you know, we have a huge, you know, apartment home here,
but all of these lots that I was just going through
that are the RSA 5 lots are all within, you know,
the size that we're talking about.
Proformas, which I'll have Mr. Bowmer come to talk about,
but again, we were in projections
We were in projections and we understood from the outset and going through community meetings that we were going to get pushed back because, you know, if you come in and say we can do seven homes, the community is going to want you to do less, thinking that we're coming in with a number higher than what was feasible.
and we understood from the outset and going through
But here we really did our homework, looked at what would five homes bring us in this neighborhood?
Is that feasible? Because five homes would be the buy right scenario.
And I'll have Doug talk through these. But basically, there's no money to be made at five homes.
You're looking at 3,600-square-foot homes on 1,500-square-foot lots that would need to outsell at 550, and still there would be a loss of money due to hard costs and cost of construction.
When you're looking at the six-home scenario, you're still at a negative 4% return, so still losing money, and that's based on 3,000-square-foot homes and a 1,250-square-foot lot size.
It's only, you know, do we get to about, you know, 8%, which is a reasonable return on investment on the seven-home scenario that we actually get a financially viable product.
And, again, this is, you know, based on over 1,000 square feet and 2,600 square foot homes that would outsell at $525.
So this is contextual with the neighborhood.
We are not, this is not a huge ask where we're trying to really, you know, pack a bunch of, you know, small homes.
And these are all going to be generous homes, three beds, three baths.
And, you know, I'll have Doug come on to it because I wanted to talk through these proformas so that you understand, you know, where we're coming from, from a financial standpoint.
because this really you know anything you know less than the seven home scenario just simply
isn't viable so I'd ask that Doug Beaumont be permitted to join. Excuse me Mr. Chairman. Yes.
We don't know if these construction costs are correct. We're not business people.
Right so I think where we need to be with this is that we
we have to listen to the testimony and then decide among ourselves whether that's reasonable or not
and that's where I think we're going
Mr. Bomar
Mr. Bomar
Hi could you state your name and spell for the court reporter
yes Doug Bomar B-O-M-A-R
Right. Do you swear for him to tell the truth, the whole truth and nothing but the truth?
Yes, I do. Mr. Beaumont, we've we've looked at the numbers when they're up there.
So we would appreciate if you get to the key points and go over that.
Don't don't give us the whole report because what we want is the key points.
OK, fine. I'll spare you the details. The bottom line is this.
I mean, when we looked at the site and we tried to determine what the appropriate thing to build here would be,
I mean, we looked around the neighborhood and decided that smaller houses were better than larger houses.
They were more contextual in size and also more contextual in market price as a result.
You know, based on our feedback from the RCO, we went to them with the seven homes that we're here presenting to you today.
Their feedback was, can we do five? Can we do six?
You know, five would be by right, but the numbers just don't work.
And the bottom line is because there's just sort of a hard cap on what houses will sell for in this area.
You know, we could build the houses that we're proposing are roughly twenty five, twenty six hundred square feet.
If we were to do five, it would be thirty six hundred square feet.
And though that's in the cost of building that larger house isn't recaptured on the market because the market price for something of that size is just you're just not going to be able to sell.
uh just because it's bigger for some some uh much bigger number it's you know slightly maybe
slightly higher on the market but but not much so the the seven house option just made sense both
in size and and in market size um we looked at six also the bottom line is we have a site that
that we're building that's we're going to be building the same square footage more or less
whether it's five six or seven houses uh and the fact is if we're only selling five houses
or six houses we just can't recapture the costs um doing it that way and it doesn't make any sense
doing it that way. And it doesn't make any sense.
Doug, can you just explain for the board,
how did you come up with the figures for the hard costs and your financing
costs and the design and soft costs? Where did you come up with those figures?
Well, this is just based on our, our experience and very recent experience.
