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Village Hill Rental Phase II 2006 TCBSubmitted to Massachusetts Department of Housing and Community Development MassDevelopment September 8, 2006 INA, September 9, 2006 l Jane Wallis Gumble, Director The Community Builders, Inc. Department of Housing and Community Development 100 Cambridge Street, Suite 300 322 Main Street Boston, MA 02114 Springfield, MA 01105.2408 RE: VILLAGE AT HOSPITAL HILL PHASE II NORTHAMPTON, MASSACHUSETTS Dear Ms. Gumble: We are pleased to submit this application for an annual- allocation of $475,200 in Low-Income Housing Tax Credits (LIHTC), $715,000 in State HOME funds, $1,000,000 in Affordable Housing Trust Funds (AHTF), and $1,666,701 in Facilities Consolidation Funds (FCF) for the creation of 40. units of affordable housing for Phase II of the Village at Hospital Hill located in the city of Northampton. As part of this application we are also submitting a request from the Commonwealth for 8 Project-Based Section- s Vouchers. We would be willing to accept alternative funds from the Department of Housing and Community Development to accomplish this program should the Department determine that other funds are more appropriate for this project. PROJECT DESCRIPTION The Village at Hospital Hill is a joint public-private redevelopment project which is the result of over twenty-five years of effort by the Commonwealth, the City of Northampton, elected officials, advocates, and concerned citizens, to provide a forward-looking, economically viable reuse for the core campus of the former Northampton State Hospital, situated on a prominent hilltop west of downtown Northampton, Massachusetts. A full history of the background of this project is included in Exhibit 1. The Community Builders, Inc. (TCB) is working in conjunction with MassDevelopment to create a mixed-use community that consists of affordable and market-rate housing, live-work studios, an assisted living . facility, and a mix of retail, office, light industrial, research and development/multi-media space. The Master Plan for the site envisions a full build-out of approximately 476,000 s.f. of mixed-use commercial space, a child care center, and the development of a 60-80 unit assisted living facility for seniors. The Master ~'D Plan also includes 207 residential units, 100 of which would be single- 413 737-0207 fax 413 731.9790 TDD 800 545-1833 x180 www.tchinc.org Boston Louisville New Haven Philadelphia Pittsburgh Providence . Springfield. Washington O.C. Patrick E. Clancy President & Chief Executive Officer September 6, 2006 VILLAGE AT HOSPITAL HILL PHASE II Page 2 of 2 family homes and 107 of which would be mixed income rental housing. Overall, fifty percent of the residential units will be designated as affordable. Approximately 75% of the rental units and 25% of the homeownership units will be reserved for low- and moderate-income households. The balance of the units will be rented or sold at market rates. The rental units will be developed in three to four phases. PHASE II This application is submitted to provide financing for Rental Phase II, which consists of 40 new construction townhouse units and flats for families and individuals. When complete there will be 19 one bedrooms, 19 two bedrooms, and 2 three bedrooms. Four one-bedroom units will be reserved for households at or below 30% area median income. An additional twenty-eight units will be reserved for households earning less than sixty percent of AMI. The remaining eight market units will be available without income restrictions. Since the first attempt to fund the second rental phase of the NSH redevelopment project in September 2003, several milestones have been accomplished: 1) the Phase I Rental Development is complete with 33 units in two renovated buildings next to the site of the proposed Phase II; 2) the major road providing access to the North Campus has been built; 3) funds have been provided for the construction of the roads for the South Campus; 4) many of the existing structures have been demolished; and 5) "Old Main" is currently being demolished with completion scheduled for summer of 2007. A Special Permit and a Preliminary Subdivision Approval have been issued for the overall site. As discussed with your office, the City of Northampton will likely be seeking approval from DHCD in the coming months for a redesignation of the NSH site as "40R". It is anticipated that this process will be concluded before Spring 2007. To allow the City some time to complete that process, we have deferred submission of site plans for Planning Board approval. However, if 40R redesignation does not occur in time, the current Special Permit does allow the project to proceed. In either event, site plans will be submitted for approval in March. This will allow for the project to begin construction, as scheduled, in July 2007. The City has repeatedly stated that it is very much interested in expediting the progress of this project. The Village at Hospital Hill represents a significant milestone for the Commonwealth in taking state surplus land and converting a large percentage of it to affordable housing. TCB is pleased, after many years of planning, to finally bring Phase II of this project to reality. If you have any questions or require additional information, please contact me at 413.737.0207. Thank you for the opportunity to submit this application. We look forward to working with you on this important development. Sincer ly, u f• Tom 9Kegelman Senior Project Manager Albany Boston Cincinnati Louisville New Haven New York Philadelphia Pittsburgh Providence Springfield Washington D.C. CITY OF NORTHAMPTON Mayor Mary Clare Higgins City Hall 210 Main Street Room 12 Northampton, MA 01060-3199 (413) 587-1249 Fax: (413) 587-1275 mayor@northamptonma.gov September 6, 2006 Thomas R. Gleason Executive Director MassHousing One Beacon Street Boston, MA 02108-3110' Re: Village at Hospital Hill Priority Development Fund Application Dear Mr. Gleason: As Mayor of the City of Northampton and Chair of the Northampton State Hospital Citizens Advisory Committee, 1 am pleased to support the application by The Community Builders, Inc. for $1.475 million in Priority Development Funds for the next phase of affordable rental housing development at the Village at Hospital Hill, yThis project is part of an overall master plan for development of this site. As such, it has the full support of Northampton City government and of the Citizens Advisory Committee. The Northampton State Hospital site has been targeted by the City for community development for over twenty-six years. We are pleased to finally see our plans becoming a reality. Redevelopment of the former Northampton State Hospital has been a high priority project on the local, regional, and state level for which the City of Northampton has provided considerable support, As further indication of the City's support of this project, I have approved, upon recommendation of the Northampton Housing Partnership, an allocation of $75,000 in Community Development Block Grant funding for Phase Two rental housing on the North Campus. The City rezoned the site as a Planned Village District to allow for mixed used development in a concentrated development pattern. The project is. a model smart growth development meeting the Commonwealth's sustainable development principles creating a mixed-use, mixed-income village center surrounded by residential and commercial uses, a pedestrian oriented development connected by walking and biking trails to Downtown Northampton, creating both jobs and housing within close proximity of each other, and design guidelines to reuse some of the buildings on the site and encourage an urban village atmosphere and appearance. One of the primary public benefits of the project is to ensure that 5061o of the 200- housing units are affordable, a significant commitment to affordable housing in Western Massachusetts. The Main Complex, a 400,000sf deteriorated and blighted building on the North Campus, is currently under demolition by MassDevelopment. The removal of this complex will open the North Campus to housing development and private investment. However, public funding is essential to achieving the affordability goals of the project as construction costs continue to increase since the initial master plan for the project was conceived. The Village at Hospital Hill is a wise public investment for State resources, and MassHousing funds are critical to C the success of this project. ` J We continue to be excited about the development of the mixed-income community at the Village at Hospital Hill. Your support of this application is invaluable in bringing needed investment in affordable housing construction to the project and to Western Massachusetts, In our mutual commitment to affordable housing, we have worked closely with your agency. Thank you for your support of Northampton projects. We look forward to working with you on the upcoming phases of affordable housing development at the Village at Hospital Hill. Sincerely„`^ MAR CLARE HIGGINS Mayor, City of Northampton Chair, Northampton State Hospital Citizens Advisory Committee CITY OF NORTHAMPTON Mayor Mary Clare Higgins City Hall 210 Main Street Room 12 Northampton, MA 01060-3199 (413) 587-1249 Fax: (413) 587-1275 mayor@northamptonma.gov August 10, 2006 Jane Wallis Gumble, Director Massachusetts Department of Housing and Community Development 100 Cambridge Street Suite 300 Boston MA 02114 Dear Director Gumble: As Mayor of the City of Northampton and Chair of the Northampton State Hospital Citizens Advisory Committee, I am pleased to support The Community Builders, Inc.'s application for Low Income Housing Tax Credits for the next phase of affordable rental housing development at the Village at Hospital Hill. This project is part of an overall master plan for development of this site. As such, it has the full support of Northampton City government and of the Citizens Advisory Committee. kpRhe Northampton State Hospital site has been targeted by the City for community development for over twenty-six .Jars. We are pleased to finally see our plans becoming a reality. The City of Northampton has provided considerable support for this project. The site was rezoned as a Planned Village District to allow development to occur. The Citizens Advisory Committee and the Planning Board have been actively involved in the design, permitting and siting of the buildings. The Office of Planning and Development and the Mayor's Office of Economic Development also have been actively engaged in planhing and promoting redevelopment of the site; its staff has provided considerable expertise to The Community Builders. The Mayor's Office of Economic Development will continue to be involved with the project after it is completed to provide services to residents. As further indication of the City's support of this project, I have approved, upon recommendation of the Northampton Housing Partnership, an allocation of $75,000 in Community Development Block Grant funding for Phase Two rental housing on the North Campus. The City and the CAC will continue to work with the developers and the permitting authorities to ensure a successful outcome for the project, the neighborhood and the City. We continue to be excited about the development of the mixed-income community at the Village at Hospital Hill. Your support of this application is invaluable in bringing needed investment in affordable housing construction to the area. Sincer, l%~ r -4 RY CLA IGGINS C17 1"lor City f Northampton war, Northampton State Hospital Citizens Advisory Committee i I I i Narrative Regarding Threshold Characteristics The Village at Hospital Hill Threshold #1: Conformance with Set Aside Categories Production vs. Preservation This is an application for tax credits and subordinate financing for units that qualify for the production set-aside. All units in this application are new construction. 75% Threshold for Family Housing As discussed with DHCD staff this summer, twelve out of the forty units, set-aside for the mentally ill, are not counted in this calculation. Of the remaining 28 units, 21 (or 75%) are two or three bedroom units and are intended for families, which meets the DHCD requirements for this threshold. The set aside of these 12 units is in furtherance of a requirement of the awarding of the development rights for the Northampton State Hospital site, to target a total of 15%, or approximately 31 units, of all new housing developed at the site to clients of the Department of Mental Health. Not-for-Profit TCB is a qualified 501(c)(3) organization. TCB will be the developer and property manager of the project. TCB has created a wholly owned subsidiary which is the managing member of the LLC which will be the owner and mortgagor/borrower. Accordingly, credits awarded to this project will count toward the Department's requirement that 10% of all credits awarded be allocated to projects involving a qualified non-profit organization. Threshold #2: Quality of the Site The Northampton State Hospital site represents an ideal location for development of affordable and mixed income housing. TCB will receive the site "clean" of all environmental hazards from Hospital Hill Development LLC. There are no wetlands on this parcel. The redevelopment of the Northampton State Hospital (NSH) represents an enormous opportunity. The central campus sits on a beautiful piece of land, high above Northampton, with extraordinary views of Northampton and the Connecticut River Valley, with the Holyoke Range on the horizon. The site is centrally located in Massachusetts with good access to the major economic centers of the New England states. Further, it will be part of a new vibrant and attractive mixed-use community with jobs, housing, and modest amounts of specialty retail, in close proximity to the educational, cultural, and civic resources of Northampton. The Northampton State Hospital site has been visited several times by DHCD Staff. Threshold #3: Evidence of Local Support The Village at Hospital Hill has garnered strong local support, as documented and described in detail in Exhibit 5. In particular, the project has received a letter of support from the Chief Elected Official, the Mayor of Northampton, Mary Clare Higgins. The project also has received support from the Citizens Advisory Committee (CAC), in a letter from Mary Clare Higgins in her capacity as Chair of the CAC. t. Pagel of 9 The City of Northampton has contributed $125,000 is for direct project expenses for Phase I. The City has pledged another $75,000 for Phase Il development and is listed in the sources section of this application. (The entire CDBG match is described more particularly below under Threshold #6, and documented in a letter in Exhibit 23.) Equally significant is a letter of support from the Northampton Housing Partnership. The Northampton Housing Partnership serves as the city's coordinating and screening body relative to issues and initial views involving affordable housing. The board is appointed by the Mayor and includes a broad cross-section of public and private sector interests in the community. Exhibit 5 includes additional evidence of support from local, state, and federal officials, including ■ Mary Clare Higgins, Mayor of Northampton ■ Mary Clare Higgins, Chair of the Citizens Advisory Committee ■ Martha Ackelsberg, Chair, Northampton Housing Partnership ■ United States Congressman Richard E. Neal ■ United States Senator John Kerry (updated letter being sent under separate cover) ■ Massachusetts State Senator Stanley Rosenberg ■ Teri Anderson, Economic Development Coordinator, City of Northampton ■ Wayne Feiden, Northampton Office of Planning and Development, City of Northampton ■ Ann Detrick, Deputy Commissioner, Department of Mental Health (under separate cover) ■ Brian C. Rust, Lieutenant, Northampton Police Department ■ Michael Truckey, Executive Director, Franklin Hampshire Employment and Training Consortium The Northampton community is actively involved in the planning of the development of the site. f J, The Village at Hospital Hill enjoys strong local support which is most clearly demonstrated through the role played by the Citizens Advisory Committee (CAC). The Request for Proposals (RFP) for a Master Plan issued in October of 1997, and the subsequent selection of The Community Builders as the designated developer, was done with the input and approval of the CAC. The CAC is a collaboration of local agencies and organizations from the City of Northampton including representatives from the Chamber of Commerce; the Housing Partnership; the Labor Council; Representatives from the Route 10, Route 66 and Grove Street Neighborhood Associations; the Alliance for the Mentally Ill; the Franklin/Hampshire Private Industry Council; the Industrial Affairs Council; and the Department of Mental Health. The CAC is chaired by the Mayor of Northampton. Threshold #4: Creditworthiness of Sponsor/Owner TCB is the sponsor and developer of the Village at Hospital Hill. TCB meets all of the stated requirements for creditworthiness as set forth in the 2006 QAP. A certificate that TCB meets the standards is attached at the end of this section. a, Page 2 of 9 Threshold #5: Evidence of Site Control In November 2002, title to the entire Northampton State Hospital site was acquired from the Commonwealth by Hospital Hill Development LLC, a single purpose LLC created by TCB to own and develop the site. A copy of the deed is included in Exhibit 4. TCB has site control for the particular portion of the property that is the subject of this application by virtue of an Option to Purchase, executed between Hospital Hill Development LLC and TCB, also included in Exhibit 4. Threshold #6: Identification of all Financing Sources All financing sources have been identified for this project sufficient to cover development and operating costs. The sources are included in Section 3 of the application and documented in Exhibits 21 through 24. Development Costs The project has received a commitment of $75,000 in Community Development Block Grant (CDBG) monies from the City of Northampton. A letter of support from the Mayor of Northampton is included in Exhibit 23 for these funds. These funds will be in addition to the CDBG funds already provided in support of the Master Plan for Northampton State Hospital. As described below, the City has already committed a substantial amount of their CDBG funds to this site - over 60% of their affordable housing resources have been dedicated to this project. A letter of interest from Aegon is also included which shows that the Company would be willing to invest $0.945 per $1 LIHTC or $4,489,742 toward this venture. adhhL The remainder of funds necessary to complete this project are the subject of this application. In particular, this application is seeking Facilities Consolidation Funds, State HOME monies, Priority Development Funds and Affordable Housing Trust Funds in addition to tax credits. The local match for this application is $75,000 in CBDG funds, as described in the letter from the Mayor of Northampton attached to Exhibit 23. Operating Costs Funding is sufficient to cover operating costs. The Northampton Housing Authority does not currently have Project Based Section 8 vouchers available. The Authority is very supportive of this project and has indicated a willingness to provide Section 8 vouchers in the future if they become available. A letter of support from John Hite of the Housing Authority is included under Exhibit 24 to this effect. As part of this application, therefore, we are also requesting an allocation of 8 Project Based Section 8 vouchers from the Commonwealth. This figure exceeds the 25% cap set by the federal government. However, units earmarked for elderly and disabled applicants are exempted from the calculation per federal regulations. This application includes a request for 8 Section 8 vouchers for those identified as eligible for assistance. Enclosed per the requirements of the One Stop are 1) A statement certifying all project principals are not excluded from Federal procurement and nonprocurement program, and 2) A draft management plan for managing and maintaining these units. Both are attached in Exhibit 24. p; Page 3 of 9 Threshold #7: Status of Compliance Monitoring of Other Tax Credit Projects_ Y All Forms 8823 ("Low income Housing Credit Agencies Report of Noncompliance") that have been issued for material and/or continuing, but curable, non-compliance have been addressed in Exhibit 26. Documentation to correct each instance of continuing non-compliance has been provided to Spectrum Enterprises. In addition, TCB has confirmed that all compliance monitoring fees have been paid to DHCD. Threshold #8: Good Standing with Respect to Other DHCD Programs To the best of our knowledge, all members of the Development Team are in good standing with DHCD. Specifically, The Community Builders, Inc., is in good standing with DHCD. The architect, Dietz & Company Architects, Inc., we believe is in good standing with DHCD. The General Contractor who provided the cost estimate and will be invited to bid on the project, C.W.C Builders, Inc., we believe is in good standing with DHCD. Threshold #9: Commitment to a Thirty Year Term of Affordability TCB will commit to maintaining the tax credit units for 40 years. As described in the QAP, TCB will offer the Commonwealth "an opportunity to present a qualified contract as such term is defined in Section 42 of the Internal Revenue Code, for the purchase of the project after expiration of the term of the Agreement." Threshold #10: Tenant Supportive Services TCB will work with a variety of local entities, organizations, employers, city departments, and community groups to ensure that residents have access and opportunity to services, employment, and job training programs. Of the 40 units in the project, 12 will be targeted to the Mentally 111. Services will be provided to these residents through a third party vender procured by DMH. Amongst the services provided these tenants to help them to maximize their ability to live independently will be budgeting skills, medication administration, employment and training opportunities as well as issues specific to their responsibilities as tenants. The service plan is described in Exhibit 14. A letter from DMH is also attached to Exhibit 5. Because these services are provided by a third party vendor, they are not included in the operating budget. In addition, TCB is working with a number of private, neighborhood, and city departments to provide services and resources to residents of the Village at Hospital Hill. Further description of these services is included in Exhibit 5, Section 2 (Community Involvement in Project). These services will not be part of the total operating cost for the site. Service providers and the services they will provide are documented below. Note that these service providers have agreed to provide services for all of The Village at Hospital Hill, which includes Phase II: Letters Attached Documenting Supportive or other Services (see Exhibit 5) ■ Teri Anderson, City of Northampton Economic Development - Business Development ■ JoAnne Campbell, Valley Community Development Corporation Business Development, Home buyer counseling, Homeownership counseling ■ Ann Detrick, Deputy Commissioner, Department of Mental Health Self-sufficiency (under separate cover) Page 4 of 9 ■ Michael Truckey, Franklin Hampshire Employment and Training Consortium - Job Training, Career Development Threshold #11: Inclusion of Units for Very Low Income Persons or Families Ten percent of units (4 of 40) are reserved for persons or families earning less than 30% AMI. Threshold #12: Consistency with the Commonwealth's Principles of Sustainable Development 1. Redevelop First - The Village at Hospital Hill project will redevelop a blighted former mental institution located within walking distance to downtown Northampton, serviced by pedestrian and bicycle paths. Eleven historic buildings as well as some of the historic architectural and landscape features of the former State Hospital will be preserved and reused. 2. Concentrate Development - The Village at Hospital Hill is a mixed-use commercial, industrial, and residential community within the Planned Village District. The development is concentrated on 126 acres of the original 500+acres of the State Hospital property. Housing, jobs, and neighborhood convenience services are located within walking distance of each other and designed around a village center. Over 400 acres of surrounding former hospital land is permanently preserved as open space, agricultural land, community gardens, walking trails, and recreation fields available for use by the public. I Be Fair - Planning for redevelopment of Hospital Hill has been in the works for over 20 years with many community goals incorporated into the project including: affordable housing, economic development, housing/commercial balance to minimize the burden on the tax base, a diversity of housing types, 15% housing and jobs for mental health clients, mitigation of traffic and development impacts on surrounding neighborhoods, an open and inclusive planning and permitting process with the oversight of a Citizen Advisory Committee, open space protection, and historic preservation. 4. Restore and Enhance the Environment - As previously mentioned, 405 acres of the original hospital property have been permanently preserved for open space, agricultural, and natural resource protection as well as recreational use. The Mill River flows along the northern boundary of the property and the area adjacent to the river has been permanently protected. In addition, no wetlands on the property will be disturbed as a result of the project. No other sensitive land or resources will be impacted by the project. 5. Conserve Natural Resources - MassDevelopment will encourage the use of green building construction on the site and will make educational resources and financing available. Salvage of materials from building demolition will be maximized and some demolition material will be reused as fill on the property. r. r Page 5 of 9 6. Expand Housing Opportunities - The Village at Hospital Hill includes a diversity of housing types as well as a 50% affordable/50%o market rate housing mix. -15%- of the units are targeted for clients of the Mass. Department of Mental Health. The project will include a mix of new and rehabilitated rental units, townhouse units, single to three family units as well as mixed-use residential/commercial buildings. This planned village project will provide housing within walking distance of jobs and the commercial village center and business park. 7. Provide Transportation Choice - This project will be pedestrian oriented with walking and biking paths linking all development within the project to sidewalks/bike trails leading to downtown. MassDevelopment will provide an interim shuttle bus from the project to downtown Northampton until the potential ridership from the project justifies expansion of a full bus route. The developers have also agreed to provide for membership in the local Transportation Management Association, make accommodations for bicycle storage, carpooling, an on-site transportation coordinator, and the opportunity for Zip Car shared vehicles. 8. Increase Job Opportunities - The Village at Hospital Hill is projected to create or retain 400-800 jobs. The target business tenant for the Hospital Hill Business Park includes: technology, light industry, new media, R&D, and neighborhood commercial services. Several local manufacturers seeking expansion space are interested in space at the site. Northampton has a severe lack of available land suitable for commercial/industrial growth. The site will provide a solution to local businesses that could otherwise not be accommodated in the City and will create an inventory of commercial/industrial space suitable to attract new businesses to the City/region. The Mayor's Office of Economic Development as well as other regional assistance programs will be available to provide business assistance to support the growth of new and existing businesses at the Hospital Campus. 10 9. Foster Sustainable Businesses - This project will support sustainable businesses by providing a smart growth, mixed-use village development. In addition, the type of commercial/industrial space available on the property will support the development of industry clusters identified in the Governor's Competitiveness Council Cluster Analysis for the Pioneer Valley region, particularly printing/publishing, life sciences/medical devices, and information technology. The site can provide space for both incubator and mature businesses. Plan Regionally - The Village at Hospital Hill is a project of regional significance and is consistent with local and regional economic development, land-use, and housing goals. The project is listed as a high priority project in Northampton Vision 2020, the Pioneer Valley Comprehensive Economic Development Plan (CEDS), and the Pioneer Valley Competitiveness Council Cluster Analysis. Over its fifteen year buildout, the project will provide over 200 units of housing in a high demand housing market, 400-800 jobs for the regional workforce, and will contribute over 300,000 sf of building space to the regional'commercial/industrial inventory. The project is projected to create 90 jobs for Hampden County low/mod individuals and over 200 Page 6 of 9 jobs for Hampshire/Franklin County low/mod individuals. This project has broad public support from housing, land preservation, and economic development organizations in the region., Threshold #13: Fair Housing Narrative 1. Encourage Equity Village at Hospital Hill Phase II will be managed by The Community Builders, Inc. TCB will implement carefully monitored procedures to ensure compliance with the Fair Housing Act, Section 504 of the Rehabilitation Act, The Americans with Disabilities Act, Title VI, the Age Discrimination Act, Executive Order 11063, Chapter 151B of the Massachusetts General Laws, and the Massachusetts Equal Rights Law. TCB's transparent and rigorously documented tenant selection process is the best guaranty against subjective or discriminatory practices. All information used to evaluate applicants for the Village at Hospital Hill, Phase II units be in writing. This includes application forms, verifications, credit checks, letters of support, interview notes, etc. Rejected households or persons will receive written notification containing the reasons for their rejection and may appeal, in writing, to Agent within five days of receiving the rejection notice. All rejection notices will contain phone numbers for complaints to the Massachusetts Commission Against Discrimination and the U. S. Department of Housing And Urban Development. The redevelopment of Hospital Hill is especially focused on providing opportunities for the mentally ill to live independently in mixed housing. 12 of the 40 units in this phase will beset aside for those whose mental illness might prevent them from living independently, were it not for the supportive services and subsidized housing made available here. In addition, job opportunities in the construction and management of the property are also being directed to the clients of the Department of Mental Health. The availability of units for a range of income levels, for those with physical and mental disabilities, and for those of different ages and household sizes is already built into the financial and physical structure of this project. In addition, marketing outreach to minorities who represent only 10% of the general Northampton population will be helped by advertising in surrounding communities where the minority population is significantly higher. A wide network of service providers that care for the homeless and others in need will also ensure that these valuable resources will be well distributed demographically. 2. Be Affirmative All persons involved with the processing of housing applications will receive training in the observation and compliance with the Fair Housing Act, Section 504 of the Rehabilitation Act, The Americans with Disabilities Act, Title VI, the Age Discrimination Act, Executive Order 11063, Chapter 151B of the Massachusetts General Laws, and the Massachusetts Equal Rights Laws. The purpose of the Page 7 of 9 , J, training is to ensure that all employees enforce the policy of non-discrimination and fair housing. The architects at Dietz and Company, Architects undergo extensive training in accessibility requirements. In addition, accessibility experts with Stavros Center for Independent Living have been asked to work with the development team to maximize accessibility wherever possible. 3. Promote Housing Choice The "Traditional Neighborhood Design" that this project follows creates a denser cluster of housing than normally found in suburban communities. This means that there are more opportunities for pedestrian-friendly streetscapes, with sidewalks, accessible paths, parks, easy access to downtown amenities, as well on-site amenities that will follow as the project grows. With mixed-income for-sale homes as well as mixed-income apartments, this will be one of the most demographically diverse communities in Western Massachusetts. As above, marketing will emphasize outreach to underrepresented minorities through minority housing advocates and others. 4. Enhance Mobility As described above, in addition to pockets of poverty in Northampton, there are surrounding communities like Holyoke and Springfield which will be the focus of marketing efforts. As the project grows, more opportunities for these households to move up from apartment dwelling to home-ownership will appear, easily accessed by those living just down the street. 5. Promote Greater Opportunity Unlike any other redevelopment project of this type, the commitment to make 50% of the total 207 planned housing units affordable to low income households is a remarkable effort to provide the most amount of affordable housing in one of the most desirable neighborhoods in the Commonwealth. 6. Reduce Concentrations of Poverty The development of hundreds of thousands of square feet of commercial space in the surrounding neighborhood means hundreds of jobs, many of which will be filled by those living in these apartments. The master developer for the site is committed to providing bus service to the site as soon as is practicable. Meanwhile, bus service is currently available a little more than a half mile away and a bike path is being built that will connect the site with other communities. A Zip car program has just begun at Smith, only 1/ mile away and there is hope that, someday, a Zip car will be located at the site, as well. 7. Preserve and Produce Affordable Housing Choices This project does not preserve an existing affordable housing project, but it does produce affordable housing and (as said above) will provide the most affordable housing in the most desirable location with jobs, good schools and lots of opportunities. 8. Balance Housing Needs . Noone will be displaced due this redevelopment project. This project is the result of a x lengthy and careful public process involving hundreds of caring citizens in an attempt to incorporate the needs of the city and the region. 9. Measure Outcomes The tenant selection procedures that will be implemented through MassHousing obligate the owner to keep careful records and the measure their success in meeting recruitment goals. Already, results in the first phase showed minority occupancy double that of the host community. We hope to build on that with the next phase. 10. Rigorously Enforce All Fair Housing and Anti-Discrimination Laws and Policies Careful monitoring by trained professionals, training of staff and the commitment of financial resources will ensure compliance with all the applicable rules and regulations should assure 004 Page 9 of 9 l~ AFFIDAVIT I, Elaine Vega, being first duly sworn on oath, depose and say that: 1. I am the Compliance Manager of THE COMMUNITY BUILDERS, INC. (the "Firm"). 2. The Firm does not have any issues of continuing non-compliance within the State of Connecticut. 3. The Firm does not have any issues of continuing non-compliance within its entire portfolio, which includes projects in Massachusetts, Connecticut, New York, New Jersey, Pennsylvania, Kentucky, Ohio, North Carolina, Illinois, Virginia, and West Virginia. THE COMMUNITY BUILDERS, INC. Elaine Vega STATE OF ) SS: COUNTY OF i Subscribed to and sworn before me, a Notary Public, in and for the said County and State, this 50 day of September, 2006. r otary My Commission Expires: 3 r :4,~`~,:•~;~,AN r & 4 \ 0 Certification of Sponsor Creditworthiness I, Beverly Bates, as Senior Vice President of The Community Builders, Inc., do hereby certify that the sponsor meets the thresholds of creditworthiness set for under "Section IX, Threshold #4" of the 2006 Massachusetts Qualified Action Plan. 1 Be ly Ba s Senior Vice President The Community Builders, Inc. 9-8-a6 Date VILLAGE AT HOSPITAL HILL PHASE II Northampton, Massachusetts Total Possible 182 Estimated 155 FUNDAMENTAL PROJECT CHARACTERISTICS Total Possible 100 Estimated 100 A) DESIGN The design and renovation of The Village at Hospital Hill Phase II will conform to all applicable laws, regulations and codes. It will also comply with HOME Rental Program Guidelines and Regulations, although experienced property managers on our staff prefer electric stoves and VCT, as opposed to gas stoves and sheet vinyl. We would be happy to discuss these options with DHCD. The proposed amenities are ample and appropriate for the target population, but not excessive. All units will have hookups for washer/dryer units. oft' U This Phase II of 40 units has no particular environmental issues which require design ~J sensitivity. The Master Plan for the site is based on the concept of an Urban Village, which seeks to favor the pedestrian over the automobile. Accordingly, units have been designed in close proximity to one another and the road to promote pedestrian interaction. As much as is possible, the units will have porches to encourage the same so that activity is oriented toward the street. The landscaping will similarly follow the concepts of the urban village. Landscaping will be used in large part to screen parking areas and in common areas such as parks and walking paths. A large part of the campus has already been committed to open space. Parking will be limited to 1.5 spaces per unit. The units will include sprinkler and fire alarm systems. Energy efficient windows, insulation and draft reduction methods will provide the energy efficient and comfortable units. It is expected that the project will comply with EPA's ENERGY STAR Standards. Further descriptions of the energy efficiency measures and building accessibility are included at Appendix H. In addition to the TV/Broadband Cable system and the telephone system, there will also be a third data network configured back to a central location through a wireless network. The General Contractor will only be required to provide the power for the routers at each iJ Page 1 of 11 Village at Hospital Hill, Northampton, Massachusetts Scoring Guidelines rl' IN building. A separate contract for the wireless router installation will be obtained. A j proposal for this has been obtained and is included in Exhibit 16. As required, a construction cost estimate has been included and signed by Ken Hoffman, CWC Builders, Inc. The primary access road to the site (Village Hill Road) has been completed. Additional roadways and infrastructure improvements will be built in coordination with MassDevelopment as part of the larger redevelopment project. Construction of those roadways is expected to begin in the Spring. The contractor selected by TCB, will tie into utilities that will have been tapped in the street and stubbed at the inside of the sidewalk. The cost for this work has been included in the construction estimate. Design: 20/20 B) DEVELOPMENT TEAM: The development team assembled for this project has extensive successful prior experience in the development, construction and management of complicated tax credit projects. The Community Builders, either directly, or through a subsidiary, will be the project sponsor, developer, owner, mortgagor, and property manager of the Village at Hospital Hill. The Community Builders will also serve as real estate legal counsel for the Alikk project. Project Sponsor, Developer, Owner, and Mortgagor: The Community Builders has developed 9 projects in its Massachusetts offices over the past five years worth over $70 million in total development costs, while maintaining approximately a 1% variance from projected to actual costs, many of which were complicated tax credit projects (see Exhibit 25). This is an extraordinary performance of completing difficult projects on budget. Many of the Massachusetts developments involved DHCD assistance in some form, and all of them are in good physical and financial condition. Architect: Dietz & Company Architects is providing architectural and engineering services. Dietz & Company Architects is a SOMWBA-certified women-owned business. Dietz has extensive experience in providing design, service, teamwork and management oversight. They have worked on similar tax credit projects in Western Massachusetts for several years and the quality of their work stands out in the neighborhood. (see Exhibit 27). General Contractors: A general contractor has not yet been selected for this project. TCB has identified four possible well qualified contractors whom will be invited to bid on the work: CWC Builders, Inc., Aquadro and Cerutti., Inc., D.A. Sullivan & Sons, Inc., and Fontaine Brothers, Inc. All of these are fine firms and should be given high marks. We have only included one in this application. The Community Builders, Inc. Village at Hospital Hill, Northampton, Massachusetts Scoring Guidelines CWC Builders- Inc. is a general contracting firm that has built or renovated residential, commercial and institutional properties valued at nearly one billion dollars in its fifty-six - years of business. CWC specializes in historic rescue, adaptive re-use and has also been involved in several housing rehabilitation efforts throughout greater Boston as well as Western Massachusetts. In addition, CWC Builders has worked with TCB previously on certain projects, including Nevins Manor in Metheun, MA. CWC's bonding capacity is valued at $37-42 million dollars annually. See Exhibit 29 for full resume on this general contractor. Legal: The Community Builders legal department will provide real estate legal services for the project. TCB legal staff has extensive experience in tax credit and affordable housing projects. Steve Paul of Palmer & Dodge will be the tax attorney for the project. Property Management: The Community Builders Inc. will be the management agent for the project, and has a very successful history managing over 60,000 housing units, in Connecticut, Kentucky, Massachusetts, New Jersey and Pennsylvania. Three-quarters of the properties under management are urban and inner-city family developments which administer the full range of subsidy programs and which have been financed with complex funding packages. The remaining quarter is comprised of inner-city and rural elderly/handicapped properties and commercial space. (See Exhibit 28) All members of the development team have proven financial strength (see Exhibits 30 and 33 for sponsor and general contractor financial information). Total Projected Development Team Score: 20/20 C) MARKETABILITY: The 2000 US Census reports that there are over 2,062 very low income households (households whose incomes are less than 30% AMI) in Northampton, representing approximately 17.4% of all households. For those very low-income families not already occupying a subsidized housing unit, rent burden is substantial. Very low income households in Northampton pay more than 30% of their income for rent, excluding those who currently occupy. subsidized housing. The only option for lessening this rent burden is either a tenant based or project based rental subsidy. For those households not qualifying for a preference placement, obtaining rental assistance in a timely fashion is difficult. The Northampton Housing Authority just recently opened their waiting lists and are unable to provide an accurate count of the number on their wait list. However, in six days they received 672 applications for their federal housing programs. They expect most of these applicants to be put on their waiting list. They no longer break down their lists by unit size, nor do they keep a waiting list for state housing programs. ~J The Community Builders, Inc. Village at Hospital