GAIMS Collaborative
Parcel H | Development Submission April 2019 Grace Palmer | Ashutosh Singhal | Isaac Stein | Maksim Wynn | Sydney Fang
Introduction Boston’s Seaport is a district defined by connection and opportunity. Known for its seafaring traditions and knowledge economy future, the area maintains its status as a gateway to Boston and an epicenter of industry, jobs, and mobility. But affordability and inequality crises paired with environmental realities face the Seaport with significant challenges. The GAIMS Collaborative, an experienced, mission-driven not-for-profit development group, is pleased to submit a Proposal that addresses these challenges while leveraging the assets and opportunity presented in Parcel H’s prime location and connections to the Seaport and surrounding neighborhoods. Our project is an innovative mixed-use design, with a commitment to deep affordability and serving locals throughout our housing, commercial, and placemaking programming. We approach this development as an opportunity to weave public benefits into each element of core programming, rather than viewing them as an add-on. Our resulting proposal maximizes social benefits and minimizes financial returns to the threshold necessary to support our mission over the long-term. Throughout our design and programming we stress commitments to the following: ● This development affirmatively serves all community members, including those currently disenfranchised from much of the Seaport’s development. ● We are mindful of the needs of community members outside the Seaport, including via transit investments. ● We plan for environmental sustainability, especially impending sea level rise. ● We highlight the Seaport’s history, its current-day business and artistic community, and future climate effects as part of our commitment to activating the Public Realm. We have met MassPort’s request for public benefits with an ambitious agenda which goes far beyond their requirements and bakes mission into our operations. We minimize financial returns to that which covers costs in order to maximize the social benefits our programming can return. To us, financial returns are a tool to reach more valuable social good outcomes rather than an end in themselves.
Who We Are GAIMS Collaborative is a not-for-profit, mission-driven real estate developer that is committed to supporting the integration and well-being of all of Boston’s residents by building beautiful and purposeful neighborhood assets. We look forward to continuing our legacy through projects that are similar to those of our other community-centered development partners, such as The Community Builders and their Charlesview Residences and Townhomes at Brighton Mills. GAIMS Collaborative prioritizes the following principles in our projects: ● Diversity and inclusion: Our projects will be inclusive to all residents, regardless of race, gender, class, age, or physical ability. Our design, build, and management processes similarly feature people of all identities. ● People-centered: Our projects prioritize the needs of the people for whom we design, with special considerations to encourage intergenerational participation, mobility, and enjoyment among all Boston residents, especially people of color, low-income residents, and people of different physical capacities. ● Community-based: Our programming is shaped by robust community engagement and decision-making. Our relationships with Boston membership-based organizations promote responsiveness and grassroots perspectives in our program. ● Long-term thinking: We are committed to supporting communities for the long haul; this includes ensuring sustained affordability and inclusivity in the development for many years to come, while also planning for impending climate changes, such as sea level rise.
The Context Housing and Affordability: The current Boston housing market forecast indicates an increasingly competitive market. In the past year, the average sale price of a home increased 13.1%, to $690,000, according to Norada Real Estate. Boston real estate appreciates much more quickly than property across the country, appreciating 55.46% over the past 10 years. These trends demonstrate that the market rates for commercial and residential rentals can offer robust funding for other types of programming that meet our goals for the project. According to the City of Boston, the “Seaport district alone will experience unprecedented population growth: a 289% increase from 2012 to 2030. Glass towers and a proliferation of condos continue to attract newcomers to surrounding neighborhoods, including South Boston.” Previous development in the Seaport has yielded an predominately white and wealthy enclave, where “The population is 3 percent black and 89 percent white with a median household income of nearly $133,000, the highest of any Boston ZIP code, according to recent US census estimates,” as reported in the Boston Globe. Massport now aims to disrupt this pattern by spurring development that promotes greater inclusion and diversity.
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Massport has an opportunity to weave connections between Seaport and the adjacent South Boston neighborhood, which is experiencing impacts related to neighborhood transition. Figures 1 and 2 show the steady influx of renters and young professionals into South Boston.
