EXECUTIVE SUMMARY HOUSING COMMISSION EXECUTIVE SUMMARY SHEET

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1 ITEM 107 EXECUTIVE SUMMARY HOUSING COMMISSION EXECUTIVE SUMMARY SHEET DATE: January 31, 2019 COUNCIL DISTRICT(S): 7 SUBJECT: Loan Recommendation for Trinity Apartments ORIGINATING DEPARTMENT: Real Estate Division CONTACT/PHONE NUMBER: Colin Miller (619) HCR REQUESTED ACTION: Request to approve a $700,000 residual receipts loan to fund the acquisition and development of Trinity Apartments, a new 74-unit supportive housing apartment community serving homeless individuals in the Navajo neighborhood of Grantville. EXECUTIVE SUMMARY OF KEY FACTORS: The proposed affordable housing development is a four-story, 43,978-square-foot building, composed of 74 units located on the south side of Glacier Avenue between Mission Gorge Road and Riverdale Street. The unit mix would consist of 73 living units at approximately 380 square feet and a single one-bedroom manager s unit. This is part of HOUSING FIRST SAN DIEGO program to support the Housing Commission s Homelessness Action Plan, and will provide housing for 73 homeless individuals. The Housing Commission will also provide 73 Project Based Vouchers. The developer is seeking a residual receipts loan of up to $700,000, tax credits of $21,037,438, permanent loan of $1,300,000, County of San Diego SNHP Funds of $2,725,632 and Civic San Diego loan of $4,800,000. The developer is Wakeland Housing and Development, a seasoned and highly reputable developer of affordable housing whom the Housing Commission has an excellent history. Total development cost of the development is $30,563,070 Total development cost per residential unit is $413,014 Housing Commission subsidy per unit is $9,460 Development cost factors include: o Project size 74 living units combined with the construction of an onsite o alternative care clinic. Prevailing wages the HOME funds and Project-Based Housing Vouchers require Davis-Bacon prevailing wages. If approved, the developer could commence construction in December 2019 and complete construction by May 2021.

2 REPORT DATE ISSUED: January 31, 2019 REPORT NO: HCR ATTENTION: SUBJECT: Chair and Members of the San Diego Housing Commission For the Agenda of February 8, 2019 Loan Recommendation for Trinity Apartments COUNCIL DISTRICT: 7 REQUESTED ACTION The seven day advance notice of San Diego Housing Commission s hearing of this matter is being provided to the Housing Authority Members pursuant to the provisions of San Diego Municipal Code Section (e)(4)(A) and (B) concerning staff recommendation No. 1 only. Approve a residual receipts loan in an amount not to exceed $700,000 to Wakeland Trinity Place, LP to finance the new construction development of 74 units at 4445 Glacier Avenue San Diego, CA 92120, of which 73 units for seniors experiencing homelessness will remain affordable for 55 years. STAFF RECOMMENDATION That the San Diego Housing Commission (Housing Commission) take the following actions, as described in this report: 1. Approve a Housing Commission residual receipts loan in an amount not to exceed $700,000 to Wakeland Trinity Place, LP to finance the new construction development of 74 units at 4445 Glacier Avenue, San Diego, CA 92120, of which 73 units for seniors experiencing homelessness will remain affordable for 55 years;. The Housing Commission s proposed loan would be contingent upon the developer receiving all necessary third-party funding commitments, including a California Tax Credit Allocation Committee (TCAC) award of 9 percent tax credits, as well as additional funds from other third party sources as described in this report. 2. Authorize the President and Chief Executive Officer (President & CEO) of the Housing Commission, or designee: a) To execute all necessary documents and instruments to effectuate the transaction and implement the project, in a form approved by General Counsel, and to take such actions as are necessary, convenient and/or appropriate to implement the approvals upon advice of General Counsel; b) To adjust financing terms/conditions as necessary for consistency with requirements of other funding sources or to accommodate market changes that may occur, provided that the proposed $700,000 maximum Housing Commission loan amount may not increase; and

3 January 31, 2019 Loan Recommendation for Trinity Apartments Page 2 SUMMARY c) To substitute approved funding sources with any other available funds as deemed appropriate, contingent upon budget availability, and further authorize the President & CEO, or designee, to take such actions as are necessary, convenient and/or appropriate to implement this approval and delegation of authority by the Housing Commission upon advice of General Counsel. The Permanent Supportive Housing Development The Trinity Apartments development is supported by HOUSING FIRST SAN DIEGO, the Housing Commission s homelessness action plan. This action plan is rooted in the national Housing First model of addressing homelessness to provide housing as quickly as possible, with supportive services as needed. The current phase of HOUSING FIRST SAN DIEGO launched on July 1, 2017, and included up to $30 million and up to 525 federal rental housing vouchers over three fiscal years ( ) to support the development of affordable rental housing with supportive services for individuals experiencing homelessness. The Trinity Apartments received a proposed funding award of $700,000 through the Permanent Supportive Housing Notice of Funding Availability (NOFA) released by the Housing Commission on September 4, Developer s Request In response to the HOUSING FIRST SAN DIEGO NOFA, the development was reviewed by a selection committee consisting of Housing Commission staff. The selection committee recommended a $700,000 residual receipts loan from the Housing Commission and 73 federal Project-Based Housing Vouchers to provide rental assistance for the residents of the development. Existing Improvements The project site is currently occupied by Good Guys Auto Sales, which will be closed and moved prior to the project s construction start. No relocation will be required. On January 30, 2018, Wakeland Trinity Place, L.P. purchased the project site from Mission Gorge Enterprises, LLC. A location map is included as Attachment 1. Table 1 - Development Details Address 4445 Glacier Avenue Council District 7 Community Plan Area Navajo Development Type New Construction Construction Type Type V over Type I Parking Type On Grade Structured Parking Housing Type Permanent Supportive Housing Lot Size 0.88 Acres, 38,333 square feet Units 74 (inclusive of one manager s unit) Density 85 dwelling units per acre Unit Mix 73 Living Units and (1) 1-bedroom manager unit

