EXECUTIVE SUMMARY HOUSING COMMISSION EXECUTIVE SUMMARY SHEET

ITEM 103 DATE: May 5, 2017 COUNCIL DISTRICT(S): 3 EXECUTIVE SUMMARY HOUSING COMMISSION EXECUTIVE SUMMARY SHEET ORIGINATING DEPARTMENT: Real Estate Division CONTACT/PHONE NUMBER: Ted Miyahara (619) 578-7548 REQUESTED ACTION: Authorize the issuance of Housing Authority of the City of San Diego Multifamily Housing Revenue Bonds, which are allocated by the State, to facilitate the development of Park & Market, a 426unit mixed-use development, located in the East Village Neighborhood of Downtown San Diego, which will include 85 units that will remain affordable for 55 years. EXECUTIVE SUMMARY OF KEY FACTORS: Park & Market is a proposed mixed-use development located at the northwest corner of Park Boulevard and Market Street that will be composed of 426 rental units, retail and office space. Under the terms of the developers Disposition and Development Agreement with the City of San Diego, the developer will be required to designate 85 units (equivalent to 20 percent of the development) as affordable to households earning up to 50 percent of the Area Median Income. Net proceeds of the sale of the City-owned property to the developer, approximately $12.3 million, will be deposited into City s Low-Moderate Income Housing Asset Fund to be used for future affordable housing developments throughout the city. There will be no Housing Commission funds in this transaction; the Housing Commission is only recommending approval of Multifamily Housing Revenue Bonds. The Housing Commission Board of Commissioners and the Housing Authority of the City of San Diego previously approved the preliminary bond authorization for Park & Market on June 17, 2016, (HCR16-056) and July 19, 2016, (HAR16-023) respectively. Total development cost for residential units is $237,979,974. Total development cost per residential unit is $558,638. Factors contributing to increased total development cost include: High-rise infill development; Four levels of subterranean parking; 80/20 deal structure (80% market-rate and 20% affordable); units designed for a market-rate tenant, building is highly amenitized, units larger than a typical affordable housing development; Prevailing wage development; Leadership in Energy and Environmental Design (LEED) silver or equivalent design requirements; and 36-month construction schedule.

REPORT DATE ISSUED: April 27, 2017 REPORT NO: HCR17-039 ATTENTION: SUBJECT: Chair and Members of the San Diego Housing Commission For the Agenda of May 5, 2017 Final Bond Authorization for Park & Market COUNCIL DISTRICT: 3 REQUESTED ACTION Authorize the issuance of Housing Authority of the City of San Diego Multifamily Housing Revenue Bonds, which are allocated by the State, to facilitate the development of Park & Market, a 426-unit mixed-use development, located in the in the East Village Neighborhood of Downtown San Diego, which will include 85 units that will remain affordable for 55 years. STAFF RECOMMENDATION That the San Diego Housing Commission (Housing Commission) take the following actions: 1) Recommend that the Housing Authority of the City of San Diego (Housing Authority) authorize the issuance of up to $216,500,000 in tax-exempt Multifamily Housing Revenue Bonds, which are allocated by the State, to facilitate the development of Park & Market, a 426-unit mixed-use development, located in the in the East Village Neighborhood of Downtown San Diego, which will include 85 units that will remain affordable for 55 years;, and 2) Request that the San Diego City Council (City Council) hold a Tax Equity and Fiscal Responsibility Act (TEFRA) public hearing and adopt a resolution approving the issuance of Multifamily Housing Revenue Bonds in an amount up to $216,500,000. SUMMARY A development summary is included as Attachment 1.

April 27, 2017 Final Bond Authorization for Park & Market Page 2 Address Table 1 Development Details Northwest Corner of Park Blvd. & Market Street Council District 3 Community Plan Area East Village Development Type New Construction Construction Type Type I Stories 34 Parking Type Subterranean; 617 stalls Housing Type Mixed Use Lot Size Approximately 1.19 acres, 51,613 square feet Density 358 dwelling units per acre Units 426 units - 340 market rate and 85 affordable, 1 manager s unit Unit Mix 101 Studio, 152 one-bedroom, 126 two-bedroom units and 46 three bedroom units, 1 manager Affordable Unit Mix 20 Studio, 31 one-bedroom, 26 two-bedroom units and 8 three-bedroom units Gross Building Area 471,444 square feet Residential Rental 23,000 square feet Retail 52,000 square feet Office 542,190 square feet The Development Park & Market is a proposed mixed-use development located at the northwest corner of Park Boulevard and Market Street that will be composed of 426rental units, retail and office space (Attachment 2 Site Map). The 34-story high-rise has approximately 23,000 square feet of ground-floor retail, 52,000 square feet of office, 5,200 square feet of public-private space, including an outdoor amphitheater and public plaza, the renovation of the historic Remmen House, and four levels of subterranean parking. Private amenities in the residential building will include a community room, fitness center, swimming pool, and multiple outdoor terraces. The developer has entered into a Disposition and Development Agreement (DDA) with the City of San Diego for the acquisition and development of City-owned land. Under the terms of the DDA, the developer will be required to designate 85 units (equivalent to 20 percent of the development) as affordable to households earning up to 50 percent of the Area Median Income. In addition to the on-site affordable units, net proceeds of the sale of the property to the developer, approximately $12.3 million, will be deposited in the City s Low-Moderate Income Housing Asset Fund (LMIHAF) to be used for future affordable housing developments throughout the city. Development Team Park & Market will be co-owned by an affiliate of Holland Partner Group (HPG) and an affiliate of North America Sekisui House (NASH). The development will be constructed by HPG s affiliate, Holland Construction. Founded in 2001, HPG, based in Vancouver, Washington, is a real estate investment company. Current assets under management and development represent approximately $7.5 billion in 30,000 apartment units across the western United States. The development of Park & Market will be managed by HPG s Southern California office, which currently has eight developments composed of more than 2,500 units in various stages of development. NASH is a wholly owned

