Attachment B1 - Proposals Received (Abode Communities) — Santa Monica City Council, January 11, 2022

Proposals Received
by the City of Santa Monica in Response to
1318 Fourth Street
Affordable Housing Development
Request for Proposals
Abode Communities
The Terraces at Fourth
Proposal to provide Aff ordable & SupporƟ ve Housing
Development Services for 1318 Fourth Street
November 1, 2019
SubmiƩ ed by:

Robin Hughes
President & CEO
Abode Communities
1149 S. Hill Street, Suite 700
Los Angeles, CA 90015
(213) 225-2762 | rhughes@abodecommuniƟ es.org
Abode
Communities
The Terraces at Fourth
Table of Contents

1. Cover LeƩ er

2. Development Team InformaƟ on
a. Contact InformaƟ on
b. Form of Legal EnƟ ty
c. Regional Experience
d. ArƟ cles of IncorporaƟ on; CerƟfi caƟ on of Good Standing e. Development Team

3. Development and Services Concept
a. Vision and Summary of Uses
b. SupporƟ ve Services
c. Conceptual Site and Floor Plans
d. Preliminary Schedule

4. Community Involvement Plan

5. Financing Strategy
a. ConstrucƟ on and Perm Sources and Uses
b. Proforma
c. AssumpƟ ons
d. OperaƟ ng Pro Forma
e. Loan Terms
f. ResponsibiliƟ es/ObligaƟ ons
g. ConƟ ngencies
h. Repayment Structure
i. Ground-Lease Terms
j. Financing Timeline
k. Services Budget and Sources

6. Development Team’s Financial Capacity and Experience a. Financial Statements
b. Development Porƞ olio List
c. SupporƟ ve Services Porƞ olio
d. Funding Sources Experience
e. 9% Developments
f. Federal Housing Subsidies
g. Debt
h. Non-Performing Loans
i. Financial ObligaƟ ons
j. ArbitraƟ on & LiƟ gaƟ on

7. Appendix
a. Abode CommuniƟ es & Affi liates OrganizaƟ on Chart
b. ArƟ cles of IncorporaƟ on
c. CerƟfi cate of Good Standing
d. Development Porƞ olio & Relevant Projects
e. Resident/SupporƟ ve Services Provider Porƞ olios
f. Developments with 9% LIHTC & Federal Housing Subsidies g. Schedule of Secured & Unsecured Debt
h. Financial Statements (2018-2016)
1Cover Letter
November 1, 2019
Mr. James Kemper
City of Santa Monica
Housing and Economic Development Department, Housing Division 1901 Main Street, Suite B
Santa Monica, CA 90401
RE: 1318 Fourth Street Aff ordable Housing Development RFP #243 Dear Mr. Kemper:

Abode CommuniƟ es is pleased to present its proposal for the redevelopment of 1318 Fourth Street in the City of Santa Monica. Herein referred to as The Terraces at Fourth, this vibrant mixed-use aff ordable development will serve low-income individuals and families, and the Santa Monica community at-large, with 107 service-enhanced aff ordable homes and 18,000 square feet of ground fl oor commercial programming, including a an independent bookstore with cafe and a workshop for arts-related nonprofi t organizaƟ ons. The Terraces at Fourth off ers a unique and forward-looking mixed-use concept that capitalizes on this valuable City-owned property to deliver a lasƟ ng space for community connecƟ vity and exchange, while also providing stable homes and wrap-around services for Santa Monica’s most vulnerable community members.

Development Concept
Abode CommuniƟ es’ proposal for The Terraces at Fourth balances the City’s objecƟ ve to maximize aff ordable housing, provide nonprofi t space, and meet the community’s desire for unique retail experiences. The commercial program acƟ vates the ground fl oor into an arts and cultural desƟ naƟ on that emphasizes community connecƟ vity with a 7,100 square foot independent bookstore and café, 1,480 square feet of bouƟ que retail spaces for local entrepreneurs, a naturally-lit community gathering space, and a 3,500 square foot workshop space for nonprofi t arts organizaƟ ons. Below-market lease rates and strategic markeƟ ng and outreach will ensure the retail spaces are accessible to local, independent business not currently represented in the Downtown market.

The Terraces at Fourth’s housing concept off ers 107 units of service-enhanced aff ordable housing, with 60 units set-aside as supporƟ ve housing for individuals and families experiencing homelessness, 46 units for low-income individuals and families, and one manager’s unit. The highly ameniƟ zed housing concept includes over 10,000 square feet of open space divided between a large common courtyard and two residenƟ al terraces, a resident center with acƟ ve programming from Beyond Homes, and a robust supporƟ ve services program delivered by St.

Joseph Center to help residents achieve and maintain stability.

Development and OperaƟ onal Experience
With more than 50 years in operaƟ on, Abode CommuniƟ es is the longest established aff ordable and supporƟ ve housing developer in Southern California. As a Los Angeles-based and regional real estate developer, the organizaƟ on has been naƟ onally recognized as an Aff ordable Housing Finance Top 50 Developer; as the leading provider of Leadership in Energy & Environment Design (LEED) PlaƟ num units in the State of California (U.S.

Green Building Council, 2018); and as the SCANPH Developer of the Year in 2018.

Throughout its history, Abode CommuniƟ es has invested more than $640 million in economic acƟ vity throughout Los Angeles County, having developed more than 45 residenƟ al and mixed-use communiƟ es with nearly 3,000 high-quality rental homes that have improved the livelihoods of some 10,000 residents.

1. Cover Letter
Abode CommuniƟ es has a long track record of success in leveraging a diverse range of funding sources – including the Low Income Housing Tax Credit Program, tax-exempt bond fi nancing, the Aff ordable Housing & Sustainable CommuniƟ es and the Infi ll Infrastructure Grant programs, the Los Angeles County Development Authority, and various Federal operaƟ ng subsidy programs – to successfully deliver large-scale, complex, mixeduse projects.

Today, Abode CommuniƟ es’ property and asset management porƞ olio includes 37 properƟ es with 2,530 aff ordable homes for nearly 7,000 individuals, the majority of whom are also served by Abode CommuniƟ es’ Beyond Homes resident services program. At The Terraces on Fourth, supporƟ ve services partner St. Joseph Center will bring its more than 40-year history of serving persons experiencing homelessness on the Westside to deliver a coordinated and comprehensive social service model aimed at helping residents remain stable in their housing.

Design Experience
Abode CommuniƟ es was originally established in 1968 as an all-volunteer organizaƟ on of architects dedicated to socially benefi cial work. Today, the studio is considered a leader in the design and planning of infi ll, transit-rich, mixed-use sites with rigorous environmentally sustainable design standards. Since 2009, the studio has designed six LEED PlaƟ num and three LEED Gold aff ordable mulƟ family buildings. It’s most recent endeavor, Rolland CurƟ s Gardens, features the new construcƟ on of 140 aff ordable homes combined with a 6,500 square foot community health center and a 1,500 square foot local market. The project was completed in 2019 and is expected to achieve a LEED PlaƟ num raƟ ng.

Lastly, Abode CommuniƟ es’ architectural leadership includes design principals with a deep history of working in Santa Monica. From projects like Ocean Avenue South Master Plan, Waverly Housing, and Seychelles Housing to 2802 Pico aff ordable housing, the design team is well versed in how to deliver a meaningful design and program to the City, it’s local community, and ulƟ mately, the residents who will call it home.

Financing Analysis and Capacity
The fi nancing strategy for The Terraces of Fourth leverages Abode CommuniƟ es’ extensive experience securing Federal, State, and local capital sources to construct a project that delivers on the City of Santa Monica’s objecƟ ves for the site without relying on the Housing Trust Fund. Abode CommuniƟ es’ conservaƟ ve underwriƟ ng of the ground fl oor concept ensures the team’s ability to deliver on the vision for a unique retail and communityoriented program. As a mission-based nonprofi t organizaƟ on, Abode CommuniƟ es is commiƩ ed to the long-term ownership and success of high-quality, service-enriched aff ordable housing.

Given the depth of its development and design experience, the strength of its supporƟ ve services partners, and proven history of success fi nancing, construcƟ ng, and operaƟ ng high-quality mixed-use aff ordable housing developments, Abode CommuniƟ es is confi dent in its ability to deliver on the City of Santa Monica’s objecƟ ves for this valuable asset.

Thank you for your consideraƟ on of Abode CommuniƟ es’ proposal for The Terraces at Fourth. We look forward to collaboraƟ ng with the City of Santa Monica and the surrounding community on this exciƟ ng development.

Sincerely,
Robin Hughes
President & CEO

1. Cover Letter (cont’d)
Development Team 2
Abode
Communities

2. Development Team Information The Terraces at Fourth

2.a - Contact Information
Robin Hughes, President & CEO
Abode CommuniƟ es
(213) 225-2762 | rhughes@abodecommuniƟ es.org
1149 S. Hill Street, Suite 700 Los Angeles, CA 90015
Holly Benson, ExecuƟ ve Vice President & COO
Abode CommuniƟ es
(213) 225-2708 | hbenson@abodecommuniƟ es.org
1149 S. Hill Street, Suite 700 Los Angeles, CA 90015
Lara Regus, Senior Vice President, Development
Abode CommuniƟ es
(213) 225-2812 | lregus@abodecommuniƟ es.org
1149 S. Hill Street, Suite 700 Los Angeles, CA 90015

2.b - Form of Legal Entity
Abode CommuniƟ es is a nonprofi t 501 (c) (3) organizaƟ on that has been rooted in community development throughout the State of California since 1968. More than an aff ordable housing provider, our work fosters a culture of housing inclusion by integraƟ ng families and individuals with neighborhoods so communiƟ es at-large can thrive. Our mission is to create service-enhanced aff ordable housing and sociallybenefi cial community faciliƟ es that promote the social, economic and physical transformaƟ on of underserved communiƟ es.

Abode CommuniƟ es is affi liated with a number of development enƟƟ es and nonprofi t corporaƟ ons, the majority of which were formed with Abode CommuniƟ es as the managing general partner for the purposes of owning and operaƟ ng aff ordable housing. Please see Appendix 7.a for a copy of “Abode CommuniƟ es and Affi liates OrganizaƟ on Chart.”

2.c - Regional Experience
With more than 50 years in operaƟ on, Abode CommuniƟ es is the longest established aff ordable and supporƟ ve housing developer in Southern California. Headquartered in Los Angeles, Abode CommuniƟ es has invested more than $640 million in economic acƟ vity throughout Los Angeles County, having developed more than 45 aff ordable housing and supporƟ ve housing developments with nearly 3,000 high-quality rental homes that have improved the livelihoods of some 10,000 extremely low, very lowand low-income residents. Its pipeline is robust with some 850 addiƟ onal serviceenriched aff ordable and supporƟ ve homes to be produced throughout the region by year-end 2024.

Abode
Communities

2.c - Regional Experience (cont’d) The Terraces at Fourth As a Los Angeles-based and regional real estate developer, the organizaƟ on has been naƟ onally recognized as an Aff ordable Housing Finance Top 50 Developer; as the leading provider of Leadership in Energy & Environment Design (LEED) PlaƟ num units in the State of California (U.S. Green Building Council, 2018); and as the longest established aff ordable housing provider in Southern California. Our experƟ se spans from Southern California coastal communiƟ es to City of Coachella just east of Palm Desert.

Abode CommuniƟ es’ proposed team has a wide range of experience in developing, designing, planning, and operaƟ ng aff ordable housing, mulƟ family residenƟ al, and commercial retail programs in the City of Santa Monica.

Development team member Maegan Pearson is a former member of the City of Santa Monica Architectural Review Board. Here, Pearson was responsible for preserving Santa Monica’s cultural importance, assuring Santa Monica’s built environment remains a place of beauty, spaciousness, and quality; ensuring future development creates a lasƟ ng, posiƟ ve impact on the community; and making decisions that promote public safety and welfare.

Prior to joining Abode CommuniƟ es, Pearson also served as senior project manager for Community CorporaƟ on of Santa Monica responsible for oversight and planning the construcƟ on of fi ve aff ordable housing developments in the City.

Abode CommuniƟ es | Architecture’s Pooja Bhagat has a wealth of experience working in Santa Monica, having served as the City Architect, as well as a senior associate for Moore Ruble Yudell Architects and Planners for 14 years. She brings with her a deep understanding of Santa Monica as a unique “city on the ocean” with a strong commitment to advancing the urban fabric through innovaƟ ve design, and aƩ enƟ on to the public realm to create places that bring people together through community building. Bhagat has a wealth of experience designing in Santa Monica, having made signifi cant contribuƟ ons on design projects such as Ocean Avenue South Master Plan, Waverly Housing, Seychelles Housing, and 2802 Pico aff ordable housing.

AddiƟ onally, Abode CommuniƟ es has enlisted key consultants that have a wide range of experience working in Santa Monica. St. Joseph Center, the proposed supporƟ ve services provider, is the Coordinated Entry System lead for SPA 5. They will bring their experƟ se to collaborate with the City of Santa Monica for resident placement, as well as operate the supporƟ ve services program on-site.

Commercial broker Cushman & Wakefi eld and construcƟ on manager AMJ ConstrucƟ on also have a deep understanding of working on the Westside, including several notable projects in Santa Monica. We invite you to refer to SecƟ on 2.e for more informaƟ on.

Abode CommuniƟ es is confi dent in its ability to collaborate with the City, its local residents and businesses, and the diverse resident populaƟ on, as we collecƟ vely work towards achieving high-end development and design to create cultural, social, and environmentally sustainable economic investment.

Abode
Communities

2.d - Articles of Incorporation; The Terraces at Fourth Certifi cate of Good Standing
Please see Appendix 7.b and 7.c for Abode CommuniƟ es’ ArƟ cles of IncorporaƟ on and CerƟfi cate of Good Standing.

2.e - Development Team
Please see the following pages for the proposed organizaƟ onal chart, team member profi les, and key staff member resumes.

Abode Communities | The Terraces at Fourth

2.e - Development Team, Organizational Chart
Abode Communities
Architecture
design architect property manager resident services
St. Joseph Center
supportive services
Abode Communities
developer
Cushman and
Wakefi eld
commercial broker
Abode Communities
Property Mgmt.

Abode Communities
Resident Services
AMJ Construction
Management
construction manager
TBD*
general contractor
* A general contractor is expected to be selected in partnership with the City of Santa Monica. Abode CommuniƟ es has long-standing relaƟ onships with reputable general contractors serving the Southern California region, including the likes Morley Builders, Bernards ConstrucƟ on, Alpha ConstrucƟ on, Walton ConstrucƟ on, among many more.

Abode Communities | The Terraces at Fourth
Abode Communities | Real Estate
Abode CommuniƟ es is a high-performance nonprofi t organizaƟ on that has been rooted in community development throughout Southern California for more than 50 years. Through its work, the organizaƟ on fosters a culture of housing inclusion by integraƟ ng families, individuals, and populaƟ ons experiencing homelessness within neighborhoods so communiƟ es at-large can thrive.

As developer, the organizaƟ on has been recognized as an Aff ordable Housing Finance Top 50 Developer; the leading provider of Leadership in Energy & Environment Design (LEED) PlaƟ num units in the State of California (U.S. Green Building Council, 2018); and the longest established aff ordable housing provider in Southern California. We are considered an innovator of aff ordable housing having completed the fi rst Low Income Housing Tax Credit residenƟ al deal more than 30 years ago, the fi rst aff ordable mulƟ family residenƟ al development in the County of Los Angeles to permanently house TransiƟ on Age Youth, and the fi rst to cerƟ fy an aff ordable mulƟ family residenƟ al building at the LEED PlaƟ num level through the U.S. Green Building Council.

Abode CommuniƟ es understands the social, environmental, economic, and physical issues oŌ en inherent in the process of bringing aff ordable and supporƟ ve housing to fruiƟ on. The organizaƟ on’s experienced and dedicated development team members are experts in the execuƟ on of criƟ cal path acƟ viƟ es including idenƟ fying and acquiring sites, securing land use approvals, obtaining fi nancing, overseeing construcƟ on acƟ viƟ es, and successfully transiƟ oning to the organizaƟ on’s property management team. Abode CommuniƟ es’ comprehensive, sustainable development plans result in housing that stabilizes low-income populaƟ ons, including people experiencing homelessness, all the while strengthening communiƟ es, enhancing livelihoods, improving economic opportunity, fostering community connecƟ vity, and promoƟ ng environmental sustainability.

Please see the following page for key development team members.

2.e - Development Team (Developer)
47 residenƟ al
developments
3,048
aff ordable
homes
$658M
in economic
investment
10,000+
people
served
850
units in pipeline
year end 2024
Abode
Communities
The Terraces at Fourth
Robin Hughes President & CEO
(213) 225-2762 | rhughes@abodecommuniƟ es.org
1149 S. Hill Street, Suite 700 Los Angeles, CA 90015
Robin Hughes has been acƟ vely involved in aff ordable housing and community development for over 30 years and in her 23 years as leader of Abode CommuniƟ es, Hughes has transformed the organizaƟ on into a naƟ onally and locally recognized aff ordable and supporƟ ve housing provider as well as the leading provider of environmentally sustainable aff ordable housing in California.

As president & CEO, Hughes is responsible for the development and execuƟ ve oversight of strategic iniƟ aƟ ves that expand the organizaƟ on’s impact through the producƟ on and preservaƟ on of aff ordable housing across California. She is Board Chair of Housing Partnership Network and Co-Policy Chair of California Housing ConsorƟ um, and serves on the boards of California Community Reinvestment CorporaƟ on and The Community Development Trust. In addiƟ on to providing expert tesƟ mony for a number of aff ordable housing-based iniƟ aƟ ves naƟ onwide, she has been recognized as NaƟ onal Real Estate Investor Magazine’s “Champion of Aff ordable Housing,” Huff Post’s “Person of the Day,” and BizNow’s “ExcepƟ onal Women in Business.” Hughes earned a masters and bachelor degree of public administraƟ on from University of Southern California and obtained her ExecuƟ ve Program CerƟfi cate from Harvard University’s John F. Kennedy School of Government.

Holly Benson ExecuƟ ve Vice President & COO
(213) 225-2708 | hbenson@abodecommuniƟ es.org
1149 S. Hill Street, Suite 700 Los Angeles, CA 90015
Holly Benson is execuƟ ve vice president and chief operaƟ ng offi cer responsible for the execuƟ ve oversight of the organizaƟ on’s professional real estate and property management services, as well as the organizaƟ on’s mission-criƟ cal social and supporƟ ve services program. As such, she oversees the producƟ on of new aff ordable housing; creaƟ on of new business opportuniƟ es; management of exisƟ ng real estate assets; and fi nancial and operaƟ onal performance of Abode CommuniƟ es’ real estate porƞ olio and resident services program, Beyond Homes.

Benson serves an integral role in operaƟ ng the organizaƟ on’s strategic plan to ensure the organizaƟ on meets and exceeds its strategic goals.

A 21-year veteran in the aff ordable housing industry, Benson’s depth of experience is underscored by her contribuƟ on to the development of more than 1,000 aff ordable homes and the procurement of some $400 million in loans, grants and equity from both private and public sources throughout California. She currently serves as a member of the Federal Home Loan Bank of San Francisco’s Aff ordable Housing Advisory Council and is past president of the Southern California AssociaƟ on for Nonprofi t Housing. Benson’s experƟ se in the fi eld has been featured on the Tavis Smiley Show, KNX BroadcasƟ ng, and KPCC Public Radio in Los Angeles, and she has been a guest lecturer at both University of Southern California and University of California, Los Angeles. She earned her bachelor degree in communicaƟ on studies from University of California, Los Angeles.

Abode Communities | Real Estate (cont’d)
Abode
Communities
The Terraces at Fourth
Lara Regus Senior Vice President, Development
(213) 225-2812 | lregus@abodecommuniƟ es.org
1149 S. Hill Street, Suite 700 Los Angeles, CA 90015
Lara Regus is responsible for the oversight of aff ordable housing producƟ on and preservaƟ on. As such, she idenƟfi es a wide-range of fi nancing to bring Permanent SupporƟ ve Housing and transit-oriented developments to fruiƟ on; oversees predevelopment, construcƟ on and permanent fi nancing acƟ viƟ es; manages relaƟ onships with lenders and investors; and directs Abode CommuniƟ es’ experienced and dedicated development team members.

In her tenure with Abode CommuniƟ es, Regus has contributed to the development of more than 1,000 aff ordable mulƟ family residenƟ al units yielding $317 million of real estate investment in California. Regus’ most recent experience includes the development of mixeduse permanent supporƟ ve housing projects such as Westmont Vista, La Veranda, and Chavez FickeƩ . Please refer to project examples in the Appendix for more informaƟ on.

She is a trusted resource for transit-rich environmentally sustainable aff ordable housing, and has parƟ cipated on various panels hosted by LA METRO, U.S. Green Building Council, Southern California AssociaƟ on for Nonprofi t Housing, Urban Land InsƟ tute, and American Planning AssociaƟ on. She earned her masters in urban planning from the University of California, Los Angeles and her bachelors in economics from Claremont McKenna College.

Maegan Pearson Senior Project Manager
(213) 225-2786 | mpearson@abodecommuniƟ es.org
1149 S. Hill Street, Suite 700 Los Angeles, CA 90015
Maegan Pearson is senior project manager responsible for managing all phases of mulƟ family aff ordable housing development. With nearly 20 years of community development experience, Pearson has extensive experƟ se with idenƟ fying and acquiring land; securing enƟ tlements; securing necessary fi nancing; overseeing design, development, and construcƟ on; and converƟ ng projects to permanent fi nancing. Pearson is parƟ cularly skilled at developing large, complex projects featuring heavy commercial components adjacent to transit.

Prior to joining Abode CommuniƟ es, she served as senior project manager for Community CorporaƟ on of Santa Monica responsible for oversight and planning the construcƟ on of fi ve aff ordable housing developments. AddiƟ onally, Pearson served on the City of Santa Monica’s Architectural Review Board, most recently as its Chair in 2017-2018. Her experience includes successfully obtaining CDFI cerƟfi caƟ on and a grant from the U.S. Department of Treasury, generaƟ ng $2.3 million of new capital as the director of real estate for Inglewood Neighborhood Housing Services. Pearson earned her Bachelor of Arts in social ecology from the University of California, Irvine and her Masters in Urban and Regional Planning from the University of California, Los Angeles.

Abode Communities | Real Estate (cont’d)
Abode Communities | The Terraces at Fourth
Abode Communities |Architecture
Abode CommuniƟ es was originally established in 1968 as an all-volunteer organizaƟ on of architects dedicated to socially benefi cial work. Today, fullservice architectural design studio capitalizes upon its decades of experience to serve a mulƟ tude of community-based organizaƟ ons in need of aff ordable and supporƟ ve housing; Federally Qualifi ed Health Centers; childcare centers; and early educaƟ on centers.

Each member of the design team relies on fundamental design principles expressed through unique experiences and perspecƟ ves in order to achieve architecture that is relevant and contextual. Moreover, the studio’s work responds to the needs of our Ɵ me by inspiring, providing comfort, and contribuƟ ng to the beƩ erment of both the built environment and the human condiƟ on.

Philosophy
The studio is principled, progressive and innovaƟ ve, all the while relying on fundamental design to create architecture that is relevant in Ɵ me, contextual within its surroundings, and meaningful for its inhabitants. It is the studio’s philosophy that architecture must inspire, provide comfort, and contribute to the beƩ erment of the human condiƟ on.

Work
Abode CommuniƟ es|Architecture has designed 60 aff ordable housing and mixeduse developments in Southern California. The studio has capitalized upon its synergy and depth of experience working with Abode CommuniƟ es|Real Estate to bring expert architectural services to clients such as PATH Ventures, L.A. Family Housing, Mercy Housing, LiƩ le Tokyo Service Center, Skid Row Housing Trust, Cabrillo Economic Development CorporaƟ on, Link Housing, Wakeland HDC, Enterprise Community Partners, and American Gold Star Manor. 573
community
design projects
60 aff ordable housing
design projects
11 LEED-rated
design projects

2.e - Development Team (Architect)
> more
Adams Terrace, 86 Aff ordable/SupporƟ ve Homes, Building 1 Abode
Communities
The Terraces at Fourth
Abode Communities |Architecture (cont’d)
Abode CommuniƟ es | Architecture’s leadership includes design principals with a deep history of working in Santa Monica. From projects like Ocean Avenue South Master Plan, Waverly Housing, and Seychelles Housing to 2802 Pico aff ordable housing, the design team is well versed on how to deliver a meaningful design and program to the City, it’s local community, and ulƟ mately, the residents who will call it home.

Commitment to Sustainability
Since 2009, the studio has designed six LEED PlaƟ num and three LEED Gold aff ordable mulƟ family buildings. It’s most recent endeavor, Rolland CurƟ s Gardens, features the new construcƟ on of 140 aff ordable homes combined with a 6,500 square foot community health center and a 1,500 local market. The project was completed in 2019 and is expected to achieve a LEED PlaƟ num raƟ ng.

Please see the following page for key team member resumes.

Adams Terrace, 86 Aff ordable/SupporƟ ve Homes, Building 2 Abode
Communities
The Terraces at Fourth
Gio Aliano, AIA Principal Architect
(213) 225-2714 | galiano@abodecommuniƟ es.org
1149 S. Hill Street, Suite 700 Los Angeles, CA 90015
Gio Aliano joined Abode CommuniƟ es as its principal architect in 2013, responsible for the execuƟ ve oversight and leadership of its architectural design studio from the onset of project visioning through ulƟ mate construcƟ on compleƟ on. His thoughƞ ul and holisƟ c approach drives high-quality design while ensuring each client’s budget and schedule goals are met.

With more than 30 years of architectural design experience, Aliano brings an experƟ se and passion to advance mission-based and community-serving organizaƟ ons through architecture.

Above all, he works to culƟ vate lasƟ ng and meaningful relaƟ onships by respecƟ ng each client’s unique vision and responding to their service needs.

Aliano is a member of Los Angeles EducaƟ on Partnership’s Board of Directors, as well as LA Mas Advisory CommiƩ ee. Prior to joining Abode CommuniƟ es, Aliano was associate for Killefer Flammang Architects, design manager for Los Angeles Community College District under the employ of URS CorporaƟ on, senior designer for Harley Ellis Devereaux and Leo A. Daly, and principal of Gio Aliano Architect. He earned a Master of Architecture from University of California, Los Angeles and a Bachelor of Science, Design from Arizona State University. He is licensed to pracƟ ce in the State of California, #C-26571.

Pooja Bhagat, AIA, LEED BD+C Associate Principal
(213) 225-2837 | pbhagat@abodecommuniƟ es.org
1149 S. Hill Street, Suite 700 Los Angeles, CA 90015
Pooja Bhagat joined Abode CommuniƟ es’ architectural design studio in 2019 as associate principal responsible for leading the design team, fostering design and project management effi ciencies, and direcƟ ng aff ordable and supporƟ ve mixed-use residenƟ al projects. She has more than 18 years of experience in award-winning mulƟ family, mixed-use, urban design, and master planning projects.

Bhagat’s design philosophy is rooted in implemenƟ ng environmental strategies while incorporaƟ ng social, cultural, and economic diversity in the built environment. She has a depth of experience working in Santa Monica, having served as the City’s Architect, as well as senior associate at Moore Ruble Yudell Architects and Planners for 14 years. Highlights of her local work includes Seychelle Housing (93 homes), Waverly Housing (65 homes), and Pico Housing (33 aff ordable homes).

Bhagat is an acƟ ve member of AIA Los Angeles, having recently served on the board of directors and as founding chair of the Women in Architecture CommiƩ ee. She earned a Master of Architecture from the Southern California InsƟ tute of Architecture, Los Angeles and a Bachelor of Architecture from Sushant School of Art and Architecture in New Delhi, India. She is licensed to pracƟ ce in the State of California, #C-33252.

Abode Communities | Architecture (cont’d)
Abode Communities | The Terraces at Fourth
5,300
residents
served
23 resident
centers
76%
voluntary
parƟ cipaƟ on rate
Abode Communities |Resident Services
Abode CommuniƟ es is celebraƟ ng its 19th year as a social service provider.

Its on-site resident services program, Beyond Homes, is criƟ cal to prevenƟ ng homelessness, stabilizing residents in place, and breaking the cycle of longterm poverty for generaƟ ons to come. Moreover, the program works to empower residents to become economically stable through youth enrichment programming, adult capacity building, community engagement, and housing retenƟ on. Please see SecƟ on 3.b for more direct program informaƟ on.

All services are complimentary and resident parƟ cipaƟ on is voluntary. In 2018, the organizaƟ on experienced a 76% porƞ olio-wide social service parƟ cipaƟ on rate and opened two new resident centers, increasing the number of residents served in its porƞ olio by more than 10%.

2.e - Development Team (Resident Service Provider)
Abode
Communities
The Terraces at Fourth
Roshe MalakuƟ Vice President, Resident Services
(213) 225-2716 | rmalakuƟ @abodecommuniƟ es.org
1149 S. Hill Street, Suite 700 Los Angeles, CA 90015
Roshe MalakuƟ is vice president of resident services responsible for the oversight and implementaƟ on of Abode CommuniƟ es’ resident services program, Beyond Homes, which operates at 23 aff ordable housing developments and serves some 5,300 low-income parents, children, seniors, and people with special needs.

MalakuƟ strategically responds to the communiƟ es where Abode CommuniƟ es operates by developing impacƞ ul social service programs to help residents remain stable in their homes and ulƟ mately, achieve economic stability.

She is responsible for managing service provider partners for special needs populaƟ ons; developing and controlling program budgets; evaluaƟ ng and preparing staff policies and procedures; monitoring program performance and outcomes; and ensuring the program is in compliance with all regulatory and funder requirements. To ensure maximum housing retenƟ on and stability for residents, MalakuƟ establishes and maintains strategic alliances and working relaƟ onships with community-based organizaƟ ons, social services agencies and other stakeholders, as well as parƟ cipates in fundraising acƟ viƟ es.

Prior to joining Abode CommuniƟ es, MalakuƟ served as director of housing programs for United Friends of the Children where she directed the daily operaƟ ons of a fast-paced housing program for TransiƟ on Age Youth; created operaƟ onal and risk management strategies; and culƟ vated $2.3 million in grants to support the organizaƟ on’s $3.5 million program budget.

MalakuƟ also previously served as director for three separate programs for Beyond Shelter, including Housing First, Homeless PrevenƟ on and Rapid Re-Housing Program (HPRP) and the Skid Row Families DemonstraƟ on Project (SRFDP), all of which provided homeless families with emoƟ onal support, guidance, job training, social services and housing. She was also a supervising children’s social worker with the Department of Children and Family Services for nearly a decade.

She is a member of the Los Angeles CoaliƟ on to End Youth Homelessness and the Los Angeles ConƟ nuum of Care CoordinaƟ ng Council. She received her Masters, Clinic Psychology from AnƟ och University and a Bachelors in Philosophy from University of Southern California.

Abode Communities | Resident Services (cont’d)
Abode Communities | The Terraces at Fourth
St. Joseph Center
Since its founding more than four decades ago, St. Joseph Center has grown into a mulƟ faceted organizaƟ on. Each year the organizaƟ on reaches more than 10,000 people
through some 25 programs throughout LA County. With a
staff of nearly 300 and more than 400 regular dedicated volunteers, St. Joseph Center helps people get back on
their feet so they can live their healthiest, happiest lives.

St. Joseph Center is the lead for the Coordinated
Entry System in SPA 5 - Westside for individuals and
families, and also has offi ces in South LA, Downtown
Los Angeles, and southeast LA County. In addiƟ on to
this role, the organizaƟ on has a number of partnerships with community-based organizaƟ ons to deliver on-site
supporƟ ve services to chronically homeless populaƟ ons and people experiencing homelessness who have
transiƟ oned to permanent aff ordable housing.

The diversity of its programs is among its greatest
strengths. St. Joseph Center provides clients a coordinated and comprehensive web of services designed to make
sure that no one falls through the cracks. Programs
are organized into four pillars of service: Outreach &
Engagement, Housing, Mental Health, and EducaƟ on
& VocaƟ onal Training. Eff orts are designed as integrally related and supporƟ ve of one another to form a seamless conƟ nuum that helps people rebuild their lives.

Please see the SecƟ on 3.b for more direct program
informaƟ on.

2.e - Development Team (Supportive Services Provider)
Abode
Communities
The Terraces at Fourth
Va Lecia Adams Kellum President & CEO
(310) 396-6468 x 308 | [email protected]
204 Hampton Drive, Venice, CA 90291
Dr. Va Lecia Adams Kellum joined St. Joseph Center in 2008. During her tenure, the organizaƟ on has tripled its staff , expanded its range of services, and broadened its geographic reach to encompass all of LA County, with major service centers on the Westside, in South Los Angeles, and in Downtown LA.

Under Adams Kellum’s leadership, St. Joseph Center has become a trailblazer in deploying integrated, mulƟ disciplinary teams to help the most vulnerable homeless individuals obtain and maintain stable housing. Since the incepƟ on of LA County’s Coordinated Entry System, St. Joseph Center has served as the lead agency for both Individuals and Families on LA’s Westside.

Adams Kellum is a member of Abode Community Housing’s board of directors, providing vital insight to the long-term ownership and operaƟ on of supporƟ ve housing. She also serves on the California Department of Housing and Community Development’s No Place Like Home Program Advisory CommiƩ ee, a role appointed to by former Governor Jerry Brown. She is the former Chair of the Westside CoaliƟ on and represented the Westside on the Los Angeles Homeless Services Authority CoordinaƟ ng Council for many years. She currently serves on the board of directors for Tarzana Treatment Center, located in the San Fernando Valley.

She received her B.A. from the University of Southern California and earned an M.A. from Ball State University before compleƟ ng her Ph.D. at Stanford University. Throughout her doctoral program, she examined the factors that create stress in ethnic minority youth, such as poverty, academic underachievement, and family dynamics.

St. Joseph Center | Supportive Services Provider (cont’d)

Abode Communities | The Terraces at Fourth
7,345
residents
served
37 aff ordable
housing properƟ es
98%
occupancy
rate
Abode Communities |Property Management
Abode CommuniƟ es began professionally managing its aff ordable mulƟ family residenƟ al and mixed-use developments in 1998 in an eff ort to support long-term housing retenƟ on and improve the quality of life for low-income residents. Today, the organizaƟ on’s professionally trained and dedicated property management staff members go above and beyond to foster residenƟ al developments to become pillars within each community by maintaining properƟ es as vibrant, connected spaces that support residents’ emoƟ onal, physical and fi nancial ability to thrive.

With a porƞ olio-wide occupancy rate higher than 98%, we off er a wide range of services that play a vital role to ensure mulƟ family residenƟ al porƞ olios remain fi scally solvent and in compliance with rent restricƟ ons and regulaƟ ons from mulƟ ple funding sources such as the Community Development Commission of the County of Los Angeles, City of Downey, California Tax Credit AllocaƟ on CommiƩ ee, California Department of Housing & Community Development, and the U.S.

Department of Housing & Urban Development to name a few.

Services include, and are not limited to, markeƟ ng and leasing; screening and selecƟ ng tenants, collaboraƟ ng with Coordinated Entry System leads and/or local municipaliƟ es; processing and collecƟ ng rent; managing potenƟ al legal disputes and providing liƟ gaƟ on advice; managing the property’s fi nancial feasibility; maintaining and repairing assets; performance compliance inspecƟ ons; and preparing regulatory compliance reports.

2.e - Development Team (Property Manager)
Rolland CurƟ s Gardens, 140 family homes + 6,500 sf health center + 1,500 retail Abode
Communities
The Terraces at Fourth
Jan Peters Senior Vice President, Property & Asset Management (213) 225-2754 | jpeters@abodecommuniƟ es.org
1149 S. Hill Street, Suite 700 Los Angeles, CA 90015
Jan Peters is senior vice president of property and asset management responsible for the oversight and management of Abode CommuniƟ es’ aff ordable residenƟ al porƞ olio.

Peters is an established aff ordable housing management professional with nearly 30 years of property management experience. She is responsible for developing and maintaining property operaƟ on and capital improvement budgets; monitoring fi nancial variance, vacancy and delinquency reports; overseeing and approving legal acƟ ons; responding to Fair Housing concerns; preparing contracts; and supervising, hiring, and training property management staff .

Peters’ tenure in aff ordable housing property management includes serving as execuƟ ve vice president and chief operaƟ ng offi cer of Eden Housing, a posiƟ on she held for more than a decade. She was responsible for the oversight of the organizaƟ on’s residenƟ al porƞ olio consisƟ ng of 5,000 residenƟ al units and 40,000 square feet of commercial space, as well as oversight of the fi nance, human resources, administraƟ on, and resident services departments. Prior to joining Eden Housing, Peters served as president of WNC Management.

She is a licensed real estate broker in the State of California and is past president of the Aff ordable Housing Management AssociaƟ on of Northern California, Nevada, and Hawaii.

She is also co-chair of the NaƟ onal Aff ordable Housing Management AssociaƟ on (NAHMA) CredenƟ al Review Board and is a NaƟ onal Aff ordable Housing Professional – ExecuƟ ve (NAHPe).

Peters earned her Masters of Social Work and Masters of EducaƟ on from Rutgers University, as well as a Bachelor of Arts from Melbourne University.

Abode Communities | Property Management (cont’d)
Abode Communities | The Terraces at Fourth
Cushman and Wakefi eld, Commercial Real Estate Retail Services From urban high streets to suburban centers, retail
parks, and factory outlets, Cushman & Wakefi eld
retail specialists leverage industry experience
and a global perspecƟ ve to market properƟ es,
align brands to opportuniƟ es, and provide clients
with intelligence for smart decision making. The
organizaƟ on uƟ lizes a data-driven, analyƟ cal
approach to understand the unique relaƟ onship
that a client’s brand has with customers—and
how the right Ɵ ming and real estate strategy can
elevate that relaƟ onship. For retail owners and
investors, Cushman and Wakefi eld understands
the nuances and complexiƟ es of all property types,
from urban high street to super regional malls —
and use this knowledge to serve as a long-term
partner to its clients.

Led by MaƩ hew Fainchtein at Cushman & Wakefi eld, the team’s experience in Santa Monica includes nine commercial deals, including the likes of Apple and innisfree cosmeƟ cs on 3rd Street Promenade, and Malin + Goetz on Montana.

2.e - Development Team (Commercial Broker)
MaƩ hew Fainchtein Senior Director Retail Services
(310) 595-2234| maƩ [email protected]
10250 ConstellaƟ on Boulevard, Suite 2200 | Los Angeles, CA 90067 MaƩ hew Fainchtein is a Senior Director with Cushman & Wakefi eld, where he specializes on both landlord and tenant representaƟ on for urban and high-street retail in the greater Los Angeles and Southern California markets.

Fainchtein represents an impressive list of landlord clients and properƟ es throughout Los Angeles including: Town & Country redevelopment across from 1437 3rd Street Promenade in Santa Monica, 909 Ocean Front Walk in Venice, Culver Public Market in Culver City, The Grove and Original Farmers Market, MGM Place and 235 N. Canon Drive. (Formerly Bouchon) in Beverly Hills, 8784 Beverly Blvd., 8378-8384 & 8379 Melrose Ave., and Robertson Plaza in West Hollywood, PacMutual, The Herald Examiner and The Garey Building in Downtown, and. MaƩ hew consistently collaborates with some of LA’s largest property owners and developers in helping them develop and execute their vision with success.

Abode Communities | The Terraces at Fourth
AMJ Construction Management
With a mission to deliver high-caliber construcƟ on
management services and a passion to support development throughout the State of California, the professionals at AMJ have collaborated on over seventy-fi ve (75) residenƟ al projects, including Pacifi c Landing, Vista Ballona, LiƩ le Berkeley, and Greenway Meadows, all in predevelopment
or under construcƟ on in the City of Santa Monica. AMJ
and Abode CommuniƟ es have a long-standing relaƟ onship, having collaborated on 10 aff ordable/supporƟ ve housing developments, some of which are currently in the pipeline.

AMJ provides value-added services to its clients by creaƟ ng a unique, trust-based partnership throughout the enƟ re construcƟ on process. Its pledge is to establish lasƟ ng relaƟ onships with clients by exceeding their expectaƟ ons through excepƟ onal performance.

AMJ’s experƟ se comes as a result of over 70 years of combined experience spanning the architectural, engineering, and construcƟ on/project management industries, highlighƟ ng work in aff ordable and supporƟ ve housing. The organizaƟ on’s clients include public agencies, private corporaƟ ons, and nonprofi t organizaƟ ons.

The professionals at AMJ are well-versed with managing mulƟ ple project types on fi xed budgets and Ɵ ght construcƟ on schedules, and each scope of service is customized to fi t client need.

2.e - Development Team (Construction Manager)
Jack Wickersham Principal
(213) 392-0972 | [email protected]
7474 N. Figueroa Street, Suite 150, Los Angeles, CA 90041 Jack Wickersham is a dedicated construcƟ on manager with over 30 years in the engineering, construcƟ on, and project management of commercial, industrial and residenƟ al projects. His extensive experience includes more than 30 aff ordable and supporƟ ve housing developments for a wide range of nonprofi t aff ordable housing providers. He is parƟ cularly skilled at managing costs, overseeing construcƟ on acƟ viƟ es, and implemenƟ ng project controls.

Wickersham earned a Master of Science in Mechanical and Aerospace Engineering from the University of Delaware and a Bachelor of Science in Mechanical Engineering from University of Delaware. He is a member of the ConstrucƟ on Management AssociaƟ on of American and Southern California AssociaƟ on for Nonprofi t Housing.

Development and
Services Concept 3
Abode
Communities
The Terraces at Fourth

3.a - Vision and Summary of Uses
Abode CommuniƟ es’ vision for The Terraces at Fourth transforms an obsolete parking structure into an arts and cultural desƟ naƟ on that emphasizes community connecƟ vity and contributes to the City of Santa Monica’s goal of an inclusive Downtown neighborhood. Abode CommuniƟ es’ proposal balances the City’s objecƟ ve to maximize aff ordable housing, provide nonprofi t space, and meet the community’s desire for unique retail experiences. The development program off ers 8,600 square feet of commercial space intended for independent retailers; 3,500 square feet of fl exible workshop nonprofi t space; and 107 units of service-enhanced aff ordable and supporƟ ve housing. The Terraces at Fourth off ers a unique and forward-looking mixed-use concept that capitalizes on this valuable City-owned property to deliver a lasƟ ng space for community connecƟ vity and exchange, while also providing stable homes and wrap-around services for Santa Monica’s most vulnerable residents.

While the ulƟ mate design will be informed by an extensive community outreach process and partnership with the City of Santa Monica, Abode CommuniƟ es|Architecture envisions a modern design that celebrates the dynamic arts and cultural focus of the development while complemenƟ ng the local architecture adjacent to the site.

Architectural details along the pedestrian corridor will have a high-level of transparency and interest, suggesƟ ng public architecture that invites people to experience the groundfl oor retail. Details at the upper residenƟ al levels will evoke domesƟ c architecture, disƟ nguishing the uses and provide greater visual interest along both the 4th Street and 3rd Court facades. Consistent with Abode CommuniƟ es’ organizaƟ on-wide commitment to environmental sustainability, The Terraces at Fourth will achieve a minimum LEED Gold raƟ ng through the use of sustainable and durable construcƟ on materials and systems, including both photovoltaic- and solar thermal-systems at the roof level.

Ground Floor Concept
The ground fl oor of The Terraces at Fourth features a commercial program guided by principles of fl exibility, accessibility, and compaƟ bility. Informed by discussions with acƟ ve Downtown Santa Monica commercial developers and brokers, as well as Downtown Santa Monica, Inc. (“DTSM”), the ground fl oor program is designed to adapt to the constantly changing retail landscape, which is paramount to ensuring long-term fi nancial sustainability. This special focus on market resiliency recognizes Downtown as a dynamic and thriving creaƟ ve and cultural center. Proposed ground fl oor commercial uses, which are further detailed below, include an independent bookstore and café, local-serving bouƟ que retail, and nonprofi t workshop space. By providing a thoughƞ ul combinaƟ on of retail spaces, The Terraces at Fourth prioriƟ zes opportuniƟ es for community connecƟ vity, local entrepreneurship, an acƟ ve pedestrian corridor, and unique retail experiences for desƟ naƟ on visitors.

To ensure the retail spaces are accessible to local, independent businesses, the commercial pro forma assumes below-market lease rates as described in greater detail in SecƟ on 5 – Financing Strategy.

3. Development and Services Concept
Abode
Communities
The Terraces at Fourth
The third criƟ cal consideraƟ on in programming the ground fl oor space is sensiƟ vity to the needs of the residents living in the housing above, in parƟ cular avoiding commercial uses that incorporate elements incompaƟ ble with the unique social service needs of supporƟ ve housing residents.

Transforming the site into a desƟ naƟ on for arts and cultural exchange begins at the sidewalk with pedestrian-friendly urban design elements to acƟ vate the site along 4th Street. Subtle setbacks in strategic places along the façade create inviƟ ng entrances into the development and create opportuniƟ es for publicly accessible outdoor paƟ o space.

Glass storefront along the façade promotes visibility and piques passersby’s interest.

An interior atrium equipped with tables and lounging chairs serves as a central focal point for the commercial program. High ceilings with light wells from the deck above fi ll the environment with natural light. An inviƟ ng passageway connects 4th Street to 3rd Court. A separate open-air vesƟ bule on 4th Street provides a welcoming entrance for the residenƟ al component with a visually cohesive character while maintaining separaƟ on from the commercial uses.

Bookstore and Café. A 7,100 square foot independent bookstore and café anchors the ground fl oor retail. A modern independent bookseller is an acƟ vator for the enƟ re block, with a wide variety of book inventory and non-book merchandise, as well as robust events programming. Situated prominently at the northeast corner of the bookstore, a community café energizes 4th Street and invites people into the atrium, a central interior court with lounge space for residents and community members to mingle and refl ect.

Glass sliding walls separate the café and bookstore spaces, providing the fl exibility for the two spaces to be operated in tandem by a single tenant or with greater separaƟ on of uses. Vroman’s Bookstore/Book Soup has expressed interest in bringing its Book Soup concept to The Terraces at Fourth, providing guidance to the development team regarding the size and operaƟ onal elements of the space.

BouƟ que Retail. An addiƟ onal 1,480 square foot retail space off ers a home for a local apparel or specialty store. This space also has the potenƟ al to be demised for two separate tenants desiring a smaller footprint. In keeping with the vision of a desƟ naƟ on for arts and culture, The Terraces at Fourth will target its tenant outreach to local entrepreneurs with an emphasis on arts and craŌ s or other cultural wares. Glass storefronts and high ceilings will be warm and inviƟ ng to passersby. The space will be designed and developed with infrastructure in place to accommodate food service for maximum fl exibility of future uses.

The retail off erings along 4th Street will draw visitors further into the atrium via addiƟ onal pop-up spaces for nascent arƟ sts and entrepreneurs working to build a market for their products. These spaces will be leased at no-cost on a rotaƟ ng basis. Abode CommuniƟ es anƟ cipates coordinaƟ ng with the City of Santa Monica’s Economic Development Division and DTSM to establish a local vendor outreach program, as well as explore opportuniƟ es to engage with nonprofi t social enterprise businesses through supporƟ ve services partner St. Joseph Center.

3.a - Vision and Summary of Uses (cont’d)
Abode
Communities
The Terraces at Fourth
The Workshop. Moving west through the atrium, visitors reach the Workshop, 3,500 square feet that serves as a fl exible workshop space for nonprofi t arts organizaƟ ons.

