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Fields Property Development Analysis and Opportunity Study - 02/13/2014 FIELDS PROPERTY DEVELOPMENT ANALYSIS AND OPPORTUNITY STUDY February 13, 2014 THE FIELDS PROPERTY DEVELOPMENT ANALYSIS STUDY. This development analysis was generated through a series of joint venture workshops with the property owner, local developers, local brokers, the City of Tigard, and Mackenzie land use planners and civil engineers. The intent of the workshops and this analysis is to help determine the highest and best use of the undeveloped Fields Property,given: • Significant site constraints • The current and future development market • Regional needs/City needs for employment areas OUR HISTORY. OUR FUTURE. OUR PROMISE. This exercise was taken on as a collaborative effort to determine how the Fields The values of our founder, Tom Mackenzie, remain the hallmarks of our firm. Property could be Upon this foundation we have,steadily and intentionally,built a team of experts focused on delivering the highest level of design excellence in service to our clients. This mark is our signature and our bond. I. Site Context 3 Z 1.1 Site information 4 W 1.2 Site Context 7 o II. Development Constraints 8 V 11.1 Development Constraints 9 11.2 Market Context 13 III. Potential Solutions 14 111.1 Shared Goals 15 111.2 Development Options 16 111.3 Zoning Options 19 For more information please contact: 111.4 Development Economics/Feasibility 21 Christine McKelvey, AIA, LEED AP Matt Butts, PE, LEED AP ❑�— ❑ 111.5 Needs 22 Land Use Planner Civil Engineer 111.6 Development comparison costs 23 cmckelvey@mcknze.com mbutts@mcknze.com 503.224.9560 mcknze.com ■ Portland, OR Vancouver, WA Seattle, WA The pages of this proposal were printed on recycled content paper using soy based ink. 2013 Mackenzie Engineering Inc. Unless noted,all text, video recordings, photos,drawings,computer generated images and/or statements are owned by Mackenzie and protected by copyright and/or other intellectual property laws. No part of these pages,either text or image may be reproduced, modified,stored in a retrieval system or retransmitted, in any form or by any means,electronic, mechanical or otherwise without prior written permission. Mackenzie',and M.T"and all corresponding logos and designs are service marks and/or registered service marks of Mackenzie Engineering Inc. All rights reserved. I . ITE N TEXT S CO What are the physical features of the Fields Property site? 101 Size: 42.5 acres Location: Just south of 217 and west of SW 72nd Avenue exit Zoning: I-P, C-P, and R-3.5 Comp Plan Designation: IL, CP, and L Street Frontage: Approx. 345' along SW Hunziker Road, contains private street (SW Wall Street) on west side Topography: 4-5% slope on western side, 10-12% on eastern side Existing Features: Remaining row of trees on eastern property line; unused rail spur along (private) SW Wall Street Wetlands: Low-quality wetland area { near northwest corner (Clean Water Services Vegetated Corridor) F t Fields Trust February 13, 2014 Existing Conditions - 2008 Survey .,. �41%1 t Existing Conditions and Topography Rail Spur � Low-Grade Wetland (Clean Water Services- • Portions of the site near the rail spur prevl- designated Vegetated Corridor) �� �'jS ously leveled by owner; low-grade wetland developing (not on City inventory, but on SLOPE Clean Water Services Vegetated Corridor map) ° ,� n., g4st . w Elevations range from 150' at western property 6.1 -10% U. line to 240' at places along eastern property r Sys line 10.1 -?°r° 4 • All structures on the site have been removed 41, CY KN �N OF , 7 Low Density_ 3._ r nsity � � Ho U51 ng (R 5) , r f i > y z K. v, r Fields Property Development Analysis �.- ME k ' Y. r� s �4 f 1 • • • � • � � � � � � ., of "`"r �, „` ...t.;_ View of Eastern Side of Site fromm 'acent Residential Area/SW Varns Street AOL � 4p v a » H W g C End of Rail Spur at Southern roperty Line North Side of SW Wall Street and Rail Spur Northern Edge of Site Eastern Edge of Site from Adjacent Apts { a is Southwest Corner of SW Hunziker Road Northern Edge of Site Mong SW Hunziker Northern Edge of Site Along SW Hunziker and SW Wall Street Rail Spur on South Side of SW Wall Street Road Road 2027 City of Tigard Comprehensive Plan 102 SITE CONTEXT Designations 1 tr,V�i M U E I IL SITE q�. Surrounding Area Current Zoning os 2 L MA MU—CBD ga,d CP �, i ary R i MH i1t c�= OS 8 R-4.5 C-' f I-P Y f C-G SITE MUE LEGEND Site Zoning District D•• Pa • •- of WallStreetNorth •- of R•.• _ C-G C-P a "s R-3.5 R-25 I-L� -P C=AP '-P f, MU-CBD a _ v MUE - __ R-12 4 � R-12 .,. ,.