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2016 04-28IDIAN� IMPACT FEE ADVISORY COMMITTEE UPDATED MEETING AGENDA Public Safety Training Center Auditorium Room 1223 E. Watertower Ave. Meridian, ID 83642 Thursday, April 28, 2016, 2:00 P.M. 1. Roll- Call Attendance David Fulkerson _Matthew Adams John Nesmith 2. Adoption of the Agenda _ Gene Strate _Spencer Martin _Brad Pfannmuller _ "Butch" Weedon 3. Building community perspective presentation (Matt Adams and guest) 4. Impact Fee 101 5. City of Meridian Budget 101 6. City of Meridian CIP 101 7. Fire Department regional discussions 8. Tour Public Safety Training Center (time permitting) Impact Fee Advisory Committee Meeting Agenda — Thursday April 28, 2016 Page 1 of 1 All materials presented at public meetings shall become property of the City of Meridian. Anyone desiring accommodation for disabilities related to documents and/or hearing, please contact the City Clerk's Office at 888-4433 at least 48 hours prior to the public meeting. X David Fulkerson X Matthew Adams John Nesmith IMPACT FEE ADVISORY COMMITTEE UPDATED MEETING AGENDA Public Safety Training Center Auditorium Room 1223 E. Watertower Ave. Meridian, ID 83642 Thursday, April 28, 2016, 2:00 P.M. X Gene Strate Spencer Martin X Brad Pfannmuller X"Butch" Weedon 2. Adoption of the Agenda 3. Building community perspective presentation (Matt Adams and guest) 4. Impact Fee 101 5. City of Meridian Budget 101 6. City of Meridian CIP 101 7. Fire Department regional discussions -Continued to Next Quarterly Meeting 8. Tour Public Safety Training Center (time permitting) Impact Fee Advisory Committee Meeting Agenda — Thursday April 28, 2016 Page 1 of 1 All materials presented at public meetings shall become property of the City of Meridian. Anyone desiring accommodation for disabilities related to documents and/or hearing, please contact the City Clerk's Office at 888-4433 at least 48 hours prior to the public meeting. a O CND r 41 O n �, N Q .� 3' `--' -n N. r+ N — O CD C7 CD C7 0 0 3 O 0- (D CD C CD Ln r -+M CD C� O. G N CD CD O -0 CD :yr N CD m N 4 CDD 00 CD CDD O 1 p� 3 CD CD r+ O O O �-h M CD CD O CD �Q • C7 � F-- M CD CD CCD CD � O N r O CD O 0 CD r �• N CD CD v :Y N. CD CND p n � O N 0 O C N N j CD r + Q. O � CD Ln X cu O n � � N � r+ N CD (nn -• CD N CD r Q. CQ i CDT_ l..L. N CSD CD n� N r+ O O 62-1 Figure 5. Police 10 -Year Capital Improvement Plan Source: City of Meridian and BBC Research & Consulting. The police CIP in Figure 5 includes the projected expenditures for four substations which will be located within other, larger facilities such as new fire stations. The precise location of these future substations has not been officially determined. The police department does not need new full size stations, but instead needs smaller police offices throughout the city where personnel can write reports and interact with citizens, The police CIP includes 22 percent of the costs of a new training center. As previously stated, this improvement will serve both the existing population and is also necessary to meet the demands of future growth therefore it is only partially impact fee eligible. This new facility will include a training village and classrooms. It will also be open for use by other public service departments and the local community. Current fire assets. The fire department responds to 80 percent of all calls for service within six minutes (i.e„ one minute "turn out" time and five minutes in transit), BBC RESEARCH & CONSULTING FINAL REPORT, PAGE 14 Infrastructure Training Center $7,500,000 22 % $1,672,484 Station Expansion 800,000 100 800,000 Replace Vehicles ($300,000 annually) 3,000,000 0 0 Substation in Fire Station 45 60,000 100 60,000 Future Substation #1 120,000 100 120,000 Future Substation #2 120,000 100 120,000 Future Substation #3 60,000 100 60,000 Total Infrastructure $11,660,000 $2,832,484 Fee -Related Research Portion of Impact Fee Study $7,333 100 % $7,333 Minus Impact Fee Fund Balance FY 2013 Beginning Fund Balance $639,687 100 % $639,687 Grand Total $11,027,646 $2,200,130 Source: City of Meridian and BBC