HomeMy WebLinkAboutPalm Springs Theatre - Net Benefits Analysis 4.30.25v2Palm Springs Net Benefits Analysis
Federal
Estimated Qualified Rehabiliation Expenditures 33,431,593$
x Tax Credit Percentage 20.00%
Total Credits 6,686,319
x HTC Investor Credit Allocation Percentage 99.00%
HTC Investor Allocation of Credits 6,619,455
x Syndication Rate 0.83
Total HTC Investor Equity from Historic Tax Credits 5,494,148$
Date Percent Amount Closing Costs
Developer Fee -
Foundation Lease
Reserve
Developer Fee - City
Reserve
1st installment Closing / Partnership entry August 1, 2025 25.00% 1,373,537 600,000 773,537
2nd installment Completion of Construction/Receipt and Approval of Draft Cost Certification March 31, 2026 50.00% 2,747,074 1,594,941 1,152,133
3rd installment Receipt of NPS Part 3 Approval, K-1s, Audited FS July 31, 2026 25.00% 1,373,537 1,373,537
5,494,148$ 600,000$ 2,368,478$ 2,525,670$
Estimated Amounts Paid After Construction
Master Tenant Amounts
Less: Combined Audited FS for Master Tenant ($15,000 yr 1 & $12,500/yr for 5 yrs)(77,500)
Less: 1.5% Priority Return (Through HTC Recapture Period) (412,061)
Less: Residual Cash Flow for Target Return (0.5% of Federal HTC Equity Through HTC Recapture Period)(137,354)
Less: Asset Management Fee (Through HTC Recapture Period - $10,000/yr for 6 yrs)(60,000)
Less: Master Tenant Tax Fees ($10,000 yr 1 & $5,000/yr for 5 yrs) (35,000)
Less: 3rd Party Bookkeeping (75,000)
Total Master Tenant Amounts (796,915)
Landlord Amounts
Less: Combined Audited FS for Landlord ($15,000 yr 1 & $12,500/yr for 5 yrs) (77,500)
Less: Landlord Tax Fees ($10,000 yr 1 & $5,000/yr for 5 yrs) (35,000)
Less: RE Taxes During Compliance Plus Six Additional Months (728,311)
Less: 3rd Party Bookkeeping (75,000)
Total Landlord Amounts (915,811)
Total Master Tenant and Landlord Amounts (1,712,726)
Net Proceeds at City used for Put Payment (274,707)
Less: Estimate Unwind Transaction Costs and Placeholder for C-Corp Unwind Tax Due (50,000)
Less: Blocker Corp Tax Returns ($3,000/yr for 6 yrs) (18,000)
Net Proceeds to Fund Excess Reserves at City for Property Insurance/Utilities/Replacement Reserves and to be Held by City 655,752
Excess City Funds to be Used at Discretion 2,182,963
Total Estimated Federal HTC Net Benefit 2,838,715$
Notes/Assumptions
1) Project sponsor is responsible for all transaction and legal costs at closing.
2) Project sponsor will need to provide certain tax credit recapture guarantees
3) Amounts included above are subject to negotiation with Investors
4) Subject to full financial modeling and structuring to address compliance and tax issues
5) C-Corp Uwind Tax Due will be based on calculation of C-Corp including independent 3rd party appraisal. No representation is made as to value or tax due at dissolution of the Blocker-Corp.
6) 3rd Party Accounting Fees is for operating activity for 2025-2030
Description
HTC Equity Breakdown
PALM SPRINGS THEATRE
SUPPLEMENTAL SCHEDULE OF FORECASTED PROJECT BENEFIT WITH NTCIC TERMS
Palm Springs Theatre - Forecast 4.30.25v2
Benefit Analysis
Preliminary Draft - No Assurance Provided
For discussion only - subject to adjustments and/or revisions Page 43