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RES 2023-0603 - 7101 Mercy TIF Project Plan RESOLUTION NO.2_0z -DI,P 03 City Clerk Office Use Only: Publication Date (if pplicable): Agenda Date: //pp � 2.)2� Department: it 2 ?(/. Submitter: i1Y)J& ' PIL%�� CITY OF OMAHA LEGISLATIVE CHAMBER Omaha, Nebraska RESOLVED BY THE CITY COUNCIL OF THE CITY OF OMAHA: WHEREAS, the primary objectives of the City of Omaha's Master Plan and Community Development Program are to encourage additional private investment and infill development within inner-city neighborhoods; and to eliminate conditions which are detrimental to public health, safety and welfare, by developing vacant or underutilized property within these neighborhoods; and, WHEREAS, the approximately 3.15 acre redevelopment project site located at 7101 Mercy Road, legally described in Exhibit "A", which is attached hereto and incorporated herein by this reference, is within a designated community redevelopment area, as the area meets the definition of blight and substandard per the Community Development Law and is in need of redevelopment; and, WHEREAS, Section 18-2108 of the Nebraska Revised Statutes requires the City of Omaha to adopt a redevelopment plan before taking an active part in a redevelopment project; including the division of ad valorem taxes for a period not to exceed fifteen (15) years under Sections 18-2147 through 18-2150, Revised Statutes of Nebraska; and, WHEREAS, the 7101 Mercy Tax Increment Financing (TIF) Redevelopment Project Plan ("Plan") for the redevelopment project site proposes the demolition of an existing office building and construction of a new four story apartment building. A new five story parking structure will also be built on the site, with a bridge connecting it to the apartment building on the third floor, as described in Exhibit "B", attached hereto and herein incorporated by reference, with the use of TIF as authorized by Section 18-2147 of the Nebraska Revised Statues; and, WHEREAS, the Plan conforms to the City of Omaha's Master Plan and the legislative declarations and determinations of the Community Development Law, as the redevelopment project would not be economically feasible and would not occur at the redevelopment project site without the use of TIF; and, WHEREAS, the costs and benefits of the redevelopment project, including their impact on other political subdivisions, have been analyzed and found to be in the long-term best interest of the community and the local economy, and the redevelopment project will satisfy an identified demand for the public and private services it will provide; and, WHEREAS, the Plan for the redevelopment project site was approved by the TIF Committee and subsequently by the City of Omaha Planning Board at the May 3, 2023 meeting; and, RESOLUTION NO. 23 0 NI D3 WHEREAS, this Resolution seeks approval of the 7101 Mercy Tax Increment Financing (TIF) Redevelopment Project Plan and authorizes the City's participation through the allocation of TIF in an amount up to $6,549,341.00, which includes capitalized interest, to offset TIF eligible expenses, including, but not limited to acquisition, demolition, materials used for increased exterior aesthetic design appeal, architectural and engineering costs, and public improvements as required, for a project with total estimated costs of$ 49,987,177.00; and, WHEREAS, the Plan presents a project based on estimated figures and projections that are subject to change as project costs are finalized, and is required to comply with all Planning Department requirements and Planning Board recommendations. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF OMAHA: THAT, the attached 7101 Mercy Tax Increment Financing (TIF) Redevelopment Project Plan, for the redevelopment project site located at 7101 Mercy Road, which proposes an older office building will be demolished and a new four story apartment building will be constructed. A new five story parking structure will also be built on the site, with a bridge connecting it to the apartment building on the third floor, and authorizes the City's participation through the allocation of TIF in an amount up to $6,549,341.00, which includes capitalized interest, to offset TIF eligible expenses including, but not limited to acquisition, demolition, materials used for increased exterior aesthetic design appeal, architectural and engineering costs, and public improvements as required, containing a provision for the division of ad valorem taxes as authorized by Section 18-2147 through 18-2150, Revised Statutes of Nebraska, as analyzed and determined to be in conformance with the Community Development Law and as recommended by the City Planning Department, be and hereby is approved. 3383 nsp APPROVED AS TO FORM: vr' /.//Z u Z3 AS< NT ITYTORNE DATE Adopted: J U N 2 7 2023 Lo Attest: City Cle Approved: ,k/1h b t/A—L Mayor EXHIBIT "A►► Legal Description,Alta Survey,Topographical Survey, etc.-see following page(s) 7101 Mercy Project Address: 7101 Mercy Rd. Omaha, NE 68106 Project Legal Description: LOT 2, MID AMERICA PLAZA REPLAT 1 EXHIBIT "B" 7101 MERCY TIF REDEVELOPMENT PROJECT PLAN 7101 MERCY ROAD May 2023 4 ONIAHA,NF f n t` 92- ��FE130' PLANNING•OMAHA Jean Stothert, Mayor City of Omaha David Fanslau, Director Planning Department Omaha/Douglas Civic Center 1819 Farnam Street, Ste. 1111 Omaha, Nebraska 68183 Omaha CPlanningity of.OmahaBoard Planning Department NBA Memo PLANNING To: Chairman and Members of the Planning Board From: David K. Fanslau Planning Director Date: April 26, 2023 Subject: APPROVAL OF THE 7101 MERCY TIF REDEVELOPMENT PROJECT PLAN 7101 Mercy Road Case #C3-23-100 PROJECT DESCRIPTION: Proposal The 3.15 acre project site is occupied by an older office building of about 48,000 square feet. It will be demolished and a new four story apartment building will be constructed. There will be 200 market rate apartment units with amenities such as a clubhouse, an interior courtyard with a pool and outdoor patio seating. A new five story parking structure will also be built