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acknowledgements

We want to express our deep gratitude to several individuals who have either provided guidance or assisted us throughout this project. Without their eagerness and expertise, we would not have reached this stage with the proposal. We would like extend our special thanks to Bank of America Merrill Lynch and associated parties for the opportunity to learn and compete in the Low Income Housing Challenge.

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Low-Income Housing Challenge

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We want to thank... Robert Jones - Executive Director, East palo alto Communit y alliance and neighborhood development organization lydia tan - head of development, bentall kennedy Derek Ouyang - Lecturer, Civil and Engineering Department of Stanford Moom Janyaprasert - President, Association of Students Promoting innovations in Real Estate lesia preston - executive director, ecumenical hunger program tiffany griego - managing director, Stanford REal Estate Department Marina Yu - Contracts Manager, Ravenswood Family Health Center Luisa Buada - Chief Executive Officer, Ravenswood Family Health Center ... and all friends and teachers along the way.

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Stanford University

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Bank of America Merill Lynch

meet OUR team

Nicholas Pez

ASHWIN AGRAWAL

MINH NGUYEN

sushant gupta

student

student

student

student

stanford university

stanford university

stanford university

stanford university

Nicholas is a freshman majoring in

Ashwin is a first-year Master’s in

Minh is pursuing a dual degree in

Sushant is currently pursuing

Economics and Urban Studies with

sustainable design and construc-

Management Science & Engineering

Master‘s in Sustainable Design &

classwork focusing on real estate

tion. He completed his undergra-

and English Literature. He is inspired

Construction Management. He finis-

development and placemaking. He

duation from IIT Bombay, India. He

by the intersection of arts and real

hed his undergraduate education

is interested in entrepreneurship

is interested in entrepreneurship,

estate, especially the placemaking

in Civil Engineering from IIT Delhi,

and architectural design. He loves

financial modelling, optimizations

of museums and galleries.

India. His interests lie in commer-

flying airplanes and playing tennis.

and investment management.

cial, heavy civil construction, and project finance.

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Low-Income Housing Challenge

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Stanford University

siddhant chandra

fangyi lin

derek ouyang

student

Student

team advisor

stanford university

stanford university

STANFORD UNIVERSITY

Siddhant is currently pursuing

Fang-Yi is a first-year Master’s

Derek holds a dual B.S. in Civil

his MS in Structural Engineering

student majoring in Structural

Engineering & Architectural Design,

& Geomechanics. He completed

Engineering & Geomechanics. She

& an M.S. in Structural Engineering.

his undergraduate education in

finished her undergrad in Civil

Project manager of Stanford’s first-

Civil Engineering from NIT Trichy,

and Construction Engineering in

ever entry to the U.S. DOE’s 2013

India. His interests lie in financial

Taiwan. She has interests particular

Solar Decathlon, he has been featu-

modeling, investment management,

in sustainable building and project

red as an up-and-coming designer

product design, project manage-

management.

in the Los Angeles Times, in Home

ment, finite element analysis, solid

Energy magazine’s “30 under 30”, &

mechanics and structural design

at TEDxStanford.

optimisation.

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Stanford University

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Bank of America Merill Lynch

TABLE OF CON T EN TS

executive summary

08

THE MARKET

10

THE SITE

13

entitlements 14

06

THE design

16

Stanford GRADUATE HOUSING

28

Community engagemenT

30

THE finance

34

appendix a: THE PROJECT

40

appendix b: Letters

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Low-Income Housing Challenge

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Stanford University

Introduction „A NEW DOWNTOWN“

When we first conducted a preliminary research on East Palo Alto, we were struck by the displacement of the Hispanic/ Latino and African American population as the growth of the neighboring Palo Alto creeps upon the city. As Stanford students who are nurtured with the values of friendship and community, we are compelled to pursue this project as an attempt to bridge not only the numbers in economics and finance but also the gap of culture and identity between the two cities. The Corner is our dedication to both Stanford University and the distressed communities of East Palo Alto.

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Stanford University

THE CORNER

Bank of America Merill Lynch

The following proposal delineates a comprehensive process to develop the The Corner, a mixed-use development, located at the intersection of University Ave. and Bay Rd. Our team is in partnership with Stanford

OVERVIEW Developer

East Palo Alto Community Alliance and Neighborhood Development Organization

Location

2395 University Ave, East Palo Alto California 94303

University’s Real Estate Department and East Palo Alto Community Alliance and Neighborhood Development Organization, a local non-profit dedicated to providing affordable housing for East Palo Alto residents. We have reached out to local communities and residents, who have eagerly expressed their enthusiasm to participate in our project. Ultimately, The Corner aims to create a new downtown in East

Total Site Acreage Program Uses

2.03 acres Housing, Community Medical Clinic, Retail, Non-Profit Community Events

Total Residential Units Unit Type

162 75% affordable, 25% market

Unit Breakdown

Studio - 15 One Bedroom - 35 Two Bedroom - 54 Three Bedroom - 56 Manager’s Unit - 2

Palo Alto (EPA) by serving the needs of the city and establishing a vibrant economic, social center.

Students, families, and elders 30% - 60% AMI

EXecutive Summary Residential Sources

Commercial Sources

08

Permanent Loan, Investment Loan, Tax Credit Equity, City Development Impact, Fee Soft Loan, Grants New Market Tax Credit, Dignity Health Fund, Bank Loan


Low-Income Housing Challenge

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Stanford University

The MArKET

stalls. However, with the incorporation

Stanford Graduate Housing

EPA is home to a large population of

of student housing and retail, we

Through a rigorous application process,

Latino/Hispanic and African Americans.

believe that we could obtain a signifcant

90 Stanford students will live in 40 of

Under pressure from its thriving

reduction through parking variances.

The Corner‘s 162 dwelling units. They will engage in community services

neighbors, the city lacks affordable housing to accomodate families. Almost

THE DESIGN

with the residents and local non-profit

three-quarters of the residents are rent

The Corner embodies the vision for EPA’s

organizations located in our building.

or mortgage-burdened while the waitlists

new downtown: a bright place to live,

This integration ultimately empowers

for affordable-housing properties are

work, and play. Our mixed-use project

the community with an opportunity for

closed for an extended period of time.

offers a selection of the city’s most-

mutual learning.

needed commercial spaces as well as a

THE site

significant supply of affordable housing

THE FINANCE

Located at the intersection of

with a commitment to sustainability.

Financing for the project will be split

University Ave and Bay Rd in EPA, The

Our design allows residents and guests

between the residential and commercial

Corner encloses 2.03 acres. The site is

to enjoy from a variety of indoor and

components. The total development

surrounded by various amenities such as

outdoor common spaces as well as great

cost for the residential is at $71.5 m and

the city‘s library, an elementary school,

views from all angles.

for the commercial is at $11.3 m. During

USPS, and a park. There are five bus

the construction period, $47.5 m will

stops in the one-block proximity offering

Community Engagement

come from a 24-month construction

frequent services with an average wait

Since February, the Stanford team

loan, $2.71 m from the 4% tax credit

time of 15 minutes.

has been in close contact with local

equity, and the remaining $2.5 m of the

community organizations such as EPA

cost will be deferred until conversion. As

EntitlementS

CAN DO, EHP, and Ravenswood Family

the project construction is completed,

The Corner is under the Ravenswood 4

Health Center. The suggestions taken

The Corner will be funded through three

Corners TOD Specific Plan. The zoning

from these organizations not only gave

main sources: $28.84 m permanent loan,

allows commercial and residential uses.

us firsthand insights into The Corner’s

$18.09 m from 4% tax credit equity, and

With the density bonus, our site allows a

potential to benefit EPA, but also served

$5.0 m AHSC soft loan.

total of 162 dwelling units. For parking,

as an affirmation of support from the

our project needs to provide 298 parking

local communities.

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THE MARKET DEMOGRAPHICS Divided only by a now-dry creek called San Francisquito, Palo Alto and East Palo Alto (EPA) present two distinct sides of the Silicon Valley job market boom: the former flourish while the latter chronically dragging behind. A quick glance at Figure 1 reveals EPA’s slow growth. With 29,684 living residents, the city is home to a younger population who earns less than half of Palo Alto’s median income. It also struggles with poverty and unemployment as the two rates far exceed those of Palo Alto. The economy of EPA is specialized in Administrative, Support & Waste Management Services; Accommodation & Food Service; and Other services. Indicator Population (2016) Average Household Size Median Age Median Household Income Poverty Rate Unemployment Rate

East Palo Alto 29,684 4.03 29.2 $52,012.00 18.50% 3.40%

Palo Alto 67,024 2.41 41.1 $136,519.00 5.45% 1.80%

San Mateo County 765,135 2.75 39.1 $85,648.00 11.30% 2.10%

California 39,540,000 2.9 36.4 $60,883.00 15% 4.30%

Figure 1: East Palo Alto in Comparison EPA is also notable for its demographic composition, which consists of 65.1% Hispanic/Latino, 13% African American, and 8.83% Pacific Islanders. Due to a concentrated population of minorities, 73.6% of the residents speak a non-English language, and 70.3% are U.S. citizens. Figure 2 compares EPA’s demographics with those of San Mateo County, which features a majority of white inhabitants [1]. Due to the influx of the Hispanic/Latino group, investors and stakeholders have been speculating about the impact of undocumented immigration on housing vulnerability.

Figure 2: A Demographic Comparison of EPA (left) and San Mateo County (right)

[1] “East Palo Alto, CA and San Mateo County, CA.” Datausa.io, Data USA, 3 Mar. 2017, Web.

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LOCAL HOUSING MARKET EPA’s real estate landscape is undergoing drastic changes in the recovery years after the hard-hitting 2008 housing crisis. The median property price was $417,800 in 2015. By January 2018, the value doubled to $907,000, nearly 70% higher than the median house price in the state California [2]. On the other hand, the house ownership rate has remained relatively stable in the past few years, hovering around 34-36% [3]. As of April 2018, average rent for an apartment in EPA is $2,520, decreasing by 1% from last year’s average rent of $2,535 [4]. On average, one-bedroom apartments (average size of 618 SF) rent for $2152/month, and two-bedroom apartment average $3,032/ month (average size of 937 SF). Contextualizing the rent values, Figure 3 reveals that EPA’s residents are facing significant housing cost burdens [5]. To combat rapidly changing housing costs, many residents are choosing to live with family members or to rent out rooms in their homes. In fact, about 28% of all units in EPA are overcrowded, tripling the County’s percentage of 8.9% [6,7].

Figure 3: Percentage of Housing Units in EPAwith Rent and Mortgage Burdens, 1980–2010 Since 1980, EPA has served as the optimal choice of affordability for low-income households who otherwise would be excluded from more affluent regions in California. City officials and advocates are in unanimous agreement regarding the impact of the economic recession and foreclosure crisis on EPA, i.e. the growing displacement of many many African American and Latino homeowners and intensifying stress on low and middle-income households [8]. In addition, the city faces two complex affordable housing stressors: an increase in second dwelling units and the consolidated ownership of multifamily rental housing stock in the southwestern part of the city [9].

[2] “East Palo Alto CA Home Prices & Home Values.” Zillow, Zillow Inc., 31 Jan. 2018, Web. [3] “East Palo Alto, California Housing Data.” East Palo Alto CA Housing Data, TownCharts, 3 Feb. 2016, Web. [4] “East Palo Alto, CA Rental Market Trends.” RENTCafé, RENTCafé, 4 Apr. 2017, Web. [5] Defined as paying 35% of income or more toward housing costs. See “QuickFacts.” U.S. Census Bureau QuickFacts: East Palo Alto City, California, U.S. Census Bureau, 5 May 2013, Web. [6] Defined as having one or more person per room. [7] “Demographic and Socio-Economic Characteristics.” City of East Palo Alto, City of East Palo Alto, 28 Feb. 2016, Web. [8] Harris, Logan Rockefeller, and Sydney Cespedes. “East Palo Alto: An Island of Affordability in a Sea of Wealth.” Urban Displacement, San Francisco Organizing Project and Peninsula Interfaith Action , June 2015. [9] Ibid.

