HomeMy WebLinkAbout05/23/1994 Item #20CITY OF NEWPORT BEACH
OFFICE OF THE CITY MANAGER
May 23, 1994
Agenda Item No. 20
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APPROVED
TO: Honorable Mayor And Members Of The City Council C /�
FROM: Balboa Bay Club Ad Hoc Committee
by Kevin J. Murphy, City Manager
SUBJECT: BALBOA BAY CLUB PROFESSIONAL SERVICES
Recommendation:
1. Authorize the Balboa Bay Club Ad Hoc Committee (BBC Ad
Hoc) to retain real estate appraisal services to analyze the
proposed redevelopment of the Balboa Bay Club.
2. Retain Keyser Marston Associates to provide an economic
analysis of the proposed redevelopment plan and lease
extension on an hourly basis in accordance with their
proposal dated March 10, 1994 (attached).
3. Ratify the Scope of Work approved by the BBC Ad Hoc
Committee for consultant services.
4. Approve a Budget Amendment for $40,000 for the
estimated costs of the appraisal and economic analysis.
Background:
On May 6, 1994 the Balboa Bay Club Ad Hoc Committee met and approved a
Scope of Services for professional real estate appraisal and economic services
required to assist City staff in the analysis of the Balboa Bay Club
redevelopment and lease extension proposal. Attached for the City Council's
information is a copy of the report on the Scope of Services that was approved
by the BBC Ad Hoc Committee on May 6th.
City Council Policy F-7, covering Income Property, states that whenever the City
considers a lease of income property (or extension of an existing lease), the
City shall complete an analysis using... "appraisals or other techniques to
determine the highest and best use of the property." In addition, the City shall
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use reputable and independent appraisers, real estate or business consultants.
In the case of the Balboa Bay Club, the requested redevelopment and lease
extension is a very significant and important business decision for the City and
should be based on good, sound economic analysis.
Since the proposal of the Bay Club is proceeding on the entitlement process, it
is imperative that the analysis proceed expeditiously. It is for this reason that
the BBC Ad Hoc Committee has requested that they be given the authority to
interview on May 24th five appraisal firms and select one to immediately
commence work on the project. The Committee has met on several occasions
to talk about the project and the scope of outside assistance required on the
project. The Committee has met with an MAI appraiser to seek input and advice
on proceeding on an appraisal process. The Committee also met with Cal
Hollis of Keyser Marston Associates to discuss the economic analysis of the
project, the lease terms, and other financial issues. A document on the
qualifications of the Keyser Marston firm is attached for the City Council
members.
The attachments related to this matter are:
May 6, 1994 Memorandum to the BBC Ad Hoc Committee .
from City Manager on Scope of Work for Consultant
Services.
2. May 12, 1994 sample letter mailed to five appraisal firms on
appraisal work (including Scope of Work).
3. Proposal dated March 10, 1994 from Keyser Marston on
their proposed assistance on the proposed redevelopment
and lease extension.
4. City Council Policy F-7 on Income Property.
5. Qualifications and experience document on Keyser
Marston.
CITY OF NEWPORT BEACH
• OFFICE OF THE CITY MANAGER
May 6, 1994
TO: Honorable Mayor And Members Of The
Balboa Bay Club Ad Hoc Committee
FROM: Kevin J. Murphy, City Manager
RE: BALBOA BAY CLUB CONSULTANT SERVICES
BACKGROUND
Over the last few months as the Committee has discussed the proposed
redevelopment plan and lease extension proposed by the Balboa Bay Club, it
has become readily apparent that the City staff will need some technical
economic, real estate, and legal services in conjunction with the consideration
of this proposal. Several months ago the Committee met with Calvin Hollis of
• Keyser, Marston & Associates, and more recently met with John Adams of John
Adams and Associates, to discuss the use of specialized consultants.
At the conclusion of the April 13th meeting, City staff was instructed to return to
the Committee with a proposed scope of work for consultant assistance on the
project for Committee review and subsequent recommendation to the entire City
Council.
INCOME PROPERTY POLICY
Prior to preparing this memorandum I reviewed the City Council's Income
Property Policy F-7. It is very instructive and provides sound guidance to the
manner by which the City should consider and review the Bay Club's proposal
to redevelop their leased property and extend their lease. I've attached a copy
of the Policy for reference, and in particular, I would ask the Committee to focus
on items noted as #1, 2 and 6. These policies focus on the process the City
should follow..."whenever a lease, management contract, concession, sale or
similar action regarding income property is considered by the City." The policy
• says we shall do an analysis using ..."appraisals or other techniques to
determine the highest and best use of the property and the highest value of the
property". In addition, the City shall use reputable and independent appraisers,
real estate or business consultants. Clearly in the case of the Bay Club, which
is a large, highly developed piece of bay front property, this kind of independent
and qualified type of analysis is very prudent on the City's part because the
decisions that are made today may effect the property for many years to come.
SCOPE OF WORK
As discussed above and during prior Committee meetings, it is important that •
the City retain competent and qualified independent experts to review the
proposal from the Bay Club. The work that has been discussed would be
broken down into three discrete units or contracts and would likely be working
independently at times, while at other junctures would likely to be working
together to provide staff and the Committee timely information.
APPRAISAL:
The Bay Club Ad Hoc Committee should review and recommend to the City
Council an MAI Appraisal firm which will determine:
1. The Fair Market value of the Bay Club property and improvements,
unencumbered by the current lease.
2. The Fair Market value of the property and improvements, encumbered by
the current lease in place through 2011.
3. The Fair Market value of the property and improvements proposed by the
Bay Club in the proposed development plans and with the proposed •
lease term.
4. The determination of Fair Market value shall utilize the market and
income approaches.
5. After determining the Fair Market value of the proposed project,
determine the fair return to the City. This analysis should include a
comparison to other comparable coastal development projects.
The MAI appraisal firm will assist the City in:
1. Evaluating the financial feasibility of the proposed project in conjunction
with other consultants and City staff.
2. Evaluating the appropriate length of any lease extension and the terms of
any lease, particularly from a lenders perspective.
REAL ESTATE/ECONOMIC ANALYSIS:
The Bay Club Ad Hoc Committee should review and recommend to the City •
Council a real estate/economic analysis consultant to assist the City by:
1. Reviewing the existing lease terms which the City may wish to modify in
any lease extension. This would include a review of the economic terms,
options, and a recommendation on appropriate terms and a rationale
supporting the recommendation.
• 2. Reviewing the current operating income and expense data, supplied by
the Bay Club, as well as financial projections of the proposed
redevelopment of the property to determine the appropriate ground rent
to be paid by the leasee and the financial feasibility of the project.
3. Reviewing the proposed extension of the lease and the appropriate
length of an extension.
4. Examining other land use alternatives for the property and the impact on
the return on investment to the City. These alternatives would be
consistent with current tideland trust restrictions and land use regulations
now in force and effect.
5. Examining the City's operation of all or a portion of the property, with
current uses of the property at the expiration of the current term of the
lease.
6. Assisting the City during negotiations on the terms and economics of an
extended lease agreement.
is LEGAL:
The Bay Club Ad Hoc Committee should review and recommend to the City
Council special legal counsel to assist the City Attorney in:
1. The drafting of a new ground lease for the property, building in any and
all protections for the City, during construction and use of the property.
2. The drafting of provisions in a new ground lease that will protect the City
and any lender during construction or operation of the property.
3. The negotiation on the terms of any extended lease agreement.
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Office of City Manager •
(714) 644-3000
May 12, 1994
Dear :
The City of Newport Beach is seeking proposals to assist the City in determining
the current and future value of the property under lease to the Balboa Bay Club. •
The Balboa Bay Club now operates under a twenty-five year lease which
expires in 2011 and has indicated an interest in redeveloping a portion of the
property and simultaneously has requested a substantial extension of its current
lease.
The City Council has appointed a Balboa Bay Club Ad Hoc Committee to
review this proposal prior to the presentation to the full City Council. The Ad
Hoc Committee has approved the retention of three consultants to assist in the
review of the Bay Club's proposal and this matter will appear before the entire
City Council for approval on May 23, 1994. The Ad Hoc Committee anticipates
approval of retaining consultants for these services and obtaining authorization
to enter into contracts for the services, and based thereon, has approved the
release of this request for proposal.
