A Realistic Alternative  to the ‘Clearly Invalid’ analysis of the “Revised As of Right CF/Residential Development” condominiums shows a Return on Equity of 20%.  [See explanation of Return on Equity on the VastPastNY>BSA page.]   In order to achieve a 20% return, the developer cannot pay the arbitrary $12,347,ooo assumed by CSI’s ‘Clearly Invalid’ analysis; he can afford $3,046,000.  That is what the rights are worth to the developer who is buying the rights, regardless of what the seller would like to receive.

The spreadsheet below uses figures taken from the CSI analysis with one other exception.   It uses 90% leveraging because that was the amount chosen by CSI for their proposed New Building.

The 90% leveraging consequentially increases the Loan interest cost by $26,000.  The 38% return over the project’s 23 months is normalized to 12 months for an annual Return on Equity 0f 20%. The other figures were taken directly from the Freeman/Frazier  Associates letter dated 8 July 2008. 

Even More Realistically,  since the “Acquisition Cost” is actually a phantom expense that will not show up on any entity’s financial statements, it should be ignored altogether.  In that case the ROI rises to 112%.   (The graphical analysis of Scheme A in ‘Money Flows’ page shows 110% because of rounding and source version differences.)