April 27, 2017 Final Bond Authorization for Park & Market Page 3 company of Sekisui House, LTD, one of Japan s largest single-family homebuilders. Founded in 1960, Sekisui House is a publicly traded company and has built millions of homes worldwide. Ownership Structure Park & Market Development Partners, LP will be the owner of the affordable units in Park & Market. Entities controlled by HPG and NASH will serve as the co-general partner and tax credit limited partner. Park & Market Apartments, LLC will own the 340 market rate units and the managers unit. The market rate owner will be 100% owned by an entity controlled by NASH and HPG. The developer s statement for public disclosure is included as Attachment 3. Table 2 - Development Team & Ownership Structure Summary ROLE FIRM/CONTRACT Co-Developer Holland Partner Group, LLC North America Sekisui House (NASH), LLC Owner Park & Market Development Partners, LP General Contractor Holland Construction Architect Carrier Johnson Financing Structure Park & Market has an estimated total development cost of $283,061,481. The developer estimates that costs attributed to residential portions of the development are approximately $237,979,974 and costs attributed to the commercial portions are $45,081,507. The prorated hard costs of the residential portion of the development are approximately $174,551,726. The development will be financed with a combination of Federal 4 percent tax credits, tax-exempt Multifamily Housing Revenue Bonds and developer equity. Bond proceeds will only be applied to fund the multifamily portion of the development. There will be no Housing Commission financing provided to the development. The developer s project pro forma is provided as Attachment 4. Table 3 Park & Market Estimated Sources and Uses of Financing Permanent Financing Sources Amounts Permanent Financing Uses Amounts Permanent Loan $216,500,000 Acquisition Costs $12,300,904 Developer Equity (commercial) 45,081,507 Hard Costs 200,416,282 Developer Equity (residential) 4,761,564 Soft Costs 58,440,490 Tax Credit Equity 16,718,410 Reserves 3,763,656 Developer Fee 8,140,149 Total Development Cost $283,061,481 Total Development Cost $283,061,481 Development Cost Key Performance Indicators Housing Commission staff has identified development cost performance indicators, which were used to evaluate the proposed development. The key performance indicators listed in Table 4 are commonly used by real estate industry professionals and affordable housing developers.

April 27, 2017 Final Bond Authorization for Park & Market Page 4 Table 4 Key Performance Indicators* Development Cost Per Residential Unit $237,979,974 426 units = $558,638 Land Cost Per Unit $9,151,873 426 units = $21,483 Gross Building Square Foot Hard Cost $200,416,282 471,444 sq. ft. = $425 Net Rentable Square Foot Hard Cost $200,416,282 404,912 sq. ft. = $494 *Key performance indicators are based on estimate of total costs associated with residential portion of the development only. Prevailing Wages Pursuant to the Disposition & Development Agreement with the City of San Diego, the development is subject to payment of state prevailing wages. Project Comparison Chart There are multiple factors and variables that influence the cost of developing multifamily affordable housing, including but not limited to project location, site conditions, site improvements needed, environmental factors, land use approval process, community involvement, construction type, design requirements/constraints, economies of scale, City impact fees, developer experience and capacity, and amenities necessary to gain tax credit approval. Table 5 shows a comparison of the subject property and other developments of the same construction type. Table 5 Comparable Development Projects Project Name Year Construction Type Units Unit Mix Bedroom Type Total Development Cost (Residential) Cost Per Unit HC Subsidy Per Unit. Gross Hard Cost Per Sq.Ft. Subject- Park & 0-3 2017 I 426 Market $237,979,974 $558,638 $0 $425 Ten Fifty B 2010 I 229 0-3 $88,682,000 $387,258 $0 $447 Celadon I 2012 I 129 0-1 $43,938,066 $340,605 $0 $302 Celadon II 2012 I 121 0-1 $38,077,021 $314,686 $0 $302 Atmosphere I 2014 I 100 0-3 $40,367,519 $403,675 $30,000 $330 Development Cost Factors Factors contributing to increased total development cost include: High-rise infill development Four levels of subterranean parking 80/20 deal structure (80% market-rate and 20% affordable); units designed for a market-rate tenant, building is highly amenitized, units larger than a typical affordable housing development. Prevailing wage development Leadership in Energy and Environmental Design (LEED) silver or equivalent design requirements 36-month construction schedule

April 27, 2017 Final Bond Authorization for Park & Market Page 5 Proposed Housing Bonds The Housing Commission utilizes the Housing Authority s tax-exempt borrowing status to pass on lower interest rate financing (and make Federal 4 percent tax credits available) to developers of affordable rental housing. The Housing Authority s ability to issue bonds is limited under the U.S. Internal Revenue Code. To issue bonds for a development, the Housing Authority must first submit an application to the California Debt Limit Allocation Committee (CDLAC) for a bond allocation. Prior to submitting applications to CDLAC, developments are brought before the Housing Commission, Housing Authority and City Council. Housing Authority bond inducement resolutions must be obtained prior to application submittal, and City Council Tax Equity and Fiscal Responsibility Act (TEFRA) resolutions must be secured no later than 30 days after application submittal. These actions were previously completed for Park & Market on July 19, 2016. Pursuant to the Disposition & Development Agreement between the City of San Diego and the developer, the affordable unit requirement was reduced from 86 units to 85 units. CDLAC requested that the City Council hold a subsequent TEFRA hearing to reflect the change to the affordable unit requirements of the development. A new TEFRA hearing will be held on May 23, 2017. On January 13, 2017, the developer for Park & Market applied for a bond allocation of $216,500,000. CDLAC subsequently approved an allocation of tax-exempt bonds on March 17, 2017. The developer proposes to issue the bonds through a tax-exempt public offering. The bonds will meet all requirements of the Housing Commission s Multifamily Housing Revenue Bond Program policy and will fully comply with the City of San Diego s (City) ordinance on bond disclosure and credit enhancement. The developer proposes that the bonds will be used for construction financing and permanent financing. A general description of the Multifamily Housing Revenue Bond Program and the actions that must be taken by the Housing Authority and by the City Council to initiate and finalize proposed financings are described in Attachment 5. Public Disclosure and Bond Authorization The bonds will be sold through a public offering with Citigroup Global Markets Inc. acting as the underwriter and remarketing agent. The Bonds will be secured by a direct pay letter of credit issued by Bank of Tokyo Mitsubishi UBJ Bank Ltd. In addition, the bonds will be subject to continuing disclosure requirements by the borrower only and are expected to be rated A1/P1 by Moody s Investor Services and A+/A-1 by SP Global based on the credit rating of the letter of credit bank. It is anticipated that the Bonds will be issued in quarterly installments up to an aggregate of $216,500,000 pursuant to a fixed draw schedule. Repayment of draws under the direct pay letter of credit, which will have an initial term of five years, will be secured by the corporate guaranty of NASH. The bonds are anticipated to remain in variable rate mode through the final maturity of 40 years or earlier redemption. The bonds do not have any scheduled principal amortization. The bonds will also be secured by a Deed of Trust in favor of the Trustee for the benefit of the bondholders. The following documents will be executed on behalf of the Housing Authority: Trust Indenture, Loan Agreement, Regulatory Agreement, and a Bond Purchase Agreement. At the time of docketing for the Housing Authority, all bond documents in substantially final form will be presented to members of the Housing Authority. Any changes to the documents following Housing Authority approval require the consent of the City Attorney s office and bond counsel.

