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Claritydevco, LLC D/B/A Clarity Real Estate Compan ("Clarity")
1323 S 12th Street, Omaha, NE 68108
http://claritydevco.com
Mike Peter
Principal
mpeter@claritydevco.com
+1 (402) 981-3735
Yes
Tom Mcleay has over 20 years of real estate experience covering all aspects of the industry, Tom is well-seasoned to address the many challenges inherent in the real estate development process and in particular the complexities of the projects taken on by Clarity. After practicing law in Chicago, Illinois, with one of the nation’s largest law firms he returned to his hometown of Omaha and worked with local government and an Omaha-based private equity group focusing on sophisticated real estate financing and development. His varied background includes hands-on experience with international real estate divestment, local government matters, regional lenders, mid-sized businesses and real estate developers. Tom is a graduate of Boston College and the University of Iowa Law School. He holds both a law license and real estate brokerage license in the State of Nebraska. He also served as the Chairman of the Board of the Omaha Municipal Land Bank. Mike Peter served as a Financial Analyst from 2008-2014 for the Burlington Capital Group and was responsible for underwriting and project development for over $200 million in projects nationwide. Mike has in-depth experience with highly sophisticated multi-family investment modeling and risk-analysis. He has project managed and underwritten numerous projects utilizing Federal Historic Tax Credits, State Historic Tax Credits, Low Income Housing Tax Credits, New Market Tax Credits, the Valuation Incentive Program, and numerous other financing mechanisms. Mike graduated from Creighton University in 2009. Neeraj Agarwal served as in-house counsel for a real estate development company through 2014. As in-house counsel, he negotiated and drafted a variety of sophisticated transactional, real estate and finance-related documents, and spearheaded projects relating to EB-5 financing, New Market Tax Credits, Low Income Housing Tax Credits, Historic Tax Credits, and Tax Increment Financing. Neeraj is a graduate of Georgetown University and the University of Wisconsin Law School. Burke Harr served eight years in the Nebraska Legislature. In the Legislature, he introduced and passed legislation on affordable housing. In his practice of law, he has worked with Nebraska New Market Tax Credits, Low Income Housing Credits, and Nebraska Historic Tax Credits. As an advocate for affordable housing, Burke is looking for new and innovative ways to meet the demand for more affordable housing in Nebraska. Burke is a graduate of the University of St. Thomas and the University of Notre Dame Law School. SYDNEE SCHEINOST Sydnee Scheinost has more than a dozen working in real estate with a focus on multi-tenant unit development. She has a demonstrated history of working in the real estate industry and marketing industry. Skilled in negotiation, sales, Marketing, new construction lease up, sellers, and investment properties. Sydnee is an Accredited Residential Manager A.R.M (R) with a focus in Property Management from IREM (Institute of Real Estate Management) and CAM designation from the National Apartment Association - NE. Sydnee is a graduate of Doane University.
Tom McLeay with is the founder and managing member. Each project creates different organizational flow, partnerships, and investors which create different organizational charts.
Clarity has developed over $500 million worth of commercial, residential, and mixed-use real estate projects together, including both historic renovations and new construction. New construction market rate projects include Little Bo Bungalow and Flats (107 units), Soul Hill Rowhouses (36 townhomes), Blackstone Corner, Blackstone Depot, and Blackstone Station and Union. New construction LIHTC projects include Blair High Residences (192 units), Sorensen Apartments (120 units), Hillside Rows (32 units) and 30 Metropolitan Place (112 units). Historic projects include the Colonial Apartments and the Blackstone Hotel (now known as the Cottonwood Hotel) , both of which have contributed to the tremendous revitalization of the Blackstone District, and the Drummond & Firestone, which is part of the increasing activity on Omaha’s historic Automobile Row in Midtown Omaha. Clarity’s principals have been involved in the development of over $500 million in multifamily real estate nationwide. They bring depth and experience from inception to completion and stabilization of the project. Clarity has wide-ranging experience in affordable housing. Clarity has completed multiple Low-Income Housing Tax Credits (“LIHTC”) projects in Omaha and across the nation, and consequently, are well versed in LIHTC and its advantages and short comings.
27 Leavenworth
34500000.0
24000000.0
Capital project
27 Leavenworth (“project”) located at 2615 Leavenworth St., Omaha, NE will serve as the first large-scale 100% affordable new construction multifamily housing project combing multiple income criteria in the Omaha areas. This project would place a 15-year Land Use Restriction Agreement (“LURA”) on the property to insure enforcement of lower rents. Rents would then be based on limits set by Housing and Urban Development (“HUD”) 9% LITHC transactions, and some market rate rents. At least forty percent (40%) the tenants will be tenants that qualify for 9% LIHTC housing with an income of 80% or below of the Average Median Income (“AMI”). Their rent will be consistent with the rent set by HUD for individuals living in 9% LIHTC projects. The rent for a new one-bedroom apartment would be capped at $794.000. At least forty percent (40%) of the tenants will be tenants that have income between 80%-120% of AMI. Their rent will also be discounted and capped at 1.2 of the HUD rates (HUD+). Their rent for a new one-bedroom apartment would be $953.00. Approximately twenty percent (20%) of the tenants will have no income limitations and will pay market rate. The market rate rent for a new one-bedroom apartment is $1150.00. For the non-market rate section of the project, the goal is to limit rent to no more than 30% of a household’s income using Section 8 vouchers. OHA has more vouchers than landlords willing to rent. Each month hundreds of vouchers go unused. This project will support a more diverse income demographic at a lower price per unit. As a result, tenants are able to pay a lower rent, and as an individual increases their income, they will no longer be forced to move out of their home. Tenants will be able to stay in the same home longer. This allows for more stability for the tenants and for the neighborhood The Project is a result of Clarity’s continued dedication to building high quality affordable housing combined with its goal of developing such affordable housing in core urban areas of Omaha. Unlike LIHTC projects, it is not contingent on other NIFA dollars and will be completed by September 2025.
