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The Eastdil report concluded that, under the most likely
scenario, the net present value of the additional income to be
generated by the Atrium, both directly from retail space in the
Atrium and indirectly from increased rents from 1UBC and 2UBC,
was $6.2 million and could not alone justify the $25 million cost
of constructing the Atrium. The Eastdil Report, however,
qualified that conclusion as follows:
Notwithstanding the significant construction risk
associated with building the atrium, there may be
reasons why the Bank should consider proceeding with
the project. Successful completion of the atrium will
enhance the Bank's image in the community and give it
greater recognition in the region. It is not realistic
for us to place a dollar value on these benefits.
Undoubtedly they are substantial and could produce a
direct and positive impact on the Bank's business.
More significantly, if the Bank does not complete
construction of the atrium, its image in the community
may be tarnished. It is clear that the Bank has an
obligation to its partners and to the tenants in One
United Bank Center to complete construction of the
atrium facility, or, if possible substitute another
amenity to be completed at a later date. If the atrium
is not built, the building owners run the substantial
risk that at least some tenants will sue to reduce
their rents or get out of their leases altogether. The
cost of securing a release from the atrium obligation
could tip the balance in favor of completing the atrium
facility.
The Eastdil report recommended “against building the atrium if
the Bank can obtain release from its commitment for less than
$22 million less whatever `recognition value' the Bank believes
the atrium would produce.”
5. The Committee Meeting of October 24, 1984
At the meeting of the Committee on October 24, 1984, Bank
management proposed to offer 2UBC and the Ground Lease for sale
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