David K. Fanslau DirectorDavid K. Fanslau Director and Members of the City Council, The attached Resolution transmits the Ainsworth and Beverly Apartments Tax Increment Financing (TIF)

City of Omaha Jean Stothert, Mayor

Honorable President

December 4, 2018

Planning Department

Omaha/Douglas Civic Center 1819 Farnam Street, Suite 1100

Omaha, Nebraska 68183 (402) 444-5150

Telefax (402) 444-6140

David K. Fanslau

Director

and Members of the City Council,

The attached Resolution transmits the Ainsworth and Beverly Apartments Tax Increment Financing (TIF) Redevelopment Project Plan, for a redevelopment project site located at 2230 and 2236 Jones Street. The redevelopment project plan proposes a complete renovation of two historic buildings resulting in a total of 33 one bedroom market-rate apartment units.

The Ainsworth and the Beverly Apartment buildings are a pair of nearly identical four story brick apartment buildings built in 1919 and are located in the southwest quadrant of the Central Business District. The buildings are also located within the Drake Court National Register Historic District and are presently vacant and uninhabitable. Each building originally contained 37 apartment units, but the unit count will be reduced by the combining two units into one to allow installation of an elevator in each building. Historic preservation tax credits will be used to assist project financing.

The Planning Board recommended the approval of this redevelopment project plan at the October 3, 2018 public hearing.

The Redevelopment Project Plan authorizes the City's participation in the redevelopment of this project site through the allocation of TIF in an amount up to $285,000.00, plus accrued interest. TIF will be used to offset eligible expenses such as acquisition, environmental and geotechnical studies, building rehabilitation, architectural and engineering fees and other public improvements as required. The total estimated project costs are $3,217,207.00, but are subject to change as final costs come in.

Your favorable consideration of this Resolution will be appreciated.

Respectfully submitted, Approved:

f-1-W_, {.,,�

Date o ert G. Stubbe, P.E.Public Works Director

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Date

Approved: Referred to City Council for Consideration:

Step en B. Curtiss Finance Director

-

Date

2732 rmf

Notice of Publication and Public Hearing: December 6, 2018 and December 13, 2018

Public Hearing: January 8, 2018

RESOLUTION NO.__________

CITY OF OMAHA LEGISLATIVE CHAMBER

Omaha, Nebraska

RESOLVED BY THE CITY COUNCIL OF THE CITY OF OMAHA:

WHEREAS, the primary objectives of the City of Omaha's Master Plan and Community Development Program are to encourage additional private investment and infill development within inner-city neighborhoods; and to eliminate conditions which are detrimental to public health, safety and welfare, by developing vacant or underutilized property within these neighborhoods; and,

WHEREAS, the approximately 0.294 acre redevelopment project site located at 2230 and 2236 Jones Street, legally described in Exhibit “A”, which is attached hereto and incorporated herein by this reference, is within a designated community redevelopment area, as the area meets the definition of blight and substandard per the Community Development Law and is in need of redevelopment; and,

WHEREAS, Section 18-2108 of the Nebraska Revised Statutes requires the City of Omaha to adopt a redevelopment plan before taking an active part in a redevelopment project; including the division of ad valorem taxes for a period not to exceed fifteen years under Sections 18-2147 through 18-2150, Revised Statutes of Nebraska; and,

WHEREAS, the Ainsworth and Beverly Apartments Tax Increment Financing (TIF) Redevelopment Project Plan (“Plan”) for the redevelopment project site proposes a complete renovation of two historic buildings resulting in a total of 33 one-bedroom, market-rate apartment units, as described in Exhibit "B", attached hereto and herein incorporated by reference, with the use of TIF as authorized by Section 18-2147 of the Nebraska Revised Statues; and,

WHEREAS, the Plan conforms to the City of Omaha’s Master Plan and the legislative declarations and determinations of the Community Development Law, as the redevelopment project would not be economically feasible and would not occur at the redevelopment project site without the use of TIF; and

WHEREAS, the costs and benefits of the redevelopment project, including their impact on other political subdivisions, have been analyzed and found to be in the long-term best interest of the community and the local economy, and the redevelopment project will satisfy an identified demand for the public and private services it will provide; and,

WHEREAS, the Plan for the redevelopment project site was approved by the TIF Committee and subsequently by the City of Omaha Planning Board at the October 3, 2018 meeting; and,

City Clerk Office Use Only:

Publication Date (if applicable): _____________

Agenda Date: ___________________________

Department: ____________________________

Submitter: ______________________________

RESOLUTION NO .. _�--·

WHEREAS, this Resolution seeks approval of the Ainsworth and Beverly Apartments Tax Increment Financing (TIF) Redevelopment Project Plan and authorizes the City's participation through the allocation of TIF in an amount up to $285,000.00, plus accrued interest, to offset TIF eligible expenses, including, but not limited to acquisition, environmental and geotechnical studies, building rehabilitation, architectural and engineering fees, and public improvements as required, for a project with total estimated costs of $3,217,207.00; and,

WHEREAS, the Plan presents a project based on estimated figures and projections that are subject to change as project costs are finalized, and is required to comply with all Planning Department requirements and Planning Board recommendations.

NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF OMAHA:

THAT, the attached Ainsworth and Beverly Apartments Tax Increment Financing (TIF) Redevelopment Project Plan, for the redevelopment project site located at 2230 and 2236 Jones Street, proposes a complete renovation of two historic buildings resulting in a total of 33 one-bedroom, market-rate apartment units, and authorizes the City's participation through the allocation of TIF in an amount up to $285,000.00, plus accrued interest, to offset TIF eligible expenses including, but not limited to acquisition, environmental and geotechnical studies, building rehabilitation, architectural and engineering fees, and public improvements as required, containing a provision for the division of ad valorem taxes as authorized by Section 18-214 7 through 18-2150, Revised Statutes of Nebraska, as analyzed and determined to be in conformance with the Community Development Law and as recommended by the City Planning Department, be and hereby is approved.

2732 rmf APPROVED AS TO FORM:

Adopted:

Attest: City Clerk

Approved: Mayor

EXHIBIT "A"

Legal Description, Alta Survey, Topographical Survey, etc. – see following page(s)

Legal Description

Project Legal Description: Lots Eight (8) and Nine (9), Hillcrest, an Addition to the City of Omaha, in Douglas County, Nebraska

EXHIBIT B

AINSWORTH AND BEVERLY APARTMENTS TIF REDEVELOPMENT

PROJECT PLAN

2230 and 2236 Jones Street

OCTOBER 2018

Jean Stothert, Mayor City of Omaha David K. Fanslau, Director Planning Department Omaha/Douglas Civic Center

1819 Farnam Street, Ste. 1111 Omaha, Nebraska 68183

OMAHAPLANNING

DS

City of Omaha Planning Department Planning Board Memo

To: Chairman and Members of the Planning Board

From: David K. Fanslau Planning Director

Date: September 26, 2018

Subject: Ainsworth and Beverly Apartments TIF Redevelopment Project Plan 2230 and 2236 Jones Street Case #C3-18-205

Project Description Proposal

The development team intends to preserve this historic property through a complete renovation, resulting in a total of 33 one bedroom market-rate apartment units. These will be 450 to 550 square feet in size, and are intended to rent for about $625 to $675 per month. Historic preservation tax credits will be used to assist project financing.

Public improvements will include walkway lighting fixtures similar to those existing at the Drake Court Apartments, some sidewalk work, street façade restoration/improvements, and bronze plaques to identify the buildings as historic structures, helping to strengthen and unify the historic district. The applicant anticipates construction completion by December, 2019.

Background The Ainsworth and the Beverly Apartment buildings are a pair of nearly identical four story brick apartment buildings in the southwest quadrant of the Central Business District. The two buildings are located in the Drake Court National Register Historic District, and are also about three blocks south of the Flats on Howard. Both the Drake Court Apartments and the Flats on Howard are previously approved TIF projects. The Ainsworth and Beverly Apartments complement those projects, will help expand the range of residential living options downtown, and will help strengthen an area of downtown where additional reinvestment is needed. The buildings were constructed in 1919. They are presently vacant and uninhabitable. Each originally contained 37 apartment units. The unit count will be reduced due to the introduction of an elevator in each building. Two units will be combined into one, in many instances.

Analysis The project site is located within a Community Redevelopment Area, meets the requirements of Nebraska Community Development Law and qualifies for the submission of an application for the utilization of Tax Increment Financing to cover costs associated with project development as submitted for approval through the Tax Increment Financing process. The project is in com-pliance with the Master Plan, appropriate Ordinances and development regulations of the City.

The project is in compliance with the City’s Master Plan and furthers its goals by preserving historic structures, reversing deterioration in older parts of the City, and ensuring good quality

Case Number: C3-18-205 Page 2

DS

housing. The Housing Element of the Master Plan calls for improving “the quality of the renter-occupied housing stock in deteriorated parts of the city through rehabilitation.” The Downtown Master Plan identifies the “Park East / Leavenworth District” where this project is located as the “last frontier for redevelopment in Downtown Omaha” with the potential to become an affordable mixed use area with a mix of small apartment buildings, single family dwellings, and commercial development.

No Building Permit will be issued based on a site plan that does not comply with the provisions of the Zoning Ordinance.

RECOMMENDATION: Approval.