Figure 1​: Number of residents moving to South Boston by year
Figure 2-​-Age of residents moving to South Boston (1990-2016)
While some South Boston residents are earning higher incomes, 28% of South Boston is low-income, earning ~$28K annually. These residents are struggling with housing stability. Furthermore, residents across the city are rent burdened, such that approximately 35% or 81,945 Boston low income households spend more than 30% of their income on rent or a mortgage. Much of South Boston’s residents of color live in public housing, as demonstrated by Figure 3. In order to accommodate lower-income residents who may be on the 13,000-person Boston Housing Authority waitlist or earning slightly above the eligibility threshold for public housing, the
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Seaport should offer housing options for multiple income levels to support racial and class integration.
Figure 3-​-Racial demographics of South Boston neighborhood, compared with racial demographics of Mary Ellen McCormack public housing
Climate Change Readiness: The City of Boston is currently preparing the Seaport for climate-change induced sea-level rise. Figure 4 shows the storm flood extents at the 1% annual chance storm event. In order to protect residents, infrastructure, and jobs, any development in the Seaport must incorporate measures to mitigate the impacts and hazards of sea-level rise.
Figure 4​: Storm flood extents at the 1% annual chance storm event. Source: Climate Ready South Boston
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The Development Program & Design Given we are a mission-based organization, we view public benefits as part and parcel of our programming and have integrated them into each component. In addition to the assessed linkage fee and exceeding the required 30% onsite affordable housing, we offer other responsive programming. See the massing and layout of our proposed program below in Figure 5.
Figure 5--Massing Plan in Context with Afternoon Light Green - Housing | Blue - Office | Cyan - Retail | Yellow - Industrial | Light Green - Public Space
This 900,000 sq. ft, 9.3 total FAR project will include approximately: ● 35% Housing (equal parts affordable and market-rate) ● 50% Commercial Space with affordable and market-rate office, industrial and retail uses ● 15% Common Space, (including both functional space such as elevators and egresses and public gathering spaces such as lobbies) The programming establishes a strong multi-level public realm, inclusive retail and offices, with residential units at higher levels with fantastic views of Boston Harbor and Downtown. Parking is strategically located on the side facing Interstate 90. Furthermore, the parking podium elevates the critical building program above sea level rise projections. The strategic massing in the view emphasizes the development’s entrance as a gateway into the Seaport district.
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Housing (315,000 sq. ft) Affordable and market-rate each comprise 50% of residences in the project at 1.63 FAR each. Residences include 1-, 2-, and 3, bedrooms for three different levels of affordability: 30% AMI, 50% AMI and market rate, shown below. The number of unit types is as follows: ● Market-rate ○ 66 one-bedroom ○ 44 two-bedroom ○ 33 three-bedroom ● Affordable, 50% AMI ○ 33 one-bedroom ○ 22 two-bedroom ○ 16 three-bedroom ● Affordable, 30% AMI ○ 33 one-bedroom ○ 22 two-bedroom ○ 16 three-bedroom This mix responds to the need for housing affordable to lower incomes in the surrounding area, especially in neighboring South Boston. The typical resident of this building may earn $20,700 as a single person, or $49,450 as a family of four, based on the HUD 2015 income limits. Figure 6 shows the income limits for affordable housing. Figure 6: Department of Housing and Urban Development 2015 income limits
Common Areas (135,000 sq. ft at 1.4 FAR) This refers to the elevators, lobbies, and hallways in the building that will not generate revenue. The Common Areas of the building will provide arts exhibition opportunities and public facilities. The exhibition areas can feature local artists, complementary to the Fort Point Open Studios in Seaport. Artists are able to display and sell their art in this space, as a way to bolster their place in the neighborhood and prevent possible displacement. Facilities will feature gender-inclusive restrooms and showers open to all people. These facilities can serve local community members in need of a shower and can encourage bicycling to work among employees.
