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SUMMARY OF CURRENT ANTICIPATED PROJECT EXPENSES AND SOURCES
<br /> Funding Sources: Amount
<br /> City Loan $10,000,000
<br /> 9%Tax Credit Investor Proceeds" $32,337,998
<br /> Land Donation $9,620,000
<br /> ALCO Housing Trust (Boomerang) Fund $876,000
<br /> HOME $450,000
<br /> AHP $1,540,000
<br /> Permanent Loan $9,936,400
<br /> Pleasanton Gardens (phase 2 only) $300,000
<br /> Total Available Sources** $65,060,398
<br /> Expenses Amount
<br /> Land and Other Acquisition Costs $10,525,000
<br /> Hard Costs $45,221,435
<br /> City Permits and Impact Fees $2,356,232
<br /> Soft Cost $10,707,731
<br /> Total Expenses $68,810,398
<br /> * This funding is not yet obtained and is subject to competition as noted below and fluctuations subject to market conditions.
<br /> Int The difference between the Total Available Resources and the Total Expenses represents a funding gap of$3,750,000.
<br /> As indicated above, the most significant financing source Kottinger Gardens still needs
<br /> to secure is the 9% tax credits, which will cover 50-60% of its total development costs.
<br /> (In general, 9% tax credits differ from 4% tax credit programs in that they are
<br /> competitive, do not involve the issuance of tax exempt bonds and yield approximately
<br /> 2.5 times the amount of investor equity.) Created through the 1986 tax reform act, the
<br /> Low Income Housing Tax Credit program was designed to facilitate private investment
<br /> in affordable housing by offering tax credits to investors rather than a direct government
<br /> subsidy. Once a project receives a tax credit allocation through the competitive process
<br /> described in more detail below, the Tax Credits are then sold to an investor, typically
<br /> large corporations or banks who pay equity up front in exchange for a 10-year stream of
<br /> tax credits. (Also note that not all of the other financing sources for Phase II are secured
<br /> at this time, however, it is anticipated that they will be obtained through the normal
<br /> project funding process as was the case with Phase 1 and they are a much smaller
<br /> amount than the tax credits.)
<br /> The tax credits are issued by the IRS to each state and in California they are
<br /> administered by the California Tax Credit Allocation Committee (TCAC) which sets the
<br /> rules under which the credits are allocated. TCAC divides its credits into 12 geographic
<br /> regions. Kottinger Gardens will compete in the North/East Bay Region, which is one of
<br /> the largest regions and includes projects located in Alameda, Contra Costa, Solano,
<br /> Napa, Sonoma, and Mann Counties.
<br /> The 9% Tax Credits are allocated two times per year with applications due in March and
<br /> July. In the most recent application round, the amount of credits requested by projects
<br /> competing in the North/East Bay Region exceeded the amount of credits available by a
<br /> 3:1 ratio. Given that each application round is over-subscribed; the TCAC has
<br /> established a competitive process involving adherence to specific criteria and a grading
<br /> system that determines awards. Projects that apply generally have a perfect score that
<br /> is based on the project's proximity to local amenities such as parks, grocery stores,
<br /> pharmacies, libraries, and transit. In addition, projects must have all their local
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