4 January 31, 2019 Loan Recommendation for Trinity Apartments Page 3 Gross Building Area Commercial Space Net Rentable Area Developer Prevailing Wages Rental Subsidy 28,379 Net rentable square feet 15,599 Community/Corridors 43,978 Square Feet 28,379 Square Feet Wakeland Housing and Development Corporation Subject to Davis-Bacon Prevailing Wages 73 Project Based Vouchers The Development The Trinity Apartments is a proposed new construction affordable housing development located at 4445 Glacier Avenue in the Navajo neighborhood of Grantville (Attachment 1) that will providing housing for seniors with chronic health conditions or disabilities who are experiencing homelessness. Once a person moves into permanent housing, case management and wraparound services will be provided by a residential homeless service provider. A development summary is included as Attachment 2. The Housing Commission has partnered with the Regional Task Force on the Homeless to enable homeless service providers in the City to participate in a Coordinated Entry System (CES), and utilize a single regional data management repository, the Homeless Management Information System (HMIS). Organizations serving individuals and families experiencing homelessness in the region share this single system, which enables the more efficient delivery of housing and critical services to San Diegans experiencing homelessness. The database allows homeless housing providers to screen homeless individuals for the most appropriate housing options based on who is most in need. The developer and service provider will participate in the CES and maintain client data in the HMIS as required by the Housing Commission. Supportive Services Trinity Apartments residents will have access to an array of medical and social services provided by St. Paul s Program of All-Inclusive Care for the Elderly (PACE) and People Assisting the Homeless (PATH). The lead service provider for Trinity Place will be Community Eldercare of San Diego dba St. Paul s Senior Services and St. Paul s PACE as well as PATH. St. Paul s PACE services include but are not limited to: transportation assistance; adult day care services; primary medical and specialty care; acute hospitalizations; rehabilitation services; prescription drug coverage and management; nutritious meals and dietary counseling; physical, occupational and speech therapies; case management; educational, health and wellness, and skill building classes; in-home services (bathing, cleaning, shopping and meal preparation); dental, podiatry, optometry and other services; medical equipment and supplies; and 24-hour access to the St. Paul s PACE medical team. Residents will have access to these services on-site at St. Paul s Alternative Care Clinic, which will be co-located with the permanent supportive housing. PATH will provide on-site voluntary case management services to all 73 tenants, and they will function as the connection between the resident, property management staff, St. Paul s Senior Services, and other service providers. PATH s integrated care service model is designed to improve and better coordinate care for vulnerable individuals experiencing homelessness. Rooted in case management and centered around the individual, integrated and wraparound supports allow for health, mental health, substance use treatment, and case management services to be of focus simultaneously. Through the integrated care model, PATH staff will utilize evidence-based

5 January 31, 2019 Loan Recommendation for Trinity Apartments Page 4 practices, such as Motivational Interviewing, Harm Reduction and Critical Time Intervention to effectively build independent living skills, promote health enhancing behaviors, increase residential stability and support the transition from homelessness into housing. PATH s case management staff will be the connection between the resident, St. Paul s PACE, and various services in the community, providing linkages between a range of services identified as important to the resident. PATH will also be providing on-site adult educational, health and wellness and skill-building classes at Trinity Apartments. These programs will include, but will not be limited to: financial literacy, health information/awareness, anger management, conflict resolution, social skills and accessing community resources. The proposed affordable housing development is a four-story, 43,978-square-foot building, composed of 74 units located on the south side of Glacier Avenue between Mission Gorge Road and Riverdale Street. The unit mix would consist of 73 living units at approximately 380 square feet each and a single one-bedroom manager s unit. This permanent supportive housing community will provide comprehensive wraparound medical, behavioral health and supportive services for seniors experiencing homelessness, with a 6,700-square-foot, on-site alternative care clinic for the St. Paul s PACE program. Additional project site amenities include on-site management, community room, onsite service provider office space, laundry room, and leasing office, computer lab, teaching kitchen, outdoor terrace and dog relief area. Unit amenities include air conditioning, heaters, blinds, hard surface flooring, garbage disposal, refrigerator, stove/oven, durable countertops and fixtures. Development Team During the 15-year tax credit compliance period, Trinity Apartments will be owned by a California limited partnership (a single-asset limited partnership) consisting of: 1) Wakeland Trinity Place LLC as the General Partner; and 2) a tax credit limited partner. Prevailing Wages This development proposes to use federal Project-Based Housing Vouchers, which will require payment of Davis-Bacon prevailing wages. Accessibility The California Tax Credit Allocation Committee (TCAC) requires wheelchair accessibility in 10 percent of the units, and 4 percent of the units accessible to residents with visual and/or hearing impairment. The same units can satisfy both of these accessibility requirements. In addition, these accessible units will satisfy the federal HOME Investment Partnerships Program (HOME) and Project-Based Housing Voucher accessibility requirement of wheelchair accessibility in 5 percent of the units plus an additional 2 percent of the units accessible to residents with visual and/or hearing impairment. The development will include Universal Design features. Development Team Wakeland has nearly 6,500 units of affordable housing in its portfolio in 40 communities throughout California. The Housing Commission has worked with Wakeland on several successful projects. Recently completed projects include the 205-unit Atmosphere apartments; 132-unit scattered sites City Heights Ten rehabilitation project; the 40-unit Juniper Gardens Apartments located in City Heights; the 92-unit Village Green Apartments in the Rolando area; and Vista Grande, a 48-unit rehabilitation project located in the southeastern part of San Diego. In addition, Wakeland has

6 January 31, 2019 Loan Recommendation for Trinity Apartments Page 5 completed the 60-unit Talmadge Gateway development, a permanent supportive housing development serving seniors who experienced homelessness, in the Kensington-Talmadge Community Plan Area of San Diego. Wakeland is in compliance with all previous Housing Commission loans and bond issuances. A Developer Disclosure Statements for Wakeland is provided as Attachment 3. Table 2 - Development Team Summary Developer Limited Partnership Architect Service Provider Property Management Wakeland Housing and Development Corporation General Partner: Wakeland Housing and Development Tax Credit Limited Partner: To-be-determined Studio E Architects St. Paul s PACE & PATH ConAm Management Proposed Financing Structure Trinity Apartments has an estimated total development cost of $30,563,070. Wakeland proposes to finance the project through the use of 9 percent tax credits, conventional financing, Civic San Diego loan, County of San Diego Special Needs Housing Program loan, and Housing Commission residual receipts loan. Total development costs and sources and uses of funds are detailed in the pro forma attached to this report (Attachment 4) and summarized below. Table 3 - Permanent Sources & Uses Sources of Funding Uses of Funding Tax Credit Equity $21,037,438 Land Acquisition $5,765,306 Permanent Loan 1,300,000 Hard Costs 18,035,060 Hosing Commission Loan 700,000 Soft Costs 3,344,000 County of San Diego SNHP 2,725,632 Financing Costs 2,018,704 Civic San Diego 4,800,000 Developer Fee 1,400,000 Estimated Total Development $30,563,070 Estimated Total Uses $30,563,070 Developer Fee Wakeland is proposing to receive a $1,400,000 developer fee. The fee proposal is consistent with Updated Developer Fees (HAR17-011) approved by Housing Authority on April 19, Proposed Funding Sources The proposed Housing Commission loan will be funded with up to $500,000 in U.S. Department of Housing and Urban Development (HUD) HOME Investment Partnerships Program funds granted to the City of San Diego and administered by the Housing Commission and up to $200,000 from the City of San Diego Affordable Housing Fund (Inclusionary Housing funds and Housing Trust Fund