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Commercial Space (450,000 sq ft) Commercial space includes lab, office, industrial, and retail spaces. Market-rate dry labs (202,500 sq ft at 2.09 FAR) will enable us to capitalize on the strong market for dry lab space in the Seaport and cross-subsidize other social programming goals. The office spaces (180,000 sq ft) will include equal parts market-rate (1.4 FAR) and affordable, or mission-driven (0.47 FAR), programming. The market-rate offices will be housed on floors 1-3, which will serve as co-working spaces that face a public-space atrium. The mission-driven programming will include a HeadStart facility, a Children’s Museum outpost, office spaces leased to non-profit organizations, as well as a small business incubator for low-income, women of color entrepreneurs. Industrial space (22,500 sq ft at 0.23 FAR) is dedicated to affordable, mission-driven uses. The light manufacturing space offers strong employment and training opportunities for non-traditional and justice-involved workers. It will also include a workforce training facility for industrial trades, fabrication space, and a small food production facility. The food production space will be located on lower floors to activate the space. The retail spaces (45,000 sq ft) will include market-rate and affordable options on both ground and upper floors. On the ground floor, 75% will be market-rate retail (0.28 FAR), striving for a balance of local businesses and local chains. 25% (0.09 FAR) will be devoted to mission-driven programming, such as a childcare provider and small local businesses. Entrepreneurs can access this kitchen to prepare food for the cafe and nearby food startups in the Seaport. A fish market will source seafood locally. Second floor retail space is half market and half affordable rent at 0.05 FAR each. This retail space can also house an outpost of the Ujima Project’s business alliance programs, using crowdsourced investment and a flexible co-op model to invest in underserved communities of color.
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Figure 7: Site Plan
We oriented the site’s massing to best maximize the Parcel H’s potential as well as stitching seamlessly with both the existing and proposed context of the Seaport District. There are three main connections, each aligned with vital neighboring axes and views of either Congress Street, the Boston Harbor or the future Hyatt Place. Each of these three axes are marked by a public space that function as catchment areas, inviting people into the building and creating a worthy gateway and anchor to the Seaport district. The MBTA’s Silver line has been rerouted into a driveway along the west side of the development. The bus station will be integrated within the building and create a comfortable resting location in all seasons.
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Public Realm
Figure 8: Public Space Plan: Over 50% of the Site, Fully Accessible and Across Multiple Levels. Includes a new Silver Line Bus Stop Integrated within the Building. Orange Hatch - T under D easement, no foundations in this area, and 16’ clearance Cyan Hatch - Sewer Easement, fully accessible
Public realm enhancements includes an all accessible privately owned open space, transportation and the new public humanities installations. The design of the building will also facilitate sunlight, as shown in the rendering seen in Figure 10. The building is oriented based on vistas--corresponding to either harbor or cityscape views and for streetscape to see the most beautiful angles of our building. This will activate public space, drawing people into our building and courtyard, which expands retail opportunities. The building utilizes stepped terraces for views to the sea and maximize sun exposure. The design as a whole creates a gateway to the Seaport from all angles. Our design recognizes the parcel’s position as a “gateway” into the Seaport, given it is the first place travelers see coming out of I-90 tunnel from the airport. We designed for good circulation within atrium and connections to main streets, the sea, and adjacent parcels via the public atrium. External staircases and ADA accessible ramps in the atrium facilitate connections to second floor retail and office space.
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The program will include a public 4-season atrium, bike storage locker, space for a blue bike station, and a public humanities installation. The public atrium creates a strong central courtyard (covered with a skylight operable to open in nice weather) that ties the overall development. The bike storage facility and Blue Bike hub can help address the issue of first and last mile transit connection. The public humanities installation can enrich the public realm by acknowledging the legacy of racial violence (e.g. school busing) in South Boston and describing distinguishing elements of the site, such as the seafaring past of Seaport and imminent sea level rise. The public realm of our proposal and other spaces outside of the building would be ideal for food trucks or carts and can be integrated with our shared kitchen. Transportation The program will implement the following transportation strategies. The Silver Line stop will be located at northwest corner of Parcel H. The covered and heated bus-stop will be integrated within the building space. As a prominent bus stop, this site will also include a public humanities treatment similar to the land extrusion, described above. Ninety-one retail parking spaces will face the highway to mitigate effects of highway noise.
Figure 9​: View from Congress Street Showing Relocated Silver Line Stop and Atrium Entrance
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Resilience Structure Design Emphasis Given the reality of sea level rise, the drawing section will emphasize resiliency. The design actions include: ● Raise public podium 20’ for flood resiliency (exceeds the Boston 2050 flood level and satisfies storm surge) ● Building challenge certified and passive haus ● Entire building is maximized for biodegradable materials to reduce long-term environmental costs, using glulam wood construction ● Rainwater catchment for public space irrigation
Figure 10: Schematic section through the development highlighting our resilient design.
