Feasibility Analysis Expected rents: We expect to lease out retail, manufacturing and office spaces at similar rents to what Industry City offers currently, or the rents which EDC charges for newly built spaces at Bush Terminal. The expected rents are $15-20 per sq. ft for Manufacturing spaces, $25-40 per sq. ft for Offices and around $35 sq. ft. for Retail spaces. Demolition Costs: We’ll need to demolish the existing warehouse on the site. We expect the demolition to cost around $200,000. Other than this, the following soft costs factor in additional risks and improvements.
Firstly, since the site has been covered by asphalt for a long time and used for motor pool activities, we need to factor in the costs for any soil remediation if needed. Secondly, we also factor in costs for lobbying for the desired rezoning, which if we go by the experience of Industry City, could be a long and difficult process. Thirdly, as mentioned later in this report, we intend to follow green building design principles, in line with the idea of a green manufacturing hub. Thus, we have factored in the costs of additional building improvements.
Benefits sought:
Ground Lease: Foremost, the agreement with EDC for a $1 ground lease forms the most important part of our analysis, on which the feasibility of the project, along with all its community benefits would depend. ICAP benefits: We also expect to receive tax benefits under the ‘Industrial and Commercial Abatement Program’ (ICAP). Since we’re leasing more than 10% of the spaces for retail use, as per the ICAP benefit schedule, we expect to receive a 100% tax abatement for 11 years, after which partial abatements continue until the 15th year after building completion.
MPA
14
