RM 11-16-79 - Laserfiche WebLink

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South Bend Redevelopment Commission Regular Me ting - November 16, 1979 7. PROGREdS`REPORTS a. Ms .1 Auburn continues... structure. So I don't think I'm coming from a demolition perspective at all, but 'I would like to point out that in my uneducated manner I came up with some real problems with pulling this off, as much as I'd like to see the build -. in saved. Mr. Miller: First of all, as far as the cost from the Ameri- car Development Corp. proposal, I think if you look at that pr posal closely and tally up all.the indirect costs; all thE soft costs, etc. you'17'come up with a higher number. With respect to the number of square feet, there is a cost per foot of net rentable area not per foot of the entire gross portion of the structure. I do that because I prefer to relate it to the productive space in the building, just ho many square feet for producing revenues. I'll point out also that that per sq. ft. figure ranges all the way, in th three office development proposals anyway, all the way from $45 up to $66.63 a sq. ft. The latter one is approach- inc a point where it's no more economical to redevelop that than it is.to build new space, which leads to your next qu stion concerning the Class of space. 'Of course it's di ficult for me to gauge, as I didn't have detailed plans, an so forth. I wouldn't say necessarily the renovated sp ce is not Class A space. I think.it can be some ex cellent space provided in older buildings. You only need to go to the Loop in Chicago to see some. In this case I ha some serious questions as to whether what they were building would really produce the quality of space that th y were saying it would. And that it would indeed gene- ra a the revenues that they claimed they would. I think th t can only be determined through further investigation anc further detailing. I also was concerned about the exteriors and exactly what they were doing. There seem to be some very strong inconsistencies among the proposals of what they propose to do and how much it was going to cost. So a proposed to do a lot more for a lot less. I don't kn w whether that'.s because they typically operate more of Iciently or what, but that raised some questions in my mi d. As far as speculating on the land, that one I can't answer. I on't know of any sort of restraints on that activity, I suppose that it would be possible to build them into any co tract for sale. As far as debt coverage goes, we typi- cally like to look at 14 (1.25%) or thereabouts. On a pr ject of this nature, where it's not large and where a sm 11 reduction in your revenues can reduce that ratio ra idly, you want to have at least 1.2, 5 up front, and -23-