It is our hope to receive proposals from five firms for this service. Your firm has
been recommended to City staff as fully qualified to undertake this complex
coastal work. We would appreciate receiving your proposal no later than May
20, 1994 by delivering five sets of your proposal to the City Manager's Office
which is located within City Hall, at 3300 Newport Boulevard. On May 24th,
beginning at 4:30 PM the Ad Hoc Committee will interview the firms submitting •
proposals in the City Council Conference Chambers. It is anticipated that the
interviews will last approximately 30 minutes each and cover the material
submitted and the reasons why the City should retain your company's services.
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Attached for your information is the Scope of Work that is being requested
under this request for proposal. Inasmuch as time is of the essence on this
project, we are asking for all the work within the proposal to be completed within
90 calendar days from the approval of the project.
If you have any questions on this request for your proposal, please feel free to
contact my office at (714) 644-3000.
Sincerely,
Kevin J. Murphy
City Manager
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Attachment
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SCOPE OF WORK •
BALBOA BAY CLUB
APPRAISAL SERVICES
MAY 12,1994
BACKGROUND: The City of Newport Beach currently leases property on
Newport Bay to the Balboa Bay Club under lease terms through 2011. Under
the terms of the lease the Balboa Bay Club operates and manages a hotel,
restaurant, banquet, lounge, health club facilities, in addition to apartment
units on the site.
The Balboa Bay Club has proposed a redevelopment of a portion of the site
and has requested a lease extension in order to permit the financing of the
improvements. The plans for redevelopment have been submitted to the •
Planning Department and an environmental impact report (EIR) has been
prepared and comments have been received from various parties. The City's
Planning Commission will soon be reviewing the proposal from a land use
entitlement standpoint, and the Balboa Bay Club will subsequently require
City Council approval of the land use proposal and an extended lease.
Prior to the City Council's review of the proposed project and lease extension
request, a subcommittee of the City Council, the Balboa Bay Club Ad Hoc
Committee, will be reviewing the project and providing a recommendation
to the entire City Council. This subcommittee has determined that additional
real estate/economic/appraisal and legal assistance will be required to
properly review the proposal and make an informed decision on this
important project. It is anticipated that there will be substantial public input
on this project from a land use and lease term perspective.
On May 6, 1994 the Balboa Bay Club Ad Hoc Committee approved the release
of a request for proposal seeking assistance for appraisal services on this
project. This recommendation, and a recommendation for other professional •
assistance is anticipated to be approved by the full City Council on May 23,
1994, and the Committee authorized to retain and employ the necessary
assistance in accordance with the scope of services outlined below.
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SCOPE OF SERVICES
The City is seeking an MAI Appraiser to:
1. Determine the Fair Market rental value of the property, encumbered by
the current lease through 2011.
2. Opine on whether the current and proposed uses are the highest and
best uses for the property, taking into consideration the restrictions on
the property by all governmental agencies.
3. Determine the Fair Market rental value of the property proposed by the
Balboa Bay Club in the proposed redevelopment plans and with the
lease term proposed by the Balboa Bay Club.
• 4. Determine the Fair Market rental value utilizing the market, income,
or other appraisal techniques determined most appropriate by the
appraiser.
5. Determine, after appraising the fair market rental value of the
proposed project, the fair return to the City. This analysis should
include a comparison to other comparable coastal development
projects.
6. Cooperate with other financial consultants selected by the City to
determine the financial feasibility of the proposed project and the
appropriate length of a lease extension, the terms of the lease,
particularly from a lenders perspective.
SUBMITTALS
• In submitting a proposal you should provide to the City the following:
1. A restatement of the scope of services envisioned for the project.
2. A statement of qualifications and experience in providing similar
appraisal work on complex coastal projects within the last 36 months.
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3. A list of five references on work within the last 12 months for contact
by the City staff.
4. An hourly rate for the proposed scope of work and an absolute dollar
figure which will not be exceeded in performing the work, without
prior authorization by City staff.
5. A proposed time schedule for the work.
SELECTION
The Balboa Bay Club Ad Hoc Committee will interview appraisers submitting
proposals on May 24th and it is anticipated that the City Council on May 23, •
1994 will authorize the Ad Hoc Committee, working through the City
Manager, to select an appraiser and other consultants to immediately begin
work upon selection by the Ad Hoc Committee on May 24, 1993. The
interviews are anticipated to last thirty minutes and focus on the experience
of the individuals and firms submitting proposals.
INFORMATION
If there is any information on the specifics of the proposal or background of
the Balboa Bay Club property please direct all inquiries through the City
Manager's Office and to the City Manager, Kevin J. Murphy, at (714) 6443000,
or in writing to 3300 Newport Boulevard, Newport Beach, CA 92660.
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KEYSER M ARSTON ASSOCIATES INC.
500 SOUTH GRAND AVENUE, SUITE 1480
LOS ANGELES, CALIFORNIA 90071
213/622-8095 FAx 213/622-5204
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March 10, 1994
Mr. Kevin Murphy
City Manager
City of Newport Beach
3300 Newport Beach Boulevard
Newport Beach, California 92659
Dear Mr. Murphy:
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ADvwRs IN:
REAL ESTATE
REDEVELOPMENT
ECONOMIC DEVELOPMENT
FISCAL POLICY
Los ANGELES
RICHARD L. Bom
CALVIN E. HOLLIS, 11
KATHLEEN H. HEAD
SAN DIEGO
GERALD M. TRA/RLE
ROBERT J. WETMORE
SAN FRANCISCO
A. JERRY KEYSE!
TR.1oTHY C. KELLY
KATE EARLE FUNK
DENIER E. CONLEY
As requested, Keyser Marston Associates, Inc. (KMA) has prepared
this scope of services proposal and fee estimate to assist the City
in evaluating a lease extension requested by the Balboa Bay Club.
We have designed the work program such that it would be authorized
in phases, at the sole discretion of the City.
TASK 1 - REVIEW EXISTING LEASE
KMA will review the current lease to identify those economic terms
which the City may wish to modify in consideration of a lease
extension. KMA will provide a memorandum to the City which
describes each specific economic issue, the current terms, the
options available for consideration, our recommendations as to the
preferred option, and the rationale for our recommendation. We are
limiting our comments to the economic terms of the lease. We would
point out that the current lease does not seem to have contemplated
either major reconstruction on the property or a conventional
leasehold mortgage to finance such reconstruction. As such, major
lease elements providing lessor and lender protection from
construction risks are not addressed in the lease, nor are typical
lender required post -construction protections contained in the
lease. While not strictly "economic" terms, they are critical to
the development of the site. These issues should be addressed as
part of the lease extension negotiations.
This initial task would be
authorization.
TASK 2 - FINANCE ANALYSIS
completed within two weeks of
The current lease provides for both base rent and additional rent
as a percentage of gross income from the property. Additional rent
is based upon a schedule of percentages applied against various
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Mr. Kevin Murphy
March 10, 1994
Page 2
business operations on the property. The reconstruction of the
project will modify the current gross operating income and thus
impact the current ground rent paid by the lessee. KMA proposes to
examine current operating income and expense data, to be supplied
by the lessee as well as review operating pro forma projections, to
be prepared by the lessee, which reflect the impact of the proposed
reconstruction. KMA will advise the City, based upon this
analysis, of any recommended changes to the percentage rent terms.
Additionally, KMA will note any areas of concern as to the
projected operating income and expenses for the project, including
identifying potential risks to the City's revenue stream.
This financial analysis would be prepared within 30 days of
authorization and receipt of current and projected operating pro
formas for the project.
TASK 3 - NEGOTIATION ASSISTANCE
If and as requested by the City, KMA would be available to advise
the City during the course of the negotiations, including analyzing
the impact to the City's land rent (current and projected) arising
from any proposed lease terms.
