Proposal for Bell Tower Heights by Bria Francisco

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PROPOSAL FOR BELL TOWER HEIGHTS St. Charles Borromeo Seminary Development Site 100 E. Wynnewood Road, Wynnewood, PA

CRP 6580: Spring 2014 Team Green Bria Francisco Dan Gualtieri Aylin Gucalp Yijing Shen Junwei Zhou

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Table of Contents

I. Executive Summary ......................................................................................... 7 II. Key Statistics ................................................................................................... 9 III. Land Acquisition, Price, and Terms ........................................................... 10 IV. Market Environment .................................................................................... 15 A. MARKET OVERVIEW ...................................................................................................... 15 Economy ............................................................................................................................... 15 Demographics ....................................................................................................................... 15 Housing Market .................................................................................................................... 15 Market and Site ..................................................................................................................... 18 Opposition ............................................................................................................................. 19 B. ANALYSIS SUPPORTING PROPOSED MIX AND PRICING ....................................... 20 Demand Indicators ................................................................................................................ 20 Supply Indicators .................................................................................................................. 26 C. TARGET MARKET DECISIONS ...................................................................................... 38 Target Market........................................................................................................................ 38 Segments Defined ................................................................................................................. 39 Lower Merion Residential Market ........................................................................................ 39 Neighborhood Amenities ...................................................................................................... 41 Carriage Home Buyers .......................................................................................................... 43 Seminary Building Condominium Buyers ............................................................................ 44 Key Exhibits...........................................................................Error! Bookmark not defined.

V. Site Analysis .................................................................................................. 46 VI. Vision Statement of Bell Tower Heights .................................................... 47 VII. Design .......................................................................................................... 48 OVERVIEW ............................................................................................................................. 48 DESIGN PROCESS.................................................................................................................. 50 PHASE 1 AND PHASE 2: SEMINARY & CARRIAGE HOMES ......................................... 51 Carriage Home Condominiums Triplex & Fourplex ............................................................ 52 Seminary Condominiums...................................................................................................... 57 Parking Garage Design ......................................................................................................... 63 AMENITIES ............................................................................................................................. 64 Open Space ........................................................................................................................... 65 Walking Trail ........................................................................................................................ 65

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Fitness Center........................................................................................................................ 66 Church Conversion ............................................................................................................... 67 Enclosed Courtyard ............................................................................................................... 68 Terrace .................................................................................................................................. 68 Enclosed Pool........................................................................................................................ 68 Private Recreational Space ................................................................................................... 68 Clubhouse ............................................................................................................................. 69 Shuttle Bus ............................................................................................................................ 69 Playground ............................................................................................................................ 69 DIAGRAMS ............................................................................................................................. 70 PROCESS ................................................................................................................................. 79 Land Use Entitlement and Regulatory Process ..................................................................... 82

VIII. Schedule ..................................................................................................... 95 PHASE I.................................................................................................................................... 95 Acquisition ............................................................................................................................ 95 Planning and Processing ....................................................................................................... 95 Site Plan ................................................................................................................................ 95 Site Development .................................................................................................................. 95 Housing Construction ........................................................................................................... 95 Sales and Marketing .............................................................................................................. 95 Equity Investment/Financing ................................................................................................ 96 PHASE II .................................................................................................................................. 96 Acquisition ............................................................................................................................ 96 Planning and Processing ....................................................................................................... 96 Site Plan ................................................................................................................................ 96 Site Development .................................................................................................................. 96 Housing Construction ........................................................................................................... 96 Sales and Marketing .............................................................................................................. 96 Equity Investment/Financing ................................................................................................ 96

IX. Financial Feasibility ..................................................................................... 97 REVENUE ................................................................................................................................ 97 Pace of Sales ......................................................................................................................... 97 Price at Sales ......................................................................................................................... 97 LAND DEVELOPMENT COSTS ........................................................................................... 98

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ETU Approval Costs ............................................................................................................. 98 Pre-Approval Costs ............................................................................................................... 98 Planning & Engineering ........................................................................................................ 98 Permits, Fees & Bonds .......................................................................................................... 98 Offsite Improvements ........................................................................................................... 98 On-Site Costs ........................................................................................................................ 98 Site Preparation & Grading ................................................................................................... 98 Water System ........................................................................................................................ 98 Wastewater System ............................................................................................................... 98 Utilities Extensions ............................................................................................................... 99 Roads..................................................................................................................................... 99 Streetscape Construction ....................................................................................................... 99 Parking and Other Construction............................................................................................ 99 Overhead ............................................................................................................................... 99 Miscellaneous Indirect Costs ................................................................................................ 99 Contingencies ........................................................................................................................ 99 Plan Prep. Processing $ Approval ......................................................................................... 99 Permits, Fees & Bonds .......................................................................................................... 99 Lot Prep & Improvements .................................................................................................. 100 Model Decorate/Furnish ..................................................................................................... 100 Project Landscape ............................................................................................................... 100 HARD CONSTRUCTION ..................................................................................................... 100 Carriage Home & Seminary Building Condominiums ....................................................... 100 Amenities ............................................................................................................................ 100 Warranty & Reserves .......................................................................................................... 101 Marketing & Sales .............................................................................................................. 101 Builder Overhead ................................................................................................................ 101 REAL ESTATE TAXES ........................................................................................................ 101 FINANCING........................................................................................................................... 102

X. Acreage Reconciliation/Product Mix ........................................................ 105 XI. Appendix ..................................................................................................... 108

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Table of Figures Figure 1: Number of Philadelphia House Sales per Quarter: 1995-2013 (University of Pennsylvania) ..... 16 Figure 2: Philadelphia Housing Affordability Index: 1980-2013 (University of Pennsylvania) .................... 17 Figure 3: Average Days-on-Market for Philadelphia Homes (University of Pennsylvania) ........................ 17 Figure 4: Philadelphia Houses Listed For Sale â&#x20AC;&#x201C; Inventory v. Sales Rate (University of Pennsylvania) ... 18 Figure 5: Proposed Site Plan Concept ........................................................................................................ 19 Figure 6: Real Estate (Deed) Transfer Tax Receipts for Lower Merion Township (Lower Merion Township, 2014 Budget.) .............................................................................................................................................. 21 Figure 7: Transportation Type (Nielsen) ..................................................................................................... 25 Figure 8: Transportation Time for Work (Nielsen)....................................................................................... 25 Figure 9: Housing Supply By Year (City Data)............................................................................................ 27 Figure 10: Typical Architectural Styles Lower Merion Township (ReMax) ................................................. 28 Figure 11: Zip Code Map (Map.Huge.Info) ................................................................................................. 29 Figure 12: Home Sales by Zip Code (City- Data) ....................................................................................... 30 Figure 13: Average Sales Price by Month (www.accessphilly.com) ........................................................... 30 Figure 14: Unit Sales by Month (www.accessphilly.com) ........................................................................... 31 Figure 15: Average Price/sqft by Month (www.accessphilly.com) .............................................................. 31 Figure 16: Average Days on Market by Month (www.accessphilly.com) .................................................... 31 Figure 17: Unit Sales by Price Range (www.accessphilly.com) ................................................................. 32 Figure 18: 25 Mile Radius Map (Nielsen) .................................................................................................... 38 Figure 19: 25 Mile Radius Largest PRIZM Segments (Nielsen) ................................................................. 39 Figure 20: Seminary Site Zip Code (Realtor.com) ...................................................................................... 40 Figure 21: House Price Appreciation 1987-2013: Philadelphia v. 10-city Composite (University of Pennsylvania) .............................................................................................................................................. 40 Figure 22: Total House Appreciation Rates by Geographic Market (University of Pennsylvania) ............. 41 Figure 23: Philadelphia Metro Area Price Appreciation (University of Pennsylvania) ................................ 41 Figure 24: Carriage Home Buyer PRIZM Segment Buyer Descriptions (Nielsen) ..................................... 43 Figure 25: Income For Targeted Carriage Home Buyer PRIXM Segments (Nielsen) ................................ 44 Figure 26: Carriage Home Buyer Predominant Urbancity Class (Nielsen) ................................................. 44 Figure 27: Seminary Building Buyer PRIZM Segment Buyer Descriptions (Nielsen) ................................. 45 Figure 28: Seminary Building Buyer Predominant Urbancity Class (Nielsen) ............................................ 45 Figure 29: Supply & Demand Schedule ...................................................................................................... 45 Figure 30: Site Plan for Bell Tower Heights with Context ........................................................................... 49 Figure 31: Process Maps ............................................................................................................................ 50 Figure 32: Site Plan Phasing....................................................................................................................... 51 Figure 33: Close Up of Phase I Carriage Home Condominiums ................................................................ 52 Figure 34: Carriage Home Condominium Triplex ....................................................................................... 53 Figure 35: Carriage Home Condominium Fourplex .................................................................................... 53 Figure 36: Carriage Home Condominium Conceptual Design .................................................................... 55 Figure 37: Architectural Examples from Lower Merion ownership (ReMax) .............................................. 56 Figure 38: Seminary Close Up .................................................................................................................... 57 Figure 39: Slope Section of Seminary Building and Parking Garage ......................................................... 63 Figure 40: Green Roof ................................................................................................................................ 63 Figure 41: Site Plan with Amenities Highlighted ......................................................................................... 64 Figure 42: Pedestrian Circulation ................................................................................................................ 71 Figure 43: Vehicle Circulation ..................................................................................................................... 72 Figure 44: Utility Locations .......................................................................................................................... 75 Figure 45: Open Space ............................................................................................................................... 76 Figure 46: Stormwater Management .......................................................................................................... 77 Figure 47: Rain Garden, Water Retention Pond, Downspout Rain Garden & Permeable Pavement ........ 78 Figure 51: Final Site Plan ............................................................................................................................ 81 Figure 52: Maximum Density Site Plan ....................................................................................................... 81

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Tables of Tables Table 1: Major Employers by Area .............................................................................................................. 23 Table 2: Unemployment Rates (Lower Merion Township, 2014 Budget) ................................................... 24 Table 3: Units in Structure in Township (2008-2012) (American FactFinder by the US. Census Bureau). 27 Table 4: Year Structure Built in Township (2008-2012) (American FactFinder by the US. Census Bureau) .................................................................................................................................................................... 27 Table 5: Gross Rent for Lower Merion Township (American FactFinder by the US. Census Bureau ........ 28 Table 6: Absorption and Days on the Market (www.accessphilly.com) ...................................................... 32 Table 7: Lower Merion Housing Statistics (www.zillow.com) ...................................................................... 32 Table 8: MLS Summary in Lower Merion (Toll Brothers)............................................................................ 33 Table 9: Representative Existing Housing Inventory IN Lower Merion Township (www.zillow.com) ......... 36 Table 10: Supply Summary ......................................................................................................................... 37 Table 11: Acreage Reconciliation ............................................................................................................... 49 Table 12: Excerpt from Lower Merion County Code ................................................................................... 91 Table 13: Sensitivity Analysis...................................................................................................................... 97 Table 14: Cash Flow Summary from Financial Model .............................................................................. 103 Table 15: After Financing Cash Flows from Financial Model & Profitability Indicators............................. 104 Table 16: Product Mix ............................................................................................................................... 105 Table 17: Required Income by Price Point ............................................................................................... 106 Table 18: Target PRIZM Segments for Our Development ........................................................................ 106 Table 19: Acreage Reconciliation ............................................................................................................. 107

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I. Executive Summary This document presents a series of feasibility and concept studies for the development of a site in Lower Merion Township at 100 Wynnewood Avenue, Wynnewood, PA, compiled to create a proposal for Bell Tower Heights. The site for sale by the Archdioceses of Philadelphia presently is in use by St. Charles Borromeo seminary school located within a structure built in 1928. Overall, the site is 41 acres - the majority open space. This semester we conducted a market study, explored and assessed the regulatory and entitlement process of Lower Merion Township, developed a concept and site design and evaluated the feasibility and timing of the project. Several values directed our process: 1. The Power and Sentiment of Lower Merion Township community members 2. The Long Entitlement Horizon and the Contingent Land Acquisition 3. The Past Use of the Site as a â&#x20AC;&#x153;Publicâ&#x20AC;? Open Space 4. The History of the Site These values created many hurdles for our concept but the market environment and the singularity of this opportunity ensured that a financially feasible and community appropriate design could be developed. The site is located in a well-established in-fill location. Lower Merion Township is an affluent suburb just outside Philadelphia on the Main Line. Located within close proximity to jobs, shopping, entertainment, and public transportation makes the site a premier location to live. A well-planned development program for the site will adhere to the needs of the nearby population and allow for a mix of demographics and residential product types. It was ultimately decided that senior and luxury housing be built on the site to capture the high demand for housing in this area. The development must be designed to integrate with the existing neighborhood and offer public amenities to those living nearby. The carriage home condominiums and seminary building condominiums proposed for the site are priced competitively to attract the PRIZM segments that are targeted as potential buyers. The proposed development will require an extensive entitlement and approval process. Divided into two phases: Phase I is the development of a community of carriage homes on the open land and Phase II, the redevelopment of the Seminary Building. Although, Toll Brothers will acquire the entire property and begin the entitlement and synchronize events and processes for the two phases when possible, it is believed that the Phase I being more straightforward will accelerate and more time will be devoted to the planning of the proper Seminary adaptation. The strategy presented is to take the list of concerns and positive possibilities from community focus groups and get ahead from the start. The first step in this strategy is the historic designation of the Seminary building at the local and national level. This is to build good faith, showing the desire to preserve history and give back to the community through public space like the garden and chapel redevelopment. A similar project began the approval process in 2011 and has been hailed as a success. This has been used as a case study for our timing and decision to pursue the Church Conversion Ordinance rather than a Conditional Use Ordinance. This process really is what Toll Brothers and the community make it and as such our actions here will reflect and help to expedite or slow the typical land entitlement process required for Phase II. The expectation for the entitlement and approval timeline is 5.1 years for Phase II and 4.5 years, conservatively for Phase I. While the site development and construction for Phase II is unpredictable due to the unique

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structure; Phase I will be more typical of past Toll Brothers' project with several challenges including site topography and tight access points. Phase I and Phase II will be marketed to two demographics: Phase II to those downsizing and over 55 years old and Phase I to those moving into the community with families. These segments will call for two marketing approaches that recognize the demands of these groups as well as the channels of communication for differing generations. The target markets and demographics as well as the uniqueness of the entitlement and construction process in Phase II will result in further differences in the financing. Phase II may seek historical tax credits and look to equity rather than a construction loan (as an atypical structure like this will be hard to appraise and underwrite) while Phase I may follow a more typical Toll Brothers approach. These projects may come from the same site but their evolution in terms of entitlement and permitting to financing present two distinct projects. Hence, our strategy is to subdivide the parcel at acquisition and give each phase the unique care it needs while realizing synergies created for the other project by meeting the community's desires and then exceeding them. These two unique phases will make up Bell Tower Heights. More than just a residence, Bell Tower Heights is a luxury haven offering a new low-maintenance lifestyle surrounded by a vibrant community and easy access to the heart of Philadelphia. These condominiums and townhomes put you in the center of it all. At the door of residents, there will be an array of world-class amenities, including a pool, state-of-the-art fitness center, outdoor community space, enclosed courtyards, an on-site community library, plus much more. Our final concept has 7.3 dwelling units per acre, 309 units overall and a total of 19 revenue acres. The financial analysis of this concept suggests a 20% unlevered IRR and 32% levered IRR with a planned exit in thirteen years from the effective date of land option. These returns are contingent on a $16,529,088 land acquisition in 2014 dollars. The land acquisition was determined by taking the residual assuming a hurdle gross profit margin of 20%. On this site, Toll Brothers can offer a community that bridges the decades â&#x20AC;&#x201C; a dynamic home that allows people to open their doors to world class amenities and open space and walk out of the community into a thriving township with entertainment and even more services.

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II. Key Statistics

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III. Land Acquisition, Price, and Terms Term Sheet between Toll Brothers & Archdiocese of Philadelphia Effective Date: _____________________ This Term Sheet (“Term Sheet”) will outline the terms and conditions under which the prospective buyers, Toll Brothers, (“Buyer”), with the consent of the prospective seller, Archdiocese of Philadelphia, (“Seller”), may initiate due diligence investigations and afterwards at the Buyer’s option proceed towards the negotiation, in good faith of an agreement of purchase and sale of the property located at 100 E. Wynnewood Road, Wynnewood, PA (“Property”). The Property is described in greater detail below. Buyer and Seller agree to the terms detailed below:

1. Property Description. The Property subject to this Term Sheet consists of all Seller’s right, title and interest in and to the vacant land at 100 Wynnewood Road, Wynnewood, PA consisting of approximately 41 acres, depicted on the map linked below. The option to purchase the Property in phases has not been eliminated from the realm of possibilities. The Property is advertised/ represented with greater specificity in the following offering documents: Property Information Packet https://www.dropbox.com/s/z317zqop9brfj2p/St%20_Charles_Borromeo_ Seminary_HFF_OM_LowRes.pdf Site Map https://www.dropbox.com/s/nllmdvpe3zi87dy/AOPSeminary%20-%20Wynnewood%20Road%20Property-Base%20Map.pdf

2. Proposed Use & Zoning Changes. Buyer proposes to redevelop the existing structure on the site, the Seminary Building into apartment style condominiums as well as develop land into carriage home condominiums and a parking garage. Other redevelopments and developments will occur including the conversion of the chapel into a community space, the demolition of the current pool building and construction of an annex.