April 27, 2017 Final Bond Authorization for Park & Market Page 6 An Official Statement in preliminary form will be used to market the bonds to investors. The official statement, which will be executed by the borrower, will contain limited information about the Housing Authority as issuer. This information verifies that the Housing Authority is an appropriate issuer of the bonds and that there is not existing or threatened litigation that would jeopardize the validity of the bonds. Financial statements of the Housing Commission or Housing Authority are not included in the Official Statement. Attachment 6 contains the language regarding the Housing Authority that will be used in the Official Statement. The bonds will be issued pursuant to a Trust Indenture between the Housing Authority and the Trustee (U.S. Bank). Based upon instructions contained in the Trust Indenture, the Trustee will draw down bond proceeds, disburse bond proceeds for eligible costs, collect loan payments from the developer, draw on the letter of credit to make payments to bondholders, reimburse the letter of credit bank for principal and interest draws and with the proceeds of bond remarketing, and hold collateral to secure payment of the bonds. Construction monitoring will be performed by NASH, as equity investor. Under the terms of the Loan Agreement, the Housing Authority will loan the proceeds of the bonds to the borrower in order to develop the project. The Loan Agreement sets out the terms of repayment and the security for the loan, and the Housing Authority assigns its rights to receive repayments under the loan to the Trustee. The Bond Purchase Agreement outlines the terms under which the Housing Authority will issue and the underwriter will purchase the bonds. The Bond Purchase Agreement is executed and delivered by the Housing Authority, the borrower and the underwriter. Since the bonds will not be repaid using any City or Housing Authority revenues, it is not appropriate to provide any information about the City s finances. The Regulatory Agreement will be recorded against the affordable unit in order to ensure the long-term use of the 85 units included in the development as affordable housing. The Regulatory Agreement will also ensure that the development complies with all applicable federal and state laws. Staff is also working with the City s Disclosure Practices Working Group to assure that the issuance of Housing Authority bonds is in conformance with the City s disclosure requirements. Financial Advisor s Recommendation Ross Financial will be the bond financial advisor, and Squire Patton Boggs (US) LLP will be the bond counsel to work on the development. After evaluating the terms of the proposed financing and the public benefits to be achieved, it is the financial advisor s recommendation that the Housing Authority proceed with the issuance of the bonds. The financial advisor s analysis and recommendation is included as Attachment 7.

April 27, 2017 Final Bond Authorization for Park & Market Page 7 Estimated Development Schedule The estimated development timeline is as follows. Milestones Estimated Dates Housing Commission proposed final bond recommendation to May 5, 2017 Housing Authority [decision on all bonds require Housing Authority approval] Housing Authority proposed final bond authorization May 23, 2017 Estimated bond issuance and escrow closing June 2017 Estimated start of construction July 2017 Estimated completion of construction July 2020 AFFORDABLE HOUSING IMPACT Under the proposed bond financing, Park & Market would restrict 20 percent of its units to households with incomes at or below 50 percent of San Diego Area Median Income (AMI). The remaining 80 percent of the units will be market-rate. The affordable units will be restricted for a 55-year term. Table 6 summarizes the affordability: Table 6 Park & Market Affordability & Monthly Estimated Rent Table Unit Type Restrictions AMI Number Net Rent Estimated Rent Savings of Units Market Rents* Per Unit Studio Tax-Credit 50% AMI 20 $743 $1,700 $957 1-bedroom Tax-Credit 50% AMI 31 $796 $2,200 $1454 2-bedroom Tax-Credit 50% AMI 26 $956 $3,300 $2,344 3-bedroom SDHC 50% AMI 8 $1,063 $4,400 $3,337 Studio Market - 81 - $1,700-1-bedroom Market - 121 - $2,200-2-bedroom Market - 100 - $3,300-3-bedroom Market - 38 - $4,400 - Manager Market - 1 - - - Total 426 *Market Feasibility Analysis completed by the Concord Group FISCAL CONSIDERATIONS The proposed funding sources and uses approved by this action are included in the Housing Authorityapproved Fiscal Year (FY) 2017 Housing Commission Budget. Approving this action will not change the FY 2017 total budget. Funding sources approved by this action will be as follows: Bond Issuance Fees - $270,625 Funding uses approved by this action will be as follows: Rental Housing Finance Program Administration Costs - $270,625

April 27, 2017 Final Bond Authorization for Park & Market Page 8 The bonds would not constitute a debt of the City. If bonds are ultimately issued for the development, the bonds will not financially obligate the City, the Housing Authority or the Housing Commission because security for the repayment of the bonds will be limited to specific private revenue sources of the development. Neither the faith and credit nor the taxing power of the City or the Housing Authority would be pledged to the payment of the bonds. The developer is responsible for the payment of all costs under the financing, including the Housing Commission annual administrative fee, as well as Housing Commission bond council and financial advisor fees. PREVIOUS COUNCIL AND COMMITTEE ACTIONS: On June 17, 2016, the Housing Commission recommended approval of preliminary bond items for Park & Market. On July 19, 2016, the Housing Authority and City Council approved preliminary bond items for Park & Market. On September 20, 2016, the City of San Diego Historical Resources Board voted to approve the development. On October 26, 2016, the Civic San Diego Board granted design review approval. On November 17, 2016, the City Planning Commission held a public hearing and approved the development s entitlements. On December 13, 2016, the City Council approved the Disposition and Development Agreement for this development. COMMUNITY PARTICIPATION and PUBLIC OUTREACH EFFORTS On October 19, 2016, the Downtown Community Planning Council voted 16-0 in support of the development. KEY STAKEHOLDERS and PROJECTED IMPACTS Stakeholders include Holland Partner Group, North America Sekisui House, Civic San Diego, the City of San Diego, and the East Village Community. Development of the property is expected to have a positive impact on the community because it will redevelop the site and provide affordable housing opportunities to future tenants. ENVIRONMENTAL REVIEW Development within the Downtown Community Planning area is covered under the following documents, all referred to as the "Downtown FEIR": Final Environmental Impact Report (FEIR) for the San Diego Downtown Community Plan, Centre City Planned District Ordinance, and 10 th Amendment to the Centre City Redevelopment Plan, certified by the former Redevelopment Agency ("Former Agency") and the City Council on March 14, 2006 (Resolutions R-04001 and R-301265, respectively); subsequent addenda to the FEIR certified by the Former Agency on August 3, 2007 (Former Agency Resolution R-04193), April 21, 2010 (Former Agency Resolution R-04510), and August 3, 2010 (Former Agency Resolution R-04544), and certified by the City Council on February 12, 2014 (City Council Resolution R~308724) and July 14, 2014 (City Council Resolution R-309115); and, the Final Supplemental Environmental Impact Report for the Downtown San Diego Mobility Plan certified by the City Council on June 21, 2016 (Resolution R-310561). The DowntoWI1 FEIR was adopted prior to the requirement for documents prepared under the California Environmental Quality Act (CEQA) to consider a project's impacts related to greenhouse gas emissions. The effect of greenhouse gas emissions on climate change, and the subsequent adoption of guidelines for analyzing and evaluating the significance of data, is not considered "new information" under State CEQA Guidelines Section 15162 triggering further environmental review because such information was available and known before approval of the Downtown FEIR. Nonetheless, development within the Downtown Community Planning area is also covered under the following documents, all referred to as the "CAP FEIR": FEIR for the City of San Diego Climate Action Plan (CAP), certified by the City Council on December 15,