Research & Consulting. The police CIP in Figure 5 includes the projected expenditures for four substations which will be located within other, larger facilities such as new fire stations. The precise location of these future substations has not been officially determined. The police department does not need new full size stations, but instead needs smaller police offices throughout the city where personnel can write reports and interact with citizens, The police CIP includes 22 percent of the costs of a new training center. As previously stated, this improvement will serve both the existing population and is also necessary to meet the demands of future growth therefore it is only partially impact fee eligible. This new facility will include a training village and classrooms. It will also be open for use by other public service departments and the local community. Current fire assets. The fire department responds to 80 percent of all calls for service within six minutes (i.e„ one minute "turn out" time and five minutes in transit), BBC RESEARCH & CONSULTING FINAL REPORT, PAGE 14 Figure 7. Fire 10 -year Capital Improvement Plan Buildings Fire Station #5 (to repay Rural Fire) $806,000 100 % $806,000 Fire Station #6 2,230,000 100 $2,230,000 Fire Station #7 2,020,000 100 $2,020,000 Fire Station #8 2,020,000 100 $2,020,000 Vehicles Quint Ladder T- Station #4 $1,100,000 0 % $0 Heavy Rescue Engine Station #6 700,000 100 $700,000 Quint Ladder T for Station 47 1,100,000 100 $1,100,000 Fire Engine for Station #8 520,000 100 $520,000 Fire Engine MF005 520,000 100 $520,000 Heavy Rescue Tender 380,000 0 0 Replace Engine #38 520,000 0 0 Replace Engine MF009 520,000 0 0 Replace Ladder Truck MF021 1,100,000 0 0 Replace Brush MF022 145,000 0 0 Replace Engine MF010 520,000 0 0 Replace Engine MFO14 520,000 0 0 Replace Engine MFO18 520,000 0 0 Equipment "Opticom" Traffic Signal Controls $200,000 100 % $200,000 Replace Air Unit MF00 98,000 0 0 Replace Breathing Apparatus 380,000 0 0 Total 2014-2023 CIP $15,919,000 $10,116,000 Fee Related Research Impact Fee Study $7,333 100% $7,333 Minus Increase in Level of Service Fire Station #8 and Engine #8t $2,540,000 $2,540,000 Minus Impact Fee Fund Balance FY 2013 Beginning Fund Balance $861,861 100% $861,861 Grand Total $12,524,472 $6,721,472 Note: t This station was removed in order to maintain the current level of service. Service level calculated by comparing fire stations to developed land uses in the city. Source: City of Meridian, Capital Improvement Plan, and BBC Research & Consulting. The City is expected to purchase $16 million dollars in fire capital improvements, $6.7 million of which is impact fee eligible from 2013 to 2023. Current parks and recreation assets. The total number of currently developed park acres is 245.5, which equates to a service standard of 3,04 acres per 1,000 residents. Figure 8 lists the City's current parks and recreation assets that are responsible for the 3.04 acres per 1,000 residents service standard. BBC RESEARCH & CONSULTING FINAL REPORT, PAGE 16 facilities will also meet the demand of the future growth, which enables a portion of the costs to be recovered through the impact fee. Park values are calculated at $177,000 per acre, This includes $142,000 for development costs and $35,000 for land costs, These values were calculated from weighted historical data provided by the City. See Appendix D for details on this calculation. For Borup and William Watson parks only the development costs are applied because the land has already been purchased and exists on the list of current infrastructure, Figure 9. Parks and Recreation 10 -year Capital Improvement Plan Note: $177,000/acre in land and development costs Source: City of Meridian, Capital Improvement Plan, personal interview with parks and recreation staff and BBC Research & Consulting. BBC RESEARCH & CONSULTING FINAL REPORT, PAGE 18 Pathways & Trails Pathway Connections $1,150,000 0 % $0 Neighborhood & Mini -Parks Isola Creek (7 acres) $1,239,000 100 % $1,239,000 Highlands (7 acres) 1,239,000 100 1,239,000 Oaks (7 acres) 1,239,000 100 