ATTACHMENTS: General Vicinity Map Project Plan

567.683,406Ainsworth & Beverly Apts TIF Project Plan

284

3,4061 :

1 =

Douglas County GIS

1819 Farnam St

Suite 402

Omaha NE, 68183

This map is a user-generated, static output. It is for

reference only. Data on this map may not be

accurate, current, or otherwise reliable. It is for

informational purposes only, and may not be suitable

for legal, engineering, or surveying purposes.568

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INTER-OFFICE COMMUNICATION

Date: September 6, 2018 To: TIF Committee:

David Fanslau, Stephen Curtiss, AL Herink, Paul Kratz, Robert Stubbe, Bridget Hadley, Todd Pfitzer, Troy Anderson

From: Don Seten - City Planning Applicant: City of Omaha Planning Department Project Name: Ainsworth and Beverly Apartments TIF Redevelopment Project Plan Location: 2230 and 2236 Jones Street Request: The TIF request is for up to $285,000 at a bank interest rate of 5.5%, inclusive of capitalized interest. Using the levy rate of 2.24872% and other assumptions of the TIF calculation spreadsheets, the TIF request is supported using estimated cost and estimated market approaches. TIF Fee Schedule: $500 application fee paid; the processing fee of $3,000 will be collected. Total fees will be $3,500. TIF Justification: The project site is located within a Community Redevelopment Area, meets the requirements of Nebraska Community Development Law and qualifies for the submission of an application for the utilization of Tax Increment Financing to cover costs associated with project development as submitted for approval through the Tax Increment Financing process. The project is/or will be in compliance with the Master Plan, appropriate Ordinances and development regulations of the City. This infill redevelopment project serves to upgrade and revitalize two aging historic apartment buildings located near the Drake Court Apartments, an earlier TIF project. The project is located in an area of the central business district that has experienced less reinvestment than overall downtown, as a whole. Ultimately, this project plan will enhance the tax base for various taxing jurisdictions within Omaha and the state. The project would not be feasible without the assistance of the TIF Program. The project is in compliance with the City’s Master Plan, supporting several of its goals. The Concept Element of the Master Plan calls for preserving historic structures, reversing deterioration in older parts of the City, and ensuring good quality housing. The Housing Element of the Master Plan calls for improving “the quality of the renter-occupied housing stock in deteriorated parts of the city through rehabilitation.” The Downtown Master Plan identifies the “Park East / Leavenworth District” where this project is located as the “last frontier for redevelopment in Downtown Omaha” with the potential to become an affordable mixed use area with a mix of small apartment buildings, single family dwellings, and commercial development. TIF eligible costs are acquisition, rehabilitation and renovation construction costs, and public improvements. TIF eligible costs total $2,800,022. The total estimated project costs are $2,907,290. TIF Eligible Expenses Amount Acquisition $ 120,000 Construction Hard Costs / Building Rehabilitation $ 2,622,209 Architecture and Engineering $ 55,000 Subtotal $ 2,797,209

TIF Fees $ 3,500 Total TIF Eligible Expenses $ 2,800,709

The TIF is 8.6% of the total project costs.

Recommendation: Approval.

Project Description

Background The Ainsworth and the Beverly Apartment buildings are a pair of nearly identical four story brick apartment buildings in the southwest quadrant of the central business district. The two buildings are located in the Drake Court National Register Historic District, and are also about three blocks south of the Flats on Howard. Both the Drake Court Apartments and the Flats on Howard are previously approved TIF projects. The Ainsworth and Beverly Apartments complement those projects, will help expand the range of residential living options downtown, and will help strengthen an area of downtown where additional reinvestment is needed. The buildings were constructed in 1919. They are presently vacant and uninhabitable. Each originally contained 37 apartment units. The unit count will be reduced due to the introduction of an elevator in each building. Two units will be combined into one, in many instances.

Proposal The development team intends to preserve this historic property through a complete renovation which will result in a total of 33 one bedroom market-rate apartment units. These will be 450 to 550 square feet in size, and are intended to rent for about $625 to $675 per month, a rate that is affordable in relation to overall downtown apartment rental rates. Historic preservation tax credits will be used, to assist project financing. Public improvements will include walkway lighting fixtures similar to those existing at the Drake Court Apartments, some sidewalk work, street façade restoration/improvements, and bronze plaques to identify the buildings as historic structures, helping to strengthen and unify the historic district. The applicant anticipates construction completion by December, 2019.

Project Finance Summary - Sources & Uses Sources of Funds Amount Owner Equity $ 120,000 Conventional Loan; First National Bank $ 1,912,207 Federal and State Historic Tax Credits $ 900,000 Tax Increment Financing Loan; First National Bank $ 285,000 Total Sources of Funds $ 3,297,207

Uses of Funds Amount Purchase of Buildings $120,000 Construction Hard Costs; Building Rehabilitation $2,832,207 Construction Soft Costs (A&E is $55,000 of this) $155,000 Site work Costs – Sewer, Water, Electrical Service $55,000 Total Uses of Funds $ 3,297,207

Final Valuation Discussion

The applicant estimates a probable final valuation of $2,436,600 upon project completion, based on a stabilized NOI and a capitalization rate of 8.0 percent, which yields a value of $73,836 per apartment. Comparable apartment developments in the area were used to support the estimated post-rehab valuation.

Land Use and Zoning Currently, both buildings are vacant and were last used as warehouse space. The proposed uses are mixed-use for each building. The Drummond will have two floors of residential and ground floor commercial. The Firestone will have three floors of commercial space. The site is currently zoned DS-ACI-1(PL). The applicants will be applying to rezone the property to CBD-ACI-1(PL). Both zoning classifications are acceptable within this area.

