Special Purpose Meeting DATE: TIME: PLACE:
Tuesday, January 8, 2013 12:00 p.m. HFA Office 7855 NW 12 Street Suite 102 Doral, Florida 33126 AGENDA I.
Roll Call
II.
Requests A. Approval of Authorizing Resolution- Town Center Apartments-HFA Resolution HFA-2012-24 B. Approval of Authorizing Resolution-Town Center Apartments McKinney Funds Loan Documents-HFA Resolution HFA-2012-25 C. Approval of Final Credit Underwriting Report-Town Center
III.
Other Business 2013 HFA Board Retreat – Friday, January 25, 2013 9am-2pm at the Adrienne Arsht Performing Arts Center and we will meet in the Next Generation Green Room- located in the Ziff Ballet Opera House.
RESOLUTION NO. HFA-2012-24 RESOLUTION OF THE HOUSING FINANCE AUTHORITY OF MIAMI-DADE COUNTY (FLORIDA) AUTHORIZING THE ISSUANCE, SALE AND DELIVERY OF ITS MULTIFAMILY MORTGAGE REVENUE BONDS, SERIES 2013 (TOWN CENTER APARTMENTS) IN A TOTAL AMOUNT NOT TO EXCEED $9,680,000 IN ONE OR MORE SERIES, TAXABLE OR TAX-EXEMPT, FOR THE BENEFIT OF RUDG-TOWN CENTER, LLC, A FLORIDA LIMITED LIABILITY COMPANY, TO PROVIDE FINANCING FOR THE ACQUISITION, CONSTRUCTION AND EQUIPPING OF A MULTIFAMILY HOUSING PROJECT KNOWN AS TOWN CENTER APARTMENTS; APPROVING THE FORM OF AND AUTHORIZING THE EXECUTION AND DELIVERY OF THE TRUST INDENTURE, LOAN AGREEMENT, LAND USE RESTRICTION AGREEMENT, AND OTHER DOCUMENTS IN CONNECTION WITH THE ISSUANCE AND DELIVERY OF THE BONDS; AUTHORIZING THE NEGOTIATED SALE OF THE BONDS; AUTHORIZING THE APPOINTMENT OF A TRUSTEE; RATIFYING PUBLICATION OF A TEFRA NOTICE AND HOLDING OF A TEFRA HEARING AND PROVIDING FOR AN EFFECTIVE DATE. WHEREAS, pursuant to the Housing Finance Authority Law, Chapter 159, Part IV, Florida Statutes, as amended (the "Act"), the Board of County Commissioners of Miami-Dade County, Florida (the "Board"), by its Resolution R-1194-78, adopted October 17, 1978, declared the need for a housing finance authority to function in Miami-Dade County, Florida (the "County") and enacted on December 12, 1978, Ordinance No. 78-79, creating the Housing Finance Authority of Miami-Dade County (Florida) (the "Authority"), as amended by Ordinance No. 11-99 adopted December 6, 2011; and WHEREAS, the Act authorizes the Authority: (a) to make loans to any person, or to purchase loans, including federally insured mortgage loans, in order to provide financing for residential rental developments located within the County, which are to be occupied by persons of moderate, middle or lesser income; (b) to issue its revenue bonds and notes pursuant to the Act, for the purpose of obtaining money to make or to purchase such loans and
1
provide such financing, to establish necessary reserve funds and to pay administrative costs and other costs incurred in connection with the issuance of such bonds and notes; and (c) to pledge all or any part of the revenues and receipts to be received by the Authority from or in connection with such loans, and to mortgage, pledge or grant security interests in such loans in order to secure the payment of the principal or redemption price of and interest on such bonds and notes; and WHEREAS, pursuant to Resolution No. HFA 2012-05 adopted May 21, 2012 (the "Intent Resolution"), the Authority expressed its intent to provide financing to fund a mortgage loan (the "Loan") financed by obligations of the Authority in an amount not to exceed $8,800,000 to RUDG-Town Center, LLC, a Florida limited liability company (the "Borrower") for the acquisition and construction of a 127-unit multifamily residential rental development (the "Project") to be located at 551 Fisherman Street, Opa Locka, Miami-Dade County, Florida, and to be occupied by persons of moderate, middle and lesser income within the meaning of the Act, all for the purpose of assisting such persons of moderate, middle and lesser income within the County to afford the costs of decent, safe and sanitary housing; and WHEREAS, the Authority deemed it necessary to cause the publication on April 26, 2012, of a Notice of Public Hearing for the Project (a copy of said notice is attached hereto as Exhibit D and incorporated herein), for the purpose of considering the issuance of the Bonds (defined below) by the Authority, in conformance with the requirements of the Tax Equity and Fiscal Responsibility Act of 1982 ("TEFRA") and Section 147(f) of the Internal Revenue Code of 1986, as amended (the “Code”), and such public hearing, conducted on May 11, 2012 pursuant to such Notice, disclosed no reason why the Bonds should not be issued; and
2
WHEREAS, the Borrower has now advised the Authority that Project costs have increased and an amount in excess of $8,800,000 will be required to finance the Project; and WHEREAS, the Code permits the issuance of bonds in an amount not to exceed ten percent (10%) more than the principal amount authorized by the TEFRA approval, the Authority has determined to issue, sell and deliver the Bonds in an amount not to exceed $9,680,000 for the purpose of funding the Loan; and WHEREAS, the Authority has determined that there exists a shortage of safe and sanitary housing for persons and families of moderate middle and lesser income within MiamiDade County, Florida; and WHEREAS, the Authority has determined that a negotiated sale of the Bonds is in the best interest of the Authority; and WHEREAS, Banc of America Public Capital Corp. or an affiliate thereof (the "Purchaser") has expressed its intention to purchase the Bonds authorized hereby in whole, and the Authority finds that the public interest and necessity require that the Authority at this time make arrangements for the sale of such Bonds. NOW, THEREFORE, BE IT RESOLVED by the Housing Finance Authority of MiamiDade County (Florida), as follows: SECTION 1.
The recitals hereinabove set forth are true and correct, and the
Authority so finds. This Resolution is being adopted pursuant to the Act. SECTION 2.
Pursuant to the Act and in accordance with the Act and the Trust
Indenture (as hereinafter defined), bonds of the Authority, to be designated as "Housing Finance Authority of Miami-Dade County (Florida) Multifamily Mortgage Revenue Bonds,
3
Series 2013 (Town Center Apartments)" in an aggregate principal amount not to exceed $9,680,000 (the "Bonds"), are hereby authorized to be issued. The principal amount of the Bonds to be issued shall be determined by a Designated Officer (as defined below) in accordance with this Resolution. SECTION 3.
The proposed form of Trust Indenture (the "Trust Indenture"), by and
between the Authority and The Bank of New York Mellon Trust Company, N.A. as Trustee (the "Trustee"), substantially in the form attached hereto as Exhibit A, is hereby approved along with any additions or supplements which may in the determination of a Designated Officer, be necessary to document the issuance of the Bonds authorized hereunder.
The
Chairman, Vice Chairman, or any other officers or members of the Authority (each hereinafter referred to as a "Designated Officer") are hereby authorized and directed to execute and deliver, for and in the name and on behalf of the Authority, said Trust Indenture with such additions, changes or corrections as the Designated Officer executing the same may approve upon consultation with the County Attorney, Financial Advisor to the Authority and Co-Bond Counsel to the Authority and approval of the County Attorney, provided that such additions or changes shall comply with the parameters relating to principal amount, interest rate and maturity date set forth in Section 5 below, such approval by the County Attorney to be conclusively evidenced by the execution and delivery of the Trust Indenture by a Designated Officer with such additions, changes or corrections. SECTION 4.
The proposed form of Loan Agreement (the "Loan Agreement"), by
and between the Authority and the Borrower, in substantially the form attached hereto as
4
Exhibit B, is hereby approved. Any Designated Officer is hereby authorized and directed, for and in the name and on behalf of the Authority, to execute the Loan Agreement, with such additions, changes or corrections as the Designated Officer executing the same may approve upon consultation with the County Attorney, Financial Advisor and Co-Bond Counsel and approval by the County Attorney, such approval to be conclusively evidenced by the execution of said Loan Agreement by a Designated Officer with such additions, changes or corrections. SECTION 5.
The proposed form of the Bonds, as set forth in the Trust Indenture,
is hereby approved, and the Chairman and Vice-Chairman or member of the Authority designated by the Chairman are hereby authorized and directed to execute, by manual or facsimile signatures of such officers under the seal of the Authority, and the Trustee or an authenticating agent is hereby authorized and directed to authenticate, by manual signatures of one or more authorized officers of the Trustee or an authenticating agent, the Bonds in substantially such form, and the Trustee is hereby authorized and directed to deliver the Bonds to the Purchaser in accordance with the Trust Indenture and upon receipt of the purchase price therefor. The date, maturity dates, interest rate or rates (which may be either fixed or variable), interest payment dates, denomination, form of registration privileges, manner of execution, place of payment, terms of redemption, use of proceeds, and other terms of the Bonds shall be as provided in the Trust Indenture as finally executed; provided, however, that the principal amount of the Bonds shall not exceed $9,680,000, the interest rate on the Bonds shall not exceed a maximum rate of 8.00% per annum and the final maturity of the Bonds shall be no later than January 1, 2048. The initial purchase price of the Bonds shall be 100% of the principal amount thereof to be paid as advances are made with respect to the Bonds by the Purchaser. Such
5
Bonds may be delivered in temporary form pursuant to the Trust Indenture if, in the judgment of Co-Bond Counsel, delivery in such form is necessary or appropriate until the Bonds in definitive form can be prepared. SECTION 6.
The proposed form of Land Use Restriction Agreement (the
"Regulatory Agreement") to be entered into by and among the Authority, the Trustee and the Borrower, substantially in the form attached hereto as Exhibit C, is hereby approved. Any Designated Officer is hereby authorized and directed, for and in the name and on behalf of the Authority, to execute and deliver the Regulatory Agreement, with such additions, changes and corrections as the Designated Officer may approve upon consultation with the County Attorney, the Financial Advisor and Co-Bond Counsel and approval of the County Attorney, such approval to be conclusively evidenced by the execution by a Designated Officer of said Regulatory Agreement with such additions, changes or corrections. Any Designated Officer is hereby authorized and directed for and in the name and on behalf of the Authority to execute amendments to the Regulatory Agreement in order that interest on the Bonds remains taxexempt for federal income tax purposes. SECTION 7.
All actions heretofore taken by the officers and agents of the
Authority with respect to the sale and issuance of the Bonds are hereby approved, confirmed and ratified, and each Designated Officer, the Director and other properly authorized officers of the Authority are hereby authorized and directed, for and in the name and on behalf of the Authority, to do any and all things and take any and all actions and execute and deliver any and all certificates, agreements and other documents, including, but not limited to, those described in the Trust Indenture, the Loan Agreement, the Bonds, the Regulatory Agreement
6
(collectively, the "Bond Documents") and the other documents herein approved, which they, or any of them, may deem necessary or advisable in order to consummate the lawful issuance and delivery of the Bonds and the implementation of the loan program described herein in accordance with the Act and this Resolution and resolutions heretofore adopted by the Authority. SECTION 8.
Any Designated Officer is hereby authorized to countersign or to
attest the signature of any other Designated Officer and to affix and attest the seal of the Authority as may be appropriate in connection with the execution and delivery of any of the documents authorized by this resolution, provided that the due execution and delivery of said documents or any of them shall not depend on such attestation of the Designated Officer or the affixing of such seal. Any of such documents may be executed in multiple counterparts. SECTION 9.