7 January 31, 2019 Loan Recommendation for Trinity Apartments Page 6 linkage fee revenues) administered by the Housing Commission. A final determination of Housing Commission funding sources will be made by the Housing Commission s President & CEO, or designee, contingent upon budget availability. The Housing Commission s loan will be a residual receipts loan. Loan terms are provided as Attachment 5. The Housing Commission loan is contingent upon the developer obtaining the proposed funding approvals from TCAC for 9 percent tax credits. Wakeland will submit a 9 percent tax credit application to TCAC in March, and if successful in securing funding, will break ground on the project by the end of December Development Cost Key Performance Indicators Housing Commission staff has identified development cost performance indicators which were used to evaluate the proposed development and make a funding recommendation. Project Name Table 4 Performance Indicators Development Cost Per Unit $30,563, units = $413,014 Housing Commission Subsidy Per Unit $700, units = $ 9,460 Net Rentable Square Foot Hard Cost $18,035,060 28,379 sf = $636 Gross Building Square Foot Hard Cost $18,035,060 43,978 sf = $410 Year Completed Table 5 - Comparable Development Projects Construction Type Units Total Development Cost Per Unit Cost Commission Subsidy Per Unit Gross Hard Cost Sq. Ft. Subject Property 2021 V Over I 74 $30,563,070 $413,014 $ 9,460 $410 The Beacon 2019 V Over I 43 $18,275,881 $425,020 $74,419 $385 Lofts at Normal 2019 V Over I 53 $18,842,009 $355,510 $98,113 $260 Cypress Apts V Over I 63 $20,420,000 $324,127 $54,762 $299 Development Cost Factors Project size 74 living units combined with the construction of an on-site alternative care clinic. Prevailing wages the HOME funds and Project-Based Housing Vouchers require Davis-Bacon prevailing wages. AFFORDABLE HOUSING IMPACT Homeless Impact The 2018 San Diego Regional Homeless Point-In-Time Count identified a total of 8,576 total individuals experiencing homelessness in the City, of which 4,990 were living without shelter on San Diego streets, in canyons, beaches, riverbeds, parks, or in vehicles. San Diego County has the fourth largest homeless population in the nation, according to the 2018 Annual Homeless Assessment Report to Congress form the HUD Office of Community Planning and Development.

8 January 31, 2019 Loan Recommendation for Trinity Apartments Page 7 Trinity Apartments will be subject to a Housing Commission Declaration of Covenants and Restrictions, which in addition to the applicable tax credit regulatory agreement, will restrict the affordability of 73 units for 55 years. A portion of the targeted tenant population is extremely low-income and does not typically have a stable source of income to pay rent. The developer has applied for 73 federal Project-Based Housing Vouchers (PBV) from the Housing Commission to provide rental assistance to supplement tenant rental payments. The targeted tenant base for PBV s shall be extremely low-income individuals. PBV s are awarded to specific affordable housing developments to provide rental assistance linked to their units. When a tenant moves, the rental housing voucher remains with the affordable housing unit so that another homeless San Diegan is eligible to receive permanent supportive housing with supportive services. FISCAL CONSIDERATIONS The proposed funding sources and uses approved by this action are included in the proposed Fiscal Year (FY) 2019 Housing Authority Approved Budget. Approving this action will authorize the Housing Commission to expend an amount up to $700,000 in FY2019 budget as approved by the Housing Authority. Funding sources approved by this action will be as follows: HUD HOME Investment Partnership Program $500,000 City of San Diego Affordable Housing Fund $200,000 Total Funding Sources - Up to $700,000 Fiscal Year 2019 funding uses approved by this action will be as follows: Loans up to $700,000 Total funding uses - $700,000 Approving this action will further give the President & CEO, or designee, the authority to substitute the funding sources with other available funding sources so long as the total Housing Commission loan amount does not exceed the approved total loan amount, should the operational need arise or should such actions be to the benefit of the Housing Commission. Development Schedule The estimated development timeline is a follows: Housing Commission proposed approval February 8, 2019 TCAC 9% Application Submittal March 4, 2019 TCAC 9% Tax Credit Award Meeting June 12, 2019 Construction Start December 2019 Construction Completion May 2021 COMMUNITY PARTICIPATION and PUBLIC OUTREACH EFFORTS On November 8, 2017, the project was presented to the Navajo Community Planners as an informational report.

