Planning & Zoning Committee

PLANNING & ZONING COMMITTEE NORTHBROOK VILLAGE HALL, 1225 CEDAR LANE November 13, 2014, 7:00 P.M. DEVELOPMENT & PLANNING SERVICES CONFERENCE ROOM (SECOND FLOOR – VILLAGE HALL) The Planning & Zoning Committee of the Village of Northbrook Board of Trustees will hold a meeting on Thursday, November 13, 2014, at 7:00 p.m. in the Development & Planning Services Conference Room on the second floor of the Village Hall, 1225 Cedar Lane, Northbrook, Illinois. The following will be discussed. MEETING AGENDA 1. CALL TO ORDER 2. HEAR FROM THE AUDIENCE 3. DISCUSSION: Proposed Modifications to the Affordable Housing Requirements for The Lodge by Essex (2220 Founders Drive) ATTACHMENTS:  Staff Report for Committee Meeting  Affordable Unit Covenant for The Lodge at 2220 Founders Drive  Materials Submitted by the Applicant 4. ADJOURN Jim Karagianis, Chair Planning/Zoning Committee Members: Trustee Buehler Please Note a “Light” Dinner will be served for Trustee Heller Board Members and staff attending Village of Northbrook Cook County, Illinois November 13, 2014 The Village of Northbrook is subject to the requirements of the Americans with Disabilities Act of 1990. Individuals with disabilities who plan to attend this meeting and who require certain accommodations in order to allow them to observe and/or participate in this meeting, or who have questions regarding the accessibility of this meeting or the facilities, are requested to contact Greg Van Dahm (847/664-4014) or Debbie Ford (847/664-4013) promptly to allow the Village of Northbrook to make reasonable accommodations for those persons. Hearing impaired individuals may call the TDD number, 564-8645, for more information.  MEMORANDUM VILLAGE OF NORTHBROOK DEVELOPMENT AND PLANNING SERVICES DEPARTMENT TO: RICHARD A. NAHRSTADT, VILLAGE MANAGER FROM: MICHAELA KOHLSTEDT, SENIOR PLANNER DATE: OCTOBER 14, 2014 SUBJECT: PCD-11-06: THE LODGE AMENDING THE AFFORDABLE UNIT RESTRICTIVE COVENANT INTRODUCTION On November 13, 2014, the Planning and Zoning Committee, at the direction of the Board of Trustees, is scheduled to conduct a review of an application submitted by Essex Communities on behalf of The Lodge of Northbrook, Inc. (the “Applicant”) as land lessee for 2220 Founders Drive (the “Subject Property”), which is owned by the Society of the Divine Word (the “Owner”). The Applicant is requesting to eliminate or to amend the attached Affordable Unit Covenant that was adopted with the approval of the development in February 2012. The Subject Property is part of the Techny Overlay District, specifically Parcel EC-2, and is zoned RS Residential Specialty. It is located on the west side of Founders Drive, north of the Northbrook Greens residential development and west of the Meadow Ridge residential development. The Subject Property consists of 6.42 acres which was originally approved in 2009 for an independent senior living facility and subsequently amended in 2011 and 2013. Phase 1 of the three phase project has been occupied, and construction of Phase 2 should be completed later this year. The Applicant believes that they will begin construction on the third phase within the next year. BACKGROUND INFORMATION In 2009, the Board approved an independent senior living facility that was to have no more than 140 units of which 10% were to be affordable. The project did not move forward due to the downturn in the economy. In 2011, the Board approved the development of no more than 130 units of which 15% were to be affordable. In 2013, the approvals were amended to allow the development to be constructed in three phases consisting of no more than 100 units of which 15% were to be affordable units. One of the Zoning Code requirements for independent senior living facilities is for a developer to provide no less than 10% of all units as affordable units in a development. The most recent approvals for the Lodge of Northbrook included a restrictive covenant that requires the development to allocate 5% of the total units as affordable units for low-income residents and 10% of the total units as affordable for moderate-income residents. The restrictive covenant sets out definitions for qualified occupants as well as definition for low-income units and moderate income units for the development (refer to a copy of the attached Affordable Unit Covenant for details). In the Lodge development these units are the smaller units within the development, which are sold at a lower price and have lower monthly charges than the other larger units in the development. The units have the same finishes as all of the other units in the building. Page 1 APPLICANT’S REQUEST To date the Applicant has complied with the requirements for Phase I of the development; however, it has been noted by both the Applicant and staff that the methodology