A negotiated sale of the Bonds is in the best interest of the Authority
and is found to be necessary on the basis of the following specific findings: (a)
Multifamily housing revenue bonds and notes are traditionally sold on a
negotiated sale basis and consequently a competitive sale of the Bonds would in all probability not produce better terms than a negotiated sale, particularly in view of the timing of such an offering. (b)
The principal of, premium, if any, and the interest on the Bonds will be payable
solely out of the revenues arising from the pledge and assignment of the payments by the Borrower on the Loan, and the other funds and moneys pledged and assigned under the Trust Indenture, and therefore the Authority will not be liable for the payment of principal of, redemption premium, if any, and any interest on the Bonds except from moneys held under
7
the Trust Indenture. The Borrower has expressed its unwillingness to undertake the risks and expenses attendant to competitive sale of the Bonds. (c)
The nature of the security for the payment of the Bonds requires complex cash
flow review and computations of the Project which would be financially impractical for bidders to undertake in a competitive sale context. (d)
Based upon such findings, the Authority approves the negotiated sale of the
Bonds to the Purchaser in accordance with the provisions of the Trust Indenture and Section 5 of this Resolution. Prior to executing and delivering the Trust Indenture, the Authority shall have received a statement from the Purchaser setting forth the information required by Section 218.385, Florida Statutes, as amended. SECTION 10.
The Bank of New York Mellon Trust Company, N.A., is hereby
designated as Trustee for the Bonds under the Trust Indenture and the Regulatory Agreement. SECTION 11.
The Bonds, upon their execution in the form and manner set forth in
the Trust Indenture, shall be delivered to the Trustee for authentication and the Trustee is authorized and directed to authenticate and deliver the Bonds to, or on behalf of, the Purchaser, upon payment of the purchase price. SECTION 12.
The publication on April 26, 2012 of the Notice of Public Hearing for
purposes of TEFRA is hereby ratified and conducting by the staff of the Authority, on behalf of the Authority, of the TEFRA hearing regarding the issuance of the Bonds as required by Section 147(f) of the Code on May 11, 2012, is hereby ratified. The staff of the Authority has made a report to the Board of County Commissioners of Miami-Dade County of the public hearing.
The Board of County Commissioners of Miami-Dade County on June 5, 2012
8
approved the issuance of the Bonds by the Authority to finance the Project for purposes of Section 147(f) of the Code, which resolution became effective on June 15, 2012. SECTION 13.
The Designated Officers, Director, employees and agents of the
Authority are authorized and directed to do all acts and things required by the provisions of the Bonds authorized by this Resolution, and by the provisions of the Bond Documents and any additional documents required to be delivered in connection with the issuance and delivery of the Bonds and for the full, punctual and complete performance of all the terms, covenants, provisions and agreements of the Bonds and the Bond Documents. SECTION 14.
In case any one or more of the provisions of this Resolution shall for
any reason be held to be illegal or invalid, such illegality or invalidity shall not affect any other provision of this Resolution and it shall be construed and enforced as if such illegal or invalid provision had not been contained in this Resolution. SECTION 15.
The Chairman, Vice Chairman, and other members or officers of the
Authority, the Director, the County Attorney and Co-Bond Counsel for the Authority are each designated agents of the Authority in connection with the issuance and delivery of the Bonds, and are authorized and empowered, collectively or individually, to take all actions and steps to execute and deliver any and all instruments, documents or contracts on behalf of the Authority which are necessary or desirable in connection with the execution and delivery of the Bonds which are not inconsistent with the terms and provisions of this Resolution and other actions relating to the Bonds taken by the Authority. SECTION 16.
All resolutions of the Authority in conflict with the provisions of this
Resolution are, to the extent of such conflict, superseded and repealed.
9
SECTION 17.
The Authority has no jurisdiction regarding zoning and land use
matters and the adoption of this Resolution is not intended to express any position or opinion regarding same. SECTION 18.
It is found and determined that all formal actions of this Authority
concerning and relating to the adoption of this Resolution were taken in an open meeting of the members of this Authority and that all deliberations of the members of this Authority and of its committees, if any, which resulted in such formal action were taken in meetings open to the public, in full compliance with all legal requirements. SECTION 19.
This Resolution shall become effective immediately upon its
adoption. The roll being called on the question of adoption of this Resolution, the final vote is: AYES:
______
NAYS:
______
ABSTENTIONS:
______
The Presiding Officer declared said resolution adopted and approved in open meeting.
[Remainder of page intentionally left blank]
10
ADOPTED this 20th day of December, 2012. [SEAL] HOUSING FINANCE AUTHORITY OF MIAMI-DADE COUNTY (FLORIDA)
Attest:
By: _______________________________ Name: _____________________________ Title: ______________________________
By: ________________________________ Vice Chairman or Secretary/Treasurer
Approved as to form and legal sufficiency.
By: _______________________________ Assistant County Attorney
11
EXHIBIT "A" Form of Trust Indenture
EXHIBIT "B" Form of Loan Agreement
EXHIBIT "C" Form of Regulatory Agreement
EXHIBIT "D" Publisher's Affidavit re: Notice of Public Meeting (TEFRA)
RESOLUTION NO. HFA-2012-25 A RESOLUTION OF THE HOUSING FINANCE AUTHORITY OF MIAMIDADE COUNTY (FLORIDA) APPROVING A MCKINNEY ACT LOAN IN THE AMOUNT OF $500,000 FROM THE AUTHORITY TO RUDG-TOWN CENTER LLC AND FORM OF RELATED LOAN DOCUMENTS; AUTHORIZING EXECUTION AND DELIVERY OF SUCH DOCUMENTS; AUTHORIZING AUTHORITY OFFICIALS TO TAKE ALL NECESSARY ACTIONS IN CONNECTION WITH THE LOAN; AND PROVIDING AN EFFECTIVE DATE WHEREAS, pursuant to Resolution R-1194-78 of the Board of County Commissioners of Miami-Dade County and Ordinance No. 78-89, enacted on December 12, 1978, as amended by Ordinance No. 11-99, enacted December 6, 2011, by the Board of County Commissioners of Miami-Dade County, Florida and in accordance with the Florida Housing Finance Authority Law, Part IV, Chapter 159, Florida Statutes, as amended and supplemented from time to time (the "Act"), the Authority is authorized to make loans to provide financing for multifamily residential housing located within its jurisdiction to be occupied by persons of low and moderate incomes; and WHEREAS, RUDG-Town Center, LLC (the “Borrower”) was selected by the Authority pursuant to a Request for Qualifications to receive a loan in the amount of $500,000 from McKinney Act funds available to the Authority (the “Loan”) to supplement other revenues on a subordinate basis to fund the acquisition, construction, development and equipping of a one hundred twenty-four (124) unit affordable multifamily residential project located at 551 Fisherman Street, Opa-Locka, Florida, to be known as the Town Center Apartments (the "Project"); and WHEREAS, the Borrower’s repayment obligations are evidenced by a loan agreement between the Authority and the Borrower, a subordinate promissory note from the Borrower, a
subordinate mortgage and a rental regulatory agreement (collectively, the “Loan Documents”); and WHEREAS, the Authority’s lien on the Project will be subordinate to four other mortgages securing other revenue sources that are being used to fund the Project; and WHEREAS, the Authority wishes to approve the Loan and the form of the related Loan Documents and to authorize the execution and delivery of the Loan Documents, NOW, THEREFORE, BE IT RESOLVED BY THE HOUSING FINANCE AUTHORITY OF MIAMI-DADE (FLORIDA) THAT: Section 1.
The foregoing recitals are incorporated in this Resolution and are
approved. Section 2.
The Authority approves the Loan to the Borrower upon the terms and
conditions set forth in the Loan Documents. Section 3.
The Authority approves (i) the Loan Agreement in substantially the form
attached as Exhibit “A” to this Resolution; (ii) the Promissory Note in substantially the form attached as Exhibit “B” to this Resolution; (iii) the Mortgage and Security and Assignment of Leases, Rents and Profits in substantially the form attached as Exhibit “C” to this Resolution; and (iv) the Rental Regulatory Agreement in substantially the form attached as Exhibit “D” to this Resolution and authorizes their execution by the Chairman, Vice Chairman or any Authority member, if the Chairperson and Vice Chairperson are not available, on behalf of the Authority, with such changes or amendments consistent with this Resolution after consultation with the Miami-Dade County Attorney’s office. Section 4.
The Chairperson, Vice Chairperson, the Executive Director of the
Authority and the Authority’s other members and employees are authorized and directed to do all
acts and things and to execute and deliver any and all agreements, documents and certificates which they deem necessary or advisable in order to consummate the Loan, and otherwise to carry out, give effect to and comply with the terms and intent of this Resolution and the Loan Documents. Section 5.
This Resolution shall become effective immediately upon its adoption.
The roll being called on the question of adoption of the Resolution, the vote on the question was as follows: AYES: NAYS: ABSTENTIONS: The Presiding Officer declared said Resolution adopted and approved in open meeting. ADOPTED, this 3rd day of December 2012.
[SEAL]
Attest: __________________________ Assistant Secretary
Approved as to form and legal sufficiency. _________________________ Assistant County Attorney
HOUSING FINANCE AUTHORITY OF MIAMI-DADE COUNTY (FLORIDA)
By:___________________________ Chairperson
EXHIBIT A LOAN AGREEMENT
EXHIBIT B PROMISSORY NOTE
EXHIBIT C MORTGAGE AND SECURITY AND ASSIGNMENT OF LEASES, RENTS AND PROFITS
EXHIBIT D RENTAL REGULATORY AGREEMENT
100 SECOND AVENUE SOUTH, SUITE 903 ST. PETERSBURG, FLORIDA 33701 TEL: (727) 822-3339 | FAX: (727) 822-3502
PUBLIC RESOURCES ADVISORY GROUP
TO:
HOUSING FINANCE AUTHORITY OF MIAMI-DADE COUNTY, FL
FROM:
PUBLIC RESOURCES ADVISORY GROUP
RE:
TOWN CENTER APARTMENTS: CREDIT UNDERWRITING REPORT
DATE:
DECEMBER 14, 2012
Background Town Center Apartments will be constructed on a 1.787 acre site in the City of Opa-Locka in Miami Dade County, Florida. The development will consist of 127 units in a seven story residential building. The Town Center Apartments development is the first new project in the City of Opa-Locka’s Downtown District. Town Center is being developed as a Transit Oriented Development under the City of Opa-Locka’s Transit Oriented Development Overlay. The Applicant has agreed to reserve all units for persons at or below 50% of adjusted median income. This satisfies the requirements for NSP2, NSP3, the McKinney Loan and the FHLB Loan. Credit Underwriting Report--Background The Authority requires a credit underwriting review (CUR) for each development financed with Authority bonds. The Developer is required to submit an application to a credit underwriter for preliminary review. As stated in the Multifamily Application, “General Sequence of Application and Approval Process”: …This preliminary review will address the ability of the Developer to complete the financing in the applicable time frame, as well as the economic feasibility of the Development. …Upon receipt by the financial advisor of the credit underwriting report indicating the feasibility of the Development, the following actions will occur: (1) HFA staff will request that the County's Bond Counsel Committee assign counsel to the transaction; and (2) the financial advisor will review the financing plan submitted by the applicant. At the first HFA meeting which is at least twenty-one (21) days after delivery of the credit underwriting report, the Financial Advisor will provide a report to the HFA Board with a recommendation. The HFA Board will consider approval of the financing plan after presentation of the Financial Advisor's report. The Authority’s CURs are prepared by the same firms that provide this service to the Florida Housing Finance Corporation (FHFC), and those firms have been instructed to utilize the underwriting criteria established by FHFC.
:
INDEPENDENT FINANCIAL ADVISORS
.
Financing Structure The construction of the Apartments is being funded from the following sources.
