Reso 1996-061 to 065 - Laserfiche WebLink

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IV. VALUE OF THE INTEREST TO BE CONVEYED Reuse Value In the reuse appraisal prepared by KMA, it is concluded that the Agency's proposed agreement with the Auto Dealer is a fair consideration, given the reuse conditions as set forth in the DDA 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 the value that can be supported by the Auto Dealer for cleared sites ready for development with no extraordinary site preparation costs, such as remediation, or for special assessments. Based on the upper end of the range ($12), the value of the combined 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 estimated 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, 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. Auto Dealer is estimated to be paying $500,000 to the Agency, five years from conveyance. The present value of $500,000 is $340,000. The result is that the Auto Dealer is effectively paying over $12 for the combined private and public sale. Additionally, the Auto Dealer is assuming certain additional risks on costs, such as, the cost to remediate hazardous soils. The present value to the Agency of this future payment five years from now is projected to be $340,000. The KMA reuse appraisal is attached to this report and incorporated herein by this reference. Estimated Value at Highest and Best Use KMA has also estimated the value of the interests conveyed to the Auto Dealer if the entire site was sold by the Redevelopment Agency at its highest and best use allowed under the redevelopment plan. The highest and best use consistent with the Plan may not be consistent with the public policy goals and objectives embodied in the DDA In addition, the Redevelopment Agency is expressly prohibited from selling land for speculative purposes. Land cannot be sold until it is ready for near - term development. Based upon a review of appraisals provided by the Agency, and our knowledge of the San Leandro real estate market, KMA estimates the combined fair market value of the Agency Assemblage under the highest and best use to be in the range of $15 per sq.ft., or approximately KEYSER MARSTON ASSOCIATES I N C. 19096\0014-002 dx Page 9