SONORA GROVE SUNNYVALE, CA REDEVELOPMENT PROJECT 2021 FINAL PROPOSAL BANK OF AMERICA MERRILL LYNCH LOW INCOME HOUSING CHALLENGE
TABLE OF CONTENTS Executive Summary Project Team Bios Welcome to Sonora Grove Market Analysis Seniors & Domestic Violence Survivors Target Populations Entitlements Zoning Hazard Resiliency Site Plan & Design CLT Construction Trauma Informed Design Sustainability A Journey Through Sonora Grove Residential Floor Plans Community Engagement Residential Services & General Programming Finance Development Timeline References Appendices
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EXECUTIVE SUMMARY Market Analysis We are transforming 1171 Sonora Court, a site located in a mixed-use neighborhood in Sunnyvale, California, into Sonora Grove, 11-story affordable housing development aimed at families affected by domestic violence and seniors experiencing homelessness.
Target Populations Our project targets the growing unaffordability of the South Bay and how the COVID-19 has exacerbated the precariousness of houselessness. Without a personal residence, folks experiencing homelessness have difficulty practicing social distancing and accessing sanitation and health resources. We recognized the troubling increase of domestic violence cases throughout the lockdowns. For example, the National Network to End Domestic Violence recorded in late 2019 that domestic violence survivors in California made 1,236 requests for services that could not be met due to a lack of resources, 51% of which were housing-related requests. Simultaneously, the inability for shelters to operate at maximum capacity left many folks experiencing homelessness, particular seniors, in a precarious situation due to underlying health conditions. Since those who are unsheltered may be 3x more likely to contract COVID19, this could greatly harm seniors. Each of these intersecting challenges motivates a flexible, safe, but community-oriented development.
Entitlements & Zoning We are working with MidPen (hereinafter referred to as “The Developer”), a renowned affordable housing partner with 50 years of experience, alongside community partners who cater to our target populations. The Developer is in communication with local organizations to secure acquisition funding support for the parcel located at 1171 Sonora Ct and is also in the final stages of another affordable development in the same zoning district (MXD-1 in the Lawrence Station Area Plan district) as the 1171 parcel. We plan to apply for a permit for unlimited site density, an additional 33 feet height bonus, no parking minimum, and reduced setbacks based on the standards allowed for affordable housing developments within ½ mile of a major transit stop per California’s Density Bonus Law as amended by AB 2345 and AB 1763.
Hazard Resiliency Our site is not at particularly high risk for flooding, fire, or earthquake related damage compared to the surrounding area, although the Bay Area in general experiences moderate earthquakes. The main hazard at our site is increased high heat days which we have taken to account in building and landscape design.
Design & CLT Structure Our development includes a smaller, single tenant building and a larger, family-sized building on a shared parking podium. Both will feature mass timber structural systems and together provide 220 units of housing, and nearly 8,000 sq. ft. of community space both indoors and outdoors. Additionally, the site is located within a 5-minute walk of the Lawrence Caltrain station. We are putting two floors of parking at the base of the residential floors, and are being intentional about creating a welcoming ground-level experience by placing townhomes, case management spaces, and an entryway around the perimeter of the garage.
Sustainability We are pursuing electrification and sustainability goals that earn LEED Platinum certification including all-electric appliances, drought-resistant landscaping, and rooftop PV panels financed by a third party. We will also ensure that each unit has access to natural and high-quality filtered ventilation and that materials like mass timber are sourced sustainably when possible.
Community Engagement and Resident Services We have been in communication with many community organizations located in Sunnyvale and the surrounding area to ensure that our design is informed by the needs of our target populations and that we plan for the spaces necessary to provide community services, case management, and foster a cohesive and engaged living space.
Finance and Development Timeline Our building design and finance plan reflect our project’s three main goals: (1) flexibility, (2) fast and sustainable construction, and (3) communityoriented amenities. From a finance perspective, we intentionally chose an AMI percentage breakdown that would put us well within the qualifications for both the 9 and 4 percent tax credits. From a design perspective, our proposed two building design will help us to accommodate the different spatial needs of our target populations and build community, while providing the opportunity to leverage available financing options that will allow us construct a development that will provide rapid-rehousing and permanent supportive housing ready for lease by July 2023.
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PROJECT TEAM The Stanford Team is composed of 4 graduate students in the School of Civil & Environmental Engineering’s Sustainable Design and Construction Program and 3 undergraduate students from various disciplinary backgrounds.
Jordan Brinn, Design Jordan is pursuing an M.S. in Sustainable Design and Construction at Stanford where she also completed her B.S. in Environmental Systems Engineering. Jordan is passionate about affordable and reliable energy and transit, energy efficiency, and electrification and decarbonization of transit and buildings. After finishing her masters, she will be working in the non-profit sector on electric transit advocacy and policy.
Haleigh Quinn, Design Haleigh is a junior pursuing her B.A. in Public Policy with a concentration in Regional and Urban Policy in the Stanford Public Policy program. Haleigh is passionate about equitable land use, sustainable urban design, environmental justice, and housing equity. After achieving her bachelor’s degree, Haleigh will pursue a Juris Doctor degree in civil rights law.
Javier Castellanos, Finance Javier is pursuing a M.S. in Sustainable Design & Construction at Stanford. Prior to the Engineering School, he worked for three years on the development of Red Compartida, a socially oriented telecommunications project in Mexico aimed at reducing the digital gap in the country. Javier is passionate about developing much-needed infrastructure, including affordable housing developments.
Enzo Alfonsi, Finance Enzo is pursuing a M.S. in Sustainable Design and Construction at Stanford. Prior to coming to the US, he pursued his undergraduate studies in France, where he volunteered in Humanitarian Associations and developed a keen interest in community engagement. After finishing his masters, he will work in real estate or public policy sectors.
Shikha Srinivas, Design
Wes Miller, Finance
Shikha is completing her B.S. in Environmental Systems Engineering and beginning an M.S. in the Sustainable Design and Construction program. Growing up in Bakersfield, CA, a city largely dependent on fossil fuels, she is motivated to help design inclusive, healthy urban environments. Her interests include city-scale innovation, affordable housing, tools for climate resilience, and environmental justice.
Wes is a graduate student in Stanford’s SDC program. Prior to Stanford, he worked for five years in the heavy civil construction industry as a means-and-methods consulting engineer. Past assignments include wharf construction, dam improvements, highway expansions, and deep urban excavations. Wes is passionate about sustainable investment in infrastructure, real estate, and green energy and hopes to pursue these endeavors after graduation.
Simba Xu, Design
Derek Ouyang , Advisor
Simba is a sophomore pursuing a bachelor’s degree at Stanford. He’s interested in bridging architecture and rapidly changing environments and using architecture as a tool to commemorate these changes.
Derek holds a dual B.S. in Civil Engineering & Architectural Design, & an M.S. in Structural Engineering. As Project Manager of Stanford’s first-ever entry to the U.S. DOE’s 2013 Solar Decathlon, he has been featured as an up-andcoming designer in the Los Angeles Times, in Home Energy magazine’s “30 under 30”, & at TEDxStanford.
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AT SONORA GROVE, FAMILIES AND SENIORS EXPERIENCING HOMELESSNESS FEEL A RENEWED SENSE OF SAFETY, BELONGING, AND OPPORTUNITY THROUGH INDEPENDENT LIVING AND SHARED COMMUNITY SERVICES. WE OFFER FAMILY-FRIENDLY, ACCESSIBLE APARTMENTS AS WELL AS AMENITIES TO SUPPORT EDUCATION, LIVELIHOOD, LIFELONG LEARNING, AND JOY WITH FELLOW RESIDENTS.
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MARKET ANALYSIS LOCATION Sunnyvale is a city in Santa Clara County which is part of the Silicon Valley area. Its neighboring cities are Cupertino to the south, Mountain View to the northwest, Los Altos to the Southwest, and Santa Clara to the east. Sunnyvale lies along the historic El Camino Real and Highway 101. Our site is located on the border between Sunnyvale and Santa Clara.
DEMOGRAPHIC Sunnyvale has a population of 152,703 with a median age of 35yrs and a median household income of $140,631 based on U.S. census estimates from 2019. 5.67% of the population in Sunnyvale is considered to be below the poverty line, which is on par with the county level percentage of 6.1%. Table 1 compares Sunnyvale with Santa Clara County and the State of California.
Table 1: Demographics and Economics. Census Bureau 2019 ACS 1 yr estimate, Quick Facts
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PANDEMIC ILLUMINATES REALITIES OF BAY AREA SENIOR HOMELESSNESS
In Silicon Valley, one needn't go far to encounter streets lined with RV's and rundown tents tucked in tidy drainage culverts that separate the highway from the million-dollar residential neighborhoods. Indeed, while the tech hub flourishes on the surface, a hidden community of those displaced by the tech boom suffers in silence. Within those hidden communities, we uncover people like Teresa Villasana and her daughter, Aida Barron, who have found themselves homeless after being priced out of their neighborhood. Now, Teresa and Aida live in a cramped 1979 Dodge RV outside of the Walmart on Gilroy. Teresa is 84 years old; her daughter is 58. Teresa and Aida are a part of a much larger population of aging Americans experiencing homelessness for the first time due to the detriments of gentrification and displacement. Often unable to find work due to age-related disabilities, this population is trapped in a cycle of housing-insecurity that plagues their oldage. However, stories like Teresa and Aida’s are often forgotten in the Bay Area's housing crisis narrative, compounding the issue year after year.
There are women who are continuing to stay with their abuser because they’ve got nowhere else to go. And it feels like the calls we’re getting are more intense now than ever before. - The Mercury News
The Mercury News
DOMESTIC VIOLENCE SURVIVORS FORGOTTEN IN BAY AREA HOUSING CRISIS In the New York Times “In Her Words” newsletter on March 27, 2021, Angela Ceseña who works at Latina SafeHouse, a shelter for victims of domestic violence, revealed the immense physical and emotional resources needed during the pandemic (2). For the first time in its history, Latina SafeHouse had to create a waitlist as there was a greater need for rapid rehousing and affordable places to live for those experiencing or on the brink of homelessness. The necessity and gravity of her work keeps her motivated.
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TARGET POPULATIONS To adequately evaluate Sunnyvale’s socioeconomic landscape and housing needs, we began an in-depth analysis of the housing-insecure populations in the area. Through this research, we identified two primary populations whose homelessness rates have grown substantially in recent years: domestic violence survivors and low-income seniors.
DOMESTIC VIOLENCE VICTIMS According to the CDC, intimate partner violence (IPV) is described as “physical, emotional, psychological, or economic abuse and stalking or sexual harm by a current or former partner or spouse.” About 1 in 5 women and 1 in 7 men report having experienced severe IPV in their lifetime, making IPV a significant public health risk in the United States (3). Along with the physical and emotional consequences of sustained IPV or domestic violence are the economic repercussions that often propel many IPV survivors into homelessness. The 2019 North Santa Clara County Homelessness Census & Survey found that 10% of homeless respondents reported that they were currently experiencing IPV or domestic violence. When respondents were asked if they had ever experienced domestic violence in the past, 35% indicated that they had, a striking increase from the 22% reported just two years prior (4). During the COVID-19 pandemic, this percentage has likely increased due to shelter in place mandates that limited access to place-based support services and increased isolation in unsafe domestic situations. Shelters that serve domestic violence survivors also have been forced to reduce capacity to adhere to public health guidance, even amidst the rise of IPV reporting. This increase in reporting is in spite of normal safe spaces and common reporting centers being close, indicating a problem with even graver implications. Many victims are being forced to stay with abusive partners or become homeless, along with their kids. The Bay Area is also experiencing a large deficit of care-oriented services for victims and families affected by domestic violence. We engaged with community leaders to further understand the existing gaps in housing resources for domestic violence survivors. One Bay Area non-profit, Community Overcoming Relationship Abuse (CORA), reports that requests for shelter are up 12%, but the organization is spending 250% more on housing services. In a conversation with CORA’s housing program directors, Lynn Schuette and Dr. Aleese Moore-Orbih, we learned of the numerous hurdles that the organization must overcome to house domestic abuse survivors. In addition to the challenges posed by the pandemic, the program directors expressed that they struggle in finding affordable housing complexes in the Bay Area that can fulfill their rapid rehousing requests and keep the identities of survivors secure. As a result, the directors often house their clients with independent landlords that can provide housing quickly and remove specific documentation barriers to protect the survivors’ identities. However, establishing relationships with these landlords is an arduous process that does not supply nearly as much housing as is needed by clients. Other Bay Area organizations have begun renting motel rooms to meet the increased requests for housing, though dwindling funding streams have largely undermined their efforts.
