Project Category: Substantial Improvement Property
The proposal presented is to acquire and redevelop approximately 116 acres which includes 978 residential parcels from the City of Detroit. Details of said plan will require the current infrastructure to be upgraded within approximately 93 acres of the 116 acres to present workforce and affordable housing situated on up to 278 lots or homesites. Phase I will require planning, engineering and reconstruction of the infrastructure currently installed in the Chalmers Heights community which would be rebranded as North Jefferson Village @ Chalmers Heights.
The property proposed for acquisition and redevelopment is situated within an urban community which includes functioning, aging infrastructure i.e., water, sanitation and power lines. The new upgraded infra-structure installed in the development proposed will include new public utility lines to each new residence.
The new development will be located less than 3 miles to 5,000+ permanent full-time, salaried and hourly employees assigned to Jefferson North Assembly Plant (JNAP), an automobile manufacturing facility owned and operated by Stellantis (formerly Fiat Chrysler Automobiles).
Project Qualification: Substantial Improvement PropertyReal Estate: ResidentialTotal Capital Required: $22,320,000Equity Required: $8,928,000Debt Required: $13,392,000Project Control: We have agreement on terms to acquire the key propertyTimeline: 90-180 daysAddress: Marlborough Street Detroit Michigan 48215 United StatesFile:
The funding facility of $22.320M is requested to reconcile the costs to acquire for redevelopment 116 acres which includes 978 total residential parcels from the City of Detroit and install new infrastructure within approximately 93 acres of the 116 acres.
Specifically, the proposal is to complete pre-development of 279 lots i.e., planning, engineering and reconstruction of the infrastructure currently installed in the Chalmers Heights community which would be rebranded as North Jefferson Village @ Chalmers Heights.
The topography includes vacant parcels, occupied and several uninhabitable residences.
The 116 acres proposed for redevelopment would be presented as collateral to receive approval for up to Seventy-Five Percent (75% LTV) of the current "As-Improved Value" AIV. The property proposed for acquisition and redevelopment is situated in an urban community which includes functioning, aging infrastructure i.e., water, sanitation and power lines. The new upgraded infra-structure installed in the development will include new public utility lines to each new residence.
The current "As-Improved Value" (AIV) for the new pre-developed “home sites” or “lots” to be presented and collateralize the funding facility requested is currently assessed at more than $80K per pre-developed lot. AIV calculations include (3) 60 ft., lots per acre which represents a minimum AIV of $240K per assessed for 93 acres which is an 80 Pct. yield of the 116 acres.
The funding facility requested is approximately $16,740,000 (or) 75% of the underestimated AIV which is calculated @ $22,320,000 for 93 acres of the 116 acres acquired. The AIV calculation details include $80K per lot (or) 3 lots per acre assessed @ $240,000 per acre. Pre-development costs are currently estimated (per local commercial land appraisers, residential developers, builders and other national property valuation firms) at approximately $900 to $1,000 per linear foot calculated for an average lot measured at 60 ft. per or up to $60,000 per pre-developed lot.
Local developer’s current wholesale price per lot, sold to builders is frequently assessed at approximately $90K+ per lot for an average lot measured at 60 ft. The 279 lots proposed for pre-development are contiguous within the 116-acre tract of the Chalmers Heights community.
The new development will be located less than 3 miles to 5,000+ permanent full-time, salaried and hourly employees assigned to FCA‘s (Chrysler) Jefferson North Assembly Plant (JNAP).
The target market includes current employees assigned to JNAP which has recently received investments totaling $2.5B allocated by FCA to double the footprint of the existing plant. And, approximately 2,600+ of the additional 4,960+ NEW employees required to execute the operational plans have been recruited for the newly expanded automotive manufacturing facility.
The "Exit $trategy" proposed is to perform debt service facilitated by the funds disbursed from the homebuyer’s “approved” mortgage loan commitment. The homebuyer’s “approved” mortgage loan commitment will be disbursed at closing and escrowed for withdrawal to the developer/builder to reconcile development and unit construction costs. The net revenues generated from the sale of the new Smart Home will be remitted to perform debt-service on the funding facility disbursed by the Lender. The buyer’s “approved” mortgage loan commitment will be provided by the bank or retail mortgage lender engaged by the homebuyer. Prior to executing the PA the homebuyer’s “approved” mortgage loan commitment of Eighty-Percent 80% LTV of the total purchase price negotiated for the Smart Home and lot will be verified.
The rationale presented in this proposal is to consider the impact of the economic stimulus that is being generated by the $2.5B FCA investments. Those investments are currently being allocated to complete the NEW Mack Avenue Engine Plant, expand current production capacity and support the community. The NEW plant will double the size of JNAP to increase production of the iconic Jeep and Dodge brands which are projected to continue selling at record levels.
Construction on the NEW plant is scheduled for completion late in 2020 and Fiat Chrysler Automotive’s (FCA) $2.5B investment in the NEW engine plant is creating 4,960+ NEW full-time permanent jobs. In addition to those investments FCA has agreed to fund a $35-million community support benefits package and a $19 million workforce education and training program. FCA’s community benefits package also includes funds being allocated to install a buffer wall around the plant and renovate or raze homes in the surrounding communities.