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Resolution 2020-31435 RESOLUTION NO. 2020-31435 A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, ACCEPTING THE RECOMMENDATION OF THE FINANCE AND ECONOMIC RESILIENCY COMMITTEE AT ITS SEPTEMBER 23, 2020 MEETING, PURSUANT TO INVITATION TO NEGOTIATE (ITN) 2019-099-KB, FOR THE DEVELOPMENT OF THE COLLINS PARK ARTIST WORKFORCE HOUSING PROJECT (THE "PROJECT"),AND APPROVING THE TERM SHEET FOR THE PROJECT ATTACHED AS AN EXHIBIT TO THE COMMISSION MEMORANDUM ACCOMPANYING THIS RESOLUTION; FURTHER, DIRECTING THE ADMINISTRATION TO NEGOTIATE A DEVELOPMENT AGREEMENT WITH SERVITAS, LLC, AND GROUND LEASE WITH COMMUNITY FINANCE CORP., CONSISTENT WITH THE TERM SHEET, WITH THE FINAL AGREEMENTS SUBJECT TO THE PRIOR APPROVAL OF THE MAYOR AND CITY COMMISSION; AND FURTHER, REFERRING THE PROPOSED PROJECT AND THE FOREGOING AGREEMENTS TO THE PLANNING BOARD FOR REVIEW, IN ACCORDANCE WITH THE REQUIREMENTS OF THE CITY CHARTER AND CITY CODE. WHEREAS, on September 14, 2016, the Mayor and City Commission adopted Resolution No. 2016-29547, selecting The Concourse Group to identify public-private partnership (P3) opportunities for the development of workforce/affordable housing projects on City property, including preparation of a Design Criteria Package for the Project, located on surface lot P51, at 224 23rd Street; and WHEREAS, on December 14, 2016, the Mayor and City Commission adopted Resolution No. 2016-29679, approving a height waiver for the Project, to authorize a height of up to 75 feet, finding that the waiver was necessary in order to provide optimal development and to allow for maximum capacity for artist/workforce housing; and WHEREAS, on January 18, 2019, the City issued ITN 2019-099-KB for the Project; and WHEREAS, on July 17, 2019, the Mayor and City Commission adopted Resolution No. 2019-30908, authorizing simultaneous negotiations with both ITN proposers; following withdrawal from the process of Atlantic Pacific Communities, LLC, the City Commission directed negotiation with the sole remaining proposer, Servitas, LLC ("Servitas"); and WHEREAS, Servitas and the Administration negotiated a term sheet dated September 17, 2020 (the "Term Sheet"), which is attached as an Exhibit to the Commission Memorandum accompanying this Resolution; and WHEREAS, pursuant to the Term Sheet, Servitas proposes a 7-story building designed by Shulman & Associates and PGAL Architects, with ground floor space for either commercial retail or artist studios, a dormitory on the second floor for use by the Miami City Ballet, and approximately 80 workforce housing units on the remaining five floors; and WHEREAS, as proposed, the City will enter into a long-term ground lease for the entire property (the "Ground Lease") with a nonprofit 501(c)(3) organization, Community Finance Corporation (the "Ground Lessee"), which would finance the design and construction of the Project with tax exempt bond financing (which would be non-recourse to the City, with principal and interest payable solely from Project revenues); and WHEREAS, in addition to the Ground Lease, the City will enter into a development agreement with Servitas to govern the development of the Project; and WHEREAS, on September 23, 2020, the Finance and Economic Resiliency Committee provided guidance on the Project and the Term Sheet, and unanimously recommended that the Administration negotiate a Ground Lease and Development Agreement consistent with the Term Sheet, for the City Commission's consideration; and WHEREAS, pursuant to Section 1.03(b)(4) of the City Charter governing leases of ten years or longer of City-owned property, the Ground Lease requires approval by a majority 4/7 vote of all members of the Planning Board, and a 6/7 vote of the City Commission; and WHEREAS, pursuant to the favorable recommendation of the Finance and Economic Resiliency Committee, the Administration recommends that the City Commission adopt this Resolution, and direct the Administration to negotiate a Development Agreement and Ground Lease, consistent with the Term Sheet, with the final agreements subject to prior approval of the City Commission. NOW, THEREFORE, BE IT DULY RESOLVED BY THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, that the Mayor and City Commission hereby accept the recommendation of the Finance and Economic Resiliency Committee at its September 23, 2020 meeting, pursuant to Invitation to Negotiate (ITN) 2019-099-KB, for the development of the Collins Park Artist Workforce Housing Project (the "Project"), and approve the term sheet for the Project attached as an Exhibit to the Commission Memorandum accompanying this Resolution; further, directing the Administration to negotiate a development agreement with Servitas, LLC, and ground lease with Community Finance Corp., consistent with the Term Sheet, with the final agreements subject to prior approval of the City Commission; and further, refer the proposed Project and the foregoing agreements to the Planning Board for review, in accordance with the requirements of the City Charter and City Code. PASSED and ADOPTED THIS 19 day of October, 2020. ATTEST: d ' PPOVED I ' AS TO RAF EL . GRANADO, CITY CLERK DAN GELBER, MAYOR FORM&LANGUAGE 6 &FOR EXECUTION 6 IN(ORPn ORATEDO 0% _ ° Z ri r CityAttomey a Dat Resolutions-C7 C MIAMI BEACH COMMISSION MEMORANDUM TO: Honorable Mayor and Members of the City Commission FROM: Jimmy L. Morales, City Manager DATE: October 14,2020 SUBJECT:A RESOLUTION OF THE MAYOR AND CITY COMMISSION OF THE CITY OF MIAMI BEACH, FLORIDA, ACCEPTING THE RECOMMENDATION OF THE FINANCE AND ECONOMIC RESILIENCY COMMITTEE AT ITS SEPTEMBER 23, 2020 MEETING, PURSUANT TO INVITATION TO NEGOTIATE (ITN) 2019-099-KB, FOR THE DEVELOPMENT OF THE COLLINS PARK ARTIST WORKFORCE HOUSING PROJECT (THE "PROJECT"), AND APPROVING THE TERM SHEET FOR THE PROJECT ATTACHED AS AN EXHIBIT TO THE COMMISSION MEMORANDUM ACCOMPANYING THIS RESOLUTION; FURTHER, DIRECTING THE ADMINISTRATION TO NEGOTIATE A DEVELOPMENT AGREEMENT WITH SERVITAS, LLC, AND GROUND LEASE WITH COMMUNITY FINANCE CORP., CONSISTENT WITH THE TERM SHEET, WITH THE FINAL AGREEMENTS SUBJECT TO THE PRIOR APPROVAL OF THE MAYOR AND CITY COMMISSION; AND FURTHER, REFERRING THE PROPOSED PROJECT AND THE FOREGOING AGREEMENTS TO THE PLANNING BOARD FOR REVIEW, IN ACCORDANCE WITH THE REQUIREMENTS OF THE CITY CHARTER AND CITY CODE. RECOMMENDATION Accept the FERC recommendation and proposed term sheet, authorize negotiation of a development agreement and ground lease for consideration by the City Commission, and direct the Planning Board to review the agreements. BACKGROUND/HISTORY In September 2016, per Resolution No. 2016-29547, the City Commission selected The Concourse Group to identify public-private partnership (P3) opportunities for the development of workforce/affordable housing projects on City property, including a Design Criteria Package for the Collins Park Parking Garage/Housing facility, spanning both of the City lots located east and west of Liberty Avenue. In December 2016, Resolution No. 2016-29679 approved a GU height waiver for the Collins Park Parking Garage and Workforce Housing project (which, at the time, was being developed as one joint project), finding that a waiver was necessary in order to provide optimal development, and to allow for maximum capacity for artist housing. Subsequently, an alternative Page 206 of 1576 route was chosen to expedite the garage project to the west of Liberty Ave., and separately bid out a stand-alone P3 project for workforce housing on the eastern lot, otherwise known as surface lot"P51" and located at 224 23 Street. In January 2019, the City issued ITN 2019-099-KB for an artist workforce housing facility on surface lot P51. The solicitation attached The Concourse Group's Collins Park Workforce Housing Study, which the City Commission incorporated as part of its"direction, proposing one floor of residential use by ArtCenter/ South Florida and ground floor studios dedicated for use by local artists. In addition, the City Commission proposed the project might also include two residential floors for Miami City Ballet (MCB). Following issuance of the ITN,ArtCenter notified the City that it was no longer interested in partnering on this project after having acquired a property within the City of Miami. On July 17, 2019, Resolution No. 2019-30908 authorized simultaneous negotiations with both ITN proposers. Following withdrawal from the process of Atlantic Pacific Communities, LLC, the City Commission directed negotiation with the sole remaining proposer, Texas-based Servitas, LLC, a developer of on-campus student housing, including a P3 with F I U at its Biscayne Bay campus. Servitas and the Administration negotiated a term sheet dated September 17, 2020 (the "Term Sheet"),which is attached as Exhibit A. On September 23, 2020, the Finance and Economic Resiliency Committee reviewed the Term Sheet, provided guidance on the Project, and unanimously recommended that the Administration negotiate a Ground Lease and development agreement consistent with the Term Sheet for the City Commission's consideration. ANALYSIS Overview of the Proposal and Project Delivery Structure: Servitas proposes a 7-story building designed by Shulman&Associates and PGAL Architects: 1. ground floor space for either commercial retail or artist studios; 2. 30-bed dormitory on the second floor for the Miami City Ballet (plus two private units for MCB staff);and 3. 