April 27, 2017 Final Bond Authorization for Park & Market Page 9 2015 (City Council Resolution R-310176), and the Addendum to the CAP, certified by the City Council on July 12, 2016 (City Council Resolution R-310596). The Downtown FEIR and CAP FEIR are both "Program EIRs" prepared in compliance with California Environmental Quality Act (CEQA) Guidelines Section 15168. Consistent with best practices suggested by Section 15168, a Downtown 15168 Consistency Evaluation ("Evaluation") has been completed for the project. The Evaluation concluded that the environmental impacts of the project were adequately addressed in the Downtown FEIR and CAP FEIR; that the project is within the scope of the development program described in the Downtown FEIR and CAP FEIR and is adequately described within both documents for the purposes of CEQA; and, that none of the conditions listed in Section 15162 exist. Therefore, no further environmental documentation is required under CEQA. Processing under the National Environmental Policy Act is not required as no federal funds are involved in this action. Respectfully submitted, Ted Miyahara Ted Miyahara Vice President, Housing Finance, Programs & Compliance Real Estate Division Approved by, Deborah N. Ruane Deborah N. Ruane Executive Vice President & Chief Strategy Officer San Diego Housing Commission Attachments: 1) Development Summary 2) Site Map 3) Developer Statement for Public Disclosure 4) Project Pro Forma 5) Multifamily Housing Revenue Bond Program 6) Housing Authority Official Statement Language 7) Financial Advisor s Analysis Hard copies are available for review during business hours at the security information desk in the main lobby and at the fifth floor reception desk at the San Diego Housing Commission offices at 1122 Broadway, San Diego, CA 92101 and at the Office of the San Diego City Clerk, 202 C Street, San Diego, CA 92101. You may also review complete docket materials in the Public Meetings section of the San Diego Housing Commission website at www.sdhc.org

Attachment 1 Table 1 Development Details Address Northwest Corner of Park Blvd. & Market Street Council District 3 Community Plan Area East Village Development Type New Construction Construction Type Type I Stories 34 Parking Type Subterranean; 617 stalls Housing Type Mixed Use Lot Size Approximately 1.19 acres, 51,613 square feet Density 358 dwelling units per acre Units 426; 340 market rate and 85 affordable, 1 manager Unit Mix 101 Studio, 152 one-bedroom, 126 two-bedroom units and 46 three bedroom units, 1 manager Affordable Unit Mix 20 Studio, 31 one-bedroom, 26 two-bedroom units and 8 three-bedroom units Gross Building Area 471,444 square feet Residential Rental 23,000 square feet Retail 52,000 square feet Office 542,190 square feet Table 2 - Development Team & Ownership Structure Summary ROLE FIRM/CONTRACT Co-Developer Holland Partner Group, LLC North America Sekisui House (NASH), LLC Owner Park & Market Development Partners, LP General Contractor Holland Construction Architect Carrier Johnson Table 3 Park & Market Estimated Sources and Uses of Financing Permanent Financing Sources Amounts Permanent Financing Uses Amounts Permanent Loan $216,500,000 Acquisition Costs $12,300,904 Developer Equity 45,081,507 Hard Costs 200,416,282 (commercial) Developer Equity (residential) 4,761,564 Soft Costs 58,440,490 Tax Credit Equity 16,718,410 Reserves 3,763,656 Developer Fee 8,140,149 Total Development Cost $283,061,481 Total Development Cost $283,061,481

Table 4 Key Performance Indicators* Development Cost Per Unit $237,979,974 426 units = $558,638 Land Cost Per Unit $9,151,873 426 units = $21,483 Gross Building Square Foot Hard Cost $200,416,282 471,444 sq. ft. = $425 Net Rentable Square Foot Hard Cost $200,416,282 404,912 sq. ft. = $494 *Development Cost Per Unit and Square Foot Hard Costs based on estimate of total costs associated with residential portion of development and prorated hard costs. Table 5 Comparable Development Projects Project Name Year Construction Type Units Total Development Cost (Residential) Cost Per Unit HC Subsidy Per Unit. Gross Hard Cost Per Sq.Ft. Subject- Park & Market 2017 I 426 $237,979,974 $558,638 $0 $425 Ten Fifty B 2010 I 229 $88,682,000 $387,258 $0 $447 Celadon I 2012 I 129 $43,938,066 $340,605 $0 $302 Celadon II 2012 I 121 $38,077,021 $314,686 $0 $302 Atmosphere I 2014 I 100 $40,367,519 $403,675 $30,000 $330 Table 6 Park & Market Affordability & Monthly Estimated Rent Table Unit Type Restrictions AMI Number of Units Gross Rents Estimated Market Rents* Rent Savings Per Unit Studio Tax-Credit 50% AMI 20 $743 $1,700 $957 1-bedroom Tax-Credit 50% AMI 31 $796 $2,200 $1454 2-bedroom Tax-Credit 50% AMI 26 $956 $3,300 $2,344 3-bedroom SDHC 50% AMI 8 $1,063 $4,400 $3,337 Studio Market - 81 - $1,700-1-bedroom Market - 121 - $2,200-2-bedroom Market - 100 - $3,300-3-bedroom Market - 38 - $4,400-1 Manager Market - - - - - Total 426 *Market Feasibility Analysis completed by the Concord Group

ATTACHMENT 2

ATTACHMENT 3

ATTACHMENT 4 CALIFORNIA TAX CREDIT ALLOCATION COMMITTEE 2017 4% FEDERAL CREDIT WITH TAX-EXEMPT BONDS APPLICATION FOR LOW-INCOME HOUSING TAX CREDITS, INCLUDING STATE FARMWORKER CREDITS December 27, 2016 Version II. APPLICATION - SECTION 1: APPLICANT STATEMENT, CERTIFICATION AND NOTARY APPLICANT: PROJECT NAME: Park & Market Development Partners, LP Park & Market PLEASE INCLUDE APPLICATION FEE WITH APPLICATION SUBMISSION Check Only The undersigned applicant hereby makes application to the California Tax Credit Allocation Committee ( TCAC ) for a reservation of Federal and State Low-Income Housing Tax Credits ( Credits ) in the amount(s) of: $1,671,841 annual Federal Credits total State Farmworker Credits for the purpose of providing low-income rental housing as herein described. I understand that Credit amount preliminarily reserved for this project, if any, may be adjusted over time based upon changing project costs and financial feasibility analyses which TCAC is required to perform on at least three occasions. I agree it is my responsibility to provide TCAC with the original complete application and the Local Reviewing Agency an exact copy of the application. I agree that I have included a letter from the local government and the appropriate Local Reviewing Agency of the jurisdiction in which the project is located identifying the agency designated as the Local Reviewing Agency for the Tax Credit Allocation Committee. I agree that it is also my responsibility to provide such other information as TCAC requests as necessary to evaluate my application. I represent that if a reservation or allocation of Credit is made as a result of this application, I will also furnish promptly such other supporting information and documents as may be requested. I understand that TCAC may verify information provided and analyze materials submitted as well as conduct its own investigation to evaluate the application. I recognize that I have an affirmative duty to inform TCAC when any information in the application or supplemental materials is no longer true and to supply TCAC with the latest and accurate information. I acknowledge that if I receive a reservation of Tax Credits, I will be required to submit requisite documentation at the following stages: updated development timetable under regulation section 10326(j)(4), and the time the project is placed-in-service. I represent I have read Section 42 of the Internal Revenue Code (IRC) pertaining to Federal Tax Credits, and if applying for State Tax Credits, I represent I have also read California Health and Safety Code Sections 50199.4 et seq. and California Revenue and Taxation Code Sections 12206, 17058, and 23610.5 pertaining to the State Tax Credit program. I understand that the Federal and State Tax Credit programs are complex and involve long-term maintenance of housing for qualified low-income households. I acknowledge that TCAC has recommended that I seek advice from my own tax attorney or tax advisor. I certify that I have read and understand the provisions of Sections 10322(a) through (h) related to application filing deadlines, forms, incomplete applications, and application changes. April 18, 2016 Version 1 Application

