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Mixed-use development in the South 600 - 800 Blocks fronting West Atlantic Avenue in Downtown Delray Beach including retail (grocery and bank), restaurant, office and rental housing.
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DELRAY CRA PROJECT NO.: CRA2013-06 REQUEST FOR PROPOSALS
WEST ATLANTIC AVENUE PROPERTIES
Atlantic Village
Jones New Urban Delray August 13, 2013
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1. Identify what portion or portions of the redevelopment site they are seeking to acquire and develop (i.e., entire site, west portion, east portion).
The Respondent intends to lease, develop and eventually acquire all land offered in the RFP.
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2. State the anticipated uses within the redevelopment project. The uses must be currently permissible under the City of Delray Beach Land Development Regulations. Specify the total square footage of the project and the breakdown of each proposed use. Proposer may submit letters of intent from committed and/or potential tenants if possible.
The following table lists the anticipated uses within the redevelopment project:
Block Use Units SF 2 Retail 0 19,200 Residential 0 0 Restaurant 0 0 5 Retail 0 1,000 Office 0 8,650 Residential 92 87,750 Restaurant 0 1,500 Residential Amenities and Common Areas 0 10,250
13 Retail 0 1,000 Office 0 8,650
Residential 92 87,750 Restaurant 0 1,500 Residential Amenities and Common Areas 0 10,250 Total 184 237,500
All uses are permissible under the City of Delray Beach Land Development Regulations in the CBD and RM zoning districts, as applicable. Respondent has a history of working with national, regional and local tenants. Respondent has participated in a workshop by WARC and this response addresses the retail types consistent with the West Atlantic Area Needs Assessment (October, 2012). Respondent has included in the proposal 17,300 sf of Class A office space in the mixed use buildings located between SW 6th and SW 8th Avenues. Per the RFP, this space is proposed to be leased or sold to the CRA and then subleased to various subtenants.
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3. Submit a conceptual site plan and one or two conceptual elevations on a sheet or sheets measuring 24” by 36” at a scale of one inch equals twenty feet (1” = 20’). The site plan should include, at a minimum, the location of proposed building(s) and the public streets surrounding the site. The plans must indicate the height(s) of all proposed buildings. Parking, sidewalks, and major landscaping features should be illustrated. In addition the Proposer should reduce the site plan to a format measuring 8 ½” by 11” or 11” by 17” for ease of distribution, and an electronic version of the same on .PDF format.
The conceptual site plan and conceptual building elevations are provided.
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4. Submit basic floor plans of the proposed buildings on a sheet or sheets measuring 24” by 36”, primarily for the purpose of indicating the square footage
of each use. The Proposer may choose an architectural scale appropriate to communicate the concept of the proposed project. In addition the Proposer should reduce the floor plans to a format measuring 8 ½” by 11” or 11” by 17” for ease of distribution, and an electronic version of the same on PDF format.
Diagrammatic floor plans for the proposed buildings are provided. Actual unit floor plans are still under development.
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5. State the offering price or lease amount for the property. The offering should state the terms of payment, the anticipated closing date if applicable, and any conditions, contingencies, and additional requirements that affect the purchase. PLEASE NOTE: Any offers for less than appraised market value or current lease rates for the area must compensate for the reduced value in the form of benefits to the public or the local community (i.e., a program for providing jobs to local residents, etc.). In addition, the sale or lease of the property by the CRA for less than the market value may require approval of the City Commission, depending upon a determination of the value of any alternative benefits provided. Proposers seeking to lease the property through the Land Value Investment (LVI) Program must submit a completed LVI Program Application form.
Proposer will ground lease the property for a forty year term, with an ability to extend for an additional twenty years at Market Rate. Lease term will commence upon Respondent receiving all approvals and permits necessary for the development of the project, including building permits. Consistent with the LVI Program, Proposer will lease the property as follows:
• First five years: $1 per year. • Second five years: Not to exceed 4% of the appraised value of the property four
months prior to the end of the first five year term, based on an analysis of the market value of the property and pre-tax profit and loss operating statement of the project and further based on a benchmark agreed to by Respondent and the CRA.
• Third five years: Not to exceed 6% of the appraised value of the property four months prior to the end of the second five year term.
• Subsequent years: Not to exceed 8% of the appraised value of the property four months prior to the end of the previous year of the lease term.
• Thereafter, the Lease Rate shall increase by 2.5% per year, beginning in year 16. • Lease rate(s) shall be triple net. • Payments shall be made monthly. • The Proposer shall have an option to purchase the property from the CRA at any
time during the lease term in accordance with the program guidelines.
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6. Identify the proposed CRA incentive programs, amount of funding requested, details of the costs and financial benefits to the CRA as well as details of how the proposed incentive is consistent with the objectives of the Community Redevelopment Plan and the applicable plans adopted by the City of Delray Beach. If a joint venture with the CRA is contemplated, the terms of such an arrangement must be specified, including the proposed financing arrangements, ownership structure, the responsibilities of each entity, and other pertinent information. Proposers intending to utilize one or more CRA incentive or grant programs must complete the appropriate program application and include it with their response.