Other Urban Design considerations Other considerations for our project include: ● We chose to connect the lab into a single building. ● By relocating the bus stop, we have been able to reduce the overall height of the building below the limits. ● The design will maintain full access to the pump station by including building overhangs over water pump station. We will not build on any sewer easement.
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●
The building will be ADA compliant.
Finance & Feasibility: Mission-Driven Feasibility: We view finance as a tool to achieve our social mission, not an end in itself. Our creative financial structure goes beyond MassPort’s requirements and maximizes social programming to the largest extent we can while maintaining financial feasibility. We utilize the Seaport’s strong commercial and housing markets to cross-subsidize the ambitious social programming outlined above. Recognizing the Seaport’s hot market for lab space, we dedicate significant (23%) space to dry lab functions which cross-subsidize other public goods such as affordable housing. We also dedicate 6% of total square feet to market office space. We emphasize housing not only for its social good, but also for its market viability; high market rents allow us to program 50% of our housing units as affordable, split between 30% and 50% AMI. Our goal is to protect affordable uses in perpetuity. As necessary, we plan to seek future funding for affordability preservation at 15-year intervals. Figure 11: Housing Unit Mix
In addition to housing, we use high office and lab market rent to cross-subsidize both mission-driven office and industrial uses (e.g. HeadStart and a nonprofit food production facility) and other public benefits. We also see retail parking as a small revenue generator. While industrial and retail returns are lower than market housing and office rents, we dedicate 3% and 5% of our square footage respectively to these purposes to ensure the development provides diverse job types (via industry as well as office work) and is inviting (via public space and retail) to residents and nonresidents. All of the industrial space and 30 percent of the retail space is provided at below-market rent to ensure that jobs and shops are accessible to people of varying income levels, whether corporate lawyers or seafood industry workers. Cognizant that much of the existing Seaport is designed and programmed in ways that alienate low-income people and people of color, we put a premium on supporting local businesses and placemaking that is welcoming to all.
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Financials: Given the direct tradeoff between capital expended on land acquisition and capital available for mission programming (our costs for which are conservatively estimated at $60 million), we identify $100 million as the maximum acquisition cost possible to allow for the deep affordability baked into our housing and commercial programs and the design’s inviting public spaces. This provides us with sufficient returns to match inflation and provide a modest developer fee, supporting our costs, employees, and ongoing mission, but otherwise deferring to social value over financial returns. Figure 12: Financial Returns assuming $100 million acquisition cost & social-value maximizing programming Return on Total Assets (ROTA)
7.01%
Return on Equity (ROE)
4.89%
Leveraged After-Tax IRR
10.23%
NPV
$2,034,987
Discount Rate @ 10%* *We use a discount rate of 10% based on real estate’s historical asset return. Further, discount rates are often estimated as roughly the sum of the cap rate and growth rate (at 8% and 3% respectively for this project.)
At our Stabilized Year 1 (Figure 13), we have a healthy NOI, even assuming conservative 5% vacancy rates. A full 10 year discounted cash flow can be found in Figure 14 and the complete pro forma is included as an Appendix.
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Figure 13​: Stabilized Year 1 Pro Forma
We structured our cash flow to maximize public good and minimize financial return beyond that required to cover long-term costs in support of our long-term mission. While our projected cash flow is inclusive of a hypothetical 10-year sale, we also leave the possibility of retaining ownership of the property at least through the 30 year term of the
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mortgage loan, a period over which our project’s cash flow would remain strong enough to allow us to meet our debt obligations. Figure 14:​ Our 10-Year Cash Flow is strong, supporting 30-Year Amortization
Community Engagement GAIMS Collaborative partners with community-based organizations to conduct robust community engagement and resident-led design. The organizations that partnered with us for this proposal include South Boston United for Justice, Ujima Project, City Life Vida Urbana, and Chinese Progressive Association. These organizations are member-led and have built trust and civic engagement capacity among low-income residents of color. GAIMS collaborated with a steering committee comprised of the staff of these organizations to co-design discussions and interactive workshops. Workshops and discussions took place during a variety of times, including evenings and weekends. Our firm worked with organizations to secure transportation, childcare, dinner, and language interpretation for participants. During these workshops, residents and community leaders defined key priorities and brainstormed 14
uses for the project. The project reflects the creativity of the people who will benefit from and participate fully in the space.