on the site, with a bridge connecting it to the apartment building on the third floor. Parking The project will have a total of 296 parking stalls. There will be 279 on-site stalls located inside the building and 17 on a surface parking lot. Employment The project is expected to create ten full time positions and about 250 construction related jobs. Residential Unit Information Unit Type #Units SF Rent/Mo. One Bedroom (small) 29 488 $1,000 One Bedroom (large) 112 728 $1,486 Two Bedroom 51 1143 $2,139 Three Bedroom 8 1210 $2,400 TOTAL 200 The developer is 7101 Mercy Holdings, LLC, managed by Jack Schrager. The applicant anticipates construction beginning about in March, 2024, with an estimated project completion date around September, 2025. ANALYSIS: The project site is located within a Community Redevelopment Area, meets the requirements of Nebraska Community Development Law and qualifies for the submission of an application for the utilization of Tax Increment Financing to cover costs associated with project development as submitted for approval through the Tax Increment Financing process. Ultimately, this project plan DS will enhance the tax base for various taxing jurisdictions within Omaha and the state. The project would not be feasible without the assistance of the TIF Program. The project is consistent with several goals and objectives in the Concept Element of the Master Plan (pp. 18-19) including providing high quality housing options in a "mix of patterns, types, and styles" and promoting "healthy and diverse neighborhoods throughout the city" by reversing "deterioration in older areas of the central city." The Concept Elements (p. 24) states that "The City will require that proposed projects be considered within the context of their surroundings and that they be consistent with an overall design concept that considers the interrelationship of buildings, parking, open space, pedestrian movement and existing site features" and the Environment Element recommends that bicycle parking be provided "in large projects and projects in locations that are likely to experience substantial future bicycle traffic." Based on the close proximity of this project to the Keystone Trail, the Aksarben Transit Center, Aksarben Village, College of St. Marys, CHI Health Creighton University Medical Center— Bergan Mercy, and UNO, it is strongly recommended that the project take steps to accommodate pedestrian and bicycle access to and from these key destinations, including: • Provide a secondary building entrance and connection to the sidewalk at the northeast corner of the site along Mercy Rd to allow residents more direct access to walk or bike to Aksarben Village, the Keystone Trail, and the Aksarben Transit Center. • Provide a secure indoor bicycle parking area for tenants. No Building Permit will be issued based on a site plan that does not comply with the provisions of the Zoning Ordinance. RECOMMENDATION: Approval. ATTACHMENTS: General Vicinity Map Project Plan Case Number: C3-23-100 Page 2 DS DCGis 7101 Mercy Apts TIF Redevelopment Project Plan -- _-- Ely �t Legend 2 �, ,, - - :s .+,ces<,c '! Planning Viewer Reference VI s City Limits . „„__ 1 IP :41"':, • . P : . , , —1E, - le g `` 1 lt,, ,, , ... ill i -1 7 7,,...,_ ,. ..� 1 k ' i.,.r =v► ligheikt - R� 1 - .C. e n -74 4i. r -fi: N a#R �� k. gy J I .,i. � s x' �:;; ti . .„, ...„ ' ;' Gem S. ' M a sti,e ? 4 - as Sy lAi•..: t C°.e n,t e r ._d . YY C J a 4 L. ar x This map is a user generated static output from an Internet mapping site and is 0 500 1000 ft for reference only Data on this map may or may not be accurate,current,or Printed from dogis.org: otherwise reliable.It is for informational purposes only,and may not be 03/14/2023 10:46:08 suitable for legal,engineering,or surveying purposes.Do NOT use property Please contact Douglas County GIS for map questions(gis@douglascounty-ne.gov) lines from this website for plan submissions. INTER-OFFICE COMMUNICATION Date: April 12, 2023 To: TIF Committee: David Fanslau, Stephen Curtiss, AL Herink, Jennifer Taylor, Robert Stubbe, Bridget Hadley, Austin Rowser, Jacquelyn Morrison, Steve Jensen From: Don Seten - City Planning Applicant: City of Omaha Planning Department Project Name: 7101 Mercy TIF Redevelopment Project Plan Location: 7101 Mercy Road Request: The TIF request is for up to $6,246,574 plus capitalized interest at an estimated interest rate of 5.45 percent. TIF Fee Schedule: The $500 application fee has been paid and the processing fee of$3,000 will be collected. $42,500 in administrative fees will also be collected. Total fees will be $46,000. Other City Incentives: EEA— Will not be used. PACE —Will not be used. Extremely Blight Discussion: The project is not located in an Extremely Blighted Area (EBA). Urban Core Plan Discussion: The project is not located in the Urban Core Housing and Mobility Plan Area. TIF Justification: The project site is located within a Community Redevelopment Area, meets the requirements of Nebraska Community Development Law and qualifies for the submission of an application for the utilization of Tax Increment Financing to cover costs associated with project development as submitted for approval through the Tax Increment Financing process. Ultimately, this project plan will enhance the tax base for various taxing jurisdictions within Omaha and the state. The project would not be feasible without the assistance of the TIF Program. The project is consistent with several goals and objectives in the Concept Element of the Master Plan (pp. 18-19) including providing high quality housing options in a "mix of patterns, types, and styles" and promoting "healthy and diverse neighborhoods throughout the city" by reversing "deterioration in older areas of the central city." The Concept Elements (p. 24) states that "The City will require that proposed projects be considered within the context of their surroundings and that they be consistent with an overall design concept that considers the interrelationship of buildings, parking, open space, pedestrian