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3. The definition of reuse value is further augmented due to certain conditions imposed <br />by the Agency, and assumptions as follows: <br />a. The seller is a public agency having definite controls over the development. <br />Due to the complexity of the overall plan of development, the developer of <br />the land parcel must contend with a series of regulations and controls which <br />are not common in the conventional real estate market. The Agency must <br />provide a continued monitoring with respect to the ability of the Developer to <br />perform within prescribed conditions. <br />The Developer, like the Agency, is unique in the real estate market. Due to <br />the various development requirements and time restrictions imposed by the <br />development program, the potential developers are limited to individuals or <br />organizations with adequate financial and productive resources. In order to <br />appeal to the limited market of potential buyers, market value must be <br />equated to the maximum price a restricted and limited market is warranted in <br />paying based upon risk and investment return factors. <br />The development plan can impose development restrictions and/or <br />requirements, including that development must commence immediately after <br />conveyance. Accordingly, the market value must reflect the advantages <br />created by the project as well as the requirements and limitations on land uses <br />to be imposed on the Developer by the public agency. <br />4. The Agency conveys the site to the Developer based upon the specific terms and <br />conditions agreed to in the DDA- <br />Development will proceed as agreed to in the DDA, i.e., speculation is not allowed. <br />C Righ& Appraised <br />The rights appraised assume that the site is free and clear of all encumbrances except those covenants, <br />conditions, and easements specified in the DDA- <br />D. Reuse Conditions <br />The DDA includes covenants and conditions that impact the development economics and hence the <br />value of the interests being conveyed to the Developer. This reuse appraisal assumes compliance <br />with these covenants and conditions, as stated in Section VI of this report. <br />182 <br />19100/0001-002.doc <br />KEYSER MARSTON A S S O C I ATES I N C. <br />Pape 5 <br />