Based on discussions with Santa Monica Cultural Aff airs regarding space needs among local nonprofi t arts organizaƟ ons, the Workshop is anƟ cipated to be used for fl exible co-working, performance and rehearsal, gallery space for nonprofi t groups, or other programmed acƟ viƟ es and outreach.

The development team will explore this space’s ulƟ mate programming and design through further collaboraƟ on with Santa Monica Cultural Aff airs, Santa Monica Arts Commission, and local nonprofi t organizaƟ ons during the community engagement process. Garagestyle roll-up doors frame the space, adding textural interest to its façade and allowing for maximum fl exibility of uses. The locaƟ on of this dynamic use along 3rd Court will acƟ vate the alley, with opportuniƟ es to open the garage doors and host exhibiƟ on nights and other events along the 3rd Court frontage, building on the momentum from adjacent uses like The Gallery and Westside Comedy Theater.

Public Art. As a desƟ naƟ on for arts and cultural exchange, The Terraces at Fourth incorporates an engaging public art plan featuring several areas for potenƟ al installaƟ ons.

These opportuniƟ es include a mural at the upper level of the 3rd Court elevaƟ on that would be visible from the Promenade, as well as a collaboraƟ on between architect and arƟ st to incorporate a piece that defi nes the residenƟ al entrance along 4th Street. In addiƟ on to a permanent installaƟ on, the ground fl oor atrium and passageway would include rotaƟ ng displays of local arƟ sts, with the potenƟ al to give parƟ cular visibility for the works of low-income and formerly-homeless arƟ sts. The development team plans to heavily engage local stakeholders in the decisions around style, placement, and content maƩ er during the community engagement process.

Basement Level. A subterranean parking garage off ering 52 parking stalls for property management and services staff , as well as some residents, is provided at the basement level with vehicular access from the alley. A secure bike room featuring 149 long-term spaces, encourages mode-shiŌ by residents and staff , as well as employees of the commercial spaces. While Abode CommuniƟ es has included basement-level parking for staff and for the larger households occupying the two bedroom units, the site’s superior access to high-quality transit and provision of transit passes to residents will further encourage reduced car ownership and usage.

Housing Concept
ResidenƟ al Dwellings. The Terraces at Fourth off ers 107 aff ordable homes for individuals and families earning between 30% and 80% of Area Median Income. FiŌ y-one (51) studio, 22 one-bedroom/one-bathroom, and 34 two-bedroom/one-bathroom units are arranged in a fi ve-story u-shaped structure. Units are organized in double- and single-loaded corridors to provide density and aff ord views into the central courtyard and beyond the Downtown neighborhood. The building massing includes setbacks along all facades that meet or exceed Downtown Community Plan requirements to create modulaƟ on and present a scale appropriate for this vibrant transit-rich, Downtown locaƟ on.

3.a - Vision and Summary of Uses (cont’d)
Abode
Communities
The Terraces at Fourth
The inclusion of two-bedroom units in the housing concept addresses the need for familysized units idenƟfi ed in the Downtown Community Plan, as well as input from Abode CommuniƟ es’ supporƟ ve services partner St. Joseph Center (SJC). While individuals are oŌ en the most visible face of homelessness in Santa Monica, SJC has noted a growing need to serve families that are homeless or at-risk of homelessness and oŌ en go under counted. Sixty (60) of the units will be set-aside as supporƟ ve housing for individuals and families currently experiencing or at-risk of homelessness, while the remaining 47 will feature aff ordable family housing and one manager’s unit.

Many of the elements within The Terraces at Fourth are designed to meet the unique needs of each resident demographic, including furnished units, full kitchens in every unit, and private and public outdoor spaces to create comfortable, livable spaces that promote connecƟ vity.

Each individual unit is appointed with spacious living areas and state-of-the art kitchens and bathrooms. Private balconies for the one- and two-bedroom units connect interior and outdoor spaces. Units on the west side of the development have balconies overlooking the alley, ensuring the development engages 3rd Court. Units are oriented to maximize natural light and venƟ laƟ on. Careful selecƟ on of environmentally sustainable materials and systems will minimize the development’s environmental impact, all the while promoƟ ng healthy and cost-effi cient living environment for residents.

AmeniƟ es. The Terraces at Fourth off ers ample ameniƟ es for its residents to meet their everyday needs, as well as off er opportuniƟ es for residents to interact and create a supporƟ ve community. Residents and guests enter The Terraces at Fourth via a welcoming open-air vesƟ bule located along 4th Street that will be disƟ nct in architectural character from the commercial spaces, providing privacy and security. A main stair leads from the vesƟ bule up to the second fl oor common area and residences. Beyond the vesƟ bule is the property management offi ce, a residenƟ al elevator lobby, and St. Joseph Center’s supporƟ ve services offi ces. Two elevators connect the ground fl oor to the ameniƟ es and dwelling units on fl oors two (2) through six (6) above the podium. An exit-only passageway separates the property management and supporƟ ve services spaces and leads directly into the atrium, encouraging residents to enjoy the ground fl oor commercial off erings while restricƟ ng access to secure residenƟ al areas by non-residents.

In addiƟ on to a comprehensive on-site supporƟ ve services program described in the supporƟ ve services secƟ on below, other residenƟ al ameniƟ es include secure bicycle storage, a 2,130 square foot resident center, and laundry rooms and trash chutes on every residenƟ al fl oor.

Open Space. The Terraces at Fourth provides more than 10,000 square feet of common open space in three disƟ nct areas of the residenƟ al component. A 7,415 square foot central courtyard forms the heart of residenƟ al community life. Strategically-placed landscape, outdoor furniture, and other physical elements defi ne zones within the large open space. At the southern end of the courtyard, closest to the two-bedroom family units, is an outdoor play area that will invite children and families to connect with their neighbors. The center of the courtyard is a fl exible mulƟ -purpose space supporƟ ng a spectrum of acƟ viƟ es such as parƟ es, fi tness, or simply a place for aŌ ernoon picnics or evening gatherings.

3.a - Vision and Summary of Uses (cont’d)
Abode
Communities
The Terraces at Fourth
A podium-level terrace overlooking 4th Street provides an opportunity for residents to engage with the energy of one of Downtown Santa Monica’s most dynamic streetscapes.

Adjacent to the resident center, the synergy between the two spaces creates an opportunity for indoor/outdoor uses and can accommodate larger community gatherings and celebraƟ ons. A third open space at the sixth fl oor provides a more inƟ mate outdoor gathering area. Green walls and a calm paleƩ e of naƟ ve planƟ ngs and seaƟ ng nooks invite residents to connect in smaller groups or enjoy a contemplaƟ ve moment.

Development Program
Commercial Program Gross SF
Bookstore (incl. back of house) 6,078
Café 1,045
BouƟ que 1,480
Workshop 3,500
Atrium and CirculaƟ on 4,475
Maintenance/Mechanical/Trash 1,831
Subtotal 18,409
ResidenƟ al Units Gross SF
Studio (51 units) 23,154
1-Bedroom (22 units) 13,508
2-Bedroom (34 units) 31,688
Subtotal (107 units) 68,350
ResidenƟ al AmeniƟ es Gross SF
Resident Center 2,128
Property Management 1,054
SupporƟ ve Services 2,125
Laundry & Trash 1,570
CirculaƟ on/Mechanical/Etc. 25,417
Subtotal 32,294
Open Space Gross SF
Central Courtyard 7,415
Fourth Street Terrace (Podium Level) 570
Sixth-Floor Terrace 2,050
Subtotal 10,035
Parking (Basement)
ResidenƟ al & Staff Parking (52 spaces) 28,332
Bicycle Parking / Storage (149 spaces) 1,688
Subtotal 30,000
Total Gross Square Feet 159,088

3.a - Vision and Summary of Uses (cont’d)
Abode
Communities
The Terraces at Fourth
MeeƟ ng the City of Santa Monica’s ObjecƟ ves and CondiƟ ons Abode CommuniƟ es’ proposal for The Terraces at Fourth delivers on the City of Santa Monica’s housing and ground-fl oor objecƟ ves with:
 A total of 107 units of housing aff ordable to low-income individuals and families that will be leased up from referrals from the City-maintained list of prospecƟ ve tenants;
 A signifi cant commitment to providing permanent supporƟ ve housing by allocaƟ ng 60 units for individuals and families experiencing homelessness;  A robust supporƟ ve services program to address the specifi c needs of the diverse resident populaƟ on
 Ownership and operaƟ on by a nonprofi t, mission-based organizaƟ on with a 51- year history of serving the community;
 A commitment to the long-term sustainability of the development as high-quality, service-enriched and supporƟ ve housing;
 Thoughƞ ul and responsive decisions regarding design and development program elements to maximize cost-eff ecƟ veness and reduce the need for addiƟ onal investment from the City Housing Trust Fund;
 A ground-fl oor commercial program that both inspires and incubates Santa Monica’s future makers and entrepreneurs, bringing unique off erings, including an independent bookstore, to Downtown; and
 Inclusion of a fl exible workshop that will become an asset for local nonprofi t arts organizaƟ ons.

3.b - Supportive Services
With more than half of the units reserved for individuals and families transiƟ oning from homelessness and the remainder targeƟ ng low-income households, the on-site resident services program provides a wide range of support that can be tailored to individual needs to help residents remain stable in their housing as they work to achieve/maintain economic stability.

For higher acuity residents requiring a greater level of individualized services, the development includes four offi ces for case managers and other staff , as well as mulƟ ple indoor and outdoor spaces appropriate for small group gatherings. The case management offi ces are intenƟ onally located separate from property management offi ces, with the main gathering spaces promoƟ ng resident privacy as they interact with case managers.

Located at the second level, the 2,130 square foot resident center is the focal point of Abode CommuniƟ es’ signature resident services program, Beyond Homes. Glass storefront encloses the 4th Street façade of the resident center, creaƟ ng visual appeal for pedestrian passersby and bringing ample natural light into the space. A private offi ce for Beyond Homes staff is located adjacent to the resident center.

3.a - Vision and Summary of Uses (cont’d)
Abode
Communities
The Terraces at Fourth
Target PopulaƟ on
The Terraces at Fourth will address the housing and social service needs of a mixedincome populaƟ on including individuals and families experiencing homeless, households at-risk of homelessness, and households earning below 80% Area Median Income. With this in mind, Abode CommuniƟ es proposes a comprehensive on-site supporƟ ve service program that includes both Abode CommuniƟ es’ signature resident services program, Beyond Homes, as well as supporƟ ve service program off ered by Venice-based St. Joseph Center (SJC).

Social Service Philosophy
Abode CommuniƟ es’ and St. Joseph Center’s collecƟ ve philosophy is anchored by an integrated, coordinated service approach aimed to empower residents to remain stable in their homes, become independent, and live healthy, rewarding lives. UƟ lizing a “housing fi rst” and “harm reducƟ on” model to support individuals as they transiƟ on into housing, the social service team will provide compassionate, individualized, complimentary services designed to help residents meet their self-determined goals.

Service Needs
The transformaƟ on of communiƟ es cannot rely on the producƟ on of aff ordable housing alone. Low-income individuals and families, like those who will live at The Terraces at Fourth, oŌ en face unique challenges that inhibit their ability to remain stable in their housing and achieve economic stability. One single crisis event – a job loss, a medical event, a car accident, loss of childcare – oŌ en has catastrophic consequences that result in housing instability. When families and individuals are forced with no other choice than to live with family and friends, overcrowding occurs. When these same families and individuals have no safety net, they become homeless.

Similarly, families experiencing homelessness and chronically homeless individuals who transiƟ on to permanent housing at The Terraces at Fourth also require a rich array of supporƟ ve services to help them maintain stable housing, achieve life goals, and increase independence, self-determinaƟ on, and self-suffi ciency.

The proposed service plan is criƟ cal to prevenƟ ng homelessness, stabilizing residents in place, and breaking the cycle of long-term poverty for generaƟ ons to come. These services, substanƟ ated by the MacArthur and Goldshirsh FoundaƟ ons, improve youth academic performance and aƩ ainment; increase family self-suffi ciency; diminish family health challenges; reduce psychological stress; improve parenƟ ng skills; reduce substance abuse; and generate signifi cant cost savings to public systems by decreasing use of homeless shelters, hospitals, emergency rooms, and prisons.

3.b - Supportive Services (cont’d)
Abode
Communities
The Terraces at Fourth
Provider Roles
Abode CommuniƟ es will provide Beyond Homes to the enƟ re resident populaƟ on, while St. Joseph Center will provide supporƟ ve services solely to the 60 households reserved for chronically homeless and homeless individuals and families.

Abode CommuniƟ es
Abode CommuniƟ es’ on-site resident services program, Beyond Homes, is a widely successful social service program currently operates at 23 locaƟ ons serving more than 5,300 people throughout Los Angeles County. Beyond Homes was created to help residents remain in their housing as they work to achieve economic stability.

Abode CommuniƟ es’ Vice President of Resident Services oversees service program implementaƟ on during predevelopment to conceptualize the potenƟ al services that may be required at each property, develop service plans, develop relaƟ onships with partner service agencies to provide on- and off -site services, and assist with the idenƟfi caƟ on of service funding, if required.

St. Joseph Center
St. Joseph Center is the Coordinated Entry System (CES) lead, responsible for matching housing opportuniƟ es in SPA 5 where the proposed development project is located.

During the match process, SJC will idenƟ fy viable family and adult applicants who were prioriƟ zed as “high acuity” for permanent supporƟ ve housing resources via the VI-SPDAT and Case Conferencing sessions; coordinate the list with the City of Santa Monica waitlist and Homeless Service Registry; and match applicants based on the eligibility criteria for the available housing units. AddiƟ onally, St. Joseph Center will be responsible for providing supporƟ ve services to the 60 chronically homeless and homeless households living at The Terraces at Fourth.

Program DescripƟ on
Abode CommuniƟ es’ Beyond Homes resident services will be available to all residents living at The Terraces at Fourth, working to break the cycle of familial poverty, prevent homelessness, and empower residents to become economically stable. Services include:
(1) Youth Learning and Leadership: AŌ er-school and summer enrichment program for youth aged 5-15 including homework assistance, computer access, literacy support, and mentoring. For teens and young adults aged 16 – 21, college preparatory and career program advancement including higher educaƟ on planning, admissions/fi nancial assistance support, college/university tours, scholarship access and applicaƟ on assistance, and career counseling.
(2) Adult Capacity Building: Job readiness, fi nancial literacy, credit counseling, parenƟ ng workshops, life skills workshops, computer workshops, and ESL classes. Linkages to publicly available resources, social isolaƟ on prevenƟ on, and empowerment workshops. > more

3.b - Supportive Services (cont’d)
Abode
Communities
The Terraces at Fourth
(3) Community Engagement: AcƟ viƟ es such as resident meeƟ ngs; neighborhood watch meeƟ ngs; resource fairs; beauƟfi caƟ on projects; community gardening; and holiday gatherings.
(4) Housing RetenƟ on: Case management services to address resident needs in Ɵ mes of crisis (e.g. household budgeƟ ng, housekeeping plans, charitable fi nancial assistance, income-eligible uƟ lity programs, food/transportaƟ on assistance, etc.) With more than 100 social service provider partners to complement Beyond Homes’ direct services, all residents enjoy access to an abundant referral system which connect them a wealth of other specialized services not directly off ered by Abode CommuniƟ es.

Beyond Homes’ aŌ er-school program and community-based acƟ viƟ es typically operate from 3:00 to 6:00pm, Monday through Thursday, with case management offi ce hours off ered during regular business hours. The majority of acƟ viƟ es occur within the 2nd fl oor resident center, proposed outdoor communal spaces, and resident services coordinator offi ce located within the resident center.

St. Joseph Center’ will off er and provide linkages to a comprehensive range of supporƟ ve services to help homeless and chronically homeless households maintain housing and increase their ability to live independent, healthy lives. Services may include:

Intensive Case Management
Individualized Service Plans
Money Management
Independent Living Skills
Physical and Mental Health Services
TransportaƟ on Assistance
Response to Mental Health Crisis
EvicƟ on PrevenƟ on and Legal Advocacy
Substance Abuse IntervenƟ ons
Public Health Outreach
Screening and Assessment
Service/Management Team CoordinaƟ on MeeƟ ngs
Integrated Treatment
Benefi ts EducaƟ on, Advocacy, and Enrollment
Job Training
Community IntegraƟ on
EducaƟ on
Peer Support and Advocacy
Housing Placement for IdenƟfi ed Higher Acuity Care
Green EducaƟ on
Linkages and Referrals

3.b - Supportive Services (cont’d)
Abode
Communities
The Terraces at Fourth
All case management services will be provided on-site Monday through Friday from 8:00am to 4:30pm and conducted in private offi ce spaces. RecreaƟ onal or communal acƟ viƟ es will be held in the resident center or outdoor common spaces. If acƟ viƟ es are arranged at an off -site locaƟ on, transportaƟ on will be arranged to ensure maximum opportuniƟ es to parƟ cipate. Any alteraƟ ons or offi ce closures for agency- observed holidays will be posted in advance for residents and property management.

Tenant SelecƟ on Process
Abode CommuniƟ es’ property management team will oversee the leasing and markeƟ ng for The Terraces at Fourth in accordance with Fair Housing laws and governing agency regulaƟ ons, as well as collaborate with SPA 5 CES Lead St. Joseph Center to lease the 60 chronically/formerly homeless individuals and families. In accordance with the requirements of the RFP, all residents will be referred from a City-maintained wait list of prospecƟ ve tenants.

Reasonable AccommodaƟ ons
Both Abode CommuniƟ es and St. Joseph Center staff may assist applicants and residents in making reasonable accommodaƟ on requests to the property management and outside enƟƟ es. Both service providers will work with the property management team to review the request and to secure an accommodaƟ on that will meet the resident’s needs.

EvicƟ on Policy
Abode CommuniƟ es | Property Management will advise the social services providers of any infracƟ ons or noƟ ces that may aff ect tenancy. The case manager and/or resident services coordinator will meet with the resident to discuss these noƟ ces, and develop a plan to address the infracƟ on. The case manager and/or resident service coordinator may refer the resident to other members of his/her service team, if needed. In some cases, intervenƟ on may be required to immediately refer resident for drug treatment or psychiatric hospitalizaƟ on. In most cases, the goal of both the case manager/resident services coordinator is to provide the individualized support needed to prevent resident evicƟ on. In cases of short-term hospitalizaƟ on, the resident may return to their unit upon compleƟ on of treatment. If evicƟ on cannot be avoided, the case manager/resident service coordinator will work to relocate a resident to more suitable housing situaƟ on before the evicƟ on becomes formalized on their record.

3.b - Supportive Services (cont’d)
Abode
Communities
The Terraces at Fourth
Staffi ng
Abode CommuniƟ es’ resident service coordinators are responsible for implemenƟ ng Beyond Homes to meet direct resident need and oversee all program acƟ viƟ es. This work includes engaging residents to idenƟ fy service needs; creaƟ ng local partnerships with nonprofi ts, public agencies, and service-based organizaƟ ons to link residents to in-kind specialized services not off ered by Abode CommuniƟ es; developing aŌ er-school and summer enrichment programming; hiring, training, and managing program leaders; creaƟ ng opportuniƟ es for community and resident engagement; providing one-on-one support to residents in need; collecƟ ng and reporƟ ng quarterly output, outcome, and survey data; and coordinaƟ ng service needs with property management and St. Joseph Center. Program leaders are responsible for the oversight and implementaƟ on of Beyond Homes’ aŌ er-school and summer enrichment acƟ viƟ es serving resident youth.

St. Joseph Center’s program manager is responsible for the developing and implemenƟ ng the service program; supervising ICMS case management personnel; communicaƟ ng and coordinaƟ ng with partner organizaƟ ons; maintaining relaƟ onships with immediate and broader community; ensuring the case management team has appropriate resources; performing quality assurance and compliance with DHS contractual obligaƟ ons; collecƟ ng and reporƟ ng data as needed to saƟ sfy funder requirements; managing data evaluaƟ ons; and ensuring the program’s quality and integrity.

The lead case manager is responsible for assisƟ ng the on-site team management, compleƟ ng ad-hoc reports, performing addiƟ onal administraƟ ve and supervisorial tasks, and providing case management services to homeless and chronically homeless individuals. DuƟ es include outreach and engagement, needs assessments, case management, developing and implemenƟ ng tenant goal plans, coordinaƟ ng services, problem solving, and making both internal and external service referrals.

Case managers are responsible for providing case management services to homeless and chronically homeless families and individuals. DuƟ es include outreach and engagement, needs assessments, case management, developing and implemenƟ ng tenant goal plans, coordinaƟ ng services, problem solving, and making both internal and external service referrals.

Financing Strategy
Abode CommuniƟ es will reinvest its property cash fl ow to provide Beyond Homes, while St. Joseph Center will receive funding from the Los Angeles County Department of Health Services. Please see SecƟ on 5.k for the social service budget and staff allocaƟ on.

3.b - Supportive Services (cont’d)
Abode
Communities
The Terraces at Fourth
Please see the following pages for conceptual site and fl oor plans

3.c - Conceptual Site and Floor Plans

FOURTH STREET ARIZONA AVENUE

PROPOSED PROJECT FUTURE
PLAZA

ARIZONA AVENUE

DISTRICTS
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ŚĞŝŐŚƚĂŶĚĚĞƐŝŐŶ͘
dŚĞ ŽǁŶƚŽǁŶ ĂƌĞĂ ŝƐ ŵĂĚĞ ƵƉ ŽĨ ĚŝīĞƌĞŶƚ
ĐŚĂƌĂĐƚĞƌĂƌĞĂƐǀĂƌǇŝŶŐŝŶ ŽǀĞƌĂůů ĚĞŶƐŝƚǇ͕ůĂŶĚͲ
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ƚŚĞ ďƵŝůĚŝŶŐƐ ĂůŽŶŐ ƚŚĞ ƐƚƌĞĞƚ͘ dŚĞǁĂůŬ ĚŽǁŶ
^ĂŶƚĂDŽŶŝĐĂŽƵůĞǀĂƌĚŽƌƌŝǌŽŶĂǀĞŶƵĞĨƌŽŵ
KĐĞĂŶ ƚŽ >ŝŶĐŽůŶ ƌĞǀĞĂůƐ ĐůĞĂƌůǇ ůĞŐŝďůĞ ͚ůĂǇĞƌƐ͛ ǁŝƚŚ ĚŝƐƟŶĐƚ ĐŚĂƌĂĐƚĞƌ͘ dŚŝƐ ǀĂƌŝĞƚǇ ŝƐ ƌĞŇĞĐƚĞĚ ŝŶ ƚŚĞ WůĂŶ͛Ɛ ƐƚĂŶĚĂƌĚƐ ĂŶĚ ŐƵŝĚĞůŝŶĞƐ͘ ƚ ƚŚĞ ƐĂŵĞƟŵĞ͕ ƚŚĞWĞǆƉĂŶĚƐ ƚŚĞďŽƵŶĚĂƌŝĞƐŽĨ
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ƐƚƌĂƚĞŐŝĞƐ͘
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Community Plan establishes six land-use
ŝƐƚƌŝĐƚƐ͗ >ŝŶĐŽůŶ dƌĂŶƐŝƟŽŶ͕ EĞŝŐŚďŽƌŚŽŽĚ
sŝůůĂŐĞ͕ dƌĂŶƐŝƚ ĚũĂĐĞŶƚ͕ ĂǇƐŝĚĞ ŽŶƐĞƌǀĂƟŽŶ͕
tŝůƐŚŝƌĞ dƌĂŶƐŝƟŽŶ ĂŶĚ KĐĞĂŶ dƌĂŶƐŝƟŽŶ͘ &Žƌ
>ŝŶĐŽůŶdƌĂŶƐŝƟŽŶ;>dͿ
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<
z
Gateway Master
Plan Area

ƐƚĂďůŝƐŚĞĚ>ĂƌŐĞ^ŝƚĞKǀĞƌůĂǇ
Santa Monica Civic Center
Santa Monica Place
Tongva Park
Santa Monica Pier
Christine Emerson Reed Park
Public Library
Palisades Park
SITE
Future
Public
Space
Farmers Market
Vons St. Monica High School
Santa Monica High School
Pedestrian Circulation
Bicycle Routes
Vehicular Circulation
Big Blue Bus Route
Metro Rail
Metro Rail Station
LEGEND
Third Street Promenade Arizona Avenue
Broadway
Santa Monica Boulevard
Colorado Avenue
Wilshire Boulevard
6th Street
5th Street
4th Street
2nd Street
7th Street
Lincoln Boulevard
Area and Zoning Information

THIRD COURT

FOURTH STREET

FIFTH STREET

PROPOSED PROJECT
FUTURE
PLAZA

ARIZONA AVENUE
A
C
B

KEYNOTES
Public Space
Street Frontage Retail
Alley Frontage Commercial
C
ATRIUM

THE GALLERY
to Metro Rail Station to Big Blue Bus and Metro Bus Stop to Metro Bus Stop
B
B
B
A
A

THIRD STREET PROMENADE
Urban Design Concept and Site Plan

THIRD COURT

FOURTH STREET

ARIZONA AVENUE

BOUTIQUE SPACE
CAFE

BOOKSTORE

WORKSHOP AND EXHIBITION SPACE
ATRIUM

THE TERRACES AT FOURTH
1318 Fourth Street
Santa Monica, CA 90401
November 1, 2019
abode communities architecture
1149 South Hill Street, Suite 700
Los Angeles, California 90015
p. 213.629.2702
f. 213.629.6407
www.abodecommunitiesarc.org 5
1 3
2 4
5 6
10 9
7 KEYNOTES
Studio Unit (typical)
1 Bedroom Unit (typical)
2 Bedroom Unit (typical)
Vehicle Entry / Exit
Resident Entry / Exit
Commercial Entry / Exit
Property Line
Property Setback
LEGEND
8 4
7 Bike Parking (3 Short Term)
Light Well to floor below (typical)
Line of Light Well above (typical)
Restroom
Laundry Room
Tot Lot
Roll-up Door (typical)
Trash Room
Maintenance/Mech. Space
Beyond Homes Office

PROPERTY

MANAGEMENT
1,054 SF

WORKSHOP
3,500 SF

BOUTIQUE RETAIL
1,480 SF
CAFE
1,045 SF

BOOKSTORE
6,078 SF
POP-UP
MARKET

THIRD COURT

FOURTH STREET
LOBBY
SJC

SUPPORTIVE

SERVICES
2,125 SF

RESIDENT

VESTIBULE

RAMP TO
GARAGE

RESIDENT
CENTER
2,128 SF
5 6

BACK OF
HOUSE
1 1

GROUND FLOOR SECOND FLOOR
8 3 2
8 8

THE ATRIUM
9 9
9 4
4 4
10 4
7 Ground and Second Floor Plans

BEYOND HOMES
OFFICE

SECOND FLOOR

BEYOND HOMES
OFFICE

SECOND FLOOR
1 3
2 4
5 KEYNOTES
Sixth Floor Terrace
Courtyard below
Laundry Room
Trash Room
Elevator Lobby
4 3 4 3
5 5
1 2 2
FLOORS 3-5 SIXTH FLOOR
Studio Unit (typical)
1 Bedroom Unit (typical)
2 Bedroom Unit (typical)
Property Line
LEGEND
Typical Residential Floor and Sixth Floor Plans

BEYOND HOMES
OFFICE

SECOND FLOOR

BEYOND HOMES
OFFICE

SECOND FLOOR
1 3
2 4
5 6
7 Resident Areas
Vehicle Entry / Exit
Resident Entry / Exit
Property Line

KEYNOTES
LEGEND
1 5
2 6
5 7
5 7

BASEMENT LEVEL ROOF
4 3
Resident Long Term Bicycle Parking
Commercial Long Term Bicycle Parking
Sixth Floor Terrace Below
Podium Courtyard Below
Solar Photovoltaic Panels (typical)
Solar Thermal Hot Water System (typical)
Mechanical Equipment (typical)

RAMP TO
ALLEY
52 VEHICLE STALLS
4 COMMERCIAL
BIKE STALLS 145 RESIDENT

BICYCLE STALLS
Basement Level and Roof Plans

STUDIO ONE BEDROOM TWO BEDROOM

THE TERRACES AT FOURTH
1318 Fourth Street
Santa Monica, CA 90401
November 1, 2019
abode communities architecture
1149 South Hill Street, Suite 700
Los Angeles, California 90015
p. 213.629.2702
f. 213.629.6407
www.abodecommunitiesarc.org 10
Third Court Concept
Abode
Communities
The Terraces at Fourth
As illustrated on the following page, the preliminary schedule of performance for The Terraces at Fourth anƟ cipates construcƟ on compleƟ on in October 2023, with permanent loan conversion by April 2024. The Ɵ meline assumes selecƟ on of a developer by the City of Santa Monica by January 2020 and execuƟ on of an Exclusive NegoƟ aƟ ng Agreement (“ENA”) upon selecƟ on and execuƟ on of a DisposiƟ on and Development Agreement (“DDA”) by October 2020. Community engagement and design work would begin immediately upon execuƟ on of the ENA and conƟ nue through May 2021. EnƟ tlements begin with the AdministraƟ ve Approval (“AA”) submiƩ al in June 2020 once design work has reached 50% SchemaƟ c Design. The schedule assumes mulƟ ple presentaƟ ons to Architectural Review Board (“ARB”), as well as introductory meeƟ ngs with members of the ARB and a preliminary presentaƟ on to the full ARB occurring prior to the compleƟ on of the AA process to idenƟ fy required changes early in the design and enƟ tlements process.

The 20-month construcƟ on period begins in March 2022. MarkeƟ ng of the commercial program would begin in September 2021, six months prior to the start of construcƟ on.

Outreach eff orts would conƟ nue throughout construcƟ on, with an anƟ cipated lease up duraƟ on of 12 to 18 months. ResidenƟ al markeƟ ng and lease up would begin four months prior to construcƟ on compleƟ on in July 2023, with fi nal occupancy achieved by January 2024.

3.d - Preliminary Schedule
8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 RFP
& COMMUNITY ENGAGEMENT
RFP Procurement Process
City of Santa Monica Selection Process
Execute ENA, Execute DDA
& Ground Lease
Community Engagement Process
DESIGN
& ENTITLEMENTS
Entitlement Set
Schematic Design
Development Design
Construction Design
Plan CheckAdministrative Approval Process
Coastal Commission Review Process
Architectural Review Board

FINANCING

LACDA NOFA
Continuum of Care Voucher Commitment
FHLB Affordable Housing Program
HCD Affordable Housing
& Sustainable Communities
HCD Infill Infrastructure Grant
4% LIHTC
& Bond
Secure Tax Credit Investor
Construction Financing Close
Permanent Loan
CONSTRUCTIONLEASE‐UP
Commercial Marketing, Negotiations
& Lease‐Up
Residential Marketing, Lease‐Up
& Tenant Move‐In

CONVERSION TO PERMANENT FINANCING
2024
Abode CommunitiesThe Terraces at Fourth

3.d ‐ Preliminary Schedule of Performance
2019 2020 2021 2022 2023
Community 4Involvement Plan
Abode
Communities
The Terraces at Fourth
Philosophy & Approach to Community Engagement
Abode CommuniƟ es’ approach to community outreach seeks to idenƟ fy and engage community members and key stakeholders to inform the development concept, build community support for a successful enƟ tlements process, and ensure the project becomes an asset for its residents and an amenity for the surrounding community. The development team will foster an atmosphere of mutual respect and appreciaƟ on to encourage the Santa Monica community and future residents to share ideas and concerns to create a successful, collaboraƟ ve planning and design process that generates a responsive and balanced program.

Abode CommuniƟ es’ development team brings a wealth of experience in conducƟ ng meaningful and successful engagement process for all of its projects, oŌ en in collaboraƟ on with public partners. For its La Veranda and Chavez
FickeƩ projects, Abode CommuniƟ es is partnering
with LA Metro to engage the neighborhood in
conceptual planning. The outreach process has
resulted in deepened aff ordability, a refi ned
commercial tenant mix, and expanded space
for community-based organizaƟ ons. In the case
of Rolland CurƟ s Gardens, Abode CommuniƟ es
conducted a six-month parƟ cipatory planning
process, which engaged 550 households, faithbased organizaƟ ons, community organizaƟ ons, and adjacent business owners. The result: unanimous
land use approval from the City of Los Angeles Planning Commission for a project that nearly tripled the site’s housing density and reduced its parking raƟ o to 0.8:1. Individual Abode CommuniƟ es team members assigned to The Terraces at Fourth Street also bring specifi c outreach experience on several development projects within the City of Santa Monica.

IdenƟ fying Stakeholders
Abode CommuniƟ es will begin the community outreach eff ort by working with City of Santa Monica staff to establish an inclusive list of stakeholders from the local community.

These parƟ cipants will each have a disƟ nct and important perspecƟ ve to contribute to the development plan. Stakeholders include and are not limited to:
• Businesses, residents, and property owners within at least 1/4-mile of the site; • Homeless and social service providers, including supporƟ ve service partner St. Joseph Center and their local partners, as well as Santa Monica Cradle to Career; • Neighborhood associaƟ ons including the Downtown Neighborhood AssociaƟ on, Santa Monica Mid City Neighbors, Wilshire Montana Neighborhood CoaliƟ on, and Pico Neighborhood AssociaƟ on;
• Local houses of worship and interfaith organizaƟ ons, such as St. Monica Catholic Community;
• Community and civic organizaƟ ons, including Downtown Santa Monica, Inc., Santa Monica Chamber of Commerce, Santa Monica Forward, Santa Monicans for Renter’s Rights, and Santa Monica Spoke;

4. Community Involvement Plan
Deepened affordability,
successful entitlements
process, adjustments to the
commercial tenant mix, and
expanded amenities for the
surrounding community
Abode
Communities
The Terraces at Fourth 4 - Community Involvement Plan (cont’d) • Arts and culture stakeholders, including Santa Monica Cultural Aff airs and the Arts Commission, Santa Monica Arts FoundaƟ on, Building Bridges, and other nonprofi t arts organizaƟ ons; and
• City, County, and State elected representaƟ ves for the area.

Abode CommuniƟ es will specifi cally seek to engage the future resident populaƟ on by collaboraƟ ng with service organizaƟ ons and other service partners to build relaƟ onships with the organizaƟ ons themselves and the clients they serve. Outreach to these stakeholders will be parƟ cularly important to refi ne the unit mix and aff ordability targets, as well as determine the resident services program and ameniƟ es to meet resident needs.

Abode CommuniƟ es will design its community engagement plan in a way that supports parƟ cipaƟ on by end users, including separate focus group discussions for these parƟ cular populaƟ ons. Abode CommuniƟ es will design these meeƟ ngs to create an environment of trust and clarity around their purpose so as ensure fruiƞ ul discussions.

Methodology and Timeline
Abode CommuniƟ es will employ a variety of
methods to engage stakeholders and community
members in conversaƟ on, including small and large
group meeƟ ngs, pop-up events, and technology as
a means to provide alternaƟ ve ways for to interact
with the development team and stay informed.

Outreach eff orts will be conducted at various Ɵ mes
and locaƟ ons, including weekends and evenings
to allow for maximum parƟ cipaƟ on. Abode
CommuniƟ es will work closely with City to fi nalize
a plan that defi nes the specifi c type, quanƟ ty, and Ɵ ming of these outreach eff orts.

Based on Abode CommuniƟ es’ extensive experience of successful community outreach processes, at minimum the plan would include the following:

Aff ordable Housing 101 Workshop – this workshop is an opportunity to educate the community about the development, describe the fi nancing and operaƟ on of aff ordable housing and who qualifi es, and to highlight the benefi ts to the community at-large. The workshop also provides an opportunity to discuss development parameters required to make aff ordable housing feasible and respond openly to requests for project components that may not fi t within those parameters.

One-on-Ones – these are a series of one-on-one meeƟ ngs with key stakeholders idenƟfi ed above; these meeƟ ngs are meant to be an exchange of ideas where the development and design team will share the vision for the site and directly engage stakeholders to address their prioriƟ es and concerns.

Focus Groups – Abode CommuniƟ es will hold at least four (4) small group meeƟ ngs with a cross secƟ on of stakeholders. Each meeƟ ng will take on a diff erent area of focus and is meant to be a “deep dive” into that subject. The actual focus group topics will be informed by the one-on-one meeƟ ngs and are likely to delve into subjects such as proposed ground fl oor uses, project design, and public art program.

Abode
Communities
The Terraces at Fourth 4 - Community Involvement Plan (cont’d) Pop-Up Events – casual weekend events hosted at the project site or common local gathering places and community events, such as Santa Monica farmer’s market and seasonal community celebraƟ ons off er another opportuniƟ es for community members to connect directly with the development and design teams. HosƟ ng pop-ups at the project site allows stakeholders to beƩ er envision how the project will fi t into the larger fabric of the surrounding community as well.

Project Workshop – this open-house style workshop is the culminaƟ on of all of the outreach eff orts and will include a handful of tables staff ed by Abode CommuniƟ es’ development team experts. At minimum, there is a booth dedicated to each of the following: Project Design Concept; Green Features; Ground Floor Program; Resident and SupporƟ ve Services; Public Art; and Property Management.

In order to create a project that refl ects the neighborhood’s needs and expectaƟ ons, Abode CommuniƟ es will explore several key topics with local stakeholders and community members, including and not limited to:
• Design features that create visual appeal and
aestheƟ c connecƟ vity to the surrounding
Downtown Santa Monica streetscape, are
responsive the Downtown Community Plan,
and enhance the pedestrian experience;
• Unmet local needs that potenƟ ally could
be fi lled by the ground fl oor commercial
program;
• Community uses desired by those who live
and work in the surrounding neighborhood;
• Design features to provide a safe and
welcoming environment for residents and the
community at-large; and
• Design of a public art program to be
incorporated throughout the development.

Open communicaƟ on and maintaining transparency to keep the community informed throughout the process are criƟ cal to ensuring meaningful engagement and building trust. Abode CommuniƟ es will collaborate with the City to determine the best methods for maintaining open and conƟ nuous communicaƟ on, which may include meeƟ ng noƟfi caƟ ons, a project website, emails, printed informaƟ on, and/or maintaining a presence at community events.

Throughout the process, the development team will remain open and responsive to community input, engaging in further conversaƟ on to understand the root cause of concerns, addressing feedback when feasible, and providing respecƞ ul responses when it is not feasible to incorporate requested project adjustments. All communicaƟ ons will be provided in English and Spanish, with a well-qualifi ed and experienced interpreter at each meeƟ ng. TranslaƟ on in other languages will be provided as needed.

Abode
Communities
The Terraces at Fourth 4 - Community Involvement Plan (cont’d) The outreach process will commence immediately upon execuƟ on of the Exclusive NegoƟ aƟ ng Agreement, with primary engagement acƟ viƟ es occurring unƟ l the collaboraƟ vely defi ned project proposal receives enƟ tlement approvals from the City and Coastal Commission. The development team expects to conƟ nue to acƟ vely engage the community throughout construcƟ on and into lease-up with quarterly project updates, thereaŌ er becoming a permanent fi xture in the community.

At the conclusion of the iniƟ al community
outreach process, the development team will
provide City staff with a summary of the major
themes, ideas, and concerns expressed by
stakeholders at the various meeƟ ngs, along
with recommended adjustments to the original
development concept that seek to respond
to this input in a balanced and feasible way.

The development team will share the revised,
responsive project at the project workshop noted
above.

Through this process and Abode CommuniƟ es’
strong history and experience of collaboraƟ on
with partners, the project will be programmed
and designed to meet community needs. All
communicaƟ ons will be Ɵ mely, concise, and
easily understood by a variety of stakeholders.

InformaƟ onal materials will include fact sheets,
frequently asked quesƟ ons (FAQs), newsleƩ ers
and fl yers, websites/social media, and kiosk(s)
at central neighborhood sites and/or events.

The development team will manage all levels of
media relaƟ ons and looks forward to discussing
those and other roles and responsibiliƟ es with the City at project startup.

In addiƟ on, Abode CommuniƟ es development and resident services staff , as well as its supporƟ ve service provider partner, St. Joseph Center, work conƟ nuously to build partnerships with public agencies, local service providers, and community organizaƟ ons that can be resources for tenants. As early as possible, the team members and their affi liates idenƟ fy and establish relaƟ onships with local resources so it can quickly and eff ecƟ vely support tenant needs, around transportaƟ on, healthcare, health educaƟ on, legal services, fi nancial literacy, and educaƟ on, as examples.

Once construcƟ on of The Terraces at Fourth Street begins, the development team will become a neighbor in the community, working early on to establish posiƟ ve and producƟ ve relaƟ onships to support the development’s success and sustainability. As it does with each new residenƟ al community placed-in-service, Abode CommuniƟ es will pursue honest and collaboraƟ ve relaƟ onships with community-based organizaƟ ons, local community stakeholders and other strategic partners from the iniƟ aƟ on of the project into and throughout operaƟ ons.

Financing Strategy 5
Abode
Communities
The Terraces at Fourth
The redevelopment of 1318 4th Street presents a unique opportunity to bring a highquality mixed-use aff ordable housing and commercial development to Downtown Santa Monica. With this in mind, Abode CommuniƟ es has taken a strategic approach to fi nancing The Terraces at Fourth, seeking to leverage the value of the City’s property into a public benefi t project that will provide equitable housing, community-scale retail, and fl exible creaƟ ve workshop space.

The total projected development cost of The Terraces at Fourth is approximately $79.6 million (including the assumed value of the land). By uƟ lizing a 4% low-income housing tax credit (LIHTC) and tax-exempt bond structure, matched with tried-and-true capital funding sources commonly found in aff ordable housing developments throughout the region, and the fl exibility aff orded by a ground lease partnership with the City of Santa Monica, Abode CommuniƟ es is proposing an effi cient, viable fi nancing strategy that will meet the City’s stated goals for resident populaƟ on, housing density, and ground fl oor uses. By leveraging Federal, State, and local capital sources, as well as partnering with the City on a belowmarket ground lease, The Terraces will require no addiƟ onal funding from the City of Santa Monica Housing Trust Fund.

Project Development Costs & Capital Structure
Hard and soŌ costs were informed by Abode CommuniƟ es’ extensive experience construcƟ ng mixed-use and service-enhanced aff ordable and supporƟ ve housing projects of a similar scale and complexity throughout the Los Angeles County market, including the recently completed Rolland CurƟ s Gardens (winner of the 2019 SCANPH MulƟ family Project of the year), which features a 6,500 sf Federally Qualifi ed Health Center and 1,500 sf of community-serving retail; and La Veranda and Chavez FickeƩ , two adjacent projects currently in predevelopment totaling 137 units (half of which will be SupporƟ ve Housing) and 33,000 sf commercial retail featuring a neighborhood grocery store and space for local entrepreneurs. Wherever appropriate, actual costs and general contractor bids from other comparable projects were used to determine development budget assumpƟ ons.

AMJ ConstrucƟ on Management, a fi rm with over 70 years of construcƟ on experience, provided a conceptual esƟ mate of hard costs, which assume payment of commercial prevailing wages. In the past four years, AMJ has provided consulƟ ng services on four aff ordable housing projects in various stages of development within the City of Santa Monica and is well versed in construcƟ on cost trends within the local market.

Financing costs and terms are based on Abode CommuniƟ es’ previous experience and confi rmed by the California Housing Partnership, a trusted aff ordable housing fi nancial consultant and advisor that has helped its nonprofi t and government partners leverage over $18 billion for the producƟ on of 70,000 homes over the past 30 years.

The total developer fee included in the project budget is approximately $7.3 million in accordance with the California Tax Credit AllocaƟ on CommiƩ ee (CTCAC) guidelines for projects uƟ lizing 4% LIHTC.

5. Financing Strategy
Abode
Communities
The Terraces at Fourth
Although the actual amount of developer fee payable to Abode CommuniƟ es from project capital would be $1,880,739 due to limitaƟ ons imposed by other applicable funding sources (State of California Department of Housing and Community Development, County of Los Angeles, and City of Santa Monica), the full $7.3 million fi gure is included as part of project basis to generate the maximum amount of LIHTC equity.

The upfront paid developer fee of $1,880,739 is based on the City of Santa Monica Housing Trust Fund (HTF) Guidelines for a project between 31 and 50 units for Fiscal Year 2017-18, although Abode CommuniƟ es understands this fee would be negoƟ able due to the larger project size. Approximately $619,000 in deferred developer fee will be payable from operaƟ ng cash fl ow, in accordance with the Los Angeles County Development Authority funding guidelines, which caps total developer fee at $2.5 million.

For a statement of conceptual construcƟ on- and permanent-period sources and uses for the proposed scope of development, please see Table 5.1 at the end of secƟ on.

For an expanded and annotated development pro-forma, please see Table 5.2 at the end of this secƟ on.

Financing Strategy
The project development budget includes capital sources selected to minimize fi nancing delays and maximize project feasibility and community benefi ts. The fi nancing for the residenƟ al porƟ on of The Terraces is structured with 4% LIHTC equity paired with convenƟ onal debt via tax-exempt bond fi nancing for the construcƟ on and permanent loans, and a combinaƟ on of local and State “soŌ ” fi nancing that includes capital from the Los Angeles County Development Authority (LACDA); two capital funding programs administered by the California Department of Housing and Community Development (HCD), including the Aff ordable Housing and Sustainable CommuniƟ es (AHSC) and Infi ll Infrastructure Grant (IIG) programs; and a grant from the Federal Home Loan Bank Aff ordable Housing Program (AHP).

Although Abode CommuniƟ es has extensive experience developing aff ordable housing uƟ lizing the 9% LIHTC program, the proposal for The Terraces strategically uƟ lizes a 4% LIHTC equity structure due to the material benefi ts it provides, including a less compeƟƟ ve and more fl exible applicaƟ on process, no cap on the amount of tax credits the project can generate, and compaƟ bility with the AHSC program, which provides further benefi t to the City of Santa Monica through a paired grant for Sustainable TransportaƟ on Infrastructure (“STI”) projects. In addiƟ on to a $19.8 million capital loan to fund the aff ordable housing component, AHSC funding for The Terraces adds $6.5 million in the form of a grant to the City or other administering agency for planned sustainable transportaƟ on and mobility infrastructure projects to be idenƟfi ed by Santa Monica stakeholders. > more
5 - Financing Strategy (cont’d)
Abode
Communities
The Terraces at Fourth
Examples of eligible STI projects are:
• Improvements idenƟfi ed in the City’s Pedestrian AcƟ on Plan to help the City achieve its Vision Zero 8 to 80 and Safe Routes to Schools community goals, as well as other pedestrian improvements
• Improvements idenƟfi ed in the City’s Bike AcƟ on Plan, including new, expanded or improved bikeways in areas sƟ ll in need of connecƟ vity • Permanent vanpool access for aff ordable housing residents • Transit stop improvements, including shaded bus stops, accessibility enhancements, pedestrian scale lighƟ ng, and relocaƟ on of transit stops • Bicycle sharing program infrastructure and fl eet addiƟ ons • Enhanced or expanded fl eet for Big Blue Bus service
The Terraces project would be highly compeƟƟ ve for AHSC funding due to certain program applicaƟ on metrics, such as proximity to high quality transit (the Downtown Santa Monica Expo Line StaƟ on), and proposed aff ordability restricƟ ons and housing density. Abode CommuniƟ es has a proven track record securing AHSC program funding, as summarized in SecƟ on 6.d - Funding Source Experience, as well as the other proposed funding sources, and is confi dent in the success of this fi nancing strategy.

The fi nancing sources described above are suffi cient to cover all development costs of the project, both residenƟ al and commercial porƟ ons. As described in SecƟ on 3.

