Item B: Selection of Proposal for 10th and Charnelton

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also enhance the desired connection between downtown and the University. The project appears to be the most feasible, and its readiness to proceed is very favorable. A market analysis has been completed, which was shown to staff, which strongly supports the financial feasibility of Opus’ proposed investment. Although Opus’ proposed purchase price of $482,360 is well below market value, it is the highest price offered amongst the proposals. It is also important to recognize that their proposed $40 million investment would historically represent the largest single private investment downtown. The most significant concern expressed during the review process was related to the building design presented in the proposal. In response to such comments, Opus and Pivot are working on refining the design. The WG proposal would also add activity to downtown, with a desired mix of uses that addresses the RFP development objectives and the policies in the Downtown Plan. Pacific University is currently located downtown, but an expanded facility, along with other potential offices users, would make a positive contribution to the area. WG’s incorporation of housing above office uses is also responsive to the strong residential preference expressed in the RFP. Although WG has identified a major office tenant and there appears to be adequate demand for rental housing downtown, they have indicated a need for a market analysis to support their investment and that demand may be insufficient to support the entire scope of the project at this time. Additionally, the supplemental information clarified that the open space would be private. The $1 purchase price and the request for additional grant or loan funds would require significant public participation. Again, the WG and Opus proposals both strongly respond to the objectives included in the RFP, although the proposed uses are materially different. There appears to be significant advantages in the feasibility and timeliness of the Opus proposal. The Opus project includes market feasibility, financial feasibility, developer capacity to deliver the project, and a desire and willingness to complete the project in a timely manner. It is anticipated that the selected proposal would enter into an exclusive negotiation period not to exceed 90 days. During this time, project details would be further investigated and negotiated. Negotiations would include the selling price, refinement of design and use details, financing due diligence, project timing, and other terms. The project details would then be brought back to the URA for approval, prior to the signing of a purchase and sale agreement. Additional Background Information th The 10 and Charnelton development site includes the 1/4-block former Sears building property, along th with the 1/8-block surface parking lot on the northwest corner of 10 and Olive. The property was purchased in 1993 for $900,000 (approximately $12/sqft), which included the Sears building and the half-block where the new library now stands. The URA contributed the half-block to the library project in 2004, which represented a land contribution in excess of $1 million at that time. The other th 1/8-block of the surface parking on 10 and Olive is owned by Diamond Parking. In accordance with URA action, the Agency will purchase the property for $290,360 plus exchange of the City-owned th surface lot on 12 and Oak. The Diamond purchase option must be renewed or exercised by July 31, 2008. The renewal cost is $6,000 applicable to the purchase price and would extend the option until January 31, 2009. An appraisal of the 10th and Charnelton development site (not including the Diamond 1/8-block) completed May 10, 2006 indicated a market value of $25 per square foot. An appraisal completed August 1, 2007 on the Diamond property indicated a market value for the 1/8-block lot of $33 per square foot. Using the more recent $33 per square foot valuation, the value estimate for the full half- Z:\CMO\2008 Council Agendas\M080714\S080714B.doc