Reference no: EM13395697

The small, three-story brick building was slowly being dwarfed by the new, gleaming white, brick-and-glass office and apartment tower going up around it. The upper offices of the new structure looked out over the city, onto the great prairies and the North Saskatchewan but also down on the old roof of the old building. The little store, housing a small chemist's shop with offices and apartments on the top two floors, had occupied the corner of 104th and Main Street in downtown Edmonton for over a century. Its long time owner, the seventy-year-old chemist, had refused to deal with the devel¬oper, insisting that he would run his business until he decided to retire, and not sell out to some "greedy, grasping real estate type."

Across the street, high on the 20th floor of the Great North Trust Bank building, Bob Hanrahan, a youthful financial broker-sales representative for British American Trust Investments, watched impatiently as the tower reached his level and continued upwards four more stories.

Finally, as the last snows of the season left the prairies and the skies turned a deep blue filling his office window, Bob phoned the owner of the new building. Jarman Construction was the island's biggest real estate developer and construction company. Mr. Ricardo Jarman had decided to invest his money in a large mixed office and apartment complex in the city that he was just completing.. He already had a waiting list of signed tenants who were interested in long-term leases for over half the building.

"Mr. Jarman, it's Bob Hanrahan at British American," he smiled as pictured the industrialist, a large well-built ex-fisherman from St, Kitts.

"Can we get together later today?"

"Hi, Bob. How are things at B.A. How's Billy Connors doing?" Jarman was referring to B.A;s chairman, a golfing buddy. Jarman Construction did most of their financing through the Trust, who Jarman regarded as ‘a great, honest company.'

"What can I do for you?"

"It's a little business proposition I have arranged. I think you have much to gain from it. Can we get together today? What time should I come over?"

"Well, let me see here, now. Okay, how about five o'clock in the new offices."

Bob was pleased with himself. A few months ago he had approached the old chemist with a proposal to lease the space on his roof. Following a lengthy negotiation he had obtained a locked-in, 20-year lease for the roof space on the small building. An engineering report on his desk in¬dicated he could place a 15-ton, neon-and-steel billboard sign on the roof. It would beam down 104th street, and be seen by 10 000 people daily. It would rise halfway up the face of the new tower, blocking out a selective view of the main city street and the northern panorama in the distance. Bob's plan was to sell the lease to Mr. Jarman for $100 000.US.

Questions

1. What kind of entrepreneurial activity is Hanrahan engaging in?

2. Is his valuation of $100 000 realistic?

3. What might be your observations regarding business ethics? Environmental concerns?