An Economic Analysis Of the Madison Park Financial Project

An Economic Analysis Of the Madison Park Financial Project Final Report Prepared for Berkeley Regional Center Fund, LLC By Wright Johnson, LLC September 2016 205 Worth Avenue, Suite 201, Palm Beach, FL 33480 Telephone: (561) 282-6099 Email: info@wrightjohnsonllc.com

TABLE OF CONTENTS 1. Executive Summary 3 1-1 Introduction 5 1-2 Industry Cluster Definitions 6 1-3 Discussion of County Grouping Selected based on Combined Statistical Area Data 7 1-4 Summary of Economic Impact 7 2. Methods & Assumptions 9 2-1 Assumptions 9 2-2 Simulation Inputs 10 2-3 RIMS II Final Demand and Employment Multipliers 19 2-4 Calculation of Employment Results Using Final Demand Multiplier 19 2-5 Guidelines and Methodology for Construction Employment Creation 23 2-6 Economic Impacts of the Hollis Mews Project 24 2-7 Economic Impacts of the Gallot Lofts Project 30 2-8 Economic Impacts of the Hannah Lofts Project 36 2-9 Verification of Inputs 42 3. About RIMS II Final Demand Methodology 49 2

1. EXECUTIVE SUMMARY This economic analysis report, utilizing RIMS II, was prepared to evaluate the economic impacts of a specific project located within the San Jose-San Francisco-Oakland, California Combined Statistical Area ( CSA ), which is being developed under the sponsorship of the USCIS-approved Berkeley Regional Center Fund, LLC. The project involves the construction and operation of three separate apartment rental buildings (Hollis Mews, Gallot Lofts and Hannah Lofts) with a combined total of 212 units located in Oakland, California. This project s activities will be collectively referred to as the Madison Park Financial Project. The Madison Park Financial Project will result in the creation of 431.1 total new jobs from the construction and operation of the project. The Madison Park Financial Project will increase investment in the region by a one-time amount of $85,674,698. This impact analysis finds that the project will generate significant and positive economic benefits for the regional economy. The Madison Park Financial Project would result in annual growth in the regional economy by a gain of $19,320,000 in regional household earnings. The regional economy will experience increased need for business services of $5,750,000. The regional economy will experience annual increased demand on utilities of $244,000. The regional economy will experience an increased demand for maintenance and construction of $25,481,000. The regional economy will experience increased demand on new supplier and vendor links with manufacturers of $4,674,000. Based on the combined total financing for the project of $85,674,698 which will include $17,500,000 in EB-5 capital from 35 EB-5 investors, individual investors for the Hollis Mews Project will be assigned 12.9 jobs each; individual investors for the Gallot Lofts Project will be assigned 10.7 jobs each; and individual investors for the Hannah Lofts Project will be assigned 12.5 jobs each. These projects provide enough jobs to meet or exceed the requirements of the EB-5 program. The following charts summarize the annual revenues and the total permanent new jobs for construction and operation of each project. These figures assume that the expenditures/ revenues for each project given in the table are met. Summary of Employment Projection for the Madison Park Financial Project (Total Project) Project (with NAICS Code) Residential Building Construction (NAICS 2361) Architectural, Engineering and Related Services (NAICS 5413) Projected Expenditure/ Revenue RIMS II Final Demand Multiplier Total Number of New Direct Jobs Created Total Number of New Indirect Jobs Created Total Number of New Permanent Jobs Created $54.347 5.9806 325.0 325.0 $2.938 8.3760 24.6 24.6* Lessors of Real Estate (NAICS 5311) $7.943 10.2647 47.2 34.3 81.5 Total 431.1 *Indirect jobs only Dollar figures in millions, reduced to reflect 2013 dollars 3

Table 1-1. Summary of Employment Projection for the Hollis Mews Project Project (with NAICS Code) Residential Building Construction (NAICS 2361) Architectural, Engineering and Related Services (NAICS 5413) Projected Expenditure/ Revenue RIMS II Final Demand Multiplier Total Number of New Direct Jobs Created Total Number of New Indirect Jobs Created Total Number of New Permanent Jobs Created $33.096 5.9806 197.9 197.9 $1.447 8.3760 12.1 12.1* Lessors of Real Estate (NAICS 5311) $4.681 10.2647 27.8 20.2 48.0 Total 258.0 *Indirect jobs only Dollar figures in millions, reduced to reflect 2013 dollars Table 1-2. Summary of Employment Projection for the Gallot Lofts Project Project (with NAICS Code) Residential Building Construction (NAICS 2361) Architectural, Engineering and Related Services (NAICS 5413) Projected Expenditure/ Revenue RIMS II Final Demand Multiplier Total Number of New Direct Jobs Created Total Number of New Indirect Jobs Created Total Number of New Permanent Jobs Created $10.902 5.9806 65.2 65.2* $0.538 8.3760 4.5 4.5* Lessors of Real Estate (NAICS 5311) $1.522 10.2647 9.0 6.6 15.6 Total 85.3 *Indirect jobs only Dollar figures in millions, reduced to reflect 2013 dollars Table 1-3. Summary of Employment Projection for the Hannah Lofts Project Project (with NAICS Code) Residential Building Construction (NAICS 2361) Architectural, Engineering and Related Services (NAICS 5413) Projected Expenditure/ Revenue RIMS II Final Demand Multiplier Total Number of New Direct Jobs Created Total Number of New Indirect Jobs Created Total Number of New Permanent Jobs Created $10.350 5.9806 61.9 61.9* $0.953 8.3760 8.0 8.0* Lessors of Real Estate (NAICS 5311) $1.740 10.2647 10.4 7.5 17.9 Total 87.8 *Indirect jobs only Dollar figures in millions, reduced to reflect 2013 dollars 4

1-1 INTRODUCTION Wright Johnson, LLC, ( WJ ) has been retained by Berkeley Regional Center Fund, LLC ( BRCF ) to perform an economic assessment of a planned investment in the construction and operation of a project located within the state of California. The following industry clusters were analyzed as part of this project: 1. Residential Building Construction NAICS 2361 2. Architectural, Engineering and Related Services NAICS 5413 3. Lessors of Real Estate NAICS 5311 Berkeley Regional Center Fund, LLC is an approved EB-5 regional center with a geographic area encompassing the following contiguous counties within the State of California: Alameda, Contra Costa, San Mateo, Santa Clara, Santa Cruz, and Solano. The sphere of influence for the Madison Park Financial Project are the following twelve counties in California: Alameda, Contra Costa, Marin, Napa, San Benito, San Francisco, San Joaquin, San Mateo, Santa Clara, Santa Cruz, Solano, and Sonoma. This area is defined as the San Jose-San Francisco-Oakland, California Combined Statistical Area. A combined statistical area consists of a region that shares industry, infrastructure and housing and combines an area of urban agglomeration, called a commuter belt. The CSA is closely bound by employment and other commerce. The specific location of the project is economically integrated, and located within, both the approved regional center and the CSA and has been defined as the project region. Based on information provided by the developer, WJ performed an analysis for the target industry economic cluster in the proposed project specific geographic area. RIMS II was utilized. The focus of the study is analyzing the regional impacts of the construction and operation of three separate apartment rental buildings (Hollis Mews, Gallot Lofts, and Hannah Lofts) with a combined total of 212 units located in Oakland, California within the county of Alameda. WJ used RIMS II to model the total economic impact associated with various levels of site investment and operational employment. To quantify the net economic impact (direct and indirect) of the development, RIMS II modeled the following direct effects: Direct effects of construction employment, household earnings and output Effects of operational employment, household earnings and output WJ examined the project data provided by BRCF using a multi-industry sector, segregated-region model. Using this model, WJ was able to develop independent forecasts for the proposed use of the project. This segregation of forecasts allowed WJ/RIMS II to capture the total net effects of the proposed target industry. By analyzing the regional developments with different underlying assumptions for the specific industries, WJ established a realistic prediction of a potential outcome. The RIMS II economic model employed for the economic and job creation impact assessment study, forecasts the economic impact a specific event will generate throughout a determined area the San Jose-San Francisco-Oakland CSA. Over time, competitive pressures emerge and then tend to revert back to equilibrium. The process, in that way, depicts the so-called ripple effect impacts economic changes have on a region. In this case, the initial economic stimulation reverberates through the economy, spreading outward from the site of the new investment and business activity and across the geographic region and the nation. Eventually, the new waves of the economic activity are absorbed into the larger economy, creating a new level of economic equilibrium. In the long run, the project will materially alter the geographic area by the substantial amount of new investment and related business development activities, including a correspond- 5

