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HomeMy WebLinkAboutRESPONSE - RFP - 8189 HORSETOOTH LAND BANK DEVELOPERVillage on Horsetooth Proposal 8189 Page | 2 FORT COLLINS HOUSING AUTHORITY | 2015 Horsetooth Proposal November 30, 2015 Land Bank Selection Panel City of Fort Collins 300 LaPorte Avenue Fort Collins, CO 80521 Dear Selection Panel, FCHA is pleased to submit this proposal in response to the City RFP for development of affordable housing on the Horsetooth Land Bank property. As the City of Fort Collins’ primary developer and manager of affordable housing for over 40 years, all aspects of FCHA’s work supports our local families, businesses, employees, organizations, and unlike out-of-town private developers, the investment stays right here. We are committed to our community, committed to sustainability, and committed to quality. We are uniquely positioned to take advantage of an immediate opportunity to effectively utilize the Horsetooth Land Bank property for a successful funding award and development of 96 perpetually affordable family rental units. Seizing this limited time opportunity in which our community needs, priorities and the land bank opportunity align with the priorities specified in the 2016 CHFA Low Income Housing Tax Credit Qualified Application Plan (QAP), FCHA will successfully compete and secure 4% LIHTCs, HUD Disaster Recovery funds, and Colorado State Housing Tax Credits. Seizing this limited opportunity to align our community needs, priorities and the land bank opportunity with the priorities specified in the 2016 CHFA Low Income Housing Tax Credit Qualified Application Plan, FCHA will successfully compete and secure 4% LIHTCs, HUD Disaster Recovery funds, and Colorado State Housing Tax Credits. As Fort Collins’ largest and most successful developer of affordable housing for our community’s lowest income families, and as the City’s affordable housing development arm, FCHA has been very successful in competing for tax credit and other major funds. The City’s contribution of this Land Bank property will show the local support that these primary funders require in this very competitive application round. The pairing of FCHA as a proven entity to CHFA and Division of Housing along with Land Bank property activation makes for a very strong project. We look forward to working together to make this project come to life. Sincerely, Julie J. Brewen CEO Page | 3 FORT COLLINS HOUSING AUTHORITY | 2015 Horsetooth Proposal Fort Collins Housing Authority Overview Fort Collins Housing Authority (FCHA) is the largest affordable housing developer and property management company in Fort Collins, and one of the top performing housing authorities in the country. FCHA owns over 1,000 housing units and assists over 1,100 households with rent assistance and support, helping more than 5,200 individuals through innovative, award-winning affordable housing and programs. FCHA was formed as a quasi-governmental entity under state enabling legislation in 1971. FCHA is governed by a Board of Commissioners appointed by the Fort Collins City Council, but it is a separate entity from the City of Fort Collins with its own funding mechanisms. FCHA secures public and private sector funds (federal, state and local) to develop, manage and administer affordable housing programs for individuals and families in Fort Collins. Through intergovernmental agreements, FCHA administers programs for the Larimer County Housing Authority and the Wellington Housing Authority. FCHA also provides program and property management for Villages, Ltd. and the Northern Hotel LLP. FCHA serves families, seniors, and people with special needs with the full spectrum of affordable housing, including supportive housing for formerly homeless people, a range of affordable rentals, and homeownership opportunities. • 41% of residents are families • 23% of residents have a disability • 18% of residents are seniors Just as a house is built upon a solid foundation, Fort Collins Housing Authority is built upon its Mission: To create vibrant, sustainable communities throughout Fort Collins. Page | 4 FORT COLLINS HOUSING AUTHORITY | 2015 Horsetooth Proposal Our Core Values Teamwork: We work collaboratively and as a team, seeking the input of those who are affected by our work, internally and externally, and partner with like-minded groups to achieve our mission. Fun: We strive to create a healthy and fun work environment for our employees, and we reflect that in our interactions with our residents, board members, investors, partners, and with each other. Compassion: We are compassionate about those we work to serve, serving as advocates on their behalf. We support programs, policies and groups that create opportunities for them to create positive change in their lives. Honesty: We value honesty and maintain high ethical standards in every aspect of our business. Accountability: We are accountable for the quality of our job performance and the responsible management of the resources in our care. Our Business Objective To achieve this mission, all FCHA functions are operated with attention paid to a triple bottom line: • Maintaining the fiscal viability of the organization. • Achieving a social goal through the provision of affordable housing and supportive services. • Achieving environmental sustainability. Programs FCHA currently assists approximately 2,212 families (5,200 individuals) throughout Larimer County through various programs, the majority of which serve 30 to 50% Area Median Income households. These include: • The Villages Affordable Housing – Owner/developer/manager of multiple properties ranging from single-family homes to a 95-unit apartment complex. • Housing Choice Voucher (HCV) Program, including Veterans Affairs Supportive Housing Vouchers (VASH) – Rent assistance paid to the landlord directly. Families then pay approximately 30% of income toward the actual rent and the subsidy pays the difference. • Public Housing (Fort Collins & Wellington) – Federally subsidized rentals for families earning very low incomes. • Permanent Supportive Housing (PSH) – The PSH program is designed to meet the special housing needs of formerly homeless households with disabilities and homeless veterans. Redtail Ponds is a mixed-income PSH development that provides long-term housing with onsite services such as case management and counseling to promote stability and independence. • Single Room Occupancy (SRO) Supportive Housing – This program supports 27 single rooms with shared bathrooms and kitchens located on two sites. Onsite services are provided, such as case management and counseling, to promote stability and independence. • Family Self-Sufficiency (FSS) Program – Provides individual, intensive self-sufficiency case management for families and individuals in the Public Housing, HCV and PSH programs. • Homeownership Program – This program is for families working toward homeownership. Voucher payments are paid toward a mortgage rather than rent. Page | 5 FORT COLLINS HOUSING AUTHORITY | 2015 Horsetooth Proposal Awards and Achievements FCHA has received numerous awards for its project designs, innovations, environmental sustainability, accountability and financial reporting. Some awards FCHA prides itself in are: • 2015 Fort Collins Board of Realtors Housing Hero Award • 2015 Housing Colorado Eagle Award for Redtail Ponds • 2015 Colorado NAHRO Mountain Plains Award for Affordable Housing Design for Redtail Ponds • 2015 Colorado NAHRO Affordable Housing Project Award for Redtail Ponds • 2011 NAHRO National Award of Excellence in Project Design for Village on Stanford Sustainable Renovation • 2011 Colorado NAHRO Mountain Plains Award for Affordable Housing Design for Village on Stanford • 2011 Colorado NAHRO Energy and Green Building Award for Village on Stanford Sustainable Rehabilitation • 2011 Northern Colorado Renewable Energy Society (NCRES) Award for Exemplary Project for Village on Stanford • 2008 Colorado NAHRO Affordable Housing Design Award for Village on Elizabeth Rehabilitation • Colorado Department of Local Affairs- Recognition of valuable contributions to enhance the quality of life and livability in Fort Collins • 2006 Colorado NAHRO Administrative Innovation Award • 2003 Colorado NAHRO Resident and Client Services Award for Resale/Buyback Program HIGH PERFORMER – FCHA has received “High Performer” designation by the U.S. Department of Housing and Urban Development (HUD) since 2001. HUD’s objective scoring systems affirm FCHA’s proven capability to ensure program integrity and accountability. FINANCIAL EXCELLENCE – The Government Finance Officers Association (GFOA) awarded FCHA with the Certificate of Achievement for Excellence in Financial Reporting in 2013. This certificate is awarded to organizations that go beyond minimum accounting principles to produce financial reports in the spirit of transparency and full disclosure. Page | 6 FORT COLLINS HOUSING AUTHORITY | 2015 Horsetooth Proposal Section 1 Project Approach Page | 7 FORT COLLINS HOUSING AUTHORITY | 2015 Horsetooth Proposal SECTION 1. Project Approach/Scope Building a better life and pursuing opportunity begins with having a safe place to live, and for more than four decades, FCHA has provided thousands of families with affordable homes. Many of those struggling to make ends meet are people we rely on each day – child care providers, bank tellers, teachers, medical assistants, security guards, retail clerks, and food service workers. The average income of these hard-working people is simply not enough to pay the rent on most homes in Fort Collins. Affordability is compounded for working parents, as the high cost of childcare is an additional, and expensive, burden. An affordable home is important, but just as important is the community that encompasses that home. FCHA invests in neighborhoods and our investment is a catalyst for stronger communities. Through comprehensive revitalization and development, FCHA transforms entire neighborhoods and provides safe and stable homes for families. Village on Horsetooth Development Plan The proposed Village on Horsetooth will include 96 new units of affordable housing separated into 10 individual buildings surrounding a large community green with community gardens, playground and walking paths. The mix of unit types includes townhomes and apartment homes with one, two, three and four bedrooms. There will be 194 vehicle parking spaces and convenient bike parking will be available at each building. The design of the community will be focused on health, sustainability, and neighborhood compatibility. Village on Horsetooth will offer much needed relief to the affordable housing rental shortage situation. It will assist the local workforce, as well as truly low-income residents, in meeting the housing needs of their families. The 10 residential buildings will include (8) 2-story flats, (2) rowhouse buildings, and one community clubhouse with a leasing office, programming space (for Resident Services and Kids’ Club), community room, fitness room and kitchen. The gross density will be 12 units/acre – in compliance with the Low- density Mixed Neighborhood (LMN) zone district. The traditional design includes gabled roofs, covered balconies, and pronounced timber entryways to ensure compatibility with the surrounding neighborhood. The character of the single-family neighborhoods to the east and north includes traditional two-story homes constructed in the 1980s and 90s. All of the residential buildings proposed will be two-story to blend into the surrounding context. The eclectic design of the newer townhomes to the west will help provide transition from the LMN zoning down to the surrounding Residential Low- density (RL) District. We have included a design concept for the Village on Horsetooth, including building elevations and an overall site plan. We started with the elevations from the Village on Redwood and modified the materiality and a few elements to a concept with a little more Farmhouse and Ranch in recognition of the current context. Page | 8 FORT COLLINS HOUSING AUTHORITY | 2015 Horsetooth Proposal This project will be certified under the Enterprise Green Communities Guidelines by utilizing various green building techniques, including compact development, smart framing, high R-values, water conserving features, energy efficient appliances and lighting, and compliance with Energy