1,239,000 William Watson Development Only (7 acres) 994,000 100 994,000 Community Parks Hillsdale (20 acres) $3,540,000 100 % $3,540,000 Borup Park Development Only (47 acres) 6,674,000 100 6,674,000 Storey Park (S acres) 885,000 22 197,353 Aldape Construction (60 acres) 10,620,000 100 10,620,000 Large Urban Parks South Meridian Park $1,050,000 100 % $1,050,000 Parks Amenities Rails with Trails $1,000,000 22 % $222,998 Recreation Center (YMCA Partnership) 4,000,000 22 891,991 Equipment Sweeper/Blower $18,000 100 % $18,000 Truck/Plow 35,000 100 35,000 Large Area Mowers(2) 110,000 100 110,000 Mules (4) 48,000 100 48,000 ATV 12,000 100 12,000 Trailer 7,500 100 7,500 Trim Mowers (5) 100,000 100 100,000 Trucks(4) 100,000 100 100,000 Turf Sprayer 40,000 100 40,000 Ball Field Groomer 10,000 100 10,000 Replace Vehicles and Equipment 2,032,000 0 0 Total 2014-2023 CIP $36,142,500 $28,387,842 Fee -Related Research Impact Fee Study $7,333 100% $7,333 Minus Increase in Service Level 90 acres at $177,000t per acre $15,930,000 100% $15,930,000 Minus Impact Fee Fund Balance FY 2013 Beginning Fund Balance $3,378,970 100% $3,378,970 Grand Total $16,840,863 $9,086,206 Note: $177,000/acre in land and development costs Source: City of Meridian, Capital Improvement Plan, personal interview with parks and recreation staff and BBC Research & Consulting. BBC RESEARCH & CONSULTING FINAL REPORT, PAGE 18 In 2023, the City's residential development is expected to increase by 15,779,452 square feet, and the nonresidential development is estimated to increase by 3,303,444 square feet. Therefore, the future allocation of land uses is projected,to be 83 percent residential and 17 percent nonresidential. The study team has calculated all impact fees per residential unit, regardless of unit type, and per nonresidential square foot, regardless of type. BBC does not recommend imposing fees at a more detailed level of analysis (i.e., fee differentials for single family and multifamily units and differentials for commercial, agricultural and industrial square footage). In our judgment, such distinctions are unwarranted by empirical evidence. After allocating costs to the appropriate land -uses, impact fees for residential and nonresidential development are calculated by dividing the residential service costs by new residential units, and by dividing nonresidential service costs by new nonresidential square footage. Police impact fees. Figure 11 presents police impact fees of $223 per residential unit and $0.12 per nonresidential square foot. This represents the full cost recovery impact fee under Idaho's Impact Fee Act. Figure 11. Police Impact Fee Calculation Notes: (1) See Figure 45 Police Capital Improvement Plan for a list of CIP investments required to maintain the current level of service. (2) See Figure 10. Distribution of Land Uses, 2013 to 2023 Source: City of Meridian and BBC Research & Consulting. Allocated Value for Police Infrastructure I'1 $2,200,130 Future Land Use Percentage (2) Residential 83 Nonresidential 17 Costs by Land Use Category Residential $1,819,265 Nonresidential $380,865 Growth to 2023 Residential (in dwelling units) 8,165 Nonresidential (in square feet) 3,303,444 Impact Fee by Land Use (rounded) Residential (per dwelling unit) : $223 Nonresidential (per square foot) $0.12 BBC used the current service standard as a benchmark to double check the forward-looking CIP approach. The team is pleased that the calculated fee amounts are quite similar to Meridian's current investment in police infrastructure ($200 per residential unit and $0.10 per nonresidential square foot - see Appendix D). These similar amounts suggest that Meridian's 10 - Year Police CIP is not overcharging new development for its proportionate share of new capital improvements. BBC RESEARCH & CONSULTING FINAL REPORT, PAGE 20 Fire impact fees. Figure 12 calculates the impact fees for fire capital improvements based on the future growth projections and anticipated future capital improvement costs described in earlier exhibits, Figure 12. Fire Impact Fee Calculation. Notes: (1) See Figure 7. Fire Capital Improvement Plan for a list of CIP investments required to maintain the current level of service. (2) See Figure 10. Distribution of Land Uses 2013 to 2023. Source: City of Meridian and BBC. E� o.