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Real Estate Development Loan Fund

April 27, 2017


Mission
NewTown Macons mission is to
invest, attract and leverage self-
sustaining transformation.

Place Residents Jobs


Downtown Revitalization

SENSE OF PLACE
Downtown Revitalization

INCREASING RESIDENTS
NewTowns Idea
250
Use market demand to
200 revitalize downtown by
developing spaces for new
Supply Vs. Demand

150 high-demand uses


100
Demand Supply
50

0
2011
Millennials
Demographics
Between 2010 and 2030 4 of 5 new households will
be for households without children

NEW URBANITY: THE RISE OF A NEW AMERICA, By ARTHUR C. NELSON, The Annals of The American Academy of Political and Social Science November, 2009
626 Annals 192
Millennials
In the last U.S. census, almost two-thirds
(64%) of college-educated 25- to 34-year-olds
said they looked for a job after they chose the
city where they wanted to live.
Increasing Residents
New Loft Finder database launched at
newtownmacon.com
Over 95% occupancy
NewTown loans money to develop real estate
Rates for new units up to $1.50/sf/mo average
For sale units double the average value of Macon-
Bibb at $140+/sf
Challenge remains building enough supply to
meet demand
Potential

Worth $600,000 Worth $8.5


million
Potential

+ $110 Million
Potential
Each to add
square foot$110,000,000 in space
of rehabilitated additional
taxable value
increases to Macon-Bibb
in value by $110 tax rolls

Demand Average Size Potential

+ $16,700,000
1,000
Units
1,000 1 Million
x

New Annual Property


SF Tax Revenue
=

SF
Value & Appreciation
Unique Benefits Downtown
Millennials and retiring Baby Boomers want to be
downtown, driving large demand for lofts
Largest portion of workforce is picking a place to
live, then finding jobs, making downtown an
economic imperative
Increases in property tax value are exponentially
more than outside downtown
NewTown raises private funds to run program
Loft Demand vs. Supply
220

165
Close the gap
Units per year

110

55

0
2011 2012 2013 2014 2015
Loft Demand vs. Supply
220

165
Units per year

110
What happened here?

55

0
2011 2012 2013 2014 2015
Real Estate Loan Fund
State Bank purchased $6.4 million in bonds fron
NewTown backed by Macon-Bibb County
Bonds are re-loaned to loft developers as gap
financing
Mandated structure is minimum 10% developers
equity, 40% loan from NewTown, 50% loan from
traditional lender
Disadvantaged developers can borrow 100%
Notice must be given to county for variations
Open Application

newtownmacon.com/
loans
Application Process
Guidelines are posted on our website
Applications are accepted year-round, either print
and mail or apply online
Applications are received by staff and prepared for
loan review committee
Loan Review Committee recommends term sheets
to the Board of Directors
Board of Directors makes loan commitments
Loans are closed after Board approval
Loan Review Committee
Certified Public Accountant (CPA)
Banker
Attorney
Architect
Real Estate Developer
Typical Terms
Every real estate deal is unique, especially
rehabilitation projects
Bond fund allows flexibility in terms to maximize
security of each deal
Typically 6.55% interest only first year, and then
amortized over 15 years at the same rate
Typically second mortgage with minimum 90% loan
to value and 1.1 debt coverage ratio
Personal guaranties often required
377 Cotton Ave.
Owner Tony Widner
Completed
Loan Amount $60,000 7/29/08
Total Project $600,000
Costs Bond %
Lofts 6 8%
Storefronts 1
Value
Increased Value $435,000
$850,000
Repayment Interest only, current
401 Cherry St.
Owner Jim Daws
Completed
Loan Amount $470,000 8/6/14
Total Project $3,050,000
Costs Bond %
Lofts 21 13%
Storefronts 2
Value
Increased Value $2,700,000
$3,500,000
Repayment Interest Only, Current
566 Poplar St.
Owner Fred Geheber
Completed
Loan Amount $393,500 6/6/14
Total Project $1,100,000
Costs Bond %
Lofts 12 15%
Storefronts 0
Value
Increased Value $800,000
$1,200,000
Repayment Interest Only, Current
476 Third St.
Owner Gene and Susan Dunwody
Completed
Loan Amount $1,969,940 12/30/14
Total Project $7,500,000
Costs Bond %
Lofts 64 23%
Storefronts 3
Value
Increased Value $7,800,000
$8,500,000
Repayment Interest Only, Current
552 Cherry St.
Owner Connie Broun and Russ Crump
Completed
Loan Amount $800,000 8/17/15
Total Project $7,250,000
Costs
Bond %
Lofts 38 11%
Storefronts 2
Value
Increased Value $7,150,000 $7,300,000
Repayment Accruing & deferred, Complying
555 Poplar St.
Owner NewTown Macon
Completed
Loan Amount $500,000 5/1/16
Total Project $1,750,000
Costs Bond %
Lofts 12 29%
Storefronts 2
Value
Increased Value $1,600,000
$1,750,000
Repayment Accruing & deferred, Complying
Silvers Lofts
Owner Scott and David Thompson
Completed
Loan Amount $500,000 2/1/16
Total Project $3,800,000
Costs Bond %
Lofts 28 13%
Storefronts 1
Value
Increased Value $3,750,000
$4,650,000
Repayment Principal and interest, current
B&D Lofts
Owner Dorothy Ridley
Completed
Loan Amount $55,000 n/a
Total Project $545,000
Costs Bond %
Lofts 2 10%
Storefronts 1
Value
Increased Value $350,000
$450,000
Repayment Construction period, current
Jeneanes Lofts
Owner David Thompson
Completed
Loan Amount $212,000 n/a
Total Project $540,000
Costs Bond %
Lofts 3 38%
Storefronts 1
Value
Increased Value $377,000
$532,000
Repayment Construction period, current
Spearman Lofts
Owner NewTown Macon
Completed
Loan Amount $250,000 n/a
Total Project $2,420,000
Costs Bond %
Lofts 12 10%
Storefronts 2
Value
Increased Value $2,070,000
$1,825,000
Repayment Construction period, current
Georgia Market Lofts
Owner Miller Heath
Completed
Loan Amount $150,000 n/a
Total Project $1,474,172
Costs Bond %
Lofts 8 12%
Storefronts 2
Value
Increased Value $1,000,000
$1,230,000
Repayment Construction period, current
Repayments
1. Cash flow from rents