E. Land Density: x Feet or 1.21 Acres 52,708 Square Feet 353.53 If irregular, specify measurements in feet, acres, and square feet: F. Building Information Total Number of Buildings: 1 Residential Buildings: 1 Community Buildings: Commercial/ Retail Space: Yes If Commercial/ Retail Space, explain: (include use, size, location, and purpose) The project includes 22,865 square feet neighborhood serving commercial spaces at the street level - including cafes, business storefronts, restaurants, and the like. Are Buildings on a Contiguous Site? Yes If not Contiguous, do buildings meet the requirements of IRC Sec. 42(g)(7)? N/A Do any buildings have 4 or fewer units? If yes, are any of the units to be occupied by the owner or a person related to the owner (IRC Sec. 42(i)(3)(c))? No N/A G. Project Unit Number and Square Footage Total number of units: Total number of non-tax credit units (excluding managers' units) (i.e. market rate units): Total number of units (excluding managers units): Total number of low-income units: Ratio of low-income units to total units (excluding managers units): Total square footage of all residential units (excluding managers units): Total square footage of low-income units: Ratio of low-income residential to total residential square footage (excluding managers units): Applicable fraction, smaller of unit or square footage ratio (used on "Basis & Credits"): Total community room square footage: Total commercial/ retail space square footage: Total common space square footage (including managers units): Total parking structure square footage (excludes car-ports and "tuck under" parking): **Total Square Footage of All Project Structures (excluding commercial/retail): *equals: "total square footage of all residential units" + "total community room square footage" + "total common space" + "total parking structure square footage") 426 340 425 85 20.00% 404,912 74,967 18.51% 18.51% 71,225 404,912 Total Project Cost per Unit Total Residential Project Cost per Unit Total Eligible Basis per Unit $664,464 $558,638 $506,380 H. Tenant Population Data Completion of this section is required. The information requested in this section is for national data collection purposes, and is not intended for threshold and competitive scoring use; however, the completed table should be consistent with information provided in the application and attachments. Indicate the number of units anticipated for the following populations: Homeless/formerly homeless N/A Transitional housing N/A Persons with physical, mental, development disabilities N/A Persons with HIV/AIDS N/A Transition age youth N/A Farmworker N/A Family Reunification N/A Other: N/A Units with tenants qualifying as two or more of the above (explain): For 4% federal applications only: Rural area consistent with TCAC methodology N/A April 18, 2016 Version 10 Application

III. PROJECT FINANCING - SECTION 1: CONSTRUCTION FINANCING A. Construction Financing List Below All Projected Sources Required To Complete Construction Name of Lender/Source 1) Housing Authority of City of San Diego 2) NASH/Holland Equity (residential) 3) NASH/Holland Equity (commercial) 4) Deferred developer fee 5) 6) 7) 8) 9) 10) 11) 12) Term (months) Interest Rate 480 3.515% Total Funds For Construction: Amount of Funds $216,500,000 $21,479,974 $45,081,507 $283,061,481 1) Lender/Source: Housing Authority of City of San Diego 2) Lender/Source: NASH/Holland Equity (residential) Street Address: 1122 Broadway #300 Street Address: 5000 East Spring Street, Suite 500 City: San Diego, CA 92101 City: Long Beach, CA 90815 Contact Name: Cameron Shariati Contact Name: Philip Williams Phone Number: 619-578-7474 Ext.: Phone Number: (562) 270-9170 Ext.: Type of Financing: Tax Exempt Bonds Type of Financing: Equity Is the Lender/Source Committed? Yes Is the Lender/Source Committed? Yes 3) Lender/Source: NASH/Holland Equity (commercial) 4) Lender/Source: Deferred developer fee Street Address: 5000 East Spring Street, Suite 500 Street Address: City: Long Beach, CA 90815 City: Contact Name: Philip Williams Contact Name: Phone Number: (562) 270-9170 Ext.: Phone Number: Ext.: Type of Financing: Equity Type of Financing: Is the Lender/Source Committed? Yes Is the Lender/Source Committed? No 5) Lender/Source: 6) Lender/Source: Street Address: Street Address: City: City: Contact Name: Contact Name: Phone Number: Ext.: Phone Number: Ext.: Type of Financing: Type of Financing: Is the Lender/Source Committed? No Is the Lender/Source Committed? No 7) Lender/Source: 8) Lender/Source: Street Address: Street Address: City: City: Contact Name: Contact Name: Phone Number: Ext.: Phone Number: Ext.: Type of Financing: Type of Financing: Is the Lender/Source Committed? No Is the Lender/Source Committed? No April 18, 2016 Version 13 Application

III. PROJECT FINANCING - SECTION 2: PERMANENT FINANCING A. Permanent Financing List Below All Projected Sources Required To Complete Construction Name of Lender/Source 1) Housing Authority of City of San Diego 2) NASH/Holland Equity (commercial) 3) NASH/Holland Equity (residential) 4) 5) 6) 7) 8) 9) 10) 11) 12) Term (months) 480 Interest Rate Residual Receipts / Deferred Pymt. Annual Debt Service 3.515% $10,087,803 $216,500,000 $45,081,507 $4,761,564 Total Permanent Financing: Total Tax Credit Equity: Total Sources of Project Funds: Amount of Funds $266,343,071 $16,718,410 $283,061,481 1) Lender/Source: Housing Authority of City of San Diego 2) Lender/Source: NASH/Holland Equity (commercial) Street Address: 1122 Broadway #300 Street Address: 5000 East Spring Street, Suite 500 City: San Diego, CA 92101 City: Long Beach, CA 90815 Contact Name: Cameron Shariati Contact Name: Philip Williams Phone Number: 619-578-7474 Ext.: Phone Number: (562) 270-9170 Ext.: Type of Financing: Tax Exempt Bonds Type of Financing: Equity Is the Lender/Source Committed? Yes Is the Lender/Source Committed? Yes 3) Lender/Source: NASH/Holland Equity (residential) 4) Lender/Source: Street Address: 5000 East Spring Street, Suite 500 Street Address: City: Long Beach, CA 90815 City: Contact Name: Philip Williams Contact Name: Phone Number: (562) 270-9170 Ext.: Phone Number: Ext.: Type of Financing: Equity Type of Financing: Is the Lender/Source Committed? Yes Is the Lender/Source Committed? No 5) Lender/Source: 6) Lender/Source: Street Address: Street Address: City: City: Contact Name: Contact Name: Phone Number: Ext.: Phone Number: Ext.: Type of Financing: Type of Financing: Is the Lender/Source Committed? No Is the Lender/Source Committed? No April 18, 2016 Version 15 Application

