HomeMy WebLinkAboutSS3 - Banning RanchCITY OF NEWPORT BEACH
CITY COUNCIL STAFF REPORT
Agenda Item No.SS 3
January 27, 2009
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM:. City Manager's Office
Sharon Wood, Assistant City Manager
949 -644 -3222, swood @city.newport- beach.ca.us
SUBJECT: Appraisal Report for Banning Ranch
RECOMMENDATIONS:
1. Receive and file Consultive Pricing Study by Buss - Shelger Associates.
2. Provide direction to staff and consultants regarding additional actions.
DISCUSSION:
Background:
The General Plan establishes open space as the primary use for Banning Ranch, and
provides that if it is "...not acquired for open space within a time period and pursuant to
terms agreed to by the City and the property owner, the site may be developed as a
residential village.... with a majority of the property preserved as open space."
The City Council set the following as a priority for 2008: "Conduct an appraisal of the
Banning Ranch property and assess funding available for the purchase of the property
for open space." In February 2008, the Council appointed the Banning Ranch Appraisal
and Acquisition Ad Hoc Committee comprised of Mayor Selich and Council members
Gardner and Rosansky.
After research by staff on the qualifications and process for hiring an appraiser, the
Committee directed staff to retain Dave Myerson of Resource Opportunity Group, LLC
(ROG) as the City's open space acquisition consultant. Based on conversations with
appraisers with experience on properties like Banning Ranch, Myerson recommended
that the City not order a formal appraisal of the property at this time. State agencies
won't work on funding an acquisition until there is an agreement with property owners,
and the City needs an estimate of value to open discussions with the owners. In
addition, the State is required to perform its own appraisal for acquisitions of more than
Appraisal Report for Banning Ranch
January 27, 2009
Page 2
$25 million. The Committee directed staff to request proposals from appraisers to
conduct a pricing study to, establish a range of value for Banning Ranch. Four
proposals were evaluated, and the Committee selected Buss - Shelger Associates.
Appraisal Report:
Buss - Shelger's Consultive Pricing Study is attached, and Ronald Buss will be at the City
Council meeting to present his findings and respond to questions from Council
members. His pricing recommendations are in the range of $184,000,000 to
$211,000,000. With a 25% bulk price discount for acquiring all of the property at one
time, the range would be reduced to $138,000,000 to $158,000,000. These pricing
recommendations do not include the cost of clean -up and remediation from the oil
operations on the property.
Funding Availability:
Dave Myerson is starting to make inquiries about the availability of State and other
funds for acquisition of the property, and will provide the City Council with a brief oral
report. He has advised staff that, in December, the State froze all disbursements from
AB 55 loans and directed that all projects funded from this source be frozen. Following
that direction, the Coastal Conservancy suspended all work under agreement with them
that was funded with State bonds. Unfortunately, this is not a good time to be seeking
funding for acquisition of open space, but Myerson will be exploring whether longer term
prospects may be better.
Public Notice:
Staff provided notice of this study session to those who have subscribed to receive e-
select alert messages on Newport Banning Ranch Updates, and to the list of interested
parties and property neighbors maintained by the City.
Submitted by
A&J� _-)4�1
Sharon Wood
Assistant City Manager
Attachment: Consultive Pricing Study
Pq
CONSULTIVE PRICING STUDY
POTENTIAL ACQUISITION PARCELS
BANNING RANCH - 400t ACRES
NEWPORT BEACH ANNEXATION
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BUSS- SHELGER ASSOCIATES
Real Estate Consultants & Advisors
December 23, 2008
City of Newport Beach
3300 Newport Boulevard
Newport Beach, CA 92268 - 8915•
Attn: Ms. Sharon Wood
. Assistant City Manager
Re: Consultive Pricing Analysis
Potential Acquisition Components
Banning Ranch, Newport Beach
Our File No. 4262 -08
Ladies & Gentlemen:
865 S. Figueroa Street
Suite 9900
Los Angeles, California 90017
Telephone: (213) SM7272
Fax: (213) 38&5276
&Mail: bumhelger®pacbea.net
Resource Opportunity Group
811 6a' Street, Suite 301
Santa Monica, CA 90403
Mr. David Myerson
Proprietor
Buss - Shelger Associates has been requested to ascertain for the City the magnitude of capital funds
from various sources that will be required to purchase all or portions of the Banning Ranch,
depending on priorities. The current project proposes development on roughly one -half of the 402 -
acre Ranch; entitlements are being sought for 1,375 dwelling units, 75 hotel rooms, 75,000 square
feet of commercial space plus visitor oriented facilities.
