Thomas-Henry questions per-unit city capital cost and resale equity stipulations
Thomas-Henry asks about the actual per-unit cost; Adler reports approximately $800,000 per unit in city capital, similar to the 171st Street cluster. Thomas-Henry then asks about resale stipulations; Adler and Tompkins explain the flip tax structure, with insider flip tax starting at 90-95% and decreasing to 10%, while new purchasers face a flat 10% flip tax.
And I noticed you said HPD City Capital makes up the bulk of the project source at roughly $500,000 to $700,000.
Have you actually penciled out what the actual cost would be per unit?
Because of, so we're currently working on reconciliation with it, and we are going through a certain internal process with HPD's, basically the wing of HPD that does
the construction and the monitoring and cost and design review to make sure that these numbers are clean.
Because of the...
Unusually large number of insider units in this project.
Usually it's much lower, so you can sell vacant units for more and make up a bulk of that money.
The city capital money on this project is around $800,000.
That is similar to the...
Total?
Yeah.
For the entire project?
$800,000 per unit.
Per unit.
Oh, okay.
That is similar to the 171st Street cluster.
Is that the name of Shams Project?
That recently came through City Council.
And then my last question is for you to show the equity.
Are there any stipulations for either the existing tenants or the new tenants that come in when and how they can sell?
Yes, that goes into our regulatory agreement under the.
We'll be back.
We basically call it a flip tax to ensure that basically the longer that you stay in the unit, the more profit you can take when you resell it.
If we can go back a few slides until we get to that.
I can just tell you when to stop.
Yep, there we go.
Oh, one more forward.
There we go.
So this is the basic outline of what that looks like.
But they can sell it anytime.
It's just the amount of time increases the profits they would realize and the equity they would realize from resale.
Got it.
And it would be the same for both the existing tenants that are moving back and the new tenants?
Correct.
No.
Sorry, no.
The flip tax for new purchasers is 10% in perpetuity.
The flip tax for insider tenants who become homeowners starts at, I think, 90%.
Is that what it is?
Or 95% and then slowly decreases until it reaches that 10%.
Gotcha.
Thank you.