C. Market Rate Units (a) (b) (c) Proposed Monthly Rent (Less Utilities) (d) Total Monthly Rents (b x c) Bedroom Type(s) Number of Units SRO/Studio 35 $2,270 $79,450 SRO/Studio 46 $2,410 $110,860 1 Bedroom 57 $2,660 $151,620 1 Bedroom 16 $2,930 $46,880 1 Bedroom 48 $3,310 $158,880 2 Bedrooms 85 $4,119 $350,150 2 Bedrooms 12 $6,440 $77,280 2 Bedrooms 3 $6,083 $18,250 3 Bedrooms 36 $4,580 $164,880 3 Bedrooms 2 $9,100 $18,200 Total # Units: 340 Total: $1,176,450 Aggregate Monthly Rents For All Units: Aggregate Annual Rents For All Units: $1,245,048 $14,940,576 D. Rental Subsidy Income/Operating Subsidy Complete spreadsheet "Subsidy Contract Calculation" E. Miscellaneous Income Number of Units Receiving Assistance: Length of Contract (years): Expiration Date of Contract: Total Projected Annual Rental Subsidy: Annual Income from Laundry Facilities: Annual Income from Vending Machines: Annual Interest Income: Other Annual Income: parking, storage, bike storage, damage Total Miscellaneous Income: Total Annual Potential Gross Income: $573,660 $573,660 $15,514,236 F. Monthly Resident Utility Allowance by Unit Size (utility allowances must be itemized and must agree with the applicable utility allowance schedule) SRO / STUDIO 1 BR 2 BR 3 BR 4 BR ( ) BR Space Heating: $11 $13 $14 $16 Water Heating: $5 $6 $9 $13 Cooking: $7 $8 $9 $10 Lighting: Electricity: Water:* $16 $19 $26 $34 Other: (specify here) Total: $39 $46 $58 $73 *PROJECTS PROPOSING UNITS WITH INDIVIDUAL WATER METERS MUST INCLUDE A WATER ALLOWANCE. Name of PHA or California Energy Commission Providing Utility Allowances: San Diego Housing Commission At application, use of the CUAC is limited to new construction projects. April 18, 2016 Version 19 Application

G. Annual Residential Operating Expenses Administrative Management Advertising: Legal: Accounting/Audit: Security: Other: Onsite administration Total Administrative: Total Management: $101,814 $100,536 $202,350 $507,377 Utilities Fuel: Gas: Electricity: Water/Sewer: Total Utilities: $208,740 $208,740 Payroll / Payroll Taxes Maintenance On-site Manager: Maintenance Personnel: Other: (specify here) Total Payroll / Payroll Taxes: Total Insurance: Painting: Repairs: Trash Removal: Exterminating: Grounds: Elevator: Other: Landscape/contract services Total Maintenance: $709,710 $709,710 $340,800 $75,828 $107,778 $146,118 $329,724 Other Expenses Total Expenses Other: Other: Other: Other: Other: (specify here) (specify here) (specify here) (specify here) (specify here) Total Other Expenses: Total Annual Residential Operating Expenses: Total Number of Units in the Project: Total Annual Operating Expenses Per Unit: Total 3-Month Operating Reserve: Total Annual Internet Expense (site amenity election): Total Annual Services Amenities Budget (from project expenses): Total Annual Reserve for Replacement: Total Annual Real Estate Taxes: Other (Specify): Other (Specify): $2,298,701 426 $5,396 $3,583,023 $106,500 $1,945,587 April 18, 2016 Version 20 Application

H. Commercial Income* Total Annual Commercial/Non-Residential Revenue: Total Annual Commercial/Non-Residential Expenses: Total Annual Commercial/Non-Residential Debt Service: Total Annual Commercial/Non-Residential Net Income: $1,985,753 $182,900 $1,802,853 *The Sources and Uses Budget must separately detail apportioned amounts for residential and commercial space. Separate cash flow projections shall be provided for residential and commercial space. Income from the residential portion of a project shall not be used to support any negative cash flow of a commercial portion, and commercial income should not support the residential portion (Sections 10322(h)(15), (23); 10327(g)(7)). April 18, 2016 Version 21 Application