In order to assist the City in their deliberations, relevant market information has been assembled
involving properties with features similar to the various Banning Ranch components. These price
benchmarks have been applied to the subject components on both a conservative and optimistic
basis. The market data program consists of the following broad categories.
• Larger coastal degraded wetlands purchases
• Sales of developable sites adjacent to wetlands
• Transfers of developable marine terrace
• Environmentally sensitive hillside acquisitions.
Extensive back up details on each data item has been retained in our files, to be included in a final
appraisal report if required. In the interest of providing concise results, the information will be
shown in summary form in our ensuing presentation with an analysis and pricing
recommendations. In the interest of efficiency, the conclusions may be found in the table on the
following page. Additionally, we have provided our judgment as to the "bulk price" in the event
the entire Banning Ranch is sought for acquisition rather than smaller increments.
7
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ID
Parcel
Proposed Land
No.
Price Recommendations
Index
Use Designation
Acres
Conservative
Optimistic
A
Lowland Open Space
134.1
$ 8,000,000
$ 8,700,000
B -1
Oil Recovery Site
11.7
1,300,000
1,500,000
B -2
Oil Recovery Site
4.8
900,000
1,000,000
B -3
Benchland Open Space
43.5
6,500,000
7,600,000
C -1
Benchland Development
85.4
111,000,000
128,100,000
C -2
Benchland Development
29.7
52,000,000
59,400,000
D
Hillside Open Space
93.1
4;200,000
4,700,000
TOTALS
......... ...............................
402.3
$184,000,000
$2.11,000,000
BULK PRICE (25% Discount) ... ...............................
$138,000,000
$158,000,000
Set forth on the following pages may be found concise general land use comments, market
information plus our recommendations pertaining to each land use category by parcel as shown
above.
Respectfully submitted,
BUSS - SHELGER ASSOCIATES
Ronald L. Buss
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PARCEL A — LOWLAND OPEN SPACE (WETLANDS)
Background
This designation is fairly self - explanatory as it encompasses all the lower, flat land
i
areas that are heavily impaired with wells. The only exemptions are the two oil recovery sites (B -1
and B -2) located on the periphery of these degraded lands. Approximately 79 acres of the 134
acres in this category can be classified as wetlands, 42 acres are identified as wet meadows, the
remaining 13 acres consist of trails, buffer zones and access corridors.
It should be noted that all of the wetlands purchases (except Sale Nos. 4 and 5) involve
degraded acreage impacted primarily with both defunct and currently active oil wells plus the
support pipelines, water injection wells and storage tanks. The market information does not show a
price differential between the more pristine sites and the impaired parcels.
I 13
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Market Information
A search was undertaken for larger acquisitions of degraded lands and environmental
sensitive wet meadows to ascertain prevailing price levels. The data program encompasses a five-
year period, transactions uncovered varied in location from Ormond Beach to the north, southerly
to the Del Mar estuary in San Diego County. The sales are listed chronologically below to
ascertain price trends over time, the general location of each item is indicated on the facing Sales
Map. Due to the size of the subject, a minimum size criterion of roughly 30 acres was adopted; the
purchases ranged up to 275± acres.
Sale No. General Acre
Date Location Area
1 Arnold Road @ Edison Drive 261.2
6/02 Ormond Beach, Oxnard
2
N/O PCH, W/O Brookhurst Ave.
4/03
Bolsa Chica, Huntington Beach
3
S/S Ballona Creek @ Culver Dr.
1/04
Playa Vista (Area B Wetlands)
4
W/S El Camino Real, S/O
6/04
de La Valle, Del Mar
5 W/O Edison Dr., S/O McWane
8/05 Ormond Beach, Oxnard
6
W/S Harbor Blvd., S/O
12/05
Gonzales, Oxnard
7
S/S 2nd St. @ Studebaker Rd.