Source
Lender
1st Mortgage Tax-Exempt Bonds 2nd Mortgage NSP 3 3rd Mortgage NSP 2 th 4 Mortgage McKinney Funds 5th Mortgage FHL Bank Housing Credit Equity Deferred Developer Fee
Construction
Permanent
Perm Loan/Unit
Bank of America
$9,680,000
$2,500,000
$19,685
MDHFA
5,324,133
7,739,688
60,942
Community Fund
1,000,000
1,000,000
7,874
MDHFA
500,000
500,000
3,937
FHLB Atlanta
500,000
500,000
3,937
3,232,861
6,295,247
49,569
0
1,702,059
13,402
$20,236,994
$20,236,994
$159,346
Raymond James Tax Credit Funds Developers
Total
Bank of America purchased the bonds through a private placement. The initial amount of debt will be $9,680,000; the loan will be reduced to $2,250,000 when converted to permanent financing. The housing credit equity is being provided by Raymond James Tax Credit Funds (“RJTCF”) according to the schedule shown below. RJTCF has agreed to pay $0.99 per tax credit dollar. Installment 1 2 3 4 5 6 Total
Amount $944,287 200,000 944,287 200,000 944,287 3,062,386 $6,295,247
% 15 3 15 3 15 49 100
Partnership Closing Upon 25% completion or February 1, 2013 Upon 50% completion or May 1, 2013 Upon 75% completion or August 1, 2013 Upon 98% completion or September 30, 2013 Upon stabilized operations or August 1, 2014
Credit Underwriting Report The CUR provided by First Housing Development Corporation (“First Housing”) has identified the following special conditions: 1.
Funding of all reserves as contemplated in the credit underwriting report.
2. Receipt of City Approval to reduce the parking requirements from 0.8 to 0.5 parking spaces per unit. The plans indicate 79 parking spaces or 0.64 spaces per unit. Upon approval, this requirement will be less than the number of spaces actually provided.
-2-
3. Bank of America to purchase up to $9,680,000 in bonds in a private placement with the terms and conditions as stated in the letter of interest reviewed by the credit underwriter. 4. Verification that the terms of the FHLB Atlanta loan are in accordance with the assumptions of this credit underwriting report. 5. The underwriter recommends that all clarifications be provided and a final revised PCA be received before closing. 6. Environmental Insurance Policy satisfactory to HFAMD in form and substance. 7. Any other reasonable conditions established by HFAMD and/or its Legal Counsel.
The underwriter recommends that all clarifications be provided and a final revised PCA be received before closing. In addition, the General Conditions set forth in the CUR must be met.
Recommendation We recommend approval of the financing plan subject to the General and Special Conditions outlined in the credit underwriting report. We further recommend that the credit underwriter, First Housing, be retained to confirm that all closing conditions have been met.
Attachment Credit Underwriting Report
-3-
Housing Finance Authority of Miami-Dade County Credit Underwriting Report
County Tax-Exempt Bonds
Town Center Apartments
Section A: Report Summary Section B: Bond Program Loan Conditions Section C: Supporting Information and Schedules
Prepared by First Housing Development Corporation of Florida Final Report December 17, 2012
FHDC
Town Center Apartments TABLE OF CONTENTS Page Section A Report Summary Recommendation
A1-A5
Overview
A6-A9
Uses of Funds
A10-A13
Operating Pro Forma
A14-A15 Section B
Bond Program Loan Conditions
B1-B6 Section C
Supporting Information & Schedules Additional Development & Third Party Information Applicant Information Syndication Information General Contractor Information Property Management Information
C1-C3 C4-C6 C7 C8-C9 C10 Exhibits
15 Year Pro Forma
1
December 17, 2012
FHDC
Section A Report Summary
December 17, 2012
COUNTY TAX-EXEMPT BONDS HC CREDIT UNDERWRITING REPORT
FHDC
Recommendation RUDG-Town Center, LLC (“Applicant”) has applied for $9,680,000 Multifamily Mortgage Revenue Bonds (“Bonds”) to finance the construction and permanent financing of Town Center Apartments. First Housing recommends a total Bond amount of $9,680,000 be awarded to this development for its construction and permanent financing. DEVELOPMENT & SET-ASIDES Development Name: Town Center Apartments Address: 551 Fisherman Street
City:
County: Miami-Dade
Zip Code: 33054
County Size: Large
Development Category: New Construction Construction Type:
Opa-Locka
Development Type:
Highrise
auger-cast piles, concrete pile caps and superstructure
Demographic Commitment: Elderly: Yes Farmwork or Commercial Fish Worker: No
Homeless: No Family: No
AMI%
CU Rents
Annual Rental Income
1
1.0
122
576
50%
$615
$0
$0
$78
$0
$537
$537
$537
$537
$786,168
2
1.0
5
864
50%
$738
$0
$0
$99
$0
$639
$639
$639
$639
Square Feet
High HOME Rents
Utility Allow
AMI
Units@ Units
Gross HC Rent
Bed Bath Rooms Rooms Units
Low HOME Rents
ELI: Link:
RD/HUD Cont Net HC Applicant Appraiser Rent Rents Rents Rents
127
$1,176
Buildings: Residential Parking: Parking Spaces Set Asides:
Absorption Rate
Program Tax-Exempt Bonds NSP
79 % of Units 100% 100%
Non-Residential - N/A Accessible Spaces - 3 # of Units 127 127
20 units per month for
Occupancy Rate at Stabilization: Site Acreage: Zoning:
1
$38,340 $824,508
% AMI 60% 50%
Term (Years) 30 40
6 months.
Physical Occupancy 95.00% Economic Occupancy Occupancy Comments N/A (New Construction)
Density: 71.07 1.787 B-2, Liberal Business, Opa-Locka
Town Center Apartments
Flood Zone Designation: Flood Insurance Required?:
95.00% X No
PAGE A-1 December 17, 2012
COUNTY TAX-EXEMPT BONDS HC CREDIT UNDERWRITING REPORT
FHDC
DEVELOPMENT TEAM General Partner 1: Li mi ted Partner 1: Constructi on Compl eti on Guarantor(s):
Pvt Pl acement Purchaser: Devel oper: Pri nci pal 1 Pri nci pal 2 General Contractor 1: Management Company: Bond Purchaser Syndi cator: Bond Issuer: Market Study Provi der: Apprai ser:
RUDG-Town Center, LLC RUDG-Town Center Manager, LLC Raymond James Tax Credi t Funds, Inc. Dec-13 RUDG-Town Center, LLC RUDG-Town Center Manager, LLC PRH Investments, LLC The Urban Devel opment Group, LLC Bank of Ameri ca, N.A. ("BANA") RUDG-Town Center Devel oper, LLC Al berto Mi l o, Jr. Jorge M. Perez Fortune Constructi on Company, Partnershi p TRG Management Company of Fl ori da Bank of Ameri ca Merri l l Lynch Raymond James Tax Credi t Funds, Inc. HFA of Mi ami -Dade County Cl obus, McLemore & Duke, Inc. Cl obus, McLemore & Duke, Inc.
0.0100% 99.9900%
PERMANENT FINANCING INFORMATION Lien Position Lender/Grantor Amount
1st Source 2nd Source 3rd Source 4th Source 5th Source First Second Third Fourth Fifth Housing Financ Miami-Dade Community HFAMD Opa-Locka CDC $2,500,000 $7,739,688 $1,000,000 $500,000 $500,000
Underwritten Interest Rate
5.59%
0.50%
0.50%
1.00%
0.00%
5.59% 17.00 30.00
0.50% 30.00 0.00
0.50% 30.00 30.00
1.00% 40.00 0.00
0.00% 30.00 0.00
Market Rate/Market Financing LTV
36.93%
151.25%
166.02%
173.41%
180.79%
Restricted Market Financing LTV
20.17%
82.61%
90.68%
94.71%
98.75%
All In Interest Rate Loan Term Amortization
Loan to Cost
48%
Debt Service Coverage
74% 1.10
Deferred Devel oper Fee Land Val ue Market Rent/Market Fi nanci ng Stabi l i zed Val ue Rent Restri cted Market Fi nanci ng Stabl i zed Val ue Projected Net Operati ng Income (NOI) - Year 1 Projected Net Operati ng Income (NOI) - 15 Year Year 15 Pro Forma Income Escal ati on Rate Year 15 Pro Forma Expense Escal ati on Rate Bond Structure Housi ng Credi t Syndi cati on Pri ce Housi ng Credi t Annual Al l ocati on
0.90
79%
82% 0.77
84% 0.75
0.76
$1,702,059 $2,540,000 $6,770,000 $12,395,000 $190,081 $142,304 2.00% 3.00% Private Placement $0.99 $636,010.74
Town Center Apartments
PAGE A-2 December 17, 2012
COUNTY TAX-EXEMPT BONDS HC CREDIT UNDERWRITING REPORT
FHDC
CONSTRUCTION/PERMANENT SOURCES: Source First Second Third Fourth Fifth Housing Credit Equity Deferred Developer TOTAL
Lender Housing Finance Authority Miami-Dade County NSP3 Community Fund NSP2 HFAMD - McKinney Funds Opa-Locka CDC AHP Funding Raymond James Tax Credit RUDG-Town Center
Construction $9,680,000 $5,324,133 $1,000,000 $500,000 $500,000 $3,232,861 $0 $20,236,994
Permanent $2,500,000 $7,739,688 $1,000,000 $500,000 $500,000 $6,295,247 $1,702,059 $20,236,994
Perm Loan/Unit $19,685 $60,942 $7,874 $3,937 $3,937 $49,569 $13,402 $159,346
Strengths:
1. Based on a Draft Market Study of the subject development dated June 26, 2012 (Report Date), prepared by Clobus, McLemore & Duke, Inc. (“CMD”), the subject site is physically and legally well suited for multi-family/senior development. The neighborhood provides all necessary support services for successful multi-family/senior development. 2. Occupancy rates within senior developments within the County PMA Submarket have also fluctuated with a weighted occupancy rate of 96.7%. 3. Demographic analysis indicates a significant pool of potential tenants with strong employment and household growth over the next five years. Historical and current absorption has significantly outpaced demographic projections. An absorption rate for the subject of 20 units per month is projected. 4. The proposed subject will enhance the compliment surrounding uses within the neighborhood and will serve to enhance the subject’s overall neighborhood. The location is well suited for residential use. The proposed subject will complement the existing surrounding uses within the neighborhood and will serve to enhance the subject’s overall appeal. The location is well suited for residential use. 5. The Principals and Development Team, as well as the General Contractor, and Management Group are experienced in this field. 6. The Principals and Guarantors have sufficient experience and substantial financial resources to develop, construct, and operate the proposed development.
Town Center Apartments
PAGE A-3 December 17, 2012
COUNTY TAX-EXEMPT BONDS HC CREDIT UNDERWRITING REPORT
FHDC
Other Considerations: 1. The plans indicate 79 parking spaces or 0.64 spaces per unit. According to the City of Opa-Locka, parking requirements for elderly units are 0.80 spaces per unit. The Developer indicates that they are in the process of getting the City to approve 0.50 spaces per unit. Upon approval, this requirement will be less than the number of spaces actually provided. Additional Information: 1. The underwriter recommends that all clarifications be provided and a final revised PCA be received before closing. Recommendation: First Housing recommends Multifamily Mortgage Revenue Bonds (“Bonds”) in the amount of $9,680,000 to finance the subject development. This recommendation is based upon the assumptions detailed in the Report Summary (Section A), and Supporting Information and Schedules (Section B). This recommendation is only valid for six months from the date of the report. The reader is cautioned to refer to these sections for complete information.
