HomeMy WebLinkAbout26 - Purchase of 2807 Newport Boulevard for Relocation of Fire Station No. 2P0 m CITY OF
z NEWPORT BEACH
cl't City Council Staff Report
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September 12, 2017
Agenda Item No. 26
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: Seimone Jurjis, Community Development Director
949-644-3232, sjurjis(o-)-newportbeachca.gov
PREPARED BY: Lauren Wooding Whitlinger, Real Property Administrator
PHONE: 949-644-3236, Iwooding(d_)newportbeachca.gov
TITLE: Purchase of Real Property Located at 2807 Newport Boulevard for
Relocation of Fire Station No. 2
ABSTRACT:
The existing Fire Station No. 2, located at 475 32nd Street, is at the end of its useful life,
does not meet operational needs for equipment, and is scheduled for replacement. The
existing site is small and not ideal for a replacement structure due to poor circulation and
lack of space for on-site parking for all personnel. Staff identified a larger property at 2807
Newport Boulevard that will fit a new fire station, provide proper pull-through circulation
for vehicles, and allow for on-site parking for all personnel. Staff has negotiated the terms
of a purchase and sale agreement to acquire the property for $4,000,000.
The purchase of the property may be partially offset by the sale of the existing site for
approximately $2,350,000 (the site's recently appraised value).
RECOMMENDATION:
a) Find the execution of a purchase and sale agreement is not subject to the California
Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) and 15060(c)(3)
of the CEQA Guidelines;
b) Authorize the City Manager to execute a purchase and sale agreement, and related
documents, based upon the major deal points outlined in this staff report to purchase
the property located at 2807 Newport Boulevard from MNG Newport Beach, LLC. For
illustration purposes only, a sample purchase and sale agreement is attached
(Attachment A); and
c) Approve Budget Amendment No. 17BA-006 in the amount of $4,010,000, transferring
money from the Building Excise Tax Fund, the Cultural and Arts Fund, and the
Facilities Financial Planning Fund, to fund the acquisition of the property.
26-1
Purchase of Real Property Located at 2807 Newport Boulevard
for Relocation of Fire Station No. 2
September 12, 2017
Page 2
FUNDING REQUIREMENTS:
A Budget Amendment is required to record and appropriate the property acquisition
expenditure, which, once approved, will be funded with $804,393.25 from the former
Cultural and Arts Fund, $900,000 from the Building Excise Tax Fund, and $2,305,606.75
from the Facilities Financial Planning Fund. The acquisition will not have a material impact
on the Facilities Financial Plan.
DISCUSSION:
Background
Constructed in 1953, Fire Station No. 2 is adjacent to the Lido House Hotel (now under
construction) on 32nd street. The existing site is approximately 11,612 square feet (sf)
(10,198 sf at the existing site, plus approximately 1,414 sf of the street which will be
incorporated into the site with the completion of the off-site improvements related to the
Lido House Hotel project) (Attachment C). Fire Station No. 2 is scheduled for replacement
in the Fiscal Year 2018 Capital Improvement Plan budget due to the age and condition of
the existing structure.
Existing Site Challenges
Fire Station No. 2 houses critical emergency response equipment not found at other
nearby stations. With one of two ladder trucks in the City, the existing Fire Station No. 2
site does not effectively accommodate the size and turning radius of the ladder truck,
which typically requires pull-through access (driving through the garage from the rear to
the front) to the garage bays. Currently, the ladder truck must back into the station, which
requires personnel to exit the vehicles, stop traffic, and direct the trucks to back into the
bay. Having personnel in the street directing traffic, especially at dusk and during
nighttime hours, places them at risk with approaching vehicles in addition to disrupting
traffic flows. Fire personnel have reported "close calls" with oncoming vehicles.
Completion of the Lido House Hotel is scheduled for early 2018, and will bring more
tourists and visitors unfamiliar with fire station operations to the streets around the station.
Fire Station No. 2 houses one of the City's three paramedic ambulances, and one of two
transport ambulances. Typically, ambulance vehicles park inside the station garage. At
Fire Station No. 2 the transport ambulance must park outside behind the station because
there is not enough room for the ladder truck, fire engine, and both ambulances inside
the garage.
Additionally, not all fire personnel are able to park their personal vehicles on the existing
site. Staff uses five parking spaces in the adjacent shopping center to park their vehicles,
but no long-term solution for off-site fire personnel parking has been found.
During the preliminary design phase for the station replacement project, it became clear
that it is likely impossible to combine a new building with pull-through access, and provide
the necessary on-site parking at the existing site.
26-2
Purchase of Real Property Located at 2807 Newport Boulevard
for Relocation of Fire Station No. 2
September 12, 2017
Page 3
New Location
Staff searched for larger properties in proximity to the current site, but no suitable
properties were for sale at the time. However, the McDonald's restaurant at 2807 Newport
Boulevard was closed, and a future retail project was advertised for lease at the site. Staff
contacted the property owner to determine if they were interested in selling the property.
The owners of the property purchased the site from McDonald's Corporation in June
2016. They planned to redevelop the site with a 6,000 sf retail center. When staff
contacted them in January 2017, they were open to discussing a purchase offer from the
City, as they had not yet started construction on the retail project. Staff began negotiations
in March 2017, and the property owners recently agreed to sell the property for
$4,000,000.
The property is approximately 0.3 miles from the existing fire station. The site is
considerably larger at 17,693 sf, and has street access on three sides including direct
access to both the north and southbound lanes of Newport Boulevard (Attachment D).
Emergency Services Response Time
Service response times must be evaluated in consideration of relocating Fire Station No.
2 to the McDonald's site. Staff requested Emergency Services Consulting International
(ESCI) determine the adequacy of emergency services response times and perform an
analysis to compare the coverage between the two locations, within a four minute and
forty second travel window (Attachment E). ESCI determined that the coverage changed
very little between the two locations, and the proposed site was a viable alternative to the
current station.
Appraised Values
Staff obtained an appraisal for the existing fire station site and an appraisal for the vacant
McDonald's site in April 2017. The McDonald's site appraised for $3,553,200 (Attachment
F). The appraiser calculated a 25 percent reduction in the current market value, due to a
20 -year deed restriction preventing food or beverage sales at the site. The existing Fire
Station No.2 site appraised for $2,325,000 (Attachment G).
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Purchase of Real Property Located at 2807 Newport Boulevard
for Relocation of Fire Station No. 2
September 12, 2017
Page 4
Cost of Moving vs. Stag
Staff calculated and compared the estimated costs of relocating the fire station to the new
site and selling the existing site versus staying at the current location and redeveloping
at the existing site. It is important to note the proposed construction and FF&E costs
shown in the table below are only estimates.
As noted, most costs above are estimates. Per the table above, the total cost of
purchasing the new site and developing a fire station is 7% more than rebuilding on the
existing site. The estimated parking revenue amount in the table above assumes
eighteen months of parking income at the McDonald's site, during project design and
entitlements.
Site Comparison
The McDonald's site is 52% larger than the existing Fire Station No. 2 site, with access
to three streets allowing for easier ingress.
Existing Site
New Site
Notes
Land Purchase:
$0
$4,000,000
1
Land Maintenance:
$0
$20,000
Acceptable
Construction:
$7,187,500
$7,187,500
Includes demolition
FFE, Utilities, Moving:
$400,000
$400,000
Temp. Station:
$500,000*
$0
*Relocation during construction
Temp. Land:
$500,000*
$0
Sale of Existing Site:
$0
($2,325,000)
Sale of existing fire station site
Parking Revenue:
$100,000
Value of public parking revenue
Total
$8,587,500
$9,182,500
As noted, most costs above are estimates. Per the table above, the total cost of
purchasing the new site and developing a fire station is 7% more than rebuilding on the
existing site. The estimated parking revenue amount in the table above assumes
eighteen months of parking income at the McDonald's site, during project design and
entitlements.
Site Comparison
The McDonald's site is 52% larger than the existing Fire Station No. 2 site, with access
to three streets allowing for easier ingress.
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Existing Site
475 32"d Street)
New Site
2807 Newport Boulevard
Land Size:
11,612 sf
17,693 sf
Access Street(s):
1
3
Response Time:
Acceptable
Acceptable
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Purchase of Real Property Located at 2807 Newport Boulevard
for Relocation of Fire Station No. 2
September 12, 2017
Page 5
Entitlements, Design, and Construction
The McDonald's property is located in the Visitor -Serving Commercial (CV) Zoning
District and the Coastal Zone. Fire stations are a permitted use within this zoning
district. Depending on the final project design, project entitlements may require the City's
approval of a Coastal Development Permit and Site Development Permit. To comply with
the California Environmental Quality Act (CEQA), staff anticipates a Mitigated Negative
Declaration will be required.
Project design and processing the necessary entitlements to build a new fire station at
the McDonald's property will take approximately 18 months, and then construction of the
new station will take approximately 14 months.
Terms of Agreement for Purchase and Sale of Real Property, and Escrow Instructions
Below is an outline of the terms of the Agreement for Purchase and Sale of Real Property,
and Escrow Instructions negotiated between the City and the seller (Attachment A).
1. City shall pay a purchase price of $4,000,000.
2. City is purchasing the property in "as -is" condition.
3. Initial earnest money deposit of $75,000, to remain refundable through the due
diligence period, and be applicable to the purchase price. An additional $50,000 in
earnest money may be deposited to extend the close of escrow by 30 days, which
shall be non-refundable, and be applicable to the purchase price.
4. City shall have a 30 day due diligence period to review reports and inspect the site,
and escrow shall close 15 days after the expiration of the due diligence period,
unless extended.
5. An ALTA title policy shall be issued to the City at the close of escrow for the full
purchase price of $4,000,000.
6. No brokers were involved in the transaction, and no commission shall be paid by
the City or MNG Newport Beach, LLC.
Contract Summary
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Proposed Contract
Vendor Name
MNG Newport Beach, LLC
Term
45 days, 30 day option
Escalation Clause
N/A
Revenue/Year
N/A
Cost/Year
$4,000,000
Cost/Contract Term
est $4,010,000
26-5
Purchase of Real Property Located at 2807 Newport Boulevard
for Relocation of Fire Station No. 2
September 12, 2017
Page 6
Selection Process
Sole Source or RFP/RFQ Sole Source
Method (QBS vs. Low Bid) QBS
# of Respondents 1
# of Qualified Respondents 1
ENVIRONMENTAL REVIEW:
Staff recommends the City Council find this action is not subject to the California
Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) (the activity will not
result in a direct or reasonably foreseeable indirect physical change in the environment)
and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA
Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no
potential for resulting in physical change to the environment, directly or indirectly.
NOTICING:
The agenda item has been noticed according to the Brown Act (72 hours in advance of
the meeting at which the City Council considers the item).
ATTACHMENTS:
Attachment A —
Sample Agreement for Purchase and Sale
Attachment B —
Budget Amendment
Attachment C
— Map and Redevelopment Plan
Attachment D
— Map and Redevelopment Plan
Attachment E —
MOU from ESCI
Attachment F —
Appraisal Report for 2807 Newport Boulevard
Attachment G
— Appraisal Report for 475 32nd Street
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Attachment A
Sample Agreement for Purchase and Sale of Real Property, and Escrow Instructions
26-7
AGREEMENT FOR PURCHASE AND SALE OF REAL PROPERTY
AND ESCROW INSTRUCTIONS
Escrow No. Date of Opening of Escrow: September , 2017
To: Chicago Title Company ("Escrow Holder")
4041 MacArthur Boulevard
Suite 400
Newport Beach, California 92660
Attention: Karen L. Price, National Senior Escrow Officer
Telephone: 949-724-3113
THIS AGREEMENT FOR PURCHASE AND SALE OF REAL PROPERTY
AND ESCROW INSTRUCTIONS ("Agreement") is made this day of September,
2017, by and between MNG Newport Beach, LLC ("Seller") and City of Newport Beach,
a California municipal corporation and charter city ("City"). City and Seller are sometimes
hereinafter individually referred to as a "Party" and collectively as the "Parties" to this
Agreement.
RECITALS:
The following Recitals are a substantive part of this Agreement and are
incorporated herein:
A. City is a municipal corporation duly organized and validly existing under the
laws of the State of California with the power to carry on its business as it is now being
conducted under the statutes of the State of California and the Charter of City.
B. Pursuant to the Newport Beach Municipal Code and City Council Policy F-
7, the City conducted an analysis to determine the open market value of the property that
is the subject of this Agreement, using an appraisal by a reputable and independent
professional appraiser to determine the highest value of the property in its current
condition.
C. Seller is the owner of that certain real property commonly known as 2807
Newport Boulevard [A.P.N. 047-110-36], located in the City of Newport Beach, County of
Orange, State of California, as more particularly described on Exhibit "A" and depicted on
Exhibit "B" attached hereto and by this reference incorporated herein, together with all
improvements now or hereafter constructed thereon, all easements, licenses and
interests appurtenant thereto and all intangible property owned or held by Seller in
connection with the such real property, including without limitation, development rights,
governmental approvals and land entitlements (collectively referred to herein as the
"Property").
D. City has the authority to acquire property for public uses utilizing City's
power of eminent domain. In lieu of City's exercise of said power and under the threat
thereof, Seller is willing to sell the Property to City, and City is willing to purchase the
Property from Seller, upon the terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration for the benefits set forth herein and for other
good and valuable consideration, the receipt and sufficiency of which is acknowledged,
the Parties agree as follows:
TERMS AND CONDITIONS
1. PURCHASE AND SALE OF PROPERTY. City hereby agrees to purchase
from Seller, and Seller agrees to sell to City the Property, upon the terms and conditions
hereinafter set forth.
2. PURCHASE PRICE.
2.1 Amount of Purchase Price. The total purchase price for the Property, which
includes the value of the land and improvements, is FOUR MILLION DOLLARS and
00/100 ($4,000,000.00) ("Purchase Price").
2.2 Payment of Purchase Price.
(a) Not later than five (5) days following the Opening of Escrow, as
defined herein, City shall deposit in Escrow in good funds, the sum of SEVENTY-
FIVE THOUSAND DOLLARS and 00/100 ($75,000.00) ("Initial Deposit"), which
Initial Deposit shall be applicable against the Purchase Price.. City shall have the
unqualified and unrestricted right to terminate its obligations under this Agreement
on or before the expiration of the Due Diligence Period, hereinafter defined. In the
event this Agreement is terminated by City on or before the expiration of the Due
Diligence Period, the Initial Deposit shall be promptly returned to City. If the City
disapproves of any of the due diligence items pursuant to the terms of Section 5,
below, the Initial Deposit shall remain refundable until all items are approved by
City, or this Agreement is terminated by City as specified herein
(b) On or before the Closing Date, hereinafter defined, City shall deposit
the balance of the Purchase Price, subject to any other credits or debits hereunder,
with Escrow Holder in "good funds." "Good funds" shall mean a wire transfer of
funds, cashier's or certified check drawn on or issued by the offices of a financial
institution located in the State of California, or cash.
2.3 Interest Bearing Account. Escrow Holder shall deposit the funds specified
in Section 2.1 above in an interest bearing account. All interest earned on said funds shall
be credited to City.
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3. ESCROW. This Agreement constitutes the joint escrow instructions of the
City and Seller. Escrow Holder, to whom these instructions are delivered, is hereby
empowered to act under this Agreement.
3.1 Opening Of Escrow. Within five (5) business days after the execution of this
Agreement, the Parties shall open an escrow ("Escrow") with the Escrow Holder by
causing an executed copy of this Agreement to be deposited with Escrow Holder. Escrow
shall be deemed open on the date that City delivers this executed Agreement to Escrow
Holder. The Parties agree to perform all acts reasonably necessary to close Escrow if, as
and when required hereby.
3.2 Escrow Holder Is Authorized To And Shall:
(a) Pay and deduct from the Purchase Price any amount necessary to
satisfy any delinquent taxes together with penalties and interest thereon, and/or
delinquent or non -delinquent assessments or bonds except those which title is to
be taken subject to in accordance with the terms of this Agreement;
(b) Pay and deduct from the Purchase Price, up to and including the total
amount of unpaid principal and interest on note(s) secured by mortgage(s) or
deed(s) of trust, if any, and all other amounts due and payable in accordance with
terms and conditions of said trust deed(s) or mortgage(s) including late charges, if
any, except penalty for payment in full in advance of maturity shall, upon
demand(s), be made payable to the mortgagee(s) or beneficiary(ies) entitled there
under;
(c) Pay and charge Seller for all recording fees incurred in this
transaction including payment of reconveyance fees and forwarding fees for partial
or full reconveyances of deeds of trust or release or mortgage by Seller;
(d) Pay and charge Seller for any escrow fees, charges, and costs
payable under Section 7, below;
(e) Prorate, as between City and Seller, real estate taxes through the
close of escrow, with City to be charged with and have the benefit of the day of the
close of escrow.
(f) Disburse funds in accordance with this Agreement, and record the
Grant Deed in the Official Records of the County Recorder of Orange County,
California.
4. ADDITIONAL FUNDS AND DOCUMENTS REQUIRED FROM CITY AND
SELLER.
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4.1 City. City agrees that on or before 1:00 p.m. on the business day preceding
the Closing Date, City will deposit with Escrow Holder all additional funds and/or
documents (executed and acknowledged, if appropriate) which are necessary to comply
with the terms of this Agreement, including without limitation, the following:
(a) The Purchase Price;
(b) A Preliminary Change of Ownership Statement completed in the
manner required in Orange County;
(c) Such funds and other items and instruments as may be necessary in
order for Escrow Holder to comply with this Agreement.
4.2 Seller. Seller agrees that on or before 1:00 p.m. on the business day
preceding the Closing Date, Seller will deposit with Escrow Holder such funds and other
items and instruments (executed and acknowledged, if appropriate) as may be necessary
in order for the Escrow Holder to comply with this Agreement, including without limitation,
the following:
(a) A grant deed conveying the Property to City in a form substantially
similar to the form as Exhibit "C" attached hereto and incorporated herein by this
reference ("Grant Deed").
(b) A Non -Foreign Affidavit on Escrow Holder's Standard form or a form
substantially similar thereto ("Non -Foreign Affidavit"); and
(c) Such funds and other items and instruments as may be necessary in
order for Escrow Holder to comply with this Agreement.
Escrow Holder will cause the Grant Deed to be recorded when (but in no event after the
date specified in Section 6.1 below) it can issue the Title Policy in the form described in
Section 7 below, and will hold for the account of Seller the items described above to be
delivered to Seller through Escrow, less costs, expenses and disbursements chargeable
to Seller pursuant to the terms hereof.
4.3 Assignment of Contracts. On or before five (5) business days following the
opening of Escrow, Seller shall deliver to City copies of all contracts affecting the Property,
including any lease affecting the Property ("Existing Lease"). City shall notify Seller on or
before the Due Diligence Date of City's approval or disapproval of each contract. Seller
shall terminate any contract disapproved by City. City's failure to notify Seller within the
time specified shall be considered disapproval. As to those contracts City elects to
assume, Seller shall assign same in a form agreed upon by the Parties. As to those
contracts City does not elect to assume, Seller shall terminate and otherwise remain
responsible for same after close of Escrow.
4.4 Miscellaneous Documents. On or before five (5) business days following
the opening of Escrow, Seller shall deliver to City all documents relating to the Property
26-11
which Seller may have in its possession including but not limited to copies of all copies of
Phase I and Phase II Environmental Reports, together with engineering reports, surveys,
soils studies, environmental audits and reports, environmental impact report, and all other
documents relating to the Real Property for City's review and approval. City shall notify
Seller on or before the Due Diligence Date of City's approval or disapproval of each item.
City's failure to notify Seller within the time specified shall be considered disapproval. If
City does not acquire the Property, all said documents shall be promptly returned to
Seller. In addition, Seller shall deliver to City (or cause Escrow Holder to deliver to City),
natural hazard disclosure reports covering the Property in such form as required by law,
which shall be countersigned and returned to Seller and Escrow Holder.
4.5 Estoppel Certificate. In the event the Property is subject to an Existing
Lease as of the Closing (i.e. in the event the existing tenant holds over), at least ten (10)
calendar days prior to the Closing Date, Seller shall have delivered to Escrow Holder an
original Estoppel Certificate, and to City, copies thereof, dated within forty-five (45) days
of the Closing Date, from the tenant under an Existing Lease. Such Estoppel Certificate
shall be in a form to be provided by City within two (2) business days following delivery of
notice by Seller to City that the tenant under the Existing Lease is holding over and shall
be reasonably approved by Seller. Seller shall use its best efforts to obtain such Estoppel
Certificate from the tenant under an Existing Lease and Seller shall provide a Seller's
estoppel in the event Seller is unable to obtain such Estoppel Certificate from the tenant
under an Existing Lease, provided, however, that City shall not be required to complete
its purchase unless Seller obtains an Estoppel Certificate. The failure of Seller to obtain
the Estoppel Certificates as set forth in this Section 4.5 shall not constitute a breach of
this Agreement by Seller if such certificate is not procured despite Seller's best efforts,
but shall entitle City to terminate this Agreement.
5. DUE DILIGENCE PERIOD.
5.1 Inspection Rights. At City's own cost and expense, it may make an
independent investigation of the Property and all other aspects of this transaction, and
may rely thereon and on the advice of its consultants in entering into this Agreement.
5.2 City Inspection. Commencing upon the Opening of Escrow and
continuing thereafter for thirty (30) calendar days ("Due Diligence Period"), City, it agents
and employees shall:
(a) examine and inspect the Property and will know and be satisfied with
the physical condition, quality, quantity and state of repair of the Property in all
respects;
(b) review all instruments, records and documents which City deems
appropriate or advisable to review in connection with this transaction, including,
but not by way of limitation, any and all plans, specifications, surveys,
environmental assessments, existing leases and/or easement documents reports,
and title reports; and
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(c) review all applicable laws, ordinances, rules and governmental
regulations (including those relating to building, zoning and land use) affecting the
development, use, occupancy or enjoyment of the Property;
5.3. Approval of Property After Inspection. On or before Closing, City may
notify Escrow, in writing, of its approval of all inspections conducted pursuant to Section
5.2. Should City fail to provide written notice of its election to approve each inspection
conducted pursuant to Section 5.2, City shall be conclusively determined to have
disapproved the condition of the Property, thereby terminating this Agreement.
5.4 Entry for Investigation. Subject to the conditions hereafter stated and the
rights of tenants in possession, Seller grants to City, its agents, employees, and
consultants a limited license to enter upon any portion of the Property for the purpose of
conducting engineering surveys, soil tests, investigations or other studies reasonably
necessary to evaluate the condition of the Property, which studies, surveys, investigations
and tests shall be done at City's sole cost and expense. City shall (a) notify Seller prior to
each entry of the date and purpose of intended entry and provide to Seller the names and
affiliations of the persons entering the Property; (b) conduct all studies in a diligent,
expeditious and safe manner and not allow any dangerous or hazardous conditions to
occur on the Property during or after such investigation; (c) comply with all applicable
laws and governmental regulations; (d) keep the Property free and clear of all
materialmen's liens, lis pendens and other liens arising out of the entry and work
performed under this paragraph; (e) maintain or assure maintenance of workers'
compensation insurance (or state approved self-insurance) on all persons entering the
property in the amounts required by the State of California; (f) provide to Seller prior to
initial entry a certificate of insurance evidencing that City has procured and paid premiums
for an all-risk public liability insurance policy written on a per occurrence and not claims
made basis in a combined single limit of not less than TWO MILLION DOLLARS
($2,000,000.00) which insurance names Seller as additional insured entitled to not less
than thirty (30) days cancellation notice and is primary and non-contributing with
insurance carried by Seller; and (g) return the Property to its original condition following
City's entry. City agrees to indemnify, defend, protect and hold Seller and the Property
free and harmless from any and all loss, liability, claims, damages and expenses
(including but not limited to attorneys' fees and costs) arising directly or indirectly from the
exercise of said license, or from City's failure to comply with the conditions to City's entry
onto the Property provided herein. Such undertaking of indemnity shall survive Close of
Escrow or the termination of this Agreement for any reason. The limited license herein
granted shall be co -extensive with the term of this Agreement or any extension thereof.
6. CLOSING DATE.
6.1 Initial Closing Date. Escrow shall close on or before fifteen (15) calendar
days from the expiration of the Due Diligence Period ("Closing Date"). The terms "the
Close of Escrow", and/or the "Closing" are used herein to mean the time Seller's Grant
Deed is filed for record by the Escrow Holder in the Office of the County Recorder of
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Orange County, California. City and Seller each specifically agrees to strictly comply and
perform its obligations herein in the time and manner specified and waives any and all
rights to claim such compliance by mere substantial compliance with the terms of this
Agreement.
6.2 City shall have the right to extend the Closing Date by thirty (30) calendar
days ("Extension"), provided City delivers to Escrow Holder the sum of FIFTY
THOUSAND AND 00/100 DOLLARS ($50,000.00), which amount shall be applicable to
the Purchase Price, shall be deemed consideration for such extension and shall be non-
refundable to City.
6.3 Distribution of Documents. Following Close of Escrow, Escrow Holder shall
distribute the documents as follows:
(a) To City:
(i) One certified conformed copy of the Grant Deed, the
original to be mailed to City following recordation thereof;
(ii) One duplicate original each of the Bill of Sale, the
Assignment of Lease, the Assignment of Contracts and the Non -Foreign
Affidavit; and
(iii) One certified copy, conformed if recorded, of any other
document delivered to Escrow Holder by City or Seller pursuant to the terms
hereof.
(b) To Seller:
(i) One duplicate original each of the Bill of Sale, the
Assignment of Lease, the Assignment of Contracts and the Non -Foreign
Affidavit; and
(ii) One certified copy, conformed if recorded, of any other
document delivered to Escrow Holder by City or Seller pursuant to the terms
hereof.
7. TITLE POLICY.
7.1 Approval of Title. Following execution of this Agreement but in no event later
than five (5) calendar days following opening of Escrow, Seller shall deliver to City a
preliminary title report issued through Chicago Title Company ("Title Company"),
describing the state of title of the Property, ("Preliminary Title Report") together with
copies of all exceptions specified therein. City shall notify Seller in writing of any
objections City may have to title exceptions or other matters ("Disapproved Exceptions")
contained in the Preliminary Title Report within fifteen (15) calendar days after City's
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receipt of the Preliminary Title Report ("City's Objection Notice"). City shall not
unreasonably withhold its approval of the Preliminary Title Report. If City fails to deliver
City's Objection Notice within said fifteen (15) calendar day period, City shall be
conclusively deemed to have approved the Preliminary Title Report and all matters shown
thereon. In the event City delivers City's Objection Notice within said period, Seller shall
have a period of ten (10) calendar days after receipt of City's Objection Notice in which
to notify City of Seller's election to either (i) agree to attempt to remove the Disapproved
Exceptions prior to the Close of Escrow; or (ii) decline to remove any such Disapproved
Exceptions ("Seller's Notice"). Seller shall only elect to decline to remove Disapproved
Exceptions which Seller in good faith believes Seller's reasonable efforts would not result
in removal or as to which removal would result in cost or expense to Seller other than
nominal administrative expense incurred in the process of removal. Seller's failure to
deliver Seller's Notice within said ten (10) calendar day period shall be deemed Seller's
election to decline to remove the Disapproved Exceptions. If Seller notifies City of its
election to decline to remove the Disapproved Exceptions, if Seller is deemed to have
elected to decline to remove the Disapproved Exceptions or if Seller is unable to remove
the Disapproved Exceptions, City may elect either to terminate this Agreement and the
Escrow or to accept title to the Property subject to the Disapproved Exception(s). City
shall exercise such election by delivery of written notice to Seller and Escrow Holder
within fifteen (15) calendar days following the earlier of (i) the date of written advise from
Seller that such Disapproved Exception(s) cannot be removed; or (ii) the date Seller
declines or is deemed to have declined to remove such Disapproved Exception(s). If City
fails to deliver said written notice of termination of this Agreement and the Escrow within
said fifteen (15) calendar day period, City's disapproval of the Disapproved Exception(s)
shall be deemed waived and City shall deemed to have agreed to accept title to the
Property subject to the Disapproved Exception(s).
Upon the issuance of any amendment or supplement to the Preliminary Title
Report which adds additional exceptions, the foregoing right of review and approval shall
also apply to said amendment or supplement, provided, however, that City's initial period
of review and approval or disapproval of any such additional exceptions shall be limited
to ten (10) calendar days following receipt of notice of such additional exceptions.
7.2 Title Policy to be Issued to City. When Escrow Holder holds for City the
Grant Deed in favor of City executed and acknowledged by Seller covering the Property,
Escrow Holder shall cause to be issued and delivered to City and Seller as of the Closing
a CLTA standard coverage policy of title insurance ("Title Policy"), or, upon City's request
therefor, an ALTA standard coverage policy of title insurance, issued by Title Company,
with liability in the amount of the Purchase Price, covering the Property and showing title
vested in City free of encumbrances, except:
(a) All nondelinquent general and special real property taxes and
assessments for the current fiscal year;
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(b) Easements, encumbrances, covenants, conditions, restrictions,
reservations, rights-of-way and other matters of record, as approved or deemed
approved by City pursuant to Section 7.1 above;
(c) The standard printed exceptions and exclusions contained in the
CLTA or ALTA form policy; and
(d) Any exceptions created or consented to by City, including without
limitation, any exceptions arising by reason of City's possession of or entry on the
Property.
8. CONDITIONS PRECEDENT TO CLOSE OF ESCROW.
8.1 Conditions to City's Obligations. The obligations of City under this
Agreement shall be subject to the satisfaction or written waiver, in whole or in part, by
City of each of the following conditions precedent:
(a) Title Company will issue the Title Policy as required by Section 7 of
this Agreement insuring title to the Property vested in City or other vestee
designated by City for vesting purposes only.
(b) Escrow Holder holds and will deliver to City the instruments and
funds, if any, accruing to City pursuant to this Agreement.
(c) Seller has delivered all documents required to be delivered under
Section 4.2 above.
(d) All representations and warranties specified in Section 10.1 are true
and correct.
(e) City's approval of any other conditions specified in this Agreement.
8.2 Conditions to Seller's Obligations. The obligations of Seller under this
Agreement shall be subject to the satisfaction or written waiver, in whole or in part, by
Seller of each of the following conditions precedent:
(a) Escrow Holder holds and will deliver to Seller the instruments and
funds accruing to Seller pursuant to this Agreement.
8.3 Return of Initial Deposit. In the event Seller fails to satisfy any of the
conditions specified in Section 8.1, above, and those conditions are not waived by City
prior to Closing, the Initial Deposit shall be promptly returned to City.
9. ESCROW PROVISIONS.
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9.1 Escrow Instructions. This Agreement, when signed by City and Seller, shall
also constitute escrow instructions to Escrow Holder. If required by Escrow Holder, City
and Seller agree to execute Escrow Holder's standard escrow instructions, provided that
the same are consistent with and do not conflict with the provisions of this Agreement. In
the event of any such conflict, the provisions of this Agreement shall prevail.
9.2 General Escrow Provisions. Escrow Holder shall deliver the Title Policy to
the City and instruct the Orange County Recorder to mail the Grant Deed to City at the
address set forth in Section 28 after recordation. All funds received in this Escrow shall
be deposited in one or more general escrow accounts of the Escrow Holder with any bank
doing business in Orange County, California, and may be disbursed to any other general
escrow account or accounts. All disbursements shall be made by Escrow Holder's check.
This Agreement and any modifications, amendments, or supplements thereto may be
executed in counterparts and shall be valid and binding as if all of the parties' signatures
were on one document.
