NE Grand Apartments Request for Proposals (RFP#05/17-333) Addendum #1 Published 05/2 /2017

Transcription

1 NE GRAND APARTMENTS REQUEST FOR PROPOSALS HOME FORWARD RFP# 05/ For Low Income Housing Tax Credit Investor/Limited Partner and Construction and Permanent Lender 1

2 Subject: RFP 05/ for a Low Income Housing Tax Credit Investor/Limited Partner, Construction and Permanent Lender for the financing of 240 units of affordable rental housing to be developed as the NE Grand Apartments. RFP Issue Date: May 09, 2017 Information Meeting: An information meeting will be held via teleconference at 10:00 AM Pacific Daylight Time on May 16, Please dial the following toll-free conference number to participate: , passcode Proposal Due Date: Submit Proposals to: May 30, 2017 at 2:00PM Pacific Daylight Time Submit proposals electronically via to: Ben.loftis@homeforward.org with the subject line of the NE Grand Apartments RFP #05/ Proposal The , including attached materials must be smaller than 20 MB for Home Forward to receive them. Please contact Ben Loftis at least 24 hours prior to the proposal due date and time if the submittal will be larger than 20 MB. Solicitation Contact: Document Availability: Ben Loftis Home Forward 135 SW Ash Street Portland, OR Tel: ben.loftis@homeforward.org Hard copies of the Solicitation and all required forms and attachments may be obtained beginning May 09, 2017, from 8:30AM to 4:30PM weekdays at Home Forward at the address noted above. Electronic copies of the Solicitation and all required forms and attachments may be obtained on the Home Forward web site at 2

3 The following additions to and clarifications of RFP#05/ shall take precedence over those portions of the original RFP to which they refer. All unaltered provisions of the RFP shall remain in effect. Not all questions posed by potential respondents may have been answered. In some cases, questions may have been altered or combined with others. Pre-Proposal Conference Call Attendees (5/16/2017) Thank you for those who attended the conference call on 5/16/2017. Below is a list of financial partners who attended as well as one contact person for each entity: Financial Partner Alliant Capital Bank of America Barings Boston Capital Chase Citi Community Capital Greystone Imperium Capital National Affordable Housing Trust Prudential Richman Capital US Bank Wells Fargo Wells Fargo Equity Contact Ruby Dhillon Jan Laskey Sean Cullen Corine Sheridan Bob Powers Merle Malakoff Joe Averbook Andrew Pilchick Paul Cummings Kenji Tamaoki Terry Gentry Ann Melone Amy Mandell Timothy McCann Residential Operations 1. Question: Please explain the calculation for the laundry income for the property. Will the project own the laundry machines, or lease them. Or what assumptions are behind the number (experience, etc.). Answer: It is assumed that the partnership will own the laundry equipment. The proforma model includes $125 per unit per year in laundry income. This amount is based on our experience housing similar populations in similar sized properties. Parking 2. Question: Are you proposing to negotiate parking agreements for the residents with adjacent properties? Please describe the alternative parking sources. 3