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TARGET POPULATIONS HOMELESS SENIORS Through our continued community outreach and research efforts, we noted that homeless and low-income seniors were another critical population in immediate need of affordable housing. In early outreach meetings with organizations like Home for All San Mateo and MidPen, it was clear that senior affordable housing was at the forefront of the Bay Area’s housing priorities. In Sunnyvale, specifically, age-friendly housing considerations are among the top research and development goals in the city as of late 2020 (5). This interest in affordable housing solutions for the aging population is driven by the substantial percentage of homeless seniors in the Bay Area. In North Santa Clara County alone, 12% of the homeless population is 61 years old or older, and 35% are between the ages of 51-60 (6). These numbers are alarming and have only grown during the pandemic. To further investigate the degree to which the housing crisis has impacted senior citizens in Santa Clara County, we performed a burden analysis that evaluated the percentage of income that households with seniors are spending on rent by household size. Through this investigation we found that 35 - 64% of households with just one senior citizen present spend 30% or more of their income on rent. Sunnyvale is no exception to this county level average, with 32% of single-senior citizen households spending upwards of 30% of their income on rent compared to 28% of households without seniors. This data, in conjunction with the high rates of homelessness among people 61 years and older in North Santa Clara County, indicates that senior citizens are decidedly in need of affordable, age-friendly housing that will keep them from sliding into homelessness. The pandemic has illuminated the perilous state of Northern California’s social safety nets. Similar to the problems faced by domestic violence victims, the pandemic has only exasperated existing housing challenges as homeless seniors face limited capacity shelters and diminished access to adequate medical care. Given that those who are unsheltered are three times as likely to be infected by COVID-19 than those who are housed, and given the elderly are much more prone to COVID-19 related fatalities, it is imperative that we begin cultivating housing solutions for this vulnerable population in the event of another national or global public health crisis.
Through our research and community engagement, it became readily apparent that both domestic violence survivors and homeless or extremely low-income seniors were in dire need of an expanded pool of affordable housing in the Bay Area. Therefore, in collaboration with our community partners, Destination: Home and CORA, we set out to develop innovative design solutions that meet the unique needs of both populations while simultaneously facilitating an interconnected, intergenerational housing environment. In blending these two populations at Sonora Grove we envision fostering a family-oriented atmosphere wherein residents feel supported, safe, and comfortable in community with one another.
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ENTITLEMENTS CURRENT USE The site is currently for sale and contains a 19,512 sqft. one-story building built in 1976 and is occupied by Tech-Star, an electronics repair company.
PARCEL & ACQUISITION PLAN The Developer is in communication with local organizations to secure acquisition funding support for the parcel located at 1171 Sonora Ct. The City of Sunnyvale is on board with the Developer’s plans to acquire the site for affordable housing development, and purchase contract drafting is currently underway.
NEIGHBORHOOD AMENITIES The project site is located off the Lawrence Expressway on Sonora Court, a small street with businesses and low-density buildings. The site highlights include the Lawrence Caltrain Station, a major transit connection (3-minute walk away) and a Costco Wholesale and Gas across the street (6-minute walk away). Ponderosa Park (greenspace), grocery/convenience stores, fast food/restaurants (food), and an urgent care center (healthcare) are accessible within a 15-25minute walk. Near Ponderosa Park are daycares Legend: Red: Site / Green: Residential / Blue: Major Transit / Orange: Healthcare (Private) / Yellow: Food/Commodities (Costco)
and preschools.
Other stores located within a 10-minute drive include Walgreens, Safeway, Grocery Outlet, Dollar Tree, and FedEx. There are at least 5 other parks within an 8 minute drive, and another large healthcare center (Kaiser Permnante) 10 minutes down the Expressway. There are two elementary, one middle, and two high schools within 3 miles. While the Expressway itself is not suitable for biking, Sonora Court has a paved bike lane connecting it to Kifer Road, which links to Class II Bikeways (on-street bike lane). The Class II bike paths connect to Sunnyvale’s downtown, and along with Class III Bikeways, connect to many of the aforementioned parks, schools, and stores.
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ZONING CURRENT ZONING Our parcel is located in the area of Santa Clara County’s Lawrence Station Area Plan (LSAP) district and is within a 5 minute walk of the Lawrence Caltrain Station. Because our parcel is part of the transit core area, it is zoned as Flexible Mixed-Use I (MXD-I) District which means that it has the highest minimum densities of any of the zoning districts within LSAP and is the highest priority for mixed-use development including residential, office/research and development (R&D), and retail uses. Table 3 below provides a summary of the standards to be followed according to the zoning policy. Parking restrictions for the particular zoning area are shown in Table 4, but we will be adhering to a higher ratio of ~.75 per unit so as to not make parking a burden for tenants, especially those with children. Based on these restrictions, the buildable area on our site is approximately 37,950 square feet and can include up to 88 dwelling units (based on parcel size = 1.3 acres).
DENSITY BONUS LAW We will be applying for a permit for unlimited site density and an additional 33 feet height bonus based on the standards allowed for affordable housing developments within ½ mile of a major transit stop per California’s Density Bonus Law as expanded by both AB 2345 and AB 1763 (7). Through this code and related expansions, we would have no unit limit, no parking minimum, and reduced setback requirements all of which we have taken into account during the design process. There is also a landscape and open space requirement that mandates at least 20% of the parcel be dedicated towards the total landscaped area which includes a 50 square feet of usable open space (balconies count) per unit requirement.
Table 2: Site Development Standards
Table 3: Parking Restrictions & Allocations
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HAZARD RESILIENCY
Sunnyvale East & West Channels
FLOODING Our parcel is part of Flooding Zone X meaning that it is part of an area of 500-year flood as well as an area of 100-year flood with average depths of less than one foot and is considered by FEMA to be a reduced flood risk area due to the presence of a levee (8); thus flooding does not pose a significantly high risk to our site. However, it is adjacent to the El Camino storm drain which follows a section of land considered within the FEMA Flood Hazard Category Zone AO (regulatory flooding). Having the apartments on top of a two-story parking podium will protect residences from immediate flooding risk, and we plan to use low-impact development at the courtyard and base.
EARTHQUAKE Like much of the Bay Area, our site is located close to fault zones. Our site is adjacent to a moderate risk landslide and liquefaction zone, which is a cause for concern in larger buildings and mid-rise developments. Our site will undergo mitigation as defined in Public Resources Code Section 2693(c). It is also estimated that there is strong-severe shaking as a result of an earthquake due to the presence of multiple fault lines in the Bay Area (9).
CLIMATE & HEAT Urban areas are expected to rise in temperature more than greenfields due to the urban heat island effect, which affects the houseless community in terms of physical health and heat exposure to an even larger extent. CalAdapt (10), which is hosted by the Geospatial Innovation Facility, estimates the number of days in which maximum temperature for a certain census tract or city hits a certain threshold. In the tract our site is located in, days with a maximum temperature above 90° are predicted to continue to increase. Given the extreme heat potential, we benefit from the tall trees on site that provide shade to lower levels, and we plan to add more trees, drought-resistant landscaping, and rooftop gardens to help provide more shade and natural cooling to the building.
FIRE Despite dealing with impacts of increasing heat and worsened air quality due to wildfires, Sunnyvale has a lower risk and is not located in a danger zone (11) or moderate fire hazard severity zones (12) in regards to wildfire risk.
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SITE PLAN & DESIGN
TWO BUILDING DESIGN To effectively cater to these two communities, we have designed two separately financed buildings which includes 9 floors of housing united by a central courtyard. The larger, 168,525 sq. ft. L-shaped building towards the east and north end of the site will cater to families and domestic abuse survivors. This building will feature mainly 2-3 bedroom apartments and family-oriented programming at the base of the building, though all community spaces will be shared across the complex. The L-shaped building is paralleled by a smaller, rectangular building of 63,494 sq. ft. composed of studios and one-bedroom apartments to serve formerly homeless seniors. The two building design helps establish specialized security measures and case management services to match each population’s unique needs, while the central courtyard facilitates community building between populations. page 13
CROSS-LAMINATED TIMBER CONSTRUCTION Building Code Mass timber structural systems, which include components like Cross-Laminated Timber (CLT) structural floor and wall panels as well as Glued Laminated Timber (Glulam or GLT) columns and beams, is becoming an increasingly popular structural system option for tall buildings. Mass timber can improve the overall sustainability of a project because the prefabricated components allow for fast and easy install which reduces on site waste, and if the wood is sustainably sourced, the structural system has much less environmental impact and embodied carbon than alternative materials such as concrete or steel. Additionally, mass timber production can help with wildland fire prevention because small diameter trees can be used in production which makes forest thinning, a key component of fire prevention in California, more economically viable and less wasteful. In August 2020, the California Building Standards Commission passed tall wood code change proposals through an early adoption of the International Building Code (IBC) 2021 (13). These changes, which were codified in January 2021 and will go into effect in July 2021, will allow: Type IV-A - Wood buildings up to 18 stories Type IV-B - Wood buildings up to 12 stories Type IV-C wood buildings up to 9 stories (our project) Benefits The adoption of this code signals a shift in tall building practices and will increase market demand so mass timber will become cheaper and more readily available. Furthermore, CLT floor panels can span long distances (up to ~30ft) without additional support from joists, and MEP equipment can be placed directly underneath the CLT panels and covered with a gypsum board. Therefore, the taller a building is, the more mass timber systems continue to save material (and dollars) because less columns and beams are needed compared to other structural materials, and more stories can be built within the same height limit since plenum space can be nearly eliminated, especially if paired with ductless HVAC options like Variable Refrigerant Flow (VRF). Furthermore, the wood material of exposed joists and unfinished floor panels naturally reflects natural lighting to reduce the need for mechanical lighting and gives spaces a warm and homey feeling that materials like concrete and steel cannot achieve without finishing layers. Katerra Katerra is a full-breadth mass timber partner that we intend to work with. They have a CLT factory in Spokane, Washington and an office in Menlo Park less than 30 minutes away from Sunnyvale. Their products are FSC, PEFC, and SFI certified which aligns with the sustainability and impact goals for our project.
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TID POP-OUT PAGE DESIGN TRAUMA-INFORMED AT SONORA GROVE Trauma-informed design (TID) refers to using design principles physically and/or graphically to integrate care, compassion, and healing into a space to support folks who have experienced traumas in their life. It connects architecture and physical surroundings to inner emotions and physiological responses while centering survivors to give them dignity and hope. It keeps in mind all possible interactions and experiences people may have in a space. Given that we are working with populations who have experienced homelessness and abuse, we have implemented the central tenets of TID to create an affirming and safe residential environment at Sonora Grove. Domestic violence victims deserve spaces where they and their families can rest, heal, and find community, as do seniors who have experienced loneliness and instability. When it comes to housing, many folks experiencing homelessness often face stigmas around their journeys to stability and happiness. Affordable housing is often laden with restrictions or limited services that, while well-meaning, can make survivors feel unwelcome; these include not allowing pets or harsh rules around children’s behavior. Lengthy screening processes can leave folks feeling othered and unwelcome, as does forcing victims of DV to rehash the experiences they’ve faced. It is important to consider how from screening to complex design to daily life, we empower our community members to care for another and feel cared for; affordable housing provides a key stepping stone in achieving other forms of mental and physical wellbeing.