Hill, Northampton, Massachusetts . Scoring Guidelines Moderate income households may have greater financial capabilities to find and retain housing but lack of housing stock in general is impacting the market. This evidence shows that there is a substantial market for low- and moderate-income housing. Few affordable units are available in the community and a great many households are paying more than 30% of their income for rent. A market study prepared by Zimmerman-Volk Associates is included with the application as Exhibit 7. The study concludes that a market does in fact exist for affordable housing at the Northampton site. Total Projected Marketabili Score: 20/20 D) FINANCIAL FEASIBILITY: All financing sources have been identified for this project sufficient to cover development and operating costs. The sources are included in Section 3 of the application and documented in Exhibits 21 through 24. Development Costs The project has received a commitment of $75,000 in Community Development Block Grant (CDBG) monies from the City of Northampton. A letter of support from the Mayor of Northampton is included in Exhibit 23 for these funds. These funds will be in addition to the CDBG funds already provided in support of the Master Plan for Northampton State Hospital. As described below, the City has already committed a substantial amount of their CDBG funds to this site - over 60% of their affordable housing resources have been dedicated to this project. A letter of interest from Aegon is also included which shows that the Company would be willing to invest $0.945 per $1 LIHTC or $4,489,742 toward this venture. A letter of interest from MassHousing for the permanent debt and consideration of the request for Priority Development Funds is also attached. The remainder of funds necessary to complete this project are the subject of this application. In particular, this application is seeking Facilities Consolidation Funds, State HOME monies, and Affordable Housing Trust Funds in addition to tax credits. The local match for this application $75,000 in CDBG funds. These funds are described in the letter from the Mayor of Northampton attached to Exhibit 23. Operating Costs The Community Builders, Inc. Village at Hospital Hill, Northampton, Massachusetts Scoring Guidelines . Funding is sufficient to cover operating costs. The Northampton Housing Authority do e-s not currently have Project Based Section 8 vouchers available. The Authority is very supportive of this project and has indicated a willingness to provide Section 8 vouchers in the future if they become available. A letter of support from John Hite of the Northampton Housing Authority is included under Exhibit 24 to this effect. However, the exact timing of their availability is uncertain and there is also significant demand for the relatively few units expected to be available. As part of this application, therefore, we are also requesting an allocation of 8 Project Based Section 8 vouchers from the Commonwealth. We recognize that should we receive an allocation of Section 8's from the state that half of the total number of units requested (4 units) would be reserved for households below 30% of AMI. The remaining Section 8's would be for households up to 50% of AMI. Total projected Financial Feasibility score: 20/20 E) READINESS TO PROCEED: The plan for the Village at Hospital Hill has been sufficiently developed for the project to score well in the Readiness to Proceed category. The following are the key criteria identified in the 2006 QAP used to determine readiness: site control, zoning, ability to meet 10% test, environmental and historic reviews, and ability to close on financing. Site Control TCB has control of the site. On November 25, 2002, title to the entire Northampton State Hospital site was acquired from the Commonwealth by Hospital Hill Development LLC, a single purpose LLC created by TCB to own and develop the site. TCB and MassDevelopment have entered into an Operating Agreement under which MassDevelopment became a majority and managing partner of Hospital Hill Development LLC effective simultaneous with the acquisition of the site. TCB has site control for the particular portion of the property that is the subject of this application by virtue of an Option to Purchase, executed between Hospital Hill Development LLC and TCB, also included in Exhibit 4. Zoning In December, 2001, the city of Northampton amended its zoning ordinances to designate the site of the former Northampton State Hospital as a Planned Village Zone. Under that zoning designation, a mixed use, urban scale, dense development is allowed. The procedure for development projects to proceed under this zoning designation involves three steps: (1) Receipt of a Special Permit for the entire site; (2) Subdivision Plan C ' l Approval; and (3) Site Plan Approval. The first step in the process, the receipt of a ~J The Community Builders, Inc. Village at Hospital Hill, Northampton, Massachusetts Scoring Guidelines Special Permit, was granted in September 2002. The existing Definitive Subdivision Plan will be revised this winter to allow the necessary additional streets to begin construction in Spring 2007, as part of TCB's homeownership development program. A copy of the Special Permit is enclosed in Exhibit 3, as is a copy of the existing subdivision plan approval. As described elsewhere, the site plan has not yet been submitted, pending the City of Northampton's anticipated 40R zoning application to the state this winter.. Whether the City completes that application on time or not, the site plan will be submitted in March and approval is expected in May 2007. Ability to meet 10% test The project will satisfy the 10% test found in the Internal Revenue Code Section 42(h)(1)(E) by incurring a minimum of 12-14 percent of costs prior to June 30, 2007. These costs include architect design fees, legal and related fees in connection with the real estate transfer, miscellaneous capitalizable general development costs and acquisition costs. Environmental and Historic reviews The redevelopment of the Northampton State Hospital site is subject to the requirements of MEPA. The environmental review process for the development of the site was begun in April 2002. On November 13, 2003, the Secretary of Environmental Affairs issued a certificate authorizing the overall development program to proceed with only minimal environmental mitigation (see attached letter included under Exhibit 2.1) Ability to close on financing Our development team is prepared to mobilize upon notification that we have been approved for State HOME funding, FCF monies, PDF and Trust funds, and that tax credits have been reserved for this proposal. A MassHousing loan commitment will be the first item on the agenda. Each member of the team has extensive experience working on HOME and tax credit funded developments. There are no unusual site conditions that will delay the project. Total projected Readiness to Proceed score: 20/20 Special Project Characteristics Total Possible 82 Estimated 55 Official Local Support: 6/6 Included at the beginning of this application is a Letter of Support from the points Chief Elected official of Northampton, the Mayor. A second letter from the Mayor is include in Exhibits 5 and 23 showing Northampton's commitment of current and future CDBG funds to the overall Master Plan for the site, The Community Builders, Inc. Village at hospital hill, Northampton, Massachusetts Scoring Guidelines . il~. I $75,000 of which is for use in Phase II: Inclusion in a Comprehensive Neighborhood Revitalization Effort: 6/6 The Village at Hospital Hill Phase I is part of the 1999 Master Plan for the points site which was approved by the Citizens Advisory Committee, a collaboration of local agencies and organizations. The CAC is chaired by the Mayor of Northampton and accordingly is part of a Neighborhood Revitalization effort approved by the City. The CAC includes representatives from the Chamber of Commerce; the Housing Partnership; the Labor Council; Representatives from the Route 10, Route 66 and Grove Street Neighborhood Associations; the Valley Community Development Corporation; the Alliance for the Mentally Ill; the Franklin/Hampshire Private Industry Council; the Industrial Affairs Council; and the Department of Mental Health. The 1999 Master Plan guides the overall planning effort at the Village at Hospital Hill which calls for complete neighborhood revitalization of the NSH. The Plan calls for 476,000 s.f. of mixed-use commercial space, comprising a mix of retail, office, light industrial, and research & development/multi media space as well as space for live-work studios, a child care center, and the development of a 60-80 unit assisted living facility for seniors. The Master Plan also includes 207 residential units, 100 of which would be single-family homes and 107 of which would be mixed income rental housing. The Plan clearly delineates streets, buildings, uses, common spaces and parking lots. This plan is not located within a qualified census tract. The Community Builders, Inc. Village at Hospital Hill, Northampton, Massachusetts Scoring Guidelines Low Soft Costs and Developer's Fee 6/6 points Low Soft Costs: Soft Costs represent less than 15% of the Total Replacement Cost, therefore 3/3 points are expected in this category. Developer Fee: The Developer Fee represents less than 10% of the Total Replacement Cost, therefore 3/3 points are expected in this category. Please note that, in addition to MassHousing's required deferral of 25% of the developer fee, TCB is also deferring a fee equal to the amount'of the operating deficit reserve. Both will be unavailable for payment for at least 5 years. The net paid fee is only $869,000 or less than 8% of the Total Replacement Cost. MBE/WBE Membership on the Development Team 3/6 points The project architect, Dietz & Company Architects, is certified as a Minority/Women's Business Enterprise SOMWBA . Non-profit Sponsorship: 6/6 points The Sponsor/Developer organization, The Community Builders, Inc. is a 501(c)(3) corporation. Attached please find our Certificate of Exemption in Exhibit 15A: Qualified Non-profit Certification. The Community Builders, Inc. Village at Hospital Hill, Northampton, Massachusetts Scoring Guidelines ~J Special Needs Groups as intended Consumers: 0/6 In accordance with the requirements of the LDA, TCB will reserve 12 units in the development for the mentally ill (30%); however, these are not enough to qualify for points in this category. Inclusion of Market Rate Units in the Project: 0/6 points This project only has 8 market rate units and does not qualify for the additional point. Location in a Community with less than 10% Subsidized Stock: 0/6 points According to DHCD's Subsidized Housing Inventory, updated as of August 17, 2006, Northampton currently has 11.84% of its housing stock as affordable. Conformance with Section 42 Code Preferences 6/6 points Extended Term of Affordability: TCB commits to maintaining the tax credit units for a 40-year period. Lowest Income Population to be Served: TCB will rent 4 units or 10% of the tax credit eligible units to residents that have incomes equal to less than 30% of the area median income. This qualifies for points in this category Projects Located in Qualified Census Tracts: The Village at Hospital Hill census tract is 8219, which is not a QCT based on 2006 determinations. Emphasis on Environmentally Friendly Design and Enhanced Accessibility 16/16 Points Walls: The exterior walls will be 2x6 framing, 16" o.c., filled with a blown-in-blanket cellulose system. This system, although officially having no greater R-value than fiberglass (3.5 per inch), insulates better, provides better draft reduction, sound reduction and allows for better moisture management than the equivalent thickness of fiberglass batt insulation. Our total R-value for exterior walls will be approximately R- 21, when adding R-values for insulation, sheathing, gypsum board and dead air space. The Community Builders, Inc. Village at Hospital Hill, Northampton, Massachusetts Scoring Guidelines Foundation Walls: Our project includes only slab on grade units. No:.. basements are planned. Slab-On-Grade Floor: We are planning to use 2" of polystyrene insulation at all slab perimeters. This will result in a continuous thermal break and an R-11 at the perimeter of the slab. We are also planning to use 2" of polystyrene insulation under all first floor slabs, throughout. This will result in a continuous thermal break and an R-11 under the slab. Roof: We have specified 12" of blown cellulose above the ceiling of the top floor of each building. This is equivalent to an R-42. Settling will typically occur over time. We are therefore assuming an R-value of R-40. Air Infiltration: A continuous air infiltration barrier will be installed on each building. All joints and penetrations to the exterior or into unheated space will be sealed with foam to help ensure air-tightness. In conjunction with the blown-in cellulose insulation system, we expect blower door testing results to show that these buildings are extremely tight, as do all of our projects which are built to meet or exceed EnergyStar standards. 2. Efficient Building Systems: Each unit will have a gas-fired modulating boiler which serves to provide both heat and heat hot water. These compact units are located in a separate mechanical room in each unit. They are compact, low- maintenance and long-lasting. They are sealed combustion units and require only one building penetration to provide them with both combustion air and exhaust. These units are very efficient, rated approximately 90% efficient. Thermostats will be installed with an upper limit set to 75 degrees Farenheit. No central air conditioning is provided. 3. Healthy Indoor Air Quality: All kitchen exhaust fans will be ducted directly to the outside. Only no-VOC paints have been specified for this project. Materials that are low-VOC and formaldehyde-free will be specified wherever possible. An example of the products we will be using is Medite, an extremely durable, water and mold-resistant, formaldehyde- free engineered wood product with recycled content, that will be used for interior window sills. The Community Builders, Inc. Village at Hospital Hill, Northampton, Massachusetts Scoring Guidelines - We will be providing ventilation for all of the units by -using a continuous use-rated bathroom exhaust fan on a timer that will provide ventilation throughout the day, as well as when the bathroom is in use. Enhanced Accessibility: 5% (a total of two units in a 40 unit project) of the units will be Group 2 units. 2 1/2% (a total of one unit in a 40 unit project) of the units will be units outfitted with devices for the vision or hearing impaired. All Group 2 units will have two accessible means of egress. Proximity to Transit 0/6 points Although there are currently plans to have bus service located within a few blocks of this site, currently there is no bus stop within %z mile of the site. Fair Housing 6/6 points The Northampton area, generally, is well below 15% of the poverty rate, this census tract is listed as having 8.7%. The same mix of units was recently rented up across the street using the same marketing plan described in Exhibit 7 and twenty-three percent of the occupants are non-white, higher than Northampton's overall 10% non-white population. The Community Builders, Inc. ~P~ One Stop2000 Affordable Housing Finance Application [Version 1.181 Page 1 n Gr 1-1 Section 1 - -PROJECT DESCRIPTION Name and Address of Project 1 . Project Name: M-03 e at Hospital Hill Phase II 1 a . Application Completed By: ommunity Buillders, Inc. - Thomas P. Kegelman lb Original Application Date: Application Revision Date: 9/5/2006 2 . Project Address: Northampton State Hospital - Route 66 3 . Neighborhood NSH, Census Tract 8219 4 . City/ Town Northampton MA 01060 (state) (zip code) 5 . County HAMPSHIRE 6 I Scattered sites 7 . Is this a qualified census tract? No Enter a census tract 8219.00 T 8 . Difficult to develop area o QCT information last updated on: 4/10/2006 Development Plan 9 Develo ment T e (Please check all that apply.) Yes New construction No Acquisition, substantial rehab of existing housing No Acquisition, moderate rehab of existing housing No Acquisition, minimal or no rehab of existing housing No Adaptive re-use of non-residential structure 10 . Proposed Housing Type Rental. (except SRO or Assisted Living, see below) 11 . Project Description: Number of buildings: 6 The Village at Hospital Hill Phase H Rental will create 40 units of affordable rental housing: 19-1BRs; 19-2BRs; 2-3BRs. This is one phase in a mixed use redevelopment of the Northampton State Hospital. The master plan includes 207 rental and homeownership units with 476,000 sq. ft. of retail and commercial space. The re-use of an existing State property, close to an urban center, with large commercial component, along a major transportation route, surrounded by open space and populated by households with a 12 . Development Schedule: Original Revised Optional user comments Application Date 9-4-03 Construction Loan Closing _ 6-30-04 6-30-07 Initial Loan Closing QMI only) Construction Start 12-30-04 7-1-07 50% Construction Completion 6-30-05 1-31-08 Construction Completion 12-30-05 7-1-08 First Certificate of Occupancy 10-30-05 4-1-08 Final Certificate of Occupant 12-30-05 7-1-08 Sustained Occupancy 2-28-06 12-31-08 Permanent Doan Closing village at Hospital hill rnase LL f pliucucwn. u.m. ~--r-v✓ - I © Massachusetts Housing Investment Corporation, 1993, 1994, 1995, 1999 in its own name and on behalf of MHFA, DHCD, and ---the-MHP-Fund.---All-rights-reserved._-.__ Section 1. Project Description Pake 2 13. Unit Mix: Low-Income Low-Income Low-Income Otherlncome Market Total Rentnl Accictod holnw Inn holnw KOOX /T1car_dorinodl Rntn r1.it~ SR-0. 0 0' edroo i 0 1 bedroom T 4 15 19 2 bedrooms 3 bedrooms 13 0 6 2 19 2 4 bedrooms ! T 0 , 1'6fat iliiits " f 4 0 28 0 8 40 Home Units* 0 *HOME units included in the above totals. Other Income=Below of median income 14 . Unit Size in square feet: Low-Income Low-Income Low-Income Otherlncome Market Average Rental A.ccicted helnw 5OV. helnw bt)O/ /llcor-dorinod) Rnto All r.-- SRO 0 bedroom-- 1 bedroom 2 bedrooms 3 bedrooms 4 bedrooms N/A N/A 600.0 600.0 600 1004.3 1004.3 1,004 1250.0 1250.0 1,250 N/A 15 . Number of bathrooms in each unit: SRO 0 bedroom 1 bedroom 2 bedrooms 3 bedrooms _ 4 bedrooms Low-Income Low-Income Low-Income Other Income Market Average Rentnl Accictod holnw incl. helnw KnOl. /lleor- f'rrH A R.,to All r -..,no N/A N/A 1.0 1.0 1.0 1.0 1.0 1.0 1.5 1.5 1.5 N 16. Funding Applied For: Please check all the funding that is being applied for at this time, with this application: DHCD Tax Credit Allocation Yes Category Production Category HOME Funding through DHCD Yes Massachusetts Housing Finance Agency (select all that apply Official Action Status No Construction Financing/Bridge Financing No Permanent Financing No Massachusetts Housing Partnership (MHP) Fund Permanent Rental Financing Program No Massachusetts Housing Investment Corporation (select all thMn Debt Financing Tax Credit Equity Investment Boston Department of Neighborhood Development (DND): No Other Yes Other Affordable Housing Trust Other Facilities Consolidation Fund Other Financing from MassDevelopment No at Hospital Kill Phase 11 Application Date: F') Section 1. 17 . Number of buildings planned: Total a. Single-Family 0 b. 2-4 Family _ 0 c. Townhouse 6 - d. Low/Mid rise 0 e. Huh-rise 0 f. Other 0 TOTAL 6 New Constntction 6 6 3 Rehabilitation 0 18 . Number of units: 401 1 40 19 . Gross Square Footage a. Residential 40,754 40,754 b. Commercial - 20 . Net Rentable Square Footage: Total Percent of Gross a. Residential 32,982 s.f. 81% b. Commercial s.f. N/A 21 . Number of handicapped accessible units Percent of total 22. Fire Code Type Wood frame 23 . Will building(s) include elevators? No 24. Are the following provided with the housing units: a. - Range? Yes b. Refrigerator? Yes c: Microwave? No d. Dishwasher? No e. Disposal? No f. Washer/Dryer Hookup? Yes g. Washer & Dryer? No It. Wall-to-wall Carpet? Yes i. Window Air Conditioner? No j. Central Air Conditioning?.. No 25 . Are the following included in the rent: a. Heat? No b. Domestic Electricity? No c. Cooking Fuel? No d. Hot Water? No e. Central A/C, if any? No Gas or electric Electric user comments rienced property managers on our staff prefer is stoves and VCT, as opposed to gas stoves and vinyl. Howerver, we would be happy to disucss options with DHCD. 26 . Type of heating fuel: Gas F77_ 62]. Enclosed: 27 . Total no. of parking spaces: 62 Outdoor: 7 28 . Number of parking spaces exclusive) for the use of tenants: a. Residential Total: 62 Outdoor: 62 Enclosed: b. Commercial Total: 0 Outdoor: Enclosed: Village at Hospital Hill Phase II Application Date: 9-4-03 Revised Date: YlV2 J116 13ecuon 29 . Will rehabilitation require the relocation of existing tenants? Not applicable- I 30. Scope of rehabilitation: Please describe the following (or type N/A). a. Major systems to be replaced: b. Substa c. Special 31 . Are energy conservation materials in excess of the Building Code? a. Insulation Yes roof=R40; walls =R21 b. Windows Yes R3.1 c. Heating system Yes 90% Information On Site And Existing Buildings Square Feet Acres 32 . Size of Site: 84,700 1.94 33 . Wetlands area: 34 . Buildable area: 84,700 1.94 Existing Conditions: 35 . What is the present use of the property? 36 . Number of existing structures: 37 . Gross s.f. of existing structures: 38 . If rehabilitation: 39 a. Square footage of existing commercial space: . b. Square footage currently occupied: 40. What are the surrounding land uses? 0 square feet 0 square feet Entire campus closed for over ten years. Surrounding structures will be renovated in subsequent phases or torn down and replaced by new housing or commercial space. Utilities: 41 . Are the followin utilities available on the site: a. Sanitary sewer? No Distance from site (ft.) 100 b. Storm sewer? No Distance from site (ft.) 600 c. Public water? Yes d. Electricity? Yes e. Gas? No Distance from site (ft.) 600 If any of the above are not available, is plan attached explaining how such service will be extended to the site? Yes Please attach as part of Exhibit 2 Village at Hospital Hill Phase 11 Application Date: 9-4-03 Revised Dai open sace, paving 40,754 number of units num. of bedrooms 1 0 0 0 0 a. Number of existing residential units/bedrooms: b. Number of units/bedrooms currently occupied: If site includes commercial space: Section 1. J Zoning: Please include information on the property zoning in Exhibit 3. This should include a zoning map, highlighting any special use or dimensional restrictions on the property. If the present zoning does not allow for the proposed use, please explain current status and how approvals .Gill be obtained 42 . Does the present zoning allow the proposed development? Yes" N:Q 43 . Have you applied for a zoning variance, change,special permit or subdivision? See Exh. 3 44 . Do you anticipate applying for a comprehensive permit under Chapter 77 No Site Control: 45 . What form of site control do you have? Option 46 Include copies of the appropriate site control documents as part of Exhibit 4. Please provide details about y our site control agre a. Name of Seller: b. Principals of seller corporation: c. Type of Agreement: d. Agreement Date: e. Expiration Date: f. Purchase price if under agreement: g. Is there any identity of interest between buyer and seller? 47 . In the past three years, have there been any defaults on any mortgage on the property or any other forms of financial distress? No 48 . Are there any outstanding liens on the property?. No Amenities and Services: 49 . Please indicate distance from site and locate on city/town map (Exhibit 1). Distance a. Shopping facilities 1.00. miles b. Schools 2.00 miles c. Hospitals 2.00 miles d. Parks and recreational facilities 1.00 miles e. Police station 1.00 miles f. Fire station 2.00 miles g. Public transportation 0.50 miles h. Houses of worship 1.00 miles i. City/Town Hall 1.00 miles at Hospital Hill Phase 11 Date: 9-4-03 Revised '~;ectaon 1. b i Environmental Information d 50 . Is there any evidence of underground storage tanks or releases of oil No or hazardous materials, including hazardous wastes, on the site or within close proximity to the site? 51 . Has a Chapter 21E assessment been performed? Please include a copy as Exhibit 2 Yes 52 . Does the project consist of either: (a) new construction of more than No 100 units; or (b) substantial rehabilitation of more than 200 units, or where more than 10% new floor space is added? 53 . Does the building require lead paint abatement? No 54 . Does the building require asbestos abatement?. I No 55 . Do radon tests show radon levels exceeding four picocuries/liter? No 56 . Is there any evidence that the premises are insulated with urea No formaldehyde foam (UFFI)? 57 . Is the site located in an historic district, or contain buildings listed or No eligible for listing in the State Register of Historic Places? 58 . Are there any above ground storage containers with flammable or No explosive petroleum products or chemicals within 1/2 mile of the site? 59 . Is the site located in a floodplain or wetlands area? No 60 . Does the site contain endangered animal or plant species? No 61 . Is the site subject to noise impact from jet airports within five miles, major highways within 1,000 feet, or rail traffic within 3,000 feet? No Village at Hosnital Hill Phace 11 Annlicatinn Date: 9-4-03 Revised Date: One St_ op2000 Affordable Housing Finance Application [Version 1.1810 page 7 Section 2 DEVELOPMENT TEAM SUMMArx 1 62. Developer/Sponsor Type Limited Liability Company (LLC) 63 . Developer/Sponsor: Form of Legal Entity Legal Name Address Contact Person E-mail 64. Owner/Mortgagor: Legal Name Address Has this entity already been formed? Principals Principals Contact Person Telephone No. / Fax. No. E-mail 65 . General Partner: Legal Name Address Has this entity already been formed? Principal (if corporate) Contact Person % of Ownership Telephone No. / Fax. No. E-mail 66 . General Partner: Legal Name Address Has this entity already been for ed? Principal (if corporate) Contact Person % of Ownership Telephone No. / Fax. No. E-mail 501 © (3) The Community Builders, Inc. 322 Main Street Springfield, MA 01105 Thomas P. Kegelman 413-737-207 413-731-9790 tkegelman@tcbinc.org Village at Hospital Hill II, LLC c/o The Community Builders, Inc. 322 Main Street, Springfield, MA 01105 Yes Soc. Sec. or Tax ID # 26-0088275 Thomas P. Kegelman 413-737-0207 413-731-9790 tkegelmanatcbinc.org TCB Village at Hospital Hill II, Inc. c/o The Community Builders, Inc. 322 Main Street, Springfield, MA 01105 Yes Soc. Sec. or Tax ID # 26-0088270 Thomas P. Kegelman 413-737-0207 413-731-9790 tkeoelman@tcbinc.orq Village at Hospital Hill Phase II Application Date: Nectton a. t)evetopment 7 eam a'ummary 67. Development Consultant: Legal Name Address Contact Person Telephone No. / Fax. No. E-mail 68 . Contractor: Name Address Fed Tax ID # Contact Person Telephone No. / Fax. No. E-mail 69 . Architect: Name Address Contact Person Telephone No. / Fax. No. E-mail 70. Management Agent: Name Address Contact Person Telephone No. / Fax. No. E-mail 71 . Attorney (Real Estate): Name Address Contact Person Telephone No. / Fax. No. E-mail 72. Attorney (Tax): Name Address Contact Person Telephone No. / Fax. No. E-mail 73 . Syndicator: Name Address Contact Person Telephone No. / Fax. No. E-mail ar To be determined Dietz & Company Architects, Inc. 17 Hampden Street Springfield, MA 01103 Marc Sternick 413-733-6798 413-732-4385 m ares(o)dietzarch. com The Community Builders, Inc. 322 Main Street Springfield, MA 01105 Patrice Leonard 413-737-0207 413-731-9790 pleonard(a tcbinc.orq The Community Builders, Inc. 95 Berkeley Street Boston, MA 02116 Tom Davis 617-695-9595 617-695-9483 tdavis(Qtcbinc.oM Palmer and Dodge Steve Paul 617-695-9595 617-695-9483 The Community Builders, Inc. 95 Berkeley Street, Boston, MA 02116 Jerome Garciano 617-695-9595 617-695-9205 Village at Hospital Hill Phase 11 Application Date: 9-4-03 Revised Date: Section 2. Development Team 74. Guarantor: Name Address Contact Person Telephone No. / Fax. No. E-mail 75 . Service Provider or Coordinator: Name Address Contact Person Telephone No. / Fax. No. E-mail 76 . Marketing Agent: Name Address Contact Person Telephone No. / Fax. No. E-mail 77 . Other role Name Address Contact Person ..Telephone No. / Fax. No. E-mail 78.1- Other role Name Address Contact Person Telephone No. / Fax. No. E-mail 9 Department of Mental Health PO Box 389 Northampton, MA 01061 David Modzelewski 413-587-6200 413-587-6204 Same as 79 . Is there any identity of interest between any members of the development team? Yes >ee below. 80. Please describe the reiationsmp or me aevetopmem enuty tv spoiiSvnug uigaLuLaLivii15. IO LUG entity newly-formed or to-be-formed? Is it a single-purpose corporation? How will the parent corporation provide support to this entity? Include an organizational chart showing other affiliates of the parent corporation, as appropriate, and prmcipais or eacn. TCB will be the developer and property manager. TCB has created an LLC and a managing member of the newly created LLC which will be the owner and borrower. Hospital Hill Development, LLC, of which TCB is the minority member, is the owner of the entire site and has entered into an Option with TCB to acquire the specific Phase II parcel which is the subject of this application. at Hospital Hill Phase II Application Date: 9-4-03 Revised Date: One Stop2000 Affordable Housing Finance Application [Version 1.1810 Page 10 Section 3 SOURCES AND USES OF FUNDS Private Equity: 81 . Developer's Cash Equity 82 . Tax Credit Equity (net amount) (See line 360, Section 5, page 18.) 83 . 0 $ 84 . Other Source: Deferred Dev Fee Public Equity: 85 . HOME Funds, as Grant $ 86 . Grant: $ 87 . Grant: $ 88 . Total Public Equity $0 Subordinate Debt (see definition): Amount 89 . 90 . 91 . 92 . 93 . 94 . $100 9,742 9.796 user calculations Rate Amortiz. Term Home Funds-DHCD, as Subordinate Debt $715,000 5.21 % n/a 30 Source: State HOME Home Funds-Local, as Subordinate Debt $1,666,701 5.21% n/a 30 Source: State FCF Subordinate Debt $1,000,000 5.21% n/a 30 Source: State Trust Funds Subordinate Debt $75,000 0.00% n/a 30 Source: CDBG TCB Note Subordinate Debt $1,475,000 1.00% n/a 30 Source: PDF Total Subordinate Debt $4,931,701 Permanent Debt Senior : Amount 6 . MHFA-----:-_ MHFA Program 1 $1,400,000 96 . _MHFA-__--_-_ MHFA Program 2 $ % 17 . MHP Fund Permanent Loan _ i8 . Other Permanent Senior Mortgage $ $ % % Source_ )9 . Other Permanent Senior Mortgage - Is % Source: I I 0 ..Total, Permanent Senior Debt $1,400,000 1 ..Total. Permanent Sources $11,111,339 Construction Period Financing: Amount Rate 2 . Construction Loan $3,202,578 Source: PCI Repaid at: Com letion (event) 3 . Other Interim Loan $o Source: Repaid at: (event) 4 . Syndication Bridge Loan $0 % Source Repaid at: (event) 8 Override Amortiz. Term d?1P 0.1 yrs. yrs. 1% 1 Term 7.00% 12.0 mos. Village at Hospital Hill Phase 11 Application Date: 9-4-03 Revised Date: 91512006 SEP. 06 ' 06 (WED) 07:54 6178312104 PAGE. 1 - - VILLAGE AT HOSPITAL-HILL PHASE 2 g Mo 0)nfnrcii), ~M•fhrr, e, fht, host r f1rt0/f Frmwl«dy;r. RAF rryWfn~cff,m i If\ iYircclC.'onr:intetion: ~en~~f~,N«rnwr~.x.:mnn.•«,ldnw.nmrh4•r--prwe~w , 105 Who rc tire;! the estimatcs'1 Kenneth R Hoffman C.WC Builders Inc. P, to, 167 108 rQ4 l l0 111 112 113 114 115 116 117 118 119 126 121 122 123 17.4 125 126 1?.7 128 129 1st) 131 132 133 134 135 136 137 138 139 144 1,11 142 1'13 144 145 141; 147 148 149 ISO I51 152 133 154 I55 IS6 157 158 159 160 161 P P~ 1 . 'AM, ~ .~Ipnaue•o Basis rut e5ti llalles? Pmliminaryplan; and if=;and histogcalcost databaso 0V 744o trcm Amount J.>r,~r,rinnnn f 3 Concrete $316,179 Foundations slobs 4 Masonry none 5 Metals $19,708 balcony mils 6 Rough Culpontry $1,602,620 ['mining, sheathing, siding, shingle roots I 6 finish Carpentry $196,226 Sills, sllcivcs,misc trim & millwork 7 Waterproofing $51,546 Inciudessculunts 7 Insulation $64,9T9 Exterior walls, roofs, etC . 7 pooling 52100 membranes at miso flan areas 7 Sheet Metal and Flashing $32,178 flutters & dow-pouts 7 Exterior Sitting in rough carp i)oors $215,971 ipciudcs frames, hardware 8 Windows 9:147,165 fil7er$lass windows i K Class $48,399 sliding ghms and balcony bouts 9 Lath & Plaster none none 9 Drywall $954,456 fnoludm mettll surds dt' taping 9 •t'Ile work 9 Aeoustic•,ul 9 Woad mooring 9 Resilient Flooring 9 Carpet 9 Patim& Decorating Ira Specialtica 1 i Sincial Fquiptnent 11 Cabinets I Appliances 12 Winds & Shades 13 Modular/Kanufactured 13 Special C:onvtruLtion 14 Elevators or conveying 5yst. 15 Pllimbing & Hot Water 15 1 feat & Ventilation 15 Air Conditioning 15 FIII! Protection 16 Electrical Aceeagoiy Rtilidin8s other/misc subtptat Structural 2 Unit WA 2 Site !Utilities 2 Roads & Walks 2 Site htipttwcment 2 lawns & Planting 2 Unotechnical Conditions 2 Environmental Rcmediation 2 ikrnoiilion 2 Unusual Site Cnrtd fiubtotsl Site Work Total improvements 1 Cn v=d Ctntdit;nng Subtotal t llw*:rs0Yi:lrCad 1 Builders Nofrt TOTAL C Ilcmd prpnimms Permit r=s Total CosUsquarc foot: none twlle none none not'ui none $78,407 Sheetvinyl, vinyl baso. slaif coverings $94,749 Unit carpeting $252,300 All surl:tCes, intolrior 8c exterior $54,840 'toilet accessories. slgnaleV, lnilitlx)~C•S,CtC. non;" none $146,369 Includes vlnithCs, Cotultcrtops 9ki5,309 typical kitchens $12,807 Blinds at all openings none none none routki none none 9;iti1,OS3 includes roughing mid fixturm $463,695 baseboard ntdiatiott system none none $118,684 Complete I00%-.prinklercd. $491,453 Includes Fin: Alarm. nonc none $14,000 Wireless Internet Network, installed try others $5,714,922 $196,656 Cuts, tills, gravel bases, etc $183,769 Drain, Sewer, water, Piro, Lim. $82,593 Now paving, walks $45,860 Site light inp•,,ind mi ie fmprvirim $56,389 lawns & plantings none none none nano now I,anC none none $565,267 $6,280,189 $376,911 $6,657,000 $133, i 40 $399,420 $7,i8yr560.~ $73,897 $7,263,438 t378.23 Re:7de,ithd Cost/s.f.: 9178,23 Section 3. Sources and Uses of Funds 12 Development Budget: Total Residential Commercial 161. Acquisition: Land $720,000 $720,000 162. Acquisition: Building ,3 . Acquisition Subtotal $720,000 $720,000 $0 164. Direct Construction Budg $7,263,458 $7,263,458 165. Construction Contingenc $360,673 $360,673 166. Subtotal: Construction $7,624,131 $7,624,131 $0 General Development Costs: 167. Architecture 168. Survey and P 169. Clerk of the 170. Environment; 171. Bond Premiu 172. Legal 173. Title and Rec 174. Accounting 175. Marketing an 176 Real Estate T T, $10,000 $10,000 177. Insurance 178 Relocation 179. Appraisal 180. Security 181. Construction 182. Inspecting En 183. Fees to: 184. Fees to: 185. MIP 186. Credit Enhan 187. Letter of Cred '8 . Other Financi A Development 190. Other: 191. Other: 192. Soft Cost Con 193. Subtotal: Ge Comments line & Engineering $655,110 $655,110 ermits $10,000 $10,000 Works $90,000 $90,000 I Engineer $15,000 $15,000 m $0 $150,000 $150,000 ording $20,000 $20,000 Cost Cert. $12,000 $12,000 d Rent Up $16,000 $16,000 $75,000 $75,000 $0 $16,000 $16,000 $2,000 $2,000 Loan Interest $60,000 $60,000 gineer $0 Contt Loan $48,760 $48,760 Perm Loan $40,400 $40,400 $5,250 $5,250 ement Fees $0 it Fees $0 na Fees $32,000 $32,000 Consultant $0 LIHTC Fees $20,558 $20,558 General Fina $84,600 $84,600 Initial MIP and Other Costs ingency $69,904 $69,904 5.1 % of soft costs n. Dev. $1,432,582 $1,432,582 $0 & c t 194. Subtotal: Acquis., Cons $9,776,713 $9,776,713 $0 and Gen. Dev. 195. Capitalized Reserves 196. Developer Overhead 197. Developer Fee 198. Total Development Cost $11,111,339 $11,111,339 $0 199. TDC, Net $10,935,898 $10,935,898 $0 TDC per unit $277,783 TDC, Net per unit $273,397 r-A 1 $175,441 Operating Res. aid as dev. fee and loaned back to project $0 $1,159,185 $1,334,626 Includes MHFA-r uired deferral of 25% of fee or 289,79 Village at Hospital Hill Phase 11 Application Date: 9-4-03 Revised Date: 9/512006 Additional Detail on Development Pro-Forma: 200. Gross Syndication Investment Off-Budget Costs: Syndication Costs: t . Syndication Legal ..,12 . Syndication Fees 203. Syndication Consultants 204. Bridge Financing Costs 205. Investor Servicing (capitalized) 206. Other Syndication Expenses 207. Total Syndication Expense 208. Current Reserve Balance Reserves (capitalized): 209. Development Reserves 210. Initial Rent-Up Reserves 211 . Operating Reserves 212. Net Worth Account 213 . Other Capitalized Reserves 214. Subtotal: Capitalized Reserves 215 . Letter of Credit Requirements 216 . Total of the Above Check: Line 214 is the same as line 195. $175,441 $175,441 $175,441 Please Answer The Following Dev. Reserves Initial Rent-Up Oµ Reserws Net worth other Letter of Credit Who requires the reserves? Investor/Lender Who administers the reserves? Investor/Lender When and how are they used?. Deficits Under what circumstances can hey be released? Upon approval of investor/Lender Unit Sales (For Sale Projects Only): 217. Gross Sales From Units 218 . -Cost of Sales (Commissions, etch 219. Net Receipt from Sales Debt Service Requirements: 220. Minimum Debt Service Coverage i.l 221 . Is this Project subject to HUD Subsidy Layering Review? Yes Village at Hospital Hill Phase 11 Application Date: 9-4-03 Revised Date: 91512006 Section 4 OPERATING PRO-FORMA O eratin Income Rent Schedule: contract utility Total No. of 222 . Low-Income (Rental Assisted): Rent Allowance Gross Rent Units SRO $0 0 0 bedroom $0 0 1 bedroom $271 $133 $404 4 2 bedrooms $0 0 3 bedrooms $0 0 4 bedrooms $0 0 223 LOW-Inconle (below 50%): SRO so 0 0 bedroom so 0 1 bedroom so 0 2 bedrooms so 0 3 bedrooms so 1 0, 4 bedrooms $0 0 224 Low-Income (below 60%): SRO $0 0 0 bedroom $0 0 1 bedroom 1 $602 1 $133 $735 15' 2 bedrooms $800 $168 $968 13 _ 3 bedrooms $914 $204 $1,118 0 4 bedrooms so 0 25 Other Income (User-defined) SRO $0 o 0 bedroom $0 0 1 bedroom $0 0 2 bedrooms $0 0 3 bedrooms $0 0 4 bedrooms 26 . Market Rate (unrestricted occupancy): SRO 0 2 bedrooms $1,250 6 3 bedrooms $1,600 2 L 1) ~V Other Operating Income Assumptions: 229 . Laundry Income (annual): 230. Other Income:a. 0_7 c. d. e. f. Vacancy Allowance: 231. Low-Income (Rental Assistance) 232 . Low-Income (below 50%) 233 . Low-Income (below 60%) 234 . Other Income (User-defined) 235 . Market Rate 236. Commercial Trending Assumptions for Rents: 237. Low-Income (Rental Assistance) 238. Low-Income (below 50%) 239. Low-Income (below 60%) 240 . Other Income (User-defined) 241 . Market Rate 242 . Commercial Space Rental 243 . Laundry Income 244 a Other Income - t Other Income - c Other Income - d Other Income - e Other Income - f Other Income - Operating Subsidy and Capitalized O 245. Subsidy Source I 246. Subsidy Source H 247. Capitalized Operating Reserve Amount: 5.0% 5.0% 5.0% 7.0% user eatcutarions V-1 1) V- 3 v-, 4_S Year. 6-20 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2:0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% 2.0% Reserves: 248 . Yearly Draws on Subsidies and Reserves: Subsidy Subsidy r e TT Year 1 $8,162 $ Year 2 $8,326 $ Year3 $8,492 $ Year4 $8662 $ Year5 $8,835 $ Year'6 $9,012 $ Year? $9,192 $ Year 8 $9,376 $ Year 9 $9,564 $ Year 10 $9,755 $ Year 11 $9,950 $ Year 12 $10,149 $ Year 13 $10,352 $ Year 14 $10,559 $ Year 15 $10,770 $ Year 16 $10,986 $ Year 17 $11,205 $ Year 18 $11,429 I S Year 19 $11,658 $ Year 20 $11,891 $ Year 21 $12,129 i s 249 . Annual Operating Income (year 1) $361,383 Draw on vper. reserve Village at Hospital Hill Phase II Application Date: 9-4-03 Annual Operating Exp.: Total Residential Commercial Comments 250 . Management Fee $18,000 $18,000 251 252 253 254. 255. 256 . 257 . 258 . 259 . 260 . 261 . 262 . 263 . Payroll, Administrative $17,143 $17,143 Payroll Taxes & Benefits, Admin. $4,846 $4,846 Legal $1,143 $1,143 Audit $5,857 $5,857 Marketing $4,343 $4,343 Telephone $3,429 $3,429 Office Supplies $2,857 $2,857 Accounting & Data Processing $1,157 $1,157 Investor Servicing $1,059 $1,059 DHCD Monitoring Fee $1,200 $1,200 Other: Travel & Education $800 $800 Other: Misc. Administrative E $571 $571 Subtotal: Administrative $44,405 $44,405 $0 264. Payroll, Maintenance $22,571 $22,571 265. Payroll Taxes & Benefits, Admin. $7,457 $7,457 266. Janitorial Materials $971 $971 267 . Landscaping $0 268 . Decorating (inter. only) $2,114 $2,114 269 . Repairs (inter. & ext.) $21,029 $21,029 270 . Elevator Maintenance $0 271 . Trash Removal $4,114 $4,114 272 . Snow Removal $5,886 $5,886 273 . Extermination $971 $971 274 . Recreation $0 275. Other: $0 276 . Subtotal: Maintenance $65,114 $65.114 277 . Resident Services $0 t 278 . Security 279. Electricity 280. Natural Gas 281. Oil 282. Water & Sewer 283. Subtotal: Utilities 284. Replacement Reserve 285 . Operating Reserve 286. Real Estate Taxes. 287. Other Taxes 288. Insurance 289. M1P 290 . Other: Landowner Assoc Fee 291. Subtotal:Taxes, Insurance 292. TOTAL EXPENSES Village at Hospital Hill Phase II $0 18,693 $53,379 $53,379 $0 $232,870 $232,870 $0 Date: 91612006 $13,000 $13,000 $0 Other Operating Expense Assumptions Trending Assumptions for Expenses 293. Sewer & Water 294. Real Estate Taxes 295. All Other Operating Expenses Reserve Requirements: 296 . Re lacement Reserve Re ui ment $325.00 per unit per year 297 . O , ratin.. Reserve Re uirement per unit per year .............................9............. Debt Service: v v,„« s Y d_S Years 6-20 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% Annual 298. MHFA MHFAPronm 1 $116,812 299 . MHFA MHFA Prom 2 N/A . . 300 . MHP Fund Permanent Loan N/A . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 301 . Other Permanent Senior Mort a e N/A Source: N/A 302. Other Permanent Senior Mortgage N/A Source: N/A 303. Total Debt Service (Annual) $116,812 ~ $128,513 (in year one) 304. Net .Operatin.Income 1.10 (iayearoae) 305. Debt Service Coverage 1 Affordabilitv: Income limits and Maximum Allowable Rents 306 . County HAMPSHIRE MSA Springfield, MA This MSA does not match the county you have chosen 307. Maximum Allowed Rents, by Income, by Unit Size: Income Limits last updated on r 4/10/2006 Maximum Income Maximum Rent (calculated from HUD income data) sno/ lno/ O/ 500/. 60% 0% SRO 0 bedroom 1 bedroom 2 bedrooms 3 bedrooms 4 bedrooms 22,000 26,400 0 550 660 0 22,000 26,4.00 0 $550 660 0 23,600 28,300 0 590 708 $0 28,300 33,950 0 708 849 0 - 32,700 39,250 0 818 981 50 $36,506- $43,800 0 913 1,095 $0 Area median income for a family of 8o8. H.U.D. "Fair Market Rents" (Maximum : 0 bedroom 529 1 bedroom 629 2 bedrooms 799 3 bedrooms 956 4 bedrooms $1,110 5 bedrooms 1,277 at FMR Information lastupdated on 410/2006 Date. 9-4-03 Revised Date: 91612006 Operations before this transaction: Operations after: Current Annualized Future Market Type Number . Rent Income Number Rents Rent GPR 309. SRO 0 0 0 0 0 0 310. 0 bedroom 0 0 0 0 0 0 311. 1 bedroom 19 0 0 19 0 0 312. 2 bedrooms 19 0 0 19 0 0 313. 3 bedrooms 2 0 0 2 0 0 314. 4 bedrooms 0 0 0 0 0 0 315. Gross Potential Rental Income 0 0 316. Vacancy 0% 0 Vacancy 6% -21,294 317. Other Income 0 Other Income 0 318. Effective Gross Income 0 Effective Gross Income -21,294 Operating Expenses 319. Management fee 320. Administration 321. Maintance/Operations 322. Resident Services 323. Security 324. Utilities 325. Replacement Reserve 326. Operating Reserve 327. Real Esate Taxes 328. Insurance 329. Total Expenses 330 . Net Operating Income 331 . Transaction Description: Year Reason % Change Year 01 1 18,000- 0 44,405 0 65,114 0 4,800 0 0 0 34,171 0 13,000 0 0 0 28,233 0 25,146 0 232,870 0 Net Operating Income -254,163 user ~l at One Stop2000 Affordable Housing Finance Application [Version 1.18] 0 Section 5 LOW INCOME HOUSING TAX-CREDITS No Not Applicable Percent of Project Which Qualifies for Tax Credit 332. Low-Income Units 32 Total Units: 40 80.0 0 333. Percent of Units ° 334. Low-Income Square Feet 24,456 s.f. Total Area: 32,982 s.f. 335 . Percent of Area 74.1% 336 . Applicable Percentage 74.1 % (This is the lower of lines 333 and 335 above.) 337. Is the project utilizing tax-exempt financing? No 338. Does the project qualify for an acquisition credit? No 339. Does the rehabilitation qualify for a 9% rather than 4% credit? No 340 How much financing is nonqualified (federally subsidized?) $ 341. What grant funds must be subtracted from acquisition basis? $ . 342. What grant funds must be subtracted from rehabilitation basis? $ 343. Will the project have a minimum of 20% of units for households earning less than 50% of median, or 40% for less than 60% of median? 