� � � � � N Value of Future Fire Capital Improvements (1) $6,721,472 Future Land Use Percentage (2) Residential 83 % Nonresidential 17 % Allocated Value by Land Use Category Residential $5,557,917 Nonresidential $1,163,555 Growth to 2023 Residential (in dwelling units) 8,165 Nonresidential (in square feet) 3,303,444 Impact Fee by Land Use Residential (per dwelling unit) $681 Nonresidential (per square foot) $0.35 I The full cost recovery impact fees for fire capital improvements total $681 per new residential unit and $0.35 per new nonresidential square foot. These fees are within the same range as the value of Meridian's current investment in fire infrastructure ($510 per residential unit and $0.24 per nonresidential square foot). It is to be expected that the full cost recovery fees slightly exceed this current level of investment. Natural cost increases in providing the same level of service and the addition of several new types of infrastructure triggered by growth, but not wholly applicable to growth, increase the future investment in fire infrastructure. Many factors are responsible for higher fire fees as compared to the current investment in Appendix D. For example, as the city and the need for fire services have grown, additional fire engines are required to be held in reserve. Since the requirement for the additional engine is triggered by growth the costs of are impact fee eligible. Current investment does not reflect any such type of large improvement, which explains why the fees under the CIP approach are higher. BBC RESEARCH & CONSULTING FINAL REPORT, PAGE 21 Parks and recreation impact fees. Parks and recreation impact fees are shown in Figure 13, which is based on Figure 9 and demographic projections. Parks and recreation investment is only allocated to residential development since households are the primary consumers of park services. Figure 13. Parks and Recreation Impact Fee Calculation Notes: (1) See Figure 8. Parks and Recreation Capital Improvement Plan for a list of CIP investments required to maintain the current level of service. Source: City of Meridian and Impact Fee Study Team. The full cost recovery impact fee for parks and recreation capital improvements is $1,113 for any new residential unit. The study team is pleased that the calculated fee amount does not exceed Meridian's current investment in parks and recreation infrastructure ($1,763 per residential unit). These similar amounts suggest that Meridian's 10 -Year Parks and Recreation CIP is not overcharging new development for its proportionate share of new capital improvements. City Participation Because not all the capital improvements listed in the CIPS are 100 percent growth -related, the City would assume the responsibility of paying for the portion of the capital improvements that are not attributable to new growth. These payments would come from existing funds, donations and/or ongoing revenue sources that are not tied directly to growth. To arrive at the City participation amount, the expected impact fee revenue and any shared facility amount need to be subtracted from the total CIP value. Figures 14 through 19 calculate the City's participation between 2013 and 2023. The participation amount includes the cost of purely non -growth -related improvements, and portions of growth -related improvements that are attributable to repair, replacement, or upgrade, and not impact fee eligible. BBC RESEARCH & CONSULTING FINAL REPORT, PAGE 22 1 Value of future Parks & Recreation improvements $9,086,206 Current Land Use Percentage Residential 100% Nonresidential 0% Allocated Value by Land Use Category Residential $9,086,206 Nonresidential $0 Growth to 2023 Residential (total dwelling units) 8,165 Nonresidential (in square feet) 3,303,444 Impact Fee by Unit of Development Residential (per dwelling unit) $1,113 Nonresidential (per square foot) N/A The full