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However, strong protection for renters and support for affordability have become a part of the city’s identity. Despite legal challenges at the state-level, EPA enacted multiple policies favorable to affordable housing such as the 1988 ordinance for rent stabilization and the 2002 inclusionary housing program [10]. The latter now requires all new buildings to dedicate at least 20% of the residential units to households in the 30-80% AMI range. Other changes toward alleviating the housing pressure include a unanimously endorsed housing impact fee on new-market rate development, an ordinance denying conversion to condominium, and a reduction of parking and setback requirements on

Figure 4: Affordability gap for a one-person household in a one-bedroom apartment Figure 4 shows the affordability gap for various income distributions in San Mateo County for one-person households to provide the context for our pro forma. The affordability gap is calculated using the difference between the average monthly rent of the county and the AMI brackets provided by the Department of Housing and Urban Development (HUD). The government would be providing as much as $1,998 and as little as $249 for individuals in the range of 30-100% AMI. EPA features 11 existing affordable-housing complexes (see Figure A1 of Appendix A), supplying 520 affordable apartments, only 172 of which are subsidized by Section 8. However, most of these apartments’ waitlists are closed due to zero vacancy. Given the discussed housing scarcity, housing cost burdens, favorable conditions provided by the city, and the closed waitlists, we strongly believe that it is not only appropriate to construct The Corner Downtown but also of considerable significance to contribute 162 units—the largest affordable-housing project in the area yet—to the low-income communities of EPA.

[10] For a summary of EPA’s recent policies regarding affordable housing, see Policy Context in Appendix A.

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THE SITE Our site, as shown in Figure 5, encompasses approximately 2.03 acres and is bounded by University Ave. the city’s important connection with the rest of the region, and Bay Rd., a major east-west corridor in EPA. The site is part of the Ravenswood 4 Corners TOD Specific Plan, particularly in the 4 Corners District. Surrounded by low-tomedium density residential zones, the site has easy access to many amenities in the neighborhood such as East Palo Alto Library, Cesar Chavez Elementary School, Jack Farrell Park, USPS, McDonald’s, and the future Dumbarton Rail Line. Our project aims to assist EPA and specifically the Ravenswood Project in transforming the District into a thriving neighborhood with equitable housing, employment opportunities, parking, and open spaces.

Figure 5: Site Context For public transportation, there is one bus stop on Bay Rd. next to our site. Another four are located in one-block proximity with an average wait time of 15 minutes.

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entitlements The Corner is zoned under R-HD-5 (Multiple-Family High Density Residential Zone) of the General Plan. It also specifically belongs to the Ravenswood 4 Corners TOD Specific Plan, which overwrites the municipal Code of Ordinances. Our mixed-use development adheres to the standards set under this Specific Plan, which permits various commercial uses such as retail, residential, or professional offices. Figure A2 in Appendix A provides a more detailed overview of the area’s land use plan.

DENSITY BONUS The maximum density is set at 60 du/acre, providing us with a total of 120 dwelling units. The city’s Density Bonus Ordinance from November 2009 grants a 35% density bonus to properties that dedicate 20% of their units to affordable housing. Our project’s affordable component makes up 75% of the units, which suffice this requirement. Figure 6 is a summary table for the site’s development standards. See Standards in Appendix A for other requirements. Standards Density (with bonus) Height Limit Ground Floor Height Limit Floor Area Ratio (nonresidential and commercial component)

Site Allowance 162 du 6 stories (additional 15 ft. for elevator penthouses) 15 ft. floor-to-floor 1.5

Figure 6: Site Allowance

PARKING Since our site falls in the Ravenswood Specific Plan, parking requirements follow its guidelines. For residential, our calculation is divided into two components: affordable units and student units. For the latter, we calculate the parking allowance using Stanford University‘s General Use Permit reported 0.55 parking permits-to-beds ratio [11]. Type

Parking Space Requirement 1 per du (one-bedroom) Residential +0.5 each additional bedroom Professional Office 1 / 300 sqft Medical Office 1 / 200 sqft Non-Residential 1 / 400 sqft

Site Allowance

Total

231 0 35 32

298

Figure 7: Parking Allowance In total, our project needs to provide 298 parking stalls. However, with the incorporation of student housing and retail, we believe that we could obtain a significant reduction through parking variances. Historically, downtown centers share parking spaces rather than reserving specific parking spaces for each individual use [12,13]. Mixed-use projects, which often benefit from different peak hours, can and should embrace the sharing of parking resources [14]. [11] For a detailed report, see Figure A3 in Appendix A. [12] Smith, Mary. Shared Parking. Urban Land Institute, 2005. [13] Puckett, Erin Michelle. “Parking Strategies for Suburban Mixed-Used Developments.” Virginia Polytechnic Institute Study, 17 Apr. 2013. [14] For more on mixed-use parking studies, see Shared Parking in Appendix A.

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During working hours, we anticipate that the health clinic will take up 108 parking stalls, leaving 36 stalls for retail and 36 for residential. As work hours end, the stalls will be freed up for the residents, returning a total of 144 stalls. Given the different peak periods of the residential and retail components and EPA’s commitment to affordability, we strongly believe that EPA will grant our project significant variances regarding parking [15]. Figure 8 below shows our calculation of peak times for weekdays and the weekend.

Figure 8: Parking hours

E N V I RO N M E N TA L R E V I E W Our project is subject to the review of the California Environmental Quality Act (CEQA). Since CEQA is a self-executing statute, we will perform an Initial Study of the site to predict future measures and possible soft costs. As soon as the local authorities and related agencies confirm that the site poses no potential or significant effects on the environment, we will submit a Negative Declaration to the State Clearinghouse for review before proceeding.

Figure 9: Our Site on GeoTracker

Following the guidelines provided, we will assess air quality, geology/soils, hazards/hazardous materials, hydrology/ water quality, and noise and report any findings regarding agricultural, biological, cultural, and mineral resources. According to GeoTracker, the State Board’s Internet-accessible database on waste and hazardous substances, our site is not a non-federally owned cleanup site or is in close proximity to any permitted facilities [16,17]. The nature of the existing infill site also leads us to believe that there is minimal negative impacts to land use and historical artifacts. Because our project is committed to sustainability, The Corner includes a 6,000-SF green roof to mitigate longterm environmental impacts. We explore specific sustanability implementations in the following section.

[15] The city recently reduced parking and setback restrictions on second dwelling units. [16] Leaking Underground Storage Tank Cleanup (LUST) Sites, Cleanup Program Sites, Military Cleanup Sites, and Department of Toxic Substances Control (DTSC) Cleanup Sites [17] Waste Discharge Requirement Sites, Permitted Underground Storage Tank (UST), Land Disposal sites, and Oil/Gas Sites.

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THE DESIGN

“I live in the corner� will have more than a solely geographical meaning in East Palo Alto. The Corner maximizes its potential to serve the local community with respect and innovation. As the first modern development at the intersection of University Avenue and Bay Road, our project opens a new chapter for the city and its people. An engine for economic and social prosperity in East Palo Alto, The Corner is for living, but it is also for working, playing, and learning.

Figure 10: The Corner

OVERVIEW The Corner has the potential to provide a significant amount of affordable housing for EPA, inspire an enriched quality of life, and transform the intersection into a vibrant center for the city - all at once. Our building has a complex exterior but a rather simple anatomy that prioritizes efficiency, sustainability, and the well-being of residents above all else. The 162-unit mixed-use project has six stories and is built out of timber with modular panels. The commercial ground level height is 16 ft. floor-to-floor, and all five residential levels above the ground floor are 10 ft. tall floor-to-floor. The private residential space of our building has two main entrances, one on the corner of University Ave. and Bay Rd. and the other on the corner of University Ave. and Weeks St. The parking lot is accessible from Bay Rd. or from Weeks. St.

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Every commercial space faces the street and has full pedestrian access. Guests have optimal pedestrian access to the street through passageways on the ground level of the building. To access a commercial space on University Avenue, guests can cross through these public passageways instead of walking around the building. These passageways are open, and they are separate from the residential lobby entrances. Only residents and guests are allowed to enter the residences and their common spaces. Stairways and elevators are available in each of the two main lobbies. Each of these lobbies also has direct access to the parking lot in the back, all on the same level. At the backs of the two residential wings, there are two additional stairways that have access to the parking lot. Two garbage disposal containers are located behind the two wings of the building. Our building’s garbage chutes and HVAC utility and storage rooms are centralized around the elevators as well. Only the two lobby stairwells grant access to the roof.

FLOOR PLANS Residential lobby elevators & Stairs STAIRS

ACCESS TO PARKING LOT

MEDICAL OTHER COMMERCIAL USES

Figure 11-13: First Floor Plan 017


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Studio ONE-BEDROOM Two-BEdroom three-BEDROOM

Figure 14-18: Floor Plans (2-6) 018


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U N I T L AYO U T All residential hallways are double-stacked to maximize efficiency and minimize excess space or construction. All rooms inside each residential unit have direct sunlight and balcony access. Living rooms and kitchenettes are integrated into one living space with a sliding window that leads to the balcony. Two and three-bedroom units are extensions of the one-bedroom unit layout with an extended hallway and additional bedrooms. All bedrooms and living spaces have identical dimensions except for studio units. Studio: One Bedroom, One Bathroom: Two Bedrooms, One Bathroom: Manager’s: Three Bedrooms, Two Bathrooms:

Figure 19: Studio Plan

Figure 21: Two-bedroom Plan

400 SF 15 units 530 SF 35 units 790 SF 54 units 960 SF 2 units 1060 SF 56 units

Figure 20: One-bedroom Plan

Figure 22: Three-bedroom Plan

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Figure 23: Typical Bedroom

Figure 24: Typical Living Room

Figure 25: Typical Living Room and Balcony 020

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DESIGNING A LIVING BUILDING The face of our building is an integral part of its design. The Corner upholds its residential style while it also champions a sharp, modern design as the face of East Palo Alto’s new downtown. The directionality of our building’s main entrance is intentional. It faces the core of EPA at its most important intersection. In the opposite direction, the residential entrance on Weeks St. and University Ave. is smaller and more private in order to maintain the integrity of the other multifamily buildings in the area. As the viewer follows the building toward the intersection, it’s structure evolves to a broader and more open one that embraces the city’s future and champions The Corner as a center of activity and community, a living piece in the city’s ever-changing puzzle.

Figure 26: View from University Ave. and Bay Rd. The Corner itself has a building anatomy different from the rest of the building. Instead of having a core divided into six stories, it has three atria, each two stories tall with double-heighted windows facing the corner and the courtyard. The bottom atrium includes the ground level entrance and the second story with access to the courtyard, the middle atrium includes the third and fourth stories, and the top atrium includes the fifth and sixth stories. The elevator and staircase does have access to every floor, and each atrium has peripheral hallways in the top floors that work as balconies to the atrium. Each atrium embodies a special function in the building. These places can be dedicated to specific workshops, meals, cultural events, or resident gathering areas. While these are indoor spaces, the two double-heighted windows on either side provide cross-ventilation and natural lighting throughout the day. Not only does this constant source of lighting provide a pleasant atmosphere for resident gatherings, but it also saves energy costs during the day. The double-heighted windows facing the intersection are perforated, letting part of the three atriums become balconies. This space defines The Corner as a living center of constant activity and movement.

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In every side of the building, there are instances where the exterior frames of the residential units do not match vertically. Rather, they are organized in an interlaced pattern that presents a structural representation of The Corner’s social message of bonding and diversity. Thus, every floor in the building has a slightly different unit organization.

Figure 27: Interlaced Facade Units Our building’s design also responds to the integrity of its neighborhood today. A line of trees divides the rear of the parking lot with the adjacent family homes, and the backs of the residential wings begin over thirty feet into the lot, granting plenty of breathing room between our large project and its neighbors.

Figure 28: Activity, Movement, and Social Space

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Low-Income Housing Challenge

THE CORNER

Stanford University

C O M M U N I T Y & P R I VACY The courtyard is the central social space of The Corner. It is accessible from the two cores of the building on the second floor. The courtyard includes a playground, large open spaces, and plenty of sitting areas. This courtyard is the ideal center for The Corner’s community events sponsored by the project’s partner NGO’s, Stanford students, or anyone in the resident community. No corners are too acute to compromise the privacy of residents, and all units facing the courtyard have an enclosed patio that offers privacy and a space larger than regular balconies. Aside from the courtyard and the three atria in the main core, The Corner also has two outdoor terraces on the fifth floor with additional sitting areas facing west, giving residents opportunities to enjoy the sunset. Additionally, smaller common spaces in each floor provide opportunities to connect and learn. Structurally, these operate as open spaces between residential units. At the same time, they provide natural lighting and variation to the hallways.