Trauma-informed Design Framework ‘Designing for Healing, Dignity and Joy (2020). Shopworks Architecture Group, 14 Engineering, & University of Denver Center for Housing and Homelessness Research’
We hope our physical designations of a family-focused building and senior-focused building promote intra-group community building, while the third floor provides a gathering space across these two groups. Some key design elements we plan to implement to uphold our tenants’ agency during their time at Sonora Grove are as follows: Placing case management offices on the ground floor instead of the third floor. This design choice imbues residents with a sense of independence by offering a degree of separation between case officers and social gathering spaces.. Creating spaces that support community and healing, such as a gym center with programming space for classes and outdoor community gardens. Equipping every home with safety features, like emergency call buttons. Installing extra exits in the lobby and case management offices in case a tenant, residential staff member, or group of tenants feel unsafe in the space. Including childcare and homework spaces so children and families have quiet and stable environments to learn and connect with other kids. Designing dog washing stations and specialized dog runs to make our complex pet friendly, as pets provide great comfort to tenants who have been through traumatic experiences. As we staff our lobby spaces, we will also consider the ideal demographic composition of staff members to ensure there is an equal and nurturing dynamic instead of an authoritative one as tenants enter the lobby. We hope to offer creative security solutions, like alert lists, to facilitate transparency without surveillance. We are also coordinating with The Developer to create a streamlined documentation process that minimizes emotional labor or trauma on our residents. We also want to get tenant input in how we staff our spaces, conduct operations, and plan community events. Overall, we care deeply about building trust, opportunity, and community at Sonora Grove, which drives our emphasis on the programming and experiential components of the complex.
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SUSTAINABILITY The effects of climate change in conjunction with a pandemic and other natural disasters make sustainable, healthy living a key priority for our tenants. Elderly folks deserve healthy places to live, especially given potential comorbidities and anxieties that climate change may induce. In addition, well-lit and well-ventilated buildings with outdoor recreation space can bring positive mental health effects to any folks healing from traumatic experiences. Creating affordable, community-oriented opportunities for sustainability now and in the future is a pillar of this project.
BUILDING DESIGN & ORIENTATION: VENTILATION, CLT, & NATURAL LIGHT
Healthy air quality is a critical concern for our units and spaces. As such, all units will have MERV filters and large, operable windows to improve ventilation. Every community-oriented space on the 3rd floor and building base will have retractable doors in order to improve ventilation and bring in natural light, making them usable even during COVID-19 and any future related event. The building structure itself will be made up of Forest Stewardship Council (FSC) cross-laminated timber (CLT), which can lower carbon emissions 15-30% (16) while reducing construction cost, labor, and waste. Both buildings have their inner side facing south, filling many units and community space with natural light. The courtyard will provide open recreation space as well as open up the south facing side to look into the trees and support biophyllic design objectives.
SUSTAINABLE OPERATIONS: ENERGY-EFFICIENT APPLIANCES & SOLAR PV SYSTEM
Similar to a past Developer project, this will be an all-electric building in preparation for net-zero emissions building codes. All units will be equipped with WaterSense water faucets and ENERGY STAR appliances. We will offer recycling compartments & cans to every household in line with Santa Clara’s waste development. Given the building height and orientation, a PV system on the roof can offset building electricity consumption for net costs savings and emissions reduction. Decarbonizing our building is another priority for long-term climate health and sustainability. Since our site has good solar energy potential, we are dedicating both rooftops to 70% coverage with solar photovoltaic panels. Our estimates show that between the two buildings, we can generate an approximate total of 605,000 kWh of clean energy per year over the two buildings. We plan to finance through a third party, such as Landmark Infrastructure Partners (which can buy our rooftop and lease the solar power) or a community solar organization, which we are currently exploring.
GREEN AMENITIES: TREES, LOW-IRRIGATION COURTYARD, AND COMMUNITY GARDEN
We want to create a sense of privacy and protection for our tenants, many of whom have not received that in past housing or lack of. We plan to keep the perimeter of tall trees of the existing site. The base will also feature tall, drought resistant landscaping as well as native plants or grasses to create a positive grade experience without causing increased water usage. This is especially critical around the townhouses to make sure residents feel secure at the ground level. Solarpowered uplighting at the base of the building will also create a welcoming atmosphere without contributing to energy consumption. The center of the building is courtyard/recreation space made of lighter, reflective concrete. It will feature native grass and drought resistant landscaping to minimize outdoor water use once again. The courtyard will also include a community garden on the south-facing side. This greenspace can help reduce stormwater runoff and reduce heating/cooling loads. It can also provide outdoor activities and healthy foods, critical to creating a holistic and sustainable occupant experience. As aforementioned, these drought-friendly greenspaces help cool the complex and mitigate the impacts of the urban heat island effect and projected heat increases in Santa Clara County.
LEED PLATINUM STATUS The Leadership in Energy and Environmental Design accreditation is one of the most widely accepted green building standards, with Platinum status as the most ambitious certification. Our location close to public transportation as well as aforementioned design, construction, and operations decisions such as using efficient appliances, reducing outdoor water consumption, providing high quality ventilation, and engaging with community innovations such as the rooftop garden will reasonably allow us to achieve LEED Platinum and ensure healthy, low-impact buildings for our tenants.
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A JOURNEY THROUGH SONORA GROVE FLOOR BY FLOOR RESIDENTIAL EXPERIENCE
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GROUND FLOOR EXPERIENCE PARKING GARAGE ENTRANCE We intend to have two floors of above ground parking. The reason for this is two-fold. First, through our conversations with The Developer and attending community meetings for other developments in the South Bay Area, we have learned that parking availability is a concern both for families moving into the complex who have to manage the transportation needs of children of different ages and independence levels and for the surrounding communities who do not want to experience the negative impacts of the influx of so many new residents. A mother who is trying to carry her one year old, hold three bags of groceries, and monitor an eight year old does not need to be searching for street parking and walking across many intersections before arriving home. Second, the garage will allow us to have additional space to provide car-share services to our residents rather than having to clutter the perimeter of the site with a heatabsorbing parking lot. However, we are aware that we need to be intentional about creating an active streetscape and welcoming entrance to set the tone of a vibrant community. There are many tall redwood trees already present around the parcel’s perimeter which will provide privacy and greenery.
First Floor Garage
Second Floor Garage
A wide, well-lit parking garage entrance will invite tenants in on the west side of the building. Inside the parking garage, residents will have access to storage and elevator access to their units. There are three elevator cores and adjoining staircases: two at the front base of the building on the right side (southeast corner) and left side (southwest corner) available through the lobby entrances, and one available from inside the parking garage at the back left (northwest) corner of the building. This rear elevator will be available to seniors should the elevator connected to their building ever have any technical issues.
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STREET-LEVEL EXPERIENCE OUTDOOR ACTIVATION To activate the street-level experience, we will feature a covered, colorful bike parking area with bike-share services near the west Sonora Court entrance, as well as tricycles for families with kids to borrow. Since many seniors experiencing homelessness and DV survivors have pets, we are including a small dog run and dog washing station at the base of the building to make taking care of pets easy, especially when entering the building. The south side of the property will have townhouses reserved for larger low-income families without a history of domestic abuse. In placing townhouses on the ground floor of the building, we can cultivate a neighborhood feeling at the street level while still preserving the safety of our more vulnerable populations on higher floors. Each townhouse will be equipped with a lush garden for both the residents and the passer-by to enjoy. Around the perimeter of the building, we plan to use drought-resistant landscaping, shrubbery, benches, and uplighting to create a park-like ambiance amid an otherwise quiet street. To further cultivate a community feel on the first floor, we plan to include a fountain feature and clear pathways all around the building to make entering these spaces easily accessible.
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LOBBY ENTRANCE INDOOR FIRST FLOOR EXPERIENCE Upon entering the building, residents will be met with two welcoming lobbies on either side of the building: one for entrance into the family building, and the other for entrance into the senior building. Each lobby space will be 3,300 sq. ft. (for a total of 6,600 indoor sq. ft. of lobby space across the first floor), so we will fill the remaining space with offices for case management and property management. Since each population will have unique case management and security needs, we have designated separate lobby spaces so that the building manager can better cater to those needs. Both lobbies will be designed with community in mind, featuring colorful murals from local artists, warm lighting, and comfortable seating areas for an added social space. Given our focus on domestic violence victims, security is of the utmost importance in designing the lobby entrance. As such, we plan to have two focused entry points in each lobby that will allow the building manager to monitor who is entering and exiting the building at all times. The building manager will also be equipped with an alert list to ensure that none of the residents’ previous abusers enter the building. Seniors in permanent supportive housing are usually required to have check-in rules for guests as well, so these standards can apply across buildings to ensure everyone feels protected by the security systems in place. Key cards will be used to enter all community spaces, including the courtyard. Additionally, cameras will be placed throughout the building, and side doors will be used only for egress. The front desk can oversee the outdoor bike racks to ensure bike property is safe. In the event that a resident poses a significant threat to their case manager, all case management offices will have two points of entry and exit to allow for a swift escape if needed. These precautions will also help seniors experiencing homelessness, some of whom may also be healing from traumas related to their experiences, feel secure. Last, while we want tenants to have easy access to case management services, we also want to foster a sense of independence among our resident population by allowing for a reasonable distance between their units and the case management offices. Therefore, we have allowed for a floor separation between case management and residential units that will allow residents to freely navigate their new community without feeling surveilled by case management services.
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THIRD FLOOR: COMMUNITY HUB & COURTYARD The third floor provides a space to connect the residents of floors 4-11 with community engagement resources. The outer rim of each building will feature apartments, while the inner core will feature 7,893 sq. ft. of community spaces that overlook the shared courtyard. The courtyard faces the large redwood trees that line the southern perimeter of the site, giving residents the feeling of being enveloped in a Redwood forest as they recreate. We approximate seven indoor community spaces: two at the base of the smaller, senior building and five at the base of the larger, family building.
3RD FLOOR COMMUNITY SPACES AT A GLANCE FAMILY BUILDING
Homework | 700 sq. ft. Childcare | 900 sq. ft. Tech Lab/Office/Library | 1000 sq. ft. Gym & Class Space | 1500 sq. ft. Conference Space | 1241 sq. ft.
SENIOR BUILDING
Community Kitchen & Pantry | 1300 sq. ft. North-End Room | 300 sq. ft. Lounge Space | 1052 sq. ft. COURTYARD
14,000 sq. ft.
SENIOR BUILDING COMMUNITY SPACE The senior building includes about 2,350 sq. ft. of programming space. Given that many seniors may be living alone and want company while cooking and eating, we plan to have an industrial community kitchen and eating space in the northwestern corner of the senior building. The community kitchen will offer a space for engaging community programming like cooking classes and will also be a central resource for local nonprofits who will be allowed to rent out the space to cater large events for their clients. The community kitchen will be stocked with produce from the community garden (see Courtyard and Community Garden) and donations from local food bank partnerships. Seniors and families will have access to these food resources to supplement their groceries. The eating space will feature retractable pocket doors to create an indoor, outdoor eating area. The senior building will also include a lounge space adjacent to the community kitchen. The lounge space will be equipped with crafting materials, televisions, books, and magazines to provide plentiful entertainment opportunities. Dattner Architects, Via Verde, Bronx, NY
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3RD FLOOR COURTYARD COMMUNITY SPACE FAMILY BUILDING COMMUNITY SPACE
Including the space between the two buildings, the family building includes close to 5,500 sq. ft. of programming space, including the area between the buildings. In order to provide work and online literacy skills, we will place a Technology Center (computer lab that offers other programming) at the northern base of the family-centric building. The Technology Center will be adjacent to a homework room and library (with its own set of computers) for the children of the complex, which will give students who have faced immense emotional obstacles access to a secure, stable place to focus on schoolwork. Like the eating space in the senior room, the homework space and library will be equipped with retractable pocket doors to facilitate an indoor/outdoor study environment for the students in the complex. These two spaces will be adjacent to allow families and single parents to watch their students while using the computer and digital services. Next to the homework space, we will place a small child care center for parents to utilize when attending case management meetings or job interviews. We intend to feature a general multipurpose room in the southernmost corner of the L-shaped building to host residential meetings, moderate-sized gatherings, and bring in speakers or case managers to offer services en masse. Lastly, we plan to include a small fitness and recreation center next to the multipurpose room with gentle equipment for seniors and families to engage in physical activity without leaving the complex.
