Loading...
The URL can be used to link to this page
Your browser does not support the video tag.
Home
My WebLink
About
22 - Marinapark Development Proposals
�lEw�Rr J T 9 C,<IL00.1��P CITY OF NEWPORT BEACH COMMUNITY AND ECONOMIC DEVELOPMENT PLANNING DEPARTMENT 3300 NEWPORT BOULEVARD NEWPORT BEACH, CA 92658 (714) 644 -3200; FAX (714) 644 -3250 Hearing Date: Agenda Item No.: Staff Person: REPORT TO THE MAYOR AND CITY COUNCIL August 22, 2000 22 Sharon Z. Wood (949) 644 -3222 SUBJECT: Supplemental Information in Response to Request for Proposals for Future Use/Development of Marinapark SUGGESTED Provide direction to staff on continuing the selection process. ACTION: The City Council conducted a preliminary review of the proposals in response to the City's RFP for the Marinapark property on May 9, 2000. This review included an economic analysis of the eight proposals the City had received. The consultant retained to conduct the economic analysis recommended that the City request additional information from and continue consideration of four of the proposals, but the Council chose to invite all proponents to provide the additional information. A summary of the original proposals and the proposal guidelines for additional information are attached. Five of the original proponents submitted additional proposal information for the City's consideration. They are RHC Communities, Sutherland Talla Hospitality, Terra Vista Management, Ayres Hotel Group, and The Bendetti Company. This information and the original proposals are included in the City Council packets, and are available in my office, the City Clerk's office and the Central Library. The City Council also received a letter (attached) from Ficker & Stevens, suggesting an alternative approach to deciding the future of the Marinapark site. The Parks, Beaches and Recreation Commission submitted the attached memorandum reaffirming their concerns regarding the need for lighted tennis courts, the City's sailing program and the Balboa Community Center. Finally, the Girl Scout Council of Orange County submitted the attached letter supporting retention of the Neva B. Thomas Scout House. Review of New Information After review the five packages of additional information in light of the proposal guidelines, staff determined that only Sutherland Talla Hospitality provided all of the requested information. The most significant items missing from the other submittals are a dimensioned site plan and a market feasibility analysis. These are significant items, since questions were raised in the last review regarding the ability of the site to accommodate the uses proposed, and the market feasibility of the uses. Sutherland Talla Hospitality has provided a dimensioned site plan based on maps the City provided to all the proponents. The new site plan shows refinements from the original submittal to provide parking per City standards as well as view corridors. These changes have resulted in a reduction from eight to two tennis courts, although the public playground and the Girl Scout house remain. The number of hotel rooms remains 156, and Regent International Hotels is still identified as the operator. A market feasibility study prepared by PKF Consulting has been provided, and it supports the proponent's projections of room rates and occupancy levels, taking into account both current and projected competitive supply of hotel rooms. The economic analysis of the original proposals concluded that a hospitality use would generate the maximum amount of tax revenue per acre. The dimensioned site plan and market feasibility study are of less significance for Terra Vista Management than the other proponents. Since this proposal is to retain the existing uses (with an alternative to add 12 mobile home sites), there is little question whether the uses will fit on the site or whether there is sufficient market demand for the uses. The economic analysis of the original proposals identified this proposal as one that could significantly increase City income with very low market risk. However, City financing of the alternative is proposed, which would consume the increased ground lease revenue for seven years at a 9% interest rate. This proposal is the second most responsive to the RFP and request for supplemental information. RHC Communities has identified Mission Inn Hotel Corporation as the operator in this submittal. RHC also has noted that they are the developer of the recently approved Treasure Island project. In addition to a 100 -room hotel, this proposal includes a two -story parking structure, retention of the mobile home park and the Girl Scout house (with $100,000 for its rehabilitation), a waterfront location for the American Legion, and open space. The lack of a dimensioned site plan is significant for this proposal, since it is difficult to determine how all these uses can fit on the site. There is no market feasibility study to support the hotel revenue projections. Financing of the parking structure is proposed to be through a sublease to AMPCO and parking fee revenue; staff would want to know more about this arrangement if the Council chooses to pursue this proposal. Ayres Hotel Group is proposing an 85 -suite hotel and 40 single - family lots. Without a dimensioned site plan, it is difficult to know whether this number of residential lots could be developed. No market feasibility analysis has been provided to support the revenue projections for either use, and the 10 -year projection uses a very optimistic hotel occupancy rate. The economic analysis of the original proposals found that residential use has a low market risk and would generate a high amount of ground lease per square foot, if it is allowed after resolution of the tidelands boundary. The specifics of the land payment proposal are unclear to staff, however, as subleases on the residential lots are proposed, with rent paid to the developer until improvement costs are paid. There also is an option for sale of some single - family lots. The Bendetti Company proposal was the most complex of the original submittals. The current proposal eliminates the retail and office, and freestanding restaurant and parking structure components. A 130 -room hotel, 32 new single family units (decreased from 44) and retention of the mobile home park and American Legion remain, along with a newly proposed tot lot and tennis court. Edward Thomas Companies (Shutters, Casa del Mar) has been identified as the hotel operator, and Warmington Homes as the residential developer. Because of its complexity, this is the proposal that raised the most questions of physical and market feasibility in the earlier review. A dimensioned site plan has not been provided, and there is reference to "informal market research" rather than the , Page 2 requested market feasibility study. The submittal notes in a few areas that more detailed information • is being prepared, and staff finds this to be the least complete of the packages received. Status of Legal Issues As directed by the City Council, the City Attorney has begun the process of resolving the tidelands boundary with the State Lands Commission, but we do not have an answer on this issue yet. Staff has engaged a consultant to prepare the relocation impact study that is required before the City Council makes a decision on reuse of the mobile home park site. The study is expected to be complete by August 25. The City Attorney believes that the Council may narrow the field of proponents under consideration and begin more detailed discussions with one or more of them before the study is completed, as long as no decision on reuse is made. OPTIONS FOR CITY COUNCIL CONSIDERATION The City Council could choose to wait for resolution of the two legal issues before proceeding further on selecting a party for future use of the Marinapark site. This would provide more guidance on the impacts of removing the mobile home park, and on the feasibility of retaining it or developing new residential units. However, waiting for any indication of the City's interest in their proposals could make it difficult for the proponents to retain commitments from their team members, operators and sources of financing. • Entering into more detailed discussions with parties proposing different uses could keep the process moving, while providing the City with flexibility to react to the resolution of the two issues noted above. For this approach, staff recommends Sutherland Talla Hospitality, with Terra Vista Management as the proposal for an alternative use. They have provided the most complete information, and between them propose uses that could be feasible under any resolution of the legal issues. If the City Council believes that a hotel, and not residential use, is the appropriate future use of the site and wishes to adhere strictly to the original RFP and request for additional information, the Council could direct staff to enter into discussions with Sutherland Talla Hospitality. This would include more detailed review of the project economics, financing plan, development schedule, site plan, and the City's desire to retain community facilities on the site. SHARON Z. WOOD Assistant City Manager Attachments: 1. Proposal Summary 2. 3. Proposal Guidelines Letter from Ficker & Stevens 4. Letter from Parks, Beaches and Recreation Commission 5. Letter from Girl Scout Council Page 3 • SUPPLEMENTAL REPORT TO THE MAYOR AND CITY COUNCIL SUBJECT: Supplemental Information in Response to Request for Proposals for Future Use/Development of Marinapark After the report for this item was issued, staff received a telephone call from Dennis Lahey, Commander of the American Legion Post. He had not seen my letter of May 31, stating that additional information should be provided if the proponent wished to continue in the process. Because the American Legion is proposing no physical changes, but only a long -term lease for their existing facilities with "appropriate economic adjustments," they did not feel that they needed to submit additional information. Commander Lahey submitted the attached letter explaining the misunderstanding, and I agreed to send the original Legion proposal to the City Council. Their proposal is included with the original proposals in the supplemental Council packets. It does not propose any specific lease terms, so it is difficult to analyze from an economic perspective. Staff would like to note that the American Legion proposal could be combined with any of the others, since all of the other proposals include retention of the Legion on its current site or another location within the Marinapark site. SHARON Z. WOOD Assistant City Manager CITY OF NEWPORT BEACH Hearing Date: August 22, 2000 ee J? COMMUNITY AND ECONOMIC Agenda Item: 22 - DEVELOPMENT No.: • , � <•eon "' PLANNING DEPARTMENT Staff Person: Sharon Z. Wood 3300 NEWPORT BOULEVARD (949) 644 -3222 NEWPORT BEACH, CA 92658 (714) 644 -3200; FAX (714) 644 -3250 • SUPPLEMENTAL REPORT TO THE MAYOR AND CITY COUNCIL SUBJECT: Supplemental Information in Response to Request for Proposals for Future Use/Development of Marinapark After the report for this item was issued, staff received a telephone call from Dennis Lahey, Commander of the American Legion Post. He had not seen my letter of May 31, stating that additional information should be provided if the proponent wished to continue in the process. Because the American Legion is proposing no physical changes, but only a long -term lease for their existing facilities with "appropriate economic adjustments," they did not feel that they needed to submit additional information. Commander Lahey submitted the attached letter explaining the misunderstanding, and I agreed to send the original Legion proposal to the City Council. Their proposal is included with the original proposals in the supplemental Council packets. It does not propose any specific lease terms, so it is difficult to analyze from an economic perspective. Staff would like to note that the American Legion proposal could be combined with any of the others, since all of the other proposals include retention of the Legion on its current site or another location within the Marinapark site. SHARON Z. WOOD Assistant City Manager August 18, 2000 Sharon Wood Assistant City Manager 3300 Newport Blvd. Newport Beach, CA 92663 Dear Sharon: r�FG1, The American Legion NEWPORT HARBOR POST 291 215 15th Street Newport Beach, CA 92663 (949) 673 -5070 Thank you for our conversation on the phone yesterday. Based on that I wanted to clear up some misunderstandings on our part. The main one is to request that you change the point of contact from Paul Curtis to Dennis Lahey as Commander of the American Legion. I thought we had already accomplished that but it • appears we have not. That might explain a lot. I was told that we needed to submit an update to our proposal if there were any changes. There are none so we did not submit any new information. I have not seen your letter. You said yesterday that your letter said to submit if we wanted to continue to be considered. I can understand now why it appeared in the paper yesterday that we are no longer being considered. You were kind enough to suggest I write this letter and you would include our proposal in the package to the Council Members today. Thank you for that. Might that also explain why we have not received the two year extension of the lease that the City Council approved for both Marina Park and us? If so, I would be happy to pick up a copy and get it approved by our membership and put that whole issue behind us. Sharon, thank you for helping to work this out. Sincerely, P m pmander American Legion Post 291 cc: Council Member Tod Ridgeway • June 15, 2000 i Stephen R. Sutherland Sutherland Talla Hospitality 4500 Campus Drive, Suite 500 Newport Beach, CA 92660 Dear Mr. Sutherland: D Girl Scouts. Girl Scout County of Orange County 1620 Adams Avenue Costa Mesa. CA 92626 T714 979.7900 F714 850 -1299 g irlscouts @g scoc.org With the authority of the board of directors of the Girl Scout Council of Orange County, I am writing to share with you our great concern regarding the potential loss of the Girl Scout program center (Neva B. Thomas Scout House) at 1700 W. Balboa Boulevard. We greatly appreciate your including the Girl Scouts in your proposal for the future use of the Marinapark property. In revising your proposals for the city, we urge you to continue to consider the impact the loss of this facility would have on the Girl Scout program. We ask that you keep the needs of our girls in mind and work to include the Girl Scout facility ---or one of like appropriateness —in the plans. This facility has been a major part of Girl Scout life in the Newport Beach area since Dec. 1, 1947 —the beginning date of the first lease. Over the years, thousands of Girl Scouts and their families have had positive experiences and have fond memories of their experiences there. In Newport Beach there are currently more than 900 Girl Scouts in 65 troops, as well as more than.300 adult members. No other local facility offers comparable accommodations to meet the needs of Girl Scouts, especially for weekend and overnight use. The center also is used by Girl Scout troops from outside of the city, and the • Girl Scout council has always worked cooperatively to make the center available to community groups as needed. Additionally, the center provides much - needed storage space for equipment and program supplies. The Girl Scout Council of Orange County is amenable to the relocation of the Girl Scout facility within the Marinapark development. In fact, any possibility of beach access for Girl Scout boating programs would be particularly advantageous since it may prove necessary for the Girl Scouts to relocate their boating program from the Newport Dunes. We also support the retention of the program center because we believe that a profound and positive message is communicated to the Girl Scouts of the Newport Harbor community when they are regarded as important enough to have a least one facility that is primarily for their use —such as the Boy Scouts have in the Sea Base. We would welcome any opportunity to meet with you and discuss specifies of how our program center needs could be mutually beneficial. Please feel free to contact Diane Smith of the Girl Scout staff at (714) 979 -7900, ext. 315. I thank you for your consideration in this matter and hope you will support the Girl Scouts to the fullest extent possible. Sincerely, Christine Shingleton President, Board of Directors A UnAed Way Agency Where Girls Grow Strong REGENT INTERNATIONAL HOTELS August 14, 2000 Mayor John Noyes Members of the City Council City of Newport Beach 3300 Newport Boulevard Newport Beach, CA 926.63 Dear Mayor Noyes and City Council Members: I would like to express to you the continued interest that Regent International Hotels has in being part of Stephen Sutherland's exciting project in Newport Beach. Regent looks forward to being very involved throughout the development process. As the hotel manager, we will be working closely with Mr. Sutherland to ensure that the resort meets both our 5 -star luxury standards as well as those requirements of the City. We have reviewed the PKF market study and are in agreement that the project is ideally suited for Balboa Peninsula and that it will be highly competitive in the Southern California resort hotel market. We have completed a pro forma based on the PKF projected occupancies and average daily rates and believe the project has the greatest opportunity for success. If you have any questions as we proceed through the planning and development phases, please do not hesitate to contact me in Minneapolis at 612 - 212 -0515 or Ruth Ormsby, Director of Development, at 949 - 760 -0253. We look forward to being a part of this dynamic project. Sincerely, Luis C. Acosta Vice President, Development cc: Council Member Gary Adams Council Member Jan Debay Council Member Norma Glover Council Member Dennis O'Neil Council Member Tod Ridgeway . Council Member Tom Thompson P.A H(.SON P \R66'AN. I'. u. !SU\ 391.59. N11 S C F:. X 1.11 (.(5. A71\ \I.S I)T\. LS.\ *F. L: (61 _2 1 2L" -:1301) IAX: (61'21 ^_12 -3330 1NTICN-N F: "r: pha"J'. 0 August 15, 2000 Mr. Dennis Lahey Commander American Legion Post 291 215 15"1 Street Newport Beach, CA 92663 Ref: New American Legion Location. Dear Mr. Lahey, As per our conversation of this morning, I am forwarding to you the following BINDING LETTER OF INTENT. Sutherland Talla Hospitality has submitted a proposal to the city of Newport Beach calling for the development of a 156 -room luxury resort to be located on the site bordering 15' Street, 18' Street, Balboa Blvd and Newport Bay in the City of Newport Beach. The site is known as the American Legion and Marina Park Site. In an effort to lessen the level of uncertainty that legion members are currently experiencing and to carry out in a responsible manner verbal commitments previously made to you and other Legion officials, I here -by commit to you the following: In the event the City of Newport Beach approves plans submitted in our proposal dated February 4, 2000, and our July 17, 2000, submittal with additional information we here -by commit to build a new waterfront legion structure matching the square footage of your existing facility, on the 18' Street end of the property. Sutherland Talla Hospitality will complete construction of the building, build out the interior area including kitchen with equipment, complete the site work including landscape and match your existing on -site parking availability. Once the new Legion hall is completed, Sutherland Talla Hospitality will dedicate the structure and site improvements to American Legion Post 291. In addition, we will sub -lease that portion of the site to the Legion for the amount of $1.00 (one dollar) per year for a period equal to the term of the lease Sutherland Talla Hospitality signs with the City of Newport Beach. 4500 Campus Drive, Suite 500, Neil port Beach, CA 92660; (949) 757 -1662 Fax (949) 660 -1252 If at some point in time the Legion closes that post, the improvements and sub -lease shall revert to Sutherland Talla Hospitality. The Architectural Style as well as the landscape design will closely match that of the resort. It must be understood by all parties, and become a part of this document, that without required full approvals and permits from all local, state and federal agencies, this "Binding Letter of Intent" shall become invalid. On behalf of Sutherland Talla Hospitality, I look forward to working with you to satisfy the needs of the Legion while allowing our Regent Newport Beach Resort project to move forward. Sin rely, Stephen . Sutherland Principal artner A 0 0 prTrAr -kW" T 1 c� a c = ° z ° z - „ c h p @ O o C C C L O a O N ld o m 8� qCu i z Y 0000 °O VU O O O w °End. _ „ 4 > m.. ° c y°, m9 orm °Em -a w ~ c a e ~ O I � ON g u � ° N.n N.n c o °o E m 2- ° c c'$ E c a c'qo 8080 °o v V o 0800 0080 a _ o ° o T o a q o e m a z Sg � aSa s °o ° E q z„ z„ w z w c o g u u v ,° E. E _ ? E = = ' S 22 ° °- n a 5 n - E '_-° - E o ff v `o g c„ o g o -° u v@ v u" E o u= ' m 'ic °' ar $ Q 2 :E = „ q$ vv „ MO „ v � m e m ° ' 'm n > = ` 5 � m' 8 ` ' - `°” c „ E c $ u c E m - �„ :vim _ 'G = "s ° 6 = c° c = v " -88a ��a 005 spa$g„ � Em s c @ >y `m "vim u` 3 c° o i o o D E `o_ v a° 8 v_ 71 A a` _ o N m N E N - • CL j w 0 City of Newport Beach Proposal Guidelines A. Identification AT1FAt,H1 1E-b i a- Name of development entity Ownership structure of proposed project (corporation, partnership, etc.) Identification of Developer's team including engineer, architect, builder etc. Project manager - phone number of individual assigned to accomplish the day-to- day tasks 5. Name of operator(s) of hotel and other uses, if other than development entity 6. Identify the development project that your firm is most proud of, its location, your firms role in the development, the primary lender, financial partners and consulting team. 7. Describe your familiarity with tidelands requirements B. Project Description Parcel sizes 2. Project description - building sizes and function, dimensioned site plan, amenities, coverage, view corridors 3. Projected retail sales, transient occupancy and property tax for next three years 4. Cost and revenue proforma illustrating project economics 5. Comparables to support project proforma, market feasibility analysis 6. Development schedule 7. Financing Plan, sources of equity, debt financing amount and sources 8. Tenant commitments/ letters of interest, if any C. Ground Lease/Sale Terms 1. Describe in detail requested ground lease terms and /or sale terms commencement of payments/ closing schedule 2. Discuss form of lease guarantees, need for subordination 3. Discuss pre - development timing 4. Describe any required pre - leasing needs and marketing time frames p7fKrh/tG�uT_ 3 Ficker & Stevens 301 Shipyard Way, Newport Beach, California 92663 949.723.7780 Dear Ladies and Gentlemen of the Council, As you know, Bill Ficker and I are one of the groups that have made a proposal for the Marina Park Project. We have been working with Sharon Wood who has been very helpful. Unfortunately, the direction that we have taken does not fit your RFP format. I'm taking this opportunity to communicate with you directly because we think the city has a better way to • approach this very complicated and important situation. This property is one of the remaining major assets that the City controls so it is very important that it be developed with long -range city needs in mind. Bill and I have been closely involved with Newport Beach for over eighty years, between us, most particularly focused on waterfront property and activities, so we feel that we have a good grasp of what makes this city so great. It is our belief that the entire selection process has one or more major flaws. Essentially what has been done is to say to the business community "Give us your ideas and what you're willing to pay" as the basis for the ultimate selection process. We think this is the wrong way to go about it and urge you to scrap everything to date and start over in a different direction. It is our belief that the city should take the lead and determine what is in the best interest for . the community at large instead of reacting to others. Hopefully, the end result will produce substantial revenue, but the plan that you determine to serve Newport best may not /7 11 i I `- 0 Date July 10, 2000 Copies Sent To. ay or o until Member anager ❑ Attor ey Honorable Members of the City Council : ui City of Newport Beach L City Hall rG�bl6! A01 3300 Newport Blvd. p -. Newport Beach, CA 92663 Dear Ladies and Gentlemen of the Council, As you know, Bill Ficker and I are one of the groups that have made a proposal for the Marina Park Project. We have been working with Sharon Wood who has been very helpful. Unfortunately, the direction that we have taken does not fit your RFP format. I'm taking this opportunity to communicate with you directly because we think the city has a better way to • approach this very complicated and important situation. This property is one of the remaining major assets that the City controls so it is very important that it be developed with long -range city needs in mind. Bill and I have been closely involved with Newport Beach for over eighty years, between us, most particularly focused on waterfront property and activities, so we feel that we have a good grasp of what makes this city so great. It is our belief that the entire selection process has one or more major flaws. Essentially what has been done is to say to the business community "Give us your ideas and what you're willing to pay" as the basis for the ultimate selection process. We think this is the wrong way to go about it and urge you to scrap everything to date and start over in a different direction. It is our belief that the city should take the lead and determine what is in the best interest for . the community at large instead of reacting to others. Hopefully, the end result will produce substantial revenue, but the plan that you determine to serve Newport best may not produce the same revenues as a Hotel. However, as you well know, we have the mandates of the Coastal Commission, State Lands and others that make community needs more important than revenue in most cases. The present RFP format leads to a determination of the best of the commercial proposals from a few people whereas the broader potential benefits for the use of the property to the community at large is perhaps overlooked. For example: The reality is that most of the marine service businesses in Newport Beach are in jeopardy. This is no secret and it has been slowly eroding our ability to properly service our boating community over a number of years and is changing our community environment, from a water oriented marine residential community to a Jiffy -Lube mentality. The land owners who lease to shipyards and other support facilities that not only serve the boating public but also provide an important element of our harbor environment, will keep disappearing because of increasing environmental concerns and the economic reality that • they cannot afford to pay the ground rent that other users will. This will be an unfortunate and tragic loss as they move out one by one. Another example is the proper support for those people who rent the public moorings. In large part, they have never had land side facilities available to them and generally have no place to park their cars, use toilet facilities, do their laundry, etc. This is not a healthy or satisfactory solution. We feel it is incumbent upon the city to change this and in one fashion or another make parking, storage for dinghies, showers, and adequate trash disposal facilities available and mandatory for the occupancy of these moorings. To do all of this obviously requires some land and investment. We feel that this is a typical example of things that the city should be doing with its land. Marina Park is an ideal location to provide support for a large number of the moorings. It is also an ideal location for the creation of a marina service center, including haul -out facilities, space for marine service operations, etc. The Seawall adjacent to the Cannery Restaurant is serving as a City Dock for a number of boating needs but is not a good location and poses problems when barges or large boats come into the Rhine to use it. Marina Park could fill this need. There are numerous other important demands that need to be met. Bill and I feel strongly that the Marina Park property should be utilized for a number of these important activities. We think they are more important to Newport Beach than another Hotel or preservation of a mobile home park serving a small group of people, or any of the other uses currently proposed. What we suggest is that the city cancel the RFP and hire a consultant who can properly evaluate the broader needs and possible uses of this important property. This consultant would work to interview and analyze the ideas and desires of various groups including marine service companies, shipyards, environmentally sensitive groups, and waterfront landowners, including the residential community at large. We think it would be of great value to the council in your deliberations. Upon acceptance of the consultant's report, then you would be in a position to issue a specific RFP or to undertake development yourself and make this property do a multitude of tasks. We are including a very simplistic sketch of . one approach that would: A) Preserve the American Legion and the Scouts. B) Provide marine service facilities that can be rented out at reasonable rates C) Preserve the beach. D) Provide support facilities for the mooring users, including parking, dinghy storage, restrooms, etc. E) Provide up to 1100 lineal feet of additional guest slips that would serve visitors to our harbor (a much needed service). F) Provide several attractive restaurant locations to enable local residents as well as visitors to enjoy a truly marine waterfront environment. G) Preclude the need for any dredging or need for additional bulk heading. H) Provide a public recreation area including a relocated children's play area. 1) Protect harbor vistas. J) Preserve the tennis courts. 0 K) Provide parking to meet code. Q Create a public yacht club (a first). M) Provide haul out for boat repair. N) Increase the beach area. We respectfully recommend that the council consider this alternative approach in your deliberations. The multitude of facilities and services cited above are much needed and will serve as a valuable asset for the public. Our belief in this general approach is the reason that we are unable to draw a definitive plan because it Is our belief that the right plan will evolve after a consideration of the needs of all of the elements above. The attached sketch is intended to show you how it might work, but could and would change after public input. We urge your consideration of this proposal. Richard S. Stevens L_J d William P. Ficker LEGEND IDENTIFICATION 1. American Legion 2. Not a part of this project 3. Public Y.C. and facilities for slips & offshore moorings 4. Dry storage 5. Float and landing for offshore moorings 6. Recreation and play area 7. Scouts - Boy and Girl 8. Tennis Courts -4 Parking Under 9. Retail 10. Restaurant 11. Retail 12. Restaurant 13. Retail 14. Water and beach sports 15. Parking -two story 16. Boatslips - 900 LF 17. Boatslips - 610 LF 18. Shipyard 19. Existing slips Reference Total AREA (SF) PARKING 7,500 50 5,400 35 irk 5,000 20 8 7,500 25 5,000 50 2,500 10 6,500 75 7,000 25 4,500 30 15 10 20 10 50,900 SF 393 Note total parking shown = 404 FICKER / STEVENS - CONCEPT PLAN 0 0 CJ L r -I 0 tW W LU LU • 14 1 1:3 lk ------------- . . .................... ....... . fo�l �, Q .. r x r z w H z w w w NJ MI ys s i BALBOA BOULEVAt or a ii 0 is iiiiillS LL LL LL V Z LL LL LL LL LL V Z LL LL Cityof Newport Beach COMMUNITY SERVICES July 17, 2000 P.O. BOX 1768, 3300 NEWPORT BLVD NEWPORT BEACH, CA 92658 -8915 Sharon Wood, Assistant City Manager City of Newport Beach 3300 Newport Boulevard Newport Beach, CA 92660 Dear Ms. Wood: i} TACtWe�L'-r �( PHONE 949.644.3151 FAX 949 - 644.3155 The Parks, Beaches and Recreation Commission urges you and the City Council to include as a high priority, parks, public recreation facilities and open space in the consideration of the the future uses of MarinaPark. The MarinaPark site is a critical hub in the City's recreation programs. The highly used facilities include: • 4 tennis courts (two, lighted) • 1 tot lot • 1 half basketball court 1 Community Center (approximately 2,760 square feet) • 1 Girl Scout House (approximately 3,000 square feet) • 2 sailing bases - one at 18`h Street; one at 16th Street. The Parks, Beaches and Recreation Commission have the following major concerns about the redevelopment of this site: 1. The City has only four lighted tennis courts in the entire City. Losing the two lighted courts at this site would be a critical loss. Lighted tennis courts were identified in the supporting documents of the Recreation and Open Space Element as one of the "most requested public recreational facilities." Revenues generated by tennis classes (at these courts only) are in the range of $15,000 annually. 2. The City's entire sailing program operates from the beaches at 18`h and 16`h Streets. Losing the ability to operate City sailing programs from these beaches would displace over 200 youth each summer. Annual revenue generated by sailing classes is approximately $60,000. 3. The Balboa Community Center is home to dance and martial arts classes, as well as other community functions. It will house a multi - disciplinary after - school program this fall, modeled after the successful Mariners KidScene program. Losing a valuable community center would have a significant negative impact on peninsula residents. Groups who currently utilize the Balboa Community Center and the Girl Scout House would be better served by a well designed Community Center. Since the fall of 1999, 35 different classes have been conducted at the Balboa Community Center, Las Arenas Tennis Courts or at the Sailing Bases. The needs of the community were outlined in the proposal previously submitted by the Parks, Beaches and Recreation Commission. The Commission urges you to consider the above enumerated concerns. Sincerely, Val Skoro, Chair Parks, Beaches and Recreation Commission 0 0 One 15, 2000 Mayor John E. Noyes Newport Beach City Hall P.O. Box 1768 Newport Beach, CA 92658 -8915 Dear Mayor Noyes: h-1 TACthrE-A) T Girl Scouts. ce •AN I' ', o ' 6 Girl Scout Council of Orange County 1620 Adams Avenue Costa Mesa, CA 92626 T714 979 -7900 F714 BSO -1299 g lrlscouts @g scoc.o rg With the authority of the board of directors of the Girl Scout Council of Orange County, I am writing to share with you our great concern regarding the potential loss of the Girl Scout program center (Neva B. Thomas Scout House) at 1700 W. Balboa Boulevard. As you review proposals for the future use of the Marinapark property, we urge you to consider the impact the loss of this facility would have on the Girl Scout program. We ask that you keep the needs of our girls in mind and work to include the Girl Scout facility —or one of like appropriateness —in the plans. This facility has been a major part of Girl Scout life in the Newport Beach area since Dec. 1, 1947 —the beginning date of the first lease. Over the years, thousands of Girl Scouts and their families have had positive experiences and have fond memories of their experiences there. In Newport Beach there are currently more than 900 Girl Scouts in 65 troops, as well as more than 300 adult members. No other local facility offers comparable accommodations to meet the needs of Girl Scouts, especially for weekend and overnight use. The center also is used by Girl Scout troops from outside of the city, and the Girl Scout council has always worked cooperatively to make the center available to community groups as needed. Additionally, the center provides much - needed storage space for equipment and program supplies. The Girl Scout Council of Orange County is amenable to the relocation of the Girl Scout facility within the Marinapark development. In fact, any possibility of beach access for Girl Scout boating programs would be particularly advantageous since it may prove necessary for the Girl Scouts to relocate their boating program from the Newport Dunes. We also support the retention of the program center because we believe that a profound and positive message is communicated to the Girl Scouts of the Newport Harbor community when they are regarded as important enough to have a least one facility that is primarily for their use —such as the Boy Scouts have in the Sea Base. I would appreciate the opportunity to meet with you to discuss the concerns of the Girl Scouts and the direction of the Marinapark development. I will phone your office shortly to arrange an appointment. In the meantime, I thank you for your consideration in this matter and hope you will support the Girl Scouts to the fullest extent possible. Sincerely, Christine Shingleton President, Board of Directors A United Way Agency 00.0 0 [k [ '2. 0 K � m o S 3 %here Girls'Grow Strong w AYRES HOTEL GROUP A Y R E S SINCE 1905 Marina Park- Proi)osed Hotel/Residential Development by the Ayres Group COt'NTRY INNS & StTITS 13T' J1YRES Alpine Cardiff by the Sea Corona Corona West Costa Mesa Diamond Bar Grapevine Ontario Airport Ontario of the Mills Mall Orange San Clemente Yorba Linda 355 Bristol Street Suite F Costa Mesa California 92626 Office: 714. 549. 0300 Facsimile: 714. 850. 0302 www.countrysuites.com Ayres Hotel Group http://www.countrysuites.com/ahgroup.html ■ ■ Born of the needs and wishes of actual leisure and business travelers everywhere, the Ayres Hotel Group, founded in 1984, have designed and built an ensemble of European -style boutique and rustic Western ranch -style hotels (a suite of suites, as it were), offering homelike comfort and first-rate service to its patrons, all at incredibly reasonable prices. This personal attention and hands-on l L ORo o management style has made the Ayres Hotel Group and its X "a F s yw,F , �, Q, signature "Country Inn & Suites" hotels synonymous with ■-_-_--. _ ___� _._ .._.._■ excellence in hotel accommodations, offering the perfect blend of cleanliness, service and value. The idea behind the Country Inn & Suites chain is simple -- provide the business and pleasure traveler with the best of all possible worlds. Each and every hotel in the chain offers the elegance and ambiance of Europe's finest hotels and imis, blended with old-fashioned warmth, friendly hospitality and a dedication to personal service. All guests are pampered with classic furnishings, meticulous housekeeping, airport locations perfect for both corporate and leisure destinations, complimentary refreshments and every imaginable modern convenience necessary for a successful and satisfying stay. Many Country Inn & Suites locations also feature fitness and relaxation facilities, such as workout rooms, Jacuzzis and swimming pools. The Ayres Group has been able to achieve this level of success at providing their guests with these fine hotels by applying four generations of family experience and dedication to the task. In the early 1900's, Frank Ayres came to California from Ohio with his wife and son to explore the possibilities of the real estate market. As time passed, Frank and his son, Donald (later to become Donald Sr.) formed their own land development company, focusing on the Los Angeles and Santa Monica areas. Fueled by the post -World War II housing boom of the 1950's, the company grew in leaps and bounds, and, just shy of its Golden 50th Anniversary, took on a new partner -- Don Ayres, Jr. -- who is the chairman of the Ayres Hotel Group today. And Don Jr. has made sure that every division is competently and professionally handled in the true family tradition: his son Don Ayres III is vice president of all hotel group operations; son Doug Ayres is vice president of development for the hotel and residential divisions; son Bruce Ayres handles overall operations of all the Ayres diverse business interests, including the self -storage facilities, land acquisition and processing, commercial centers, as well as hotel and residential real estate divisions; and daughter Allyson Ayres brings her incredible creative talents to bear as interior designer for the entire hotel chain. The Ayres Group strives to be forever recognized for answering the needs of its guests, as well as the communities surrounding the location of each hotel. To ensure this family tradition of service excellence, the Ayres Group maintains its hands-on approach to hotel management by personally visiting every hotel on a constant basis, guaranteeing you, their guest, the finest experience available from a hotel. Come see for yourself the unparalleled level of comfort and service that awaits you at any of the Ayres group of hotels, including the Country Inn & Suites located in: Cardiff -by -the -Sea; Orange; Ontario (next to the incredible Ontario Mills Shopping and Entertainment Center); Diamond Bar; Costa Mesa/Newport Beach (near John Wayne Airport); Yorba Linda; Alpine; Corona; San Clemente; Grapevine; and more to come in the near future. No matter what the reason for your travels, the answer to all your needs will always be provided by the Ayres Hotel Groups Country Inn & Suites, Country Inns and Country Suites -- where the best of the Old World and the New Age meet. California Location Man Home Page Hotel Locations 1 of 2 2/4/2000 3:31 PM 1. QUALIFICATIONS Company Name: Ayres Group Company Address: Current Officers Total Employees Relevant Experience Project Name: Project Description: Location: Construction dates: 355 Bristol Street, Suite A Costa Mesa, CA 92626 Donald B. Ayres, Jr. Bruce Ayres Douglas Ayres Donald B. Ayres, III Allyson Ayres •11 Chairman of the Board President Vice President of Construction Vice President of Operations Secretary/Treasurer Country Suites — Corona West 115 room hotel 1900 Frontage Road, Corona, CA 91720 Start: 2/98 Complete:2/99 Project Name: Country Suites at the Mills Mall Project Description: 139 room hotel Location: 4370 Mills Circle, Ontario, CA 91764 Construction Dates: Start: 8/97 Complete: 7/98 Project Name: Country Suites by Ayres — Diamond Bar Project Description: 102 room hotel Location: 21951 Golden Springs Drive, Diamond Bar, CA 91765 Construction Dates: Start: 2/98 Complete: 2/99 Project Name: Country Inn — Orange Project Description: Remodel of 131 room hotel Location: 3737 W. Chapman Avenue, Orange, CA 92868 Construction Dates: Start: 11/96 Complete: 6/97 Project Name: Country Inn — Grapevine Project Description: 74 room hotel Location: 9000 Country Side Court, Lebec, CA 93243 Construction Dates: Start: 8/96 Complete: 3/97 Key Personnel Name: Douglas R. Ayres Address: 355 Bristol Street, Suite A Costa Mesa, CA 92626 Telephone: (714)540-6060 ext. 125 Job Title: Vice President of Construction Job Desc.: Selects subcontractors, oversees onsite construction beginning with foundation, coordinates interior and exterior design, manages construction staff, coordination for city approvals. Years w/Co.: 10 Name: Bruce Ayres Address: 355 Bristol Street, Suite A Costa Mesa, CA 92626 Telephone: (714)540-6060 ext. 128 Job Title: President Job Desc. Facilitates approvals of City and all governing bodies' approvals of plans prior to construction, oversees onsite underground, utility, and grading and all offsite work Years w/Co.: 24 Name: Donald B. Ayres, Jr. Address: 355 Bristol Street, Suite A Costa Mesa, CA 92626 Telephone: (714)540-6060 Job Title: Chairman of the Board Job Desc. Oversees day to day operations of all construction Years w/Co.: 41 Name: Donald B. Ayres, III Address: 325 Bristol Street Costa Mesa, CA 92626 Telephone: (714)429-9372 ext. 149 Job Title: Vice President of Operations Job Desc.: Oversees all hotel operations once opened, in addition to supervising during construction areas that relate to operations. Years w/Co.: 13 Name: Allyson Ayres Address: 355 Bristol Street, Suite A Costa Mesa, CA 92626 Telephone: (714)540-6060 ext. 127 Job Title: Head Designer Job Desc.: Oversees all interior design, decor selection and purchasing. Years w/Co.: 16 Name: Craig Mann Address: 355 Bristol Street, Suite A Costa Mesa, CA 92626 Telephone: (714)540-6060 ext. 126 Job Title: Superintendent Job Desc.: Oversees all on -site trades, employees and operations during construction Years w/Co.: 10 Name: Jana Mahoney Address: 355 Bristol Street, Suite A Costa Mesa, CA 92626 Telephone: (714)540-6060 ext. 132 Job Title: Project Coordinator/Acctg. Job Desc.: Coordinates subcontractor bidding and contract preparation, assists with obtaining pre -construction approvals and facilitates permit approvals and accounting for construction projects. Years w/Co.: 5 Name: Lori Bickel Address: 355 Bristol Street, Suite A Costa Mesa, CA 92626 Telephone: (714)540-6060 ext. 132 Job Title: Assistant Designer/Purchasing Director Job Desc.: Assists Head Designer with interior design and selections, handles all purchasing for interior decor. Years w/Co.: 3 References Joanne Coontz, Mayor of City of Orange 300 E. Chapman Avenue Orange, CA 92866 (714)744-2201 Project: Country Inn— Orange Start Date: 11/96 Complete: 6/97 Councilman Al Talbert 815 W. 6th Street Corona, CA 91720 (909) 736-2400 Project: Country Suites — Corona West Start Date: 2/98 Complete: 2/99 Albert Cruz, City of Ontario 303 E. "B" Street Ontario, CA 91764 (909)391-2506 Project: Country Suites at the Mills Mall Start Date: 8/97 Complete: 7/98 Experience Country Inn — Alpine (99 rooms) 1251 Tavern Road, Alpine, CA 91901 Date began operations: 7/86 Country Inn — Cardiff by the Sea (103 rooms) 1661 Villa Cardiff Drive, Cardiff, CA 92007 Date began operations: 5/85 Country Inn — Corona (102 rooms) 2260 Griffin Way, Corona, CA 91719 Date began operations: 9/90 Country Suites — Corona West (115 rooms) 1900 Frontage Road, Corona, CA 91720 Date began operations: 2/99 Country Suites by Ayres — Diamond Bar (102 rooms) 21951 Golden Springs Dr., Diamond Bar, CA 91765 Date began operations: 2/98 Country Inn — Grapevine (74 rooms) 9000 Country Side Court, Lebec, CA 93243 Date began operations: 3/97 Country Inn — Newport Beach (176 rooms) 325 Bristol Street, Costa Mesa, CA 92626 Date began operations: 5/86 Country Suites — Newport Beach (113 rooms) 345 Bristol Street, Costa Mesa, CA 92626 Date began operations: 10/88 Country Side Suites — Ontario (107 rooms) 204 N. Vineyard, Ontario, CA 91764 Date began operations: 4/91 Country Suites at the Mills Mall (139 rooms) 4370 Mills Circle, Ontario, CA 91764 Date began operations: 8/98 Country Suites by Ayres — Ontario (167 rooms) 1945 Holt Blvd., Ontario, CA 91764 Date began operations: 1/95 Country Inn —Orange (131 rooms) 3737 W. Chapman Avenue, Orange, CA 92868 Date began operations: 6/97 Country Inn — San Clemente (100 rooms) 35 Calle de Industrias, San Clemente, CA 92672 Date began operations: 5/96 Country Suites — Yorba Linda (112 rooms) 22677 Oakcrest Circle, Yorba Linda, CA 92686 Date began operations: 8/90 Key Personnel (operations) Name: Donald B. Ayres, III Address: 325 Bristol Street Costa Mesa, CA 92626 Telephone: (714)429-9372 ext. 149 Job Title: Vice President of Operations Job Desc.: Oversees all hotel operations Years w/Co.: 13 Name: Address: Telephone: Job Title: Job Desc: Years w/Co.: Name: Address: Telephone Job Title: Job Desc. Years w/Co.: Name: Address Telephone: Job Title: Job Desc.: Years w/Co.: Gregg Kleminsky 355 Bristol Street, Suite F Costa Mesa, CA 92626 (714)429-9372 ext. 100 Controller Oversees daily financial operations of hotels 13 Douglas Ayres 355 Bristol Street, Suite A Costa Mesa, CA 92626 (714)540-6060 ext. 125 Vice President of Construction Oversees operations jointly with upgrades, or changes. 10 Jim Boitnott 4370 Mills Circle Costa Mesa, CA 92626 (909)481-7703 Regional Manager VP of Operations on specific issues, Supervise General Managers and daily operations of area hotels. 8 2. FINANCIAL QUALIFICATIONS Project will be privately funded by Ayres Group. Financial Info.: James W. Relvas, CPA Controller, Ayres Group (714)540-6060 ext. 130 Financial Statements: Privately held corporation. Please contact: Bank of America — Private Banking Attn: Janet Joyce (949)760-4626 or contact Douglas Ayres at (714)540-6060 ext. 125 Accountant: Bolar, Hirsch & Jennings 18101 Von Karman Avenue, Suite 1440 Irvine, CA 92612 Contact: Dave Hirsch (949)224-3300 3. PROJECT DESCRIPTION Site plan is included in package Quantity of rooms: 83 Square foot of rooms: 700 sq. ft. Parking: 70 spaces We propose an elegant, boutique hotel located on the bay front. This would be a two story Cape Cod style structure including a restaurant. Ayres Hotel Group is qualified to operate an award winning eating establishment, as demonstrated in another of our restaurants, Le Chateau. Our unique, warm interiors is a trademark of our hotels. 4. DEVELOPMENT COST AND OPERATING PRO FORMA Estimated Construction Costs for hotel (not including land): $20,000,000 Land will be leased at a negotiated rate with the City of Newport Beach 5. IMPLEMENTATION SCHEDULE Base on CUP and a recorded map for the residential component, Ayres Group would propose to have the hotel and homes built within a 10 month time frame. Housing Proforma Purchase: Bay Front Lots (14) at $625,000 x 14 = $ 8,750,000 Balboa Blvd Lots (35) at 200,000 x 35 = 7,000,000 Total $15,750,000 Lease: Bay Front Lots at $43,740/year x 14 = $ 612,360/year Balboa Blvd Lots at 14,000/year x 35 = 490,000/year Total $ 1,102,360/year *A more detailed proforma can be provided upon request Newport Beach - Balboa Island Income Summary Projections Year 10 Year 2 Year 3 Room Count 83 83 83 Rooms Occupied 29,689 22,721 24,539 Rooms Available 30,295 30,295 30,295 Occupancy 98.0% 75% 81 % Average Daily Rate 220.00 180.00 185.00 Rooms Revenue Per Available Room 215.60 135.00 149.85 Amount Percent PAR POR Amount Percent PAR POR Amount Percent PAR POR REVENUE Rooms $ 6,531,602 99.5% $ 215.60 $ 220.00 $ 4,089,825 99.2% $ 135.00 $ 180.00 $ 4,539,706 99.2% $ 149.85 $ 185.00 Telecommunications 30,000 0.5% 0.99 1.01 33,000 0.8% 1.09 1.45 36,300 0.8% 1.20 1.48 Total $ 6,561,602 100.0% $ 216.59 $ 221.01 $ 4,122,825 100.0% $ 136.09 $ 181.45 $ 4,576,006 100.0% $ 151.05 $ 186.48 DEPARTMENTALEXPENSES Rooms $ 705,116 10.8% $ 23.28 $ 23.75 $ 539,630 13.2% $ 17.81 $ 23.75 $ 582,800 12.8% $ 19.24 $ 23.75 Telecommunications 19,500 65.0% 0.64 0.66 21,450 65.0% 0.71 0.94 23,595 65.0% 0.78 0.96 Total $ 724,616 11.0% $ 23.92 $ 24.41 $ 561,080 13.6% $ 18.52 $ 24.69 $ 606,395 13.3% $ 20.02 $ 24.71 DEPARTMENTAL PROFIT $ 5,836,986 89.0% $ 192.67 $ 196.60 $ 3,561,745 86.4% $ 117.57 $ 156.76 $ 3,969,611 86.7% $ 131.03 $ 161.77 UNDISTRIBUTED OPERATING EXPENSES Administrative & General $ 207,824 3.2% $ 6.86 $ 7.00 $ 159,049 3.9% $ 5.25 $ 7.00 $ 171,773 3.8% $ 5.67 $ 7.00 Marketing 166,259 2.5% $ 5.49 5.60 127,239 3.1% $ 4.20 5.60 137,418 3.0% $ 4.54 5.60 Property Operation & Maintenance 160,321 2.4% $ 5.29 5.40 122,695 3.0% $ 4.05 5.40 132,510 2.9% $ 4.37 5.40 Utility Costs 93,521 1.4% $ 3.09 3.15 71,572 1.7% $ 2.36 3.15 77,298 1.7% $ 2.55 3.15 Total 627,924 9.6% $ 20.73 $ 21.15 480,554 11.7% $ 15.86 $ 21.15 518,999 11.3% $ 17.13 $ 21.15 GROSS OPERATING PROFIT $ 5,209,061 79.4% $ 171.94 $ 175.45 $ 3,081,191 74.7% $ 101.71 $ 135.61 $ 3,450,612 75.4% $ 113.90 $ 140.62 FIXED EXPENSES Management Fees $ 196,848 3.0% $ 6.50 $ 6.63 $ 123,685 3.0% $ 4.08 $ 5.44 $ 137,280 3.0% $ 4.53 $ 5.59 Property Taxes 60,000 0.9% 1.98 2.02 60,000 1.5% 1.98 2.64 60,000 1.3% 1.98 2.45 Insurance 11,000 0.2% 0.36 0.37 11,000 0.3% 0.36 0.48 11,000 0.2% 0.36 0.45 Land Lease 328,080 5.0% 10.83 11.05 206,141 5.0% 6.80 9.07 228,800 5.0% 7.55 9.32 Total $ 595,928 9.1 % $ 19.67 $ 20.07 $ 400,826 9.7% $ 13.23 $ 17.64 $ 437,080 9.6% $ 14.43 $ 17.81 NET OPERATING INCOME $ 4,613,133 70.3% $ 152.27 $ 155.38 $ 2,680,365 65.0% $ 88.48 $ 117.97 $ 3,013,531 65.9% $ 99.47 $ 122.81 Occupancy Tax Projection $ 653,160 $ 408,983 $ 453,971 Land Lease 328,080 206,141 228,800 $ 981,240 $ 615,124 $ 682,771 Page 1 Newport Beach - Balboa Island Income Summary Projections Room Count Rooms Occupied Rooms Available Occupancy Average Daily Rate Rooms Revenue Per Available Room REVENUE Rooms Telecommunications Total DEPARTMENTALEXPENSES Rooms Telecommunications Total Year 4 Year 5 Year 6 83 25,751 30,295 85% 190.00 161.50 Amount Percent PAR POR 83 26,357 30,295 87% 190.00 165.30 Amount Percent PAR POR 83 Zr 568 32295 91% 11W()0 W.45 Amount went PAR POR $ 4,892,643 99.3% $ 161.50 $ 190.00 $ 5,007,764 99.3% $ 165.30 $ 190.00 $ 5,375,848 99:3% $ 177.45 $ 195.00 36,663 0.7% 1.21 1.42 37,030 0.7% 1.22 1.40 37,400 %7% 1.23 1.36 $ 4,929,306 100.0% $ 162.71 $ 191.42 $ 5,044,793 100.0% $ 166.52 $ 191.40 $ 5,413,248 V=D% $ 178.68 $ 196.36 $ 611,580 12.5% $ 20.19 $ 23.75 $ 625,970 12.5% $ 20.66 $ 23.75 $ 654,751 12.2% $ 21.61 $ 23.75 23,831 65.0% 0.79 0.93 24,069 65.0°%o 0.79 0.91 24,310 a59% 0.80 0.88 $ 635,411 12.9% $ 20.97 $ 24.68 $ 650,040 129% $ 21.46 $ 24.66 $ 679,061 1123% $ 22.41 $ 24.63 DEPARTMENTAL PROFIT $4,293,894 87.1% $ 141.74 $ 166.75 $4,394,753 87.1% $ 145.07 $ 166.74 $4,734,187 ZF5% $ 156.27 $ 171.72 UNDISTRIBUTED OPERATING EXPENSES Administrative & General $ 180,255 3.7% $ 5.95 $ 7.00 $ 184,497 3.7% $ 6.09 $ 7.00 $ 192,979 3.6% $ 6.37 $ 7.00 Marketing 144,204 2.9% $ 4.76 5.60 147,597 2.9% $ 4.87 5.60 154,383 2.9% $ 5.10 5.60 Property Operation & Maintenance 139,054 2.8% $ 4.59 5.40 142,326 2.8% $ 4.70 5.40 148,870 2.8% $ 4.91 5.40 Utility Costs 81,115 1.6% $ 2.68 3.15 83,023 1.6% $ 2.74 3.15 86,841 1.6% $ 2.87 3.15 Total 544,628 11.0% $ 17.98 $ 21.15 557,443 11.0% $ 18.40 $ 21.15 583,073 10.8% $ 19.25 $ 21.15 GROSS OPERATING PROFIT $ 3,749,266 76.1 % $ 123.76 $ 145.60 $ 3,837,310 76.1% $ 126.66 $ 145.59 $ 4,151,114 % $ 137.02 $ 150.57 FIXED EXPENSES Management Fees $ 147,879 3.0% $ 4.88 $ 5.74 $ 151,344 3.0% $ 5.00 $ 5.74 $ 162,397 3.0% $ 5.36 $ 5.89 Property Taxes 60,000 1.2% 1.98 2.33 60,000 12% 1.98 2.28 60,000 1.1% 1.98 2.18 Insurance 11,000 0.2% 0.36 0.43 11,000 0.2% 0.36 0.42 11,000 0.2% 0.36 0.40 Land Lease 246,465 5.0% 8.14 9.57 252,240 5.0% 8.33 9.57 270,662 5.0% 8.93 9.82 Total $ 465,344 9.4% $ 15.36 $ 18.07 $ 474,583 9.4% $ 15.67 $ 18.01 $ 504,060 9.3% $ 16.64 $ 18.28 NET OPERATING INCOME $ 3,283,921 66.6% $ 108.40 $ 127.53 $ 3,362,727 66.7% $ 111.00 $ 127.59 $ 3,647,055 167.4% $ 120.38 $ 132.29 Occupancy Tax Projection $ 489,264 Land Lease $ 246,465 $ 735,730 $ 500,776 $ 252,240 $ 753,016 $ 537,585 $ 270,662 $ 808,247 Page 2 Newport Beach - Balboa Island Income Summary Projections Year 7 Year 8 Year 9 Room Count 83 83 83 Rooms Occupied 28,780 28,780 29,689 Rooms Available 30,295 30,295 30,295 Occupancy 95% 95% 980/0 Average Daily Rate 200.00 205.00 210.00 Rooms Revenue Per Available Room 190.00 194.75 205M Amount - Percent PAR POR Amount Percent PAR POR Amount Percent PAR POR REVENUE Rooms $ 5,756,050 99.3% $ 190.00 $ 200.00 $ 5,899,951 99.4% $ 194.75 $ 205.00 $ 6,234,711 99.4% $ 205.80 $ 210.00 Telecommunications 37,774 0.7% 1.25 1.31 38,152 0.6% 1.26 1.33 38,533 0.6% 1.27 1.30 Total $ 5,793,824 100.0% $ 191.25 $ 201.31 $ 5,938,103 100.0% $ 196.01 $ 206.33 $ 6,273,244 100.0% $ 207.07 $ 211.30 DEPARTMENTALEXPENSES Rooms $ 683,531 11.9% $ 22.56 $ 23.75 $ 683,531 11.6% $ 22.56 $ 23.75 $ 705,116 11.3% $ 23.28 $ 23.75 Telecommunications 24,553 65.0% 0.81 0.85 24,799 65.0% 0.82 0.86 25,047 65.0% 0.83 0.84 Total $ 708,084 12.2% $ 23.37 $ 24.60 $ 708,330 11.9% $ 23.38 $ 24.61 $ 730,163 11-6% $ 24.10 $ 24.59 DEPARTMENTAL PROFIT $ 5,085,740 87.8% $ 167.87 $ 176.71 $ 5,229,773 88.1 % $ 172.63 $ 181.71 $ 5,543,081 88.4% $ 182.97 $ 186.70 UNDISTRIBUTED OPERATING EXPENSES Administrative & General $ 201,462 3.5% $ 6.65 $ 7.00 $ 201,462 3.4% $ 6.65 $ 7.00 $ 207,824 3.3°/a $ 6.86 $ 7.00 Marketing 161,169 2.8% $ 5.32 5.60 161,169 2.7% $ 5.32 5.60 166,259 2-7% $ 5.49 5.60 Property Operation & Maintenance 155,413 2.7% $ 5.13 5.40 155,413 2.6% $ 5.13 5.40 160,321 2.6% $ 5.29 5.40 Utility Costs 90,658 1.6% $ 2.99 3.15 90,658 1.5% $ 2.99 3.15 93,521 15% $ 3.09 3.15 Total 608,702 10.5% $ 20.09 $ 21.15 608,702 10.3% $ 20.09 $ 21.15 627,924 10.0% $ 20.73 $ 21.15 GROSS OPERATING PROFIT $ 4,477,038 77.3% $ 147.78 $ 155.56 $ 4,621,071 77.8% $ 152.54 $ 160.56 $ 4,915,157 78.4% $ 162.24 $ 165.55 FIXED EXPENSES Management Fees $ 173,815 3.0% $ 5.74 $ 6.04 $ 178,143 3.0% $ 5.88 $ 6.19 $ 188,197 3.0% $ 6.21 $ 6.34 Property Taxes 60,000 1.0% 1.98 2.08 60,000 1.0% 1.98 2.08 60,000 1.00% 1.98 2.02 Insurance 11,000 0.2% 0.36 0.38 11,000 0.2% 0.36 0.38 11,000 020/0 0.36 0.37 Land Lease 289,691 5.0% 9.56 10.07 296,905 5.0% 9.80 10.32 313,662 5.0% 10.35 10.56 Total $ 534,506 9.2% $ 17.64 $ 18.57 $ 546,048 9.2% $ 18.02 $ 18.97 $ 572,860 9.1% $ 18.91 $ 19.30 NET OPERATING INCOME $ 3,942,532 68.0% $ 130.14 $ 136.99 $ 4,075,023 68.6% $ 134.51 $ 141.59 $ 4,342,297 6910/6 $ 143.33 $ 146.26 Occupancy Tax Projection $ 575,605 $ 589,995 $ 623,471 Land Lease 289,691 296,905 313,662 $ 865,296 $ 886,900 Page 3 Newport Beach - Balboa Island Income Summary Projections Year 1 Room Count 83 Rooms Occupied 21,207 Rooms Available 30,295 Occupancy 70% Average Daily Rate 170.00 Rooms Revenue Per Available Room 119.00 Amount - Percent PAR POR REVENUE Rooms $ 3,605,105 98.9% $ 119.00 $ 170.00 Telecommunications 38,919 1.1% 1.28 1.84 Total $ 3,644,024 100.0% $ 120.28 $ 171.84 DEPARTMENTALEXPENSES Rooms $ 503,654 14.0% $ 16.63 $ 23.75 Telecommunications 25,297 65.0% 0.84 1.19 Total $ 528,951 14.5% $ 17.46 $ 24.94 DEPARTMENTAL PROFIT $ 3,115,072 85.5% $ 102.82 $ 146.89 UNDISTRIBUTED OPERATING EXPENSES Administrative & General $ 148,446 4.1% $ 4.90 $ 7.00 Marketing 118,756 3.3% $ 3.92 5.60 Property Operation & Maintenance 114,515 3.1 % $ 3.78 5.40 Utility Costs 66,800 1.8% $ 2.21 3.15 Total 448,517 12.3% $ 14.81 $ 21.15 GROSS OPERATING PROFIT $ 2,666,555 73.2% $ 88.02 $ 125.74 FIXED EXPENSES Management Fees $ 109,321 3.0% $ 3.61 $ 5.16 Property Taxes 60,000 1.6% 1.98 2.83 Insurance 11,000 0.3% 0.36 0.52 Land Lease 182,201 5.0% 6.01 8.59 Total $ 362,522 9.9% $ 11.97 $ 17.09 NET OPERATING INCOME $ 2,304,033 63.2% $ 76.05 $ 108.65 Occupancy Tax Projection $ 360,511 Land Lease 182,201. $ 542,712 Page 4 ■ ■ Country Inn 8"auites 325 Bristol ,Street, Costa Mesa, California 92626 714.549.0300 TOLL FREE RESERVATIONS 800.322.9992 405 South Disneyland Coast co Knotts 55 Plaza Berry Farm m BAKER ST. p 73 O� G LU o �a J cr O� �oc��. Qpe `Q� Country Sit s& JIB N 405 Freeway exit Bristol South, then 1 mile to the corner of Bristol and Redhill. 55 Freeway exit Balzer, go right, turn left on Bristol. (No exit off Bristol on the 55). HOTEL FEATURES & SERVICES 300 Deluxe Rooms & Suites Non -Smoking Rooms / *Two Line Telephones High -Speed Internet Access / Oversized Writing Desk Refrigerators / Wet Bar / *Whirlpool Baths *Micro Kitchens with Microwave / In -Room Coffee Hair Dryers / Ironing Boards with Iron Award Winning Restaurant and Gardens Meeting Rooms up to 200 Full Service Beauty Salon Two Outdoor Heated Pools / Spas / Fitness Studio Complimentary Breakfast** / Morning Newspaper Complimentary Beverage**/ Fresh Fruit / Homebalzed Cookies Pay -Per -View Movies / HBO, ESPN, CNN, Disney Channel Suites hudding only •* Included Mth some rates Country Inns & Suites gy Cl� ■ Ontario at the Mills Mall 909.481.0703 ■ Ontario Airport 909.390.7778 ■ Corona West 909.738.9113 ■ Diamond Bar 909.860.6290 ■ San Clemente 949.498.8800 ■ Cardiff by the Sea 760.944.0427 Alpine 619.445.5800 ■ Ontario 909.937.9700 Corona 909.734.2140 ■ Orange 714.978.9168 Grapevine 805.248.1530 ■ Yorha Linda 714.921.8688 Visit our website at: www.countrysuites.com C _)STA MESA w 1 "' ,, Country Inn & Suites..,. 9YO �] nter our lobby, adorned with hand -painted frescoes of seaside villages and be welcomed by the grace and timeless charm of European elegance, the ambiance of countryside. The Country Inn & Suites at Newport B, its guests with sumptuously upholstered furniture, class fireplaces, fresh Moral bouquets, specially selected antigi splendid works of art. European -inspired guest rooms and suites are exquisitely 1 appointed withv' mahogany Queen Winne style furniture and matching armoire with television, ceiling fan and refrigerator, all surrounded by the beauty of French inspired floral wallpaper. (Vur studio suites add the sensual pleasure of a whirlpool spa, a four-poster bed and the convenience of a micro -kitchen. f activity and recreation are part of the formula for the perfect getaway, two heated pools, spas and a fitness studio are available to all guests. For the more outdoor -minded, Newport's scenic Back Bay jogging and hiking trails are the perfect escape into nature. >,AIN '. R .a _Ao' 1— :rr: Ir � ° • � ! w Is opens Ar 01 s.....ris. �. . MEMO�.�' w �Mf OWNa w....,. •' �i . ':'..ten..% r:w:,:ej. sees t` a e�ie j• + 4 Meb! ! ! *err., es •.,.,' rit.l' Al IKt to ago 0 Mft :'Mo .. 01".. -a0 'Yt?' C X m .04 0 FW low' - The Bendetti Company 1176 Main Street Suite 100 Irvine CA 92714 0 0 7w F I - ............................................ Existing Site Conditions I I 0 0 9- WILLIAm HEZMALHALCH A R C H I T E C T S I N C. Project # 99262 Marinapark Request For Proposal Executive Summary INTRODUCTION This proposal has been prepared in response to the RFP, which became available from the City of Newport Beach in November 1999. It represents The Bendetti Company's ("Developer") vision for a truly unique piece of property. A key element of the development on this incomparable property is the creation of an architectural theme and image which incorporates the nautical seaside character of the East Coast. Marinapark is being conceived as a project nestled within a quiet marine environment. While it has been designed to fit within the Balboa community, it will establish its own identity with both the local community and visiting public. While reconstructing infrastructure and "dressing up" the bayside courtyards of the mobile home park with arbors, the new "Marinapark" will keep most of the existing manufactured housing, retain the American Legion on site and upgrade their meeting hall and reconstruct the existing private marina, which has become old and tired. New uses introduced to Marinapark include a critically needed marina for visiting yachtsmen, a visitor serving retail and restaurant center, and a luxury seaside inn. We look at this development concept as one of seeking balance. A balance that will provide the following: • Maximization of revenue to the Cityof Newport Beach • Upgrading and enriching the value of the mobile home park, private marina, and the American Legion Hall • A destination for the local community and visiting public, including a marina for visiting yachtsmen, restaurants and other commercial facilities • An architectural theme that reflects the local character of the community, blended with subtle East Coast traditions. • A qualified development team In evaluating a response to this RFP, the Developer chose a path believed to represent the lowest risk to the City and itself, and that which represents the best long term viability for a site with so many unique features. It is a rare opportunity to discuss a development project with 1,200 lineal feet of prime bay frontage in Newport Harbor. It is our desire to present the City with a program that presents a win to all parties; the City, the community, and the developer. MARINAPARK, A VISION The vision of Marinapark includes the following: 1. Retention of the mobilehome park which will be enhanced along the bayfront with arbor entries to the courtyards. 52 of the current 58 resident spaces that comprise Marinapark will remain with space rent brought to market levels. 2. An increase in public access to the bayside beach through view corridors and pathways. 3. The development of 17 new single family residences of up to 2,400 square feet, and 24 townhouses of 1,200 to Q 5 7. FXV 1,500 square feet, all on ground leased property. The homes will be a continuation of the architectural theme of Marinapark. The creation of approximately 34 boat slips to exclusively serve visitors to the Harbor and of which can accommodate yachts in the 30' to 55' range, in addition to some larger yachts. Aside from the seaside inn, shore facilities such as showers, restrooms and laundry will be provided for these mariners. A 44 room luxury seaside inn which include 25 unique bay view rooms. 12,000 square feet of marine and seaside oriented quasi retail uses such as yacht brokerage, marine hardware, which will compliment the vision of the project, and the more conventional retail, which will attract the local community and visitor serving public. 9,000 square feet of small multi -tenant office space primarily serving the demand from the local community. An elegant 5,400 square foot restaurant catering to lunch and dinner patrons. Other restaurants in the community such as Aubergine, the Blue Water Grill and Sabatino's capture the vision for the restaurant at Marinapark. 9. A 2,450 square foot coffee shop diner. Other local diners such as the Galley capture the concept for a diner at Marinapark. 10. Retention of the American Legion on site in an 8,600 square foot newly constructed facility. 