TASK 4 - DOCUMENTATION
KMA would be available to assist the City and its legal counsel in
the drafting of the economic terms of the lease and in preparation
of such explanatory documents as may be necessary to present the
proposed lease terms to the City Council and/or the public.
FEE
KMA proposes to provide services under Tasks 1 and 2 on a fixed fee
basis as follows:
Task 1 - Lease Review $ 3,500
Task 2 - Financial Analysis $11,500
Inclusive in these fees are one meeting each to present the results
of our analysis.
KMA proposes to provide services under Tasks 3 and 4 on an hourly
rate basis, if and as requested by the City. The extent of these
services is difficult to estimate, with the fee dependent upon the
length and complexity of the negotiations. We would suggest, based
upon our experience with similar projects, that a budget of $15,000
to $20,000 be established for these services. We have submitted a
sample consulting contract for your consideration.
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KE YS E R MARS TON ASSOCIATES INC.
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Mr. Kevin Murphy
March 10, 1994
Page 3
PERSONNEL
KMA will assign Cal Hollis to be the principal in charge of these
services. Mr. Dick Botti, senior principal and co -manager of the
KMA Los Angeles office, will act as a consulting principal.
Limited staff assignments will be made as necessary, primarily to
assist in the financial analysis (Task 2).
we appreciate the opportunity to submit this proposal and are
available to discuss its terms at your convenience.
Sincerely,
KEEYSE"R MARS,T/ON�AASSOCIATES, INC.
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Calvin E. Hollis
• C£H:lp
94174.KM4
99900.900
KEYSER M A RSTON ASSOCIATES INC.
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CONSULTANT SERVICES AGREEMENT
THIS AGREEMENT is made at Newport Beach, California, as of •
, 1994 by and between the CITY OF NEWPORT BEACH ("CITY"),
and KEYSER MARSTON ASSOCIATES, INC. ("CONSULTANT"), who agree as
follows:
1. Services: Subject to the terms and conditions set forth in
this Agreement, Consultant shall provide to City the services
described in Exhibit "A".
The parties to this Agreement agree that Consultant, in
performing the services described in Exhibit A, will not make any
warranties or guarantees as to the future value of any real or
personal property, nor will it make any express warranties or
guarantees of estimated or probable construction cost or cost
estimates being exceeded, nor will it guarantee the availability of
funds or specified rates of return and/or interest. Further, the
parties agree that Consultant will not perform services as a
construction manager, appraiser of the fair market value of real
estate, real estate broker or agent, or property manager.
2. Payment. City shall pay Consultant for services rendered
pursuant to this Agreement at the time and in the manner set forth
in Exhibit "B". The payments specified in Exhibit "B" shall be the •
only payment to be made to Consultant for services rendered
pursuant to this Agreement. Consultant shall submit all billings
for said services to City in the manner specified in Exhibit "B".
3. Facilities and Equipment. Consultant shall, at its sole cost
and expense, furnish all facilities and equipment which may be
required for furnishing services pursuant to this Agreement.
4. General Provisions. The general provisions set forth in
Exhibit "C" are part of this Agreement. In the event of any
inconsistency between said general provisions and any other terms
or conditions of this Agreement, the other terms or conditions
shall control only insofar as it is inconsistent with the general
provisions.
5. Exhibits. All exhibits referred to herein are attached hereto
and are by this reference incorporated herein.
EXECUTED as of the day first above -stated.
CITY OF NEWPORT BEACH KEYSER MARSTON ASSOCIATES, INC. •
By By
"CITY" "CONSULTANT"
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EXHIBIT A
• SCOPE OF SERVICES
When and as directed by the City, Consultant shall perform
real estate consulting services for the project area to include,
but not be limited to the four tasks outlined in the attached
proposal letter dated February 10, 1994.
METHOD AND TIME OF PERFORMANCE
Consultant shall perform the various services described herein
as described in the attached February 10th proposal.
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EXHIBIT B
COMPENSATION •
For Task 1, as described in the attached proposal, Consultant
shall be paid a flat fee of $3,500, inclusive of all expenses and
one meeting with City staff to present the findings of this task.
Payment shall be upon completion of the Task 1 memorandum.
For Task 2, as described in the attached proposal, inclusive
of all expenses and one meeting with City staff to present the
findings of this task. Payment shall be upon completion of the
Task 2 memorandum.
For Tasks 2 and 3, if and when authorized, the City agrees to
pay and Consultant agrees to accept compensation on an hourly basis
according to the following fee schedule, which will remain in
effect through December 31, 1994, at which point new rates may be
negotiated:
A. Jerry Keyser*
$150.00
Senior Principal*
$145.00
Principal*
$140.00
Senior Associate*
$120.00
Associate
$105.00
Senior Analyst
$ 90.00
Analyst
$ 80.00
Technical Staff
$ 50.00
Administrative Staff
$ 45.00
Directly related job expenses not included in the above rates
are: Auto mileage, air fares, hotels and motels, meals, car
rentals, taxies, telephone calls, delivery, electronic data
processing, graphics and printing. Directly related job expenses
will be billed at 110% of cost.
MAXIMUM COMPENSATION
The total compensation for all services performed pursuant to
this Agreement shall not exceed the sum of FORTY-FIVE THOUSAND
DOLLARS ($45,000), without prior approval of the City.
*Rates for individuals in these categories will be increased
by 50% for time spent in court testimony.
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METHOD OF PAYMENT
Consultant shall submit monthly requisitions to City
specifying the amount due for services performed by Consultant's
staff and a list of incurred expenses for the past calendar month.
Upon approval of the services performed and the requisition, city
shall pay Consultant in accordance with such requisition.
Monthly billings will be payable within thirty (30) days of
invoice date. A charge of 1% per month will be added to all past
due accounts.
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EXHIBIT C
1. Independent Contractor. At all times during the term of
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this Agreement, Consultant shall be an independent contractor and
shall not be an employee of City. City shall have the right to
control consultant only insofar as the results of Consultant's
services rendered pursuant to this Agreement; however, City shall
not have the right to control the means by which Consultant
accomplishes services rendered pursuant to this Agreement.
2. Time. Consultant shall devote such time to the
performance of services pursuant to this Agreement as may be
reasonably necessary for satisfactory performance of Consultant's
obligations pursuant to this Agreement.
3. Consultant's Liability. The Consultant shall be
responsible for all injuries to persons and for all damage to real
or personal property of the City or others, caused by or resulting
from the negligence of itself, its employees, or its agents during
the process of or connected with the rendition of services
hereunder. Consultant shall defend and hold harmless and indemnify
the City, the Agency, and all officers and employees of both public
agencies from all costs and claims for damages to real or personal
property, or personal injury to any third party, resulting from the
negligence of itself, its employees, or its agents, arising out of
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the Consultant's performance of work under this Agreement.
4. Euual Employment Opportunity. During the performance of
this Agreement, the Consultant agrees as follows:
a. The Consultant will not discriminate against any employee
or applicant for employment because of race, color, age, religion,
sex, national origin, or physical handicap. The Consultant will
take affirmative action to ensure that applicants are employed, and
that employees are treated during employment, without regard to
their race, color, age, religion, sex, national origin, or physical
handicap. Such action shall include, but not be limited to the
following: employment, upgrading, demotion, or transfer,
recruitment or recruitment advertising; layoff or termination;
rates of pay or other forms of compensation; and selection for
training, including apprenticeship. The Consultant agrees to post
in conspicuous places, available to employees and applicants for
employment, notice setting forth the provisions of this non-
discrimination clause.
b. The Consultant will, in all solicitations or •
advertisements for employees placed by or on behalf of the
Consultant state that all qualified applicants will receive
consideration for employment without regard to race, color,
religion, sex, age, national origin, or physical handicap.
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C. The Consultant will cause the foregoing provisions to be
inserted in all subcontracts for any work covered by this
Agreement, provided that the foregoing provisions shall not apply
• to contracts or subcontracts for standard commercial supplies or
raw materials.
5. Consultant Not Agent. Except as City may specify in
writing, Consultant shall have no authority, express or implied, to
act on behalf of City in any capacity whatsoever as a agent.