Prepared by:
Thais Pepe Senior Credit Underwriter
Reviewed by:
Ed Busansky Senior Vice President
Town Center Apartments
PAGE A-4 December 17, 2012
COUNTY TAX-EXEMPT BONDS HC CREDIT UNDERWRITING REPORT
FHDC
Construction Financing Sources: Construction Sources
Lender
Application
Underwriter
Construction Interest Rate
Annual Construction Debt Service
Tax Exempt Bonds
Housing Finance Authority
$9,680,000
$9,680,000
2.96%
$286,528
Second Mortgage
Miami-Dade County NSP3
$7,739,688
$5,324,133
0.50%
$26,621
Third Mortgage
Community Fund NSP2
$1,000,000
$1,000,000
0.00%
$0
Fourth Mortgage
HFAMD - McKinney Funds
$500,000
$500,000
0.00%
$0
Fifth Mortgage
Opa-Locka CDC AHP Funding
$500,000
$500,000
0.00%
$0
Housing Credit Equity
Raymond James Tax Credit Funds, Inc.
$7,161,021
$3,232,861
N/A
N/A
Deferred Developer Fee
RUDG-Town Center Developer, LLC
$1,114,840
$0
N/A
N/A
$27,695,549
$20,236,994
Total
$313,149
Tax Exempt Bonds: First Housing reviewed Resolution no. HFA 2012-05, executed on May 21, 2012, which expressed the intent of the Housing Finance authority of Miami-Dade County (Florida) to proceed with the development of a multifamily rental housing project and the financing thereof through the issuance of its not to exceed $9,680,000 Multifamily Mortgage Revenue Bonds for the benefit of RUDG – Town Center, LLC. The Bonds are expected to be for a term of 17 years amortized over 30 years, with interest only payments during construction based on LIBOR plus 275 basis points. The Bonds will be privately placed with Bank of America, N.A. (“BANA”). According to the BANA letter of intent, during the construction loan period, BANA will purchase no more than $8,800,000 in floating rate bonds. The Developer informed that BANA will increase this maximum to $9,680,000 with no changes to the terms. The underwriter’s recommendation is based on the assumption that BANA will purchase a total of $9,680,000. Receipt of an updated letter of interest from BANA is a condition to the recommendation in this credit underwriting report. Second Mortgage: First Housing reviewed a Neighborhood Stabilization Program 3 (NSP3) Affordable Housing Funding Agreement between Miami-Dade County and RUDG-Town Center, LLC, executed on May 1, 2012. Based on this document, the County has appropriated up to $7,739,688 of NSP3 funds to the subject development. Based on the Developer, terms of these funds will be for 30 years with 0.5% interest and no amortization. Verification that the terms of these funds are in accordance with the assumptions of this credit underwriting report is a condition to the recommendation herein. Third Mortgage: Based on the Developer, an NSP2 fund in the amount of $1,000,000 is expected to be approved. This fund is supposed to have a term of 30 year and interest rate of 0% during construction. Town Center Apartments
PAGE A-5 December 17, 2012
COUNTY TAX-EXEMPT BONDS HC CREDIT UNDERWRITING REPORT
FHDC
Verification that the terms of these funds are in accordance with the assumptions of this credit underwriting report is a condition to the recommendation herein. Fourth Mortgage: The underwriter reviewed a letter from Housing Finance Authority of Miami-Dade County, dated June 21, 2012, which set forth the terms and conditions of the $500,000 McKinney Act Funds award for the subject development. Based on this letter, the funds will mature in 40 years with interest rate of 1% per annum, subject to available cash flow. Principal will be due at maturity if the affordability covenants (to be defined in the related loan documents) are not breached. Verification that the terms of these funds are in accordance with the assumptions of this credit underwriting report is a condition to the recommendation herein. Fifth Mortgage: The underwriter reviewed a letter from FHL Bank Atlanta, dated November 1, 2012, which indicates the subject development has been approved for an Affordable Housing Program award of $500,000. Based on the Developer, the terms of these funds are interest rate of 0%, 30 year term with a 30 years amortization based on cash flow availability. Verification that the terms of these funds are in accordance with the assumptions of this credit underwriting report is a condition to the recommendation herein. Housing Credit Equity: The underwriter reviewed a Letter of Intent from Raymond James Tax Credit Funds, Inc. (“RJTCF”), dated July 2, 2012, in which RJTCF or an affiliate will acquire 99.98% interest in the applicant entity. RJTCF will pay $0.99 per tax credit dollar for a total contribution of $6,295,247 paid in six installments, of which five installments for a total of $3,232,861 or 51% will be available during construction. Deferred Developer Fee: In order to balance the sources and uses of funds during construction, the Developer must defer $0 or 0% of total Developer Fee during construction.
Town Center Apartments
PAGE A-6 December 17, 2012
COUNTY TAX-EXEMPT BONDS HC CREDIT UNDERWRITING REPORT
FHDC
Permanent Financing Sources: Permanent Sources
Lender
Application
Underwriter
Term Yrs.
Amort. Yrs.
Interest Rate
Annual Debt Service $172,035
Tax Exempt Bonds
Housing Finance Authority
$2,700,000
$2,500,000
$17
$30
5.59%
Second Mortgage
Miami-Dade County NSP3
$7,739,688
$7,739,688
$30
$0
0.50%
$38,698
Third Mortgage
Community Fund NSP2
$1,000,000
$1,000,000
$30
$30
0.50%
$35,903
Fourth Mortgage
HFAMD - McKinney Funds
$500,000
$500,000
$40
$0
1.00%
$5,000
Fifth Mortgage
Opa-Locka CDC AHP Funding
$500,000
$500,000
$30
$0
0.00%
$0
Housing Credit Equity
Raymond James Tax Credit Funds, Inc.
$7,161,021
$6,295,247
N/A
N/A
N/A
N/A
Deferred Developer Fee
RUDG-Town Center Developer, LLC
$1,114,840
$1,702,059
N/A
N/A
N/A
$20,715,549
$20,236,994
Total
N/A $251,636
Tax Exempt Bonds: First Housing reviewed Resolution no. HFA 2012-05, executed on May 21, 2012, which expressed the intent of the Housing Finance authority of Miami-Dade County (Florida) to proceed with the development of a multifamily rental housing project and the financing thereof through the issuance of its not to exceed $9,680,000 Multifamily Mortgage Revenue Bonds for the benefit of RUDG – Town Center, LLC. The Bonds are expected to be for a term of 17 years amortized over 30 years, with an all in permanent rate of 5.59%. During permanent financing, the underwriter recommends a Bond amount not to exceed $2,500,000, to maintain a DSC of 1.10. The Bonds will be privately placed with Bank of America, N.A. (“BANA”). According to the BANA letter of intent, upon conversion BANA will reduce the amount of the bonds to no more than $2,700,000. Second Mortgage: First Housing reviewed a Neighborhood Stabilization Program 3 (NSP3) Affordable Housing Funding Agreement between Miami-Dade County and RUDG-Town Center, LLC, executed on May 1, 2012. Based on this document, the County has appropriated up to $7,739,688 of NSP3 funds to the subject development. Based on the Developer, terms of these funds will be for 30 years with 0.5% interest and no amortization. Verification that the terms of these funds are in accordance with the assumptions of this credit underwriting report is a condition to the recommendation herein. Third Mortgage: Based on the Developer, an NSP2 fund in the amount of $1,000,000 is expected to be approved. This fund is supposed to have a term of 30 year, with amortization based on a 30 year schedule, and interest rate of 0.5% subject to cash flow during the permanent period. Verification that the terms of these funds are in accordance with the assumptions of this credit underwriting report is a condition to the recommendation herein.
Town Center Apartments
PAGE A-7 December 17, 2012
COUNTY TAX-EXEMPT BONDS HC CREDIT UNDERWRITING REPORT
FHDC
Fourth Mortgage: The underwriter reviewed a letter from Housing Finance Authority of Miami-Dade County, dated June 21, 2012, which set forth the terms and conditions of the $500,000 McKinney Act Funds award for the subject development. Based on this letter, the funds will mature in 40 years with interest rate of 1% per annum, subject to available cash flow. Principal will be due at maturity if the affordability covenants (to be defined in the related loan documents) are not breached. Verification that the terms of these funds are in accordance with the assumptions of this credit underwriting report is a condition to the recommendation herein. Fifth Mortgage: The underwriter reviewed a letter from FHL Bank Atlanta, dated November 1, 2012, which indicates the subject development has been approved for an Affordable Housing Program award of $500,000. Based on the Developer, the terms of these funds are interest rate of 0%, 30 year term with a 30 years amortization based on cash flow availability. Verification that the terms of these funds are in accordance with the assumptions of this credit underwriting report is a condition to the recommendation herein. Housing Credit Equity: The underwriter reviewed a Letter of Intent from Raymond James Tax Credit Funds, Inc. (“RJTCF”), dated July 2, 2012, in which RJTCF or an affiliate will acquire 99.98% interest in the applicant entity. RJTCF will pay $0.99 per tax credit dollar for a total contribution of $6,295,247 paid in six installments. During construction the first five installments will be available, the first in the amount of $944,287 or 15.00% upon closing of the partnership. For detail payment schedule, see chart below.
Town Center Apartments
PAGE A-8 December 17, 2012
COUNTY TAX-EXEMPT BONDS HC CREDIT UNDERWRITING REPORT
FHDC
Syndication Contributions Capital Contributions
Amount
Percentage of Total
When Due
1st Installment
$944,287
15%
Closing of Partnership
2nd Installment
$200,000
3%
later of 25% completion
3rd Installment
$944,287
15%
later of 50% completion
4th Installment
$200,000
3%
later of 75% completion
5th Installment
$944,287
15%
later of 98% construction completion
6th Installment
$3,062,386
49%
the later of i) stabilized operations
Total
$6,295,247
100.00%
Annual Credit Per Syndication Agreement
$636,011
Calculated HC Exchange Rate
$0.99
Limited Partner Ownership Percentage Proceeds Available During Construction
99.98%
$3,232,861
Deferred Developer Fee: In order to balance the sources and uses of funds, the Developer must defer $1,702,059 or 68% of total Developer Fee during the permanent period.
Town Center Apartments
PAGE A-9 December 17, 2012
COUNTY TAX-EXEMPT BONDS HC CREDIT UNDERWRITING REPORT
FHDC
Uses of Funds CONSTRUCTION COSTS: New Rental Units General Conditions Overhead Profit Payment and Performance Bonds Total Construction Contract/Costs Hard Cost Contingency Total Construction Costs:
Applicant Costs
Revised Applicant Costs
Underwriters Total Costs - CUR
Underwriters Total Costs Per Unit - CUR
$10,017,500
$9,630,300
$11,268,708
$88,730
$601,050
$577,818
$577,818
$4,550
$200,350
$192,606
$192,606
$1,517
$601,050
$577,818
$577,818
$4,550
$131,480
$126,398
$0
$0
$11,551,430
$11,104,940
$12,616,950
$99,346
$500,875
$481,515
$563,435
$4,436
$12,052,305
$11,586,455
$13,180,385
$103,783
Notes to Construction Costs: 1. The Applicant has provided an executed construction contract, dated November 8, 2012 in the amount of $12,616,950. This is a Standard Form of Agreement between the Owner, RUDG-Town Center, LLC, and the Contractor, Fortune Construction Company, Partnership, where the basis for payment is a Stipulated Sum. The retainage of 10% is up to 50% of construction completion, with none thereafter. For the NSP3 funds, the 10% retainage will be reduced to 5% retainage after the construction is 75% complete and 5% retainage until the project is 100% complete and all the Certificates of Occupancy are obtained. 2. Hard cost contingency is within 5% of hard costs. 3. The General Contractor’s Fee is less than the maximum total of 14% allowed for General Conditions, Overhead and Profit.