for calculating affordable units in the restrictive covenant has practical challenges. Also, the Applicant has indicated challenges with complying with the affordable requirements in the future. Staff had been working with the Applicant on determining whether or not the original method for calculating and verifying affordability is still the best system, or if a new method should be utilized. Ultimately, the Applicant decided to request that the Affordable Unit Covenant be eliminated or amended. Earlier this year the Applicant provided staff with documentation depicting their compliance with the Affordable Unit Covenant for the Subject Property for 2013. During the review of these documents, the Applicant provided data showing recent downward trends in median home values and senior median household income (see chart on the next page). The restrictive covenant states that the senior median income figure for the area used in the calculations must be updated annually which thus requires an annual adjustment to the maximum monthly payment that can be charged for a qualifying affordable unit. Since the senior median income decreased, the formula results in a lower maximum monthly payment allowed for affordable units. This outcome was not envisioned. The Applicant has stated that the financial structure of the development cannot handle lower monthly fees. The fee structure for the development was established in such a manner that the expenses are distributed evenly amongst all of the residents in the development, which is owned and operated by a not-for-profit entity, not Essex. Given the current financial structure of the development, owners of non-affordable units would need to make up the difference for any decreases in monthly payments for the affordable units. As indicated in the attached material submitted by the Applicant, lowering these figures not only places a financial hardship on the Applicant due to the financial structure of the not for profit, but also on its other residents. It should be noted that in the materials submitted by the Applicant, the Applicant also requests changes to how the maximum entrance fee amount is determined for the affordable units. Upon further review with the Village Attorney, staff has determined that the Restrictive Covenant sets a base amount for the maximum entrance fee. The maximum entrance fee figure can never go lower and can only increase if the median value of single family homes in the area increases. In addition to requesting to amend the Affordable Unit Covenant as it relates to the monthly fee calculations, the Applicant is also asking that the Village consider amending the portion of the document which requires that an affordable unit be marketed to qualifying purchasers for three months prior to marketing to non-qualifying purchasers. The Applicant has stated that requiring affordable units to be marketed for three months to qualifying low/moderate income residents requires the current owner to continue to pay the monthly fees on the unit for those three months, while perhaps not even residing in the unit. Occasionally unit owners may need to relocate for unexpected reasons and the added financial burden of not being able to sell the unit in less than three months is a hardship to those owners. The Applicant is now requesting to amend the Affordable Unit Covenant for reasons outlined in detail in the information submitted by the Applicant. SUMMARY Staff suggests the Board consider the following policy questions while reviewing the preliminary request: 1. Is it still appropriate to maintain an Affordable Unit Covenant on the Subject Property? Page 2  2. If so, is it appropriate to amend the document to modify how monthly payments are determined for affordable units? The Applicant, Village Attorney and staff will attend the November 13, 2014 Planning & Zoning Committee meeting to present the information in the report and answer any questions that may arise. Page 3 Page 4  SOCIETY OF THE DIVINE WORD TECHNY LAND CORPORATION NFP 1985 Waukegan Road, P.O. Box 6038 - Techny, I1 60082 RESIDENTIAL MIXED-USE RETAIL COMMERCIAL OFFICE OPEN SPACE September 29,2014 Mr. Kent Braasch Essex Corporation 11606 Nicholas Street OmahaNE 68154 RE: TECHNY DEVELOPMENT PARCEL EC-2A Dear Kent, We received the The Lodge of Northbrook Affordable Covenant Proposal that was submitted to the Village of Northbrook. Techny Land Corporation NFP has been aware through you and others involved with The Lodge the difficulties you have faced with regard to the covenant as it is presently structured. Techny Land Corporation NFP supports any resolution you and the Village of Northbrook reach regarding this issue. Please feel free to contact me with any questions. Thank you. Yours Truly, 6u*yll^Sr3d'" Ginny Mulligan Executive Director Techny Land