ing higher level of output, taxation, investment, employment and household earnings in the regional economy. This report is intended to demonstrate the increased economic impacts within the geographic region. The proposed Madison Park Financial Project will require a total expenditure of $85,674,698 to provide for construction for the development, $17,500,000 of the total investment will be through EB-5 investor funds. 1-2 INDUSTRY CLUSTER DEFINITIONS 1 Residential Building Construction NAICS code 2361 This U.S. industry comprises general contractor establishments primarily responsible for the entire construction of new single-family housing, such as single-family detached houses and town houses or row houses where each housing unit (1) is separated from its neighbors by a ground-to-roof wall and (2) has no housing units constructed above or below; general contractors responsible for the on-site assembly of modular and prefabricated houses. Single-family housing design-build firms and single-family construction management firms acting as general contractors are included in this industry; general contractor establishments primarily responsible for the construction of new multifamily residential housing units (e.g., high-rise, garden, town house apartments, and condominiums where each unit is not separated from its neighbors by a ground-to-roof wall). Multifamily design-build firms and multifamily housing construction management firms acting as general contractors are included in this industry; establishments primarily engaged in building new homes on land that is owned or controlled by the builder rather than the homebuyer or investor. The land is included with the sale of the home. Establishments in this industry build single and/or multifamily homes. These establishments are often referred to as merchant builders, but are also known as production or for-sale builders; and establishments primarily responsible for the remodeling construction (including additions, alterations, reconstruction, maintenance, and repair work) of houses and other residential buildings, single-family, and multifamily. Included in this industry are remodeling general contractors, for-sale remodelers, remodeling design-build firms, and remodeling project construction management firms. Architectural, Engineering, and Related Services NAICS code 5413 This industry comprises establishments primarily engaged in planning and designing residential, institutional, leisure, commercial, and industrial buildings and structures by applying knowledge of design, construction procedures, zoning regulations, building codes, and building materials. Also, this industry comprises establishments primarily engaged in applying physical laws and principles of engineering in the design, development, and utilization of machines, materials, instruments, structures, processes, and systems. The assignments undertaken by these establishments may involve any of the following activities: provision of advice, preparation of feasibility studies, preparation of preliminary and final plans and designs, provision of technical services during the construction or installation phase, inspection and evaluation of engineering projects, and related services. Lessors of Real Estate NAICS code 5311 This industry comprises establishments primarily engaged in acting as lessors of buildings used as residences or dwellings, such as single-family homes, apartment buildings, and town homes. Included in this industry are owner-lessors and establishments renting real estate and then acting as lessors in subleasing it to others. The establishments in this industry may manage the property themselves or have another establishment manage it for them. 1. NAICS code definitions provided by the U.S. Census Bureau 6

1-3 DISCUSSION OF COUNTY GROUPING SELECTED BASED ON COMBINED STATISTICAL AREA DATA WJ used the San Jose-San Francisco-Oakland, California CSA as the basis of the region used for this analysis. The US Bureau of the Census defines a Combined Statistical Area as follows: A geographical region with a relatively high population density at its core and close economic ties throughout the area The general concept of a combined area is that of a large population nucleus, together with adjacent communities having a high degree of social and economic integration with that core. Combined areas comprise one or more entire counties, except in New England, where cities and towns are the basic geographic units. The Office of Management and Budget (OMB) define combined areas for purposes of collecting, tabulating, and publishing federal data. Combined area definitions result from applying published standards to Census Bureau data. The San Jose-San Francisco-Oakland CSA had a population of 8,153,696 as of the United States 2010 census. 2 The CSA is made up of the following counties: Alameda, Contra Costa, Marin, Napa, San Benito, San Francisco, San Joaquin, San Mateo, Santa Clara, Santa Cruz, Solano, and Sonoma. 1-4 SUMMARY OF ECONOMIC IMPACT If the project was to be operating at the stated capacities given in this report, the economic impact as measured by household earnings, demand for business services, utilities, maintenance and repair, and new supplier and vendor relationships is summarized in the chart below. Summary Measures of Economic Impact Household Income from: Hollis Mews Gallot Lofts Hannah Lofts Total Construction $9,563,000 $3,150,000 $2,991,000 $15,704,000 Architectural and Engineering Costs $522,000 $194,000 $344,000 $1,060,000 Leasing Operations $1,506,000 $490,000 $560,000 $2,556,000 Total Household Income $11,591,000 $3,834,000 $3,895,000 $19,320,000 Demand (Output) for: Professional and business support services $3,248,000 $1,110,000 $1,392,000 $5,750,000 Utilities $146,000 $48,000 $50,000 $244,000 Maintenance and repair construction $15,509,000 $5,108,000 $4,864,000 $25,481,000 Supplier/vendor links with manufacturers $2,824,000 $932,000 $918,000 $4,674,000 Total Demand $21,727,000 $7,198,000 $21,727,000 $36,149,000 2. American FactFinder; http://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?src=bkmk 7

Household Earnings (Labor Income) The jobs created by the various components of the project will subsequently create new sources of household income. The total household income from the project will be $19.32 million. This income calculation comes from the RIMS II input-output model, which measures the average income per job by industry. The model calculations are based on the types of jobs that will be created within the regional center, with indirect impacts allocated based on the types of commodity inputs required by the businesses that would potentially locate in the regional center. Demand for Business Services, Utilities, Maintenance and Construction, and New Supplier/Vendor Relationships Created with Manufacturers The total economic impact of the project from the supplier purchases and business relationships for the regional center will create approximately $36.15 million in additional economic activity across the region. These supplier purchases are calculated from the indirect increase in output generated by the RIMS II model. It should be noted that some of these supplier industries might potentially locate within the regional center, and their economic output is included in this total. The estimate of supplier purchases is based on the commodity data in the RIMS II input-output model. This data specifies the amount and type of commodity input needed to maintain specific types of business operations. The model estimates the supplier purchases based on the types of jobs and number of jobs that will be created within the regional center. In addition, the model allocates the supplier purchases to businesses within the region, based on trade flow data from the U.S. Bureau of Economic Analysis. The regional center will create demand for business services including, professional services, and business services and support services. The impact of this activity totals $5.75 million. Utilities include services such as electricity, natural gas, and water and sewer facilities. The economic impact on utility services totals $0.24 million. Maintenance and repair services include some building and construction activity on existing buildings. The regional center would create an economic impact of $25.48 million within these sectors in the region. Because most of the construction activity is either upfront during building construction or integrated into repair and maintenance services, the economic impact for construction sectors is minimal on an ongoing basis. New supplier/vendor relationships with manufacturers would create an economic impact of $4.67 million. These activities include purchases of locally manufactured goods plus purchased materials for construction, plus any locally produced materials used in food services. 8

2. METHODS & ASSUMPTIONS 2-1 ASSUMPTIONS For the project, WJ examined the economic effects of site development and operations. WJ systematically reviewed each set of assumptions used to properly customize the sector outputs that make up the set matrices. In the following assumptions, WJ applied specific sector data resulting in a very detailed, realistic and logical range of likely outcomes. The tables within this analysis show the expected spending as well as increases in employment and household earnings for ongoing operations. The definition of direct jobs through RIMS II used in this report should not be confused with the concept of direct job creation measurable by Forms I-9, payroll records or other similar documentation as set forth in 8 C.F.R. 204.6(j)(4)(i)(A). That section contemplates individually identifiable direct hire type jobs created which can individually identify the actual employees of the Job Creating Enterprise (JCE), most often in the non-regional center context. When economists use the term direct jobs in the context of an econometric methodology such as RIMS II, what is meant are jobs created directly by revenues (which in the EB-5 Immigrant Investor Program results from an immigrant investor s investment). For example, where a regional center-based new commercial enterprise comprised of immigrant investors renovates a building it purchases, the employees of the various unaffiliated tenants of that building would be considered direct jobs in the context of an econometric report. However, as noted in USCIS s stated EB-5 policy, those jobs are not direct in the sense set forth in 8 C.F.R. 204.6(j)(4)(i)(A) where the new commercial enterprise is itself the employer that can provide Form I-9 or other similar documentation on its own employees. The tenants employees are not direct employees of the regional center-based new commercial enterprise, nor may they be counted for other job creation credit calculations unless the tenant jobs were not pre-existent somewhere else, and merely were existing jobs transferred to the new tenant location from a prior location where they had existed. To be clear, this report does in fact also set forth the number of EB-5 direct jobs that are likely to be created by the JCE within its expanded production capacity as a result of the expansion project, and that by the point of filing to remove conditions by way of the form I-829 process, the JCE will be fully compliant with 8 C.F.R. 204.6(j)(4)(iii) in providing probative evidence for the proof of direct EB-5 job creation. In addition, and within the context of regulations which apply particularly to regional centers, for calculation of the resultant and newly induced and indirect job creation, is not Forms I-9, payroll records or similar documentation that will be the needed to meet the USCIS s preponderance of evidence standard, but rather reasonable methodologies such as used for this report. 9

2-2 SIMULATION INPUTS The data used includes an estimated construction timeline and development costs provided by the Developer. Information from the business plan for the proposed industry cluster was provided by the Developer and such information within the plan was evaluated and then incorporated into this analysis for area specific background and demographic purposes. Based on the data provided and corroborated, inputs were created for use in the RIMS II system to model the economic impact of the operation phase of the project. The relevant information and data used to develop the model inputs of the project was provided by the Developer. A summary of the project follows: Madison Park Financial Project Three separate apartment rental buildings (Hollis Mews, Gallot Lofts and Hannah Lofts) with a combined total of 212 units located in Oakland, California within the county of Alameda. The total investment into the project will be $85,674,698 and the EB-5 investment is projected to be $17.5 million. The remaining $68,174,698 will come from developer equity and a bank loan. Development Costs Madison Park Financial Project (Entire Project) Acquisition Costs Land $8,200,000 Other Acquisition Costs $140,000 Total Acquisition Costs $8,340,000 Hard Costs Hard Cost $58,482,251 General Contractor Fee $1,565,048 Hard Cost Contingency $1,800,000 Total Hard Costs $61,847,299 Soft Costs Financing $2,725,000 Architectural & Engineering $3,114,050 Permits, Fees, & Bonds $2,192,000 Utilities $3,208,000 Carry Costs $494,000 Project Management $950,000 Marketing & General $125,400 Development Fee $2,338,949 Soft Cost Contingency $340,000 Total Soft Costs $15,487,399 Total $85,674,698 10

