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Home My WebLink AboutE.2. Timber Ridge Apts Impact Fee Request City of Bozeman Low Income Housing Tax Credit Request for Support Project Name: Timber Ridge Apartments, LP Developer(s): Summit Housing Group, Inc., HRDC Non‐profit partner (if applicable): HRDC Project Address: TBD Tschache Lane – at the corner of Thomas Drive and Tschache Lane Number of Buildings: I residential Number of Units: 32 ‐Senior Amount of Credits being requested: $677,500 Affordability Period: 45 years Proposed Unit Mix: # baths # at 30% AMI or less # at 40% AMI or less # at 50% AMI or less # at 60% AMI or less Studio 1BR 1 bath 2 13 5 2BR 2 bath 2 7 3 TOTAL at rent level TOTAL # of Units 4 20 8 Proposed Rents: 30% AMI or less 40% AMI or less 50% AMI or less 60% AMI or less Studio 1BR 442 575 708 2BR 518 677 837 Narrative responses Provide a brief description of the proposed project. Include information regarding project location, number of units, type of units, development/unit amenities and any other information you would like the city to consider. Timber Ridge Apartments Project Information Timber Ridge Apartments is located at the eastern half of Lot 5 Block 8, West Winds Major Subdivision, Phases 2A and 2B, Plat J-445 which is at the corner of Thomas Drive and Tschache Lane. The site, which is already owned by Summit Housing Group, Inc. is currently vacant but does have all utilities and infrastructure in place. With the infrastructure and flat topography of the site, construction of proposed development will be cost effective. Additionally, the site is already zoned R-3 for multifamily and under the PUD and conditional use permit for the West Winds Major subdivision the site has been specifically set aside for the development of affordable housing. All units will target Bozeman families and will consist of thirty (20) one bedroom units at 750SF and eighteen (12) two bedroom units at 950SF. The community will also contain a 1200SF community room which will include an office, computer room. The site is located less than half a mile from 19th Avenue which has multiple desirable services and off site amenities for the resident in our community. These include:  Smith Food and Drugs  Streamiline Bus Stop  Lowe's and Home Depot  Access to several convenience stores  Access to numerous retail stores  Access to numerous banking centers  Timber Ridge  Sage Learning Center  US Post Office Indoor Amenities Amenities are those elements in a home that are not essential but are provided to increase the efficiency, comfort, or aesthetic appearance of the apartment s. Specific amenities include:  High efficiency windows  High quality flooring in living spaces and hallways  Carpeting in all bedrooms  ENERGY STAR Washer in each unit  Dryer in each unit  ENERGY STAR lighting  ENERGY STAR appliances  Low-Flow shower heads and toilet fixtures  Energy efficient HVAC systems  Handicap accessible units Additional Amenities As you walk through the site you will find indoor and outdoor amenities that will provide entertainment in a safe, secure, natural environment. Please see additional amenities below: Outdoor Areas  Picnic areas with Pavilions with gazebos  Playground  Community Garden Community Amenities  Computer room with high speed internet  Community room In our conceptual plan we believe the project presents a rich communal environment that celebrate the moments of arrival, the transitions from collective activity to privacy, and the discovery of common interest and chance encounters. The encouragement of social interaction and sense of place are achieved through architecture, site layout and interior and exterior amenities. Financing Summit Housing Group, Inc.’s finance team will be directly involved with the financing for the project from inception. The finance team will be responsible for all financial analysis and coordination with the lender and equity investors, and the development team to determine the most effective financing plan for this project. Our finance team will update and sensitize project finance models so that as market conditions change, decisions can be made to adjust our plan accordingly. To this end, the financing team will negotiate all business points, terms and guarantees for the financing approach and will also provide the required due diligence to bring the project to closing. Once the project is closed and construction commences, the financing team will remain involved throughout the construction period. The finance team will work with the development team to monitor construction progress and construction draws and will interface with lenders and equity providers to ensure that funding occurs as needed keeping the project moving forward. Financial Assumptions  Approximately $4,221,648 in hard construction costs with $211,082 in Contingency  Total annual operating expenses = $141,180 of which $11,765 or $300/unit is replacement reserve  The property will cover all resident water, sewer and waste disposal expenses  We will have a manager at our Stoneridge Apartments. Operations would also include a maintenance employee.  Financing assumes $5,690,431 in Tax Credit Equity, a $4,900,000 construction loan, a $923,000 permanent loan and $2574 Deferred Developer Fee.  