Corporation, NFP cc: Janet Johnson, Schiff Hardin LLP Narrative: Proposal regarding Affordable Covenant at The Lodge of Northbrook. The Lodge of Northbrook, a 501(c)(3), tax exempt, nonprofit corporation (the “Lodge”), engaged developer Essex Corporation (“Essex”) to develop and construct age restricted housing in the Village of Northbrook. During planning and zoning discussions, the Village included a requirement of an affordable housing component (the “Affordable Units”) as a prerequisite to approval of the planned senior development. The formalized requirements took the form of an agreement dated February 29, 2012 (the “Affordable Covenant”). In January of 2014, Essex, as managing agent for The Lodge, submitted the required report to the Village illustrating the Lodge’s compliance with the Affordable Covenant. Subsequent to the submission of the report, Essex remained in communication with the Village responding to requests for additional information from the Village regarding the required report. During these discussions, the Village and Essex began to discover that certain provisions of the Affordable Covenant may present significant, if not untenable, financial difficulties to the Lodge and its senior members living there. DIFFICULTIES STEMING FROM STRICT APPLICATION OF THE AFFORDABLE COVENANT TO THE LODGE Despite the good faith efforts of many from the Village, the Lodge and Essex, the Affordable Covenant, as written, contains certain provisions that may frustrate the intended purpose of providing for affordable housing for the aging residents of the Village. Unique Structure of the Lodge The Lodge is recognized by the Internal Revenue Service as exempt from federal income tax under 501(c)(3) of the Internal Revenue Code and further as a nonprofit corporation whose stated, tax-exempt purpose of providing housing for the elderly. This structure provides a charitable benefit 1. Entrance Fee: A member can only recover his Entrance Fee from a new qualified residential member. If an outgoing member occupies an Affordable Unit, and the Entrance Fee is reduced as a result in a recalculation based on a drop in median home value, that outgoing member will be forced to absorb the reduction in value of his Affordable Unit which could easily be several thousand dollars. This reduction of value is borne by the resident, not the nonprofit or even the developer. 2. Monthly Payments: If a drop in the Senior Median Income dictates a reduction of the maximum Monthly Payment, it would create a situation wherein those qualified affordable occupants would no longer pay their pro rata amount per square foot which would then increase the burden on all other members within the community inequitably in order to make up for the unforeseen loss of income. Further, if severe enough, a reduction in monthly income to the nonprofit community, if not sufficiently borne by the remainder of residential members could financially destabilize the Lodge putting it in danger of default under bond or loan requirements or bankruptcy. If the Senior Median Income continued to drop, which is likely, it would only exacerbate the liquidity crisis destabilizing the nonprofit and putting the homes of all members of the Lodge at risk. 1 Board of Trustees Narrative Lodge of Northbrook Affordable Housing Covenant  3. Required 3 month marketing. Since residential members are required to continue to pay the Monthly Payment until the membership is transferred to a new, qualified member, the requirement to make the Affordable Units available only to qualifying affordable occupants could result in a loss of several thousand dollars to that member if the transferring member is asked to turn away non- affordable occupants who may be ready to purchase the membership immediately in favor of waiting 90 days for a qualified affordable occupant who may never materialize. THE AFFORDABLE COVENANT: Its Hybrid Nature In an attempt to address the unique structure of the Lodge, the Affordable Covenant combined certain calculations that have been applied to affordable housing purchases and affordable housing rentals. Unfortunately, in application, these standards unfortunately impose an overly burdensome and unpredictable financial dynamic upon the nonprofit owner, the Lodge, and its residential members. These type of calculations are traditionally applied to housing that has received some form of financial support or incentive from local, state and/or federal bodies. In the case of the Lodge, it has not received, nor has it been offered, any financial or other benefit or subsidiary to support the required Affordable Units. EXAMPLE: THE HOMESTEAD AT MORTON GROVE The Homestead at Morton Grove is an 82 unit, age restricted, apartment community developed by Essex Corporation and owned by a for profit entity. Approximately 20% of