Figure 29: Fifth-floor Terrace

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BUSINESS IN THE CORNER Housing is not just a roof over a person’s head. Housing is a process that involves all other elements in life, and these include urban amenities. We believe that The Corner will not only satisfy the need of housing for EPA residents, but it will also bring services and needed amenities for the community that generate new employment and keep income circulating and growing inside EPA. An active and responsive business environment is one of the foundations for a healthy community. The Corner will reserve commercial spaces located on the first floor and give the rental priority to the existing businesses on the site, including the Taqueria El Jarocho, the La Estrellita Market Place, the Hair Saloon, and Las Adelitas Restaurant, which are all located on the site currently. In addition, our development aims to prioritize retail centers that the EPA community can afford. In addition, non-profit organizations such as Ravenswood Health Care Center and Ecumenical Hunger Program will have offices in our building.

Figure 30: The Corner at night

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Low-Income Housing Challenge

THE CORNER

Stanford University

S U STA I N A B I L I T Y A N D E F F I C I E N CY Our project embodies three pillars of sustainability: economic, environmental, and social sustainability. By integrating these pillars throughout many of its spaces, The Corner will not only become a comfortable home for its residents but also a pioneer in energy saving and efficiency in East Palo Alto, addressing the present and the future.

MODULAR CONSTRUCTION The residential component of the building will be built with prefabricated modular panels. Having small panel dimensions, rather than entire units, eases transportation in containers holding dozels of panels at a time. All bedrooms and living spaces throughout the building, except for studio units, are designed have identical dimensions: the floor plan of a one-bedroom unit grows incrementally by just adding identical bedrooms and extending the back hallway.

Figure 31: Vertical Alignment of Utilities & Modular Construction To reduce the bending of pipelines and electrical lines, all bathrooms and kitchens are vertically aligned throughout the building, even in instances where units are stacked in an interlocking pattern for aesthetic purposes. The vertical orientation of these utilities helps minimize the costs of inefficient pipelines. Incorporating modular construction in our design will help shorten the construction timeline and reduce construction costs.

SEMI-PERMEABLE PARKING SURFACE & FLOOD PREVENTION Many cities in the Bay Area have the tendency to suffer from flooding during hard rains. Because precipitation is not common in the Bay Area, the city is not prepared to sustain a hard rain, which happens occasionally and can damage buildings. Therefore, anything that a building can do performatively to prevent flooding is highly beneficial not only for itself but also for surrounding buildings. Our building has a semipermeable parking surface can help reduce water runoff substantially and absorbs excess water into the underground water table.

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Figure 32: Semi-permeable Surface A permeable surface is cheaper than a normal surface because it uses less concrete, though it may require slightly more frequent maintenance. However, an additional benefit of having semi-permeable tiles is that they are easy to remove if pipelines under the parking lot ever require any service.

HYDROPONIC GREEN ROOF

Our building is a pioneer in EPA, as it introduces urban agriculture to the city as a means of enhancing residents’ quality of life with an equitable approach. The Corner will have 6,000 SF of hydroponic green roof space, which will be open to all residents. Each household has the opportunity to manage a piece of The Corner’s urban farm. This approach fosters socialization among residents by bringing many of them together in a common activity. Furthermore, it promotes a sense of ownership and accountability among residents who desire to have a personal green space, which is a rarity in most high-density multifamily buildings. Additionally, having an active roof helps prevent the proliferation of any illegal activity, and it generates a sense of agency and trust among all residents that their home is safe everywhere.

Figure 33: Hydroponic Green Roof All 6,000 SF of green roof are positioned right above the southeastern side of the building facing University Ave., which receives the most amount of sunlight throughout the year. By working as a natural insulator that absorbs solar heat, the hydroponic green roof helps reduce energy costs by cooling the warmest side of the building. A hydroponic agriculture system is more efficient than a traditional soil-based one. The Corner’s green roof does not require soil, and the little water it needs is circulated by extending pipelines from the building to the roof.

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Figure 34: Solar Panels

P H OTOVO LTA I C S O L A R PA N E LS Our building’s roof also has 15,000 SF of photovoltaic solar panels, which reduce around 50% of the building’s electricity costs. The panels are aligned at East Palo Alto’s optimal angle of 38 degrees facing south. This alignment allows our panels to generate 10-20% more energy than they would otherwise.

ENERGY EFFICIENCY To minimize energy demand, we have tested numerous energy models considering the shape, building orientation, wall-window ratio in each direction, and material of each model on Insight. With the non-negotiable priorities of resident privacy and streetfront coverage in our design, the building’s current orientation gives the lowest energy use Intensity, which is estimated to be 20 % lower than the Architectural 2030 Benchmark (27.94 kBtu/sqft/yr).

Figure 35: Energy Consumption Benchmark

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Stanford University

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Bank of America Merill Lynch

STAnford graduate housing “I think it would be a gift to this community because families here need to know that they too can get to Stanford.” - Nevida Preston, EHP Stanford University’s on-campus housing offers special academic, cultural, social, and leadership programs which are called “themes.” While some residences feature intensive language and academic themes (e.g., French Language and Culture, Human Biology, Arts and Performing Arts), several others are dedicated toward a cause (e.g., Sustainability, Equity and Social Justice, Design Thinking). Students who want to live in a themed residence must go through a rigorous Pre-Assignment process before being admitted.

Photograph courtesy of Stanford Residential & Dining Enterprises Our team’s conviction is that residential education and other forms of informal learning are indispensable to an individual’s education. We wish to dedicate 40 housing units of the Corner to the theme of “Community” that will offer a living space to future students in an exchange for their service to the permanent residents of EPA. In the program, students will engage in experiences that will prepare them for a life of leadership and citizenship. Some of the activities that we envision include tutoring high-schoolers, assisting senior citizens and the homeless, fundraising, and improving the city’s aesthetics. Student residents will also be involved in crafting and managing the trajectory of the program in the future. Stanford graduate students will live in 25% (40) of The Corner’s dwelling units. Among these will be 10 one-bedroom, 10 two-bedroom, and 20 three-bedroom units, thereby totalling to 90 students living in the building. These units will be randomly distributed throughout the building in order to create a healthy and diverse community in the building. Students primarily involved in community engagement, social studies and development, education, and immediate primary healthcare will be given preference for this housing allotment. 028


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As residents of The Corner, Stanford students will be active participants in the EPA community through their involvement in tutoring activities, social development events, and regional volunteering opportunities with local NGO’s like Ecumenical Hunger Program. Students interested in medicine may also provide immediate medical attention to residents whenever in need. Additionally, the students would also be involved with activities and extend assistance to The Ravenswood Family Health Center, Inc. The ultimate goal of providing Student housing is to generate a stronger bond between the Stanford community and EPA. Whether it is through tutoring or through a casual conversation in one of The Corner’s outdoor terraces, we believe that the connection between Stanford students and EPA’s residents is a crucial part of the city’s next chapter.

Photo: Afterschool tutoring in the Courtyard Stanford’s Real Estate Department always seeks to explore creative ways to add to the local housing stock if mutual benefit is created for the University and the community at large. Therefore, Stanford’s Real Estate Department will be a limited partner in our project. Detailed financial terms of the partnership with Stanford University are presented in the letter of support for the proposed investment from Tiffany Griego (Managing Director, Stanford Real Estate Department) in Appendix B.

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Community ENGAGEMENT The COMMUNITY‘s voice Since February, our team has been in contact with local community organizations including East Palo Alto Community Alliance and Neighborhood Development Organization (EPA CAN DO), the Ecumenical Hunger Program (EHP), and the Ravenswood Family Health Center (RFHC) to discuss the prospects of our project.

Photo: First Meeting with EHP Photo: Surveying the site with EPA CAN DO

Photograph courtesy of EHP Feedback from the local residents has played a crucial role in helping us understand what EPA needs and how we can help the city shape the future. We are beyond grateful to receive support from these organizations and believe our choices for The Corner will not only echo their voices but also help EPA flourish in years to come.

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Stanford University

E AST PA LO A LTO C O M M U N I T Y ALLIANCE AND NEIGHBORHOOD D E V E LO P M E N T O RGA N I Z AT I O N Photo: Robert Jones, Executive Director of EPA CAN DO The neighborhood-based organization works to create and maintain affordable housing in East Palo Alto and to promote community and economic development. EPA CAN DO has been our primary community engaged partner and will continue to support our project as an advisor.

T H E R AV E N S W O O D FA M I LY H E A LT H CENTER, INC. RFHC is a Health Center Program grantee under 42 U.S.C. 254b, and a deemed Public Health Service employee under 42 U.S.C. 233(g)-(n). The center has been dedicated to improving the health of the community by providing culturally sensitive, integrated primary, and preventative health care to all, regardless of ability to pay or immigration status. RFHC has been in collaboration with community partners to address the social determinants of health since its inception. The center has shown interest in expanding their service by opening a clinic on the ground level of The Corner facing University Ave. The clinic will specialize in primary health care along with dental and behavioral health services.

Photo: Meeting with Marina Yu, Contracts Manager of RFHC 031


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In 2017, RHFC served a total of 17,456 unduplicated patients, 7,236 of whom were children ages 0-18. Additional demographic details of Ravenswood patients include 87% live at or below 200% of the federal poverty level; 92% are Latino, African American, or Pacific Islander; 33% are uninsured. Through the partnership with Ravenswood Family Health Center, The Corner will procure better access to health resources. The center will offer services to residents including adult primary medical care, chronic disease care, family planning, and immunizations. The connection with RFHC can ultimately bridge the income and health disparities of EPA. In addition, by extending the existing Stanford Public Interest Network (SPIN) Fellowship, Stanford students who live in the building will have the opportunity to intern for RFHC.

Photo: Second meeting and Interview with EHP and local residents

ECUMENICAL HUNGER PROGRAM EHP has been in business since 1975 as a community organization that offers compassionate and practical assistance to families and individuals experiencing economic and personal hardship. EHP offers material help, support services, and advocacy for the residents of EPA in a challenging and rapidly changing environment. The organization serves working families, seniors, people with limited incomes and those who have both emergency and on-going needs. Over the years, EHP has become the largest emergency food provider in EPA, Menlo Park, and surrounding communities. EHP has shown its enthusiasm to be a part of The Corner by setting up an office in the building and hosting outreach events several times throughout the year that involve all the residents in the building. Students living in The Corner will have the opportunity to volunteer for EHP and become a part of its outreach community.

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Low-Income Housing Challenge

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Stanford University

Project Timeline Period

2018 Q1

Q2

Q3

2019 Q4

Q1

Q2

Q3

2020 Q4

Q1

Q2

Q3

2021 Q4

Q1

Q2

Q3

2022 Q4

Q1

Q2

Q3

Q4

Site Survey Land Acquisition

Concept Design Design Development

Entitlements Site Work

Construction Lease-up Period

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The Finance OVERVIEW As a mixed-use development, this project’s financing structure is divided into two parts: residential and commercial. For residential, the majority of the funding will come from 4% tax credit equity, loans from Bank of America, Stanford’s Investment, and soft financing from the AHSC. 120 units (excluding 2 manager units) will be affordable, targeting residents from 30% to 60% AMI while 40 units are dedicated to student housing. The commercial component will be financed mostly through New Market Tax Credit, Dignity Health Loan, and permanent loans.

