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Joel Hanson <br />February 20, 1990 <br />Page 3 <br />This budget identifies potential bond issuance for the project <br />equal to $1.96 million. It is consistent with a previous <br />analysis in terms of estimated acquisition costs, and subsequent <br />repurchase of the property by the developer at $1.35 per square <br />foot. <br />We have also analyzed this cost on the potential for development <br />within the overall site. Supporting a bond issue of $1.96 <br />million over a 15 year time period would require an estimated <br />$255,000 per year of annual increment. Working backwards, this <br />would require an ultimate development on the site of $5.2 <br />million, or approximately $450,000 of new development per acre. <br />If we assume that each acre contains an estimated 15,000 square <br />feet of new development, at $30 per square foot, the estimated <br />future market values are consistent with this budget. <br />This budget also provides for appropriate public improvement <br />costs, on -site demolition costs, and site development costs as <br />required by developer(s). <br />Please understand that this budget represents only an upper limit <br />for future authorizations for this project. This does not commit <br />the City to proceed with future phases, unless it satisfies <br />itself both to the viability of each project, and the financial <br />integrity of the ultimate bond issues. <br />PWP /mat <br />cc: Mary Ippel <br />Page 49 <br />