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• <br /> • <br /> Midwest Building Components, Inc. . <br /> E <br /> ■ 7210- 163rd Avenue NW, Ramsey, MN 55303 • Phone: (612) 576-3926• Fax: (612)422-9172 <br /> Paul Steinman <br /> City of Elk River <br /> 13065 Orono Parkway <br /> P.O. Box 490 <br /> Elk River,MN 55330 <br /> June 29, 1998 <br /> RE: Proposed King&Main office building requests. <br /> HRA members <br /> Thank you for taking the time to review Midwest Building Components, Inc.'s information on <br /> the proposed office building at King&Main. Additional information presented today on the <br /> buildings design and operational costs will both answer and ask a myriad of questions. With <br /> these questions come a challenge requiring a concerted effort on the part of NEC,Inc. and the <br /> . HRA to find solutions to those questions. <br /> The MBC,Inc. building is paralleling the costs of a wood structure. The other structures, glass <br /> &metal and block&brick are 11%and13%higher respectively. <br /> The challenge associated with this project come in the need for a correct mix between parking, <br /> building square foot area,market rate rents, debt servicing and square foot construction costs. <br /> Market rate rents dictate operating income,which in turn provide debt servicing which again <br /> dictates construction costs. <br /> A look at operational cost breakouts reveal a marginal return on investment. These costs are <br /> also based on a less than market rate for building construction and do not include land costs. <br /> With this marginal return on investment all available development vehicles will need to be <br /> investigated to provide a solution to allow the King&Main building to be erected. <br /> This letter and related information is MBC,Inc's. formal request for the following: <br /> • MBC,Inc. requests continuing dialogue on potential financial packages to improve the <br /> viability of the project. <br /> • MBC,Inc. requests a nine month exclusive right to develop the property located at the <br /> intersection of King&Main. <br /> • MBC, Inc, will install a sign on the property seeking inquiries for additional tenant leads. <br /> Sincerely <br /> • <br /> Terry Meech <br /> President Midwest Building Components, Inc. <br />