Highlands Garden Village-Case Study-lmplementation of New Urbanism-Jonathan Rose Companies LLC

Jonathan Rose Companies LLC

Implementation of New Urbanism: Case Study: Highlands’ Garden Village

Highlands’ Garden Village Introduction

Environmental Responsibility

Himalayan VillageLEED Green Building Rating System

Project Checklist14 Possible Points Points Earned

Sustainable Sites

Y Prereq 1 Erosion & Sedimentation Control Required

Y ? N Credit 1 Site Selection 1 1

Y ? N Credit 2 Urban Redevelopment 1 0YY ? N Credit 3 Brownfield Redevelopment 1 0

Y ? N Credit 4.1 Alternative Transportation, Public Transportation Access 1 0

Y ? N Credit 4.2 Alternative Transportation, Bicycle Storage 1 0

Y ? N Credit 4.3 Alternative Transportation, Alternative Fuel Refueling Stations 1 0

Y ? N Credit 4.4 Alternative Transportation, Parking Capacity 1 1

Y ? N Credit 5.1 Reduced Site Disturbance, Protect or Restore Open Space 1 1

Y ? N Credit 5.2 Reduced Site Disturbance, Development Footprint 1 1

Y ? N Credit 6.1 Stormwater Management, Rate or Quantity 1 0

Y ? N Credit 6.2 Stormwater Management, Treatment 1 0

Y Y N Credit 7.1 Landscape & Exterior Design to Reduce Heat Islands, NonRoof 1 0

Y Y N Credit 7.2 Landscape & Exterior Design to Reduce Heat Islands, Roof 1 0

Y ? N Credit 8 Light Pollution Reduction 1 15

Water Efficiency 5 Possible Points

Y ? N Credit 1.1 Water Efficient Landscaping, Reduce by 50% 1 1

Y ? N Credit 1.2 Water Efficient Landscaping, No Potable Use or No Irrigation 1 0

Y ? N Credit 2 Innovative Wastewater Technologies 1 0

Y ? N Credit 3.1 Water Use Reduction, 20% Reduction 1 1

Y ? N Credit 3.2 Water Use Reduction, 30% Reduction 1 13

Energy & Atmosphere 17 Possible Points Points Earned

Y Prereq 1 Fundamental Building Systems Commissioning Required

Y Prereq 2 Minimum Energy Performance Required

Y Prereq 3 CFC Reduction in HVAC&R Equipment Required

Y ? N Credit 1.1 Optimize Energy Performance, 20% New / 10% Existing 2 0

Y ? N Credit 2.1 Renewable Energy, 5% 1 1

Y ? N Credit 3 Additional Commissioning 1 0

Y ? N Credit 4 Ozone Depletion 1 1

Y ? N Credit 5 Measurement & Verification 1 0

Y ? N Credit 6 Green Power 1 15

Materials & Resources 13 Possible Points Points Earned

Y Prereq 1 Storage & Collection of Recyclables Required

Y ? N Credit 1.1 Building Reuse, Maintain 75% of Existing Shell 1 1

Y ? N Credit 1.2 Building Reuse, Maintain of Existing Shell 1 1

Y ? N Credit 1.3 Building Reuse, Maintain 100% of Shell & 50% Non-Shell 1 1

Y ? N Credit 2.1 Construction Waste Management, Divert 50% 1 1

Y ? N Credit 2.2 Construction Waste Management, Divert 75% 1 1

Y ? N Credit 3.1 Resource Reuse, Specify 5% 1 1

Y ? N Credit 3.2 Resource Reuse, Specify 10% 1 1

Y ? N Credit 4.1 Recycled Content, Specify 25% 1 1

Y ? N Credit 4.2 Recycled Content, Specify 50% 1 1

Y ? N Credit 5.1 Local/Regional Materials, 20% Manufactured Locally 1 1

Y ? N Credit 5.2 Local/Regional Materials, of 20% Above, 50% Harvested Locally 1 1

