PILOT APPLICATION for 871 S

PILOT APPLICATION For 871 S. Cooper St., Memphis, TN 38104

Administered By: Center City Revenue Finance Corporation

1. Application Background of the applying entity. State the name(s) of the applying entity’s representatives and any other financial guarantors of the Project and their addresses and telephone numbers if different from above.

Elizabeth Petipas CPK, LLC 46 Flicker Street Memphis, TN 38104 [email protected] (901) 274-5207

Provide background information about the applicant and guarantors, including development experience, if any, and all other relevant information this organization may need to consider while reviewing the application. Describe the corporate or partnership structure as applicable.

CPK, LLC is a real estate development & management firm owned and directed by the following partners: Matt Crow, Elizabeth Petipas & Terry Kerr.

CPK, LLC makes substantial financial investments in the properties they purchase and develop. They have a long-term property ownership strategy and anticipate holding this property long term. CPK, LLC plans to lease part of the commercial space in the property to a related party, Midsouth Best Rentals, which will also manage the property. Midsouth Best Rentals owns and/or manages over 2,500 properties in the Memphis area. See www.midsouthbestrentals.com for more details.

2. Proposed Project Description. a) Location: 871 South Cooper, Memphis, TN 38104 b) Intended Use: Mixed-use multi-family residential and office uses. Project includes 34 residential units, approximately 12,000 s.f. of office and 66 off street parking spaces. c) Economic and environmental impact: New Construction of a three-story mixed-use building in the Cooper Young historic district. d) The square footage of the building / land area to be improved: 40,000 s.f. / 0.865 Acres e) Attached are architectural plans, renderings. See Appendix f) A letter from a certified engineer, licensed in the State of Tennessee, as to the structural integrity of the building for its intended usage: The new building is being designed by Tennessee licensed architects and engineers and will meet all applicable building code requirements. g) State the marketing plans for the project identifying the intended market. What types of lessees are anticipated? Office lease will be secured prior to completion of construction. Marketing of residential leases will begin six weeks prior to completion of construction. CCRFC PILOT Application 871 S. Cooper, Memphis, TN 38104 August 26, 2019

h) If the project is speculative, how long is full occupancy expected to take and who will manage the project? The partners will serve as the real estate manager, with full occupancy projected within in the first quarter of opening. i) Are changes needed to the public space around the Project (For example; sidewalks, lighting and planting)? Yes, the proposed site improvements include: new surface parking, landscaping and new sidewalks and streetscape enhancements. This newly improved streetscape, which will be a positive neighbor. j) Other information fully explaining the project and its history. The proposed project is new ground-up construction of a three-story mixed-use building, containing a ground level office and retail, along with 34 multi-family apartments above. The site is located at a key location at S. Cooper and Nelson in the historic Cooper-Young neighborhood. Project scope includes 34 residential units, approximately 12,000 s.f. of ground floor office and retail and 66 off street parking spaces on the two parcels.

3. Site Control a) Name the property owner at the time of application submittal. SEVENTY-THREE UNION COMMONS, LLC* If the Applicant does not presently own the property, does the Applicant have a valid option to purchase the property? *CPK, LLC has an executed purchase and sale agreement for the property, but the property closing has not occurred until the PILOT is approved. Describe any and all existing financing, options and liens on the property. The property purchase is financed by the applicant. The improvement project will be financed through bank financing and capital equity provided by the partners.

4. Financial Items:

a) Financial Background: Attach current audited financial statements of the applicant and guarantors. If audited financial statements are unavailable, please submit non-audited statements. State the relationship any applicant or grantor has had with any accounting firm over the last five years and reason for change, if any. Not Applicable Attach three years tax returns if Applicant is an individual. (under separate cover)

Provide the following information about the loan or proposed loan for the Project. Ben Sutton Senior Vice President Financial Federal Bank 1715 Aaron Brenner Drive, Suite 100 Memphis, TN 38120 (O): 901-759-2159 Amount of loan for improvements – approximately $7,000,000. Lender’s Project Financial Assessment Letter (attached in appendix)

Attach information about the financial history of the Project and previous attempts to develop, if possible. Not Applicable

b) Financial Projections:

State the estimated Project costs broken down by component (i.e., land, buildings, equipment, soft costs, etc.) Attach bid estimates and show amounts to be paid from loans and equity amounts. (See Attached project costs in sources and uses)

CCRFC PILOT Application 871 S. Cooper, Memphis, TN 38104 August 26, 2019

Attach a cash flow pro-forma along with a statement of Sources and Uses of Funds for the project. See attached cash flow pro-forma.