80 workforce housing units(mix of studios, 1 BRs, and 2BRs)on the remaining five floors. One of the key aspects of the Servitas proposal that distinguishes its proposal from other public-private proposals the City has received is that this Project would ultimately be not- for-profit in character, in that it would be leased by a non-profit entity and used for not- for-profit purposes at all times. As proposed, the City would enter into a long-term ground lease for the entire property with a nonprofit 501(c)(3)organization, Community Finance Corporation(the "Ground Lessee"),which would finance the design and construction of the Project with tax exempt bond financing (which would be non-recourse to the City, with principal and interest payable solely from Project revenues). Page 207 of 1576 Based on the information provided to the City by Servitas, Community Finance Corporation, the proposed Ground Lessee, is a not-for-profit Arizona corporation organized and operated exclusively for the purpose of assisting governments and nonprofits with the construction and financing of public buildings, and accordingly, is operated exclusively for charitable purposes. Community Finance Corp. has participated in over $1.3 billion in P3 projects throughout the United States, including a wide range of governmental and nonprofit uses, such as office facilities, parking structures, public safety/correctional facilities, university facilities, privatized student housing, and infrastructure. In addition to the Ground Lease, the City would enter into a development agreement with Servitas to govern the development of the Project. Once the Project is constructed,the Ground Lessee would have overall responsibility for the operation of the Project. Under the proposed structure, Servitas would earn a Development Fee for delivery of the completed Project to the Ground Lessee, with its fees to becovered by the tax-exempt bonds issued by the Ground Lessee to finance the Project. See Exhibit B. Following completion of the Project, Servitas would separately contract with the Ground Lessee to provide asset management services to the Ground Lessee. Accordingly, if the Project proceeds to a Financial Closing, the Project would be constructed, and managed,with limited City financial participation, and the City would not be responsible for payment of any of Servitas's fees or for Project development costs, with limited exceptions discussed more fully herein. Specifically, Servitas proposes for certain pre- development environmental expenses to be covered by the City, subject to reimbursement of the City from bond proceeds at Closing or from surplus revenues later once the Project is completed. See Section 3 below for further explanation. Once the Project is constructed, the Ground Lessee would be solely responsible for the operation and maintenance of the Project, with the intent that the Project would be entirely self- supported by the rental revenues the Project will generate. To the fullest extent possible under applicable law, the Project would be structured to be exempt from ad valorem taxes, pursuant to exemptions that are available for workforce/affordable housing, and/or otherwise available for properties leased and used for exempt not-for-profit purposes. To the extent the revenues of the Property generate surplus revenues (after payment of all operating expenses, maintenance reserves, and debt service reserves), such revenues would solely inure for the benefit of the City or any other not-for-profit entity designated by the City to receive surplus revenues. See Section 1 below for further explanation. Servitas's proposed Term Sheet is attached as Exhibit A. A summary of the key items brought for Finance Committee input and direction, along with the Administration's recommendation, is set forth more fully below. 1. Designation of Not-for-Profit Entities to Receive Any Net Proceeds Generated by the Project, After Payment of all Project Expenses, Debt Service and Reserves. As set forth above, one of the key features of the Servitas proposal is that the not-for-profit Page 208 of 1576 Ground Lessee proposes that any net proceeds, if any, generated from the Project (after the payment of all operating expenses, debt service, and maintenance reserves) shall be dedicated for use by the City Commission or any other not-for-profit entity designated by the City to receive the "surplus revenues." A summary of the pro forma for the Project is attached as Exhibit B hereto and indicates that by Project Year 3 (2022-2023), the Project may generate approximately $329,432 in surplus revenues annually. The Administration requests direction from the FERC on this issue, as it implicates a pure policy question as to the proposed uses of funds. Based on the proposal submissions received from Servitas, Miami City Ballet will pay rent for its use of the second-floor dormitory space, in the approximate annual amount of $363,841 in the first rental year (Project Year 3). This amount is consistent with the amounts Miami City Ballet has previously advised the City that it spends annually in connection with housing for dancers and MCB participants. From a financing perspective,the guaranteed rental income from the lease of an entire floor to a single entity is beneficial to the Project, as stable rental flows reduce the financing risks associated with the Project. As part of the parties'recent discussions, the Ballet indicated that it would consider providing a letter of credit or some other form of security to guarantee its rent obligations, or the additional costs to the Project in the event the Ballet no longer uses the dormitory and the entire floor must be converted to housing units. Subject to Finance Committee direction, the Administration will continue to address this issue with the MCB as part of the overall negotiation of the Project agreements. Miami City Ballet has proposed that it be designated as a Project beneficiary to receive surplus revenues from the Project, so that if the Project is successful and generates net proceeds, the Project would serve to potentially subsidize and reduce Miami City Ballet's rental obligations with respect to the dormitory floor, and thereby free up funds for the Miami City Ballet to enhance its cultural and charitable mission to provide dance education and cultural programming, in close proximity to its headquarters in Collins Park.[1] If the City Commission were inclined to designate MCB as a beneficiary, the Administration would propose that, at a minimum, the City also be designated a beneficiary, to permit the City to either: (1) utilize revenues to activate cultural programming on the ground floor of the Project or elsewhere in the Collins Park neighborhood (see Section 2 below), (2) further reduce the required rent for the workforce housing tenants in the building, or (3) support other workforce/affordable housing projects in the City. It should be noted that Servitas's pro forma assumes that in the second rental year (Project Year 4), the "surplus revenues" generated by the Project exceed the amount of annual rent paid by Miami City Ballet. The Administration would also propose that, if the City Commission approves for the City to undertake any financial commitments with respect to the Project (i.e., to cover a portion of expenses for environmental remediation and other site preparation), any surplus revenues should first be paid to the City prior to being distributed to MCB or any other entity, to permit the City to recoup its costs. Update: The FERC stressed the importance of reduced financial costs incurred by the City. Therefore, the Committee directed that any development expenses paid for by the City, including potential environmental remediation, should be remunerated as early as possible, Page 209 of 1576 whether at Financial Closing or by priority repayment using the rental revenues. Further, the City should use any excess rental revenues to subsidize its programming of the ground floor tenant space. 2. Use of Ground Floor Space, Either for Revenue-Generating Retail to Support the Financing of the Project or for Cultural Activation Purposes. Servitas has indicated a willingness to work with the City with respect to the programming for the ground floor of the Project, provided, however, that no matter how the ground floor space is used, the ground floor needs to generate rental income in order to support the financing for the Project. The most recent proposal included 5,400 sf of revenue-generating retail and/or artist studio space, with 2 separate lobby entrances, one for the Miami City Ballet dormitory and one for the remaining residential housing floors. Subject to direction from the City Commission, one option with regard to the ground floor space is for the City to enter into a master sublease (or have a right of first refusal to do so), for the entire ground floor (subject to City payment of ground floor rent), in order to curate an appropriate street level activation compatible with the Collins Park Arts and Culture District. To this end, Servitas has proposed annual rent of$100,000 — $150,000 (per square foot rental of approximately$18-$27). Update: Recognizing the ground floor use's vital role in neighborhood placemaking, the FERC confirmed that the City should have the ability, at its option, to program the space. In addition, the FERC recommended that surplus revenues from the housing component should be used to subsidize the City's costs in renting the space from the landlord. 3. Servitas Request for City to Pay for Environmental Remediation Costs for the Project, Subject to Reimbursement from Bond Proceeds or Project Revenues. Servitas will be responsible for obtaining and paying for environmental reports necessary to determine the scope of work and associated costs of any required environmental remediation, subject to City prior approval. Servitas proposes that it will cover initial costs up to $20,000 (as a Project reimbursable cost), with the City responsible for amounts in excess of $20,000, up to a maximum City contribution for environmental expenses of $200,000. In the event that the parties anticipate that remediation costs would exceed $200,000, the City would have a right to terminate the development agreement. Any amount expended by the City with respect to any of the foregoing would be reimbursed to the City at Closing (to the extent such costs are financeable), or from the net revenues of the Project, with the City to receive first priority for payment of such expenses from the net revenues of the Project. 