9 January 31, 2019 Loan Recommendation for Trinity Apartments Page 8 KEY STAKEHOLDERS and PROJECTED IMPACTS Stakeholders include Wakeland, the Navajo community and future residents. Development of the property is expected to have a positive impact on the community because it redevelop a site into affordable rental units serving homeless individuals. ENVIRONMENTAL REVIEW This activity is not a "project" and is therefore not subject to the California Environmental Quality Act (CEQA) pursuant to State CEQA Guidelines Section 15060(c)(3). This determination is predicated on Section of the Guidelines, which provides direction to lead agencies on the appropriate timing for environmental review. This action does not constitute approval of a project. Approval will occur once the environmental review has been completed in accordance with CEQA Section This action will not foreclose review of alternatives or mitigation measures by the public as part of the CEQA process. The proposed actions are approval of a loan and do not constitute approval of the development activity. Future actions to consider and approve development entitlement approvals related to the future development of the site will require additional review under the provisions of CEQA by the lead agency. Federal funds constitute a portion of the funding for the project. A final reservation of federal funds shall occur only upon satisfactory completion of environmental review and receipt by the City of San Diego of a release of funds from the U.S. Department of Housing and Urban Development under 24 CFR Part 58 of the National Environmental Policy Act (NEPA). The parties agree that the provision of any federal funds to the project is conditioned on the City of San Diego s determination to proceed with, modify or cancel the project based on the results of subsequent environmental review under NEPA. Respectfully submitted, Colin Miller Colin Miller Vice President, Housing Finance Real Estate Division Approved by, Jeff Davis Jeff Davis Executive Vice President & Chief of Staff San Diego Housing Commission Attachments: 1) Location Map 2) Development Summary 3) Developer Disclosure Agreement 4) Developer pro forma 5) Term Sheet Hard copies are available for review during business hours at the security information desk in the main lobby and the fifth floor reception desk of the San Diego Housing Commission offices at 1122 Broadway, San Diego, CA and at the Office of the San Diego City Clerk, 202 C Street, San Diego, CA You may also review complete docket materials in the Governance & Legislative Affairs section of the San Diego Housing Commission website at

10 Location Map Attachment 1

11 Attachment 2 Development Summary Table 1 - Development Details Address 4445 Glacier Avenue Council District 7 Community Plan Area Navajo Development Type New Construction Construction Type Type V over Type I Parking Type On Grade Structured Parking Housing Type Permanent Supportive Housing Lot Size 0.88 Acres, 38,333 square feet Units 74 (inclusive of one manager s unit) Density 85 dwelling units per acre Unit Mix 73 Living Units and (1) 1-bedroom manager unit Gross Building Area Commercial Space 28,379 Net rentable square feet 15,599 Community/Corridors 43,978 Square Feet Net Rentable Area 28,379 Square Feet Developer Wakeland Housing and Development Corporation Prevailing Wages Subject to Davis-Bacon Prevailing Wages Rental Subsidy 73 Project Based Vouchers Table 2 - Development Team Summary Developer Limited Partnership Architect Service Provider Property Management Wakeland Housing and Development Corporation General Partner: Wakeland Housing and Development Tax Credit Limited Partner: To-bedetermined Studio E Architects St. Paul s PACE & PATH ConAm Management Table 3 - Permanent Sources & Uses Sources of Funding Uses of Funding Tax Credit Equity $21,037,438 Land Acquisition $5,765,306 Permanent Loan 1,300,000 Hard Costs 18,035,060 Hosing Commission Loan 700,000 Soft Costs 3,344,000 County of San Diego SNHP 2,725,632 Financing Costs 2,018,704 Civic San Diego 4,800,000 Developer Fee 1,400,000 Estimated Total Development Cost $30,563,070 Estimated Total Uses $$ $30,563,070

12 Attachment 2 Table 4 - Funding Request Housing Commission Total Subsidy $700,000 Housing Commission Subsidy Per Unit $9,460 Project Name Table 5 Performance Indicators Development Cost Per Unit $30,563, units = $413,014 Housing Commission Subsidy Per Unit $700, units = 9,460 Net Rentable Square Foot Hard Cost $18,035,060 28,379 sf = $636 Gross Building Square Foot Hard Cost $18,035,060 43,978 sf = $410 Year Completed Table 6 - Project Cost Comparison Chart Construction Type Units Total Development Cost Per Unit Cost Commission Subsidy Per Unit Gross Hard Cost Sq. Ft. Subject Property 2021 V Over I 74 $30,563,070 $413,014 $ 9,460 $410 The Beacon 2019 V Over I 43 $18,275,881 $425,020 $74,419 $385 Lofts at Normal 2019 V Over I 53 $18,842,009 $355,510 $98,113 $260 Heights Cypress Apts V Over I 63 $20,420,000 $324,127 $54,762 $299 Unit Type AMI Number of Units Table 7 - Proposed Rents Maximum Rent* PBV Rent Living Unit 30% 73 $511 $942 1-Bedroom N/A 1 N/A - Total 74

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57 FORECAST ASSUMPTIONS RUN DATE: 01/07/19 Perm Supportive Housing 100% at 30% AMI with vouchers 4400 Block Glacier Glacier Avenue and Mission Gorge Road San Diego, CA Attachment 4 05:51 PM DEVELOPMENT INFORMATION DEBT FINANCING ASSUMPTIONS Units for Rent 73 CONSTRUCTION LOAN: Manager's Units 1 Construction Loan Interest Rate 6.00% Total Number of Units 74 Credit Loan Fee 0.75% Density Per Acre Estimated 0.86 Acres PERMANENT LOAN: Permanent Loan Rate 6.50% Notes: Permanent Loan Constant 7.31% Not in a QCT Loan Points and Fees 1.00% Remained in DDA Debt Service Coverage Ratio 1.15 Zoned for 1 DU per 1000 sf Assumes $500k for Environmental Loan Underwriting Term (Years) 35 Studio E Stacking Plan is basis for parking and SF Construction Loan to Value Ratio 69.51% Assuming 3 story podium over parking. Capitalization Rate 4.75% % Vouchers 99% Project Value (NOI/Cap Rate) 3,449,925 Maximum Loan to Cost Ratio % SOURCES AND USES OF FUNDS Cash Available for Debt Service Combined (NOI) 163,871 Loan to Value Ratio (restricted) 80.00% Predevelopment per unit Construction Permanent Final Perm. Permanent Loan 1,300,000 USES: Annual Payment 94,248 Actual DSC Land/Acquisition 5,000,000 $77,910 $5,765,306 $5,765,306 $5,765,306 OTHER DEBT/LOANS: Other Loan Design & Engineering $13, , , ,000 Interest Rate 0.00% Legal/Financial/Other Consultants 50,000 $2, , , ,000 Loan Points and Fees 0.000% Permits & Fees $21,473 1,589,000 1,589,000 1,589,000 Loan Term (Years) 0 Bridge Loan Interest 606,832 $ TAX CREDIT FINANCING ASSUMPTIONS / DEVELOPMENT SCHEDULE Direct Building Construction $230,396 17,049,308 17,049,308 17,049,308 Financing Costs 50,000 $27,280 1,806,583 2,018,704 2,018,704 Credit Year 2018 Marketing/General & Administrative $4, , , ,000 Federal Tax Credit Rate 9.00% Developer Fees 700,000 $18, ,000 1,400,000 1,400,000 State Tax Credit Rate 65.00% Hard Cost Contingency $13, , , ,752 Difficult to Develop % % Soft Cost Contingency 25,000 $3, , , ,000 Applicable Fraction % Total Project Uses $5,731,832 $413,014 $29,295,949 $30,563,070 $30,563,070 Adjusted Eligible Basis 24,351,321 Annual Tax Credits 2,191,400 SOURCES: Investor Yield on 99% of Total Credit Allocation 96.00% Gross Investor Contribution to Lower Tier 21,037,438 Tax Credit Equity 284,290 $3,155,616 $21,037,438 $21,037,438 Perm Loan (NOI Tranche) 0 0 OTHER ASSUMPTIONS Perm. Loan (Section 8) 17, ,300,000 1,300,000 GP Capital Contribution Property Taxes: Construction Loan 5,000, ,914, Tax Rate (Assumes Waiver) 1.18% Income during Predev 440, Existing Property Basis (per unit) 0 San Diego Housing Commission 9, , , ,000 New Unit Basis (per unit) Civic SD 64,865 4,000,000 4,800,000 4,800,000 Ground Lease: County Funding - SNHP 36,833 2,725,632 2,725,632 2,725,632 Return on Ground Lease 0.00% Gap 291, Inflation Indexes: Income Inflator 2.50% Total Project Sources $5,731,000 $413,014 $29,295,949 $30,563,070 $30,563,070 Expense Inflator 3.50% Public Funds 0 Real Estate Tax Inflator 2.00% Basis Reduction: 0 Tiebreaker 59.00% Replacement Reserve 3.00%

