11 ATTACHMENTS 05-07 - Laserfiche WebLink

Draft Memorandum July 25, 2013 EPSP Infrastructure Feasibility Analysis Page 3 given the size of the EPSP and growth management requirements imposed by the City. The relative market and financial performance of various product types can change substantially during this time. Nevertheless, land uses with negative or zero land values are unlikely to be able to contribute to backbone infrastructure through a CFD special tax or other mechanisms. • As noted, the implications of land value on development feasibility of the EPSP are complex and will depend on a range of variables, including inclusionary housing requirements, absorption, infrastructure financing, and cost allocation mechanisms. However, given current market conditions, development options 6 and 7 appear to be the most feasible, while options 4, and 5 appears to be marginally feasible from the perspective of a real estate developer(s), while option 1 appears to be the least feasible. These findings are based on the relationship between potential finished building values, the resulting residual land values, and the required infrastructure investments and other costs necessary to create this value. It should be noted that this assessment assumes that land uses with negative land values result in zero impact on project-wide feasibility (i.e. they do not contribute to the financing of project-wide infrastructure).2 This feasibility ranking is comparable to the previous EPS findings that relied on a more generic infrastructure cost to value tests. • The evaluated options do not differ significantly in terms of infrastructure costs. As in the prior EPS analysis, estimates of applicable development fees and connection charges have been included. These fees and charges are significant, especially for sewer and water services, and combined represent between 60 and 70 percent of the total backbone infrastructure burden. Development impact fees and in-tract costs are assumed to be paid for by vertical developers (e.g., home builders) and thus are accounted for in the residual land value estimates. 2 Affordable housing is excluded from this assumption; negative land values resulting from affordable housing development are deducted from the positive values of other development prototypes. P;112l000\121090EastPleasanton\Reportllnfrastru[ture Burden Memorandum\121090_Infra_mm3_07203.doex