The proposal contemplates the use of two CRA incentive programs, the Land Value Investment (LVI) program and the Development Infrastructure Assistance (DIA) program and a public private partnership on the commercial space in the mixed use buildings located on Blocks 5 and 13.
The use of the LVI program is consistent with the following objectives of the Community Redevelopment Plan and the West Atlantic Redevelopment Plan:
• Design is based on traditional neighborhood planning principles and
contains a combination of residential and commercial uses (WARP p. 8) • Plan includes apartments over office space as well as freestanding
apartments (WARP, p. 50) • Mixed use redevelopment project with office, residential retail, and
restaurant space (WARP, p. 58) • Buildings pulled to the street (WARP, p. 61) • Utilization of shared parking (WARP, p. 112) • Development of alleys and sidewalks to create a safe, walkable pedestrian
environment (WARP, p. 114) • Grocery/drug store • Parking located to the rear of structures along Atlantic Avenue (WARP, p.
123) • Sidewalks provided along all public streets and also internally
Per Section E of the RFP guidelines, Respondent proposes to lease 22,300 sf of commercial space in the mixed use building proposed on the blocks 5 and 13 between SW 6th and SW 8th Avenues to the CRA for $15 per square foot NNN. Respondent has allocated a $30 per square foot tenant improvement allowance for the benefit of the subtenant. The CRA will be responsible for leasing to all subtenants and will receive all rent they obtain. Alternatively, the Respondent is willing to sell the 22,300 square feet of commercial space to the CRA at Respondent’s documented construction cost, including construction supervision and overhead.
Respondent also requests that the CRA waive program guidelines that require 50% of the project’s net floor area, exclusive of hotel/conference uses, be dedicated to Class
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A office space and 75% of the project’s net floor area be dedicated to non-residential use. The rationale for these waivers is as follows:
• The financing climate remains challenging. Respondent does not believe it
can obtain financing for the amount of Class A office space or non-residential space required. Respondent believes its chances of obtaining financing are significantly enhanced by its proposed mix of retail, restaurant office and residential uses.
• The neighborhood will be well served by the proposed mix of uses. Needed retail, as identified in the West Atlantic Redevelopment Plan, is being provided, as well as a significant residential base to help support those uses.
• The proposal will result in the creation of an estimated 350 construction jobs and 74 permanent jobs.
The use of the DIA program is consistent with the following objectives of the Community Redevelopment Plan and the West Atlantic Redevelopment Plan:
• Design is based on traditional neighborhood planning principles and
contains a combination of residential and commercial uses (WARP p. 8) • Plan includes apartments over office space as well as freestanding
apartments (WARP, p. 50) • Mixed use redevelopment project with office, residential, retail and
restaurant space (WARP, p. 58) • Buildings pulled to the street (WARP, p. 61) • Utilization of shared parking (WARP, p. 112) • Development of alleys and sidewalks to create a safe, walkable pedestrian
environment (WARP, p. 114) • Grocery/drug store • Parking located to the rear of structures along Atlantic Avenue (WARP, p.
123) • Sidewalks provided along all public streets and also internally
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7. If additional property/properties are to be incorporated into the development, the RFP response must include proof of ownership of that property, or a valid, signed sales contract indicating the owner’s agreement to sell the property to the proposer. If additional property is to be used to meet the minimum requirements for off-site parking, a valid, signed agreement for the use of the property in compliance with the Land Development Regulations must be included in the RFP response. In the absence of such documentation the additional property(ies) or parking will not be considered in evaluating the proposal. Contact information for certain adjacent property owners can be obtained by written request to the CRA via the City’s Purchasing Division.
All land offered in the RFP has been included in our proposal. We are able to meet the LDR parking requirements through the use of the shared parking provisions of Section 4.6.9 (C) (8) (a). We will be requesting a waiver of the provision that requires 1 space per residential unit to be reserved at all times. Justification for the waivers include but are not limited to the following factors:
• Urban infill location • Site served by transit • Small size of units • Large amount of office use, which is the perfect complement to residential. • Strict application of this provision would require needless reduction in
commercial square footage, residential units or both, and vast expanses of open parking spaces during much of the day and night.
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8. Submit a time schedule for the completion of the project including the building, parking, and off-site improvements. The CRA’s preference is single-phase development. Phased projects will be evaluated less favorably. However if the project is proposed to be developed in phases, then the time schedule should reflectthe phases based upon realistic development time frames.
Activity
Projected Start Date
Projected Completion Date
Negotiate Ground Lease and Development Agreement
December 2013 May 2014
Government Approvals February 2014 October 2014
Site Design and Land Development Permitting
October 2014 March 2015
Architectural Design and Vertical Construction Permitting
October 2014 May 2015
Land Development Block 13 (land between SW 6th and SW 7th Avenues)
April 2015 December 2015
Vertical Construction Block 13 (land between SW 6th and SW 7th Avenues)
January 2016 April 2017
Land Development Block 5 (land between SW 7th and SW 8th Avenues)
September 2015 April 2016
Vertical Construction Block 5 (land between SW 7th and SW 8th Avenues)
May 2016 August 2017
Land Development Block 2 (land between SW 8th and SW 9th Avenues)
February 2016 August 2016
Vertical Construction Block 2 (land between SW 8th and SW 9th Avenues)
September 2016 August 2017
The project is planned to be developed in one continuous phase.
