# Presentation: 665094

## Native American Connections, Inc. (NACI)

- Established in 1972
- Private Non-profit 501 3
- Community - based, volunteer Board of Directors
- Mission
-     Provide holistic comprehensive behavioral health counseling, affordable housing, and other health related services targeting the Native American population.

## Stepping Stone Place

- Opening July 1, 1999
- 3 year Development Project - Aril 1999
- 44 - units, single resident occcupancy
- 20 - units for HIV/AIDS Tenants
- 24 - units for Native Americans with disabilities
- 14th Street and McDowell

## Project Development Checklist

- 1.  Forming the Development Concept
- 2.  Possibility Study (Due Diligence)
- 3.  Dealmaking:  Planning & Financing
- 4.  Project Construction
- 5.  Operation or Sale

## 1 - Development Idea

- What is it
- For whom
- Community Input
- Does it fit mission
- Organizational capacity
- Collaborations needed

## 1 - Concept Development

- Market
- Site & Improvement viability
- Government constraints
- Acquisition constraints - price
- Finance
- Management
- Board action

## 1 - Market

- Who is preferred market
- Alternative markets/uses

## 1 - Site and Improvement Viability

- Location
- Building architecture
- Building structure
- Improvements possible

## 1 - Govt & Acquisition Constraints

- Identify land use and other regs
- Government funding requirements
- Price
- Comparables
- Will it appraise
- Possible budget

## 1 - Management

- Detailed Pre forms
- Construction
- Operating
- Feasability
- Design project mgmt team & system
- Development agreement with development team

## 1 - Development Team

- Collaborators - Owners, operators, service providers, developers
- Project Managers
- Construction Manager
- Architect
- Lawyer
- Funders
- Neighborhood/home owner orgs

## Partnership

- Mercy Housing
- Owner/developer/property manager
- Native American connections, Inc
- Owner/developer/service provider
- Care Direction
- Service Provider for Mercy Housing
- AIDS Hosuing of Washington
- MOA Agreement

## The NACI/Mercy Partnership

- 3 acre site with 3 existing buildings
- resources for acquision & renovaiton required multiple sources of funding
- Both organizations secured financing
- Legal lot split with NACI acquiring 2 building & Mercy 1 target building

## 1 - Board Decision/Actions

- Authorization to proceed
- Commitment of resources
- Commitment of staff time
- Deelegation of authority to ED

## Development Concept Phase

- Goals
- Five Critical Elements
- Specific _**USE**_ of a designated _**SITE**_ for an identified _**MARKET**_ by a specific devclopment _**TEAM**_ with a defined _**FINANCIAL**_ program.

## 1 - Concept Development Deliverables

- Vision statement
- Concept accepted by funders
- Develoment agreement with mgmt team and developer
- Feasibility money - grant
- Board decision
- GO/NO GO/MODIFY

## 2 - Feasibility Study

- Marketing
- Site & site control
- Improvement
- Finance
- Management
- Board action

## 2 - Marketing

- Marketing
- Market test/analysis
- Design market strategy

## 2 - Site - Government constraints

- Fair housing laws
- Zoning, variance
- Use permit for site
- ADHS/Food Serv. Regulatory requirements
- HUD, COP, AHP funding requirements
- Local, state, federal grant requirements

## 2 - Site Control

- Compare alternate sites
- Comparable sales data
- Appraisal price
- Inspect property
- Negotiate with owner/seller
- Purchase agreement

## 2 - Improvements/Site Plan

- Architect develops concept/plan
- Schematics
- Elevation

## 2 - Finance

- Resource plan
- Development Pro forms
- Operating Pro forms - slide
- Grant written
- SHP
- AHP
- HOME
- DEPT. OF COMMERCE

## Pro forma

- Predominantly grant financing
- Required debt - Section 8 Cert. - Phx IDA
- Mechanical, electrical, sewer, roof to defer maintenance - allows for building replacement reserves for future
- Bricks & mortar + operating $ - building operating reserves when supportive service contracts end in 3 years
- Target pop - 50% AMI

## How Managed Care Impacted NACI Development Efforts

- Behavioral health managed care companies requiring contractors to demonstrate financial stability
- Service delivery as basis for development
- Diversificaiton of funding/resources
- Independent annual audits
- Larget defensive intervals
- Operating reserves
- Real estate assets - residential to project sites
- Line of credit with Johnson bank

## Mixed Use Partnership

- Mixed use
- Portfolio’s taking advantage of mixing market rate housing with low, very low/inocmerenters
- partnerhsips with profit developers
- Take advantage of housing rental with small business, ie, laundry, daycare, restuarant
- Generalt revenues for future sustainablity