COURTYARD Given the 14,000 sq. ft. courtyard, we want to create outdoor spaces that provide socialization opportunities across our target populations. We will place a playground outside of the child care center for the younger children in the complex. The rest of the courtyard will feature benches and seating to gather in small groups in a grassy area, as well as a water feature. We plan to use rounded sections & canopies to create pockets within the space but adhere to trauma-informed design, which recommends avoiding sharp corners where possible. While we plan to line the courtyard with drought-resistant landscaping, we also plan to create wide pathways and accessible, adjustable seating so seniors can also enjoy the outdoor space. We hope to decorate the space with a mural designed by residents of the complex to bolster a family-oriented, community-focused atmosphere. We will also include planters on the roofs of the townhouses to create a community garden bordering the third-floor courtyard space. Community gardens are an essential part of the trauma-informed design; they provide highly visible gathering spaces for folks to be in community with one another. Since survivors can have difficulties making connections with strangers, our community partners have expressed that spaces like community gardens allow them to avoid self-isolation and begin building community. We hope that including this space in the courtyard can provide a source of fresh produce, facilitate learning opportunities, and create a fun environment to cultivate community between residents. Even more, the sustainability benefits of reducing impervious courtyard material and increasing insulation for the garage below are invaluable.
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RESIDENTIAL FLOOR PLANS FLOORS 4-11
FOURTH - ELEVENTH FLOORS, ROOFTOP The bulk of our residences are within these floors. Each floor above the third floor hosts 25 units: 6 studio, 5 one-bedroom, 9 two-bedroom, and 5 threebedrooms apartments. We plan to use curved furniture to improve flow and reduce harsh corners; we also plan to equip emergency alarms in each room should any survivor experience a difficult or traumatic situation. Laundry, trash receptacles, and mechanical rooms will be in the northeast inner corner of the L-shaped family building and the north-facing end of the bar-shaped senior building at every floor. Once again, rooftop space on both buildings will be dedicated to solar panels in order to provide clean, renewable energy to the residents.
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COMMUNITY ENGAGEMENT In an effort to design Sonora Grove with the values and interests of the community in mind, we have engaged with the following organizations and stakeholders. Through the virtual environment, we also have attended public events and webinars to learn from affordable housing leaders, such as Enterprise Community Partners. These individuals and their organizations have been invaluable in helping us craft a project that caters to the unique needs of our populations, while remaining grounded in Sunnyvale’s development interests. Ray Bramson, Destination: Home | Chief Operating Officer Dr. Aleese Moore-Orbih, CORA | Director of Programs Lynn Schuette, CORA | Assistant Director of Programs Dan Rich, Local Government Advisor | Former City Manager of the City of Mountain View Jenny Carloni, City of Sunnyvale | Housing Officer Maritza Maldonado, Amigos de Guadalupe | Executive Director Angela Ceseña, Latina SafeHouse | Executive Director Kristy Wang, SPUR | Former Community Planning Policy Director
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RESIDENTIAL SERVICES At Sonora Grove, we are dedicated to providing adequate, trauma-informed services that will allow residents to flourish physically, mentally, and emotionally in their new community. To that end, we intend to deliver three primary on-site services that will ease residents' transition from their previous living arrangements: Behavioral Health Care, Case Management, and Life Skills Training. Given the traumatic environments that many of our residents may be transitioning out of, we intend to provide family and individual-centered mental health services and substance abuse counseling in-residence. Through the provision of these services, we hope to arm residents with effective coping strategies that will allow them to feel a sense of support and safety in their new home. Another vital element in helping residents feel adequately supported in-residence is case management. Case managers will be available to help residents navigate issues ranging from finding appropriate public assistance programs to accompanying residents to doctors' appointments. Through this continual support, residents will build a trusting relationship with their case manager, alleviating some of the symptoms of isolation and mistrust that our target populations often experience. We intend to provide a host of life skills training programs in-residence that will cater to our target populations' specific needs. For example, senior residents who may be suffering from age-related disabilities will be able to access training to enhance activities of daily living (ADL) like bathing, eating, and walking on their own/with minimal assistance. For families, we will provide: Employment training programs Financial literacy courses centered on economic justice English as a Second Language classes Above all, our greatest intention is to center the principles of trauma-informed care in all residential programming. We are keenly aware that large subsets of our chosen populations have been violently victimized in their lifetimes. Therefore, we want to remain intentional in soliciting the help of experienced local organizations, like CORA, Amigos de Guadalupe, and the Sunnyvale Community Center, who can provide services to residents without retraumatizing them. To this end, we also hope to stimulate a reciprocal relationship with these organizations that will empower them to continue to expand their services in the Sunnyvale community.
GENERAL PROGRAMMING In addition to the critical case management services, we hope to create a mix of programming hosted at the base of the building and in the courtyard to help neighbors get to know each other and feel more comfortable in the residence, especially post pandemic. We envision the base outside the parking garage in the lobby spaces opening up to create an indoor-outdoor programming space with outside vendors as shown in the inspiration picture below. These activities could include health clinics, farmer’s markets, and even small carnivals and petting zoos that are geared at the younger families. At the courtyard level, we can create more weekly-monthly resident-led programming, from game nights and book clubs to cooking and art classes. We can also create opportunities to bridge our two communities, creating senior-family babysitting circles with case manager approval and on-site oversight. Seniors who may no longer have a source of family or chosen family can benefit from the familial connections & sense of intergenerational bonding present in our complex.
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FINANCE To increase our competitiveness for the government tax credits, we are proposing a two-building layout that requires two separate financial strategies that are economically sustainable on their own. Both are working towards the same goal: to provide housing solutions for our identified target populations. In both buildings, the main sources of income are rent from the units and rent subsidies through the life of the building. O UR PR O PO SAL FAMILY BUILDING One bar-shaped building (applying for a 9% tax credit) that will contain 99 units with all of the units (not counting two units for managers) at or below the 50% AMI threshold. This building was designed with the goal of targeting senior citizens who could also be in risk of experiencing homelessness.
SENIOR BUILDING A L-shaped building that contains 121 units with 96 units of the units being designated for below the 50% AMI threshold. We believe that this building will be competitive for the 4% tax credits and will attend families, particularly those who have suffered domestic violence.
1171 Sonora Court employs a variety of project finance strategies to meet the needs of the affordable housing initiative. The development team is utilizing both 4% and 9% tax credits, commercial loans provided by Bank of America, government programs, and the Community Housing Fund (CHF) loan for land acquisition. This loan is intended only as a bridge loan and will be repaid prior to construction loan closing by the City of Sunnyvale, who plans to acquire the land. CHF is essential in the overall plan for the development of the project in that it is being used to acquire and hold the site until construction loan closing.
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FAMILY BUILDING PLAN 4% TAX CREDITS
The family building with a total of 121 units will have the following breakdown of type of units and median income target:
The total construction cost of the building is $79,462,907 USD or $471.52 USD/sq ft or $656,718 USD/unit and will be constructed from the following sources: Construction loan for the amount of $44,623,590 USD. The loan will have a 30-Day LIBOR + 2.35% floating interest rate. The construction loan term will be 30 months from loan closing date. The loan amount computes a LTV value of 50% and a LTC of 56%. ILP Equity contributions from the 4% Tax Credits for the amount of $6,163,173 USD. We are expected to receive this amount in three stages. $3,081,587 USD at the beginning of construction $1,540,793 USD at 50% of construction and, $1,540,793 USD at 75% of construction and The corresponding cost of land ($10,350,000 USD) funded by the City of Sunnyvale. The rest of the $18,326,143 USD will be obtained from a combination of gap government programs like the Infill Infrastructure Grant Program (IIG), the Transit-Oriented Development (TOD) Housing Program and the Community Development Block Program (CDBG), and the deferral of the developer fee. The building will be competitive for the 4% tax credits as it will qualify as a large family project, based on the number of 2 and 3 bedroom units, with 37% of the living spaces destined for 30% AMI. During the operations phase, we expect the total expenses & reserves per unit to be $9,156 USD, given the type of services that will be provided within the facility. The main source of revenue will be the rents and rent subsidies. Out of the 121 units, 30 (approximately 25%) are considered to be able to benefit from the Section 8 rental subsidies. From these numbers, we will obtain two permanent loans to support operations: Tranche A: $11,592,199 loan with a 3.91% interest rate with a 40 year amortization. This loan will be supported by the rent income. Tranche B: $12,448,841 loan with a 3.91% interest rate with a 30 year amortization. This loan will be supported by the rent subsidies income. It is important to mention that the DSCR will always be higher than 1.15, for the whole life of the building.
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SENIOR BUILDING PLAN 9% TAX CREDITS
The senior building with a total of 99 units will have the following breakdown of type of units and median income target:
The total construction cost of the building is $38,777,285 USD or $610.72 USD/sq ft or $391,690 USD/unit and will be constructed from the following sources: Construction loan for the amount of $22,118,746 USD. The loan will have a 30-Day LIBOR + 2.35% floating interest rate. The construction loan term will be 30 months from loan closing date. The loan amount computes a LTV value of 45% and a LTC of 57%. ILP Equity contributions from the 9% Tax Credits for the amount of $4,611,044 USD. We are expected to receive this amount in three stages. $2,305,522 USD at the beginning of construction $1,152,761 USD at 50% of construction and, $1,152,761 USD at 75% of construction and The corresponding cost of land ($4,650,000 USD) funded by the City of Sunnyvale. The rest of the $7,397,496 USD will be obtained from a combination of gap government programs like the Home Investment Partnerships Program (HOME), the Transit-Oriented Development (TOD) Housing Program and the Community Development Block Program (CDBG), and the deferral of the developer fee. The configuration of the building was made with the objective of being competitive for the 9% tax credits. More than 50% of the units are targeted for tenants earning up to 30% AMI. Furthermore, the population will be seniors who have experienced or are in risk of experiencing homelessness, a priority group for this government program. During the operations phase, we expect the total expenses & reserves per unit to be $10,046 USD, given the type of services that will be provided within the facility. The main source of revenue will be the rents and rent subsidies. Out of the 99 units, 25 (approximately 25%) are considered to be able to benefit from the Section 8 rental subsidies. From these numbers, we will obtain one permanent loan to support operations: Tranche A: $5,572,066 loan with a 4.82% interest rate with a 30 year amortization. This loan will be supported by the rent and rent subsidies income.
It is important to mention that the DSCR will always be higher than 1.15, for the whole life of the building.
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FINANCE CAPITAL CAPITAL STACK
STACK
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DEVELOPMENT TIMELINE 1171 Sonora Court will be ready to begin leasing in July 2023. The plan is to begin site development in Q2 or 2021. This step includes architectural renderings, floor plans, site survey and acquisition. Developing the financing scheme will occur simultaneously. During this time, the team will develop creative financing schemes to support this initiative. Once completed, we will begin the approvals and entitlement process to ensure that the project can be successfully implemented. The approvals and entitlement process along with securing the necessary building permits will be completed by, hopefully, the middle of Q3 2022. Only after all these pieces are in place will construction begin. Construction is expected to take 18 months where we hope to commission the building by Q2 2023. We understand it will require ambitious coordination to build both buildings simultaneously even though they are financed separately. We found proportionally splitting podium costs between the two buildings to be an economically viable solution for financing and constructing the shared podium.