Figure 36 : Project breakdown

S T R AT EGY »» Affordable Housing and Sustainable Communities (AHSC) Program Self-Scoring Throughout the history of projects that have received financial assistance under the AHSC Program within San Mateo County, the highest number of points scored by a selected project was found to be 65. We anticipate to score 66/100 for the project, hence a strong in the applicant pool of the program. Scoring Summary: GHG Quantification Methodology Scoring: Quantitative Policy Scoring: Narrative-Based Policy Scoring:

24/30 29/55 13/15

»» Low Income Housing Tax Credit (LIHTC) Self-Scoring The proposed project belongs to the San Mateo County, which has a 6% geographic annual apportionments of Federal and State Tax Credit Ceiling. Total Anticipated LIHTC Score: 87.8

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The calculation for self-scoring was performed according to the guidelines of the Federal and State Low Income Housing Tax Credit Laws (California Code of Regulations, Title 4, Division 17, Chapter 1 published in December 13,2017), established by California Tax Credit Allocation Committee Regulations. The Committee reserves the right to determine, on a case-by-case basis, under the unique circumstances of each funding round, and in consideration of the relative scores and ranking of the proposed projects, a project’s score to warrant a reservation of Tax Credits. Based on the history of points scored by successful applications, we strongly believe that our project exhibits a strong candidature for the tax credit. See Scoring Strategy in Appendix A for our scoring sheet. All efforts will be made in the application submission through a presentation of conclusive, documented evidence to the Executive Director‘s satisfaction which would include any additional information submitted in compliance with the regulations.

RESIDENTIAL The development budget for the residential component is $71.5 million ($56.2 m affordable + $15.3 m student). It includes a land cost of $7 million, construction hard costs of $47.3 million, and soft costs of $17.2 million. Our main assumptions for the development costs are: 1. 2. 3. 4. 5.

Architecture & Engineering Fee: Site Improvement: Parking Stall: Landscaping and Common Areas: Residential Structures:

6% of total construction cost $196,020 / acre (2.02 acres) $12,000 / stall (160 stalls) $653,400 / acre (2.02 acres) $300 / SF (after profit) (159,853 SF)

(2.02 acres) (160 stalls) (2.02 acres) (159,853 SF)

AFFORDABLE - CONSTRUCTION SOURCES Construction Source Construction Loan Normal Rate Construction Loan (Bonds) Tax Credit Equity Developer Equity AHSC HRI Grant Total

Amount $17.5 m $30 m $2.71 m $1.9 m $570,000 $52.68 m

Figure 37: Construction Sources

»» Bank of America Merrill Lynch’s Construction Loan: $47.5 m 1. The project is eligible for 50% tax exempt financing and hence out of $47.5 m, $30 m will be raised via tax exempt bonds (at 2.93%) and $17.5 m (at 4.75%). 2. Lesser of $47.5 m, 80% LTC or 80% LTV. 3. Construction loan fees will equal 0.90% of total loan commitment, payable at loan close. »» 4% Tax Credit Equity: $2.71 m 1. The project will obtain $2.7 million in tax credit equity from Bank of America Merrill Lynch during the construction period, representing 15% of their total capital contribution. 2. In order obtain this equity, the project should ensure completion the following: commitment of permanent financing, fixed for at least 15 years, evidence of acquisition, or longterm leasehold, of land and building of the project, satisfactory completion of Bank of America due diligence. 3. Tax credit equity rate: $0.88/credit.

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Bank of America Merill Lynch

»» Developer’s Equity: $1.9 m The developer will put $1.9 m in the construction phase of the project. »» AHSC HRI Grant: $570,000 The project qualifies for the AHSC HRI grant (housing-related infrastructure). This will be used for the construction of the parking structures.

AFFORDABLE - PERMANENT SOURCES Permanent Source Tax Credit Equity Bank of America Long Term Loan AHSC Soft Loan IIG Soft Loan Developer Equity AHSC HRI Grant Total

Amount $18.09 m $28.84 m $5.0 m $1.8 m $1.9 m $570,000 $ 56.2 m

Figure 38 : Permanent Sources »» Bank of America Merrill Lynch‘s Term Loan: $28.84 m 1. Lease of $28.84 m, 80% LTV, or principal amount to achieve 1.2 DSCR. 2. The interest rate is fixed at 4.3% for the life of the financing, based on market rates for when the letter was issued. This interest rate would be forward-locked for 24 months. 3. Loan will reach term maturity 17 years from loan conversion and close with a 30year amortization. 4. Other requirements include a $600 / unit replacement reserves and $1.03 m operating reserves. »» 4% Tax Credit Equity: $18.09 m The project will secure the remaining 85% equity of $15.38 m in two phases: 1. 84% or $15.19 m will be released when: - The project achieves 3 consecutive calendar months of minimum 1.15-1 debt-service-coverage ratio on permanent loans - The project achieves 90% occupancy - All tax credit units have been leased to qualified tenants at least once - All reserves have funded or will fund concurrent with the 84% equity payment. 2. The remaining 1% equity, $0.18 m, will be released when: - Form 8609 is issued for each building - A Cost Certification, Extended Use Agreement, and compliance audit of initial tenants have been submitted to Bank of America

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Stanford University

»» IIG (Infill Infrastructure Grant) Soft Loan: $1.9 m The project also qualifies for the IIG soft loan, from which we will obtain $1.9 m.

Figure 39 : Permanent Sources Breakdown

A F FO R DA B L E - O P E R AT I O N S »» Rents: $1.57 m / year Rents for each affordable unit is based on the California Tax credit allocation committee guidelines for unit sizes and income limits. A 5% vacancy rate has been assumed and an average of $6,016 has been allocated for the operating expenses of each unit. We assumed replacement reserves of $ 600 / unit. »» Section 8 rents: $1.37 m / year 42 units (about 25%) qualifies for section 8 vouchers, which will provide us an additional amount of $1.37 m / year. We will use this amount to pay the Bank of America Term Loan. We are working with San Mateo county housing authority to get a 15-year term housing vouchers and possibly a 15-years extension as well. »» Student housing balance transfer: $100,000 / year The remainder money of the operating expenses from the student housing units will be used to maintain the DCR for the affordable units. This number can go up to $392,000 / year, which gives us a huge leverage in terms of financing and acts as a float in case we fail to secure any of the aforementioned grants.

STUDENT - CONSTRUCTION & PERMANENT SOURCES »» Stanford’s Investment Loan: $ 15.72 m We are in negotiations with Stanford University to provide a loan for the student housing units at 1.5% interest for a term of 20 years. Profit sharing terms after fulfilling the need of affordable units are 80% (LP) : 20% (GP).

ST U D E N T - O P E R AT I O N S »» Rent: $1.4 m per year The rent of the units has been assumed at the market rate in EPA. A 2% vacancy rate has been assumed along with $10,212 as the average operating expenses per unit. Replacement reserves of $600 per unit has been also considered. The net operating income is divided into 3 parts. One part goes into to pay back the loan to Stanford, another maintain DCR for affordable units, and the last remain as profits for both parties. 037


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Bank of America Merill Lynch

RESIDENTIAL SUMMARY The two charts below break down the composition of the residential component.

Figure 40: Residential Costs of Affordable Units (above) and Student Units (below)

COMMERCIAL The commercial development budget is at $11.13 million. It includes a land cost of $1.38 m, construction hard costs of $6.65 million, soft costs of $2.4 million, and NMTCrelated fee of $700,000. Most of the assumptions are proportional to the residential budget. Some of the key differences are: 1. 2. 3.

038

Tenant Improvement: $50 / SF Parking Stall: $12,000 / stall CDE Expenses: $700,000

(20 stalls)


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FUNDING SOURCES »» New Market Tax Credit (NMTC): $3.70 m Because only a few projects get full allocation amount of the project development costs, we assumed the qualified equity investment (QEI) at $9.5 million. With this number, the project will be awarded $3.7 million of NMTC. The credit rate is assumed to be at $0.85 per credit. Therefore, the total equity that this project will received through NMTC is $3.7 million. »» Dignity Health Loan: $2.0 m As this project receives funding from NMTC, the capital received from Dignity Health will be in a form of 7-year interest only loan (at 4%). After 7 years, the project will either refinance or begin paying off the principal of the loan. This 7-year interest-only loan also helps ensure that the project’s cash flow is stabilized before we start to pay back the principal. We are confident that this amount of funding is possible as this project meets Dignity Health’s all five investment principles: to assist low-income communities, to revitalize urban or rural areas, to empower low-income people, to demonstrate a commitment to healthy communities, and to safeguard the environment. »» Bank Loan: $5.87 m Bank of America has given us feedback that bank loan will also be in a form of 7-year interest only loan, similar to Dignity Health’s loan. The interest rate for this loan is at 5.5% with the amortization period of 30 years.

O P E R AT I O N S We estimate to receive a total rent of $616,450 / year from the commercial space. A 10% vacancy has been considered along with $20,000 of operating expense. The net operating income will be used to pay off the Bank and the Digital health loan. Of the residual cash (after 36% share as incentive to the GP for operations), the LP gets 99.999% of the share and remaining goes to the GP.

Component Medical Centre Vendor Retail Standard Vendor EHP Office & Clinic

NSF 5200 4470 3200 5880

NNN per SF $2.65 $2.91 $2.91 $2.50

Figure 41: Rent Calculation

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Bank of America Merill Lynch

Appendix A: THE PROJECt POLICY CONTEXT »» Ordinance to Stabilize Rents and Establish Good Cause Evictions: In April 1988, voters in East Palo Alto adopted the Rent Stabilization and Eviction for Good Cause Ordinance to protect residential tenants in the City from unreasonable rent increases and to protect tenants from arbitrary, discriminatory, or retaliatory evictions; and at the same time to assure landlords the right to a fair return. The 1988 Prior Ordinance continues in effect for the purpose of regulating space rents and providing eviction protections for tenants in mobile home parks in East Palo Alto. In June 2010, 79% of East Palo Alto voters voted to renew this Ordinance. »» Below Market Rate Inclusionary Housing Program: In 2002, EPA launched The City of East Palo Alto Below Market Rate (BMR) Housing Program to create and retain a healthy stock of affordable housing in East Palo Alto for low and moderate- income households, with the goal of maintaining an economically integrated community. These BMR units are single family homes, condominiums, townhouses or apartments that are sold or rented at below market rate (“affordable” prices). BMR purchasers are selected from a qualified purchaser Waiting List maintained by the City of East Palo Alto. BMR units must be owner occupied and are subject to special rent and resale restrictions.

R E L AT E D F I G U R ES Property 1977 Tate St 1805 E Bayshore Rd 2301 Cooley Ave 1730 Bay Rd 2400 Gloria Way Nely Corner Bay + Gloria 2361 University Avenue 1767 Woodland Ave Clarke & O'Connor 2154 Dumbarton Ave 2210 Oakwood Dr

Unit 129 94 78 77 38 36 32 23 11 1 1

Figure A1: Existing Affordable-Housing Properties in EPA

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Figure A2: Ravenswood Land Use Plan Concept

Figure A3: Stanford Graduate Student Parking Permits

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Stanford University

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Bank of America Merill Lynch

SCORING SHEET Figure A4: LIHTC Scoring Sheet

Standard No. 1

2

3

4

5

6

7 042

Scoring element Anticipated score Housing needs: Large family 10 housing Site within 0.5 mile of bus rapid transit station, light rail 3 station, bus station or public bus stop Site within 0.5 mile of a public park or a community 3 centre accessible to the general public Site within 0.25 mile of a neighbourhood market of 5000 gross interior square feet or more where staples, fresh meat and fresh produce are sold. A large multi4 purpose store with the grocery section selling fresh meat, produce, dairy, baked goods, packaged food products etc For a development with atleast 25% of the LowIncome Units being 3bedroom units, the site 3 within 0.25 mile of a public elementary school; 0.5 mile of a public middle school or 1 mile of a public high school. Site within 1 mile of a qualifying medical clinic with a physician, physician’s assistant, or nurse 2 practitioner onsite for a minimum of 40 hours each week or hospital Site within 0.5 mile of a 2 pharmacy


Low-Income Housing Challenge

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8

9

10

11 12 13 14

15

Internet facilities (High speed internet service, with a minimum average download speed of 1.5Mbps made available to each Lowincome unit for a minimum 2 of 15 years, free of charge to the tenants and available within 6 months of the project’s placed-in-service date Projects that provide highquality services designed to improve the quality of life for tenants (service amenities) – 5 (cumulative of Tutoring by Stanford all) students and other community services by student residents Sustainable building methods (building in accordance with the minimum requirements of 2 one of the following programs: LEED/Green Communities/PHIUS etc Energy Efficiency (7%) 3 Water efficiency (irrigation only with reclaimed water, 3 greywater or rainwater “Percent of AMI” related 33.8 criteria Readiness to proceed 10 Smoke Free residence: The proposed project commits to having atleast one nonsmoking building and 2 incorporating the prohibition into the lease agreement for the affected units.