3. Seller. Seller has and shall have the full right, power and authority to convey the Property to Buyer as provided in this Agreement and to carry out its obligations hereunder, and all required action by the Seller to enter into this Agreement and to carry out its obligations hereunder has been, or upon Closing will have been, taken. The Entity on Title Report is represented to be the Archdiocese of Philadelphia or assignor of Archdiocese of Philadelphia.

4. Buyer. Buyer represents, warrants, covenants and agrees with Seller that as of the Closing Date, Buyer has and shall have the full right, power and authority to purchase the Property from Seller as provided in this Agreement and to carry out its obligations hereunder and that all required action by the Board of Trustees necessary to authorize Buyer to enter into this Agreement and to carry out its obligations hereunder has been, or upon Closing will have been, taken. Buyer is represented as the Green Team of Toll Brothers and titles this project Bell Tower Heights.

5. Purchase Price. $16,529,088.00 for three hundred or greater fully approved and entitled (easements, rights-of-ways, permits, utility rights and other agreements, studies and plans) units in the Seminary building and the carriage home community at the Property as depicted

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on a land development plan. In the event more or less than a three hundred lots are approved, the Purchase Price for the Property will be adjusted through negotiation. a) Payment Timing. There are four payments in order to show the continued commitment of the Buyer to the purchase of the Property as well as continually increase the equity the Buyer has in the deal. b) Initial Deposit or Earnest Money. Concurrent with the Effective Date of this Agreement, Buyer will deposit 5% of the Purchase Price, as Earnest Money to be held in escrow for the Property in an interest bearing account. If the purchase and sale hereunder is consummated in accordance with the terms and provisions of this Agreement, the entire Earnest Money, including any interest thereon shall be applied by the Title Company as partial payment of the Purchase Price due at the Closing. In all other events, the Earnest Money shall be disbursed as follows: (a) if Seller fails or refuses to perform, or any contingency is not satisfied or waived, the Deposit shall be returned and Buyerâ&#x20AC;&#x2122;s expense during the Agreement period shall be paid by Seller; (b) if Buyer refuses to perform during the Inspection Period because a contingency or condition is not fulfilled, 80% of Deposits (4% of Purchase Price) shall be returned to the Buyer; (c) if Buyer fails or refuses to perform, this deposit shall be paid to Seller. c) Second Deposit. A Second Deposit of 2% of the Purchase Price will be made when an Updated Survey and Title Summary is delivered and deemed acceptable to the Buyer. This will be delivered no later than sixty days after the Effective Date and Buyer will have 15 days to respond. d) Third Deposit. A Third Deposit of 3% of the Purchase Price will be made when Environmental Due Diligence is completed and deemed acceptable by Buyer. This will be completed no later than January 1, 2016. e) Retrade Option. After significant events including: the delivery of an updated survey, the completion of due diligence and the entitlement and approval decision, there will be opportunity to discuss and negotiate the decrease of increase or the Purchase Price. f) Payment at Settlement Date. Buyer will convey Purchase Price minus Earnest Money (All Three Deposits â&#x20AC;&#x201C; 10% of Purchase Price) and any interest earned.

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6. Buyer’s Remedies for Seller’s Non-Performance. a) Seller's Defaults. Seller shall be deemed to be in default hereunder if Seller shall fail to meet, comply with or perform any material covenant, agreement or obligation on its part required under this Agreement or any warranty or representation shall become untrue when made or deemed to be made. Any title defects shall render this Agreement voidable by Seller with earnest money returned to Buyer as well as compensation for expenses of Seller during the Agreement period. b) Buyer's Remedies. In the event Seller shall be deemed to be in default hereunder, Buyer, at Buyer's option and as its sole and exclusive remedies: (i) shall be entitled to terminate this Agreement, and the parties hereto shall have no further obligations to one another hereunder and Earnest Money shall be returned to the Buyer as well as compensation. Buyer will have opportunity to seek liquidated damages for any expenses during due diligence period.

7. Binding/ Non-binding Nature Provision. The terms in this Term Sheet are non-binding. They create simply a Term Sheet for the future negotiations and execution of a Purchase Agreement with the Seller; the Term Sheet will be superseded by the terms of any Purchase Agreement signed by both parties. This Term Sheet does not create any contractual obligation.

8. Rights & Access During Due Diligence Period. Before Closing, the Buyer shall have the right to enter the Property for the purpose of satisfying the above conditions. This can include but is not limited to the making of surveys - engineering studies (ex: slope or soil), environmental studies (ex: forestry studies) and economic studies, the process of approvals or entitlements or for any other reasonable and non-disruptive purpose. The Seller will also provide within 3 days of the signing of this Term Sheet any surveys/ studies and all submittals for approvals/ entitlements that were conducted prior to this agreement that the Seller has in their possession or control to distribute. Seller will not be liable for anything that happens when Buyer or Buyer’s agents enter the Property.

9. Settlement Date. Settlement will occur on the earlier of the two dates on December 31, 2019 or upon the entitlement in full of the three hundred plus units. Settlement will result in either the Buyer transferring the remainder of the Purchase Price or Buyer and Seller walking away from the deal.

10. Conditions Precedent to Settlement. This Term Sheet will provide at the obligation of Buyer to close, subject to satisfaction with the results of the following work. Due diligence will be conducted and approval/ permitting work will beginning at the signing of a Letter of Intent. The Buyer will conduct this due diligence work at its own cost and may terminate the Term Sheet at any time if condition is not met which case the Deposit will be partially refunded. a) Buyer will have confirmed a clear title and parcel boundaries. Parcel boundaries as well as area of the parcel will be compared to documents provided by Seller. b) Property will be found to match representation by Seller. c) Property will be properly zoned for the Buyer’s vision. d) Buyer has received a satisfactory environmental analysis of the environmental and structural makeup of the land in the Property such a document will be produced by an engineering firm or other qualified party.

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e) Buyer will have completed a forestry and wetland survey, floodplain and storm water runoff analysis and determined the results and conditions to be acceptable with not only local, state, and federal law. f) Utilities and access for the Property are available within a reasonable distance of the Property or available to the Property line. g) Buyer will have obtained insurance that the Buyer and the Seller find acceptable. h) Buyer will have obtained financing that the Buyer and Seller find acceptable. i) Buyer will have obtained all approvals and entitlements including but not limited to: easements, right-of-ways, approvals, permits, utility rights and any other agreements, studies or engineering plans.

11. Performance Schedule a) Buyer must comply with the following performance schedule:  January 1, 2016 – Completion of Environmental Due Diligence.  January 1, 2018 – Register the Seminary Building as a Historic Site.  January 1, 2020 – Acquired an option on an acceptable financing structure and deal.  January 1, 2019 – Achieved Entitlement and Approvals and Close or Terminate Exclusivity.  Buyer agrees to respond to all communications from the Seller within 15 business days, otherwise Seller may assume agreement. b) Seller must comply with the following performance schedule:  Seller represents:  Entire Exclusivity Period –  Has full right to transfer rights to the Property.  No notice of condemnation or contemplated condemnation.  No litigation or threatened litigation affecting Seller or the Property.  No other options or encumbrances on the Property.  Seller covenants:  60 Days – To deliver the Updated Survey and a Title Summary.  Entire Exclusivity Period –  Within 20 days – Allow Buyer to assume springing rights.  Shall not commit waste of Property.  Shall not impose or permit to be imposed any new or additional encumbrances on the Property.  Will cooperate in good faith with Buyer and make best effort to support Buyer in approval and entitlement process giving good faith standing and access to the Property.  Will vacate the Property and terminate all existing tenancies, leases or rights to occupy any portion of the Property and cause all tenants etc.  Seller agrees to respond to all communications from the Buyer within 15 business days, otherwise Buyer may assume agreement.

12. Developer’s Damage Liability for Delays. Developer can first and foremost lose its Deposit (at most 10% of Purchase Price and interest) as well as its exclusive right to work on the site.

13. Communication with Seller. Buyer will stay in regular contact with the Seller through the transaction and provide Seller with periodic updates through the Due Diligence and Approval/ Permit Process.

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14. Approvals. Buyer will be responsible for obtaining all full and final approvals and permits (at its own cost) for the Property. Seller will cooperate in good faith with Buyer, even if Buyer decides to move forward with another development plan. Seller will have the opportunity to review any application before submittal.

15. Confidentiality. Any information pertaining to the feasibility or quality of the Property transferred from the Seller to the Buyer in the form of studies or other documents as well as any findings made by the Buyer or the Buyerâ&#x20AC;&#x2122;s agents shall be kept in confidence.

16. Financing. Financing that is acceptable to Buyer and Seller must be secured and optioned by mid-2018. A Land Acquisition and Development loan, a Land Acquisition, Development and Construction Loan or a line of credit are acceptable.

17. Return of Deposit. The Term Sheet shall provide that in the event Closing does not occur because of the failure or any reason other than the withdrawal of the Buyer outside of the Due Diligence period, Deposit shall be returned in partial to the Buyer. There is no limit within this Term Sheet as to the damages the Buyer can seek for the Seller breaking this contract. However, if Closing does not occur because of any fault of the Buyer, the Seller is entitled to keep the Deposit.

18. Exclusive Period. Seller agrees that during the Due Diligence, Buyer shall have the exclusive right to conduct due diligence work, negotiate and execute a purchase agreement. Seller shall not sell, market or offer to sell the Property to any party other than the Buyer during this time. By signing below, the parties signify that the terms described in this Term Sheet are acceptable. [Signatures]

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IV. Market Environment The site is located in a well-established in-fill location, which offers many development opportunities. Located within close proximity to jobs, shopping, entertainment, and public transportation makes the site a premier location to live. A well-planned development program for the site will adhere to the needs of nearby population and allow for a mix of demographics and residential product types. Through the analysis below presented, we ultimately suggest that senior and luxury housing be built on the site to capture the high demand for housing in this area. The development must be designed to integrate with the existing neighborhood and offer public amenities to those living nearby. The carriage home condos and Seminary Building condo proposed for the site are priced competitively to attract the PRIZM segments that we are targeting as potential buyers. A. MARKET OVERVIEW Economy In Q4 2013, Real GDP of United States reached 15.79 trillion, which increased at an annual rate of 3.2 percent from 2012 to 2013.1 Real GDP in the United States is forecasted to grow at 4.0 percent from 2013 to 2014. Based on the Bureau of Labor Statistics, the inflation rate in the United States was recorded at 1.6 percent in January of 2014, and the unemployment rate of the United States in January 2014 was 6.6%. The GDP of Pennsylvania grew at 2.6 percent from 2012 to 2013. Pennsylvania’s GDP is forecasted to increase at 3.6 percent from 2013 to 2014.2 Overall, Pennsylvania’s economic development has been matching the pace of the national economy. Demographics The Philadelphia MSA ranks as the fifth largest population among major U.S. cities. 3 The Philadelphia MSA unemployment rate was 8.4% in August 2013. In May, seasonally adjusted total nonfarm jobs in the MSA increased to over 2,800,000, reaching the highest point since December of 2008. 4Moody’s Analytics projects that the MSA will create approximately 179,000 new jobs from 2011 to 2015, while adding 50,000 new residents. The education and health services sector is the largest and fastest growing sector of the economy.5 The leading employers in the area are universities and hospital systems. 33.1% of metro population have at least a bachelor degree, higher than US average. The Philadelphia MSA has a cost of living index that is 109.4%, ranking 24th highest in the country. The homeownership rate in the MSA is 69.3%, which is greater than the US average and is ranked 17th among the US markets. Philadelphia has the 49th most affordable housing market in the country. The labor participation rate in the MSA is 61.18%, which is less than the national rate of 67.0%. The labor force participation rate in the MSA is 72nd highest among the US markets.6 Housing Market The housing market in the Philadelphia area is slowly on the rise. After a large push of sales in the mid 2000’s, the housing market has stabilized at about 3,000 sales per quarter as seen in the below bar chart.

Trading Economics. Trading Economics. 3 US. Census Bureau. 4 Bureau of Labor Statistics. 5 Moody’s. 6 Principal Global, http://www.principalglobal.com/us/realestate/download.aspx?id=22952 2

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Figure 1: Number of Philadelphia House Sales per Quarter: 1995-2013 (University of Pennsylvania)

It is also important to note that the affordability index in Philadelphia has been on the decline since 2007, meaning that homes have become more affordable for buyers. This trend can be seen in the line graph below.

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Figure 2: Philadelphia Housing Affordability Index: 1980-2013 (University of Pennsylvania)

The average days-on-the market for Philadelphia homes has been increasing over the past ten years. It appears that this trend has stabilized, but is still relatively high when compared to the historic trend. Currently the average days-on-market is trending between 80 and 90 days.

Figure 3: Average Days-on-Market for Philadelphia Homes (University of Pennsylvania)

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The below graph shows that the inventory of houses listed for sale is declining, while the percent of houses that have been sold is on an increasing trend, indicating a demand-supply gap.7

Figure 4: Philadelphia Houses Listed For Sale â&#x20AC;&#x201C; Inventory v. Sales Rate (University of Pennsylvania)

Market and Site Toll Brothers has an extremely rare opportunity to acquire a premier 41 acre piece of land for redevelopment in Lower Merion Township. Lower Merion Township is recognized as one of the most affluent suburbs of the Greater Philadelphia metropolitan region. The site is located at 100 E. Wynnewood Road, Wynnewood, PA. As seen on the map, this property is on the corner of East Lancaster Avenue (Route 30) and City Avenue in Lower Merion Township. Currently, this site is comprised of a 284,000 sqft seminary building, a 21, 500 sqft swimming pool building, and the St. Martin Chapel (305,000 sqft in total). Because the income of household in Lower Merion Township is high ($153,309) 8 , we are planning to build carriage home condominiums and redevelop the seminary building into condominiums. The adjacent properties include Lankenau Medical Center, Overbrook SEPTA (Southeastern Pennsylvania Transportation Authority) station, Suburban Square Luxury Shopping Center and St. Josephâ&#x20AC;&#x2122;s University.9

University of Pennsylvania CNN Money, http://apps.money.cnn.com/bestplaces_2012/compare_tool_2012.jsp?id=CS4244976&iid=compare . 9 HFF 8

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Figure 5: Proposed Site Plan Concept

Opposition The Coalition for Neighborhood Character and Quality has been a strong opponent of any redevelopment of the Seminary site. They have a significant following and have developed a website (www.stopmakingdense.org) in order to continue to build up their support. However, counter to their views, our proposed redevelopment of the site will have many positive impacts on their community. First, our redevelopment will fit the existing architectural styles of the surrounding neighborhood, and integrate with the existing community. Secondly, the redevelopment will also add additional housing options for those living in the area, especially for senior individuals. Residents can live in the luxury condos designed for senior people in our redevelopment project while adding more diversity to the existing population. Thirdly, the redevelopment includes open space available to local residents and amenities, including a public library. Our open space plan will try to establish a comprehensive inventory of the many different types of open spaces, natural features and historic resources. Fourthly, in order to ease the traffic pressure, we will offer shuttle bus during peak hours to the nearest SEPTA train station. The shuttle bus will go a longer trip in the weekend during off peak hours. Finally, the redevelopment will also be a net positive for the local school system since all of the carriage homes and condominiums will pay school taxes. Our target consumers are senior people over 55 ages and empty nesters segment, so very few children will be added to the school system.

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B. ANALYSIS SUPPORTING PROPOSED MIX AND PRICING Demand Indicators 1. Market Area Lower Merion Township is not just any old neighborhood. It is among the top choices for affluent well-educated families moving to the metro area. Hence, the market area and demand appeal of Bell Tower Heights is hard to define with precision. The development will pull from several key groups: 



Within Lower Merion Township – The vast majority of the housing stock in the area is pre-1970 (~80%) and single family detached (~60%), new housing of this quality will appeal to individuals who want an updated and low maintenance product or a different setup- downsizing or expanding. Surrounding areas – Lower Merion Township has an engaged affluent population and by extension, a strong tax base. This base supports its spectacular public schools and a whole wealth of other services as well as attracting upscale retail tenants. This community has some distinct advantages even in comparison to its neighboring suburbs. Philadelphia – Lower Merion Township stands out next to the other suburbs in the area and so it is not surprising that it stands in stark contrast to the conditions and services available in the inner city. Suburban flight is still prevalent for those individuals starting families and realizing the suburbs offer a haven from crime and access to better public education. Outside of the Metro Area – Those moving to the Philadelphia area for work for any of the major employers that are spread across the city and Montgomery County, would seriously consider this suburb among their top choices for relocation.

Toll Brothers can quantify the demand increase for these four groups by lumping the latter three and quantifying the two driving forces: population increase and lifestyle changes. o

Projected housing demand includes all price ranges, all types of units and excludes existing housing stock.

Projected Population Increase/ Projected Average Household Size = Projected Housing Demand (1,555,333-1,527,165)/ 2.36 = 11,935 houses*10 o

Life Style Changes covers marriage, divorce, empty nest, retirement, other.

((Existing Household Size – Project Average Household Size)* Total Existing Dwelling Units)/ Project Average Household Size ((2.44-2.43)*24,329)/ 2.43 = 100.12 houses*11 *This is using 2019 vs. 2014 Household Size data within a 20 minute drive of our site. This only considers housing need up until 2019. This suggests that expectations can be even

10 11

Nielsen. Nielsen.