Federal Tax Credit Price of $0.84 per credit  Rent and expense growth rates are underwritten and 2% and 3 % respectively  7% vacancy rate Describe how the proposed project meets or exceeds the Green Building standards outlined in Appendix C of the City of Bozeman Affordable Housing Action Plan. Sustainable Design Sustainable design practices are utilized on all of Summit Housing Groups, Inc.’s new communities. Whether our design calls for certain building materials, building components, building systems or even the building locations, we strive to utilize new technologies and building practices to ensure our communities have little impact on the environment. These sustainable building practices also create long term financial benefits for residents and the community as a whole. Our design will incorporate the following sustainable design and construction standards: All appliances and equipment will reduce energy consumption by installing only EnergyStar products. All lighting fixture will also be EnergyStar product and will have either compact florescent or other high- efficiency bulbs. Water heaters will carry an efficiency rating of .93 or better will be well-insulated to reduce heat loss. Water conservation devices will be installed through the community and will meet the following standards:  Showerheads — 3.0 gpm (gallons per minute) or less  Kitchen and bathroom faucets — 2.75 gpm or less  Toilets – 1.6 gallon per flush or less Additionally the insulation of all hot water supply and heating pipes will carry an R-3 value or higher. Seal all exposed hot air duct joints and add insulating wraps with an R-3 value or higher. Our design will assure good indoor air quality by designing our community using the following Green Building Standards:  Provide local mechanical exhaust ventilation to the outdoors in each bathroom and kitchen.  In addition, all bathroom ventilation fans shall be ENERGY STAR qualified unless multiple bathrooms are exhausted with a multi-port fan.  Conventional clothes dryers shall be vented to the outdoors. Electric condensing dryers are  not vented and shall be plumbed to a drain according to the manufacturer’s instructions. Value Engineering Strategy Our Construction Management Team will endeavor to create value engineering options to further increase project cost savings that can be utilized toward project enhancements and site amenities without compromising the quality of the development. This effort will require a design/build approach during the early stages of the construction plans and specifications with the architect, engineers and general contractor. Construction Phase Beyond the design phase and permitting, we will hold construction meetings that will include the Owner, Architect and Contractor (OAC). OAC meetings are held monthly. OAC meetings are an open forum for all field observations, requests for information, change order review, value engineering, material selections, trouble-shooting and interaction with all respective disciplines to achieve maximum efficiency during construction. Summit Housing Group, Inc. and the general contractor will utilize the OAC meeting as a tool to further enhance the construction process and maintain scheduled milestones. During the Construction Phase we will also coordinate the following meetings with our Development Team:  Manage monthly OAC meetings  Coordinate bank inspector reviews during construction  Conduct construction testing (i.e. concrete, soil, asphalt)  Coordinate with local building inspectors  Sustainable design meetings Asset Management The finance team will act as asset manager during lease-up until stabilization is achieved. We will organize the necessary documents to obtain cost certification and 8609 completion and convert the construction loan to permanent financing. Additionally during this time period, the financing team will interface with property management to prepare an appropriate management plan for the project including pre-leasing and lease-up goals along with the marketing and lease-up budgets to support the overall plan. Summit Housing Group, Inc. has formed a team of firms that are experts in their fields. Each of our partners has strong experience and relationships on a variety of projects resulting in a partnership that understands how its members work, what they require and how to ensure deadlines are met. This team is committed to the success of this project. Explain how the proposed project is in support of the City of Bozeman’s Affordable Housing plan and serves a target income group identified by the plan. The City of Bozeman’s affordable housing plan looks to increase and preserve the supply of affordable housing by building 200 affordable family rental units between 2012 and 2016. This community would add 42 senior units to Bozeman a on a site that is already designated for affordable housing. Over the last 10 years the following transactions Low Income Housing Tax Credit developments have been awarded by the Montana Board of Housing: 1. 2004 Bridger Apartments 46 2. 2005 Baxter Apartments 48 3. 2012 Haggerty Lane Apartments 11 4. 2015 Stoneridge Apartments 48 5. 2016 Larkspur Commons (4% credit) 136 The following are the guiding principles for the City of Bozeman’s Affordable Housing Plan: All residents should have access to decent and affordable housing. Timber Ridge Apartments will provide residents with quality, safe, and decent housing at rates that are and will continue to be affordable. Successful delivery of affordable housing should not be measured only by sale prices and rents, but its performance in terms of minimizing energy use and maintenance costs. Summit Housing Group, Inc. uses sustainable design and high quality building products to ensure that residents and our communities as a whole minimize energy use and reduce ongoing maintenance cost. There is no single home price or rent benchmark that defines “affordable” housing.” Timber Ridge Apartments will provide units to Bozeman families that have an income level of 40%, 50% and 60% of the Area Median Income. The Low Income Housing Tax Credit Program does have guidelines and maximum rent levels that are based on the resident’s income level. When setting our rents we take into consideration not only the LIHTC Program maximum rent level, but also research the market place to ensure our rents can be obtained. Timber Ridge Apartments has an 23% market advantage over the current market rate rents. Affordability for residents of various incomes levels should be based on ability to pay, since affordability is a function of both housing costs and income. Similarly to the answer above our rent levels are not only set by LIHTC maximum rent levels but