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• Landscape Plan. The final change on the new plans includes updating a tree species proposed on the Nevada Street (south side) of the project. One of the tree species was changed from Pine to Brisbane Box. Brisbane Box trees are evergreen trees that will enhance the yearlong screening and mitigation along the Nevada Street frontage. The project would continue to be generously landscaped along the Nevada Street frontage and include screening tree plantings along its perimeter. Staff supports the proposed change. As proposed and conditioned, including modifications made to the project during the course of review, the Commission found that the proposed project was appropriate and was able to make all of the findings/criteria for approval of the Conditional Use Permit and Design Review applications. Staff finds the modified design submitted on December 8 would further support the findings and criteria for approval. Project Benefits and Amenities As described above, the project approved by the Planning Commission includes several proposed benefits/amenities, which are items offered above and beyond what would typically be required of the project. These amenities are required to support the requested increase in FAR from 0.35 FAR to 0.98 FAR. While the relevant General Plan Program (Land Use Element Program 15.5) is clear that such amenities may be required, it does not provide a quantified framework to determine whether they are "sufficient" to justify the increase. Value of Proposed FAR Increase. During and since the Planning Commission's consideration of the project, it has been suggested that an analysis of the relative financial benefits of the increased FAR to the applicant, versus the value of the proposed amenities would be beneficial, to help determine whether these benefits would be considered "sufficient." Staff has undertaken this analysis based on a review of the typical methodology used to evaluate the so called "windfall" value creation (residual land value) from the additional FAR bonus. This included a review of inputs such as the expected return to the applicant in rental revenue from the additional square footage (including adjustments for vacancy and operating expenses), as well as the costs of constructing the new building, reflecting site development costs, soft costs, and other project costs (including contingency). Staff requested a courtesy review of both the methodology and key assumptions by Economics and Planning Systems (EPS), a consultant who has extensive experience in this field and who has worked with the City on a number of past projects, who confirmed that the estimates developed by staff appeared reasonable and in line with industry standards. In developing these estimates, it is important to note that small adjustments to the inputs (e.g., square-foot cost of construction, rental rates for units, etc.) can cause quite significant shifts in overall valuation. For this reason, staff aimed to use reasonable, but not overly aggressive assumptions. For example, building construction costs were estimated at $175/square foot, in the mid-range of those quoted in various "book" Page 7 of 18