Star New Homes. Landscaping will include mostly native xeriscaping. Native habitat and adaptive species will be emphasized. Site lighting will be energy efficient and designed to minimize light pollution. In estimating the project cost, FCHA considered all strategies for the mandatory and identified optional criteria. Page | 9 FORT COLLINS HOUSING AUTHORITY | 2015 Horsetooth Proposal Page | 10 FORT COLLINS HOUSING AUTHORITY | 2015 Horsetooth Proposal Bedroom and Unit Mix • (3) one-bedroom/1 bath • (64) two-bedroom/1 bath • (28) three-bedroom/2 bath • (1) four-bedroom/2 bath Area Median Income Target Note: One unit will be an onsite manager unit and is not included in AMI unit count below Option 1 and 2 43 units at 0-30% AMI 52 units at 31-50% AMI Option 3 43 units at 0-30% AMI 52 units at 31-60% AMI Use of RAD FCHA has been chosen to participate in HUD’s Rental Assistance Demonstration (RAD) program to reposition its public housing portfolio. RAD is FCHA’s long term plan to providing more healthy and stable affordable housing in the community with sustainable funding sources. The proceeds from the sale of 19 public housing units will be committed as equity, and the Village on Horsetooth will include 16 RAD vouchers for households transferred from public housing. Unit and Project Amenities Unit amenities include: • In-unit washers and dryers • Balconies or patios • Energy Star appliances – dishwasher, range, microwave • Energy efficient heating and air conditioning • Open floor plan Common area project amenities include: • Community building with two offices for property management and resident services, a fitness room, kitchen, great room with seating, patio and wireless connectivity • Covered and uncovered bike parking • A large playground • A community green sufficiently large for various games and other activities • A community garden with raised beds and a tool shed • A pedestrian/bike path that loops throughout the site • Bicycle storage and parking areas Page | 11 FORT COLLINS HOUSING AUTHORITY | 2015 Horsetooth Proposal Location The location of the Horsetooth property is very close to Village on Cunningham Corner property, just a half-mile to the east, making this ideal for FCHA to be able to effectively manage and provide services for residents. The property provides great access to community amenities, such as: • One mile from one of the best parks in the City, Spring Canyon Park • About one mile from elementary, middle and high schools • Just over one mile from the MAX Horsetooth Station • Less than two miles from the newly redeveloped Foothills Mall FCHA believes that providing affordable housing in a strong, healthy, and stable neighborhood such as this will help promote the health and success of residents. Financing The approximately $23.6 million project will be funded with owner equity and a combination of local, state, and federal grants, as well as state and federal low income housing tax credits. This includes the following: Source Status CDBG Disaster Recovery Application due Feb 2016 Federal Tax Credit Equity (4%) LOI submitted and application due Feb 2016 State Tax Credit Equity LOI submitted and application due Feb 2016 PAB First Mortgage LOI provided Owner Equity See Narrative about RAD City CDBG/HOME Needed for Options 1 and 2 Deferred Developer Fee Committed FCHA plans to commit approximately $2.7 million of its own equity to the project from proceeds of the sale of public housing units under HUD’s RAD Program. FCHA will also contribute an equity contribution in the form of deferred developer fees of approximately $488,000 to $673,000 depending upon which option is chosen. The project development budget was created using current construction development pricing from Village on Redwood, a similar product type with similar materials. OZ Architecture was used as they are currently working on the Redwood development, expediting the process significantly. FCHA is excited and proud of the Redwood design and notes that this is not a cookie cutter design like those used by large out of state developers. This is a design that has been created specifically for Fort Collins with our sustainability and design requirements, neighborhood compatibility and preferences in mind. Page | 12 FORT COLLINS HOUSING AUTHORITY | 2015 Horsetooth Proposal Community Outreach Fort Collins Housing Authority is committed to thoughtful, transparent, and inclusive public outreach. Utilizing national best practices and tools developed specifically for affordable housing development, FCHA works to uncover any key issues and stakeholder desires at the beginning of the process. In its most recent developments, Village on Redwood and Redtail Ponds, FCHA exceeded the City’s requirements for community involvement. During the Redwood planning process, FCHA reached out to neighbors well beyond the required notification area of 800 feet, electing to extend notification to nearly 3,000 feet for all meetings. This area included over 1,000 properties. FCHA hosted a neighborhood meeting early in the process to gather feedback for the site layout and design and held a second meeting as the design advanced to keep the community informed about the project. Neighborhood comments were incorporated into the final site plan. FCHA will involve the community in its planning process for Village on Horsetooth just as it did with these previous developments. It will use community meetings to address any concerns with neighbors and gather their input for refining the site plan and community design. Good Neighbor Policy FCHA is committed to not only providing safe and affordable housing, economic opportunity, and living environments free from discrimination, but promoting these opportunities as well. FCHA believes that one of the best ways to promote affordable housing is by being a Good Neighbor to the community at large. Our Good Neighbor practices are present throughout all FCHA properties as we strive to make our sites as valuable to our neighbors as they are to our residents, and embrace the following principles: Commitment to Attractive Neighborhoods FCHA is committed to the long term preservation of our properties through our preventive maintenance and ongoing curb appeal enhancement programs. We strive to make our properties positive assets to their neighborhoods and to foster a sense of neighborhood pride among all residents in the area. All FCHA properties receive weekly landscaping maintenance and daily trash patrols to help us keep our facilities attractive and neat. Commitment to Safety FCHA recognizes that safety and security are essential for people to live peacefully and free from harm and we promote Good Neighbor relationships with the community at large. All FCHA properties incorporate elements that promote safety, such as sufficient lighting, safe walkways, etc. FCHA responds to all complaints concerning residents immediately and has strong working relationships with local police, in case their assistance is ever needed. Page | 13 FORT COLLINS HOUSING AUTHORITY | 2015 Horsetooth Proposal Commitment to a Respectful Standard of Conduct FCHA understands that a peaceful community hinges upon mutually respectful behaviors and conduct; thus, we enter into lease agreements with all of our residents that stipulate behaviors and conduct that will not be tolerated, particularly those that are unlawful and/or infringe upon the rights of others. Commitment to Open Communication Feedback is important to FCHA, and we welcome it. FCHA ensures that our neighbors are informed about construction or maintenance work that may affect them, as well as policy changes and program development, as appropriate. We provide neighbors with our contact information so they can communicate their concerns with us at any time. Resident Services People are at the core of all that we do. Though every business needs to pay attention to the bottom line, for FCHA the bottom line is about the people we help and the community we strengthen as a result. A home with an affordable rent is a stepping stone. To help residents take the next step, FCHA provides targeted programs and services that help improve the community one resident at a time. Through coaching and education, residents learn skills and are supported in making their dreams of stability and hope a reality. FCHA provides services to residents through several means including the Family Self-Sufficiency Program, onsite programming, and crisis intervention. These services will be part of the support system provided to our residents at Village on Horsetooth. Family Self Sufficiency (FSS) Family Self-Sufficiency is a five-year academic, employment and saving incentive program designed to help low-income families gain education and career skills to move toward self-sufficiency. Through case management, the program provides life-skills guidance and linkages to network service providers. Participants are expected to make continual progress towards their educational and career goals while meeting the other program requirements of the FSS program to graduate successfully in five years. Upon entering the FSS program, a resident signs a Contract of Participation and works with their FSS Coordinator to outline an Individual Treatment and Service Plan with specific goals they want to accomplish. These goals commonly include: increasing income, budgeting, credit repair, increasing education/training, and employment. Participants then meet with their FSS coordinator on a regular basis to report progress and work through barriers that arise. Participants are eligible for an escrow savings account as their earn income increases. Participants must be suitably employed and free of cash assistance for the 12-month period prior to graduating. FCHA has provided the FSS program for over 15 years and typically has 150-200 families enrolled at any given time. On-Site Programming FCHA provides opportunities for residents at its various properties. FCHA partners with local agencies and providers to bring programs to residents in their own community rooms. We tailor programs directly to resident needs and coordinate classes and workshops from a central location, keeping Page | 14 FORT COLLINS HOUSING AUTHORITY | 2015 Horsetooth Proposal staffing costs lower. These include educational opportunities, and various community services, and social activities designed to build community. Examples include: • Weekly Kids’ Club where children can come to learn and create. This year we are working with the food bank to provide free healthy lunches and/or snacks to the children of our community. • Educational classes: budgeting, tax preparation, tutoring for children, community gardening, crafting and CSU extension classes on healthy cooking and nutrition • Safety seminars: self-defense classes and Fort Collins Police seminars on safe neighborhoods • Community building events: monthly movie nights, Neighborhood Night Out event, pot-luck dinners, holiday parties • Education Days where the local community college and university come on-site to provide information on enrollment and financial aid. In addition to the educational aspects, these activities and events all help the residents get to know one another and then look out for each other. The strengthening of these community bonds creates a sense of pride and respect for the community and results in a safer environment for all. Crisis Intervention Staff is also available to assist families in accessing resources in the event of a personal emergency. Property management and resident services staff work together to support families in working through difficult situations and brainstorming options and resources to assist the family. Our own staff of trained social workers are able to step in and help assess a situation and provide a bridge to the most helpful resources in the community. Property Management Services FCHA’s property management and maintenance staff provide services for FCHA-owned and managed properties. With decades of experience providing ownership with responsible and responsive property management services, major components of our property management services include: • Friendly and courteous customer service • Thorough new resident screening • Proactive marketing and leasing program to maintain high occupancy • Comprehensive day-to-day and preventative maintenance services • Regular property and unit inspections • Oversight and