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Total Acquisition or Assemblage Costs to Agency (Less $800,000 Credit to Auto Dealer) = Net Payment (Balloon payment) by Auto Dealer to Agency, Year 5 The acquisition loan will require no money down and payment is due in five years. If the Auto Dealer meets the obligations under the DDA, the 6 % interest rate is waived and the payment to the Agency will be reduced by an $800,000 credit. If the obligations of the DDA are not met by the Auto Dealer, the dealer will owe the Agency $1.3 million plus 6 % per year. Essentially, the Agency is subsidizing the first $800,000 in costs for the Auto Dealer by providing this offset to the purchase price. Below is a detailed summary of the Agency's assemblage costs and the financing of the land sale. 1. Agency Assemblage - Purchase of Land It is our understanding that the Agency plans to purchase and assemble three parcels (the "Agency Assemblage"), comprising two land assemblages, at 1066-1072 Marina Boulevard and 1152 Marina Boulevard. According to the documents, the Agency purchased 1066-1072 Marina Boulevard from its current owners for $450,000 (price set at a bankruptcy auction and approved by bankruptcy court, Agency had to top another bid for the property). Also, the Agency deposited an additional. $50,000 into an escrow account to fund environmental remediation. The Agency also plans to purchase 1152 Marina Boulevard. The price- for this property is under negotiation. The property. was recently appraised for $690,000, which the Agency has offered for the property. The owner had a separate restricted appraisal completed. This restricted appraisal ranged from $750,000 to $800,000. Further negotiations will determine an agreed upon purchase price for the property. For the purposes of this report, $740,000, the Agency's current offer to purchase, is used. The Auto Dealer will purchase the Agency Assemblage from the Agency for a set purchase price under the terms and conditions outlined above. Below are outlined the other cost items. 2. Agency Assemblage - Additional Obligations Environmental Remediation The Agency will incur costs for environmental remediation and will be reimbursed by the Auto Dealer. The Agency has received a bid for $57,000 for environmental remediation of 1066 Marina Boulevard. This bid includes costs to remove underground storage tanks and pump islands, installation and monitoring of wells and all other environmental remediation KEYS E R MARSTON ASSOCIATES I N C. 19096\0014-003.dx Page 17