9.3 Proration of Real Property Taxes. All nondelinquent general and special real
property taxes shall be prorated to the Close of Escrow on the basis of a thirty (30) day
month and a three hundred sixty day (360) year. In the event that property taxes are
assessed on a parcel of real property which includes land other than the Property, such
proration shall include only taxes attributable to the Property, calculated in terms of total
gross square feet of land assessed pursuant to the tax statement versus total gross
square footage of the Property. Any supplemental tax bills received after Close of Escrow
shall be paid by Seller to the extent they relate to a period prior to Close of Escrow, and
by City, to the extent they relate to a period after Close of Escrow. If a supplemental tax
bill covers a period commencing before and continuing after Close of Escrow, the party
named in the bill will pay the tax and the other party shall reimburse the first party its pro
rata share within thirty (30) calendar days after receipt of a copy of the tax bill and
evidence of the second party's payment of same. The provisions of this Section 9.3 shall
survive Close of Escrow. If either party fails to pay its pro rata share of taxes by the times
herein provided, interest shall accrue on all unpaid amounts from when owing until paid
at five percent (5%) over the Federal Discount Rate quoted by the Federal Reserve Bank
of San Francisco on the 25th day of the month preceding the date interest commences
to accrue. Rents of the tenants under an Existing Lease, if any, shall be prorated to the
Closing Date based on rents actually collected. Any such rents collected after the Closing
Date by City which are attributable to the period prior to the Closing Date shall be paid to
Seller upon collection. Rents collected after the Closing Date from tenants whose rental
was delinquent at Closing and/or constituting reimbursements for operating expenses
paid by Seller shall be deemed to first apply to costs of collecting such rents, second to
rents which accrued after the Closing and third to rentals accruing prior to the Closing
Date. City shall have no obligation to commence litigation or to collect rents or to terminate
the tenant's right to occupancy based upon tenant's failure to pay rentals which were
delinquent at Closing and/or such reimbursements; however, City shall use reasonable
efforts to collect such delinquent rents and shall reasonably and in good faith cooperate
with Seller's attempts to collect such rents at no cost or expense to City.
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9.4 Payment of Costs. Seller shall pay one-half (1/2) of the Escrow fee, title
insurance premiums for that portion of the Title Policy premium which would be incurred
for a CLTA form policy, and the charge for drawing the Grant Deed. City shall pay the
one-half (1/2) of the Escrow fee, charges for recording the Grant Deed, and that portion
of the Title Policy premium which is attributable to the additional cost of obtaining any
additional coverage requested by City, including the difference between CLTA and ALTA
coverage. All other costs of Escrow not otherwise specifically allocated by this Agreement
shall be apportioned between the parties in a manner consistent with the custom and
usage of Escrow Holder. This transaction is exempt from payment of documentary
transfer taxes.
9.5 Termination and Cancellation of Escrow. Time is of the essence of this
Agreement. If Escrow fails to close as provided above, Escrow shall terminate
automatically without further action by Escrow Holder or any party, and Escrow Holder is
instructed to return all funds and documents then in Escrow to the respective depositor
of the same with Escrow Holder. Cancellation of Escrow, as provided herein, shall be
without prejudice to whatever legal rights City or Seller may have against each other
arising from the Escrow or this Agreement.
9.6 Information Report. The "Reporting Person" within the meaning of Treasury
Regulation Section 1.6045-4(e)(5) with respect to the transactions contemplated by this
Agreement shall be Escrow Holder. It is agreed that Escrow Holder is an eligible person
under Section 1.6045-4(e)(5)(ii) of said Regulations. Escrow Holder hereby agrees to be
responsible for complying with the reporting and other requirements of Internal Revenue
Code Section 6045(e) and the income tax regulations promulgated thereunder. Pursuant
to said regulations, the address for the transferor and transferee are as set forth for Seller
and City below, and the identifying information regarding the real estate transferred is the
legal description for the Property set forth herein. Escrow Holder agrees to file the form
required by said regulations between the end of the calendar year in which the Close of
Escrow occurs and February 28 of the following calendar year. City and Seller agree (i)
to cooperate with Escrow Holder and with each other in completing any report and/or
other information required to be delivered to the Internal Revenue Service pursuant to
Internal Revenue Code Section 6045(e) regarding the real estate sales transaction
contemplated by this Agreement, including without limitation, Internal Revenue Service
Form 1099-S as such may be hereinafter modified or amended by the Internal Revenue
Service, or as may be required pursuant to any regulation now or hereinafter promulgated
by the Treasury Department with respect thereto; (ii) that City and Seller, their respective
employees and attorneys, and Escrow Holder and its employees may disclose to the
Internal Revenue Service, any information regarding the Option Agreement, this
Agreement or the transaction contemplated herein as such party reasonably deems to be
required to be disclosed to the Internal Revenue Service by such party pursuant to
Internal Revenue Code Section 6045(e); (iii) that neither City nor Seller shall seek to hold
any such party liable for the disclosure to the Internal Revenue Service of any such
information; and (iv) to retain this Agreement for at least four (4) years following the close
of the calendar year in which the Close of Escrow occurs.
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9.7 Repair Obligations Prior to Close of Escrow. Seller agrees to repair any
items that are damaged or become in need of repair during the course of Escrow, and to
maintain the Property in good condition and repair.
10. REPRESENTATIONS AND WARRANTIES.
10.1 Representations and Warranties. Seller hereby makes the following
representations and warranties to City, each of which (i) is material and relied upon by
City in making its determination to enter into this Agreement; (ii) is true in all respects as
of the date hereof and shall be true in all respects on the date of Close of Escrow on the
Property; and (iii) shall survive the Close of Escrow of the purchase and sale of the
Property as well as any future transfer of the Property to City or any transferee, successor
or assignee of City:
(a) Seller has received no notice or has no actual knowledge that any
governmental authority or any employee or agent thereof considers any
construction of the proposed improvements on the Property or the present or
proposed operation, use or ownership of the Property to violate or have violated
any ordinance, rule, law, regulation or order of any government or agency, body or
subdivision thereof, or that any investigation has been commenced or is
contemplated respecting such possible violations.
(b) There are no pending or threatened litigation, allegations, lawsuits or
claims, whether for personal injury, property damage, landlord -tenant disputes,
property taxes, contractual disputes or otherwise, which do or may affect the
Property or the operation or value thereof, and there are no actions or proceedings
pending or, to the best of Seller's knowledge, threatened against Seller before any
court or administrative agency in any way connected with the Property and
neither the entering into of this Agreement nor the consummation of the
transactions contemplated hereby will constitute or result in a violation or breach
by Seller of any judgment, order, writ, injunction or decree issued against or
imposed upon it. There is no action, suit, proceeding or investigation pending or
threatened against Seller which would become a cloud on City's title to and have
a material adverse impact upon the Property or any portion thereof or which
questions the validity or enforceability of the transaction contemplated by this
Agreement or any action taken pursuant hereto in any court or before or by any
federal, district, county, or municipal department, commission, board, bureau,
agency or other governmental instrumentality.
(c) There are no contracts, leases, claims or rights affecting the Property
and no agreements entered into by or under Seller shall survive the Close of
Escrow that would adversely affect City's rights with respect to the Property except
as heretofore disclosed in writing by Seller to City.
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(d) Seller has the unimpeded power and authority to execute, deliver
and perform Seller's obligations under this Agreement and the documents
executed and delivered by Seller pursuant hereto.
(e) Seller is not a "foreign person" within the meaning of Section 1445 of
the Internal Revenue Code of 1986, as amended.
All representations and warranties made hereunder are in addition to any
representations and warranties implied by law and in no event shall this Section 10.1 be
construed to limit, diminish or reduce any obligation of disclosure implied upon Seller by
law. The representations and warranties of Seller set forth in Section 10.1 hereof shall
survive Closing for a period of one year. Seller shall have no liability to Purchaser for a
breach of any representation or warranty unless written notice (the "Breach Notice")
containing a description of the specific nature of such breach shall have been given by
City to Seller prior to the expiration of said one year period and an action shall have been
commenced by Purchaser against Seller within sixty (60) calendar days following the
expiration of such one year period (the "Outside Date").
10.2 Disclaimer of Representations and Warranties. City acknowledges that as
of Close of Escrow it will have had an adequate opportunity to inspect the Property and
to investigate its physical characteristics and conditions. Upon the Close of Escrow, City
shall be deemed to have waived any and all objections to the physical characteristics and
conditions of the Property which would be disclosed by a reasonable and diligent
inspection. City acknowledges that, except as specifically provided herein, neither Seller
nor any of its employees, agents, or representatives has made any representations,
warranties or agreements to or with City on behalf of Seller as to any matters concerning
the Property, the present use thereof, or the suitability of City's intended use of the
Property.
The foregoing disclaimer includes, without limitation, topography, climate, air,
water rights, utilities, present and future zoning, soil, subsoil, the acreage of the Property
or square footage of buildings located thereon, the purpose to which the Property is
suited, drainage, and access to public roads. City further acknowledges and agrees that
the Property is to be purchased, conveyed, and accepted by City in its present condition,
"AS -IS," and that no patent or latent physical condition of the Property, whether or not
known or discovered, shall affect the rights of either party hereto. City has investigated
and has knowledge of operative or imposed governmental laws and regulations
(including, but not limited to, zoning, environmental, including specifically the regulations
of the Environmental Protection Agency, and land use laws and regulations) to which the
Property may be subject, and is acquiring the Property on the basis of its review and
determination of the application and effect of such laws and regulations. City has neither
received nor relied upon any representations concerning such laws and regulations made
by Seller, Seller's employees, agents, or any other person acting on behalf of Seller. Any
agreements, warranties or representations not expressly contained in this Agreement
shall in no way bind Seller.
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CITY AND SELLER ACKNOWLEDGE AND AGREE THAT THE FOREGOING
PROVISIONS OF THIS SECTION 10 HAVE BEEN FREELY BARGAINED FOR BY THE
PARTIES AND CONSTITUTES A MATERIAL CONSIDERATION TO SELLER FOR THE
SALE OF THE PROPERTY AND BUT FOR THIS PROVISION SELLER WOULD NOT
SELL THE PROPERTY TO CITY.
SELLER'S INITIALS CITY'S INITIALS
10.3 Changed Circumstances. If Seller becomes aware of any fact or
circumstance which would change or render incorrect, in whole or in part, any
representation or warranty made by Seller under this Agreement, whether as of the date
given or any time thereafter through the Close of Escrow and whether or not such
representation or warranty was based upon Seller's knowledge and/or belief as of a
certain date, Seller will give immediate written notice of such changed fact or
circumstance to City, but such notice shall not release Seller of its liabilities or obligations
with respect thereto. Seller shall issue a certificate as of the Close of Escrow stating that
all the representations and warranties contained in Section 10.1 are true and correct as
of said date, or setting forth in detail which of such matters are not true and correct.
10.4 Repair Obligations Prior to Close of Escrow. Seller agrees to repair any
items that are damaged or become in need of repair during the course of Escrow, and to
maintain the Property in good condition and repair.
11. INDEMNITY BY SELLER. Seller shall hold harmless, indemnify and defend
City, and the Property from and against, (i) any and all obligations, liabilities, claims, liens
or encumbrances, whether direct, contingent or consequential and no matter how arising,
in any way related to the Property and arising or accruing on or before the date first above
written, or in any way related to or arising from any act, conduct, omission, contract or
commitment of Seller at any time or times on or before the date of the Close of Escrow
for the purchase and sale of the Property, including without limitation, any damage to the
Property or injury to or death of any person, employees or agents of Seller, except for
obligations, liabilities, claims, liens and encumbrances disclosed herein or which City
specifically agrees by the terms of this Agreement to assume or take subject; (ii) any loss
or damage to City resulting from any material inaccuracy or material breach of any
representation or warranty of Seller or resulting from any breach or default by Seller under
this Agreement, or any other agreements relating to this transaction; and (iii) all costs and
expenses, including attorneys' fees, relating to any actions, suits or judgments incident to
any of the foregoing. Should Seller fail to discharge or undertake to defend City or the
Property against such liability upon learning of the same, then City may settle such liability
and Seller's liability to City shall be conclusively established by such settlement, the
amount of such liability to include both the settlement consideration and the reasonable
expenses, including attorney's fees, incurred by City in effecting such settlement.
12. SETTLEMENT OF CLAIMS.
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12.1 Release of Claims by Seller. In exchange for the promises contained in this
Agreement, and except as to the obligations provided for in this Agreement, Seller hereby
waives, releases and forever discharges, and agrees to the extent permitted by law that
he will not in any manner institute, prosecute or pursue, any and all complaints, charges,
claims for relief, demands, damages, suits, actions or causes of action, of any kind,
whether in law or in equity, which he asserts or could assert, at common law or under any
statute, rule, regulation, order or law, whether federal, state or local, or on any grounds
whatsoever, against the City and/or any of its current or former officers, councilmen,
agents, representatives, employees, successors and assigns with respect to any event,
matter, claim, damage or injury, of any kind related to the Action, the Property and/or the
Tolling Agreement or the claims made thereunder or in connection therewith as of the
date of this Agreement and/or the Closing.
12.2 Release of Claims by City. In exchange for the promises contained in this
Agreement, and except as to the obligations contained in this Agreement, City hereby
waives, releases and forever discharges, and agrees to the extent permitted by law that
it will not in any manner institute, prosecute or pursue, any and all complaints, charges,
claims for relief, demands, damages, suits, actions or causes of action, of any kind,
whether in law or in equity, which it asserts or could assert, at common law or under any
statute, rule, regulation, order or law, whether federal, state or local, or on any grounds
whatsoever, against the other Parties and/or any of its or their current or former owners,
trusts, trustees, officers, directors, shareholders, affiliates, agents, representatives,
employees, attorneys, successors, predecessors, insurers, and assigns with respect to
any event, matter, claim, damage or injury of any kind related to the Action, the Property
and/or the Tolling Agreement or the claims made thereunder or in connection therewith
as of the date of this Agreement and/or the Closing.
12.3 Waiver of Unknown Claims. With respect to the subject matter of this
Agreement, including, but not limited to the Property, it is agreed and understood that the
releases being provided by each of the Parties above apply to all injuries and damages,
whether now known or unknown, and whether now existing or which may result in the
future due to the actions or omissions of the Parties on or before the Effective Date. With
respect to the subject matter of this Agreement, the Parties acknowledge that they have
each been fully advised of and understand the provisions of Section 1542 of the California
Civil Code which reads:
"A general release does not extend to claims which the creditor does not know or
suspect to exist in his or her favor at the time of executing this release, which if
known by him or her must have materially affected his or her settlement with the
debtor. "
In further consideration of the promises and payments pursuant to this Agreement,
each Party agrees to, and does hereby, waive and relinquish all rights afforded to him,
her or it under California Civil Code Section 1542, or any similar law of any State or
territory of the United States or other jurisdiction with respect to the matters of this
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Agreement. Notwithstanding the above, nothing in this Agreement shall be deemed to
waive or release any Party as to any of its obligations or rights under this Agreement.
The foregoing provisions shall survive the Closing hereunder and the recordation
of the deed.
13. DAMAGE. DESTRUCTION AND CONDEMNATION.
13.1 Risk of Physical Loss. Risk of physical loss to the Property shall be borne
by Seller prior to the Close of Escrow and by City thereafter. In the event that the Property
shall be damaged by fire, flood, earthquake or other casualty and the estimated cost to
repair same exceeds FIVE HUNDRED THOUSAND DOLLARS ($500,000), City may, at
its option, elect not to acquire the Property. If City does not so elect or the estimated cost
to repair the damage is less than FIVE HUNDRED THOUSAND DOLLARS ($500,000),
City shall complete the acquisition of the Property, in which case Seller shall assign to
City the interest of Seller in all insurance proceeds relating to such damage. In the event
that such damage shall occur and City elects not to purchase the Property as above
provided, then this Agreement shall be terminated and City shall be entitled to the return
of all funds and documents deposited hereunder.
13.2 Condemnation. In the event that, prior to the Close of Escrow, any
governmental entity shall commence any actions of eminent domain or similar type
proceedings to take any portion of the Property, City shall have the option either to (i)
elect not to acquire the Property, or (ii) complete the acquisition of the Property, in which
case City shall be entitled to all the proceeds of such taking.
14. THREAT OF CONDEMNATION. City's purchase of the Property is in
contemplation of the use of the Property for public purposes. This negotiated acquisition
arose during City's investigations of the acquisition of the Property through eminent
domain. City has the authority to acquire property by eminent domain for public purposes.
Seller has agreed to enter into this Agreement with City under the threat of City's exercise
of its power of eminent domain. In the event this negotiated sale did not occur, subject to
and pending its completion of the necessary statutory procedures set forth in Government
Code Section 7267 et seq., and Code of Civil Procedure Section 1230.010 et seq., City's
staff was prepared to have taken the steps thereunder to seek authorization from the City
Council, and staff was prepared to recommend to the City Council initiation of the steps,
to acquire the Property for public purposes pursuant to Government Code Section 7267
et seq., and Code of Civil Procedure Section 1230.010 et seq., including providing notice
to Seller of its opportunity to be heard and to agendize, consider, and take action on a
resolution of necessity under Code of Civil Procedure Section 1245.230 et seq. Nothing
herein is intended to be, or serve as, any tax advice from City to Seller, and Seller is not
in any way construing or relying on any communications or advice by City, or City's
representations herein, in any way as any type of tax advice or opinion. Upon request,
City shall provide Seller with a letter, separate and apart from this Agreement, restating
the foregoing.
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15. POSSESSION. Possession of the Property shall be delivered to City as of
Close of Escrow. In the event any personal property remains on the Property following
the Close of Escrow, it shall automatically become the property of City.
15. ENVIRONMENTAL CONDITION. To Seller's actual knowledge, but without
duty of investigation, Seller, as of the Effective Date, is not required by any applicable
laws and governmental regulations to take any action to remediate any environmental
condition affecting the Property.
17. ASSIGNMENT. City shall not have the right to assign this Agreement or any
interest or right hereunder or under the Escrow or to nominate another party to take title
to the Property without the prior written consent of Seller, which Seller may withhold in
Seller's sole discretion. In no event shall City be released of liability in the event of an
assignment or nomination.
18. AFFIXATION OF REVENUE STAMPS. Escrow Holder is hereby
specifically instructed to attach documentary transfer and/or revenue stamps to the Grant
Deed only after recordation of the Grant Deed.
19. COOPERATION. City and Seller agree to cooperate with one another, at
no cost or expense to the cooperating party, in satisfying the conditions to Close of
Escrow. City shall be responsible for proceeding with diligence and in good faith to satisfy
the conditions, if any, to City's performance set forth in Section 8.1 and Seller shall be
responsible for proceeding with diligence and in good faith to satisfy the conditions, if any,
to Seller's performance set forth in Section 8.2.
20. QUALIFICATION; AUTHORITY. Each party represents and warrants that it
is duly formed, is authorized to do business in the state in which the Property is located
and that it has been duly authorized to enter into and perform this Agreement.
21. ATTORNEYS' FEES. In any action between the parties hereto seeking
enforcement of any of the terms and provisions of this Agreement or the Escrow, or in
connection with the Property, the prevailing party in such action shall not be entitled to
have and to recover from the other party its reasonable attorneys' fees and other
reasonable expenses in connection with such action or proceeding in addition to its
recoverable court costs.
22. INTERPRETATION; GOVERNING LAW. This Agreement shall be
construed according to its fair meaning and as if prepared by both parties hereto. This
Agreement shall be construed in accordance with the laws of the State of California in
effect at the time of the execution of this Agreement. Titles and captions are for
convenience only and shall not constitute a portion of this Agreement. As used in this
Agreement, masculine, feminine or neuter gender and the singular or plural number shall
each be deemed to include the others wherever and whenever the context so dictates.
26-24
23. NO WAIVER. No delay or omission by either party hereto in exercising any
right or power accruing upon the compliance or failure of performance by the other party
hereto under the provisions of this Agreement shall impair any such right or power or be
construed to be a waiver thereof. A waiver by either party hereto of a breach of any of
the covenants, conditions or agreements hereof to be performed by the other party shall
not be construed as a waiver of any succeeding breach of the same or other covenants,
agreements, restrictions or conditions hereof.
24. MODIFICATIONS. Any alteration, change or modification of or to this
Agreement, or any time limits contained herein, in order to become effective, shall be
made by written instrument or endorsement thereon and in each such instance executed
on behalf of each party hereto.
25. SEVERABILITY. If any term, provision, condition or covenant of this
Agreement or the application thereof to any party or circumstances shall, to any extent,
be held invalid or unenforceable, the remainder of this instrument, or the application of
such term, provision, condition or covenant to persons or circumstances other than those
as to whom or which it is held invalid or unenforceable, shall not be affected thereby, and
each term and provision of this Agreement shall be valid and enforceable to the fullest
extent permitted by law.
26. COVENANTS TO SURVIVE ESCROW. The covenants and agreements
contained herein shall survive the Close of Escrow and, subject to the limitations on
assignment contained in Section 15 above, shall be binding upon and inure to the benefit
of the parties hereto and their representatives, heirs, successors and assigns.
27. NO WITHHOLDING BECAUSE NON -FOREIGN SELLER. Seller
represents and warrants to City that Seller is not, and as of the Close of Escrow will not
be, a foreign person within the meaning of Internal Revenue Code Section 1445 and that
it will deliver to City on or before the Close of Escrow the Non -Foreign Affidavit as
described hereinabove, pursuant to Internal Revenue Code Section 1445(b)(2) and the
Regulations promulgated thereunder.
28. TIME IS OF THE ESSENCE. Time is hereby expressly made of the essence
of this Agreement.
29. EXECUTION IN COUNTERPART. This Agreement may be executed in
several counterparts, and all so executed shall constitute one agreement binding on all
parties hereto, notwithstanding that all parties are not signatories to the original or the
same counterpart.
30. NOTICES. Any notice which either party may desire to give to the other
party or to the Escrow Holder must be in writing and shall be effective upon delivery if
sent via overnight mail with tracking; upon delivery, if delivered by confirmed facsimile or
email (with a backup sent by first class mail); when personally delivered, if sent postage
prepaid by registered or certified mail, return receipt requested; three (3) business days
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after deposit in the United States mail, registered, certified, postage fully prepaid and
addressed to the respective parties as set forth below or to such other address and to
such other persons as the parties may hereafter designate by written notice to the other
parties hereto:
To Seller: MNG Newport Beach, LLC
Attn:
9171 Towne Centre Drive
Suite 335
San Diego, CA 92122
To City: City of Newport Beach
Attn: City Manager
100 Civic Center Drive
Newport Beach, CA 92660
With Copies to: City of Newport Beach
Attn: City Attorney
100 Civic Center Drive
Newport Beach, CA 92660
City of Newport Beach
Attn: Real Property Administrator
100 Civic Center Drive
Newport Beach, CA 92660
31. NO BROKERS. City and Seller each represents to the other that no brokers
have been involved in this transaction. City and Seller agree to indemnify one another
against any claim, suits, damages and costs incurred or resulting from the claims of any
person for any fee or remuneration due in connection with this transaction pursuant to a
written agreement made with said claimant.
32. CONTINGENCY. It is understood and agreed between the Parties hereto
that the completion of this transaction, and the escrow created hereby, is contingent upon
the specific acceptance and approval of the City. The execution of these documents and
the delivery of same to Escrow Holder constitute said acceptance and approval.
33. ENTIRE AGREEMENT, WAIVER AND MODIFICATION. This Agreement is
the entire Agreement between the Parties with respect to the subject matter of this
Agreement. It supersedes all prior agreements and understanding, whether oral or
written, between the Parties with respect to the matters contained in this Agreement. Any
waiver, modification, consent or acquiescence with respect to any provision of this
Agreement shall be set forth in writing and duly executed by or on behalf of the Party to
be bound thereby. No waiver by any Party of any breach hereunder shall be deemed a
waiver of any other or subsequent breach.
26-26
34. RECITALS. The recitals provided in this Agreement are true and correct
and are incorporated into the operative part of this Agreement.
35. CITY AUTHORIZATION. The City Manager of the City of Newport Beach is
hereby authorized, on behalf of the City, to sign all documents necessary and appropriate
to carry out and implement this Agreement and to administer the City's obligations,
responsibilities and duties to be performed under this Agreement.
[SIGNATURES ON NEXT PAGE]
26-27
IN WITNESS WHEREOF, the parties hereto have executed this Agreement of
Purchase and Sale of Real Property and Escrow Instructions as of the date set forth
above.
SELLER: MNG Newport Beach, LLC, a California
limited liability company
[END OF SIGNATURES]
ATTACHMENTS: Exhibit A — Property Legal Description
Exhibit B — Property Depiction
Exhibit C — Grant Deed
26-28
Date
Name
Title
CITY: CITY OF NEWPORT BEACH, a California
municipal corporation and charter city
APPROVED AS TO FORM:
Date
CITY ATTORNEY'S OFFICE
Dave Kiff
City Manager
Aaron C. Harp
City Attorney
ATTEST:
Leilani I. Brown
City Clerk
[END OF SIGNATURES]
ATTACHMENTS: Exhibit A — Property Legal Description
Exhibit B — Property Depiction
Exhibit C — Grant Deed
26-28
EXHIBIT "A"
PROPERTY LEGAL DESCRIPTION
The land referred to in is situated in the State of California, County of Orange, City of
Newport Beach, described as follows:
Parcel 1 as shown on Exhibit "B" attached to Newport Beach Lot Line Adjustment No. 94-
12 recorded January 1, 1995 as Instrument No. 95-00037688 of Official Records of
Orange County, California.
Excepting from that portion included within Parcel H, as shown on Record of Survey filed
in Book 76, page 46 of Records of Surveys in the office of the County Recorded of said
Orange County, all mineral rights including oil, gas and other hydrocarbons without the
right of surface entry, as reserved by the City of Newport Beach by deed recorded July
29, 1964 in Book 7153, page 988 of Official Records.
26-29
EXHIBIT "B"
PROPERTY DEPICTION
26-30
EXHIBIT "C"
GRANT DEED
RECORDING REQUESTED BY:
CITY OF NEWPORT BEACH
AND WHEN RECORDED MAIL TO:
Attn: City Clerk
City of Newport Beach
100 Civic Center Drive
Newport Beach, CA 92660
ORDER:
ESCROW NO.:
Parcel No: 047-110-36
Exempt from recording fee per Government Code §§ 6103 and 27383
(Space Above This Line For Recorder's Use Only)
GRANT DEED
THE UNDERSIGNED GRANTOR(S) DECLARE(s):
❑ City of Newport Beach Documentary Transfer Tax is $
❑ unincorporated area City Transfer Tax is $0.00
❑computed on full value of interest or
property conveyed, or
❑ full value less value of liens or
encumbrances remaining at the time of sale
FOR A VALUABLE CONSIDERATION, receipt of which is hereby
acknowledged, MNG Newport Beach, LLC, a California limited liability company, hereby
GRANTS to the City of Newport Beach, a municipal corporation and charter city,
the following real property in the City of Newport Beach, County of Orange, State of
California described in EXHIBIT "A" and depicted on EXHIBIT "B," which exhibits are
attached hereto and incorporated herein by reference and are made a part of this
Grant Deed, with all improvements and fixtures, together with equipment and
personal property, if any, located on or under the land (collectively the "Property").
THE PROPERTY IS CONVEYED TO GRANTEE SUBJECT TO THE FOLLOWING:
A. The Property is sold to and accepted by Grantee "As -Is" and "Where -Is", with
all faults, if any, and without any warranty whatsoever, express or implied.
B. Pursuant to the terms of the Grant Deed dated June 9, 2016 and recorded on
June 14, 2016 as Instrument No. 2016000267576 of the Official Records of
the County of Orange.
[END OF DOCUMENT. SIGNATURES ON NEXT PAGE.]
26-31
IN WITNESS WHEREOF, the undersigned has executed this Grant Deed as of
October , 2017.
MNG NEWPORT BEACH, LLC, a California
limited liability company
IN
Its:
ACKNOWLEDGMENT
A notary public or other officer completing this
certificate verifies only the identity of the individual who
signed the document to which this certificate is
attached, and not the truthfulness, accuracy, or validity
of that document.
State of California
County of }ss.
On , 20 before me, ,
Notary Public, personally appeared , who
proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same in
his/her/their authorized capacity(ies), and that by his/her/their signatures(s) on the instrument the
person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing
paragraph is true and correct.
WITNESS my hand and official seal.
Signature
(seal)
26-32
EXHIBIT "A"
PROPERTY LEGAL DESCRIPTION
The land referred to in is situated in the State of California, County of Orange, City of
Newport Beach, described as follows:
Parcel 1 as shown on Exhibit "B" attached to Newport Beach Lot Line Adjustment No. 94-
12 recorded January 1, 1995 as Instrument No. 95-00037688 of Official Records of
Orange County, California.
Excepting from that portion included within Parcel H, as shown on Record of Survey filed
in Book 76, page 46 of Records of Surveys in the office of the County Recorded of said
Orange County, all mineral rights including oil, gas and other hydrocarbons without the
right of surface entry, as reserved by the City of Newport Beach by deed recorded July
29, 1964 in Book 7153, page 988 of Official Records.
26-33
EXHIBIT "B"
PROPERTY DEPICTION
26-34
CERTIFICATE OF ACCEPTANCE
This CERTIFICATE OF ACCEPTANCE is to certify that the interest in real property set
forth in that certain Grant Deed by and between the City of Newport Beach, a California
municipal corporation and charter city, as Grantee, and MNG Newport Beach, LLC, a
California limited liability company, as Grantor, for property located at 2807 Newport
Boulevard [APN: 047-110-36], located in the City of Newport Beach is hereby accepted
on , 2017, by the undersigned officer on behalf of the City of Newport
Beach pursuant to authority conferred by Resolution No. 1992-82 of the City Council
adopted on July 27, 1992. The City of Newport Beach consents to the recordation of said
document in the Office of the Recorder of Orange County, State of California.
APPROVED AS TO FORM:
CITY ATTORNEY'S OFFICE
Date:
By:
Aaron C. Harp
City Attorney
ATTEST:
Date:
By:
Leilani I. Brown
City Clerk
CITY OF NEWPORT BEACH,
A California municipal corporation
Date:
By:
Dave Kiff
City Manager
RECOMMENDED FOR ACCEPTANCE:
COMMUNITY DEVELOPMENT
DEPARTMENT
Date:
go
Seimone Jurjis
Community Development Director
26-35
ACKNOWLEDGEMENT
A notary public or other officer completing this
certificate verifies only the identity of the individual who
signed the document to which this certificate is
attached, and not the truthfulness, accuracy, or validity
of that document.
State of California )
County of ORANGE )
On before me, , Notary Public,
personally appeared DAVE KIFF, who proved to me on the basis of satisfactory evidence to be
the person whose name is subscribed to the within instrument and acknowledged to me that he
executed the same in his authorized capacity(ies), and that by his signature on the instrument the
person, or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing
paragraph is true and correct.
WITNESS my hand and official seal.
Signature
(Seal)
26-36
Attachment B
Budget Amendment 17BA-006
26-37
City of Newport Beach
BUDGET AMENDMENT
2016-17
EFFECT ON BUDGETARY FUND BALANCE:
X Increase Revenue Estimates
X Increase Expenditure Appropriations
Transfer Budget Appropriations
SOURCE:
from existing budget appropriations
from additional estimated revenues
X from/to unappropriated fund balance/reserves
EXPLANATION:
NO. BA- 18BA-006
AMOUNT:J $4,010,000.00
X
Increase in Budgetary Fund Balance
AND X
Decrease in Budgetary Fund Balance
Org
No effect on Budgetary Fund Balance
ONE-TIME?
