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A. Opinion of Yalue/Conclusion The previous section of this report discussed the approach to determining the value of the interests being conveyed to the Developer. Based on this analysis, it is our opinion that as of July 31, 1997, the fair reuse value for the interest to be conveyed to the Developer, free and clear, is a range of $1,500,000 to $1,900,000, subject to the terms and conditions of the DDA, specifically the actual development costs and rents. Additionally, the Developer is obligated to incur construction costs estimated at $1,000,000 for architectural and site upgrades of higher quality than would typically be found in a neighborhood shopping center. Statement of Limiting Conditions and Assumptions The conduct of any appraisal is necessarily guided, and its results influenced, by the terms of the assignment and the assumptions which together form the basis of the study. The following conditions and assumptions, together with lesser assumptions embodied in this report, constitute the framework of our analysis and conclusions. The estimate of reuse value for the interests being conveyed to the Developer assumes compliance with the following: Developer must satisfy all the terms and conditions of the DDA and commence development shortly after conveyance. 2. The Project must conform with the final site plan approved by the Agency, with an approximately 80,500 sq.ft. local resident -serving retail center. The center must contain a 36,000 sq.ft. upscale grocery store as the main anchor tenant, a 4,500 sq.ft. fine dining restaurant, several other restaurants, and smaller retail shops. 4. The Developer is obligated to construct high quality site amenities, including a prominent landscape feature at the corner of San Leandro Boulevard and Davis Street, extensive parking lot landscaping, a creekside plaza and a creekwalk. The architectural features must also be of a higher quality than would typically be found in a neighborhood shopping center. 2(`3 KEYSER MARSTON ASSOCIATES I N C. 19100I0001-002.doc Page 19