Reso 1996-062 - Laserfiche WebLink

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The Auto Dealer is privately assembling parcels along Marina Boulevard. In order to optimize the opportunity for a successful Auto Center, the Agency is conveying an additional 1.32 acres. A review of the land values paid by auto dealers indicates that dealers, in general, can support a land value in the range of $10 to $12 per sq.ft. Beyond that range, there is little evidence using comparable land sales that auto dealers can support higher land values. In essence, the value range is typically for cleared sites ready for development with no extraordinary site preparation costs, such as remediation or additional special assessments. Using the upper end of the stated range ($12), the value supported for the combined auto dealer site of 216,800 sq.ft., i.e. the privately assembled parcels (Private Assemblage ") and the Agency conveyed parcels ( "Agency Assemblage "), is estimated at $2,600,000. The cost for the Auto Dealer to acquire the Private Assemblage is estimated to be $2,410,000 plus an additional $30,000 for demolition of 1072 Marina Blvd. The total private cost is then $2,440,000. Therefore, to achieve an overal acquisition cost to the Auto Dealer of $12, the fair reuse value for the Agency Assemblage is $160,000, ($2,600,000 less $2,440,000). The fair reuse value is subject to the reuse conditions that are stated above. Should these reuse conditions change, then the reuse value is subject to revision. Pursuant to the terms and conditions of the DDA, it is projected that the Auto Dealer will pay the Agency $500,000 at the end of five years. The present value to the Agency of this . future payment five years from now is projected to be $340,000. Given that the present value of the Auto Dealer payment exceeds the reuse value,. the. Auto Dealer will be paying over $12 per sq.ft. to assemble the total combined site. Therefore, we conclude that the business agreement between the Agency and the Auto Dealer is a fair consideration. It also provides the incentive for Auto Dealer to pursue this project. X909610014-003 dx KEYSER MARSTON A S 3 CIATES INC.