Development and Services Concept, Abode CommuniƟ es anƟ cipates leasing the ground level commercial space to community-scale independent retailers, arƟ sans, and nonprofi t organizaƟ ons. Abode CommuniƟ es’ experience with commercial uses in mixed-use developments with aff ordable housing is that lending partners typically will not allow the associated commercial revenue to be used to underwrite/support proposed mortgage debt unless the space is pre-leased to a naƟ onal credit tenant. At this early conceptual phase, the fi nancing plan for the commercial uses demonstrates feasibility uƟ lizing only the prorated commercial share of the ground lease and LIHTC equity. Should Abode CommuniƟ es’ lending partners ulƟ mately allow commercial revenues from The Terraces at Fourth to be leveraged for a permanent commercial loan, the proposed operaƟ ng assumpƟ ons would support an approximately $2.1 million loan, assuming a fullyamorƟ zed 15-year term, 6% interest and 1.25 debt service coverage.

Pro Forma AssumpƟ ons
For a full 55-year summary of cash-fl ow and associated underwriƟ ng assumpƟ ons, including residenƟ al and commercial income, operaƟ ng expenses, resident service expenses, debt service payments, proposed ground lease payments, and fee payments to the tax credit partnership, please see Table 5.3 at the end of this secƟ on..

ResidenƟ al AssumpƟ ons
The Terraces at Fourth will provide 106 units of aff ordable housing for individuals and families with incomes between 30% and 80% of Area Median Income (AMI) and one manager unit. Sixty (60) units will be set-aside for Permanent SupporƟ ve Housing (PSH) for individuals and families experiencing homelessness and with incomes no higher than 30% Area Median Income.
> more
5 - Financing Strategy (cont’d)
Abode
Communities
The Terraces at Fourth
The project underwriƟ ng assumes project-based rental operaƟ ng subsidy for the 60 PSH units provided from the City of Santa Monica’s ConƟ nuum of Care (CoC) voucher allocaƟ on, with rental payment standards determined by the 2020 Department of Housing and Urban Development Fair Market Rent calculaƟ on for the Los Angeles-Long Beach-Glendale Metro area.

For a summary of the proposed unit mix, AMI levels, and projected gross rents, please see Table 5.4 at the end of this secƟ on.

At stabilized residenƟ al occupancy, The Terraces assumes a residenƟ al operaƟ ng expense of approximately $6,500 per unit per annum (PUPA) (exclusive of resident services, property taxes, and required reserve deposits). The $6,500 PUPA fi gure represents a blended average of higher expenses for the supporƟ ve housing units than the low-income units and includes expenses for administraƟ on, accounƟ ng, uƟ liƟ es, operaƟ ons and maintenance, management fees, and staff expenses for an on-site property manager and maintenance and janitorial staff . The PUPA fi gures are based on Abode CommuniƟ es’ Property Management experience underwriƟ ng and operaƟ ng properƟ es with similar profi les.

The project underwriƟ ng of the residenƟ al permanent loan assumes a 1.15 debt service coverage raƟ o and annual debt service payment of $534,749.

Commercial AssumpƟ ons
In an eff ort to achieve the vision for The Terraces at Fourth as a desƟ naƟ on for arts and cultural connecƟ ons anchored by local-serving, unique retail off erings, lease income is projected at rates well below averages for the Downtown market. The commercial operaƟ ng cash fl ow assumes triple net (NNN) lease charges for the bookstore, café, and bouƟ que retail, including common area maintenance and real estate taxes charged on a pro-rata share to each commercial occupant, and a full service gross (FSG) lease for the nonprofi t workshop.

No lease income expense reimbursement is assumed for the pop-up market space located within the atrium. Abode CommuniƟ es has engaged with real estate brokers at Cushman & Wakefi eld to confi rm below-market lease rate assumpƟ ons and the anƟ cipated commercial needs and characterisƟ cs of the area. Cushman & Wakefi eld has demonstrated recent success in represenƟ ng both tenants and developers in Downtown Santa Monica along 4th Street and the 3rd Street Promenade, as well as signifi cant experience markeƟ ng and leasing high-profi le mixed-use developments throughout the Los Angeles County market.

For a summary of the proposed commercial uses and lease rates, please see Table 5.5 at the end of this secƟ on. At stabilized commercial occupancy, The Terraces at Fourth assumes a commercial operaƟ ng expense of approximately $1.10 per square foot per month.

UnderwriƟ ng Terms
ConstrucƟ on fi nancing assumes a 4.82% interest rate and standard lender transacƟ on costs and bond-related expenses (assuming an issuance by the California Housing Financing Agency). The residenƟ al permanent loan uƟ lizes a 5.27% interest rate, 35-year term amorƟ zaƟ on and a 1.15 debt service coverage raƟ o.
> more
5 - Financing Strategy (cont’d)
Abode
Communities
The Terraces at Fourth
The fi nancing plan assumes tax credit equity pricing of $0.98 per dollar of LIHTC allocated, and a credit rate of 3.17%. Despite the downward trend in current tax credit market post tax reform, Abode CommuniƟ es conƟ nues to command top LIHTC pricing. In June 2018, the Westmont Vista project received a $1,354,063 Federal Tax Credit Award for 39 aff ordable homes for families and TransiƟ on Age Youth in Los Angeles, resulƟ ng in a $13.7 million equity investment from Wells Fargo at a price of $1.015 per credit. Because the market remains volaƟ le, Abode CommuniƟ es conservaƟ vely underwrites each of its projects at $0.95 to $0.98 per credit. The organizaƟ on’s ability to hold this high pricing with its investor partners highlights the strength of its long-term relaƟ onship with key investors.

Local Funding and Ground Lease Terms
As currently proposed, no capital funding from the City of Santa Monica Housing Trust Fund will be required to fi nance The Terraces at Fourth.

The fi nancing plan includes a 65-year below-market ground lease with the City of Santa Monica. The land provides ample addiƟ onal subsidy to the project given the high cost of land in the Santa Monica market area and Abode CommuniƟ es recognizes this rare opportunity to leverage a valuable City-owned asset for the producƟ on of aff ordable housing and below-market commercial retail opportuniƟ es.

Abode CommuniƟ es has assumed a ground lease value of $12.45 million ($415 per square foot), based upon comparable land transacƟ ons in the market area. The proposed ground lease would be structured as a note accruing 3% simple interest annually. The ground lease note contemplates payments to the City of Santa Monica in three Ɵ ers:

1. Annual above-the-line guaranteed payments of $15,000

2. Annual below-the-line payments from residual cash fl ow with the City receiving 15% of residenƟ al residual receipts aŌ er payment of Deferred Developer Fee and Partnership and Asset Management Fees. The total projected value of residenƟ al residuals over the 65-year ground lease term is approximately $5.1 million.

3. Annual below-the-line payments from commercial cash fl ow with the City receiving 25% of commercial net cash fl ow. The total projected value of commercial net cash fl ow over the term of the ground lease is approximately $13 million.

Abode CommuniƟ es has successfully negoƟ ated and executed ground leases with the County of Los Angeles, LA County Metropolitan TransportaƟ on Authority, and Los Angeles Unifi ed School District for the long-term ownership and operaƟ on of mulƟ family and mixeduse communiƟ es. Abode CommuniƟ es looks forward to further discussing the terms and condiƟ ons of a ground lease arrangement with the City of Santa Monica.

City ObligaƟ ons & Financial ConƟ ngencies
In addiƟ on to the ground lease terms proposed above, Abode CommuniƟ es also requests the City of Santa Monica consider the following fi nancial obligaƟ on and conƟ ngency to help ensure the success of the project.
> more
5 - Financing Strategy (cont’d)
Abode
Communities
The Terraces at Fourth
The Terraces exceeds the City of Santa Monica’s stated goal for the inclusion of permanent supporƟ ve housing by providing 60 units set aside for individuals and families transiƟ oning from of homelessness. To operate an aff ordable housing development at a standard of service that ensures the well-being of its supporƟ ve housing residents and the successful integraƟ on of the property into the surrounding neighborhood, The Terraces will depend on a guaranteed source of rental operaƟ ng subsidy.

The project underwriƟ ng assumes an allocaƟ on of project-based ConƟ nuum of Care (“CoC”) vouchers commiƩ ed for an iniƟ al contract term of 15 years and renewed regularly upon expiraƟ on. Commitment of CoC subsidy will be required early in the funding Ɵ meline to ensure compeƟƟ veness for subsequent capital funding applicaƟ ons such as LACDA and AHSC. If CoC vouchers are unavailable, Abode CommuniƟ es would work with the City to idenƟ fy an alternate source of operaƟ ng subsidy such as Project-Based SecƟ on 8 or the DHS Flexible Housing Subsidy Pool.

Financing Timeline
Abode CommuniƟ es esƟ mates securing the necessary project funding in approximately 20 months, from fi rst funding applicaƟ on to close of construcƟ on fi nancing. The fi nancing Ɵ meline is carefully calibrated to align with the project design and enƟ tlement schedules, with criƟ cal milestones for both informing the Ɵ ming to apply for and secure certain funding commitments (such as LACDA and AHSC project capital). For a detailed graphical representaƟ on of the fi nancing Ɵ meline, please see SecƟ on 3.d - Development Schedule.

Resident Services Budget and Sources
Resident services at The Terraces will be provided on-site, at-will, and free of cost to all 106 of the restricted aff ordable units, with addiƟ onal targeted, specialized supporƟ ve services for the 60 units set aside for individuals and families transiƟ oning from homelessness.

Abode CommuniƟ es will provide its well-established Beyond Homes Services program, which delivers fl exible programming adjustable to each resident’s need. Case management and supporƟ ve services for the development’s higher acuity residents will be provided via a partnership with St. Joseph Center. (See SecƟ on 3.b - SupporƟ ve Services, for a full descripƟ on of the services to be provided and details on the partnership.) For a summary of the services budget and funding sources, please see Table 5.6 at the end of this secƟ on. 5 - Financing Strategy (cont’d)
Abode Communities
The Terraces at Fourth
TABLE 5.1 - Conceptual Construction & Permanent Period Sources and Uses CONSTRUCTION SOURCES Residential Commercial Total
Construction Loan $45,134,712 $3,948,462 $49,083,174
Ground Lease Note $11,058,748 $1,391,252 $12,450,000
LA County Development Authority $7,000,000 $0 $7,000,000 FHLB Affordable Housing Program $1,500,000 $0 $1,500,000 LP Equity - Federal $2,121,314 $146,934 $2,268,248
GP Equity $100 $0 $100
Deferred Costs $7,262,652 $777 $7,263,429
Total Construction Financing $74,077,526 $5,487,424 $79,564,951 Total Development Costs $74,077,526 $5,487,424 $79,564,951 PERMANENT SOURCES Residential Commercial Total
Permanent Loan (includes rental subsidy) $8,535,200 $0 $8,535,200 Ground Lease Note $11,058,748 $1,391,252 $12,450,000
LA County Development Authority $7,000,000 $0 $7,000,000 Affordable Housing & Sustainable Communities $19,775,479 $0 $19,775,479 Infill Infrastructure Grant Program $2,176,000 $0 $2,176,000 FHLB Affordable Housing Program $1,500,000 $0 $1,500,000 LP Equity - Federal $18,586,304 $4,096,172 $22,682,476
Deferred Developer Fee $619,261 $0 $619,261
GP Equity $4,826,535 $0 $4,826,535
Total Permanent Financing $74,077,526 $5,487,424 $79,564,951 Total Development Costs $74,077,526 $5,487,424 $79,564,951 PROJECT USES Residential Commercial Total
Acquisition $11,058,748 $1,391,252 $12,450,000
Hard Costs $46,238,524 $3,559,811 $49,798,335
Architecture & Engineering $2,663,067 $184,458 $2,847,526 Permits & Fees $389,252 $26,962 $416,214
Financing Costs $4,107,653 $267,551 $4,375,205
Legal $113,162 $7,838 $121,000
Reserves $1,013,158 $0 $1,013,158
Reports / Studies $30,704 $1,296 $32,000
Related Development Costs $8,463,257 $48,257 $8,511,514 Total Project Uses $74,077,526 $5,487,424 $79,564,951
Abode Communities
Item Project Cost Commercial Total Comments & Assumptions

ACQUISITION
Land Value $11,058,748 $1,391,252 $12,450,000 Based on sales comparables in the Santa Monica market area, assumes $415/sf CONSTRUCTION Construction costs were confirmed by AMJ Construction Management Off Site Improvements $96,000 $0 $96,000
Parking $4,559,181 $0 $4,559,181 All parking costs are associated with project residential uses Structures $31,575,602 $2,540,706 $34,116,308 Construction costs assume Commercial Prevailing Wage Overhead & Profit $5,801,589 $401,849 $6,203,438 Includes OH&P (6%), General Requirements (8%), Insurance (1%), and Bond (1%) Commercial Tenant Improvements $0 $325,915 $325,915 Tenant improvement allowance average of $27/sf, based on Cushman & Wakefield advisors TOTAL CONSTRUCTION COSTS $42,032,372 $3,268,470 $45,300,842 CONSTRUCTION CONTINGENCY $4,206,152 $291,340 $4,497,493 10% of Total Construction Costs

ARCHITECTURE & DESIGN
Architecture $2,604,149 $180,377 $2,784,526 Abode Communities Architecture fee of 5.6% of construction costs plus expenses Engineering $115,032 $7,968 $123,000
Permitting & Fees $389,252 $26,962 $416,214 City of Santa Monica estimated plan check & permitting fees

CONSTRUCTION FINANCING
Predevelopment Interest & Expenses $151,667 $10,505 $162,172 Assumes 24 month predevelopment term Construction Loan Interest $2,876,322 $199,229 $3,075,552 Assumes 26 month construction loan term Fees, Transaction Costs & Bond Expenses $658,349 $33,415 $691,764 Predevelopment includes application fees and deposits Insurance $140,283 $9,717 $150,000 Course of construction insurance Closing Costs $120,969 $8,379 $129,347 Includes title, escrow and recording fees

PERMANENT FINANCING
Fees, Transaction & Closing Costs $91,046 $6,306 $97,352

SYNDICATION
TCAC Fees $69,018 $0 $69,018 Includes application fee and deposit Consultant, Administration & Audit $95,333 $0 $95,333 Includes financial consultant fees for underwriting and funding applications LEGAL FEES $163,162 $7,838 $171,000 Includes construction and permanent loan closing, and formation of entities

SOFT COSTS
Reports & Consultants $105,522 $6,478 $112,000 Includes appraisal, market study, entitlement consulting Marketing $56,196 $0 $56,196 Includes fees and personnel costs for lease-up and marketing units Construction Management & Monitoring $228,755 $15,845 $244,600 Includes construction management fee, geotech monitoring, construction estimates, and testing Furnishings $238,500 $0 $238,500 Furnishings for supportive housing units, community room, resident services offices Soft Cost Contingency $314,655 $21,795 $336,450 4% of eligible soft costs

RESERVES
Operating Reserve $308,337 $0 $308,337 Assumes three months of debt service and operating expenses Rental Subsidy Transition Reserve $704,821 $0 $704,821 Equal to one year of Continuum of Care subsidy loss in year 16, as required by HCD

DEVELOPER EXPENSES
Administration & Accounting $22,352 $1,548 $23,900
Developer Fee $7,326,535 $0 $7,326,535 See Section 5. Financing Strategy for developer fee calculation TOTAL DEVELOPMENT COSTS $74,077,526 $5,487,424 $79,564,951 The Terraces at Fourth
TABLE 5.2 - Annotated Development Proforma
Abode Communities
The Terraces at Fourth $ 695,409
TABLE 5.3 - 55-Year Operating & Cash Flow Projection PAGE 1 OF 3 RESIDENTIAL CASH FLOW Factor Trend 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 Gross Residential Income 2.50% 1,063,032 1,089,608 1,116,848 1,144,769 1,173,388 1,202,723 1,232,791 1,263,611 1,295,201 1,327,581 1,360,771 1,394,790 1,429,660 1,465,401 1,502,036 1,539,587 1,578,077 1,617,529 1,657,967 Miscellaneous Income (laundry) $42.00 PUPA 2.50% 4,494 4,606 4,722 4,840 4,961 5,085 5,212 5,342 5,476 5,612 5,753 5,897 6,044 6,195 6,350 6,509 6,671 6,838 7,009 Vacancy Rate 7.4% (78,817) (80,788) (82,807) (84,878) (87,000) (89,175) (91,404) (93,689) (96,031) (98,432) (100,893) (103,415) (106,001) (108,651) (111,367) (114,151) (117,005) (119,930) (122,928) Continuum of Care Voucher Subsidy Y 2.50% 625,680 641,322 657,355 673,789 690,634 707,899 725,597 743,737 762,330 781,389 800,923 820,946 841,470 862,507 884,069 906,171 928,825 952,046 975,847 Vacancy Rate (subsidized units) 10.00% (62,568) (64,132) (65,736) (67,379) (69,063) (70,790) (72,560) (74,374) (76,233) (78,139) (80,092) (82,095) (84,147) (86,251) (88,407) (90,617) (92,883) (95,205) (97,585) EFFECTIVE GROSS INCOME 1,551,821 1,590,616 1,630,382 1,671,141 1,712,920 1,755,743 1,799,636 1,844,627 1,890,743 1,938,011 1,986,462 2,036,123 2,087,026 2,139,202 2,192,682 2,247,499 2,303,686 2,361,279 2,420,311 Residential Operating Expenses $6,529 PUPA 3.50% (698,600) (723,051) (748,358) (774,550) (801,660) (829,718) (858,758) (888,814) (919,923) (952,120) (985,444) (1,019,935) (1,055,633) (1,092,580) (1,130,820) (1,170,399) (1,211,363) (1,253,760) (1,297,642) Property Tax - DT SM Zone 2 Assessment 3.50% (26,047) (26,958) (27,902) (28,878) (29,889) (30,935) (32,018) (33,139) (34,298) (35,499) (36,741) (38,027) (39,358) (40,736) (42,161) (43,637) (45,164) (46,745) (48,381) Beyond Homes Resident Services $500 per unit 3.50% (53,500) (55,373) (57,311) (59,316) (61,392) (63,541) (65,765) (68,067) (70,449) (72,915) (75,467) (78,108) (80,842) (83,672) (86,600) (89,631) (92,768) (96,015) (99,376) Replacement Reserve $500 PUPA $500 (53,500) (53,500) (53,500) (53,500) (53,500) (53,500) (53,500) (53,500) (53,500) (53,500) (53,500) (53,500) (53,500) (53,500) (53,500) (53,500) (53,500) (53,500) (53,500) HCD Required Annual Payment 0.42% simple int (83,057) (83,057) (83,057) (83,057) (83,057) (83,057) (83,057) (83,057) (83,057) (83,057) (83,057) (83,057) (83,057) (83,057) (83,057) (83,057) (83,057) (83,057) (83,057) LACDA Annual Admin Fee $7,150 ($7,150) ($7,150) ($7,150) ($7,150) ($7,150) ($7,150) ($7,150) ($7,150) ($7,150) ($7,150) ($7,150) ($7,150) ($7,150) ($7,150) ($7,150) ($7,150) ($7,150) ($7,150) ($7,150) Ground Lease Annual Payment $15,000 per annum Initial Base Amount (15,000) (15,000) (15,000) (15,000) (15,000) (15,000) (15,000) (15,000) (15,000) (15,000) (15,000) (15,000) (15,000) (15,000) (15,000) ($15,000) ($15,000) ($15,000) ($15,000) NET OPERATING INCOME 614,967 626,527 638,105 649,689 661,272 672,842 684,388 695,900 707,365 718,770 730,102 741,346 752,486 763,508 774,393 785,125 795,684 806,051 816,205 Debt Service (534,749) (534,749) (534,749) (534,749) (534,749) (534,749) (534,749) (534,749) (534,749) (534,749) (534,749) (534,749) (534,749) (534,749) (534,749) (534,749) (534,749) (534,749) (534,749) Debt Service Coverage Ratio 1.15 1.17 1.19 1.21 1.24 1.26 1.28 1.30 1.32 1.34 1.37 1.39 1.41 1.43 1.45 1.47 1.49 1.51 1.53 NET CASH FLOW 80,218 91,778 103,355 114,940 126,522 138,093 149,639 161,151 172,616 184,021 195,353 206,597 217,737 228,759 239,644 250,376 260,935 271,302 281,456 COMMERCIAL CASH FLOW Factor Trend 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 Bookstore $3.50 psf / month 2.50% 255,276 261,658 268,199 274,904 281,777 288,821 296,042 303,443 311,029 318,805 326,775 334,944 343,318 351,901 360,698 369,716 378,959 388,433 398,143 Café $4.00 psf / month 2.50% 50,160 51,414 52,699 54,017 55,367 56,751 58,170 59,624 61,115 62,643 64,209 65,814 67,460 69,146 70,875 72,647 74,463 76,324 78,232 Boutique $4.00 psf / month 2.50% 71,040 72,816 74,636 76,502 78,415 80,375 82,385 84,444 86,555 88,719 90,937 93,211 95,541 97,929 100,378 102,887 105,459 108,096 110,798 Workshop (FSG) $1.75 psf / month 2.50% 73,500 75,338 77,221 79,151 81,130 83,159 85,237 87,368 89,553 91,791 94,086 96,438 98,849 101,321 103,854 106,450 109,111 111,839 114,635 Gross Commercial Income 2.50% 449,976 461,225 472,756 484,575 496,689 509,107 521,834 534,880 548,252 561,958 576,007 590,408 605,168 620,297 635,804 651,699 667,992 684,692 701,809 Vacancy Rate 15% (67,496) (69,184) (70,913) (72,686) (74,503) (76,366) (78,275) (80,232) (82,238) (84,294) (86,401) (88,561) (90,775) (93,045) (95,371) (97,755) (100,199) (102,704) (105,271) EFFECTIVE GROSS INCOME 382,480 392,042 401,843 411,889 422,186 432,741 443,559 454,648 466,014 477,665 489,606 501,846 514,393 527,252 540,434 553,945 567,793 581,988 596,538 Commercial OpEx $1.10 psf / month 3.50% (243,355) (251,872) (260,688) (269,812) (279,255) (289,029) (299,145) (309,615) (320,452) (331,668) (343,276) (355,291) (367,726) (380,596) (393,917) (407,704) (421,974) (436,743) (452,029) Retail OpEx Reimbursement (NNN) 85% 206,852 214,091 221,585 229,340 237,367 245,675 254,273 263,173 272,384 281,918 291,785 301,997 312,567 323,507 334,830 346,549 358,678 371,232 384,225 NET OPERATING INCOME 345,976 354,261 362,739 371,417 380,298 389,386 398,687 408,206 417,946 427,914 438,115 448,553 459,234 470,163 481,346 492,789 504,497 516,476 528,733 NET CASH FLOW 345,976 354,261 362,739 371,417 380,298 389,386 398,687 408,206 417,946 427,914 438,115 448,553 459,234 470,163 481,346 492,789 504,497 516,476 528,733 DISTRIBUTION OF RESIDENTIAL CASH FLOW Factor Trend 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 Net Residential Cash Flow 80,218 91,778 103,355 114,940 126,522 138,093 149,639 161,151 172,616 184,021 195,353 206,597 217,737 228,759 239,644 250,376 260,935 271,302 281,456 LP Asset Management Fee $3,000 per annum 3.50% (3,000) (3,105) (3,214) (3,326) (3,443) (3,563) (3,688) (3,817) (3,950) (4,089) (4,232) (4,380) (4,533) (4,692) (4,856) (5,026) (5,202) (5,384) (5,572) Deferred Developer Fee $619,261 0.00% (77,218) (88,673) (100,142) (111,614) (123,080) (118,534) - - - - - - - - - 0 0 0 0 Partnership Management Fee $12,000 per annum 3.50% - - - - - (15,995) (77,358) (15,267) (15,802) (16,355) (16,927) (17,520) (18,133) (18,767) (19,424) (20,104) (20,808) (21,536) (22,290) Residual Receipt - Ground Lease Note 15% share - - - - - - (10,025) (20,763) (22,341) (23,906) (25,458) (26,993) (28,509) (30,004) (31,475) (32,919) (34,334) (35,716) (37,062) Residual Receipt - LACDA 9% share - - - - - - (6,346) (13,142) (14,141) (15,132) (16,114) (17,086) (18,046) (18,992) (19,923) (20,837) (21,733) (22,607) (23,460) Residual Receipt - AHSC 26% share - - - - - - (17,927) (37,128) (39,950) (42,750) (45,525) (48,269) (50,981) (53,654) (56,284) (58,867) (61,396) (63,868) (66,275) Residual Receipt - Limited Partnership 50% share - - - - - - (34,297) (71,034) (76,432) (81,789) (87,097) (92,349) (97,536) (102,650) (107,682) (112,623) (117,463) (122,191) (126,797) 100%
DISTRIBUTION OF COMMERCIAL CASH FLOW Factor Trend 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 Net Commercial Cash Flow 345,976 354,261 362,739 371,417 380,298 389,386 398,687 408,206 417,946 427,914 438,115 448,553 459,234 470,163 481,346 492,789 504,497 516,476 528,733 Residual Receipt - Ground Lease Note 25% share (86,494) (88,565) (90,685) (92,854) (95,074) (97,347) (99,672) (102,051) (104,487) (106,979) (109,529) (112,138) (114,808) (117,541) (120,337) (123,197) (126,124) (129,119) (132,183) Residual Receipt - Limited Partnership 75% share (259,482) (265,696) (272,055) (278,563) (285,223) (292,040) (299,015) (306,154) (313,460) (320,936) (328,586) (336,415) (344,425) (352,622) (361,010) (369,592) (378,373) (387,357) (396,550) Abode Communities
The Terraces at Fourth
TABLE 5.3 - 55-Year Operating & Cash Flow Projection PAGE 2 OF 3 RESIDENTIAL CASH FLOW Factor Trend 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 Gross Residential Income 2.50% 1,699,416 1,741,902 1,785,449 1,830,085 1,875,838 1,922,734 1,970,802 2,020,072 2,070,574 2,122,338 2,175,397 2,229,781 2,285,526 2,342,664 2,401,231 2,461,262 2,522,793 2,585,863 2,650,509 Miscellaneous Income (laundry) $42.00 PUPA 2.50% 7,184 7,364 7,548 7,737 7,930 8,128 8,332 8,540 8,753 8,972 9,197 9,426 9,662 9,904 10,151 10,405 10,665 10,932 11,205 Vacancy Rate 7.4% (126,001) (129,151) (132,380) (135,690) (139,082) (142,559) (146,123) (149,776) (153,520) (157,358) (161,292) (165,325) (169,458) (173,694) (178,037) (182,488) (187,050) (191,726) (196,519) Continuum of Care Voucher Subsidy Y 2.50% 1,000,243 1,025,250 1,050,881 1,077,153 1,104,082 1,131,684 1,159,976 1,188,975 1,218,700 1,249,167 1,280,396 1,312,406 1,345,216 1,378,847 1,413,318 1,448,651 1,484,867 1,521,989 1,560,038 Vacancy Rate (subsidized units) 10.00% (100,024) (102,525) (105,088) (107,715) (110,408) (113,168) (115,998) (118,898) (121,870) (124,917) (128,040) (131,241) (134,522) (137,885) (141,332) (144,865) (148,487) (152,199) (156,004) EFFECTIVE GROSS INCOME 2,480,818 2,542,839 2,606,410 2,671,570 2,738,359 2,806,818 2,876,989 2,948,913 3,022,636 3,098,202 3,175,657 3,255,049 3,336,425 3,419,836 3,505,331 3,592,965 3,682,789 3,774,859 3,869,230 Residential Operating Expenses $6,529 PUPA 3.50% (1,343,059) (1,390,067) (1,438,719) (1,489,074) (1,541,192) (1,595,133) (1,650,963) (1,708,747) (1,768,553) (1,830,452) (1,894,518) (1,960,826) (2,029,455) (2,100,486) (2,174,003) (2,250,093) (2,328,846) (2,410,356) (2,494,718) Property Tax - DT SM Zone 2 Assessment 3.50% (50,075) (51,827) (53,641) (55,519) (57,462) (59,473) (61,554) (63,709) (65,939) (68,246) (70,635) (73,107) (75,666) (78,314) (81,055) (83,892) (86,829) (89,868) (93,013) Beyond Homes Resident Services $500 per unit 3.50% (102,854) (106,454) (110,180) (114,036) (118,027) (122,158) (126,434) (130,859) (135,439) (140,179) (145,085) (150,163) (155,419) (160,859) (166,489) (172,316) (178,347) (184,589) (191,050) Replacement Reserve $500 PUPA $500 (53,500) (53,500) (53,500) (53,500) (53,500) (53,500) (53,500) (53,500) (53,500) (53,500) (53,500) (53,500) (53,500) (53,500) (53,500) (53,500) (53,500) (53,500) (53,500) HCD Required Annual Payment 0.42% simple int (83,057) (83,057) (83,057) (83,057) (83,057) (83,057) (83,057) (83,057) (83,057) (83,057) (83,057) 0 0 0 0 0 0 0 0 LACDA Annual Admin Fee $7,150 ($7,150) ($7,150) ($7,150) ($7,150) ($7,150) ($7,150) ($7,150) ($7,150) ($7,150) ($7,150) ($7,150) ($7,150) ($7,150) ($7,150) ($7,150) ($7,150) ($7,150) ($7,150) ($7,150) Ground Lease Annual Payment $15,000 per annum Initial Base Amount ($15,000) ($15,000) ($15,000) ($15,000) ($15,000) ($15,000) ($15,000) ($15,000) ($15,000) ($15,000) ($15,000) ($15,000) ($15,000) ($15,000) ($15,000) ($15,000) ($15,000) ($15,000) ($15,000) NET OPERATING INCOME 826,124 835,784 845,163 854,235 862,972 871,347 879,331 886,892 893,999 900,617 906,712 995,302 1,000,235 1,004,526 1,008,134 1,011,013 1,013,117 1,014,396 1,014,799 Debt Service (534,749) (534,749) (534,749) (534,749) (534,749) (534,749) (534,749) (534,749) (534,749) (534,749) (534,749) (534,749) (534,749) (534,749) (534,749) (534,749) 0 0 0 Debt Service Coverage Ratio 1.54 1.56 1.58 1.60 1.61 1.63 1.64 1.66 1.67 1.68 1.70 1.86 1.87 1.88 1.89 1.89 0.00 0.00 0.00 NET CASH FLOW 291,374 301,035 310,414 319,486 328,223 336,598 344,582 352,143 359,250 365,868 371,963 460,553 465,486 469,777 473,385 476,264 1,013,117 1,014,396 1,014,799 COMMERCIAL CASH FLOW Factor Trend 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 Bookstore $3.50 psf / month 2.50% 408,097 418,299 428,757 439,476 450,463 461,724 473,267 485,099 497,227 509,657 522,399 535,459 548,845 562,566 576,630 591,046 605,822 620,968 636,492 Café $4.00 psf / month 2.50% 80,188 82,193 84,248 86,354 88,513 90,726 92,994 95,319 97,702 100,144 102,648 105,214 107,844 110,540 113,304 116,137 119,040 122,016 125,066 Boutique $4.00 psf / month 2.50% 113,568 116,407 119,317 122,300 125,358 128,492 131,704 134,997 138,372 141,831 145,377 149,011 152,736 156,555 160,469 164,480 168,592 172,807 177,127 Workshop (FSG) $1.75 psf / month 2.50% 117,501 120,438 123,449 126,535 129,699 132,941 136,265 139,672 143,163 146,742 150,411 154,171 158,025 161,976 166,026 170,176 174,431 178,791 183,261 Gross Commercial Income 2.50% 719,354 737,338 755,772 774,666 794,032 813,883 834,230 855,086 876,463 898,375 920,834 943,855 967,451 991,638 1,016,429 1,041,839 1,067,885 1,094,583 1,121,947 Vacancy Rate 15% (107,903) (110,601) (113,366) (116,200) (119,105) (122,082) (125,135) (128,263) (131,469) (134,756) (138,125) (141,578) (145,118) (148,746) (152,464) (156,276) (160,183) (164,187) (168,292) EFFECTIVE GROSS INCOME 611,451 626,737 642,406 658,466 674,928 691,801 709,096 726,823 744,994 763,619 782,709 802,277 822,334 842,892 863,964 885,563 907,703 930,395 953,655 Commercial OpEx $1.10 psf / month 3.50% (467,850) (484,225) (501,173) (518,714) (536,869) (555,659) (575,107) (595,236) (616,069) (637,632) (659,949) (683,047) (706,954) (731,697) (757,306) (783,812) (811,245) (839,639) (869,026) Retail OpEx Reimbursement (NNN) 85% 397,673 411,591 425,997 440,907 456,338 472,310 488,841 505,951 523,659 541,987 560,956 580,590 600,911 621,942 643,710 666,240 689,559 713,693 738,672 NET OPERATING INCOME 541,274 554,104 567,230 580,659 594,397 608,452 622,830 637,538 652,583 667,974 683,717 699,820 716,291 733,138 750,368 767,992 786,016 804,449 823,301 NET CASH FLOW 541,274 554,104 567,230 580,659 594,397 608,452 622,830 637,538 652,583 667,974 683,717 699,820 716,291 733,138 750,368 767,992 786,016 804,449 823,301 DISTRIBUTION OF RESIDENTIAL CASH FLOW Factor Trend 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 Net Residential Cash Flow 291,374 301,035 310,414 319,486 328,223 336,598 344,582 352,143 359,250 365,868 371,963 460,553 465,486 469,777 473,385 476,264 1,013,117 1,014,396 1,014,799 LP Asset Management Fee $3,000 per annum 3.50% (5,768) (5,969) (6,178) (6,395) (6,618) (6,850) (7,090) (7,338) (7,595) (7,861) (8,136) (8,420) (8,715) (9,020) (9,336) (9,663) (10,001) (10,351) (10,713) Deferred Developer Fee $619,261 0.00% 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Partnership Management Fee $12,000 per annum 3.50% (23,070) (23,877) (24,713) (25,578) (26,473) (27,400) (28,359) (29,352) (30,379) (31,442) (32,543) (33,682) (34,860) (36,080) (37,343) (38,650) (40,003) (41,403) (42,852) Residual Receipt - Ground Lease Note 15% share (38,369) (39,634) (40,852) (42,019) (43,133) (44,187) (45,179) (46,103) (46,954) (47,727) (48,416) (61,156) (61,661) (62,065) (62,362) (62,544) (140,756) (140,688) (140,482) Residual Receipt - LACDA 9% share (24,287) (25,087) (25,858) (26,597) (27,302) (27,970) (28,598) (29,182) (29,721) (30,210) (30,647) (38,710) (39,030) (39,286) (39,474) (39,589) (89,096) (89,053) (88,923) Residual Receipt - AHSC 26% share (68,612) (70,873) (73,052) (75,140) (77,131) (79,017) (80,790) (82,442) (83,964) (85,346) (86,579) (109,360) (110,264) (110,987) (111,517) (111,842) (251,704) (251,580) (251,212) Residual Receipt - Limited Partnership 50% share (131,268) (135,594) (139,761) (143,756) (147,566) (151,174) (154,567) (157,727) (160,638) (163,283) (165,642) (209,225) (210,955) (212,338) (213,353) (213,976) (481,557) (481,321) (480,617) 100%
DISTRIBUTION OF COMMERCIAL CASH FLOW Factor Trend 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 Net Commercial Cash Flow 541,274 554,104 567,230 580,659 594,397 608,452 622,830 637,538 652,583 667,974 683,717 699,820 716,291 733,138 750,368 767,992 786,016 804,449 823,301 Residual Receipt - Ground Lease Note 25% share (135,318) (138,526) (141,807) (145,165) (148,599) (152,113) (155,707) (159,384) (163,146) (166,993) (170,929) (174,955) (179,073) (183,284) (187,592) (191,998) (196,504) (201,112) (205,825) Residual Receipt - Limited Partnership 75% share (405,955) (415,578) (425,422) (435,494) (445,798) (456,339) (467,122) (478,153) (489,438) (500,980) (512,788) (524,865) (537,218) (549,853) (562,776) (575,994) (589,512) (603,337) (617,476) Abode Communities
The Terraces at Fourth
TABLE 5.3 - 55-Year Operating & Cash Flow Projection PAGE 3 OF 3 RESIDENTIAL CASH FLOW Factor Trend 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 Gross Residential Income 2.50% 2,716,772 2,784,691 2,854,309 2,925,667 2,998,808 3,073,778 3,150,623 3,229,388 3,310,123 3,392,876 3,477,698 3,564,641 3,653,757 3,745,100 3,838,728 3,934,696 4,033,064 Miscellaneous Income (laundry) $42.00 PUPA 2.50% 11,485 11,772 12,067 12,368 12,678 12,994 13,319 13,652 13,994 14,343 14,702 15,070 15,446 15,833 16,228 16,634 17,050 Vacancy Rate 7.4% (201,432) (206,468) (211,630) (216,920) (222,343) (227,902) (233,599) (239,439) (245,425) (251,561) (257,850) (264,296) (270,904) (277,676) (284,618) (291,734) (299,027) Continuum of Care Voucher Subsidy Y 2.50% 1,599,039 1,639,015 1,679,991 1,721,991 1,765,040 1,809,166 1,854,395 1,900,755 1,948,274 1,996,981 2,046,906 2,098,078 2,150,530 2,204,293 2,259,401 2,315,886 2,373,783 Vacancy Rate (subsidized units) 10.00% (159,904) (163,902) (167,999) (172,199) (176,504) (180,917) (185,440) (190,076) (194,827) (199,698) (204,691) (209,808) (215,053) (220,429) (225,940) (231,589) (237,378) EFFECTIVE GROSS INCOME 3,965,961 4,065,110 4,166,738 4,270,906 4,377,679 4,487,121 4,599,299 4,714,281 4,832,138 4,952,942 5,076,765 5,203,684 5,333,776 5,467,121 5,603,799 5,743,894 5,887,491 Residential Operating Expenses $6,529 PUPA 3.50% (2,582,034) (2,672,405) (2,765,939) (2,862,747) (2,962,943) (3,066,646) (3,173,978) (3,285,068) (3,400,045) (3,519,047) (3,642,213) (3,769,691) (3,901,630) (4,038,187) (4,179,523) (4,325,807) (4,477,210) Property Tax - DT SM Zone 2 Assessment 3.50% (96,268) (99,638) (103,125) (106,734) (110,470) (114,337) (118,338) (122,480) (126,767) (131,204) (135,796) (140,549) (145,468) (150,560) (155,829) (161,283) (166,928) Beyond Homes Resident Services $500 per unit 3.50% (197,737) (204,657) (211,820) (219,234) (226,907) (234,849) (243,069) (251,576) (260,381) (269,495) (278,927) (288,689) (298,794) (309,251) (320,075) (331,278) (342,873) Replacement Reserve $500 PUPA $500 (53,500) (53,500) (53,500) (53,500) (53,500) (53,500) (53,500) (53,500) (53,500) (53,500) (53,500) (53,500) (53,500) (53,500) (53,500) (53,500) (53,500) HCD Required Annual Payment 0.42% simple int 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 LACDA Annual Admin Fee $7,150 ($7,150) ($7,150) ($7,150) ($7,150) ($7,150) ($7,150) ($7,150) ($7,150) ($7,150) ($7,150) ($7,150) ($7,150) ($7,150) ($7,150) ($7,150) ($7,150) ($7,150) Ground Lease Annual Payment $15,000 per annum Initial Base Amount ($15,000) ($15,000) ($15,000) ($15,000) ($15,000) ($15,000) ($15,000) ($15,000) ($15,000) ($15,000) ($15,000) ($15,000) ($15,000) ($15,000) ($15,000) ($15,000) ($15,000) NET OPERATING INCOME 1,014,272 1,012,760 1,010,203 1,006,541 1,001,708 995,639 988,263 979,507 969,295 957,546 944,179 929,105 912,235 893,473 872,721 849,876 824,830 Debt Service 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0
Debt Service Coverage Ratio 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 NET CASH FLOW 1,014,272 1,012,760 1,010,203 1,006,541 1,001,708 995,639 988,263 979,507 969,295 957,546 944,179 929,105 912,235 893,473 872,721 849,876 824,830 COMMERCIAL CASH FLOW Factor Trend 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 Bookstore $3.50 psf / month 2.50% 652,404 668,714 685,432 702,568 720,132 738,136 756,589 775,504 794,891 814,764 835,133 856,011 877,411 899,347 921,830 944,876 968,498 Café $4.00 psf / month 2.50% 128,193 131,398 134,683 138,050 141,501 145,039 148,665 152,381 156,191 160,096 164,098 168,200 172,405 176,716 181,133 185,662 190,303 Boutique $4.00 psf / month 2.50% 181,556 186,095 190,747 195,516 200,403 205,414 210,549 215,813 221,208 226,738 232,407 238,217 244,172 250,277 256,533 262,947 269,520 Workshop (FSG) $1.75 psf / month 2.50% 187,843 192,539 197,352 202,286 207,343 212,527 217,840 223,286 228,868 234,590 240,454 246,466 252,627 258,943 265,417 272,052 278,853 Gross Commercial Income 2.50% 1,149,996 1,178,746 1,208,214 1,238,420 1,269,380 1,301,115 1,333,643 1,366,984 1,401,158 1,436,187 1,472,092 1,508,894 1,546,616 1,585,282 1,624,914 1,665,537 1,707,175 Vacancy Rate 15% (172,499) (176,812) (181,232) (185,763) (190,407) (195,167) (200,046) (205,048) (210,174) (215,428) (220,814) (226,334) (231,992) (237,792) (243,737) (249,831) (256,076) EFFECTIVE GROSS INCOME 977,496 1,001,934 1,026,982 1,052,657 1,078,973 1,105,947 1,133,596 1,161,936 1,190,984 1,220,759 1,251,278 1,282,560 1,314,624 1,347,490 1,381,177 1,415,706 1,451,099 Commercial OpEx $1.10 psf / month 3.50% (899,442) (930,923) (963,505) (997,228) (1,032,131) (1,068,255) (1,105,644) (1,144,342) (1,184,394) (1,225,848) (1,268,752) (1,313,159) (1,359,119) (1,406,688) (1,455,922) (1,506,880) (1,559,620) Retail OpEx Reimbursement (NNN) 85% 764,526 791,284 818,979 847,644 877,311 908,017 939,798 972,691 1,006,735 1,041,970 1,078,439 1,116,185 1,155,251 1,195,685 1,237,534 1,280,848 1,325,677 NET OPERATING INCOME 842,580 862,295 882,456 903,073 924,153 945,709 967,749 990,285 1,013,325 1,036,882 1,060,965 1,085,586 1,110,756 1,136,486 1,162,788 1,189,674 1,217,156 NET CASH FLOW 842,580 862,295 882,456 903,073 924,153 945,709 967,749 990,285 1,013,325 1,036,882 1,060,965 1,085,586 1,110,756 1,136,486 1,162,788 1,189,674 1,217,156 DISTRIBUTION OF RESIDENTIAL CASH FLOW Factor Trend 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 Net Residential Cash Flow 1,014,272 1,012,760 1,010,203 1,006,541 1,001,708 995,639 988,263 979,507 969,295 957,546 944,179 929,105 912,235 893,473 872,721 849,876 824,830 LP Asset Management Fee $3,000 per annum 3.50% (11,088) (11,476) (11,878) (12,294) (12,724) (13,169) (13,630) (14,107) (14,601) (15,112) (15,641) (16,188) (16,755) (17,341) (17,948) (18,576) (19,226) Deferred Developer Fee $619,261 0.00% 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 Partnership Management Fee $12,000 per annum 3.50% (44,352) (45,904) (47,511) (49,174) (50,895) (52,676) (54,520) (56,428) (58,403) (60,447) (62,563) (64,753) (67,019) (69,365) (71,793) (74,305) (76,906) Residual Receipt - Ground Lease Note 15% share (140,131) (139,626) (138,959) (138,120) (137,099) (135,887) (134,472) (132,844) (130,991) (128,900) (126,560) (123,957) (121,077) (117,907) (114,431) (110,633) (106,497) Residual Receipt - LACDA 9% share (88,700) (88,381) (87,959) (87,428) (86,782) (86,014) (85,119) (84,088) (82,915) (81,592) (80,110) (78,463) (76,640) (74,633) (72,433) (70,029) (67,411) Residual Receipt - AHSC 26% share (250,585) (249,682) (248,489) (246,989) (245,164) (242,996) (240,466) (237,554) (234,240) (230,502) (226,317) (221,662) (216,513) (210,844) (204,627) (197,836) (190,441) Residual Receipt - Limited Partnership 50% share (479,416) (477,690) (475,407) (472,537) (469,045) (464,897) (460,056) (454,486) (448,145) (440,994) (432,987) (424,082) (414,230) (403,383) (391,490) (378,497) (364,349) 100%
DISTRIBUTION OF COMMERCIAL CASH FLOW Factor Trend 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 Net Commercial Cash Flow 842,580 862,295 882,456 903,073 924,153 945,709 967,749 990,285 1,013,325 1,036,882 1,060,965 1,085,586 1,110,756 1,136,486 1,162,788 1,189,674 1,217,156 Residual Receipt - Ground Lease Note 25% share (210,645) (215,574) (220,614) (225,768) (231,038) (236,427) (241,937) (247,571) (253,331) (259,220) (265,241) (271,397) (277,689) (284,122) (290,697) (297,419) (304,289) Residual Receipt - Limited Partnership 75% share (631,935) (646,722) (661,842) (677,304) (693,115) (709,282) (725,812) (742,714) (759,994) (777,661) (795,724) (814,190) (833,067) (852,365) (872,091) (892,256) (912,867) Abode Communities
The Terraces at Fourth
TABLE 5.4 – Proposed Unit Mix, AMI Levels and Projected Gross Rents Unit Size AMI Gross
Rent^
Continuum of Care
Rental Subsidy
Total Income
Per Unit
No. of Units
per AMI level
Total No.
of Units
Studio 30%* $548 $761 $1,309 48* 51 50% $913 - $913 3
1BR
50% $979 - $979 10
22 60% $1,175 - $1,175 9
80% $1,566 - $1,566 3
2BR
30%* $705 $1,301 $2,006 12*
34 50% $1,175 - $1,175 8
60% $1,410 - $1,410 8
80% $1,880 - $1,880 5
Manager - - - 1
Total 107
*Permanent Supportive Housing Units for formerly homeless individuals and families ^Rent levels are based on the 2019 CTCAC rent and income limits for Los Angeles County Abode Communities
The Terraces at Fourth
TABLE 5.5 – Proposed Commercial Uses and Lease Rates
Commercial Space
Base Lease Rate
($/sf/mo) Lease Type
6,078 sf, 4th Street (concept: Bookstore) $3.50 NNN*
1,045 sf, 4th Street (concept: Bookstore café) $4.00 NNN* 1,480 sf, 4th Street (concept: Boutique retail) $4.00 NNN* 300 sf, interior ground floor (concept: Pop-up market) $0.00 n/a 3,500 sf, 3rd Court (concept: Artist workshop/gallery) $1.75 FSG *At stabilized commercial occupancy, The Terraces at Fourth assumes a commercial operating expense of approximately $1.10 per square foot per month.

