Agenda - City of Santa Monica

To: Steve Mizokami, City of Santa Monica April 23, 2013
Subject: 1320 2 nd Street: Value Enhancement & Fiscal Impact Analysis Page 5
Indirect Costs
KMA utilized the following assumptions to estimate the indirect costs for the Base Zoning
Alternative:
1. The architecture, engineering and consulting costs are estimated at 8% of direct
costs.
2. City staff estimated the public permits and fees costs at approximately $14.05
per square foot of GBA. 2
3. The City’s affordable housing in-lieu fee is estimated at $13.68 per square foot of
net residential area.
4. The taxes, insurance, legal and accounting costs are estimated at 3% of direct
costs.
5. The marketing and leasing costs are estimated as follows:
a. The residential marketing costs are estimated at 2% of direct costs; and
b. The retail leasing commissions are estimated at $3.00 per square foot of
retail GBA.
6. A development management fee estimated at 4% of direct costs is provided.
7. An indirect cost contingency allowance equal to 5% of other indirect costs is
provided.
KMA estimates the total indirect costs at $1.47 million
Financing Costs
The financing costs for the Base Zoning Alternative are estimated as follows:
1. The construction period and absorption period interest costs are estimated at
$469,000. These costs are based on the following assumptions:
a. The construction period interest costs are based on a 5.5% interest rate,
an 18-month construction period, and a 60% average outstanding loan
balance.
2 City staff provided KMA an estimate of the public permits and fees for the Proposed Project.
KMA extrapolated this estimate to estimate the public permits and fees for the Base Zoning
Alternative.
1210011_v4;SM:TRB
19305.013.001