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950 Spruce Street — 725 Front Street - Attachment to LRC Application for Assistance Page 3 of 3 <br />The property will be leased as a speculative commercial and residential project. Speculation in <br />this market with existing vacancies downtown is somewhat risky at this point in time. <br />Construction and other development costs have increased substantially in the past few years, <br />and lease rates in downtown Louisville have not kept pace with that inflation. Land prices have <br />inflated in downtown Louisville as well, making it cheaper to locate in nearby cities with lower <br />property costs and some communities offering incentives for businesses to locate there. <br />With a relatively low return on investment, this project has to be seen as a long term investment <br />by the property owner, so any assistance that can help to offset the substantial capital <br />investment will help to manage this risk. <br />N:\ADMIN_Current\DOCS_ADMN\...950 Spruce Residential\\LRC-Application for Ass istance-950Spruce_Street-Attachment.doc <br />Agenda Packet P. 25 <br />