11. The project will provide 200 parking stalls located at ground level and in a half -tuck subterranean structure. Marinapark's common areas are community based and public serving. Aside from the seaside architectural theme and imagery, view corridors and public serving amenities have been established to include a traditional wood planked bay - front boardwalk connecting 18th and 15th streets. Along this boardwalk will be street furniture, subtle theme lighting complimented and bordered by the project's signature lighthouse. Marinapark will be a wonderful place to live and work, and for shopping, eating or just reflection. DEVELOPMENT TEAM THE BENDETTI COMPANY - The Bendetti Company Chairman, Donald L. Bendetti, and President, Robert D. Bendetti, have a combined 51 years of development experience in Southern California. Through those years, whether in robust economy or not, Bendetti has enjoyed a good financial relationship with its partners and lenders. Together they have developed over 3.5 million square feet of commercial space, and have built and sold over 1,000 homesites in its manufactured housing communities. All developments have been of institutional grade, and Marinapark will be no different. Their approach to development is conservative and realistic. The foundation of their development principles is to be realistic about the financial picture through market knowledge and research, and avoid the temptation of developing for the wrong reasons. As such Bendetti has been more a "holder" of real estate, rather than a merchant builder. Robert Bendetti and William Mecham will be the principals behind the development team. The Bendetti Company offices are located at 1176 Main Street, Suite 100, Irvine, California, Telephone (949) 261-6111, Facsimile (949) 261-6660, email rdb@bendetti.com. WILLIAM HEZMALHALCH ARCHITECTS, INC. - This award - winning Irvine based architecture firm has the experience and expertise to put the developers concept and ideas into a visual format. They have the demonstrated talent to address the multitude of issues of such a unique development including theme, layout, feasibility, and a project's requirement to meet certain criteria for planning and development standards. Jeffrey Chelwick, Principal/Multi-Family Design, and Denise Ashton, Senior Planner are the team leaders for this project. SWIFTSLIP - Another member of the development team is Peter Swift whose firm, based here in Newport Harbor, has 18 years experience designing and constructing marinas in southern California. Mr. Swift has an understanding of the design and construction requirements and is experienced with the entitlement process including representation before the City of Newport Beach and the California Coastal Commission. HOTEL MANAGEMENT. The selection of hotel management will be critical to the theme, promotion and successful outcome of the seaside inn. While the inn is relatively small in stature, it will have the ability to attract a hotel management firm whose resume includes other luxury theme establishments, and whose track record will have been proven. Other consultants have been listed under a separate section of this proposal. DEVELOPMENT TIMELINES Based upon the detailed Implementation Schedule provided in this proposal it is projected that a minimum twenty-four months should be allotted for entitlement, plus sixteen months for construction, which puts completion at 40 months from inception. These timelines will be influenced by the City's posture for moving the development through the entitlement process. FINANCIAL FEASIBILITY It is projected that once completed and stabilized, Marinapark will generate approximately $5,792,927 in annual net revenues, against a total initial project cost of $41,323,300. The sale of the residential element of the development will reduce that project cost by $16,648,000, to $24,675,300. The annual net revenue will be used to make a ground lease payment to the City, service debt and achieve acceptable investment returns, and the balance of which will be divided between the City and the Developer on a profit sharing formula. FINANCIAL PROPOSAL There are many different approaches to structuring a financial relationship with the City. This financial proposal requests a sixty-five year ground lease, and offers a participation in net revenue to the City. GROUND LEASE - The Developer proposes to enter into a sixty-five year ground lease with the City. Since the fee interest in the land will not be subordinated, the ground lease must be long enough to address important financial and investment objectives which would otherwise be difficult to attain under a shorter term lease. The annual ground lease payment is proposed to be $2,000,000, and will adjust every five years at a rate commensurate with the increase in the Consumer Price Index, with a ceiling of 4% per annum. It is proposed that the ground lease payment commence upon completion of construction, and upon the issuance of a Certificate of Occupancy. Based upon the Implementation Schedule which follows, it is projected that the ground lease payment would commence approximately 40 months from Marinapark's inception. In the meantime, the City will retain all net income from the mobilehome park and the existing marina during the entitlement and construction period. REVENUE SHARING After the payment of ground lease rent, and required investment returns, the City and Developer will enter into a revenue sharing formula. It is proposed that the formula allocate 60% of the net cash flow to the City, and 40% to the Developer. Once the project is leased and income stabilized, it is projected that the City will receive, in addition to ground rent, $972,134 annually. This payment is expected to increase based upon the income growth of Marinapark. DEVELOPMENT PROFIT There is a one time profit projected to be $4,768,500 which will come from the sale of the 17 residences and 24 townhomes. It is proposed that this development profit be shared by the City and Developer, based on the revenue sharing formula above. That translates into another $2,861,100 of profit to the City. SALES TAX & TRANSIENT OCCUPANCY TAX. This development proposal does not analyze the substantial revenues to the City generated from sales tax, property tax and Transient Occupancy Tax. It should be evaluated by the City as part of the entire financial picture. SUMMARY Marinapark offers a substantial benefit to the City by providing a well thought out development with an architectural element which offers a subtle East Coast character and nautical theme, and provides a realistic and attractive financial picture for the City. • A sixty-five year ground lease with annual payments starting at $2,000,000 upon completion of construction. • A 60 / 40 revenue sharing formula adding additional annual revenues starting at $972,134. • A one time $2,861,000 project profit from the sale of the SFD residences and SFA townhomes. • Sales and property tax, and transient Occupancy Tax In addition, Marinapark is a development that will enrich current and public access by providing quality public places and establishing new view corridors. v m� �o CD o -' THE NEW MARINAPARK VISION INTRODUCTION It's not very often that an opportunity presents itself such as the Marinapark project. This incredibly valuable property nestled within the quiet marine community on the Balboa peninsula is a treasure of potential waiting to be unlocked. The City of Newport Beach holds the key and the privilege to revitalize the neighborhood. The Bendetti Company believes their vision illustrated and described in this proposal will enrich the community and promote an economically beneficial development for the City. GOALS FOR THE NEW MARINAPARK The most important factors driving our innovative land use concept and design image are community based and public serving. The following goals are cornerstones to the design: • Strive for consistency with the character and atmosphere of the adjacent neighborhood and community • Establish new view corridors both into and out of the project site, in addition to enriching the current public access to the bay side of the peninsula • Provide quality public spaces that invite neighbors and visitors alike to experience the wonders of the bayside marina environment • Preserve and enhance the existing mobilehome park by adding an arbored entry and landscape color to each courtyard cluster. • Balance the City's economic/revenue needs with the needs of the community • Satisfy the unmet demand for visiting sailors to experience the unique qualities of the Balboa peninsula and provide the opportunity for overnight docking for extended stays • Retain and upgrade the American Legion facility • Fulfill the desires of City decision makers to provide new single family homes for sale ARCHITECTURAL IMAGE AND ELEMENTS OF THE PLAN Driven by our goals, the conceptual plan for the property envisions an innovative mix of uses around the existing mobilehome park. This mix stands to compliment the community in keeping with the character of the area. The architectural theme and imagery of the Marinapark proposal incorporates the nautical seaside character of the east coast with a blend of Cape Cod architectural elements such as: • Varied building massing and roof pitches to create interesting buildings and pedestrian scale people places, • Traditional style architecture with dormers and window walks, • Charm and character of window boxes and cupola's, • Weathered grayed shingles and light painted window trim, • Wood rail or picket fences, • Nautical accent details such as weather vanes and porthole windows. Key plan elements of our proposal envision: • New single family residential units with home sizes of 2000- 2400 square foot, all with their own alley -loaded two car garage located along Balboa Boulevard. The lot sizes are in keeping with the neighborhood across the street. • Four new multi -family six-plex buildings located at the corners of the residential portion of the site. Units will range in size from 1200 - 1500 square feet and will provide two car garage spaces for each unit. • A seaside inn containing forty-four rooms, twenty-five of which will be bayview with the main building and lobby as an architectural statement located on Balboa Boulevard. This in will be developed in scale and character complimentary with the surroundings. The creative layout depicts five individual, small scale buildings located along the marina and new public plaza with retail on the first level and the hotel rooms on the second level over the retail. • Two restaurants are envisioned for the project. One will serve the early morning mariners with breakfast and lunch in a galley style setting. The other will be a more elegant lunch and dinner eatery bringing a quiet sophistication to a night-time experience. • Approximately 12,000 square feet of retail space is envisioned on the first floor of the individual buildings along the waterfront. The retail uses could include marine hardware, car rental, clothing, nautical sporting goods, gift shops, coffee/juice bar, ice cream shop etc. e Office space totaling 9,000 square feet is included in the plan along the 15th Street frontage. Small offices would serve the local community need for office space with such uses as boat insurance, boat brokerage, small one-two person businesses etc. The second story space will provide an exceptional working environment. • The American Legion Hall will be relocated to the first floor of the building located along 15th Street. This space will accommodate most of the current uses in similar space. • A visitor marina is envisioned as an extension to the existing American Legion marina. This marina will provide slips for approximately 35 boats with the ability to accommodate larger yachts. The facility will satisfy a much -needed demand for overnight docking, extended stays, electricity hook-ups, showers and restrooms plus a sewer pump station. • Creation of a traditional wood plank boardwalk for a quarter mile along the bayside beach and marina. Landmarks will terminate the views at 18th Street and 15th Street and will accentuate the public spaces and plazas. The boardwalk will be Cape Cod themed with subtle lighting and street furniture. • Parking to accommodate these activities by a combination surface and half -tuck subterranean parking structure. We believe our creative vision benefits the City by: * retaining the local character of the community, * creating dynamic public places and linkages to existing pedestrian circulation, * generating revenue for the City through the seaside inn, sale of single family residential and the visitor marina * providing a visitor marina for both short term and extended stay sailors. Please consider this proposal as the future of Marinapark. • Parking to accommodate these activities by a combination surface and half -tuck subterranean parking structure. We believe our creative vision benefits the City by: * retaining the local character of the community, * creating dynamic public places and linkages to existing pedestrian circulation, * generating revenue for the City through the seaside inn, sale of single family residential and the visitor marina * providing a visitor marina for both short term and extended stay sailors. Please consider this proposal as the future of Marinapark. rvp/ r� ,MARINAPARK, Newport Beach, CA The Bendetti Company Site Plan Y- WILUAM HLHALCH ARCHITECT S 1 N C. n An nn Il11111ill�l111111lil rim ,a 1 r S JI M .:J A _IA .a hJ l 41, _'� -4 Ar ,MARINAPARK, Newport Beach, CA WILLIAm HEZMALHALCH The Bendetti Company A R C H I T E C T S INC MARINAPARK, 4 Newport Beach, CA WILUAm HEZMALHALCH A R C H I T E C T S I N C. The Bendettl Company m �o a T 3 � I 0 Hy ' H Marinapark Development Budget PURCHASE PRICE Land Area 10.71 Acre 466,528 SF Other: TOTAL LAND COST CONSTRUCTION COSTS Demo and Off/On-Site Work 466,528 SF @ $ 4.75 PSF Common Areas/Landmarks Lighthouse 2 @ $125,000 EA Wood Planked Boardwalk Hardscape & Landscape 110,000 SF @ $ 8.75 PSF Parking Structure Ground Level 35,000 SF @ $ 30 PSF Half -Tuck Subterranean 35,000 SF @ $ 20 PSF Mobile Home Park "EXHIBIT A" Single Family Homes - Detached 17 2,800 SF @ $ 200 PSF Townhomes - Attached 24 1,800 SF @ $ 165 PSF Private Marina - Reconstruction "EXHIBIT C" Visitor Serving Marina "EXHIBIT C" Resturant Shell: 5,200 SF @ $ 60 PSF T.I. Allowance: 5,200 SF @ $ 20 PSF Resturant - Galley Style Shell: 2,450 SF @ $ 60 PSF T.I. Allowance: 2,450 SF @ $ 10 PSF Retail Office Shell: 11,800 SF @ $ T.I. Allowance: 11,800 SF @ $ Shell: T.I. Allowance: 9,000 SF @ $ 9,000 SF @ $ 60 PSF 15 PSF 60 PSF 25 PSF American Legion Hall Shell: 8,600 SF @ $ 45 PSF T.I. Allowance: 8,600 SF @ $ 20 PSF Ca LEASED $ 2,216,006.10 250,000 962,500 1,050,000 700,000 500,000 9,520,000 7,128,000 484,500 1,877,500 312,000 104,000 147,000 24,500 708,000 177,000 540,000 225,000 387,000 172,000 Marinapark Development Budget Seaside Inn Shell: 16,995 SF @ $ 85 PSF 1,444,575 T.I. Allowance: 16,995 SF @ $ 60 PSF 1,019,700 $ 29,949,281.10 Project Management 1% 299,493 Hard Cost Contingency 4% 1,197,971 TOTAL HARD COSTS $ 31,446,745.16 SOFT COSTS Architectural & Engineering 3% $ 943,402 Feasibility/Appraisal 65,000 Soils & Environmental 35,000 Development Fees & Permits 4% 1,197,971 Legal, Title & Closing 120,000 Taxes & Insurance 430,000 Marketing & Promotion 45,000 Leasing Commissions 125,000 Development/Construction O/H 3% (Hard Cost) 943,402 Soft Cost Contingency 5% 210,000 TOTAL SOFT COSTS $ 4,114,776 DEVELOPMENT COSTS (BEFORE FINANCING) FINANCING COSTS Loan Fees & Expenses Ground Lease Pmts. Interest 3% 12 Mo.'s Absorption (after CofO) MHP Income Offset Construction 16 Mo.'s @ 9.75%, 60% dispursed Absorption 12 Mo.'s @ 9.75%, 95% dispersed 35% Income offset TOTAL FINANCING COSTS TOTAL DEVELOPMENT COSTS Repay costs from sale of detached homes & attached townhomes TOTAL REMAINING DEVELOPMENT COSTS $ 35,561,521 $ 1,066,846 2,000,000 (1,087,200) 1,901,000 2,401,600 (520,467) $ 5,761,779 $ 41,323,300 (16,648,000) $ 24,675,300 Marinapark Income Projection PROJECTED OPERATING INCOME PROJECTED NOI EXHIBIT Mobile Home Park "A" 1,048,800 Ground Lease - SFD & SFA "B" 675,750 Marina: Private & Visitor "C" 2,476,894 Seaside Inn "D" 1,656,396 Resturant "E" 114,296 Resturant - Galley Style "E1l 53,851 Retail 1711 228,094 Office O �711 189,000 American Legion Hall "G'l 0 $ 6,443,081 COMMON AREA OPERATING EXPENSES Repair & Maintenance/Marina 125,000.00 Landscape 30,000.00 Property & Lia. Insurance 27,000.00 Property Tax 78,000.00 Operation and Management 5% 322,154.05 Common Area Utilities 36,000.00 Trash Disposal 32,000.00 Ground Lease Payment 2,000,000 TOTAL RENTAL EXPENSES $ 2,650,154 NET OPERATING INCOME $ 3,792,927 STABILIZED VALUE $ 41,004,616 Yr. 1 Stabilized Net Operating Income $ 3,792,927 Stabilized Cash on Cash Return 15.89% Debt Service (on Remaining Development Cost) $ 2,172,703 Cash Flow $ 1,620,224 Revenue Share, Ground Lessor 60% $ 972,134.37 ASSUMPTION: (a) Many of the Marinapark uses are triple net with the tenant paying a proration of property taxes and insurance and CAM fees. (b) Stabilized value arrived at using a 9.25% capitalization rate (c) Debt service of leasehold based on an 8% loan, 30 year amortization Exhibit "A" Mobile Home Park Summary Marinapark mobilehome park is a truly unique community. Every home has a view of Newport Hay. Aside from the bayfront homes at Lido Peninsula Resort, there is no other mobilehome park in the region with such an amenity. While the politics of the current lease is beyond the scope of this proposal, it is generally accepted that the current lease payments are"ell below market levels. The new Marinapark development proposes to include the mobilehome park, and raise the rent to market levels. The mobilehome park will need to be updated with reconstructed infrastructure and architectural enhancements to tie the park into the balance of the development. $500,000 has been projected in the Development Budget to cover these upgrades. The increase in rent from current to market levels nearly doubles the revenue generated by the park. As part of the redevelopment plan, six of the fifty-eight spaces will need to be eliminated. The remaining fifty-two spaces all have bayfront views ranging from unobstructed (Space "A, B & F") or partially obstructed (Space "C, D & E"). CURRENT PROJECTED CURRENT TOTAL PROJECTED TOTAL CURRENT SPACE SPACE PROJECTED SPACE SPACE SPACES RENT/MO. RENT/MO. SPACES RENT/MO. RENT/MO. A, B & F SPACES 25 $ 1,151 $ 28,786 23 $ 2,200 $ 50,600 C & D SPACES 22 $ 875 19,241 20 $ 1,700 37,400 E SPACES 11 $ 819 9,012 9 $ 1,600 14,400 $ 57,039 $ 102,400 CURRENT ANNUAL $ 684,465 PROJECTED ANNUAL $ 1,228,800 OPERATING EXPENSES 123,204 EST. OPERATING EXPENSES 180,000 CURRENT NOI $ 561,262 PROJECTED NOI $ 11048,800 Market Support: Marinapark mobilehome park, Lido Penninsula Resort Exhibit "B" Luxury Residences - SFD Townhomes Lofts - SFA Summary The potential revenue for the residential element of Marinapark has been modeled after Beacon Bay, a residential community located along the Newport Harbor bayfront, on land owned by the City of Newport Beach. At Beacon Bay, the revenues derived from ground leases are based upon 2.5% of the sales price. At Marinapark, 3% has been calculated. As property values increase over time, and resales begin to occur, ground lease revenue will grow. It is projected that resales will be infrequent in years one through three. Thereafter, resales are projected to occur at a rate of 15 percent annually (6 homes per year). The future sale price levels are difficult to predict, as are interest rates and the economy, therefore, an annual cost of living adjustment of two percent (2%) should been used to grow resale values. Ground lease revenue will be triple net, wherein the ground lessee (homeowner) pays all taxes, insurance and maintenance on each respective parcel. A one-time development profit of 18% is projected based upon the sale price of each residential unit. NO. OF SALE BROKER SALE UNITS PRICE FEE PROFIT (i) GROUND LEASE AS TOTAL PERCENT SALE OF SALE PROFIT PRICE SFA 17 $ 725,000 $ 36,250 $ 130,500 $ 2,218,500 SFD 24 $ 425,000 $ 21,250 $ 106,250 2,550,000 4,768,500 (i) (i) A one-time development profit Market Support: Beacon Bay Community, Newport Coast Properties GROUND TOTAL LEASE/PER LEASE PARCEL REVENUE PER/MO. PER/MO. 3% $ 1,813 $ 30,813 3% 1,063 25,500 $ 2,875 $ 56,313 ANNUAL $ 675,750 Exhibit "C" Private Marina Visitor Serving Marina Summary Visitor Serving Marina One of the greatest needs in Newport Harbor is a marina dedicated to visiting yachtsman. There are very few places to dock or moor a vessel unless you are a member of a yacht club. A marina dedicated to visiting yachtsman will provide accommodations ranging from one night to one month. Daily lip fees are considerably higher than those for long term. The visitor marina will contain thirty-four new slips ranging from 36' to 40' (handling yachts what are 40' to 55'), plus three side ties along the channel (two of which will handle yachts up to 100'). The marina will also include a number of visitor side ties for the bay packets cruising the harbor, and wishing to enjoy the restaurants and other amenities of Marinapark. Private Marina The Marinapark development plan will modernize and rebuild the existing private marina which has become old and tired. By dredging and reconstructing a portion of the southerly seawall, another 8 slips can be added to the existing marina for a total of 48 slips ranging in size from 20' to 40' which can accommodate yachts in the 25' to 45' range. Private Marina Vessel Mo. Rent Mo. Rent Occupancy Total Length/Feet No. of Slips Per Foot Per Slip Rate Mo. Rent 25' Slips 30 15 $ 15.00 $ 450 90% $ 6,075 35' Slips 40 10 $ 16.00 $ 640 90% $ 5,760 45' Slips 50 15 $ 18.00 $ 900 90% $ 12,150 $ 23,985 Annual $ 287,820 Visitor Serving Marina Vessel Daily Rent Mo. Rent Occupancy Total 35' Slips 40 7 $ 1.90 $ 1,596 70% $ 19,152 40' Slips 48 24 $ 1.90 $ 1,778 65% $ 21,341 46' Side Tie 55 1 $ 2.00 $ 2,310 70% $ 27,720 82' Side Tie 92 1 $ 2.25 $ 4,658 75% $ 55,890 86' Side Tie 96 1 $ 2.25 $ 4,860 75% $ 58,320 $ 182,423 Annual $ 2,189,074 Combined Private & Visitor Serving Marinas $ 2,476,894 Market Support: City of Newport Beach (Balboa Yacht Basin); California Recreation; The Balboa Bay Club; Marriott, San Diego; Marriot, Coronado Bay Exhibit "C" Private Marina Visitor Serving Marina CONSTRUCTION COSTS In addition to retaining the assistance of Swift Slip to redesign the existing marina, and design the new visitor serving marina, a cost breakdown follows on the next page. Dredging has not been included in this breakdown, nor has the seawall extension at the existing marina. The Development Budget reflects those estimates by Swift, in addition to the costs mentioned above. SWIFT SLIP DOCK AND PIER BUILDERS 2027 PLACENTIA AVENUE COSTA MESA, CA 92627 TELEPHONE (949) 631-3121 - FAx (949) 631-3122 BUDGET NUMBERS FOR PROJECT SEA WALL WORK Remove wing -wall. Install 400' of seawall. Install 80' of wing -wall on west end of project to retain beach $550,000 (We haven't included dredging costs in this estimate) INSTALL NEW MARINA. Pile work (40) $64,000 Floating docks $484,500 Utilities $60,000 Gangway $4,000 Fire system $40,000 NEW DEEP WATER MARINA INCLUDING SEAWALL (We haven't included dredging costs in this estimate) REBUILD OLD MARINA Pile work $48,000 Floating docks $326,500 Utilities $50,000 Gangway $4,000 Fire system $28,000 Demolition $30,000 COST FOR REBUILT MARINA $1,202, 500 $454,496 THERE ARE NO A.D.A. ALLOWANCES IN THESE COSTS. IF A LARGE RAMP IS REQUIRED (96) TO MINIMIZE THE SLOPE OF THE GANGWAY AT EXTREME TIDES THE COST RANGE IS $50,000 TO $100,000. THANK YOU FOR CALLING SWIFT SLIP Exhibit "D" Seaside Inn Summary The cornerstone of Marinapark will be the 44 room seaside inn. The seaside inn will dominate the upper floor of the four northern buildings with a signature entrance along Balboa Boulevard. Twenty- nine of the rooms will have direct bay views. The seaside inn, retail and restaurant and marina will all compliment one another. From a commercial standpoint visitors coming to Newport Beach by either yacht or car will enjoy the flavor of an inn which will capture the essence of a ports-o-call feel. With tourism already existing in and around the pier area and on many areas of the Balboa peninsula, the seaside inn will compliment the promotion of the peninsula in a very positive way. At the appropriate time, the Developer will solicit a luxury hotel management firm who will embrace the concept of 5-star accommodations on the water in Newport Beach. That hotel manager will be responsible to fold the seaside inn into its existing promotion of hotels, and will have a track record which parallels the goals for Marinaparks inn. Daily Monthly Annual Number Room Opncy Rental Rental of Rooms Rate Rate Revenue Revenue Bay View Room 25 $235 70% $123,375 $1,480,500 Courtyard View Room 19 $185 70% $73,815 $885,780 TOTALS T.O.T. T.O.T. Rate Revenue $197,190 $2,366,280 10% $236,628 30% Hotel Management, Operation and Expenses $ 709,884 $1,656,396 Exhibit "E" Resturant Summary Elegant Resturant Newport Beach has its share of returanteurs that cater to the demanding palletes and spendable income of its residents, and of its visitors. Marinapark's unique location and its seaside architectural element make it a natural for the smaller, boutique type of resturants that have found there way into the fabric of the community. Catering to lunch and dinner patrons, resturants like the Blue Water Grill, Aubergine, and Sabatino's are just a few of the small but reputable eateries which have found success and a loyal clientele here in Newport Beach. Marinapark, with its location and its ability to attract clients both by water or by car and foot, will attract another elegant resturant which will also be low key in nature, but will develop a client base because of reputation, and location. The resturant footprint of 5,200 rentable square feet will achieve a $1.95 per square foot triple net lease rate. The only offsets to income is a 5% vacancy rate and a $.25 per square foot annual sinking fund for refurbishments on turnover. That brings projected net operating income to $114,296. Coffee Shop Diner Missing along the bayfront, are the cultures which have been created by coffee shop establishments. Whether starting your morning, grabing something for the car or meeting with friends to discuss current events and politics, coffee shops have a place in the fabric of the community. Typically surviving on relatively low cost and traditional breakfast and lunch fare, such diners in Newport as the Galley at the Balboa Yacht Basin capture the seaside reputation which is hard to replicate anywhere in the harbor. It can, however, be replicated The resturant footprint of 2,450 rentable square feet will achieve a $1.95 per square foot triple net lease rate. The only offsets to income is a 5% vacancy rate and a $.25 per square foot annual sinking fund for refurbishments on turnover. That brings projected net operating income to $53,851. Market Support: CMG Real Estate Exhibit 'Y' Office and Retail Summary Office There is a demand for bayfront office in Newport Beach which comes from local marine services, financial, creative and entrepreneurial type users. The office element at Marinapark represents a small portion of the overall income, but fits nicely into the overall design concept. Other similar bayfront office buildings command $2.00 to $3.00 per square foot per month depending on size, buildout and location. Marinapark will contain approximately 9,000 rentable square feet of bay view oriented office space, with unit sizing in the 600 to 1200 square foot range. Rental rates for office space at _ Marinapark are projected to be $2.25 per square foot full service gross. Rental expenses are projected at $.50 per square foot per month which includes a vacancy rate 5%, which calculates down to a net operating income of $1.75 per square foot. As a result, $189,000 per year is the NOI figure used in the Marinapark Income Projection. Retail Similarly, the demand for bayfront retail is primarily driven by location, however, some of the anticipated marine, quasi -retail will draw destination shoppers. With the restaurants, marina, seaside inn and a business and residential core, the public will drawn to Marinapark. Other retail on the Balboa Peninsula ranges in rate from $1.10 to $1.75 per square foot per month triple net. Marinapark will contain approximately 11,800 square feet of rentable retail space in primarily three separate buildings. The triple net rental rate use for the retail is $1.75. Allowances for a 7% vacancy and a sinking fund of $.20 per square foot annually, calcualates out to a NOI in the Income Projection of $228,094. Market Support: CMG Real Estate Group, Irvine Exhibit "G" American Legion Summary A commitment to the continued presence of the American Legion on this site represents part of the "balance" the Marinapark proposal brings to the Balboa community. The Newport Harbor Post #291was established in 1924. They moved to the current site in 1936. They constructed their Hall in 1950. In 1979 it was destroyed by fire, but reconstructed in its present form just a year later. Over the years the Legion's presence has garnered great support from its neighbors. It is an integral part of the community. Under our proposal, the Legion will not be making any financial contributions for the use of the 8,600 square feet we have set aside for their new Hall. They will be responsible for their utility use, interior maintenance and other expenses will be the Legion's responsibility. Current users of the marina will continue to be able to rent slips, at a market rate. No revenue source for Marinapark has been considered from the American Legion. N O m m 3 CD Q C � m O O 3 IMPLEMENTATION SCHEDULE The following represents a reasonable timeline for the completion of the Marinapark Project. One of the major reasons our proposal includes the retention of the mobilehome park and keeping the American Legion on site, is to avoid the long term delays, legal processes and political mayhem that would result from attempting to removing them. It is also our desire to maintain an income stream to the City during the entire entitlement and construction phases of the project. Avoiding that loss of income, we believe makes this project much more viable than one that seeks to supplant the current tenants. There are, however, a great many difficulties that may be created by the inception of this project even without expulsion of the Legion and the mobilehome residents. Therefore, the following is offered as a best case scenario and is subject to modification and adjustment. This timeline is coordinated with the development milestones listed. DECISION BY CITY COUNCIL TO PURSUE CONCEPTS OF BENDETTI PROPOSAL 1. Coordination with City Staff on design criteria, compliance with City General Plan, environmental, zoning and planning requirements. 2. There will also be ongoing dialogue with City Council as the Council requests. Timing - 6 to 12 months ACCEPTANCE BY STAFF AND COUNCIL OF PROJECT CONCEPTS 1. Beginning the entitlement process with the City and with the Coastal Commission. 2. The process will address the three programs of development: The commercial element, the reconstruction of the existing marina and development of the new visitor serving marina and the enhancement and infrastructure work for the mobilehome park. Timing - 10 to 14 months. ENTITLEMENTS APPROVED BY ALL AGENCIES 1. Implementation of a development agreement based on approvals. 2. Presentation to appropriate agencies, final plans for processing of the project. 3. Finalization of financing for the construction phase of the project. Timing - 6 to 9 months CONSTRUCTION OF IMPROVEMENTS 1. Demolition of current improvement on Balboa Boulevard, removal of the American Legion Hall. Timing - 2 months 2. New visitor serving marina and rehabilitation of existing American Legion marina. To begin simultaneously with # 1. Timing - 4 months 3. Construction of boardwalk, rehabilitation of mobilehome park gas and utility systems. To begin in coordination with the marina construction, probably after the completion of the seawall and bulkhead. Timing - 4 months 4. Construction of parking structure, to commence at the end of the demolition of the current American Legion site. Timing - 4 months 5. Construction of commercial and hotel element, to commence 2 months after the start of the parking structure. Timing - 9 months 6. Construction of Residential element, to commence after completion of demolition work on Balboa Boulevard. Timing - 9 to 12 months Overall timing for acceptance and entitlement - 22 to 35 months Construction of all improvements - 12 to 16 months t N C fl y 3 THE BENDETTI CONSULTING TEAM The consultants listed below include award winning architects and engineers, local contractors who are outstanding in practice and keyed into the community and legal counsel with expertise in municipal law and operation. We believe they compliment the Bendetti Company team well. We note below those who are currently retained and those we have either consulted with in preparation of this proposal or we have working relationships from past projects. Other experts will be added as our progress necessitates. ARCHITECT William Hezmalhalch, Architects, Inc. 17875 Von Karman Suite 404 Irvine, CA 92614 (949) 250-0607 This award -winning Irvine based architecture firm has the experience and expertise to design a project that will be recognized for a its ability to assimilate into the community that is Balboa. Denise Ashton, Senior Planner and Jeffrey Chelwick, Principal/Multi-Family Design, are the leaders for this project. This firm is currently under retainer. Further details about the firm are included with this proposal. MARINA DEVELOPMENT Swift Slip - Dock and Pier Builders 2027 Placentia Avenue Costa Mesa, CA 92627 (949) 631-3121 Peter Swift, principal of the company, has 25 years experience designing and constructing marinas and other water based projects. This firm, based in Costa Mesa, has long term experience working in Newport Bay and is familiar with the design and construction requirements of the City. He is experienced in the entitlement process including representation before the City of Newport Beach, and the California Coastal Commission. This firm is currently under retainer. TRAFIC ENGINEER WPA Traffic Engineers 23421 South Pointe Drive Suite 190 Laguna Hills, CA 92653 (949) 460-0110 Jim Sommers, Principal PARKING Walker Parking Construction 4700 Von Karman Suite 100 Newport Beach, CA 92660 (949) 553-1450 Walker is one of the largest builders of parking structures in the United States. Their expertise will be critical to the project. We have consulted with Randy Paulson, Director of Business Development, for the preparation of this proposal. LEGAL Joel Kuperberg Rutan and Tucker 611 Anton Boulevard Suite 1400 Costa Mesa, CA 92626 (714) 641-5100 The processing of a plan such as Marinapark will, no doubt, require legal expertise on various levels. Mr. Kuperberg has that experience. He is currently a City Attorney and counsel for several water and other districts in Southern California. We have consulted him in the preparation of this proposal and plan to continue to rely on his services as the project progresses. Other members of the development team will be added as this proposal works its way through to approval process. The resumes and qualifications of the development team assembled to date are included as noted above. o� Q0 �9p n T NJNJ BASIC QUALIFICATIONS The Bendetti Company Chairman, Donald L. Bendetti, and President, Robert D. Bendetti, have a combined 51 years of development experience in Southern California. Through those years, whether in robust economy or not, Bendetti has enjoyed a good financial relationship which its partners and lenders. Together they have developed over 3.5 million square feet of commercial space, and have built and sold over 1,000 homesites in its manufactured housing communities. All developments have been of institutional grade, and Marinapark will be no different. Their approach to development is conservative and realistic. The foundation of their development principles is to be realistic about the financial picture through market knowledge and research, and avoid the temptation of developing for the wrong reasons. As such, Bendetti has been more a "holder" of real estate, rather than a merchant builder. Their approach to Marinapark is in keeping with those goals. The long term viability of this project, and the realistic investment model, indicates that Marinapark, given its ideal location, will weather downturns in the economy much better than other forms of investment. Combined with the pride of ownership that will be associated with a "Class A" institutional development like Marinapark, this will also be a long term hold. A number of the Bendetti developments listed below are on leased land. Bendetti understands the relationship that lenders have toward leased land, and the expectations of its past and current ground lessors. Bendetti's ground lease experience has resulted in a win/win relationship with its property owners. With commercial, hotel, manufactured housing, custom residential and a marina all on one site, Marinapark is a unique development that will require experience in development and coordination, strong financial relationships and understanding of the more intricate elements of a project which contains a mobilehome park on leased land. Bendetti will compliment its track record with proven professionals, such as a hotel operator which can focus solely on its business of promoting and enhancing the seaside inn at Marinapark. Another member of the development team is Bill Mecham. Bill's contribution to the development team will be valuable in dealing with the land owner as a municipality, and in moving Marinapark through the entitlement and approval process. He has a unique understanding of the processes of municipal government. Prior to joining Bendetti in 1991, Bill had been a consultant for cities, and a consultant representing clients before cities. In addition he has more than eight years experience as a City Councilman and Mayor. This background gives him the ability to work closely with staff and, where needed, the City Council. In a project as politically sensitive as Marinapark promises to be, Bill has the skill necessary to interface with each of the interested parties involved. The following are a sampling of quality developments, which exemplify Bendetti's appetite to stay involved in a project, rather than to build and sell: • Cerritos Industrial Park NWC Artesia Boulevard and Marquardt Cerritos, CA 1,020,000 square feet 80 Acres Built: 1971 Sold: 1987 City Contact: Ali Solomon, City Manager • Lincoln Center Mobilehome Park SEC Lincoln Boulevard and Bloomfield Avenue Cypress, CA 305 Homesites 32 Acres Built and owned since 1968 Developed on leased land City Contact: Alice Angus - Planning Director • Fernwood Mobilehome Park 10550 Western Avenue, Stanton 165 Homesites 21 acres Built and owned since 1975 Developed on leased land City Contact: Mark Lloyd, Development Services Director • Alondra Business Center 165,000 square feet mixed -use 7300 Alondra Boulevard, Paramount 11 Acres Built: 1984 Sold: 1993 City Contact: Pat West, City Manger • Ontario -Pacific Business Center 4019 Guasti Road Ontario, CA 11.2 Acres 248,000 square feet mixed use Build and owned since 1989 City Contact: Otto Krietell, Redevelopment Director • Americana Mobilehome Park 16600 Downey Avenue, Paramount 171 Homesites 22 Acres Built and owned since 1971 Developed on leased land • Garfield -Pacific Business Center Various addresses, Paramount 262,000 square feet 14.7 Acres Built and owned since 1970 Current Projects planned or under construction: • Airport Distribution Center 1500 Milliken Avenue Ontario, CA 221,000 Square feet 10 Acres Under construction • Indian Hill SWC Dina Shore Drive and Du Val Cathedral City Golf Course Community with 641 homesites Design and plan stage The above list represents a sampling of planned and completed projects, with some city contacts. More detailed information and references will be made available upon request. FINANCIAL QUALIFICATIONS It is not possible to have had the successful development track record, whiteout an impeccable reputation, credibility of its principals, and equally important are good ongoing relationships with financial institutions. Marinapark will be no different in that its success is built on its ability to be funded. With 51 years of experience, Bendetti has enjoyed a reputable relationship with varied financial institutions, ranging from construction and long term institutional lenders, to financial partners who understand and share in the development risk. There has never been a Bendetti development which did not get built because of lack of funding. Bendetti does not believe in pipe dreams, so it does not pursue developments which will be difficult to fund. Even in the early 1990's and the early 1980's, when the economy was in a downturn and credit was tight, Bendetti was still able to procure financing for its projects. A list of specific contact names will be provided under separate cover, but they will include recent and ongoing relationships with the following institutions: • Wells Fargo Bank, Irvine • Bank of America, Irvine • City National Bank, Irvine • Union Bank, Irvine • Shearson Leahman, New York • Farmers 8s Merchants Bank, Long Beach • Haverford Financial, Los Angeles • Keystone Mortgage, Los Angeles • Connecticut Mutual Insurance • Fortiss Insurance Company • G.E. Capital • Alexander & Baldwin Because Marinapark is in the infancy stage, and subject to revisions, the development has not been presented formally to any of Bendetti's financial relationships. However, if the City would like the Developer to demonstrate more specifically the ability to procure financing, a financial letter of interest will be procured. Marinapark is an institutional quality development, and with Bendetti's financial resources, experience and track record, along with the many incredible and exciting features associated with this development, all will combine to equal a financially viable long term landmark in Newport Beach. WILLIAM HEZMALHALCH A R C H I T E C T S I N C. Land Planning FIRM PROFILE Design Architecture Since inception of the firm in 1980, WILLIAM HEZMALHALCH ARCHITECTS, INC (WHA) has offered physical land planning, architectural design and construction documentation services with the responsiveness, efficiency and accountability its clients can rely on, regardless of market conditions. The firm's goal is simple and uncompromising; to address each unique program and financial parameters accurately, with a personal commitment to expeditiously come to conclusion, and strive for a successful outcome. WHA has applied these guidelines to many successful developments including a diverse range of single- and multi -family residential types, active adult and senior housing, community and specialty properties. The firm operates with highly accomplished and accredited senior level professionals. Each principal takes an active "hands on" role throughout the process, which includes a personal ongoing review of design and construction documents. A superior caliber of innovation complements this comprehensive approach with each project receiving original design concepts that blend talent, experience and imagination with thoughtful analysis of the market and their long-term lifestyle needs. WHA is committed to the client's success. To meet this end, the firm addresses the individual objectives for each project with professional expertise, design innovation, cost-conscious solutions, on -time performance and communication to effectuate appropriate and marketable solutions. The firm is set up with four design disciplines consisting of: 1) physical land planning, 2) community theming / architectural design guidelines, 3) multi -family, and 4) specialized architecture which includes single-family homes. These disciplines are separated to focus on the variables inherent with each project type, and to integrate expertise for comprehensive services on multi -disciplinary or mixed use developments. The firm supplements these disciplines with expertise in color and materials design, selection and coordination, as well as presentation graphics. The combination of land planning and architectural design services is crucial to the long-term success of every project. Together these services provide seamless integration between the community and user product to attain optimum land and product market value. WHA's land planning discipline offers an extensive range of services at both the macro and micro levels. Whether it be feasibility or land use studies, agency processing, master planning, site specific planning, design guidelines, topographic / grading studies, yield studies or site analyses, this discipline is expertly staffed to execute each project's specific requirements. At WILLIAM HEZMALHALCH ARCHITECTS, INC., a balance of land planning and architectural diversity, expertise and unsurpassed performance is a working reality. Active professional memberships include the National Association of Home Builders, International Council of Building Officials, National Association for Senior Living Industries, and several chapters of the Building Industry Association. Several of the firm's professionals are members of the American Planning Association, Urban Land Institute and varying Building Industry Association Councils. 17875 Von Karman Suite 404 Irvine CA 92614-6256 4695 Chabot Drive Suite 101 Pleasanton CA 94588-2756 949 250 0607 Fax 949 250 1529 925 463 1700 Fax 925 463 1725 WILLIAM HEZMALHALCH A R C H I T E C T S I N C. FIRM PHILOSOPHY Determined to meet the development challenges of the future, WHA is dedicated to a continuous evolution of excellence. An exceptional organization has been thoughtfully orchestrated to deliver a broad balance of services and execute the entire land planning, design and architectural process. A superior level of senior professionals, with a unique blend of skills and talents, has been assembled to capably create a diverse range of distinctive project types. Committed to client success, WHA addresses the specific objectives of each client and comprehensively analyzes each project to identify site and market opportunities for an effective outcome. WHA capably interprets the client's needs into an aesthetic design expression that is objectively creative and original. A progressive approach to future demand is ensured with the use of highly advanced technology, and a creative design development program to continuously evolve innovative land and architectural concepts into responsive solutions for tomorrow. WHA's innovation, team philosophy, understanding of market and construction costs, adherence to budgets, and unsurpassed performance has led to a history of successful communities. Founded in 1980 with offices in Irvine and Pleasanton, California, WHA specializes in the shaping of communities and residential neighborhoods through feasibility studies, physical land planning, community theming, design guidelines, architectural design and development, and color and materials design and selections. Land Planning Design Architecture 17875 Von Karman Suite 404 Irvine CA 92614-6256 4 4695 Chabot Drive Suite 101 Pleasanton CA 94588-2756 949 250 0607 Fax 949 250 1529 925 463 1700 Fax 925 463 1725 WILLIAM HEZMALHALCH A R C H I T E C T S I N C. FIRM SUMMARY Company: WILLIAM HEZMALHALCH ARCHITECTS, INC. Architecture and Land Planning Founded: 1980 Locations: Northern California: Southern California: 4695 Chabot Drive, Suite 101 17875 Von Karman, Suite 404 Pleasanton, CA 94588 Irvine, CA 92614 Telephone: (925) 463-1700 Telephone: (949) 250-0607 Telefax: (925) 463-1725 Telefax: (949) 250-1529 Personnel: 87 Employees 19 Registered Architects; 9 Land Planners; 1 Certified Interior Designer Services: Feasibility Studies / Agency Processing Land Use Analysis Site Specific and Master Planning Site and Yield Analyses / Studies Planning Design Guidelines Architectural Design Guidelines Community Theming Conceptual Programming & Product Development Comprehensive Design and Production Color and Materials Design Selection and Coordination Architectural and Planning Presentation Graphics Sales / Leasing Brochure Line Art Graphics Sales / Leasing Office Graphic Architectural / Planning Exhibits 3-D Modeling Focus: Community & Neighborhood Land Planning and Architectural Design Residential Design (Single -Family & Multi -Family Housing Types) Seniors Housing -- Active Adult, Age Restricted/Retirement and Apartments Recreational, Daycare & Other Community Facilities Low- and Mid -Rise Commercial and Office Buildings Elementary Schools Executive Suites / Inns / Bed and Breakfast Firm Affiliations: National Association of Home Builders; International Council of Building Officials; National Association for Senior Living Industries; Building Industry Association Technology: AutoCAD 14 Land Planning Design Architecture 17875 Von Karman Suite 404 Irvine CA 92614-6256 4695 Chabot Drive Suite 101 Pleasanton CA 94588-2756 949 250 0607 Fax 949 250 1529 925 463 1700 Fax 925 463 1725 on f-e .TQl4oa J eninsUfa �V. J 1'O�OSQl-�LYIJI23Iff�'dfO.' Gify of 96wpoll. edc 3300 �eer�p rl JJoufeoalyd )Cewpol f --(13eac.1---, Gal�o1121a 92hSS-s91S ` 11enfion.• 6112' ar012 &)000; 7ISSISfal2f Gtfy'Mal2a9er Ji'o,00sdl c_S'r1lrniffedlc�. TWU GOminunifies 20201 cS. .�Jrr'c cSfreef, 6wie 2S0 ewporf T)edcl Galtollua 92h60 712012e.• (949) 2-4-0222 GO121ac1' 17Z1: J1ic al d }faff 3e&-udly 4M-, 2000 on hfe _'31af6_oa J enlnsufa Introduction n response to the Request for Proposals (RFP) for the Marina Park future use/ development plan, RHC Communities (RHC) is pleased to present the following Marina Park Reuse Plan. RHC began this process with the intention on creating a win -win opportunity for all involved stakeholders, including the City of Newport Beach, the residents of Marina Park estates, the Girl Scouts of America, the Legiormaires and the Balboa Peninsula community. Features of the Plan eatures of the plan are intended to reflect the goals and policies of the City's General Plan, key provisions of the City's Local Coastal Plan, California Coastal Act and community and stakeholder interests. ❑ Retention of the Marina Park mobile home community with improved hardscape, landscape and limited reconfiguration, to accommodate open space and recreation areas. ❑ The incorporation of a visitor -serving use including a boutique hotel not to exceed 100 rooms. The hotel would maximize the Newport Bay location and views of the water. ❑ Construction of new, like size and shape facilities for the American Legion, Girl Scout house and Balboa Community center. 7XG GOMMUnllies J__3roposallo lnl e Giy of xemoorl ZeacA age / Marina Park Reuse Plan ,M lle `Talkioa 1A' mnsa /a ❑ The improvement of year -round visitor Performance Indicators parking opportunities with the creation of on -site parking facilities through the The performance indicators for the construction of a two -story parking project are identified below: structure. ❑ Land uses would increase the view ❑ The provision of roof top tennis courts corridor from Balboa Blvd. to Newport and basketball courts on the parking Bay. structure available for public use. The parking structure's visual impact would ❑ New public open space/ recreation areas be lessened through the use of a stone adjacent to the Bay. fagade and ivy or similar vegetation. ❑ Visitor serving, revenue generating ❑ An increase of visitor access to bay front accommodations. Newport Bay through the creation of public recreation ❑Tidelands mitigation space, including a children's achieved and consistency with playground and scenic view the California Coastal Act of 1976, area, from Balboa Boulevard. ` %W#"%M~ et. seq. �I ❑ The rehabilitation of the existing : ❑ Neighboring property uses boating facility and limited expansion to complemented by project results. include options for a community marine recreation center. ❑ Additional revenues, direct and indirect to the City of Newport Beach. ❑ If desired by the City, the creation of affordable housing opportunities in ❑ Architectural styles modeled after the conjunction with the Marina Park mobile historical significance of the Balboa home community. Peninsula's early period. t r s t t t i t c E' t t T J!C Communilies 54w) saho I e C,/, of Xempo i 7e,,,6 W Aye 2 E The Stakeholders HC has identified the following parties as stakeholders in the project: => Residents of Marina Park mobile homes => The American Legion and veterans living in Newport Beach => Girl Scouts of Orange County Residents of the Balboa Peninsula => Current and future businesses of the Balboa Peninsula Visitors and recreational users of the Balboa peninsula Marina Park Reuse Plan on I e Zagoa Jeninsula Marina Park Reuse Plan Project Considerations RHC considered each of the three scenarios described in the RFP and proposes a modified option number two. This concept presents the best land use plan for all involved parties. Key considerations: ❑ Re-use/future development consistent with surrounding land uses ❑ Long term economic benefits to the City of Newport Beach ❑ Significant community support ❑ Increased recreational opportunities ❑ Eliminate issues of parking deficiency ❑ The desire to avoid displacing long term residents ❑ State Lands and Coastal Commission acceptance of re -use plan => City of Newport Beach residents and tax payers Recognizing the issues still pending with regard to the Tidelands boundary determination and the State Lands Commission, of equal importance is the strong support of the residents in Marina Park as well as the surrounding residential areas. Architectural and Design Issues n considering this RFP, RHC desires to plan, design and construct a project of significance both architecturally and historically. Efforts are being made to research the %��{C Communities 73roposallo l ie Gy of xemporl J3eacls '%aye 3 Marina Park /� Reuse Plan on the Bal&U '/P6,/a sv early period of the Peninsula and prevalent architectural styles. Building exteriors would incorporate the use of natural materials and where possible, mature landscaping would be used to maximize the appearance of the project as having been in place for an extended period of time, rather than appear as new in -fill development. Project Team he project team has been carefully assembled for the Marina Park Reuse Plan. Some of the key members are listed below: Developer: General Partner: Financial Adviser: Project Accountants Tax Consultant: General Counsel: Disposition Marina Park Partners LLC, to be formed RHC Communities Paramount Realty Advisers — Mr. Steve Whyte Novogradac & Co. Riordan & McKinze Cox Castle Nicholson (Gary Downs) Preferred lease term to be no less than 55 years. Marina Park Partners LLC, will be the principal and retain project ownership and operation of all facilities, except the hotel. The hotel operator will be carefully selected in consultation with the City of Newport Beach. The purchase of uplands, cost adjusted for deed restrictions of certain uses, is to be considered. 2ylc commummu Propwaho IFie Gi Y.Jxew' o l Zeacs Faye 4 s Marina Park Reuse Plan on llie J3af&oa Jeninsula Marina Park Reuse Plan Implementation Timeline CommunityForums.................................................................... Project site plans and elevations complete ............................... CommunityReview.................................................................... Project Application to City.......................................................... Mitigated Negative Declaration or EIR....................................... Planning Commission Hearings ................................................. City Council Approval................................................................. Coastal Commission................................................................... Construction Drawings............................................................... Plan check and building permits issuance ................................ Site Preparation - pending approvals ....................................... Hotel & parking structure construction ..................................... American Legion, Girl Scout house & Community Center construction.................................................................... Park, boat slip and visitor serving areas rehabilitation ............. Project Completion *** April 2002 *** Marina Park Reuse Plan: Project Description March 2000 - May 2000 June 2000 June 2000 - July 2000 August 2000 August - September 2000 September 2000 October 2000 January 2001 February 2001 May 2001 June 2001 July 2001 - Dec 2001 July 2001- Jan 2002 January 2001- March 2002 The Marina Park re -use plan includes a mix of land uses intended to balance economics, land use and community issues. The primary components of the plan are: ❑ A 100-room boutique hotel and 5-star restaurant with outdoor dining ❑ Retention of the Marina Park mobile homes ❑ Provision for relocation of the American Legion Club and Girl Scout Club on the property ❑ Increased parking, with the construction of a two-story, non -obtrusive parking structure ❑ Limited expansion of the boating marina ❑ Relocation and expansion of the family park on the property ❑ View and pedestrian corridor from Balboa Blvd. into the property ❑ Public tennis and basketball courts on top of the parking structure It is intended that the basic components proposed by RHC Communities represent a concept for the site and that additional refinements will be made during the planning process. 7't}lC Gomurtunilies Jnoposailo lnie Lily of 'Yea,,00,-! eacFt %age 5 AU 41 y. L. .., - !- .iJ��iii ?di �; Financial Impact Summary Marina Park Reuse Plan on isle Zaf6oa %eninsuia Contingencies: summary the proposed lease terms Approvals form all regulatory agencies and conditions are provided below for the City's consideration: Lease Term: 55 years Lease Payment Schedule: Phase I — Prior to certificate of occupancy for hotel: $100,000 down payment and annual pay- ments of $700,000 paid in equal monthly installments, due on the 1511 of each month, Phase II — Following Project Completion Annual lease payment of $1,100,000 paid in equal monthly installments, adjusted annu- ally in accordance with the Consumer Price Index (CPI) as published in the Wall Street Journal, no cap to CPI adjustment. Additional revenues include: Transient Occupancy Tax: $280,000 Restaurant Sales Tax: $ 80,000 Total New Project Revenues: $1,460,000 General Terms: RHC Communities will: ❑ Underground all power lines within the project envelop ❑ Construction and establish of an assess- ment district for maintenance of public recreation areas, except tennis courts, adjacent to the hotel and marina facili- ties. ❑ All site preparation, demolition, and surveys to be completed by RHC City of Newport Beach will: ❑ Approve all plans and specifications and will not reasonably withhold such ap- provals. ❑ Publicly support the reuse plan and represent such support to other regula- tory agencies. ❑ Indemnify RHC against all claims arising from any misuse of public facilities, including but not limited to; marina, tennis courts, public playground and recreation areas. %�}iG %mmunilies 7+oposailo lie Oily of �empor•! ✓3eachi Ja9e 9 Marina Park Reuse Plan nn /lie .7 all a Aenms.la Qualifications and Financials A L complete brochure outlining RHC Communities qualifications and a financial 1 statement is attached to this proposal. Summary HC is positioned to deliver a superior quality reuse project for Marina Park. In summary, the project's benefits are listed below: ❑ The project is sensitive to all stakeholder interests • The project is consistent with Coastal Act's emphasis on visitor serving land uses • The project is of financial benefit to the City of Newport Beach , ❑ The project is sensitive to the Marina Park mobile home community, with no displacement of residents r ❑ The project provides additional active and passive recreational open space opportunities ❑ The project affords significant new parking opportunities ❑ The project will gain support from the surrounding community We work forward to working with the City of Newport Beach on this exciting project. Contact: Mr. David E. Rose RHC Communities 20201 S.W. Birch Street Suite 250 Newport Beach, CA 92660 Phone: (949) 224 -0222 Fax: (949) 224 -0223 Additional references available upon request 9ufc Qommundki Y- ropWa %/o I e C, y a`xezpor/ Death 50a9e 10 RHC COMM UNITIE S February 3, 2000 City of Newport Beach Attn: Sharon Wood 3300 Newport Blvd. Newport Beach, CA 92658-8915 Re: Marina Park Reuse Plan Dear Ms. Wood, RHC Communities is pleased to present the following Marina Park reuse plan. RHC's intention is to create a win -win opportunity for all stakeholders through insuring consistent land use with the adjoining community and future development of the Balboa Peninsula. We achieve this through the following: • Reconfiguration of the Marina Park Mobilehome Estates. • Relocation of the American Legion Hall to a comparable bayfront location and construction of a new facility. • Construction of a new Girl Scout house and community center. • Development of a boutique hotel containing approximately 100 rooms, including a five star restaurant with outdoor patio dining and banquet facilities. • A 2 story unobtrusive parking facility with rooftop tennis and basketball courts, located on Balboa Blvd. • Creation of a bayfront park and playground encumbering approximately one acre of land, with view corridor from Balboa Blvd. • Renovation and upgrade of existing marina facilities, including the construction of additional boat slips. Our project goals were intended to be consistent with the objectives defined in the RFP by the city. We do however believe a successful project is dependent on community support and involvement. RHC intends that the basic components of this proposal represent a concept for the reuse of Marina Park and adjacent lands. We believe that additional refinements will be made or suggested through the public planning process. We are excited about the opportunities that the Marina Park reuse plan presents. RHC believes that a partnership between itself, the City and community of Newport Beach will insure a successful reuse of this vital coastal asset. Sincerely, David E. Rose Chief Operating Officer DER:tc 20201 S.W. Biiu:li SIREEr, SUITE 250 0 Nr:wrulz-r BEACH, CALIFOKNIA 92660 0 949.224.0222 0 FAX: 949.224.0223 CREDIT FIRST SUISSE BOSTON February 2, 2000 City of Newport Beach 3300 Newport Blvd. Newport Beach, CA. Re: Marina Park, Newport Beach, CA. Ladies and Gentlemen: Credit Suisse First Boston ("CSFB") has received a financing request from RHC Communities ("RHC") to finance their acquisition and construction of the above referenced property referred to in that certain Request For Proposals ("RFP") that was solicited by the City of Newport Beach. Over the last 18 months CSFB has funded in excess of $50,000,000 to RHC, consisting of fixed rate permanent loans, interim loans and structured mezzanine financing. Over the last 15 years RHC has carved a niche in the California manufactured and multi- family housing business. They have proven to be extremely successful in the development and management of high visibility properties. RHC and its principals have a proven track record of owning and operating institutional type assets. CSFB is very excited about being given the opportunity to work with RHC on this project. In the event you have any questions or need any additional information, please do not hesitate to call my colleague Mark Zytko at (310) 481-2881 or myself at (310) 481-2880. Sincerel / Eric Vice cc: Mark J. Zytko EJH/aay Yip'" - 6- .. j _ � ,�, _ �'a ..� mac- e r - •-- � �'i.-. - � r - � __. _ /.�':'�. �, r - ems.: -tom. - "•� ��..`-'. yip ► �s, � '� �.�; ... �` __` ,.-ate _ .t. � a+1'+►;� � Kr Al- WkE �• , �-��••fi�'�� .�..�+�r� oar zi ,�.,. ,yT TABLE OF CONTENTS Executive Summary Section I RHC Portfolio Section II Industry Publications & Articles Section III A C H ., .