Stanford University

Figure A4: LIHTC Scoring Sheet 043


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S.No. 1 2 2 3 4 5 6 8 9 10

11 12 13

Scoring element GHG Quantification Methodology Scoring GHG Efficiency Total Project GHG Reductions Quantitative Policy Scoring Active Transportation Improvements Green buildings and Renewable Energy Housing and Transportation Collaboration Location Efficiency and Access to Destinations Funds leveraged Anti-displacement Strategies Local Workforce Development & Hiring Practices Housing Affordability Programs Narrative-Based Policy Scoring Collaboration & Planning Community Benefit & Engagement Community Climate Resiliency

Bank of America Merill Lynch

Points 12/15 12/15 5/10 3/10 5/10 4/5 4/5 3/5 1/2 3/5 1/3 5/6 6/6 2/3

Figure A5: AHSC Scoring Sheet

SHARED PARKING A number of studies have hypothesized about the oversupply of parking in areas with easy transit access. A 2006 study in small cities found that study sites achieve more benefit from a smaller amount of parking [1]. The method, occupancy count, revealed that every site had been oversupplied with parking even during peak hours. Especially, more than half of a control site had parking spaces vacant on the busiest day of the year. San Diego County’s Metropolitan Planning Organization (SANDAG), published a document on parking strategies and smart growth areas in the region in 2010 [2]. SANDAG found that typical parking requirements in the region may provide an excess supply of parking relative to demand documented in nationwide studies. Despite context-specific characteristics of a neighborhood, a 1998 study asserted similar findings [3].

STA N DA R D S »» Minimum Setbacks Front: 6 feet, to be dedicated to landscaping or publicly accessible sidewalk. Side: None required. Exterior Side: 10 feet. Rear: 30 feet. »» Maximum Setback Along Bay Road and University Avenue: At least 65% of a building shall be built to within 16 feet of the property line.

[1] Boachner, B. et al. (2011). NCHRP Report 684: Enhancing Internal Trip Capture Estimation for Mixed-Use Developments. National Cooperative Highway Research Program. Retrieved May 17, 2015, Web. [2] Parking Strategies for Smart Growth: Planning Tools for the San Diego Region. (June 2010). San Diego’s Regional Planning Agency. Retrieved May 17, 2015, Web. [3] Steiner, R. (1998). Trip Generation and Parking Requirements in Traditional Shopping Districts. Transportation Research Record, (1617), 28-37.

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FINANCIAL PRO FORMA Figure A6-8: Affordable Summary A. DEVELOPMENT BUDGET SUMMARY

C. FINANCING ASSUMPTIONS

Description Acquisition & Related

Total

per

per

Amount

Resid. Unit

Resid. NSF

5,151,029.90

Acquisition Related Costs subtotal Construction Furnishings and Equipment Hard Cost Contingency subtotal

42,221.56

CONSTRUCTION LOAN Normal Rate

54.75

38,632.72

316.66

0.41

5,189,662.63

42,538.22

55.16

35,276,645.75

289,152.83

374.92

400,000.00

3,278.69

4.25

1,763,832.29

14,457.64

18.75

Loan Amount:

$

37,440,478.04

306,889.16

397.92

2,778,035.85

22,770.79

29.53

Loan Amount:

3,012,979.74

24,696.56

32.02

Loan Term:

Construction Loan Interest/Fees

Note Rate:

22.41

7,585.29

9.84

Legal

160,000.00

1,311.48

1.70

Marketing/Lease-up

244,000.00

2,000.00

2.59

Other Costs

170,000.00

1,393.44

1.81

AHSC Soft Loan

Accounting/Audit/Insurance

250,000.00

2,049.18

2.66

Lender:

0.00

0.00

0.00

Loan Amount:

175,000.00

1,434.43

1.86

Loan Term:

Syndication Costs/Developer Fee TOTAL DEVELOPMENT COSTS

1,074,960.00

8,811.15

11.42

89,334.72

115.83

2,669,247.29

21,879.08

28.37 ------------------

------------------

------------------

56,198,223.68

460,641.18

597.28

===========

===========

===========

50%

28,838,220 30

17,282.42

925,404.78

10,898,835.72

2.93%

Draw Down Rate:

Bank of America $

2,108,455.35

subtotal

50%

Lender:

Permanent Loan Fees/Costs

Permanent Reserves

############

Loan Term:

PERMANENT DEBT SOURCE 1 (Bank of America Loan)

Permits and Fees

Soft Cost Contingency

Loan Amount:

4.75%

Draw Down Rate:

Bank of America

Lender:

17,439,763.11

Loan Term:

Architecture/Engineering

Property Taxes

CONSTRUCTION LOAN (normal) Bank of America

Lender:

4.30% ($1,728,993)

DCR:

1.20 IIG Soft Loan AHSC

Note Rate: Payment (annual @ 0.42%):

Infill Infrastructure

Lender:

$5,000,000

Loan Amount:

55

Loan Term:

3.00%

Note Rate:

$

1,800,000 55.00 3%

$21,000

Surplus Cash Flow %

30.00%

Surplus Cash Flow %

30%

B. SOURCES AND USES Construction Period 17,439,763

Permanent

Sources of Funds Construction Loan Normal Rate

$

Period -

IIG Soft Loan

$

-

$

1,800,000

Investor Equity - Federal Credit

Soft Loan (AHSC)

$

-

$

5,000,000

Net Rate

Developer Equity

$

1,900,000

$

1,900,000

Net Pay-in

$

18,090,004

AHSC STI Grant

$

570,000

$

570,000

Initial Pay-in

$

2,713,501

Tax Credit Equity

$

2,713,501

$

18,090,004

Construction Loan (Bonds)

$

30,000,000

Bank of America Long term bonds TOTAL SOURCES

$ $

52,623,264

$

$0.880

Credit Rate

$ 28,838,220 $ 56,198,224

3.28%

Investor Equity - State Credit Net Rate

$0.00

Net Pay-in

$0.00

Uses of Funds 5,189,663

Construction

$

37,440,478

A/E, Permits

$

5,791,016

Indirect Expenses

$

999,000

$

999,000

Financing and Carry Costs

$

3,203,107

$

3,203,107

Studio

One

Two

Three

Other (Operating Reserve)

$

-

$

1,074,960

30% AMI

6

10

10

11

37

Developer Fee

$

-

$

2,500,000

40% AMI

4

7

17

11

39

TOTAL USES

$

44

$

=========

$733,952 per year

$ 37,440,478 $

$

-----------------NET SURPLUS(SHORTFALL)

5,189,663

$6,016 per unit per year

$

52,623,264

$

D. ANNUAL OPERATING EXPENSES ( /UNIT)

Acquisition

$

5,791,016 E. UNIT MIX & AFFORDABILITY Total

56,198,224

50% AMI

5

8

17

14

------------------

60% AMI

0

0

0

0

0

Mgr/Staff Units

0

0

2

0

2 122

=========

15

25

46

36

12%

20%

38%

30%

30% 32% 36% 0% 2%

F. FIVE YEAR CASH FLOW 1 Description

2022

2 2023

3

4

5

2024

2025

2026

Affordable Rents - Base Tax Credit

2.00%

$1,574,460

$1,605,949

$1,638,068

$1,670,830

$1,704,246

Section 8 Rent Increment

2.00%

$1,372,140

$1,399,583

$1,427,574

$1,456,126

$1,485,248

Misc. Income (Laundry)

2.00%

Gross Potential Income less Vacancy/Collection Loss

5.00%

Effective Gross Income

$7,320

$7,466

$7,616

$7,768

$7,923

$2,953,920

$3,012,998

$3,073,258

$3,134,724

$3,197,418

($147,696) $2,806,224

($150,650) $2,862,348

($153,663) $2,919,595

($156,736) $2,977,987

less Operating Expenses

3.00%

($733,952)

($755,971)

($778,650)

($802,009)

less Replacement Reserves

1.00%

($72,000)

($72,720)

($73,447)

($74,182)

Net Operating Income

$2,000,272

Stanford Housing Income Net Available Income Debt Service, BAM Loan

less At-Risk Asset Mgt Fees

1.00%

Debt Coverage Ratio

($74,923) $2,136,554

$66,614

$32,773

$0

$0

$2,100,272

$2,100,272

$2,101,797

$2,136,554

2,450,551.10

Net Cash Flow

$2,101,797

$100,000

($21,000)

DISTRIBUTABLE CASH FLOW

$2,067,499

($826,069)

$2,100,272 ($1,728,993)

AHSC Loan (@0.42%)

$2,033,658

($159,871) $3,037,547

($1,728,993) ($1,728,993) ($1,728,993) ($1,728,993) ($21,000)

($21,000)

($21,000)

($21,000)

2,450,551.10 ########## ########## ##########

$0

$0

$0

$0

$0

$2,450,551

$2,450,551

$2,450,551

$2,453,600

$2,523,115

1.20

1.20

1.20

1.20

1.22

Distribution of Net Cash Flow Residual Receipts

60.000%

($1,470,331)

Incentive Management Fee to GP

36.000%

($882,198)

($882,198)

($882,198)

($883,296)

($908,322)

LP Share

3.996%

($97,924)

($97,924)

($97,924)

($98,046)

($100,824)

GP Share

0.004% $

(98) $

($1,470,331) ($1,470,331) ($1,472,160) ($1,513,869)

(98) $

(98) $

(98) $

(101)

045


Stanford University

THE CORNER

Bank of America Merill Lynch

142 Units

TCAC

TCAC

Budget

% Eligible

Eligible Basis

Housing Portion Land Cost Other Acquisition Costs

$5,151,030 $38,633

0% 0%

0 0

TOTAL ACQUISITION COSTS

5,189,663

ACQUISITION COSTS

0

PROFESSIONAL FEES Architecture & Engineering Other Professional / Consulting

6% 1.50%

TOTAL PROFESSIONAL FEES

$4,000 /DU $17,418 /DU

CONSTRUCTION COSTS Demolition Offsite Improvements Site Improvements Parking Facilities Landscaping / Common Areas Residential Structures General Conditions Contractor Overhead Contractor Profit Contractor Insurance Construction Bond Premiums Construction Contingency Residential Structures - Non GC Predevelopment Onsite Construction Work TOTAL CONSTRUCTION COSTS

2.02 Acres @ 130 Stalls @

$196,020 Per Acre $12,000 Per Stall

.31 Acres @ 125,453 SF Subtotal 32,020,148 33,300,953 33,300,953 34,632,992 34,927,372 35,276,646

$653,400 Per Acre $235.00 PSF Percent 4.00% 0.00% 4.00% 0.85% 1.00% 5.00%

1.00%

370,405 1,639,000 52,765

1.00%

370,405

4.00%

2,000

2,222,429 555,607 2,778,036

488,000 2,124,980 400,000 3,012,980

100% 100% 100%

488,000 2,124,980 400,000 3,012,980

61,285 321,429 395,960 1,560,000

100% 100% 100% 100%

61,285 321,429 395,960 1,560,000

199,940 29,481,533

100% 100%

199,940 29,481,533

1,280,806 0 1,332,038 294,380 349,274 1,763,832 0 0 37,040,478

100% 100% 100% 100% 100% 100% 100% 100%

1,280,806 0 1,332,038 294,380 349,274 1,763,832 0 0 37,040,478

0 0 46,286 370,405 1,639,000 52,765 55,000 370,405 500,000 134,247 35,000 3,203,107

0% 0% 100% 100% 100% 0% 0% 0% 0% 0% 0%

Figure A9: Affordable Development Costs and Tax Credit Calculations

046

100% 100%

2,778,036

FEES AND PERMITS City/County Fees and Permits Development Impact Fees Utility Fees/Costs TOTAL FEES AND PERMITS