movement and existing site features" and the Environment Element recommends that bicycle parking be provided "in large projects and projects in locations that are likely to experience substantial future bicycle traffic." Based on the close proximity of this project to the Keystone Trail, the Aksarben Transit Center, Aksarben Village, College of St. Marys, CHI Health Creighton University Medical Center— Bergan Mercy, and UNO, it is strongly recommended that the project take steps to accommodate pedestrian and bicycle access to and from these key destinations, including: • Provide a secondary building entrance and connection to the sidewalk at the northeast corner of the site along Mercy Rd to allow residents more direct access to walk or bike to Aksarben Village, the Keystone Trail, and the Aksarben Transit Center. • Provide a secure indoor bicycle parking area for tenants. ROI Statement The City of Omaha considers a project's ROI as part of the TIF review, but has not established a specific, numeric ROI threshold. The large number of variables involved in TIF projects would make any such threshold arbitrary, and potentially inequitable. The project variables include the project type, the geographic location, the project's market demand and competition, as well as the financial strength, positioning, and experience of the project developer. The ROI of a redevelopment project is based on the risk/reward that the applicant is willing to accept to fulfill redevelopment goals of the City of Omaha. Developers each have their own breakpoint for determining an acceptable level of ROI, and the amount of acceptable risk for a given estimated reward for any specific developer may change due to consideration of the many of the variables previously mentioned. As a result, the ROI an applicant projects will vary across projects. The ROls stated within this TIF application, for three years after stabilization, are as follows: ROI With TIF 7.75% ROI Without TIF 4.52% TIF eligible costs include acquisition, demolition, materials used for increased exterior aesthetic design appeal, architectural and engineering costs and public improvements. TIF eligible costs total approximately $6,415,239. The total estimated project costs are $49,987,177. TIF Eligible Expenses Amount Site Acquisition $ 3,036,739 Demolition $ 1,300,000 Façade Improvements Exceeding Code $ 175,000 Public Improvements & Utilities in ROW $ 335,000 Architecture and Engineering $ 1,520,000 Appraisals $ 2,500 Subtotal $ 6,369,239 TIF Fees $ 46,000 Total TIF Eligible Expenses $ 6,415,239 The TIF is 12.5 percent of the total project financing. Recommendation: Approval of the $6,246,574 TIF request, plus capitalized interest, with TIF revenues sufficient to pay off a maximum principal loan of $6,549,341. Using the levy rate of 2.24121 percent and other assumptions of the TIF calculation spreadsheets, the TIF request is supported over a 15 year term using estimated cost and estimated market approaches. Project Description Proposal The 3.15 acre project site is occupied by an older office building of about 48,000 square feet. It will be demolished and a new four story apartment building will be constructed. There will be 200 market rate apartment units with amenities such as a clubhouse, an interior courtyard with a pool and outdoor patio seating. A new five story parking structure will also be built on the site, with a bridge connecting it to the apartment building on the third floor. Parking The project will have a total of 296 parking stalls. There will be 279 on-site stalls located inside the building and 17 on a surface parking lot. Employment The project is expected to create ten full time positions and about 250 construction related jobs. Residential Unit Information Unit Type #Units SF Rent/Mo. One Bedroom (small) 29 488 $1,000 One Bedroom (large) 112 728 $1,486 Two Bedroom 51 1143 $2,139 Three Bedroom 8 1210 $2,400 TOTAL 200 The developer is 7101 Mercy Holdings, LLC, managed by Jack Schrager. The applicant anticipates construction beginning about in March, 2024, with an estimated project completion date around September, 2025. Project Finance Summary - Sources & Uses Sources of Funds Amount Owner Equity $ 8,749,579 Construction Loan $ 34,991,024 TIF Loan $ 6,246,574 Total Sources of Funds $ 49,987,177 Uses of Funds Amount Acquisition $ 3,036,739 Construction Hard Costs $ 38,837,143 Construction Soft Costs $ 8,113,295 Total Uses of Funds $ 49,987,177 Final Valuation Discussion The applicant estimates a total final valuation of approximately $35,000,000, which represents an average per unit valuation of $175,000 which the applicant states is in line with comparable properties. The $35,000,000 valuation equates to a 7.25 percent capitalization rate under an income approach to valuation Land Use and Zoning The site is zoned GO—General Office District with the MC — Major Commercial Corridor Overlay District. The applicants are proposing to rezone the site to R8 — High Density Multifamily Residential District with an MCC overlay. Utilities and Public Improvements Standard utilities (electrical, water, sewer) exist at the site. The project will provide landscaping, utilities, and new sidewalks in adjacent public rights of way. Public Improvements in the ROW Amount Landscaping $ 55,000 Sidewalks $ 15,000 Storm Sewers $ 115,000 Utilities in the ROW $ 150,000 Total $ 335,000* *There may be some additional public improvement costs required related to any additional Mercy Road street improvements that may be required to enhance the multimodal functions of that right of way. Transportation The City has concept plans for enhancing the multimodal functions of Mercy Road. The project design and the design of its public improvements in the Mercy Road right of way will be required to assist in achieving the goals of multimodal connectivity. The project also needs to provide better bicycle and pedestrian access to Mercy Road from the building at the northeast end of the site. Historical Status The property does not contain any historic structures