ENTIRE PROJECT CASH FLOW

NPV Sensitivity Analysis

Base Case Scenario

OVERALL CASHFLOW ANALYSIS

Terminal Vacancy Rate

2006

2007

2008

2009

2010

Residential

($9,889,952)

$10,024,031

Retail

($1,567,168)

$99,917

$194,910

$217,778

$4,435,564

($11,457,119)

$10,123,948

$194,910

$217,778

$4,435,564

Total Cashflow

Overall NPV @10%

Overall IRR

Exit
Cap
Rate

$1,000,656
16.0%

###
7.50%
8.00%
8.50%
9.00%
9.50%
10.00%
10.50%
11.00%
11.50%

5.00%
$1,648,524
$1,354,829
$1,095,904
$865,543
$660,018
$473,741
$306,092
$153,967
$14,259

6.00%
$1,595,312
$1,304,721
$1,048,901
$821,023
$616,740
$432,947
$267,161
$116,277
$(21,567)

7.00%
$1,542,100
$1,254,613
$1,000,656
$775,883
$574,083
$392,774
$228,230
$79,209
$(57,394)

8.00%
$1,488,888
$1,204,506
$953,653
$730,122
$530,806
$351,360
$189,299
$41,520
$(93,220)

9.00%
$1,435,054
$1,154,398
$906,029
$685,602
$488,149
$310,566
$150,368
$3,831
$(129,046)

8.00%

9.00%

IRR Sensitivity Analysis

ASSUMPTIONS

Pesimistic

Base

Optimistic

Construction Cost

+5%

($22,542,297)

-5%

Interest Rate

7.00%

6.25%

6.00%

Exit

7.50%

19.3%

19.0%

18.8%

18.5%

18.3%

Selling Price of Market Rate Housing

-10%

$362.92

+10%

Cap

8.00%

17.9%

17.6%

17.4%

17.1%

16.8%

NNN Commercial Rental Rate

-10%

$30.12

+10%

Rate

8.50%

16.5%

16.3%

16.0%

15.8%

15.5%

9%

7%

5%

9.00%

15.3%

15.0%

14.8%

14.5%

14.3%

9.50%

8.50%

7.50%

9.50%

14.1%

13.9%

13.6%

13.4%

13.1%

($2,625,269)

$1,000,656

$4,692,463

10.00%

13.0%

12.8%

12.5%

12.3%

12.0%

-4.7%

16.0%

41.2%

10.50%

12.0%

11.8%

11.5%

11.3%

11.0%

11.00%

11.0%

10.8%

10.5%

10.3%

10.0%

11.50%

10.1%

9.9%

9.6%

9.4%

9.1%

Terminal Vacancy Rate

Exit Cap Rate for Commercial Rental
Overall NPV @10%
Overall IRR

Terminal Vacancy rate

Exit Cap rate

7.0%
8.5%

974313.79
0.17

Terminal Vacancy Rate

16.0%

5.00%

6.00%

7.00%

Residential ProForma
SUPPORTING CALCULATIONS & ASSUMPTIONS:
2006

2007

Inflation
3.0%
Base = January 1, 2006

$10,190,700

$10,024,031

REVENUE:

REVENUE:
Gross Sales Income

EXPENSES:
Residential Construction Costs
Preconstruction Holding Costs
Construction Financing Costs
Sales Financing Costs
Sales Commission / Closing Costs
Total Expenses
Gross Profit / (Loss)

Floor
($17,318,405)
($159,230)
($682,525)
($1,135,010)
($785,483)
($20,080,652)

$0
$0
$0
$0
$0
$0

($9,889,952)

$10,024,031

NPV
IRR

EXPENSES:
FINANCING:
Interest Rate
Pre-Construction Land Holding Duration (months)
Construction Duration (months)
Average Months To Sell
SALES COMMISSION / CLOSING COSTS:
Sales Commissions (%)
Closing Costs
Title - Recording

Discount Rate

(annualized forecast through 2007)

Cash flows assumed to occur on January 1 for the upcoming year.