conformity with all regulations required by lenders, equity partners, and government agencies • Monthly financial statements to monitor operating costs and identify budget variances • Ongoing staff training in all aspects of property management • Focused risk management evaluations of property operations Page | 15 FORT COLLINS HOUSING AUTHORITY | 2015 Horsetooth Proposal Section 1 a Sustainability Page | 16 FORT COLLINS HOUSING AUTHORITY | 2015 Horsetooth Proposal 1.a. Sustainability Triple Bottom Line All FCHA functions are operated with attention paid to a triple bottom line: • Maintaining the fiscal viability of the organization • Achieving a social goal through the provision of affordable housing and supportive services • Achieving environmental sustainability Sustainability As an experienced developer and advocate of green building design, FCHA has an excellent record of utilizing construction and design techniques that are sensitive to the use of green building materials and practices during and after construction. We have staff certified as Leadership in Energy and Environmental Design Accredited Professionals (LEED AP). These professionals have advanced knowledge in green building and expertise in the design and construction phases of green buildings. FCHA has been committed to utilizing the City of Fort Collins Integrated Design Assistance Program and Enterprise Green Communities, and often contracts with the CSU Institute for the Built Environment for green building charrettes. FCHA walks the talk when it comes to sustainability practices, incorporating green building design, operations and maintenance at its corporate office on Mountain Avenue. Sustainability enhancements during its renovations in 2011: • Replaced all windows with high efficiency, Low-E (low emissivity) windows • Replaced all exterior and interior incandescent lighting with compact fluorescent lighting • Installed energy efficient furnaces with zoned HVAC system • Installed light sensors and room occupancy sensors • Increased insulation in exterior walls and attic • Added interior & exterior windows to all offices to utilize more natural light • Installed light shelves to utilize more natural light in larger rooms • Installed xeriscape landscaping In 2014 and 2015, FCHA's development team and consultants participated in green charrettes to incorporate City of Fort Collins Green Code and Enterprise Green Communities criteria and requirements into all design aspects for the site and building design for Village on Redwood. Those charrettes resulted in an apartment community designed with an integrated approach to health and wellbeing of its residents. Page | 17 FORT COLLINS HOUSING AUTHORITY | 2015 Horsetooth Proposal Village on Horsetooth Triple Bottom Line Approach The same elements that influenced the Redwood site and building design will also be implemented in the Village on Horsetooth. It will be accredited by Enterprise Green Communities rather LEED. Green Communities is required by the Colorado Housing Finance Authority for all Low Income Housing Tax Credit developments. As with Village on Redwood, the City of Fort Collins Integrated Design Assistance Program (IDAP) will be utilized. Green building design features include: • High efficiency heating and cooling equipment • EnergyStar appliances and highly efficient lighting • High A-value wall and attic insulation along with engineered building systems and low-E windows • Advanced water-conserving appliances and low-flow water fixtures • Low-and no-VOC paints, primers, carpeting, padding, adhesives and formaldehyde-free particle board • Building will be smoke-free with proper ventilation, mold prevention and radon mitigation • Resident and property management orientations that highlight the building's green features, goals and recycling program Green site design features include: • Internally connected open space and sidewalks to promote active living • Xeriscaping designed to consist of native and drought tolerant plants • Enhanced storm water detention and water quality • External connection to bicycle routes and covered bike parking • Community gardens that will allow families and individuals the opportunity to produce food and increase a sense of community • Twenty-five percent of parking spaces will be constructed with permeable pavers. Page | 18 FORT COLLINS HOUSING AUTHORITY | 2015 Horsetooth Proposal Sustainability Features in Previous Projects Redtail Ponds Permanent Supportive Housing – New Construction We installed a 60kW solar rooftop energy system at Redtail Ponds. The system is expected to receive an estimated $14,000 in annual payments from the City of Fort Collins Solar Purchase Program. Highlights include: • Transit Oriented Development (reduces vehicle dependency and promotes walking, biking and transit) • Xeriscape landscaping and efficient irrigation systems • Low impact development techniques including permeable paving • Low flow fixtures and appliances • All Energy Star Appliances, efficient lighting, photovoltaic system, high insulation values for walls and windows • Low VOC paint, environmentally preferable flooring, strong construction waste management • Solar Energy – 60kW solar rooftop energy system Village on Plum – Major Rehabilitation Village on Plum is realizing the benefit from low-flow toilets (0.8 gal as opposed to three gal). The 95 unit apartment community experienced a 51.87% reduction in water usage since installation in 2013. Highlights include: • High efficiency boilers with added pipe insulation • Energy efficient windows & exterior doors • Low flow fixtures and appliances • All Energy Star Appliances, efficient lighting, individual smart meters, increased insulation values of residential buildings • New roofs • Energy efficient Packaged Terminal Air Conditioners (PTACs) • Xeriscape landscaping and efficient irrigation systems Village on Matuka – Rehabilitation In its recent rehabilitation, this 20 unit apartment community replaced water consuming devices with advanced water- conserving appliances and low-flow water fixtures. The changes are expected to yield a 51% reduction in water usage and a 50% reduction in utility costs. Highlights include: • Energy efficient windows & exterior doors • New roofs • Energy Star Appliances, efficient lighting, increased insulation values of residential buildings • Low flow fixtures and appliances • Replacing exterior building lights and site lighting with energy star rated fixtures • Low VOC paint, environmentally preferable flooring, strong construction waste management • Xeriscape landscaping and efficient irrigation systems Page | 19 FORT COLLINS HOUSING AUTHORITY | 2015 Horsetooth Proposal Village on Stanford – Major Rehabilitation Thermal (Heating) Energy: The use of a thermal solar system in the Village in Stanford residential units has resulted in one million free BTUs of heating per day which is equivalent to 1,020 cu. feet of natural gas per day. This represents a carbon offset (carbon not being released into the atmosphere), of 41,760 pounds per year. This also represents an annual savings of $4,734 per year in natural gas heating costs. Solar (Electric) Energy: Following the 2009 installation of solar energy electric panels on the Village on Stanford Clubhouse, the carbon offset from January 2010 through December 2014 was 134,369 pounds of carbon. This offset is the equivalent of 1,731 trees in five years. Each year since the renovation, FCHA has received reimbursements from the transfer of excess electric energy back to the City of Fort Collins power grid. Highlights include: • Solar thermal array panels heat the domestic hot water, thus decreasing natural gas consumption of the boiler systems • High efficiency boilers • Geothermal exchange heating and cooling of the net-zero energy clubhouse along with energy efficient building design components including a large thermal mass wall and floor, insulation, lighting, and other materials • Photovoltaic panels generating enough electricity to power the clubhouse • Preserved existing mature trees for shade • Highly efficient material and color choices for roofing and the asphalt shading of the carports reduce the “heat island effect” • All appliances are Energy Star rated • Low-flow toilets, showers and high efficiency laundry equipment • Landscaped for minimal water needs with a 40% reduction in turf • High efficiency compact florescent lighting • R-24 wall and R-50 ceiling insulation and building envelope improvements significantly reduce heating and cooling needs Sustainability Awards FCHA has received multiple awards for sustainability in affordable housing. These awards include: • 2011 National Association of Housing and Redevelopment Officials (NAHRO) National Award of Excellence in Project Design for Village on Stanford Sustainable Renovation • 2011 Colorado NAHRO Energy and Green Building Award for Village on Stanford Sustainable Rehabilitation • 2011 Northern Colorado Renewable Energy Society (NCRES) Award for Exemplary Project for Village on Stanford • 2008 Colorado NAHRO Affordable Housing Design Award for Village on Elizabeth Rehabilitation Page | 20 FORT COLLINS HOUSING AUTHORITY | 2015 Horsetooth Proposal Section 2 Project Personnel Page | 21 FORT COLLINS HOUSING AUTHORITY | 2015 Horsetooth Proposal SECTION 2. Project Personnel FCHA’s greatest asset is its team of professionals; they are passionate, dedicated and committed to the success of every development. Over 70 employees live out FCHA’s commitment to excellence in all aspects of our work. Many diverse roles and functions are needed to build, manage and maintain the highest quality communities and to serve the residents who live in them, and each team member is integral to our overall success. Management Team FCHA is led by a strong executive management team with extensive experience in affordable housing development and management. The Executive Director is assisted by a team of five senior managers, who in turn oversee the work of the remainder of the staff. Julie Brewen, Chief Executive Officer, leads the organization with over 20 years of affordable housing development and asset management experience. She is in charge of all facets of the agency’s affordable housing and resident services programs. Julie is a certified Public Housing Manager and has a great deal of experience and knowledge of acquisition, development and management of affordable housing. Being a national leader has culminated in Julie being a big-picture thinker. She has created and continues to develop an organizational culture that attracts and engages a dynamic workforce at all levels of the organization. She currently serves on numerous boards including the Colorado Housing and Finance Authority Board of Directors and is the Vice President for International Research and Global Exchange for the National Association of Housing and Redevelopment Officials (NAHRO). Duane Hopkins, Chief Financial Officer/Deputy Director, leads the financial and business operations with over 25 years of experience in managing development funding, capital acquisition, financial recovery, and operational restructuring. Prior to joining FCHA in 2010, he was a partner in a national firm that provides financial guidance to owners of emerging and mid-market businesses. He also owned a national consulting company focused on financial turnarounds for Native American tribal governments. Duane has extensive experience in banking and financial institutions ranging in size from $50 million to $2.9 billion in assets. He currently serves as the Chair of the Professional Development Committee of NAHRO, member of the Finance and Underwriting Committees for the Housing Authority Insurance Group (HAI Group) and as a Planning Commissioner for the Town of Parker, Colorado. Chadrick Martinez, Director of Real Estate Development, leads the development team with over 20 years of affordable housing development and portfolio management experience. Before joining the staff in 2010, Chadrick served as Executive Director of CARE Housing in Fort Collins for 10 years. Chadrick’s projects have included single family, multi-family, commercial, adaptive re-use, and infill developments. He has worked with both for-profit and nonprofit organizations in the housing industry, including serving as a Principal for Community Growth Solutions in Loveland, Executive Director of the Gunnison County Housing