02-14-1996 Council Agenda - Laserfiche WebLink

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02 -09 -1996 10:47 612 339 5897 BEST &FLANAGAN P.05 Rusten Henkel, Inc., a Twin Cities leasing and market research firm, reviewed the Comparative Analysis report. Based on the report and its knowledge of the Little Canada market, Rusten Henkel indicated that the Project has room for rent increases, especially after the rehabilitation has been completed. Annnan! The Partnership retained Kramer Gelder Strandt and Dayton, Inc. (the "Appraiser ") to appraise the market value of the Project (the "Appraisal,. The Appraisal reflects the opinion of the Appraiser as of January 25, 1996 and concludes that (i) the market value of the Project "as it is $3,250,000; (ii) that the prospective market value assuming completion of the rehabilitation and subject to Title II tax status and federal tax credits is $4,040,000; (iii) the prospective market value assuming completion of the rehabilitation and subject to Title II tax status and tax - exempt bond financing is $3,310,000; (iv) and the prospective market value assuming completion of the rehabilitation and subject to Title II tax status, federal tax credits and tax-exempt bond financing is $4,430,000. The value of the tax credits expected to be generated by the Project is $120,000. Since the Appraisal is not included herein, a potential investor does not have the benefit of the research, analysis, conclusions and limiting conditions contained in the Appraisal. If a potential investor has any questions concerning the Appraisal, the potential investor should contact the Partnership at (612) 227 -6925 to obtain a copy thereof. THE CONCLUSION AS TO AN ESTIMATED MARKET VALUE IS SOLELY THE EXPRESSION OF AN OPINION BY THE APPRAISER AND IS NO GUARANTEE THAT UPON SALE THE ESTIMATED MARKET VALUE WOULD BE REALIZED. IN THE EVENT OF A FORCED SALE IT IS LIKELY THAT THE ESTIMATED MARKET VALUE WOULD NOT BE REALIZED. THE APPRAISED VALUE ASSUMES A PRICE NEGOTIATED ON A VOLUNTARY SALE BASIS, WITH A REASONABLE TIME IN WHICH TO DETERMINE A BUYER AND THE FAIR MARKET VALUE OF THE PROPERTY. Environmental ReBert Prior to the acquisition and commencement of rehabilitation of the Project, Peer Environmental, Inc. ("Peer ") was retained to conduct a Phase I Environmental Site Assessment ( "ESA ") of the Project site. The ESA was performed in accordance with the procedures and Phase I requirements specified by the Fannie Mae Dus Guide (4/25/94). The objective of the ESA was to assess the potential for environmental liabilities associated with contaminated soils or groundwater, the presence of on -site asbestos- containing materials, underground storage tanks, polychlorinated biphenyls and hazardous materials produced or stored on the Project site. The ESA, dated November 15, 1995, concluded that no significant environmental issues are present on the Project site. -14- Page 16