MERCADO DEL BARRIO

Mercado del Barrio Jeff Wells, Opportunity Fund - CDE Kevin McCook, Shea Properties - QALICB Marc Schultz, Snell & Wilmer LLP Maria Bustria Glickman, US Bank CDC - Investor Tracy Burton, Wells Fargo Bank - Investor Tim Baker, Chelsea Investment/BCCC - CDE

PROJECT OVERVIEW- Kevin McCook Summary RFP approved by City of SD RDA July 2008 6.8 acres for a mixed-use project Located near Coronado Bridge in Barrio Logan Area is redeveloping Project consists of 85,000 SF of retail Anchored by a 35,891 SF Northgate Market Includes 92 affordable apartment units (Chelsea) Includes a 208-space parking structure LEED Certified Reasons for Transaction Great location in an up-and-coming community Infill opportunity with no community retail center Strong political and community support Gain entry into expanding Hispanic Market Public/Private Partnerships Model

PROJECT RISKS Risk Rating High Medium Low High Challenge Site History: Previous project proposals failed to proceed Site Environmental Remediation Challenged on EIR Addendum Complexity and Challenges of Financial Plan Housing over Retail Housing Developer Needs 9% LIHTC Award Housing Developer Needs Significant Public Agency Subsidy NMTC Allocation competitive Retail Specialty Center - in emerging market Limited / No Pre-leasing Retail on 3 streets Northgate provides traffic but no economics to the financing Property Title Cloud 10

SITE LOCATION Downtown San Diego Mercado Del Barrio Coronado Island 11

SITE LOCATION MERCADO DEL BARRIO 12

POINTS OF INTEREST DOWNTOWN TROLLEY STATIONS PETCO PARK CHICANO PARK COMMUNITY COLLEGE 13

SITE PLAN Retail Retail Anchor Mixed Use (Retail/Resid.) 14

DEV. PROGRAM: Retail 2 3 2 2 2 4 1 15 1-35,891 SF Northgate Market 2-51,203 SF Retail/Restaurants 3-9,600 SF Plaza/Event Space 4-2,790 SF Live/Work Space

DEV. PROGRAM: Residential 16 88 Affordable Apartments (over retail) 4 Live/Work Units (ground floor) 92 Total Units (15-1BR, 40-2BR, 33-3BR, 4 L/W Units)

3D PLAN 17

AERIAL 18

AERIAL 19

AERIAL 20

EXTERIOR 21

EXTERIOR 22

MERCADO DEL BARRIO NMTC Financing Structure Maria Bustria- Glickman Vice President U.S. Bancorp Community Development Corporation

SOURCES & USES RETAIL ONLY Sources of Funds Uses of Funds NMTC Loan $18,812,000 Land $100 Developer Equity $861,100 Construction and Direct Costs $9,826,000 Tenant Improvements $2,025,000 Indirect Costs $5,981,000 Financing and interest $1,841,000 Total Sources of Funds $19,673,100 Total Uses of Funds $19,673,100 24

TRANSACTION FLOW CHART U.S. Bank, NA $6,100,000 USBCDC $5,349,663 NMTCs $7,642,375 DEBT EQUITY Shea Junior Lev Lender $8,280,319 DEBT Investment Fund MGMT FEE RESERVE Reserve Opportunity Fund (CDE 1) Borders Community Capital (CDE 2) EQUITY 0.01% QEI $9,895,833 QEI $9,700,000 EQUITY 0.01% CLOSING FEES 4.0% OF QEI CLOSING FEES 4.0% OF QEI Opportunity Fund Sub-CDE Borders Community Capital Sub-CDE QLICIs $9,500,000 QLICIs $9,312,000 25 Shea Equity $861,100 Shea Mercado QALICB

SUMMARY Complex mixed-use project Site history and risk Emerging market 4 major sources of funding NMTCs LIHTCs Public subsidy Perm debt, developer equity, land sale proceeds RDA and commission instrumental All parties professional Needed all sources to come together at the right time 26

Northgate Mercado Tracy Burton

Project: CDE: Sponsor: Northgate Barrio Logan Hispanic-focused full-service grocery store CT/KDF Community Development Partners Northgate Gonzalez Markets Project Costs: $10.5 million

Community impact: First grocery store in the Barrio Logan area in 30+ years project was a direct response to bringing high quality groceries into a designated food desert location. Project serves as an anchor for the City s redevelopment plan for the Barrio Logan community Supporting a family-owned business dedicated to bringing Hispanic-focused grocery stores to Southern California communities. Project created an estimated 159 construction and 140 permanent jobs

Estrella del Mercado Apartments Tim Baker

Estrella del Mercado Apartments The Project: 92 units 15 1-bedroom, 1-bath flat 4 1-bedroom work/loft units 40 2-bedroom, 1-bath flats 33 3-bedroom, 2-bath flats Targeting: Design: HHs w/ incomes from 30% to 60% of AMI A Texas Wrap or Donut Design 3-story rectangular apartment building (Type V construction) on a podium deck above ground-floor retail wrapped around a 208- parking 2 ½-story above-ground parking structure

Estrella del Mercado Apartments Project Amenities: Community Center w/ community meeting room, kitchenette and computer room Recreation area on the garage rooftop including a tot lot and BBQs & picnic tables Laundry facilities on each of the three residential levels On-site management Security and monitoring systems Sustainability LEED certification Solar - electricity & hot water systems All units are planed that allows for cross-ventilation and freshair circulation Exceed Title 24 Standards by 15% Other: Terrific views from units and community deck/plazas on all three residential floors

Estrella del Mercado Apartments Cost: Construction Cost (Prev Wage): $24,600,000 Total Development Cost: $44,000,000 Financing: CitiBank Construction Loan: $20,160,000 CitiBank Perm Loan: $4,550,000 San Diego Redevelopment Agency: $9,104,000 San Diego Housing Commission: $7,000,000 Raymond James 9% Tax Credit Equity: $18,000,000 Ground Lease Value: $4,560,000 Deferred Developer Fee: $640,000 Solar Credit Equity: $70,000

Estrella del Mercado Apartments

Estrella del Mercado Apartments

Estrella del Mercado Apartments

Panel Q&A Audience Questions 4:30-5:30 Bus tour Mercado del Barrio