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Item G3 LAND AUTHORITY GOVERNING BOARD AGENDA ITEM SUMMARY Meeting Date: March 17,2004 Bulk Item: Yes No X Department: Land Authority Agenda Item Wording: Approval to add Falcon Pass Apartments in Marathon to the Acquisition List as an affordable housing site. Item Background: The Carlisle Group proposes to build an 80 to 90 unit affordable housing development called Falcon Pass at MM 50.5 on the oceanside of Key Vaca in Marathon between the Wooden Spoon restaurant and Trailer Ranch by the Sea. Similar to the Meridian West Apartments on Stock Island, Falcon Pass Apartments would provide rental housing for families and residents making 60% or less of median income by using tax credits and a SAIL loan from the Florida Housing Finance Corporation to finance construction. The Carlisle Group requests that the Land Authority provide a mortgage loan equal to the cost of the land (estimated at $1,012,500) after Florida Housing approves the construction financing in 2005. The property consists of exotic vegetation and is zoned Suburban Residential (SR). The development will require a rezoning to Urban Residential (UR) and 80 to 90 RaGa allocations, of which only 42 are currently available from Marathon. The addition of property to the Acquisition List is a preliminary, non-binding step indicating the Board's desire to pursue acquisition. Further Board action is required before issuing the requested mortgage loan. Advisory Committee Action: On February 25, 2004 the Advisory Committee voted 4/0 to approve adding the property to the Acquisition List. Previous Governing Board Action: None. Contract/Agreement Changes: None. Staff Recommendation: Approval Total Cost: $ To be determined Budgeted: Yes No Cost to Land Authority: $ To be determined Source of Funds: Land Authority (Tourist Impact Tax and State Park Surcharge) Approved By: Attorney X County Land Steward Executive Director Approval: ~. ~ ark J. Rosch Documentation: Included: X To Follow: Not Required: Disposition: Agenda Item LA #3 II T'\T'Cf.JD' J~N ~ ~ lU~~ \\'F.C'B1 ~ D THE CARLISLE GRO'UP o CORPORATE OFFICE 2950 S. W, 27TH A VEl'll 11'. Sl'ITr 200 MIAHI, FL 33133 PHONE 305-476-8118 FAX 305-476-1557 FAX 305-476-5240 CP1'>1 CARLISLE PROPERTY MANAGEMENT. INC. CARLISLE DEVELOPMENT GROUP. LLC CARLISLE CONSTRUCTION. LLC ., T" LL"} I ASSEt: O}~}~ICt: _~9h..j. Wl'l.l.I:-':l;T():-': elReLr. Sl'ITr I TAIL\IL\SSrl'. H. 32309 I'II():-.:r (850) 222-9022 F.\\ (850) 222-9110 January 21, 2004 Mark Rosch Monroe County Land Authority 1200 Tnunan Avenue Key West, Florida 33040 Re: Falcon Pass Apartments on Maratbon Dear Mark, This is the site in Marathon I have been working on for years, and have discussed with you several times. We will partner with Ed Swift. It is located just behind the now closed "Wooden Spoon" restaurant (see attached elevation, site plan, floor and unit plans). It will be 90 units of Tax Credit financed rentals, using the same State programs that financed Meridian West, and the same income and rent limits (See attached chart). We have the express support of the City of Marathon (see attached Resolution) who has submitted Comprehensive Plan amendments to the