6/06
Los Cerritos, Long Beach
8
N/S Batiquitos Lagoon
6/08
& Arenal Road, Carlsbad
9 E/S Long Beach Frwy.,
8/08 N/O Imperial, South Gate
46.2
236.9
73.4
276.0
28.3
41.4
(1)
18.11
(2)
7.81
(3)
Footnotes
1) Wetlands portion is $750,000 for 12.12 acres
2) Wetlands portion is $500,000 for 7.24 acres
3) Wetlands portion is $430,000 for 7.81 acres
Buyer Purchase Price
Site Condition Price /Acre
Coastal Conservancy
Degraded Wetlands
H.B. Wetlands Com.
Degraded Wetlands
State Lands Com.
Degraded Wetlands
San Dieguito Auth.
Mitigation Habitat
Nature Conservancy
Mitigation Habitat
City of Oxnard
Mitigation Habitat
Los Cerritos Auth.
Degraded Wetlands
Batiquitos Lagoon
Foundation/Wetlands
Watershed Conserv. Auth.
Reparian Welling
$9,700,000
$37,136
$1,650,000
$36,537
$14,500,000
$61,207
$4,253,000:
$57;934
$12,972,000
$47,101
$1,565,000
$55,398
$7,000,000
$61,882
$2,400,000
$67,567
$630,000
$55,058
2 1�
Bus,S- SHELLER ASSOCIATES
Price Trends
An interesting price pattern emerges from the data assembled with the broad variance of
$36,537 to $61,700 per acre attributable as much to location as the passage of time. Sale Nos. 1, 5
and 6 involve adjacent parcels at the more remote Ormond Beach, these items constitute the lower
to mid -point of the price spectrum at $37,136, $47,101 and $55,398 per acre respectively. It is
noted that Sale No. 1 is without direct access. Sale No. .2 ($36,537 /acre) does reflect a dated
acquisition as it occurred in early 2003, it also lacked direct access to Pacific Coast Highway, the
same as Sale No. 1. Conversely, Sale No. 5 fronted Harbor Boulevard and accounted for the
higher end of the Ormond Beach transactions. Sale No. 9 is situated further inland, but was
included as it involves wetland areas adjacent the Los Angeles River purchased for habitat
preservation, the lack of direct access accounted for the somewhat lower price of $55,000± per
acre.
Sale Nos. 3, 4, 7 and 8 all involve parcels with access, the price variance is fairly
narrow at $57,934 to $67,567 per acre. Clearly parcel size and date of purchase did not reveal any
price discrimination as the sites ranged broadly from 18.1 to 236.9 acres over a four -year period.
These latter indicators are very relevant to the Banning Ranch wetlands and wet meadows, the
following prices have been adopted. It should be noted that in none of the degraded wetlands
purchases was there an allowance for future remediation expenses.
Conservative Price
134.1 acres @ $60,000 /acre ................ ............................... $8,600,000
Optimistic Price
134.1 acres @ $65,000 /acre ................ ............................... $8,700,000
3 ��
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PARCEL(S) B — OIL RECOVERY SITES /BENCHLAND OPEN SPACE
Background
There are several parcels currently in use adjacent to the degraded wetlands that
effectively are tank farms and distribution points (B -1 and B -2). These involve buildable parcels,
but of odd configuration and not well located from a development perspective. These attributes
likewise apply to B -3, which includes the 3.7 acres proposed as a Vernal Pool Area. The upper
mesa land areas that are designated for parks, interpretation center and staging area involve lower
valued lands that have not been indicated as future residential parcels. The same type of market
information applies to this land use classification as well.
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Buss-SHF,LGER ASSOCLATFS
Market Information
Our investigation and search for this type of market acquisitions produced limited
results, which was not surprising as this is not a type of property actively sought and exchanged in
the marketplace. Three transactions were uncovered, fortunately they are all fairly current. Similar
to the previous section, the data is displayed chronologically in the ensuing table, the location of
each sale is indicated on the facing map. Comments for subject Parcels B -1 thru B -3 to follow.
Sale No.