and is not located in nor near a historic district. ATTACHMENTS: TIF Calculation Spreadsheet TIF Application Applican 7101 Mercy PRO FORMA Debt Service Payments Year Total Less Pm- TIF Treasurer's Revenues (Semi- Taxable Development Taxable Tax Tax 1%Collection Available Interest at Loan Capitalized Interest at Annual) Valuation Base Valuation Levy Revenues Fee For TIF Loan Principal 5.45% Total Balance Interest 5.45% 0 $5,882,139 0.5 $ - $0 $ - 2.24121 $ - $ - $ - $0 $0 $0 $6,042,280 160141 160141 1 $ - $0 $ - 2.24121 $ - $ - $ - $0 $0 $0 $6,206,781 164501 164501 1.5 $ - $0 $ - 2.24121 $ - $ - $ - $0 $0 $0 $6,375,761 168980 168980 2 $ - $0 $ - 2.24121 $ - $ - $ - $0 $0 $0 $6,549,341 173580 173580 2.5 $ 35,000,000 $3,022,500 $ 31,977,500 2.24121 $ 358,341 $ 3,583 $ 354,758 $176,452 $178,306 $354,758 $6,372,889 0 178306 3 $ 35,000,000 $3,022,500 $ 31,977,500 2.24121 $ 358,341 $ 3,583 $ 354,758 $181,256 $173,502 $354,758 $6,191,633 0 173502 3.5 $ 35,000,000 $3,022,500 $ 31,977,500 2.24121 $ 358,341 $ 3,583 $ 354,758 $186,191 $168,567 $354,758 $6,005,442 0 168567 4 $ 35,000,000 $3,022,500 $ 31,977,500 2.24121 $ 358,341 $ 3,583 $ 354,758 $191,260 $163,498 $354,758 $5,814,182 0 163498 4.5 $ 35,000,000 $3,022,500 $ 31,977,500 2.24121 $ 358,341 $ 3,583 $ 354,758 $196,467 $158,291 $354,758 $5,617,715 0 158291 5 $ 35,000,000 $3,022,500 $ 31,977,500 2.24121 $ 358,341 $ 3,583 $ 354,758 $201,816 $152,942 $354,758 $5,415,899 0 152942 5.5 $ 35,000,000 $3,022,500 $ 31,977,500 2.24121 $ 358,341 $ 3,583 $ 354,758 $207,310 $147,448 $354,758 $5,208,589 0 147448 6 $ 35,000,000 $3,022,500 $ 31,977,500 2.24121 $ 358,341 $ 3,583 $ 354,758 $212,954 $141,804 $354,758 $4,995,635 0 141804 6.5 $ 35,000,000 $3,022,500 $ 31,977,500 2.24121 $ 358,341 $ 3,583 $ 354,758 $218,752 $136,006 $354,758 $4,776,883 0 136006 7 $ 35,000,000 $3,022,500 $ 31,977,500 2.24121 $ 358,341 $ 3,583 $ 354,758 $224,707 $130,051 $354,758 $4,552,176 0 130051 7.5 $ 35,000,000 $3,022,500 $ 31,977,500 2.24121 $ 358,341 $ 3,583 $ 354,758 $230,825 $123,933 $354,758 $4,321,351 0 123933 8 $ 35,000,000 $3,022,500 $ 31,977,500 2.24121 $ 358,341 $ 3,583 $ 354,758 $237,109 $117,649 $354,758 $4,084,242 0 117649 8.5 $ 35,000,000 $3,022,500 $ 31,977,500 2.24121 $ 358,341 $ 3,583 $ 354,758 $243,565 $111,193 $354,758 $3,840,677 0 111193 9 $ 35,000,000 $3,022,500 $ 31,977,500 2.24121 $ 358,341 $ 3,583 $ 354,758 $250,196 $104,562 $354,758 $3,590,481 0 104562 9.5 $ 35,000,000 $3,022,500 $ 31,977,500 2.24121 $ 358,341 $ 3,583 $ 354,758 $257,007 $97,751 $354,758 $3,333,474 0 97751 10 $ 35,000,000 $3,022,500 $ 31,977,500 2.24121 $ 358,341 $ 3,583 $ 354,758 $264,004 $90,754 $354,758 $3,069,470 0 90754 10.5 $ 35,000,000 $3,022,500 $ 31,977,500 2.24121 $ 358,341 $ 3,583 $ 354,758 $271,192 $83,566 $354,758 $2,798,278 0 83566 11 $ 35,000,000 $3,022,500 $ 31,977,500 2.24121 $ 358,341 $ 3,583 $ 354,758 $278,575 $76,183 $354,758 $2,519,703 0 76183 11.5 $ 35,000,000 $3,022,500 $ 31,977,500 2.24121 $ 358,341 $ 3,583 $ 354,758 $286,159 $68,599 $354,758 $2,233,544 0 68599 12 $ 35,000,000 $3,022,500 $ 31,977,500 2.24121 $ 358,341 $ 3,583 $ 354,758 $293,950 $60,808 $354,758 $1,939,594 0 60808 12.5 $ 35,000,000 $3,022,500 $ 31,977,500 2.24121 $ 358,341 $ 3,583 $ 354,758 $301,953 $52,805 $354,758 $1,637,641 0 52805 13 $ 35,000,000 $3,022,500 $ 31,977,500 2.24121 $ 358,341 $ 3,583 $ 354,758 $310,173 $44,585 $354,758 $1,327,468 0 44585 13.5 $ 35,000,000 $3,022,500 $ 31,977,500 2.24121 $ 358,341 $ 3,583 $ 354,758 $318,618 $36,140 $354,758 $1,008,850 0 36140 14 $ 35,000,000 $3,022,500 $ 31,977,500 2.24121 $ 358,341 $ 3,583 $ 354,758 $327,292 $27,466 $354,758 $681,558 0 27466 14.5 $ 35,000,000 $3,022,500 $ 31,977,500 2.24121 $ 358,341 $ 3,583 $ 354,758 $336,203 $18,555 $354,758 $345,355 0 18555 15 $ 35,000,000 $3,022,500 $ 31,977,500 2.24121 $ 358,341 $ 3,583 $ 354,758 $345,356 $9,402 $354,758 $0 0 9402 $9,316,866 $93,158 $9,223,708 $6,549,342 $2,674,366 $9,223,708 $667,202 (F9=calculate) NOTE:This information is provided to assist in analyzing the Original Loan Amount $5,882,139 specific request to the TIF committee. This information is subject Capitalized Interest $667,202 ASSUMPTIONS: to change based on actual tax assessments,including the levy rate. Loan Balance Remaining $0 1 Pm-Development Base $3,022,500 This schedule is based on the assumptions on the right side of the 2 Loan Amount $5,882,139 this spreadsheet. $6,549,341 MAXIMUM PRINCIPAL NOTE 3 Interest Rate 5.45% 10 yr T-note+2% The actual TIF amount available to fund site specific project cost 4 Est.Total Project Cost $49,987,177 could change based on the cost of public improvements. 5 Est.Final Valuation $35,000,000 6 Incremental Base Value $31,977,500 Estimated Annual Incremental Tax Payment $ 709,516 Other Info: TIF Loan Request $6,246,574 •• TIF Percentage of: -Est Final Valuation 17.85% -Est.Total Project Investment 12.50% Leverage Factor 8.00 * •Est.Total Project Investment also represents the total Costs/Uses from the Sources and Uses table,which equates to the total Sources for the project. The leverage factor indicates for every$1 of TIF,the City leverages'x"dollars of other funding. **Plus capitalized interest U- hh\al . . CITY OF OMAHA ■ ■ IIII TAX INCREMENT FINANCING (TIF) II ■ APPLICATION III WA L9111 I omaha ■1.1 ■ Eia'ai CITY PLANNING ■ Rimi - I. ■III 111■ MI I I. :IuI: Inn ■11: IIIE- III. UM 111 ■I == 11111 r Q 11A, N _ v78 ' '. .. ■ 1 a�. h'¢ 4 -fJ, il El l L 1 V -ih--icgllkr pirozmur j 1Ti f..