Department of Community Affairs, and is rezoning the site for affordable housing. We also have the commitment of the DCA for expedited processing, and the additional ROGO units we need. As you will see from the attached proforma, we have negotiated a purchase price of $1,012,500, which we believe quite reasonable, and which is actually less per unit than was granted for Meridian West or Trade Winds. We were requesting this amount from the Land Authority. As you will also see from the attached Sources & Uses and Executive Summary, we cannot build these units without this help. I am requesting that this proposal be added to the coming agenda, if possible. If not, then at the next available meeting, Do not hesitate to contact Ken Naylor or myself with any questions or request for additional infonnation. With Attachments (3) CC: Ed Swift, Historic Tours Mark Kaplan, The Carlisle Group (w/attachments) Tom D. Freijo, The Carlisle Group (w/attachments) Steve Seibert, The Carlisle Group (w/attachments) Kenneth Naylor, The Carlisle Group (w/attachments) '11/13/2003 15:24 3052894123 CITY OF MARATHON PAGE 02 Sponsored by: Jank.e ) CITY OF MARATHON, FLORIDA RESOLUTION 2003-138 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF MARAmON, FLORIDA, SUPPORTING THE CARLISl-E AFFORDABLE HOlJSINGPRo.JECT WHEREASt the Marathon City Council understands that affordable, work force housing has become a significant problem in Marathon; and WHEREAS, the provision of affordable, work force housing is critical to the economit; future of Marathon; and WHEREAS, the increasing value of land and co.nstroctioD costs makes it extremely difficult to build affordable, workforce housing in Marathon for families ea.ming between $18,800 and $33,900 (30% to 60% of the Monroe County Median,Pami1y Income); and WHEREAS, the City of Mar.atbon has already allotted 59 Affordable ROODs for project" that will address incomes of up to 120% ($67,800) of the Monroe County Median Family Income~ and WHEREAS. the Carlisle Group proposal includes 84 affordable housing units for those earning between 30% lJnd 60% of Monroe County Median Family Income; and WHEREAS, tbe City of Marathon has 42 Affordable ROGOs available for these need~; and WHEREAS, the Carlisle Group believes tbat with strong local support the remaining 42 Affordable ROGOs can be made available fTom the State of Florida. NOWt THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF MARAmONt FLORIDAt that: Section 1. The Ma,athon City Council supports the Affordable Housing project proposed by the Carlisle Group, contingent. on the acquisition of 42 Affordable ROGOs frolll the State of Florida, and their ability to satisfy a1l environmental, zoning, and pennitting issues associated with the property propo$ed for development. Section 2. The Marathon City Council urges Secretary Castille of the Department of Community Affairs to do all in her power to helplnsure that this vital project is built, including ~sistance with land costs and the provision of affordable ROGOs. 11/13/2003 15:24 3052894123 CITY OF MARATHON PAGE 03 Sedion 3. This re901uti.on shall take effect jrmnedia~ly upon its adoption. PASSED AND APPROVED by the City Council of the city of Marathon, Florida., this 10th day of November. 