the rental units at the Homestead are reserved for those age-qualified tenants who have annual incomes at or below 50% of the median income. This is only a slightly larger percentage of units than the Affordable Covenant requires at the Lodge, but the support available to the Homestead at Morton Grove to provide the affordable housing makes it feasible. Approximately half the total development cost of the Homestead at Morton Grove was a combination of HOME Funds, Section 1602 Grant funds, and Low Income Housing Tax Credits. The Homestead at Morton Grove is a beautiful project but does not compare to the Lodge of Northbrook in quality, community, location, finish or services. WHERE DO WE GO FROM HERE? Simply put, the Affordable Covenant as written and as applied to the Lodge needs substantial revision or revocation both for the security of the Lodge and its resident members and to help better achieve the affordable housing goals that the Village has set for itself. Without access to external funding or support, the nonprofit, and, more importantly, its resident members, does not have the ability, nor should they be required to, bear the financial burden of providing affordable housing particularly when the cost of providing that housing is entirely unpredictable and outside their control. The nonprofits’ entire financial model is built upon its ongoing financial security. PROPOSAL Ideally, the Lodge, as a 501(c)(3) public charity, provides a benefit to the seniors of Northbrook by providing beautiful, secure housing, and services Further, the affordable units are not distinguishable in size, style, location, finish OR cost from other units of identical floor plan, and considering the potential for severe financial burden on it and its residents, the Lodge should be relieved of its obligations under the Affordable Covenant. If 2 Board of Trustees Narrative Lodge of Northbrook Affordable Housing Covenant nullifying the Affordable Covenant entirely is not an option, we propose the following changes to the Affordable Covenant: 1. The maximum Entrance Fees will be determined based upon Median Value of Single Family Homes as established in the projected 2013 numbers from the 2008 Claritas report as originally approved. Beginning with the end of the first full fiscal year of the Lodge, Entrance Fees and will be allowed to increase. The Lodge’s Bylaws and Residency Agreement already limit Entrance Fee increases to no more than one ‘factor’ per year (see attached Exhibit). Monthly Charges may be increased in an amount determined by the Board of Directors which may be necessary to adequately meet the operational requirements of the nonprofit and which is limited by IRS requirement under the nonprofit’s 501(c)(3) determination to provide services to its senior members at the ‘lowest feasible cost’. 2. The affordability of Monthly Payments will be determined using the originally approved Senior Median Income in the projected 2013 numbers from the 2008 Claritas report as originally approved. Beginning with the end of the first fiscal year of the Lodge, Monthly Payments will be allowed to increase. The Lodge’s Bylaws and Residency Agreement currently state that Monthly Payments can only be in an amount necessary to meet the operational needs of the nonprofit corporation. Any increase in Monthly Payments would only be as much as is necessary to meet any increased operational costs of the nonprofit corporation. Monthly Payments could not be increased arbitrarily or as a response to demand or other market factors. The nonprofit corporation’s 1023 application it submitted to the IRS to obtain 501(c)(3) tax exempt status stated that the housing would be “affordable” for the seniors in the Northbrook, Illinois area and that the services provided as part of the Monthly Payment must be provided at the “lowest feasible cost”. The Monthly Payments will continue to be affordable as a function of built in limits within the Bylaws and Residency Agreement as well as a result of statements made to the IRS when obtaining 501(c)(3) tax exempt, public charity status. 3. For Phase II and Phase III, the Lodge will market the affordable units to qualifying affordable occupants for 3 months after those units are available for occupancy. In order to prevent any undue burden on a residential member occupying an affordable unit, there will be no requirement for a unit to be marketed for 3 months to qualifying low or moderate occupants once that unit has been initially occupied. However, the Lodge will maintain its own in-house affordable unit waiting list to which it will give priority preference prior to making the unit available to all others. If the Village maintains its own Village Preference List, it too will receive first right of refusal over any other prospective occupants. 