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9. Submit a total project cost analysis stating, by category, the major elements
of the project. The major cost items shall include, at a minimum, land costs, site development costs (including but not limited to paving, grading, drainage, landscaping, site lighting, right-of-way improvement, and surface parking) building construction costs (including parking garages, if applicable), permit and impact fees, tenant improvement allowances, architectural and engineering costs, marketing costs, financing costs, and any other significant costs.
The intent of this preliminary development budget is to assist in evaluating
the financial feasibility of the project at this conceptual stage and it should be realistic given the proposer’s experience.
See attached development budget.
Atlantic VillageLand Development BudgetDelray Beach, Florida Blocks 5 & 13 Acres: 4.63 Residential Lots: 184 Date: #########
Blocks 2 Acres: 1.60 Commercial SF: 41,500 Scenario: Preliminary
Total Acres: 6.23
Blocks Block Blocks Block
Line Account Detailed Unit Account 5 & 13 2 5 & 13 2
Item Description Description Quantity Units Price Extension % Total 74% 26% DIA DIA
1420 Preliminary Surveying 203,100 150,294 52,806 75,147 26,403
Boundary Survey 1 LS 7500 7,500 0.23%
Topo Survey 1 LS 7500 7,500 0.23%
Tree Survey 1 LS 3500 3,500 0.11%
Site Planning Site Plan 1 LS 40000 40,000 1.21%
Landscape Architecture Landscape/Hardscp. Design 1 LS 25000 25,000 0.75%
Engineering/Platting
Engineering 1 LS 40000 40,000 1.21%
Platting/Horiz. Control 1 LS 20000 20,000 0.60%
Irrigation 1 LS 8000 8,000 0.24%
Progress Photos 24 Months 150 3,600 0.11%
Landscape Inspections 1 LS 8000 8,000 0.24%
Construction Eng./Surveying
Eng. Inspections/Certification 1 LS 15000 15,000 0.45%
Staking/As-Builts 1 LS 15000 15,000 0.45%
Misc. Surveying (Plots, Esmts.) 1 LS 10000 10,000 0.30%
1425 Amenities 393,000 345,420 47,580 105,210 23,790
Aluminum Perimeter Fence 3200 LF 25 80,000 2.41%
Monument Signage 6 LS 8000 48,000 1.45%
Automatic Gates 6 LS 12500 75,000 2.26%
Pavers 10000 SF 4.00 40,000 1.21%
Benches, Trash Cans, Bike Racks 1 LS 15000 15,000 0.45%
Mailboxes/Slabs 1 LS 10000 10,000 0.30%
Pool 1 LS 125000 125,000 3.77%
1426 Clearing & Brushing Vegetation Removal 1 LS 1580 1,580 0.05% 1,580 1,169 411
1437 Demolition 1 LS 85000 85,000 2.56% 85,000 85,000 0
1427 Sanitary Sewer Contract 1 LS 130000 130,000 3.92% 130,000 96,200 33,800 48,100 16,900
1428 Storm Sewer Contract 1 LS 325000 325,000 9.81% 325,000 240,500 84,500 120,250 42,250
1429 Water Mains Contract 1 LS 150000 150,000 4.53% 150,000 111,000 39,000 55,500 19,500
1430 Special Structures Fire Sprinklers (Land Portion) 1 LS 65000 65,000 1.96% 65,000 48,100 16,900 24,050 8,450
1431 Paving Includes Parking bays 16,034 SY 25 400,855 12.10% 400,855 296,633 104,222 148,316 52,111
1432 Sidewalks 30220 SF 3.50 105,770 3.19% 105,770 78,270 27,500 39,135 13,750
1433 Off Site Paving Parking Spaces and Islands 85 LS 4000 340,000 10.26% 415,000 307,100 107,900 153,550 53,950
Off Site - Other Misc Offsite Expenses 1 LS 75000 75,000 2.26%
1435 Letters of Credit/Bonds Subdivision Improvements 2388788 $ 0.025 59,720 1.80% 59,720 44,193 15,527
1436 Temporary Roads & Utilities 6.23 Acres 1000 6,230 0.19% 6,230 4,610 1,620
1439 Earth Bal. & Retention See Detail 1 LS 150000 150,000 4.53% 150,000 111,000 39,000 55,500 19,500
1440 Electric Distribution Underground Differential 1 LS 50000 50,000 1.51% 50,000 37,000 13,000 18,500 6,500
1441 Irrigation 1 LS 60000 60,000 1.81% 60,000 44,400 15,600 22,200 7,800
1442 Phone Distribution Sleeving 1 LS 15000 15,000 0.45% 15,000 11,100 3,900 5,550 1,950
1443 Cable TV Distribution Sleeving 1 LS 15000 15,000 0.45% 15,000 11,100 3,900 5,550 1,950
1444 Street & Lot Lighting Ornamental Lighting Commercial Area 1 LS 175000 175,000 5.28% 175,000 129,500 45,500 64,750 22,750
1445 Street Signs Signage/Marking 1 LS 20000 20,000 0.60% 20,000 14,800 5,200 7,400 2,600