General
Acre
Buyer
Purchase Price
Date
Location
Area
Site Condition
Price /Acre
1
S/S Loynes Dr. & Palo
11.3
Bixby Long Beach, LLC
$1,300,000
6/05
Verde Ave., Long Beach
Level, Street Grade
$115,386
2
S/S 2a" St. & Studebaker
41.4
Los Cerritos Authority
$7,000,000'
6/06
Los Cerritos, Long Beach
(1)
Land, Adj. Wetlands
$213,383
3
S/S Main St. & Nivera
12.5
R. Family Properties
$2,500,000
11/07
Avenue, Chula Vista
Level, Below Grade
$200,000
4
N/S Batiquitos Lagoon,
18.1
Batiquitos Lagoon
$2,400,000
8/08
W/O Arenal Road, Carlsbad
(2)
Former Nursery
$174,793
Footnotes
1) Developable 29.29 acres purchased for $6,250,000
2) Developable 10.87 acres purchased for $1,900,000
Price Trends
Parcel B -1
This oil recovery site is effective land - locked with access restricted to connecting gravel
roads through the degraded wetlands and meadows. Effectively a tank farm and distribution point,
this parcel is clearly at the lower end of the price potential scale, being most similar to Sale No. 1
which does have street access but is in a remote location and a poorly shaped triangular holding.
We have adopted prices of $115,000 and $125,000 per acre for this holding.
Conservative Price
11.7 acres @ $115,000 /acre :................. ............................... $1,300,000
Optimistic Price
11.7 acres @ $125,000 /acre ................ ............................... $1,500,000
5 �
Parcel B -2
BCISS-SHEI ;ER ASSO(:IATFS
Unlike parcel B -1, this smaller site fronts West Coast Highway and features favorable
access and a fairly rectangular shape. Sale Nos. 2 and 3 are similar in terms of prominent street
exposure and parcel configuration; their transfer prices are $197,130 and $200,000 per acre
respectively. We have adopted prices of $190,000 and $2101000 per acre.
Conservative Price
4.8 acres @ $190,000 /acre ................... ............................... $ 900,000
Optimistic Price
4.8 acres @ $210,000 /acre .................. ............................... $1,000,000
Parcel B -3
This broad category includes all the designated park areas, interpretive center, boarding
area and vernal pool. All these uses involve lower valued land; a portion is adjacent the lowland,
however the bulk is on the upper mesa. Individual parcel size and shape value widely, a somewhat
middle of the road price is suggested at $150,000 to $175,000 per acre; the latter benchmark
indicated by Sale No. 4, a former nursery on level to undulating terrain.
Conservative Price
43.5 acres @ $150,000 /acre ................ ............................... $6,500,000
Optimistic Price
43.5 acres @ $175,000 /acre ................ ............................... $7,600,000
6
PARCEL(S) C — BENCHLAND DEVELOPMENT LANDS
r.
Background
After all of Parcels A and B are caned out, as well as the hillside terrain (Parcel D) that
is both too costly to develop and environmentally sensitive, the remaining residential development
areas are effectively two upper mesa benchlands at the same general elevation relative to the
nearby improved areas of Costa Mesa.
Both Parcels C -i and C -2 have view features, particularly from the perimeter homesites.
It is pointed out that Parcel C -2 involves a much smaller holding which encompasses a promenade
and fairly broad ridge that has excellent vistas in a number of directions. Clearly this holding has a
much higher value per acre due to both reduced size and superior view characteristics.
7
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OCEANSIDE .
CALLS
CEHAyE
. I
StAND
Sales Map
a�
Bu s- SHELLER ASSOCIATES
Market Information
Since the final quantity o£ dwelling units to be approved for these two areas is not
known, they are effectively unentitled lands designated for.residential development. Accordingly,
we have gathered larger land acquisitions involving parcels generally similar in condition to Parcel
C. The purchases are summarized below. All have coastal orientation, ranging from Ventura on
the north to Bolsa Chica on the south. Respective locations of each item may be found on the
facing land Sales Map..
Sale No.
General
Date
Location
1
W/S Lincoln Blvd., N/O Ballona
10/02
Creek, Playa Vista (Area A)
2
NWC Lincoln & Jefferson
10/02
Blvds., Playa Vista (Area B)
3
NEC PCH & Beach Blvd.,
3/05
Huntington Beach
4
E/S Western Ave., S/O Palos
7/05
Verdes Drive, San Pedro
5
SE Warner & Los Palos Avenue
1/06
Bolsa Chica, Huntington Beach
6
N/S Ventura Freeway, W/O
Escrow
Sanjon Road, Ventura
Price Trends
Parcel C -1
Acre
Seller
Purchase Price
Area
Buyer
Price /Acre
78.3
Playa Capital Co.
$92;000,000
Wildlife Conservancy
$1,174,818.
43.0
Playa Capital Co.
