Agmt12 Keyser Marston Associates, Inc.

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EXHIBIT "A" SCOPE OF SERVICES Task 1: Assist Staff in Structuring Alternatives The goal is to maximize the value of the city owned sites while achieving the desired project with public benefits. The ultimate business terms will be a combination of a disposition price for property, the parking solution, and the financing of public spaces, infrastructure, and off-site improvements. Based on our experience with other similar projects, KMA will assist staff in the identifying possible financial disposition alternatives to maximize value, achieve the desired public benefits, and utilize existing city resources as much as possible. This task is expected to involve at least one meeting with staff to discuss and, if requested, the preparation of a brief inemo summarizing alternative financial structures that can be used in discussions with the Council subcommittee and in response to the development proposals. Task 2: Discussion of Ground Lease Option Staff and the City Council would like to have a discussion of the pros and cons of the conveyance of the city owned sites through a ground lease versus a fee sale. How can a ground lease be structured to be a viable alternative? What are the key challenges with a ground lease for a private developer? Upon staff request„ KMA will outline the issues of ground lease in a matrix format. This task is anticipated to have two meetings, one meeting with staff and one meeting with the City Council. As illustrations of possible discussion points, the following is offered: The preference of a developer is to purchase the site. The reasons often include limiting the number of lenders willing to finance a project on a ground lease, the term of the ground lease is limited to 50 to 55 years, and the impact on value of the property without owning fee interest in the land. Of course, there are examples in the market place of ground leases, including the Google Campus in Mountain View, the Stanford business park, hotel properties and shopping center parcels. Important issues to the Lessor include the rate of return on the land value, escalations to rent over time, the ability to adjust the rent to fair market value, the obligation by the Lessee to maintain a first class property and to reinvest in the property, and the ability of the Lessor to have ultimate control in the long run. Task 3: Evaluation of Development Economics Task 3a Updating Market Conditions Based on our experience working on similar projects, KMA will update market conditions to provide staff with information concerning current leasing trends, rental rates, etc., which may impact the development economics of the proposed project. This ATTY/AGR/2012.017/KEYSER MARSTON BLOCK 2 DEPOT CIRCLE REV:02/08/12 Page 10 ot 73