Abode Communities
The Terraces at Fourth
TABLE 5.6 - Resident Services Sources & Uses Budget
Cost Funds Committed Funding Source Comments & Assumptions Permanent Supportive Housing Services Provided by St. Joseph Center $256,763 $256,763 DHS Includes: Program Manager @ 0.25 FTE; Lead Case Manager @ 0.5 FTE; Case Manager (individuals) @ 2.0 FTE; Case Manager (families) @

1.0 FTE
$8,750 $8,750 DHS $175/client direct services support x 50 clients (can include basic needs assistance, hygiene, documentation assistance, etc.) $2,500 $2,500 DHS $250/client direct services support x 10 clients (includes basic needs assistance, hygiene, documentation assistance, childcare fees, child furnishings, infant/toddler supplies, etc.)
$9,000 $9,000 DHS $150 per client transportation support x 60 clients (supports transportation to required meetings or off-site activities) $6,563 $6,563 DHS $1,500/staff x 3.5 FTE (DHS CHAMP cohort for case mgmt personnel only); $350 per staff x 3.75 FTE for agency wide trainings $2,400 $2,400 DHS $200 per month; general office supplies for staff (includes file folders, pens, papers, stapler, etc.) Supplies - Program (workshops, etc) $2,400 $2,400 DHS $200 per month; general workshop supplies (print jobs, folders, flyers, pens, etc.) $6,338 $6,338 DHS $850 per laptop & case (x 3.75 FTE), $600 per cellphone (x 3.75 FTE) $400 printer (x1), $500 locking cabinet (x1) for casefile storage $3,000 $3,000 DHS $250 per month x 12 months; snacks/refreshments for monthly workshops/activities $3,679 $3,679 DHS Approx 150 miles x $.545 per mile rate x 12 months x 3.75 FTE Operating Costs - PM only $1,601 $1,601 DHS Approx $6,404 annual x .25 FTE; operating costs for PM shared space at SJC agency office Phone Data $2,250 $2,250 DHS $50 per month cell service x 3.75 FTE x 12 months $36,629 $36,629 DHS Agency Indirect Costs ~12% of direct costs $341,873 $341,873 DHS
Beyond Homes Resident Services Provided by Abode Communities

PERSONNEL
Resident Services Coordinator $23,000 $23,000 Cash Flow RSC at 0.5 FTE Program Leader $17,790 $17,790 Cash Flow Program Leader at 2 x 0.3 FTE Tax & Benefits $7,342 $7,342 Cash Flow
TOTAL PERSONNEL $48,132 $48,132 Cash Flow

PROGRAM EXPENSES
Parking and Mileage $390 $390 Cash Flow
Meetings, Workshops, Events, Supplies $3,414 $3,414 Cash Flow Office Expenses and Supplies $782 $782 Cash Flow
Training and Conferences $430 $430 Cash Flow
Third Party Workshops and Provider Consulting $352 $352 Cash Flow TOTAL PROGRAM EXPENSES $5,368 $5,368 Cash Flow
TOTAL BEYOND HOMES RESIDENT SERVICES $53,500 $53,500 Cash Flow TOTAL SERVICES BUDGET - PSH & BEYOND HOMES $395,373
TOTAL COMMITTED SOURCES - DHS & OPERATING CASH FLOW $395,373 GAP/SURPLUS $0
Training
Client Support Fund
Client Support Fund - Families
Client Transportation
Supplies - Office
Equipment (Lease/Purchase)
Food
Mileage/Parking
Agency Indirect Costs @ 12%

TOTAL PSH SUPPORTIVE SERVICES
Expense

PERSONNEL
Supportive Services Staff Expenses

SERVICE

OTHER EXPENSES
Financial Capacity & 6Experience
Abode
Communities
The Terraces at Fourth

6.a - Financial Statements
Please see Appendix 7.g.

6.b - Development Portfolio List
Please see Appendix 7.d for the development porƞ olio, including samples of relevant projects.

6.c - Supportive Services Portfolio
Please see Appendix 7.e for informaƟ on on Abode CommuniƟ es’ and St. Joseph Center’s resident/supporƟ ve service porƞ olios.

6.d - Funding Sources Experience
Low Income Housing Tax Credits
Abode CommuniƟ es has been rooted in community development throughout Southern California for more than 50 years and has invested more than $658 million in economic acƟ vity throughout Los Angeles County. The organizaƟ on has successfully developed more than 47 aff ordable and supporƟ ve housing developments with nearly 3,000 high-quality rental homes that have improved the livelihoods of some 10,000 extremely low, very lowand low-income residents.

The organizaƟ on was the fi rst in the County of Los Angeles to procure funding from the LIHTC program more than 30 years ago. Today, the tradiƟ on conƟ nues with the majority of Abode CommuniƟ es’ housing developments having been funded through the LIHTC program. In the last 10 years, Abode CommuniƟ es has successfully secured more than $200 million in LIHTC, and in the previous two years alone, the organizaƟ on has closed on both 4% and 9% LIHTC transacƟ ons with Wells Fargo, who provided $1.16 per credit resulƟ ng in nearly $37.0 million in equity investment for 140 aff ordable homes in South Los Angeles.

Despite the downward trend in current tax credit market post tax reform, Abode CommuniƟ es conƟ nues to command top LIHTC pricing. In June 2018, the organizaƟ on’s Westmont Vista project received a $1,354,063 Federal Tax Credit Award for 39 supporƟ ve homes for families and TransiƟ on Age Youth in Los Angeles, resulƟ ng in a $13.7 million equity investment at a price of $1.015 per credit. As the market remains volaƟ le, Abode CommuniƟ es conservaƟ vely underwrites each of its projects at $0.95 to $0.98 per credit.

The organizaƟ on’s ability to hold this high pricing with its investor partners highlights the strength of its long-term relaƟ onship with key investors.

6. Financial Capacity & Experience
Abode
Communities
The Terraces at Fourth
Tax-Exempt Bonds
In conjuncƟ on with its success in obtaining 4% tax credits, Abode CommuniƟ es has a long history of securing California Debt Limit AllocaƟ on CommiƩ ee (CDLAC) bond allocaƟ ons and successfully closing on these transacƟ ons with key government partners.

The organizaƟ on has secured bond allocaƟ ons for projects in a wide range of jurisdicƟ ons throughout Los Angeles County, such as Long Beach, Pasadena, Bell Gardens, City of Los Angeles, and Unincorporated County of Los Angeles.

Los Angeles County Development Authority (LACDA)
Abode CommuniƟ es has a long history of partnership with LACDA, having secured funding for 12 residenƟ al and mixed-use projects totaling $35.1 million. Most recently, Abode CommuniƟ es received an award of $5 million for its Adams Terrace project and an addiƟ onal $5.3 million for its Westmont Vista project in 2019, which is currently under construcƟ on.

Aff ordable Housing & Sustainable CommuniƟ es (AHSC) Program Abode CommuniƟ es was a fi rst-round recipient of AHSC funding, securing more than $9.5 million in in May 2017 for the construcƟ on of 140 aff ordable family homes adjacent to the Los Angeles Metro Expo/Vermont light rail staƟ on in Los Angeles (Rolland CurƟ s Gardens).

Recently, the City of Los Angeles selected Abode CommuniƟ es’ Grandview project as an applicaƟ on partner in the upcoming AHSC funding round scheduled for this winter.

Infi ll Infrastructure Grant (IIG) Program
Abode CommuniƟ es has successfully secured a total of $4.9 million in IIG funding for parking and off site infrastructure at two of its infi ll housing projects. The State recently infused the IIG program with an addiƟ onal $500 million allocaƟ on and expects to convert the funding process to a less compeƟƟ ve over-the-counter applicaƟ on. Given Abode CommuniƟ es’ experience in securing mulƟ ple sources of funding from the State’s Department of Housing & Community Development, the organizaƟ on is confi dent in its ability to deliver this for The Terraces at Fourth.

Federal Home Loan Bank Aff ordable Housing Program (AHP) Abode CommuniƟ es’ relaƟ onship with FHLBSF dates back to 1997 and since that Ɵ me, the organizaƟ on has secured some $6.1 million in Aff ordable Housing Program funds. Most recently, in June 2017, the FHLB awarded Abode CommuniƟ es $585,000 in AHP funding for Westmont Vista, 39 supporƟ ve homes for families and TransiƟ on Age Youth.

Project-Based SecƟ on 8 Rental Subsidy
Abode CommuniƟ es, in partnership with enƟƟ es like the Housing Authority of the City of Los Angeles (HACLA), the Housing Authority of the County of Los Angeles (HACoLA), and the U.S. Department of Housing & Urban Development, manages some 556 units of publicly subsidized housing totaling $6 million in annual Project-Based SecƟ on 8 subsidy payments. Most recently, in partnership with housing owner/operator American Gold Star Manor, Abode CommuniƟ es secured 283 Project-Based SecƟ on 8 Vouchers for the renovaƟ on of AGSM’s 21.7-acre housing campus featuring 348 aff ordable homes for seniors and veterans in Long Beach.

6.d - Funding Sources Experience (cont’d)
Abode
Communities
The Terraces at Fourth
Ground Lease ExecuƟ on with Public Partners
Abode CommuniƟ es has successfully executed ten (10) ground lease agreements with various public and private land owners for the long-term ownership and operaƟ on of service-enhanced aff ordable housing and mixed-use communiƟ es. The organizaƟ on expects to enter into fi ve (5) addiƟ onal ground lease agreements in the next fi ve years.

6.e - 9% Developments
Please see Appendix 7.d for a list of successful 9% LIHTC developments.

6.f - Federal Housing Subsidies
Please see Appendix 7.d for a list of developments with Federal Housing Subsidies.

6.g - Debt
Please see Appendix 7.f for the Schedule of Secured and Unsecured Debt.

6.h - Non-Performing Loans
Abode CommuniƟ es does not have any non-performing loans.

6.i - Financial Obligations
Abode CommuniƟ es has not defaulted on any loans or obligaƟ ons during the last fi ve years.

6.j - Arbitration & Litigation (As of 10/22/19)
There are currently four cases involving properƟ es owned and managed by Abode CommuniƟ es in which residents allege injuries caused by various condiƟ ons at the properƟ es. All of these maƩ ers are covered by insurance and none are expected to have a material fi nancial impact on the organizaƟ on.

Independent Living Center of Southern California, et al, PlainƟff s, vs. City of Los Angeles; Community Redevelopment Agency of the City of Los Angeles (January 13, 2012), and over 60 other enƟƟ es that are property owners (three Abode CommuniƟ es limited partnerships included), Defendants. Case number CV 12-0551 SJO (PJW). Court jurisdicƟ on is US District Court for the Central District of California (Western Division).

6.d - Funding Sources Experience (cont’d)
Abode
Communities
The Terraces at Fourth
Three limited partnerships in which Abode CommuniƟ es is the general partner, as well as over 60 other housing property owners with funding from the Community Redevelopment Agency of the City of Los Angeles (CRA), were listed as nominal defendants in the lawsuit brought against the City of Los Angeles and the Community Redevelopment Agency of the City of Los Angeles by the PlainƟff s: Independent Living Center of Southern California, Fair Housing Council of San Fernando Valley and CommuniƟ es AcƟ vely Living Independent and Free. The complaint alleges that CRA engaged in a paƩ ern and pracƟ ce of discriminaƟ on by failing to ensure apartment complexes that were funded with CRA funds were accessible to people with disabiliƟ es.

Abode CommuniƟ es management does not anƟ cipate any material monetary cost, physical correcƟ ons or miƟ gaƟ ons.

Shelly York. PlainƟff /tenant fi led a lawsuit against Abode CommuniƟ es on July 10, 2017 alleging a walkway at the complex was negligently managed and maintained which caused her to lose her balance and fall to the ground, resulƟ ng in injuries to her knees, right wrist, legs and feet. Defense counsel and plainƟff ’s aƩ orney agreed to seƩ le this case for $17,000, but before the seƩ lement was fi nalized it was discovered plainƟff fi led another lawsuit against Abode CommuniƟ es making similar allegaƟ ons. In light of this, defense counsel rescinded the seƩ lement agreement in hopes that it would save cost to seƩ le the two lawsuits globally. PlainƟff ’s deposiƟ on was taken on September 12, 2019. AwaiƟ ng defense counsel’s recommended course of acƟ on.

Shelly York. PlainƟff /tenant fi led a lawsuit against Abode CommuniƟ es on October 4, 2018 alleging a walkway at the complex was negligently managed and maintained which caused her to lose her balance and fall to the fl oor, causing plainƟff to sustain damages.

This lawsuit is similar to the aforemenƟ oned July 2017 lawsuit fi led by tenant. AwaiƟ ng defense counsel’s recommended course of acƟ on.

Ramos, et al vs. Clark Residence Ltd. Partnership, Los Angeles Superior Court. Boilerplate habitability lawsuit fi led against Clark Residence, LP on December 22, 2017. A subsequent retaliaƟ on lawsuit was fi led by the same plainƟff s on June 21, 2018 claiming site staff “retaliated against them” for fi ling the habitability lawsuit by requesƟ ng inspecƟ ons and standard paperwork. Defense Counsel is working on a sƟ pulated eff ort to dismiss the retaliaƟ on case and have the claims folded into the habitability case. As of now, plainƟff s are claiming a total of $4.05 million in damages (about $135,000 per plainƟff ). The immediate plan is to aƩ empt to resolve the case through mediaƟ on, which was scheduled for October 11, 2019. AwaiƟ ng results of the mediaƟ on.

GeorgeƩ e Sharp. PlainƟff /tenant fi led a lawsuit against Abode CommuniƟ es on February 6, 2018 alleging bodily injury due to negligence/dangerous condiƟ on of property (slip and fall in community room kitchen). PlainƟff ’s counsel’s latest demand was for $22,000.

Adjuster, defense counsel, and Abode CommuniƟ es feel this is excessive. Defense counsel and plainƟff counsel are currently working on seƫ ng a date for mediaƟ on.

6.j - Arbitration & Litigation (cont’d)
Appendix 7
a. Abode CommuniƟ es & Affi liates OrganizaƟ onal Chart b. ArƟ cles of IncorporaƟ on
c. CerƟfi cate of Good Standing
d. Development Porƞ olio
e. SupporƟ ve Services Provider Porƞ olio
f. Schedule of Secured & Unsecured Debt
g. Financial Statements (2018-2016)

PRE-DEVELOPMENT

OR CONSTRUCTION

PHASE LIMITED
PARTNERSHIPS*
Abode Communities & AffiliatesAs of March 2019
Abode Communities & Affiliates
DCDC

MULTIFAMILY
LIMITED PARTNERSHIPS OR LIMITED

LIABILITY COMPANIES
IN OPERATIONS*

ABODE COMMUNITY

HOUSING (ACH)

FIGUEROA CORRIDOR

LAND COMPANY
(FCLC)
L’ CANON CLUB
APARTMENTS CORP.

ROLLAND CURTIS

COMMERCIAL

QUALICB

DEVELOPMENT

ENTITIES

OPERATING

ENTITIES

AFFILIATED

NONPROFIT

CORPORATIONS
ABODE

COMMUNITIES
* Referenced in attached Business Entities List

Abode Communities
Tab 7.d ‐ Development Portfolio
Development Portfolio
9% LIHTC Developments
Federal Housing Subsidies
Relevant
See Appendix
Completion
Date/ Status
Project Name
City
Type
Total Units
PSH Units
Restricted
Units
MGR Units
Commercial (SF)
Ground Lease
Transit‐Oriented
Development
Engagement
Strategy
Federal Housing
Subsidies
4%
9%
Beyond Homes
Social Services
Supportive
Housing Partner
CONSTRUCTION Imagine Village Lancaster MF 75 65 74 1 6,000 VASH, PBS8 X Penny Lane CONSTRUCTION Westmont Vista Los Angeles MF 39 38 38 1 X X PBS8 X X St. Joseph Center X PREDEV Chavez Fickett Los Angeles MF 60 36 23 1 25,000 X X X X X St. Joseph Center X PREDEV Grandview Apartments Los Angeles MF 100 54 45 1 X X X X TBDX PREDEV Vet Commons Downey MF 100 49 50 1 2,900 X X X VASH, PBS8 X PATH X PREDEV Adams Terrace Los Angeles S 86 43 41 2 X X PBS8 X St. Joseph Center X PREDEV La Veranda Los Angeles MF 77 38 38 1 8,000 X X X X X St. Joseph Center PREDEV Villa Verde Coachella MF 152 150 2 X X PBS8 X X
PREDEV The Carlton Los Angeles MF 61 30 30 1 2,200 X PBS8 X X St. Joseph Center 2014 Riverwalk at Reseda Los Angeles MF 77 76 1 N/A X X 2013 Terra Bella Bell Gardens S 65 64 1 PBS8 X
2012 Evergreen Apartments Long Beach MF 81 79 2 N/A X X X 2019 Rolland Curtis East Los Angeles MF 70 69 1 X X X PBS8 ‐ XX X 2019 Rolland Curtis West Los Angeles MF 70 69 1 8,000 X X X PBS8 X 2018 Camino del Mar Los Angeles MF 88 87 1 X X PBS8 X X2018 Vista del Mar Los Angeles MF 88 87 1 X X PBS8 X X 2018 Sun Sage Homes Scattered Sites (2) MF 71 69 2 X
2017 Viviendas del Valle Scattered Sites (3) MF 100 97 3 No X 2017 New Park Place Los Angeles MF 49 48 1 ‐ N/A X
2017 E. Victor Villa Los Angeles S 46 45 1 PBS8 X
2016 Selma Community Housing Los Angeles MF 66 65 1 X X X N/A X X 2015 Laurel Village Los Angeles MF 80 79 1 PBS8 X X
2011 Rio Vista Los Angeles MF 50 49 1 X X N/A X X
2011 Hudson Oaks Pasadena S 45 44 1 X PBS8
2010 Ivy Terrace Los Angeles MF 52 15 51 1 N/A X X
X 2009 Casa Dominguez East Rancho Dominguez MF 70 7 69 1 11,453 X PBS8 X X United Friends of the Children 2009 Morgan Place Los Angeles S 55 54 1 N/A X
Relevant
See Appendix
Completion
Date/ Status
Project Name
City
Type
Total Units
PSH Units
Restricted
Units
MGR Units
Commercial (SF)
Ground Lease
Transit‐Oriented
Development
Engagement
Strategy
Federal Housing
Subsidies
4%
9%
Beyond Homes
Social Services
Supportive
Housing Partner
2007 Hart Village Los Angeles MF 47 46 1 3,843 N/A X X
2006 Harbor View Place Los Angeles MF 120 118 2 X X PBS8 X X 2006 Wilmington Townhomes Los Angeles MF 116 114 2 X X PBS8 X X 2006 Las Brisas Community Housing II Signal Hill MF 60 59 1 8,611 N/A X X 2006 Orange Grove Gardens Pasadena MF 38 37 1 X PBS8 X
2004 Grisham Community Housing Long Beach MF 96 94 2 7,300 N/A X X 2004 Las Brisas Community Housing Signal Hill MF 92 91 1 5,796 N/A X X 2001 Heritage Court Downey S 31 30 1 N/A X
2000 New Harbor Vista Los Angeles MF 132 130 2 X N/A X X 1996 Crescent Arms Los Angeles S 186 184 2 X N/A X X
1996 Parthenia Court Los Angeles MF 25 24 1 ‐ N/A X
1995 Young Apartments Los Angeles MF 66 65 1 N/A X1994 Clark Residence Los Angeles SRO 152 150 150 2 PBS8 X X 1991 Centenniel Place Pasadena SRO 144 143 143 1 PBS8 X Union Station Homeless Services 1989 Nuevo Pico Union Los Angeles MF 16 16 0 ‐ N/A
1989 Villa Parke Homes Pasadena MF 9 9 0 N/A X
1985 Wilson Apartments Monrovia S 14 14 0 X N/A
Unit TypeMF: Multi‐FamilyS: Senior
SRO: Single Room Occupancy
SF: Single‐FamilyC: Commercial
Rolland Curtis Gardens
Mixed-Use, Transit-Rich Site Brings Affordable
Homes and Health Services to South LA
Thoughtfully re-designed through an extensive community participatory planning process, Rolland Curtis Gardens
transforms 48 existing units into 140 affordable family homes, a 6,500 square foot Federally Qualified Health Center operated by St. John’s Well Child and Family Center, and 1,500 square feet of community-serving retail. Developed in partnership with T.R.U.S.T. South LA, this mixed-used development, which capitalizes upon its unique transit-rich location along Metro’s Expo/Vermont rail line, is expected to serve some 660 residents and 10,000 health clinic patients in this culturally rich, historic South Los Angeles neighborhood.

The development team received unanimous land use approval from Los Angeles City Planning Commission and City Council, which included an unprecedented reduced parking ratio of 0.8:1, as well as a zone change and a General Plan Amendment to increase density and allow for commercial uses.

Location
Los Angeles, CA
Development Program
140 affordable family homes
6,500 sf Federally Qualified Health Center
1,500 sf Community-serving retail
Amenities
Commercial parking
Landscaped courtyards with playgrounds
Multi-purpose room
Resident center
Secure resident parking
Short-/long-term bicycle storage
Population
Families earning between 30% - 60% AMI
Cost
$70 MM
Complete
April 2019
Service Provided
Real Estate Development
Architecture
Property Management
Resident Services
abodecommunities.org
Casa Dominguez
Mixing Uses for Community-Wide Benefit in
East Rancho Dominguez
> over
Located in both Unincorporated Los Angeles County and the City of Compton, Abode Communities developed this former brownfield site in response to a competitive Request for Proposal awarded by the Community Development Commission of
the County of Los Angeles (LACDC). Working in collaboration with LACDC and neighboring residents, it was determined the community needed affordable housing, as well as health and childcare services. To that end, Casa Dominguez was born and offers low-income families and Transition-Aged Youth long-term affordability via a 99-year ground lease from LACDC.

Casa Dominguez is the first affordable multifamily residential development in the County of Los Angeles to provide permanent supportive housing for Transition Age Youth and the first to achieve a LEED® for Homes Platinum rating from the U.S. Green Building Council. Sustainable innovations include the use of a ground source heat pump and gray water system that retains, filters and reuses discharged water from the development’s on-site laundry facility to water the property’s drought-tolerant landscaping - both firsts within the County of Los Angeles.

Casa Dominguez
15727 S. Atlantic Avenue
E. Rancho Dominguez, CA 90221
abodecommunities.org
Development Program
63 affordable family homes
7 permanent supportive housing units for
Transition Aged Youth (TAY)
7,949 sf childcare center (100 spaces)
3,504 sf Federally Qualified Health Center
Amenities
Central courtyard with playground
Computer lab
Resident center
Population
Families and Transition Age Youth earning
at or below 50% AMI
Sustainability
LEED® for Homes Platinum
Cost
$24.4 MM (residential)
$3.7 MM (commercial)
Complete
December 2009
Financing
California Energy Commission, Citibank,
California Tax Credit Allocation Committee
Community Development Commission of County
of Los Angeles, Los Angeles County Emergency
Shelter Fund, Los Angeles County Homeless Service
Center Fund, New Solar Homes Partnership,
The Ralph M. Parsons Foundation, U.S. Bank
Service Provider Partners
St. John’s Well Child & Family Center
The Children’s Collective
United Friends of the Children
Awards
HUD Door Knocker Award
SCANPH Project of the Year
USGBC-LA Sustainable Innovation, Water
USGBC-LA Sustainable Innovation, Education
Service Provided
Real Estate Development
Architecture
Property Management
Resident Services
Grandview Apartments
Transit-Rich Affordable Supportive Housing in
MacArthur Park
Grandview Apartments will transform an existing 36-unit development into a vibrant transit-oriented community featuring 100 new units of housing for low-income families and people experiencing homelessness. Situated in the MacArthur Park neighborhood of Los Angeles, this site is in close proximity to multiple transit lines, as well as a host of other community-serving amenities, making the development an ideal location for residents to thrive.

To promote housing retention and improved resident
self-sufficiency, Abode Communities will provide its signature resident services program, Beyond Homes. St. Joseph Center will provide specialized services to accommodate the special needs population.

Financing for this transformative development includes 4% Low Income Housing Tax Credits, CDLAC/Bonds, Affordable Housing Program, Affordable Housing and Sustainable Communities program, and City of Los Angeles HHH funds.

Address
714-760 S. Grandview Street
Los Angeles, CA 90057
Development Program
100 affordable and supportive homes
Amenities
Central courtyard with tot lot
Community room
Secure bicycle parking
Resident center
Population
Low-income families (earning 50% - 60% AMI)
and people experiencing homelessness
Cost
$62 MM
Complete
Summer 2022
Services Provided
Real Estate Development
Architecture
Property Management
Resident Services
abodecommunities.org
Veteran Commons
Creating Housing and Job Opportunities
for Homeless Veterans & Their Families
Awarded via a competitive Request for Proposal, co-general development partners Abode Communities and PATH Ventures, this vibrant mixed-use community will offer affordable and supportive housing for Veterans and their families on a gateway in the City of Downey. The housing and community spaces will be owned and operated by Abode Communities and PATH Ventures via a ground-lease agreement from the Los Angeles County Development Authority.

An extensive community engagement process is expected to bridge the needs of both Downey and South Gate residents, while enhancing the services provided through the 2,900 sf Workforce Development Hub. PATH will deliver these onsite services, which will be anchored in deepening opportunities and linkages to employment for residents living in SPA 7. In addition to the Workforce Development Hub, the development boasts a wide range of amenities including a tot lot, community garden, outdoor living room, sundeck, and public art to memorialize local Veterans.

The project is anticipated to achieve a minimum LEED Silver rating and begin construction in 2021.

Location
Downey, CA
Anticipated Program
49 affordable + 50 supportive units
1 manager’s unit
14,100 open space
2,900 sf Workforce Development Hub
Population
Veterans and families (w/ Veteran-preference)
earning between 30% - 60% AMI
Anticipated Cost
$52.4 MM
Anticipated Financing
CA Tax Credit Allocation Committee
CA Dept. of Housing & Community Development
- Affordable Housing & Sustainable Communities
- Veterans Housing & Homeless Prevention
Los Angeles County Development Authority
U.S. Dept of Housing & Urban Development
- Veteran Affairs Supportive Housing
abodecommunities.org epath.org
Adams Terrace
Transit-Adjacent Affordable & Supportive Housing
for Seniors in Historic West Adams
Adams Terrace will transform two long-vacant urban infill sites into a vibrant affordable and supportive residential developments serving low-income seniors and seniors experiencing homelessness in the historic Los Angeles neighborhood of West Adams. Situated just blocks east of the intersection of Adams and Crenshaw Boulevard, Adams Terrace will serve as a gateway to the community and offer residents convenient access to a wide variety of public transportation and commercial retail options. Abode Communities will provide it’s signature Beyond Homes resident services program in collaboration with St. Joseph Center, who will provide supportive social housing services for the special needs population.

Adams Terrace will be financed by the California Housing and Community Development Department (HCD) Infill Infrastructure Grant; HCD Affordable Housing Sustainable Communities Program; City of Los Angeles HHH Program; County of Los Angeles Community Development Commission; HCD Multifamily Housing Program-Supportive Housing; Affordable Housing Program; Project-based Section 8 Vouchers; 4% Low Income Housing Tax Credits; and Tax-Exempt Bonds.

Address
Los Angeles, CA
Development Program
86 affordable homes for seniors and
formerly homeless seniors
Amenities
Bicycle parking
Community garden
Landscaped courtyards
Resident center
Population
Seniors earning < 50% AMI
Cost
$53.9 MM
Complete
December 2021
Service Provider Partner
St. Joseph Center
abodecommunities.org
La Veranda
Partnership With Metro Creates Transit-Rich
Affordable & Supportive Housing
Situated in the historic neighborhood of Boyle Heights in Los Angeles on Metro surplus land, La Veranda offers long-term affordability to low-income families and families experiencing homelessness via a 66-year ground lease from Metro to Abode Communities.

Abode Communities engaged in an extensive community
outreach process that included meetings with the Los Angeles Mayor’s Office, Boyle Heights Neighborhood Council members and Supervisor Hilda Solis’ office and nearly 400 Boyle Heights community members that participated in affordable housing workshops, focus groups and other events. This resulted in deepened affordability through the two-fold increase of 30% AMI units up to 20% of total units, as well as programming the commercial space to include a community bank and expansion space for local, community-based organizations.

Location
Los Angeles, CA
Development Program
77 affordable and supportive homes
8,000 sf community-serving retail
Amenities
Central landscaped courtyard with tot lot
Secure bicycle parking
Resident center
Sustainability
LEED® for Homes Silver
Cost
$38.2 MM
Complete
Fall 2021
Financing
California Tax Credit Allocation Committee
Federal Home Loan Bank of San Francisco
Los Angeles Housing + Community Investment Dept.

Services Provided
Real Estate Development
Architecture
abodecommunities.org
Chavez Fickett
Partnership With Metro Brings Affordable
Housing + Healthy Food to Boyle Heights
Awarded to Abode Communities via a competitive Request for Proposal issued by the Los Angeles County Metropolitan Transit Authority (Metro), Chavez Fickett is a mixed-use
affordable housing development that will serve as a community nexus within the culturally-rich neighborhood of Boyle Heights.

The development will offer 60 affordable homes to low-income families.

Situated in close proximity to Metro’s Gold Line Soto Station, the development thoughtfully responds to the robust transit opportunities along Caesar Chavez Avenue with a 25,000 square foot community-serving grocery store and a 6,500 square foot community park that will cultivate opportunities for improved community connectivity and improved access to local employment opportunities; affordable, healthy food; and a host of life-enriching amenities for community members and residents alike.

Location
Los Angeles
Development Program
60 affordable homes
25,000 sf community-serving retail
6,500 sf pocket park
Amenities
Edible community garden
Landscaped courtyards with tot lot
Secure bicycle parking
Resident center
Sustainability
LEED® for Homes Silver (anticipated)
Services Provided
Real Estate Development
Architecture
Property Management
Resident Services
abodecommunities.org
Lead Service Provider Experience
Name of Lead Service Provider: St. Joseph Center
Target Special Needs Population(s): Homeless and Chronically Homeless Individuals and Families Project Name & Address Beginning and End Date
for Lead Service Provider
Months Providing
Services at the
Project
Type of Special Needs
Population
Number of
Special Needs
Units
Number
of Ttal Units
Horizon Apartments
15 Horizon Avenue, Los Angeles, CA 90291
(Venice Community Housing Corp.)
3/1/2018 ‐ Present 19
Homeless with mental
illness 15 20
Del Rey Square
11976 Culver Blvd., Los Angeles, CA 90066
(Thomas Safran & Associates)
1/1/13 ‐ 8/30/16 44 Homeless Seniors 30 124
Step Up on 5th
1548 5th Street, Santa Monica, CA 90401
(A Community of Friends)
12/1/2008 ‐ Present 129
Homeless with mental
illness 5 44
Gateway Apartments
13366‐68 W. Beach Ave., Marina Del Rey, CA
(Hollywood Community Housing Corp. & Venice
Community Housing Corp.)
7/1/2016 ‐ Present 38 Chronically Homeless
with mental illness (DHS) 20 20
Immanuel Place
3215 E. 3rd Street, Long Beach, CA 90814
(Thomas Safran & Assoc. & Clifford Beers)
10/1/16 ‐ Present 36
Homeless Senior with
mental illness (DHS) 15 25
The Gateway at Willowbrook
11737 Wilmington Ave., Los Angeles, CA 90059
(Thomas Safran & Associates)
2/1/18 ‐ Present 20
Homeless with mental
illness (DHS) 22 105
Villa Nueva RHCP
658‐676 S. Ferris Ave., Los Angeles, CA 90022
(LA County Housing Development Corp.)
4/1/14 ‐ 5/1/17 36 Homeless with mental
illness 21 21
Santa Monica Apartments
1855 S. 9th St; 1450 14th St; 2006 20th St
Santa Monica, CA 90404
(LA County Housing Development Corp.)
4/1/14 ‐ 5/1/17 36 Homeless with mental
illness 41 41
Lead Service Provider - Committed Partnerships
Project Name Address Development Partner Projected Completion Date Target Population Number of Supportive Housing Units Number of Total Units (includes PM apt.) Westmont Vista 1763 Imperial Highway Los Angeles, CA 90047 Abode Communitites Feb-20 TAY & Families 38 39 Adams Terrace 4314-4347 Adams Blvd. Los Angeles, CA 90018 Abode Communitites Spring 2022 Seniors 43 86La Veranda 2420 E. Cesar E. Chavez Ave. Los Angeles, CA 90033 Abode Communitites Spring 2022 Families 38 77Grandview Apartments 714-760 S Grand View Street Los Angeles, CA 90057 Abode Communitites Summer 2022 Individuals 54 100Firmin Apartments 418 N. Firmin Street Los Angeles, CA 90026 Decro Group Jun-20 Adults 42 647th & Witmer 1301 W. 7th Street Los Angeles, CA Deep Green Housing Jan-20 Individuals 75 76Pointe on Vermont 7600 S. Vermont Avenue Los Angeles, CA 90044 EAH Housing Feb-21 Individuals 25 504507 Main St. 4507 S. Main Street Los Angeles, CA 90037 EAH Housing Spring 2021 Individuals 33 64Depot at Hyde Park 6527 Crenshaw Blvd. Los Angeles,CA 90043 GTM Holdings Jul-21 Individuals 33 43SOLA at 87th 8707 S. Western Avenue Los Angeles, CA 90047 Innovative Housing Opportunities Jun-22 Individuals & Families 51 100 Metro at Buckingham 4018-4030 S. Buckingham Rd. Los Angeles, CA 90008 Meta Housing Jul-20 Seniors 51 130 Chesterfield Apartments 4719 S. Normandie Avenue Los Angeles, CA 90037 Wakeland Housing Fall 2021 Individuals 44 45 St. Joseph Center
Abode Communities and Affiliated Nonprofit Corporations Tab 7.f ‐ Schedule of Secured & Unsecured Debt
As of September 30, 2019
Principal
balance as of
9/30/2019
Abode Communities Wells Fargo Bank Unsecured Subordinated Loan 500,000 - 500,000 2.00% Oct-24 - 500,000 500,000 Principal due in 8 quarterly installments over last 2 years
Abode Communities US Bank Unsecured EQ2 500,000 - 500,000 3.00% Jan-22 - 500,000 500,000 Abode Communities Wells Fargo Bank Unsecured EQ2 500,000 - 500,000 2.00% Jun-23 - 500,000 500,000 one 2-year extension available Abode Communities Union Bank Unsecured EQ2 1,250,000 - 1,250,000 2.25% Jul-20 - 1,250,000 1,250,000 One more 1-year extension available Abode Communities Wells Fargo Financial National Bank Secured AHP loan passed through to Westmont Vista - 585,000 585,000 0.00% Dec-75 - 585,000 585,000 Abode Communities Banamex USA Secured AHP loan passed through to Terra Bella - 991,000 991,000 0.00% Jan-28 - 991,000 991,000 Abode Communities Mercy Loan Fund Unsecured Predevelopment loan 2,000,000 - 2,000,000 6.00% Apr-21 - 1,000,000 1,000,000 Abode Communities LIIF Unsecured
Gap financing for Rolland Curtis Commercial QALICB
Leverage Loan - 2,250,000 2,250,000 5.50% Feb-20 400,000 1,100,000 1,500,000 Up to $1.1 million may be extendeded to 5/2/2024 Abode Communities Dignity Health Unsecured
Housing Fund line of credit, collateralized by Housing Fund cash of 25% of outstanding balance - 2,000,000 2,000,000 5.00% Mar-22 - 1,000,000 1,000,000 Proceeds loaned to Adams Terrace ($1mm) Abode Communities
The Housing Partnership Fund Unsecured
Predevelopment loan
- 2,000,000 2,000,000

5.50% Jan-20 2,000,000 - 2,000,000
Underwriting for extension in process. Proceeds
loaned to Grandview $1,000,000 and Adams Terrace
$1,000,000.

Abode Communities LIIF Unsecured Predevelopment loan 500,000 - 500,000 6.73% Aug-20 - 500,000 500,000 Proceeds loaned to La Veranda California Community Foundation Unsecured Predevelopment loan 1,000,000 1,000,000 2.00% May-24 - 900,000 900,000 Nonprofit Finance Fund Unsecured Predevelopment loan 2,000,000 2,000,000 3.95% May-24 - 1,800,000 1,800,000 Weingart Foundation Unsecured Predevelopment loan 2,000,000 2,000,000 2.00% May-24 - 1,800,000 1,800,000 Total - Abode Communities 16,500,000 1,576,000 18,076,000 2,400,000 14,826,000 12,426,000 Abode Community Housing CRA/LA Secured Deposit on Slauson Wall site - 2,000,000 2,000,000 0.00% N/A - 2,000,000 2,000,000 Abode Community Housing City of Pasadena Secured Centennial Place improvements - 367,438 367,438 3.00% Sep-29 - 367,438 367,438 Abode Community Housing Wells Fargo Secured AHP loan passed through to Hudson Oaks - 440,000 440,000 0.00% Feb-29 - 440,000 440,000 Total - Nonprofit Affiliates - 2,807,438 2,807,438 - 2,807,438 2,807,438 4347 Adams L.P. LIIF Secured Adams Crenshaw Acquisition loan 2,280,000 - 2,280,000 5.55% Aug-20 - 2,280,000 2,280,000 Grandview Apartments, L.P. LIIF Secured Grandview Apartments Acquisition loan - 8,247,500 8,247,500 5.33% Jan-21 - 7,365,190 7,365,190 - - - - - -
Total - Development Entities (predevelopment only) - 10,527,500 10,527,500 - 9,645,190 9,645,190 4,383,438 27,027,500 31,410,938 2,400,000 24,878,628 27,278,628 - -
Notes eliminated in consolidation (related party) excluded Recourse Entities under construction excluded Secured - 9,645,190 9,645,190 Unsecured 2,400,000 10,850,000 13,250,000
20,495,190 2,400,000 22,895,190
- - -
Nonrecourse
Secured 4,383,438 - 4,383,438
Unsecured - - -
4,383,438 - 4,383,438
- - -
Total
Secured 14,028,628 - 14,028,628
Unsecured 2,400,000 10,850,000 13,250,000
24,878,628 2,400,000 27,278,628
Borrower Entity Lender Secured/Unsecured Description Maturity Recourse to Abode
Communities Nonrecourse Total Loan Interest rate Notes
Proceeds loaned to La Veranda, Chavez Fickett,
Adams Terrace ($1mm each), Grandview, Carlton
and Villa Verde ($500k each)
Current portion Long-term
portion
Abode Communities
Consolidated Financial Statements
(With Supplementary Information)
and Independent Auditor's Report
December 31, 2018 and 2017
Abode Communities
Index
1 Page
Independent Auditor's Report 2
Consolidated Financial Statements
Consolidated Statements of Financial Position 4
Consolidated Statements of Activities 5
Consolidated Statements of Changes in Net Assets 7
Consolidated Statements of Functional Expenses 8
Consolidated Statements of Cash Flows 10
Notes to Consolidated Financial Statements 12
Supplementary Information - Abode Communities and Affiliates Consolidating Statements of Financial Position 42
Consolidating Statements of Activities 46
Consolidating Statements of Changes in Net Assets 50
Consolidating Statements of Cash Flows 52
2 Independent Auditor's Report
To the Board of Directors
Abode Communities
We have audited the accompanying consolidated financial statements of Abode Communities, which comprise the consolidated statements of financial position as of December 31, 2018 and 2017, and the related consolidated statements of activities, changes in net assets, functional expenses and cash flows for the years then ended, and the related notes to the consolidated financial statements.

Management's Responsibility for the Financial Statements Management is responsible for the preparation and fair presentation of these consolidated financial statements in accordance with accounting principles generally accepted in the United States of America; this includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor's Responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We did not audit the financial statements of certain Operating Entities included in the consolidated financial statements in which Abode Communities owns an interest. The assets, liabilities, net assets and net loss of such entities are stated at $242,608,300, $208,930,849, $33,677,451 and $10,143,793, respectively, for 2018. The assets, liabilities, net assets and net loss of such entities are stated at $252,756,803, $226,400,301, $26,356,502 and $8,693,895, respectively, for 2017. The financial statements of those Operating Entities were audited by other auditors, whose reports have been furnished to us, and our opinion, insofar as it relates to the amounts included for those Operating Entities, is based solely on the reports of the other auditors. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the consolidated financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the consolidated financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the consolidated financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. Accordingly, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
3 Opinion
In our opinion, based on our audits and the reports of the other auditors, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Abode Communities as of December 31, 2018 and 2017, and the changes in its net assets and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

Report on Supplementary Information
Our audits were conducted for the purpose of forming an opinion on the consolidated financial statements as a whole. The accompanying supplementary information on pages 42 to 57 is presented for purposes of additional analysis and is not a required part of the consolidated financial statements.

Such information is the responsibility of management and was derived from and relates directly to underlying accounting and other records used to prepare the consolidated financial statements. The information has been subjected to the auditing procedures applied in the audit of the consolidated financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the consolidated financial statements or to the consolidated financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America.

In our opinion, the information is fairly stated in all material respects in relation to the consolidated financial statements as a whole.

Sacramento, California
June 25, 2019
Abode Communities
Consolidated Statements of Financial Position
December 31, 2018 and 2017
See Notes to Consolidated Financial Statements.
4 2018 2017
Cash and cash equivalents 18,684,912 $ 21,007,493 $
Restricted reserves and deposits 12,988,491 15,161,357
Accounts receivable, net 430,598 553,548
Grants receivable 187,416 455,861
Notes receivable 4,294,550 4,294,550
Prepaid expenses 979,533 746,622
Due from affiliates 184,526 1,844
Deposits 455,646 669,270
Investments - other 350,886 365,886
Property and equipment, net 462,585,209 406,082,102
Deferred fees, net 660,978 661,145
Prepaid ground lease, net 6,428,612 2,731,742
Other assets 1,372,048 1,380,343
Total assets 509,618,405 $ 454,096,763 $
Liabilities
Accounts payable 17,308,521 $ 15,339,469 $
Prepaid rents 218,659 172,144
Accrued vacation 280,497 306,672
Accrued interest payable 40,561,646 36,342,001
Security deposit liability 1,345,798 1,257,856
Deferred revenue 2,185,182 1,168,678
Partnership investments 9,128 9,044
Development fee payable 1,059,974 -
Fair market value of interest rate swaps 992,092 1,406,489 Grants payable 7,101,285 7,314,748
Mortgages and notes payable, net 336,617,380 299,831,984 Total liabilities 407,680,162 363,149,085
Commitments and contingencies - -
Net assets
Without donor restrictions
Controlling 5,142,505 2,039,031
Noncontrolling 96,444,488 88,078,258
Total net assets without donor restrictions 101,586,993 90,117,289 With donor restrictions 351,250 830,389
Total net assets 101,938,243 90,947,678
Total liabilities and net assets 509,618,405 $ 454,096,763 $ Assets
Liabilities and Net Assets
Abode Communities
Consolidated Statements of Activities
Year Ended December 31, 2018
See Notes to Consolidated Financial Statements.
5 Without donor
restrictions
With donor
restrictions Total
Changes in net assets
Revenue and support
Grants and contributions 1,079,741 $ 91,250 $ 1,170,991 $ Government grants 4,220,076 - 4,220,076
Development fees 4,190,060 - 4,190,060
Architectural and consulting 936,249 - 936,249
Resident services 71,828 - 71,828
Property and partnership management fees 95,010 - 95,010 Rental income 23,542,678 - 23,542,678
Gain on FMV of interest rate swap 414,396 - 414,396
Miscellaneous revenue 445,936 - 445,936
Interest income 376,434 - 376,434
Net assets released from restriction 570,389 (570,389) - Total revenue and support 35,942,797 (479,139) 35,463,658 Expenses
Salaries 8,438,857 - 8,438,857
Payroll taxes 593,385 - 593,385
Employee benefits 986,004 - 986,004
Consultants 1,369,788 - 1,369,788
Rent 547,584 - 547,584
Office expenses 558,959 - 558,959
Tranining, travel and parking 163,196 - 163,196
Property and partnership management 108,614 - 108,614
Resident services 318,490 - 318,490
Repairs and maintenance 3,550,821 - 3,550,821
Utilties and telephone 2,858,422 - 2,858,422
Property tax and insurance 2,110,938 - 2,110,938
Interest 9,053,654 - 9,053,654
Legal and accounting 457,422 - 457,422
Bad debt expense 149,017 - 149,017
Real estate development 242,630 - 242,630
Fundraising expenses 164,351 - 164,351
Grant expense 50,000 - 50,000
Depreciation and amortization 13,007,180 - 13,007,180
Total expenses 44,729,312 - 44,729,312
Change in net assets prior to equity in income of investment in partnership interest (479,139) (8,786,515) (9,265,654)
Equity in income of investment in partnership interests - 5,499 5,499 Change in net assets (8,781,016) $ (479,139) $ (9,260,155) $ Change in net assets, controlling 3,103,474 $ (479,139) $ 2,624,335 $ Change in net assets, noncontrolling (11,884,490) - (11,884,490) Total change in net assets (8,781,016) $ (479,139) $ (9,260,155) $ Abode Communities
Consolidated Statements of Activities
Year Ended December 31, 2017
See Notes to Consolidated Financial Statements.
6 Without donor
restrictions
With donor
restrictions Total
Changes in net assets
Revenue and support
Grants and contributions 1,028,566 $ 730,389 $ 1,758,955 $ Development fees 7,102,354 - 7,102,354
Architectural and consulting 1,867,004 - 1,867,004
Resident services 53,836 - 53,836
Property and partnership management fees 126,357 - 126,357 Rental income 22,219,699 - 22,219,699
Gain on FMV of interest rate swaps 195,712 - 195,712
Miscellaneous revenue 313,330 - 313,330
Forgiveness of debt 899,000 - 899,000
Interest income 215,678 - 215,678
Net assets released from restriction 1,801,104 (1,801,104) - Total revenue and support 35,822,640 (1,070,715) 34,751,925 Expenses
Salaries 8,042,632 - 8,042,632
Payroll taxes 552,720 - 552,720
Employee benefits 931,385 - 931,385
Consultants 1,002,576 - 1,002,576
Rent 487,394 - 487,394
Office expenses 317,805 - 317,805
Tranining, travel and parking 131,749 - 131,749
Property and partnership management 64,875 - 64,875
Resident services 306,638 - 306,638
Repairs and maintenance 2,672,784 - 2,672,784
Utilties and telephone 2,556,877 - 2,556,877
Property tax and insurance 2,463,896 - 2,463,896
Interest 8,616,026 - 8,616,026
Legal and accounting 672,973 - 672,973
Bad debt expense 146,705 - 146,705
Real estate development 102,315 - 102,315
Fundraising expenses 26,624 26,624
Grant expense 28,171 - 28,171
Depreciation and amortization 12,117,713 - 12,117,713
Total expenses 41,241,858 - 41,241,858
Change in net assets prior to equity in loss of investment in partnership interests (1,070,715) (5,419,218) (6,489,933) Equity in loss of investment in partnership interests - (496,732) (496,732) Change in net assets (5,915,950) $ (1,070,715) $ (6,986,665) $ Change in net assets, controlling 5,660,441 $ (1,070,715) $ 4,589,726 $ Change in net assets, noncontrolling (11,576,391) - (11,576,391) Total change in net assets (5,915,950) $ (1,070,715) $ (6,986,665) $ Abode Communities
Consolidated Statements of Changes in Net Assets
Years Ended December 31, 2018 and 2017
See Notes to Consolidated Financial Statements.
7 2018 2017
Net assets without donor restrictions
Controlling interest, beginning $ 2,039,031 $ (3,621,410) Change in net assets without donor restrictions 3,103,474 5,660,441 Controlling interest, ending $ 2,039,031 5,142,505 $
Noncontrolling interest, beginning $ 75,820,081 88,078,258 $ Contributions 20,373,263 24,195,621
Distributions (67,543) (58,553)
Syndication costs (55,000) (302,500)
Change in net assets without donor restrictions (11,884,490) (11,576,391) Noncontrolling interest, ending $ 88,078,258 96,444,488 $ Net assets with donor restrictions, beginning $ 1,901,104 830,389 $ Change in net assets with donor restrictions 91,250 730,389 Release of net assets with donor restrictions (570,389) (1,801,104) Subtotal (479,139) (1,070,715)
Net assets with donor restrictions, ending $ 830,389 351,250 $ Abode Communities
Consolidated Statements of Functional Expenses
Year Ended December 31, 2018
See Notes to Consolidated Financial Statements.
8 Program
services
General and
administrative Fundraising Total
Salaries 7,616,639 $ 537,820 $ 284,398 $ 8,438,857 $
Payroll taxes 539,659 34,436 19,290 593,385
Employee benefits 906,026 52,142 27,836 986,004
Consultants 1,067,570 284,529 17,689 1,369,788
Rent 463,780 72,686 11,118 547,584
Office expenses 383,730 82,402 92,827 558,959
Training, travel and parking 142,412 12,222 8,562 163,196 Property and partnership
management fees - 108,614 - 108,614
Resident services 318,490 - - 318,490
Repairs and maintenance 3,544,076 5,597 1,148 3,550,821 Utilities and telephone 2,827,758 25,240 5,424 2,858,422 Property tax and insurance 2,088,756 14,732 7,450 2,110,938 Interest 9,033,857 16,198 3,599 9,053,654
Legal and accounting 399,293 48,995 9,134 457,422
Bad debt expense 149,017 - - 149,017
Real estate development 242,630 - - 242,630
Fundraising expenses - - 164,351 164,351
Grant expense 50,000 - - 50,000
Depreciation and
amortization 64,986 12,927,753 14,441 13,007,180
Total functional
expenses $ 1,251,985 42,810,060 $ 667,267 $ 44,729,312 $ Abode Communities
Consolidated Statements of Functional Expenses
Year Ended December 31, 2017
See Notes to Consolidated Financial Statements.
9 Program
services
General and
administrative Fundraising Total
Salaries 7,258,284 $ 519,361 $ 264,987 $ 8,042,632 $
Payroll taxes 499,764 34,559 18,397 552,720
Employee benefits 868,804 42,036 20,545 931,385
Consultants 805,155 180,921 16,500 1,002,576
Rent 400,265 66,720 20,409 487,394
Office expenses 188,083 72,855 56,867 317,805
Training, travel and parking 111,590 13,688 6,471 131,749 Property and partnership
management fees - 64,875 - 64,875
Resident services 306,638 - - 306,638
Repairs and maintenance 2,671,764 745 275 2,672,784
Utilities and telephone 2,519,400 24,900 12,577 2,556,877 Property tax and insurance 2,454,327 5,545 4,024 2,463,896 Interest 8,588,365 18,441 9,220 8,616,026
Legal and accounting 598,267 53,208 21,498 672,973
Bad debt expense 146,705 - - 146,705
Real estate development 102,315 - - 102,315
Fundraising expenses - - 26,624 26,624
Grant expense 28,171 - - 28,171
Depreciation and
amortization 57,503 12,031,459 28,751 12,117,713
Total functional
expenses $ 1,090,482 39,644,231 $ 507,145 $ 41,241,858 $ Abode Communities
Consolidated Statements of Cash Flows
Years Ended December 31, 2018 and 2017
10 2018 2017
Cash flows from operating activities
Changes in net assets without donor restrictions (8,781,016) $ (5,915,950) $ Changes in net assets with donor restrictions (479,139) (1,070,715) Adjustments to reconcile changes in net assets to net cash provided by operating activities
Depreciation and amortization 13,007,180 12,117,713
Ground lease expense 76,958 48,002
Gain on FMV of interest rate swaps (414,397) (195,712)
(Income) loss on investments (5,499) 496,732
Amortization of grants payable (213,463) (213,464)
Amortization of debt issuance costs 461,799 278,409
Forgiveness of debt (899,000) -
(Increase) decrease in
Accounts receivable 122,950 232,790
Grants receivable 268,445 1,118,839
Prepaid expenses (232,911) (118,604)
Deposits (186,376) (81,589)
Other assets 8,295 (612,346)
Increase (decrease) in
Accounts payable (2,989,668) 3,808,740
Prepaid rents 46,515 60,512
Accrued vacation (26,175) 23,067
Accrued interest payable 4,219,645 3,738,354
Security deposit liability 87,942 14,398
Deferred revenue 1,016,504 (324,785)
Net cash provided by operating activities 5,987,589 12,505,391 Cash flows from investing activities
Investment in property and equipment (65,920,379) (62,234,505) Purchase of investment (15,000) (377,614)
Sale of investment - 256,791
Net repayment of advances to affiliates (1,046,118) (1,084,177) Payment of tax credit monitoring fees (75,856) (136,989) Net withdrawals from (deposits to) restricted reserves and deposits (3,333,568) 2,172,866
Net cash used in investing activities (64,884,487) (66,910,062) Abode Communities
Consolidated Statements of Cash Flows
Years Ended December 31, 2018 and 2017
See Notes to Consolidating Financial Statements.
11 2018 2017
Cash flows from financing activities
Principal payments on mortgages and notes payable (29,011,851) (28,881,847) Proceeds from mortgages and notes payable 65,931,565 68,830,322 Contributions 20,373,263 24,195,621
Distributions (67,543) (58,553)
Debt issuance costs paid (596,117) (479,937)
Syndication costs paid (55,000) (302,500)
Net cash provided by financing activities 56,574,317 63,303,106 Net (decrease) increase in cash and cash equivalents (2,322,581) 8,898,435 Cash and cash equivalents, beginning 21,007,493 12,109,058 Cash and cash equivalents, ending 18,684,912 $ 21,007,493 $ Supplemental disclosure of cash flow information
Cash paid for interest, net of amount capitalized of
$4,045,499 and $1,854,788 $ 4,740,018 4,043,738 $
Supplemental schedule of noncash investing and financing activities
Accounts payable included in property and equipment $ 11,859,416 15,133,316 $ Developer fee payable - 1,059,974
Contributions included in property and equipment 40,700 - Decrease in deposits and note payable 2,000,000 -
Forgiveness of debt principal 899,000 -
Deferred financing costs included in accounts payable and accrued expenses 19,538 -
Tax credit monitoring fee included in accounts payable 18,450 - Write off of fully depreciated property 37,774 -
Interest on notes payable capitalized to principal, including capitalized interest 476,281 -
Abode Communities
Notes to Consolidated Financial Statements
December 31, 2018 and 2017
12 Note 1 - Organization and nature of operations
The accompanying consolidated financial statements include Abode Communities, a California nonprofit corporation and its affiliates ("Affiliates"), which include the following:
 Affiliated Nonprofit Corporations:
- Abode Community Housing, a California nonprofit corporation ("ACH") - Figueroa Corridor Land Company, a California nonprofit corporation ("FCLC") - L'Canon Club Apartments Corporation ("L'Canon")
 Development Entities, as listed on page 13
 Operating Entities, as listed on pages 13 - 14
Collectively, Abode Communities and its Affiliates shall be referred to as "Abode Communities”.