## Stepping Stone

- SHP/HUD (Federal)
- HOPWA (Fed)
- AZ HTF (State)
- COP - EDA
- MC - IDA
- FHLB - AHP
- CDBG (Local)
- Private

- $700,000
- $200,000
- $100,000+
- $250,000 (debts)
- $  50,000
- $440,000
- $500,000+
- $100,000

## Other Sources of Funding

- Center for Community Change
- Az Republic - Seasons for Sharing
- Arizona Community Foundation
- Band industry
- grants, low interest loans
- Corporate donations
- Stardust Foundation - Habitat for Humaity
- LISC, CSH - Corp for Supportive Housing

## 2 - Management

- Identify development team members
- Set up weekly development team mtgs
- Draft project mgmt plan

## 2 - Board Decision/Action

- Authorize site purchase
- Authorize dept
- Authrize grants undertaken

## 2 - Feasibility Study Phase

- Goal
- Analysis of all assumptions regarding market, site, operating pro forms, development pro forms financial requirements, financing, team, and roles
- Suggested modifications of alternatives for concept to be feaasible

## 2 - Feasibility Study Deliverable

- Agreement w/ potential funder rewuired feasibility & dev. Team sign off
- Feasibility contracted & done
- Site control/design plan
- Grants begun
- Board decision
- GO/NO GO/MODIFY/SELL
- If “go” commit resources for feasibility study and site control

## 3 - Deal:  Plan & Finance Commitment

- Marketing
- Site
- Improvement
- Finance
- Management
- Board action requiredd

## 3 - Site

- Site
- Draft site control
- Regulatory approvals - zoning, etc.
- Survey
- Appraisal
- Environment clearance
- Phase I
- Phase H

## 3 - Improvement

- Architect agreement
- Architect does plans for review
- Architect does specs & working drawings
- Project mgr. Prepares bid pkg.
- Project mgr. Oversees bidding
- Draft agreement with GC selected

## 3-Finance

- GC & team Develop final cost
- Operating cost refined
- All financing committed with awards
- Neg. & dreaft funder contracts

## 3 - Management

- Mgmt - weekly project meetings
- All inclusive team & interested parties
- Minutes/bullets of problems/decisions/action item/persons responsible/ board information or authorizaitons
- Problems that may jeapardize project or materially change - go back to concept development & repeat process

## 3 - Board Action Required

- Ratify board & organizaiton commitment or withdraw form project
- Ratify or change mgmt delegation

## 3 - Deal

- Goal
- All elements of project made definite, Letters of commitment, contrtacts and loan documents ginding all participants to the specific element of the deal

## 3 - Deal Deliverables

- All financial commit/contracts in place
- Working drawings
- Bidding process/contract with GC
- Operating agreemtn/plan with all parties
- Project mgmt intensifies
- Board Decision:  GO/NO/MODIFY/SELL
- At appropriate stages board pass resolutions and delegate staff

## 4 - Construction

- Marketing/operations start up
- Site and improvments
- Financing
- Management
- Board action required

## 4 - Construction

- Marketing/operations start up
- Operating mgmt begins work
- ID tenants
- Intake pipeline, lease-up begins
- SS workd on MOA agreements
- Mercy Housing - Owner/developer/property/Manager
- NACI - Owner/developer/serviceoperator
- Care directions/service operator

## 4 - Site & Improvements

- GC begins work, GC bonding, Insurance
- Draw schedule
- SS 14 sourcenightmore
- Project mgr assures GC reg compliance
- Letter to proceed - construction
- Project mgr reports to weekly team mtg
- Inpsection & Certificate of Occupancy
- Punch list complete

## 4 - Financing

- Inspections by funding source
- Required report to funders
- Some funders have reps on mgmt team

## 4 - Management

- Construction oversight assured
- Funds accounting assured
- Review/approval of draw requests
- Draw requests paid
- Publicity and opening
- Ground breaking/Opening ceremony

## 4 - Board Action

- Approve or delegate authority for changes/rent up/sale

## 4 - Project Construction Deliverables

- Project completely built, leased up, passing all inspections
- Construction by GC
- Owner rep, proj, mgr, GC - weekly mtg
- Lender inspections
- Architect/proj mgr sign off
- Marketing/lease up

## 5 - Operations of Sale

- Marketing/operating management
- Site improvements - complete
- Finance
- close out grant with final report
- final inspection
- Managemnt
- oversite property mgmt
- board action
- any future sale, re-finance, default

## 5 - Operations Deliverables

- Goal
- Effectively rented/sold project, meeting financial & project goals
- Deliverables
- Hand off to owner/operator/service provider
- Competion of lease up
- Financial oversight of operations

## Operations

- July 1, 1999 Stepping Stone opened its doors to homeless individuals earning below 50% AMI - paying no more than 30% of their income