• Designed Updated and Completed (December 2023) • Site Prep Work and final negotiation of prices (January 1, 2023-May 15, 2023) • Contracts Finalized (May 15th, 2023 - July 1, 2023) o General Contractor will be required to file and to follow the city of Omaha’s Economic Equity and Inclusion Plan o General Contractor will be required to voluntarily follow HUD’s Section 3 program which requires the General Contractor, to the greatest extent possible, provide training, employment, contracting and other economic opportunities to low- and very low-income persons. • Funding Approved (June 2023) • Construction (July 2023-Novmeber 2023) o Construction begins (July 2023) o Construction mid-point (March 2024) o Construction substantially completed (July 2024) • Full Occupancy (September 2025).
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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) 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)
Multimodal Transportation (i.e., enable connectivity through driving, biking, taking transit, walking, and rolling) Policy (i.e., develop or improve context-sensitive education, finance, health, training, zoning, etc.) 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.)
COVID-19 exposed the need for affordable housing that many families in urban Omaha are facing. “Historically Redlined neighborhoods have high concentrations of cost burdened households’ (Omaha Housing Affordability Action Plan dated September 21, 2022 ((“OHA Plan”), pg. 28). The draft of the OHA Plan states “[a]t current building rates, Omaha and its jurisdiction will not keep pace with projected growth. Resulting in either severe shortage of housing or pushing that construction activity into the larger region, further stretching expensive infrastructure and increasing transportation costs” higher mortgage interest rates. This project will also address substantial demand for affordable housing by providing the Leavenworth Street Business district with an affordable housing option. The project will also be the first housing project with new construction in the area in over 50 years. Traditionally, an affordable housing project such as this would use LIHTC. LIHTC is an effective, but inefficient, tool to create affordable housing. The developer competes for a limited number of dollars. The developer is then given tax credits which it then sells at a discount to a third party. The process usually amounts to $.75 to $.80 are use on the project for every $1.00 of tax credit given. LIHTC has high administration and sales cost. The project will be 134 affordable apartments with a mix of 90 one-bedrooms and 44 two-bedrooms. Sizes will average 700 square feet for one-bedroom units and 1,000 square feet for two-bedroom units. The interior style of the units will be modern industrial. There will be elevator access. Elevator service is important to seniors. The project is aligned with the Community Needs listed earlier Sustainable Community—The project creates and enhances the housing in the area. The project allows tenants to have more diversity and for tenants to live their longer rather than being forced out when they earn more income. The project will be located less than two blocks from the proposed street car which will provide addition mobility along with being located close to the Interstate and 24th street, a major north south artery for public and private transit. Multimodal Transportation—The project will be located less than two blocks from the proposed street car and is in the transit orientated development (“TOD”) In addition, the project is located near the Interstate and 24th street, a major north south artery for public and private transit. For mass transit to be successful, it requires density. The project will be located on several lots that are currently empty or has a building that is not being utilized properly. The project will not only leverage existing transit lines, but it will create demand for the use of the new street car. Quality of Life—The project, with its new investment in the neighborhood, will increase neighborhoods stability and safety. By having new long-term tenants, the tenant will be more invested in the neighborhood. In addition, the project will have green space for its tenants. The project will have new planters and landscaping to beautify the Neighborhood. The project will impact employers and employees near but outside the boundaries of the project. Employees that work in Omaha, whether it be in the Downtown or Midtown Omaha submarket or not, will finally have an apartment option that is more affordable. Policy-The project furthers the goals of the city of Omaha’s effort to develop affordable housing as described in the OHA Plan. By 2035, Douglas County will need an additional 18,385 affordable units and an additional 7000 rental units with rents below $1000. The project will help overcome the long-lasting impacts of Redlining and zoning practices that isolated housing and types and incomes.