4 Answer: A major medical provider owns approximately 3.7 acres of surface and structured parking within a 3-block (500 feet) radius of the site. The parking is largely vacant on evenings and weekends. Home Forward intends to propose a shared parking strategy to the major medical provider prior to occupancy. We don t yet have a sense of whether the idea will be well received, but we do know the City of Portland strongly desires shared parking arrangements in the central city that make better use of underutilized surface and structured parking. Construction Period Cash Flow 3. Question: Do you have a flow of funds during construction or a projected draw schedule? Answer: Please see the included construction period cash flow. Commercial Condominium 4. Question: What is your plan and timing for the condominium conversion? Answer: Oregon law requires the condominiums must be surveyed, so the condominium formation will be approximately at certificate of occupancy. Once the commercial condo is created and defined by survey, lease up will begin. After the commercial spaces are leased, Home Forward, as sole owner, has an interest in selling the commercial condo. We anticipate there will be lender and investor input, and will work with the selected NE Grand financial partners to formalize the plan and timing relative to the commercial condo. 5. Question: What are the most likely proposed retail and commercial uses for the commercial? Answer: NE Grand s nearest neighbors are: the Oregon Convention Center; the soon-to-be-constructed 600-room Oregon Convention Center hotel; the 168-room Hotel Eastlund; 1,278 market rate rental units by American Assets Trust either recently completed or in development; and 677 market rate rental units by a large California-based real estate developer, currently in development. The commercial lease space will be curated with service and retail businesses likely to be successful serving not only resident of NE Grand, but the broader residential and tourism markets. As of this writing, two of the five potential lease spaces will have infrastructure to support commercial kitchens and a third could support food service that doesn t require a grease trap (i.e., a coffee house). Kathleen Healy and Ashley Heichelbech of Commercial Real Estate Advisors Northwest have been retained to assist Home Forward with leasing the ground floor commercial space. 4

5 6. Question: What Tenant Improvements are you planning to make, and what is the source of TI funding if needed beyond the current budget? Answer: The commercial lease space is included in the GMP as cold shell with completed restrooms. The build-out of each space will be negotiated with the tenant and will be financed by Home Forward, the sole owner of the commercial condo. Portland Housing Bureau and Home Forward Resources 7. Question: Is the 99-year affordability restriction in place through the ground lease? Answer: For the purposes of this RFP, please assume the Portland Housing Bureau (PHB) affordability restriction is not in place through the ground lease. 8. Question: If the affordability restriction is not part of the ground lease, does the ground lease come with deed restrictions? Please specify any deed restrictions. Answer: For the purposes of this RFP, please assume the PHB will record a Trust Deed and Regulatory agreement subordinate to primary lender s Deed of Trust and the Bond Regulatory Agreement. 9. Question: Is there a ground lease payment (nominal or otherwise) and will that payment be subordinate (residual receipt or deferred or?) Answer: For the purposes of this RFP, please assume a nominal ground lease payment to PHB, subordinate to the primary debt service payment. As an alternate scenario, please explain the impact on your proposal if the subordinate ground lease payment is greater than nominal, but less than market rate. 10. Question: Does that unit mix/restriction survive foreclosure? Would a foreclosure scenario allow the permanent lender to reposition to achieve financial viability? Answer: For the purposes of this RFP, assume the PHB unit mix/restriction defined in the PHB Regulatory Agreement will not survive foreclosure. 