SB Friedman provides ongoing services to the Department of Community and Economic Development (DCED) related to project finance evaluation, deal structuring and negotiation.
DCED’s mission is to facilitate new investment in the City of Cincinnati by providing and leveraging funding and other resources to support strong communities. Our engagement includes the following services:
- Benchmarking development budget and projected operating pro forma assumptions against industry data and comparable projects to assess the reasonableness of developer assumptions;
- Reviewing proposed sources of funds to assess the level of equity investment, status of financing sources, and assumed terms;
- Independently projecting developer returns and/or conducting financial gap analyses;
- Analyzing developer’s anticipated returns with and without the requested public assistance packages;
- Conducting sensitivity analyses to evaluate different structures and terms of public assistance to determine those required to ensure project feasibility;
- Assisting in developer negotiations and providing structuring recommendations; and,
- Providing ongoing support following closing on evaluation of project financials and returns or modifications to the development agreement.
To date, we have reviewed the following project:
SkyHouse Cincinnati. In 2017, SB Friedman conducted a preliminary financial feasibility review of the SkyHouse Project, a proposed $94 million luxury residential tower along the riverfront in Downtown Cincinnati. The proposed 25-story multifamily tower is expected to include 352 apartments, approximately 3,000 square feet of ground floor retail, and 504 parking spaces in a standalone parking structure. The developer requested tax increment financing (TIF) assistance in the form of a 30-year rebate structure in order to make the project financially feasible. SB Friedman assessed operating assumptions, inflation factors, construction costs and anticipated returns to evaluate the requested assistance package.
Results: Based on our findings and recommendations, DCED has negotiated an assistance package with the developer. Groundbreaking is expected in December 2017 with completion expected in 2019.