Effective Area
(ft2)

# Units

Gross Sales
(2006 $)

Year Sold

Gross Sales
(inflationadjusted)

900.00
900.00
1,050.00
1,200.00
1,075.00
1,161.00
1,245.00

$113
$129
$340
$340
$340
$340
$340

$101,500
$116,000
$357,000
$408,000
$365,500
$394,740
$423,300

$0
$0
$0
$0
$0
$0
$0

1
1
2
2
1
1
2

$101,500
$116,000
$714,000
$816,000
$365,500
$394,740
$846,600

2006
2006
2006
2006
2006
2006
2006

$101,500
$116,000
$714,000
$816,000
$365,500
$394,740
$846,600

Fourth

11,026

900.00
900.00
1,050.00
1,200.00
1,075.00
1,161.00
1,245.00

$113
$350
$350
$350
$350
$350
$350

$101,500
$315,000
$367,500
$420,000
$376,250
$406,350
$435,750

$0
$35,000
$35,000
$35,000
$35,000
$35,000
$35,000

1
1
2
2
1
1
2

$101,500
$350,000
$805,000
$910,000
$411,250
$441,350
$941,500

2006
2006
2006
2006
2006
2006
2006

$101,500
$350,000
$805,000
$910,000
$411,250
$441,350
$941,500

Fifth

11,026

900.00
900.00
1,050.00
1,200.00
1,075.00
1,161.00
1,245.00

$113
$360
$360
$360
$360
$360
$360

$101,500
$324,000
$378,000
$432,000
$387,000
$417,960
$448,200

$0
$35,000
$35,000
$35,000
$35,000
$35,000
$35,000

1
1
2
2
1
1
2

$101,500
$359,000
$826,000
$934,000
$422,000
$452,960
$966,400

2007
2007
2007
2007
2007
2007
2007

$104,545
$369,770
$850,780
$962,020
$434,660
$466,549
$995,392

Sixth

11,026

900.00
900.00
1,050.00
1,200.00
1,075.00
1,161.00
1,245.00

$113
$370
$370
$370
$370
$370
$370

$101,500
$333,000
$388,500
$444,000
$397,750
$429,570
$460,650

$0
$35,000
$35,000
$35,000
$35,000
$35,000
$35,000

1
1
2
2
1
1
2

$101,500
$368,000
$847,000
$958,000
$432,750
$464,570
$991,300

2007
2007
2007
2007
2007
2007
2007

$104,545
$379,040
$872,410
$958,000
$432,750
$464,570
$991,300

Seventh

6,800

2,000.00
1,427.00
1,373.00

$380
$380
$380

$760,000
$542,260
$521,740

$35,000
$35,000
$35,000

2
1
1

$1,590,000
$577,260
$556,740

2007
2007
2007

$1,637,700
$594,578
$573,442

Eighth

6,800

2,000.00
1,427.00
1,373.00

$390
$390
$390

$780,000
$556,530
$535,470

$35,000
$35,000
$35,000

2
1
1

$1,630,000
$591,530
$570,470

2006
2006
2006

$1,678,900
$609,276
$587,584

10.0%
Total Condominium Sales

Pricing of Affordable Hosing Units

80% of Medean Income
Annuan at or Below
Purchase Price Limit

Sales Price per

Underground
Sales Price per Parking Spot (2006
Unit (2006 $)
$)

11,026

($706,542)
1.4%

($641,483)
($96,000)
($48,000)
($785,483)

Sales Price
per ft2
(2006 $)

Third

6.25%
3.0
12.0
12.0

3%
$2,000
$1,000

Area per Unit

(ft2)

Avg Price

Err:522

# Units

48

$21,382,751

Summary of Housing Unit Pricing

1 Person HH
$40,600
$46,400

2 Person HH
$101,500
$116,000

Units
Affordable
Market Rate
Total

%
5
43
48

10.4%
89.6%
100.0%

Sensitivity (Price)
Sensitivity (Interest)

0.00%

W/Parking
Total sqft
Total Revenues
Price/sqft
4,500
$522,000
$116.00
53,204
$20,533,920
$385.95
57,704
$21,055,920
$364.90

SOURCES FOR GREEN DATA INPUT CELLS:

Inflation - Based on trend analysis of past inflation data. As well, 3% is a common inflation forecast among economists.
Area per Unit (ft2) - Based on our research of our target market.
Sales Price per ft2 - Comparables.
Sales Price per Underground Parking Spot - Skylofts in Royal Oak, our benchmark, charges $19,900 for one spot; $15,000 is reasonable.
# Units - Based on our research of target market.
Year Sold - Peter Allen told our class to assume we sell all condo units within 18-24 months of beginning of project.
Interest Rate - Peter Allen in email to our group on 12/3/02.
Pre-Construction Land Holding Duration - Peter Allen in email to our group on 12/3/02.
Construction Duration - Peter Allen told our class to assume 12 months construction (including site development). Nine months equals 12 months minus 3 months
of pre-construction land holding duration.
Sales Commission (%) - Peter Allen in class on 11/4/02.
Closing Costs - Peter Allen in email to our group on 12/3/02.
Title - Recording - Peter Allen in email to our group on 12/3/02.
Discount Rate - Peter Allen in meeting with our group on 11/25/02.

16.03%
0.2
-3.97%

Price/Unit
$104,400
$477,533
$438,665

WO/Parking
Total Revenues
Price/sqft
$522,000
$116.00
$19,308,920
$362.92
$19,830,920
$343.67

Price/Unit
$104,400
$449,045
$413,144

Retail ProForma
RETAIL PROFORMA
2006
REVENUE:
Retail Rent
Vacancy
Reimbursed CAM
Gross Effective Rent

2007
$0
$0
$0
$0

OPERATING EXPENSES:
Gas & Electric
Water & Sewer
Insurance

$726,933
($218,080)
$136,405
$645,258

2008
$748,741
($74,874)
$140,497
$814,364

2009
$771,203
($53,984)
$144,712
$861,931

2010
$794,339
($55,604)
$149,054
$887,789

SUPPORTING CALCULATIONS & ASSUMPTIONS:

Inflation
Base = January 1, 2006

Store
Retail Stores (1st Floor)
Retail Stores (2nd floors)
Retail Stores (Total)

($4,308)
($5,743)
($8,615)

($1,479)
($5,916)
($8,874)

($1,066)
($6,093)
($9,140)

($1,098)
($6,276)
($9,414)

$0
$0
$0
$0
$0

($14,358)
($21,538)
($86,151)
($25,443)
($166,155)

($14,789)
($22,184)
($88,735)
($33,693)
($175,670)

($15,233)
($22,849)
($91,397)
($35,861)
($181,639)

($15,690)
($23,535)
($94,139)
($36,937)
($187,089)

Year
2007
2008
2009
2010

Net Operating Income

Less Debt Service

$0
$0

$479,103
($325,311)

$638,694
($325,311)

$680,292
($325,311)

$700,700
($325,311)

OPERATING EXPENSES:

Before Tax Cash Flow

Plus: Principal
Less: Depreciation
Taxable Income

$0
$0
$0
$0

$153,792
$96,765
($112,417)
$138,141

$313,384
$102,813
($112,417)
$303,780

$354,981
$109,239
($112,417)
$351,803

$375,390
$116,066
($112,417)
$379,039

$0
$0
$0
($1,567,168)
$0
($1,567,168)

($53,875)
$153,792
($53,875)
$0
$0
$99,917

($118,474)
$313,384
($118,474)
$0
$0
$194,910

($137,203)
$354,981
($137,203)
$0
$0
$217,778

($147,825)
$375,390
($147,825)
$0
$4,208,000
$4,435,564

9.8%
147%

20.0%
196%

22.7%
209%

24.0%
215%

CASH FLOW ANALYSIS:

Tax Savings (Burden)
Before Tax Cash Flow
Less: Income Tax
Equity Investment
Sales Proceeds (12/31/07)
Total Cash Flow
Return on Equity
Debt Service Coverage

NPV
IRR

(annualized forecast through 2010)

Cash flows assumed to occur on
January 1 for the upcoming year.