4. Request for City Reimbursement of Servitas Development Expenses if the Development Agreement is Terminated. Servitas anticipates that it will expend up to $280,036 through the regulatory Historic Preservation Board approval for the Project (anticipated for Spring 2021), and $1,306,250 through the Financial Closing (anticipated for Winter 2021). The developer's Pre-development Page 210 of 1576 Budget is attached as Exhibit C. Servitas has proposed that the City be responsible for reimbursement of such pre-development expenses if the development agreement is terminated because the Project is rendered financially unfeasible and cannot proceed. Specifically, Servitas proposes: (i) Prior to the HPB approval for the Project, in the event the Project cannot proceed due to unforeseeable conditions, the City would be responsible for all Pre-Closing expenses incurred, approximately$280,036, and a portion of the Development Fee that would have been earned as of the date of termination, which fee could be up to $387,385 (40% of Servitas's proposed Development Fee). Collectively, the costs that Servitas proposes the City would be responsible for could amount up to approximately $667.421. (ii) After HPB approval but prior to Financial Closing, in the event the Project cannot proceed due to unforeseeable conditions, the City would not be responsible for any portion of the Development Fee, but would be responsible for all Pre-Closing Expenses (in the amount of$1.306,25(). Historically, the City has not agreed to reimburse a developer for its development costs. I n prior development agreements, the City has addressed this issue by agreeing to limit the City's ability to terminate an agreement for convenience, in order to provide a developer with the certainty that the City would not, in its proprietary capacity, simply"change its mind" after the developer has incurred significant costs to advance a project. As all projects involve development risk, the City's position in prior public-private projects has been that it is for the developer, and not the City, to undertake such risks. Notwithstanding the above, none of the prior development agreements the City entered into were structured to provide the City with all of the net revenues of the Project, and accordingly, all of the potential upside, for the entire term of the lease. For this reason, the Administration requests direction as to the proposed approach. At a minimum, the Administration would recommend that, as part of its continued discussions with Servitas, the parties should negotiate a cap on the City's monetary exposure and/or limit any allocation of risk to the City to the early stages of the Project only (i.e., prior to HPB approval). In addition, to mitigate risks, as part of discussions, the parties should develop very clear limitations or parameters for the types of unforeseen circumstances which could give rise to any City payment obligation if the Project could not ultimately proceed. Update: pursuant to FERC direction, during negotiations for the Development agreement, the Administration will strive to further limit the City's financial risks related to any Project contingency. The parties are making good progress to reduce the City's risk beyond what was presented at FERC and the outcome of negotiated terms will be brought before the City Commission when it reviews the Ground Lease and Development Agreement. 5. Request for Waiver of Permit Fees, Impact/Concurrency Fees for the Project In February, following review of the fees applicable to workforce housing projects, the Finance Committee declined to recommend any further reduction in the permit fees on workforce/affordable housing projects, with the exception of the Technology and Training Fee Page 211 of 1576 (which is generally calculated as 6%of the total fee for building, electrical, mechanical, plumbing and demolition permits). On September 16, the Commission voted favorably upon First Reading of an ordinance codifying this Technology and Training Fee waiver. The City would need to amend the City's Land Development Regulations and City Code to accomplish further reductions to the fees applicable to affordable/workforce housing projects. Until architectural plans are prepared, the amount of fees associated with permitting and entitlement of the Project is unknown. 6. Request for"GU" Waivers to Address Minimum Unit Size for the Studio Units and Required Parking for the Project and Library. Servitas seeks three LDR waivers: (1) 'required minimum unit size" for the 22 studio units (as Servitas is proposing 387 sq. ft. per studio unit, rather than the required 400 sq. ft. per unit); (2) "required off-street parking" for the project (approximately 58 spaces); and (3) "required off- street parking" for the Miami Beach Regional Library(approximately 24 spaces), which spaces are currently satisfied on P51 and will be eliminated by development of the project. Under the City Code, to be eligible for a GU waiver, a property must be either(1) governmental owned or leased, and wholly used by, open,and accessible to the general public, or(2) used by not-for-profit, educational, or cultural organizations. As proposed, the project would qualify for a GU waiver. In addition to satisfying the Code's requirements for GU waivers, the reduction in unit size and required parking are the primary incentives prescribed in the City's workforce housing regulations. The City Commission previously granted this Project a GU height waiver, specifically"to allow for maximum capacity for artist housing" (Resolution No. 2016-29679), as well as a loading space waiver to the parking garage facility in recognition of physical constraints inherent in the Museum Historic District and Miami Beach Architectural District(Resolution No. 2018-30560). The relatively small lot size of P51 does not lend itself to_viable redevelopment under the applicable development standards. Considering that the Project evolved from the CiWs initiative to redevelop parking assets into mixed-use housing and parking facilities, The Concourse Group originally intended that the housing component's off-street parking requirement would be satisfied in the adjacent garage facility. Therefore, staff supports the waivers, including any waiver of parking for the library that was previously satisfied on P51. Update: The FERC supported these waivers for the reasons put forth by staff. 7. "Waterfall" List of Eligible Residents for the Workforce Housing Units, in the Event of Insufficient Demand from Artists and Educators At the recommendation of The Concourse Group study, the City Commission directed that the Project cater to employees of artistic institutions and area educators employed in the City of Miami Beach. (The study recommended broad, inclusive definitions for workers from either industry that should qualify, e.g. administrators and support staff in nonprofit institutions). These liberally construed definitions will apply at the Project and appear in Section 10 of the Term Page 212 of 1576 Sheet). I n order that the units not remain vacant, and to ensure that the Project is financeable and has the ability to generate stable rental income streams to meet debt service obligations, Servitas has requested that, following a specified (to be negotiated) period of marketing to artists and area educators,,the Project be permitted to lease the individual rental units to other persons meeting the income criteria for workforce housing. Per City Code, prior to leasing, the building's property manager must provide the City in advance with a marketing plan and offering notice and comply with annual requirements for tenant roster verification by the Housing department. Update: The following incorporates the FERC's input on a proposed "waterfall" list to prioritize eligible residents: • Tier 1: area educators and persons actively involved in the practice of creative arts • Tier 2: nurses, law enforcement, firefighters, and personnel employed by the City of Miami Beach. • Tier 3: any income-eligible worker employed in the City of Miami Beach in the hospitality, culture,or entertainment industry • Tier 4: income-eligible workers, regardless of city of employment [1] The foregoing benefits for the MCB presume that the MCB will ultimately participate in the Project, and confirm its long-term commitment via a master sublease or other agreed-upon arrangement for its use of the dormitory floor. In the event MCB determines that it cannot participate in the Project, the second floor would be designed to accommodate additional workforce housing units. City staff will work with Servitas and MCB with regard to the timing for confirming MCB's participation as early as possible in the process, to avoid additional costs or delays associated with the necessary design changes that would be required to convert the dormitory floor to regular workforce housing units. FINANCIAL INFORMATION The City's responsibility is limited in amount and discussed in Analysis sections 3 and 4 above. The substantial majority of development costs will be funded by the Developer, with limited operational costs to the City described in section 2. It is intended that the City's costs would be reimbursed at specific stages of Project development and operation. CONCLUSION Subject to direction as to the policy and business issues outlined in this Memorandum, the Administration recommends that the City Commission approve the term sheet in concept and authorize the Administration to continue its negotiations and develop the appropriate agreements for the City Commission's consideration. Pursuant to Section 1.03(b)(4) of the City Charter governing leases of ten years or longer for City-owned property, the Ground Lease requires approval by a majority 417 vote of the Planning Board and 6/7 vote of the City Commission. Accordingly, the Administration requests that the City Commission refer the Project and draft agreements to the appropriate land use boards for review, in accordance with the requirements of the City Charter and City Code. Applicable Area Page 213 of 1576 South Beach Is this a "Residents Right Does this item utilize G.O. to Know" item. pursuant to Bond Funds? City Code Section 2-14? Yes No Strategic Connection Mobility- Increase housing options for current and future residents. Legislative Tracking Economic Development ATTACHMENTS: Description ❑ Attachment A-Term Sheet dated 9-17-20 ❑ Attachment B - Pro Forma ❑ Attachment C - Predevelopment Budget ❑ Attachment D - Preliminary Renderings ❑ Resolution Page 214 of 1576 Servitas / Collins Park Artist Workforce Housing Term Sheet 1.Project Description("Project") a. Approximate total number of units, excluding housing for the Miami City Ballet ("MCB"); broken out, and approximate sizes: • 80 units of Workforce Housing: o Studio 387 sq.ft.average 22 units o 1B/1B 524 sq.ft.average 25 units o 2B/2B 722 sq.ft.average 33 units • 32 Beds of dormitory housing for MCB(on a single floor) b. Proposed building uses and approximate square footages: • Stories:7 floors, 75'maximum height o Ground floor-revenue-generating Retail or Cultural space-5,400 Gross Square Feet("GSF") +2,100 GSF Housing Lobby+860 GSF MCB Lobby o 2nd Floor MCB dormitory space—12,733 GSF o 3RD through 7T"Floors of Workforce Housing 12,068 GSF each o Total GSF for the project=82,098 GSF c.The proposal is contingent