5. Project Timeline: State the proposed time schedule for the Project including the dates anticipated for the following: a) Closing of the loan or contributing financing availability. Within six months of PILOT approval. b) First expenditure of funds with regard to the project. Soft cost expenditures have begun. c) Anticipated date construction will begin: Early, 2020 d) Anticipated completion date. Late 2020

6. Project Team: a) Architects and engineers: archimania b) Contractor for project: General Contractor to be determined c) Other professionals: Development Studio, LLC d) Does the Applicant or any guarantor have any previous or ongoing relationship with any Board member or legal counsel of the Board? No If so please describe in detail. N/A

7. Project Team: Give three credit references for you personally, and your business – Who do you want to use?

Brett Grinder Grinder, Taber & Grinder, Inc. 1919 Lynnfield Road Memphis, TN 38119 Ben Sutton T: 901.767.2400 Senior Vice President [email protected] Financial Federal Bank 1715 Aaron Brenner Drive, Suite 100 Todd Walker Memphis, TN 38120 archimania (O): 901-759-2159 356 S Main St www.finfedmem.com Memphis, TN 38103 901-527-3560 [email protected]

8. Items for Lease Preparation: State law requires that title to the projects be conveyed to CCRFC in order for it to grant payments in lieu of taxes; CCRFC then leases the property to the applicant or entity designated by the applicant. Indicate who the lessee will be for the Project. a) State the tax parcel number for all property involved with the Project and the current assessed value of the Property.

Parcel IDs: 031128 00013C & 031127 00010 / 2018 Combined Assessed Value: $134,440

b) Are any assessments presently under appeal? No If so, describe the status of the appeal. c) Will the Project result in the subdivision of any present tax parcel? No

9. Disclosures: a) Please disclose whether any applicant, guarantor or any other person involved with the project is currently engaged in any civil or criminal proceeding. (NO) b) Also disclose whether any individual involved with the project has ever been charged or convicted of any felony or currently is under indictment. (NO) c) Please supply detailed information. Not Applicable

CCRFC PILOT Application 871 S. Cooper, Memphis, TN 38104 August 26, 2019

Appendix

I. EBO Form A - Proposed Utilization Plan

II. Equal Business Opportunity Program and Best-Faith Effort to Attain Minority-Owned Business

Participation

III. Applicant Pilot Evaluation Grading

IV. Project Financials: Cash flow pro-forma along with a statement of Sources and Uses of Funds for

the project

V. Bank Letter

VI. Architectural Schematic Drawings

Equal Business Opportunity Program Proposed Utilization Plan

Bidder/Proposer/Developer: CPK, LLC Date Submitted: July 26, 2019

Project Address/Description: 871 S. Cooper St., Contact Person: Terry Kerr Memphis, TN 38104

The above named company requested bids for the general construction services of the following listed firms.

Ownership Subcontract Subcontract Name/Address/Telephone Certifying Agency Type of Work Status Dollars Percentage MBE GC $ TBD %

WOB Sub-Contractor $ TBD %

MBE Sub-Contractor $ TBD %

Total MBE: $ % Business Ownership Status Total WBE: $ % Minority Owned – MBE Women Owned – WBE Total White: $ % White Owned – WOB Other – Non-certified MBE/WBE Total Other: $ %

I certify that the above information is true to the best of my knowledge:

Signature Title Owner / Principal Date: March 26, 2019

Equal Business Opportunity Program and Best-Faith Effort to Attain Minority-Owned Business Participation