Authority, and Housing Director for Community Action of Laramie County in Cheyenne. Chadrick brings a unique combination of experience and recognized real estate development success to his position at the Housing Authority. He is an expert in all areas of real estate development utilizing private and public financing, a skilled manager of the full range of construction processes, and a passionate advocate for affordable housing. Page | 22 FORT COLLINS HOUSING AUTHORITY | 2015 Horsetooth Proposal John Tuchscherer, Director Federal Programs, has over 20 years of experience supervising staff for numerous housing programs, including Housing Choice Vouchers, Single Room Occupancy and Public Housing, and in monitoring compliance for projects utilizing HOME funds, CDBG funds, Low Income Housing Tax Credits and RTC/FDIC land-use restriction agreements. John keeps current in the constant changes at the federal level that affect funding and regulations of the FCHA programs. John has completed numerous training programs on Assisted Housing, including Low Income Housing Tax Credits, Housing Quality Standards Inspections, Housing Choice Vouchers, Public Housing and Section 8 Project- Based Rental Assistance. Nancy Stafford, Director of Property Operations, joined the staff in 2010. Nancy has extensive experience as a director of property management and as an asset manager. Her background includes work with both for-profit and nonprofit companies, including the Aurora Housing Authority. She has developed community partnerships to achieve the goals of decent, safe and affordable housing. Her range of expertise covers all aspects of property performance, including tax credit compliance, occupancy, market position, operations, budgeting and financing. She has successfully trained and guided staff to improve property operations and upgrade employee performance standards. Nancy is a Certified Property Manager (CPM) through the Institute of Real Estate Management and a Housing Credit Certified Professional (HCCP) through the National Association of Home Builders. Michele Christensen, Director of Program Development, is a Licensed Clinical Social Worker with over 25 years of experience working in child and family welfare and working with homeless families. She has overall responsibility for formulating innovative designs and collaborations to meet FCHA’s goal of providing service enriched housing. Michele maintains relationships and interacts regularly with service delivery partners and negotiates agreements on service delivery/designs and monitors contractual arrangements. She is responsible for a wide range of programs and services to promote and enhance residents’ quality of life. Michele was an integral part of the development team of FCHA’s Redtail Ponds permanent supportive housing development and has researched best practices and visited supportive housing developments around the country. Board of Commissioners FCHA is governed by a Board of Commissioners, appointed by the Fort Collins City Council. This seven- person board is vested with leadership, advocacy, policy and fiscal responsibility for FCHA. The board meets monthly with FCHA’s Executive Director and senior management staff. Cathy Mathis, Chairperson, is a project manager with The Birdsall Group, a Berthoud-based land planning / landscape architecture firm. She has over 25 years of experience in land use planning in Northern Colorado. She previously served on the board of directors FCHA’s affiliated nonprofit, Villages, Ltd., and is currently on the joint FCHA Housing Development Committee. She also serves on the Chamber of Commerce’s Board of Directors and Local Legislative Affairs Committee, as well as Front Range Community College’s Advisory Committee for drafting and design. Cathy is also past chair and member of the Board of Directors for Partners Mentoring Youth. Jenne Snelling, Vice Chairperson (resident representative), has worked at United Way of Larimer County as the 2-1-1 Call Center Manager for over seven years. As a single mother of five children, Jenne knows how vital affordable housing is to families and their ability to become self- sufficient. Jenne is passionate about helping people find the resources they need to better their lives and through her personal experiences she is motivated to make our community a better place to live. Page | 23 FORT COLLINS HOUSING AUTHORITY | 2015 Horsetooth Proposal Susan Larson, Commissioner and immediate past Chairperson, retired from Executive Vice President of FirstBank. During her 18 years with the bank in Fort Collins and Northern Colorado, she has had a wide variety of responsibilities including personnel and bank management as well as consumer and commercial lending. Susan is a past member of the board of directors for Project Self-Sufficiency and Teaching Tree Early Childhood Learning Center and currently serves on the board for the Front Range Community College Foundation. Through Susan’s extensive mortgage lending experience and working with affordable housing and down payment assistance programs, she is aware of and concerned about the need for affordable housing options in our community. David Bye, Commissioner, retired from Colorado Legal Services in 2010. He was a staff attorney there for 15 years, and managing attorney for 10 years. David has extensive experience in landlord/tenant relations, as well as in federally subsidized housing matters, including Public Housing and Section 8 housing. He is familiar with HUD regulations relating to subsidized housing, and has an understanding of tenants' concerns and problems. David was previously a member of the Neighbor to Neighbor Board, a nonprofit organization dedicated to providing low income housing. Susan McFaddin, Commissioner, is a local sustainable developer. She was the Principal Investigator on the Jefferson County Homeless and Food Bank Study and the Aurora Homeless Study. Her development company, Seven Generations, developed the first LEED-NC (Leadership in Energy and Environmental Design New Construction) platinum office building in Northern Colorado and the first LEED-Existing Building in Fort Collins. She was a co-founder of the US Green Building Council Northern Colorado branch and serves on CSU’s Institute for the Built Environments Board and many other boards. She is currently developing a Net Zero residential and mixed use community in the North College Urban Renewal district that will meet the DOE Challenge Homes standards and uses geothermal and solar technology. Ross Cunniff, Commissioner and City Council member, has served as a representative for District 5 on the Fort Collins City Council for over two years. Ross has served on the Fort Collins Parks and Recreation Board, and was chair of the Fort Collins Energy Board during its inaugural year. Ross is currently employed at NVIDIA, a computer-chip design company, where he is a senior member of the engineering staff. Ross is listed as inventor or co-inventor on 11 patents. Jake Miles Joseph, Commissioner, serves as Acting Associate Minister for Outreach and Mission, Pastoral Care, and Communications Director for Plymouth Congregational United Church of Christ in Fort Collins. Jake oversees his church’s work with Homelessness Prevention Initiative (HPI) and multiple other outreach programs to the homeless community in Northern Colorado. Jake is an active advocate for the underserved populations in our community. Page | 24 FORT COLLINS HOUSING AUTHORITY | 2015 Horsetooth Proposal Development and Property Management Experience The Village on Horsetooth will be developed and managed by the Fort Collins Housing Authority in partnership with Villages, Ltd., a nonprofit organization formed to extend the capabilities of FCHA beyond the scope of federal programs. FCHA has 45 years of experience building and managing affordable housing developments, including experience successfully managing 130 apartment financed through the Low Income Housing Tax Credit (LIHTC) program. Together, the Development Team has experience with development, stabilized lease-up, and management of LIHTC developments. Development Team FCHA takes pride in its high quality developments that strengthen neighborhoods and boost property values. Its Development Team brings a broad range of development, construction, planning and real estate experience to its innovative housing partnerships. Chadrick Martinez, Director of Real Estate Development Julie Brewen, CEO Duane Hopkins, CFO Kristin Fritz, Senior Project Manager/Planner Darcy McClure, Project Manager Nancy Stafford, Director of Property Operations Michele Christensen, Director of Program Development Josh Suppes, Manager Maintenance Department Project Manager (1) to be hired 2016 Project Assistants (2) Licensed General Contractor (1) Ballard Spahr, LIHTC Counsel Ballard Spahr, Bond Counsel James Martell, Real Estate Legal Morgan & Associates, LIHTC Consultant FCHA and Villages Ltd. Board Members (3) Property Management Team FCHA utilizes industry standard management policies and procedures to ensure that properties are leased and maintained in a manner that meets partner performance and investment goals. As “management agent,” FCHA provides the staffing resources, expertise and administrative infrastructure to the Villages, Ltd. 501(c)3 and other affiliated and managed entities through formal management and fee agreements. Many of these managed properties are marketed under the broad branding strategy and term “Villages.” Management staff is proficient in LIHTC development and federal programs and have a high level of knowledge, skill, and ability with regard to project lease provisions and prohibitions, occupancy standards, and admission policies. Our property management team has advanced credentials and certifications that include • Six members of the Institute of Real Estate Management: o 3 Certified Property Managers (CPM) on staff o 1 Accredited Resident Manager (ARM), 2 ARM applicants • Six members of the National Association of Home Builders: o 1 Housing Credit Certified Professional (HCCP) Page | 25 FORT COLLINS HOUSING AUTHORITY | 2015 Horsetooth Proposal Design Team OZ Architecture is a Denver based architecture, design and planning firm. Founded in 1964, the firm has designed thousands of affordable, market rate, student and senior housing across Colorado, including tax credit projects in Denver and Loveland. The firm is also a leader in sustainable, LEED and Enterprise Green Communities projects. OZ has brought their talent and experience to the creation of quality design concepts for the Village on Redwood. Deneuve Construction is a Boulder based full service general contractor and has guided FCHA staff on the cost estimating and construction concepts for the Village on Redwood. The team at Deneuve has provided valuable guidance along with the third party cost estimates for the project. Deneuve has been in place since 1971 and has an excellent reputation for quality workmanship, experienced personnel, productive working relationships, and a dedication to excellence. Deneuve is experienced in multifamily housing construction, estimating and budgeting, coordination and management of construction, and green building principles. Lead Contact for Village on Horsetooth Kristin Fritz, Senior Project Manager, will be the lead contact person for Village on Horsetooth. Kristin joined FCHA in 2011. Kristin was recently the project manager for FCHA’s Redtail Ponds Permanent Supportive Housing development using 9% LIHTC, as well as the Village on Redwood project, utilizing 4% Federal LIHTC, State LIHTC, and CDBG Disaster Recovery Funds. Kristin has ten years of city planning and project management experience. Her background includes work with small communities and large metropolitan agencies, managing partnerships for affordable housing projects, and sustainable development. She has been a member of the American Institute of Certified Planners since 2007. Kristin Fritz kfritz@fcgov.com 970-416-2938 Page | 26 FORT COLLINS HOUSING AUTHORITY | 2015 Horsetooth Proposal Staff Ability to Obtain Financing • FCHA Development staff has a 14-year track record in tax credit development and has developed six tax credit communities in Fort Collins. • FCHA currently owns and or manages five tax credit communities and over 1,000 affordable housing units throughout Larimer County. • FCHA has a mix of LIHTC projects serving families, special