Conclusion We looked to the history of the Seaport and surrounding neighborhoods to establish an inclusive vision for Parcel H’s future. With a past shaped by seafaring industries and a present informed by transport and technology, the Seaport can remain a place of connections and opportunity. We highlight both these themes in our work. Our proposal commits to inclusive, inviting accessibility from our architectural design through our spatial programming down to the people we hire and the amenities we provide. Its sustainable financial structure allows for long-term commitment to public goods--both physical and social--contributing to the Seaport and beyond. As we proceed in the development process, we are committed to further seeking and reflecting the voices and visions of community members with ties to the Seaport’s past and present. The Seaport is a Boston gateway and Parcel H can help ensure its connections and opportunities are for everyone.
Appendices Pro forma (Attached PDF to final document) Figure A​: Programming by FAR
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Pro Forma DEVELOPMENT COSTS Capital Cost/SF Development Cost Public Realm Development Cost Land Cost Cost / underground p space Cost / at-grade or above-grade p space Total Parking Cost Developer Fee Linkage Fee Total Development Cost PROGRAMMING Market Rate Residential SF Affordable Residential SF Hotel Rooms Hotel SF/ Room Hotel SF Market Retail Ground SF Affordable Retail Ground SF Market Retail Upper SF Affordable Retail Upper SF Market Office SF Affordable Office SF Market Lab SF Affordable Industrial SF Residential Parking Spaces Retail Parking Spaces Office Parking Spaces SF / P Space Total Parking SF Public Realm SF Common Area SF Gross Residential SF Gross Commerical SF Gross Square Footage Number of Parking Spaces Parcel Square Footage FAR
CAPITAL STRUCTURE $200 $180,000,000 $6,000,000 $100,000,000 $45,000 $35,000 $3,185,000 $35,091,400 $9,729,000 $334,005,400 157,500 157,500 0 0 0 27,000 9,000 4,500 4,500 135,000 45,000 202,500 22,500 0 91 0 350 31,850 60,000 135,000 315,000 450,000 900,000 91 96,750 9.30
65% $116,901,890
Debt
$217,103,510
Annual Rate PMT Periods Monthly Debt Service ANNUAL INCOME Market-Rate Residential Rent / SF Hotel Rent / Room Hotel Income Retail Rent Ground Floor (Triple Net) / SF Retail Affordable (50%) Rent Ground Floor (Triple Net) / SF Retail Rent Upper Floor (Triple Net) / SF Retail Affordable (50%) Rent Upper Floor (Triple Net) / SF Office Rent / SF Office Affordable (50%) Rent / SF Lab Rent / SF Industrial Affordable (50%) Rent / SF (Triple Net) Residential Parking Fee / Space Annual Retail Parking Fee / Space Office Parking Fee
Commercial Depreciable Basis Retail Dep. Recovery Per. Retail Annual Depreciation
$90,000,000 39.0 ($2,307,692)
-$1,232,689.85
0
Affordable Office Income Market Industrial Income Affordable Industrial Income Total Commercial Income
$1,462,500 $13,162,500 $112,500 $25,256,250
$1,462,500 $281,250 $8,775,000 $1,462,500 $13,162,500 $112,500 $8,505,000 $1,436,203 $35,197,453
VACANCY (Residential Vacancy) (Commercial Vacancy) ADDITIONAL INCOME Residential Parking Income Retail Parking Income Office Parking Income Effective Gross Income