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REFERENCES (1) HTTPS://WWW.MERCURYNEWS.COM/2017/07/20/SENIORS-ON-THE-STREETS-AGING-HOMELESS-POPULATIONOF-SILICON-VALLEY/ (2) HTTPS://WWW.NYTIMES.COM/2021/03/29/US/WOMENS-HISTORY-MONTH-MARCH.HTML (3) HTTPS://WWW.CDC.GOV/VIOLENCEPREVENTION/INTIMATEPARTNERVIOLENCE/FASTFACT.HTML (4) JOHN CONNERY, ET AL., “SANTA CLARA COUNTY HOMELESS CENSUS & SURVEY,” 2019, HTTPS://WWW.SCCGOV.ORG/SITES/OSH/CONTINUUMOFCARE/REPORTSANDPUBLICATIONS/DOCUMENTS/2015% 20SANTA%20CLARA%20COUNTY%20HOMELESS%20CENSUS%20AND%20SURVEY/2019_SANTACLARAS (5) HTTPS://SUNNYVALE.CA.GOV/CIVICAX/FILEBANK/BLOBDLOAD.ASPX?BLOBID=26916 (6) JOHN CONNERY, ET AL., “SANTA CLARA COUNTY HOMELESS CENSUS & SURVEY,” 2019, HTTPS://WWW.SCCGOV.ORG/SITES/OSH/CONTINUUMOFCARE/REPORTSANDPUBLICATIONS/DOCUMENTS/2015% 20SANTA%20CLARA%20COUNTY%20HOMELESS%20CENSUS%20AND%20SURVEY/2019_SANTACLARAS (7) HTTPS://LEGINFO.LEGISLATURE.CA.GOV/FACES/BILLNAVCLIENT.XHTML?BILL_ID=201920200AB1763 (8) HTTPS://MAPS.CONSERVATION.CA.GOV/CGS/INFORMATIONWAREHOUSE/REGULATORYMAPS/ (9) HTTPS://MAPS.CONSERVATION.CA.GOV/CGS/INFORMATIONWAREHOUSE/REGULATORYMAPS/ (10) HTTPS://STANFORDFUTUREBAY.SHINYAPPS.IO/SANTACLARA_HEAT/ (11) HTTPS://MTC.MAPS.ARCGIS.COM/APPS/WEBAPPVIEWER/INDEX.HTML? ID=4A6F3F1259DF42EAB29B35DFCD086FC8 (12) HTTPS://PROJECTS.SFCHRONICLE.COM/2019/CALIFORNIA-DANGER-ZONES/ (13) HTTPS://SOFTWOODLUMBERBOARD.ORG/CALIFORNIA-BUILDING-STANDARDS-COMMISSION-PASSES-TALLWOOD-CODE-CHANGE-PROPOSALS/
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APPENDIX
Table 1: Solar Dimension Calculations
Rendering 1: Whole Building Rendering
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DocuSign Envelope ID: 3F6977E6-CE58-4D8C-8FA4-8E6836A0AF90
FOR EDUCATIONAL PURPOSES ONLY May 20, 2021 Sonora Grove Development Stanford University 473 Via Ortega Drive Stanford, CA 94305 Re: Affordable Housing for Seniors, Families, and Domestic Violence Survivors Dear Sonora Grove Development Team, This letter is to confirm MidPen Housing’s support for the proposed Sonora Grove development at 1171 Sonora Court in Sunnyvale, CA. The incorporation of much-needed affordable senior housing, general low-income family housing, and housing for domestic violence survivors directly supports a major need in the community and aligns well with our mission to develop affordable housing in the Bay Area. MidPen Housing is a local affordable housing developer whose mission is to provide safe, affordable housing of high quality to those in need; establish stability and opportunity in the lives of residents; and foster diverse communities that allow people from all ethnic, social and economic backgrounds to live in dignity, harmony and mutual respect. MidPen Housing has developed over 8,000 affordable homes and deployed over $1 billion in capital for the development of affordable housing. MidPen Housing verifies that the Sonora Grove development assumptions including construction costs, financing strategies, market analysis, and multifamily building design are consistent with our development experience in the Bay Area. The City of Sunnyvale has expressed their strong support for more transit-oriented affordable housing development within the Lawrence Station Area Plan, which includes Sonora Court. This letter represents our support for the hypothetical project proposed for the Sonora Grove Bank of America Merrill Lynch Low Income Housing Challenge and does not represent a real commitment. Sincerely,
Felix AuYeung, VP of Business Development MidPen Housing
DocuSign Envelope ID: 41D9DFD8-9CF8-46FF-959D-0B895BF29D54
Amigos de Guadalupe Center for Justice & Empowerment May 17, 2021 Sonora Grove Stanford University 473 Via Ortega Drive Stanford, CA 94305 Re: Bank of America Low Income Housing Challenge Dear Sonora Grove Development Team, Amigos de Guadalupe Center for Justice and Empowerment is pleased to write this letter of support for the proposed Sonora Grove development in Sunnyvale, California. The proposal for greatly needed housing to support underserved and at-risk members of our community supports the Amigos mission and vision for creating and empowering our underserved community members with the tools they need to become self-sufficient contributors to our local community and beyond. Amigos de Guadalupe currently operates five safe park sites, one hotel program, and Casitas de Esperanza (Tiny Homes of Hope) in support of our homeless population. We case manage and provide support for our individuals and families by incorporating two key principles: (1) Radical Hospitality that helps our clients know that they are part of a larger community, thereby mitigating the sense of isolation that results from being homeless, and (2) Two-Generation (2Gen) approach to case management that serves both the parents and the children in a family as they develop a set of family goals to move toward permanent housing and effective schooling. We are pleased to offer our support for the proposal. It aligns with our values, and we believe it is created with the ideas in mind that are necessary to lift people out of the difficult situations in which they find themselves and move them into health and selfsufficiency. Again, we support the Stanford proposal, and hope you will give it your most serious consideration. Sincerely,
Maritza Maldonado Founding Executive Director
1897 Alum Rock Ave., San Jose, CA 95116
I Phone:
(408) 341-6080
I E-mail: amigos95116@gmail.com
Low Income Housing Challenge Financial Model Team Project Name Date of Model
Senior bar-shaped building (9%)
Stanford University 1171 Sonora Court 5/21/2021
Project Schedule Closing Date Completion Date Placed In Service Deadline Leasing Start Date Initial Stabilization Conversion
1/1/2022 7/1/2023
18 months from closing
7/1/2023 1/1/2024 4/1/2024
18 months from closing 6 months after leasing start date 3 months stabilized
Cushion btn Initial Stabilization and Construction Loan Maturity Cushion btn Conversion and Construction Loan Maturity Construction Loan Term Sources and Uses Senior Debt (Construction Loan) Tranche A permanent loan Tranche B permanent loan ILP Equity Contributions City of Sunnyvale IIG Gap Subsidy (HOME, CDBG, Others)
6 3 30 months
Construction Permanent 22,118,746 5,572,066 4,611,044 23,055,219 4,650,000 4,650,000 5,500,000 5,500,000
Deferred Discretionary Developer Fee Other Deferrals TOTAL SOURCES
1,554,263 343,233 38,777,285
38,777,285
Total Land Costs Total Hard Costs Total Other Soft Costs TOTAL USES SURPLUS < SHORTAGE >
4,150,900 25,078,500 9,547,885 38,777,285 (0)
4,150,900 25,078,500 9,547,885 38,777,285 0
Valuation Property Value Tax Credit Value Total Value Ratios LTV Senior Debt Senior Debt LTC Hard Cost Contingency % Soft Cost Contingency % Deferred Developer Fee / Construction loan Amount
$11,935,338 $34,990,556 $46,925,894
47% 57%
12% 14% 4.52% 4.04% 7.03%
Low Income Housing Challenge Financial Model Team Project Name Date of Model
Family L- shaped building (4%)
Stanford University 1171 Sonora Court 5/21/2021
Project Schedule Closing Date Completion Date Placed In Service Deadline Leasing Start Date Initial Stabilization Conversion
1/1/2022 7/1/2023
18 months from closing
7/1/2023 1/1/2024 4/1/2024
18 months from closing 6 months after leasing start date 3 months stabilized
Cushion btn Initial Stabilization and Construction Loan Maturity Cushion btn Conversion and Construction Loan Maturity Construction Loan Term Sources and Uses Senior Debt (Construction Loan) Tranche A permanent loan Tranche B permanent loan ILP Equity Contributions (Tax Credits) City of Sunnyvale IIG Gap Subsidy (HOME, CDBG, Others)
6 3 30 months
Construction Permanent 44,623,590 11,593,199 12,448,841 6,163,173 30,815,866 10,350,000 10,350,000 3,105,000 3,105,000 11,150,000 11,150,000
Deferred Discretionary Developer Fee Other Deferrals TOTAL SOURCES
3,459,488 611,656 79,462,907
79,462,906
Total Land Costs Total Hard Costs Total Other Soft Costs TOTAL USES SURPLUS < SHORTAGE >
9,239,100 52,486,500 17,737,307 79,462,907 0
9,239,100 52,486,500 17,737,307 79,462,907 (0)
Valuation Property Value Tax Credit Value Total Value Ratios LTV Senior Debt Senior Debt LTC Hard Cost Contingency % Soft Cost Contingency % Deferred Developer Fee / Construction loan Amount
$29,627,928 $60,443,794 $90,071,721
50% 56%
27% 30% 4.82% 5.48% 7.75%
Low Income Housing Challenge Financial Model Team Project Name Date of Model Proforma Assumptions Annual % Increase in Rents Average Operating Expense Year Total Revenue Total Vacancy Effective Gross Income
Senior bar-shaped building (9%)
Stanford University 1171 Sonora Court 5/21/2021
2.00% 3.00%
1 1,675,029 83,751 1,591,278
2 1,708,530 85,426 1,623,103
3 1,742,700 87,135 1,655,565
4 1,777,554 88,878 1,688,676
5 1,813,105 90,655 1,722,450
6 1,849,367 92,468 1,756,899
7 1,886,355 94,318 1,792,037
8 1,924,082 96,204 1,827,878
9 1,962,563 98,128 1,864,435
10 2,001,815 100,091 1,901,724
11 2,041,851 102,093 1,939,758
12 2,082,688 104,134 1,978,554
13 2,124,342 106,217 2,018,125
14 2,166,829 108,341 2,058,487
15 2,210,165 110,508 2,099,657
70,000 60,000 35,000 94,000 325,000 240,000 61,111 50,000 935,111 59,400 994,511
72,100 61,800 36,050 96,820 334,750 247,200 62,944 51,500 963,164 61,182 1,024,346
74,263 63,654 37,132 99,725 344,793 254,616 64,832 53,045 992,059 63,017 1,055,076
76,491 65,564 38,245 102,716 355,136 262,254 66,777 54,636 1,021,821 64,908 1,086,729
78,786 67,531 39,393 105,798 365,790 270,122 68,781 56,275 1,052,475 66,855 1,119,330
81,149 69,556 40,575 108,972 376,764 278,226 70,844 57,964 1,084,050 68,861 1,152,910
83,584 71,643 41,792 112,241 388,067 286,573 72,969 59,703 1,116,571 70,927 1,187,498
86,091 73,792 43,046 115,608 399,709 295,170 75,158 61,494 1,150,068 73,055 1,223,123
88,674 76,006 44,337 119,076 411,700 304,025 77,413 63,339 1,184,570 75,246 1,259,816
91,334 78,286 45,667 122,649 424,051 313,146 79,736 65,239 1,220,107 77,504 1,297,611
94,074 80,635 47,037 126,328 436,773 322,540 82,128 67,196 1,256,711 79,829 1,336,539
96,896 83,054 48,448 130,118 449,876 332,216 84,591 69,212 1,294,412 82,223 1,376,635
99,803 85,546 49,902 134,022 463,372 342,183 87,129 71,288 1,333,244 84,690 1,417,934
102,797 88,112 51,399 138,042 477,273 352,448 89,743 73,427 1,373,242 87,231 1,460,472
105,881 90,755 52,941 142,183 491,592 363,022 92,435 75,629 1,414,439 89,848 1,504,287
Net Operating Income Maximum Debt Services
596,767 351,625
598,757 351,625
600,489 351,625
601,948 351,625
603,119 351,625
603,989 351,625
604,539 351,625
604,755 351,625
604,619 351,625
604,113 351,625
603,219 351,625
601,918 351,625
600,190 351,625
598,015 351,625
595,370 351,625
Cash Flow After Must Pay Debt Debt Service Coverage Ratio
596,767 1.70
598,757 1.70
600,489 1.71
601,948 1.71
603,119 1.72
603,989 1.72
604,539 1.72
604,755 1.72
604,619 1.72
604,113 1.72
603,219 1.72
601,918 1.71
600,190 1.71
598,015 1.70
595,370 1.69
Escalation
Management Fees Insurance Real Estate Taxes Total Administration Payroll and Benefits Total Utilities Marketing Repairs and Maintenance Miscellaneous Other Expenses Social Services Total Operating Expenses Operating Reserves Replacement Reserves Total Expenses & Reserves
2.00% 2.00%
3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00%
Low Income Housing Challenge Financial Model Team Project Name Date of Model Proforma Assumptions Annual % Increase in Rents Average Operating Expense Year Total Revenue Total Vacancy Effective Gross Income
Family L- shaped building (4%)
Stanford University 1171 Sonora Court 5/21/2021