2003. THE CITY OF MARATHON, FLORIDA ~..~= Randy Mearns, Mayor AYES: NOES: ABSENT: ABSTAIN: Bartus, Pinlrus~ Repetto~ W o:rtbington~ Meam~ None None None Falcon Pass - Marathon, FL 8) Executive Summary Project Description Project Name Falcon Pass City. State Marathon. FL County Monroe New Construction / Rehab New Construction Total Number of Units 90 Total Square footage in project 87.526 Total Number of Buildings 12 Number of Accessory Buildings 1 Project Costs I2taL Per Unit Per Sq. Ft. Land 1,012,500 11 .250 11.57 Hard Cost Construction 7,905,923 87,844 90.33 Contingency 232,678 2,585 2.66 Developer Fee 1,831,019 20,345 20.92 Impact Fee & Connection fees 307,080 3,412 3.51 Soft Costs 2,998,191 33,313 34.25 Total Project Costs 14,287,390 158,749 163.24 Project Financing I2taL Per Unit Per Sq. Ft. Permanent 1 st Mortgage 2,500,000 27,778 28.56 Permanent 2nd Mortgage 0 SAIL Loan 2,000,000 22,222 22.85 SHIP Loan From Monroe County 40,000 444 0.46 Land Authority Loan 1 ,012,500 11 ,250 11.57 Interest Income 0 0 0,00 NOI During Construction 0 0 0.00 Tax Credit Equity 7,289,000 80,989 83.28 Impact Fee Waivers 0 0 0.00 Deferred Developer Fee 1,445,890 16,065 16.52 14,287,390 158,749 163.24 Construction Loan 0 0 0.00 Bridge Loan 630,000 7.000 7.20 Profit Summary Developer's Fee Acquisition 0 Developer's Fee 1 ,373,265 Developer's Overhead 457,755 Total Available Profit 1,831,019 Less:Deferred Developer's Fee 1,445,890 Net Fee Payable at Stabilization 385,129 Paid Developer's Fee 385,129 Total Profit 385,129 Carlisle Percentage of Profit J'v, Partner Percenta e of Profit 100,00% 0,00% FHFC Leveraging Summary Credit Request x 7,5 6,750.000 DDA Factor (if applicable) 0,7692 Subtotal 5.192,100 Plus SAIL (if applicable) 7.192,100 Leveraging Per Unit 79,912 1 of 1 1/21/20042:59 PM Falcon Pass - Marathon, FL 1) Project Setup Project Name City, State County Ownership Entity DDAlQCT Ives=l,no=2) Falcon Pass Maralllon, FL Monroe Limiled Partner 1 Tlmin Financial Projection Revision Date Closing Date First Unit Leased Last Unit Leased Permanent Loan Closi Date Depreciation Start (AVG,) - 25", Depreciation Start (A VG,) - 75'" Date M 16-Feb-02 Feb-05 Feb-06 Mar.{)6 Jul.{)6 \'\(2004 1/1/2004 Elapsed Months Cumulative Months 12 1 4 12 13 17 I Bond Deal: NO Pro'ect T New Construction AcquisitonlRehabilitation Rehabilitation "x" X 60 40 ram "x" Financino Vehicle ("V" or "N") Credit % UHTC 9% V 8.01% TE Bondsl4% UHTC N 3.43% X 100,00% Distribution % Units %SF % Income VU 14,44% 14.35% 6,53% U 85,56% 85.65% 93.47% MKT 0.00% 0,00% 0,00% County Name: Monroe Median Income 56,500 1% 01 AMI I Income Eliaibili v 120% 60% 30% 1 bedroom Income 75% 50,850 25,425 12,713 Monthlv Rents 1271,2 635.63 317,81 2 bedroom Income 90% 61,020 30,510 15,255 Monthlv Rents 1525,50 762,75 381,38 3 bedroom Income 104% 70,512 35,256 17,628 Monthly Rents 1762,8 881.4 440,7 4 bedroom Income 116% 78,648 39,324 19,662 Monthlv Rents 1966.2 983,10 491.55 Utility Allowance Amount Sq,Ft. Studio 0 1 bedroom 84 608 2 bedroom 102 888 3 bedroom 133 1,057 4 bedroom 0 #01 Unit Type Rent Unit HUD Actual Net Total Rent Total Rent Total Rent Rent Rent Schedule Units VU/UIMKT Limit