Abode Communities is organized for the purpose of acquisition, design, development and operation of affordable housing projects. Abode Communities assists in revitalizing communities through acquisition and rehabilitation of existing housing, development of new housing and the long-term ownership and management of its rental properties. Abode Communities owns affordable housing properties, provides property management and social programs to enhance the quality of life of its residents, and serves as general partner for affordable housing projects. Abode Communities' principal sources of revenue are rental income from tenants, grants, development fees, and fees for property management, consulting, architectural and project management services.

Abode Communities receives significant funding from federal, state and local government subsidies in various forms, including low-income housing tax credits, low-interest rate loans, grants, and rent subsidies for qualifying very-low, low- and moderate-income tenants.

Principles of consolidation
In the accompanying consolidating financial statements, Abode Communities includes the accounts of that entity. Affiliated Nonprofit Corporations includes the accounts of ACH, FCLC and L'Canon.

In the accompanying consolidating financial statements, Development Entities includes the accounts of entities which are in the predevelopment or construction phase, and Operating Entities includes the accounts of entities which are in operations. Abode Communities, ACH or FCLC has a financial interest in each of the Development Entities and Operating Entities.

The Affiliated Nonprofit Corporations are consolidated because Abode Communities has an economic interest and control of the organizations through management of day-to-day operations and/or a majority voting interest in their governing boards. The limited partnerships and limited liability companies are included in the consolidation in accordance with U.S. generally accepted accounting principles ("GAAP"), which require consolidation of all such entities which are deemed to be controlled by Abode Communities.

All significant inter-entity balances and transactions have been eliminated in consolidation.

Abode Communities
Notes to Consolidated Financial Statements
December 31, 2018 and 2017
13 Development Entities are comprised of the following entities. The respective beneficial owner and the consolidated ownership percentage is also listed:

Development entity affiliate Beneficial owner 2018 2017 4347 Adams, L.P. Abode Communities 100.00% 100.00%
44000 Sahuayo Street, LP Abode Communities 0.005% 0.005% Bethune, L.P. FCLC N/A 100.00%
Grandview Apartments, L.P. Abode Communities N/A 100.00% La Veranda, L.P. Abode Communities 100.00% 100.00%
Rolland Curtis Commercial, L.P. Abode Communities N/A 100.00% Rolland Curtis Commercial QALICB, Inc. Abode Communities 100.00% 100.00% Rolland Curtis East, L.P. Abode Communities 100.00% 100.00% Rolland Curtis West, L.P. Abode Communities 100.00% 100.00% Slauson & Wall, L.P. FCLC 100.00% 100.00%
Vista del Mar, L.P. Abode Communities N/A 0.0018%
Westmont Vista, L.P. Abode Communities 0.01% 100.00%
Ownership %
Operating Entities are comprised of the following entities. The respective general partner and managing member and the consolidated ownership percentage is also listed:

Operating entity affiliate
Nonprofit general partner/
managing member 2018 2017
Astoria Place Limited Partnership Abode Communities N/A 100.00% Casa Dominguez, L.P. Abode Communities 1.00% 1.00%
Centennial Place Limited Partnership Abode Communities 100.00% 100.00% Clark Residence Limited Partnership Abode Communities 100.00% 100.00% DCDC Multi Units Abode Community Housing 100.00% 100.00% E. Victor Villa, L.P. Abode Communities 0.01% 0.01%
E. Victor Villa GP, LLC Abode Communities 100.00% 100.00% Evergreen Apartments, L.P. Abode Communities 0.01% 0.01% Fremont Building Limited Partnership Abode Communities 100.00% 100.00% Glassell Park, L.P. Abode Communities 1.00% 1.00%
Grand Avenue Apartments Limited
Partnership Abode Communities 100.00% 100.00%
Grandview Apartments, L.P. Abode Communities 100.00% N/A Grisham Community Housing, L.P. Abode Communities 100.00% 0.01% Hart Village, L.P. Abode Communities 0.01% 0.01%
Heritage Court Apartments Limited
Partnership Abode Communities 100.00% 100.00%
Hudson Oaks Limited Partnership Abode Community Housing 0.01% 0.01% Kittridge Housing, L.P. Abode Communities 0.01% 0.01%
Las Brisas Community Housing II, L.P. Abode Community Housing 0.01% 0.01% Ownership %
Abode Communities
Notes to Consolidated Financial Statements
December 31, 2018 and 2017
14 Operating entity affiliate
Nonprofit general partner/
managing member 2018 2017
Ownership %
Las Brisas Community Housing Limited
Partnership Abode Communities 0.01% 0.01%
Laurel Village, L.P. Abode Communities 0.01% 0.01%
Morgan Place, L.P. Abode Communities 0.01% 0.01%
New Dana Strand Partners I, L.P. Abode Communities 0.005% 0.005% New Park Place, L.P. Abode Communities 0.01% 0.01%
Nuevo Pico Union Partnership Abode Communities 100.00% 100.00% Orange Grove Gardens, L.P. Abode Community Housing 0.01% 0.01% Osage Apartments Limited Partnership Abode Communities N/A 100.00% Oxnard Housing Repurchase, LLC Abode Communities 100.00% 100.00% Park Place Terrace Limited Partnership Abode Communities N/A 100.00% Park Place Terrace Repurchase, LLC Abode Communities 100.00% 100.00% Parthenia Housing Associates, L.P. Abode Communities 100.00% 100.00% Reseda Village Repurchase, LLC Abode Communities 100.00% 100.00% Selma Community Housing, L.P. Abode Communities 0.01% 0.01% Sherman Way Community Housing, L.P. Abode Communities 0.01% 0.01% Sun Sage Homes, L.P. Abode Community Housing 0.01% 0.01% Sunshine Terrace Repurchase, LLC Abode Community Housing 100.00% 100.00% Villa Parke Homes Abode Community Housing 100.00% 100.00% Terra Bella, L.P. Abode Communities 0.01% 0.01%
Vista del Mar, L.P. Abode Communities 0.0018% N/A
Viviendas Del Valle, L.P. Abode Communities 0.01% 0.01% Wilmington Housing Associates Limited
Partnership Abode Community Housing 100.00% 100.00%
Wilson Apartments Associates, L.P. Abode Community Housing 39.50% 39.50% Note 2 - Significant accounting policies
Basis of presentation
The consolidated financial statements are presented in accordance with GAAP, which require Abode Communities to report information regarding its financial position and activities according to the following net asset classifications:

Net assets without donor restrictions
Net assets without donor restrictions consist of all resources of Abode Communities that have not been specifically restricted by a donor.

Net assets with donor restrictions
Net assets with donor restrictions consist of cash received or other assets with donor stipulations that limit their use. Donor restrictions are stipulated by either a time restriction or a purpose restriction. Upon expiration of a time restriction or completion of a purpose restriction, net assets with donor restrictions are reclassified to net assets without donor restrictions and reported in the consolidated statements of activities as net assets released from restriction.

Abode Communities
Notes to Consolidated Financial Statements
December 31, 2018 and 2017
15 Use of estimates
The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the amounts reported in these consolidated financial statements and the disclosures in the accompanying notes. Actual results could differ from those estimates. Estimates of future operations were made by management in the calculation of the amount of development fee revenue recognized under GAAP.

Fair value
The carrying amount of Abode Communities' cash and cash equivalents, receivables, payables and accrued expenses, approximate fair value due to the short-term nature of these instruments. The fair value of Abode Communities' notes receivable and notes payable is assessed by management based on analysis of underlying investments and historical trends. Impairment reserves are provided as necessary.

Cash and cash equivalents
Abode Communities considers all highly-liquid investments purchased with an original maturity of three months or less to be cash equivalents.

Restricted reserves and deposits
Restricted reserves and deposits primarily consist of operating and replacement reserves and property tax and insurance escrows. Such reserves are required by various financing authorities, lenders or stipulations in the applicable partnership or operating agreements.

Accounts receivable and bad debts
Accounts receivable are reported net of an allowance for uncollectible amounts. Management's estimate of the allowance is based on historical collection experience and a review of the current status of accounts receivable. It is reasonably possible that management's estimate of the allowance will change. As of December 31, 2018 and 2017, the allowance for doubtful accounts is $162,969 and $105,815, respectively. Bad debt expense during the years ended December 31, 2018 and 2017 was $149,017 and $146,705, respectively, and is included in expenses on the consolidated statements of activities.

Notes receivable
Notes receivable are reported net of an allowance for uncollectible amounts. Management's estimate of the allowance is based on historical collection experience and a review of the current status of notes receivable. It is reasonably possible that management's estimate of the allowance will change. As of December 31, 2018 and 2017, there is no allowance for doubtful accounts. All related party notes receivable have been eliminated in consolidation.

Due from affiliates
The advances due from affiliates are reported net of an allowance for doubtful accounts.

Management's estimate of the allowance is based on expected future operating performance and other factors. It is reasonably possible that management's estimate of the allowance will change. As of December 31, 2018 and 2017, there is no allowance for doubtful accounts.

Partnership investments
Partnership investments include the equity interest of Abode Communities and Affiliated Nonprofit Corporations in certain tax credit partnerships which are not controlled by Abode Communities and Affiliated Nonprofit Corporations. Abode Communities and Affiliated Nonprofit Corporations account for their investments in such limited partnerships ("Investees") in accordance with the equity method of accounting, under which the investment is carried at cost and is adjusted for Abode Communities' Abode Communities
Notes to Consolidated Financial Statements
December 31, 2018 and 2017
16 and Affiliated Nonprofit Corporations' share of the Investees' results of operations and by cash distributions received. Abode Communities and Affiliated Nonprofit Corporations regularly assess the carrying value of their investments in limited partnerships. If the carrying value exceeds the estimated value derived by management, Abode Communities and Affiliated Nonprofit Corporations would reduce their investments by the amount by which the carrying amounts exceed the assessed value. During the years ended December 31, 2018 and 2017, Abode Communities and Affiliated Nonprofit Corporations did not make any such adjustments. The Investees are variable interest entities whose activities are consolidated with the business activities of their controlling owners.

Project development costs
Abode Communities incurs costs in connection with properties it is considering for development as well as costs associated with projects in the initial stages of development. These costs include such items as market studies, purchase options, environmental study costs, legal and accounting costs.

Project development costs are capitalized until such time as the project is no longer considered desirable or feasible, at which time the costs are expensed. Project development costs related to projects that are ultimately developed are subsequently recorded as receivables to be repaid by the applicable projects. During the years ended December 31, 2018 and 2017, $38,398 and $102,315, respectively, of project development costs were expensed and included in real estate development on the consolidated statements of activities.

Property and equipment
Property and equipment are recorded at cost. Expenditures for maintenance and repairs are expensed as incurred, while major renewals and betterments are capitalized. Costs of properties constructed or rehabilitated include all direct costs of construction, as well as carrying costs during the construction period and indirect costs of construction, supervision and management. Upon disposal of depreciable property, the appropriate property accounts are reduced by the related costs and accumulated depreciation. The resulting gains and losses are reflected in the statement of activities. Depreciation is computed using the straight-line method over the estimated useful lives ranging from 5 to 40 years.

It is Abode Communities' policy to capitalize expenditures for improvements, furniture, and fixtures and equipment exceeding $2,500.

Impairment of long-lived assets
Abode Communities reviews its property and equipment and investments for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. When recovery is reviewed, if the undiscounted cash flows estimated to be generated by the property are less than its carrying amount, management compares the carrying amount of the property to its fair value in order to determine whether an impairment loss has occurred. The amount of the impairment loss is equal to the excess of the asset's carrying value over its estimated fair value. No impairment losses have been recognized during the years ended December 31, 2018 and 2017.

Deferred fees
Costs related to obtaining low-income housing tax credits are being amortized using the straightline method over the mandatory 15-year compliance period.

Costs related to obtaining leasehold improvements are capitalized and amortized on the straightline method over the shorter of the life of the related asset or the related lease term.

Abode Communities
Notes to Consolidated Financial Statements
December 31, 2018 and 2017
17 The table below indicates each component within the deferred fees, net line item on the consolidated statements of financial position:

December 31, 2018
Tax credit
monitoring costs
Other deferred
fees
Deferred fees 1,048,514 $ 53,830 $
Less accumulated amortization (421,687) (19,679)
Deferred fees, net $ 34,151 626,827 $
December 31, 2017
Tax credit
monitoring costs
Other deferred
fees
Deferred fees 972,658 $ 53,830 $
Less accumulated amortization (348,858) (16,486)
Deferred fees, net 623,800 $ 37,345 $
Estimated annual amortization for each of the next five years subsequent to December 31, 2018 is as follows:

Tax credit Other
2019 74,556 $ 3,193 $
2020 74,556 1,025
2021 74,556 1,025
2022 61,875 1,025
2023 56,360 1,025
Prepaid ground lease
Glassell Park, L.P. and Selma Community Housing, L.P. ("Selma") have entered into prepaid ground lease agreements with the Los Angeles Unified School District. The ground leases are amortized over the terms of the agreements using the straight-line method.

Estimated annual amortization for each of the next five years and thereafter subsequent to December 31, 2018 is as follows:
2019 105,912 $
2020 105,912
2021 105,912
2022 105,912
2023 105,912
Thereafter 5,899,052
$ 6,428,612
Abode Communities
Notes to Consolidated Financial Statements
December 31, 2018 and 2017
18 Debt issuance costs
Debt issuance costs, net of accumulated amortization, are reported as a direct deduction from the face amount of the mortgage loan payable to which such costs relate. Amortization of debt issuance costs is reported as a component of interest expense and is computed using an imputed interest rate on the related loan.

Derivative instruments
Evergreen Apartments, L.P. ("Evergreen"), Laurel Village, L.P. ("Laurel Village"), and Selma have entered into interest rate swap agreements, which are carried on the accompanying consolidated statements of financial position at fair value. Changes in fair value are estimated and recorded through the consolidated statements of activities. The fair value of the interest rate swaps have been calculated utilizing a third-party methodology that management believes is commonly employed (see Note 13).

Fair value measurement
The accounting standard for fair value measurement and disclosures defines fair value, establishes a framework for measuring fair value, and provides for expanded disclosure about fair value measurements. Fair value is defined by the accounting standard for fair value measurement and disclosures as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. It also establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three levels. The following summarizes the three levels of inputs and hierarchy of fair value Evergreen, Laurel Village and Selma use when measuring fair value:
 Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that Evergreen, Laurel Village and Selma have the ability to access;  Level 2 inputs may include quoted prices for similar assets and liabilities in active markets, as well as interest rates and yield curves that are observable at commonly quoted intervals; and
 Level 3 inputs are unobservable inputs for the asset or liability that are typically based on an entity's own assumptions as there is little, if any, related market activity.

In instances where the determination of the fair value measurement is based on inputs from different levels of the fair value hierarchy, the fair value measurement will fall within the lowest level input that is significant to the fair value measurement in its entirety (see Note 13 for additional disclosures).

Noncontrolling interest in limited partnerships and limited liability companies The noncontrolling interest in the consolidated statements of financial position represents the aggregate balance of limited partner or investor member equity interest in the affiliate limited partnerships or limited liability companies that are included in the consolidated financial statements.

Revenue recognition
Rental income is recognized as rents become due. Rental payments received in advance are deferred until earned. All leases between the Operating Entities and the tenants of the projects are operating leases.

Abode Communities
Notes to Consolidated Financial Statements
December 31, 2018 and 2017
19 Portions of the rental income are in the form of subsidy payments from the U.S. Department of Housing and Urban Development ("HUD") under Section 8 of the National Housing Act and Project Rental Assistance Contracts. Tenants are subsidized based upon their level of income. Rent increases require HUD approval.

Development fees are earned in connection with the construction and oversight of the development of properties. The total development fees anticipated to be paid from capital sources are recognized as revenue commencing with the closing of a project's construction loan (the "Closing") based on the percentage of completion method. The total development fee anticipated to be paid from future cash flow of the property (“deferred development fee”) is recorded as an asset with a corresponding offset to deferred revenue. The deferred development fee is recognized when paid and is eliminated in consolidation.

Abode Communities earns architect fees for services provided to third parties, affiliated limited partnerships and wholly owned properties. Such fees are recognized as earned in accordance with the terms of the contracts. The fees are capitalized into the basis of rental property by the affiliated limited partnerships and the profit earned, if any, is eliminated in the consolidation.

Laundry and cable income received in advance are deferred until earned.

Property management fee income is earned monthly based on the management agreement. Fees earned for consolidated entities are eliminated in the consolidation.

Resident services fee income is earned monthly based on the resident services agreement. Fees earned for consolidated entities are eliminated in the consolidation.

Partnership management fee income is earned annually based on the partnership agreements.

Fees earned are eliminated in the consolidation.

When a donation is received and the restriction is met in the same period, the contribution is classified as net assets without donor restriction.

Grants
Abode Communities receives conditional grants from federal agencies and private grantors for various purposes. Conditional grant awards not yet received are accrued to the extent unreimbursed expenses have been incurred for the purposes specified by an approved conditional grant. Abode Communities records refundable advances for revenues received under approved awards from grantors for the purposes specified under the grant restrictions. Cash received for grants in excess of costs incurred is reflected as net assets with donor restriction. Costs incurred in excess of cash received are reflected as grants receivable.

Functional allocation of expenses
The costs of providing the various programs and other activities have been summarized on a functional basis in the consolidated statements of functional expenses. Directly identifiable expenses are charged to program and supporting services. Expenses related to more than one function are charged to program and supporting services based on systematic methods.

Abode Communities
Notes to Consolidated Financial Statements
December 31, 2018 and 2017
20 Income taxes
Each of Abode Communities, ACH, FCLC, L'Canon Club Apartments and Rolland Curtis Commercial QALICB, Inc. have applied for and received a determination letter from the Internal Revenue Service ("IRS") to be treated as a tax-exempt entity pursuant to Section 501(c)(3) of the Internal Revenue Code and did not have any unrelated business income for the years ended December 31, 2018 and 2017. Due to their tax-exempt status, these entities are not subject to income taxes. These entities are required to file tax returns with the IRS and other taxing authorities. Accordingly, these consolidated financial statements do not reflect a provision for income taxes and these entities have no other tax positions which must be considered for disclosure.

The Development and Operating Entities are pass-through entities for income tax purposes and, are not subject to income taxes. All items of taxable income, deductions and tax credits are passed through to and are reported by their owners on their respective income tax returns. The Development and Operating Entities' federal tax status as pass-through entities is based on their legal status as a partnership. The Development and Operating Entities are required to file tax returns with the Internal Revenue Service ("IRS") and other taxing authorities. Accordingly, these consolidated financial statements do not reflect a provision for income taxes and the Development and Operating Entities have no other tax positions which must be considered for disclosure. Income tax returns filed by the Development and Operating Entities are subject to examination by the IRS for a period of three years. While no income tax returns are currently being examined by the IRS, tax years since 2015 remain open.

Advertising
Advertising costs are expensed as incurred.

Syndication costs
Syndication costs are recorded as a direct reduction to noncontrolling interest when incurred.

Change in accounting principle
On August 18, 2016, FASB issued ASU 2016-14, Not-for-Profit Entities (Topic 958) - Presentation of Financial Statements of Not-for-Profit Entities. The update addresses the complexity and understandability of net asset classification, deficiencies in information about liquidity and availability of resources, and the lack of consistency in the type of information provided about expenses and investment return. Abode Communities has adjusted the presentation of these statements accordingly. The ASU has been applied retrospectively to all periods presented.

Note 3 - Restricted reserves and deposits
In accordance with the terms of loan agreements, regulatory agreements and partnership agreements, deposits are made into replacement reserve accounts, operating reserve accounts, tax and insurance escrow accounts and other accounts as required by the applicable agreements.

Withdrawals from these accounts may require approval from designated parties.

Abode Communities
Notes to Consolidated Financial Statements
December 31, 2018 and 2017
21 Note 4 - Accounts receivable and bad debts
Accounts receivable consist of the following as of December 31:

Affiliated
Abode Development Operating Nonprofit Less
December 31, 2018 Communities Entities Entities Corportions eliminations Total Architecture fees $ - 507,237 $ - $ - $ (123,323) $ 383,914 $ Partnership management fees - 1,845,433 - - (1,845,433) - Property management and
lease up fees - 312,991 - - (312,991) -
Rent - - 208,653 - - 208,653
Other - 7,350 - - (6,350) 1,000
- 2,673,011 208,653 - (2,288,097) 593,567
Less allowance for doubtful
accounts - (750,000) (82,969) - 670,000 (162,969)
$ - 1,923,011 $ 125,684 $ - $ (1,618,097) $ 430,598 $
Affiliated
Abode Development Operating Nonprofit Less
December 31, 2017 Communities Entities Entities Corportions eliminations Total Architecture fees $ - 1,103,039 $ - $ - $ (727,732) $ 375,307 $ Partnership management fees - 1,588,305 - - (1,588,305) - Property management and
lease up fees 181,905 43,560 (138,345)
Rent - - 240,496 - - 240,496
Other - 5,816 - - (5,816) -
- 2,879,065 240,496 - (2,460,198) 659,363
Less allowance for doubtful
accounts - (480,000) (25,815) - 400,000 (105,815)
$ - 2,399,065 $ 214,681 $ - $ (2,060,198) $ 553,548 $
Note 5 - Grants receivable
Grants receivable consist of the following as of December 31:
2018 2017
Resident services 144,672 $ 100,000 $
General operating grant 35,000 75,861
Fundraising event 7,744 30,000
Rolland Curtis Commercial QALICB capital grants - 250,000 $ 455,861 187,416 $
All grants receivable are expected to be collected within one-year.

Abode Communities
Notes to Consolidated Financial Statements
December 31, 2018 and 2017
22 Note 6 - Notes receivable
Notes receivable consist of the following as of December 31:
2018 2017

Unsecured loan to Twain Investment Fund 190, LLC for the purposes of funding the Rolland Curtis QALICB project,
bearing interest at 1.444% per annum. Interest is payable annually through November 2, 2024, at which time a
principal payment of $1,100,000 is due. Thereafter
principal and interest is due annually until December 31, 2052 at which time a balloon payment of $1,949,989 is
due. $ 4,294,550 $ 4,294,550
Note 7 - Investments in partnerships and limited liability companies Abode Communities consolidates its ownership interest in certain limited partnerships and limited liability companies (see Note 1). As of December 31, 2018 and 2017, the net investment deficit in limited partnership and limited liability companies is $4,757,414 and $2,666,600, respectively, of which $4,748,286 and $2,657,556 was eliminated in consolidation at December 31, 2018 and 2017, respectively.

The following is condensed financial information as of December 31, 2018 and 2017 for those entities which are recorded on the equity method in the consolidated financial statements:

Abode Communities
Notes to Consolidated Financial Statements
December 31, 2018 and 2017
24 Note 9 - Development fees receivable
Development fees receivable consist of the following as of December 31:
2018 2017
Current development fees receivable
44000 Sahuayo Street, LP 214,749 $ - $
E. Victor Villa, L.P. 309,792 378,527
New Park Place, L.P. 119,372 119,372
Rolland Curtis Commercial QALICB, Inc. 121,900 -
Rolland Curtis East, L.P. 276,000 76,000
Rolland Curtis West, L.P. 1,223,640 117,600
Selma Community Housing, L.P. - 72,094
Sun Sage Homes, L.P. 634,716 1,134,841
Vista del Mar, L.P. 750,447 541,200
Viviendas Del Valle, L.P. 221,426 616,974
Total current development fees receivable 3,872,042 3,056,608 Deferred development fees receivable 8,476,926 6,407,321 Interest on deferred development fees 106,711 107,899
Total development fees receivable 12,455,679 9,571,828
Less eliminations (12,455,679) (9,571,828)
$ - - $
Note 10 - Property and equipment, net
Property and equipment consists of the following as of December 31:

Affiliated
Abode Development Operating Nonprofit Less
December 31, 2018 Communities Entities Entities Corportions eliminations Total Land - $ 12,510,000 $ 48,629,687 $ - $ - $ 61,139,687 $ Building and improvements - - 461,806,761 - (13,699,173) 448,107,588 Furniture and equipment - 660,032 16,511,169 - - 17,171,201 Leasehold improvements - 229,614 75,791 - - 305,405
Construction in progress 83,096,410 119,469 667,483 - (2,634,719) 81,248,644 95,606,410 1,009,115 527,690,892 - (16,333,892) 607,972,524 Less accumulated
depreciation - (586,211) (146,942,377) - 2,141,273 (145,387,315) $ 95,606,410 422,904 $ 380,748,514 $ - $ (14,192,619) $ 462,585,209 $ Abode Communities
Notes to Consolidated Financial Statements
December 31, 2018 and 2017
25 Abode Development Operating
Affiliated
Nonprofit Less
December 31, 2017 Communities Entities Entities Corportions eliminations Total Land - $ 16,390,000 $ 41,275,487 $ - $ - $ 57,665,487 $ Building and improvements - - 431,249,494 - (13,033,210) 418,216,283 Furniture and equipment - 640,761 14,772,355 - - 15,413,117 Leasehold improvements - 229,614 - - - 229,614
Construction in progress 48,940,369 39,905 286 - (1,646,730) 47,333,830 65,330,369 910,280 487,297,622 - (14,679,940) 538,858,331 Less accumulated
depreciation - (470,360) (134,181,166) - 1,875,297 (132,776,229) $ 65,330,369 439,921 $ 353,116,456 $ - $ (12,804,644) $ 406,082,102 $ Abode Communities
Notes to Consolidated Financial Statements
December 31, 2018 and 2017
26 The development costs of Abode Communities' pre-development and development stage projects and resyndicated operating partnerships are recorded in construction in progress, included in property and equipment on the accompanying consolidated statements of financial position. The following is a summary by project of construction in progress as of December 31, 2018 and 2017:

Project Units Construction 2018 2017
Vista del Mar, L.P. 86 Buildings were
placed in
service
between May
and
September
2018 - $ 22,514,572 $
Rolland Curtis West,
L.P.
70 Completed in
May 2019 26,303,431 8,072,997
Rolland Curtis East,
L.P.
70 Completed in
March 2019 27,454,272 7,677,335
44000 Sahuayo Street,
LP
75 Began in
November
2017,
anticipated to
be completed
in July 2019 16,590,571 4,371,862
Rolland Curtis
Commercial QALICB,
Inc.

Community
Health Clinic
Began in June
2017,
anticipated to
be completed
in June 2019 4,219,787 1,377,893
4347 Adams, L.P. 86 Anticipated to
begin June
2019 2,291,254 1,223,092
Westmont Vista, L.P. 39 Began in
December
2018,
anticipated to
be completed
in August
2020 2,237,787 941,322
La Veranda, L.P. 77 Anticipated to
begin July
2020 1,299,758 692,949
Grandview Apartments,
L.P.
100 Anticipated to
begin June
2021 667,483 363,932
All other projects 184,300 97,876
Total construction in process 81,248,644 $ 47,333,830 $ Construction in progress
Abode Communities
Notes to Consolidated Financial Statements
December 31, 2018 and 2017
27 Note 11 - Forgiveness of debt
Fremont Building Limited Partnership had an AHP note payable to Bank of America in the amount of $744,000. During 2017, the lender recorded a Substitution of Trustee and Deed of Full Reconveyance, thereby cancelling the debt and Fremont Building Limited Partnership recorded income from the forgiveness of debt.

Heritage Court Apartments Limited Partnership had an AHP note payable to JP Morgan Chase in the original amount of $155,000. The loan was subject to forgiveness if the property remained affordable within the Federal Home Loan Bank’s Affordable Housing Program regulations. During 2017, the note payable was forgiven and Heritage Court Apartments Limited Partnership recorded income from the forgiveness of debt.

Abode Communities
Notes to Consolidated Financial Statements
December 31, 2018 and 2017
28 Note 12 - Mortgages and notes payable
Mortgages and notes payable are as follows as of December 31, 2018 and 2017:

Current portion
Long-term
portion
Principal
balance as of
12/31/2018
Accrued interest
as of
12/31/2018
Abode Communities
$ 500,000 - $ 500,000 $ 1,667 $
500,000 - 500,000 2,500
500,000 - 500,000 3,833
- 1,250,000 1,250,000 6,336
- 2,000,000 2,000,000 20,833
- - - -
991,000 - 991,000 -
128,863 - 128,863 -
- 1,500,000 1,500,000 -
2,000,000 - 2,000,000 3,361
500,000 - 500,000 -
$500,000 unsecured loan with Wells Fargo Bank, bearing interest at

2.00% per annum, interest payable in quarterly installments through October 2022. Thereafter, principal payments of $62,500 plus interest are due quarterly through maturity in October 2024.
$500,000 unsecured loan with Wells Fargo Bank, bearing interest at

2.00% per annum, interest payable in quarterly installments through June 2021. Thereafter, principal payments of $62,500 plus interest are due quarterly through maturity in June 2023.
$2,000,000 unsecured line of credit with Dignity Health, bearing interest at 5.00% per annum, interest payable in quarterly installments, due March 2019.
$1,250,000 unsecured loan with MUFG Union Bank, bearing interest at

2.25% per annum, interest payable in quarterly installments, due July 2019, with two 1-year extensions available.
$500,000 unsecured loan with US Bank, bearing interest at 3.00% per annum, interest payable in quarterly installments, due January 2022. $2,000,000 unsecured line of credit with Mercy Loan Fund, bearing interest at 6.00% per annum, interest payable monthly, due April 4 2021.
$2,000,000 unsecured loan payable to Housing Partnership Fund, bearing interest at 5.00% per annum, interest payable monthly, due January 2020.
$2,250,000 unsecured loan payable to Low Income Investment Fund, bearing interest at 5.50% per annum, interest payable monthly, due July 2019. Under certain circumstances, a portion of the loan up to $1,100,000 may be extended to May 2024.

Noninterest-bearing loan payable to Banamex USA under the Affordable Housing Program, secured by real estate owned by Terra Bella. Principal deferred until maturity in January 2028 but subject to acceleration and interest charges if the property does not comply with regulations.
$500,000 unsecured loan payable to Low Income Investment Fund, interest payable monthly at the rate of 5.75% per annum through March 31, 2019 and 6.73% per annum through maturity on August 1, 2020.
$585,000 noninterest-bearing loan payable to Wells Fargo Financial National Bank under the Affordable Housing Program, secured by real estate owned by Westmont Vista. Principal deferred until maturity on December 17, 2075 but subject to acceleration and interest charges if the property does not comply with regulations.

Abode Communities
Notes to Consolidated Financial Statements
December 31, 2018 and 2017
29 Current portion
Long-term
portion
Principal
balance as of
12/31/2018
Accrued interest
as of
12/31/2018
Development Entities
4,294,550 - 4,294,550 -
1,945,450 - 1,945,450 -
3,978,778 - 3,978,778 3,979
- - - -
- 50,001 50,001 166
2,756,800 14,480,091 17,236,891 53,953
4,410,000 - 4,410,000 169,887
3,650,633 19,067,042 22,717,675 70,230
490,000 7,410,076 7,900,076 29,479
Rolland Curtis West, L.P. construction and permanent loan, maximum proceeds of $22,000,000. Interest at one-month LIBOR + 1.75% (4.13% at December 31, 2018) payable monthly until conversion from construction to permanent loan, principal and interest at 5.45% payable monthly after conversion. All unpaid principal and interest is due 35 years from the date of conversion.

Rolland Curtis East, L.P. construction and permanent loan, maximum proceeds of $26,238,329. Interest at one-month LIBOR + 1.75% (4.13% at December 31, 2018) payable monthly until conversion from construction to permanent loan, principal and interest at 5.45% payable monthly after conversion. All unpaid principal and interest is due 35 years from the date of conversion.

Construction and permanent loan for 44000 Sahuayo Street, maximum proceeds of $19,922,978. Interest at one-month LIBOR + 2.35% (4.725% at December 31, 2018) payable monthly until conversion from construction to permanent loan, principal plus interest at 5.22% payable monthly after conversion. All unpaid principal and interest is due 15 years from the date of conversion.

Rolland Curtis West, L.P. construction loan, maximum proceeds of $1,500,000. Interest at one-month LIBOR + 1.75% (4.13% at December 31, 2018) payable monthly. All unpaid principal and interest is due June 1, 2019, with two 3-month extensions available. $5,300,000 loan from Los Angeles Housing and Community
Investment Department to Rolland Curtis West, L.P. bearing interest at 4% per annum payable from residual receipts beginning April 2019 through maturity in April 2074.
$5,320,000 construction and permanent loan for Westmont Vista, bearing interest at 3.00% per annum. Interest deferred until conversion to permanent loan. Thereafter, principal and interest payable annually from residual receipts, as defined in loan agreement.

All unpaid principal and interest is due upon maturity in December 19, 2075.

Construction and permanent loan for Westmont Vista, maximum proceeds of $16,815,116. Interest at one-month LIBOR + 1.75% (4.10% at December 31, 2018) payable monthly until conversion from construction to permanent loan, principal plus interest at 5.71% payable monthly after conversion. All unpaid principal and interest is due 15 years from the date of conversion.

Rolland Curtis Commercial QALICB, Inc. $1,945,450 promissory note secured by deed of trust bearing interest at the rate of 1% per annum, maturing on December 31, 2052. Interest only is payable annually through December 1, 2024. Beginning December 1, 2025 and annually thereafter a payment of $52,241, which includes principal and interest, is due.

Abode Communities
Notes to Consolidated Financial Statements
December 31, 2018 and 2017
30 Current portion
Long-term
portion
Principal
balance as of
12/31/2018
Accrued interest
as of
12/31/2018
2,561,000 - 2,561,000 116,099
430,000 - 430,000 19,422
1,200,000 - 1,200,000 -
2,280,000 - 2,280,000 -
Operating Entities
7,365,190 - 7,365,190 33,804
16,716,931 7,758,069 24,475,000 89,539
- 2,330,000 2,330,000 -
53,812,059 1,564,963 55,377,022 221,430
168,045,821 309,871 168,355,692 39,694,671
3,629,000 - 3,629,000 -
440,000 - 440,000 -
367,438 - 367,438 20,457
Subtotal 283,493,513 57,720,113 341,213,626 40,561,646
- - (4,596,246) -
$ 283,493,513 57,720,113 $ 336,617,380 $ 40,561,646 $
Debt issuance costs, net of accumulated amortization of $1,427,050 Loan made to ACH for the benefit of Centennial Place, annual interest at the rate of 3.00% payable from residual receipts. All outstanding principal and interest is payable upon maturity in September 2029.

Non-interest bearing permanent loans with principal either deferred until maturity or forgivable if certain terms are met. Maturity dates are through April 2075.

Permanent loans with annual payments from available excess cash or residual receipts, bearing interest from 0% to 10.5% and maturing between December 2019 and December 2073.

Permanent loans with principal and interest payable monthly, bearing interest from 3.25% to 8.17%, maturing between April 2020 and May 2047. As of the report date, the Operating Entities are in compliance with all loans.

Non-interest bearing loan secured by real estate owned by Hudson Oaks. Principal deferred until maturity in February 2029 but subject to acceleration and interest charges if the property does not comply with regulations.

Affiliated Nonprofit Corporations
$8,247,500 acquisition loan for Grandview Apartments, payable in monthly installments of interest-only at the rate of 5.33% per annum through maturity on January 30, 2021.

Construction and permanent loan for Vista del Mar, maximum proceeds of $24,475,000. Interest at one-month LIBOR + 1.80% (4.15% at December 31, 2018) payable monthly during construction period, principal plus interest at 3.61% payable monthly after conversion. All unpaid principal and interest is due upon maturity on September 1, 2049.
$2,330,000 construction loan for Vista del Mar. Interest at one-month LIBOR + 2.50% (4.85% at December 31, 2018) payable monthly. All unpaid principal and interest is due September 1, 2019. $2,280,000 acquisition loan for 4347 Adams, payable in monthly installments of interest-only at the rate of 5.15% per annum through March 31, 2019 and 5.55% per annum through maturity on August 1, 2020.
$2,600,000 loan from the Community Development Commission of the County of Los Angeles to 44000 Sahuayo Street, L.P. bearing interest at 3% per annum payable from residual receipts beginning June 2021 through maturity in June 2074.
$430,000 loan from the administrative general partner to 44000 Sahuayo Street, L.P. bearing interest at 3% per annum payable annually from available cash flow through maturity in June 2072.

Noninterest-bearing loan payable to Mississippi Valley Company under the Affordable Housing Program, secured by real estate of 44000 Sahuayo Street. Principal deferred until maturity 15 years from project completion, but subject to acceleration and interest charges if the property does not comply with regulations.

Abode Communities
Notes to Consolidated Financial Statements
December 31, 2018 and 2017
31 Current portion
as of 12/31/2018
Long-term
portion as of
12/31/2018
Principal
balance as of
12/31/2018
Accrued interest
as of
12/31/2018
Abode Communities
Nonrecourse Debt $ 1,119,863 - $ 1,119,863 $ - $
Recourse Debt 4,750,000 4,000,000 8,750,000 38,530
Total Abode Communities 4,750,000 5,119,863 9,869,863 38,530 Development Entities
Nonrecourse Debt 27,567,211 41,007,210 68,574,421 443,793 Recourse Debt 430,000 - 430,000 19,422
Total Development Entities 41,007,210 27,997,211 69,004,421 463,215 Operating Entities (nonrecourse)
Hard Debt 77,894,180 11,653,032 89,547,212 344,773
Soft Debt 171,674,821 309,871 171,984,692 39,694,671
Total Operating Entities 11,962,903 249,569,001 261,531,904 40,039,444 Affiliated Nonprofit Corporations
Nonrecourse Debt 807,438 - 807,438 20,457
Total Affiliated Nonprofit Corporations 807,438 - 807,438 20,457 Total $ 57,720,113 $ 283,493,513 $ 341,213,626 $ 40,561,646 Abode Communities
Notes to Consolidated Financial Statements
December 31, 2018 and 2017
32 Current portion
as of 12/31/2017
Long-term
portion as of
12/31/2017
Principal
balance as of
12/31/2017
Accrued interest
as of
12/31/2017
Abode Communities
Nonrecourse Debt $ 991,000 - $ $ 991,000 $ -
Recourse Debt 3,581,932 4,609,625 8,191,557 38,878
Total Abode Communities 3,581,932 5,600,625 9,182,557 38,878 Development Entities
Nonrecourse Debt 50,815,954 - 50,815,954 307,772
Recourse Debt 430,000 - 430,000 6,522
Total Development Entities - 51,245,954 51,245,954 314,294 Operating Entities (nonrecourse)
Hard Debt 55,047,278 20,135,903 75,183,181 251,119
Soft Debt 167,581,824 - 167,581,824 35,728,277
Total Operating Entities 20,135,903 222,629,102 242,765,005 35,979,396 Affiliated Nonprofit Corporations
Nonrecourse Debt 807,438 - 807,438 9,433
Total Affiliated Nonprofit Corporations 807,438 - 807,438 9,433 Total $ 23,717,835 $ 280,283,119 $ 304,000,954 $ 36,342,001 The annual maturities of long-term debt for each of the next five years and thereafter subsequent to December 31, 2018 are as follows:

Abode
Communities
Development
Entities
Operating
Entities
Affiliated
Nonprofit
Corporations Total
2019 4,750,000 $ 41,007,210 $ 11,962,903 $ - $ 57,720,113 $ 2020 2,500,000 2,280,000 1,979,137 - 6,759,137
2021 125,000 - 9,751,480 - 9,876,480
2022 750,000 - 2,036,714 - 2,786,714
2023 375,000 - 7,118,255 - 7,493,255
Thereafter 1,369,863 25,717,211 228,683,415 807,438 256,577,927 $ 69,004,421 9,869,863 $ 261,531,904 $ 807,438 $ 341,213,626 $ Interest capitalized into project development costs and property and equipment totaled $4,045,499 and $1,854,788 for the years ended December 31, 2018 and 2017, respectively.

Abode Communities
Notes to Consolidated Financial Statements
December 31, 2018 and 2017
33 The Los Angeles Housing and Community Investment Department ("HCID") loaned Abode Communities $1,886,852 at 5% per annum for the purpose of developing affordable housing. HCID allowed Abode Communities to subsequently assign the real property and its rights and obligations under the loan agreement to Parthenia Housing Associates, L.P., in which Abode Communities participates as the General Partner. Because the funds were part of a government grant that required the loan to remain with Abode Communities, the security interest for the HCID loan is cross collateralized against real property assigned to the limited partnership.

Concurrent with the execution of the loan, Abode Communities received a $1,886,852 promissory note from the limited partnership, the terms of which are identical to the loan payable to HCID.

Proceeds due under the note receivable will be used to offset the identical payments due under the note payable. As such, Abode Communities has not reflected the note, interest income and interest expense in the consolidated financial statements.