- ,}r4 ,: lift ��u-IIIII ..:b n0 '5r'*. a �1 ■R 11115 1 MN Ell O+p '" 4~ /N '1I• IN I� I I �r44D FEB' ' III■ IUIUP Ill MN ■ INN Edit ■ RE MI 1111drr. � ;■111_ e um Ili: Ell 1111111 E■ il iE NE SE El i :■ :ii 2= EC HE ■ sue. • ■mi N. Lim 11= _ •-1■ City of Omaha Planning Department 11819 Farnam Street,Suite 1100 I Omaha NE 68183-1100 1402-444-5150 Planninghcd.cityofomaha.org/tif TIF Application Checklist Part 1 of the TIF Application Non-Confidential Section ✓ Project Summary Page ✓ Project Development Team Page ✓ Project Narrative Sections: A. Existing Land Use and Conditions B. Proposed Use and Project Details C. Parking Plan D. Market Demand E. Residential Information F. Employment Information G. Zoning Changes H. Public Improvements; Also any traffic concerns I. Historical Status, if applicable ✓ Development Financing Plan—(Attach bank commitment letters in Part II of the TIF application) ✓ Estimation and Justification of Final Valuation ✓ Construction Budget, with itemized Public Improvements Costs ✓ Development Schedule or Timeline ✓ Three-Year Pro Forma— profit/loss and cash flow statements ✓ Statement of Need - ROI analysis With and Without TIF ✓ Evaluation Criteria: Mandatory Criteria (See and use the Program Criteria of the TIF Guidelines) ✓ Cost— Benefit Analysis (See and use Appendix Five of the TIF Guidelines) ✓ Site Plan(s) and Elevations ✓ Alta Survey and Legal Description ✓ Historic Designation Documentation, if applicable ✓ Any Other Supplemental Documentation 2 I Page planninghcd.cityofomaha.org(of Part 2 of the TIF Application Confidential Section ✓ Preliminary Commitment Letter(s), particularly for Construction and TIF Financing ✓ Documentation of Ownership or Site Control — Examples: copy of Purchase Contract, copy of Warranty Deed, or copy of Douglas County Property Records from website ✓ Organization Documentation — For Corporation, LLC, Sole Proprietorship or Partnership ✓ Audited Financial Statement of the Corporation, Partnership, or LLC for the most recent full calendar year; Or compilation or accountant prepared financial statements ✓ Reports and Studies, if applicable, only one hard-copy set of the final complete report(s) and/or study(s) needs to be provided A. Appraisal, after rehab B. Market Study C. Feasibility Study D. Environmental Study E. Traffic Study Note: The executive summary page(s) may be included with the TIF Redevelopment Project Plan that is shared with the public. 3 I Page planninghcd.cityofomaha.org(of Summary Project Name: 7101 Mercy Project Legal Description: LT 2 3.152 AC Proposed Project Size: Project Address: 7101 MERCY RD Gross Sq. Ft. (Building(s))202,879.00 Net Sq. Ft. (Building(s)) 0.00 Property Owner: 7101 MERCY HOLDINGS LLC #of Acre(s) 3.00 Lot/Parcel Size(Sq Ft.) 137,269.00 Owner Address: CIO COLLIERS OMAHA, NE 68154 Project Owner: LIHTC Project: No Estimated Total Project Cost: $49,987,177 Market-Rate Project: Yes Requested TIF Loan: $6,246,574 Historic Tax Credit Project: No New Construction: Yes Rehabilitation: No Current Use: Proposed Use: Zoning -Current/Proposed: Current zoning of the parcel is General Office with an MCC overlay. The Developer proposes to change zoning to R8. The proposed development complies with future zoning and City Master Plan. Current Annual Real Estate Taxes(Year) : 2023 Land: $808,100 Current Assessed Tax Valuation (Year) : 2023 Improvements: $2,214,400 Total: $3,022,500 Are Real Estate Taxes Current?Yes Requested Base Year: 2024 Requested Division Year: 2025 Does the applicant entity or do the members comprising the applicant entity have any delinquent taxes Due and owing? No Is the project within an extremely blighted area? No 4 Page planninghcd.cityofomaha.org/tif Project Development Team Page Engineering Firm Lucas Weatherly Olsson 2121 S. 67th Street Omaha NE 68106 4029382442 Founded in 1956, Olsson is a nationally recognized, employee-owned engineering and design firm headquartered in Nebraska with nine Nebraska offices and headquartered in Lincoln. Olsson has more than 1,700 resources firmwide including 285 in Omaha. Olsson has been ranked in Engineering News-Record's national list of top 100 design firms every year since 2018. Their core services include planning and design, engineering, field, environmental, and technology services for variety of markets. Over the last five years, Olsson has performed professional services on more than 1,200 projects in the Omaha community. Our services range from planning and design, engineering, and landscape architecture, to a wide range of field services involving public and private clients. Olsson is well connected with the City of Omaha, Omaha Public Works, and Omaha Planning Department to name a few. Olsson has roots in the Aksarben community as our main office in Omaha has been located there since 2009. It's great to be part of a thriving area of town where one can truly eat, work, and play. Number of total staff: 1,765 Number of Nebraska staff: 806 Number of Omaha, Nebraska staff: 285 Legal Consulting Firm Brent Beller Fullencamp, Jobeun, Johnson & Beller, LLP 11440 W Center Road, Suite C Omaha NE 68144 4023340700 bbeller@fjjblaw.com Fullenkamp Jobeun Johnson &Beller, LLP, is an experienced real estate development firm, which has handled numerous ground up and rehabilitation TIF projects in the City of Omaha, and other municipalities surrounding the City of Omaha. Firm has represented dozens of TIF projects and has successfully helped develop more than $250 million in TIF related projects alone in the last five years alone. 5 I Page planninghcd.cityofomaha.org/tif Construction Company Eric Carlson Carlson Kennedy Construction 14909 Grover Street Omaha NE 68144 4028303696 Carlson Kennedy Construction will provide construction management services for this project. Eric Carlson is the owner of Carlson Kennedy Construction, LLC and has over 25 years of construction management, general contracting, design-build, and commercial development experience. CK has built a wide variety of projects in the single family, multifamily, commercial, civil, and healthcare sectors. CK is based in Omaha, NE and works in the metropolitan area. Some notable projects in our portfolio include: Springhill Ridge Apartments, Chadwick Apartments, LUX 96 Apartments, Multiple NP Dodge Buildings, and many others. Founded in 2012, we have the expertise to make your vision a reality. Every project's success is dependent upon developing and implementing an accurate plan based on real time information. Our development, construction, and operations knowledge make us much more than just a General Contractor. Our combined team experience enables us to provide valuable