As further detailed in the Center City Affiliated Boards Equal Business Opportunity (EBO) Program, Section 10, the applicant must give minority-owned businesses (W/MBEs) an equal and fair opportunity to receive notice, to bid on, and be considered for selection for all contracting opportunities associated with the professional and construction services in the design and renovation/construction of the project. Applicants are required to take affirmative steps to ensure an open and fair contracting process. While there are no mandated quotas, results achieved may evidence whether a fair process was employed. Applicants shall make a best-faith effort to allot, as a goal, no less than 20% of the professional and construction services to W/MBEs in the design and renovation/construction of the project. Commensurate with the size and scope of the project, specific steps that may be indicative of a best-faith effort to identify and contract with W/MBEs include but are not limited to the following: notice to W/MBEs, soliciting bids/quotes directly from W/MBEs, providing constructive notice, utilizing plan rooms, utilizing the CCC for assistance (W/MBE lists and Project Alerts), and working with applicable minority-owned business support organizations (e.g., Mid-South Minority Business Council, Memphis Hispanic Chamber of Commerce, National Association of Women Business Owners, etc.) To ensure that the EBO requirements are clearly understood, and antecedent to meeting the goals set forth in the EBO Program, all utilization plans must be coordinated with the CCC staff and submitted with the application.

In accordance with the EBO Program, once the incentive application is approved and design/construction commences, the applicant shall provide written documentation of the status of the utilization plan (which shall include any and all changes or modifications) and the applicable amounts spent (or value of the work completed), on a monthly basis. If the requirements of the EBO Program are not met, the CCRFC (the applicable affiliate board) reserves the right to revoke and cancel the incentive

PRIMARY QUALIFICATION SECONDARY QUALIFICATION RESIDENTIAL RESIDENTIAL 2 to 5 Units: 1 Year 2 to 5 Units: .5 Year 6 to 10 Units: 2 Years 6 to 10 Units: 1 Year 11 to 15 Units: 3 Years 11 to 15 Units: 1.5 Years 16 to 25 Units: 4 Years 16 to 25 Units: 2 Years 26 to 50 Units: 5 Years 26 to 50 Units: 2.5 Years 51 Units +: 6 Years 51 + Units: 3 Years

OFFICE OFFICE Below 15,000 sf: 1 Year Below 15,000 sf: .5 Year 15,000 to 50,000: 2 Years 15,000 to 50,000: 1 Year 50,001 to 100,000: 3 Years 50,001 to 100,000: 1.5 Years 100,001 to 200,000: 4 Years 100,001 to 200,000: 2 Years 200,001 to 300,000: 5 Years 200,001 to 300,000: 2.5 Years 300,001 sf +: 6 Years 300,001 sf +: 3 Years

RETAIL RETAIL Below 15,000 sf: 1 Year Below 15,000 sf: .5 Year 15,000 to 50,000: 2 Years 15,000 to 50,000: 1 Year 50,001 to 100,000: 3 Years 50,001 to 100,000: 1.5 Years 100,001 to 200,000: 4 Years 100,001 to 200,000: 2 Years 200,001 to 300,000: 5 Years 200,001 to 300,000: 2.5 Years 300,001 sf +: 6 Years 300,001 sf +: 3 Years

CAPITAL IMPROVEMENT $1 – 5 Million: 1 Year $5+ – 10 Million: 2 Years $10+ – 15 Million: 3 Years $15+ – 20 Million: 4 Years $20+ Million: 5 Years

If scoring for the project is below 15 years, applicable accumulation based on CCRFC priority initiatives can be earned to bring the project up to a maximum of 15 years.

CCRFC Priorities

General Location: Project may qualify for one or more of the following: Located in CBID (Appendix II): 3 Years Located outside CBID, but inside CCRFC boundaries (Appendix II): 1 Year

Core & Historic Project may only qualify for one of the following five:

Construction of a new structure in the Downtown Core: 1 Year

Renovation of an existing structure in the Downtown Core: 2 Years

Renovation of a structure listed as non-contributing property in a National Register 3 Years or Landmarks Commission Historic District: Renovation of a structure listed as significant or contributing in a National Register 4 Years or Memphis Landmarks Commission Historic District: Renovation of a structure listed individually on the National Register of Historic 5 Years Places:

Community-based Initiatives & Economically Distressed Areas Project may qualify for up to two of the following:

Fronting the Main to Main Multi-Modal Connector Route (Appendix II): 3 Years Located within the boundaries of the Edge Neighborhood (Appendix II): 3 Years Located within the boundaries of the South City Impact Area (Appendix II): 3 Years Located within the boundaries of the Pinch Neighborhood (Appendix II): 4 Years Located in a Census Tract with a Poverty Rate over 20 percent* 2 Years Located in a Census Tract earning 80 or less of Area Median Income (AMI)* 2 Years

