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IV. VALUE OF THE INTEREST TO BE CONVEYED Reuse Value The reuse value of the Property is directly a function of the development economics specific to the proposed Project. The Project will consist of 60 high-quality senior rental units to be restricted to very low income senior households. The income restrictions are critical to the site's reuse value. KMA evaluated the development economics of the Project. Given the income and rent restrictions, it is estimated that the units will rent for approximately $588 per month. The restricted rental income stream is estimated to support only approximately $1.6 million of debt (private investment) relative to the estimated development cost of $9.1 million for the entire Project. Without significant public subsidies, the Project would not be fmancially feasible. The Developer anticipates fmancing the $9.1 million Project using numerous subsidy programs, including Low Income Housing Tax Credits and the Federal Home Loan Bank Board, as shown below: Low Income Housing Tag Credits Financing Plan Redevelopment Agency of the City of San Leandro $1,000,000 Loan Sponsor Equity $ 323,495 First Mortgage $1,607,600 Tax Credit Proceeds (federal subsidy) $5,320,862 Contributor Contribution $500,000 Federal Home Loan Bank Board Affordable Housing $ 300,000 Program (Subsidy) Total Sources $9,051,957 Based on the Agreement's requirement that the Project's hard costs be at a minimum $4.8 million, the very low income rental restrictions, and the availability of other funding sources specified above, it is KMA's opinion that the fair reuse value of the site is nominal. Under the terms of the DDA, the site will be conveyed to the Developer at no up-front cost. The purchase price and interest of 3% will be deferred for 55 years and forgiven at the end of 55 years if the project remains compliant with the DDA. These terms are consistent with the site's nominal reuse value. 001-001.doc Keyser Marston Associates, Inc. 19096.023 Page 7