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development team committed to bringing these important projects to life. <br />Beam has been in direct contact with the owners of the adjacent properties and has determined that the acquisition of the Chevron gas station (parcel number 9) is unlikely, as relocating a gas station is challenging. Union Bank owns <br />parcel number four (4) and currently uses the site for customer parking for the bank (Union Bank parcel 4). Beam is working with Union Bank to purchase the 11,079 square foot parcel for $950,000, or $85.75 per square foot, <br />and has also offered Union Bank a branch site location on the corner of E. 14th and Davis Street of 4,000 sq. ft. for <br />lease or purchase as a retail condominium as an additional incentive to cooperate. If Union Bank elects to vacate and lease the site after Town Hall Square is constructed, the rent will be determined as the greater of fair market <br />value or $2.50/square foot per month. If Union Bank elects to vacate and purchase the retail condominium, Beam will sell the condo interest at the actual cost per square foot to construct the retail component. Final costs will be <br />determined on an open book basis between Beam and Union Bank. This purchase option significantly enhances the <br />economic incentive of Union Bank to cooperate in development of this important site. Our understanding is that this proposal is likely to be attractive to Union Bank. <br />PSK owns the office building located at 1145 E. 14th Street, which is listed as parcel 8 in the RFP. This parcel is <br />12,500 sq. ft. Beam has indicated that it would be interested in selling an equivalent size commercial space in the <br />newly developed space to PSK for a price of $2.4 - $2.5 million. This is based on a future income of $120,000 - $135,000 per year at a capitalization rate of 5.0% to 5.5%. Beam has also provided in writing to PSK Development <br />an initial non-binding intent to offer $1.5 million for this site with all cash offer without any appraisal contingency and a very quick close. This price implies land value of $120/sq. ft., which represents a significant premium to fair <br />value for the land, or $136/sq. ft. for the building that currently exists, as is, which is also a good price for PSK. <br />These efforts demonstrate Beam’s strong desire to develop this project. While PSK has initially responded that it would like to know more about Union Bank’s plans before it makes a decision, we are confident that we will be able <br />to structure an attractive, reasonable and yet aggressive offer for both parcels. We believe that Union Bank will be favorably inclined to work with us and this will make it attractive for PSK to also cooperate. In the event that PSK <br />does not elect to sell its building, Beam recommends that the City sell its parcels to Beam, contingent upon a fully <br />executed PSA with Union Bank and proceed with the development of the block, without the PSK site. We believe that this outcome is unlikely, but if this is the only option to develop this project, the project plan can be modified to still <br />provide a very attractive development as per City’s vision. <br />SUSTAINABLE DESIGN <br />Sustainable features are a key component in all of the Development Team’s projects. As an infill site that is close <br />to public transit, the location reinforces smart development with walkability, pedestrian and bicycle access to local services thereby reducing car trips and CO2 emissions. The architectural design promotes social interaction and <br />equity in the community along with outdoor gathering places. Being mindful of the environmental impact, this <br />project implements all building standards that meet and exceed 2016 California Green Building Standard Codes (CALGreen). <br />Landscape design with high efficiency irrigation systems utilizing drought tolerant materials will be employed <br />throughout the project. Water conserving plumbing fixtures, high efficiency lighting and appliances, along with <br />interior materials and finishes that promote a healthy interior living environment are an integral part of Beam’s standards. Engineered lumber, efficient framing and construction practices are incorporated throughout. Solar hot <br />water heating and photovoltaic systems will be considered and evaluated as an overall sustainable strategy for the building. <br />180