� R-25 R-zs 1-P R-3.5 R-4.5 .5 R-7 Northwest Corner of SW Hunziker Road View of Eastern Side of Site from ent R-7 R-12 1-H • Residential 17 Fields Property Development AnalysisMk A rAA Z304/4.31 ■ I . DEVELOPMENT , CONSTRAINTS What factors are keeping the Fields Property from being developed, and what benefits will the City receive with the site development? 11 .1 The property has been on the market for several years with much interest from the development community; however, development has thus far been unfeasible. The general location is desirable only for a limited set of uses, and there are significant topographical challenges with the uses allowed under the current zoning designation of I-P. Previously considered uses include a bus barn for Tigard-Tualatin School District, City Public Works use, industrial development, and multi-family residential. x ., Primary Issues Existing Conditions and Topography 1. Slope and configuration of majority of site not suitable for Rail Spur - market-scale development allowed under current I-P zoning (e.g. 200' wide/deep or larger industrial/employment use how-trade wetland (wean water services designated Vegetated Corridor) buildings) 2. Slope of SW Hunziker Road not adequate for truck access SLOPE on north side of site (to support allowed uses under current 0-6% -P zoning); existing grade is : 10%, recommended grade is 6.1 -10% o .r 4-5/) 3. Transportation System Plan (TSP) designation and width 10.1 -?% of SW Wall Street (private) between adjacent development �� sb�r , �x and rail spur not wide enough for City Collector standards Gr (SW Wall Street designated as future Collector on City's J TSP) / as lie Secondary Issues ���' eaco `�G /Q(0 f Kl 1. Wetland area in flattest portion of site (low quality) 2. Remaining trees along eastern property line (both positive and negative factor) 3. Limited access to site for some uses from Hwy 217, SW ,u .a 72nd Avenue, and Hwy 99W on existing roads : 4. Possible Noise from adjacent railroad switching yard could ��� ,� `¢� Low;Density NfQP-S gCR 3 5 - ) � ` impact possible uses depending on needs 9 . F Fields Property Development Analysis Example: Small industrial building (150-200' wide) ograph_Y — exist ng T � top - _ — — m Approximate of cross soctioris Primary Constraint 1: Slope andExample: Typical small office (100' wide) Configuration/Zoning • For western portion of the site's current zoning and Comprehensive Plan designation , - - zz (IL), with the site's slope and configuration, allowed uses such as small industrial -m - existing topography ;�� _ buildings (150-200' wide) would require a 20-30' high retaining wall and/or extensive - grading, which has been found to be cost prohibitive for previous potential buyers • Smaller buildings such as offices would require partial basements and a smaller Example: Retail/Mixed-Use/Residential (50' wide) retaining wall, or more extensive grading which has been found to be cost prohibitive for this use • Narrow buildings such as multi-family residential or mixed-use buildings could be built -- - --- -- - -- - -- - - into the slope with small retaining wall required (however, current zoning does not J Le, tingtopographysupport housing as an allowed use) _ - - - Primary Constraint 2: Slope of SW Hunziker Road ti ,"� I ' x • The majority of the slope along the property frontage of SW Hunziker Road (only public street frontage) is approximately 10%, which is too steep for trucks servicing NI allowed uses on site (4-5% is the maximum possible) • Only current access to property is at SW Wall Street (currently a private street). Access off of Hunziker Road is needed for development but the road is steeply sloped for majority of street frontage (10% +/-) and is not adequate for larger truck turning radius required with many I-P zone uses. Fields Trust February 13, 2014 Example Street Sections: Current Layout Inadequate Collector Width, Adequate Local ,r Industrial Width THREE—LANE MINOR COLLECTOR 40 r .