Reso 2004-081 - Laserfiche WebLink

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33433 Report Page 4 of 5 1040 Davis Street DDA May 2004 within the PCE (tetrachloroethene) groundwater contamination plume that originates from the former Caterpillar facility at 800 Davis Street, which could trigger additional. remediation to residential standards. The plume's location presents no obstacles to commercial development. A small office development, less than 10,000 square feet (SF) of leaseable area, is the most feasible development given the size and shape of the Property, and the proposal received from 1040 Davis Partnership confirmed the viability of office use (9,500 SF as proposed) on the site. The estimated value of the interest to be conveyed for this office project is $181,500. Large, vacant or easily developable parcels of land, particularly those suited for housing, in San Leandro are selling for more compensation, but this property has a number of conditions and requirements, as described below, associated with its development for office use that render a discount appropriate. Another factor affecting value is the current economic climate in which a prospective developer assumes risk by speculatively constructing any amount of office space. In this project, the speculative amount is 4,500 square feet of leaseable area. The balance will be owner-occupied. Based on experiences elsewhere in San Leandro, Agency staff estimates this amount will need one to two years for absorption, but after that time will fill a needed niche for small professional offices in the community. A discount on the land price is appropriate for this risk and absorption rate. Existing Building and Development Issues The existing building's value is negligible to negative, based on: requirement to remove contents of building (obsolete office and residential fixtures discarded by the Alameda County Fire Department, the former tenant), visual evidence of unreinforced masonry in the former garage area, requiring further testing and analysis which the Agency has not allocated funds to undertake, and lack of building records of its condition, due to its age and history as occupied primarily by another public agency. The Agency has specified that the building will be sold in "as-is" condition, to which the prospective buyer has agreed; however, there may be costs associated with that which are not possible to estimate at this time. Further restrictions the Agency will place on the property, restricting its development flexibility and therefore its value, include: • Agency approval of tenants; • prohibition of subdivision; • payment of prevailing wage; • Agency approval of changes in identity of developer; • design review by Agency. The City has also imposed development requirements limiting the value of the property, such as requiring the developer to perform offsite median construction on Davis Street; the City's other mandates include prohibiting driveway access on Dabner (limiting vehicular access to the Property), the aforementioned height limit, removing the emergency access gate to the adjacent apartments and replacing it with a masonry wall, and adding side yard landscaping, affecting the parking field on the east side and building envelope on the west/north side. The City fees for this