar projects. To meet Housing TIF District requirements, 20% of the units will be income -verified at or below 50% of AMI. Land Acquisition Cost — The proposed land cost is $1,715,130, which is $16,815 per unit. For a multifamily project, we would expect to see land prices between $12,000 and $20,000 per unit. The projected land acquisition cost is within an acceptable range. Developer Fee — The developer fee is 3.1 % of total development costs, which is within the typical range of 3%-5% for a project of this type. Vacancy — The Developer is assuming 7% vacancy in the current Pro Forma. Ehlers adjusted this to 5% for this analysis which is standard for other projects like this one. Financial Performance Ehlers reviews multiple financial performance metrics, including Internal Rate of Return ("IRR") which is the most appropriate for this type of use. With the Ehlers adjustments to the Pro Forma, the IRR for the project is 11.06% in year 10 without any TIF assistance. If the project receives the proposed TIF assistance, the IRR for the project reaches 13.48%. Developers typically want to see an IRR of between 13%-16% for financial feasibility. The proposed TIF assistance will help the project reach, but not exceed, typical IRR thresholds. Recommendation Based on our review of the Developer's Pro Forma and under current market conditions, the proposed development may not reasonably be expected to occur solely through private investment within the near future. Due to the costs associated with developing the property as assisted -living and memory care housing, this project is only feasible, in part, through public assistance. BUILDING COMMUNITIES. IT'S WHAT WE DO. info•a:ehlers-inc.com Q 1 (800) 552-1171 www.ehlers-inc.com