B
Yes
Number
No
This budget amendment is requested to provide for the following:
To transfer funds from the Public Arts & Cultural Fund unappropriated fund balance, the Facilities Financing Plan (FFP) unappropriated
fund balance, and the Business Excise Tax (BET) unappropriated fund balance and to increase expenditure appropriations
in the Fire Stations Fund for the purchase of land for the Lido Fire Station 2 CIP voiect.
ACCOUNTING ENTRY:
BUDGETARY FUND BALANCE
Fund Obiect Description
141 300000 Business Excise Tax (BET) fund balance
513 300000 Facilities Financing Plan (FFP) fund balance
514 300000 Public Arts and Cultural fund balance
REVENUE ESTIMATES
OO Object Project Description
53299 691513 Fire Stations Transfers -Transfer In FFP
53299 691141 Fire Stations Transfers -Transfer In BET
53299 691514 Fire Stations Transfers -Transfer In Public Arts and Cultural
EXPENDITURE APPROPRIATIONS
Signed://t 11u
�dal� zaz
VVV"` Fin nc Approva; FinaKc; Di
Signed
Signed:
Administrative Approval: City Manager
City Council Approval: City Clerk
Amount
Debit Credit
$900,000.00 *
$2,305,606.75 *
$804,393.25 *
$2,305,606.75
$900,000.00
$804,393.25
$4,010,000.00
$2,305,606.75
$900,000.00
$804,393.25
Automatic System Entry.
Date
Date
Date
26-38
Description
Org
Number
53201
Fire Stations CIP
Object
Number
980000
CIP Expenditures
Project
Number
15F13
Lido Fire Station 2
Project
String
E-15F13-ROWACQ-532-LAND
Org
Number
51399
FFP Transfers
Object
Number
991532
Transfer Out Fire Stations
Org
Number
14199
BET Transfers
Object
Number
991532
Transfer Out Fire Stations
Org
Number
51499
Public Arts and Cultural Transfers
Object
Number
991532
Transfer Out Fire Stations
Signed://t 11u
�dal� zaz
VVV"` Fin nc Approva; FinaKc; Di
Signed
Signed:
Administrative Approval: City Manager
City Council Approval: City Clerk
Amount
Debit Credit
$900,000.00 *
$2,305,606.75 *
$804,393.25 *
$2,305,606.75
$900,000.00
$804,393.25
$4,010,000.00
$2,305,606.75
$900,000.00
$804,393.25
Automatic System Entry.
Date
Date
Date
26-38
Attachment C
Existing Fire Station No. 2 — Map and Redevelopment Plan
26-39
1
VIA MALAGA
pw N 89-47-36 W
58.98'
/ 5
R
6
1. N 89-58-20 W 9.24'
2. S 44-53-49 E 12.72'
3. radius = 48' arclength = 27:22' angle 32=29=36
4- N -90-0-0-E 4.30'
5. S 0-9-5,,W 9.92' -
6. S 42-57=47 W 1�1.6�71 1`
LIN
9
26-41
Attachment D
2807 Newport Boulevard — Map and Redevelopment Plan
26-42
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26-43
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26-44
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26-45
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26-46
Attachment E
Memorandum from Emergency Services Consulting International, dated June 29, 2017
26-47
ESG
Emergency Services
Consulting International
MEMORANDUM
To: Chip Duncan, Fire Chief
From: Joe Parrott, Senior Associate
RE: Relocation of Fire Station 2
Date: June 29, 2017
I have reviewed coverage from the proposed new location for Fire Station 2 against coverage provided
from the current location. The illustration below shows 4 minute 40 second travel coverage as it
currently exists from Fire Station 2.
26-48
The proposed new location for Fire Station 2 is Newport Blvd. and 28th St. The following illustrates 4
minute 40 second travel coverage from this location.
Fire Station 2's first -due coverage changes very little at the proposed location. I see nothing that would
suggest finding an alternate location.
Good luck with the project.
26-49
Attachment F
Appraisal Report for 2807 Newport Boulevard, dated April 7, 2017
26-50
AYYKAlSAL KLYVKI
C.'UMMhKUTAL LAND
2911 NhWPUK1 13UULEVAKll
N h W PUR l BhACH_ CALIFORNIA
DATE OF VALUE
MARCH 21, 2U1 /
PREPARED FOR
LAUREN WOODING WHITLINGER
CITY OF NEWPORT BEACH; COMMUNITY DEVELOPMENT DEPARTMENT
100 CIVIC CENTER DRIVE
NL' WYOK1 btA(-H, (-AL1rUKN1A `)266U
PREPAKb1J b Y
Nh i l -EF, & ASSUCIA I ES
1 /U E. SEVEN LEEN IH SIREEI_ SUI 1E 206
COSTA MESA. CALIFORNIA 92627
FILE NO. 2017-009A
26-51
NETZEx & ASSOCIATES
RC..I t.;t..tC APP, ':.;.;:,i a.
April /, 2017
File No. 2017-009A
LUL11e„ Wovdiag Whitlinger
Rral Piopcity Ad„u i3icZioe
City of Ne,,vport Beach
Community Development Department
1 uu Civic Center Drive
Newport beach, (-'A,)266u
Ke: Appraisal Services - Uommercial Land
2911 Newport Boulevard
Ne W port Bead,, Cahtoenia
Dear Ms. Wooding Whitlinger:
in accordance with your request and authorization, 1 have undertaken the investigations and
analyses necessary to estimate the Market value, I-ee Simple Interest, in the above referenced real
property. which is the subject of this report. .lames B. Neuer conducted a anal mspcmicn, of the
subject property on March 21, 2017.
Based Upo„ tl,e Work w,dertake„ mid— ,,,y rApe,;e„ce as a real estate analyst and appraiser, I have
fon„ed thr- opimo,,, a3 of the 30`1' day of March 20175, subject to the Assumptions and Limiting
Conditions contained in this report, that the subject has the following values:
Ma, ket Value - Fee Simple Interest - as of March ! 1, 2u 1 i
I WO MULLION SIX HU1NUKED SIX Y-rIVL IHOUSA1NV UOLLAKS
Sz,665,uuumu
Annual lair Market Ground Kent - Pee Simple Interest - as of March 21, 201 /
ONE HUNDRED EIGHTY-SIX THOUSAND FIVE HUNDRED FIFTY DOLLARS
$186,550.00/A..num
l ns letter of transmittal must remain attached to the Appraisal Report, which contains 33 pages
plus related exhibits, in order for the value opinions set forth to be considered valid.
170 1 Sc%en.cen.h Saco. Suite 206 v Cosa hies... CA 91627 v Phone (949) 631-6709 v FAX (949) 631-4631
26-52
Lauren Woocding Whitlinger
April 7, 2017
Page 2
I illvite your aueniion to t11e following summary Appiarsal KCpvrt which has been prepared in
accordance the Unitorm Standa�as of Pinttssional Appraisal Practice (tJSPAr) and me Lode
of ProtCSsiolral EILICJ aua Stanaaccls of Professional Appraisal Practice of the Appraisal Institute.
and sets forth the data and analysis that my opinions are, in part, predicated. l Ilanlc you for the
opportunity ol'serN ing you in this matter.
itespectfudy suomitted,
James . N zer, At
ialiliirni �Ce
r(h 2n rieneral �ppraisar rva. ,�Cd'uG3 i��
26-53
SU1VEVIAKY UI+' SALILIN l NAC; IS
VES11NU Ur UWNLKSrill':
YKUFtK 1 Y AUUKESS:
ASSESSOR PARCEL NO.:
LEGAL DESC RIF l IUN:
PKUP1✓lt I Y 1 Y PI✓:
PltUrl✓K 1 Y 1cIGHTS APPRAISED
SITE AREA:
GUN1NU UA I A:
1MPKUVL~ML-N 1 S:
H16HES l AND BES 1 USE:
EXPOSURE & MARKETING TIME:
VALUE C'UNC.'LUSIUNS:
MUCI.Xt VUILIC - reg Simpie hacciest
Annual Fair Market Ground Kent
MNU Newport Beach LL(-'
A I Newport Boulevard
Newport beach, Ualitornia
047-110-36
Not Provided
Nominally improved 1_:ommercial Land
ree Simple tstate
I2,772 S, .Ft.
v, l ommercial-visitor Serving
1,/;l Sy.ht., drive-thru restaurant <hai is
vacant (former McDonald's)
Kedevelopineut
3 to 6 Months
$2;665;000
$1$6,55U/Annum
26-54
TABLE OF CONTENTS
C:ER PICA H U N...........................................................................
INTRODUCTION ION........................................................................... 3
AREA DESCRIPTION..................................................................... 9
IHE LA N U................................................................................... I U
I AXE S AND A S S E5 S ED V A L V A II UN ............................................... I')
I HE 1 M P1ZU V EME N 1 S.................................................................. 1-j
HIGHEST AND BESTUSE ............................................................... 14
AVVX-A1SAL PROCEDURES............................................................. 10
SALL'J (UMYAKISUN AYYKUAIl-i................................................... I /
V A L U A 11 U N................................................................................ )S
ADDENDA................................................................................... 29
iv
26-55
1811 Newpalt Kuuleva,H
IVewp13rt Keach, Calitvl Ilia Alm 11 7. 1(17 IVN I ZER & ASSOCIATES
UERTIVIUA ION
1 o the best of my knowledge and belief, 1 certify that:
I he statements of fact contained in this report are true and correct.
1 he reported analyses, opinions, and conclusions are limited only by the reported
assumptions and limiting conditions, and are my personal, unbiased protessiollal
analyses, opinions and conclusions.
1 have no present or prospective interest in the property that is the subject of this
report, and have no personal interest or bias with respect to the parties involvl•d.
1 have performed no services, as an appraiser or in any other capacity, rega,dilig
the property that this the subject of this report within the dmu-year period
p, ecedi,lg acceptance of this assigimic lt.
1 have ao bias with respect to the ploprny that is the subject of this report or to the
parties involvrd in tl,c assignment.
My engagement in this assignment was not contingent upon developing or
reporting predetermined results.
My compensation is not contingent upon the reporting of a predetermined value or
direction in value that favors the cause of the client, the amount of the value
estimate, the attainment of a stipulated result, or the occurrence of a Subsequent
event.
I lie reported analyses, opinions, and conclusions were developed, and this report
has been prepared, in conformity with the lr;ode of Yrotessional Ethics and
Standards of Protessional Appraisal Practice of the Appraisal Institute, which
include the Fn?jorni ian7arc7s q1 Prgjessional App,-c,;sc,1 P'-Uelicr.
Ilie use of this report is subject to the requirements of the App,a�sal 1113tauic
relating to review by its duly authorized representatives.
1 have made a personal inspection of the property that is the subject of this repot.
No one provided significant professional assistance to the person signing this
report.
In accordance with the USPAP Competency Provision. 1 rri-city that 1 have the
knowledge and experience to co,,,plcte tl,,3 a33,g,u„C„t and have appraised this
property type before.
Disclosure of the contents of this appraisal report is governed by the bylaws and Ikegulations of
the Appraisal Institute. In furtherance of the aims of the Institute to develop higher standards of
professional performance by its Members, the appraisers may be lequiled to sub,,,il aulho,ized
coma races of said 11131itute copies of this report and any subsequent changes or modifications
thereof.
1 he Appraisal institute conducts a voluntary program of continuing education for its designated
members. MA1's who meet the minimum standards of this program are awarded periodic
26-56
2811 Newport Boulevard
Newport Beach, California Apuil 77 2017 NETZER & ASSOCIATES
educational cert.,tication. As of the Gate of this repot, 1 have complcted dic Xy«irements under
the continuing education pivgian, of the Appraisal Institute.
I have personally conducted an exterior inspection of the real property located at 91 1 Newport
Boulevard, Newport beach, ualifornia. based upon my investigation and analysis. I have formed
the opinion that the subject has a Market value, Fee Simple Interest, as of M.«ch 21, 20177 of.
$27665,000.
Based upon my investigation and analysis, I have formed the opinion that the subject site has a
hair Market around kelt, Pee dimple interest, as of March 21, _'U 1 /, ot: $186,SSU.
1Kespecttully submitted,
James. tzer, Al
Califonu Gcuc •il �pprai er No. AG003143
M
26-57
1811 IVeiviin,t tsunievard
Mrw1,v, t Isearn, v:allivi ,in App i1 1,26 1 IN 1 LER S[ ASSU IA 1 L5
11V l KUllUC;TION
Purpose of Keport
The purpose of this report is to set torch the data, analyses, and conclusions relativC in illy upuiioii
of tlie Maiket Valuc, Fr -cc Si ... p1C haric3i, vt ilic laid and improvements located at 2811 Newport
Boulevard, Newport Beach, California and to estimate the Pair Market uround hent.
P unction of Keport
1 he function of this report is to estimate the Market Value and Pair Market (hound Kent in the
subject property for the Clients internal decision making purposes. This apprai.,al is made at the
iCLluCSt of clic L.durell W003iiig Whitliiigci acid Melissa Gordon, with the City Of Newport Beach,
who are the intended users of this report. In the event that this matter proceeds to trial or other
governmental or administrative hearing, the 1 rier-of-Pact will become an intended user.
Date of Value
My final exterior inspection of the subject was coj,tplemd oil Mucci, 21, 2017, Which is the date of
value presented in this iepoit.
Scope of 1
l his report conveys the results of my investigations and analyses concerning the subject properly.
llie report includes a summary of the intormaion utilized and the methodology L13Cd 111
deteiiiimmg a., estimate of value. 17icc appiaisal process is a systematic analysis wherein data
utilized in estimating the value of the subject property is aUluired, classified, analyzed and
presented. l lie tirst step of the appraisal process involves detining the appraisal problem. l lie
Step includes the identitication of the real estate_ all explaiia;o,i of IiiiiiiiiL4 rui,dii;o,is, stating the
ettectivC date of t,C value c3imlate; idelitification of the property rights being appraised and
determining the type of value being sought. 1 he next step is to gather information on the subject
property such as vesting of ownership, property history and tax assessment information. I lie third
Step is the collection of regional, city and neighbo, hurid data il,at iiifluCLICca iliC value Of ille Subjucl
property through economic forces. Relevant factors affecting the value of the subject property
such as zoning, site and improvement data are considered to determine the highest and Best Use
of the subject property. I he valuation methodology process then discusses die meaningtul
applicatio,is and Ililiitatlol s Of ilio illIM appiOaCliCL) LC valuC, Wliidl arC tiC COSI, SaICS
Comparison, and Income Capitalization Approaches. The comparable market data is analyzed for
comparison to the subject property as determined by the degree of similarities. l lie tlnal step in
die appraisal process is the reconciliation otthe data gathered to determine the tlnal value estimate.
All sections of the appraisal report are structured to show the reasoning and justification utilized
Ai l IVciTim, t liuuitvam U
IVcvv [Jul 1: Main, C.11;101 wa AIn J 1, LUI / IN L 1 LEK& & AJSOCIA I LS
in the estimate or highest and best use and conclusion of value. l lie "Addenda" section of the
report contains various information supportive of the appraisal.
Interest Appraised
Ilse interest appraised is the "1 ee Simple Estate" /l., which i3 def -Med as follows:
Absolitir oivnei-ship une'ncitinhei'ea by any o her in r,,,e i rit' r-siCLIC, stip CCt only 10
/ht ltNtti(71tr.1rI tnrPr7 CCI by I/M gDvCt'itntuftiutl 1-10IVEI's Of to alion; eininei71 clomain,
POhC'e 1)(,r et' and escheal.
Market value Defined
l he term "market value"/', as used in this report, is defined as follows:
The most l)robable I)rice YYhich a propel"ly .Moz c7 bring in a Lony3einive aiO open
incti'kel ilndei- all cO7lc7ilions 1'equisile to a fCih- sale, the buyer and settri' earn acitnX;
I)i-10enlly unci knotl?lecVgeably, and assuming rhe price is no/ affected by lritCLE
sT i171 ill11S.
implicit In this definition Is the consummation Of a sale as of a specltled date and
the passing Of title trom seller to buyer under conditions whereby:
Liuyer and seller are typically Motivated -
both parties are well -Informed or well advised, and acting in what they cottsidc
then' Own best interests;
A reasonable time is allowed for exposure on the open market;
4. iayment Is ]Made In cash in U.S. dollar's of Ill terms of financial a,7eaugc,,,Vuts
comparable thereto; and
5. I lie price represents the normal consideration for the property sold u,taffrCted
by special or creative ttnancing of sales runress;ous granted by any one
associated with the sale.
Market Rent Defined
The term "lviarket Kent"P, as used in this report, is defined as follows:
I he n7ost pi'O%)able i'ew ihal a pi'Oj)erTy should bl'in5 in rt Critc7 riPCrr
111Ci1'kel re
fleciing all conclnions ekiri t'C.i/t'iet; tint rif die sjjrr f rr7 bCa.ie aiT,,eeinei71
including iei-in, i'Cnial acgjilsintefd rrnrl t'C JCrltrrtlim" PCt7tn//CCl IIS( --5', IIA; /'es11'icti011s,
and exI-)ense! ribltgrzitGns' ilte lesser- and less0l' each acting tn-liclenily and
k,,r, /r-rIterttily, attrl Ct3.iam rig consiimn7ation 0f a lease conl1'act as of a .Sj-)Ccif/ed
dile and the passing (�f the leasehold from lesso/' to lessee- under conditions
1I'herehy:
1. Lessee and lessor are typically motivated;
!. Both parties are well-informed or well advised, and acting in what they consider
their best interests;
ANNtatn.tl Iuatttutr-, I It'c UiCtiMiaf ), ut KCal taAAC ANNL.tk tl, I'uitith L'aitiuu, (CIuCat7To, ZOOZ), p. 11-.
ANNiAiSal IIIA;tutC_ I Inc U;C6011d1 Y of Mal Etat A,j.,talaal. 1'Outtlt tatttutt, (C.IttCaZu, ZUUZ), p. 1 / /-178.
ANpi,t;3 Tl luatitutc, I I.0 UlCtivn.0 v Of Kcal tatatC ANNtatnaL I-ullltll ttlittuu, (C.IuCUCV, 1002), IJ. 1 /5.
M
26-59
igi i IVe.vlrolt 15uaievara
RUM I t Heat%, cali1a1 nia Alm it /, 1917 NETZER & ASSOCIATES
J. A reasonable time is allowed for exposure on the open market;
4. The rent payment is made in terms of cash in United Sates dollars, and is
expressed as an amount per time period consistent with the payment schedule
of the lease contract;
5. 1 he rental amount represents the normal consideration for the property leased
unaffected by special tees or concessions granted by anyone asseciated wiih the
transaction.
Probability of Chani -e
The market value of the subject property appraised is estimated as of the date of value stated in
this report. C onstantly changing economic, social, political and physical conditions have varying
effects upon real property values. Even atter the passage of a eelatively 31mit period of time,
property values stay chalrbr, 3ub3tantially and reLluire a review based on differing market
conditions.
Ecaal ties,
A complete legal description of the subject property is attached to the Grant Deed (2016-26-/5-/6)
that is included in the Addenda for reference.
Owner of Record and Property History
Based on a review of the Orange County Public Records; as of the date of value, title to the subject
property is vested as:
MNU Newport Beach LL(.'
A review of the Public Record indicates that the current owner acquired the subject property on
June 14, 2016 from McDonaffs Corporation. The transfer was recorded a3 Geaut Deed 2016-
267576 and the doCuu1C11tae5 transfer tax ($2,172.50) indicates that the sale price was $ l ,`J /S,uuu.
The seller included the following Covenant on the Grant Deed:
C. As consideration for the sale of the property described on Exhibit A (the
"Premises") from Grantor to grantee, by accepting this deed, Grantee covenants
that (i) the Premises will not be used as a restaurant, or for tool service purposes
(which includes and type of tood or drink), drive-in, drive-thru or walk-up
eating/drinking facility (including without lu ntatlou a k;osk, stand, booth, v1 aeca
located inside another business facility) toe .r prfiod of 20 yccaez, feon, t11c date of
this deed; provided however the u3C rft11C P1e1111ses foe d,V opCeat1o11 of a 7 -Eleven
retail couveu1C11CC stoer will not be a violation of this restriction (ii) this restriction
and any, other restrictions in this deed are for the benefit of any land owned or leased
by Seller or its affiliates at the locations commonly known as /uu west Pacific
Coast Hwy., Newport Beach, CA 92660, 6,5 west 19'11 Street, costa Mesa, CA
9262 /, 23UU Harbor Blvd., Suite M, Costa Mesa, CA 92626, and (iii) this restriction
is a covenant running with the land and is binding upon Grantee, Grantee's heirs,
administrators_ successors and assigns.
W
2811 Newport Boulevard
Newport Beach, California April 7; 2017 NETZER & ASSOCIATES
I lie Umnt lleed has been included in thcc Adde„ da for reference. It should be noted that the client
requested that I not contact the current owner as they are considering the acquisition ot, or ground
leasing Of, the subject property. 1 lie property is currently being marketed "Tor lease" as a proposed
6,2b11 SLluare foot retail building.
A review of the Public Records indicates that with thr, uxcept;o„ of the above transaction, the
3ubjCM has bcc„ uiid'ci Co„t,,,uouS Ownership In excess of three years. I have not been made aware
of any current listing for sale, offers to purchase or pending sales.
)ns and Limitina uonditions
I lie analyses and opinions in this report are subject to the following assu,,,pt;ons and limiting
conditions:
Hypoihctieal
lie subject is currently improved wah a McDonald's dive-thru restaurant that is vacant and the
covenant ;,,cludcd u, ilii, U a„t Dcr_d suggests that It will be razed for the redevelopment Of the
Sac. I havr not bcCu piov,drd with any demolition cost related to the removal of the building. I
;ese,ve the right to make such adjustments to the analysis, opinions and conclusions set torth in
this report as may be required by consideration of additional data or more reliable data that may
become available.
heneral
No investigation of title to the property has been made, and the premises are assumed to be tree
and clear of all encumbrances, leases, use restrictions, easements, cases or actions pending, except
as specifically discussed in this report. I itle is assumed to be good and marketable-,aid that the
property is under responsible ownership_ competent management and ava;lable fn.-as highest and
best use.
No survey, legal, Or engineering analysis Of this property has been made by the app,a„mac;. I .1SSU111e
no responsibility for any Condition not readily observable from the CuStO,,,a;y u,apeCt,On Of the
premises_ and that there are no hidden o; u„appa;rrut conditions of the property, subsoil or
Structures that ieadei ,t u,O,C O, lc33 valuable; except as noted herein.
I lie 1St;,but,0,,, ,t any, of tl,e total valuation in this report between land and improvements applies
oily u„dci the stated program of utilization. The separate allocation for land and buildings must
not be used in conjunction with any other appraisal and is invalid if so used.
The maps, plats, photographs, and exhibits included herein are for illustration only, as an aid in
visualizing matters discussed within the appraisal. 1 hey should not be considered as surveys nor
relied upon for any other purpose, nor should they be removed trom, reproduced, or used apart
from this report.
1 assume no responsibility for economic or physical tactors which may attect the opinions herein
stated which may occur at some date atter the date of value. I reserve the right to make such
1d1tistmentS to the analysis, opinions and COuCIu310113 act forth, u, this ;cpO,t as u,ay be required by
co„side,at,0„ of add,t,v„al data v; ,,,o;c reliable data that may become available.
b
26-61
2811 Newport Bualev°ar8
Newport Beach, Callim uta April 77 2017 NETZER & ASSOCIA IES
Intormatlon contained in this appraisal has been gathered trolls Sources, which are believed to be
reliable, and where feasible, has been veritied. No responsibility is assumed for the accuracy of
information supplied by others.
No opinion is expressed as to the value of sub-surtace oil, gas, or mineral rights, or whether the
property is subject to surtace entry for the exploration or removal of such mateiials except as
CApLessly stated.
l l,e piopefty is appraised assuming it to be in full compliance with all applicable federal, state,
and local cuvifoimiciiial iebulatio,,3 uiid laws, unlc33 mlici wi3C 31aLCd.
I he p,opefLy is appraised assuming that all applicable zoning and uSC regulations and restrictions
have bec„ complicd with, unless oil,cfwise slated.
l lie peopefty i3 appiaised asStullutE; that all icyuiX3 IleG11JCJ, CcfLificaicS of occupancy, consents,
or other leglslativC udmimKialivC authority from any local, state, or national government or private
entity or organization have beea or can be obtained or renewed for any use on which the value
estimate contained in this report is based, unless otherwise stated.
1 11e Americans with Disabilities Act ("ADA") became effective ,January 26, i v')2. 1 lie appraiser
has not made a specific compliance survey and analysis of this property to determine whether or
not it is in conformity with the various detailed requirements of the AUA. It is possible that a
compliance survey of the property, together with a detailed analysis of the requirements of the
ADA, could reveal that the property is not in compliance with one or more of the requirements of
the Act. If so_ this fact could have a negative eftect upon the value of the peopccfty. SiLICC LIic
appra;see has no d;sect evidence cclaLuib in this issue, possible noncompliance with the
ret.luirenlents of the ADA in estimating the value of the property has not been considered.
U,iless otliefwise stated iu this iepoit, the appraiser did not observe the existence of hazardous
material, which may or may not be present on the property. The appraiser has no knowledge of
the existence of such materials on the property. 1 lie appraiser, however, is not qualified to detect
Snell Substances. l lie presence of substances such as asbestos, urea formaldehyde roans insulation,
or other potentially hazardous materials may affect the value of the property. I lie value estimate
is predicated on the assumption that there is no material on or in the property that would cause a
loss in value. No responsibility is assumed for any such condition_ or for any expertise or
engineering knowledge required to discover them. I lie client is urged to retain an expert in this
field, it desired. If the client is aware of becoMes awaie of airy ea�d;T;�«�, Ll,e appia13'ci Should be
co�i�ulT'cd iiiiiiiCdiaL'cly Lo a33C33 11r- iiiipuct, it airy, upon the market value.
I lie appiai3ei iCseivCS the tight Lo iiiake Such ad]u31111'cIIIS Lo Lhc valuaTioii 1XICiii 1cpMLcd, a3 May
be iCLlu,i'cd by eo«„dcicaio„ of additimal data o, ,,,ore reliable data that may becnincc availabIcc.
No opimm, 1J ;,iteiided to be cnprCSsed, of implicI, tof maucC 3, which require legal c.Xperiise of
specialized investigation or knowledge beyond that customarily employed by real estate
appraisers.
I shall not be reLluired, by reason of this appraisal, to give testimony or to be in atte,idance in couit
or any governmental or other hearing with reference to the property without prior arrangements
having first been made with me relative to such additional employment.
vossession of this report, or a copy thereof, does not carry with it the right of publication. it may
not be used for any purpose by any person other than the party to whom it is addressed without the
written consent of the appraisers. 1 do not authorize out of context quoting, nor partial reprinting
of the report. In the event the report is placed in the hands of a third party, it is requested that such
7
26-62
Lgl 1 iv!-11vrt uuniu—.11
N—c-I1v1i ucacl., CC.I.fvrnin April /, LUI / IVE 1 GLK N A550 IA 1 L5
party be made cognizant ut a11y and all Iiiii;I;i,g conditions resulting in the basis of my employment
and the discussions thereto, as well as those set forth herein.
The submission of this report constitutes the completion of the service authorized. It is submitted
upon the condition that the client will provide the appraiser customary compensation relative to
any subsequent required deposition, conferences, additional preparation or testimony.
1 lie appraiser respectfully requests that neither all nor part of the contents of this report shall be
disseminated to the public through advertisement, public relations, news, sales, or other media.
without written consent and approval of the author, particularly the valuation conclusions, the
identity of the appraiser, or any reference to the Appraisal Institute or the MAI des;gnatioll.
In the event the appraiser is subpoenaed for a deposition, judicial or administrative ploceedillb,
and is ordered to produce the appraisal report and tile, the appraiser will immediately notify the
cnlployer.
It shall be the responsibility of the employer to obtain a protective order.
111e liability of Netzer & Associates and the appraiser responsible for this report ;s t; 111;ied in the
Client only and to the fee actually received by the appraiser. further, there ;s 110 aCCoulltab;lity,
obl;gat;oil of I;ab;lity to any third party. If ihi3 ecpolt is placed in the hands of anyone other than
the client, the clicia shall 111akc such Darty aware of all limiting conditions and assumptions of the
assignment and related discussions. The appraiser is in no way responsible for any costs incurred
to discover or correct any deficiencies of any type present to the property -- physical, tinancial,
and/or legal.
it is agreed that the appraiser is not a necessary party in any inquiry or judicial proceedings. If
called upon to testify in any litigation or other proceeding arising out the duties in this matter, and
if I am compelled to incur court costs, attorney's fees or other out-of-pocket expenses in coafiectio.l
With court proceedings, such costs or expenses, together with the appraiser's usual 110«; ly pCf d;C111
applicable for study, preparation, testimony or travel will be paid by tl1C party (n1 palt;es) wllo acts
in bfing any 3u1t 1Cqu11111g a llld;tial proceeding.
A11y dlapulC of Cla1111 1110C w1i11 lespert to this report shall be Submitted to and resolved ill
accofd,mcc with 111e 1 ulCS of the American Arbitration Association for arbitration, and the decision
of the Association shall be binding. All appraisal services, pursuant to this report, shall be deemed
to be contracted for and rendered in Orange County, Lalifornia, and any arbitration or judicial
proceedings shall take place in Urange Lounty, L;alitornia.
Tile signatory of this appraisal report is a member of the Appraisal Institute. I lie 13ylaws and
ltegulations of the Institute require each member to control the use and distribution of each
appraisal report signed by such member. 1 herefore, except as hereinafter provided, the party for
whom this appraisal report was prepared may not distribute copies of this appraisal report, in its
entirety, without the written consent of the signatory of this report. I lie report and parts thereof
and any additional material submitted, may 1lot be Used ;11 ally piospecitls of pf;l,ted material used
111 Cniqu11it1011 w1t11 1I 3alC Ct fAiC3 of paftiLlpaliM1 111iCfU313 111 any 13ublic ()ttce,,,g a3 dct111Cd
Wider US -SCrLLf;ty laws. Further, neither all nor any part of this appraisal report shall be
disseminated to the general public by the use of advertising media, public relations media, news
media, sales media, or other media for public communication without the prior written consent of
the signatory of this appraisal report.
8
26-63
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rights resaroed. Parl ions dl (Iapyni6ht 3a121 y wac dal Put ical'ons Corp. All n'ghts remarve(. 26-64
2811 Newport Boulevard
Newport Beach; California April 7; 2017 NETZER & ASSOCIATES
AREA DESCRIFFION
1 11r3L,bjcit 13 located iii the City of N'cwport Bccach 111 roastal Orange County. More specifically,
the subject is located in the Lido Village/Cannery Village neighborhood adjacent to Newport
Harbor. Newport Harbor is the local point of the incorporated city of Newport Beach_ which is
located in coastal Urange County approximately 10 miles southwest of the Santa Ana C; v is Center.
The coastal city vvas ;11co,po,atr,d on September 1, 1906. The State Department of rinance reports
an estimated population of 95,1$6 persons, as of the 2U t U Census. According to the City Chamber
Of Commerce, the 11111Ux Of the tourist population during the summer niond,s ulc;ca3ccs thr,
population to well over l UU,000 persons.