� �; a "' Primary Constraint 3: Private Street (SW Wall Street) STANDARD Designation/Width �- • The most appropriate vehicular access to the site has been found to be from a private street (SW Wall Street). SW Wall Street is included on the City's TSP as a Minor ' Collector, with a required width of 58'-96'. At different points along the SW Wall E Street in its current layout between the rail spur and existing buildings, the width is less SECTION wr s °' e , u •°' s wr than 58' A • SW Wall Street could potentially be amended in the TSP to be designated as a Local Industrial street, which is a more feasible design section. Adjacent property owner has rights to rail spur and does not appear willing to support abandoning the spur to i facilitate road improvements along SW Wall Street • Possible future connection to SW Tech Center Drive; SW Tech Center Drive is ` SECTION .w w designated Local Industrial B "" Secondary Constraint 1: Wetland Area Wwax 2V 2W TWO-LANEE ss•,anm, e. - �. zap•au,xw • A low-quality wetland exists on flattest parts of the site, which has been found to be LOCAL INDUSTRIAL • the most appropriate location for industrial development STANDARD W ko.x 40 E]051P,Q RAQA010 � SECTION •.. .x s' , e A ,ww�LAMTM�LAW — , } ncr"u,c wuL „r y� eo'n.o.w. 2V f 28' 1.4' FXISTINQ RA6A0'O / �uQ5TQP1gCT1�NDLOE /./___ �\ ry _-_- 7 C SECTION °m a: e - .-�--� ♦ B � ,w",� w ,3` p`f �� / 9lIQULDFIt . . - - . � • 777 Street Section Locations Fields Property Development Analysis M 2130474.01 ■ ■ ■ «� OV IF Secondary Constraint 2: Remaining Trees • A large amount of mature trees exist along the eastern edge of the property. They act as a buffer to adjacent residential uses and could be potentially integrated into 7177-77 a development scheme that included smaller scale buildings such as residential, but serve as a constraint for many of the currently approved uses in the I-P zone • Both positive and negative factor; some additional trees may need to be removed, but retained trees could aid in separation of uses from existing single-family residential neighborhood* Corner of SW Hunzlker Road and SW Wall Street Secondary Constraint 3: Limited Access from Major Routes • Site is close proximity to Hwy 217 but not easily accessed from all directions, such as from northbound left turn intersection on SW 72nd Avenue, a potential issue for many use types currently allowed in existing I-P zoning • SW Tech Center Drive to the south of the site does not currently connect to SW Wall Street, but could be considered with future City transportation improvements 4 � 217 *The City of Tigard development code currently requires a 50-foot property setback where the side or rear yard of an industrial zone abuts a residential zone(see Table 18.530.2, Note 3). If the MUE-2 zone was applied to the sloped portion of the Fields Trust property,as discussed later in this document,the setback requirement could be reduced to 20'where the Fields Trust property abuts the existing residential area(see Table 18.520.2). Table 18.530.2, Note 4 references an , additional development requirement for industrial land abutting the Rolling Hills neighborhood,the neighborhood directly to the east of the Fields Trust industrial property. That requirement refers to compliance with a Comprehensive Plan policy, Policy 11.5.1,that no longer exists. The City's current adopted and acknowledged Comprehensive Plan contains no such • - • policy.Therefore, Note 4 does not apply any additional restrictions on or requirements to development of the Fields Trust industrial property. Fields Trust February 13,2014 2 MARKET CONTEXT ■ The market strength of potential future uses of the Fields Property was discussed at the two workshops with City staff, the owner and local industry/development experts; the need for and interest in potential uses that can be supported by the current market was identified by local developers and real estate brokers with experience in the Tigard area and reviewed with the workshop team in order to feasibly develop employment lands on the Fields Property. Identified High Market Demand in the Area: • Light industrial/smaller office/flex (5,000-7,500 SF tenant spaces within larger building footprints). Typically need 150' deep x 250' wide buildings with 50' truck bays • Multi-family residential (workforce to mid-range, would also support adjacent industrial and employment uses). Good location, strong market demand ... 3 ; ?TV VMS b N= u a ' F 1 Identified Low Market Demand in the Area: • Class A Office in suburban areas (e.g.: Kruse Way scale and location) Rents have not increased significantly since the late 1990's, but construction costs have. • Retail Not close enough to freeway interchange. Only specialty "destination" big-box (with little to no pedestrian traffic) might be supported, but site is too sloped to accommodate it. Restaurants (location too far from main roads, other retail) • Specialty Recreation (e.g. fitness centers-demand more retail-centered areas) • "Live/work" spaces in suburban areas (without city center co-location to services and transit) Fields Property Development Analysis MR III . POTL: NTIA TINS What is the highest and best use for the Fields Property and what measures can be taken to support it? 111 .1 SHARED GOALS What are the primary goals for the site's optimal development, considering the highest and best use (based on the market, site features, and regional needs)? highest and best use: "the reasonably probable and legal use of vacant land or an improved property, which is physically possible, appropriately supported, financially feasible, and that results in the highest value." — Appraisal Institute, The Appraisal of Real Estate Owner (Fields Trustee) Developer City of Tigard Metro • Want to see entire site sold and developed Zoning that respond to market; develop uses • Bring new users/appropriate development to Promote and sustain a strong and competitive such that it meets the needs of the community that are profitable, meet long term market Tigard which will help support the local econ- regional economy and provides the owner with a reasonable rate needs and serves as a community asset omy Protect industrial areas from non-job-creating of return on its investment Make site more available for development to • Increase job opportunities uses other future users (such as through easier . Improve public infrastructure and connectivity access) in central locations of Tigard g (particularly for freight mobility) Shared Goals: Resulting Question: What potential site layouts and uses would achieve these? Fields Property Development Analysis 111 . 2 Subarea 1 • Subarea 1 contains slopes closer to the eleva- tion of SW Wall Street and could be easily Site Subareas accessed from that street. This portion of the Subarea 1: Western Side (Least Sloped) site is less steeply slope (existing wetland N- ,q would need to be mitigated and/or accommo- Subarea 2: Eastern Side (Most Sloped) dated) • The Shape of subarea 1 is more appropriate to accommodate small industrial buildings, flex/ offices, retail, or other commercial use as cur- ren ur- rently zoned (I-P) Additional access could make this portion of the site more feasible for development if SW Tech Center Drive was extended west and/ora � .. � 5 gra✓r J 'y/a+ R� secondary access was added off of SW Hun- .~ ziker (would be steeply sloped) ` ` - ;`` �` 4'4'1. Subarea 2 S ll ba rea ' s • Subarea 2 has a steeper slope (10% +/-), with �1 ~mar 20 acres y° no current access off of SW Hunziker. This por- tion of the site is non-rectangular shaped and Subarea z contains a significant number of existing trees ApprOX. �fsr°�i 41 • Additional access could make this portion of 22.5 acres a the site more feasible for development if SW Tech Center Drive was extended west and/ora t secondary access was added off of SW Hun- z' ziker (would be steeply sloped) • Subarea 2 does not easily accommodate larger office retail or other com- mercial industrial, buildings due to topography con- ... straints and access. Smaller buildings with less 999 > i pt intensive access needs (such as multi-family z _ housing and small scale office uses) are better suited to the steep slopes, significant number i (� ° I of trees and surrounding residential uses. �' y i Fields Trust February 13,2014 Note: This plan is not intended to be a proposed development plan for the site. It is intended to serve as an example of how the site could be developed to maximize employment and support residential uses in a way that would be A Hypothetical Marketable, Site-Appropriate Development Concept* feasible under current market conditions. ur Based on previous market studies and develop- ment options available on the property over the 7Truck uildings/Uses (Approx.) past few years, participants at the two workshopsi held in Januar 2014 determined that a h SF Industrial (43,500 SF Buildings) M, Y hypotheti- cal, cal, marketable plan is needed to determine the SF Flex/Commercial (One 2-story building)capacity of the subareas to accommodate themaximum amount of employment lands for the SF Multi-Family ResidentialSF Buildings)site given size, slope, location, and configuration.This concept plan represents a hypothetical, mar- cessketable development concept scheme. Specificccessuses and tenant types have not been identified; € " +e,•� � Y# , the intent was to identify the most appropriate Existing and Potential zoning and use designation that could be sup- Future connections41 r , � ., ported by the development sector and would sup- from Public Streets port the City's need for maintaining and increas- ing employment lands in the district. ON's i t') ON E z • E This potential site plan accommodates a mix of