174
Clarity
1901 Howard Street, Suite 300, Omaha, NE 68102
http://www.claritydevco.com/
Neeraj Agarwal
Principal
nagarwal@claritydevco.com
+1 (402) 981-3735
No
Please refer to the uploaded organizational chart.
The principals of Clarity have developed and have in progress approximately $500 million of commercial, residential, and mixed-use real estate projects, including new construction and historic renovations with a primary focus on utilizing tax credits to develop affordable housing. They bring depth and experience from inception to completion and stabilization of the project. Clarity has wide-ranging experience with Low Income Housing Tax Credits (LIHTC), Tax Increment Financing (TIF), Historic Tax Credits (HTC) and New Market Tax Credits (NMTC). The principals of Clarity have completed multiple 4% LIHTC projects and are consequently well versed in the 4% LIHTC and tax-exempt bond financing application and approval processes. New construction affordable housing/Low Income Housing Tax Credit (LIHTC) projects include Blair High Residences aka Aspen Grove (192 units), Sorensen Apartments aka Prairie Springs (120 units), Hillside Rows (32 units) and 30 Metropolitan Place (112 units). All of these projects have been successfully been completed and are at or above 93%+ occupancy as of today. New construction market rate projects include Blackstone Corner, Blackstone Depot, and Blackstone Station and Union. Historic projects include the Colonial Apartments, which contributed to the tremendous revitalization of the Blackstone District, and Drummond & Firestone, which is part of the increasing activity on Omaha’s historic Automobile Row in Midtown Omaha.
18howard aka Bauhaus
36011835.0
6000000.0
Capital project
LOCATION This transformative mixed-use project will be located on two contiguous parcels located at 1819 Howard Street and 1810 St. Mary’s Avenue, Omaha, NE 68102 that is notably a mere block away from City Hall and the District Courthouse. TIMELINE The project will start construction by July 2023 and will be completed by March 2025. OVERVIEW 18Howard (“project” or “Project”) will serve as the first and largest scale 100% affordable housing new construction project in the Downtown Omaha area. The project will consist of a 5-story structure that will consist of 120 units on floors 2-5 and over 14,000 square feet of commercial space. The commercial space will consist of two primary uses: (a) a grocery store/min-market that will be approximately 6,000 square feet and (b) three restaurants that will focus on healthy eating options. NOTE: As one of the few minority developers in the state, Neeraj Agarwal is focused on ensuring that (1) at least 10% of the subcontractors for the project are either (a) minority or women-owned businesses and (2) most, if not all, of the commercial tenants are minority or women-owned businesses. The project is a result of Clarity’s continued dedication to building high quality affordable housing in Omaha combined with its goal of developing such affordable housing in Omaha’s urban core. For too long, affordable housing in Omaha has been essentially limited predominantly to North Omaha. While there is, of course, a need for affordable housing in this area, there has always been a strong need for more affordable housing in Midtown and Downtown Omaha that has grown substantially in the last ten years given that most developers have focused exclusively on producing more market rate apartments in these areas and this has resulted in the vast majority of individuals between 18-40 years old who work in Downtown and Midtown being unable to afford the increasingly high rent of market rate apartments. 18Howard will be an answer to this problem and will serve as the first of multiple affordable housing projects Clarity is planning to develop in Midtown and Downtown Omaha as part of its larger effort to address the strong demand for affordable housing in Omaha’s urban core.
TIMELINE The project will start construction by July 2023 and will be completed by March 2025. MILESTONES REMAINING MILESTONES: To date, the project has achieved all major milestone required to proceed with commencing construction with the following limited exceptions: (1) BUILDING PERMIT: obtaining a final building permit (anticipated January-February 2023) (2) FINANCIAL CLOSING: targeting to financially close the project in the summer of 2023 upon receipt of the OERA financing and an allocation of LIHTCs from the Nebraska Investment Financing Authority (NIFA). MILESTONES TO DATE: The project is ready to proceed within construction in the next nine (9) month primarily because the project has achieved numerous milestones to date. DESIGN: the project has completed final all construction documents. BVH is the project architect, TD2 is the civil engineer and ETI is the mechanical/electrical/plumbing (MEP) engineer. CONSTRUCTION BUDGET: the project has finalized the construction budget. Lueder will be the general contractor for the project. ZONING/ENTITLEMENTS: the project has received all necessary zoning and entitlement approvals. TAX INCREMENT FINANCING (TIF): the project has received all necessary TIF approvals. PROPERTY ASSESSED CLEAN ENERGY (PACE): the project has received all necessary PACE approvals.