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higher for when this development would come online in 2024 or later. This is also conservative in terms of scope as a boundary of up to a 45 minute drive could be used. While these two calculations cover much of the demand sources, we didn’t take the resale of homes in the community into account. The resale of homes in the community increases supply and will dilute the demand for the project’s units. Below is a graph, of the real estate transfer tax receipts. There is a pretty steady increasing stream of deed transfers from 2009 to 2013; however, they have not reached prerecession peaks.

Figure 6: Real Estate (Deed) Transfer Tax Receipts for Lower Merion Township (Lower Merion Township, 2014 Budget.)

Overall, “based on the Township’s real estate transfer tax records for the first nine months [of 2009], it is estimated that the number of taxable real estate sales (commercial and residential) have increased +15% to 878 (from 763) as compared to the same time period in 2012.” 12 This doesn’t account for even 7.5% of project housing demand heading towards 2019 (and that is including commercial spaces). Hence, new construction may be the only way to meet the demand over the coming years. However, Toll Brother’s must be aware that there will be an upper limit – a maximum number of new possible households in the area. 2. Demographics of the Area Population/ Population Growth The population of Philadelphia- Camden- Wilmington MSA is the fifth largest in the nation with population estimates for 2014 standing just over 6 million residents.13 The current site stands just outside the city boundary. Across the street rests the Overbrook neighborhood as well as high- density urban areas, while Lower Merion maintains relatively at least lower density development. Within a five mile and ten mile radius of the site, population stand at about 640,000 and just south of 2 million, respectively. These areas have experienced positive growth around 1.1% and 1.52%, respectively from 2010 to the present day.

12 13

Lower Merion Township, 2014 Budget. US. Census Bureau; Nielsen.

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23,500

6,200,000

23,000

6,100,000 6,000,000

22,500

5,900,000

22,000

5,800,000 21,500

5,700,000

21,000 1 Mile Ring of 1oo E Wynnewood 20,500

Philadelphia-Camden-Wilming

20,000

5,600,000 5,500,000 5,400,000

2000 Census

2010 Census

2014 Estimate

2019 Projection

Figure 7: Population Growth of a 1-mile Radius around the Site vs. Philadelphia MSA (Nielsen)

This figure shows that within a one-mile radius of the site, population is estimated to decrease, while the population of the Greater Philadelphia MSA is growing very fast. Combined with our previous analysis about the population growth within five-mile radius and ten-radius of the site, it is clear that the overall population of Philadelphia is growing, while the population in the surrounding of the site is constrained by limited supply. Age/ Lifecycle/ Household Size While this community may have similar educational backgrounds, they work across sectors and are at a variety of stages in the lifecycle. Only one fifth of the population is under 16 years old within a five-mile radius. A little over half the population is evenly distributed across the working years, ages 25 to 64. The average household is 2.42 people. Two thirds of households are 1 or 2 people, less than 10% of households contain over 4 individuals. 3. Employment and Income Education/ Work/ Income The area surrounding the site is home to educated, white-collar private sector workers at a range of points through the lifecycle and a variety of household dynamics. Approximately 30% have attained a high school degree; another 57% have some form of higher education (39% hold college, masters, professional or doctoral degrees), much higher than the Philadelphia MSA average. Two- thirds of those living in a five- mile area hold white collars jobs. Of those over 16, eighty percent work in the private sector, and roughly 16% in non-for profit private work. Another 7% work for local government or themselves respectively. The most popular employment areas are office and administrative support (14.12%), sales and related occupations (9.05%), education, training, and library (8.61%), management including farmers and farm managers (8.51%), healthcare practitioners and technical (8.18%), food preparations and serving related

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(5.48%), and business and financial operations (5.25%).14 Looking at household income within a five- mile area, average and median income appears low; however, this is the result of incorporating the city district across the street from the site. Within a mile of the site, household income stands on average just over $100,000 and at the median of $69,765, both higher than the MSA at $82,220 and $60,770, respectively. However, throughout the township of Lower Merion, the median household income is recorded at $153,309.15 Employers The area has a history of strong growth and development. The township was first settled in 1682 and has developed into an attractive historic residential area with some buildings from the 17th century still standing. The area is populated with institutions such as St. Joseph’s University, Haverford College, which border the community and Bryn Mawr College, Drexel, University of Pennsylvania, and Villanova all within a few miles. However, the area is not only attractive to employees of adjacent institutions but those working in Center City which is a mere 6 miles away- a 13 minute train ride or 30-40 minute driving commute. The majority of those living in this township will travel alone to work, a third for 15 to 29 minutes.16 Hence, most work within the City Center or areas in the surrounding county. Major employers in the area are cataloged below: Table 1: Major Employers by Area City

County

Township

Adjacent Township

Philadelphia17

Montgomery18

Lower Merion19

Upper Merion20

 Federal Government  City of Philadelphia  University of Pennsylvania  School District of Philadelphia  Children’s Hospital of Philadelphia  Thomas Jefferson University Hospital  SEPTA  Temple University  US. Airways  Albert Einstein Medical Center

 Main Line Health Systems  Abington Health  Genuardi’s Market  Lockheed Martin  Hold Redeemer Health Systems  ACTS Retirement- Life Communities  Aetna  Prudential  SunGard  Teva Pharmaceuticals  Dow Advance Materials

 Main Line Health System  Lower Merion School District  Bryn Mawr College  Susquehanna International Group Maguire Insurance Agency  Township of Lower Merion  Diamond State Insurance Co.  Saunders House  Aqua Pennsylvania

 Lockheed Martin  GlaxoSmithKline  Phila: Media Newspaper  Valley Forge Colonial LTD.  BNY Mellon  GSI Commerce Solutions  US. Liability Insurance Co.  Yellow Book PA.  First Quality Retail SVC. LLC  Arkema

Nielsen. CNN Money, http://apps.money.cnn.com/bestplaces_2012/compare_tool_2012.jsp?id=CS4244976&iid=compare . 16 Nielsen. 17 Technical.ly, https://technical.ly/philly/2013/02/22/top-50-biggest-employers-in-philadelphia-and-its-surroundingcounties/ . 18 Montgomery County, http://www.montcoedc.com/business/major.aspx. 19 Lower Merion Township, http://www.lowermerion.org/Index.aspx?page=204. 20 Upper Merion Township, http://www.umtownship.org/documents/8/37/2012UMTCAFR_201308081256590992.pdf. 15

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As can be seen above with many of these companies, most employees will need at least a bachelorâ&#x20AC;&#x2122;s education and will be focused in the medical/ biotech or higher education fields. These two industries are less susceptible to downturns in the economy and that can be seen in the unemployment trends throughout the nation wide recession. Unemployment only fluctuated by 2% and remained several percentages below the national, state and metro rate. September 2013 was also the peak; estimate place unemployment rates in the township at 4.0% by December 2013.21 Table 2: Unemployment Rates (Lower Merion Township, 2014 Budget)

Job Growth Job Growth within the township appears to be stagnant.22 In evaluating the surrounding market, we also analyzed the health of the local economy. Unemployment in the Philadelphia metro area has fallen from 8.3% in December 2012 to 6.4% in December 2013. During the same time period, the area gained 12,400 jobs.23 As the Philadelphia economy continues to improve this will help attract buyers to the project. Commutes In terms of transportation type and transportation time, the majority of individuals use a personal automobile (~60%) and the vast majority of those who drive drives alone (~53%). The second largest method of transportation is public transportation, most likely the metro lines in the immediate vicinity of the area that connect the township with the city. The majority of individuals drive alone to work â&#x20AC;&#x201C; with the average household size 2.43. We may assume that most households will have more than one personal vehicle and that personal vehicles will be used on a daily basis, meaning quantity and access to parking must be seamless.

HomeFacts, Lower Merion Township. Lower Merion Township. 23 US Bureau of Labor Statistics 22

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Bicycle 2%

Other Means 1%

Worked at Home 4%

Walked 9% Public Transportatio n 24%

Drove Alone 53%

Car Pooled 7%

Figure 7: Transportation Type (Nielsen)

Focusing on how long they travel per trip, a third travel 15-29 minutes each trip; this is the largest segment. The second largest segment travels for even more time, 30 to 44 minutes. Overall, seventy-seven percent of those living within a 20 minute drive of this site travel somewhere between 0 and 44 minutes to work each way. This underscores the lack of employment or employment growth within the township. Most residents work outside the township. This observation can also inform the target market area for demand as any employment hubs within 45 minutes driving distance of the site may be prime area for marketing the units. We estimate this is about a 25 mile radius. Transportation Time for Work 35.00%

120.00%

30.00%

100.00%

25.00%

80.00%

20.00% 60.00% 15.00% 40.00%

10.00%

20.00%

5.00% 0.00%

0.00% Less than 15 minutes

15 to 29 minutes Percentage

30 to 44 minutes

45 to 49 minutes

60 or more minutes

Cumulative Percentage

Figure 8: Transportation Time for Work (Nielsen)

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4. Regional Office and Retail Property Characteristics  Mainline and Bala Cynwyd Submarket Office Facts- There are a handful of 100,000+ sqft office buildings throughout the submarkets. Rents range from $29 to $32 per sqft including or excluding certain utilities.24  Mainline and Bala Cynwyd Submarket Retail Facts- There is a strong retail community in this submarket. The retailers are indicative of the demographics. In the hard goods retail space, there is a Lord & Taylor, Saks Fifth Avenue, Urban Outfitters, J. Crew, Kate Spade, the Apple Store, William & Sonoma, lululemon athletica, Free People, Lily Pulitzer, and Paperia. Kate Spade owns its space, a reflection of it alignment with demographics.25 In the soft goods retail space, there is a Whole Foods, Trader Joe’s, and a Super Fresh. Whole Foods as an anchor tenant pays $35 per sqft.26 The range of eat out locations includes chains such as Olive Garden, Chili’s, Cold Stone Creamery, Crumbs to Elevation Burger and Sam’s Grill.

Supply Indicators Note: St. Charles Borromeo Seminary is located at the boundary of the Township of Lower Merion and the City of Philadelphia; however, the characteristics of housing supply in Lower Merion Township is very different from those in the City of Philadelphia. As a result, supply analysis will only focus on Lower Merion since that’s where competition comes from. In order to have the best estimate, we gathered data from various sources: 1. Housing Stock + Style There are close to 24,000 housing units in the township. A third of homes were constructed before 1939 and only 20% of available housing stock was built after 1970. Close to 60% are single-family detached homes. Other popular styles of housing are single family attached (10.9%) and 20 or more unit apartment buildings (17.8%). Residents from the township and those of the city prefer different housing types.27 Lower Merion residents prefer single-family detached, while Philadelphia residents prefer single-family attached. This phenomenon can be easily observed especially at our target site. Almost, if not all, of the housing units to the north of City Avenue, separating the two areas, are single-family detached. To the southeast of City Avenue and St. Charles Borromeo Seminary, there are mostly multi-family rental properties. Lower Merion Township homes have a distinct architectural style showing the vast amount of variability in design using similar exterior materials, specifically stone. The desire for variability and the usage of certain materials will inform our design.

CoStar. CoStar. 26 CoStar. 27 AmericanFactFinder by the US. Census Bureau. 25

D6 Team Green Page 27 of 144 Table 3: Units in Structure in Township (2008-2012) (American FactFinder by the US. Census Bureau)

1-unit, detached 1-unit, attached 2 units 3 or 4 units 5 to 9 units 10 to 19 units 20 or more units Mobile home Boat, RV, van, etc.

14,050 2,600 378 1,031 601 868 4,240 13 14

59.0% 10.9% 1.6% 4.3% 2.5% 3.6% 17.8% 0.1% 0.1%

Table 4: Year Structure Built in Township (2008-2012) (American FactFinder by the US. Census Bureau)

Built 2010 or later Built 2000 to 2009 Built 1990 to 1999 Built 1980 to 1989 Built 1970 to 1979 Built 1960 to 1969 Built 1950 to 1959 Built 1940 to 1949 Built 1939 or earlier

7 655 358 1,933 1,963 3,495 4,327 3,302 7,755

0.0% 2.8% 1.5% 8.1% 8.2% 14.7% 18.2% 13.9% 32.6%

Figure 9: Housing Supply By Year (City Data)

Apparently there are very few houses built after 2000, resulting in low supply. It is reasonable to predict that when new construction delivers, it would capture more market than existing houses.

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Figure 10: Typical Architectural Styles Lower Merion Township (ReMax)

2. Home Ownership vs. Rentership Household size differs among owner-occupied and renter-occupied at 2.62 and 1.99, respectively. Housing stock is valued well above the MSA average. The MSA has median home values of $264,609. In the township, the median home value is $557,400 but within one mile of the site, values are lower at $309,961. The area has homeownership rates of 10% higher than the national average at 76.6%. Hence, vacancy among owner-occupied houses is less than 3%.28 Relative to the city, transactions are high in this area. In the last few quarters, transactions in the city and Lower Merion have remained similar or equal.29 This may show the huge demand for homes in the area. The number of home sales increased significantly in 2012 and year-to-date 2013, notably in those properties with a market value of $1 million or more.â&#x20AC;?30 There are close to 5,000 rental units throughout the community. Median rent in the township is $1,326. Over a third pays more than $1,500 a month. Hence, for almost 40% of individuals, rent is more than 35% of his or her income. Rental vacancy is higher at 8.7%.31

Table 5: Gross Rent for Lower Merion Township (American FactFinder by the US. Census Bureau

Occupied units paying rent Less than $200 $200 to $299 $300 to $499 $500 to $749 $750 to $999 $1,000 to $1,499 $1,500 or more Median (dollars)

AmericanFactFinder by the US. Census Bureau. City Data. 30 Lower Merion Township, 2014 Budget. 31 AmericanFactFinder by the US. Census Bureau. 29

Units 4,895 68 7 83 327 478 2,214 1,718 1,326

% of Units 100% 1.4% 0.1% 1.7% 6.7% 9.8% 45.2% 35.1% (X)

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3. Supply and Absorption Data32 Four zip code areas (19096, 19072, 19066, 19004) are chosen because they are adjacent to our site, excluding all zip code areas in the City of Philadelphia. They also have similar density and community characteristics. See following map:

Figure 11: Zip Code Map (Map.Huge.Info)

www.city-data.com

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Figure 12: Home Sales by Zip Code (City- Data)

This set of data indicates an average price of $450,000. Absorption in most zip code areas is around 120 units per year, so total absorption of these four zip code areas should be 40 per month.

Figure 13: Average Sales Price by Month (www.accessphilly.com)

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Figure 14: Unit Sales by Month (www.accessphilly.com)

Figure 15: Average Price/sqft by Month (www.accessphilly.com)

Figure 16: Average Days on Market by Month (www.accessphilly.com)

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Figure 17: Unit Sales by Price Range (www.accessphilly.com)

*Figure 21, 22, 23, 24 show statistics from four zip code areas (19096, 19072, 19066, 19004) This following set of data shows housing information of the whole Lower Merion Township. Unit price averages $550,000, with a price per sqft of $200. Average unit sales (absorption) and average days on market (marketing projection) per month can be calculated as follows. Table 6: Absorption and Days on the Market (www.accessphilly.com)

Unit Sales Days on Market Unit Sales Days on Market

1-Mar-13 45 188 1-Sep-13 54 142

1-Apr-13 51 170 1-Oct-13 62 141

1-May-13 104 145 1-Nov-13 64 155

1-Jun-13 128 125 1-Dec-13 66 119

1-Jul-13 118 117 1-Jan-14 34 125

1-Aug-13 73 114 1-Feb-14 31 152

AVERAGE 69 141

Table 7: Lower Merion Housing Statistics (www.zillow.com)

Lower Merion

Zillow Home Value Estimate $563,900

Forecast +2.6%

Median listing price $689,000

Median sale price $616,950

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Table 8: MLS Summary in Lower Merion (Toll Brothers)

Sold Price (in $000) 400-500 400-500 500-600 600-700 700-800 800-900 900-1,000 1,000-1,500 1,500-2,000 2,000-5,000

Average Sold Price $ 441,298 $ 443,128 $ 540,570 $ 645,103 $ 739,474 $ 842,434 $ 948,553 $ 1,186,205 $ 1,670,681 $ 2,665,600

Average Size 1,446 2,443 2,681 3,114 3,370 3,790 4,319 5,054 7,659 8,196

Average $/sqft 305.2 181.4 201.6 207.2 219.4 222.3 219.6 234.7 218.1 325.2

Average DOM 85 97 75 71 78 147 62 72 132 126

# of Sold 42 117 115 92 62 40 36 78 23 20

This indicates that the price range of the houses is from $400,000 to $700,000. While technically the average price is $888,431 (Table excluded), it is mostly the result of the higher price unit sales bringing up the average. Average size is 3,000 sqft and it usually doesn’t take more than 90 days to sell the units unless it’s in the higher price range. Absorption within the $400,000-$700,000 range is 27 units per month.

4. Competition Current competition mainly comes from two projects: Bryn Mawr Master Plan community, and Merloc Partners project. 