So.Ft. Rents Rent Rent Monthlv Annual Sa. Ft. P.S.F. Per Unit 1 Bedroom VU 30% 608 318 0 0 0 0 0,00 0 1 Bedroom VU 60% 608 636 0 0 0 0 0.00 0 1 Bedroom U 120% 608 1,271 0 0 0 0 0,00 0 2 Bedroom 7 VU 30% 888 381 381 279 1,953 23,436 6,216 3,77 3,348 2 Bedroom 38 U 60% 888 763 763 661 25,118 301,416 33,744 8.93 7,932 2 Bedroom U 120% 888 1,526 0 0 0 0 0,00 0 3 Bedroom 6 VU 30% 1,057 441 440 307 1,842 22,104 6,342 3.49 3,684 3 Bedroom 39 U 60% 1,057 881 881 748 29,172 350,064 41,223 8.49 8,976 3 Bedroom U 120% 1,057 1,763 0 0 0 0 0,00 0 4 Bedroom 0 LI 0 0 0 0 0 0 0 0,00 0 4 Bedroom 0 U 0 0 0 0 0 0 0 0.00 0 4 Bedroom 0 LI 0 0 0 0 0 0 0 0,00 0 Manager Unit Total 90 7,659 58,085 697,020 87,525 $ 7.96 7,745 Operating Expenses Total Per Unit P.S,F. Notes 'rentablel Administrative 32,580 362,00 0,37 Management Fee 34,427 382,52 0.39 5.00% Utilities 'll ,270 303,00 0,31 Payroll, Taxes & Benefits 67,770 753.00 0.77 R&M 69,660 774,00 0,80 Insurance 45,000 500,00 0,51 Real Estate Taxes 45,000 500,00 0,51 Ground Lease Payments 0 0,00 Replacement Reserves 18,000 200.00 0,21 Total 339,707 3,774.52 Debt Service Coveraae 1,10% Other Income Per Unit Per Annum Laundry 100 9,000 Cable 75 6,750 Garage 0 0 Other 118 10,620 ' Total Other Income 293 26,370 5%1 34,8511 IVacancy Rate Falcon Pass - Marathon, FL 6) Sources & Uses Construction Phase " ~ 20.20% 27,778 16,16% 22,222 0,32% 444 Permanent Phase " f>MJlnil 17,50% 27,778 14,00% 22,222 0.28% 444 Ill1aI 2,500,000 2,000,000 40,000 BeL Sl2Il= Permanent 1 st Mortgage SAIL Loan SHIP Loan from Monroe County o o 630,000 o o o o 6,195,650 o o 7,000 o o o o 68,841 o o 137,535 0.00% 5.09% 0.00% 0,00% 0,00% 0.00% 50.05% 0,00% 0.00% 100.00% o o o o o o 80,989 o 16,065 158.749 0.00% 0,00% 0.00% 0.00% 0.00% 0,00% 51.02% 0,00% 10.12% 100.00% Construction Loan Bridge Loan #1 Interest Income NOI During Construction Impact Fee Waivers Other Limited Partner Equity General Partner Equity Deferred De r Fee Total Sources o o o 7,289,000 o 1,445.890 14,287.390 12.378.150 Construction Phase Permanent Phase " Per Unit 53.24% 84,510 3.32% 5,271 3,32% 5.271 1,11% 1,757 1.05% 1.667 1,05% 1,667 0.00% 0 1,63% 2.585 0,00% 0 0.70% 1,116 0.40% 633 0,17% 278 0,05% 83 0,17% 278 0.00% 0 0.04% 70 0.00% 0 0,24% 381 0,30% 480 0,17% 278 0.04% 65 0,05% 72 2,10% 3,333 0,31% 500 1,05% 1,667 0,30% 470 0.00% 0 0,09% 150 0,56% 889 0,06% 93 0,50% 800 0,01% 22 0.49% 778 0,57% 912 0.98% 1,556 0.28% 444 0.56% 889 0,31% 489 0.04% 67 0,98% 1,556 0,35% 556 0,59% 944 0,03% 56 0,13% 200 0.63% 1,004 1,57% 2,500 0,00% 0 0.52% 821 Per Unit 84.510 5.271 5,271 1,757 1.667 1,667 o 2,585 o 807 73 278 83 278 o 70 o 381 480 278 65 72 3,333 500 1,667 470 o 150 889 93 800 22 778 912 1,556 444 889 489 67 1,556 556 944 56 200 1,004 2,500 o 821 " 61.45% 3.83% 3,83% 1,28% 1.21% 1.21% 0,00% 1.88% 0,00% 0.59% 0,05% 0.20% 0,06% 0.20% 0.00% 0.05% 0.00% 0.28% 0.35% 0.20% 0.05% 0,05% 2.42% 0.36% 1.21% 0,34% 0,00% 0.11% 0.65% 0.07% 0,58% 0.02% 0.57% 0.66% 1,13% 0.32% 0,65% 0.36% 0,05% 1,13% 0.40% 0,69% 0,04% 0,15% 0,73% 1,82% 0,00% 0,60% Total 7,605,923 474,355 474,355 158,118 150,000 150,000 o 232,678 o 72,594 6.588 25,000 7,500 25,000 o 6,300 o 34,258 43,200 25.000 5,870 6,500 300,000 45,000 150,000 42,300 