Consultant shall have no authority, express or implied, pursuant to
this Agreement to bind City to any obligation whatsoever.
6. Products of Consulting. All products of consulting, with
the exception of computer software developed by Consultant, shall
become the property of the City and shall be delivered to the City
before the end of performance under this Agreement. Computer
software remains the property of Consultant.
7. Assignment Prohibited. No party to this Agreement may
assign any right or obligation pursuant to this Agreement. Any
attempted or purported assignment of any right or obligation
pursuant to this Agreement shall be void and of no effect.
B. Changes. The City may, from time to time, request change
• in the Scope of Services of the Agreement to be performed
hereunder. Such changes, including any increase or decrease in the
amount of Consultant's compensation, which are mutually agreed upon
by and between the City and the Consultant, shall be incorporated
in written amendments to this Agreement.
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9. Termination. This Agreement may be terminated by either
party on thirty (30) days written notice to the other. The
effective date of cancellation being the 30th day of said written
notice. Consultant shall be entitled to the compensation earned by
it prior to the date of termination, computed pro rata up to and
including the date of termination.
10. Attorney's Fees. In the event that it becomes necessary
for either party to this Agreement to bring a legal suit to enforce
any of the provisions of this Agreement, the parties agree that a
court of competent jurisdiction may determine and fix reasonable
attorney fees to be paid the successful litigant.
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INCOME PROPERTY •
The City owns and manages an extensive and valuable assortment of property
including streets, parks, beaches, public buildings and service facilities. The
City also owns and operates a yacht basin, a mobile home park, a luxury
residential development and various other income properties. Most of the
income properly is tidelands, filled tidelands or waterfront Unencumbered fee
value of income property is estimated at upwards of one hundred million
dollars, and income typically contributes ten percent of all City revenues.
As owner of property, the City is the steward of a public frust and state law
requires the City to maximize its returns or be subject to a charge of making a
gift of public funds. Nevertheless, the City Council recognizes the importance of
this property not only as a revenue generator, but also as a means to provide
otherwise unfeasible uses and facilities to benefit the community.
In managing its property, the City will continually evaluate the potential of all
City owned property to produce revenue. This may include leasing unused •
land, renting vacant space, establishing concessions in recreation areas or other
similar techniques. The City Council will evaluate the appropriateness of
establishing new income properties using sound business principals and after
receiving input from neighbors and users.
The policy of the City Council is that income property be managed in accordance
with the following.
1. Whenever a lease, management contract, concession, sale or similar action
regarding income property is considered by the City, an analysis shall be
conducted to determine the maximum or open market value of the
property. This analysis shall be conducted using appraisals or other
techniques to determine the highest and best use of the property and the
highest value of the property.
2 All negotiations regarding the lease, management contract, concession,
sale or similar action regarding income property shall include review of
an appraisal or analysis of the use being considered for the property
conducted by a reputable and independent professional appraiser, real
estate consultant or business consultant
3. The City shall seek, whenever practical and financially advantageous, to
operate or manage all property and facilities directly with City staff or
contractors.
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F-7
• 4. In all negotiations regarding the lease, management contract, concession,
sale or similar action regarding a non-residential income property, the
City shall seek revenue equivalent to the open market value of the highest
and best use, and, whenever possible the City shall conduct an open bid
or proposal process to insure the highest financial return
5. Whenever less than the open market or appraised value is received or
when an open bid process is not conducted, the City shall make specific
findings setting forth the reasons thereof.
Such findings may include but need not be limited to the following:
(a) The City is prevented by tideland grants, Coastal Commission
guidelines or other restrictions from selling the property, or
converting it to another use.
(b) Redevelopment of the property would require excessive time,
• resources and costs which would outweigh other financial benefits.
(c) Converting the property to another use or changing the manager,
concessionaire or lessee of the property would result in excessive
vacancy, relocation or severance costs which would outweigh other
financial benefits.
(d) Converting residential property to another use or opening
residential leases to competitive bid would create recompensable
liabilities and other inequities for long -berm residents.
(e) The property, provides an essential or unique service to the
community that might not otherwise be provided were full market
value of the property be required.
(f) The property serves to promote other goals of the City such as
affordable housing, preservation of open space or marine related
services.
. b. Generally, lengths of leases, management contracts, concessions or similar
agreements will be limited to the minimum necessary to meet market
standards and will contain appropriate reappraisal and inflation
protection provisions. Also, all agreements shall contain provisions to
assure complete audits periodically through their terms.
a
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F-7
7. All negotiations regarding the lease, management contract, concession,
sale or similar action regarding income property shall be conducted by
the City Manager or his designee under the direction of the City Council
Ad Hoc Income Property Committee or other appropriate committees
prior to consideration by the City Council.
Adopted - July 27,1992
Amended - January 24,1994
Formerly F-24
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KeyserNlarstonAssociateslnc.
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KEYSER MARSTON ASSOCIATES INC.
500 SOUTH GRAND AVENUE, SUITE 1480
LOS ANGELES, CALIPORNIA 90071
213/622-8095 PAX 213/622.5204
May 10, 1994
Mr. Kevin Murphy
City Manager
City of Newport Beach
3300 Newport Boulevard
Newport Beach, California 92659
Dear Mr. Murphy:
ADVIsORs IN: -
REAL ESTATE
REDEVELOPMENT
ECONOMIC DEVELOPMENT
FECAL Poucv •
Los ANGELES
RICHARD L. BOTTI
CALVIN E. HOLLIS, 11
KATHLEEN H. HEAD
SAN DIEGO
GERALD M. TREARLE
RoRERT J. WEn iou
SAN FRANcIsco
A. JERRY KMER
TLNOTHY C. KELLY
KATE EARLE FUNx
DENISE E. CONLEY
Pursuant to your request, KMA is pleased to submit this summary of
our experience in the area of ground lease negotiations. Since
1972, KMA has provided real estate advisory services, with a
particular emphasis on public/private real estate transactions.
Over that twenty-two year period, we have had the opportunity to be
the principal real estate advisors on many of the largest and most
complex public/private real estate ventures developed in
California, including Yerba Buena Gardens in San Francisco,
California Plaza in downtown Los Angeles, and Horton Plaza in San
Diego. Additional assignments included representing the City of
Commerce in the Citadel mixed-use project, the City of Glendale in
the Glendale Galleria expansion as well as a number of assignments
for the cities of Anaheim, Santa Ana, Costa Mesa and Huntington
Beach. our work in marinas include work for the County of Los
Angeles at Marina Del Rey. Our hotel experience includes the Hyatt
in Garden Grove, the Hilton hotels in Huntington Beach and Burbank,
the Red Lion in Glendale and the Wyndham hotel in Commerce. The
enclosed provides additional information on our firm's experience.
If selected to assist the City of Newport Beach in the Balboa Bay
Club negotiations, we will assign two senior principals from our
Los Angeles office. Assisting me will be Richard Botti, a co-
manager of the Los Angeles office. Mr. Botti has extensive real
estate advisory experience and is currently working on assignments
in Anaheim, Garden Grove, and Brea. His recent private sector
experience includes representing such clients as Aetna Realty
Advisors, The Yarmouth Group, and Texaco.
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Mr. Kevin Murphy
May 10, 1994
Page 2
We hope the enclosed information meets the City's requirements.
Should you require additional information, please do not hesitate
to call.
Sincerely,
KEYSER MARSTON ASSOCIATES, INC.
Calvin E. Hollis
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KEYS ER MARS TON ASSOCIATES INC.
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KEYS ER MARS TON ASSOCIATES INC.
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OVERVIEW OF
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KEYSER M A RSTON ASSOCIATES INC.
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KEYSER MARSTON ASSOCIATESt INC.
OVERVIEW
is
KMA provides consulting services to a wide variety of private and
public clients. These services encompass market analyses and
highest and best use studies, strategic planning, developer
solicitation, proposal evaluation and negotiations, transaction
documentation, monitoring of participation agreements, including
participating ground leases.
Uniquely, KMA combines its real estate advisory services with a
range of financial services including the projection of public
revenues, and fiscal impact analyses, and economic analyses of
alternative land use options. Additionally, the firm has extensive
experience in the use of public financing as part of the
development process.