� RHC COMMUNITIES Company Profile RHC Communities (the "Company") is based in Newport Beach, California. The Company is one of the largest owner/operators of manufactured housing communities in California and is a significant developer of affordable housing in the State of California. Over the past 15 years, the Company has developed a reputation for creating exceptional values in both manufactured housing communities and apartment complexes. Since its inception, the Company has acquired and managed nearly 2,000 apartment units and 4,000 manufactured home spaces. Founded by Richard A. Hall in 1979, the Company initially focused on the brokerage of apartment properties in Los Angeles and Orange Counties. Four years later it began acquiring apartment complexes in conjunction with institutions such as Fidelity Federal and Valley Federal. These properties, primarily located in Southern California urban areas, were purchased at prices based on value added opportunities where the company's market and operating expertise could enhance value quickly. Between 1983 and 1985, The Richard A. Hall Co. acquired approximately 2,000 apartment units in 13 projects for more than $70 million. It later sold all of these properties for more than $95 million between 1984 and 1987, thereby realizing net profits in excess of $23 million in 4 years. In 1985 the Company expanded its focus and acquired its first manufactured housing community, located in San Juan Capistrano, California. RHC Communities quickly recognized the investment opportunities unique to manufactured housing communities and began to concentrate exclusively on the acquisition of communities which met certain acquisition criteria. Since 1985 the Company has purchased 25-manufactured housing communities with approximately 3400 spaces in California at an approximate cost of $150 million. Investment partners and lenders have included wealthy individuals as well as major financial institutions such as Merrill Lynch Hubbard, John Hancock Life Insurance Company, Heller Financial, Boston Financial and Credit Suisse First Boston. In 1997, the Company developed a strategy to acquire, rehabilitate and own apartment properties in California financed with tax exempt bonds with equity provided from low income housing tax credits. In 1998 and 1999, the Company acquired five properties totalling 672 units with bond purchases and/or credit enhancement provided by U.S. Bank; Municipal Mortgage and Equity; and ARCS Commercial Mortgage for Fannie Mae. Equity for all of the projects has been provided by Boston Financial Group. RHC's affordable housing team also includes the San Francisco accounting firm Novogradac & Company; the Los Angeles law firm Cox, Castle & Nicholson; and the Seattle affordable housing consultants Pacific Housing Advisors. Over the next three years, the Company expects to acquire three to four new affordable housing projects per year. CORPORATESTRUCTURE RHC Communities has approximately 70 employees. The Company typically employs one manager or a two -manager team to oversee the on -site management of each manufactured home park. Assistant managers, clerical and other support staff are also hired to aid the managers in addressing the needs of residents and in maximizing cash flow from property operations. Three regional property supervisors are responsible for all on -site management and report directly to a Director of Property Management. Complementing the field management staff are 10 corporate employees, supervised by the Chief Operating Officer. The Company's employees pool their significant experience and knowledge to locate and analyze current and prospective projects, as they work to maximize value in each investment. The Company has engaged third -party management companies to manage its affordable housing portfolio. KEY PERSONNEL RICHARD A. HALL Founder and President Richard Hall graduated with a B.S. degree in finance from The University of Southern California and began his career in 1970 selling residential real estate for Forest Olsen Homes, Inc. In 1975 he became a partner at JLM Realty where he personally handled several million dollars of annual home and apartment revenues in the Los Angeles area. In 1981, Mr. Hall formed a partnership specializing in apartment properties in Orange County, where from 1981-84 he represented more apartment sales than any other broker. In 1983, Mr. Hall formed a partnership with the Lincoln Financial Group and in the next three years joint -ventured over $95 million of real estate with two major Savings and Loan Associations. His success in each of the 13 joint ventures enabled Mr. Hall to begin acquiring investments as a principal and in 1985 he purchased his first manufactured housing community in San Juan Capistrano. Mr. Hall began concentrating exclusively on the acquisition of these communities and established The Richard A. Hall Company in 1979. RHC Communities, LLC was formed in 199, of which Mr. Hall is the Managing Member. Mr. Hall is a member of the Manufactured Housing Educational Trust (MHET), Wester Mobilehome Association (WMA) and Mobilehome Park Alliance. He actively participates in the local government of several cities, particularly the Chambers of Commerce is Laguna Beach and La Habra. DAVID E. ROSE Chief Operating Officer Mr. Rose brings seventeen years of diversified real estate experience to the company, in the areas of finance, development and management. He began his career with Shearson American Express as a real estate analyst. He later became the Vice President, Director of Real Estate for a savings & loan where he was responsible for overseeing a portfolio of both existing and to -be -built projects and operate a diversified real estate portfolio with properties in California, Oregon and Washington. Mr. Rose oversees operations of RHC Communities and all related companies and affiliated entities, as well as creates acquisition and financing opportunities. OPERATIONS AND CONTROLS Project Selection and Acquisition Process In its search for suitable acquisitions, RHC Communities conducts extensive market studies of each targeted geographic location. Key employees participate in professional affiliations and industry organizations in order to target possible investments and to stay abreast of all factors affecting the future of the industry. Once a potential property has been identified, the acquisition team internally performs a complete Level I due diligence and marketing study which is subjected to a detailed review process. This review includes a survey of local rental and housing costs to determine market rent, exploration of local politics, review of the books and records, utility review, development of a pro -forma economics, preparation of a tenant profile and a physical inspection. A decision will also be made regarding the anticipated holding period and the likely residual outcome. If the Company chooses to proceed, the financial partner is approached with a proposal. After the partner becomes involved, Level II due diligence commences which includes finalizing the marketing, pro -forma and management plans, contracting the environmental, structural and engineering reports, and conducting the survey, appraisal, lease audit and legal research prior to the closing of escrow. Value Creation Process RHC Communities enhances value through management in a number of ways. First, it stresses the importance of homeowner relations. Each property has a manager living on -site who responds to residents' concerns. In addition, the Company holds regular parties and meetings to encourage homeowner participation and to communicate plans for the community. Second, the Company utilizes its extensive experience and skill in negotiating leases. Management carefully structures each rental increase program with the specific needs of the homeowners in mind, such as physical improvements to the property. Further, RHC Communities aggressively maximizes higher rents through tenant turnover, charging the highest rents to new tenants rather than existing ones. Fourth, the Company's knowledge and application of the legal and legislative issues assures helpful advice and intelligent decision - making. Fifth, an in-depth understanding of the entitlement process enables the Company to choose from a menu of exit strategies including dispositions to tenant groups and 501(c)(3) Non -Profit Corporations or redevelopment. Sixth, RHC Communities is structured to provide adequate and detailed accounting and management information in a timely fashion. COMPANY STRATEGY After acquiring its first manufactured housing community in 1985, RHC Communities recognized the unique opportunities existing in this property type. The Company developed a detailed acquisition, management and exit strategy which seeks to maximize the superior returns attainable through manufactured housing. Under its acquisition plan, RHC Communities purchases only those communities which meet specific criteria. First, the Company targets manufactured housing communities where the cost of the property is less than the value of the land if vacant. Second, the supply of vacant land or other housing communities in the area must be limited. Third, the costs of alternative housing such as apartments, condominiums or single-family homes must be significantly more expensive than both the coach payment and the land rent combined at that community. Under the Company's management strategy, the returns on each investment can rise dramatically after close of escrow at carefully chosen properties. This strategy includes an aggressive program of maximizing rental increases well above the rate of inflation while maintaining 100% occupancy. The rental income stream is secured by the cost of a tenant's home, because manufactured homes lose value if removed from a community, the tenants will always make the ground rent payment in order to preserve the equity in his coach. In each property there is no depreciation on the land, capital improvements are limited to minor items such as clubhouses and streets, and vacancies or concessions are rarely incurred. Therefore, the advantages of the Company's management program include the creation of predictable annual rental increases and expenses that are easy to estimate and control. While the community is held for future appreciation or redevelopment opportunities, RHC Communities earns a very high yield on its initial investment. At the end of the investment holding period, the Company has several exit strategies. The first option is to sell the property to another investor. Due to the secure and rising income stream discussed earlier, the Company realizes a substantial profit. The second alternative is to sell to a homeowners associations or non-profit corporations. Because a tenant will pay more to own his land than a third party, this can be a more profitable alternative than the first. The third option is to convert the property to its highest and best use. OTHER MANAGEMENT ACTIVITIES Other management activities of RHC Communities and its affiliates include the following: Affordable Housing Resources, Inc.: Affordable Housing Resources, Inc. (AHR) was founded by Richard A. Hall in 1992 to assist RHC Communities in selling several of its housing communities to cities within California. Recognizing the growing need and demand for cities to preserve affordable housing by acquiring existing communities, AHR recently expanded its operation to assist cities and other property owners with the cities' acquisitions of communities. Entirely owned by RHC Communities, AHR's unique operation includes several RHC Communities employees, manufactured housing community managers, former city officials, tenants conversion experts, bond underwriters and governmental affairs specialists. AHR has assisted in the sales of nine communities totaling $52.6 million. In addition to providing substantial, low -risk fee income to its parent company, AHR is also an invaluable source of up-to-date market information, industry contacts and potential acquisitions. A b 0 z H O r 0 RO(2- PL)kT-Fb U 0 PROJECTS ACQUIRED BY RHC COMMUNITIES PROJECT LOCATION PROPERTYTYPE MHP-SPACES APT UNITS YEAR ACQUIRED STATUS Capistrano Terrace San Juan Capistrano MHP 154 0 1985 View Park La Habra MHP 143 0 1986 Sold 1993 Cherryfield Paramount MHP 117 0 1987 Sold 1992 Park La Habra La Habra MHP 107 0 1987 Sold 1993 Buena Park Manor Buena Park MHP 85 0 1988 Towne and Country Concord M-P 166 0 1988 Sold 1998 Bayscene Chula Vista MHP 126 0 1989 Dana Point Marina Dana Point MHP 91 0 1989 Sunrise Terrace Arroyo Grande MHP 300 0 1989 Sold 1995 Treasure Island Laguna Beach MHP 266 0 1989 Country Place Fullerton MHP 78 35 1989 Mulberry Santa Clarita M-P 109 0 1990 Sold 1999 Continental Hayward MHP 198 0 1990 Bahia Garden Grove M-lP 176 0 1991 Sold 1993 Santiago Estates Sylmar Mf 303 0 1991 Sold 1995 Chatsworth Imperial Chatsworth M-P 184 0 1991 Mountain View Estates Upland M-P 68 0 1992 Sold 1995 Westminster Apts Westminster APT 0 55 1992 Adobe Mobile Lodge Concord MHP 77 0 1994 Diablo Mobile Lodge Concord MHP 73 0 1994 Club Marina Baypoint M-P 156 0 1996 Orangevale Townhomes Orange APT 0 64 1997 Copacabana MHP La Verne MHP 173 0 1998 Del Nido Apartments Santa Rosa APT 0 206 1998 Paradise Ranch Casteic MHP 94 0 1998 Seal Beach Trailer Park Seal Beach MHP 127 0 1998 Park Trailer Homes Long Beach MHP 87 3 1998 Mcbride Apartments Santa Rosa APT 0 80 1999 Woodside Court Apts Fairfield APT 0 129 1999 Shadowbrook Apts Selma APT 0 192 1999 Santa Rosa Gardens Santa Rosa APT 0 ill 1999 COE 4/2000 Total Number of Spaces/Units 3,458 875 CAPISTRANO TERRACE SAN JUAN CAPISTRANO, CALIFORNIA —own 19 ACRES 9154 SPACES Z-1 i - - ,EEL. INV Ar - - ism AW y+ �n mac• �y S7�•-+• - ��,.-� �E"..-� 'rig •r 111291 V r _ F s X: t r a /7-7-- ��" ,r!- _h. �`+'S� . ', .: •fir _ _ - _ r 17, Irls '+�sSi. i R Z - - . t 'i •arlG --' � Q .�G.i• f. �� ) .,'.. rR:.2ty�' ^ ^^- '-� � - ... _ - . - -Q id• . .' 1 + _ p -_ ;..� F � � _ _ "' .. .. J .. �' ^ e._ _� ".e, - •a:so' --, - ,alto. �_.;�p.ri •ye _ _ fbi�: �g - '� - -��.-.ice �iirr�r-,�� •a. �" a=•__ - J� _ �'` .� �'� ,�r,�e�a °�"•!�i'�'a�y3--�^ ma's• sa- � ;,,�•$� � ^��.ic ? 7ir"sir�a�-_'___ - -^ _ .., ':cam' '---- '*"_ - �!s .- f w � - � �"'.• �� � �,^ ice`: - .. . _ • _ _ _ _ � +. ?4".. '^' •' � - '..i•"-,Ar�?,^ ..1 � .�:' ._ _ � a .--R• +.: ' v, _�l � � T � : �..�.. Yr._/ � - ';}-p'i4 . - "�'' ;�•_ f��`1r�l�A►YiR� -�• y _ _ - r.Air - .m.�r �►c�x,ilBrr,.Hz• r,_. 1r. r�,Y- .` - •fit `� 1, �; . - _ ^ a .,. ow. -24 . - �,� _ � ;'�.�-'� " '.s•� ,fir .yam � � '+..:� � T ;t - %�C� •�"„�' _ - `• 7� y��� _ Tr .�,. - .'�•!t is , /; �,I ' All h � 4 :"v.[-, � 016, 7 � ' act^. .._. .-1n-. _.•-. ..... ..,.. ._. "_ _ ... � �CR:►�- _-'y�F•'. - - t 5: _ _ � Ilk, f•,,r �' ,j _ At, AWN IL ®. n AK �`, re .i t ■ 1 1 t � r Al fmT * ir 'Ilk lar- A, ". .- or iLA. -010 AA I QT ti szq v. I�4'�TF '' •. ne �•• Fx. ��; •i' r y`'" �.: x*� we Si iF t�^�eyE^• "0't - '� d--- - � - — - � ► 1 ,_- ' �., ;�i ' ' } .off. _ . a '� eis, ,.e •� _ :AAW maw,3 .e►r, ' 4 , �a1 CL UP 'NHR I NH MOBILE HOME PHR" Bay Point, California SUBJECT PROPERTY —1..; THE KEY TO EXCELLENCE Open Monday thru Friday 9:00 to 6:00 Setu rckiy 10:00 to 2:00 1300 N. Shaffer • Orange, CA Katella `un srlccl ,lulls • Newly Renovated Kitchens • New Carpeting • New Landscaping • Swimming Pool & Playground Under Construction • Central Air & Heal • Cable Ready • Fireplaces In All Units • Refrigerators In All Units • Generous Closet Space • Patios & Balconies* • Caring On -Site Staff • Water & Trash Paid • Garages w/Storage Available • Assigned Parking • LaLmdry Facilities • On BL1Sline • Near Orange Mall • Close To Anaheim Pond • Minutes From The 55 Freeway • Close To Schools Townhomes HOUSEHOLD MAXIMUM INCOME 1 $27,660 2 $31,560 3 $35,520 4 $39,480 5 $42,660 • ' • 111 z to y y C A b0 M> y O z W AD 1kousw Pu�ie�i�cNs The Apartment Report""cL's T CRITTENDFN PUBLISHING, INC. • P.O. BOX 1150 • NOVATO, CA 94948 - CUS ONIER SERVICE: (800) 421-3483 Vol. 8, No. 14 July 19, 1999 WEST COAST INVESTOR EYES AFFORDABLE HOUSING RHC Apartment Properties Inc. makes a bigger move into the affordable housing market by closing three separate deals totalling $16.85M for a trio of market -rate California complexes with 450 units that will be renovated and converted to affordable housing. The deals include the $4.5M purchase of the 80-unit McBride Apartments in Santa Rosa, the $6.6M purchase of the 129-unit Woodside Court in Fairfield and a $6.9M deal for the 193-unit Shadowbrook Apartments in Selma. RHC financed the purchases with a combination of taxable and tax-exempt bonds, and 4% low-income housing tax credits. Occupancy in all three properties will be restricted to tenants who earn no more than 60% of the area median income. RHC began investing in affordable housing last year when it bought two other California complexes. The company raised $6.475M for its latest round of acquisitions through the sale of $8.14M in tax credits to Boston Financial. It raised another $4.5M from the sale of bonds through a private placement to Minneapolis -based U.S. Bank and $6M through the sale of bonds to MuniMae. The bonds were issued by the California Statewide Community Development Authority. The McBride Apartments in Santa Rosa is around the corner from the 209-unit Del Nido Apartments that RHC bought last year. The McBride complex includes four two-story buildings with a mix of eight studios, 41 one -bedroom apartments, 23 two -bedroom and eight three -bedroom layouts. Amenities at the Class B property include a swimming pool. RHC Properties will spend $1.14M on a rehab of the fully occupied complex. This includes the construction of an office, plus roof and stucco repairs, and exterior paint. The Woodside Court complex in Fairfield was 89% occupied at closing. RHC expects renovation costs to average about $603 per unit. RHC will spend about $1,500 per unit to rehab the Shadowbrook Apartments in Selma. The 98% occupied complex includes a mix of 32 one -bedroom apartments, 149 two -bedroom units and 12 three -bedroom layouts. Planned renovations include new appliances and flooring, interior and exterior paint, stucco repair, the replacement of balconies and other wood, and renovations to the clubhouse and office. Average monthly rents will drop from $454 to $425. Crittenden's Manufactured Housing Community Report RHC Takes Sole Ownership Through Two Refis A leading investor in manufac- tured housing communities takes out a loan from Solomon Smith Barney to refinance two South- ern California communities so it can buy out the interests of two separate partnerships. RHC Communities put $5.6M debt on the 91-site Dana Point Marina manufactured housing community in Dana Point, Calif., and $7.5M on the Lassen West community in Chatsworth, Calif. with 184 sites when it took out a 10-year loan that amortizes over 30 years. The loan on the Dana Point Marina was fixed at a 7.5% interest rate and represents 80% of the value of the property. Dana Point Marina sits on 8.82 prime acres of land in a tony Orange County coastal commu- nity where stick -built home prices average around $300T. The community has just 91 homesites. But most of the homes are doublewides and RHC Communities plans to transform the property to a higher quality community over time. The company installed the first two- story Lido Cottage at the Dana Point community last year. ming pool and a clubhouse. The 100% occupied community was built in 1972 and acquired by RHC Communities as a 50% partner in 1989. Rents range from $680 a month to $750 a month. Tenants pay their own water, sewer and trash bills. The owner submeters gas and electric utilities. RHC Communities bought out Lassen West Partners to take over sole ownership of Lassen West community in Chatsworth with $7.5M. Solomon wrote the loan to 80% LTV at a 7.8% interest rate for a 10-year term that amortizes over 30 years. The 1967-built community about two miles from the 118 Freeway was acquired by the RHC Com- munities -led partnership in 1991. The 19-acre park suffered signifi- cant damage in the 1994 Northridge earthquake and $1.2M has been spent to replace the totally demolished clubhouse and swimming pool area and to redo streets and landscaping. RHC Communities will spend another $600T to install a new 10 amp electrical system. The park falls under Los Angeles The property on 8.82 acres is just county's rent control ordinance one block from Doheny State and rent increases historically run Beach. Residents have access to 3% to 10% on turnover. They the beach from a private pathway now average $440 a month, not owned by Dana Point Marina. including utilities. Cashflow from Other amenities include a swim- rent supports a 1.20 DSC. ta nnotpenni-tted. Wtenalmay not be reproduced in whoie orin part m any orm Wha f" Buyer Picks up Two California Communities Newport Beach, Calif. -based RHC , Inc. scores two acquisitions with the December closing of its purchases of California manu- factured housing communities with upside potential. RHC's strategy is to invest in manufactured housing communities and apartments exclusively in California where it finds that local rent control ordinances are generally not a hindrance to profitability. RHC expects to be able to nearly double rents at the four -acre, 127-site Seal Beach Trailer Park it purchased for $3M from the estate of the park's developer. The 30-year- old park is the only one in Seal Beach and is about two blocks from Orange County beaches at the border between of Orange and Los Angeles counties. RHC's other acquisi- tion is of the 97-site Paradise Ranch in Castaic through a distress sale. The $1.7M cash purchase of the northern Los Angeles County property includes 300 acres that RHC bought while the seller was in foreclo- sure. Only 80 of the 300 acres are'develop- able because of largely hilly terrain. RHC will expand Paradise Ranch by 25 sites as soon as its receives county approvals. The remaining developable land may be turned into other manufactured housing communities or stick -built housing subdivisions. RHC usually finances its acquisitions with Credit Suisse First Boston (CSFB) but turned to Tokai Bank of California since CSFB was out of the market when RHC made the acquisition. Tokai Bank provided a three-year, $2.4M interim acquisition loan for the Seal Beach Trailer Park. The loan represents 80% of the property's value (LTV). The bank based the interest rate on Prime plus 1% for an effective rate of 8.75%. Rents that average $300 a month support a 1.12 to 1 debt service coverage (DSC) ratio. RHC intends to take rents to between $500 and $600 a month because they are far below market. The park's developer and the city of Seal Beach recorded an agreement to keep 80% of the homesites affordable but the agreement has never been executed to set rents at an affordable level for the Orange Continued on Page 4 Buyer Gets California Communities... Continued from Page 3 County MSA, and the affordable rate was not calculated. Occupancy at the family park is 100%. Seal Beach Trailer Park's only amenity is a 2,500 s.f clubhouse with a kitchen and entertainment space. RHC plans no improvements because the park is in tip-top condition. It does plan to make $1 M in renovations at Paradise Ranch beyond expenditures to expand the community. Renovations will include upgrades to water and septic systems, road resurfac- ing and the installation of lighting and landscaping. Paradise Ranch includes a clubhouse, swimming pool, tennis courts and hiking trails. The property has two quarter -horse race tracks, 60 stables and equestrian trails. Paradise Ranch will have 35 homesites available for rent after expansion because 10 existing sites are vacant. Crittenden Is Wall Street Mortgage Report The Insider's Weekly Briefing on Mortgage Conduits & Securitization First Boston Books Big Mobile Home Park Deal Credit Suisse First Boston funds a 10-yyear, $40M mortgage for RHC, Inc. to finance the investor's purchase of three California mobile home parks and to refinance five of its existing communities. The commitment includes a $2M cashout. The investment banking giant fixed the rate on the loan at 7.5%. RHC's payments are based on a 25-year amortization. RHC's three newly -acquired properties include the 34-year- old, 198-site Continental in Hayward; the 38-year-old 109- site Mulberry Mobile Home Park in Santa Clarita; and the 34-year- old, 173-site Copacabana community in the eastern Los Angeles County town of La Verne. RHC already owned partial interests in the Hayward and Santa Clarita properties. It used $10M of the loan proceeds to buy out joint venture partner John Hancock Life. The Hayward park occupies a 17-acre site near a Bay Area Rapid Transit station. The 9.7- acre Santa Clarita park is near Interstate 5 north of Los Angeles. RHC paid $3.85M to buy the 13-acre La Verne property from the Hendricks Trust. Of PNa o, ("E ORANGE 10 z C OFFICE OF MAYOR PHONE: (714) 744-2200 • FAX (714) 744-5147 March 29, 1998 Mr. Richard A. Hall President RHC Communities 20201 S. W. Birch Street, Suite 250 Newport Beach, CA 92660 REGARDING: Orangevale Townhomes 1300 North Shaffer Street Dear Mr. Hall: It was a pleasure to meet with you and David Rose to tour the Orangevale Townhomes. Having seen the deteriorated condition of the former Town and County Apartments, I am pleased to see the project's transformation into clean, attractive, affordable housing. On behalf of the City Council, I would like to express our appreciation for your commitment to the project and to the City. We are glad that we could facilitate the renovation by approving the issuance of bonds by the California Statewide Communities Development Authority. The City values private/public partnerships such as ours. Please let us know if we may be of assistance to you in the future. Sincgcely, Jbamle Coontz� i Mayor q:/econdev/mel/Itr mayor -hall ORANGE CIVIC CENTER 300 E. CHAPMAN AVE ORANGE, CA 92666-1591 P.O. BOX 449 RHC C O M M U N I T I E S Given the economic ups and downs of the `90s, today's investment professionals have been forced to scrutinize their "report cards" when examining real estate performance Time and again, despite dramatic market fluctuations, manufactured home communities continue to score higher than other investment property types Perspective Buying Communities Not Buildings A New Decade For Upside Opportunity For savvy investors in search of stable investment with significant yidd4 it shouldn't come as too much of a surprise that 1995 to 2005 has been dubbed the "Decade of the Manufactured Home Community." Although they lack the glamou; sizzle and allure of other investment categories, these properties'havc long been recognized as rewarding investments. The real question is, what is driving this sudden surge of interest in a property type that has been around for years? One significant reason is performance. Given the economic ups and downs of the'904 today's investment professionals have been forced to scrutinize their "report cards" when examining teal estate performance Time and again, despite dramatic market fluctuation; manufactured home communities continue to score higher when compared to other investment property types. These communities consistently exhibit the lowest national loan default rate and, during the worst real estate cycle of the decade, sustain continued rent increases without lost occupancy. That is why, now more than eve; manufactured home communities are coming into their own as the investment of choice. The Impact of Institutional Recognition SInce 1993, four major manufactured home community owners have gone public as REITs. Since that time, public interest by would-be investors of the REM existent and growing property portfolios have shed new light on this less -than -glamorous property type. The result is, after throe years of dramatic portfolio growth and performance, these REM are still going after manufactured home communities with a vengeance Wall Street's interest in manufactured home communities is unprecedented. Even though acquisition activity has slowed this year; these new owners arc maximizing profitability with their large portfolios through enhanced property management Activity is expected to resume its former pace later this year While the highly -touted REM have commanded the capital source spotlight during the last two yearly syndicators and private investors have been right on their heels taking advantage of the growing availability of capital from commercial bank; life companies, credit companies and pension funds. More importantly, these private investor groups have a distinct advantage over the REM Due to years of experience in the manufactured home community industry, they not only have a keener ability to recognize opportunity but can provide highly -experienced and specialized professional property management that can drive maximum value increases. Why Manufactured Home Communities Make Sense There are a number of compelling reason; manufactured home communities stand out as an investment RHC Communi* a leader in the manufactured home community industry, has identified the key factors that warrant a loser look at this investment niche HIGH OCCUPANCY LEVELS In major metropolitan areas, manufactured home communities experience very high occupancy rates when compared to any other investment type In California, many regions boast occupancy levels ranging from 98 to 100 percent National resident turnover for apartments exceed 55 percent per year. By comparison, once manufactured home communities are installed, 90 to 95 percent are never moved This stability Is due to prohibitive transportation and set-up costs. These costs can average $10,000 per unit, a considerable portion of a resident's equity in the home. In addition, the home's value is largely attributed to its location within an established community. Given today's shortage of alternative home sites there are few places a manufactured home could be moved that would allow it to sustain its value Instead, residents looking to relocate will sell their home in -place to new residents before considering a relocation of the entire structure. The growing popularity of manufactured homes as a housing choice can be finked to several factors: AFFORDABu= According to recent studies by the Manufactured Housing Institute (MHI), 82 percent of manufactured home buyers purchased their home because it was an affordable alternative to traditional stick -built single family homes. Changing demographic pattern; changing lifestyles and high housing costs have created even stronger consumer demand for a new affordable variety of housing choices. Simply pus manufactured home communities are this country's only true form of affordable housing Buying in a manufactured home community is one of the few options a family has to apartment living Today, a family can purchase a manufactured home including mortgage, space rent and personal property taxes for less than the next most affordable alternative - apartments or condominiums The down payment is lower; it's easier to qualify for financing and, on the average, the monthly costs are lower. In fact for most regions the monthly housing costs associated with home ownership in a manufactured home community are the same as or less than apartment rent Empak is oN Hots OwNmutmm MH1 studies indicate that 58 percent of manufactured home buyers purchased a home because they desired the qualities and futures inherent in home ownership This factory -built housing product in many ways equals the advantages of traditional stick - built housing but at far less cost to the consumer and would-be homeowner. In terms of lifestyle, manufactured homes closely resemble single family communities They provide privacy, stability, pride of ownership opportunity for individual expression, a sense of community and detachment despite the fact the land is rented. BROAD APPEAL: Manufactured homes currently represent a wide spectrum of architectural stylcs interior decors and amenitics and come in sizes ranging from 600 to well over 2,5W square feet This diversity means manufactured homes meet the demands of a wide range of homeowners from first-time buyers to retirees and "empty nesters." There is also an increasing number of young singles and families choosing this affordable housing option. LIMITED COMP13TMON The high demand and limited supply of manufactured homes in major metropolitan areas will continue. Moreover; it is unlikely new manufactured home communities will appear in these areas due to existing shortage, zoning barriers and pricing of land. Since conventional housing cannot be produced at a comparable cost to manufactured home communities it is also eliminated as competition. LOW DELINQUENCY When a tenant is granted occupancy in the community, they have committed to make a significant capital investment to acquire the home that is situated on the leased home site While the home remains the personal property of the tenant the value of their property is only preserved if it remains on site As noted, once the home is moved off the property, it loses most of its value In California, state civil codes provide that if a manufactured home tenant does not pay rent in a timely manner the landowner may cause the removal of the home from the community. For obvious reasons, tenants are unlikely to jeopardize the equity in their home As a further stop gap to delinquent}; unless the tenant owns the home without debt the mortgagor; referred to as the "legal owner", with an interest in the home stands behind the collateral If a tenant should fail to pay rent the lender will cure the default rather than lose the collateral securing the loan LOW OPERATING EXPENSE RATIOS Manufactured home communities typically enjoy a 10 to 15 percent operating expense ratio advantage over comparably -sized apartment projects. In 1990, the national average operating expense ratio for manufactured home communities was 37.8 percent For garden apartments, the ratio was 51.5 percent The manufactured home community ratio is even lower in major metropolitan areas due to higher home site rents in these areas With virtually no costs associated with interior or exterior unit maintenance, operating costs are not only much lower but are easily controlled and projected with greater precision. Since manufactured home communities have better income and expense leverage than other property types their break-even levels are lower than apartment and office properties bringing more yield to the bottom line Therefore, manufactured home communities increase in value faster than most other property types. GREATER UPSIDE POTENTIAL Home site rental income accounts for about 95 percent of an owners revenue stream Rental income growth comes from two major areas yearly adjustments in rents of existing tenants and rent increases accompanying tenant turnover. At a minimum, the standard home site lease provides for annual rent adjustments that take into account inflation increases in park expenses In some communities where there are no long-term leases (rental agreements in excess of one year), rents may be escalated at the discretion of the landowner. In the event of tenant turnoveS rents can be adjusted to recoup any disparities between current rent levels and rent paid by previous tenants. "Disparity" is the operative word in this product type. No other leased investment type has as much rent disparity from project to project oS in some cases within the same community. This disparity is a function of two unique conditions First, rents are not always market driven, instead, they are landowner driven. The level of rent that is charged is largely dictated by the type of property owner In an industry that is still dominated by "mom and pop" owners the lack of investor and management sophistication has resulted in undermarket rents Second, low turnover within each park means space rents usually fall behind the market long before an opportunity to re -rent arises. Investors can always count on rental streams that will outperform inflation levels even in a down economic cycle Moreover; since there is no expense offset to a turnover; such as paint carpet cleaning, advertising, any increase to the rent level goes directly to the bottom line Other project specific opportunities for achieving additional upside in a manufactured home community include: filling vacancics development and expansion opportunities renovation and passthroughs long-term lease negotiations implementation of social and recreational programs and instituting new management policies THE BENEFIT OF TENANT TURNOVER Tenant turnover is rarely viewed as a benefit for most investment types In a manufactured home community, when a tenant sells their homy new tenants move in at a higher rent level This market rate adjustment can range from 10 to 100 percent depending on the disparity of the previous rent from current market levels Since the homes are purchased and sold by the resident; the landowner is only responsible for approving the prospective resident Otherwise, management is not involved and no additional costs are incurred by the landowner The sale is handled through a traditional escrow process, with the rent prorations occurring within the escrow. AN APPRECIATING ASSET While the goal of purchasing any real estate investment is appreciation, a great majority of the traditional investment dollar is invested in a depreciating asset.. buildings In manufactured home communities, because the units are owned by the tenants, you are essentially investing the majority of the investment dollar in an appreciating asset.. land. RENT CONTROL For apartment buildings rent control can be a death knell For manufactured home communities however; rent control more often creates opportunity. One of the primary reasons these communitities perform so well, even in rent control, is their ability to produce positive operating leverage by increasing rents faster than increasing expenses. Savvy investors view rent control as a guarantee for an inflation -proof real estate investment Under specific conditions buying in rent -controlled cities can offer more significant upside to the owner. There are many features that distinguish rent control in this product type from multi -family rent control. • Ordinances are in place that guarantee annual minimum inflationary rental adjustments. • Unlike multi -family property, rent control does not result in unit deterioration. Since the units are owned and maintained by the resident they are more likely to apply their "rent savings" on unit upgrades and improvements • Most ordinances provide for a recapture of funds used for capital repairs and improvements to the common area. • When home site rents are restricted, homes become more valuable; therefore the collateral securing the payment of rent, tenant home equity, is greatly enhanced. • The caliber of tenant retrains high because while the rents are lower; homes in these communities trade at much higher prices than non -controlled communities of comparable quality. • A 1990 report by Real Estate Consulting Group stated that rent control can increase the resale price of a manufactured home by as much as $40,000. Buyers pay up front for anticipated savings in space rent when they chose to purchase a home in a rent- controlled community. • Expenses rarely increase at a higher rate than the controlled rents because of the limited nature of operating expenses such as non- existent unit maintenance. • These ordinances are more apt to be removed or moderated by political action or court mandate than multi -family rent control. • The lower acquisition prices of properties in rent controlled jurisdictions can generate much higher future sale profits depending on the investor's exit strategy. COMMUNITY MODERNIZATION In any leased investment, there comes a time when the leased unit requires modernization to keep up with market conditions. This renovation work is usually performed, at no small cost by the property owner in order to keep occupancy high and rents at market level In manufactured home communities however; the tenants bear the cost and responsibility of all upgrades to the dwelling units. There is an ongoing modernization process that occurs in these communities as residents seek to maximize the value of their own investment This means the landowner enjoys the modernization of the community at no cost. PRIDE OF COMMUNITY Because manufactured home community residents have considerable equity invested in the community, they take greater responsibility for maintaining their homes and common areas than an apartment tenant As in any residential neighborhood, the residents recognize that the appearance of the common areas and amenities directly affect the value of their homes. This pride of community significantly reduces the prospects for vandalism or disregard of public areas within the project which, in turn, keeps expenses at a minimum FEW "BRICK AND MORTAR" IMPROVEMENTS As discussed, manufactured home communities have very few improved structures to maintain, operate and insure. This translates into reduced operating cost and lower risk. This risk can include catastrophic events such as fire, wind -driven rain or flood, loss and obsolescence MANAGEMENT EFFICIENCIES Prior to reaching institutional investment acclaim, the manufactured home community industry was predominantly a "mom and pop" industry with few multiple property investors As such, there is far greater opportunity in newly -acquired properties for the implementation of management cff iciencies which can significantly minimize expenses and maximize revenue opportunities These efficiencies include buying poweS vendor relationships billing systems, cost controls local government relations construction expertise, collection audit procedures and implementation of community policies SUBMETERING OF UTILITIES In almost all manufactured communities gas and electric are submetered to the homeowner. In a growing number of communities the submetering of water; sewer and trash is also implemented. Accordingly, the landowner is only responsible for paying utilities for the common areas In the case of gas and electric, the landowner actually realizes a profit on the distribution of these utilities because the landowner is billed at the commercial rate while the residents are billed at the residential rate. CAPITAL IMPROVEMENT PASSTHROUGHS It is common practice in the industry and usually included in lease agreements and rent control ordinances that costs associated with capital repairs or improvements to the common areas are passed through to the residents in monthly installments added to the rent until the cost and associated finance charges are recaptured EXIT STRATEGIES In comparison, when examining exit strategies for manufactured home communities there are other unique options that can exceed the market price paid by a private investor These include TErutve Coop OR SuBmvrsrote Resident purchases of manufactured home communities, either through the subdivision process or a tenant coop have generated the highest sales prices for these investments types. In this case, the resident; committed to protecting or enhancing their equity, will effectively "overpay" for their home sites. For this reason, appraisers rarely, if eve; use the sale prices of resident purchases as comparative sales in appraising manufactured home communities because the prices are so much higher While projects are not traded to resident organizations with great frequency due to limited financing program4 there is a strong legislative push underway to appropriate more state funding programs for these conversions This fact, combined with new private market interest in resident financing will result in increased resident purchases in the future. MumcrPAL ACQurs mNs: In California, there have been several cities, since 1990, that have issued tax exempt bonds to purchase existing manufactured home communities within their jurisdictions for the purpose of preserving existing affordable housing stock and meeting state- nundated low income housing requirements Pricing for manufactured home communities acquired by municipalities have, in all c=4 exceeded those paid by private parties. Since housing agencies can finance at lower interest rues and are exempt from the payment of property tax, pricing can be much higher while still providing excellent coverage ratios on the tax exempt debt CHANCE OF USE Unlike other property types, manufactured home communities are seldom the "highest and best" use of the land. Most communities in major metropolitan areas throughout California were constructed 20 to 30 years ago before the surrounding areas were built out Now, with the scarcity of undeveloped land in these areas, there is far greater demand for other product types,. such as single or multi -family residential The RUC Communities Difference Wbile no new REIT or private investment groups entered the marketplace in 1995, a longstanding leader in the field stepped up to the "venture plate" in 1996. With more than a decade of experience owning and operating manufactured home communities in California, The Richard A. Hall Company has launched a new entity, RHC Communities, that combines its expertise and established track record with a new vision and agressive capital sources seeking to take down a substantial market share of new acquisitions. RHC Communities is poised to become the dynamic leader in this the The Future Even now current market predictions ndicatc this investment niche will continue to grow exponentially to meet demand from senior and young people who cannot afford to live in tradional single-family homes or may simply prefer to live in a manufactured home environment The "Decade of the Manufactured manufactured home community investment arena. A privately -held company, RHC Communities owns and operates 22 of its own manufactured home community investments. Formerly an apartment investment company, RHC began purchasing manufactured home communities in 1985. Since that time, it has enjoyed unheralded success in its acquisitions over the past 10 years and has developed one of the most respected property management companies in the industry. Unlike other private investment firms in this product type, RHC Communities has vast experience structuring and owning manufactured home properties with Home Community" will be a decade of significant upside potential. For investors unfamiliar with manufactured home communities, the time has come to examine opportunities outside of traditional office retail and multifamily markets and explore markets where land and community arc the common denominator or commercial, other than manufactured home communities. When a manufactured home community is situated on valuable land surrounded by more valuable usc; there is an opportunity to sell the land to a developer looking to convert it's use In this socnariq the price for the property will be much greater than one paid by an investor who plans to continue to operate the property as a manufactured home community. In addition to private developers, some California cities have recently purchased well - located existing manufactured home communities through condemnation for various city re -use projects. The prigs paid for projects in this category also exceeded those paid by the private market According to the California Department of Housing, more than 600 manufactured home communities have dosed since 1981, the majority for the purpose of conversion to higher and better use of the land by private and public development entities. institutional partners such as Merrill Lynch Hubbard and John Hancock Properties, as well as private partners. The company's goal to structure this planned growth in 1996 is based upon its belief that with the proven results of its portfoliq the strong management skills of its people and the criteria it has established for recognizing value, it can realize significant investment yields with a large portfolio expansion. When compared to RHC Communities' former apartment portfolio as well as other traditional investment types, manufactured home communities clearly stand out as the highest yield for the lowest risk. RHC RICHARD HALL • DAVID ROSE 20201 S.W. Birch Street, Suite 250 Newport Beach, California 92660 Phone: 714. 224.0222 • Fax: 714. 224. 0223 e-mail: ncc com®aol.com -:� r. The vast majority of the more than 50,000 manufac tured home communities nationwide are land lease, �+++- such as Santiq�o Estates in Los Angeles Developing and Financing in Land 0 -Lease Communities G E O R G E ALLEN evelopers of manufactured home land - lease communities provide homebuyers a high -quality affordable housing alter- native and produce a development proj- ect that can, potentially, yield higher - than -average cash flows and appreciate significantly in value. To achieve this potential, the developer must carefully identify a target market for manufactured homes and homesites; locate appropriate, low-priced, optionable and zonable raw land; secure construc- tion and permanent financing; and deliver a market - responsive community design and affordable, attrac- tive manufactured housing products. A land -lease community is one in which home - buyers own and maintain their homes, and the prop- erty owner owns and manages the sites on which the homes are located, as well as common facilities and amenities. Manufactured home land -lease communi- ties are similar to apartment developments in that they are investment properties that are expected to achieve financial returns over time. Land -lease com- munity developers may choose to retain developed communities for their own portfolios or sell them to investors. If the latter is a goal, certain considera- tions, outlined later, should be incorporated into the development process. Land -lease Communities at a Glance There are an estimated 50,000 to 55,000 communi- ties of manufactured homes nationwide; the vast ma- jority are land lease. _7anumy 1996 9 Urban Land 35 Barriers to Overcome The developer's first major challenge is to line up farsighted, patient investors with deep pock- ets and a high tolerance for risk. Allowing for some leverage, internal rates of return of 25 to 30 percent a year are not at all uncommon for newly developed manufactured home communi- ties. However, those attractive returns will not be realized until seven to ten years after con- struction commences. It normally takes several years until the cash flow from a newly developed manufac- tured home community turns positive. The de- velopment process for manufactured home communities requires sizable upfront outlays — for example, to acquire the land; install the roadways, sewer lines, and other infrastruc- ture; and build clubhouses, pools, and other common area facilities. Leasing occurs late in the development process. What distinguishes newly built manufac- tured home communities from other types of real estate development is the prolonged lease - up period. The leasing "fill -up" of manufactured home communities typically stretches out over several years. Prospective manufactured home community residents usually are wary of being the first ones to move into an unfinished manu- factured home community. In a fundamentally healthy housing market, developers might ex- pect to lease about ten homesites a month. If the first phase of an upscale manufactured home community contained 250 to 300 home - Most land -lease communities are relatively small in size. In midwestern states, three -fourths contain 100 or fewer homesites. Size is important because only when communities approach 100 rental sites do they begin to enjoy significant economies of scale in management and operation. Because they rent homesites in an investment property, residents of manufactured home land -lease communities often are compared with apartment lessees. They also are like business owners who rent commercial space in shopping centers or office buildings, because they have an equity interest (their home) that relates to their specific location. Manufactured home land -lease communities typically experience high occupancy rates and little turnover. Most manufactured homes are moved just once —from the factory to the initial installation site. According to the 1996 Allen Report, the average occupancy rate (homes installed on homesites) in land -lease communities owned by major investors is 93.6 percent. Once installed, 90 to 95 percent of manufactured homes are never moved. (Residents do move but typically leave the homes behind be- cause it is difficult and expensive to move them. Nationally, resident turnover averages 10 to 15 per- cent each year. Most departing residents sell their manufactured homes on site to new residents before relocating.) By comparison, national resident turn- over rates for apartments exceed 55 percent per year. Development Considerations Community Design, Amenities, and Infrastruc- ture. The design goal is to make the community look and feel like a well -planned conventional housing subdivision. Target market and developer preferences determine what amenities and features are included. Though minimizing brick -and -mortar improvements can help maximize profits, it is vital that improve- ments be adequate, serviceable, and durable. This is sites, it would take two to three years to com- plete the lease -up. At that point, only the first phase will have been completed and leased up, and it probably will not generate enough cash flow to yield an attractive return on the cost of constructing common area buildings and facil- ities. It is usually not until Phase II, when the manufactured home community has been com- pleted and leased up (if at all ), that the proj- ect's investors will begin to realize handsome double-digit rates of return. Source. Leonard Sahling, The Manufactured Housing Community Industry. The American Dream, Re -Engineered (New York: Merrill Lynch & Co., February 6, 1995). especially true for the community infrastructure — streets and water and wastewater connections, which are the source of most common maintenance prob- lems in manufactured home communities. Home Sales. Developers of land -lease communi- ties can decide whether to sell new homes on site them- selves or to arrange for sales through retailers. If the developer opts to work directly with manufacturers to market and sell new homes to buyers who will live in the community, the developer must obtain wholesale financing to purchase homes from the manufacturer; offer the right product selection; direct the buyer to sources of retail (chattel) financing; and hire a capable, experienced, and motivated staff. This approach will likely generate early and ongoing cash flows. Some ex- perienced manufactured home community owners, de- veloping or expanding their own raw land, have al- most financed their construction costs (excluding land) through the rapid sale and placement of new manufac- tured homes and the resulting rental income. While sales income of this magnitude is the exception rather than the rule, it is possible in very strong markets. On the other hand, overpriced or overdesigned homes; expensive or inadequate financing; slow or undepend- able factory delivery; an inexperienced, underperform- ing sales staff; or other planning or performance short- falls may create unnecessary problems and expense for the project. To minimize risk, most developers prefer to work with one or more manufactured home retailers to market and install new homes. With this approach, the developer/owner gives up the potentially signifi- cant home sales profits, but much of the risk of out- right failure is transferred to someone else —some- one who (it is hoped) knows the business better. And, as manufactured housing products have become more popular, they also have become more difficult to ob- tain in a timely fashion in some markets. Local re- tailers who have longstanding relations with produc- 36 Urban Land 9 January 1996 ers of manufactured housing generall} .i obtain homes when and where they need them. Most developers avoid designing a new manufac- tured home community as a mixture of rental home - sites and for -sale or subdivision homesites unless the two sections or phases are clearly separated. Home- owners on "sold sites" generally dislike living among renters and vice versa. Even with a tightly worded set of covenants and restrictions, it can be difficult to ensure landowners' compliance with community rules. Noncompliant lessees always face the possibil- ity of eviction; those who own their own land do not. A manufactured home community developer/ owner should consider buying and siting manufac- tured homes that are rented by the week only as a last resort to fill vacant sites during a critical time in the absorption period, or to help turn around a real estate owned (REO, or foreclosed) property in a heavily blue-collar, low-income area. In these special cases, the cash flow from rental homes literally can save the project, if the units are kept occupied and well maintained, and if rents are collected in a timely fashion. But rental units can also taint the project's image and make the community difficult to market to investors. As soon as possible, the developer should sell the rental units to the occupants —out- right or through a lease/purchase agreement. Operations and Management. Management of manufactured home land -lease communities by pro- fessional property managers is becoming the norm and is a clear indicator of the maturation of the in- dustry. More and more of the Institute of Real Estate Management's Certified Property Manager members are employed at middle -management and corporate levels of firms having portfolios of numerous manu- factured home land -lease communities. The Manu- factured Housing Educational Institute's ACM (Ac- Upside Potential: Homesite Rents Homesite rental income usually accounts for about 95 percent of the revenue stream from manufactured home communities, and the "same -store" growth in that rental income comes from two major wellsprings: yearly adjustments in the rents of existing tenants and rent jumps accompanying tenant turnover. The standard homesite lease typically pro- vides for annual rent hikes that fully reflect in- flation along with any increases in park operat- ing costs. Hence, at the very least, park owners can count on a rental stream with constant purchasing power. Rent hikes accompanying tenant turnover are the second major source of same -store revenue growth from existing manufactured home communities. When "market -clearing" rents rise faster than inflation, many experienced manufactured home community owners are re- credited Community Manage. _,rogram is graduating trained and qualified on -site managers nationwide. Land -lease Communities as Investments Income Potential. The tight supply of affordable housing in many residential markets has created a very profitable business for existing manufactured home community owners. Rents for homesites in land -lease communities vary widely by locale and specific market character- istics. In small, rural land -lease communities, home - sites can still be leased for about $100 to $200 per month. The closer the property is to an urban area — and sources of higher -paying employment —the high- er the rent, for example, $200 to 300 per month. And in popular retirement areas where land -lease com- munities offer more amenities, desirable features, and resident services, or in urban areas where there are relatively few manufactured home communities (such as the Cook County/Chicago area), rents may be $300 to $500 per month or higher. Rent is relatively simple to collect. Residents have an equity interest in their homes that they are slow to jeopardize, and it is difficult and expensive for them to move. Furthermore, unless they own their homes, a mortgagor with an interest in the manufactured homes stands behind the residents. As a rule, it takes three rental homesites in a land - lease community to produce the gross rent generated by a single three -bedroom rental townhouse apart- ment. Net operating income (NOI), however, is an- other matter. Since they have fewer brick -and -mortar improvements, land -lease communities typically en- joy a 10 to 15 percent operating expense ratio (OER) advantage over comparably sized apartments. In 1990, the national average OER for land -lease communi- luctant to boost rents in their own properties by proportionate amounts for fear of sparking a tenant revolt. But then, in the event of tenant turnover, community owners often make it a practice to adjust homesite rents to recoup any disparities between the current market -clearing rent level and the rents paid by previous tenants. Many manufactured home community own- ers and operators, however, prefer not to elim- inate these disparities entirely. One veteran op- erator explained that he always likes to "leave something on the table," that is, he sets his rents somewhat below the maximum that the market would allow him to charge, to enable residents to sell their manufactured homes quickly and at premium prices. In doing so, he is clearly nurturing his franchise. Experienced manufactured home communi- ty owners and operators also routinely keep track of alternative housing costs —apartment rents, sales prices of site -built housing, and homesite rents in competing nearby manufac- tured home communities —in the local area. Armed with this information, they try to main- tain a parity between the "all -in" cost of living in their manufactured home community versus the costs of living in these altemative forms of shelter. In setting homesite rents, some manu- factured home community owners regard site - built houses as their main competition, while other owners view nearby apartment complex- es as their primary competitors. Source: Leonard Sahling, The Manufactured Housing Community Industry: The American Dream, Re -Engineered (New York Merrill Lynch & Co., February 6, 1995). Janua?y 1996 • Urban Land 37 ties was 3 7.8 percent; for garden apartments, it was 51.5 percent. This advantage is possible only when a manufac- tured home community is full, and managed efficient- ly. In fact, a fully leased manufactured home land - lease community with more than 200 sites, minimum amenities, and operating in a lean fashion, can drive the OER down into the 20 to 30 percent range. How- ever, a mid- to large -sized community that is operat- ing at 75 percent or less occupancy and that cannot charge premium site rent will have higher operating expenses than normal and suffer significant negative OER consequences. A three -to -one ratio also applies to the staffing requirements of the different properties. Because land -lease community residents are responsible for the care of their own homes and yards, there are far fewer brick -and -mortar improvements to be main- tained, turnover is very low, and community man- agers need not prepare vacated apartments for new residents, the staffing requirements (and other main- tenance costs) for land -lease communities are signif- icantly lower than for garden apartments. It takes fewer people to manage and maintain a full 100-site manufactured home land -lease community than a comparably sized 33-unit apartment property. Additional streams of income can be generated, for example, through selling manufactured housing — related products and services (such as foundation skirt- ing materials, front and back steps, awnings, carports, heat tape and wrap, and so forth); selling homeowner insurance; brokering resale homes; offering notary value appraisal services; leasing land or retail space for shops, storage, and services; and providing goods and services such as cable TV and public pay phones. Sales Potential. The market for the sale of man- ufactured home land -lease communities to investors is strong. Inquiries from would-be investors outnum- ber serious sellers nine to one. Existing community owners are reluctant to sell unless the time or cir- cumstances so dictate. A developer building a manufactured home com- munity with the intent to sell it to an investor must consider the needs and preferences of potential buyers during the development process. The most recent portfolio statistics of the 500 major multiproperty owners suggest key planning guidance for would-be developers. In the 1996 Allen Report, the average port- folio of 155 of these owner/operator respondents con- tained 15 manufactured home land -lease communi- ties apiece. The largest owner, ROC Communities, Inc., a real estate investment trust (REIT) based in Englewood, Colorado, owns and manages 27,910 rental sites in 110 land -lease communities. The aver- age property size, by homesite count, among these owners is 230 sites. Their average overall OER ranges from 37.8 to 38.6 percent. As a genera, rule, investors prefer to buy commu- nities larger than 100 homesites. Smaller communities can be profitable, but the larger the property, the greater the investor interest and the potential sale price. To attract serious attention from the five REITs active in the business today, a community must con- tain a minimum of 200 homesites. Prices paid to developers for manufactured home land -lease communities vary widely. A newly devel- oped property in the absorption stage will likely sell for the value of the land and the existing rental in- come, capitalized at between 10 and 15 percent (de- pending on the strength of the local market). A new, fully leased community containing 200 or more home - sites that is charging a market -leading rent and op- erating efficiently in a very good market will com- mand a price of about $20,000 or more per homesite. Investors tend to look for developments with homesites that are designed to handle the larger homes that are becoming increasingly popular —very large single -section (80 feet long by 16 feet wide) and 1,800- plus-square-foot multisection homes. Net homesite densities in developments designed for sale to in- vestors should be closer to four or five homes to the acre rather than the six to ten of years past. While communities with higher homesite density are prof- itable, prospective investors/buyers want to be sure that they can replace existing homes quickly if the need arises. Except in rural areas, investors prefer communities that have access to public water and wastewater sys- tems. Tightened water quality and wastewater efflu- ent reporting standards have also influenced a trend toward use of public utilities and submetering rather than master metering of utilities for billing purposes. Finance Sources Financing Community Development. Money for land -lease community development typically comes from local lenders —usually commercial banks. Some commercial banks may be unfamiliar with manufac- tured home communities and their characteristically low home and resident turnover rates; others are un- comfortable financing a property that has so few brick -and -mortar improvements. In such cases, the developer will need to provide as much information as possible concerning market demand, the housing product, and past and projected financial performance. Other current finance sources include, but are not limited to, personal funds; joint ventures with landowners; and a variety of other partnership op- tions, including occasional project participation by a manufactured housing producer or local retail sales center owner needing rental homesites for present and future sales. A recent survey of manufactured home commu- nity developers revealed that all but one respondent secured financing from local commercial banks- 38 Urban Land • Yanuary 1996 Financing Manufactured Nome Communities Manufactured home community developers pay commercial interest rates, and the borrowed amount typically is 75 to 80 percent of the val- ue of the completed development. Lenders con- sider the occupancy rate and the development's recent and projected financial performance. De- velopers of new communities can expect to carry a deficit during the first several years. As with other types of real estate development, syndications, build -to -suit arrangements, and lender participation deals are common. The Federal Housing Administration's (FHA's) 201(lt1) program —though little used — offers a HUD -insured source of capital from commercial lenders to finance the construction of new manufactured housing land -lease com- munifies and to expand and improve existing MHCs. The 207(m) program insures loans of up to 90 percent of the project's value for up to 40 years. The loan amount is based on the number of homesites; in areas where land costs are high, loans for up to $18,900 per homesite are possible. A 207(m) loan can be used as a con- struction loan and mini -perm, allowing develop- ers to refinance with a new lender once the property is fully occupied and the cash flow is stabilized. When used to produce homes that are af- fordable to targeted income groups, manufac- tured housing developments may also be eli- gible for financial resources offered by other federal, state, local, and private sources. Exam- and that exception formed a joint venture with a city that sold bonds to underwrite the desired new man- ufactured home community. These local credit loans are characterized by: • personal guarantees with recourse; • amounts at 70 to 75 percent of project cost, in- cluding land at fair market value (80 percent if the borrower is particularly strong); • a variable interest rate tied to a published index; and • 24- to 36-month terms, with a possible extension. As with other types of development, it is easier to secure the development or construction loan if a takeout commitment is secured in advance from a permanent lender. Financing Property Acquisition. To finance the acquisition of existing communities, there are more money -chasing deals today than there are transactions being made. Most regional and national lenders are not interested in underwriting acquisition loans of less than $1 million. For a property with homesites valued at $15,000 each, and a lender willing to un- derwrite loans at a 75 percent loan -to -value ratio (LTV), the property would need to have at least 90 homesites to interest the lender ($15,000 a site x 0.75 LTV = $11,250 a site; $1,000,000 _ $11,250 = 88.89, or approximately 90 rental sites). Local lenders and contract sales or seller financing characterize most manufactured home community acquisitions. Industry observers expect debt service coverage (DSC—which equals annual NOI divided by annual debt service) and property quality/class to be two of the most important lending criteria that will apply to multifamily property acquisition loans during the last half of the 1990s. Debt service coverages vary among types of lenders, but where manufactured home com- munities are concerned, conservative lenders (such as life insurance companies) peg DSC at 1.2511 or 1.3/1. Commercial banks and savings and loan insti- ples include California redevelopment agencies' selasides of 20 percent of their annual property tax revenue to increase, improve, and preserve low- and moderate -income housing; housing authorities' substantial federal resources (such as community development block grant alloca- tions) that must be spent on activities that bene- fit low- and moderate -income persons; tax- exempt bonds that can be used to finance public improvements and land acquisition; and various state and local programs that exist to encourage production or occupancy of low- and moderate -income housing. Source. Utl Working Paper: "Manufactured Housing, An Affordable Aftemative;' 1995. tutions that have returned to this niche will work with a DSC of 1.1/1 or 1.2511. LTV ratios and loan spreads, or yields, are gen- erally considered secondary but still important fac- tors in loan underwriting. Regarding property quality and class, the outlook is gradually improving. In 1992 and 1993, four very large manufactured home community owners went public, and follow-up reporting by researchers and analysts at Morgan Stanley, Merrill Lynch, CS First Boston, and others has lent new respectability and in- creased credibility to this type of investment property. As a result, bankers are becoming more interested. The land -lease manufactured home community is a potentially powerful tool for generating cash flow and a valuable investment annuity. Once the proper- ty is fully leased, it generally enjoys high occupancy with a minimum of turnover. The remarkably low OER gives the developer/owner at least a 10 to 15 percent operating expense advantage over conven- tional apartment communities. Properly managed, this advantage can translate into a higher NOI for servicing debt and a potentially greater cash flow before taxes. That, in turn, can yield a higher cash - on -cash return. Equity buildup and value apprecia- tion over time make the investment even more at- tractive. In addition, a significant -to -outstanding income stream potential can result from the sale of new and existing homes and services to residents. :• George Allen, a manufactured housing industry consultant, is founder and owner of Indianapolis -based GFA Management, Inc.; PMN Publishing; and Scale Model Homes. He is author of several real estate —related texts, including Development, Mar- keting, and Operation of Manufactured Home Communi- ties, published in 1994 bylohn Wiley & Sons (available through ULI) and the upcoming How to Find, Buy, Manage and Sell a Manufactured Home Community, scheduled for release by John Wiley & Sons this year. Januaiy 1996 9 Urban Land 39 MONEY GUIDE You can invest in glamorous real estate or you can invest in bargain real estate. Mobile home parks are a good example of the latter. Real estate for bargai,en hunters By Thomas Easton IN REM. ESTATE, as in stocks, there are fashionable investments that trade at high prices, and there are Lultashion- able in estmcnts that don't. Rocke- feller Center is a fashionable piece of real estate. ,Mobile home parks tall into the other category. Which is the better investment? When Rockcfcllcr Center Properties, the real estate Investment trLlSt that owned the midtown Manhattan of- hce complex, was offered to the pLlb- lic in 1985 at S20 a share, people rushed to buy. They ended Lip losing most of their capital. We'll wager that most investors will be better off buying unfashionable real estate. Mobile homes are as un- 138 Forbcs ■ lunc 17, 1990 MONEY GUIDE The REIT stuff Name Recent Yield —Dividend'— Funds —Per site — price total currently from monthly price' taxable operations' rental portion Chateau Properties 221/s 7.1% $1.62 $0.57 $1.79 $283 $24,200 ROC Communities 24 6.8 1.64 0.94 1.96 234 22,700 Sun Communities 26'/4 6.9 1.82 0.95 2.25 239 23,100 With one of Manufactured Home Communities 18'/2 6.6 1.22 0.61 1.47 309 27,400 these you United Mobil Homes 113/4 5.2 0.60 0.51 0.904 250 17,000 gain liquidity 'Indicated payout for 1996, Nontaxable portion is a return of capital that can ultimately give rise to a capital gains lax. 2Net income plus depreciation; and sacrifice IBES estimates for 1996. 