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3. Development Feasibility AECOM estimated the residual land value (RLV) of the land uses according to the development scenarios of both the Project and Industrial Prototype and considered the projected market demand for these land uses in the City of Santa Ana and representative comparable districts of Orange County. This analysis allows a comparison of the highest and best use for the Site, from a development perspective, and the financial implications of development under current market conditions. The use of the Industrial Prototype is to compare the impact of the Project to that of the Industrial Prototype. The feasibility analysis of the various land uses is based on a static pro forma model, which simulates the economic conditions a developer would consider in deciding whether to pursue a project. As such, the model includes typical direct and indirect costs a developer would incur, market revenue potential, and a standard rate of return a developer would expect as compensation. Total estimated project costs (including the assumed return) are subtracted from estimated project revenue to arrive at a net residual land value. Figure 14 details a simplified infographic of RLV. If the net value is positive and high enough to pay for land at current market rates, the project is considered financially feasible. Otherwise, the proposed project is considered infeasible. This approach generates a broad estimate of development feasibility, which is acceptable for planning -level analysis. Figure 14: Residual Land Value uevempmem LUUs Table 15 shows the summary results of the pro -forma analysis and estimation of RLV for both the Project and Industrial Prototype. Assumptions about rents for the various land uses were derived from the market assessment and selection of representative projects in Orange County. RLV calculations are sensitive to fluctuations in the market for both rents and development costs (hard and soft) and offer only a broad estimate of actual market prices. Table 15: Residual Land Value Summary Residual Land Value Summary The Pro act Industrial Prototype Site Acres 14.7 14.7 Floor to Area Ratio (FAR) 1.80 0.45 Gross Building Area (GBA) 1,150,000 355,000 Estimated Total Value $509,000,000 $65,406,977 Estimated Total Costs $444,000,000 $48,490,005 Residual Land Value RLV $65,000,000 $16,916,972 RLV per Land SF $100 $26 RLV per GBA SF $55 $56 Feasible Yes Yes Note: Numbers are rounded and my not sum Sources. Costar, CBRE, RS Means, Orange County Register, AECOM 75C-647