Will, ll,e u1111CAaliO11 of Newport Coast, the City is comprised of approximately 25 square miles of
land area, approximately 25.5 square miles bay, harbor and ocean waters for a total area of
approximately 5U.5 square miles. 1 tie city has 6.1 -miles of ocean frontage and 25.4 -miles of
harbor frontage. Newport Harbor is one of the largest pleasure craft harbors ol, the West Coast
a,1d ;s home to approximately 97900 boats, 1,200 piers, 2,300 commercial slips and side ties and
l ,2UU moorings
Newport 1-larbor is formed by the Balboa Peninsula on south and the mainland On the north and
extends inland to .Jamboree Koad and the north end of the Lipper Newport Bray (Back Bay).
I md4ionally, most of the boat;,,g act;v;ty w4hin the harbor is concentrated in the Lower Bay as
most of the Back Bay is an ecological preserve with limited boating facilities (Newport Dunes,
Newport Aquatic C enter, U.(- .1. Kowing base, Bayside Village and Uover Shores). I lie Balboa
Peninsula consists of all the contiguous land east of 45`x' Strect UAIV111118- to Peninsula Point and
the jetty at the mouth of Newport Harbor. The south side of the Peninsula consists of sandy beaches
on the Pacific Ucean while the north side of the Peninsula forms the southern perimeter of Newport
Harbor.
Access to the Peninsula is via Newport BVL11r,VZ11d_ SUper;o; Avenue/Balboa Boulevard; or the
fU111ot1S CLUM fr,11y that ;tens between Balboa Island and the Balboa Peninsula. Newport BOtllevard
merges with Balboa Boulevard at 21" Street near mcradden Square and the Newport Pier and
Balboa Boulevard continues eastward to the end Of the Peninsula and eventually turns into Channel
Koad. Access the inland side of the Harbor is via Coast Highway, Bayside Drive and Harbor
Island Drive. Additional access is afforded to the residents of the eight islands that ring the harbor,
whicli include Newport island, Lido isle, Linda isle, Harbor island, Bay Island (tile only island
with no vehicular traffic), Balboa Island, Little Balboa Island and Collins Isle.
As noted above, the subject is located in the Lido Village'C;annery Village 1,cighbo;hood, whid,
is a mix of residential a„d co,,,,,,r,rr,;UI Uses including restaurants and harbor related businesses.
V
26-65
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Ncvv ,i,. t HE -101, Al,i;l /, ZUI / IN 1 GLIt N ASJUC.IA 1-L5
llie primary access to the neighborhood is via Newport b� oulevard, via Lido, Lafayette and 2°�
Street. A Location Map has been included on the previous facing page_ which shows the subject's
location ielati,,e to the surrounding comiiiuiiity CIA tianspoiiaiholr ,ietvvork.
THE LAND
Location
I lie subject has frontage On Newport boulevard on the east and west and "?8'I' Streit on [lie soLrtll_
;11 the City of NCwport beach, C'alitorll;a. The location corresponds to the street address of 281 1
Newport Boulevard, Newport Beach, California. i he Orange L..ou my 1 ax Assessor identities the
subject as Assessor Parcel U4 /- l UU-36.
size and Shale
A review of the Assessor Parcel map and Exhibit B to Lot L;ix Adju�Lr11C11L 94-12 indicates that
111C 3Lrb1CCt 11a3 U 31;gl,tly 1117C6UlUr 3l,cipc with a gross area of 0.408 acres, or 1 /, / 12 sLluare feet.
The Assessors Plat Map has been included on the racing page for reference and Exhibit B of Lot
Line Adjustment 94-12 is included on the next racing page.
Streets and Access
Newport Boulevard is a primary arterial that has a nodi/south ou%uicZirou. BcasCd 017 a revlevlr oil'
the Asscssor Plat Map southbound Newport Boulevard is dedicated to a width or 1m -feet. It is
center crowned and improved with asphaltic concrete paving; concrete curb, gutter and sidewalk,
and electric overhead street lighting. It is a one-way street (southbound) on the west side of the
su bjeCL location and there are two SOUthbound traffic lauiC3 with mr-icecd paik;iig is both sides of
the street. The subject has two curb cut driveways on southbound Newport boulevard.
On the east side of the subject, Newport Boulevard is dedicated to a width of 6U -feet. 1t is center
crowned and improved with asphaltic concrete paving; concrete curb, gutter and sidewalk; and
electric overhead street light;rig. It ;s a ohne-way �LrCCt ai 111C SubjCCI lUCai;oll and there are two
northbound traffic lanes with metered parking is both sides of the street. The Subject has a single
curb cut driveway On northbound Newport Boulevard.
281I' Street has an east/west orientation and connects to southbound and northbound Newport
Boulevard at the subject location. I lie ;,itersecthoi, of hloeillbvurrd New"pori Boulcvaid surd 8"'
Street is signalized. It is dedicated to a width of 6u -feet and is center crowned and improved with
asphaltic concrete paving; concrete curb, gutter and sidewalk; and electric overhead street lighting.
I here is a single, traffic lane in each direction with metered parking on the south side of the Sweet.
I lie subject has no vehicular access to 28`x' Street.
I
26-67
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i
2811 Newport Boulevard
Newport Beach, California April 7, 2017 NETZER & ASSOCIATES
!TopograjjhY and Hfaina9t,
Based on my inspection, the subject has a generally level topography at street grade. The subject
was inspected during fair weather; however, it appears that the drainage is generally toward the
perimeter of the site.
Goin
I lie Uity of Newport beach has assigned the Con aieicial-Vis4oi-Sciv,,,g (CV) 1-niting
classification and Land U3e Desig„atio„ under the City's General Plan is Visitor -Serving
�_ommerciai (�_ v) with a U.5U Moor area patio (VAK). 1 he lav zoning district and Land Use
Designation Sime the following:
I he l'V is intended to provide for accommodations, goods. and services intended
to primarily serve visitors to the City of Newport Beach.
A irvirvv of dic Com leccial LO„i„ g iCLluiX111CiitS includes the follo,ving permitted uses: cultural
institutions; handicrafts industry; alcohol sales (accessory to primary use); marine retail sales;
visitor serving retail; financial institutions and related services; business and medical offices;
professional offices (above l`` door); animal retail sales and grooming; art studio-, food seivice
(their- 1S a peivaic Cevcuaut that piolubits this use); health & fitness services (under 2,000 S.-I.Ft.);
marine entertainment and excursion services; nail Salons; general personal services; postal
services. Studio; vehicle/equipment rental and sales office (only) and outdoor storage and display.
Other uses are permitted with the issuance of Co„d;tio„al Use Pe, -nit (CUP), a Miaoi Ljsc Pe,,,,;t
(MUP) or a Limited Term Permit (LTP).
The Development Standards do not include a minimum site area or minimum dimensions. AS
noted, the floor area ratio (PAK) is U. -')U. 1 here is no front yard setback and no side yard setback
unless the property abuts a residential use then a 5 -foot setback is required. the rear yard setback
is 10-fC'ct fio,,, an alley, 5-fer-t abUlling residential use otherwise there is no rear yard Setback.
1 here is no "Open -Space” requirement. On-site parking is required based on the use and generall}
one space per SSU square feet for most commercial use is required.
1 lie above is a brief summary of the zoning information and the reader is urged to consult with the
City ,f ally fuiuiC Xdcv'clepu,C„t of tl,c Subject property is ant,c,pamd.
Soils and RY
I have not reviewed a soils or geo-technical investigation for the subject site; however; no obviouS
signs of settlement that impact the structural integrity of the improvements were noted during my
physical inspection. It is assumed that there ate „e and of geotechnical conditions that impact the
�tiuCtuial ,,,tcgi,ty vi lead bcai,,,g Capacity of the subject. It appCaia il,c aim ,J au,tablc u, load
bearing capacity to continue to support the existing improvements or any improvements proposed
2811 Newport Boulevard
Newport Beach; California April 7; 2017 NETZER & ASSOCIATES
In the tuture- however, it is beyond thu scope of this a33ignnient to determine the soils and geolug3
of the site.
Utilities, Water and Sewer
All of the necessary utilities including sewer, water, gas and electric service, are available to the
site. According to the City, the tollowing entities supply utility set vicC3 to tI,C 3L,bject:
Water: laity of Newport beach
Sewer: City of Newport Beach
(Jas: 1 he Lias Company
Electricity: Southern Calitorn�a Ed;3m,
L~ asemems and Encroachments
1 was not provided a Preliminary Title Report that appliu3 ILC subject. Based on my inspection of
site and improvements there are no obvious signs of any adverse easements or encroachments that
would adversely impact the subject. Ilie existence of typical utility easements, that do int
adversely impact the subject, is assumed.
As previously noted, the seller included the follvvvi„ g; CovC,tant in the Grant Deed that transferred
Ilse pfoperty from McDonald's to the current owner:
C. As tot the sale of the property described on Lxhlblt A (the
"Premises") from Grantor to Grantee, by accepting; this deed, grantee covenants
that (i) the Premises will not be used as a restaurant, or for food service purposes
(which includes and type of food or drink), drive-in, drive-thru or walk-up
eatingtdrinlcing facility (including without limitation a kiosk. stand, booth, of at Ca
located inside another business facility) for a pefiod of 20 yeaf,, ffmii the date of
this deed; provided however the use of d,c P,Ct„ises for the operation of a 7 -Eleven
retail convenience stoic will uui be a violation of this restriction (ii) this restriction
and a„y otl,C, fC3ij imiut,3 it, tl,ia deed are for the benefit of any land owned or leased
by Scllr, of its affiliates at the locations commonly known as iuu west vacitic
Coast Hwy., Newport Beach, CA 9266u, b.i5 west 19”' Street, costa Mesa. CA
9262 i, 2300 harbor blvd., Suite Nl, Costa Mesa, CA 92626, and (iii) this restriction
is a covenant running with the land and is binding upon urantee, Urantee's heirs_
administrators, successors and assigns.
Environmental Conditions
I have not reviewed a Phase 1 environmental siiC that applic3 to the subject property.
It beyo„d the scope of this assignment to assess the presence of any toxic contamination, if any,
and it is an assumption of this report that there is no contamination in or on the subject site that
would impact the conclusions presented.
0
26-70
LS11 IVCvyput t 6ijuiuvarU
IVC-IjUl 1 bead., l.. aha. 111a Art. /,201/ IN C. 1 Gt.K & A5504 -IA 1 ES
IAXES ANN) ASND SSLIJ VALUAI101N
1 tie subject is located in 1 ax Kate Area U /-UU i with a "Base 1 ax Kate" of I .U4`/56 -percent of the
total assessed value. Based on a review Of the Assessor records, the pertinent ta'% ;„for,,,atio,l for
tax year 2016/17 is Suiiu11EXI zed ,,, the follOw,,,g iablC.
Assessor Parcel No.
U47 -I 10-3j6
1 ax Rate A; ea:
07-001
Base "tax Rate:
1.04956%
Assessed Valuation
Land:
$ t,68�),uuu
Improvements:
292,000
1 otal Assessed Value:
$1.9 /5.000
2016/2U I/ I axes:
$24.220.16
I'I,C a,.,,ual taxca are app,ox;,,,aicly 1 % Otthc MICtl CL33CS3Cd value. However, since the passage Of
Proposition 13, in California real property is re -assessed upon transfer or title or sale to reflect tele
current market value. Accordingly, the actual taxes are subject to change; however_ there does not
appear to be any reason for the taxes to escalate rapidly in the fUtUfC. 1lic abrivC taxes include
$'Y,491.36 ;,, D;ccct A33es3,,,C„t3 a„d/or Usce Fees. The Direct Assessments/User Fees are a fixed
fee and are not based on the assessed value. 1 axes and assessments on the subject property are
similar to that of the neighborhood and surrounding competitive Com11111mLies.
THE IMMOVEMENTS
I have not been provided access to the subject imp,ove,,,C„ is aid tl,c fellow;,,g dCsur;ption is based
on a review of the City, building permit file, the pubic record and an exterior inspection of the site
and improvements. the subject is improved with a drive-thru McUonald s restaurant that is
Currently vacant. the building permit file indicates that a 1,500 square foot bUild;,,g waw
completed ;a 1995 with a 2371 sgUarC f6m addition completed in 1996, suggesting that the total
building area is 1,731 sLlLtare feet. Descriptive photographs of the subject are included in the
Addenda for reference.
1 tie improvements are wood trance and stucco construction with a flat roof. l hey include a drive-
Lhru lane and a small patio area. As noted, 1 was nm propiacd a=33 to il,C ;,,t'cfinf ofihC peopccfiy,
however, it is presumed that the building includes a kitchen, dining area, men's and women's
restroonis, dry storage and a walk-in refrigerator7freezer. t lie interior finishes and appointments
are assumed Lo be "typical of a similar vintage McDonald's drive-Lhru restaurant.
Ilie site is improved with a drive-tllru lane_ open dining patio, trash enclosure and surface parking
lot. U„ the basis Of illy COLuIt, there .,, a total of 28 pa,ku,g SpacC3, ,,,Clod,,,; 2 ha„d,Capped spaces.
26-71
2811 Newport Boulevard
Newport Beach, California April 7, 2017 NETZER & ASSOCIATLS
As noted, the improvements are vacant and they, are surrounded by a chain-link fence. 1 he overall
condition is judged to be tair and given the covenant that was included in the Grant Deed and
prohibits food uses, it appears that they are of no contributory value. It should be noted that the
Cuireta owriCi is rriaiket,,,6 a pinpo3rd 6,750 toot retail building (4 retail Spaces) "Fol'
Lease" at an undisclosed lease rate.
t-lIU LS 1 AIV) BES 1 USE
"t-tignest and best use'' is an appraisal concept which is defined in 1 he Dictionary of Real Estate
Appraisal, 1'ot1111i Edition• as follows:
/he! 1'CCl. oncibIj, piwbcible Lind legal use! Uf vcrrcrfa Icrrrcl rrt' crit imlwrwrd pr'[r11e,,1y'
is 1J17Jlsicall)�Possihle, Cr17171'b1Jr'rt7lL'ly'.icr1�ibr'ICCl, fnrt7rrCrcr//l'.fCCl.i/h/(, Crncllhca
I 'Sidis i,, ihr h lirsi Jrrhtc. IhC friar' Cir[M*i(i MCll W11.i1 hL III(-/ Cll'C' legal
/iCr'rrrl.i.irlrrlr!)f, 17/r�'3rCcll pris.ilhl/i1J, f111Cl17ClCll fGLl.Slhl/1/y, and n7crx%Jlnun171'CJfl1ctWTl1)1.
Inherent in this definition are several conditions, which must be satisfied by the existing or
proposed use in order to develop the maximum value. I lie use must be physically possible for the
site. Soil condition, topography, size and shape must be compatible with tl,c proposed use. The
u3C uur3t bC ICgallyy pCirut33cblC ur that rt must conform to current of projected zoning. Similarly,
the use must not be precluded by deed restrictions or other encumbrances, wlilcli may 1117111
potential uses. Also, the use must be economically feasible. t he market should indicate Sufficient
economic demand so as to support, a proposed use of the site. Anro,rb the vai iOus uses that meet
the abnNc Cirt'cir�c, dir u3C whiCh creates the greatest fate ofreturn and maximum productivity is
considered to be the highest and best use of the site.
t-lighest and [3est use Lriteria - As If vacant
I lie following is an examination of the subject parcel_ as if vacant_ in regard to the four criteiia.
I lie size and shape of the paicel will physically allow for the development of a broad range of
permitted uses. As previously indicated, the subject has been assigned the t_:onimercial-Visitor-
Serving ((-,v) zoning classification and Land use Designation under the I✓'ity S General flan is
ViSilor-serving Lornmercial (CV). Ilie CV zo,iiug dr3tirct aid Laird t'JC uc3ignatlon State the
fvllowirtb:
I he CV is ir,tetrded to pmvrdc foi accommodations, goods, and services intended
to pfimacily 3Ci vC visitois to the City of Newport Beach.
In addition, to the underlying zoning and Land use Designation, the subject is encumbered by a
l_ovenant that excludes the site from being redeveloped Willi "food uses".
Ilie underlying zoning and land use designations permit commercial development, without a
residential component as reelected by i UCh of the XdCvClop,rXnT irr the ir„trtediate area that
includes either -live -work" units with ground floor commercial space and either one- or two-story
14
26-72
2811 IVuwpO, t Mulev:u U
Nuw1101 t Buach, Chlilul Ilia Aln it /, 2U17 IVC I LLM & ASSOCIATES
residential uses above in the mixed-use zone along the watertrotit or in Cannery Villa&e, or two-
story residential units in Lido Village. A prime example of this is the "Canners- Lofts"; ,hich
were developed in 2004 and occupy the 500 -block of 301' Street (between villa way & Lafayette
Avenue) and four waterfront lots on Lafayette Avenue (29ub thru 2912). 1 here are several other
examples of smaller (I or 2 lots) in -till mixed-use projects throughout Cannery Villa8c. A ziCCvud
c,{a,l,plc 3 tl,c NCwpoit Bay Manila, vvhid, 13 a watcifront mixed use development that is under
construction along the waterfront at 2300 Newport Boulevard. Along via Lido and via Oporto,
an office building has been razed for the construction of a 2�_'-unit condominium project (19 -
dwelling units per acre); however_ this project appears to have been put o„ 11MId. File assemblage
of this Lt11d it,volvcd scvelal transfers among related entities between 2000 and 2u 1 l and the exact
sale price for the entire project could not be contlrmed with any certainty. According to the Public
1Kecord, one portion of the site (I /,-)OU Scl.H.) sold in Uecenlber 2012 for $2,SU07000; Mr $142.58
per square toot; however; the partes to ilic I1a,,3actlou would not confirm these terms. A complete
Highest and Best Use analysis to assess the specific use is beyond the scope of this assignment;
however, based on the location relative to the surrounding neighborhood and the underlying
zoning, in my opinion, the liigliest and best use of the subject parcel, as if ,araia, "Mild be to
redevelop the site with a co„1111e1Cia1 devC1Mp1,1ent as permitted under the existing zoning and Land
Use Designation and taking into consideration the covenant that limits redevelopment with food
uses. 1 his would be similar to the proposed retail redevelopment of the subject that is being
marketed "Por Lease'.
Highest and Best Use - As Improved
I hC ft1l1Mwi1,; 13 a1, CAc1111i11atiM11 Mf 111C subject property, as improved; in regard to the four criteria.
The subject improvements fit well in the neighborhood, which is zoned for visitor -serving
commercial use, but is subject to a covenant that prohibits "food use'' for approximately 20 years.
I lie existing improvements are a freestandiHg, dr1vC-111ru eVStauralli that was previously owned
a11d Mpr atcd by McDonald's. Given the special purpose nature of the improvements as a
McDonald's restaurant, it is unlikely that they can be economically re -purposed for a permitted
use that does not include a tood use component; however, I have not been provided any cost
estimates for il,c X-pulp113111g Ut thr existing improvements. In addition, the current owner
acquired the property for redevelopment and the sale price reflects the value of the underlying land
subject to the covenant and the subject is currently being marketed as a proposed 6,230 square toot
retail building oh a "Por Lease” basis. Un the bass of the above and the ma kct data tlncodercd, I
have concluded that the current improvements should be razed for re -development of the site. 1 his
type of utignest and Best Use recognizes that the existing improvements no longer retlect the
IFI
26-73
2811 Newport Boulevard
Newport Beach, California April 7, 2017 rvETz.Gtc M ASSOCIATr,5
,'maximally productive" use and the market demand; subject to the restrictive covenant suggest
that the underlying land value exceeds the value of rine site "as -improved".
AYYKAISAL FROULDURES
I he appraisal of real property generally involves one, two or three of the conventional app, oachc3
to value, and is based upon coas;de,at;on of ,na,ket-dac;vCd data, the experience of the appraiser.
and opinions of other informed market participants.
Valuation
I hree basic approaches to value are available to the appraiser: the dost Approach. the Income
Approach, and the Uirect, or Sales uonnparisoin Approach.
Uost Approach
I his approach entails the preparation of a replacement or reproduction cost estimate
of the subject property improvements new (maintaining comparable qual;ty alld
utility) and then deducting for losses in value sustained tliiough agc, vvCai and tear,
lunctioaally obsolescent teatLueS, acid ccuiinmir faciois affecting the property. The
lawd valuC 3 ihcu addrd to the depreciated cost along With an allowance for
e,nt,epreinetuial profit to arrive at a value estimate.
Income Approach
1 h;3 app,nach ;3 ba3Cd upMu the theory, that the value of property tends to be set by
the net income that is to be realized by the owner. It is, in effect, the capitalization
ofexpected future income into a present worth estimate. I his approach requires an
estimate of potential gross income, an analysis of all expense items, the selection
of a capitalization rate, and finally, the processing of the net income stream into a
value estimate.
Sales Uomparison Approach
1 his approach is based upon the principle that the value of a property tends to be
set by the price at which comparable properties have recently been sold oc for wh;ch
they were acquired. phis approach requires a detailed conpac;so„ of 3afC3 Of
comparable properties with the subject pcope,ty.
Approaches Used i„ dic Valuat,0„ of the Subject
The Cost Approach may be used to estimate the nnarKet value of relatively new improvements;
however, given the assumption that the subject is vacant the cost Approach is not applicable.
I lie Income l apitalization Approach is relevant to most income producing properties:, however.
With the assumption that the subject is vacaia. tlir Income Appioarl, is not applicable.
I lie Sales Co,npac;so„ App,oach ;3 ba3Cd o„ the principal of substitution, which innplies "the value
of a property tends to be set by the price that would be paid to acquire a substitute property of
16
26-74
L8I1 IVcwpu,t tiuumv.uU
Mc.�1,urr tscchci,, l.,al,1'v, u,a Ain 11 1,26 1 / IN 1 GLK & ASSOC IA fES
similar desirability and Utility.7',/4 Uiven the proceeding discussion and the interactions of market
participants, the Sales Comparison Approach is the most relevant in the valUat,o,1 of 111C s,lbjCct.
SALES COMPARISON APPROACH
The Salc3 Co1„paci3'v„ App,vaCl1 hay broad applicability and is persuasive when sufficient data is
available. The Sales Comparison Approach is most useful when a number of similar properties
have been sold in the subject market area. In the Sales Comparison Approach, 1 researched the
Public Kecords, Costar LUMPS (a market research t„rl1 That plodides data on real estate
teal maitiolIS) .,11d co11dUcted inter,iews with several market participants. where possible, pertinent
details pertaining to the transactions were veritled with at least one party to the transaction.
In the Sales Comparison Approach, appropriate units of comparison provide a useful and
meaningful method of analysis in estimating value. Commercial laud 13 gcuceally compared on a
price per square foot basis oe a pciuc pce Floor Area Ratio (FAR) foot in markets that permit
different density of development within the commercial zoning parameters and the I -AK can be
calculated for the subject and comparable properties. Atter identifying a number of potential sales,
1 selected the sales that had the most similar characteristics when Co,upacr-d in 111C subject property.
I lie table on the following page is a su1,u„a,y of thr- data, which is judged to be pertinent in the
valuation of the st,bject. Descriptive photographs of the comparable sale data are inclucled in the
Addenda.
a ANNia;Sal hiatitutC- I Iic Appi.u3al of KUad tatatC, LIEvCiM, t.altim.. (I InC.,"v. 1996), I -j.598.
17
26-75
1811 Newpult Boulevar(7
Newpul t Beach, 1.:111101 nia Alm it 7, 1017 NETZER & ASSOCIATES
LAINU SALE SUIVIIVIAKY
MARCH 201 /
Data No.
Sale
Site Area
Zoning
Total
SJZ: 1-. icc
Location
Date
(Sq.Ft.)
Proposed
Sale
$/Sq.Ft.
AaaebnMi Parcel No.
uoc. No.
PAR
Use
Price
WAR Foot
JuDJECt
G811 Nc,,pm. t61ri1.
b/14/lu16
1/,//1
CV
51,`17,,uu0*
$111.13
Newpo. t Beach
16-26 /n /6
u.s
KeueV elol,*
047-110-36
v.O.V.
3/21 /2u 1 /
1-
'LU 1 Ne,vpOrt Li1v0.
I Of /;LU 14
M2
CC/R-2
$6,50,000
$406.74
3204 MaMua AvMwC
14-4000 I I
U..i -- uu
MuuiCipial
N.A.
N'cwpCht braCh
N.A. K -L
Vaiknil, Lot
42_,-.,82-0:)
41 I L9i1' 5ti Ccct
-11 1 LiLU I D
I J,� I L
m u -C v
$1.600.000
$786.74
Ne,vport BC..C1.
15-I�-uuj
U.D-l,v.uu..
Icenevelop
N.A.
047-043-12
l .0-KCn.
to ...i,:CO-obe
28L0 Lad .yCttC
4 I lizu I:)
6,892
mu -W2
$1 1550,000
$447.15
047-023-01 R -02
15-1682/1
N.A.
2900 Lafayette
9,uuU
Ivlu-w2
047-022-08
501 29i1' Street
5,580
MU -CV
047-0»-05
5u4 29", Street
4,500
MU -CV
04 /-u5 I -u /
25,942
Redevelop to
New opt bUaCh
N.A.
Mixed Use
41
302-314 3"' Street
41112016
20,56
Downtown
$5,250,000
$255.11
Rustington Beach
16-9146
N.A.
Specific Plan
u24-164-0 13 ro -u 16
Mixed Use
5
410 29", Sheet
11/10/2016
7,686
MU -CV
$4,100,000
$89.14
Newporr bCdCh
16-570820
2,850
Redevelop to
N.A.
u4 /-U -)2-0 1
10,56
Mixed Use
04/-u43-21
N.A.
S;
2244 W. COaJr hligliway
1/13/2017
_41,500
MU -MM
$8,000,000
i $192.77
NC%vpr1 t beaCli
17-43782
N.A.
Redevelop w/
!
425-4 / 1-L6
Adjaceur
300 L. Balboa Boulevard
2; 17/2017
5,198
MU -V
$1,500,000 $288.57
Nc.vhurt BeaCh
1 /-61482
N.A.
Unknown
048-115-u/
=Seller required covenant th;.t iaehibits :,n_ tature restaurant or Ibod use
E
26-76
2811 Newport Boulevard
Newport Beach, California April 7, 2017 !VL 1 GLK & ASSVt-IA 1 LS
HiscassionAnalysis
The seven land sales and the 2016 sale of the subject, are all located within the subject market area
the Urange L:ounty, coastal strip. All of the sales reflect the transfer of a tee simple ,merest and
judged to retlect cash equivalent sale prices. All of the sales a,c cuiu idered relatively current and
it was noted that the fna,ket, wl,ilc aclive, is ,clatively stable. Relative to the subject property, the
physical and legal characteristics (zoning, FAIL, use restrictions, site area, topography. shape,
water frontage, improvements, etc...) range from inferior to superior. Uverall the comparable
sales have relatively similar desirability to potential buyers.
The Subject sold to the current owner t„ .lune 2016 fo, $1,075;000, or $111.13 per square foot,
subject to the covenant that the site cannot be "used as a restaurant, or for food service purposes
(which includes and type of food or drink), drive-in_ drive-thru or walk-up eaLng/dhnk,,,g faeilit�
(including without limitation a kiosk, stand, booth, or arca located ,,,s,de another business Iacilit) )
for a period of 20 }ears from the date of this deed; provided however the use ot'the Premises for
the operation of a /-tleven retail convenience store will not be a violation Of this restriction". the
site has frontage on both northbound and southbound Newport Boulevard, which 3 Separated and
one-way in this location. The intersection of 29x' and „m,thbon„d Newport is signalized. The site
13 „nprovcd with a„ app,oximately 1,731 siluare foot McDonald's restaurant that was vacant at
the time of sale and includes a drive-tiiru. 1 lie underlying zoning and land use designation are
Uonimercial Visitor -Serving and the buyer has proposed to redevelop the „te with a 6,250 square
toot retail building that is being ottcred "Fo, Lease"; however; the proposed lease rates were not
disclosed. The subject is judged to be inferior compared to the balance of the L oniparable Sales
due to the use restriction. It should be noted that 1 did not confirm this sale with the buyer or the
seller and have relied on the public record and recorded information.
Comparable Sale one is located on the corner of Newport BOLIIev<<rd ai,d 32`1 Street extending
along 32" `� Street to Marcus Avenue and is bisected by an alley that is owned by the Lity (buyer).
At the time of sale it was improved with a �,JU I square foot steel frame and glass office/retail
building was built in 19/4 and was in good cond,t,o,,. I lie were neiginally a bank
bra„cl, a„d later cm vicemd to a Blockbuster Video store and appeared to have contributory value
at the time of sale. The lot on the corner of Marcus provides Ib -parking spaces for the building.
I lie property was marketed for sale and lease as an improved property. I lie buyer is the City of
Newport Beach who razed the improveme„ is and cv„vcrled boil, 1013 10 a ,,,u,,,%,,pal parking Int
that p,ovidc� app,oximately, 32 spaces including two handicapped spaces. It should be noted that
the City owns the alley (2u' x +1 l U) that bisected these properties and strip of land (+16.39' x
+SS') along the 32"d Street frontage of the Marcus Avenue property. Both of these strips vvere
incorporated into the design of the ,,,u„impal parking lot and increased the useable area. A
I L)
26-77
2811 Newport Boulevard
Newport Beach, California April 7, 2017 NETZER & ASSOCIATES
CCp,r,3u, lalivC fm t1,C City ,epoetccd Ilius diey had tl,C peopC,ty appraised and negotiated the sale
price and did not exercise their eminent domain powers and that they based their aCLIuisition on
the appraised value. Overall this comparable is judged to be superior compared to the subjecL.
Uomparable Sale Two is located in L;annery Village on the corner of" 91" SLreeL and Villa Way.
I lie properly was tenced and paved and used as a boat storage lot. 11 c uAr, lying /-o,,;ng is mixed
USC cud dir- bt,yei piOCCSSCd 11M pla„S a„d specifications for the construction of two mixed use
units that include a combined 4,6/8 s,-Iuare feet of residential space and 1.999 square beet of
commercial space. I Ile units are under construction and Lhe suggeSLed IiSL prices have ,lot been
reporLed. Overall this comparable is judged to be 3l;ghtly 3upC„0r.
Cumpai.1blc S:alc 'I'hiec ;s co,l,pr;sed of Lwv vvzttr, o,,t pioperties located on Lafayette Avenue
straddling 29`x' Street, and two inland properties located on the corner of 29”' Street and V iIla Way,
one block west of the waterfront properties. I he waLerfronL properties have a combined 185.8
feet of bay frontage with a combined gross area of 15,802 sLIL,arC tmt (3u-cet to Bulkhead Line)
that includes a combined 4;981 sLluare feet (2;733 SLI.Ft. & 2,248 SLI.Ft.) of private tidelands and
the use of z, /58 sLItiare feet ( I, /5b SLI.M. K I,UU2 Stl.H.) of tidelands between the Liulkhead Line
and the I'ierhead Line that are used for the seller's shipyard business. I tie parcels arc 3Cparated
by 29"' Street a„ d the seller has the e;ghi:3 to tl,C no,th side of the public dock (Schock Dock) at the
street end, and hays rent to the City of Newport Beach for the use Of the south side of tele dock.
I he seller reported that the properties were sold based on land value. IL was noted that due to a
confidentiality agreement the seller could not d;sclosc thr, bUyrC'3 plan fvr II,C propC,ty but it was
uvtCd that peccluu,uary plans for a ,llixed-use development have been completed. l lie seller
reported they leased -back the properties, rent free, for a perioct of 8 months while they attempted
to tinct a suitable relocation site and reported the leaseback is valued aL $150,000. The larger
waterfront property is improved with a 5,640 syuarC font bu;ldi11g and tl,e smaller parcel is a
bvaty,,id. II,C two uila„ d pafrCls are located on opposite corners at 501 29`x' Street (5,580 SLI.Ft.
site with 4,166 SLI.Ft. building) and 5U4 2`)"' Street (4,5UU SLI.H. Site K 1,685 S,1.1 -t. building).