40% Of Units Historic Tax Credit: 344. Does the project qualify for historic tax credits? What are the rehabilitation costs which are not qualified for historic credits? Project Qualification for 130%: 346. Is the project located in a "qualified census tract" or in a "difficult to develop" area? Acquisition Calculation of Maximum Tax Credit Amount Credit 347. Total Eligible Development Costs $0 348. Less: Portion of Grants Allocated to Basis $0 349. Less: 20% Historic Rehab Credit Basis Reduction $0 350. Less: Nonqualified source of financing $0 351. Subtotal: Eligible Basis $0 352. "Hard to develop" area 100% 353. Percent Low-Income 74.1% 354 . Applicable Rate 3.51% 355 . Maximum Annual Tax Credit Amount $0 356 . Total Annual Tax Credit Amount 357 . Estimated Net LIHTC Syndication Yield $ 0.95. rate per $ 358 . Est. Net Historic Tax Credit Syndication Yield. $ - rate per $ 359. Total Estimated Net Tax Credit Syndication Yield (based on above) 360. Applicant's Estimate of Net Tax Credit Equity. -No $612,829 $5,791,235 $0 $5,791,235 Page 18 Rehabilitation Credit $10,098,045 $0 $0 $10,098,045 100% 74.1% 8.19% $612,829 $4,489,742 (from line 82) There is a significant difference between items 358 and 359 above. Please verify your numbers [Note: This page represents a rough estimate of low income credits for which this project may be eligible. It does not represent a final determination.7 Village at Hospital Hill Phase 11 Application Date: 9-4-03 Revised Date: YINZ Section 5. Low Income Housing Tax Credits 19 361. Acquisition: Land 362. Acquisition: Building 363. Acquisition Subtotal 364. Direct Construction Budget 365. Construction Contingency 366. Subtotal: Construction General Development Costs: 367. Architecture & Engineering 368. Survey and Permits 369. Clerk of the Works 370. Environmental Engineer 371. Bond Premium 372. Legal* 373. Title and Recording 374. Accounting & Cost Certificat. 375 . Marketing and Rent Up* 376 . Real Estate Taxes* 377 . Insurance 378. Relocation 379. Appraisal 380 . Security 381 . Construction Loan Interest* 382 . Inspecting Engineer 383 . Financing Fees* Const Loan 84 . Financing Fees* Perm Loan 385. MIP 386 . Credit Enhancement Fees 387 . Letter of Credit Fees* 388 . Other Financing Fees* 389 . Development Consultant 390 . Other* 391 . Other* 392 . Soft Cost Contingency* 393 . Subtotal: Gen. Dev. 394 . Subtotal: Acquis., Const., and Gen. Dev. 395. Developer Overhead 396. Developer Fee/Profit 397. Capitalized Reserves 398. Total Development Cost 399. Total Net Development Cost $69,904 25% $0 $52,428 $17,476 $1,432,582 $0 $1,139,288 $277,294 r $9,776,71,3 $0 $1,334,626 $0 $11,111 339 $10,935,898 400 . Total Eligible Tax Credit Basis $10,098,045 $0 $8,763,419 $997,294 $0 $0 $0 $0 $1,334,626 $0 $0 $0 $0 $0 $10,098,045 * Some or all of these costs will typically be allocated to intangible assets or expensed. Village at Hospital Hill Phase Total Residential $720,000 $0 $720,000 $7,263,458 $360,673 $7,624,131 655,110 $10,000 $90,000 $15.000 110 $0 750 $12,000 0% $0 $12,000 $0 $16,000 0% $0 $10,000 0% $0 $10,000 $0 $75,000 0% $0 $75,000 $0 1 $16,0001 0%1 $0 $16,0001 $0 $2,000 0% $0 $2,000 $0 25 100 100 1 .hn Percentage of Costs Not in Depreciable Acquisition Basis Credit Basis Rehabilitation Not In Credit Basis Basis j $0 $o $0 $0 $0 $720,000 $0 $7,263,458 $0 $360,673 $0 $7,624131 $0 10()0/.1 .1R0 i To i In LIHTC Fees $20,558 100% $0 $0 $20,558 General Financi $84,600 100% $0 $0 $84760 0 Application Date: 9-4-03 Revised Date: 91512 r. One Stop2000 Affordable Housing Finance Application [Version 1.181 Section 6 CHECKLIST FOR EXHIBITS Page 20 T_. L:L:, 1 Cl:,- T._t t:..«. Detailed site ma Included Photographs of the site Included Directions to the site Included Site location map _ Included Exhibit 2. Environmental Information: Chapter 21E Assessment Included Environmental Notification Form Included Lead paint inspection Not Included Lead paint abatement plan Not Included inspection report Asbestos Not Included _ Asbestos abatement plan Not Included Letter from local or Mass. Historical Commission Not Included _ Map of wetlands or floodplain areas Not Included Determination by Local Conservation Commission and/or Dept_ of Environmental Protection - Included Other environmental information Exhibit 3. Evidence of Zoning _ Included Exhibit 4. Evidence of Site Control Included Exhibit 5. Evidence of Local Support Included Exhibit 6. .Market Information and Acquisition Value Included Exhibit 7. 'Marketing Plan Included _ Exhibit 8. Affirmative Fair Marketing Plan Included _ Exhibit 9. Equal Opportunity Questionnaire Included Exhibit 10. Sales Prices and Affordability Not Included Exhibit 11. Construction Period Sources and Uses Included Exhibit 12. Tax-Exempt Project Information Included Exhibit 13. Relocation Plan Not Included Exhibit 14. Special Needs Service Plan Exhibit 15. Required Tax Credit Certifications Included Included Exhibit 16. Preliminary Plans and Specifications Sent Under Separate Cover Exhibit 16A. Accessiblity Information _ _ _ Exhibit 17. Commitment Drawings and Specifications Exhibit 18. Soil and/or Structural Report-__ _ Included Not Included Not Included C Village at Hospital Hill Phase 11 oecrion a c;necRnstrorCxhibits Please indicate whether the following Exhibits are included with this application. Exhibit 19. Energy Budget _ Not Included Exhibit 20. Construction Financing Included Exhibit 21. Permanent Financing Included Exhibit 22. Equity Financing Commitment Included Exhibit 23. Other Funding Commitments Included Exhibit 24. Rental Subsidies Included Exhibit 25. Developer Profile Included Exhibit 26. Mortgagor's Other Real Estate Included Exhibit 27. Architect's Resume Included Exhibit 28. Management Agent Profile Included Exhibit 29. General Contractor's Profile Included Exhibit 30. Developer Financial Statement and Credit Release Included Exhibit 31. Mortgagor Personal Financial Statement Not Included Exhibit 32. Individual Financial Profile Not Included Exhibit 33. General Contractor's Financial Capacity Included Additional Exhibits: 21 Exhibit No. Title: Exhibit No. Title: Exhibit No. Title: Exhibit No. Title: at Date: r ~ A-1 - Project Summa Information NOTE: Do not fill out this section. It is automatically filled in by program. P Project Name Villa e at Hospital Hill Phase II Developer The Community Builders, Inc. Number of Units 40 SRO 0 0 bedroom 0 1 bedroom 19 2 bedrooms 19 3 bedrooms 2 4 bedrooms 0 This is an application for: Sources of Funds: Developer's Equity 4 ax Credit Equity Public Equity Subordinate Debt Permanent Debt Total All Sources Acquisition Construction General Development Developer Overhead Developer Fee Capitalized Reserves Low-Income, Rental Assisted 4 Low-Income, Below 50% 0 Low-Income, Below 60% 28 Other Income (User-defined 0 Market Rate 8 DHCD Tax Credit Allocation HOME Funding through DHCD MHFA Official Action Status MHFA Construction Financing MHFA Permanent Financing MHP Fund Financing MHIC Construction Loan MHIC Tax Credit Equity Boston: DND Other Affordable Housing Other Facilities Consolidation Other Financing from Massdevelopment No Uses of Funds: $289,896 $4,489,742 $0 $4,931,701 $1,400,000 $11,111,339 Total All Uses Uses Exceed Sources by $0 Rent Levels: Low-Income, Rental Assisted Low-Income, Below 50% Low-Income, Below 60% Other Income (User-defined) Market Rate Average, All Units $271 N/A $694 N/A $1,338 $780 Annual Operating Income (year 1): Gross rental income (residential Vacancy (resid.) 5.69% Other Income (net of vacancies) Subtotal Operating Subsidies Draw on Operating Reserves Total Annual Income $374,514 $21,294 $0 $353,220 $8,162 $0 $361 383 Net Operating Income $128,513 Debt Service $116,812 Debt Service Coverage 1.10 at BK (aver. N/A 1.5 2.3 $1,159,185 $175,441 $11,111,339 SF aver. 600 N/A 788 N/A 1066 Annual Operating Expense (year 1): Management Fee Administrative Maintenance Res. Service, Security Utilities Repl. Reserve Oper. Reserve Taxes, Insurance Total Total per Unit $18, 000 $44, 405 $65, 114 $4,800 $34171 $13, 000 $0 $53, 379 $232 ,870 $5 822 9-9-03 9/6/2006 Rent Profile Analysis NOTE: Do not fill out this section. It is automatically filled in by nrnnram Contract Size of Units Rent Unit w-Income (Rental Assisted : SRO 0 N/A N/A 0 bedroom 1 bedroom 2 bedrooms 3 bedrooms 4 bedrooms No. of Gross Rent/ Rent per Bathrooms Maximum square. foot AT/A TT/A TT/A 0 N/A N/A N/A N/A N/A 4 $271 600 1 64.1% $0.43- 0 N/A N/A N/A N/A N/A 0 N/A N/A N/A N/A N/A 0 N/A N/A N/A N/A N/A v-Income (below 50%): SRO 0 bedroom 1 bedroom 2 bedrooms 3 bedrooms 4 bedrooms 0 N/A N/A N/A N/A N/A 0 N/A N/A N/A N/A N/A 0 N/A N/A N/A N/A N/A 0 N/A N/A N/A N/A N/A 0 N/A N/A N/A N/A N/A 0 N/A N/A N/A N/A N/A i-Income (below 60%): SRO 0 bedroom 1 bedroom 2 bedrooms 3 bedrooms 4 bedrooms 0 N/A N/A N/A N/A N/A 0 N/A N/A N/A N/A N/A 15 $602 600 1 103.9% $1.00 13 $800 1,004 1 114.0% $0.80 0 N/A N/A N/A N/A N/A 0 N/A N/A N/A N/A N/A x Income (User-defined SRO 0 bedroom 1 bedroom 0 2 bedrooms 0 3 bedrooms 0 4 bedrooms 0 ;et Rate (unrestricted occu anc : SRO 0 bedroom 1 bedroom 2 bedrooms 3 bedrooms 4 bedrooms at 0 N/A N/A N/A N/A N/A 0 N/A N/A N/A N/A N/A 0 N/A N/A N/A 0 N/A N/A N/A 0 N/A N/A N/A 6 $1250 1,004 1 2 $1600 1,250 1.5 0 N/A N/A N/A INIAM N/A N/A A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A $1.24 $1.28 N/A Date: uneStO zuuuA oraaoteHousingPinanceApplication version L.18 G ru ems,-~ 21-Year Operating Proforma Years 1-5 NOTE: Do not fill out this section. It is automatically filled in b program. _ Year I Year 2 _ Year 3 _ Year 4- Year S Calendar Year. 2008 2009 2010 2011 2012 COME: %,-'Low-Income, Rental Assisted Low-Income, Below 50% Low-Income, Below 60% Other income (User-defined) Market Rate Gross Potential Income Less vacancy Effective Gross Residential Income Commercial (includes parking) Less vacancy Net Commercial Income Effective Rental Income Other Income: Laundry Other Income: Other Income: C Other Income: C Other Income: C Other Income: C Other Income: C Total Gross Income Operating Subsidies Draw on Operating Reserves Total Effective Income EXPENSES: Management Fee Administrative jaintenance Resident Services Security Electrical Natural Gas Oil (heat) Water & Sewer Replacement Reserve Operating Reserve Real Estate Taxes Other Taxes Insurance MIP Other: Landowner Assoc Fee Total Operating Expenses $12,984 $13,244 $13,509 $13,779 $14,054 0 0 0 0 0 233,130 237,793 242P548 247,399 252,347 0 0 0 0 0 128,400 130,968 133,587 136,259 138,984 374,514 382,004 389,644 397 437 405,386 21,294 21,720 22,154 22,597 23,049 353,220 360,285 367,490 374,840 382,337 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 353,220 360,285 367p490 374,840 382,337 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 353,220 360,285 367 490 374,840 382,337 8,1 62 8,326 8 492 8,662 8,835 0 0 0 0 0 $361383 $368,610 $375,983 $383,502 $391,172 18,000 18,360 18,727 19,102 19,484 44,405 45 738 47,110 48 523 . 49,979 65,114 67,068 69,080 . 71,152 73,287 4,800 4,944 5,092 5,245 5,402 0 0 0 0 0 11,000 11,330 11,670 12,020 12,381 2,571 2,649 2,728 2,810 2,894 0 0 0 0 0 20,600 21,218 21,855 22,510 23,185 13,000 13,390 13,792 14,205 14,632 0 0 0 0 0 28,233 29,080 29,952 30,851 31,776 0 0 0 0 0. 18,693 19,254 19,832 20,427 21,040 5,241 5,221 5,200 7 5,17 5,152 1,212 1,248 1,286 1,324 1,364 $232,970 $239,499 S246.323 $253,346 $260 576 . NET OPERATING INCOME $128,513 $129,111 $129,666 $130,1561 $130,597 Debt Service Debt Service Coverage Project Cash Flow Required Debt Coverage (Gap)/Surplus for Cov. at $116812 $116812 $116812 $116812 $116812 1.10 1.11 1.11 1.11 1.12 $11,701 $12.299 S12.847 $13,344 $13,784 Date: 9-4-03 C-L) 21-Year Operating Proforma Years 6-10 NOTE: Do not fill out this section. It is automatically filled in by nroaram_ Calendar Year.- INCOME: Low-Income, Rental Assisted Low-Income, Below 50% Low-Income, Below 60% Other Income (User-defined) Market Rate Gross Potential Income Less vacancy Effective Gross Residential Income Commercial Income Less vacancy Net Commercial Income Effective Rental Income Laundry Income. Other Income: Other Income: Other Income: Other Income: Other Income: Other Income: Total Gross Income Operating Subsidies Draw on Operating Reserves Total Effective Income Year 6 2013 Year 7 Year 8 Year 9 Year 10 2014 2015 2016 2017 EXPENSES: Management Fee Administrative Maintenance Resident Services Security Electrical Natural Gas Oil (heat) Water & Sewer Replacement Reserve Operating Reserve Real Estate Taxes Other Taxes Insurance Mip Other: Landowner Assoc Fee Total Operating Expenses NET OPERATING INCOME Debt Service Debt Service Coverage Project Cash Flow Required Debt Coverage (Gap)/Surplus for Cov. $14,335 $14,622 $14915 $15,213 $15,51, 0 0 0 0 0 257,394 262,542 267,793 273,149 278,612 0 0 0 0 0 141,764 144,599 147,491 150,441 153,450 413 494 421,764 430,199 438 803 -447,579 23,510 23,980 24,460 24,949 25,448 389,984 397,783 405 739 413,854 422,131 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 389,984 397,783 405,739 413,854 422,131 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0. 0 0 0 0 0 0 0 0 0 0 0 389 984 397,783 405,739 413,854 422,131 9 012 9,192 9,376 9,5 64 9,755 0 0 0 0 0 $398,996 $406,976 $415,115 $423,417 $431,886 19,873 20,271 20 676 21,090 21,512 51,478 53 022 54,613 56 251 9190 75,485 77,750 8-0-1082 82,485 84 95~ 5,565 5,731 5 903 6,080 6,263--1 0 0 0 0 0 12,752 13,135 13,529 13,934 14,353 2,981 3 ,,070 3,163 3,257 3,355 0 0 0 0 0 23,881 24,597 25,335 -26-1095 26,878 15,071 15,523 15,988 16-468 16,962 0 0 0 0 0 32,729 33,711 34,723 35,764 36,837 0 0 0 0 0 21,671 22,321 22,990 23,680 24,391 5,126 5,097 5,065 5,031 4,994 1,405 1,447 1,491 1,535 1,581 $268,017 $275,676 $283,559 $291,673 $300,024, $130,979 $131,300 $131,556 $131,745 $131,862 $116,812 $116,812 $116 812 $116,812 $116,812 1.12 1.12 1.13 1.13 1.13 $14-167 $14 488 $14 744 $14 932 $15 049 Village at Hospital Bill Phase 11 Application Date: 9-4-03 Revised Date: 9/6/200 vnc < ~<.u v nJ w uuu<c «vuu <ng <•<r<uucc nyyucu<wr< ~ r crown a.<u~ v - - 21-Year Operating Proforma Years 11-15 'NOTE: Do not fill out this section. It is automatically filled in b program. Year 11 Year 12 Year 13 Year 14 Year 15 tR„ Calendar Year: 2018 2019 2020 2021 2022 1?VCOME• Low-income, Rental Assisted Low-Income, Below 50% Low-Income, Below 60% Other Income (User-defined) Market Rate Gross Potential Income Less vacancy Effective Gross Residential Income Commercial (includes parking) Less vacancy Net Commercial Income Effective Rental Income Other Income: Laundry Other Income: 0 Other Income: 0 Other Income: 0 Other Income: 0 Other Income: 0 Other Income: 0 Total Gross Income Operating Subsidies Draw on Operating Reserves Total Effective Income EXPENSES: Management Fee Administrative i aintenance Resident Services Security Electrical Natural Gas Oil (heat) Water & Sewer Replacement Reserve Operating Reserve Real Estate Taxes Other Taxes Insurance MIP Other: Landowner Assoc Fee Total Operating Expenses NET OPERATING INCOME Debt Service Debt Service Coverage Project Cash Flow Required Debt Coverage (Gap)/Surplus for Cov. $15,827 $16,144 $16,467 $16,796 $17,132 0 0 0 0 0 284,184 289,869 295,665 301,579 307,610 0 0 0 0 0 156,519 159,649 162,842 166,099 169,421 456,530 465,661 474,974 484,474 494,163 25,957 26,476 27,006 27,546 28,097 430,574 439,185 447,969 456,929 466,067 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 430,574 439,185 447,969 456,928 466,067 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 430,574 439,185 447,969 456,928 466,067 9,950 10 149 10.352 10,559 10,770 0 0 0 0 0 $440,523 $449,3341 $458,321 $467,487 $476,837 21,942 22,381 22,828 23,285 23,751 59,677 161,467 63,311 65,211 67,167 87,508 90 133 92,837 95,623 98,491 6,451 6,644 6,844 7,049 7,260 0 0 0 0 0 14,783 15,227 15,683 16,154 16,638 3,456 3,559 3,666 3,776 3,890 0 0 0 0 0 27,685 28,515 29,371 30,252 31,159 17,471 17,995 18,535 19,091 19,664 0 0 0 0 0 37,942 39,081 40,253 41,461 42,705 0 0 0 0 0 25,122 25,876 26,652 27,452 28,275 4,954 4,911 4,864 4,813 4 758 1,629 1,678 1,728 1,780 1,833 $308,620 $317,467 $326,573 $335,946 $345 592 $131,903 $131,867 $131,747 $131,542 $131,245 $116,812 $116,812 $116,812 $116,812 $116,812 1.13 1.13 1.13 1.13 1.12 $15091 $15054 $14.935 $14729 $14433 7e at Hospital Hill Phase 11 Application Date: 9-4-03 9/6/2006 21-Year Operating Proforma (Years 16-21 NOTE: Do not fill out this section. It is automatically filled in b program. Year 16 Year 17 Year 18 Year 19 Year 20 Year 21 Calendar Year.• 2023 2024 2025 2026 2027 2028 INCOME: Low-Income, Rent. Astd. $17,475 $17,824 $18181 $18544 $18915 $19 2914 Low-Income, Below 50 Low-Income, Below 60 Other Income (User-de Market Rate Gross Potential Income Less vacancy Eff. Gross Res. Income Commercial Income Less vacancy INet Commercial Income Effective Rental Income Other Income: Laundry„ Other Other Other Other Other Other Total Gross Income Operating Subsidies Draw on Operating Res. Total Effective Income % 0 1 0 0 0 0 0 VC 313,762 320,038 326,438 332,967 339,626 346,419 0 0 0 0 0 0 172,809 176,266 179,791 183,387 187,055 190,796 504.047 514,127 524 410 534 898 545,596 556,508 28,659 29 232 29,816 30,413 31,021 31,641 475,388 484,896 494,594 504,486 514,575 524,867 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 475,388 484,896 494,594 504,486 514,575 524,867 0 0. 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 475,388 484,896 494,594 504,486 514,575 24,867 10,986 11,205 11,429 11,658 11 891 12,129 0 0 0 0 0 0 486,374 $496,101 $506,023 $516,143 $526,466 0 0 0 0 0 $536,996 EXPENSES: Management Fee 24,226 24,710 25,204 25 708 26,223 26,747 Administrative 69 182 71 258 73 395 75,597 77,865 80,201 Maintenance 101,446 104,489 107,624 110,853 114,178 117 Resident Services 7.478 7.703 7 93a u 1 71 Q A17 Q ~~01 (Natural Gas 4,006 4,126 4,250 4,378 4,509 4,644 Oil (heat) 0 0 0 0 0 0 Water & Sewer 32,094 33,057 34,049 35,070 36 122 37,206 Replacement Reserve 20,254 20,861 21,487 22,132 22,796 23,479 Operating Reserve 0 0 0 0 0 0 Real Estate Taxes 43,986 45,305 46,664 48,064 49,506 50,991 Other Taxes 0 0 0 0 0 0 Insurance 29,124 29,997 30,897 31,824 32,779 33,762 MIP 4,699, 4,634 4,564 4,489 4,407 4,318 Other: Landowner Assoc 1,888 1,945 2,003 2,063 2,125 2,189 Total Operating Expens $355.520 $365,738 $376,254 $387,077 $398,215 $409,679 NET OPER. INC. $130,854 $130,363 $129,769 $129,067 $128,251 $127,317 Debt Service Debt Service Coverage ?roject Cash Flow $116,812 $116,812 $116,812 $116812 $116,812 16,812 1.12 1 1.12 ] 1.11 1.10 1.10 1.09 $14,042 $13-551 $12 957 $12 254 $11 439 $10,505 2equired Debt Coverage $128,4941 $128,494 $128,4941 $128,4941 $128,4941 $128494 I ;Crap)/Surplus for Cov. $2,360 $1,870 $1.276 5573 02431 (~1 1771 at Hospital 11111 Phase Lr Application Date: 9-4-03 Revised Date: O erating Expense Analysis NOTE: Do not fill out this section. It is automatically filled in by_program. Residential Residential Residential Commercial Commercial Total Per Unit Per S. F. Total Per S. F. gement Fee $18,000 $450.00 $0.4411 $0 N/A Payroll, Administrative Payroll Taxes & Benefits, Admin. Legal Audit Marketing Telephone Office Supplies Accounting & Data Processing Investor Servicing DHCD Monitoring Fee Other: Other: Subtotal: Administrative Payroll, Maintenance Payroll Taxes & Benefits, Admin. Janitorial Materials Landscaping Decorating (inter. only) Repairs (inter. & ext.) Elevator Maintenance Trash Removal Snow Removal Extermination ecreation *her. 4~, btotal: Maintenance Resident Services Security Electricity Natural Gas Oil Water & Sewer Subtotal: Utilities Replacement Reserve Operating Reserve Real Estate Taxes Other. Taxes Insurance MIP Other: Landowner Assoc Fee Subtotal:Taxes, Insurance TOTAL EXPENSES $17143 $428.57 $0.42 $0 N/A $4,846 $121.15 $0.12 $0 N/A $1143 $28.57 $0.03 $0 N/A $5,857 $146.43 $0.14 $0 N/A $4,343 $108.57 $0.11 $0 N/A $3,429 $85.71 $0.08 $0 N/A $2,857 $71.43 $0.07 $0 N/A $1157 $28.93 $0.03 $0 N/A $1059 $26.48 $0.03 $0 N/A $1200 $30.00 $0'.03 $0 N/A $800 $20.00 $0.02 $0 N/A $571 $14.29 $0.01 1 1 $0 N/A $44405 $1110.13 $1.09 1 1 $0 N/A $22,571 $564.28 $0.55 $0 N/A $7,457 $186.43 $0.18 $0 N/A $971 $24.29 $0.02 $0 N/A $0 $0.00 $0.00 $0 N/A $2114 $52.86 $0.05 $0 N/A $21029 $525.72 $0.52 $0 N/A $0 $0.00 $0.00 $0 N/A $4114 $102.86 $0.10 $0 N/A $5,886 $147.14 $0.14 $0 N/A $971 $24.29 $0.02 $0 N/A $0 $0.00 $0.00 $0 N/A $0 $0.00 $0.00 $0 N/A $65114 $1627.86 $1.601 1 $0 N/A $11000 $275.00 $0.27 $0 N/A $2,571 $64.29 $0.06 $0 N/A $0 $0.00 $0.00 $0 N/A $20,600 $515.00 $0.51 $0 N/A $34171 $854.29 $0.841 1 $0 N/A $13,000 $325.00 $0.32 $0 N/A $0 $0.00 $0.0011 $0 N/A $28,233 $705.82 $0.69 $0 N/A $0 $0.00 $0.00 $0 N/A $18,693 $467.33 $0.46 $0 N/A $5,241 $131.02 $0.13 $0 N/A $1,212 $30.30 $0.03 $0 N/A $53 379 $1,334.47 $1.31 $0 N/A $232870 $5,821.74 $5.71 $0 N/A at Hospital Hill Phase 11 Application Date: 9-9-03 Date: Development Cost Analysis NOTE: Do not fill out this section. It is automatically filled in by program. Residential Residential Residential Commercial Commercial Total Per Unit Per S. F. Total Per S. F. Acquisition: Land $720,000 $18,000 $17.67 $0 Acquisition: Building Acquisition Subtotal Direct Construction Budget Construction Contingency Subtotal: Construction $0 $0 $0.00 $0 N/A $720 000 $18 000 $17.67 1 1 - $0 N/A $7,263,458 $181,586 1 $178.23 $0 N/A $360,673 $9,0171 $8.851 1 $0 N/A $7,624 131 $190,603 $187.08 $0 N/A General Development Costs: Architecture & Engineering $655,110 $16,378 $16.07 $0 N/A Survey and Permits $10,000 $250 $0.25 $0 N/A Clerk of the Works $90,000 $2,250 $2.21 $0 N/A Environmental Engineer $15,000 $375 $0.37 $0 N/A Bond Premium $0 $0 $0.00 $0 N/A Legal $150,000 $3,750 $3.68 $0 N/A Title and Recording $20,000 $500 $0.49 $0 N/A Accounting & Cost Certificat. $12,000 $300 $0.29 $0 N/A Marketing and Rent Up $16,000 $400 $0.39 $0 N/A Real Estate Taxes $10,000 $250 $0.25 $0 N/A Insurance $75,000 $1,875 $1.84 $0 N/A Relocation $0 $0 $0.00 $0 N/A Appraisal $16000 $400 $0.39 $0 N/A Security $2,000 $50 $0.05 $0 N/A Construction Loan Interest $60,000 $1,500 $1.47 $0 N/A Inspecting Engineer $0 $0 $0.00 $0 N/A Fees to:. Const Loan $48,760 $1,219 $1.20 $0 N/A Fees to: Perm Loan $40,400 $1,010 $0.99 $0 N/A MIP $5,250 $131 $0.13 $0 N/A Credit Enhancement Fees $0 $0 $0.00 $0 N/A Letter of Credit Fees Other Financing Fees Development Consultant Other. Other: Soft Cost Contingency Subtotal: Gen. Dev. $0 $0 $0.00 $0 N/A $32,000 $800 $0.79 $0 N/A $0 $0 $0.00 $0 N/A $20.558 $514 $0.50 $0 N/A $84600 $2,115 $2.08 $0 N/A $69,904 $1,748 $1.72 $0 N/A $1,432 582 $35,815 -$35.-1-5-11 $0 N/A Subtotal: Acquis., Const., $9,776,713 $244,418 $239.9011 $0 N/A and Gen. Dev. Capitalized Reserves Developer Overhead $0 $0 $0.00 $0 N/A Developer Fee $33_`e $32.75 N/A Total Development Cost $11,111,339 $277,783 $272.6411 $0 N/A Total Net* Development Cost $10,935,898 $273,397 $268.3411 $0 N/A (*Does not include any capitalized reserves nor any developers .fees or overhead which are contributed or loaned to the project.) $0 $0 $0.001 1 $0 N/A .$1,334 626 $0 0 y One Stop2000 Affordable Housing Finance Application [Version 1.171 © Page 22 Section 7 SIGNATURE PAGE I Village at Hospital Hill - Phase! rr - - - - - - Project History The Commonwealth of Massachusetts and City of Northampton has been working on a plan to redevelop the Northampton State Hospital (NSH) for nearly 25 years. From its inception in the 1850s until the last patients departed in 1993, NSH was a major treatment center for the mentally ill. At its peals, the campus consisted of 538 acres of land and approximately 970,000 square feet of buildings, housed approximately 2,000 patients, and employed some 500 persons. Since the closure of the facility, the City of Northampton and the Commonwealth have sought to determine how the site and its buildings might best be reused. The final closure of the facility tookplace over a twelve-year period. In 1981, the closure began with the shut down of the Old Main complex. At that time, the City, the Department of Mental Health (DMH), and Division of Capital Asset Management (DCAM) (formerly known as the Division of Capital Planning and Operations) started examining the future of surplus land and buildings at the State Hospital campus. During an extensive public process many alternatives were considered. These included a no build scenario, a mixed-use village on the historical campus, a new jail, a recreation area, suburban style housing, and a combination of open space and industrial development on the agricultural parcels. The planning process became more complex as additional facilities and uses on the site were closed. By 1993, the closure of the facility was nearly complete as the last patients departed. At that: time, the City of Northampton developed a concept of a planned village program for the site. Through legislative initiative (Chapter 86 of 1994), reuse planning proceeded, with the establishment of a Citizen's Advisory Committee (CAC), evaluation of historic issues, ' implementation of site cleanup requirements, and master planning. In 1995, a Memorandum of Agreement (MOA) was entered into with the Massachusetts Historical Commission (MHQ providing for a sequenced evaluation of reuse opportunities prior to demolitions taking place. Opportunities for the conveyance of peripheral lands to be used for agricultural, recreational, conservation, affordable housing, and municipal purposes were identified, and a process for the transfer of the remaining land (126 acres) and approximately 880,000 square feet of building space to a private developer or developers was laid out by DCAM and the CAC. In October of 1997, the Commonwealth of Massachusetts, through DCAM, issued a Request for Proposals (RFP) for a Master Plan to redevelop the primary campus. The RFP was developed with the input and approval of the CAC, a collaboration of local agencies and organizations from the City. The CAC is chaired by the Mayor of Northampton. The goals for the redevelopment _I included in the RFP included the following: Job Creation and Economic Growth, Mixed-Income Housing, Job and Housing for Clients of DMH, Historic Preservation, Open Space Preservation, and Community Participation. I~ A redevelopment team led by TCB was selected through the competitive RFP process. Working li with the CAC, City of Northampton, and state officials, TCB developed a Master Plan that has been accepted as the basis for redevelopment. The Master Plan envisions a full build-out of approximately 476,000 s.f. of mixed-use commercial space, comprising a mix of retail, office, light industrial, and research & development/multi media space as well as space for live-work studios, a child care center, a possible community center/ museum area and the development of a 60-80 unit assisted living facility for seniors. The Master Plan also includes 207 residential units, II, 100 of which would be single-family homes and 107 of which would be mixed income rental housing. Overall, fifty percent of the residential units will be designated as affordable. A total of units will be reserved for low- and III \ ~ 75% of the rental units and 25% of the homeownership of the units will be rented or sold at market rates. moderate-income households. The balance r In view of the size and complexity of the site, the Master Plan contemplates that build-out will occur over a period of several years. Redevelopment will proceed incrementally, with infrastructural needs being met in pace with the growth of demand. MassDevelopment, which is structured to facilitate state support of redevelopment undertakings, has assumed responsibility for the site from DCAM. They are also principally responsible for all demolition, environmental remediation, infrastructure, as well as all commercial development. TCB will retain responsibility for the residential piece. The redevelopment of the NSH represents an enormous opportunity. The central campus sits on a beautiful piece of land, high above Northampton, with extraordinary views of Northampton and the Connecticut River Valley, with the Holyoke Range on the horizon. NSH has the potential to be an engine for economic development, centrally located in Massachusetts with good access to the major economic centers of the New England states. Further, it will create a vibrant and attractive mixed-use community with jobs, housing, and modest amounts of convenience retail, in close proximity to the educational, cultural, and civic resources of Northampton. BENNETT FRANKLIN 413-526-0822 p•2 Feb 19 03 12:26p BENNETT FRANKLIN REAL ESTATE SERVICES January 24, 2003 Mr. Charlie Adams Development Project Manager The Community Builders, Inc. 95 Berkley Street, Suite 500 Boston, Massachusetts 02116-6240 Re: Update of Apartment Rental Rate Market Study Village at Hospital Hill (Former Northampton State Hospital) West: Street, Northampton, MA 01105 Bennett Franklin Report #408.A Dear Mr. Adams: Per our conversation I have reviewed the market information that was presented in my Apartment Rental Rate Market Study (August 29, 2002) pertaining to potential rental rates, assuming heat and hot water are to be provided to the tenants. Based upon my updated research and analysis of the market for the subject apartments it is my opinion that the proposed subject apartment units can continue demand monthly rental rates similar to that noted in the original Apartment Rental Rate Market Study. Thus, (assuming the tenant pays electric only with heat and hot water provided by the landlord) the monthly rental rates at the subject property are as follows: It is my opinion that with an appropriate market period and pre-lease period during constriction the proposed apartment units could obtain a stabilized vacancy rate of 0-5% within a six month period following completion of the proposed construction June 30, 2004. Thank you.Cor contacting us for this assignment. If you have any questions concerning our valuation and analysis we may be reached at (413) 526-0800. Sincerely, Jerome C. Franklin MA Cert. Gen. RE. Appraiser Lic.4 5219 ` J SUITE 203 MEADOW PLACE, 200 NORTH MAIN STREET,, EAST LONGMEADOW, MA 01028 (413) 526-0800 FAX (413) 526-0822 www.bennettfranklin.com I~ I \ r _ - 1 77 I. „ DTAIL n I UMARY 0''F PROPEt A J'a 3 ..1 F „ c. Village at Hospital Hill (Former Northampton State Hospital) li Location. West Street, Northampton, Massachusetts ton Assessors Map 31C' tham N or p Portion of Lot 17 on n Northampton Assessors Map 38A 86 o Portion of Lot Commonwealth of Massachusetts & ownership:: The Community Builders, Inc. Apartment Rental Rate Market Study Type of Report Effective Date Market Conditions: August 28, 2002 f the Nurses Home and South t o Land Area:. o pmen Adequate for redevel Employees Home with 33 apartments, new construction of 19 . apartments and required parking and. landscaping, etc PV - Planned Village Zoning The property is currently improved with two. multi-story buildings Existing Improvements: that have been vacant for an extended period time and are: in poor ' condition: There is old paving and overgrown vegetation.- Proposed Improvements: To redevelop the Nurses Home into 22 apartments, the South me into 11 apartments; construct an additional 19 H o Employees new apartment units and provide updated parking and in g. landscap C I I l II al#408/ 4 Bennett Franklin Apprais Page i om etenc Statement I ~ C p Y Based on our knowledge of the commercial real estate market and our traini ana d with at on, we have the knowledge and experience to complete this assignment Practice (USPAP)... competency provision.in the Uniforrrr Standards of Professional Contingent and Limiting Conditions We assume no responsibility for matters legal in nature, nor do we render any opinion as to the title'which is assumed to be marketable. Any sketches, plats, maps, or other exhibits in this report are included to assist the reader in visualizingthe property and we assume no responsibility for their,accuracy. We have made no. visualizing, survey of the property.: We are not required to give testimony or appear in court because of having u ideri his rep thereof t, i th reference to the.propei-ty in question, unless arrangements have been previo y writing. We assume that there are'no hidden or unapparent conditions of the property, bsoiI for such ' structures which would render it more or less valuable. We assume no responsibility conditions or for engineering which might be. required to discover such factors 'I We have assumed that the subject site will or has met all acceptable standards with regard to any me- existin g Federal' or. State hazardous waste material -laws. Information, estimates and opinions furnished to us and contained. in this r report no were res of i ed from sources considered reliable and believed to be true and correct. However, p for accuracy can be assumed by us: vem The distribution of rental rate provided in this report between land an impand and is applies only under the existing program of utilization. The separate valuation for l. improvements must not be used in conjunction with any' other report and are invalid if, so used The Americans With Disabilities Act of 1990 requires, in some instances, retrofitting regarding tt cost of buildings to maximize accessibility by persons with disabilities.. Assumptions . compliance by the owner (s) with this civil rights act, which became effective on January 26, 1992 have, not been made in arriving :at the opinion of value set forth herein'. Please. contact the I undersigned in this.regard if such additional work will be required for presentp rpose art of the contents of this report, or copy thereof, shall be used for any Neither all nor any p Purpose by anyone but the client without our previous written consent advertising, n the client; renor lations, t be conveyed by anyone including the client, to the public throng an g public articular) as news; sales,, or,otljer media without the written consent and approval of the author, p y to conclusions,'the'identity of the writer, or a firm.with which he is connected... Bennett Franklin Appraisal # 408 / Fage. 1 - I ( `In addition to these 'great high-tech programs, Smith College recently became the. first and only women's,college in the country to offer an, engineering' degree, while Springfield Techd boasts a I Community College offers computer hardware facilities-0 f university-level qualrty an seven-floor biological sciences building. Geographically in the center of the northeast, Western Massachusetts enjoys a major fiber=optics interconnection running both northlsouth and east/west; serving as a primary telecommunications access hub for eight.states. Greater Springfield, the major metro. area in the region, is presently home to, more than a.dozen Points of Presence for major network and long-distance carriers, providing robust, redundant and geographically. distributed access to worldwide communication. Businesses here have valuable front-end telecom access; excellent interconnectivity and lower connection costs than many areas. in the United States: The Western Massachusetts area contains attractive, established neighborhoods; great schools; excellent medical care; short, traffic-free commutes and a choice of rural; urban, suburban or college-town living..` Homes cost an average of 40%less than those in Boston, yet.Western Massachusetts is only. 75 minutes from Boston and 2.1/2 hours from New York City. Western Massachusetts offers an appealing and diverse mix of amenities and activities forlpeople who enjoy rural, suburban or urban lifestyles. Among the many cultural activities available are. City Stage, the, Springfield Library.and Museums at the Quadrangle, Symphony Hall, Historic Deerfield; Springfield Arrriory National Historic Site„the Yiddish Book. Center and more Tourist attractions include Yankee Candle Co., Six Flags of New England, The Big E; Eastern., The Naismith Memorial Basketball Hall of :States Exposition, Bright Nights at Forest Park, - Fame, the Zoo at Forest Park, Magic Wings Butterfly. Conservatory, Paradise City Arts Festival, Cruises on the Connecticut River and Heritage State Park, which includes a Children's Museum, Holyoke Merry-Go-Round and the Volleyball Hall of Fame. New England's second largest shopping mall is.located in Holyoke (The Holyoke Mall at Ingleside) at the junction of I-91` and the'Mass Pike I-90. Massachusetts' third largest city. Springfield; with a population of 150,000, is located in the area.. The average work coriunute is less than 30 minutes. The'Connecticut River is New England's longest waterway; and the 1I- gi'onal headquarters of the U.S. Fish and Wildlife. agency is located here. stateNortheast re f Northampton City' Data Northampton is bordered by the Town. of Hatfield to the north, the City of Holyoke and Town of Easthampton to the south, and the Towns of Hadley and Easthampton to the east and,west, i respectively. The city is approximately '100 miles from Boston, and 35 miles north of Hartford.., The city is easily accessible via three interchanges from Interstates 91 within its borders. Interstate 91 networks the city northerly to southern Vermont, and southerly to major CT. The Massachusetts Turnpike has an commercial regions of Springfield, MA and Hartford, interchange in West Springfield, approximately. 13 miles from Northampton center, which also - provides access from that interstate to the city. _ I aisal #408 / Pa a 14 Bennett Franklin Ap~pr , g I j i A ma showiri Northam ton is below. e i 1 118 NET; ,,North Farms 0109laurel Park amPlaza nary Island Le eds - ° _ . A' . ...A7:Ci r cur t!'~.AHampshire Hadl well Is d mzlllIul~ FIOFCnce 1 F7 ca~a.,t ; . 47 N • mt u4tnrt' last Hadley ' ~ isate._ iei r'lu}+ P o. Horthampton~ PROPERTY l1aY Stat~*q 3 `d a- . o uitho a am n City Hall 118 ShePherd Islnd. ° - ~ n• r5os ~ sTsd?yHill 0u ~'.a q 18 I+tYHaw b 1u02' Ir Me (aaer taeladt 4 ~wiL• Gad adows Pine Grove oI,tL Helyc& 984 J~ g .Qhuin 10 Westham . oit as o Ao.,,,,,,, 00 apynchoh ad s °Holyoke Range i ! 5 Jd2ns Piazza.. T3ie olbudviNe ~slae «,e s . Y ropylae rar"' 4k i k ..f 80 I:>lttid A .o 47 _ g10 . 1z 1~N'~'kU'a ti. aE~h h~ill3'! 118 4er _~c es.m.Easthampton,Townhalt e oldFlu13+0 aP 1r z yt,I nsram :llrt aMhOmptOn F lala . F i>7<7ym our r 'ttf , • Dt8 . a*,Id Inn'] 52 y ° •R,S&Ah Hadley 1I41 ' pub,, A'~'1•msgr' piths Feny t`aFmTettHill 1' _.e as YslT3r.Y Gfa ' e Prser>,r.' • • ~$r ~y~.. Pa APts ~v- ! ~ - r-. ®1999 DeLamne. Staet Atlss USA ' ' _ . . The City of Northampton contains 35.62 square".miles of land. Northampton had a 2000 -I (estimated) population of 28,978 residents, according to.the U.S. Census which, is an decrease of 1.1.% from the 1990 census of 29,289 residents. Essentially, the population has -been unchanged he reater area result inNorthampton The five educational institutions >n t g over the last decade. having a transient population, and a low population growth rate. According to the most recent U.S. Census data available (1989), the per capita income in Northampton is $14,623, which , is " : average compared to surrounding' communities The major employer in Northampton is Smith College. Smith College and the other area colleges noted provide solicitationfor the downtown business district's retail and'restaurant trades: The.lodging industry in the area is stable as well, primarily as a result of the presence of the colleges in the. area. As a function of the city's presence in a diversity of markets, and the demand for commercial goods and services posed by Smith College and the other colleges and university in the region, Northampton has one of the lowest unemployment rates in the region and State. According to the Massachusetts Department of Labor and Training statistics : from July 2002, 3.2% of the city's labor force was unemployed. This rate is superior to the Hampshire County unemployment rate and State of MA rate as of the same time of 3.3.% and 5.0%, respectively : The unemployment rate in the city .has been stable over the.last five years, and has generally been superior to the . average MSA a>id State unemployment rates over a similar time frame. Bennett Franklin Appraisal # 4081 Page 15 I l i The region in general is noted for having an established transportation network in place which has contributed to an established position in. distribution and light industrial sectors and in the last five years the market has witnessed significant new development in the modern industrial locations with; inventory available for expansion. The locations in the region with very good. highway access and visibility have shown expansion in the light industrial, distribution, and commercial sectors: Virtually all of the commercial sectors are.represented within.the city. Downtown Northampton. has historically held a strong commercial presence. The downtown area offers adequate parking and is very accessible to pedestrians. 'Investment in real estate in downtown Northampton has been steady over the recent years with renovations to the majority of the buildings along Main. Street in the last five years. The popularity of the downtown area has resulted in sale and rental values for properties in downtown that generally exceed the greater three-county market. Retail T vacancy in downtown has been less than 5% for the last five years. The office market appears to be stable at this time. There is not.a.large`supply of modern, multi tenanted office space in Northampton: Based on our research, there is.approximately 140,000 square feet of modern office space in the market, plus some, modern' space that is contained. .within owner-occupied condominium units. The investment office properties that do exist in.the market reveal overall vacancy in the range of 5% at this time, which is consistent with vacancy trends over the last five years. In addition to the more modern professional office .space in the market, many of the multi=story mixed-use buildings on Main Street. have. Class B and C space in second and third floors This type of space houses a large number of crafts persons, alternative medicine practitioners, and general office. users. The residential market is, and has historically been, very stable. This is partly a function of the demand generated by Smith College, however, demand is also stimulated by :the attraction of downtown as a residential location, and the fact that the city is a. center for the cultural and artisan community. In conclusion, the City of Northampton provides a prominent`commercial and residential center, which has good marketability to the greater area, The city's ability to, participate in a diversity of commercial markets is. positive and economic conditions in Northampton are expected to remain stable into the future. VJe anticipate that Northampton will continue to experience.growth n the commercial, industrial and residential markets. The location and access characteristics. of the community will continue to provide for. major industrial users, however.this is somewhat tempered by limited availability of land and therefore we feel that the real estate development segment of the economy will continue to perform without significant swings in supply and demand. - L, Bennett Franklin Appraisal ,g 408 /Page 1.6 i We have looked at the State of Massachusetts Department of Transportation traffic counts along C)J West Street (SR 66) which were estimated at 3,900+ vehicles per day in 2000. Due to the average/good accessibility and moderate traffic the neighborhood is considered to have average visibility. Proposed Development of Village at Hospital Hill ` The master plan for.the "mixed-use village," calls for 207 units of new housing; an assisted-living .,facility; ample open space; and over. a 15-year period development of.400,0.00 square feet of office, light industrial and retail space. Business activity has been projected to generate 750 jobs, 1 S percent to be earmarked for mental patients and former mental patients. There will be a.60-80 unit assisted living. facility, approx. 