Bryn Mawr Master Plan community

Bryn Mawr Master Plan community is a proposed in-fill/redevelopment master plan in Bryn Mawr, north of our site. Bryn Mawr is an existing community with excellent connectivity to retail, a train station and schools. The master plan proposed includes redevelopment of an infill parcel and new development on that site. The project will feature mixed-income residential, a boutique hotel and several retail shops. The residential component of this project is large, comprise of roughly 580 units. However, all of these are rental properties and thus do not compete with our project, directly. 

Merloc Partners project

According to a new report in Philly Mag, Sep 3 2013, there is a potential new project near Wynnewood Station, between Bryn Mawr and St. Charles Seminary.33 The project was originally proposed by Merloc Partners to the Lower Merion Township in 2000. The site, located in Lower Merion, is also near Narberth, thus bringing more traffic to both districts but only generating more tax revenue to Lower Merion. In 2002, Narberth and the developer ran into a lawsuit that Narberth wanted to prohibit the developer from building access through Narberth. Only recently, August of 2013, the two parties settled, putting the project back on track and may come into pipeline in the future. The project is comprised

Philly Mag, http://www.phillymag.com/property/2013/09/03/250-new-condos-next-to-whole-foods-andwynnewood-station-probably

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of 250 units; however, based on our following analysis on absorption, we don’t think this will pose a serious threat to our project, since the turnover rate in Lower Merion is high. 

Cross Properties and the Palmer Seminary

This structure was also a seminary from the same era, the 1920s, and intended for redevelopment as luxury apartments. The process went remarkably smooth and has been called a “historic preservation win” in the papers.34 (There are also few to no negative articles after Cross Properties is awarded the option to purchase.) We hope to recreate a similar sentiment.  In 2009, several apartment projects were being approved or in the pipelinesuggesting a pro-density sentiment all around, which may no longer exist.  In 2009, the housing downturn and recession may have led to a decrease in resources for the township due to lower tax revenue. The lack of resources may have spurred the approval of development, especially increased density.  The Palmer Seminary is 40% the size of the St. Charles Borromeo Seminary building. It resulted in 132 units. Our seminary conversion will create a total of 211 units, a lower density for premiums.

Mainline Media News, 3.28.2012.

D6 Team Green Page 35 of 144 Case Study: Palmer Seminary Redevelopment Address: 6 East Lancaster, Wynnewood, PA Past Use: Hotel, Seminary + Church Purchased: Q2 2013 Type of Housing: Multifamily (Rental) – 100 – one bedroom. Unit Breakdown: 132 Units and a medical office Overall Square Footage: 120,000 (14,000 sqft medical office) Capitalization: $40M History: Built in the 1920 and designed by Horace Trumbaur, the property was originally an upscale hotel and residence – Greenhill Farms Hotel. It was designed for those who wished to escape for either a short or long retreat. Throughout its history, amenities included concierge staff, gardens, a pool, outdoor dining, auto maintenance shop and country club. Other Facts:  Converted chapel into medical offices.  Received $5 million in historic tax credits.  Eight acres site, mostly developed.  1st modern apartment building on the “Main Line” in over 50 years.  Makes the Top Stories of 2011 list for Lower Merion Township.  Featured in Journal of Tax Credits  $23.5 M loan from Marcus & Millichap Corporation.  Decreased parking by 50 spots (below parking requirements) to increase open space. Received a variance for the 50% open space requirement for lots over 5 acres.35

Developer: Cross Properties (http://www.crossprop.com) - “vision is to become a pre-eminent real estate development team that owns, develops and operates 5,000 units valued at $1 billion by 2018.” 36 Projects Include:37 * The Legacy at Drexel Arms [Student Housing] – Q1 2013 Capitalization: $10M Special Notes: Added additional units and modern amenities; Built in the 1920s. * Icon – 1616 Walnut [Multifamily] – Q1 2012 Capitalization: $95M Special Notes: Conversion of Class C office to Class A residential; 250,000 sqft building; 220 units with parking and retail; Built in 1920 for SunOil Company HQ; Added asset to National Register of Historic Places in 2012. *1530 Chestnut [Student Housing] – Q3 2011 Capitalization: $15M Special Notes: Conversion from Class A office to Class A residential; 50,000 sqft building; master leased by Art Institute of Philadelphia; Built in 1920s as Bailey, Banks and Biddle building; Added property for National Register of Historic Places in 2008.

Cross Properties; Palmer Cross Properties. 37 Cross Properties. 36

D6 Team Green Page 36 of 144 Table 9: Representative Existing Housing Inventory IN Lower Merion Township (www.zillow.com)

Property 191 Presidential Blvd 20 Conshohocken State Rd 1750 Oakwood Ter #3E, Penn Valley 41 Conshohocken State Rd 42 Conshohocken State Road 20 Conshohocken State Rd APT

Location Lower Merion Township Lower Merion Township Lower Merion Township Lower Merion Township Lower Merion Township Lower Merion Township

Housing Type Condominium

List Price $199,000

Notes 1 bed, 1.0 bath, 910 sqft, Built in 1961

Condominium

$89,000

1 bed, 2.0 baths

Condominium

$269,900

2 bed, 2 bath, 1,299 sqft, Built in 1972

Condominium

$599,000

3 beds, 2 baths, 1,862 sqft, Built in 1976

Condominium

$150,000

2 bed, 1 bath, 794 sqft, built in 1948

Condominium

$99,000

2 bed, 2.0 baths

5. General Affordability Overview As one of the most affluent communities as well as a community preference for low density, affordable housing programs are limited in Lower Merion Township. The Lower Merion Affordable Housing Corporation (LMAH) has completed three projects:  13 Saint Asaph’s Road (Bala Cynwyd, PA): The redevelopment of a single- family home from the 1920s into apartments.  Spring Avenue Condo Development (Ardmore, PA): The construction of ten twinhomes sold to first time homebuyers. It was supported by HUD HOME and Community Development Block Grant Programs. “The PA Department of Community and Economics Development and Lower Merion Township provided the federal funding for this project. The state also provided Brownfields for Housing funds for the development.”38  Affordable Home Purchase Program: The program facilitated the sale of several affordable homes for first time homebuyers. “Lower Merion Township provided Community Development Block Grant Funds to acquire the property and complete minor renovations. The property was sold at an affordable price to the new home buyer with a soft second mortgage. The soft second mortgage has zero interest and no repayment while the buyers live in the home. The amount of this second mortgage is the write-down of the home to make it affordable to the moderateincome family. This write-down is the difference between the fair market value of the home and the affordable price.”39 There are not a lot of efforts by the Township to increase affordability. This indicates that we don’t necessarily need to propose affordable housing to get approvals. This is of course in contrast to the need for affordable housing in metro Philadelphia and the incentive packages available.

38 39

Lower Merion Affordable Housing Program, Completed Programs. Lower Merion Affordable Housing Program, Completed Programs.

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6. Supply Summary Based on all the supply and absorption data above, we estimate the average price for Lower Merion is around $550,000. Absorption varies, depending on the price range of units sold; however, a conservative number of 30 units per month can be estimated. Using our proposed schedule, we can calculate a projected number of units sold per month, both with and without marketing/pre-sale: Table 10: Supply Summary

Sales and marketing duration (Days) Sales and marketing duration (Months) Sales duration (Days, pre-sale and marketing excluded) Sales duration (Months, pre-sale and marketing excluded) Proposed number of Units Projected number of Units sold per Month, pre-sale excluded

Phase II 2,130 71 720 24 211 8.8

Phase I 1,860 62 1,080 36 98 2.7

This projected absorption is relatively low compared to current market absorption, meaning our goal would hopefully be easily achieved even taking into consideration the fact that we may be only targeting a small market segment. This steady but measured pace will also allow us to track, measure and reassess value frequently and regularly and hence, price accurately.

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C. TARGET MARKET DECISIONS Target Market Based off of our Market Area research we focused our primary target market area as the 25 mile radius which surrounds the development site. The area includes 1,846,940 households. 40 Through the analysis in this section, it was determined that 345,29841 of this population fits into our target market.42 Below is a map showing the 25 mile radius from the site. The 25 mile radius includes a majority of the Philadelphia MSA and the potential pool of customers that would be interested in purchasing a home at the Seminary site.

Figure 18: 25 Mile Radius Map (Nielsen)

Nielsen Nielsen 42 Nielsen 41

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Segments Defined In order to determine the targeted market segments for the site, we first began by looking at the 15 largest segments in the 25 mile radius around the site. Our findings can be seen below, including the demographic description, HH income, HH tenure, and HH IPA class for each segment.

Figure 19: 25 Mile Radius Largest PRIZM Segments (Nielsen)

From this list, we then pulled out the top 7 segments that would appeal to our site and product types. Our primary evaluation factors included whether the segment was primarily homeowners, whether homeowners had a high income, and whether they had a high IPA class. Lower Merion Residential Market In evaluating the market, we also analyzed the health of the local economy and housing market. Unemployment rate in the Philadelphia metro area has fallen from 8.3% in December 2012 to 6.4% in December 2013. During the same time period, the area gained 12,400 jobs.43 The Lower Merion Townships Unemployment stands at 4%. 44 As the Philadelphia economy continues to improve this will help sell homes in the project. It is hard to say now, but if mortgage rates continue to remain low, this will also help to sell units. The seminary site is located in the 19096 zip code which can be seen as highlighted below. In this zip code the average home price is $503,208, and the average sold price is $414,045. The average home price per square foot is $228, and the average sold price per square foot is $197. About 1% of all the homes in the zip code sold in the last six months.

43 44

US Bureau of Labor Statistics Lower Merion Township Budget

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Figure 20: Seminary Site Zip Code (Realtor.com)

In the Philadelphia metro area, house prices tend to not follow the more volatile price swings that other large cities experience. As seen in the below graph, house appreciation in Philadelphia is less volatile compared against a 10 city composite.

Figure 21: House Price Appreciation 1987-2013: Philadelphia v. 10-city Composite (University of Pennsylvania)

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It can also be noted that over the long-term, the house appreciation rates in the Philadelphia MSA are higher than the US, which can be seen in the below table.45

Figure 22: Total House Appreciation Rates by Geographic Market (University of Pennsylvania)

Therefore, the property market in Philadelphia is a good investment opportunity. The big price appreciation space will attract more investors and increase demand. The Philadelphia metro real estate market appears to be on the mend as shown in the below graph. After a significant decline from 2007 to 2012, prices appear to be on a steady rise.

Figure 23: Philadelphia Metro Area Price Appreciation (University of Pennsylvania)

Neighborhood Amenities The Lower Merion Township has many significant neighborhood amenities that will appeal to new residents living at the Seminary site. The Lower Merion School district is rated one of the best school districts in the state and has an enrollment of 6,700 students. In addition to the strong public school system, the area also hosts many well-known private and parochial schools from residents can choose from. Colleges and Universities located in the township include Bryn Mawr,

University of Pennsylvania

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Harcum, Haverford, Northeastern Institute for Christian Education, Rosemont, and St. Joseph’s University. Hospitals located in the township include Bryn Mawr which has 2,480 beds, and Lankenau which has 351 beds. There are also 48 churches and synagogues represented in the township. The area also has a comprehensive system of improved parks, playgrounds, swimming pools, picnic areas, and nature parks comprising 682 acres. When combined with the 126 acres of school playgrounds, Lower Merion has 10 acres for each 1,000 in population. The parks and playgrounds in the township are equipped with tennis, baseball, softball, football, volleyball, soccer, and basketball. Recreational establishments in the township include YMCA, JCC, Cynwyd Tennis Club, Merion Cricket Club, Philadelphia Country Club, Philadelphia Skating Club and Humane Society, and one theatre.46 The development site is located within a 1-mile radius of several transit options including: 

Public Transportation: Located directly across to the southeast of the site is the SEPTA Overbrook train station. It is only a 13-minute train ride from Suburban Station in Center City Philadelphia. SEPTA operate trains, buses and rapid transit every day.



Walk/Bike: Lower Merion Township has created a Bicycle and Pedestrian Feasibility Plan. A proposed bike route on the road will border the western side of the site.



Automobile: The property has immediate access to Route 30 and Route 1. The Property is only six miles from Center City Philadelphia by way of East of Lancaster Avenue (Route 30). The site also has direct access to interstate-476, Interstate-76 and Interstate-95. Most of residents in one-mile ring and three-mile ring prefer to choose driving a car or public transportation as their travel means. Most of them spend 30 minutes around to their work.

Nearby shopping and convenience retail include Lincoln Highway north of the site, City Avenue Shopping Center, to the west, and City Shopping Center to the east. There are multiple grocery stores including Whole Foods, and Target. There is a Walgreens located to the west of the site across Lincoln Highway. Lower Merion is frequently praised as a great place to live. In 2012 Lower Merion was named the fifth top earning town in the country by CNN Money which said “Part of Pennsylvania's wealthy Main Line corridor that popped up along the rail line of the same name, Lower Merion got its start when railroad executives built massive summer homes here. Today, it's an elite suburb of Philadelphia and dotted with colleges, including women's liberal arts school Bryn Mawr, which is also one of the township's largest employers. Residents bring lawn chairs and blankets to twilight concerts at the Bryn Mawr Gazebo all summer long and enjoy their pick of sledding hills in the winter months. The area's 682 acres of parkland and top-rated schools in the state form a wellrounded nest for well-heeled Pennsylvanians.”47 On-site amenities available to carriage home and seminary building condominium buyers include a library, a state of the art fitness center, a café, a restaurant, a community atrium, a walking trail, and a pool.

46 47

LowerMerion.org Money.CNN.com

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Carriage Home Buyers Carriage Home buyers will likely come from the Movers & Shakers, Pools & Patios, Brite Lites Liâ&#x20AC;&#x2122;l City, and Country Squires segments. These buyers are mostly empty nesters who are looking to downsize and live in an area that has plentiful amenities and is walkable to nearby services. It should be noted that County Squires at the age of 35 may have children and would be interested in relocating to Lower Merion Township for the schools. These individuals are used to living in larger luxury homes, so the carriage homes will be of larger size and have top of the line finishes. This group has significant net worth and current income. While those in these segments have had preferences of living in the suburbs and farther out, we anticipate capturing their interest as they look to move closer into the city center as they continue to age. Those interested in our site will value living in an infill location and are willing to give up some of the benefits of living in the suburbs such as having a large yard and lots of privacy. Below is a description of each target segment for this product type.

Figure 24: Carriage Home Buyer PRIZM Segment Buyer Descriptions (Nielsen)

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Figure 25: Income For Targeted Carriage Home Buyer PRIXM Segments (Nielsen)

Figure 26: Carriage Home Buyer Predominant Urbancity Class (Nielsen)

Seminary Building Condominium Buyers The condominium product type will be an exclusive 55+ community catering to those who want maintenance free living in a close-knit environment. The sheer volume of condos that will be built out will lead to a significant population of residents who are all in the same life stage. The condominiums will all be located in the redeveloped Seminary building and annex addition. Amenities for the residents will include weekly social events, a pool, a fitness center, and a cafĂŠ. The location of the site is perfect for those in this life stage, as they are adjacent to two large hospitals, and pretty safe and walkable (about 15 minutes) to almost anything they could ever need. In addition, they do not need cars due to the siteâ&#x20AC;&#x2122;s proximity to the SEPTA train station. All of these factors lead to this being a prime site for those who are older, want to downsize, and remain close to the services that they require.

Below is a description of the two segments that will be targeted for this product type.

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Figure 27: Seminary Building Buyer PRIZM Segment Buyer Descriptions (Nielsen)

Figure 28: Seminary Building Buyer Predominant Urbancity Class (Nielsen)

5 mile radius DEMAND 2014 DRIVERS Population 1.1% 23,000 Growth: People per 2.42 9,504 Household SUPPLY FROM SUBJECT SITE Subject Site for the Seminary1

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

23,253

23,509

23,767

24,029

24,293

24,560

24,831

25,104

25,380

25,659

9,608

9,714

9,821

9,929

10,038

10,148

10,260

10,373

10,487

10,602

100

Figure 29: Supply & Demand Schedule 1

1/4 of total units per phase per year. In line with the project schedule.

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V. Site Analysis A SWOT (Strengths, Weaknesses, Opportunities and Threats) was conducted to summarize the challenges, the project may face. Strengths Context: The site is in a strong affluent suburban community with a strong history of public services and private amenities. The Site is located advantageously right next to several train stations that place users minutes away from the urban center. The context of the site suggests a strong demand that has shown to have relatively stable home values even in the face of economic downturn. Continuous Tract of Land: The site is the single largest offering within this community for development at 41 acres. The last large tract purchase was less than 10 acres and had a structure occupying the majority of the site.

Weaknesses Philadelphia Boundary: The site is located just inside the Lower Merion Township boundary on the other side- the Philadelphia Metro. Future residents of the site would enjoy all the services of the township â&#x20AC;&#x201C; including great schools. But property values are at risk of being lower since the adjacent community is less affluent. To clarify the adjacent area, although technically metro Philadelphia is not the inner city but home values are lower. Current Structure: The site is already home to a 300,000 square foot structure- the Seminary Building. The construction of this structure is sound and material rich; however, the interior is poorly maintained. The floor plates may also not lend themselves for apartment development. South Side Slope: The south side of the site has a steep slope that would require much grading to build on and if homes were simply built when the land leveled, there would be risk of flooding and pooling of water.