Design & Energy Project may qualify for one or more of the following:

Including permanent public art (qualification determined by the DMC Design Review 1 Year Board): Including enhanced architectural lighting (qualification determined by the DMC 1 Year Design Review Board): Leadership in Energy and Environmental Design (LEED) program either/or NZEB… 4 Years Net Zero Energy Building (NZEB) Certification: 4 Years Memphis Light, Gas and Water (MLGW) Energy Advantage Certification: 1 Year

PILOT TERM CALCULATION Primary Qualification: 5 Secondary Qual. A: .5 Secondary Qual. B: .5 Secondary Qual. C: Capital Improvement: 2 Additional Accum.: 7 PILOT TERM: 15

FACILITY PROGRAM

Program Total Gross Square Footage 40,000

Site Improvements Acres $ 0.865 (Demo, Parking Lot, Landscape, Streetscape)

Construction Budget Building Construction $ 3,411,509 Mechanical/HVAC $ 376,740 Plumbing $ 343,363 Sprinkler System $ 130,673 Electrical Systems $ 634,200 Security & Low Voltage Systems $ 30,000 Solar Power Systems & EV Charging Stations $ 307,009 Sitework Improvements, Demo & Utilities $ 316,959

SubTotal Construction Budget $ 5,550,453

Tenant Fitout Budget 25 13,666 $ 341,650

Total Construction Budget $ 5,892,103 PROJECT SOURCES AND USES

Sources Debt - 5.25% 25 yr amortization $ 7,068,591 Owner Equity $ 1,247,398 Other Sources $ - $ 8,315,990

Uses Property Purchase $ 1,200,000 Hard Construction Costs $ 5,892,103 Soft Costs w/o PILOT Fee $ 496,823 Professional Fees $ 411,823 Permits & Testing $ 50,000 Legal, Closing $ 35,000 Lease-up Commission $ 23,625 Property Taxes & Utlities during Construction $ 43,000 Interest during Construction/Lease-up Period $ 252,000 Project Contingency (5%) $ 294,605 PILOT Closing Fee $ 113,834 $ 8,315,990 DEBT SERVICE 25 YEAR AMORTIZATION SCHEDULE

5.250% Payment: $514,173.97 Borrower: Loan: 7,068,591.23

Pymt Scheduled Payoff No. Date Balance Payment Interest Principal Balance

1 01/01/20 365 7,068,591.23 $514,173.97 371,101.04 143,072.93 2 12/31/20 365 6,925,518.30 514,173.97 363,589.71 150,584.26 3 12/31/21 365 6,774,934.04 514,173.97 355,684.04 158,489.93 4 12/31/22 366 6,616,444.11 514,173.97 347,363.32 166,810.65 5 01/01/24 365 6,449,633.46 514,173.97 338,605.76 175,568.21 6 12/31/24 365 6,274,065.25 514,173.97 329,388.43 184,785.54 7 12/31/25 365 6,089,279.71 514,173.97 319,687.18 194,486.79 8 12/31/26 365 5,894,792.92 514,173.97 309,476.63 204,697.34 9 12/31/27 365 5,690,095.58 514,173.97 298,730.02 215,443.95 10 12/30/28 365 5,474,651.63 514,173.97 287,419.21 226,754.76 11 12/30/29 365 5,247,896.87 514,173.97 275,514.59 238,659.38 12 12/30/30 365 5,009,237.49 514,173.97 262,984.97 251,189.00 13 12/30/31 365 4,758,048.49 514,173.97 249,797.55 264,376.42 14 12/29/32 365 4,493,672.07 514,173.97 235,917.78 278,256.19 15 12/29/33 365 4,215,415.88 514,173.97 221,309.33 292,864.64 16 12/29/34 365 3,922,551.24 514,173.97 205,933.94 308,240.03 17 12/29/35 365 3,614,311.21 514,173.97 189,751.34 324,422.63 18 12/28/36 365 3,289,888.58 514,173.97 172,719.15 341,454.82 19 12/28/37 365 2,948,433.76 514,173.97 154,792.77 359,381.20 20 12/28/38 365 2,589,052.56 514,173.97 135,925.26 378,248.71 21 12/28/39 365 2,210,803.85 514,173.97 116,067.20 398,106.77 22 12/27/40 365 1,812,697.08 514,173.97 95,166.60 419,007.37 23 12/27/41 365 1,393,689.71 514,173.97 73,168.71 441,005.26 24 12/27/42 365 952,684.45 514,173.97 50,015.93 464,158.04 25 12/27/43 365 488,526.41 514,173.97 25,647.64 488,526.33 ------

