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03/06/98 FRI 1i:10 FA~ 503 223 ~606 nfELVIN rfARK CO~PANIES ~002 <br />~ ~ O <br />To: Billy Wasson <br />Frvm: Craig Lewis; Projed Manager <br />Dato: 03/06/98 <br />Re: Correlation between amount borrowed and annual debt service <br />Bifly- <br />Per your request, I have adjusted the loan detrt on the previous model to establish the sensitivity <br />between the project cost borrowed and annual debt service. <br />8ased on a County occupancy of 96,822, a0 5.25°~ interest rate on a 25 year loan the impacts are as <br />fallows: <br />Reduce the amount borrowed by: $10,000 and the reductfon in annual debt service is: $7'19/ year <br />Reduce the amount borrowed by: $100,000 and the reduction in annual debt service is: $7,192/ year <br />Recluce the amount borrowed by: $1,000,0~0 and the reduction in annual debt service is: $71,910! <br />year <br />Correlating these amounts to rent impacts I catculated that a$71,190 ieduction in annual debt service <br />would result in a$.74 / year ($,062J mo,) redudion in required County (excluding spec and Transit) <br />rent. By my estimates, the County's monthly rent would be slightly less than $1.24 per rsf per ma. <br />instead of the infamous $1.30. <br />• Page 7 <br />