58 STRUCTURE AND AFFORDABILITY 4400 Block Glacier RUN DATE: 01/07/19 Perm Supportive Housing 100% at 30% AMI with vouchers Glacier Avenue and Mission Gorge Road 05:51 PM San Diego, CA UNIT TYPE / AFFORDABILITY Median Income Studio 1BR/1BA 2BR/2BA 3BR/2BA 4BR/2BA Total Units % of TC 30.00% % %.0% 50.00%.0% %.0% 70.00% Market % Total Bedrooms % Total Units Percent of Unit Mix 100.0% 1.4% 0.0% 0.0% 0.0% Square Foot per Unit Type ,100 0 Total Unit Square Foot 27, ,379 PHYSICAL STRUCTURE Related Residential Square Footage: Residential Commons 8,300 Per Studio E L1 0 Misc/Utility Storage/Circulation 17% 7,299 Total Square Feet 43,978 sq. ft. Residential Parking-Podium, Driveway (1 ground level 1 underground) 0 Total Residential Uses Square Feet 43,978 St Paul's 0 Per Studio E Commercial Parking 26 St Paul Spaces 0 Total Commercial Uses Square Feet 0 Total Square Feet 43,978 Residential Percentage % Commercial Percentage (Meets TCAC Test) 0.00%

59 RENTAL INCOME ASSUMPTIONS 4400 Block Glacier RUN DATE: 01/07/19 Perm Supportive Housing 100% at 30% AMI with Glacier Avenue and Mission Gorge Road San Diego, CA Family Number 2018 Rents Utility Net Monthly Net Annual Unit Total Rent/ Size Unit Type of Units Allowance Rent Rent Sq. Ft. Sq. Ft. Sq. Ft. % of Median 30.00% 0BR/1BA , ,740 $ % 1BR/1BA $ % 2BR/2BA $ % 3BR/2BA ,100 0 $ % 4BR/2BA $ % 0BR/1BA $ % 1BR/1BA $ % 2BR/2BA 0 1,023 1, $ % 3BR/2BA 0 1,181 1, ,100 0 $ % 4BR/2BA 0 1,318 1, $ % 0BR/1BA $ % 1BR/1BA 0 1,023 1, $ % 2BR/2BA 0 1,228 1, $ % 3BR/2BA 0 1,418 1, ,100 0 $ % 4BR/2BA 0 1, , $0.00 FMR 0BR/1BA MKT 0BR/1BA TOTAL PROJECT , ,740 $1.13 County UA 0 Br 1 Bed 2 Bed 3 Bed Heating: Gas Cooking: Gas Water Heating: Gas Air Conditioning Other Electric Total Water Sewer Section 8 Increment Per Unit TCAC HA Contract Incremental S8 Monthly S8 Annual S8 Unit Type Number TCAC Income T Rent (net of UA) Rent Income Increment Increment Studio 73 30% AMI 429 1, , ,912 1BR 0 30% AMI 511 1, BR 0 30% AMI 614 1, BR 0 60% AMI 1,418 1, Total 73 48, ,912 TCAC Section 8 Leveraged Loan Calculation Section 8 Increment Unit Type Number TCAC Income Tier Per Unit TCAC Rent (net of UA) HA Contract Rent Incremental S8 Income Monthly S8 Increment Annual S8 Increment Studio 73 30% AMI 429 1, , ,912 1BR 0 30% AMI 511 1, BR 0 30% AMI 614 1, BR 0 60% AMI 1,418 1, Total 73 48, ,912 Annual Incremental Income (28,996) Vacancy (5%) 550,916 Net Rental Differential 479,058 DCR 1.15 Loan Term 15 Interest Rate 6.00% 4,730,835 TCAC Leveraged Loan