employment Intense flex/light Industrial build- 14, VIA AppCOx. . j ings, office uses, and multi-family residential �'% 'gry , r M • Subarea 1 could accommodate several poten- � _• ."F` r �1 r: ,€ , r y„ 4 acres a teal uses, but the high demand for small Indus- w trial spaces was determined to better meet the .,. . ♦ ,,. r- r market demands and regional industrial land needs .. • Subarea 2 is less flexible due to constraints s - mentioned previously in this analysis. This area was deemed appropriate for providing f Jk needed housing or other smaller footprint r uses on steepest slope areas with the intent of preserve as many mature trees around develo- ;xr ment as possible n, y 7AW * L r a r• , , 9 A, Fields Property Development Analysis 2130474.0 a Public Improvements Identified to Support Maximum Potential Development Concept ASSUMPTIONS: Transportation Imrpovements • Subarea 1 can be accessed from SW Wall i Public Street Improvements Required Street (currently private, unimproved) Off-Site Improvement (Requires adjacent property • Subarea 2 can be accessed from SW Hunziker owner cooperation) Road at top of hill (auto access only) and from a potential future connection along SW Tech Potential Future oft-site Improvements o Center Drive at the southern propertybr NECESSARY IMPROVEMENTS: 1_0 110 • Connect SW Tech Center Drive at the south- east corner of the site to SW Wall Street (make SW Wall Street public). Cannot be done in cur- p ' 110 rent configuration; options include: ��' 0t • SW Wall Street changed to Local Indus- :C� `� •�. trial/Commercial to match SW Tech Center Drive • Remove rail spur, install standard Minor �k Approx. ,, Collector street improvements .C\ec; +�- � 1i �,�. � 20acres r • Potential need to install traffic signal at SW Wall Street/SW Hunziker V7 Approx. :' Add 1 a-r x- POTENTIAL OFF-SITE IMPROVEMENTS: <7'22.5 G`,� acres " '�- io • rove intersections of SW Hunziker Road traffic Improve ��� `." ���. �� signal? and SW 72nd Avenue/SW Hunziker Road/SW - Hall Boulevard • Pedestrian/bike connection over tracks via ped/bike bridge to public open space to the south I • �1 ,� zz 4j o I r e AM loo . . v v Ic . s , vN O 4- 05 05 Fields Trust 111 . 3 ZONING OPTIONS The following epresents the findings of two workshops held in January 2014, and includes recommended zoning options to achieve the highest and best use of the entire Fields Property Potential Zoning Conducive to Marketable Development Concept • The site currently is zoned a mix of I-P, C-P, Proposed Zoning/Uses and R-3.5 Most of the site is zoned I-P; rest- I-P Zoning (Approx. 20 Acres) / dential uses not allowed. The proposed mar- ketable scheme includes rezoning a portion of MUE Zoning (Approx. 223 acres) the site to reflect market conditions and land suitability. Possible uses include work-force `" housing on the steepest portion of the site to support employment lands. RAS I-PIA 1 // ;...,. r t - SITE MUE axe LEGEND siw A TO Zoning District _ •. / I. -D 2.`�. ; acres R-3.5 R-25 27 fc. _j_/ ®MU-CBD W Q S-.. "�✓TpO R-12 R-12 �Y /f J ?i7+ 27 � 71, R-25 v' I-P R-3.5 RLs - ,. ��h�.5,,\ ✓ H, • Zoning that would accommodate the pro- posed marketable development concept IJor include: �, A-- • Subarea 1: Remain I-P ; • Subarea 2: Remain employment-focused z U) , land but allow residential through MUEzon- = I ing. g I U ; V � Ito I • Fields Property Development Analysis MR RECOMMENDED ZONING FOR RECOMMENDED ZONING FOR ECONOMIC BENEFIT TO THE SUBAREA 1: REMAIN I-P SUBAREA 2: CHANGE TO MUE CITY OF TIGARD WITH REZONE I-P: MUE: Land Value: Industrial Park District Mixed Use Employment District EXISTING LAND VALUE: Tigard Development Code 18.530.020: Tigard Development Code 18.520.020F.• Current land value provides property taxes to The l-P zoning district provides appropriate loca- The MUE zoning district is designed to apply to a the City of Tigard of roughly $90,000/year tions for combining light manufacturing, office majority of the land within the Tigard Triangle, a LAND VALUE WITH PROPOSED DEVELOPMENT: and small-scale commercial uses, e.g., restaurants, regional mixed-use employment district bounded Land value based on proposed development personal services and fitness centers, in a campus- by Pacific Highway (Hwy. 99), Highway 217 and densities described in this exercise would like setting. Only those light industrial uses with no 1-5. This zoning district permits a wide range of generate approximately $700,000-$800,000/ off-site impacts, e.g., noise, glare, odor, vibration, uses including major retail goods and services, year. (Value based