2. Foreclose and resell real


estate

3. Liquidate personal or
business assets

4. Personal cash flow from


other sources
Annual Income- $212,000

$1,000
- Operating expenses- $55,000

$1,000
$1,000
- Bank loan- $75,000
$1,000 - NewTown Loan- $30,000
$1,000
$1,000

Rents from renovated


property pay NewTown
and NewTown

$1,000
$1,000 pays the bondholders.
$1,000
$1,000
$1,000
$1,000

$3,000
3,000
Resale of Real Estate

Lender Developer
1. NewTown Forecloses
on Real Estate
2. NewTown Sells Real
Estate to new Investor
3. NewTown Pays off
Bondholders with
income from sale of
building
Guaranties
Real Estate Loan Fund
Bank Loan Equity Bond

50% 10% 40%


Project costs
Loans that adhere to these percentages do not
require county commission approval
Expectation
Loans Made

$5.9 million

Total Project Value

$14.75 million
Actual Averages

Bank Loan Equity Bond

46% 20% 34%


Project costs
Loans & Value
Loans Made $6.1 million

Total Project Value$32.5 million


Loan Security
Total Loan Amounts $4,114,147
Net Equity in Buildings $7,485,197
Guaranties $59,839,426
NewTowns Net Assets $10,866,592

55%
Loan to Value Ratio
Economic Development
Previous Value $3,094,468
Current Value $36,559,787
Increased Value $33,465,319

$358,180
Increased Property Tax Revenue
Portfolio Summary
All loans are current, repaying on terms
NewTown is current on all obligations to
bondholders
All loan are priced above the cost of the bonds
Projects rent and re-rent quickly
Projects under construction are on budget
Loans are being repaid to match the terms of
repayment on the bond funds
Downtown Revitalization

GROWING JOBS
Loft Resident Spending
Residents of each new
loft spend an average
of $15,000 on retail
storefront services

=
Revitalized Space

321,874 sf
of vacant
space

95%
202 loft apartments
& 49 commercial

Occupied
Godsey Initiatives Fund
NewTown now uses Real Estate Loan Fund to
finance owner-occupied businesses
Godsey Fund is an alternative for businesses that
dont own real estate to obtain financing
Allows NewTown to finance businesses AND/OR
real estate
Launched by NewTowns founding chair, Dr. R.
Kirby Godsey with all private donations
Cost is usually around 10% interest, 5 year terms
Apply for a loan for your business or real estate
development at www.newtownmacon.com/loans
Josh Rogers
josh@newtownmacon.com
Future of the Loan Fund

Demand= 1,100 additional units over five years


$30,406
Average allocation 75% Bond
of $30,406 funded
in bond funds per=loft
825 units
constructed

25
%
75%
75
% $25 million
In Additional Lending Potential
70% of all lofts constructed in the past five years have been financed by NewTown
Board of Directors
William D. Underwood Jean Bragg Robert Reichert
Chair of the Board of Directors Connie Broun Larry Schlesinger
Juanita T. Jordan Daryl Brown Scott Seigel
Vice Chair Jim Daws Brother Stewart
Dan Forrester Mike Dyer Joey Stuckey
Treasurer Don Faulk David Thompson
Tony Rojas Carl Garofalo Johnny Walker, III
Secretary Bob Hatcher Martin Wilson
Blake Lisenby Corrie Holton Michael Wright
Of Counsel Bill Kilburg
Chris R. Sheridan David Lanier
Chair of the Ocmulgee Heritage Trail Jim Manley
Dan Speight Emily Myers
Campaign Chair Bryan Nichols
Thomas Wicker June Parker
Past Chair Frank Patterson
Rhonda Perry