148
Hoppe Development
5631 S 48th St, Suite 220, Lincoln, Nebraska
www.hoppedevelopment.com
https://www.linkedin.com/company/hoppe-development/;
Jake Hoppe
Principal
jake@hoppedevelopment.com
+1 (402) 489-1600
Yes
Our development team includes Fred Hoppe, General Counsel, who has 40 years of real estate development experience; Evan Clark, Development Associate, who spent 4 years at DED and is familiar with policy and procedures relating the state and federal funding for housing programs; Carly Davis, Program Manager, has extensive knowledge and experience with real estate transactions, equity and title closings, and management of federal funding; Teresa Kile, Director of Compliance, who spent 14 years at NIFA and is an expert at affordable housing compliance, and Ben Kunz, Development Associate, who is a licensed architect and serves as both an in-house design capacity and project management from design through construction. This project is a collaboration with Golden Village Home, which is co-founded and co-owned by Paw Bway Htoo, a former refugee from Burma, and Hannah Vlach (formerly Wyble) . Both have 23 years of combined experience working with Omaha's refugee communities.
See Exhibit 1 - Organizational Chart, attached, for both organizations.
Hoppe Development is a thought leader in affordable housing development. Prior to 2019, the company developed over 500 units of housing utilizing a variety of affordable housing tools, including LIHTC, HOME funds, Historic tax credits, TIF, and conventional financing, and delivered affordable rental housing and home ownership opportunities, and new construction and renovation. Since 2019, the organization has continued to utilize these tools and has developed, or is in the construction process on over 700 units of affordable rental and ownership opportunities. Proudly, in a period of challenging construction execution with high inflation, Hoppe Development has been able to close or are preparing to close on every tax credit allocation secured, and has a 100% track record for meeting compliance requirements for timely project completion. Hoppe Development regularly collaborates with municipalities and nonprofits throughout the state, and is working with Lincoln Community Foundation, the Front Porch Initiative, Nebraska Housing Resources, Inc., Centerpointe, Community Crops, Northwest Community Action Partnership, and South of Downtown Community Development Organization to deliver unique affordable housing solutions and supportive services. Golden Village Homes co-founders/co-owners have over two decades of combined experience working successfully with Omaha's diverse refugee communities. Both Paw Bway Htoo and Hannah Vlach (formerly Wyble) have extensive personal achievements in relation to work done to improve conditions for the many refugees who call Omaha home. Together, they built the non-profit, Restoring Dignity, from the ground up, which has resulted in over 17,000 refugees being served over the past four years. Additionally, they worked together to fight for housing justice reform. In 2019, after extensive testifying and working with Omaha's City Council, the first ever mandatory rental inspection ordinance in Omaha was passed and over 90,000 rental units have since been registered and are in the process of being inspected. At the beginning of 2022, Htoo and Vlach were tasked with building the infrastructure for Omaha's first furniture bank, in an effort to provide incoming Afghan families, and other refugees, with necessary furniture to get started in their new homes. They successfully did so in less than a year. Every problem that Htoo and Vlach are tasked to solve, they do so with expedience, grace and excellence. See Exhibit 7 - Team Resume for details of both Hoppe Development and Golden Village Homes' accomplishments.