Y ? N Credit 6 Rapidly Renewable Materials 1 1

Y ? N Credit 7 Certified Wood 1 012

Indoor Environmental Quality 15 Possible Points

Y Prereq 1 Minimum IAQ Performance Required

Y Prereq 2 Environmental Tobacco Smoke (ETS) Control Required

Y ? N Credit 1 Carbon Dioxide (CO2) Monitoring 1 0

Y Y N Credit 2 Increase Ventilation Effectiveness 1 0

Y ? N Credit 3.1 Construction IAQ Management Plan, During Construction 1 0

Y ? N Credit 3.2 Construction IAQ Management Plan, Before Occupancy 1 0

Y ? N Credit 4.1 Low-Emitting Materials, Adhesives & Sealants 1 1

Y ? N Credit 4.2 Low-Emitting Materials, Paints 1 1

Y ? N Credit 4.3 Low-Emitting Materials, Carpet 1 1

Y ? N Credit 4.4 Low-Emitting Materials, Composite Wood 1 0

Y ? N Credit 5 Indoor Chemical & Pollutant Source Control 1 0

Y ? N Credit 6.1 Controllability of Systems, Perimeter 1 0

Y ? N Credit 6.2 Controllability of Systems, Non-Perimeter 1 0

Y ? N Credit 7.1 Thermal Comfort, Comply with ASHRAE 55-1992 1 0

Y ? N Credit 7.2 Thermal Comfort, Permanent Monitoring Systems 1 0

Y ? N Credit 8.1 Daylight & Views, Daylight 75% of Spaces 1 0

Y ? N Credit 8.2 Daylight & Views, Views for 90% of Spaces 1 03

Innovation & Design Process 5 Possible Points

Y ? N Credit 1.1 Innovation in Design: Winrock Policy 1 1

Y ? N Credit 1.2 Innovation in Design: Roof and Cistern Assembly 1 0

Y ? N Credit 1.3 Innovation in Design: Economic Feasibility in Marketplace 1 0

Y ? N Credit 1.4 Innovation in Design: Prototypical Building Model 1 0

Y ? N Credit 2 LEED TM Accredited Professional 1 01

Project Totals 69 Possible Points

Certified 26-32 points Silver 33-38 points Gold 39-51 points Platinum 52-69 points 29

Himalayan Village LEED Rating: 29Highlands’ Garden Village Introduction

Highlands’ Garden Village Denver,CO

Highlands Garden Village

Project Cost $101.8 million Project Size 27.39 acres Site Acquisition, Infrastructure, Demolition, Planning and Open Space $15.5 million Single Family, Town Home $25.8 million Cohousing $ 8.3 million Live/work Lofts $ 7.8 million Senior $ 7.0 million Multifamily $10.0 million Commercial $18.5 million School $ 5.8 million Plaza and Entrance Park $ 1.0 million Theater $ 2.1 million Total Housing Units 306 Single Family 52 Carriage Homes 20 Town Homes/Condominiums 38 Senior 63 Multifamily 74 Co-housing 33 Live/work Lofts 26 Commercial Area 75,000 sq. ft. School 43,000 sq. ft Civic Uses: Historic Elitch Theater and Carousel Building 20,000 sq. ft. Open Space 140,000 sq. ft

Highlands’ Garden Village Financing

Highlands’ Garden Village History

• Mary Elitch and Her Bears

• Elitch Formal Gardens

Highlands’ Garden Village Planning Process

Perry-Rose LLC & Rose Companies Management LLC

Co-HousingSingle Family

Town HomesMulti Family

Highlands’ Garden Village Housing

Highlands’ Garden Village Single Family Housing

Highlands’ Garden VillageHighlands’ Garden Village Single Family Housing

Highlands’ Garden Village Single Family Housing

Highlands’ Garden Village Townhomes

Highlands’ Garden Village Live-Work Housing

Highlands’ Garden Village Co-Housing

Highlands’ Garden Village Multi-Family Housing

Highlands’ Garden Village Senior Housing

Highlands’ Garden Village Commercial

Careful Attention to the Public Realm:• Utilization of the historic and natural features of the

site guided the planning and design

• Building narrower streets than had been previously permitted in Denver

• Inclusion of diagonal street parking

• Streets that end in vistas

• Attention to the interaction of the civic space and the sense of place.

Highlands’ Garden Village Public Realm

Shared Uses of Theatre Plaza

Highlands’ Garden Village Public Realm

HGV Has Been a Pioneer in Green Building:

• 30 Tons of Concrete from the Original Park were Recycled into the HGV Road Base

• Sunflower Market Building is a Participant in the LEED Core and Shell Pilot Program and is LEED Gold Certified

• Single Family Homes Were Built to Exceed EnergyStar and Colorado Built Green Requirements

• Multi Family Buildings Were Built Using Recycled Materials, Low VOC Finishes and High Efficiency Mechanical Units and Windows.

Highlands’ Garden Village Green Features

Additional Environmentally Sensitive Features:• All Public Spaces Powered by Windsource or PV

• Xeriscaped Tree Lawns

• Native Buffalo Grass in Theatre Plaza

• The Preservation of Existing Trees in Laying Out the Development

• Reuse of Existing Buildings

• High Density Allowing an Increased Population to Live Closer to Downtown.

