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<br />lP.A'~ <br /> <br />IV. <br /> <br />V ALUE OF THE INTEREST TO BE CONVEYED <br /> <br />Reuse Value <br /> <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 ofa total of fifty-eight (58) rental <br />apartments, with 57 units restricted at very low-income units and one unit restricted at a <br />moderate-income unit. The income and rent restrictions will extend for 55 years in accordance <br />with Section 50052.5 of the California Health and Safety Code. <br /> <br />Keyser Marston Associates, Inc. (KMA) evaluated the development economics of this project. <br />KMA's analysis indicated that the project's economics support approximately $5.2 million of <br />tax -exempt debt. In order to finance the project's estimated $19.8 million of costs (excluding <br />land and water fees), the Developer will be securing a number of subsidy sources, including tax <br />credit equity, Proposition 46 bond funds (MHP funds) and other funds. Given that the project's <br />income (with 57 very-low income units) is estimated to support only approximately 25% of the <br />project's construction costs (excluding land), the reuse value of the development site is estimated <br />at $0. <br /> <br />Estimated Value at Highest and Best Use <br /> <br />The City/Agency acquired the 27,300 sq.ft. site for $1.35 million in December 2000 for <br />residential use which is the estimated fair market value of the site at its highest and best use. <br /> <br />18610.001\028-004.doc; 1/20/2005 <br /> <br />Keyser Marston Associates. Inc. <br />Page 10 <br />