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Salem Area Mass Transit District Courthouse Square PROPERTY ACQUISITION Purpose: The purpose of the property acquisition analysis is to establish the reasonable basis for the purchase of an undivided ownership interest in the real property described as Block 5, SALEM, Marion County, Oregon ("Courthouse Square Block") by the Salem Area Mass Transit District from Marion County. The combined County-Transit District ownership of the real estate provides the foundation for the development of the Courthouse Square Project consisting of a transit mall, transit facilities and offices, County offices, County parking and the opportunity for transit related private development. The joint ownership provides the basis for joint development of the property, joint occupancy of the property, and the sharing of expenses of demolition, abatement, relocation and unfunded streetscape requirements. It also provides the basis for revenue sharing of rentals associated with the opportunity site. Principles: The purchase of an ownership interest in the real estate is premised on the fact that the Transit District should not purchase an asset which is not dedicated to transit use. Thus, the Transit District should demonstrate that not less than its percentage of the usable space within the development will be owned by the Transit District and devoted to transit or transit related use. Analysis: The total usable square footage of the proposed development is 309,022.647 square feet. This includes a 66,824 square foot bus mall, together with all office space and common areas including a plaza, and the parking garage of 93,332.080 square feet. The Transit District will own 25,548.365 square feet within the office building, excluding common areas, out of a total of 127,270.8?3 square feet of office space in the office building. The Transit District's share of the office space in the building is then 20.074%. The Transit District will own an undivided interest in the common areas equal to 20.074%. Applying this percentage to the total common areas of 21,595.694 square feet gives the Transit District's share of common areas: 4,335.121. Adding the Transit District's office space (25,548.365), transit mall (66,824) and common areas (4,335.121) gives the total Transit District ownership interest in the development (96,707.486). The Transit District's percentage ownership of the usable space is therefore 96,707.486/309,022.647 or 31.29%. This means that the Transit District should be the owner of an undivided 31.294% interest in the real estate, given its occupancy of the proposed development. By way of comparison, assume the Transit District were to acquire an undivided ownership interest in the property sufficient for its bus mall and office space. The Transit District would require 66,824 square feet for its bus mall and 25,54$ of office space. It is estimated that the total Property Acquisition Courthouse Square 09/04/98 Page - 1