60 DEVELOPMENT BUDGET 4400 Block Glacier Perm Supportive Housing 100% at 30% AMI Glacier Avenue and Mission Gorge Road San Diego, CA CONSTRUCTION SOURCES AND USES ANALYSIS Permanent Construction DESCRIPTION Budget BUDGET At Closing Land Acquisition 1,500,000 5,000,000 5,000,000 5,000,00 Environmental Remediation 500, , ,00 Demolition 125, , ,250 41,250 42, Title and Escrow 5,000 5,000 5,000 0 Holding Costs During Predevelopment 135, , , LAND ACQUISITION & CLOSING 5,765,306 5,765,306 5,140, ,250 41,250 42, Architect/Mechanical/Structural/Electrical 425, , ,357 30,357 30,357 30,357 30,357 30,357 30,357 Design/Landscape Arch-Const Observation 40,000 40, Civil Engineer + Utilities (w. their reimbursables) 225, , ,071 16,071 16,071 16,071 16,071 16,071 16,071 Soils Engineering 30,000 30,000 12,073 8,964 8, Surveying 25,000 25,000 25,000 0 Environmental Consultants (Phase 1 & 2; air, noise) 175, , ,00 0 Other Consultants 25,000 25,000 25,00 0 Reimburseable Exp's-Pre-Dev't 25,000 25,000 1, ,500 Reimburseable Exp's-Construction 5,000 5,000 5,00 0 Contingency 50,000 50,000 50,00 0 DESIGN & ENGINEERING 1,025,000 1,025, ,573 55,392 55,392 46,429 46,429 46,429 46,429 69,929 Legal-Project Development 30,000 30,000 30,00 0 Perm lender 20,000 20,000 20,00 Legal-Tax Credit 30,000 30,000 30,00 Legal - Construction Lender 40,000 40,000 40,00 City Cost Review & Legal 25,000 25,000 25,00 Accounting & Auditing 15,000 15,000 1, ,855 Contingency 25,000 25,000 25,00 0 LEGAL/FINANCIAL/OTHER 185, , , ,855 Permits & Fees (City & Utilities) 1,332,000 1,332, ,800 88,800 88,800 88,800 88,800 88,800 88,800 Utilities, Testing & Inspections 75,000 75, ,000 5,000 5,000 5,000 5,000 5,000 5,000 Developer Performance Bonds 7,000 7,000 7,00 Prevailing Wage Monitoring Consultant 75,000 75, ,000 5,000 5,000 5,000 5,000 5,000 5,000 Construction Manager 100, , ,143 7,143 7,143 7,143 7,143 7,143 7,143 Contingency 25,000 25, PERMITS/BONDS/FEES 1,614,000 1,614,000 7, , , , , , , ,943 Off-Site Imp's/Infrastructure 150, , ,00 On-Site Imp's/Infrastructure 800, , , , , Parking Structure 27,500 Incl Contingency 100, , , SITE IMP'S/INFRASTRUCTURE 1,050,000 1,050, , , ,667 50, ,978 Building Costs $310 13,633,180 13,633, , , , ,000 1,157,562 1,157,562 1,157,562 General Conditions 7.00% 1,020,823 1,020,823 68,055 68,055 68,055 68,055 68,055 68,055 68,055 Contractor Overhead 3.00% 468, ,120 31,208 31,208 31,208 31,208 31,208 31,208 31,208 Contractor's Fee 4.00% 642, ,885 42,859 42,859 42,859 42,859 42,859 42,859 42,859 Contractor Bond & Liability Insurance 2.00% 334, ,300 22,287 22,287 22,287 22,287 22,287 22,287 22,287 Contingency 5.00% 885, , ,720 20,720 20,720 20,720 66,099 66,099 66,099 Residential Construction Subtotal 16,985,060 16,985, , , , ,129 1,388,069 1,388,069 1,388,069 TOTAL DIRECT CONSTRUCTION $366 16,985,060 16,985, , , , ,129 1,388,069 1,388,069 1,388,069 Construction Interest 1,207,761 1,207,761 Predeve-Net Cost of Predeve (point, neg carry, taxes and insurance) 75,000 75,000 75,00 Constr.Lender & Predev. Appraisals & Cost Review 15,000 15,000 15,00 0 Construction Lender Inspections 12,000 12, Constr. Period Lender fee 189, , , Escrow/Title Fees-Construction Loan 20,000 20,000 20,00 Permanent Loan Points 13,000 13,000 13,00 Permanent Loan Conversion Fees + Legal 15,179 0 SDHC Loan & Servicing Fee 60,000 60,000 60,000 SDHC Asset Mgmt Fee and Construction Review Fee 27,500 27,500 27,500 Construction Period Insurance 47,000 47,000 47,00 Operating Reserve 196,942 0 Services Reserve 0 Property Taxes & Organizational Fees 12,500 12,500 12, CTCAC Application and Allocation Fees 89,665 89,665 89, CTCAC Performance Deposit 7,670 7,670 7,67 CTCAC Monitoring Fees $410 30,340 30,340 30,34 0 Contingency 130,000 75,000 75,00 FINANCING COSTS 2,148,704 1,881, , Furnishings 183, ,00 0 Lease-Up/Advertising Expenses 25,000 25,00 0 Security 75,000 75, ,500 3,500 3,500 3,500 3,500 3,500 3,500 Market Study/Appraisal/Rent Comp Study 12,000 12,000 12,00 Syndicator/Syndication Consultant 70,000 70,000 70,000 0 Total Soft Cost Contingency 25,000 25, ,667 1,667 1,667 1,667 1,667 1,667 1,667 MARKETING/GEN & ADMIN 390, ,000 82,000 5,167 5,167 5,167 5,167 5,167 5,167 5, DEVELOPER FEES 6.30% 1,400, , , TOTAL PROJECT COSTS 413,014 30,563,070 29,295,949 6,755,846 1,455, , , ,524 1,546,464 1,546,464 1,583,819 Check: 0 SOURCES OF FUNDS - CONSTRUCTION PERIOD 0 LIHTax Credit Equity+ Solar Equity 3,155,616 3,155,616 3,155,616 Civic San Diego 4,000,000 4,000, , , , , ,000 1,000, County SNHP 2,725,632 2,725,632 2,725,632 SDHC 500, , , Beginning Construction Loan Balance 174, ,875 1,045,934 1,153,855 1,303,148 1,856,128 3,411,873 Construction Loan Draw 17,706, , , , , , ,464 1,546,464 1,583,819 Construction Loan Interest 1,207, % 873 4,654 5,230 5,769 6,516 9,281 17,059 Ending Construction Loan Balance Before Equity Repay 18,914, , ,875 1,045,934 1,153,855 1,303,148 1,856,128 3,411,873 5,012,751 TOTAL CONSTRUCTION SOURCES OF FUNDS 29,295,949 6,755,846 1,455, , , ,524 1,546,464 1,546,464 1,583,819