11. Question: NOI as a source do you have cash flow projections showing the timing and availability of NOI to be used as a source? Answer: During the lease up and stabilization period there will be cash flow from operations prior to loan conversion. That source line item is labeled Lease Up Period Cash Flow. The source will be available at conversion to pay down the construction loan. We anticipate there will be lender and investor input, and will work with the selected NE Grand financial partners to structure and guarantee the source. 5

6 12. Question: Are there any holdback requirements on use of PHB or County funds, or will all their funds be available at closing/during construction? Answer: PHB and County funds will be structured into one subordinate cash-flow contingent debt product which will be prepared to flow into the deal at closing, but the bonds are assumed to be drawn first. 13. Question: System development charges and the waiver of practically all of those charges: Are these charges still basis eligible if they have effectively been waived? Answer: On NE Grand, SDC charges are basis eligible and the City will invoice for them. The City s waiver program for affordable housing will satisfy the invoice. This process, and it being considered in-basis, is based on our recent past experience and conversations we ve already had with the City for NE Grand. The City understands the nuance of this cost as it relates to the cost certification and will appropriately process the source and use. 6

7 NE Grand CLOSING/CONSTRUCTION START CONSTRUCTION PERIOD CASHFLOW Year 1 Total Through Source of Funding Cost 9/29/17 9/29/17 10/31/17 11/30/17 12/31/17 1/31/18 2/28/18 3/31/18 4/30/18 5/31/18 6/30/18 7/31/18 8/31/18 Construction Loan 35,355, ,381 1,375,355 1,833,807 2,292,258 2,750,710 2,750,710 3,209,162 3,667,613 3,667,613 3,209,162 2,750,710 2,750,710 Limited partner equity 5,363, , Tax Exempt Bonds/Perm Loan 0 0 Deferred Developer Fee 3,300, Portland Housing Bureau - TIF 5,100, Mult. County Funds 500, Lease Up Period Cash Flow 1,000, HF Capital-Residential 8,857, ,653 71,530 82,760 98, , , , ,524 Reinvested Developer Fee 4,934,331 4,146, ,500 61, , HF Capital-Commercial 2,501, ,523 1,100, , ,896 85, SDC Waivers 2,336, ,336, Total Sources 69,248,377 4,146,175 4,310,775 2,536,939 2,129,925 2,578,154 3,047,110 2,822,240 3,291,922 3,765,828 3,771,637 3,312,121 2,851,878 2,856,234 Cummulative Sources Drawn 4,146,175 8,456,950 10,993,889 13,123,814 15,701,968 18,749,078 21,571,318 24,863,240 28,629,068 32,400,705 35,712,826 38,564,704 41,420,937 Surplus or Gap in Sources from Uses 0 0 Accummulative Surplus or (Gap) 0 Use of Funding Acquisition Costs Land Purchase Price - 0 Buildings /Improvements Purchase Price - 0 Liens and Other Taxes - 0 Title Insurance / Closing / Recording 10, ,00 Extension Fees - 0 Other: - 0 Construction Costs General Conditions - 0 Construction Divisions Overhead & Mark-up - 0 Liability Insturance - 0 Builder's Risk - 0 Subcontractor Bond - 0 Performance Bond - 0 Estimating Contingency - 0 Inflation - 0 Security & Camera Systems - 0 Internet Systems - 0 FF&E - 0 Other: Site work - 0 Other: Garden scope - 0 Misc. Construction Costs 5, ,00 All Risk Insurance - 0 