population, veterans and seniors. • FCHA utilized LIHTC investments for its Redtail Ponds Permanent Supportive Housing development, completed in March 2015. • FCHA is currently utilizing the newly available tool of combining Federal and State LIHTC with CDBG-Disaster Recover Funding for the Village on Redwood (similar structure expected for Village on Horsetooth) • FCHA received a tax credit award for Villages on Plum Rehabilitation, completed in September 2015. FCHA is in a strong financial position with over $94 million in assets under management and an annual operating budget of $24.3 million in 2015. Since 2011, FCHA has increased assets under management by over $47 million through strategic acquisitions and expansion utilizing tax credit-mixed finance transactions and traditional financing tools. During this same time, FCHA has improved its financial strength by growing non-restricted core working capital and reducing reliance on federal funded programs to sustain operations. FCHA has a Current Ratio of 3.3 times, which indicates the strong liquidity position of the organization. This positions FCHA with the ability to react quickly to opportunities without risking the overall financial health of the organization. The strengthening of FCHA’s balance sheet in recent years allowed the organization to make a $25.5 million acquisition in 2012 utilizing traditional financing mechanisms. This transaction preserved 345 units of affordable housing that otherwise would have been converted to market rate properties. Page | 27 FORT COLLINS HOUSING AUTHORITY | 2015 Horsetooth Proposal Three References from Previous Projects 1) Palace Construction Cy Butte, Superintendent cbutte@palaceconst.com (303) 777-7999 Kari Feld, Project Manager KFeld@palaceconst.com (303) 698-4116 2) Royal Bank of Canada Aaron Krasnow, Investment Manager/Vice President Aaron.Krasnow@RBCCM.com (303) 595-1159 3) City of Fort Collins Cameron Gloss, Planning Manager cgloss@fcgov.com 970-224-6174 Page | 28 FORT COLLINS HOUSING AUTHORITY | 2015 Horsetooth Proposal Section 3 Availability Page | 29 FORT COLLINS HOUSING AUTHORITY | 2015 Horsetooth Proposal SECTION 3. Availability Availability and Timing The Fort Collins Housing Authority is uniquely positioned to take advantage of an immediate opportunity to effectively utilize the Horsetooth Land Bank property for the successful funding award and development of 96 perpetually affordable family rental units. Seizing this limited opportunity to align our community needs, priorities and the land bank opportunity with the priorities specified in the 2016 CHFA Low Income Housing Tax Credit Qualified Application Plan (QAP), FCHA will successfully compete and secure 4% LIHTCs, HUD Disaster Recovery funds, and Colorado State Housing Tax Credits. This immediate, time-limited opportunity will allow for the development of this much needed affordable housing targeting low Area Median Income targets, those targets which are usually only possible utilizing the highly competitive 9% LIHTCs. FCHA’s successful application for this same combined funding in 2015 has resulted in the 72 unit Village on Redwood which has received development approvals from the Fort Collins Planning and Zoning Board and will break ground in January 2016. This 2016 opportunity will be the last opportunity to maximize the pairing of 4% LIHTC with Disaster Recovery and State Housing Tax Credits. The Disaster Recover Funds will be expended and the State Tax Credit is scheduled to sunset. This opportunity precipitated the FCHA request to City Council to activate the Horsetooth Land Bank property. The Village on Horsetooth utilizing the combination of 4% LIHTC, Disaster Recovery funds and State Credit funding is a unique opportunity to create a healthy, sustainable, and vibrant community for low- income individuals and families in a community severely impacted by a severe affordable housing shortage coupled with recent natural disasters. FCHA can easily meet the delivery objective of the City of Fort Collins, commencing the development of all housing within 24 months of acquisition and obtaining building permits for the construction within 48 months of acquisition of the property. FCHA has been engaged in pre-development work for this property since August when we tasked OZ Architecture, who is currently working on Village on Redwood, to assess the site and create some “bubble diagram” layouts on the site for further discussion. FCHA has since been working off the following pre-development plan in preparation for a February 2016 submittal to the Colorado Housing and Finance Authority. Page | 30 FORT COLLINS HOUSING AUTHORITY | 2015 Horsetooth Proposal Village on Horsetooth Predevelopment Costs and Timeline The following table summarizes predevelopment costs currently being incurred by FCHA in order to prepare the Village on Horsetooth LIHTC application for the early February submittal to the Colorado Housing Finance Authority. Item Timeline Cost Soil and Geotech Study Immediately $4,000 Green/Design Charrette Late October $5,000 Market Study Order early November $7,500 Preliminary Design: Architect November-December $20,000 Civil Engineering November-December $15,000 Landscape Design November-December $10,000 Construction Estimate January $5,000 Surveys (Topo and Alta) $5,000 TOTAL $71,500 Page | 31 FORT COLLINS HOUSING AUTHORITY | 2015 Horsetooth Proposal Village on Horsetooth Funding and Development Timeline LIHTC APPLICATION STEPS Date • Letter of Intent & Market Analyst Engagement Letter to CHFA 11/2/2015 • Submit LIHTC Application & Market Study to CHFA 2/1/2016 • LIHTC Application Approval/Reservation 4/1/2016 POST-LIHTC RESERVATION APPROVAL STEPS • Close Acquisition (if applicable) 9/30/2016 • All Loans Closed 9/30/2016 • Execute Partnership Agreement 8/30/2016 • Submit LIHTC Carryover Application to CHFA 2/1/2017 PRE-CONSTRUCTION STEPS • Select General Contractor 12/1/2015 • Complete Construction Drawings approved by Planning/Building Dept. 5/1/2016 CONSTRUCTION STEPS • Construction Begins/Building Permit issued 10/1/2016 • Complete Construction & Place-In-Service (Obtain Certificates of Occupancy) 12/1/2017 • Enter Estimated Construction Period in months 14 Months POST-CONSTRUCTION STEPS • Submit LIHTC Place-In-Service Application for LURA to CHFA 12/1/2017 • Stabilization/Lease up 3/1/2018 • Convert to Permanent Loan 4/1/2018 • Submit LIHTC Final Application for 8609s to CHFA 4/15/2018 General Availability The project team is available to attend all meetings as required by the Scope of Work. The depth of our staff guarantees that other qualified personnel are available to assist in meeting the project schedule, if required. Availability for Meeting on December 14, 2015 FCHA is available for the on-site interview in Fort Collins on December 14, 2015. Page | 32 FORT COLLINS HOUSING AUTHORITY | 2015 Horsetooth Proposal Section 4 Price for Land Page | 33 FORT COLLINS HOUSING AUTHORITY | 2015 Horsetooth Proposal SECTION 4. Price for Land FCHA respectfully submits the following three options for purchase of this parcel and development of 96 units of affordable housing for families earning 30-60% of Area Median Income. Option 1 Option 2 Option 3 Land Cost $500,000 $0 $1,107,000 Target AMI 30%-50% 30%-50% 30%-60% Supportive Services Included Yes Yes Yes City CDBG Request $1,037,000 $417,655 $0 CDBG DR Amount $1.8m $1.8m $1.8m FCHA RAD Equity $2,765,655 $2,790,000 $2,615,000 FCHA Additional Equity $488,000 $488,000 $673,835 Page | 34 FORT COLLINS HOUSING AUTHORITY | 2015 Horsetooth Proposal Page | 35 FORT COLLINS HOUSING AUTHORITY | 2015 Horsetooth Proposal Page | 36 FORT COLLINS HOUSING AUTHORITY | 2015 Horsetooth Proposal Page | 37 FORT COLLINS HOUSING AUTHORITY | 2015 Horsetooth Proposal Section 5 Team Capability Page | 38 FORT COLLINS HOUSING AUTHORITY | 2015 Horsetooth Proposal SECTION 5. Team Capability FCHA has a passionate and dedicated team of professionals whose experience is deep and broad. Many team members work together to bring a new development to fruition and we are confident in our ability to create another award winning affordable housing community. Organizational Strengths Financial Strength - FCHA is in a strong financial position with over $94 million in assets under management and an annual operating budget of $24.3 million in 2015. Since 2011, FCHA has increased assets under management by over $47 million through strategic acquisitions and expansion utilizing tax credit mixed finance transactions and traditional financing tools. Established Partners - As a successful major local developer, FCHA has access to a wide range of debt and equity partners. FCHA’s network of financial partners enables us to obtain multiple debt and equity offers that result in the lowest possible cost of funds and maximum equity for projects. Financial Expertise - FCHA’s experienced staff has expertise in project financing, including conventional debt, fixed- and variable-rate tax-exempt bonds, historic and low-income housing tax credits, grants and more. Design - FCHA is committed to design excellence and has extensive experience planning, designing and reviewing architectural plans for both renovation and new construction projects. FCHA prides itself on developing rental housing that doesn’t look “affordable” and has won multiple design awards. Experienced Multifamily Development Team - FCHA’s development team includes experienced construction management professionals who ensure construction work is top quality, on-budget and on time. FCHA has extensive experience selecting contractors, executing strong contracts, value- engineering plans, and providing construction management support for its own real estate development. Asset Management – FCHA ensures continuous quality management of the properties in its portfolio. In addition, the Development Team ensures compliance with all local jurisdiction, lender and equity provider requirements. Resident Services - Through FCHA’s resident services, FCHA has offered onsite educational services to residents since 2007. Children, teens, adults and seniors participate in programs that focus on strengthening adults’ life skills and improving children’s academic performance. Page | 39 FORT COLLINS HOUSING AUTHORITY | 2015 Horsetooth Proposal The Local Advantage Each dollar invested in FCHA’s housing developments is reinvested to support resident and community services, and to create new affordable housing opportunities unlike large, national affordable housing developers. FCHA is committed to the Fort Collins community. We live here and work here and we want the best for our community. We develop beautiful, sustainable, and livable developments not only because it is part of our core mission but also because we want to continue to develop here in the future. Our reputation is based on the quality of our developments and our ability to be good property managers. Knowing that everything we do in this community will affect our ability to continue to provide more affordable housing in the future, we take our local reputation very seriously. Redtail Ponds is a good example of this. Knowing that permanent supportive housing is a national best practice in addressing homelessness, FCHA was committed to implementing the solution here in Fort Collins. Recognizing that it would be a high profile development, Redtail Ponds has an award winning design and includes all of the features and amenities recommended for permanent supportive housing. It is truly an outstanding example of FCHA going above and beyond for our residents and the greater community. We knew that in order for us to be able to develop more permanent supportive housing models in the future, Redtail Ponds would have to be successful. We are always thinking about our commitment to the Fort Collins community and we plan on being here to provide the best affordable housing solutions available. Financial Capacity FCHA is in a strong financial position with over $94 million in assets under management and an annual operating budget of $24.3 million in 2015. Since 2011, FCHA has increased assets under management by over $47 million through strategic acquisitions and expansion utilizing tax credit mixed finance transactions and traditional financing tools. During this same time, FCHA has improved its financial strength by growing non-restricted core working capital and reducing reliance on federal funded