200 units of mixed income rental. and ownership housing, public walking trails, potentially a museum, meeting space, and child care. center. The development process has been broken down into Phases A through D Phase A ("The Commercial Zone")will be the first piece of property to be developed. It is located at the southern edge of the hospital grounds-40.4 acres of land, including the laundry and power plant. The laundry will be saved for use, but the rest of the space will be converted to light industrial development-137,000 squarefeetof commercial property, and 2 single family homes. Currently Kollmorgen has plans to construct a 100,000-square-foot building as part of Phase A and an associated 300-space parking lot acros's.from his home on Earle, Street. Initial plans of Phase A called for five smaller industrial buildings that would have had parking in the rear. Phase B. ("The Mixed Use District") is located in the southern-most. portion.of the. main hospital campus. The male staff dormitory and the male nurse dorm will be historically renovated into office space and apartments. This phase is a mix of commercial and residential properties-20,000 . square feet light, industrial, 12,000 square feet mixed use, 71 multi family housing units, 20 single family homes, and an assisted living facility° of 60-80 units Phase C ("The Business Park") includes the Memorial Complex--most of.which will be demolished, except possibly the G Building Cafeteria and the more attractive wards with a view at the top of the hill. The area is designated as entirely commercial-188,000 square feet of office . and light industrial space; 11,000 squarefeet of mixed use, and 22000 square feet of retail. A landscaped plaza is planned for the land facing Prince Street. Phase D, ("The Main Residential District.") is the 58 acres of land surrounding the Main Building of the hospital. Development of Phase D depends on the demolition of the building, hazardous . material reinediation, and new road, sewer, water, and power infrastructure. As currently planned, the area will consist of 86,000 square feet of industrial and mixed-use commercial space, 36 multifamily.units, and 58 single family homes. However; the development of Phase D is anticipated to take up to 15 years to complete.. The Community Builders Inc. & Massachusetts Development Bennett Franklin Appraisal # 408 / Page 18 ~J _j I . I 'Jill fI3~ 1 I ! _ N 04- : _ . . j S14'r RtE~ N t. 4•r ti Zoning and Conformity: The land is zoned Planned, Village (PV) which encompasses the former. State Hospital Site. This zoning allows for the proposed residential development in combination with retail and light industrial. We have provideda copy of the appropriate portion of the noted zoning map as follows: , ~I - I Bennett Franklin Appraisal 9 408 / Page 21 _ j i I Nurses Home Year Built Constructed in 1928 according to State records.. Building Area Approximately 30,000 square feet of gross building area. Building The building is four story with a portion of the ground floor below grade. The Improvements building is of a Colonial Revival style that was designed by Gordon Robb. The building is of masonry and steel "frame construction with a pitched roof. There are windows on each side of the building and a few entrance doors accessing the interior of the building. There are two common stairways and one elevator in this building. The interior of the building will include 22 apartments, tenant storage areas and common areas. There will be 14 one bedroom units with an average gross living area per unit of.660 square. feet. There will be 8 two -bedroom units with an ' average gross living area per unit.of 660. square. feet. Two of the two-bedroom units are townhouse style. with the remaining apartments being garden style. The apartments and common areas will have an interior. buildout. of carpet,and vinyl covered: floors, drywall: and decorative exposed brick walls, drywall ceilings with new energy; efficient fluorescent and incandescent lighting. The bathrooms will. include' a toilet, vanity/sink and tub/shower enclosures.. Building Each apartment will be heated and cooled with a gas fired HVAC units. Each. Mechanicals . apartment will have an electric or gas fired water heaters. The electrical service to the apartments will be 100. amp service. Quality / Condition The entire building (interior and exterior) will be renovated and updated to current standards. Upon completionof the renovations the interior and exterior of the building' and apartments will be of overall average/good quality construction and in very; good/new condition. The.kitchens will include cabinets and counters, refrigerators; ranges.: i Bennett Franklin Appraiml.# 408 / Page 26 i ~I II i i 'I South Employees Home Year Built Constructed circa 1930 according to State` records., Building Area Approximately 14,364 square.feet of gross building area. Building The building is four story with a portion of the ground floor below grade. The Improvements building is of a Colonial Revival style that was designed by Gordon Robb. The ` - building is of masonry and steel frame construction with a pitched roof. There are windows on each side of the building and a few of entrance doors accessing the interior of the building.. There are two.common stairways in this building. - The interior of the building will include 1'1 apartment and common areas. There will be 2 one-bedroom units with an average gross living area per unit of 427 . square feet. 8two-bedroom units with an average gross living area per unit of:, 1,079 square feet and l three.-bedroom unit with a gross living area of 1,775 square feet.. All, of the units are townhouse style apartments. The apartments and common areas will have an interior buildout of carpet and vinyl covered floors, drywall and decorative exposed brick walls, drywall ceilings with new energy efficientfluorescent and incandescent lighting. The bathrooms will include a toilet, vanity/sink and tub/shower enclosures.,' The kitchens will include cabinets and counters, refrigerators, ranges.. Building ` Each apartment will be heated and -cooled with a gas `fired 'HVAC:units.: Each Nechanicals apartment will have an electric or gas fired water heaters. The electrical service ` to the apartments will be 100 amp service, Quality. / Condition The entire building (interior and exterior) will be renovated and updated to current standards. Upon:. completion of the renovations the interior and exterior of the building and. apartments will be of overall. average/good quality construction and in very good/new condition. i i Bennett Franklin Appraisal # 408 [Page.: 30 I~ . New Construction Townhouse South Employees Home Year Built' - 2003-2004 . , Building Area Approximately 26;198 square feet of gross building area. Building There will be 4 four-unit buildings and 1 three-unit building for a total of 19 Improvements units. Each building will be a Colonial style and will be of masonry and wood frame construction with a pitched roof. The three-unit building will be three. stories while the four-unit buildings will be two stories. There will be windows on each side of the building and a couple of entrance doors accessing the interior of the units. There will be no common areas in these buildings. , One of the three bedroom units will be a garden style with the remaining units being townhouse style. The,units will have an average gross living area of 1,379 square feet. ` The apartments will have an interior buildout of carpet and vinyl covered floors, drywall walls, drywall ceilings with new energy efficient fluorescent and incandescent lighting. The bathrooms will include a toilet; vanity/sink and tub/shower enclosures. The kitchens will include cabinets and counters, refrigerators, ranges. Building Each apartment will be heated and cooled with a gas fired HVAC units. Each . Mechanicals ment will have an electric or gas fired water heaters. The electrical service apart C~ to the apartments will be 100 amp service. Condition Quality The buildings will be of new construction, will be of overall average/good ualit q Y construction and in very good/new condition. Bennett Franklin Appraisal # 40 / Page ;34. I i Typical floor plan.of the new construction apartments ,.I I I Monthly Rental Utilities Included Occupancy Overall Rate Comparison 1 Bedroom $650 -$1.060 None 95+% Superior 2 Bedroom $1025 - $1500 None 95+O o Superior ' This property is located at the intersection of South Street (SR10) and Elm Street (SR9). The area of this sale is considered downtown and is a heavily traveled area with average/good 1 accessibility. There are residential, commercial and institutional uses in the immediate ~J neighborhood of this sale. I Bennett Franklin Appraisal # 408 / Page 40 . Comparable A Monthly Rental Utilities Included Annual Overall Rate Occupancy Comparison 1 Bedroom $600 - $750 .None 95%+ Inferior ,a - This property is located along West Street (SR 66) approximately 0.25. miles west of the subject property. The area of this sale is considered just outside of.downtown and is a moderate to heavily traveled area with average/good accessibility and average visibility. There are residential, commercial and institutional uses in the immediate neighborhood of this sale. Bennett Franklin Appraisal # 408 / Page 41 C: Monthly Rental Utilities Included Occupancy -Overall Rate Comparison - l Bedroom $600-$700 None 95+% Inferior .2 Bedroom $800 None 95+% Inferior. This property is'located along Fruit Street near the intersection with Old. South Street. The area of this sale is considered dust outside of downtown and is a heavily travled area with. average/good accessibility and fair visibility. There are residential, commercial and institutional uses in the immediate neighborhood of this sale. Bennett Franklin Appraisal # 408 / Page 42 Comparable E Monthly Rental Utilities Included Occupancy' Overall Rate Comparison 1 Bedroom $625 None 95+% Inferior This property is located along Damon Road with I-91 to the rear/west of this site and the Connecticut River to the east.of the site across Damon Road. The area of this sale is considered outside of downtown and is a heavily traveled area with good accessibility and visibility. There are residential, commercial and institutional uses in the immediate neighborhood of this sale. These units are located above first floor commercial space. Bennett Franklin Appraisal 4 408 / Page 44 Monthly Rental Utilities Included Occupancy. Overall Rate Comparison 1,Bedroom $775+ Heat & Hot Water 100% Superior. 2 Bedroom $1,025+ Heat & Hot Water 100% Superior 3 Bedroom $1;250+ Heat & Hot Water 100% Superior This property is located along Hampton Road near the intersection with Pleasant Street (SR9). The area of this sale is considered downtown and is a heavily traveled area with average/good accessibility and visibility: There are residential, commercial and institutional uses in the I immediate neighborhood of this sale. Bennett Franklin Appraisal # 408 / Page.. 45:. I li Monthly. Rental Utilities Included Occupancy Overall Rate Comparison I Bedroom $700+ None 98+% Inferior 2 Bedroom 1895+ None ` .98+% Inferior 3 Bedroom $1;125+ None 98+% Inferior i This property is located along`Barrett Street near the intersection with Jackson Street. The area of this sale is considered outside of downtown and is a moderately traveled area with average/good accessibility and fair visibility. There are residential and institutional uses in the immediate neighborhood of this sale. Bennett Franklin Appraisal # 408 / Page 46 f Monthly Rental Utilities Included Occupancy Overall Rate Comparison I Bedroom $415-$600 Heat & Hot Water 95+% Inferior, 2 Bedroom $625-$750 Heat & Hot Water 95+% Inferior ° 3 Bedroom $900+ Heat & Hot Water 95+%. Inferior This property is located along Bridge Street near the intersection with North Elm Street; The area of this sale is ,considered outside of downtown and is a moderate to heavily traveled area with average/good accessibility and visibility. There are residential and institutional uses in the j immediate neighborhood of this sale. . i Bennett Franklin Appraisal 9 408 / Page 47 Monthly Rental Utilities Included Occupancy Overall Rate Comparison 1 Bedroom $775+ Heat & Hot Water 95%-1-00% o Inferior .2 Bedroom $885+ Heat & Hot Water 95%-100%o Inferior This property is located along Hatfield Street near the intersection with Cooke Avenue. The area of this sale is considered outside of downtown and is a minimally traveled area with average/ good accessibility and fair visibility. There are residential and commercial uses in the immediate neighborhood of this sale. The rear of a number of commercial properties (Wal-Mart; etc) are l located across Hatfield Street from this property. Bennett Franklin Appraisal # 408 / Page 48 j i The subject property is in new condition and is considered superior to all of the comparable rental properties for condition. The subject property's location is considered superior to some comparable properties (B, C,.D, E, I) similar to two comparable properties. (G &.H) and inferior to two comparable properties (A & F). Overall one property was, considered superior to the subject and this is Comparable A whereas each other comparable was considered overall inferior to the subject.:. The subject units will be of new construction or complete renovations and will be `A . in very good condition. of which none of the comparable properties are in similar condition. We have also looked at the rental rates received for 1, 2 and 3 bedroom units located in 2, 3 and .4 family homes:. These properties tend to demand rental rates as follows: I I Rental apartments in the area consist of a wide array of property types and locations. Most are garden style, units. although some are newer townhouse style units. The majority of units were either constructed or renovated between the early 1970's and the early 1990s:., Due to good economic conditions, occupancy is steady at the 95%± level. It was noted. to, us that in many cases units that have been rented to tenants. for long periods of time have not had their rental rates increased'to levels of those that have been newly rented in the past 12-24 months. As such . some units at,comparable properties could have higher average rental rates than the figures indicated. There are few apartments available for rent in the Greater Northampton market at any particular time due in part to the large numbers of students who attend the five colleges located in the area. The location of the subject is also in the immediate vicinity of Smith College which has an average annual student population of 3000+ undergraduate, and graduate students although most of the undergraduate students live. on campus the (graduate students, certificate students, and students from abroad) do not generally, live on campus. Graduate students often look to off campus housing in more typical apartment.settings and the subject property would fit this I demand very well. CONCLUSION The mufti-family residential market has not witnessed the,introduction of new units in the recent past and we do not anticipate any, new units being brought on-line i.n the.near future. The existing apartments indicated decreasing vacancy, and increasing rental rates over the past 12 to J 24 months. Due to the current.rental rates at competing properties it is clear that some current tenants at competing properties will upgrade to the, subject units. . The subject units will be of new construction with average unit sizes and apartment layouts with new mechanicals.(HVAC, cable, telecommunication lines, etc.)'that are demanded by tenants. There is more than adequate parking at the subject property that can assist the subject property in obtaining occupancy and lease rate levels consistent with the current market levels. The location is outside of the downtown area of Northampton, although remains within the immediate vicinity of downtown. It is our opinion that the subject location has adequate accessibility and visibility and can compete with all of the comparable apartment properties and the surrounding area: rais Bennett Franklin Appal # 408./ Page 50 Marketing Plan The Village at Hospital Hill Route 66 Northampton, MA 01060 Executive Summary Phase I of The Village at Hospital Hill consists of 33 units, 7 of which will be market-rate units, 14 units are targeted for incomes between 50 and 60% AMI, and 12 will be reserved for households below 50% of AMI and subsidized with Project Based Section 8 vouchers. Note that 3 of these 12 units will be reserved for households below 30% of AMI per the requirements of the QAP. As such, TCB strives to make - and market - the Village at Hospital Hill as a mixed-income community. The Master Plan for the proposed development, drafted by TCB, endorsed by the Citizens Advisory Committee (CAC) and the Mayor of Northampton, seeks to turn the dilapidated and underdeveloped former Northampton State Hospital campus into a thriving village community, which would include light office, light commercial and light industrial spaces, a community center/day care center, an elderly complex, as well as many other planned uses. Key issues of concern regarding the plan to rent out the market rate units include • appealing to the typical tenant • inclusion of community views in project design • safety • maintaining and marketing units comparable to those in Northampton • consistent marketing strategies until 95% rent-up is reached The Northampton rental market is classified as "expensive" with rents exceeding 30% of many household incomes. Demand for rental housing in Northampton exceeds supply and as a result these market conditions drive rental costs beyond the resources of many households, particularly moderate income families. Large private market units are virtually non-existent. If they do exist, they are usually found in single family or two family homes, as opposed to apartment buildings. The 2,000+ University of Massachusetts % student population living in Northampton often occupy those that become available. Many times these larger houses and apartments get passed on to other students through word of mouth and rarely are available on the open market. Moderate-income households may have greater financial capabilities to find and retain housing but lack of housing stock in general is impacting the market. The current vacancy rate is estimated to be between one and two percent. Apartments, if they do become available, usually get rented the following month and rarely remain vacant unless they have been taken off line for some other reason. As the population of students and professionals in the housing market has increased, vacancy rates have declined dramatically and the cost of housing has risen significantly. This phenomenon has created an extremely competitive rental market in Northampton. Project Description TCB is now moving forward with the development of Rental Phase I of the Village at Hospital Hill. This phase will consist of 33 new units of residential rental housing for families and individuals. When complete there will be 16 one bedroom units, 16 two bedroom units, and 1 three bedroom units. All 33 units will be located in two historically significant buildings; 11 will be in the South Employees Home and 22 will be in the Nurses Dormitory. Of the 33 units, 8 will be reserved for clients of the Department of Mental Health. These will be primarily one bedroom apartments. Residents of the units will be provided services through one of two DMH service providers. The following chart shows the approximate size in square feet of each unit type: One Bedroom 600 Two Bedroom 900 Three Bedroom 1600 Both the one- and two- bedroom units will include one bathroom per unit; the three-bedroom has two bathrooms. Each unit includes appliances, wall-to-wall carpet, with the possibility of outdoor parking. TCB will need to determine the level of amenity required to capture the market rate renter while also balancing costs within what is represented to be a finite source of financing. For further description of layout, please see site plans attached under Exhibit 16. Market Potential Analysis Rental Phase I of the Village at Hospital Hill is consistent with the goals and objectives for NSH as established by the Commonwealth, the City of Northampton, the CAC, and the Massachusetts and Northampton Historical Commissions as described above, specifically Job Creation and Economic Growth, Housing, Historic Preservation, Open Space Preservation, and Community Participation. These goals and objectives dovetail with the criteria of Community Stabilization and Resident Empowerment. It is our goal to create a community in which people of all incomes would choose to live. Because of its historical value in Northampton, we expect that rent-up will proceed quickly. The Northampton State Hospital is a place that has long been cherished for its historical value and old architecture. As such, TCB plans to preserve two historically significant structures located on site for Phase I. In an effort to stabilize the community, improve the physical appearance of the campus as well as the physical infrastructure and physical security of the site, both the South Employees Home and the Nurses Dormitory will be preserved. Currently these are existing, vacant, abandoned structures. TCB will undertake a gut rehabilitation of these structures and convert them into mixed income housing. Job creation and economic growth is an equally significant goal of the overall Master Plan. TCB's vision is to create a vibrant new live work community. MassDevelopment is undertaking the commercial development of NSH and TCB will work with them to help link job opportunities on site to residents of the Village at Hospital Hill. These businesses will benefit from having employees that do not have to commute long distances to work. In addition, the residents of the community will be supported by a number of programs and organizations to help them in training for jobs, finding employment, developing careers, and/or starting new business ventures. The entities and organizations that TCB has linked with in this effort include but are not limited to: the City of Northampton, the Department of Economic Development, Northampton Housing Partnership, Valley CDC, Hampshire Community Action Commission, Franklin Hampshire Employment and Training Consortium, and the Department of Mental Health. Programs that these entities and organizations will provide include job training classes, workshops on seeking out and securing employment, funding for the creation of businesses and micro-businesses, supportive day care services, homeownership classes, and programs that promote self-sufficiency. In addition to empowering residents in their professional and economic lives, TCB will provide opportunities for residents to be empowered in their private lives. This will be done primarily by providing residents with the opportunity to have a role and responsibility in the management of the property. DMH-clients will also have an opportunity to participate in the planning and physical design of the units through a series of workshops with TCB and the architects for the project, Dietz & Company. Finally, the program as developed responds specifically to the goal of promoting housing. TCB is not only targeting low income households but reserving some units for residents capable of paying market rates, thereby creating a mixed income dynamic community that is economically diverse. This is consistent with the overall Planned Village Community endorsed by the NSH planning process. 1 j l The typical renter of The Village at Hospital Hill market rate units is based on 2000 census data for J Northampton. The typical renter is estimated to be a female between the ages of 24-61, of the middle class. She will be seeking multifamily housing. Our goal is to reposition the Village at Hospital Hill as an attractive, sought after housing development of choice by providing a market rate product that is competitive with market rate rental products in Northampton. We will do this by emphasizing our historic preservation and gut-rehab of two existing buildings on the campus for Phase I of the project, and by designing our townhouses to reflect that same style. As well, we will address issues of concern for the potential tenant (see "Target Market/Demographic Analysis," below). Competitive Analysis As shown in Exhibit 6, the Village at Hospital Hill rents are comparable with the market. In many cases rents are below market which means that these units should be particularly attractive and will lease easily. Proposed market rents for the Village are: 1 BR $850 2 BR $1050 3 BR $1250 The range of comparable market rents (see attached under Exhibit 6) is 1 BR $795-1000 2 BR $950-1725 3 BR $1500-1800 (limited data) To the best of our knowledge, no new developments that are comparable to the Village at Hospital Hill are planned for the city of Northampton within the next 18 months. Target Market/Demographic Analysis Renters needs for this development include • public transportation • open space • preservation of historic character • parking • nearby access to shops • jobs available within walking distance • safety TCB addresses these issues of concern for potential tenants in its plan for Phase I. Phase I includes 44 parking spaces and is accessible to public transportation. In addition, it preserves acres of open space and as such, adopts many facets of new urbanism. As mentioned previously, the gut rehab of the Nurses' Dorm and the South Employees' Home preserves the historic value of the property. TCB is working with MassDevelopment to make the campus into a live-work space, which will provide several job opportunities nearby as well as nearby access to stores. In addition, Northampton's Main Street is a short walk down the hill from the NSH. The Northampton Police Department has agreed to implement a Neighborhood Watch Program at the Village at Hospital Hill which will empower residents and foster a sense of community, in l addition to making the neighborhood safe. Market and Absorption Objectives Construction is expected to commence by March 2004. TCB expects construction to complete by the within one year. Soon thereafter, TCB, Property Management, which includes a site manager as well as a Portfolio Manager and an Assistant Director of Property Management, will hold a rent-up for potential tenants. Prior to this, advertisements and bulletins will be posted, and announcements made regarding the completion of the project and the availability of market-rate units (for further description please look tinder "Marketing Schedule" and "Marketing Budget," below). Completion 99% vacancy 1 months after completion 50% vacancy 2 months after completion 5% vacancy Due to the heavy demand for housing in Northampton, we expect the rent-up of the units to proceed quickly. Advertising and Sales Promotion TCB will use newspaper, radio, and local television ads to promote the project. In addition, public meetings will be held. A brochure is currently being developed and will be sent out to a mailing list of interested tenants. Flyers will be displayed in several public spaces. Marketing Schedule Spring 2002-current collect names of interested tenants for mailing list Winter 2004/ 2005 Place newspaper, radio and local television advertisements Mail out flyer to interested tenants Distribute flyers and brochures to public library, City Hall, Smith College, Umass Amherst, and other public places in Northampton and surrounding communities. Winter 2004/ 2005 Hold meetings to distribute material regarding construction of Phase I and the ro'ect in eneral Spring 2005 Prepare a model apartment for touring as soon as constriction is complete Spring 2005 Show units to interested tenants as the become available Review applications and schedule interviews Summer 2005 Achieve 0% vacancy (r Marketing Team TCB believes that sound, professional property management practices are the cornerstone of any successfid housing endeavor. We establish standards and procedures where residents are respected, involved and held accountable. Apartments, buildings and grounds are safe and well maintained. The social environment is supportive and enriching. Good property management enhances the long-term viability of a community and gives residents a sense of pride in their homes. Our property management staff demonstrate commitment, consistency, skill, ingenuity, fairness, patience and humor. For more than 30 years, the property management staff at TCB have developed these skills. We manage over 5,000 units of housing throughout the Northeast and mid-Atlantic states plus over 300,000 square feet of commercial space. We are experienced with all types of housing--townhouses, scattered site developments, mixed income properties, apartment buildings, SROs, cooperatives and high-rises. We manage for a variety of clients--resident associations; community development corporations, public housing authorities--as well as our own properties. Our site staff work at the grass roots level through daily contact with residents and the surrounding community. We are dedicated to forming alliances with residents, police, neighbors, businesses, public services, human service providers, schools, hospitals and health centers. Off-site, the technical staff supply the tools to get the job done well, including computer software consultation, resources for reducing utility costs and ongoing training in areas like dispute mediation, resident screening and budgeting. Please refer to Exhibit 28 for additional lists of properties managed by TCB. Marketing Budget Attached is an estimated marketing budget for The Village at Hospital Hill. Advertising xpenses Newspaper ads $3,500 Radio ads N/A Flyers $250 Brochures $500 Signa e $700 Model Unit Expenses Furniture $3,500 Window Dressings $200 Floor Coverings $500 Various Accessories $500 Design Consultant N/A Management Expenses Rental Sales Staff $2500/month Commission Amount N/A Secretarial Staff $1,000/month Office Supplies $3,000 Telephone Charges $250 Heating, A/C $250 Contingency $1,500 Total Estimated Marketing Budget $18,150 (Marketing Cost per Unit) $291.35 "One Stop2000" Affordable Housing Finance Application Exhibit 8. Affirmative Fair Marketing Plan 8:1 Direction Of Marketing Activity Indicate below which group(s) in the housing market are least likely to apply for housing because of its location and other factors without special outreach efforts: You have indicated which groups are least likely to apply for housing and would therefore require specific outreach to attract as applicants. Please submit the following additional information. p White (non-Hispanic) Black (non-Hispanic) American Indian g Hispanic p Asian 8:2 Affirmative Fair Marketing Barriers Indicate those factors that you anticipate will or may prevent the above indicated groups from applying. p-j Location of project Proximity to transportation l Racial hostility ll Type of housing Current and/or past patterns of segregation Access to project advertising Language barriers 0 Distance from usual social services/social activities Current or past patterns of discrimination Distance from church, religious institutions of preference Other (state specific. barrier): ~I F One Stop2000" Affordable Housing Finance Application 8:3 Affirmative Fair Marketing Strategies Indicate those actions and resources to be used for outreach to target group(s) . t r Minority media r Community contact groups Church newsletters r Local Fair Housing. Committee C Minority occupants of other housing managed by Management Agent r ; Owner-sponsored trips to project site C" Professionals representing outreach groups (ministers, doctors, social workers, employers, etc. ) ( j Other (specify): 8:4 Affirmative Fair Marketing Goals Indicate the percent of total occupancy of the project that you anticipate your fair marketing efforts will/should accomplish. 10 % ✓ Minority (Black, Asian, Native American, Hispanic): ✓ Majority (non-Hispanic white): 90 % (Most likely, the project will house a representative sample of Northampton. The figures shown above reflect the current population of Northampton.) One Stop2000 Affordable Housing Finance Application [Version 1.171 O Exhibit 11 Construction Period Sources and Uses ~ P/ease fill out the following table with information `1"should equal each other every month. Indic Sources of Cash: on each month for which th ate loan repayinent durin Total e project will he under co g the construction period. Closin nstruction. "Sources"and Month I Nlonth 2 Alfonth 3 tktontli 4 Construction Loan $0 Proceeds from Sale (Net)* $0 Equity: Cash $0 Equity: Tax Credit (Net) $2,763,424 $690,856 $0 $0 $276,342 $0 Subordinate Debt $3,050,322 $1,313,000 $0 $423,094 $0 $423,094 Permanent Debt $1,072,697 $0 $0 $0 $0 $0 Syndication Bridge Loan $0 Other Interim Loan $0 SUBTOTAL $6,886,443 $2,003,856 $0 $423,094 $276,342 $423,094 Repayment: Construction Loan $0 Repayment: Syndication Loan Repayment: Interim Loan TOTAL SOURCES, NET $6,886,443 $2,003,856 $0 $423,094 $276,342 $423,094 Cumulative Sources $2,003,856 $2,003,856 $2,426,950 $2,703,293 $3,126,387 * Only relevant in the case of for-sale projects. Uses of Cash (Expenses): Total Closing Alfonth I Atozth 2 Nlonth 3 Month 4 Acquisition $82,500 $82,500 :Hard Costs: Direct Construction Contingency Total Hard Costs Soft Costs: Construction Loan Interest $42,858 $0 $0 $0 $0 $0 Architecture & Engineering $371,168 $209,623 $13,462 $13,462 $13,462 $13,462 ,'"'-~rveyandPermits $15,000 $15,000 rk of the Works $25,000 $0 $2,083 $2,083 $2,083 $2,083 -hiiviromnental Engineer $0 Bond Premium $0 Legal $125,000 $125,000 Title and Recording $25,000 $25,000 Accounting & Cost Certificat. $20,000 $10,000 $0 $0 $0 $0 Marketing and Rent Up $20,000 $0 $0 $0 $0 $2,000 Real Estate Taxes $15,000 $11,250 $0 $0 $0 $0 Insurance $50,000 $50,000 Relocation $0 Appraisal $5,000 $5,000 Security $2,000 $0 $0 $0 $0 $0 Inspecting Engineer $10,000 $10,000 Financing Fees $25,727 $15,677 $0 $0 $0 $0 Development Consultant $0 Seed Money $16,000 $16,000 Permits and Tests $25,000 $25,000 Developer's Overhead $299,000 $254,250 $0 $0 $0 $0 Developer's Fee (Net) $462,249 $44,750 $0 $0 $0 $0 Soft Cost Contingency $47,000 $23,500 $0 $0 $0 $0 Contribution to Reserves $125,812 $0 $0 $0 $0 $0 Subtotal Soft Costs, Fees $1,726,813 $840,050 $15,545 $15,545 $15,545 $17,545 TOTAL USES $6,886,443 $922,550 $438,640 $438,640 $438,640 $440,640 Cumulative Uses $922,550 $1,361,189 $1,799,829 $2,238,468 $2,679,108 Budget: Percentage of Funds Expended 13.4% 6.4% 6.4% 6.4% 6.4% Construction Loan Balance - -idication Loan Balance rim Loan Balance Village at Hospital Hill - Phase I Application Date: 9-5-02 Revised Date: $4,615,572 $0 $334,631 $384,631 $384,631 $384,631 $461,557 $0 $38,463 $38,463 $38,463 $38,463 $5,077,129 $0 $423,094 $423,094 $423,094 $423,094 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 ~ $0 $0 $0 $0 One Stop2000 Affordable Housing Finance Application [Version 1.17] C Exhibit 11 Construction Period Sources and Uses Page 2 Please fill out the following table with information o "should equal each other every ino th. Indic Sources of Cash: n each tnonth for which th ate loan repayment durin Month 5 e project will be under co g the construction period. Month 6 nstruction. "Sources"and Month 7 Month 8 Month 9 Month 10 Construction Loan Proceeds from Sale (Net)* Equity: Cash Equity: Tax Credit $0 $276,342 $0 $0 $931,822 $0 Subordinate Debt $423,094 $0 $415,832 $0 $0 $0 Permanent Debt $0 $0 $0 $195,761 $0 $0 Syndication Bridge Loan Other Interim Loan SUBTOTAL $423,094 $276,342 $415,832 $195,761 $931,822 $0 Repayment: Construction Loan Repayment: Syndication Loan Repayment: Interim Loan TOTAL SOURCES, NET $423,094 $276,342 $415,832 $195,761 $931,822 $0 Cumulative Sources $3,549,481 $3,825,823 $4,241,655 $4,437,416 $5,369,238 $5,369,238 Uses of Cash (Expenses): * Only relevant in the c Month 5 ase of for-sale projects. Month 6 Month 7 Month 8 Month 9 Month 10 Acquisition d Costs: FI ar Direct Construction $384,631 $384,631 $384,631 $384,631 $384,631 $384,631 Contingency $38,463 $38,463 $38,463 $38,463 $38,463 $38,463 Total Hard Costs $423,094 $423,094 $423,094 $423,094 $423,094 $423,094 Soft Costs: Construction Loan Interest s0 $0 $0 $0 $1,284 $1,326 Architecture & Engineering $13,462 $13,462 $13,462 $13,462 $13,462 $13,462 Garvey and Permits Irk of the Works $2,083 $2,083 $2,083 $2,083 $2,083 $2,083 -ivironmental Engineer Bond Premium Legal Title and Recording Accounting & Cost Certificat. $0 $0 $0 $0 $0 $0 Marketing and Rent Up $2,000 $2,000 $2,000 $2,000 $2,000 $2,000 Real Estate Taxes $0 $3,750 $0 $0 $0 $0 Insurance Relocation Appraisal Security s0 $2,000 $0 $0 $0 $0 Inspecting Engineer Financing Fees $0 $0 $0 $0 $0 $0 Development Consultant Seed Money Permits and Tests Developer's Overhead $0 $0 $0 $0 $0 $0 Developer's Fee (Net) $0 $0 $0 $0 $0 $0 Soft Cost Contingency $0 $0 $0 $0 $0 $0 Contribution to Reserves $0 $0 $0 $0 $0 $0 Sub-Total Soft Costs $17,545 $23,295 $17,545 $17,545 $18,829 $18,872 TOTAL $440,640 $446,390 $440,640 $440,640 $441,923 $441,966 Cumulative Uses $3,119,747 $3,566,137 $4,006,776 $4,447,416 $4,889,339 $5,331,305 Percentage of Funds Expended 6.4% 6.5% 6.4% 6.4% 6.4% 6.40//0 I Construction Loan Balance $0 $0 $0 $0 $0 $0 'ndication Loan Balance $0 $0 $0 $0 $0 $0 tim Loan Balance $0 $0 $0 $0 $0 $0 Village at Hospital Hill - Phase I Application Date: 9-5-02 Revised Dale: Page 3 °`-«se fill out the following table with information on each month for which the project will he under construction. "Sources"and should equal each other every month. Indicate loan repayment during the construction period. Sources of Cash: Alfonth 11 Month 12 /Month 13 Construction Loan Proceeds from Sale (Net)* Equity: Cash Equity: Tax Credit Subordinate Debt Permanent Debt Syndication Bridge Loan Other Interim Loan SUBTOTAL Repayment: Construction Loan Repayment: Syndication Loan Repayment: hiterim Loan TOTAL SOURCES, NET Cumulative Sources Month 14 Month 15 Allonth 16 $0 $0 $0 $312,749 $0 $0 $0 $0 $52,208 $0 $0 $0 $393,990 $468,136 $0 $4,810 $10,000 $0 $393,990 $468,136 $52,208 $317,560 $10,000 $0 $393,990 $468,136 $52,208 $317,560 $10,000 $0 $5,763,228 $6,231,364 $6,283,572 $6,601,131 $6,611,131 $6,611,131 * Only relevant in the case of far-sale projects. Uses of Cash (Expenses): Month 11 Allonth 12 Month 13 Acquisition 14 Allonth 15 Allonth 16 Hard Costs: Direct Construction $384,631 $384,631 $0 $0 $0 $0 Contingency $38,463 $38,463 $0 $0 $0 $0 Total Hard Costs $423,094 $423,094 $0 $0 $0 $0 Soft Costs: Construction Loan Interest $1,284 $3,996 $7,168 $27,800 $0 $0 Architecture & Engineering $13,462 $13,462 $0 $0 $0 $0 and Permits ~trve y rk of the Works $2,083 $2,083 $0 $0 $0 $0 avrronmental Engineer y Bond Premium Le al g Title and Recording & Cost Certificat. Accountin $0 $0 $10,000 $0 $0 $0 g Marketing and Rent Up $2,000 $2,000 $2,000 $0 $0 $0 Real Estate Taxes Insurance Relocation raisal A pp Securit $0 $0 $0 $0 $0 $0 y ecting Engineer Ins p Financing Fees $0 $0 $0 $10,050 $0 $0 ment Consultant Develo p Seed Money Permits and Tests Developer's Overhead $0 $0 $0 $156,375 $0 $0 er's Fee (Net) Develo $0 $0 $0 $156,375 $0 $0 p Soft Cost Contingency $0 $23,500 $0 $0 $0 $0 Contribution to Reserves $0 $0 $0 $0 $0 Sub-Total Soft Costs $18,829 $45,042 $19,168 $350,599 $0 $0 TOTAL $441,923 $468,136 $19,168 $350,599 $0 $0 Cumulative Uses $5,773,228 $6,241,364 $6,260,532 $6,611,131 $6,611,131 $6,611,131 Percentage of Funds Expended 6.4 6.8% 0.3% 5.1% 0.0% Construction Loan Balance $0 $0 $0 $0 $0 $0 ^~ndication Loan Balance $0 $0 $0 $0 $0 $0 him Loan Balance $0 $0 $0 $0 $0 $0 One Stop2000 Affordable Housing Finance Application /Version 1. t 7] m Exhibit 11 Construction Period Sources and Uses Village at Hospital Hill - Phase 1 Application Date: 9-5-02 Revised Date: One Stop2000AffordableHousing FinanceApplication [Version 1.17] Q Exhibit 11 Construction Period Sources and Uses PI-ase fill out the following table with information on each month for which the project will be under construction. "Sources"and f" should equal each other evety month. Indicate loan repayment during the construction period. Sources of Cash: h 17 14lonth 18 Month 19 Month 20 Month 21 Nlonth 22 Construction Loan Proceeds from Sale (Net)* Equity: Cash Equity: Tax Credit Subordinate Debt Permanent Debt Syndication Bridge Loan Other Interim Loan SUBTOTAL Repayment: Construction Loan Repayment: Syndication Loan Repayment: Interim Loan TOTAL SOURCES, NET Cumulative Sources Mon, $0 $0 $0 $275,312 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $275,312 $0 $0 $0 $0 $0 $6,611,131 $275,312 $6,886,443 $0 $6,886,443 $0 $6,836,443 $0 $6,886,443 $0 $6,886,443 * Only relevant in the case of for-sale projects. Uses of Cash (Expenses) Month 17 Nlonth 18 Month 19 Month 20 Allonth 21 Month 22 Acquisition Hard Costs: Direct Construction Contingency Total Hard Costs $0 $0 $0 $0 $0 $0 Soft Costs: Interest L i $0 $0 $0 $0 $0 $0 oan on Construct i i neer ng Architecture & Eng i ° ts -vrvey and Perm - irk of the Works i neer ,.:,nviromnental Eng Bond Premium Legal Title and Recording Accounting & Cost Certificat. d Rent U i k $0 $0 $0 $0 $0 $0 p ng an et Mar Real Estate Taxes Insurance Relocation Appraisal Security Inspecting Engineer Financing Fees l tant Development Consu Seed Money Permits and Tests Developer's Overhead (Net) F ' l $0 $0 $74,750 $74,750 $0 $0 $0 $0 $0 $0 $0 $0 ee oper s Deve Soft Cost Contingency ves R i $0 $125,812 $0 $0 $0 $p eser on to Contribut ts ft C l S T $0 $275,312 $0 $0 $0 $0 os o ota Sub- TOTAL Cumulative Uses $0 $6,611,131 $275,312 $6,886,443 $0 $6,886,443 $0 $6,886,443 $0 $6,886,443 $0 $6,886,443 Percentage of Funds Expended 0.0% 4.0% 0.0% 0.0% 0.0% 0.0% Construction Loan Balance --ndication Loan Balance rim Loan Balance $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 Village at Hospital Hill -Phase 1 Application Date: 9-5-02 Revised Date: One Stop2000 Affordable Housing Finance Application (Version 1.17j m Exhibit 11 Construction Period Sources and Uses s PI"nse fill out the following table with information on each month for which the project will he under construction. "Sources"and '?'should equal each other every month. Indicate loan repayment during the construction period. Sources of Cash: Month 23 Month 24 Month 25 Allonth 26 Month 27 Month 28 Construction Loan Proceeds from Sale (Net)* Equity: Cash Equity: Tax Credit Subordinate Debt Permanent Debt Syndication Bridge Loan Other Interim Loan SUBTOTAL Repayment: Construction Loan Repayment: Syndication Loan Repayment: Interim Loan TOTAL SOURCES, NET Cumulative Sources Uses of Cash (Expenses): Acquisition Hard Costs: Direct Construction Contingency Total Hard Costs Soft Costs: Construction Loan Interest Architecture & Engineering :.Survey and Permits rk of the Works Ldvironinental Engineer Bond Premium Legal Title and Recording Accounting & Cost Certificat. Marketing and Rent Up Real Estate Taxes Insurance Relocation Appraisal Security Inspecting Engineer Financing Fees Development Consultant Seed Money Pen-nits and Tests Developer's Overhead Developer's Fee (Net) Soft Cost Contingency Contribution to Reserves Sub-Total Soft Costs TOTAL Cumulative Uses $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $6,886,443 $6,886,443 $6,886,443 $6,886,443 $6,886,443 $6,886,443 Percentage of Funds Expended Construction Loan Balance Qwmdication Loan Balance rim Loan Balance Village at Hospital Hill - Phase 1 Application Date: 9-5-02 Revised Date: $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 One Srop2000 Affordable Housing Finance Application [Version 1.17] 0 Exhibit 11 Construction Period Sources and Uses 6 Pease fill out the following table with information on each month for which the project will he under construction. "Sources"«nd ""should equal each other every month. Indicate loan repayment during the construction period. Sources of Cash: Allonth 29 Month 30 11onth 31 Construction Loan Proceeds from Sale (Net)* Equity: Cash Equity: Tax Credit Subordinate Debt Permanent Debt Syndication Bridge Loan Other Interim Loan SUBTOTAL $0 $0 $0 Repayment: Construction Loan Repayment: Syndication Loan Repayment: Interim Loan TOTAL SOURCES, NET $0 $0 $0 Cumulative Sources $6,886,443 $6,886,443 $6,886,443 * Only relevant in the case of for-sale projects. Uses of Cash (Expenses) Month 29 Month 30 1L1onth 31 Acquisition Hard Costs: Direct Construction Contingency Total Hard Costs $0 $0 $0 Soft Costs: Construction Loan Interest Architecture & Engineering irvey and Permits :rk of the Works rnviromnental Engineer Bond Premium Legal Title and Recording Accounting & Cost Certificat. Marketing and Rent Up Real Estate Taxes Insurance Relocation Appraisal Security Inspecting Engineer Financing Fees Development Consultant Seed Money Permits and Tests Developer's Overhead Developer's Fee (Net) Soft Cost Contingency Contribution to Reserves Sub-Total Soft Costs $0 TOTAL Cumulative Uses Percentage of Funds Expended Construction Loan Balance `"'-idication Loan Balance brim Loan Balance $0- 0 $1 ~01 32 Month 33 Net Balance $0 $0 $0 $0 I $0 $0 ($0) $0' $0 $0 $0 $0 ($0 86,443 $6,886,443 Net 32 Month 33 Rn1. $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 $0 S $0 $0 $0 $0 $0 $186,375 $186,374 $0 $0 r merge at nospitat Hilt - Phase I Application Date: 9-5-02 Revised Date: $0 $0 $0 $0 $0 $0 $0 $0 $0 $6,886,443 $),886,443 $6,886,443 $6,886,443 $6,886,443 0.0% 0.0% ° 00/0 00% 00°/ RESIDENTIAL MARKET POTENTIAL (Draft) Page 3 The Village at Hospital Hill City of Northampton, Hampshire County, Massachusetts April, 2006 The target market methodology is described in detail in the METHODOLOGY section at the end of this study. NOTE: Tables I and 2 outline the depth and breadth, and composition of the potential market for new housing units in a mixed-use, mixed-income development of the Village at Hospital Hill in the City of Northampton, Hampshire County, Massachusetts. Tables 3 through 6 summarize selected supply-side data. Table 7 details the optimum market position for 500 