Owners Hard Cost Contingency 2,292, , , , , , Construction GMP Estimate 45,845, ,903 1,375,355 1,833,807 2,292,258 2,750,710 2,750,710 3,209,162 3,667,613 3,667,613 3,209,162 2,750,710 2,750,710-0 Development Costs Land Use Approvals 0 0 Building Permits & Fees (BDS & PBOT) 1,298, , , System Development Charges 2,787, ,787,80 Market Study 0 0 NEPA Environmental Review 0 0 Haz Mat Testing & Reports 15, ,50 Envelope Consultant 17, ,500 3,500 3,500 3,500 3,500 Geotechnical Engineering (Soils) 17,500 17,50 0 Topographic & ALTA Survey 15,000 7,50 0 Marketing/Advertising (Procurement) 0 0 Insurance - Construction Period 102, Third Party Cost Estimator (SD, DD) 35,000 35,00 0 Other: New OHCS Fees 0 0 General Fees A&E (Cvl, Ls, Strc, MEP, Ltng, Ac, Tfc, S 2,346,086 2,111, ,730 11,730 11,730 11,730 11,730 11,730 11,730 11,730 11,730 11,730 11,730 SPD Architectural Review Fee 0 0 Engineering (included in A&E) 0 0 Legal/Accounting 160, ,000 16,00 Cost Certification (10%, Bonds, & Final) 20, Appraisals 15,500 7,75 0 Special Inspections & Testing 80, ,000 4,000 4,000 4,000 4,000 4,000 4,000 4,000 4,000 4,000 4,000 Developer Fee 8,945, , Broker Fee 88,717 0 Lock Rate Fee 0 0 Project Management Fee 0 0 Other: LEED Commissioning 40, , Construction Loan Costs/Fees Lender Inspection Fees 25, ,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 Lender Title Insurance 135, ,00 0 Lender Legal Fees 45,000 45,00 0 Loan Fees 247, ,49 0 Loan Closing Fees 10,000 10,00 0 Property Taxes (Construction Period) 0 0 Insurance 0 0 Bridge Loan Fees Bridge Loan Legal 0 0 Bridge Loan Trustee 0 0 Bridge Loan Underwriting 0 0 Permanent Loan Fees Perm. Loan Fee 0 0 Perm. Loan Closing Fees 30, Perm. Lender Title Insurance 0 0 Perm. Lender Legal Fees 0 0 Tax Credit Fees Tax Credit Fees 312, ,276 Tax Credit Cost Certification 0 0 Tax Credit Legal/Advisor Fee 95,000 95,00 0 Bond Issuance Fees Cost of Bond Issuance 12,500 12,50 0 Negative Arbitrage (1.50%) 0 0 Bond Cost Certification 0 0 Other: 0 0 Interest Construction Period 1,237, ,469 5,373 9,003 13,359 17,715 22,798 28,606 34,414 39,497 43,853 48,209 Bridge Loan 0 0 Other: Post Construction to Stabilization 1,767,784 0 Other: 0 0 Reserves/Contingency Lease Up/Operating Working Capital 100, Development (Soft Cost) Contingency 614, ,295 18,442 24,589 30,737 36,884 36,884 43,032 49,179 49,179 43,032 36,884 36,884 Tenant Relocation 0 0 Deposit to Replacement Reserves 0 0 Operating Deficit Reserves 480, Operating Subsidy Reserves 0 0 Other: 0 0 Other: 0 0 Total Project Budget 69,248,377 4,146,175 4,310,775 2,536,939 2,129,925 2,578,154 3,047,110 2,822,240 3,291,921 3,765,829 3,771,637 3,312,120 2,851,878 2,856,234 Cumulative Uses 4,146,175 8,456,950 10,993,889 13,123,814 15,701,969 18,749,078 21,571,318 24,863,240 28,629,068 32,400,705 35,712,826 38,564,703 41,420,937 Construction S-Curve 2% 3% 4% 5% 6% 6% 7% 8% 8% 7% 6% 6%

8 NE Grand CONSTRUCTION PERIOD CASHFLOW Source of Funding Total Cost LEASE UP BEGINS Year /30/18 10/31/18 11/30/18 12/31/18 1/31/19 2/28/19 3/31/19 4/30/19 5/31/19 6/30/19 7/31/19 8/31/19 Construction Loan 35,355,681 Limited partner equity 5,363,718 Tax Exempt Bonds/Perm Loan 0 Deferred Developer Fee 3,300,000 Portland Housing Bureau - TIF 5,100,000 Mult. County Funds 500,000 Lease Up Period Cash Flow 1,000,000 HF Capital-Residential 8,857,435 Reinvested Developer Fee 4,934,331 HF Capital-Commercial 2,501,212 SDC Waivers 2,336, Total Sources 69,248,377 Cummulative Sources Drawn Surplus or Gap in Sources from Uses 0 Accummulative Surplus or (Gap) 2,750,710 