1448 Rezoning Fees Application Fees 1 LS 20000 20,000 0.60% 77,776 57,554 20,222
Municipal Inspection Fees Land Development Construction 2388788 $ 0.02 47,776 1.44%
Plan Check Fees Engineering/Plat Review 1 LS 10000 10,000 0.30%
1449 Compaction/Construction Testing Soil Testing 6.23 Acres 10000 62,300 1.88% 62,300 46,102 16,198
1453 Expected Repairs/Maintenance 184 Lots 200 36,800 1.11% 36,800 27,232 9,568
1446 Unexpected Costs 184 Lots 200 36,800 1.11% 36,800 27,232 9,568
1454 Land Warranty Reserve Repairs & Warr. Res. 5520000 $ 0.010 55,200 1.67% 55,200 40,848 14,352
1461 Landscaping 212,460 157,220 55,240 78,610 27,620
Contract 1 LS 200000 200,000 6.03%
Sediment Control Soil Erosion 6.23 Acres 2000 12,460 0.38%
1480 Environmental Issues Tree Relocation 10 Trees 750 7,500 0.23% 7,500 5,550 1,950 2,775 975
Hard 2,911,195 2,230,984 680,211 954,946 322,346
Soft 402,895 298,143 104,753 75,147 26,403
TOTAL 3,314,090 100.00% 3,314,090 2,529,127 784,964 1,030,093 348,749
DIA Limit Based Upon 50% of Ten Years of Tax Increment 1,956,025 1,447,459 508,567
Atlantic Village (Block 2)
Grocery/Drug Store & Bank
Assumptions and Sources & Uses
Delray Beach, Florida
ASSUMPTIONS:
Grocer/Drug Store Total Square Feet 16,000
Bank Total Square Feet 3,200
Grocer/Drug Store Rent per Square Foot (years 1 - 3) $9.00
Grocer/Drug Store Rent per Square Foot (years 4 - 8) $10.00
Grocer/Drug Store Rent per Square Foot (years 9 - 13) $12.50
Bank Rent per Square Foot $35.00
Vacancy Loss 10.0%
Bank Annual Rent Escalations 3.0%
Management Fee 5.0%
Replacement Reserves 3.0%
Total Square Footage 19,200
Cost Per Square Foot Commercial $105.00
Land Value (market value according to PAPA) $517,113
Construction Interest Rate 7.0%
Permanent Financing Interest Rate (10 Year Treas + 350bps) 5.5%
Permanent Financing LTV 70.0%
Amortization Period (years) 25
Land Lease Rate (years 6 - 10) 4.0%
Land Lease Rate (years 11 - 15) 6.0%
Land Lease Annual Escalation 2.5%
Estimate of FMV at Completion $3,664,611
Tax Appraisal - % of FMV 85.0%
Mils 22.8869
SOURCES:
Debt Financing $2,203,248
Equity $944,249
TOTAL SOURCES $3,147,498
USES:
Vertical Hard Cost of Construction $2,016,000
Land Development Costs Net of DIA (see land development budget) $436,214
GC Overhead & Supervision (9.0%) $220,699
Construction Contingency (3.0%) $73,566
Impact Fees $188,646
Architecture $67,200
Financing Costs (including doc stamps, title insurance and legal) $78,000
Construction Interest (based on total investment and 12 month build out) $92,536
Property Taxes during Development $11,835
Other Soft Costs $30,000
TOTAL USES $3,147,498
Atlantic Village (Blocks 5 & 13)
Residential Rental & Commercial
Assumptions and Sources & Uses
Delray Beach, Florida
ASSUMPTIONS:
Garage Average Rent Cost
Unit Type # of Units Spaces Sqft. Rent Per SF $/SF
Studios 18 0 600 $895 $1.49 $99.50
1 Bedroom Flats 60 0 850 $1,095 $1.29 $96.25
2 Bedroom Flats 90 0 1050 $1,295 $1.23 $92.00
Artist Studios 16 0 1200 $1,395 $1.16 $112.50
Total Residential Units 184
Average Unit Size 954
Average Monthly Rent per Residential Unit $1,199
Monthly Rent per Square Foot $1.26
Total Commercial Square Feet (5,000 SF of which is retail/restaurant) 22,300
Commercial Rent per Square Foot (from CRA partnership) $15.00
Annual Rent Escalations 3.0%
Annual Expense Escalations 3.0%
Total Residential Square Footage 175,500
Square Footage of Residential Ammenities 4,500
Square Footage of Residential Common Areas 16,000
Cost Per Square Foot Residential $95.94
Cost Per Square Foot Commercial $120.00
Commercial Tenant Allowance per Square Foot $30.00
Land Value (market value according to PAPA) $1,243,829Land Value (market value according to PAPA) $1,243,829
Construction Interest Rate 7.0%
Permanent Financing Interest Rate (10 Year Treas + 300bps) 5.0%
Permanent Financing LTV 70.0%
Amortization Period (years) 25
Land Lease Rate (years 6 - 10) 4.0%
Land Lease Rate (years 11 - 15) 6.0%