residential units that could potentially be developed on the site. The Appendix Tables contain migration and target market data covering the appropriate draw areas for the City of Northampton and for the site. MARKET POTENTIAL Analysis of migration, mobility and geo-demographic characteristics of households currently living within defined draw areas is integral to the determination of the depth and breadth of the potential market for new dwelling units within a new mixed-use, mixed-income neighborhood on the Village at Hospital Hill site. The depth and breadth of the potential market for new rental and for-sale housing units to be constructed on the site have been derived from the housing preferences and financial capacities of the draw area households, identified through Zimmerman/Volk Associates' proprietary target market methodology and extensive experience with urban development and redevelopment. Based on Zimmerman/Volk Associates' field investigation, analysis of migration and mobility data, and assessment of the assets and constraints of the site, new housing units constructed wtihin the Village at Hospital Hill could attract a range of potential renters and buyers from both the City of Northampton and the balance of Hampshire County (the primary draw area). In addition to households already living in the city or county, new housing units on the site are likely to present an attractive alternative to a number of residents of adjacent or other Massachusetts Counties; a regional draw area has therefore been defined as Hampden, Franklin, ZIMMERMAN/VOLK ASSOCIATES, INC. (J RESIDENTIAL MARKET POTENTIAL (Draft) Page 4 The Village at Hospital Hill City of Northampton, Hampshire County, Massachusetts April, 2006 Worcester and Middlesex Counties. The analysis also factors in those households moving from all other counties in the United States represented in Hampshire County migration. Therefore, as derived from migration, mobility and target market analysis, the draw area distribution of market potential (those households with the potential to move within or to the City of Northampton) would be as follows (see also Appendix One, Tables 8A and 8B): Market Potential By Draw Area City of Northampton, Hampshire County, Massachusetts City of Northampton (Primary Draw Area): 30.4 percent Hampshire County(Primary Draw Area): 26.1 percent Regional Draw Area: 18.5 percent Balance of US (National Draw Area): 25.0 percent Total: 100.0 percent SOURCE: Zimmerman/VolkAssociates, Inc., 2006. MARKET POTENTIAL FOR THE VILLAGE AT HOSPITAL HILL The target market methodology also identifies those households that prefer newly-created dwelling units in urban neighborhoods. After discounting for those segments of the city's potential market that have preferences for existing housing units, and for housing in suburban and/or rural locations, the distribution of draw area market potential for newly-constructed housing units within the Village at Hospital Hill would be as follows (see also Appendix One, Tables 9A and 9B): Market Potential By Draw Area THE VILLAGE AT HOSPITAL HILL City of Northampton, Hampshire County, Massachusetts City of Northampton (Primary Draw Area): 32.0 percent Hampshire County(Primary Draw Area): 12.2 percent Regional Draw Area: 19.3 percent Balance of US (National Draw Area): 36.5 percent Total: 100.0 percent SOURCE: Zimmerman/VolkAssociates, Inc., 2006. ZIMMERMAN/YOLK ASSOCIATES, INC. RESIDENTIAL MARKET POTENTIAL (Draft) Page 5 The Village at Hospital Hill City of Northampton, Hampshire County, Massachusetts April, 2006 The balance of Hampshire County represents a significantly smaller proportion of market potential for new housing in the Village at Hospital Hill than for the city as a whole. Conversely, the Northampton, regional and national draw areas represent somewhat larger segments of market potential for the Village than for the city as a whole. Based on the target market analysis, then, in the year 2006, just over 1,800 households represent the potential market for newly-created dwelling units on the site if appropriate housing options were to be made available. The housing preferences of these 1,810 draw area households-based on tenure (rental/ownership) choices and financial capacity-are outlined as follows (see also Table 1): Annual Potential Housing Market Based on Draw Area Household Tenure Propensities and Income Levels THE VILLAGE AT HOSPITAL HILL City of Northampton, Hampshire County, Massachusetts HOUSING TYPE NUMBER OF HOUSEHOLDS PERCENT Multi-Family Rental Units 780 43.1% Below Market-Rate* 300 16.6% Market-Rate* 480 26.5% ' Multi-Family Ownership Units 260 14.4% (All Price Ranges) Single-Family Ownership Units 770 42.5% Attached (All Price Ranges) 170 9.4% Below-Market-Rate* Detached 160 8.8% Market-Rate* Detached 440 24.3% Total: 1,810 100.0% * Market rate is defined as affordable to households with incomes no less than 80 percent of the Area Median Family Income (AMFI), in 2005, of $69,200 for a family of four. SOURCE: Zimmerman/Volk Associates, Inc., 2006. ZIMMERMAN/YOLK ASSOCIATES, INC. { RESIDENTIAL MARKET POTENTIAL (Draft) Page 6 The Village at Hospital Hill City of Northampton, Hampshire County, Massachusetts April, 2006 Just over 43 percent of the potential market is for rental units, of which nearly 62 percent qualify as "market-rate," meaning households who do not require financial assistance to cover the monthly rents. The remaining 56.9 percent of the potential market is for ownership units, distributed between for-sale apartments (multi-family, all price ranges), townhouses/live- work (single-family attached, all price ranges) and market-rate and below-market-rate detached houses. Market-rate detached houses comprise approximately 43 percent of the ownership market. Again, these numbers indicate the depth of the annual potential market for newly-created housing units within the Village at Hospital Hill redevelopment, not housing need. These are the households that are likely to move to the neighborhood if appropriate housing options were to be made available and if compatible non-residential uses are also introduced. ZIMMERMAN/YOLK ASSOCIATES, INC. Table 1 Potential Housing Market Distribution Of The Potential Market Based On Housing Preferences And Income Levels Of Draw Area Households With The Potential To Move To The Site In 2005 The Village At Hospital Hill City of Northampton, Hampshire County, Massachusetts City of Northampton; Balance of Hampshire County; Regional Draw Counties; All Other U.S. Counties Draw Areas Total Target Market Households With Potential To Rent/Purchase Within The City of Northampton, Hampshire County, Massachusetts 4,600 Total Target Market Households With Potential To Rent/Purchase Within The Village At Hospital Hill 1,810 Potential Housing Market Multi-Family Single-Family . For-Rent For-Sale Below Below Market-Rate* Market-Rate* AIIRanges AIIRanges Market-Rate* Market-Rate* Apts. Apts. Apts. Attached Detached Detached Total Total Households: 300 480 260 170 160 440 1,810 (Percent): 16.6% 26.5% 14.4% 9.4% 8.8% 24.3% 100.0% Optimum Residential Mix 500 Dwelling Units Multi-Family Single-Family For-Rent For-Sale Below Below Market-Rate* Market-Rate* AllRanges AIIRanges Market-Rate* Market-Rate* Apts. Apts. Apts. Attached Detached Detached Total Mix Distribution: 83 133 72 46 44 122 500 * Market rate is defined as affordable to households with incomes at or above 80 percent of the Hampshire AMFI (Area Median Family Income), which is $69,200 for a family of four in 2005. NOTE: Reference Appendix One, Tables 1 through 12. SOURCE: Claritas, Inc.; ( 1 Zimmerman/ Volk Associates, Inc. I RESIDENTIAL MARKET POTENTIAL (Draft) The Village at Hospital Hill City of Northampton, Hampshire County, Massachusetts April, 2006 -OPTIMUM RESIDENTIAL MIX- Page 8 From the perspective of draw area target market propensities and compatibility, and within the context of the new housing marketplace in the Northampton market area, the potential market for new housing units within the Village at Hospital Hill includes a range of housing types, from multi-family rentals to single-family detached houses. However, the market potential for the site could support considerably more than 200 units. Up to 500 units, outlined in the mix below, could be absorbed by the market within a four-year development timeframe; the appropriate mix of 500 units, based on target market preferences, would be as follows (see again Table 1): Optimum Residential Mix-500 Units THE VILLAGE AT HOSPITAL HILL City of Northampton, Hampshire County, Massachusetts SHARE OF NUMBER OF HOUSING TYPE HOUSEHOLDS UNITS Multi-Family Rental Units 43.1% 216 Below Market-Rate* 16.6% 83 Market-Rate* 26.5% 133 Multi-Family For-Sale Units 14.4% 72 (All Price Ranges) Single-Family Ownership Units 42.5% 212 Attached (All Price Ranges) 9.4% 46 Below-Market-Rate* Detached 8.8% 44 Market-Rate* Detached 24.3% 122 Total: 100.0% 500 * Market rate is defined as affordable to households with incomes no less than 80 percent of the Area Median Family Income (AMFI), in 2005, of $69,200 for a family of four. SOURCE: Zimmerman/Volk Associates, Inc., 2006. It should be noted that the above, market-driven mix includes approximately 75 percent market-rate housing units, considerably higher than the state requirement of 50 percent market- rate/50 percent affordable units. However, from the market perspective, the higher percentage of market-rate units will ensure market acceptance of the overall mixed-income development ZIMMERMAN/VOLK ASSOCIATES, INC. ' RESIDENTIAL MARKET POTENTIAL (Draft) The Village at Hospital Hill City of Northampton, Hampshire County, Massachusetts April, 2006 Page 9 approach, particularly given the requirement that 15 percent of the units are to be set aside for clients of the Massachusetts Department of Mental Health. The market-driven mix also includes approximately 38 percent affordable rental units, considerably less than the requirement of 75 percent affordable rental units (for households at or below 60 percent of the area median family income). In addition, the market-driven mix includes 15 to 20 percent affordable for-sale units, somewhat less than the requirement of 25 percent affordable for-sale units. Although the original development plan was for a total of 207 units, this study indicates that the market is deep enough to absorb significantly more than 207 units. Undertaking a market- driven mix of 500 units, as outlined above, would allow for 127 below-market-rate units, at least 23 more units than would be available through the original development plan. TARGET MARKETS The market for urban housing is now being fueled by the convergence of the two largest generations in the history of America: the 82 million Baby Boomers born between 1946. and 1964, and the 78 million Millennials, who were born from 1977 to 1996. Boomer households have been moving from the full-nest to the empty-nest life stage at an accelerating pace that will peak sometime in the next decade and continue beyond 2020. Since the first Boomer turned 50 in 1996, empty nesters have had a substantial impact on urban, particularly downtown housing. After fueling the dramatic diffusion of the population into ever-lower-density exurbs for nearly three decades, Boomers, particularly affluent Boomers, are rediscovering the merits and-pleasures of urban living. At the same time, Millennials are just leaving the nest. The Millennials are the first generation to have been largely raised in the post='70s world of the cul-de-sac as neighborhood, the mall as village center, and the driver's license as a necessity of life. As has been the case with predecessor generations, significant numbers of Millennials are heading for the city. They are not just moving to New York, Chicago, San Francisco and the other large American ZIMMERMANNOLK ASSOCIATES, INC. RESIDENTIAL MARKET POTENTIAL (Draft) Page 10 The Village at Hospital Hill City of Northampton, Hampshire County, Massachusetts April, 2006 t cities; often priced out of these larger cities, Millennials are discovering second, third and fourth tier urban centers. The convergence of two generations of this size-simultaneously reaching a point when urban housing matches their life stage-is unprecedented. This year, there are about 41 million Americans between the ages of 20 and 29, forecast to grow to over 44 million by 2015. In that same year, the population aged 50 to 59 will have also reached 44 million, from 38 million today. The synchronization of these two demographic waves will mean that there will be an additional eight million potential urban housing consumers nine years from now. The potential market for new housing units to be developed the Village at Hospital Hill can be characterized by household and housing type as follows (see also Table 2): Optimum Residential Mix By Household and Unit Types THE VILLAGE AT HOSPITAL HILL City of Northampton, Hampshire County, Massachusetts MULTI-FAMILY SINGLE-FAMILY RENTAL FOR-SALE PERCENT BMR* MARKET' ALL RANGES BMR* MARKETt HOUSEHOLD TYPE OF TOTAL APTS APTS APTS ATT. DET. DET. Empty-Nesters & Retirees 29% 37% 13% 38% 24% 50% 30% Traditional & Non-Traditional Families 18% 20% 10% 0% 24% 19% 34% Younger Singles & Couples _ 5~z'o/o _Aa% _ZZ% 620/6 -52-% _31016 % Total 100% 100% 100% 100% 100% 100% 100% * BMR: Below market rate. t Market rate is defined as affordable to households with incomes no less than 80 percent of the Area Median Family Income (AMFI), in 2005, of $69,200 for a family of four. SOURCE: Zimmerman/Volk Associates, Inc., 2006. The largest potential markets for the Village at Hospital Hill in this segment are The VIPs, Twentysomethings, Small-City Singles, and Soul-City Singles. Younger singles and couples represent up to 77 percent of the market for multi-family rental units, respectively, and just 36 percent of the market for detached houses on the site. These households are are employed in a ZIMMERMAN/YOLK ASSOCIATES, INC. n ri RESIDENTIAL MARKET POTENTIAL (Draft) The Village at Hospital Hill City of Northampton, Hampshire County, Massachusetts April, 2006 Page I I variety of occupations, from professionals, teachers, or others connected with education, small business owners, "knowledge workers," to retail and service employees. Empty nesters and retirees-primarily Cosmopolitan Elite, Middle-Class Move-Downs and Second City Senior.-represent 29 percent of the potential market for transit-oriented development on the site. A significant number of these households have children who have grown up and moved away; another large percentage are retired, with incomes from pensions, savings and investments. A powerful rationale for an increasing number of older households to leave the houses in which they raised their families is the desire for newly-constructed housing. The expense and aggravation of continued repairs to older housing stock can overwhelm many households; new housing-with new appliances in kitchens and baths, floorplans that match modern lifestyles, and ample closet space in the bedrooms-becomes increasingly attractive. Family-oriented households (traditional and non-traditional families) make up the smallest market (18 percent) for new units on the site. A significant number of these family-oriented households are non-traditional families, notably single parents with one or two children. Non- traditional families encompass a wide range of family households, from a single parent with one or more children, an adult with younger siblings, a grandparent with children and grandchildren, to an unrelated, same-sex couple with children. Traditional families contain a married man and woman with an average of two or more children. These can also include "blended" families, in which each parent was previously married to another individual and each has children from the prior marriage. The majority of the traditional family households are dual-income professionals in education- and service-oriented fields. /~1 ZIMMERMAN/VOLK ASSOCIATES, INC. Table 2 Optimum Residential Mix By Household Type Distribution Of The Potential Market Based On Housing Preferences And Income Levels Of Draw Area Households With The Potential To Move To The Site In 2005 The Village At Hospital Hill ' Ci of Northampton, Hampshire County, Massachusetts Multi-Family Single-Family For-Rent For-Sale Below Below Market-Rate" Market-Rate- AllRanges AllRanges Market-Rate* Market-Rate* Total Apts. Apts. Apts. Attached Detached Detached Number of Households: 1,810 300 480 260 170 160 440 Mama sters. i p.• 297, 375ro ' 13% 38% 24% 50% 30% radi .'o a ik~o e% 18% 20% 10% 0% 24% 1970 34% YO N9 r M1Uq-&, q- l 53% 43% 77% 6291o 52% 31% 36% r 1005ro 10070 10070 10070 1007, 100% 10070 * Market rate is defined as affordable to households with incomes at or above 80 percent of the Hampshire AMFI (Area Median Family Income), which is $69,200 for a family of four in 2005. NOTE: Reference Appendix One, Tables 1 through 12. SOURCE: Claritas, Inc.; Zimmerman/ Volk Associates, Inc. RESIDENTIAL MARKET POTENTIAL (Draft) Page 13 The Village at Hospital Hill City of Northampton, Hampshire County, Massachusetts April, 2006 The primary target groups, their median and range of incomes, and median home values, are: Primary Target Groups for New Housing Units (In Order of Median Income) THE VILLAGE AT HOSPITAL HILL City of Northampton, Hampshire County, Massachusetts HOUSEHOLD MEDIAN BROAD INCOME MEDIAN HOME TYPE INCOME RANGE VALUE (IF OWNED) Empty Nesters & Retirees Cosmopolitan Elite $104,900 $65,0004150,000 $327,000 Suburban Establishment $102,600 $60,0004140,000 $333,900 Affluent Empty Nesters $102,100 $55,0004145,000 $328,800 Mainstream Retirees $79,600 $50,0004110,000 $210,500 Middle-Class Move-Downs $63,500 $35,0004100,000 $244,000 Blue-Collar Retirees $38,800 $25,000460,000 $152,700 Suburban Retirees $35,700 $20,000455,000 $173,000 Suburban Seniors $31,700 $25,000450,000 $171,000 Hometown Retirees $27,000 $20,000450,000 $128,300 Second-City Seniors $23,300 $20,000445,000 $126,400 Traditional & Non-Traditional Families The Entrepreneurs $141,600 $95,0004200,000 $466,500 Unibox Transferees $102,500 $55,0004140,000 $336,900 Late-Nest Suburbanites $92,400 $50,0004140,000 $330,500 Full-Nest Suburbanites $91,100 $45,0004135,000 $325,400 Multi-Ethnic Families $63,600 $35,000490,000 $214,200 Struggling Suburbanites $35,100 $25,000450,000 $199,300 Single Parent Families $30,700 $15,000450,000 $153,500 Younger Singles & Couples e- Types $117,400 $60,0004200,000 $365,800 Fast-Track Professionals $93,600 $50,0004130,000 $292000 The VIPs $89,900 $50,0004125,000 $290,400 Upscale Suburban Couples $84,200 $40,0004130,000 $256,600 New Bohemians $78,700 $45,0004100,000 $285,700 Twentysomethings $66,900 $40,000495,000 $228,400 Suburban Achievers $65,200 $30,000495,000 $230,800 No-Nest Suburbanites $64,200 $30,000490,000 $215,600 Urban Achievers $62,800 $30,000495,000 $285,800 Small-City Singles $57,200 $30,000485,000 $216,000 Suburban Strivers $32,800 $25,000450,000 $196,400 Blue-Collar Singles $30,500 $15,000445,000 $146,100 Soul-City Singles $24,200 $15,000440,000 $157,300 NOTE: The names and descriptions of the m arket groups summarize each group's tendencies-as determined through geo-demographic cluster analysis-rather than their absolute composition. Hence, every group could contain "an omalous" households, such as empty-nester households within a "full-nest" category. SOURCE: Zimmerman/Volk Associates, Inc., 2006. ZIMMERMAN/VOLK ASSOCIATES, INC. RESIDENTIAL MARKET POTENTIAL (Draft) Page 14 The Village at Hospital Hill City of Northampton, Hampshire County, Massachusetts April, 2006 SITE AND MARKET OVERVIEW The Village at Hospital Hill site is comprised of approximately 70 acres located on Route 66 within the city limits of the City of Northampton in Hampshire County, Massachusetts. The property was formerly the location of the Northampton State Hospital, a public psychiatric hospital, and the developable area is bounded by the Smith College playing fields to the east, the Mill River to the north, and conservation lands to the west. Several buildings remain on the site, and most are in dilapidated condition. The property is heavily wooded with at least 300 specimen trees; mountain and water views are available from several locations on the site. The South Employees' Home building and the Nurses' Home building have been converted to 33 one- to three-bedroom flats and two-story rental units; the units include both both affordable and market-rate apartments. Prince Street (Route 66) divides the site; the northern parcel is currently proposed for primarily residential development, and the southern parcel for commercial development. There are few commercial uses in the vicinity of the site, the exceptions being the Haskell state office building located on Prince Street west of the entry road, and an auto repair shop i situated on a triangular parcel formed by the intersection of Prince, Chapel and Laurel Streets. Smith College is directly to the east of the property at the intersection of West Street (Route 66) and Elm Street (State Route 9). Downtown Northampton, which contains an extraordinary variety of specialty shops, galleries, restaurants and eateries, as well as entertainment venues, is approximately a mile from the site. From a market perspective, the assets of the site include: • Its excellent visibility from Route 66. • Its adjacency to Smith College. • The potential for views of the mountains from several locations on the site, and the existing amenities that include the walking trails and community gardens. • The large forested areas and surrounding conservation areas. • The proximity to the Mill River. ZIMMERMANIVOLK ASSOCIATES, INC. ~ ?'P?F.AZ4.v?'~/.Yl~t~'rt:u.~. e'rtl4SC'anFp.?3^ n!ii'+! n~!v+-n.....,..em..'...nrra..-."".rt....v.+zs+n.rem'n...rvamm++mm.+nm~r.~m..n..+..+v.n..•.-......~-r~.....~~ RESIDENTIAL MARKET POTENTIAL (Draft) The Village at Hospital Hill City of Northampton, Hampshire County, Massachusetts April, 2006 • The limited supply of new residential construction in and around Northampton; there is a pent-up demand for newly constructed housing suitable for downsizing and entry-level households for both single-family detached and multi-family units. From a market perspective, the challenges associated with the site are limited to: • The current lack of retail in the vicinity of the site. • The requirement that half the units developed on the site must be affordable to households with incomes at or below 60 percent of the area median family income; although most potential renters and buyers are comfortable living in mixed-income neighborhoods, most newly-developed mixed-income communities-with the exception of Hope VI redevelopments-typically include higher percentages of market-rate units. . . Page 15 There are very few larger-scale apartment communities located in Northampton. (See Table 3.) The largest is the Hathaway Farms Townhouses, a 207-unit property built in 1972, and remodeled in 2000. Rents here range from $785 per month for a 702-square-foot one- bedroom townhouse, to $1,240 for a 1,232-square-foot four-bedroom, two-bath townhouse ($1.01 to $1.12 per square foot). Occupancy approaches 100 percent, although the community has few amenities, limited to a playground, and high-speed internet. Excluding Hathaway Farms, market-rate rents in the area range from $800 to $900 for one- bedroom apartments, some containing fewer than 600 square feet, up to $2,100 for a four- bedroom, two-and-a-half-bath townhouse containing nearly 1,700 square feet. For the most part, rents per square foot range between $1.00 and $1.30. All of the apartment properties are at least 95 percent occupied (functional full occupancy). At the time of the field investigation, only a few condominium or townhouse projects were being marketed in Northampton, where base prices for attached units started at $215,000 for a 1,025-square-foot unit located within the McCormick Block, and went as high as $585,000 for a 2,500-square-foot live-work unit on Strong Avenue. (See Table 4.) Prices per square foot I ZIMMERMAN/VOLK ASSOCIATES, INC. RESIDENTIAL MARKET POTENTIAL (Draft) Page 16 The Village at Hospital Hill City of Northampton, Hampshire County, Massachusetts April, 2006 M range between $158 and $267. Three of the projects contain 30 or more units: the McCormick Block, which is a renovated apartment building; Old School Commons, which is the redevelopment of former school buildings in Downtown; and the Mountainview Condominiums in Easthampton, which, at completion, will consist of 32 townhouses. There were fewer than 40 condominiums, townhouses or duplex units listed for sale in Northampton in March. (See Table 5.) Prices for condominiums older than 10 years started at $120,000 and were priced as high as $400,000; newer condominium units were priced from approximately $200,000 to as much as $560,000. Prices per square foot started as low as $121; more than half had prices per square foot above $200. More than 50 single-family detached houses priced above $100,000 were listed for sale in March. (See Table 6.) The majority of the houses were configured with at least three bedrooms, and one or two bathrooms, with prices ranging between approximately $200,000and $800,000. Two listings were for distinctive houses, built before 1900, and priced at$1,285,000 and $1,390,000. Prices per square foot ranged between $107 and $441; just under half had prices per square foot above $200. ZIMMERMAN/VOLK ASSOCIATES, INC. Table 3 Page 1 of 2 Summary Of Selected Rental P roperties Hampshire County, Massachusetts January, 2006 Number Reported Reported Rent per Property (Date Opened) o Units Base Rent Unit Size Sq. Ft. Additional Information Address Northampton Hathaway Farms Townhouses (1972; Rem. 2000) 99% occupancy 73 Barrett Street 207 Private entrances, 1BR/1BA TH $785 702 $1.12 playground, 2BR/ 1BA TH $975 920 $1.06 high-speed internet. 3BR/1.513A TH $1,195 1,120 $1.07 4BR/2BA TH $1,240 1,232 $1.01 Hampton Court 77 1007o occupancy 20 Hampton Avenue 1BR/1BA to $800 to 586 to $0.90 to Saunas. 4BR/2BA $1,800 2,000 $1.37 Laurel Ridge 1007o occupancy 312-380 Hatfield 1BR/ 1BA $860 700 $1.23 Income qualifications. 2BR/1BA $1,005 918 $1.09 . Easthampton Eastworks (Adaptive Re-Use) 32 100% occupancy • 119 Pleasant Street (14 more to be built) 600 to Live-work artists' Studio lofts 2,300 lofts on 4th Floor of building. Amherst The Boulders (1976; Rem. 2002) 256 957o occupancy 156-A Brittany Manor Drive 2BR/1BA $825 to 825 to $0.97 to Fitness center, $925 950 $1.00 volleyball, basketball, high-speed internet. SOURCE: Zimmerman/VolkAssociates, Inc. I I Table 3 Summary Of Selected Rental Properties Hampshire County, Massachusetts January, 2006 Page 2 of 2 i Number Reported Reported Rent per Property (Date Opened) o Units Base Rent Unit Size Sq. Ft. Additional Information Address Amherst(continued) Rolling Green 1A Rolling Green Drive 1BR/ 1BA $840 759 $1.11 Fitness center, 2BR/1BA $1,059 986 $1.07 volleyball, basketball, 2BR/213A TH $1,205 1,158 $1.04 high-speed internet. 3BR/2BA TH $1,444 1,158 $1.25 4BR/2BA TH $1,649 1,158 $1.42 Hawkins Meadow 370 Northampton Road 1BR/1BA $905 700 $1.29 Income qualifications. 2BR/1BA $1,070 918 $1.17 Pool. Mill Valley Estates (1989) 148 96% occupancy 420 Riverglade Drive 2BR/2BA $1,050 to 954 to $1.10 to Bilingual staff, 3BR/2BA $1,100 994 $1,350 to 1,152 to $1.11 $1.17 sport courts, tot lot, $1,400 1,192 $1.17 high-speed internet. 4BR/2.5BA -TH $2,100 1,680 $1.25 SOURCE: Zimmerman/VolkAssociates, Inc. n Table 4 Summary Of Selected For-Sale Multi-Family And Single-Family Attached Developments Hampshire County, Massachusetts January, 2006 Total Sales Unit Unit Price Unit Size Price Per Total (Monthly Development (Date Opened) Type Range Range Sq. Ft. Units Average) Developer/Builder Northampton McCormick Block (1/2005) 35 17(1.5) Chuck Bowles, developer CO $215,000 to 1,051 to $205 to $309,000 1,198 $258 Old School Commons (7/2003) Strong Avenue Sissman, developer Mountainview Condominiums ARA Development 54 50(1.7) CO $299,900 to 1,270 to $196 to $437,900 2,230 $236 3 CO $399,900 t 1,500 $267 TH/Live Work $585,000 t 2,500 $234 Easthampton 32 TH $204,900 1,300 $158 t Prices are for spec or model units. SOURCE: Zimmerman/ Volk Associates, Inc. C U Table 5 Summary of Selected Multi-Family and Attached Listings City of Northampton, Hampshire County, Massachusetts f.; March, 2006 Unit List Unit Price Per Unit Year Built Type Price Size S uare Foot Confi uratio q g n 1974 CO $120,000 1,056 $114 2BR/1.5BA 1974 CO $123,500 1,056 $117 2BR/1.5BA 1982 CO $125,000 700 $179 IBR/1BA 1974 CO $145,000 1,197 $121 2BR/1.5BA 1974 CO $150,000 1,200 $125 2BR/1.5BA 1971 CO $152,900 630 $243 1BR/1BA 1984 CO $157,900 725 $218 1BR/1BA 1900 CO $174,900 650 $269 1BR/1BA 1986 CO $199,000 1,152 $173 2BR/1BA 1900 CO $250,000 1,261 $198 2BR/1BA 1915 CO $255,000 1,107 $230 2BR/1BA 1987 CO $259,000 2,264 $114 2BR/1.5BA 1915 CO $269,000 1,107 $243 2BR/1BA 1915 CO $275,000 1,165 $236 2BR/1BA 1915 CO $275,000 1,035 $266 1BR/1BA 1915 CO $279,000 1,103 $253 2BR/1BA 1900 CO $304,900 1,428 $214 1BR/1BA 1915 CO $309,000 1,198 $258 2BR/1BA 1900 CO $357,900 1,818 $197 2BR/2BA 1900 CO $388,900 1,891 $206 2BR/2BA 1915 CO $395,000 2,274 $174 3BR/1.5BA 1886 CO $399,000 1,500 $266 2BR/1.5BA 1900 CO $437,900 2,230 $196 2BR/2BA 2005 CO $560,000 1,650 $339 2BR/2.5BA 1886 CO $570,000 2,340 $244 3BR/2.5BA 1984 Duplex $187,500 11000 $188 2BR/1BA 1972 Duplex $219,000 1,296 $169 2BR/1BA 1972 Duplex $219,000 1,296 $169 2BR/1BA 1860 Duplex $249,500 1,149 $217 3BR/1BA 1860 Duplex $259,500 1,101 $236 2BR/1.5BA 1969 TH $189,900 928 $205 2BR/1.5BA 1969 TH $189,900 928 $205 2BR/1.5BA 1971 TH $195,000 974 $200 2BR/1.5BA 1992 TH $215,000 1,124 $191 2BR/1.5BA 1992 TH $259,000 1,390 $186 3BR/1.5BA 1986 TH $265,000 1,380 $192 2BR/1.5BA SOURCE: Multiple Listing Service; Zimmerman/Volk Associates, Inc. s Table 6 Summary of Selected Single-Family Detached Listings $100,000 or More City of Northampton, Hampshire County, Massachusetts March, 2006 Page 1 of 2 Unit Price Per Lot Unit Year Built List Price Size Square Foot Size Configuration 1900 $100,000 934 $107 0.05 acre 2BR/1BA 2003 $199,900 896 $223 0.01 acre 2BR/1.5BA 1945 $213,000 1,178 $181 0.54 acre 3BR/1BA 1970 $219,000 960 $228 0.47 acre 3BR/1BA 1955 $220,000 1,008 $218 0.28 acre 2BR/1BA 2005 $224,900 720 $312 2BR/1BA 1968 $228,000 1,228 $186 0.16 acre 2BR/1.5BA 1935 $229,900 1,008 $228 0.33 acre 3BR/1BA 1920 $239,000 1,340 $178 0.3 acre 2BR/113A 1972 $239,000 1,208 $198 0.29 acre 3BR/1BA 1952 $249,900 1,382 $181 0.34 acre 3BR/1.5BA 1900 $254,500 1,376 $185 0.14 acre 3BR/I13A 1950 $259,900 1,732 $150 5 acres 3BR/1BA 1900 $265,000 1,248 $212 1.66 acre 3BR/2BA 1936 $265,000 1,370 $193 0.57 acre 2BR/213A 1900 $269,000 1,700 $158 0.21 acre 2BR/1.5BA 1993 $274,900 1,918 $143 0.32 acre 4BR/2BA 1915 $279,000 1,493 $187 0.21 acre 4BR/1.5BA 1942 $279,900 1,682 $166 0.17 acre 4BR/1.5BA 1987 $289,000 1,260 $229 0.15 acre 3BR/1.5BA 1920 $289,900 1,466 $198 0.14 acre 4BR/1BA 1956 $299,000 2,093 $143 0.3 acre 3BR/2BA 1915 $299,000 1,122 $266 .0.08 acre 3BR/1BA 1900 $309,800 2,158 $144 0.23 acre 4BR/2BA 1987 $319,000 1,690 $189 0.22 acre 3BR/2.5BA 1850 $325,000 1,232 $264 0.05 acre 2BR/2BA 1900 $339,900 1,580 $215 5.12 acres. 3BR/1BA 1890 $349,000 1,460 $239 0.45 acre '4BR/1.5BA 1979 $349,900 1,540 $227 1.54 acres 4BR/2BA 1988 $359,000 2,242 $160 0.69 acre 3BR/2.5BA 1986 $365,000 2,000 $183 0.92 acre 3BR/2BA 1927 $369,900 2,000 $185 0.23 acre 5BR/2BA 1989 $399,000 2,469 $162 0.53 acre 4BR/2.5BA 1972 $399,900 2,194 $182 0.88 acre 3BR/2BA 1900 $409,000 1,422 $288 0.07 acre 3BR/1.5BA 2001 $410,000 2,565 $160 0.7 acre 4BR/3BA SOURCE: Multiple Listing Service; Zimmennan/ Volk Associates, Inc. Table 6 Page 2 of 2 Summary of Selected Single-Family Detached Listings y..., 100,000 or More City of Northampton, Hampshire County, Massachusetts March, 2006 Price Per Lot Unit Year Built List Price Unit Size Square Foot Size Configuration 1985 $415,000 1,970 $211 1.4 acres 3BR/2.5BA 2006 $415,000 2,200 $189 0.27 acre 4BR/2.5BA 1922 $420,000 1,874 $224 0.48 acre 3BR/2BA 1950 $440,000 2,236 $197 0.23 acre 4BR/2BA 1910 $459,000 3,300 $139 0.31 acres 4BR/2.5BA 2005 $469,900 2,856 $165 1.42 acres 4BR/2.5BA 1900 $499,000 2,188 $228 0.75 acre 3BR/2BA 1868 $535,000 4,241 $126 0.3 acre 4BR/3.5BA 1984 $560,000 2,160 $259 0.73 acre 3BR/3.5BA 1900 $575,000 3,414 $168 0.11 acre 5BR/3BA 1993 $609,000 3,040 $200 2.11 acres 4BR/3.5BA 1877 $625,000 2,564 $244 0.44 acre 4BR/2BA 2005 $625,000 3,180 $197 0.86 acre 3BR/3.5BA 2004 $689,900 3,100 $223 0.76 acre 4BR/3.513A 2005 $699,000 3,000 $233 0.42 acre 4BR/2.5BA 2003 $750,000 3,692 $203 2.41 acre 4BR/3BA 1927 $795,000 2,562 $310 0.29 acre 4BR/3.5BA 1859 $1,285,000 4,400 $292 0.5 acre 6BR/5BA 1900 $1,390,000 3,150 $441 0.6 acre 5BR/4.5BA SOURCE: Multiple Listing Service; Zimmerman/ Volk Associates, Inc. n APK, RESIDENTIAL MARKET POTENTIAL (Draft) Page 23 The Village at Hospital Hill City of Northampton, Hampshire County, Massachusetts April, 2006 OPTIMUM MARKET POSITI The optimum market position for new rental and for-sale dwelling units to be constructed within the Village at Hospital Hill has therefore been developed based on a variety of factors, including but'not limited to: • An urban master plan; • The site's assets and challenges; • Development of some retail uses; • The new unit rental and purchase propensities of draw area households; • Current residential market dynamics in the Northampton market area; and • A high-profile marketing campaign. MULTI-FAMILY FOR-RENT-43.1% Given the success of New Urbanist developments across the country, the high value placed on new construction by the potential market, and the highly marketable location of the site, and based on the socio-economic and lifestyle characteristics of the draw area households, the market-entry base rents and prices for newly-created market-rate residential units that could currently be sustained by the market is as follows (see also Table 7): Optimum Market Position-500 Units . THE VILLAGE AT HOSPITAL HILL City of Northampton, Hampshire County, Massachusetts APPROX. APPROX. APPROX. NET HOUSING BASE RENT/ UNIT SIZE RENT/PRICE NUMBER DENSITY TYPE PRICE RANGE RANGE PER SQ. FT. 83 n/a Tax Credit Units $649 to $665/mo. 40 n/a Lofts $700 to 500 to $1.22 to $1,100/mo. 900 sf $1.40 93 25 du Apartments $850 to 550 to $1.28 to $1,600/mo. 1,250 sf $1.55 MULTI-FAMILY FOR-SALE-14.4% 40 20 du Lofts 32 20 du Apartments $140,000 to 600 to $225 to $225,000 1,000 sf $233 $185,000 to 750 to $231 to $300,000 1,300 sf $247 continued on fohoudngpage . C : ) ZIMMERMAN/YOLK ASSOCIATES, INC. RESIDENTIAL MARKET POTENTIAL (Draft) The Village at Hospital Hill City of Northampton, Hampshire County, Massachusetts April, 2006 Page 24 Ii continued from precedingpage APPROX. APPROX. APPROX. NET HOUSING NUMBER DENSITY BASE RENT/ UNIT SIZE RENT/PRICE TYPE PRICE RANGE RANGE PER SQ. FT. SINGLE-FAMILY ATTACHED FOR-SALE-94% 41 12 du Rowhouses $175,000 to 900 to $194 to $325,000 1,450 sf $228 6 12 du Live-Work Units $350,000 to 1,500 to $200 to $400,000 2,000 sf $233 SINGLE-FAMILY DETACHED FOR-SALE-33.1% 48 8 du Cottages $195,000 to 950 to $196 to $275,000 1,400 sf $205 69 6 du Bungalows $295,000 to 1,350 to $200 to $350,000 1,750 sf $219 48 5 du Houses $375,000 to 1,700 to $211 to $475,000 2,250 sf $221 500 total units SOURCE: Zimmerman/Volk Associates, Inc., 2006. The proposed initial rents and prices are in year 2006 dollars and are exclusive of view or location premiums, options and upgrades. The recommended rent/price points place the units within the current financial capabilities of the target market households and within the context of the Northampton market area. At least one assigned parking space should be allocated per rental unit, and an average of 1.5 spaces per for-sale multi-family unit. On-street parking and small guest parking areas should also be provided. Covered parking spaces, preferably in a garage, but at minimum within a carport, should be provided for the more expensive condominiums. Courtyard buildings can accommodate tuck-under parking, and mansion apartment buildings can be designed with internal garages, typically a one-car garage per unit, or with a separate multi-bay garage that could also provide one or two additional condominiums on the second story. The least expensive rowhouses and cottages should be designed with one-car garages. To make these units more affordable, parking pads in the rear of the units could be substituted for the garages. The most expensive rowhouses and detached houses should include two-car garages. ZIMMERMAN/YOLK ASSOCIATES, INC. Table 7 Page 1 of 2 Optimum Market Position--500 Dwelling Units The Village at Hospital Hill City of Northampton, Hampshire County, Massachusetts April, 2006 Base Approx. Base Forecast Percent of Average Net Unit Rent/Price Unit Size RentlPrice Annual Units Density Housing Type Type Range* Range Per Sq. Ft.* Absorption Number 43.19o' Multi-Family For-Rent 78 83 n/a Tax-Credit Units Ibr/lba $649 30 Flats and Duplexes 2br/lba $665 40 n/a Lofts Studio/lba $700 500 $1.40 16 f Mixed-Use Buildings) lbr/ lba $800 600 $1.33 2br/2ba $1,100 900 $1.22 f dual masters) 93 25 du Apartments Studio/lba $850 550 $1.55 32 {Mansion or Ibr/lba $950 650 $1.46 Courtyard Buildings} 2br/2ba $1,250 950 $1.32 2br/2ba/office $1,600 1,250 $1.28 14.491o' Multi-Family For-Sale 26 40 20 du Lofts Studio/lba $140,000 600 $233 14 (Courtyard Buildings) Ibr/lba $160,000 700 $229 2br/2ba $225,000 1,000 $225 32 20 du Apartments lbr/1.5ba $185,000 750 $247 12 {Mansion or 2br/2ba $265,000 1,100 $241 Courtyard Buildings) 2br/2.5ba $300,000 1,300 $231 9.4% Single-Family Attached For-Sale 18 41 12 du Rowhouses 2br/1.5ba $175,000 900 $194 16 2br/2.5ba $285,000 1,250 $228 3br/2.5ba $325,000 1,450 $224 6 12 du Live-Work Units 2br/2.5.5ba $350,000 1,500 $233 2 500 to 750 sf 2br/2.5.5ba $400,000 2,000 $200 "work" space * Base rents/ prices in 2006 dollars, first phase only, and exclude options and upgrades. SOURCE: Zimmerman / Volk Associates, Inc. Table 7 Page 2 of 2 Optimum Market Position--500 Dwelling Units The Village at Hospital Hill City of Northampton, Hampshire County, Massachusetts April, 2006 Percent of Average Net Units Density Housing Type Number 33.17o Single-Family Detached For-Sale 48 8 du Cottages 2br/1.5ba {11/2-story} 2br/2.5ba 3br/2.5ba 69 6 du 48 5 du Bungalows fl 1/2- & 2-story} Houses f2-storyl 2br/2.5ba 3br/2.5ba 3br/2.5ba 3br/2.5ba 4br/2.5ba 4br/2.5ba 100.0% 500 Dwelling Units Base Approx. Base Forecast Rent/Price Unit Size Rent/Price Average Range's Range Per Sq. Ft." Absorption 45 $195,000 950 $205 12 $240,000 1,200 $200 $275,000 1,400 $196 $295,000 1,350 $219 21 $335,000 1,600 $209 $350,000 1,750 $200 $375,000 1,700 $221 12 $425,000 2,000 $213 $475,000 2,250 $211 167 including rentals 89 excluding rentals * Base rents /prices in 2006 dollars, first phase only, and exclude options and upgrades. SOURCE: Zimmerman/ Volk Associates, Inc. RESIDENTIAL MARKET POTENTIAL (Draft) Page 27 The Village at Hospital Hill City of Northampton, Hampshire County, Massachusetts April, 2006 In most market areas, an annual condominium fee is equal to about one to two percent of the base price of an individual unit. In Northampton, for example, one percent of a base price of $225,000 would result in a $187.50 monthly condominiuim fee. So, based on the range of condominium prices, the condominium fees should range between $100 and $250 per month. That fee should cover insurance, management fee, landscape and maintenance of common areas, snow removal, garbage collection, street lighting, amenities and social activities. To meet the expectations of potential residents, all units should be wired for cable television and high-speed internet or, if practical, be served by a building-wide WiFi system. For open lofts or soft lofts in adaptive re-use structures, existing floors should be salvaged and refinished wherever possible; in new construction, bamboo floors would be appropriate, with ceramic tile for the bathroom and kitchen areas. In the kitchens, buyers in particular will expect countertops to be Corian or granite or some other durable material, with integral or undermount sinks, mid-scale appliances, and plain- 417) front European-style cabinetry; renters will expect contemporary, durable finishes appropriate to urban living, as opposed to the "beige" interiors of suburban multi-family housing. Although open lofts are typically designed without interior walls, with the exception of the bathroom, as much closet and storage space as possible should be provided. Soft lofts are units that are fully finished and partitioned into individual rooms but also contain architectural elements reminiscent of "hard lofts," such as exposed beams, ductwork and masonry or brick walls, reconditioned floors and large, commercial-style windows. Apartments in new construction will require more conventional finishes, such as carpeted bedroom floors, with carpet or hardwood in living and dining areas and tile in the kitchens and baths. Again, kitchen countertops should be Corian or granite, with integral or undermount ceramic sinks and mid-scale appliances, and a choice of European or traditional cabinets. Bathrooms should have ceramic tile floors and traditional fixtures. The Male Attendants' building, although in dilapidated condition, has the potential to be developed as either rental or for-sale lofts, perhaps as artists' live-work units. Based on the ZIMMERMANNOLK ASSOCIATES, INC. I RESIDENTIAL MARKET POTENTIAL (Draft) Page 28 The Village at Hospital Hill City of Northampton, Hampshire County, Massachusetts April, 2006 ~J l target market analysis, the number of new construction live-work units should be limited to six 1,500- and 2,500-square-foot units; they could be located in front of the Male Attendants' building on the main drive. However, any live-work units should be flexible in order to respond to economic, social and technological changes over time and to accommodate as wide as possible a range of potential uses. The unit configuration must also be flexible in order to comply with the requirements of the Fair Housing Amendments Act and the Americans with Disabilities Act. The growing number of home-based businesses in the United States (reported in 1997 as four million) is often cited as a justification for live-work. However, there is an important distinction between a "home-based business" and a "business-based home." Most home-based businesses can be accommodated in almost any kind of dwelling unit. In contrast, the business-based home is a true live-work unit: a dwelling unit with a configuration that is influenced or even dictated by the non-residential activities. In New Urbanist developments that are currently under construction across the country, true live-work units tend to be most successful in projects that have been underway for several years, within an already established neighborhood or town center. In most of the developments for which information is available, live-work units are likely to be purchased by households for use as dwelling units only, or purchased by investors. A resident investor can lease the flex space for residential, retail or office use, a non-resident investor can lease both the main residential space or the flex space. Since experience shows that it is uncommon for retail operators to live above the store, live-work units must comply with local codes permitting the legal separation of uses in order to maintain investor flexibility. Successful development of mixed-income housing requires adherence to several critical design and development strategies: • Buildings should be designed to enhance the public realm, with emphasis on well- defined streets, sidewalks and paths, and to provide the "eyes on the street" that will ensure public safety. ZIMMERMAN/YOLK ASSOCIATES, INC. a RESIDENTIAL MARKET POTENTIAL (Draft) Page 29 The Village at Hospital Hill City of Northampton, Hampshire County, Massachusetts April, 2006 • ALL units should reflect the interior configurations and finish standards, as well as exterior designs, associated with market-rate dwelling units. • The proposed market-rate rents and prices and forecast absorption paces are predicated on appropriate and professional marketing and advertising programs. A sign posted on the property indicating that houses are for sale will be insufficient; the optimum market position is predicated on establishing a significant presence in the marketplace for the Village at Hospital Hill. To ensure a competitive market position that will attract households with the financial capability to purchase market-rate housing units, advertising and marketing should focus on the market-rate housing units. The goal is to convey the image of a vital new community that includes people of all ages and incomes. Market-rate rental development