To assist in providing these services, KMA has developed
proprietary software for development pro forma analysis, retail
market share analysis, fiscal impact, as well as cash flow models
designed to test the financing ramifications of alternative
redevelopment scenarios. These models are constantly being
upgraded and improved and are often modified to meet the individual
needs of our clients.
• The following provides a representative listing of recent Los
Angeles office assignments, which demonstrate our range of
experience:
I. Market Demand Analyses
Ii. Financial Analyses
III. Developer Solicitation and Evaluation
IV. Fiscal Impact Analyses
V. Ground Lease Negotiations
Vi. Computer Capabilities
VII. References
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KE YS ER M A RS TON ASSOCIATES I NC.
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I.
A.
MARKET DEMAND ANALYSES
The foundation for
is an understanding
internally perform
that its other real
realities.
RETAIL
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all of mm's real estate advisory services
of market demand dynamics. The ability to •
market analyses allows KRA to be confident
estate services are based on sound market
JMB Urban
Rocklin
KMA prepared an analysis of the market demand for a major
regional shopping center in Rocklin. Analysis included an
extensive examination of the competition, and population
projections for this high growth area. KMA used the market
assessment as one tool in assisting the developer with
negotiations to obtain development entitlements and public
financial assistance.
May Centers Development
Inland Empire
KMA assessed the near-term market opportunities for a regional
shopping center to be located in the Inland Empire. KMA also
identified the trade area for the proposed center, which
encompasses portions of four counties; prepared population
projections for this rapidly growing area and; developed a
retail allocation model to estimate the share of comparison
expenditures potential that a regional mall at the site could
be expected to capture.
City of Long Beach
KMA assessed the near-term opportunities associated with
rehabilitating and repositioning an existing regional retail
center for "value oriented" retailing. The market analysis
tested the depth of demand for the regional mall expansion as
compared to the market opportunities associated with
developing a large scale promotional retail center. The
market demand was quantified using a retail allocation
computer model developed by KMA, which was used to test the
varying impacts associated with expanding the existing center
with anchor tenants that traditionally serve different market
segments.
City of Alhambra
As part of the specific planning process, KMA projected market
demand for neighborhood and regional serving retail
development along a three mile stretch of a commercial
arterial. During the implementation phase of the process, KMA
identified the density levels required to allow development to
occur on a financially feasible basis. KMA also listed the
market demand for expansion of retailing in downtown Alhambra.
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B. RESIDENTIAL
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Nikko Capital Company
KMA assessed the market opportunities for the development of
• a city block in downtown San Mateo, which was assembled by
Nikko Capital Company. Based on an analysis of demographic
and competitive characteristics, KKA recommended the
development of high-rise luxury condominiums. KMA is
continuing to work with the developer throughout the project's
predevelopment stages including continuing market research on
specific floor plans and project amenities.
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D.
City of Palmdale
XNA performed a financial analysis of the supportable
infrastructure payments that can be made by the developer of
a 2,000 -acre residential subdivision. These payments were to
be earmarked for the provision of public open space, community
facilities and regional serving infrastructure improvements.
The analysis included an assessment of the market demand for
apartment, townhouse, condominium, moderate priced single
family homes, and luxury estate homes.
City of Escondido
KMA performed a market and financial analysis for a major
residential subdivision in Escondido. The analysis included
estimating monthly absorption rates, anticipated sales prices,
sales price premiums and the underlying land values at varying
density levels.
OFFICE
City of Santa Ana
IM identified the office market conditions currently
exhibited within the City of Santa Ana for use in the
evaluation of the density level that optimizes land values.
This analysis was used to quantify the benefits associated
with providing density bonuses in return for developers
assuming responsibility for public serving amenities and/or
regional infrastructure improvements.
Lockheed Aircraft Corporation
Burbank
KMA evaluated the conversion possibilities for properties
owned by Lockheed around the Burbank Airport. The analyses
performed included an analysis of market demand for a campus -
like office park at the airport.
HOTEL
San Diego .
KMA prepared a market assessment of hotel, retail, restaurant
and conference center uses for the owner of a parcel in San
KEYSER M A RSTON ASSOCIATES INC.
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Diego's Mission Bay Park. KMA then prepared a financial
feasibility analysis for hotel/conference center development,
which was the use that generated the highest land value. KKA
assisted the property owner in negotiating with the various •
government bodies to secure the necessary approvals to change
the existing land use designation.
City of Imine
As a part of the specific planning process, KMA projected the
near- to mid-term demand for hotel development within the
Irvine Business Complex. The hotel projections were based on
an analysis of historical hotel development trends, current
performance of existing hotels, in conjunction with projected
employment and population growth. The projections were
performed primarily to evaluate the demand for business
quality hotel development.
City of Indian wells
KMA prepared market demand projections for hotel and
residential development for use in developing alternative
build -out scenarios. Using the build -out level of development
allowed by the General Plan, KMA prepared public revenue/cost
projections under the alternative development schedules.
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IZ. FINANCIAL ANALYSES
RMA has substantial experience in conducting pro forma
• financial analyses for its public And private sector clients
in a wide range of land use types.
A. RETAIL/MIXED USE
BCTC - Monterey Park
KMA performed a financial assessment of mixed-use retail,
cinema, and office project for the owner of the property.
KKA's analyses was the basis for negotiations with major
anchor tenants as well as the City of Monterey Park.
City of Burbank - Media Center
KMA performed detailed financial analyses of this complex
joint -venture development of over 1 million square feet. KKA
valued the City's participation in projected project profits
and assisted in the negotiations.
City of Commerce - Citadel
The site for the Citadel, was obtained by the City of Commerce
and formerly was the location of the Uniroyal Tire Plant. KMA
analyzed the ground lease proposal from the Trammel Crow
Company and assisted the City in negotiating ground lease
• terms for this retail, office, and hotel project.
The Redevelopment Agency of the City of Long Beach
KMA is currently advising the Agency on a variety of projects
including a 3,700 seat cinema/retail/residential complex,
analysis of various hotel expansion alternatives and a program
for the revitalization of Pine Avenue.
City of Brea
KKA is currently assisting the Redevelopment Agency in
structuring a 5 -phase transaction for downtown Brea, involving
two retail components and for -sale and rental housing.
B.
City of Huntington Beach
KMA assisted the Redevelopment Agency in the negotiations for
the disposition of a parcel owned by the City of Huntington
Beach, which was to be developed with a mix of townhouse and
condominium flat units. KMA determined the fair reuse value
for the property, and assisted the Agency in structuring a
• transaction that provided an upfront land payment and a
participation share in the project's future income. YMA
assisted the Agency in monitoring the participation agreement
over time.
K E YS ER M A RSTO N ASSOCIATES INC.
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City of Huntington Beach
KKA prepared a policy paper recommending basic standards that
should be established for SRO development, for the use of a
steering committee that was developing an SRO ordinance.
Subsequently, RMA prepared a financial feasibility analysis of
an SRO project proposed to serve very low, low and moderate
income households.
City of Long Beach
KMA performed a financial analysis of a proposed residential
adaptive reuse of a historically significant building in
downtown Long Beach, including the cost premiums associated
with the historic preservation. The analysis was undertaken
to determine the impact of recently adopted development fees
upon the project's feasibility.
City of Glendale
IIIA performed an economic analysis of a proposed senior
citizen apartment project for which 100% of the units would be
restricted to very low income households. KMA formulated a
financing strategy that included the use of low income tax
credits, ongoing rental assistance payments and a
participating ground lease.
OFFICE
City of Long Beach
KKA currently advises the City of Long Beach on the financial
returns likely to result from various ground lease proposals
for property at the Long Beach Airport. The most recent
proposal analyzed was for major manufacturers of aircraft.
City of Glendale - Carnation Headquarters
As part of its long standing consulting agreement with the
City's Redevelopment Agency, KMA analyzed the f}nancial
characteristics of this 500,000 square foot high-rise office
project in downtown Glendale, and assisted the Agency in
structuring the transaction.