'Debt outstanding plus market value of common stock. 'Company estimate. return. fashionable as anything we call imag- ine. We went out looking for some- one to teach us the business. We found Nathan Benderson, a wealth\, 78-}scar-old inycstor in Buffalo, N.Y. Forced to work while barch• in his teens, after his parents had lost all their illoney in the 1929 crash, Ben- derson started out recycling beer bot- tles, then moved into breweries. From breweries he got into developing of- fice buildings, strip malls and other real estate, along the way accumulat- ing a fortune likely to be in the nine figures. In today's rather firm real estate market, Benderson saes that mobile home parks are among the best buys. Benderson owns six mobile home parks, with spaces for a combined 4,000 homes. He likes to own big ones, large enough to justilk, a full- time manager on the site. He devel- ops the sites himself —buying the land, getting the "zoning permission and bringing in water, electricity and sewage Mlles. Doing this work himself he expects will enable him to clear 30%, a year oil the money he has invested in a park. Passiyc im•cstors W110 bil\, parks that are already dcycloped have to settle for smaller returns, closer to 10% a year for an Llnlcveragcd purchase. But that isn't bad for a stream of rental income that can be jacked up to keep pace with inflation. Benderson says buyers can acquire deyclopcd parks for $12,000 per site, often with attractive financing by the seller. But VOL1 Might be better oft paying all cash and getting a better - Price. Without a mortgage, you arc less likely to run afoul of tax lays limiting wlitcofts for so-called passirc investments. Here's what's in the deal for the park owner. The park tenant typically signs a lease for at least one \,ear for $200 a month, with a 5% annual increase on renewal. The residents hayc to spend $40,000 to $75,000 for the home. Hauling it elsewhere costs another $8,000 or more, so they are loath to move out. Turnover in a typical park is usually nil, against 50% for an apartment complex. If a mobile home owner sells his home, the new owner autonlatical1v assumes the lease. Rent control laws are not a problem except in New Jersey and California, and even in "Once the park; is fiill, there isn't much to mio, just pick up the monthly check." llllllllllllllll� these states the\, are tolerable because you can get cost-orliving increases. Most tenants ncycr even dream of skipping a rent payment. If they do, the lenders assume the home and the rent payments. Mobile home parks require a bit of maintenance, but oil]\, a bit: Mow the lawn, ploy some snow, maybe do a bit of repaying, collect the rent and pay property taxes. "Once the park is full, there isn't 111LICI1 to do, just pick up the month%, check," says Bencicrson Contrast that with apartment buildings, where landlords are ex- pected to do continuous maintenance on the paint, the cicyators, the plumbing and whatever items tall onto an endless list. George Allen, atithor of the forthcoming Ham to Find, Buv, Manta qr, and Sell a Manu- factui-ed Hoaaac Community (Wile•, $75), estimates that owners ofapart- nlent buildings spend 52% of their - rent roll on operating costs, versus 38% for mobile home park owners. Owners of the smallest parks often live on -site and do all the work them- scl\,es. An ideal park fora nonresident, says Allen, would have 20 acres with about 100 developed units and an- other 20 acres that could be devel- oped, bringing the park to a size where it can be resold to a bigger participant. You would pay between $1 million and 51.5 million for such all establishment, depending on the rent roll and location. The smallest and crummiest parks can be acquired for as little as $5,000 a site, but there might not be enough rcycrLlc to hire a full-time manager. And selling is a problem. It can be trick\, to find direct invest- nicnts. A Illilubcr of states have rcL,,ll latols, agencies for mobile home parks and provide directories of properties on request. Classified ads appear in 77)c journal: Tljc Mt�gnzinc fiwMann- facturcd Hnnsinry Profecrionals (800- 869-0471, $35 a \,cal•). George Allen sells a newsletter (317-888-7156, $95 annualh•). Another option, tar less lucrative but a whole lot simpler, is to own shares in one of the fiyc publicly trad- ed real estate investment trusts that specialize in mobile home parks (sce table). Look for a yield of 6% or so, with good prospects for growth in the payout. As \,oil can see from the cftcc- twc pc --site prices —and ftonl yields well below the 10%\,oU Could get on a Park owned outright —the RFATS force \,011 to give Lip a nice piece of change to the middlemen. 140 Forbes 0 JL111c 17, 1996 ! i ' \' � 1 �� � al L. � f�t �.f��M,r� ' i I Ni 44 Ait Ilk- qw Newport Beadh R 4 PI-opoaaL to- tJelCi ty of lV~por-rtSe cu 4500 Campus Drive, Suite 500, Newport Beach, CA 92660; (949) 757-1662 Fax (949) 660-1252 TABLE OF CONTENTS Page 3 Page 4 - 8 Preface Development Proposal/ Project Description Page 9 Proposed Conceptual Site Plan Page 10 - 12 Conceptual Renderings/ Typical Guestroom Layouts Page 13 Existing Area By Use Summary Page 14 - 15 Basic Qualifications Page 16 -34 Information On Recent Sutherland Projects Page 35 - 38 Information On Recent Talla Projects Page 39 - 44 Regent International Hotels Page 45 - 46 Financial Qualifications Page 47 - 48 Development Cost/ 1st year Revenue/Cost Statement Page 49 - 61 Projections of City Revenue/ 10 Year Operating Pro -forma Page 62 - 66 Implementation Schedule Page 67 Consultant Team PREFACE Newport Beach is one of the finest beach communities in Southern California. Within a one hour drive from West Los Angeles and the Los Angeles International Airport, it is blessed with pristine beaches and the beautiful Newport Harbor. The Harbor in Newport is ringed with numerous fine restaurants and elegant estates. World -class yachts add to the enjoyment and scenery. Upscale boutiques and trendy restaurants lore residents and visitors alike to Newport Beach's Fashion Island. Balboa Islands rustic architecture and quaint streets have been a draw for visitors for most of this century. With everything that Newport has, it is surprising that it lacks a single five star hotel or even a true resort. With this in mind, Sutherland Talla Hospitality is proposing to develop "THE ZE(�EN-r - NEWPORr 3EAC}f"a Five Star Resort to be located on city owned property on the Balboa Peninsula. Architecturally styled after the 1880 built Villa Fiorentina, located on Cap Ferrat, in Southern France, the proposal calls for a low density, low rise and high quality resort which will benefit the City and it's residents in many ways. Amenities of the resort include a full world class Spa to be operated by America's premier health club developer. The Spa will be open to Resort guest and residents of Newport Beach. A Racquet Club for tennis will be developed for the use of Resort guest and residents of Newport Beach. A Sailing Club and a Rowing Club (sculls) will be open to Resort guest and residents of Newport Beach. The new Marina will be designed to accommodate "Yachts in Transit" for the use of Yachtsmen from ports worldwide. Guest docks will be available for local boaters to "tie-up" and visit the hotel's facilities. A new and extended Boardwalk will run along the waterfront from 151h Street to 18`h Street and be open to the public. The largest benefits to the community however will come from two specific items. First is the revenue that the Resort will generate for the city. With the income from the ground lease and the revenue from the Transit Occupancy Tax (based on room sales projected at $13,579,825.00 annually) the city's revenue is expected to be in excess of $2,800,000,00 per year. This does not take into account revenue from state sales tax shares from other Resort sales nor the spin-off sales from area restaurants and retailers. Maybe the most important benefit from this project will be the impetus that it has on the quality of the Peninsula. A Resort of this quality can be expected to be the "shot -in -the -arm" that the Peninsula needs. There may be avenues available that could be utilized to direct portions of the revenue generated by the Resort directly into improvements for the area. Never - the -less, the "7 WE ZE(7ENr"- NEWPORr BEACH RESORT will have a definite positive effect on the community and the City of Newport Beach. February 4, 2000 Sharon Wood Assistant City Manager CITY OF NEWPORT BEACH 3300 Newport Blvd. Newport Beach, CA 92663 Re: DEVELOPMENT PROPOSAL — MARINA PARK SITE Dear Ms. Wood, Following please find our proposal in behalf of my Design -Build -Finance group: Sutherland Talla Hospitality, hereinafter DEVELOPER, for the development of the "MARINA PARK" and related parcels, located on the north side of Balboa Blvd., between 15t" and 18th Streets in the City of Newport Beach. The major portions of the site relevant to this proposal include: the MARINA PARK TRAILER COURT, the AMERICAN LEGION POST, its related MARINA, DRY BOAT STORAGE and PARKING LOT included. The 15TH STREET PARK as well as the current PLAYGROUND will also be utilized for the development. From the list above, the PLAYGROUND as well as the 15TH STREET PARK is proposed to be improved and relocated to the MUSEUM OFFICE site and to the 18th Street end of the property respectively. In addition, the existing TENNIS COURTS will be redesigned with additional courts, converting it to a RACQUET CLUB for the use of resort guest and residents of Newport Beach. 4m -- THE PROPOSED PROJECT The proposal herein submitted to the City of Newport Beach by Developer is pursuant to the Conceptual Master Plan attached, and further described as follows: A. 156 guestroom resort hotel proposed to be operated by Regent International Hotels to be called ME95iEWNEWPORT BEACH. B. The guestrooms will be housed in eighteen Italian style villas. The resort's Lobby, Spa, Main Restaurant, Lobby Bar, Meeting Spaces, Retail Spaces (limited) and Administrative Offices will all be located in a single structure on the North-East (15th Street) end of the property. A Speciality Restaurant (3,000 s.f. gross) is at the central area of the site overlooking the main pool. C. The extensive use of Walkways, Courtyards, Loggias, Water Fountains and Landscaping will be designed throughout the project D. The Marina will be re -developed to accommodate two restored vintage yachts to be added to the guestroom count and sold as guestrooms. Additional boat slips for yachts in transit and for local boaters to tie-up and visit the property will be made available. Seven to ten Finger Docks for Yachts up 80' LWL, will be constructed. There will be no Public Marina. E. A small sailing and rowing (sculls) club will also be located here and four "hospitality rooms" will be designed near the Marina for the use of visiting yachtsmen. F. Developer will have the right to dedicate up to twenty of the 156 guestrooms for Time -Share or Fractional Ownership as long as the City's revenue from TOT income is replenished. PARKING REQUIRED BY USE A. Hotel 156 Guestrooms 78 Spaces B. Meeting & Banquet 7,600 s.f. 216 Spaces C. Main Restaurant & Bar 1,500 net s.f.. 38 Spaces D. Speciality Restaurant 1,500 net s.f. 38 Spaces E. Racquet Club 8 Courts 16 Spaces F. Spa 8 Spaces — 5 Pg.3 G. Marina 20 Side -tie Slips 16 Spaces TOTAL REQUIRED 426 Spaces PARKING TO BE PROVIDED (Subject to negotiation) A. 1 Subterranean Level 181 Spaces B. 1 Surface Level 190 Spaces C. 1 Story Structure Level 55 Spaces TOTAL PROVIDED 426 Spaces Developer's terms and conditions of the lease to the City of Newport Beach are to include the following area by use summary AMERICAN LEGION: 1.35 Acres 15TH STREET PARK: 0.42 Acres PLAYGROUND: 0.30 Acres MUNICIPAL PARKING: 0.25 Acres MARINA PARK TRAILER COURT: 4.27 Acres TOTAL: 6.59 Acres In addition, and as a part of the lease agreement, Developer shall have full use of the Marina off the American Legion property for the purpose of the construction of a Class "A" Boat Docking Facility for Sailing and/or Power Vessels up to 80' LWL. The 15`h Street public docking facility is not a part of this proposal. THE PROPOSED LEASE, TERMS & CONDITIONS: TERM: 60 Years PAYMENT DUE: Quarterly in advance T LEASE AMOUNT Years one & two Year three Years four — ten $ 800,000.00 $1,200,000.00 $1,400,000.00 CPI INCREASE: Every ten years based on the yearly CPI increase as published in the Wall Street Journal and not to exceed 2% per year. CONTINGENCY: Acceptable Developer's Market Feasibility Study. All agency approvals. FEE MORATORIUMS: Concessions toward City Permits, Bonds &Fee's to be negotiated. GENERAL TERMS & CONDITIONS: SITE CLEARANCE & DEMOLITION: By Developer GEO-TECH SURVEYS: By Developer CONSTRUCTION OF PUBLIC PARK: By Developer / Maintenance & Insurance By City PLAYGROUND CONSTRUCTION: By Developer / Maintenance &Insurance By City RELOCATION OF AMERICAN LEGION: By Developer, up to $500,000.00 Cost & Expenses REDEVELOPMENT OF TENNIS COURTS: By Developer, Insurance Rider by City for Public User's. Developer to pay Annual lease rate of $1.00. Developer to Maintain. ALTERNATIVE 1 The DEVELOPER has met with officials of the American Legion in an effort to devise a plan for relocation of the Legion Hall. Sutherland Talla has offered to build a new waterfront structure matching the square footage of Pg.5 the existing facility, on the 18th Street end of the property. Sutherland Talla would complete the site work including landscape and matching their existing on -site parking availability. Once the new Legion Hall is completed, Sutherland Talla would dedicate the structure and site improvements to the American Legion Post #291. In addition, Sutherland Talla would sub -lease that portion of the site to the Legion for the amount of $ 1.00 (one dollar) per year for a period equal to the term of the lease Sutherland Talla signs with the City of Newport Beach. If at some point in time the Legion closed that post, the improvements and sub -lease would revert to Sutherland Talla Hospitality. The Architectural style as well as the landscape design would closely match that of the Resort. Although the Legion has not accepted this offer, Sutherland Talla submits this ALTERNATIVE 1 PLAN to the City Council for their consideration. Please note that if this alternative were at some point approved, it would replace the new park at 18th Street as shown on the Conceptual Site Plan. All other elements of the Conceptual Site Plan would remain the same. On behalf of Sutherland Talla Hospitality, I am looking forward to the successful completion of this project, which in my opinion will bring exceptional financial, aesthetic as well as civic benefits to our city. Sincerely Stephen R. Sutherland Principal Partner JI/ J171 I P 111.1 I Ail' a2 �fOT�"L /2�SD/2T PILL74 fl(9REA17,-r 1,4 NEWPMTBFACf(. CALmorkMTA VIEW OF TYPICAL VILLA AND ENTRY COURTYARD 2-4- I ZOIO'-DA O 1� C] 1 N ti ^ V A m N O O i �O rc � m fi i` I I� i I i i-' IV_'S T Area by Use Summary City -owned Property 15th to 18th Street Sq Ft. Acres Use 58,677 1.35 American Legion 18,200 .42 151h Street Park 12.873 .30 Playground 60,646 1.39 Tennis Courts 24.000 .55 Girl Scout House 6 Museum Office .25 Municipal Parking 186,011 86,011 4.27 Marina Park Trailer Court AWC,D [ ror ' 55,824 1.28 Public Beach N O R T •H - _ Scale: 1' = 1200' w _ w _ - 127,080 9.80 Total —_ Use bowdnries estimated f— aedal rn aces Er _ pbo oranbe (r=�o• acaiel - iact„dea . .ed park:q. BEACH OAR, , , PARS 1 r1`7 \ I r.. — I J AMERICAN�EG'_ PgRKING IpN -� _ — MUSEUIIf GIRL SCOUT — — — — _ _._K LINE — — &I _ ANOE • �... -.f NousE 15TH STREET � —�j - TENNIS CpURTS -- PARK WEST BA T r, F Er BL VD PLAYGRI Uryp I '_-J wES'T 7_0 w x F~ F to I BASIC QUALIFICATIONS Sutherland Talla Hospitality consists of two joint venture partners. The following biographies describe their backgrounds and qualifications: Stephen Sutherland is a forty year resident of Newport Beach. Stephen has been active in the in the community for much of the last eight years serving on various committees including the Economic Development Committee, Mariners Mile Association, the Zoning Re -write Committee, the Newport Beach Restaurant Association and others. Stephen's professional experience in hotel design and the development process is extensive. As president of an international architectural and interior design firm, his client list is impressive. The award wining "CLUB DE GOLF BOSQUES" located in Mexico City, is a luxury residential development consisting of 400 units ranging in size from 3,500 to 10,000 sq.ft. The project will have a total of nineteen high-rise towers at build out. Each tower will have a roof top heliport and all residences will view the new Jack Nicklaus designed golf course the project surrounds. CLIENT; Grupo Casa, Mexico City CONTACT: Edwardo Sanchez Naverro (011-52-5) 540-6928 Photos and other information are attached. "HILTON CABO REAL" is a new 5 star destination resort currently under construction in Los Cabos Mexico. The traditional Spanish -Mexican design of the resort is blended with interiors that reflect the warm richness of a tropical Spanish residence from the island of Majorca. Its 320 guestrooms and suites over looks the Sea of Cortes and are surrounded by the Robert Trent Jones II designed Cabo Real Golf Club. CLIENT: Construccion Cabo Real, Los Cabos, Mexico. CONTACT: Eduardo Guerrero (011-52-114) 40-050 CONTACT AT HILTON HOTELS: Phillip Kipper, Vice President (310) 205-3793 Information attached. "CASA DEL MAR" is an award wining resort located in Los Cabos, Mexico. The resort consists of forty guestrooms and suites. It was designed as a true Spanish Hacienda that was magically transformed from Spain to its existing waterfront location on the tip of the Baja Peninsula. It has recently been honored with the cover of the 1999 edition of "RESORTS AND GREAT HOTELS". Copy attached. CLIENT: Casa del Mar Resort CONTACT: Alfredo Rosas, General Manager (011-52-114) 40-030 14 Pg. 2 "CARLSON PARK, SAN ANTONIO" is a proto-type development for a new division of Carlson Companies. Carlson Companies is the owner or operator of more than 500 hotels worldwide. Their brands include Radission Hotels and Regent International Hotels. The proto-type for this new division will be located in San Antonio, Texas. Due to break ground in April 2000; it will consist of a 205 room Radission Resort Hotel and 180 residences on 27 acres of pristine property. The second CARLSON PARK is planned for Scottsdale, Arizona and is currently in the planning stages. Carlson Companies expects to grow this new brand to 100 locations worldwide over the next ten years. CLIENT: Carlson Companies CONTACT: Paul Wischermann, Sr. Vice president, Carlson Lifestyle Living. (612) 212- 8563 Other recent projects include: The remodel of interiors for the Hyatt Newporter, Newport Beach, California. The complete multi -million dollar renovation of the WestCoast Waterfront Resort, Long Beach, California. Photo attached. The historical renovation of the Wyndham Grand Heritage Pickwick Hotel, San Francisco, California. Photo attached. Additional contacts: Mr. Eric Danzinger, President, Carlson Hotels Worldwide (612) 212-2513 Mr. Paul Hanley, President, Regent International Hotels (612) 212-3300 Mr. Thomas Childers, President, NorthCoast Hotels, (206) 443-5677 Michael Talla is Chairman and CEO of the Sports Club Company, a public company which owns and operates 13 clubs on the east and west coasts, including Reebok Sports Club / New York, The Sports Club / LA, The Sports Club / Irvine, The Sports Club / Las Vegas and The Spectrum Club Collection, Michael has built the Sports Club Company into one of the most profitable fitness club chains in the country. In 1994 under Michael's leadership, the company became the first of its kind to go public. It is now valued at $160 million, with annual revenue of $90 million dollars. In addition to The Sports Clubs, the company has 10 new clubs under development and has just purchased the former Vertical Club in Manhattan and has leased a site for another new luxury sports club in the world renowned Rockefeller Center. Other Sports Clubs are also underway in Boston, San Francisco, Washington D.C. and Houston. Michael's crowning achievements, The Sports Club / LA and The Sports Club / Irvine, are recognized as the finest sports and fitness clubs in the country. Information attached. 15 FOR IMMEDIATE RELEASE FOR MORE INFORMATION Brian K. Theriot Director, Marketing/Client Relations (949) 757-1662 PHASE ONE CONSTRUCTION UNDERWAY FOR MEXICO CITY'S LUXURY CONDOMINIUM RESORT - CLUB DE GOLF BOSQUES WORLD CLASS RESIDENTIAL LIVING BY STEPHEN R SUTHERLAND COMPANY FEATURES JACK NICKLAUS DESIGNED GOLF COURSE FACILITY NEWPORT BEACH, CA: Nestled within the pristine wooded hills overlooking Mexico City lies the upscale master -planned condominium community of Club De Golf Bosques. Designed by the Architecture/Interior Design Firm of Stephen R. Sutherland Company, located in Irvine, CA, Club De Golf Bosques will attract affluent move -up market buyers from within Mexico and the international business community. Nineteen exclusive, luxuriously designed and appointed condominium towers are planned with a build -out scheduled for the year 2004, with Phase One construction, the first luxury tower near completion. Residential floor plans range from 3,500 to 10,000 square feet with the top floor of each residential tower reserved for two-story 10,000 square feet penthouses. For convenience in access to and from downtown Mexico City, as well as the Benito Juarez International Airport, business executives will appreciate heliport pads located at the top of each tower, with "air taxi" service on demand. "Club De Golf Bosques is designed to meet the highest demand for upscale, world class residential and resort community living near Mexico City," said Stephen R. Sutherland, President and Founder of Stephen R. Sutherland Company. Sutherland maintains that Club De Golf Bosques will become the first preference for the affluent living styles of the active executive and the "rich and famous". "It was especially gratifying to have virtual "carte blance" opportunity to design a project with the exclusivity, privacy and luxury that Club De Golf Bosques commands." -more- Pg. 2 oft — Stephen R. Sutherland Company Proms Release Sub -level parking and around the clock guard -gated security assures total privacy to residents. "Very few times in life will a professional hotel and resort designer have the unique experience of working with a world class athlete such as Jack Nicklaus. The Jack Nicklaus -designed golf course is a signature of success and prestige to Club De Golf Bosques. Club De Golf Bosques will fast become one of Mexico's great landmarks for world class living," added Sutherland. Other recreation and sports amenities include clubhouse facilities, swimming pools, gymnasium, tennis courts and open space for walking or jogging. i7 Atlantic American Sel!s Embassy To CapStar PHII_ADELPHL'.— Atlantic American Prooerties Trust, based here. sold its interest in the Embassy Suites Cen- ter City- to Z17ashinaton. DC - based CapStar Hotel Com- pany. The `_>SS -suite proper- ty, located in the cin-'s �iar- ket Street West corridor, will under zo a S°.e rnll;on renovation. Atlantic .�neri can President James Stil'_ said the hotel 1vas sold because the company is focusing on commercial and industrial real estate., CapStar, which owns a7ic manages 66 hotels, made its 27th acquisition since goinc, oublic in August oo - with the purchase. The Drice was not disclosed. CapStar recently completed the $60 million acquisition of two other hotels. the Georgetown Inn in N'."ash- ington, DC and the Radis- son Hotel & Suites in Chica- go from Philadelphia -based Amerimar Enterprises and New Yar-k-ba n elo, -G-oirdon & Co. Mexico City Resort Under Construction IRVINE, CA— The architec- ture/design firm Stephen R. Sutherland Company is building a master -planned condominium community called Club De Golf Bosques in Mexico City. The 19-building luxury complex is expect to be Hora&sinss REAL ESTATE built out by 2004. The firm has several hotel companies as clients, including Patriot American Hospitality, Hyatt Corp.. Ritz -Carlton and Four Seasons. Mery Griffin Acquires Lafayette Hotel MIAMI— Hotel Partners International recently bro- kered the sale of the Lafavette Hotel in Miami's South Beach art deco dis- trict. The property will be Novemoer 7-20, 1997 • HB • 103 renamed the Blue Moon Hotel. Scott Stephen of the Miami office of Hotel Part- ners brokered the deal for an undisclosed price. Loca- tred one. block west of Ocean Drive, the property was built in 1934 and is list- ed on the U.S: Register of Historic Places. Diana Winovitch, an interior designer, and Bob Rang, a set designer (for TV shows "Wheel of Fortune" and "Dance Fever") will "recre- ate" the interior public space. �� tip Il�ll�.r'il' �Li!®■' .-r ,flgd Expansi'O'll y R -------------------------------------------------------------------- - ----- ------ - - ----------- - ----------- ----- - -----------------------------------------------'_ REFORMA • SUPLEMENTO COMERCIAL JUEVESt1IS DESEPTIEME Dlr F - -- ------- - ------------- DiPW senan desappollo residential que ofrece alta calidad de vida "Club de Golf Bosques es un desarrollo resi- dencial que se caracte- riza por ofrecer a sits residentes un estilo de vida diferente". Cada Torre, diseiiada por The Stephen soil lherlaud Co.' Grupe DICO11SA, c•ucnla con 21 residencias departana•ntides de ,3Sll nu•tros c•uadrados con 7lu},nu•es de eslaciona- m]cnto calla unit (dns p ira \isitanles v cinco propios): bodega, lavado de autos, trey cleva- dores, planta do luz deemergencia, Tv por oil - We y via si1tcl]tc, c helipuertu. La Casa Cluh, disc iada por sl despacho Francisco Artips Arquilectos, coenta con cinco canchas do tunis, trey canchas de D E Pud(ito tents. itlbcrca, Iestauriut- G les v bares. lodes Itis set.\'i- un O ties ncccsurios en unitins- terrc v talacitindcprimer nivel. no do ,n t� mobrc it s Gl enturuu del desa- (Ic 400 mil mc- • 'S. • rrollo. con sit cantpo. troy cua(Iru sue.• L do goIr do 9 hobos, que, dos. se ubican_ _ constr dischti c u�ti 19 torres residen- O:ate `a A .Jack Nicklaus Design, list ciales que ofrec•en QomU lus andadores purl la posibilidad (to un vs- Q it,aglin� bicicletas, inlcma tilo de vida con calidad..•u elenrentos que permith-An it Ins resk queeldwart•ollointegrralosnuisnvanza(los dcnlesdeClubdeGulfl3osqucsohtenerum sistemxs de setntridad, aunados a unu I,n•an estilo do villa c•on elevu(la calidad, denu•ot exclusividad, con todas ]its satisfoccionos de un ambiente que ](is pondl•u en comae-- que la vidit moderna requierc• to permanents con la nottu•alsza. 19 NEWS FOR IMMEDIA TE RELEASE CONTACT: Brian Theriot Vice President, Client Relations (949) 757-1662 SRSC TO DESIGN HILTON HOTELS "FIVE STAR" RESORT • NEWPORT BEACH FIRM NAMED FOR WATERFRONT RESORT IN LOS CABOS, MEXICO July 2, 1998, NEWPORT BEACH, CA: Stephen R. Sutherland Company, "SRSC", a Newport Beach, California -based hotel & resort architecture/interior design firm, announced the company's success in being named as the interior design firm of record for the new Hilton Hotel & Resort in Los Cabos, Mexico. "Our duties will include complete interior design package for all public areas, restaurants, guestrooms, and corridors," said Stephen Sutherland, the company's President and Founder. The waterfront Hilton Resort is planned for 350 rooms with SRSC providing all floorplans, detailed interior elevations, reflected ceiling plans, materials and finishes specifications, design and specifications for all case goods, specifications of all equipment for restaurants, menu design, staff uniform design, etc.. "Design and development drawings will be coordinated from our Newport Beach office while construction documents will emanate from our offices in Mexico ... we are honored to be working with Hilton Hotels Corporation and Grupo Casa," added Sutherland. -END- 9 ORANGE CouNTY BT TQ S Our2O'FAnniyersaTYear JULY 13 - 19, 1998 Construction near the Disneyland Hotel JOURNAL 51.50 The Mouse Has Coattails Disneyland Expansion Fuels $4 ■ By SUSAN DEEMER It hasn't been a small world for a long time, and it's about to get a lot bigger. As the 21st century approaches, an ■ Quiksilver ambitious series of construction projects Moving are transforming the area around Page 11 Disneyland from a major but creaky tour- ist district into a state-of-the-art entertainment metropolis. Disneyland's California Adventure expansion is nearly dou- bling the size of the 43-year-old theme park. News of the Anaheim Convention Center expansion has drawn meetings Billion Entertainment Explosion and trade show bookings through 2008. Anaheim and rounding cities are building about a dozen new hotels market where room rates have risen about 10% over the past year. Improvements to the Interstate 5 freeway include two ramps that allow direct access via West Street or Freedman Way to Disneyland; Gene Autry Way will provide easy access to area sports venues with new carpool lane on- and off -ramps; and widened transitions at the "Orange Crush" where the 1-5 meets the 91, the Garden Grove (22) and Orange (57) freeways. The city of Anaheim is pitching in by investing $546 million * Anaheim page 12 Sutherland Co. Designing Los Cabos Resort Stephen R. Sutherland Company Inc., New- port Beach, is designing a $60 million, five- star Hilton hotel and resort on the waterfront in Los Cabos, Mexico. "We've been doing quite a bit of work in Mexico over the last few years and this is a great product we are proud of," said Stephen R. Sutherland, president and founder of the 10- year-old company. The Newport Beach company, which pro- vides architecture, engineering and construc- tion management, began designing the interior of the 350-room hotel in March. Construction will begin in August and the resort is expected to open in 14 months. The company will complete the interior de- sign package for all public areas, restaurants, guest rooms and corridors, Sutherland said. The contract, which Sutherland said totals more than $200,000, also includes the design of restaurant menus and staff uniforms. The Hilton project is one of two Sutherland is designing on the four -mile beachfront in Cabo Real, Mexico. Hilton Hotels Corpora- tion and Grupo Casa are developing the entire 20-acre site, including a commercial compo- nent with boutiques and restaurants. —Susan Deemer Stephen R. Sutherland Company News Hotel & Resort Architecture/Interior Design/Purchasing/Construction Management 4500 Campus Drive, Suite 500 Newport Beach, CA 92660 PH: (949) 757-1662; FAX: (949) 660-1252; e-mail; srsi 1C a COntentnC.net R !/?. - ("",;/ ly I N C 0 R P 0 R A T E D -.".-K c . ..... VI oil 10 Casa del Mar Golf Resort & Spa Los Cabos, Baja California Sur, KOM FOR IMMEDIATE RELEASE FOR MORE INFORMATION: Brian K. Theriot Vice President, Client Relations (949) 757-1662 CARLSON HOSPITALITY WORLDWIDE & CARLSON LIFESTYLE LIVING SELECTS STEPHEN R. SUTHERLAND COMPANY AS DESIGNERS FOR CARLSON PARK "LIFESTYLE COMMUNITIES AND RESIDENCES" • CARLSON PARK PROVIDES A UNIQUE RESIDENTIAL LIFESTYLE, TARGETING A POPULATION OF ACTIVE PEOPLE 60 TO 75 YEARS OF AGE NOVEMBER, '98, NEWPORT BEACH, CA: Stephen R. Sutherland Company was recently named to the development team for Carlson Park "Lifestyle Communities and Residences", a division of Carlson Hospitality Worldwide — one of the world's largest hotel & resort operators. "We are beginning work on the Carlson Lifestyle project at Westover Hills, San Antonio, Texas. It is an absolute honor to work with Carlson Hospitality Worldwide and its Carlson Park `Lifestyle Communities and Residences' division," said Stephen R. Sutherland, President and founder of Stephen R. Sutherland Company. Carlson Park at Westover Hills is a lifestyle community to be located on a 27.25- acre site adjacent to the thirteenth hole of Hyatt's Hill Country Golf Club. This fabulous community will feature a Radisson Resort with 205 guestrooms and suites, 110 Condominiums (four Buildings), Common Service Core, Private Dining, Public Restaurant/Lounge, Conference Facilities, Health Club and Spa, Swimming Pool, Retail Shops, Administrative Offices,Housekeeping and Maintenance Facilities, and 98 Detached Villas (arranged in 8- to 12-unit building clusters. Stephen R. Sutherland Company is an architecture, interior design, purchasing and turn -key construction management company located in Newport Beach, California. SRSC specializes is services to the hotel & resort industry. -END- # - Al IrA 1-7 J+ �_ 1; p ��II L '7 .�l F' � � If;T1 � 1I 6T117■ --� ,.3� 71 ��/i�l��lt►_ � 11�T7g �/ /' —__ —r 'rt� }t � � � �=c✓3' - i �� � -(�� fie.,! ARE IVA Mom FOR IMMEDIATE RELEASE FOR MORE INFORMATION: Brian K. Theriot Vice President, Marketing (949)757-1662 STEPHEN R. SUTHERLAND COMPANY SELECTED TO RENOVATE SAN FRANCISCO'S HISTORIC PICKWICK HOTEL • HOTEL'S COLORFUL PAST INCLUDES A LINK TO DASHIELL HAMMETT'S "THE MALTESE FALCON" SEPTEMBER, `97, NEWPORT BEACH, CA: Stephen R. Sutherland Company's architecture and construction management team was recently named by Pickwick Hotel owner Patriot American Hospitality, a Texas -based hotel & resort REIT, to lead the interior renovation process for one of San Francisco's landmark hotels. Built in 1926, as the Pickwick Stage Lines, the hotel was considered the finest motor coach hotel in the United States. The Pickwick Hotel, with its familiar marquee remains a fine example of Neo Gothic architecture. Literary aficionados will appreciate the hotel's feature in Dashiell Hammet's classic, "The Maltese Falcon". "This is a classic opportunity for our interior design and construction management team," said Stephen Sutherland, the company's founder and president. "We will bring to the Pickwick Hotel a warm and rich design theme. Very unique and befitting of a world class boutique hotel." Sutherland added: "Pickwick Hotel loyalists will be pleased to know that our services will not disrupt their planned stay in San Francisco ... the Pickwick Hotel will remain open and vibrant during the renovation process." - 30 FOR IMMEDIATE RELEASE FOR MORE INFORMATION: Brian K. Theriot Vice President, Marketing (714)757-1662 STEPHEN R. SUTHERLAND COMPANY SELECTED TO DESIGN THE VILLAGE OF CABO REAL IN LOS CABOS, MEXICO. DUNE, '99, NEWPORT BEACH, CA: Stephen R. Sutherland Company's architecture and design team was selected to begin with the preliminary designs for the Village of Cabo Real in Los Cabos, Mexico. Stephen Sutherland, the company's founder and president, looks forward to having another opportunity to work at the international level. "Our team is extremely pleased. The depth of our company's experience in building hotels & resorts in Mexico definitely played a role in the selection process." According to Sutherland, great opportunties exist for future development in the Cabo Real area: "A majority of the land in Cabo Real consists of 5,000 acres of undeveloped property. We now have the wonderful chance to design a mixed -use community without the restraints of existing infrastructure design." Sutherland Company's design team is already envisioning something very unique for the area: "We will bring to Cabo Real a mixed -use village concept including upscale restaurants, world class retail establishments along with the possibility of some residential units - - all set within 25 beautiful acres.. Adjacent to the site is the Westin Regina Hotel, Melia Cabo Real Hotel, and a hotel we designed — Casa Del Mar." -continued- 3 1. Pg. 2 of 2 — Stephen R. Sutherland Company Press Release Sutherland believes The Village of Cabo Real will fast become a focal point for. tourism and leisure activities: "We do know the Los Cabos region to be a huge magnet for tourism and upscale leisure and relaxation activities. The Village of Cabo Real is situated on over 4 miles of Sea of Cortez beach front property. The geographical draw is a natural." Golfers from around the world can presently enjoy the already completed Robert Trent Jones Golf Course and delight in the fact that a Jack Nicklaus -designed golf course will surround The Village of Cabo Real. Preliminary design concepts for The Village of Cabo Real will commence immediately. B_0 cA! y BIRU'� Et E N IE%k THE VILLAGE 1T CABO REAL CABO SAN LUCAS, B.C.S.. ME.XICO PARTIAL BUILDING ELEVATION - B PARTIAL BUILDING ELEVATION - A THE VILLAGE CABO REAL CABO REAL ('%110 SAN LUCAS. B.C.N.. MEXICO 11 +--111! l ":Simply the finest sports and fitness complex in the World " • 130, 000 sq. ft. Sports and Fitness Facility • Sister Club to The Sports Club/LA and Reebok Sports Club/NY 14, 000 sq. ft. state-of- the-art Coed Weight Training Gym ■ Two 2, 500 sq. ft. Exercise Class Studios • 25 yard Outdoor Pool for lap swimming • Cardiovascular Deck — 5, 000 sq. ft. of computerized training equipment • Two full court regulation - size Basketball and Volleyball Gymnasiums • Spin • Private Training • Treadwall Rock Climbing Simulator • Racquet Sports: I 2 Regulation Racquetball Courts 4 International Squash Courts 2 Outdoor Paddle Tennis Courts • Toni & Guy Hairdressing Salon • Oasis Body Salon for men and women • Complete Spa Facilities for men and women including Steams, Saunas, Jacuzzis and Professional Massage • Large, luxurious Locker Rooms with Towels provided • Rooftop Running Track • Golf Sky Tee • Yoga • Sports Bar & Grill • Sidewalk Cafe • Conference Rooms • SportsMed/lrvine - Physical Therapy and Wellness Center • Outdoor Sundeck • Lessons - Racquet Sports, Swimming and Golf • Nutritional Counseling/ Registered Dietician • 'The Kids Club" Childcare Center for children ages 6 mos. to 12 yrs. • Players Pro Shop • Dry Cleaning, Laundry and Shoeshine Service • Valet Parking .i 980 Mainz StrecA Irvine; CA 92614 (949) 975 8400 35 ebok SPORTS CI,UB/NY AV ! 4t e 4T o �• _,\ f i '4 V" AWL % "Simply the finest sports and fitness complex in the world. " - 140, 000 sq. ft. Sports and Fitness complex - Sister Club to The - Two regulation size, - Spacious Outdoor Sports Club/LA and full court Basketball Sundeck with The Sports Club/Irvine and Volleyball spectacular city views - Four Fully Equipped gymnasiums - Activities Director Weight Training Gyms - Rooftop In -Line - Fitness Evaluation Center - 150 Piece Computerized Skating and 6-1ap to - Nutritional Counseling/ Cardiovascular Center the mile Running Registered Dietician - Two Z, 500 sq. ft. Track ■ Martial Arts and Self Exercise Class Studios - 40' Rock Climbing Wall Defense Classes - Cycle Reebok® - Core Training - Pilates - Sports Coordinator • Junior Olympic based exercise - 'For Kids Only' Child Swimming Pool with - Complete Spa Care Center underwater music Facilities For Men and . Pro Shop system Women including Steams, - Executive Business Center • The Grill at Reebok Saunas and Jacuzzis - Dry Cleaning, Tailoring Sports Club/NY - Personalized Instruction and Shoe Shine Service • Paul Labrecque Salon - Private Trainers - Training Center of and Spa . yoga Reebok Professional • Edge Training Aerial - Large, luxurious Athletes Ropes Course Locker Rooms with Towels provided 160 Columbus Ave. - Sidewalk Cafe New York, NY 10023 - Conference/Meeting/ (212) 362 6800 Banquet Facilities 3G il I EE, S P "Simply the finest sports and fitness complex in the World. " 0 1 >< T S • i wo z suu sq. rr. Aerobics Studios • Junior Olympic Swimming Pool with 8 individual lap lanes • Cardiovascular Deck with over 150 pieces of computerized cardio- vascular equipment • Full court Basketball and Volleyball Gymnasium ■ Rock Climbing Treadway • Rooftop Driving Range e C L U B / 1, jk incivaing .Steams, Saunas and Jacuzzis • Martial Arts/Self Defense Classes • Executive Boxing Workout • Private Training • Lessons - Racquet Sports, Swimming and Golf • Yoga • Large Luxurious Locker Rooms with Towels Provided Registered Dietician • 'The Kids Club" Childcare Center for children ages 6 mos. to 12 yrs. • Players High Fashion Athletic Wear • Shoeshine Service • Car Washing and Detailing • Valet Parking 1835 Sepulveda Blvd. Los Angeles, CA 90025 (310) 4731447 "Simply the f nest sports and fitness complex in Nevada," 2100 Olympic Avenue Henderson, NV 89014 (702) 454-6000 THE SPORTS CLUB/LAS VEGAS ■Sister Club to The Sports Club/LA, The Sports Club/Irvine and Reebok Sports Club/NY -State-of-the-Art Weight Training Gyms • Cardiovascular Center with over 100 pieces of Computerized Cardiovascular Equipment ■ 3, 000 sq. ft. Exercise Class Studio ■ 25-Meter Indoor Pool ■25-Meter Outdoor Pool and Recreation Area • Full Court Basketball and Volleyball Gymnasium •9 Climate Controlled Indoor Tennis Courts Pj i ■4 Outdoor Lighted Tennis Courts • Racquet Sports - 3 Racquetball Courts, 4 Squash Courts -Cycle ReebokO -Indoor Running Track -Outdoor Sand Volleyball Court -Yoga Classes Martial Arts/Self Defense Classes -Certified Private Trainers -Lessons - Racquet Sports, Swimming and Golf -Competitive and Recreational Court League Play ■ Large, Luxurious Locker Rooms with Towels provided -The Sidewalk Cafe ■ Players Pro Shop -The "Kids Club" Childcare Center for children ages 6 mos. to 12 years. ■TeenFit ■ Fitness Evaluation Center ■ Nutritional Counseling -Physical Therapy -Oasis Body & Skincare Salon for men and women -Complete Spa Facilities for men and women including Steams, Jacuzzis and Professional Massage -Richard Anthony Hairdressing Salon • Car Washinq & Detailinq IMA�ES OF 2EGElvr f(OrELS FIROX4 A'IROUND 7WE WO2LD Pr wU-k al Letter fro-vw the/ pr of IRagevi t I vt to nat'L( wLJ . Hote k to -the' Mayor of N ewpovt B each. 35 V7 REGENT INTERNATIONAL HOTELS January 5, 2000 Mayor John Noyes Members of the City Council City of Newport Beach 3300 Newport Boulevard Newport Beach, CA 92663 Dear Mayor Noyes, I am writing today to introduce Regent International Hotels. Regent International properties are located in the world's most important cities including Hong Kong, Beverly Hills, New York City, Sydney, Singapore, Las Vegas, Bangkok and Bombay. Stephen Sutherland is an architect and designer with great experience in the design of resort properties. His firm is currently working on a major project for our parent company, Carlson Hotels Worldwide- We at Regent are pleased that Stephen has selected Regent as the potential operator and manager for his resort project in Newport Beach. We have reviewed the preliminary work that has been completed and we are looking forward to adding The Regent Newport Beach to our prestigious list of international resorts. If in the fyttl�e you have any questions, please feel free to contact me at my office in Minn ea is. e look forward to Regent joining your community. WatilHanley cc: Council Member Gary Adams Council Member Jan Debay Council Member Norma Glover Council Member Dennis O'Neil Council Member Tod Ridgeway Council Member Tom Thompson I:.\11 LtiUN I'111I(16 '\1, I'.O, IS(1\ '19119. Nil NN ti,11'U 1.1 :i. MINNIiS(11'A, l'.i 1 55-1 :j'i-2t'_'1l '1'I 1.; ( 6 1 2 ) ;.'I-`.3:3()r1 I':1.N: c012) 212-:1350 1 N T EHNI T: 1)hI,nlryaerrg--n11r')1,•I•.ruIII --- 4 0 "lip , Rlw, WO i i Ab 01if � pq� Iwo i — fig" 4 i 0 01 F0 4 41 +7 ""'.— 1 )� 11 4� r "'�1 %�+ .�,�• 'fit.: ~ ::., 11-,�� �t .� �� ,�i�i -i�Q, � i ,f. ai ull I�nILI I dll�,. AptOtt t • use' delights and Western pal rh. �: I nn u1 ,Iir1 .;•,,^ ;�1,111f, II,IIr•I .III% r d ,nl rw Ir: n Lrm 01� it ,: n•�•r. ,11 1. ,nlrinn . n.�Il,lt br•r b. n, . Poisod at the edge of riagnill.—t Victoria Harbour, The Regent Hong Kong provides breathtaking views of one of the world's most awe. - Inspiring sights • Hong Kong Island. ,r.I, .ur,1)t rh.:un.ye >r.0 I, "y 11, bdurJ'' Lu.u1, Jnnv1, L, J,LnnLrnr,,nr Ir1u... .Ilnp.,u. ,urJ pr,.uu, ....,o. Iu1n.. !• 11, 1,, III 16r -ur„ ,:, 41, !,I,111.11 1.1,., q GI,I IYII Ji.n i, r. I:.1•r m„r, il�,r m .u; y rlr,l r.nrun.m,,lip,v nuunr�. 1 x' �: I' tats�r ;�rrl I re- __ k ggrlllii � :�l f 'u 5 Illy, k + ' ��yy5 a < F i i FINANCIAL QUALIFICATIONS Michael Talla is the financial partner of Sutherland Talla Hospitality. He is also Chairman of the Board, CEO and majority shareholder of The Sports Club Company, Inc., a $160,000,000.00 Million Dollar Company. Michael will lead this phase of the project. We are submitting at this time a copy of the 1998 Consolidated Balance Sheet for The Sports Club Company (1999 is not yet available). Upon acceptance of this proposal, personal financial statements will be submitted. PROJECT FINANCING Of the approximately $30,000,000.00 development cost for this project, one- third, $10,000,000.00 will be equity invested by Sutherland Talla Hospitality. The remaining $20,000,000.00 of the project cost shall be obtained from institutional lender (s) on a non -subordinated basis. 45 Consolidated Balance Sheets December 31, 1997 and 1998 The Sports Club Company, Inc. (in thousands, except share umowa.r) ASSETS 1997 1998 Current assets: Cashand cash equivalents............................................................................................. S 1,581 $ 2,233 Accounts receivable, net of allowance for doubtful accounts of $385 and $215 in 1997 and 1998, respectively...................................................................................... 2,072 2,480 Inventories..................................................................................................................... 813 1,527 Othercurrent assets....................................................................................................... 354 569 Duefrom affiliates........................................................................................................ 106 234 Totalcurrent assets............................................................................................... 4,926 7,043 Propertyand equipment, net............................................................................................... 106,791 135,269 Equity interest in unconsolidated subsidiary ...................................................................... 862 1,295 Costs in excess of net assets acquired, less accumulated amortization of $822 and $1,294 at December 31, 1997 and 1998, respectively ................................... 15,917 15,443 Organizational costs and other assets, net.......................................................................... 3,065 4,707 $131,561 $163,757 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current installments of notes payable and capitalized lease obligations ....................... $ 2,975 $ 75746 Notespayable to bank................................................................................................... 5,000 -- Accountspayable.......................................................................................................... 948 2,273 Accruedliabilities......................................................................................................... 7,985 6,227 Deferred membership revenues..................................................................................... 9,936 9,953 Totalcurrent liabilities......................................................................................... 26,844 26,199 Notes payable and capitalized lease obligations, less current installments ......................... 42,823 18,755 Notespayable to bank......................................................................................................... -- 10,940 Deferredlease obligations.................................................................................................. 2,817 2,724 Minorityinterest................................................................................................................. 600 600 Totalliabilities...................................................................................................... 73,084 59,218 Stockholders' equity: Preferred stock, $.01 par value, 1,000,000 shares authorized; no shares issuedor outstanding................................................................................................. Common stock, $.01 par value, 40,000,000 shares authorized; 14,382,621 and 20,896,623 shares issued and outstanding at December 31, 1997 and 1998, respectively............................................................... 144 209 Additionalpaid -in capital.............................................................................................. 53,613 102,361 Retainedearnings.......................................................................................................... 5,674 9,656 Treasury stock, at cost, 163,976 and 1,258,691 shares at December 31, 1997 and 1998, respectively............................................................... 954 (7,687) Total stockholders' equity .................................................................................... 58,477 104,539 $131,561 $163,757 See accompanying notes to consolidated financial statements. 46 02/01/2000 16:14 7148339217 PAGE 01 %jPITA Februa v 1 2000 1•7,,t r�JCSLIf[LE: (i49) 660-1252 Mr. Stephen I,.:;u herkmd SL-THERL �'QND-TALLA HOSPITALITY 4500 Campus Drive, Suite 500 Newport Beach, CA 92660 Ref. The Regent Newport Beach Dear Steve: 2 Pa?k Plaza, State 700 [?-vine, CA 926144517 Di rest Lal. 949,252.4519 F-z: 949. 833. 9217 rttcbo1as(dbr.rnha•,:,:alestarc.com. On behalf of Scott Calder and myself, thank you again for taking the time to discuss your hotel development project with us. We are both very excited and impressed with the design and scope of the project. Based on our initial discussions, Burnham Real Estate Services, Inc., 'Burnham" has an interest in pursuing financing options for your project. In the past two years "Btu-nham" has successfully arranged $50.8MM in construction/mini-perm debt on two separate Orange County hotel projects. We currently represent a major life insurance company, and several commercial banks, which on a preliminary basis we viould feel comfortable in recommending a conditional request for financing. Upon further review of a more complete loan request package, and subject to receipt of entitlements, and a positive feasibility study by PKF, or other similarly regarded valuation firm, 'Burnham" will be prepared to discuss possible financing options in detail. Please feel free to telephone me at the number listed above with any questions or comments that you may have. Again, we loop forward to working with you to secure financing for your hotel project. Very truly yours, Barry J. Nicholas, Jr. Investrnent Officer Transaction Services !.Asset Services ! Advisory & Consulting, Services I Development Services ! Ccrporate Services Capital Markets Member Commercial Capital Alliance e 46R Barry J. Nicholas, Jr. R. d L.au: Finanrr N E W S RELEASE BURNHANI (API 1ALMARE LP, ben, t .\ ,e(„_�-N51,- 2 2.1,1 ".r, ',; W 17 6n Niemikr Commercial Capital Alliance im h"i-ii•hurnh<un..... r �,•��i BURNHAM SECURES $30 MILLION FOR CROWNE PLAZA HOTEL IN GARDEN GROVE ORANGE COUNTY -- Burnham's Capital Markets Group, Irvine, announces that it has secured combination construction and permanent financing for a 384-room Crowne Plaza Hotel to be built on the southwest corner of Harbor Boulevard and Chapman Avenue in Garden Grove. The $30,000,000 loan was secured by Burnham's Scott Calder, Joel Gruber and Barry Nicholas, who served as correspondent for the lender, American National Insurance Company of Galveston, Texas. Crowne Plaza, a full -service, Mexican Hacienda-themed hotel, is being developed by OHI Resorts, LLC, as part of a master -planned resort development program sponsored by the Agency for Redevelopment for the City of Garden Grove. Designed by Leo A. Daly, with Summit Builders as general contractor, the hotel is scheduled to open in the Fall of 2000. Pacific Hospitality Group, a principal of OHI Resorts, LLC, is a professional hospitality management company, and will operate the hotel upon completion. Pacific Hospitality opened the newly constructed Doubletree Hotel in Irvine Spectrum on June 23, 1999. Burnham secured similar financing, in the amount of $20,800,000, for this hotel. Burnham is a leading Southern California real estate firm offering comprehensive expertise from offices in San Diego and Orange counties. In addition to sourcing debt and equity for commercial real estate projects, the firm's services include transactional services, capital markets, asset services, advisory and consulting, corporate services, and development and construction services. The Burnham web address is www.johnburnham.com. UWA - 46'2) BURNHAM Burnham is a 109-year-old real estate services firm with headquarters in San Diego, and offices in Orange County and the Inland Empire. 777e Capital Markets Group, located in Irvine- California, represents major life insurance companies, insured financial institutions and "Wall Street" conduits. Burnham is an active mortgage banking correspondent, specializing in the origination and servicing of construction, interim, and permanent real estate loans from $1,000,000 to more than $40,000,000. Our long standing relationship with the many lending institutions allows us to provide access to the most competitive rates, with the expertise to ensure proper deal structure and terms, on a variety of property types including: multifamily apartments, hotels, retail centers, industrial (manufacturing & warehouse), office, and others. A few of the Investors/Lenders represented by Burnham are. - American National Life Insurance Company Farm Bureau Life Insurance Company/FBL Financial Group Fortis. Inc. (Life Insurance Company)/Fortis Advisors, Inc. (San Diego) General American Life Insurance Company/Conning John Hancock Mutual Life Insurance Company Metropolitan Life Insurance Company/MetNet SunAmerica Life Insurance Company Transamerica Life Insurance Company Canadian Imperial Bank of Commerce/CIBC Oppenheimer Corp. Column Financial. Inc./Donaldson, Lufkin & Jenrette Company debis Financial Services, Inc./Mercedes-Benz Credit Corporation HVB Realty Capital, Hypovereinsbank First Security Bank/First Security Corporation Miller & Schroeder Financial, Inc., Investment Bankers Quaker City Federal Savings and Loan Association - 46 (� Steph -n R. Sutherland Comp ^ny, Inc. ARCHITECTURE • ENGINEERING • CONSTRUCTION MANAGEMENT ?'?E(�EN r September 7,1999 NEWPORT 13EACTf IZESO'I'Zr PRELIMINARY COST BREAKDOWN STRUCTURES a. 150 Guestrooms @ 500 sq.ft.....75,000 sq.ft.@ $125.00..................... $ 9,375,000.00 b. 10 Suites @ 1,000 sq.ft.....10,000 sq.ft @ $125.00 ..........................$ 1,250,000.00 c. 25,000 sq.ft. Lobby Structure @$125.00......................................$ 3,125,000.00 d. 3,000 sq.ft Speciality Restaurant @$125.00................................ $ 375,000.00 c. Plus 10% (corridors & vestibules) .............................................. $ 1,412,000.00 SITE WORK a. Prep and grading 467,398 sq.ft. @$5.00......................................$ 2,336,990.00 b. Landscape (soft&hard) 467,398 sq.ft. @$5.00................................ $ 2,336,990.00 MARINA a. Finger Docks 7 @ 60ft. Ea. @ $25,000.00 ea .................................. $ 175,000.00 b. Equipment............................................................................$ 50,000.00 c. Purchase of two yachts (1950's vintage) ......................................... $ 500,000.00 F.F. &E. a. Guestrooms 160 @ $ 10,000.00..................................................$ 1,600,000.00 b. Lobby 25,000 sq.ft @ $50.00 per sq.ft....................................... $ 1,250,000.00 c. Equipment (communication systems, kitchen, elevators, audio, etc.)....... $ 2,000,000.00 RELATED COST a. Insurance and Bonding............................................................ $ 150,000.00 b. Permits & Fee's.................................................................... $ 250,000.00 c. Ground Lease cost during construction (EST) .................................$ 800,000.00 d. Interest.............................................................................. $ 1,20000.00 e. Relocation cost (American Legion Post) ....................................... $ 500,000.00 f. Professional & Consulting Fee's (EST) .........................................$ 1,000,000.00 TOTAL................................................................................. $29,685,980.00. 4500 Campus Drive, Suite 500, Newport Beach CA 92660; Tel: (949) 757-1662; Fax: (949) 660-1252 STABILIZED YEAR REVENUES / EXPENSES STATEMENT YEAR 1 Projected Income from Operations (see pages ) $19,604,450.00 Expense Statement Salarys & Wages $ 3,528,801.00 Maintenance & Laundry $ 980,222.00 Ground Lease Cost (year 1) $ 800,000.00 Management Fee $ 1,960,445.00 Reserve for Defered Maint. $ 588,133.00 Supplies $ 490,111.00 Advertising & Promotion $ 294,066.00 Interest $ 1,600,00.00 Utilities $ 245,055.00 Insurence $ 392)089.00 Food & Beverage Cost $ 1,960,455.00 Depreciation & Amortization $ 784,178.00 TOTAL EXPENCES $13,623,555.00 TOTAL INCOME $19,604,450.00 NET INCOME $ 5,980,895.00 48 PROJECTED REVENUE TO THE CITY OF NEWPORT BEACH YEAR / GUESTROOM REVENUE / TOT (9%) /GROSS FOOD & BEVERAGE /TAX SHARE 1 $ 13,579,825. $ 1,222,184. $ 4,614,000. $ 46,000. 2 $ 14,820,707, $ 1,333,863. $ 4,844,700 $ 48,477. 3 $ 15,780,307. $ 1,420,227. $ 5,086,935. $ 50,869. 4 $ 16,765,441. $ 1,508,889. $ 5,341,281. $ 53,412. 5 $ 17,857,829. $ 1,607,204. $ 5,608,345. $ 56,083. 6 $ 18,997,923. $ 1,709,813. $ 5,888,762. $ 58,887. 7 $ 20,193,960. $ 1,817456. $ 6,183,200. $ 61,832. 8 $ 21,744,027. $ 1,956,962. $ 6,492,360. $ 64,923. 9 $ 22,855,321. $ 2,056,978. $ 6,816,978. $ 68,169. 10 $ 23,903,047. $ 2,151 274. $ 7 157 826 $ 71,578. TOTAL$186,498,387. $ 16,784,850. $ 58,034,387 $ 580,343. YEARLY GROUND LEASE REVENUE 1 $ 800,000. 2 $ 800,000. 3 $ 1,200,000 4 $ 1,400,000. 5 $ 1,400,000. 6 $ 1,400,000. 7 $ 1,400,000. 8 $ 1,400,000. 9 $ 1,400,000. 