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<br />/6 ~ 89 <br /> <br />Redwood Shores Child Care Report <br />11/13/00 <br /> <br />Attachment I <br />Page 2 of 2 <br /> <br />If we assume the full market "as is" value of the site is approximately $27 per <br />developable square foot, then the developer's investment of only $13 per <br />developable square foot in the site produces a land cost to the developer that is <br />approximately up to $10 per square foot less than a full market valuation might <br />produce. Based on 1.2 acres (52,262 square feet) of developable land, this amounts <br />to discount of up to approximately $525,000. However, unless the City actually has <br />an appraisal of the land value conducted, this estimate must be considered a rough <br />approximation. <br /> <br />Were the developer to pay full market value for the site, the rental rate necessary to <br />recover this investment by the developer would drive up the lease rates to an <br />amount in excess of the maximum rental rates that a childcare operator could pay to <br />occupy the site. By agreeing to lease the site for something less than its full market <br />value, but restricting the use of the site to childcare, the City is in effect subsidizing <br />childcare. <br /> <br />