input to our clients throughout the entire project cycle. The process is so much more than building the buildings. We use our detailed thought process to envision the workflow of your company's processes in the building to make sure it meets your company's efficiency needs. Architecture Firm Graham Hanson BSB Design 4601 Westown Parkway, Suite 208 Des Moines IA 50266 ghanson@BSBDesign.com BSB Design has produced ground-breaking architecture, planning and design since 1966. Following the tradition of our founder, Jack Bloodgood, a pioneer in modern residential architecture and planning, we have helped recreate housing industry standards by focusing on individual market needs, strengths and opportunities. Our clients enjoy excellent service, innovative solutions and unequaled expertise. With 12 offices nationwide, BSB Design specializes in unique residential housing communities in all price ranges throughout the United States and abroad. We have access to nationwide trends and ideas that inspire our design creativity as we develop tools our clients use to build new opportunities in today's competitive marketplace. From architectural design and planning to community identity packages, BSB Design offers a complete line of services to develop any project to its fullest potential. 6 I Page planninghcd.cityofomaha.org/tif Applicant/Owner Jack Schrager 7101 Mercy Holdings, LLC 210 Saint Paul Street Omaha NE 4026812415 7101 Mercy Holdings, LLC, its owners, and related entities have recently begun developing apartments in Omaha. This is our company's second development in Omaha. The first is a 248-unit project currently under construction at 19050 Jackson St. Loge Properties LLC, an affiliate of 7101 Mercy Holdings, LLC, is a real estate development firm focused on multi-family and mixed-use projects in Colorado and Nebraska.We are focused on building high-quality product in strong locations. Our company is well capitalized and we have strong relationships with third- party financing sources. We invest in pro communities and properties for the long-term and, as a result, design and construct quality buildings that fit well in the community and stand the test of time. 7101 Mercy Holdings, LLC, together with a strong team of design and construction partners described below, would design, permit, finance, and construct the proposed apartment project. 7 I Page planninghcd.cityofomaha.orgftif I) Narrative A. Project Land Use Plan Detailed Project Description: Existing Land Use and Conditions of the Redevelopment Site:The site consists of an approximately 48,000 SF office building on a 3.15-acre lot at 71st and Mercy Rd. The existing office building was constructed in 1968 and has become obsolete. The site is near Aksarben Village, Creighton University Medical Center, College of St. Mary, and the University of Nebraska Omaha. Proposed Use and Project Details: The proposed project consists of(i)4-story apartment building and (ii) 5- story parking garage. The project will house 200 residential units; a clubhouse; and an interior courtyard with a pool, outdoor seating, and landscaping. The project will add residential density near employment hubs, universities, and shopping areas and increase walkability in the neighborhood. Parking Plan for Proposed Project: The building features 279 garage parking spaces and 17 surface parking spaces. Market Demand for Proposed Project: Market demand for this project should be robust. The development is near several major employment hubs (CHI Hospital,Aksarben Village office space, College of St. Mary, University of Nebraska Omaha, etc.)and is within walking distance of the retail in Aksarben Village. Only two new housing projects have been developed in this sub-market in the last five years (Broadmoor63 and Centerline Apartments). •A four-story apartment project is in line with competing properties (Broadmoor63, Broadmoor Aksarben, Centerline Apartments, Cue Apartments, etc.)and a freestanding parking garage is more economical to construct than podium parking • Current Class A apartment occupancy in the Aksarben Village submarket is 98%, and the rents are high enough to support new construction (with the benefit of TIF). This level of occupancy suggests there is significant unmet demand for housing in Aksarben Village. 8 I Page planninghcd.cityofomaha.org/tif B. Zoning - Current and Proposed Current zoning of the parcel is General Office with an MCC overlay. The Developer proposes to change zoning to R8.The proposed development complies with future zoning and City Master Plan. C. Public Improvements Public Improvements associated with this redevelopment include new landscaping and sidewalk along Mercy Road and a new storm sewer extending across Mercy Road. D. Historical Status - If Applicable N/A 9 I Page planninghcd.cityofomaha.org/tif Residential Unit Information Multi-Family Total Units: 200 3 Bedroom Rentals = 8 Units 1210sgft Per Unit @ $2400 Per Month 2 Bedroom Rentals = 51 Units 1143sgft Per Unit @ $2139 Per Month 1 Bedroom Rentals = 112 Units 728sqft Per Unit @ $1486 Per Month 1 Bedroom Rentals = 29 Units 488sqft Per Unit @$1000 Per Month Comments: 10 I Page planninghcd.cityofomaha.org/tif Employment Information Employees By Type Total Jobs: 10 Technical =2 Permanent(FTE's) Sales/Marketing =2 Permanent(FTE's) Management=2 Permanent(FTE's) General Labor=2 Permanent(FTE's) Clerk/Service=2 Permanent(FTE's) Non-Construction Number of Jobs Created?