pages: CityCouncil/2006-07-26.pdf, 6
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CityCouncil | 2006-07-26 | 6 | Mayor/Chair Johnson inquired how the square foot price was determined for the Historic Theater. The Development Services Director responded cost comparisons were done against brand new, first-ru construction at $1.30 per square foot average; the budget starts out with a lease rate of $72,000 per year for years one through six; the rate jumps to $156,000 per year for years seven through ten; the rate would be based on the CPI starting in year eleven, with a 3% floor and 5% ceiling; the developer would be required to make a $1.2 million FF&E commitment; the operating costs would be very slim in the first six years, especially when there is a FF&E load to retire; a 17% profit participation has been included in the event the project stabilizes at a higher rate than estimated; the City would share in percentage rent if the project produces better than expected; the City would receive payments just about equal to what the developer and investors are getting. Mayor/Chair Johnson inquired whether the profit participation continues throughout the lease. The Development Services Director responded the profit participation is reduced to about 12% at the time the first loan is repaid. Mayor/Chair Johnson inquired whether the square footage rate is a minimum rental amount, to which the Development Services Director responded in the affirmative. louncilmember/Commissioner Daysog stated that translating items into square foot terms would not overcome the existing difference of 90 cents per square foot; related discussions were held last August; he would rather get the money up front. The Development Services Director stated the City is leveraging a minimum of $5.3 million in private investment as a result of the agreement. Councilmember/Commissioner Daysog stated said investment contributed to the division within the community. Councilmember/Commissioner deHaan stated there was a $4.5 million delta between the bids; the project includes the Cineplex, Historic Theater and parking garage inquired whether there was a guarantee that the Cineplex financing was in place now. The Development Services Director responded that the developer has Special Joint Meeting Alameda City Council and 6 Community Improvement Commission July 26, 2006 | CityCouncil/2006-07-26.pdf |