RFP REQUEST FOR PROPOSAL. for TAX CREDIT ADVISOR SERVICES. for BOULDER HOUSING PARTNERS. March 6, 2012 Requested Return: March 15, 2010

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1 RFP REQUEST FOR PROPOSAL for TAX CREDIT ADVISOR SERVICES for BOULDER HOUSING PARTNERS March 6, 2012 Requested Return: March 15, 2010 Boulder Housing Partners 4800 Broadway Boulder, CO (720)

2 Request for Proposal Tax Credit Advisor Services Contents A. Overview and Process 1. Overview 2. Process and Deadlines B. Background and Services Requested 1. About Boulder Housing Partners 2. Services Requested C. Submittal Requirements 1. Elements to Include 2. Evaluation Criteria and Weight Factors D. General Information 1. Submittal Rejection 2. Contract and Method of Payment 3. Submittal Withdrawal 4. Limitation of Liability 5. Insurance Requirements E. BHP Reservation of Rights F. List of Attachments 2

3 A. Overview, Process and Deadlines 1. Overview of Scope of Work The Housing Authority of the City of Boulder dba Boulder Housing Partners (BHP) requests proposals from project managers and individuals knowledgeable and familiar with low income housing tax credit application, deals, and compliance to provide tax credit advisor services to BHP that include procurement management, deal structuring suggestions and implementation, application preparation, and post application, closing and compliance services for 4% and 9% low income housing tax credit projects for BHP. BHP anticipates the opportunity to contract with the successful firm for multiple projects over a period of three years. The first project, referred to as 4600 Broadway, is the acquisition of a permanently affordable housing project, currently under construction by a private party, which includes 34 one, two and three bedroom units. The project is located at the corner of Broadway and Yarmouth in north Boulder. The project is expected to finish construction and be ready to put into service by mid-august which is when we would expect to close. Lease up would begin immediately afterwards. The second project, High Mar, consists of the new construction of a permanently affordable housing project for seniors including 59 one and two bedroom units and community/common space. The site is located at 4990 Moorhead Drive in south Boulder. We anticipate submitting an application for 4% low income housing tax credits on May 1, The project is expected to begin construction September 1, 2012 after a mid-august closing. It will take approximately one year to build and begin leasing in the summer of We anticipate submitting an application for 4% low income housing tax credits on May 1, 2012 for the first phase for two projects described below. Total tax credits from these two projects will be between $4.5 and $5 million dollars. In addition, BHP has been delegated PAB authority from the City of Boulder from 2009, and assigned PAB authority from the City of Boulder and the State of Colorado from 2011 in the approximate total amount of $55 million dollars. BHP anticipates issuing Private Activity Bonds for acquisitions, tax credit acquisition/rehabilitation, and new construction for multi-family rental housing projects in the City of Boulder. The PAB bond issuance for these two projects is expected to be a total of $10,000,000. 3

4 The tax credit advisor will be requested to provide advice and guidance on the overall structure of the deal, including implications of different deal structures on CHFA selection criteria, bond issuance, investor interest, compliance, feasibility, etc. 2. Process and Deadlines The responses (Submittal) to this Request for Proposals (RFP) are to be received in electronic format only at the address below no later than March 15, 2012 at 4:00 p.m. Electronic submittals must be delivered or mailed to: Stuart Grogan Attn.: Tax Credit Advisor Services RFP Questions on this RFP will be accepted until March 13, 2012 at 5 pm. Any substantive clarifications requested by one respondent will be shared with all known potential respondents and posted on our website under Bids and RFPs by March 14, Only those Submittals received by the specified date and time will be considered. Any Submittal received after the specified date and time will be returned unopened. The Submittals will be reviewed and rated based on the evaluation criteria listed in this document and the top-rated firms may be selected for an interview. Scores from the Submittal and the interview will be utilized in making the final selection. BHP shall begin negotiations on price and contract with the highest ranked firm. Should negotiations fail between BHP and the highest ranked firm; negotiations will cease with the top ranked firm and begin with the second ranked firm and so on until a contract is awarded. 4