Town Center Apartments
PAGE A-10 December 17, 2012
COUNTY TAX-EXEMPT BONDS HC CREDIT UNDERWRITING REPORT
GENERAL DEVELOPMENT COSTS: Accounting Fees Appraisal Architect's and Planning Fees Building Permits Builder's Risk Insurance Environmental Report Impact Fee Lender Inspection Fees / Const Admin Insurance Legal Fees Market Study Marketing and Advertising Plan and Cost Review Analysis Property Taxes Survey Title Insurance and Recording Fees Soft Cost Contingency Other: Travel Other: Organizational and Office Other: Zoning Total General Development Costs:
FHDC
Applicant Costs
Revised Applicant Costs
Underwriters Total Costs - CUR
Underwriters Total Costs Per Unit - CUR
$45,000
$45,000
$45,000
$354
$7,000
$7,000
$7,000
$55
$310,000
$310,000
$310,000
$2,441
$200,350
$192,606
$192,606
$1,517
$67,618
$65,005
$65,005
$512
$25,000
$25,000
$25,000
$197
$100,000
$100,000
$100,000
$787
$24,000
$24,000
$24,000
$189
$25,000
$25,000
$25,000
$197
$140,000
$0
$0
$0
$6,500
$6,500
$6,500
$51
$30,000
$30,000
$30,000
$236
$5,000
$5,000
$5,000
$39
$25,000
$0
$0
$0
$15,000
$15,000
$15,000
$118
$110,000
$100,000
$100,000
$787
$101,322
$0
$48,181
$379
$5,000
$5,000
$5,000
$39
$3,500
$3,500
$3,500
$28
$5,000
$5,000
$5,000
$39
$1,250,290
$963,611
$1,011,792
$7,967
Notes to the General Development Costs: 1. General Development Costs are the Applicant's actual costs, which appear reasonable. 2. Soft Cost Contingency is 5% of General Development Costs before contingency.
Town Center Apartments
PAGE A-11 December 17, 2012
COUNTY TAX-EXEMPT BONDS HC CREDIT UNDERWRITING REPORT
FINANCIAL COSTS: Construction Loan Application Fee Construction Loan Underwriting Fee Construction Loan Origination Fee Construction Loan Closing Costs Construction Loan Interest Permanent Loan Origination Fee Bond Trustee Fee Bond Rating Fee Reserves - Operating Deficit Reserves - Lease-up Reserves - Asset Management Fee Reserves - Real Estate Taxes Reserves - Insurance Reserves - Replacement Escrow Financial Advisor Fee Legal Fees - Bond Counsel Legal Fees - Borrower's Counsel Legal Fees - Issuer's Counsel Legal Fees - Lender's Counsel Legal Fees - Underwriter's Counsel Issuers Counsel TEFRA Fee Capitalized Monitoring Fees Syndicator Underwriting Fees LIHTC Admin Fees Other: Binding Fees Total Financial Costs:
FHDC Underwriters Total Costs Per Unit - CUR
Applicant Costs
Revised Applicant Costs
Underwriters Total Costs - CUR
$10,000
$10,000
$10,000
$79
$25,000
$25,000
$25,000
$197
$144,000
$139,500
$139,500
$1,098
$20,000
$20,000
$20,000
$157
$462,000
$462,000
$462,000
$3,638
$96,000
$93,000
$93,000
$732
$6,000
$6,000
$6,000
$47
$15,000
$15,000
$15,000
$118
$252,332
$247,278
$247,278
$1,947
$150,000
$150,000
$150,000
$1,181
$75,000
$75,000
$75,000
$591
$31,500
$31,500
$31,500
$248
$31,750
$31,000
$31,000
$244
$38,100
$37,200
$37,200
$293
$41,000
$41,000
$41,000
$323
$50,000
$50,000
$50,000
$394
$25,000
$25,000
$25,000
$197
$25,000
$25,000
$25,000
$197
$75,000
$75,000
$75,000
$591
$25,000
$25,000
$25,000
$197
$40,000
$40,000
$40,000
$315
$5,000
$5,000
$5,000
$39
$40,000
$40,000
$195,284
$1,538
$50,000
$50,000
$50,000
$394
$49,000
$49,000
$50,881
$401
$5,000
$50,000
$50,000
$394
$1,786,682
$1,817,478
$1,974,643
$15,548
Notes to the Financial Costs: 1. The Financial Costs were submitted by the Applicant and appear reasonable. 2. LIHTC Administrative Fees is based on 8% of the expected annual HC allocation. 3. Capitalized Monitoring Fees was calculated by the underwriter based on Florida Housing’s published compliance monitoring fees.
NON-LAND ACQUISITION COSTS
Applicant Costs
Brokerage Fees - Building Building Acquisition Cost Other: Other: Other: Total Non-Land Acquisition Costs:
Revised Applicant Costs
Underwriters Total Costs - CUR
Underwriters Total Costs Per Unit - CUR
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0
$0 $0
$0
$0
$0
$0
$0
$0
Notes to the Non-Land Acquisition Costs: 1. Since this is a new construction development, there are no non-land acquisition costs. Town Center Apartments
PAGE A-12 December 17, 2012
COUNTY TAX-EXEMPT BONDS HC CREDIT UNDERWRITING REPORT
OTHER DEVELOPMENT COSTS Development Cost Before Developer Fee Developer Fee Total Other Development Costs:
FHDC
Applicant Costs
Revised Applicant Costs
Underwriters Total Costs - CUR
Underwriters Total Costs Per Unit - CUR
$15,089,277
$14,367,544
$16,166,820
$127,298
$2,414,285
$2,335,635
$2,495,175
$19,647
$2,414,285
$2,335,635
$2,495,175
$19,647
Notes to the Other Development Costs: 1. The recommended Developer's Fee is equal to 16% of the total development cost before developer fee, operating reserves and land costs.
LAND ACQUISITION COSTS
Applicant Costs
Brokerage Fees - Land Land Acquisition Costs Total Acquisition Costs: TOTAL DEVELOPMENT COSTS:
Revised Applicant Costs
Underwriters Total Costs - CUR
Underwriters Total Costs Per Unit - CUR
$0
$0
$0
$0
$1,575,000
$1,575,000
$1,575,000
$12,402
$1,575,000
$1,575,000
$1,575,000
$12,402
$19,078,562
$18,278,179
$20,236,994
$159,346
Notes to Acquisition Costs: 1. The Appraisal dated July 2, 2012 indicated an "as is" vacant land value for the land of $2,480,000.
Notes to Total Development Costs: 1. Total Development Costs increased 6% since the original Applicant’s Costs, which is due to Construction Costs increase. The final construction contract amount was acceptable.
Town Center Apartments
PAGE A-13 December 17, 2012
COUNTY TAX-EXEMPT BONDS HC CREDIT UNDERWRITING REPORT
FHDC
Operating Pro Forma Town Center Apartments FINANCIAL COSTS:
Year 1 Per Unit
Year 1
EXPENSES:
INCOME:
OPERATING PRO FORMA Gros s Potenti a l Renta l Income Other Income Anci l l a ry Income Mi s cel l a neous Wa s her/Dryer Renta l s Ca bl e/Sa tel l i te Income Rent Conces s i ons La undry Gros s Potenti a l Income Les s : Va c a nd Col l ecti on Los s Percenta ge: 5.00% Conces s i ons Los s Percenta ge: 0.00% Total Effective Gross Income Fi xed: Rea l Es ta te Ta xes Ins ura nce Va ri a bl e: Ma na gement Fee Percenta ge: 4.00% Genera l a nd Admi ni s tra ti ve Pa yrol l Expens es Uti l i ti es Ma rketi ng a nd Adverti s i ng Ma i ntena nce a nd Repa i rs Grounds Ma i ntena nce a nd La nds ca pi ng Contra ct Servi ces Res erve for Repl a cements Total Expenses Net Operating Income Debt Service Payments Fi rs t Mortga ge Second Mortga ge Thi rd Mortga ge Fourth Mortga ge Tota l Debt Servi ce Pa yments Ca s h Fl ow a fter Debt Servi ce FINANCIAL COSTS: Debt Service Coverage Ratios DSC - Fi rs t Mortga ge DSC - Second Mortga ge DSC - Thi rd Mortga ge DSC - Fourth Mortga ge DSC - Fi fth Mortga ge DSC - Al l Mortga ges a nd Fees Financial Ratios Opera ti ng Expens e Ra ti o Brea k-even Economi c Occupa ncy Ra ti o (a l l debt)
$824,508
$6,492
$0 $31,750 $0 $0 $0 $13,208 $869,466
$0 $250 $0 $0 $0 $104 $6,846
$43,473 $0 $825,993
$342 $0 $6,504
$99,317 $63,500
$782 $500
$33,040 $46,355 $139,700 $104,775 $19,050 $60,325 $19,050 $12,700 $38,100 $635,912 $190,081
$260 $365 $1,100 $825 $150 $475 $150 $100 $300 $5,007 $1,497
$172,035 $38,698 $35,903 $5,000 $251,636 -$61,555 Annual
$1,355 $305 $283 $39 $1,981 -$485 Per Unit
1.10 0.90 0.77 0.76 0.76 0.76 76.99% 102.08%
Notes to the Operating Pro Forma and Ratios: Town Center Apartments
PAGE A-14 December 17, 2012
COUNTY TAX-EXEMPT BONDS HC CREDIT UNDERWRITING REPORT
FHDC
1. Gross Potential Rental Revenue is based upon the FHFC 2012 restricted rents less utility allowance as required by the HC Program, which are supported by the Appraisal. Below is the rent roll for the subject property:
AMI%
Gross HC Rent
CU Rents
Annual Rental Income
1
1.0
122
576
50%
$615
$0
$0
$78
$0
$537
$537
$537
$537
$786,168
2
1.0
5
864
50%
$738
$0
$0
$99
$0
$639
$639
$639
$639
Bed Bath Rooms Rooms Units
Square Feet
Low HOME Rents
High HOME Rents
Utility Allow
RD/HUD Net HC Applicant Appraiser Cont Rent Rents Rents Rents
127
$1,176
$38,340 $824,508
2. The Appraiser estimated a vacancy and collection loss at 5%, which is acceptable to the underwriter. Also, the Appraiser estimated rental concessions/specials at 1%, which was not deducted by the underwriter as all units are set aside at the 50% AMI level. 3. The other income category includes any other income from the property including revenues from application fees, laundry facilities, damages, cancellation fees, pet fees, late fees, legal fees, and miscellaneous sources. 4. Based upon operating data from comparable properties, third-party reports (Appraisal and Market Study) and the Credit Underwriter's independent due diligence, First Housing represents that, in its professional opinion, estimates for Rental Income, Vacancy, Other Income, and Operating Expenses fall within a ban of reasonableness. 5. The applicant has submitted a Management Agreement between the owner and TRG Management Company of Florida. The Management fee shall be payable in arrears and equal to four percent (4.0%) of the gross income actually collected during the month. 6. Current operations indicate that the landlord is responsible for common area utilities, water, sewer and trash collection, with tenants responsible for in-unit electric and cable. The Appraisal report had an estimate of $825 per unit for utilities, which was based on the subjects budgeted expenses, with secondary reliance placed on the comparable data, as the utility responsibilities varies between properties. 7.
Replacement Reserves of $300 per unit per year are required.
8. Refer to Exhibit 1, Page 1 for a 15-Year Pro Forma, which reflects rental income increasing at an annual rate of 2%, and expenses increase at an annual rate of 3%.