I he seller reported that they valued each legal IOL on Lhe waLerfronL aL $2_000_UUU apiece, or a total
of$1U,000,0UU, ,I,;cI, egUates to $629.24 pC, SLIuare foot of land and $53.821 her font foot. The
seller's allocation suggests that the inland parcels have a combined value of $1,600,000, or
$1:59./3 Iyer sLIuare foot ($ l,buu,uuu -:- 1 U,UiSU SLI.rt.). 1 he buyer has completed the preliminary
plans for the development of IU -mixed use buildings (combined 10 residential Ln11LS and 9.U60
SLI.I t. of Co„n„Crc,al 3pacc) and a 10 -Slip marina, and is back on the market at an asking price of
$15,295,000 ($589.58/SLI.Ft.). Due to the mixed-use zoning, bay frontage and associated marina
this comparable is judged to be superior compared Lo the subject.
_'U
2811 Newport Boulevard
Newport Beach, California April 7, 2017 NETZLK & A550CIATts
Comparable Sale Four is located on the corner Of q,d Street and ulive Avenue in the l.ity of
Huntington Beach. It is improved with one small structure that will be razed for redevelopment
of the Site. 1 lie underlying zoning and general plan designation are Downtown Sperif;C PIa„ vvith
a V,S,loi SCrv,,,b cv,,,,,,C,C,czl OvCrlay. Thr /-O„]lig permits mixed use development with a
commercial component on ground floor and residential units at a density of up to 5u -dwelling units
per acre on the upper floors. 1 he commercial component must be conhpleted prior to residential
occupancy. Ilie height limit for lois over 9-000 square feet ;,, 45-fcct a„d four stories. Overall
ll„� CO,,,p.,rcc bIc iS judbCd t0 bC Suprr,or to the Subject dile t0 the permitted height and density, of
development.
l:omparable Sale Nive is located on the 19”' Street in Cannery Village. It includes an irregularly
shaped, /,080 SLIuare foot parcel that is iniproved with an approximately 9,962 SilucZrC foot building
that is used as a sail loft (Ullman Sails) and a 2,850 3LIUMV foot parcel that is Uniiii proved and used
for boat/dry storage that is located across the street. I lie underlying zoning is Mixed -Use Cannery
V illagel l 5”' Street (MU-t.-N-11.
St.) and the Land Use designation is Mixed Use Horizontal (MU -
H4). l he buyer is processing the entitlements (CUP, UDII, l e„taiivc Tract MC,p & Minor Site
Dr_vCInp,uCut Rcv,Cw) to irdcvrInI) the larger parcel with a mixed -Use project that iS proposed to
Include I, I / I SLIuare feet of commercial space and four residential units that range In Size from
2,�4/ SLIuare feet to 2,515 square feet. No plans for the smaller lot were disclosed. OvCrall 111;3
comparable 1S ludj;ed t0 be Supeiio, t0 d,C aubjCCl CIuC 10 d,C inixed-Use zoning and the residential
component.
Comparable Sale Six is located on Coast tiighway in Mariner's Mile. I lie Site has a rectangular
shape with a level topography. I lie underlying zoning is Mixed -Use Mar;nee's M;Ic (MU -MM)
and the Land Use designation is Mixed l!3C Horizontal (MU -H1). The site is improved %vith an
approximately 16,600 SLIuare foot, two-story, office building. I he building is vacant, in a sliefl
condition and was in fair condition. It was reported that the buyer has replaced the windows and
it is being marketed for lease as "creative" space. I lie rental rate is negotiable. The bL,ver ow„s
several adjoiniing properties (SOL,111 �,,,d across Coast Highway) that are proposed for
redevelopment. The buyer would not disclose the plans for the site, but the improvements are
judged to be an interim use of the site. It should be noted that a prior Owner, Submitted plans to
the City and the Coastal Commission in 2007 to redevelop the s;te a„d received City al-)j-rovals
and ihr Coastal C'v,,,,,,,33v„ Staff recommended approving the proposed redevelopment
application. Overall this comparable iS fudged to be Slightly Superior compared to the Subject.
Comparable Sale Seven is located on the corner of L. Balboa Boulevard and Adams Street in
Balboa Village. I the site has a slightly irregular shape with a depth of approximately 6 -feet along
Adams Street (west) and ail -feet alo„g d,e c,llry on the east. The Mideelyinl zoning and Land Use
21
26-79
2811 Newport Boulevard
Newport Beach, California April 7, 2017 NETZER & ASSOCIATES
Dc3ig„a1,0„ cux Mi,rd-USC VC,t,cal (ML.J-V) a„ d 't is in the Balboa Village Parking Management
Overlay uistrict. 1 he seller reported that the sale was based on tele underlying land value.
however, he was not aware of the buyer's specitic plans or timeline for the redevelop,,,e„t of the
site. Uverall this comparable is jud&ed to be S1.61,11y aupC,ie, coi„paced to the subject due to the
residential use permitted in coirjunction with commercial use in the mined -use zone.
Comments & Conclusion
1 he sale data presented reflect the most pertinent data uncovered within the subject market area.
I he following is a summary of the items of comparison that have been consideccd u, CSt,,,lating
file puce pcc 3qua,c toot and the maikm value for the subject property.
Market Conditions: Wheu vvaciauted, this is Often referred to as a "titne-
adjual,,,C„t. SUIV3 FOui t111oL1gh Seven closed with a year Or the date or value and
the market conditions have been relatively stable over the past year wllile Sales
One, Two and Three may, warrant and adjustment for the change in market
conditions.
Physical characteristics: In general, the comparable properties have similar
location, zoning, topography, shape and redevelopment potential. Some of tile sales
underlying zoning is mixed-use, which has both commercial and ces;de„ tial
components that are generally superior as the price pec squ.tcc foot foc finished
residential units is &seater tha,, cu,,,,,,c,c;al space. None of the sales have a
covcuaul that X31i,c13 111C use.
I lie comparable sale data presented retlect price per Square toot of land area IndlCltlons ranging
from $192. / / per square foot to $406.74 per square foot, with a sale that has bay f -m tagc (Sale 3)
at $447.15 pec square foot, whirl, compaics With the sale of the subject at $1 1 1.13 per square toot,
subject to tht= restrictive covenant. I lie restrictive covenant that prohibits the redevelopment of
the site with any future restaurant or food use, which appears to have had a material impact on the
redevelopment potential of the site and the Calc pi irr—
t)uii„g the ceui3c of evu,pl'cill,g this assignment I did not Uncover the Sale Of ally other sites that
have a similar covenant that does not permit "food Ilse” and restricts the redevelopment of the site.
Ilse interviews C0113Llcted did not result in a consensus regarding the discount, With some
SL1ggeStlllg It Would have a "nominal' impact Mule nthccc3 quc3t,oued the fea,,,b,l,ty of uCw iela,l
-v ithout a food component. Without any market data and no general consensus to quantify the
impact do the restrictive covenant, 1 have researched retail and food service sales as reported by
the U.S. l;ensus bureau. l lie tollowing table is a summary of the total "Ketail and Pood Service
Sales” (excluding motor vehicles & pacts dealr,3) tic,,, 7000 in 7015 a� cnmpaicd 10 -Food SCi v,cc
and Drii,king Places” as a percentage of total "Retail and Food Service Sales". 1 lie table assists
in illustrating the market share that is applicable to the "food service sector' as a percentage of the
2.1
At i tNcvvpurt Btmieva,a
Mevvl,Ort macnl, ualiluruia Alm it 1, 1017 NL i zEK sic ASSOCIATES
"total retail and food service trade sector", excluding Motor vehicle and 111Otor vehicle parts sales,
and quantity the potential discount related to the restrictive covc emit.
YcC.r
I mal I(ctaa & f turn
see v:a.0 5.1lea"
NOVU Sol vice
N 01 iuhill SACJ*
Ful cent
Fuua Service
2015
$4,255,096
$62,081
14.64%
2014
$4,194,805
$576,216
1 . /41/0
2013
$4,042,469
$54;_; I;
13.44%
1011
$%-j`I.8Y5
151
13.30%
2011
$3, /8 ,354$415,350
SmI11.11
1 1.09%
2010
$2,542,055
$466,920
13.18%
2009
$,92,704
$452,005
13.�-1%I
2008
$3,605, / I
$46.155
S1. Superior
1001
$_319_:)94
X444_.)51
11.-)`)°%
1006
$3,.%`14,351
$422.786
12.46%
2005
$2,197,41-9
$96,46
12.400/o
2004
$2,980,233
$73,557
11.53 r1,
2003
$2,770,869
$34`1.115
11.51%
2002
$x,640.155
$330.515
11.1 1%
1001
51_D03.31 /
$3 15.538
12.35°/
1000
$2,411,32 /$304;261
I1_51/
12.21%
,Isom U.S. Census 13ureau, shown In nulhons of dollars hosed on data for /\nmol Ke,ad trade Survey.
As illustrated above, the "hood Service & De;uki,tb" 3crin, has accounted for a relatively stable,
buT &MVVil,g, i.)Ci CALCI ;C Of LIIC total "Retail & Food Service Sales" from zuuu to !U 17 (most recent
statistics available). Typically, food service uses command a higher rent per square root as
compared to general retail uses; however, the higher rent is often a IT3LLI1 of tl,C additional tenant
improvements associated with food sci vice a„d the percentage in the table is used to Lluantify the
„ti,titt,uilt of the restrictive covenant. On the basis of the above and the sale price retlected by the
,lune %u 16 salt; of the subject, 1 Have concluded that the restrictive covenant that precludes "food
uses" Oil the SLlbleCt for 2U -years would have a 25 -percent impact O„ the ,iLaikm valUr Of the
undedyl,ll_ laud. As ,toted, mCuC Of LI,C Comparable Sales have a similar restrictive covenant and
the market value without the covenant will be determined and then the discount will be applied.
'The following table is a summary of the comparable land sale data_ arrayed in ascending order
based on the price per square toot.
vat-.
No.
S..Je
Date
$/S .Ft.
site
Arca
LOCat:uu
lu. 21uvea
Luning
I', upunrd
u3C
Uvei all
C vw Y_.�iauu
Sub.
6/2016
$111.13
17.772
Good
Yes
CV
Redevelo
6
1/101 /
ii i9z.1/
+41,500
SmI11.11
Yea
mu -MM
ItedevClmp
N1. NLICIi0l
4
311U 15
$13.31
10.5;3
Ulterior
Yes
DSP
Mixed -Use
S1. Superior
2
3/201;
$286.74
15,512
Similar
No
MU -CV
Mixed -Use
SI. Superior
7
2/2017
$288.57
5,198
Similar
Yes
MU -V
Redevelop
S1. S.IVCi_;or
5
11/2016
$89.77
10,56
Si111i1..r
yCa
1v1U-Cv
Mixcd-u,,c
SuNCiiui
I
10/1014
$406./4
I1_51/
5,1111111,
Yca
t, .%It -1
710111ciNal
I'aiKmu Lut
NLIPCIIul'
4%1015
N44/.15
157`141
5171P[TIut
Watul'h01it
Yea
MU-Cv
mu -W2
MIxed Uae
t&' Macilri
SUpeiioi
2j
1811 ive,.part
iNewl,art lunch, C.&Eim w_, Aln i1 1, LUI 1 NE I GLK S& ASSOCIA I ES
AS previously noted, the subject Coning/Land Use Uesignation is l;ommercial Visitor -Serving.
With the exception of Comparable Sale Une all of Lhe sales have a mixed-use compo„C„t that
permits residential use over &round tloor commercial u3c3; however, they, are all located in the
immediate market area and were acquired for re -development to either commercial or mixed-use
(commercial R residential) purposes. 1lle mixed-use zoning generally allows ground tloor
commercial space with residential uses above, which is superior compared to the sub.lcct's V.,;tor-
Serving Con,n,erc;al zo„iag as reside„ tial «„it3 pc;,,,itted in the mixed-use zone command a higher
price per square foot compared to similarly located and sized commercial space.
Most of the properties (including the subject) include improvements that will (or have been) razed
for the redevelopment of tele site or are being used on an interim basis until ti,e p1a,13 fol-
redevelopment
orredevelopment are approved. Comparable Sale U„c vvas improved With a steel and glass building
that was in good condition at the time of sale and appear to have contributed to the value; however,
it was acquired by tele City to provide parking in a densely populated area that I1.1S limited purk;,,g,
and the City was able Lo incorporate land they already owned ;,.to die let.
In dee final analysis most emphasis i., placed on the .lune 2016 sale of the subject and Cornparab►e
Sales Two, FOtu-, Six and Seven due to their overall physical and locational characteristics. I lie
Comparable aa►es reflect a price per square foot range from $192. / / LO $299.5 /, which compares
to the sale of the subjecL at $ l 1 l .13 per square foot. Keco&niztag that t1,C U,,dV lying zoning does
AOL peiu„t a er idrna;al co,upvueut with a commercial components (mixed-use) the value of the
subject would be toward the lower end Of this range. Un the basis of the nlarkeL data presented
above, 1 have concluded that the subject has a Markel Value, I-ee Simple Interest, as of Match 21.
201 /, of $2UU.00 per square foot. None of the Comparable Sale have die ;C3t; irti vC covenant that
restricts "Food «se” i„ d,c ;Cdc,clopment of the site, which needs to be accounted for in the
valuation. As noted above, I have concluded that tele restrictive covenant that precludes "toot
uses” on the subject for 2U -years would have a 25 -percent impact on Lite market value of the
underlying land_ which_ when applied to the ,,,arkrt value LI„C„CL,,,,br cd by the rest;,ctive
cvve„ant ($200.00), indicates a market value of $150.00 per square foot ($ 2uu x 1 — u.25).
The total Market Value of the subject site, then, is calculated as follows:
1 /, / /2 Sq.rt. x $15U.UU/Sq.rt. 102.665,8uu
Indicated value via Lite SALES CUMPAKISUN APPKUACH: $2,665.000
I have concluded that the subject has a Market Value, FCC S,,,,plC h tcec3t. a3 of Marcl, 21, 2017,
of: $2,665,000.
24
1811 Newport 13oulevard
Newport tieaeli, Calitornia April 7, 2917 NETZER & ASSOCIATES
(ground Rent Analvsis
I here are many ways to establish the market rent for Lhe laid (Cieu cid Nma). I he most cominon
mrthudology is to apply ca cam of return to the underlying land xalue, howeN,er, many user's
(Lessee's) do not look at this methodology rather they project their gross sales volume, deduct Lhe
reLluired operating and business expenses with an allowance for profit and Lhe remainder is what
can be paid in &iouna cent. In Lhe case of the sub]'m, vvitl, i,o specitir trama In mind; the first
methodology is most applicable. The table on the following page is a summary of ground lease
transactions, where the suggested rate of return on land value was available.
:5
2811 Newport Boulevard
Newport Beach, California April 7, 2017 NETZER M ASSOCIATLS
GKUUNULL•ANL IKANNACIIONS
Data No.
Site
C....il vale
Annual (;.. I'Mit
Kate
Tenant
Lease
Area
Tut..l
I Utal
of
Location
Date
(Sq. Ft.)
S/S .Ft.
$1S .rt. Nitu
Kett.r..
11
111ay Mac b.111K
1
1006
107000
$1,800,000
$180,000
10.0%
NCI. Jcffciy Ica. AltCm
$90.011
$9.00
rk-y.
Ir��e
ts.,,,k Mr Aii,cric.,
1uuD
4D,uuu
$!,1 uu,vuu
$110,000
10.0%
6358 Irv;i�e Blvd.
540.6/
$4.6/
Irvine
J'
Union Bank
2005
30.00U
$1.18 /,uuu
$118, /uu
10.00/.
6540 Irvine Center Drive
$11.90
ji 1.19
Irvine
4;
Farmer Boys
05/06
34.690
$800,000
S/1,00u
9.00i;:
SWC Katella Ave. & Batavia
$1;.D;
x2.11
St.
Oram,e
5;
Tesco
10/06
52, 1 K
$3.15u_uuu
53) 15,uuu
SWC Moulton Pkwy. & Ridge
$6v.�-6
Route
i
La"Una Hills
Del Taco
8/2014
20,025
$1.5uu.uuu
$1 68,500
/.10/0
21401 BrookhUI-St Street
* cont1noil
$ /4.Ju
$5.;9
Huntington Beach
Parking lot
7'
Olson Real Estate (hotel)
9:2014
170,244
Nrit
$15u_000
Not
-200 Newport Boulevard
Ameaded to
A1j1jG7-..blu
$1.4-0
AppliCaDIC
New MSL Beuuli
171,054
TPercentag Rc,.t
8!
Chase Bank
2014
*27,200
$3,250,000
$325,000
1 u.0 !/0
NEC Wemcilff Ur. & Irvine
Portion of
+$120.00
*$12.00
j
A vC.
Larger
NCvvl,vit I3CaCh
Center
Office Building
'2016
26,470
$12,000,000 $700,000
5.830o
CE7111118ential m Newlwit CMILM
T common
$451-.4 $26.44
NU% Mit bCaCli
ots
A.talysis of Ground Lease Data
The first three ground lease transactions involve Irvine L:ornpany property. All are within new retail
centers in the city of Irvine. All leases are structured on the basis of a 1 U.U-percent return to the
value of the land. Land value for these leases ranges widely from $46.67 to $90.00 1 -ICC aLlt«re f001
Z6
2811 NEwpul t Houlevai d
Newpart Beach, l alitu, uia Alm i1 7, 2911 IV L i LLit & ASSOCIA I ES
of net sire area and Illis variation is primarily influenced by location and site area leased. line highest
valu'c (Nn. 1) 13 fvr a small 20;000 3LIUMC tent, 3iiCct trout, pad within a neighborhood center
anchored by Gelson's Market. This is a more upscale area than that of Data l wo. while tele site of
Data l wo has street frontage, the building is attached to another building within a large cellter
anchored by bonne Depot, a supermarket and a large variety of shop te,iaia3. D.d., No. 3 is a pad
building vvithin a smaller note -anchored center at the corner of Irvine Center Dri\,e and Sand C anyon
Avenue. 1 his is within the Irvine Spectrum Development and very near the recently completed
Kaiser Health Center and Irvine Medical Center.
Data hive 4 was negotiated in mid-2UU6 and commenced in .lail«ary 2009. Thi propert is a
triangular shaped parcl•l of land at the southwest corner of Katella and Batavia in Grange. file
property owner stated that the ground lease was structured on the basis of a 9.U -percent return to land
value estimated at s SUU,000. 1 lie lease is for a term of 2U years with two five year options to exte,id.
Kent will be $6,000 per month for the first five lea,,c ycai3 and iiiciease to $6,720 per month for the
second live years, $7,256 for the third five years, $8,430 for the next five, $9,441 for tele first five
option years and $ l u,5 /4 for the last five years. 1 his equates to a 120/r, increase every five years.
I lie property had attracted offers to purchase up to W.UU per square toot but the ovine, wished to
lease not sell the site.
Data hivc lJ U grnuud ICa3C iv Kate foi a Fresh & Easy store in Laguna Hills. The lease is for a
term of 20 years with options to extend. Ground rent was based upon a l U.U-percent return to land
value of $3,13U.000 ($6U.36 per square toot). l his is a sweet front pad within an older neighborhood
center with a Big Lots store as anchor.
Daia S,x ,3 a DCl I "M dr l V C-11ir a XMCLui alit that is part of a larger center 111 i'luntington Beach. The
center is anchored by Trader .toe's. Del 1 aco occupied the site for 4U -years and their lease expired
and they negotiated with the landlord for a l U -year renewal with a five year option to renew. The
rental rate is $1 09,000 per year and Dcl I aeo Was required to spend a minimum of $400,000 to "re-
brand" the 2,808 square foot building, but they spent approximately $SUu,uuu.
Data Seven is a summary of the ground lease for tine hotel that occupies the majority of the subject
site. l he lease has a reduced rent during the consuTuction period and then the nlinimunl Base Kent
(shown in table) and Percentage Rent (5.0% et COMIL 1Cvc11uC, 2.0% of iioirivnn, rCvCuuc) CIX phi Bccd
11n over tine. The lease has a 55 -year term with a.30 -year option to renew. The Base Rent is adjusted
every five years by tine cumulative change in tine CY1, commencing in the 9"' year. I his data item is
presented for infornnational purposes only due to its location relative to the subject.
L8i i Me.vl,urt tseuleraru
INCIypo, t Brach, Calitu,,ua Al,r;l /, LUI / ML 1 LLK & ASS0C 1A I ES
Uata Liglnt is a u.liase bank ground lease in a larger center that Is owned by I Ile Irvine Company.
The transaction is summarized in the table as (lore specific details of 111C IfansactlOu wCie not
disCloscd.
Data Nine reflects a 2016 transaction for the site tinder an existing office building located in
Newport (:enter. l he site is a 26,4/U square toot parcel, plus a pro -rata share of the common areas
and parking lots. I lie Lessor sold the building (-IS,000 Sq.t t.) fo, $5,500,000 and ietained the
1a11d. "I l,e paitics agi'cccd that tl,c land valt,e was $12;000,000 and the Lessee pays $/uu,uuu year
in ground rent. The ground rent continues until the Lessor passes away (lie is /5 and in failing
health) and the land transfers to his wife, at which tine the Lessee has the option to puichase 1Lc
land at $12,000,0U0. I lie buyer ,,,te„ds to occupy' die 1111pMvc111cc11ts.
U„ ihcc bz,3,3 of t1,e eo,,,palablC g10u11d Icase data presented; I have Concluded that a /.U -percent
rate of return should be applied to the underlying land value, as a reelection of the fair market
ground rent for the subject property. 1 he total ground rent, then, is calculated as follows:
Indicated value via the SALES LUMYAKISUN A1'1'KUA(-:I-i: $2,6657000
x Kate of Return Conclusiou: x 0.0/
indicated vair Market (ground 1<ent:
$186,550
Un the basis of the market data presented above_ 1 have Concluded that the subject site has a„
annual Fair Market (hound Kent_ lee Simple hite,est, a3 of Maicl, 21, 2017, of: $186,550.
VALUATION
BC13Cd up011 1110 %vvr)ik Mideitaken, and my experience as a real estate analyst and appraiser, i have
formed the opinion, as of the P" day of April 2U 1 /, subject to the Assumptions and Limiting
(;onditions contained in this report, that the subject has the following market values:
Market value - lee Simple Interest - as of March 21, 2017
f WU MILLION SIX HUNDRED SIXTY-FIVE THOUSAND DOLLARS
$2,665,000.00
Annual 1 -air Market (iround Kent - 1 ee Simple Interest - as of March 21. 2017
ONE HUNDRED EIGHTY-SIX THOUSAND FIVE HUNDRED FIFTY DOLLARS
$186;550.00/Annum
28
2811 Newport Boulevaii]
Newport Beach, California April 7, 2017 NETZER & ASSOCIATES
ADDENDA
)9
Is I l ]Null Ij �u i Istyulcviul ri
IVeivlw, i tsmen, C.iiivrn.a Ajiu II -/, 10 / INLI GLK & ASSOCIA I LS
Grant Deed
30
RECrJKDING REQUESTED BY
Chicago Title Company
AND WritN RECURDED MAIL DOLUmENr iD:
PING Mevvporrt tseacn, LLC
9171 Towne Centre Drive
suite 335
San Diego, CA 92122
Attn: Uarti Ycany
E.,crow No.: 00048835 -002 -KP (SG.
Kecorlied n, Urflclal Rcuu as, Uranye Gvunty
Hugh Nguyen,ulerit-Kecorder
III I I iII II II II li II I I I I III IIIIi I II III I I I II I I I III 35.00
* x R 0 0 0 8 4 4 8 2 9 5$
201600026757610:20 am 06/14/16
4t NC -5 U3UZ 4 U1
i036.Z5 I08fa.Z5 ZU.UU OAU V.UU UXU U.UU 0.00
GRANT DEED
int UNDERSIGNED GRANTOK(,) UtirLARE(s)
❑,111it1colporated area
14 l'ity of Newport Bench
ace Aaove , ms Cine for Recorder's Use vnl y
A11M; 04i-110-36
Doctrlaeia,,g iiai4erTax is Ii 1 I a. • 50
City i iaiiarer i a.-, is S 0.00
❑ coial,utea uit mil value of interest OL* t)ialJcir)-
COuVeyeu,ai
❑ full va11,e le» value of liens or encuaibin,ice.i
1-cillamIL1r tit t11c time of Sale
FOR A VALUABLE CuMbiDEKA 110N, receipt of wnicn it. hereby acknowledyea, McDottald's
Corporation, a Delaware corporation, F/K/A McDonald's Corporation, DBA Delavvare McDonald's Corporation,
a Delaware corporation the'Grantat,^ hereby GRANTS to MNv Newport Beach, LLc, a Culirarnia limited
liability compa„y, the ""Grantee", the property in the City of Newport tseaLh, County of Orange, state
or California as more particalany described in Exhibit A atracned hereto and incorporated Herein by reference
with all improvements and fixtures, toymiler with the equipment and Nerzonal property, if any, located on or
onaer the land (collec&ely the "Premises").
I HE PROPER I y 15 I.UlgvEYED TO GRANTEE 5USJEUF 10 THE FOLLOWimu:
A. Matters gene,aiiy eAcepted by title insurance companies in their tide puiicie" iszued in the state In
which the v,emibes are located; special taxes or special asseas,,,ent, if any, for improvement „ot yet
completed; installment „ot aae at the date or tnls Deed of any special tax or special assessment for
improvements previously completed, it any; general real estate taxe., it any, tar 2016; covenants, condition
nyreementb teservadons and restriction of record; zoning and dailainy laws or ordinances; private and public
atility and drainage ea3c, encs and rights; roads and niyhways, access ways and driveway, whether or not of
record; all matterz. which a current, accurate burvey of the Premi.ez would disclose; and the term,
re.ervotiuns and conditions or tnl., sale.
B. 1 RE PREMISES ARE 5uED 10 AND ACCEP I to By URANTEES "AS IS" AND "WHERE 157',
W1 UH ALL FAULT5,1r ANY, AND WITHOU I AIM WARRANTY WHATSUEvEK, LAPKE55 OR
IMPLIED.
C. As conlderation for the sale of the Property described on Exhibit A (the "Premises") from Grantor
to Grantee, by accepting this deed. Grantee covenants mat (i) the Premises will not 5e area as a
restaurant, or r—.r rood service purposes (wnicn includes any type of food or drink), drive-in, drive-thru
or vvalR-up eating/drinking facility (includiny without limitation a kiosk, stand, booth, or men located Inside
another business racility) For a period of zu yearn rrom the date of this deed; piovided however the use or
the P;emibe� for the operation or a 7 -Eleven retail convznience store will not be a violation or this restriction
(Ii) this restrictiofi and any other restriction M this deed are for the beiwcnt or any land owned or leasza oy
LOCR16L0847
Seller or its arrdiatea at tMe iotmtiu, is commu� ply known as 700 West Pacific Coast Hwy., Newport Beach, CA
92660, 635 West Lyth Street, Costa Mesa, CA VZBLI, zjUU Flaroar BA., Saite PI Costa Mesa, CA 92626,
and (iii) this restriction is a covenant running with the land and is binding upon urantee, Grant=-zi Heirs,
administrators, sacceasors ana asslyn.).-
[End of document. Execution on following page.
Doc#16zU3i.
IN WITNESS WHEREOF, the undersigned has enecotM tRis Grant Deed as of Jixn e- V , d 0/(p
McDONALD'S CORPORATION,
a Delaware corporation
By: Printed Name: Padraic G. Molloy;
In the capacity of: Corporate
Assistant Secretary
STATE OF ILLINOIS J
) SS.
COUNTY OF D„PAGt
On Deme me P .RAL
Notary Public, personally
appearM PaBraic G. Molloy, as Corporate Assistant sec.e r -y Or McOnald's Corporation, a Delaware
corporation, who pro,,M r me on the basis of satisfactory evidence to be tRe person, wnoze name is
subscribed to the within instrument and acknowleoyM to me tnat he executed the same in his authorized
capacity, an8 tRat By Res signature on the instrument the person, or the entity apon Eefialr of which the person
acted, executed the instrument.
i ceMfy anger PEDAL I Y OF PERJURY under the laws of the State of Illinois tliat the roreymny paragraph is
true and correct.
W1 I Ntss my nand and official seal.
Signature
Ply Commissl Expires: -'4n;. / 'jI
UQCBiodua4i
FN07.OFFIUiA[ SEAL
-;:cT
ERLY E CALABRESE
PG91,!C-S*rATEorILLINOISMMISSIOM EXPIP,ES:07IM6v�nr
This area fo, amcai „vta,iai seal
26-91
ERFft5ii A
Legal Description of the Premises
Tne lana rerei i ed to !it i5 Situated in the Slate yr Cailroinia.
Cuu,ity yr oLatiym, City or Nevpurt Beach, descrioed :a. rallowe:
YaLaei 1 as mnow,j u,t Exhibit °B° attached do w--wpu t BWach Lot Line
Adjustwe„t No. 94-12 recorded JMUAR: I. 1995 Els L,,5tL,,weut No.
95-0037688 or Orrluial Records of Orange county, CaliLvLuia.
Excepting from that portion included witni,. YQLC01 x a5 shown on
Record of Survey riled in sook 16, page 46 or xecaLdS of Surveys in
the office of the County xeccrdeL or Sala orange county, all
mineral rights incluaing ail, you atZ atneL hydrocarbons without
tae rigat OI SuLIauc e,itLy, as LemeLvOd by the Litt or Newport
Bench oy ffeea reccL3ea Ju.iy z9, 1964 in Book 7153, page vua or
Urrieial xeUULas.
Doc#1620aY,
26-92
L81 1 IVcvvlwj 1130ul'cvh.O
Mcwlwrt Iscain, C.aiivrn;., App it !, luI ! IN ILL K & AJSVC!A I LS
31
26-93
A view of southhbound Newport Boulevard looking north. i he subject is on the right.
A view of southbound Newport boulevard looking south. The subject is on the lett.
26-94
r-
- va
A view of northbound Newport Boulevard looking „orth. The subject is on the left.
A view of northbound Newport Boulevard looking south. the subject is on the right.
26-95
A view of l$'' Street looking west. 1 he subject is on the right.
A view of 29th Sweet looking east. The subject is on the left.
A front vicw of the subject.
26-97
2811 Newport Boulevard
Newpo: t 13cam., California April 7, 201 i NE I SLK M wSJUCIATLS
;Z
Comparable Sale One — 3201 Newport Boulevard & 3204 Marcus, Newport Beach
Uomparable Dale 1 Wu — 421 29'n Street, Newport beach
Comparable Sale Three — 2820 & 2900 Lafayette, 501 & 505 29`x' Street, Newport Beach
uUmparame Sale tour -- nz-314 -0 street, Huntington beach
26-100
Mr.."W"P,
M
Comparable Sak Fivv, — 410 29`h Street, Newport Beach
Comparable Sale Six —1144 W. Coast Highway, Newport Beach
26-101
PHOTO NOT AVAILABLE
Comparable Sale Seven — 5UU B. Balboa Boulevard; Newpon Beach
26-102
AI 11VCwlw.I 130u1r vurrl
INCINlwh I IScauly April 7, 2017 IVETZEK M ASSOCIATtS
Qualifications
26-103
QUALIF1CAT10NS
of
James Ii. ivetzer, 1VlAl
Yrotessional Back gra olllld
Prior to torming Netzer & Associates, lie was associated fo, n,Cr three years with Urban Pacific
Se, ICCs Corp. Acts N!ely eagagCd as a foal Cataic analyst, appraiser and consultant since 1 ` g /.