Land Lease Annual Escalation 2.5%
Estimate of FMV at Completion $31,089,002
Tax Appraisal - % of FMV 85.0%
Mils 22.8869
SOURCES:
Debt Financing $20,891,621
Equity $8,953,552
TOTAL SOURCES $29,845,173
USES:
Vertical Hard Cost of Construction $22,149,106
Land Development Costs Net of DIA (see land development budget) $1,499,033
GC Overhead & Supervision (9.0%) $2,128,333
Construction Contingency (3.0%) $709,444
Impact Fees $1,154,543
Architecture $112,500
Clubhouse Fixtures & Furnishings $300,000
Financing Costs (including doc stamps, title insurance and legal) $373,820
Construction Interest (based on total investment and 15 month build out) $1,096,810
Property Taxes during Development $35,584
Other Soft Costs $286,000
TOTAL USES $29,845,173
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10. Submit a preliminary operating pro forma estimating the development’s operating income and expenses for a period of time (minimum 10 years) after completion to demonstrate financial feasibility, and should include the following:
Projections of sales and/or leases over time. This should also provide information on
anticipated sale/lease rates for the commercial and residential uses, including vacancy contingency through time. Estimates of project operating expenses (including property taxes, insurance and maintenance costs), annual debt service, and marketing and sales costs. Gross Income, Net Operating Income, Developer Cash-Flow before taxes, and Return on Investment to project partners and investors. See attached operating pro formas.
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10. Submit a preliminary operating pro forma estimating the development’s operating income and expenses for a period of time (minimum 10 years) after completion to demonstrate financial feasibility, and should include the following:
Projections of sales and/or leases over time. This should also provide information on
anticipated sale/lease rates for the commercial and residential uses, including vacancy contingency through time. Estimates of project operating expenses (including property taxes, insurance and maintenance costs), annual debt service, and marketing and sales costs. Gross Income, Net Operating Income, Developer Cash-Flow before taxes, and Return on Investment to project partners and investors. See attached operating pro formas.
Atlantic Village (Block 2)
Grocery/Drug Store & Bank
Rental Cash Flow Pro Forma
Delray Beach, Florida
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11
COMMERCIAL RENTAL INCOME:
Grocery/Drugstore 144,000 144,000 144,000 160,000 160,000 160,000 160,000 160,000 200,000 200,000
Bank 112,000 115,360 118,821 122,385 126,057 129,839 133,734 137,746 141,878 146,135
Vacancy Loss (10%) (25,600) (25,936) (26,282) (28,239) (28,606) (28,984) (29,373) (29,775) (34,188) (34,613)
Total Effective Rental Income $230,400 $233,424 $236,539 $254,147 $257,451 $260,855 $264,360 $267,971 $307,690 $311,521
OPERATING EXPENSES:
Management @ 5% 11,520 11,671 11,827 12,707 12,873 13,043 13,218 13,399 15,385 15,576
Replacement Reserves 6,912 7,003 7,096 7,624 7,724 7,826 7,931 8,039 9,231 9,346
Total Operating Expenses 18,432 18,674 18,923 20,332 20,596 20,868 21,149 21,438 24,615 24,922
Net Operating Income $211,968 $214,750 $217,616 $233,815 $236,855 $239,986 $243,212 $246,534 $283,075 $286,599
Return on Total Assets 6.7% 6.8% 6.9% 7.4% 7.5% 7.6% 7.7% 7.8% 9.0% 9.1%
DEBT SERVICE:
Interest on Debt Financing 120,226 117,850 115,339 112,687 109,885 106,925 103,798 100,495 97,005 93,319
Principal Pmt on Debt Financing 42,132 44,509 47,019 49,672 52,474 55,434 58,560 61,864 65,353 69,040
Total Debt Service $162,358 $162,358 $162,358 $162,358 $162,358 $162,358 $162,358 $162,358 $162,358 $162,358
Debt Service Coverage Ratio 1.31x 1.32x 1.34x 1.44x 1.46x 1.48x 1.50x 1.52x 1.74x 1.77x
CRA Land Lease Payments (4% yrs 6-10, 6% yrs 11-15) 1 1 1 1 1 23,403 23,403 23,403 23,403 23,403 39,717
