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���-��7 <br /> IV. VALUE OF THE INTEREST TO BE CONVEYED <br /> Reuse Value <br /> The reuse value of the Property is a direct function of the development economics of the specific <br /> Project required in the Agreement. The Project will consist of a total of eight (8) townhome <br /> units, the pricing of which is restricted so they will be affordable to very low-income households <br /> (at 50% of AMI) for 45 years in accordance with Section 50052.5 of the California Health and <br /> Safety Code. <br /> Keyser Marston Associates, Inc. (KMA) evaluated the development economics of this project. <br /> KMA's analysis indicates that the project will generate approximately $1.62 million of net sales <br /> proceeds, which approximates $202,500 per home. Consistent with the affordability covenants, <br /> these home prices are significantly less than market rate prices in the area. In order to finance <br /> the project's estimated $2.07 million of costs (excluding land and water fees), the Developer will <br /> be securing a number of subsidy sources, including an estimated $40,000 in SHOP funds and <br /> $84,000 from the Federal Home Loan Bank (AHP). Combined, these sources will support <br /> approximately $1,744,000 of costs, resulting in a remaining shortfall of $450,000 before land <br /> costs. Given that the project's income is estimated to support only approximately 78% of the <br /> project's construction costs, the reuse value of the development site is estimated at $0. <br /> Estimated Value at Highest and Best Use <br /> The City/Agency acquired the 15,000 sq.ft. site for $807,500 in December 2000 for residential <br /> use which is the estimated fair market value of the site at its highest and best use. <br /> 18610.001\028-005.doc, 2/11/2005 Keyser Marston Associates, Inc. <br /> Page 9 <br />