The Welcome Center - Revitalization Project to Support Arriving Refugee Population
23400000.0
4000000.0
Capital project
This project proposes to acquire and renovate an existing multi-family building, along with a co-located commercial building, for the purpose of providing a unique and innovative bridge housing product for new arriving refugee families that will operate alongside both traditional affordable housing and enable organizations that provide supportive services to operate from the campus. It represents a collaboration between Hoppe Development, a highly experienced affordable housing developer, and Golden Village Homes, an organization with a deep history of advocacy and support to new refugee families in the Omaha area. The project will combine $4 million of ARPA funds with $23.4 million of funding from the 4% Low Income Housing Tax Credit Bond program (LIHTC Bond). The ARPA funding specifically will support site acquisition for the project and the renovation of a commercial building co-located with the residential building, providing 15,000 square feet that will enable the project to deliver supportives services targeted to the needs of the resident population. The 4% Bond Financing will support the preservation and creation of 158 affordable housing units which will be operated in two distinct models: 1) a bridge housing model, providing housing solutions for 3-6 months for newly arrived refugees, and 2) permanent affordable, providing long-term affordable housing for marginalized families. The housing units and supportive services will enable the project to present unique solutions to specifically target populations underserved in the current housing market, with a focus on providing solutions for newly arriving refugee families. This project will directly create both temporary and permanent jobs and will indirectly create jobs via the supportive services provided that will enable individuals to seek employment successfully. The target location for this project is Jackson Tower, located at 536 S 27th St, Omaha, NE 68105 and within a Qualified Census Tract (QCT). Discussions with the current owner, Omaha Housing Authority (OHA), have commenced, and the availability of the building has been confirmed. If this location is not available, a secondary, proximate and similarly scaled location in a QCT has also been confirmed.
This project anticipates site acquisition by December, 2023, all ARPA funds spent by December, 2024, and construction entirely completed by March, 2025 (see Exhibit 2 - Schedule). This project will be entirely completed well in advance of July, 2026.
1.0
Fundamental Change (i.e., a proposal that will continue to elevate North or South Omaha's presence and perception within the region, significantly improving the lives of area residents through physical development) Long-Lasting Economic Growth (i.e., a proposal that will foster gainful employment opportunities and financial investment in the area, leading to the creation of generational wealth and widespread economic vitality in North and South Omaha) Transformational (i.e., a proposal that will help energize, recharge, or spur significant and favorable advancements in North or South Omaha's function or appearance)
Quality of Life (i.e., create or enhance natural spaces, mixed uses, parks, safety, etc.) Sustainable Community (i.e., create or enhance housing, services, education, civic uses, recreation, etc.)
Our proposal seeks to bring to reality the transformative vision of renovating a large housing tower (or similar structure) located within the qualified census tract, in order to create a multi-use facility featuring (1) a one-of-a-kind refugee integration center with "bridge housing,” and (2) permanent affordable housing units that specifically cater to low income larger or multigenerational families. This facility will fundamentally bring about positive change to two populations (1) the almost 1,000 new refugees who are legally resettled in Omaha every year and (2) larger and multigenerational low income families who traditionally have a difficult time finding affordable housing. It will also create long-lasting economic growth, as new refugees will be more prepared to enter into specialized industry training programs, such as construction and the trades. See Exhibit 8. Omaha has a substantial workforce deficit that impedes economic growth, and incoming refugees can play a tremendous role in filling this gap. However, under the current resettlement system, refugees are not sufficiently supported upon arrival to enable them to enter most skilled job training programs. This campus will co-locate a refugee integration center with temporary housing, and provide the support services, like intensive English as a Second Language (ESL) classes on site, to accelerate job readiness and support community integration. This project is intimately connected to North Omaha, as data from local refugee serving agencies shows that over 90% of refugees live in North Omaha. By ensuring that refugee families are appropriately integrated and prepared for higher income opportunities, this project will deliver long-lasting economic growth to North Omaha. This proposal meets the “Sustainable Community” and “Quality of Life” needs as it provides a significant number of affordable housing units and delivers a mixed use solution. It will deliver a new type of “bridge housing,” a concept used in other cities when resettling refugees, but not yet established in Omaha. “Bridge housing” is temporary housing that newly arriving refugees live in for 3 to 6 months, before being placed into a permanent home. While living in this temporary housing, refugees will have access to on-site integration services, such as intensive ESL classes, casework support, medical care, mental health care, home integration classes (cleaning, fire safety, appliance usage, etc.), driving classes, workforce development and immigration/legal services. At the end of the 3 to 6 months, refugees will have the skills they need to successfully integrate into Omaha, including enough English language skills to begin skilled trade training. An office building next door (or within a building tower) will create a seamless integration process through strategic partnerships with existing non profit organizations. Revenue from commercial rent will help subsidize the housing units. For more information about what a refugee is and how the federal resettlement program works, please refer to “Exhibit 8 - Supplemental Information”. This project is eligible for ARPA funds under the “Development, repair, and operation of affordable housing and services or programs to increase long-term housing security” under the presumptive eligibility category “Presumption 1: The of Low-Income Housing Tax Credit”. In addition, this project will selectively demonstrate an affordability period beyond the 20-year minimum period required by ARPA funds. This proposal has a high likelihood of success. Discussions have commenced with Omaha Housing Authority (OHA) with regards to the site proposed, and OHA has committed to starting the process for disposition (see Exhibit 3). While this project relies on securing a 4% LIHTC Bond allocation from the Nebraska Investment Finance Authority, Hoppe Development has an extensive track record of securing tax credit allocations (See Exhibit 7 - Team Resume).
