putting rad to work - chapa home rad presentation- final.pdfrad + mtw the cha was able to reduce the...
TRANSCRIPT
Putting RAD to Work
Cambridge Housing Authority December 2015
RAD | Substantial Capital Needs v 2006 Capital Needs Study and Planning Process
$228M for 2469 federal units -- $93,940/unit (hard costs only) v 2009 ARRA Funding -- $28M
Revitalization of 292 units, or 12% of federal portfolio
RAD | Phasing Plan
PutnamGardens(LIHTC) 122 ScatteredFamiliesSites 123LBJApartments 177 TrumanApartments(LIHTC) 59JacksonGardens 45 RussellApartments(LIHTC) 51LincolnWay 53 Subtotal 233JFKApartments 44Subtotal 441
RooseveltTowers(LIHTC) 124CorcoranPark(LIHTC) 153
NewtowneCourt(LIHTC) 268 BurnsApartments(LIHTC) 198WashingtonElms(LIHTC) 175 Subtotal 475WoodrowWilson(LIHTC) 68Subtotal 511
JeffersonPark(LIHTC) 175SmallElderlyDevts 97
ManningApartments(LIHTC) 198 Subtotal 272Subtotal 198
TotalPhase1 1150 TotalPhase2 980
Phase1C-Feb2015
Phase2C-June2017
Phase1-1150Units
Phase1A-December2014
Phase2-980Units(tentative)
Phase2A-Oct2016
Phase1B-March2015
Phase2B-Jan2017
Phasing Considerations v Use and availability of tax credits –
will likely need to spread over multiple years to accommodate tax credit rounds
v Complexity of financing structure – tax credits and multiple funding sources and programs require significant time and due diligence.
v Resident relocation – need to make
sure sufficient resources are available for relocation and wait list
v Extent of renovations – if extensive and occurring at occupied sites then extended construction and disruptions could be factors
v Capacity to complete due diligence and monitor construction work – need to make sure funds are spent wisely and the public and your resident’s interest are protected
CHA is phasing its RAD conversions as follows:
RAD + MTW WOODROWWILSONCOURT–68unitfamilysite
AnnualRADIncome $648,558
AnnualMTWSubsidy $79,000
AnnualIncome $727,558
AnnualExpense $538,324
NetOpera)ngIncome(NOI) $189,234
SupportableMortgagefromNOI $2,447,900
LIHTC4% $3,984,307
TotalSources $6,432,207
ConstrucQon $2,974,946
SoRCosts $2,747,261
Reserves/ConQngency $710,000
TotalUses $6,432,207
Surplus/(ShorEall) $0
For Woodrow Wilson Court, CHA was able to reduce the $602,330 shortfall that existed in the RAD 2012 model by adding $79,000 in annual income (or approximately $97 PUM) through the single fund flexibility afforded under MTW.
RAD + MTW
The CHA was able to reduce the $18,469,073 shortfall that existed in the RAD 2012 model by adding income through:
§ Rent bundling from four other CHA properties § A MTW subsidy equal to $334 PUM.
An additional loan of $5.35M using MTW funds from the acquisition proceeds from other sites was the final piece to meeting Manning needs.
MANNINGAPTS–198unitelderly/disabledsite
AnnualRADIncome $2,072,444
AnnualIncome–RentBundling $419,562
AnnualMTWSubsidy $794,651
AnnualIncome(=to110%FMR) $3,089,519
AnnualExpense $1,572,630
NetOpera)ngIncome(NOI) $1,516,889
SupportableMortgagefromNOI $19,622,800
LIHTC4% $23,915,965
CHAProgramLoan $5,335,073
TotalSources $48,873,838
ConstrucQon $32,975,000
SoRCosts $10,851,456
Reserves/ConQngency $5,047,382
TotalUses $48,873,838
Surplus/(ShorEall) $0
RAD| Resident Protections Protections for CHA and its Residents within RAD LIHTC Ownership Structure
v Operating and Management Agreements for Limited Liability Company (LLC) • CHA, through one of its non‐profits, will be responsible for the day‐to‐day operation of the LLC • CHA will be the management agent for the property and will be responsible for the management and
maintenance of the property v Right of First Refusal and Purchase Option Agreement • Provides a first refusal/purchase option for the property to be purchased by CHA or one of
its affiliated non‐profits at the end of the LIHTC compliance period. v Financial Support in the form of CHA Mortgages
v Long-term Lease to LLC Entity • CHA keeps long‐term control of the land and/or buildings through a long‐term lease to the
LLC Entity
v Affordability Restrictions • The RAD Use Agreement, ground lease and CHA mortgages includes provisions that the
property be operating as affordable housing in accordance to the RAD Program requirements and continue to serve low‐income individuals and families.
RAD| Ownership Structure
RAD| Final Thoughts SOME TAKE AWAYS
v Engage your residents and the wider community early and often. Involve residents in the planning and implementation to integrate their concerns and issues into the plans and work where possible.
v Whenever possible, fund pre-development activities so you have a solid, clear road map for your
portfolio/agency’s future. v Look at your portfolio as a whole and identify opportunities to leverage or liberate the assets within
your mission. Be bold and creative. v Streamline wherever possible – look for administrative efficiencies in your operation and
development activities.
v Plan for the future – make sure the rehab work that you complete addresses any design deficiencies and marketability issues and uses durable finishes.