HTML Preview Program Development Budget page number 1.
The attached development budget template is intended to
encourage organizations to think through all the expenses
associated with a real estate development project—from
acquiring a building or vacant land through renovation
or new construction of a facility—and to estimate all the
costs associated with their project. With a comprehensive
understanding of all the costs of a development project,
your organization can determine the true feasibility and
affordability of the project. Adjustments can be made to the
project scope to bring the budget in line with your organiza-
tion’s means. A development budget is an
ever-changing document until you have final bids from a
contractor. It is critical to continuously update the budget as
estimates become actual costs and to balance the total proj-
ect costs with the total funds you have available
to complete the project. The tendency is for all parties to
low-ball estimates. Always, always include a contingency
(see definition below)!
Explanation of Development Budget Line Item Terms
(Refer to the attached spreadsheet—we can email a
spreadsheet to you upon request.)
A: Acquisition
Building/Land
Enter the acquisition price of the land or building.
Building Inspections
Enter an estimate of the total costs of your due diligence
inspections. It is recommended that the following
inspections be conducted to determine the condition and
potential cost to repair the following items before you make
an offer to purchase a building:
l Electrical
l Plumbing
l Mechanical
l Roofing
l Structural
B: Construction (also known as Hard Costs)
Renovation Costs
Enter the cost per square foot for renovating an
existing building as estimated by an architect, project man-
ager, estimator or general contractor.
New Construction Costs
Enter the cost per square foot for new construction
of a building as estimated by an architect, engineer or gen-
eral contractor.
Construction Contingency
This is a set-aside for cost overruns. No project is ever
designed perfectly—there will always be unforeseen
conditions or mistakes in your drawings that will require
a construction “change order”. A contingency budgets
for these unknown additions to your project. Fifteen
percent of the construction budget is recommended as the
amount of contingency for renovation projects. Ten
percent of the construction costs is recommend as the
amount of contingency for new construction projects.
Environmental Clean-up
If a Phase 2 (see definition below under Section C )
environmental report indicates the need for environmental
remediation of your building or land, enter the estimate
from your environmental consultant or contractor.
Permit Fees, Tap Fees, Utility Charges
Contact your local building department and utility
companies to inquire about these charges.
Some municipalities waive permit fees for nonprofits.
Illinois Facilities Fund Worksheet Number 8
page 1 of 4
Creating a Project
Development Budget
This worksheet is designed to help organizations estimate
the total costs of their real estate project. The worksheet
provides a step-by-step guide to creating a budget—a
blank budget template is attached, which the IFF can email
to you as a Microsoft Excel document with formulas.