is the linchpin of most urban development and, in this case, should be introduced to the market in significant numbers as quickly as possible, for several important reasons: • Rental apartments are required for the establishment of "critical mass," because rentals are absorbed at higher rates than for-sale units. • Rentals are the fastest way to bring a large number of households to a site. • Rentals allow households to experiment with living in an area without the mortgage commitment of home ownership. • Renters form a pool of potential purchasers of for-sale condominiums, rowhouses and detached houses in later phases. Although there is often the perception that multi-family rentals reduce the value of nearby single-family detached houses, this is not the case in new construction with appropriate site planning. In fact, there is growing academic evidence that new apartment developments may actually increase values of nearby single-family homes by adding choice to an area that is made more attractive through planning and design. ZIMMERMAN/YOLK ASSOCIATES, INC. RESIDENTIAL MARKET POTENTIAL (Draft) Page 30 The Village at Hospital Hill City of Northampton, Hampshire County, Massachusetts April, 2006 The most appropriate first phase approach would be a row of mansion buildings, some which are condominim buildings, some of which are rentals with a mix of market-rate and affordable units. From the neighborhood-building perspective, it is preferable to introduce a mixed-income development with a market-driven mix of rental and for-sale, market-rate and below-market units, rather than either all affordable rentals or all market-rate ownership units. Ultimately, escalation of values will depend upon the enhancement of the neighborhood's urban character. An urban residential neighborhood succeeds when its physical characteristics consistently emphasize urbanity and the qualities of city life; conversely, attempts to introduce suburban scale and housing types into urban areas have invariably yielded disappointing results. Therefore, appropriate urban design-which places as much emphasis on creating quality streets and public places as on creating or redeveloping quality buildings-will be essential to success. i' ~T ZIMMERMAN/YOLK ASSOCIATES, INC. RESIDENTIAL MARKET POTENTIAL (Draft) Page 31 The Village at Hospital Hill City of Northampton, Hampshire County, Massachusetts April, 2006 ABSORPTION FORECASTS- Absorption of 500 mixed-income dwelling units within the Village at Hospital Hill could be achieved within four years from commencement of marketing, depending on phasing and construction, and barring a significant and persistent downturn in the national, regional and local economies. Annual absorption is forecast as follows (see again Table 7): Annual Absorption THE VILLAGE AT HOSPITAL HILL City of Northampton, Hampshire County, Massachusetts Multi-family for-rent 78 Tax credit 30 Lofts 16 Apartments 32 Multi-family for-sale 26 Lofts 14 Apartments 12 Single-family attached for-sale 18 Rowhouses 16 Live-work 2 Single-family detached for-sale 45 Cottages 12 Bungalows 21 Houses 12 Total 167 SouRcE: Zimmerman/Volk Associates, Inc., 2006. At the forecast absorption of 167 units in one year, including all rental units, new residential development within the Village at Hospital Hill would require a capture rate of 9.2 percent of the 1,810 households, identified through target market analysis, that have the potential to rent or purchase, with and without financial assistance, new multi-family or single-family attached and detached housing units within the the Village at Hospital Hill in the year 2006-a rate that is well within the target market methodology's parameters-of feasibility. The annual absorption forecasts require specific capture rates of those households that, in the year 2006, represent the potential market for each housing type on the site, as follows: i ) ZIMMERMANNOLK ASSOCIATES, INC. (~J RESIDENTIAL MARKET POTENTIAL (Draft) Page 32 The Village at Hospital Hill City of Northampton, Hampshire County, Massachusetts April, 2006 Required Capture Rates Based on Annual Absorption THE VILLAGE AT HOSPITAL HILL City of Northampton, Hampshire County, Massachusetts HOUSING TYPE Multi-family for-rent Multi-family for-sale Single-family attached for-sale Single-family detached for-sale ANNUAL AVERAGE REQUIRED MARKET ANNUAL CAPTURE POTENTIAL (HHS) ABSORPTION (UNITS) RATE 780 78 10.0% 260 26 10.0% 170 18 10.6% 600 45 7.5% SOURCE: Zimmerman/Volk Associates, Inc., 2006. These housing type-specific capture rates are well within the parameters required for feasible development. Based on over 18 years' experience with the target market methodology in 42 states, and within the context of the Northampton marketplace, there is a high degree of confidence in a capture rate of up to 15 percent for multi-family and single-family attached housing, and up to 10 percent for for-sale single-family detached housing. NOTE: Target market capture rates are a unique and highly-refined measure of feasibility. Target market capture rates are not equivalent to-and should not be confused with-penetration rates or traffic conversion rates. The target market capture rate is derived by dividing the annual forecast absorption-in aggregate and by housing type-by the number of households that have the potential to purchase or rent new housing within a specified area in a given year. The penetration rate is derived by dividing the total number of dwelling units planned for a property by the total number of draw area households, sometimes qualified by income. The traffic conversion rate is derived by dividing the total number of buyers or renters by the total number of prospects that have visited a site. Because the prospective market for a location is more precisely defined, target market capture rates are higher than the more grossly-derived penetration rates. However, the resulting higher capture rates are well within the range of prudent feasibility. ZIMMERMAN/YOLK ASSOCIATES, INC. RESIDENTIAL MARKET POTENTIAL (Draft) The Village at Hospital Hill City of Northampton, Hampshire County, Massachusetts April, 2006 Page 33 NEIGHBORHOOD FORM The optimum market position is predicated on a well-executed master plan based on the principles of the New Urbanism. The basic elements of neighborhood form are outlined below under THE NEW URBANISM. However, the application of these elements can be summarized in several practical guidelines: • The streets should be as narrow as possible, well-defined by street trees and sidewalks. • Lots should be established with common depths on a block. This allows maximum flexibility of mixing housing types, both to respond to real estate market changes and to make transitions from the more compact neighborhood center to the larger-lot edge. • Buildings should generally hold a build-to (rather than set-back) line. Build-to lines are as important to establish as lot lines and will vary depending on block condition, view potential and other factors. r. • Attached and narrow-lot housing types will require that parking is loaded from the rear through alleys or lanes. Although single-loaded alleys should be avoided to minimize infrastructure costs, there may be areas in which they will become necessary; the increased unit yield should more than offset their potential additional expense. • When garages are accessed from the street, attractive streetscapes will depend upon garages being situated well behind the facades of the houses. A simple guideline is that a garage should be recessed from the main fagade of the house a distance equal to the width of the garage. • Buildings facing each other across a street should be of similar height, scale and lot disposition. • Buildings facing each other across a green, park or other open space can be of a different height, scale and lot disposition. • Phases should be undertaken from mid-block to mid-block (or alley to alley) so that streets are completed on both sides. ZIMMERMANNOLK ASSOCIATES, INC. RESIDENTIAL MARKET POTENTIAL (Draft) Page 34 The Village at Hospital Hill City of Northampton, Hampshire County, Massachusetts April, 2006 THE NEW URBANISM One of the key assumptions underlying the optimum market position is that the property is designed according to the principles of the New Urbanism. The Charter of the Congress for the New Urbanism is the definitive source for the principles of the New Urbanism, which form the basis of traditional neighborhood development. From the market perspective, a traditional neighborhood development performs best when it also contains the following: 1. A variety of housing types-both rental and for-sale-with higher densities within and surrounding a neighborhood center. 2. One or more neighborhood centers. These centers can range from a small park to a mixed-use civic and/or commercial area. 3. A significant neighborhood center, with a post office or other small-scale commercial or civic uses, located within a five-minute walk-approximately 1,300 feet-of a majority of the dwelling units. 4. At least one important location reserved for a civic use, which can range from a postal center to a town hall. 5. Greens, squares and small parks throughout the neighborhood. 6. A continuous street network, ranging from larger streets to narrow rear lanes or alleys. 7. Streets fronted by private or public uses; no parking lots or garage doors visible from the street; parking accessed from the rear by a lane or alley on lots less than 50 feet wide. ZIMMERMAN/YOLK ASSOCIATES, INC. ` RESIDENTIAL MARKET POTENTIAL (Draft) The Village at Hospital Hill City of Northampton, Hampshire County, Massachusetts April, 2006 Page 35 BUILDING AND UNIT TYPES -Multi-Family- Lofts: Lofts typically have high ceilings and commercial windows and can be minimally finished, limited to architectural elements such as columns and fin walls, or fully finished, often including full or partial interiors. A building's loft apartments can be leased, as in a conventional income property, or sold to individual buyers, under condominium or cooperative ownership, in which the owner pays a monthly maintenance fee in addition to the purchase price. New construction lofts, whether for-rent or for-sale, should include work space as a permitted use. (Loft apartments can also be incorporated into multifamily buildings along with conventionally-finished apartment units.) • Courtyard Apartment Building: In new construction, an urban, pedestrian-oriented equivalent to conventional garden apartments. An urban courtyard building is two or more stories, often combined with non-residential uses on the ground floor. The building should be built to the sidewalk edge and, to provide privacy and a sense of security, the first floor should be elevated significantly above grade. • Mansion Apartment Building: A small-scale, two- or three-story apartment building, often with a street facade resembling a large detached house. The mansion building can accommodate a variety of uses-from rental or for-sale apartments, professional offices, any of these uses over ground-floor retail, a bed and breakfast inn, or a large single-family detached house-and its physical structure complements other buildings within a neighborhood. -Single-Family Attached- • Rowhouse: Similar in form to a conventional suburban townhouse except that the garage-either attached or detached-is located to the rear of the unit or integrated within the unit and is accessed from an alley or auto court. Unlike conventional ZIMMERMAN/YOLK ASSOCIATES, INC. CD RESIDENTIAL MARKET POTENTIAL (Draft) Page 36 The Village at Hospital Hill City of Northampton, Hampshire County, Massachusetts April, 2006 townhouses, rowhouses in traditional neighborhoods conform to the pattern of streets, typically with shallow front-yard setbacks. To provide privacy and a sense of security, the first floor should be elevated above sidewalk level. • Live-work is a unit or building type that accommodates non-residential uses in addition to, or combined with living quarters. The typical live-work unit is a building, either attached or detached, with a principal dwelling unit that includes flexible space that can be used as. office, retail, or studio space, or as an accessory dwelling unit. Live-work units could therefore be developed through adaptation of a rowhouse, the combination of two adjacent rowhouses, or within a multi-family building. Non-residential ground-floor uses could be helpful in establishing a daytime presence in neighborhoods that are largely residential, thereby adding an element of security. -Single-Family Detached- • Bungalow/Cottage/House: A one-, one-and-a-half or two-story single-family detached house on a small lot, often with alley-loaded parking. Parking generally should be alley-loaded on lots narrower than 50 feet. ZIMMERMAN/VOLK ASSOCIATES, INC. RESIDENTIAL MARKET POTENTIAL (Draft) Page 37 The Village at Hospital Hill City of Northampton, Hampshire County, Massachusetts April, 2006 METHODOLOGY The technical analysis of market potential for the mixed-use, mixed-income development of the Village at Hospital Hill included delineation of the draw areas and physical evaluation of the site and the surrounding context. The delineation of the draw areas for housing within the City of Northampton was based on historic settlement patterns, migration trends for Hampshire County, and other market dynamics. The evaluation of market potential for the area was derived from target market analysis of households in the draw areas, and yielded: • The depth and breadth of the potential housing market by tenure (rental and ownership) and by type (apartments, attached and detached houses); and • The composition of the potential housing market (empty-nesters/retirees, traditional and non-traditional families, younger singles/couples). NOTE: The Appendix Tables referenced here are provided in a separate document. DELINEATION OF THE DRAW AREAS (MIGRATION ANALYSIS)- Taxpayer migration data provide the framework for the delineation of the draw areas-the principal counties of origin for households that are likely to move to Hampshire County. These data are maintained at the county and "county equivalent" level by the Internal Revenue Service and provide a clear representation of mobility patterns. Appendix One, Table 1. Migration Trends Analysis of Hampshire County migration and mobility patterns from 1999 through 2003-the latest data available from the Internal Revenue Service-shows that, over the study period, the number of households moving into the county rose between 1999 and 2001, then dropped in both 2002 and 2003, falling to just under 4,700 in-migrating households in 2003. Over the same period, the number of households moving out of the county has remained fairly ~1 ZIMMERMAN/YOLK ASSOCIATES, INC. RESIDENTIAL MARKET POTENTIAL (Draft) Page 38 The Village at Hospital Hill City of Northampton, Hampshire County, Massachusetts April, 2006 l' consistent, rising briefly in 2001 and 2002, then falling to 4,565 out-migrating households in 2003. However, over the study period, Hampshire County has gone from net household losses through out-migration (i.e., more households moved out of the county than moved into the county), with net losses of 55 and 45 households in 1999 and 2000, respectively, to net gains of 400 or more households in 2001 and 2002, and a net gain of 120 households in 2003. NOTE: Although net migration provides insights into a county's historical ability to attract or retain households compared to other locations, it is those households likely to move into the county (gross in- migration) that represent the county's external market potential. Based on the migration data, the draw areas for the City of Northampton have been delineated as follows: • The rimar (internal) draw area, covering households currently living within the City of Northampton and the balance of Hampshire County. • The regional draw area, covering households with the potential to move to the City of Northampton from Hampden, Franklin, Worcester and Middlesex Counties. • The national draw area, covering households with the potential to move to the City of Northampton from all other U.S. counties. Anecdotal information obtained from real estate brokers, sales persons, leasing agents, and other knowledgeable sources corresponded to the migration data. Migration Methodology. County-to-county migration is based on the year-to-year changes in the addresses shown on the population of returns from the Internal Revenue Service Individual Master File system. Data on migration patterns by county, or county equivalent, for the entire United States, include inflows and outflows. The data include the number of returns (which can be used to approximate the number of households), and the median and average incomes reported on the returns. ZIMMERMAN/YOLK ASSOCIATES, INC. RESIDENTIAL MARKET POTENTIAL (Draft) Page 39 The Village at Hospital Hill City of Northampton, Hampshire County, Massachusetts April, 2006 TARGET MARKET CLASSIFICATION OF CITY AND COUNTY HOUSEHOLDS- Geo-demographic data obtained from Claritas, Inc. provide the framework for the categorization of households, not only by demographic characteristics, but also by lifestyle preferences and socio-economic factors. An appendix containing detailed descriptions of each of these target market groups is provided along with the study. Appendix One, Tables 2A And 2B, 3A And 3B. Target Market Classifications Of the estimated 12,320 households living in the City of Northampton in 2005, just over 58 percent, or 7,175 households, are in household groups with median incomes above $50,000. (Reference Appendix One, Table 2A in APPENDIX ONE: TABLES.) Nearly 42 percent of the city's "market-rate" households can be classified as younger singles and couples, another 37.5 percent are empty nesters and retirees, and the remaining 20.8 percent are traditional and non- traditional families. The remaining 5,145 city households are in target market groups in which a considerably k,J smaller percentage of households are able to qualify for market-rate housing. (See Appendix One, Table 2B.) Of these households, 45.2 percent can be characterized as empty nesters and retirees, 44.7 percent are younger singles and couples, and 10.1 percent are traditional and non- traditional families. In 2005, median income in the City of Northampton was estimated at $49,500, more than 3.5 percent higher than the national median of $47,800. Median home value in the city was estimated at $226,500, nearly percent higher than the national median of $149,300. Of the estimated 58,905 households living in Hampshire County in 2005, just over 64 percent, or 37,785 households, are in household groups with median incomes above $50,000. (Reference Appendix One, Table 3A in APPENDIX ONE: TABLES.) Up to 36.2 percent of Hampshire County's "market-rate" households can be classified as younger singles and couples, another 34.6 percent are empty nesters and retirees, and the remaining 29.2 percent are traditional and non-traditional families. ZIMMERMAN/YOLK ASSOCIATES, INC. RESIDENTIAL MARKET POTENTIAL (Draft) Page 40 The Village at Hospital Hill City of Northampton, Hampshire County, Massachusetts April, 2006 The remaining 21,120 Hampshire County households are in target market groups in which a considerably smaller percentage of households are able to qualify for market-rate housing. (See Appendix One, Table 3B.) Of these households, 42.7 percent can be characterized as empty nesters and retirees, 40.2 percent as younger singles and couples, and the remaining 17 percent as traditional and non-traditional families. In 2005, median income in Hampshire County was estimated $52,500, nearly 10 percent higher than the national median. Median home value in the county was estimated at $219,400,nearly 47 higher than the national median. Target Market Methodology. The proprietary target market methodology developed by Zimmerman/Volk Associates is an analytical technique, using the PRIZM geo-demographic system, that establishes the optimum market position for residential development of any property-from a specific site to an entire political jurisdiction-through cluster analysis of households living within designated draw areas. In contrast to classical supply/demand analysis-which is based on supply-side dynamics and baseline demographic projections-target market analysis establishes the optimum market position derived from the housing and lifestyle preferences of households in the draw area and within the framework of the local housing market context, even in locations where no close comparables exist. In geo-demographic segmentation, clusters of households (usually between 10 and 15) are grouped according to a variety of significant factors, ranging from basic demographic characteristics, such as income qualification and age, to less-frequently considered attributes such as mobility rates, lifestyle patterns and compatibility issues. Zimmerman/Volk Associates has refined the analysis of these household clusters through the correlation of more than 500 data points related to housing preferences and consumer and lifestyle characteristics. As a result of this process, Zimmerman/Volk Associates has identified 41 target market groups with median incomes that enable most of the households within each group to qualify for market-rate housing, and an additional 21 groups with median incomes in which a much ZIMMERMANNOLK ASSOCIATES, INC. h RESIDENTIAL MARKET POTENTIAL (Draft) Page 41 The Village at Hospital Hill City of Northampton, Hampshire County, Massachusetts April, 2006 smaller number of households is able to qualify for market-rate housing. The most affluent of the 62 groups can afford the most expensive new ownership units; the least prosperous are candidates for the least expensive existing rental apartments. Once the draw areas for a property have been defined, then-through field investigation, analysis of historic migration and development trends, and employment and commutation patterns-the households within those areas are quantified using the target market methodology. The potential market for new market-rate units is then determined by the correlation of a number of factors-including, but not limited to: household mobility rates; median incomes; lifestyle characteristics and housing preferences; the location of the site; and the competitive environment.. The end result of this series of filters is the optimum market position-by tenure, building configuration and household type, including specific recommendations for unit sizes, rents and/or prices-and projections of absorption within the local housing context. DETERMINATION OF THE POTENTIAL MARKET FOR THE CITY OF NORTHAMPTON It-J (MOBILITY ANALYSIS)- The mobility tables, individually and in summaries, indicate the number and type of households that have the potential to move within or to the City of Northampton in the year 2006. The total number from each county is derived from historic migration trends; the number of households from each group is based on each group's mobility rate. Appendix One, Tables 4A And 4B. Internal Mobility (Households Moving Within The City Of Northampton)- Zimmerman/Volk Associates uses U.S. Bureau of the Census data, combined with Claritas data, to determine the number of households in each target market group that will move from one residence to another within a specific jurisdiction in a given year (internal mobility). Using these data, Zimmerman/Volk Associates has determined that up to 1,400 households (850 households in groups with median incomes above $50,000 and 550 households in groups ( ) ZIMMERMAN/YOLK ASSOCIATES, INC. RESIDENTIAL MARKET POTENTIAL (Draft) Page 42 The Village at Hospital Hill City of Northampton, Hampshire County, Massachusetts April, 2006 with median incomes below $50,000) living in the City of Northampton have the potential to move from one residence to another in 2006. Appendix One, Tables 5A And 5B. External Mobility (Households Moving To The City Of Northampton From The Balance Of Hampshire County)- The same sources of data are used to determine the number of households in each target market group that will move from one area to another within the same coun Using these data, 1,200 households (900 households in groups with median incomes above $50,000 and 300 households in groups with median incomes below $50,000) living in the balance of Hampshire County have the potential to move from a residence in the county to a residence in the city in 2006. Appendix One, Tables 6A And 6B Through 7A And 7B; Appendix Two, Tables lA And 1B Through 4A And 4B. External Mobility (Households Moving To The City Of Northampton From Outside Hampshire County)- These tables determine the number of households in each target market group living in each draw area county that are likely to move to the City of Northampton in 2006 (through a correlation of Claritas data, U.S. Bureau of the Census data, and the Internal Revenue Service migration data). Appendix One, Tables 8A And 8B. Market Potential For The City Of Northampton- These two tables summarize Appendix One, Tables 3A and 3B through 7A and 7B. The numbers in the Total column on page one of these tables indicate the depth and breadth of the potential market for new and existing dwelling units in the City of Northampton in the year 2006 originating from households currently living in the draw areas. Up to 4,600 households have the potential to move within or to the City of Northampton this year (3,250 households in groups with median incomes above $50,000 and 1,350 households in groups with median incomes below $50,000). The distribution of the draw areas as a percentage of the potential market for the City of Northampton is as follows: ZIMMERMAN/VOLK ASSOCIATES, INC. j RESIDENTIAL MARKET POTENTIAL (Draft) Page 43 The Village at Hospital Hill City of Northampton, Hampshire County, Massachusetts April, 2006 Market Potential By Draw Area City of Northampton, Hampshire County, Massachusetts City of Northampton (Primary Draw Area): 30.4 percent Hampshire County(Primary Draw Area): 26.1 percent Regional Draw Area: 18.5 percent Balance of US (National Draw Area): 25.0 percent Total: 100.0 percent SOURCE: Zimmerman/VolkAssociates, Inc., 2006. DETERMINATION 'OF THE POTENTIAL MARKET FOR THE VILLAGE AT HOSPITAL HILL- The total potential market for new mixed-income residential development to be constructed on the Village at Hospital Hill site also includes the primary, regional, and national draw areas. Zimmerman/Volk Associates uses U.S. Bureau of the Census data, combined with Claritas data, to determine which target market groups, as well as how many households within each group, are likely to move to the site in a given year. Appendix One, Tables 9A And 9B. Market Potential For The Village At Hospital Hill- As derived by the target market methodology, up to 1,810 of the 4,600 households that represent the market for new and existing housing units in the City of Northampton are a market for new housing units on the Village at Hospital Hill site. Within household groups with median incomes above $50,000, 1,270 households have the potential to move to the site this year. (See Appendix One, Table 9A.) Nearly 60 percent of these households are likely to be younger singles and couples (as characterized within 10 of Zimmerman/Volk Associates' target market groups); just under 23 percent are likely to be empty nesters and retirees (in five groups); and the remaining 17.3 percent are likely to be traditional and non-traditional families (in five groups). Within household groups with median incomes below $50,000, up to 540 households have the potential to move to the site this year. (See Appendix One, Table 9B.) Nearly 453 percent of these households are likely to be empty nesters and retirees (in five target market groups); 37 ZIMMERMAN/VOLK ASSOCIATES, INC. RESIDENTIAL MARKET POTENTIAL (Draft) The Village at Hospital Hill City of Northampton, Hampshire County, Massachusetts April, 2006 Page 44 i percent are likely to be younger singles and couples (in three groups); and the remaining 20.4 percent are likely to be traditional and non-traditional family households (in two groups). The distribution of the draw areas as a percentage of the market for the Village at Hospital Hill is: Market Potential By Draw Area THE VILLAGE AT HOSPITAL HILL City of Northampton, Hampshire County, Massachusetts City of Northampton (Primary Draw Area): 32.0 percent Hampshire County(Primary Draw Area): 12.2 percent Regional Draw Area: 19.3 percent Balance of US (National Draw Area): 36.5 percent Total: 100.0 percent SOURCE: Zimmerman/VolkAssociates, Inc., 2006. The 1,810 draw area households that have the potential to move to the Village at Hospital Hill this year have been categorized by tenure propensities to determine renter/owner ratios. (See Appendix One, Tables 10 through 12.) 1 Approximately 26.5 percent of these households (or 480 households) comprise the potential market for rental units at the rent levels required to support newly-constructed market-rate housing. Another 16.6 percent (300 households) have incomes below $50,000, insufficient to support newly-constructed market-rate housing. (See Appendix One, Table 12.) Up to 14.4 percent (260 households) comprise the market for all ranges of multi-family ownership (condominium or cooperative) units. Another 9.4 percent (170 households) comprise the market for all ranges of attached single-family (rowhouse or live-work) units. Another 8.8 percent (160 households) would require financial assistance to purchase market- rate single-family detached houses, and the remaining 24.3 percent (440 households) have the financial capacity to purchase market-rate single-family detached houses without assistance. (See again Appendix One, Table 12.) ZIMMERMAN/VOLK ASSOCIATES, INC. RESIDENTIAL MARKET POTENTIAL (Draft) Page 45 The Village at Hospital Hill City of Northampton, Hampshire County, Massachusetts April, 2006 -Target Market Data- Target market data are based on the Claritas PRIZM geo-demographic system, modified and augmented by Zimmerman/Volk Associates as the basis for its proprietary target market methodology. Target market data provides number of households by cluster aggregated into the three main demographic categories-empty nesters and retirees; traditional and non- traditional families; and younger singles and couples. Zimmerman/Volk Associates' target market classifications are updated periodically to reflect the slow, but relentless change in the composition of American households. Because of the nature of geo-demographic segmentation, a change in household classification is directly correlated with a change in geography, i.e.-a move from one neighborhood condition to another. However, these changes of classification can also reflect an alteration in one of three additional basic characteristics: • Age; • Household composition; or • Economic status. Age, of course, is the most predictable, and easily-defined of these changes. Household composition has also been relatively easy to define; recently, with the growth of non- traditional households, however, definitions of a family have had to be expanded and parsed into more highly-refined segments. Economic status remains clearly defined through measures of annual income and household wealth. A change in classification is rarely induced by a change in just one of the four basic characteristics. This is one reason that the target household categories are so highly refined: they take in multiple characteristics. Even so, there are some rough equivalents in household types as they move from one neighborhood condition to another. There is, for example, a strong correlation between the Suburban Achievers and the Urban Achievers, a move by the Suburban Achievers to the urban core can make them Urban Achievers, if the move is accompanied by an upward move in socio-economic status. In contrast, Suburban Achievers \ ZIMMERMAN/VOLK ASSOCIATES, INC. RESIDENTIAL MARKET POTENTIAL (Draft) Page 46 The Village at Hospital Hill City of Northampton, Hampshire County, Massachusetts April, 2006 who move up socio-economically, but remain within the metropolitan suburbs may become Fast-Track Professionals or The VIPs i Household Classification Methodology: Household classifications are based on the Claritas PRIZM geo-demographic segmentation system, which was established in 1974 and is the most widely-used neighborhood target marketing system in the United States. Claritas uses 15 unique clustering algorithms to define various domains of affluence and settlement density. These algorithms isolate the key factors in each density-affluence domain that accounted for the most statistical difference among neighborhoods within that group. Over the past 18 years, Zimmerman/Volk Associates has augmented the PRIZM cluster system for use within the company's proprietary target market methodology specific to housing and neighborhood preferences, with additional algorithms, correlation with geo-coded consumer data, aggregation of clusters by broad household definition, and unique cluster names. For purposes of this study, only those household groups with median incomes that enable most of the households within each group to qualify for market-rate housing are included in the tables. ZIMMERMANNOLK ASSOCIATES, INC. ` ` ZIMMERMANNOLK ASSOCIATES, INC. 6 East Main Street Clinton, New Jersey 08809 908-735-6336 • 908-735-4751 facsimile U info@ZVA.cc • www.ZVA.cc Research & Strategic Analysis ASSUMPTIONS AND LIMITATIONS- Every effort has been made to insure the accuracy of the data contained within this analysis. Demographic and economic estimates and projections have been obtained from government agencies at the national, state, and county levels. Market information has been obtained from sources presumed to be reliable, including developers, owners, and/or sales agents. However, this information cannot be warranted by Zimmerman/Volk Associates, Inc. While the methodology employed in this analysis allows for a margin of error in base data, it is assumed that the market data and government estimates and projections are substantially accurate. Absorption scenarios are based upon the assumption that a normal economic environment will prevail in a relatively steady state during development of the subject property. Absorption paces are likely to be slower during recessionary periods and faster during periods of recovery and high growth. Absorption scenarios are also predicated on the assumption that the product recommendations will be implemented generally as outlined in this report and that the developer will apply high-caliber design, construction, marketing, and management techniques to the development of the property. Recommendations are subject to compliance with all applicable regulations. Relevant accounting, tax, and legal matters should be substantiated by appropriate counsel. ZIMMERMANNOLK ASSOCIATES, INC. 6 East Main Street Clinton, New jersey 08809 908 735-6336 • 908 735-4751 facsimile www.ZVA.cc . info@ZVA.cc Research & Strategic Analysis RIGHTS AND STUDY OWNERSHIP- Zimmerman/Volk Associates, Inc. retains all rights, title and interest in the methodology and target market descriptions contained within this study. The specific findings of the analysis are the property of the client and can be distributed at the client's discretion. 1"0) ZIMMERMAN/VOLK ASSOCIATES, INC., 2006 1Q. DATE OF INSPECTION/EFFECTIVE DATE OF VALUATION AUGUST 22, 2006 . ~J REAL ESTATE APPRAISERS & CONSULTANTS r' September 7, 2006 Mr. Thomas P. Kegelman Senior Project Manager The Community Builders, Inc. 322 Main Street Springfield, MA 01105-2408 Re: Summary Appraisal Report Three Vacant Parcels of Land Off Village Hill Road Northampton, Massachusetts Crowley & Associates File #12762 Dear Mr. Kegelman, At your request; we have prepared this Summary Appraisal Report of the property known as Three Vacant Parcels of Land off Village Hill Road, Northampton, Massachusetts for the purpose of estimating the "as is" Market Value of the fee simple interest in the subject prop. The function of this report is for internal busines erty s use. Our. estimate of market value is based upon market conditions that exist as of the date of inspection which was August 22; 2006. According to a Plan of Land provided to us the subject property contains three vacant parcels that contain a total of 1.944 acres of Planned Village District. zoned land. There is a proposal by Community Builders to construct 40 residential units on the parcels. In this appraisal. we have expressly assumed that the development of the subject parcels with 40 residential units will be allowed by all governing bodies within the City of Northampton. If for any reason this assumption proves to be incorrect we reserve the right to alter the estimate of value proffered in this report. Included in this report is a summary description and analysis of the real estate, all pertinent data, valuation methodology, supporting relevant exhibits, and addenda to the attached report. This appraisal report also sets forth our findings and. our conclusions, based upon the analysis of the pertinent data using standards. and up-to-date techniques. 101 State Street i Suite 400 • Springfield, Mamachwetts 01103 • Tel: (413) 733-8856 • Fax: (413) 733-9341 Mr. Thomas P. Kegelman Page 2 September 7, 2006 The scope of this appraisal included the application of the Sales Comparison Approach to value. We have determined that this appraisal provides a sufficient amount of supporting data and reasoning so that it will not result in a misleading or confusing report. The client is aware of the scope of the appraisal and its summary format. As a result of our inspection, market research and analysis of the property, it is our opinion that the "as is" Market Value of the fee simple interest in the subject property as of August 22, 2006, was: SEVEN HUNDRED TWENTY THOUSAND DOLLARS $720,000 Thank you for contacting our firm for this assignment. If you have any questions concerning our valuation and analysis, please contact us at (413) 733-8856. 4MAa a ra D. B am License # 1018 ~Lj f /10% Appraisal12762/Page 1 10. Appraisal12762/Page 2 k IDENTIFICATION OF THE REAL ESTATE According to the Site Plan provided to us the subject property contains three, vacant parcels that contain a total of 1.944 acres of Planned Village District zoned land. The first parcel to be known as Parcel I as proposed contains .629 acres of land and will be improved by two buildings. Parcel II as proposed contains .955 acres of land and will be improved by three buildings. Parcel III as proposed contains .369 acres of land and will be unproved by one building. There is a proposal by Community Builders to construct 40 residential units in six buildings on the parcels. LEGAL, DESCRIPTION/SALES HISTORY The subject is owned by Hospital Hill Development LL C. The owner acquired the property via Release Deed from the Grantor, The Commonwealth of Massachusetts, acting by and thorough its Division of Capital Asset Management and Maintenance. The Deed was executed on November 25, 2002. The deed referencing this transfer is recorded in the Hampshire County Registry of Deeds (HCRD) in Book 6925, Page 302 (copy in Addendum). To the best of our knowledge there have been no transfers of the property during the past three years and the subject property is not listed for sale or encumbered by a purchase and sale agreement. PURPOSE AND FUNCTION OF THE APPRAISAL The purpose of this Summary Appraisal Report is to provide an estimate of the Market Value of the fee simple interest in the property on an "as is" basis. The function of the Appraisal is for internal. business use. It is understood that the client is aware of the limitations and lower level of reliability inherent in a Summary Appraisal. We have determined that a reasonably accurate analysis of the subject property.is possible within the scope of a Summary Appraisal. PROPERTY RIGHTS APPRAISED The subject property is vacant and unencumbered by any long-term leases. Therefore, we have estimated the value of the fee simple interest in the property as defined below. "absolute ownership unencumbered by any other interest or estate, subject only to the limitations imposed biy the governmental powers of taxation, eminent domain, police power and escheat. " 1 The Appraisal Institute, The Appraisal of Real Estate, Twelfth Edition, Chicago, 2001, P. 79. Appraisal12762/Page 3 EFFECTIVE DATE OF THE APPRAISAL The subject parcels were physically inspected by Barbara D. Burnham on August 22, 2006 and photographs were taken at this time. Michael F. Crowley, MAI has previously inspected the subject property. August 22, 20.06 also serves as the effective date of the appraisal report. DEFIMTION. OF. MARKET_ VALUE Market Value is defined as "the most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not. affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller. to buyer. under conditions whereby: (1) buyer and seller are typically motivated; (2) both parties are well informed or well advised, and acting in what they consider their own best interest; (3) a reasonable time is allowed for exposure in the open market; (4). payment is made in terms of cash in U.S. dollars or in terms of financial arrangements. comparable thereto; and (5) the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions.granted by anyone associated with -the sale." 2 THE "AS IS". VALUE The "as is" value represents the value of the property in -its reported condition as of the effective date of the appraisal. It represents the highest probable price than a proposed purchaser would pay for the subject considering all of the costs and risks inherent in its future ownership. J z office of the Comptroller of the Currency. Rule 12 CFR 34.42 (0. Appraisal12762/Page 4 1 SCOPE OF WORK/SCOPE OF THE APPRAISAL The appraisal process encompasses a physical inspection of the land and an analysis of the. site to first determine the highest and best use of the land. After analysis of the physical and financial characteristics of the subject property, we have concluded for the purpose of this. Summary Appraisal that the proposed use of the property as a residential use its highest and best use. After highest andbest use is determined, the Sales Comparison, Cost and Income Approaches to value are then considered with one or more approach being relied upon to estimate the Market Value of the property. In the appraisal of the subject the Sales Comparison Approach is considered the most relevant valuation procedure. The approach(es) processed relative to specific valuations are based on the quality and quantity of available data and its relevance with .respect to the most likely-buyer of the. subject property. In collecting the. necessary data to arrive at the value of the subject property the appraisers have relied upon, verified and reviewed the periodicals published by the Banker. and Tradesman, local multiple listing services, local municipal offices, and our office files. Interviews with market participants have also been conducted for market data relative.to market and industry conditions. In the performance of this Summary Appraisal, we have completed.a summary area and market analysis, and developed a market analysis relative to the property type. This report has been made in accordance with the assumptions and limiting conditions set forth herein and is subject to. the Uniform Standards of Professional Appraisal Practice adopted by the Appraisal Standards Board of the Appraisal .Foundation. General assumptions and limiting conditions applicable to the appraisal are attached to this report. ASSIGNMENT ACCEPTABILITY Based on market data available and our research, we have used a valuation method that is considered to be the most relevant for the property type. It is our opinion that a similar valuation method would be used by other market. participants. PERSONAL PROPERTY The final value proffered in this report is of the real estate only. Our value estimates are of the real estate.only. We attribute no value to personal property items such as the furniture, fixtures, equipment, which may be present once the units are completed. COMPETENCY STATEMENT Based on our knowledge of the local residential real estate market, we certify that we have the knowledge and experience to complete this assignment in accordance with the competency rule in the Uniform Standards of Professional Appraisal Practice (USPAP). Appraisal12762/Page 5 CITY OF NORTHAMPTON ANALYSIS The City of Northampton is located in Hampshire County in Western Massachusetts. The City contains 35.62 square miles of land. Interstate 91, which has three interchanges in Northampton, networks the City northerly to southern Vermont, and southerly to major commercial regions of Springfield, MA and Hartford, CT. According to the Census estimates for 2000, Northampton is the second largest community in Hampshire County and is listed as having a population of 28,978, whichrepresents a 1.06% decrease from the 1990 .U.S. Census population of 29,289. The most recent population statistics from the 2000 U.S. Census for Northampton and the surrounding communities are in the grid below. C Municipality Population 2000 Population 1990 Percent Change Northampton 28,978 29,289 -1.06% Amherst 34,874 35,228 -1.00% Easthampton 15,994 15,537 +2.94% Westhampton 1,468 1,327 +10.63% Hadley 4,793 4,231 +13.28% South Hadley 17,196 16,685 +3.06% Holyoke 39,838 43,704 -8.85% Hatfield 3,249 3,184 +2.04% Williamsburg 2,427 2,515 -3.50% Appraisal12762/Page 6 Regional population, impacted most significantly by declining population in the City of Holyoke, indicates a decr i ease n population in whole numbers over the last ten years, however, the more immediate Northampton area has indic t d littl a e e change in overall population over the last decade. The five educational institutions in the greater area result in Northampton having a transient population, and a flat population growth rate, The per capita income in Northampton is average compared to surrounding communities. The chart below shows employment and wa es g Training. The information was compiled by the Massachusetts Division of Employment ng. and mployment and Wages by Industry in Northampton (2004) USTRY STABLISHMENTS VERAGE VERAGE I WLOYMENT WEEKLY WAGE otal, All Industries-- 1,143 17 695 , 682 onstruction 8 19 877 anufacturing 0 1,099 1 021 I , olesale Trade 3 54 841 etail Trade 186 ,323 458 raps ortation and Warehousin . 