programs to sustain operations. FCHA currently has a Current Ratio of 3.3 times, which indicates the strong liquidity position of the organization. This positions FCHA with the ability to react quickly to opportunities without risking the overall financial health of the organization. As a result of the strengthening of the balance sheet of FCHA in recent years, the organization was able to make a $25.5 million acquisition in 2012 utilizing traditional financing mechanisms. This transaction preserved 345 units of affordable housing that otherwise would have been converted to market rate properties. Page | 40 FORT COLLINS HOUSING AUTHORITY | 2015 Horsetooth Proposal Finally, FCHA’s experience with private financing instruments includes tax-exempt bonds and low- income housing tax credits -- both the 4% and competitive 9% programs. Due to long-standing relationships and portfolio, FCHA can secure the most competitive financing terms for a project and the highest available limited partner contributions. FCHA has been continuously successful in acquiring tax credits for a multitude of projects and have partnerships with an array of lenders and investors. Best Practices FCHA approaches all of its programs and developments with the best practices in mind. FCHA researches and implements evidence-based and nationally recognized best practices in development, financing and program design. To stay current on the latest research and practiced in this field, staff regularly attend training and certification programs. Team members also make site visits to other communities to learn what others are doing so we can continue to do what is best for our community. As an example, when FCHA began planning Redtail Ponds Permanent Supportive Housing (PSH), staff traveled to visit PSH projects across the country including Portland, Minneapolis, Fargo, Chicago, and Denver. FCHA also took partners from Summitstone and other agencies on such site visits. FCHA participated in the Corporation for Supportive Housing’s regional and national conferences, as well as attended the toolkit for developing supportive housing sponsored by the Governor Hickenlooper’s office. Additionally, FCHA staff and partner agencies attended the Housing First conference and Housing Now conferences with specific interest in supportive housing and service provision for special needs populations. Team members also regularly attend the National Association of Service Coordinators conferences and various trainings in the community on mental health issues. Utilizing the Best Skilled Resources FCHA is committed to excellence in all aspects of its work and has created a team of dedicated, compassionate staff and choose the best partners – general contractors, architects, funders, service providers – so that collectively, we can be great at what we do. FCHA choses its consultants, lenders, investors, specialized Tax Credit and specialized bond finance legal counsel, audit firms, others through national competitive processes. Since FCHA is active in several national affordable housing development organizations, we are knowledgeable and well positioned to solicit and select the very best team for each deal. Page | 41 FORT COLLINS HOUSING AUTHORITY | 2015 Horsetooth Proposal Development and Financial Technical Expertise, Partnering and Assistance FCHA strives to increase the availability of affordable housing in and near the City of Fort Collins. One way we do this is through public/private partnerships. FCHA brings many benefits to these partnerships, including fee waivers, low interest rate financing, tax exemption and property management and human services expertise. FCHA reviews all requests in regard to our mission and prudently considers whether by virtue of our participation a project or outcome is strengthened without weakening our ability to further our core work. FCHA is committed to helping other affordable housing providers and developers become successful. Because of its strength and expertise, ability to provide technical assistance and ability to provide development financing tools FCHA has helped many non-profits and affordable housing developers further their work toward our community’s goals. This is done in many ways, including providing loan or project guarantees, acting as a conduit financer of tax exempt loans at low rates, acting as a direct financer of a non-profit’s portfolio, acting as general partner or special partner in order to make a deal feasible due to its real estate tax exemption and other incentives, providing specific Project-Based Housing Choice Vouchers (Section 8 rent subsidy) to units owned by other entities, providing fee- accounting and finance services, and technical assistance and consulting projects for other housing authorities, non-profits and developers. Examples of this work include the following: LIHTC Low Income Housing Tax Credit Analysis/Technical Assistance FCHA brings its real estate development capacity forward to assist nonprofit and for-profit organizations with feasibility analysis utilizing public and private capital funding sources. This technical assistance helps organizations understand and explore funding options to strengthen their investment in future affordable developments and existing real estate portfolios. Technical assistance includes pro forma feasibility analysis, capital needs assessment review and identifying affordable development and rehabilitation opportunities that address community needs. FCHA has provided this service for Neighbor to Neighbor, Merton Homes, DMA Plaza and others. 1997 Parkway Townhomes In 1997, FCHA stepped in to complete a townhome development being done by a local nonprofit designed to be the solution for 12 household displaced by the closing of Pioneer Mobile Home Park. Because of the developer’s mismanagement of the land-trust concept and other problems the properties were in jeopardy of foreclosure. FCHA stepped in and took control to revise and complete the project, thus providing these homes to the families and preserving the City of Fort Collins’ CDBG funds. 1999 Northern Hotel The Northern Hotel is a LIHTC development by the National Development Corporation and local Funding Partners. At the time the renovation was completed, two other senior affordable housing complexes opened their doors and the project did not attract the senior population anticipated. In part, it was unable to compete because of its lack of amenities, size of units, and lack of parking due to location. In response, the City reached out to FCHA asking if it could subsidize the units in order to save the deal and all City funds invested. FCHA responded to the call by providing 47 project-based housing assistance vouchers. FCHA understood that there was a great deal of public money and public will for our vibrant Page | 42 FORT COLLINS HOUSING AUTHORITY | 2015 Horsetooth Proposal downtown at risk. FCHA has continued to provide the vouchers for the past fourteen years, as well as providing contract property management and resident services for this affordable senior housing development. 2001 & 2011 Neighbor to Neighbor, Property Portfolio Refinance In 2001 the FCHA provided Neighbor-to-Neighbor $5,300,000 in bank qualified tax-exempt financing via a pass-through loan transaction. This transaction took advantage of the ability of FCHA to borrow at low tax-exempt rates which would not have otherwise been available to Neighbor-to-Neighbor. Again, in 2011 FCHA facilitated $2,737,000 in financing for Neighbor-to-Neighbor as the conduit issuer of Revenue Refunding Bonds (Coachlight Plaza Project) Series 2011A and 2011B. This low-cost financing mechanism would not have been available to Neighbor-to-Neighbor without the participation of the FCHA. 2010 Mercy Housing, Springfield Court – 63 multi-family units of affordable housing FCHA/Housing Catalyst LLC is the Authority Limited Partner exchanging real estate tax abatement for a right of first refusal to ensure affordability in perpetuity of this development. First developed by Mercy Housing in 1997, Mercy contacted FCHA in 2010 for assistance during their attempt to refinance the development for better cash-flow. FCHA’s participation allowed Mercy a stronger operating budget position which allowed them to refinance with terms very favorable to the viability of the development. 2011 CARE Housing, Provincetowne - 85 units of affordable housing FCHA/Housing Catalyst LLC is the Provincetowne Green Limited Liability Limited Partnership. FCHA was asked to become a partner in this deal when the Low Income Housing Tax Credit Market changed and investors wanted to see a strong balance sheet and capacity from their project partners. In order to make this work, FCHA/Housing Catalyst LLC guaranteed $1.4 million during construction. 2012 Legacy Senior Apartments – 72 senior units of affordable housing FCHA is a Majority General Partner and holds an option to become owner at year 15 of the tax credit period. FCHA participated extensively in all phases of the development of this Low Income Housing Tax Credit development with Cornerstone Associates LLC as Legacy Fort Collins LLC as a Majority General Partner. 2015 Legacy II Senior Apartments FCHA sponsored grants and supported a 2015 9% Low Income Housing Tax Credit application for an additional 70 unit development. 2015 Northern Hotel FCHA has committed five Housing Choice Vouchers “project-based” to make it feasible for a future new owner to pursue a 4% LIHTC application. Page | 43 FORT COLLINS HOUSING AUTHORITY | 2015 Horsetooth Proposal 2015 FCHA Development Partnership/Assistance Requests Numerous private for-profit and non-profit affordable housing developers have approached FCHA over the last couple of months, many in connection with requests for help to develop project proformas that would work for Horsetooth Land Bank property considering the City’s affordable housing priorities and income targets. Development of affordable housing is complicated and difficult, especially when it is designed to serve the Area Median Income households that FCHA serves and those prioritized by the City of Fort Collins in the Consolidated Plan, the Affordable Housing Strategic Plan and the Land Bank Ordinance. It is very difficult for private and non-profit developers. While FCHA has access and expertise utilizing all possible development financing tools, there are some tools available only to FCHA. FCHA is very prudent and thorough in assessing the need for FCHA’s participation in a deal and is a very good steward of these valuable resources. Assistance and partnerships are not taken lightly. The following is the criteria by which FCHA evaluates all such requests. Housing Development and Partnership Objectives/Criteria Fort Collins Housing Authority (FCHA) strives to increase the availability of affordable housing in and near the City of Fort Collins. One way FCHA does this is through public/private partnerships. FCHA brings many benefits to these partnerships, including fee waivers, low-interest rate financing, tax exemption, and property management and human services expertise. For those wishing to apply for resources through the FCHA, below is a list of the minimum criteria that will be evaluated by the FCHA. Applications will be reviewed for potential partnerships with public, private, and/or nonprofit entities, as well as for housing development opportunities to be undertaken by the FCHA or Villages, Ltd., a related but separate entity. FCHA and Villages, Ltd. will review requests in regard to our mission and will prudently consider whether by virtue of our participation a project or outcome is strengthened without weakening the ability of FCHA to further its core work. Criteria include but are not limited to: • Whether a proposed project includes households that earn 30-50% of Area Median Income (AMI) on rental projects, or 80% and below AMI for homeownership projects. • How FCHA resources will increase benefit to low-income households, through increased number of affordable units, lower housing costs, or both, and/or access to support services. • Market information as determined by FCHA which shows demand for the proposed project. • Long-term affordability, with a preference for projects that achieve permanent affordability. • Opportunity for ownership by the FCHA, and/or FCHA buy-out options after any initial equity investor period of compliance in the case of a Low Income