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162 | they purchase or the money goes into the General Fund. Councilmember Ezzy Ashcraft inquired on the amount of the infrastructure fund. Mr. Anderson responded the amount is $1.8 million. Councilmember Oddie inquired what is the developer's commitment for making repairs to the infrastructure of the building. The Assistant Community Development Director responded that the tenant is putting $10 million in the purchase price and $8.5 million worth of improvements into the building; the total investment in the building is $36.5 million. Councilmember Oddie inquired if the building is just leased and not purchased what would be the price. Mr. Anderson responded the lease would be $1 million as the lessee completes repairs the first year; another $1 million year 2, and another $1 million year 3. The Assistant Community Development Director responded the total would be approximately $3.4 million dollars. Councilmember Oddie inquired what it would cost the City to bring the building up to a tenantable situation. The Assistant Community Development Director responded to make the building habitable, would cost $8.5 million. Mayor Spencer inquired what the lessee has to put in as a part of the lease. The Assistant Community Development Director responded the $3.4 million is only the infrastructure burden; the lessee would have to pay rent and the Citywide Development Fee. Mayor Spencer inquired whether the money to make the building habitable is a requirement of the lease, to which the Assistant Community Development Director responded in the negative. The Assistant Community Development Director responded there are benchmarks in the lease stating the lessee would have to spend $3.4 million; the aggressive rent increases are designed make the lessee make the necessary improvements. Mr. Anderson stated as time goes on, it will be more expensive for the lessee to have a building that cannot be occupied. The Assistant Community Development Director continued the presentation. Regular Meeting Alameda City Council 9 March 15, 2016 |