Utilities and Public Improvements

Standard utilities (electrical, water, sewer) exist at the site. The project proposes a few improvements to the existing streetscaping along Jones Street, including thematic lighting consistent with the walkway lighting used at the Drake Court Apartment project.

Transportation No transportation issues noted.

Historical Status Both of these 1919 buildings are contributing structures in the Drake Court Historic District, a National Register Historic District. As such, they are both certified historic structures. The owner/developer will be using both state and federal historic tax credits to help finance the rehabilitation of the buildings, which requires them to comply with the Secretary of Interior’s Standards for Rehabilitation, as reviewed and interpreted by the Nebraska State Historic Preservation Officer (SHPO).

Evaluation Criteria: Mandatory Criteria – from the TIF application

1. The project must be located within a blighted area or an area eligible for a designation of blight as required and set forth by State Statute.

The project is located at 2230-2236 Jones Street, Omaha, NE within a designated community redevelopment area.

2. The project must further the objectives of the City's Comprehensive Plan.

The Ainsworth and Beverly Apartments project furthers the objectives of the City’s Master Plan by:

a) Revitalization of older neighborhood communities b) Diversification of the urban core

c) Implementation of Urban Design Elements through . streetscaping and wayfinding.

d) Preservation of Historic Sites 3. The use of TIF for the project will not result in a loss of pre-existing tax

revenues to the City and other taxing jurisdictions.

The Ainsworth and Beverly Apartments project’s use of TIF will not result in a loss of pre-existing tax revenues. The tax received from the increased taxable valuation will be more than sufficient to support the Tax Increment Financing.

4. The developer is able to demonstrate that the project would not be economically feasible without the use of TIF. In addition, when the project has site alternatives, the proposal must demonstrate that it would not occur

in the area without TIF. Return on investment assists in determining the economic feasibility of the project.

The Ainsworth and Beverly Apartments project will not be economically feasible without the use of Tax Increment Financing due to negative cash flow.

Cost-Benefit Analysis – from the TIF application

1. Tax Shifts resulting from the approval of the use of funds pursuant to section 18-2147 (of the Community Development Law):

The use of TIF will not result in any tax shifts. The current level of taxes will continue to flow to the current taxing entities, and only the increased value of revenues, resulting from the improvements will be applied to the cost of the improvement.

2. Public infrastructure and community public service needs impacts and local tax

impacts arising from projects receiving incentives: No community public service needs will arise from Ainsworth and Beverly Apartments project receiving incentives. 3. Impacts on employers and employees of firms locating or expanding within the

boundaries of the area of redevelopment project: The Ainsworth and Beverly Apartments will house, realistically, around 45-65 new residents. These new neighbors will shop for groceries, utilize daycare, purchase fuel, clothes and all the necessaries of life. The economic impact in the area is in the hundreds of thousands of dollars annually. 4. Impacts on employers and employees within the city and the immediate area that is

located outside of the boundaries of the area of the redevelopment project: Intentionally left blank.

5. Any other impacts determined by the authority to be relevant to the consideration of costs and benefits arising from the development project: Intentionally left blank.

ATTACHMENTS: TIF Calculation Spreadsheet TIF Application

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Ainsworth & Beverly Apartments 2230-2236 Jones Street, Omaha

Tax Increment Financing (TIF) Application

August 2018 Part 1 – Public Information

Application for Tax Increment Financing (TIF) The Ainsworth and Beverly Apartments – 2230 & 2236 Jones Street, Omaha

2

Tax Increment Financing Application

Project Name: The Ainsworth and Beverly Apartments

Project Legal Description: Lots Eight (8) and Nine (9), Hillcrest, an Addition to the City of Omaha, in Douglas County, Nebraska

Project Address(es): 2230 & 2236 Jones Street, Omaha, NE 68102

Property Owner: Anderson Apartments, LLC (a Nebraska Limited Liability Company)

Property Owner’s Address: 2702 Douglas Street, Omaha, NE 68131

Estimated Total Project Cost: $3,217,207

TIF Request: $285,000

New Construction: No

Rehabilitation: Yes

Proposed Project Size: Gross Sq. Ft. (2 buildings x 4 floors/bldg. =) Net Sq. Ft. (2 buildings x 4 floors/bldg. =)

# of Acres Lot/parcel size (sq. ft.)

32,264 32,264 0.294 12,799

LIHTC Project: No

Market Rate Project: Yes

Historic Tax Credit Project: Yes

Current Use: Proposed Use:

Vacant Market Rate Apartments

Current Zoning: Proposed Zoning:

DS-ACI-1 (Downtown Service District) CBD-ACI-1 (Central Business District)

Current Annual Real Estate Taxes (2017 Tax Year): Tax Levy = 2.24872% (Year 2017)

$1,869 (2230 Jones Street) $1,869 (2236 Jones Street) $3,738 Annual Total

Current Assessed Tax Valuation (Year 2018): Land Improvement Total

$37,300 (2230 Jones) + $35,600 (2236 Jones) $97,200 (2230 Jones) + $98,800 (2236 Jones) $268,900 Combined Total


3

I. Project Summary/Overview Page

This project concerns the rehabilitation of The Ainsworth and Beverly Apartment buildings into

market rate apartments. The Ainsworth building is located at 2230 Jones Street. The Beverly

building is its twin, and situated adjacent to the west at 2236 Jones Street. Both buildings are

vacant, un-inhabitable and in worn out condition.