Alignment One: The community needs development that fits with the cultural context of the community being served. Golden Village Homes intrinsically understands what it takes to work with diverse refugee communities. Our co-founder and co-owner, Paw Bway Htoo, is a former refugee from Burma and is also a community leader among the Karen people. Both her and co-founder and co-owner Hannah Vlach (formerly Wyble), have a combined 23 years of experience working directly with Omaha’s refugee communities. For this project, refugee community members and refugee serving agencies will be directly involved in project planning and decision making. Alignment Two: Developing housing within the formerly redlined communities. We are only looking at properties within formerly redlined areas in North and South Omaha, and our focus is on revitalizing an underdeveloped area without creating gentrification or future displacement. All units will be operated consistently with the ARPA guidelines of affordability for households making less than 65% of Area Median Income (AMI) . Alignment Three: Create additional residential unit configurations specifically designed to meet the needs of target families. One of the top priorities of this housing development is to create three, four and five bedroom affordable units that specifically cater to large and multi-generational households. Members of the Omaha Refugee Task Force Housing Subcommittee regularly discuss the severe lack of larger housing units for incoming refugee families. Alignment Four: Create both temporary and permanent jobs, with a specific focus on creating these opportunities for members of the refugee, immigrant and BIPOC communities. This project will open up job opportunities for members of the refugee community in the skilled trades, which is a need expressed by many who often feel trapped in factory jobs. Unemployment rates in North and South Omaha are relatively high and persistent poverty remains a serious problem. This project will create dozens of temporary construction and demolition jobs, and we will specifically hire contractors who utilize workforce development programs that provide opportunities for refugee, immigrant and BIPOC workers. Once the building is renovated, it will be run by the community it serves, creating additional permanent jobs. Language diversity among staff will be a top priority in the hiring process.
The Omaha Economic Recovery website states that the “Recovery Grant Program is to foster desirable transformation, fundamental change, and long-lasting economic growth in the communities of North and South Omaha.” The LB 1024 strategic priorities of housing, employment supports, and job creation are aligned with our proposal. This proposal also aligns with the strategic priorities identified by the Treasury Department’s guidance for the use of ARPA dollars. Covid-19 detrimentally impacted Omaha’s refugee communities, mainly due to worker exposure in meat packing plants. While many individuals in Omaha were able to work from home, the vast majority of refugees were considered essential workers, due to their food production jobs. Covid-19 infected the refugee population at rates much higher than other groups at the beginning of the pandemic. Many households lost weeks of work, due to being sick, and many struggled to make rent and mortgage payments. Due to constant exposure to Covid in the factories, many refugees struggled substantially with mental health and emotional fatigue. During the pandemic, rents increased and substantially impacted the financial well-being of low-income households. According to data from various Omaha refugee serving agencies, the vast majority of refugees have incomes that are close to or below the federal poverty level. The increase in rent during the Covid-19 pandemic put a financial strain on many refugee households. Our proposal aligns with LB1024’s strategic priorities to help communities within qualified census tracts that were disproportionately impacted by the pandemic. Per data from local refugee serving agencies, 95% of Omaha’s refugee population predominantly live in the qualified census tracts, with 90% in North Omaha. Additionally, the vast majority of refugees are placed in housing within the qualified census tracts, by refugee resettlement agencies.