4. The Lodge will develop and initiate an “Affordable Marketing Plan” wherein it will use target marketing to inform those Northbrook senior residents most likely to qualify as qualified low or moderate income residents. These modifications provide safe harbor for the nonprofit and its residents from the threatened financial instability resulting from financial loses, potentially severe, that may occur from strict application of the Affordable Covenant as written. These proposed modifications allow the affordable units to remain affordable by limiting increases to Entrance Fees by pre-determined amounts and monthly fee increases which can only be increased by an amount necessary to meet increased operational expenses to be spread pro rata, on a per square foot basis across all residents of the Lodge. 3 Board of Trustees Narrative Lodge of Northbrook Affordable Housing Covenant  The Lodge of Northbrook Affordable Designated Home Annual Entrance Fee Increase Limits FLOOR PLAN AMOUNT HICKORY ....................................................... $1,368 WHITE HICKORY.............................................. $1,418 SILVER HICKORY.............................................. $1,606 PLUM ............................................................ $1,799 GREEN ASH .................................................... $2,081 LAUREL ......................................................... $2,354 WHITE ALDER ................................................. $2,342 ALDER........................................................... $2,260 BUCKEYE........................................................ $2,498 The amounts shown above for each floor plan are the maximum amount that floor plan can be increased each year. Increases are not guaranteed but are voted on annually by the Board of Directors. If the Board of Directors declines to increase the value by the specified amounts it may, in subsequent years, increase floor plan values by the amount for the year the vote is taking place PLUS an equal amount for any year(s) prior that it declined to increase, if, in its sole discretion, it deems such increase(s) advisable. At no point will the dollar amount of increase in value exceed the above shown amounts multiplied by the number of full years the nonprofit has been operational. If the Senior Median Income or the Median Value of Single Family Homes in a 3 mile radius of the Lodge of Northbrook decline, the nonprofit owner of the Lodge of Northbrook, and its residents would bear an untenable financial burden. The examples below will help to illustrate this point. Original Maximums under the originally approved 2013 estimates from 2008 Claritas Report  Maximum Entrance Fee: $234,983  Maximum Monthly Payments o Low Income Affordable Units: $1,636.20/month o Moderate Income Affordable Units: $2,617.92/month New Maximums under 2013 estimates from July 2014 Claritas Report Increase/(Decrease)  Maximum Entrance Fee: $170,129 ($64,854)  Maximum Monthly Payments o Low Income Affordable Units: $1,356/month ($280) o Moderate Income Affordable Units: $2,170/month ($448) Example #1: Effect of Maximum Entrance Fee Decrease on Qualified Low Income Resident #117 Hickory Original Entrance Fee Paid: $195,000 Monthly Payment: $921 If Resident desired to transfer his/her membership, as a result of the reduction of the maximum entrance fee amount from when he/she originally purchased his membership, the maximum amount Resident could transfer his membership for is $170,129 (as shown above) Resident originally paid $195,000. The Affordable Covenant dictates his membership be devalued by $24,871 to meet its affordable standards. Resident, who purchased his membership as a qualified low income resident, would experience a personal loss of a MINIMUM of $24,871 on the transfer of his membership. Example #2: Effect of Maximum Entrance Fee Decrease on Qualified Moderate Income Resident #122 Buckeye Original Entrance Fee Paid: $178,114 Monthly Payment: $2,590 If Resident desired to transfer his membership, as a result of the reduction of the maximum entrance fee amount from when he/she originally purchased his membership, the maximum amount Resident could transfer his/her membership for is $170,129 (as shown above) Resident originally paid $178,114. The Affordable Covenant dictates his membership be devalued by $7,985 to meet its affordable standards. Resident, who purchased his membership as a qualified moderate income resident, would experience a personal loss of a MINIMUM of $7,985. Example #3: Effect of Monthly Payment Decrease to One Low Income Unit on Nonprofit Owner #114 Hickory Original Entrance Fee Paid: $84,782 Monthly Payment: $1,418 If Resident desired to transfer his membership, he could do so without realizing a personal loss as his/her original Entrance Fee of $84,782 still falls below the maximum amount