• Locating Neighborhood Retail within Walking Distance of High Density Living

Million BTU per Year

per Household

Suburban Avg(226 Mbtu)

Suburban Green

(158 Mbtu)

Urban Avg (136 Mbtu)

Urban Green (97 Mbtu)

Household Type

Transportation UseHousehold Use

Water Efficient Buffalo Grass Uses 1/6th the Water of Blue Grass

100000

200000

300000

400000

500000

600000

Blue Grass Buffalo Grass

Gallons per Year

$5,000

$10,000

$15,000

$20,000

$25,000

$30,000

$35,000

$40,000

$45,000

Replacement (39 yr payback)

New (7 yr payback)

Cost of installing BuffaloGrass (20,000 SF)

Water Savings ($1083/year)

Experiments in Xeriscaped Tree Lawns

HGV Sunflower Market Building is

LEED GOLD Certified

Success With Public/Private Partnerships:• Developers worked closely with DURA to structure TIF

financing for HGV infrastructures.

• A Citizen Design Review Board reviewed and gave input into all building designs.

• Developers provided support to a not-for-profit to renovate the historic theatre.

• The Master Plan was informed by a public survey requesting senior housing, mixed uses, historic preservation, and more.

• In Partnership with the Denver Botanic Gardens the original garden entry was recreated.

• The grounds are maintained in partnership with a group of resident volunteers.

Risk Mitigation Strategies:• Phasing • Sharing Risk and Return with Home Builders• Flexible PUD

Highlands Garden Village

Project Cost $101.8 million Project Size 27.39 acres Site Acquisition, Infrastructure, Demolition, Planning and Open Space $15.5 million Single Family, Town Home $25.8 million Cohousing $ 8.3 million Live/work Lofts $ 7.8 million Senior $ 7.0 million Multifamily $10.0 million Commercial $18.5 million School $ 5.8 million Plaza and Entrance Park $ 1.0 million Theater $ 2.1 million Total Housing Units 306 Single Family 52 Carriage Homes 20 Town Homes/Condominiums 38 Senior 63 Multifamily 74 Co-housing 33 Live/work Lofts 26 Commercial Area 75,000 sq. ft. School 43,000 sq. ft Civic Uses: Historic Elitch Theater and Carousel Building 20,000 sq. ft. Open Space 140,000 sq. ft

Loans, TIF & Equity

SOURCES Amount %

Acquisition and Development (A&D) Loan

Phase I $ 4,600,000

Phase II $ 3,420,000

Phase III $ 555,000

Total A&D Loan $ 8,575,000 48.86%

Tax Increment Financing Annual Payments $ 590,644

Tax increment Bond Issue $ 4,400,000 28.43%

Developer Equity $ 3,933,958 22.41%

Misc Income $ 51,774 0.29%

Total SOURCES $ 17,551,376 100.00%

Acquisition & Development Financing

Land Sales, TIF SOURCES Amount %Single Family Lots $ 2,484,875 13.08%Townhouse Lots $ 756,450 3.98%Profit Sharing on SF & TH $ 3,428,663 18.05%Sale of Tennyson Site $ 900,000 4.74%Sale of Co-housing Site $ 752,500 3.96%Profit Share Cohousing $ 265,076 1.40%Sale Senior Site $ 687,000 3.62%Sale Multi-family Site $ 1,093,881 5.76%Sale Plaza Loft Sites $ 695,000 3.66%Sale of Commercial Site $ 1,726,498 9.09%Sale N 38th Office $ 225,000 1.18%Sale of Tap Credits $ 177,191 0.93%TIF $ 5,750,000 30.27%Misc Income $ 51,774 0.27% TOTAL Sources $ 18,993,908 100.00% USES Amount %Acquisition (Land) Cost $ 2,415,859 12.72%Demolition and Environmental Remediation $ 1,241,628 6.54%Infrastructure $ 3,648,532 19.21%Parks & Open Space $ 1,681,140 8.85% Theatre $ 2,074,262 10.92% Carousel $ 323,839 1.70%Permits & Fees $ 169,720 0.89%Professional Fees $ 1,840,576 9.69%Operating Expenses $ 734,390 3.87%Bank Loan Fee $ 180,003 0.95%Interest $ 252,844 1.33%Marketing $ 199,495 1.05%TIF Bond Costs $ 553,662 2.91%Development Fee $ 2,235,426 11.77% TOTAL Uses $ 17,551,376 Profit $ 1,422,532 7.59%

TOTAL $ 18,993,908

100.00%

Single Family and Townhome Sales

REVENUES Amount % Per Unit

Sales $ 25,849,791.00

EXPENSES

Hard Cost $ 10,791,241.00 41.75% $ 119,902.68

Soft Costs $ -

Legal/ Admin $ 94,779.00 0.37% $ 1,053.10

Permits & Fees $ 629,967.00 2.44% $ 6,999.63

Design & Engineering $ 296,173.00 1.15% $ 3,290.81

Site Development $ 59,461.00 0.23% $ 660.68

Landscape $ 286,927.00 1.11% $ 3,188.08

Land Cost $ 3,194,630.00 12.36% $ 35,495.89

Marketing $ 1,063,838.00 4.12% $ 11,820.42 Construction Supervision $ 626,223.00 2.42% $ 6,958.03