Hollis Mews Project The Hollis Mews apartments will be located at 3250 Hollis Street, Oakland, California. It will have 124 residential and work/live units, along with 2,900 sq. ft. of retail space, with a net rentable sq. ft. of 129,291. The average unit size will be 1,043 sq. ft. The total investment into the project will be $51,438,905 and the EB-5 investment is projected to be $10.0 million. The remaining $41,438,905 will come from developer equity and a bank loan. Development Costs Hollis Mews Acquisition Costs Land $5,400,000 Other Acquisition Costs $80,000 Total Acquisition Costs $5,480,000 Hard Costs Hard Cost $35,597,857 General Contractor Fee $1,265,048 Hard Cost Contingency $800,000 Total Hard Costs $37,662,905 Soft Costs Financing $1,255,000 Architectural & Engineering $1,534,000 Permits, Fees, & Bonds $1,220,000 Utilities $1,988,000 Carry Costs $286,000 Project Management $390,000 Marketing & General $81,000 Development Fee $1,512,000 Soft Cost Contingency $30,000 Total Soft Costs $8,296,000 Total $51,438,905 Construction Construction will last approximately 15 months and the total hard construction costs for this project will be $37,662,905 (in current dollars). The current RIMS II multipliers are from 2013; therefore, we must deflate the expenditures to 2013 dollars. According to the Turner Construction Building Cost Index, the cost index in 2013 was 864, compared to the 2nd Quarter 2016 cost index of 983. 3 Therefore, the construction costs for this location will need to be further reduced to reflect 2013 dollars. 3. www.turnerconstruction.com/content/files/costindex2016qrtr2.pdf 11

Turner Construction Building Index Quarter Index % Change 2nd Quarter 2016 983 1.34 1st Quarter 2016 970 1.15 4th Quarter 2015 959 1.05 3rd Quarter 2015 949 1.17 Year Average Index % Change 2015 943 4.5 2014 902 4.4 2013 864 4.1 2012 830 2.1 2011 812 1.6 2010 799 4.0 2009 832 8.4 2008 908 6.3 2007 854 7.7 2006 793 10.6 2005 717 9.5 2004 655 5.4 2003 621 0.3 To convert this figure to 2013 dollars we use the 2nd Quarter 2016 cost index of 983 and divide it by the 2013 cost index of 864. This gives us a figure of 983/864 = 1.138. To convert the $37,662,905 in current dollars to 2013 dollars, the expenditure is divided by 1.138, to yield $33,095,699. Construction Expenditure Current Dollars vs. 2013 Dollars Current Dollars 2013 Dollars $37,662,905 $33,095,699 Construction employment was derived through expenditure modeling based upon detailed construction cost figures supplied by BRCF. Verification at the I-829 stage of the EB-5 process would be receipts, tax documents, and other expense records. 12

Architectural, Engineering and Related Services Per the developer, the total EB-5 eligible architectural and engineering services costs of this project will be $1,534,000 (in current dollars). To convert this figure to 2013 dollars we use the average 2016 Producer Price Index (PPI) for architectural, engineering and related services, which is 158.4 and divide it by the 2013 PPI of 149.9. This gives us a figure of 158.4/149.9 = 1.06. To convert the $1,534,000 in current dollars to 2013 dollars, the expenditure is divided by 1.06, to yield $1,447,170. Architectural, Engineering and Related Services Expenditure Current Dollars vs. 2013 Dollars Current Dollars 2013 Dollars $1,534,000 $1,447,170 Expenditure into the architectural and engineering industry that was used as input to the RIMS II model was taken from the business plan provided by BRCF. Verification at the I-829 stage of the EB-5 process would be verification of expenditure based upon receipts, tax documents, and other expense records. Leasing Operations The total annual revenue of the leasing of the Hollis Mews apartments will be $5,149,143 (in current dollars) by Year 3 of operations. 5 Year P&L Hollis Mews Year 1 Year 2 Year 3 Year 4 Year 5 Total Income $71,110 $4,531,768 $5,420,151 $5,575,425 $5,735,422 Vacancy $3,556 $226,588 $271,008 $278,771 $286,771 Gross Revenue $67,554 $4,305,180 $5,149,143 $5,296,654 $5,448,651 Operating Expenses $24,820 $1,581,760 $1,891,839 $1,946,036 $2,001,881 Net Operating Income $42,734 $2,723,420 $3,257,304 $3,350,618 $3,446,770 Sale Proceeds $67,803,506 Loan Payoff $38,137,002 Net Sale Proceeds $29,666,504 To convert this figure to 2013 dollars we use the average 2016 Consumer Price Index (CPI) for rent of primary residence, which is 293.897 and divide it by the 2013 CPI of 267.725. This gives us a figure of 293.897/267.725 = 1.10. To convert the $5,149,143 in current dollars to 2013 dollars, the revenue is divided by 1.10, to yield $4,681,039. Leasing Revenue Current Dollars vs. 2013 Dollars Current Dollars 2013 Dollars $5,149,143 $4,681,039 Revenue into the real estate industry that was used as input to the RIMS II model was taken from the business plan provided by BRCF. Verification at the I-829 stage of the EB-5 process would be tax returns and other financial statements. 13

Gallot Lofts Project The Gallot Lofts will be located at 3014 Chapman Street, Oakland, California. It will have 41 units, with a net rentable sq. ft. of 35,235. The average unit size will be 859 sq. ft. The total investment into the project will be $17,722,643 and the EB-5 investment is projected to be $4.0 million. The remaining $13,722,643 will come from developer equity and a bank loan. Construction Development Costs Gallot Lofts Acquisition Costs Land $1,800,000 Other Acquisition Costs $20,000 Total Acquisition Costs $1,820,000 Hard Costs Hard Cost $11,906,644 General Contractor Fee Hard Cost Contingency $500,000 Total Hard Costs $12,406,644 Soft Costs Financing $730,000 Architectural & Engineering $570,050 Permits, Fees, & Bonds $485,000 Utilities $675,000 Carry Costs $90,000 Project Management $250,000 Marketing & General $19,000 Development Fee $526,949 Soft Cost Contingency $150,000 Total Soft Costs $3,495,999 Total $17,722,643 Construction will last approximately 19 months and the total hard construction costs for this project will be $12,406,644 (in current dollars). The current RIMS II multipliers are from 2013; therefore, we must deflate the expenditures to 2013 dollars. According to the Turner Construction Building Cost Index, the cost index in 2013 was 864, compared to the 2nd Quarter 2016 cost index of 983. 4 Therefore, the construction costs for this location will need to be further reduced to reflect 2013 dollars. To convert this figure to 2013 dollars we use the 2nd Quarter 2016 cost index of 983 and divide it by the 2013 cost index of 864. This gives us a figure of 983/864 = 1.138. To convert the $12,406,644 in current dollars to 2013 dollars, the expenditure is divided by 1.138, to yield $10,902,148. 4. www.turnerconstruction.com/content/files/costindex2016qrtr2.pdf 14

Construction Expenditure Current Dollars vs. 2013 Dollars Current Dollars 2013 Dollars $12,406,644 $10,902,148 Construction employment was derived through expenditure modeling based upon detailed construction cost figures supplied by BRCF. Verification at the I-829 stage of the EB-5 process would be receipts, tax documents, and other expense records. Architectural, Engineering and Related Services Per the developer, the total EB-5 eligible architectural and engineering services costs of this project will be $570,050 (in current dollars). To convert this figure to 2013 dollars we use the average 2016 Producer Price Index (PPI) for architectural, engineering and related services, which is 158.4 and divide it by the 2013 PPI of 149.9. This gives us a figure of 158.4/149.9 = 1.06. To convert the $570,050 in current dollars to 2013 dollars, the expenditure is divided by 1.06, to yield $537,783. Architectural, Engineering and Related Services Expenditure Current Dollars vs. 2013 Dollars Current Dollars 2013 Dollars $570,050 $537,783 Expenditure into the architectural and engineering industry that was used as input to the RIMS II model was taken from the business plan provided by BRCF. Verification at the I-829 stage of the EB-5 process would be verification of expenditure based upon receipts, tax documents, and other expense records. Leasing Operations The total annual revenue of the leasing of the Gallot Lofts apartments will be $1,674,480 (in current dollars) by Year 3 of operations. 6 Year P&L Gallot Lofts Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Total Income $1,360,623 $1,762,611 $1,812,735 $1,864,385 $1,917,605 Vacancy $68,031 $88,131 $90,637 $93,219 $95,880 Gross Revenue $1,292,592 $1,674,480 $1,722,098 $1,771,166 $1,821,725 Operating Expenses $490,336 $635,202 $653,266 $671,879 $691,059 Net Operating Income $802,256 $1,039,278 $1,068,832 $1,099,287 $1,130,666 Sale Proceeds $22,794,811 Loan Payoff $13,018,789 Net Sale Proceeds $9,776,022 To convert this figure to 2013 dollars we use the average 2016 Consumer Price Index (CPI) for rent of primary residence, which is 293.897 and divide it by the 2013 CPI of 267.725. This gives us a figure of 15