Town Center Apartments
PAGE A-15 December 17, 2012
FHDC
Section B
County Tax-Exempt Bonds Program Loan Conditions
December 17, 2012
COUNTY TAX-EXEMPT BONDS UNDERWRITING REPORT
FHDC
Special Conditions The First Mortgage Loan Tax-Exempt Bonds Recommendation contained within this Credit Underwriting Report is contingent upon receipt and satisfactory review of the following items by the Housing Finance Authority of Miami-Dade County (“HFAMD”) at least 30 days prior to Tax-Exempt Bond (“Bond”) Program Loan Closing. Failure to receive approval of these items within this time frame may result in postponement of the Bond Pricing Date. For competitive Bond Sales, these items must be reviewed and approved prior to issuance of the Notice of Bond Sale. 1. Funding of all Reserve as contemplated in this credit underwriting report. 2. Receipt of City approval to reduce the parking requirements from 0.8 to 0.5 parking spaces per unit. The plans indicate 79 parking spaces or 0.64 spaces per unit. Upon approval, this requirement will be less than the number of spaces actually provided. 3. BANA to act as the Private Placement provider and purchase up to $9,680,000 in Bonds with the terms and conditions per letter of interest reviewed by the credit underwriter. 4. Verification that the Neighborhood Stabilization Program 3 (NSP3) funds terms are in accordance with the assumptions of this credit underwriting report. 5. Verification that the NSP2 funds terms are in accordance with the assumptions of this credit underwriting report. 6. Verification that the FHL Bank Atlanta funds terms are in accordance with the assumptions of this credit underwriting report. 7. The underwriter recommends that all clarifications be provided and a final revised PCA be received before closing. 8. Environmental Insurance Policy satisfactory to HFAMD in form and substance. 9. Any other reasonable conditions established by HFAMD and/or its Legal Counsel.
General Conditions FHDC’s Bond Loan recommendation is contingent upon receipt and satisfactory review of the following items by HFAMD at least 30 days prior to BOND Loan Closing. Failure to receive approval of these items within this time frame may result in postponement of the Bond Pricing Date. For competitive Bond Sales, these items must be reviewed and approved prior to issuance of the Notice of Bond Sale. Town Center Apartments
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1. Borrower to comply with all recommendations noted in the PCA. 2. Signed and sealed Survey dated within 90 days of BOND Loan Closing, unless otherwise approved by HFAMD and its Legal Counsel. The Survey shall be certified to HFAMD and its Legal Counsel as well as the applicable Title Insurance Company; it shall indicate the legal description, exact boundaries of the Subject Development, easements, utilities, roads, means of access to public streets, total acreage, flood hazard area and any other requirements of HFAMD. 3. Final “as permitted” (signed and sealed) Civil Engineering Plans, Architectural Site Plan and Building Plans and Specifications. The Geotechnical Report must be bound within the final Plans and Specifications. The final Plans and Specifications shall reflect Features and Amenities committed by Applicant. 4. Building Permits and any other necessary regulatory Permits and Approvals (e.g., Final Site Plan approval, Water Management District, Florida Department of Environmental Protection, U.S. Army Corps of Engineers, Florida Department of Transportation, etc.) or a letter from the local permitting and approval authority stating the above-referenced Permits and Approvals will be issued upon receipt of applicable fees and with no other condition. If a letter is provided, copies of all Permits will be required as a condition to the first Post-Closing Draw. 5. Final Sources and Uses of Funds itemized by source and line item, in a format and in amounts approved by the Servicer. A detailed calculation of the Construction Interest based upon the final Draw Schedule (see below), documentation of the Closing Costs and a draft Loan Closing Statement must also be provided. The Sources and Uses of Funds schedule will be attached to the Loan Agreement as the approved Development Budget. 6. A Final Construction Draw Schedule showing itemized Sources and Uses of Funds for each monthly draw. BOND Loan Proceeds shall be disbursed pro rata with other funding sources during the construction or rehabilitation phase, unless otherwise approved by the Credit Underwriter. The Closing Draw must include appropriate backup wiring instructions. 7. Evidence Borrower has committed financing or the funds necessary to complete construction. Closing of all subordinate loans shall be prior to or simultaneous with closing of BOND Loans. If the Subordinate Loans do not close prior to or simultaneously with the BOND Loans, Borrower/Developer will be required to cover the resulting shortfall with additional Deferred Developer Fee and/or additional Equity as necessary. 8. Evidence of General Liability, Flood (if applicable), Builders Risk and Replacement Cost Hazard Insurance as Certificates of Occupancy (“C/O’s) are received, reflecting HFAMD as Loss Payee/Mortgagee, in coverages, deductibles and amounts satisfactory to HFAMD. Town Center Apartments
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9. If the Subject Development is not 100% lien-free completed, a 100% Payment and Performance (“P&P”) Bond or a Letter of Credit (“LOC”) in an amount not less than 25% of the Construction Contract Amount is required in order to secure the Construction Contract. In either case, HFAMD must be listed as Co-Obligee. The P&P Bond(s) must be from a company rated at least “A-“ by A.M. Best & Co., with a financial size category at least FSC VI. HFAMD and/or its Legal Counsel must approve the source, amount(s) and all terms of the P&P Bond(s) or LOC. If the LOC option is utilized, the LOC must contain “Evergreen” language and be in a form satisfactory to the Servicer, HFAMD and its Legal Counsel. 10. Architect, Construction Consultant and Borrower Certifications on forms provided by HFAMD will be required for both design and as-built with respect to Section 504, Americans with Disabilities Act (“ADA”) and Fair Housing requirements, if applicable. 11. Satisfactory completion of a Pre-Loan Closing Compliance Audit conducted by HFAMD or its Servicer, if applicable.
FHDC’s BOND Loan Recommendations are contingent upon receipt and satisfactory review of the following by HFAMD and its Legal Counsel at least 30 days prior to BOND Loan Closing. Failure to receive approval of these items within this time frame may result in postponement of the Bond Pricing Date. For competitive Bond Sales, these items must be reviewed and approved prior to issuance of the Notice of Bond Sale. 1. Documentation of the legal formation and current authority to transact business in Florida for Borrower, the General Partner/Principal(s)/Manager(s) of Borrower, the Guarantors and the Limited Partner(s) of Borrower. 2. Purchase of the HC by Raymond James Tax Credit Funds, Inc., or assigns, under terms consistent with the assumptions contained within this Credit Underwriting Report. 3. An acceptable, updated Environmental Audit Report/Environmental Site Assessment (“ESA”), together with a reliance letter to HFAMD, prepared within 90 days of BOND Loan Closing, unless otherwise approved by HFAMD and its Legal Counsel. Borrower to comply with any and all recommendations noted in the ESA, ESA Update and the environmental review, as applicable. 4. Title Insurance Binder or Commitment for Title Insurance with copies of all Schedule B exceptions, in the amount of the BOND loan, naming HFAMD as the Insured. All Endorsements required by HFAMD shall be provided. 5. A copy of an Amended and Restated Limited Partnership Agreement reflecting purchase of the HC by Raymond James Tax Credit Funds, Inc. under terms consistent with the assumptions contained within this Credit Underwriting Report. It shall be in a form and of financial substance satisfactory to Servicer, HFAMD and its Legal Counsel. Town Center Apartments
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6. All Closing Documents (including those of other lenders) to be reviewed and approved by HFAMD and its Legal Counsel. HFAMD shall be satisfied in its sole and absolute discretion that all legal and program requirements for the BOND Program have been satisfied. 7. Receipt of a legal opinion from Borrower’s Legal counsel acceptable to HFAMD addressing the following matters: a. The legal existence and good standing of Borrower, any Partnership or Limited Liability Company that is the General Partner (“GP”) of Borrower and of any Corporation, Partnership or Limited Liability Company that is the Managing General Partner of the GP, and any Corporate Guarantor; b. Authorization, execution, and delivery by Borrower and Guarantors of all BOND Loan Documents; c. The BOND Loan Documents being in full force and effect, enforceable in accordance with their terms and subject to bankruptcy and equitable principles only; d. That Borrower and Guarantors’ execution, delivery, and performance of the BOND Loan Documents shall not result in a violation of, or conflict with any Judgments, Orders, Contracts, Mortgages, Security Agreements or Leases to which Borrower is a party, or to which the subject development is subject to Borrower’s Partnership Agreement and; e. Such other matters as HFAMD or its Legal Counsel may require. 8. Uniform Commercial Code (“UCC”) searches for Borrower and its Partnerships, as requested by HFAMD and/or its legal counsel. 9. Evidence of compliance with local Concurrency Laws/Regulations. 10. Other Assignments, Affidavits, Certificates, Financial Statements, Closing Statements and other documents as may be reasonably requested by HFAMD and/or its Legal Counsel, in form and substance acceptable to HFAMD or its Legal Counsel, in connection with the BOND First Mortgage Program Loan. 11. Any other reasonable conditions established by HFAMD and/or its Legal Counsel.
Additional Conditions FHDC’s BOND Loan recommendations are also contingent upon the following additional conditions: Town Center Apartments
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1. Acceptance by Borrower and execution of all legal documents evidencing and securing the BOND Loan in form and substance satisfactory to HFAMD, including but not limited to the Promissory Note, Loan Agreement, Mortgage and Security Agreement and the Land Use Restriction Agreement (“LURA”). 2. All amounts necessary to complete construction shall be deposited with the Bond Trustee prior to BOND Loan Closing. A phased HC pay-in necessary to complete construction shall be contingent upon an unconditional obligation of the entity providing HC Equity to pay regardless of any default under any documents relating to the HC, as long as the First Mortgage continues to be funded. 3. If applicable, receipt and satisfactory review of Financial Statements from all Guarantors dated within 90 days of BOND Loan Closing. 4. Borrower and Guarantor to provide standard HFAMD Construction Completion Guarantees, said Guarantees to be released upon Lien-Free Completion as approved by the Servicer. 5. Borrower and Guarantor to provide standard HFAMD Operating Deficit Guarantees. 6. Borrower and Guarantor to provide standard HFAMD Environmental Indemnity Guarantees, with Borrower providing an Environmental Insurance Policy satisfactory to HFAMD in form and substance. 7. Borrower and Guarantor to provide standard HFAMD Guarantees of Recourse Obligations. 8. An engineer engaged by the Syndicator or Servicer to act as HFAMD’s inspector during construction of the Subject Development. 9. Property Tax and Hazard Insurance Escrow(s) to be established and maintained by the Bond Trustee, HFAMD or the Servicer. In the event the reserve account(s) are held by the Servicer, the release of funds shall be at HFAMD’s sole and absolute discretion. 10. Replacement Reserves in the amount of $300 per unit per year are required to be deposited on a monthly basis into a designated escrow account to be maintained by the Bond Trustee, HFAMD or the Servicer. An Inflation Factor based upon the Consumer Price Index will be applied to the Replacement Reserve Deposit beginning in Year 7, unless waived or reduced in the event Obligor provides a Physical Needs Study prepared by an independent third party acceptable to HFAMD that evidences an increase in the Replacement Reserve Deposit is excessive or unnecessary. 11. Closing of all Subordinate Loans prior to or simultaneous with closing of the BOND Loans. Alternatively, the lenders must sign an unconditional obligation to fully fund its Town Center Apartments
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subordinate loans regardless of any default by Borrower under the applicable Loan Documents. 12. A minimum of 10% Retainage Holdback on all Construction Draws until the Subject Development is 50% complete, with none thereafter. Retainage will not be released until Lien-Free Construction Completion and the issuance of all Certificates of Occupancy. 13. Any other reasonable requirement(s) of Servicer, HFAMD or its Legal Counsel.
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FHDC
Section C Supporting Information & Schedules
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Additional Development & Third Party Supplemental Information Appraisal:
First Housing has reviewed a Self Contained Real Estate Appraisal Report for the subject development, dated July 2, 2012, and revised on October 22, 2012 prepared by Clobus, McLemore & Duke, Inc. (“CMD”). Based on this report, the Market Value of the fee simple estate in the subject property (land value) is $2,540,000. The subject’s prospective stabilized market value assuming restricted rents and favorable financing is $12,395,000. The subject’s prospective hypothetical stabilized market value assuming achievable market rate rents with market financing is $6,770,000. The subject site is located in the City of Opa-Locka. Interstate-95, the Palmetto Expressway and Opa-Locka Boulevard are the major traffic arteries through this area. As improved, the subject improvements will basically conform to the most competitive rental apartment projects which provide affordable housing to low-income residents in the subject’s South Florida market. It appears to be well located for this type of rental apartment usage, providing excellent access to public transportation, schools, and shopping. All necessary utilities and services are available to the site to support the development. Based upon these investigations, the appraiser is of the opinion that the subject is suitable for apartment development.
