The Round Financial Summary

These two comparisons illustrate that, by purchasing the Coldwell Banker Building (South Office Building), the city avoids spending $13,266,670 in obligated lease payments which go away if the city owns rather than leases the building, an amount which is $4,616,670 greater than the cost of the building itself. In other words, by purchasing the building, the city will save taxpayers more than $4.5 million and own a 108,000 square-foot building that can be used to accommodate a variety of municipal and related purposes.

Schedule of Asset Values and Purchasing Costs - Market Value


Replacement Cost Market Value
Coldwell Banker Building $ 17,523,320 (1) $ 8,650,000
Central Plant 6,975,000 (2) 3,925,000 (2)
A Total Asset Values $ 24,498,320 $ 12,575,000
B Cost to Purchase $ 8,650,000 $ 8,650,000
Future Avoided Costs
Remaining Central Plant Lease Payments
C2 40 Year Lease Period $ 13,266,670 $ 13,266,670
Net Cost of Purchase (Purchase Price Less Avoided Future Costs)
D2 40-year Lease Period $ (4,616,670) (B-C2) $ (4,616,670) (B-C2)
Asset Value of Transaction After Net Cost of Purchase
40-year Lease Period $ 29,114,990 (A-D2) $ 17,191,670 (A-D2)
(1) Pacific Gateway Development Report Dated February 28, 2012
(2) Spearhead Valuation Group Report Dated December 2, 2011 (in continued use)

Schedule of Asset Values and Purchasing Costs - Net Present Value



Replacement Cost Market Value
Coldwell Banker Building $ 17,523,320 (1) $ 8,650,000
Central Plant 6,975,000 (2) 3,925,000 (2)
A Total Asset Values $ 24,498,320 $ 12,575,000
B Cost to Purchase $ 8,650,000 $ 8,650,000
Future Avoided Costs (at Net Present Value)
Remaining Central Plant Lease Payments
C2 40 Year Lease Period $ 7,285,802 $ 7,285,802
Net Cost of Purchase (at Net Present Value Purchase Price Less Avoided NPV Future Costs)
D2 40-year Lease Period $ 1,364,198 (B-C2) $1,364,198 (B-C2)
Asset Value Gain on Transaction after Net Cost of Purchase (at Net Present Value)
40-year Lease Period $ 23,134,122 (A-D2) $ 11,210,802 (A-D2)
(1)
Pacific Gateway Development Report Dated February 28, 2012
(2)
Spearhead Valuation Group Report Dated December 2, 2011 (in continued use)