When we're building similar houses,
actually houses with almost the exact same design right now and on another
of sight. And so I know what those costs are. So I just picked up those numbers and brought them
over here. Doug, how long have you been developing real estate? Nearly 20 years now. Okay. And do
you prepare proformas and projections as part of your due diligence to determine the viability of
a project? Yeah, more than I would like to admit. Okay. And with the proformas that are included
in the exhibit packet showing a five six and seven unit scheme are those uh documents that
you create in the ordinary course of business yes okay uh and can you also just talk to some
of the changes that were made uh in uh in in the design after discussions with the community
well one of the main things that we heard from the community is that they wanted um other than
the unit count which we could only uh do what we can do there again based on the economics but one
of the main things uh that we heard is that they wanted to see some a more active um culture street
facade and so because it initially it was some brick and some siding and um uh and not all not
a lot of windows so what we and then they talked about at one point putting the entrance on that
side and so um with our layout we couldn't get the front door on the culture street side but we
were able to add sort of the back door in there um we were able to redesign the facade to look
more really like a second front facade to sort of be activated on that street and then um also
at you know adding all those windows uh which you know at some expense and and all this is at some
expense but it's i think based on the feedback that we got i think it has um i think it has
improved project um that was the main i think design thing uh design excuse me excuse me
can i ask thomas one one minute so mr phillips mr bomar is part of the ownership team yeah so he
would not be your expert with this he's part of the ownership team uh correct he would be testifying
as to his knowledge of the development why thomas i like to ask what is the architectural
engineering fee for this project in your proposal
what is the i'm sorry what is the architect fee correct and engineering the the sum of all of our
design i'll call it roughly design costs is is but i think it's around 100 125 000 we have um
design architect we have our our local architect we have engineers we have other consultants um
you know in the design there i consider other other costs related to the zoning and um the
approval of the variance so you know we've been at this for 18 months so there's a lot of costs
that are involved anything planning wise applications for street trees of traffic studies
you know anything that goes into the design i would put into that category and i think i think
we've budgeted there um i'm looking here 125 000 another question does it change
does those costs change from five units to seven units um not not drastically i mean if we started
out with five units it may be slightly less i mean logan can speak to that but it may be slightly
less but at this point um it would be slightly more because we'd have to redesign everything but
the i mean but the fact is we wouldn't redesign everything because you know it just doesn't it's
just not a viable project uh with with less than seven uh units so that so there's no major change
new architecture and engineering from five units to seven units it would it again if we started
out that way maybe it's maybe it's a little bit less for less units but it's not a really it's
not a material enough cost to impact the bottom line here and again if we were to make the change
now it would actually be an increase because we would have to redesign everything
thank you thank you what's your what's your next you have another witness mr phillips
Yes, I'd like to call.
Actually, one other thing.
Doug, you've heard everything else that I testified to, notwithstanding your testimony.
So you've heard everything else that I testified to, notwithstanding, you know, your testimony on the pro formas and your communications with the neighborhood.
Is that correct? Yes. OK.
And do you agree that everything that I've stated is true and accurate to the best of your knowledge, information and belief?
Yes. And do you agree to adopt my testimony as your own? Yes.
Okay. I'd like to just briefly call Tyler Bradley from Boston Road to Realtors just to speak to the outsell figures that we've included.
We can do that. We'll just try to keep that short.
Yes, I was just wondering.
State your name, sir, please, and spell it.
Mr. Bradley?
What is the name of the individual again?
Tyler Bradley.
Mr. Bradley, if you're still present, please raise your virtual hand and wait to be sworn
Okay, sir.
Still allowed to speak.
Hi, Mr. Bradley, state your name and spell for the court reporter.
Tyler Bradley, T-Y-L-E-R-B-R-A-D-L-E-Y.
Do you swear for him to tell the truth, the whole truth, nothing but the truth?
Proceed.
Mr. Bradley, can you advise the board what your profession is?
uh real estate agent at berkshire hathaway home services fox and roach realtors with an office
in center city philadelphia as well as chestnut hill philadelphia okay how long have you been a
realtor september 2013 nine years okay and uh what sort of uh uh market do you focus on if any
I am a new construction specialist in Northwest Philadelphia, where I sell on average about 100 new construction houses per year.
Are you familiar with the area where these homes are proposed for?
Yes, I am.
And did you assist Mr. Bomar and the development team in coming up with outsell figures for these homes?
Yes, I did.
Can you please advise the board about whether there is a market for 3,600 square foot homes at this location?
I do not think that there's a market for 3,600 square foot attached townhouses in this location.
And why is that?