FINANCING COSTS Acquisition Loan Costs Gap Loan Costs Construction Loan Costs Construction Loan Fees Construction Period Interest Post-Construction Interest Permanent Loan Costs Permanent Loan Fees Bond Issuance Costs TCAC Fe e s Misc. Finance Costs TOTAL FINANCING COSTS

2222428.68 555,607

0 0 46,286 370,405 1,639,000 0 0 0 0 0 0 2,055,690

295.3


Low-Income Housing Challenge

THE CORNER

OTHER COSTS Furnishings, Fixtures & Equipment Marketing Costs Legal Fees

Stanford University

2,000

Property Taxes Soft Cost Contingency Relocation Expenses Accounting / Audit / Insurance Developer Overhead Developer Fees Operating Reserve Misc Costs TOTAL OTHER COSTS TOTAL DEVELOPMENT COSTS / TOTAL ELIGIBLE BASIS

400,000 244,000 160,000

100% 0% 30%

400,000 0 48,000

0 175,000 120,000 250,000 0 2,500,000 1,074,960

75% 100% 0% 80% 100% 100% 0%

0 175,000 0 200,000 0 2,500,000 0

50,000

0%

0

4,973,960

3,323,000

$56,198,224

$48,210,184

TOTAL BASIS REDUCTION (Amount over Adjusted Threshold Basis Limit or Voluntary Exclusion) TOTAL REQUESTED UNADJUSTED ELIGIBLE BASIS

48,210,184

TOTAL BASIS ALLOWED PER THRESHOLD LIMITS

50,274,620

ACTUAL BASIS (Lesser of Requested vs Allowed)

48,210,184

High Cost Area Adjustment

130%

TOTAL ADJUSTED ELIGIBLE BASIS

62,673,239

Applicable Fraction

100%

TOTAL QUALIFIED BASIS

62,673,239

TOTAL ADJUSTED QUALIFIED BASIS

62,673,239

Credit Rate ANNUAL CREDIT

3.28% 2,055,682

TOTAL CREDIT

2,055,682 20,556,823

TAX CREDIT EQUITY

0.88

18,090,004

Figure A10: Affordable Development Costs and Tax Credit Calculations

047


Stanford University

THE CORNER

Bank of America Merill Lynch

C. TCAC BASIS ANALYSIS: THRESHOLD BASIS LIMIT Special Features Threshold Basis Limit Increases 10% Increase: 95% of the project's upper floor units are serviced by an elevator

0.00%

20% Increase: State or Federal Prevailing Wage Requirement 5% Increase: Skilled and Trained Workforce Defined by Section 25536.7 of the Health and Safety Code

0.00% 0.00%

2% Increase: Day Care Center 2% Increase: Special Needs Populations

0.00% 0.00%

Total Percentage Increase to Unadjusted Eligible Basis (Combined not to exceed 39%)

0.00%

10% Increase: Energy Efficiency/Resource Conservation/Indoor Air Quality Seismic Upgrading or Environmental Mitigation (15% unadj. eligible basis max.)

0.00% 0.00%

TOTAL ADJUSTMENTS

0.00%

2018 Threshold Basis Limits with Prevailing Wage, Elevator, Special Needs and Green Building Unit Type # of Units Basis Limit Basis Adjustment Studio 1 Bedroom

15 25

$ $

284,724 328,284

$ $

4,270,860 8,207,100

2 Bedroom 3 Bedroom

44 36 120

$ $

396,000 506,880

$ $

17,424,000 18,247,680

ADJUSTED THRESHOLD BASIS LIMIT (CAP)

Total Dwelling Units Fee

122 Per Unit Fee

Total Amount

Air Quality City Office Space Community Recreation

$114 $352 $365

$13,959 $42,975 $44,514

Fire Station

$593

$72,321

Libraries Parkland Police Station Expansion Street Improvements

$686 $1,542 $448 $8,699

$83,641 $188,166 $54,625 $1,061,290

Surface Water

$1,241

$151,456

Agricultural Mitigation (Flat Rate) County Facilities

$1,530

$12,841 $186,627

Regional Transit

$1,742

$212,566 $2,124,980 $17,418

Total Fee Per Unit Average

Figure A11: Affordable Development Costs andTax Credit Calculations 048

4,270,860 8,207,100

100% $ 17,424,000 100% $ 18,247,680 $ 48,149,640 Impact Fees*

D. DEVELOPMENT IMPACT FEE ESTIMATE

Basis Allowed

100% $ 100% $

2,124,980 ----------------$50,274,620


Low-Income Housing Challenge

THE CORNER

Stanford University

Figure A12-14: Affordable Unit Mix A. UNIT MIX & RENTS Bedroom Type -----------------------Studio

1 Bedroom

2 Bedroom

3 Bedroom

Unit Type -----------30% 35% 40% 45% 50% 55% 60%

SF* -----------400 400 400 400 400 400 400

Qty -----------6

NSF -----------2,400

4

1,600

5

2,000

0

0

30% 35% 40% 45% 50% 55% 60%

530 530 530 530 530 530 530

10

5,300

7

3,710

8

4,240

0

0

30% 35% 40% 45% 50% 55% 60% Manager

790 790 790 790 790 790 790 960

10

7,900

17

13,430

17

13,430

0 2

0 1,920

30% 35% 40% 45% 50% 55% 60%

1060 1060 1060 1060 1060 1060 1060

TOTAL

Mthly Revenue -----------3,751

Annual Revenue -----------45,014

3,422

41,069

5,430

65,160

0

0

667 791 914 1,038 1,161 1,284 1,038

6,674

80,088

6,399

76,793

9,288

111,456

0

0

796 944 1,092 1,240 1,388 1,536 1,684 0

7,956

95,472

18,561

222,727

23,596

283,152

0 0

0 0

10,017

120,199

13,781

165,370

22,330

267,960

0

0

131,205

1,574,460

Rent -----------625 740 856 971 1,086 1,201 1,316

11

11,660

11

11,660

14

14,840

0

0

911 1,082 1,253 1,424 1,595 1,766 1,937

122

94,090

32,335

Section 8 Overhang SF Section 8 Qty S8 Annual Rent Rent S8 Units Revenue --------------------------------------------1.56 2,014 0 0 0 2.14 2,014 0 0 0 2.72 2,014 0 0 0 3.29 2,014 0 0 0 1.26 2,499 0 0 0 1.72 2,499 0 0 0 2.19 2,499 0 0 0 1.96 2,499 0 0 1.01 3,121 6 167,429 0 1.38 3,121 0 0 0 1.76 3,121 0 0 0 2.13 3,121 0 0 0 0 0.86 4,070 11 417,041 0 1.18 4,070 11 371,870 0 1.50 4,070 14 415,800 0 1.83 4,070 0 0 42** 25.93%

45,014 41,069 65,160 0 0 80,088 76,793 111,456 0 0 262,901 222,727 283,152 0 0 0 537,240 537,240 683,760 0

1,372,140

*California's Qualified Allocation Plan minimum requirements (updated March 15, 2017)

B. TAX CREDIT RENT LIMITS RENT CALCULATIONS Unit Type ---------------------------Studio w/utility

2018 2018 100% Utility 100% 30% Gross Rent Allowance Re nt Re nt ----------------------- ------------ -----------2,304 66 2,238 625 691

35% Re nt 740 806

40% Re nt -----------856 922

45% Re nt 971 1,037

50% Re nt -----------1,086 1,152

55% Re nt 1,201 1,267

60% Re nt -----------1,316 1,382

1 Bedroom w/utility

2,468

73

2,395

667 740

791 864

914 987

1,038 1,111

1,161 1,234

1,284 1,357

1,408 1,481

2 Bedroom w/utility

2,962

93

2,869

796 889

944 1,037

1,092 1,185

1,240 1,333

1,388 1,481

1,536 1,629

1,684 1,777

3 Bedroom w/utility

3,422

116

3,306

911 1,027

1,082 1,198

1,253 1,369

1,424 1,540

1,595 1,711

1,766 1,882

1,937 2,053

C. UTILITY ALLOWANCE CALCULATION Utility Allowance Heating - Natural Gas Heating - Electric Cooking - Natural Gas Cooking - Electric Other Electric Water Heating (Natural Gas ) Water Heating (Electric ) Water (not included) Sewer (not included) Trash (not included) Range/Microwave Refrigerator TOTAL D. DWELLING UNIT CALCULATIONS Land Size Dwelling Units Per Acre Total Dwelling Units Density Bonus Total DU (bonus included)

$ $ $ $ $ $ $ $ $ $ $ $ $

0BR 1BR 2BR $ $ 13 $ 15 $ 19 $ $ 5 $ 6 $ 9 17 $ 20 $ 30 7 $ 8 $ 11 $ $ $ $ $ $ 24 $ 24 $ 24 $ $ $ $ 66 $ 73 $ 93

2 60 120 35% 162

3BR $ $ 23 $ $ 12 $ 42 $ 15 $ $ $ $ 24 $ $ $ 116

4BR $ $ 27 $ $ 14 $ 54 $ 19 $ $ $ $ 24 $ $ 138

(11% must be at 50% AMI) including 2 Manager's Unit 049


Stanford University

Figure A15: Affordable Operating Expenses

THE CORNER

Bank of America Merill Lynch

OPERATING EXPENSES Number of Units

120

ADMINISTRATIVE EXPENSE

Per Unit Expense

Advertising Credit Check Expense Administrator Salary Office Salaries Apartment Allowance Office Expenses Management Fee Legal Expense Audit & Accounting Expense Bad Debt Expense Resident Services Telephone & Internet Total Administrative Expense

Total Expense

$27 $27 $625 $63 $0 $76 $720 $45 $107 $47 $714 $89

$3,240 $3,240 $75,000 $7,560 $0 $9,120 $86,400 $5,400 $12,840 $5,640 $85,680 $10,680 $304,800

UTILITY EXPENSE Electricity

$196

$23,520

Water Gas

$672 $65

$80,640 $7,800

Sewer Total Utility Expense

$300

$36,000 $147,960

MAINTENANCE EXPENSE Pest Control Security Expense Landscape Expense Janitorial Expense Maintenance Payroll Maintenance Contracts Maintenance Supplies HVAC Repair/Maintenance Electrical Repair Plumbing Repair Decorating & Painting Carpet Cleaning & Repair Appliance Repair Other Maintenance & Repair Replacements Total Maintenance Expense

$27 $381 $150 $190 $381 $134 $36 $80 $80 $80 $63 $45 $18 $36 $27

TAXES & INSURANCE Real Estate Taxes Payroll Tax Other Taxes Property Insurance Health Insurance Workers' Comp Insurance Other Insurnace Total Taxes & Insurance

Description Affordable Rents - Base Tax Credit Section 8 Rent Increment Misc. Income (Laundry) Gross Potential Income less Vacancy/Collection Loss Effective Gross Income less Operating Expenses less Replacement Reserves Net Operating Income Stanford Housing Income Net Available Income Debt Service, BAM Loan AHSC Loan (@0.42%) DISTRIBUTABLE CASH FLOW less At-Risk Asset Mgt Fees Net Cash Flow Debt Coverage Ratio Distribution of Net Cash Flow Residual Receipts Incentive Management Fee to GP LP Share GP Share

Figure A16: Affordable Cash Flow

Figure A17: Student Housing Summary

1 2022 2.00% $1,574,460 2.00% $1,372,140 2.00% $7,320 $2,953,920 5.00% ($147,696) $2,806,224 3.00% ($733,952) 1.00% ($72,000) $2,000,272 $100,000 $2,100,272 ($1,728,993) ($21,000) $2,450,551 1.00% $0 $2,450,551 1.20

$5,400 $12,840 $480 $30,480 $9,600

$21 $4

$2,520 $480 $61,800

2 2023 $1,605,949 $1,399,583 $7,466 $3,012,998 ($150,650) $2,862,348 ($755,971) ($72,720) $2,033,658 $66,614 $2,100,272 ($1,728,993) ($21,000) $2,450,551 $0 $2,450,551 1.20

3 2024 $1,638,068 $1,427,574 $7,616 $3,073,258 ($153,663) $2,919,595 ($778,650) ($73,447) $2,067,499 $32,773 $2,100,272 ($1,728,993) ($21,000) $2,450,551 $0 $2,450,551 1.20