on assumption of $20/1M are permitted in the l-P zone. business/professional offices, civic uses and hous- of development cost) ing. ALLOWED USES INCLUDE: Permits/System Development • Some civic/institutional (emergency services, ALLOWED USES INCLUDE: public support) • Multi-family housing (Max 25 units/acre) Charges: • Commercial (lodging, entertainment, repair- • Commercial/retail support (lodging, eating/ ONE-TIME DEVELOPMENT FEES TO THE CITY oriented, fuel sales, office, self-service storage) drinking, sales-oriented, personal services, Based on the cost of development and pos- repair-oriented) sible densities proposed in this exercise, the • Industrial (light industrial, R&D, wholesale permit fees and system development charges sales) (Warehouse not permitted) • Civic/institutional: utilities, recreation, cultural at time e development would likely be CONDITIONAL USES INCLUDE: institutions, day care, clubs/lodges between $4,000,000 and $7,500,000. • Some civic/institutional (utilities, recreation, CONDITIONAL USES INCLUDE: day care) • Limited industrial (light industrial, R&D, ware- Employment Opportunities: • Commercial (eating/drinking, sales-oriented, house) (Based on possible densities and uses proposed in the co/- personal services, vehicle servicing) laborative workshop that would meet market needs) LIGHT iNDUSTRIAL/fLEX OFFICE JOBS: • 400-700 Light Industrial/Flex Office jobs, con- centrated on the I-P subzones identified in this NOTE: THE MUE ZONE IS DESIGNED TO APPLY TO AREAS exercise. OFFICE JOBS: WHERE EMPLOYMENT USES ARE CONCENTRATED AND 150-250 Office Jobs, assumed to be provided ENCOURAGED. BY CHANGING A PORTION OF THE I-P ZONE in both the I-P and MUE subzones identified in TO MUE THE PROPERTY WILL BE MORE APPROPRIATELY this exercise. WORK FORCE HOUSING: � e ZONED TO BE COMPATIBLE WITH THE R-3.5 ZONE T O THE 300 possible new multi-family housing units to _611t Nk POP tir EAST AS WELL AS THE I-P ZONED PROPERTY TO THE WEST. support employment lands a THE MUE ZONE ACTS AS AN APPROPRIATE TRANSITION (NOTE: SFallomedper th numbers are based on Building adbuilding and user/SF allowed per the International Building Code in conjunction with information provided b developers with ZONE FROM SINGLE FAMILY RESIDENTIAL TO LIGHT y p �� �' similar scale developements in the area.) �. INDUSTRIAL/COMMERCIAL DEVELOPMENT Fields Trust February 13, 2014 111 ,. 4 Over the course of the past few years, several development feasibility studies have been completed by developers looking at the property. Outlined below are highlights from various cost studies completed by PacTrust Development. Note that this data is preliminary and is was developed in order to determine development feasibility with the site being developed as it currently is zoned (I- P), and also to look at feasibility with approximately 50% of the site being rezoned to MUE. These numbers are based on current market values and are estimates only for purposes of determining development feasibility, return on investment, and economic value to the City of Tigard. EXHIBIT A below outlines the site conditions as they exist today in section. Undeveloped. EXHIBIT B illustrates a section through the site highlighting the maximum development poten- tial for the site with the site's current zoning (I-P). With the current zoning and market conditions, approximately 20 acres could be developed with a total build out of approximately 175,000sf. The total site coverage would be a maximum of 20% o t-P Zone o R-3.5 Zone Slope < 10/ Slope > 10/ of the site. The estimated cost of development Existing excluding land costs is $22,100,000 ($126/sf) Residential- including necessary off-site improvements, nec- essary grading, permits and fees. The extraor- Existing v = 66 � •T dinary costs, due to site constraints, that must Industrial — be absorbed by this development are between Building o $2,600,000 and $3,000,000. That equates toQ an additional $12-$15/SF of additional cost that V)F-1 _ must be added on to the building costs, creating Exhibit A: Existing,Site Condition a development cost premium of 25-40%. In thiso I-P Zone o R-3.5 Zone scenario, and even without the cost of land pur- Slope < 10% Slope > 10% , chase, the project is not financially feasible. (Refer Existing t I Residential to the separately attached cost comparison of Business Park Development Costs). 