12 0 734 ormation 8 81 748 inane Activities 82 46 844 eal Estate and Rental and asm 7 125 501 rofessionaland Technical ervices 138 03 777 ealth Cate. and Social Assistance 192 ,438 747 ccommodation and Food 127 ervices ,229 292 ther Services, Ex. Public Admin 188 30 405 The chart above indicates that the majority of the labor force is employed in the retail or service sectors. Northampton has become a destination location that is known for its fine restaurants , entertainment and eclectic retail shops. The economy is supported. by its many college students and is located within the five-college. campus. The average annual salary has steadily increased . over the. past five year period and the total number of people that have .been employed has remained relatively stable until 2004, when there was a sharp increase. This is partly due to the transient nature of the labor force, which is partially comprised of college students. Recent trends indicate that Northampton's unemployment level is slightly lower than that indicated for the Springfield area suburbs, and the most recent data provided by the MA Department of Labor (July 2006) reveals unemployment.in the City of 4.2%. This figure is in line with the Hampshire County unemployment rate of 4% and both are below the State rate of 4.8% for the same time period.. The City has historically held unemployment rates below that of . the local region and State, partly because of the employment generated by the number of colle ges in the area, and also due to the relatively healthy economy that the regional market has enjoyed . over the last decade. We have outlined the labor data since 1995. Appraisal12762/Page 7 ('1 Labor force, Employment and Unemployment in Northampton (1995-2005) Annual Y Year Libor Force Employed Unemployed Unemployment Rate Average 005 17,151 16,660 591 .4 Average 004 17,259 16,623 36 .7 Average, 003 15,734 15,154 80 .7 Average 002 15,922 15,432 90 .1. Average 001. 15,657 15,288 69 .4 Average 000 15,404 15,109 95 1.9 Average . 1999 15,885 15,521 64 .3 Average 1998 15,945 15,542. 03 .5 Average 1997 16,112 15,692 20 .6 vera a 1996 15,680 15,188 92 .1 vera a 1995 15,584 14,994 90 .8 The major employer in Northampton is Smith College. Smith College is one of the five colleges . located in the greater region.(including the communities of Amherst and South Hadley), and.area students provide solicitation for the Downtown business district's retail and restaurant trades. The lodging industry in the area has historically been stable as well, primarily as a result of the presence of the colleges in the area. Downtown Northampton has historically held a strong commercial presence. The Downtown area offers adequate parking.and is very accessible to pedestrians. Investment in downtown Northampton real estate has been steady in recent years, including renovations to many of the J buildings along Main Street. The popularity of the Downtown area has resulted in sale and rental values for properties in Downtown that generally exceed the greater Springfield market. The strength of the market has resulted in an outflow of commercial users beyond Main Street.to side streets such as Center Street and Pleasant Street. Recent sales include Thorne's Market which recently transacted for a recorded sale price of $6,400,000. Approximately 0.5 miles west of Downtown is the grounds of the former Northampton State Hospital. (subject), which has been targeted for reuse by the State, and the plans for redevelopment are. being orchestrated via a joint effort by MassDevelopment, an . agency of the Commonwealth of MA, and Community Builders, Inc. The redevelopment, to be known as Village At Hospital Hill site of the subject, consists of a 116.7 acre tract of former institutional land, that is proposed for redevelopment as a "planned village" type complex with mixed uses of property, such as light industrial, commercial; -and residential. Some residential development has commenced. Recent improvements include 100 mixed-income rental units and a new roadway and sidewalks were installed. Plans are in place. for 100 residential units, and 80 home ownership sites. Still in the planning stages is a 60-80 unit elderly housing development. Appraisal12762/Page 8 The commercial development could potentially include up to 476,000 square feet of mixed j commercial and light industrial space. The redevelopment is hoped to stimulate interest from both the local area and outside of the region, and any penned up demand for land could assist in the absorption of this project. In conclusion, it is our opinion that the commercial and industrial sectors in the Northampton market area are stable. In regards to this project Northampton Economic Development Coordinator Teri A. Anderson indicated that Kollmorgen, which is the largest manufacturer in Northampton, will remain at its King Street facility, leaving the city to look for new tenants for the proposed project. She further explained that she is the process of talking to potential tenants and feels confident that once the road reconstruction takes place in the Spring of 2007 she should be able to find occupants by the Fall of 2007. The city had hoped that Kolhnorgen, which manufactures optical equipment for the government and other clients, would be a cornerstone of the industrial section of the complex, occupying a 100,000-square-foot site. According to Anderson, engineers have determined that the cost of excavating on sloped ground for a building of that size would not be feasible. The project was contingent upon Home Depot buying their building and relocating them to the new site. Once Home Depot pulled out of the market Kollmorgen decided to stay put. At this time Home Depot has already begun building a prototypical store on Route 9 in Hadley. Home Depot indicated that they did not want to be located in both markets. The City of Northampton has also set a cap at 90,000 square feet for the footprint of any future buildings in the City. It is possible that this will dissuade other large box retailers from locating in the Northampton market. Overall, the residential sector in Northampton is very stable with average vacancy at less than I% historically and steady demand for housing both within Downtown and in the suburban areas. The City has always evidenced high demand for housing. Historically the number of artisans and academia desiring to live in the City has been a demand factor, and there is also a stable commercial element that draws employment and subsequently residents. The King Street corridor is also a prominent retail location, and typical properties located there include national franchise retail, restaurant, and automotive service uses. The improved properties are situated with good street visibility and the majority of the buildings are modern (franchise) signature properties with on-site parking. CVS is one of the most recent market entrant on King Street. A new 7,425 square foot retail building (Dave's Soda and Pet Food City) was completed in early 2004 on a pad site within the CVS site. Other developments include the design phase to widen Damon Road. Damon Road is a major roadway that connects King Street to the exit 19 interchange of Interstate 91, and to the Calvin Coolidge Bridge that connects Northampton and Hadley. Based on historical growth, it is reasonable to project that there will continue to be growth along this corridor in the future. In general, economic conditions in the City of Northampton overall are expected to remain positive into the future. The potential redevelopment of the Northampton State Hospital site should provide an economic stimulus to the City and region in general. In the Appraisal12762/Page 9 f NEIGHBORHOOD/ MARKET AREA DATA The subject property is located on West Street, or State Highway Route 66, in the south-central section of the City of Northampton, 0.6 miles from Northampton's downtown center. The neighborhood is just north of the Northampton/ Easthampton town line. Route 66 extends easterly through the neighborhood from Easthampton and turns into Route 9 at its intersection with State Highway Routes 9 & 10 in Northampton center. Route 10 is an east-west roadway that runs parallel to Route 66 on its south side, through the neighborhood. The subject, The Village At Hospital Hill as proposed, is the largest land use in the neighborhood, and the property in total consists of approximately 116.7 acres on the north and south sides of Route 66. The other significant land user in the neighborhood is Smith College. Smith College has its main campus and housing throughout the neighborhood, as well as athletic .fields and Equestrian facility. The neighborhood is predominantly built out with residential uses, and there are also a number of smaller sized, secondary commercial, service, and light industrial uses located along Routes 66 and 10 in the neighborhood, including auto sales and servicers, a tank storage facility owned by O'Connell Oil, a rail or salvage yard, and others. The subject lot is abutted by commonly owned land to the west and north. To the east there is a small parcel carved out of the larger The Village at Hospital Hill-South Campus, which is owned by the City of Northampton, and is the locus of a small commemorative monument. ~J Appraisal12762/Page 10. Across Earle Street are residences and Smith College's equestrian facility. To the west, fronting Texas Road, which extends south and then parallel to Earle Street is the land owned by O'Connell Oil Company, which is used for storing fuel tanks. The larger subject site is being developed as The Village at Hospital Hill, a mixed-use development to network commercial; light industrial, and residential uses. The diversity of existing property uses. in the neighborhood supports the development plans as proposed. The location offers average access and visibility. The subject location is not a "Class A" location, which is characterized by highway accessibility and visibility, immediate highway access, and modern appearance buildings with attractive landscaping. However, the location benefits from the demand stimulated by the cultural and artisan community, centered in the Northampton area. We expect the. subject to emerge as a market niche, with appeal to the. prominent cultural and artisan community.in the regional area. Routes 10 and 66 are the primary highways through the location. The subject has average visibility from Route 66. As stated, the travel to the subject location from the Interstate is congested and slow. The location would be well suited to local businesses and entrepreneurs, however, the location is clearly inferior to the modern (Class A) locations that have been the focus of the market's. recent commercial and industrial development activity. SITE According to a Site Plan prepared by Dietz & Company the subject property contains three vacant parcels that contain a total of 1.944 acres of Planned Village District zoned land. Parcel I as proposed. contains .629 acres of land and will be improved by two buildings to be known as Building N and M. Building N will house three units and Building M will house five units. The parcel is best described as generally level at street grade, rectangular in shape with frontage on Musante Drive and Ford Crossing. The Site Plan calls for a conceptual curb cut from Musante Drive that would direct into two parking lots located to the rear of each conceptualized building. There are four parking spaces depicted to the rear of Building N and five spaces depicted to the rear of Building M. The Site Plan conceptualizes the buildings positioned to the east of the parcel near the frontage on Musante Drive. f~ Appraisal12762/Page 11 ` Parcel II as proposed contains .955 acres of land and will be improved by three buildings and 24 units. The Buildings will be known as A, B and M and each will house eight units. The parcel is best described as generally level at street grade, mostly rectangular in shape with frontage on Village Hill Road, Ford Crossing, Musante Drive and Halligan Place. The'Site Plan calls for a conceptual curb cut from Halligan Place that would direct traffic into a parking lot that contains. 24 parking spaces centrally located between the three buildings. The Site Plan conceptualizes the buildings positioned to the south of the parcel near the frontage on Halligan Place. Parcel III as proposed contains .369 acres of land and will be improved by one building. This. Will be known as Building A and. it will house eight units. The parcel is best described as generally level at street grade, mostly rectangular in shape with frontage on Village Hill Road and Halligan Place. The Site Plan calls for a conceptual curb cut from Halligan Place that would direct traffic into a rune space parking lot located to the rear of the building: The Site Plan conceptualizes the building positioned to the south of the parcel near the frontage on Village Hill Road and Halligan Place. Utilities Utilities available to the site: include gas, electric, water and sewer. We assume the. available utility services are adequately sized and have adquate capacity to accommodate development. Wetlands The site plan reveals no wetlands.on the subject parcel. There is a recorded Order of Conditions, issued by the Northampton Conservation Commission) on 1/26/04, associated with the larger proposed Village at Hospital-Hill development. The Order of Conditions requires specific and general conditions relative to work to be performed at the development. The detailed Order of Conditions. is recorded in the Hampshire County Registry of Deeds in Book 7683, Page 291. Flood Zone The site area. within the zoning overlay is located in a Zone C flood plain. Zone- C is an area. outside of the 500-year flood .levels, and of least flood hazard. The site is located on Flood Insurance Rate Map 250167-002A, dated April. 3, 1978. Environmental Issues No soil tests were made available to the us and at the time of inspection, no adverse property conditions were noted. For purposes of this appraisal, we have assumed.that the subject site meets all acceptable standards with regard to the Massachusetts General Law Chapter 21E, "The. Massachusetts Oil and Hazardous Material Release Prevention and Response Act." Appraisal12762/Page 12 ZONING The subject land is zoned Planned Village Overlay District (PV). The zoning designation allows for most commercial, office, light industrial, tradesman, residential, and other miscellaneous uses, including civic. Most re-uses of existing buildings require site plan review/approval and site plan review/approval is also required of new developments (non-re-use). Business Planned Unit Developments (BPUDs) with mixed residential and commercial/light industrial uses are permitted via Special Permit, in accordance with specific stipulations for BPUDs. A summary of the dimensional requirements set forth by zoning follows. NORTHAMPTON PLANNED VILLAGE OVERLAY DISTRICT ZONING Dimensional requirements: Minimum lot size - Residential: Minimum lot size - Other/Mixed: Maximum height: Minimum lot depth - Residential: Minimum lot depth - Other: Minimum frontage -Residential: Minimum frontage - Other: Minimum front & side setback: Minimum rear yard setback: Percent building coverage: Floor.area ratio (FAR): Open space (in percent): Landscaped Area (in percent): Screening, Buffers, Parking: 4,000 SF, plus 1,000 SF/Unit* 40,000 SF* 55 feet 80 feet 140 feet 75 feet 120 feet 0 feet, except 35 feet from collector streets and from the edge of the PV overlay 20 feet, except 35 feet from collector streets and from the edge of the PV overlay not applicable not applicable not applicable 40%, except 30%o for building reuses Depending on use * Minimum lot size requirements are between 10-15 acres for new development (non-reuses) allowed via Special Permit.. While there are permitted uses byright, any new development for the subject requires approval via a Special Permit and Site Plan approval by the Planning Board. As of the date of inspection a Special Permit for development of the units has been received, however, final Site Plan approval is pending. The land is also encumbered by a Declaration of Covenants, Restrictions, Maintenance and Easement Agreement respective to Village at Hospital Hill-South Association, which generally pertains to roadway easements, maintenance, open space and conservation areas. Appraisal12762/Page 13 ASSESSED VALUE AND TAXES The subject has historically been exempt -property. The City of Northampton does not have accurate records. respective to land area and building improvements .and does not maintain an assessment of the property. It is our opinion that a reasonable assessment for the subject site "as is" would be similar to the market value rendered in this appraisal. HIGHEST AND BEST USE Highest and best use as defined in The Appraisal of Real Estate, Twelth Edition, published by the Appraisal Institute, is as follows: ...the reasonable and probable and legal use of vacant land or improved property, which is physically possible, appropriately supported, financially feasible, and results in the highest value. According to a. Plan of Land. provided to us the subject property contains three, vacant parcels that contain a total of 1.944 acres of Planned Village District. zoned land. There is a, proposal by Community Builders to construct 40 residential units on the site. The subject developer has received a special permit for the construction of six buildings that will house a total of 40 garden style residential units. Considering the permitted uses in this zone, it is our opinion that the highest and best use would be some type of residential development. According to the site plan, the physical characteristics of the subject site can accommodate the necessary infrastructure for the proposed.residential units units. We also looked to alternate uses of the land such as a single-family subdivision. However, a single-family.development would not allow for as dense of a development which is. an under utilization of the parcel. Also, the high infrastructure costs would not be cost effective for a residential subdivision of this size. Therefore, a single-family subdivision would not produce the highest and best use of the subject land. Based, upon all the information available to us it is our opinion that the typical developer would plan on developing the subject land with residential units similar to the units proposed for the subject property, which would produce the. highest net return to the owners/developers. Therefore, we have determined the Highest and Best Use "as vacant" to be for the development of the subject property with the permitted residential units as proposed. CD Appraisal12762/Page 14 VALUATION METUODOLOGY The purpose of this appraisal is to arrive at an estimate of the Market Value of the subject property. This is achieved by a systematic gathering, classification and analysis of data which is required in the development of the three basic approaches to value, the Sales Comparison Approach, the Income Capitalization Approach and the Cost Approach. The Sales Comparison Approach involves a comparison of the subject property to similar properties that have actually sold in arm's-length transactions or are offered for sale. Sale and asking prices may be adjusted to reflect the significant differences, if any, that exist between the sale property and the subject property and the adjusted prices are correlated into a final, indicated value. This approach demonstrates what buyers have been willing to pay (and sellers willing to accept) for similar properties in an open and competitive market and is particularly useful in estimating the value of the land and properties that are typically owner-occupied. The Income Capitalization Approach involves an analysis of the income earning capabilities of the subject property by estimating the fair market rental value of the property. This is referred to as potential gross income. Once potential gross income is determined and an allowance for potential loss of revenue due to vacancy and credit issues is applied against the potential gross income producing an effective gross income. Operating expenses are then deducted from 'the effective gross income producing an estimate of net operating income. The net operating income is then capitalized providing an indication of the present market value. This approach is particularly applicable in estimating the value of properties that are normally purchased for investment purposes. The Cost Approach. consists of estimating the replacement or reproduction cost new of all improvements, deducting accrued depreciation from all sources and adding the land value which is estimated by comparison to recent sales of similar-land. This approach has its strongest reliability in applications involving real estate with new or fairly new structures or with improvements which are designed for a special purpose and which could not be readily converted to other uses. Appraisal12762/Page 15 ' VALUATION OF THE SUBJECT It is necessary, prior to determining the appropriate valuation methodology, to identify the most likely.purchaser of the subject property since a valuation estimate should replicate the motivations and methodologies of the marketplace. The most likely buyer of the subject is a developer. Both types of potential buyers gauge value of this type of property on a per unit price indicated by similar properties and the most relevant valuation methodology is the Sales Comparison Approach. The Sales Comparison Approach is the only relevant methodology for estimating the value of the land as a vacant developable parcel and the Sales Comparison Approach is used in this analysis. SALES COMPARISON APPROACH TO VALUE The Sales Comparison Approach is defined as: "...a set ofprocedures in which a value indication is derived by comparing the property being appraised to similar properties that have been sold recently, applying appropriate units of comparison, and making adjustments to the sale prices of the comparables based on the elements of comparison. The first step in the analysis is to choose the most appropriate unit of comparison. In the valuation of the subject_property, a per unit comparison is. considered to be the most common measure of value. Therefore, we the per unit value as the measure for analysis purposes. The subject parcels are currently vacant and there is a proposai by Community Builders to construct 40 residential residential units on the site. The local market was researched for transfers of properties intended for multiple unit development that present somewhat similar locational and physical characteristics to the subject. The sales utilized were those properties'. which were considered to.be most similar to the subject property and were selected based on their comparability and similarity in regards to characteristics such as date of sale. and location:. The,sales were examined and compared to the.subject to provide a per unit value indication of the subj ect parcels.. While there were more sales that occurred in the market in thearea of the subject these sales -were not included: either due to size, use or date of sale discrepancies. The sales most similar sales to the subject and related information used in our Sales Comparison are outlined on the following pages. 3 The Appraisal Institute, The Appraisal of Real Estate, Twelfth Edition, Chicago, 2001. p. 417. Appraisal COMPARABLE SALE 1 Location: Sale Price: Sale Date: Grantor: Grantee: Legal Reference: Financing: 20 Bridge Road Northampton, MA $1,005,000. July 12; 2006 Erwin C. Warner Bridge Road, LLC Deed Book 8791, Page 26 $4,640,000 Chicopee Savings PROPERTY DETAILS Land Area: 22.92 Acres Frontage: 559.66 linear feet on Bridge Road Zoning: Urban Residential A Utilities: Water, Sewer, Gas and Electricity Topography. Slopes upward from Bridge Road GENERAL COMMENTS r~ The neighborhood lies in the Florence section of the City of Northampton, and is located in the approximate geographic center of the City. The subject is located just east of the intersection of Bridge Road and Route 9. Route 9 is the most significant highway through the neighborhood. The Florence section of Northampton is located approximately 1.3 miles north/northwest of the Northampton CBD via Route 9. Interstate 91 is the nearest highway and is accessible approximately five miles to the east (Exit 18) via Route 9: The Florence location is a suburban town center geared to a residential community. This parcel abuts a middle school and is. located in the immediate vicinity of Look Park. The.parcel contains 22.92 acres, which has been permitted for the development. of 42 . condominium units that will be age-restricted to people 55 and older. The units will vary in size from 1,791 square feet up to 2,187 square feet. The parcel is currently improved by a single- family residential: dwelling and the current owner will retain possession of the dwelling so long .as it remains in his family's name. The proposed development will be built around this dwelling. We also note that the parcel presently contains 24.54 acres however the current owner will retain ownership of a dwelling and land along the frontage on Bridge Road via a separate association. The property is located on the northerly side of Bridge Road. According to the site plan the entire site contains 559.66 linear feet of frontage on Bridge Road. The parcel is irregular in shape and has a sloping topography. The topography of the parcel varies from a low of 290 feet above sea level to 380 feet above sea level. The parcel has a steep upward slope from Bridge Road. The parcel at its higher elevations offers panoramic views of the pioneer valley as one can see as far away as Wilbraham. Appraisal12762/Page 17 The parcel is mostly vacant and heavily wooded. The only current improvements consist of the dwelling and driveway leading to the dwelling. The dwelling is located approximately 700 feet up the hill from Bridge Road and is somewhat shielded from view. The front portion of the parcel is narrower than the rear.portion,as the parcel widens heading up the hill. The land behind the dwelling is heavily wooded as is the land along the westerly boundary and the land along the rear (easterly) boundary. The latter two areas will remain wooded. The front portion of the parcel is mostly open and improved by grass and open fields. The owner indicated that there is a lot of rock within this land: The site does not contain any wetlands according to the site plans provided. The property was never formally. listed on the market as the two parties have known each other for years: This particular deal was first talked about-in 2002 and hastaken four years to come to . . fiuition. The sale price was negotiated between the two parties. As stated the parcel is currently improved by two single-family residential dwellings. The dwelling on the top of the hill will remain.and the development will be constructed. around this dwelling. This dwelling will not be . subject to the rules of the 55 and over community so long as it remains in the Warner family name.. The development will be built around this dwelling. We also note that the, seller will retain ownership of a dwelling and land (1.62 acres) along the frontage on Bridge Road via a separate association. This was done so that the project would meet minimal frontage requirements. as required by zoning. PRICE/MT: $23,929 VERIFIED BY: Ted Warner, Grantor and C & A Appraisal (BRD) SALES HISTORY: No prior transfers within the last three years. Appraisal12762/Page 18 COMPARABLE SALE 2 ( 1 Location: Summer Hill Condos, Daniel Shays Highway, Belchertown, MA Sale Price: $1,200,000 Sale Date: October 17, 2005 Grantor: Clifford, Lawrence, Janice & Gretta Tucker Grantee: Summer Hill Estates Development, LLC Legal Reference: Book 8480, Page 323 Financing: $2,550,000 to Country Bank PROPERTY DETAILS Land Area: 34.03 Acres Frontage: See Below Zoning: Rural Residential Topography. Sloping Utilities: W, S,' G, E GENERAL COMMENTS The parcel is located in the central section.ofBelchertown. The neighborhood is defined by the Route 9 and Route 202 intersection. The property is located just north of the intersection and is generally defined by Allen Street to the north, Federal Street (Route 9) to the west and south, and Daniel Shays Highway (Route 202) to the east. The neighborhood centers along Route 202, which provides the neighborhood good access from the Town of Granby to the west and the center of Belchertown from the east. Route 21 extends south from its intersection with Route 202 into Ludlow where it links with the Massachusetts Turnpike. According to grantee, Mr. Neil Jackson the site has been permitted for the development of 90 condominium units that will cater to people 55 and older. The development will be built in two stages with the first stage consisting of 14 buildings with a total of'44 garden style condominium units. The expected completion date of Phase 1 is estimated to be September 1, 2008. The development Will:consist of all two-bedroom garden style units with one-car garages. The units will contain a gross living area of 1,250 square feet and a 232 square foot one car garage. The property is located on the westerly side of Daniel Shays Highway (Route 202) and also has frontage on Federal Street (Route 9). The property is identified in the Belchertown Assessor's Office on Map 238, Parcel 57, Map 231/238 Parcel 56 and a portion of Parcel 32 on Map 238. According to the site plan the entire site contains 34.03 acres and a total of 200.72 linear feet of frontage on Daniel Shays Highway and 223.07 linear feet of frontage on Federal Street. The subject parcel is irregular in shape and has a sloping topography. The topography of the parcel varies from a low of 520 feet above sea level to 576 feet above sea level. Appraisal12762/Page 19 i The parcel has an upward slope from Daniel Shays Highway and then levels off. The slope adds to the development cost of the proposed project.. The parcel is vacant and heavily wooded. The f front portion of the parcel is narrow as.the frontage is located between two parcels on Daniel Shays Highway, one of the parcels is. improved with a dwelling. The parcel widens heading west and wraps behind the northerly side of the. dwellings.. The site also has frontage on Federal Street however this access will only be utilized for emergency vehicles. This development will abut.the rear of the, residences along the. northerly side of Pelham Road, which is just south of this development and is a cut through street that connects Federal Street with Daniel Shays Highway. .The.site contains a small patch, of wetlands in the northwesterly corner. The wetlands require that the Belchertown Conservation Commission issue an Order of Conditions because of the Massac. husetts DEP requires that any wetland area be protected. The Order of Conditions was approved in-may of 2005. Other improvements will include a 3,000. square.foot community building that will be located between Phase 1 and Phase 2. There will be a parking area with 30 lined spaces to the north of the building. There will also bea dumpster pad within the parking lot. There will also bean area designated.for van pickup... . . . This. land was not actively :marketed for sale.as this was a private sale. The grantee had been interested in this land for a number of years prior to purchasing the property. T: (based on 90 units EFFECTIVE. PRICE/UNI $13j333 (b . ) VERIFIED BY: Neil Jackson, Grantee and C &A Appraisal 912153. (BRD) SALES-HISTORY: No prior transfers within the last three years. Appraisal12762/Page 20 7 COMPARABLE SALE 3 Location: Sale Price: Effective Sale Price: Sale Date: Grantor: Grantee: Legal Reference: Financing: 581 Sheridan Street, Chicopee, MA $265,000 $285,000 December 29, 2004 Margaret M. Zmyballa BBB Construction Book 14729, Page 358 CSB PROPERTY DETAILS Land Area: 1.51 Acres Frontage: 146.55 on Sheridan Street Zoning: Residence C Topography: Generally Level Utilities: Water; Sewer, Gas and Electricity GENERAL COMMENTS This property is located just west of the subject property and abuts Sheridan estates. Development in the market area/neighborhood is mixed in nature. There are residential properties in the immediate market area consisting of single family dwell ing, condominiums, and manufactured housing units. This is a mostly rectangular lot that is level and reportedly free of wetlands. The land is currently improved with a single family cape style dwelling that was constructed circa 1941. Additional improvements include a detached garage, two small storage sheds; grassy areas, a small vegetable garden and decorative landscaping. The improvements will be demolished at a reported cost of $20,000. The site is proposed to be developed with 16 townhouse style condominium units that will contain three bedroom and approximately 1,428 square feet of gross living area. The units will also contain 2.5 bathrooms and one car garages. According to Chicopee Planning Department the site has been fully permitted for the development of 16 condominium units. The owner/developer has received.a zone change to alloys the construction of the condo project as a portion had to be rezoned from Residence A to Residence C. The developer also received definitive site plan approval as some revisions to the original plan had to be made because of Fire Department regulations. EFF. PRICE/UNIT: $17,813 (based on 16 units) VERIFIED BY: Robert Benoit & Chicopee Planner (BRD) SALES HISTORY: No prior transfers within the last three years. Appraisal12762/Page 21 pfd. COMPARABLE SALE 4 Location: Land off Center Street and Adams Street Ludlow, MA Sale Price: $ 825,000 Sale Date: July 1, 2004' Grantor: Joseph Chaves & Antonio Goncalves Grantee: Lavoie Development Corporation Legal Reference:. Book 14304, Page 220 Financing: $3,06,000-0 Woronoco Savings Bank PROPERTY DETAILS Land Area: 3.7 Acres Frontage: 51.48 linear feet on Center Street Zoning: Agricultural 50.59 linear feet on Adams Street Utilities: Water,. Sewer, Gas and Electricity. Topography:. Mostly level at street grade GENERAL COMMENTS The parcel is located across the. street from Haviland Pond in the Town of Ludlow. The parcel is conveniently located near the entrance of Interchange 7 of the Massachusetts Turnpike. Aceordingto axepresentative of the the parcel was sold with plans and the approvals in place for 33 condominium units. The units are located on an interior roadway known as Ideal Lane. The units area mix of garden and townhouse style units that offer two bedrooms with a loft or den. The garden style units have 2 full bathrooms and the townhouses units have 2.5 .bathrooms. The.first phase of the development (eight units) has sold out and.the second phase is under. construction. The condominium units have been selling in the $250,000 $275,000 range depending on amenities. PRICE/UNIT: $25,000-'(based on 33 units) VERIFIED BY:. Joseph Chaves, Representative of the grantee (BDB) SALES HISTORY: No prior transfers within the last three years. Appraisal12762/Page 22 COMPARABLE SALE 5 Location: Total Sale Price: Effective Sale Price: Sale Dates: Grantors: Grantee: Legal References: Financing: PROPERTY DETAILS 795 Sheridan Street, Chicopee, MA $427,500 $277,500 December 12, 2003, Jan. 1, 2004 & Feb. 12, 2004 Bertha Riley, Stephen, Richard and Paul Jasinski, Teresa A Perlak Authier and Authier, Inc. Book 13900, Page 127, Book 13952, Page 578 & Book 13834, Page 218 None Noted Land Area:. 4.06 Acres Frontage: 391.26 on Sheridan Street Zoning: Residence C Topography: Sloping upward from Sheridan St. Utilities: Water, Sewer, Gas and Electricity GENERAL COMMENTS This property is located in the central section of the City of Chicopee. The market area is generally defined by Sheridan Street as this is the primary connector road through the area. Development in the market area/neighborhood is mixed in nature. There are residential properties in the immediate market area consisting of single family dwelling, condominiums, and manufactured housing units. This sale consists of three parcels that were purchased from three separate owners and eventually combined. to form one larger parcel. The. parcels once combined formed an ' irregular shaped lot with a sloping topography. The topography of the parcel varied up to 28 feet in some areas. from a low of 240 feet above sea level to 268 feet above sea level. According to the owner between 12,000-15,000 yards of fill will be removed from the site and the pitch of the land will only be nine feet from the start to the end of the road into the development. The property is in the process of being improved with a total of 24 condominium units that will be located within five buildings. The units will all be single story garden style condominiums. Our conversation with the owner/developer indicates that all 24 units and the infrastructure will be completed by the end of August 2005. The development will consist of all two bedroom .garden style units. There will be 10 two bedroom units with two car garages that will contain a gross living area of 1,296 square feet, 12 two bedroom units with one car garages that will contain a gross living area of 1,036 square feet and two, two bedroom units with one car garages underneath the condo that will contain a gross living area of approximately 900 square feet. Appraisal12762/Page 23 According to the grantee, three single family building lots were carved out of the frontage on % Sheridan Street and these lots will be sold off. We have estimated that these lots will sell in the $50,000 range and as such we have factored in the projected sale to determine the effective sale price of the parcel.. The. Sale prices of the three parcels were individually negotiated between the sellers and the buyer. The buyer is a local real estate sales broker and developer who has also developed several other condominium complexes in the City of Chicopee. We note that one of the. parcels also had a single family dwelling on it at the time of sale. The dwelling remains but the land to the rear of the dwelling is being utilized for part of the development. EFF. PRICE/MT: $11,563 (based on 24 units) VERIFIED BY: Robert Benoit & Chicopee Planner (BRD) SALES HISTORY: No prior transfers within. the last three years. fil Appraisal 12762/Page ' 24. COMPARABLE SALE 6 Location: Pomeroy Meadow Road ("Pomeroy Meadow Estates'), Southampton MA Sale Price: $575,000 Effective Sale Price: $395,000 Sale Date: July 9, 2003 Grantor: DBK Realty Associates, LLP Grantee: Richard L. and Paul Truehart Legal Reference: Book. 7311, Page 268 Financing: None noted PROPERTY DETAILS Land Area: 10.8 acres Frontage: 250 linear feet/Pomeroy Meadow Road Effective Land Area: 9.44 Acres Zoning: Residential Village Topography: Level Utilities: Water, Electric, Gas and Telephone GENERAL COMMENTS This property is located on Pomeroy Meadow Road, which is approximately one mile north of the Southampton Town center and accessible from College Highway (Route 10). Pomeroy Meadow experiences a light amount of automobile traffic flow as it is a primary residential street. Route 10 is the primary roadway through town, which connects Southampton with the neighboring communities of Easthampton to the north and the Westfield to the south. This sale was of 10.8 acres. The buyer has since has spun off two residential lots along the frontage on Pomeroy Meadow Road that he will develop with spec houses. One of the buyers, Mr. Rick Truehart, placed a value of approximately $90,000 per lot on the frontage lot and he also indicated that he received offers in that range. As such, we subtracted the value of the two lots from the purchase price to determine the value of the remaining land that is permitted for 31 condo units. The parcel is irregular in shape because of the single family lots that were carved out of this parcel. These lots are located at the southern and northern end of the parcel and both have ...frontage on Pomeroy Meadow Road. The rear of the parcel is wooded at this time but most of the trees will be removed. The property will be improved with .a total of 31 condominium units that will be located within 13 buildings. The units will all be single story garden style condominiums. The developer was hoping to start the project by the end of February and no later than the beginning of March, weather permitting. The units will be built in phases and our conversation with the developer indicates that the first six units and the infrastructure will be completed by the end of August 2004. PRICE/CONDO UNIT: $12,742 VERIFIED WITH: Rick Truehart(Buyer) and C & A Appraisal by BRD SALES HISTORY: No transfers in the three years prior. i Appraisal12762/Page 25 COMPARABLE SALE 7 Location: Sale Price: Sale Date: Grantor: Grantee: Legal Reference: Financing: PROPERTY DETAILS 359 East Street (Hampton Village Condominiums),. Easthampton, MA $1,098,000 December 10 & 22, 2004 Richard Lafond & Arlene. B. Shaeffer Hampton East, LLC Book 811% Page 204 & 216 $2,450,000 to Chicopee Savings Bank Land Area: 45.32 acres Frontage: 160 linear feet on Main St, 115 on Paul St. Zoning: R-10, R-15 and R-35 Topography: Level Utilities: Water, Electric; Gas and Sewer GENERAL COMMENTS This property is located on Main Street (Route 10), which is just south of the Easthampton Town center. East' Street.experiences moderate to heavy.amount of automobile traffic flow as it is a main roadway through Town. Route 10 is the primary roadway through town, which connects Easthamton with the neighboring communities of Northampton to.the north and Southampton to the south. This sale was of 45.32 acres and wasrecorded as two.transactions as there were two different sellers.. The property is permitted for the construction of 60 condominium units 44 of which are restricted to.persons.55 and older. The land contains approximately 3.39 acres of wetlands. The units are all townhouse style :condominiums, The developer has built approximately .3 6 units and has sold 34 of the units. and.is the.process of building phase IV of the development, which will contain another. 12 units. The units range in size from 1,700 to 2,300 square feet'and contain two bedrooms and have been selling for $200,000 to $310,000. The- developer did:not purchase a permitted site. PRICE/CONDO UNIT: $18,300 VERIFIED WITH: Luke Kettles, Loan Officer.by BRD SALES HISTORY: No transfers in the three years prior. Appraisal12762/Page 26 Location 1 2 3 4 5. 