Built in 1919, each building has thirty-six (36) single room apartments. There is a manager’s

apartment in the lower level of the Beverly, for a total of 73 units. Our plan is to rehabilitate

both buildings into one bedroom apartments, with a total of 33 units. Our expected tenant will

be the individual working downtown, university student, single parent or a couple living

together.

Sources and uses of funds are budgeted to total $3,217,207, each. Sources of funds are

budgeted to be: Owner equity = $120,000; conventional loan = $1,912,207; Federal and State

historic tax credits = $900,000; and TIF loan = $285,000.

The Ainsworth and Beverly Apartments have been modeled on a valuation of $2,436,600.

Annual NOI = $194,928 divided by a capitalization rate of 0.08. Monthly rent will be $625-675.


4

II. Narrative

A. Detailed Project Description

The rehabilitation of The Ainsworth and Beverly Apartment buildings is a necessary next step in

the revitalization of the Drake Court Historic District and the improving area near 24th and

Leavenworth Streets. The area has seen a considerable amount of investment in recent years,

including the Anderson Apartments’ market rate residential apartments, and its associated

small-businesses in the ground floor commercial spaces. In addition, there is the recently

constructed OPS Liberty Elementary School. The Drake Court and Ansonia Apartments are

earlier, yet significant, improvements to the neighborhood. Despite the investments in the

area, several properties along Jones Street between 22nd and 24th Streets are in need of

rehabilitation.

The Ainsworth and Beverly Apartment buildings are twins, located a quarter of a block east of

South 24th Street facing south to Jones Street. They are four stories tall, and currently have 12

efficiency apartments on each of the three upper floors. At this time, the building is vacant and

un-inhabitable. Both buildings sit on a raised foundation faced in brick on the façade that

opens to the street; the ground floor houses the mechanical and electrical rooms, along with

common area. There are a combined total of 72 apartments, plus a “manager’s apartment” on

the ground floor of 2236 Jones Street.

The Beverly and Ainsworth Apartment buildings dominate the respective lots on which they sit.

The lots are 6,160 s.f. and 6,210 s.f. respectively (the Beverly’s lot has 50 s.f. clipped off its

northwest corner to facility traffic turning in the alley located adjacent to the west). With a

structural footprint of 4,033 s.f., each building occupies nearly 65% of the building site.

Between the twins is green space, and they are joined by means of a covered chase for the

purpose of sharing utility systems.

Built in 1922, both apartment buildings are currently are of average quality, in worn-out

condition. Un-occupied, they have a 100% vacancy rate.

Along with applying for TIF, the owner/developer/contractor has applied for State and Federal

historical tax credits. As a result, there are limitations on the kind of rehabilitation that is

allowed. The plan put forth for the Ainsworth and Beverly is to combine two efficiency

apartment spaces into one, larger, one-bedroom unit.

Ingress and egress points to and from the buildings will remain as built.


5

An interior stairwell serves the upper floors, is located at the midpoint of the building, and will

remain. An exterior stairwell on the north side of each building serves as a fire escape, as well

as an additional means of entry in the building. Both fire escapes will be re-built.

The side and rear elevations utilize terra cotta blocks with a glazed surface in a buff color and

will remain. The side elevations contain six bays of paired one-over-one double hung windows.

All window bays will remain, but all of the double-hung windows will be replaced. The front

elevations facing south have small, flat, rectangular canopies with denticulated cornices that

will remain. Also, the front elevation of each building has a soaring parapet and

ornamentation at the peak. The “slit” windows that flank the central bank of windows on the

south elevation have been bricked by a prior owner. These slit windows will be re-opened to

allow for natural light into the apartments.

The terraced courtyard between the buildings will be retained and enhanced. The chase used

for utilities that connects the buildings will be retained.

Each apartment unit will have a kitchen with stove, microwave, dishwasher and refrigerator.

Each apartment will have its own full bathroom, including a tub/shower. Each unit will have its

own clothes washer and dryer. Each apartment will have a mechanical room housing a split

system furnace and air conditioner.

This project is located within a community redevelopment area, as the area meets the

definition of blighted and substandard (per the Community Development Law) and is in need of

redevelopment. The use of TIF will not result in any loss of pre-existing tax revenues to the City

or other taxing jurisdictions. This project will not be economically feasible without the use of

TIF.

An elevator will be added to each building. This will result in a loss of six (6) of the current

efficiency apartments, but this loss will be partially made up by adding two (2) apartments into

the lowest level of the Beverly (2236 Jones).

The project furthers several objectives of the City’s Master Plan. The primary objectives of the

City of Omaha’s Master Plan (and Community Development Program) are to encourage

additional private investment within inner-city neighborhoods; and to eliminate conditions

which are detrimental to public health, safety and welfare, by developing vacant, underutilized

property within these neighborhoods, as well as revitalize deteriorated historically significant

buildings. The rehabilitation of The Ainsworth and Beverly Apartment buildings furthers these

objectives.