61 DEVELOPMENT BUDGET 4400 Block Glacier Perm Supportive Housing 100% at 30% AMI Glacier Avenue and Mission Gorge San Diego, CA DESCRIPTION Land Acquisition 1,500,000 Environmental Remediation Demolition Title and Escrow Holding Costs During Predevelopment LAND ACQUISITION & CLOSING Architect/Mechanical/Structural/Electrical Design/Landscape Arch-Const Observation Civil Engineer + Utilities (w. their reimbursables) Soils Engineering Surveying Environmental Consultants (Phase 1 & 2; air, noise) Other Consultants Reimburseable Exp's-Pre-Dev't Reimburseable Exp's-Construction Contingency DESIGN & ENGINEERING Legal-Project Development Perm lender Legal-Tax Credit Legal - Construction Lender City Cost Review & Legal Accounting & Auditing Contingency LEGAL/FINANCIAL/OTHER Permits & Fees (City & Utilities) Utilities, Testing & Inspections Developer Performance Bonds Prevailing Wage Monitoring Consultant Construction Manager Contingency PERMITS/BONDS/FEES ,357 30,357 30,357 30,357 30,357 30,357 30, ,000 20,000 16,071 16,071 16,071 16,071 16,071 16,071 16, ,429 46,429 46,429 46,429 46,429 66,429 66,429 88,800 88,800 88,800 88,800 88,800 88,800 88,800 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 5,000 7,143 7,143 7,143 7,143 7,143 7,143 7, , , , , , , ,943 Off-Site Imp's/Infrastructure On-Site Imp's/Infrastructure Parking Structure 27,500 Incl. Contingency SITE IMP'S/INFRASTRUCTURE 43,978 Building Costs $310 General Conditions 7.00% Contractor Overhead 3.00% Contractor's Fee 4.00% Contractor Bond & Liability Insurance 2.00% Contingency 5.00% Residential Construction Subtotal 1,157,562 1,157,562 1,157,562 1,157,562 1,157,562 1,157,562 1,157,562 68,055 68,055 68,055 68,055 68,055 68,055 68,055 31,208 31,208 31,208 31,208 31,208 31,208 31,208 42,859 42,859 42,859 42,859 42,859 42,859 42,859 22,287 22,287 22,287 22,287 22,287 22,287 22,287 66,099 66,099 66,099 66,099 66,099 66,099 66,099 1,388,069 1,388,069 1,388,069 1,388,069 1,388,069 1,388,069 1,388,069 TOTAL DIRECT CONSTRUCTION $366 Construction Interest Predeve-Net Cost of Predeve (point, neg carry, taxes and insurance) Constr.Lender & Predev. Appraisals & Cost Review Construction Lender Inspections Constr. Period Lender fee Escrow/Title Fees-Construction Loan Permanent Loan Points Permanent Loan Conversion Fees + Legal SDHC Loan & Servicing Fee SDHC Asset Mgmt Fee and Construction Review Fee Construction Period Insurance Operating Reserve Services Reserve Property Taxes & Organizational Fees CTCAC Application and Allocation Fees CTCAC Performance Deposit CTCAC Monitoring Fees $410 Contingency FINANCING COSTS Furnishings Lease-Up/Advertising Expenses Security Market Study/Appraisal/Rent Comp Study Syndicator/Syndication Consultant Total Soft Cost Contingency MARKETING/GEN & ADMIN DEVELOPER FEES 6.30% TOTAL PROJECT COSTS 413,014 1,388,069 1,388,069 1,388,069 1,388,069 1,388,069 1,388,069 1,388, ,167 4,167 3,500 3,500 3,500 3,500 3,500 3,500 3,500 1,667 1,667 1,667 1,667 1,667 1,667 1,667 5,167 5,167 5,167 5,167 5,167 9,333 9, ,546,464 1,546,464 1,546,464 1,546,464 1,546,464 1,570,631 1,570,631 SOURCES OF FUNDS - CONSTRUCTION PERIOD LIHTax Credit Equity+ Solar Equity 3,155,616 Civic San Diego 4,000,000 County SNHP 2,725,632 SDHC 500,000 Beginning Construction Loan Balance Construction Loan Draw 17,706,940 Construction Loan Interest 1,207,761 Ending Construction Loan Balance Before Equity Repay 18,914,701 TOTAL CONSTRUCTION SOURCES OF FUNDS 29,295, ,012,751 6,584,279 8,163,665 9,750,947 11,346,166 12,949,361 14,584,438 1,546,464 1,546,464 1,546,464 1,546,464 1,546,464 1,570,631 1,570,631 25,064 32,921 40,818 48,755 56,731 64,447 72,622 6,584,279 8,163,665 9,750,947 11,346,166 12,949,361 14,584,438 16,227,691 1,546,464 1,546,464 1,546,464 1,546,464 1,546,464 1,570,631 1,570,631