293.897/267.725 = 1.10. To convert the $1,674,480 in current dollars to 2013 dollars, the revenue is divided by 1.10, to yield $1,522,255. Leasing Revenue Current Dollars vs. 2013 Dollars Current Dollars 2013 Dollars $1,674,480 $1,522,255 Revenue into the real estate industry that was used as input to the RIMS II model was taken from the business plan provided by BRCF. Verification at the I-829 stage of the EB-5 process would be tax returns and other financial statements. Hannah Lofts Project The Hannah Lofts will be located at 2868 Hannah, 1549 32nd Street, Oakland, California. It will have 47 units, with a net rentable sq. ft. of 46,680. The average unit size will be 993 sq. ft. The total investment into the project will be $16,513,150 and the EB-5 investment is projected to be $3.5 million. The remaining $13,013,150 will come from developer equity and a bank loan. Development Costs Hannah Lofts Acquisition Costs Land $1,000,000 Other Acquisition Costs $40,000 Total Acquisition Costs $1,040,000 Hard Costs Hard Cost $10,977,750 General Contractor Fee $300,000 Hard Cost Contingency $500,000 Total Hard Costs $11,777,750 Soft Costs Financing $740,000 Architectural & Engineering $1,010,000 Permits, Fees, & Bonds $487,000 Utilities $545,000 Carry Costs $118,000 Project Management $310,000 Marketing & General $25,400 Development Fee $300,000 Soft Cost Contingency $160,000 Total Soft Costs $3,695,400 Total $16,513,150 16

Construction Construction will last approximately 18 months and the total hard construction costs for this project will be $11,777,750 (in current dollars). The current RIMS II multipliers are from 2013; therefore, we must deflate the expenditures to 2013 dollars. According to the Turner Construction Building Cost Index, the cost index in 2013 was 864, compared to the 2nd Quarter 2016 cost index of 983. 5 Therefore, the construction costs for this location will need to be further reduced to reflect 2013 dollars. To convert this figure to 2013 dollars we use the 2nd Quarter 2016 cost index of 983 and divide it by the 2013 cost index of 864. This gives us a figure of 983/864 = 1.138. To convert the $11,777,750 in current dollars to 2013 dollars, the expenditure is divided by 1.138, to yield $10,349,517. Construction Expenditure Current Dollars vs. 2013 Dollars Current Dollars 2013 Dollars $11,777,750 $10,349,517 Construction employment was derived through expenditure modeling based upon detailed construction cost figures supplied by BRCF. Verification at the I-829 stage of the EB-5 process would be receipts, tax documents, and other expense records. Architectural, Engineering and Related Services Per the developer, the total EB-5 eligible architectural and engineering services costs of this project will be $1,010,000 (in current dollars). To convert this figure to 2013 dollars we use the average 2016 Producer Price Index (PPI) for architectural, engineering and related services, which is 158.4 and divide it by the 2013 PPI of 149.9. This gives us a figure of 158.4/149.9 = 1.06. To convert the $1,010,000 in current dollars to 2013 dollars, the expenditure is divided by 1.06, to yield $952,830. Architectural, Engineering and Related Services Expenditure Current Dollars vs. 2013 Dollars Current Dollars 2013 Dollars $1,010,000 $952,830 Expenditure into the architectural and engineering industry that was used as input to the RIMS II model was taken from the business plan provided by BRCF. Verification at the I-829 stage of the EB-5 process would be verification of expenditure based upon receipts, tax documents, and other expense records. 5. www.turnerconstruction.com/content/files/costindex2016qrtr2.pdf 17

Leasing Operations The total annual revenue of the leasing of the Hannah Lofts apartments will be $1,913,780 (in current dollars) by Year 3 of operations. 5 Year P&L Hannah Lofts Year 1 Year 2 Year 3 Year 4 Year 5 Total Income $278,619 $2,014,505 $2,102,138 $2,163,589 Vacancy $13,931 $100,725 $105,107 $108,179 Gross Revenue $264,688 $1,913,780 $1,997,031 $2,055,409 Operating Expenses $94,555 $683,661 $713,401 $734,255 Net Operating Income $170,133 $1,230,119 $1,283,630 $1,321,154 Sale Proceeds $24,229,508 Loan Payoff $15,288,782 Net Sale Proceeds $8,940,726 To convert this figure to 2013 dollars we use the average 2016 Consumer Price Index (CPI) for rent of primary residence, which is 293.897 and divide it by the 2013 CPI of 267.725. This gives us a figure of 293.897/267.725 = 1.10. To convert the $1,913,780 in current dollars to 2013 dollars, the revenue is divided by 1.10, to yield $1,739,800. Leasing Revenue Current Dollars vs. 2013 Dollars Current Dollars 2013 Dollars $1,913,780 $1,739,800 Revenue into the real estate industry that was used as input to the RIMS II model was taken from the business plan provided by BRCF. Verification at the I-829 stage of the EB-5 process would be tax returns and other financial statements. 18

2-3 RIMS II FINAL DEMAND AND EMPLOYMENT MULTIPLIERS Shown in the chart below are the actual RIMS II final demand and employment multipliers used in the project for this analysis specific for the counties within the regional center. RIMS II Final Demand and Employment Multipliers Industry 2334B0 Residential structures Output ($) Final Demand Multiplier Earnings ($) Employment (jobs) Value-added ($) Direct Effect Multiplier Earnings ($) Employment (jobs) 1.8501 0.5206 11.0495 0.9401 1.8870 2.1799 531000 Real Estate 1.5761 0.3218 10.2647 1.0506 2.1356 1.7282 541300 Architectural, Engineering, and Related Services 2.1197 0.7555 13.4802 1.1866 1.9123 2.6410 Region Definition: Alameda, CA; Contra Costa, CA; Marin, CA; Napa, CA; San Benito, CA; San Francisco, CA; San Joaquin, CA; San Mateo, CA; Santa Clara, CA; Santa Cruz, CA; Solano, CA; Sonoma, CA. Final Demand Output: Each entry in this column represents the total dollar change in output that occurs in all industries for each additional dollar of output delivered to final demand by the industry corresponding to the entry. Final Demand Earnings: Each entry in this column represents the total dollar change in earnings of households employed by all industries for each additional dollar of output delivered to final demand by the industry corresponding to the entry. Final Demand Employment: Each entry in this column represents the total change in number of jobs that occurs in all industries for each additional 1 million dollars of output delivered to final demand by the industry corresponding to the entry. Because the employment multipliers are based on 2013 data, the output delivered to final demand should be in 2013 dollars. Final Demand Value-added: Each entry in this column represents the total dollar change in value added that occurs in all industries for each additional dollar of output delivered to final demand by the industry corresponding to the entry. Direct Effect Earnings: Each entry in this column represents the total dollar change in earnings of households employed by all industries for each additional dollar of earnings paid directly to households employed by the industry corresponding to the entry. Direct Effect Employment: Each entry in this column represents the total change in number of jobs in all industries for each additional job in the industry corresponding to the entry. Note. Multipliers are based on the 2007 Benchmark Input-Output Table for the Nation and 2013 regional data. Source: Regional Input-Output Modeling Systems (RIMS II). Regional Product Division, Bureau of Economic Analysis. 2-4 CALCULATION OF EMPLOYMENT RESULTS USING FINAL DEMAND MULTIPLIER Hollis Mews Construction For NAICS code 2361 (Residential Construction), the final demand multiplier is 11.0495 and the employment multiplier is 2.1799. The final demand multiplier is used to determine the total number of jobs produced based on the expenditures for construction of the project, which is shown in Table 1-1 of this report. This figure is $33.096 million (in 2013 dollars). Therefore, if all the jobs were counted, there would be $33.096 11.0495, or 365.7 jobs. This figure includes direct and indirect jobs. Project construction is scheduled to take approximately 15 months; therefore, we can only count indirect jobs from the construction expenditure. The employment multiplier of 11.0495 must be reduced (or have the direct effects taken out) to reflect indirect impacts only. The final demand multiplier of 11.0495 is divided by the employment multiplier 2.1799 to yield 5.0689. This figure reflects the direct effects only; therefore, we then subtract 5.0689 from 11.0495, which gives us the indirect final demand multiplier of 5.9806. 19