Page 3 of 7 CASH FLOW STATEMENT With PILOT Year One Year Two Year Three Year Four Year Five Year Six Year Seven Year Eight Lease Revenue Commercial Space 11,750 11,750 11,750 11,750 11,750 11,750 11,750 11,750 Occupancy Rate 75% 90% 90% 90% 90% 90% 90% 90% Revenue per sf. $ 20.00 $ 20.20 $ 20.40 $ 20.61 $ 20.81 $ 21.02 $ 21.23 $ 21.44 Commercial Revenue $ 176,250 $ 213,615 $ 215,751 $ 217,909 $ 220,088 $ 222,289 $ 224,512 $ 226,757 Residential Flats 26,334 26,334 26,334 26,334 26,334 26,334 26,334 26,334 Occupancy Rate 75% 95% 95% 95% 95% 95% 95% 95% Revenue per sf. $ 1.75 $ 1.77 $ 1.79 $ 1.80 $ 1.82 $ 1.84 $ 1.86 $ 1.88 Commercial Revenue $ 414,761 $ 530,617 $ 535,923 $ 541,282 $ 546,695 $ 552,162 $ 557,684 $ 563,261 CAM & Util. Revenue $ 77,500 $ 78,275.00 $ 79,057.75 $ 79,848.33 $ 80,646.81 $ 81,453.28 $ 82,267.81 $ 83,090.49 Total Lease Revenue $ 668,511 $ 822,507 $ 830,732 $ 839,039 $ 847,430 $ 855,904 $ 864,463 $ 873,108 Operating Expense Utilities 20,724 25,498 25,753 26,010 26,270 26,533 26,798 27,066 Real Estate Taxes 44,718 44,718 44,718 44,718 44,718 44,718 44,718 44,718 Property Insurance 13,370 16,450 16,615 16,781 16,949 17,118 17,289 17,462 Prop. Service & Clean'g 14,039 17,273 17,359 17,446 17,533 17,621 17,709 17,797 Marketing 13,370 16,450 16,532 16,615 16,698 16,782 16,866 16,950 Struct. Maint. & Res. 33,426 41,125 41,537 41,952 42,371 42,795 43,223 43,655 Property Management 33,426 41,125 41,331 41,538 41,745 41,954 42,164 42,375 Total Expenses 173,072 202,639 203,844 205,059 206,284 207,520 208,767 210,023 Net Operating Income 495,439 619,868 626,888 633,980 641,145 648,384 655,697 663,084 Debt Service Principal 143,073 150,584 158,490 166,811 175,568 184,786 194,487 204,697 Interest 371,101 363,590 355,684 347,363 338,606 329,388 319,687 309,477 514,174 514,174 514,174 514,174 514,174 514,174 514,174 514,174 Net Cash Flow $ (18,735) $ 105,694 $ 112,714 $ 119,806 $ 126,971 $ 134,210 $ 141,523 $ 148,910 Debit Coverage Ratio (DCR) 0.96 1.21 1.22 1.23 1.25 1.26 1.28 1.29 Return on Equity (ROE) -2% 8% 9% 10% 10% 11% 11% 12% Return on Investment (ROI) 0% 1% 1% 1% 2% 2% 2% 2% CASH FLOW STATEMENT With PILOT Year Nine Year Ten Year Eleven Year Twelve Year Thirteen Year Fourteen Year Fifteen Lease Revenue Commercial Space 11,750 11,750 11,750 11,750 11,750 11,750 11,750 Occupancy Rate 90% 90% 90% 90% 90% 90% 90% Revenue per sf. $ 21.66 $ 21.87 $ 22.09 $ 22.31 $ 22.54 $ 22.76 $ 22.99 Commercial Revenue $ 229,024 $ 231,314 $ 233,628 $ 235,964 $ 238,323 $ 240,707 $ 243,114 Residential Flats 26,334 26,334 26,334 26,334 26,334 26,334 26,334 Occupancy Rate 95% 95% 95% 95% 95% 95% 95% Revenue per sf. $ 1.89 $ 1.91 $ 1.93 $ 1.95 $ 1.97 $ 1.99 $ 2.01 