5 B. Background and Services Requested 1. Information about Boulder Housing Partners BHP is the largest provider of affordable housing for lower income households in the city of Boulder. Our mission is to "provide a broad range of safe, affordable and high quality housing programs for families of low and moderate income. BHP was formed by the City Council of the City of Boulder in 1966 under provisions of state law to address the need for decent, safe, and sanitary housing in Boulder. In 2004 the organization changed its name to Boulder Housing Partners. The new name acknowledges BHP s many relationships with private and public organizations that are helping to build community and supporting formerly homeless individuals as well as individuals and families of low and moderate income. BHP owns and manages more than 1000 units of affordable housing in 27 properties as well as several hundred Housing Choice Vouchers in Boulder. Our portfolio includes federal housing (public housing and Section 8), LIHTC housing, affordable workforce housing and other unrestricted market-rate rent housing. These properties provide a continuum of housing choices to a large cross-section of residents. BHP leases dwelling units to individuals, seniors, single parents, families, and those with disabilities. Further, BHP is an active partner with the City of Boulder in developing programs and policies to meet the housing needs of the community. BHP is an experienced developer of affordable housing and has used a variety of structures and funding sources including six Low Income Housing Tax Credit partnerships, conventional and federal financing, Private Activity Bonds, tax exempt bonds, federal HOME and CDBG grants, as well as fundraising from public and private sources. A nine-member board of Commissioners, all of whom are appointed by the mayor and one of whom is a current City Council member, provides direction for the organization. Day to day operations is supervised by the Executive Director. There are approximately 50 staff members in the organization. BHP performs many functions that include property management, development of new properties, aquisition of new units, resident services, administrative functions, and maintenance services. A single property management staff manages both the HUD and the non-hud portfolios. 5

6 B. Submittal 1. Elements to Include a. Cover Letter b. Statement of Qualifications. All firms must document in-depth experience with multiple successful applications for low income housing tax credits. In the Submittal, briefly describe the qualifications of the firm and key staff members. BHP requests that the description be as short as possible, preferably no more than two pages. To the extent pertinent information is available on the Internet, the Description may cross-reference to such information. The Description should include the following: i. Identify the individual(s) who will manage this contract on a day to day basis. ii. Describe the Manager s background. iii. Define the Manager s position within the firm and indicate the degree to which the Manager will be able to commit the firm s resources to the BHP. iv. Describe the Manager s availability and the Manager s other commitments and who those commitments might impact the Manager s availability. v. Identify other professionals and members of your firm who will be assigned to work on this project. vi. Describe each member s role and responsibilities and the aspects of each member s background relevant to this transaction. vii. Briefly describe your firm s qualifications, including a short list of relevant transactions and a list of current and past Housing Authority or other affordable housing clients and years of engagement. viii. Include any other information that your firm considers essential to a fair evaluation of your firm s experience and capabilities. ix. Provide the contact information for several references with whom your firm has successfully provided comparable work. x. Acknowledge that if selected as Tax Credit Advisor, your firm will provide to us proof of such Insurance upon request. xi. Please list any pending claims or disputes relating to prior opinions as counsel in any municipal finance transaction. xii. BHP reserves the right to request references after delivery of the Submittal. 6

7 c. Price Proposal Briefly submit a price proposal (the Price Proposal ) that will describe the basis for compensation for the following services: Work for and with BHP s project managers to review and comment on BHP s initial financial models and projections and preliminary deal structure for the two projects described as High Mar and 4600; Prepare a draft financial model using the CHFA application or other equivalent model to test feasibility; Provide advice and support for BHP s efforts to secure other sources as noted including grants from the Colorado Division of Housing and the City of Boulder; Provide advice and support for BHP s efforts to utilize, as and if needed, project based vouchers; Coordinate an RFP and selection process for a project lender and manage the negotiations for a Letter of Commitment suitable for an LIHTC application; Coordinate an RFP and selection process for a project investor or syndicator and manage the negotiations for a Letter of Commitment suitable for an LIHTC application; Prepare a checklist and schedule for all application requirements; Coordinate with BHP s project managers and staff to assemble the application(s) and submit the application to CHFA; Manage any subsequent application questions until issuance of the award letter; Participate in the financial analysis and proforma updating and review with BHP staff, the investor, the lender, and other consultants during the due diligence process through the closing of the tax credit partnership; and Coordinate the applications for, and provide advice during, the placed in service and final application submittals through issuance of the 8609 s. Price Proposal may be based on the size and type of the issue, hourly rates, blended hourly rates, or a set maximum fee. In addition, respondents have the option of including a discussion of any methods of compensation or budgeting they have employed in the past with other similar issuers. Prior to the award of the Contract, BHP intends to enter into negotiations concerning a fee structure which provides the best overall value to BHP. If an agreement cannot be reached with the highest ranked firm, negotiations will be attempted with the other firms. 7