6

The Anderson Apartments LLC

Development Team

Developer/Contractor Landmark Group Dave Paladino 2702 Douglas Street Omaha, NE 68131 Phone: 402-672-6566

Architect TRB Architecture Travis Brodersen 450 Regency Pkwy #300 Omaha, NE 68114 Phone: 402-320-3633

Property Management Paladino Development Group Dave Paladino 619 South 20th Street Omaha, NE 68102 Phone: 402-672-6566

Financial Accounting/Analyst Paladino Related Companies Dave Paladino 2702 Douglas Street Omaha, NE 68131 Phone: 402-672-6566

Civil Engineer Ehrhart Griffin & Associates 3552 Farnam Streets Omaha, NE 68131 Phone: 402-551-0631

Owner Anderson Apartments, LLC 2702 Douglas Street Omaha, NE 68131 Phone: 402-672-6566

Project Manager Dale Clymens Landmark Group 2702 Douglas Street Omaha, NE 68131 Phone: 402-968-3950

Mechanical Engineer RDG Engineering 13504 Stevens Street, Suite D Omaha, NE 68137 402-333-9009

Electrical Engineer Schaefer Engineering, Inc. 234 South 167th Street Omaha, NE 68118 402-572-6807


7

B. Land Use Plan

2230 & 2236 Jones Street, Omaha to be rehabilitated as apartments with market rate rents.

C. Zoning

Current zoning is Downtown Service District (DS) and proposed zoning is Central Business

District (CBD)

D. Public Improvements

Public improvements would involve streetscaping and wayfinding solutions that would enhance

the walkways along Jones Street between 22nd and 24th Streets. There are attractive walkway

lighting fixtures currently in use at the Drake Court Apartments. The “theme” of these lighting

fixtures will be carried along Jones Street within the historic district in order to develop a

tighter bond between the contributing members of the District. In addition, signage in the form

of bronze plaques will be created and attached to both the Ainsworth and Beverly to further

identify them as contributing members of this historic district.

E. Historical Status

The Ainsworth and Beverly Apartment buildings are both located within the Drake Court

Historic District. The National Parks Service has determined that these buildings are “certified

historic structures” for purposes of rehabilitation (see attached Historic Preservation Certificate

Application Part 1-Evaluation of Significance, signed on 11/29/2016 by Angela C. Shearer for the

NPS.


8

II. Development Financing Plan

Ainsworth and Beverly Apartments – Development Financing Plan Sources & Uses

Sources of Funds Amount

Owner Equity 120,000$

Conventional Loan - First National Bank of Omaha in review 1,912,207$

Federal and State Historic Tax Credits - TBD upon project completion 900,000$

Tax Increment Financing - First National Bank of Omaha in review 285,000$

Total Source of Funds 3,217,207$

Uses of Funds Amount

Purchase of Existing Land and Buildings 120,000$

Construction Soft Costs 155,000$

Construction Hard Costs 2,832,207$

Sitework Costs - Sewer, Water, Electrical Service 110,000$

Total Uses of Funds 3,217,207$

Final Valuation Determination

Ainsworth and Beverly Apartments project has been modeled on a valuation of Year 2 Net Operating Income = $194, 928 divided by an 8% Cap Rate equaling $2,436,600.