upon the City Commission approving a GU Waiver, to waive the 400 SF minimum unit size set forth in the City Code, as the proposed 22 Studio units would each have a minimum unit size of 387 SF. d. Project Parties and Project Agreements: Developer:Servitas,LLC. City will enter into a Development Agreement with Servitas(the"Developer")to provide for Servitas to be responsible for the overall delivery of the Project (including contracting for the design and construction of the Project),in accordance with the terms of the Development Agreement and Ground Lease. Ground Lessee: Community Finance Corp.,a 501(c)(3) entity, headquartered in Tucson,Arizona. City will enter into a long-term Ground Lease with Community Finance Corp., which will be responsible for obtaining the tax- exempt financing for the Project. Once the Project is completed,the Ground Lessee will also be responsible for the operation and maintenance of the Project pursuant to the Ground Lease, and will engage Servitas Management Group, LLC, as asset manager, to provide overall asset management services, and a property manager for the day-to-day operation of the Project. Financing: Citigroup, Inc.,as underwriter. The Project would be financed with tax-exempt revenue bonds,to be issued by the Ground Lessee,with the financing to be non-recourse to the City. The Project financing agreements will likely include a Loan Agreement between Ground Lessee and Citigroup, Inc., the underwriter selected by Servitas and the Ground Lessee for the Project financing, along with a Trust Indenture to govern how Project revenues may be used, among other terms. The Financial Closing (as defined in the Development Agreement) would take place once regulatory approvals for the Project are obtained (i.e., HPB approval and Building Permit) and other conditions(to be set forth in the Development Agreement)are satisfied. Sub-lessee of Dormitory Floor: Miami City Ballet. Ground Lessee will likely enter into a long-term sub-lease of the dormitory floor with MCB,to permit MCB to be responsible for coordinating the individual rentals of the MCB dormitory units to MCB dancers or other persons participating in MCB programs. 1 Page 215 of 1576 Leasehold Condominium Structure for the Project: The parties expressly agree to structure the transaction so that, to the fullest extent possible under applicable law, the Project will be exempt from ad-valorem taxes. In order to obtain such exemptions, the Project may, if necessary, be subdivided as a leasehold condominium (subject to the Ground Lease),to provide for: (1)one leasehold condominium unit for the entire ground floor space(which will be either retail or cultural space, subject to City Commission approval), (2)one leasehold condominium unit for the MCB dormitory floor(Floor 2);and (3)one leasehold condominium unit for the entire workforce housing component(Floors 3-7). 2.Miami City Ballet Participation in the Project a.As in the original proposal and consistent with the ITN and post-award discussions with the MCB, Servitas, LLC ("Developer" or "Proposer") has satisfied all the MCB's dormitory program requirements, especially the items relating to life safety,total number of beds,and the communal space components. b. To accommodate MCB's participation, the building will have a dedicated and secure floor for MCB, with exclusive elevator access to its floor via keycard.This floor will be leased using one of a few possible structures, including,but not limited to the following,all of which are contingent on maintaining the tax-exempt status of the Project: • MCB dormitory floor master sub-lease between the MCB and the Ground Lessee;or • Direct leases between Ground Lessee and Eligible Residents for the MCB floor, with a management agreement or other agreement between the Ground Lessee and MCB,to permit MCB to manage and maintain overall responsibility for the dormitory floor and the MCB dancers. c.As an alternative to the MCB using the dorms,if needed,in the future,the MCB dormitory space is designed for easy conversion to workforce housing. The Development Agreement will include an outside date by which the MCB must confirm its binding participation in the Project,to permit the Ground Lessee/Developer to obtain the appropriate HPB approvals(for either the dormitory space,or workforce housing)and required financing for the Project. 3.Project Proceeds/Eligible Residents a.The Developer's proposed tax-exempt financing structure(discussed in Section 4 below) contemplates that the Project will be 100%self-supported by rental revenues. As such, the Project will not require the City or MCB to share or pay any capital/operating costs out of pocket.All operating expenses and debt service payments will be covered by the Project revenue. Subject to City Commission approval,the City and potentially,a non-profit entity (such as MCB)shall be designated in the Ground Lease and/or other Project agreements(the"Surplus Entity")to receive all of the annual net proceeds of the Project, if any,after operating expenses and debt service payments are made and required reserves are met,so that the proceeds can be used by the City(or MCB or any other Surplus Entity, if applicable) as desired — i.e. funneled back into the Project to maintain or decrease rents, to provide scholarships for dancers, or to support other ballet projects and/or cultural initiatives, such as activation of the ground floor space for the Project. b. Assuming the City Commission approves a"Surplus Entity"other than the City,any costs expended by the City for environmental remediation for the Project, as provided in Section 8 hereof, shall be reimbursed to the City first,prior to any surplus revenues being distributed to any other party or used for any other purpose. 2 Page 216 of 1576 c.The unit breakdown for workforce housing is intended to be evenly divided between tenants earning less than or equal to 80% of the area median income ("AMI") and tenants earning between 80 and 120%AMI, provided, however, that the priority for booking of tenants shall be "Artists," Area Educators, and employees of cultural organizations,in all instances earning less than 120%AMI,as set forth in Section 10 below.This prioritization shall be established in the Project agreements.The current prioritization is as follows: Tier 1—Artists and area educators Tier 2 — Nurses, law enforcement, firefighters, and other emergency service providers employed in the City of Miami Beach Tier 3— Eligible workers employed in the City of Miami Beach in the hospitality, culture,and entertainment industries Tier 4—Any eligible workers employed within the City of Miami Beach Eligible workers are those from qualified households, as defined in 58-501 of the City Code. Students must be enrolled or accepted for enrollment at an institution for the purpose of obtaining a degree, certificate, or other recognized education credential offered by that institution. Monthly rent for workforce housing tenants shall not exceed 30%of the then applicable AMI. 4.Project Financing a.The Project will be completely financed through the sale of tax-exempt revenue bonds(with the exception of a small taxable portion should it be required). Under the proposed structure, Community Finance Corp., as the Ground Lessee under an unsubordinated Ground Lease with the City,will be the tenant and owner of the leasehold improvements,and will be responsible for obtaining the financing for the Project. b. The Ground Lessee would operate the Project in accordance with an annual budget, approved by a Budget Oversight Committee (a committee which would be established pursuant to the Ground Lease or other relevant Project agreements). The Budget Oversight Committee shall include a representative from the Lessee, the property manager, Servitas Management Group, LLC("SMG"-as asset manager), the City and the Surplus Entity (if any is designated). After operating expenses have been paid and debt coverage and reserves satisfied,surplus cash shall be paid to the City/Surplus Entity.The surplus cash flow is not shared with the Developer; rather,it all flows to the City/Surplus Entity.This financing mechanism results in a project that is not profit driven and allows the flexibility to allow the City to determine the overall goals for the Project. No grant,tax credit or government subsidy is assumed or expected under our plan of finance. c. Except as set forth in Section 8 below with respect to environmental remediation costs,there will be no City funding or City financing of any kind (including back-up pledges/covenants to budget and appropriate). d.With tax-exempt bond financing,there should not be an equity contribution from MCB or the City. Subject to the terms of the Development Agreement, the Developer will advance pre-Closing costs and reimburse itself at Financial Closing. In the event of a termination of the Project prior to Financial Closing,Servitas proposes for City to be responsible for payment of Pre-Closing Expenses and Developer's Fee,if termination is prior to HPB approval for the Project. e.City's fee interest in the property shall be senior,and not subordinated to,any financing obtained by the Ground Lessee, and all financing shall be non-recourse to the City and MCB.The financing documents and Ground Lease will contain certain step-in rights and cure provisions for the bond holders and lender. City maintains its fee 3 Page 217 of 1576 interest in the land, but the Ground Lessee maintains ownership and control of the leasehold improvements during lease term. 5. Development-Related Matters/Development Agreement a. Servitas requests a waiver of the 400 SF minimum unit size requirement in the City Code applicable to the 22 Studio units,as it is proposing for the Studio units to be 387 SF. b. Given the site constraints associated with the relatively small size of the property, Servitas has requested a waiver of required parking applicable to the Project,as the waiver would permit Servitas to maximize the number of workforce housing units that may be constructed as part of the Project. In addition, in order to accommodate the parking needs of workforce housing tenants in the building, Servitas requests that the City provide access to up to fifty-eight(58) monthly parking passes at the nearby Collins Park Garage,with the monthly parking passes available for purchase by the Project's workforce housing residents, at the then applicable City rate, on a first- come-first-served basis. c.The