8 2. Evaluation Criteria and Weight Factors Factors to be used in evaluating the responses will include, but are not limited to, the following: a. Qualifications of staff to be assigned to engagement. (50%) i. The ability to provide the requested services. ii. Quality of the responses and depth of experience. b. Proposed fees and compensation. (40%) c. References (10%) Fees and compensation will be an important factor in the evaluation of responses. However, the issuer will select the response that demonstrates the best value overall, including proposed alternatives, and meets the objectives of BHP. D. General Information References, if requested, will be used to supplement the scoring as noted above. 1. Submittal Rejection: BHP has the right to reject any and all submittals and waive any irregularities therein, if it is found to be in the best interest of BHP. Submittals not received by the required deadline are ineligible for consideration and will not be opened. BHP may change the deadline at any time in order to assure adequate review of the submittals. 2. Contract and Method of Payment: The final form of contract and scope of services will be negotiated between BHP and the top ranked firm after the selection process is complete. Invoices with proper documentation can be submitted on a monthly basis. 3. Limitation of Liability: BHP assumes no liability for costs incurred by firms in responding to the Request for Proposals or interview process. All submittals become a matter of public record upon submission. 4. Insurance Requirements: Generally, the following coverage is required: Commercial general liability--$150,000 per person and $1,000,000 per occurrence. Worker's Compensation Insurance--equal to or at least $100,000 per employee Automotive Insurance--$100,000/$300,000 for bodily injury and $50,000 for property damage. Errors and Omissions Insurance 8

9 5. Federal Fair Housing Laws: BHP does business in accordance with the Federal Fair Housing Law (The Fair Housing Amendments Act of 1988). It is illegal to discriminate against any person because of race, color, religion, sex, handicap, family status, national origin, or sexual performance. E. BHP Reservation of Rights: 1. BHP reserves the right to reject any or all proposals, to waive any informality in the RFP process, or to terminate the RFP process at any time, if deemed by BHP to be in its best interests. 2. BHP reserves the right not to award a contract pursuant to this RFP. 3. BHP reserves the right to terminate a contract awarded pursuant to this RFP, at any time for its convenience upon 10 days written notice to the successful bidder. 4. BHP reserves the right to inspect work at any time during the ongoing work. 5. BHP reserves the right to determine the days, hours and locations that the successful bidder shall provide the services called for in this RFP. 6. BHP reserves the right to retain all proposals submitted and not permit withdrawal for a period of 60 days subsequent to the deadline for receiving proposals without the written consent of BHP Procurement Officer. 7. BHP reserves the right to negotiate the fees proposed by the bidder if applicable to bid process. 8. BHP reserves the right to reject and not consider any proposal that does not meet the requirements of this RFP, including but not limited to incomplete proposals and/or proposals offering alternate or non-requested services. 9. BHP shall have no obligation to compensate any bidder for any costs incurred in responding to this RFP. 10. BHP shall reserve the right to at any time during the RFP or contract process to prohibit any further participation by a bidder or reject any proposal submitted that does not conform to any of the requirements detailed herein. E. Attachments: Attachment A: Summary Sources and Uses for 4600 and High Mar. 9