This project will create transformative, long-lasting economic growth by providing a critical bridge housing solution, with onsite supportive integration services, that enhances the ability of Omaha to receive new foreign-born individuals, as well as preserving affordable housing generally. With the proposed renovation plan, this project will serve over 950 individuals per year, with approximately 600 served through the bridge housing solutions. The study “The Economic and Fiscal Impacts of Immigrant Populations on Nebraska and Omaha” published in August, 2021, details how every additional foreign-born individual in Omaha creates $34,000 of total direct and indirect spending in the community, which contributes to .25 jobs created per individual, as well as contributes $112,000 of additional production in key industries, which contributes to .53 direct and indirect jobs. If this project facilitates the transition of 600 foreign-born individuals per year, this will create an annual economic impact of nearly 470 new permanent employment opportunities and over $90 million in increased production and economic activity annually, which represents 9,400 permanent jobs and $1.8 billion in economic activity over the 20 year period of ARPA focus. In addition to the new arrival population, there are significant benefits in stabilizing the homeless and housing vulnerable population. Using national and local estimates, the cost of a homeless individual is $30,000 per year more than the costs associated with providing that individual with supportive housing. If this facility can serve 350 additional individuals otherwise at risk for homelessness, it would potentially create an additional $10.5 million in annual impact, or $210,000 over the 20 year period of ARPA focus. Note: the ARPA focus period derived from the ARPA period of affordability.
540 - Combining both the construction and operation of the facility with the direct and indirect impacts of serving additional foreign-born individuals and reducing homelessness, this project will create nearly 540 permanent jobs within the community. This figure combines the 470 referenced above, with an additional 70 jobs supported through the direct and indirect effects of the operations of the facility.
270 - The construction and operations of the facility will create approximately 270 temporary jobs, with average salaries of approximately $50,000 per job (per National Association of Homebuilder Estimates for New Multifamily Construction, as well as the preliminary facility operating plan). Our construction plan specifically prioritizes ways to ensure that these opportunities accrue to contractors within the QCT and that, if contractors are selected from outside of the QCT, those that have incorporated a workforce development program targeting individuals in the QCT will receive priority in subcontractor allocation.
The average wage in both temporary and permanent is $50,000.
This project will ensure immediate jobs from North and South Omaha through the construction and operation of the facility represents a substantial and sustained investment in the North and South Omaha community. Hoppe Development has a unique vertically integrated development and construction capability which enables us to have enhanced control over subcontractor selection. While we have not yet determined if Hoppe will perform the General Contracting work or collaborate in selecting the general contractor, in either scenario, Hoppe Development will follow or compel our general contractor to follow a specific Construction Contracting Plan designed to provide opportunities to businesses located in the qualified census tracts. In addition to identifying subcontractors from the Qualified Census Tracts, we will additionally provide preference to subcontractors that partner with workforce development initiatives that provide opportunities to new arrival families and individuals from Qualified Census Tracts. This will result in a sustained and persistent increase in economic capacity. We will also follow a similar Operations Contracting Plan to identify and prioritize maintenance and operations subcontractors from QCTs. See “Exhibit 9 - Hoppe Homes Contracting Plan” for additional detail.
