RDA Reso 2000-025 - Laserfiche WebLink

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The income approach is based upon the income and cost characteristics of the Project. For the purpose of determining the reuse value of the land, the residual value can be defined as the difference between the development cost of the Project, excluding land, and the value of the Project (total amount the developer can reasonably afford to invest). The amount the developer • can reasonably afford to invest is based upon the projected net operating income revenue generated by the Project and the value of the Project at completion. The economics of the proposed Project must be determined on the basis of the costs and revenues generated by the Project. This section of the report presents the estimates of the development costs and revenues and the assumptions made to determine these estimates. A. Development Costs Development cost estimates are based on information provided by the Developer, Creekside Associates, LLC. KivLA has not conducted an independent evaluation of the direct construction costs for the shell, tenant improvements and site work and KMMA recommends that a signed construction contract be submitted to the Agency prior to close of escrow. The Developer represents that the construction cost budget reflects the costs to meet the high quality design requirements. Table 1 presents the estimated direct and indirect development costs for the Project. These components are to be financed and owned by the Developer. As shown in Table 1, the total • development costs, before land, are estimated at 527,845,800, or S137 per square foot of rentable building area. The major assumptions behind the development cost estimate are as follows: • The shell cost, exclusive of tenant improvements, is estimated to average S60 per sq. ft. of gross building area. • In addition, the Developer will incur tenant improvement costs for the 194,000 sq.ft. of net rentable office space in the three buildings and must build out a 2,700 sq. ft. restaurant on the ground floor of Building B. Tenant improvements for the office space are estimated at 530 per sq.ft. and 3166,000 for the restaurant space. • An estimated cost of 51,100,000 to build the 39,000 sq.ft. parking deck. • • The Developer's direct construction costs also include all on -site and off -site costs, including site landscaping, the fountain/plaza and creekwalk, traffic signal and site preparation contingency allowance. Total on -site and off -site costs are estimated at S2,000,000. The Developer is obligated to construct high quality site amenities, including a prominent landscape feature at the corner of San Leandro Boulevard and Davis Street, and extensive surface parking lot landscaping on the Site. 0 g1 Keyser Marston Associates, Inc. 19096.0261002- 001.doc Page 11