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RBC Capital Markets

Strictly Private and Confidential. RBC Capital Markets. Tax Credit Equity Group. August 20-22, 2014 Prepared for New Mexico Housing Summit. Successful Approaches to Public Private Partnerships Luna Lodge & The Sundowner. Problem Identification Project Description Public Benefit

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RBC Capital Markets

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  1. Strictly Private and Confidential RBC Capital Markets Tax Credit Equity Group August 20-22, 2014 Prepared for New Mexico Housing Summit

  2. Successful Approaches to Public Private PartnershipsLuna Lodge & The Sundowner • Problem Identification • Project Description • Public Benefit • Project Participants • Development Financing

  3. Section 1:Problem Identification

  4. Problem Identification Vacant motels lending to blighted conditions Need to jumpstart Near Heights Metropolitan and East Gateway Sector Redevelopment Plan Areas Lack of quality affordable housing options in the area Desire to preserve the historic integrity of Route 66 • Redevelopment Plan Objectives: • Eliminate blight and prevent further deterioration of property values in the area  • Revitalization of vacant motel properties • Stimulate public and nonprofit/private investment in the area  • Private equity and federal resources leveraged through local investment • Increase the number of jobs in the area and increase the patronage of local businesses  • Construction job creation and attraction of new residents to support local businesses • Empower residents while furthering economic self-sufficiency and sustainability  • New affordable and supportive housing options 3

  5. Section 2:Project Descriptions

  6. Luna Lodge & The Sundowner Luna Lodge Adaptive reuse of 1950s 28-room motel listed on the National Register Redeveloped into 30-unit (14 units in original motel building + 16 new construction units on an adjacent parcel) residential community Community space, including a demonstration kitchen for the residents seeking to acquire skills in the food industry 10 units set-aside for persons with Special Needs Utilized Low Income Housing and Historic Tax Credits as a component of financing The Sundowner Adaptive reuse of 1950s 110-room motel Redeveloped into 71-unit mixed-income residential community Includes a community room, computer room, tot lot, limited access gate, courtyard, covered patio/picnic area, laundry facilities, community garden 18 units set-aside for persons with Special Needs Utilized Low Income Housing Tax Credits as a component of financing 5

  7. Luna Lodge BEFORE Vacant & Dilapidated Blighting Influence 6

  8. Luna Lodge AFTER 7

  9. The Sundowner BEFORE Vacant & Dilapidated Blighting Influence 8

  10. The Sundowner AFTER 9

  11. Section 3:Public Benefit

  12. Public BenefitsLuna Lodge & The Sundowner • Elimination of Blighting Influences • Furtherance of Redevelopment Plan objectives • Reactivation of long vacant properties • Much needed investment in an undercapitalized area • Increased public safety • Increased supply of affordable housing • 101 new affordable residential dwelling units (10% - 50% market advantage) • 28 units for special needs households (on-site supportive services) • Introduction of street frontage activating uses • Historic preservation • Architecture consistent with Route 66 historic past • Spotlights the potential for motels to serve as an asset in the community • Winner of several historic preservation awards • Leverage of non-local resources • Local resources served to secure private equity, federal subsidy, and state loan/grant funding

  13. Section 4:Participants

  14. Luna Lodge & The Sundowner Public US Department of Housing & Urban Development New Mexico Mortgage and Finance Authority City of Albuquerque Metropolitan Redevelopment Agency Private NewLife Homes, Inc. RBC Capital Market Garrett Smith Ltd. Local General & Sub Contractors JL Gray Company 13

  15. Section 5:Project Financing

  16. Project Financing Luna Lodge (TDC ~ $4.8MM) Tax Credit Equity - $3,151,529 (66% of total) NM MFA First Mortgage - $138,000 City of Albuquerque - $1,241,523 NMED - $50,000 FHLB AHP - $210,000 Deferred Developer Fee - $31,796 The Sundowner (TDC ~ $9.3 MM) Tax Credit Equity - $5,428,296 (58% of total) NM MFA First Mortgage - $500,000 Primero Grant & Loan - $274,844 City of Albuquerque - $2,112,908 HUD CoC & NMED - $431,952 FHLB AHP - $500,000 Deferred Developer Fee - $20,174 Non-local leveraged funding $3.55 Million Non-local leveraged funding $7.14 Million 15

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