66' Existing +- _I N Industrial — EXHIBIT C illustrates a section through the Building o site highlighting the proposed zone change for ---° 3: Q - - - - - approximately 22 acres as well as potential devel- 1 N - - - - - opment as allowed in the MUE zone. With this Exhibit B: Maximum Development for I-P Zone use w/o rezone-NOT financially viable Possible TreeBuffgr proposed scenario, development costs are shared I-P Zone MUE-2 R-3.5 Zone by feasible development across the full extent Slope < 10% Slope > 10% of the site, bringing the extraordinary site devel- j Existing Resident,al opment costs to approximately $750,000. The � same industrial development identified in Exhibit v B could occur (175,000sf) on the 20 acres of I-P Existing N ' 66' zoned property, but an additional 22 acres of MUE Industrial development could occur on the easternportion Building o of the site, bringing the estimated cost of devel- opment in line with market demands and creat- F7_1 Ln ing a viable development solution that will bring Exhibit C: Possible Development for property with partial MUE-2 Rezone development to employment lands in the City of Tigard. Fields Property Development Analysis 2130'474.01 ■ 111 . 5 How can the owner and development team work with the City to develop the Fields Property such that employment lands can be created? Highest and Best Use of the Property (based on the market, site features, and regional needs): highest and best use: "the reasonably probable and legal use of vacant land or an improved property, which is physically possible, appropriately supported, financially feasible, and that results in the highest value." — Appraisal Institute, The Appraisal of Real Estate Primary Constraints: Possible Solutions: 1. Slope and configuration of site not suitable 1. Re-zone a portion of the site for less inten- for market-scale industrial/employment uses sive use that better accommodates smaller (as majority of site is currently zoned) building footprints and surrounding residential uses. 2. Slope of SW Hunziker Road not adequate for 2. Re-zone site for more appropriate use and truck access on north side of site allow secondary site access along Hunziker 3. TSP designation and width of SW Wall Street3. Re-designate SW Wall Street to classification (private) between adjacent buildings and rail JPP_ with narrower standard spur not wide enough for City Collector stan- dards (SW Wall Street designated as future Collector on City's TSP) 4. Limited Freight Access and Connectivity 4. Connect SWWall Street to SW Tech Center Drive Fields Trust February 13,2014 111 . 6 PacTrust Development has successfully developed over 10,000,000 square feet of industrial and flex/office space, with most of that happening in and around the Willamette Valley area. In an effort to realistically look at business park development costs of the Fields Property in comparison to other recently developed properties in the area, PacTrust has assisted the team with compiling actual development costs of a recently completed industrial flex/office project of similar scale and density to estimated development costs on the Fields Property in Tigard. FIVE OAKS WEST BUSINESS COMPARISON OF BUSINESS PARK DEVELOPMENT COSTS: PARK, HILLSBORO, OREGON FIVE OAKS WEST BUSINESS PARK VS. FIELDS TRUST PROPERTY Five Oaks West Business Park is located in the Development Coverage: Five Oaks West, Beaverton: Fields Trust Property, Tigard: high-tech area of Hillsboro, Oregon. Currently a (Includes land area readily available and 34% Coverage 21% Coverage 34,875 square foot flex building is operational and appropriate for development) a pre-leased 54,000 square foot building is under construction. The total developed square footage is approximately 167,000 square feet. Fees and Permits: Fees and Permits: Fees and Permits: Soils and Environmental $.30/sf $.54/sf Architectural and Engineering $2.43/sf $2.87/sf Landscape Architecture $.17/sf $.39/sf Surveying $.19/sf $.16/sf Testing ,. $.32/sf $.35/sf Fees and Permits $6.87/sf $8.12/sf 4 � Total: $10.28/sf $12.43/sf Construction Costs: Construction Costs: Construction Costs: ------------- ---------- Offsite and Streets $.38/sf $5.77/sf 'New Public Street needed Sitework $7.35/sf $25.97/sf Significant slopes/grading V4kF4 raat n ,C-c - Landscape $2.10/sf $4.68/sf Coverage Hard Construction $26.61/sf $29.87/sf Price Increases Contingency $2.31/sf $8.26/sf 10% vs 5% Total: $38.75 $74.55 Capitalized Interest: $1.16/sf $2.61/sf r;urK Tenant Improvements: $11.75/sf $11.75/sf Cost Prior to Land Purchase: $61.94 $101.34 The cost/sf of building development for the Fields Property is estimated to be 61% more than a typical business park development of similar size and density. Fields Property Development Analysis p y p _. .. 2130474.01 ■