$4700;000
Wildlife Conservancy
$1,002,007
22.6
Mills Land & Water
$38,000,000
JCC Homes
$1,679,855
61.2
United States Navy
$125,000,000
Bisno Development
$2,042,484
15.0
Ocean View School
$12,320,000
State of California
$821,333
10/8
Lloyd Family
$16,000,000
Confidential
$1,477,378
The prices shown vary widely depending on timing and circumstance. As a point of
reference, Sale No. 5 involves the purchase of 15 acres from the Ocean View School District for
$821,333 per acre, however the parcel is land - locked. Obviously it is less meaningful to the
subjecfs situation. Sale Nos. 1 and 2 were concurrent purchases at around the $1,100,000 per acre
8 a�
BUSS-SHEwER ASSOCIATES
mark, however the acquisition(s) must be considered in light of the older date of purchase and the
ownership agreeing to a 10% price reduction in order to discourage legal interference on
developing the balance of Playa Vista. Similarly, these benchmarks are considerably low.
Sale No. 4 at slightly over $2,000,000 per acre is judged as comparatively high as the
acquired land involved much more level terrain and is easier to improve. It should be noted that
the financial partner has recently assumed control of the asset. The most relevant benchmarks as
related to Parcel C-1 are Sale Nos. 3 and 6 at $1,679,855 and $1,477,578 per acre, respectively.
Sale No. 6 is also easier to develop as it is level and at street grade, however, these factors are
practically offset by its location in Ventura which is not Newport Beach. Nevertheless, we have
applied price indexes of $1,300,000 to $1,500,000 per acre respectively to Parcel C -1, in -part
recognizing the quantity of land involved, the magnitude of capital required and related
infrastructure expense.
Conservative Price
85.4 acres @ $1,300,000 /acre ......... ............................... $111,000,000
Optimistic Price
85.4 acres @ $1,500,000 /acre ......... ............................... $128,100,000
Parcel C -2
Clearly this is one of the finest, large parcels remaining on the South Coast with
spectacular panoramic views. The area is proposed to be developed with both housing and a
boutique hotel on a relatively small 29f acres, nevertheless infrastructure must be brought to the
parcel. Sale No. 4 is the prime indicator, the price of $2,042,484 per acre does involve a parcel
roughly twice the size of the subject, however all utilities were in -place and the site is level site and
thus easier to improve. The buyer also assumed entitlements would be readily obtainable. We
have adopted prices of $1,750,000 and $2,000,000 per acre for Parcel C -2.
9 as
BUSS -SHEWER AW)C1ATES
Conservative Price .
29.7 acres @ $1,750,000 /acre ........... ............................... $52,000,000
Optimistic Price
29.7 acres @ $2,000,000 /acre ........... ............................... $59,400,000
10 �1 b
R
13t �ti ��ir.l <,t.it NY-A x a rl i ,
PARCEL D — HILLSIDE OPEN SPACE
Background
These hillside lands constitute about one - quarter of the entire Banning Ranch holding
and effectively involve an elongated north -south parcel being the frontal downslope of the two
developable benchland mesas with one major east -west canyon separating Parcels C -1 and C -2. A
second canyon may be found on the north side of Parcel C -1. While portions of the surface
topography has been disturbed due to the oil operations that have been ongoing for decades, there
are sizeable areas in their natural state that exhibit environmentally sensitive habitat for a number
of species. While lacking any realistic development prospects, this roughly 100 acres would not be
Ia costly acquisition and would allow the City to create their own master trail system without
requesting owner permission. insurance indemnification. etc.
THiS PAGE
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W,
THIS PAGE
LEFT BLANK
INTENTIONALLY
t
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LEFT BLANK
INTENTIONALLY
BUSS- SHEu3ER ASSYX:IA7'ES
Development has occurred in the past on adjacent land with similarly challenging
topography as evidenced by the housing trace abutting the northeast boundary of Banning Ranch.
Currently the high cost of subdivision improvement makes this impractical at this juncture,
disregarding any allowance for environmental concerns.
Market Information
Recognizing the size of this holding (93.1 acres), the market data program focused on
coastal hillside purchases of roughly 40 acres or more, all with a similar environmental habitat
overlay. The sales collected are also listed chronologically below, the price benchmarks are
situated in either Los Angeles or Orange Counties as indicated on the facing map. A time frame
covering the past three years was considered meaningful to current price levels.
Sale No.