Financial instruments
Evergreen entered into an interest rate swap agreement (the "swap agreement") with Union Bank (the "swap provider") to reduce the impact of changes in interest rates. Under the terms of the swap agreement, Evergreen has agreed to pay interest to the swap provider at a fixed rate of 4.19%, exclusive of any fees, add-ons or other trustee or bank charges, while the swap provider has agreed to make Evergreen's required monthly mortgage payment. The notional amount of the swap agreement is equal to the outstanding amount of the bonds. The swap agreement expires upon payment in full of the mortgage.

Laurel Village entered into two interest rate swap agreements (the "swap agreements") with Union Bank (the "swap provider") to reduce the impact of changes in interest rates. Under the terms of the swap agreements, Laurel Village has agreed to pay interest to the swap provider at fixed rates of

4.90% and 4.98%, exclusive of any fees, add-ons or other trustee or bank charges, while the swap provider has agreed to make Laurel Village's required monthly mortgage payments. The notional amounts of the swap agreements are equal to the outstanding amount of the loans. The swap agreements expire upon payment in full of the respective notes.

Selma entered into an interest rate swap agreement (the "swap agreement") with Union Bank (the "swap provider") to reduce the impact of changes in interest rates. The swap agreement became effective April 1, 2017. Under the terms of the swap agreement, Selma has agreed to pay interest to the swap provider at a fixed rate of 5.56% exclusive of any fees, add-ons or other trustee or bank charges, while the swap provider has agreed to make Selma's required monthly mortgage payment.

The notional amount of the swap agreement is equal to the outstanding amount of the loan. The swap agreement expires upon payment in full of the note.

Derivative instruments not meeting the criteria for hedge accounting are recorded at fair value on the consolidated statement of financial position with any change in fair value reflected in the consolidated statement of activities.

A liability for the fair market value of the interest rate swaps as of December 31, 2018 and 2017 in the amounts of $992,092 and $1,406,489, respectively, have been recorded, which represents the fair value of the future differences in interest to be paid and received under the swap agreements over the remaining term of the swap agreements, and is included in fair market value of interest rate swap on the consolidated statements of financial position. For the years ended December 31, 2018 and 2017, a gain on fair value of $414,396 and $195,712, respectively, has been recognized and is included in revenue on the consolidated statements of activities.

Abode Communities
Notes to Consolidated Financial Statements
December 31, 2018 and 2017
34 Note 13 - Fair value
As of December 31, 2018 and 2017, the liability which represents the fair value of the interest rate swaps in the amounts of $992,092 and $1,406,489, respectively, is classified within Level 2 of the fair value hierarchy. No other assets or liabilities are measured at fair value as of December 31, 2018 and 2017. The following table presents the financial liability that was measured at fair value on a recurring basis as of December 31, 2018 and 2017:

Level 1 Level 2 Level 3 Total

Interest rate swaps at
December 31, 2018 $ - $ 992,092 $ - $ 992,092

Interest rate swaps at
December 31, 2017 $ - $ 1,406,489 $ - $ 1,406,489
On a recurring basis, the Partnerships measure the interest rate swaps at the estimated fair value.

In determining the fair value of the interest rate swap derivatives, management uses the present value of expected cash flows based on the market observable interest rate yield curve commensurate with the term of the instrument. The Partnerships incorporate credit valuation adjustments to appropriately reflect both the Partnerships’ nonperformance risk and that of the respective counterparty in the fair value measurement. The credit valuation adjustments utilize Level 3 inputs, such as estimates of current credit spreads, to evaluate the likelihood of default by either the respective counterparty or the Partnerships. However, management has determined that as of December 31, 2018 and 2017, the impact of the credit valuation adjustments was not significant to the overall valuation of the swaps. As a result, the fair value of the swaps are considered to be based primarily on Level 2 inputs.

Note 14 - Grants payable
Grants payable consists of the following as of December 31:
2018 2017
TCAC grants payable 6,876,285 $ 7,083,498 $
CDC grant payable 225,000 231,250
$ 7,314,748 7,101,285 $
TCAC grants payable represent funds received by Operating Entities from the California Tax Credit Allocation Committee ("TCAC") through the American Recovery and Reinvestment Act of 2009, Section 1602 award program in the form of non-interest bearing forgivable loans. The loans are secured by deeds of trust and assignments of rents on the underlying real property interests, and repayment is required only in the event the Operating Entities do not operate the housing projects in compliance with regulatory and program requirements during their 15-year compliance periods. The TCAC grants are being recognized as grant revenue over the 40-year estimated useful life of the buildings and improvements. TCAC grant revenue recognized for each of the years ended December 31, 2018 and 2017 was $207,213.

Abode Communities
Notes to Consolidated Financial Statements
December 31, 2018 and 2017
35 CDC grants payable represent funds received from the Community Development Commission of the County of Los Angeles to make repairs and improvements to the project in the form of a grant which is forgivable over a seven-year period, so long as the borrower annually complies with the terms of the grant agreement. The grant proceeds are being recognized as grant revenue over the 40-year estimated useful life of the related improvements. Grant revenue recognized for each of the years ended December 31, 2018 and 2017 was $6,250.

Note 15 - Net assets with donor restrictions
The following revenues are recorded as net assets with donor restrictions as of December 31, 2018 and 2017:

Grant received from Purpose Period 2018 2017
Rose Hills Foundation Resident Services 1/1/2018-12/15/2019 100,000 $ 200,000 $ Annenberg Foundation Resident Services 11/15/2017-12/31/2018 88,889 - Union Bank Foundation General Operating 1/1/2018-12/31/2020 60,000 90,000 Wells Fargo Foundation General Operating 1/1/2018-12/31/2018 - 50,000 Citi Community Capital Fundraising Event 2018 - 30,000
St. Johh's Well Child and
Family Center, Inc.

Rolland Curtis
Capital Campaign 3/29/17-9/30/2018 - 250,000
California Community Foundation General Operating 7/1/2018-6/30/2020 - 86,250 California Community Foundation General Operating 7/1/2016-8/1/2020 100,000 100,000 Various Resident Services Various 5,000 21,500
Total net assets with donor restriction 351,250 $ 830,389 $ Note 16 - Retirement plan
Abode Communities maintains a Voluntary 401(k) Retirement Plan covering all eligible employees of Abode Communities. The plan provides for voluntary employee contributions and Abode Communities matching of up to 4% of employee annual salary. All employer and employee contributions are immediately vested. Matching contributions to the plan for the years ended December 31, 2018 and 2017 totaled $218,850 and $197,080, respectively.

Note 17 - Operating leases
Abode Communities leases its office facilities under an operating lease which expires August 31, 2025. Monthly rent as of December 31, 2018 and 2017 was $41,415 and $40,208, respectively, with annual increases of 3%.

Abode Communities leases its photocopying equipment under various operating lease arrangements which expire between August 2022 and October 2023. Minimum monthly payments are $7,406.

Abode Communities
Notes to Consolidated Financial Statements
December 31, 2018 and 2017
36 Rent incurred for the years ended December 31, 2018 and 2017 was $547,584 and $487,394, respectively. The future minimum lease payments for each of the next five years and thereafter subsequent to December 31, 2018 are as follows:
2019 588,335 $
2020 603,319
2021 618,752
2022 613,491
2023 566,317
Thereafter 974,621
$ 3,964,834
Note 18 - Related party transactions
In the ordinary course of business, Abode Communities has significant related party transactions with affiliates. It provides a considerable amount of funding in connection with the development of projects. It also provides architectural services, development services, project management services, social services and property management services. In certain cases, Abode Communities pays operating expenses on behalf of affiliates, which are reimbursed to Abode Communities on a monthly basis. In certain instances, however, such as when individual properties may be experiencing cash flow difficulties, repayment may be delayed, providing the individual properties with a source of funds.

Abode Communities earns architectural fees, asset management fees, social services fees, accounting fees and property management fees in connection with services rendered to consolidated affiliated entities.

The amounts loaned by Abode Communities primarily represent development loans to affiliates.

These loans are unsecured and due on demand, and some bear interest.

Abode Communities
Notes to Consolidated Financial Statements
December 31, 2018 and 2017
37 Note 19 - Availability and liquidity
The following represents Abode Communities’ financial assets at December 31, 2018:

Abode
Communities Consolidated
Cash and cash equivalents 6,087,798 $ 18,410,915 $
Receivables 4,588,398 618,015
Other current assets 563,149 979,532
Total current financial assets 11,239,345 20,008,462
Less amounts not available to be used within one
year
Current liabilities 2,126,448 11,132,580
Net assets with donor restrictions 351,250 351,250
Financial assets available to meet general
expenditures over the next twelve months $ 8,524,632 8,761,647 $ Abode Communities’ financial assets are intended to be sufficient to meet its general expenditures, liabilities and other obligations as they become due. As part of its liquidity plan, excess cash is invested in short-term investments, including money market accounts and certificates of deposit, or used as part of income generating programs.

Note 20 - Guaranties
In its role as general partner of the various Operating Entities, Abode Communities is liable for recourse liabilities. These projects have been allocated low-income housing tax credits pursuant to Internal Revenue Code Section 42. In connection with their general partnership interests, certain guarantees have been made to the partnerships, including the following:

Development deficit and repurchase guarantees
Abode Communities is obligated to pay any development cost deficits or, at the option of the investor limited partner, to purchase the interest of the investor limited partner if the project is not completed or if permanent financing has not been obtained by specific dates. This obligation typically terminates upon funding of permanent project financing. As of December 31, 2018 and 2017, no amounts were due under this guaranty.

Construction loan repayment and completion guarantees
Abode Communities has provided repayment guarantees for construction loans as well as unlimited construction completion guarantees in favor of certain lenders for the development and lease-up of the project, should the project not receive expected permanent financing, or should the cost of the development exceed permanent financing received. There are no significant delays or cost overruns in current development projects. As of December 31, 2018 and 2017, no amounts were due under this guaranty.

Abode Communities
Notes to Consolidated Financial Statements
December 31, 2018 and 2017
38 Operating deficit guaranty
Abode Communities and ACH are each obligated to make non-interest bearing loans to cover operating cash shortfalls which are repayable through available cash flow. The guarantees are for various lengths of time, as defined in the limited partnership agreements. As of December 31, 2018 and 2017, Abode Communities has one outstanding advance of $252,451 made under this guaranty, which is reported net of allowance for doubtful accounts of $252,451 on the accompanying consolidated statements of financial position. The following are the projects that are under the operating deficit guaranty and the maximum amount of the guaranty:

Project Amount
Evergreen Apartments, L.P. $ 810,000
Las Brisas Community Housing Limited Partnership 10,000 Las Brisas Community Housing II, L.P. 296,800
New Dana Strand Partners I, L.P. 425,000
Vista del Mar, L.P. 784,000
Orange Grove Gardens, L.P. 10,000
Glassell Park, L.P. 435,000
Sherman Way Community Housing, L.P. 520,000
Kittridge Housing, L.P. 680,000
Laurel Village, L.P. 590,800
Selma Community Housing, L.P. 464,000
New Park Place, L.P. 318,791
Viviendas Del Valle, L.P. 552,551
Sun Sage Homes, L.P. 380,000
Recapture guaranty
In the event of a recapture of tax credits previously received by the investor limited partners/members, Abode Communities and ACH shall be obligated to reimburse the investor limited partner or investment member for any recaptured credits plus any associated penalties, interest or additional taxes due. Abode Communities and ACH shall not be liable for a recapture event caused by a change in law or actions of the investor or special limited partner. As of December 31, 2018 and 2017, no amounts were due under these guaranties.

Note 21 - Concentration of credit risk
Abode Communities maintains cash with various financial institutions. All reserves are held in Abode Communities' name. At times, these balances may exceed the federal insurance limits; however, Abode Communities has not experienced any losses with respect to its bank balances in excess of government provided insurance. Management believes that no significant concentration of credit risk exists with respect to these cash balances at December 31, 2018.

Note 22 - Commitments and contingencies
Grant and property use restrictions
The properties owned and operated by Abode Communities are typically developed using monies provided by grants and restrictive, low-interest rate loans. The terms of these loans restrict the use of the property and generally require it be rented to low-income qualified tenants for the period of the grant or related loan term. Abode Communities also receives grants with restrictions other than Abode Communities
Notes to Consolidated Financial Statements
December 31, 2018 and 2017
39 property use. Failure to comply with the terms of the grant or the loans would result in a requirement to repay a portion or all of the proceeds received.

Rental assistance contracts
Ten of the properties owned by Abode Communities have entered into rental assistance contracts with HUD or a local housing authority. The contracts have various terms and require the affiliate projects to operate as a low-income housing property and to obtain approval of all rent increases from HUD or the local housing authority.

Low-income housing tax credits
In connection with the Operating Entities who receive low-income housing tax credits, each Operating Entity's low-income housing tax credits are contingent on its ability to maintain compliance with applicable sections of Section 42. Failure to maintain compliance with occupant eligibility and/or unit gross rent, or to correct noncompliance within a specified time period, could result in recapture of previously taken tax credits plus interest. In addition, such potential noncompliance may require an adjustment to the contributed capital by the limited partner.

Forgivable interest
Certain Operating Entities have entered into loans which contain terms that limit the amount of accrued but unpaid interest that may be payable. Generally, accrued but unpaid interest as of the time the loan is due shall be payable only to the extent the fair market value of the Project exceeds the principal balance of the loan plus the principal balance of any loans senior to the loan.

Due to this contingency, interest has not been accrued because the future fair market value of the property at loan maturity is not expected to be sufficient. The following is a schedule of contingent interest as of December 31 that could be due if the fair market value of the property is sufficient:
2018 2017
Centennial Place Limited Partnership 1,577,000 $ 1,311,000 $ Clark Residence Limited Partnership 4,112,000 3,956,000 Fremont Building Limited Partnership 5,387,000 3,871,000 Parthenia Housing Associates, L.P. 2,016,000 1,922,000
Villa Parke Homes 625,000 592,000
$ 11,652,000 13,717,000 $
Litigation
Abode Communities is subject to lawsuits and claims which arise out of the normal course of its activities. In the opinion of management, based upon the opinions of legal counsel, the disposition of any and all such actions of which it is aware will not have a material effect on the financial position of Abode Communities.

Morgan Place, L.P., Sherman Way Community Housing, L.P. and Hart Village, L.P., along with 60 other housing property owners with Community Redevelopment Agency of the City of Los Angeles ("CRA") funding, were listed as nominal defendants in the lawsuit brought against the City of Los Angeles and the Community Redevelopment Agency of the City of Los Angeles by the Plaintiffs:

Independent Living Center of Southern California, Fair Housing Council of San Fernando Valley and Communities Actively Living Independent and Free.

Abode Communities
Notes to Consolidated Financial Statements
December 31, 2018 and 2017
40 The complaint alleges that CRA engaged in a pattern and practice of discrimination by failing to ensure apartment complexes that were funded with CRA funds were accessible to people with disabilities. Management does not anticipate any material monetary cost, physical corrections or mitigations.

Economic concentrations
Abode Communities owns, operates and invests in rental property in Southern California, whose future operations could be affected by changes in economic or other conditions in that geographical area or by changes in federal low-income housing subsidies or the demand for such housing.

Note 23 - Subsequent events
Events that occur after the statement of financial position date but before the consolidated financial statements were available to be issued must be evaluated for recognition or disclosure. The effects of subsequent events that provide evidence about conditions that existed at the statement of financial position date are recognized in the accompanying consolidated financial statements.

Subsequent events which provide evidence about conditions that existed after the statement of financial position date require disclosure in the accompanying notes. Management evaluated all activity of Abode Communities through June 25, 2019, the date the consolidated financial statements were available to be issued, and concluded that no subsequent events have occurred that would require recognition in the consolidated financial statements or disclosure in the notes to the consolidated financial statements except as noted below:

In April 2019, Abode Community Housing sold the scattered site multifamily rental project known as the DCDC portfolio. The sales price was approximately $11,551,500, and net proceeds to Abode Communities and Affiliates were approximately $2,925,000.

In May 2019, Abode Communities obtained predevelopment loans totaling $5,000,000 from three lenders under an intercreditor agreement. Interest is payable quarterly at rates ranging from 2% - 3.95%. The loans mature in May 2024.

Supplementary Information
Abode Communities and Affiliates
Consolidating Statements of Financial Position
December 31, 2018
42 Abode
Communities
Development
Entities
Operating
Entities
Affiliated
Nonprofit
Corporations Eliminations Total
Assets
Cash and cash equivalents 6,361,795 $ 4,997,995 $ 7,198,698 $ 126,424 $ - $ 18,684,912 $ Restricted reserves and deposits 824,486 301,563 11,862,442 - - 12,988,491 Accounts receivable, net 1,923,011 - 125,684 - (1,618,097) 430,598 Grants receivable 187,416 - - - - 187,416
Notes receivable, net 14,346,758 - - 1,100,598 (11,152,806) 4,294,550 Interest receivable 449,886 - - 38,251 (488,137) -
Prepaid expenses 563,149 17,672 398,712 - - 979,533
Due from affiliates 1,605,797 - 3,113 2,050,757 (3,475,141) 184,526 Advances to projects, net 1,784,565 - - - (1,784,565) - Development fee and interest receivable 12,455,679 - - - (12,455,679) - Deposits 219,396 2,185,000 51,250 - (2,000,000) 455,646 Investments - other 365,886 - - - - 365,886
Property and equipment, net 422,904 95,606,410 380,748,514 - (14,192,619) 462,585,209 Deferred fees, net - - 660,978 - - 660,978
Prepaid ground lease - - 6,428,612 - - 6,428,612
Other assets 90,569 14,760 1,266,719 - - 1,372,048
Total assets 41,601,297 $ 103,123,400 $ 408,744,722 $ 3,316,030 $ (47,167,044) $ 509,618,405 $ Abode Communities and Affiliates
Consolidating Statements of Financial Position
December 31, 2018
See Independent Auditor's Report.
43 Abode
Communities
Development
Entities
Operating
Entities
Affiliated
Nonprofit
Corporations Eliminations Total
Liabilities and Net Assets
Liabilities
Accounts payable 336,897 $ 12,892,113 $ 4,079,511 $ - $ - $ 17,308,521 $ Prepaid rents - - 218,659 - - 218,659
Accrued vacation 280,497 - - - - 280,497Accrued interest payable 38,530 663,273 42,283,543 20,457 (2,444,157) 40,561,646 Security deposit liability - - 1,345,798 - - 1,345,798
Deferred revenue 10,371,500 - 302,966 - (8,489,284) 2,185,182 Partnership investments 597,127 - - 4,160,287 (4,748,286) 9,128 Development fee payable - 4,974,448 8,434,493 - (12,348,967) 1,059,974 Due to affiliates 9,584 4,029,786 3,838,138 416,439 (8,293,947) - Fair market value of interest rate swaps - - 992,092 - - 992,092 Grants payable - - 7,101,285 - - 7,101,285
Mortgages and notes payable, net 9,850,908 75,853,912 269,312,894 2,807,438 (21,207,772) 336,617,380 Total liabilities 21,485,043 98,413,532 337,909,379 7,404,621 (57,532,413) 407,680,162 Net assets
Without donor restrictions, controlling 19,765,004 93,992 (21,206,269) (4,088,591) 10,578,369 5,142,505 Without donor restrictions, noncontrolling - 4,615,876 92,041,612 - (213,000) 96,444,488 With donor restrictions 351,250 - - - - 351,250
Total net assets 20,116,254 4,709,868 70,835,343 (4,088,591) 10,365,369 101,938,243 Total liabilities and net assets 41,601,297 $ 103,123,400 $ 408,744,722 $ 3,316,030 $ (47,167,044) $ 509,618,405 $ Abode Communities and Affiliates
Consolidating Statements of Financial Position
December 31, 2017
44 Abode
Communities
Development
Entities
Operating
Entities
Affiliated
Nonprofit
Corporations Eliminations Total
Assets
Cash and cash equivalents 7,376,398 $ 7,241,771 $ 6,255,515 $ 133,809 $ - $ 21,007,493 $ Restricted reserves and deposits 2,274,554 524,090 12,362,713 - - 15,161,357 Accounts receivable, net 2,399,065 - 214,681 - (2,060,198) 553,548 Grants receivable 455,861 - - - - 455,861
Notes receivable, net 9,007,444 - - 1,107,965 (5,820,859) 4,294,550 Interest receivable 282,222 - - 9,433 (291,655) -
Prepaid expenses 381,169 - 365,453 - - 746,622
Due from affiliates 1,215,444 - - 2,051,022 (3,264,622) 1,844 Advances to projects, net 797,324 - - - (797,324) -
Development fee and interest receivable 9,571,828 - - - (9,571,828) - Deposits 55,158 2,575,000 39,112 - (2,000,000) 669,270
Investments - other 350,886 - - - - 350,886
Property and equipment, net 439,921 65,330,369 353,116,456 - (12,804,644) 406,082,102 Deferred fees, net - - 661,145 - - 661,145
Prepaid ground lease - - 2,731,742 - - 2,731,742
Other assets 45,004 40,341 1,294,998 - - 1,380,343
Total assets 34,652,278 $ 75,711,571 $ 377,041,815 $ 3,302,229 $ (36,611,130) $ 454,096,763 $ Abode Communities and Affiliates
Consolidating Statements of Financial Position
December 31, 2017
See Independent Auditor's Report.
45 Abode
Communities
Development
Entities
Operating
Entities
Affiliated
Nonprofit
Corporations Eliminations Total
Liabilities and Net Assets
Liabilities
Accounts payable 250,409 $ 10,174,596 $ 4,908,034 $ 6,609 $ (179) $ 15,339,469 $ Prepaid rents - - 172,144 - - 172,144
Accrued vacation 306,672 - - - - 306,672Accrued interest payable 38,877 455,113 37,862,027 9,433 (2,023,449) 36,342,001 Security deposit liability - - 1,257,856 - - 1,257,856
Deferred revenue 7,789,263 - 215,935 - (6,836,520) 1,168,678 Partnership investments 8,157 - - 2,658,443 (2,657,556) 9,044 Development fee payable - 2,270,230 7,193,701 - (9,463,931) - Due to affiliates 6,516 3,160,767 3,533,309 367,518 (7,068,110) - Fair market value of interest rate swaps - - 1,406,489 - - 1,406,489 Grants payable - - 7,314,748 - - 7,314,748
Mortgages and notes payable, net 9,151,599 54,074,420 249,674,352 2,807,438 (15,875,825) 299,831,984 Total liabilities 17,551,493 70,135,126 313,538,595 5,849,441 (43,925,570) 363,149,085 Net assets
Without donor restrictions, controlling 16,270,396 12,636 (19,224,229) (2,547,212) 7,527,440 2,039,031 Without donor restrictions, noncontrolling - 5,563,809 82,727,449 - (213,000) 88,078,258 With donor restrictions 830,389 - - - - 830,389
Total net assets 17,100,785 5,576,445 63,503,220 (2,547,212) 7,314,440 90,947,678 Total liabilities and net assets 34,652,278 $ 75,711,571 $ 377,041,815 $ 3,302,229 $ (36,611,130) $ 454,096,763 $ Abode Communities and Affiliates
Consolidating Statements of Activities
Year Ended December 31, 2018
46 With donor
restrictions
Abode
Communities
Development
Entities
Operating
Entities
Affiliated
Nonprofit
Corporations Eliminations
Abode
Communities Total
Changes in net assets
Revenue and support
Grants and contributions 866,278 $ - $ 213,463 $ - $ - $ 91,250 $ 1,170,991 $ Government grants 4,220,076 - - - - - 4,220,076
Development fees 4,219,294 - - - (29,234) - 4,190,060
Architectural and consulting 2,459,202 - - - (1,522,953) - 936,249 Resident services 695,180 - - - (623,352) - 71,828
Property and partnership management fees 2,505,849 - - - (2,410,839) - 95,010Rental income 22,000 - 23,520,678 - - - 23,542,678 Gain on FMV of interest rate swap - - 414,396 - - - 414,396 Miscellaneous revenue 138,321 1,868 313,114 - (7,367) - 445,936 Interest income 401,978 5,324 9,611 18,068 (58,547) - 376,434 Net assets released from restriction 570,389 - - - - (570,389) - Total revenue and support 16,098,567 7,192 24,471,262 18,068 (4,652,292) (479,139) 35,463,658 Expenses
Salaries 5,781,063 - 3,210,318 - (552,524) - 8,438,857Payroll taxes 414,165 - 218,690 - (39,470) - 593,385 Employee benefits 537,981 - 506,520 - (58,497) - 986,004Consultants 1,368,487 - 370,927 7,367 (376,993) - 1,369,788Rent 500,938 - 102,764 - (56,118) - 547,584Office expenses 528,495 15,522 408,043 271 (393,372) - 558,959Training, travel and parking 157,362 - 5,630 204 - - 163,196Property and partnership management - 32,500 2,265,436 - (2,189,322) - 108,614Resident services 53,803 - 888,039 - (623,352) - 318,490 Without donor restrictions
Abode Communities and Affiliates
Consolidating Statements of Activities
Year Ended December 31, 2018
See Independent Auditor's Report.
47 With donor
restrictions
Abode
Communities
Development
Entities
Operating
Entities
Affiliated
Nonprofit
Corporations Eliminations
Abode
Communities Total
Without donor restrictions
Repairs and maintenance 18,944 - 3,531,877 - - - 3,550,821 Utilities and telephone 68,131 - 2,790,174 117 - - 2,858,422 Property tax and insurance 252,654 - 1,885,582 - (27,298) - 2,110,938 Interest 391,969 - 8,973,690 - (312,005) - 9,053,654
Legal and accounting 108,355 - 589,763 6,869 (247,565) - 457,422 Bad debt expense 470,000 - 149,017 - (470,000) - 149,017 Real estate development 36,311 - 204,232 2,087 - - 242,630 Fundraising expenses 164,351 164,351
Grant expense 50,000 - - - - - 50,000
Depreciation and amortization 144,414 - 13,128,742 - (265,976) - 13,007,180 Total expenses 11,047,423 48,022 39,229,444 16,915 (5,612,492) - 44,729,312 Change in net assets prior to equity in income (loss) from investment in partnership interests 5,051,144 (40,830) (14,758,182) 1,153 960,200 (479,139) (9,265,654) Equity in income (loss) from investment in partnership interests (1,645,196) - - (1,542,532) 3,193,227 - 5,499 Change in net assets 3,405,948 $ (40,830) $ (14,758,182) $ (1,541,379) $ 4,153,427 $ (479,139) $ (9,260,155) $ Change in net assets, controlling 3,405,948 $ (41,898) $ (2,872,624) $ (1,541,379) $ 4,153,427 $ (479,139) $ 2,624,335 $ Change in net assets, noncontrolling - 1,068 (11,885,558) - - - (11,884,490) Total change in net assets 3,405,948 $ (40,830) $ (14,758,182) $ (1,541,379) $ 4,153,427 $ (479,139) $ (9,260,155) $ Abode Communities and Affiliates
Consolidating Statements of Activities
Year Ended December 31, 2017
48 With donor restrictions
Abode
Communities
Development
Entities
Operating
Entities
Affiliated
Nonprofit
Corporations Eliminations
Abode
Communities Total
Changes in net assets
Revenue and support
Grants and contributions 815,103 $ - $ 213,463 $ - $ - $ 730,389 $ 1,758,955 $ Development fees 7,113,133 - - - (10,779) - 7,102,354Architectural and consulting 3,839,119 - - - (1,972,115) - 1,867,004Resident services 615,984 - - - (562,148) - 53,836Property and partnership management fees - 2,522,848 - - (2,396,491) - 126,357Rental income - - 22,219,699 - - - 22,219,699 Gain on FMV of interest rate swaps - - 195,712 - - - 195,712 Miscellaneous revenue 9,405 11,901 291,174 850 - - 313,330Forgiveness of debt - 98,451 899,000 - (98,451) - 899,000Interest income 237,292 101 7,673 342 (29,730) - 215,678Net assets released from restriction 1,801,104 - - - - (1,801,104) - Total revenue and support 16,953,988 110,453 23,826,721 1,192 (5,069,714) (1,070,715) 34,751,925 Expenses
Salaries 5,434,416 - 3,267,929 - (659,713) - 8,042,632
Payroll taxes 388,871 - 210,165 - (46,316) - 552,720
Employee benefits 478,318 - 518,298 - (65,231) - 931,385 Consultants 1,337,842 - 193,082 - (528,348) - 1,002,576 Rent 478,938 - 77,624 - (69,168) - 487,394
Office expenses 461,864 15,007 361,378 266 (520,710) - 317,805 Training, travel and parking 126,898 - 4,851 - - - 131,749 Property and partnership management - 21,576 2,170,480 - (2,127,181) - 64,875 Resident services 42,467 - 826,319 - (562,148) - 306,638 Without donor restrictions
Abode Communities and Affiliates
Consolidating Statements of Activities
Year Ended December 31, 2017
See Independent Auditor's Report.
49 With donor restrictions
Abode
Communities
Development
Entities
Operating
Entities
Affiliated
Nonprofit
Corporations Eliminations
Abode
Communities Total
Without donor restrictions
Repairs and maintenance 4,213 - 2,668,571 - - - 2,672,784 Utilities and telephone 62,800 - 2,494,077 - - - 2,556,877 Property tax and insurance 229,031 - 2,267,138 - (32,273) - 2,463,896 Interest 295,885 - 8,608,656 - (288,515) - 8,616,026
Legal and accounting 143,351 - 723,386 8,441 (202,205) - 672,973 Bad debt expense 676,776 - 69,647 98,733 (698,451) - 146,705 Real estate development 32,010 89,805 97,960 - (117,460) - 102,315 Fundraising expenses 26,624 - - - - - 26,624
Grant expense 28,171 - - - - - 28,171
Depreciation and amortization 143,756 - 12,242,470 - (268,513) - 12,117,713 Total expenses 10,392,231 126,388 36,802,031 107,440 (6,186,232) - 41,241,858 Change in net assets prior to equity in gain (loss) from investment in partnership interests (15,935) 6,561,757 (12,975,310) (106,248) 1,116,518 (1,070,715) (6,489,933) Equity in gain (loss) from investment in partnership interests - (1,405,373) - (534,386) 1,443,027 - (496,732) Change in net assets 5,156,384 $ (15,935) $ (12,975,310) $ (640,634) $ 2,559,545 $ (1,070,715) $ (6,986,665) $ Change in net assets, controlling 5,156,384 $ (16,735) $ (1,398,119) $ (640,634) $ 2,559,545 $ (1,070,715) $ 4,589,726 $ Change in net assets, noncontrolling - 800 (11,577,191) - - - (11,576,391) Total change in net assets 5,156,384 $ (15,935) $ (12,975,310) $ (640,634) $ 2,559,545 $ (1,070,715) $ (6,986,665) $ Abode Communities and Affiliates
Consolidating Statements of Changes in Net Assets
Year Ended December 31, 2018
See Independent Auditor's Report.
50 Abode
Communities
Development
Entities
Operating
Entities
Affiliated
Nonprofit
Corporations Eliminations Total
Controlling interest
Beginning net assets without donor restrictions 16,270,396 $ 12,636 $ (19,224,229) $ (2,547,212) $ 7,527,440 $ 2,039,031 $ Contributions - 170,000 1,093,775 - (1,263,775) -
Distributions - - (161,277) - 161,277 -
Transfer 88,660 - (88,660) - - -
Transfer of interest - (46,746) 46,746 - - -
Change in net assets without donor restrictions 3,405,948 (41,898) (2,872,624) (1,541,379) 4,153,427 3,103,474 Ending net assets without donor restrictions, controlling interest $ 93,992 19,765,004 $ (21,206,269) $ (4,088,591) $ 10,578,369 $ 5,142,505 $ Noncontrolling interest
Beginning net assets without donor restrictions - $ 5,563,809 $ 82,727,449 $ - $ (213,000) $ 88,078,258 $ Contributions - 800,100 19,573,163 - - 20,373,263
Distributions - - (67,543) - - (67,543)
Syndication costs - - (55,000) - - (55,000)
Transfer - (1,749,101) 1,749,101 - - -
Change in net assets without donor restrictions - 1,068 (11,885,558) - - (11,884,490) Ending net assets without donor restrictions, noncontrolling interest $ 4,615,876 - $ 92,041,612 $ - $ (213,000) $ 96,444,488 $ Net assets - with donor restrictions, beginning of year 830,389 $ - $ - $ - $ - $ 830,389 $ Change in net assets with donor restrictions 91,250 - - - - 91,250Release of net assets with donor restrictions (570,389) - - - - (570,389) Subtotal (479,139) - - - - (479,139)
Net assets - with donor restrictions, end of year 351,250 $ - $ - $ - $ - $ 351,250 $ Abode Communities and Affiliates
Consolidating Statements of Changes in Net Assets
Year Ended December 31, 2017
See Independent Auditor's Report.
51 Abode
Communities
Development
Entities
Operating
Entities
Affiliated
Nonprofit
Corporations Eliminations Total
Controlling interest
Beginning net assets without donor restrictions $ 29,571 10,611,632 $ (17,672,148) $ (1,579,829) $ 4,989,364 $ (3,621,410) $ Contributions - 50 442,594 - (442,644) -
Distributions - (250) (420,925) - 421,175 -
Transfer 502,380 - (175,631) (326,749) - -
Change in net assets without donor restrictions 5,156,384 (16,735) (1,398,119) (640,634) 2,559,545 5,660,441 Ending net assets without donor restrictions, controlling interest $ 12,636 16,270,396 $ (19,224,229) $ (2,547,212) $ 7,527,440 $ 2,039,031 $ Noncontrolling interest
Beginning net assets without donor restrictions $ 1,747,536 - $ 74,334,657 $ - $ (262,112) $ 75,820,081 $ Contributions - 3,815,473 20,331,036 - 49,112 24,195,621 Distributions - - (58,553) - - (58,553)
Syndication costs - - (302,500) - - (302,500)
Change in net assets without donor restrictions - 800 (11,577,191) - - (11,576,391) Ending net assets without donor restrictions, noncontrolling interest $ 5,563,809 - $ 82,727,449 $ - $ (213,000) $ 88,078,258 $ Net assets - with donor restrictions, beginning of year 1,901,10 $ - 4 $ - $ - $ - $ 1,901,104 $ Change in net assets with donor restrictions 730,389 - - - - 730,389 Release of net assets with donor restrictions (1,801,104) - - - - (1,801,104) Subtotal (1,070,715) - - - - (1,070,715)
Net assets - with donor restrictions, end of year 830,389 $ - $ - $ - $ - $ 830,389 $ Abode Communities and Affiliates
Consolidating Statements of Cash Flows
Year Ended December 31, 2018
52 Abode
Communities
Development
Entities
Operating
Entities
Affiliated
Nonprofit
Corporations Eliminations Total
Cash flows from operating activities
Increase (decrease) in net assets without donor restriction $ (40,830) 3,405,948 $ (14,758,182) $ (1,541,379) $ 4,153,427 $ (8,781,016) $ Decrease in net assets with donor restriction - (479,139) - - - (479,139)Adjustments to reconcile increase (decrease) in net assets to net cash provided by (used in) operating activities Depreciation and amortization 144,414 - 13,128,742 - (265,976) 13,007,180 Ground lease expense - - 76,958 - - 76,958
Gain on FMV of interest rate swaps - - (414,397) - - (414,397) Income (loss) on investments 1,645,196 - - 1,542,532 (3,193,227) (5,499) Amortization of grants payable - - (213,463) - - (213,463)Amortization of debt issuance costs 34,523 - 427,276 - - 461,799 (Increase) decrease in
Accounts receivable 476,054 - 88,997 - (442,101) 122,950 Grants receivable 268,445 - - - - 268,445
Prepaid expenses (181,980) (17,672) (33,259) - - (232,911) Developer fee receivable (2,883,851) - - - 2,883,851 -
Deposits (164,238) (10,000) (12,138) - (186,376)
Other assets (45,565) 25,581 28,279 - - 8,295
Increase (decrease) in
Accounts payable 86,488 - (3,069,726) (6,609) 179 (2,989,668) Prepaid rents - - 46,515 - - 46,515
Accrued vacation (26,175) - - - - (26,175)
Accrued interest payable (347) 208,160 4,421,516 11,024 (420,708) 4,219,645 Security deposit liability - - 87,942 - - 87,942
Deferred revenue 2,582,237 - 87,031 - (1,652,764) 1,016,504 Net cash provided by (used in) operating activities 165,239 4,862,010 (107,909) 5,568 1,062,681 5,987,589 Abode Communities and Affiliates
Consolidating Statements of Cash Flows
Year Ended December 31, 2018
53 Abode
Communities
Development
Entities
Operating
Entities
Affiliated
Nonprofit
Corporations Eliminations Total
Cash flows from investing activities
Investment in property and equipment (43,467,077) (127,397) (18,585,846) - (3,740,059) (65,920,379) Purchase of investment - (15,000) - - - (15,000)
Net (payment of) advances to projects - (987,241) - - 987,241 - Net (payment of) advances to affiliates - (6,950,489) 301,716 (12,953) 5,615,608 (1,046,118) Payment of tax credit monitoring fees - - (75,856) - - (75,856) Payment of developer fees (959,000) - (1,549,974) - 2,508,974 - Net witdrawals from restricted reserves and deposits 222,527 1,450,068 500,271 - - 2,172,866 Net cash used in investing activities (44,203,550) (6,630,059) (19,409,689) (12,953) 5,371,764 (64,884,487) Cash flows from financing activities
Principal payments on mortgages and notes payable (3,053,317) (331,932) (25,626,602) - - (29,011,851)Proceeds from mortgages and notes payable 45,942,925 1,019,237 24,301,350 - (5,331,947) 65,931,565Transfer (1,795,847) 88,660 1,707,187 - - -Contributions 970,100 - 20,666,938 - (1,263,775) 20,373,263 Distributions - - (228,820) - 161,277 (67,543)
Debt issuance costs paid (269,326) (22,519) (304,272) - - (596,117) Syndication costs paid - - (55,000) - - (55,000)
Net cash provided by financing 41,794,535 753,446 20,460,781 - (6,434,445) 56,574,317 Net increase (decrease) in cash and cash equivalents (2,243,776) (1,014,603) 943,183 (7,385) - (2,322,581) Cash and cash equivalents, beginning 7,376,398 7,241,771 6,255,515 133,809 - 21,007,493 Cash and cash equivalents, ending $ 6,361,795 $ 4,997,995 $ 7,198,698 $ - 126,424 $ $ 18,684,912 Abode Communities and Affiliates
Consolidating Statements of Cash Flows
Year Ended December 31, 2018
54 Abode
Communities
Development
Entities
Operating
Entities
Affiliated
Nonprofit
Corporations Eliminations Total
Supplemental disclosure of cash flow information
Cash paid for interest, net of amount
capitalized of $4,045,499 $ - 350,772 $ 3,692,966 $ - $ - $ 4,043,738 $ Supplemental schedule of noncash investing and financing activities Accounts payable included in property and equipment $ 12,892,113 - $ 2,241,203 $ - $ - $ 15,133,316 $ Developer fee payable 3,663,218 - 2,790,766 - (5,394,010) 1,059,974 Abode Communities and Affiliates
Consolidating Statements of Cash Flows
Year Ended December 31, 2017
55 Abode
Communities
Development
Entities
Operating
Entities
Affiliated
Nonprofit
Corporations Eliminations Total
Cash flows from operating activities
Increase (decrease) in net assets without donor restriction $ (15,935) 5,156,384 $ (12,975,310) $ (640,634) $ 2,559,545 $ (5,915,950) $ Decrease in net assets with donor restriction - (1,070,715) - - - (1,070,715) Adjustments to reconcile changes in net
assets to net cash provided by (used in) operating activities Depreciation and amortization - 143,756 12,242,470 - (268,513) 12,117,713 Ground lease expense - - 48,002 - - 48,002
Gain on FMV of interest rate swaps - - (195,712) - - (195,712) Loss on investments 1,405,373 - - 534,386 (1,443,027) 496,732 Amortization of grants payable - - (213,464) - - (213,464)Amortization of debt issuance costs 38,593 - 239,816 - - 278,409 Forgiveness of debt - - (899,000) - - (899,000)
(Increase) decrease in
Accounts receivable - 566,809 (98,785) 3,753 (238,987) 232,790 Grants receivable 1,118,839 - - - - 1,118,839
Prepaid expenses (139,260) - 20,656 - - (118,604)
Developer fee receivable (3,696,612) - - - 3,696,612 -
Deposits 49,238 (125,000) (5,827) - - (81,589)
Other assets 97,990 (29,759) (680,782) 205 - (612,346)
Increase (decrease) in
Accounts payable - (160,531) 3,695,454 4,613 269,204 3,808,740 Prepaid rents - - 60,512 - - 60,512
Accrued vacation 23,067 - - - - 23,067Accrued interest payable (21,229) 390,083 3,899,932 5,475 (535,907) 3,738,354 Security deposit liability - - 14,398 - - 14,398
Deferred revenue (38,602) - (97,486) - (188,697) (324,785) Net cash provided by (used in) operating activities 219,389 3,473,100 5,054,874 (92,202) 3,850,230 12,505,391 Abode Communities and Affiliates
Consolidating Statements of Cash Flows
Year Ended December 31, 2017
56 Abode
Communities
Development
Entities
Operating
Entities
Affiliated
Nonprofit
Corporations Eliminations Total
Cash flows from investing activities
Investment in property and equipment (36,143,403) (101,133) (21,272,054) - (4,717,915) (62,234,505) Net deposits for rental property - - - - - -
Purchase of investment - (377,614) - - - (377,614)
Sale of investment - 256,791 - - - 256,791
Net (payment of) advances to projects - 1,015,689 - - (1,015,689) - Net (payment of) advances to affiliates 100 (2,540,014) 231,169 (77,061) 1,301,629 (1,084,177) Payment of tax credit monitoring fees - - (136,989) - - (136,989) Payment of developer fees - - (1,209,998) - 1,209,998 - Net deposits to restricted reserves and deposits (524,090) (1,773,229) (1,036,249) - - (3,333,568) Net cash used in investing activities (3,519,510) (36,667,393) (23,424,121) (77,061) (3,221,977) (66,910,062) Cash flows from financing activities
Principal payments on mortgages and notes payable (3,986,874) - (24,894,973) - - (28,881,847) Proceeds from mortgages and notes payable 42,580,242 1,610,446 25,034,259 261,271 (655,896) 68,830,322 Transfer - 502,380 (175,631) (326,749) - -
Contributions 3,815,523 - 20,773,630 - (393,532) 24,195,621 Distributions (250) - (479,478) - 421,175 (58,553)
Debt issuance costs paid (409,573) - (70,364) - - (479,937) Syndication costs paid - - (302,500) - - (302,500)
Net cash provided by (used in) financing activities 41,999,068 2,112,826 19,884,943 (65,478) (628,253) 63,303,106 Abode Communities and Affiliates
Consolidating Statements of Cash Flows
Year Ended December 31, 2017
57 Abode
Communities
Development
Entities
Operating
Entities
Affiliated
Nonprofit
Corporations Eliminations Total
Net increase (decrease) in cash and cash equivalents 5,551,064 2,066,416 1,515,696 (234,741) - 8,898,435 Cash and cash equivalents, beginning 1,690,707 5,309,982 4,739,819 368,550 - 12,109,058 Cash and cash equivalents, ending $ 7,241,771 7,376,398 $ 6,255,515 $ 133,809 $ - $ 21,007,493 $ Supplemental disclosure of cash flow information
Cash paid for interest, net of amount capitalized of $1,854,788 $ 628,988 350,772 $ 3,760,258 $ - $ - $ 4,740,018 $ Supplemental schedule of noncash investing and financing activities Accounts payable included in property
and equipment $ 8,034,593 - $ 3,824,823 $ - $ - $ 11,859,416 $ Contribution of fixed assets included in property and equipment - - 40,700 - - 40,700 Decrease in deposits and note payable - - - - 2,000,000 2,000,000 Forgiveness of debt principal 899,000 - - - 899,000
Developer fee payable 2,215,063 - 2,668,954 - (4,884,017) - Deferred financing costs included in accounts payable and accrued expenses - - 19,538 - - 19,538 Tax credit monitoring fee included in accounts payable - - 18,450 - - 18,450 Write off of fully depreciated property - - 37,774 - - 37,774 Interest on notes payable capitalized to principal, including capitalized interest - - 476,281 - - 476,281

Abode Communities
Consolidated Financial Statements
(With Supplementary Information)
and Independent Auditor's Report
December 31, 2017 and 2016
Abode Communities
Index
1 Page
Independent Auditor's Report 2
Consolidated Financial Statements
Consolidated Statements of Financial Position 4
Consolidated Statements of Activities 5
Consolidated Statements of Changes in Net Assets 7
Consolidated Statements of Functional Expenses 8
Consolidated Statements of Cash Flows 10
Notes to Consolidated Financial Statements 12
Supplementary Information - Abode Communities and Affiliates Consolidating Statements of Financial Position 43
Consolidating Statements of Activities 47
Consolidating Statements of Changes in Net Assets 51
Consolidating Statements of Cash Flows 53
2 Independent Auditor's Report
To the Board of Directors
Abode Communities
We have audited the accompanying consolidated financial statements of Abode Communities, which comprise the consolidated statements of financial position as of December 31, 2017 and 2016, and the related consolidated statements of activities, changes in net assets, functional expenses and cash flows for the years then ended, and the related notes to the consolidated financial statements.

Auditor's Responsibility
Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We did not audit the financial statements of certain Operating Entities included in the consolidated financial statements in which Abode Communities owns an interest. The assets, liabilities, net assets and net loss of such entities are stated at $252,756,803, $226,400,301, $26,356,502 and $8,693,895, respectively, for 2017. The assets, liabilities, net assets and net loss of such entities are stated at $232,370,602, $216,301,882, $16,068,720 and $6,621,150, respectively, for 2016. The financial statements of those Operating Entities were audited by other auditors, whose reports have been furnished to us, and our opinion, insofar as it relates to the amounts included for those Operating Entities, is based solely on the reports of the other auditors. We conducted our audits in accordance with auditing standards generally accepted in the United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free from material misstatement.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
3 Opinion
In our opinion, based on our audits and the reports of the other auditors, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Abode Communities as of December 31, 2017 and 2016, and the changes in its net assets and its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

Report on Supplementary Information
Our audits were conducted for the purpose of forming an opinion on the consolidated financial statements as a whole. The accompanying supplementary information on pages 43 to 59 is presented for purposes of additional analysis and is not a required part of the consolidated financial statements.

In our opinion, the information is fairly stated in all material respects in relation to the consolidated financial statements as a whole.