Housing Tax Credit project. • Does the proposal demonstrate development capacity, experience and commitment to the targeted population? • To what extent will FCHA share in the developer fee? • What is the project proximity to employment, transportation, schools, retail, and recreation? Page | 44 FORT COLLINS HOUSING AUTHORITY | 2015 Horsetooth Proposal • Role of FCHA in the long-term management of the project, including the opportunity to earn a reasonable management fee. • Degree and nature of risk for FCHA • Degree to which FCHA’s ownership interest is commensurate with the financial benefits it brings to the project. • Projects in which all or a portion of the units are designed to serve special needs population such as the elderly or persons with disabilities may receive special consideration. FCHA Property and Program Continuum – Area Median Incomes Served FCHA serves families, seniors, and people with special needs with an extensive variety of housing options, including supportive housing for the formerly homeless, a range of affordably–priced housing and homeownership opportunities. The majority of the housing and programming serves families earning 30-50% of Area Median Income. People Experiencing Homelessness Single Room Occupancy Program • Supportive shared housing • 2 sites with 27 units for people formerly homeless • On-site resident managers • Provides case management and programming Redtail Ponds • Permanent Supportive Housing • Serves individuals below 50% of AMI • 40 units for formerly homeless individuals with a disability and veterans • 20 units for other low-income individuals • Robust onsite services, including 24/7 staffing Community Dual Disorders Team (CDDT) • 22 formerly homeless individuals • Rental assistance paired with substantial wrap around services • Strong partnership between FCHA, Summitstone and the Health District Very low-income households Fort Collins and Wellington Public Housing • 154 Fort Collins Public Housing units • 42 Wellington Public Housing units • Scattered-site • Deep federal subsidy Housing Choice Voucher Program • 1169 Housing Choice Vouchers (formerly known as Section 8) Page | 45 FORT COLLINS HOUSING AUTHORITY | 2015 Horsetooth Proposal Low-income affordable Villages Affordable Housing • Established in 1982 for development and acquisition of affordable housing • Owned by Villages, Ltd, a 501(c)(3) nonprofit corporation formed to extend the capabilities of FCHA beyond the scope of federal programs • Property types range from single family homes to a 95-unit apartment complex • Serving families earning 30%–60% of area median income Village on Stanford • LIHTC Development, 72 units • Substantial Renovation Complete • Award-Winning Sustainability Renovation Project Village on Elizabeth • LIHTC Development, 48 units • Substantial Renovation • Award-Winning Renovation Project Village on Plum • LIHTC Development, 95 units • Substantial Renovation Villages on Cunningham Corner • LIHTC Development, 285 • Substantial Renovation 2016 Page | 46 FORT COLLINS HOUSING AUTHORITY | 2015 Horsetooth Proposal Community Collaborations In the complex world of affordable housing, strong partnerships are crucial. We maintain successful, long-term relationships with many exceptional organizations and institutions which include: • Age Friendly Communities • CARE Housing, Inc. • Catholic Charities of Northern Colorado • CDORA (Colorado Department of Regulatory Agencies) - Colorado Civil Rights Division • City Manager’s Strategic Issues Team • City of Fort Collins Affordable Housing Taks Force • City of Fort Collins Climate Action Committee • City of Fort Collins Green Code Advisory Committee • City of Fort Collins Police Department • City of Fort Collins Utilities • Colorado Coalition for the Homeless • Colorado Division of Housing • Colorado Housing Finance Authority (CHFA) • Colorado Legal Services • Colorado State University Institute for the Built Environment • Colorado Yardi Users Group • Community Dual Disorders Team • Community Mental Health and Substance Abuse Partnership • Crossroads Safehouse • Dedicated Navigators • Dental Connections (Larimer Health District) • Department of Veteran’s Affairs • Disabled Resource Services • Eastgate Homeowners Association • Eighth District Municipal Court (Special Agency Session) • Energy Outreach Colorado • Firstcall 2-1-1 • Food Bank of Larimer County • FortZED • FourSquare Pharmacy • Front Range Community College • GASP of Colorado (Group to Alleviate Smoking Pollution) • Health Links Colorado • Health Links Colorado – healthy business Leader • Heart Centered Counseling • Homeless Gear • Homelessness Prevention Initiative • Homeward 2020 • Housing Colorado • Housing NOW Conference • Housing Work Group Page | 47 FORT COLLINS HOUSING AUTHORITY | 2015 Horsetooth Proposal • Institute of Real Estate Management • Interagency Group • Interfaith Council • Larimer County Adult Protection Services • Larimer County Affordable Housing Coalition • Larimer County Alternative Sentencing Unit • Larimer County Community Corrections • Larimer County Conservation Corps • Larimer County Drug Task Force • Larimer County Extension Office • Larimer County Health and Human Services • Larimer Home Improvement Program (LaHIP) • Longs Peak Weatherization • National Association of Home Builders • National Association of Housing and Redevelopment Officials: State, Regional and National • Neighbor to Neighbor • North Fort Collins Business Association • Northern Colorado Rental Association • Northern Front Range Continuum of Care • Pathways Hospice • Pianos About Town • Prevent Unwanted Pets (PUP) • Project Self Sufficiency • Sister Mary Alice Murphy Center for Hope • Social Services Family Response Team • South Fort Collins Business Association • Spirt Crossing • Stanford Homeowners Association • SummitStone Health Partners • The Growing Project • Thunderbird Neighborhood Association • Transfort • U.S. Dept of HUD • United Way • UniverCity Community Advisory Committee • Urban Land Institute • Vida Sana: Uniting for the health equity of Latinos • Volunteers of America Meals on Wheels • Volunteers of America In addition, staff also participate in numerous meetings and taskforces in the community on housing related issues such as Age Friendly Communities, Child Protection Team Meetings, Interagency meetings regarding homeless individuals, Caring and Sharing, Interfaith Council, Habitat for Humanity’s selection committee, Larimer County Regional Transitional Coordination Committee, and many more. Page | 48 FORT COLLINS HOUSING AUTHORITY | 2015 Horsetooth Proposal Examples of Three Affordable Housing Projects Redtail Ponds Permanent Supportive Housing Redtail Ponds is a mixed-income community of 60 apartments, with 25 of those for people with a disability who were previously homeless and 15 apartments for previously homeless veterans. The other 20 apartments are mixed-income. It is a Permanent Supportive Housing community – one that provides onsite services for its residents, such as case management and counseling, to promote stability and independence. • New Construction • 60 Apartment homes • Completed March 2015 • Utilized 9% Low Income Housing Tax Credit Development Village on Plum Revitalization/Preservation Village on Plum is an affordable housing community built in 1970. The community provides 95 apartment homes within eight buildings located on about four acres. The homes are a mix of one, two and three bedroom apartments. The development is located in a desirable moderate-income neighborhood on the west side of Fort Collins. We completed a large-scale revitalization of the community in 2015. • Substantial Revitalization and Preservation • 95 Apartment homes • Completed September 2015 • Primary funding 4% Low Income Housing Tax Credit Rehab Village on Redwood Village is a new affordable housing community being developed by FCHA in north Fort Collins. It includes a combination of townhomes and flats with a large community green space, clubhouse with fitness center, playground, dog run and a new City Natural Area with walking trails, a pond and boardwalk. • 72 apartment and townhouse style homes • New construction to be located in north Fort Collins • Design completed; Construction to begin in early 2016 • Project funded primarily through utilizing the Low Income Housing Tax Credit Program (LIHTC), private equity investment with additional funding through the State of Colorado Division of Housing and City of Fort Collins CDBG 1 US_ACTIVE-120302500.2 November 30, 2015 Fort Collins Housing Authority Attn: Duane Hopkins, CFO 1715 W Mountain Ave Fort Collins, CO 80521 Dear Mr. Hopkins, We are pleased to provide you with this Letter of Interest for your proposed project along Horsetooth Rd, between Shields St and Taft Hill Rd in Fort Collins (the “Project”). We have taken a preliminary look at the Project, and would be interested in responding to a request for proposal when appropriate. The Project represents the size and scope of projects that BBVA Compass (the “Bank”) finances. This Letter of Interest is not a commitment to lend, purchase, or to provide any other service related to a financing, and does not impose any other obligation on the Bank. Any such commitment or undertaking will be issued only in writing, subject to appropriate documentation, terms and conditions. Thank you for giving us the opportunity to provide you with this Letter. Please don’t hesitate to reach out to me with any questions. Sincerely, David Fritzler Senior Vice President Commercial Banking 970-267-2042 David.Fritzler@bbva.com 1801 California Street, Suite 3850 8000 Maryland Avenue, Suite 910 Denver, CO 80202 St. Louis, MO 63015 (303) 595-1159 (314) 561-5901 November 30, 2015 Chadrick Martinez Fort Collins Housing Authority 1715 West Mountain Avenue Fort Collins, CO 80521 Re: Horsetooth Apartments Fort Collins, CO Letter of Interest Dear Arthur: Thank you for providing us the opportunity to provide a letter of interest for Horsetooth Apartments in Fort Collins, CO. This letter serves as an indication of RBC’s interest in purchasing limited partnership interests in a to- be formed Colorado limited partnership or limited liability limited partnership (the “Partnership”). RBC Capital Markets, or an assignee (the “Investor Partner”) may acquire a 98.99% partnership interest, and RBC Tax Credit Manager II, Inc. (the “Special Limited Partner”, and sometimes collectively with the Investor Limited Partner, “RBC”) may acquire a .001% partnership interest (collectively, the “Limited Partnership Interest”) in the Partnership. An assignee (the “State Investor Partner”) may acquire a 1.00% partnership interest (the “State Limited Partner Interest”) 1. Project and Parties Involved. (a) The “Project”, known as Horsetooth Apartments, will consist of 96 new affordable units for rent to families. The Project will be located in the City of Fort Collins, County of Larimer, Colorado (sometimes, the “Property”). Within the Project, all 96 units will be occupied in compliance with the low- income housing tax credit (“LIHTC”) requirements of Section 42 of the Internal Revenue Code. (b) The parties involved with the Project are as follows: (i) General Partner. The General Partner is a to-be-formed, single purpose, tax-exempt entity which is owned 100% by the Fort Collins Housing Authority and/or Villages, Ltd.. (ii) Developer. The Developer is Fort Collins Housing Authority, or its affiliate. (iii) Guarantors. Subject to RBC's review and approval of financial statements, the Guarantors are the General Partner, Developer, Fort Collins Housing Authority, and other individuals or entities as RBC may reasonably require, on a joint and several basis. 2. Purchase Price. RBC may acquire its limited partnership interest in the Partnership for a total capital contribution of $8,184,168, 1.00% of which will be contributed by and allocated to State Limited Partner. This capital contribution is based on the Project receiving the federal tax credits described in Paragraph 3 and represents a price per tax credit dollar of $1.14. Horsetooth Apartments November 30, 2015 Page 2 Additionally, a State Limited Partner may acquire its limited partnership interest in the Partnership for a total capital contribution of $4,184,504, excluding its 1.00% of federal tax credit equity contribution as detailed above. This capital contribution is based on the Project receiving the state tax credits described in Paragraph 3 and represents a price per tax credit dollar of $0.62. This pricing assumes adjusted eligible basis in an amount sufficient to generate the federal and state tax credits set forth in Paragraph 3, with 100% of residential depreciation taken over 27.5 years, 100% of depreciation on site improvements being taken over 15 years, and 100% of depreciation on personal property being taken over 5 years with the building placed in service in 2017. 