City of Phoenix, Arizona
IMA was selected to assist the City of Phoenix in the analysis
of developer proposals for a multi -phase, I million square
foot office project to be developed on property to be acquired
and ground leased by the City. IMA was a member of the City's
three person negotiating team which simultaneously negotiated
business letters from four national developers.
City of Santa Pe springs
IMA assisted the City in developer selection and lease
negotiation for this multi -phase office and industrial park.
The project is developed under a long-term, participating
ground lease.
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D. HOTEL
City of Huntington Beach
KMA assisted the Redevelopment Agency in the disposition
negotiations for a 46 acre site owned by the City of
• Huntington Beach, that was to be developed with four first
quality hotels, 650 residential units, specialty retail stores
and athletic club facilities. 10M determined the fair reuse
value of the property, and prepared public revenues
projections to assist in determining the public benefits
associated with the project.
City of Palm springs
KMA prepared financial analyses of three hotels proposed to be
located in downtown Palm Springs. These assignments ranged
from an analysis of the financial feasibility of developing a
first class resort hotel in conjunction with the rehabilita-
tion of an existing golf course; an assessment of a moderate
priced hotel to be developed as a part of a hotel/golf/tennis/
retail/residential mixed-use project; and an evaluation of the
supportable rehabilitation costs for an existing hotel/spa
complex.
City of Glendale - Red Lion
KKA participated in the developer selection process for a
business quality hotel/meeting facility to be located in
• downtown Glendale. KMA assisted the Redevelopment Agency in
negotiating the land sale terms and parking structure
agreement with the selected developer. This Red Lion Hotel
recently opened.
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City of Santa Monica
KMA assisted the City in the selection of a developer and in
developer negotiations for a major waterfront hotel site in
the City of Santa Monica. The analysis included an assessment
of the hotel market, financial modelling, and assistance to
legal counsel in structuring the land lease.
KEYS ER M ARSTON ASSOCIATES INC.
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III. DEVELOPER SOLICITATION AND BVALIIATION
RNA's extensive experience in over loo communities and with
literally hundreds of development proposals allows the firm to •
advise its clients in the crafting and distribution of
development solicitations. RNA has personal contacts
throughout the development community, having worked on
projects involving the major development companies active in
California and the vest.
city of Phoenix, Arizona
The Los Angeles office of KMA assisted the City of Phoenix in
the selection of a developer for i million square feet of
office space on property to be ground leased from the City of
Phoenix. The City undertook simultaneous negotiations with
four national developers and concluded with business offers
from each. The list was reduced to three in February, and
additional negotiations resulted in enhanced business offers.
The Redevelopment Agency of the City of Long Beach
IM initially reviewed the market demand for retail uses and
is currently advising the Agency in the selection of a
developer for a promotional retail center along the 605
Freeway.
The Redevelopment Agency of the City of Glendale •
RMA assisted the Agency in drafting an RFQ/P for a 300 room
hotel in downtown Glendale. KMA evaluated the proposals,
advised in the selection of a final developer and assisted in
the negotiation of a unique development agreement providing
for long-term Agency cash flow participation. The 300 room
Red Lion Hotel was opened in November.
The Redevelopment Agency of the City of Brea
KMA evaluated proposals to redevelop a 50 acre parcel of land
in Brea that is to become the "new" downtown. The assignment
included assisting in establishing program criteria, issuance
of an RFQ, review of responses and developer negotiations.
The Redevelopment Agency of Temple City
KMA assisted the Agency in soliciting and evaluating proposals
to develop a 12 -acre promotional retail center. Subsequently,
KMA advised the Agency in the negotiation of a development
agreement which includes a participation in the project cash
flow and sales profits. This project is complete.
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IV. FISCAL IMPACT ANALYSES
RMA prepares fiscal impact and fee nexus analyses for public
• and private sector clients throughout California.
MICOR Ventures, Inc.
KMA analyzed the fiscal impacts associated with the annexation
of 990.7 acres to the City of Calabasas to be subsequently
developed with 250 single family homes. The fiscal analysis
included one-time revenues including exactions and real estate
transfer tax revenues; ongoing costs to City departments such
as fire, police, public works, parks and recreation, and
administration; and ongoing revenues including property tax,
real estate transfer tax, sales tax, utility user tax,
franchise tax, and other taxes to arrive at a net fiscal
impact on the City.
Dominion Project
KMA compared the fiscal impacts to the City of Culver City
associated with the proposed development of 1.80 condominiums
versus a 400, 000 square foot office/R&D project on a 11.6 acre
site in the Slauson-Sepulveda Redevelopment Project Area. The
revenues projected to accrue to the City included: property
taxes; sale taxes; utility user taxes; various licenses/fees;
and other municipal revenues. In cooperation with City
department heads, KMA also determined estimated increased
municipal costs associated with each development alternative.
Major costs analyzed includes fire, police, transportation,
and parks and recreation.
City of Long Beach
KMA estimated the Redevelopment Agency costs and revenues
associated with implementing a major retail/ entertainment
center and residential mixed-use project in downtown Long
Beach. The public costs included land assemblage, the
construction of public improvements and infrastructure. The
Agency revenues included ground lease proceeds, participation
payments, parking revenues, and property tax increment
revenues.
City of Long Beach
KMA estimated the City and Redevelopment Agency costs/revenues
associated with the development of 250 condominium units,
15,000 square feet of retail space and a 600 parking space
garage. The analysis included projections of both one time
and ongoing City and Agency costs and revenues.
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V. GRODMD LEASE NEGOTIATIONS
KMA has substantial experience in assisting public sector
landlords in ground lease negotiations. This experience •
allows KMA to provide consulting services which recognize the
unique perspective of a public sector owner of real estate.
City of commerce
The Citadel
KMA represented the City of Commerce as the ground -lessor for
a hotel, office and retail mixed-use project located on the
historically significant Uniroyal Tire property. KMA analyzed
the ground lease proposal from the Trammel Crow Company and
assisted the City in negotiating ground lease terms for this
factory outlet retail center, office and hotel project.
City of Long Beach
Long Beach Airport
KMA advised the City of Long Beach on the financial returns
likely to result from various ground lease proposals for
property at the Long Beach Airport. The most recent proposal
analyzed was for a 500,000 square foot corporate office
facility.
City of Phoenix, Arizona
City Center
KMA was selected to assist the City of Phoenix in the analysis
of developer proposals for a multi -phase, one million square
foot office project to be developed on property to be acquired
and ground leased by the City. KMA was a member of the City's
three person negotiating team which simultaneously negotiated
business letters from four national developers.
City of Santa Be springs
Heritage industrial Part
KMA assisted the City in developer selection and lease
negotiating for this multi -phase office and industrial park.
The project was developed under a long-term, participating
ground lease.
city of Santa Monica
KMA assisted the City in the selection of a developer and in
developer negotiations for a major waterfront hotel site in
the City of Santa Monica. The analysis included an assessment
of the hotel market, financial modelling, and assistance to
legal counsel in structuring the land lease.
Redevelopment Agency of Long Beach
Mixed -Use Project
KMA estimated the Redevelopment Agency costs and revenues
associated with implementing a major residential/ commercial
mixed-use project in downtown Long Beach. The public costs
include land assemblage, the construction of public
improvements and infrastructure. The Agency revenues include
ground lease proceeds, participation payments, parking
revenues, and property tax increment revenues.
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VI. COMPUTER CAPABILITIES
RMA has extensive experience in the design, development and
• application of computer spreadsheet and database models in
real estate, financial ad market analyses. These models and
programs typically serve as a technical tool for a variety of
analytical purposes; some examples and their applications are
described below.
Pro Forma Model
As a basic tool in performing financial analyses, this model
provides an estimate of development costs and operating
income/ expenses over a selected period, typically ten years.
The results are used typically to project potential
investor/developer returns (i.e., return on investments,
internal rate of return, etc.), identify gap financing, and
evaluate overall project financial feasibility. The pro forma
model is also used frequently for sensitivity testing, (i.e.,
to determine the impacts of input variable changes on project
results). Another application of this model is in evaluating
alternative deal structures for the purpose of negotiating
development agreements, ground leases, or other business
transactions.