The project works well to address the needs set forth in the Visioning Workshops. Clarity is a locally owned development company with roots in the community going back generations. When it comes to housing there is a concern of out of state companies coming into Nebraska, purchasing housing, and raising rents. “An Omaha rental survey, that included over 19,000 rental units in the Omaha Market, found that rents have been increased for 50% of the units in the last 12 months.” (Omaha Housing Affordability Action Plan drafted September 21, 2022, pg. 12). The Visioning Workshops listed housing as a major concern. Specifically, the Workshop found a need for high quality affordable housing, options for mixed income housing, and housing for seniors. With the unique 15-year LURA as discussed above, we address many of the needs of the Workshop and concerns regarding raising rents. By building elevatored 5 story building, we are address the concerns of density, lack of property, and accessibility for all Omahans including the disabled and seniors.
This unique public private partnership of public and private dollars creates the opportunity that could not normally exist. By forgoing LIHTC, we are able to mix incomes that would not normally be cost effective. This form of financing, not only allows for more diversity, but also allows the public dollars to be spent more efficiently. The project aligns with the priorities of LB 1024, which was to create empower the people and the neighborhood, to create the skills and the infrastructure to enable people to not just survive, but to thrive. The project will create quality affordable housing, but it will also create jobs in the neighborhood for the neighbors. Clarity agrees to avail itself to the City of Omaha’s EEIP, to work with the Omaha Chamber of Commerce REACH Program, and to follow HUD’s Section 3 Program. The project will help overcome the long-lasting impacts of Redlining and zoning practices that isolated housing and types and incomes.
The project will create the following jobs: • This job will create an estimated 14 full time construction jobs with an anticipated payroll of $58,000. • The job will also create an additional 4 jobs for soft costs related to the project. Once completed, the project will create the following jobs: • Two full time property management jobs at $50,000 a year • One full time sales/marketing job at $45,000 a year • One full time property maintenance job at 45000 a year • 2 part time property maintenance jobs at $20,000 to 25,000 a year • One full time clerical/administrative job at $40,000 a year As stated above, the project will create quality affordable housing, but it will also create jobs in the neighborhood for the neighbors. Clarity agrees to avail itself to the City of Omaha’s EEIP, to work with the Omaha Chamber of Commerce REACH Program, and to follow HUD’s Section 3 Program.
Once completed, the project will create the following jobs: • Two full time property management jobs at $50,000 a year • One full time sales/marketing job at $45,000 a year • One full time property maintenance job at 45000 a year • 2 part time property maintenance jobs at $20,000 to 25,000 a year • One full time clerical/administrative job at $40,000 a year
• This job will create an estimated 14 full time construction jobs with an anticipated payroll of $58,000. • The job will also create an additional 4 jobs for soft costs related to the project.
The construction jobs will comply with Davis Bacon.
Clarity agrees to avail itself to the City of Omaha’s EEIP, to work with the Omaha Chamber of Commerce REACH Program, and to follow HUD’s Section 3 Program. It will also comply with Davis Bacon
The Community Benefit of the project include: • Safe affordable and quality housing; • Mixed Income Housing; • Safe Senior living with elevatored apartments; • Improved neighborhood safety; • Improvement of vacant lots; • Increased access to public transportation and major corridors; • Increased streetscape; • Job training and new jobs; and • Improvement of quality of life
Quality affordable housing improves the physical, social, and economic conditions within neighborhoods can also impact short- and long-term health outcomes. These conditions may include crime and violence, environmental conditions, and access to public services such as public transportation, law enforcement, and schools. As a result, poor-quality housing in disadvantaged neighborhoods further exacerbates health disparities.
This is a pilot program to show the advantages of financing a high quality affordable housing project using financing outside the limitations of a LIHTC project. This project allows for better long term stable tenants while also allow greater diversity of incomes and thus creating a greater diversity of tenants across abilities, demographics, workforces, age groups, and income levels.
It is difficult to measure the direct results, but studies indicate quality housing effects public health, public transportation, education, law enforcement, and other public services.
These may be measured by NIFA or UNO.
By making the neighborhood more appealing and adding density, we believe commercial development will follow.
No
No
2615 Leavenworth Street, Omaha, NE. The site currently is vacant lots with an unused building.
Within one or more QCTs
see below
Yes
Yes
Yes
Yes
Yes
Yes
Yes
Construction Budget Source of Funds Owner/Developer Equity $2,000,000.00 ARPA $24,000,000.00 Construction loan/Permanent Debt $7,000,000.00 TIF/PACE $1,500,000.00 USE of FUNDS Land $2,224,000.00 Construction Costs $22,897,000.00 Public Improvement/Site Work/Envir $790,000.00 Contingency $1,717,275.00 Interest on Const. Loan $1,602,790.00 Architecture/Engineering $822,255.00 Developer Fees $4,446,680.00
Funds will be used to pay down the expense of construction and for fees related to construction.
Yes
On going expenses will be paid by rents on the apartments.
The project will rely on private funding along with TIF/PACE
No
Clarity proposes to put $2M of its own funds into the project. In addition, Clarity will guarantee a note for $7M. The $7M note is interest only. The rents are not enough to allow for payment down of the principal. Finally, Clarity will work with the City of Omaha to obtain TIF/PACE
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Documentation of site control (proof of ownership, option, purchase contract, or long-term lease agreement) Plans and detailed descriptions, including pictures and a map of the site location/surrounding area