2.00% 3.00%
1 2,725,523 136,276 2,589,246
2 2,780,033 139,002 2,641,031
3 2,835,634 141,782 2,693,852
4 2,892,346 144,617 2,747,729
5 2,950,193 147,510 2,802,684
6 3,009,197 150,460 2,858,737
7 3,069,381 153,469 2,915,912
8 3,130,769 156,538 2,974,230
9 3,193,384 159,669 3,033,715
10 3,257,252 162,863 3,094,389
11 3,322,397 166,120 3,156,277
12 3,388,845 169,442 3,219,402
13 3,456,622 172,831 3,283,790
14 3,525,754 176,288 3,349,466
15 3,596,269 179,813 3,416,456
150,000 50,000 15,000 59,000 180,000 442,250 69,000 70,000 1,035,250 72,600 1,107,850
154,500 51,500 15,450 60,770 185,400 455,518 71,070 72,100 1,066,308 74,778 1,141,086
159,135 53,045 15,914 62,593 190,962 469,183 73,202 74,263 1,098,297 77,021 1,175,318
163,909 54,636 16,391 64,471 196,691 483,259 75,398 76,491 1,131,246 79,332 1,210,578
168,826 56,275 16,883 66,405 202,592 497,756 77,660 78,786 1,165,183 81,712 1,246,895
173,891 57,964 17,389 68,397 208,669 512,689 79,990 81,149 1,200,138 84,163 1,284,302
179,108 59,703 17,911 70,449 214,929 528,070 82,390 83,584 1,236,143 86,688 1,322,831
184,481 61,494 18,448 72,563 221,377 543,912 84,861 86,091 1,273,227 89,289 1,362,516
190,016 63,339 19,002 74,739 228,019 560,229 87,407 88,674 1,311,424 91,968 1,403,391
195,716 65,239 19,572 76,982 234,859 577,036 90,029 91,334 1,350,766 94,727 1,445,493
201,587 67,196 20,159 79,291 241,905 594,347 92,730 94,074 1,391,289 97,568 1,488,858
207,635 69,212 20,764 81,670 249,162 612,177 95,512 96,896 1,433,028 100,495 1,533,523
213,864 71,288 21,386 84,120 256,637 630,543 98,378 99,803 1,476,019 103,510 1,579,529
220,280 73,427 22,028 86,643 264,336 649,459 101,329 102,797 1,520,300 106,616 1,626,915
226,888 75,629 22,689 89,243 272,266 668,943 104,369 105,881 1,565,909 109,814 1,675,723
Net Operating Income Maximum Debt Services
1,481,396 1,279,129
1,499,946 1,279,129
1,518,534 1,279,129
1,537,151 1,279,129
1,555,789 1,279,129
1,574,435 1,279,129
1,593,081 1,279,129
1,611,714 1,279,129
1,630,324 1,279,129
1,648,896 1,279,129
1,667,419 1,279,129
1,685,879 1,279,129
1,704,261 1,279,129
1,722,551 1,279,129
1,740,733 1,279,129
Cash Flow After Must Pay Debt Debt Service Coverage Ratio
1,481,396 1.16
1,499,946 1.17
1,518,534 1.19
1,537,151 1.20
1,555,789 1.22
1,574,435 1.23
1,593,081 1.25
1,611,714 1.26
1,630,324 1.27
1,648,896 1.29
1,667,419 1.30
1,685,879 1.32
1,704,261 1.33
1,722,551 1.35
1,740,733 1.36
Escalation
Management Fees Insurance Real Estate Taxes Total Administration Payroll and Benefits Total Utilities Marketing Repairs and Maintenance Miscellaneous Other Expenses Social Services Total Operating Expenses Operating Reserves Replacement Reserves Total Expenses & Reserves
2.00% 2.00%
3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00% 3.00%
April 22, 2021 Stanford Univiersity Team 450 Serra Mall, Stanford, CA 94305
Re:
1171 Sonora Court 9%, Sunnyvale, CA
Dear Stanford UniversityTeam: This letter will serve as a preliminary outline of the terms under which Bank of America (the “Bank”) would consider a loan request and equity investment on the above referenced project. This letter does not represent an offer or commitment by the Bank for the proposed financing, nor does it define all the terms and conditions of a loan commitment, but is a framework upon which a loan request may be submitted. Issuance of a commitment by the Bank is subject to, among other things, the completion of the following items, and approval of the loan request under the Bank’s internal approval process. The Bank may decline to approve the loan request. Upon your response to this letter and after providing any additional information which may be necessary, the Bank will proceed with the necessary due diligence to submit the loan request. The proposed terms and conditions are as follows: Project:
To be construction 94-unit apartment complex located at Sunnyvale, CA.
Borrower:
A to-be-determined special purpose entity - form and substance of Borrower must be acceptable to the Bank.
Reporting Requirements:
Know Your Customer:
Other Requirements:
Annually:
Borrower and Guarantors’ financial statements and covenant compliance.
Monthly:
Property operating statements and rental summary report.
Within five (5) business days of opening an account with Bank, Borrower shall have delivered to Bank all due diligence materials necessary and relevant to verifying Borrower's identity and background information, as deemed necessary by Bank in its sole and absolute discretion. All of the following to be acceptable to the Bank: documentation and submissions that are standard for loans of this type including, but not limited to, appraisal, ESA, legal documentation, title/survey, proposed standard lease form, front-end cost and document reviews and acceptance of final budget (includes adequate contingency, interest carry/operating deficit reserve, etc.), review of plans/specs, condition of markets/submarkets, revenue/expenses pro-formas, financial review of Borrower, Guarantor, and general contractor, management agreement and subordination; and (as applicable), proof of tax credit award, equity investor and pay-in schedule, proof of tax-exempt status with respect to ad valorem taxes and other terms and conditions as may be required.
Page 1 of 8
Confidentiality:
This term sheet is strictly confidential and may not be shared with anyone else other than the owners of Borrower.
Construction Loan Construction Loan Amount:
Construction Interest Rate:
Information obtained by the Bank is so far insufficient to establish a loan amount. Based on our general underwriting parameters for what we believe to be similar transactions, the construction loan amount in this transaction would be the lesser of: 1) $23,360,344 2) 55% LTC based on final Bank approved construction budget or 3) 59% LTV based on an appraisal in form and substance acceptable to the Bank.
30-Day LIBOR + 2.35%, floating. 75 bps LIBOR Floor. Term Loan Interest Rate as further described below.
Construction Loan Term:
30 months from the loan closing.
Construction Loan Amortization:
Interest only for 30 months
Construction Loan Fee:
0.75% of the total Loan Commitment, payable at closing.
Construction Renewal Options:
One six-month extension options subject to the following: a) No less than 30 but no more than 90 day written notice of intention to exercise the option; b) No event of default having occurred or potential default occurring; c) Performance hurdles have been met, including but not limited to, lien-free construction completion and lease up hurdles; d) The loan is in balance, including sufficient interest reserve; e) Project must demonstrate the ability to be able to convert/payoff Bank’s loan within the extension period; f) All co-construction loans mature or are extended concurrent or past the Bank’s extension date; g) All takeout commitments expire or are extended concurrent or past the Bank’s extension date; h) All investor commitments include terms or are modified to be consistent with the extension of the Bank’s loan; i) No material adverse change in the financial condition of the Project, Borrower, and Guarantor; j) Payment of 0.25% renewal fee based on the committed Loan amount; and k) Rate adjustment or fee payment, as appropriate, to cover the cost of revising the forward rate lock, if any.
Page 2 of 8
Payment and Performance Guaranty:
100 % guarantee of completion, performance and repayment to be provided by Stanford University, and/or other guarantor acceptable to Bank. The guarantors shall be required to meet to-be-determined liquidity, leverage, and net-worth covenants. For borrowers that are single-asset entities, principal(s) with general liability or guarantor(s) acceptable to the Bank must be jointly and severally liable for completion of the project and repayment of the financing, including interest and costs.
Collateral:
1) First Lien Deed of Trust on land and improvements constructed thereon. 2) UCC filing on furniture, fixtures and equipment. 3) Assignment of rents/leases and management/construction/architectural contracts, etc. 4) Assignment of interest rate hedge agreement, if any.
General Contractor:
To be acceptable to Bank.
Term Loan: Term Loan Amount:
Term Loan Interest Rate:
Least of 1) $7,478,069. 2) 90% LTV based on an appraisal in form and substance acceptable to the Bank, or 3) the principal amount based on debt service payments sufficient to achieve a 1:15 DSCR.
Fixed rate for the life of the financing. Note rate will be fixed immediately prior to construction closing based upon then applicable market rates for like tenor and character loans. The Bank estimates that, were the Note rate fixed as of the date of this letter, the rate would be approximately 4.82%. THIS RATE IS INDICATIVE ONLY AND THE ACTUAL NOTE RATE MAY DIFFER. The interest rate will be forward locked for a period of 30 months. Month 31 of the construction loan term will be at the Term Loan Interest Rate on an interest-only basis. Amortization listed below will commence upon Month 30. Forward rate lock extension for one six-month period will be available, subject to a fee of 0.25% if the Loan does not convert within the first ninety (90) days of the extension. Fee to be paid at the earliest of the conversion or expiration of the extension.
Replacement Reserves:
$600/unit/year
Operating Reserve:
$250,492 funded at or prior to conversion
Subsidy Transition Reserve:
Not Applicable
Term Loan
Page 3 of 8
Maturity:
17 years from the term loan conversion and closing.
Amortization:
35 years
Term Loan Fees:
1.00% of the Term Loan Amount, payable at closing.
Conversion Terms:
1) Lien free completion. 2) Property has stabilized over the prior three consecutive months as evidenced by 90% or greater physical and economic occupancy for each of the three months and achievement of 1:15 DSCR for that period. 3) Pay-off of the construction loan.
Guaranty:
Non-recourse exclusions from key principals relating to fraudulent acts, in form and substance acceptable to Bank. Financial condition of key principals will be subject to Bank review and approval.
Equity: Partnership:
General Partner will own a 0.01% interest in the Partnership; Bank (the “Investor”) will own a 99.99% interest in the Partnership.
Capital Contributions: Bank will make a total Capital Contribution of $0.95 for each $1.00 off Tax Credits to which it will be entitled as a limited partner for a total Capital Contribution of $22,116,812 to be paid as follows: Milestone
Initial Capital Contribution
Completion Installment
Conditions to be satisfied prior to payment
(i) closing of the Partnership (ii) closing and initial funding of all construction financing for the Project (iii) receipt of commitments for all permanent financing on the Project with the interest rate fixed for at least 15 years (iv) evidence of either acquisition of, or a long-term leasehold interest in, the land and building for the Project (v) evidence the Partnership has received an allocation from the Credit Agency of 4% credits in an amount equal to the Projected Federal Credits (vi) receipt by the Investor of a tax opinion prepared by special tax counsel for the Partnership in a form which is acceptable to the Investor (vii) satisfactory completion of Investor’s due diligence
% Equity
$ Equity
10%
$2,211,681
5%
$1,105,841
(i) the Bank has received the Bank’s Construction Consultant’s report evidencing 50% completion of the property (ii) all prior capital contribution requirements have been completed. This contribution will occur no earlier than 12/1/22.