Return on Total Assets (net of lease payments) 6.7% 6.8% 6.9% 7.4% 6.8% 6.9% 7.0% 7.1% 8.3% 7.8%
Net Cash Flow ($1) $49,609 $52,391 $55,256 $71,456 $51,094 $54,225 $57,451 $60,772 $97,314 $84,524
Equity Investment ($944,250) $49,609 $52,391 $55,256 $71,456 $51,094 $54,225 $57,451 $60,772 $97,314 $84,524
Cash on Cash Return 5.3% 5.5% 5.9% 7.6% 5.4% 5.7% 6.1% 6.4% 10.3% 9.0%
Return on Equity 9.7% 10.3% 10.8% 12.8% 11.0% 11.6% 12.3% 13.0% 17.2% 16.3%
Atlantic Village (Blocks 5 & 13)
Residential Rental & Commercial
Rental Cash Flow Pro Forma
Delray Beach, Florida
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Year 11
RESIDENTIAL RENTAL INCOME:
Gross Potential Rent 2,653,560 2,733,167 2,815,162 2,899,617 2,986,605 3,076,203 3,168,489 3,263,544 3,361,450 3,462,294
Vacancy % 20.0% 10.0% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0% 7.0%
Vacancy Loss (530,712) (273,317) (197,061) (202,973) (209,062) (215,334) (221,794) (228,448) (235,302) (242,361)
Concession % 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0%
Concessions 0 0 0 0 0 0 0 0 0 0
Rent - Residential 2,122,848 2,459,850 2,618,100 2,696,643 2,777,543 2,860,869 2,946,695 3,035,096 3,126,149 3,219,933
Rent NNN - Commercial (CRA partnership) 334,500 344,535 354,871 365,517 376,483 387,777 399,410 411,393 423,735 436,447
Total Rental Income $2,457,348 $2,804,385 $2,972,972 $3,062,161 $3,154,025 $3,248,646 $3,346,106 $3,446,489 $3,549,883 $3,656,380
OTHER INCOME:
Application & Admin Fees 11,040 11,371 11,712 12,064 12,426 12,798 13,182 13,578 13,985 14,405
Pet/Damage Fees 7,360 7,581 7,808 8,042 8,284 8,532 8,788 9,052 9,323 9,603
Late Fees 4,600 4,738 4,880 5,027 5,177 5,333 5,493 5,657 5,827 6,002
Commercial CAM Reimb. (insurance & taxes) 74,249 76,477 78,771 81,134 83,568 86,075 88,657 91,317 94,057 96,878
Total Other Income $97,249 $100,167 $103,172 $106,267 $109,455 $112,738 $116,120 $119,604 $123,192 $126,888
Total Revenue $2,554,597 $2,904,552 $3,076,143 $3,168,427 $3,263,480 $3,361,385 $3,462,226 $3,566,093 $3,673,076 $3,783,268
OPERATING EXPENSES:
Insurance 108,703 111,964 115,323 118,783 122,346 126,017 129,797 133,691 137,702 141,833
Property Taxes 580,609 598,027 615,968 634,447 653,481 673,085 693,278 714,076 735,498 757,563
Management @ 3.5% 75,105 86,924 92,488 95,262 98,120 101,064 104,096 107,218 110,435 113,748
Repairs & Maintenance 55,200 56,856 58,562 60,319 62,128 63,992 65,912 67,889 69,926 72,023
Landscaping 20,000 20,600 21,218 21,855 22,510 23,185 23,881 24,597 25,335 26,095
Pool 9,000 9,270 9,548 9,835 10,130 10,433 10,746 11,069 11,401 11,743
Payroll & Related Expenses 40,000 41,200 42,436 43,709 45,020 46,371 47,762 49,195 50,671 52,191
General & Administrative 55,200 56,856 58,562 60,319 62,128 63,992 65,912 67,889 69,926 72,023
Utilities 64,400 66,332 68,322 70,372 72,483 74,657 76,897 79,204 81,580 84,027
Marketing & Advertising 18,400 18,952 19,521 20,106 20,709 21,331 21,971 22,630 23,309 24,008
Reserves 55,200 56,856 58,562 60,319 62,128 63,992 65,912 67,889 69,926 72,023
Total Operating Expenses $1,081,817 $1,123,837 $1,160,509 $1,195,324 $1,231,183 $1,268,119 $1,306,163 $1,345,347 $1,385,708 $1,427,279
Expense Ratio 42.3% 38.7% 37.7% 37.7% 37.7% 37.7% 37.7% 37.7% 37.7% 37.7%
Net Operating Income $1,472,780 $1,780,714 $1,915,635 $1,973,104 $2,032,297 $2,093,266 $2,156,064 $2,220,745 $2,287,368 $2,355,989
Return on Total Assets 4.9% 6.0% 6.4% 6.6% 6.8% 7.0% 7.2% 7.4% 7.7% 7.9%
DEBT SERVICE:
Interest on Debt Financing 1,035,737 1,013,746 990,631 966,332 940,790 913,942 885,720 856,054 824,870 792,091
Principal Pmt on Debt Financing 429,827 451,818 474,933 499,232 524,774 551,622 579,844 609,510 640,694 673,473
Total Debt Service $1,465,564 $1,465,564 $1,465,564 $1,465,564 $1,465,564 $1,465,564 $1,465,564 $1,465,564 $1,465,564 $1,465,564
Debt Service Coverage Ratio 1.00x 1.22x 1.31x 1.35x 1.39x 1.43x 1.47x 1.52x 1.56x 1.61x
CRA Land Lease Payments (4% yrs 6-10, 6% yrs 11-15) 1 1 1 1 1 56,291 56,291 56,291 56,291 56,291 95,532