• Sources and uses of Funds
This model is a variation of the pro forma model described
previously. It basically serves the same purpose as the pro
forma model, but the analysis is presented in a cash inflow
and outflow format. Thus, this model facilitates the amount
and timing of required funds or equity/project assistance
injections for the project.
Cost/Benefit Model
used primarily in performing cost/benefit analysis for public
entities, this model estimates potential public revenues to be
generated by a proposed development and examines the
associated potential public costs.
Redevelopment Project Implementation Model
This sophisticated cash flow model allows the user to
determine the cash flow implications to the Agency of
implementing up to 15 different developments. The program
begins with a portrayal of existing obligations and funding
sources and allows the addition of new developments-' costs and
revenues, future bond issues, etc.
• Trend Projection
This model is used for projecting future demographic and
economic growth trends in a market area. This information is
then extrapolated and used as the basis for projections of
future market conditions and to estimate future demand.
K EYS ER M A RS TO N ASSOCIATES INC.
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market Evaluation
This model is used to estimate the retail expenditures
potential of market area residents, office workers, visitors,
and other market support segments for a specific retail use. •
it is particularly helpful in projecting and testing the
respective capture shares required by a proposed use from the
applicable market support segments.
Retail Allocation model
This model is applied in retail trade area analyses to
identify the primary and secondary trade areas that could be
served by a proposed retail use. Based on an evaluation of
the relative strength of the competing retail facilities in
the vicinity of the subject site and the pertinent locational
factors, the model allocates the retail potential to various
facilities serving the trade area, including the subject site.
Land Use Database
This model primarily sets up a computerized database which
enables City staff to record and update land use inventory and
retail sales information within a specified area and to
monitor changes over time. This database system increases in-
house staff capabilities and facilitates the development and
evaluation of public strategies.
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KEYS E R MARSTON ASSOCIATES I N C.
V11, REFERENCES
The following individuals can describe the range of services
• that Keyser Marston Associates can provide:
Anaheim Redevelopment Agency
Mr. Richard Bruckner
Redevelopment Services Manager
Ms. Elisa Stipkovich
Community Development Director
210 South Anaheim Blvd., 10th Flr.
Anaheim, CA 92805
(714) 254-4300
Brea Redevelopment Agency
Ms. Susan Georgino
Redevelopment Services Director
Number One Civic Center Circle
Brea, CA 92621
(714) 671-4421
Commerce Redevelopment Agency
Mr. Justin McCarthy
Deputy Executive Director
• Mr. Lou Sheppard
City Administrator
2535 Commerce Way
Commerce, CA 90040
(213) 722-4805
Glendale Redevelopment Agency
Ms. Jeanne Armstrong
Director of Redevelopment
633 East Broadway, Room 201
Glendale, CA 91205
(818) 548-2005
Huntington Beach Redevelopment Agency
Ms. Barbara Kaiser
Deputy City Administrator/Economic Development
2000 Main Street
Huntington Beach, CA 92648
(714) 536-5582
Long Beach Redevelopment Agency
Ms. Susan Shick, Director of Community Development
• Mr. Fred Solomon, Redevelopment Bureau Manager
333 West Ocean Blvd., Third Floor
Long Beach, CA 90802
(310) 590-6570
KEYSER M A RSTO N ASSOCIATES INC.
Santa Ana Redevelopment Agency
Ms. Cynthia Nelson
Executive Director
20 Civic Center Plaza, 6th Flr. •
Santa Ana, CA 92701
(714) 647-5360
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KEYS ER M ARSTON ASSOCIATES INC.
RESUMES
KEYSER MARSTON ASSOCIATES I N C.
CALVIN E. HOLLIS II
senior Principal
Mr. Hollis has advised public and private participants in a wide •
variety of real estate projects since 1973. With extensive
experience in joint public/private transactions, he has played a
major role in the structuring of development agreements for major
retail, office, and residential projects. Mr. Hollis joined KMA in
1982 and is the co -manager of the Los Angeles office.
Mr. Hollis is vice chair of the Urban Land Institute's (ULI)
National Policy Council and member of the Institute's Membership
Committee, and the California Community Redevelopment Agencies
Associates (CRA) where he serves on the CRA Technical Advisory
Committee. Mr. Hollis has conducted seminars and addressed
conferences sponsored by the ULI, CRA, National League of Cities,
California Department of.Commerce, and similar organizations on the
topic of Developer Solicitations.
Mr. Hollis is a graduate of California State University, Los
Angeles in Economics.
selected Project Experience
Real Estate Advisory Services •
Central California Regional Medical Center (Fresno)
Currently advising the CCF4C in entitlement negotiations with the
City of Fresno for this $150 million regional medical center to be
developed in cooperation with the University of California, San
Francisco.
City of Phoenix
Advised the City in developer solicitation, selection and ground
lease negotiation for multi -phase 1 million square foot office
project.
City of Long Beach
Advised redevelopment agency in developer solicitation and
selection for 84 acre promotional retail center.
All Saints Episcopal Church (Pasadena)
Assisted this 3,000 member downtown Church in the exchange of
easement rights for long-term parking within a major mixed-use
project.
KEYSER M ARSTON ASSOCIATES INC.
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City of Commerce
Represented the City as lessor for a hotel, office and retail
mixed-use project.
City of Montebello
Represented the City in development agreement negotiations for a 30
acre retail project.
Lance-Kashian and Company (Fresno)
Advising this private development company in the financial
feasibility, entitlement, and infrastructure financing in this
1,000 acre business park.
City of Alhambra
Assisted the City in its negotiations to reestablish its auto
dealership "auto row". Six dealerships were relocated and/or
expanded.
• City of West Sacramento
Has analyzed the development economics of the Riverpoint and
Lighthouse Marina projects.
JMB Urban
Advised this national development company in seeking public
approvals and infrastructure financing for 1 million square foot
regional shopping center.
Public Finance
Fiscal Consultant Services - Mr. Hollis manages all the firms
fiscal consulting services. Recent assignments have included
financing for the Long Beach Redevelopment Agency, Santa Clara
Redevelopment Agency, Brea Redevelopment Agency, Pomona
Redevelopment Agency and the Santa Monica Redevelopment Agency,
totalling over $300 million in tax allocation financing.
Public/Private Financing - Mr. Hollis advised the Pasadena
• Community Redevelopment Agency in the structuring of a complex
multi -family financing including use of tax increment, mortgage
revenue bonds, Mello Roos bonds, and City Credit Enhancement.
K EYS ER M ARSTO N ASSOCIATES I N C.
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RICHARD L. BOTTI
senior Principal
Mr. Botti has extensive experience in financial feasibility •
analysis and disposition consulting. He has worked in the field of
real estate economic consulting since 1966, and has been affiliated
with KMA since 1975.
Mr. Botti is a graduate of the University of Michigan, Ann Arbor
and holds masters degrees in City and Regional Planning, University
of Michigan, and Business Administration, University of California,
Berkeley.
SELECTED PROJECT
Long Beach Redevelopment Agency
Mr. Botti is the principal real estate advisor to the Long Beach
Redevelopment Agency on projects ranging from the multi -use
theater/housing project opening this month to industrial properties
on the west side. Mr. Botti was instrumental in the adoption of
the planning/tenant guidelines for the revitalization of Pine
Avenue. •
City of Glendale/Glendale Redevelopment Agency
An advisor to the City since 1980, services have included market
analysis, developer selection, and negotiation for a series of
office, hotel, restaurant and entertainment development throughout
downtown Glendale. Mr. Botti has also been instrumental in the
adoption of the planning guidelines for downtown Glendale as well
as the identification of a city-wide retail strategy that is
currently being implemented.
Ontario Redevelopment Agency
Currently advising the City in the negotiation of a major retail
project to be anchored by high volume retailers and manufacturers'
outlet stores.
Burbank Redevelopment Agency
Principal real estate advisor to the City in the negotiations of
the 50 acre mixed-use Town Center including office, regional •
shopping center and hotel uses. Project includes the first west
coast IKEA store.