of $170,129 under the 2014 Claritas report. However, the maximum monthly payment that he could be charged under the 2014 Claritas report is $1,356. Resident’s Monthly Payment would have to be reduced by at least $62 resulting in an annual loss of income to the nonprofit of $744 from just one unit. The reduction of the Monthly Payment and resulting loss of revenue would have to be recovered elsewhere. The Lodge cannot reduce its services to provide for this loss, it would have to increase the Monthly Payment of all other non‐affordable members. All Members of the Lodge agreed in their Residency Agreements that they would pay no more and no less than their equal share, based on square footage of their home, of the operational costs of the Lodge. This forced Monthly Payment reduction for qualified affordable residents and resulting increase to all others violates that agreement. This is only the example of one qualified low income unit, the burden becomes greater and the expense to be borne by the non‐affordable members increases greatly when more affordable units, low and moderate, would have their maximum Monthly Payment reduced. See the following example. Example #4: Effect of Monthly Payment Decrease to One Moderate Income Unit on Nonprofit Owner #329 White Alder Original Entrance Fee Paid: $161,090 Monthly Payment: $2,436 Similar to the Example #3 above, if Resident Member wished to transfer his/her membership, he would not experience a personal loss as the amount he/she originally paid falls beneath the new $170,129 maximum from the 2014 Claritas report. However, again, similar to Example #3 above, the new maximum Monthly Payment is $2,170. The Monthly Payment would have to be reduced by a minimum of $266.00 per month, resulting in an annual loss of income to the nonprofit owner of $3,192. Again, as in Example #3, this budget deficit would have to be recovered elsewhere, almost certainly by an increase to all other non‐affordable members. Under the numbers from the 2014 Claritas report, and only taking into account the 2 units provided in the example, the nonprofit owner would have an annual loss of revenue of $3,936. This loss will be borne by the other non‐affordable members and is a loss that will likely only increase as the senior median income continues to decrease.  Affordable Covenant Available Homes Comparison: Approved vs Current Claritas 2008 Report - 2013 Projected Numbers Claritas 2014 Report - 2013 Estimated Numbers LOW INCOME QUALFIYING HOMES = 6 plans LOW INCOME QUALFIYING HOMES = 0 plans Unit # Floor Plan Name Square Footage Entrance Fee Monthly Payment Unit # Floor Plan Name Square Footage Entrance Fee Monthly Payment 114 Hickory 716 $84,782 $1,418 114 Hickory 716 $84,782 $1,418 117 Hickory 716 $195,000 $921 117 Hickory 716 $195,000 $921 217 Hickory 716 $84,872 $1,418 217 Hickory 716 $84,872 $1,418 218 Hickory 716 $97,500 $1,418 218 Hickory 716 $97,500 $1,418 318 Hickory 716 $84,782 $1,418 317 Hickory 716 $84,782 $1,418 P101 White Hickory 741 $101,398 $1,474 P101 White Hickory 741 $101,398 $1,474 MODERATE INCOME QUALFIYING HOMES = 11 plans MODERATE INCOME QUALFIYING HOMES = 4 plans Unit # Floor Plan Name Square Footage Entrance Fee Monthly Payment Unit # Floor Plan Name Square Footage Entrance Fee Monthly Payment 109 Silver Hickory 747 $118,853 $1,606 109 Silver Hickory 747 $118,853 $1,606 P103 Plum 925 $125,344 $1,800 P103 Plum 925 $125,344 $1,800 111 Green Ash 968 $154,016 $2,081 111 Green Ash 968 $154,016 $2,081 311 Green Ash 968 $154,016 $2,081 311 Green Ash 968 $154,016 $2,081 209 Laurel 1095 $174,222 $2,354 209 Laurel 1095 $174,222 $2,354 329 White Alder 1158 $161,090 $2,436 329 White Alder 1158 $161,090 $2,436 104 Alder 1183 $140,080 $2,342 104 Alder 1183 $140,080 $2,342 304 Alder 1183 $140,080 $2,342 304 Alder 1183 $140,080 $2,342 115 Buckeye 1308 $178,114 $2,590 115 Buckeye 1308 $178,114 $2,590 122 Buckeye 1308 $178,114 $2,590 122 Buckeye 1308 $178,114 $2,590 227 Buckeye 1308 $178,114 $2,590 227 Buckeye 1308 $178,114 $2,590 NOTES: NOTES: Maximum Entrance Fee: $234,983 Maximum Entrance Fee: $170,129 Maximum Monthly Payment: $1,636.20 Maximum Monthly Payment: $1,356 Maximum Entrance Fee: $234,983 Maximum Entrance Fee: $170,129 Maximum Monthly Payment: $2,617.92 Maximum Monthly Payment: $2,170 THE LODGE OF NORTHBROOK 2220 FOUNDERS DRIVE AFFORDABLE HOUSING UNIT MARKETING PLAN September, 2014  MARKETING PLAN THE LODGE OF NORTHBROOK AFFORDABLE HOMES I. OWNER INFORMATION Owner Name The Lodge of Northbrook, Inc. Owner Address 2220 Founders Drive, Northbrook, IL 60062 Contact Person David Randle, Executive Director Telephone Number (847) 559-8700 Email Address drandle@essexcom.com Wed Address www.lodgeofnorthbrook.com II. BOARD OF DIRECTORS INFORMATION President Karen Gilbert Vice President Charles Bell Secretary Jenanne Rock Treasurer Mary Staackmann Director Al Levine Director Art Brantman III. DEVELOPMENT INFORMATION Development Name The Lodge of Northbrook Development Address 2220 Founders Drive, Northbrook, IL 60062 Total Number of Units constructed for EC-2A: 96. Total number of Affordable Units: 17 – breakdown shown below: Low Moderate 0 BR 1 BR 6 4 2 BR 7 3 BR 4 BR Total 6 11 Indicate the number and unit type of handicap accessible units: 4 Is the development targeted to an elderly population? Yes If yes, what is the minimum age of eligibility for occupancy in the development? 