Retail Construction Cost

Retail Property Acquisition Cost (Land)

$5,223,892
$839,643

REVENUE

$0
$0
$0

Maintenance
Janitorial
Property Taxes
Management Fees
Total Operating Expenses

3.0%

Expense
Water & Sewer
Insurance
Maintenance
Janitorial
Property Taxes

Gas & Electric

2004
2005
2006
2007

Effective Area NNN Rent per ft2

(ft2)
(2006 $)
11,996
$35.00
11,436
$25.00
23,432
$30.12
Vacancy
Rate
30%
10%
7%
7%

Cost per ft2

(2006 $)
($0.21)
($0.32)
($0.53)
($0.80)
($3.18)
($5.04)

Retail Rent
(2006 $)
$419,860
$285,900
$705,760

Retail Rent
$726,933
$748,741
$771,203
$794,339

Vacancy
($218,080)
($74,874)
($53,984)
($55,604)

Total Area (ft2)

26,280
26,280
26,280
26,280
26,280

Expense
(2006 $)
($5,576)
($8,364)
($13,940)
($20,910)
($83,641)
($132,432)

Cost per ft2

($0.55)
($0.56)
($0.58)
($0.60)

Vacant Area (ft2)

7,884
2,628
1,840
1,840

Management Fees

5.0%

of Gross Effective Rent

Exit Capitalization Rate

8.5%

$1,707,199
35.9%
Sensitivity (Cap Rate)
Sensitivity (NNN Rent)
Sensitivity (Vacancy)

SOURCES FOR GREEN DATA INPUT CELLS:

NNN Rent per ft2 - Meeting with Peter Allen on March 9, 05 ($35/sqft for 1st foor and 25%/sqft for 2nd floor)
Vacancy Rates - 20% - Blue Hill East Lansing City Center ProForma, 7% - Peter Allen in meeting with our group on 11/25/02.
Gas & Electric - Peter Allen in meeting with our group on 11/25/02.
Water & Sewer - Peter Allen in meeting with our group on 11/25/02.
Insurance - Peter Allen in meeting with our group on 11/25/02.
Maintenance - Peter Allen in meeting with our group on 11/25/02.
Janitorial - Peter Allen in meeting with our group on 11/25/02.
Property Taxes - Peter Allen in class on 11/18/02.
Management Fees - Westown Center report from prior BA 517 class.
Land Cost as % of Acquisition Cost - Peter Allen in meeting with our group on 11/25/02.
Depreciation # of Years - Peter Allen in meeting with our group on 11/25/02.
Loan to Value - Peter Allen in Chapter 24 class notes.
Interest Rate - Peter Allen in class on 11/11/02.
Amortization Period - Peter Allen in class on 11/11/02.
Federal Long Term Capital Gain Tax Rate - "For "qualified 5-year gains' in 2006 or later from property with a holding period that begins after 2000."
H&R Block 2002 Publication 17. Confirmed by Denver Lowe, manager of H&R Block tax office in Fort Myers Beach, FL.
Federal Ordinary Income Tax Rate - Top rate in 2002 per H&R Block 2002 Publication 17.
Michigan Long Term Capital Gain Tax Rate - State of Michigan 2001 Form 1040.
Michigan Ordinary Income Tax Rate - State of Michigan 2001 Form 1040.
Exit Capitalization Rate - Peter Allen in meeting with our group on 11/25/02.

0%
0%
0%

Expense
($4,308)
($1,479)
($1,066)
($1,098)

DEPRECIATION:
# Years
Depreciation Base
Depreciation/Year (straight line)

39
$4,384,250
$112,417

FINANCING:
Loan to Value
Total Debt
Interest Rate
Amortization Period
Annual Payment
Total Equity

70%
$3,656,724
6.25%
20
$325,311
$1,567,168

TAX RATES:
Federal Long Term Capital Gain (5+ years)
Federal Ordinary Income
Michigan Long Term Capital Gain
Michigan Ordinary Income

15.0%
35.0%
4.0%
4.0%

GAIN ON SALE:
Selling price
Less: Book Value of Property
Less: Sales Fees (5%)
Plus: Depreciation
Taxable Gain
Capital Gain Tax

$8,491,000
($5,223,892)
($425,000)
$450,000
$3,292,108
($626,000)

Sales Proceeds
Loan Payoff
Capital Gain Tax
Cash Flow

$8,066,000
($3,232,000)
($626,000)
$4,208,000

Sourse and Use Analysis (Construction Loan)

Sourse and Use Analysis (Permanent Loan)

Source
Equity Investors
Construction Loan
TIF Financing
Total Sources

$6,595,229
$15,388,868
$558,200
$22,542,297

Source
Equity Investors
Permanent Loan
TIF Financing
Total Sources

Use
Total Construction
Total Uses

($22,542,297)
($22,542,297)