cost recovery impact fee for parks and recreation capital improvements is $1,113 for any new residential unit. The study team is pleased that the calculated fee amount does not exceed Meridian's current investment in parks and recreation infrastructure ($1,763 per residential unit). These similar amounts suggest that Meridian's 10 -Year Parks and Recreation CIP is not overcharging new development for its proportionate share of new capital improvements. City Participation Because not all the capital improvements listed in the CIPS are 100 percent growth -related, the City would assume the responsibility of paying for the portion of the capital improvements that are not attributable to new growth. These payments would come from existing funds, donations and/or ongoing revenue sources that are not tied directly to growth. To arrive at the City participation amount, the expected impact fee revenue and any shared facility amount need to be subtracted from the total CIP value. Figures 14 through 19 calculate the City's participation between 2013 and 2023. The participation amount includes the cost of purely non -growth -related improvements, and portions of growth -related improvements that are attributable to repair, replacement, or upgrade, and not impact fee eligible. BBC RESEARCH & CONSULTING FINAL REPORT, PAGE 22 0 0 N CL V) 0 4- L _:3 0 7 H N V) vi 0 +- Q w V r) Svv) Ol p� O m L L 3 L 0 d 3 = o > s - o C d a } 4- : O LU +- o u v HvZ�, 1 n cd o ;�-q0.� ct co cn ° ct ° mco cg O Ccj O Ct ct ct Ct r-4 to co O �^ O �,� 0 ct Co ,rte cz E��P� E—i Q CtU UPP �, r-� r --i 4) CO •u _►� NO ct � t M cd �� CIOO O �-+ 0 N NO O p r Ct ON n O 04-D cid M p -----) pd co cd 7;1 N cd r O 4-)- -� .1 I a) co m A -D Cd 0 C41-14 Q) Cl) 4-D . --q 4--1 0 4-D U) 0 Eil �-q C424 4--) Cd �-4 0 4--) Cd Cd 9) ct ct Impact • •Statute Overview • 67-8202: Describes the purpose of establishing a need for impact fees • 67-8203: Definitions for all the terms used within 67-82 • 67-8204 : Describes the minimum requirements for developing impact fees • 67-8204(1) : A development impact fee shall not exceed a proportionate share of the cost of system improvements • 67-8204(2) :A development impact fee shall be calculated on the basis of levels of service ■ 67-8204(15) : A development impact fee ordinance shall provide for appeals regarding development impact fees in accordance with the requirements of section 67-8212, Idaho Code o 67-8204 : Developers have the right to request specific information about the calculations of impact fees relating to their project • 87-8205: Describes the purpose and function of the Impact Fee Advisory Committee • 87-8206: Describes the procedures for establishing Capital Improvement Plans • 87-8208: Describes the requirements to establish Capital Improvement Plans o 87-8208(2) : The governmental entity imposing a development impact fee shall update the capital improvements plan at least once every five (5) years • 87-8210 : Describes the requirements for the management of Impact Fees collected and the necessary audit reporting requirements o 87-8210(4) : Collected development impact fees must be expended within eight (8) years from the date they were collected Idaho State Statues — Impact Fees 67-82 City of Meridian Impact Fee Development Schedule • The City develops an annual Capital Improvement Plan • The City will review the Impact Fee Calculations at least every 5 years to coincide with 87- 8208(2) o The beginning of the Impact Fee Calculation review will commence within at least 5 calendar years after the date of the last adopted Impact Fee Schedule DEVELOPMENT PROFORMA - Dated January 21, 2010 BASED ON SITE PLAN SCHEME - A dated N/A Parcel size 2 ac 87,120 sf Less ROW 0.0 ac - sf 2 ac 87,120 sf SITE AREA Building Area Land Medical office 15,000 Sq. Ft. 15,000 2.00 Acres 9 5q. vt. 0 u.UU Acres TOTAL SITE AREA 15,000 Sq. Ft. 15,000 2.00 Acres LAND COST Land Value TOTAL LAND COSTS CONSTRUCTION COST ON-SITE COSTS Demolition Asbestos Removal (City Bldgs -Assumes no significant contamination pending Phase II) On Site Improvements - Extrapolated w/ adjustments