55  Please indicate the date on which the rehabilitated or newly constructed units will be available for occupancy? - Phase I open - Phase II open winter/spring 2015 - Phase III is to be determined. IV. PROPERTY MANAGEMENT COMPANY Firm Name Essex Corporation Firm Address 11606 Nicholas Street, Suite 100, Omaha, NE 68154 Contact Person Kent Braasch, President Telephone Number (402) 431-0500 ext 103 Email Address kbraasch@essexcom.com Web Address www.essexcommunities.com V. MARKETING PERSONNEL AND BACKGROUND INFORMATION Name of Developer/Marketing Agent Essex Corporation Contact Name and Address Lori Neubauer Contact Telephone (847) 772-9100 VI. DEFINITION OF THE MARKET Define the geographic area from which the majority of new tenants will be attracted. Please provide a map outlining primary market area. The Lodge of Northbrook Primary Market Area (PMA) includes an area of 3 square miles. (please see attachment “A” for the PMA map) Provide a demographic description of the tenants (e.g. income, age, etc.) living in the area described above who you intend to attract to this development for affordable housing needs. Median income of the PMA is $72,720 based upon the 2000 census, 2008 report using a projected 2013 Claritas report. This 55 years and above age group is the prime group of potential residents for the development site. The average age of current residents at The Lodge of Northbrook is 81.28 years old. (Please see attachment “B” for specific tables, income and household information) VII. MARKETING PROGRAM Indicate the means to be used in advertising the general availability of this housing as well as special outreach efforts. A. MAILING LIST Marketing Personnel shall purchase two databases: a low income household database (235 leads) and a moderate income database (170 leads). These lists are based on a 3 mile radius, age 65+, Incomes of $36,360 or less for low and less than $58,176 but not more than $36,360 for moderate prospects at the beginning of each calendar year. These databases are purchased through Priority Data in Omaha, NE. When a low or moderate unit becomes available for occupancy, marketing personnel will mail a letter to the purchased database to notify them of this opportunity. B. WAITING LIST Marketing personnel will maintain a separate waiting list for the affordable units at The Lodge of Northbrook. This waiting list fee will be fully refundable at a discounted rate of $50. If that person moves forward with occupancy, the $50 fee will be applied to the closing amount. When a low or moderate unit becomes available, marketing personnel will mail a letter to the waiting list persons to notify them of this opportunity. C. VILLAGE OF NORTHBROOK “VILLAGE PREFERENCE LIST” The Village of Northbrook per the Affordable Covenant maintains a list of persons from the Village in need of affordable senior housing. D. COMMUNITY CONTACTS If a community group/organization is to be used as part of the general or special outreach marketing efforts, it is expected that contact with the group/organization listed below will be established and maintained throughout the initial marketing campaign and subsequent marketing efforts. Provide the following information for each contact, if more space is needed, attach an additional sheet. 1. Name of Group/Organization 2. Street Address 3. City, State & Zip Code 4. Phone Number 5. Website Village of Northbrook Chamber of Commerce 2002 Walters Avenue Northbrook, IL 60062 (847) 498-5555 www.northbrookchamber.org Northshore Senior Center Arthur C. Nielsen Jr Campus  161 Northfield Road Northfield, IL 60093 (847) 784-6029 https://www.nssc.org If the development will be utilizing a model unit as a sales tool please indicate the number, unit type and date of availability below: Number of Models 1 Unity Type(s) Oak Address of Models 2220 Founders Drive, Northbrook, IL 60062 Date of Availability August 2013 The Management Company recommends that the marketing office be separate from the management office. This marketing office should provide a comfortable environment that does not expose prospective residents to the day- to-day operations of the development. It is also recommended that this marketing office include a separate room that can be utilized specifically for closing and