Our proposal directly benefits the community in a variety of tangible and direct ways. (1) Ensuring that new refugee families are successfully prepared to integrate into North and South Omaha communities, thus impacting job readiness and increasing the number of qualified workers for trade related industries, (2) the creation of “bridge housing” for new refugee families, which currently does not exist in Omaha, (3) the creation of permanent affordable housing units, some of which will be larger 3, 4 and 5 bedroom units that cater to the needs of larger and/or multigenerational homes, (4) it protects against gentrification and (5) it provides neighborhood stabilization. To expand on these points, the foremost benefit of this revitalization project will be the tremendous impact it has on the lives of thousands of individuals who will pass through its doors over the years. Revitalizing a family focused multi-unit building will also provide intrinsic benefits to Omaha as a whole. Creation of jobs is a forefront benefit, particularly for marginalized communities. At the beginning of the project, construction contractors will be chosen who work with workplace development programs that focus on training refugees and individuals from the BIPOC community. Once complete, the building will be run by the community it serves. The establishment of “bridge housing” with an onsite refugee integration center, will allow for refugees to enter into skilled trade training programs, thus filling a desperate need in Omaha. The creation of “bridge housing” and permanent affordable housing units is another top benefit. Omaha is severely lacking in affordable housing, and this proposal will create 158 units. Additionally, “bridge housing” (where incoming refugees will stay for 3 to 6 months) and social services being on-site, will provide for seamless integration of incoming refugees. The better integrated refugees are to their new environment, the better Omaha does as a whole. Recent studies have shown that refugees are more likely than US born citizens to become entrepreneurs. In 2015, refugee owned businesses in America created $4.5B and refugee workers contributed $20.9B in taxes. It is to Omaha’s economic benefit to properly integrate refugees, as the overwhelming majority become strong contributors to the overall economy. Our proposal protects against gentrification. By turning a housing tower or similar structure into affordable housing units, prime property locations will be protected from being bought by developers looking to gentrify by building high end apartments. Finally, our proposal helps with neighborhood stabilization. If a housing tower or similar structure is in an area experiencing high levels of violence and other crimes, this project will bring stability to the neighborhood, and will create a stronger sense of community, along with the creation of a park.
Our proposal directly improves the quality of life of incoming refugees and other vulnerable families through stable, affordable housing and “bridge housing.” By having refugee services on site, we will create a seamless integration environment for our new refugees. We will not be creating programming, but will be bringing refugee serving agencies together under one roof (either through satellite offices or full office relocation). Services offered to incoming refugees will include: refugee resettlement offices on site, direct caseworker access, medical care, mental healthcare, ESL classes, driving classes, home integration classes, immigration/legal services and workforce development. Access to on-site, intensive ESL classes during the integration process will allow for refugees to enter into skilled trade training programs, which is a tremendous need in Omaha and the greater Nebraska area.
Part of the strategic planning on this project involves finding ways to make this a scalable and replicable project. This project has similarities to the accomplishments of the non-congregate housing site for individuals experiencing homelessness in Omaha. One of the largest predictors of stability in permanent housing is the quality and safety of any temporary and bridge housing that came prior. The non congregate site project repurposed a traditional hotel at 22nd & Douglas in Omaha, Nebraska, and has provided temporary housing through the pandemic for referred individuals who meet eligibility requirements. The success of this project includes a high rate of exits to permanent housing, as well as a low percentage of those individuals returning to the hoemlessness system in the one-year period of time following. The project team of the non congregate site will provide applicable assistance and structure for our project, if selected and funded. Additionally, there are several cities in the United States who have implemented a model similar to the one we are proposing. We will draw from their experiences, in order to prevent the “re-creation of the wheel.” Organizations we will model after are: Welcome Housing, LEAP Housing, Boise, Idaho https://www.leaphousing.org/welcome-housing This program provides temporary housing to refugee families. Their main focus is on refugee resettlement through temporary housing, hospitality, and relationship building. The organization works with resettlement agencies to create a caring and supportive environment. The refugee family stays in this location while they wait for a long-term rental. This program helps save rent expenses, reduces the number of times they have to move, and protects against isolation. This program benefits families because it provides a direct connection to community support, renter training and education support, and a connection to needed resources. This support and initial transition housing provide families with confidence and the skills they need in their new environment. New Anchor, Oakland, CA. https://newanchor.org/hosted-housing-program/ This program helps individuals with stability, grounding, and relationships that help foster a smoother transition in the Bay Area. In this model, the individual/family has 3-6 months that gives them time to adjust, transition, learn and lay a foundation for living and working in the United States. With this model, refugees pay a monthly rent that allows them to establish credit and strengthen their budgeting/planning skills. Families are provided with enrollment in English classes, connecting with appropriate local resources, and in-depth and ongoing culture. Additionally, they have access to medical and mental health services. Housing Connect, Salt Lake City, Utah https://housingconnect.org/about/who-we-are/our-board/ This organization develops and manages housing properties tailored to lower-income individuals' specific needs, including refugees. The housing program has many services. One of the services they offer is Refugee Employment Supportive Housing (RESH) where they provide housing assistance to refugee families for up to 12 months when they first arrive. The tenant will pay the rent during their time of participation. Through this program, families have access to counselors and case plans to help with the process.