KkYS E R MARS TON ASSOCIATES INC.
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Brea Redevelopment Agency
Currently advising the Agency on a variety of projects including
completing negotiation on a 40 acre downtown multi -use project
comprised of 200,000 square feet of neighborhood retailing, a
specialty retail and theater component, and 500 units of rental and
ownership housing.
Nikko Capital
Currently advising the Japanese Investment Company in entitlement
negotiation for a retail and residential project in downtown San
Mateo.
Yarmouth Group
Analysis of market opportunities and resulting sales increases
resulting from the proposed expansion of a major regional shopping
center in San Diego County. Analysis included sensitivity of sales
to varying levels of rehabilitation/expansion. The analysis was
utilized by the owner to determine the level of additional
investment.
BCTC
Currently providing financial analyses and entitlement negotiation
services to this offshore -owned real estate development company.
The project includes a 280,000 square foot retail and entertainment
complex.
Aetna Realty Investors
Currently advising the client in the highest and best use of a 125 -
acre holding in Arizona. Land uses analyzed included regional
shopping center, promotional shopping center, office, hotel, and
residential.
K EYS E R M A RSTO N ASSOCIATES I N C.
KATHLEEN H. HEAD
Principal
Ms. Head, since joining KMA in 1983, has performed market and
financial analyses to assess the feasibility of a wide variety of
proposed real estate developments. In that role, she has assisted
clients in the negotiations of land disposition terms, including
participation agreements and public assistance mechanisms. Ms.
Head has also participated in the strategic planning process;
identifying the opportunities for near- to mid-term development,
and recommending implementation strategies.
Ms. Head is a graduate of the University of California, Los Angeles
and holds masters degrees in Business Administration and Urban
Planning from the University of California, Los Angeles.
Selected Project Experience
The Waterfront, Huntington Reach
Determined the reuse value of a 46 -acre parcel owned by the City of
Huntington Beach. Assisted the Agency in the negotiations related
to the disposition of the site for the subsequent development of
four first -quality hotels, 875 residential units, specialty retail
and athletic club facilities.
The Quad, Whittier
Determined the fair reuse value for the Quad regional shopping
center, which was redeveloped as a promotional center, including
over 500,000 square feet of retail space. Participated in the land
disposition negotiations and devised the Agency participation
structure.
City Center, Phoenix
Performed market evaluation for Class A office space in downtown
Phoenix. Assisted in drafting RFP for 1 million square foot civic
center development and 1 million
Analyzed financial implications
short-listed developers.
square foot private development.
of deal structures offered by
Antelope valley Regional Shopping Center, Palmdale
Market demand assessment for 650,000 square foot regional mall
anchored by three department stores. Prepared sales tax
projections to be used for infrastructure bond financing.
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• IBC Rezoning, Irvine
Performed market opportunities/ constraints analysis, fiscal impact
analysis, housing needs assessment and financial implementation
plan for the Irvine Business Complex Specific Plan.
Highway iii Corridor, Rancho Mirage
Assisted the Redevelopment Agency in establishing goals and
objectives for future development. Prepared market assessment to
identify opportunities for resort hotel, specialty retail,
neighborhood retail and office development. Evaluated fiscal
impacts of proposed development. Recommended an implementation
strategy to attract desired development.
Heritage Park, Santa re Springs
Assisted Agency in the ground lease negotiations for a 40 -acre
business park/industrial project. Projected City ground lease and
participation revenues over the lease period.
• Headquarters Relocation, 'South Coast Air Quality Management
District
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Recommended expansion strategy for the SCAQMD headquarters
facility. Analyzed the cost consideration of expansion on-site
versus relocation, identified potential relocation sites and
assessed the impacts of the current employment base.
Sports Arena, Santa Ana
Projected City costs and revenues associated with developing 20,000
seat arena. Quantified the cost differential associated with the
selection of different sites within the City. Participated in land
disposition negotiations with developer/operator. Developed City
participation formula.
KE YS E R MARS TON ASSOCIATES INC.
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PUBLIC CLIENT LIST
KEYSER MARSTON A S SOC I ATES I N C.lf�
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KEYSE R M A RSTON ASSOCIATES 1 NC.
Redevelopment Agencies
Long Beach
Santa Clara
Los Angeles
Santa Cruz
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Alhambra
Lynwood
Santa Fe Springs
Anaheim
Marin City
Signal Hill
Arcadia
Merced
South Gate
Bakersfield
Millbrae
South Lake Tahoe
Banning
Milpitas
South San Francisco
Belmont
Modesto
Stockton
Brea
Monrovia
Thousand Oaks
Burbank
Monterey
Torrance
Campbell
Morgan Hill
Upland
Capitols
Mountain View
Vallejo
Carlsbad
Napa
Victorville
Cathedral City
Oakland
Vista
Chula Vista
Oceanside
Watsonville
Claremont
Orange
West Covina
Commerce
Oxnard
West Sacramento
Concord
Palm Springs
Westminster
Costa Mesa
Palmdale
Yuba City
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Cotati
Covina
Pasadena
Pinole
Cities
Culver City
Pleasant Hill
Daly City
Pomona
Antioch
Davis
Portland, OR
Azusa
East Palo Alto
Provo, UT '
Bakersfield
El Cerrito
Rancho Mirage
Belmont
Emeryville
Redlands
Benicia
Escondido
Redwood City
Beverly Hills
Fairfield
Rialto
Boise, ID
Fontana
Richmond
Brisbane
Fremont
Riverside
Catpenteria
Fresno
Roseville
Chula Vista
Garden Grove
Sacramento
Cupertino
Glendale
Salinas
Danville
Glendora
San Berardino
Davis
Half Moon Bay
San Clemente
El Paso de Robles
Hawthorne
San Diego
Eugene, OR
Hayward
San Francisco
Escondido
Hercules
San Juan Capistrano
Eureka
Hollister
San Jose
Fairfield
Huntington Beach
San Leandro
Foster City
Indian Wells
San Pablo
Fremont
La Mesa
San Rafael
Fresno
La Mirada
San Ramon
Huntington Beach
Livermore
Santa Ana
Irvine
KEYSE R M A RSTON ASSOCIATES 1 NC.
Laguna Beach
Tualatin, OR
La Mesa
Tustin
Livermore
Vista
Long Beach
Walnut Creek
Los Angeles
Whittier
Mammoth Lakes
Menlo Park
Other Governmental
Mill Valley
Agencies
Milpitas
Modesto
Alameda County
Mountain View
Arcadia Unified School
Moreno Valley
District
Novato
BART
Oakland
. Caltrans
Oakdale
California Coastal
Orinda
Conservancy
Pacifica
Contra Costa County
Pasadena
Glendale Unified School
Palmdale
District
Rancho Mirage
Los Angeles County
Redondo Beach
Los Angeles Community
Redwood City
College District
Richmond, VA
Los Angeles County
Somas
Community
San Clemente
Development
San Carlos
Commission
San Diego
Los Angeles County
San Fernando
Transportation
San Gabriel
Commission
San Jose
Marin County
San Leandro
Metropolitan
San Marcos
Transportation
San Pablo
Commission
Sand City
North County Transit
Santa Ana
District
Santa Cruz
Oakland Unified School
Santa Monica
District
Santa Rosa
Pasadena Chamber of
Santee
Commerce
Seal Beach
Pasadena Unified School
South San Francisco
District
Sunnyvale
Placer County
Thousand Oaks
Port of Los Angeles
Tigard, OR
Port of Oakland
Torrance
Port of Portland, OR
Port of Redwood City
Port of San Francisco
Port of Seattle, WA
Richmond Unified School
District
Sacramento Office of
Parks & Recreation
San Diego County
San Diego Metropolitan
Transit Development
Board
San Diego Housing
Commission
San Diego State
University
Foundation
San Marcos Unified
School District
San Mateo County
Harbor District
Santa Clara County
Santa Cruz County
South Coast Air Quality
Management District
Southeast Economic
Development
Corporation of
San Diego
State of California Office
of Real Estate & Design
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