qualifying prospective residents. Indicate the address of the marketing office and date of availability below: Address of Marketing Office 2220 Founders Drive #101, Northbrook, IL 60062 Date of Availability August 2013 VIII. QUALIFYING FUTURE RESIDENTS The Lodge of Northbrook will financially qualify future residents for the set aside low and moderate affordable home based on Proof of Adjusted Gross Income (line 37 on a 1040 individual tax return) from most recent filed tax return of less than $36,360 annually (for low income units) or $58,176 annually (for moderate income units). The Lodge of Northbrook will age qualify future residents for the set aside low and moderate affordable homes based on Proof of Age 55 or older from a copy of a state issued drivers license. IX. AFFORDABLE HOUSING UNIT PLANS The Lodge of Northbrook offers a total of 17 affordable qualified floor plans throughout the EC-2A development. 6 of those floor plans are designated for low income qualified applicant. Qualifying floor plans range in size from 716 square feet to 925. All floor plans are one bedroom. 11 of those floor plans are designated for moderate income qualified applicant. Floor plans range in size from 747 to 1,308 square feet with 1 or 2 bedrooms. (Please see attachment “C” for building plan)  ATTACHMENT A PRIMARY MARKET AREA (PMA) 3 miles around 2220 Founders Drive Northbrook IL 2 Map of 3 miles around 2220 Founders Drive Northbrook IL Basemap: Mapbox & OpenStreetMap  ATTACHMENT B DEFINITION OF THE MARKET Demographic Report The Lodge of Northbrook 3 Mile Ring 78.53 SQ/MI MEDIAN HOME VALUE 2013 Median Value Owner‐Occupied Housing $ 639,187 MEDIAN HOUSEHOLD INCOME 2013 Median Household Income $ 104,055 65+ MEDIAN HOUSEHOLD INCOME 2013 65+ Median Household Income $ 72,720 2013 QUALIFIED HOUSEHOLDS 2013 Age 65+ & $50,000+ 4,796 ATTACHMENT C BUILDING PLAN  AVAILABLE AFFORDABLE UNIT DESIGNATIONS EC-2A / THE LODGE OF NORTHBROOK LOW INCOME QUALFIYING HOMES = 6 plans Unit # Floor Plan Name Square Footage Entrance Fee Monthly Payment 114 Hickory 716 $84,782 $1,418 117 Hickory 716 $195,000 $921 217 Hickory 716 $84,872 $1,418 218 Hickory 716 $97,500 $1,418 318 Hickory 716 $84,782 $1,418 P101 White Hickory 741 $101,398 $1,474 MODERATE INCOME QUALFIYING HOMES = 11 plans Unit # Floor Plan Name Square Footage Entrance Fee Monthly Payment 109 Silver Hickory 747 $118,853 $1,606 P103 Plum 925 $125,344 $1,800 111 Green Ash 968 $154,016 $2,081 311 Green Ash 968 $154,016 $2,081 209 Laurel 1095 $174,222 $2,354 329 White Alder 1158 $161,090 $2,436 104 Alder 1183 $140,080 $2,342 304 Alder 1183 $140,080 $2,342 115 Buckeye 1308 $178,114 $2,590 122 Buckeye 1308 $178,114 $2,590 227 Buckeye 1308 $178,114 $2,590 NOTES: Maximum Entrance Fee: $234,983 Maximum Monthly Payment: $1,636.20 Maximum Entrance Fee: $234,983 Maximum Monthly Payment: $2,617.92  The Lodge Annual Affordable Unit Report Calendar Year Comparisons 2013 approved, 2013 current & 2014 estimate Please Provide the Following Information: NUMBER OF REQUIRED AFFORDABLE 2013 Estimate 2013 Estimate 2014 Estimate UNITS (generated (generated July (generated 2008) 2014) July 2014) *approved* *current* *current* Total Number of Units within Development 58 58 96 # of Required Low Income Affordable Units 3 3 5 – 5% of Total # of Required Moderate Income Affordable 6 6 10 Units – 10% of Total QUALIFYING HOUSEHOLD INCOMES Senior Median Income Median income of residents 65 and older located within a three-mile radius of The Lodge $72,720 $60,265 $57,694 property as determined by the most recently published reports by Claritas/Nielsen or another national provider of demographic information acceptable to the Village. (Attach documentation for this number.) Maximum Qualifying Low Income Occupants Household Income $36,360 $30,133 $28,847 – 50% of Senior Median Income Maximum Qualifying Moderate Income Occupants Household Income $58,176 $48,212 $46,155 - 80% of Senior Median Income MAXIMUM MONTHLY PAYMENT FOR OCCUPANCY & SERVICES Maximum Monthly Payment for Occupancy & Services – Low Income Affordable Units $1,636.20 $1,356 $1,298 (Qualifying Low Income Occupants Household Income divided by 12) Maximum Monthly Payment for Occupancy & Services – Moderate Income Affordable $2,617.92 $2,170 $2,077 Units (Qualifying Low Income Occupants Household Income divided by 12) MAXIMUM ONE TIME ENTRANCE FEE Median Value of Single Family Homes Median Value of Single Family Homes located within a three-mile radius of The Lodge $639,187 $459,809 $514,568 property for the year 2013, as determined by the most recently published reports by Claritas/Nielsen or another national provider of demographic information acceptable to the Village. (Attach documentation for this number) Maximum Entrance Fee 37% of the Median Value Single Family Homes $234,983 $170,129 $190,390 noted above