pages: CityCouncil/2010-06-01.pdf, 16
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CityCouncil | 2010-06-01 | 16 | $593 per square foot for a 2500 square foot house ends up with a house priced at $1,347,000; EPS started with the all residential bucket at $582,000, as opposed to the single family bucket at $666,000, which ends up with a price of $1,462,000 for a 2500 square foot single family house using the EPS methodology; EPS estimates that the average premiums at Alameda Point to be 1% of sale price; the SunCal estimate is 6.4%; explained the basis for SunCal's estimate; stated SunCal disagrees with the 1%; regarding absorption, SunCal is not opposed to changing to the City and EPS's recommendation; if the City wants to take a slower absorption, it is fine with SunCal; for single family construction costs, SunCal estimates $115 versus EPS's estimate of $130; explained the basis for SunCal's estimate; further stated another area that has been discussed is what should be anticipated as the real growth in home prices over time; SunCall's pro forma includes 2% starting in 2012; ESP recommends 1.4%; both sides have gone back and forth over the analysis; long term construction cost trends range from -0.7% to 0.5%; SunCal included a 0% real price growth; all of SunCal's prices are increased by CPI throughout the term of the project; there have been some clear mistakes in the EPS methodology as to price; EPS's premium analysis is simple; SunCal has done a lot more research on direct construction costs; regarding SunCal's Albuquerque, New Mexico project with D.E. Shaw being put into bankruptcy, it is fair to say any large real estate player, particularly in residential, has struggled in the past several years; assets have gone through a devaluation; SunCal and its partners have been severely hurt; in the Albuquerque example, $180 million in D.E. Shaw and SunCal's combined equity is in danger of being lost, which is an unfortunate circumstance that is part of the price and risk of working in development; the good news is D.E. Shaw continues to invest along side of SunCal and to express faith that SunCal will go forward, as evidenced by the continuing investment in the Alameda process in terms of the millions of dollars spent to date; SunCal would like to complete the process; a project that the Council, Planning Board, citizens, D.E. Shaw and SunCal could be proud of will be presented to Council for consideration in the next 18 months to two years; SunCal looks forward to the opportunity to complete the process. Councilmember/Board Member/Commissioner Tam stated the question is whether there would be sufficient funding to pay for public amenities and community benefits envisioned in the Master Plan; the answer is yes as demonstrated by two EPS pro formas delivered to the City on April 8th and April 26th; the density bonus option pro forma was sent to the Deputy City Manager - Development Services on April 26, 2010; inquired whether the pro forma was incorporated in the staff report. The Deputy City Manager - Development Services responded the pro forma is an attachment to tonight's staff report. Councilmember/Board Member/Commissioner Tam inquired why staff has a different conclusion than SunCal regarding the density bonus option pro forma relating to payment of public amenities. Special Joint Meeting Alameda City Council, Alameda Reuse and Redevelopment Authority, and 5 Community Improvement Commission June 1, 2010 | CityCouncil/2010-06-01.pdf |