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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)
Other Infrastructure (i.e., develop or improve broadband, business districts, roadways, sewer, etc.) Sustainable Community (i.e., create or enhance housing, services, education, civic uses, recreation, etc.)
The proposed project, 18howard, will specifically address the identified community needs below: SUSTAINABLE COMMUNITY 18howard will address this specific community need as it will result in the creation of 120 newly constructed, high-quality affordable housing units. There is an undeniable need for more affordable housing in Omaha. This has been increasingly more necessary in recent years due to the seemingly ceaseless production of market rate housing that, along with recent inflation, is elevating rents to the point that one-bedroom units are frequently on average over $1,000/month in various parts of Omaha. 18howard will help address this need for affordable housing through the addition of 120 affordable/LIHTC units that will range from studios to one and two-bedroom units in the heart of Downton Omaha with rents starting at approximately $600/month for a studio. While the project site is not technically located in a qualified census tract (QCT), it is notably immediately adjacent to census tract 19.00, which is a QCT and is surrounded by QCTs. One major objective of the 18howard project is to combat the stigma often associated with affordable housing in two specific manners: (1) by elevating the aesthetic and quality of affordable housing apartments to a higher level such that they are aesthetically and qualitatively indistinguishable from market rate apartments and (2) by ensuring that projects like 18howard are as safe and secure as possible by incorporating numerous security features such as secured entry, security cameras and daily and nightly security patrols into the project. OTHER INFRASTRUCTURE 18howard will address this specific community need as it will result in the (1) creation of outdoor communal spaces/pocket parks and (2) addition of numerous businesses in the central business district in downtown. Relative to (1), 18howard will result in the creation of outdoor seating areas/pocket parks that will be an amenity for residents of the affordable housing units in 18howard as well as residents of other nearby apartment projects. Relative to (2), 18howard will result in the creation of grocery store/mini-market and multiple restaurants focused on healthy eating options. These commercial uses will fill in gaps for a grocery store and healthy-focused restaurants in the central business district in downtown Omaha.
18howard aligns with the findings in the Visioning Workshop Summary in the following ways: INUSFFICIENT INFRASTRUCTURE + DEVELOPMENT THAT FITS WITHIN THE CULTURAL CONTEXT: Through the creation of 120 affordable housing units, 18howard addresses the finding that there is a need for newer and more affordable housing. ACCESS AND TOOLS TO LEVERAGE COMMUNITY RESOURCES: 18howard addresses this finding is it is exemplary of the tremendous positive impact leveraging community resources can have relative to directly addressing and helping address the substantial issues like the lack of high quality and safe affordable housing in the Omaha MSA. Specifically, 18howard leverages numerous community resources such as (1) Tax Increment Financing (TIF) (2) Property Assessed Clean Energy (PACE) and (3) Low Income House Tax Credits (LIHTCs).
The proposal aligns with LB1024’s strategic priorities because the project’s creation of 120 high quality and newly constructed affordable housing units immediately adjacent to a Qualified Census Tract will result in a fundamental change to a critical area of Downtown Omaha that will ultimately improve the lives of area residents.
There will be approximately twenty-two (22) temporary construction jobs created as a result of 18howard. The wages for these jobs are anticipated to range between $50,000-$70,000. There will be approximately eight (8) permanent jobs created as a result of 18howard and specifically the commercial portion of the project on the first floor. The wages for these jobs are anticipated to range between $40,000-$60,000.
There will be approximately eight (8) permanent jobs created as a result of 18howard and specifically the commercial portion of the project on the first floor.
