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PORTFOLIO

REDEVELOPMENT

Overview & Timeline


KHRA has 529 public housing units
2006 $11.9 M HOPE VI award coordinated
with $26M in additional funds completed
in 2010
Majority of KHRA housing requires capital
improvements beyond funding availability
KHRA awarded Choice Neighborhoods
(CN) Planning Grant for Lee
KHRA submitted Midtown Neighborhood
Transformation Plan in 2014

Midtown Neighborhood Target Area

Lee Apartments (128 units)


Public housing
Built in 1941
Targeted due to poor design
and structural deficiencies
Most concentrated and
distressed housing in the
neighborhood
Redevelopment is a key
catalyst for creating a
vibrant neighborhood

Current Status
KHRA awarded portfolio-wide RAD
program for all of its public housing
KHRA & Pennrose not selected for 9%
tax credits for new construction of Lee
KHRA & Pennrose began investigating
alternatives to redevelopment

Redevelopment Activity
Demolish All of Lee Apartments
Build approximately 51 New Units
on Lee Site
Holly Hills
Apts.
Redevelop all of KHRAs
stock
Tiffany Court
including:
Cloud Apartments
Dogwood Terrace
Charlemont Apts

The City of Kingsport will no longer


have public housing

Portfolio Breakdown*
*Riverview Place (38 units) not included

Developments

Current

New/Rehab

Lee

128

51

Cloud

189

189

Holly Hills

84

84

Dogwood

76

76

Tiffany Court

14

14

Charlemont

15

Total

491

429

Type of Unit
RAD Units

184

Project Based Voucher

126

LIHTC

119

TOTAL

429

WHO IS
PENNROSE?

Over 35 Years in Business

Currently Active in 12 States plus the District of Columbia

A Recognized Leader in Complex, Mixed-Finance Urban Development

Employs Staff of 13 Seasoned and Credentialed Developers

Developed Over 14,000 Units in 220 Communities

One of the most prolific HOPE VI developers in the country

3 Core Principles: High-Quality Development, High-Quality


Management & Services, and Long-Term Ownership

Affiliated property manager, Pennrose Management Company, employs 450


MISSION STATEMENT: Pennrose in cooperation
with its partners and key stakeholders
develops high-quality, expertly-managed
residential communities, which provide lasting
enhancements to their neighborhoods and host
municipalities.

Why Pennrose is Uniquely


Qualifi ed

The team develops market rate,


commercial and affordable housing
Pennrose focuses on redeveloping entire
neighborhoods
The Pennrose team worked together on
multiple CHOICE, HOPE VI & MixedFinance projects
Exclusive Approach to Cost Control &
Schedules
A comprehensive team that has the
expertise and experience to accomplish
the vision of the City of Kingsport.

Pennroses net income has grown


each of the past 10 years

Maintain a robust pipeline of new


business; engage in multiple
transactions with long-term partners

Approximately 15 closings per year

Access to an $8 million revolving


credit facility

Pennrose has never defaulted on a


mortgage on one of its properties or
had Tax Credits recaptured

Construction
Completed:
December 2015
Units:
84 Total
42
RAD
LIHTC

$12,900,
000

HOME

$1,800,0
00

FHLB
AHP

$500,000

TOTAL:

$15,200,
000

Sample New Construction

Before

After

Sample Rehab Approach

Economic Impact
TOTAL Economic Impact
51 New Apartments
378 Rehab Apartments
TOTAL Jobs Supported

$21,737,273

$ 9,374,109
$ 12,363,164
199

Sources & Uses


Development Sources
LIHTC Equity
KHRA Take Back Financing (Acquisition)
HA Funds
Deferred DF for Bond
Housing Trust Funds
City - Capital, CDBG or HOME
FHLB
FHA Permanent Loan
Gap
TOTAL SOURCES
Hard Construction Costs:
Residential Construction
Site Work
Contingency
Subtotal Hard Costs
Soft Costs:
Acquisition
Relocation
Demolition
Tax Credit & City Fees
Design & Engineering Costs
Financing Fees
Attorneys
Reserves
Other Soft Costs
Developer Fee
Subtotal Soft Costs
TOTAL PROJECT USES

$17,165,000
$7,896,000
$1,000,000
$3,201,000
$500,000
$0
$779,000
$17,028,000
$3,012,000
$50,581,000
$21,548,000
$1,557,000
$1,999,000
$25,104,000
$7,975,000
$567,000
$1,000,000
$286,000
$1,165,000
$2,368,000
$250,000
$2,597,000
$1,267,000
$8,002,000
$25,477,000
$50,581,000

THANK
YOU

FINANCING EXPERIENCE

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