Principal of the appraisal mid Consulting firm of Netzer & Associates with offices at:
1 /u t. Seventeenth Street, Suite 2U6
Costa Mesa, California 0202 /
Educational ACtiVides
Bachelor of Arts in Liberal Studies with a Concentration i„ Eco„v,,,ics. California State University,
Long Beach, 1996.
Has successfully completed the following courses sponsored by the American Institute of heal Estate
Appraisers and the Appraisal Institute:
A.I.K.L.A Course lA-1 : Principles of 1Keal Estate Appraisal
A.1.K.E.A Course IA -2: Basic Valuation Procedures
A.LK.L,.A Course l B -A: Capitalization Theory and Techniques, Part A
A.1.1K.E.A Course I B -B: Capitalization I heo,y and I ecl,,,,quCa, Part B
A.I.K.E.A Course SPP: Standard., of Professional Practice
A.I. Course 2-1: Case Studies in Real Estate Valuation
A.I. Course 540: Report Writing and valuation Analysis
A.I. Course 55U: Advanced Applications
bias successfully completed numerous classes and seminars to meet the continuing education
retluirements of Appraisal Institute, Uttice of Keal Estate Appraisers and Depart„ne„t of IZCal Estate.
Professional Att,l,ut,o„s & State L,gcnsrs
Member of the Appraisal Institute - MAI Designation
State of California - Certified General Keal Estate Appraiser - Certificate No. AUUU-J 143,
State of Catifornia - Keal Estate Broker License - License No. U 1185692
COUR Vualittcation
Qualified as an expert witness to the Supei,o, C uurla nt Ura„gC, Loa A„ljelca W„d Saul D,Cl o
COLI„tea, U.S. B,„il.ruptCy Cvurl — Loa A„gC1Cs D vision.
Orange Coast College - Adjunct Professor (retired) - Business 14U "tKeal )✓state Appraisal Principles”
26-104
Seminar N Panel Presentations
Los Angeles Lounty Liar Association ® Real Propeny Division: Uiverho/17Ove-hrrcrleil; Aa tJ1-0rae
na Damages. 11j-)jrcdsaIs and Interim Loss under Brie Insurance Policies, Septe111bc, 2013
: _ :
During the period in .which Mr. Netzer has been engaged as a real estate appraiser and analyst, he has
been involved in most aspects of the field having completed assignments for multiple purposes,
including: estate planning; bankruptcy; conflict-of-interest analysis (Political Keform Act of 19-/4)*
construction defects litigation; soil subsidence; dissolution of marriage; ground lease re -valuation;
leasehold K sub -leasehold valuation; property tax appeals; lease and ground lca,,C acbiimtion-
easementtaccess/encroachment/title disputes (based on 0,,rrhvh--r-,• a. Nrnril,ern C01111lie-s Tille); soils
rmaa,,,i„atio„ liugauoa-, mortgage IC„di11g; C011SULLC6011 financing; portfolio valuation; market and
feasibility analy�lS; tramimial iiacc1CSt valuation; and, due diligence.
He has experience appraising the following property types:
Vacant Land
Kesidential lots, sub -division sites, condominium sites, commercial and industrial Sites; mountainous
acreage, raw acreage, mitigation land (Delhi Sands Plower Loving 1"Y7 Stephe,,s KangarCv Kat K
Upen Space).
Kesidential
Single-family residences, condominiums, townhornes, planned unit developments, multi -family
units, apartment buildings, mobile home parks, proposed and existing sub -divisions.
Commercial
Uftice buildings, medical ottice buildings, restaurant buildings, retail centers, neighborhood shopping
centers, community centers, commerce centers, congregate care faculties, parkiag SULICILU eS, bolt
courses, mixed-use developments; auto dealerships, gas stations.
industrial
Manufacturing and warehouse buildings, distribution facilities, rilulti-tenant buildings, mini -storage
facilities.
Special Une
uornmercial and residential tidelands. boat harbors, auto ferry, bait barge, marina, gas docks, mooring
fields- commercial pie1S, civic center, t11e 3iai:im,3, pnlircc atatimmi, 'c,nclbe,icy C011„1,u„ucat1011
taclllties, tempolaiy C11113ULICtivn'ca�CnlC,1t�, �iCcl tabiiratulg plant, Car wash tac,lltir,.
P1lhlir CPrvirP
Newport ALluatic Center, Newport tieach - board of Directors - l nairman, hacilities ( omnlittee
26-105
PARTIAL LIST OF CLIENTS
All OKNEYS, LAW 1-II1,MS & ACCOUN I AN 15
Cit Capital hivE.AmCiA Aaviauia
Barton Kiugniaii & Oeitiug
Lynberg & WatlZ111N
Bona Law 1 -inn APLC
maiming & Kaaa, t111.1a, KanuieZ, Trester
biOmX & WOOCIa LLI'
MCUC111113tt, Will & L11101 -y
Bryan Cav'c LLN
Law Utf.Ce3 Of Lr.K ti. M;Chek.CCii
ti[lia M Naylu.
101111m7 HOCIgc3 & t emI3
Uay.3 Law ANC
YaILuC. i_ l yle._ Winn.— W dl.-clu. c&, Wala.un
Gibar.., D...... & CrutclxC
vc;chmd SLAfk(COurt At,Nr;i..tcd Icacivci �
Goldstein & Ward
Rubin & Eagan
Greines, Martin, Stein & Richland LLC
Samuels, Green & Steel, LLP
Harbin & McCarron
Severson & Werson
Hart, King & Coldren
Shulman Bunn LLP
Jeffer, Mangels, Butler & Marmaro LLP
Songstad, Randall, Coffee & Humphrey
Landels, Ripley & Diamond
Stradling, Yocca, Carlson & Rauth
Larsen & Associates
Turner & Reynolds
L:ullanl & WatlCuia
Richard Wildman, Attorney at Law
Leech & AbaOCiate�
WOIt & KiCLmilb
La%V DMM, Of MXhael LCCit lit
WIialit 1 -ma biowuiL( & YOCuig
LOU13 & LVED, LLL.
Wylui'c, Spiegel & Itkni
LL'NUINU IN51 I I U I IONS
tiaar' IVIMa vE t_ N.A.
Cit Capital hivE.AmCiA Aaviauia
ts..I.k Of Aijim-I ..
HawtLurLc 5cavi..ga
Bankers Mutual (Berkshire Mortgage)
HtL.ti..1;tv.. N.A;Mial bmik
California Federal Bank
Mn -rill Lyncl. Credit Ccwvm..t;m,
Citicorp Real Estate, Inc.
Paik Vie.v Ivlvitgwx
Credit Suisse
Strategic Mortgage Services
Comerica Bank
Tokai Bank
Escondido National Bank
Wells Fargo Bank
QUVtKNMtN I AL AGENC:ItN
City of COata Meaa Federal Deposit Insurance Corporation (FDIC)
uty of GIC1130ia 01aiige CoL111ty - Uana Point Harbor
City Of Huuti17tO11 bccach KCaOlutlOu I runt COrporatiuu (91 Cr)
City Of Luu� lJC.iCh I lacl.ud!13 I:IU Nel Ul itiCa & trCLau; e Uvuuuiaaivii (SLU)
U.ty Of N'c,vNOit t5cc.1Cl.
GENERAL CLIEN I S
HIVItCLSCO IVIau..SCniClit_ IuC.
N'c,vVVit 5VU113 CUHUCtiMi ruuiiaatiuii
Arnold Construction
Nx-jitl. Au.Ci iCah I itIC IL3[.i.u.Cc t-,UmV..ay
The Boy's Republic
O.C. I..tzrfaitl. SI.cltc.
Capital Guardian Trust
Old Republic Title
Chicago Title Company
Pulte Home Corporation
Continental Mobile Housing
S & A Properties
Decron Management
S & S Construction Shappell Industries
Environmental Nature Center
St. Clair Company LLC
Fidelity Nacional Title
Santa Fe Pacific Pipeline Partners, L.P.
Yiiat AlucliCau I itic lmrliaucc
Siiiiplea Itcalty
Hamiltoli COmlmhy
Staplca, 111C.
HCI'ita'c 1'oiuT 5'c.uui Civill-
State Yalu IuauianCe
HOinDIOwC. Li013c3
5t'Cwa1-t I ItIC IJuaiauty UOIuN.uiy
N;110C. IVIOi .u. thcf-ly V.I tuC.3
ICX.xC0 Mhmiv, N MaiKctu. , ILC.
LZC & A33UC1.ItC3
WGACM' L.u.Q 1411 1113UIailcc UviuN.uiy
W,,tei.. Nat;r—al Pmpmt.z3
26-106
Attachment G
Appraisal Report for 475 32nd Street, dated March 30, 2017
26-107
APPRAISAL RE FORT
C:UMMEKCIAL LAND
475 32"d S 1ZEE 1
NEWPORT BEACH_ CALIFORNIA
UA l E Ul~ VALUE
MAKC:H 2 l _ 20 17
PREPARED FOR
LAUlktN WUUU1NU WHl l L1NUL~K
(A l Y UP NLWYUKI t3tAUfl, (_'UMMUNI l Y ULVLLUYMLN 1 UEPAKIMEN l
IUUCIV1C'LCL~N1EK' UK1VE
NEWPUKI BEACH, C:ALl UIKNIA q' -)66U
PI-' EPAKED BY
NE 1 LER & ASSOCIATES
170 E. SEVENTEENTH STREET, SUITE 206
COSTA MESA, CALII,OKNIA 9262/
t~1LE NU. 1U1 /-UUP)
NETZER & ASSOCIATES
Keel EhLate Appraisal & Consulting
March � U, 1U 1 /
Pile No. 1U 1 "/-UUP)
Lauren Wooding Whitlinger
Keal Property Admiaisuato,
City of Newport Bearl,
Community Lkvelopment Department
100 C;,,is Center Drive
Newport Beach, CA 92000
ice: Appraisal Services - Commercial Land
4 /5 .S1"d Street
Newport Beach, Calitornia
Dear Ms. Wooding Whidinge,:
In acco,da„rc with your request and authorization, 1 have undertake„ d,e investigations and
analy3cs „ecessary to estimate the Market value, Pee Simple interest, i„ the above referenced real
property, which is the subject of this report. .lames B. Netz_cr conducted a final inspection of the
subject property on March 11, 201 /.
based upon the work undertaken aid ,r1y experience as a real estate analyst and appraise,, 1 have
tormed the opinion, as of the �Od' day of March 2U 1 /5, subject to the Assumptions a„d Limiting
Conditions coatai„ed is this report, that the subject has the tollowing value:
Market Value - Fee Simple Interest - as of March 21, 101"/ - Assuming tl,c Hypothetical
Condition that the Subject is Vacant and available to be redeveloped to its Highest and Best use
and that the Development Entitlements are available
TWO M1LLWN 1 HKLE HUNDRED TWENTY-FIVE THOUSAN>u UOLLAKS
$2,3257000.00
Annual Nair Market (hound Kent - Fee Simple Interest - as of lvlarch 11, 2U1 / - Assuming the
Hypothetical Condition that the Subject is Vacant and available to be redeveloped to its Highest
and Best Use and that the Development Entitlements are available
ONE HUNDRED SIXTY-TWO THOUSAND SEVEN HUNDRED 11'1N"I'Y DOLLARS
$1b1,"/5U.UU/Annum
I his lettrrr of transmittal must remain attached to the Appraisal Keport, which ce„tai„s 29 pages
plus ,elated exhibits, in order for the value opinions set torch to be conside,ed valid.
i ib E. Seventeenth Street, Snite z06 ♦ Co3ta Mega, CA 92627 : Photie (949) 631-6799 : FAx j949) G-' i zz ,31
26-109
Lauren Wooding Whitlinger
March 30, 201 i
gage i
I invite your attention to the folio -wing summary Appraisal Report which has been prepared in
accordance with the uniform standards of professional Appraisal Practice (uSPA1') and the rode
of Processional t:tlhics and Standards of Professional Appraisal Practice of the Appraisal 1nsUtULe,
and sets corth the data and analysis that my opinions are, in part, predicated. I hank you for the
opporutniLy of serving you in chis macer.
1Z-c�pC�,itully aul�iririLcd.
Jame B. etzer, Al
Califon,
alifon '.t Cer f Gener: I appraiser No. AGO03143
26-110
SUIVIIVIAKY UNSALILN 1 FAU IS
VLSI INU UP UwNtKSnlr:
PROPERTY ADDRESS:
ASSESSOR PARCEL NO.:
LE UAL DESLK1P 11UN:
1'IKU1'EIK I Y I Y PE:
1'KUPEK 1 Y X IUI-I IS APPKAISEU
SITE A1cEA:
LUN1NU UA I A:
IMPKU V EML-N 1 N:
lilUHtS 1 ANU IiEJ I USE:
L~XPUSUKL & MAKKEI INU I IME:
VALUE CONCLUSIONS:
Market value - Fee Simple interest
Annual lair Market UrOUnd Kent
(--:ity of Newport tieacti
475 32" d Street
Newport tseach, California
Portion of 423-111-02
Not P,ov;ded
Rn
Commercial Lana (assumed to be vacant)
Pee Siniple Estate
11,612 S, -,.Ft.
v -LV, (_:ommercial- visitor Serving
Assumed Lo be Vacant
Lurrent Use
to 6 Months
$ 2,3 25,uuu
$162./)UiAnnurn
26-111
TABLE OF CONTENTS
UEK 1 1r UA 1 1UN........................................................................... I
IN I RUDUC 1 JUN...........................................................................
AREA DESCKIPTION..................................................................... 9
THELAND................................................................................... 9
I AXES AND ASSESSED VALUA 1 JUN ............................................... 12
1 HE IMPKUVEMEN 1 S................................................_................. 12
HIGHEST AND BEST USE............................................................... I
APPRAISAL PR0CEDu1tES............................................................. 14
SALES LUMVAKISUN A111WAC:11 ................................................... 15
VALUA'1JUN................................................................................ 2!j
ADDENDA...............................................I ................................... 26
IV
26-112
475 32"' Street
Newport BeQen, C:,iitoi ina March 30, 2017 NETZER & ASSOCIATES
UERTIFIUATION
l o the best of my knowledge and beliet, 1 certify that:
I he statements of tact contained in this report are true and correct.
the reported analyses, opinions, and conclusions are limited only by the reported
assumptions and limiting conditions, and are my personal; unbiased professio,al
analyses, opinions and conclusions.
1 have no present or prospective interest in the property that is the subjCCi of this
report, and have no personal interest or bias with respect to the partes involved.
1 have pertormed no services, as an appraiser or ;,1 any other capacity, regarding
the pioprrny that illi., the subject of this report vvithin the three-year period
preceding accepta��ce of this assignment.
I lave no bia3 vvith iespcct to the property that is the subject of this report or to the
parties involved in the assignment.
My engagement in this assigtunent was not contingent upon developing or
reporting predetermined results.
My compensation is not contingent upon the reporting of a predetermined value or
direction in value that favors the cause of the client, the amount of the value
estimate, the attainment of a stipulated result, or the occurrence of a subsequent
event.
1 he reported analyses, opinions, and conclusions were developed, and this report
has been prepared, in contormity with the Code of Professional Ethics and
Standards of Protessional Appraisal Practice of the Appraisal Institute; which
include the 57116rn1 SlC ndcr,-R of P,-r?1Csst1711rd Apps-al'Ad 1','nefirr.
I he use of this report is subject to the requirements of the Appiaisal 1„3iitute
relating to review by its duly authorized tepic3rniativcc3.
1 have made a personal inspection of the property that is the subject of this .eport.
No one provided signiticant protessional assistance to the person signing this
repot.
In accordance with the USPAP Compeirnicy Pinvi3ion, I rcnity that I have 111C
ki,owledge acid ez peiience to co„plcic ili,3 a33,giimcui and havoc appiaiscd ilu;j
piopeity type before.
Disclosure of the contents of this appraisal report is governed by the Bylaws and Regulations of
the Appraisal institute. In turtherance of the aims of the institute to develop higher standards of
protessional performance by its Members, the appraisers may be required to submit authorized
committees of said Institute copies of this report and any subse,.luent changes or modifications
thereot.
1 he Appraisal Institute conducts a voluntary program of continuing education for its designated
inccinbefs. MAI's vvlio mect the illtamium 3icmdaids of Lli,3 piograia aie avvaided pCiiodic
26-113
475 32"° Street
Newport Beach; California March 30, 2017 NETZER & ASSOCIATES
educational certification. As of the date of this report, I have completed the requirements under
the continuing education program of the Appraisal institute.
I have personally conducted an exterior inspection of the real property located at 4 /� 32nd Street,
Newport Beach, Ualitornia. Based upon my investigation and analysis, 1 have tor,r,ed the opinloir
that the subject ha3 a Market Value, Fee Simple Interest, assuming the Hypothetical Conditions
that the subject is vacant and available for redevelopment and the development entitlements are
available, as of March 21, 2U1 /, of: $2,25,000.
Based upon my investigation and analysis, 1 have formed the opinion that the subject site has a
lair Market Kent, I ee Simple interest; assuming the Hypothetical Corrdaions that the subject is
vacant and available for redevelopment and the development entitlements are available, as of
lvlarch 21, 2u 1 /, of. S 162, /5u.
Kespectfully submitted,
Jam B. etZ MAI
Caliu mia Clan ral %pp wiser No. nCbb3 ia3
11
26-114
4 is 3.Ln° street
Nimpo. t ucach, California March 30, 2017 ML 1 GL' K N ASSUCIA 1 L5
11N1K0IJUCI10IN
purpose of Keport
1 lie purpose of this report is to set forth the data, analyses, and conclusions relative to my opinion
of the Market Value, Pee Simple Interest, of the land and improvements lova Cd at 474 32nd Street,
Newport Beach, Calitornia and to estimate the Fair Market Ground Rent.
t Unction
l lie function of this report is to estimate the Market Value and Pair Market (hound Kent in the
subject property for the Clients internal decision nicking purposes. This appraisal ;s madc at LI,C
,equest of the Lauren Wooding Whitlinger and Melissa 6orde,,, W,LI, the City of Newport Beach,
who are the intended users of this report. In the event that this matter proceeds to trial or other
governmental or administrative hearing, the 1 rier-of-Pact will become an intended user.
Uate of Value
My final exterior inspection of the subject was completed on March 21, 2017- wl„d, ;s the date of
Value pic3ctard iii this ,epoit.
cvpc
of
This report conveys the results of my investigations and analyses concerning the subject property.
Ilie report includes a summary of tine infurniation utilized and the methodology used in
determining an estimate of value. The appraisal process is a systematic a„alys;s wherein data
UUhzed ;m Cst,,,,ai,,,g LI,C va1L,e of the subject property is aaluired, classified, analyzed and
presented. l he first step of the appraisal process involves dettning the appraisal problem. I lie
step includes the identification of the real estate, an explanation of limiting cond;t;o„, stat;„g the
ettect;vC daLC Df tl,c valuC idc,aification of the property rights being appraised and
determining the type of value being sought. 1 he next step is to gather information on tine subject
property such as vesting of ownership, property history and tax assessment intormation. I he third
step is the collection of regional, city and neighborhood data that influences the value of the subject
property through ecot,o,i,ic forces. Relevant factors affecting the value of the subject property
such as zoning, site and improvement data are considered to determine the highest and gest use
of the subject property. Ilie valuation methodology process then discusses the meaningful
applications and limitatio,is of the three app,oacl,e3 to value, whirl, are the Cost, Sales
Co,,,par;son, and Income Capitalization Approaches. The comparable market data is analyzed for
comparison to the subject property as determined by the degree of similarities. 1 lie final step in
the appraisal process is tine reconciliation of tine data gathered to deternnine the final value estimate.
All sections of Line appraisal report are structured to show Line reasoning and justification ut;lized
26-115
4 /a 32" St. cut
Nc.y vu, t ticcadi. C.,.liiur... a
Ma. cn 3U. Lu l /
in the estimate of Highest and best use and conclusion of value
report contains various information supportive of the appraisal.
Interest Appraised
IN E 1 Z.EK N ASSVLIA 1 ES
l lie "Addenda" section of the
I lie mie.est appraised Is the "Fee Ample Estate"/I, which is det-Mcd as follows:
Absolute ownei-sh/JJ llnencunfije/'ec7 by any whet- /nte'i'Cs/ o/' esicire, sub .cri rialy to
/lrC 11//rl/rT/Ir//r.i a..I)osed by the �;DJe/'/rf,tu,,iu1pariC/'� ref iaxcT/ra/l, Bnu/?eni clolnc!!n,
pr/llCe priii e/' rTnc7 useltuca.
market value uefined
l lie term "Market value -7'. as used in this report, is detined as follows:
1 he most probable- price- it,hich a properly should bring in a comj7etilive cmd open
/nai'kei linc7ei' all conclit/ons i'equis'ite to cl /idi'sclle, 117e bllye'i' and selle'/' each aciing
prlldenTly anc7 knowledgeclb7y, and assuming lige price is not atfeciec7 by unr71re
slimllllls.
implicit in this dettliition is the consummation of a sale as of a specified date and
the passing of title from seller to buyer under conditions whereby:
1. Buyer and seller are typically motivated -
2. Both parties are well-informed or well advised- and acting in what they consider
their own best interests:
A reasonable time is allowed for exposure on the open market:
4. Payment is made in cash in U.S. dollars or in terms of financial arrangements
comparable thereto: and
J. l lie price represents the normal consideration for the property sold unaffected
by special or creative tinancing or sales concessions granted by ally 011e
associated with the sale.
Market Rent Defined
I lie terns "Market Kent'/3, as used in this report, is defined as follows:
the mosT probable rens That a pi-opertj/ should bring in a conymi Live and open
Inal'ke'T I'efle'ciing all condliTlons and restrictions of I Me sI)eciflec7 !Case agi'erinent
/nclll>hni lei -m, rimed rrclji,swteia wed /'e rT/awicitr, pu,,,ru/trr7 LFSr , LISC
rT/Irl r_ jJC/1 C u/41gcti rm ; /l/C IrssrC cruel Irs ri/' unrll CTC/urg 171'ur7Crrlly ural
knriri1lCd Ct7/�l}, CT/rcl u s'1lnr//1t? consinninat/on (/f a lease cln7ti'act ci (,,c! .iliGClfrLd
delle and the passing of' the leasehold fl'om lessor to lessee tinder conditions
whe-r'e-b:I,:
1 . Lessee and lessor are typically motivated;
2. Botli parties are well-informed or well advised, and acting in what tile), consider
their best interests;
1 ANNialazzl IIIJIitUtC, I IIC UiCtiOuaiy Of Kcal t,at..tc Akprainal, I-OLlltll t1601 (l;l1 O, 2002), N. I I J.
ANNaa;s.d lu3t;tatc, I Ix U;CtiOuai v %if KCaI EStat'c A par;3al_ Cd.t;Ou_ kCii;c.tgo. 2uu2)_ N. I / /-1 /8.
ANIn1;sal InStltUte, FOUld, Edition, �ClucaSv, 2002), p. 1 /6.
4
26-116
zi/n iz"a atreut
IVuvvlw, T Hvac11, lalif0ruia Iylarun A, All NL 1 LLK & ASSUI IA 1 LS
3. A reasonable time is allowed for exposure on the open market;
q. The rent payment is made in terms of cash in United Sates dollars, and is
expressed as an amount per time period consistent with the payment schedule
of the lease contract;
5. 1 lie rental amount represents the normal consideration for the property, leased
unatfected by special tees or concessions granted by anyone associated with the
transaction.
Probability of changre
17ie market value of the subject property appraised i. C,,timated a3 of il,C date of Value stated in
this report. Constantly changing economic, social, political and physical conditions have varying
eftects upon real property values. Lven atter the passage of a relatively short period of time.
property values may change substantially and require a review based o,. differing market
conditions.
Legal Description
l lie subject is a portion of a larger site and a complete legal description of the subject property
was not provided; however, this does not impact the analysis or conclusions presented.
Uwner of Record and Property History
Based on a review of the Urange County Public Records, as of TI,C dar Of valuC, tale to the subject
property is vested as:
City of Newport beach
A review of the Public Kecords indicates that the subject rias been under continuous ownership in
excess of three years. l have not been made aware of any current listing for sale; offers to purchase
or pending; sales.
AssL«I,p60113 and Limiting Co,,ditlons
The analyses and opinions in this report are subject to the following assumptions and limiting
conditions:
Hypothetical
l he subject is currently improved with a tire station that is owned by the City of Newport beach
and for toning and Land Use purposes it is located Statistical Area 135. As of the date Of value all
of the building square footage permitted in Statistical Area B5 has been allocated to current
projects. At the request Of the client, the analysis is based on the Hypothetical Conditions that
subject is vacant and available for cede velopine,tt aad the bu;ldi,.g square footage Call be
Lraastec,cd to the subject s;te pCriinTTiiig tuiurC dr-VCIOpin'cnT 10 d1C 3u17jCCI' hidjr3i uiid bC31 uL5C.
I reservre the 7,&Iit to ,hake SuCli adjU31111CHIS 10 Ll,c analy3i3, vp111iM113 acid COiiClu3itIiiS set forth ii,
Tlii3 rCpo i as may bC iCtluuCd by cous;deiation of additional data or more reliable data that may
bc%,rimC available.
5
26-117
475 3zn° Sheet
Newpo,t Bea:l., California March 30, 2017 ISI; I GLK W ASSUCIATLS
General
No investigatiotr of title to the property l,as been made, and the premises are assumed to be free
and clear of all encumbrances, leases, use restrictions, easements, cases or actions pending, except
as specifically discussed in this report. Title is assumed to be good and marketable, and that the
property is under responsible ownership, competent management and available for its highest and
best use.
No survey, legal, or engineering analysis of this property has been made by the appraiser. I assume
no responsibility, for any condition not readily Observable from the customary inspection Of the
premises, and that there are no hidden Or unapparent conditions Of the property_ subsoil or
structures that render it more Or less valuable, except as noted herein.
I he distribution, if any, of the total valuation in this report between land and irnprovenicats applics
only under the stated program Of utilization. The separate allocation toi laird amid buildings must
,lot bC L13ed 111 C0111u11Ct1O11 will, ally Othei applai3al and 1J invalid If SO Used.
I lie neaps, plats, photographs, and exhibits included lleleu, a;C fO; MUS117a1,O,1 Only; as all aid In
visLlalizi„b rnane;s ISLUSSCd vv,il,urr the appraisal. They should not be considered as surveys nor
relied upon for any other purpose, nor should they be removed from, reproduced, Or used apart
from this report.
I assume no responsibility for economic or physical factors which may affect the opinions herein
stated which may Occur at some date after the date of value. 1 reserve the right to make such
adjustments to the analysis, opinions and conclusions set forth in this report as may be required by
consideration of additional data or more reliable data that may become available.
information contained in this appraisal has been gathered from sources, which are believed to be
reliable, and where feasible, has been verified. No responsibility i5 assumed for the accuracy Of
information supplied by Others.
No opinion is expressed a5 to the value of sub -surface oil, gas; or mineral ;;&his. v; vd1Ctl,Ci 111C
property i5 subject to surface entry for the exploiatiol, vi i jinval Of 3L1C11 uratc;JalS except as
expiessly stated.
I lie property is appraised assuming it to be in full compliance with all apphcablc fLAccal, JLalc;
and local e11v,;011,li e,ital regulations aid lawJ; U111C33 0111C1 vvr3C 31UMd.
I Ile p;Opc;Iy is appeased assu1111L1g that all appllCablC ZO,rmg a113 UJC ;Cj;UIat,O,rS and restrictions
have been complied vvith, Unless otherwise stated.
111C piVpCity 13 .,pp1ai3Cd aJJLlllllllg that all ;CLluired licensees, CC;Lrf VU[CS Of OCCLpancy, consents;
or other legislati.re admii,ist,alive authority from any local, state, or national government or private
entity or organization have been or can be obtained or renewed for any use on which the \ alue
estimate contained in this report is based, unless otherwise stated.
i Ile Americans with Disabilities Act ('AuA") became effective January 26, 1992. 1 lie appraiser
has not made a specific compliance survey and analysis or this property to determine whether or
not it is In conformity with the various detailed requirements Of the AUA. It is possible that a
compliance Survey Of the property, tOgether With a detailed analysis Of the requirements Of the
ADA, could reveal that the property is not in compliance with one or more of tile requirements Of
the Act. If so; this fact could have a negative cffecl L,po,l the value of the p;ope;ty. S„1CC the
app, a. -, lldJ lin d,iect ev,de„cr- cclatll,g t0 dii3 rJJUC; pVJJIbIC 11O1rCOnrpl,a,rce Nv,th the
reLlUirements of the ADA in estil„at;ng t11e value of the property has not been considered.
6
26-118
475 32"" Street
Newport Beach, California March 30, 2017 NETZER & ASSOCIATES
Unless otherwise stated in this report, the appraiser did not observe the en,siC„CC of I,aaa;dOua
umte,;al, which may o; may not be picsCiit on t1,C p,ope,ty. The appraiser has no knowledge Of
the existence Of Sial, u,ale,ialS vn the property. The appraiser, however, is not Llualified to detect
such substances. The presence of substances such as asbestos, urea formaldehyde foam insulation,
or other potentially hazardous materials may affect the value of the property. I lie value estimate
is predicated on the assumption that there is no material on or in the property that would cause a
loss in value. No responsibility is assumed for any such condition, or for any expertise or
engineering knowledge required to discover them. I lie client is urged to retain an expert in this
field, it desired. If the client is aware Or becomes aware of any conditions_ the appraiser should be
consulted immediately to assess the impact, it any, upon the market value.
1 he appraiser reserves the right to make such adjusunents to the valuation herein ;epo;ted, as ,,,a)
be required by consideration of additional data or more reliable data that may bee.onic available.
No opinion is intended to be expressed, Or implied, for matters, which requ;ie legal enpe;t,3c o;
specialized investigation or knowledge beyond that CuslO,,,a;;ly Cu,ploy-Cd by real estate
app,a,3C;,
I shall not be iegw;eEl, by reason of this app;a;3al, to g,vc m3tnuo„y o; to be in attendance in court
Or any governmental Or Other hearing with reference to the property without prior arrangements
having first been made with me relative to such additional employment.
Possession of this report, or a copy thereof, does not carry with it the right of publication. It may
not be used for any purpose by any person other than the party to whom it is addressed without the
written consent of the appraisers. I do not authorize out of context quoting, nor partial reprinting
Of the report. In the event the report is placed in the hands Of a third party, it is requested that such
party be made cognizant Ot any and all limiting conditions resulting in the basis of my employment
and the discussions thereto, as well as those set forth herein.
I Ile submission Of this report Constitutes the completion of the service authorized. It ;S
Upon the Condition that the Client will provide the appm;3c; cuzarima;y c'viupcii3atic,il relatives in
any subsequent ;equi;ed depos;tioii, c'vufccirnires, additional preparation Or testimony.
I Ile appraiser respectfully requests that neithC; all „v; pa;t Of 1hC Cvnneuis of this report shall be
;T�'Cwother nedla,d*.ssenninated to the p«blic Th;Ougl, AVCu, ,
Wiili'vut vv;J1C11 C0113C„1 acid app;Oval Of the author, particularly the valuation conclusions, the
identity of the appraiser, or any reference to the Appraisal institute or the 1v1A1 designation.
In the event the appraiser is subpoenaed for a deposition, judicial or administrative proceeding,
and is ordered to produce the appraisal report and file, the appraiser will immediately notify the
employer.
