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Broadway Center

Broadway Center. Phoenix Partners, LLC. David Hansen (Development) Amy Merritt (Finance) Thacher Tiffany (Planning) Yew Chin Tan (Legal). Phoenix Partners, LLC. Team Objectives Create financially viable retail development Improve retail shopping options for residents in underserved area

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Broadway Center

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  1. Broadway Center Phoenix Partners, LLC David Hansen (Development) Amy Merritt (Finance) Thacher Tiffany (Planning) Yew Chin Tan (Legal)

  2. Phoenix Partners, LLC Team Objectives • Create financially viable retail development • Improve retail shopping options for residents in underserved area • Understand the New Market Tax Credits program Development Team

  3. Broadway Center A grocery-anchored neighborhood shopping center Site Overview Market Study Design and Program New Market Tax Credits Finance BROADWAY Development Team

  4. Site Overview

  5. 30 Miles North of Boston Location & Context

  6. Outside of Historic Downtown Lawrence Location & Context

  7. METHUEN Site LAWRENCE

  8. Streets

  9. Context

  10. Views from the site Location & Context

  11. Malden Mills Facility Location & Context

  12. Zoning *overlay district under development Site Analysis: Zoning

  13. Market Study

  14. Primary Trade Area Market Analysis

  15. Trade Area Profile What this means . . . • Center of Latino business sector • Neighborhood based on geography and relationships • 12,500 Households • 70% Latino • 25% Single Mother Families • $28,500 Median Household Income • 13,200 Average Daily Traffic Market Analysis

  16. Grocery Stores BROADWAY

  17. Grocery Stores Super Stop & Shop (2.5miles) Market Basket (2.5miles) DeMoula’s (1.8miles) Grocery Store Market Basket (1.3miles) One mile BROADWAY

  18. Grocery Store Absorption

  19. Grocery Store Absorption

  20. National Chain Pharmacies CVS (0.6miles) Walgreen's (1mile) Conlin’s (0.7miles) CVS (0.8miles) Walgreen’s (0.6miles) Brooks (1.8miles) Pharmacy 0.6 Miles BROADWAY

  21. Pharmacy Absorption

  22. Pharmacy Absorption

  23. Design and Program

  24. Center Alternatives Base case 2nd Story 3 Pads Hybrid Land Residual 3rd 4th 1st 2nd Site Planning

  25. Pharmacy 13,440 sf BROADWAY \ Anchor 45,000 sf Inline 22,760 sf Site Plan 40’

  26. Project Timeline 4 12 6 12 12

  27. New Market Tax Credit

  28. New Markets Tax Credit What is the NMTC: Federal tax credit allocated annually to qualifying CDEs Goal of NMTC: Encourage investment in low income communities Financial Terms: Credit equal to 39% of equity investment, received over 7-year period

  29. Massachusetts Housing Investment Corp • MIHC was allocated $169 million in NMTC credits in 2006 • Leverage tax credit equity with debt in order to fund economic development projects • Provide a subordinate loan at 1%

  30. NMTC Structure Lender Investor debt equity equity credits subordinate loan NMTC Fund I MHIC CDFI Fund (US Treasury) CDE Phoenix Properties LLC Project Finance

  31. NMTC Structure $ $ and credits $ and credits $ Lender Investor NMTC Fund I MHIC CDFI Fund (US Treasury) CDE Phoenix Properties LLC Project Finance

  32. NMTC Structure Lender Investor debt equity equity credits subordinate loan NMTC Fund I MHIC CDFI Fund (US Treasury) CDE equity Phoenix Properties LLC Investor Project Finance

  33. Future of the NMTC • $15 billion between 2002 and 2007 • 2006 and 2007’s authorization will each equal $3.5 billion • Applications for 2007 funding are due in September of 2006 • Congressional reauthorization in 2008 is likely Project Finance

  34. Finance

  35. Land Price • Land residual analysis based on alternatives Up to $1.6 million • Brokers $1 to 5 million • Lawrence Community Works $1.5 million • Developers “not much” RESULT: $1.3 million Project Finance

  36. Development Cost Project Finance

  37. Retail Rents Project Finance

  38. Capital Structure Project Finance

  39. Assumptions Sources: Eastern Development, Linear Retail, Commercial Real Estate Listing Service, Urban Land Institute, Meredith and Grew, COSTAR, Black’s Guide, LoopNet Project Finance

  40. Financial Results Project Finance

  41. Effect of Reduced Land Price Project Finance

  42. Effect of Higher Inline Rents Project Finance

  43. CONCLUSION Project Finance

  44. Proposal benefits from large vacant parcel • Site plan fits within urban context • Capital structure includes application of NMTC • Tenant mix addresses unmet demand However… • Insufficient returns to attract private capital

  45. Broadway Center

  46. Broadway Center

  47. Project Finance

  48. Project Finance

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