4 2025 $1,670,830 $1,456,126 $7,768 $3,134,724 ($156,736) $2,977,987 ($802,009) ($74,182) $2,101,797 $0 $2,101,797 ($1,728,993) ($21,000) $2,453,600 $0 $2,453,600 1.20

5 2026 $1,704,246 $1,485,248 $7,923 $3,197,418 ($159,871) $3,037,547 ($826,069) ($74,923) $2,136,554 $0 $2,136,554 ($1,728,993) ($21,000) $2,523,115 $0 $2,523,115 1.22

6 2027 $1,738,331 $1,514,953 $8,082 $3,261,366 ($163,068) $3,098,298 ($850,852) ($75,673) $2,171,774 $0 $2,171,774 ($1,728,993) ($21,000) $2,593,555 $0 $2,593,555 1.24

7 2028 $1,773,098 $1,545,253 $8,244 $3,326,594 ($166,330) $3,160,264 ($876,377) ($76,429) $2,207,457 $0 $2,207,457 ($1,728,993) ($21,000) $2,664,922 $0 $2,664,922 1.26

8 2029 $1,808,560 $1,576,158 $8,408 $3,393,126 ($169,656) $3,223,469 ($902,668) ($77,194) $2,243,607 $0 $2,243,607 ($1,728,993) ($21,000) $2,737,221 $0 $2,737,221 1.28

9 2030 $1,844,731 $1,607,681 $8,577 $3,460,988 ($173,049) $3,287,939 ($929,748) ($77,966) $2,280,225 $0 $2,280,225 ($1,728,993) ($21,000) $2,810,456 $0 $2,810,456 1.30

10 2031 $1,881,625 $1,639,834 $8,748 $3,530,208 ($176,510) $3,353,697 ($957,641) ($78,745) $2,317,311 $0 $2,317,311 ($1,728,993) ($21,000) $2,884,630 $0 $2,884,630 1.32

$721,920 $6,016 11 2032 $1,919,258 $1,672,631 $8,923 $3,600,812 ($180,041) $3,420,771 ($986,370) ($79,533) $2,354,868 $0 $2,354,868 ($1,728,993) ($21,000) $2,959,744 $0 $2,959,744 1.35

12 2033 $1,957,643 $1,706,084 $9,101 $3,672,828 ($183,641) $3,489,187 ($1,015,961) ($80,328) $2,392,897 $0 $2,392,897 ($1,728,993) ($21,000) $3,035,802 $0 $3,035,802 1.37

13 2034 $1,996,796 $1,740,205 $9,284 $3,746,285 ($187,314) $3,558,971 ($1,046,440) ($81,131) $2,431,399 $0 $2,431,399 ($1,728,993) ($21,000) $3,112,805 $0 $3,112,805 1.39

14 2035 $2,036,732 $1,775,009 $9,469 $3,821,210 ($191,061) $3,630,150 ($1,077,833) ($81,943) $2,470,374 $0 $2,470,374 ($1,728,993) ($21,000) $3,190,755 $0 $3,190,755 1.41

15 2036 $2,077,467 $1,810,510 $9,659 $3,897,635 ($194,882) $3,702,753 ($1,110,168) ($82,762) $2,509,823 $0 $2,509,823 ($1,728,993) ($21,000) $3,269,652 $0 $3,269,652 1.43

60.000% ($1,470,331) ($1,470,331) ($1,470,331) ($1,472,160) ($1,513,869) ($1,556,133) ($1,598,953) ($1,642,333) ($1,686,274) ($1,730,778) ($1,775,846) ($1,821,481) ($1,867,683) ($1,914,453) ($1,961,791) 36.000% ($882,198) ($882,198) ($882,198) ($883,296) ($908,322) ($933,680) ($959,372) ($985,400) ($1,011,764) ($1,038,467) ($1,065,508) ($1,092,889) ($1,120,610) ($1,148,672) ($1,177,075) 3.996% ($97,924) ($97,924) ($97,924) ($98,046) ($100,824) ($103,638) ($106,490) ($109,379) ($112,306) ($115,270) ($118,271) ($121,311) ($124,388) ($127,503) ($130,655) 0.004% ($98) ($98) ($98) ($98) ($101) ($104) ($107) ($109) ($112) ($115) ($118) ($121) ($125) ($128) ($131) 100.0%

A. DEVELOPMENT BUDGET SUMMARY Description Acquisition & Related Acquisition Related Costs Subtotal Construction Furnishings and Equipment Hard Cost Contingency Subtotal Architecture/Engineering Permits and Fees Construction Loan Interest/Fees Permanent Loan Fees/Costs Legal Marketing/Lease-up Other Costs Accounting/Audit/Insurance Soft Cost Contingency Permanent Reserves Syndication Costs/Developer Fee

C. FINANCING ASSUMPTIONS Total Amount

$ 1,863,546.16 $ 13,976.60 $ 1,877,522.75 $ 9,769,651.32 $ 150,000.00 $ 488,482.57 $10,408,133.88

per Resid. Unit

$ 100,000.00 $ 138,404.00 $ 2,768,497.87 $ 300,000.00

$ 46,588.65 $ 349.41 $ 46,938.07 ####### $ 3,750.00 $ 12,212.06 ####### 19234.00103 26418 8116.169391 2859.176328 2500 1000 625 2500 2500 3460.1 $ 69,212.45 7500

$15,354,154.51

#######

769,360.04 1,056,720.00 324,646.78 114,367.05 100,000.00 40,000.00 25,000.00 100,000.00

B. SOURCES AND USES

Stanford Investment 050

$45 $107 $4 $254 $80

TOTAL OPERATING EXPENSE AVERAGE COST PER UNIT

15 YEAR CASH FLOW

$3,240 $45,720 $18,000 $22,800 $45,720 $16,080 $4,320 $9,600 $9,600 $9,600 $7,560 $5,400 $2,160 $4,320 $3,240 $207,360

$15,354,154.51

Stanford Loan Lender: Investment Amount: Investment Term: Return on Investment Payment (annual):

######### 20 1.5% ($894,314.03)


Low-Income Housing Challenge

THE CORNER

Stanford University

DEVELOPMENT COSTS & TAX CREDIT CALCULATION

40 Units Budget

ACQUISITION COSTS Housing Portion Land Cost Other Acquisition Costs TOTAL ACQUISITION COSTS

$ 1,863,546.16 $ 13,976.60 $ 1,877,522.75

PROFESSIONAL FEES Architecture & Engineering Other Professional / Consulting TOTAL PROFESSIONAL FEES

6% 2%

FEES AND PERMITS City/County Fees and Permits Development Impact Fees Utility Fees/Costs TOTAL FEES AND PERMITS

1% 1.5%

1%

OTHER COSTS Furnishings, Fixtures & Equipment Marketing Costs Legal Fees Soft Cost Contingency Relocation Expenses Accounting / Audit / Insurance Developer Overhead Developer Fees Operating Reserve Misc Costs TOTAL OTHER COSTS

$ 20,428.29 $ 71,428.57 $ 131,986.80 $ 360,000.00 $ 199,940.40 $ 8,084,000.00

15,428.57 102,581.34 153,872.01 52,764.86 11,785.71 102,581.34 25,000.00

$

439,013.83

$ 1000 $ $ $ $ $ $ $ $ $ $

150,000.00 40,000.00 100,000.00 100,000.00 100,000.00 300,000.00 138,404.00 25,000.00 953,404.00

TOTAL DEVELOPMENT COSTS

Figure A18: Stanford Developmental Summary

$ 354,711.36 $ $ 368,899.82 $ 81,526.86 $ 96,729.22 $ 488,482.57 $ $ #########

$ $ $ 102,581.34 $ 512,906.69 $ 52764.85714 $ $ 102,581.34 $ $ $

TOTAL FINANCING COSTS

D.

615,488.03 153,872.01 769,360.04

$4,000 /DU $ 160,000.00 $17,418 /DU $ 696,720.00 $ 200,000.00 $ 1,056,720.00

CONSTRUCTION COSTS Demolition Offsite Improvements Site Improvements 2.02 $ 65,340.00 Parking Facilities 30.00 $ 12,000.00 Landscaping / Common Areas 0.31 $ 653,400.00 Residential Structures 34,400.00 $ 235.00 Subtotal Percent General Conditions 8,867,784.06 4% Contractor Overhead 9,222,495.42 0% Contractor Profit 9,222,495.42 4% Contractor Insurance 9,591,395.24 1% Construction Bond Premiums 9,672,922.10 1% Construction Contingency 9,769,651.32 5% Residential Structures - Non GC Predevelopment Onsite Construction Work TOTAL CONSTRUCTION COSTS FINANCING COSTS Acquisition Loan Costs Gap Loan Costs Construction Loan Costs Construction Loan Fees Construction Period Interest Post-Construction Interest Permanent Loan Costs Permanent Loan Fees Bond Issuance Costs Misc. Finance Costs

$ $ $

#########

DEVELOPMENT IMPACT FEE ESTIMATE Total Dwelling Units

40

Fee Per Unit Fee Total Amount Air Quality $ 114.41 $ 4,576.58 City Office Space $ 352.25 $ 14,090.09 Community Recreation $ 364.86 $ 14,594.59 Fire Station $ 592.79 $ 23,711.71 Libraries $ 685.59 $ 27,423.42 Parkland $ 1,542.34 $ 61,693.69 Police Station Expansion $ 447.75 $ 17,909.91 Street Improvements $ 8,699.10 $ 347,963.96 Surface Water $ 1,241.44 $ 49,657.66 Agricultural Mitigation (Flat Rate) $ $ County Facilities $ 1,529.73 $ 61,189.19 Regional Transit $ 1,742.34 $ 69,693.69 Total Fee $ 692,504.50 Per Unit Average $ 17,312.61

051


Stanford University

THE CORNER

Bank of America Merill Lynch

UNIT MIX AND RENTS

A.

UNIT MIX & RENTS Mthly Revenue Bedroom Type Unit Type SF* Qty NSF Utility AllowanceMarket Rent Net Rent ----------------------------------------------- ------------ --------------------------------Studio AMI 400.00 0.00 0.00 $ 66.00 $ 1,800.00 ###### $ 1 BedroomAMI

530.00

10.00

5300.00 $

73.00

$

2,200.00

###### $ 21,270.00

2 BedroomAMI

790.00

10.00

7900.00 $

93.00

$

3,000.00

###### $ 29,070.00

3 BedroomAMI

1060.00

20.00 21200.00 $

116.00

$

3,800.00

###### $ 73,680.00

Total

Figure A19: Student Unit Mix

40.00 34400.00

-----------$ $ $ 255,240.00 $ $ 348,840.00 $ $ 884,160.00 $

-

########

OPERATING EXPENSES Number of Units

40

ADMINISTRATIVE EXPENSE

Figure A20: Student Operating Expenses

#######

Annual Revenue

Per Unit Expense Total Expense

Advertising Credit Check Expense Administrator Salary Office Salaries Apartment Allowance Office Expenses Management Fee Legal Expense Audit & Accounting Expense Bad Debt Expense Resident Services Telephone & Internet Total Administrative Expense UTILITY EXPENSE Electricity Water Gas Sewer Total Utility Expense

27 27 620 63 0 76 700 45 107 47 714 89

1080 1080 24800 2520 0 3040 28000 1800 4280 1880 28560 3560 100600

196 672 65 300

7840 26880 2600 12000 49320

MAINTENANCE EXPENSE Pest Control Security Expense Landscape Expense Janitorial Expense Maintenance Payroll Maintenance Contracts Maintenance Supplies HVAC Repair/Maintenance Electrical Repair Plumbing Repair Decorating & Painting Carpet Cleaning & Repair Appliance Repair Other Maintenance & Repair Replacements Total Maintenance Expense TAXES & INSURANCE Real Estate Taxes Payroll Tax Other Taxes Property Insurance Health Insurance Workers' Comp Insurance Property Tax Other Insurnace Total Taxes & Insurance TOTAL OPERATING EXPENSE AVERAGE COST PER UNIT

27 380 150 190 381 134 36 80 80 80 63 45 18 36 27

1080 15200 6000 7600 15240 5360 1440 3200 3200 3200 2520 1800 720 1440 1080 69080