Date
General
Location
1 N/O Palos Verdes Drive S.,
12/05 W/O Narcissa, Rancho P.V.
Acre Seller Purchase Price
Area Buyer Price /Acre
462.9 P.V. Portuguese Bend $17,000,000
City, Rancho Palos Verdes $36,725
2
N/S Latigo Canyon Road @
125.0
Paul Rubens, et. al.
$6,250,000
11/06
Wilmot Way, Malibu
Cyan Properties
$50,000
3
E/S Laguna Canyon Rd., N/O
58.4
John Choa Trust
$1,500,000
11/07
Castle Rock, Laguna Beach
City Laguna Beach
$25,685
4
N /S/ Tuna Canyon Road, S/O
38.1
Walter Van Buskirk
$2,750,000
11/07
Saddle Peak, Malibu
Justin Chancellor
$72,210
5
N/S PCH, W/S Murphy
85.0
O'Haru Trust, LLC
$2,675,000
1/08
Way, Malibu
Malitos Partners
$31,456
6
N/S Cinnamon Lane,
191.2
York Long Point Assoc.
$8,360,000
Escrow
Rancho Palos Verdes
City Rancho Palos Verdes
$43,724
7
N/S Palos Verdes Drive S.,
94.0
York Long Point Assoc.
$4,250,000
Escrow
Rancho Palos Verdes
York Point View Prop.
$45,213
12 31
BCiss-SHEU;ER NW.-CIATFS
Price Trends
Fortunately there were sufficient quantity of coastal oriented hillside sale items which
allowed the data program to focus on recent transactions. If the extremes are eliminated :(Sale Nos.
3 and 4), the price range narrows to roughly $32,000 to $50,000 per acre. Sale No. 3 is effectively .
a secondary comparable as it is landlocked; Sale No. 4 is superior as it has spectacular views and
was purchased for two homesites.
Sale Nos. 2, 6 and 7 are considered the most meaningful as they involve similar size
holdings and are current. The prices are $50,000, $43,724 and $45,213 per acre respectively.
Related to the subject 93.1 acres, prices of $45,000 and $50,000 per acre have been utilized for the
subject hillside lands.
Conservative Price
93.1 acres @ $45;000 /acre .................. ............................... $4,200,000
Optimistic Price
93.1 acres @ $50,000 /acre .................. ............................... $4,700,000
13 2 `�
Buss-SHH,(GER Aw, )c ATEs
CORRELATION
The aggregate of the individual parcels comprising the 400f -acre subject holding varies
from $210 to $240 million; ,depending on market perspective. Clearly a discount for a bulk
purchase is appropriate due in part to the odd mixture of property uses involved coupled with the
total amount of capital required to purchase Banning Ranch in total. In the event the entirety is
acquired, a discount on the magnitude of 201/o to 30% is representative, 25% being typical under
normal circumstances. In light of the current poor condition of the capital/credit markets, 25%
may be judged as "light'; however it is reminded however that residential land market is fickle
with rapid changes occurring as demand rises.
It is reminded that a major expense must be incurred to clear the terrain of contaminated
soil, debris, defunct wells and pipelines, tanks, etc. The degraded wetlands price ($8.5t million if
paid) reflects the unsightly .circumstances normally found with wetland acquisitions. The bigger
issue is the cost of clean up for the balance of the Ranch which is a seller responsibility. A
holdback of funds (escrow account) is recommended to ensure that this occurs.
14 33
PROFESSIONAL QUALIFICATIONS
RONALD L. BUSS
EXPERIENCE:
Buss- Shelger Associates, Los Angeles, California (since 1984).
President. Provides consulting, investment, valuation, advisory,
brokerage and leasing services on all types of vacant and improved
properties.
Landauer Associates, Inc., Los Angeles, California (1975 - 1984).
Senior Vice President. Real estate consulting services.
Shattuck Company, Los Angeles, California (1971- 1975).
Real Estate Counselor and Consulting Appraiser.
State Board of Equalization, State of California (1963- 1970).