Market Study:
First Housing has reviewed a Draft Market Study of the subject development dated June 26, 2012 (Report Date), prepared by Clobus, McLemore & Duke, Inc. (“CMD”). The subject is a proposed 124 residential affordable restricted rent multifamily property. The subject site is physically and legally well suited for multi-family/senior development. The neighborhood provides all necessary support services for successful multifamily/senior development. Neighborhood occupancy rates within the subject’s Carol City Submarket have fluctuated over the past 18 months, but remain somewhat stable with an average occupancy rate of 94.3% as of May 2012, down slightly from 96.7% from November 2011. Occupancy rates within senior developments within the County PMA Submarket have also fluctuated with a weighted occupancy rate of 96.7%. CMD is unaware of any Guarantee Fund Senior Developments within
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Miami-Dade County. It is CMD’s opinion that the subject’s units will not have a negative impact on any of the Guarantee Fund Developments. Historically in the South Florida market, low-income properties are not significantly affected by new developments other than during lease-up. Occupancy is lower now primarily due to the current economic conditions, not over improvement. There has always been a demand for low-income housing and the impact on additional properties, including Guarantee Fund Developments may be on occupancy during lease-up. Demographic analysis indicates a significant pool of potential tenants with strong employment and household growth over the next five years. Historical and current absorption has significantly outpaced demographic projections. An absorption rate for the subject of 20 units per month is projected. Maximum restricted rents at the 50% AMI level are generally 44% below market rents in the “Area 3 – Carol City” rental market, and 31% below CMD’s projected market rents for the immediate neighborhood submarket. Project and unit amenities are typical of other new and proposed restricted rent projects within the rental market and metropolitan area. The subject has one- and two-bedroom units only, which is a positive factor considering the demand for units capable of accommodating the elderly in this market. Based on a delivery schedule of units beginning in September 2013, the subject should not have a significant long-term impact on the existing projects within the rental market and/or County-wide PMA. The proposed subject will enhance the compliment surrounding uses within the neighborhood and will serve to enhance the subject’s overall neighborhood. The location is well suited for residential use. The proposed subject will complement the existing surrounding uses within the neighborhood and will serve to enhance the subject’s overall appeal. The location is well suited for residential use. Environmental Report: Dynatech Engineering Corporation (“Dynatech”) prepared a Phase I Environmental Site Assessment (“ESA”) dated November 7, 2011 and an updated ESA dated July 25, 2012. The Phase I ESA was completed in conformance with the scope and limitations of ASTM Practice E 1527-05. The subject development consists of three parcels of vacant land. The study revealed the subject property has always consisted of vacant, undeveloped land. The site is presently fenced and consists of low Town Center Apartments
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vegetation, trees, and bushes. No other usage was evident. During the site inspection, no signs of hazardous substances use, handling, storage, or manufacturing were observed on site. Dynatech concluded that the subject properties revealed no evidence of recognized Environmental Conditions (REC’s) during the site inspection. No further assessment was warranted at the time. Soils Test Report:
A geotechnical investigation was conducted by Dynatech Engineering Corp. (D.E.C.) on September 14, 2012. The borings complied with ASTM D-1586 standards to an average depth of 70 feet below existing ground surface. The Soil Investigation report indicates that the proposed structure can be supported with a deep foundation system. The structural drawings indicate that the foundation design is based on the above referenced report.
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Borrower Information Borrower Name:
RUDG – Town Center, LLC
Type:
A Florida Limited Liability Company
Ownership Structure:
RUDG – Town Center, LLC
RUDG-Town Center Manager, LLC (0.01% Interest) • RUDG, LLC (Sole Member) • PRH Affordable Investments, LLC (66.7% Managing Member) • PRH INvestments, LLC (Sole Member) • Perez Ross Holdings, LLC (Sole Member) • The Urban Development Group, LLC (33.3% Member) • Alberto Milo Jr. and Maria C Milo (Members)
Raymopnd James Tax Credit Funds, Inc (99.99% Interest)
Contact Person:
Tony Del Pozzo 315 S Biscayne Blvd Miami, Fl. 33131 (305) 533-0049 (305) 460-9911
Experience:
Telephone Facsimile
Applicant and the General Partner are new entities, created to finance, develop, own and operate the subject development. In and of themselves, they have no development experience. The Developer is RUDG-Town
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Center Developer, LLC, an affiliated entity to The Related Companies, LP. Jorge Perez is the principal owner of Perez Ross Holdings, LLC, which is the sole member of PRH Investments, LLC (Guarantor). Albert Milo Jr. is the principal owner of The Urban Development Group. Together they have built, rehabilitated and/or managed over 10,000 affordable housing units. Please find the attached schedules showing Jorge Perez and Albert Milo’s experience in affordable housing. Jorge M. Pérez is a member of the Executive Team of The Related Companies, LP and is Chairman, Chief Executive Officer and Founder of The Related Group of Florida, the nation’s leading developer of multi-family residences. In August of 2005, TIME Magazine named Mr. Pérez one of top 25 most influential Hispanics in the United States. Since its inception, more than 30 years ago, the firm has built and/or managed more than 77,000 apartments and condominium residences. The Related Group of Florida is the largest Hispanic-owned business in the United States with a development portfolio of projects worth in excess of $10 billion. Mr. Perez is also the key Principal of RUDG, LLC. Matthew J. Allen is Executive Vice President and Chief Operating Officer of The Related Group. Mr. Allen, who joined the company in 1999, is responsible for overseeing the day to day operations of the company. In addition, he directly oversees the finance, human resources, marketing, legal, accounting and asset management divisions. Since 1999, he was directly responsible for raising over $10 billion in debt and equity. Prior to joining Related, Mr. Allen served as Senior Vice President of Atlantic Gulf Communities. Mr. Allen has over twenty-one years of experience in Real Estate. He is a member of the Executive Committee and Board of Directors of The Beacon Council, Executive Council and the Board of Directors for Big Brothers Big Sisters of Greater Miami. Mr. Allen completed his undergraduate studies at Barry University and received his Master’s degree in Business Administration from Florida International University. Alberto Milo, Jr. is an Officer of The Related Group of Florida and a Principal and Vice President of RUDG, LLC; an entity formed in 2009 to develop and acquire affordable housing. With over 22 years in the real estate industry, Mr. Milo brings diverse experience in many facets, having owned and operated his own real estate development, real estate brokerage and mortgage brokerage companies since 1992. He has been developing affordable housing since 1999. In 2002, he formed The Urban Development Group which specializes in creating affordable housing home ownership communities. Albert has strong ties to the local community and is well versed in all of the subsidy programs at the federal, state and local level. Actively involved in the development community, Albert is the 2011 President of the Builders Association of South Florida and has also served on Town Center Apartments
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the Miami-Dade County Industrial Development Authority since 2005. PRH Investments, LLC a limited liability company organized under the laws of the State of Florida, commenced operations in 2009. PRH Investments, LLC was formed to acquire distressed real estate assets at attractive prices and make loans to distressed borrowers at attractive yields References:
Verification of deposit and verification of mortgage account forms have been satisfactorily completed for the Borrower.
Credit Evaluation:
First Housing reviewed a Dun & Bradstreet Business Information report for PRH Investments, LLC dated November 9, 2012. The company has a Satisfactory History of payment and no derogatory information was revealed. First Housing reviewed a Dun & Bradstreet Business Information report for RUDG, LLC, dated November 9, 2012. The company has a D&B Rating of DS, which means there is no sufficient information. No derogatory information was revealed.
Financial Statements:
Summary:
The Underwriter received December 31, 2011 and December 31, 2010 consolidated, audited financial statements for the Guarantor PRH Investments, LLC. The audits were performed by KPMG, LLP. The financials are summarized below: December 31, 2011 Cash and Equivalents Total Assets Liabilities Total Equity
Audited $56,351,000 $173,551,000 $68,089,000 $105,462,000
December 31, 2010 Cash and Equivalents Total Assets Liabilities Total Equity
Audited $18,382,000 $60,941,000 $10,183,000 $50,758,000
Based upon its review of the Financial Statements and the Schedule of Contingent Liabilities, First Housing concludes that the above referenced Developer has the requisite financial strength to complete the rehabilitation and operate the development.
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Guarantor Information Guarantor(s) Name:
RUDG-Town Center, LLC, RUDG-Town Center Manager, LLC, PRH Investments, LLC, The Urban Development Group, LLC
Contact Person(s): Tony Del Pozzo 315 S Biscayne Blvd Miami, Fl. 33131 (305) 533-0049 Telephone (305) 460-9911 Facsimile Guarantor Description:
Nature of the Guarantees:
Financial Statements:
Contingent Liabilities:
Summary:
The Applicant entity was formed expressly to own and operate the subject development. PRH Investments, LLC is the 66.7% Managing Member of RUDG, LLC, the sole member of the GP.
The Guarantors shall provide a Guarantee of Recourse Obligations: standard guarantees of Construction Completion, Operating Deficits, and Environmental Indemnity guarantees. The construction completion guarantees will be released upon 100% lien free completion and stabilization.
Financial statements for the Guarantors were summarized in the previous Borrower’s Information Section. The Borrower and the GP are newly formed entities, therefore no Tax Returns were available. Audited financials for PRH Investments, LLC were reviewed by the underwriter for years 2011 and 2010.
First Housing reviewed a schedule of PRH Investments, LLC’s contingent liabilities, dated June 30, 2012, and concluded that none of the guarantees are an immediate threat to the liquidity position of the entity. FHDC has reviewed financial statements and has concluded that the guarantor has sufficient liquidity to execute the necessary guarantees. Analysis of creditworthiness of the Guarantor was performed and found to be acceptable.
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Syndication Information Syndicator Name:
Raymond James Tax Credit Funds, Inc. or an affiliate
Contact Person:
Ronald Diner, President Raymond James Tax Credit Funds, Inc. 880 Carillon Parkway St. Petersburg, FL 33716 (727) 567-1000 Telephone (727) 567-8455 Facsimile
Experience:
Raymond James Tax Credit Funds, Inc. is a wholly owned subsidiary of Raymond James Financial, Inc. Since 1969, subsidiaries of Raymond James Financial, Inc. have been among the leading syndicators of affordable housing and have risen over $2.3B in equity for more than 1,200 properties in 43 states since the inception of the tax credit program in 1986. Each of the 45 funds has met or exceeded earnings targets with no foreclosures or tax credit recaptures to date.
Financial Statements:
First Housing reviewed audited financial statements for Raymond James Financial, Inc. The results of which are detailed below. Audited Financial Statements September 30, 2011 (in 000’s) Total Assets $18,006,995 Total Liabilities $15,419,376 Equity $2,587,619 Audited Financial Statements September 30, 2010 (in 000’s) Total Assets $17,883,081 Total Liabilities $15,580,265 Equity $2,302,816
Summary:
Raymond James has a significant amount of experience in affordable multifamily housing and the financial capacity to act as the syndicator of the housing credits for this transaction.