(Non-Construction): 10 Number of Jobs Retained? (Non-Construction): 0 Anticipated Annual Payroll? (Non-Construction): $800,000 Contruction Estimated Number of Construction Jobs Created?: 250 Anticipated Annual Payroll for Construction Jobs?: $19,000,000 11 I Page planninghcd.cityofomaha.org/tif II) Funding Information Source of Funds Fund Source Description Source Amount TIF Loan $6,246,574 Construction Loan $34,991,024 Owner Equity $8,749,579, Total $49,987,177 Use of Funds Use of Funds Description Use Amount, Construction Soft Costs $8,113,295 Construction Hard Costs or Rehabilitiation Costs $38,837,143 Land Acquisition $3,036,739 Total $49,987,177 B. Is there or will there be an application requesting Property Assessed Clean Energy(PACE) financing? No C. Are you requesting an Enhanced Employment Area (EEA) Designation and the use of a General Business Occupation Tax? No D. Final Estimated Valuation and Justification -Add a brief discussion regarding what the most probable final valuation will be and the methodology used to establish the final valuation. We expect the final valuation to be approximately$175,000 per residential unit($35,000,000 total). We anticipate 200 residential units: $175,000 per unit x 200 units = $35,000,000 This valuation equates to a—7.25% cap rate, which is in line with what the City of Omaha generally uses to value multi-family properties using the income method.As such, we believe our projected valuation is reasonable. Please see the attached complete form application to view table of like-property comparison valuations. 12 I Page planninghcd.cityofomaha.org/tif III) Construction Budget, Itemized Public Improvement Costs and Project Timeline Itemized Construction Budget Construction Budget Item Description Estimate Building Envelope $3,710,250 Concrete & Masonry $1,879,458 Drywall, Paint, Flooring $3,475,000 FF&E $300,000 General Conditions & Fee $3,070,743 Hard Cost Contingency $1,493,736 MEP & Fire Sprinkler $7,761,107 Parking Garage $6,975,000 Pool $350,000 Public Improvements $185,000 Sitework& Utilities $1,408,450 Architecture, Engineering, City& Tap Fees, Soft Costs General Soft Costs, Financing Fees, Interest& $8,113,295 Operating Loss, Management Fees, Reserves Specialties &Appliances $992,109 Steel, Lumber, Carpentry $7,236,290 Total $46,950,438 Itemized Public Improvements Public Improvement Type Description Amount Landscaping (Within ROW) $55,000 Public Sidewalks $15,000 Storm Sewers $115,000 Total $185,000 TIF Eligible Costs TIF Eligible Costs Item Comments Amount Engineering and Architecture Fees $1,520,000.00 (related to pre-development) Appraisals $2,500.00 TIF Fees $86,825.00 Facade Renovation (Exceeding Code) $175,000.00 Site Utilities(Within ROW)** $150,000.00 Site Demolition $1,300,000.00 Site Acquisition Costs $3,036,739.00 Public Improvements Costs $185,000.00 Total $6,456,064.00 13 Page planninghcd.cityofomaha.org/tif Project Timeline Construction Start Date: 03/01/2024 Start Date Comments: Construction End Date: 08/31/2025 End Date Comments: 14 I Page planninghcd.cityofomaha.org/tif IV) 3 Year Pro-Formas -profit/loss and cash flow statements Revenue Year 1 Year 2 Year 3 Gross Income $4,605,380, $4,884,131 $5,030,655 Effective Gross Income $4,605,380 $4,884,131 $5,030,655 Expenses Year 1 Year 2 Year 3 Gross Operating Expenses $1,985,960 $2,053,613 $2,115,221 Total Expenses $1,985,960 $2,053,613 $2,115,221 Net Operating Income $2,619,420 $2,830,518 $2,915,434 Debt Service Year 1 ; Year 2 Year 3 Debt Service(Perm) $1,837,029 $1,837,029 $1837029 Net Cash Flow $782,391 $993,489 $1,078,405 15 I Page planninghcd.cityofomaha.org/tif V) Statement of Need and ROI Analysis (with and without TIF)—In the Statement of Need section, talk about the challenging conditions of the redevelopment site which require the assistance of TIF. The ROI Analysis is "with" and "without TIF". Statement of Need The total development costs are estimated to be$49,987,177. Without Tax Increment Financing ("TIF'), this project cannot move forward.The TIF request is$6,246,574. The remaining funding sources are construction loan and equity. The Project cannot proceed without the inclusion of the TIF. As demonstrated above, without TIF there would be a very small owner profit, and the Project return would provide a 4.50% return. This makes the project unfeasible without TIF. Because this is an urban in-fill project, the Project will have to comply with various City requirements for design and landscaping. The proposed re-zoning of the property is GO-MCC which requires more stringent standards for design including streetscape, sidewalks, specialty pedestrian lighting, building placement, and building materials.All of these items not only add cost but require additional time to work through. ROI Analysis With TIF Without TIF Owner Equity $8,749,579 $14,996,153 Revenues ? $4,339,487 $4,339,487 Expenses $1,824,608 $1,824,608 NOI $2,514,879 $2,514,879 TIF Rebate $719,905 - NOI +TIF Rebate $3,234,784 TIF Debt Service $719,905 $0 Debt Service $1,837,029 $1837029 NCF $677,850.00 $677,850.00 Return on Owner Investment(ROI) % 7.75% 4.52% 16 Page planninghcd.cityofomaha.org/tif VI) Evaluation Criteria: Mandatory Criteria-A project must meet each of the following criteria; briefly discuss how this project meets each criteria. Include each statement with your response. 1. The project must be located within a community redevelopment area or an area eligible for a designation of community redevelopment area as required and set forth by State Statute. The project must be located within a community redevelopment area prior to the preparation of a Redevelopment Plan, refer to Attachment 1 —Community Redevelopment Area map. Requirements for community redevelopment areas are found in Appendix One and Two. The Project is located within the boundaries of the TIF Community Redevelopment Area. 2. The use of TIF for the project will not result in a loss of pre-existing tax revenues to the City and other taxing jurisdictions. The use of TIF for the Project will not result in a loss of pre-existing tax revenues to the City or to other taxing jurisdictions. The Project is anticipated to increase the tax base of the surrounding area, through a significant increase in the property valuation and additional commerce in the immediately surrounding area. 3. The developer is able to demonstrate that the project would not be economically feasible without the use of TIF. In addition,when the project has site alternatives, the proposal must demonstrate that it would not occur in the area without TIF. Return on investment assists in determining the economic feasibility of the project. As shown in the ROI