PROFESSIONAL
ACTIVITIES:
Member: Urban Land Institute, 1998 - To date
Member: Lambda Alpha International
Director, 1998 - To date
President - 2004
Member: Appraisal Institute, 1976 - To date
Souther California Chapter President, 1987
Member: Counselors of Real Estate, 1983 - 2004
Southern California Chapter President, 1988
National Vice President, 1996 -1997
Member: Assessment Practices Advisory Council,
Los Angeles County Assessor's Office, 1980 -1986
Member: Los Angeles Board of Realtors
Member: California Real Estate Association
Member: UCLA Center for Finance and Real Estate, 1993 - 1994
Member: National Association of Realtors
Member: American Industrial Real Estate Association
Advisor: Operating Engineers Pension Trust, 1983 -.To date
Advisor: Electrical Workers Pension Trust, 1994 - To date
Advisor: Independent Directors, Irvine Apartment Communities
Investment United States Securities & Exchange Commission
Advisor: Registered 2000 - 2004
CERTIFICATION:
Currently certified under The Appraisal Institute voluntary program of continuing
education for its designated members (MAls and RMs who meet the standards of
this program, are awarded periodic certification).
Certified as General Real Estate Appraiser in the State of California:
OREA Appraiser Certification No. AGO09146
Licensed State of California Real Estate Broker
EDUCATION: Bachelor of Science -Cali fornia Polytechnic College (1963)
Certificate in Real Estate -University of California Extension
l
ZSS #�s
e /'Y Vrt
EC, H ,e
Conference &
Visitors Bureau
City Council Study Session
January 27, 2009
Newport Beach Tourism Economic
Impact
Total direct visitor spending of $1.04 billion
(2007 Visitor Profile Study)
-� $404.7
million
or 39%
spent
by
hotel guests
-� $343.4
million
or 33%
spent
by
day visitors
4 $295.1
million
or 28%
spent
by
private residence guests
ew ort
E CHI
Conference &
Visitors Bureau
National Industry Outlook
PKF Revised Forecast to Reflect
Acceleration of the Economic Downturn
Forecast Change from 2008 to 2009
Measure
Forecast Change
Supply
+3.0%
Demand
-1.5%
Occupancy
-4.4%
ADR
+0.1%
RevPAR
-4.3%
Total Revenue
-4.6%
Net Operating Income
-7.9%
ew ort
E CHI
Conference &
Visitors Bureau
National Industry Outlook Cont.
PKF is forecasting the U.S. hotels will average a 58.3%
occupancy level in 2009, or 4.4% less than the 61% mark
forecasted for year end 2008.
The 58.3% occupancy rate being forecasted is the lowest
level of occupancy in the past 20 years
:D Forecasts for major cities:
4
New York
-6.9%
-+
Atlanta
-3.6%
Chicago
-6.8%
Dallas
-5.5%
Orlando
-3.0%
Washington DC
-4.2%
ort
Seattle
-2.7% VC
E HI
4
San Francisco
-3.2% Conference & C
_,
Visitors Bureau
Newport Beach Hotel Business Overview
VC ort
E H A
Conference d C
Visitors Bureau —
Current Conditions
First Quarter of 2009 expected to be down 7 -10%
Rate Wars have begun with a few exceptions
i
AIG Effect having some impact
All large hotels have begun reducing staff (managerial
and front line)
The TOT effect of Pelican Hill still to be determined
ew ort
E CHI
Conference d I
Visitors Bureau
NBCVB Organizational Overview
:z Founded in 1989
501c6 Nonprofit
Governed by seven person executive committee and
24 person board of directors
15 person staff with offices in Los Angeles and San.
Francisco. Contract sales office in London. 4
ew ort
E CHI
Conference it i
Visitors Bureau
Budget
:D Currently under a five year contract with the City of
Newport Beach expires June 30, 2009
2008 -2009 Budget is $3.15 million (Projected $2.7
lad
million from TOT). CVB receives 18% of the 10%
Transient Occupancy Tax
CVB is also a member based organization with
approximately 300 dues paying members (partners)
e�w ort
E CHI
Conference &
Visitors Bureau —
Mission Statement
As the City of Newport Beach's official destination
marketing organization, the mission of the Newport
Beach CVB is to partner with the tourism and hospitality
industry by protecting and nurturing the destination
brand and to deliver additional spending by leisure and
conference visitors leading to enhanced community
economic vitality and quality of life.
ew ort
E CHI
Conference &
Visitors Bureau
Newport Beach Brand
Newport Beach is an opulent Orange County coastal
fantasyland that represents a "taste of the perfect life," a
place where visitors can experience a friendly
sophisticated, aspirational lifestyle that permits them to ,
escape from daily reality. Comprised of a collection of
unique islands and neighborhoods that form their own
distinct character, the destination offers a combination
of affluence, quaintness, casual glamour and attention
o detail. Coupled with the manmade and natural beauty'
I the destination, this is the place that allows the visitor
o relax and recreate and dream of what can be.
ew ort
E CHI
Conference er
Visitors Bureau
2006 -2008 Achievement Highlights
:z Became the first and only West Coast CVB to receive
international accreditation. One of only 68 CVBs (out of 1400
nationally) in the world to receive this designation
:z Reorganized organization and created the city's first ever
Marketing Department
Reorganized sales staff and increased personnel by two.