City will provide the Project with a waiver or reduction of permit fees, impact/concurrency fees, and utility connection fees relating to the Project,to the extent currently available under the City Code. d. Servitas has accepted the City's proposed framework for the development of the plans and specifications for the Project: as part of approval of the Development Agreement and Ground Lease, the City Commission will approve the Concept Plan design,and the Developer would otherwise be responsible for all design approvals(i.e., HPB) consistent with the Concept Plan design. After regulatory approvals are obtained, the City Manager will approve the final Plans and Specifications to ensure the Project is being developed consistent with Concept Plan design and the Project requirements, and the City Manager will also approve material modifications thereto. To the extent there are any licensing fees or inspection fees to be paid for work performed on the Project(other than building permit fees),Servitas would request that those be waived. e. Development Agreement. Developer would ask that, as soon as practicably possible, the City and Developer enter into a Development Agreement to define the parties' duties and obligations prior to financial closing. The following is a brief description of essential terms which are currently under negotiation. i.The current budget for costs to be incurred prior to closing("Pre-Closing Expenses")and general timeline for when the Pre-Closing Expenses will is attached hereto as Exhibit"D". ii.Development Fee shall be equal to 7%of the total hard and soft costs of construction.Based on current pricing,the total Development Fee will be approximately$968,464.This value is preliminary and based on current pricing for the design and construction of the Project and is subject to change. iii.Development Fee shall be earned throughout the Pre-Development process leading to financial closing, as follows: Milestone Description Development Fee Earned Schematic Design Approval 20 '0 Design Development Approval 40% HPB Approval 60% 100%Construction Drawings 80% Approval issuance of the Preliminary Offering 100% Statement 4 Page 218 of 1576 iv. Prior to the HPB approval for the Project, in the event the City terminates the Project or the parties mutually agree that the Project is not financially feasible due to unforeseeable conditions. Servitas proposes that the City reimburse Servitas for all Pre-Closing Expenses incurred and such portion of the Development Fee earned,as of the date of termination. v. After the issuance of the HPB approval for the Project but prior to Financial Closing, in the event the City terminates the Project or the parties mutually agree that the Project is not financially feasible due to unforeseeable conditions, Servitas proposes that the City reimburse Servitas for all Pre-Closing Expenses, but in such event,City shall not be responsible for any portion of the Development Fee. 6. Development Schedule. The development schedule below includes a standard anticipated permitting period. a. HPB/DRB approval — as soon as possible — within six (6) months of execution of the Pre-Development Agreement. b.Financial Closing—Ten(10)months after HPB/DRB Approval. 1. The Financial Closing will be subject to certain Closing Conditions, including obtaining all regulatory approvals for the Project and issuance of the Building Permit for the Project. All of the documents relating to the Project Development, including, but not limited to the Ground Lease, Loan Agreement, Trust Indenture,Construction Contract and Design Services Agreement,will be executed at the Financial Closing. • c. Substantial Completion (as defined in the Development Agreement) will be achieved within eighteen (18) months of Financial Closing,depending on site environmental and geotechnical conditions. f.Opening and occupancy shall occur thirty(30) days after Substantial Completion. 7.Ground Lease a. The Ground Lease will be a fifty (50)year lease, with two (2) optional renewals of twenty(20) years each, on mutual agreement of the City and Ground Lessee,with the form of the Ground Lease to be negotiated and subject to mutual agreement. b.Guaranteed ground rent paid to the City will be set at$100 per year, escalating at 3%per annum.Guaranteed ground rent payment will begin upon Financial Closing and execution of the Ground Lease. c.As part of the Ground Lease the City will provide the Project with fifty-eight(58)parking spaces for the workforce housing portion of the Project or secure a waiver of the parking space requirements. 8.Condition of Property/Environmental a.The Developer,will accept the property in its AS IS condition,subject to review of the environmental Phase I and II and geotechnical reports to be obtained for the Project.: The Phase I, Phase II and geotechnical report (collectively,the "Environmental Reports"), shall be completed as early as possible,to permit the parties to budget accordingly and/or determine whether the costs of environmental remediation or related work render the Project unfeasible. Developer shall be responsible for obtaining and paying for the Environmental Reports,subject to City's approval of the costs thereof(which costs may be subject to reimbursement as provided below). 5 Page 219 of 1576 Following completion of the Environmental Reports,Developer shall estimate the costs for all work that may be reasonably anticipated for any environmental restoration, stabilization or remediation for the Project, including an appropriate contingency(the "Environmental Costs"),which estimate shall be subject to City's review and approval. The Environmental Costs shall be borne by the City and Project,as follows: The Project shall be responsible for the initial Environmental Costs for the Project (inclusive of the costs of the Environmental Reports), up to the aggregate amount of$20,000.00(the "Baseline Environmental Costs"). City shall be responsible for Environmental Costs in excess of the Baseline Environmental Costs, up to the aggregate amount of$200,000.00("City's Maximum Contribution"). The City's Maximum Contribution,or any portion thereof,spent on the environmental restoration,shall be reimbursed to the City either at closing or as part of the surplus waterfall flow of funds,prior to the Surplus Entity receiving any.payment(or on a split basis,as agreed between the City and the Surplus Entity). Following receipt of Servitas's estimate of the Environmental Costs for the Project, if City determines that the estimated Environmental Costs are likely to exceed the City's Maximum Contribution, City shall promptly provide Developer with notice thereof,to permit Developer the opportunity to determine whether financing may be obtained sufficient to cover any amounts in excess of City's Maximum Contribution. If such financing cannot be obtained, either party shall have the right to terminate this Agreement for lack of funding. In the event of termination of the Development Agreement for lack of funding,City shall reimburse Servitas for all costs expended by Developer for the Environmental Reports. If the agreement is not terminated and the Project otherwise proceeds, in no event shall City be responsible for any Environmental Costs in excess of City's Maximum Contribution. 9.Terms re:Management and Operation of Facility a. The property manager, in connection with SMG (as asset manager) will market to eligible participants by outreach activities targeted to.educators and artists and through partnerships with local art and education groups. Informing potential residents up front of income stipulations and the proof required thereof will help attract eligible participants,as each application must meet the AMI criteria through income verification (tax returns and wage statements). b.The Project will be responsible for facility maintenance, utilities and standards of operation, including: i. Maintenance/repairs for all components of the building envelope, including, without limitation, all mechanical, HVAC, electrical,plumbing systems, roof,elevators and the like). ii. Lighting iii. Landscaping iv.Electric,telephone,internet and data,cable,sanitary sewer,water,stormwater,trash and recyclables, exterior access door control, v.Security vi. Parking vii.Resident complaints/issues. viii. City and Ground Lessee to negotiate penalties in lieu of default for failure to achieve maintenance standards 6 Page 220 of 1576 a. Maintenance standards shall be provided by the City prior to financial closing and such standards shall remain in place for the duration of the Ground Lease. Should there be any changes causing an increase in the operating expenses of the Project, the City shall either grand-father the Project in under the original maintenance standards or offset the costs of the modifications to the maintenance standards. ix. Management of retail spaces 10.Use Restrictions/Project Requirements a.With the exception of the MCB dormitory floor,the Project tenants will be defined in the Ground Lease between - the City and the chosen non-profit Ground Lessee as"Eligible Residents" and be limited to the following: i. Artists, which will be defined to include any person actively involved in the practice of creative arts, including,without limitation,in the area of music,dance,drama or other performing arts;creative writing; painting,sculpture, photography, or other fine arts;graphic arts/web design;craft arts; industrial design; costume design; fashion design; and film, television, radio and/or print production, etc. provided, however,that in all such cases,the tenants earn up to 120%AMI;or ii.Area educators(i.e.,teachers or teacher's aides employed by any public or private school in Miami-Dade County on a full-time or part-time basis)and employees of non-profit or governmentally owned cultural institutions,etc., provided,however that all such persons earn less than 120%AMI. However,any unit remaining vacant for at least sixty (60) consecutive days may be offered and leased to any other individuals earning less than 120% of AMI (whether or not such individuals are Artists or Area educators) (as allowed by the borrower's charter and consistent with maintaining the Project's tax-exempt status). The vacant units will be offered to the following groups, in this order of priority: Tier 1—Artists and area educators Tier 2 — Nurses, law enforcement, firefighters, and other emergency service providers employed in the City of Miami Beach Tier 3— Eligible workers employed in the City of Miami Beach in the hospitality, culture, and entertainment industries Tier 4—Any eligible workers employed within the City of Miami Beach b. For the above project tenants, monthly rent shall not exceed 30%of the then applicable AMI. c.The Project does not contemplate short term rentals(defined as rentals of less than six months and a day)for the individual workforce housing units. The Ground Lease will prohibit daily and other short-term rental agreements for the workforce housing component of the Project. Short-term leases would be permitted for qualified eligible residents of the MCB dormitory floor, i.e.MCB summer camp participants, MCB faculty training groups or other MCB sanctioned groups using the MCB's dormitory space. 