EXPENSES (Residential Operating Expenses) (Residential Real Estate Taxes) (Office/Lab Operating Expenses) (Office/Lab Real Estate Taxes) (Replacement Reserve) ( Total Expenses) NET OPERATING INCOME Debt Service CASH FLOW AFTER FINANCING Tax Payment
Market-Rate Residential Income 30% AMI Rental Income 50% AMI Rental Income Total Affordable Income
Income Growth Rate EXPENSES Office/Lab Operating Expense/SF Office/Lab Real Estate Taxes/SF Residential Operating Expense/SF Residential Real Estate Taxes/SF (PILOT) Hotel Operating Expenses and Real Estate Taxes Linkage Fee /SF (one-time) Replacement Reserve/SF
$8,505,000 $529,922 $906,281 $1,436,203 $9,941,203
CASH FLOW AFTER TAXES
RETURN MEASURES
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1
GROSS INCOME Market Retail Income Affordable Retail Income Market Office Income Affordable Office Income Market Industrial Income Affordable Industrial Income Market-Rate Residential Income Affordable Residential Income Subtotal
$54 $350 $0 $50 $25 $25 $13 $65 $33 $65 $5 $3,600 $14,600 0 $0 $1,328,600 $0.00 $1,462,500 $281,250 $8,775,000
Total Income
$63,000,000 27.5 ($2,290,909)
6% 360
Residential Parking Income Retail Parking Income Office Parking Income Market Retail Income Affordable Retail Income Market Office Income
Total Residential Income
DEPRECIATION Residential Dep. Basis Residential Dep. Recovery Per. Residential Annual Depreciation
PRO FORMA
LTV Equity
$1,506,375 $289,688 $9,038,250 $1,506,375 $13,557,375 $115,875 $8,760,150 $1,479,289 $36,253,377
3
$1,551,566 $298,378 $9,309,398 $1,551,566 $13,964,096 $119,351 $9,022,955 $1,523,668 $37,340,978
4
$1,598,113 $307,329 $9,588,679 $1,598,113 $14,383,019 $122,932 $9,293,643 $1,569,378 $38,461,207
5
$1,646,057 $316,549 $9,876,340 $1,646,057 $14,814,510 $126,620 $9,572,452 $1,616,459 $39,615,044
6
$1,695,438 $326,046 $10,172,630 $1,695,438 $15,258,945 $130,418 $9,859,626 $1,664,953 $40,803,495
7
$1,746,301 $335,827 $10,477,809 $1,746,301 $15,716,713 $134,331 $10,155,415 $1,714,902 $42,027,600
8
$1,798,691 $345,902 $10,792,143 $1,798,691 $16,188,215 $138,361 $10,460,077 $1,766,349 $43,288,428
9
$1,852,651 $356,279 $11,115,907 $1,852,651 $16,673,861 $142,512 $10,773,880 $1,819,339 $44,587,081
10
$1,908,231 $366,967 $11,449,385 $1,908,231 $17,174,077 $146,787 $11,097,096 $1,873,919 $45,924,693
($511,972) ($1,300,697)
($527,331) ($1,339,718)
($543,151) ($1,379,909)
($559,446) ($1,421,307)
($576,229) ($1,463,946)
($593,516) ($1,507,864)
($611,321) ($1,553,100)
($629,661) ($1,599,693)
($648,551) ($1,647,684)
($668,007) ($1,697,114)
$0 $1,328,600 $0 $34,766,180
$0 $1,368,458 $0 $35,809,166
$0 $1,409,512 $0 $36,883,441
$0 $1,451,797 $0 $37,989,944
$0 $1,495,351 $0 $39,129,642
$0 $1,540,212 $0 $40,303,532
$0 $1,586,418 $0 $41,512,638
$0 $1,634,010 $0 $42,758,017
$0 $1,683,031 $0 $44,040,757
$0 $1,733,522 $0 $45,361,980
$0 $1,785,527 $0 $46,722,839
($2,835,000) ($1,890,000) ($3,825,000) ($1,912,500) ($900,000) ($11,362,500)
($2,905,875) ($1,937,250) ($3,920,625) ($1,960,313) ($922,500) ($11,646,563)
($2,978,522) ($1,985,681) ($4,018,641) ($2,009,320) ($945,563) ($11,937,727)
($3,052,985) ($2,035,323) ($4,119,107) ($2,059,553) ($969,202) ($12,236,170)
