Agenda - City of Santa Monica

To: Steve Mizokami, City of Santa Monica April 23, 2013
Subject: 1320 2 nd Street: Value Enhancement & Fiscal Impact Analysis Page 12
iv.
$4,000 per unit for the two-bedroom units.
b. To fulfill the City’s inclusionary housing requirements, the Proposed
Project includes five very-low income one-bedroom units. In 2012, the
rent for these units is set by the City at $854. 4
2. An allowance of $10 per unit per month is provided for miscellaneous income.
3. A 5% vacancy and collection allowance is provided.
4. KMA estimates the residential operating expenses as follows:
a. The general operating expenses are estimated at $3,600 per unit per
year.
b. A management fee estimated at 5% of effective gross residential income
is provided.
c. The annual property tax payments are estimated at $4,310 per unit. 5
d. A capital reserve equal to $150 per unit is provided.
KMA estimates the effective gross income for the residential component at $1.49 million,
and the operating expenses at $501,800. The resulting residential net operating income
is estimated at $989,800.
Retail Net Operating Income
1. Revenues:
a. The retail rent is estimated at $4.00 per square foot of retail GBA per
month.
b. The CAM reimbursements are set at $10 per square foot per year.
2. A 5% vacancy and collection allowance is provided.
3. KMA estimates the retail operating expenses as follows:
a. The CAM expenses are estimated at $10 per square foot per year.
4 Additional affordable units will be provided as part of the Community Benefits Package. The
effective cost of those units is included in the calculation of the Community Benefits to be
received by the City.
5 Based on a 5.5% capitalization rate and a 1.27% property tax rate.
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19305.013.001