Use
Retail Construction
Total Uses

$1,567,168
$3,656,724
N/A
$5,223,892

($5,223,892)
($5,223,892)

Construction Costs
CONSTRUCTION COSTS (EACH SEGMENT)
Total
TOTAL AREA (ft2)

PROPERTY ACQUISITION COST:

Original Property
Additional Land (Neighboorhood)
Closing Costs for Additional Land
Total Property Acquisition Costs
HARD COST:
General Construction
Site Preparation
Building
Landscaping
Tenant Improvements
Retail
Residential
Underground Parking
Contractor Fees
Hard Cost Contingency
Total Hard Costs
SOFT COST:
Survey
Soil Investigation
Architectural Fees
Environmental
Legal Fees
Insurance
Permits & Fees
Closing Costs
Developer Fee
Advertising
Leasing Commissions
Soft Cost Contingency
Total Soft Costs
TAX INCREMENT FINANCING:

CONSTRUCTION COST:

93,678

26,280
28%

67,398
72%

($1,760,000)
($1,200,000)
($33,000)
($2,993,000)

($493,742)
($336,643)
($9,258)
($839,643)

($1,266,258)
($863,357)
($23,742)
($2,153,357)

SUPPORTING CALCULATIONS & ASSUMPTIONS:

Inflation
Base = January 1, 2003
PROPERTY ACQUISITION COST:
Purchase Liberty Land

3.0%

(annualized forecast through 2007)

2003 cash flows assumed to occur on January 1, 2003.

($1,760,000) Cash paid in January 2005. Assuming required rate of return is 10%
($1,200,000) Additional Cash Paid to acquire neighboorhoods
($2,960,000) Total Land Acquisition Costs
SOURCE:
Interviewed from Dale Bell.

($491,500)
($12,199,203)
($262,500)

($137,883)
($2,649,182)
($73,641)

($353,617)
($9,550,021)
($188,859)

($585,800)
($1,442,600)
($1,225,000)
($810,330)
($810,330)
($17,827,263)

($585,800)
$0
$0
($227,326)
($227,326)
($3,901,158)

$0
($1,442,600)
($1,225,000)
($583,004)
($583,004)
($13,926,105)

($7,500)
($15,000)
($891,363)
($7,000)
($22,284)
($17,827)
($119,497)
($203,963)
($810,330)
($50,000)
($28,230)
($107,238)
($2,280,233)

($2,104)
($4,208)
($250,059)
($1,964)
($6,251)
($5,001)
($33,523)
($57,219)
($227,326)
($14,027)
($7,920)
($30,084)
($639,686)

($5,396)
($10,792)
($641,304)
($5,036)
($16,033)
($12,826)
($85,974)
($146,744)
($583,004)
($35,973)
($20,311)
($77,154)
($1,640,547)

$558,200

$156,595

$401,605

($22,542,297)

($5,223,892)

($17,318,405)

Total
Total Area (ft2)
Property Acquisition Cost per ft2
Hard Cost per ft2
Soft Cost per ft2
Tax Increment Financing per ft2
Construction Cost per ft2 (w/o TIF)
Construction Cost per ft2 (w/ TIF)

2006 Cash Flows

Retail
Residential

Cost per ft2 Summary

Retail
Residential

93,678
($32)
($190)
($24)
$6
($247)
($241)

SensitivityAnalysis
16.03%
0.2
3.97%

26,280
($32)
($148)
($24)
$6
($205)
($199)

67,398
($32)
($207)
($24)
$6
($263)
($257)

Closing Costs
Origination Fee (1 point)
Appraisal
Survey
Title
Recording Fee
Insurance
Closing Costs

($12,000)
($5,000)
($5,000)
($4,000)
($2,000)
($5,000)
($33,000)

SOURCES FOR GREEN DATA INPUT CELLS:

Origination Fee (1 point) - Cost of additional land multiplied by 1%. From Old YMCA project.
Appraisal - From Old YMCA project.
Survey - From Old YMCA project.
Title - From Old YMCA project.
Recording Fee - From Old YMCA project.
Insurance - From Old YMCA project.