10 $ 1,400,000. TOTAL $12,600,000. PROJECTED 10 YEAR REVENUE TO THE CITY OF NEWPORT BEACH $29, 965,193. PROJECTED INCOME FROM OPERATIONS Projected income from operations rely largely upon occupancy levels. The occupancy levels utilized in the income projections on the following pages are supported by two studies. The first study, prepared for the City of Newport Beach by PKF Consulting and titled, "Analysis of Potential Means of Enhancement of Transient Occupancy Tax Revenue for the City of Newport Beach", includes the following. OCCUPANCY OUTLOOK "We estimate, based on the City of Newport Beach's market position and our knowledge of comparable destinations, that the city's occupancy level will effectively reach an annual average of approximately 78.0 percent, a relatively high level of occupancy for any hotel market". In the second study, also prepared by PKF Consulting and titled "Statistics And Trends Of Rooms Business In Orange County", PKF finds that Occupancy levels in Newport Beach Hotels for January to October 1999, was at 73.13 percent. __ 5 0 cc -ME O/RE(�ENr` N eu,p ort 8 eac]v12 ebort PROJECTED INCOME FROM OPERATIONS YEAR 1 REVENUE FROM GUESTROOMS 110 Junior Suites x Average Daily Rate $325.00 x 365 Days x 70% = 40 Double Queens x Average Daily Rate $325.00 x 365 Days x 70% = 6 Full Suites x Average Daily Rate $425.00 x 365 Days x 70%= 2 Vintage Yachts x Average Daily Rate $925.00 x 365 Days x 60%= SUB -TOTAL GUESTROOM REVENUE PROJECTED REVENUE FROM MARINA 10 Yachts In Transit x Average Rate $225.00 x 365 Days x 50%= SUB -TOTAL MARINA REVENUE PROJECTED REVENUE FROM FOOD & BEVERAGE $ 9,134,125.00 $ 3,321,500.00 $ 651,525.00 $ 472, 675.00 $13,579,825.00 410.625.00 $ 410,625.00 51 Pg.2 Main Restaurant Speciality Restaurant Room Service Meetings & Banquets Weddings & Events SUB -TOTAL REVENUE FOOD & BEVERAGE PROJECTED REVENUE FROM SPA TOTAL PROJECTED REVENUE FROM OPERATIONS $1,80000.00 $1,314,000.00 $ 500,000.00 $ 500,000.00 $ 500,000.00 $4,614,000.00 $1,000,000.00 $1996049450.00 * Food & Beverage revenue projections are an estimate from the resorts proposed operator. 52 PROJECTED INCOME FROM OPERATIONS Please note the following projections are based on annual increases of one percent in the occupancy level and a five -percent increase of Average Daily Rate. YEAR 2 110 Junior Suites x Average Daily Rate $341. x 365 Days x 71% = $ 9,720,716. 40 Double Queens x Average Daily Rate $341. x 365 Days x 71% = $ 3,534,806. 6 Full Suites x Average Daily Rate $446. x 365 Days x 71% = $ 693,485. 2 Vintage Yachts x Average Daily Rate $971. x 365 Days x 61% = $ 432,386. 10 Yachts In Transit x Average Daily Rate $236. x 365 Days x 5 1 % = $ 439,314. Sub -total guestroom sales $14,820,707. Revenue from Food & Beverage $ 498449700. Revenue from Spa $ 1,050,000. Total Revenue $20, 715,407. 53 PROJECTED INCOME FROM OPERATIONS Please note the following projections are based on annual increases of one percent in the occupancy level and a five -percent increase of Average Daily Rate. YEAR 3 110 Junior Suites x Average Daily Rate $358. x 365 Days x 72% = 40 Double Queens x Average Daily Rate $358. x 365 Days x 72% = 6 Full Suites x Average Daily Rate $468. x 365 Days x 72% = 2 Vintage Yachts x Average Daily Rate $1,019. x 365 Days x 62% = 10 Yachts In Transit x Average Daily Rate $247. x 365 Days x 52% = Sub -total guestroom sales Revenue from Food & Beverage Revenue from Spa Total Revenue $10,349,064. $ 3,763,296. $ 737,942. $ 461J99. $ 468,806. $15,780,307. $ 590869935. $ 1,102,500. $21,969, 742. 54 PROJECTED INCOME FROM OPERATIONS Please note the following projections are based on annual increases of one percent in the occupancy level and a five -percent increase of Average Daily Rate. YEAR 4 l 10 Junior Suites x Average Daily Rate $375. x 365 Days x 73% = 40 Double Queens x Average Daily Rate $375. x 365 Days x 73% = 6 Full Suites x Average Daily Rate $491. x 365 Days x 73% = 2 Vintage Yachts x Average Daily Rate $1,069. x 365 Days x 63% = 10 Yachts In Transit x Average Daily Rate $259. x 365 Days x 53% = Sub -total guestroom sales Revenue from Food & Beverage Revenue from Spa Total Revenue $10,991,062 $ 3,996,750. $ 784,961. $ 491,633. $ 501,035. $16,765,441. $ 5,341,281. $ 1,157,625. $23,264,347. 55 PROJECTED INCOME FROM OPERATIONS Please note the following projections are based on annual increases of one percent in the occupancy level and a five -percent increase of Average Daily Rate. YEAR 5 110 Junior Suites x Average Daily Rate $394. x 365 Days x 74% _ $11,706,134. 40 Double Queens x Average Daily Rate $394. x 365 Days x 74% _ $ 4,256,776. 6 Full Suites x Average Daily Rate $515. x 365 Days x 74% _ $ 834,609. 2 Vintage Yachts x Average Daily Rate $1,122. x 365 Days x 64% _ $ 524,198. 10 Yachts In Transit x Average Daily Rate $272. x 365 Days x 54% _ $ 536,112. Sub -total guestroom sales $17,857,829. Revenue from Food & Beverage $ 596089345. Revenue from Spa $ 1,215,506 Total Revenue $24, 681, 680. 56 PROJECTED INCOME FROM OPERATIONS Please note the following projections are based on annual increases of one percent in the occupancy level and a five -percent increase of Average Daily Rate. YEAR 6 110 Junior Suites x Average Daily Rate $414. x 365 Days x 75% = $12,466,575. 40 Double Queens x Average Daily Rate $414. x 365 Days x 75% = $ 4,533,300. 6 Full Suites x Average Daily Rate $540. x 365 Days x 75% = $ 886,950. 2 Vintage Yachts x Average Daily Rate $1,178. x 365 Days x 65% = $ 558,961. 10 Yachts In Transit x Average Daily Rate $285. x 365 Days x 55% = $ 572,137. Sub -total guestroom sales $18,997,923. Revenue from Food & Beverage $ 598889762. Revenue from Spa $ 1,276,281. Total Revenue $26,162,966. 57 PROJECTED INCOME FROM OPERATIONS Please note the following projections are based on annual increases of one percent in the occupancy level and a five -percent increase of Average Daily Rate. 110 Junior Suites x Average Daily Rate$435, x 365 Days x 76% = $13,273,590. 40 Double Queens x Average Daily Rate $435. x 365 Days x 76% = $ 4,826,760. 6 Full Suites x Average Daily Rate $567. x 365 Days x 76% = $ 886,950. 2 Vintage Yachts x Average Daily Rate $ 1,236. x 365 Days x 66% = $ 5955504. 10 Yachts In Transit x Average Daily Rate $299. x 365 Days x 56% = $ 611,156. Sub -total guestroom sales $20,193,960. Revenue from Food & Beverage $ 691839200 Revenue from Spa $ 1,340,095. Total Revenue $27, 7I7,255. �8 PROJECTED INCOME FROM OPERATIONS Please note the following projections are based on annual increases of one percent in the occupancy level and a five -percent increase of Average Daily Rate. YEAR 8 110 Junior Suites x Average Daily Rate $456. x 365 Days x 77% = $14,097,468, 40 Double Queens x Average Daily Rate $456. x 365 Days x 77% = $ 5,126,352. 6 Full Suites x Average Daily Rate $595. x 365 Days x 77% = $ 1,003,348. 2 Vintage Yachts x Average Daily Rate $1,297. x 365 Days x 67% = $ 634,362. 10 Yachts In Transit x Average Daily Rate $314. x 365 Days x 57% = $ 882,497. Sub -total guestroom sales $21,744,027. Revenue from Food & Beverage $ 694929360. Revenue from Spa $ 1,407,099. Total Revenue $29,643,486. 59 PROJECTED INCOME FROM OPERATIONS Please note the following projections are based on annual increases of one percent in the occupancy level and a five -percent increase of Average Daily Rate. YEAR 9 110 Junior Suites x Average Daily Rate $478. x 365 Days x 78% _ 40 Double Queens x Average Daily Rate $478. x 365 Days x 78% _ 6 Full Suites x Average Daily Rate $625. x 365 Days x 78% _ 2 Vintage Yachts x Average Daily Rate $1,362. x 365 Days x 68% _ 10 Yachts In Transit x Average Daily Rate $330. x 365 Days x 58% _ Sub -total guestroom sales Revenue from Food & Beverage Revenue from Spa Total Revenue $14,969,526, $ 5,443,464. $ 1,067,625. $ 676,096. $ 678,610. $22,855,321. $ 698169978. $ 1,477,453. $31,848,362. -- 60 PROJECTED INCOME FROM OPERATIONS Please note the following projections are based on annual increases of one percent in the occupancy level and a five -percent increase of Average Daily Rate. YEAR 10 Occ. Remains at 78% 110 Junior Suites x Average Daily Rate $500.x 365 Days x 78% = $15,658,500, 40 Double Queens x Average Daily Rate $500. x 365 Days x 78% = $ 5,694,000. 6 Full Suites x Average Daily Rate $650. x 365 Days x 78% = $ 1,110,330. 2 Vintage Yachts x Average Daily Rate $1,430. x 365 Days x 68% = $ 709,852. 10 Yachts In Transit x Average Daily Rate $345. x 365 Days x 58% = $ 730,365. Sub -total guestroom sales $23,903,047. Revenue from Food & Beverage $ 79157,826. Revenue from Spa $ 1,551,325. Total Revenue $32,612,198. 61 C, ZIP Year I Year 2 Ye 1 st Quarter 2nd Quarter 13rd Quarter 4th Quarter 1st Quarter 12nd Quarter 13rd Quarter 4th Quarter 1 st Quarter 2nd Quarter 1 Pre -development Planning Design Development Financing Environmental Review Entitlement 8w 12w 20w 26w 26w i uG„ i y 2 3 4 5 Coastal Commission 24w , 6 Permit Processing Construction 8w 50w € 2 N 7 8 Task ' Summary Rolled Up Progress Project: Projectt Progress Rolled Up Task a' Date: Mon 1/24/00 Milestone ♦ Rolled Up Milestone Page 1 m ID Task Name Duration Quarter 1 Quarter 2 Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 1 Pre -development Planning 8w Design Development 12w Financing 20w Environmental Review 26w Entitlement 26w Coastal Commission 24w Permit Processing 8w Construction 50w :I , 2 3 4 5 6 7 8 Task Summary Rolled Up Progress Project: Projectl Progress Rolled Up Task Date: Mon 1124/00 Milestone . Rolled Up Milestone <' > Page 1 Quarter 3 Quarter 4 Quarter 5 Quarter 6 Month 8 Month 9 Month 10 Month 11 Month 12 Month 13 Month 14 Month 15 Month 16 Month 17 1 r:ij 1 4 N II � Nit 111�1 III J 'ai 11,III 11 �� 4 { t1'I l Nii'i t Iit r Task ^N10� Summary Rolled Up Progress Project: Projectl Date: Mon 1/24/00 Progress Rolled Up Task Milestone ♦ Rolled Up Milestone 01 Page 2 R7R Quarter 7 Quarter 8 Quarter 9 Month 18 Month 19 Month 20 Month 21 Month 22 Month 23 Month 24 Month 25 Month 26 Month 27 R IMIM, 1 Project: Projectl Date: Mon 1/24/00 Task progress Milestone ♦ Summary Rolled Up Task Rolled Up Milestone 0 Rolled Up Progress Page 3 CONSULTANT TEAM Land / Site Planning Architecture Interior Design Landscape Architecture Traffic Engineer Food & Beverage Consultant Hotel Development Consultant Hotel Management Stephen R. Sutherland Company, Inc. • Please refer to Basic Qualification section on pages 14 & 15 for project list and references Stephen R. Sutherland Company, Inc. Stephen R. Sutherland Company, Inc. George Girvin & Associates Ref: Cabo del Sol Client: Koll Company WPA Traffic Engineering, Inc. Ref: Balboa Bay Club Client: International Bay Clubs The Nyman Group Ref: Carlson Park -San Antonio Client: Carlson Hotels Worldwide Regent International Hotels Ref: Development of Regent Hotels Regent International Hotels Ref: Management of Regent Hotels A7 - Sutherland Talla Hospitality Copyright 2000 All rights reserved 4500 Campus Dr., Suite 500, Newport Beach, California 92660 -low cq<i po N ��P Ir It iU N") � r TERRA VISTA MANAGEMENT Ha TMA RQ ueotl foil ITolpo69l.O oufbmmwMM by wmmm Mau M=%emew In Association With The Marina Park Homeowner's Association February 4, 2000 Marina Park City of Newport Beach Request for Proposals Submittal Terra Vista Management (TVM), along with its President, Michael Gelfand, having operated mobile home communities since 1969, herein submit a proposal for the continuation of the Marina Park Mobile Home Community. It is proposed that the existing use of the property be continued and that the property, the beach access and the view corridor be enhanced. Upon execution of the lease, TVM proposes to immediately adjust the lease payment to the greater of: 1) 75% of the gross income of the property, or 2) a minimum of $1,000,000 per annum plus annual CPI adjustments tied to the Consumer Price Index for Urban Wage Earners and Clerical Workers, Los Angeles -Riverside -Orange County, CA. In addition, the City will receive 5% of the gross sales price of all mobile homes sold on the property throughout the term of the lease. This proposal will provide an existing and in -place, secure, permanent, annually increasing revenue stream to the City of Newport Beach. It would not be subject to uncertainties and delays such as the lending environment for hotels, environmental review processes, public forums, hotel occupancy fluctuations, relocation and severance costs for residents, other liabilities to long-term residents or the severance of other goals of the City, such as affordable housing. One version of our pro forma (Alternative One) does not address changes to the Girl Scout House or Tennis Court portion of the property. The other (Alternative Two) addresses all but the American Legion property. If TVM were selected as the team to lease and operate the community, it would work with the City to enhance the portions of the site with which the City deems appropriate. The leasehold boundaries, required improvements and economics are open to negotiation to more closely_ conform to the needs of the City of Newport Beach. Marina Park City of Newport Beach Request for Proposals Submittal 1. Basic Qualifications: TVM, its President or affiliated companies and employees have a substantial and successful history owning and managing mobile home communities. Until 1994, when several of the communities were sold in one transaction to Manufactured Housing Communities, a publicly traded real estate investment trust, 30 properties were managed, with over 11,500 mobile home sites. Currently, TVM manages four communities in California and Nevada, with 1,182 sites, all of which provide positive cash flow. Additionally, TVM manages a golf course and upscale, full -service 600 space recreation vehicle park and campground on Mission Bay in San Diego, California, and ancillary businesses on those properties. Addendum 1 provides specific information on the mobile home communities currently managed by TVM. One of the properties is the De Anza Bayside Village and Marina on the Back Bay, in Newport Beach, California. Selected operating and other information on the all currently managed communities and properties, expressed on a consolidated basis, can be found on Addendum 2 2. Financial Qualifications: The current financing climate for mobile home community lenders is described in a recent Crittenden Report on Real Estate Financing as "fiercely competitive". Although it is not contemplated that the proposed use of the property will require more financing than TVM currently has available from existing credit facilities, the fact that the climate is good further enhances this proposal and provides for that flexibility. The mobile home communities which TVM or its affiliates have managed have raised $144,000,000 in equity capital through public and private offerings. The mortgages encumbering the currently managed mobile home communities range from $4,135,000 to $25,750,000. Specific information can be found on Addendum 3. These were recently funded and operations have improved since the fundings. 2 Marina Park City of Newport Beach Request for Proposals Submittal While each loan is underwritten based primarily on the merits of the underlying operations, the recent financing_ discussed above and detailed in Addendum 3 as well as excellent banking relationships, clearly demonstrate that TVM would be able to secure additional loans for Marina Park if necessary. The debt shown on our Alternative Two forecast (see Addendum 7) is to be used for upgrades to the public tennis courts, the addition of 12 new manufactured home spaces, and other aesthetic features around the property. Both alternatives include visual improvements and landscaping that will provide greater "curb appeal" for residents and visitors to beautiful Newport Beach. TVM and Marina Park residents would welcome and encourage the City's input and approval for any construction before commencing. One of our current banks has written a letter demonstrating their confidence in and support of our current and future operations. Please see Addendum 4. 3. Project Description: ALTERNATIVE ONE: We propose to retain the existing use of the 58-space mobile home community and offer the Homeowners long term rental agreements. Terra Vista Management and the tenants recognize and appreciate the extraordinary site on which the homes sit, and wish to enhance the aesthetics of the community and increase public access and recreation opportunities around the community. ARCHITECT'S RENDERINGS CAN BE SEEN AT ADDENDUM 5. The mobile home community would be greatly improved. The new entrance would be landscaped. Architectural Standards would be implemented after submission to the City for review and approval. These standards would cover aesthetic requirements for new homes, remodels, improvements, paint colors etc. The beach access points along the bay side of the community would be improved. An arbor could be constructed over the existing pathway to the beach, with flowering vines. Signage would direct the public to parking and beach access. 3 Marina Park City of Newport Beach Request for Proposals Submittal The number of Public Parking spaces will be significantly increased. The proposal includes a 30-stall, metered public beach parking lot for joint use with the American Legion, 4 new metered spaces at Balboa Boulevard and 6-8 new spaces at the Balboa and 18t' Street lot. The additional spaces will provide the City with enhanced revenue as well as improved public access to the beach. The existing American Legion restroom could be enlarged and improved to provide for public use while maintaining simultaneous private use by the American Legion. The children's play area could be relocated to the beach area west of 18t' Street, or to a portion of the American Legion property. A swim platform could be added to the existing swimming area at 18 Street for enhanced public recreation opportunities. The tennis court area could be beautified with flowering vines planted at the base of the screens facing Balboa Boulevard. Access could be provided to tennis players to the Marina Park restrooms and showers in the center of the property. At the foot of 18'h Street, the non -motorized boat hand launch could be improved to encourage increased usage. The existing views would be maintained for the immediate future. It is possible over time that the single story manufactured homes could be replaced with modern, 2 story units. (The placement of 2 story units on the site would be at the option of the City. It should be noted for the decision, that TVM would charge additional rent for a 2 story tenant). This would provide an updated image for the park and additional rent to be passed onto the City. THE SURROUNDING NEIGHBORHOOD HAS EXPRESSED SUPPORT for the current use of the property. The view from Balboa Boulevard would continue to be that of the tennis courts, and of improved landscaping and beach access from other surrounding areas. 11 Marina Park City of Newport Beach Request for Proposals Submittal Finally, the property would be operated in an ecologically sensitive way. The use would not require significant additional natural resources, and no toxic herbicides, pesticides or fungicides would be used in operations. Also, it would prevent the new runoff and other problems associated from the development or operation of a hotel or other large commercial or dense residential use. ALTERNATIVE TWO: The existing four tennis courts could be replaced with four courts that face the appropriate north -south direction. The financing of the new courts would be provided by Terra Vista and repaid through rent credits. This would provide the public with a much improved facility immediately. Relocation of a couple of existing manufactured homes might be necessary to facilitate this improvement. If the City maintenance building and Girl Scout House property became available, an additional twelve manufactured home spaces could be created, thereby increasing the City's rental revenue. The homes would be fenced and landscape buffers would shield them from view from Balboa Boulevard. All aesthetic and public access improvements described in Alternative One could also be implemented. ARCHITECT'S RENDERINGS CAN BE SEEN AT ADDENDUM 5. 4. Development Costs and Operating Pro Forma The improvement or development costs associated with Alternative One of this proposal are estimated at approximately $25,000. Alternative Two could cost approximately $400,000. If the City finds this alternative desirable, Terra Vista intends to seek a rent credit to cover the capital and financing costs. Residents would be responsible for the work at each homesite. Both alternatives put the burden of the ongoing maintenance of the community's infrastructure on Terra Vista, thereby relieving the City of the responsibility. W Marina Park City of Newport Beach Request for Proposals Submittal The lease payment indicated on the pro forma could start immediately. There is no time lost in removing residents, planning and financing a development, holding public hearings, going through the environmental review process, or for any other delay which is almost certain to occur with major redevelopment. Additionally, this proposal does not have as much exposure to an economic downturn, should that occur. As the pro forma indicates, the initial rent to the City with Alternative One (see Addendum 6) will be a minimum of $1,000,000 and with estimated sales should exceed $1,050,000. With Alternative Two (see Addendum 7) after stabilization in year three but before the rent credit, the City would receive in excess of an additional $80,000 per year. The pro forma is based upon increases in rent charges to the residents of Marina Park. The increased rent amounts are consistent with a recent market study as well as the market rents at De Anza Bayside Village. These rent amounts have been acknowledged and agreed to by the majority of the Homeowners at Marina Park who are indirect parties to this submittal. All of the existing tenants of the community will be offered long term rental agreements which reflect these initial rents. Low income tenants unable to afford the rents will be offered financial assistance from TVM for at least three years. The pro forma conservatively assumes that these subsidies continue indefinitely. 5. Implementation Schedule One of the obvious strengths of this proposal is that the implementation begins as soon as the lease is agreed to and signed. Immediately thereafter, the annual lease revenue increases to $1,000,000 plus 5% of gross sales . The management of the property is taken over by a property management team with nearly 40 years of experience and a strong local presence, and the improvement and beautification program begins immediately, with a timeline expressed in months rather than years. 6 Marina Park City of Newport Beach Request for Proposals Submittal 6. Consultant Team This submittal was prepared by Michael Gelfand and the professional staff at Terra Vista Management. The architectural firm that prepared the plans for Alternatives One and Two as seen in Addendum 5 was Timothy Rhoads Associates, Newport Beach, California. Also involved since before Terra Vista, was the Homeowner's Association of Marina Park, without whom this submittal would be moot. A letter from the Association's President, Stewart Berkshire, confirming their support is attached as Addendum 8. RESPECTFULLY SUBMITTED V�- Michael Gelfan President Terra Vista Management 7 Ug--WOM /-// Marina Park City of Newport Beach Request for Proposals Submittal Addendum 1 Mobile Home Communities Currently Managed by Terra Vista Management COMMUNITIES: De Anza Harbor Resort 2727 De Anza Rd. San Diego, CA 92109 Area Mission Bay Mobile Home Sites 510 Total 1999 Revenues (not audited) $5,700,000 Operated Since 1969 Bayside Village and Marina 300 East Coast Highway Newport Beach, California 92660 Area Newport Beach Mobile Home Sites 270 Total 1999 Revenues (not audited) $3,053,000 Operated Since 1971 De Anza Moon Valley 1001 5t' Street West Sonoma, California 95476 Area Sonoma Mobile Home Sites 247 Total 1999 Revenues (not audited) $1,573,000 Operated Since 1977 Tahoe Shores 395 Eugene Drive Stateline, NV 89449 Area Stateline, South Shore Mobile Home Sites 155 Total 1999 Revenues (not audited) $ 861,000 Operated Since 1989 Corporate Offices San Diego 2727 De Anza Rd. San Diego, CA 92109 Los Angeles 6310 San Vicente Suite 560 Los Angeles, CA 90048 0 Marina Park City of Newport Beach Request for Proposals Submittal Addendum 2 Terra Vista Management and Affiliates Consolidated Information Average Number of Employees Audited 1998 Assets (Rounded) Audited 1998 Revenues (Rounded) 290 ,$30,376,000 Net of $21,099,000 Accumulated Depreciation $19,228,000 Net of $11,748,000 Gain on Sale 1999 Estimated Operating Revenues (Rounded/Not audited) $20,366,000 2000 Budgeted Operating Revenues (Rounded) $21,762,000 G*j Marina Park City of Newport Beach Request for Proposals Submittal Addendum 3 Current Mortgages on TVM Managed Mobile Home Communities De Anza Harbor Resort No Mortgage Debt Bayside Village and Marina Lender: Prudential Insurance Company of America Funding Amount: $25,750,000 Funding Date: August 1997 De Anza Moon Valley Lender: Anchor National Life Insurance Funding Amount: $ 6,600,000 Funding Date: July 1997 Tahoe Shores Lender: Anchor National Life Insurance Funding Amount: $ 4,135,000 Funding Date: August 1997 10 Marina Park City of Newport Beach Request for Proposals Submittal Addendum 4 Banking IMPERIAL BANK 9777 Wilshire Boulevard • Fourth Floor • Beverly Hills, California 90212 • (310) 281-2400 January 7, 2000 City of Newport Beach Gentlemen: Terra Vista Management and its related entities and principals have been valued clients of our organization for approximately ten years. Credit facilities have been available and used over the span of our relationship, however, no requests have been entertained in the recent past. Collective account balances currently average in the low seven figure range. All accommodations have always been handled in an excellent manner. Over the years of our association with the Terra Vista Management group we have developed a high regard for the ability, integrity, and performance of the management team. We consider Terra Vista Management completely responsible for their commitments. Sincerely, Alan J. Twedt Vice President �f�p�n��UM 5 MARINA PARK VILLAGE COMMUNITY UTILIZATION PLAN PREPARED BY Timothy Rhoads ASSOCIATES PLEASE SEE AYRES GROUP HOTEL BALBOA PENINSULA PROPERTY (FULL MAP) IN FILE 73 MARINAPARK MOBILE HOME PARK SCHEME ,AV v WC HI.I.CJJ V.9I CJ AI NORTH -SIDE FOR RESTROOM AND SHOWER FACILITY ACCESS MARINA PARK VILLAGE COMMUNITY UTILIZATION PROVIDE BEACH ACCESS AND PARKING SIGNAGE SCHEME AND SHOWER FACILITIES -NORTH/SOUTH SOLAR ORIENTATION FOR TENNIS COURTS MARINA PARK VILLAGE COMMUNITY UTILI,ZA PROVIDE BEACH ACCESS AND PARKING SIGNAGE ti. .Tf d: NEW MARINA PARK s COMPLEX ENTRANCE PROVIDE NEW STREET TREES AND BLOCK PLANTERS WITH LANDSCAPE MARINA PARK VILLAGE INSTALL 6-NEW HOMES 12-TOTAL MARINA PARK VILLAGE COMMUNITY UTILIZATION PLAN RELOCATE TENNIS COURTS -PROVIDE ACCESS TO RESTROOM/SHOWER FACILITY -NORTH/SOUTH ORIENTATION FOR COURTS j I I I f I -i PLANT FLOWERING VINES FOR LANDSCAPE SCREENING AT TENNIS COURT FRONT -SIDE MARINA PARK VILLAGE COMMUNITY UTILIZATION PLAN TRELLIS AWNING ENHANCE EXISTING HOMES PROVIDE DOOR AND WINDOW TREATMENTS -AWNINGS, PLANTER BOXES AND POT SHELVES MARINA PARK VILLAGE COMMUNITY UTILIZATION PLAN WIDEN BEACH ACCESS POINTS PROVIDE BENCH SEATING AT BOARDWALK WALL ENHANCE EXISTING BOARDWALK AREA WIDEN ACCESS POINTS TO BEACH AREA PROVIDE LOW WALLS FOR BENCH SEATING LIMIT HEIGHT AND AMOUNT OF LANDSCAPE ENCOURAGE FACADE ENHANCEMENT AND COLOR STANDARDS FOR EXISTING HOMES COLORFUL FLAGS FOR VERTICAL IDENTIFICATION REBAR METAL ARBOR WITH FLOWERING VINE. CONCRETE CAST -I -PLACE COLUMNS INSTALL REBAR METAL ARBOR OVER EXISTING PATHWAY- 14' HIGH WITH COLORED FLAGS FOR VERTICAL IDENTIFICATION AS BEACH ACCESS AND COVER WITH FLOWERING VINES MARINA PARK VILLAGE COMMUNITY UTILIZATION PLAN INSTALL PUBLIC BEACH PARKING LOT JOINT -USE WITH AMERICAN LEGION (METERED WITH + (30) STALLS PROVIDE STEEL TRELLIS WITH FLOWERING VINES TO SCREEN EDISON SUB -STATION MARINA PARK VILLAGE COMMUNITY UTILIZATION PLAN U d U Aa �J PROVIDE BEACH ACCESS AND PARKING SIGNAGE MARINA PARK VILLAGE COMMUNITY UTILIZATION PLAN RENOVATE AND ENLARGE EXISTING RESTROOM FACILITY (ONE-HALF PUBLIC USE &ONE-HALF PRIVATE USE) MARINA PARK VILLAGE COMMUNITY UTILIZATION PLAN --4®R -' HJ MARINA PARK VILLAGE Addendum 6 Alternative 1 Footnotes Year I Year 2 Year 3 Year 4 Year 5 Year 6 liar 7 Year 8 Year 9 Year 10 DESCRIPTION Projection Projection Projection Projection Projection Projection Projection Projection Projection Projection 1 Total Income 1.299,656 1,325,649 1,352,162 1,379,205 1,406,789 1.434,925 1,463,623 1,492.896 1.522,754 1,553.209 2 Home Office Expense (170,950) (174,369) (177.857) (181,414) (185.041) (188.743) (192,518) (196,368) (200,295) (204,301) 2 Manager Expense (99,443) (101,432) (103,460) (105,529) (107,640) (109,793 (III, )89) (114,228) (116,513) (118,843) Total Expenses (270,393) (275.801) (281,317) (286,943) (292.682) (298,536) (304,506) (310.596) (316,808) (323,145) Cash Flow Subtotal 1,029,263 1,049,848 .1,070,845 1,092,262 1,1 14,107 1.136,389 1,159.1 17 1,181,300 1,205,946 1,230,064 Capital Improvements (24,000) (24,480) (24,970) (25,469) (25,978) (26,498) (27,028) (27,568) (28,120) (28,682) Interest 0 0 0 0 0 Principal 0 0 0 0 0 Capital/Utility Improvement Reserve (5,263) (5,368) (5,476) (5,585) (5,697) (5.811) (5,927) (6,045) (6,166) (6,290) Base Rent to City 1,000,000 1,020,000 1,040,400 1,061,208 1,082,432 1,104,081 1,126,162 1,148,686 1,171,659 1,195,093 3 Resales % to City 58.000 42,840 29,131 22,285 22,731 23,186 23,649 24,122 24,605 25,097 Total Rent to City 1,058,000 1,062,840 1,069,531 1,083,493 1,105,163 1.127,267 1,149,812 1,172,808 1,196,264 1,220,190 Footnotes: I Year One Monthly Rental Rates: Waterfront-$2,300/Waterview $1,800/Tennis Vicw $1,600. Rates are adjusted by CPI each year, assumed to be 2% for this pro forma. 2 Based upon historical operations of Marina Park as appropriate and Bayside Village as appropriate. Adjusted by CPI each year, assumed to be 2% for this pro fornia. 3 $1,000,000 ninimum plus CPI each year, assumed to be 2%, or 75% of Total Income, whichever is greater. 1 of 12 DES(. RIP I ION Projection Gross Potential Rent I.?h:e III III DisputM R, n Rcbme 0 Vacancies q tenant ;\I loeances li3!Innl Empl,,ee Lorhtin_^_ n Free Rent n Net Billable Rcm L r9n Ilan Onned Catch Rent lr Coach Rental ('Innmissions u Cinch Rm al Clss u Del —its F,, llitexl n Bad 0.bts \lose Outs n Emplo,ce Rent n Total Rental Income I '9n nun Passthrough Insane n Gamge R Heals u Billboard Rental u Total Otho Rcnlal Income ll Coach Imento,x Sales u Cost of Sales u Salesperson Salmics u Salesperson Commissions n Imem— Advertising 0 Other Saks Fxpensc n Fla,,ine Intocsl n Total Imemm, Sal s 0 Resale Commissions 0 Salesperson Salaries II Salesperson Commissions I) Resale Advertising 0 Other Sales Expense 0 Total Resale Intone U Total Coach Sales Resales 0 Vending Income 400 Laundry Income 91 hx Total Vending: Income UN Neupon Stichame 69h Interest Income U Miscellaneous Income 1,65, Total Other Income 2.34N Total Intone 1.299,656 Ada .un 6 Alternative 1 SU41\IARY-YEAR ONE HOME OFFICE EXPENSE SC\I',I.\RY A(CI DES( RIPTION Projection 50610_11 Lrjal Fees 11um Snh2n21 Audit Tax 2.suu 506S021 Accounting Budget. UP 2x,1,67 Sn6Jn_'1 Other Professional Fees _.'nn 5nb5n21 Computer S,q,pon nun 506021 Regional Manatee ent 6000 50h702I Employee B,xrus( I pa,roll) LSx? 506-e02l Ix^_islalk c• Contributions n 50711,21 Corp. Telephone Expense HO 507_21121 Organizational Dues n 5O141121 Corp. Otl ice Expense IL'� Total Prcfessional Fccs 43.412 ? 1111021 Insurmue fi,i9x 112021 .\borbenl Insurance Losses 0 121,021 Interest - Dercncd u 512SI121 Propera, Tries 1v:1u11 ?1101121 Tra,d 2,40m S I40021 Lease Fxpensc-NBBR n 5161I1121 %lanJgentent Fees 't, 5.11^,, 64.070 i 170021 Taxes & I ieenses : \on S Ixnn11 Total Other Expense 11)I1n] I 127AM Trnal l lolne Oflice Expense 17uysm Intcaesl - Cash If Base Rent - City of Newport 1111111 Illlll 2of12 DISC RII' I ION I'rojwion Office SJlarie'S II \laimcnanee Salaries ? Lxun Patrol Sal.n ics n Risk \I:mgemenl Salaries I.SsI IRI P—oll Work Comp Sal. I ntx Thal Salaries 34.119 Pa,roll razes 2ssn C—up Insurance I.snn N%o,k— ('onp. Insurance JIII Other Fmp. Related F,p. u 411 A Plan C-ntrihutions L,lal Pay,oll Taxes fi'15 Aumnwii,e s 1; W;tste Disposal -,;;h Supplies I.?I(1 Landscaping_ I? nxn GaMcnine ('nwms I) Park Patrol n O,cned Catch Fxpense 0 Repairs S Mainenance 1 16u7 Plumbing Repairs n Pool \faint. C'mnact n Poll Repairs I/ Total Rq,ai,s R S,pplies Telephone C --t ications LL)J Uucs C Stbsaip,ions 25a Office Fxpensc R P,atage 2.291) Miscellaneous Expense 0 Training & Seminars 0 Total Office Expense 3.951 Tenant Relations 1.00 Ad,ertising 116 Taxes R licenses I.J9a Total Otho Expense 1.461 Flwric 6,3110 Reimbursed Elttl,ie 11 Electric Subtotal 6300 Gas I_'.JSO Reimbmsed Gw fl Gas Subtotal 12.Jx0 Water 0 Selcer Total Utilities N 7811 Total Manager Expense 99.443 fl.11" Add, .,gym 6 Alternative 1 INCOME SCHED('LE DESCRIPTION JAN FEB SI,\R APR MAY JUN JUL AUG SEP OC I NOV DEC TOTAL. TOTAL UNITS ------ i8 TOTAL SQUARE FEET-> MARKET RENT II4.000 114.000 I14rn00 114.000 114.000 114.000 114,00o 114ixg) 114.000 114.0)0 111.(N:N) I14.0(9) 1.368.000 (RENT PER S.F.) 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 ()iNr 0.00 0.00 0.00 LEASE GAIN (LOSS) RENT POTENTIAL 114.000 0 114.000 111.u00 114,000 114.000 114,000 114,00v 114J )0 114,000 114.0u0 111.(NN) 11-0(N) 13o8!AN) (RENT PER S.F.) 0.00 0.00 OA(1 0.00 0.00 0.00 0.00 0.00 0.00 0.0) 0.00 0.00 0.(4) VACANCIES (UNITS) 0 0 0 0 0 0 0 0 0 VACANCIES (PERCENT) 0.0"0 0.01" 0.0"o 0.6"0 0.0"o 0.0"o 0.0"0 0.0' 0.0o" (1 0.0"" 0 0.011" 0 0.0"" VACANCIES (AMOUNT) 0 0 0 0 U 0 0 0 TENANT ALLOWANCES (6.000) (6.(%) (61100) (6.000) (6000) (bOO(1) (6.000) (6,000) 0 (6.000) 0 (6.000) 0 (oAwn 0 0.00)) 0 (72A00) EMPLOYEE LODGING MODEL%OFFICE 0 FREE RENT 0 0 108.000 108.000 108.01j0 108.000 108.000 108.000 108,OW 108.000 108Au(1 108.000 108.000 108.000 1 296.w) DEPOSITS FORFEITED BAD DEBTS/MOVE OUTS 0 EMPLOYEE RENT U ii 1NE1 R N'AL im-umr 108.000 108.000 108,000 108.000 108.000 108.000 108,000 108.000 108.000 1081ft 108.(00 108.000 1,296.0w ECONOMIC OCCUPANCY ("o Market Rent) 94.7% 94.7% 91.70o 94.7"o 94.70 94.11, 94.7% 94.70, 94.710 94.71" 91.7% 94.7% 94.7"o ECONOMIC OCCUPANCY(% Rent Potential) 94.70o 94.70o 94.70" 94.70 94.70o 94.7"o 94.7% 94.7"0 94.7"o 91.7% 94.70o 94.71. 94.710 PASSTHROUGH INCOME I Estimate TOTAL PASSTHROUGHINCOME 0 0 0 0 0 0 0 0 0 U u 0 0 0 GARAGE RENTAL INCOME Garages Rental occupancy Rent per unit 0 1 Estimated income 0 0 0 0 0 0 0 0 0 0 0 0 (J TOTAL GARAGE RENTAL INCOME 0 0 0 0 0 0 0 0 0 0 0 0 0 BILLBOARD RENTAL INCOME I TOTAL BILLBOARD RENTAL INCOME 0 0 0 0 0 0 0 0 0 0 0 0 0 0 NEWPORTSURCHARGE I Water fee 58 58 58 58 58 58 58 58 58 58 58 58 696 TOTAL NEWPORT SURCHARGE 58 58 58 58 58 58 58 58 58 58 58 58 696 OWNED COACH RENT 3 Of 12 I Income Space I Income Space TOTAL OWNED COACH RENT COACH RENTAL COSIS 4 6 7 8 9 10 11 1? 13 IJ 98 Miscellaneous TOTAL COACH RENTAL COS"fS VENDING INCOME 3 Soda machine TOTAL VENDING INCOME LAUNDRYINCOME '_ Estimate TOTAL LAUNDRY INCOME VENDING COST OF SALES I Cost of Sales - Vending_ TOTAL VENDING COST OF SALES INTEREST INCOME TOFALINI-ERESTINCOME MISCELLANEOUS INCONIE I Late/NSF char�_es TOTAL MISCELLANEOUS INCOME Adde.. _m 6 Alternative 1 INCOME SCFIEDULE J.AN FI-B MAR ,APR MAY JL'N JUL ALL SEP OCT NODEC TOTAL 0 0 0 0 0 U U U CI 0 Q (I U II u n i 0 0 0 0 U u V 0 0 U 0 0 0 0 0 0 0 0 0 0 0 0 0 100 100 100 100 400 100 0 0 100 0 0 100 0 0 1u0 0 0 400 58 58 58 58 58 58 58 58 58 58 58 58 638 58 58 58 270 58 58 58 58 58 58 58 58 908 0 0 0 0 0 0 0 0 0 0 0 0 0 1 '- 3 J 5 b 7 8 9 10 11 I_ 0 0 0 0 0 0 0 0 0 0 0 0 0 0 138 138 139 138 133 138 138 138 138 138 138 138 1265' 138 138 138 138 138 138 138 138 138 138 138 138 1.657 4 Of 12 # of Sales Waterfront Waterview Tennis View New Homesites Sales Prices: Waterfront Waterview Tennis View New Homesites Revenue Waterfront Waterview Tennis View New Homesites Total Resales % to City Revenue to City Adden-am 6 Alternative 1 RESALES SCHEDULE Year I Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Projection Projection Projection Projection Projection Projection Projection Projection Projection Projection 3 2 1 1 1 1 1 1 1 1 3 2 2 1 1 1 1 1 1 1 2 2 1 1 1 1 1 1 1 1 0 0 0 0 0 0 0 0 0 0 180,000 183,600 187,272 191,017 194,838 198,735 202,709 206,763 210,899 215,117 140,000 142,800 145,656 148,569 151,541 154,571 157,663 160,816 164,032 167,313 100,000 102,000 104,040 106,121 108,243 110,408 112,616 114,869 117,166 119,509 540,000 367,200 187,272 191,017 194,838 198,735 202,709 206,763 210,899 215,117 420,000 285,600 291,312 148,569 151,541 154,571 157,663 160,816 164,032 167,313 200,000 204,000 104,040 106,121 108,243 110,408 112,616 114,869 117,166 119,509 0 0 0 0 0 0 0 0 0 0 1,160,000 856,800 582,624 445,707 454,622 463,714 472,988 482,448 492,097 501,939 5% 5% 5% 5% 5% 5% 5% 5% 5% 5% 58,000 42,840 29,131 22,285 22,731 23,186 23,649 24,122 24,605 25,097 5of12 Adde- .,ck 6 Alternative 1 FXPENSESCHED11E DESCRIPTION JAN FEB MAR APR MAY JUN it L \1 G K1,NNMA,NAtjt.N1EN1 SALARIES I Estimate TO FAL RISK MANAGEMEN F SAL. 132 132 13' 132 132 112 1 132 132 1.531 ILO. P.-WROLLANORKCOMPS \L, I Estimate 86 3b 86 86 go So Rn 8a 80 So LWIS roiALILO. PAl'ROI.1-AAOIZKCONIII. 86 86 8b 96 80 so 8() 86 So R6 So 86 1.1138 01 IIER EMPLOYEE ' EXPENSE I Holiday petty Birthdays Team building 4 Barbecue 0 TOTAL OTHER FNIPLO) EE EXPENSE 0 0 U 0 0 p 1) 0 401-K PLAN CONTRIBUTIONS I, Estimate 52 52 5-1 52 52 5-2 52 5' - 52 52 623 TOFAL-101-KPLANCONTRiB. 52 52 5' 52 52 52 51 52 51 23 AU romo ri% E • 1 Gas &oil 11 I I 2 Truck repairs 64 11 It I I 11 64 3 Goll'clitrepairs 86 54 54 o-I 98 Miscellaneous If 11 11 11 54 47 11 11 TOTAL AUTO%IO r IVE 86 97 75 11 21 11 64 21 11 64 21 11 50i RAS I E DISPOSAL I Trash Pickup 463 463 46" 463 463, 463 463 463 463 40 40 463 5.556 98 Miscellaneous TOTAL WASTE DISPOSAL. 463 463 463 463 4(,3 40 463 , 463 463 4 t) 3, 463 403 5.556 SUPPLIES I Cleaners/chern icals 21 21 2 Plastic/paper 21 21 21 21 21 21 21 21 21 21 21 247 21 21 43 43 43 43 21 43 43 3 Flags 69 101 4 Unitonns 195 5 bulbs 28 28 28 28 28 28 28 28 28 28 28 28 195 335 6 Trash cans 39 37 98 Miscellaneous 75 0 To TAIL SUPPLIES 265 70 70 177 70 124 92 128 92 70 92 91 1.340 LANDSCAPING I Olive tree spray ing 2 Flo, ers/grass scedisod/pI ants 3 Tree trimming, 0 4 Tree removal/replacement 0 98 Composite 1,090 1.090 1,090 1.09() 1.090 1,090 1.090 1.090 - 1.090 1.090 1.090 1,090 0 13.080 6 of 12 Adde.. _,a 6 Alternative 1 EXPENSE SCHEDULE DF.SCRIPIION JAN FE13 \IAR APR MA) JUN .ICI. AUG SI.P OCT NOV DEC 10TAL TO I AL LANDSCAPING I190 1.0911 1.090 1.091.1 I.090 I,090 11190 IJi9U Iii9n 9u 1,090 urns 13n8�� GARDENING CONTRAC"FS I Emironmental Care TOTAL GARDENING CONTRACTS 0 fJ 0 (1 0 0 0 0 0 p p 0 fj PARR PATROL I Patrol One 93 Miscellaneous U 0 TOFALPARKPATRUL 0 U 0 U 0 0 fl 0 V 0 fJ U 0 O%VNED COACH EXPENSE I Staffhousimi 2 Clean carpets U 93 Miscellaneous fJ TOTAL OWNED COACH EXPENSE 0 0 0 0 0 0 0 0 U 0 0 0 0 REPAIRS C MAINTENANCE I Plumbing;'se«ei '_IS '_IS 215 215 215 215 215 _IS 15 215 _'IS 2L , 578 2 Electric 38 38 38 38 38 38 33 38 3C 38 33 38 414 3 TV antenna repair 9 9 9 9 9 9 9 9 9 9 9 9 111 4 Fence repair and transf onner sheds 129 129 5 Cathodic protection 301 258 6 Fire exting uishers ifJl 500 500 7 Tools I50 21 11 21 8 Gas Meters 40 40 30 Tn 40 21 40 21 40 21_I_I -lit 40 40 21 40 21 40 387 474 9 Pedestal s/risers 107 408 I07 408 107 108 107 408 107 408 107 40S 3.093 10 Pest control 16 16 16 In 16 16 16 I6 16 I6 16 16 193 11 First Aid kits I_'S 12 Beach sand 410 115 13 Shop/storag a bin rental 43 43 13 13 43 43 43 43 13 13 430 14 Restrap and paint patio f umiture 43 1.3 516 15 Continue street I ight rep] acement 161 161 161 16 Equipment rental 21 21 21 21 21 21 161 644 17 Maintenance of Fitness Equipm ent 21 21 21 21 21 21 259 98 Miscel laneoushn aterial s 107 I07 107 107 I07 I07 I07 IU7 107 107 I07 I07 0 I.289 TOTAL REPAIRS & MAINTENANCE 747 1,209 618 919 1.338 919 618 1.381 1.243 919 779 919 I I,607 TELEPHONE I Office phoncA ong distance 0 2 Pagers 0 3 Ansxvering sen ice 0 4 Pay phone 0 5 AT&T contract 6 Radio batteries 0 0 98 Composite 117 117 117 117 117 117 117 117 117 117 117 117 1,404 TOTAL TELEPHONE 117 117 117 117 117 117 117 117 117 117 117 117 I.404 7of12 Adde. ..An 6 Alternative 1 EXPENSE SCI IEDI LE DESCRIPTION JAN FEB \L\R APR MAY it .ILL Al'G SI.I' 0('1- NO\ DP.0 10IAI. DUES & SUBSCRIPTIONS I Berlin Report Orange County Register U 3 Nmport Beach Daily Pilot u 4 Cirilcodes IUU 5 1itle'_5 150 Inu iU ti Kelly Blue Book 93 Miscellaneous U -IONS 0 TOTAL DUES & SUBSCRIPT 950 0 U 0 U 0 0 u 0 U OFFICE EXPENSE I Posta�e 107 107 10: 1W 107 107 107 I07 IU7 ID_7 I07 IU? 1_'49 _' Federal eNpress:deliicry charges 9 9 9 9 9 9 9 9 i Posragemeterrental 13 18 18 18 18 18 IR IR 9 13 9 13 9 19 9 IR 10" 219 J Water II II II II 5 Computer suppl ies II II II II 11 II II II L'9 6 Stationery I07 0 7 Business cards 107 �I, 3 Copier paper and P as Catirid_ es 0 9 Copier paper 0 0 10 Copier inaintenance 11 Title Searches 2I_I 0 98 Miscellaneous 'I 'I 11 21 86 _'I _'I 21 ?I 21 21 _1 ?1 21 '_iR TOTAL OFFICE EXPENSE 166 Ibb IR8 '_7a Ibb 133 166 166 I38 Ibb 295 166 2.258 99 MISCELLANEOUS EXPENSE I WN1A meetings '_ Training classes 0 l 1V MA Contention 0 93 Miscellaneous 0 0 TOTAL MISCELLANEOUS EXPENSE 0 0 0 0 0 p 0 0 0 0 U U 0 TENANT RELATIONS I Birthday cards 43 2Holiday parties iI 13 Chrisnnasparty 1 July dth party i 914 924 5 1lomo,ners meetings I I I I I I I I I I I I ' I 215 6 Bingo II I I II I I I I I I I I 11 I I 137 7 Coffee ?1 21 21 21 98 Miscellaneous ?I 21 ?I 21 21 ?I 21 21 21 21 21 21 258 21 21 21 '_I _'I 21 21 '_I 253 TOTAL TENANT RELATIONS 108 76 54 54 70 54 280 54 76 54 65 978 1.930 ADVERTISING I Yello, pages 28 -'8 28 28 28 28 28 ,8 28 28 28 '3 376 98 Miscellaneous 0 8of12 Adde, .t 6 Alternative 1 EXPENSE SCHEDULE DESCRIPTION TOTAL ADVER I ISIN'G JAN '8 FEB _3 MAR APR M:\1" JUN it 1. At G SI.P 'R OCT 28 NO\ DEC rot.m. TAXES & LICENSES 1 Credit checks _ Truck registration 10 4iO to 10 Ib IU 10 If, to 10 In In 10 Il6 i HCD operating permit 4 Laundry ��ending pennit 5 Mobilehomerenistrations 149 60 T50l') 6U ti Mobilehane property tapes 0 7 Ncights & measures meter pennit O 8 Spapool permits 0 93 Miscellaneous 69 0 TOTALTAXES 69�9 f LICENSES 529 IU IU Si 10 I0 IO 7U IU 10 10 10 1.194 POOL SUPPLIES REPAIRS I Pool scn ice '_ Fountain sen ice U Repair/Maintenancc Pool s C Spas 0 4 Conditioner U 93 Misccl laneous , U TOTAL POOL SUPPLIES/REPAIRS 0 U 0 0 0 0 0 0 U 0 0 0 U 0 LEGAL FEES 1 Evictions/tenant ref ated _ Other legal TOTAL LEGAL FEES 100 100 100 too 100 100 100 100 100 I00 IOU 100 100 IUO IOU 100 100 100 100 100 100 IOU 100 IUO 0 1,200 1.200 AUDIT,TAX FES I Estimate l'OTALAUDITII'ANFEES 0 0 1,500 2.500 0 U 0 0 0 0 0 0 0 2.500 SfiO ACCOUNTING/B U DG ET/DP I Estimate TOTAL ACC1 G.BUDGF.11DP 1,697 1,697 1.697 1,697 1.697 1,697 1.697 1.697 1.697 1,697 1,697 1.697 1.697 1.697 1.097 1,697 1.697 1.097 1.697 L(597 1.697 1.07 10.000 10,000 28,667 28.667 OTHER PROFESSIONAL FEES I Rentsun ey 98 Miscellaneous TOTAL OTHER PROF. FEES 100 100 100 100 t0U too 100 100 IOU 100 1.500 100 1.600 100 t00 IOU 100 100 100 100 100 100 100 100 IUO 1500 1200 2,700 COMPUTER SUPPORT MRI Support Charges TOTAL COMPUT-ER SUPPOR r 50 50 50 50 50 50 50 SU 50 50 50 50 50 ;O SU 51) 50 50 50 50 50 50 50 50 600 600 REGIONAL MANAGENIENT I Estimate 500 500 500 500 500 500 500 500 500 500 500 50() F non 9of12 Adde,_ _.a 6 Alternative 1 EXPENSE SCHEDULE DESCRIPTION TO MI. REGIONAL M,\NAGEIEN r JAN 500 FEB 500 MAR 500 APR 5Q0 MAY 500 JUN 500 JL'L 50ti AUG 500 SEP 500 UCT 5(,0 NOV 5V) DEC 5U6 TOTAL 6.0(Ki LEGISLAi'IV'E CONTRIBUTIONS 1 Comm. to Sme Property Rights 2 W'MA PAC ( 0 TOfALLEGISLATIVE CONTRIB. 0 0 0 0 0 0 0 U U U u 0 0 CORP. TELEPHONE EXPENSE I Estimate 9 9 9 9 9 9 9 9 9 9 TOTAL CORP. TELEPIIONE 9 9 9 9 9 9 9 9 9 9 9 9 101 ORGANI7_A rIONAL DUES I W MA Dues 0 TOTAL ORGANIZA1lONAL DUES 0 0 0 0 0 0 0 v u 0 0 0 CORP. OFFICE EXPENSE I Estimate II II II II II 11 II II II II 11 11 I'9 TOTAL CORP. OFFICE EXPENSE I I I I I I I I I I 1 I I I I I I I I I 11 11 119 INSURANCE I Estimate 542 542 542 542 542 542 542 542 542 542 542 542 6.498 TOTALINSURANCE 542 542 542 542 5.42 542 542 54' 51_ 542 542 542 6.498 REAL ESTATE TAXES I Personal property 2 RE Tar Estimate 4.108 1,108 4,108 4.108 4,108 4.108 500 4.1% 4.1U8 4.108 4.108 4,108 4.108 500 49300 TOTAL REAL ESTATE TAXES 4.108 4,108 4,108 4.108 4.108 4.108 4.608 4,108 1,108 1,108 4.108 4.108 49,800 TRAVEL I Estimate 200 200 200 200 200 200 200 2V0 200 200 2(t0 200 2.4(0 TOTALTRAVEL 200 200 200 200 200 200 200 200 200 200 200 200 2,400 MANAGEMENT FEES I 5%ofrecenues 5.420 5,410 5,310 5.430 5,410 5.410 5.420 5.410 5.410 5.420 5.410 5.410 64.970 TOTAL MANAGEMENT FEES 5,420 5,410 5.410 5.4 o 5.410 5,410 5.420 5.410 5,410 5,420 5,410 5.410 63,970 RENT EXPENSE I City of Newport Beach 83,333 83,333 83,333 83333 83,333 83,333 83333 83.333 83.333 83.333 83,333 83333 1.000.000 TOTAL RENT EXPENSE 83.333 83.333 83333 83.333 8'Q33 83.333 83,333 83333 83_ 33 83.333 83.333 83.333 1,000,000 TAX AND LICENSE I Minimum Tax 2 LLC Fee S00 3 00 0.000 3.000 0 0 3,800 0 0 0 0 0 0 0 0 0 3.800 10 of 12 Adde—am 6 Alternative 1 SALARY SCHEDULE PARTIAL YEAR TOTAL NEXT OTHER (I,t to Is() EMPLOYEE CURRENT INCREASE: NEXT PAY ANNUAL START STOP SAL/TAXES EMPLOYEE POSITION PAY RATE MO. "-, PAY RATE (PER NIO) SAI.ARY IIRS/WK MO MO FTE's & INS. SALARIES I Maint. And Asst. Manager 2,520.00 1 5.0 2,646.00 31.800 40.0 1.00 37,930 2 1 3.0 0.00 U 40.0 1.00 0 3 1 3.0 0.00 0 40.0 1.00 0 4 1 3.0 0.00 0 40.0 1.00 0 5 0.0 3.00 0 0.00 0 TOTAL SALARIES 31,300 4.00 37,930 PAYROLL TAXES LIMIT % OSADI S76,200 6.20% MA S 130,200 1.45% FUI S7,000 0.80% SUI S7,000 3.60% TOTAL PAYROLL TAXES GROUP HEALTH INSURANCE AT S 150 Per month per FTE TOTAL GROUP HEALTH INSURANCE WORKERS' COMPENSATION INSURANCE WORK % OFFICE 0.38% MAINT. 4.540% SALES 0.24% TOTAL WORKERS' COMPENSATION INSURANCE 11 of 12 2,330 1,300 1,440 C'OCPII DESCRIPTION I1504121 DEPRFCIABLE IMPRO�IAIENTS 3 , 6 7 Y 10 II 12 11 IJ Esliinale 1450021 I OTAL DEPRECIABLE IMPROVEMENTS JAN EEB %IAR APR Ada. .m 6 Alternative 1 (API LAI. IMPROVE>I EN I S 1LN J1. 1. m I \(,% DEC IOIAL 1 11 II 11 1 11 II r n 11 11 u D u 2.000 -',Il o 2,01)(1 211(I11 211w ? IIIIII 2111111 IIIIII ? 11fI1/ 111110 ?IIIIII 2111111 2401111 2.000 2 11111) Imp) 2,000 2,wo ?,IIIIII 211011 2.000 2 ,10o 2,000 1111111 2.00(1 24.000 12 Of 12 II)-F&-I III 01 Jn P%I Footnotes DESCRIPTION 1,3 Total Income 2,4 Home Office Expense 2,5 Manager Expense Total Expenses Addt..aum 7 Alternative 2 AMADOL4 Year I Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Projection Projection Projection Projection Projection Projection Projection Projection Projection Projection 1,299,656 1,403,649 1,499,042 1,529,023 1,559,603 1,590,795 1,622,611 1,655,063 1.688,165 1,721.928 (170,950) (179,439) (183,028) (186,689) (190,422) (194,231) (198,115) (202,078) (206,119) (210,242) (99,443) (104,332) (106,419) (108,547) (110,718) (112,932) (115,191) (117,495) (119,845) (122,241) (270,393) (283,771) (289,447) (295,235) (301,140) (307,163) (313,306) (319.572) (325,964) (332,483) Cash Flow Subtotal 1,029,263 I,I 19,878 1,209,595 1,233,787 1,258,463 1,283,632 1,309,305 1.335,491 1,362,201 1,389,445 Capital Improvements (24,000) (24,480) (24.970) (25,469) (25,978) (26,498) (27,028) (27,568) (23,120) (28,682) Interest (33,320) (27,100) (20,290) (12,830) (4,670) Principal (66,320) (72.550) (79,380) (86,790) (94,950) Capital/Utility Improvement Reserve (5,263) (42,661) (60,344) (61,551) (62,782) (64,033) (65.319) 66,625 ( ) (67.958) (69,317) Base Rent to City 1,000,000 1,052,737 1,124,281 1,146,767 1,169,702 1,193,096 1.216,958 1,241.298 1,266,123 1,291,446 Rent Credit from City 0 (99.640) (99,650) (99,670) (99,620) (99,620) 0 0 0 0 Resales % to City 58,000 42,840 33,631 26,875 27,413 27,961 28,520 29,091 29,673 30,266 Total Rent to City 1,058,000 995,937 1,058,263 1,073,972 1,097,495 1.121,438 1,245,479 1,270.388 1,295,796 1.321,712 Footnotes: I Year One Monthly Rental Rates: Waterfront-$2,300/Waterview $1,800/Tennis View $1,600. Rate; are adjusted by CPI each year, assumed to be 2% for this pro forma. 2 Based upon historical operations of Marina Park as appropriate and Bayside Village as appropriate. Adjusted by CPI each year, assumed to be 2% for this pro fornia. 3 Year 2 forward revenue increase from 12 new homesites on portion of current tennis court land at $1,000 per spacelmonth, adjusted by 2% CPI each year. One space rented each month of year 2. 4 Variable Home Office Expenses relative to 12 new spaces are management fees, real estate taxes and insurance 5 Variable Manager Expenses relative to 12 new spaces are repairs and supplies and utilities 6 $1,000,000 ninimum plus CPI each year, assumed to be 2%, or 75% of Total Income, whichever is greater. 1 of 14 Ad, , 7 Alternative 2 SUMMARY HOME OFFICE EXPENSE St. AIMARY DESCRIPI ION Projection ACC DESCRIPTION Projection DES(RIP IION Projection Gross Potential Rent 1,36:t 000 il1h1021 Lcual Fees 1.21111 Office Salaries 0 Disputed Rent Rehate 0 5t)(0021 Audit Tax 2,i00 \laimenance Salaries ? I BOn Vacancies n 501002I .Accounting 13,0gut DP 2x.h67 Patrol Salaries 11 Tenant AIIo„anew (720oot i064101 Ofhcr Professional Fees 2,700 Risk Maneemem Salaries I.ix1 it 11,5021 ComputeSllppor't Melt 1: plo,ec L,rh_ine n i0rn 1021 Regional %lanacontem 6.111111 Ilt) Pa,roll %%ork ('emp Sal. IJ101 50671121 Elnple.cel3onuml pa-11) I.is? Free Rent n 5nh:u121 Leeislalire Conn ibum— n folal Salaries 34,11u Net Billable Rent 1 29hp0u i1171021 (Co P. Ielcphone Expense In? O,vnel Coach Rent n 507IWI Ornanizalional Dues D P;n oll Taxes 2,xsn Coach Rental Commissions n i07401_1 Corp. O(Iice Expense 129 Group Insurance I rnu Coach Rental Costs n 1 oral Professional Fees 41,4x2 %k orkers' Comp. Insurance 1.440 Deposits Forfeit d n Other Fmp. Related Fxp. 11 Bad Debts Mo,e Outs n JD I F Plan Contributions h2? Employee Rent 0 51I11121 Insurance (1,49s Total Pacroll Taxes Total Rental Income 1?96JOID i112021 Absoibed Insurance Losses 0 i 120021 Interest - Deferred n Automoti,e ill? Garage Rentals o 5110021 If a,d 2400 Supplies 1.341I Billboard Rental o i1 i0021 Lease Expense-NBBR 0 Landscaping I11"t) Total Other Rental Income 0 i1h1 e, 64!1711 Garrlenirnt Contracts n i 170021 -rases & Licenses ? x60 Park Patrol 0 Coach ln,emorn Sales n 51 N00_1I I mal Other Expense 127.46% O,med Coach Expense D Cost of sales n 51901121 Repairs & Maintenance 116()7 Salesperson Salaries n Total Home Otlice Expense 1711,950 Plumbim! Repairs u Salesperson Commissions 0 O.U" Pool Maine. Contract u Im'emory Advetising 11 Pool Repairs D Other Sales Expense 0 Total Repairs & Supplies 32,0Xx Flooring Interest II Total lm'entol}sales 0 7 dephone Communications 1.404 Dues & Subscriptions 2i0 Resale Commissions 0 Oflice Fapense & Postage 2.299 Salesperson Salaries D Miscellaneous Expense D Salesperson Commissions II 113ase Rent - City ol'Na,pon 1000,00 11'ainin_ & Seminars D Resale Advertising 0 Total Office Expense 3.953 Other Sales Expense II Total Resale Income 0 Tenant Relations 1.00 Total Coach Sales Resales D Advertisine Ito Taxes & Licenses 1.194 Vending Inno o Jon Total Other Expense 3.461 Laundry Income Sus Total bending Income 1,30 Electric 6,3ftll Reimbursed Electric 0 Neaport Surcharge 690 Electric Subtotal o jml Interest Income 0 Gas 12 J.eO Miscellaneous Income I652 Reimbursed Gas 0 Total Other Income 2.348 Gas Subtotal 12 Jfi0 Wate D Total Income I?9)hi^ Sara 0 0.011. Total utilities 19,7K0 Total klana^_e Expense 99.JJ? 0.0. o 2of14 Ad, -itt 7 Alternative 2 INCOME SCHEDUE 10-Fcb-1111 fl':L4 PM DESCRIPTION JAN FEB \IAR APR MAN JLN it ACG SEP 0( 1 DEC TOT.\L REMARKS TOTAL UNITS �--FEET 'er �• :NL SQUARE FEET l Ss \1arA\I_rn - mo, '_entsyme _111N1 11 hat Built - \%.=Tfront 24 2.110 \A u1 \'ieu' __ I,yINI NIARI:ET RENT114.0(N) II-L000 II4,000 II4,00o 114.000 114.01111 I14J000 114,000 114MIN1 II 114.1100 114.1901 T.- \ Ift, 1? I.t,IN) (RENT PER S.F.) 0.19) 0.00 0.00 0.00 0.00 -LIMO 136xp1Nl N-H,x Iles l 1,W) LEASE GAIN (LOSS) 0.00 0M) 00) QW 0.1111 f"I'l) 0.00 0.110 RENT POTEN TIX 114.000 114,000 114.000 I14,IN)0 II4,INm 114.000 114.000 114.000 114,000 II4,(00 114,w Ni IIJ!Nm II L?65.IN111 I .R .F.) D.INI ()Ill) 11.01) O.INI 'My)II.1)0 Nlarin mns nvo stun . . __.-_ - _-_ 0.000.00IIIN) 0.000 1),IIII 11.1 N/ 11.1111 (1 I'll \1 a[trfron t I) 2.y191 \'AC:\NCI ES (UN IT Si 0 11 0 II q u \\ata,ienr 9 2?1 I0 \'ACANC I ES ( PERCENT) I1.0"ii Il.fl': 11.1Y' IITI"•� II.11"n fl,ll"., 0 0,11"n II II.II"�� n it 0 II fmni5 \'iar 0 I)nNl %ACANCTES IANIOLNTI 11 11 II 11 11 11 11 I) II II Nft,'Hontcslta 0 I.�INI TEKANTALLO\NANCES t601N)) I60)M f6mo ) (/IIIN), 16,01101 I(0)0111 (6,INN)1 (6i1100) (6000) 16.IN101 0 (6000) 1) (6J0)10 II 172MKII EMPLOI FE LODGING \IODELDFFICE n FREE RENT q U II1.`f,INX) 10K.01N) I1ly000 ,)):!,Will 10.1. 110 10..000 11NINN) I(IY1)III) IIIN INm IIIYI9)1) 111\.I11N1 111f.011) 1.796.1100 DEPOSITS FORM TED FMPL01"EE RENT NET RENTAL INCOME I(^' IIIN) I(IR000 1W.001) Illy IN11) 101100 lily 100 I IIN 01NI 108AM 1118.000 Illy 1NIII I 9f I NI ECONOMIC OCCLP:\NC'1 ("b Marks RaTm 94.7"b 94.7, 94.7"„ 94]•1b 94.7"a 94.711.1 94.7"„ 9-L71., 44.7" 94.7"„ 94J"„ 9JJ":. 94.7"„ ECONOMIC' OCC(PANCY I".. Rmt Potentiab 94.7% 94.7';L 94.7"6 94.7"6 94.7"„ 94.7"„ 94 7" b 94 7"L 94 7"5, 94 7".,� 94 "'„ 94 7"" 94 7"' PASSTIIROUGH INCOME ' I Estiltiate 0 T0T:0. PASSTHROLGH INCOME U 0 0 rl U 0 U 0 II 0 q II fl GARAGE RENTAL INCOME Il Ga @ Rental Occupant} 0 Rent per unit I Estimattll inmme 0 0 0 0 0 0 0 0 0 Il 0 II 11 TOTAL GARAGE RENTAL INCOME U 0 0 0 0 11 1) 0 0 1) 1) n 11 BILLBOARD RENT AT. INCOME I TOTAL BILLBOARD RENTAL INCOME 0 II (1 U 0 0 0 II U 11 0 0 II NE\\'PORT SURCHARGE 1 Wata Fee 54 54 5R 59 SR cK 5S 58 58 Sy Sy Sy 696 SI.I th pR—pitd site TOTAL NE1\PORT SLRCHARGE 5R 59 58 5y 58 5g 5,y 58 5y SS Sy 5y 696 O\\NED COACH RENT I Income Space 1) I Income sp.m II TOTAL OR NED CO.V I RENT II 0 0 0 0 0 0 0 0 0 0 0 0 COACH RENTAL COSTS 7 1 0 4 5 0 h 11 7 Y 3 Of 14 Ad, m 7 Alternative 2 INCOME S('IIEDLLE W Fch-W 02:IJ PSI DESCRIPTION 1.\N FEB MAR APR MAY JL'N JLL Al SEP 0(1 NO\ DI TOTAL RENI.\RKS Y 10 II I? I? li u 9% Nliscellarlcous 0 TOTAL COACH RENTAL COSiS 1) U Il 0 U 0 0 0 0 I) 0 U p FENDING INCOME ? Soda —dune IIM) IIN) I'm 100 JUq TOTAL VENDING INC'OAIG 100 I1 a 11N1 U U lou 0 n I'm, 0 0 400 L:\UNDRN INCOME 2 Esti—te 5% 51 G% 5% G% 58 5% 58 S,Y <Y iY GY fi'Y �11"�i oT\'endO�s lnlrome TOT:\L LALNDR7 NC'ONIE B 5% >% 270 i% 58 5S 5R 58 5Y 54 5Y )nY S IJN—h � C.$0, 10 min. dry \ENDING COST OF SA -ES I Cost oTSales - \ mding TOTAL PENDING COST OF SA ES INTEREST INCONIE TOTAL INTEREST INCOME MISCELLANEOLS NCONIE I Late'NSF charm TOTAL MISCELLANEOLS NCONIE V 0 11 1) I) 11 II II 11 1) Il 11 1) I 2 ? J 5 6 7 % I) III II 12 II II U 0 1) II I) (1 I) I) II 11 I1 I) II I?% 114 I?% 13% Ii% II% It% It% II% ItY It% IiY IfiG' I?% I?% Ii% Iit% It% It% It% It% 118 ICY ItY I611 4 Of 14 Adde�,dum 7 Alternative 2 RESALES SCHEDULE Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10 Projection Projection Projection Projection Projection Projection Projection Projection Projection Projection # of Sales Waterfront 3 2 1 1 I 1 1 1 1 1 Waterview 3 2 2 1 l l 1 1 1 1 Tennis View 2 2 1 1 l I l I 1 1 New Homesites 0 0 1 1 l I l 1 l I Sales Prices: Waterfront 180,000 183,600 187,272 191,017 194,838 198,735 202,709 206,763 210,899 215,117 Waterview 140,000 142,800 145,656 148,569 151,541 154,571 157,663 160,816 164,032 167,313 Tennis View 100,000 102,000 104,040 106,121 108,243 110,408 112,616 114,869 117,166 119,509 New Homesites 90,000 91,800 93,636 95,509 97,419 99,367 101,355 103,382 Revenue Waterfront 540,000 367,200 187,272 191,017 194,838 198,735 202,709 206,763 210,899 215,117 Waterview 420,000 285,600 291,312 148,569 151,541 154,571 157,663 160,816 164,032 167,313 Tennis View 200,000 204,000 104,040 106,121 108,243 110,408 112,616 114,869 117,166 119,509 No View 0 0 90,000 91,800 93,636 95,509 97,419 99,367 101.355 103,382 Total 1,160,000 856,800 672;624 537,507 548,258 559,223 570,407 581,815 593,452 605,321 Resales % to City 5% 5% 5% 5% 5% 5% 5% 5% 5% 5° o Revenue to City 58,000 42,840 33,631 26,875 27,413 27,961 28,520 29,091 29,673 30,266 5of14 Ado. _um 7 Alternative 2 EXPENSE SCHEDULE IJLMC K It,I ION JAN FEB MAR APR MAY JUN JL-L :\LG SEP 0('1 NO\ DEC [01\L RISK MANAGI- LENT SALARIES I Estimate 132 132 13 2 1?2 132 132 13_' 1?2 I? 2 13' I32 13' List TOTAL RISK.MANAGEMENT SAL. 132 I?= 132 1?2 I32 I32 I?' I?' I?' I32 L•` 132 1.581 11.0. PAYROLL/WORK CONIP S:\L. I Estimate Sb 86 8o Sb 86 So 86 go So 86 Qb 86 1.13,18 TOTAL 11.O. PAYROLLAVORK COMP. 86 86 86 86 86 86 86 86 86 80 86 Sty 1.038 0111ER EMPLOYEF. EXPENSE I holiday parry '_ Birthdays 0 3 Team building 0 4 Barbecue 0 1O'IALOTHER EMPLOYEE EXPENSE 0 0 0 0 0 0 0 0 n 0 0 0 0 401-K PLAN CONTRIBUTIONS I Estimate 52 52 5 2i2 52 52 51 5 2_ _ 1 OTAL. 401-K PLAN CON] RIB. 52 52 52 52 52 - - �, 5, b,p AUTOMOTIVE 2 Truck repairs 64 va 3 Golfcartrepairs 86 54 54 54 147 98 Miscellaneous 11 11 If II II II II 11 11 II 11 It 1'9 1 OTAL AUTOMOM, E 86 97 75 II 21 64 '_I II 'I 64 'I II 505 \\'ASTE DISPOSAL I Trash Pickup 463 4b3 46? 463 46" 463 463 4b3 4b? 463 4o3 46? 5.556 98 Miscellaneous 0 TOl'AL RN ASTE DISPOSAL 463 463 40 4o3 4o3 163 463 16? :b? -463 4o3 463 5.550 SUPPLIES I Cleaners/chemicals 'I '1 21 21 2 Plastic/Paper 21 21 21 21 21 21 21 43 21 43 21 43 21 13 't 21 21 43 21 413, 247 387 3 Flags 69 ,- 101 J Unifonns 195 195 5 Light bulbs 28 28 28 28 28 28 28 28 28 _'8 28 28 3?5 6 Trash cans 39 37 75 98 Miscellaneous 0 TOTAL SUPPLIES 265 70 70 177 70 I_d 92 128 9' 70 9' 9' 1 \ati LANDSCAPING 1 Olice tree spray ing 0 2 Flo,ers/grass seed/sod/pl ants 3 Tree trim ming 0 0 -t Tree rein oval;replacement 98 Composite 1,090 1,090 1,090 1.090 1,090 1.090 1,090 1.090 1.090 1.090 1,090 1,090 0 13,080 TOTAL LANDSCAPING 1,090 1,090 1.090 1.090 1,090 1.090 1,090 1.090 1.090 1,090 1.090 1.090 13.080 6of14 Ada, ,um 7 Alternative 2 EXPENSE SCHEDULE DESCRIPTION JAN 1E13 MAR APR MAY JUN it .U'G SIiP OCT NOV DEC TOTAL GARDENING CON 'f RAC fS I Emironmental Care 0 TOTAL GARDENING CON 0 0 0 0 U 0 fi U U U 0 0 0 PARKPATROL I Patrol One 93 Miscellaneous 0 0 TOTAL PARK PATROL 0 p 0 0 0 U 0 0 U 0 0 U U M NED COACH EXPENSE I Staffhousina '_ Clean carpets 0 98 Miscellaneous 0 DOTAL OWNED COACH EXPENSE 0 0 0 0 0 0 0 0 0 0 0 0 0 REPAIRS & MAINTENANCE I Plumbing/serer 215 215 215 215 -115 215 215 _15 215 215 215 215 2,578 2 Electric 38 38 38 33 38 38 33 33 33 33 33 3R 414 3 TV antenna repair, 9 9 9 9 9 9 9 9 9 9 9 9 111 4 Fence repair and transf onner sheds 129 129 5 Cathodic protection 53 6 Fire extinguishers 3(11 3 01 7 Tools 150 21 21 21 21_1 SUO 500 8 Gas Meters 40 40 40 40 40 40 21 40 21 40 21 40 21 40 21 40 21 40 387 474 9 Pedestals/risers 107 408 107 403 107 403 107 408 107 408 107 408 3.093 10 Pest control 16 16 16 16 16 I6 16 16 16 16 16 16 193 11 First Aid kits I-' Beach Beach sand 430 125 13 Shop'stomgebin rental 43 43 43 43 43 43 43 43 43 43 43 43 430 516 14 Restrap and paint patio f umiture IS Continue streetlight replacement Ibl 61 Ibl 0 16 Equipment rental 'I '_I 21 21 Ibl 161 644 17 Maintenance of Fitness Equipm ent _I 21 _ _'I 21 21 -�1 '_53 93 Miscellaneous materials 107 107 107 107 107 107 107 107 107 107 107 107 0 1.289 TOTAL REPAIRS & MAINTENANCE 747 1,209 618 919 1,338 919 618 1,381 1 243 919 779 919 11,607 TELEPHONE. I Office phone/I ong distance 0 2 Pagers 0 3 Ans«ering sem ice - 0 4 Pay phone 0 5 A UT contract 6 Radio batteries 0 0 93 Composite 117 117 117 117 117 117 117 117 117 117 117 117 1,404 TOTAL TELEPHONE- 117 117 117 117 117 117 117 117 117 117 117 117 1,404 7of14 Addy m 7 Alternative 2 EXPENSE SCHFDIILF DESC'RIPI[ON JAN FE13 MAR APR M:1Y JUN Jt'L ,\CG SLP OCI NOV DEC I"OIAL DUFS & SUBSCRIPr[ON S I Berlin Report '_ Orange County Register U 3 Newport Beach Daily Pilot 0 4 Civil codes 100 0 5 Title'_5 151J 100 6 Kelly Blue Book 150 98 Miscellaneous u TOTAL DUES &SUBSCRIPTIONS 250 0 U 0 0 0 0 0 0 0 0 0 250 OFFICE EXPENSE I Postage 107 107 107 Ili? Ill% 10? 107 1,7 107 107 107 10= 1.289 '_ Federal express/delivery charges 9 9 9 9 9 9 9 9 Postage meter rental 18 I S 18 18 I S Is I S 18 9 18 9 18 9 18 9 18 10+ 19 T Water II II II II _ 5 Computer suppl ies II II II II II II II 11 129 b Stationery 107 107 ( 'l5 7 Business cards 0es 3 Copier paper and F as Canridg 9 Copier paper I_ 10 Copienn aintenance 0 II Title Searches 2I 0 98 Miscellaneous 'I 21 21 '_I 21 21 8b _1 21 21 _I '1 21 2I 21 '_I '58 TO] AL OFFICE EXPENSE 166 1b6 188 274 16b 188 106 Ibb 188 Ibb 293 I66 1199 NIISCF.LLANEOUS EXPENSE I WMA meetings 2Training classes u 3 WMA Comention 0 98 Miscellaneous 0 0 TOTAL MISCELLANEOUS EXPENSE 0 0 0 0 0 0 0 0 0 0 0 0 0 TENANT RELATIONS I Birthday cards 43 2 Holiday parties ,I I ' 43 4 3 Christmas party 1 6 d July ath pariv 115 9'T 924 5 Homownersmeetings II II II 11 11 21515 II II II 11 II II II 137 6 Bingo II II 11 7 Coffee '_I 21 21 , 21 21 21 21 21 21 21 21 21 258 98 Miscellaneous 21 21 21 21 21 21 21 21 21 21 21 21 258 TOTAL TENANT RELATIONS 108 76 54 54 76 54 280 54 76 54 65 978 1.930 ADVERTISING I Yellow pages 28 28 28 28 28 28 28 28 28 28 28 28 336 98 Miscellaneous 0 TOTAL ADVERTISING '8 '8 '8 '8 28 28 28 28 4 28 28 28 336 8of14 Addt. m 7 Alternative 2 EXPENSE SCI[EDLJLI- DP.SCRIPIION JAN FEB NIAR APR MAY JUN JCL AL G SEP OCT NOV DEC TOTAI. TAXES & LICENSES I Credit checks IO 10 10 10 IO 10 IO 10 Iti 10 IO 1(r I16 _ Truck registration 450 150 3 IICD operating permit 499 491) 4 Laundry/%ending permit o0 60 5 Mobilehome registrations ft 6 Mobilehome property taxes 0 7 Weights & measures in eter peen it It 8 Spaipool permits 0 98 Miscellaneous 69 69 IOf AL TAXES & LICENSES 529 10 Ill 509 10 10 10 70 W Iu 10 IU 1194 POOL SUPPLIES,REPAIRS I Pool ser%ice 0 i Fountain sen-ice 0 3 Repair,M aimenance Pool s & Spas 0 4 Conditioner 0 98 Miscellaneous 0 TOTAL POOL SUPPLI F;,S,REPAIRS 0 0 0 0 0 0 0 0 0 0 0 0 0 LEGAL FEES I E%ictions/tenant rel ated 0 2 Otherlegal 100 100 100 100 I00 100 100 100 100 100 100 100 1.200 TOTAL LEGAL FEES 100 100 100 100 I00 100 100 100 100 100 100 100 1.200 AUDIT/TAX FES I Estimate 1500 ' S00 TOTAL AUDITII AX FEES 0 0 2.500 0 0 0 0 0 0 0 0 0 500 ACCOU N T IN G/B U DG ET /D P I Estimate 1.697 1,697 1.697 L697 1.691 1,697 1.697 1,697 1.07 1.697 1,697 10.000 28667 TOTAL ACCTG!BUDGET/DP 1,697 1.697 1.697 1,697 1.697 1.697 1.697 1.697 1697 1697 1697 10000 28667 OTHER PROFESSIONAL. FEES I Rentsuney 1.500 1500 98 Miscellaneous 100 IOU 100 100 100 100 100 100 100 100 100 100 I 200 TOTAL 0 IT IER PROF. FEES 100 100 100 100 100 1,600 100 100 100 100 IUO I(4) 2.700 COMPUTER SUPPORT MR[ Support Charges 50 50 SU 50 50 50 50 50 50 50 50 50 600 TOTAL COMPUTER SUPPORT 50 50 50 50 50 50 50 50 50 50 50 50 600 REGIONAL MANAGEMENT I Estimate 500 300 500 500 500 500 500 500 500 500 500 500 6.OW TOTAL REGIONAL. MANAGEiNIENT 500 500 500 500 500 500 500 500 500 500 500 500 6.000 9of14 AddE___am 7 Alternative 2 EXPENSE SCHEDULE DESCRIPTION JAN FEB NIAR APR MAY JUN JUL AUG SLIP OCT NOV DEC TOTAL LEGISLATIVE CONTRIBUTIONS I Comm. to Sa%a Property Rights _' W'M,\ PAC 0 0 1"OTALLEGISLATIVE CONTRIB. 0 0 0 0 0 0 0 0 0 0 0 0 0 CORP. TELEPHONE EXPENSE I Estimate 9 9 9 9 9 9 9 9 9 9 9 9 103 TOTAL CORP. TELEPHONE 9 9 9 9 9 9 9 9 9 9 9 9 103 ORGANIZATIONAL DUES I W MA Dues U TOTAL ORGANIZATIONAL DUES 0 U 0 0 0 0 0 0 0 U U 0 0 CORP. OFFICE EXPENSE •1 Estimate II II II II II II II II II II II II 129 1 OTAL CORP. OFFICE EXPENSE I I I I I I I I I I I I I I I I I I I I I I 11 119 INSURANCE I Estimate 542 542 542 542 542 542 542 532 54' 54' 54' 542 6.498 TOTAL INSURANCE 512 542 542 5542 542 542 542 542 54_ 54_ 512 542 6.498 REAL ESTATE TAXES I Personal property 500 300 2 RE Tax Estimate 4.108 4.108 4,108 4,108 4.108 4,108 4.108 4.108 4.108 4,108 4.103 4.108 49.300 TOTAL REAL ESTATE TAXES 4,108 4,108 4.103 4,108 4.103 4,108 4,608 4.108 4.108 4.108 4.108 4.108 49,800 TRAVEL I Estimate 200 200 200 200 20o 200 200 200 _00 200 200 200 2.400 TOTAL TRAVEL 200 200 200 200 200 200 200 200 200 200 200 200 2,-400 MANAGEMENT FEES 5o o of re. enues 5,420 5.410 5,410 5.430 5.410 5,410 5,420 5.410 5,410 5.420 5M0 5,410 6497U TOTAL MANAGEMENT FEES 5.420 5,410 5.410 5.430 5,410 5.410 5.420 5.410 5,410 5.420 5.410 5,410 64.()70 RENT EXPENSE I City of Ne%% port Beach 83.333 83,333 83.333 83333 83.333 8.3,333 83.333 83333 R,333 83.333 83333 83333 I000000 TOTAL RENT EXPENSE 83.333 83.333 83.333 83.333 83.333 83.333 83.333 83333 83333 83333 83333 83333 1000000 TAX AND LICENSE I Minimum Tax 800 800 2 LLC Fee 3.000 3.000 0 0 3,800 0 0 0 0 0 0 0 0 0 3,3U0 10 Of 14 EMPLOYEE I 2 3 4 5 TOTAL SALARIES PAYROLLTAXES Adde,.—am 7 Alternative 2 SALARYSCHEDULE PARTIAL YEAR NEXT OTHER (Ist to Ist) CURRENT INCREASE: NEXT PAY ANNUAL START STOP POSITION PAY RATE NIO. % PAY RATE (PER MO) SALARY HRS"WK MO MO Main[. And Asst. Manager 1520.00 1 5.0 2.646.00 31,800 40.0 1 3.0 0.00 0 40.0 1 3.0 0.00 0 40.0 1 3.0 0.00 0 40.0 0.0 8.00 0 31,800 TOTAL PAYROLL TAXES GROUP HEALTH INSURANCE TOTAL GROUP 14EALTH INSURANCE WORKERS' COMPENSATION INSURANCE TOTAL WORKERS' COMPENSATION INSURANCE LIMIT °io OSADI 576.200 6.20% MA 5130.200 1.45% FUI 57,000 0.80% SUI 57,000 3.6090 AT $150 Per month ptr FTE WORK % OFFICE 0.33% MAINT. 4.54% SALES 0.24% 11 of 14 i soo 1,440 TOTAL EMPLOYEE SAI.iTAXES FTE's K INS. 1.00 37.930 1.00 0 1.00 0 1.00 0 0.00 0 4.00 37,980 COUNT DESC'RII'TION 1450021 DEPRECIABLEPOPRO%RMENIS 1 J + 6 9 111 II 12 11 14 Eslimale I450021 TOTAL DEPRECIABLE NPROVEMEN1:S FEB NIAR Ado m 7 Alternative 2 cnrrr:�I. Ia1PR1nT�rnNTs MAP RN DEC TOI"AL REMARKS ? 