Costs

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Tentative cost for necessary infrastructure upgrades that would bring all need utilities to the building
could be accomplished for $2.4 million, work must be completed within 12 months (page 14)

Expect owners to accept an offer totalling $25 million including real estate and legal fees.(page 15)

Assuming $5,000,00 in fees and down payment can be paid up front.

The owner is prepared to hold a 10 year, $20 million mortgage at 5% per annum. Minimum monthly
payments would be approximately $84,000 or $1,000,000 annually.(page 15)

The Site has a 97,000 sq foot footprint however it is possible to add a second floor thereby doubling the
available square footage to 194,000 sq feet. All cost estimates below are calculated uses 194,000 square
foot building



Capital expenses

    1.   Site Purchase - $25 million (pg 15)
    2.   Professional Fees – I have not found any information in the handout for this cost, any ideas?
    3.   Site Infrastructure – 2.4 million (pg 15)
    4.   Renovation - $48.5 million per work sheet $250 per square foot)
    5.   Fittings and Fixtures – 9.7 million per work sheet $50 per square foot
    6.   Specialized Lab Costs – to be determined
    7.   Allowance for inflation – worst case the project takes two years to complete we will calculate
         this number by inflation rate x the estimated value of the uncompleted work + any
         contingencies



    Total Capital expenses $84.9 million not including items 2,6 and 7.



    Capital Revenue

    1.   Government Grant for new campus - $20 million (pg 7 and 17)
    2.   Share of Academic Capital Grant - $2.5 million (pg 16)
    3.   3. Share of Building Retrofit Grant – I cannot see this amount anywhere, ideas?
    4.   Other Capital Revenue – to be determined



    Total Capital Revenue $22.5 million not including items 3 and 4
Total short fall in funding - $62.4 million



The seller of the site has indicated a willingness to provide a mortgage of up to $20 million at a cost
of 6% of the total cost of the loan.(pg 5) I’m not sure if this means a 6% interest or a flat cost of 6%.

Using a mortgage calculator a $20 million mortgage amortized over 30 years with an interest term
of 5 years at 6% the monthly payments would be $118,964.68. The total payments would total
$42,827,286.26 and the total interest paid would be $22,827,286.26
(http://www.mortgagecalculator.net/). I am not sure if this is the proper method of calculating this
cost, help!

If it is a fat 6% the cost is $1.2 million



To complete this portion of the assignment we will need to determine what types of classroom we
will need. The installation of labs will increase the costs.

				
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