analysis,this project is not economically feasible without the use of Tax Increment Financing. Commercial redevelopment/urban infill projects within neighborhoods are complex and more expensive to due size restrictions, environmental issues, and compliance with urban design guidelines. What the Applicant is proposing requires a significant investment and redevelopment of the site in order to redevelop the vacant site for multifamily residential property use. TIF financing fills in the gap to make this project feasible by increasing the overall value of the area by replacing a previously outdated commercial office building with a newly constructed residential property that advances the City's Master Plan by increasing density and allows the site to be utilized to its fullest potential. Based upon the projections set forth in the ROI Analysis, it is reasonable to conclude that this development would not occur in this area without TIF. 4. The project must further the objectives of the City's Master Plan.This may include job creation, application/implementation of Urban Design elements of the project and related/adjacent public areas, preservation of historic sites and structures, revitalization of older neighborhood communities, business start-ups, business growth and expansion,and the densification of the urban core. The Project furthers the objectives of the City's Master Plan by: (1) Creating a new opportunity and living experience for residents who are looking for an urban environment in a vibrant part of Omaha, near Aksarben Village and focused on pedestrian foot and bike traffic. (2)Creating sustainability and renewable energy by prioritizing during construction the use of high efficiency mechanical systems and materials where appropriate. (3) Implementing urban design elements while striving to integrate such design to align with the charm of the surrounding neighborhood.The Project encourages active pedestrian traffic around a newly revitalized block. The areas immediately surrounding the Project will be updated with new landscaping, sidewalks and site lighting features,while the new construction of the units themselves will only serve to uplift the existing character of the neighborhood and draw people to it. (4)Taking an obsolete office building and transforming it into beautiful and desirable residential project in a growing near Aksarben Village, all while maintaining the character of the neighborhood and creating a new housing option for those wanting to walk and bike to and from work and/or shops in Aksarben Village. (5) Establishing greater density within an important neighborhood of the midtown community. 17 I Page planninghcd.cityofomaha.org/tif VII) Cost-Benefit Analysis—Respond to each statement; include any quantitative analysis (Community Development Law§18-2113 (2)) 1.Tax shifts resulting from the division of taxes as provided in section 18-2147; The use of TIF will result in a large increase of real estate revenue for Omaha, and no public service needs will be generated as a result of this project. No tax shifts are anticipated. 2. Public infrastructure and community public service needs impacts and local tax impacts arising from the approval of the redevelopment project; The proposed will provide valuable and currently needed public improvements to the immediate area and it will not result an any additional public service needs to impacts to local taxes. 3. Impacts on employers and employees of firms locating or expanding within the boundaries of the area of the redevelopment project; Through the utilization of the TIF incentives the development of the Project will address one of City's Master Plan goals, providing new housing for those living and working in the area. Additionally, as Aksarben Village and surrounding neighborhoods continue their revitalization, there will be increased foot traffic in the many already existing retail spaces and more name recognition for the businesses that are part of the community.The businesses and increased employment opportunities should also lift the wage base of the community, while the significantly increased value of the property will lift the tax revenue generated. 4. Impacts on other employers and employees within the city or village and the immediate area that are located outside of the boundaries of the area of the redevelopment project; The project is targeted to those who wish to live and work in the same area. New residents will invest their energy and capital in the surrounding retail businesses, office jobs, and healthcare positions. The addition of new residents to the area will also drive economic growth provide additional employment opportunities. 5. Impacts on the student populations of school districts within the city or village; and Due to the visibility and location, the proposed units will be designed in a way that directly appeals to those employees who which to work and live in the same area. This aspect is central to the spirit of the project and its goal of creating a more pedestrian-friendly neighborhood. There will be no negative financial impacts on the existing school districts within the City of Omaha, as the number of school aged children residing in the project is expected to be negligible. Living trends show that young professionals are looking for living arrangements that provide a modern and urban appeal in an area where they can both work and play. The proposed apartments expand housing options in the area and creates energy for further redevelopment and growth in this important part of Omaha. 6.Any other impacts determined by the authority to be relevant to the consideration of costs and benefits arising from the redevelopment project N/A 18 I Page planninghcd.cityofomaha.org/tif m= � t i I 5 ,yt>c do r-y r ? /f I I I Y o -.=',':",m K;tit Z.,-.F.-'= - ili ',:-i i 1, ! ,-- ,_ . 7 1-1 ',:)' / e 06 i� '� J co i i+' } , 0 o .; ?� / i Y 9 6 fa i 1 r;, r \ /( ( I tr a o 11I O ' g l' .\ v J n c i m .*! f Q 1J a J W a 2 0 a j a • It �. 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