Infilling California Creative Financial Tools and Techniques for Infill. UC Berkeley

Transcription

1 Infilling California Creative Financial Tools and Techniques for Infill UC Berkeley April 28, 2011

2 City of Berkeley Case Study David Brower Center & Oxford Plaza 1.14 acre city-owned surface parking A block from the Downtown BART station Across the street from the UC campus

3 Downtown Berkeley U. C. Berkeley

4 Key Public Goals Preserve public parking on the site with revenues going to City Provide at least 90 units of housing (at least 50% affordable at 60% AMI) Provide space for Environmental Center Achieve Green Building LEED certification 4

5 SECTION Residential Office Parking Conference

6 Typical Infill Development Costs Infrastructure! Offsites/Onsites! Parking Land Hard Construction Soft Costs! Design/engineering/other consultants! Construction financing! City fees

7 Oxford Plaza Funding Sources City of Berkeley Housing Trust Fund Berkeley Redevelopment Agency HCD Multifamily Housing Program! MHSA and HOPWA - Alameda County Wells Fargo Bank Affordable Housing Program/Federal Home Loan Bank and Far East National Bank $ 4.3 M $ 1.9 M $ 6.6 M $ 900 K $ 6.2 M $ 582 K Deferred Developer Fee $ 91 K Capital Contributions!!! General Partner $ 1.3 M!!! Foundation Grants $ 450 K!!! Limited Partners (Enterprise Green Communities) $ 18.1 M Total $ 40.6 M

8 Brower Center Funding Sources Housing Capital Contribution Toward Land Cost Charitable Contributions Program Related Investment Loans! Bank Financing (RSF) HUD Section 108 Funds HUD BEDI Funds Interest Income During Construction $ 2.2 M $ 11.4 M $ 4.0 M $ 3.2 M $ 4.0 M $ 1.8 M 200K New Markets Tax Credit Equity and Related Contributions!!! NMTC Equity $ 13.2 M!!! LCD Clearinghouse Loan (related to NMTC commitment) $ 1.0 M!!! Total $ 40.9 M

9 Oxford/Brower NMTC Benefits Interest Rate: 0.9% construction; 1.9% perm Loan to value: 200%+ $13.1 million debt convertible to equity $14.7 million charitable debt repaid and converted to equity Strong LTV and DCR for refinance

10 !"#!$%&'()*)+,$!-.$&/.01.$&021/&31$4/14$.& First Position Loans Rudolph Steiner Foundations ($3.2 Million) Section 108 Loan ($4 Million) $7,200,00 NMTC Tax Equity Investor (99.99%) US Bank CDC NMTC $15,892,500 LCD/Clearinghouse Loans $1,000,000 Brower NMTC Investor LLC General Partner / Managing Member of Investment Partnership / LLC (.01%) CDE/NMTC Allocatee Entity $ 1,767,000 BEDI Grant ROE $40,750,000 Brower Loan D Charitable Contributions PRI Loans Housing Air Rights Purchase $17,592,225 CDE / NMTC Allocatees US Bank, Lenders for Community Development, Clearinghouse CDFI Fees Services CDE / NMTC Allocatee Sponsor Debt Service Housing Air Rights Purchase Included in Owner Investment Above Master Development / Owner Oxford Development LLC $6,445,121 Lease Lease $ 33,256,009 Transfer Upon Completion Retail/Residential Parking Resources for Community Development Brower Center / Office David Brower Center Public Parking City of Berkeley

11 Progression of Construction

12 Architects: WRT Solomon E.T.C. Group

13 13

14 Risk Mitigation Through DDA and Other Agreements Transfer of land subject to required financing commitments Development Schedule with 24 Action Steps Completion Guaranty and Regulatory Agreements Scope of development and construction was reviewed, agreed upon and closely monitored Ongoing obligations and maintenance of the property by the Developer. 14

15 RESOURCES In the middle of difficulty lies opportunity. Albert Einstein 15

16 Local Government Financing Sources General Obligation Bonds (GOs) Redevelopment Projects (TABs) Special Assessment Districts Mello-Roos Community Facilities Districts (CFDs) Infrastructure Financing Districts (IFDs) Improvement Districts (BIDs, PBIDs etc.) Landscaping and Lighting Districts

17 What is a Mello-Roos CFD?! Method of financing infrastructure and facilities! Special Taxes, above the basic 1% property tax rate, are levied against real property within a defined area (District) " Finance infrastructure for new development " Flexible vote-approved financing vehicle " Funding source to pay for municipal services (police, fire, park maintenance) in areas with new development or infill development! Upon approval by a two-thirds vote of the registered voters or property owners if 12 or less registered voters, the district may issue bonds secured by the levy of special taxes! Governed by Mello-Roos Community Facilities Act of 1982 (the Mello-Roos Act ) 17 Public Financial Management Inc.

18 Comparison of Redevelopment to IFDs Redevelopment Incremental AV over base AV but subject to statutorily mandated pass throughs and/or contractual pass through payments. 45 years for post-1993 project areas 50+ years for earlier project areas Focused set of activities on a project area related to economic development, affordable housing and infrastructure. IFDs Incremental AV over base AV, but restricted to the sponsoring city and/or county's share of property taxes unless additional amount agreed upon by other taxing entities. 30 years Public capital facilities of communitywide significance, including highways, roads, utility improvements, parking, parks etc.