Opportunities Residential Community: Lower Merion Township is a community tied together by many single- family homeowners unified to protect property values. However, a large tract of land could be developed as a community bringing people together over more than governance and political issues. Amenities for All: Since there have been so few sales of large continuous tracts of land, there has been little to no opportunity to build a community with amenities. These amenities will allow for the future protection of open space within the township as well as building community. New Building Stock: The majority of the housing stock in the community is pre-1970. Many of the homes are actually historic. Their upkeep and maintenance is challenge. This is an opportunity to really bring in new housing stock to this community. Appeal to New Trends: In a similar vein, new housing stock will better match current trends in housing including a desire for greater sense of community, more open space or spaces to be active, and active adult housing for the aging population. Build Relationships for the Future: Any future opportunities in this township will be a challenge just like this project. A successful completion of this project may lead to some preferred treatment in future acquisition processes.

Threats Entitlement and Approvals: The site is currently zoned for R-3. Any feasible plan would require the density to be increased and hence, the site to be rezoned. There are only so many times the Planning Board can be approached with a rezoning motion. The Planning Board and Commissioners may demand several iterations of designs and even still not allow a rezoning. Coalition for Neighborhood Character and Quality: A community based non-for-profit aiming to make sure that density is not increased throughout the community. The group is sensational and creating fear amongst the community that close to 1000 new units may be placed on the site. They may become a nuisance for the developer and may make demands that the developer will have to answer. Current Residents: Residents will not want to see greater density or more importantly the loss of open space that for all intensive purposes was a public park. They may bring about litigation at the extreme and more likely, debate and complaints at the public review meetings.

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VI. Vision Statement of Bell Tower Heights From the moment you arrive at the awe-inspiring historic Borromeo Seminary located on 41 spacious acres in Lower Merion, Bell Tower Heights reveals a grand setting and lifestyle unlike any other in the Philadelphia area. Located in a well-established in-fill location, with close proximity to jobs, shopping, entertainment, and public transportation; the site is a premier location to live. More than just a residence, Bell Tower Heights is a luxury haven offering a new low-maintenance lifestyle surrounded by a vibrant community and easy access to the heart of Philadelphia. These condominiums and carriage homes put you in the center of it all. Within Bell Tower Heights, you will find an array of world-class amenities, including a pool, stateof-the-art fitness center, outdoor community space, enclosed courtyards, an on-site community library, plus much more. We are offering a community that bridges the decades â&#x20AC;&#x201C; a dynamic home that allows people to open their doors to world class amenities and open space and walk out of the community into a thriving township with entertainment and even more services.

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VII. Design OVERVIEW The design of our condominium units emphasizes sustainability and closeness to the nature. Increasingly, senior residents are aware of the importance of sustainability and take an active interest in how their housing impacts the environment. Therefore, sustainability and green design present value for our buyers. Senior residents can benefit from the healthy green building materials and innovative design implemented into the project, as well as the positive impact on their utility bills. We plan to construct a vegetated roof on top of the parking garage for reducing the urban heat-island effect. The redeveloped condominium unit building will be pursuing LEED for Neighborhood Development certification. On the first floor of the redeveloped Seminary building the building will contain a nurse room for basic medical needs such as blood pressure testing and minor injuries. In order to accommodate wheel chairs, ADA features will be the standard design such as five foot width hallways and elevators. For example, the bathrooms in each condominium unit are larger than regular bathrooms. Additional handles on the wall beside the tub/shower will also be installed in order to insure that the senior residents will not fall down when they get in or out of the tub/shower. Additional amenities available to residents in the community include a fitness center and pool. The fitness center will offer yoga and exercise classes that will be targeted towards senior residents. The center area of the redeveloped Seminary building includes two community garden spaces, which will include gazebos, pergolas, sitting areas, and a fire pit; all intended to encourage social interaction. The ownership structure of the entire site will be a Condominium Association which will be in charge of maintenance of the landscaping and the buildings except for the church, which ownership and maintenance will be turned over to the Lower Merion Township for a Library. The overall maintenance of the site is a primary concern for the future property owners and the greater surrounding community. Maintaining the green space and making an open and integrated property with the surrounding community maximizes the opportunities presented in the site. This also solves the large concern of stormwater management on the site with passive landscaping such as rain gardens between carriage homes instead of larger more expensive stormwater management infrastructure. We plan to build 98 carriage homes on the site and convert the Seminary building into 211 condominium units. The carriage homes will have a two bedroom and three bedroom floor plan available, while the condominiums will have a one bedroom, two bedroom, and three bedroom floor plan available. The size of the carriage home units range from 1,800 sqft to 2,100 sqft, while the size of the condominium units range from 1,000 sqft to 1,500 sqft. The project will aim to achieve LEED Neighborhood Development Certification in its goal of becoming a sustainable community. The Seminary building will also aim towards achieving LEED for Building Design and Construction certification, while the carriage homes will aim towards achieving LEED for Homes certification.

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Figure 30: Site Plan for Bell Tower Heights with Context

Table 11: Acreage Reconciliation

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DESIGN PROCESS When initially looking at the site and bringing ideas to the table. Some major points were agreed upon such as maintaining the greenspace and view in the front and back of the Seminary and the financial infeasibility of building on the steep slope directly in the back of the Seminary. This is due to the Lower Merion Township zoning which states that on a slope there must be a decrease in streetscape and increase in lot size. Another primary concern was increasing density on the site in a visually appealing manner.

Figure 31: Process Maps

In the original site plan and after feedback from out midterm review. The road connecting to the parking garage was removed and connected to the Seminary Road to decrease the complications with connecting to a major interstate highway. A green roof was added to the top of the parking garage fitness center building to improve the view for Condominium owners as well as park users. A playground was added as another amenity. Lastly, the topography of the site was changed to improve stormwater management on site. A comparison site plan was created to confirm the feasibility of the Final Site plan. Though removing the green space in front of and behind the site increases the number of units, the team agreed that in an actual community meeting with Lower Merion Township this plan would not be feasible though a benefit of the beginning negotiations with this site plan is presented in the Process section of this report. The topography on the site focused on a passive design using the sites topography and slopes in design features. The carriage homes are built on topography that has been graded to form a staircase design to capture water.

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PHASE 1 AND PHASE 2: SEMINARY & CARRIAGE HOMES This site plan depicts two unique forms of housing as well as amenities for this community and the community at large all while providing the necessary services and infrastructure. We have split the project into two separate phases. The first phase consists of building out our carriage home community. The second phase consists of redeveloping the Seminary building, constructing an attached annex building, and constructing an attached parking garage. There are two distinct residential products. The two products offered on the site are the carriage homes and Seminary Building condominiums in the adapted seminary building.

Figure 32: Site Plan Phasing

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Carriage Home Condominiums Triplex & Fourplex The carriage homes are designed to simulate low density - combining 3 to 4 townhouse units, designed to appear as single family homes. Residents will own their individual townhouses within the carriage homes; the land will be owned by the HOA. This is for our first target market overall well-educated, well-off maturing couples. While each unit will have a more modest yard; there will be an abundance of community space. The carriage homes will echo architecture of the community and Lower Merion Township. The images of architecture in the surrounding community have been taken from ReMax. This community may be marketed as multi-generational housing with grandparents living in the Seminary building and the younger members living in carriage homes the target age group of 45 years old.

Figure 33: Close Up of Phase I Carriage Home Condominiums

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The Carriage homes provide the opportunity to maximize density on the site as well as maintaining the architectural character of Lower Merion Township. The homes will have parking garages in the rear and the houses facing outward to the surrounding community to add to the architectural character of Lower Merion Township. According to Lower Merion Township zoning requirements the each townhome must be on a lot of 5,000 sq. ft. The lots are the minimum 50 foot width facing the road and a 200 feet long. The setback requirements are 30 feet in front, 25 in the back and a minimum of a total of a 20 foot setback from the side yard. The Carriage homes are then left with a total of 1350 sq. ft. on the 30 by 45 foot lot constraints. With the 1,800 sq. ft. and 2,100 sq. ft. condominium units this provides the opportunity to stagger the homes and create a more pleasing design. The creation of the HOA for the entire site focuses on the importance of storm water management and allows for passive landscaping such as rain gardens. The overall consistent maintenance of the site alleviates the concerns of flooding due to development of the site.

Figure 34: Carriage Home Condominium Triplex

Figure 35: Carriage Home Condominium Fourplex

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Carriage Home Condominium Designs

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Figure 36: Carriage Home Condominium Conceptual Design

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Figure 37: Architectural Examples from Lower Merion ownership (ReMax)

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Seminary Condominiums We will renovate the Seminary building and close the “E” shape making an “8” and increase the units. The pool building and family life building, that fails to compliment the historical design of the main seminary building, will be removed improving the overall design with a historically complimentary new wing. This also allows the Toll Brothers the maximize units onto the site and maintain the large front and back green space that is integral. The Seminary condominiums are to be situated within the first to third floors. There are three condominium sizes 1,000 sq. ft., 1,200 sq. ft. and 1,500 sq. ft. to appeal to downsizing adults for ages 55 and up. The basement will be renovated for Utilities, HVAC, mechanical storage, sprinklers, janitorial office, electrical, storage, trash storage. Hallways will be located on the side closest to the courtyards to provide views of the space. This allows the condominiums units to have views of the site facing outward. The balconies will be renovated to support usage by condo owners and will have dividing railing to make private balconies for each condominium units. Elevators will be placed at corners and staircases renovated as well. The seminary condominiums will be finished in three phases divided by each wing.

Figure 38: Seminary Close Up

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Seminary Building Condominium Designs 1 BD Unit â&#x20AC;&#x201C; 1,000 sqft

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Seminary Building Condominium Designs 2 BD Unit â&#x20AC;&#x201C; 1,200 sqft

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Seminary Building Condominium Designs 3 BD Unit â&#x20AC;&#x201C; 1,500 sqft

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Seminary Building Layout Basement

First Floor

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Second Floor

Third Floor

The layouts provided above are a conceptual layout maximizing the building square footage. The unit designs provides a visual example of hallway, staircase and elevator locations and the ability to maximize the space. The sloped topography of the site allows for full usage of the first floor without lowering the profit of the units due to the fact that the units in the back of the seminary are not located on the ground floor.

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Parking Garage Design While the carriage homes will each have their own covered parking garages, there will be a compact two story parking garage with a third floor fitness center sunken into the hillside and covered with a green roof visually continuing the park for the condominium owners. Although, it will cost more to sink the parking garage into the slope, we believe it will have a huge impact on the views, which will be the primary concern for Lower Merion Township. The parking garage has 0.75 acre footprint and will have approximately 1 parking spot per unit as well as a maximum of fifty parking spots for guests of condominium owners. The garage will connect to the Seminary building basement and access an elevator to reach upper floors. The steep slope will be used as a design advantage by digging into the slope and featuring a green room on the top floor this will allow the garage to visually continue the park space. A shuttle bus will be provided as an amenity (described in detail later) to decrease impact on Lower Merion Townshipâ&#x20AC;&#x2122;s traffic and justify fewer parking spaces.

Figure 39: Slope Section of Seminary Building and Parking Garage

Figure 40: Green Roof

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AMENITIES There are several amenities being offered within this community. Many of which will be open to the entire Lower Merion Township. Over 14 acres has been dedicated to open space. These spaces include outdoor and indoor space. Onsite amenities available to carriage home and condominium buyers include a library, a state of the art fitness center, a terrace, a community atrium, a walking trail and a pool. There is a mix of private and public amenities. The private amenities are the pool, two large interior courtyards, fitness center and clubhouse. Public amenities have been provided on the site to negotiate with the community and to present opportunities that this development can bring to the surrounding community. The public amenities will allow community members to use the site for the first time. The public amenities are the park spaces in the front and back of the Seminary, the Church conversion to a library, walking trails, and one small interior courtyard.

Figure 41: Site Plan with Amenities Highlighted

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Open Space There are really no natural areas remaining on this site. Most of the lawns are manicured and landscaped. The area at the west of the site will remain a garden with a manicured French lawn and a tree corridor with benches and other furnishings. We will also maintain the sloped portion at the southwest end of the site. This area will act as a natural space for stormwater drainage along with the bioswale pond near the parking lot. These areas will be open to the boarder Lower Merion Township. Walking Trail There will be walking trails and sidewalks throughout the open space and the carriage home development. The street will invite the township residents to walk through the community and make sure there is a safe designated path for residents of the carriage homes when they transition from the residential sector to the open space areas.

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Fitness Center The fitness center will be 5,000 sqft set atop the parking garage and will have expansive views of the site and the community. This fitness center will be private and only for anyone living within this community and will have space for group classes or tenants to bring in their own trainers or physical therapists.

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Church Conversion The chapel will be renovated, designated as a historic site, and converted into a twostory library. This library will be open to the community and will eventually be donated to Lower Merion Township as a unique gem and asset. The maintenance expense we imagine would be too great for the HOA. This space will be connected to a small courtyard offering a space for children to play and read. The fixtures within the chapel such as the pews will be reused and split to create benches, tables and chairs. During our process we researched the feasibility of conversion into other uses. First condominium units or a single-family home were seen as unfeasible due to the architecture. We looked at using the architecture to our advantage and turn it into a pool but viewed the costs as to high if the long-term goal is to transfer the property to the Lower Merion Township. Ultimately the library conversion is less costly and optimizes the architectural significance of the site by opening the property up to the greater community. Most importantly transferring the property to the Lower Merion Township will prevent HOA fees from being too expensive.

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Enclosed Courtyard The three courtyards will provide for smaller, controlled public spaces. The smallest of the three adjacent to the Library will be open to the broader Lower Merion Township community. The two larger courtyards at the heart of the condominiums will be solely for residents. While one courtyard will give residents a space for picnics and sports, the other will provide a year round amenity by enclosing a pool and creating another terrace for gathering or green roof to increase stormwater retention.

Terrace A terrace will be built to allow for interaction and social gathering amongst the residents. Also on the first floor, space will be built out for residents to pursue hobbies and leisure activities. Enclosed Pool As mentioned, a pool will be developed in the interior one story enclosed courtyard for residents. It will be enclosed and the roof used as another resource for the community. The original pool building structure will be torn down. Private Recreational Space The center courtyard will remain unchanged and will provide a private recreational space for condominium owners. Shared recreational amenities will be provided to improve admittance to the space and encourage shared use of the space.

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Clubhouse The clubhouse space will be located in the center wing of the basement of the building seminary building. Due to the design of the building this center wing is at ground level and opens out to the arches of the two interior courtyard spaces. This creates access to the pool space, a staircase can be used to connect to the terrace space and the space also opens up to the center courtyard a private recreational space. This enlarges the clubhouse space but most importantly allows for usage of the first through third floor for condominiums units. Shuttle Bus The addition of 300 plus units to a community can have a strong impact on public services specifically traffic and education. Hence, a shuttle bus will be provided to residents funded by the HOA. This shuttle will make trip ever twenty minutes to the nearest SEPTA Train Station - Merion and Overbrook during peak hours. Peak hours are rush hour on a weekday, starting at 6am until 11am and 4pm until 7pm. During off peak hours, it will make a longer trip from the Seminary building to Overbrook Station to Lankenau Medical Center to Whole Foods and to Suburban Square and the Merion Station and then back to the Seminary Building. This is to decrease the number of people on the road during rush hour along this already crowded roadways, enable older residents to give up their vehicles but maintain mobility, as well as build a more sustainable community. Over the course of entitlement proceedings, we may ask for fewer parking spaces in order to ensure demand for the shuttle.

Playground A playground will be added behind the Church to provide a play space for children visiting the Library and for the children and grandchildren of residents.

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DIAGRAMS

The site is located in a well-established in-fill location, which offers many development opportunities. Located within close proximity to jobs, shopping, entertainment, and public transportation makes the site a premier location to live. A well- planned development program for the site will adhere to the needs of the nearby population and allow for a mix of demographics and residential product types. There will be sidewalks along all vehicular routes in the carriage home community. There will also be connection to the municipal sidewalk at the boundaries inward to facilitate the circulation of community members in to the public spaces. Finally there will be walking trails that connect the residential areas with the paths in the open space. The project will have a network of roads, alleys and walking paths in order to facilitate movement throughout the site and allow people to really choose their mode of transportation. Some specific considerations were taken when deciding on the location and shape of circulation paths. The first concern was the creation of a cut through for the Lower Merion Township drivers that would connect E. Wynnewood Road to Lancaster Ave - allowing people a short cut to get onto the major route. This concerned us because it increases traffic on the site and would probably make accessing or egressing tedious and slow for residents. The second concern was safety and speed. A large portion of this residential community will be over 55, they must be confident to cross the streets. The same must be true for the broader Lower Merion community who will use the open space and the library. We want these locations to be accessible in order to encourage use. Hence, roads are curved, speed bumps are included and there are several crosswalk locations designated with yields or stop signs. These roads and hardscapes will alter the landscape and be a large factor in the ongoing maintenance and upkeep of the community. Hence, their intelligent design is essential for managing storm water and keeping maintenance costs low.

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Figure 42: Pedestrian Circulation

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Figure 43: Vehicle Circulation

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There are two main vehicular entrances, which are located at the previous vehicular entrancesone off Lancaster Ave, slightly earlier than the exit to the Lankenau Medical Center entrance and at the original entrance to the Seminary. At the Lancaster Ave entrance, there will be a fork at the entrance allowing individuals to access the carriage home site and the parking garage. The left fork will curve towards the Seminary, the library and the parking garage. Parking will be at the carriage homes for those residents with Seminary condo parking at the garage and public parking for the amenities circling the Seminary.