The indirect multiplier of 5.9806 is then multiplied by the expenditure of $33.096 to produce a total number of indirect jobs of 197.9. This is the figure shown in Table 1-1. Architectural, Engineering and Related Services For NAICS code 5413 (Architectural, Engineering and Related Services), the final demand multiplier is 13.4802 and the employment multiplier is 2.6410. The final demand multiplier is used to determine the total number of jobs produced based on the architectural and engineering services for the project, which is shown in Table 1-1 of this report. This figure is $1.447 million (in 2013 dollars). Therefore, if all the jobs were counted, there would be $1.447 13.4802, or 19.5 jobs. This figure includes direct and indirect jobs. Architectural and engineering services will last less than two years; therefore, we can only count indirect jobs from the expenditure. The employment multiplier of 13.4802 must be reduced (or have the direct effects taken out) to reflect indirect impacts only. The final demand multiplier of 13.4802 is divided by the employment multiplier 2.6410 to yield 5.1042. This figure reflects the direct effects only; therefore, we then subtract 5.1042 from 13.4802, which gives us the indirect final demand multiplier of 8.3760. The indirect multiplier of 8.3760 is then multiplied by the expenditure of $1.447 to produce a total number of indirect jobs of 12.1. This is the figure shown in Table 1-1. Leasing Operations For NAICS code 5311 (Leasing Operations), the final demand multiplier is 10.2647 and the employment multiplier is 1.7282. The final demand multiplier is used to determine the total number of jobs produced based on the revenue for NAICS code 5311, which is shown in Table 1-1 of this report. This figure is $4.681 million (in 2013 dollars). Therefore if all the jobs were counted, there would be $4.681 times 10.2647, or 48.0 jobs. This figure includes direct and indirect jobs. The employment multiplier is 1.7282, which means that for every 1 direct job, there are 1.7282 total jobs. Hence for every 1 direct job, there are 0.7282 indirect jobs. If there are a total of 48.0 jobs if all categories are counted, then based on this multiplier there are 27.8 direct jobs and 20.2 indirect jobs. This is the figure shown in Table 1-1. Gallot Lofts Construction For NAICS code 2361 (Residential Construction), the final demand multiplier is 11.0495 and the employment multiplier is 2.1799. The final demand multiplier is used to determine the total number of jobs produced based on the expenditures for construction of the project, which is shown in Table 1-2 of this report. This figure is $10.902 million (in 2013 dollars). Therefore, if all the jobs were counted, there would be $10.902 11.0495, or 120.5 jobs. This figure includes direct and indirect jobs. Project construction is scheduled to take approximately 19 months; therefore, we can only count indirect jobs from the construction expenditure. The employment multiplier of 11.0495 must be reduced (or have the direct effects taken out) to reflect indirect impacts only. The final demand multiplier of 11.0495 is divided by the employment multiplier 2.1799 to yield 5.0689. This figure reflects the direct effects only; therefore, we then subtract 5.0689 from 11.0495, which gives us the indirect final demand multiplier of 5.9806. 20

The indirect multiplier of 5.9806 is then multiplied by the expenditure of $10.902 to produce a total number of indirect jobs of 65.2. This is the figure shown in Table 1-2. Architectural, Engineering and Related Services For NAICS code 5413 (Architectural, Engineering and Related Services), the final demand multiplier is 13.4802 and the employment multiplier is 2.6410. The final demand multiplier is used to determine the total number of jobs produced based on the architectural and engineering services for the project, which is shown in Table 1-2 of this report. This figure is $0.538 million (in 2013 dollars). Therefore, if all the jobs were counted, there would be $0.538 13.4802, or 7.3 jobs. This figure includes direct and indirect jobs. Architectural and engineering services will last less than two years; therefore we can only count indirect jobs from the expenditure. The employment multiplier of 13.4802 must be reduced (or have the direct effects taken out) to reflect indirect impacts only. The final demand multiplier of 13.4802 is divided by the employment multiplier 2.6410 to yield 5.1042. This figure reflects the direct effects only; therefore, we then subtract 5.1042 from 13.4802, which gives us the indirect final demand multiplier of 8.3760. The indirect multiplier of 8.3760 is then multiplied by the expenditure of $0.538 to produce a total number of indirect jobs of 4.5. This is the figure shown in Table 1-2. Leasing Operations For NAICS code 5311 (Leasing Operations), the final demand multiplier is 10.2647 and the employment multiplier is 1.7282. The final demand multiplier is used to determine the total number of jobs produced based on the revenue for NAICS code 5311, which is shown in Table 1-2 of this report. This figure is $1.522 million (in 2013 dollars). Therefore if all the jobs were counted, there would be $1.522 times 10.2647, or 15.6 jobs. This figure includes direct and indirect jobs. The employment multiplier is 1.7282, which means that for every 1 direct job, there are 1.7282 total jobs. Hence for every 1 direct job, there are 0.7282 indirect jobs. If there are a total of 15.6 jobs if all categories are counted, then based on this multiplier there are 9.0 direct jobs and 6.6 indirect jobs. This is the figure shown in Table 1-2. Hannah Lofts Construction For NAICS code 2361 (Residential Construction), the final demand multiplier is 11.0495 and the employment multiplier is 2.1799. The final demand multiplier is used to determine the total number of jobs produced based on the expenditures for construction of the project, which is shown in Table 1-3 of this report. This figure is $10.350 million (in 2013 dollars). Therefore, if all the jobs were counted, there would be $10.350 11.0495, or 114.4 jobs. This figure includes direct and indirect jobs. Project construction is scheduled to take approximately 18 months; therefore, we can only count indirect jobs from the construction expenditure. The employment multiplier of 11.0495 must be reduced (or have the direct effects taken out) to reflect indirect impacts only. The final demand multiplier of 11.0495 is divided by the employment multiplier 2.1799 to yield 5.0689. This figure reflects the direct effects only; therefore, we then subtract 5.0689 from 11.0495, which gives us the indirect final demand multiplier of 5.9806. 21

The indirect multiplier of 5.9806 is then multiplied by the expenditure of $10.350 to produce a total number of indirect jobs of 61.9. This is the figure shown in Table 1-3. Architectural, Engineering and Related Services For NAICS code 5413 (Architectural, Engineering and Related Services), the final demand multiplier is 13.4802 and the employment multiplier is 2.6410. The final demand multiplier is used to determine the total number of jobs produced based on the architectural and engineering services for the project, which is shown in Table 1-3 of this report. This figure is $0.953 million (in 2013 dollars). Therefore, if all the jobs were counted, there would be $0.953 13.4802, or 12.8 jobs. This figure includes direct and indirect jobs. Architectural and engineering services will last less than two years; therefore, we can only count indirect jobs from the expenditure. The employment multiplier of 13.4802 must be reduced (or have the direct effects taken out) to reflect indirect impacts only. The final demand multiplier of 13.4802 is divided by the employment multiplier 2.6410 to yield 5.1042. This figure reflects the direct effects only; therefore, we then subtract 5.1042 from 13.4802, which gives us the indirect final demand multiplier of 8.3760. The indirect multiplier of 8.3760 is then multiplied by the expenditure of $0.953 to produce a total number of indirect jobs of 8.0. This is the figure shown in Table 1-3. Leasing Operations For NAICS code 5311 (Leasing Operations), the final demand multiplier is 10.2647 and the employment multiplier is 1.7282. The final demand multiplier is used to determine the total number of jobs produced based on the revenue for NAICS code 5311, which is shown in Table 1-3 of this report. This figure is $1.740 million (in 2013 dollars). Therefore if all the jobs were counted, there would be $1.740 times 10.2647, or 17.9 jobs. This figure includes direct and indirect jobs. The employment multiplier is 1.7282, which means that for every 1 direct job, there are 1.7282 total jobs. Hence for every 1 direct job, there are 0.7282 indirect jobs. If there are a total of 17.9 jobs if all categories are counted, then based on this multiplier there are 10.4 direct jobs and 7.5 indirect jobs. This is the figure shown in Table 1-3. 22

2-5 GUIDELINES AND METHODOLOGY FOR CONSTRUCTION EMPLOYMENT CREATION USCIS guidelines state that direct construction jobs lasting less than two years should not be counted for the purpose of determining EB-5 job count. However, the indirect jobs can be counted. The method used to determine indirect employment creation is capital expenditure to determine direct and indirect job creation and then to subtract the direct jobs. Each project will include less than two years of construction. Therefore, direct construction jobs will not be included in the total census. Also, the number of construction jobs must be based upon the capital expended on the hard costs of construction and the EB-5 eligible cost of architectural and engineering services. Soft costs, such as other fees and permitting, are not included. These jobs are calculated as indirect effects within the RIMS II model and to use these costs would be double counting. For this analysis the developer has provided WJ with final estimates of all expenditures of the projects. Of the $85,674,698 in total capital expenditure, $61,847,299 will be spent on hard costs for the development and $1,534,000 for EB-5 eligible soft costs (all in current dollars) for the three locations. The economic impact calculations in this report are based on the RIMS II final demand multipliers. The numbers in the following tables are calculated by multiplying expenditures or revenue by the RIMS II multipliers for the region, for example: the hard construction costs by the RIMS II construction multipliers. 23

2-6 ECONOMIC IMPACTS OF THE HOLLIS MEWS PROJECT Construction The hard construction costs are expected to be $33.096 million (2013 dollars). The RIMS II final demand multiplier (indirect impacts only) for residential construction is 5.9806. When multiplied by $33.096 million (2013 dollars) that creates 197.9 new jobs. Table 2-1 and 2-2 show the economic impact of the construction expenditures for the 20 major industrial classifications in the RIMS II input/output model. Please note that in these and succeeding tables, output and earnings are given in thousands of dollars. Table 2-1. Increase in Employment, Output, and Earnings for $33.096 Million (2013 Dollars) Construction Expenditures, Indirect Jobs Only Industry group Employment Output Earnings Agriculture, forestry, fishing 0.3 44 17 Mining 0.4 82 17 Utilities 0.2 102 18 Construction 91.5 15,307 5,106 Durable Goods Manufacturing 7.2 1,486 375 Non Durable Goods Manufacturing 2.7 1,089 206 Wholesale trade 4.3 814 301 Retail trade 29.3 2,070 851 Transportation and warehousing 3.1 435 151 Information 1.8 557 136 Finance and insurance 4.6 880 301 Real estate and rental and leasing 11.7 1,743 331 Professional, scientific, services 7.6 1,043 542 Management of companies 1.2 260 127 Administrative and waste management 6.4 394 202 Educational services 2.2 126 70 Health care and social assistance 8.7 751 402 Arts, entertainment, and recreation 2.2 134 55 Accommodation 1.2 113 39 Food services and drinking places 5.7 286 114 Other services 4.8 418 191 Households 1.0 0 13 Total 197.9 28,132 9,563 Table 2-1 shows that there will be a total of 197.9 new jobs created from the construction of the project. Total output will increase by $28.13 million, while total household earnings would increase by $9.56 million. 24