We can measure the following outcomes: (1) The number of jobs created, both temporary and permanent with the repurposing of the housing tower or other similar structure. (2) Number of refugee families exiting from bridge housing into permanent housing (3) Efficiency of wrap around services provided including measurement of the benefit of having on-site services (ie. reduction of transportation costs, reduction of work absenteeism to have to travel to different agencies, reduction of medical appointment no-shows, etc) (4) Number of families utilizing on-site services (ie. ESL class attendees, immigration/legal services provided, casework appointments, medical appointments, etc).
Both Golden Village Homes and Hoppe Development will be responsible for measuring these outcomes. Golden Village and Hoppe Development will provide all reporting required for ARPA as requested by the Economic Recovery Committee. Economic Opportunity will be measured in collaboration with the selected general contractor by dollars contracted with specific target contractors, job opportunities created through workforce development initiatives, and the wages for each job created. Golden Village Homes practices secure and equitable data collection, including basic demographics, job placement status, placement into permanent housing, satisfaction surveys and interviews with families. This data is used to internally monitor program fidelity and to inform program practices.
The acquisition and renovation of Jackson Tower will attract significant additional investment. This project will leverage the $4 million ARPA request with significant additional resources, including $10.7 million in tax exempt bonds, $1.9 million in Tax Increment Financing, $1.8 million in deferred fees, and $9.0 million in tax credit equity, for a total co-investment of $23.4mm. For every $1.0 from ARPA, this project is securing $5.8 additional dollars of investment. In addition to the project itself attracting additional investment, there will be substantial second order effects of facilitating the growth of North and South Omaha’s new arrival population. Growth in the labor force is one of two key determinants in a region’s maximum sustainable rate of economic expansion. By ensuring that this growing labor force is ready and able to participate in the local economy, we ensure that business growth and expansion can occur. We expect second order investment in the community as a result of employers recognizing their ability to utilize a work-ready employee base.
Yes
This project represents a collaboration between Hoppe Development, a highly experienced affordable housing developer, and Golden Village Homes, an organization with a deep history of advocacy and support to new refugee families to the Omaha area. Hoppe Development will act as the developer of the project, with Golden Village as a consultant to the development process. During the construction process, Golden Village and Hoppe Development will define a unique operating model that meets the needs of the target families. The two partners will operate the building collectively, with Hoppe Development ensuring tax credit compliance, and Golden Village ensuring the appropriate programmatic operating model. This relationship is supported by a memorandum of understanding. Omaha has a variety of non-profit organizations that provide supportive services to refugees. However, these agencies are located across the city, and not under one roof. This creates a significant barrier for many new refugee families, who often lack transportation and have difficulty navigating the communication system to set up appointments. Our proposal involves the creation of commercial space within our housing tower/structure, which will be offered at a below market rate to refugee serving agencies. This will allow for incoming refugees to have direct on-site access to all needed classes and services that will set them up for success. Prospective partners with whom we have existing relationships (MOUs have not been formalized at this time, however letters of support from several agencies are attached to this proposal): Refugee Empowerment Center, a program of Immigrant Legal Center: One of two resettlement agencies in Omaha who provide critical services to new refugees: caseworker, housing placement, job training and placement and ESL classes. Lutheran Family Services: One of two resettlement agencies in Omaha who provides critical services to new refugees: caseworker, housing placement, job training and placement and ESL classes. International Council for Refugees and Immigrants: Refugee led casework, mentoring and legal assistance organization. Restoring Dignity: Provides in-home integration classes that teach refugees how to live in a healthy and safe manner. Classes include: healthy home education (cleaning), home/fire safety, home owners maintenance classes and housing advocacy classes. Intercultural Senior Center: Provides direct support to seniors over the age of 50. Refugee Women Rising: Supports refugee women through driving classes, education scholarships and cooking opportunities. Nebraska Afghan Cultural Center: Refugee led casework and integration support for Afghan refugees. East African Development Association of Nebraska: Refugee led food support and casework for Somali refugees. Karen Society of Nebraska: Refugee led casework support for Karen refugees.