10 Project Name: Date: Developer: Spreadsheet Version: 4600 Broadway Febraury 14, 2012 BHP Acquisition Recommended Funding Scenario PUPA $4,100 AMI 40% (8) 50% (13 ) 60% (13 ) Bulk Discount 13.5% PROGRAM Total Units Broadway 34 SOURCES AND USES SUMMARY Sources First Mortgage (tax exempt PAB) $ 3,271,843 LTV 71.82% % of Dev Costs 53.90% Seller discount for bulk purchase 13.50% $ 711,018 4% LIHTC $ 0.90 $ 1,457,149 Deferred Developer's Fee $ 300,000 Grants CDOH $ 340,000 per unit subsidy $10,000 Total Sources $ 6,080,010 Uses Land and Building $ 5,266,800 Acquisition $ 102,180 Developer's Fee 8.24% $ 500,000 Project Reserves/Other $ 110,849 Project Contingency 1.48% $ 90,000 Total Uses $ 6,069,828 Sources less Uses (Gap) $10,182 SUMMARY ASSUMPTIONS AND MULTIPLIERS Revenue $371,718 Expenses $149,600 Net Operating Income $222,118 Repl Reserves per unit per month $300 Per unit per anum exps (w/out repl res) $4,100 Operating Expense Ratio 40% Total cash flow (Year 1): $28,972 Initial Debt Service Coverage 1.15 Total cash flow (Year 10): $70,419 Final Debt Service Coverage 1.36 Annual Expense Multiplier 3.00% Annual Income Multiplier 2.00% Vacancy 7.0% Permanent Loan Interest rate per Wells Fargo 4.250% Debt Service $193,146 Total cost per unit $178,524 Total soft cost / sqft $164 10

11 Project Name: High Mar Program: Independent Senior Living 1 BR (39) 2 BR (20) Date: 6-Sep-11 Spreadsheet Version: 4% Scenario with Funding Gap AMI Mix: 30% (16) 40% (17) 50% (16) 60% (10) Bedroom Mix: 1 BR1BA (39) 2 BR1BA (18) 2BR2BA (2) Rent Discount: 30% (0%) 40% (0%) 50% (3%) 60% (3%) PROGRAM Total Units 59 Percent Affordable 100% SOURCES AND USES SUMMARY Sources First Mortgage (PAB) $ 5,035,621 LTV 42% 4% LIHTC $ 3,063,091 Grants Land Acq. City of Boulder (NA) $ 430, City of Boulder (IH) $ 715, City of Boulder (NA) $ 350,000 Future City Investment $ 1,500,000 per unit subsidy $ 25,347 CO Div of Hsg (HOME) $ 590,000 per unit subsidy $ 10,000 Other grants $ 25,000 Deferred Developer Fee $ 280,629 percent of total dev fee 23% Total Sources $ 11,989,841 Uses Land $ 430,000 Site Work $ 691,239 Construction Hard Costs $ 7,913,018 Professional Fees and Soft Costs $ 578,725 Construction Interim Costs $ 682,721 Permanent Financing and Syndication Costs $ 302,137 Project Reserves $ 180,000 percent of hard costs 2% Development Fee $ 1,212,000 percent of eligible costs 12% Total Uses $ 11,989,840 Sources less Uses (gap) $ 0 ASSUMPTIONS AND MULTIPLIERS Effective Gross Income $ 561,832 Expenses $ (271,400) PUPA, w/o RR $ 4,600 Operating Expense Ratio 48% NOI $ 290,432 Replacement Reserves, per unit $ 300 Annual Debt Service $ (252,550) Total Cash Flow (Yr 1) $ 20,182 DCR (Yr 1) 1.15 Total Cash Flow (Yr 10) $ 64,776 DCR (Yr 10) 1.26 Annual Expense Multiplier 3% Vacancy Rate 7% PAB Interest Rate 4.00% Construction Loan Interest Rate 4.50% 4% LIHTC Credit Multiplier 3.28% Price per $ of Tax Credit $ 0.94 Construction hard cost, per unit $ 145,835 (includes site work) Soft cost, per unit $ 26,501 (excludes project reserves and dev fee) Total Dev Cost, per unit $ 203,218 (all-in, includes land) 11