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II. NATURE OF THE ASSIGNMENT <br /> A. Purpose of the Valuation <br /> The purpose of this reuse valuation is to estimate the fair reuse value for the Site being conveyed <br /> to the Developer, Creekside Associates, LLC, based upon the covenants and the conditions <br /> included in the Amended and Restated Disposition Development Agreement ( "DDA "). <br /> The DDA restrictions and guidelines affect the characteristics of the physical development and <br /> other features and impose certain requirements relating to how the project will be developed, to <br /> the operation of the project and to the transferability of the Developer's interest. The covenants <br /> and conditions strongly affect the development economics of the Project and hence the value of <br /> the interest to be conveyed to the Developer, as described in this report. <br /> The reuse value specifically requires compliance with the limiting conditions and assumptions of <br /> this report as stated in Section VI. <br /> B. Definition of Value <br /> Fair reuse value is the fair market value in accordance with covenants, conditions, and easements <br /> governing the sale of the Site as contained in the DDA. It is the highest price in dollar terms <br /> which the Site would be expected to bring for the specified purpose in a competitive and open <br /> market under the reuse conditions established by the Agency, with the buyer (Redevelopment <br /> Agency, Developer) and seller (private owners, Redevelopment Agency) each acting prudently <br /> and knowledgeably, assuming the price is not affected by undue stimulus. Also essential to an <br /> estimate of a fair market value is the notion that the conveyance of the Site will result in near -term <br /> development, not speculation. <br /> Implicit in this definition is the consummation of a sale as of a specified date under conditions <br /> whereby: <br /> 1. Both parties are well informed and well advised, and are each acting prudently in <br /> what it considers its own best interest. <br /> 2. Financing, if any, is on terms generally available to this Developer for the use <br /> proposed at the date the property is ready for construction. The reuse value <br /> represents a normal consideration for the property sold, unaffected by special <br /> financing amounts and/or terms, services, fees, costs, or credits incurred in the <br /> financing transaction. <br /> 28a <br /> Keyser Marston Associates, Inc. <br /> 19096.0261002.001.doc Page a <br />