9

III. Construction Budget, Itemized Public Improvement Costs and Project Time Line

Cost Item Budgeted Cost TIF El igible Cost

1 Existing buildings and land 120,000$ -$

2 Interest, fees, title ins, appraisal, etc. 25,000$ 25,000$

3 Architecture fees 65,000$ 65,000$

4 Engineering and surveying fees 55,000$ 55,000$

5 Appliances Package 103,590$ 103,590$

6 Cabinets 40,589$ 40,589$

7 Carpet/Flooring 96,000$ 96,000$

8 Common space-interior build-out 45,000$ 45,000$

9 Construction contingency 185,220$ 185,220$

10 Demolition 48,400$ 48,400$

11 Dumpsters and hauling 13,200$ 13,200$

12 HazMat-lead and asbestos removal 15,000$ 15,000$

13 Window material 120,900$ 120,900$

14 Metal door material and installation 31,500$ 31,500$

15 Wooden door material 37,000$ 37,000$

16 Window installation 39,000$ 39,000$

17 Electrical/Fire alarm 427,725$ 427,725$

18 Elevator install 373,500$ 373,500$

19 Fire escapes 85,800$ 85,800$

20 Fire Sprinkler 126,000$ 126,000$

21 Drywall - hang, finish 164,880$ 164,880$

22 General Conditions 25,000$ 25,000$

23 Sub-contract labor 52,000$ 52,000$

24 HVAC 185,220$ 185,220$

25 Plumbing fixtures 132,500$ 132,500$

26 Closet shelves 5,000$ 5,000$

27 Final clean 12,000$ 12,000$

28 Paint/stain 40,000$ 40,000$

29 Cabinet/trim install 18,500$ 18,500$

30 Mailboxes 4,945$ 4,945$

31 Landscaping 4,500$ 4,500$

32 City walkway improvements 95,000$ 95,000$

33 Concrete-flat 12,000$ 12,000$

34 Plumbing-supply, waste lines 134,188$ 134,188$

35 Roofing 78,000$ 78,000$

36 Site utilities 110,000$ 110,000$

37 Steel erection, install 18,000$ 18,000$

38 Exterior masonry repair, restoration, clean 60,000$ 60,000$

39 TIF fees 3,500$ -$

40 TIF voluntary contribution 8,550$ -$

41 Collumn Totals 3,217,207$ 2,897,157.00$

42 Project Hard Costs 2,832,207$

43 Cost per Apartment Unit 86,952$


10

Itemized Public Improvements (in line items above)

Cost Item Budgeted Cost TIF El igible Cost

1 Decorative Lighting 18,050$

2 Plaques/Signs 1,500$

3 Stamped Concrete 45,500$

4 Concrete Planters 29,950$

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12

IV. Five (5) Year Pro Forma – profit/loss and cash flow statement


13

Income Year Year Year Year Year

1 2 3 4 5

1 Monthy Rental Income 23,717$ 24,191$ 24,675$ 25,169$ 25,672$

2

3 Annual Total Revenue 284,604$ 290,296$ 296,102$ 302,024$ 308,065$

4 Vacancy

5 (19,922)$ (20,321)$ (20,727)$ (21,142)$ (21,565)$

6 7.0% Stabilized

7

8 Gross Rental Income 264,682$ 269,975$ 275,375$ 280,882$ 286,500$

9

10 Operating Expenses

11

12 Accounting/Office 3,000$ 3,090$ 3,183$ 3,278$ 3,377$

13 Utilities 4,800$ 4,944$ 5,092$ 5,245$ 5,402$

14 Waste Removal 3,600$ 3,708$ 3,819$ 3,934$ 4,052$

15 Repairs /Maintenance 22,200$ 22,866$ 23,552$ 24,259$ 24,986$

17 Real Estate Taxes 3,712$ 3,786$ 3,862$ 3,939$ 4,018$

18 Insurance 4,480$ 4,614$ 4,753$ 4,895$ 5,042$

Property management 13,234$ 13,499$ 13,769$ 14,044$ 14,325$

Contingency 18,000$ 18,540$ 19,096$ 19,669$ 20,259$

19

20 Total Operating Expenses 73,026$ 75,047$ 77,126$ 79,263$ 81,462$

Cost per Apartment Annually 2,028.50$ 2,084.65$ 2,142.39$ 2,201.76$ 2,262.82$

Cost per Apartment Monthly 169.04 173.72 178.53 183.48 188.57

22 Net Operating Income (N.O.I.) 191,656$ 194,928$ 198,249$ 201,619$ 205,038$

23 Operating Expense Ratio 27.6% 27.8% 28.0% 28.2% 28.4%

24

25

26 1st Mortgage Debt Service 144,358$ 144,358$ 144,358$ 144,358$ 144,358$

27 TIF Mortgage Debt Service 36,790$ 36,790$ 36,790$ 36,790$ 36,790$

28

29 Total Debt 181,148$ 181,148$ 181,148$ 181,148$ 181,148$

30

31 Net Cash Flow 10,508$ 13,780$ 17,101$ 20,471$ 23,891$

32

33 Debt Service Ratio (1st Mort) 1.33 1.35 1.37 1.40 1.42

34 Debt Service Ratio Total 1.06 1.08 1.09 1.11 1.13

35

Cost of Project without TIF 3,217,207$ 3,217,207$ 3,217,207$ 3,217,207$ 3,217,207$

Unleveraged Cap Rate without TIF 6.0% 6.1% 6.2% 6.3% 6.4%

Cost of Project without TIF 3,217,207$ 3,217,207$ 3,217,207$ 3,217,207$ 3,217,207$

TIF Proceeds 285,000$ 285,000$ 285,000$ 285,000$ 285,000$

Cost of Project WITH TIF 2,932,207$ 2,932,207$ 2,932,207$ 2,932,207$ 2,932,207$

Unleveraged Cap Rate WITH TIF 6.5% 6.6% 6.8% 6.9% 7.0%

Financing Principle 1,912,207$ 1,912,207$ 1,912,207$ 1,912,207$ 1,912,207$

Down Payment without TIF 405,000$ 405,000$ 405,000$ 405,000$ 405,000$

Cash on Cash return without TIF 11.7% 12.5% 13.3% 14.1% 15.0%

Down Payment WITH TIF 120,000$ 120,000$ 120,000$ 120,000$ 120,000$

Cash on Cash Return WITH TIF 39.4% 42.1% 44.9% 47.7% 50.6%


14

V. Statement of Need and ROI Analysis(with and without TIF)

This information below will illustrate the financial feasability of the project. Required for TIF financing.

