Center School Redevelopment: Spirit

Round #2

Updated 10 Year Cash Flow Model

Unit Mix

After the latest changes to the property design, the table on the right highlights the 160-unit mix of studio, one-bedroom, and two-bedroom apartments as well as 6 three-bedroom homes for rent.

Unit M

Studio

1 Bedroom 102
2 Bedroom 44 11
3 Bedroom Homes 6 1980 SF
Total Units 160 901 SF $

 

Project Budget

The Project Budget is inclusive of the changes from the original RFP submission, additional parking both below grade and on the ground level as well as adjusting the property orientation so that the main entrance faces East Broadway and lowering the traffic on Sutton Avenue.

Spirit KN are well financed and highly confident in its ability to capitalize this project. We are happy to discuss our financials with the Town of Stratford.

LTC $ Amount PSF $/Unit
SOURCES
Construction Debt 70% $28,234,719 $161 $176,467
Mezzanine Debt 9% $3,764,548 $21 $23,528
Equity 21% $8,339,469 $48 $52,122
TOTAL SOURCES $40,338,736 $230 $252,117
USES
Land ** $750,000 $4 $4,688
Acquisition Costs $550,000 $3 $3,438
Soft Costs $5,039,983 $29 $31,500
Hard Costs $30,810,963 $175 $192,569
Financing Costs $3,187,791 $18 $19,924
TOTAL USES *** $40,338,736 $230 $252,117

The current plan includes a below grade parking structure consisting of 206 spaces, of which 50 will be allocated to the Board of Education. The remaining 156 spaces will be rented to residents of Sutton Place. The previous plan had 198 below grade spaces, all of which were available for rent for residents of the building. As such, the difference equates to $25,200 in lost annual revenue (42 spaces at $50 per month) or approximately

$504,000 in reduced value. Additionally, the cost of the below grade structure has increased to $6.9M as a result of the increased parking count. As with Spirit KN’s previous submission, the goal of the proposed PILOT is to structure an abatement schedule that pays for the cost of the below grade garage plus the lost value of the parking on a net present value basis.

10 Year Cash Flow Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
Rental Income

Market Rent

 

 

 

1,382,260

 

4,155,441

 

4,257,093

 

4,386,576

 

4,519,998

 

4,657,478

 

4,799,140

 

4,945,111

Gross Potential Rent 1,382,260 4,155,441 4,257,093 4,386,576 4,519,998 4,657,478 4,799,140 4,945,111
Loss to Lease (9,136) (56,397) (60,664) (62,509) (64,410) (66,369) (68,388) (70,468)
Concessions (101,510) (74,184) (40,442) (41,672) (42,940) (44,246) (45,592) (46,979)
Vacancy (773,202) (395,673) (212,855) (219,329) (226,000) (232,874) (239,957) (247,256)
Model Unit (8,388) (25,163) (25,163) (25,163) (25,163) (25,163) (25,163) (25,163)
Delinquency/Credit Loss (6,911) (20,777) (21,285) (21,933) (22,600) (23,287) (23,996) (24,726)
Total Rental Income 483,114 3,583,247 3,896,684 4,015,971 4,138,886 4,265,540 4,396,045 4,530,521
Other Income
Retail Income
Utility Income 4,935 30,664 32,991 33,815 34,661 35,527 36,416 37,326
Miscellaneous Income 54,967 248,321 262,668 269,235 275,966 282,865 289,937 297,185
Total Other Income 59,902 278,985 295,659 303,051 310,627 318,392 326,352 334,511
Effective Gross Income 543,016 3,862,232 4,192,343 4,319,022 4,449,513 4,583,932 4,722,398 4,865,032
Controllable Expenses
General & Administrative 20,315 61,453 62,989 64,564 66,178 67,832 69,528 71,266
Payroll & Benefits 115,947 350,739 359,507 368,495 377,707 387,150 396,829 406,749
Advertising & Marketing 22,120 66,913 68,586 70,300 72,058 73,859 75,706 77,599
Turnover 7,790 31,550 48,308 49,515 50,753 52,022 53,323
Repair and Maintenance 13,333 40,333 41,342 42,375 43,435 44,520 45,633 46,774
Contract Services 74,667 225,867 231,513 237,301 243,234 249,315 255,547 261,936
Total Controllable Expenses 246,382 753,094 795,487 831,343 852,127 873,430 895,266 917,647
Non-Controllable
Property Management 24,000 106,211 115,289 118,773 122,362 126,058 129,866 133,788
Utilities 41,100 79,330 76,735 78,533 80,376 82,266 84,202 86,187
Insurance 21,333 64,533 66,147 67,800 69,495 71,233 73,014 74,839
Property Taxes 4,051 52,808 104,342 168,103 226,647 287,263
Total Non-Controllable Expenses 86,433 250,075 262,221 317,914 376,575 447,660 513,728 582,078
Total Operating Expenses 332,815 1,003,169 1,057,708 1,149,258 1,228,702 1,321,090 1,408,994 1,499,725
Net Operating Income $ – $ – $ 210,201 $ 2,859,063 $ 3,134,635 $ 3,169,764 $ 3,220,811 $ 3,262,842 $ 3,313,404 $ 3,365,306
Calendar Year Full Tax Amount Year of Tax Incentive

Agreement

% of Taxes Phased In  

Tax Savings

Abated Taxes to Pay
2024 904,585 Year 1 0% 904,585
2025 937,782 Year 2 0% 937,782
2026 954,835 Year 3 0% 954,835
2027 972,198 Year 4 10% 874,979 97,220
2028 989,877 Year 5 15% 841,396 148,482
2029 1,088,260 Year 6 15% 925,021 163,239
2030 1,108,049 Year 7 20% 886,440 221,610
2031 1,128,199 Year 8 25% 846,149 282,050
2032 1,148,714 Year 9 30% 804,100 344,614
2033 1,169,603 Year 10 35% 760,242 409,361
2034 1,339,730 Year 11 40% 803,838 535,892
2035 1,364,092 Year 12 45% 750,251 613,841
2036 1,388,897 Year 13 50% 694,449 694,449
2037 1,414,153 Year 14 60% 565,661 848,492
2038 1,439,869 Year 15 70% 431,961 1,007,908
2039 1,643,755 Year 16 80% 328,751 1,315,004
2040 1,673,645 Year 17 90% 167,365 1,506,281
2041 1,704,079 Year 18 100% 1,704,079
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