The relationship between Hoppe Development and Golden Village Homes is memorialized in a formal MOU. We have secured letters of support from East African Development Association of Nebraska, International Council of Refugees and Immigrants, Intercultural Senior Center, Karen Society of Nebraska, Omaha Refugee Task Force Housing Subcommittee, and Refugee Women Rising. See Exhibit 6 - Agency Support Letters.
No
We propose acquiring Jackson Tower, located at 536 S 27th St, Omaha, NE 68105, located in Qualified Census Tract 40 (31055004000). This building is an existing Omaha Housing Authority (OHA) affordable housing asset that was built in 1970. It has significant deferred maintenance, and will require large-scale reinvestment to maintain its usefulness as a residential complex. OHA is committed to finding a community benefit use for the building such that it can remain affordable housing and receive the reinvestment necessary. Please see Exhibits 3 - Additional Location Documents and Exhibit 10 - Physical Needs Assessment for additional detail.
Within one or more QCTs
See Exhibit 3 - Additional Location Documents
Yes
Yes
No
No
No
Costs were determined utilizing the Physical Needs Assessment of the building (see Exhibit 10 - Physical Needs Assessment). We incorporated additional costs to reflect construction inflation since the report date, as well as increased scope to reflect the renovation of the commercial building. This increased scope was estimated by Hoppe Development general contracting team, who has significant recent experience overseeing construction to prepare commercial space for lease.
No
This project requests $4,000,000 in ARPA funding to support a gap in the project financing created by specifically by the acquisition of the site and the creation of commercial units. The total cost of the project is anticipated to be $27.4mm. The 4% Low Income Tax Credit Bond (LIHTC Bond) program provides significant resources to the conversion of the residential units associated with this project. This non-competitive allocation process, administered by the Nebraska Investment Finance Authority, enables us to secure significant private equity investment through the creation of tax credits associated with the acquisition and rehabilitation of an existing building, in exchange for a commitment to operate the building consistent with compliance and affordability requirements. However, the creation of minimal-rent commercial space for supportive service partners and the acquisition costs of the land, exceed the amount of debt and equity generated by the residential portion of the project. The ARPA funds will close this gap in the proforma, and enable us secure our tax credit allocation and finalize a renovation of the building. All assumptions below are confirmed through discussions with our financing partners and consistent with our past LIHTC Bond project structuring. They key inputs to this cost estimation are the following: · Building Acquisition Cost: While we have not arrived at a price for the OHA tower, we have discussed their willingness to sell the building at a reduced cost for a community benefit purpose. OHA will have to support the existing families as they transition to alternative housing options. We believe an acquisition cost of $2.0mm is an appropriate placeholder as we continue to negotiate, and will sufficiently meet OHA’s building disposition requirements. · Property Conditions & Assessment Report: This report estimated the cost of improving the facility in 2020 to a current standard of repair. We used this initial estimate as a baseline, and inflated it by our estimate of the cost increases to construction between 2020 and when this project will start, in 2023. We included additional funds for the potential reconfiguration of the individual units to better support the transitional housing needs. · Commercial Construction Estimation: We utilized the estimated square footage of the commercial space multiplied by a renovation constant of $125 / sqft, consistent with our experience in renovating commercial space for new uses. · Soft Costs Estimates: These estimates are consistent with our past projects. The key estimates for sources are as follows: · Securing $9.04 in tax equity through securing an allocation of 4% Low Income Housing Tax Credits, generating $26.9mm in eligible project basis, and monetizing tax equity at a price per credit of $.85. · Permanent debt amount of $10.7mm at a 1.2x Debt Service Coverage Ratio, 40 year amortization, and 6% interest rate; a typical expense ratio, and an average unit rental rate consistent with 50% Area Median Income, all consistent with previously closed LIHTC bond financings. · Tax Increment Financing (TIF) of $1.8mm estimated by assuming a post-construction valuation increment of $7.8mm, eligibility for 20 year TIF. · Deferred Development Fee of $1.8mm, estimated by assuming a maximum fee deferral for tax credit projects of 10 years of projected income, as limited by our tax equity partners. See Exhibit 4 - Proposal Budget & Sources and Uses.
Grant funds will be used to acquire the facility and renovate the commercial space to be leased to organizations that provide supportive services to the tenant population. See Table in Exhibit 3 - Additional Location Documents.
No
The operating income from apartment rental and commercial rental is anticipated to generate a significant positive annual cash flow, as well as an annual replacement reserve. In addition, the tax credit process requires the creation of significant operating and debt service reserves to ensure financial stability. This additional cash flow will ensure that the project is fiscally sustainable and fund all operating needs. Additional cash flow, beyond which is utilized in operations, can be reinvested into supportive services for the tenants. See “Exhibit 5 - Proforma” for additional detail.
We anticipate making a 4% Low Income Housing Tax Credit Bond (LIHTC Bond) application to the Nebraska Investment FInance Authority (NIFA). This specific program represents a non-competitive process to award bond capacity to projects that meet certain underwriting criteria and operating commitments. Hoppe Development has a long track-record of securing tax credit allocations in both competitive and non-competitive scenarios, and anticipates no issues in securing this allocation. We also anticipate securing Tax Increment Financing (TIF) by going through the redevelopment process with the City of Omaha. The target location is within the Park East Redevelopment Plan area, making it eligible to apply through the city process. We have every reason to believe this will be supported by both city staff and council. See "Exhibit 4 - Proposed Budget & Sources and Uses".
Entity: Nebraska Investment Finance Authority Request: 4% LIHTC Bond Allocation, with no state tax credit match Status: To be submitted March 17, 2023 Expected Decision Date: June 16, 2023 Entity: City of Omaha Request: Tax Increment Financing Status: To be submitted March 17, 2023 Expected Decision Date: June 16, 2023
Tax Credit Equity and ARPA funding support.
This project is scalable in that it will demonstrate the need, and an operating model, around bridge housing in the Omaha community, and further demonstrate the need for larger unit sizes. This information can inform future housing development activities, and be replicated in the affordable housing community. This replication will enable North and South Omaha to continue to attract new arrival immigrants into the community, and enhance the economic development.
This project is not able to be completed in smaller components.
Hoppe Development is committed to contributing working capital to assemble the project application, as well as deferring development fee to ensure a successful project. Our preliminary estimate for this contribution is in excess of $2,000,000.
1.0
1.0
1.0
1.0
Additional Location Documents (see application for list) Data table of uses (breakdown of how the requested funds will be used for your proposal) Documentation of site control (proof of ownership, option, purchase contract, or long-term lease agreement) Environmental assessment of subject site. Is the property a brownfield site? Organizational Chart Plans and detailed descriptions, including pictures and a map of the site location/surrounding area Pro Forma Proposal Budget/Sources and Uses Request Rationale Documentation Schedule