Sacramento, California
June 25, 2018
Abode Communities
Consolidated Statements of Financial Position
December 31, 2017 and 2016
See Notes to Consolidated Financial Statements.
4 2017 2016
Cash and cash equivalents 21,007,493 $ 12,109,058 $
Restricted reserves and deposits 15,161,357 11,827,789
Accounts receivable, net 553,548 500,571
Grants receivable 455,861 1,574,700
Notes receivable 4,294,550 1,500,000
Prepaid expenses 746,622 628,018
Due from affiliates 1,844 28,660
Deposits 669,270 2,587,681
Investments - other 1,008,509 350,886
Property and equipment, net 406,082,102 353,418,528
Deferred fees, net 661,145 607,230
Prepaid ground lease, net 2,731,742 2,779,744
Other assets 1,380,343 767,997
Total assets 454,096,763 $ 389,338,485 $
Liabilities
Accounts payable 15,339,469 $ 7,380,109 $
Prepaid rents 172,144 111,632
Accrued vacation 306,672 283,605
Accrued interest payable 36,342,001 32,603,647
Security deposit liability 1,257,856 1,243,458
Deferred revenue 1,168,678 1,493,463
Partnership investments 9,044 8,346
Fair market value of interest rate swaps 1,406,489 1,602,201 Grants payable 7,314,748 7,528,212
Mortgages and notes payable, net 299,831,984 262,984,037 Total liabilities 363,149,085 315,238,710
Commitments and contingencies - -
Net assets
Unrestricted, controlling 2,039,031 (3,621,410)
Unrestricted, noncontrolling 88,078,258 75,820,081
Total unrestricted net assets 90,117,289 72,198,671
Temporarily restricted net assets 830,389 1,901,104
Total net assets 90,947,678 74,099,775
Total liabilities and net assets 454,096,763 $ 389,338,485 $ Assets
Liabilities and Net Assets
Abode Communities
Consolidated Statements of Activities
Year Ended December 31, 2017
See Notes to Consolidated Financial Statements.
5 Unrestricted net
assets
Temporarily
restricted net
assets Total
Changes in net assets
Revenue and support
Grants and contributions 1,028,566 $ 730,389 $ 1,758,955 $ Development fees 7,102,354 - 7,102,354
Architectural and consulting 1,867,004 - 1,867,004
Resident services 53,836 - 53,836
Property and partnership management fees 126,357 - 126,357 Rental income 22,219,699 - 22,219,699
Gain on FMV of interest rate swaps 195,712 - 195,712
Miscellaneous revenue 313,330 - 313,330
Forgiveness of debt 899,000 - 899,000
Interest income 215,678 - 215,678
Net assets released from restriction 1,801,104 (1,801,104) - Total revenue and support 35,822,640 (1,070,715) 34,751,925 Expenses
Salaries 8,042,632 - 8,042,632
Payroll taxes 552,720 - 552,720
Employee benefits 931,385 - 931,385
Consultants 1,002,576 - 1,002,576
Rent 487,394 - 487,394
Office expenses 317,805 - 317,805
Tranining, travel and parking 131,749 - 131,749
Property and partnership management 64,875 - 64,875
Resident services 306,638 - 306,638
Repairs and maintenance 2,672,784 - 2,672,784
Utilties and telephone 2,556,877 - 2,556,877
Property tax and insurance 2,463,896 - 2,463,896
Interest 8,616,026 - 8,616,026
Legal and accounting 672,973 - 672,973
Bad debt expense 146,705 - 146,705
Real estate development 102,315 - 102,315
Fundraising expenses 26,624 26,624
Grant expense 28,171 - 28,171
Depreciation and amortization 12,117,713 - 12,117,713
Total expenses 41,241,858 - 41,241,858
Change in net assets prior to equity in loss of investment in partnership interests (1,070,715) (5,419,218) (6,489,933) Equity in loss of investment in partnership interests - (496,732) (496,732) Change in net assets (5,915,950) $ (1,070,715) $ (6,986,665) $ Change in net assets controlling 5,660,441 $ (1,070,715) $ 4,589,726 $ Change in net assets noncontrolling (11,576,391) - (11,576,391) Total change in net assets (5,915,950) $ (1,070,715) $ (6,986,665) $ Abode Communities
Consolidated Statements of Activities
Year Ended December 31, 2016
See Notes to Consolidated Financial Statements.
6 Unrestricted net
assets
Temporarily
restricted net
assets Total
Changes in net assets
Revenue and support
Grants and contributions 581,438 $ 1,900,000 $ 2,481,438 $ Government grants 29,370 - 29,370
Development fees 1,972,713 - 1,972,713
Architectural and consulting 1,459,863 - 1,459,863
Resident services 51,744 - 51,744
Property and partnership management fees 143,588 - 143,588 Rental income 20,835,462 - 20,835,462
Miscellaneous revenue 561,861 - 561,861
Forgiveness of debt 2,636,135 - 2,636,135
Interest income 192,199 - 192,199
Net assets released from restriction 274,979 (274,979) - Total revenue and support 28,739,352 1,625,021 30,364,373 Expenses
Salaries 7,115,154 - 7,115,154
Payroll taxes 519,635 - 519,635
Employee benefits 861,795 - 861,795
Consultants 997,836 - 997,836
Rent 435,292 - 435,292
Office expenses 444,824 - 444,824
Tranining, travel and parking 167,077 - 167,077
Property and partnership management 12,108 - 12,108
Resident services 290,690 - 290,690
Repairs and maintenance 2,446,147 - 2,446,147
Utilties and telephone 2,378,801 - 2,378,801
Property tax and insurance 1,910,695 - 1,910,695
Interest 6,821,435 - 6,821,435
Loss on FMV of interest rate swaps 1,389,127 - 1,389,127 Legal and accounting 508,370 - 508,370
Bad debt expense 232,818 - 232,818
Real estate development 49,568 - 49,568
Grant expense 100,175 - 100,175
Depreciation and amortization 11,625,969 - 11,625,969
Total expenses 38,307,516 - 38,307,516
Change in net assets prior to equity in loss of investment in partnership interest 1,625,021 (9,568,164) (7,943,143)
Equity in loss of investment in partnership interests - (46,434) (46,434) Change in net assets (9,614,598) $ 1,625,021 $ (7,989,577) $ Change in net assets controlling 786,663 $ 1,625,021 $ 2,411,684 $ Change in net assets noncontrolling (10,401,261) - (10,401,261) Total change in net assets (9,614,598) $ 1,625,021 $ (7,989,577) $ Abode Communities
Consolidated Statements of Changes in Net Assets
Years Ended December 31, 2017 and 2016
See Notes to Consolidated Financial Statements.
7 2017 2016
Controlling interest
Unrestricted net assets, beginning $ (3,621,410) $ (642,697) Transfer of interest - (3,765,376)
Change in unrestricted net assets 5,660,441 786,663
Unrestricted net assets, controlling interest, ending 2,039,031 $ (3,621,410) $ Noncontrolling interest
Unrestricted net assets, beginning $ 74,987,621 75,820,081 $ Contributions 24,195,621 8,943,797
Distributions (58,553) (589,319)
Syndication costs (302,500) (225,000)
Transfer - (661,133)
Transfer of interest - 3,765,376
Change in unrestricted net assets (11,576,391) (10,401,261) Unrestricted net assets, noncontrolling interest, ending 88,078,258 $ 75,820,081 $ Net assets - temporarily restricted, beginning $ 276,083 1,901,104 $ Change in temporarily restricted net assets 730,389 1,900,000 Release of temporarily restricted net assets (1,801,104) (274,979) Subtotal (1,070,715) 1,625,021
Net assets - temporarily restricted, ending 830,389 $ 1,901,104 $ Abode Communities
Consolidated Statements of Functional Expenses
Year Ended December 31, 2017
See Notes to Consolidated Financial Statements.
8 Program
services
General and
administrative Fundraising Total
Salaries 7,258,284 $ 519,361 $ 264,987 $ 8,042,632 $
Payroll taxes 499,764 34,559 18,397 552,720
Employee benefits 868,804 42,036 20,545 931,385
Consultants 805,155 180,921 16,500 1,002,576
Rent 400,265 66,720 20,409 487,394
Office expenses 188,083 72,855 56,867 317,805
Training, travel and parking 111,590 13,688 6,471 131,749 Property and partnership
management - 64,875 - 64,875
Resident services 306,638 - - 306,638
Repairs and maintenance 2,671,764 745 275 2,672,784
Utilities and telephone 2,519,400 24,900 12,577 2,556,877 Property tax and insurance 2,454,327 5,545 4,024 2,463,896 Interest 8,588,365 18,441 9,220 8,616,026
Legal and accounting 598,267 53,208 21,498 672,973
Bad debt expense 146,705 - - 146,705
Real estate development 102,315 - - 102,315
Fundraising expenses - - 26,624 26,624
Grant expense 28,171 - - 28,171
Depreciation and
amortization 57,503 12,031,459 28,751 12,117,713
Total functional
expenses $ 1,090,482 39,644,231 $ 507,145 $ 41,241,858 $ Abode Communities
Consolidated Statements of Functional Expenses
Year Ended December 31, 2016
See Notes to Consolidated Financial Statements.
9 Program
services
General and
administrative Fundraising Total
Salaries 6,358,966 $ 497,672 $ 258,516 $ 7,115,154 $
Payroll taxes 472,954 31,574 15,107 519,635
Employee benefits 787,328 49,092 25,375 861,795
Consultants 783,034 202,061 12,741 997,836
Rent 352,808 71,366 11,118 435,292
Office expenses 322,761 67,786 54,277 444,824
Training, travel and parking 128,841 23,714 14,522 167,077 Property and partnership
management - 12,108 - 12,108
Resident services 290,690 - - 290,690
Repairs and maintenance 2,443,725 2,026 396 2,446,147
Utilities and telephone 2,347,832 25,344 5,625 2,378,801 Property tax and insurance 1,892,517 12,642 5,536 1,910,695 Interest 6,812,529 7,287 1,619 6,821,435
Loss on FMV of interest
rate swaps - 1,389,127 - 1,389,127
Legal and accounting 444,683 52,885 10,802 508,370
Bad debt expense 231,076 1,742 - 232,818
Real estate development 49,568 - - 49,568
Grant expense 100,175 - - 100,175
Depreciation and
amortization 65,128 11,546,448 14,393 11,625,969
Total functional
expenses $ 1,110,319 36,767,170 $ 430,027 $ 38,307,516 $ Abode Communities
Consolidated Statements of Cash Flows
Years Ended December 31, 2017 and 2016
10 2017 2016
Cash flows from operating activities
Changes in unrestricted net assets (5,915,950) $ (9,614,598) $ Changes in temporarily restricted net assets (1,070,715) 1,625,021 Adjustments to reconcile changes in net assets to net cash provided by operating activities
Depreciation and amortization 12,117,713 11,625,969
Ground lease expense 48,002 52,561
(Gain) loss on FMV of interest rate swaps (195,712) 1,389,127 Loss on investments 496,732 46,434
Amortization of grants payable (213,464) (213,463)
Amortization of debt issuance costs 278,409 416,919
Forgiveness of debt (2,636,135) (899,000)
(Increase) decrease in
Accounts receivable 232,790 (58,894)
Grants receivable 1,118,839 (1,456,300)
Prepaid expenses (118,604) 95,640
Deposits (81,589) 36,207
Other assets (612,346) (369,226)
Increase (decrease) in
Accounts payable 3,808,740 (602,931)
Prepaid rents 60,512 76,171
Accrued vacation 23,067 31,672
Accrued interest payable 3,738,354 (625,889)
Security deposit liability 14,398 77,853
Deferred revenue (324,785) 640,219
Net cash provided by operating activities 12,505,391 536,357 Cash flows from investing activities
Investment in property and equipment (62,234,505) (37,143,005) Net deposits for rental property - (350,000)
Purchase of investment (377,614) (75,000)
Sale of investment 256,791 -
Prepaid ground lease - (232,692)
Net repayment of advances to projects - 26
Net payment of advances to affiliates (1,084,177) (2,445,079) Payment of tax credit monitoring fees (136,989) (45,396) Net deposits to restricted reserves and deposits (3,333,568) (2,522,955) Net cash used in investing activities (66,910,062) (42,814,101) Abode Communities
Consolidated Statements of Cash Flows
Years Ended December 31, 2017 and 2016
See Notes to Consolidating Financial Statements.
11 2017 2016
Cash flows from financing activities
Principal payments on mortgages and notes payable (28,881,847) (15,580,473) Proceeds from mortgages and notes payable 68,830,322 55,306,635 Contributions 24,195,621 8,943,797
Distributions (58,553) (589,319)
Debt issuance costs paid (479,937) (979,379)
Syndication costs paid (302,500) (225,000)
Net cash provided by financing activities 63,303,106 46,876,261 Net increase in cash and cash equivalents 8,898,435 4,598,517 Cash and cash equivalents, beginning 12,109,058 7,510,541 Cash and cash equivalents, ending 21,007,493 $ 12,109,058 $ Supplemental disclosure of cash flow information
Cash paid for interest, net of amount capitalized of
$1,854,788 and $868,033 $ 3,391,795 4,740,018 $
Supplemental schedule of noncash investing and financing activities
Accounts payable included in property and equipment $ 3,094,412 11,859,416 $ Contributions included in property and equipment 661,133 40,700 Decrease in deposits and note payable - 2,000,000
Forgiveness of debt principal 910,703 899,000
Increase in loan receivable 1,500,000 -
Deferred financing costs included in accounts payable and accrued expenses - 19,538
Tax credit monitoring fee included in accounts payable - 18,450 Write off of fully depreciated property - 37,774
Interest on notes payable capitalized to principal, including capitalized interest - 476,281
Abode Communities
Notes to Consolidated Financial Statements
December 31, 2017 and 2016
12 Note 1 - Organization and nature of operations
The accompanying consolidated financial statements include Abode Communities, a California nonprofit corporation ("Abode Communities") and its affiliates ("Affiliates"), which include the following:
 Affiliated Nonprofit Corporations:
- Abode Community Housing, a California nonprofit corporation ("ACH") - Figueroa Corridor Land Company, a California nonprofit corporation ("FCLC") - L'Canon Club Apartments Corporation ("L'Canon")
 Development Entities, as listed on page 13
 Operating Entities, as listed on pages 14 - 15
Collectively, Abode Communities and its Affiliates shall be referred to as "Abode Communities”.

All significant inter-entity balances and transactions have been eliminated in consolidation.

Abode Communities
Notes to Consolidated Financial Statements
December 31, 2017 and 2016
13 Development Entities are comprised of the following entities. The respective beneficial owner and the consolidated ownership percentage is also listed:

Development entity affiliate Beneficial owner 2017 2016 4347 Adams, L.P. Abode Communities 100.00% 100.00%
44000 Sahuayo Street, LP Abode Communities 0.005% N/A
Bethune, L.P. FCLC 100.00% 100.00%
Grandview Apartments, L.P. Abode Communities 100.00% 100.00% La Veranda, L.P. Abode Communities 100.00% 100.00%
Rolland Curtis Commercial, L.P. Abode Communities 100.00% 100.00% Rolland Curtis Commercial QALICB, Inc. Abode Communities 100.00% 100.00% Rolland Curtis East, L.P. Abode Communities 100.00% 100.00% Rolland Curtis West, L.P. Abode Communities 100.00% 100.00% Slauson & Wall, L.P. FCLC 100.00% 100.00%
Vista del Mar, L.P. Abode Communities 0.0018% 0.0018%
Westmont Vista, L.P. Abode Communities 100.00% 100.00%
Ownership %
Abode Communities
Notes to Consolidated Financial Statements
December 31, 2017 and 2016
14 Operating Entities are comprised of the following entities. The respective general partner and managing members and the consolidated ownership percentage is also listed:

Operating entity affiliate
Nonprofit general partner/
managing member 2017 2016
Astoria Place Limited Partnership Abode Communities 100.00% 100.00% Casa Dominguez, L.P. Abode Communities 1.00% 1.00%
Centennial Place Limited Partnership Abode Communities 100.00% 100.00% Clark Residence Limited Partnership Abode Communities 100.00% 100.00% DCDC Multi Units Abode Community Housing 100.00% 100.00% E. Victor Villa, L.P. Abode Communities 0.01% 0.01%
E. Victor Villa GP, LLC Abode Communities 100.00% 100.00% Evergreen Apartments, L.P. Abode Communities 0.01% 0.01% Fremont Building Limited Partnership Abode Communities 100.00% 100.00% Glassell Park, L.P. Abode Communities 1.00% 1.00%
Grand Avenue Apartments Limited
Partnership Abode Communities 100.00% 100.00%
Grisham Community Housing, L.P. Abode Communities 0.01% 0.01% Hart Village, L.P. Abode Communities 0.01% 0.01%
Heritage Court Apartments Limited
Partnership Abode Communities 100.00% 100.00%
Hudson Oaks Limited Partnership Abode Community Housing 0.01% 0.01% Kittridge Housing, L.P. Abode Communities 0.01% 0.01%
Las Brisas Community Housing II, L.P. Abode Community Housing 0.01% 0.01% Las Brisas Community Housing Limited
Partnership Abode Communities 0.01% 0.01%
Laurel Village, L.P. Abode Communities 0.01% 0.01%
Morgan Place, L.P. Abode Communities 0.01% 0.01%
New Dana Strand Partners I, L.P. Abode Communities 0.005% 0.005% New Park Place, L.P. Abode Communities 0.01% 0.01%
Nuevo Pico Union Partnership Abode Communities 100.00% 100.00% Orange Grove Gardens, L.P. Abode Community Housing 0.01% 0.01% Osage Apartments Limited Partnership Abode Communities 100.00% 100.00% Oxnard Housing Associates, L.P. Abode Communities N/A 100.00% Oxnard Housing Repurchase, LLC Abode Communities 100.00% 100.00% Park Place Terrace Limited Partnership Abode Communities 100.00% 100.00% Park Place Terrace Repurchase, LLC Abode Communities 100.00% 100.00% Parthenia Housing Associates, L.P. Abode Communities 100.00% 100.00% Reseda Village Limited Partnership Abode Communities N/A 100.00% Reseda Village Repurchase, LLC Abode Communities 100.00% 100.00% Selma Community Housing, L.P. Abode Communities 0.01% 0.01% Sherman Way Community Housing, L.P. Abode Communities 0.01% 0.01% Sun Sage Homes, L.P. Abode Community Housing 0.01% 0.01% Sunshine Terrace Limited Partnership Abode Community Housing N/A 100.00% Ownership %
Abode Communities
Notes to Consolidated Financial Statements
December 31, 2017 and 2016
15 Operating entity affiliate
Nonprofit general partner/
managing member 2017 2016
Ownership %
Sunshine Terrace Repurchase, LLC Abode Community Housing 100.00% 100.00% Villa Parke Homes Abode Community Housing 100.00% 100.00% Terra Bella, L.P. Abode Communities 0.01% 0.01%
Viviendas Del Valle, L.P. Abode Communities 0.01% 0.01% Wilmington Housing Associates Limited
Partnership Abode Community Housing 100.00% 100.00%
Wilson Apartments Associates, L.P. Abode Community Housing 39.50% 39.50% Note 2 - Significant accounting policies
Basis of presentation
Abode Communities is required to report information regarding its financial position and activities according to three classes of net assets: unrestricted net assets, temporarily restricted net assets and permanently restricted net assets. Information is required to segregate program service expenses from general and administrative and fundraising expenses.

In conformity with GAAP, contributions received are recorded as unrestricted, temporarily restricted or permanently restricted support depending on the existence and/or nature of any donor restrictions.

Use of estimates
The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that affect the amounts reported in these consolidated financial statements and the disclosures in the accompanying notes. Actual results could differ from those estimates. Estimates of future operations were made by management in the calculation of the amount of development fee revenue recognized under GAAP.

Cash and cash equivalents
Abode Communities considers all highly-liquid investments purchased with an original maturity of three months or less to be cash equivalents.

Accounts receivable and bad debts
Accounts receivable are reported net of an allowance for uncollectible amounts. Management's estimate of the allowance is based on historical collection experience and a review of the current Abode Communities
Notes to Consolidated Financial Statements
December 31, 2017 and 2016
16 status of accounts receivable. It is reasonably possible that management's estimate of the allowance will change. As of December 31, 2017 and 2016, the allowance for doubtful accounts is $105,815 and $141,578, respectively. Bad debt expense during the years ended December 31, 2017 and 2016 was $146,705 and $232,818, respectively, and is included in expenses on the consolidated statements of activities.

Notes receivable
Notes receivable are reported net of an allowance for uncollectible amounts. Management's estimate of the allowance is based on historical collection experience and a review of the current status of notes receivable. It is reasonably possible that management's estimate of the allowance will change. As of December 31, 2017 and 2016, there is no allowance for doubtful accounts. All related party notes receivable have been eliminated in consolidation.

Due from affiliates
The advances due from affiliates are reported net of an allowance for doubtful accounts.

Management's estimate of the allowance is based on expected future operating performance and other factors. It is reasonably possible that management's estimate of the allowance will change. As of December 31, 2017 and 2016, there is no allowance for doubtful accounts.

Partnership investments
Partnership investments include the equity interest of Abode Communities and Affiliated Nonprofit Corporations in certain tax credit partnerships which are not controlled by Abode Communities and Affiliated Nonprofit Corporations. Abode Communities and Affiliated Nonprofit Corporations account for their investments in such limited partnerships ("Investees") in accordance with the equity method of accounting, under which the investment is carried at cost and is adjusted for Abode Communities' and Affiliated Nonprofit Corporations' share of the Investees' results of operations and by cash distributions received. Abode Communities and Affiliated Nonprofit Corporations regularly assess the carrying value of their investments in limited partnerships. If the carrying value exceeds the estimated value derived by management, Abode Communities and Affiliated Nonprofit Corporations would reduce their investments by the amount by which the carrying amounts exceed the assessed value. During the years ended December 31, 2017 and 2016, Abode Communities and Affiliated Nonprofit Corporations did not make any such adjustments. The Investees are variable interest entities whose activities are consolidated with the business activities of their controlling owners.

Project development costs are capitalized until such time as the project is no longer considered desirable or feasible, at which time the costs are expensed. Project development costs related to projects that are ultimately developed are subsequently recorded as receivables to be repaid by the applicable projects. During the years ended December 31, 2017 and 2016, $121,815 and $17,144 of project development costs were expensed and included in real estate development on the consolidated statements of activities.

Property, equipment and improvements
Property, equipment and improvements are recorded at cost. Expenditures for maintenance and repairs are expensed as incurred, while major renewals and betterments are capitalized. Costs of properties constructed or rehabilitated include all direct costs of construction, as well as carrying costs during the construction period and indirect costs of construction, supervision and management. Upon disposal of depreciable property, the appropriate property accounts are Abode Communities
Notes to Consolidated Financial Statements
December 31, 2017 and 2016
17 reduced by the related costs and accumulated depreciation. The resulting gains and losses are reflected in the statement of activities. Depreciation is computed using the straight-line method over the estimated useful lives ranging from 5 to 40 years.

It is Abode Communities' policy to capitalize expenditures for improvements, furniture, and fixtures and equipment exceeding $2,500.

Deferred fees
Costs related to obtaining low-income housing tax credits are being amortized using the straightline method over the mandatory 15-year compliance period.

Costs related to obtaining leasehold improvements are capitalized and amortized on the straightline method over the shorter of the life of the related asset or the related ground lease.

The table below indicates each component within the deferred fees, net line item on the consolidated statements of financial position:

December 31, 2017
Tax credit
monitoring costs
Other deferred
fees
Deferred fees 972,658 $ 53,830 $
Less accumulated amortization (348,858) (16,486)
Deferred fees, net 623,800 $ 37,345 $
December 31, 2016
Tax credit
monitoring costs
Other deferred
fees
Deferred fees 997,166 $ 53,830 $
Less accumulated amortization (430,474) (13,292)
Deferred fees, net $ 40,538 566,692 $
Abode Communities
Notes to Consolidated Financial Statements
December 31, 2017 and 2016
18 Estimated annual amortization for each of the next five years subsequent to December 31, 2017 is as follows:

Tax credit
monitoring costs
Other deferred
fees
2018 68,615 $ 3,193 $
2019 68,615 3,193
2020 68,615 1,025
2021 68,615 1,025
2022 55,934 1,025
Prepaid ground lease
Glassell Park, L.P. and Selma Community Housing, L.P. ("Selma") have entered into prepaid ground lease agreements with the Los Angeles Unified School District. The ground leases are amortized over the terms of the agreements using the straight-line method.

Estimated annual amortization for each of the next five years and thereafter subsequent to December 31, 2017 is as follows:
2018 48,002 $
2019 48,002
2020 48,002
2021 48,002
2022 48,002
Thereafter 2,491,732
$ 2,731,742
Debt issuance costs
Debt issuance costs, net of accumulated amortization, are reported as a direct deduction from the face amount of the mortgage loan payable to which such costs relate. Amortization of debt issuance costs is reported as a component of interest expense and is computed using an imputed interest rate on the related loan.

Derivative instruments
Evergreen Apartments, L.P. ("Evergreen"), Laurel Village, L.P. ("Laurel Village"), and Selma have entered into interest rate swap agreements, which are carried on the accompanying consolidated statement of financial position at fair value. Changes in fair value are estimated and recorded through the consolidated statement of activities. The fair value of the interest rate swaps have been calculated utilizing a third-party methodology that management believes is commonly employed (see Note 13).

Fair value measurement
The accounting standard for fair value measurement and disclosures defines fair value, establishes a framework for measuring fair value, and provides for expanded disclosure about fair value measurements. Fair value is defined by the accounting standard for fair value measurement and disclosures as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly Abode Communities
Notes to Consolidated Financial Statements
December 31, 2017 and 2016
19 transaction between market participants on the measurement date. It also establishes a fair value hierarchy that prioritizes observable and unobservable inputs used to measure fair value into three levels. The following summarizes the three levels of inputs and hierarchy of fair value Evergreen, Laurel Village and Selma use when measuring fair value:
 Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that Evergreen, Laurel Village and Selma have the ability to access;  Level 2 inputs may include quoted prices for similar assets and liabilities in active markets, as well as interest rates and yield curves that are observable at commonly quoted intervals; and
 Level 3 inputs are unobservable inputs for the asset or liability that are typically based on an entity's own assumptions as there is little, if any, related market activity.

Portions of the rental income are in the form of subsidy payments from the U.S. Department of Housing and Urban Development ("HUD") under Section 8 of the National Housing Act and a Project Rental Assistance Contract. Tenants are subsidized based upon their level of income. Rent increases require HUD approval.

Laundry and cable income and prepaid rent received in advance are deferred until earned.

Property management fee income is earned monthly based on the management agreement. Fees earned for consolidated entities are eliminated in the consolidation.

Abode Communities
Notes to Consolidated Financial Statements
December 31, 2017 and 2016
20 Resident services fee income is earned monthly based on the resident services agreement. Fees earned for consolidated entities are eliminated in the consolidation.

Partnership management fee income is earned annually based on the partnership agreements.

Fees earned are eliminated in the consolidation.

Private donations
Contributions are recognized as revenue when an unconditional promise, in substance, to give is received by Abode Communities. All contributions and other types of revenue with restrictions imposed by the donor, if any, are reported as increases in temporarily or permanently restricted net assets depending on the nature of the restrictions. When a restriction expires, temporarily restricted net assets are released and reclassified to unrestricted net assets. When a donation is received and the restriction is met in the same period, the contribution is classified as unrestricted net assets.

Grants
Abode Communities receives conditional grants from federal agencies and private grantors for various purposes. Conditional grant awards not yet received are accrued to the extent unreimbursed expenses have been incurred for the purposes specified by an approved conditional grant. Abode Communities records refundable advances for revenues received under approved awards from grantors for the purposes specified under the grant restrictions. Cash received for grants in excess of costs incurred is reflected as temporarily restricted net assets. Costs incurred in excess of cash received are reflected as grants receivable.

Income taxes
Each of Abode Communities, ACH, FCLC, L'Canon Club Apartments and Rolland Curtis Commercial QALICB, Inc. have applied for and received a determination letter from the Internal Revenue Service ("IRS") to be treated as a tax-exempt entity pursuant to Section 501(c)(3) of the Internal Revenue Code and did not have any unrelated business income for the years ended December 31, 2017 and 2016. Due to their tax-exempt status, these entities are not subject to income taxes. These entities are required to file tax returns with the IRS and other taxing authorities. Accordingly, these consolidated financial statements do not reflect a provision for income taxes and these entities have no other tax positions which must be considered for disclosure.

Abode Communities
Notes to Consolidated Financial Statements
December 31, 2017 and 2016
21 Advertising
Advertising costs are expensed as incurred.

Syndication costs
Syndication costs are recorded as a direct reduction to noncontrolling interest when incurred.

Withdrawals from these accounts may require approval from designated parties.

Note 4 - Accounts receivable and bad debts
Accounts receivable consist of the following as of December 31:

Affiliated
Abode Development Operating Nonprofit Less
December 31, 2017 Communities Entities Entities Corportions eliminations Total Architecture fees $ - 1,103,039 $ - $ - $ (727,732) $ 375,307 $ Partnership
management fees - 1,588,305 - - (1,588,305) -
Property
management and
lease up fees 181,905 43,560 (138,345)
Rent - - 240,496 - - 240,496
Other - 5,816 - - (5,816) -
- 2,879,065 240,496 - (2,460,198) 659,363
Less allowance for
doubtful accounts - (480,000) (25,815) - 400,000 (105,815) $ - 2,399,065 $ 214,681 $ - $ (2,060,198) $ 553,548 $
Abode Communities
Notes to Consolidated Financial Statements
December 31, 2017 and 2016
22 Affiliated
Abode Development Operating Nonprofit Less
December 31, 2016 Communities Entities Entities Corportions eliminations Total Architecture fees $ - 1,146,166 $ - $ - $ (678,988) $ 467,178 $ Partnership
management fees - 1,614,211 - - (1,614,211) -
Rent - - 150,544 - - 150,544
Other - 26,660 - 3,753 (5,986) 24,427
- 2,787,037 150,544 3,753 (2,299,185) 642,149
Less allowance for
doubtful accounts - (106,930) (34,648) - - (141,578)
$ - 2,680,107 $ 115,896 $ 3,753 $ (2,299,185) $ 500,571 $ Note 5 - Grants receivable
Grants receivable consist of the following as of December 31:
2017 2016
Rolland Curtis Commercial QALICB capital grants 250,000 $ 1,450,000 $ Resident services 100,000 -
General operating grant 75,861 100,000
Fundraising event 30,000 -
Other - 24,700
$ 1,574,700 455,861 $
All grants receivable are expected to be collected within one-year.

Note 6 - Notes receivable
Notes receivable consist of the following as of December 31:
2017 2016

Acquisition loan to Rolland Curtis Partners, LLC, secured by deed of trust, bearing interest at 1% per annum,
deferred until the loan matured on July 17, 2017. - 1,000,000 Abode Communities
Notes to Consolidated Financial Statements
December 31, 2017 and 2016
23 2017 2016

Unsecured predevelopment loan to Rolland Curtis
Partners, LLC, bearing interest at 1% per annum, deferred until the loan matured on July 17, 2017. - 500,000

Total $ 4,294,550 $ 1,500,000
Note 7 - Investments in partnerships and limited liability companies Abode Communities consolidates its ownership interest in certain limited partnerships and limited liability companies (see Note 1). As of December 31, 2017 and 2016, the net investment deficit in limited partnership and limited liability companies is $2,666,600 and $1,195,251, respectively, of which $2,657,556 and $1,186,905 was eliminated in consolidation at December 31, 2017 and 2016, respectively.

The following is condensed financial information as of December 31, 2017 and 2016 for those entities which are recorded on the equity method in the consolidated financial statements:

Partnership name
Ownership
interest Total assets Total liabilities
Partners’ equity
(deficit)
Partnership
investment
Hope West
Apartments (A
California Limited
Partnership) 0.5% 1,703,234 $ 3,377,654 $ (1,674,420) $ (8,193) $ New Dana Strand
IV-A, L.P. 0.001% 29,713,147 27,947,822 1,765,325 10
New Dana Strand
Townhomes, L.P. 0.0045% 24,059,415 23,089,806 969,609 (861) $ (9,044)
2017
Partnership name
Ownership
interest Total assets Total liabilities
Partners’ equity
(deficit)
Partnership
investment
Hope West
Apartments (A
California Limited
Partnership) 0.5% 1,754,089 $ 3,298,605 $ (1,544,516) $ (7,579) $ New Dana Strand
IV-A, L.P. 0.001% 10,721,510 8,926,787 1,794,723 10
New Dana Strand
Townhomes, L.P. 0.0045% 25,694,106 22,929,662 2,764,444 (777) $ (8,346)
2016
Abode Communities
Notes to Consolidated Financial Statements
December 31, 2017 and 2016
24 Abode Communities' share of loss consists of the following at December 31:
2017 2016
Hope West Apartments (A California Limited
Partnership) $ 614 614 $
New Dana Strand IV-A, L.P. - -
New Dana Strand Townhomes, L.P. 84 68
Rolland Curtis Partners, LLC 496,034 45,752
Loss on investments 496,732 $ 46,434 $
Note 8 - Other investments
Other investments consist of the following as of December 31:
2017 2016
Housing Partnership Insurance Exchange(1) $ 200,886 200,886 $ HPN Select(2) 150,000 150,000
Rolland Curtis Partners, LLC(3) 657,623 -
$ 1,008,509 350,886 $
(1) Abode Communities invested in Housing Partnership Insurance Exchange ("HPIEx") in order to gain access to workers' compensation insurance from a captive reinsurance company. The investment is stated at cost and represents approximately 3% of the capital of HPIEx as of December 31, 2017.
(2) Abode Communities invested in HPN Select, LLC ("HPNS") in order for Abode Communities and its various operating entities to participate in a group purchasing organization. The investment is stated at cost and represents approximately 3% of the capital of HPNS as of December 31, 2017.
(3) Through December 15, 2016 Abode Communities was managing member of Rolland Curtis Partners, LLC ("RCP") an entity that was included in Operating Entities on the consolidating financial statements. In order to effectuate the redevelopment of the site through development entities Rolland Curtis East, Rolland Curtis West and Rolland Curtis Commercial QALICB, Abode Communities assigned its interest in RCP to the other member and concurrently entered into agreements with RCP, the intent of which is that the parties shall continue to have the same rights, responsibilities and liabilities. The remaining assets of RCP were distributed in 2017 to the parties equally. As of December 31, 2015, RCP had assets of $9,827,624, liabilities of $8,505,356 and equity of $1,322,268, which were removed from the beginning balances on the statement of cash flows for the year ended December 31, 2016. Abode Communities' share of RCP loss for the years ended December 31, 2017 and 2016 was $496,034 (after receipt of $165,099 of proceeds) and $45,752, respectively, and is included in loss on investments on the consolidated statements of activities. In addition, the noncontrolling interest in the amount of Abode Communities
Notes to Consolidated Financial Statements
December 31, 2017 and 2016
25 $661,133 is reflected as a transfer on the consolidating statements of changes in net assets for the year ended December 31, 2016.

Note 9 - Development fees receivable
Development fees receivable consist of the following as of December 31:
2017 2016
Current development fees receivable
E. Victor Villa, L.P. 378,527 $ 275,923 $
Laurel Village, L.P. - 422,578
New Park Place, L.P. 119,372 -
Rolland Curtis East, L.P. 76,000 -
Rolland Curtis West, L.P. 117,600 -
Selma Community Housing, L.P. 72,094 650,597
Sun Sage Homes, L.P. 1,134,841 -
Vista del Mar, L.P. 541,200 -
Viviendas Del Valle, L.P. 616,974 -
Total current development fees receivable 3,056,608 1,349,098 Deferred development fees receivable 6,407,321 4,440,814 Interest on deferred development fees 107,899 85,304
Total development fees receivable 9,571,828 5,875,216
Less eliminations (9,571,828) (5,875,216)
$ - - $
Abode Communities
Notes to Consolidated Financial Statements
December 31, 2017 and 2016
26 Note 10 - Property and equipment, net
Property and equipment consists of the following as of December 31:

Abode Development Operating
Affiliated
Nonprofit Less
December 31, 2017 Communities Entities Entities Corportions eliminations Total Land - $ 16,390,000 $ 41,275,487 $ - $ - $ 57,665,487 $ Building and
improvements - - 431,249,494 - (12,916,248) 418,333,245 Furniture and
equipment - 640,761 14,772,355 - - 15,413,117
Leasehold
improvements - 229,614 - - - 229,614
Construction in
progress 48,940,369 39,905 286 - (1,646,730) 47,333,830 65,330,369 910,280 487,297,622 - (14,562,978) 538,975,293 Less accumulated
depreciation - (470,360) (134,181,166) - 1,758,334 (132,893,192) $ 65,330,369 439,921 $ 353,116,456 $ - $ (12,804,644) $ 406,082,102 $ Affiliated
Abode Development Operating Nonprofit Less
December 31, 2016 Communities Entities Entities Corportions eliminations Total Land - $ 7,760,000 $ 41,257,719 $ - $ - $ 49,017,719 $
Building and
improvements - - 405,598,061 - (12,149,592) 393,448,469 Furniture and
equipment - 567,854 13,488,828 - - 14,056,682
Leasehold
improvements - 229,614 - - - 229,614
Construction in
progress 12,864,222 11,679 7,179,163 - (2,364,247) 17,690,817 20,624,222 809,147 467,523,771 - (14,513,838) 474,443,301 Less accumulated
depreciation - (326,603) (122,304,954) - 1,606,783 (121,024,774) $ 20,624,222 482,544 $ 345,218,817 $ - $ (12,907,055) $ 353,418,528 $ Abode Communities
Notes to Consolidated Financial Statements
December 31, 2017 and 2016
27 The development costs of Abode Communities' pre-development and development stage projects and resyndicated operating partnerships are recorded in construction in progress, included in property and equipment on the accompanying consolidated statement of financial position. The following is a summary by project of construction in progress as of December 31, 2017 and 2016:

Project Units Construction 2017 2016
Vista del Mar, L.P. 86 Began in August
2016, lease-up
anticipated to be
completed in
September 2018 22,514,572 $ 5,073,538 $
Rolland Curtis West, L.P. 70 Began in June
2017, anticipated
to be completed in
March 2019 8,072,997 2,348,956
Rolland Curtis East, L.P. 70 Began in June
2017, anticipated
to be completed in
December 2018 7,677,335 2,531,651
44000 Sahuayo Street, LP 75 Began in
November 2017,
anticipated to be
completed in June
2019 4,371,862 -
Rolland Curtis Commercial
QALICB, Inc.

Community
Health Clinic
Began in June
2017, anticipated
to be completed in
January 2019 1,377,893 359,650
4347 Adams, L.P. 86 Anticipated to
begin March 2019 1,223,092 402,640
Westmont Vista, L.P. 39 Anticipated to
begin December
2018 941,322 403,961
La Veranda, L.P. 77 Anticipated to
begin March 2019 692,949 471,683
Grandview Apartments, L.P. 100 Anticipated to
begin October
2020 363,932 204,598
Sun Sage Homes, L.P. 66 Construction
completed and
project placed in
service in
December 2017 - 432,781
Construction in progress
Abode Communities
Notes to Consolidated Financial Statements
December 31, 2017 and 2016
28 Project Units Construction 2017 2016
Construction in progress
Viviendas Del Valle, L.P. 100 Construction
completed and
project placed in
service in October
2017 - 1,002,288
New Park Place, L.P. 49 Construction
completed and
project placed in
service in October
2017 - 694,160
E.Victor Villa, L.P. 46 Completed and
fully leased as of
March 31, 2017 - 3,610,854
All other projects 97,876 154,057
Total construction in process 47,333,830 $ 17,690,817 $ Note 11 - Forgiveness of debt
Sunshine Terrace Repurchase, LLC ("Sunshine Repurchase") had a non-interest bearing Affordable Housing Program ("AHP") note payable to Citibank in the amount of $157,920. During 2016 Citibank reconveyed the deed of trust to the borrower, thereby cancelling the debt, and Sunshine Repurchase recorded income from the forgiveness of debt.

In order to facilitate a major rehabilitation of the project, the County of Los Angeles restructured its loans to Sunshine Repurchase. During 2016, as part of the restructuring, the County forgave accrued interest in the amount of $1,725,432.

Wilmington Housing Associates, Limited Partnership had an AHP note payable to Bank of America in the amount of $752,783. During 2016, the deed of trust was reconveyed to the borrower, thereby cancelling the debt and Wilmington Housing Associates recorded income from the forgiveness of debt.

Fremont Building Limited Partnership had an AHP note payable to Bank of America in the amount of $744,000. During 2017, the lender recorded a Substitution of Trustee and Deed of Full Reconveyance, thereby cancelling the debt and Fremont Building Limited Partnership recorded income from the forgiveness of debt.

Abode Communities
Notes to Consolidated Financial Statements
December 31, 2017 and 2016
29 Note 12 - Mortgages and notes payable
Mortgages and notes payable are as follows as of December 31, 2017 and 2016:

Current portion
Long-term
portion
Principal
balance as of
12/31/2017
Accrued interest
as of
12/31/2017
Abode Communities
$ - 500,000 $ 500,000 $ 2,500 $
- 81,932 81,932 178
500,000 - 500,000 3,833
2,000,000 - 2,000,000 20,833
500,000 - 500,000 2,500
- 1,250,000 1,250,000 6,336
991,000 - 991,000 -
- 1,750,000 1,750,000 -
1,500,000 - 1,500,000 2,521
109,625 - 109,625 177
Development Entities
4,294,550 - 4,294,550 -
$500,000 unsecured loan with Wells Fargo Bank, bearing interest at

2.00% per annum, interest payable in quarterly installments, due August 2018, with one 2-year extension available.

Unsecured term-loan payable to Wells Fargo Bank, payable in monthly principal and interest installments of $7,474, with an interest rate of 6.00% per annum through maturity in September 2018. $500,000 unsecured loan with Wells Fargo Bank, bearing interest at

2.00% per annum, interest payable in quarterly installments through June 2021. Thereafter, principal payments of $62,500 plus interest are due quarterly through maturity in June 2023.

Rolland Curtis Commercial QALICB, Inc. $4,294,500 promissory note secured by deed of trust bearing interest at the rate of 1% per annum, maturing on December 31, 2052. Interest only is payable annually through November 2, 2024 at which time a principal payment of $1,100,000 is due. Beginning December 1, 2025 and annually thereafter a payment of $87,783, which includes principal and interest, is due.
$2,000,000 unsecured line of credit with Dignity Health, bearing interest at 5.00% per annum, interest payable in quarterly installments, due March 2019.
$500,000 unsecured loan with US Bank, bearing interest at 3.00% per annum, interest payable in quarterly installments, due January 2022. $1,250,000 unsecured loan with MUFG Union Bank, bearing interest at 2.25% per annum, interest payable in quarterly installments, due July 2018, with two 1-year extensions available.
$2,000,000 unsecured loan payable to Housing Partnership Fund, bearing interest at 5.00% per annum, interest payable monthly, due January 2020.
$2,250,000 unsecured loan payable to Low Income Investment Fund, bearing interest at 5.50% per annum, interest payable monthly, due November 2018. Under certain circumstances, a portion of the loan up to $1,100,000 may be extended to May 2024.

Abode Communities
Notes to Consolidated Financial Statements
December 31, 2017 and 2016
30 Current portion
Long-term
portion
Principal
balance as of
12/31/2017
Accrued interest
as of
12/31/2017
1,945,450 - 1,945,450 -
3,880,000 - 3,880,000 156,817
16,161,828 - 16,161,828 41,770
50,001 50,001 135
7,133,411 - 7,133,411 19,227
1,895,547 - 1,895,547 7,516
8,144,252 - 8,144,252 21,691
461,148 - 461,148 1,479
2,561,000 - 2,561,000 39,269
430,000 430,000 6,522
$3,880,000 capitalized ground lease payment loan for Vista del Mar, bearing interest at 3.00% per annum. Interest deferred until conversion to permanent loan. Thereafter, principal and interest payable annually from residual receipts, as defined in loan agreement.

All unpaid principal and interest is due upon maturity in September 2071.

Construction and permanent loan for Vista del Mar, maximum proceeds of $24,475,000. Interest at one-month LIBOR + 1.80% (3.16% at December 31, 2017) payable monthly during construction period, principal plus interest at 3.61% payable monthly after conversion. All unpaid principal and interest is due upon maturity on September 1, 2049.

Rolland Curtis East, L.P. construction and permanent loan, maximum proceeds of $26,238,329. Interest at one-month LIBOR + 1.75% (3.13% at December 31, 2017) payable monthly until conversion from construction to permanent loan, principal and interest at 5.45% payable monthly after conversion. All unpaid principal and interest is due 35 years from the date of conversion.

Construction and permanent loan for 44000 Sahuayo Street, maximum proceeds of $19,922,978. Interest at one-month LIBOR +

2.35% (3.725% at December 31, 2017) payable monthly during construction period, principal plus interest at 5.22% payable monthly after conversion. All unpaid principal and interest is due on 15 years from the date of conversion.

Rolland Curtis West, L.P. construction loan, maximum proceeds of $1,500,000. Interest at one-month LIBOR + 1.75% (3.13% at December 31, 2017) payable monthly. All unpaid principal and interest is due June 1, 2019.
$4,900,000 loan from Los Angeles Housing and Community
Investment Department to Rolland Curtis West, L.P. bearing interest at 4% per annum payable from residual receipts beginning April 2019 through maturity in April 2074.
$2,600,000 loan from the Community Development Commission of the County of Los Angeles to 44000 Sahuayo Street, L.P. bearing interest at 3% per annum payable from residual receipts beginning June 2021 through maturity in June 2074.
$430,000 loan from the administrative general partner to 44000 Sahuayo Street, L.P. bearing interest at 3% per annum payable annually from available cash flow through maturity in June 2072.

Rolland Curtis West, L.P. construction and permanent loan, maximum proceeds of $22,000,000. Interest at one-month LIBOR + 1.75% (3.13% at December 31, 2017) payable monthly until conversion from construction to permanent loan, principal and interest at 5.45% payable monthly after conversion. All unpaid principal and interest is due 35 years from the date of conversion.

Abode Communities
Notes to Consolidated Financial Statements
December 31, 2017 and 2016
31 Current portion
Long-term
portion
Principal
balance as of
12/31/2017
Accrued interest
as of
12/31/2017
2,053,316 - 2,053,316 10,609
2,235,451 - 2,235,451 9,259
Operating Entities
4,250,000 - 4,250,000 20,988
- 2,659,503 2,659,503 -
1,750,000 5,558,170 7,308,170 22,506
1,070,000 3,451,158 4,521,158 8,304
3,250,000 6,777,044 10,027,044 17,397
44,727,278 1,690,028 46,417,306 181,924
163,952,824 - 163,952,824 35,728,277
Viviendas del Valle construction and permanent loan, maximum proceeds of $10,500,000. Interest at one-month LIBOR + 1.75% (2.63% at December 31, 2017) payable monthly until conversion when the current portion will be paid off using proceeds from capital contributions and the remaining will convert to a permanent loan, principal and interest at 4.53% payable monthly after conversion. All unpaid principal and interest is due 15 years from the date of conversion.
$2,280,000 acquisition loan for 4347 Adams, payable in monthly installments of interest-only at the rate of 4.81% per annum through March 31, 2018 and 5.15% per annum through maturity on April 1, 2019.
$2,084,000 acquisition loan for Westmont Vista, payable in monthly installments of interest-only at the rate of 6% through maturity in January 2019.

Permanent loans with annual payments from available excess cash or residual receipts, bearing interest from 0% to 10.5% and maturing between December 2019 and December 2073.

Permanent loans with principal and interest payable monthly, bearing interest from 3.25% to 8.17%, maturing between January 2017 and May 2047. As of the report date all loans are current.

E. Victor Villa construction and permanent loan, maximum proceeds of $4,250,000. Interest at 3.90% payable monthly until conversion from construction to permanent loan, principal and interest payable monthly after conversion. All unpaid principal and interest is due upon maturity in June 2036.

E. Victor Villa construction loan, maximum proceeds of $2,750,000.

Interest at one-month LIBOR + 2.01% (2.925% at December 31, 2017) payable monthly. All unpaid principal and interest was due upon maturity in June 2018. Repayment of unpaid principal and interest occurred in January 2018.

Sun Sage Homes construction and permanent loan, maximum proceeds of $8,500,000. Interest at one-month LIBOR + 2.25% (3.61% at December 31, 2017) payable monthly until conversion when the current portion will be paid off using proceeds from capital contributions and the remaining will convert to a permanent loan, principal and interest at 4.24% payable monthly after conversion. All unpaid principal and interest is due upon maturity in May 2039.