o 13,504 80,000 8,325 72,000 2,000 70,000 82,080 140,000 40,000 80,000 44,000 6,000 140,000 50,000 85,000 5,000 18,000 90,329 225,000 o 73,873 11,365,650 o o o o 1,012,500 o Total 7,605,923 474,355 474,355 158,118 150,000 150,000 Uses Hard Construction Costs GC Profit GC General Requirements GC Overhead Accessory Buildings Recreational I Owner Items Off-Site Improvements Hard Cost Contingency @: Other Construction Interest Expense Brid e Loan Interest Ex nse Permanent Loan Origination Fee Permanent Loan Closing Costs Construction Loan Origination Fee Construction Loan Closing Costs Bridge Loan Origination Fee Cost of Issuance Fees Other Loan Closing Costs Reserves Re uired Lender Accounting Fees Application Fees Appraisal Architect Fee-Design Architect Fee-Supervision Builder's Risk Insurance Building Permit Brokerage Fee Credit Underwriting Fee Engineering Fee Environmental Report FHFC Administrative Fees FHFC Application Fees FHFC Compliance Mon, Fee Impact Fees (Detail) inspection Fees Insurance- propertylliability Legal Fees- Partnership Le9al Fees- Other Market Study Marketing & Advertising Operating Deficit Reserve Property Taxes Soil Test Report Survey(including as-built) Title Insurance & Recording Utiiity Connection Fee Other (explain in detail) Contin enc Soft Cost 232,678 3,0% 25,000 o o 34,258 43,200 25,000 5,870 6,500 300,000 45,000 150,000 42,300 o 13,504 80,000 8,325 72,000 2,000 70,000 82,080 140,000 40,000 80,000 44,000 6,000 140,000 50,000 85,000 5,000 18,000 90,329 225,000 o 73,873 11,443,871 o o o o 1,012.500 o 457.755 o 1,373,265 14,287,390 Sub- Total Existing Buildings, Owned Existing Buildings, To be Acquired Other Ac uisilion Costs Land, owned Land, To be Acquired Other Land Costs Deveioper's Admin, & Overhead Developer's Profit Acquisition Deveio er's Profit Total Pro'ect Cost o o o o 11,250 o o o o 137,535 0,00% 0.00% 0,00% 0,00% 8,18% 0.00% 0,00% 0,00% 0.00% 100,00% o o o o 11,250 o 5,086 o 15,258 158,749 0,00% 0,00% 0,00% 0,00% 7,09% 0.00% 100,00% 0.00% 9.61% 196,80% 4.0% 5.0% 12,0% (0) 01 I Financing Gap surplus/(short) ~g~ ,~~ ~10l ~ MO IDN ~ct 8 '!! ~0i5 '-~~. .~~ 0'" >-m- ...M ;:;:'0; ~ai ~g~ m", .rim .~:!... ~~ "'''' ~ai ~"'N "''' '-~~ "'- '" " ~;1; ~oi ~M'" OOM 00'" .~~ "'- ~b ~ai ~M'" g~ Mlrl- . ~:!... 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Step 3 of 3: Rent & Income Limits Program and Location Information Affordable Housing Program Year State Statistical Area Area Name Based On Persons / Bedroom 4-person AMGI IRS Section 42 Low-Income Housing Tax Credit (LIHTC) 2003 (effective as of 2/20/03) FL Monroe County (NONMETROPOLITAN AREA) 50% HUD Income limits 1.5 Person / Bedroom $56,500 Prlnt Page HUD Published Income Limits 30% 500/0 800/0 1 Person $11,850 $19,800 $31,650 2 Person $13,550 $22,600 $36,150 3 Person $15,250 $25,450 $40,700 4 Person $16,950 $28,250 $45,200 5 Person $18,300 $30,500 $48,800 6 Person $19,650 $32,750 $52,450 7 Person $21,000 $35,050 $56,050 8 Person $22,350 $37,300 $59,650 9 Person $23,750 $39,550 $63,300 10 Person $25,100 $41,800 $66,900 11 Person $26,450 $44,050 $70,500 12 Person $27,800 $46,350 $74,150 LIHTC Income ~jmits (Based On 50% HUD Published Income Limit) 60.00% 30.00% 35.00% 