Construction Costs
CONSTRUCTION COSTS (TOTAL HARD & SOFT COSTS)
SUPPORTING CALCULATIONS & ASSUMPTIONS: (continued)
HARD COST:
General Construction
Paving
Demolition
Cleaning
Underground utilities
Site Preparation
Residential
Retail
Building
Landscaping
Tenant Improvement Allowance
Retail
Residential

Parking Spots

Contractor Fees
Hard Cost Contingency

SOFT COST:
Survey
Soil Investigation
Architectural/Engineering Fees
Environmental
Legal Fees
Insurance
Permits & Fees
Loan Fee
Appraisal
Title
Recording Fee
Closing Costs
Developer Fee
Advertising
Leasing Commissions
Soft Cost Contingency

Total Area (ft2)

Cost per ft2

(2006 $)

Total Cost
(2006 $)

1,660
N/A
N/A
N/A
N/A
67,398
26,280
93,678
5,250

$25.00
N/A
N/A
N/A
N/A
$141.70
$100.81
$130.22
$50.00

($41,500)
($50,000)
($50,000)
($350,000)
($491,500)
($9,550,021)
($2,649,182)
($12,199,203)
($262,500)

23,432
57,704

$25.00
$25.00

($585,800)
($1,442,600)

Total Units
35
5.00%
5.00%

Percent of
Total Hard
Costs
N/A
N/A
5.00%
N/A
0.125%
0.10%
N/A
2.00%
N/A
0.25%
N/A
N/A
5.00%
N/A
4.00%
5.00%

Cost per Unit Total Cost

(2006 $)
(2006 $)
$35,000.00
($1,225,000)
($810,330)
($810,330)

Total Cost
(2006 $)
($7,500)
($15,000)
($891,363)
($7,000)
($22,284)
($17,827)
($119,497)
($194,363)
($6,000)
($3,000)
($600)
($203,963)
($810,330)
($50,000)
($28,230)
($107,238)

SOURCES FOR GREEN DATA INPUT CELLS:

Demolition - Estiated by Jeorge Gomar and confirmed by Peter Allen on 4/10/04
Clearing - Estiated by Jeorge Gomar and confirmed by Peter Allen on 4/10/04
Underground Utilities - Estiated by Jeorge Gomar and confirmed by Peter Allen on 4/10/04.
Building Cost per ft2 - Based on Construction Estimate Worksheet
Landscaping - Estiated by Jeorge Gomar and confirmed by Peter Allen on 4/10/04
Tenant Improvements Cost per ft2, Retail - Conversation with Peter Allen on 11/18/02.
Tenant Improvements Cost per ft2, Residential - Conversation with Peter Allen on 11/18/02.
Underground Parking - $35,000 per spot confirmed by Peter Allen on 4/10/04
Contractor Fees - Confirmed by Peter Allen on 4/10/04
Hard Cost Contingency - Confirmed by Peter Allen on 4/10/04

SOURCES FOR GREEN DATA INPUT CELLS:

Survey - Estiated by Jeorge Gomar.
Soil Investigation - Estiated by Jeorge Gomar.
Architectural Fees - Confirmed by Peter Allen on 4/10/04
Environmental - Confirmed by Peter Allen on 4/10/04
Legal Fees - Confirmed by Peter Allen on 4/10/04
Insurance - Confirmed by Peter Allen on 4/10/04
Permits & Fees - Peter Allen in email to our group on 12/3/02.
Loan Fee - 1% Construction Loan + 1% Permanent Loan
Appraisal - Confirmed by Peter Allen on 4/10/04
Survey - Confirmed by Peter Allen on 4/10/04
Title - Confirmed by Peter Allen on 4/10/04
Recording Fee - Confirmed by Peter Allen on 4/10/04
Developer Fee - 5% of General Construction, Tenant Improvement, & Underground Parking Costs.
Confirmed by Peter Allen on 4/10/04.
Advertising - Confirmed by Peter Allen on 4/10/04.
Leasing Commissions - Confirmed by Peter Allen on 4/10/04.
Soft Cost Contingency - Confirmed by Peter Allen on 4/10/04.