It shall be the responsibility of the employer to obtain a protective order.
Tile liability of Netzer & Associates and the appraiser responsible for this report is limited to the
client only and to the fee actually received by the appraiser. further, there is no accountability,
obligation or liability to any third party. If this report is placed in the hands of anyone other than
the client, the client shall make such party aware of all limiting conditions and assumptions of the
assignment and related discussions. the appraiser is in no way responsible for any costs incurred
to discover or correct any deticiencies of any type present to the property -- physical, financial,
and/o; legal.
It is agreed that the appraiser is not a necessary patty ;i, a„y ;,,q«;;y O; ja1c;al p;uxcd;,,gs. if
Called «po„ 1'v 1C31,fyy ;„ ally lil;gat,i7„ yr vlhc; p,OCeeding a,ising Out the dul,CS ;n this matter, and
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INCiNpaart steads, if;a IVIa,:n 3U, LU1 ! IN L• 1 GL' K & ASSUCIA 1 La
if I am compelled to incur court costs; attorney's fees or other out -of -Docket expenses in connection
with court proceedings, such costs or expenses, together with the appraiser's usual hourly per diens
applicable for study, preparation, testimony or travel will be paid by the party (or parties) who acts
to bring any suit reLluiring a judicial proceeding.
Any dispute or claim made with respect to this report shall be Submitted to and resolved in
accordance with the rules of the American Arbitration Association for arbitration, and tale decision
of the Association shall be binding. All appraisal services, pursuant to this ;epoit, 3I,all be der,,,rd
to be cOutiacicd foi and rendered in Umnbe Comity. CallfoCIIIU, and any arbitration or judicial
pcoc.ccd,,,lja Shall take p1ac,C 111 01a11g'c CCu11ty, Califoinia.
1110 a,g,lain y of ihi3 appiaisal iepoit ,o a 1nc,,,bri of thr Appim3al Institute. The Bylaws and
Regulations of the Institute reLlui; e each member t0 control the use and distribution of each
appraisal report signed by such member. Therefore, except as hereinafter provided, the party for
whom this appraisal report was prepared may not distribute copies of this appraisal report, in its
entirety, without the written consent of the signatory of this report. l he report and parts thereof
and any additional material submitted, may not be used in any prospectus or printed material used
in Coil_lunctlon with the sale of securities or participation interests in any Public offering as defined
under US Security laws. Purifier- neither all nor any part of this appraisal repoit shall be
disseminated to the general public by the use ol'advertising media, public ,natio„3 mr-dia-, uCwa
nied;a, sales ,redia, or other media for public CO,11u1L111,caLoa ov;tl,Out the pe;uc wi,tmi, r -mi Xi t of
tic 31gl,alvi y 17f 1h13 app, a,Sal i Cpv, t.
Ai,cEA DESCKir 1 101v
1 he subject is located in the City of Newport teach in coastal urange 1 01.111ty. lvlore specifically,
the subject is located in the Lido Village/Cannery Village neighborhood adjacent to Newport
1-laiboi. Nccwpoit Haibo, ,S the focal pout Of 111C mcn pn atcd city of Nccwpvil Bcac,i, whirl, 1�l
located in coastal Orange County approximately 10 miles southwest of the Santa Ana Civic Center.
I he coastal city was incorporated on September 1. 19U6. 1 lie State Uepartment of h inance reports
an estimated population of 85. 196 persons, as of the -?U I U Census. According to the City Chamber
of Commerce, the influx of the tourist population during the Summer months increases the
population to well over I UU,000 persons.
With the annexation of Newport Coast, the City is comprised of approximately 23 SLluare miles of
land area, approximately 25.5 square miles bay, harbor and ocean waters for a total area of
approximately 50.5 s,,luare miles. The city has 6.1 -miles of ocean ffuntagr and 25.4 -miles of
harbor frontage. Newport Harbor is one of the largest pleasure craft harbors on the West Coast
and is home to approximately 9,9UU boats, 1,20U piers, 2,�UU commercial slips and side ties and
moorings
Newpoit Harbor is formed by the Balboa Peninsula on South and the mainland on the north and
extends inland to Jamboree Road and the north end of the Upper Newpoit Bay (Baer. B.,y).
l raditionally, most of the boating activity within the harbor is concentrated in the Lower fay as
most of the Back Bay is all ecological preserve with limited boating facilities (Newport Dunes,
N.
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26-122
475 32"" Street
Newport Beach, California March 30, 2017 NETZGic;R ASSIOCIATLS
Newport AqUat;c Center_ U.C.I. lkow;,,g base, Bayside Village and Dover Shores). l lie Balboa
Peninsula consists of all the contiguous land east Of 4:5"' Street extending to Peninsula point and
thejetty at the mouth of Newport Harbor. 1 he south side of the Peninsula consists ofsandy beacl,e3
On the Pacitic Ucean while the north side of the Peninsula forms il,e SOull,Cr„ perimeter of Newport
iia, bm .
Access to the Peninsula is via Newport Boulevard, Superior Avenue7talboa Boulevard, or the
famous auto ferry that runs between Balboa island and the Balboa Peninsula. Newport BOUIevard
merges with Balboa Boulevard at 21`` Steel „ear Mchadde„ SLluare and the Newport Pier and
Balboa Boule % and contillUes eastward to the end of the Peninsula and eventually turns into Channel
ltoad. Access the inland side of the Harbor is via Coast Highway, Bayside Urive and Harbor
Island Urive. Additional access is afforded to the residents of the eight ;ola„33 th,a ring the harbor,
which include Newport Island, Lido Isle, L;,,da Isle_ Harbor Island; Bay Island the only island
with no x ehicular traffic), Balboa Island; Little Balboa island and Lollins isle.
As noted above, the subject is located in the Lido V inagel annery Village neighborhood, which
is a mix of residential and commercial uses including restaurants and harbor fdated buS;,,esses.
I lie primary access to the neighborhood ;s v;a Newport Boulevard. Via Lido, Lafayette and 3
Street. A Location Map has been included On the previous facing page, wnicn shows the subject's
location relative to the surrounding community and transportation network.
THE LAND
I nrgtinn
The subject is located on the north side Of 32" d Street at its intersection with via Oporto, in the
ity Of Newport Beach, l alifornia. 1 he location corresponds to the street address of 4 /5 �;2 '1
Sheet_ Newport Beach_ Ualitornia (hire Station No. 2). The Ura„be C'0L11113 l ax Asses3or
,de„t,f,'c, [lie 3ubjecl aJ a portion of Assessor Parcel 423-1 11-02.
Size and Su -
As noted the subject is part ofa larger Assessor Parcel that has an irregular shape and is the former
site of the City Hall. 1 he client has provided an Exhibit that Outlines the subject parcel indicating
it has a generally rectangular shape w4h a gross area of 0.267 aero, or 11,612 3quarc feet. I lie
Assessor's Plat Map has been included on the facing page for reference and the City's exhibit of
the subject is included on the next facing page.
Streets and Access
�2” d Street is a secondary arterial that has an east/west orientation. Based on a review of the
Assessor Plat Map and City dOCL1111e1,i37 dii3 port,v„ Of 32nd St,cct has nm bm, dedicated as a
y
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Fire Station
■
475 32"" Street
Newport Beach, California March 30; 2017 NETZER & ASSOCIATES
public 3L,Cet; however, it is open to public use with an ultimate 90 -foot r,-l,t-Ot-vvay. It ;a Ceniuf
crowned and improved vvith asphaltic concrete paving; concrete curb, gutter and sidewalk; and
electric overhead street lighting. There is a single traffic lane in each direction with metered
parking is both sides of the street. 1 lie subject leas a single curb cut driveway on 32" d Street.
Via Uporto has a north/south orientation that extends two blocks trom Via Lido to ]Y2" d Street. It
is a one-way 311Cci a„T,1 it „leets V,a Malaga at Lhc 3ub]CCL vvhcrC ,T ,a a 2 -way street. It is dedicated
to a width of 40 -feet and is center crowned and improved with asphaltic concrete having; concrete
curb, gutter and sidewalk; and electric overhead street lighting. I here is a siri5le, southbound
traffic la„e Nv;th metered parking on both sides of the street betwee„ Via Liao .,,,d Via Malaga.
The section oi� Via Oporto from Via Malaga to 32nd Street has two-way traffic with no street
parking. I lie subject has a single, curb cut driveway on via Uporto.
1 opogi_aphv and Urainage
Based on my inspection, the subject has a generally level topography at street grade. l l,e sL,bject
was ,,,spCCTCd dur,,,b tali wCc1TIxc*1 ICwCvu,, ,t appears that the dra,,,age is generally toward the
perimeter of the site.
toning
I he City of Newport Beach has assigned the Commercial -Visitor -Serving -Lido Village (CV -LV)
zoning classification and Land Use Designation under the City's Cieneral Plan is Visitor-Sc.v;„ g
Co,,,,,,erc;al-Lido V;llagc (CV -LV). The CV -LV zoning district and Land Use Designation are
specific to the subject and both the Cv-Lv Zoning and Land use designation state the rollowing:
...applies to the Former City Hall complex located at the northeast corner of the
intersection ot, Newport Boulevard and 3 2nd Street. l he C v -L v designation
provides for a range of accommodations (e.g., hotels, motels, hostels), goods and
services intended to primarily serve visitors to the City of Newport Beacli and a fire
station. Limited use overnight visitor accommodations and residential uses are not
allowed.
Thr- Laud lJ�c tabic (1 abIr LU2 �- A„Ou,aly LurC16 M) ;dcut;fica tl,C 3U[jCCT as A,uv,,,aly No. 85
in Statistical Area 135 and indicates that the Development Limit in terms of SLILiare footage is
limited to a 98, /25 Square foot hotel (under construction), but notes:
Accessory commercial floor area is allowed in conjunction with a hotel and it is
included within the hotel development limit. Municipal facilities are not restricted
or included in any development limit.
I he hotel that ;s a„dei co„STrumio„ u„ the a pOfUOL1 Of 111C Sub]ect properLy has been allocated all
of the &Iuare footage in terms of the "Development Limit” and no SLluare footage is allocated to
the subject (tire station) site; therefore, the analysis is based on the "Hypothetical f, on5ition77 that
I
26-125
z+
Ne.vi,o1 t Beach, calitth ilia Mai un SU, LU 1 / N L 1 LLK & ASSOCIA 1 LS
square tootage can be transterred to the subject site and the "uevelopment Limit' does not restrict
the site from being redeveloped ro its highest and Best Use.
A review of the C o maercial Loilii,b ,CLlui,ements iliCludes tLC tollowing permitted uses:
handicrafts industry; boat rental and sales; marine retail sales; visitor serving retail; financial
institutions and related services; business offices; art studio; food service; health & tiuless services
(ul,de, 2,000 Sq.Ft.). marine entertainment and excursion services, personal seev;cu3:. iakC-vui toed
service, and nail salons. 0111e; «SCS a1'c pCimitted with the issuance of a Conditional Use Permit
(UL M). a minor use Permit (MUP) or a Limited I erm Permit (L I Y).
I lie Uevelopment Standards include a minimum site area of IU,000 square feet, with a minimum
lot width of 5U -feet. I he tloor area ratio (FAK) is not defined. the zoning notes that "scibacks to
3?�'� StiCct and V1a C)pv1L0 dr „vt apply to F11C Statlou No. 2; howevCi, the typical" setback along
_)2 nd Street is 1 -foot for buildings up to 35 -feet with a 5 -foot side- and rear -yard setbaci< being
"typical". I here is a -_'U-percent "Upen-Space" requirement. Un -site parking is required based
on the use and generally one space per 250 square feet for most cotn,neecial Use i3 iCLlu;;Cd.
l he abnvC ,n a b„Cf Su,,,,,,aiy of t1,C .,v,,,1,1_, 111fvi111at1v11 C111d 111C Xadci is uigcd to consult with the
City if any future redevelopment of the subject property is anticipated.
Soils and ueology
I have not reviewed a soils or geo-technical investigation for the subject site; however, no obvious
signs of settlement that impact the structural inte&rity of the improvements were ILOMd dL1ri,1g ,1,y
physical inspection. It is assumed that there are no soil or geotechnical conditions that impact the
structural integrity or load bearing capacity of the subject. It appears the site is suitable in load
bearing capacity to continue to support the existing improvements or any improvements proposed
In the future; however, it is beyoad the Scope of this aSS,gui„e„t to dmci,,,,,,c disc oC,13 and gcnlnL;� ,
of the site.
utilities. Water and Viewer
All of the necessary utilities including sewer, water, gas and electric service, are available to the
site. According to the City, the following entities supply utility services to the subject:
Water: Uity of Newport Beach
Sewer: City of Newport beach
lias: l lie (ias Company
Electricity: Southern Calitornia Edison
Easements and Encroachmeats
I was not Provided a Preliminary Title Report that applies the subject. Based oi, my inspection of
site and improvements there are no obvious signs of any adverse easements or encroachments that
26-126
4/s 3G'-"' SUM
INCIT JIM t 13caC1I, 01,11001 uia Ma, en SU, lUl / ISL' CGL' K N ASSUC.IA CES
would adversely impact the subject. 1 he existence of typical utility easements. that do not
adversely impact the subject, is assured.
Environmental Conditions
I have ,lot reviewed a Phase I enviroame11ia1 3ilr that applies to the subject property.
It is beyond the scope of this assignment to assess the presence of any toxic contamination, it any,
and it is an assumption of this report that there is no contamination in or on the subject site that
would impact the conclusions presented.
"TAXES AND ASSESSED VALUATION
1110 3ub1CCl 13 l0ralcd 111 1 a.. Raic Aica 07-001 with a "Base Tax Rate" of 1.04950 -percent of the
total assessed value. Based oil a review of the Assessor records, the pertinent tax information for
tax year 2U 16/1 / is summarized in tele following table.
Assessor Parcel No.
42-3-1 1 1-U2
I ax 1<ate Area:
U /-UU I
Base 1 ax Kate:
I .u4qJ6"/o
Assessed Valuation
Land:
$-U-
Inlprove111c11t3:
-0-
Total Assessed value:
$-u-
2u 16/2U I / 1 axes:
$1, /6 /.84
I Ile annual taxes are approximately 19/0 of the total assessed value. 1-lowever, since the passage of
Proposidon I'J, 111 California real piopelty 13 1C-a33C33Cd up011 t1.u13fei of t1ticc of sale to reflect the
current market value. Accordingly, the actual taxes are subject to change; however, there does not
appear to be any reason for the taxes to escalate rapidly in the future. I Ile subject is owned by a
municipality and is exempt tronl the "base' property taxes and the above taxes ($1-767.84) ietfeet
DiLcm A33c33,,,c1a3 a11d/oi User Pees. The Direct Assessments/User Pees are a fixed fee and are
not based on the assessed value. Taxes and assessments on the subject property are similar to that
of the neighborhood and surrounding competitive communities.
THE IMPROVEMENTS
I he subject is improved with a fire station that was originally coasu•ucted in 19�'. with a two-
3toiy addition 111 1966 and several smaller modifications and upgrading continually since 1966.
l lie most recent building permit is for re -rooting, which was completed in August 2U 10. 1 he
appraisal is based on the assumption that the site is vacant and available for redevelopment to its
Highest and Best Use; therefore, a complete desci;ptioa of the i1apiove111e11ts is not included.
12
26-127
475 32"0 Street
Newport Beach; California March 30, 2017 NETZER & ASSOCIATES
HIGHEST AND BEST USE
"Highrst and Brst Use" is all appraisal coixcpL whirl, i3 defy cd iii i, Hictionat y of R-cai-Estate
L Fourth Edition, as follows:
The re-asonahly prr.hahle and legal use gf vacanl land or an improved properly,
Lhhich is physically possible-, appropriately stipportc-d, jitumcicrlly feasible, anct Thai
re'sulls in the highest value. l he .1bur crileria Mal must be Ines are legal
pernissiliilily, ph),sical 1)ossibiliry,.tinancia7.teasibiliiy, and maxinnun prg1hahi1iry.
Inherent in this definition are several conditions. which must be saiisf,Cd by the existi„g or
proposed use in order to develop the maximum value. The use must be physically possible for the
site. Soil condition, topography, size and shape must be compatible with the proposed use. I Ile
use nlusL be legally permissible in that it tllusL conform to current or projected zoning. Similarly.
the use MUSL noL be precluded by deed ieSL;ictious o; oche; C11CUMb;allCc3, which may Built
potential uses. Also; the use must be economically feasible. The market should indicate sufficient
economic demand so as to support a proposed use of the site. Among the various uses that meet
Lhe above criteria, the use which creates Lhe greateSL rate of return and maximum productivity is
cunsidc,cd Lv be Llicc liiglicc3L acid bc3T uaC of the site.
Highest and BCst Use C;im,ia - As If Vacant
The following is an examination of the subject parcel, as if vacant, in regard to the four criteria.
I he size and shape of the parcel will physically allow for the development of a broad range of
pernliLLed uses. As previously indicated, subjecL has been assigned Lhe Uonllnercial-Visitor-
Scr v,ng-Lido V,llagC (LV -LV) f-o„ing Classification and Land Use Designation Linder the City's
General Plan is Visitor -Serving Commercial -Lido v itlage (C V -L v). i lie C V -L V zoning district
and Land use Designation are specific Lo the subjecL and both the l;V-LV Coning and Land Use
dcaigiiatioi, 3tate dic followuig:
applies to Lhe former City Hall coi,,ple. located at die uoidieast corine, of the
iiac;�CCLicii of NCwpv;i Buulcva,d and 32�d SLiccL. II,C CV -LV dc3i uaLicii
provides for a range of accommodations (e.g., hotels; motels; hostels), goods and
services intended to primarily serve visitors to the City of Newport Beach and a fire
station. Limited use overnight visitor accommodations and residential uses are not
allowed.
Ifle underlying zoning and land use designations are site specitic and permit commercial
develop,,,cnL, w4ho,,t a ccsideiiiial crimpo,,e,ii as ;ef ccued by much of the redevelopment in the
immediate area that includes either "live -work” units with ground floor commercial space and
either one- or two-story residential uses above in the mixed-use zone along the waterfront or in
Cannery Village, or Lwo-Story residential units in Lido Village. A prime example of LhiS is Lhe
"Canile;y Lofts". wl,;cl. we;C developr3 i,, 2004 a113 occupy 111c 500 -block of 30"' Street (between
I�
26-128
4 St. vet
IN Beard, l.alitvl wa Ivla1 cn sU, LUI / IN L I LLK & ASSVI IA 1 LS
villa way & Lafayette Avenue) and four waterfront lots on Lafayette Avenue (2106 dlru 2912).
Mere are several Other examples of smaller (I or 2 lots) in -fill mixed-use pf0jCC13 1111'vugh JUI
Cannery Vdlagcc. A second example i3 i11C NCwpori Bay Marina_, which 1S a waterfront mixed use
development that is under construction along the waterfront at 2.3Uu Newport 1:3oulevard. Across
from the Subject property along via Lido, an office building has been razed for the construction of
a 23 -inlet condominium project (19 -dwelling units per acre); however, ihi3 penjcci appearS Lo have
been put on hold. The assemblage Of this land involved several transfers among related entities
between 2000 and 2U 1 1 and the exact sale price for the entire project could not be confirmed with
any certainty. According to the Public Kecord, one portion of the site (17,500 &I.R.) sold in
December 2012 for $2,500,000, or $142.88 per s,-luare foot; however, the parties to the transaction
would not confirm these terms. A complete Highest and tsest use analysis to assess the specific
use is beyond the scope of this assignment; however, based On the location relative to the
Surrounding aelghborhood and the underly111& ZO111111;, 111 111y Oplttt'v11, dir higl1cst and best use of
the subject parcel, as if vaeaut, would be to redevelop the site with a commercial development as
permitted under the existing zoning and Land Use uesignation — assuming the development
entitlements are available.
Highest and Best Use - As Improved
File Sublcrt 1S '.1SSullled to be vacant mid avallablC fn, rCdrvclnp111Cut to its hi -hest and best use;
therefore, an analysis "As -Improved" is not include.
AYYKAISAL FI-R)CEDURES
I he appraisal ot'real property generally involves one, two or three of the conventional approaches
to value, and is based upon consideration of market -derived data, the experience of the appraiser,
autd op11uo113 of Wiper 111f01111Cd Market participants.
Three basic approaches to value are available to the appraiser: the t- Ost Approach, the Income
Approach, and the Uirect, or Sales comparison Approach.
(.post Approach
I his approach entails the preparation of a replacement or reproduction cost estimate
of the subject property improvements new (maintaining, comparable duality and
utility) and then deducting for losses in value sustained through age, wear and tear.
functionally obsolescent teatures, and economic factors affecting the property. I lie
laltd valuC t3 thele added to illc depreciated Cert aloug %Villi aft allOwallcC for
catrepreneurial profit to arrive at a value estimate.
Income Approach
I lug approar-ll 13 baJcd up011 thr, the'vey thai the valuC Of pMpCity M111, to be acct by
the 11et income that is to be realized by the owner. It is, in effect, the capitalization
14
26-129
475 32"1 Street
Newport Beach; Capt-urllia mal en iu,1917 NE I ZER & ASSOCIA I ES
of expected future income into a present worth estimate. l his approach requires an
estimate of potential gross income, an analysis of all expense items, the selection
of a capitalization rate, and anally_ the processing of the net income stream into a
value estimate.
Sale.3 Comparison Approach
I his approach is based upon the principle that the value of a property tends to be
aci by the puce at which comparable plopefues have recently" bccil Sold Or for which
they were aequiued. J1115 appr'vach eccLlulrca a dcinllcd Comparison Of Sales of
cornparablc plopclilc3 wall dic Subject plopciiy.
Approaches Used in the Valuation of the 4
ubiect
I lie Lost Approach fila} be used to estimate the market value of relatively new improvements;
however, given the assumption that the subject is vacant the C..OSI Approach is not appl,cable.
I lie Income Capitalization Approach is relevant to Most u1C0111C produCLllg piopccideS; however.
with the assumption that the SUb]ect is vacant, the Income Approach is not applicable.
1 he Sales L-'ornpariSoil Approach IS based On the principal Of SUbStitUa011, which implies "the value
of a property tends to be set by the price that would be paid to acquire a Substitute property of
sllllllai •� des.eablllty and utility. /a Uvell the prOMCdlllg KICL133iUll alld tllc illiCrartlons Of iilarket
participants, the Sales Comparison Approach is the most relevant in the valuation of the subject.
SALLS UUMrAK1SUIN ArrKUAUH
l he Sales (-'ornparison Approach has broad applicability and is persuasive when sufficient data is
available. l he Sales Comparison Approach is most useful when a number of similar properties
have been Jold ill tile• JLLL} UCi lllafkci arca. In the Sales Comparison Approach, I researched the
Public Records, Costar Mv1PS (a market research firm that provides data on real estate
transactions) and conducted interviews with several market participants. where possible, pertinent
details pertaining to the transactions were verified with at least one party to the transact oil.
111 dir- Sale) COmpai13n11 Appi0zirh. appMprlaiC ulliB of l.vlllparlJvll prvvldC a LIJCfLII alld
meaningful method of analysis in estimating value. Commercial land is generally compared on a
price per square foot basis or a price per door Area Katio (hAlk) foot in markets that permit
ditferent density of development within the commercial zoning parameters and the PAR can be
calculated for the subject and comparable properties. After identifying a iltlllibcf of potelitial sale,
1 selected the sales that had the most similar characteristics when compared to the subject property.
1 he table on the following page is a summary Of the data, which is judged to be pertinent in the
valuation of the subject. Descriptive photographs of the comparable sale data are included in the
Addenda.
d Appraisal ImAILule, I lie Appiaiaal of Keal L�.tate, Lleveuth Laitiou, (CluCago, I`I`Ib), p.3`18.
15
26-130
4 /5 SL011 5tt Vet
NV.v1101 t Ifeach, C alitvt ilia Mur e6 JU. z017 NETZER & ASSOCIATES
LAND SACL SUIVIIVIAKY
MARCH 2017
Data No.
Sale
Site Area
Zoning
Total
Sale Price
LUCativu
Date
(Sq.Pt.)
Proposed
Sale
$/Sq.Ft.
A3NrN3lf Yafeet Ido.
Doe. No.
PAR
Use
Price
$/FAR Fool
Jun�CC[
47532e°Street
D.O.V.
11,61LL
CV -LV
IN.A.
M.A.
Newport Beach
3/21/2017
N.Av.
Rede.ew-1,
Portion of 423-111-02
li
32U 1 N'cwt,vrt blvd.
I U! V2 14
1 J,V 12
uu! K-2
$(7,350,(100
$406.74
3204 M.11Cu3 AvChUC
14-4001 1
U.J — (l
MliluCipal
N.A.
NCwl,vitIicaCh
+
N.A.—K-2
Parl'<ut-Lot
42.1- I UG-U.i tT
423-382-05
4L 1 ZY1' 5trCvt
12%20 l:)
1:),D 12
M u -F— V
$ 1 _50,000
$286. /4
Nz-1,oit BC.,CI,
15-1306�L
U.J-CV111ln.
1-,0zV'cloP
N.A.
047-043-12
1.0 -KC:,.
to i,,;xccc1-u5C
3
2820 L..r.,yCttC
4" 1 /.Lu I D
17.8%2
IVI U- W 2
$ I I ,60U00
$44/.13
047-023-01 & -02
15-1682/1
N.A.
2900 Lafayette
9,000
Ivl u- W 2
047-022-08
501 29"' Street
5,580
Ivlu-CV
047-0»-05
504 29i1' Street
4,500
MU -CV
047-051-07
25,942
Redevelop to
Newport Beuch
N.A.
Mixed Use
4`
302-314 3i1 Street
141,`2016
20,56
Downtown
$5,250,000
$255.1' 1
I Ittlttingtott BeaClt
16-11463
N.A.
Specific Plan
024-154-01 3 to -016
Mixed Use
5'
2811 Newport Blvd.
6/14/2016
17,772
CV
$1,975,000*
$111.1
Newport BeLtCh
16-267576
0.5
Redevelop*
04
6/
4 I 0 2911, stt Cet
I I i 10/20 16
/06
Mu -CV
$4,1007000
S� 89. l4
Newport BeaCh
I6--)/0820
2,850
Redevelop to
N.A.
04 /-uj-2-U 1
10,536
MixCa UNC
& 04 /-04 i-2 I
N.A.
/'
2244 W. L.v.tat 1-1,11711 way
1/11201 /
+z1I-iuU
Iglu -MM
$8,00(1,000
$I`.L.//
NCNvP0it li'caCh
I /-4.i /82
N.A.
KcaCvcl0p w/
425 -4/I -2t7
Aa-ja Clit
8!
,u0 C. balGva BOUICv.iin
2/I /1201 /
-),1`)8
MU -V
$I,�0U,000
$288.5/
NC%Yp it bEaCh
[/-59492
N.A.
011khowu
043-115-U/
*Seller required covenant Thai prohibits any ilnure resiaurani or iiwd usa
16
26-131
47532 Street
Newport Reach, California March 30, 2017 NETZER & ASSOCIATES
Discussion and Analy3rs
The eight land sales are all located within the subject market area — the orange L;ounty coastal
strip. All of the sales reflect tile transter or a tee simple interest and judged to retleCL cash
equivalent sale prices. All of tlhe sales are considered relatively current a„d it Was noted that the
market, vvl,;le artivC, ,J iclai;vr-ly stable. Relative to the subject property, the physical and legal
characteristics (zoning, FAR, site area, topography, shape, water frontage, improvements, etc... )
range from interior to superior. Overall tile comparable sales have relatively similar desirability
to potential buyers.
Cumpatabir Sale One is located o„ thr, CCii,ci of NCWpoit BOUlevard and 32"" Street extending
along 32" d Street to Marcus Avenue and is bisected by an alley that is owned by the laity (buyer).
At tile time of sale it was improved with a �,5U 1 square toot steel frame and glass office/retail
building was built in 19/4 and was in good condition. The improve,ne«t3 WCiC ung;„ally a bank
b,aurl, and Lace iouvc icd in a Blockbuster Video store and appeared to have contributory value
at the time or sale. l he lot on the corner of Marcus provides 16-parking spaces for the building.
I lie property was marketed for sale and lease as an improved property. I lie buyer is the City of
Newport Beach who razed the improvements and convected both 1013 10 a ,,,U,,;C;pal pa,king lot
that provides approximately 32 spaces including two handicapped spaces. It should be noted that
tele Lity owns the alley (2u x +1 1u) that bisected these properties and strip of land (+16.58' x
+SS) along elle �2°d Street frontage of the Marcus Avenue property. Both of thc3c 3ii,p3 vvcic
;i,cuipmecacd ;,, to IIic dc�igi, of the ,ILLnicipal parking lot and increased the useable area. A
representative for the City reported that they had the property appraised and negotiated the sale
price and did not exercise their eminent domain powers and chat they based their acquisition on
the appraised value. Overall this conlpaiable ;s jUdgCd in be 3upCiivi iou,paiCd iv 111C subject.
Compaaable 5alu 'l4r,, ,s loratcd ,,, (_'a,,,,c,y Vdlagc ou thr Coiucci of 29`x' StXr-1 Und VIIIA Way.
Tile property was fenced and paved and used as a boat storage lot. I lie underlying zoning is mixed
use and the buyer processed the plans and specifications for the construction of two mixed use
units that include a combined 4.678 square tees of residential space and 1,989 squaie feet of
co,1„ 1,e,c;al space. The units are under construction and the suggested list prices have not been
reported. uverall this comparable is judged to be slightly superior.
l.:omharable Sale Three is comprised of two waterfront properties located on Lafayette Avenue
straddling 29`x' Sweet, and two inland properties located on the corner of 29”' Street and Villa Way.
one block west of tlhe wateitroat properties. I he wateitroat piopei7des have a conib;„ed 185.8
feet of bay frontage with a combined gross area of 15,892 s,-luare feet (street to Bullhead Line)
that includes a combined 4,98 1 square feet (2, Sq.H. K 2,148 Sq.H.) of private tidelands and
the use of 2, /J8 square feet (l, /56 Sq.l~ L. & 17UU2 Sq.r t.) of tidelands between the Bulkhead Line
I/
26-132
41, 5[i C'cl
1VCIVIJ01 t I3caa.l., l..al;ly. ilia Ma. ill 39, lUl / N L I LLK & ASSOCIA I'L' S
and the Yierhead Lille that are used for the sellers shipyard business. I lie parcels are separated
by 29"' Street and the seller has Lhe rights to elle north side of the public dock (SCLock Dock) at ihu
3ticcm r— d, and Nays ie„t to dicc City Of Newpoit Beach for the use of the south side of the dock.
The seller reported that the properties were sold based on land value. it was noted that due to a
confidentiality agreement the seller could not disclose the buyer's plan for Lhe property but it was
noted that preliminary plans for a nixed-L,sc de�el'vp,imia I,a%e been completed. The seller
reported theN leased -back the properties, rent free, for a period of 8 months while they attempted
to tinct a suitable relocation site and reported the leaseback is valued at $1 SU,000. I he larger
waterfront property is improved Willi a 5,640 square toot building and d,C 3,i,alle, parcel is a
boa[yaid. I Lc tvm ,,,land pail 13 a,rlocated on opposite cornet's at 501 29”' Street (5,599 SLI.Pt.
site with 4,166 SLI.Ft. building) and 5U4 !Y"' Street (4,50 SLI.t't. site & 1,685 SLI.I'L. building).