($3,129,310) ($2,086,206) ($4,222,084) ($2,111,042) ($993,432) ($12,542,074)
($3,207,542) ($2,138,362) ($4,327,636) ($2,163,818) ($1,018,267) ($12,855,626)
($3,287,731) ($2,191,821) ($4,435,827) ($2,217,914) ($1,043,724) ($13,177,016)
($3,369,924) ($2,246,616) ($4,546,723) ($2,273,362) ($1,069,817) ($13,506,442)
($3,454,172) ($2,302,781) ($4,660,391) ($2,330,196) ($1,096,563) ($13,844,103)
($3,540,527) ($2,360,351) ($4,776,901) ($2,388,450) ($1,123,977) ($14,190,205)
($3,629,040) ($2,419,360) ($4,896,323) ($2,448,162) ($1,152,076) ($14,544,961) $32,177,879
$23,403,680
$24,162,603
$24,945,714
$25,753,774
$26,587,568
$27,447,906
$28,335,621
$29,251,575
$30,196,654
$31,171,774
($14,792,278)
($14,792,278)
($14,792,278)
($14,792,278)
($14,792,278)
($14,792,278)
($14,792,278)
($14,792,278)
($14,792,278)
($14,792,278)
$10,153,436
$10,961,496
$11,795,290
$12,655,628
$13,543,343
$14,459,297
$15,404,376
$16,379,496
$8,611,402
$9,370,325
($2,899,830)
($3,249,995)
($3,612,761)
($3,988,609)
($4,378,039)
($4,781,574)
($5,199,756)
($5,633,152)
($6,082,352)
$5,711,572
$6,120,330
$6,540,675
$6,972,887
$7,417,251
$7,874,054
$8,343,587
$8,826,144
$9,322,024
2
3
0
1
RETURN ON TOTAL ASSETS (ROTA)
7.01%
Year 1 NOI / TDC
RETURN ON EQUITY (ROE)
4.89%
Year 1 CFAT / Equity Invested
4
5
($6,547,969) $9,831,527
5
5
5
5
5
$31,171,774 $382,112,310 $413,284,085
YEAR 1 CAPITALIZED VALUE
3%
Expenses Growth Rate
2.5%
NET OPERATING INCOME Net Sale Price UNLEVERAGED IRR
($334,005,400) 8.90%
CASH FLOW AFTER FINANCING
5.00%
Ordinary Income Tax
37%
Commercial Vacancy
5.00%
Depreciation Recapture
25%
Capital Gains
15%
Cap Rate @ Sale Sale Expenses %
8.0% 5%
$24,162,603
$24,945,714
$25,753,774
$26,587,568
$27,447,906
$28,335,621
$29,251,575
$30,196,654
$23,403,680
$24,162,603
$24,945,714
$25,753,774
$26,587,568
$27,447,906
$28,335,621
$29,251,575
$30,196,654
$8,611,402
$9,370,325
$10,153,436
$10,961,496
$11,795,290
$12,655,628
$13,543,343
$14,459,297
$15,404,376
LEVERAGED BEFORE-TAX IRR
$16,379,496 $202,912,921
($116,901,890)
Residential Vacancy
$23,403,680
Before-Tax Sale Proceeds
RATES
$8,611,402
$9,370,325
$10,153,436
$10,961,496
$11,795,290
$12,655,628
$13,543,343
$14,459,297
$15,404,376
$219,292,418
$5,711,572
$6,120,330
$6,540,675
$6,972,887
$7,417,251
$7,874,054
$8,343,587
$8,826,144
$9,322,024
$5,711,572
$6,120,330
$6,540,675
$6,972,887
$7,417,251
$7,874,054
$8,343,587
$8,826,144
$9,322,024
$9,831,527 $191,461,090 $201,292,616
10%
DISCOUNT RATE
13.66%
CASH FLOW AFTER TAXES Net Proceeds From Sale LEVERAGED AFTER-TAX IRR
($116,901,890) 10.23%
NET PRESENT VALUE (NPV)
$2,034,987
CFAT
$1,965,478 $377,976 $11,792,866 $1,965,478 $17,689,299 $151,191 $11,430,009 $1,930,137 $47,302,434
($497,060) ($1,262,813)
$35,197,453
$10.00 $5.00 $9.00 $6.00 66.00% $10.81 $1
11
OFF-SHEET CALCULATIONS AMORTIZATION Beginning of Year Outstanding Principal End of Year Outstanding Principal Amortization
1 $217,103,510 ($214,178,931) $2,924,579
2 $214,178,931 ($211,089,384) $3,089,548
3 $211,089,384 ($207,825,561) $3,263,823
4 $207,825,561 ($204,377,634) $3,447,928
5 $204,377,634 ($200,735,216) $3,642,418
6 $200,735,216 ($196,887,337) $3,847,879
7 $196,887,337 ($192,822,407) $4,064,930