011U 2.000 DIN) 2 11 m > 11111) 2 11110 2J111U 2 L11111 III III ' 1"m INII1 2 111111 I II II II 11 11 1 11 11 0 0 u n 24 IHNI ? IIUII 2.UU0 2.1mo 2,111111 2.000 2,000 2.0110 2 II1111 2 111111 2 (11111 2 11,11) 2 111111 24,000 12 Of 14 W Vcb-00 02:14 PM LO:\N DESCRIPTIO DESCRIPTION Community Utilization Pla 400.000 PRINCIPAL - 1Io. A ort.: Loan -I Initial Principal $40Q000J)0 Amortization Years 5 Interest Rate r 9.00"0 Note: Payments beg in in year Iwo of this forecast. Ada, am 7 Alternative 2 DEBI" SCI IEDULF 03-Feb-00 0'_:U PM FEB .1I:\R APR 'IL\Y 1LN JL'L XL O SEP OCI NO, DEC TOTJL 0 n 0 FOI"AL. PRINCIPAL 0 0 0 0 0 0 0 0 0 0 0 0 0 DEFERRED INI -ERESr Loan =I 0 MAL DEFERRED INI 0 0 0 0 0 0 0 ll 0 0 0 0 0 INTEREST EXPENSE Loan =I 0 0 0 0 TOTAL INTEREST ESP. 0 0 0 0 0 0 0 V 0 0 0 0 0 13 of 14 Add, ---um 7 Alternative 2 lennis Courts (4) and I li*lnesites (12) Construction Costs Tennis Courts Low II1,, 11 IMidpoilll Reference Concrete. Posts. Net. Striping ]U00 27.500 23.000 Marshall R Swift Section 67 Page 6 Lighting 6.000 3.000 7,000 Marshall R Swift Section 67 Paee 6 Fencing 4,750 7.000 -1,87_5 Marshall E S,%ifl Section 67 Pa_e 6 Subtotal 29.250 42.500 35.875 *Local Cost Multiplier L17 34.221 49.725 41,974 Marshall & S%%ift Section 99 Page 6 *C UITent Cost Multiplier to 6 99 1.05 35.934 52.21 I 44.072 Marshall & Swift Section 99 Page 3 *Assumed Cost Multiplier 7.99-100 1.01 36.293 52.733 44.i13 2- Court Discount (5°0) 0.05 ( I,S15) (2,637) (2.226) Nlarcllall R Slcifl Section 67 Page 6 Calculated Cost per Court 34.473 50.097 42?88 # of( 'ourts 4 4 4 Total Calculated Cost of Tennis Courts 137.911 2003R7 16Q15It Ilomesites Marshall & S%%ill "(nmd" Park 5 96 Engineering 705 Marshall & S%%ill Section 63 Pa_e 3 Grading 645 Marshall Swift Section 63 Paee 3 Street Pacing 1.040 Marshall C Slcifl Section 63 Paec 3 Patios Walks 795 Marshall & Swift Section 63 Paee 3 Sewer 755 Marshall fi Swift Section 63 Page 3 Water 690 Marshall R S%%ift Section 63 Paee 3 Electric 1.120 Marshall & Slcifl Section 63 Paee 3 Buildings 0 No additional buildings projected Mist. 325 Marshall & Swill Section 63 Page 3 Water Fees, Meter and connection 260 City ol'Ncw port Beach Sewer Pees 455 City of Newport Beach Subtotal 7,700 *Local Cost Multiplier 1.17 9,009 Marshall C Swift Section 99 Page 6 *Current Cost Multiplier to 6,99 1.05 9Ai9 Marshall & Swift Section 99 Page 3 *Assumed Cost Multiplier 7.99-1 00 1.01 9.554 tt of Ilomesites 12 Total Calculated Cost of llomesites 114.641) Other Costs: Demolition, Renlocal of Existing ('ourts and M iscellancous Total Costs 14 of 14 10Q000 Istimale 3 83,779-9-1 Before Rounding Aq�qq�A TAqZ)K� (Homeowner Association Newport Beach 3300 Newport Boulevard Newport Beach, California 92658-8915 Attn: Sharon Wood, Assistant City Manager Dear Ms. Wood: On behalf of the residents of Marinapark, I want it to be known that we have been involved in the preparation of this proposal and therefore accept its elements and contents. I further want it to be known that the Marinapark Homeowners Board has obtained, in accordance with our By-laws, the necessary resident approvals to allow us to endorse this proposal. In addition, Terra Vista Management has assured us in writing that upon receipt of a master lease from the City, they will in turn offer a sub -lease to the current homeowners of Marinapark. Sincerely, tewart , erkshire, T'resident 1 7 7 0 WEST BALBOA BLVD. NEWPORT BEACH, CA 9 2 6 6 3 it CI The Newport Harbor American Legion Post 291, Inc. Proposal for Future Use /Development Of Real Property February 4, 2000 Response to Request for Proposals City of Newport Beach, California Dated November 1999 The Newport Harbor American Legion Post 291, Inc. Lease Renewal Committee 215 East 15th Street Newport Beach, California 92663 • 9 (949) 673 -5070 0 (949 673 -9555 http:/Iwww.calegionpost291.org HAND DELIVERED February 4, 2000 •��I� fG 10��� "Ilr,• The American Legion NEWPORT HARBOR POST 291 215 15th Street Newport Beach, CA 92663 (949) 673 -5070 City of Newport Beach 3300 Newport Boulevard P. O. Box 1768 Newport Beach, CA 92658 -8915 Attn: Sharon Wood, Assistant City Manager Re: Proposal for Future Use /Development Dear Ms. Wood, Enclosed is our Proposal for Future Use/Development of the real property located at 215 East • 15'" Street, Newport Beach, the present site of The American Legion Newport Harbor Post 291, Inc. We thank you for the opportunity to submit this proposal. We reiterate our position with regard to future use of this property by indicating our strong interest in remaining at our present location and couple it with our desire to work in concert with the City of Newport Beach In its efforts to improve the quality of life for its citizens and visitors. Your consideration of this proposal is sincerely appreciated. If there are any questions or a need for further clarification, please contact the undersigned and anticipate a timely response. 1 PAUL N. CURTIS Commander PNC /ms C� i • 10 The Newport Harbor American Legion Post 291, Inc. Proposal for Future Use /Development Of Real Property February 4, 2000 Response to Request for Proposals City of Newport Beach, California Dated November 1999 The Newport Harbor American Legion Post 291, Inc. Lease Renewal Committee 215 East 15th Street Newport Beach, California 92663 • IM (949) 673 -5070 (] (949 673 -9555 http://www.calegionpost2gl.org 1 Table of Contents Title Page Executive Summary ................. ..............................3 City Project Goals ................. ............................... 4 Form of Disposition ................. ..............................6 Basic Qualifications ................ ............................... 6 Financial Qualifications ............. ............................... 7 Project Description ................................................ 8 Development Costs and Operating Pro Forma .......................... 9 . Implementation Schedule ............ ..............................9 Consultant Team ................... ..............................9 City Council Policy F- 7 ............... .............................10 Other Considerations ................ .............................10 California Military and Veterans Code . ............................... 11 Comment... ..................... .............................11 Reference Material Appendix A — Copy of Existing Lease Appendix B — Aerial Photograph of Site Appendix C — Community Organizations that use the Legion Post 291 Facility 0a L J 0 0 Executive Summary It is the desire of The American Legion Newport Harbor Post 291, Inc., ( "Post 291") to renew the existing lease with appropriate economic adjustments for the longest possible term consistent with the needs of its members, the City of Newport Beach and the State of California. The real property referenced by this proposal is commonly known as 215 East 15th Street, Newport Beach, California, 92663: It covers of approximately 58,677 square feet or 1.35 acres and is presently occupied by Post 291. It consists of three buildings, a parking lot, dry storage for small boats, a marina, and necessary support elements. The American Legion Newport Harbor Post 291, Inc., is a 501 (c) 19 Corporation. It consists of Post 291 with approximately 2,000 members, the Auxiliary with approximately 500 members, the Sons of the American Legion with approximately 400 members and the American Legion Yacht Club with approximately 750 members. Because of dual memberships, we estimate that the facility serves the needs or approximately 3,200 individual members and their families. Approximately forty percent of these people live within the City of Newport Beach. FJ City Project Goals High Quality Design The structures present at 215 East le Street have been in place in excess of twenty years and have withstood the test of time with regard to appearance and sensitivity to views of the bay by our neighbors and the present tenants. Public Visitor - Serving Access The Post 291 facilities are regularly and frequently made available to a long list of community groups for meetings and other public events. A list of these groups is attached as Appendix C. The operation of the marina specifically includes members of the public who are not otherwise members of The American Legion or one of its four organizations. Under this provision, members of the public are allowed and encouraged to sign up on the waiting list for wet or dry boat storage space as it becomes available. No preferential treatment is provided to anyone on the waiting list. The liquor licenses presently held by Post 291 are a type 58 license otherwise . known as a Veterans Club license and a type 57 license otherwise known as a Catering License. These licenses prohibit the sale of alcoholic beverages to members of the public who have unescorted access to the facility. Tidelands Regulations and State Lands Commission Determinations The renewal of the existing lease conforms to all such regulations and determinations. City Plans, Policies and Regulations The renewal of the existing lease conforms to city plans, policies, and regulations. Coastal Commission Regulations and Policies The renewal of the existing lease falls conforms to all such regulations and policies. 0 4 • Respect for property enjoyment rights Post 291 has occupied the present facility since 1979 when it was rebuilt because of a fire. To the best of our knowledge there have been no complaints regarding our use of the facilities or their presence in the neighborhood. We have enjoyed good relations with all of our neighbors and welcome contact with them on a regular basis. We believe that the burden on city resources has been kept to a minimum based upon the number of calls for service to the various city departments over the period of the existing lease. Strong Market Support We have experienced membership growth at the rate of approximately five to ten percent per year for the past five years and perhaps longer as a direct result of our efforts to involve ourselves in the community and involve the community in our activities wherever possible. We have received written recognition and expressions of gratitude and appreciation from a variety of community organizations because of our efforts and believe there is genuine interest in having Post 291 in the community at its present location. 0 Provision for a secure revenue stream to the City Post 291 has had a relationship with the City of Newport Beach since 1924, a period of 75 years. To the best of our knowledge, the Post 291 has never been in arrears in any of its obligations to the city or any vendor. Post 291 is blessed with sufficient cash flow from membership and operations to meet its obligations and has sufficient reserve for such obligations. There is no basis upon which to speculate that our history might not continue as it has with regard to financial performance. Catalyst for future improvements to Balboa Peninsula Post 291 does not contemplate any changes in facility, organization, or operation that would have an adverse impact on future improvements to Balboa Peninsula. Maintaining the existing facility will not increase the number of vehicle trips on the peninsula or otherwise adversely affect the peninsula community. 11 Form of Disposition 0 Post 291 does not believe it is in the best interests of its membership or the City of Newport Beach to attempt to purchase any portion of the land it currently leases. This belief is based on the fact that a good portion of the property may be designated as tidelands and therefore held in trust and not for sale. This proposal contemplates the renewal of the existing lease between Post 291 and the City of Newport Beach and does not envision joining with any other entity in an effort to secure such lease renewal. Basic Qualifications Since the renewal of the existing lease does not contemplate further development of the real property, no significant information regarding development experience would be of value. However, Post 291 is operated as a 501(c)19 corporation and as such is a California Corporation with rights to conduct business on behalf of its members. Post 291 operates under a Constitution and By -Laws that conform to The American Legion Department of California and National Headquarters. Post 291 has been in existence since 1924 and has been incorporated since 1936. The American Legion has been in existence since 1919. i Post 291 originally operated west of its current facility at 10th and Bay Streets. In 1940, Post 291 leased the current site at 215 East 15th Street from the city and operated out of temporary buildings until after World War ll. In 1949, construction started on the current hall and Post 291 has operated from its present site to this date. Improvements such as a larger marina, bulkheads, restroom and shower facilities, restoration of the Great Hall after the fire, and dry boat storage have been made since 1949. On May 30, 1969 the Great Hall was dedicated as a Veteran's Memorial Building, in honor of "All those who fought for freedom." On May 18, 1995, the Newport Beach Historical Society designated The American Legion Newport Harbor Post 291, Inc., facility as an Historical Site and presented Historical Marker #11 to the Post. A President, Secretary and Treasurer as well as Vice - Presidents operate Post 291. The President also acts as Chief Executive Officer and receives his or her authority from the general membership by written ballot annually. The CEO is responsible to the Executive Committee consisting of all elected and appointed officers and six Directors. L� IJ • Financial Qualifications 11 w The city has a copy of the latest financial statement for Post 291. Post 291 is completely self - supporting from membership dues, gifts, and rental income from its operations as represented in its financial statement. The American Legion Newport Harbor Post 291, Inc., has a long standing relationship with: 1. Bank of America at 3475 Via Lido, Newport Beach, CA 92663 2. Washington Mutual Savings Bank at 196 East 17th Street, Costa Mesa, CA 92627 . . 3. Morgan Stanley Dean Witter at 800 Newport Center Drive, Suite 700, Newport Beach, Ca 92660, Each of these institutions can vouch for the long -term financial stability and liquidity of Post 291. Any questions may be addressed to the Branch Manager of each firm listed above. Post 291 has sufficient resources to engage in and meet the commitment of a long -term renewal of its property lease. VA Proiect Description . The enclosed Site Plan (Appendix B) depicts the existing structures and uses of the property. The only construction contemplated for this site is that which is necessary to bring it into compliance with the governing codes and ordinances. This would include among other things, the installation of a Wet Standpipe System for fire protection in the marina and the maintenance and rehabilitation of existing facilities. Parking availability and public access would not be changed if the existing lease were renewed. The existing relationships with the neighbors would not change as a result of any contemplated action on our part. The facility consists of: 1. Large meeting hall (Great Hall) for members of the Legion, Auxiliary, Son's of the American Legion and American Legion Yacht Club, and many community groups, a list of which is attached as Appendix C 2. Stage, lighting, sound, and audio - visual facilities. 3. Board Room (Trophy Room) for small business meetings, board meetings, private parties, dinners and small luncheons. 4. Administrative Office Spaces 5. Storage space for chairs, tables, and equipment. 6. Dining Room, Bar and Cocktail Lounge. 7. Marina with 49 wet slips, side ties, and a guest dock sufficient to accommodate the U.S.C.G. Cutter. Point Stuart, boat hoist, lighting, water, Cable N, firefighting equipment, and a pump out station. 8. Dry storage for 47 trailorable boats. 9. Forty-two Dinghy racks. 10. Thirty-four personal property lockers 11. Shower and restroom facilities for slip renters. 12. Machine Shop for small equipment repairs. 13. Full Service commercial kitchen. 14.Walk -in cold storage 15. Small retail logo sales display cabinets 16. Reserved parking for slip renters and members. 17.Patio for bar -b -que grills, refrigeration units, tables, and chairs to accommodate up to 150 people. 18. Small beach for weddings, luaus, and children. 19.A small building (former one room schoolhouse) which is used by the yacht club, the Son's of the American Legion and various neighborhood groups from time to time to conduct meetings. 13 . Development Costs and Operating Pro Forma There are no estimated land or development costs under this proposal. The enclosed Pro Forma is based on existing historic figures and the conditions of the lease we have operated under for the past 24 years. Projections of revenue to be realized by the City of Newport Beach include services and usage by public entities in lieu of payment in cash where appropriate. The Great Hall, parking lot and marina will require in excess of $500,000.00 to remodel, repair and bring up to code requirements. Post 291 has the resources necessary to have this work performed. The financial statement reflects accurately revenues, expenses, and rent payments to the city. Post 291 is ready, willing, and able to pay the city an appropriate sum as determined by an appraisal of the facilities consistent with your City Council Policy on Income Property, F -7 and California Military and Veterans Code Section 1261. Absent a current appraisal, Post 291 can give no specific figures but will commence new rent payments upon acceptance of an approved appraisal by the city and Post 291. Our past record of payment to the city over a 50 -year period illustrates the ability of Post 291 to pay on a prompt basis. oImplementation Schedule If the existing lease is renewed in a timely fashion Post 291 does not contemplate any interruption in existing operations and there will be no interruption in the revenue stream. General Plan amendments, zoning changes, approval by the State Coastal Commission, Environmental Impact Reports, and very time consuming and emotional public hearings are not required. Building permits, which are administrative in nature, will be sought as soon as plans and engineering are completed and the lease is renewed. Consultant Team Post 291 has retained Wynn and Associates to assist in the process of renewing the existing lease. Additionally, a qualified and approved Real Estate Appraiser will be retained. Post 291 has retained no additional consultants or other experts for this transaction. 0 City Council Policy F -7 • City Council Policy F -7 appended to the Request for Proposal and entitled "Income Property" provides that whenever the City Council considers a new lease, factors other than monetary may be included. Section E (2) permits the City to consider a finding regarding the length of time for implementation of a plan. It states, "Redevelopment of the property would require excessive time, resources and costs which would outweigh other financial benefits.' In this regard, it is a given that redevelopment to another use may require General Plan, Zoning,, Environmental Impact Report, Costal Commission permits and approvals which could take months if not years to obtain. Section E (5) of Council Policy F -7 recognizes public or community benefits that would be provided by a proposed plan. It states, "The property provides an essential or unique service to the community that might not otherwise be provided were full market value of the property to be required." It is a matter of public record and common knowledge that The American Legion Newport Harbor Post 291 has a long and illustrious history of participation in civic affairs, community events, youth activities and has shared use of it's facilities as much or more than any other facility in the City. Community organizations that have used the Post 291 facilities are identified in Appendix C. Other Considerations Because the City of Newport Beach conducts a Youth Sailing program on the beach adjacent to Post 291, and because the American Legion Yacht Club also conducts a Youth Sailing program, it would be our privilege to entertain or co- develop a proposal for facilities necessary for the storage and operation of city assets related to this program. The needs of the two programs are identical in nature and such facilities could leverage value and economy for all concerned. Post 291 is interested in increasing the capacity of the existing marina to help meet the anticipated growth in recreational boating in Newport Harbor. Post 291 would agree to continue to manage and operate the marina as it has in the past if such expansion were to take place. • 10 • Military and Veterans Code E In support of our request for long -term renewal of our existing lease, we cite Sections 1260 through 1266 of the California Military and Veterans Code and incorporate them herein by reference. In addition, we cite GRIDLEY CAMP NO. 104 v. BOARD OF SUPERVISORS (BUTTE COUNTY) 98 Cal App. 585 Comment As stated previously in this response to the City's Request for Proposal, Post 291 would prefer to remain in its current location. However, if the City of Newport Beach finds it necessary to redevelop the area between 15"' and 18th Streets, Post 291 will cooperate with the city to the extent that the city will make Post 291 whole in consideration of any replacement property or facilities. It is the desire of The American Legion Newport Harbor Post 291, Inc., an organization that has served the needs of local disabled and hospitalized veterans for over 75 years, to work in concert with the City of Newport Beach in its efforts to create a more desirable community. -0- The American Legion Newport Harbor Post 291, Inc. Lease Renewal Committee Mr. Thomas R. Cooper Mr. Paul Curtis, Commander Mr. Earl Fusselman Mr. Henry Santo Mr. John V. Tarwater, Second Vice Commander 11 I m a x n - .. LEA_SE__, 0 THIS LEASE, made and entered into this /p *dam. day Of iy AM e N 1975, by and between the CITY OF NEWPORT BEACH, a chartered municipal corporation, hereinafter referred to as "Lessor ", and*NEWPORT HARBOR POST NO. 291 OF THE AMERICAN LEGION, a California corporation, hereinafter referred to as "Lessee ": - R E C I•T AL S: 1 A. Lessor holds title to certain harbor frontage and tidelands, together with certain uplands abutting thereon located •, at 15th Streetand West Hay, City of Newport Beach, County of Orange, State of California, hereinafter more particularly described. B. Lessee has constructed substantial improvements upon . the property consisting of certain buildings, boat anchorages, moorings, slips, docks, ramps, launching facilities, parking lot, and dry -•boat storage which Lessee presently operates and maintains pursuant to a lease•'between Lessor and Lessee dated •February 26, 1951. ' The term of the existing lease expires on January 31; 1976. Lessee • has requested Lessor.to,'extend the tdrm of the lease for an additional twenty -five (25) years.- - C. It is the judgment of the •City'Council of the City of y Newport Beach that the uplands cannot be used without the tidelands, _ nor can said tidelands be used, without the.uplands abutting thereon; and it is further the judgrant of Lessor that the leasing of the whole of said land^. hereinafter described as one parcel is necessary for the proper deielopment and use of said lands, water frontage and tidelands for recreational, public, civic, beaches, commerce, navigation and fishery purposes.. is ti:e judgment. of the City Counc.A. of the City of Neuyort'Beach that the ieusing of said lands kO i..Fea =.sei, upon the conditions in this agreement specified, ls'•rot inconsistent with i i .the trust imposed upon 'such portion of the lands hereinafter described, which may constitute tidelands, and it is further the y Judgment of the City Council of the City bf Newport Beach that the leasing of said uplands as hereinafter described upon the th conditions In is agreement specified, is for a public purpose and does not violatetheConstitution of the State of California and is permis- sible under State law. E. Lessor proposes to lease to Lessee the premises described hereinafter, and Lessee is will to accept said lease on .the terms and conditions hereinafter set forth. This lease does not violate Section 1402 of the Newport Beach City Charter in that this lease constitutes a releasing of ,property••under lease at the effective date of said Charter. NOW, THEREFORE, IN CONSIDERATION OF THE FOREGOING RECITALS AND THE MUTUAL COVENANTS set forth below, Lessor and Lessee hereby agree as follows: I• DESCRIPTION OF LEASED PREMISES Lessor hereby leases, and Lessee does hereby.accept a lease of the property, buildings and related parking and boat facilities located at 15th Street and West Bay, as more ,particularly described in Exhibit "A ", which is attached hereto and made a part .herein by this reference. II. TERM In order to comply with Section 420 of the Newport Beach City Charter which restricts the leasing of property for a period of more than twenty -five (25) years without prior voter approval, the existing lease between Lessor and Lessee dated February 26,.1951, may be extended for a period of twenty -four (24) years and two (2) months, which would constitute a total period of twenty -five .(25) Years from the expiration date of the existing lease, to wit, January 31, 1976. The term of this lease will commence on March 1S, 1975, and expire on March 15,2000. - _ i• III. USE - Lessee shall use the demised premises, together with the bO,ildings, parking and boat and marine facilities located thereon -2- ' for the purposes of managing, operating and conducting the activi- ties of the American Legion. In and as a part of its duties in managing and operating said American Legion Post, Lessee shall not discriminate as to race, color, creed or the civil rights and liberties of individuals subject to the normal rules and operating procedures of the American Legion. Lessor retains the right to locate an Acquatic Center in the area formerly used by the Newport.Harbor Lawn Bowling Association, as more accurately depicted on Exhibit "B "attached hereto and made a part herein by this reference. Lessee covenants and agrees to permit Lessor to use its.boat launching facilities in connection with said I ,. Acquatic Center. IV. USE AS A COMMUNITY CENTER BY OTHER ORGANIZATIONS . When the demised premises and buildings are not in use by the Lessee, the premises and buildings shall be available for the use as a community; center and recreation instruction facility by the City Parks, Peaches and Recreation Department on a first- priority basis, and.by local organized community, civic related organizations in accordance with reasonable rules, regulations,` fees and scheduling to be established by Lessee with the approval of the City Manager. - - V. TYPE OF BUSINESS ACTIVITY Lessee shall not grant any concession, license, permit or privilege for the conduct of any business or other operation for profit or alter the use or type of service on the demised premises without the prior approval of the City Manager. VII.'"a TAXES AND UTILITIES - Lessee shall promptly pay for all utility services J. 1urnished to it and shall pay before delinquent any general and special taxes or assessments or other governmental charges, if - i any, which may be levied on the demised premises or furnishings therein, or improvements thereon, or any possessory interest therein arising out of or based upon the leasehold interest throughout the I term hereof, or may be imposed upon Lessee as a result of its operations under the lease. Satisfactory evidence of such payments shall be delivered to Lessor upon demand therefor. • VIII. MAINTENANCE OF LANDSCAPING AND IMPROVEMENTS Lessee covenants and agrees that during the term of this lease it will, at its own cost and expense, maintain.the grounds, landscaping, and all buildings,.and any other improve- ' ments of any kind in existence or nature constructed or installed. - on'the demised premises by the Lessee, at a high standard of maintenance and repair. Maintenance shall include painting of.all buildings and boat facilities.., If in the judgment of the Lessor, such standards of maintenance and.repair•are not being maintained, Lessor may at its option, after written notice thereof to the Lessee and Lessee's failure to commence in good faith to remedy the 'same within the time herein provided and thereafter diligently prosecute -the same to completion, elect to correct any deficiency, whether it be in reference to grounds, landscaping, buildings or improvements. Lessee covenants and agrees to pay to the Lessor on demand any and all sums expended by it in correcting any•such deficiency. If, in the judgment of the •.Lessor; the disrepair 'or . .lack of maintenance constitutes an emergency, the notice herein 0 E IX. „INSURANCE - HOLD HARMLESS S?a Lessee shall save and keep Lessor, its officers, agents and employees free and harmless from any and all claims or demands of any name or nature whatsoever arising out of, or incident to, the use and occupancy of the premises herein described by Lessee. In partial performance of this obligation by Lessee, Lessee shall procure and at all times during the term of this Lease maintain in full force and effect a policy, or policies, of public liability and property damage insurance protecting the City of Newport Beach, its officers, agents and employees from all claims or demands for damages. The policy, or policies,. shall provide for not less than Two Hundred Thousand Dollars ($200,000.00) for injury or death of one person; Five Hundred Thousand Dollars ($500,000.00) for injury or death of two or more persons; and Fifty Thousand Dollars ($50,000.00) for damages to property. The City Manager may require an increase in the amount of insurance from time to time in accordance with changes in economic conditions. Attached to said policy shall be an endorsement which shall provide as.follows: "Within the limits set forth in this policy, . to indemnify and save the Cityof Newport Beach, its officers, agents and employees, free and harmless from all damage, claim; loss or liability of any name or nature whatsoever which the City Of Newport Beach, its Officers, agents or employees may hereafter sustain or incur; or maybe' imposed upon them, arising out of, or in any way connected with,..the use or.occupancy by the insured, its servants, agents and employees, of the premises described in a lease granted to insured by the City of Newport Beach." .. Lessee shall furnish, and maintain with the Lessor, either the original policy, or policies, or a certified copy, or copies, thereof. The policy, or policies, shall be approved as to sufficiency by the City'Manager and as to form by the'City Attorney. X.. LESSOR'S RIGHT OF'INSPECTION Lessor reserves the.right by its authorized agents, em=ployees or representatives to 'enter.t:he leased premises to inspect �- the same or a ny part thereof at any time and to attend to or protect the Lessor's interest under this lease. .XI. COMPLIANCE WITH LAWS Lessee covenants and agrees to comply with all rules, regulations, statutes, ordinances and laws of the State of California, County of Orange, the City of NewportHeach or any other governmental body or agency having lawful jursidiction over the leased premises or the business, enterprises or activities conducted thereon. XII. ASSIGNMENT Except as provided in paragraph IV hereinabove, Lessee shall not assign, transfer, sublease or give any grant of control of this lease or demised premses, or any part thereof, either voluntarily or involuntarily, unless first approved by the City Council. -- XIII. NON-COMPLIANCE- If the Lessee fails to comply with any of the terms and conditions of this Lease,.the Lessor.may give'to the Lessee a notice in writing of such failure and specify therein the particu- lars in which Lessee has.failed.to comply with the provisions of this Lease. If the Lessee fails for a period of thirty (30) days after'the giving of such,notice.to comply .,with the provisions of e this Lease, the Lessor may; at-its option, :terminate this.Lease, and all rights'of'the Lessee.therein shall cease and terminate and the Lessee shall immediately thereafter deliver possession of the premises to the Lessor. XIV. SURRENDER OF PREMISES UPON EXPIRATION OR TERMINATION: .. , Upon the expiration of.the term of this lease or sooner termination thereof as herein provided, Lessee shall deliver possession of said demised premises to Lessor in-the'same condition as delivered to Lessee, reasonable wear and tear excepted, and ^also excepting any changes or alterations authorized or approved in writing by the City Manager or City Council. - -'Upon the expiration kor termination of.this lease, any additions or improvements made .1 i • • r 1 L� upon the•demi*ea premises shall become the property of the Lessor. XV. DEFAULT AND TERMINATION OF LEASE A. Default Time and each of the terms, covenants and conditions hereof are expressly made the essence of this Lease. If the Lessee shall fail to comply with any of the terms, covenants, or conditions of this Lease, including the payment of rental herein reserved, at the time and in the amount herein - require&, and shall fail to remedy such default within thirty (30) days after service of a written notice from Lessor so to do if the default may be cured by the'payment of money, or to commence in good faith to remedy any other default within thirty. (30) days and thereafter diligently prosecute the same to completion, or if Lessee shall abandon or vacate the leased premises, Lessor may, at its option, and without further notice or demand, terminate this Lease and enter upon the leased premises and take possession thereof, and-remove any and all persons therefrom with or without Process of law. 'B Surrender of Possession Upon Termination Lessee covenants and agrees that upon the expiration or sooner termination of this Lease, the Lessee will peaceably surrender the 19,ased premises with all buildings and improvements, in the same condition as when received orconstructed, reasonable use and wear thereof, and damage by..fire, Acct of God, or by the elements excepted. Lessee expressly waives any right which it may have to relocation assistance or costs in vacating the demised premises. Any improvements built, constructed or a placed upon the leased premises by the Lessee, or anyone holding by, under, or through it, shall remain on the leased premises and become the property of the Lessor without any cost to Lessor upon " ihe. termination of this Lease, whether by lapse of time or by reason of default. ;. C. Remedies Cumulative 9 ,,4 The rights, powers, elections and remedies of ? the Lessor contained in this Lease shall be construed as cumulative and no one of them shall be considered exclusive of the other or • exclusive of any rights or remedies allowed by law, and the i exercise of one or more rights, powers, elections or remedies, shall i not impair or be deemed a waiver of Lessor's right to exercise any other. D. No Waiver No delay or omission of the Lessor to exercise any right or power arising from any omission, neglect or default of the Lessee shall impair any such right or power or shall be Construed as a waiver of any such omission, neglect or default on the part of the Lessee or any acquiescence therein. No waiver of any breach of any of the terms, covenants, agreements, restrictions or conditions of this lease shall be construed as a waiver of any succeeding breach'of the same or of any of the terms, covenants, agreements, restrictions or conditions of this lease. E. •. Holding Over - 7t is mutually agreed that if the Lessee shall hold over after the expiration of this lease for any cause, such uholding over shall be deemed a tenancy from month to month only, pon the same terms, conditions' and provisions of this lease. SVI. NOTICES . 'It is mutually agreed that any notice or notices provided for by this lease or by law, to be given or served upon the Lessee, may be given or served by mail, registered or certified, with Postage prepaid,and.if intended for the City of Newport Beach, addressed to the City Manager, Newport Beach, California 92660,• or at such other address as may be hereafter furnished to the Lessee in writing, and if intended for the Lessee, addressed to its Director at 211'15th Street, New Beach, California, 92660 or at such )ther.address as may be hereafter furnished to the Lessor in writing; 0 'r • L J or it may be waved personally upon any corporate officer of Lessee or person charged with general management responsibilities in connection with the leased premises; and that any notice or notices provided by this lease or by law to be served.upon Lessor may be served personally upon the Mayor of the City of Newport Beach or the City Clerk of said City. Such service shall be deemed complete at the expiration of forty -eight (48) hours from and after the deposit in the United States mail of such notice, demand or communication. XVII. RECORDS AND ACCOUNTS A. Bookkeeping Lessee covenants and agrees that it will, at all times during the term of this lease, keep or cause to be kept true and complete books, records and accounts of all financial . transactions in the operation of all businesses, concessions, services and activities of whatever nature conducted on or from the demised premises." B., Inspection of Records All books, records and accounts of every kind and nature kept by Lessee, its agents or employees relating to the operation of any business, concession, service or activity conducted on or from the demised, premises shall; at all reasonable times, be, open and made available for inspection or audits by the Lessor, its w agents or employees, .upon request: .. ' C. Audit ... Lessee covenants and agrees to furnish to Lessor annually, a non - certified statement showing the annual gross income derived from the marina slips, the dry-boat storage facilities, the parking .lot, and any other . business activity con- ducted on the demised premises, and the disbursement of said annual gross income. Said statement shall be furnished to Lessor within thirty (30) days following the completion of Lessee's fiscal year. The cost of said audit shall be borne by Lessee.. XVIII. RENTAL . " A. Building Facilities Lessee covenants and a•rees to . 4 pay 'to Lessor a minimum rental for the use and occupancy of the building facili- • ties located on the leased premises in the sum of Three Hundred { Dollars ($300.00) per month, payable on the first day of each month commencing with the effective date of this lease. B. Parking Lot Lessee covenants and agrees to pay-to Lessor one hundred percent (1008) of the revenues derived from the parking lot, payable monthly. Lessee shall purchase._ a. minimum of twenty -six (26) parking spaces at a fee consistent with City parking lot charges. It is further agreed that thirty -six (36) parking stalls shall be made available for use.at no cost to Lessee or by those persons renting•a boat slip from.Lessee. C. Marina Slips Lessee covenants and agrees to pay to Lessor the sum of forty percent (408) of the gross revenues received from the marina slips, payable monthly. If it is mutually determined by the parties hereto that additional•boat slips are required, . Lessee will finance their construction with the additional revenue derived from the rents being,used.to retire' -the debt incurred for the costs of the new slip construction. Upon payment•of the entire debt incurred for•the costs of new slip construction, . Lessee shall pay to Lessor the sum of.forty percent (408) of the gross revenues derived from the new marina slips. . D. Dry Boat Storage t Lessee covenants and agrees to pay to Lessor' the sum of fity percent,(508) of the revenues received from the dry boat storage facilities and lockers, payable monthly. If it . is determined by the parties hereto that additional dry boat storage and locker facilities are required, Lessee will finance their'con- struction with the additional revenue derived from the rents being used _to retire the debt incurred for the new,dry boat storage and locker 1 facilities. Upon payment of the entire debt incurred for the cost •of the new dry boat storage and locker facilities, Lessee shall pay to Lessor the sum of fiftypercent (50%) of the gross revenues derived from the new dry boat storage and locker facilities. i XIX. RENEGOTIATION OF RENTS If either party deems it necessary at the end of the yearly audit, all rental rates may be renegotiated and adjusted by mutual agreement of both parties:' • XX..- MISCELLANEOUS. .. A. Inurement -- Each and all of the covenants, conditions and • agreements herein contained shall, in accordance with the context, inure to the benefit of Lessor and apply to and bind Lessee, its . respective heirs, legatees, devisees,'executors; administrators, successors, assigns, licensees, permittees, or any person who may come into possession or occupancy�of said premises.or any part. thereof in any manner whatsoever:. Nothing in this paragraph shall. . in.any way alter the provisions herein'bontained against assignment . or subletting.or the granting of licenses or concessions. B. Captions The captions of paragraphs and subparagraphs of this Leaseare for convenience only and do not in any way limit • or amplify the terms and provisions hereof. IN WITNESS WHEREOF, the parties hereto have executed this Lease as of the day and year first above written. APPROVED AS To CITY OF NEWPORT BEACH a municipal-corporation BY:�saC yor • A parcel of land situated in the City of Newport Beach, California, being a portion of Lot 4, Section 33, To- vnship6 South, Range 10 West, S.B.B. & M., a portion of Lot 4, Section 34; Township 6 South, Range 10 West, S.B.B. & M., and certain filled tidelands described as follows, to wit: Beginning at a point "in the northerly prolongation of the Westerly line 15th of Street, as said 15th Street is laid out and shown upon a map of Tract No. 234, recorded in Book 13, pages 36 and 37, Miscellaneous Maps, Records of Orange County, California, said point of beginning being 160 feet northerly from the northeasterly corner of Lot 4, Block 115 of said Tract No.:234; running thence North 9" 43' 30"-East along the Northerly prolongation of the Westerly Line of said 15th Street, a distance of 109.79 feet to an intersection with the United States Government Bulkhead line between Station No. 118 and Station No. 119, as said bulkhead line is shown upon a map entitled "Harbor Lines - Newport Bay, Newport Harbor, California ", . approved May 2nd, 1936, by the Secretary of War and on file in the office of the U. S. " District Engineer, 751 South Figueroa Street, Los Angeles, California; thence westerly along said bulkhead line a distance of ^349.9 feet to an intersection with the northerly prolonga- tion of the easterly line of Lot 13, Block 115 of said Tract No. 234; thence south 90 43' 30" West along the said northerly prolongation of the Easterly line of Lot 13, a distance ' of 249.79 feet to an intersection with a line 20 feet northerly of and parallel with the northerly line of said Block 115; thence south 800 16' 30" East along the said line 20 feet northerly of and parallel with the northerly line of Block 115, a distance of 203.9 feet; thence North 90.43' 30" East,a distance of 140 feet; thence . south 80° 16' 30" East, a distance ' of 146 feet to the point of beginning. RESERVYNG -for street purposes a.strip of land 50 ' feet in width, lying 25 feet on each side of the following described center line: eiig the easterlyglinenofaLot 13, nBlockt115 ,lo h of as shownponlanmaplof Tract No. 234, recorded in Book 13, 36 pages and 37, Miscellaneous Maps, Records of Orange County, California, said begin- point of , ning being 135 feet northerly of the northeasterly corner of said Lot 13; running thence south 80" 16' 30 "East along'a line • "parallel to the northerly line of said Block 115, a distance of 203.9 feet to a is point which 146 feet westerly of. the westerly ' line of 15th Street. ..' - BXBIBIT "A ". .. . i n CiCL x W 0 e s acc s m I \ 1 PN. LEG I01 MMMMMIMMML- f �o 0 a x n • Appendix C Community Service Events (Waived or Reduced Facility Fees) Alcoholics Anonymous — Small Group Meetings American Flag Retirement Ceremonies American Legion Auxiliary — Girl's State Competition American Legion Boy's State Foundation — Boy's State Competition American Red Cross — Blood Drive Americanism Essay Contest — Awards Dinners "Anonymous Anonymous" — Charitable Benefit Balboa Power Squadron — Navigational Classes Balboa Ski Club — Membership Meetings (3x per year) Bob Henry - Scholarship Benefit Boy Scouts of Orange County - Dinner BPPAC Meetings Cal Vet — Regional Meetings California Republican Hispanic Committee - Dinner California Secretary of State — Polling Place (Elections) Central Newport Beach Homeowner's Association — Meetings Children's Easter Egg Hunt (Neighborhood) . City of Brea — Police Department Meeting City of Newport Beach — Employees League Meetings City of Newport Beach — Fire Department Retirement Banquets City of Newport Beach — Planning Committee Meetings City of Newport Beach — Police Department Retirement Banquets City of Newport Beach — Police Department Youth Football Banquet City of Newport Beach — Police Explorers Dinner Congress of the United States — Congressman Rohrbacher's Consultation Visit Congressional Medal of Honor Day — Commemoration and Banquet Costa Mesa High School — Band Awards Banquet _ County of Orange District Attorney Investigators — Retirement Banquets County of Orange District Attorney's Office — Retirement Banquets County of Orange Harbor Department — Retirement Banquets County of Orange Harbor Department — Volunteer's Dinner County of Orange Probation Department (Juvenile Hall) - Banquets Daughters of the American Revolution - Annual Awards Banquet Estancia High School — Football Awards Banquets Freedom Foundation - Luncheons Friday Anglers Club — Luncheons (monthly) Girls Junior Jamboree (4 days) Girl Scouts of Orange County — Father /Daughter Dinner Dance High School Oratorical Contests • International Order of the Blue Gavel — Association Benefit Banquets Knights of Columbus - Banquet Law and Order Awards Banquets 12 Leadership for Tomorrow— Full Day Activities • Los Angeles Scots Bagpipers — Rehearsals Marina Park Homeowner's Association — Meetings Memorial Day Services (Community) Memorial Services National Child Welfare — Annual Benefit Banquet/Dance National Lifeguard Association - Meetings Newport Beach Alliance Committee - Meetings Newport Beach Historical Society - Dinner Newport Beach Lifeguards Association - Meetings Newport Harbor High School — Baseball Team Fund Raiser Newport Harbor High School — Football Team Awards Banquets Newport Harbor High School — Girl's Volleyball Awards Banquet Newport Harbor High School - Soccer Team Awards Banquets Newport Mesa Unified School District - Retirement Banquets OCC DMS Department— Graduation Dinner Newport Mooring Owner's Association - Meetings Old Glory Character Boat Parade — Host Site Philippine POW Camp Survivors - Reunion Luncheon & Dinner PHRF Mid - Winter Race Committee - Meetings and Races Polynesian Dance Troupe —Youth Rehearsals Saddleback College — Law Enforcement Seminars Santiago High School — Golf Tournament Award Banquets . St. James Episcopal Church - Annual Business Meetings Soroptimist International - Dinner The Trojan Guild — Meetings U.S.C.G. Cutter Point Stuart — Change of Command Ceremonies U.S.S. Windham Bay (CVE 92) — World War II Reunion VA Hospital Long Beach —Veteran's Luncheons and Bingo (bi- monthly) Women's Ocean Racing Sailing Association — Sail for the Blind YMCA - Annual support Campaign (5 nights per year) • 13 0 • r Report of American Legion Post 291 Tidelands Lease (Substantiated by Documents) v Introduction .Y' - On January 28, 1924, Newport Harbor Post No. 291 of The.American Legion was chartered by the National organization of The American Legion which is chartered by the Congress of The United States of America. In April 1924,- American Legion Post 291 was incorporated under the laws of the State of California in order to enter into leases and other contracts. History September 8, 1924: The American Legion leased land, between 9th and 10th Streets at Bay Avenue, from the City. of Newport Beach for 25 years. (See. item 1, page. 4,: ) - September 11, 1924 (3 days later): The City of Newport Beach sold to The American Legion a parcel of approximately six (6) lots, adjoining the leased property, for the sum of $1500.00. (See page 5 and item 2, page 4 ) November 1930: The City of Newport Beach wished to extend Bay Avenue from Ninth Street to 15th Street, creating the El Bayo Tract, taking a portion of the Legion property for Bay :Avenue and separating their leased portion from the portion they owned. . p _ �• April 20, 1936: A new lease was granted to the American Legion for a site on the North side of Bay Avenue. September 2, 1940: The 1936 lease was cancelled by mutual agreement and a new lease was granted for a permanent "home" on 15th Street. The Ame .rican Legion moved two small buildings, which they had built, from the 10th Street site to the 15th Street site and used them until the present civic and American Legion hall was constructed. October-1:949:- Ground- breaking ceremonies were.-held and :- cons:truction.was._,,..,.:. begun on the present hall. The materials for construction were paid for by the sale of the Legion property at 10th and Bay; the labor, for the most part, was donated by mem- bers and friends of The American Legion. The hall and facilities separated the Tent City that occupied the site of the present Marina Trailer Park from the El Bayo Tract of fine homes that fronted the bay on Bay Avenue from 15th to 10th Street. February, 1951: The lease on the 15th Street property was renewed until January 31, 1976. • July 1958: Phase 1 of construction of the bulkheads and marina was started, :! under agreement with the City of Newport Beach, with Trautwein Brothers of Newport Beach doing the construction and financing which the American Legion repaid on the installment plan over a period of ten years. Phase 2, construction of toilet facilities, paving of the parking lot and the addition of more slips was executed by The American Legion. July 1968: The American Legion made final payment to Trautwein Brothers and started paying, to the City of Newport Beach, 107o of the gross revenue from the marina docks as per agreement. May 30, 1969: During the 50th Anniversary of The American Legion, the main hall was dedicated as a Veterans Memorial Building in honor of "All Those Who Fought For Freedom ". 1973: The Lawn Bowling green. on City Fee Property will be vacated. The American Legion would like to explore the possibility of leasing that parcel. for conversion to a Legion parking lot, allowing additional dry storage on the present parking lot for approximately 50 boats, at a monthly income. of approximately $1, 000. 00 which could be paid to the City of Newport Beach . to offset some of the loss of income from the Marina Trailer Park of Special Note 1. The American Legion has: been wholly responsible.,. financially and physi tally, for all developments and improvements on the subject lease land and had the foresight, 15 years ago, to construct a marina in the best interest of The Tidelands Act. The marina consumes approximately 60176 of the leased area. (Cost of construction of marina, toilet and shower facilities, parking ,. and dry boat - storage area and boat hoist was $74, 049. 40 -- not to mention costs of the other buildings and improvements.) 2. Also, in keeping with The Tidelands Act, all of the facilities are used, not only by Legionnaires, but by many people of the City of Newport Beach and a number of inland cities - -- approximating a 50 17o, controlled public use. (Refer to pages 7, 8a,� 41 —i -6:�) 3. Use of subject Tidelands is in keeping with the density trend on the penin- sula. 4. The American Legion pays to the County..of Orange -all unsecured property . taxes ($6; 365. 41 in 1972), to the City of Newport Beach l0% of the gross ...... revenue from the docks ($3, 678. 70 in 1972), all repairs, maintenance, in- surance, etc. A City boat is moored in the marina at no charge to the City. 5. The American Legion Post 291, Incorporated has the ability, personnel, location and community spirit to assist the City in development of the Marina Trailer Park site into some form of public marine activity as outlined in the Tidelands Act. . 6. Development of tidelands as executed by The American Legion is what Tideland leases are all about -- no expense to the City or State. The State of California has spent billions of dollars constructing harbors and marinas and then leased them to private operators, e. g. Dana Point. y / 3 7. The American Legion has rendered a service to the Community, State and Nation; is grateful for the opportunity to be of service and desires to continue serving the public. Summary The economic facts are that: The American Legion did cancel a lease with the City and did quit claim a portion of Legion Fee property to allow Bay Avenue development. The American Legion did sell the Fee property and move to 15th Street as their permanent "home" as indicated by attached letters from former Mayors, Councilmen, City Managers, etc.; and did use the moneys from the sale to improve the 15th Street lease land. The American Legion did have the foresight to develop the marina. No one would consider removing the Marina facility or hall for some other use. Someone has to operate this facility and The American Legion has proved their ability to do so. The American Legion wants to continue to operate the facility in cooperation • with the City. Yours truly, Donald R. Donaldson Chairman of The American Legion Corporate Board E I CITY OF COSTA iiCESF1 CALIFORNIA 92626 P.O. BOX 1200 1S� ,dy FROM THE OFFICE OF THE CITY CLERK January 22, 1908 Honorable City Council C.TTY OF M7,0PORT B7ACH Newport Beach, California Dear I"adan and Gentlemen: T was City Clerk of the City of Newport Beach at the time the lease to Newport Harbor Post '291 of the American Legion, covering the tidelands property at 15th and Bay Streets, was extended. :s I recall, it was the desire of the City Council at that time to extend the previous lease in such a manner that the Legion would have a permanent location for a Le ;ion and Civic Fall at that location. This was carrying out the wishes of previous City Councils. It would be in accordance with the long - expressed desire of the City Councils of the City of Newport Beach to extend this lease. Yours very truly, C. K. Priest • r 1 it aorry J. sall.olrs 213 WEST t•ALU AVENUE EL SEGUNDO. CALIFORNIA /'<'1.18!U: u: Li•. Clt, CIA �.;.-U a,l(.L. 6. i l:uVl' %UlJ /. a: %!� �: ,.'i V'. /•. /i.i ,'I //UI:' V<'1' / /,Nf,•]� i,ll. 41111 X11. "',Vii.i. //. r.l(i'Uii /'I r:)�1 , yf/ (% .:i'ii' /1 /I /l••( /. /l: i.A `!I 4!(. ✓d. .i.1 !:/-! .i.ac ��L.,� i_utr/ /i•.i .L,/ ru.';a.ia /t .,lrt,o aru�,�,u. ;;;�i.ult u'.iail. u. ilia /ccru:r /a:.i:ot.:.tiurt ;,/(rn•i�,i�::� 'M ?tJ. udulr.:11ri. A.0 Ghl( /it., Ue -1.. /1 ucco /t�nce Il!i_U. Vie • - /I otu/cG C u.' Ac l"O ' ���[ �„ :.ir: U,'.IrUL .�A C!.Ce Y'!!ii .ULC.O r /.j.J ;.VAS. (Retyped for easier reading) January 31, 1968 Honorable City Council City of Newport Beach Newport Beach, California Dear Madam and Gentlemen. I was City Manager of the city of Newport Beach when the lease was extended covering the property now occupied by the Newport Harbor Post #291 of the American Legion. /7 C 0 It is my recollection that it was the intent of the City Council to furnish this organization with a permanent location providing they furnished the money for the building. . my opinion it would be in accordance with the intent of the City Council of Xewport Beach to extend this lease as requested by your local post. Yours very truly, Jnhn -T Qailn -g /.j.J ;.VAS. (Retyped for easier reading) January 31, 1968 Honorable City Council City of Newport Beach Newport Beach, California Dear Madam and Gentlemen. I was City Manager of the city of Newport Beach when the lease was extended covering the property now occupied by the Newport Harbor Post #291 of the American Legion. /7 C 0 It is my recollection that it was the intent of the City Council to furnish this organization with a permanent location providing they furnished the money for the building. . my opinion it would be in accordance with the intent of the City Council of Xewport Beach to extend this lease as requested by your local post. Yours very truly, Jnhn -T Qailn -g I c t' i i. fI. L. IS ©ELL, ri"nnrf,x i i /R1//1✓':.9AP .vl i ✓sue ^R'`�i/ G' I j( . "EVERYTHING FOR THE PLASTERER" 3104 WL5T NrAO�Qt BLVD. NEWPORT BEACH. CALIFORNIA October 12, 1967 City Crunch Newport Beach, California i Z�ear Madam and Gentleman: S I the undersigned who wax Mayor of the City of Newport Beach and signer of.the last lease to the Newport Harbor Yost #291, of •. the. American Legion on the tid,•landa property located at 15th and Bay Streets, would like to make the following statement. • This ;easy was passed; extending the previous lease to the Legion carrying out committrnecnts of the City of Newport Brach; that this property was being leased to the Legion for a permanent o. at:un for a: Legion: and Civic. Hali. -- 1 would like to see the City Coi,ncil extend this lease per the requ,•st of the members of the Newport Harbor post 0291 of the American Legion. LI:lf Yourf, trully, / hi P L. Isbell A January 26, 1968 Honorable City Council City of Newport Beach Newport Beach, California Dear Madam and Gentlemen: I the undersigned, was on the City Council and present at the ground breaking ceremonies on,October 13th, 1949 at the start of the American Legion and Civic Hall Building. . The City Council at that time deemed this tideland property would be set aside for a Veteran Hall for World War I and World War Il and for the use of all future veterans of all wars. I think the present City Council should extend this lease because it would be carrying out a moral obligation of the pre- vious City Council,. Yours truly, O. Z./Robertson i, i Y :S YOUTH EMPLOYMENT SERVICE OF THE HARBOR AREA • 642 -0474 � LOCATED IN THE BOYS CLUB • $84 CENTER STREET, COSTA MESA, CALIFORNIA March 1, 1973 American Legion Hall 215 15th Street Newport Beach, California 92660 l Dear Sirs: The Board of Directors of the Youth Employment Service are very grateful for your -.participation in our first '.A Roman Feast" benefit. The facilities at the American Legion Hall were ideal and everyone we had contact with there were so lt�blpful, • Our volunteer chef,`Mr. :Lew.Yantorn of +the Boys Club enjoyed the conveniences in your kitchen, Y.R.S. is a non - profit organization that provides free employment serice for youth and seeks employers who want to help young people. We can become a better service to the community when organizations like the American Legion give us such fine support. "Help Youth Help Themselves" Very sincerely, Mrs. Edward H. Kelly Recording Secretary PRESIDENT SECRETARY-TREASURER NEWPORT HARBOR LAWN BOWLING CLUB GREENS AT 15TH STREET NEWPORT BEACH. CALIF. 92660 March 3, 1973 American Legion Post No. 291 15th and Bay Streets Newport Beach, California 92660 Gentlemen: The following resolution was adopted at a meeting of the Board of Directors of the Newport Harbor Lawn Bowling Club on January., third, 1973: Resolved: That the T,'_embers of the Newport Harbor Lawn Bowling Club extend _ to the Officers,.and- through them to the. Members of the American.Legion Post #291 our sincere gratitude for the wonderful . cooperation over the ,past many years. between both organizations. We appreciate the kindness and hospitality shown by your employees, who have been so helpful to us. -. The use of the parking lot has served us as a tremendous help to all our Members and guests, as well as the Club House. It was regularly moved, seconded, and was unanimously - carried that this resolution_be,;,.._,,...., made a part of the minutes of the hieeting, and a copy be forwarded to the American Legion Post No. 291, Newport Beach, California. Yours very truly, S J. yn ecre ary • • 0 0 First American Title Insurance c& Trust Company 421 NORTH MAIN STREET SANTA ANA.CALIFORNIA • KIMBERLY 7 -7371 ROY V. SHAFER Senior Vice F eskknt and Chief Coa,Mel I March 19, 1968 Mr. Harry"Estus 610 Tustin Avenue Newport Beach, California 92660 Dear Mr.. Estus: In re American Legion Lease A portion of the property involved is owned in fee by the City . of Newport Beach,...it.having acquired title from Pacific Electric Land Company.by deed recorded September 22, 1919. The remaining portion of the land is held by- the City. in trust under the Legislative Grant from the State which was effec- tive July 25, 1919• That is to say, the land consists of upland together with abutting tideland. From a title standpoint I can see no objection to the City executing a new lease provided its term does not exceed 50 years and that the consideration therefor is deemed adequate by .the City. Council.::._ ... I see no point in my company making a search of title and thereby incurring expense to the Legion Post as the City has owned the pro rtl for over 48 years. Sy V.hafer Senior ��� ice President and Chief Counsel RVS:amm i ...s n 4 First American Title Insurance & Trust Compeny 421 NORTH MAIN STREET SANTA ANA, CALIFORNIA 547-G992 11,,ViMR,FOsT IQ. 291 OF ThIT A E'RTCAN LEGION `%, :'q?. HARRY ESTUS 610 `PJ6TIN Almm MEVTORT B °_,CH, CtLIFORNI.t 92660 _ Your No" I Our Order No.. OR 105 (�xttl� The following is a report of the title to the land described in your application for a Policy of Title Insurance Ind is made I without liability and without obligation to issue such policy. In addition to any exceptions shown herein, a 1d not cleared, the policy, if issued, will contain conditions and stipulations and also exceptions from its coverage as may be embodied by the particular form of policy issued. Dated as of March '19, 3968 at 7:30 a.m. -- - TITLE OFFICER •' . Ed Brouillard _ VESTEE..' CITT -OF I?TE"WTORT B 1CH, "a Municiml',Corporation. {The Trusts for the uses and purposes aril u?on'the eaprass ccn.it-ions a3 . provids¢"in a'An °;PActGrantin.g' certain tidelands:-and sutlsergeo. lcnds ofs.,th 4 State of C�'liforni to. the City of Nescort Beach upon certain trusts e.d conditions, "-- 3nproved M'j 25, 1919 as arner_deri'by "tin .Act relattrr? to the ' Grantin�`of Franchises u_con, an3 leases ef, certain tidelands heretofore... granted to the .City of NeTmort Beach by the State of California," approved ,j;,y:,eq,.. :1929 :an? the rights. reserved Mersin to the people of tie State of Californian and the :trusts for the uses and purposes and upon the express "conditions ns.prgvid.ed dm'. "P.n'-Act granting certain tidelar_i�,:ar:r'aabrera,Pd ,, lands _of the 'St>ite of Californ'iu to the Cit,• c: ,7e.roort Fe4Clt a , n certain trusts` and conditions," approved April 5, 1927 as amended by "An Pict relating to the.: granting of franchises upor-, and leac.es of certain tidelands heretofoe (warted the,City,of I`.es.7ort.Beach by the St to of Cal`_forutv.," approved .to Af2.y,'29, _192Q and the'rigzts reserved therein to the - people of the 5{:3 of Gal's forma s. Said Trusts affect that :pkortion of s._id land thereof which lies Portherly i o�..the Northerly line.o£ Lot 4 of Section 33,' i'o:mship c Sou.h, Ranae:l0 ' Test `S. '.B." D., ti. accord- g to Governr,;:nt Sarvey. (continued) All that certain 1%r_n City of Newport Teach, situated in the State of California, County of Orange, described as follows:'.. :YArk'&fice3 o ;3and _situated in "the,:City 4f Newport Eeaeh, Californian .:b�In�> :: tF iar, EL portion of Lot 4, Section 33, Tovnship'.6= South�'.Range l0 LJest, S.:B Br M., a portion of Lot 4, Section 34, Township 6 South, R_nge 10 Nest, S B.. B. & M., and certain 'filled tidelands described as follows: . Beginning at a point in.the Northerly'prolon�,tion of.the Westerly line of 15th Street, as said 15th Street is laid out and sho.m upon a :nap 'of Tract No. 214) recorded in book 13, pages 36 and 37, Miscellaneous Maps records of Orange County,. California) said point of beginning being 160 feet North- erly from the Northeasterly corner of Lot 4.. Block 115 of^said Tract No. ' 234; runn�n.g thence .North 90 43' 30 ".East.along the Northerly prolongation of the Westerly line of said 15th Street a distance of 109.79 feet to an intersect ion wit he United States Government Bulkhea ire a weer tion I. o. 118 an d Station 11 9, �s.sa id bulkhead line is .hon upon a m. entitled tl_ d Harbor Lines - NewFart Bey, -Net.port Iivroor, California, ^pproved I•.xy 2, 1936, by the Secretary of.War and on file.in the office,.of the U. S. District 93 Y , Engineer; 7 5 t South Figueroa Str ee t , Los Angeles) California; lifornia; thence Westerly ...I., ` along said bulkhead line a distance of ;49,q,,,�t.ette -sari'"ifitersection with r P • the Northerly rl prolongation or the .�. -sterl line o£ Lot 1 Bloom:; 11 of he Ye � _ 5 Y P € Y 3, said Tract No.. 234; thence South 90 43' 33" West along the said Northerly � _ o ,prolon�.tion.of the..,,st_ily line of Loti13y:e. distance. :6f 249.79 feet to. an` intersection. with a .l in a 20 feet North rl Y of:and parallel.i7ith the F -line of said Block 11 thence South 80 , 16'. 0" East along the 5, 3 � said line 20: feet.Icortherly of and parallel with the Northerly line of . 1 Block 115, a distance of 203.9 feet; thence North 9' 43' 30" East, a dis tance of.140,feet; thence South 80° 16' 30" East, a distance o£ 146 feet to the point of beginning. EB:vld Plats enclosed The information. here in set forth is.supplemental OR 1057444 and is rade a part thereof.. Recordin been no deeds.convevina the nronerty described i Page 2 �-wi,AD � t ux ""TWE eiZE( ENV-' Newpo-vt3eacYi. ►2e,so� 4500 Campus Drive, Suite 500, Newport Beach, CA 92660; (949) 757-1662 Fax(949) 660-1252 TABLE OF CONTENTS PAGES 2 -5 PAGE 6 PAGES 7-8 PAGES 9-10 Response To Request For Additional Information Dimensioned Site Plan (Reduced)/ Mounted Full Size Plan Submitted Separately Attachment 1 Attachment 2 PAGES 11-23 Attachment 3 July 17, 2000 Sharon Wood Assistant City Manager City of Newport Beach 3300 Newport Blvd. Newport Beach, Calif. 