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Example Calculation of Proposed Fee
Use of Air Rights for Passageway Construction
A developer proposes to construct a multi-level passageway to connect to two portions
of a, proposed office and retail project that will be developed on parcels separated by a
City -owned alley. The facts salient facts of the situation are as follows:
• Parcel 1 is comprised of 30,000 net square feet, fronts on an arterial roadway. The
applicable FAR allows for the construction of 300,000 square feet of building space
inclusive of parking. The parcel has an appraised land value of $3,000,000.
• Parcel 2 is also comprised of 30,000 square feet, fronts on a collector road. The
applicable FAR allows for the construction of 150,000 square feet of building space
inclusive of parking. The parcel has a current market land value of $1,500,000.
• The proposed passageway will be comprised 2 levels of 400 square per level, or 800
square feet in total.
Step 1: Determination of Land Value per Building Square Foot
A. Total Market Land Value = $3,000,000 + $1500,000 = $4,500.000
B. Total Building Square Footage= 300,000 S.F. + 150,000 S.F. = 450,000 S.F.
C. Land Value per Building Square Feet = S 4,500.000 = $10
450,000
Step 2: Calculation of Air Rights Value
D. Full Air Rights Value = $10/B.S.F x 800 S.F. = $8.000