I he seller reported that they valued each legal lot on the waterfront. al $2.000,000 ap;ece, of ., total
of $ l U,000,UUU. which equates Lo $629.24 per square foot of land a„ d $53,821 per font foot. The
seller's allocation suggests that the inland parcels have a combined value of $ I mm000, or
$158. /3 per Square toot ($ 1 ,ommu -:- i u,U$u SLI.I-t.). 1 Ile buyer has completed Lhe preliminary
plans for the development of 1 U -mixed use buildings (combined 10 residential units and 9,060
Sq.PL. of commercial space) and a IU -slip marina, and is back on 111C n,a,krt at an .,Sking price of
$15,2957000 ($589.58/SLI.Ft.). Due to the bay frontage and associated marina this comparable is
judged to be superior compared to the subject.
Uomharable Sale Pour is located on the corner of 3,d SLreeL and Ulive Avenue in the City of
liUI1L111gLOn Beach. It is improved with one small SULICtuiC [flat will be iac.Cd fm* ,cdevelopment
of the site. rile underlying zoning and general plan designation are Downtown Specific flail with
a visitor serving l.ornmerclal Overlay. Ilse zoning permits mixed use development with a
commercial component on ground tloor and residential units at a density of up to 50 -dwelling units
per acre oi, tl,e uppC, t]OOiS. 'I ILC CD„nn'cecial component must be completed prior to residential
occupancy. The height limit for lots over 8,uuu sLluare feet is 45 -feet and tour stories. Overall
this comparable is judged to be superior Lo Lhe subject, due to Lhe permILLed height and density of
development.
C'ompa,able SMC hive 3 lormcd Cn thir wCSL side of 28`x' Stieet, \ro1[l, fid„ [abC vi, boil, NCwpvi[
Boulevard and Balboa Boulevard, which are both one-way in this location. The intersection of
28"' and Balboa is signalized. Ilse site is improved with an approximately 1,/5U sLluare toot
McUonald's restaurallL Lhal includes a drive-Lhru LhaL was vacant. at. Lhe Lime of sale l Ile seller
(Mcllonaffs) included a covenant that the site ca,n,ot be -Used as a iestauram, of Co.- food seiv;ce
purposes (which includes and type of food or drink), drive-in, drive-thru or wall: -up
eating7drlmKing facility (including without limitation a Kiosk, stand, booth, or area located inside
26-133
4 /:; s1111 5truct
INUIVP01 It 13MICh, calittl, 11ia marCI, Su, LU 17 INET ZER & ASSOCIA I ES
another business facility) for a period Ot 20 years trout the date of this deed; provided however Llle
use of the Premises for Lite operation of a 7 -Eleven retail convenience stoic w,ll not be a violation
of this restriction". hr- underlying zoning and land use designation are visitor Serving
L omnlercial and the buyer intends to redevelop the site; however, the specific plans are not
available. l his comparable is judged to be inferior compared to the subjecL due to the use
restriction. It should be ]toted that I did „ot co,if,,,,, this Sale with disc buyci vi the Seller and have
relied on the public record and recorded information.
Lomhara6le Sale Six is located on the 2`"' Street in tannery Village. It includes an irregularly
Shaped, /,6N6 square toot parcel that is improved with an approximately 9-962 square toot bbildi„g
Lliat 13 uacd cap ., 3ad loft (Ulln,a„ Smk) Gaud ca 2,950 SyucXiC foot parcel that is unimproved and used
for boat/dry storage that is located across the street. 1 Ile underlying zoning is Mixed-use cannery
Village715t�' Street (MU -L V71511' St.) and the Land Use designation is Mixed Use Horizontal (MU -
I -14). 1 lie buyer is processing the entitlements ((-'U P- CDP. Tentative I racL Map & Mi„oi Sim
DCvClopinccia IZCv,cw) to iedcvclop the larger parcel with a mixed-use project that is proposed to
include i. 1 / I SLJuare feet Of commercial space and four residential units that range in size troll?
2,347 SLILIare feet Lo 2,515 square feet. No plans for the smaller lot were disclosed. Overall this
comparable IS Judged to be superior to the subiCCL du'c tv 111C ic3,d'c„L,�tl cvu,hvuc„t.
(_ ninpa, able Sale Seven ,J located on Coast Highvvay in Mariner's Mile. The site has a
rectangular shape with a level topography. 1lie underlying zoning is Mixed-use mariner's Mile
(MU -MM) and the Land Use designation is Mixed Use riorizontal (MU -1 -ii). l he site is improved
with an approximately 16,600 square toot, Lwo-story, office building. I lie building is vacant, in a
3Le11 CtInditiOn u„ d was 1„ fa,i COL,dition. It was reported that the buyer has replaced the windows
and it is being marketed for lease as "creative” space. I he rental rate is negotiable. "l Ile buyer
owns several adjoining properties (south and across Coast Highway) that are proposed for
redevelopment. l lie buyer would not disclose the Isla„s for die site, but the *.,nl ovc,,,eits ate
.judged to be an interim use of the site. It should be noted that a prior owner, submitted plans to
the l ity and the L oastal uornmission in 2OU / to redevelop the site and received Laity approvals
and the COZISLal uommission staff recommended approving the proposed redevelopment
alil)l,Cat,e,,. Ov'ciall this COnipczicciblC 131udgcd to be slightly infei3Oi CO,,,pcctXd 10 111c 3ubicCt.
Comparable Sale Eight is located on the corner of E. Balboa Boulevard and Adams Street in
Balboa village. 1 lie site leas a slightly irregular shape with I3epthof approximately 65 -feet along
Adams SareeL (west) and 39 -feet, along the alley on the east. I lie underlying zoning and Land Use
Desig,,atio„ aie M;xed-L.J,c Veit�cal (MU -V) u„d *It is in L1,e Bcdbn�, V;llagc Poiki„g M.,,,agc,,,e„t
Overlay District. The seller reported that the sale was based on the underlying land value;
however, he was not aware of the buyers specific plans or timeline for the redevelopment of the
19
26-134
T/5 sz°`I Sty eet
Newport Heach, Laliim uia March 3U, 2017 NETZER & ASSOCIATES
site. Uverall this comparable is judged to be slightly superior compared in ilie sL,bjUCt duC 10 the
X31 Cd u�C pCfmillcd iii Cvit�uu�ti�ii wiih CO1►1111eiCial use In the llllxed-L1Se zone.
Comments & COUCILISiOH
The sale data presented reflect the most pertinent data uncovered within the subject market area.
I lie following is a summary of the items of comparison that have been considered in estimating
the price per Square foot and the market value for the subject property.
Market Conditions: when warranted_ this is often referred to as a "time"
ad USLnient. Sales Pour through Light closed with a year of the chic of ,,aloe and
the market conditions have bei , xlzaivrly 3iablC vvCr the hast year .Nhile Sales
U„C. 1 vvo mid Three may, warrant and adjustment for the change In market
coudltloas.
rtiysicai Cnaracteristics: In general, the comparable properties have similar
location, zoning, topography, shape and redevelopment potential. Some of the sales
underlying zoning is mixed-use, which has both commercial and residential
components that are generally superior as the price per square toot to. F..i3l,ed
residential units is greater than commercial space.
The comparable sale data presented retlect price per square foot of land area indications ranging
from $1 l 1.1 � per square toot to $406. /4 per square foot_ with a sale that has bay frontage (Sale'))
at $44 /. 15 per square foot. l lie sale at the low end of the raiigC (Sale 5) ham a jz�tcicti ve covenant
that pcnhibit3 the xdevclup,,,r,,l of the site with any future restaurant or food use, which appears
to have a material impact on the redevelopment potential oil' the site and the sale price. l lie
following table is a summary of the comparable land sale data_ arrayed in ascending order based
on the price per square foot.
D..Ia
Nn.
5,..1E
D:,te
rl ire
Si5 .rt.
5;te
Arca
Cric_1t 011
Im iUvE0
Gvniu
I'[ opoNed Overall
u,e U1111112,11 151111
5
6/2016
$111.13
17,772
Similar
Yes
CU
Redevelop Inferior
7
1/2017
$192.77
*41,500
Similar
YC3
IvIU-Ivuvl
vccdu�clvp 51.hir,riar
4
3/2016
$55.j-1
%v,65j-
1111!:[i0j
YC3
U51'
MiKC0-U3C 51.IlifCriiii
1
„1U1
$L2SJ./4
15,J12
5i1in1.0
No
Pru-cv
Mirca-UJe SI. JuJCiwi
8
212011
S289.5)/
x,198
Silhlllar
Yes
MU -v
Redevelop SI. Su )erior
6
11 x`2016
$89.77
10,56
Similar
Yes
MU -CV
Mixed -Use Superior
1
10/2014
$406.74
15,612
Similar
Yes
CC/R-2
Municipal Superior
Parking Lot
3
4/2015
$447.15
25,942
Superio,
Waterfront
Y C3
IVIU-CV
MU -W2
M;xcd U3z SaNCrior
& Marina
Sub.
3/21/17
DOV
N.A.
11,612
Good
Assumed
Vacant
CU -LV
N.A.
As previously noted, the subject Zoning/Land Use Designation is Conunercial Visitor -Serving
vvahia Lido V;llagc mid it 1J a aprrifir a33LIH,ption that the deJelopment entitlements are available
for redevelopment to the site's Highest and gest Use. e omparame Sale rive has a similar visitor -
Serving Commercial classification/designation; however, the Seller placed a restrictive covenant
2U
26-135
-IlJ 3L"`� SL12CI
IQnN pal t l3'cacn, l .Lionria. M41 En SU, LUI i NL ILL 14. & ASSUCIA IES
on the property that excludes the future use of the site for restaurants Or food uses, which negatively
impacts the redevelopmem Ot the site as most commeecial develop111C1113 ;11 the area include some
type of restaurant oe food a Ci. With the exception Of Sale Five, the land sale data uncovered, does
not have the exact zoning Or land use designation; however, they are all acquired for re-
development to either commercial or mixed-use (commercial K residential) pueposcs. rill IC 111;xCd-
use zonii,g generally allows ground tlooe cOimiXXicxI apaCC ,ah iCsidr-atlal Uses above, which is
Superior compared to the sub]ect'S Visitor -Serving Commercial zoning as residential units
I)el'lllltted in the mixed-use zoite command a higher price per SLIuare toot compared to similarly
located any sized commercial space.
Most Of the properties include improvements that will (of havC bccccii) ,cZc.Cd for the rtdevelohnlent
Of dic site Or being uSCd V11 all interim basis until the plans for redevelopment are approved.
Comparable Sale One was improved with a steel and glass building that Was In good condition at
the time of sale and appeal' to have contributed to the value; however, it was acquieed by the C',Iy
to provide parking in a densely populated aiea that 11a3 1111111Cd paeknit;.
Iii Ilii, f111a1 a11aIy3;3 111031 c,11p11a3z 3 placed on Comparable Sale Two, four, Six. Seven and Eight
due to then' overall physical and locational characteristics. l hese sales retlect a price per Square
foot range from $192. / / to 599. / / With foul' Of the five in the range of $192.77 to $288.57 pce
3LIuaeC flo171. Rccigillc.ulg 111x1111C ulldc, lying zoning does not permit a residential component with
a commercial components (mixed-use) the value Of the subject WOtlld be toward the lOWel' end Of
this ($ 192. / / to $299.5 /) range. Un the basis of the market data presented above, I have concluded
that 111C subject has a Market Value, 1,ee Simple lutCec3I, tl1C Hypot11Ct1C.11 Co11dit1011s
dial the „tc ;s vacant a,1d available for redevelopment and the development tntitlernents are
available, as ofmarch 21, 2U I /, of $2uumu per SLluare toot. l he total Market Value of the subject
site, then, is calculated as follows:
11.612 Sq.H. x $200.00/Sq.rt. $2;3)22,400
111diCatcd value via the SALES COMPARISON APPROACH: $2,325,000
I have concluded that the subject has a Market Value, Fee Simple Interest, assuming the
Hypothetical t onditions that subject is vacant and available for redevelopment and the
development entitlements are available, as of March 21, 2U 1 /, of. $2,25,000.
Uround Kent Analvsis
Niece tree many ways to establ;sh the Market lent toe the land (Ui OUld Kent). The most common
methodology is to apply a rate of return to the underlying land value; h0\,\ -ever, many, user's
(Lessees) do not look at this methodology rather they project their gross sales volume, deduct the
required operating and business expenses with in allowance for profit and the remaindee ;t what
2l
26-136
Zi-/5 3l"d St, Uet
NevvpUi t HeaM7 CalitUi nia Mal ch A 2017 N L I L,LR & ASSUCIA 1 LJ
can be paid In ground rent. In the case of the subject, with no specific tenant in mind, the tll'st
mmliodology 13 most applicable. l lie table oil the tollowing page is a SU1111LIU y' Of gi0u113 lea3c
transactions, where the suggested rate of return on land value was available.
GKOUNU LEASE TRANSACT IONS
Ua[a Nu.
site
Caut7 value
Annual (;i. hint
Rate
1 ciaut
L'ca3c
Area
1 vial
1 Uta1
UI
LOubtiUrl
Date
tS .rt.)
$/S .rt.
$/S .rt. site
HUM 111
1r
Indy Mac I3anK
2006
20,000
$1,800,000
$180,000
10.0%
NLC Jetteiy W1. & AlMh
$`J0.00
$9.00
li viliC
2
tia11K Uf Au i'ci ica
2005
4.000
$2. 100,00
$21 U_UUU
1 U.Uo/
63 8 Iivi11C bivq.
$46.6/
$4.6/
IiviliC
UhMii bmiK
26U5
JU,OVU
$2,18/ -ODD
$218_/06
IU.Uo/
5540 Irvine Center Ui ivc
$ 12.90
/!`l
li Vinc
4
I'aiui'ci buy.,
05766
34,006
$800.006
$/2,000
`/.U%
SWI. Katdl, Ave. & B.tt.,vi.,
52.3.5 i
$2.12
5t.
O;'A ll. c
5/
I c3CU
10/05
52, I ii-
$3, I JU_U6U
$5 I J_vUv
16.6%
5wC w1O111t„ii rk.vy. & Ic6d e
$w.J6
56.04
KVUU:
L.,g.,,,a H;113
61
Ucl 1.x0
8/2U 14
20.025
$ I,50u_000
$ I US,6U0
/.2"'o
21401 b romkilui3t StX7-t
+cv11,111011
$/4.96
$5.39
Huntington Beach
Parkim lot
013011 Kcal t3t.ac (Lotcl)
9%2014
1 /U_244
NUt
$250,1106
Not
3200 N:,, pm. -t B0,a1C: aidA1i,C„dcd
to
AN1,G: able
$1.46
Avrkcable
Newport Beach
171,054
+Percentage Rent
8%
CI,a3c Ba„k
2014
+27,200
$J?50,000
$,25,000
10.0%
NEC Westcliff Dr. & Irvine
Portion of
-$120.00
-F$12.00
Ave.
Larger
New ort Beach
Center
Office Building
3/2016 26,470
$12,000,000 $700,000
5.U%
onfidential in Newport Center
T common
$453.34 $26.44
j Newport Beach
Parkin- lots
26-137
3 /� JL0il St. Uet
INe,vl,i,rt Isehel,, C-'alilu, ui& Ma, el, SU, LU1 / IVB rLLK & ASS00A rES
Analysis of Ground Lease Data
I lie tlrst three ground lease transactions involve Irvine Company property. All are within new retail
centers in the city of Irvine. All leases are structured o„ the basis of a 10.0 -percent return to the
valt,e of the land. Land value toe these leases ranges widely from $46.67 to $,)u.uu per square foot
of net site area and this variation is primarily influenced by location and site area leased. I he highest
value (No. I ) is for a small 2U,000 square foot, Street front, pad within a „elgl,bnchood center
a„vl,oeed by Gelso„'s Ma,ket. This ;s a more upscale area than that of Data 1 wo. while tele site of
Data 1 wo has street frontage, the building is attached to another building within a large center
ancliored by Nonce Depot, a supermarket and a large variety of shop tenants. Data No. 3 is a pad
building within a smaller non-ancliored center at LLC r -of it of lev;,,e Ce„ter Drive and Sand Canyon
Ave,ht,e. This is vvithin the Irvine Spectrum Development and very near the recently completed
ttaiser Health center and Irvine medical Center.
Data live 4 was negotiated in mid -2006 and commenced in January 2008. The property is a
triangular shaped parcel of land at tlhe Southwest comer of Katclla a„d Batavia in Orange. The
property ow„Ce stand that tl,e ground lease was Structured on the basis of a vin -percent return to land
value estimated at $800,000. 1 he lease is for a terns of 2U years witli two five year options to extend.
Kent will be $6,000 per month for the first five lease years and increase to $6,720 per mond, foe tie
second five years, $/,256 for the third five years, $8,43Y0 foe Elie „C;..E f V1•, $9.441 for the first tine
OpE;o„ ycal'3 a,,d $10;574 foe tl,e last tine years. This eluates to a 12° increase every rive dears.
The property had attracted offers to purchase up to $5U.UU per Square root but the owner wished to
lease not sell the site.
Data hive is a ground lease to Iesco for a hresh & Easy atoic ;,, LUgu„., Hilk. Tlic lease is for a
tee,,, of 20 ycaes vvith options to extend. Ground rent was based upon a 1 u.u-percent return to land
value of $-,15u,uuu ($60.36) per square foot). 11 -lis is a street front pad within an older neighborhood
center with a Big Lots store as anchor.
Data Six is a Del 1 aco drive-thru restaurant that is paet of a larger ce„ree ;,, I-IL,,,t;,,l Eri„ BiraeL. l'l,c
center is anchored by Trader .loe's. Del Taco occupied the site for 40 -years and their lease expired
and they negotiated witlh the landlord for a I U -year renewal with a five year option to renew. 1 lie
rental rate is $1 U8,000 per year and Del 1 aco was required to spend a minimum ol-$400,000 LO "E -e -
bland” the 2,808 square foot b,.,,ld,,,g, bus EI,Cy SpC„t appeOA;,,,atr-ly $500,000.
Data Sege„ is a 3,.,,,,,,,a,y of the ground lease for the hotel that Occupies the majority of the subject
site. The lease has a reduced rent during the construction period and Hien the minimum tease Kent
(sliown in table) and Percentage Kent (S.U”/o of room revenue, 2.U”/o ofnon-room revenue) are phased
in over time. I lie lease leas a 55 -year tenet with a'30 -year opt;o„ to ee„e W. Il,e Base Rent is adjusted
23
26-138
a7:� JL" `, Jt, eet
INew1,u, t Mad,. California evict, cn SU, 2017 NETZER & ASSOCIATES
every tive years by Lhe cumulative change in the UPI, commencing in the 8"' yea;. I his data ;ten, ,s
p;caculCd fo; u,tv;u,a1,Mua1 pu;pv3c3 vuly duc LC its location relative to the subject.
Data Eight ,� a C ha3c Bct„ k g,Vu„d ICaJC ,,, a la,ge, center that is owned by The Irvine (,ompany.
The transaction is summarized in the table as more specific details of the transaction were noL
clisclosed.
Uata Nine reflects a 2U16 transaction for die site under an existing oftice buildi„g loeatCd i„
Newpoci Ce„te;. The site is a26.470 squa,c fuel pairccl, plus a pro -rata share of the common areas
and parking lots. The Lessor sold the building (±15,uuu SLI.H.) for $S,SUU,uuu and retained the
land. I he parties agreed that the land value was $12-UUU_UUU and the Lessee pays $700;000 yr—„
In ground rent. I Ile ground rent continues until the Lr33n; passes away (lie is 75 and in tailing
health) al,d tl e land transfers to his Wife, at which time the Lessee has the option to purchase the
land at $12,uuu,uuu. 1 he buyer intends to occupy the improvements.
Un the basis of the comparable ground lease data presented, l have concluded LhaL a 7.0-peice„t
rate of return should be applied Lo Lie underlying land value, as a ;eflrctioi, of the fair market
g;TIu„d 17C111 fo; 111c 3UI ]M piope;ty. The total ground rent, then, is calculated as follows:
Indicated value via the SALES COMrAKISUN AI'1'1KUA(. Fl: $2,�25,uuu
x Kate of Return (-onclusion: x 0.07
1„d,Catcd 1'a,; Ma;KCt GfnL,,,d Rent:
$loz. /5U
On the basis of the market data presented above, 1 have concluded that the subject site lias an
annual rair lvlarKet Uround Kent, vee Simple Interest, assuming the Hypothetical Uondilions Lha[
subject is vacant and available for redevelopniem and Lhe developmenL entitlements are available,
as of March 2 1. 2017, ot: $1627750.
4
26-139
47532 Street
Newport Beach, California March 30, 2017 NETZER & ASSOCIATES
VALUATION
Based upon the Work undertaken, and my experience as a real estate analyst and appraiser, 1 have
formed the opinion, as of the JV" day or Marcel 2U l /, subject to the Assumptions and Limiting
uonditions contained in this report, that the subject has the tollowing market values:
Market Value -lee Simple Interest - as of March 21 X01 / — Assuming the Hypothet�ral
Condition that the Subject is Vacant and available to be redeveloped to its I-lighest and Brst L.13C
and that the Development Entitlements are a�.,dable
"['WO MILLION THREE HUNDRED TWENTY-FIVE THOUSAND DOLLARS
$27325,000.00
Annual lair Market Ground Kent - Pee Simple haerr_3t - a3 of Mucch 21. 2017 - Assuming the
Flppvtl,clical UvM ditiri„ that LI,C S«bja t is Vacant and available to be redeveloped to its iiighest
and Best Use and that the Development Entitlements are available
ONE tiUNuRED SIXTY-TWO IHOUSAINV SLS VLIN HUINVKLD FIt I Y DULLAKS
$lbl, /5U.UU7Annum
L5
26-140
Zi /J 3.c." S[. cel
INC V.ljul L Reach, C!Ililvl it in IVlarch 3U,,LUl7 NL', I L LK & ASSUCIA I LS
ADDENDA
26
26-141
475 32n1 Street
Newport Beach, California March 30, 2017 NETZEK & ASSOCIATES
Subiect P!
2'/
26-142
A view of 32"d street looking wcst. 1 he subject is on the right.
A view of 32"d Street looking east. The subject is on the lett.
26-143
A view of Via Oporto looking south. The subject .s o�� the iight.
A view of Via Opurtv poking north. The subject is un the left.
26-144
1
A front view of the subject.
A rear view of the subject.
26-145
47532 Street
Newport Beach, California March 30, 201 i Nr. I /.LK N ASSvCIATr S
29
26-146
Uumparable Sale One — 32U1 Newport Boulevar3 & 32U4 Marcus, Newport Beach
Comparable Sale Two — 421 29"' Street, Newport Beach
26-147
Camp able Sale Three — 2820 & 29u0 Lafayette, qu i & :5U3 29n Strict, Newpurt Beach
Comparable Sale Four — 3U2-314 Yu Street, Huntington Beach
26-148
Comparable Sale Five — 2811 Newport Bouluvard, Ncwport Beach
ba
11
uomparame Salt pix— 41U 29'h Street, Newport Beach
26-149
Lomparable Sale Seven — 22-44 w. Loast Highway, Newport mach
Yr1V l V 1VV 1 AVAILABLE
uomparame Sale tigtit — JUu h. tsumoa Boulevard, Newport t3eacn
26-150
4/2) SL"a miuci
Ncrvpm t iseacn, Caliiv, ,in Mal Cn 3U, LU1 / NL I LLK & ASSOC:IA 1 LS
Qualifications
-)9
26-151
QUALIF1UATI 0NS
of
James B. Netzer, MAI
Prior to forming Netzer & Associates, he was associated for over three years with Urban Pacific
Services Corp. Actively engaged as a real estate analyst, appraiser and consultant since 118/.
Principal of the appraisal and consulting tirm of Netzer N Associates with offices at:
l /0 E. Seventeenth Sweet. Suite 206
Costa Mesa_ C;alitofma 92627
Educational Activities
13actielor of Arts in Liberal Studies with a Concentration in Lconomics, California State University,
Long beach, 1996.
96.
Has successfully completed the following courses sponsored by the Anter;cap, I11314L11C of Rval Entcatc
Appraisers and the Appraisal Institute:
A.LR.E.A Course lA-1 : Principles of Real Estate Appraisal
A.I.R.E.A Course l A-2: Basic Valuation Procedures
A.1.K.L'.A Course I b -A: Capitalization 1 heory and 1 echniyues, Part A
A.1.K.E.A Course I b -b: Capitalization 1 heory and 1 echniLlues, Part B
A.1.K.E.A Course SPP: Standards of Professional Practice
A.I. Course 2-1: Case Studies in Keal Estate Valuation
A.I. Course 340: Keport Writing and Valuation Analysis
A.I. Course 530: Advanced Appl;cat;o.,.,
Ham 3uCCC3Sfully Mlliplr-Md 11L«H,CroLLS classes and seminars to meet the continuing education
ref-luirements oI� Appraisal Institute, Office of Real Estate Appraisers and Department of Real Estate.
Professional Affiliations & State Licenses
Member of the Appraisal Institute - MAI Uesignation
State of California - (emitted General Keal Estate Appraiser - Certificate No. A0003 143
State of California - heal Estate Broker License - License No. U 1185692
Court Qualification
Qualified as an expert witness in the Superior Courts of Orange, Los Angeles and San Diego
l.otlntleS, U.S. bankruptcy Court — Los Angeles Uivision.
I eaching Experience
Urange Coast College - Adjunct Protessor (retired) - Business 140 "Heal Estate Appraisal Principles"
26-152
Seminar K ranel Presentations
Los Angeles county liar Association - Keal Property Uivision: ui erhollZer 01'erhauled, An Upcicue
Mn Uamcrges, Appraisals and lmerim Loss under /We Insurance Policies, September 2U 131
Scope of Experience
Duiiiig tl,c pCiivd ill vvl,ich Mi. Nmzcc has beci, Ciigagcd as a Teal estate appraiser and analyst, lie has
been involved in most aspects of the field having completed assignments for multiple purposes,
including: estate planning; bankruptcy; conflict-of-interest analysis (Political lceforni Act of 19 /4);
construction defects litigation; soil subsidence; dissolution of marriage; ground lease re -valuation;
leasehold & sub -leasehold valuation; property tax appeals; lease and ground lease arbiuration;
easement/access;encroaclinient/title disputes (based on MerhohZer v. ,'Vorihern C:oumics Jh1e)* soils
contamination litigation; mortgage lending; construction financing; porttolio valuation:. market and
feasibility analysis; fractional interest valuation; and, due diligence.
lie has eApciicncr appiaising the tollovv;iig piopcity ty'p'e:
vacant Lancs
Residential lots, sub -division sites, condominium sites, commercial and industrial sites, mountainous
acreage, raw acreage, mitigation land (uettii Sands h lower Loving 1,1y. Stephens Kangaroo Kat &
upen Space).
Residential
Si«gle-fa,ll;ly iC3idcii�CS, COiidOiiiiiliUM3 tnvvidmi,irs, plaiii,rd tuiit developments, niultl-family
u1111S, apaiwiriit bliildiiigS; iiiobilc Home parks, proposed and existing sub -divisions.
Uommercial
of ice buildings, medical office buildings, restaurant buildings, retail centers, neighborhood shopping
centers, community centers, commerce centers, congregate care facilities, parking SMICLU•es, golf
courses, mixed-use developments, auto dealerships. gas stations.
Industrial
NZaiiutactuiiiig a,,d waiCliOuS'c build<«gs_ distribution facilities, multi-tcuaiit buildillP, mini-Stoiagc
farilitics.
Special Use
Commercial and residential tidelands, boat harbors, auto ferry, bait barge, marina, gas docks, mooring
fields, commercial piers, civic center, fire stations, police stations, emergency communication
tacilities, temporary construction easements, steel fabricating plant, car wash facilities.
Public Service
Nevvport ALluatic Center, Newport Beach - Board of Directors - Chairman; Facilities Committee
26-153
PARTIAL LIST OF CLIENTS
ATTORNEYS. LAW FIRMS & ACCUUN ►AN I
Darton Klugman & Oeuilig
& WatKiub
Moss Law Firm APLC
Maim;w, & K.ub, t1liva, Ka11urec, I rester
li,owue & W00ab LLI'
MCUCC,u,utt_ Will K' t11101'N.
tiiycui lave LLI'
Law UTt,Ccb of EriK IJ. MiCliel:Xii
dura & Naylur
Millar, Hod -c3 c& mm*13
Uavib Law AV
1'alnucri, I )'ler, w1ccl.e,. Willichii K Wa111i011
U413011, ULII.11 & CRAClwr
ICicl.a.d 51aaffc, tl.Oiut ANN'vuit'ca KCCeive.)
GuM.,tciu & Waid
Itubi„ &taxa„
G,ci11c3_ M..rti... 5tCi„ & R;cldand LLC
5.....uck, Grm, & Stccl_ LLI'
H..rbi„ a ivicCa.i'roa
Seversoa & Weisoii
1 -1 -act, Ki16 & Coldren
Shulman Bunn LLP
Jeffer, Mangels, Butler & Marmaro LLP
Songstad, Randall, Coffee & Humphrey
Landels, Ripley & Diamond
Stradling, Yocca, Carlson & Rauth
Larsen & Associates
Turner & Reynolds
L itham & WaLKillb
KiCliaia Wilaina ii, Auiiliey at Law
Leech & AbbUClaleb
WOIt & Kiclrairab
Caw UttlUb of MIF-llael Lev7l,t
Wri-lit Ihu,a tiruwuiii K: Yubng
COCO & Loeb, LLC7
Wyr,ue, 5Ni21e1 & ItKil,
LtNUINI-j IN51 I I U I IVNS
[i.u.K M13we3t, N.A.
alt u.pital lhvCA-1iXcut AOv.3vl'3
lJ.u.K of Amcrica
Ha.wtl.0iuc 5aviu 3
IS r,,kcr3 Mutual tljcrk3l.irc Ivl0itgzcgC)
Hu,.ti,.I't0„ NZ160ual Is..,,k
California Federal Bank
Merrill Lynch Credit Corporation
Citicorp Real Estate, Inc.
Park View Mortgage
Credit Suisse
Strategic Mortgage Services
Comerica Bank
Tokai Bank
Escondido National Bank
Wells Fargo Bank
GOVEKNMEN I AC AGENCILS
City of CObia Meba Federal Deposit Insurance CorpoI.niolt (FDIC)
City, of lileuavia Orange COUI1ty - Dana I'Oint Hai60i
City of Hul,tillUtun IicaCli Kebullltlull 1 tubi Lvipuiati0l1 (IZ I C7)
Jt) 0t Luuo, ticaCli — I lacla11ab UIL) SeCuntieb & b.�Clrui e l uluuubb,0u (5Ll )
l,ity 0t NevvNOit Li'CaCI,
UtNEKAL l LIL'N 15
AMKt5CO Ma.l,alcu,cl,t_ L.C.
MwNO,t opO113 LOIIC:Ct;M. VOilur.latwu
Arr,Old Cvn3t. uCtiOii
Nvrtl, AmC.,Caf, I ,tk: lu3.1'.u.CC COu,1-1.,y\
I I.c Boy'3 I CPUbGc
O.C. I..tcrf,itl, SLclte.
Capital Guardian Trust
Old Republic Title
Chicago Title Company
Pulte Home Corporation
Continental Mobile Housing
S & A Properties
Decron Management
S & S Construction:'Shappell Industries
Environmental Nature Center
St. Clair Company LLC
Fidelity National Title
Santa Fe Pacific Pipeline I'artiim., [.I'.
Firbt Aiueiicmi I itlC ►IlbLllZIIICr
5mllple. Realty
Hauuilt0„ Crimpal.y
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