92663 Ref: Addendum to "The Regent" Newport Beach Resort proposal originally submitted on February 4, 2000. Dear Sharon, In response to your May 31, 2000, letter requesting additional information for our Marina Park proposal, we hereby submit the following. A. IDENTIFICATION 1. Name of development entity. a. Sutherland Talla Hospitality 2. Ownership structure. a. Partnership 3. Developer's Team. a. Please see page 67 of original proposal 4. Project manager. a. Stephen Sutherland (949) 757-1662 5. Name of resort operator. a. Regent International Hotels 6. Identify development project to be proud of. a. Please see "Attachment 1" 7. Familiarity with tidelands requirements. a. Per state law, tidelands property is owned by the people of The State of California and granted to the city to administer. The Tidelands Trust Agreement states that the property must remain accessible to the public. As such, certain private uses such as residential, are not permitted. Visitor serving uses such as a hotel or a resort is permitted. "The Regent" Newport Beach Resort proposal is a permissible use for tidelands or uplands. 4500 Campus Drive, Suite 500, Newport Beach, CA 92660; (949) 757-1662 Fax (949) 660-1252 2 "The Regent" Page 2 B. PROJECT DESCRIPTION 1. Parcel sizes a. According to a July 7, 2000, telephone conversation with Robert Kin, City of Newport Beach Planning Department, the overall Marina Park, American Legion and related city controlled property is only one parcel. The parcel size is 427,080 sq.ft. b. "The Regent" Newport Beach Resort will have the following project use areas listed by site. 1. American Legion: 58,806 sq.ft. 2. 15t' Street Park: 18,295 sq.ft. 3. Existing playground: 13,068 sq.ft. 4. Municipal parking 10,890 sq.ft. 5. Marina Park Trailer Court: 186,001 sq.ft. 6. Part of Tennis area 35,646 sq.ft. Total area to be utilized: 322,706 sq.ft. 2. Project description. a. Building sizes and function 1. 14 buildings with sizes and functions as follows. 2. 12 buildings utilized as guestrooms and totaling 95,062 sq.ft. 3. 1 building serving as lobby with spa, restaurant, meeting and banquet space, lobby bar, administration, retail and back of house and totaling 25,000 sq.ft. 4. 1 building serving as specialty restaurant and totaling 2,880 sq.ft. 5. Building area for above: 122,942 sq.ft. b. Dimensioned site plan. 1. Please see full size dimensioned site plan submitted with this addendum. c. Amenities. 1. Architectural design will remain Italian Villa Style. 2. Extensive landscaping to include public walkways with arbors and courtyards with water fountains. 3. 2 restaurants with the specialty restaurant overlooking the pool area and the bay. 4. The marina will be redeveloped to accommodate two restored vintage yachts from the 1950's with sizes of 65 to 75 feet long. 5. The marina will also be utilized for "yachts in transit," allowing for yachts up to 80' LWL traveling from ports worldwide. In addition, slips will be available for local boaters to "tie up" and visit the resort and its grounds and facilities. 6. Tennis courts will be available for resort guest and area residents. 7. A small sailing and rowing club will be located in the marina and will be available to resort guest and area residents. 8. A world class spa will be developed and be available to resort guest and area residents. 3 "The Regent" Page 3 d. Coverage. 1. Based on full parcel size of 427,080 sq.ft. with building footprints of 87,671 sq.ft, the coverage is 23.44%. 2. Based on the project use area of 322,706 sq.ft. with building footprints of 100,122 sq.ft. the coverage is 31. e. View corridors. 1. A minimum of three view corridors will show through the central areas of the resort. Please see dimensioned site plan. 3. Projected retail sales, transit occupancy and property tax. a. Retail sales. Please see Regent International Hotels "Attachment 2" b. Transit occupancy tax. 1. Based on the market analysis prepared by PKF CONSULTING, dated June 28, 2000, and included in this addendum as "Attachment 311, in the first three full years of operations the TOT revenue to the city would be as follows. a. Year one $ 1,332,177.00 b. Year two $ 1,481,542.00 c. Year three $ 1,634,925.00 2. PKF has told me that year four would be the resorts "benchmark" year with guestroom revenues of $ 17, 093,310.00. This would generate "benchmark" TOT revenue of $ 1,709,331.00. c. Property tax. 1. Based on improvements made to the property totaling $ 30,000,000.00, and a property tax rate of 1.1%, annual property tax would be approximately $ 330,000.00 a year. 4. Cost and revenue proforna. a. Please see proforma prepared by Regent International Hotels "Attachment 211. 5. Market feasibility analysis. a. Please see market analysis prepared by PKF CONSULTING "Attachment 311. 6. Development schedule. a. Please see pages 62-66 of original proposal. 7. Financing plan. a. Project cost $ 30,000,000.00 b. Equity from partners $ 10,000,000.00 c. Debt financing $ 20,000,000.00 d. Source of equity Capital Markets • See "Letter of Interest" on page 46A of original proposal. 4 "The Regent" Page 4 C. GROUND LEASE 1. Ground lease terms are discussed on pages 6&7 of my original proposal. a. Payments for years one and two to be $ 800,000.00 per year. This reduced amount is for the periods of planning and construction. In year three, the first year of operation, the lease amount is $ 1,200,000.00. The second and third years of operation, the lease amount is $ 1,400,000.00 annually. b. Lease payments will commence upon the signing of the lease document. 2. Lease guarantees/subordination. a. Ground lease to be guaranteed by partnership and $ 30,000,000.00 of improvements with a non -subordination lease agreement. 3. Pre -development timing. a. Sixteen months to start of construction. b. Twelve months from start of construction to opening. 4. Pre-leasing/marketing. a. No pre -leasing required. b. Marketing provided by Regent International Hotels and Carlson Hotels Worldwide. Please feel free to call me at 949-757-1662 with any questions you may have. Sincerel Step n R. Sutherland Partner BOATDOCK MG — MOR SCHEME 1 • .BUILDING AREA: I00,122 SF. • SITE AREA: 427,080 SF. • FAR: 23.44% SCHEME 2 • BUILDING AREA: 100,122 SF. ew NOt$ Bea clv Resort • SITE AREA : 322,706 SF. p • FAR: 31.03 ti Prepared by developer: Sutherland Talla Hospitality s '1' H E S 1' O R , I , ' S C I, IJ B C U kl P A N )' T It F. SPORTS CIA H/1,A - III I: SVoAIS C LI'M I I R1IN I'. ft F, I: Boo SI'l)R'I's CI. I'HI\lTIIF SI'II HI's (: 1. l'II I I. i.S lF:(; iH July 6, 2000 Mr. Stephen R. Sutherland Stephen R. Sutherland Company, Inc. 4500 Campus Drive Suite 500 Newport Beach, CA 92660 Dear Steve, The most impressive development that I have completed in Orange County would be the Sports Club/Irvine, which was opened in 1990. It's is a 120,000 square foot sports and fitness complex which I developed, built, and operate. The club is recognized as the finest sports club in Southern California. The primary lender in the project was Security Pacific Bank and I developed the club as the general partner in a partnership with Marvin Davis of Los Angeles. Langdon, Wilson of Newport Beach acted as the architect and design firm for the project. You will find enclosed in the package a brochure on our latest projects. Please call me if you require any further information. Sincerely, Mike Talla CEO MT:rab Enclosure 1 1 100 Santa Monica Boulevard • Suite 300 ° West Los Angeles, CA 90025 (310) 479-5200 • Fa, (310) 479-4350 7 ..._.._ .... .. . . __ THE S P O i • 130, 000 sq. ft. Sports and Fitness Facility • Sister Club to The Sports Club/LA and Reebok Sports Club/NY • 14, 000 sq. ft. state-of- the-art Coed Weight Training Gym • Two 2, 500 sq. ft. Exercise Class Studios ■ 25 yard Outdoor Pool for lap swimming • Cardiovascular Deck — 5, 000 sq. ft. of computerized training equipment • Two full court regulation - size Basketball and Volleyball Gymnasiums • Spin • Private Training • Treadwall Rock Climbing Simulator "Simply the finest sports and fitness complex in the World. " U B/ I R V I N E • Racquet Sports: I 2 Regulation Racquetball Courts 4 International Squash Courts 2 Outdoor Paddle Tennis Courts • Toni & Guy Hairdressing Salon • Oasis Body Salon for men and women • Complete Spa Facilities for men and women including Steams, Saunas, Jacuzzis and Professional Massage • Large, luxurious Locker Rooms with Towels provided • Rooftop Running Track • Golf Sky Tee • Yoga • Sports Bar & Grill • Sidewalk Cafe • Conference Rooms • SportsMed/lrvine - Physical Therapy and Wellness Center - Outdoor Sundeck • Lessons - Racquet Sports, Swimming and Golf • Nutritional Counseling/ Registered Dietician 'The Kids Club" Childcare Center for children ages 6 mos. to 12 yrs. • Players Pro Shop Dry Cleaning, Laundry and Shoeshine Service Valet Parking 1980 Main Street Irvine, CA 92614 (949) 975 8400 (�K) REGENT h fF,auriOYAL HOTELS DRA Proposed Regent Newpor# Reach 10-Year Projections Neu" Bes,ch Pmjechnn pkf_x Is 07114.20(>D ) A 8 P\i 2003 2004 2905 2006 2007 Number of Da} s OpnvYear 365 365 365 365 365 Available RDms (Daily) 156 156 156 156 156 Available Roams (Annually) 56.940 56,940 56,940 56,940 56,940 Occupancy Nrcernage 66.D56 70.0% 15.001 76.0-6 76.091. Oocupird Rooms (Annitally) 37.580 39,858 41.705 43,214 43,274 Average Daily Rate S350.00 S367.00 S378.OD S390.DD $401.00 REVENUES Amouol Ratio Amoum Ratio Amaunl Ratio Aunaanl Ratio amounl Rallo Rooms SL3,15TWO 55,7% SJ4,627,90D 56.a% S16,142.500 57.5•1; S16,877,000 57.7% SJ7,353,000 57.7% Yach(s (two %inhdge) 5443,676 1.9% S456.986 1.81/. S470,695 1.7% S4M,816 L7% T499,361 1.7% Food 4,906,500 20,8% 5,22&ODD 20.3% 5,609,200 20.0% 5,923,700 t9.9 0 5,998A00 19,9% Beverage 2,899,200 12.3% 3,089,200 12.0% 3.314.500 11_8'n 3,44%200 11.8% 3,544,400 1L.8% Spa 1.115.100 47% 1,18B,rco C6% 1,274,80D 4.596 1,323,500 4.5% 1363.200 4.5% Telephone 660,40D 2.8% 7D8,DD0 2.9% 764,90D 2.7% 795.200 2.7% 819,100 2.7% AfinorOperated l3cpartments. 236,400 I.DSo 251,No La". 270.200 3.0% 280.500 1.09b 289,00D L.0% Rents & Other Income J79,50 0_311n 190,700 0.7% 203,9DD 0.7% 21 t,60D 07% 219.ODO 0.7>6 TOTAL REVENUES S23,593,876 100.03b 525,740,686 100.0% S28.050,695 100.0% S29,237,516 100.O% 530,084,461 loOA% DEPARTMENTAL EXPENSES Rooms S2,801,200 21.3% S2,967,100 20.M,; S3.161,500 19.6 % S3,278,0DO 19.4% U,376,400 19.5% YzAls(Iwo vinlage) SL33,103 30.0% S137,096 30.0% 5141,209 30.0% S145,445 30.0% S29.9,616 60.0116 Fo0d&Beverage 6,957,900 89.1:i 6.838.500 92.2% 7.338,900 80.0% 7,372,7DI) 79.69: 7,593,800 79.6% Spa 1,069,400 95.8% 1,106,400 931" 1.147,200 90.0% 1.1832DO 89.4% 1,218,700 89A% Telephone 396,300 60.0% 424,800 60.056 459,000 60.0% 477,200 60.0% 491.500 60A% OlherDepa"Meals 14],800 60.0% 151,1DO 60.0A 162XO 60.0% 168,400 60.0% L73,400 60.05E TOTAL DEPARTMENTAL EXPENSES SIIA",703 48.7% $11.624.996 452% S12,210,009 43.5 a S12,624,M5 43.2 % S13,153,416 43J% HOUSE PROFIT $12.095.173 51.3% $14.115,690 54.41% SLS,840,687 56.5% S16,612,571 56.81% SJ6,93LO44 36.3% UNE)ISTRIBU ED OPERATING EXPENSES Administrative&General S1,785.500 7.6°.b S1,731,500 6.7% 51,801,500 6A% S1.859.200 6,d% $1,915.000 6.4% Marke(ing(Tolal) 1,629,7DO 6.9% 1,455,303 5.7% 1,524,300 S_ 116 1,575,300 S_ 1,1 I.622.500 5.4% Energy & Utililies 44B,3DO J.9% 465.500 1.8% 484.3DO 1.7% 499,800 1 7% 514.800 1.7% Property Operations&Maintenance 939,100 4.0:: "1'800 3.9% 1,051,2DO 3.E% 1.091,300 371A 1,124,OD0 3.71A TOTAL UNDISTRIBUTED EXPENSES S4.302,600 20.4% S4,644,100 19.0% S4,861.300 J7.3% S5.025.600 17.2% S5,176,300 0.2% GOP S7,292,573 30.9A 39,471.590 36.8% 310,977.3B7 39.1% S11,586.97L 39.6% S11,754,744 39.1 % Management Fees $707A00 3.04 $772,20D 3.Fj% S841,500 3.0% S877,LDO 3.0% S902,50 3.01A IBFC 36,584,773 27.9% S8.699,391) 3191% S10,135,887 36.1% S10,709,871 36.6% 51o,852,2.14 36_1% EMED CHARGI S Leases S1.200,0DO 5.1% SL400,OD6 5A% S3,400,000 5.0% S1,400,000 4.8% SIA00,000 4.7% Property Taxes 330,01) IA% 336,6D0 1.3% 343,332 1.2% 350,199 1.2% 357,203 1.2 % Irtsuranoe 175,6D0 0.7% lBo,800 0.7% 186,300 0.7% 191,900 0.7% J97.600 03 % Reserve for Replacement 235,900 1.01% 772XO 3.0% 841,50D 3.0% 877,10o 3.DIA 1.203.400 4.0% TOTAL FIXED CHARGES S1,941,500 8.2% S2,689,600 10.4% S2 771,132 9.91Y. 32,819,199 9.6% S3,158.203 10.51". EBITDA $4.643,273 19.7% S6,009.790 23.3% S7,364,7S5 26.3% S7,8M673 27.0% S7,694,042 25.6% The Ao+Y pfojec1ions roT the proposedRegenl are based upon assumptions and estimates That are subjcc4 to ancerrainq, and rariat ion. 1n addition, Regent makes assumptions as to the Future behaviorafconsurners and the gcnael economy, which are highly uncertain. Therefore, Regent makes no %varramy, or any kind, Kral the projections will be achieved. Page I of 2 ca) REGENT INTF:RNATfOiVAL HOTELS WZT-T r I IL97TWM rtIt 4.I. N: Nyport Deach Projection pkf.xls 07114r2000 1:48 PM Approved by: Date: 200B 2009 21110 2011 2012 Number of DaysOpenh'rar 365 365 365 365 365 Available Rooms (Daily) 156 J 56 156 156 156 Available Romos (Annually) 56,940 56,94D 56,940 56,940 56,940 Oeeupancy Peroentege 76.0% 76.0% 76.0% 76.0% 76.0% Oxupied Rooms {Annually} 43,274 43,274 43.274 43,274 43.274 Average Daily Ratc 3413.03 S425AZ $438.19 545133 5464.87 REVENUFC Amuvnl Ratio Amouol Ratio Amoual Ratio Amount Ratio Amount Ratio Roocts 517,873,60O 57.7% 518,409,NG 57.7% 518,962,100 57.71A 519,531,000 57.714 520,116,90D 57.7% Yaahls(two vintage) 5514,342 l.7% 5529,777 1.7% 5545,665 1.7% 5562,035 1.7% S57B,896 1.7% Food 6,L78,400 19.9% 6,363,800 19.9% 6,554,700 19.9% 6,751.30D 19.9% 6,953,8DD 19.9% Beverage 3,650,700 113% 3,760,200 L1.rA 3,873,000 LI.B°•6 3,989.200 11_8% 4.M.900 11_9% Spa 1,404,100 4S% 1,446,200 4.5% 1,40,600 4.5% 1534,300 4.5% ,580,300 4.5°1 Telep]rooe 843,200 27% 869,O00 2.7% 995,100 2.7% 922,ODO 2.7% 949,700 2.7% Mina€ Operwed Deparhnents, 297.700 1.01%. 306,600 DrA J 15,800 I A% 325?DO 1.0% 335,100 1.0% Rents&Other lncome 224.500 0.7% 231,2DD 0.?% 233,100 03% 245,200 0.7% 252.600 0.7% TOTAL REVENUES 530.987,042 100.0% $31,916,372 100.0-A 532,874,065 100.0% S33.860,335 100.0% 534,676,196 100.0% DEPARDdENTAL EXPENSES Rooms SJ,417,700 19.5% 53,582,DM 19.5% 53,689,5DO 19.3% 53,B00,200 19.5% 53,914,200 L9.5% yachls(two vintage) S306,6O5 60.0% S317,863 60.0% 5327,399 6D.0% 5337,221 6D.0% 5347.338 60.0% Food & Beverage 7,821,600 79.6% B4O56,200 79.6% 8,297,9DO 79.6% 8.546,800 79.6% 8,803.200 79.6% Spa 1,155,300 99.4% 1.293,000 89.4% 1,331,800 89.4% 1.371.800 89.4% 1.413.000 a9.4% Telephone 506,200 60_D?1. 52J,400 60.0% 537,DD0 6D.0:o 553.100 60.0 0 569,700 60.0% Other Departments Iu'600 60.0°6 184,000 60.0:6 189,500 60.D% 195.200 60.0. 20t.100 60.0% TOTAL DEPARTMENTAL EXPENSES $0,548,005 43.7% SL3,954463 43.7% 514,373.O99 43.7% $14.804,321 43.7% $15,248,538 43.7'A HOUSE PROFIT 517,439.037 56.3% 517,962309 56.3% 518,500,966 56.3% 519,056,014 56.3% 519,627,65E 56.3% UNDISTRIBUTED 01PERATINGE22ENSESS Administrative & General SL,9715DD 6.4% 52,031,700 6A% 52,O92,700 6_4% S2,155,500 6A5o 52.220,200 6A% Nfarketing(ialal) L,671,700 5.4% 1,72r,4Do 5A % 1,773,OOD 5.4% 1,826,2fA 3A% 1,8B1,O00 5.4% Energy & Utilities i3O,200 L,7% 546.14M 1.7% 562SOD 1.7% 579,4fA 17% 596,900 1.7% Property Operations&Maintenance 1,157,700 3.1% 1.192,400 3.7% 1,228,2DO 3.7% 1,265,000 3.7% 1,303,000 3.7% TOTAL TJNDISTRIBUTEDEXPENSES 55,331,600 17.21% $5,491,600 17.2% 55.656,4D0 17.2% $5,826,100 17.24: 36,001,000 17.2% GOP S12,J07,437 39.1% 512,470,509 39.1". 512.844,566 34.1% 513,229,914 39.1% 513,626,658 39.1*A Managem ent Fees 5929.600 3.0% 5957.500 3.0% 5986,200 3.D% 51,015,800 3.0% $1.046,300 3.0% IBFC SJt.J77,837 36.1% Sl1,5J3.009 36.1% S)1,858,366 36.L% 512.214.J14 36.9% 512,58D,358 16.1% FIXED CHARGE Leases S1,4DD,0D6 4.5% 51,40D,ODD 4.4% S1,400,000 43% 51.428,OOD 4.2% 51,456,560 4.210 Property Taxes J64,747 1.2% 37t,634 1.2% 379.066 12% 386,649 J.l% 394,391 1.1% Insurance 203,500 0.7% 209,600 0.7% 2J5,900 0.7% 222,4D0 07% 229,100 0.7% Reserve forReplaoemenl 1,239,500 4.O°A 1,276,700 4.0% 1315.0D0 4.0% 1,354,400 4.09: 1,395,00O 4.0% TOTAL FIXED CHARGES 53,207347 10A% S3 257.934 102% 33309,966 10.1 % 53,391,443 10.0% 53,475,04J 30.0% EBTTD.4 57,970,490 25.7% 0,255,075 25.9% 58,548400 26.0% 38,B22,666 26.1% 59,LO5,318 26.1% The above ptojcclions for the proposed Regcar are basod upon assumptions and eslimales Thar aae subkci to uncertain€) and variation. In addition, Regent makes assumplirms as to the fuhue behavior of consumers and The general econarny, which are highly uncertain. Therefore, Regent makes no warranty, of any kind, Lhal the projections will be achieved_ Page 2 of 2 ry n A n June 28, 2000 Mr. Stephen Sutherland Stephen R. Sutherland Company, Inc. 4500 Campus Drive Suite 500 Newport Beach, California 92660 Dear Mr. Sutherland: CONSULTING 811 Wilshire Building Suite 800 Los Angeles CA 90017 Telephone (213) 680.0900 Telefax (213) 623.8240 In accordance with your request, we have completed our market analysis for a proposed luxury hotel to be developed at the Marina Park site in Newport Beach, California. This letter is brief in scope and provides facility recommendations and an analysis of the potential market demand for the proposed hotel facility. The conclusions reached are based on our knowledge of the lodging market in the competitive area as of June 2000. Our letter and the analysis presented herein assume the opening of the proposed hotel on March 1, 2003. This letter report is designed for your internal use and that of Regent management in planning for the proposed project. It is subject to the attached statement of Assumptions and Limiting Conditions. SITE ANALYSIS AND ACCESSIBILITY The site is located on the northern side of Balboa Boulevard on Balboa Peninsula in Newport Beach, California. The site is bordered by West Balboa Boulevard to the south, 18"' Street to the west, 15`i' Street to the east, and Newport Channel to the north. The site offers waterfront frontage and a beach. One block to the south of the property is the beach (Newport Beach), and one half mile southwest of the subject is Newport Pier. The greater area surrounding the subject site is composed primarily of residential dwellings with a number of small commercial businesses located along Balboa Boulevard. Currently, the site is improved with an American Legion building, four tennis courts, a small park, and a residential mobile home park. The site is clearly visible from Balboa Boulevard, which borders the southern portion of the site. Additionally, the site is clearly visible from passing boats along Newport Channel. Freeway access is provided via Highway 55 or Newport Boulevard, which becomes Balboa Boulevard. Additionally, the property is accessible from the northwest and southeast via the Pacific Coast Highway to Balboa Boulevard. Entrance to the property will be located off 15`I' Street. A wholly owned subsidiary of Hospitality Asset Advisors International, Inc. 2 The subject property is expected to benefit from its unique waterfront location in a highly residential area, its proximity to the beaches, attractions, and commercial centers located within Newport Beach, and spectacular views of the Newport Channel. Additionally, as waterfront property available for resort development becomes increasingly scarce, this project will maintain a competitive advantage due to its waterfront location. AREA OVERVIEW The subject site is located in the City of Newport Beach, California. Newport Beach is known as a tourist destination, as such it has a year-round population of 72,000 permanent residents with summer population figures nearing 100,000 residents. The City of Newport Beach is located within a five to ten mile radius of John Wayne Airport and has excellent access to all of the major highways in Orange County. Furthermore, it is located proximate to the commercial and industrial areas of Orange County, including the cities of Irvine, Costa Mesa, and Huntington Beach. Due to Newport Beach's proximity to various commercial office and industrial areas, and a major airport, the majority of the hotel demand in the area is driven by group and commercial business. Additionally, home to a variety of attractions, Newport Beach offers an excellent climate, ocean orientation, and a variety of shopping and entertainment venues for the leisure visitor. The future economic outlook for the City of Newport Beach indicates continued modest economic growth with overall economic stability. The following statements provide an overview of the Newport Beach market area. Since the 1990 census, the population of the City of Newport Beach has risen from 66,600 to 74,000, representing a compound average annual growth of 1.2 percent, which is a stronger rate than that of neighboring Costa Mesa, but below that of Irvine. 1 The Newport Beach office market has remained strong. Included as part of the Greater Airport Area submarket, which consists of 24,880,078 square feet of office space, Newport Beach and the surrounding communities posted a 1999 year-end vacancy rate of 10.1 percent, the lowest of any Orange County submarket. Currently, the average rental rate for Class A office space in this submarket is $2.73 per square foot per month, the highest in the county. (Cushman Wakefield). The Orange County office market is expected to remain strong through 2000. s In 1999, approximately 746,204 square feet of new office space in the Greater Airport Submarket was completed and by the end of 1999, approximately 655,972 square feet of space remained under construction. (Cushman Wakefield). John Wayne Airport has become one of the country's busiest regional airports, with passenger numbers increasing at a compound average annual rate of 4.3 percent between 1991 and 1999. 1999 passenger figures reached 7.47 million people at John Wayne Airport. Visitation numbers to the Orange County area have rebounded from the drop in 1998 (caused by the Asian economic crisis and El Nino). According to CIC Research, the forecast for 2000 indicates a record year for Orange County visitation, with an estimated 18.0 million visitors. Stephen Sutherland Company, Inc. Regent Hotel, Newport Beach 12 3 DESCRIPTION OF THE PROPOSED SUBJECT HOTEL AND FACILITIES RECOMMENDATIONS Proposed for the subject site is a 158-unit luxury Regent hotel, including two yachts with boat slips capable of accommodating yachts up to 80 feet in length at waterline and a 5,000 square foot spa facility. Architecturally styled after Villa Fiorentina, built in the 1880's and located in Southern France, the project captures the essence of a European villa through its low-rise structure, complete with landscaped courtyards and fountains. The property should capitalize on its waterfront location, by ensuring that a majority of the guestrooms and public space areas afford waterfront views. In keeping with the Newport Beach atmosphere, the property is anticipated to have a total of 10 docks for use by yachts in transit and for local residents visiting the property. Furthermore, the hotel will have two vintage 1950's, refurbished yachts that will be offered as guest "suites". These yachts will consist of several state rooms, and offer room service and amenities similar to the hotel's guest rooms. For an additional charge, the yachts could also potentially be chartered for day trips along the coast. The proposed subject hotel will also include a 5,000 square foot spa, a 1,500 net square foot signature restaurant, 7,600 square feet of meeting space, 1,500 net square feet of restaurant and lounge area, swimming pool, and two tennis courts. The tennis courts will be for use by hotel guests, as well as local public use, on a reservation basis at no cost. Additionally, a small rowing and sailing club will be located on the property. The guestrooms will consist of a mixture of junior suites, double queens, full suites, and vintage yachts. Additionally, boaters in transit will be able to tie up to the hotel's docks and room service, housekeeping and use of the spa and hotel facilities will be made available to them as well. Overall it is expected that the hotel's waterfront location, luxury amenities, excellent spa services, and Newport Beach location will enable the property to be highly competitive in the Southern California resort hotel market. Furthermore, the property will have the unique advantage of accommodating yachts in transit and hotel guests aboard luxury yachts, increasing the resort's appeal to niche (sailing and boating) market demand. MARKET ANALYSIS To determine the future market potential of the competitive properties and the subject, we reviewed our database, conducted primary research relative to the competitive hotel sub -market and prepared a five year history of occupancy and average daily rate trends for that market. To obtain data on current conditions, market mix, and likely future results, we conducted primary research in the area, consisting of interviews with the management of key competitive hotels, developers and city officials. It should be noted that the proposed Regent property, by virtue of its location near the ocean, facilities including spa, and its services, can be classified as a destination resort. As such, the property is expected to compete within the coastal resort market. Competitive Supply In order to identify the competitive market of the proposed hotel, we have analyzed the overall Southern California coastal resort market and selected seven properties that we feel will offer Stephen Sutherland Company, Inc. Regent Hotel, Newport Beach 13 4 competition to the subject hotel. The selection of the competitive hotels was based on each property's location, number of guestrooms, quality level of facilities and amenities, room rate structure, and market orientation. The following chart presents the primary competitive supply for the proposed subject hotel. Historical and Projected Competitive Supply 1996-2004 1996 1997 1998 1999 2000 2001 2002 2003 2004 Four Seasons Newport Beach 285 285 285 285 290 295 295 295 295 Four Seasons Biltmore Hotel 221 221 221 221 221 221 221 221 221 Ritz Carlton Laguna Niguel 393 393 393 393 393 393 393 393 393 Shutters on the Beach 198 198 198 198 198 198 198 198 198 Casa Del Mar 0 0 0 0 128 128 128 128 128 L' Auberge del Mar 120 120 120 120 120 120 120 120 120 La Valencia 106 106 106 106 121 121 121 121 121 ADDITION TO SUPPLY Subject- Regent Hotel 130 158 Bacara Resort- Santa Barbara 133 400 400 400 400 St. Regis Monarch Beach Resort 133 400 400 400 Treasure Island 138 275 275 Balboa Bay Club 129 129 129 Newport Dunes 175 350 Cumulative Rooms Supply 1,323 1,323 1,323 1,323 1,604 2,009 2,543 2,985 3,188 % Change N/A 0.0% 0.0% 0.0% 21.2% 25.2% 26.6% 17.4% 6.8% Source: PKF Consulting Additions to Supply In addition to the current competitive supply, we have identified five proposed coastal -oriented resort projects totaling 1,554 rooms (not including the subject) as possible future additions to the supply. Two of these projects are currently under construction and two are expected to break ground in summer 2000. These various projects are described in the following text. Bacara Resort The 400-room Bacara Resort is under construction, near Sandpiper Golf Course in Goleta, Santa Barbara County, approximately 100 miles northwest of Los Angeles. The hotel is planned to include 27,000 square feet of indoor meeting space plus a 5,300 square foot executive conference center and several outdoor function areas. Other facilities will include a 46,000 square foot spa, three swimming pools, three restaurants and additional food and beverage outlets, 30 cabanas and a poolside bar, and 8,000 square feet of retail space. This project will be independently operated and is expected to open in September 2000. St. Regis Monarch Beach Resort Starwood Hotels & Resorts recently announced that it will manage the St. Regis Monarch Beach Resort in Dana Point. This 400-room resort is part of a 200-acre development that includes the Monarch Links Golf Course and 70 luxury homes. The resort will offer four restaurants, two lounges and other food and beverage outlets, 30,000 square feet of indoor meeting space, over 60,000 square feet of outdoor space, day spa, fitness center, three swimming pools and a kids pool, Stephen Sutherland Connpmny, Inc. Regent Hotel, Newport Bench 14 two whirlpools, ten private poolside cabanas and an exclusive beach club. The resort is expected to open in September 2001. Treasure Island Resort Located in South Laguna Beach, the Treasure Island hotel development is proposed for the top of a gradually sloping 60-foot bluff that overlooks the Pacific Ocean. The site is immediately north of Aliso Beach and is to be part of a master planned development including condominiums and beach homes. The resort is expected to include 275 rooms, two restaurants, 12,000 square feet of meeting space, a 20,000 square foot spa, retail shops, other recreational amenities and direct beach access. The developer has indicated that the grading will begin in September 2000. The resort will be operated by Ritz Carlton hotels as an independent hotel. We have projected this project to open in July 2002. Balboa Bay Club Located in Newport Beach, this project calls for the redevelopment of the current Balboa Bay Club. The new facilities will include a 145 room hotel, with 28 rooms dedicated for use by club members only. Additionally, the spa and food and beverage facilities will be upgraded. The final EIR was completed in June 1999 and the project is currently in plancheck. Construction is anticipated to begin in Summer 2000, with completion projected for 2002. Newport Dunes Located in Newport Beach, on the north side of Highway 1, between Bayside and Jamboree, this project call for approximately 350 hotel rooms, additional timeshare units, and a marina. Located on a lagoon, this property will not be accessible by larger boats, due to a bridge and restricted height clearance. This project has not yet been approved and is currently in the public hearing phase. Additionally, Coastal Commission approvals need to be granted. As such, we have projected that the property will open in mid-2003. The 158-room subject Regent hotel is assumed to open in March 2003. Historical Performance The aggregate total annual available and occupied rooms, the resulting occupancy levels, average daily room rate, and REVPAR (revenue per available room) for the competitive supply from 1996 to 1999 are presented in the following table. Historical Market Performance of the Comoetitive Sunnly Annual Percent Occupied Percent Market Average Percent Percent Year Supply Change Rooms Change Occupancy Daily Rate Change REVPAR Change 1996 482,895 N/A 380,577 N/A 78.8% $221.01 N/A $174.18 N/A 1997 482,895 0.0% 388,638 2.1 % 80.5% 243.97 10.4% 196.35 12.7% 1998 482,895 0.0% 375,449 -3.4% 77.7% 268.15 9.9% 208.48 6.2% 1999 482,895 0.0% 378,110 0.7% 78.3% 284.98 6.3% 223.14 7.0% CAAC 0.0% -0.2% 8.8% 8.6% 99 ytd* 160,965 N/A 125,031 N/A 77.7% $277.53 N/A $215.58 N/A o0 ytd* 178,850 11.1 % 139,997 12.0% 78.3% 303.65 9.4% 237.69 10.3% ' Y I D reflects the period from January through April Source: PKF consulting Stephen Sutherland Company, hic. Regent Hotel, Newl)ort Beach 15 01 While rooms supply remained constant between 1996 and 1999, occupied roomnights declined only slightly at a compound average annual rate of (0.2) percent over the same period. In 1997, the market occupancy reached a four year high of 80.5 percent. This occupancy rate declined to 77.7 percent in 1998, accompanied by an increase in average daily rate of 9.9 percent over 1997 levels. In 1999, market occupancy rebounded to 78.3 percent with growth in average daily rate of 6.3 percent over 1998 levels. The average daily rate increased at a compound average annual rate of 8.8 percent between 1996 and 1999, with a 1999 year end average daily rate of $284.98. The market's REVPAR (revenue per available room, a combination of occupancy and average daily room rate) increased 8.6 percent over the last four years. Overall, the market appears to be running near capacity, reflected in the high market occupancy and large increases in average daily rate. Year-to-date through April, supply in the market increased 11.1 percent, with the addition of Casa del Mar. The new supply appears to have been readily absorbed in the market with year-to-date 2000 through April results posting market occupancy at 78.3 percent, an increase over year-to-date 1999 levels. Additionally, the average daily rate has increased to a 2000 year-to-date level of $303.65, which is an increase of 9.4 percent over the average daily rate for year-to-date 1999. Mix of Demand for the Competitive Market As illustrated in the following table which presents the 1999 mix of demand, the competitive market is driven primarily by the leisure and group meeting market segments. Competitive Market 1999 Mix of Demand Market Segment Room Nights Ratio Commercial 80,100 21% Leisure 125,900 33% Group 172,000 46% Total 3 78, 000 100 % Source: PKF Consulting The group market segment is the primary source of demand, capturing approximately 46 percent of the total market demand in 1999. This segment is primarily corporation and association group business. The leisure market captured approximately 33 percent of the total market demand, or approximately 125,900 total roomnights in 1999. Commercial demand is derived primarily from businesses and corporations located in the local areas. It should be noted that Casa del Mar and Shutters, both located in Santa Monica, are primarily business hotels, capturing West Los Angeles commercial demand. They have, however, been included as they also capture leisure and group demand seeking a high -end property with a coastal orientation. The Orange County and Santa Barbara properties are more group and leisure oriented due to larger meeting space, more guestrooms, and relatively isolated locations. Projected Performance of the Competitive Supply Using the historical growth in the market as a base, and taking into account the current demonstrated and future projected economic conditions, we have estimated future growth in overall market demand and average daily rate as outlined in the following table. Stephen Sutherland Company, lnc. Regent Hotel, Newport Beach WE 7 Historically, market demand has remained strong, with the market operating at near capacity levels in terms of occupancy. While new supply has been readily absorbed into the market in 2000, the large increase in supply between 2001 and 2004 is expected to significantly impact the market. We have estimated continued future growth in all three market segments, with greater growth levels expected in the leisure and group segments. Despite this growth and our estimates of induced leisure and group demand generated by the new resort supply, we project that market occupancy will decline to 65 percent in 2003. As the new supply is absorbed into the market, the market occupancy is expected to rise to 66 percent in 2004, 69 percent in 2005, and 72 percent in 2006. The market is projected to stabilize at 75 percent in 2007. The table on the next page sets forth our projection of market performance over the next seven years. Stephen Sutherland Coinpanv, Inc. Regent Hotel, Nei vport Beach 17 The Regent Newport Beach Competitive Market Estimated Future Growth in Lodging Supply and Demand 2000 - 2009 2000 2001 2002 2003 2004 2005 2006 2007 Additions/(Deletions) to Supply The Regent Newport Beach 130 28 Four Seasons Hotel Newport Beach 5 5 Casa Del Mar 128 La Valencia 15 St. Regis Monarch Beach Resort 133 267 Treasure Island 138 137 Balboa Bay Club 129 Bacara Resort 133 267 Newport Dunes 175 175 Cumulative Rooms Supply 1,604 2,009 2,543 2,985 3,188 3,188 3,188 3,188 Total Annual Rooms Supply 585,460 733,285 928,195 1,089,525 1,163,620 1,163,620 1,163,620 1,163,620 Growth Over the Prior Year 21 .2% 25.2% 26.6% 1 7.4% 6.8% 0.0% 0.0% 0.0% INDUCED/(UNSATISFIED) DEMAND Commercial 5,800 0 0 0 0 0 0 0 Leisure 11,900 12,400 18,700 19,400 8,800 0 0 0 Group 11,900 18,600 28,100 19,400 8,800 0 0 0 TOTAL INDUCED/(UNSATISFIED) DEMAND 31,000 46,800 38,800 17,600 0 0 0 GROWTH RATES Commercial 10.0% 5.0% 4.0% 3.0% 3.0% 3.0% 3.0% 3.0% Leisure 15.0% 12.0% 10.0% 8.0% 7.0% 5.0% 4.0% 4.0% Group 15.0% 12.0% 8.0% 7.0% 6.0% 5.0% 4.0% 4.0% PROJECTED DEMAND Commercial Demonstrated 88,124 98,620 102,565 105,642 108,811 112,076 115,438 118,901 Induced/(Unsatisfied) 5,800 0 0 0 0 0 0 0 Total 93,900 98,600 102,600 105,600 108,800 112,100 115,400 118,900 Growth Over Prior Year 17.2% 5.0% 4.1 % 2.9% 3.0% 3.0% 2.9% 3.0% Leisure Demonstrated 144,842 175,551 206,746 243,482 281,284 304,588 316,772 329,442 Induced/(Unsatisfied) 11,900 12,400 18,700 19,400 8,800 0 0 0 Total 156,700 188,000 225,400 262,900 290,100 304,600 316,800 329,400 Growth Over Prior Year 24.5% 20.0% 19.9% 16.6% 10.3% 5.0% 4.0% 4.0% Group Demonstrated 197,855 234,925 273,808 323,041 362,988 390,377 405,992 422,232 Induced/(Unsatisfied) 11,900 18,600 28,100 19,400 8,800 0 0 0 Total 209,800 253,500 301,900 342,400 371,800 390,400 406,000 422,200 Growth Over Prior Year 22.0% 20.8% 19.1 % 13.4% 8.6% 5.0% 4.0% 4.0% Total Market Demand 460,400 540,100 629,900 710,900 770,700 807,100 838,200 870,500 Growth Over Prior Year 21.8% 17.3% 16.6% 12.9% 8.4% 4.7% 3.9% 3 9% Market Occupancy 79% 74% 68% 65% 66% 69% 72% 75% Source: PKF Consulting Stephen Sutherland Company, Inc. Regent Hotel, Neivl)ort Beach 9 It Should be noted that supply is projected to increase at a compound average annual rate of 10.3 percent. During the projection period, we have projected accommodated demand to increase at a compound average annual rate of 9.5 percent and average daily rate to increase at a compound average annual rate of 3.2 percent. Market occupancy is projected to stabilize at 75 percent in 2007. Based upon historical data and year -to date performance, the market average daily rate is anticipated to increase 6.3 percent in 2000 over 1999 levels, resulting in a 2000 year end rate of $303.00. We have estimated average daily rate annual growth of four percent in 2001, three percent in 2002, and three percent annually thereafter. The following table summarizes the projected supply, market occupancy, market average daily rate and REVPAR for the period between 2000 and 2007. Projected Market Performance of the Competitive Supply Year Annual Supply Percent Change Occupied Rooms Percent Change Market Occupancy Average Daily Rate Percent Change REVPAR Percent Change 2000 585,460 21.2% 460,400 21.8% 79% $303.00 6.3% $238.28 14.3% 2001 733,285 25.2% 540,100 17.3% 74% 315.00 4.0% 232.01 -2.6% 2002 928,195 26.6% 629,900 16.6% 68% 325.00 3.2% 220.55 -4.9% 2003 1,089,525 17.4% 710,900 12.9% 65% 335.00 3.1 % 218.58 -0.9% 2004 1,163,620 6.8% 770,700 8.4% 66% 345.00 3.0% 228.50 4.5% 2005 1,163,620 0.0% 807,100 4.7% 69% 356.00 3.2% 246.93 8.1% 2006 1,163,620 0.0% 838,200 3.9% 72% 366.00 2.8% 263.64 6.8% 2007 1 1,163,620 0.0% 870,500 3.9% 1 75% 1 377.00 3.0% 282.03 7.0% CAAG 1 10.3% 1 9.5% 1 1 3.2% 1 2.4% Juu[ce: rnr %.ons[uong Estimated Market Performance of the Subject Hotel We estimate that the subject will have an overall market penetration of 100 percent and a corresponding occupancy of 66 percent in 2003, its first year of operation. As the competitive properties have historically run high occupancies, it is reasonable for the subject to benefit from the strength of the market. As such, we have estimated market penetration to increase to 106 percent by 2006, its fourth year of operation. Due to the subject's waterfront location and unique marine orientation, we have estimated that the property will achieve a penetration rate greater than 100 percent of fair share over the long term. The following table sets forth our estimates of penetration by year and by market segment. Stephen Suthe-land Company, Inc. Regent Hotel, Nei i port Beach 10 The Regent Newport Beach Market Penetration and Projected Occupancy 2003 2004 2005 2006 2007 TAIL ROOMS AVAILABLE Regent Newport Beach mpetitive Market r Share of Supply MATED TOTAL MARKET DEMAND imercial ure up 'AL FAIR SHARE OF DEMAND Commercial Leisure Group TOTAL 47,450 57,670 57,670 57,670 57,670 1,089,525 1,163,620 1,163,620 1,163,620 1,163,620 4.4% 5.0% 5.0% 5.0% 5.0% 105,600 108,800 112,100 115,400 118,900 262,900 290,100 304,600 316,800 329,400 342,400 371,800 390,400 406,000 422,200 710,900 770,700 807,100 838,200 870,500 4,600 5,400 5,600 5,700 5,900 11,400 14,400 15,100 15,700 16,300 14,900 18,400 19,300 20,100 20,900 30,900 38,200 40,000 41,500 43,100 UBJECT PENETRATION ommercial 110% 120% 125% 120°% 110% gisure 110% 120% 125% 120% 112°% Troup 90% 90% 90% 90% 90% ROOM NIGHTS CAPTURED Commercial 5,100 6,500 6,900 6,900 6,500 Leisure 12,600 17,300 18,900 18,800 18,300 Group 13,400 16,600 17,400 18,100 18,800 TOTAL CAPTURED DEMAND 31,100 40,400 43,200 43,800 43,600 MARKET SHARE CAPTURED 4.4% 5.2% 5.4% 5.2% 5.0% OVERALL MARKET PENETRATION 100% 106% 108% 105% 101% SUBJECT OCCUPANCY 66% 70% 75% 76% 76% MARKET MIX Commercial 16% 16% 16% 16% 15% Leisure 41% 43°% 44% 43% 42% Group 43% 41% 40°% 41°% 43°% TOTAL 100% 100°% 100% 100% 100% Source: PKF Consulting Stephen Sutherland Cojnperny, Inc. Regent Hotel, Nenq)ort Beach 20 I Our derivation of the average daily rate for the subject property in a stabilized year of operation is based primarily on the historical average daily rates achieved by the other hotel properties in the competitive supply. We have estimated that the subject will achieve a $350.00 average daily rate in 2003, its first year of operation. We have estimated that the subject property will experience a five percent rate increase in 2004 (its first full year of operation) over 2003 levels. Thereafter, the subject's average daily rate is expected to increase at three percent annually. This equates to a stabilized average daily room rate of $326.00 stated in current value dollars. This positions the subject property at the Upper end of the competitive market in terms of rate due to its proposed amenities and affiliation with Regent Properties. The following table summarizes our estimates of penetration and occupancy as well as average daily rate and the resulting revenue yield for the subject for the period 2003 through 2007. Projected Market Performance of the Subject Hotel Year Annual Supply Percent Change Occupied Rooms Percent Change Occupancy Percentage Average Daily Rate Percent Change REVPAR Percent Change Market Penetration Revenue Yield 2003 47,450 N/A 31,100 N/A 66% 350.00 3.0% 229.40 N/A 100% 105% 2004 57,670 21.5% 40,400 29.9% 70% 367.00 5.0% 257.10 12.1 % 106% 113% 2005 57,670 0.0% 43,200 6.9% 75% 378.00 3.0% 283.16 10.1 % 108% 115% 2006 57,670 0.0% 43,800 1.4% 76% 390.00 3.0% 296.20 4.6% 105% 112% •2007 57,670 0.0% 43,600 -0.5% 76% 401.00 3.0% 303.17 2.4% 101 % 107% CAAG 1 5.0% 8.8% 1 3.5% 7.2% Source: PKF Consulting We appreciate the opportunity to work on this assignment and look forward to answering any questions you may have regarding our findings and conclusions presented herein. Sincerely, PKF Consulting By B;tYkOlBaltin Senior Vice President Stephen Sutherland Company, Inc. Regent Hotel, Newport Beach �- 1 STATEMENT OF ASSUMPTIONS AND LIMITING CONDITIONS This report is made with the following assumptions and limiting conditions: Economic and Social Trends - The consultant assumes no responsibility for economic, physical or demographic factors which may affect or alter the opinions in this report if said economic, physical or demographic factors were not present as of the date of the letter of transmittal accompanying this report. The consultant is not obligated to predict future political, economic or social trends. Information Furnished by Others - In preparing this report, the consultant was required to rely on information furnished by other individuals or found in previously existing records and/or documents. Unless otherwise indicated, such information is presumed to be reliable. However, no warranty, either express or implied, is given by the consultant for the accuracy of such information and the consultant assumes no responsibility for information relied upon later found to have been inaccurate. The consultant reserves the right to make such adjustments to the analyses, opinions and conclusions set forth in this report as may be required by consideration of additional data or more reliable data that may become available. Hidden Conditions - The consultant assumes no responsibility for hidden or unapparent conditions of the property, subsoil, ground water or structures that render the subject property more or less valuable. No responsibility is assumed for arranging for engineering, geologic or environmental studies that may be required to discover such hidden or unapparent conditions. Hazardous Materials - The consultant has not been provided any information regarding the presence of any material or substance on or in any portion of the subject property or improvements thereon, which material or substance possesses or may possess toxic, hazardous and/or other harmful and/or dangerous characteristics. Unless otherwise stated in the report, the consultant did not become aware of the presence of any such material or substance during the consultant's inspection of the subject property. However, the consultant is not qualified to investigate or test for the presence of such materials or substances. The presence of such materials or substances may adversely affect the value of the subject property. The value estimated in this report is predicated on the assumption that no such material or substance is present on or in the subject property or in such proximity thereto that it would cause a loss in value. The consultant assumes no responsibility for the presence of any such substance or material on or in the subject property, nor for any expertise or engineering knowledge required to discover the presence of such substance or material. Unless otherwise stated, this report assumes the subject property is in compliance with all federal, state and local environmental laws, regulations and rules. Zoning and Land Use - Unless otherwise stated, the projections were formulated assuming the hotel to be in full compliance with all applicable zoning and land use regulations and restrictions. Licenses and Permits - Unless otherwise stated, the property is assumed to have all required licenses, permits, certificates, consents or other legislative and/or administrative authority from any local, state or national government or private entity or organization have been or can be obtained or renewed for any use on which the value estimate contained in this report is based. Engineering Survey - No engineering survey has been made by the consultant. Except as specifically stated, data relative to size and area of the subject property was taken from sources considered reliable and no encroachment of the subject property is considered to exist. Subsurface Rights - No opinion is expressed as to the value of subsurface oil, gas or mineral rights or whether the property is subject to surface entry for the exploration or removal of such materials, except as is expressly stated. Maps, Plats and Exhibits - Maps, plats and exhibits included in this report are for illustration only to serve as an aid in visualizing matters discussed within the report. They should not be considered as surveys or relied upon for any other purpose, nor should they be removed from, reproduced or used apart from the report. 22 STATEMENT OF ASSUMPTIONS AND LIMITING CONDITIONS (continued) Legal Matters - No opinion is intended to be expressed for matters which require legal expertise or specialized investigation or knowledge beyond that customarily employed by real estate consultants. Right Of Publication - Possession of this report, or a copy of it, does not carry with it the right of publication. Without the written consent of the consultant, this report may not be used for any purpose by any person other than the party to whom it is addressed. In any event, this report may be used only with proper written qualification and only in its entirety for its stated purpose. Testimony in Court - Testimony or attendance in court or at any other hearing is not required by reason of rendering this appraisal, unless such arrangements are made a reasonable time in advance of said hearing. Further, unless otherwise indicated, separate arrangements shall be made concerning compensation for the consultant's time to prepare for and attend any such hearing. Archeological Significance- No investigation has been made by the consultant and no information has been provided to the consultant regarding potential archeological significance of the subject property or any portion thereof. This report assumes no portion of the subject property has archeological significance. Compliance With the American Disabilities Act - The Americans with Disabilities Act ("ADA") became effective January 26, 1992. We assumed that the property will be in direct compliance with the various detailed requirements of the ADA. Definitions and Assumptions -The definitions and assumptions upon which our analyses, opinions and conclusions are based are set forth in appropriate sections of this report and are to be part of these general assumptions as if included here in their entirety. Dissemination of Material - Neither all nor any part of the contents of this report shall be disseminated to the general public through advertising or sales media, public relations media, news media or other public means of communication without the prior written consent and approval of the consultant(s). Distribution and Liability to Third Parties - The party for whom this report was prepared may distribute copies of this appraisal report only in its entirety to such third parties as may be selected by the party for whom this report was prepared; however, portions of this report shall not be given to third parties without our written consent. Liability to third parties will not be accepted. Use in Offering Materials - This report, including all cash flow forecasts, market surveys and related data, conclusions, exhibits and supporting documentation, may not be reproduced or references made to the report or to PKF Consulting in any sale offering, prospectus, public or private placement memorandum, proxy statement or other document ("Offering Material") in connection with a merger, liquidation or other corporate transaction unless PKF Consulting has approved in writing the text of any such reference or reproduction prior to the distribution and filing thereof. Limits to Liability - PKF Consulting cannot be held liable in any cause of action resulting in litigation for any dollar amount which exceeds the total fees collected from this individual engagement. Legal Expenses - Any legal expenses incurred in defending or representing ourselves concerning this assignment will be the responsibility of the client. 23 L Sutherland Talla Hospitality Copyright 2000 All rights reserved 4500 Campus Dr., Suite 500, Newport Beach, California 92660 Marina Park City of Newport Beach Request for Proposals Additional Information .July 17, 2000 Sharon Z. Wood Assistant City Manager City of Newport Beach 3300 Newport Boulevard Newport Beach, California 92663-3S54 Re: Marina Park Dear [V1s. Wood: Terra Vista Management is pleased to submit the following information, Which you requested in your letter dated May 31, 2000, relative to the Marina Park RFP. A. Identification Name of Development Entity: Terra Vista Management, in association with the Marina Park Homeowner Association and its residents. Ownership Structure: Terra Vista Management Is an S-Corporation Marina Park Homeowner Association is a Non-profit Corporation Developer's Team: President of Terra Vista Management -Michael Gelfand Director of Finance of Terra Vista Management -Richard Newman, CPA Architectural -Timothy Rhoads Associates, Newport Beach, California Homeowner Association President -Stewart Berkshire Marina Park City of Newport Beach Request for Proposals Additional Information Project Manager: Michael Gelfand (858) 581-6860 Operator: Terra Vista Management and Michael Gelfand Development Project We Are Proud Of: De Anza Bayside Village, also in Newport Beach, is a 270-space mobile home community and 220-slip marina. Terra Vista Management began operating this community in 1971, subject to a leasehold. In 1997, the land was purchased out Of bankruptcy estate involving the Bayside Land Company, an entity owned by several residents of the community. Additionally, Terra Vista is currently exploring options for development of a five -acre parcel of land on this property currently used for storage. Familiarity With Tidelands Requirements: Terra Vista Management operates three properties on Mission Bav in San Diego, California. The properties were ()-iven to the City of San Diego as part of tidelands grant, and as such, are subject to all of the State of California Tidelands requirements. Terra Vista 1Vlanagement and its affiliates have conscientiously managed these properties within those boundaries for over 10 years. 13. Project Description: ( H'/lere applicable, the cllscu.4"S'ion t/I(lt /b/lows 11111 reference .41terllcltily I unit ; Ilternutive ', as de.ycrihccl helot,, ill project dc>scription). Pat -eel Sizes: The parcel size ofalternative i is 4.27 acres. The parcel size of alternative 2 is 6.2 1 acres. Marina Park City of Newport Beach Request for Proposals Additional Information Project Description: Alternative 1 calls for the retention of the 58-space mobile home community, maintaining the existing view corridors, with aesthetic enhancement, public access, and recreational opportunities immediately surrounding Marina Park. Plans include: • A landscaped entrance with new trees and block planters • Architectural and color standards and landscape height and amount limitations for all home site remodels and improvements. The standards for the homes could have door and window treatments featuring trellises, planter boxes, pot shelves and awnings. The RFP proposes the upgrades to individual homes as voluntary for the homeowners, however, if mandatory aesthetic upgrades are a condition of approval for the new lease, we are open to this possibility. • In addition to the existin` easy public access and parking currently existing on the west side of the mobile home park, improved beach access along the east side of the property could be added. An arbor could be constructed over the existing pathway to the beach, with flowering vines. Signage would direct the public to parking and additional beach access. Lower walls for bench seating could be constructed. • Over 40 new metered public parking spaces could be created, including 30 stalls Ior joint use with the American Legion, 4 at Balboa Boulevard and 6-8 at the Balboa and 18'" Street lot • Enlargement of the exlstln`- American Legion bathroom to provide public use On one side and private American Legion use on the other • Relocation of the children's play area to the currently unused American Legion barbecue area • Swim platform added to the existing swimming area at 18"' Street • Access to the Marina Park bathroom and showers from the tennis courts Alternative 2 calls for everything described in alternative 1 and, in addition, the re -orientation of the 4 tennis courts, and, if the City saw tit, the addition of 12 mobile ]ionic sites on the space currently occupied by the city Marina Park City of Newport Beach Request for Proposals Additional Information maintenance building and the Girl Scout House. This would provide additional rent to the City from Terra Vista Management. Our proposal is proven, and well planned, but flexible. We desire to enhance the current use of the property. This can be accomplished by either of the two alternatives described above, and we are open to discussing any kind of reasonable adjustments to the alternatives that will be mutually beneficial. Projected Retail Sales, Transient Occupancy and Property Tar For the Nett Three Years: There are no projected retail sales, transient occupancy taxes or property taxes included in this proposal. However, approximately $129,000 is projected over the next three years in fees payable to the City as resales occur in the community. Additionally, it is contemplated that the 40 new metered parkin~ stalls will provide a significant amount of revenue to the city (also not included in the enclosed projections). Property taxes, upon execution of the proposed new lease, projected over the next three years Would be a total of approximately $150,000. Cost and Revenue Pro forma: The cost of Alternative i is approximately $25,000 to Terra Vista Management. Residents ofthe park would be responsible for enhancements to their individual home sites. The ,$25,000 would pay for the aesthetic improvements contained in Alternative 1. The cost of Alternative 2 is $400,000. The $25,000 costs of Alternative 1 would still apply. The additional costs are to pay $170,000 to demolish and construct four tennis courts, $120,000 for the cost of developing 12 home sites, and $85,000 for additional community aesthetics. Under this alternative, Terra Vista Management would finance and manage the construction project, following city approval of the plan, and subsequently 4 Marina Park City of Newport Beach Request for Proposals Additional Information request a rent credit equal to $400, 000 plus interest over five years following construction, to recoup the expenditures. The economics of the operations of Alternative 1 and 2 provide projected rent to the city of $1 1,245,368 and $12,036,680 (before rent credits), respectively, over the 10 years immediately following execution of the lease. The annual lease payment total, guaranteed by Tena Vista Management, would be the greater of 75`% of the property's gross income or $1,000,000, adjusted annually by CPI. 5 rl O M •J r; OC O O O ca (U r^ r oC In O oc y _ T - C f JC C 1?' O ✓' c IG r 1 C C ram` i c r T Oc rr, ,.'nl. G1 f•, — — > G L In ci T rl c rl > oc C — r l r i •,r✓ -Y• — L J y rr1 .c C _ _ _ 'r, r�� fri � c Oc• h C �.. J �fl IG r 1 't ^ r1 U T — oc oc • - h h , fry rt 1, 01, C y ✓ o- N re) c!- G1 'n r 1 r^ I rr I Incc G r- :lj 'U �!•, h r I -r 'r, 'r, r I III V', > J ell y m v 'r rt P r^ rl C �. �. �n y` en `G L Or _ or-C j yJ Ic In In r1c OJ rI h r 'n 3E Ic Y Ic- - ^ :J J� � rl N � J ✓ V . �J U J J � ^ � - - G .r✓_, � — — _ � „ .ram.. :D lu :J — rl rl M •'�' — rl In .7. c0 0. O O j .-t. 7 OC Y Oc �O C) �C -r ° � ti — C ri rl rn C, Oc Oc r i v rl en 0 lu r1 r G� _ � — — d• � rI — CT — � r n L JV •'U r .0 C, 'r, r I• r r .c O 'n c`c,• d• C — rl �C `I r rJ �c r 1 — r1 rr1 c y r_ .0 �c r- Q r (71 T :� O —•, rt 'r, mot, 'n Ic al G M C15 tiv 'r� r I h- C• v-� 1� �C •-. C C y U 'r, ct IJ o✓ C Irl C 'q Ol di Cc in P Ic f I Cl-^_+ O oc OC — OU �C .�' CT M r1 �C rl Chi n r, rr1Gr- r 1 f5 Ic cr, ti InrC -t -f ti Ic 17 Cl lu r^1 Ol-C O r 1 ^I •= rr) r, G v n r 1 -Y C r — OC in rl �C r 1 Q� h• h- i — - v rl v or .0 G� r 1 C\ 'U J 1 � y O r• rrl ..'1 t` 'r t` "-' C — v CZ _ � C �C 'n r I h• Y r I M 'r, 1� .0 pC CT = = '� C. � � OC to � i 1J 1J 'U rJ C "h CT rr1 OCcc - - _ oc �In r in •n ,L r 1 y r l = '7 r1 M h- • r� 7 r l r 1 � rr� -Y• " t' r�1 O n nJ J �G -Y r'1 h- OC u r�^i i M �C r l r l r l 'r, r l 1 » v ^ ON — � = rrl rrl rr', __ ^J •� C h v h� r 1 r` I 'r, OC Oj' _ J L51 IU oe J _ rr r, r I M �• 'r, �C rl Marina Park City of Newport Beach Request for Proposals Additional Information Comparables to Support Project Pro forma, Market Feasibility Analysis: The forecasts presented in this document and the original RFP are based upon the operations at De Anza Bayside Village Mobile Home Park, Newport Beach, California. Revenues and expenses are adjusted for the di fference in the number of home sites in each park. Additionally, through their homeowner association, a majority of the current tenants of Marina Park have agreed to these lease rates and our management of the community. Finally, as support for the monthly ]case rates, we offer Addendum 1, a current rent study performed by JLT Associates, which suggests a current lease rate range of $1,60042,300. This is a very supportable range that Should be acceptable to the Marina Park homeowners and the City. Our projections use the lower end of the ranges suggested by the study for conservatism, and because Lido and Cannery, the two comparative properties which drove the higher end of the lease ranges are currently in lease up. It is unknown whether or not the high end can be achieved. Leases would start at prevailing market rates and adjust by CPI each year thereafter. Development Schedule: Alternative 1-Work would commence immediately upon City approval of the concept and design, and conservatively, would be completed within 4 months of the start ol�construction. Alternative 2-Again, work could start immediately upon the approval ofthe City. It could be completed within 9 months of the start of construction. Please note that the development timeframe does not effect the immediate 1,000,000 annual guarantee. Financing Plan, Sources of Equity, Debt Financing and Sources: 8 Marina Park City of Newport Beach Request for Proposals Additional Information Terra Vista Management has an existing $500,000 line of credit, as well as excellent banking relationships, which could be used for either alternative. We see this as another strength of this proposal, particularly in light of the difficult, equity driven hotel -financing market. Alternative 2 would initially be funded by Terra Vista Management, and subsequently require rent credits repaid from the City to recoup the outlay over five (5), years. The City would be compensated for this rent credit through the increased rents of the extra mobile home spaces. Regarding the upgrades to individual homes, should the City decide that aesthetic improvement is a condition of the new lease, Terra Vista is committed to providing and/or working with homeowners in obtaining all necessary financing. Tenant Commitments/Letters of Interest: Addendum 8 of the original RFP included a letter from Stewart Berkshire, the President of the Marina Park Homeowner Association, which stated in the first paragraph that the contents and elements of the ; Terra Vista Management RFP Submittal are known and accepted by the residents. C. Ground Lease/Sale Terms Requested Ground Lease Terms Alternative 1-Terra Vista Management proposes a minimum 35-year ground lease witli rent equal to 75'% of 11 gross income or minimum annual payments of $1,000,000, adjusted for CPl changes each year. Additionally, the Citv would be entitled to 5' of the gross sales price of any home sale. Our projection indicates that this additional lease amount would be $58,000 in the first year of the lease, however, this cannot be guaranteed. Alternative 2-V11-tually the same as alternative 1. The difference would be that with more home sites, more revenue would inure to the City over the long run. Rent credits from the City for 5 years to repay the funds expended by Terra Vista Management on public facilities would be required under this alternative. 9 Marina Park City of Newport Beach Request for Proposals Additional information Form of Lease Guarantees, Need for Subordination There is no requirement for subordination. This is another strength of our proposal. Terra Vista may, it necessary, ask the City to approve the use of it's lease to secure financing used for the property improvements described in Alternative 2. Pre -Development Timing Both alternatives provide increased revenues flowing, to the city immediately, with no interruption. Alternative 2 offers the City additional revenue front the leasing of additional home sites. This additional revenue is conservatively projected to begin after one year. Although not presented this way, it is possible that this tinletrame could be as short as 120 days. Pre -leasing needs and marketing time frames None. As the operator- of another Newport Beach mobile home community, we feel very strongly that we present the only proposal that provides a high degree of certainty of significantly increased revenues to the Citv. While other proposals may suggest higher revenues several years out, subject to uncertainty and requiring subordination, this proposal hits the ground rullnlllg with a S1,000,000 annual guarantee beginning inlnlediately, and the likelihood ofmore. Furthermore, maintaining the current mobile home community would foster other goals of the City of Newport Beach, such as affordable housing, and avoid asking the existing tenants to relocate. We are willing to be extremely flexible in the structuring or renegotiation ol' our- proposal. We believe that through sincere discussions we can satisfy all of the City's vital needs, while continuing to maintain and enhance this important part of the Newport Beach community. 10 Marina Park City of Newport Beach RCquCst for Proposals Additional Information Sincerely, Michael D. ncl President Ten -a Vista Mana`7ement Addendum JLT & ASSOCIATES A Real Estate Market Research Company July 7, 2000 Rick Newman, Director of Finance Terra Vista Management, Inc. 2727 De Anza Road San Diego, CA 92109 Dear Rick: We are pleased to submit our rent study report of ocean and marina exposure manufactured home communities located between Malibu and San Clemente, California. The fieldwork was conducted between June 20 and June 23, 2000. I look forward to speaking with you to review the report and answer any questions you may have. Sincerely, Enc. iwl Lower Honoapiilani Road #107 Lahaina, HI 96761 (808) 283-3380 Fax (803) 669-5517 MARINA PARK MARKET RENT SURVEY JUNE 2000 I. OVERVIEW: Between June 20 and June 23, 2000, we contacted 16 ocean and marina exposure manufactured home communities located between Malibu and San Clemente, California. A detailed summary of each community including type of water orientation, amenities, latest rent increase information and monthly homesite rents for existing and new residents is included as Exhibit A. A detailed summary of each community's rent structure including "Market Rents" is included as Exhibit B. Exhibit C is an analysis of "Market Rents". We visited the communities in June 1996. II. MANUFACTURED HOME COMMUNITIES: Information and comments about each community contacted is presented in the following paragraphs. Marina Park, the subject property, is a 60 site, 98% occupied (including two management homes, the city owns one home that is not occupied) "all ages" community located on Balboa Peninsula on Newport Bay. The community, which is extremely dense, is owned by the City of Newport Beach. The land lease expired March 31, 2000. A two year extension thru March 31, 2002 was granted. All homes are multi -section. The community is located on Newport Bay and offers unobstructed water views. A laundry room and beach are the only amenities. The homes are aligned in three rows - Bay View, Partial View and Third Row View. Monthly rents are $1,129, $853 and $798, respectively and include water, sewer and trash removal services. The residents pay a flat fee of $22 per month for natural gas. Rents are artificially low due to CPI based rent increases coupled with no increase to "market rent" when a home was sold. The city of Newport Beach is evaluating alternative uses submitted by local companies for this site. Bayside Village is a 270 site, "55+" community located on Pacific Coast Highway in Newport Beach. 