Page 4 of 8
Completion Installment
(i) the Bank has received the Bank’s Construction Consultant’s report evidencing 75% completion of the property (ii) all prior capital contribution requirements have been completed. 5%
$1,105,841
78.9%
$17,443,449
2.1%
$250,000
This contribution will occur no earlier than 04/1/23.
Conversion and Stabilization Capital Contribution
Final Capital Contribution (The balance of the unpaid Total Capital Contribution)
(i) the Project then has achieved at least three consecutive calendar months of a minimum of 1.15 to 1 debt service coverage on the Permanent Loans (which period must include the last day of the most recent calendar month), (ii) the Project is then at least 90% occupied (iii) all tax credit units have been leased to qualified tenants at least one time (v) permanent certificates of occupancy have been issued for each building (vi) all reserves have funded or will fund concurrent with this payment This contribution will occur no earlier than 10/1/2023. (i) the Credit Agency has issued a Form 8609 for each building (ii) a cost certification by a qualified accountant has been received in a form acceptable to Investor (iii) a copy of the recorded Extended Use Agreement has been received (iv) a copy of the compliance audit of the initial tenant files has been received (v) calculations of final adjusters have been prepared and agreed to This contribution will occur no earlier than 12/1/2023.
Operating Deficit Guaranty.
General Partner and guarantors will agree to loan to the Partnership any amounts required to fund operating deficits. The Operating Deficit Guaranty will terminate upon the later of 60 months after the later of (i) the expiration of the Completion and Development Deficit Guaranty, or (ii) the Project’s achievement of 1.20 to 1 debt service coverage ratio on the Permanent Loans calculated over a period of 12 consecutive months. In addition, in order for the Operating Deficit Guaranty to terminate, the Project must average a 1.15 to 1 debt service coverage ratio for the last 12 months of the 60 month period or any subsequent 12 month period and the Operating Reserve must be replenished to its originally required balance.
Credit Adjuster.
To the extent such final projected amount of Low-Income Housing Tax Credits varies from the Original Projected Credits, Investor’s capital contribution will be adjusted by $0.95 per federal credit on such variance in the delivery of actual credits to Original Project Credit (as reflected in cost certifications or Form 8609).
Timing Adjuster.
Investor’s federal credit capital contribution will be adjusted to reflect the later or earlier than projected delivery of federal credits with respect to the first year and, if applicable, the second year, of the credit period, based on a reduction in price of $0.65 of the price per credit for every federal credit dollar deferred, or an increase based on $0.65 of the price per credit established in Section 6 above for every federal credit dollar accelerated.
Page 5 of 8
Distribution of Operating Cash Flow.
Operating cash flow will be utilized as follows: (i) payment of debt service on the Permanent Loans and other operating expenses; (ii) additions to a funded capital replacement reserve as provided in the Partnership Agreement; (iii) payment of the Asset Management Fee ($5,000 per year increasing 3% per year) to the Special Limited Partner, which fee will accrue if not paid; (iv) payment of the Deferred Developer Fee, (v) payment of the Partnership Management Fee ($5,000 per year increasing 3% per year) to the General Partner, which fee will accrue if not paid; (vi) repayment of any Operating Deficit Loans made by General Partner; (vii) replenishment of the Operating Reserve Account; (viii) payment of an incentive management fee, not to exceed 90% of cash flow; (ix) then to the partners in accordance with the Percentage Interests.
2.
Right of First Refusal. At the end of the 15 year tax credit compliance period, the General Partner will have a right of first refusal to purchase the Property for an amount equal to the greater of (a) fair market value of the Property, or (b) outstanding debt plus taxes payable as a result of the sale.
Other Conditions
The following are subject to Bank’s approval in its sole and absolute discretion: Discount to Market at least 15% across all units Project must be in balance at closing
General Provisions: Fees and Expenses:
Project In Balance:
Borrower will pay all reasonable costs incurred by the Bank in connection with the loans including, but not limited to, legal, environmental, front end costs and document review/inspections, physical needs assessment (for existing projects only) and appraisal. Borrower acknowledges that Bank may receive a benefit, including, without limitation, a discount, credit or other accommodation, from outside counsel based on the fees such counsel may receive on account of their relationship with Bank including, without limitation, fees paid pursuant hereto. Borrower will be required to maintain the project financing “in balance” at all times, including through the completion of the improvements and the termination
Page 6 of 8
of the Construction Loan. The Project financing is “in balance” whenever the amount of the undisbursed Construction Loan proceeds, plus any sums to be provided by Borrower or other sources approved by Bank, are sufficient to pay all of the following: (a) all costs of construction, and leasing of the Improvements and (b) all interest and other sums and costs that may accrue under the Construction Loan. Material Adverse Change:
Bank of America’s obligations hereunder shall terminate if, prior to closing, Bank of America determines, in its sole judgment, that there shall exist any conditions regarding the property, or the operations, business, assets, liabilities or condition (financial or otherwise, including credit rating) of Borrower or Guarantor, or there shall have occurred a material adverse change in, or there shall exist any material adverse conditions in, the market for syndicated bank credit facilities or the financial, banking, credit or debt capital markets generally, that could be expected to cause the loan to become delinquent or prevent any guarantor from performing its obligations under any guaranty or to materially and adversely affect the value or marketability of the loan or the property or Bank of America’s ability to syndicate the loan or the viability of obtaining permanent financing for the Project.
Assumptions made:
The terms discussed herein are presented, based on the credit conditions in the potential transaction as known by Bank of America. Should additional facts come to light that positively or negatively impact the situation, prices or other requirements quoted here may be adjusted.
Expiration:
This term sheet will expire at 5:00 p.m. Pacific time on that date which is five (5) business days from the date hereof unless you execute this term sheet and return it to us prior to that time, which may be by facsimile transmission. Please understand that this term sheet does not represent an offer or commitment by Bank of America, or any of its affiliated entities, for the proposed new financing, nor does it define all of the terms and conditions of a loan commitment, but is a framework upon which a loan request may be submitted. Issuance of a commitment by Bank of America is subject to, among other things, the approval of your loan request under the Bank’s approval process. If Bank of America issues a financing commitment in this transaction, it will in all respects supersede this letter.
The undersigned acknowledges and agrees that: (i) the transaction contemplated by this Term Sheet is an arm’s length, commercial transaction between you and Bank in which Bank is acting solely as a principal and for its own interest; (ii) Bank is not acting as a municipal advisor or financial advisor to you; (iii) Bank has no fiduciary duty pursuant to Section 15B of the Securities Exchange Act of 1934 to you with respect to the transaction contemplated hereby and the discussions, undertakings and procedures leading thereto (irrespective of whether Bank has provided other services or is currently providing other services to you on other matters); (iv) the only obligations Bank has to you with respect to the transaction contemplated hereby expressly are set forth in this Term Sheet; and (v) Bank is not recommending that you take an action with respect to the transaction contemplated by this Term Sheet, and before taking any action with respect to the contemplated transaction, you should discuss the information contained herein with its own legal, accounting, tax, financial and other advisors, as it deems appropriate. If you would like a municipal advisor in this transaction that has legal fiduciary duties to you, you are free to engage a municipal advisor to serve in that capacity. This Term Sheet is provided to you pursuant to and in reliance upon the “bank exemption” provided under the municipal advisor rules of the Securities and Exchange Commission, Rule 15Ba1-1 et seq. Please review the above terms and conditions and feel free to call me with any questions or comments you may have. If you find the above terms and conditions to be acceptable, please indicate so by signing below and returning a faxed copy to my attention by the date which is five days from the date of this letter
Page 7 of 8
along with a good-faith deposit of $30,000.00. Upon receipt of the letter and the good-faith deposit, the Bank will proceed with the necessary due diligence to prepare and submit your loan request, provided, however that in any event, this term sheet will finally expire at 5:00 p.m. Pacific time on that date which is sixty (60) days from the date hereof. Your deposit is refundable, less the Bank’s out of pocket expenses incurred, should the Bank decline the financing opportunity discussed herein. I look forward to hearing from you and working with you on this and other transactions. Sincerely, Brandon Butcher
Bank of America, N.A. Community Development Banking
Please submit a loan application as outlined above:
Name: _________________________________ Title: _________________________________ Date: _________________________________
Page 8 of 8
April 22, 2021 Stanford Univiersity Team 450 Serra Mall, Stanford, CA 94305
Re:
1171 Sonora Court 4%, Sunnyvale, CA
Dear Stanford UniversityTeam: This letter will serve as a preliminary outline of the terms under which Bank of America (the “Bank”) would consider a loan request and equity investment on the above referenced project. This letter does not represent an offer or commitment by the Bank for the proposed financing, nor does it define all the terms and conditions of a loan commitment, but is a framework upon which a loan request may be submitted. Issuance of a commitment by the Bank is subject to, among other things, the completion of the following items, and approval of the loan request under the Bank’s internal approval process. The Bank may decline to approve the loan request. Upon your response to this letter and after providing any additional information which may be necessary, the Bank will proceed with the necessary due diligence to submit the loan request. The proposed terms and conditions are as follows: Project:
To be construction 109-unit apartment complex located at Sunnyvale, CA.
Borrower:
A to-be-determined special purpose entity - form and substance of Borrower must be acceptable to the Bank.
Reporting Requirements:
Know Your Customer:
Other Requirements:
Annually:
Borrower and Guarantors’ financial statements and covenant compliance.
Monthly:
Property operating statements and rental summary report.
Within five (5) business days of opening an account with Bank, Borrower shall have delivered to Bank all due diligence materials necessary and relevant to verifying Borrower's identity and background information, as deemed necessary by Bank in its sole and absolute discretion. All of the following to be acceptable to the Bank: documentation and submissions that are standard for loans of this type including, but not limited to, appraisal, ESA, legal documentation, title/survey, proposed standard lease form, front-end cost and document reviews and acceptance of final budget (includes adequate contingency, interest carry/operating deficit reserve, etc.), review of plans/specs, condition of markets/submarkets, revenue/expenses pro-formas, financial review of Borrower, Guarantor, and general contractor, management agreement and subordination; and (as applicable), proof of tax credit award, equity investor and pay-in schedule, proof of tax-exempt status with respect to ad valorem taxes and other terms and conditions as may be required.
Page 1 of 8
Confidentiality:
This term sheet is strictly confidential and may not be shared with anyone else other than the owners of Borrower.
Construction Loan Construction Loan Amount:
Construction Interest Rate:
Information obtained by the Bank is so far insufficient to establish a loan amount. Based on our general underwriting parameters for what we believe to be similar transactions, the construction loan amount in this transaction would be the lesser of: 1) $42,301,824 2) 57% LTC based on final Bank approved construction budget or 3) 50% LTV based on an appraisal in form and substance acceptable to the Bank.
30-Day LIBOR + 2.35%, floating. 75 bps LIBOR Floor. Term Loan Interest Rate as further described below.
Construction Loan Term:
30 months from the loan closing.
Construction Loan Amortization:
Interest only for 30 months
Construction Loan Fee:
0.75% of the total Loan Commitment, payable at closing.
Construction Renewal Options:
One six-month extension options subject to the following: a) No less than 30 but no more than 90 day written notice of intention to exercise the option; b) No event of default having occurred or potential default occurring; c) Performance hurdles have been met, including but not limited to, lien-free construction completion and lease up hurdles; d) The loan is in balance, including sufficient interest reserve; e) Project must demonstrate the ability to be able to convert/payoff Bank’s loan within the extension period; f) All co-construction loans mature or are extended concurrent or past the Bank’s extension date; g) All takeout commitments expire or are extended concurrent or past the Bank’s extension date; h) All investor commitments include terms or are modified to be consistent with the extension of the Bank’s loan; i) No material adverse change in the financial condition of the Project, Borrower, and Guarantor; j) Payment of 0.25% renewal fee based on the committed Loan amount; and k) Rate adjustment or fee payment, as appropriate, to cover the cost of revising the forward rate lock, if any.