Financing $ 790,210.00 3.06% $ 8,780.11

Development Fee $ 1,777,446.00 6.88% $ 19,749.40

TOTAL USES $ 19,610,895.00 $ 217,898.83

Profit $ 6,238,896.00 24.14% $ 69,321.07

TOTAL $ 25,849,791.00 100.00% $ 287,219.90

IRR 27.00%

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

$350,000

$400,000

$450,000

Sales Price

Single Family Townhouses Co-housing

Housing Type

Low est.

High est.

Low actual

High actual

Cottage Hill Senior Apartments

Sources and Uses of Funds Total %

Sources

Permanent Loans $ 4,134,997.00 58.5%

Home Loans $ 795,000.00 11.3%

Developer Equity $ 15,769.00 0.2%

Tax Credit Equity $ 1,561,132.00 22.1%

Development Fee Deferral $ 381,000.00 5.4%

LOC $ 174,700.00 2.5%

Total Sources $ 7,062,598.00 100.0%

Acquisition Costs $ 687,000.00 9.7%

Construction Costs $ 5,007,305.00 70.9%

Financing Costs $ 442,205.00 6.3%

Development Costs $ 733,388.00 10.4%

Reserves $ 192,700.00 2.7%

Total Uses $ 7,062,598.00 100.0%

Annual Cash on Cash Return 9.4%IRR 8.2%

Trocadero Apartments

Sources and Uses of Funds Total %

Sources

Permanent Loans $ 7,613,100.00 74.8%

Home Loans $ 398,000.00 3.9%

Developer Equity $ 35,392.98 0.3%

Tax Credit Equity $ 1,734,256.02 17.0%

Development Fee Deferral $ - 0.0%

LOC 4.0%

Total Sources $ 10,184,011.00 100.0%

Acquisition Costs $ 1,092,764.00 5.9%

Construction Costs $ 7,060,553.00 69.3%

Financing Costs $ 811,079.00 8.0%

Development Costs $ 696,353.00 6.8%

Reserves $ 523,262.00 5.1%

Total Uses $ 10,184,011.00 100.0%

Annual Cash on Cash Return 6.9%

IRR 17.0%

HGV Commercial

Sources and Uses of Funds Total % PSf

Sources

Equity $ 6,500,000 35%

Permanent Loan $ 12,000,000 65%

Total Sources $ 18,500,000 100%

Land Costs $ 1,772,700 10% 5.02

Hard Costs $ 10,629,000 57% 145.60

Tenant Improvements $ 1,982,000 11%

Architecture & Engineering $ 862,300 5%

Legal & Accounting $ 224,000 1%

Carrying Charges & Financing Fees $ 1,500,000 8%

Development Fee $ 1,530,000 8%

Total Uses $ 18,500,000 100%

Annual Cash on Cash Return 6.23%

IRR 11%

Highlands’ Garden Village Conclusion

CNU-Highlands Garden Village

Ron Tilton, PresidentFirstBank of Denver ph. (303)595-2403

June 12, 2009

“New Rules”• Commercial Real Estate (CRE) Guidelines: 300%

of Capital limitations are being enforced by regulators

• CMBS Loan Maturities peaking in 2013 & 2014 and the impact on closure of this market

• Future Inflationary Concerns will impact long term rates and available credit capacity

• The credit culture & “over exuberance” during the last 10 years and the resulting losses, have pushed underwriting criteria back in time.

What’s In & What’s Out

• LTC & LTV…real cash equity is ‘in’; hybrid equity is ‘out’ (developer fee’s, market appreciation, lower cap rates, etc.)

• Guarantors are ‘in’; non-recourse and limited recourse are ‘out’• Real presales are ‘in’; spec or soft presales are ‘out’ (real buyers vs. the fog-a-

mirror buyer with little money down & pre-qualified for a subprime loan)• Rate floors are ‘in’; LIBOR + 75 bp’s & Prime minus pricing with no floor is

‘out’• Experienced/veteran development teams are ‘in’; inexperienced developers and

contractors are ‘out’• Horizontal & phased development is ‘in’; large vertical, single stroke

development is ‘out’• 1.3 DSCR’s are ‘in’; projected lease up on increasing rent schedules is ‘out’• Well located development sites near jobs & transportation is ‘in’; drive-til-you-

can-afford-it is ‘out’• Reasonable cap & vacancy rates are ‘in’; sub-6 cap rates & 5% vacancy rates

are ‘out’

Highlands Garden Village-Case Study-lmplementation of New Urbanism-Jonathan Rose Companies LLC

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