The Streetscape Designs provide a section the street layouts. The streets connecting the carriage homes will be 2 lane roads 10 feet each with sidewalks, lighting and streetscapes. The Seminary road encircling the building will be reduced to one lane, and street parking.

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Figure 44: Utility Locations

Utilities will be brought through the new streets including water, electricity, gas, and cable. From the street, the utilities will then be fed into each townhouse unit. For the condominiums in the Seminary building, these utilities will be run through the building and to each unit. Utilities will be placed in the 50-foot right of way alongside property roads.

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Figure 45: Open Space

There are really no natural areas remaining on this site. Most of the lawns are manicured and landscaped. The area at the west of the site will remain a garden with a manicured French lawn and a tree corridor with benches and other furnishings. We will also maintain the sloped portion at the southwest end of the site. This area will act as a natural space for stormwater drainage along with the bioswale pond near the parking lot. These areas will be open to the boarder Lower Merion Township community.

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Figure 46: Stormwater Management

Our project will incorporate several stormwater reducing low impact development features including permeable pavement, an infiltration basin, and several rain gardens. Throughout the site our landscaping will include several rain gardens. These are shallow depressions that are filled with an engineered soil mix that supports vegetative growth. Typical soil depths range from 6 to 18 inches. Rain gardens are visually attractive and serve an important role in helping to control stormwater runoff.

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Permeable pavement systems are excavated areas filled with gravel and paved over with a porous concrete or asphalt mix. Typically, all rainfall will immediately pass through the pavement and into the gravel storage layer below it where it can infiltrate at natural rates into the siteâ&#x20AC;&#x2122;s native soil. Pavement layers are usually 4 to 6 inches in height while the gravel storage layer is typically 6 to 18 inches high. Permeable pavement systems will be used on the new roads and alleyways that will be built on the site. Below is a cross section of a typical permeable pavement system. We plan to build an infiltration basin adjacent to the proposed parking garage located downhill of the parking garage. This location is optimal because it has the lowest elevation on the site and all of the water on the site can flow to this location. Infiltration basins are shallow depressions filled with grass or other natural vegetation that capture runoff from adjoining areas and allow it to infiltrate into the soil. Below is a graphic and picture representing an infiltration basin.

Figure 47: Rain Garden, Water Retention Pond, Downspout Rain Garden & Permeable Pavement

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PROCESS One of the greatest challenges or threats to this project is the realization of this design through the entitlement of the land and approval of the design. The solution is two-fold engage the community and prove this design requires discussion and action will be ultimately better. Engagement will have to come at several touch points. But the first must be the Coalition for Neighborhood Character and Quality. The group has already begun conducting focus groups that it claims have the input of a broad constituency. Actual numbers suggest a select and small group of individuals and a short timeframe for feedback. The group has also begun meeting with developers and has met with at least two. Toll Brothers needs to meet the community. They need to meet with this group build a repertoire of credibility through the display of their past work. They need to show that the reason they are working so hard to win this property is because they love the character of the community already here. Other ideas for engagement may include conducting their own focus groups, taking community members on tours of the Seminary building to show all the work that needs to be done or of Toll Brothers developments in the area to prove past credibility. Besides building this relationship, Toll Brothers must lead the community to this final design by showing them that it is the right project. The Toll Brothers may wish to present a design to the community of Lower Merion Township that uses the current by right entitlement. The site is technically zoned for R-3, which would allow for the demolition of the Seminary and a complete build out on the 41 acres if Toll Brothers choses to. Another alternative/ comparison design that should be used to begin negotiations maximizes the space on the site increasing the amount of carriage homes from 28 to 98. These two designs do not answers the needs of the community and are not appealing overall. Hence, the strategy is to show that the final design presented here may require rezoning and higher density in certain areas of the site but has more open space, and answer the needs and wants of the broader community better. There is another project here that Toll Brothers has every right to build but it isn’t the right project – and Lower Merion Township will have to work with Toll Brothers to make sure the right project can be built. When looking at this final design a major concern may be that “money is being left on the table” with the large green space in the front and the back of the Seminary building. Our team members have agreed upon one major point. “Lower Merion Township is a community with a lot of money and time.” This has been proven with the creation of the Coalition for Neighborhood Character and Quality that has already formed to prevent the development of this site and has even offered and begun to raise funds to buy the green space and maintain it as open park space. In a typical suburban development maximizing land to the fullest is possible because the developer may be the first to the area on the outskirts of previous development and is defining the future character of the neighborhood. In another infill development where the space was a blight on the surrounding community and development of the site would be viewed as an improvement. This development is different the character of the community and the site has already been defined. Though the Seminary building is old, poorly maintained and greatly in need of renovation, the character of the building and architecture is viewed as visually appealing and the open space around it a “public” good. Going into Lower Merion Township community meetings with a redevelopment of a large building into many units and a development of a parking garage and 28 carriage homes is a significant increase in density. For this site our team members understand the importance of negotiation and proving how the development of this site will be an improvement for Lower Merion Township. This was presented above in the selection of product type - the carriage homes have a style similar to the single family homes in the area and simulate lower density. The overall site plan maintains the major views of the Seminary building that previous

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community meetings cited as extremely important.48 We also provided amenities that would bring the community into the space such as the church conversion into a library presented as a need for Lower Merion Township, cited in focus group surveys and the townshipâ&#x20AC;&#x2122;s capital budget plan.49 Even the design of the parking garage and fitness center as sunken into the slope and designed with a green roof are meant to maintain visually appealing views and solve the concern of stormwater management.

48 49

Coalition for Neighborhood Character and Quality, www.stopmakingdense.org. Coalition for Neighborhood Character and Quality, www.stopmakingdense.org.

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Comparison of Final Plan and Maximum Density Site Plan

Figure 48: Final Site Plan

Figure 49: Maximum Density Site Plan

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Land Use Entitlement and Regulatory Process Entitlement and approvals are one of the major values that has shaped this report. Major concerns that informed this investigation included the not-yet official historic position of the Seminary building, the codified protection of open spaces in Lower Merion Township, the slope at the South edge of the site, and the desire to maintain lower density overall. As stated before, the development will be divided into two phases to increase the efficiency of developing the property and recognize that these phases have drastically different challenges. Phase I is a more typical Toll Brothers’ project building single-family attached home on undeveloped land. Phase II is quite the opposite – a redevelopment of a historic building into condominium apartments. The phases do share a site so any and all activities, which can be conducted concurrently will be in order to increase efficiency. However, it is believed that Phase I being a more typical project will accelerate and more time and negotiations will be needed in order to create a plan the community is comfortable for the Seminary and the open space adjacent to it. Phase I National and State Authorities Preceding the development of major real estate projects, local government approval is required at different regulatory and jurisdictional levels. For the Toll Brothers infill project the identification of government authorities and decision making bodies’ plays a key role in gaining the approval of subdivision. The different forms and permits can be implemented simultaneously but certain forms cannot be implemented without prior completion of federal and state forms. At the federal level mandates are prescribed and handed down to the state and local governing bodies for implementation. Though more specific guidelines can be implemented on a local level in addition to the federal forms and must be followed. Mandated by the United States Environmental Protection Agency, the Environmental Site Assessment (ESA) is a report prepared for a real estate property that identifies potential or existing environmental contamination problems. The analysis typically addresses both the underlying land as well as physical improvements to the property. Due to the age of the building and currently its only partial use, there is concern over the site having asbestos. Anytime a condominium is applying for financial project approval, a bank reserves the right to request a Phase 1 ESA if the initial underwriting analysis indicates environmental concerns.50 Though the actual sampling of soil, air, groundwater and building materials encompasses basic due diligence for a developer who has acquired a site, this is typically not conducted during a Phase I ESA. The Phase I ESA is commonly the first procedure in the process of environmental due diligence. Standards for executing a Phase I site assessment have been created by the US EPA and are based in part on ASTM in Standard E1527-05. A firm of multidisciplinary specialist will need to be hired for compiling all the components of a Phase I study, such as regularly required skills in atmospheric physics, botany, chemistry, geology, and microbiology. Under ASTM E 1527-05, considerations were set forth as to who is qualified to perform Phase I ESAs. Defined as an Environmental Professional, this is someone with a current “Professional Engineer's or Professional Geologist's license or registration from a state or U.S. territory with 3 years equivalent full-time experience; Baccalaureate or higher degree from an accredited institution of higher education in a discipline of engineering or science and 5 years

Strategic Inspections, http://strategicinspections.com/services/phase-i-environmental-site-assessmentsesas/#sthash.R5Sbt6xn.dpuf.

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equivalent full-time experience; or have the equivalent of 10 years full-time experience”.51 Due to these needed specialized skills, most site assessments are conducted by private companies independent of the owner or potential purchaser of the land. Phase II ESA is implemented if the site is contaminated. A Phase II environmental site assessment is a more thorough investigation involving chemical examination for hazardous substances and/or petroleum hydrocarbons. Phase II Environmental Site Assessment takes longer due to the collection of original samples of soil, groundwater or building materials to analyze for measureable values of various contaminants. This analysis is normally undertaken when a Phase I ESA concludes the likelihood of site contamination. Another Federal jurisdictional document is the Wetlands Map Analysis conducted through a FEMA Floodplains map analysis, which is necessary under the Executive Order 11988 Floodplain Management. The adjacent neighborhood immediately to the north and a small “sliver” of the project site falls within ‘Zone A’ Flood zone due to the East Branch Indian Creek. This is considered a special Flood Zone Area. The southern area of the project site is located in the flood ‘Zone X’ and has a 1% Annual Chance Flood Elevation.

DNR Clean Air, http://dnr.wi.gov/files/PDF/pubs/am/AM465.pdf.

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The Executive Order 11988 Floodplain Management guidelines address an eight-step process that agencies should implement as part of the decision-making on projects that have potential impacts to or within the floodplain. Summarized below are the eight steps which reflect the decision-making process required in Section 2(a) of the Executive Order.52 1. Research if a proposed action is in the base floodplain (an area which has a one percent or greater chance of flooding in any given year). 2. Conduct early public review and public notice. 3. Identify and weigh practicable alternatives to locating in the base floodplain, including alternative sites outside of the floodplain. 4. Identify effects of the proposed action. 5. Develop measures to minimize the impacts and restore and preserve the floodplain, as appropriate. 6. Reexamine alternatives. 7. Present the conclusions and a public explanation. 8. Implement the action. Furthermore, with respect to development in flood plains, it is required for agencies to select alternative sites for projects outside the flood plains, if practical, and to develop measures to mitigate unavoidable impacts. This should be taken into consideration as an added cost onto the project. At the state level the Pennsylvania Traffic Impact Analysis is another jurisdictional document that must be filed out prior to sending in a formal subdivision plan to the Lower Merion Township. The site borders Highway 1 and 30 and will increase the density of occupants within the Township. The local department mandated a Highway Occupancy Permit (HOP) Process to assist local governments in regulating design construction, location, maintenance and movement of access driveways for the safety and welfare of the public. The local department also has governing authority to make further investigations and require additional information as it believes necessary from property owners requesting access to the state highway system. As part of the HOP process, applicants are tasked with identifying impacts of the proposed access on the transportation system in the surrounding area, and identifying mitigations to offset that impact through the creation of a Transportation Impact Study (TIS) and a Transportation Impact Assessment (TIA). Once a TIS and TIA is determined to be necessary in the HOP process, the department will review it in accordance to guidelines. The MPC requires the local Department to approve, reject or return the study submitted by the applicant. The regulations allow the Department to reject any study submitted for review if it is not satisfied with its validity, legality or regularity. The local department reviews the TIS or TIA to assure safe and reasonable access as well as safe and convenient 52

FEMA, https://www.fema.gov/environmental-planning-and-historic-preservation-program/executive-order11988-floodplain-management.

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passage of traffic on the State highway and to ensure that access driveways safely and efficiently function as an integral component of the highway system based on the amount and type of traffic expected to be served and the type and character of roadway being accessed. The Department will use the TIS or TIA to provide direction to the applicant on needed improvements. The TIS and TIA is an integral element of the HOP process and the approval process has 5 phases.53 1. TIS Scoping Meeting –You can only go once a month. The Applicant makes a Scoping Meeting Application and attends a TIS Scoping Meeting. 2. Submit HOP Application- The Applicant prepares and submits to the local Department the TIS or TIA and HOP application. 3. Department Review - The Department reviews the TIS and TIA. The Department agrees on the Mitigation Improvements and approves the TIS or TIA. 4. Prepare & Submit Engineering Plans The Applicant prepares the Engineering Plans. 5. Local Department Review & Approval The Department reviews and approves the Engineering Plans. The Pennsylvania Department of Environmental Resources implements a federal permit. The NPDES (National Pollutant Discharge Elimination System) Permit is the “National system for the issuance of permits under section 402 of the Federal Clean Water Act (33 U.S.C.A. § 1342) including a state or interstate program which has been approved in whole or in part by the EPA, including the regulations codified in Chapter 92 (relating to National Pollutant Discharge Elimination System permitting, monitoring and compliance).” The NPDES Permit for Stormwater Discharges Associated With Construction Activities is “a permit required for the discharge or potential discharge of stormwater into waters of this Commonwealth from construction activities, including clearing and grubbing, grading and excavation activities involving 1 acre (0.4 hectare) or more of earth disturbance activity or an earth disturbance activity on any portion, part, or during any stage of, a larger common plan of development or sale that involves 1 acre (0.4 hectare) or more of earth disturbance activity over the life of the project.” The process mandates a Public Notice, a public hearing and ultimately the Issuance of NPDES Permit.54 Due to the amount of mandated public hearing and the convenience of mandates being implemented on a local scale. The public notices and hearings should overlap when possible to decrease the amount of time spent on the ETU process. There is a state process for rezoning the Zoning Ordinance Amendment Procedure. Municipalities that make zoning ordinance changes for various reasons in this case changing the land use pattern, and accommodating a specific development site. The Pennsylvania Municipalities Planning Code (MPC) has rules that govern zoning amendments that all municipalities must keep in mind when amending zoning ordinances. It should be noted that if the local zoning ordinance of Lower Merion Township contains more stringent notification requirements than the MPC, the Toll Brothers must follow the extra ordinance requirements in addition to MPC requirements. The process mandates a Public Notice, a public hearing and the review of the plan.55

Highway Occupancy Regulations: Chapter 441 ftp://ftp.dot.state.pa.us/public/Bureaus/BOMO/MC/FinalTISGuidelines.pdf 54 EPA NPDES, http://www.pacode.com/secure/data/025/chapter102/chap102toc.html; http://cfpub.epa.gov/npdes/home.cfm?program_id=45. 55 Pennsylvania Municipalities Planning Code, http://mpc.landuselawinpa.com/MPCode.pdf; http://mpc.landuselawinpa.com/mpc_full6.html.

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Local Authorities The Lower Merion Township has multiple government councils involved in the decision of the change of zoning and the Subdivision and Land Development. The Change of Zoning56 is a similar process to the Change of Zoning processes mandated by the MPC for efficiency the MPC should be notified and the two processes should be overlapped. This begins by review of petition by the landowners of the site to the Lower Merion Township. A Public Hearing is mandated and a 2 week period of public notice is used to notify the public and signage of the hearing must be placed on the lot facing each road. It should be expected that Special Interest Groups such as Coalition for Neighborhood Character and Quality will come forward and lengthen this process. One major concern is that they will demand that each public hearing is held separately and will drag the case into court. The group has already stated on their website 57 that they have retained the services of Ken Aaron who was formally on the zoning hearing board for 18 years and before that was on the Township Planning Commission. If the petition is rejected the Board will not entertain another petition covering the same or substantially the same area and requesting the same change in zoning classification for a period of one year. If the petition is modified then the petition will be granted with subsequent changes and lastly if the petition is granted Toll Brothers will move forward into the Subdivision and land Development Process for the site. Subdivision & Land Development process begins with a tentative sketch plan. This process is mandatory for anything that exceeds eight dwelling units on 5 acres of land. This process must take place prior to a Formal Application. A plan must be provided to the Director of Building and Planning, the Township Engineer, the Land Development Committee and the Montgomery County Planning Commission and submitted to the Township Planning Commission. If the Toll Brothers succeed in rezoning the site as historical, the plans must be provided to the Historical Commission or the Board of Historical Architectural Review. The plans will be reviewed and approved or disapproved. The Formal Application must be provided to the Building and Planning Department. At this point the federal, state and county mandates and forms must be completed and approved and included with the formal application, such as storm water control permit, applicable state and federal statutes and regulations, other applicable Township ordinances, Township standards and good engineering practices. If the Director of Building and Planning determines that any documents are missing there is a 7 day rejection period, otherwise the form is accepted. The Preliminary Review Process has four plan options, but the preliminary land development plan and the conservation plan is appropriate for the Toll Brothers application. The conservation plan overlay is required for parcels of land of five acres or more. There is also the submission of an Improvement Construction Plan for the infrastructure and site preparation. As stated before Federal and state permits must be completed and included in the formal application and this would include the Runoff and Erosion Control Permit. A Utility Survey is also necessary for the Application for Greens Space and Parking Plan. Information Dissemination will take place over one month and the Director of Building and Planning shall forward complete sets of the application to the Montgomery County Planning Commission, the Chairman of the Township Planning Commission, the Township Engineer and the Chairman of the Land Development Committee. Staff reviews submission. The submission of plan revisions must take place 17 days prior to the date of the first hearing in front of the Township 56 57

Lower Merion Township Zoning (155-19), http://ecode360.com/6530574. Coalition for Neighborhood Character and Quality, www.stopmakingdense.org.