40.00% 50.000/0 1 Person 23,760 11,880 13,860 15,840 19,800 2 Person 27,120 13,560 15,820 18,080 22,600 3 Person 30,540 15,270 17,815 20,360 25,450 4 Person 33,900 16,950 19,775 22,600 28,250 5 Person 36,600 18,300 21,350 24,400 30,500 6 Person 39,300 19,650 22,925 26,200 32,750 7 Person 42,060 21,030 24,535 28,040 35,050 8 Person 44,760 22,380 26,110 29,840 37,300 9 Person 47,460 23,730 27,685 31,640 39,550 10 Person 50,160 25,080 29,260 33,440 41,800 11 Person 52,860 26,430 30,835 35,240 44,050 12 Person 55,620 27,810 32,445 37,080 46,350 LIHTC Rent Limits (Based On 50% HUD Published Income Limit) Bedrooms 60.00% 30.00% 35.00% 40.00% 50.00% (People) Efficiency (1.0) 594 297 346 396 495 1 Bedroom (1.5) 636 318 371 424 530 2 Bedrooms (3.0) 763 381 445 509 636 3 Bedrooms (4.5) 881 440 514 587 734 4 Bedrooms (6.0) 982 491 573 655 818 5 Bedrooms (7.5) 1,085 542 633 723 904 http://calc.novoco.comlrentincome/z4.jsp?useTwentyFifty=false&scenario 1 =30&scenari... 12/19/2003 " Rent Income Calculator Page2of2 IRS Revenue Ruling 89-24 and the IRS Audit Technique Guide (page 2-4) require that the low-income housing tax credit rent & income levels start their calculations with the HUD published 50% AMGI (very low-income) amounts because the HUD published 50% AMGI amounts include certain HUD adjustments using Fair Market Rents. These adjustments raise income limits and subsequently rent limits for areas where rental housing costs are unusually high in relation to the median income. The result is that many counties have 50% AMGI amounts that are greater than 50% of the true statistical AMGI published by HUD (the 4-person AMGI we have shown above). Our rent & income calculator starts by default with the HUD published 50% AMGI amounts in accordance with IRS Revenue Ruling 89-24. The rent limits shown above do not reflect the reduction necessary for utility allowances. The calculations also round down to the nearest whole dollar. Please note that although a particular county's four-person AMGI may have decreased from one year to the next, the 50% AMGI amount mayor may not decrease because HUD requires that in no instance are 50% AMGI amounts less than the state's non-metropolitan AMGl. This rent calculator does not calculate low-income housing tax credit income limits or rent limits greater than the 50% AMGI or 60% AMGI limits, depending on the minimum set-aside elected with the IRS on Form 8609 in accordance with Internal Revenue Code Section 42(i)(3)(A). In other words, if the 20/50 minimum set-aside was elected then 50% AMGI is the maximum allowed to qualify as a tax credit unit; or if the 40/60 minimum set-aside was elected then 60% AMGI is the maximum allowed to qualify as a tax credit unit. The rent & income limits are applicable beginning with the effective date shown above and are good for 45 days after the next effective date. In other words, there is a grace period of 45 days to implement the new rent & income limits. For more information, see Revenue Ruling 94-57. Before using these numbers, you should check with your state housing agency to make sure that these numbers agree with the numbers published by the state. 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