RDA Reso 2000-025 - Laserfiche WebLink

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• V. VALUATION The purpose of this analysis is to establish the reuse value of the Site being conveyed to the Developer, Creekside Associates, LLC. The fair reuse value is the fair market value for a developable site subject to the specific terms and conditions of the Amended and Restated Disposition and Development Agreement ( "DDA ") that control the reuse of the Site. Pursuant to the DDA, the Developer is required to use the Site in San Leandro for the construction of three 3- and 4 -story Class A office buildings with high quality site amenities, parking deck and a creekwalk along the adjacent San Leandro Creek (on the `Adjacent Site "). The valuation of real estate is derived principally through three approaches to market value: the cost approach, the market data comparison approach, and the income approach. From the indication of these separate analyses and the weight accorded each, an opinion of value is reached, based on the quantity and quality of the factual data considered tempered by the judgment and experience of the analyst who is utilizing commonly accepted methods and techniques within the framework of the valuation process. The cost approach is not applicable due to the fact that this valuation is for the valuation of an undeveloped piece of land. The market data comparison approach to value is based upon the principle of substitution; that is, when a property is replaceable in the market, its value tends to be set at the cost of acquiring an equally desirable substitute property, assuming no costly delay in making the substitution. The typical valuation technique used to estimate values through substitution involves the collection and analysis of sales and listings on various sites having as many similar characteristics as possible as the site being valued. However, the usefulness of the market data comparison approach is restricted inasmuch as the subject site is being sold for a very specific development and not land speculation. Recent land sales for commercially zoned property can be found throughout the area. However, there are limited land sales of sites in San Leandro on which an approximately 200,000 sq.ft. S- and 4 -story, Class A office complex can occur. Furthermore, in order to use land sales for freestanding office and commercial buildings as a value indicator for the Site, substantial judgment adjustments must be made to reflect the economic impacts of the specific reuse conditions incorporated into the proposed Project. The DDA requires that the Developer construct a specific Project in a single phase as described in the project description. Given the very specific Project and consequently the lack of truly comparable sales and the numerous adjustments that would have to be made to recent sales, primary reliance in establishing the reuse value has been placed on the use of the income approach to value. 2%8 Keyser Marston Associates. Inc. 19096.0261002- 001.doc Page 10