3. LIHTC. The Project is expected to receive a reservation in 2016 for federal LIHTC in the amount of approximately $717,910 annually from the Colorado Housing and Finance Authority (CHFA). The total federal LIHTC anticipated to be delivered to the Partnership is approximately $7,179,100 (the “Projected LIHTC”). The first year of credit delivery is projected to be 2017 or 2018. The Project is expected to receive a reservation in 2016 for state LIHTC in the amount of approximately $1,115,189 annually from CHFA. The total state LIHTC anticipated to be delivered to the Partnership is approximately $6,691,135 (the “Projected State LIHTC”). The first year of credit delivery is projected to be 2017. 4. Debt Sources. It is expected that the General Partner will deliver permanent loan commitments for the debt sources described in subparagraphs (a)-(d). The terms of these loans are subject to our consent. (a) First Mortgage. A permanent loan from a qualified lender in the approximate amount of $5,000,000. It is expected that the permanent loan will carry and interest rate of 4.54%, have a 30- year amortization period, and an 18-year term. (b) CDBG Disaster Relief. A subordinate loan repayable from available cash flow in the approximate amount of $1,800,000 with terms acceptable to RBC. (c) City CDBG/HOME. A subordinate loan repayable from available cash flow in the approximate amount of $1,037,000 with terms acceptable to RBC. (d) Owner Equity. A subordinate loan repayable from available cash flow in the approximate amount of $3,040,000 with terms acceptable to RBC. 5. Capital Contributions and Adjustments. RBC estimates that the capital contribution schedule to be as follows: 1. 20.00% upon admission of RBC and the State Limited Partner to the Partnership, receipt of all due diligence specified in due diligence check lists, construction loan closing, and all permanent loan commitments. $2,466,534 2. 60.00% upon achievement of substantial completion of construction, receipt of temporary certificates of occupancy, and submission of a preliminary cost certification. $7,399,603 3. 15.00% upon the later of receipt of permanent certificates of occupancy on all units, 100% qualified occupancy, receipt of the final cost certification, final closing of the permanent mortgage, and satisfaction of all requirements for disbursement 2 above. $1,849,901 4. 5.00% upon the later achievement of the Stabilization Date, receipt of IRS forms 8609, receipt of such documentation necessary for an allocation of state tax credits, and satisfaction of all requirements for disbursement 3 above. $616,634 Horsetooth Apartments November 30, 2015 Page 3 Additionally, RBC will incorporate reduction adjustments in its capital contributions for credit shortfalls and late delivery. These adjusters will be detailed in the Letter of Intent. General Partner Obligations and Guarantees. In addition to Paragraph 5 and the items described in the Operating Agreement, the General Partner and certain other entities will be responsible for the following items. Any amounts advanced by the General Partner or certain other entities will not be considered as loans or Capital Contributions reimbursable or repayable by the Partnership unless otherwise stated herein. (a) Construction Completion. The Guarantors will guarantee construction completion in accordance with approved plans and specifications and will pay for any construction costs, costs to achieve permanent loan closing, and costs necessary to fund reserves required to be funded at or before permanent loan closing. (b) Operating Deficits. (i) The Guarantors will guarantee operating deficits to the Partnership until the Project has achieved permanent loan closing and three consecutive months of operations in which the project has maintained a minimum 1.15 debt service coverage ratio on all hard debt (“Stabilization Date”); (ii) Commencing with the Stabilization Date and continuing for a minimum period of five years thereafter, the Guarantors will guarantee funding for operating deficits of up to an amount equal to six months of operating expenses, reserves and debt service payments. (c) LIHTC Shortfall or Recapture Event. The Guarantors will guarantee payment to the Limited Partner of an amount equal to the shortfall or recapture amount, plus related costs and expenses incurred by the Limited Partner. (d) Repurchase. The Guarantors will repurchase RBC’s and the State Limited Partner’s interest upon the occurrence of certain events described in the Operating Agreement. (e) Guarantors. The Guarantors will guarantee all of the General Partner’s obligations. 6. Reserves. (a) Operating Reserves. RBC will require an operating reserve in a minimum amount equal to 4 months operating, expenses, reserves, and debt service payments. (b) Replacement Reserves. RBC will require an annual per unit funding of replacement reserves in the amount of $250, escalating 3% per year. (c) Rent-Up Reserve. RBC may require a rent-up reserve in the event of projected insufficient net operating income during lease-up. 7. Fees and Compensation. The following fees will be paid by the Partnership for services rendered in organizing, developing and managing the Partnership and the Project. (a) Developer Fee. The Developer will earn a developer fee estimated to be $2,435,925 inclusive of all financial/tax credit consulting fees. If the proceeds from the Project budget are not sufficient to pay the developer fee, the fee will be deferred and payable from net cash flow. (b) Limited Partner Asset Management Fee. The Partnership will pay the Special Limited Partner an annual asset management fee in an amount of $5,000. The asset management fee will increase by 3% on an annual basis and be paid quarterly, in advance, commencing the first calendar quarter during the year in Horsetooth Apartments November 30, 2015 Page 4 which the Project is placed in service. (c) State Limited Partner Asset Management Fee. The Partnership will pay the State Limited Partner an annual asset management fee in an amount of $2,500. The asset management fee will increase by 3% on an annual basis and be paid quarterly, in advance, commencing the first calendar quarter during the year in which the Project is placed in service. (d) Syndication Due Diligence Fee. The Partnership will reimburse RBC $30,000 toward the costs incurred by RBC in conducting its due diligence review and for the costs and expenses of RBC’s counsel in connection with the preparation of the tax opinion. RBC may deduct this amount from its first capital contribution. 8. Tax Benefits and Distributions. (a) Tax Benefits. Tax profits, tax losses, and federal tax credits will be allocated 98.99% to the Limited Partner, 1.00% to the State Limited Partner, .001% to the Special Limited Partner and .009% to the General Partners. The state tax credits will be allocated 100% to the State Limited Partner. (b) Net Cash Flow Distributions. Distributions of net cash flow, as defined in the Operating Agreement, but generally all cash receipts less cash expenditures (e.g., payment of debt service, property management fee and asset management fee), will be made as follows: (i) to the Limited Partners in proportion to any so called "phantom income" tax liability incurred by the Limited Partner; (ii) to the Limited Partners, to make any payment of any Adjustment Amount or payment of Actual LIHTC shortfall or recapture amount not previously paid; (iii) to the Asset Management Fee and State Limited Partner Asset management Fee; (iv) To replenish the operating reserve; (v) to the payment of any unpaid developer fee, until such fee has been paid in full; (vi) to any required debt service payments on subordinate loans; (vii) to the payment of any debts owed to the Partners and/or their affiliates; and (viii) the balance to the Partners in accordance with their percentage interests described in Paragraph 9(a). (c) Distributions upon Sale, Liquidation or Refinance. Net proceeds resulting from any sale, liquidation or refinance will be distributed as follows: (i) to payment in full of any Partnership debts except those due to Partners and/or their affiliates; (ii) to the setting up of any required reserves for contingent liabilities or obligations of the Partnership; (iii) to the Limited Partners to make any payment of any Adjustment Amount or any payment of Actual LIHTC shortfall or recapture amount not previously paid; (iv) to the payment of any debts owed to the General Partner or its affiliates including any unpaid developer fee; Horsetooth Apartments November 30, 2015 Page 5 (v) to the Limited Partners for any excess or additional Capital Contributions made; (vi) to the Limited Partners in an amount equal to any projected federal or state income tax incurred as a result of the transaction giving rise to such proceeds; and (vii) the balance to the Partners in accordance with their percentage interests described in Paragraph 9(a). 9. Construction. The General Partner will arrange for a fixed or guaranteed maximum price construction contract. The Contractor’s obligations will be secured by a letter of credit in an amount not less than 15% of the amount of the construction contract or a payment and performance bond in an amount not less than the amount of the construction contract. The Project budget will provide for a hard cost contingency acceptable to RBC. RBC, may, in its sole discretion, engage a construction consultant to review the plans and specifications and evaluate the construction progress by providing monthly reports to the Partnership. The cost of the construction consultant will be paid by the Partnership. RBC’s interest in acquiring the LP Interests is based on certain assumptions formulated using the information contained in this letter, which you have provided to us. In its sole discretion, RBC may elect to not complete the investment contemplated in this letter, and the General Partner and RBC will have no continuing obligation to one other. Very truly yours, By: Aaron Krasnow Vice President ENTERPRISE 899 Logan Street  Suite 300  Denver, CO 80203  303.573.1571  www.enterprisecommunity.com November 25, 2015 Ms. Julie Brewen Executive Director Fort Collins Housing Authority 1715 W Mountain Avenue Fort Collins, CO 80521 Re: Horsetooth Apartments (the “Project”) Dear Ms. Brewen: The purpose of this letter is provide an indication of interest from Enterprise Community Investment, Inc. (Enterprise) for providing equity, through an investment fund which would be formed by Enterprise, to the Project. Enterprise is one of the leading syndicators of low income housing tax credits (‘LIHTC”). Since the enactment of the federal Low Income Housing Tax Credit program in 1986, Enterprise has raised more than $10 billion in equity for the development of low income housing. This letter of interest is based on a preliminary review of the information provided by you. This information indicates that the Project would generate, at this time, an annual low income housing tax credit allocation of approximately $717,910 and state housing credit of approximately $1,115,189. The pro forma presented to Enterprise as part of the preliminary submissions indicates pricing of $1.14 on the tax credit dollar and $.62 on the state credit dollar. Based on this assumption, the Project would generate an equity investment in the amount of $12,332,672. This estimate of pricing appears supportable if the transaction were to close today. The equity markets continue to be volatile and unpredictable; therefore the ultimate ability of Enterprise to commit to pricing on this transaction will be determined by investor yield requirements and the availability of capital much closer to the time of closing. As soon as you have received a reservation of tax credits, please contact us so that we can continue the underwriting of this project and, if appropriate, negotiate a commitment letter. Sincerely, Brian Windley Vice President, Syndication