8 $192,822,407 ($188,528,183) $4,294,224
9 $188,528,183 ($183,991,732) $4,536,452
10 $183,991,732 ($179,199,389) $4,792,343
$8,611,402 $2,924,579 $900,000 ($4,598,601) $7,837,379
$9,370,325 $3,089,548 $922,500 ($4,598,601) $8,783,771
$10,153,436 $3,263,823 $945,563 ($4,598,601) $9,764,220
$10,961,496 $3,447,928 $969,202 ($4,598,601) $10,780,024
$11,795,290 $3,642,418 $993,432 ($4,598,601) $11,832,538
$12,655,628 $3,847,879 $1,018,267 ($4,598,601) $12,923,173
$13,543,343 $4,064,930 $1,043,724 ($4,598,601) $14,053,395
$14,459,297 $4,294,224 $1,069,817 ($4,598,601) $15,224,736
$15,404,376 $4,536,452 $1,096,563 ($4,598,601) $16,438,789
$16,379,496 $4,792,343 $1,123,977 ($4,598,601) $17,697,215
NET PROCEEDS FROM SALE NET BOOK VALUE Total Development Cost Replacement Reserve (Accumulated Depreciation) Net Book Value
$334,005,400 $10,083,044 ($22,993,007) $321,095,437
TAX PAYMENT
CAPITAL GAIN ON SALE Sale Price (Sale Expenses) (Net Book Value) Capital Gain on Sale
TAXABLE INCOME Cash Flow After Financing Amortization Replacement Reserve Depreciation Taxable Income
$402,223,484 ($20,111,174) ($321,095,437) $61,016,874
NET PROCEEDS FROM SALE
Accumulated Depreciation Depreciation Recapture Tax
$22,993,007 ($5,748,252)
Capital Gain in Excess of Dep. Capital Gains Tax
$38,023,867 ($5,703,580)
Programming % SF Commercial Office % SF of Commercial Lab % SF of Commercial Industrial % SF of Commercial Retail % SF of Commercial Ground Floor % SF of Retail Upper Floor % SF of Retail
Total
Sale Price (Sale Expenses) (Mortgage Loan Payoff) (Tax Payment) Net Proceeds from Sale
Market
Affordable
50%
40% 45% 5% 10% 80% 20%
% of SF Common Area
$402,223,484 ($20,111,174) ($179,199,389) ($11,451,832) $191,461,090
30% 45.0% 0.0%
10% 0.0% 5.0%
60% 10%
20% 10%
15.0%
135000
% parking % of SF Housing Affordable % SF of Housing Market % SF of Housing
Market units 1BR 2BR 3BR Total
35.00% 50% 50% SF
% of affordable units at 30% AMI % 1BR of 30% AMI units % 2BR of 30% AMI units % 3BR of 30% AMI units
50% 33.33% 33.33% 33.33%
% of affordable units at 50% AMI % 1BR of 50% AMI units % 2BR of 50% AMI units % 3BR of 50% AMI units
50% 33.33% 33.33% 33.33%
66 44 33 142
26250 26250 26250 SF
Affordable Housing Max rent for 1BR @ 30% Max rent for 2BR @ 30% Max rent for 3BR @ 30% Max rent for 1BR @ 50% Max rent for 2BR @ 50% Max rent for 3BR @ 50% Total
$ / PDU (Month) $518 $665 $769 $923 $1,108 $1,280
AMI AMI AMI AMI AMI AMI
Use Market Rate Residential Affordable Residential Hotel Market Retail Ground Affordable Retail Ground Market Retail Upper Affordable Retail Upper Market Office Affordable Office Lab Affordable Industrial Common Area Total
Total Overhead Fee
$ / GSF (Year) $7.77 $6.65 $5.77 $13.85 $11.08 $9.60
SF / PDU 800 1200 1600 800 1200 1600
FAR 1.63 1.63 0.00 0.28 0.09 0.05 0.05 1.40 0.47 2.09 0.23 1.40 9.30
Developer Fee/Overhead TDC less other costs and dev consultant Acquisition First $3M $3M to $5M $5M to $15M
26250 26250 26250
$298,914,000 5% 15% 12.5% 10%
$100,000,000 $3,000,000 $2,000,000 $293,914,000
$5,000,000 $450,000 $250,000 $29,391,400 $35,091,400 $17,545,700 $17,545,700
Units 33 22 16 33 22 16 142
Income $203,962.50 $174,562.50 $151,396.88 $363,431.25 $290,850.00 $252,000.00 $1,436,203