HERCULES HILLTOWN DEVELOPMENT PROJECT
MELLO-ROOS CFD AUTHORIZATION
SANTA CLARA VALLEY HOUSING GROUP
SITE PLAN
T otal Project: 597 units
Phase 1: 206 townhomes
Phase 2: 124 townhomes
Phase 3: 70 townhomes
Phase 4: 197 apartments/condominiums
WHY ARE WE REQUESTING A MELLO-ROOS?
We are here this evening to formally request City Council approval for the formation of a Mello-Roos Community Facilities District for the Hilltown Development Project. The project cannot move forward without this financing mechanism.
As you are all aware, the Hilltown site faces significant development issues related to grading. There are approximately $86.5 million dollars of public improvement costs and impact fees that render the project financially unfeasible without utilizing this commonly used public improvement funding mechanism. We are requesting that the City Council approve use of a Mello-Roos Community Facilities District on this long- awaited marque project for the City of Hercules. Use of a Mello-Roos will be the catalyst for moving the Hilltown Project forward in 2022.
ASSUMPTIONS FOR SCENARIOS #1-3
* The Bond Interest Rate is an assumption and subject to change to reflect the market at the time of the Bond sale.
ASSUMPTIONS
Sales Price $650,000 $750,000
Expected Residential Units 200 200
Current Total Tax Rate 1.34% $8,710 $10,050
Bond Interest Rate* 4.50%
Capitalized Interest 12 Months
Annual % Increase in Special Tax 2.00%
SCENARIO #1
SCENARIO #2
SCENARIO #3 (RECOMMENDED OPTION)
CONCLUSION
We request that the City Council approve Scenario #3. This Scenario provides a significant financial contribution toward the public improvements while keeping the Mello-Roos cost for future homeowners at a sustainable level. The recommended Scenario #3 Mello-Roos would provide approximately $28 million for construction costs for the public improvements. Santa Clara Valley Housing Group will provide the remaining $58.5 million (approximately 70% of the total costs). We respectfully request that the City Council approve the creation of a Mello-Roos Community Facilities District for the Hilltown Development Project with a maximum tax of 2.00% so that we may commence the project.