There will be approximately twenty-two (22) temporary construction jobs created as a result of 18howard
The wages for the permanent and temporary jobs are anticipated to range between $40,000-$70,000.
18howard will result in immediate and ongoing opportunity to contractors in QCTs given its focus on ensuring that at least 10% of the subcontractors on the project are minority and women-owned businesses that are located in QCTs in the Omaha MSA. 18howard will result in immediate and ongoing opportunity to businesses in QCTs given its focus on ensuring that majority of, if not all, of the commercial tenants on the first floor are minority and women-owned businesses that are located in QCTs in the Omaha MSA.
The project will benefit the community in two specific manners: (1) HIGH QUALITY AFFORDABLE HOUSING: The project will improve the local neighborhood by transforming two surface parking lots into a 5-story building that will primarily consist of 120 desperately needed, high-quality affordable housing units with rents ranging from $595 for studios to $795 for 1-bedroom units and $1,100 for 2-bedroom units. The project will be unique because of the intentional. The project is unique because the developer, Neeraj Agarwal, has made a commitment to utilizing higher-end materials on both the exterior and interior of the building that are often found in luxury market rate projects in the Blackstone District and throughout Downtown Omaha. This commitment is part of greater effort to counteract the stigma often associated with affordable housing projects looking cheap or as if they were constructed from lower quality materials (e.g. primarily vinyl siding). Due to this voluntary election to utilize higher quality materials, the project construction cost is substantial (i.e. in excess of $180 per square foot) and in line with what a market rate project would cost to develop on a per square foot basis. (2) COMMERCIAL BUSINESSES: The project will also improve the local neighborhood and increase livability in the community because it will result in the addition of key services to the area, specifically, (a) a grocery store/mini-market, which is desperately needed in the Downtown area and (b) 3-4 restaurants that will focus on eclectic array of food such as African cuisine, which are currently lacking in the Downtown/Midtown area.
The project will contribute to community sustainability through the addition of (1) newly constructed, high quality affordable housing and (2) multiple commercial businesses that provide key services, such as a grocery store and restaurants. The addition of desperately needed affordable housing to the Downtown area is key because it allows lower-to-moderate income individuals who work in this area and adjacent areas the opportunity and ability to reside nearby where they work. Currently, this is not feasible given the seemingly constant production of luxury market rate apartments with high rents and the lack of newly constructed and high-quality affordable housing in the area. The addition of a grocery store and multiple restaurants focused on African and other cuisines that are underrepresented in the Omaha MSA will improve the quality of live for area residents and workers as these commercial tenants will help provide affordable and nutritious food options.
The project will demonstrate innovation primarily through (1) the use of higher-end exterior and interior materials for the development of affordable housing that are often only used in luxury market rate projects and (2) the utilization of projecting covered balconies that will provide a unique aesthetic to the exterior façade.
The project will result in the creation of a number of permanent and temporary high-wage job opportunities.
This can be measured by the relevant City and County agencies obtaining data regarding the number of and wages associated with the permanent and temporary jobs the project will create through their respective subagencies and departments.
Yes. The project will serve as catalyst for more development in the Downtown/South Omaha area because the successful completion of this $35MM+ building, which includes numerous key commercial services (e.g. grocery store and restaurants), will provide real estate developers that have held off on developing property to the south of the project site due to the lack of any activity a compelling reason to finally develop newly constructed projects in the area.
Yes
The following is a list of current and prospective partnerships and how these partners have or will participate: 1. TRUE PURPOSE: True Purpose is a current partner that is a 501(c)(3) founded and led by an African-American couple, Tashiara and Tyrece Wilson. True Purpose will be supportive service partner that will help provide supportive services relating to employment and life skills and will also coordinate with other supportive service partners that focus on education, health and wellness. 2. AIM INSTITUTE: AIM Institute is a prospective partner that will serve as technology partner that will provide onsite and offsite technology related classes on subjects such as coding. 3. MODUS: Modus is a current partner and is a high-end coworking space that is located immediately across the street from the project site 1901 Howard Street. Modus will offer discounted coworking memberships to tenants at the project so that tenants have convenient, affordable and fully-equipped coworking space they can utilize in this new hybrid world when they want to change things up from working at home or need professional meeting space for meetings, workshops, etc.