Construction Estimate Spreadsheet (HARD COST ESTIMATE)

Property Location:

Liberty and Division

Approximate Parcel Size:

160 Length (FT)

Ann Arbor Cost Modifier:

106

100 Width (FT)

Development Data (User Input)

Total SF

Condos / Apartments (Low Rise 1 to 3 Stories)

Condos / Apartments (Mid Rise 4 to 7 Stories)
Condos / Apartments (High Rise 8 to 24 Stories)
Public Housing (Low Rise 1 to 3 Stories)
Public Housing (Mid Rise 4 to 7 Stories)
Offices (Low Rise 1 to 4 Stories)
Offices (Mid Rise 5 to 10 Stories)
Offices (High Rise 11 to 20 Stories)
Hotel / Inn (57,000 SF to 150,000 SF Total Area)
Hotel / Inn (Over 150,000 SF Total Area)
Community Centers / Health Clubs (Minimum 30,000 SF)
Department Stores
Retail Stores (Individual)
Resturants
Banks
Greenspace (Landscpaing)
Hard Scape (Landscaping)
Green Roof Areas
Parking Decks (Under 150,000 SF Total Area / Above Grade)
Parking Decks (Under 150,000 SF Total Area / Below Grade)
Parking Decks (Over 150,000 SF Total Area / Above Grade)
Parking Decks (Over 150,000 SF Total Area / Below Grade)

Residential Unit for 3rd floor

Residential Unit for 4th-7th floor
Penthouse
Affordable Housing Units
Affordable Housing Units

Retail First & Second Floor Retail Ready (Flex Space)

106,818 SF
667.6%

Base
Cost / SF

Base Cost of Construction Estimate - No Site Work

Condos / Apartments (Low Rise 1 to 3 Stories)
Condos / Apartments (Mid Rise 4 to 7 Stories)
Condos / Apartments (High Rise 8 to 24 Stories)
Public Housing (Low Rise 1 to 3 Stories)
Public Housing (Mid Rise 4 to 7 Stories)
Offices (Low Rise 1 to 4 Stories)
Offices (Mid Rise 5 to 10 Stories)
Offices (High Rise 11 to 20 Stories)
Hotel / Inn (57,000 SF to 150,000 SF Total Area)
Hotel / Inn (Over 150,000 SF Total Area)
Community Centers / Health Clubs
Department Stores
Retail Stores (Individual)
Resturants
Banks
Greenspace (Landscpaing)
Hard Scape (Landscaping)
Green Roof Areas
Parking Decks (Under 150,000 SF Total Area / Above Grade)
Parking Decks (Under 150,000 SF Total Area / Below Grade)
Parking Decks (Over 150,000 SF Total Area / Above Grade)
Parking Decks (Over 150,000 SF Total Area / Below Grade)

Final Cost of Construction Estimate

Total Base Cost of Construction Estimate
Paving for Service Drive and Surface Parking
Landscape
Demolishion
Cleaning
Utilities - Upgrading Water & Underground Electric
Subotal - Hard Construction Costs

Development Description

13,140 SF
39,420 SF
14,838 SF
SF
SF
SF
SF
SF
SF
SF
SF
SF
26,280 SF
SF
SF
SF
SF
SF
SF
13,140 SF
SF
SF

Total Development Area

Floor Area Ratio

Base Construction Cost Estimate

16,000 Area (SF)

93,678

$77.65
$87.77
$102.85
$83.75
$99.60
$94.40
$117.99
$108.21
$114.35
$126.45
$155.50
$75.55
$79.25
$142.18
$167.38
$2.65
$10.25
$12.15
$48.50
$68.85
$41.40
$62.17

Base Cost

Upgrade %
Applied

$1,081,540
$3,667,487
$1,617,654
$$$$$$$$$$2,207,651
$$$$$$$958,970
$$$9,533,303

====================================>
====================================>
====================================>
====================================>
====================================>

1.50
1.50
1.50
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.00
1.20
1.10
1.00
1.00
1.00
1.00
1.00
1.20
1.00
1.00

Total
Base Cost
$1,622,310
$5,501,231
$2,426,480
$$$$$$$$$$2,649,182
$$$$$$$1,150,764
$$-

