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Estimated Value at Highest and Best Use <br />The property was appraised in February 1999. The appraisal determined that the property's highest and best <br />use would be realized if the existing improvements were demolished and replaced with either conventional <br />apartments or a senior housing complex. The appraisal established the site's fair market value at $1 million. <br />KMA concurs with this assessment that the site's value at its highest and best use is $1 million. <br />V. CONSIDERATION RECEIVED AND REASONS THEREFOR <br />Under the terms of the DDA, the Developer will purchase the site from the Agency fora $1 million <br />promissory note. The note will carry a 3% interest rate and a55 year term. Payments will be deferred for 55 <br />years and will be forgiven provided that the project remains incompliance with the terms of the DDA. The <br />net present value of the purchase payments is estimated at $0, which is consistent with the site's fair reuse <br />value given the very low income restrictions that will be placed on the property and the project's high quality <br />and accompanying construction costs. <br />The net present value of the purchase payments is less than the site's fair market value due to the income <br />restrictions that will be placed on the property, which greatly reduce the market value of the Project, and the <br />Project's high quality materials and design. Under the terms of the DDA, 100% of the Project's units will be <br />restricted to very low income senior households for a period of SSyears. <br />VI. ELIlVIINATION OF BLIGHT <br />The completion of the proposed 60-unit affordable senior housing complex will accomplish a number of <br />the Agency's objectives for the Redevelopment Project Area: <br />^ The Project will remove the obsolete and vacant automobile showroom that is currently <br />located on the site and represents a blighting influence on the neighborhood; <br />^ 'The Project will help address the City's need for very low income senior housing; <br />^ The Project will reinforce the positive impacts that the Carlton Plaza senior assisted <br />living project has had on the area south of the Project; <br />^ The Project will add 60 deed-restricted housing units to the Project Area and help the <br />Agency meet its affordable housing production requirements; and <br />^ The Project will encourage additional new investment in the neighborhood. <br />001-001.doc Keyser Marston Associates, Inc. <br />19096.023 Page 8 <br />