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and their work is only valuable to the degree that Mundie accomplishes that objectivity in the analysis and reporting the firm produces. Mundie further stated that her firm has been in business for twenty years (next month), and that represents several hundreds of reports. The main questions Mundie was to address were: • Opportunity costs of the project; • Complimentary comments to Kelly's, what if the project is developed and the cinema fails? • How much does the economic success of the cinema depend on parking? In response to the first question, Mundie explained that in this case (developing a project such as the retail- cinema) the opportunity cost is the outcome of any other course of action that this Council might have taken, which the council is foregoing by opting for the retail cinema. In the case of the retail cinema project there are two kinds of opportunity costs: the land (what could one have gotten for the land if it was to be used differently), the other is the proposed project's contribution to downtown revitalization (meaning what other downtown projects could be embraced in lieu of this project which would also promote downtown revitalization). Looking at the issue of land issue, Mundie stated that one must consider that the City only owns part of block one, and secondly its purpose and allowed zoning uses will also determine its cost. This is addressed by looking both at the City Zoning and the characteristics of the area. Based on the previous study, this area will demand parking. Such parking could not be at a subsurface level because the conduit for Redwood Creek goes underground and just about cuts the site in half. Consequently, the maximum office space usable would be 80,000 square feet (because a considerable amount of the area was dedicated to parking). The hypothetical land value of the building described would be in the 4 to 5 million dollars range, which is considerably less than what the proposed project would yield. Block 2 also has the same parking issues, and probably the maximum office space available would be 11,000 square feet. The price would probably be $600,000 to $650,000. Mundie's conclusion then is that these projects would be smaller than the actual proposed project, and the smaller size and the parking requirements, make it doubtful that the City could obtain a higher price for the sites. Mundie further stated that when considering the revitalization process one could reason that since the alternative projects would be smaller scale, the opportunity cost for the revitalization or the downtown would also be smaller. Addressing the second question Mundie stated that one thing to remember is that the cinemas were brought into the project because the commercial district in that area was already failing. REGULAR COUNCIL MEETING MINUTES DECEMBER 4, 2000 PAGE 10 MINUTES Book No.58 Page NO. 272