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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)