IV. SOURCES AND USES BUDGET - SECTION 1: SOURCES AND USES BUDGET TOTAL PROJECT COST RES. COST COM'L. COST TAX CREDIT EQUITY 1)Housing Authority of City of San Diego 2)NASH/Hollan d Equity (commercial) 3)NASH/Hollan d Equity (residential) Permanent Sources 4) 5) 6) 7) 8) 9) 10) 11) 12) SUBTOTAL LAND COST/ACQUISITION Land Cost or Value $12,300,904 $9,151,873 $3,149,031 $9,151,873 $3,149,031 $12,300,904 Demolition Legal Land Lease Rent Prepayment Total Land Cost or Value $12,300,904 $9,151,873 $3,149,031 $9,151,873 $3,149,031 $12,300,904 Existing Improvements Value Off-Site Improvements Total Acquisition Cost Total Land Cost / Acquisition Cost $12,300,904 $9,151,873 $3,149,031 $9,151,873 $3,149,031 $12,300,904 Predevelopment Interest/Holding Cost Assumed, Accrued Interest on Existing Debt (Rehab/Acq) Other: (Specify) REHABILITATION Site Work Structures General Requirements Contractor Overhead Contractor Profit Prevailing Wages General Liability Insurance Other: (Specify) Total Rehabilitation Costs Total Relocation Expenses NEW CONSTRUCTION Site Work Structures $162,649,318 $140,698,672 $21,950,646 $16,718,410 $119,218,698 $21,950,646 $4,761,564 $162,649,318 $140,698,672 General Requirements $18,113,512 $16,699,737 $1,413,775 $16,699,737 $1,413,775 $18,113,512 $16,699,737 Contractor Overhead $4,308,392 $3,801,244 $507,148 $3,801,244 $507,148 $4,308,392 $3,801,244 Contractor Profit $7,447,430 $6,484,815 $962,615 $6,484,815 $962,615 $7,447,430 $6,484,815 Prevailing Wages #VALUE! incl above incl above General Liability Insurance $2,474,745 $2,145,306 $329,439 $2,145,306 $329,439 $2,474,745 $2,145,306 Other: GC Contingency $5,422,885 $4,721,952 $700,933 $4,721,952 $700,933 $5,422,885 $4,721,952 Total New Construction Costs $200,416,282 $174,551,726 $25,864,556 $16,718,410 $153,071,752 $25,864,556 $4,761,564 $200,416,282 $174,551,726 ARCHITECTURAL FEES Design $7,750,000 $6,250,000 $1,500,000 $6,250,000 $1,500,000 $7,750,000 $6,250,000 Supervision Total Architectural Costs $7,750,000 $6,250,000 $1,500,000 $6,250,000 $1,500,000 $7,750,000 $6,250,000 Total Survey & Engineering CONSTRUCTION INTEREST & FEES Construction Loan Interest $13,535,750 $10,588,525 $2,947,225 $10,588,525 $2,947,225 $13,535,750 $10,588,525 Origination Fee Credit Enhancement/Application Fee Bond Premium Cost of Issuance Title & Recording Taxes $3,060,872 $2,702,232 $358,640 $2,702,232 $358,640 $3,060,872 $2,702,232 Insurance Other: (Specify) Other: (Specify) Total Construction Interest & Fees $16,596,622 $13,290,757 $3,305,865 $13,290,757 $3,305,865 $16,596,622 $13,290,757 PERMANENT FINANCING Loan Origination Fee $3,247,500 $2,933,683 $313,817 $2,933,683 $313,817 $3,247,500 Credit Enhancement/Application Fee Title & Recording Taxes Insurance Other: (Specify) Other: (Specify) Total Permanent Financing Costs $3,247,500 $2,933,683 $313,817 $2,933,683 $313,817 $3,247,500 Subtotals Forward $240,311,308 $206,178,039 $34,133,269 $16,718,410 $184,698,065 $34,133,269 $4,761,564 $240,311,308 $194,092,483 30% PVC for New Const/Rehab 30% PVC for Acquisition April 18, 2016 Version 26 Sources and Uses Budget

IV. SOURCES AND USES BUDGET - SECTION 1: SOURCES AND USES BUDGET TOTAL PROJECT COST RES. COST COM'L. COST TAX CREDIT EQUITY 1)Housing Authority of City of San Diego 2)NASH/Hollan d Equity (commercial) 3)NASH/Hollan d Equity (residential) Permanent Sources 4) 5) 6) 7) 8) 9) 10) 11) 12) SUBTOTAL LEGAL FEES Lender Legal Paid by Applicant $5,080,000 $4,345,782 $734,218 $4,345,782 $734,218 $5,080,000 $2,172,891 Other: (Specify) Total Attorney Costs $5,080,000 $4,345,782 $734,218 $4,345,782 $734,218 $5,080,000 $2,172,891 RESERVES Rent Reserves $180,633 $180,633 $180,633 $180,633 Capitalized Rent Reserves Required Capitalized Replacement Reserve 3-Month Operating Reserve $3,583,023 $3,583,023 $3,583,023 $3,583,023 Other: (Specify) Total Reserve Costs $3,763,656 $3,763,656 $3,763,656 $3,763,656 APPRAISAL Total Appraisal Costs Total Contingency Cost $1,964,866 $1,710,802 $254,064 $1,710,802 $254,064 $1,964,866 $1,710,802 OTHER PROJECT COSTS TCAC App/Allocation/Monitoring Fees Environmental Audit Local Development Impact Fees $9,338,235 $8,290,007 $1,048,228 $8,290,007 $1,048,228 $9,338,235 $8,290,007 Permit Processing Fees Capital Fees Marketing $2,000,000 $2,000,000 $2,000,000 $2,000,000 Furnishings Market Study Accounting/Reimbursables Soft Cost Contingency $5,479,970 $4,479,970 $1,000,000 $4,479,970 $1,000,000 $5,479,970 $2,239,985 Other: Non Res Leasing Commissions $1,571,072 $1,571,072 $1,571,072 $1,571,072 Other: Non Res TI's $5,412,225 $5,412,225 $5,412,225 $5,412,225 Other: (Specify) Other: (Specify) Other: (Specify) Total Other Costs $23,801,502 $14,769,977 $9,031,525 $14,769,977 $9,031,525 $23,801,502 $10,529,992 SUBTOTAL PROJECT COST $274,921,332 $230,768,256 $44,153,076 $16,718,410 $209,288,282 $44,153,076 $4,761,564 $274,921,332 $208,506,168 DEVELOPER COSTS Developer Overhead/Profit $8,140,149 $7,211,718 $928,431 $7,211,718 $928,431 $8,140,149 $7,211,718 Consultant/Processing Agent Project Administration Broker Fees Paid to a Related Party Construction Oversight by Developer Other: (Specify) Total Developer Costs $8,140,149 $7,211,718 $928,431 $7,211,718 $928,431 $8,140,149 $7,211,718 TOTAL PROJECT COSTS $283,061,481 $237,979,974 $45,081,507 $16,718,410 $216,500,000 $45,081,507 $4,761,564 $283,061,481 $215,717,886 Note: Syndication Costs may not be included as a project cost. Bridge Loan Expense During Construction: Calculate Maximum Developer Fee using the eligible basis subtotals. Total Eligible Basis: $215,717,886 DOUBLE CHECK AGAINST PERMANENT FINANCING TOTALS: 16,718,410 216,500,000 45,081,507 4,761,564 Funding sources and costs should be aligned appropriately. For example, public funding sources for land purchase or construction costs should be shown as paying for these costs. Do not randomly select funding sources for line item costs if they have a dedicated source of payment. Required: evidence of land value (see Tab 1). Land value must be included in Total Project Cost and Sources and Uses Budget (includes donated or leased land). Except for non-competitive projects with donated land, TCAC will not accept a budget with a nominal land value. Please refer to the TCAC website for additional information and guidance. FOR PLACED IN SERVICE APPLICATION SUBMISSIONS: SYNDICATION (Investor & General Partner) Organizational Fee Bridge Loan Fees/Exp. Legal Fees CERTIFICATION BY OWNER: As owner(s) of the above-referenced low-income housing project, I certify under penalty of perjury, that the project costs contained herein are, to the best of my knowledge, accurate and actual costs associated with the construction, acquisition and/or rehabilitationof this project and that the sources of funds shown are the only funds received by the Partnership for the development of the project. I authorize the California Tax Credit Allocation Committee to utilize this information to calculate the low-income housing tax credit. Consultant Fees Accountant Fees Tax Opinion Other Signature of Owner/General Partner Date 30% PVC for New Const/Rehab 30% PVC for Acquisition Total Syndication Costs Printed Name of Signatory Title of Signatory CERTIFICATION OF CPA/TAX PROFESSIONAL: As the tax professional for the above-referenced low-income housing project, I certify under penalty of perjury, that the percentage of aggregate basis financed by tax-exempt bonds is: $0.96 April 18, 2016 Version 27 Sources and Uses Budget