Based on the area and based on recent comparables, my own recent sales in West Germantown for new
construction, the average has been about 2,500 square feet of total living space, including
finished basements. And I have two recent sales at 228 and 230 West Haynes Street, H-A-I-N-E-S
Street, zip code 19144, with recent new construction sales at 525 and 539. I do not think that a 3,500
plus square foot attached townhouse is feasible in this urban location. And I think that the market
cap for outsale numbers in this location maximum would be in the $550,000 range. I think that the
best suited size house is about 2,500 square feet of total living space, which is what the proposed
seven attached townhouse development would be. I think there is great demand for that in an urban
location like this. I would like to say that the two buyers at 228 West Haynes Street is the new
head of the upper school, a Penn Charter school, which is obviously a local private school
in the area. So there is definitely need for the product, but no more than 2,500 square feet.
And would you characterize the projected outstail price on a 2,600 square foot home of
$525,000 as a fair and accurate estimate of what the outstail cost would be in this market?
So yes, I do. In the subject location, I think that $525,000 is a fair outsell number.
Okay. And it's fair to say that as the homes get bigger, the outsell numbers get higher?
Not necessarily. There isn't as much demand. This is not a suburban location. So I think in a suburban location, there's a big difference between a 2,500 and a 3,500 square foot house, but I don't think that it's feasible for an urban location like this for a 3,500 square foot attached townhouse. I think that there's very few buyers for that type of product.
Not necessarily. There isn't as much demand. This is not a suburban...
Thank you. I have no further questions for Mr. Bradley.
Mr. Phillips, he will eventually sell the houses. Is that what we're saying? He's not an expert witness, right? He's part of the team.
Correct, Tyler. Have you been engaged by Mr. Bomar?
I am engaged as his realtor. I would like to add that I do not have any financial. I'm not an equity partner. I have no financial stake, except I am simply a sales agent for the proposed project.
I understand that.
What I'm saying, he's not some expert witness who's not part of anything to do here, right?
He's going to wind up selling the properties.
I would offer Mr. Bradley an expert in the outsell market for Germantown for new construction
residential homes based upon his experience and testimony.
But the only thing, Thomas, I have it.
What I'm saying is he's part of it.
He's going to sell it, so we can't recognize him as an expert with this.
I mean, he's going to be part of the team.
That's what I'm saying.
You can say that he knows about the project and things like that, and I'm not saying that, but we can't recognize him as an expert with this.
Okay, I would just have a standing objection to that.
Okay, that's fine.
Thank you.
Yeah, Mr. Bradley does not have a financial interest right now, and he is knowledgeable in the area, and I don't believe he would.
But I thought he said he's going to be Mr. Beaumont's realtor, is what he said.
He's worked with Mr. Bomar as a realtor.
I think he said he's going to be the realtor here.
If there are homes to sell, yes, I guess he would be.
Okay, all right, good, good.
All right, thank you.
Do you have anybody else?
Logan Drive is available if the board has any questions from an architectural standpoint.
So your testimony has been adopted already.
So why don't I open up?
Questions from the board?
Yes, Mr. Chairman.
go ahead thomas i like to ask council do you have any idea why city planning increased the
script for this requirement to 1440 so uh the art in the rsa 5 district uh for the entire city uh
it used to be 1440 square feet was the was the requirement um the code was was changed last year
to require uh to now only require 960 square feet however uh there were a number of councilmanic
districts um that uh included overlays for exceptions to retain the 1440 square foot
um lot size i believe the planning commission's original proposal was 960 square feet for the
entire um city but again there were certain councilmanic districts where the 1440 was
preserved it's our position that that's not contextual here and that what's on the ground
is actually more reflective of what we are proposing in the 1100 square foot lot size range
so this community supported 1440 square feet collect yes the code is at 14 uh the code requires
1440 uh due to the overlay thank you um any other questions from the board no mr chairman
questions from the virtual audience if possible i'd like to take
the coordinating rco is there a spokesman from the coordinating rco first the faith
community development group corporation
Okay, Mr. Chair, I have two people with their hands raised, Mr. James Attay and Mr. Charles Richardson.
Let me take Mr. Richardson first.
Okay, understood.
Mr. Richardson's been about to speak.
Aye, Mr. Richardson, could you state your name and spell for the court reporter, please?
Good afternoon, Mr. Chair.