Commercial Revenue $ 568,893 $ 574,582 $ 580,328 $ 586,131 $ 591,993 $ 597,912 $ 603,892 CAM & Util. Revenue $ 83,921.39 $ 84,760.61 $ 85,608.21 $ 86,464.30 $ 87,328.94 $ 88,202.23 $ 89,084.25 Total Lease Revenue $ 881,839 $ 890,657 $ 899,564 $ 908,559 $ 917,645 $ 926,821 $ 936,090 Operating Expense Utilities 27,337 27,610 27,886 28,165 28,447 28,731 29,019 Real Estate Taxes 44,718 44,718 44,718 44,718 44,718 44,718 44,718 Property Insurance 17,637 17,813 17,991 18,171 18,353 18,536 18,722 Prop. Service & Clean'g 17,886 17,976 18,066 18,156 18,247 18,338 18,430 Marketing 17,035 17,120 17,205 17,291 17,378 17,465 17,552 Struct. Maint. & Res. 44,092 44,533 44,978 45,428 45,882 46,341 46,804 Property Management 42,587 42,799 43,013 43,229 43,445 43,662 43,880 Total Expenses 211,291 212,569 213,858 215,158 216,469 217,791 219,125 Net Operating Income 670,548 678,088 685,706 693,401 701,176 709,030 716,965 Debt Service Principal 215,444 226,755 238,659 251,189 264,376 278,256 292,865 Interest 298,730 287,419 275,515 262,985 249,798 235,918 221,309 514,174 514,174 514,174 514,174 514,174 514,174 514,174 Net Cash Flow $ 156,374 $ 163,914 $ 171,532 $ 179,227 $ 187,002 $ 194,856 $ 202,791 Debit Coverage Ratio (DCR) 1.30 1.32 1.33 1.35 1.36 1.38 1.39 Return on Equity (ROE) 13% 13% 14% 14% 15% 16% 16% Return on Investment (ROI) 2% 2% 2% 2% 2% 2% 2% CASH FLOW STATEMENT Without PILOT Year One Year Two Year Three Year Four Year Five Year Six Year Seven Year Eight Lease Revenue Commercial Space 11,750 11,750 11,750 11,750 11,750 11,750 11,750 11,750 Occupancy Rate 75% 90% 90% 90% 90% 90% 90% 90% Revenue per sf. $ 20.00 $ 20.20 $ 20.40 $ 20.61 $ 20.81 $ 21.02 $ 21.23 $ 21.44 Commercial Revenue $ 176,250 $ 213,615 $ 215,751 $ 217,909 $ 220,088 $ 222,289 $ 224,512 $ 226,757 Residential Flats 26,334 26,334 26,334 26,334 26,334 26,334 26,334 26,334 Occupancy Rate 75% 95% 95% 95% 95% 95% 95% 95% Revenue per sf. $ 1.75 $ 1.77 $ 1.79 $ 1.80 $ 1.82 $ 1.84 $ 1.86 $ 1.88 Commercial Revenue $ 414,761 $ 530,617 $ 535,923 $ 541,282 $ 546,695 $ 552,162 $ 557,684 $ 563,261 CAM & Util. Revenue $ 77,500 $ 78,275.00 $ 79,057.75 $ 79,848.33 $ 80,646.81 $ 81,453.28 $ 82,267.81 $ 83,090.49 Total Lease Revenue $ 668,511 $ 822,507 $ 830,732 $ 839,039 $ 847,430 $ 855,904 $ 864,463 $ 873,108 Operating Expense Utilities 20,724 25,498 25,753 26,010 26,270 26,533 26,798 27,066 Real Estate Taxes 149,099 149,099 149,099 149,099 149,099 149,099 149,099 149,099 Property Insurance 13,370 16,450 16,615 16,781 16,949 17,118 17,289 17,462 Prop. Service & Clean'g 14,039 17,273 17,359 17,446 17,533 17,621 17,709 17,797 Marketing 13,370 16,450 16,532 16,615 16,698 16,782 16,866 16,950 Struct. Maint. & Res. 