Project Analysis and Feasibility Report (2)

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Costs lssues and Assumptions: Construction costs are estimated by developer at $90/ sq ft Operation and maintenance costs are estimated by developer at $0.33 / sq ft. Site demolition and abatement is estimated by county at $2,450.000 Purchase of 3 parcels on block in private ownership is estimated at $925,000 Interest rates on COP is estimated at 6.5% Estimated cost of 350 parking stalls (above ground) $4,350,000 A reduction of $1,000,000 in cost ta county reduces rent by $.010/sq ft/mo. Should the county pay a residual at end of lease to lower monthly payments? What is appropriate return on investment for developer? What county revenue can be obtained from land leases, net leases, parking? Process: I anticipate asking your financial team to evaluate the project initially without the benefit of the developer's numbers. In effect, your team will act like an independent developer using the data contained herein and other supplemental data as necessary. This process will give me a fresh look at the project without the prejudice that may be developing in my relationship with Mr. Berrey. Then, I will share with Mr. Berrey any new ideas or recommendations you have that may improve his proposal. The final step would be a collaborative process involving the county, Mr. Berrey and your team. This step would refine or modify the final product in a manner that meets the interests of all parties. Your input on this process is welcome and open for discussion at our meeting on the 18th. I have included a summary of Mr. Berrey's original proposal for the project. He has made several modifications based primarily on the fact that the county desired no residual at the end of the lease and updates to the construction and financing costs have also occured. Please call me if you have any further questions. Sincerely Randy Curtis, Director