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Planning Commission. If these requested modifications are substantially different from the original plans then a new formal application is required. Another Public Notice and Public Hearing must take place. This cannot be combined with the Change of Zoning Ordinance meeting. The Public Notice date and time of the hearing shall be posted by the applicant in front of each street two weeks prior to the Township Commission hearing. There can be no changes or amendments to documents unless Toll Brothers requests a rescheduling which would add another month to the timeline. Private interests groups will play a key part in the length and time of the public hearing process. Before the Planning Commission Review Toll Brothers must submit 12 full sets of documents. Another set of revisions must be supplied 17 days prior to the meeting. A plan must be provided to the Director of Building and Planning, the Township Engineer, the Land Development Committee and the Board of Commissioners and submitted to the Township Planning Commission. If Toll Brothers succeeds in rezoning the site as Historical, the plans must be provided to the Historical Commission or the Board of Historical Architectural Review. The plans will be reviewed and approved or disapproved. These plans must include the building and driveway features for approval as this influences whether the proposed land development is in compliance. The Board of Commissioners must make a decision 90 days following the date of the regular meeting for the Planning Commission. Copies must then be Certified and distributed to the Director of Building and Planning, the Township Engineer and the Montgomery County Planning. The Certificate of Approval has a five year limit from date of approval. The approval must be made 12 months from the date of the approval of the preliminary plan. If rejected, Toll Brothers can resubmit without a minimum time limit but must repay for another set of fees. Approval with conditions must provide alterations within 12 months. Lastly the Final Plan must be submitted to the Director of Planning. Phase II Reality of Historic Structure & Desires of the Community The Seminary building was built in 1928; the Theology building was built in 1870. These two structures represent a quintessential part of the township’s landscape. It is quite clear from the press coverage as well as the founding of the Coalition for Neighborhood Character and Quality58 that the community is not only watching but also planning on participating. The Coalition for Neighborhood Character and Quality has put out two key documents: Community Focus Group Report, June 2013 and Update on St. Charles Seminary Development, February 2014. To summarize some key takeaways which are considering in our concept and schedule: Community Focus Group Report, June 2013:  Created through two 2-hour meetings during June.59  Most attendees were on a civic association board or on a commission or review board.60  “What is it about St. Charles’ presence in Overbrook that you value and would want to see preserved, if possible, in future uses of the property? o The most frequently-named feature for preservation was the open space of the campus, mentioned by almost every participant.

stopmakingdense.org

Coalition for Neighborhood Character and Quality. Coalition for Neighborhood Character and Quality.

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

Many persons identified a cluster of values closely-related to open space but with a more specific aesthetic emphasis, using words like serenity and beauty. o Several other persons mentioned a different value also related to preserving open space, which would be low-intensity use – e.g., not many people or cars. o The second most frequent cluster of values centered on the preservation of the historic architecture of the main building, chapel and campanile (bell tower). o Frequently and specifically mentioned was the vista from Wynnewood Road of its main gates and entry drive.”61 Positive Possibilities: o Preservation of open space. o The seminary becomes financially viable without having to change the physical character of the property. o No new construction on the ~ 40 acres to be designated for sale or lease – includes the footprint of the main seminary college building, chapel, and the fields on three sides of the building bordering E. Wynnewood Road, City Avenue, and Lancaster Avenue. o No disruption of entry vista from Wynnewood Road. o Retain historic architecture of main building. o Limited density. o Minimal impact on neighbors’ enjoyment of their properties. o Improved buffer between upper division seminary building and bordering neighbors. o Community-shared uses of the property, such as athletic fields. o Residential conversion of the main building (some participants specified for age-restricted 55+ condominium housing). o Retirement residences. o Healthplex-type luxury sports club concept. o St. Martin’s Chapel available for wider use by the community, especially in combination with residential conversion options for the main building. o Single family homes / townhomes. o Luxury resort hotel. o Tax revenue generating uses. o Public/Private/Religious development partnership. o Contribution to community vitality, complement and enhance neighborhood o Good, long-horizon partner. o Seminary remains successful with increased enrollment. o There was receptivity for a wider range of options on the side of the property bordering Lancaster Avenue, although these have not been vetted with the community. o Possibilities to be explored include low-rise medical office, town houses, or clustered luxury homes. o Mix of uses that pay back over different time frames. o Possibilities for "mixed use" development (ground floor retail and residential units above) along City Ave. It could create an inviting, active streetscape

Coalition for Neighborhood Character and Quality.

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that ties to the Overbrook train station. If parking were in the rear of the buildings it might also serve a dual purpose for playing fields.62 The most supported options involve no construction and preservation of the structures currently on the site. Hence, many concerns specifically for the development of Phase I will be on how to show good faith in the process by preserving the structure and build a reputation to facilitate the build out of the open space while hitting many of these â&#x20AC;&#x153;suggestions.â&#x20AC;? The Update shows a continued fear or worry about over-development as well as the need to align early on with developer in order to create the best option. It suggests that two developers have already met with the group. 63

62 63

Coalition for Neighborhood Character and Quality. Coalition for Neighborhood Character and Quality.

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Historic Structures in Lower Merion Township Lower Merion Township has recently founded the Historic Commission and the Historical Architectural Review Board (HARB). These two bodies fulfill two different roles, one can recommend or remove properties from the Historic Resource Inventory and the other “help[s] protect the distinctive and historic character of Lower Merion Township by considering the effects of proposed changes to buildings and properties within historic districts and on the Historic Properties List and by ruling on their appropriateness.”64 Although, our property as of right now is not contained in any historic district or registries at this time, the risk of a motion to place it on the registry in not unfounded. The criteria for designation are presented as: 1. “Has significant character, interest or value as part of the development, heritage or cultural characteristics of the Township, County, Region, Commonwealth or Nation, or is associated with the life of a person significant in the past; or 2. Is associated with an event of importance to the history of the Township, County, Region, Commonwealth or Nation, or 3. Embodies an icon associated with an era characterized by a distinctive architectural style; or 4. Embodies distinguishing characteristics of an architectural style or engineering specimen; or 5. Is the noteworthy work of a designer, architect, landscape architect or designer, or engineer whose work has significantly influenced the historical, architectural, economic, social, or cultural development of the Township, County, Region, Commonwealth or Nation; or 6. Contains elements of design, detail, materials or craftsmanship which represent a significant innovation; or 7. Is part of or related to a commercial center, park, community or other distinctive area which should be preserved according to an historic, cultural or architectural motif; or 8. Owing to its unique location or singular physical characteristic, represents an established and familiar visual feature of the neighborhood, community or Township; or 9. Has yielded, or may be likely to yield, information important in pre-history or history; or 10. Exemplifies the cultural, political, economic, social or historical heritage of the community.”65 Given the above criteria, we can see that many elements are subjective – but many could easily apply to our site from the historical and social perspective such as 1, 7, 8, 10, or to the architectural perspective: 4 and 5. Anyone can recommend a structure for the historic registry. An owner would be given notice if such an application was made and have 15 days to respond. The Commission would also give the owner 30 days’ notice before the public meeting to discuss designation – any party can present. The Historical Commission would have 60 days following this meeting to make a recommendation, after that it would be in the Commissions’ hands. As such along with statements/conclusions founded during community based focus groups, this schedule will proceed with preservation and reuse of the structure.

64 65

Lower Merion Township. Lower Merion Township, Ordinance 3560 88-18

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Options for Historic Reuse There are several options available if the developer proceeds with reuse of the seminary building. The first would be to maintain the structure and rehabilitate with no historic designation. While this an option, anyone can make an application for historic review and historic labeling will create extra steps in the permitting process. Hence, as a good faith gesture and further control over the permitting process, the developer may choose to register the property. Assuming the developer or a community member brings the property to the Historical Commission and it achieves historical designation, there appears to be two routes for redevelopment– the Church Conversion Ordinance or Conditional Use of Historic Structures. The two options are compared below. Table 12: Excerpt from Lower Merion County Code Point of Religious, Club, or Lodge Conversion 66 Comparison

Source

What It Can Do

Applicability Properties Requirements

Draft 7.27.12 – Section 155-133 http://www.lowermerion.org/Attach/ords/ord _conversion.html “The Zoning Hearing Board may authorize as a special exception the conversion of a building being lawfully used for a religious, club or lodge use into a two family dwelling or an apartment building in all zoning districts. If land development approval is required for the proposed conversion, the applicant may seek a conditional use from the Board of Commissioners in lieu of a special exception.” Religious, Club, or Lodge with Historic Designation There are 16 requirements total, relevant ones below.

Ordinance 3560 http://www.lowermerion.org/Attach/ords/ HPO20000315.htm “Properties listed on the Inventory are eligible to take advantage of several bulk and use incentives which may be granted by conditional use by the Board of Commissioners.” Types of conditional uses are impervious surface variances, setbacks, and building area, accessory apartment, home occupation, multi-family development.68

“No future subdivision of the property may reduce the lot area below the minimum requirement.

“That his application falls within the provision of this chapter which accords to the applicant the right to seek a conditional use; and

The converted building must comply with the building area and impervious surface requirements for the district in which the building is located. There shall be no external alteration of the building except those changes authorized under this section. Any changes to the exterior of the building shall be approved by the Historical Commission or the Historical Architectural Review Board for properties located in a Local Historic District upon a finding that they are complimentary in materials and design to

Conditional Use67

Property with Historic Designation An applicant for a conditional use shall have the burden of establishing both:

That allowance of the conditional use will not be contrary to the public interest. [Added 7-16-2003 by Ord. No. 3683] A Class I building in a residential zoning district presently being put to a nonconforming, non-residential use may be converted to a multi-family use, provided each dwelling unit shall have no fewer than 1250 square feet of occupied area. The area within the perimeter of the building measured at grade level may be expanded by up to 25% in conjunction

Lower Merion County Cody. Lower Merion County Code. 68 Board of Historical Architectural Review and the Historical Commission. 67

D6 Team Green Page 92 of 144 the existing structure, and subsequently be approved by the Board of Commissioners. The Zoning Hearing Board or Board of Commissioners shall specify the maximum number of families and dwelling units permitted to occupy such building and may prescribe such further conditions and restrictions with respect to the conversion and use of such building.

with a conversion to a multi-family use, provided there exists between the multifamily use and the nearest adjacent permitted use at least 250 feet. The area within the perimeter of the building measured at grade level may be expanded by up to 50% in conjunction with a conversion to a multi-family use, provided there exists between the multifamily use and the nearest adjacent permitted use at least 500 feet.”

Assure that adequate parking is provided for residents of the building and their guests. The Zoning Hearing Board shall require a planted buffer 20 feet in depth meeting the buffer standards in Section 155-114 D unless it makes a specific finding that the use of adjacent properties will be sufficiently protected from the impact of the converted building by a lesser buffer, or by no buffer at all. Dumpsters, mechanical equipment and any other similar improvements added to the exterior of the building shall be visually screened from adjacent properties by a wall, fence or landscaping. Where the entire building area is converted to dwelling units, the required parking shall comply with §155-95. All new outdoor parking spaces added to comply with required parking for the converted building shall be screened from the view of adjacent properties at ground level, to the extent practicable, by planting a mix of deciduous and evergreen trees and shrubs or a combination of fencing, walls or plantings. The application for conversion shall include a proposed landscape plan. Noise from mechanical units or other similar mechanical devices shall not exceed the background noise levels by more than 5 decibels when measured at the property line. If the net lot area exceeds five acres, the lot shall comply with the Open Space Preservation District provisions in Article XXVI.”

There are a few concerning clauses within this ordinance; however, this proposal intends to continue to work within the bounds of the ordinance. The blockade against further subdivision will remain enforced as individuals will only buy the space between units as it is a condominium not a cooperative. The only external alteration will correct the late addition of the pool. Also past

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projects suggest that if an alteration approved by the National Registry of Historic Buildings is in compliance with the ordinance then most of Lower Merion Township’s concerns with alteration are limited to the view from the street. The Religious, Club, or Lodge Conversion ordinance was drafted in response to six simultaneous projects looking to convert religious uses and/ or clubs to residential uses. The trend was deemed “alarming” by the drafters.69 The Conversion ordinance has a greater number of restrictions – however, it seems designed for this property. The initial step is the historic designation, which can take upwards of 105 days; however, we expect the process may go quicker as the township wants to preserve/ restrict the redevelopment. A concern that may arise is how to ensure throughout this process that the seminary building is separated from the surrounding land for development. All the historic restrictions as well as the open space district requirements would or already apply to this property. Hence, we have divided the parcel into two phases/projects.

Respect and Consideration of Cross Properties and the Palmer Seminary Process Historical reuse simply means that each project is drastically different and almost no part of the process can be known with any certainty. This schedule has been created using this remarkable comparable: Palmer Seminary Redevelopment as a model. This structure was also a seminary from the same era, the 1920s, and intended for redevelopment as luxury apartments. The process went remarkably smooth and has been called a “historic preservation win” in the papers.70 (There are also few to no negative articles after Cross Properties is awarded the option to purchase.) We hope to recreate a similar sentiment. We have not adopted the project’s timeline line by line for several reason:  In 2009, several apartment projects were being approved or in the pipelinesuggesting a pro-density sentiment all around, which may no longer exist.  In 2009, the housing downturn and recession may have led to a decrease in resources for the township due to lower tax revenue. The lack of resources may have spurred the approval of development, especially increased density.  The Palmer Seminary is 40% the size of the St. Charles Borromeo Seminary building. It resulted in 132 units. Our site would possibly result in a much greater number of units and higher density.  The Township may have expected this to be a one- off project. What are the odds another seminary in the neighborhood would need to sell off a piece of its property? And it may not be as accommodating as last time OR would prefer to work with Cross Properties again. Description of Process and Key Players The historic review process starts with a meeting of the owner and the Historical Commission (open to the public) in order to seek designation of the Seminary and the Chapel as Class 1 Historic Building on the registration. This approval can take up to 105 days. We expect it may be shorter since the community most likely wants to preserve the structure. After this initial meeting, the process of seeking national registration can begin and estimates show this should take a year. This national registration will allow us to seek historic tax credits. Once the building has been designated as a historic site, any work on the building must be presented and discussed with the Historical Architectural Review Board (HARB). This property as a historic site can be altered under the Religious, Club, or Lodge Conversion or Conditional Use. Using the former option, we can 69

Lower Merion Township Building & Planning Department, Memorandum To: Douglas S. Cleland, From: Robert E Duncan July 6th, 2012 70 Mainline Media News, 3.28.2012.

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seek a rezoning and then can proceed to seek a recommendation of appropriateness for our redevelopment plan and design. We have estimated more than a 20-month duration for this activity. This is based on the Case Study: Palmer Seminary Redevelopment adding contingency. Once the HARB has approved, the plans will go to the Historical Commission and then eventually the Board of Commissioners for the Township. This process overall seems very flexible as it is on a project by project basis since these redevelopments up until this point have been rare. This process lags as each group: HARB and Historical Commission only meet every 30 days.

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VIII. Schedule At this stage of the development process our schedule is portrayed in calendar days. Once we move closer to starting construction we will produce a schedule that reflects working days for the construction pieces of our project. Below is a brief explanation running through the main categories of our schedule. Each phase of the project is pursued on separate paths with the intent to accelerate the construction and sale of the Phase I carriage home condos. Phase I is expected to move quicker through the entitlement process, while Phase II is expected to take longer. The land in each Phase will be sold once the entitlements are obtained in the respective phase. Thus, the land will be taken down in two separate transactions. PHASE I Acquisition The Phase I acquisition period consists of due diligence (180 days), securing an option contract (90 days), and closing on the purchase of the land (90 days). The final purchase of the land is predeceased by obtaining an option contract on the land, obtaining final site plan approval, and obtaining financing. In total this period takes 1,830 days (5.0 years). Planning and Processing The Phase I planning and processing period is expected to take 1,650 days (4.5 years). The period begins with informal discussions and guidance from local leaders and politicians and then leads into developing the site plan after final zoning approval. Site Plan After completing the rezoning process in Phase I, a preliminary and final large lot plat and builder plat is produced and approved. After receiving final site plan approval, construction on the site can commence. The site plan process in Phase I is expected to take 840 days (2.3 years). Site Development The site development period in Phase I is expected to take 1,350 days (3.75 years). This period includes obtaining the permit and performing the required grading/excavation, stormwater infrastructure, water/gas/electrical lines, and offsite improvements. The offsite improvements performed in Phase I contains all of the required offsite improvements for the entire project, therefore requiring no additional offsite improvement work in Phase I of the project. Housing Construction Housing construction in Phase I is expected to take 1,080 days (3.0 years). Housing construction begins after all of the site work is complete. Each of the three phases of housing construction includes obtaining the required permits and other items necessary in order to build out the phase. Each phase consists of building 32-33 carriage home condominium units. Simultaneous with housing construction, the amenities included in Phase I will also be constructed. Sales and Marketing The sales and marketing period in Phase I is expected to take 1,860 days (5.2 years). This period commences when the website and marketing campaign is launched after final site plan approval. The sales of each of the three phases of carriage home condominiums will occur simultaneous to construction.

