How do you Detemining the cost basis of property (real estate) purchased and rehabbed while getting a developer fee?

We have received grant funds to purchase and rehab real estate (condos or single family homes) to rent out to qualifying individuals.  Part of the proceeds received include a "developer fee" in the project budget to do this work, besides other externanl vendors.   Is this developer fee used as part of my cost basis for the property and/or included as revenue from the project?  or should the revenue be an offset to the "salary expense" (which should be a part of the cost basis) for the workers to perfrom this development?  Any suggestions would be greatly appreciated.