New Park Place construction and permanent loan, maximum proceeds of $4,612,200. Interest at one-month LIBOR + 1.75% (2.63% at December 31, 2017) payable monthly until conversion when the current portion will be paid off using proceeds from capital contributions and the remaining will convert to a permanent loan, principal and interest at 4.53% payable monthly after conversion. All unpaid principal and interest is due 20 years from the date of conversion.

Abode Communities
Notes to Consolidated Financial Statements
December 31, 2017 and 2016
32 Current portion
Long-term
portion
Principal
balance as of
12/31/2017
Accrued interest
as of
12/31/2017
3,629,000 - 3,629,000 -
440,000 - 440,000 -
367,438 - 367,438 9,433
Subtotal 280,283,119 23,717,835 304,000,954 36,342,001
- - (4,168,970) -
$ 280,283,119 23,717,835 $ 299,831,984 $ 36,342,001 $
Debt issuance costs, net of accumulated amortization of $999,774 Loan made to ACH for the benefit of Centennial Place, annual interest at the rate of 3.00% payable from residual receipts. All outstanding principal and interest is payable upon maturity in September 2029.

Non-interest bearing permanent loans with principal either deferred until maturity or forgivable if certain terms are met. Maturity dates are through April 2075.

Affiliated Nonprofit Corporations
Abode Communities
Notes to Consolidated Financial Statements
December 31, 2017 and 2016
33 Current portion as
of 12/31/2017
Long-term portion
as of 12/31/2017
Principal
balance as of
12/31/2017
Accrued interest
as of
12/31/2017
Abode Communities
Nonrecourse Debt $ 991,000 - $ $ 991,000 $ -
Recourse Debt 3,581,932 4,609,625 8,191,557 38,878
Total Abode Communities 3,581,932 5,600,625 9,182,557 38,878 Development Entities
Nonrecourse Debt 50,815,954 - 50,815,954 307,772
Recourse Debt 430,000 - 430,000 6,522
Total Development Entities - 51,245,954 51,245,954 314,294 Operating Entities (nonrecourse)
Hard Debt 55,047,278 20,135,903 75,183,181 251,119
Soft Debt 167,581,824 - 167,581,824 35,728,277
Total Operating Entities 20,135,903 222,629,102 242,765,005 35,979,396 Affiliated Nonprofit Corporations
Nonrecourse Debt 807,438 - 807,438 9,433
Total Affiliated Nonprofit
Corporations 807,438 - 807,438 9,433
Total $ 23,717,835 $ 280,283,119 $ 304,000,954 $ 36,342,001 Current portion as
of 12/31/2016
Long-term portion
as of 12/31/2016
Principal
balance as of
12/31/2016
Accrued interest
as of
12/31/2016
Abode Communities
Nonrecourse Debt $ 991,000 100,000 $ $ 1,091,000 $ -
Recourse Debt 2,104,280 4,331,923 6,436,203 60,106
Total Abode Communities 2,204,280 5,322,923 7,527,203 60,106 Development Entities
Nonrecourse Debt 10,675,340 1,986,872 12,662,212 65,030 Total Development Entities 1,986,872 10,675,340 12,662,212 65,030 Operating Entities (nonrecourse)
Hard Debt 55,811,281 23,351,157 79,162,438 263,399
Soft Debt 163,450,833 899,000 164,349,833 32,211,154
Total Operating Entities 24,250,157 219,262,114 243,512,271 32,474,553 Affiliated Nonprofit Corporations
Nonrecourse Debt 2,546,167 - 2,546,167 3,958
Total Affiliated Nonprofit
Corporations 2,546,167 - 2,546,167 3,958
Total $ 28,441,309 $ 237,806,544 $ 266,247,853 $ 32,603,647 Abode Communities
Notes to Consolidated Financial Statements
December 31, 2017 and 2016
34 The annual maturities of long-term debt for each of the next five years and thereafter subsequent to December 31, 2017 are as follows:

Abode
Communities
Development
Entities Operating Entities
Affiliated
Nonprofit
Corportions Total
2018 3,581,932 $ - $ 20,135,903 $ - $ 23,717,835 $
2019 2,109,625 13,670,146 1,646,705 - 17,426,476
2020 1,500,000 - 1,398,426 - 2,898,426
2021 125,000 - 1,443,726 - 1,568,726
2022 750,000 - 1,436,949 - 2,186,949
Thereafter 1,116,000 37,575,808 216,703,296 807,438 256,202,542 $ 51,245,954 9,182,557 $ 242,765,005 $ 807,438 $ 304,000,954 $ Interest capitalized into project development costs and property, equipment and improvements totaled $1,854,788 and $868,033 for the years ended December 31, 2017 and 2016, respectively.

The Los Angeles Housing & Community Investment Department ("HCID") loaned Abode Communities $1,886,852 at 5% per annum, for the purpose of developing affordable housing. HCID allowed Abode Communities to subsequently assign the real property and its rights and obligations under the loan agreement to Parthenia Housing Associates, L.P., in which Abode Communities participates as the General Partner. Because the funds were part of a government grant that required the loan to remain with Abode Communities, the security interest for the HCID loan is cross collateralized against real property assigned to the limited partnership.

Concurrent with the execution of the loan, Abode Communities received a $1,886,852 promissory note from the limited partnership, the terms of which are identical to the loan payable to HCID.

Abode Communities
Notes to Consolidated Financial Statements
December 31, 2017 and 2016
35 Selma entered into an interest rate swap agreement (the "swap agreement") with Union Bank (the "swap provider") to reduce the impact of changes in interest rates. The swap agreement became effective April 1, 2017. Under the terms of the swap agreement, Selma has agreed to pay interest to the swap provider at a fixed rate of 5.56% exclusive of any fees, add-ons or other trustee or bank charges, while the swap provider has agreed to make Selma's required monthly mortgage payment.

The notional amount of the swap agreement is equal to the outstanding amount of the loan. The swap agreement expires upon payment in full of the note.

A liability for the fair market value of the interest rate swaps as of December 31, 2017 and 2016 in the amount of $1,406,489 and $1,602,201, respectively, has been recorded, which represents the fair value of the future differences in interest to be paid and received under the swap agreements over the remaining term of the swap agreements and is included in fair market value of interest rate swap on the consolidated statements of financial position. For the year ended December 31, 2017, a gain on fair value of $195,712 has been recognized and is included in revenue on the consolidated statements of activities. For the year ended December 31, 2016, a loss on fair value of $1,389,127 has been recognized and is included in expenses on the consolidated statements of activities.

Note 13 - Fair value
As of December 31, 2017 and 2016, the liability which represents the fair value of the interest rate swap in the amount of $1,406,489 and $1,602,201, respectively, is classified within Level 2 of the fair value hierarchy. No other assets or liabilities are measured at fair value as of December 31, 2017 and 2016. The following table presents the financial liability that was measured at fair value on a recurring basis as of December 31, 2017 and 2016:

Level 1 Level 2 Level 3 Total

Interest rate swaps at
December 31, 2017 $ - $ 1,406,489 $ - $ 1,406,489

Interest rate swaps at
December 31, 2016 $ - $ 1,602,201 $ - $ 1,602,201
Abode Communities
Notes to Consolidated Financial Statements
December 31, 2017 and 2016
36 On a recurring basis, the Partnerships measure the interest rate swaps at the estimated fair value.

In determining the fair value of the interest rate swap derivative, management uses the present value of expected cash flows based on the market observable interest rate yield curve commensurate with the term of the instrument. The Partnerships incorporate credit valuation adjustments to appropriately reflect both the Partnerships’ nonperformance risk and that of the respective counterparty in the fair value measurement. The credit valuation adjustments utilize Level 3 inputs, such as estimates of current credit spreads, to evaluate the likelihood of default by either the respective counterparty or the Partnerships. However, management has determined that as of December 31, 2017 and 2016, the impact of the credit valuation adjustments was not significant to the overall valuation of the swap. As a result, the fair value of the swap is considered to be based primarily on Level 2 inputs.

Note 14 - Grants payable
Grants payable consists of the following as of December 31:
2017 2016
TCAC grants payable 7,083,498 $ 7,290,712 $
CDC grant payable 231,250 237,500
$ 7,528,212 7,314,748 $
TCAC grants payable represent funds received by Operating Entities from the California Tax Credit Allocation Committee ("TCAC") through the American Recovery and Reinvestment Act of 2009 Section 1602 award program in the form of non-interest bearing forgivable loans. The loans are secured by deeds of trust and assignments of rents on the underlying real property interests and repayment is required only in the event the Operating Entities do not operate the housing projects in compliance with regulatory and program requirements during their 15-year compliance periods. The TCAC grants are being recognized as grant revenue over the 40-year estimated useful life of the buildings and improvements. TCAC grant revenue recognized for each of the years ended December 31, 2017 and 2016 was $207,213.

CDC grants payable represent funds received from the Community Development Commission of the County of Los Angeles to make repairs and improvements to the project in the form of a grant which is forgivable over a seven-year period so long as the borrower annually complies with the terms of the grant agreement. The grant proceeds are being recognized as grant revenue over the 40-year estimated useful life of the related improvements. Grant revenue recognized for each of the years ended December 31, 2017 and 2016 was $6,250.

Abode Communities
Notes to Consolidated Financial Statements
December 31, 2017 and 2016
37 Note 15 - Temporarily restricted net assets
The following revenues are recorded as temporarily restricted net assets as of December 31, 2017 and 2016:

Grant received from Purpose Period 2017 2016
Rose Hills Foundation Resident Services 1/1/2018-12/15/2019 200,000 $ - $ Annenberg Foundation Resident Services 11/15/2017-12/31/2018 88,889 - Union Bank Foundation General Operating 1/1/2018-12/31/2020 90,000 - Wells Fargo Foundation General Operating 1/1/2018-12/31/2018 50,000 - Citi Community Capital Fundraising Event 2018 30,000 -
St. Johh's Well Child and Family
Center, Inc.

Rolland Curtis Capital
Campaign 3/29/17-9/30/2018 250,000 -
Weingart Foundation Rolland Curtis Capital
Campaign 2/19/2016-3/8/2018 - 750,000
Ahmanson Foundation Rolland Curtis Capital
Campaign 12/1/2016-06/30/2018 - 500,000
W.M. Keck Foundation Rolland Curtis Capital
Campaign 12/1/2016-06/30/2018 - 300,000
Ralph M. Parsons Foundation Rolland Curtis Capital
Campaign 12/1/2016-06/30/2018 - 250,000
California Community Foundation General Operating 7/1/2016-6/30/2018 100,000 100,000 Various Resident Services Various 21,500 1,104
Total temporarily restricted net assets 830,389 $ 1,901,104 $ Note 16 - Retirement plan
Abode Communities maintains a Voluntary 401(k) Retirement Plan covering all eligible employees of Abode Communities. The plan provides for voluntary employee contributions and Abode Communities matching of up to 4% of employee annual salary. All employer and employee contributions are immediately vested. Matching contributions to the plan for the years ending December 31, 2017 and 2016 totaled $197,080 and $171,220, respectively.

Note 17 - Operating leases
Abode Communities leases its office facilities under an operating lease which expires August 31, 2025. Monthly rent as of December 31, 2017 and 2016 was $40,208 and $39,037, respectively, with annual increases of 3%.

Abode Communities leases its photocopying equipment under various operating lease arrangements which expire between August and September 2022. Minimum monthly payments are $6,989.

Abode Communities
Notes to Consolidated Financial Statements
December 31, 2017 and 2016
38 Rent incurred for the years ended December 31, 2017 and 2016 was $478,938 and $478,938, respectively. The future minimum lease payments for each of the next five years and thereafter subsequent to December 31, 2017 are as follows:
2018 568,784 $
2019 583,331
2020 598,315
2021 613,748
2022 608,487
Thereafter 1,536,767
$ 4,509,432
Note 18 - Related party transactions
In the ordinary course of business, Abode Communities has significant related party transactions with affiliates. It provides a considerable amount of funding in connection with the development of projects. It also provides architectural services, development services, project management services, social services and property management services. In certain cases, Abode Communities pays operating expenses on behalf of affiliates, which are reimbursed to Abode Communities on a monthly basis. In certain instances however, such as when individual properties may be experiencing cash flow difficulties, repayment may be delayed, providing the individual properties with a source of funds.

The amounts loaned by Abode Communities primarily represent development loans to affiliates.

These loans are unsecured and due on demand and some bear interest.

Note 19 - Guaranties
In its role as general partner of the various Operating Entities, Abode Communities is liable for recourse liabilities. These projects have been allocated low-income housing tax credits pursuant to Internal Revenue Code Section 42. In connection with their general partnership interests, certain guarantees have been made to the partnerships, including the following:

Development deficit and repurchase guarantees
Abode Communities is obligated to pay any development cost deficits or, at the option of the investor limited partner, to purchase the interest of the investor limited partner if the project is not completed or if permanent financing has not been obtained by specific dates. This obligation typically terminates upon funding of permanent project financing. As of December 31, 2017 and 2016, no amounts were due under this guaranty.

Construction loan repayment and completion guarantees
Abode Communities has provided repayment guarantees for construction loans as well as unlimited construction completion guarantees in favor of certain lenders for the development and lease-up of the project, should the project not receive expected permanent financing, or should the cost of the development exceed permanent financing received. There are no Abode Communities
Notes to Consolidated Financial Statements
December 31, 2017 and 2016
39 significant delays or cost overruns in current development projects. As of December 31, 2017 and 2016, no amounts were due under this guaranty.

Operating deficit guaranty
Abode Communities and ACH are each obligated to make non-interest bearing loans to cover operating cash shortfalls which are repayable through available cash flow. The guarantees are for various lengths of time, as defined in the limited partnership agreements. As of December 31, 2017 and 2016, Abode Communities has one outstanding advance of $252,451 made under this guaranty, which is reported net of allowance for doubtful accounts of $252,451 on the accompanying consolidated statements of financial position. The following are the projects that are under the operating deficit guaranty and the maximum amount of the guaranty:

Project Amount
Evergreen Apartments, L.P. $ 810,000
Grisham Community Housing, L.P. 310,000
Las Brisas Community Housing Limited Partnership 10,000 Las Brisas Community Housing II, L.P. 296,800
New Dana Strand Partners I, L.P. 425,000
Wilmington Housing Associates Limited Partnership 607,510 Orange Grove Gardens, L.P. 10,000
Glassell Park, L.P. 435,000
Sherman Way Community Housing, L.P. 520,000
Kittridge Housing, L.P. 680,000
Laurel Village, L.P. 590,800
Selma Community Housing, L.P. 464,000
New Park Place, L.P. 318,791
Viviendas Del Valle, L.P. 552,551
Sun Sage Homes, L.P. 380,000
Recapture guaranty
In the event of a recapture of tax credits previously received by the investor limited partners/members, Abode Communities and ACH shall be obligated to reimburse the investor limited partner or investment member for any recaptured credits plus any associated penalties, interest or additional taxes due. Abode Communities and ACH shall not be liable for a recapture event caused by a change in law or actions of the investor or special limited partner. As of December 31, 2017 and 2016, no amounts were due under these guaranties.

Note 20 - Concentration of credit risk
Abode Communities maintains cash with various financial institutions. All reserves are held in Abode Communities' name. At times, these balances may exceed the federal insurance limits; however, Abode Communities has not experienced any losses with respect to its bank balances in excess of government provided insurance. Management believes that no significant concentration of credit risk exists with respect to these cash balances at December 31, 2017.

Abode Communities
Notes to Consolidated Financial Statements
December 31, 2017 and 2016
40 Note 21 - Commitments and contingencies
Grant and property use restrictions
The properties owned and operated by Abode Communities are typically developed using monies provided by grants and restrictive, low-interest rate loans. The terms of these loans restrict the use of the property and generally require it be rented to low-income qualified tenants for the period of the grant or related loan term. Abode Communities also receives grants with restrictions other than property use. Failure to comply with the terms of the grant or the loans would result in a requirement to repay a portion or all of the proceeds received.

Rental assistance contracts
Six of the properties owned by Abode Communities have entered into rental assistance contracts with HUD or a local housing authority. The contracts have various terms and require the affiliate projects to operate as a low-income housing property and to obtain approval of all rent increases from HUD or the local housing authority.

Due to this contingency, interest has not been accrued because the future fair market value of the property at loan maturity is not expected to be sufficient. The following is a schedule of contingent interest as of December 31 that could be due if the fair market value of the property is sufficient:
2017 2016
Centennial Place Limited Partnership 1,311,000 $ 1,045,000 $ Clark Residence Limited Partnership 3,956,000 3,801,000 Fremont Building Limited Partnership 3,871,000 3,678,000 Parthenia Housing Associates, L.P. 1,922,000 1,827,000
Villa Parke Homes 592,000 559,000
$ 10,910,000 11,652,000 $
Litigation
Abode Communities is subject to lawsuits and claims, which arise out of the normal course of its activities. In the opinion of management, based upon the opinions of legal counsel, the disposition of any and all such actions, of which it is aware, will not have a material effect on the financial position of Abode Communities.

Abode Communities
Notes to Consolidated Financial Statements
December 31, 2017 and 2016
41 Morgan Place, L.P., Sherman Way Community Housing, L.P. and Hart Village, L.P., along with 60 other housing property owners with Community Redevelopment Agency of the City of Los Angeles ("CRA") funding, were listed as nominal defendants in the lawsuit brought against the City of Los Angeles and the Community Redevelopment Agency of the City of Los Angeles by the Plaintiffs:

Independent Living Center of Southern California, Fair Housing Council of San Fernando Valley and Communities Actively Living Independent and Free.

The complaint alleges that CRA engaged in a pattern and practice of discrimination by failing to ensure apartment complexes that were funded with CRA funds were accessible to people with disabilities. Management does not anticipate any material monetary cost, physical corrections or mitigations.

Economic concentrations
Abode Communities owns, operates and invests in rental property in Southern California whose future operations could be affected by changes in economic or other conditions in that geographical area or by changes in federal low-income housing subsidies or the demand for such housing.

Note 22 - Subsequent events
Events that occur after the statement of financial position date but before the financial statements were available to be issued must be evaluated for recognition or disclosure. The effects of subsequent events that provide evidence about conditions that existed at the statement of financial position date are recognized in the accompanying financial statements. Subsequent events which provide evidence about conditions that existed after the statement of financial position date, require disclosure in the accompanying notes. Management evaluated all activity of Abode Communities through June 25, 2018, the date the consolidated financial statements were available to be issued, and concluded that no subsequent events have occurred that would require recognition in the consolidated financial statements or disclosure in the notes to consolidated financial statements except as noted below:

In April 2018, Abode Communities obtained a $2,000,000 predevelopment line of credit from Mercy Loan Fund which matures in April 2021. Interest at the rate of 6.0% per annum is payable monthly.

In January 2018, Abode Communities acquired Grandview Apartments, a 36-unit rental project consisting of 18 duplexes. The purchase price was $7,350,000, which was financed primarily by a loan from Low Income Investment Fund of $8,247,500. The loan includes a $1,200,000 interest reserve and operating and replacement reserves totaling $165,000. Interest at the rate of 5.35% per annum is payable monthly through maturity in January 2021.

Supplementary Information
Abode Communities and Affiliates
Consolidating Statements of Financial Position
December 31, 2017
43 Abode
Communities
Development
Entities
Operating
Entities
Affiliated
Nonprofit
Corporations Eliminations Total
Assets
Cash and cash equivalents 7,376,398 $ 7,241,771 $ 6,255,515 $ 133,809 $ - $ 21,007,493 $ Restricted reserves and deposits 2,274,554 524,090 12,362,713 - - 15,161,357 Accounts receivable, net 2,399,065 - 214,681 - (2,060,198) 553,548 Grants receivable 455,861 - - - - 455,861Notes receivable, net 9,007,444 - - 1,107,965 (5,820,859) 4,294,550Interest receivable 282,222 - - 9,433 (291,655) -Prepaid expenses 381,169 - 365,453 - - 746,622Due from affiliates 1,215,444 - - 2,051,022 (3,264,622) 1,844 Advances to projects, net 797,324 - - - (797,324) -
Development fee and interest receivable 9,571,828 - - - (9,571,828) -Deposits 55,158 2,575,000 39,112 - (2,000,000) 669,270Investments - other 350,886 - - - - 350,886Property and equipment, net 439,921 65,330,369 353,116,456 - (12,804,644) 406,082,102Deferred fees, net - - 661,145 - - 661,145Prepaid ground lease - - 2,731,742 - - 2,731,742Other assets 45,004 40,341 1,294,998 - - 1,380,343 Total assets 34,652,278 $ 75,711,571 $ 377,041,815 $ 3,302,229 $ (36,611,130) $ 454,096,763 $ Abode Communities and Affiliates
Consolidating Statements of Financial Position
December 31, 2017
See Independent Auditor's Report.
44 Abode
Communities
Development
Entities
Operating
Entities
Affiliated
Nonprofit
Corporations Eliminations Total
Liabilities
Accounts payable 250,409 $ 10,174,596 $ 4,908,034 $ 6,609 $ (179) $ 15,339,469 $ Prepaid rents - - 172,144 - - 172,144
Accrued vacation 306,672 - - - - 306,672Accrued interest payable 38,877 455,113 37,862,027 9,433 (2,023,449) 36,342,001 Security deposit liability - - 1,257,856 - - 1,257,856Deferred revenue 7,789,263 - 215,935 - (6,836,520) 1,168,678Partnership investments 8,157 - - 2,658,443 (2,657,556) 9,044Development fee payable - 2,270,230 7,193,701 - (9,463,931) -Due to affiliates 6,516 3,160,767 3,533,309 367,518 (7,068,110) -Fair market value of interest rate swaps - - 1,406,489 - - 1,406,489Grants payable - - 7,314,748 - - 7,314,748Mortgages and notes payable, net 9,151,599 54,074,420 249,674,352 2,807,438 (15,875,825) 299,831,984 Total liabilities 17,551,493 70,135,126 313,538,595 5,849,441 (43,925,570) 363,149,085 Net assets
Unrestricted, controlling 16,270,396 12,636 (19,224,229) (2,547,212) 7,527,440 2,039,031 Unrestricted, noncontrolling - 5,563,809 82,727,449 - (213,000) 88,078,258Temporarily restricted 830,389 - - - - 830,389 Total net assets 17,100,785 5,576,445 63,503,220 (2,547,212) 7,314,440 90,947,678Total liabilities and net assets 34,652,278 $ 75,711,571 $ 377,041,815 $ 3,302,229 $ (36,611,130) $ 454,096,763 $ Abode Communities and Affiliates
Consolidating Statements of Financial Position
December 31, 2016
45 Abode
Communities
Development
Entities
Operating
Entities
Affiliated
Nonprofit
Corporations Eliminations Total
Assets
Cash and cash equivalents 5,309,982 $ 1,690,707 $ 4,739,819 $ 368,550 $ - $ 12,109,058 $ Restricted reserves and deposits 501,325 - 11,326,464 - - 11,827,789 Accounts receivable, net 2,680,107 - 115,896 3,753 (2,299,185) 500,571 Grants receivable 1,574,700 - - - - 1,574,700Notes receivable, net 6,203,269 - - 461,694 (5,164,963) 1,500,000Prepaid expenses 241,909 - 386,109 - - 628,018Due from affiliates 1,758,740 100 - 2,250,431 (3,980,611) 28,660 Advances to projects, net 1,813,013 - - - (1,813,013) - Development fee and interest receivable 5,875,216 - - - (5,875,216) -Deposits 104,396 2,450,000 33,285 - - 2,587,681Investments - other 1,008,509 - - - - 1,008,509Property and equipment, net 482,544 20,624,222 345,218,817 - (12,907,055) 353,418,528Deferred fees, net - - 607,230 - - 607,230Prepaid ground lease - - 2,779,744 - - 2,779,744Other assets 142,994 10,582 614,216 205 - 767,997 Total assets 27,696,704 $ 24,775,611 $ 365,821,580 $ 3,084,633 $ (32,040,043) $ 389,338,485 $ Abode Communities and Affiliates
Consolidating Statements of Financial Position
December 31, 2016
See Independent Auditor's Report.
46 Abode
Communities
Development
Entities
Operating
Entities
Affiliated
Nonprofit
Corporations Eliminations Total
Liabilities and Net Assets
Liabilities
Accounts payable 410,940 $ 2,140,003 $ 5,096,553 $ 1,996 $ (269,383) $ 7,380,109 $ Prepaid rents - - 111,632 - - 111,632
Accrued vacation 283,605 - - - - 283,605Accrued interest payable 60,106 65,030 33,962,095 3,958 (1,487,542) 32,603,647 Security deposit liability - - 1,243,458 - - 1,243,458Deferred revenue 7,827,865 - 313,421 - (6,647,823) 1,493,463Partnership investments (904,537) - - 2,099,788 (1,186,905) 8,346Development fee payable - 55,167 5,734,745 - (5,789,912) -Due to affiliates 3,429 4,847,679 3,302,140 12,553 (8,165,801) -Fair market value of interest rate swaps - - 1,602,201 - - 1,602,201 Grants payable - - 7,528,212 - - 7,528,212Mortgages and notes payable, net 7,502,560 15,890,625 250,264,614 2,546,167 (13,219,929) 262,984,037 Total liabilities 15,183,968 22,998,504 309,159,071 4,664,462 (36,767,295) 315,238,710 Net assets
Unrestricted, controlling 10,611,632 29,571 (17,672,148) (1,579,829) 4,989,364 (3,621,410) Unrestricted, noncontrolling - 1,747,536 74,334,657 - (262,112) 75,820,081Temporarily restricted 1,901,104 - - - - 1,901,104 Total net assets 12,512,736 1,777,107 56,662,509 (1,579,829) 4,727,252 74,099,775 Total liabilities and net assets 27,696,704 $ 24,775,611 $ 365,821,580 $ 3,084,633 $ (32,040,043) $ 389,338,485 $ Abode Communities and Affiliates
Consolidating Statements of Activities
Year Ended December 31, 2017
47 Temporarily
Restricted Net
Assets
Abode
Communities
Development
Entities
Operating
Entities
Affiliated
Nonprofit
Corporations Eliminations
Abode
Communities Total
Changes in net assets
Revenue and support
Grants and contributions 815,103 $ - $ 213,463 $ - $ - $ 730,389 $ 1,758,955 $ Development fees 7,113,133 - - - (10,779) - 7,102,354Architectural and consulting 3,839,119 - - - (1,972,115) - 1,867,004Resident services 615,984 - - - (562,148) - 53,836Property and partnership management fees - 2,522,848 - - (2,396,491) - 126,357 Rental income - - 22,219,699 - - - 22,219,699
Gain on FMV of interest rate swaps - - 195,712 - - - 195,712 Miscellaneous revenue 9,405 11,901 291,174 850 - - 313,330Forgiveness of debt - 98,451 899,000 - (98,451) - 899,000Interest income 237,292 101 7,673 342 (29,730) - 215,678Net assets released from restriction 1,801,104 - - - - (1,801,104) - Total revenue and support 16,953,988 110,453 23,826,721 1,192 (5,069,714) (1,070,715) 34,751,925 Expenses
Salaries 5,434,416 - 3,267,929 - (659,713) - 8,042,632Payroll taxes 388,871 - 210,165 - (46,316) - 552,720 Employee benefits 478,318 - 518,298 - (65,231) - 931,385 Consultants 1,337,842 - 193,082 - (528,348) - 1,002,576 Rent 478,938 - 77,624 - (69,168) - 487,394
Office expenses 461,864 15,007 361,378 266 (520,710) - 317,805 Tranining, travel and parking 126,898 - 4,851 - - - 131,749 Property and partnership management - 21,576 2,170,480 - (2,127,181) - 64,875 Resident services 42,467 - 826,319 - (562,148) - 306,638 Unrestricted Net Assets
Abode Communities and Affiliates
Consolidating Statements of Activities
Year Ended December 31, 2017
See Independent Auditor's Report.
48 Temporarily
Restricted Net
Assets
Abode
Communities
Development
Entities
Operating
Entities
Affiliated
Nonprofit
Corporations Eliminations
Abode
Communities Total
Unrestricted Net Assets
Repairs and maintenance 4,213 - 2,668,571 - - - 2,672,784Utilties and telephone 62,800 - 2,494,077 - - - 2,556,877Property tax and insurance 229,031 - 2,267,138 - (32,273) - 2,463,896Interest 295,885 - 8,608,656 - (288,515) - 8,616,026Legal and accounting 143,351 - 723,386 8,441 (202,205) - 672,973Bad debt expense 676,776 - 69,647 98,733 (698,451) - 146,705Real estate development 32,010 89,805 97,960 - (117,460) - 102,315Fundraising expenses 26,624 - - - - - 26,624Grant expense 28,171 - - - - - 28,171Depreciation and amortization 143,756 - 12,242,470 - (268,513) - 12,117,713 Total expenses 10,392,231 126,388 36,802,031 107,440 (6,186,232) - 41,241,858Change in net assets prior to equity in gain (loss) from investment in partnership interests (15,935) 6,561,757 (12,975,310) (106,248) 1,116,518 (1,070,715) (6,489,933) Equity in gain (loss) from investment in partnership interests - (1,405,373) - (534,386) 1,443,027 - (496,732) Change in net assets 5,156,384 $ (15,935) $ (12,975,310) $ (640,634) $ 2,559,545 $ (1,070,715) $ (6,986,665) $ Change in net assets controlling 5,156,384 $ (16,735) $ (1,398,119) $ (640,634) $ 2,559,545 $ (1,070,715) $ 4,589,726 $ Change in net assets noncontrolling - 800 (11,577,191) - - - (11,576,391) Total change in net assets 5,156,384 $ (15,935) $ (12,975,310) $ (640,634) $ 2,559,545 $ (1,070,715) $ (6,986,665) $ Abode Communities and Affiliates
Consolidating Statements of Activities
Year Ended December 31, 2016
49 Temporarily
Restricted Net
Assets
Abode
Communities
Development
Entities
Operating
Entities
Affiliated
Nonprofit
Corporations Eliminations
Abode
Communities Total
Changes in net assets
Revenue and support
Grants and contributions 367,975 $ - $ 213,463 $ - $ - $ 1,900,000 $ 2,481,438 $ Government grants 29,370 - - - - - 29,370Development fees 1,972,713 - - - - - 1,972,713Architectural and consulting 3,780,424 - - - (2,320,561) - 1,459,863Resident services 598,763 - - - (547,019) - 51,744Property and partnership management fees - 2,291,368 - - (2,147,780) - 143,588 Rental income - - 20,835,462 - - - 20,835,462Miscellaneous revenue 11,154 58,192 515,693 - (23,178) - 561,861Forgiveness of debt - - 2,636,135 - - - 2,636,135Interest income 230,450 - 5,865 614 (44,730) - 192,199Net assets released from restriction 274,979 - - - - (274,979) - Total revenue and support 9,557,196 58,192 24,206,618 614 (5,083,268) 1,625,021 30,364,373 Expenses
Salaries 4,788,500 - 3,125,506 - (798,852) - 7,115,154Payroll taxes 340,822 - 234,735 - (55,922) - 519,635 Employee benefits 451,618 - 478,263 - (68,086) - 861,795 Consultants 1,391,214 - 363,470 10,334 (767,182) - 997,836 Rent 478,938 - 57,059 - (100,705) - 435,292
Office expenses 429,772 8,293 396,086 327 (389,654) - 444,824 Tranining, travel and parking 155,130 - 11,947 - - - 167,077 Property and partnership management - - 1,995,229 - (1,983,121) - 12,108 Resident services 27,780 - 809,929 - (547,019) - 290,690 Repairs and maintenance 8,197 - 2,437,950 - - - 2,446,147 Unrestricted Net Assets
Abode Communities and Affiliates
Consolidating Statements of Activities
Year Ended December 31, 2016
See Independent Auditor's Report.
50 Temporarily
Restricted Net
Assets
Abode
Communities
Development
Entities
Operating
Entities
Affiliated
Nonprofit
Corporations Eliminations
Abode
Communities Total
Unrestricted Net Assets
Utilties and telephone 56,825 - 2,321,976 - - - 2,378,801Property tax and insurance 253,288 - 1,697,239 - (39,832) - 1,910,695Interest 133,367 - 6,980,154 - (292,086) - 6,821,435Loss on FMV of interest rate swaps - - 1,389,127 - - - 1,389,127Legal and accounting 136,666 - 625,596 12,796 (266,688) - 508,370Bad debt expense 109,037 - 123,781 - - - 232,818Real estate development - - 71,044 - (21,476) - 49,568Grant expense 100,175 - - - - - 100,175Depreciation and amortization 144,648 - 11,756,946 - (275,625) - 11,625,969 Total expenses 9,005,977 8,293 34,876,037 23,457 (5,606,248) - 38,307,516Change in net assets prior to equity in gain (loss) from investment in partnership interests 49,899 551,219 (10,669,419) (22,843) 522,980 1,625,021 (7,943,143) Equity in gain (loss) from investment in partnership interests - 426,164 - (605,512) 132,914 - (46,434)Change in net assets 977,383 $ 49,899 $ (10,669,419) $ (628,355) $ 655,894 $ 1,625,021 $ (7,989,577) $ Change in net assets controlling 977,383 $ 51,545 $ (269,804) $ (628,355) $ 655,894 $ 1,625,021 $ 2,411,684 $ Change in net assets noncontrolling - (1,646) (10,399,615) - - - (10,401,261) Total change in net assets $ 49,899 977,383 $ (10,669,419) $ (628,355) $ 655,894 $ 1,625,021 $ (7,989,577) $ Abode Communities and Affiliates
Consolidating Statements of Changes in Net Assets
Year Ended December 31, 2017
See Independent Auditor's Report.
51 Abode
Communities
Development
Entities
Operating
Entities
Affiliated
Nonprofit
Corporations Eliminations Total
Controlling interest
Beginning unrestricted net assets $ 29,571 10,611,632 $ (17,672,148) $ (1,579,829) $ 4,989,364 $ (3,621,410) $ Contributions - 50 442,594 - (442,644) -
Distributions - (250) (420,925) - 421,175 -
Transfer 502,380 - (175,631) (326,749) - -
Change in unrestricted net assets 5,156,384 (16,735) (1,398,119) (640,634) 2,559,545 5,660,441 Ending unrestricted net assets, controlling interest 16,270,396 $ 12,636 $ (19,224,229) $ (2,547,212) $ 7,527,440 $ 2,039,031 $ Noncontrolling interest
Beginning unrestricted net assets $ 1,747,536 - $ 74,334,657 $ - $ (262,112) $ 75,820,081 $ Contributions - 3,815,473 20,331,036 - 49,112 24,195,621 Distributions - - (58,553) - - (58,553)
Syndication costs - - (302,500) - - (302,500)
Change in unrestricted net assets - 800 (11,577,191) - - (11,576,391) Ending unrestricted net assets, noncontrolling interest - $ 5,563,809 $ 82,727,449 $ - $ (213,000) $ 88,078,258 $ Net assets - temporarily restricted, beginning of year 1,901,104 $ - $ - $ - $ - $ 1,901,104 $ Change in temporarily restricted net assets 730,389 - - - - 730,389Release of temporarily restricted net assets (1,801,104) - - - - (1,801,104) Subtotal (1,070,715) - - - - (1,070,715)
Net assets - temporarily restricted, end of year 830,389 $ - $ - $ - $ - $ 830,389 $ Abode Communities and Affiliates
Consolidating Statements of Changes in Net Assets
Year Ended December 31, 2016
See Independent Auditor's Report.
52 Abode
Communities
Development
Entities
Operating
Entities
Affiliated
Nonprofit
Corporations Eliminations Total
Controlling interest
Beginning unrestricted net assets $ 110,588 9,634,249 $ (13,035,631) $ (951,474) $ 3,599,571 $ (642,697) $ Contributions - 10,318 80,171 - (90,489) -
Distributions - (152,000) (11,255) - 163,255 -
Transfer - - (661,133) - 661,133 -
Transfer of interest - 9,120 (3,774,496) - - (3,765,376) Change in unrestricted net assets 977,383 51,545 (269,804) (628,355) 655,894 786,663 Ending unrestricted net assets, controlling interest 10,611,632 $ 29,571 $ (17,672,148) $ (1,579,829) $ 4,989,364 $ (3,621,410) $ Noncontrolling interest
Beginning unrestricted net assets $ 276,111 - $ 74,711,510 $ - $ - $ 74,987,621 $ Contributions - 1,749,132 7,194,665 - - 8,943,797
Distributions - - (327,207) - (262,112) (589,319)
Syndication costs - - (225,000) - - (225,000)
Transfer - - (661,133) - - (661,133)
Transfer of interest - (276,061) 4,041,437 - - 3,765,376 Change in unrestricted net assets - (1,646) (10,399,615) - - (10,401,261) Ending unrestricted net assets, noncontrolling interest - $ 1,747,536 $ 74,334,657 $ - $ (262,112) $ 75,820,081 $ Net assets - temporarily restricted, beginning of year 276,083 $ - $ - $ - $ - $ 276,083 $ Change in temporarily restricted net assets 1,900,000 - - - - 1,900,000Release of temporarily restricted net assets (274,979) - - - - (274,979) Subtotal 1,625,021 - - - - 1,625,021
Net assets - temporarily restricted, end of year 1,901,104 $ - $ - $ - $ - $ 1,901,104 $ Abode Communities and Affiliates
Consolidating Statements of Cash Flows
Year Ended December 31, 2017
53 Abode
Communities
Development
Entities
Operating
Entities
Affiliated
Nonprofit
Corporations Eliminations Total
Cash flows from operating activities
Changes in unrestricted net assets $ (15,935) 5,156,384 $ (12,975,310) $ (640,634) $ 2,559,545 $ (5,915,950) $ Changes in temporarily restricted net assets - (1,070,715) - - - (1,070,715) Adjustments to reconcile changes in net
assets to net cash provided by (used in) operating activities Depreciation and amortization - 143,756 12,242,470 - (268,513) 12,117,713 Ground lease expense - - 48,002 - - 48,002
Gain on FMV of interest rate swaps - - (195,712) - - (195,712) Loss on investments 1,405,373 - - 534,386 (1,443,027) 496,732 Amortization of grants payable - - (213,464) - - (213,464)Amortization of debt issuance costs - 38,593 239,816 - - 278,409 Forgiveness of debt - - (899,000) - - (899,000)
(Increase) decrease in
Accounts receivable - 566,809 (98,785) 3,753 (238,987) 232,790Grants receivable - 1,118,839 - - - 1,118,839 Prepaid expenses - (139,260) 20,656 - - (118,604)
Developer fee receivable - (3,696,612) - - 3,696,612 -
Deposits (125,000) 49,238 (5,827) - - (81,589)
Other assets (29,759) 97,990 (680,782) 205 - (612,346)
Increase (decrease) in
Accounts payable - (160,531) 3,695,454 4,613 269,204 3,808,740 Prepaid rents - - 60,512 - - 60,512
Accrued vacation - 23,067 - - - 23,067Accrued interest payable 390,083 (21,229) 3,899,932 5,475 (535,907) 3,738,354 Security deposit liability - - 14,398 - - 14,398
Deferred revenue - (38,602) (97,486) - (188,697) (324,785) Net cash provided by (used in) operating activities 219,389 3,473,100 5,054,874 (92,202) 3,850,230 12,505,391 Abode Communities and Affiliates
Consolidating Statements of Cash Flows
Year Ended December 31, 2017
54 Abode
Communities
Development
Entities
Operating
Entities
Affiliated
Nonprofit
Corporations Eliminations Total
Cash flows from investing activities
Investment in property and equipment (36,143,403) (101,133) (21,272,054) - (4,717,915) (62,234,505) Net deposits for rental property - - - - - -
Purchase of investment - (377,614) - - - (377,614)
Sale of investment - 256,791 - - - 256,791
Net (payment of) advances to projects - 1,015,689 - - (1,015,689) - Net (payment of) advances to affiliates 100 (2,540,014) 231,169 (77,061) 1,301,629 (1,084,177) Payment of tax credit monitoring fees - - (136,989) - - (136,989) Payment of developer fees - - (1,209,998) - 1,209,998 - Net deposits to restricted reserves and deposits (524,090) (1,773,229) (1,036,249) - - (3,333,568) Net cash used in investing activities (3,519,510) (36,667,393) (23,424,121) (77,061) (3,221,977) (66,910,062) Cash flows from financing activities
Principal payments on mortgages and notes payable (3,986,874) - (24,894,973) - - (28,881,847) Proceeds from mortgages and notes payable 42,580,242 1,610,446 25,034,259 261,271 (655,896) 68,830,322 Transfer - 502,380 (175,631) (326,749) - -
Contributions 3,815,523 - 20,773,630 - (393,532) 24,195,621 Distributions (250) - (479,478) - 421,175 (58,553)
Debt issuance costs paid (409,573) - (70,364) - - (479,937) Syndication costs paid - - (302,500) - - (302,500)
Net cash provided by (used in) financing activities 41,999,068 2,112,826 19,884,943 (65,478) (628,253) 63,303,106 Net increase (decrease) in cash and cash equivalents 5,551,064 2,066,416 1,515,696 (234,741) - 8,898,435 Cash and cash equivalents, beginning 1,690,707 5,309,982 4,739,819 368,550 - 12,109,058 Cash and cash equivalents, ending $ 7,241,771 7,376,398 $ 6,255,515 $ 133,809 $ - $ 21,007,493 $ Abode Communities and Affiliates
Consolidating Statements of Cash Flows
Year Ended December 31, 2017
See Independent Auditor's Report.
55 Abode
Communities
Development
Entities
Operating
Entities
Affiliated
Nonprofit
Corporations Eliminations Total
Cash and cash equivalents, beginning 1,690,707 5,309,982 4,739,819 368,550 - 12,109,058 Cash and cash equivalents, ending $ 7,241,771 7,376,398 $ 6,255,515 $ 133,809 $ - $ 21,007,493 $ Supplemental disclosure of cash flow information
Cash paid for interest, net of amount capitalized of $1,854,788 $ 628,988 350,772 $ 3,760,258 $ - $ - $ 4,740,018 $ Supplemental schedule of noncash investing and financing activities Accounts payable included in property
and equipment $ 8,034,593 - $ 3,824,823 $ - $ - $ 11,859,416 $ Contribution of fixed assets included in property and equipment - - 40,700 - - 40,700 Decrease in deposits and note payable - - - - 2,000,000 2,000,000 Forgiveness of debt principal 899,000 - - - 899,000
Developer fee payable 2,215,063 - 2,668,954 - (4,884,017) - Deferred financing costs included in accounts payable and accrued expenses - - 19,538 - - 19,538 Tax credit monitoring fee included in accounts payable - - 18,450 - - 18,450 Write off of fully depreciated property - - 37,774 - - 37,774 Interest on notes payable capitalized to principal, including capitalized interest - - 476,281 - - 476,281 Abode Communities and Affiliates
Consolidating Statements of Cash Flows
Year Ended December 31, 2016
56 Abode
Communities
Development
Entities
Operating
Entities
Affiliated
Nonprofit
Corporations Eliminations Total
Cash flows from operating activities
Increase (decrease) in unrestricted net assets $ 49,899 977,383 $ (10,669,419) $ (628,355) $ 655,894 $ (9,614,598) $ Increase in temporarily restricted net assets - 1,625,021 - - - 1,625,021 Adjustments to reconcile increase
(decrease) in net assets to net cash provided by (used in) operating activities Depreciation and amortization 144,648 - 11,756,946 - (275,625) 11,625,969 Ground lease expense - - 52,561 - - 52,561
Loss on FMV of interest rate swap - - 1,389,127 - - 1,389,127 Gain (loss) on investments (426,164) - - 605,512 (132,914) 46,434 Amortization of grants payable - - (213,463) - - (213,463)Amortization of debt issuance costs 2,490 - 414,429 - - 416,919 Gain on restructuring and forgiveness of debt and accrued interest - - (2,636,135) - - (2,636,135) (Increase) decrease in
Accounts receivable (575,121) - 10,783 (2,825) 508,269 (58,894) Grants receivable (1,456,300) - - - - (1,456,300)
Prepaid expenses 95,106 - 534 - - 95,640
Developer fee receivable 280,509 - - - (280,509) -
Deposits 50,001 - (13,794) - - 36,207
Other assets (14,263) (10,307) (344,643) (13) - (369,226) Abode Communities and Affiliates
Consolidating Statements of Cash Flows
Year Ended December 31, 2016
57 Abode
Communities
Development
Entities
Operating
Entities
Affiliated
Nonprofit
Corporations Eliminations Total
Increase (decrease) in
Accounts payable (159,819) - (368,297) (1,010) (73,805) (602,931) Prepaid rents - - 76,171 - - 76,171
Accrued vacation 31,672 - - - - 31,672Accrued interest payable 44,474 64,928 (539,449) 2,838 (198,680) (625,889) Security deposit liability - - 77,853 - - 77,853
Deferred revenue 2,931,980 - (131,642) - (2,160,119) 640,219 Net cash provided by (used in) operating activities 104,520 3,551,617 (1,138,438) (23,853) (1,957,489) 536,357 Cash flows from investing activities
Investment in property and equipment (94,737) (14,181,446) (25,004,998) - 2,138,176 (37,143,005) Net deposits for rental property - (350,000) - - - (350,000) Purchase of investment (75,000) - - - - (75,000)
Prepaid ground lease - - (232,692) - - (232,692)
Net (payment of) advances to projects (593,234) - - - 593,260 26 Net (payment of) advances to affiliates (2,976,508) - 824,879 (20,970) (272,480) (2,445,079) Payment of tax credit monitoring fees - - (45,396) - - (45,396) Payment of developer fees - (163,200) (139,251) - 302,451 - Net deposits to restricted reserves and deposits - (501,325) (2,021,630) - - (2,522,955) Net cash used in investing activities (14,694,646) (4,240,804) (26,619,088) (20,970) 2,761,407 (42,814,101) Abode Communities and Affiliates
Consolidating Statements of Cash Flows
Year Ended December 31, 2016
See Independent Auditor's Report.
58 Abode
Communities
Development
Entities
Operating
Entities
Affiliated
Nonprofit
Corporations Eliminations Total
Cash flows from financing activities
Principal payments on mortgages and notes payable (1,517,134) - (14,063,339) - - (15,580,473) Proceeds from mortgages and notes payable 16,262,213 2,899,422 36,734,666 24,906 (614,572) 55,306,635 Contributions 1,759,450 - 7,274,836 - (90,489) 8,943,797 Distributions - (152,000) (338,462) - (98,857) (589,319) Debt issuance costs paid (22,500) (371,587) (585,292) - - (979,379) Syndication costs paid - - (225,000) - - (225,000)
Net cash provided by financing 15,980,942 2,876,922 28,797,409 24,906 (803,918) 46,876,261 Net increase (decrease) in cash and cash equivalents 1,390,816 2,187,735 1,039,883 (19,917) - 4,598,517 Cash and cash equivalents, beginning 3,122,247 299,891 3,699,936 388,467 - 7,510,541 Cash and cash equivalents, ending $ 5,309,982 $ 1,690,707 $ 4,739,819 $ - 368,550 $ $ 12,109,058 Supplemental disclosure of cash flow information
Cash paid for interest, net of amount
capitalized of $868,033 $ - 142,042 $ 3,249,753 $ - $ - $ 3,391,795 $ Supplemental schedule of noncash investing and financing activities Accounts payable included in property
and equipment $ 2,131,941 - $ 962,471 $ - $ - $ 3,094,412 $ Transfer 661,133 - - - - 661,133
Forgiveness of debt principal - - 910,703 - - 910,703
Increase in loan receivable 1,500,000 - - - - 1,500,000

Santa Monica City CouncilJanuary 11, 2022

Santa Monica City Council
January 11, 2022