Table 2-2. Output and Earnings Per New Worker for $33.096 Million (2013 Dollars) Construction Expenditures, Indirect Jobs Only Industry group Employment Output/Employee Earnings/Employee Agriculture, forestry, fishing 0.3 134.5 50.4 Mining 0.4 233.9 47.1 Utilities 0.2 605.0 109.1 Construction 91.5 167.3 55.8 Durable Goods Manufacturing 7.2 204.9 51.7 Non Durable Goods Manufacturing 2.7 204.9 51.7 Wholesale trade 4.3 408.2 77.1 Retail trade 29.3 70.8 29.1 Transportation and warehousing 3.1 139.0 48.1 Information 1.8 303.7 74.2 Finance and insurance 4.6 189.8 64.9 Real estate and rental and leasing 11.7 149.5 28.4 Professional, scientific, services 7.6 137.0 71.2 Management of companies 1.2 218.6 106.6 Administrative and waste management 6.4 61.9 31.8 Educational services 2.2 58.1 32.1 Health care and social assistance 8.7 85.9 46.0 Arts, entertainment, and recreation 2.2 61.1 25.2 Accommodation 1.2 97.5 33.4 Food services and drinking places 5.7 50.0 19.9 Other services 4.8 87.1 39.8 Households 1.0 0.0 12.9 Total 197.9 142.1 48.3 Table 2-2 shows that output per new worker for the construction sector would be about $167,300, with average annual earnings of $55,800. For all new workers, the corresponding figures are $142,100 and $48,300. 25

Architectural, Engineering and Related Services The architectural and engineering services costs are expected to be $1.447 million (2013 dollars). The RIMS II final demand (indirect impacts only) multiplier for architectural and engineering services is 8.3760. When multiplied by $1.447 million (2013 dollars), that creates 12.1 new jobs. Table 2-3 and 2-4 show the economic impact of the architectural and engineering expenditures for the 20 major industrial classifications in the RIMS II input/output model. Please note that in these and succeeding tables, output and earnings are given in thousands of dollars. Table 2-3. Increase in Employment, Output, and Earnings for $1.447 Million (2013 Dollars) Architectural and Engineering Services, Indirect Jobs Only Industry group Employment Output Earnings Agriculture, forestry, fishing 0.0 2 1 Mining 0.0 1 0 Utilities 0.0 5 1 Construction 0.1 8 2 Durable Goods Manufacturing 0.1 24 5 Non Durable Goods Manufacturing 0.1 46 7 Wholesale trade 0.2 29 8 Retail trade 0.7 48 16 Transportation and warehousing 0.2 26 7 Information 0.2 47 9 Finance and insurance 0.4 72 18 Real estate and rental and leasing 0.9 136 19 Professional, scientific, services 6.0 915 342 Management of companies 0.1 21 8 Administrative and waste management 1.0 57 26 Educational services 0.2 9 4 Health care and social assistance 0.6 53 22 Arts, entertainment, and recreation 0.2 11 3 Accommodation 0.1 11 3 Food services and drinking places 0.6 30 9 Other services 0.4 29 10 Households 0.1 0 1 Total 12.1 1,582 522 Table 2-3 shows that there will be a total of 12.1 new jobs created from the architectural and engineering services related to the project. Total output will rise about $1.58 million, while total household earnings would increase by about $0.52 million. 26

Table 2-4. Output and Earnings Per New Worker for $1.447 Million (2013 Dollars) Architectural and Engineering Services, Indirect Jobs Only Industry group Employment Output/Employee Earnings/Employee Agriculture, forestry, fishing 0.0 129.8 36.4 Mining 0.0 361.7 59.1 Utilities 0.0 593.9 82.8 Construction 0.1 145.7 41.0 Durable Goods Manufacturing 0.1 226.8 44.2 Non Durable Goods Manufacturing 0.1 226.8 44.2 Wholesale trade 0.2 327.5 50.3 Retail trade 0.7 69.1 22.3 Transportation and warehousing 0.2 128.3 35.5 Information 0.2 295.5 56.4 Finance and insurance 0.4 196.4 49.2 Real estate and rental and leasing 0.9 146.0 20.9 Professional, scientific, services 6.0 152.3 57.0 Management of companies 0.1 213.6 80.3 Administrative and waste management 1.0 54.7 24.9 Educational services 0.2 57.2 24.5 Health care and social assistance 0.6 83.9 34.4 Arts, entertainment, and recreation 0.2 59.8 18.8 Accommodation 0.1 95.1 24.8 Food services and drinking places 0.6 48.7 15.2 Other services 0.4 83.9 29.7 Households 0.1 0.0 9.5 Total 12.1 130.5 43.0 Table 2-4 shows that output per new worker for the professional and scientific services sector would be about $152,300, with average annual earnings of about $57,000. For all new workers, the corresponding figures are $130,500 and $43,000. 27

Leasing Operations The leasing revenue is expected to be $4.681 million (2013 dollars) by the third year of operation. The RIMS II final demand multiplier for real estate is 10.2647. When multiplied by $4.681 million (2013 dollars), that creates 48.0 new jobs. Table 2-5 and 2-6 show the economic impact of the operations for the 20 major industrial classifications in the RIMS II input/output model. Please note that in these and succeeding tables, output and earnings are given in thousands of dollars. Table 2-5. Increase in Employment, Output, and Earnings for Leasing Operations Industry group Employment Output Earnings Agriculture, forestry, fishing 0.0 7 2 Mining 0.0 5 1 Utilities 0.1 39 6 Construction 1.1 195 60 Durable Goods Manufacturing 0.2 55 12 Non Durable Goods Manufacturing 0.3 125 20 Wholesale trade 0.3 75 23 Retail trade 1.9 156 54 Transportation and warehousing 0.4 57 16 Information 0.4 137 27 Finance and insurance 1.4 340 96 Real estate and rental and leasing 31.1 5254 793 Professional, scientific, services 1.3 200 89 Management of companies 0.2 50 20 Administrative and waste management 4.8 308 139 Educational services 0.3 24 11 Health care and social assistance 1.4 141 63 Arts, entertainment, and recreation 0.4 28 9 Accommodation 0.2 26 7 Food services and drinking places 1.2 71 24 Other services 0.8 86 32 Households 0.2 0 2 Total 48.0 7,378 1,506 Table 2-5 shows that there will be a total of 48.0 new jobs created from the leasing of the apartments. Total output will increase by $7.38 million, while total household earnings would increase by $1.51 million. 28

Table 2-6. Output and Earnings Per New Worker for Leasing Operations Industry group Employment Output/Employee Earnings/Employee Agriculture, forestry, fishing 0.0 161.3 43.0 Mining 0.0 416.7 83.3 Utilities 0.1 741.1 107.1 Construction 1.1 174.8 53.7 Durable Goods Manufacturing 0.2 235.9 52.4 Non Durable Goods Manufacturing 0.3 235.9 52.4 Wholesale trade 0.3 438.4 70.6 Retail trade 1.9 83.5 29.0 Transportation and warehousing 0.4 159.7 45.8 Information 0.4 372.8 72.5 Finance and insurance 1.4 241.7 68.6 Real estate and rental and leasing 31.1 168.7 25.5 Professional, scientific, services 1.3 157.6 70.1 Management of companies 0.2 257.9 104.6 Administrative and waste management 4.8 63.6 28.6 Educational services 0.3 69.1 31.2 Health care and social assistance 1.4 101.1 45.0 Arts, entertainment, and recreation 0.4 73.4 24.9 Accommodation 0.2 115.1 31.4 Food services and drinking places 1.2 58.5 19.6 Other services 0.8 107.5 39.9 Households 0.2 0.0 11.7 Total 48.0 153.5 31.3 Table 2-6 shows that output per new worker for the real estate sector would be about $168,700, with average annual earnings of $25,500. For all new workers, the corresponding figures are $153,500 and $31,300. 29

2-7 ECONOMIC IMPACTS OF THE GALLOT LOFTS PROJECT Construction The hard construction costs are expected to be $10.902 million (2013 dollars). The RIMS II final demand multiplier (indirect impacts only) for residential construction is 5.9806. When multiplied by $10.902 million (2013 dollars) that creates 65.2 new jobs. Table 2-7 and 2-8 show the economic impact of the construction expenditures for the 20 major industrial classifications in the RIMS II input/output model. Please note that in these and succeeding tables, output and earnings are given in thousands of dollars. Table 2-7. Increase in Employment, Output, and Earnings for $10.902 Million (2013 Dollars) Construction Expenditures, Indirect Jobs Only Industry group Employment Output Earnings Agriculture, forestry, fishing 0.1 15 5 Mining 0.1 27 5 Utilities 0.1 34 6 Construction 30.1 5,042 1,682 Durable Goods Manufacturing 2.4 489 123 Non Durable Goods Manufacturing 0.9 359 68 Wholesale trade 1.4 268 99 Retail trade 9.6 682 280 Transportation and warehousing 1.0 143 50 Information 0.6 183 45 Finance and insurance 1.5 290 99 Real estate and rental and leasing 3.8 574 109 Professional, scientific, services 2.5 344 179 Management of companies 0.4 86 42 Administrative and waste management 2.1 130 67 Educational services 0.7 42 23 Health care and social assistance 2.9 247 133 Arts, entertainment, and recreation 0.7 44 18 Accommodation 0.4 37 13 Food services and drinking places 1.9 94 38 Other services 1.6 138 63 Households 0.3 0 4 Total 65.2 9,267 3,150 Table 2-7 shows that there will be a total of 65.2 new jobs created from the construction of the project. Total output will increase by $9.27 million, while total household earnings would increase by $3.15 million. 30