11.City Participation Except with respect to (i) the proposed allocation of environmental costs in Section 8; and (ii) the proposed City reimbursement of pre-Closing expenses,solely in the event of the termination of the agreement prior to Financial Closing, the City's contribution will be limited to providing the Ground Lease, and the City will not be responsible for any costs or expenses related to the development,financing, design, construction, operation or maintenance of the Facility. 7 Page 221 of 1576 12.Developer termination rights a.There will be no Developer termination for convenience after the Financial Closing(the"Possession Date"). 13.Transfers a. With respect to transfers of ownership of leasehold interests in the Project or in the Ground Lease,we confirm our proposal involves no material changes to City's template included in the ITN agreement draft. Though for financing purposes, bond purchasers will require certain standard "step-in" rights in advance of any default and termination of the Ground Lease by the City. b. We confirm no material changes to provisions in City's ITN agreement template re: approval of any new Acceptable Operator,with such provisions incorporated in the to-be-negotiated Ground Lease. 14.Other a.The Developer and non-profit Ground Lessee shall comply with all applicable laws in the performance of their obligations for the project. b. The Project shall make a one-time contribution to City's AIPP trust fund in the amount of 2% of capital construction costs,in accordance with City's AIPP Ordinance and be paid at closing from bond proceeds and based on the hard construction costs included in the construction contract entered into between Developer and the general contractor. Developer is currently interviewing various candidates to operate as the General Contractor. The Development Agreement will require City Manager approval of the contractor,for purposes of ensuring that City's minimum criteria are satisfied, i.e., the contractor must have successfully completed at least one similar project in the last five (5) years, must have bonding capacity sufficient to bond the entire project, and the like. The Ground Lessee, as a not-for-profit entity, will work with Developer to structure the Project construction agreements to exempt the Project construction and Furniture, Fixture & Equipment ("FF&E") from sales taxes, property taxes other than ad valorem taxes,assessments and other taxes and fees not applicable to not-for-profit owners. c. The Project will pay for the required public hearing notices to affected property owners, Miami Herald public hearing advertisements, BUT NOT any other fees and costs incurred by the City or MCB,including,but not limited to,outside attorneys',consultants or other professional fees incurred relating to the Project. 15.Other Public Benefits • a. Our project anticipates the following additional public benefits: • Servitas is a "HUB" business (Historically Underutilized Business) with minority owners and will make minority hiring a priority in all our projects. • The use of art from local artists to decorate the building. • The Project will be holistically designed with sustainable elements to minimize the Project's impact on the environment. 8 Page 222 of 1576 Collins Park Artist Workforce Housing Summary of Project Assumptions Stabilized Pro Forma Summary . r:.-. u�..:., ., 'r> 2023-2024 .- ,`..044(. _. . ..1L 7 ... .:4ia:;- Number of Beds 147 Opening Year 2023 Per Unit Number of Units - 92 Rent growth rate 3.0% Revenues • Projected Start Date 11/1/2021 Operating expense growth rate 3.0% Gross Potential Rent 24,565 2.259,942 2,324,102 2,390,113 2,458,031 Net Rentable Square Feet 54,650 Rent Structure Monthly Other Income 282 24,095 24,817 25,562 26,329 Gross Square Feet 68,313 Vacancy Rate 6% Less:Vacancy of Retail end Rental Income 6% (144,715) (148.747) (152,894) (157,158) Efficiency Factor 80% Net Rental Revenue 24,905 2,291,295 2,355,185 2,420,895 2,488,477 ex adi nti WINEIN...r.22321.: eiO'gini .t1Wid daltiNaoti lnr7ilaltr., . . .. i .. 4 ..:,:41 '3Wi r .-g . Start Up Expenses 8,696 800,000 Unit T e Monthly Rent Units Bedrooms Bade Expenses Dorm room 2-2 $927_ 5 10 10 Marketing&Leasing 93 8,513 8,769 9.032 9,303 Dorm room 2-2 DBL $721 5 10 20 Administrative 183 18,866 17,372 17,893 18,430 FRA Unit $1,545 1 1 1 Property Management Fee 1,245 114,565 117.759 121.045 124.424 Director Unit $2,512 1 1 1 Property Insurance 1,056 97,182 100.097 103,100 106,193 orkforce Houei : Utilities 454 41,764 43.017 44,307 45,637 Studio-80%AMI 51,280 10 Payroll 1,048 96,379 99,270 102,248 105,315 1 bed-80%AMI $1,372 12 Residence Life Payroll - 0 0 0 0 2 bed-80%AMI $1,646 17 Residence Life • 0 0 0 0 Studio-120%AMI 51,920 10 Common Area&Amenities 210 19,276 19,854 20,450 21,063 1 bed-120%AMI $2,058 13 _ Fire&Life Safety 61 5,622 5.791 5,964 6.143 2 bed-120%AMI $2,300 18 Grounds&Landscaping - 0 0 0 0 Repairs&Maintenance Z71 24,898 25,645 26.414 27,206 Turnover 140 12,850 13,236 13,633 14,042 Bad Debt 125 11.456 11,800 12.154 12.519 r 92 22 32 Lasa-Total Operating Expense 4,884 800,000 449,371 462,610 476,241 490,276 Net Opsratinn Income 20,021 (800,000) 1,841,924 1,892,575 1,944,654 1,998,201 501 c3 Owner Expenses Replacement Reserves 320 29,400 30.282 31.190 32,126 Asset Management Fee 249 22,913 23,600 24,308 25,038 Approx.Bond Term(Years) 30 Total Additional Expenses 1,221 112,313 115,682 119,153 122,727 Addl.Cap.Interest(Mos.) 18 Total Cash Available for Debt Service 18,800 1,729,611 1,778,893 1,825,501 1,875,474 Pro'ect Bud f et - 1.-4kia..,iaz'jd Gs,44- ,si.:t lkezi ,� 11:ty'"({u,alawnr-._._,.atHir-:{ta. 'lll:tli. '.._....r;_:MU'. ..?, Debt Service Hard&Soft Prolsct Costs Total Debt Service (1.400.179) (1,399,384) (1,403,093) (1,400,444) Total Hard Costs 12,796,250 139,090 187 Cashtlow attar Debt Service 3,581 329,432 377,509 422,405 475,030 A&E Fees 870,000 9.457 13 Debt Service Coverage Ratio 1.27 1.30 1.34 FF&E 390,000 4,239 6 IT and Voltage 600,000 6,522 9 Notes: Construction Administration 255,925 2,782 4 (I)Debt service reserve and capitalized interest we funds rat aside for investor security and we returned to the pgect if unused. Predevelopment Costs 190,000 _ 2,065 3 (2)NI assumptions era based on limited project design and scope Information and as such the assumed costs are subject Permits,Inspections,and Fees 655.000 7,120 10 to change asprojstparameters become bather defined. Start Up Expense 800,000 8,696 12 Development Contingency 1.139,813 12,389 17 This preliminary proforma is for illustrative purposes only and is based on specific assumptions,all of which Developer Fee 968,464 10,527 14 Total Hard&Soft Costs 18,665,451 202,885 273 are subject to change. The information contained herein is proprietary and should remain confidential. Any and all deadlines or milestones,contained herein are for modeling purposes only and are subject to change Financing Costs&Project Escrows based on negotiations,closing dates,market volatility and final design review and constructability analysis. Cost of Issuance-Bonds 1,510,258 16.416 22 Development budgets and operating statement will require refinement through collaboration and Debt Service Reserve 1,447,423 15,733 21 Capitalized Interest 2,225,367 24,189 33 negotiation.All final agreements and proformas shall take precedence and govern the actual development of the project. Total Financing&Related 5,183,048 58,337 76 ESTIMATED TOTAL BOND ISSUANCE 23,848,499 259,223 Page 223 0/157.0 JERVITAS 1of6 :.CiL_rC, Ali ItEM ISTA11 S[RY!f_[S 9/18/2020 Confidential Collins Park Artist Workforce Housing Operating Pro forma Project Year: Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11 Fiscal Year: FY 2024 FY 2025 FY 2026 FY 2027 FY 2028 FY 2029 FY 2030 FY 2031 FY 2032 Academic Year: 2023-2024 20242025 2025-2026 2026-2027 2027-2028 2028-2029 2029.2030 2030-2031 20314032 prams 1 2020 2023 Academic Revenue Monthly Rent Monthly Rent Miami City Ballet Bads By the Bed By the a Bed Ballet rent increases 2%per year.Potential 35 year Master Lease. Dorm room 2-2 10 $927 $1,013 121,555 123,986 126,466 128,995 131,575 134,206 136,891 139,628 142,421 Dorm room 2-2 DBL 20 5721 $788 189,085 192,867 196,725 200.659 204,672 208,766 212.941 217.200 221,544 RA Unit 1 $1,545 51,688 20,259 20,664 21,078 21,499 21,929 22,368 22,815 23,271 23,737 Director Unit 1 $2,512 $2,745 32,942 33,601 34,273 34,959 35,658 36,371 37,098 37,840 38,597 Workforce Housing Units By the Unit Br the Unit Studio-80%AMI 10 $1,280 $1,399 167.843 172.878 178,064 183,406 188,909 194.576 200,413 206,426 212,618 1 bed-80%AMI 12 $1,372 $1,499 215,888 222,365 229,035 235,907 242,984 250,273 257,781 265,515 273,480 2bed-80%AMI 17 $1,646 $1,799 366,920 377,928 389,266 400,944 412,972 425,361 438,122 451.266 464,804 Studio-120%AMI 10 $1,920 $2,098 251,764 259,317 267,097 275,110 283,363 291,864 300,620 309,638 318,927 1 bed-120%AMI 13 $2,058 $2,249 350,818 361,342 372,183 383.348 394,849 406,694 418,895 431,462 444,406 2 bed-120%AMI 18 $2,300 $2,513 542,867 559,153 575.927 593,205 611.001 629,331 648,211 667,658 687,687 Gross Potential Rent 147 2,259,942 2,324,102 2,390,113 2,458,031 2,524911 2,599,810 2,673,787 2,749,904 2,828,221 Retail Income(2%annual increases) 5400 sf $261st $28/sf 151,973 155,013 158,113 161,275 164,501 167,791 171,147 174,570 178,061 Less:Vacancy of Retail and Rental Income 6% (144,715) (148,747) (152,894) (157,158) (161,545) (166,056) (170,696) (175,468) (180,377) Other Income $150/bed $1641bed 24,095 24,817 25,562 26,329 27,119 27,932 28,770 29,633 30,522 Net Rental Revenue 2,291,295 2,355,185 2,420,895 2,488,477 2,557,986 2,629,477 2,703,008 2,778,638 2,856,428 2020 2023 Marketing&Leasing $53/bed $58/bed 8,513 8,769 9,032 9,303 9,582 9,869 10,165 10,470 10,785 Administrative $105/bed $115/bed 16.866 17,372 17,893 18,430 18,983 19,553 20.139 20,743 21,366 Property Management Fee 5.0% 5.0% 114,565 117,759 121,045 124,424 127,899 131,474 135,150 138,932 142,821 Property Insurance $605/bed $661/bed 97,182 100,097 103,100 106,193 109,379 112.660 116,040 119,521 123,107 Utilities 5260/bed $284/bed 41,764 43,017 44,307 45,637 47,006 48.416 49,868 51.364 52,905 Payroll $600/bed $656/bed 96.379 99,270 102,248 105,315 108,475 111,729 115,081 118,533 122.089 Common Area&Amenities $120/bed $131/bed 19.276 19,854 20,450 21,063 21,695 22.346 23,016 23,707 24,418 Fire&Life Safely $35/bed $38/bad 5,622 5,791 5,964 6,143 6,328 6.518 6,713 6,914 7,122 Grounds&Landscaping 5/bed $/bed - - - - - - - - - Repairs&Maintenance $155/bed $169/bed 24,898 25,645 26,414 27,206 28,023 28,863 29,729 30,621 31,540 Turnover $80/bed $87/bad 12,850 13,236 13,633 14,042 14,463 14,897 15,344 15,804 16,279 Bad Debt 0.5% 0.5% 11,456 11,800 12,154 12,519 12,894 13,281 13,680 14,090 14,513 Total Operating Expense $3057/bed 449,371 462,610 476,241 490,276 504,727 519,606 534,927 550,702 566,944 RIM Opsiliiing111001116 1 1,841,924 1,892,575 1,944,654 1,998,201 2,053,259 2,109,871 2,168,082 2,227,937 2,289,484 501 c3 Owner Expenses S or%of Net Rent Replacement Reserves $200/bed 29,400 30,282 31,190 32,126 33,090 34.083 35,105 36,158 37,243 Other Non-Operating-NCCD Fees 3.3% 60,000 61,800 63,654 65,564 67,531 69.556 71,643 73.792 76,006 Asset Management Fee 1.0% 22,913 23.600 24,308 25,038 25,789 26,562 27.359 28,180 29,025 Total Additional Expenses 112,313 115,682 119,153 122,727 126,409 130.201 134.108 138,131 142,275 Total Cash Available for Debt Service 1,729,611 1,776,893 1,825,501 1,875,474 1,926,850 1,979.670 2,033,974 2,089,806 2,147,209 Annual Debt Service (1.400,1791 11,399,384) (1,403,093) (1,400,444) (1.402,298) (1.403.093) (1,397,530) (1,401,768) (1,399,384) Total Debt Service (1,400,179] (1,399,384) (1,403,093) .(1,400,444) (1.402,298) (1,403,093) (1,397,530) (1,401,768) (1,399,384) Cashflow after Debt Service 329,432 377,509 422,408 475,030 524.552 576,577 636,444 688,038 747,825 Debt Service Coverage Ratio 1.27 1.30 1.34 1.37 1.41 1.46 1.49 1.53 .. '. • • .. ••. ,• . .',.iiia;%.'..iit ..-. �° ..1f 1*. .`YArora l.... .:.0" 4.::-..,. ,. . ::::4,i14.-.. .. -t,,;-.7_,<:-...: •. .t.-1101,of ..RZ:lki. _. .1.a.fA.,"r. .. Page 224 of 155 E R V ( I A S 2of6 r 0111 GIATi RLiA• ESTAJF SCR/ICES 9/18/2020 Confidential Collins Park Artist Workforce Housing Operating Pro forma Year 12 Year 13 Year 14 Year 15 Year 16 Year 17 Year 18 Year 19 Year 20 Year 21 Year 22 Year 23 FY 2033 FY 2034 FY 2035 FY 2036 FY 2037 FY 2038 FY 2039 FY 2040 FY 2041 FY 2042 FY 2043 FY 2044 2032-2033 2033-2034 20342035 2035-2038 2036-2037 2037-2038 2038-2039 2039-2040 2040-2041 2041-2042 2042-2043 2043-2044 [Remus I Academic Revenue Miami City Ballet Dorm room 2-2 145,269 148,175 151,138 154,161 157,244 160,389 163,597 166,869 170,206 173,610 177,083 180,624 Dorm room 2-2 OBL 225,975 230,494 235,104 239,806 244,602 249.494 254,484 259.574 264,765 270,061 275,462 280,971 RA Unit 24,212 24,696 25,190 25,694 26,207 26,732 27,266 27.811 28,368 28.935 29,514 30,104 Director Unit 39,369 40,156 40,960 41,779 42,614 43,467 44,336 45,223 46,127 47,050 47,991 48,951 Workforce Housing Studio-80%AMI 218,997 225,567 232,334 239,304 246,483 253,877 261.494 269.339 277,419 285,741 294.313 303.143 1 bed-80%AMI 281,685 290,135 298.839 307,805 317,039 326,550 336,346 346,437 356,830 367,535 378,561 389,918 2bed-80%AMI 478,748 493,110 507,903 523,141 538,835 555,000 571,650 588,799 606,463 624.657 643,397 662,699 Studio-120%AMI 328.495 338,350 348,501 358,956 369,724 380,816 392.241 404,008 416,128 428,612 441,470 454.714 1 bed-120%AMI 457.738 471,470 485.614 500,182 515,188 530,643 546.563 562,960 579,848 597.244 615,161 633,616 2 bed-120%AMI 708,318 729,568 751,455 773,998 797,218 821,135 845,769 871,142 897.276 924.194 951,920 980,478 Gross Potential Rent 2,908,805 2,991,721 3,077,037 3,164,825 3,255,155 3,348,103 3,443,745 3,542,161 3,643,431 3,747,639 3,854,872 3,985,217 Retail Income(2%annual increases) 181,622 185,255 188,960 192,739 196,594 200,526 204,536 208,627 212,800 217,056 221,397 225,825 Less:Vacancy of Retail and Rental Ina (185,426) (190,619) (195,960) (201,454) (207,105) (212,918) (218,897) (225,047) (231,374) (237,882) (244,576) (251,463) Other Income 31,438 32,381 33,353 34,353 35,384 36,445 37,539 38,665 39,825 41,019 42,250 43,518 Net Rental Revenue 2,936,440 3,018,738 3,103,390 3,190,483 3,280,028 3,372,156 3,466,923 3,564,405 3,664,681 3,767,832 3,873,942 3,983,097 Marketing&Leasing 11.108 11,441 11.785 12,138 12,502 12,877 13,264 13,662 14.071 14,494 14.928 15,376 Administrative 22,007 22,667 23,347 24,047 24,769 25,512 26,277 27.065 27,877 28,714 29,575 30,462 Property Management Fee 146.822 150,937 155,170 159,523 164,001 168,608 173.346 178,220 183,234 188.392 193,697 199.155 Property Insurance 126.800 130,604 134,522 138,558 142,715 146,996 151,406 155,948 160,627 165,445 170,409 175,521 Utilities 54.493 56,127 57,811 59,546 61,332 63,172 65,067 67,019 69,030 71,100 73,233 75,430 Payroll 125,752 129,525 133,410 137,413 141,535 145,781 150,155 154,659 159,299 164,078 169,000 174,070 Common Area&Amenities 25.150 25,905 26,682 27,483 28.307 29,156 30,031 30,932 31.860 32,816 33,800 34,814 Fire&Life Safety 7.336 7,556 7,782 8.016 8,256 8.504 8,759 9.022 9,292 9.571 9.858 10,154 - Grounds&Landscaping - - - - - - Repairs&Maintenance 32,486 33,461 34,464 35,498 36,563 37,660 38,790 39,954 41,152 42,387 43,658 44,968 Turnover 16.767 17,270 17,788 18,322 18,871 19,437 20,021 20,621 21,240 21,877 22,533 23,209 Bad Debt 14,948 15.397 15,858 16,334 16,824 17,329 17,849 18,384 18,936 19,504 20,089 20,692 Total Operating Expense 583,668 600,889 618,620 636,877 655,676 675,033 694,964 715,488 736,618 758,377 780,782 803,852 Pet Omani!Income j 2,352,771 2,417,850 2,484,770 2,553,586 2,624,352 2,697,124 2.771,980 2,848,919 2.928,063 3,009,455 3,093,160 3,179,244 501 c3 Owner Expenses Replacement Reserves 38,360 39,511 40,696 41,917 43,175 44,470 45,804 47,178 48.594 50,052 51,553 53,100 Other Non-Operating-NCCD Fees 78,286 80,635 83,054 85,546 88.112 90,755 93,478 96,282 99,171 102,146 105,210 108,367 Asset Management Fee 29,896 30,793 31.717 32.668 33,648 34,658 35,698 36,769 37.872 39,008 40.178 41,383 Total Additional Expenses 146.543 150,939 155,467 , 160,131 164,935 169,883 174.980 180,229 185,636 191,205 196.941 202,850 Total Cash Available for Debt Service 2,206,228 2,266,910 2,329,303 2,393,455 2,459,416 2,527,240 2,596,980 2,868,690 2,742,427 2.818,250 2,896,219 2,976,395 Pat Undo, . Annual Debt Service (1,401,239) (1,401.7611 (1,400,974) (1,398.855) (1,400,709) 11.400,974) (1,399.649) (1.402,033) (1.402,563) (1,401.239) (1,398,080) (1,398,325) Total Debt Service (1,401,239) (1,401.768) (1,400,974) (1,398,855) (1,400,709) (1,400,974) (1,399.649) (1,402,033) (1,402,563) (1,401.239) (1,398,060) (1,398,325) Cashfowafter Debt Service 804,990 865,142 928,329 994,600 1,058,708 1.126,267 1,197,330 1,266,656 1,339,864 1,417.011 1,498,159 1,578.070 Debt Service Coverage Ratio 1,57 1.82 1 1.66 1.71 1.76 1.80 1.86 1.90 1.96 2.01 2.07 2.13 ''.,,,•''q .r"+ir y-+.,.-• " "t :‘.,,,r- :.eti , r:•` 1 1.,. it.`11 ....."G ....r*i.., 4.'''%i Atl.,• ,_f. .'SlVI:II` :vel. . , :° - 61,a, .,Jr•a _ ,.t::v. l•?. :,' `r,. t.,:.:...i,• „,-,K '✓n,. .,.: . .( Page 225 of 15 6 E R V 1 TAS 3of6 ..:LtIG .Alt atAt ES1Arr. SINNVCLS 9/18/2020 Confidential Collins Park Artist Workforce Housing Operating Pro forma Year 24 Year 25 Year 26 Year 27 Year 28 Year 29 Year 30 Year 31 Year 32 Year 33 Year 34 Year 35 FY 2045 FY 2048 FY 2047 FY 2048 FY 2049 FY 2050 FY 2051 FY 2052 FY 2053 FY 2054 FY 2055 FY 2056 2044-2045 2045-2046 2046-2047 2047-2048 2048-2049 2049-2050 2050-2051 2051-2052 2052-2053 2053-2054 2054-2055 2055-2056 Academic Revenue Miami City Ballet Dorm room 2-2 184,237 187,921 191.680 195,514 199,424 203,412 207,481 211,630 215,863 220,180 224,584 229,075 Dorm room 2-2 DBL 286,590 292,322 298,169 304,132 310,215 318,419 322,747 329,202 335,786 342,502 349,352 356,339 RA Unit 30,706 31,320 31,947 32,586 33.237 33,902 34,580 35,272 35,977 36,697 37,431 38,179 Diredor Unit 49,930 50,928 51.947 52,986 54,045 55,126 56,229 57,353 58,500 59,670 60,864 62,081 Workforce Housing Studio-80%AMI 312,237 321,604 331,252 341,190 351,426 361.968 372,828 384,012 395,533 407,399 419,621 432,209 1 bed-80%AMI 401,615 413,664 426,073 438,856 452,021 465,582 479,549 493,936 508,754 524,017 539,737 555,929 2bed-80%AMI 682,580 703.057 724,149 745.873 768,250 791,297 815,036 839,487 864,672 890,612 917,330 944,850 Studio-120%AMI 468,356 482,406 496,879 511,765 527,139 542,953 559,241 576,019 593,299 611,098 629,431 648,314 t bed-120%AMI 652,624 672,203 692,369 713,140 734.535 756,571 779,268 802,646 826,725 851,527 877.073 903,385 2 bed-120%AMI 1,009,892 1,040,189 1,071,395 1,103,536 1,136,642 1,170,742 1.205,864 1,242,040 1,279,301 1,317,680 1,357,211 1,397,927 Gross Potential Rent 4,078,787 4,195,818 4,315,859 4,439,598 4,568,933 4,697,972 4,832,823 4,971,597 5,114,410 5,261,381 5,412,632 5,568,289 Retail Income(2%annual increases) 230,341 234,948 239,647 244,440 249,329 254,315 259,401 264,589 269,881 275,279 280,784 286,400 Less:Vacancy of Retail end Rental/nix (258,546) (265,834) (273,330) (281,042) (288,976) (297,137) (305,533) (314,171) (323,057) (332,200) (341,605) (351,281) Other Income 44,823 46,168 47,553 48,979 50,449 51,962 53,521 55,127 56,781 58,484 60,239 62,046 Net Rental Revenue 4,095,385 4,210,898 4,329,729 4,451,975 4,577,735 4,707,112 4,840,212 4,977,142 5,118,015 5,262,945 5,412,050 5,585,453 Marketing&Leasing 15,837 16,313 16,802 17,306 17,825 18.380 18,911 19,478 20,062 20,664 21,284 21,923 Administrative 31,376 32,317 33,287 34,286 35,314 36,374 37,465 38,589 39,746 40,939 42,167 43,432 Property Management Fee 204,769 210,545 216,486 222,599 228,887 235.356 242,011 248,857 255,901 263,147 270,603 278,273 Property Insurance 180,787 186,210 191,796 197,550 203,477 209.581 215,869 222,345 229,015 235,885 242.962 250,251 Utilities 77,693 80,024 82.425 84,898 87,445 90,068 92,770 95.553 98,420 101,372 104,413 107,546 Payroll 179,292 184,671 190,211 195,918 201,795 207,849 214,085 220,507 227,122 233.936 240,954 248,183 Common Area&Amenities 35,858 36,934 38,042 39,184 40,359 41,570 42,817 44,101 45,424 46,787 48,191 