15 YEAR PROJECT CASH FLOW PROJECTIONS - Refer to TCAC Regulation Sections 10322(h)(22), 10325(f)(5), 10326(g)(4), 10327(f) and (g). REVENUE MULTIPLIER YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 YEAR 6 YEAR 7 YEAR 8 YEAR 9 YEAR 10 YEAR 11 YEAR 12 YEAR 13 YEAR 14 YEAR 15 Gross Rent 1.025 $15,696,943 $16,089,366 $16,491,600 $16,903,890 $17,326,488 $17,759,650 $18,203,641 $18,658,732 $19,125,200 $19,603,330 $20,093,414 $20,595,749 $21,110,643 $21,638,409 $22,179,369 Less Vacancy 5.00% -784,847-804,468-824,580-845,195-866,324-887,982-910,182-932,937-956,260-980,167-1,004,671-1,029,787-1,055,532-1,081,920-1,108,968 Rental Subsidy 1.025 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Less Vacancy 5.00% 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Miscellaneous Income 1.025 602,702 617,769 633,213 649,044 665,270 681,901 698,949 716,423 734,333 752,692 771,509 790,797 810,567 830,831 851,601 Less Vacancy 5.00% -30,135-30,888-31,661-32,452-33,263-34,095-34,947-35,821-36,717-37,635-38,575-39,540-40,528-41,542-42,580 Total Revenue $15,484,662 $15,871,779 $16,268,573 $16,675,287 $17,092,170 $17,519,474 $17,957,461 $18,406,397 $18,866,557 $19,338,221 $19,821,676 $20,317,218 $20,825,149 $21,345,778 $21,879,422 EXPENSES Operating Expenses: 1.035 Administrative $216,762 $224,349 $232,201 $240,328 $248,740 $257,446 $266,456 $275,782 $285,435 $295,425 $305,765 $316,467 $327,543 $339,007 $350,872 Management 543,515 562,538 582,227 602,605 623,696 645,525 668,119 691,503 715,705 740,755 766,681 793,515 821,288 850,033 879,785 Utilities 223,608 231,434 239,534 247,918 256,595 265,576 274,871 284,491 294,448 304,754 315,420 326,460 337,886 349,712 361,952 Payroll & Payroll Taxes 760,259 786,868 814,409 842,913 872,415 902,949 934,553 967,262 1,001,116 1,036,155 1,072,421 1,109,955 1,148,804 1,189,012 1,230,627 Insurance 365,073 377,851 391,076 404,763 418,930 433,593 448,769 464,475 480,732 497,558 514,972 532,996 551,651 570,959 590,942 Maintenance 353,209 365,571 378,366 391,609 405,315 419,501 434,184 449,380 465,108 481,387 498,236 515,674 533,722 552,403 571,737 Other Operating Expenses (specify): 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Total Operating Expenses $2,462,426 $2,548,611 $2,637,812 $2,730,136 $2,825,690 $2,924,590 $3,026,950 $3,132,894 $3,242,545 $3,356,034 $3,473,495 $3,595,067 $3,720,895 $3,851,126 $3,985,915 Tenant Internet Expense* 1.035 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Service Amenities 1.035 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Replacement Reserve 106,500 106,500 106,500 106,500 106,500 106,500 106,500 106,500 106,500 106,500 106,500 106,500 106,500 106,500 106,500 Real Estate Taxes 1.020 2,024,189 2,064,672 2,105,966 2,148,085 2,191,047 2,234,868 2,279,565 2,325,157 2,371,660 2,419,093 2,467,475 2,516,824 2,567,161 2,618,504 2,670,874 Other (Specify): 1.035 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Other (Specify): 1.035 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Total Expenses $4,593,115 $4,719,783 $4,850,278 $4,984,721 $5,123,237 $5,265,958 $5,413,016 $5,564,550 $5,720,704 $5,881,627 $6,047,470 $6,218,392 $6,394,555 $6,576,130 $6,763,289 Cash Flow Prior to Debt Service $10,891,547 $11,151,995 $11,418,295 $11,690,566 $11,968,932 $12,253,516 $12,544,445 $12,841,847 $13,145,853 $13,456,594 $13,774,207 $14,098,827 $14,430,593 $14,769,648 $15,116,133 MUST PAY DEBT SERVICE Housing Authority of City of San Diego 9,904,902 9,904,902 9,904,902 9,904,902 9,904,902 9,904,902 9,904,902 9,904,902 9,904,902 9,904,902 9,904,902 9,904,902 9,904,902 9,904,902 9,904,902 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Total Debt Service $9,904,902 $9,904,902 $9,904,902 $9,904,902 $9,904,902 $9,904,902 $9,904,902 $9,904,902 $9,904,902 $9,904,902 $9,904,902 $9,904,902 $9,904,902 $9,904,902 $9,904,902 Cash Flow After Debt Service $986,645 $1,247,093 $1,513,393 $1,785,664 $2,064,030 $2,348,614 $2,639,543 $2,936,945 $3,240,950 $3,551,692 $3,869,305 $4,193,925 $4,525,691 $4,864,745 $5,211,230 Percent of Gross Revenue 6.05% 7.46% 8.84% 10.17% 11.47% 12.74% 13.96% 15.16% 16.32% 17.45% 18.54% 19.61% 20.65% 21.65% 22.63% 25% Debt Service Test 9.96% 12.59% 15.28% 18.03% 20.84% 23.71% 26.65% 29.65% 32.72% 35.86% 39.06% 42.34% 45.69% 49.11% 52.61% Debt Coverage Ratio 1.100 1.126 1.153 1.180 1.208 1.237 1.266 1.297 1.327 1.359 1.391 1.423 1.457 1.491 1.526 OTHER FEES** GP Partnership Management Fee LP Asset Management Fee Incentive Management Fee Total Other Fees 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Remaining Cash Flow $986,645 $1,247,093 $1,513,393 $1,785,664 $2,064,030 $2,348,614 $2,639,543 $2,936,945 $3,240,950 $3,551,692 $3,869,305 $4,193,925 $4,525,691 $4,864,745 $5,211,230 Deferred Developer Fee** Residual or Soft Debt Payments** *9% and 4% + state credit applications should include the cost of tenant internet service if requested in the Points System site amenity section. **Other Fees and all payments made from cash flow after must pay debt should be completed according to the terms of the partnership agreement (or equivalent ownership entity terms). Please re-order line items consistent with any "order of priority" terms. These items are to be completed when submitting an updated application for the Carryover, Readiness, Final Reservation, and Placed-in-Service deadlines. April 18, 2016 Version