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M E M O R A N D U M r DATE: June 20, 1989 TO: Steve Sarkozy FROM: Craig A. Waldron SUBJECT: Solution to Post Office Situation Roseville Properties has been negotiating with the Post Office regarding a leased site on the former AT&T building in the B-2 area adjacent to the new City bridge. I have viewed this development as extremely positive, simply based on the traffic and attention that this draws to the commercial corridor that the City is attempting to develop. The problem that has occurred, regarding this development, relates to the fact that the proposal by Roseville Properties, before the Planning Commission, was not deemed to be appropriates in terms of overall development quality. Subsequently, the original proposal was tabled by the Planning Commission. Howard Dahlgren has been working with Roseville Properties to find a solution to the problems on the site. The problems range from parking, d n exterior, usetof the rear part of the building as opposedI stated c. After discussing this issue with Howard and Frank Rog, that I would figure out how to finance potential improvements and demolition on this site, assuming that a workable solution could be reached regarding the aesthetics of the site development. It now appears that a solution is moving forward as it relates to the aesthetics of the site, thus, I have been negotiating with Roseville Properties regarding financial assistance. Roseville Properties was originally requesting $200,000 to facilitate the removal of the front part of the building and to construct the additional site improvements. After reviewing the costs, it is my recommendation that $175,000 would be appropriate. I arrived at this figure through assuming a 2 year offset for lost rent on the 12,000 sq. feet, plus the actual cost of demolition. The developer will be losing $325,000 in building value and the future rents. In addition, the other required improvements on this site will cost Roseville Properties approximately $144,000. Roseville Properties has also stated that approximately $150,000 will have to be paid on the existing mortgage on the building "'up front" in order to match the new asset value with the loan amount. Roseville Properties will also be moving forward to request additional rent from the Post Office.