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General Contractor Information General Contractor:
Fortune Construction Company
Type:
A Florida General Partnership licensed to do business in the State of Florida
Contact Person:
Jorge C. Serna (GC License: CGC1507096; expires 8/31/2014) (305) 460-9900 (305) 460-9911
Telephone Facsimile
Address:
10320 SW 112 Street Miami, Fl. 33176
Experience:
Fortune Construction Company (“Fortune”) is an affiliate of the Guarantor, The Related Companies, LP. The company specializes in the rehabilitation and/or construction of Multifamily Affordable and Multifamily Market rent and mixed-use developments. Fortune has been in existence since 1992 and has completed over 5,000 multifamily units throughout Florida. Several of Fortune’s Officers are also Officers of the Related Group. Jorge Serna, the holder of the GC license for Fortune Construction Company (“Fortune Construction”), has been with Fortune since 2007 and holds a Bachelor’s degree in Construction management from Florida International University. Mr. Serna has over 15 years of construction experience. Prior to joining Fortune Construction, Mr. Serna was a construction account executive with Turner Construction Company and as such was responsible for managing the construction completion of 18 Commerce Bank buildings. Mr. Serna’s license is currently valid through August 31, 2012 and his number is CGC1507096. Most recent completed Developments include in the 2007/2010 time frame include: Woodsdale Oaks Riverwalk I Apts Cutler Riverside Walden Pond Villas Colony Lakes
Credit Evaluation:
Lauderdale Lakes, FL Rehab 2007 172 units Homestead, Fl. Rehab 2008 123 units Miami, Fl Rehab 2008 200 units Miami Gardens, Fl Rehab 2010 290 units Homestead, Fl In Process 220 units
A D&B Business Credit Report obtained on Fortune Construction Company, dated November 9, 2012, revealed no derogatory information.
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Banking References:
Average balances in the seven figures were verified on deposit and the references indicate the accounts have been handled in a satisfactory manner.
Financial Statements:
The General Contractor (“GC”) is an affiliate of the parent, The Related Group. The GC provided December 31, 2010 and December 31, 2011 financial statements reviewed by Gerson, Preston, and Robinson CPA’s. They are summarized as follows: Fortune Construction Company As of 12/31/09 Cash and Cash Equivalents Total Assets: Total Liabilities: Total Equity:
(reviewed) $3,579,872 $6,547,029 $3,737,414 $2,809,615
As of 12/31/10
(reviewed)
Cash and Cash Equivalents Total Assets: Total Liabilities: Total Equity: Summary:
$1,050,765 $2,972,819 $1,193,806 $1,779,013
FHDC recommends that Fortune Construction Company be accepted as the General Contractor and that the Construction Contract be approved, subject to provision of a 100% Payment and Performance Bond or a Letter of Credit.
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Property Management Information Management Company: TRG Management Company of Florida (“TRG”) (f/k/a The Related Management Company of Florida) TRG is a fictitious name. TRG is a General Partnership comprised of JMP Management, Inc. (75%) and Related General of Florida, LLC (25%). Contact:
Mathew J. Allen TRG Management Company of Florida 315 S. Biscayne Blvd. Miami, Florida 33131 (305) 443-8288 Telephone (305) 443-9339 Facsimile
Experience:
The Related Companies of Florida, Inc. was formed in 1979 by Jorge Perez and Stephen Ross to provide property management services and value enhancing programs for new developments and acquired properties. In 1984, a separate entity was formed, titled TRG Management Company of Florida. Since inception, the company has enjoyed financial stability and currently employs over 150 people. Currently, TRG Management manages over 40 properties and has more than 4,000 units in the company’s portfolio. It has become a fully integrated organization.
Management Agreement:
The Applicant has submitted a Management Agreement between RUDG-Town Center, LLC. (owner) and TRG Management Company of Florida (Manager), which reflects a management fee of $3,500 monthly or 4.0% of actual receipts whichever is greater. The contract contains the appropriate verbiage regarding compliance with tenant income and rent restrictions.
Management Plan:
The Applicant has submitted a Management Plan which outlines the various policies and procedures to be implemented in managing the subject development. The Plan references the appropriate record keeping requirements.
Summary:
The management company has a significant amount of experience in the management of affordable multifamily housing and is currently an approved management company of the Florida Housing Finance Corporation’s Compliance Department. Continued approval is contingent upon ongoing satisfactory performance.
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15 Year Pro Forma
EXPENSES:
INCOME:
FINANCIAL COSTS: OPERATING PRO FORMA Gros s Potenti a l Renta l Income Other Income Mi s cel l a neous Al a rm Income Gros s Potenti a l Income Les s : Phys i ca l Va c. Los s Percenta ge: 5.00% Total Effective Gross Income Fi xed: Rea l Es ta te Ta xes Ins ura nce Va ri a bl e: Ma na gement Fee Percenta ge: 4.00% Genera l a nd Admi ni s tra ti ve Pa yrol l Expens es Uti l i ti es Ma rketi ng a nd Adverti s i ng Ma i ntena nce a nd Repa i rs /Pes t Control Grounds Ma i ntena nce a nd La nds ca pi ng Contra ct Servi ces Res erve for Repl a cements Total Expenses Net Operating Income Debt Service Payments Fi rs t Mortga ge Second Mortga ge Thi rd Mortga ge Fourth Mortga ge Fi fth Mortga ge Tota l Debt Servi ce Pa yments Ca s h Fl ow a fter Debt Servi ce FINANCIAL COSTS: Debt Service Coverage Ratios DSC - Fi rs t Mortga ge DSC - Second Mortga ge DSC - Thi rd Mortga ge DSC - Fourth Mortga ge DSC - Fi fth Mortga ge DSC - Al l Other Mortga ges Financial Ratios Opera ti ng Expens e Ra ti o Brea k-even Economi c Occupa ncy Ra ti o (a l l de
Year 1
Year 11
Year 12
Year 13
Year 14
Year 15
$824,508
Year 2 $840,998
$857,818
$874,974
$892,474
$910,323
$928,530
$947,101
$966,043
$985,363
$1,005,071
$1,025,172
$1,045,676
$1,066,589
$1,087,921
$31,750 $13,208 $869,466
$32,385 $13,472 $886,855
$33,033 $13,742 $904,592
$33,693 $14,016 $922,684
$34,367 $14,297 $941,138
$35,055 $14,583 $959,961
$35,756 $14,874 $979,160
$36,471 $15,172 $998,743
$37,200 $15,475 $1,018,718
$37,944 $15,785 $1,039,092
$38,703 $16,100 $1,059,874
$39,477 $16,422 $1,081,072
$40,267 $16,751 $1,102,693
$41,072 $17,086 $1,124,747
$41,893 $17,428 $1,147,242
$43,473 $825,993
$44,343 $842,513
$45,230 $859,363
$46,134 $876,550
$47,057 $894,081
$47,998 $911,963
$48,958 $930,202
$49,937 $948,806
$50,936 $967,782
$51,955 $987,138
$52,994 $1,006,880
$54,054 $1,027,018
$55,135 $1,047,558
$56,237 $1,068,510
$57,362 $1,089,880
$99,317 $63,500
$102,297 $65,405
$105,365 $67,367
$108,526 $69,388
$111,782 $71,470
$115,136 $73,614
$118,590 $75,822
$122,147 $78,097
$125,812 $80,440
$129,586 $82,853
$133,474 $85,339
$137,478 $87,899
$141,602 $90,536
$145,850 $93,252
$150,226 $96,049
$33,040 $46,355 $139,700 $104,775 $19,050 $60,325 $19,050 $12,700 $38,100 $635,912 $190,081
$33,701 $47,746 $143,891 $107,918 $19,622 $62,135 $19,622 $13,081 $38,100 $653,516 $188,997
$34,375 $49,178 $148,208 $111,156 $20,210 $63,999 $20,210 $13,473 $38,100 $671,641 $187,722
$35,062 $50,653 $152,654 $114,490 $20,816 $65,919 $20,816 $13,878 $38,100 $690,304 $186,246
$35,763 $52,173 $157,234 $117,925 $21,441 $67,896 $21,441 $14,294 $38,100 $709,519 $184,562
$36,479 $53,738 $161,951 $121,463 $22,084 $69,933 $22,084 $14,723 $38,100 $729,304 $182,659
$37,208 $55,350 $166,809 $125,107 $22,747 $72,031 $22,747 $15,164 $39,243 $750,818 $179,384
$37,952 $57,011 $171,813 $128,860 $23,429 $74,192 $23,429 $15,619 $40,420 $772,971 $175,835
$38,711 $58,721 $176,968 $132,726 $24,132 $76,418 $24,132 $16,088 $41,633 $795,780 $172,002
$39,486 $60,483 $182,277 $136,708 $24,856 $78,710 $24,856 $16,571 $42,882 $819,267 $167,871
$40,275 $62,297 $187,745 $140,809 $25,602 $81,072 $25,602 $17,068 $44,168 $843,450 $163,431
$41,081 $64,166 $193,377 $145,033 $26,370 $83,504 $26,370 $17,580 $45,493 $868,351 $158,667
$41,902 $66,091 $199,179 $149,384 $27,161 $86,009 $27,161 $18,107 $46,858 $893,990 $153,568
$42,740 $68,074 $205,154 $153,866 $27,976 $88,589 $27,976 $18,650 $48,264 $920,391 $148,119
$43,595 $70,116 $211,309 $158,482 $28,815 $91,247 $28,815 $19,210 $49,712 $947,575 $142,304
$172,035 $38,698 $35,903 $5,000 $0 $251,636 -$61,555 Annual
$172,035 $38,698 $35,903 $5,000 $0 $251,636 -$62,639 Annual
$172,035 $38,698 $35,903 $5,000 $0 $251,636 -$63,914 Annual
$172,035 $38,698 $35,903 $5,000 $0 $251,636 -$65,389 Annual
$172,035 $38,698 $35,903 $5,000 $0 $251,636 -$67,074 Annual
$172,035 $38,698 $35,903 $5,000 $0 $251,636 -$68,977 Annual
$172,035 $38,698 $35,903 $5,000 $0 $251,636 -$72,252 Annual
$172,035 $38,698 $35,903 $5,000 $0 $251,636 -$75,801 Annual
$172,035 $38,698 $35,903 $5,000 $0 $251,636 -$79,634 Annual
$172,035 $38,698 $35,903 $5,000 $0 $251,636 -$83,765 Annual
$172,035 $38,698 $35,903 $5,000 $0 $251,636 -$88,205 Annual
$172,035 $38,698 $35,903 $5,000 $0 $251,636 -$92,968 Annual
$172,035 $38,698 $35,903 $5,000 $0 $251,636 -$98,068 Annual
$172,035 $38,698 $35,903 $5,000 $0 $251,636 -$103,517 Annual
$172,035 $38,698 $35,903 $5,000 $0 $251,636 -$109,331 Annual
1.10 0.90 0.77 0.76 0.76 0.76 76.99% 102.08%
1.10 0.90 0.77 0.75 0.75 0.75 77.57% 102.06%
Year 3
1.09 0.89 0.76 0.75 0.75 0.75 78.16% 102.07%
Year 4
1.08 0.88 0.76 0.74 0.74 0.74 78.75% 102.09%
Year 5
1.07 0.88 0.75 0.73 0.73 0.73 79.36% 102.13%
Year 6
1.06 0.87 0.74 0.73 0.73 0.73 79.97% 102.19%
Year 7
1.04 0.85 0.73 0.71 0.71 0.71 80.72% 102.38%
Year 8
1.02 0.83 0.71 0.70 0.70 0.70 81.47% 102.59%
Year 9
1.00 0.82 0.70 0.68 0.68 0.68 82.23% 102.82%
Year 10
0.98 0.80 0.68 0.67 0.67 0.67 82.99% 103.06%
0.95 0.78 0.66 0.65 0.65 0.65 83.77% 103.32%
0.92 0.75 0.64 0.63 0.63 0.63 84.55% 103.60%
0.89 0.73 0.62 0.61 0.61 0.61 85.34% 103.89%
0.86 0.70 0.60 0.59 0.59 0.59 86.14% 104.20%
0.83 0.68 0.58 0.57 0.57 0.57 86.94% 104.53%
Note: The only hard pay loan is the First Mortgage, which results on a debt service coverage of 1.10. Therefore, the project is viable.
TOWN CENTER APARTMENTS
EXHIBIT 1 December 17, 2012