Table 2-8. Output and Earnings Per New Worker for $10.902 Million (2013 Dollars) Construction Expenditures, Indirect Jobs Only Industry group Employment Output/Employee Earnings/Employee Agriculture, forestry, fishing 0.1 134.5 50.4 Mining 0.1 233.9 47.1 Utilities 0.1 605.0 109.1 Construction 30.1 167.3 55.8 Durable Goods Manufacturing 2.4 204.9 51.7 Non Durable Goods Manufacturing 0.9 204.9 51.7 Wholesale trade 1.4 408.2 77.1 Retail trade 9.6 70.8 29.1 Transportation and warehousing 1.0 139.0 48.1 Information 0.6 303.7 74.2 Finance and insurance 1.5 189.8 64.9 Real estate and rental and leasing 3.8 149.5 28.4 Professional, scientific, services 2.5 137.0 71.2 Management of companies 0.4 218.6 106.6 Administrative and waste management 2.1 61.9 31.8 Educational services 0.7 58.1 32.1 Health care and social assistance 2.9 85.9 46.0 Arts, entertainment, and recreation 0.7 61.1 25.2 Accommodation 0.4 97.5 33.4 Food services and drinking places 1.9 50.0 19.9 Other services 1.6 87.1 39.8 Households 0.3 0.0 12.9 Total 65.2 142.1 48.3 Table 2-8 shows that output per new worker for the construction sector would be about $167,300, with average annual earnings of $55,800. For all new workers, the corresponding figures are $142,100 and $48,300. 31

Architectural, Engineering and Related Services The architectural and engineering services costs are expected to be $0.538 million (2013 dollars). The RIMS II final demand (indirect impacts only) multiplier for architectural and engineering services is 8.3760. When multiplied by $0.538 million (2013 dollars), that creates 4.5 new jobs. Table 2-9 and 2-10 show the economic impact of the architectural and engineering expenditures for the 20 major industrial classifications in the RIMS II input/output model. Please note that in these and succeeding tables, output and earnings are given in thousands of dollars. Table 2-9. Increase in Employment, Output, and Earnings for $0.538 Million (2013 Dollars) Architectural and Engineering Services, Indirect Jobs Only Industry group Employment Output Earnings Agriculture, forestry, fishing 0.0 1 0 Mining 0.0 0 0 Utilities 0.0 2 0 Construction 0.0 3 1 Durable Goods Manufacturing 0.0 9 2 Non Durable Goods Manufacturing 0.1 17 3 Wholesale trade 0.1 11 3 Retail trade 0.3 18 6 Transportation and warehousing 0.1 10 3 Information 0.1 17 3 Finance and insurance 0.1 27 7 Real estate and rental and leasing 0.3 51 7 Professional, scientific, services 2.2 340 127 Management of companies 0.0 8 3 Administrative and waste management 0.4 21 10 Educational services 0.1 3 1 Health care and social assistance 0.2 20 8 Arts, entertainment, and recreation 0.1 4 1 Accommodation 0.0 4 1 Food services and drinking places 0.2 11 4 Other services 0.1 11 4 Households 0.0 0 0 Total 4.5 588 194 Table 2-9 shows that there will be a total of 4.5 new jobs created from the architectural and engineering services related to the project. Total output will rise about $0.59 million, while total household earnings would increase by about $0.19 million. 32

Table 2-10. Output and Earnings Per New Worker for $0.538 Million (2013 Dollars) Architectural and Engineering Services, Indirect Jobs Only Industry group Employment Output/Employee Earnings/Employee Agriculture, forestry, fishing 0.0 129.8 36.4 Mining 0.0 361.7 59.1 Utilities 0.0 593.9 82.8 Construction 0.0 145.7 41.0 Durable Goods Manufacturing 0.0 226.8 44.2 Non Durable Goods Manufacturing 0.1 226.8 44.2 Wholesale trade 0.1 327.5 50.3 Retail trade 0.3 69.1 22.3 Transportation and warehousing 0.1 128.3 35.5 Information 0.1 295.5 56.4 Finance and insurance 0.1 196.4 49.2 Real estate and rental and leasing 0.3 146.0 20.9 Professional, scientific, services 2.2 152.3 57.0 Management of companies 0.0 213.6 80.3 Administrative and waste management 0.4 54.7 24.9 Educational services 0.1 57.2 24.5 Health care and social assistance 0.2 83.9 34.4 Arts, entertainment, and recreation 0.1 59.8 18.8 Accommodation 0.0 95.1 24.8 Food services and drinking places 0.2 48.7 15.2 Other services 0.1 83.9 29.7 Households 0.0 0.0 9.5 Total 4.5 130.5 43.0 Table 2-10 shows that output per new worker for the professional and scientific services sector would be about $152,300, with average annual earnings of about $57,000. For all new workers, the corresponding figures are $130,500 and $43,000. 33

Leasing Operations The leasing revenue is expected to be $1.522 million (2013 dollars) by the third year of operation. The RIMS II final demand multiplier for real estate is 10.2647. When multiplied by $1.522 million (2013 dollars), that creates 15.6 new jobs. Table 2-11 and 2-12 show the economic impact of the operations for the 20 major industrial classifications in the RIMS II input/output model. Please note that in these and succeeding tables, output and earnings are given in thousands of dollars. Table 2-11. Increase in Employment, Output, and Earnings for Leasing Operations Industry group Employment Output Earnings Agriculture, forestry, fishing 0.0 2 1 Mining 0.0 2 0 Utilities 0.0 13 2 Construction 0.4 63 19 Durable Goods Manufacturing 0.1 18 4 Non Durable Goods Manufacturing 0.1 41 7 Wholesale trade 0.1 24 7 Retail trade 0.6 51 18 Transportation and warehousing 0.1 19 5 Information 0.1 45 9 Finance and insurance 0.5 110 31 Real estate and rental and leasing 10.1 1708 258 Professional, scientific, services 0.4 65 29 Management of companies 0.1 16 7 Administrative and waste management 1.6 100 45 Educational services 0.1 8 4 Health care and social assistance 0.5 46 20 Arts, entertainment, and recreation 0.1 9 3 Accommodation 0.1 8 2 Food services and drinking places 0.4 23 8 Other services 0.3 28 10 Households 0.1 0 1 Total 15.6 2,399 490 Table 2-11 shows that there will be a total of 15.6 new jobs created from the leasing of the apartments. Total output will increase by $2.40 million, while total household earnings would increase by $0.49 million. 34

Table 2-12. Output and Earnings Per New Worker for Leasing Operations Industry group Employment Output/Employee Earnings/Employee Agriculture, forestry, fishing 0.0 161.3 43.0 Mining 0.0 416.7 83.3 Utilities 0.0 741.1 107.1 Construction 0.4 174.8 53.7 Durable Goods Manufacturing 0.1 235.9 52.4 Non Durable Goods Manufacturing 0.1 235.9 52.4 Wholesale trade 0.1 438.4 70.6 Retail trade 0.6 83.5 29.0 Transportation and warehousing 0.1 159.7 45.8 Information 0.1 372.8 72.5 Finance and insurance 0.5 241.7 68.6 Real estate and rental and leasing 10.1 168.7 25.5 Professional, scientific, services 0.4 157.6 70.1 Management of companies 0.1 257.9 104.6 Administrative and waste management 1.6 63.6 28.6 Educational services 0.1 69.1 31.2 Health care and social assistance 0.5 101.1 45.0 Arts, entertainment, and recreation 0.1 73.4 24.9 Accommodation 0.1 115.1 31.4 Food services and drinking places 0.4 58.5 19.6 Other services 0.3 107.5 39.9 Households 0.1 0.0 11.7 Total 15.6 153.5 31.3 Table 2-12 shows that output per new worker for the real estate sector would be about $168,700, with average annual earnings of $25,500. For all new workers, the corresponding figures are $153,500 and $31,300. 35

