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April 4, 1994 SHARP & ASSOCIATES 10907-93rd Avenue North Maple Grove, MN 55369 612-425-2002 FAX 425-6428 Mr. Ryan Schroeder - City Administrator City of Ramsey 15153 Nowthen Boulevard N.W. Ramsey, MN 55303 RE: Proposed Multi Tenant Industrial Building in the City of Ramsey Dear Mr. Schroeder: Since our meeting at your office in mid March, I have reviewed the proposed construction of a multi tenant office/warehouse on Industry Avenue as well as various inquiries to prospective tenants. It appears the demand for this type of space exists in the area. My concerns are producing a.durable product with an attractive facade at a price conducive to an acceptable lease rate, and the installation of Tungsten Street on the east side of this property for utility access and enhancement of the corner. I have attached a tenative construction statement based on bids received and soft costs for utilities reviewed with your staff. With tax increment finRncing, I believe this project would be feasible. My discussions with prospective tenants have shown acceptance to lease rates in the area of $3.25 per square foot on a triple net basis. The costs as out- lined in the construction statement would reflect a triple net price of $A.50 per square foot. When adding taxes, insurance and other expenses, 'it does not fall within the budget of the small user market. Our experience with this type of incubator space in the Osseo/Maple Grove area has been extremely fruitful in that many of the small businesses grow to require more space and prefer to stay in the same area where they have developed. Our total cost of development for the 45~640 square feet will run $1,765,000.00 which reflects an average cost of $38.65 per square foot. The market will not support a cost factor much over $28.00 per square foot or about $1,280,000.00 in total costs. IO