Return on Investment Analysis "The But for" Test

WITH WITHOUT

TIF TIF

Gross Annual Income Line 2 290,296$ 290,296$

Vacancy Rate 7% Line 6 (20,321)$ (20,321)$

Less: Expenses (including RE Taxes) Line 20 (75,047)$ (75,047)$

Less: 1st Mortgage Debt Service Line 26 (144,358)$ (165,873)$

Less: TIF Mortgage Debt Service Line 27 (36,790)$ -$

Less REAL ESTATE Taxes (36,790)$

Net Projected Annual Cash Flow 13,780$ -$ (7,735)$

ROI 11.48% -6.45%

Debt Service Ratio 1.08 1.09

*see other worksheet #22

Project Cash Flow is negative and not able to proceed without TIF financing

YEAR TWO

VI. Evaluation Criteria: Mandatory Criteria

Mandatory Criteria 1) Located at 2230-2236 Jones Street, Omaha, NE, this project is within a designatedcommunity redevelopment area.

2) The Ainsworth and Beverly Apartments project’s use of Tax Increment Financing will notresult in a loss of pre-existing tax revenues to the city or other taxing jurisdictions. All of therevenue that will be used to pay the Tax Increment Financing loan will come from additionalvaluation on the site resulting from the improvements to be constructed on the site. The taxreceived from the increased taxable valuation will be more than sufficient to support the TaxIncrement Financing.

3) The Ainsworth and Beverly Apartments project is not economically feasible without the useof Tax Increment Financing due to negative cash flow.


15

4) The Ainsworth and Beverly Apartments project furthers the objectives of the City’s MasterPlan by:

a) Preservation of two certified historic structures,b) Densification of the urban core,c) Implementation of Urban Design Elements through streetscaping and wayfinding,

and d) Revitalization of older neighborhood communities.

VII. Cost-Benefit Analysis

1) Tax shifts resulting from the approval of the use of funds pursuant to section 18-2147:The use of TIF will not result in any tax shifts. The current level of taxes will continue toflow to the current taxing entities, and only the increased value of revenues, resultingfrom the improvements will be applied to the eligible costs of the improvements.

2) Public infrastructure and community public service needs impacts and local tax impactsarising from projects receiving incentives:No community public service needs will arise from Ainsworth and Beverly Apartmentsproject receiving incentives. The proposed TIF will be used to offset costs ofrehabilitation and public improvement costs which are eligible expenses.

3) Impacts on employers and employees of firms locating or expanding within theboundaries of the area of redevelopment project:The Ainsworth and Beverly Apartments will house, realistically, around 45-65 newresidents. These new neighbors will shop for groceries, utilize daycare, purchase fuel,clothes and all the necessaries of life. The economic impact in the area is in thehundreds of thousands of dollars annually.

4) Impacts on employers and employees within the city or village and the immediate areathat are located outside of the boundaries of the area of the redevelopment project :The rehabilitation of apartments within the Drake Court Historic District and the

consequential addition of new residents will impact employers and employees withinthe downtown of Omaha, but outside the immediate area. More residents will drivedemand for goods and services, thereby creating opportunities for business growth andemployment. New housing units will create more housing choices for those who livedowntown. Local colleges and universities, as well as Omaha Public Schools may bebeneficially impacted by the tenant mix at the Ainsworth and Beverly Apartments.


16

5) Any other impacts determined by the authority to be relevant to the consideration ofcosts and benefits arising from the redevelopment:Jones Street between 22nd and 24th Streets has been place where loitering and littering

occur. The rehabilitation of the Ainsworth and Beverly will be a next step to take (following the Flats on Howard within the Howard Street Historic Apartment District) to drive this un-healthy behavior out of the area of the Drake Court Historic District.

6) Impacts on the student populations of the school district within the city or village:We anticipate that there will be very few students residing in the Ainsworth and Beverly

Apartments, and, consequently, minimal impact on the Omaha Public School district.

Employment Information

Job Creation/Retention Figures Job Creation / Retention Types

Permanent Jobs (FTEs) 0 Management 0

Part-Time Jobs 2 Technical 0

Totals 2 Sales/Marketing 1

Clerical/Admin 0

Total Jobs Created 2 Production 0

Total Jobs Retained 0 Clerk Service 0

Totals 2 General Labor 1

Totals 2

Anticipated Annual Payroll or Average Annual Wage for Full & Part-Time Jobs $76,000

Estimated number of construction jobs created as a result of this project * 15

Anticipated Payroll for Construction Jobs $750,000

1) Part-Time Property Manager $40,000 1) Part-Time Maintenance Technician $36,000

*15 jobs x40 hrs x50 wks x$25=$750,000

Residential Unit Mix Information Mo. Rent Range

Multi-family Rental 0 Studio

33 1 Bedroom $625-675

0 2 Bedroom

Owner-occupied 0 Studio


17

0 1 Bedroom

0 2 Bedroom


18


19


20


21


22


23


24


25


26


27


28

Documents

David K. Fanslau DirectorDavid K. Fanslau Director and Members of the City Council, The attached Resolution transmits the Ainsworth and Beverly Apartments Tax Increment Financing (TIF)