45 107 4 254 80 21 1% 4

1800 4280 160 10160 3200 840 ####### 160 189495.6996 408495.6996 10212.39249

15 YEAR CASH FLOW

Description

Rent

2.00% Misc. Income (Laundry) 2.00% Gross Potential Income less Vacancy/Collection Loss 2% Effective Gross Income less Operating Expenses 3.00% less Replacement Reserves 1.00% Net Operating Income Equal Installation Payment to Stanf ord 1.50%

Available Balance

Amount transf erred to Af f ordable

Distributable Profits

1 2021

2 2022

######## ######## 2400 2448 ######## ######## $ (29,812.80) $ (30,409.06) ######## ######## -408495.6996 -420750.5706 -20000 -20200 ######## ######## ($894,314.03) ($894,314.03) $ 138,017.47 $ 154,779.15 $100,000 $66,614 $ 38,017.47 $ 88,165.07

3 2023

$ 1,548,364.90 2496.96 $ 1,550,861.86 $ (31,017.24) $ 1,519,844.62 -433373.0877 -20402 $ 1,066,069.53 ($894,314.03) $ 171,755.50 $32,773 $ 138,982.08

$ $ $ $

$ $ $

1,579,332.19 2546.8992 1,581,879.09 (31,637.58) 1,550,241.51 -446374.2803 -20606.02 1,083,261.21 ($894,314.03) 188,947.18 $0 188,947.18

Figure A21: Student Cash Flow 052

4 2024

5 2025

6 2026

7 2027

$1,610,918.84 ######## ######### 2597.837184 2649.793928 2702.789806 $1,613,516.67 ######## ######### $ (32,270.33) $ (32,915.74) $ (33,574.05) $1,581,246.34 ######## ######### -459765.5087 -473558.474 -487765.2282 -20812.0802 -21020.201 -21230.40301 $1,100,668.75 ######## ######### ($894,314.03) ($894,314.03) ($894,314.03) $ 206,354.72 $ 223,978.57 $ 241,819.03 $0 $0 $0 $ 206,354.72 $ 223,978.57 $ 241,819.03


Low-Income Housing Challenge

THE CORNER

8 2028

9 2029

$1,709,519.96 ######## 2756.845602 2811.982514 $1,712,276.80 ######## $ (34,245.54) $ (34,930.45) $1,678,031.27 ######## -502398.185 -517470.1306 -21442.70704 -21657.13411 $1,154,190.38 ######## ($894,314.03) ($894,314.03) $ 259,876.35 $ 278,150.60 $0 $0 $ 259,876.35 $ 278,150.60

10 2030

######## 2868.222165 ######## $ (35,629.06) ######## -532994.2345 -21873.70545 ######## ($894,314.03) $ 296,641.76 $0 $ 296,641.76

11 2031

$ 1,814,156.26 2925.586608 $ 1,817,081.84 $ (36,341.64) $ 1,780,740.21 -548984.0615 -22092.44251 $ 1,209,663.70 ($894,314.03) $ 315,349.67 $0 $ 315,349.67

Stanford University

12 2032

$ 1,850,439.38 2984.09834 $ 1,853,423.48 $ (37,068.47) $ 1,816,355.01 -565453.5834 -22313.36693 $ 1,228,588.06 ($894,314.03) $ 334,274.03 $0 $ 334,274.03

13 2033

$ 1,887,448.17 3043.780307 $ 1,890,491.95 $ (37,809.84) $ 1,852,682.11 -582417.1909 -22536.5006 $ 1,247,728.42 ($894,314.03) $ 353,414.39 $0 $ 353,414.39

14 2034

######## 3104.655913 ######## $ (38,566.04) ######## -599889.7066 -22761.86561 ######## ($894,314.03) $ 372,770.15 $0 $ 372,770.15

15 2035

$1,963,701.07 3166.749031 $1,966,867.82 $ (39,337.36) $1,927,530.47 -617886.3978 -22989.48426 $1,286,654.58 ($894,314.03) $ 392,340.56 $0 $ 392,340.56

Figure A22: Student Cash Flow

RENTAL ASSUMPTIONS

Total

Medical Center Rent Vendor Retail Standard Retail EHP Office & Clinic

NSF 5200 4470 3200 5880 18750

NNN per NSF $2.65 $2.91 $2.91 $2.5

annual per NSF 33 35 35 30

Annual Revenue ($)

171600 156450 112000 176400 616450

FUNDING SOURCES NMTC

Total Loan Total Amount Interest Amortization period Interest-Only Term Interest-Only Payment Annual Payment TOTAL

3260400

7,874,216 Bank Loan Dignity Health Loan 5,874,216 2000000 5.50% 3% 30 30 7 7 -323081.861 -60000 -456248.26 -121627.81 11134615.7

Figure A23: Rental Assumption

053


Stanford University

THE CORNER

Bank of America Merill Lynch

DEVELOPMENT COSTS & TAX CREDIT CALCULATION

Retail Budget ACQUISITION COSTS Housing Portion Land Cost Other Acquisition Costs

25000 SF out of 25000 SF out of

$1,368,750 $10,250

TOTAL ACQUISITION COSTS

1,379,000

PROFESSIONAL FEES Architecture & Engineering Other Professional / Consulting

6.00% 1.50%

TOTAL PROFESSIONAL FEES

498,639

FEES AND PERMITS City/County Fees and Permits Development Impact Fees Utility Fees/Costs TOTAL FEES AND PERMITS

70,000 100,000 70,000 240,000

CONSTRUCTION COSTS Demolition Tenant Improvement Offsite Improvements Site Improvements Parking Facilities

20,000 937,500 50,000 60,984 240,000

18,750 SF

50

.2 Acres @ 20 Stalls @

$304,920 Per Acre $12,000 Per Stall

.05 Acres @ 18,750 SF Subtotal 5,747,404 5,977,300 5,977,300 6,216,392

$653,400 Per Acre $235.00 PSF Percent 4.00% 0.00% 4.00% 0.85%

Construction Bond Premiums

6,269,231

1.00%

62,692

Construction Contingency Residential Structures - Non GC

6,331,924

5.00%

316,596 0

Landscaping / Common Areas Commercial Structures General Conditions Contractor Overhead Contractor Profit Contractor Insurance

Predevelopment Onsite Construction Work

Post-Construction Interest Permanent Loan Costs Permanent Loan Fees NMTC Fees Misc. Finance Costs

229,896 0 239,092 52,839

6,648,520

FINANCING COSTS Construction Loan Costs Construction Loan Fees Construction Period Interest

32,670 4,406,250

0

TOTAL CONSTRUCTION COSTS

72,000 1.00% 5.50%

9022410.00 9,022,410

90224.1 496,233

100,000

100,000 55,000 0

2,000

50,000 35,000

1.00% 4.00%

TOTAL FINANCING COSTS

054

398911.20 99,728

Figure A24: Commercial Development Cost & Tax Credit Calculation

898,457


Low-Income Housing Challenge

THE CORNER

OTHER COSTS Furnishings, Fixtures & Equipment Marketing Costs Legal Fees Property Taxes Soft Cost Contingency Accounting / Audit / Insurance Developer Fees Operating Reserve Misc Costs CDE Expense TOTAL OTHER COSTS

Stanford University

9500000

0 30,000 200,000 25,000 100,000 150,000 200,000 50,000 50,000 665,000 1,470,000

7%

TOTAL DEVELOPMENT COSTS

$11,134,616

Figure A25: Commercial Development Cost & Tax Credit Calculation

15 YEAR CASH FLOW

Description Rents Gross Potential Income less Vacancy/Collection Loss Effective Gross Income less Operating Expenses less Replacement Reserves Net Operating Income Debt Service (Bank) Debt Service (Dignity Health) DISTRIBUTABLE CASH FLOW less At-Risk Asset Mgt Fees Net Cash Flow Debt Coverage Ratio

Distribution of Net Cash Flow Residual Receipts Incentive Management Fee to GP LP Share GP Share

2.00% 10.00% 3.00% 1.00%

1.00%

0.000% 36.000% 63.936% 0.064% 100.0%

1 2022 $616,450 $616,450 ($61,645) $554,805 $20,000 $0 $574,805 ($323,082) ($60,000) $191,723 $0 $191,723 1.50

2 2023 $628,779 $628,779 ($62,878) $565,901 $20,600 $0 $586,501 ($323,082) ($60,000) $203,419 $0 $203,419 1.53

3 2024 $641,355 $641,355 ($64,135) $577,219 $21,218 $0 $598,437 ($323,082) ($60,000) $215,355 $0 $215,355 1.56

4 2025 $654,182 $654,182 ($65,418) $588,764 $21,855 $0 $610,618 ($323,082) ($60,000) $227,536 $0 $227,536 1.59

5 2026 $667,265 $667,265 ($66,727) $600,539 $22,510 $0 $623,049 ($323,082) ($60,000) $239,967 $0 $239,967 1.63

6 2027 $680,611 $680,611 ($68,061) $612,550 $23,185 $0 $635,735 ($323,082) ($60,000) $252,653 $0 $252,653 1.66

7 2028 $694,223 $694,223 ($69,422) $624,801 $23,881 $0 $648,682 ($323,082) ($60,000) $265,600 $0 $265,600 1.69

8 2029 $708,107 $708,107 ($70,811) $637,297 $24,597 $0 $661,894 ($456,248) ($121,628) $84,018 $0 $84,018 1.15

9 2030 $722,269 $722,269 ($72,227) $650,042 $25,335 $0 $675,378 ($456,248) ($121,628) $97,502 $0 $97,502 1.17

10 2031 $736,715 $736,715 ($73,671) $663,043 $26,095 $0 $689,139 ($456,248) ($121,628) $111,263 $0 $111,263 1.19

11 2032 $751,449 $751,449 ($75,145) $676,304 $26,878 $0 $703,183 ($456,248) ($121,628) $125,306 $0 $125,306 1.22

12 2033 $766,478 $766,478 ($76,648) $689,830 $27,685 $0 $717,515 ######## ######## $139,639 $0 $139,639 1.24

13 2034 $781,808 $781,808 ($78,181) $703,627 $28,515 $0 $732,142 ($456,248) ($121,628) $154,266 $0 $154,266 1.27

14 2035 $797,444 $797,444 ($79,744) $717,699 $29,371 $0 $747,070 ($456,248) ($121,628) $169,194 $0 $169,194 1.29

15 2036 $813,393 $813,393 ($81,339) $732,053 $30,252 $0 $762,305 ($456,248) ($121,628) $184,429 $0 $184,429 1.32

$0 $69,020 $122,580 $123

$0 $73,231 $130,058 $130

$0 $77,528 $137,690 $138

$0 $81,913 $145,478 $146

$0 $86,388 $153,425 $154

$0 $90,955 $161,536 $162

$0 $95,616 $169,814 $170

$0 $30,246 $53,718 $54

$0 $35,101 $62,339 $62

$0 $40,055 $71,137 $71

$0 $45,110 $80,116 $80

$0 $50,270 $89,280 $89

$0 $55,536 $98,632 $99

$0 $60,910 $108,176 $108

$0 $66,394 $117,917 $118

Figure A26: Commercial Cash Flow

055


Stanford University

THE CORNER

Appendix B: Letters

056

Bank of America Merill Lynch


Low-Income Housing Challenge

THE CORNER

Stanford University

057


Stanford University

058

THE CORNER

Bank of America Merill Lynch


Low-Income Housing Challenge

THE CORNER

Stanford University

059


Stanford University

060

THE CORNER

Bank of America Merill Lynch


Low-Income Housing Challenge

THE CORNER

Stanford University

061


Stanford University

062

THE CORNER

Bank of America Merill Lynch


Low-Income Housing Challenge

THE CORNER

Stanford University

063


Stanford University

064

THE CORNER

Bank of America Merill Lynch


Low-Income Housing Challenge

THE CORNER

Stanford University

065

East Palo Alto Development Project  

Final Report for the 2018 Bank of America Merrill Lynch Low Income Housing Challenge.

East Palo Alto Development Project  

Final Report for the 2018 Bank of America Merrill Lynch Low Income Housing Challenge.

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