Village Hill Apts - Responses to CPC Questions 10.13.2017.docx
Village Hill Apartments – Responses to CPC Questions
Q: What’s the current status of the Smith College Affordable Housing Fund? Has their previous commitment arising from the Green Street expansion been satisfied?
According to the City’s Planning Department, Smith College is almost balanced (less than 1 unit difference) between units eliminated by the College and new units supported through the
Smith College Affordable Housing Fund. The College is therefore under no obligation to contribute to affordable housing developments at this time. TCB’s local partner, Valley CDC,
met with a Smith College representative to introduce the Village Hill project, noting that the site’s proximity to the College and the large range of affordability might make the project
an attractive housing choice to College faculty and staff at various economic levels. The College is supportive and interested but it is not known whether this will translate into
a financial contribution.
Q: The pro forma reflects a high debt service coverage ratio. Would it be possible to take on more performing debt, and reduce the CPA request?
The first mortgage is sized to maintain a debt service coverage ratio of 1.15 through Year 15. Due to income and expense trending, the project’s debt service coverage ratio is a bit
higher in year 1, but the project cannot take on more debt because of the year 15 constraint.
Q: Because the operating pro forma is presented in summary form, it is difficult to determine the annual operating expense of the residential units. Could you please provide this.
Our financial model shows annual operating expenses of $7,991 per unit, which represents the mid-range of TCB’s actual operating expenses at Hilltop Apartments and Hillside Place.
Q: Is the developer taking the maximum allowable overhead and fee?
Yes, the developer fee is sized according to the latest Massachusetts Qualified Allocation Plan. This is important as the overhead and fee compensate the developer for work to accomplish
the project, and they also serve to protect the project from financial risk. TCB’s investor and lenders will require that any cost overruns be borne by the developer’s fee.
Q: Does the PVTA bus stop at the main entrance to the Village Hill complex (at Route 66) make this development accessible to downtown via means other than a car?
Yes. The development is accessible to downtown by bus, with a bus stop on both sides of Route 66 (for travel going to and coming from downtown) near the main entrance to Village Hill.
Village Hill is also connected to downtown via bike trails and sidewalks. It is about a one
mile walk from Village Center to downtown and many current residents of Village Hill routinely walk or bike to downtown.
Q: How was the $350,000 figure derived? If we were unable to fund the project in full, would partial funding be helpful?
TCB requests financial support for Village Hill from the City of Northampton in the total amount of $500,000, through a combination of CPA and CDBG. The funds are needed to support the
overall project cost, and to demonstrate a strong local dollar match, which is a threshold requirement of the State for consideration in competitive applications for both state and
federal funding including the 9% Low Income Housing Tax Credit.
TCB understands that CPA resources are scarce and the current round is competitive and we are open to a phased deployment of funding commitment as the project gets closer to closing
and construction start. At this point in time, a partial award of funding would satisfy the city’s requirement for local match for our 2018 funding application to the State, as well
as be extremely helpful to demonstrate the city’s strong support of the project.
Q: If full funding of the entire project does not come through, will the CPC funds be returned to CPC?
As with most project funds, it is our understanding that CPC funds would not be funded into the project until the project’s financial closing and commencement of construction. In the
event that Village Hill not receive the funding commitments needed to pursue the project, then any committed CPC funds could then be re-allocated to other projects.