62 DEVELOPMENT BUDGET 4400 Block Glacier Perm Supportive Housing 100% at 30% AMI Glacier Avenue and Mission Gorge San Diego, CA DESCRIPTION Land Acquisition 1,500,000 Environmental Remediation Demolition Title and Escrow Holding Costs During Predevelopment LAND ACQUISITION & CLOSING Architect/Mechanical/Structural/Electrical Design/Landscape Arch-Const Observation Civil Engineer + Utilities (w. their reimbursables) Soils Engineering Surveying Environmental Consultants (Phase 1 & 2; air, noise) Other Consultants Reimburseable Exp's-Pre-Dev't Reimburseable Exp's-Construction Contingency DESIGN & ENGINEERING Legal-Project Development Perm lender Legal-Tax Credit Legal - Construction Lender City Cost Review & Legal Accounting & Auditing Contingency LEGAL/FINANCIAL/OTHER Permits & Fees (City & Utilities) Utilities, Testing & Inspections Developer Performance Bonds Prevailing Wage Monitoring Consultant Construction Manager Contingency PERMITS/BONDS/FEES Off-Site Imp's/Infrastructure On-Site Imp's/Infrastructure Parking Structure 27,500 Incl. Contingency SITE IMP'S/INFRASTRUCTURE 43,978 Building Costs $310 General Conditions 7.00% Contractor Overhead 3.00% Contractor's Fee 4.00% Contractor Bond & Liability Insurance 2.00% Contingency 5.00% Residential Construction Subtotal TOTAL 0 0 5,000, , ,000 5, , ,765, , , , , , , , , , , ,025, , , , , , , , ,000 88, ,332,000 5,000 75, ,000 5,000 75, ,000 25, , , ,614, , , , ,000 50, ,050,000 1,157, ,633,180 68, ,020,823 31, ,120 42, ,885 22, , , ,752 1,468,856 16,985,060 TOTAL DIRECT CONSTRUCTION $366 Construction Interest Predeve-Net Cost of Predeve (point, neg carry, taxes and insurance) Constr.Lender & Predev. Appraisals & Cost Review Construction Lender Inspections Constr. Period Lender fee Escrow/Title Fees-Construction Loan Permanent Loan Points Permanent Loan Conversion Fees + Legal SDHC Loan & Servicing Fee SDHC Asset Mgmt Fee and Construction Review Fee Construction Period Insurance Operating Reserve Services Reserve Property Taxes & Organizational Fees CTCAC Application and Allocation Fees CTCAC Performance Deposit CTCAC Monitoring Fees $410 Contingency FINANCING COSTS Furnishings Lease-Up/Advertising Expenses Security Market Study/Appraisal/Rent Comp Study Syndicator/Syndication Consultant Total Soft Cost Contingency MARKETING/GEN & ADMIN DEVELOPER FEES 6.30% TOTAL PROJECT COSTS 413,014 1,468, ,985,060 1,207, , , , , , , ,000 27, , , , , , , ,881,583 61,000 61,000 61, ,000 4,167 4,167 4,167 4, ,000 3,500 3,500 3,500 15,500 75, , ,000 1, ,000 70,333 68,667 68,667 19, , ,000 1,712,989 68,667 68,667 19, ,295,949 SOURCES OF FUNDS - CONSTRUCTION PERIOD LIHTax Credit Equity+ Solar Equity 3,155,616 Civic San Diego 4,000,000 County SNHP 2,725,632 SDHC 500,000 Beginning Construction Loan Balance Construction Loan Draw 17,706,940 Construction Loan Interest 1,207,761 Ending Construction Loan Balance Before Equity Repay 18,914,701 TOTAL CONSTRUCTION SOURCES OF FUNDS 29,295,949 17,881,822 3,155, ,000, ,000 16,227,691 18,021,519 18,179,993 18,339,260 18,450,323 18,542,274 18,634,686 18,727,559 18,820,897 1,712,989 68,667 68,667 19, ,706,940 80,838 89,808 90,600 91,396 91,952 92,411 92,873 93,338 93,804 1,207,761 18,021,519 18,179,993 18,339,260 18,450,323 18,542,274 18,634,686 18,727,559 18,820,897 18,914,701 1,712,989 68,667 68,667 19,667 17,881, ,970,010

63 ELIGIBLE BASIS CALCULATION 4400 Block Glacier RUN DATE: 01/07/19 Perm Supportive Housing 100% at 30% AMI with vouchers Glacier Avenue and Mission Gorge Road San Diego, CA % 0.00% NON- DEPRECIABLE BASIS DEVELOPMENT COSTS TOTAL PER UNIT DEPRECIABLE RESIDENTIAL NON-RESDNT AMORTIZED EXPENSED Land Costs Land Cost 5,000,000 67,568 5,000, Demo/Environmental Remediation 625,000 8, , Predevelopment Holding Costs 135,306 1, ,306 Title and Escrow Fees 5, , Total Land Costs 5,765,306 77,910 5,765, New Construction Site Work / Parking 950,000 12, , Residential Structures 13,633, , ,633, Commercial Space and Parking Contractor General Requirements 1,020,823 13, ,020, Contractor Overhead 468,120 6, , Contractor Profit 642,885 8, , Contractor Liability Insurance 334,300 4, , Total New Construction Costs 17,049, , ,049, Architectural Fees Design 450,000 6, , Supervision 40, , Total Architectural Costs 490,000 6, , Total Survey & Engineering Costs 310,000 4, , Construction Interest and Fees Construction Loan Interest 1,282,761 17, , ,183 Loan Origination Fee 189,147 2, , Bond Premium 7, , Property Taxes & Organizational fees 12, , Construction Period Insurance 47, , Construction Lender Inspection Fees 12, , Title & Recording 20, , Total Construction Interest & Fees 1,570,408 21, , ,183 Permanent Financing Permanent Loan Origination Fee 13, ,000 0 Perm. Loan Conversion 15, ,179 0 SDHC Legal/Cost Review 25, , SDHC Asset Mgmt Fee and Construction Review Fee 27, ,500 0 SDHC Loan Origination 60, , Total Permanent Financing Costs 140,679 1, , ,179 0 Legal Fees Legal Costs (Const Loan+ Project Related) 70, , Other (Tax Credits/Perm Loan/Organization) 50, ,000 0 Total Attorney Costs 120,000 1, , ,000 0 Total Appraisal Costs 15, , Reserves Operating and Service Reserves 196,942 2, , Other Total Reserve Costs 196,942 2, , Total Construction Contingency Costs 985,752 13, ,

64 ELIGIBLE BASIS CALCULATION 4400 Block Glacier RUN DATE: 01/07/19 Perm Supportive Housing 100% at 30% AMI with vouchers Glacier Avenue and Mission Gorge Road San Diego, CA % 0.00% NON- DEPRECIABLE BASIS DEVELOPMENT COSTS TOTAL PER UNIT DEPRECIABLE RESIDENTIAL NON-RESDNT AMORTIZED EXPENSED Other TCAC App./Reserv./Monitoring Fees 127,675 1, ,675 0 Environmental Audit 175,000 2, , Local Permit Fees 1,407,000 19, ,407, Marketing+ Market Study 37, , ,000 Impound Taxes/Insurance Residential Furnishings 183,000 2, , Relocation Security 75,000 1,014 75,000 0 Soft Cost Contingency 255,000 3, , Legal - Bond Counsel Legal - Bond Issuer Total Other Costs 2,259,675 30, ,107, ,675 25,000 Sub-Total Residential Costs 28,903, ,210 5,962,248 21,973, , ,183 Developer Costs Developer Overhead/Profit 1,400,000 18, ,400, Construction Manager/Davis Bacon Monitor 175,000 2, , Accounting & Audit 15, , Syndicator 70, , Total Developer Costs 1,660,000 22,432 70,000 1,590, Total Project Costs 30,563, ,643 6,032,248 23,563, , ,183 Interest on Soft debt ,238 Less: solar rebate Total Basis 23,621,024