33,426 41,125 41,537 41,952 42,371 42,795 43,223 43,655 Property Management 33,426 41,125 41,331 41,538 41,745 41,954 42,164 42,375 Total Expenses 277,454 307,021 308,226 309,441 310,666 311,902 313,148 314,405 Net Operating Income 391,057 515,486 522,506 529,598 536,763 544,002 551,315 558,702 Debt Service Principal 143,073 150,584 158,490 166,811 175,568 184,786 194,487 204,697 Interest 371,101 363,590 355,684 347,363 338,606 329,388 319,687 309,477 514,174 514,174 514,174 514,174 514,174 514,174 514,174 514,174 Net Cash Flow $ (123,117) $ 1,312 $ 8,332 $ 15,424 $ 22,589 $ 29,828 $ 37,141 $ 44,529 Debit Coverage Ratio (DCR) 0.76 1.00 1.02 1.03 1.04 1.06 1.07 1.09 Return on Equity (ROE) -10% 0% 1% 1% 2% 2% 3% 4% Return on Investment (ROI) -1% 0% 0% 0% 0% 0% 0% 1% CASH FLOW STATEMENT Without PILOT Year Nine Year Ten Year Eleven Year Twelve Year Thirteen Year Fourteen Year Fifteen Lease Revenue Commercial Space 11,750 11,750 11,750 11,750 11,750 11,750 11,750 Occupancy Rate 90% 90% 90% 90% 90% 90% 90% Revenue per sf. $ 21.66 $ 21.87 $ 22.09 $ 22.31 $ 22.54 $ 22.76 $ 22.99 Commercial Revenue $ 229,024 $ 231,314 $ 233,628 $ 235,964 $ 238,323 $ 240,707 $ 243,114 Residential Flats 26,334 26,334 26,334 26,334 26,334 26,334 26,334 Occupancy Rate 95% 95% 95% 95% 95% 95% 95% Revenue per sf. $ 1.89 $ 1.91 $ 1.93 $ 1.95 $ 1.97 $ 1.99 $ 2.01 Commercial Revenue $ 568,893 $ 574,582 $ 580,328 $ 586,131 $ 591,993 $ 597,912 $ 603,892 CAM & Util. Revenue $ 83,921.39 $ 84,760.61 $ 85,608.21 $ 86,464.30 $ 87,328.94 $ 88,202.23 $ 89,084.25 Total Lease Revenue $ 881,839 $ 890,657 $ 899,564 $ 908,559 $ 917,645 $ 926,821 $ 936,090 Operating Expense Utilities 27,337 27,610 27,886 28,165 28,447 28,731 29,019 Real Estate Taxes 149,099 149,099 149,099 149,099 149,099 149,099 149,099 Property Insurance 17,637 17,813 17,991 18,171 18,353 18,536 18,722 Prop. Service & Clean'g 17,886 17,976 18,066 18,156 18,247 18,338 18,430 Marketing 17,035 17,120 17,205 17,291 17,378 17,465 17,552 Struct. Maint. & Res. 44,092 44,533 44,978 45,428 45,882 46,341 46,804 Property Management 42,587 42,799 43,013 43,229 43,445 43,662 43,880 Total Expenses 315,673 316,951 318,240 319,540 320,851 322,173 323,506 Net Operating Income 566,166 573,706 581,324 589,019 596,794 604,648 612,583 Debt Service Principal 215,444 226,755 238,659 251,189 264,376 278,256 292,865 Interest 298,730 287,419 275,515 262,985 249,798 235,918 221,309 514,174 514,174 514,174 514,174 514,174 514,174 514,174 Net Cash Flow $ 51,992 $ 59,532 $ 67,150 $ 74,846 $ 82,620 $ 90,474 $ 98,409 Debit Coverage Ratio (DCR) 1.10 1.12 1.13 1.15 1.16 1.18 1.19 Return on Equity (ROE) 4% 5% 5% 6% 7% 7% 8% Return on Investment (ROI) 1% 1% 1% 1% 1% 1% 1%