True Purpose
No
1819 Howard Street and 1810 St. Mary's Avenue, Omaha, NE 68102.
Adjacent to one or more QCTs
Please note that we have uploaded documentation in response to the above first three bullet points. With respect to the fourth bullet point relating to "environmental assessment of subject site”, please note that the project site is not a brownfield site and does not have any environment issues associated with it given the two parcels compromising the project site are surface parking lots.
Yes
No
No
Yes
Yes
Yes
Yes
The rationale for the dollar amount requested is that the amount requested the gap financing required for the project to be financially feasible. Specifically, there is a substantial gap in the project primarily for the following reasons: (1) 4% LIHTC PROJECTS REQUIRE GAP FINANCING: 4% LIHTC projects like 18howard always requiring gap financing of some kind. This is because the 4% LIHTC is a relative shallow subsidy compared to its 9% LIHTC counterpart and this results in a need for gap financing to make a 4% LIHTC project financially feasible. This is particularly so when (a) high interest rates result in lower loan proceeds and (b) inflation results in higher construction costs. (2) HIGHER INTEREST RATES RESULTING IN LOWER LOAN PROCEEDS: interest rates having increased substantially over the last 18 months, which has resulted in the project losing over $1MM in loan proceeds. (3) INFLATION RESULTING IN HIGHER MATERIAL AND LABOR COSTS: inflation resulted in increased material and labor costs which has increased construction costs by millions of dollars.
Grant funds will specifically be utilized as gap financing mechanism needed to actually construct the proposed affordable housing project.
Yes
The project function normally after the initial investment, specifically: (1) Construction: the grant funds will be utilized to partially fund the construction of the project. (2) Construction completion and path to economic stabilization: After the project is constructed, the 3rd party property manager, Seldin, will coordinate with the the developer to lease up the residential apartments. Similarly, Seldin’s affiliate OMNE, and other local commercial brokers will work to lease the commercial portions of the project. After the residential apartments and commercial portions are fully leased up such that project is able to pay its permanent loan monthly debt service at a debt service coverage ratio (DSCR) of 1.15 and above for 3 consecutive months, the project will have satisfied the economic stabilization requirements set forth by the LIHTC investor and permanent lender. (3) After satisfying the economic stabilization requirements: After satisfying the economic stabilization requirements, developer and the property manager will coordinate weekly to ensure the project is remains financially successfully and specifically remains above 90% occupancy at all times and is able to service permanent debt without any issues.
LIHTC: applying for an allocation in December 2022 and anticipate an award by February 2023. PNC Bank is anticipated to be the LIHTC investor. TIF/PACE: have obtained all necessary approvals. Permanent/Construction loans: have financial commitment from a national private lender, Redstone. Developer and owner financing: have financial commitments from the developer and ownership.
LIHTC: applying for an allocation in December 2022 and anticipate an award by February 2023. PNC Bank is anticipated to be the LIHTC investor and has provided a financial commitment. . TIF/PACE: have obtained all necessary approvals and a financial commitment from Pace Loan Group. Permanent/Construction loans: The project has received a financial commitment from a national private lender, Redstone. Developer and owner financing: The project has received financial commitments from the developer and ownership.
Yes, the requested gap financing funds.
While the project can be replicated and arguably be developed on a large scale, it cannot be completed in smaller components primarily because the project consists of one 5-story building.
The organization will be invested approximately $2,500,000.00 via its developer and owner affiliates through a combination of (1) $1,000,000 of owner contributions and (2) $1,500,000 long term investment of development fees.
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Additional Location Documents (see application for list) Documentation of site control (proof of ownership, option, purchase contract, or long-term lease agreement) Organizational Chart Plans and detailed descriptions, including pictures and a map of the site location/surrounding area Pro Forma Proposal Budget/Sources and Uses