2,163, , , , , , ,000 2,537, , , ,333 1,957,778 2,222,405 1,757,806 1,293, , ,870,231 2,421,114 2,457,778 2,222,405 1,757,806 1,293, , , , , ,000 2,537,474 44,291,169 46,712,283 49,170,061 51,392,465 53,150,271 54,443,478 55,272,085 56,108,193 56,817,382 56,941,381 57,065,381 59,602,855 Use of Funding Acquisition Costs Land Purchase Price - Buildings /Improvements Purchase Price - Liens and Other Taxes - Title Insurance / Closing / Recording 10,000 Extension Fees - Other: - Construction Costs General Conditions - Construction Divisions Overhead & Mark-up - Liability Insturance - Builder's Risk - Subcontractor Bond - Performance Bond - Estimating Contingency - Inflation - Security & Camera Systems - Internet Systems - FF&E - Other: Site work - Other: Garden scope - Misc. Construction Costs 5,000 All Risk Insurance - Owners Hard Cost Contingency 2,292,258 Construction GMP Estimate 45,845,165 - Development Costs Land Use Approvals 0 Building Permits & Fees (BDS & PBOT) 1,298,242 System Development Charges 2,787,800 Market Study 0 NEPA Environmental Review 0 Haz Mat Testing & Reports 15,000 Envelope Consultant 17,500 Geotechnical Engineering (Soils) 17,500 Topographic & ALTA Survey 15,000 Marketing/Advertising (Procurement) 0 Insurance - Construction Period 102,000 Third Party Cost Estimator (SD, DD) 35,000 Other: New OHCS Fees 0 General Fees A&E (Cvl, Ls, Strc, MEP, Ltng, Ac, Tfc, S 2,346,086 SPD Architectural Review Fee 0 Engineering (included in A&E) 0 Legal/Accounting 160,000 Cost Certification (10%, Bonds, & Final) 20,000 Appraisals 15,500 Special Inspections & Testing 80,000 Developer Fee 8,945,173 Broker Fee 88,717 Lock Rate Fee 0 Project Management Fee 0 Other: LEED Commissioning 40,000 Construction Loan Costs/Fees Lender Inspection Fees 25,200 Lender Title Insurance 135,000 Lender Legal Fees 45,000 Loan Fees 247,490 Loan Closing Fees 10,000 Property Taxes (Construction Period) 0 Insurance 0 Bridge Loan Fees Bridge Loan Legal 0 Bridge Loan Trustee 0 Bridge Loan Underwriting 0 Permanent Loan Fees Perm. Loan Fee 0 Perm. Loan Closing Fees 30,000 Perm. Lender Title Insurance 0 Perm. Lender Legal Fees 0 Tax Credit Fees Tax Credit Fees 312,276 Tax Credit Cost Certification 0 Tax Credit Legal/Advisor Fee 95,000 Bond Issuance Fees Cost of Bond Issuance 12,500 Negative Arbitrage (1.50%) 0 Bond Cost Certification 0 Interest Construction Period 1,237,449 Bridge Loan 0 Other: Post Construction to Stabilization 1,767,784 Reserves/Contingency Lease Up/Operating Working Capital 100,000 Development (Soft Cost) Contingency 614,737 Tenant Relocation 0 Deposit to Replacement Reserves 0 Operating Deficit Reserves 480,000 Operating Subsidy Reserves 0 Total Project Budget 69,248,377 Cumulative Uses Construction S-Curve , , , , , ,750,710 2,292,258 2,292,258 1,833,807 1,375, , , , ,292, , , , ,730 11,730 11,730 11,730 11,730 11,730 11,730 11,730 11, ,000 4,000 4,000 4,000 4,000 4,000 4,000 4,000 4, , , , ,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1, ,707 81, , , , , , , , , , , , ,000 36,884 30,737 30,737 24,589 18,442 12,295 6,147 6,147 6,147 6,147 6,147 6,147 2,870,231 2,421,114 2,457,778 2,222,405 1,757,806 1,293, , , , , ,000 2,537,474 44,291,168 46,712,283 49,170,061 51,392,465 53,150,271 54,443,477 55,272,085 56,108,192 56,817,381 56,941,381 57,065,380 59,602,855 6% 5% 5% 4% 3% 2% 1% 1% 0% 0% 0% 5%