Opened offices in San Francisco and Los Angeles
:D Created a partnership approach to direct sales with hotels
joining the CVB in sales missions
Developed a first ever Newport Beach
Tourism Strategic Plan
ew ,port
E CHI
Conference er
Visitors Bureau
2006 -2008 Achievement Highlights
Developed strategic marketing partnerships with the
Newport Beach Film Festival, Restaurant Assn.,
Toshiba Golf Classic, Chamber of Commerce,
Irrelevant Week
Opened new London marketing office
�z Expanded destination PR efforts, including NYC
:z Developed extensive online marketing program to
increase web traffic
ew ort
E CH o
0.
Conference e5-
Visitors Bureau
Functional Overview
Three Departments
-� Marketing: Research, Advertising, Media Relations,
Publications, Electronic Marketing, International
Marketing, Partnership Development, Brand
Development
-� Conference Sales: Direct Sales Solicitation to Meeting
and Conference Planners Nationally
Administration: Organizational Oversight, Community
Relations, Industry Affairs, Financial Control and
Planning
VC ort
4 E H
Conference d
Visitors Bureau
Conference Sales History
Year
Room
Nights
Percentage
Change
July
1,
2008 — January
22, 2009
69792
+56%
Pace to last year
July
1,
2007 —June
30,
2008
139808
+32.8%
July
1,
2006 —June
30,
2007
109397
+7.4%
July
1,
2005 —June
30,
2006
91681
+46.0%
July
1,
2004 —June
30,
2005
61629
+12.8%
[July
1,
2003 —June
30,
2004
5,873
—38.6%
4 ew ort
E CHI
Conference &
Visitors Bureau
rce
Oate
( ear
auGX"
p <°��
9
. d 222pp
erg° �aruaey p0"
2pp "� aCy 31, 2
, pl,Jaru
1, 20
ao0o
N�gr�'s
6192
4,36"
P eGrarge
NP
2009 Organization Initiatives
Renewal of CVB Contract with the City of Newport
Beach
:) Creation of new Tourism Business Improvement
District
V ort
E HI
Conference d i
Visitors Bureau
CVB Contract
Renewal of existing contract for 5 year period. No
change in contract terms.
:) Contract reviewed by city tourism consultant in
August 2007
4 Reported that the CVB "has laid the foundation for an
exceptional CVB model for the community, employing a
number of industry best practices for destination ,W
marketing that were previously lacking at the bureau"
Endorsed the current contract format and five year term
e�w ort
E CHI
Conference &
Visitors Bureau
Newport Beach TBID
Tourism Business Improvement Districts currently in
existence in San Diego, Palm Springs Valley, San
Francisco, West Hollywood, Sacramento, Huntington
Beach, Laguna Beach. Also planning underway for
Anaheim /Garden Grove and Torrance areas.
Preferred method of increasing tourism resources
without demands on TOT
Greater Industry Control and Participation
ew ort
E CHI
Conference &
Visitors Bureau
Why A TBID?
Increasingly competitive nature of Southern California
tourism marketing
A need to capitalize on the "new" Newport Beach hotel
product with different and more affluent audiences
r The Newport Beach hospitality community has asked
for increased and more aggressive marketing during .
the economic downturn
TBID creates more TOT revenue without any additional
negative financial impact on the city
6WHI not hurt city's competitiveness in terms e�w ort
of total room taxes Etc x ,
Conference & 4
Visitors Bureau —
2009 Six Month Plan of Action
Continue to emphasize direct sales and marketing in
key regional markets
:z Push online marketing initiatives in both leisure and
group markets
Emphasize public relations online and in select
markets
:z Continue to establish select long term marketing
opportunities such as the UK market
ew ort
E CHI
Conference d
Visitors Bureau