also consider what residents from specific income levels are able to pay for rent. Additionally, our sustainable design does help the financial burden considerably for our residents. The solutions to providing affordable housing should involve using diverse approaches and mechanisms. Summit Housing Group, Inc. continually looks to better the lives of our residents by looking at our past developments and studying areas that we could improve our design, and become more cost efficient, which in turn provides a better quality of housing and amenities for our residents. Sustainable design, efficient use of land and innovative building practices are the key to providing quality affordable housing. Availability of housing for residents of all income levels is essential for attracting and retaining the employers that provide the jobs that are essential to the community’s prosperity. Summit Housing Group, Inc. could not agree more and are dedicated to providing quality housing at affordable rents to each community we develop an apartment complex. Timber Ridge Apartments will provide this quality housing. Economic viability is the lifeblood of any successful community and employment is one of the keys to growth and maintaining the community’s economic viability. Economic growth can be measured in part by the number of additional jobs created within a community. In the initial construction phases, Summit Housing Group, Inc. will create countless jobs as subcontractors construct the apartment complex. After completion, ongoing employment will be created through the operational phase of the developments. The ongoing operations from the developments will create jobs such as property managers, assistant property managers, maintenance staff, extermination, cleaning services, and repair contractors. Provision of Community and Supportive Services Programs benefiting residents with families: Through our partnership with HRDC, our residents will receive a tailored social service plan to address specific social issues within our community. These services will empower residents, nurture family values, facilitate community partnerships, and foster a supportive environment that cultivates economic growth and stability. This service plan will advocate self-sufficiency by offering social, economic, and educational services to residents that will aid them in unlocking their potential for growth and prosperity. Some of the programs Summit Housing Group, Inc. has utilized in the past are: Adult Literacy; Computer Classes; English/Spanish instruction; GED preparation; Job Training/Preparation; Budgeting; Communication Skills; Conflict Resolution; Fire and Personal Safety Awareness; Substance Abuse; Tax Assistance; and Time and Stress Management. How will your firm ensure that the long-term management of the project will 1) provide adequate funding for project sustainability, and 2) be responsive to the needs of low-income residents? Summit Housing Group, Inc.’s internal underwriting standards are constantly adjusting to the market place based on tax credit pricing, interest rates, operational cost and construction cost. Since we own and manage all 832 of our units, we have the benefit of having detailed historical information on development cost and operational cost. This information allows us to accurately budget our development cost but also us to conservatively set our operational budget and permanent debt amount so that the community will have continued financial health. The Montana Board of Housing and our Equity partners in the transaction will require both replacement reserves and operating deficit reserves. Timber Ridge Apartments, LP will accrue $300 per unit or $11,765 for replacement reserves annually and will be used to replace any broken or damaged building components. This reserve is in addition to the $719 per unit or $23,000 we budget annually for general repairs and maintenance. The operating deficit reserve consists of four months of operating expense, debt service and replacement reserves and will equal approximately $97,000. This operating deficit reserve is put in place to cover any shortfalls or expense overruns that might occur due to unforeseen circumstances. If the operating deficit reserve is utilized during a calendar year it must be replenished at year end at the owner’s expense. For each unit type: proposed rent, # of bedrooms, # of bathrooms, rent level (AMI targets) Income Level # of units Gross Max Rent Utility All. Mkt. Adj. Prop. Rent 1-BR @ 40% 2 515 90 442 2-BR @ 40% 2 618 121 518 TOTAL @ 40% 4 12.50% 1-BR @ 50% 13 643 90 575 2-BR @ 50% 7 800 121 677 TOTAL @ 50% 26 62.50% 1-BR @ 60% 5 772 90 708 2-BR @ 60% 3 927 121 837 TOTAL @ 60% 12 25.00% Total LIHTC units 32 Mgrs. Unit 0 BR MGR unit TOTAL UNITS 32 Unit Sq. Ft. 2 Bedroom with 2 Baths 750 SF 3 Bedroom with 2 Baths 950 SF List of development team, including relevant experience in developing/owning similar projects. Please attach resumes for key staff and firm principals. Developer: Summit Housing Group, Inc. 283 W. Front Street, Suite 1 Missoula, MT 59802 Ph: 406-541-0999 ext. 233 Fax: 406-541-0997 Contact: Rusty Snow rusty@summithousinggroup.com www.summithousinggroup.com Architect: Encompass Architecture, PLLC 1535 Liberty Lane, Suite 110B Missoula, MT 59808 Ph: 406-880-2841 Contact: Jenn Clary Jenn@encompassdesigninc.com General Contractor: Oakwood Construction Co. 2380 Science Parkway Suite 101 Okemos, MI 48864 Ph: 517-347-1980 Fax: 517-347-0968 Contact: Bernie Aulgur oakwoodcompanies@gmail.com http://www.oak.cc Civil Engineer: JKC Engineering 111 West 2nd Street, Suite 420 Casper, WY 82601 Ph: 307-265-4601 Fax: 307-265-4672 Contact: Lewis James lewis@jkcengineering.com http://www.jkcengineering.com Property Management: Highland Property Management, Inc. 283 W. Front Street, Suite 1 Missoula, MT 59802 Ph: 406-541-0999 ext. 224 Fax: 406-541-0997 Contact: Casey Overland casey@highland-propertymanagement.com http://www.highland-propertymanagement.com/