6 7 20 Bridge Road, Northampton, MA Daniel Shays Highway; Belchertown, MA. 581 Sheridan Street; Chicopee, MA Center Street, Ludlow, MA 795 Sheridan Street Chicopee, MA 22 Pomeroy Meadow Southampton, MA 359 Main Street; Easthampton MA. SUMMARY DESCRIPTION OF COMPARABLE SALES Rights Financing/ Sale Date Sale Price Conveyed Sale Conditions Fee Simple Market/Arm's 05106 $1,005,000 Length Fee Simple Market/ Arm's 10105 $1,200,000 Length Fee Simple Market/ 12/04 $285,000* Arm's Length Fee Simple Market/ 7/04 $825,000 Arm's Length Fee Simple Marked 12/03- 02/04 $277,500* Arm's Length Fee Simple Marked 06/03 $395,000* Arm's Length Fee Simple Market/ Arm's 12/04 $1,098,060 Length # of Units Price/Unit 42 $23,929 90 $13,333 16 $17,813 33 $25,000 24 $11;563 31 $12,741 60 $18,300 Reconciliation of Sales Data: The sales outlined will be used to reconcile to a per unit indicator of value for the subject. There are numerous physical differences between sales and the sample properties range in unit build out from 16 to 90 units, which is a good representation for the land value for the subject's 40 proposed condominium units. It is reasonable that there would be economies of scale associated with this type of development project and that a project with 1.0-15 units. would indicate higher per unit pricing than a project with 40 units of buildout, such. as that proposed for the subject. However, it is necessary to consider the other property characteristics of each transfer, particularly location, the extent of the permitting that has taken place, local demographics, and other issues, and we believe that the subject market area has considerable value from a location and demographic standpoint and these characteristics would likely offset a major discount to potential per unit pricing associated with economies of scale. The timing of the comparable sales ranges from June of 2003 to the present, which covers a period of 38 months and is a good reflection of current market behavior. The financing for the comparables reflected market terms and conditions of sale are arm's length with respect to the subject and each of the comparables. The rights conveyed are fee simple, or absolute rights with respect to all sales. Appraisal12762/Page 27 It is difficult to correlate value to "location" with respect to planned residential developments because most of these properties are marketed to residents from within the town that have a preference to stay within the town. Therefore, each location has inherent value/marketability, unless the market area is oversupplied with comparable units to that proposed for development. Two of the seven sales outlined were proposed for age restricted developments, and this market sector appears to continue to evidence good demand in the market area. The location of the subject is considered to be good, likely equal to or superior to the other sales outlined. The greatest asset of the subject is its close proximity to the center of Northampton. Sales 1 and 4 were permitted at the time of sale and as such we feel that these sales are considered to be superior. We feel that in terms of location Sales 2, 3, 4, 5 6 and 7 are considered inferior while Sale 1 is considered most similar. Sales 1, 4 and 6 are most comparable on the basis of number of units. In summary, after analyzing the subject's location and physical characteristics to those presented by the seven sales, we are of the opinion that the subject property would be most appropriately valued within a range of $16,000 to $20,000 per unit. The mostly likely sale price being towards the middle of the refined range or $18,000. A per unit value estimate of $18,000 reveals a total "as is" Market Value for the subject of $720,000 ($18,000/Unit X 40 Units). Therefore, the estimated "as is" Market Value of the fee simple interest in the subject property as of August 22, 2006 via the Sales Comparison Approach is estimated to be: SEVEN HUNDRED TWENTY THOUSAND DOLLARS J $720,000 Appraisal12762/Page 28 MARKETING/EXPOSURE PERIOD A marketing period is the period of time between the initial offering of a property for sale and the closing date of the. sale and it is usually estimated via the marketing periods of similar properties that have taken place in the market.. Of the sales that occurred in the local market during the recent past, properties presented marketing periods between six to twelve months. Based on this data, we.are of the. opinion that if the property were offered for sale at a rice near our appraised value, an aggressive marketing campaign would result in a sale within a12-month time frame. Exposure time is the amount of time that the property would have needed to be exposed to the market in order for the property to achieve a value that is consistent with that which we have concluded in our report. Consequently, our value estimate assumes that the subject property would have been exposed to the market for approximately a six-month period and is based upon market conditions and comparable sales data that occurred prior to the effective date of this appraisal. Appraisal12762/Page 29 q 4:. ADDENDUM / -H -H C') Q 00 mm loql~ r' kR, LEGAL DESCRIPTION *t -'03M.R ! SM W.. . IWO1533 RELEASE DEED ~F THE C0MMQNWWEA1-XH OF MASSAC1 US.ErrS, acUng by and through its DIVISIO CAPUAL ASSET" MANACEMEZ'S"T AND MAINTENANCE (formerly the Division ofI Planning and Operations and renamed by Section 284 of Chapter 194 of the Acts of 1998 Executive Office for Administration and Finance having an office at One Ashbur#on Plao Boston, Massachmetts 42148 (the "Otantor") acting under authority of Massachusetts fie La,y6,s, Chapter 7, Sections 40E through 40J, as amended, Chapter 52 of the Acts of 1993 Chapter 86 of the Acts of 1994 as amended by Chapter 307 of the Acts of 1994 (collectiv "Legislation"), for consideration of One Dollar ($1.00) paid, , the receipt and sufficiency of which is hereby acknowlodgcd, hereby REL3 to HOSPITAL HILL: DEVELOPMENT LLC, a Delaware limited liability c:orpora6on ha addrem" e.fo MassDevelopment, 75 Federal Street, Boston, Masmehusetts 02110 (the "Gra without any covenants and without any representations and warranties ofa any kind whatss these certain parcels of land with the improvements thereon located In Northa peon, Hai County, Massachusetts, being a portion of the site formerly known as the Nonhampton S Hospital, and dcmmrihed as follows: Parcels A. B, E and H show!!. on that certain plan entitled "Boundary SArrvey of Laid of the Commonwealth of Massachusetts fomierlythe Northampton Stato Hospital, Northainpton..Massachusetts'+ dated December 11, 1996, last revised December 18, 1997, prepared by Roberge Associates Land Survcying and recorded with the Hanxpshire County Registry of Deeds in flan hook 183, Pages I #hrougb 6 (the "flan"), Together with all rights appurtenant thereto, containing approximately 126 acres more or according to the Plan. Reference is made to the Flan for a more particular dese°ription of Pamela, Subject to that eertaiu Conservation €Lesttiction and Public Right of Way Easement grant the Commonwealth to the City of Northampton dated February 16, 2404, and recorded %v Hampshire County Regiatty of Deeds at Book 5898, Page 39, ass to that portion of Parcel identified on the Plan a.4 "Area LI, Conservation Area, 7.0 Acres By its acceptance c deed, Grantee hereby acknowledges that tho portion of the land conveyed hereby and shc: "Area Ll" cin the Plan is subject to certain itse restrictions, terms and conditions pm, uan. &,; set forth in such Conservation Restricdon and Public Right of Way Easemrmt. Subject also to the terms of that certain Land Disposition Agreement entered into pursum USIslation between the Grantor and TW Cortupunity Buildca, Inc., a Massachusetts not ~ corporation, dated. September 5, 2002, acid worded prior hereto. Without limitation of tt #orogoing, the Land Disposition Agreement oontains, and the Land is subject to, a condit .right of reverter in favor of the motor, as set font in Section 4 (B) ofsawh Land Dispo, Agmement, and certain surviving covenants, as set forth in Article 8 ofsuch Land Oispo ~ A,grcetnent. Y Page Z of 3 3 OR t MM 13:33 Reserving to Grantor, solely as nary for the benefit of the remaining parcels of land comprising portions of the site formerly known as the Northampton She hospital as slto• the Plan which are owned by Cron€or, the right to use roads, sfeets and ways from time to located on the property hereby conveyed for the phase of access to such remaining p land (such purpose not to be construed to include parking) subject to reasonable raises and regulations imposed by Grantee with regard to sucb use. Further subject t6 and with the bc-nOlt of all easements, restrictions, rights and encumbra, record, insofar as the same are in force and effect and applicable to the premises OQTIVCYCI hereby. `the undersigned Commissioner of tte Division of Capital Asset Martagcment and Maint( hereby c ifies under penalties of pe&ry that, with respect to the conveyance effected hu he has fully complied with the provisions of Chapter 52 of the Acts of 1993, and Chapter the.Acts. of 1994 as amended. by Chapter 307 of the Acts of 19.94, and with the provisions Sectiow OF % and 401-1 of Chapter 7 of the tcneral Laws of Massachusetts. No Mas achvse t.% deed enise tax stamps are affixed hereto as nono ago required by Chaff . 644. Section i of the General Laws of Massachusetts, as amcndcd. iN WITNESS WHERHOp. the CommonweaM of Massachusetts has caused these preser signed, sealed and delivered in its name and on its behalf by David id E. Perini, the duly s ~ Y pl and authorized mmissioner of the Division of. Capital Asset Management and Mainten .of the 25th tlay of November, 2002. COMMONWEALTH OF MA,5SACHUS: Acting by and tbrough its Division ofCapitf Management and Maintenan s David B. Perini, Cohnnissioneir Division of Capital Asset Managemcnt and Maintenance htty://www.masslandrecords.com/malr/controller 9/7/2006 14- IC !I COMMONWE,A LTH OF IASS,A,CHUSETrS SU14T ELK, ss. November 32~200i Thew peg wnally appeared ft above named David B. Perini, Commissio r of the Divisir Capital Asset Management and Maintenance as aforesaid, and. wkn*wiedged the foregoiz instrument to be-his. free act and rued as CQxr miss*ioner and the free Wit. and deed of the Commonwealth of M=achnsei , before me. Not4 Public,. My cv tttiw.ion expires: mAP.SM W Notary 4ul . ~Y r.Qd111IIt3SI4fi khL3:k hq://www.masslandrecords.com/malr/controller 9/7/2006 I I CONTINGENT AND LIMITING CONDITIONS We assume no responsibility for matters legal in nature, nor do we render any opinion as to the title, which is assumed to be marketable. Any sketches, plats, maps, or other exhibits in this report are included to assist the reader in visualizing the property and we assume no responsibility for their accuracy. We have made no survey of the property. We are not required to give testimony or appear in court because of having made this appraisal report, with reference to the property in question, unless arrangements have been previously made thereof in writing. We assume that there are no hidden or unapparent conditions of the property, subsoil or structures, which would render it more or less valuable. We assume no responsibility for such conditions or for engineering which might be required to discover such factors. We have assumed that the subject site will or has met all acceptable standards with regard to any existing Federal or State hazardous waste material laws. Information, estimates and opinions furnished to us and contained in this report were obtained from sources considered reliable and believed to be true and correct. However, no responsibility for accuracy can be assumed by us. The distribution of the total valuation of this report between land and improvements applies only under the existing program of utilization. The separate valuation for land and improvements must not be used in conjunction with any other appraisal and are invalid if so used The Americans With Disabilities Act of 1990 requires, in some instances, retrofitting of buildings to maximize accessibility by persons with disabilities. Assumptions regarding cost of compliance by the owner (s) with this civil rights act, which became effective on January 26, 1992, have not been made in arriving at the opinion of value set forth herein. Please contact the undersigned in this regard if such additional work will be required for present purposes. Neither all nor any part of the contents of this report, or copy thereof, shall be used for any purpose. by anyone but the client without the previous written consent of the appraiser and the client; nor shall it be conveyed by anyone including the client, to the public through advertising, public relations, news, sales, or other media without the written consent and approval of the author, particularly as to valuation conclusions, the identity of the appraiser, or a firm with which he is connected. The appraisers have complied with the appraisal standards as promulgated by the Uniform Standards of Professional Appraisal Practice adopted by the Appraisal Standards Board of the Appraisal Foundation. The appraisers involved in this assignment worked in tandem and have experience in the valuation of properties similar to the subject and are competent in the valuation of such properties. The appraisers certify that we are appropriately licensed or certified to appraise the subject property in the State in which it is located. CERTIFICATION The undersigned does hereby certify that Barbara D. Burnham has inspected the subject property. The statements of fact contained in this report are true and correct. The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions, and are my personal, impartial, and unbiased professional analyses, opinions, and conclusions. I have no present or prospective interest in the property that is the subject of this report, and no personal interest with respect to the parties involved. I have no bias with respect to the property that is the subject of this report or to the parties involved with this assignment. My engagement in this assignment was not contingent upon developing or reporting predetermined results. My compensation for completing this assignment is not contingent upon the development or reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value opinion, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use of this appraisal. (!-iIk - My analysis, opinion, and conclusion were developed, and this report has been prepared in conformity with the Uniform Standards of Professional Appraisal Practice. No one provided significant professional assistance to the person signing this appraisal report. arbara D. B am MA License #1 18 QUALIFICATIONS OF THE APPRAISER BARBARA D. BURNHAM EDUCATION: Springfield Technical Community College Springfield, MA - Associates Degree Appraisal courses attended and examinations successfully completed: Appraisal Institute - Standards of Professional Practice Part A - 1992 Appraisal Institute -101 Appraisal Principles -1992 Appraisal Institute - 120 Appraisal Procedures -1992 Appraisal Institute - Applied Residential Valuations - 1992 Appraisal Institute - Uniform Residential Valuations - 1994 Appraising Income Properties - 2002 Appraisal seminars/courses attended: Appraiser Guide to the new URAR Form, November, 19, 1993 Understanding Limited Appraisal and Appraisal Reporting Options, July 11, 1994 Residential Appraisal Trends: Limited & New Reporting Formats/Cost Approach Seminar, June 13, 1996 USPAP Update Seminar, May 14, 1996 Evaluation & Limited Restricted Report - Residential, September 10, 1996 Business Valuation for Closely Held Businesses, September, 26, 1996 EXPO 96 - Residential, October 1, 1996 Technology and the Appraiser: Making it Work, December, 3, 1996 USPAP Issues and FNMA Guildelines Seminar, January 14, 1998 AAL Appraiser's Environmental Awareness Seminar, February 18, 1998 Fair Lending and the Appraiser, May 13, 1998 USPAP Update Seminar, September 24, 1998 Sales Comparison Approach Seminar, December 4, 1998 Appraisal Communication: Writing Convincing Appraisal Reports Seminar, May 18, 1999 Commercial Leases and Industrial Real Estate, November 22, 1999 USPAP Update Seminar, December 18, 2000 USPAP Update Seminar, December 1, 2005 State License exams successfully completed: Commonwealth of Massachusetts Licensed Appraiser Exam - 1992 LICENSES Licensed Appraiser - Massachusetts #1018 BUSINESS EXPERIENCE: Commercial Real Estate Appraiser Crowley Real Estate Appraisers, Inc. Real Estate Appraisers and Consultants Springfield, Massachusetts Residential Real Estate Appraiser Crowley Real Estate Appraisers, Inc. Real Estate Appraisers and Consultants Residential Appraiser Butova, Crowley & Fitzgerald, Inc. Real Estate Appraisers and Consultants ' Springfield, Massachusetts Account Executive MCI Communications Corporation Springfield, Massachusetts Account Executive AT&T Information Systems Springfield, Massachusetts { PARTIAL LIST OF CLIENTS I American Saw & Manufacturing Amherst College Appleton Corp. Atlantic Bank & Trust Company Bank of Western Massachusetts Bank of Boston Bank of New York Banknorth BayBank Baystate Medical Center Berkshire County Savings Bank Boston Capital Finance Corp. Bulkley, Richardson & Gelinas Charter One Bank, FSB Chicopee Savings Bank Citicorp Mortgage, Inc. Citizens Bank of Massachusetts Country Bank for Savings Easthampton Savings Bank FDIC First International Bank First Massachusetts Bank First Union Corporation Fleet Bank, N.A. Florence Savings Bank Fort James Corporation GE Capital Public Finance, Inc. Hampden Savings Bank Hayes, Miller & Breitbart Hendel, Collins & Newton The Kimball Companies Lee Bank Ludlow Savings Bank Massachusetts Housing Partnership Fund Massachusetts Mutual Life Insurance Co. Monson Savings Bank Mount Holyoke College Multibank National Park West Bank and Trust Company People's Savings Bank Prudential Mortgage Capital Company RECOLL Management Corporation Robinson, Donovan, Madden & Barry Shawmut Bank, N.A. Smith College Sovereign Bank Springfield Institution for Savings Springfield Teachers Credit Union United Co-Operative Bank Valley Community Development Corp.. Westfield Savings Bank Woronoco Savings Bank GOVERNMENT AGENCIES City of Chicopee, Massachusetts City of Holyoke, Massachusetts City of Springfield, Massachusetts City of Westfield, Massachusetts Holyoke Housing Authority Massachusetts Housing Allowance Program Springfield Housing Authority Springfield Redevelopment Authority Town of West Springfield Town of Wilbraham NON-PROFIT AGENCIES Brightwood Development Corporation Diocese of Springfield Salvation Army YMCA of Greater Springfield CERTIFICATION The undersigned does hereby certify that I. Michael F. Crowley, MAI has previously inspected the subject property. The statements of fact contained in this report are true and correct. The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions, and are my personal, impartial, and unbiased professional analyses, opinions, and conclusions. I have no present or prospective interest in the property that is the subject of this report, and no personal interest with respect to the parties involved. I have no bias with respect to the property that is the subject of this report or to the parties involved with this assignment. My engagement in this assignment was not contingent upon developing or reporting predetermined results. My compensation for completing this assignment is not contingent upon the development or reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value opinion, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use of this appraisal. r My analysis, opinion, and conclusion were developed, and this report has been prepared in conformity with the Uniform Standards of Professional Appraisal Practice. No one provided significant professional assistance to the person signing this appraisal report. I certify that the use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives. As of the of this report, ' ael F. Crowley, MAI, has completed the requirements 7the-- 7 educati progr of the Appraisal Institute. Michael FXrowley, MAI MA General Certification #571 f QUALIFICATIONS OF THE APPRAISER MICHAEL F. CROWLEY, MAI EDUCATION Western New England College - B.A., 1989 Appraisal courses attended and examinations successfully completed: Society of Real Estate Appraisers Course 101 - 1985 Society of Real Estate Appraisers Course 102 - 1987 Professional Practice Course - 1988 Society of Real Estate Appraisers Course 201 - 1989 Appraisal Institute Standards of Professional Practice Part B - 1991 Appraisal Institute Standards of Professional Practice Part A - 1992 Appraisal Institute Standards of Professional Practice Part A - 1997 Appraisal Institute Standards of Professional Practice Part B - 1997 Appraisal seminars/courses attended: General Appraisal - April 1994 Appraisal Institute Advanced Income Capitalization - May 1, 1994 - May 7, 1994 USPAP Update Seminar - November. 1, 1995 Commercial Appraisal Review - Review Appraising Seminar - December 5, 1995 Appraisal Update - March 28, 1996 Subdivision Planning for Appraisers, May 19, 1997 CT Real Estate Appraisal Update - March 25, 1998 USPAP Update Seminar - September 1998 Investment Analysis for Real Estate Appraisers - October 21, 1998 Standards of Professional Practice, Part C - September 21, 2001 Appraisal examinations successfully challenged and completed: Society of Real Estate Appraisers Course 202 -1990 Appraisal examinations successfully completed: Appraisal Institute Comprehensive Exam - 1992 Appraisal online courses completed: General Applications - February 14, 2003 Small Hotel/Motel Valuation - February 14, 2003 Analyzing Operating Expenses - January 31, 2002 State Certification exams successfully completed: State of Connecticut General Certified Appraiser Exam - 1991 Commonwealth of Massachusetts General Certified Appraiser Exam -1992 MEMBERSHIPS Member Appraisal Institute - MAI #9645 Director -Springfield Riverfront Development Corporation Real Estate Advisory Committee - Commonwealth of Massachusetts Pension Reserves Investment Management Board Director - United Co-Operative Bank President - Basketball Hall of Fame Tip Off Classic Town of Hampden Advisory Board Former Member Board of Directors of Western Massachusetts Local Chapter #104 Appraisal Institute Economic Development Council of Western, MA, 1996- 2002 Springfield Civic Center Board of Trustees; 1990-1998 Springfield Economic Development Corporation; 1991-1994 Springfield Parking Authority; 1986-1988 Corporator - Springfield Library and Museums Association, 1994 - 2001 Springfield Business Development Corporation; Chairman, 1996-1997 Springfield Chamber of Commerce, Former Executive Committee Member Director - Springfield City Stage; 1999 - 2001 BUSINESS EXPERIENCE President Crowley Real Estate Appraisers, Inc. Real Estate Appraisers and Consultants Springfield, Massachusetts Vice President Butova, Crowley & Fitzgerald, Inc. Real Estate Appraisers and Consultants Springfield, Massachusetts Smith & Reynolds, Inc. Real Estate Appraisers and Consultants Springfield, Massachusetts LICENSES Licensed Real Estate Salesman Commonwealth of Massachusetts General Certified Appraiser -Connecticut #0140 General Certified Appraiser - Massachusetts #571 General Certified Appraiser New Hampshire #673 QUALIFIED WITNESS Berkshire County Superior Court, Pittsfield, MA Hampden County Superior Court, Springfield, MA Hampshire County Superior Court, Northampton, MA Hartford County Superior Court, Hartford, CT Franklin County Probate Court, Greenfield, MA United States Bankruptcy Court, Worcester Division United States Bankruptcy Court, Springfield Division United States Bankruptcy Court, Hartford Division Massachusetts Appellate Tax Board-Boston Session Massachusetts Appellate Tax Board-Springfield Session Massachusetts Appellate Tax Board-Pittsfield Session FINANCIAL INSTITUTIONS Advest Bank Aldenville Credit Union AVCO Financial Services Bank One Bank of America Bank of New Hampshire Bank of Western Massachusetts Berkshire Savings Bank Charter One Bank Citizens Bank Clinton Savings Bank Commonwealth Mortgage Company Eastern National Bank Evergreen Bank First Mortgage Corp. Family Bank, FSB First Union Florence Savings Bank Granite Mortgage Greenfield Cooperative Bank Hampden Bank Independence Savings Bank Key Bank Lee Bank Lenders' Service, Inc Luso Federal Credit Union Manchester Savings Bank New Hampshire Savings Bank Park West Bank and Trust Company Peoples Savings Bank/Bridgeport Perpetual Savings Bank Plymouth Savings Bank Prudential Mortgage Capital Company, LLC Republic National Bank of Dallas Southbridge Savings Springfield Teachers Credit Union TD Banknorth Transamerica Relocation United Cooperative Bank U.S. Trust Wells Fargo Financial Leasing Westfield Savings Bank Albank Atlantic Bank Bank Boston Mortgage Corp. Bank North Group Bank of Boston, N.A. Bank of New York Beacon Financial Mortgage Business Lenders Chicopee Savings Bank City Savings Bank Commerce Bank Country Bank for Savings Easthampton Savings Bank First Essex Bank, FSB First Pioneer Farm Credit Bank First National Bank of New England Fleet Bank Guardian Life Granite Savings Bank Greenfield Savings Bank Home Mortgage Corporation JP MorganChase LaSalle Bank Legacy Bank Liberty Bank Maine Savings Bank Monson Savings Bank New World Bank Peoples Heritage Financial Group, Inc Peoples Savings Bank/Holyoke Pittsfield Co-Operative Primus Financial Services Queens City Savings Bank Rockville Bank .Spencer Savings Bank State Street Bank. Tolland Bank Union Capital Ware Co-Operative Webster Bank Westbank Woronoco Savings CORPORATIONS Ampad Armstrong Blum Manufacturing B & D Petroleum Beacon Companies Berkshire Industries Boston University Residential Charter School C & S Wholesalers Colebrook Community Development Funding, LLC CSX Real Property, Inc Dairy Mart Facemate Corporation Development Associates Genesee Group Companies, Inc. Gulf Oil Harvey Industries Hess Corporation Holyoke Industrial Development Corporation HTNB Institute for Community Economics James River Graphics Lunt Silversmiths Maryland Mold Inc. Mass Housing Investment Corp. Mass Mutual Life Insurance Company Massachusetts Conventional Center Assoc. Meade Corporation Mercier Carpets Merrill Lynch Relocation Management New England Farm Workers Nova Chemical Oakdale Hotels Old City Hall Landmark Corp. Partyka Resourse Proctor and Gamble Quabbin Industries R.M. Sullivan Transportation Rexnord Roofers & Slaters Local Six Flags of New England Spaulding Division of Questor Supervalue Teamsters Union Tite#lex United Parcel Services Valley Community Development Corp WestMass Area Development Corp. Western MA Bus Lines Allied Waste Avery Dennison Baystate Health System Bell Atlantic-Metro Mobile Big Y Foods Business Lenders LLC Coldwell Banker Relocation Corp. Community Builders P. C. Rexcell Corporation Cumberland Fauns, Inc. Dennison National Company F.L. Roberts Company Frederick Harris Com Gretag Imaging, Hampshire Colleg Hazen Paper Company Hess Gas Company Homequity Relocation Interbay Funding, LLC International Paper Ideal Finance Services J.M. Benson, Inc. Mass Business Development Corporation Mass Housing Partnership Fund Massachusetts Certified Development Corp. MassWest Ins. Company McDonalds Corporation Merrill Lynch Management Mobil Oil Corp. Northern Berkshire Industrial Novtex Corporation O'Connell Development Gr PackageMachinery Company Pearson Systems, Inc Peter Pan Bus Company R.E.Phelon Company Rexam Rice Oil Sisters of Providence Smith & Wesson Corp. Stanhome, Inc. Susse Chalet Corporation Tennessee Pipe Line Transamerica Relocation UPS Capital Business Credit Waste Management Westover Metro Development Corp I GOVERNMENT AGENCIES City of Chicopee, Massachusetts City of Holyoke, Massachusetts City of Pittsfield, Massachusetts City of Westfield, Massachusetts Commonwealth of MA Division of Capital Planning Mass Development Massachusetts Government Land Bank Massachusetts Highway Department Massachusetts Turnpike Authority Pioneer Valley Transit Authority Springfield Housing Authority Town of Agawam Town of East Longmeadow, Massachusetts Town of Hampden, Massachusetts Town of South Hadley, Massachusetts Town of Monson, Massachusetts United States Small Business Assoc. CAPITAL FINANCE INSTITUTIONS Bear Steams Finova Capital Company G.E. Capital J.P. Morgan Mortgage Capital Medallion Financial Group Merrill Lynch Business Financial Services, Inc. Met Life Capital AMR Phoenix Home Life Mutual Insurance Company Perpetual Life Insurance Company Prudential Insurance Massachusetts Mutual Life Insurance Company U.S.F.& G. Insurance Company NON-PROFIT AGENCIES Berkshire Humane Society Boy Scouts of America Brightwood Development Corporation Children Study Home Dioceses of Springfield Girl Scouts of America The Nature Conservancy University of Massachusetts Foundation Urban League of Springfield, Inc. Salvation Army The Grammar School YMCA City of Easthampton, Massachusetts City of Northampton City of Springfield, Massachusetts County of Hampden Department of Veterans' Services Massachusetts Business Development Fund Massachusetts Industrial Finance Assoc. Massachusetts Housing Partnership Corp. Palmer Redevelopment Authority Small Business Administration Springfield Redevelopment Authority Town of Easthampton, Massachusetts Town of Great Barrington, Massachusetts Town of Ludlow, Massachusetts Town of West Springfield, Massachusetts Town of Wilbraham, Massachusetts United State Postal Service I UTILITIES Holyoke Gas & Electric MA Municipal Wholesale Electric Co. Masspower Northeast Utilities Springfield Water & Sewer Department Tennessee Gas Western Mass Electric Company Westfield Gas & Electric Company EDUCATIONAL American International College Amherst College BayPath College Elms College Hamphsire College Holyoke Community College Lower Pioneer Valley Educational Collaborative Mount Holyoke College Smith College University of Massachusetts Western New England College I-- n7l, 09~1 Marketing Plan F The Village at Hospital Hill Phase II Route 66 Northampton, MA 01060 September 2006 ~J i Executive Summary Phase II of The Village at Hospital Hill consists of 40 units, 8 of which will be market- rate units. Four units are targeted for incomes at or below 30% AMI, and 28 will be reserved for those earning between 30% and 60% AMI . Eight units will be reserved for Section 8 vouchers. As such, TCB strives to develop - and market - the Village at Hospital Hill as a mixed-income community. The Master Plan for the proposed development, drafted by TCB, endorsed by the Citizens Advisory Committee (CAC) and the Mayor of Northampton, seeks to turn the dilapidated and underdeveloped former Northampton State Hospital campus into a thriving village community, which would include light office, light commercial and light industrial spaces, a community center, an elderly complex, as well as many other planned uses. Key issues of concern regarding the plan to rent out the market rate units include • appealing to the typical tenant • inclusion of community views in project design • safety • maintaining and marketing units comparable to those in Northampton • consistent marketing strategies until 95% rent-up is reached The Northampton rental market is classified as "expensive" with rents exceeding 30% of many household incomes. Demand for rental housing in Northampton exceeds supply and as a result these market conditions drive rental costs beyond the resources of many households, particularly moderate income families. Modern, updated private market rental units are virtually non-existent. If they do exist, they are usually found in single family or two family homes, as opposed to apartment buildings. The 2,000+ University of Massachusetts student population living in Northampton often occupy those that become available. Many times these larger houses and apartments get passed on to other students through word of mouth and rarely are available on the open market. Moderate-income households may have greater financial capabilities to find and retain housing but lack of housing stock in general is impacting the market. The current vacancy rate is estimated to be between one and two percent. Apartments, if they do become available, usually get rented the following month and rarely remain vacant unless they have been taken off line for some other reason. As the population of students and professionals in the housing market has increased, vacancy rates have declined dramatically and the cost of housing has risen significantly. This phenomenon has created an extremely competitive rental market in Northampton. Project Description TCB is now moving forward with the development of Rental Phase II of the Village at Hospital Hill. This phase will consist of 40 new units of residential rental housing for families and individuals. When complete there will be 19 one bedroom units, 19 two bedroom units, and 2 three bedroom units. All 40 units will be located in 6 newly constructed buildings. Rental Phase II of the Village at Hospital Hill will be a mixed income community. The units will be leased as follows: • 4 or 10 % of the units will be leased to households earning less than 30% of AMI, • 28 or 70% of the units will be leased to households earning between 30 and 60% of AMI, • 8 or 20% of the units will be leased at market rates Eight units will be reserved for households eligible for project based Section 8 certificates. Of the 40 units, 12 will be reserved for clients of the Department of Mental Health. These will be one bedroom apartments. Residents of the units will be provided services through one of two DMH service providers. The following chart shows the approximate size in square feet of each unit type: One Bedroom 600 Two Bedroom 1004 Three Bedroom 1250 Both the one- and two- bedroom units will include one bathroom per unit; the three- bedroom has 1.5 bathrooms. Each unit includes appliances, washer/dryer hook-up, wall- to-wall carpet, with outdoor parking. TCB will need to determine the level of amenity required to capture the market rate renter while also balancing costs within what is represented to be a finite source of financing. For further description of layout, please see site plans attached under Exhibit 16. Market Potential Analysis Rental Phase II of the Village at Hospital Hill is consistent with the goals and objectives for NSH as established by the Commonwealth, the City of Northampton, the CAC, and the Massachusetts and Northampton Historical Commissions as described above, specifically Job Creation and Economic Growth, Housing, Historic Preservation, Open 0 C", Space Preservation, and Community Participation. These goals and objectives dovetail with the criteria of Community Stabilization and Resident Empowerment. It is our goal to create a community in which people of all incomes would choose to live. Because of its historical value in Northampton, we expect that rent-up will proceed quickly. Job creation and economic growth is an equally significant goal of the overall Master Plan. TCB's vision is to create a vibrant new live work community. MassDevelopment is undertaking the commercial development of NSH and TCB will work with them to help link job opportunities on site to residents of the Village at Hospital Hill. These businesses will benefit from having employees that do not have to commute long distances to work. In addition, the residents of the community will be supported by a number of programs and organizations to help them in training for jobs, finding employment, developing careers, and/or starting new business ventures. The entities and organizations that TCB has linked with in this effort include but are not limited to: the City of Northampton, the Department of Economic Development, Northampton Housing Partnership, Valley CDC, Hampshire Community Action Commission, Franklin Hampshire Employment and Training Consortium, and the Department of Mental Health. Programs that these entities and organizations will provide include job training classes, workshops on seeking out and securing employment, funding for the creation of businesses and micro-businesses, supportive day care services, homeownership classes, and programs that promote self- sufficiency. In addition to empowering residents in their professional and economic lives, TCB will provide opportunities for residents to be empowered in their private lives. This will be done primarily by providing residents with the opportunity to have a role and responsibility in the management of the property. DMH-clients will also have an opportunity to participate in the planning and physical design of the units through a series of workshops with TCB and the architects for the project, Dietz & Company. Finally, the program as developed responds specifically to the goal of promoting housing. TCB is not only targeting low income households but reserving some units for residents capable of paying market rates, thereby creating a mixed income dynamic community that is economically diverse. This is consistent with the overall Planned Village Community endorsed by the NSH planning process. The typical renter of The Village at Hospital Hill market rate units is based on 2000 census data for Northampton. The typical renter is estimated to be a female between the ages of 24-61, of the middle class. She will be seeking multifamily housing. Our goal is to reposition the Village at Hospital Hill as an attractive, sought after housing development of choice by providing a market rate product that is competitive with market rate rental products in Northampton. We will do this by emphasizing our historic preservation and gut-rehab of two existing buildings on the campus for Phase I of the project, and by designing our townhouses to reflect that same style. As well, we will address issues of concern for the potential tenant (see "Target Market/Demographic Analysis," below). Competitive Analysis As shown in Exhibit 6, the Village at Hospital Hill rents are comparable with the market. Proposed market rents for the Village are: 1 BR $800 2 BR $1250 3 BR $1600 The optimal market rents or comparable rents (see Tables 3 and 7 in Exhibit 6) are 1 BR $950 2 BR $1,250 3 BR $1600 To the best of our knowledge, no new developments that are comparable to the Village at Hospital Hill are planned for the city of Northampton within the next 18 months. Target Market/Demographic Analysis Renters needs for this development include AM& J public transportation • open space • preservation of historic character • parking • nearby access to shops • jobs available within walking distance • safety TCB addresses these issues of concern for potential tenants in its plan for Phase II. Phase II includes 62 parking spaces and is accessible to public transportation. In addition, it preserves acres of open space and as such, adopts many facets of new urbanism. New townhouses are being built close to the street, with parking hidden behind the buildings and other urban characteristics in an effort to create a village environment, so attractive to those identified in the market demographic. TCB is working with MassDevelopment to make the campus into a live-work space, which will provide several job opportunities nearby as well as nearby access to stores. In addition, Northampton's Main Street is a short walk down the hill from the NSH. The Northampton Police Department has agreed to implement a Neighborhood Watch Program at the Village at Hospital Hill which will empower residents and foster a sense of community, in addition to making the neighborhood safe. Market and Absorption Objectives Construction is expected to commence by July 2007. TCB expects construction to complete by the Summer of 2008. Two months in advance of construction completion, TCB Property Management, which includes a site manager as well as a Portfolio Manager and an Assistant Director of Property Management, will hold a rent-up for potential tenants. Prior to this, advertisements and bulletins will be posted, and announcements made regarding the completion of the project and the availability of market-rate units (for further' description please look under "Marketing Schedule" and "Marketing Budget," below). Completion (July 2008) 99% vacancy 2 months after completion 70% vacancy 6 months after completion 30% vacancy 1 year after completion I% vacancy Due to the heavy demand for housing in Northampton, we expect the rent-up of the units to proceed quickly. The schedule above reflects a conservative estimate. Advertising and Sales Promotion TCB will use newspaper, radio, and local television ads to promote the project. In addition, public meetings will be held. A brochure is currently being developed and will be sent out to a mailing list of interested tenants. Flyers will be displayed in several public spaces. Marketing Schedule n, I r Marketing Team TCB believes that sound, professional property management practices are the cornerstone of any successful housing endeavor. We establish standards and procedures where residents are respected, involved and held accountable. Apartments, buildings and grounds are safe and well maintained. The social environment is supportive and enriching. Good property management enhances the long-term viability of a community and gives residents a sense of pride in their homes. Our property management staff demonstrate commitment, consistency, skill, ingenuity, fairness, patience and humor. For more than 30 years, the property management staff at TCB have developed these skills. We manage over 5,000 units of housing throughout the Northeast and mid-Atlantic states plus over 300,000 square feet of commercial space. We are experienced with all types of housing--townhouses, scattered site developments, mixed income properties, apartment buildings, SROs, cooperatives and high-rises. We manage for a variety of clients--resident associations, community development corporations, public housing authorities--as well as our own properties. Our site staff work at the grass roots level through daily contact with residents and the surrounding community. We are dedicated to forming alliances with residents, police, neighbors, businesses, public services, human service providers, schools, hospitals and health centers. Off-site, the technical staff supply the tools to get the job done well,. including computer software consultation, resources for reducing utility costs and ongoing training in areas like dispute mediation, resident screening and budgeting. See attached resume for Patrice Leonard, Regional Director of Property Management. Please refer to Exhibit 28 for additional lists of properties managed by TCB. Marketing Budget Attached is an estimated marketing budget for The Village at Hospital Hill. Imo, dvertising Expenses Newspaper ads $2,500 Radio ads N/A Flyers $250 Brochures $500 Si a e $700 Model Unit Expenses Furniture $2,500 Window Dressings $200 Floor Coverings $500 Various Accessories $500 Design Consultant N/A Management Expenses I el), l The Community Builders, Inc. Trish Leonard Broker of Record Regional Director of Property Management Trish Leonard is the broker of record and Regional Director of Property Management for The Community Builders, where she has worked since 1992. She is responsible for properties in the Mid-Atlantic Region and parts of the Northeast. In her years with the organization, she has had experience managing the full range of low- and mixed-income housing developments both large and small, urban, rural, elderly, family, apartments, town-houses, rentals, and cooperatives. She is responsible for overseeing the day-to-day operations and managing the operating budgets of the developments in her portfolio, supervising both the on-site and property managers assigned to each individual development. Within the TCB portfolio, Trish has been the house specialist for the HUD preservation programs, overseeing the transition and transformation of several developments from their previous status as deteriorated properties owned by a negligent for-profit owner to vital, rehabilitated properties owned by the residents or another community based non profit. With this background she became the Property Management senior staff member assigned to several of TCB's HOPE VI properties including Norfolk, VA, New Brunswick, NJ, McKees Rocks, PA and Churchill Homes in Holyoke, Mass. As such, she has developed the operating budget and all of the management related documents, ,O policies, and procedures for the ongoing operation of the housing. In recent years, Trish has become increasingly involved in training and education, both within TCB and with outside client groups. She is the chair of TCB's Property Management Training Committee and she has obtained C9P status in Spectrum tax credit training, NanMckay PHM certification in Public Housing is TCB's representative on the National Affordable Housing Management Association Executive committee and an IREM CPM candidate. She has worked with community development corporations in Pennsylvania, New Jersey, Connecticut, and Massachusetts as a consultant assisting these groups in developing property management capacities. Both within TCB and with outside clients she has provided training in property management and asset management. Prior to joining The Community Builders' staff, Trish worked for over 10 years for several real estate management companies in a variety of positions. Most recently, she worked as real estate broker in Greenfield, MA, listing and selling residential and commercial property.