Return on Total Assets (net of lease payments) 4.9% 6.0% 6.4% 6.6% 6.6% 6.8% 7.0% 7.3% 7.5% 7.6%
Net Cash Flow ($1) $7,215 $315,149 $450,070 $507,539 $510,442 $571,410 $634,208 $698,890 $765,513 $794,892
Equity Investment ($8,953,553) $7,215 $315,149 $450,070 $507,539 $510,442 $571,410 $634,208 $698,890 $765,513 $794,892
Cash on Cash Return 0.1% 3.5% 5.0% 5.7% 5.7% 6.4% 7.1% 7.8% 8.5% 8.9%
Return on Equity 4.9% 8.6% 10.3% 11.2% 11.6% 12.5% 13.6% 14.6% 15.7% 16.4%
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11. Submit a financing plan which includes a proposal for securing construction and permanent financing for the project. The financing plan should account for all debt and equity investment required to fund the project as well as an analysis of the project’s return on investment, debt service coverage ratio and other financial information that will indicate the financial strength of the proposed development. Third party evidence of an ability to secure financing such as a preliminary financing commitment letter or letter of interest from a lending institution or other primary source of investment financing must accompany the RFP response. A firm financing commitment from a lending institution or other source of investment financing will be required prior to the closing of the sale of the land, or as otherwise stipulated in negotiated agreements between the proposer and the CRA.
The required debt and equity financing, return on investment, debt service coverage
ratio and other financial information is found in the information provided in sections 9 and 10. The letters of interest from lending institutions follow.
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12. Submit information that permits an understanding of the Proposer’s organizational structure, its members, qualifications and financial strength. The CRA reserves the right to research the background of each principal with respect to both credit and police records. The Proposer must submit a signed consent form, attached herein, as part of the proposal. The following information isrequiredin the submission for this paragraph.
a. Description of the legal organizational structure of the Proposer (and its parent
entity, if it is a subsidiary). If the Proposer intends to create a separate entity solely for the purpose of developing the proposed project, then each partner or stockholder or member should describe their respective legal organizational structure. Although the property will be entitled as one project, for financing purposes, two entities will be formed to develop the property. Jones New Urban Delray Commercial, LLC will develop the block between SW 8th and 9th Avenues. Jones New Urban Delray Residential, LLC will develop the two blocks between SW 6th and 8th Avenues. Both entities are joint ventures between Milton Jones Development Corporation, Sean Jones Corporation and New Urban Communities Corporation.
b. Identification of the Proposer’s principals, partners, officers, or co-venturers
including names, addresses, telephone and fax numbers and federal business identification numbers.
The principals of Milton Jones Development Corporation are Milton Jones and Barbara Jones. Milton Jones Development Corporation 540 NW 4th Avenue Fort Lauderdale, FL 33311 Tel. 954-467-1800 Fax. 954-467-4044 Tax ID: 65-0050744 The principal of Sean Jones Corporation is Sean F. Jones. Sean Jones Corporation 540 NW 4th Avenue Fort Lauderdale, FL 33311 Tel. 954-467-1800 Fax. 954-467-4044 Tax ID: 20-3347003 The principals of New Urban Communities are Kevin Rickard and Tim Hernandez. New Urban Communities Corporation
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398 NE 6th Avenue Delray Beach, FL 33483 Tel. 561-279-8706 Fax. 561-272-3951 Tax ID: 65-0840042
c. Information concerning the relevant experience of the Proposer and key project personnel, including a listing and description of past projects.