49,637 Fire&Life Safety 10,459 10,772 11,096 11,429 11,771 12,125 12,488 12,863 13,249 13,646 14.056 14,477 Grounds&Landscaping - - - - - - - - - - Repairs&Maintenance 46,317 47,707 49,138 50,612 52,130 53,694 55,305 56,964 58,673 60,433 62,246 64,114 Turnover 23,906 24,623 25,362 26,122 26,906 27,713 28,545 29,401 30,283 31,191 32,127 33,091 Bad Debt 21,312 21,952 22,610 23,289 23,987 24,707 25,448 26212 26,998 27,808 28.642 29,501 Total Operating Expense 827,608 852,069 877,256 903,191 929,897 957,396 985,712 1,014,870 1,044,894 1,075,810 1,107,645 1,140,427 h,tOpsnfthtpmemo 1 3,287,777 3,358,829 3,452,473 3,548,783 3,647,838 3,749,716 3,854,499 3,962,272 4,073,121 4,187,134 4,304,405 4,425,027 501 c3 Owner Expenses Replacement Reserves 54,693 56,333 58,023 59,764 61,557 63,404 65,306 67,265 69,283 71,362 73,502 75,707 Other Non-Operating-NCCD Fees 111,618 114,966 118,415 121,968 125,627 129,395 133,277 137,276 141,394 145,636 150,005 154,505 Asset Management Fee 42,625 43,904 45,221 46,577 47,975 49,414 50,896 52,423 53,996 55,616 57,284 59,003 Total Additional Expenses 208,935 215,203 221,659 228,309 235,158 242,213 249,480 256,964 264,673 272,613 280.791 289,215 Total Cash Available for Debt Service 3,058,842 3,143,626 3,230,813 3,320,474 3.412,680 3,507,503 3,605,020 3,705,308 3,808,448 3,914,521 4,023,613 4,135,811 Annual Debt Service (1,401,768) (1,402,828) (1,401,504) (1.397,795) (1,402,298) (1,398,590) (1,402,828) Total Debt Service (1,401,768) (1,402,828) (1.401,504) (1,397,795) (1.402,298) (1,398,590) (1,402,828) - Cashflowafter Debt Service 1,657,074 1,740,798 1,829,310 1,922,679 2,010,381 2,108,913 2,202,192 3,705,308 3,808,448 3,914,521 4,023,613 4,135,811 Debt Service Coverage Ratio 2.18 2.24 2.31 2.38 2.43 2.51 2.57 - - - . . .ems`:": .' .'i.-:"..,. .t rt. .._•_het:I,. i_::.8..Gx t t .- .l: f__..:/,RAW. •,. ..'xs.."0s ...01..t: ..-:;'i..•.; ::;4r•1‘.: _ .,... . :ate!... .. . .?",'KA it, Page 226 of 1556 E R V : I A S 4of6 . .:IiiGA•I RI AL IsTAII' SI,V:CI5 9/18/2020 Confidential Collins Park Artist Workforce Housing Operating Pro forma , Year 38 Year 37 Year 38 Year 39 Year 40 Year 41 Year 42 Year 43 Year 44 Year 45 Year 48 Year 47 FY 2057 FY 2058 FY 2059 FY 2060 FY 2061 FY 2062 FY 2063 FY 2064 FY 2065 FY 2066 FY 2087 FY 2068 2056-2057 2057-2058 2058-2059 2059-2060 2060-2061 2061-2062 2082-2063 2063-2064 2064-2085 2065-2066 2066.2087 2067-2068 Revenue 1 Academic Revenue Miami City Ballet Dorm room 2-2 233,657 238,330 243,096 247,958 252,918 257,976 263,135 268,398 273,766 279,241 284,826 290,523 Dorm room 2-2 DBL 363,466 370,735 37B,150 385.713 393,427 401,296 409,322 417,508 425,658 434,376 443,063 451,924 RA Unit 38,943 39,722 40,516 41,326 42,153 42,998 43,856 44,733 45,628 46,540 47,471 48,420 Director Unit 63,323 64,589 65,881 67.199 68,543 69,913 71,312 72.738 74,193 75,676 77,190 78,734 Workforce Housing Studio-80%AMI 445.176 458,531 472,287 486.455 501,049 516,080 531,563 547.510 563,935 580,853 598,279 616,227 1 bed-80%AMI 572,607 589,785 607,479 625,703 644,474 663,809 683,723 704,234 725,361 747,122 769,536 792,622 2 bed-80%AMI 973.195 1,002.391 1.032.463 1,063.437 1,095,340 1,128,200 1,162.046 1,196,908 1,232,815 1,269,799 1,307,893 1,347,130 Studio-120%AMI 667,763 687,796 708,430 729,683 751,574 774,121 797,344 821,265 845,903 . 871,280 897,418 924,341 1 bed-120%AMI 930,486 958,401 987,153 1,016.768 1,047,271 1,078,689 1,111,049 1,144,381 1,178,712 1,214,074 1,250.496 1,288,011 2 bed-120%AMI 1439,865 1,483,061 1,527,552 1,573,379 1,620,580 1,669.198 1.719,274 1,770.852 1.823,977 1,878,697 1.935,058 1.993.109 Gross Potential Rent 5,728,481 5,893,341 8,063,008 6,237,622 6,417,328 6,602,278 6,792,624 6,968,527 7,190,149 7,397,659 7,611.230 7,831,042 Retail Income(2%annual increases) 292,128 297,971 303,930 310,009 316,209 322,533 328.984 335,563 342.275 349,120 356,103 363,225 Less:Vacancy of Retail and Rental Ina (361,237) (371,479) (382,016) (392,858) (404,012) (415,489) (427,296) (439,445) (451,945) (464,807) (478,040) (491,656) Other Income 63,907 65,824 67,799 69,833 71.928 74,086 76,308 78,598 80,958 83,384 85,886 88.462 Net Rental Revenue 5,723,280 5,885,658 6,052.721 6,224,606 6,401,453 6,5831408 6,770,820 6,963,242 7,161,434 7,365,357 7,575,179 7,791,073 Marketing&Leasing 22,580 23,258 23,956 24,674 25.415 26,177 26,962 27,771 28,604 29,462 - 30.346 31,257 Administrative 44,735 46,077 47,459 48,883 50,350 51.860 53,416 55,018 56,659 58,369 60,120 61,924 Property Management Fee 286,164 294,283 302,636 311,230 320.073 329,170 338,531 348.162 358,072 368,268 378,759 389.554 Property Insurance 257,758 265,491 273,456 281,660 290.109 298.813 307,777 317,010 326,521 336.316 346,406 356,798 Utilities 110,772 114,095 117,518 121,044 124,675 128,415 132,268 136,236 140.323 144,533 148,869 153,335 Payroll 255,628 263,297 271.196 279,332 287,712 296.343 305,233 314,390 323,822 333,537 343.543 353,849 Common Area&Amenities 51,126 52,659 54.239 55,866 57,542 59,269 61,047 62,878 64,764 66,707 68.709 70,770 Fire&Life Safety 14,912 15,359 15.820 16,294 16,783 17,287 17,805 18,339 18.890 19,456 20,040 20,641 Grounds&Landscaping - - - - - - - Repairs&Maintenance 66,037 68,018 70,059 72,161 74.326 76,555 78.852 81,218 83,654 86,164 88,749 91,411 Turnover 34,084 35,106 36,159 37,244 38,362 39,512 40.698 41,919 43,176 44,472 45,806 47,180 Bad Debt 30,386 31,298 32,237 33,204 34,200 35,226 36,283 37,371 38,493 39,647 40,837 42,062 Total Operating Expense 1,174,183 1,208,942 1,244,735 1,281,592 1,319,546 1,358,628 1,398,672 1,440,313 1,482,987 1,526,931 1,572,182 1,818,779 Pile 013151102 Income I 4.549,097 4,676,715 4,807,985 4,943,013 5,081.907 5224.780 5,371,748 5,522,929 5,678,446 5,838,426 6,002,997 6,172,293 501 c3 Owner Expenses Replacement Reserves 77,979 80,318 82,726 85,209 87,766 90,399 93,111 95,904 98,781 101,744 104,797 107,941 Other Non-Operating-NCCD Fees 159,140 163,914 168.832 173,897 179,114 184,487 190,022 195,722 201,594 207,642 213.871 220,287 Asset Management Fee 60,773 62,596 64.474 66.408 68,400 70,452 72.566 74.743 76,985 79.295 81,674 84,124 Total Additional Expenses 297,892 306,828 316,033 325,514 335,280 345,338 355,698 • 366,369 377,360 388,681 400,341 412.352 Total Cash Available for Debt Service 4,251,205 4,369,887 4,491,952 4,617,499 4,746,628 4,879,442 5,016,050 5,156,560 5,301,086 5,449,745 5,602,655 5,759,942 MatteitYke . I Annual Debt Service Total Debt Service Cashflow after Debt Service 4,251,205 4,369,887 Debt Service Coverage Ratio .,` ---.i .. F . - ;• 04 ""..:1. y,,rstx._'......1.' Y'.cif.. .BaJt7S.:. ,`'. ! aj3', ia.4st . NRAY .. > JY4G't.. .Al": . Page 227 of 1558 E R V I T A S 5of6 '.!71IIG'A't 7FAL ESTATE 5r4V•rI'S 9/18/2020 Confidential Operating Pro forma Year 48 'fear 49 Year 50 Year 51 FY 2069 FY 2070 FY 2071 FY 2072 2068-2069 2069-2070 2070-2071 2071-2072 law 1 Academic Revenue Miami City Ballet Dorm room 2-2 296,333 302,260 308.305 314,471 Dorm room 2-2 DBL 460,963 470,182 479,586 489.177 RA Unit 49,389 50,377 51,384 52,412 Director Unit 80,309 81,915 83,553 85.224 Workforce Housing Studio-80%AMI 634,714 653,755 673,368 693,569 1 bed-80%AMI 816,401 840,893 866,120 892.103 2 bed-80%AMI 1,387,544 1,429,170 1,472,045 1,516,207 Studio-120%AMI 952,071 980,633 1,010,052 1,040,354 1 bed-120%AM 1,326,651 1,366,451 1,407,444 1,449,668 2 bed-120%AMI 2,052,903 2,114,490 2,177,925 2,243,262 Gross Potential Rent 8,057,277 8,290,125 8,529,782 8,776,447 Retail Income(2%annual increases) 370,489 377,899 385,457 393,166 Less:Vacancy of Retail and Rental Inco (505,666) (520,081) (534.914) (550,177) Other Income 91,116 93,850 96,665 99.565 Net Rental Revenue 8,013,218 8,241,792 ' 8,476,989 8,719,001 Marketing&Leasing 32,194 33,160 34,155 35,180 Administrative 63,781 65,695 67,666 69,696 Property Management Fee 400.661 412,090 423.849 435.950 Property Insurance 367,502 378,527 389,883 401,579 Utilities 157,935 162,673 .167,553 172,579 Payroll 364,465 375,399 386,661 398,260 Common Area&Amenities 72,893 75,080 77,332 79,652 Fire&Life Safety 21,260 21,898 22,555 23,232 Grounds&Landscaping - - - - Repairs&Maintenance 94,153 96,978 99,887 102,884 Turnover 48,595 50,053 51,555 53,101 Bad Debt 43,324 44,623 45,962 47,341 Total Operating Expense 1,666,763 1,716,175 1,767,058 1,819,454 - Pitt ap11o11Ymono 1 6,346,453 6.525,617 6,709,932 6,899,547 501 c3 Owner Expenses Replacement Reserves 111,179 114,514 117,950 121,488 Other Non-Operating-NCCD Fees 226,896 233,703 240.714 247.935 Asset Management Fee 86,648 89,247 91.924 94,682 Total Additional Expenses 424,722 437,464 450,588 464.105 Total Cash Available for Debt Service 5,921.731 6,088,153 6,259,344 6,435,441 INN WOW 1 Annual Debt Service Total Debt Service Caahflow after Debt Service Debt Service Coverage Ratio Page 228 of 15b ERV . T A S . 6of6 CC:AEG:A-E it A. EETArr 51Yv-cr4 9/18/2020 r Miami Beach Milestone and Predevelopment Schedule Projected Financial Closing Dec-21 Projected Expenditures until Financial Closing 1,306,250 Milestone Sep•20 Oct-20 Nov-20 Dec-20 Jan-21 Feb-21 Mar-21 I FERC award recommendation City Commission contract award A Planning Board approval of ground lease A Feasibility Studies 20,000 City Commission approval of development agreement/ground lease A Retainer of Local Architect,Shulman+Associates 15,000 Preapplication Meeting A Submit SDs to HPB A HPB approval of design A HPB Fees Due 30,000 Shulman Fees 18,750 18,750 18,750 City Commission approval of unit size waivers A Planning Board recommendation of unit size waiver PGAL Fees 16,500 16,500 16,500 Permitting Third Party Consultant Fees Due Estimating and financial expenses 2,143 2,143 2,143 2,143 2,143 2,143 Travel expenses 3,571 3,571 3,571 3,571 3,571 3,571 Miscellaneous expenses 2,143 2,143 2,143 2,143 2,143 2,143 Legal expenses 8,929 8,929 8,929 8,929 8,929 8,929 Accounting and bookkeeping expenses 1,429 1,429 1,429 1,429 1,429 1,429 Financial Close and Break Ground Opening _ _ • Page 229 of 1576 Apr-21 ' May-21 Jun-21 Jul-21 Aug-21 Sep-21 Oct-21 Nov-21 Dec-21 18,750 18,750 18,750 18,750 18,750 A A 30,938 30,938 30,938 30,938 49,500 49,500 49,500 49,500 90,000 46,875 46,875 46,875 46,875 46,875 46,875 46,875 46,875 2,143 2,143 2,143 2,143 2,143 2,143 2,143 2,143 3,571 3,571 3,571 3,571 3,571 3,571 3,571 3,571 2,143 2,143 2,143 2,143 2,143 2,143 2,143 2,143 8,929 8,929 8,929 8,929 8,929 8,929 8,929 8,929 1,429 1,429 1,429 1,429 1,429 1,429 1,429 1,429 A A Page 230 of 1576 — — — — — — — — ---. ... - . 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