2-8 ECONOMIC IMPACTS OF THE HANNAH LOFTS PROJECT Construction The hard construction costs are expected to be $10.350 million (2013 dollars). The RIMS II final demand multiplier (indirect impacts only) for residential construction is 5.9806. When multiplied by $10.350 million (2013 dollars) that creates 61.9 new jobs. Table 2-13 and 2-14 show the economic impact of the construction expenditures for the 20 major industrial classifications in the RIMS II input/output model. Please note that in these and succeeding tables, output and earnings are given in thousands of dollars. Table 2-13. Increase in Employment, Output, and Earnings for $10.35 Million (2013 Dollars) Construction Expenditures, Indirect Jobs Only Industry group Employment Output Earnings Agriculture, forestry, fishing 0.1 14 5 Mining 0.1 26 5 Utilities 0.1 32 6 Construction 28.6 4,787 1,597 Durable Goods Manufacturing 2.3 465 117 Non Durable Goods Manufacturing 0.8 340 64 Wholesale trade 1.3 254 94 Retail trade 9.1 647 266 Transportation and warehousing 1.0 136 47 Information 0.6 174 43 Finance and insurance 1.5 275 94 Real estate and rental and leasing 3.6 545 103 Professional, scientific, services 2.4 326 169 Management of companies 0.4 81 40 Administrative and waste management 2.0 123 63 Educational services 0.7 39 22 Health care and social assistance 2.7 235 126 Arts, entertainment, and recreation 0.7 42 17 Accommodation 0.4 35 12 Food services and drinking places 1.8 89 36 Other services 1.5 131 60 Households 0.3 0 4 Total 61.9 8,798 2,991 Table 2-13 shows that there will be a total of 61.9 new jobs created from the construction of the project. Total output will increase by $8.80 million, while total household earnings would increase by $2.99 million. 36

Table 2-14. Output and Earnings Per New Worker for $10.35 Million (2013 Dollars) Construction Expenditures, Indirect Jobs Only Industry group Employment Output/Employee Earnings/Employee Agriculture, forestry, fishing 0.1 134.5 50.4 Mining 0.1 233.9 47.1 Utilities 0.1 605.0 109.1 Construction 28.6 167.3 55.8 Durable Goods Manufacturing 2.3 204.9 51.7 Non Durable Goods Manufacturing 0.8 204.9 51.7 Wholesale trade 1.3 408.2 77.1 Retail trade 9.1 70.8 29.1 Transportation and warehousing 1.0 139.0 48.1 Information 0.6 303.7 74.2 Finance and insurance 1.5 189.8 64.9 Real estate and rental and leasing 3.6 149.5 28.4 Professional, scientific, services 2.4 137.0 71.2 Management of companies 0.4 218.6 106.6 Administrative and waste management 2.0 61.9 31.8 Educational services 0.7 58.1 32.1 Health care and social assistance 2.7 85.9 46.0 Arts, entertainment, and recreation 0.7 61.1 25.2 Accommodation 0.4 97.5 33.4 Food services and drinking places 1.8 50.0 19.9 Other services 1.5 87.1 39.8 Households 0.3 0.0 12.9 Total 61.9 142.1 48.3 Table 2-14 shows that output per new worker for the construction sector would be about $167,300, with average annual earnings of $55,800. For all new workers, the corresponding figures are $142,100 and $48,300. 37

Architectural, Engineering and Related Services The architectural and engineering services costs are expected to be $0.953 million (2013 dollars). The RIMS II final demand (indirect impacts only) multiplier for architectural and engineering services is 8.3760. When multiplied by $0.953 million (2013 dollars), that creates 8.0 new jobs. Table 2-15 and 2-16 show the economic impact of the architectural and engineering expenditures for the 20 major industrial classifications in the RIMS II input/output model. Please note that in these and succeeding tables, output and earnings are given in thousands of dollars. Table 2-15. Increase in Employment, Output, and Earnings for $0.953 Million (2013 Dollars) Architectural and Engineering Services, Indirect Jobs Only Industry group Employment Output Earnings Agriculture, forestry, fishing 0.0 2 0 Mining 0.0 1 0 Utilities 0.0 4 1 Construction 0.0 5 1 Durable Goods Manufacturing 0.1 16 3 Non Durable Goods Manufacturing 0.1 30 5 Wholesale trade 0.1 19 5 Retail trade 0.5 32 10 Transportation and warehousing 0.1 17 5 Information 0.1 31 6 Finance and insurance 0.2 48 12 Real estate and rental and leasing 0.6 90 13 Professional, scientific, services 4.0 603 225 Management of companies 0.1 14 5 Administrative and waste management 0.7 38 17 Educational services 0.1 6 3 Health care and social assistance 0.4 35 14 Arts, entertainment, and recreation 0.1 7 2 Accommodation 0.1 7 2 Food services and drinking places 0.4 20 6 Other services 0.2 19 7 Households 0.0 0 0 Total 8.0 1,042 344 Table 2-15 shows that there will be a total of 8.0 new jobs created from the architectural and engineering services related to the project. Total output will rise about $1.04 million, while total household earnings would increase by about $0.34 million. 38

Table 2-16. Output and Earnings Per New Worker for $0.953 Million (2013 Dollars) Architectural and Engineering Services, Indirect Jobs Only Industry group Employment Output/Employee Earnings/Employee Agriculture, forestry, fishing 0.0 129.8 36.4 Mining 0.0 361.7 59.1 Utilities 0.0 593.9 82.8 Construction 0.0 145.7 41.0 Durable Goods Manufacturing 0.1 226.8 44.2 Non Durable Goods Manufacturing 0.1 226.8 44.2 Wholesale trade 0.1 327.5 50.3 Retail trade 0.5 69.1 22.3 Transportation and warehousing 0.1 128.3 35.5 Information 0.1 295.5 56.4 Finance and insurance 0.2 196.4 49.2 Real estate and rental and leasing 0.6 146.0 20.9 Professional, scientific, services 4.0 152.3 57.0 Management of companies 0.1 213.6 80.3 Administrative and waste management 0.7 54.7 24.9 Educational services 0.1 57.2 24.5 Health care and social assistance 0.4 83.9 34.4 Arts, entertainment, and recreation 0.1 59.8 18.8 Accommodation 0.1 95.1 24.8 Food services and drinking places 0.4 48.7 15.2 Other services 0.2 83.9 29.7 Households 0.0 0.0 9.5 Total 8.0 130.5 43.0 Table 2-16 shows that output per new worker for the professional and scientific services sector would be about $152,300, with average annual earnings of about $57,000. For all new workers, the corresponding figures are $130,500 and $43,000. 39

Leasing Operations The leasing revenue is expected to be $1.740 million (2013 dollars) by the third year of operation. The RIMS II final demand multiplier for real estate is 10.2647. When multiplied by $1.740 million (2013 dollars), that creates 17.9 new jobs. Table 2-17 and 2-18 show the economic impact of the operations for the 20 major industrial classifications in the RIMS II input/output model. Please note that in these and succeeding tables, output and earnings are given in thousands of dollars. Table 2-17. Increase in Employment, Output, and Earnings for Leasing Operations Industry group Employment Output Earnings Agriculture, forestry, fishing 0.0 3 1 Mining 0.0 2 0 Utilities 0.0 14 2 Construction 0.4 73 22 Durable Goods Manufacturing 0.1 20 5 Non Durable Goods Manufacturing 0.1 46 7 Wholesale trade 0.1 28 9 Retail trade 0.7 58 20 Transportation and warehousing 0.1 21 6 Information 0.1 51 10 Finance and insurance 0.5 126 36 Real estate and rental and leasing 11.6 1953 295 Professional, scientific, services 0.5 74 33 Management of companies 0.1 18 7 Administrative and waste management 1.8 115 52 Educational services 0.1 9 4 Health care and social assistance 0.5 52 23 Arts, entertainment, and recreation 0.1 10 3 Accommodation 0.1 10 3 Food services and drinking places 0.5 26 9 Other services 0.3 32 12 Households 0.1 0 1 Total 17.9 2,742 560 Table 2-17 shows that there will be a total of 17.9 new jobs created from the leasing of the apartments. Total output will increase by $2.74 million, while total household earnings would increase by $0.56 million. 40

Table 2-18. Output and Earnings Per New Worker for Leasing Operations Industry group Employment Output/Employee Earnings/Employee Agriculture, forestry, fishing 0.0 161.3 43.0 Mining 0.0 416.7 83.3 Utilities 0.0 741.1 107.1 Construction 0.4 174.8 53.7 Durable Goods Manufacturing 0.1 235.9 52.4 Non Durable Goods Manufacturing 0.1 235.9 52.4 Wholesale trade 0.1 438.4 70.6 Retail trade 0.7 83.5 29.0 Transportation and warehousing 0.1 159.7 45.8 Information 0.1 372.8 72.5 Finance and insurance 0.5 241.7 68.6 Real estate and rental and leasing 11.6 168.7 25.5 Professional, scientific, services 0.5 157.6 70.1 Management of companies 0.1 257.9 104.6 Administrative and waste management 1.8 63.6 28.6 Educational services 0.1 69.1 31.2 Health care and social assistance 0.5 101.1 45.0 Arts, entertainment, and recreation 0.1 73.4 24.9 Accommodation 0.1 115.1 31.4 Food services and drinking places 0.5 58.5 19.6 Other services 0.3 107.5 39.9 Households 0.1 0.0 11.7 Total 17.9 153.5 31.3 Table 2-18 shows that output per new worker for the real estate sector would be about $168,700, with average annual earnings of $25,500. For all new workers, the corresponding figures are $153,500 and $31,300. 41

2-9 VERIFICATION OF INPUTS Development Costs The total development costs for each apartment building that were used as input to the economic model are confirmed as reasonable by the letters of confidence from Dettaglio Construction Inc. shown below: 42

43

44

45

46

47

Leasing Operations The revenue assumptions for the leasing of the apartments are deemed reasonable by the following market review and competitor comparison. As shown below, the rental rates for the projects fall within the local competitor market rates. Note: Hannah Lofts are not depicted on this chart. Hannah Lofts and Hollis Mews are adjacent properties and therefore will have similar rent comparables. 48