Livability — Journal Communications Inc.

• 7.8 acres • Stage Stop Antique Mall &

Service Station • $3.28 million Bank Loan • Debt Servicing – Land Sales

& Tax Sharing Agreement • Concept of Retail/Office

• Needed Senior Affordable Housing

• Opens up Existing Stock to Families

• Loan Fully Paid Off • Remediation of Blight

2015 DRCOG – Senior Housing MVIE

Collaborative Approach for Affordable Senior Housing

Presented by: Tyler Downs Principal Wazee Partners, LLC

December 9th, 2015

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Why Seniors Housing in Wheat Ridge?

1) High Demand / Senior Concentration

Wheat Ridge 65+ population: 18.6% of total;

Colorado 65+ population at 10.9% of total;

70.6% more seniors concentrated in Wheat Ridge than Colorado state average;

2) Limited New Supply

Newest apartment community in Wheat Ridge – built in 1991 (at the time almost 20 years

since new apartment construction)

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Projects with services (AL, MC, SNF & some IL) are needs based and new construction focuses on the top 5%-10% of the income demographic

o What about the other 90%?

Discussion limited to senior apartments only

o Market rate and affordable

Earlier manifestation in Wheat Ridge of a broader trend.

o Big demand for market rate and affordable senior housing

o Major cities and suburbs will feel it

• Suburbs not as well equipped

Demand & Supply Dynamic

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Most proposed urban and suburban in-fill senior multifamily projects will encounter these two key challenges:

1) Rents vs Development Costs

Vertical Construction (the building itself)

Infrastructure (streets, utilities, traffic signals, drainage)

Land Price

2) Availability of Sites

Proper Zoning and Density

Size (big enough to handle 60+ units)

Key Challenges

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Low Rents relative to New Construction Costs (in 2011)

Market Rate Rents (with utilities included)

$935 for a 1 BR

$1,229 for a 2 BR

New Construction Rents Needed (with utilities included)

$1,250 for a 1 BR

$1,500 for a 2 BR

Conclusion: market rents were $270 - $330 (or 28%) below threshold for new construction.

Key Challenge #1

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Key Challenge #2

Lack of a 2+ Acre Site with Proper Zoning

Need 50+ units to efficiently operate multifamily

3 Story Garden Style Walkup is 28 units per acre

4 Story Elevator with Surface Parking is 32+ units per acre

Wheat Ridge has citywide height and density restrictions

No more than 21 units per ace and 3 stories in height

Total lack of assembled, properly zoned sites over two acres

Conclusion: Total lack of assembled, properly zoned sites over two acres – especially magnified by lack of infrastructure to serve the site.

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1) Rents

Subsidized Affordable Housing (Tax Credit) Project with Restricted Rents

Highest restricted rents are 10% below market rate rents.

o $855 for a 1 BR

o $1,026 for a 2 BR

Highly competitive LIHTC allocation process (unpredictable)

2) Vertical Construction Costs

Sale of tax credits provides a significant cost subsidy

3) Infrastructure & Land Costs

Significant infrastructure and land cost subsidy from the Urban Renewal Authority (described in detail by Steve Art)

Solution to Challenge #1 – Rent Vs. Development Costs

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Assembled 8+ acres of blighted ground

Exercised eminent domain to buy out 30+ separate leaseholds

Cleaned environmental contamination (few buyers can step into that liability)

Installed infrastructure to the site:

Storm sewer w/drainage detention & land dedications (big)

Sanitary

Domestic water

Fire Loops

Streets, sidewalks, landscaping, street lights & traffic signal

Provided appropriate, medium density zoning (exempted from City Charter restriction)

Solution to Challenge #2 – the Urban Renewal Authority