- 47 - 1. Replacement Cost Approach--Theater Under the replacement cost method, Mitten/Reynolds estimated the value of the underlying land to be $770,000 (rounded), using seven sales of commercially zoned vacant25 land as comparables ($29.00 per square foot times 26,583 square feet). Mitten/Reynolds made adjustments to the sales prices for financing, date of sale, location, block orientation, configuration, size, existing improvements, and buyer motivation. Mitten/Reynolds allocated 15,929 square feet of land area to the theater, for a land value of $461,000, and 10,654 square feet of land area to the retail/office component, for a land value of $309,000. For the replacement cost of the theater, Mitten/Reynolds used the cost estimate in the Adamson report, which they adjusted by: (1) Subtracting $92,000 for the personal property donated to the Players; (2) adding the costs of nonconstruction items (design costs, permits and fees, financing cost, etc.); and (3) adding an entrepreneurial fee of 10 percent. Mitten/Reynolds estimated the total replacement cost of the theater, excluding the land, to be $7,000,862, computed as follows: Total Direct Construction Cost $4,829,000 Deduction for Non-Operating Personalty92,000 Adjusted Direct Construction Cost 4,737,000 General Conditions (7%) 331,590 25 Mitten/Reynolds’ Comparable #4 was sold with an existing improvement, which was subsequently demolished by the purchaser. Consequently, Mitten/Reynolds made an upward adjustment of the sales price.Page: Previous 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 Next
Last modified: May 25, 2011