for Landscaping/Storm Drain On -Site Owner's Costs Project Signage Contingency (5%) TOTAL ON-SITE COSTS OFF-SITE COSTS Off Site Improvements Contingency (10%) TOTAL OFF-SITE COSTS BUILDING COSTS Medical Office Contingency (5%) TOTAL BUILDING COSTS TENANT ALLOWANCES Medical Office TOTAL TA TOTAL CONSTRUCTION COSTS SOFT COSTS LEGAL & ACCOUNTING COUNSEL A & E CONSULTANTS ENTITLEMENT FEES PLAN CHECK AND BUILDING PERMITS SEWER, WATER, FIRE, POLICE, PI SURVEY AND REPORTS PROPERTY TAXES/ASSESSMENTS IMPACT FEES PROJECT MANAGEMENT COMMISSION (LEASING) Subtotal Soft Costs Developer's Fee 87,120 Sq. Ft. @ Allowance $5.00 psf Allowance 15,000 Sq. Ft. @ 15,000 Sq. Ft. 15,000 Sq. Ft. @ 15,000 Sq. Ft. 5.00% 5.00 1.00 1.75 2.50 2.50 13.39 4.00 X Costs (excl land) 10% 5% 5% $10.00 4.5 15,000 $871,200 $0 $0 $435,600 $10,000 $30,000 $47,560 $0.00 $0 $0 $150 $2,250,000 GL $112,500 $2,362,500 $45 $675,000 GL $675,000 $60,000.00 $75,000.00 $15,000.00 $26,250.00 $37,500.00 $37,500.00 $12,500.00 $200,850.00 $60,000.00 $160,000.00 $168,703 Sq. Ft. Per sq. ft. land Per sq. ft. bldg $10.00 $871,200 $58.08 $3,560,660 $684,600 $0.00 $29.04 Reimbursed by Tenants $34.88 $0.00 4/28/2016 1 Proforma l.xls FINANCING COSTS Construction Interest $0 Loan Fees (const'n loan 0.5%, perm loan bkr 0.5%) 1% Title Insurance, Escrow and Loan Closing Costs $85,000 $85,000 Soft Cost Contingency (5%) 5.00% $43,915 TOTAL SOFT COSTS $982,218 $65.48 TOTAL DEVELOPMENT COSTS $4,542,878 $302.86 w TENANT REIMBURSEMENTS Medical office $0 w Signage Reimbursements from Tenants (90%) ($27,000) TOTAL REIMBURSEMENTS ($27,000) -$1.80 r NET TOTAL DEVELOPMENT COSTS $4,515, $301.06 ! NET TOTAL DEVELOPMENT COSTS (W/ LAND) $5,387,078 $359.14 OPERATING PROFORMA 1 2 3 4 5 6 7 8 9 10 k INCOME Medical office $270,000 $270,000 $270,000 $270,000 $270,000 $270,000 $270,000 $270,000 $270,000 $270,000 Y t Common Area Reimbursements (assumes $3.25/psf-$0.25 premium for security) $48,750 $49,725 $50,720 $51,734$52,769$53,824 $54,900 $55,998$57,118$58,261 j TOTAL INCOME $318,750 $319,725 $320,720 $321,734 $322,769 $323,824 $324,900 $325,998 $327,118 $328,261 EXPENSES Vacancy + CAM/Taxes (5% of shops) $0 0.00 $0 $0 $0.00 $0 $0 $0 $0 l $0 Common Area Expenses and Taxes $48,750 $49,725 $50,720 $51,734 $52,769 $53,824 $54,900 $55,998 $57,118 $58,261 Net Operating Expense (1%) $3,188 $3,197 $3,207 $3,217 $3,228 $3,238 $3,249 $3,260 $3,271 $3,283 Replacement Reserve (1%) $3,188 $3,197 $3,207 $3,217 $3,228 $3,238 $3,249 $3,260 $3,271 $3,283 h TOTAL EXPENSES $55,125 56,119.50 $57,134 $58,169 $59,223.94 $60,300 $61,398 $62,518 $63,661 $64,826 NET OPERATING INCOME $263,625 263,606 $263,586 $263,565 $263,545 $263,524 $263,502 $263,480 $263,458 $263,435 Loan Payment ($384,462) CASH RETURN -$120,857 Plus Principal Payment $41,062 TOTAL RETURN -79,795 RETURN ON COST (NET COSTS W/O LAND) 5.84% 6% 6% 6% 6% 6% 6% 6% 6% 6% RETURN ON TOTAL COSTS (INCL. LAND) 4.9% 4.9% 4.9% 4.9% 5% 5% 5% 5% 5% 5% Year Year Year CF ANALYSIS FOR MARKET DEVELOPMENT DEAL (538,708) 0 -$1,245,762 sales proceeds and 1 year of NO[ IRR ANALYSIS FOR MARKET DEVELOPMENT DEAL #NUM! 4/28/2016 2 Proforma l.xls LOAN ANALYSIS I don't typically deal with the loan numbers. Net Operating Income Project Cap Rate Loan Loan Proceeds net of points/costs Project Cost CAPITAL SURPLUS/(REQUIRED) Interest Rate Amortization Period Term Loan Payment Loan Interest Loan Principal Debt Service Coverage LEASING ANALYSIS Medical office TOTAL DEVELOPMENT 263,605.50 3,514,740.00 $4,610,712 $4,541,551 $4,515,878 $25,673 7.5% 30 10 ($384,462) ($343,400) ($41,062) 0.69 Sq. Ft. Bldg. $/sf/mon 15,000 1.50 15,000 Years Years per year per year peryear INVESTMENT ANALYSIS Project Cost 7.5% Equity Req'd 131% LTV Loan Size Sales Value Less Sales Expenses Net Sales Proceeds Less Repay Loan Construction interest for 1 year Available for Distribution $/sf/year $18.00 Annual Rent $270,000 $270,000 BTS FAR: 100.0% 5,387,078 538,708 10% 4,848,370 3,514,740 175,737 3,339,003 4,848,370 - capitalized as part of loan - interest is after project opens (1,509,367) 10% every 10 years 4/28/2016 3 Proforma l.xls