Cost / SF
Dev. Type

Cost / SF
Total

$123.46
$139.55
$163.53
NA
NA
NA
NA
NA
NA
NA
NA
NA
$100.81
NA
NA
NA
NA
NA
NA
$87.58
NA
NA

$15.19
$51.50
$22.72
$$$$$$$$$$24.80
$$$$$$$10.77
$$-

$13,349,967

$13,349,967
$41,500
$262,500
$50,000
$50,000
$350,000
$14,103,967

$124.98

$124.98
$0.39
$2.46
$0.47
$0.47
$3.28
$132.04

per SF Total
per SF Total
per SF Total
per SF Total
per SF Total
per SF Total
per SF Total

$25/sf x 40 ft x 150 ft
$50/sf x 15 ft x (150 ft + 100ft x 2)

Tax Increment Financing

Calculation of TIF (TAX Incremental Financing) Money Captured
Total Construction Cost
($23,100,497)
Property Tax Rate
2.50%
Interest Rate
Property Taxes (2006 $)
($577,512)
Amotization
Present Value
Breakdown of Property Taxes
Payment/yr
School Portion (55%)
($317,632)
Mortgage Constant
DDA Portion (45%)
($259,881)

4.5%
15
1,000
($93)
9.3%

Present Value of School Portion of Property Taxes for 15 Years

Today through Year 15
$3,411,222

Present Value of Non-School Portion of Property Taxes for 15 Years

Today through Year 15
$2,790,999

Present Value of Total Property Taxes for 25 Years

Today through Year 15
$6,202,221

Economic Development Loan

$2,790,999 Total Value of TIF

$491,500
$262,500
$754,000
$558,200

20.0%
16.03%
0.2
-3.97%

Site Preparation
Landscaping
Total Value of TIF Money can be required by Developer
Maximum Fund Available from TIF (20% total TIF)

SOURCES FOR GREEN DATA INPUT CELLS:

Property Tax Rate - Peter Allen in class on 3/9/05.
Interest Rate - Peter Allen in class on 3/9/05.
Period - Peter Allen in class on 3/9/05.
Maximum Amount - Accdording to Peter Allen,
comparable development in Ann Arbor could recieve
16-20% of total Value of TIF

Floorspace
Floor

Use

Total Area (ft2)

First
Retail
13,140
Second
Retail
13,140
Third
Residential
13,140
Market Rate Housing (8 units)
10,995
Affordable Housing (2 units)
2,145
Fourth
Residential
13,140
Market Rate Housing (9 units)
12,067
Affordable Housing (1 unit)
1,073
Fifth
Residential
13,140
Market Rate Housing (9 units)
12,067
Affordable Housing (1 unit)
1,073
Sixth
Residential
13,140
Market Rate Housing (9 units)
12,067
Affordable Housing (1 unit)
1,073
Seventh
Residential (Penthouse)
7,419
Eighth
Residential (Penthouse)
7,419
Entire Building
93,678
Note: Not including Underground Parking Area (13,140 sq. ft. for 35 units)

SOURCE:
Common Area (ft2) - Based on our floor design.

Common Area (ft2)

2,628
1,971
2,114
1,769
345
2,114
1,941
173
2,114
1,941
173
2,114
1,941
173
619
619
14,293

Effective Area (ft2)

11,996
11,436
11,026
9,226
1,800
11,026
10,126
900
11,026
10,126
900
11,026
10,126
900
6,800
6,800
81,136

Effectiveness Ratio
91.3%
87.0%
83.9%
83.9%
83.9%
83.9%
83.9%
83.9%
83.9%
83.9%
83.9%
83.9%
83.9%
83.9%
91.7%
91.7%
86.6%

Project Timeline
ACTIVITY

Q1

2006
Q2
Q3

Q4

Q1

2007
Q2
Q3

Q4

Acquire Additional Properties

Site Preparation
Building
Tenant Improvement Allowance
Landscaping
Residential Units Sales

Pre-sale Period

After Construction Sale

Retail Tenants Move In

Residential Owners Move In
Operate as Retail Landlord
Sell Retail Property

SOURCE: Need to Clarify

Peter Allen told our group to assume:
* Construction takes one year.
* 18 to 24 months to sell all condo units.
* 24 months to get retail occupancy up to steadystate.
* Sell retail property after operating for 3 to 4 years.
We assume 4 years and sell on 12/31/07.

Q1

2008
Q2 Q3

Q4

Q1

2009
Q2 Q3

Q4

Q1

2010
Q2 Q3

Q4