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1. Replacement Cost Approach--Theater
Under the replacement cost approach, Carneghi estimated the
value of the underlying land to be $660,000 (rounded), using 5
sales of commercially-zoned vacant land located in Redwood City
as comparables ($25.00 per square foot of land area times
26,52829 square feet). Carneghi adjusted the sales prices on the
basis of location, size, site configuration, financing, and date
of sale. Carneghi determined the gross building area of the
theater component to be 24,358 square feet, which he found was
58.16 percent of the total gross building area of 41,876 square
feet. Carneghi thus allocated a land value of $383,902 (58.16
percent of the $660,000 land value) to the theater.
Carneghi next estimated the total direct and indirect
construction costs of the theater to be $4,829,000, based on the
Adamson estimate. Carneghi did not subtract the cost of the
personal property from the Adamson estimate. Carneghi next added
7 percent for “General Conditions”, 5 percent for “Contractor’s
Overhead and Profit”, and 12.5 percent for “Developer’s Profit”,
for a total replacement cost new of $6,103,554.
29 Carneghi's estimate uses 24,528 square feet of land area.
Ingram/Ewing and Mitten/Reynolds use 26,583 as the number of
square feet of land area. Mansbach, respondent’s expert, uses
the figure 26,584 as the square feet of land area. Carneghi did
not explain this discrepancy in his square footage of land area.
At $25.00 per square foot, using what we find to be the correct
total square footage of the property, 26,583, Carneghi’s land
value estimate should be $664,575. However, when rounded to
$660,000, we find the error in Carneghi’s square footage of land
area to have no effect on his estimate.
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