Page 2 of 8
Payment and Performance Guaranty:
100 % guarantee of completion, performance and repayment to be provided by Stanford University, and/or other guarantor acceptable to Bank. The guarantors shall be required to meet to-be-determined liquidity, leverage, and net-worth covenants. For borrowers that are single-asset entities, principal(s) with general liability or guarantor(s) acceptable to the Bank must be jointly and severally liable for completion of the project and repayment of the financing, including interest and costs.
Collateral:
1) First Lien Deed of Trust on land and improvements constructed thereon. 2) UCC filing on furniture, fixtures and equipment. 3) Assignment of rents/leases and management/construction/architectural contracts, etc. 4) Assignment of interest rate hedge agreement, if any.
General Contractor:
To be acceptable to Bank.
Term Loan: Term Loan Amount:
Term Loan Interest Rate Tranche A and B:
Tranche A - Least of 1) $12,200,000. 2) 90% LTV based on an appraisal in form and substance acceptable to the Bank, or 3) the principal amount based on debt service payments sufficient to achieve a 1:15 DSCR. Tranche B - Least of 1) $12,613,703. 2) 90% LTV based on an appraisal in form and substance acceptable to the Bank, or 3) the principal amount based on debt service payments sufficient to achieve a 1:15 DSCR.
Fixed rate for the life of the financing. Note rate will be fixed immediately prior to construction closing based upon then applicable market rates for like tenor and character loans. The Bank estimates that, were the Note rate fixed as of the date of this letter, the rate would be approximately 3.91%. THIS RATE IS INDICATIVE ONLY AND THE ACTUAL NOTE RATE MAY DIFFER. The interest rate will be forward locked for a period of 30 months. Month 31 of the construction loan term will be at the Term Loan Interest Rate on an interest-only basis. Amortization listed below will commence upon Month 30. Forward rate lock extension for one six-month period will be available, subject to a fee of 0.25% if the Loan does not convert within the first ninety (90) days of the extension. Fee to be paid at the earliest of the conversion or expiration of the extension.
Replacement Reserves:
$600/unit/year
Operating Reserve:
$575,543 funded at or prior to conversion
Page 3 of 8
Subsidy Transition Reserve:
Not Applicable
Term Loan Maturity Tranche A and B:
17 years from the term loan conversion and closing.
Amortization:
Tranche A - 40 years Tranche B - 30 years
Term Loan Fees:
1.00% of the Term Loan Amount, payable at closing.
Conversion Terms:
1) Lien free completion. 2) Property has stabilized over the prior three consecutive months as evidenced by 90% or greater physical and economic occupancy for each of the three months and achievement of 1:15 DSCR for that period. 3) Pay-off of the construction loan.
Guaranty:
Non-recourse exclusions from key principals relating to fraudulent acts, in form and substance acceptable to Bank. Financial condition of key principals will be subject to Bank review and approval.
Equity: Partnership:
General Partner will own a 0.01% interest in the Partnership; Bank (the “Investor”) will own a 99.99% interest in the Partnership.
Capital Contributions: Bank will make a total Capital Contribution of $0.95 for each $1.00 off Tax Credits to which it will be entitled as a limited partner for a total Capital Contribution of $16,341,020 to be paid as follows: Milestone
Initial Capital Contribution
Conditions to be satisfied prior to payment
(i) closing of the Partnership (ii) closing and initial funding of all construction financing for the Project (iii) receipt of commitments for all permanent financing on the Project with the interest rate fixed for at least 15 years (iv) evidence of either acquisition of, or a long-term leasehold interest in, the land and building for the Project (v) evidence the Partnership has received an allocation from the Credit Agency of 4% credits in an amount equal to the Projected Federal Credits (vi) receipt by the Investor of a tax opinion prepared by special tax counsel for the Partnership in a form which is acceptable to the Investor (vii) satisfactory completion of Investor’s due diligence
Page 4 of 8
% Equity
$ Equity
10%
$1,634,102
Completion Installment
(i) the Bank has received the Bank’s Construction Consultant’s report evidencing 50% completion of the property (ii) all prior capital contribution requirements have been completed. 5%
$817,051
5%
$817,051
78.5%
$12,822,816
1.5%
$250,000
This contribution will occur no earlier than 12/1/22.
Completion Installment
Conversion and Stabilization Capital Contribution
Final Capital Contribution (The balance of the unpaid Total Capital Contribution)
(i) the Bank has received the Bank’s Construction Consultant’s report evidencing 75% completion of the property (ii) all prior capital contribution requirements have been completed. This contribution will occur no earlier than 04/1/23. (i) the Project then has achieved at least three consecutive calendar months of a minimum of 1.15 to 1 debt service coverage on the Permanent Loans (which period must include the last day of the most recent calendar month), (ii) the Project is then at least 90% occupied (iii) all tax credit units have been leased to qualified tenants at least one time (v) permanent certificates of occupancy have been issued for each building (vi) all reserves have funded or will fund concurrent with this payment This contribution will occur no earlier than 10/1/2023. (i) the Credit Agency has issued a Form 8609 for each building (ii) a cost certification by a qualified accountant has been received in a form acceptable to Investor (iii) a copy of the recorded Extended Use Agreement has been received (iv) a copy of the compliance audit of the initial tenant files has been received (v) calculations of final adjusters have been prepared and agreed to This contribution will occur no earlier than 12/1/2023.
Operating Deficit Guaranty.
Credit Adjuster.
General Partner and guarantors will agree to loan to the Partnership any amounts required to fund operating deficits. The Operating Deficit Guaranty will terminate upon the later of 60 months after the later of (i) the expiration of the Completion and Development Deficit Guaranty, or (ii) the Project’s achievement of 1.20 to 1 debt service coverage ratio on the Permanent Loans calculated over a period of 12 consecutive months. In addition, in order for the Operating Deficit Guaranty to terminate, the Project must average a 1.20 to 1 debt service coverage ratio for the last 12 months of the 60 month period or any subsequent 12 month period and the Operating Reserve must be replenished to its originally required balance. To the extent such final projected amount of Low-Income Housing Tax Credits varies from the Original Projected Credits, Investor’s capital contribution will be adjusted by $0.95 per federal credit on such variance in the delivery of actual credits to Original Project Credit (as reflected in cost certifications or Form 8609).
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Timing Adjuster.
Distribution of Operating Cash Flow.
Investor’s federal credit capital contribution will be adjusted to reflect the later or earlier than projected delivery of federal credits with respect to the first year and, if applicable, the second year, of the credit period, based on a reduction in price of $0.65 of the price per credit for every federal credit dollar deferred, or an increase based on $0.65 of the price per credit established in Section 6 above for every federal credit dollar accelerated.
Operating cash flow will be utilized as follows: (i) payment of debt service on the Permanent Loans and other operating expenses; (ii) additions to a funded capital replacement reserve as provided in the Partnership Agreement; (iii) payment of the Asset Management Fee ($5,000 per year increasing 3% per year) to the Special Limited Partner, which fee will accrue if not paid; (iv) payment of the Deferred Developer Fee, (v) payment of the Partnership Management Fee ($5,000 per year increasing 3% per year) to the General Partner, which fee will accrue if not paid; (vi) repayment of any Operating Deficit Loans made by General Partner; (vii) replenishment of the Operating Reserve Account; (viii) payment of an incentive management fee, not to exceed 90% of cash flow; (ix) then to the partners in accordance with the Percentage Interests.
2.
Right of First Refusal. At the end of the 15 year tax credit compliance period, the General Partner will have a right of first refusal to purchase the Property for an amount equal to the greater of (a) fair market value of the Property, or (b) outstanding debt plus taxes payable as a result of the sale.
Other Conditions
The following are subject to Bank’s approval in its sole and absolute discretion: Discount to Market at least 15% across all units Project must be in balance at closing
General Provisions: Fees and Expenses:
Borrower will pay all reasonable costs incurred by the Bank in connection with the loans including, but not limited to, legal, environmental, front end costs and document review/inspections, physical needs assessment (for existing projects only) and appraisal. Borrower acknowledges that Bank may receive a benefit, including, without limitation, a discount, credit or other accommodation, from
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outside counsel based on the fees such counsel may receive on account of their relationship with Bank including, without limitation, fees paid pursuant hereto. Project In Balance:
Material Adverse Change:
Borrower will be required to maintain the project financing “in balance” at all times, including through the completion of the improvements and the termination of the Construction Loan. The Project financing is “in balance” whenever the amount of the undisbursed Construction Loan proceeds, plus any sums to be provided by Borrower or other sources approved by Bank, are sufficient to pay all of the following: (a) all costs of construction, and leasing of the Improvements and (b) all interest and other sums and costs that may accrue under the Construction Loan.
Bank of America’s obligations hereunder shall terminate if, prior to closing, Bank of America determines, in its sole judgment, that there shall exist any conditions regarding the property, or the operations, business, assets, liabilities or condition (financial or otherwise, including credit rating) of Borrower or Guarantor, or there shall have occurred a material adverse change in, or there shall exist any material adverse conditions in, the market for syndicated bank credit facilities or the financial, banking, credit or debt capital markets generally, that could be expected to cause the loan to become delinquent or prevent any guarantor from performing its obligations under any guaranty or to materially and adversely affect the value or marketability of the loan or the property or Bank of America’s ability to syndicate the loan or the viability of obtaining permanent financing for the Project.
Assumptions made:
The terms discussed herein are presented, based on the credit conditions in the potential transaction as known by Bank of America. Should additional facts come to light that positively or negatively impact the situation, prices or other requirements quoted here may be adjusted.
Expiration:
This term sheet will expire at 5:00 p.m. Pacific time on that date which is five (5) business days from the date hereof unless you execute this term sheet and return it to us prior to that time, which may be by facsimile transmission. Please understand that this term sheet does not represent an offer or commitment by Bank of America, or any of its affiliated entities, for the proposed new financing, nor does it define all of the terms and conditions of a loan commitment, but is a framework upon which a loan request may be submitted. Issuance of a commitment by Bank of America is subject to, among other things, the approval of your loan request under the Bank’s approval process. If Bank of America issues a financing commitment in this transaction, it will in all respects supersede this letter.
The undersigned acknowledges and agrees that: (i) the transaction contemplated by this Term Sheet is an arm’s length, commercial transaction between you and Bank in which Bank is acting solely as a principal and for its own interest; (ii) Bank is not acting as a municipal advisor or financial advisor to you; (iii) Bank has no fiduciary duty pursuant to Section 15B of the Securities Exchange Act of 1934 to you with respect to the transaction contemplated hereby and the discussions, undertakings and procedures leading thereto (irrespective of whether Bank has provided other services or is currently providing other services to you on other matters); (iv) the only obligations Bank has to you with respect to the transaction contemplated hereby expressly are set forth in this Term Sheet; and (v) Bank is not recommending that you take an action with respect to the transaction contemplated by this Term Sheet, and before taking any action with respect to the contemplated transaction, you should discuss the information contained herein with its own legal, accounting, tax, financial and other advisors, as it deems appropriate. If you would like a municipal advisor in this transaction that has legal fiduciary duties to you, you are free to engage a municipal advisor to serve in that capacity. This Term Sheet is provided to you pursuant to and in reliance upon the “bank
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exemption” provided under the municipal advisor rules of the Securities and Exchange Commission, Rule 15Ba1-1 et seq. Please review the above terms and conditions and feel free to call me with any questions or comments you may have. If you find the above terms and conditions to be acceptable, please indicate so by signing below and returning a faxed copy to my attention by the date which is five days from the date of this letter along with a good-faith deposit of $30,000.00. Upon receipt of the letter and the good-faith deposit, the Bank will proceed with the necessary due diligence to prepare and submit your loan request, provided, however that in any event, this term sheet will finally expire at 5:00 p.m. Pacific time on that date which is sixty (60) days from the date hereof. Your deposit is refundable, less the Bank’s out of pocket expenses incurred, should the Bank decline the financing opportunity discussed herein. I look forward to hearing from you and working with you on this and other transactions. Sincerely, Brandon Butcher
Bank of America, N.A. Community Development Banking
Please submit a loan application as outlined above:
Name: _________________________________ Title: _________________________________ Date: _________________________________
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