The Proposers collectively have a great deal of experience in Delray Beach and with commercial and residential projects within community redevelopment areas. Each one of these developments had a major impact on the neighborhoods or corridors in which they were built. Following is a list of relevant projects: Developer Project City Description Jones Shoppes on Arts Avenue Fort Lauderdale 35,191 sf retail (CRA) Jones Regal Trace Fort Lauderdale 408 apartments (CRA) New Urban Courtyards of Delray Delray Beach 32 townhomes (CRA) New Urban Atlantic Grove Delray Beach 48,000 sf office/retail, 55 townhomes, 20
lofts (CRA) New Urban Old Palm Grove Delray Beach 11 townhomes, 33 single family homes
(CRA) New Urban Coda Delray Beach 36 townhomes (CRA) New Urban East Village Fort Lauderdale 32 townhomes (CRA) New Urban Osceola Woods Jupiter 146 townhomes (CRA) New Urban Belle Isle Wilton Manors 51 townhomes, 9 live work units New Urban Botanica Jupiter 123 single family homes New Urban Greenwich Jupiter 105 townhomes, 18,000 sf office/retail, 21
apartments New Urban Mirabella Miramar 10 live work units and 147 townhomes New Urban Lyman Village Lantana 43 townhomes and 16 single family homes
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Key project personnel:
Key Project Personnel
Name Company Education Area of Expertise Professional Affiliations
Milton Jones
Sean Jones BBA Accounting, Baylor UniversityJD University of Florida
Kevin Rickard FL Certified General Contractor National Association of Home BuildersFlorida Home Builders AssociationUrban Land InstituteCongress for the New UrbanismBOD Goldcoast Builders Association
Tim Hernandez Urban Planner (AICP) Urban Land InstituteCongress for the New UrbanismAmerican Planning AssociationCity of Ft. Lauderdale CRA Advisory BoardAbacoa Partnership for Community
Brian Grossberg BS Accounting, University of Florida Certified Public AccountantMaster of Accounting, University of Florida MBA Duke University
BS Business Administration, Western Michigan University
BS Urban Planning, Michigan State University
BS Political Science, Florida A& M University
Commercial and residential real estate negotiations, real estate lending, review of title and contractual review of various types of real estate and construction contracts.
FL Certified General Contractor, FL Licensed Real Estate Broker, FL Licensed Mortgage BorkerCertified General Contractor, Member of FL Bar, FL Licensed Real Estate Broker, FL Licensed Mortgage Broker
MM Kellogg School, Northwestern University
Palm Beach County Transportation Performance Standards Committee
Builder/developer focused on infill and redevelopment (commercial and residential).
New Urban Communities Corporation
Milton Jones Development Corporation
Milton Jones Development Corporation
New Urban Communities Corporation
Licensing / Professional Certification
Builder/developer focused on infill, redevelopment and traditional neighborhood development.
Builder/developer focused on infill, redevelopment and traditional neighborhood development.
Finance, transaction execution, accounting, and tax.
New Urban Communities Corporation
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d. A minimum of three (3) professional references.
As to Milton Jones Development Corporation and Sean Jones Corporation, below are the references which are as follows: Bank of America/US Trust 401 East Las Boulevard, 21st Floor Fort Lauderdale, FL 33394 Attn.: Frederick F. Perry, Senior V. P. (954) 765-2192 Facsimile (954) 765-2199 Cellular: (954) 873-1544 Paradise Bank 540 North Federal Highway Fort Lauderdale, FL 33304 Attn.: Philip G. McNally, Executive Vice President (954) 764-8778 John Barranco, A.I.A. Barranco Gonzalez 1915 Southeast 4th Avenue Fort Lauderdale, Florida 33316 Office: (954) 961-7675 Facsimile: (954) 961-7685 Stuart Cohen, A.I.A. Cohen Freedman Encinosa 8085 NW 155th Street Miami Lakes, Florida 33016 Office: (305) 826-3999 Facsimile: (305) 826-4155 As to New Urban Communities, below are the references which are as follows: Michael Busha, Executive Director Treasure Coast Regional Planning Council 421 SW Camden Ave, #1 Stuart, Florida 33494 Office (561) 221-4060 Facsimile (561) 221-4067 Joseph Erwin, Senior Vice President/Team Leader
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Regions Bank 525 Okeechobee Boulevard, Suite 700 West Palm Beach, FL 33401 Office (561) 837-8224 Fax (561) 837-8260 Drew Gaines, President Pro Frame Contracting, Inc. Office (954) 979-9998 Facsimile (561) 979-9919 Donaldson Hearing, ASLA Cotleur and Hearing 1934 Commerce Lane, Suite 1 Jupiter, Florida, 33458 Office (561) 747-6336 Fax (561) 747-1377
e. In addition, the proposer must make available for inspection at his or her place
of business, a current (audited, if available) financial statement of the proposing entity which includes a balance sheet, a three-year statement of past income, and a projected one-year income statement for the current fiscal year for the proposer (and its parent entity if it is a subsidiary). If the proposing entity is to be created specifically for the intended project or if the proposing entity is less than three years old, then each partner or stockholder must submit its own financial statement as described above.
The requested financial information is available for inspection at the offices of Milton Jones Development, Sean Jones Corporation and New Urban Communities.
f. Information regarding any legal or administrative actions, past or pending, that
might impact the capacity of the proposer (or its principals or affiliates) to complete the project must be disclosed. Disclosure of any bankruptcies, foreclosures and other legal actions past or pending by any of the above or related entities during the past ten years must be made with the RFP.
Milton Jones Development Corporation has no bankruptcies, foreclosures and other legal actions past or pending during the past ten years. Sean Jones Corporation has no bankruptcies, foreclosures and other legal actions past or pending during the past ten years.
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Affiliated entities of New Urban Communities have been involved in several legal actions stemming from the housing crash. Cases with City National Bank and SunTrust Bank in Florida have been settled and are therefore immaterial. Cases with Bank of America and Harris Bank are pending in Illinois. Both of these cases are considered immaterial from a financial exposure perspective.