9 NE Grand CONSTRUCTION PERIOD CASHFLOW Source of Funding Total Cost STABILIZATION CONVERSION Year Spread 9/30/19 10/31/19 11/30/19 12/31/19 1/31/20 2/29/20 3/31/20 4/30/20 5/31/20 6/30/20 7/31/20 8/31/20 Subtotal Balance Construction Loan 35,355,681 Limited partner equity 5,363,718 Tax Exempt Bonds/Perm Loan 0 Deferred Developer Fee 3,300,000 Portland Housing Bureau - TIF 5,100,000 Mult. County Funds 500,000 Lease Up Period Cash Flow 1,000,000 HF Capital-Residential 8,857,435 Reinvested Developer Fee 4,934,331 HF Capital-Commercial 2,501,212 SDC Waivers 2,336, Total Sources 69,248,377 Cummulative Sources Drawn Surplus or Gap in Sources from Uses 0 Accummulative Surplus or (Gap) 35,355, ,559,161 5,363, ,300,000 3,300, , , , , , ,852 73, ,100, , , , , , , ,089 1,000, ,857, ,934, ,501, ,336, , , , , , , , , , , ,852 8,239,250 69,248, ,726,855 59,844,707 59,962,559 60,080,411 60,198,263 60,316,116 60,461,718 60,655,570 60,773,423 60,891,275 61,009,127 69,248, Use of Funding Acquisition Costs Land Purchase Price - Buildings /Improvements Purchase Price - Liens and Other Taxes - Title Insurance / Closing / Recording 10,000 Extension Fees - Other: - Construction Costs General Conditions - Construction Divisions Overhead & Mark-up - Liability Insturance - Builder's Risk - Subcontractor Bond - Performance Bond - Estimating Contingency - Inflation - Security & Camera Systems - Internet Systems - FF&E - Other: Site work - Other: Garden scope - Misc. Construction Costs 5,000 All Risk Insurance - Owners Hard Cost Contingency 2,292,258 Construction GMP Estimate 45,845,165 - Development Costs Land Use Approvals 0 Building Permits & Fees (BDS & PBOT) 1,298,242 System Development Charges 2,787,800 Market Study 0 NEPA Environmental Review 0 Haz Mat Testing & Reports 15,000 Envelope Consultant 17,500 Geotechnical Engineering (Soils) 17,500 Topographic & ALTA Survey 15,000 Marketing/Advertising (Procurement) 0 Insurance - Construction Period 102,000 Third Party Cost Estimator (SD, DD) 35,000 Other: New OHCS Fees 0 General Fees A&E (Cvl, Ls, Strc, MEP, Ltng, Ac, Tfc, S 2,346,086 SPD Architectural Review Fee 0 Engineering (included in A&E) 0 Legal/Accounting 160,000 Cost Certification (10%, Bonds, & Final) 20,000 Appraisals 15,500 Special Inspections & Testing 80,000 Developer Fee 8,945,173 Broker Fee 88,717 Lock Rate Fee 0 Project Management Fee 0 Other: LEED Commissioning 40,000 Construction Loan Costs/Fees Lender Inspection Fees 25,200 Lender Title Insurance 135,000 Lender Legal Fees 45,000 Loan Fees 247,490 Loan Closing Fees 10,000 Property Taxes (Construction Period) 0 Insurance 0 Bridge Loan Fees Bridge Loan Legal 0 Bridge Loan Trustee 0 Bridge Loan Underwriting 0 Permanent Loan Fees Perm. Loan Fee 0 Perm. Loan Closing Fees 30,000 Perm. Lender Title Insurance 0 Perm. Lender Legal Fees 0 Tax Credit Fees Tax Credit Fees 312,276 Tax Credit Cost Certification 0 Tax Credit Legal/Advisor Fee 95,000 Bond Issuance Fees Cost of Bond Issuance 12,500 Negative Arbitrage (1.50%) 0 Bond Cost Certification 0 Interest Construction Period 1,237,449 Bridge Loan 0 Other: Post Construction to Stabilization 1,767,784 Reserves/Contingency Lease Up/Operating Working Capital 100,000 Development (Soft Cost) Contingency 614,737 Tenant Relocation 0 Deposit to Replacement Reserves 0 Operating Deficit Reserves 480,000 Operating Subsidy Reserves 0 Total Project Budget 69,248,377 Cumulative Uses Construction S-Curve , , ,292, ,845, ,298, ,787, , , , , , , , ,346, , , , , , , , ,603,397 8,945, , , , , , , , ,000 30, , , , ,237, , , , , , , , , , , , ,852 1,767, , , , , , , , , , , , , , , , , ,852 8,239,249 69,248, ,726,855 59,844,707 59,962,559 60,080,411 60,198,264 60,316,116 60,461,718 60,655,570 60,773,423 60,891,275 61,009,127 69,248, %