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Equity Investment/Financing The equity investment/financing period in Phase I is expected to take 180 days (0.5 years). This period consists of acquiring funding from loan financing and equity. The purchase of the land does not take place until these pieces of financing are in place. PHASE II Acquisition The Phase II acquisition period consists of due diligence (180 days), securing an option contract (90 days), and closing on the purchase of the land (90 days). The final purchase of the land takes place after obtaining an option contract on the land, obtaining final site plan approval, and obtaining financing. In total this period takes 2,445 days (6.7 years). Planning and Processing The planning period for Phase II is expected to take 1,845 days (5.1 years). This period starts with informal discussions and guidance from local leaders and politicians and then moves into obtaining approval of historical status and rezoning. The last step in the planning period is obtaining the right to build and moving on with the project. Site Plan The site plan period in Phase II is 420 days (1.2 years) and consists of a preliminary site plan and then receiving final approval of a final site plan. Once the final site plan is approved construction can then begin on the site. Site Development The site development period in Phase II is expected to take 630 days (1.75 years). This period includes obtaining the permits and performing the required grading/excavation, storm water infrastructure, water/gas/electrical lines, and offsite improvements. The offsite improvements performed in this phase contain all of the required offsite improvements for the entire project, therefore requiring no additional offsite improvement work in Phase I of the project. Housing Construction The housing construction phase of Phase II is projected to take 1,170 days (3.2 years). This period includes gutting and rebuilding the Seminary building into condominiums, constructing the annex building on the back of the Seminary building, constructing the parking garage behind the Seminary building, and constructing the amenities included in Phase II. Following the construction of these facilities, construction then commences on the sidewalks, street lighting, paving, curbing, and landscaping included in this phase. Sales and Marketing The sales and marketing period in Phase II spans 2,130 days (5.9 years). This period starts with a press release and website launch after the phaseâ&#x20AC;&#x2122;s site plan approval. This is intended to garner initial interest in the project ahead of providing units available to purchase. After the model condo is constructed we then launch a general marketing campaign, provide a selected clients tour, and commence the condo sale period which continues through the construction of all of the units. Equity Investment/Financing The equity investment/financing period in Phase II is expected to take 600 days (1.7 years). This period consists of acquiring funding from the historic preservation tax credit, loan financing, and equity. The purchase of the land does not take place until these pieces of financing are in place.

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IX. Financial Feasibility REVENUE Pace of Sales The pace of these cash flows is dependent on the construction timeline. The construction timeline and the timing of cash flow is complicated by the need of multiple units to be completed before owners can move in. Since the carriage home condominiums are designed in clusters of three or four and the Seminary building will be transformed into condominiums, Toll Brothers will receive closing payments in chunks. We have determined that it will receive payments at the carriage home condominium level as a cluster is completed. In the case of the Seminary building condominium building, sales will close as each of the courtyard north and south are completed. There will be a temporary lobby in place while the each section is completed. Price at Sales Base price of homes is discussed in a greater detail above, under Product Mix. These are initial base prices based on market statistics at this time. In this analysis the weighted average price for Seminary building condominiums and the carriage home condominiums were taken by the number of units at each price. The carriage home condominiums on average will sell at $625,000 per unit and the Seminary building condominiums with sell at $446,445. Weighted Averages were used because predicting which layouts would sell first will be difficult to predict. PURCHASE PRICE Through our analysis, we arrived at a purchase price of $16,529,088. This was calculated by arriving at a 20% unleveraged return for the project. In addition, we ran several sensitivity scenarios to observe the effects of changing the purchase price and sale price of the units. This sensitivity analysis can be seen below.

Table 13: Sensitivity Analysis

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LAND DEVELOPMENT COSTS ETU Approval Costs Lower Merion Township has numerous fees associated with the ETU process. Such as: Pre-Approval Costs $500,000 expended over period required to secure ETU (prior to land acquisition). Planning & Engineering Planning and engineering costs will amount to $1,000 per unit. The project has 211 Seminary building condominiums and 98 carriage home condominiums. Thus in Phase II, the planning & engineering cost is $211,000 ($1,000/du*211). In Phase I, the planning and engineering cost is $98,000 ($1,000/du*98). The total cost is $309,000. Permits, Fees & Bonds71 Permits, Fees & bonds require $5,000 per acre. In our project, Phase I has 12.8 Acre, and Phase II has 6.24 Acre. Therefore, the Phase I cost is $6,400 ($5,000*12.8). The Phase II cost is $31,200 ($5,000*6.24). Offsite Improvements Offsite improvement costs include widening Lancaster Avenue by one lane ($500,000) in addition to relocating 15 light poles ($225,000). On-Site Costs Both Clearing & Grubbing and Erosion Control cost $200 per unit. In our project, we have 211 Seminary building condominiums and 98 carriage home condominiums. So, the total cost is $61,800 ($200*(211+98)). Stormwater Management System The design and securing of permits will cost $200,000. A detention basin will be installed for $125,000 and 10,890 LF of storm piping will be installed at $100 per LF ($1,089,000). Site Preparation & Grading Design and permits cost $200,000. Site prep and grading will cost $1,100,000. Water System It will cost $200,000 to design & secure permits for backbone water system connections. This includes all water mains to building sites as well as temporary and permanent fire protection systems. The cost to install is $120 per LF. We estimate the total pipes length to be 10,890 LF. We are planning to complete 85% in Phase I, and the remaining 15% in Phase II. Thus in Phase I, the install cost of water system is $1,110,780. In Phase II, the install cost of water system is $196,020. Wastewater System It is $5 per gallon of capacity to design & secure permits for backbone system to service building sites; Average usage: 75 gallons per day per person. We estimate there are 2 people on average in each Seminary building condominiums and carriage home condominiums. In Phase I, total consumption of wastewater is 14,700 gallon per day (98 units *2* 75). In Phase II, total consumption of wastewater is 31,650 gallon per day (211 units*2*75). Total Phase I is 74, 250 ($14,850*5), Phase II design and secure permits cost is 158,250 ($31,650*5). We assume $75/LF 71

Lower Merion Township Permits and Forms: http://www.lowermerion.org/index.aspx?page=361

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to install. Same as the water system, we estimate 9,257 LF to be installed in Phase I, and 1,634 LF to be completed in Phase II. Respective installation cost is $694,238 ($75/LF *9,257) and $122,513 ($75/LF *1,634 LF). Utilities Extensions $200,000 to design & secure permits to extend (underground) backbone utilities (gas, electric, CATV/Internet, etc.) to and within project. Assume $100/LF. to install backbone service to each Building Site. We estimate total cable length to be 10,890 LF. We are planning to complete 85% in Phase I, which is 9,257 LF. The remaining 15% will be completed in Phase I, which is 1,634 LF. Multiply these two numbers with $100/LF. We get the total install cost in Phase I is $925,650, and the install cost in Phase II is $163,350. Roads Allow $240 per LF of curb, base and paving cost for roads @ 36 foot width and $200 per LF for roads @ 30 ft. width. The rate of cost per LF@ a foot wide is 6.67 ((240-200)/ (36-30)). The roads width for our project is 20 LF. So the cost is 133/LF (20*6.67). Total amount of roads length is 10,890 LF. In Phase I, the cost for road curb installation is $1,234,817 (10,890*85%*133). In Phase II, the cost for road curb installation is $217,909 (10,890*15%*133). Streetscape Construction The cost of $425 per linear foot is used for estimating streetscape project costs. This cost estimates only the basic cost for sidewalk and crosswalk infrastructure and excluding any roadway repaving or conflicting utility or drainage costs. In Phase I, the cost is $3,934,104 (9,257/LF * $425)72 In Phase II, the streetscape construction cost is $694,238 ($425/LF *1,634 LF). Parking and Other Construction Assume structured above ground parking is $30,000 per space. We have 211 underground/structured above ground parking spaces. The cost of ground parking is $6,330,000 (211* $30,000). Overhead Use 3% of Land Development Costs as incurred. Miscellaneous Indirect Costs Use 2% of Land Development Costs as incurred. Contingencies We estimate the contingencies cost is 10% of total land development cost. Plan Prep. Processing $ Approval Plan Prep. Processing & Approval costs include architect and other consultant fees. Assume $3500 per unit. There are a total of 211 Seminary building condominiums and 98 carriage home condominiums. The total costs is $1,081,500 ($3,500*(211+98)). Permits, Fees & Bonds Include various fees, permits & exactions. We assume $7,000 per unit. The total cost is $2,163,000 ($7,000*(98+211)). 72https://connect.ncdot.gov/municipalities/PlanningGrant/Sample%20Plans/Albemarle%20Sample%20Plan%20-%2

0Appendix%20E.pdf

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Lot Prep & Improvements Estimated at $1.10 per sqft. Itâ&#x20AC;&#x2122;s a reasonable cost since most of the work is done in site development.73 Model Decorate/Furnish We are planning to build one Seminary building condo model and one carriage home condo model. Each Seminary condo costs $50,000, and each carriage home condo costs $70,000. Project Landscape Estimated at $6 per sqft. Based on various online sources, this cost should be around $4-$5 per sqft, however since we are proposing some complex landscape feature to deal with the storm water issue, we estimate the cost to be higher.74 HARD CONSTRUCTION Carriage Home & Seminary Building Condominiums Based on product and cost assumptions, the hard costs of the carriage home condominiums is $80/salable sqft. The salable size of carriage home condominiums is 192,000 sqft. There will be 49 individual 1,800 square foot carriage home condominiums and 49 individual 2,100 square foot carriage home condominiums. The homes will be paired in groups of 4 and 3 and designed to look like single family homes on large lots. There will be a total of 28 grouped carriage home condominiums styled as single family homes. Toll Brothers typically budgets $75/salable sqft for single-family construction. Given the similarity of the construction of our Carriage Home condo structures to that of typical single-family construction, we estimated that the cost to build these structures would be slightly higher at $80/salable sqft. Our Carriage Homes are basically constructed as large homes split into 3-4 condo units. The hard cost of the Seminary building condominiums is $111/sqft which includes $11/sqft for demolition costs. The hard cost for the carriage home condominiums is $80/sqft. Amenities RSMeans CostCaluclator was used to calculate the costs of buildings providing amenities such as the parking garage, chapel, enclosed pool, and fitness center. Due to the fact that this is a renovation and the RSMeans calculation on provides new construction of the three cost options provided (low, med, high) the high range was chosen to cover the cost of renovation and the more expensive stone materials. 75 1. Parking Garage The parking garage has been designed to optimize the use of the slope on the western side of the site behind the Seminary. Currently the design provides enough space for 1 car per condominium unit. The typical range of square footage for surface parking lots are 300 to 350 square feet per parking stall, which includes the area required for the parking stall and drive aisles. The cost to build an above ground parking garage is $30,000 per space. With 211 spaces our garage will cost $6,330,000 to build.

http://www.librisdesign.org/docs/CostEstimatSimp.pdf

74http://www.commonsenselandscaping.com/articles/howtocreateabudget-revisied.htm;

http://www.homewyse.com/services/cost_to_grade_landscaping.html 75 RSMeans: http://www.rsmeans.com/calculator/index.asp?specialUser=FSONL

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2. Chapel The chapel will be renovated into a library. The estimated cost to renovate the interior of the chapel is $2,000,000. 3. Enclosed Pool An enclosed pool will be built in one of the courtyards for a cost of $2,000,000. 4. Gym/Fitness Center RSMeans CostCaluclator was used to calculate the Fitness Center costs. RSMeans provided new construction costs of a 1 story apartment building. The Façade is brick with concrete block back-up with wood arches. The story height is 23.00 L.F. with a total of 5,000 square feet floor area and the cost estimate is for US national average. The total cost comes to $136.38 per sqft, for a total cost of $681,900. This includes, Gym & Athletic Building Closet, Communications, Computer, Customer Service, Equipment Storage, Fitness, Maintenance, Office, Restroom, Shipping/Receiving, Storage, Gym & Athletic Building Activity, Athletic Courts, Athletic Training, Basketball Court, Break Room, Closet, Cold Storage, Dressing/Changing, Locker Room, Shower, Tennis Courts, Weight Room.76 5. Terrace RSMeans Cost Calculator was used to calculate the Café costs. RSMeans provided new construction costs of a 1 story building 12 L.F height. The façade is brick with wood frame. The total square footage is 500 square feet floor area and the cost estimate is for the US National Average using union labor. The total cost comes to $222.85 per sqft, for a total cost of $111,425. 6. Shuttle Bus Diesel buses are the most common type of bus in the United States, and they cost around $75,000 per vehicle. We are planning to purchase 1 bus. The cost to operate this shuttle bus will be paid for by the community-wide HOA. Warranty & Reserves Used 2% of sales. Marketing & Sales Used 1% of sales revenue from start of sales; plus $200,000 initial costs for office & materials. Builder Overhead Used 3% of Home Building Costs until revenues commence, then 3% of Total Sales Revenue. REAL ESTATE TAXES Real Estate Taxes are assumed to be equal to 3.2% of the cost of land plus all improvements remaining in inventory at the end of the prior year. Any inventory sold will be moved out of our tax responsibility and moved onto the buyer. All open space on the property will be maintained and owned by the Homeowner’s Associations but each individual homeowner will only own what is between the walls - ie. the entire community of Bell Tower Heights will be condominiums. As units are sold, HOA dues will increase and will partially cover taxes overall on the property. Hence, the measurement of reexamining inventory is conducted using units rather than acres.

http://www.reedconstructiondata.com/rsmeans/models/gymnasium/

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FINANCING Two loans will be taken out on the property - Land Acquisition Loan and a Construction Loan. The Land Acquisition Loan and construction loan are taken on the same day. However, loan disbursements from the Construction Loan do not begin until units go into production. The Land Acquisition Loan is an IO loan at 10% with a max of 70% LTC. The principal is to be paid back by the construction loan as a unit goes into production. As units go into production the proportion amount of the land acquisition loan is due. The Construction Loan will begin disbursements as soon units go into production. Disbursements will be no more than 80% of the base value of the unit. The first portion of the advance will be used to pay off the Land Acquisition Loan relating to the part of the property that is in production. The Construction Loan will be an IO loan at 9%. The Construction Loan will be paid off as the units close.

Table 14: Cash Flow Summary from Financial Model

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Table 15: After Financing Cash Flows from Financial Model & Profitability Indicators

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X. Acreage Reconciliation/Product Mix The proposed housing product mix for our project can be seen in the table below. Table 16: Product Mix

We plan to build 98 carriage home condominiums on the site and to convert the Seminary building into 211 condominium units. The carriage home condominiums will have a two bedroom and a three bedroom floor plan available, while the Seminary building condominiums will have a one bedroom, two bedroom, and three bedroom floor plan available. The size of the carriage home condominium units range from 1,800 sqft to 2,100 sqft, while the size of the Seminary building condominium units range from 1,000 sqft to 1,500 sqft. The prices for the carriage home condominiums range from $600,000 to $650,000, while the prices for the Seminary building condominiums range from $400,000 to $500,000. In order to determine the required income for specific price points, we determined the PITI (Principle and Interest, Taxes, and Insurance) and projected the required income such that PITI does not exceed 28%. Our findings can be seen in the table below. Assumptions include 80% leverage, a 5% interest rate, a 30 year mortgage, and a 0.5% insurance cost. Real estate taxes for the jurisdiction amount to 31.7237 per $1,000 of assessed value. These real estate taxes include all County, Town, and School taxes that are due. Through independent research, it was determined that assessed values in this area end up being about 50% of the propertyâ&#x20AC;&#x2122;s market value. Based on this analysis, the majority of the carriage home condominiums and condos that we offer on the site should be priced between $400,000 and $650,000 to match the HH incomes of the six PRIZM segments that we are targeting.

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Our carriage home condominiums are targeted towards the Movers & Shakers, Pools & Patios, Brite Lites Liâ&#x20AC;&#x2122;l City, and Country Squire PRIZM segments; while the Seminary building condominiums are targeted towards the Upper Crust and New Empty Nests PRIZM segments. The below chart summarizes the characteristics of the six PRIZM segments that we are targeting with our carriage home condominium and Seminary building condominium products. Table 18: Target PRIZM Segments for Our Development

We have split the project into two separate phases. The first phase consists of building out our carriage home condominium community. The second phase consists of redeveloping the Seminary building, constructing an attached annex building, and constructing an attached parking garage. The graphic below highlights these two phases.

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Figure 32: Phasing Map

Table 19: Acreage Reconciliation

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XI. Appendix 1) Site Plan 2) Redesigned Floor Plan of Seminary Building 3) Vehicle Circulation 4) Pedestrian Circulation 5) Utility Plan 6) Stormwater Plan 7) Open Space Plan 8) Maximum Density Comparison Plan 9) Project Schedule 10) Financial Spreadsheets a. Project Summary Page b. Product Mix/Acreage Reconciliation c. Sensitivity Analysis d. Cash Flow Summary e. Financing Cash Flow Summary f. Financing Quarterly g. Project Assumptions h. Revenue Summary i. Land Development Costs j. Builder Costs k. Real Estate Taxes

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