Each of the other analyses look only at the value of parts of the New Building, as though the other parts had no value to Congregation Shearith Israel, as was indeed claimed by CSI in the Freeman Frazier letter dated December 21, 2007.   Imagine--investing $11,160,052 in hard construction costs (same letter) to erect a building with no value!*

While a non-profit institution may be exempt from a BSA finding of reasonable return under Zoning Resolution 72-21 finding (b)**, the problem arises of what constitutes an economic return for a dual-use building.  As explained in The Issue at the right, the artifice of allocating financial figures to the uses does not adequately describe reality. 

An alternate method of determining economic return is to aggregate value of the property upon completion.  That asset value produces a 34% return on the project investment.

The New Building’s condo space is valued by CSI at about $1200/sq.ft.  The Community Facility is valued at a lower value of $100/sq.ft as explained in the sidebar. 

The Issue.  Every part of a building depends on others.  The lower structure’s mass supports higher floors;  a roof protects all floors not just the top one; electricity and water flow from the street through common pipes.  The building fabric cannot be unwoven with any reasonable amount of  arithmetic. In the CSI case it is even more difficult because the various uses are intermingled.  In Scheme A there are income-producing classrooms, residences and mission related activities on floors 2-4 and in cellers, and condominiums on floors 5 and 6.

The Solution.  Consider the New Building as the single project that it is.  Put a big baggie around the project, measure what goes in and what comes out at the end.  The investment that goes into the project ($22,887,000) is subtracted from the sum of the end values ($37,840,000) to arrive at a Return on Investment of 34%.

* See also notes on value of the Community Facility under CSI Issues.

** See also notes the 72-21(b) exemption under CSI Issues.