259 homesites (96%) are occupied. Amenities include two clubhouses with multi -purpose rooms, billiards room in the main clubhouse, shuffleboard courts, two swimming pools and jacuz- zis, two laundry rooms, an RV storage area and a boat marina. Annual rent increases are stipu- lated in various long term rental agreements entered into between the owners and the residents. The leases expire at various times between 2009 and 2026 and have a variety of increase clauses including CPI, CPI plus 2% , CPI with a minimum 4% increase and a maximum 8% increase and CPI with a minimum 4% increase and no "cap". Homesites are classified into five (5) categories based upon location. As of June 2000, the monthly market rents charged incoming residents are: Waterfront - $2,200 (up 4.8% over 19999 Water View - $1,650 (up 6.5% over 19999 Bluff View - $1,275 (up 6.7% over 1999) Interior North - $1,250 (up 6.4% over 1999) South Side - $1,000 (up 8.8% over 1999). Water, sewer and trash removal services are included in the rent. 1 MAWNA PARK MARKET RENT SURVEY JUNE 2000 As of June 2000, the market rents for homesites occupied with new, two story homes are: Waterfront - $2,500 (down 3.8% over 1999) Water View - $1,950 (up 5.4% over 1999) Bluff View - $1,395 (up 5.3% over 1999) Interior North - $1,475 (up 5.7% over 1999) South Side - $1,300 (up 20.9% over 1999). Cannery Village a 34 site, "all ages" community, was purchased by Carlsberg Management Company. All the homes were removed. The infrastructure was completely upgraded. The community is scheduled to reopen August 1. Carlsberg plans to offer two story homes ranging in size from 1,100 to 1,400 square feet priced between $269,900 and $374,900. Market rents are projected at $3,250 on the water, $2,200 for perimeter sites and $1,800 for interior sites. No amenities are planned. Capistrano Shores is a 90 site, "all ages" community located directly on the Pacific Ocean in San Clemente. This community has superior water orientation and no amenities except a modest clubhouse. The monthly rent for homesites north of the clubhouse is $2,100 and the monthly rent for homesites south of the clubhouse is $2,000. Rents include water, sewer and trash removal services. Rents increased $150 per month in June 2000. The current market rent for new residents is the same as existing residents. Based on the location and water orientation, we would estimate that the current "market rents" of $2,000 to $2,100 are at least $1,000 to $1,500 under market. Dana Point Marina Mobile Home Park is an 81 site, 100% occupied "all ages" community located directly across the street from Doheney State Beach Park in Dana Point. This community has inferior water orientation, amenities, homes and homesites. The homesite rent for existing and new residents is $790 per month, an increase of $50 over 1999. Water, sewer and trash removal services are separately billed and average $47 per month. This community is not comparable with the subject. El Morro Mobile Home Park is a 296 site, 100% occupied "all ages" community located on both sides of Pacific Coast Highway in Laguna Beach. 73 homesites are directly on the Pacific Ocean. Some of the sites on the east side of PCH offer spectacular long range views of the Pacific Ocean. This community is owned by the California Parks Department and was scheduled to close in 1999. The residents have been granted a five (5) year lease extension. This community has no amenities. Homesites are covered by assumable leases that expire in December 2004 and are classified into three categories: Ocean, Valley and Terrace (view). Monthly rents range from $300 to $1,052, are significantly under market and increased $3 to $15 in 2000. Since the long term leases are assumable, monthly rents are severely "under market". The assumable portion of the long term leases creates a situation whereby the rent levels at El Morro Mobile Home Park are not comparable to Marina Park. Consequently, this community cannot be compared to the subject. 2 MARINA PARK MARKET RENT SURVEY JUNE 2000 Huntington by the Sea is a 306 site, 100% occupied "all ages" community located two blocks east of the Pacific Ocean in Huntington Beach. The water orientation and location are vastly inferior to Marina Park. Market rents range from $750 to $875 and include sewer services. Laguna Terrace is a 156 site, 100% occupied "all ages" community located on the inland (east) side of Pacific Coast Highway in Laguna Beach. The community is built on a hillside. Some homesites have superior long range ocean views. Some of the homes are newer. Homesites are classified into two categories - "Canyon " and "View". Market rents are $1,140 to $1,360 for "Canyon" sites, $1,140 to $1,660 for "View" locations and $1,900 to $2,090 for two `Premium View" sites. Market rents increased 5% to 30% over 1999. Lido Peninsula is a 214 site "all ages" community located on Lido Peninsula, a prestigious South- ern California location. The occupancy rate is 85%. Most of the homesites are 30' x 35'. During the past three years, the owners have upgraded the infrastructures and added a recreation area that includes a swimming pool and jacuzzi. In addition, the owners offer storage units for rent. During this time period, the owners have been selling two story, 1,000 square foot cottage -style homes. Three years ago, these homes ranged in price from the low $80's to the mid $90's. Today, new homes start at $139,000 and resales start at $157,000. The owners are presently marketing a two story 1,385 square foot home with one car garage from $184,000 and a two story 1,469 square foot home with a one car garage from $189,000. The owners also rent 15 older homes for $1,100 to $3,200 per month. The owners have established over sixty (60) different market rents. Market rents are based on location, view and proximity to the water. Market rents for an interior 30' x 35' homesite range from $1,050 to $1,300 and market rents for an interior 30' x 35' corner site range from $1,200 to $1,500. The market rent for homesites with bay views are: • premium sites along Anchorage Way - $3,200. New 1,400 to 1,500 square foot homes have been placed on these sites. ♦ sites facing a private beach - $2,750, and • sites facing the water along Channel Road - $2,350 to $2,550 (corner site is $3,000). Alarina Park is very close to Lido Peninsula and can be seen from Lido's private beach. 3 MARINA PARK MARKET RENT SURVEY JUNE 2000 Marineland Mobile Home Park is an older, 62 site "all ages" community located in Hermosa Beach approximately 6 blocks from the Pacific Ocean. The occupancy rate is 94%. A laundry room is the only amenity. Market rents are $700 for a single section homesite and $765 for a multi -section homesite. The rent includes water, sewer and trash removal services. This "trailer park" is inferior to Marina Park. Pacific Mobile Home Park is a 264 site, 100% occupied "all ages" community located two blocks from the Pacific Ocean in Huntington Beach. Most of the homesites are small. The homes (short, 12' wide) and amenities are inferior. The market rent is $500, a $50 increase over 1999 and includes water, sewer and trash removal services. This community is not comparable to Marina Park Palisades Bowl is a slightly terraced 168 site "all ages" community located on the inland (east) side of Pacific Coast Highway in Pacific Palisades. It is adjacent to Tahitian Terrace Mobile Home Park. The occupancy rate is 100%. Homes and homesites are very small. Amenities include a modest clubhouse, putting green, laundry room and swimming pool. Some of the homes have superior long range ocean views. Monthly rents range from $400 to $850 and are controlled by the City of Los Angeles Rent Control Ordinance. Rents can only increase 10% on resale and are therefore well under market. This outside force (rent control) creates a situation that prohibits a true rent comparison. Consequently, the rents at Palisades Bowl cannot be compared to the rents at Marina Park. Palos Verdes Shores is a 242 site, terraced "55+" community overlooking the Pacific Ocean in San Pedro. The occupancy rate is 100%. Most of the homes and homesites, all of the amenities and long range ocean views are superior to Marina Park. Homesites are classified into 5 categories based upon location. Rents are controlled by the City of Los Angeles Rent Control Ordinance. In 1992, the community owners elected to reduce rents below rent control levels and established "caps" for the five categories. The "capped" rents increased $35 in 2000 as follows: View - $1,085, View - $1,010, View $985, Non View $905 and Non View $855. Since 1998, the owners have collected the 10% increase upon the sale of a home as allowed by the Rent Control Ordinance. During 1996 and 1997, the ownership group increased rents 7% upon resale. Prior to 1996, the owners waived increases on turnover. Because of the owners self imposed rent controls and the Los Angeles County Rent Control Ordinance, the rents at Palos Verdes Shores cannot be compared to the rents at Marina Park Paradise Cove is a 257 site, 100% occupied, "all ages" community located on a hillside overlook- ing the Pacific Ocean in Malibu. Most of the homes are inferior to those located in Marina Park. Some of the homesites offer spectacular long range views of the Pacific Ocean. Monthly rents range from $358 to $1,200 and include water, sewer and trash removal services. Annual rent increases are controlled by the Malibu Rent Control Ordinance. Rents can only increase 15% on resale and are therefore well under market. This outside force (rent control) creates a situation that prohibits a true rent comparison. Consequently, the rents at Paradise Cove cannot be compared to the rents at Marina Park. 4 MARINA PARK MARKET RENT SURVEY JUNE 2000 Point Dume' Club of Malibu is a 297 site, 100% occupied, terraced "all ages" community located on a hillside overlooking the Pacific Ocean in Malibu. Some of the homesites offer spectacular long range views of the Pacific Ocean. The amenities, homes, homesites and ocean views are superior to Marina Park. Monthly rents range from $700 to $2,000 and include sewer services. Annual rent increases are controlled by the Malibu Rent Control Ordinance. Rents can only increase 1 S% on resale and are therefore well under market. This outside force (rent control) creates a situation that prohibits a true rent comparison. Consequently, the rents at Point Dume' Club of Malibu cannot be compared to the rents at Marina Park Tahitian Terrace is a 158 site, terraced "55+" community located on the east (inland) side of Pacific Coast Highway in Pacific Palisades. It is adjacent to Palisades Bowl Mobile Home Park. Some of the homes have superior long range ocean views. Monthly rents range from $416 to $1,062 and are controlled by the City of Los Angeles Rent Control Ordinance. Rents can only increase 10% on resale and are therefore well under market. This outside force (rent control) creates a situation that prohibits a true rent comparison. Consequently, the rents at Tahitian Terrace cannot be compared to the rents at Marina Park. III. ORANGE COUNTY HOUSING MARKET: The headline in a June 13, 2000 Los Angeles Times article reads, "Southland Housing Sales Jump Suddenly in May. " The article, a copy of which is included as Exhibit D, indicates that the median price of $268,000 represents the seventh time in the last year that the median home price has hit a record. "It seems that higher mortgage rates aren't slowing demand so much as creating a sense of urgency in buyers who want to get in before rates get even higher." A similar article entitled "Feeling Right at Home" appeared in the June 13, 2000 Orange Country Register. This article is included as Exhibit E. IV. CONCLUSION: Based on the findings during our fieldwork, we recommend the following market rent ranges for Marina Park: Waterfront $2,300 - $3,000 Partial View (Row 2) $1, 800 - $2,100 Partial View (Row 3) $1, 600 - $1, 800 Waterfront Sites: The market rents at Bayside Village, Capistrano Shores, Lido and Cannery Village can be used to substantiate the Marina Park "Waterfront" market rents. Waterfront sites in Bayside Village rent for $2,200. Marina Park's water orientation is superior to Bayside's. The current market rents of $2,000 and $2,100 at Capistrano Shores are at least $1,000 to $1,500 under market for an ocean front location. The community owner has chosen to keep the rents artificially low. In Lido, premium bay view sites are $3,200 while sites facing a private beach rent for $2,750. Proposed waterfront rents in Cannery Village are $3,250. 5 MAMMA PARK MARKET RENT S URVEY JUNE 2000 Partial View (Row 2) Sites: The market rents at Bayside Village, Capistrano Shores, Lido and Cannery Village can be used to substantiate the Marina Park "Partial View (Row 2) sites" market rents. Water view sites in Bayside Village rent for $1,650. Marina Park's water orientation is superior to Bayside's. The current market rents of $2,000 and $2,100 at Capistrano Shores is at least $1,000 to $1,500 under market for an ocean front location. The community owner has chosen to keep the rents artificially low. In Lido, sites with a channel view range from $2,350 to $2,550 ($3,000 on the corner). Proposed perimeter site rents in Cannery Village are $2,200. Partial View (Row 3) Sites: The market rents at Lido and Cannery Village can be used to substantiate the Marina Park "Partial View (Row 3) sites" market rents. In Lido, small interior sites with no view range from $1,200 to $1,500. Proposed interior site rents in Cannery Village are $1,800. Con MANUFACTURED HOME COMMUNITY RENT SURVEY FOR MARINA PARK - JUNE 2000 Exhibit # OF COMMUNITY LAST RENT MONTHLY W/S/r ADJUSTED MOVE -IN COMMUNITY HOMESITES AMENITIES INCREASE HOMESITE RENT PAID BY T RESIDENTS HOMESITE RENT* MARKET RENT SERVICE Bayside Village TOTAL: Clubhouses - 2 DATE: TYPE: 300 East Coast Highway 270 Billiard Room January 2000 1 Low 1 Included $742 Effective 10/27/99 Newport Beach, CA 92660 Shuffleboard Courts 2 High 2 in the rent $2,200 Waterfront - $2,200 949-673-1331 OCCUPIED: Activities 3 Average 3 Water View - $1,650 Type of Community: 55+ 259 Swimming Pools - 2 AMOUNT: 4 4 $1,000 Bluff View - $1,275 Jacuzzi - 2 Various 5 5 Interior North - $1,250 Water Orientation % OCCUPIED: Exercise Room CPI AMOUNT VALUE: South Side - $1,000 Newport Beach Back Bay 96% Laundry Rooms - 2 CPI +2% 1 $742 1 RV Storage CPI minimum 4% 2 $2,200 2 Market Two Story Homes Marina maximum 8% 3 $1,000 3 Lease 10 years Site Rents 10/27/99 Waterfront - $2,500 Comparison to Subject Beach CPI minimum 4% 4 4 (or less) Water View - $1,950 Superior amenities and Leases expire 5 Supplied by 5 CPI Bluff View - $1,475 inferior water orientation at various times Patty Pemper minimum 4% Interior North - $1,450 Long term leases from 2009 from rent roll South Side - $1,300 to 2026 Cannery Village TOTAL: None Planned DATE: TYPE: SERVICE. 700 Lido Park Drive 34 N/A 1 Interior 1 Water $1,833 Not Applicable Newport Beach, CA 9263 2 Perimeter 2 Sewer $2,233 949-723-5830 OCCUPIED: Carlsberg Management 3 On Channel 3 $3,283 Type of Community: All Ages 0 Company purchased AMOUNT: 4 4 the ground lease and N/A 5 5 The new homes will Water Orientation % OCCUPIED: removed all of the older AMOUNT: VALUE, be 2 story units Newport Bay Rhine Channel 0% homes & upgraded the 1 $1,800 1 $23 priced from utility systems. They Plan to offer 2 $2,200 2 $10 $269,900 to plan to open August 1. 5 to 20 year 3 $3,250 3 $374,900 Comparison to Subject They plan to sell 2 leases. Annual 4 4 Slightly inferior water orientation story homes with 1,100 increases 5 5 to 1,400 square feet CPI, Minimum 5% Proposed Rents from $269,900 DONE to $374,900 * Adjusted for Services Included in Rent MANUFACTURED HOME COMMUNITY RENT SURVEY FOR MARINA PARK - JUNE 2000 Exhibit A COMMUNITY # OF HOMESITES COMMUNITY AMENITIES LAST RENT INCREASE MONTHLY HOMESITE RENT W/S/T PAID BY RESIDENTS ADJUSTED HOMESITE RENT* MOVE -IN MARKET RENT Capistrano Shores TOTAL: Modest Clubhouse DATE, TYPE: SERVICE: 1880 N. El Camino Real 90 June 2000 1 North 1 Included in $2,100 Same San Clemente, CA 2 South 2 the rent $2,000 as existing 949-492-6616 OCCUPIED: 3 (North & South 3 resident Type of Community: All Ages 90 AMOUNT: 4 of clubhouse) 4 $150 5 5 Water Orientation % OCCUPIED: AMOUNT: VALUE: 100% Directly on the Pacific Ocean 1 $2,100 1 Previous 2 $2,000 2 DONE increase was 3 3 Comparison to Subject January1999 4 4 Superior water orientation $100 5 5 No leases Dana Point Marina MHP TOTAL: Modest Clubhouse DATE. TYPE: SERVICE. 34202 Del Obispo Road 81 Small Swimming Pool 2000 1 All Homesites 1 Water $837 Same Dana Point, CA 92629 949-496-1372 OCCUPIED: Playground Rolling on anniversary date 2 3 2 Sewer 3 Trash as existing resident Type of Community: All Ages 81 AMOUNT, 4 4 $50 5 5 Water Orientation % OCCUPIED: AMOUNT: VALUE: 100% Across the street from 1 $790 1 $20 Doheney State Beach Park 2 2 $15 3 3 $12 Comparison to Subject 4 4 Inferior water orientation and 5 5 inferior quality homes DONE Long term leases * Adjusted for Services Included in Rent MANUFACTURED HOME COMMUNITY RENT SURVEY FOR MARINA PARK - JUNE 2000 Exhibit A # OF COMMUNITY LAST RENT MONTHLY HOMESITE W/S/T ADJUSTED MOVE -IN COMMUNITY HOMESITES AMENITIES INCREASE RENT PAID BY RESIDENTS HOMESITE RENT* MARKET RENT E/ Morro MHP TOTAL: None DATE; TYPE: SEA $650 - $803 Same 8811 N. Coast Highway 296 January 2000 1 Ocean 1 Included in Laguna Beach, CA 92651 2 Valley 2 rent $300 - $485 949-494-7581 OCCUPIED: Type of Community: All Ages 296 Terrace $625 - $1,052 as existing resident AMOUNT: 4 CPI - $3 - $15 5 5 Water Orientation % OCCUPIED: AMOUNT.• 73 homes on Pacific Ocean 100% 20 year leases 1 $650 - $803 VALUE: 1 Also view and non -view sites expired 12/99; 2 $300 - $485 2 park owned by 3 $625 - $1,052 3 Comparison to Subject CA Parks Dept. 4 4 Superior water orientation DONE Scheduled to 5 5 close and be Community was scheduled to close in 1999. converted to They have been granted a 5 year extension to 2004. beach park. Huntington by the Sea TOTAL: Clubhouse DATE: TYPE: SERVICE: 21851 Newland Avenue 306 Billiard Room Rolling on 1 Low 1 Water $781 Market rents vary Huntington Beach, CA Library anniversary date 2 High 2 Trash Removal $906 by site and range 714-536-3826 OCCUPIED: Exercise Room 3 Average 3 $791 from $750 to $875 Type of Community: All Ages 306 Swimming Pool AMOUNT: 4 4 Jacuzzi Leases - 3% 5 5 Normally, rents Water Orientation % OCCUPIED: Gated Entrance Month/Month - 5% AMOUNT: VALUE; are increased 3% 2 blocks from the Pacific Ocean 100% Laundry Room 1 $750 1 $15 when a home is RV Storage 2 $875 2 $16 sold 3 $760 3 Comparison to Subject 4 4 Inferior water orientation DONE 5 5 Most existing residents pay Long term leases $750 * Adjusted for Services Included in Rent MANUFACTURED HOME COMMUNITY RENT SURVEY FOR MARINA PARK - JUNE 2000 Exhibit A LAST MONTHLY W/S/T ADJUSTED MOVE -IN # OF COMMUNITY RENT HOMESITE PAID BY HOMESITE MARKET COMMUNITY HOMESITES AMENITIES INCREASE RENT RESIDENTS RENT' RENT 30802 S. Coast Highway 156 Laguna Beach, CA 92651 949-499-3000 OCCUPIED: Type of Community: All Ages 156 Water Orientation % OCCUPIED: Inland side of Pacific Coast 100% Highway Comparison to Subject Inferior homes (some new) Superior amenities DONE Superior long range ocean views Long term leases Billiard Room Rolling on 1 Low Swimming Pool anniversary date 2 High Jacuzzi 3 Average Laundry Room AMOUNT. 4 Various 5 CPI (most) AMOUNT.• CPI minimum 4 1 $756 8% (old leases) 2 $1,645 30 year leases 3 $1,010 on new homes 4 5 1 Water $800 - 'Puvv Canyon $1,140 - $1,361 2 Sewer $1,689 View Section "no view" 3 $1,054 $1,060 4 View $1,140 - $1,760 5 Premium View VALUE: $1,900 - $2,090 1 $20 2 $24 new move -in rents 3 vary by location and 4 quality of ocean view 5 Lido Peninsula TOTAL: Swimming Pool DATE: TYPE: SERVO Market Rents 710 Lido Park Drive 214 Jacuzzi Rolling on 1 Low 1 Included in $809 Day view Sites Newport Beach, CA 92663 Rents Storage Units anniversary date 2 High 2 the rent. $3,200 Premium Anchorage Way 949-673-6030 OCCUPIED: 6' x 8' $75 3 Average 3 Meter water $1,340 $3,200 Type of Community: All Ages 182 8' x 12' $150 AMOUNT: 4 4 on new homes approximately 8 sites CPI, no minimum 5 5 and resales. Ong Private Bed Water Orientation % OCCUPIED: cannot be used. maximum of 6% AMOUNT. VALUE: $2,750 Located on Lido Peninsula 85% 1 $809 1 Water & Sewer Prestigious Location New Homes Existing 2 $3,200 2 runs $20 - $35 AL4ng-Channel Road Comparison to Subject 1,385 square foot Residents 3 $1,340 3 per month $2,350 - $2,550 major upgrading of homes two story homes with a - LT leases 4 4 based on Corner - $3.000 New homes superior 1 car garage start 12/93 to 2016. 5 5 usage Interior Sites mostly 30' x 35' spaces at $184,000 Assumable at Leases provide for a market Std. $1,050 - $1.300 Similar water orientation market on adjustment (maximum 10%) in Corner $1,200 - $1,500 Long term leases 1,469 square foot resale of home years 2006 and 2011. New Homes two story homes with a I Inttiriit The owners rent 15 older homes 1,000 square foot 1 car garage start Resales Long term leases on new cottage homes: 1,385 - 1,469 Square from $1,100 to 3,200 per month. two story homes at $189,000 1,000 square foot CPI, no floor and capped at 6%. To 2016. Foot 2 Story Homes start at $139,000. two story homes I I $1.585 - $1,685 1,400 to 1,500 square foot homes start at $157,000. Existing residents will have the,. rents The owners have are being placed on adjusted to market over a maximum 5 established over 60 Anchorage Way year period starting in 2003. 1different rents. 4 * Adjusted for Services Included in Rent MANUFACTURED HOME COMMUNITY RENT SURVEY FOR MARINA PARK - JUNE 2000 Exhibit A LAST MONTHLY W/S/T ADJUSTED # OF COMMUNITY RENT HOMESITE PAID BY HOMESITE COMMUNITY HOMESITES AMENITIES INCREASE RENT RESIDENTS RENT` MOVE -IN MARKET RENT Marina Park 1770 Newport Boulevard TOTAL: 60 Laundry Room Beach DATE: October 1999 TYPE: 1 Bay View SERVICE. 1 Included in $1,129 Same as Newport Beach, CA 2 Partial View 2 the rent $853 existing 949-261-6111 (mgmt. co.) OCCUPIED: 3 Partial View 3 $798 resident Type of Community: All Ages 57 AMOUNT: 4 4 2 mgmt homes & 1 city owned CPI - 2.4% 5 5 City is studying Water Orientation % OCCUPIED: AMOUNT. VALUF_ various proposals Balboa Peninsula on 95% 1 $1,129 1 for the community Newport Bay 2 $853 2 submitted by Owned and 3 $798 3 local companies Subject operated by city 4 4 of Newport Residents were 5 5 Residents have Beach. Land granted a two year Plus $22 per offered to double DONE lease expired extension thru month for gas the monthly rent March 31, 2000 March 31, 2002 Marineland MHP TOTAL: Laundry Room DATE: TYPE: SERVICE: 531 Pier Avenue 62 April 2000 1 Low 1 Water $553 Market Rent Hermosa Beach, CA 90254 2 High 2 Sewer $811 Single Section - $700 310-374-6161 Type of Community: All Ages OCCUPIED: 58 AMOUNT, 3 Average 4 3 Trash Removal 4 $706 Multi -Section - $765 $18 5 5 Water Orientation % OCCUPIED: AMOUNT, VALUE: 94% 6 blocks from ocean 1 $525 1 $15 2 $783 2 $7 Comparison to Subject 3 $678 3 $6 "Trailer Park" - vastly inferior 4 4 quality homes and 5 5 vastly inferior water orientation DONE No leases Adjusted for Services Included in Rent MANUFACTURED HOME COMMUNITY RENT SURVEY FOR MARINA PARK - JUNE 2000 Exhibit A COMMUNITY # OF HOMESITES COMMUNITY AMENITIES LAST RENT INCREASE MONTHLY HOMESITE RENT W/S/T PAID BY RESIDENTS ADJUSTED HOMESITE RENT* MOVE -IN MARKET RENT Pacific Mobile Home Park TOTAL: Clubhouse DATE: TYPE, SERVICE: 80 Huntington Street Huntington Beach, CA 714-536-3832 Type of Community: All Ages 264 OCCUPIED: 264 Billiard Room Swimming Pool Jacuzzi April 1998 AMOUNT: 1 Low 2 High 3 Average 4 1 Included in 2 the rent 3 4 $400 $500 $400 $500 All homesites Market rents Water Orientation 2 blocks from ocean % OCCUPIED: Unknown 5 AMOUNT: 1 $400 5 VALUE: 1 increased $50 in 2000 100% No increase 2 $500 2 Comparison to Subject in 2000 3 $400 3 Very small sites, inferior homes 4 4 and water orientation 5 5 Many 12', short single section DONE homes No leases Palisades Bowl TOTAL: Clubhouse DATE: TYPE: SERVICE: 16321 Pacific Coast Highway 168 Putting Green 1999 1 Low 1 Water $422 10% on resale Pacific Palisades, CA 90272 Laundry Room 2 High 2 Sewer $872 as permitted by 310-454-2515 OCCUPIED: Swimming Pool 3 Average 3 $587 rent control Type of Community: All Ages 168 AMOUNT: 4 4 3% 5 5 Water Orientation % OCCUPIED: AMOUNT: VALUE: 100% East side of Pacific 1 $400 1 $10 Coast Highway 2 $850 2 $12 Comparison to Subject 3 $565 3 Very small sites, vastly inferior 4 4 homes, "better" amenities 5 5 Superior long range ocean views DONE LA City Rent Control * Adjusted for Services Included in Rent MANUFACTURED HOME COMMUNITY RENT SURVEY FOR MARINA PARK - JUNE 2000 Exhibit A LAST MONTHLY W/S/T ADJUSTED MOVE-14 # OF COMMUNITY RENT HOMESITE PAID BY HOMESITE MARKET COMMUNITY HOMESITES AMENITIES INCREASE I RENT RESIDENTS RENT• RENT Palos Verdes Shores 2275 West 25th Street TOTAL: 242 Clubhouse Billiard Room DATE: Rolling, most in TYPE: 1 Low SERVICE,• 1 Water $606 San Pedro, CA 90732 Library October 2 High 2 Sewer $1,116 10% on turnover 310-547-4403 Type of Community: 55+ OCCUPIED: 242 Shuffleboard - Indoor Exercise Room AMOUNT. 3 Average 4 3 Trash $945 Maximum rates set Swimming Pool 3% 5 4 5 by parkowner in 1992 "CAPPED Water Orientation %OCCUPIED: Jacuzzi AMOUNT, VALUE: RENTS" 100% Terraced community overlooking 9 Hole Executive Golf 1 $575 1 $15 View -$1,085 the Pacific Ocean Tennis Courts 2 $1,085 2 $4 View - $1,010 Horseshoes 3 $914 3 $12 View- $985 Comparison to Subject Gated Entrance 4 4 Non View -$905 Superior homes, homesites, 5 5 Non View - $855 amenities and long range ocean views DONE "CAPPED RENTS" LA City Rent Control increased $35 in 2000 Paradise Cove TOTAL: Clubhouse DATE: TYPE: SERVICE: 28128 Pacific Coast Highway 257 Swimming Beach Rolling on 1 Low 1 Included in $358 15% on resale Malibu, CA 90265 Pier anniversary date 2 High 2 the rent $1,200 as permitted by 310-457-2511 OCCUPIED: Restaurant 3 Average 3 $614 rent control Type of Community: All Ages 257 Laundry Room AMOUNT, 4 4 Tennis Court 2.3% 5 5 Water Orientation % OCCUPIED: Playground AMOUNT, VALUE: 100% Hillside community overlooking 1 $358 1 the Pacific Ocean 2 $1,200 2 3 $614 3 Comparison to Subject 4 4 Mostly inferior homes, 5 5 superior long range ocean views DONE Malibu Rent Control * Adjusted for Services Included in Rent MANUFACTURED HOME COMMUNITY RENT SURVEY FOR MARINA PARK - JUNE 2000 Exhibit A LAST MONTHLY W/S/T ADJUSTED MOVE -IN # OF COMMUNITY RENT HOMESITE PAID BY HOMESITE MARKET COMMUNITY HOMESITES AMENITIES INCREASE RENT RESIDENTS RENT* RENT Point Dume' Club of Malibu 29500 Heathercliff Road TOTAL: 297 Clubhouse Billiard Room DATE: Rolling on TYPE: 1 Low -SERVICE: 1 Water $725 15% on resale Malibu, CA 90265 Library anniversary date 2 High 2 Trash $2,025 as permitted by 310-457-2111 OCCUPIED: Card Room 3 Average 3 $1,200 rent control Type of Community: All Ages 297 Swimming Pool 4 4 Water Orientation % OCCUPIED: Jacuzzi Tennis Courts AMOUNT: 2.3% 5 AMOUNT: 5 VALUE: 15% on new sublease 100% Terraced community overlooking Gated Entrance 1 $700 1 $20 as permitted by the Pacific Ocean Car Wash 2 $2,000 2 $5 rent control Laundry Room 3 $1,175 3 Over 100 homes Comparison to Subject RV Storage 4 4 Superior homes and amenities, 5 5 are subleased for $2,000 to $2,500 superior long range ocean views DONE per month Malibu Rent Control Tahitian Terrace TOTAL: Clubhouse DATE: TYPE: SERVICE: 16001 Pacific Coast Highway 158 Billiards Room Rolling on 1 Low 1 Water $436 10% on resale Pacific Palisades, CA 90272 Library anniversary date 2 High 2 Sewer $1,082 as permitted by 310-454-7557 OCCUPIED: Swimming Pool 3 Average 3 $695 rent control Type of Community: 55+ 158 Jacuzzi AMOUNT, 4 4 Laundry Room 3% 5 5 Water Orientation % OCCUPIED: AMOUNT: VALUE: 100% Terraced community, east side 1 $416 1 $10 of PCH, overlooking the 2 $1,062 2 $10 Pacific Ocean 3 $675 3 Comparison to Subject 4 4 Superior amenities, 5 5 superior long range ocean views LA City Rent Control * Adjusted for Services Included in Rent Exhibit B MANUFACTURED HOME COMMUNITY RENT SURVEY FOR MARINA PARK - JUNE 2000 # OF HOME W/S/T COMMUNITY HOME SITES SITES OCC % OCC MONTHLY LOW HOMESITE RENT HIGH AVG PAID BY ADJUSTED HOMESITE RENT RESIDENTS LOW HIGH AVG MOVE -IN HOMESITE RENT Bayside Village 270 259 96% $742 $2,200 $1,000 None $742 $2,200 $1,000 Waterfront - $2,200, Water View $1,650 Bluff View - $1,275. Interior North - $1,250 South Side - $1,000 Cannery Village 34 0 0% $1,800 $3,250 W/S - $33 $1,833 $3,283 Waterfront - $3,250, Perimeter - $2,200 Interior - $1.800 Capistrano Shores 90 90 100% $2,000 $2,100 None $2,000 $2,100 North of Clubhouse - $2,100, South of CH - $2,00u Dana Point Marina 81 81 100% $790 $790 $790 W/S/T - $47 $837 $837 $837 Same as existing resident El Morro MHP - Ocean El Morro MHP - Valley 296 296 100% $650 $300 $803 $485 None $650 $803 Same as existing resident El Morro MHP - Terrace $625 $1,052 None None $300 $625 $485 $1,052 Same as existing resident Same as existing resident Huntington by the Sea 306 306 100% $750 $875 $760 W/T - $31 $781 $906 $791 Market rents $750 to $875 based on size/location Laguna Terrace 156 156 100% $756 $1,645 $1,010 W/S - $44 $800 $1,689 $1,054 Canyon - $1,140 - $1,360; View $1,140 - $1,760 Premium View - $1.900 - $2,090 Lido Peninsula 214 182 85% $809 $3,200 $1,340 None $809 $3,235 $1,340 Bay View (based upon quality of view and size of site - $2.350 - $3,200); Interior $1,050 - $1,300. Interior corner $1,200 - $1,500. Interior sites two story homes - $1,585 - $1,685. Marina Park 60 57 95% $798 $1,129 $853 None $798 $1,129 $853 Same as existing resident - Partial View $798 Partial View - $853, On the Bay - $1,129 Marineland 62 58 94% $525 $783 $678 W/S/T - $28 $553 $811 $706 Market rents: SW - $700 DW - $765 Pacific 264 264 100% $400 $500 $400 None $400 $500 $400 $500 all homesites Palisades Bowl 168 168 100% $400 $850 $565 W/S - $22 $422 $872 $587 10% on resales as per rent control ordinance. Palos Verdes Shores 242 242 100% $575 $1,085 $914 W/SIT - $31 $606 $1,116 $945 10% on resales as per rent control ordinance. Paradise Cove 257 257 100% $358 $1,200 $614 None $358 $1,200 $614 15% on resales as per rent control ordinance. Point Dume' Club 297 297 100% $700 $2,000 $1,175 WIT - $25 $725 $2,025 $1,200 15% on resales as per rent control ordinance. Tahitian Terrace 158 158 100% $416 $1,062 $675 W/S - $20 $436 $1,082 $695 10% on resales as per rent control ordinance. 9 Exhibit C MANUFACTURED HOME COMMUNITY RENT SURVEY FOR MARINA PARK - JUNE 2000 MARKET RENT ANALYSIS # OF COMMUNITY TYPE HOME SITES Category MARKET RENTS Category Rent Rent Category Rent Category Rent Category Rent COMMENTS Bayside Village 55+ 270 Waterfront $2,200 Waterview $1,650 Bluff View $1,275 Interior North $1,250 Interior South $1.000 Subject Community- Traditional Homes Bayside Village 55+ 270 Waterfront $2,500 Waterview $1,950 BluHView $1,475 Interior North $1.450 Interior South $1,300 Subject Community - Two Story Homes Cannery Village All Ages 34 Waterfront $3,600 Perimeter $2,200 Interior $1,800 100 % upgraded, Superior Bay Views Capistrano Shores All Ages 90 Oceanfront $2,100 Oceanfront $2,000 Directly on Pacific Ocean; vastly inferior amenities Dana Point Marina All Ages 81 All Homesites $790 Inferior to subject (water orientation, quality of homes and amenities) El Morro MHP All Ages 296 Oceanfront $650 - $803 Ocean View $625 - $1,052 Valley $300 - $485 Long term leases CPI, no increase on resale Owned by State; to close 12/99. Residents granted a five year lease extension Huntington by the Sea All Ages 306 All Sites $750 - $875 Family community Laguna Terrace All Ages 156 Premium view $1,900 - $2,090 Ocean View $1,140 - $1,760 Canyon $1,140 - $1,360 Inferior homes (some new) and amenities; superior long range ocean views Lido Peninsula All Ages 214 Prime Water $3.200 Facing Beach $2,750 2 Story Interior $1,585 - $1,685 Interior $1.050 - $1,300 Interior $1.050 - $1.300 Rental rates based upon size of site, location Facing Beach $2,750 Channel View $2.350 - $2.550 Interior $1.050 - $1.300 Interior Comer $1,200 - $1,500 Interior Corner $1,200 - $1.500 and quality of view Channel View $2.350 - $2,550 anna Park 7ff7ges 60 Waterfront $1,129 Bay View Third Row Same as existing resident Marineland All Ages 62 Single Section $700 Lower quality, 'Trailer Park' Multi-Seclion $765 Pacific All Ages 264 All Sites $500 Very small sites, inferior quality and water orientation Palisades Bowl All Ages 168 High $850 Low $400 Average $565 10 % on resales as per rent control ordinanc Very small sites, vastly inferior homes and amenities; superior long range ocean views Palos Verdes Shores 55+ 242 Ocean View $985 - $1,085 Non -View $855 - $905 Owner capped' rents in 1992, Increased caps $35 In 2000; 10 % increase on resale; superior homes, amenities & long range ocean views Paradise Cove All Ages 257 High $1,200 Low $358 Average $614 15 % on resales as per rent control ordinance. Mostly inferior homes and amenities; superior long range ocean views Point Dume' Club All Ages 297 High $2,000 Low $700 Average $1,175 15 % on resales as per rent control ordinance. Superior homes (multi -section), better amenities; superior long range ocean views Tahitian Terrace 55+ 158 High $1,062 Low $416 Average $675 10 % on resales as per rent control ordinance. Comparable homes, inferior amenities, superior long range ocean views 10 C0,6 0 to (9i ra¢� 20 inches; 712 words TUESDAY, JUNE 13, 2000, BUSINESS, PART C, PAGE 1 000055877 COPYRIGHT 2000 / THE TIMES MIRROR COMPANY FAX page #1 Southland Housing Sales Jump Suddenly in May ■ Real estate: L.A. and Orange counties' numbers for that month are strongest in years. Prices also are up, countering fears of a slowdown. by DARYL STRICKLAND TIMES STAFF WRITER A sudden burst of home buying in late May led to stronger -than -expected monthly sales and higher prices throughout Los Angeles and Orange counties as confident shoppers ignored early signs of economic slowing. Monthly sales of new homes in Los Angeles County were the strongest for any May in 11 years. In Orange County, sales were the highest for any May in the 12 years of record -keeping by DataQuick Information Systems, a La Jolla research firm that released its monthly report Monday. Overall, the number of homes sold in Los Angeles jumped 5.6% from May of last year to 10,119, DataQuick reported. The typical home price rose a modest 2% to $194,000, according to the report. In Orange County, monthly sales jumped 9% to 4,660. The median price —the point where half the homes sell for more and half for less —charged ahead 11.2% over May 1999 to $268,000, marking the seventh time in the last year that Orange County's monthly home price has hit a record, DataQuick re- ported. "It seems that higher mortgage rates aren't slowing demand so much as creating a sense of urgency in buyers, who want to get in before the rates get even higher," said housing analyst David Chapman at Haskell & White, a Newport Beach account- ing firm. In April, sales had fallen sharply from the previous year, leading real estate experts to speculate that the market might be reaching a turning point after several years of high growth. Analysts said that a combination of inflated prices, low invento- ry of homes and higher mortgage rates restrained many buyers from purchasing. The April pause extended into mid -May, as consumers de- ferred making a purchase out of concern over stock market fluc- tuations and higher mortgage rates, said John Karevoll, the Da- taQuick analyst who prepared the report. But apparently the market was only catching its breath be- fore sprinting ahead again, snapping back in late May to post another month of record results. To avoid being priced out of a home, buyers "didn't wait very long before getting back into the market," Karevoll said. "I think the impact that the turbulence had on personal finances was not as severe as some thought," he said. "The market is still a bit stronger than we thought." Chapman agreed that "higher mortgage rates aren't slowing demand so much as creating a sense of urgency in buyers." Higher prices, including another monthly record in Orange County, are raising greater concerns that average workers are being priced out of homes. A federal report Monday found that housing costs are outstripping wage gains in areas of strong job growth nationwide, particularly Southern California, resulting in a growing shortage of affordable homes. "Cities are enjoying the benefits of the longest and strongest economic expansion in our history, but many are still not full participants in the new prosperity that has swept across our na- tion," Housing Secretary Andrew Cuomo said. Continued job growth and a relative dearth of development in Los Angeles and Orange counties have been driving prices higher. The two counties, over the past 12 months, have created about 130,000 jobs, Chapman said, a pace that demands about 85,000 new homes. But developers are on track to complete only about 31,000 homes this year, he estimated. That "shortfall of housing," he said, means the market is likely to prolong its boom, especially if high-technology jobs continue to provide large incomes. Cuomo said among the findings of the U.S. State of the Ci- ties report he released was a need for more affordable housing nationwide. The monthly housing figures for Los Angeles reflect a "significant amount of growth" in sales of entry-level homes, Karevoll said. All housing sectors in Los Angeles, from entry- level homes to mansions, have recorded strong sales gains, he said, though more activity at the lower end of the market has helped curb overall rates of appreciation. Existing -home prices in Los Angeles rose 3% to $201,000. Condominium prices fell 2.6% to $150,000, while new homes grew by less than I % to $277,000. The number of existing homes sold in Los Angeles grew 10% to 7,614, driving the overall sales figures. New -home sales dropped 15% to 444, and sales of existing condominiums slid 4% to 2,061. In Orange County, new -home prices jumped 19% to $388,000, existing homes surged 11.5% to $292,000 and exist- ing condominiums increased more than 7% to $175,000. Sales, in turn, rose in all sectors: For new homes, sales grew 25% to 432 units; for existing condos, sales increased 17% to 1,313; and sales of existing homes rose 4% to 2,915. The monthly DataQuick study records home sales that closed during the month, reflecting agreements between home buyers and sellers over the previous 60 to 90 days. This May contained two more working days than May 1999, helping to boost figures at month's end, in particular. Leo Nordine, a Redondo Beach broker, said he believes the market's pace will continue. He has noticed more activity among entry-level home buyers. TIMES ON DEMAND, THE REPRINT AND RESEARCH Dial 800-7 8 8 - 8 8 04 SERVICE OF THE LOS ANGELES TIMES. FEELING RICHT AT HOME As they did a decade ago, today's housing prices are soaring. But with many borrowing options to choose from, buyers aren't scared. By JENNIFER HIEGER The Orange County Register ome prices are high, no doubt about it. But here's one slight consolation: The typical mort- gage payment isn't much steeper than it was U years ago. A family that bought a median -priced home in Orange County in May pays $1,622 a month - assuming the family made a 20 percent down pay- ment and obtained a 30-year, fixed-rate loan at the going in- terest rate. That's high, but Orange County has been there before. The previous peak was April 1989, when the average mort- gage payment was $1,602. Back then, the median price of a home was lower, but in- terest rates were higher. While prices have risen dra- matically in the past few years, they were recovering from a long slide that began in the early LQWs. In some ways, the market is just now returning to ground zero. "In terms of monthly pay- ments, homes aren't a lot more expensive," said Esmael Adibi, economist at Chapman Uni- versity. Last month, the median price of a home in Orange County was $268,000. The aver- age interest rate, with two points, was 8.32 percent. But higher mortgage pay- _ , .. ments don't seem to be scaring buyers away. Last month was the busiest May on record, with 4,6,00 Hume and condominium sales. Buyers aren't complaining much about prices, said James Joseph, who co-own Century 21 offices in Anaheim, Garden Grove and Los Alamitos. So far this year, sales are up 14 percent compared with a year ago. Attitudes have shifted signif- icantly since the recession, Jo- seph said. "Everybody was nervous about getting a pink slip the nest day," he said. "Now they're saying,'If I get fired tomorrow, there are two or three other places I could go., That's just what Ron Erratt, a medical -device engineer, found when he learned more than a year ago that he was go- ing to lose his job. Erratt quickly landed a bet- ter -paying job. O.C. HOUSING MARKET: MAY The median sale price of all types of Orange County homes combined rose 11.2 percent in May compared with a year ago and went up 2.3 percent from April. &%-_ n I.¢ All 1-family resale Condo resale New r MAY 4,660 2,915 1,313 432 CHG. FROM APR. 15.5% 14.0% 13.3% 35.8% CHG. YEAR AGO 9.0% 3.9% 16.7% 1 25.2% YEAR TO DATE AVG. 3,893 2,400 1,074 418 CHG. FROM 1999 1.4% -4.0% 8.7% 20.1% All S268,000 2.3% I 112% $258,000 11.2% 1-family resale S292,000 1.8% I 11.5% S279,000 12.0% Condo resale $175,000 0.6% I 7.4% $169,000 7.0% New S388,000 1.6% 19.0% $369,000 14.2% <$100,000 170 22.3% -4.5% 148 -22.4% S100,001-S200,000 1,186 9.1% .17.1% 1,072 -18.3% S200,001-S300,000 1,524 19 3% 16.29). 1,266 6.3% S300,001-S400,000 833 9.2% 40.0% 701 32.9% >S400,000 1,1021 27.5% 61.6% 824 41.3% <1,000sq.ft. $133,000 -2.2% 1.1% $131,000 6.3% 1,001.1,500 S207,250 1.6% 12.0% $201,000 11.2% 1.501-2,000 S285,000 0.0% 7.8% $278,000 10.0% 2,001.2,500 $375,000 1.5% 13.1% $356,000 8.9% > 2, 500 ., $485,000I -7.3% 3.2516 1 $498,000 , Defaults 348 4.2% -IA% 366 16.61 Foreclosures 26 4.0% -52.7% 35 -64.9% Avg. loan -to -value 82.8% -0.4% .2.1% 83.2% -1.8% . Adjustable loan share 42.9% -1.6°/a -132.81,16 44.9% 166.7% Payment cost index $1,621.88 i 7.9% 29.8% $1,511.67 25.6% Median price per sq. ft, $172.77 0.6% 10.0% 5167.34 9.6% Last month's change from a year before. +3.9% 1-family home resale volume +11.5% 1-family home resale price -5.4% Defaults +132.8% Adjustable loan share . +29.8% . Cost Index +10% Pricelsq. ft. Definitions: MEDIAN is midpoint of all values; NEW includes 1-family and condos; ACTIVITY BY PRICE breaks down home and condo sales by sales price; PRICE BY HOME SIZE breaks down home and condo sales by square footage of the property: DEFAULTS are notices of lateness filed by lenders; LOAN -TO -VALUE is percentage of purchase price financed; ADJUSTABLE LOAN SHARE is percentage of purchase loans with adjustable rates; PAYMENT COST INDEX is monthly payment for median price 1-family home at average, 30-year, fixed mortgage; and PRICE PER SQUARE FOOT is for 1-family homes. Source: AcxioMDataquick Information Systems Last month, Erratt and his wife Mary bought a four -bed- room house in Garden Grove for $280,000. Buying the house meant dou- bling the family's mortgage payment. "You can imagine what that feels like. And we had some sleepless nights," Erratt said. But the plunge, he said, was worth it. Buyers also have more bor- rowing options. Lenders have cushioned the blow of rising prices by offering a slew of new loan products designed to make buying a house cheaper, at least initially. At First Republic Mortgage in Santa Ana, roughly a quarter of the borrowers opt for a loan with a minimal down payment or no down payment at all, said President Lionel Punchard. The office rarely has to turn The Orange County Register a prospective buyer away. "They can have decent cred- it and buy a home with no money down. Not perfect cred- it, but decent," Punchard said. ► ON PAGE ONE: O.C. home prices hit an all-time high in May. News 1 ► BY THE NUMBERS: Home prices and sales volume by ZIP code. Business 12 0 0 °o 0 N d ti r' W a 0 d '6c C u s �g2i N A` W _ 0 a i81a e $ 00 r m ♦tNE SIS Q A' Y (r�ln CIA BIAIIo a9� qn a K�' �2'��Qe W; T � L .6 a8gl�� c y n Z � Y pi I .Q e � " C y m I E- O I i o �L C C Y a; " ^ n 7 O e M E HT > MCL W - � 8 a v S'4'tiE y�yQe 25I2S m p« E d N E p I■ �`E Q VL Elsa Z fe j� -k X10 OI� ie'If f1 ss Q dd ry ®� s N Y $�~ W nE ;. i. �i�Y. I Y9 t� ^191 2-8 ";sue.AM a N Y ;� W ' o I 2 =. 1 eE =c W, M W .�Cn � I � 1� •i' r, a e LT Y V < EE 9 Z &I O:umi 5��si C " w _.� f�Ig6I c C0 "y € pb U. :d " u°i W EEd 3e to O o°•V Imo LW� Z n I was O. E Y .. N u I. '. ZI$I IS^ dlS {, ,�a JV GIf u s �g2i N A` W _ 0 a 2 O Om I° ^ i9 I� Iry SAS i81a e $ 00 r m ♦tNE SIS Q A' (r�ln CIA BIAIIo a9� qn a K�' �2'��Qe W; T � L .6 a8gl�� c y n Z � a M ee eQQM L r N O Y C "` +Z MC E- O i o H Y r N i �°.8 '.".i�f.• ymK 288$258 yo E yQm_ p S 8 E S'4'tiE y�yQe 25I2S m p« E d �`E Elsa l_;. fe j� -k X10 OI� ie'If f1 ss !& ry ®� �'Y��m $�~ a =i= ;. i. �i�Y. I t� ^191 N ";sue.AM mmm ;� •» I is 1 W, M W .�Cn � I � 1� •i' � I EE 9 O:umi 5��si C " v _.� f�Ig6I •� € pb C� IIOIeigl u°i c O o°•V gVI ct On aa tl§ I. '. ZI$I IS^ dlS {, ,�a JV GIf << t9+3 o`5$0`,'a 2 O Om I° ^ i9 I� Iry SAS i81a e $ 00 r m ♦tNE SIS Q A' (r�ln CIA BIAIIo a9� a8a I A w w W; T � L .6 a8gl�� c y n Z � �a ala a� � " i tiu "I: N s 0 6 L r N O Y C "` +Z MC E- O i o H Y r N O V F LA IM 3� W r I*.." _Z N N +� E" m fi yT •: 2 O Om I° ^ i9 I� Iry SAS i81a e $ =I� SIS (r�ln CIA BIAIIo II a8a I A w w c L .6 a8gl�� c �a ala a� � " i tiu "I: H ^ IC mC' 1N IM !8 fi yT Elsa l_;. fe j� -k X10 OI� ie'If f1 ss a =i= ;. i. �i�Y. I t� ^191 N •» I _ 1 W, M � .�Cn � I � 1� •i' I O:umi 5��si C " v IOI f�Ig6I CO pry OIO pb C� IIOIeigl u°i nl Isli�!"'IJ CIC O o°•V gVI ct i��,.tlw I. '. ZI$I IS^ dlS {, ,�a JV GIf Is %j � ���■iin�iGi /iwmilli •,,, ' .I.,I ! iAvi � J�/i iii�vl .�� , . -.A k ■�.n�'���/ �)I�, 1. f:��i�i� iiiwrir �5 ■����jl,y%11�.�.� nr r� ii.�i��■ Nil WTHE el BENDETTI W.a_ COMPANY July 17, 2000 Sharon Z. Wood Assistant City Manager City of Newport Beach 3300 Newport Blvd. Newport Beach, CA 92663-3884 Re: Marinapark RFP Response to Proposed Guidelines Dear Ms. Wood, Enclosed is the response to the "Proposed Guidelines" mailed to the Real Estate proponents of the Marinapark RFP on May 31, 2000. Development and The enclosed response represents a change from The Bendetti Company Asset Development Proposal submitted on February 4, 2000. These changes Management were made based on public comments from the City Council, and to Services meet some minimum criteria presented by The Edward Thomas Company who is working with the Proponent on the hotel portion of the site. With past and current ownership credits which include Westin Hotels and Resorts, the famed Beverly Hills Hotel, Shutters on The Beach and Casa Del Mar, The Edward Thomas Company is interested in participating in the development and operation of a 130 room luxury hotel at Marinapark which would compliment its reputation for small to mid -sized luxury hotels. The Bendetti Company and The Edward Thomas Companies look forward to having an opportunity to meet with City Staff regarding more 1176 details on the hotel plan. Main Street Suite 100 Irvine CA 92614 (949) 261-6111 (949) 261-6660 FAX Sharon Z. Wood July 17, 2000 Page Two A summary of the changes from the February 4, 2000 Development Proposal follows: DULY 17 FEB 4 1. Retail Omitted Included 2. Office Omitted Included 3. Restaurant — Elegant (2) Omitted Included 4. Coffee Shop diner Omitted Included 5. "Tot" Lot Included Omitted 6. Tennis Court Included Omitted 7. Arch Landmarks/lighthouse Included Included 8. Common areas/Boardwalk connecting 15th to 18th Street Included Included 9. Residential SFA 18 17 SFD 14 24 10. Mobile Home Park �1� Included Included 11. Marina's — Visitor, Private Included Included 12. Parking Structure (2) Omitted Included 13. Hotel 130 44 14. American Legion (3) Included Included 15. Transient occupancy tax $900,000 Omitted 16. Sales Tax $7009000 Omitted 17. Revenue Sharing with City Residential sales 25% 40% Cash Flow 0% 40% 18. Guaranteed Ground Lease (4) $2,000,000 $2,000,000 (1) Proposes to eliminate 5 of the southerly most spaces (2) Elegant restaurant and parking included in Hotel development plan. (3) Relocated to Balboa Blvd. from original plan, still retaining partial bay view. (4) Increasing every 5 years. Sharon K. Wood July 17, 2000 Page Three Because of time restraints of procuring a hotel owner/operator, and in the preliminary planning of a qualified luxury hotel concept for the site, a number of the responses to the Proposed Guidelines are still being developed. Thank you for this opportunity to respond to your May 31, 2000 letter. look forward to discussing the plan and proposal in more detail with the City. Si Robe endetti President RDB: sl enclosures A. Identification 1. Name of development entity: (a) Master Developer: The D.L. Bendetti Co. Responsible for the overall coordination of the entitlement, construction and implementation of the development plan, and the development team. (b) Residential Developer: Warmington Companies (c) Hotel Developer: The Edward Thomas Companies 2. Ownership Structure: Due to the complexity of the development, and the varying developer expertise required to address all facets of the plan, ownership structure has yet to be determined, but may include separate partnership with the hotel operator. 3. Identification of Development Team: The developer has or will be retaining the following entities: Lead Architect — William Hezmalhalch & Associates 17875 Von Karman, Ste 404 Irvine, CA 92614-6256 Phone: (949) 250-0607 Hotel Architect — Don R. Hart, AIA Hotel Consultant 318 West Lawrence Road Phoenix, AZ 85013 Phone: (602) 266-5576 Facsimile: (602) 264-9085 Engineer — yet to be determined Traffic Engineer — WPA Associates 23421 South Pointe Dr., Ste 190 Laguna Hills, CA 92653 Phone: (949) 460-0110 General Contractor — yet to be determined Counsel: Joel Cooperberg, Esq., Rutan & Tucker 611 Anton Blvd, Ste 1400 Costa Mesa, CA 92626 Phone: (714) 641-5100 As the project progresses more consultants and team members will be added. Those team members will be qualified based upon prior experience in working with the municipalities and agencies necessary to procure entitlement. 4. Developer Project Managers Hotel: Timothy S. Dubois, President The Edward Thomas Companies 9950 Santa Maria Blvd. Beverly Hills, CA 90212 Telephone: (310) 859-9366 Facsimile: (310) 859-0823 Residential: Tim Hogan, President Brian Sinderhoff The Warmington Company 3090 Pullman Street Costa Mesa, CA 92626 Telephone: (714) 557-5511 Facsimile: (714) 641-9337 Master Development: Robert D. Bendetti, President William Mecham The D.L. Bendetti Co. 1176 Main Street, Ste 100 Irvine, CA 92614 Telephone: (949) 261-6111 Facsimile: (949) 261-6660 5. Hotel Operator: The proposed hotel operator is The Edward Thomas Companies. A profile on the Edward Thomas Companies has been included under Supplemental. The Edward Thomas Companies owns and operates two luxury hotels in Southern California. "Shutters On The Beach Hotel" and "Hotel Casa Del Mar" are both located in Santa Monica, and are members of The Leading Hotels of the World. Founded in 1982, credits to their resumes include ownership of Westin Hotels and Resorts from 1995 to 1998. A profile on the Edward Thomas Companies is enclosed. The Bendetti Company and Edward Thomas Companies' vision for Marinapark is a luxury hotel that underscores the rich tradition of Balboa. For further information on the Edward Thomas Companies, contact Timothy Dubois, President, at (310) 859-9366. 6. Identification of Development Project: a. Edward Thomas Companies: Shutters on The Beach in Santa Monica represents a project that the Edward Thomas Companies is proud of. It is located at One Pico Boulevard, on the beach in Santa Monica. While larger than the proposed hotel at Marinapark, Shutters is similar to the quality hotel proposed. Information on Shutters is included under Supplemental. The Edward Thomas Companies purchased the hotel structure out of bankruptcy, and finished, opened and has created Shutters to the stature it maintains today. The financing picture for Shutters is a traditional first trust deed mortgage of approximately 50% of value, the balance being developer equity. The Edward Thomas Companies would be delighted to meet and discuss in more detail Shutters, its financing, and track record. b. The Warmington Company Project Name: Treviso Location: Tustin Ranch Seller: Irvine Community Development Co. (The Irvine Co.) Project Size: 44 single family lots Lot size: 8-10,000 square feet Home size: 3,450-4,450 square feet Price Range: $600,000-$800,000 Financing: Equity is a blend of internal Warmington sources and private investor monies. Debt is a $11,000,000 revolving line of credit provided by Bank of America. Total project costs of $30,000,000. Detailed information on Treviso has been included under Supplemental. c. The D.L. Bendetti Company Project Name: Cerritos Industrial Park (completed 1982) Location: NWC Artesia Blvd and Edwards Road, Cerritos, CA Project Size and Description: 1,100,000 square foot business park on 100 +/- acres of land in Cerritos. CIP included 68 tenants (some of whom purchased their buildings, and many of which are on separate parcels) with units ranging in size from 3,000 to 80,000 square feet. Most of the buildings in the CIP Portfolio were sold in 1989 to an institutional buyer for $625500,000. Role: Bendetti acquired the raw land, procured entitlements, designed the buildings, constructed the development in-house and managed and leased the project upon completion. Financing: Equity came from a combination of internal Bendetti sources in joint venture partnership with the Equitable Insurance Company (Bendetti bought Equitable's interest in 1985). Debt was approximately $30,000,000 in the form of a first trust deed held by Connecticut Mutual Life Insurance Company. The Bendetti Company would be delighted to meet and discuss these and other more recent projects in more detail. 7. Describe your familiarity with tidelands requirements: The Developer has had no direct experience developing within tidelands, but will retain consultants experienced in this field. 1. Parcel Sizes (Approximate): A detailed site plan is being developed and will address more precise parcel sizes. Below is an approximation: N/S E/W Area/SF Width Depth Hotel 153,900 570' 270' Residential SFA 10,000 100" 100, SFD 3,500 35' 100, Recreational "Tot" lot/tennis 211000 210' 100, The remaining 278,128 square feet of approximate land area will be dedicated to the existing mobile home park and common areas, plaza and public areas. 2. Project Description: The development plan has changed in scope from that which was previously submitted on February 4, 2000. The change facilitated two things: a) A development plan which is now more focused and feasible b) Design criteria necessary to address the hotel requirements of The Edward Thomas Company As can be noted on the following site plan, the proposed Marinapark Development eliminates the office and retail uses of the February 4Ih submittal, primarily because of the parking requirements for such uses, and the fact that those areas needed to be reallocated to hotel so a minimum number of rooms and related facilities could be attained. The developer worked closely with Don Hart, AIA, the hotel architect for The Edward Thomas Companies. ,MARINAPARK. Newport Beach, CA The Bendetti Company Sffe Phan 1 El E--w!9T71'v,9- vt WILIAM HEZMALHALCI-I ARCHITECTS INC. 0 40 011 O �M 5 �i TAN oa.M ✓AL- ;P� uiN t'Ac� '�RaE Lr--VEv �j - vv vNrii 8 / v r v+i 1/N175 TpT?l-) %I�f�/�/i4 P ffd Tit_ g"lAv/N'T Go08 y �trr�ft�v &Avq ve7- �i.✓e— 9A1'6p Ttv`Y 17, .Ysc o A. Mobile Home Park: As detailed in Exhibit "A", the mobile home park remains as a part of the Marinapark development for two reasons: 1) While a mobile home park certainly does not represent the highest and best use for prime bayfront property, it might take 3 to 5 years, or more to terminate the use and remove the homes at a substantial expense to the City. It is public knowledge that the residents are well organized and represented which could further delay closure and/or relocation efforts. 2) The rent levels are about 50% below market levels. The revenues from the mobile home park can be increased substantially, along with architectural enhancements and infrastructure reconstruction, the mobile home park can be adequately brought into the financial and architectural picture of the Marinapark development. 3) Height restrictions will be imposed to sustain the projected values of the new residential along Balboa Boulevard and their views to the harbor. B. Residential: The residential portion of the Marinapark site plan has been reduced in size from the February 4th submittal so as to provide for a "Tot" lot and tennis court. The residential portion of the development is still located along Balboa Boulevard, and will include the following: 1) Eighteen (18) townhomes in three, six-plex buildings. Townhome units will average 1,350 square feet and have two (2) dedicated parking stalls. 2) Fourteen (14) detached homes with second floor harbor views over the mobile home park. The homes will average 2,500 square feet, and have two (2) dedicated parking stalls each. The parcel sizes for the detached homes will be 35' wide by 100' deep, and is in keeping with the relative size range of the other detached parcels in the neighborhood. The architecture of the residential will reflect the seaside nature and character of Balboa, and be an extension of the plaza and public areas of Marinapark. The Warmington Company has projected that given the land lease vs. fee interest in the land, the townhomes will sell for an average of $460,000, and the detached homes at an average of $675,000. The amount of rent paid annually by each homeowner for the land will be based upon 2.5% of the selling price of the home (see Exhibit `B"). Tim Hogan, President and Brian Sinderhoff are available to answer specific questions regarding the residential and its proforma. C. Hotel: The hotel will include the following: 1) 130 luxury rooms on three tiered levels 2) 130 valet parking spaces (no self parking) 3) Elegant restaurant and kitchen 4) Banquet facilities 5) Small pool and spa The hotel areas are 100,000 square feet, exclusion of parking areas on an approximate parcel size of 153,900 square feet. Service loading areas will be via the existing alleyway. The hotel will be oriented to the harbor with 62% of the rooms offering either a full or partial bay view. The planned architecture of the hotel will reflect the seaside nature and character of Balboa. The hotel will be an extension of the plaza and public areas of the Marinapark development, which have more specifically been defined in the February 4th submittal. The Edward Thomas Company has projected room rates averaging $225, $250 and $260 for the first three years, with full occupancy and room rate stabilization occurring in the third year. Occupancy projections are 60%, 70% and 75% for the first three years, remaining at 75% thereafter. A Five Year Income and Expense Proforma has been provided under Exhibit "C". Tim Dubois, President of The Edward Thomas Company is available to answer specific questions regarding the hotel and its proforma. D. Marina: As detailed in Exhibit "D", the existing Marina has become old and tired. In addition, the site represents one of the last opportunities to address the needs for transient docking for visiting cruisers. 1) There exists 40 slips at the private marina. The Marinapark development plan proposed to add another eight (8) slips along with modernizing and reconstructing the marina so that it is fresh and "new" when complete. Once complete, a 90% occupancy has been projected with the slip fees being brought to market. 2) The visitor serving marina will contain 34 slips, capable of handling yachts 40' to 55'. Four of the side ties at the end of the docks, along the channel, can accommodate two yachts of 100' each. Based upon the transient slip fees in other full service marinas, fees will range from $1.90 to $2.25 per foot of vessel length, with occupancy ranging from 65% to 75%. Some reciprocation with the hotel will be established for use of the facilities, dockside meal service, laundry, etc. Parking for the marina will be located behind the hotel, and accessed through the plaza. E. American Legion Hall: As indicated in the February 4th submittal, the presence of The American Legion as part of the Marinapark development represents a balance to the community. The Legion has garnered support from its neighbors and the community. The location of The American Legion Hall has changed because of the hotel. The Legion has been relocated on to its own parcel along Balboa Boulevard. At a proposed 8,000 square feet, the hall itself will be comparable in size to existing structure. There is 44 parking spaces on site, and arrangements could be made to utilize parking off the alley behind the hotel, for special events. The architecture will be in keeping with the theme established for the entire development. A view corridor to the harbor will be established. A construction budget for the structure is $385,000, with site work and parking budgeted separately under site work. The budget does not include any fixturization or improvements on the interior of The American Legion Hall, which will be the responsibility of the Legionnaires and their membership. No revenue from The American Legion facility has been proposed, and they will be responsible on a triple net basis to pay all utilities and maintenance on the structure and parking areas. 3. Projected Retail Sales Tax (a) The only source of retail sales is projected to come from the hotel. Based upon the "Exhibit C" projections of sales tax follows: Sales Tax Year 1 $290,625 Year 2 $302,250 (b) Projected Transient Occupancy Tax (see Exhibit "C") Year 3 $314,346 10% T.O.T. $640,575 $830,367 $925,266 (c) Based Upon Completed Property Valuation Year 1 Year 2 Year 3 Hotel $227,371 $231,919 $236,557 Residential (Based on Sale Projections, see Exhibit `B") SFA $82,800 84,456 86,145 SFD 94,500 96,390 99,282 $2221932 $342,295 $494,427 4. Project Cost & Revenue Proforma PURCHASE PRICE Land Area Other TOTAL LAND COST CONSTRUCTION COSTS 1. Demo and Off/On-Site Work 2. Public Areas/Landmarks (a) Wood Planked Boardwalk - Hard/Softscape, Street Furniture (b) Lighthouse (c) Tot Lot (d) Tennis Court 3. Mobile Home Park 4. Residential (a) Single Family Homes - Detached 2,500 (b) Townhomes - Attached 1,350 5. Hotel - Hotel and Resturant Project Costs incl. Parking 6. Marina - (a) Private Marina Reconstruction (b) Visitor Serving Marina 7. American Legion Hall 466,528 @ PSF LEASED 466,528 @ $ 2.75 PSF $ 1,282,952 110,000 @ $ 7.75 PSF 2 @ $125,000 EA Exhibit "A" Exhibit "B" 14 @ 18 @ Exhibit "C" Exhibit "D" Exhibit "E" 172 PSF 172 PSF 852,500 250,000 45,000 55,000 500,000 6,020,000 4,179, 600 21,212,000 484,500 1,877,500 Project Management 2.0% 742,881.04 Soft Cost & Contingency (Item #'s 1, 2, 3, 6 & 7) 3.0% 1,114,321.56 TOTAL DEVELOPMENT COSTS $ 39,001,255 Repay costs from Residential Sales (110, 1 99,600) TOTAL REMAINING DEVELOPMENT COSTS $ 28,801,655 Assumptions: 1. Soft costs are included in the total costs projections of Item #'s 4 & 5 , "Residential" and "Hotel" Summary of Income Proforma Projected NOI Mobile Home Park Residential Ground Lease Hotel & Resturant Marina - Private & Visitor Total Projected Lease Payment Available Cash for Debt Service EXHIBIT Year 1 Year 2 Year 3 "A" $ 1,044,480 $ 1,065,370 $ 1,086,677 "B" 490,500 490,500 490,500 "C" 495,2.11 2,486,752 3,082,289 "D" 1,978,049 2,017,610 2,057,962 $ 4,008,240 $ 6,060,231 $ 6,717,428 (2,000,000) (2,000,000) (2,000,000) $ 2,008,240 $ 4,060,231 $ 4,717,428 Return on Costs 6.97% 14.10% 16.38% 5. The hotel and residential information has been supported by informal market research and familiarity. More formalized market studies will be completed and provided to the City at a later date. 6. Development Schedule: The following represents a reasonable timeline for the completion of the Marinapark development. One of the major reasons our proposal includes the retention of the mobilehome park and keeping the American Legion on site, is to avoid the long term delays, legal processes and political mayhem that would result from attempting to remove them. It is also our desire to maintain an income stream to the City during the entire entitlement and construction phases of the project. Avoiding that loss of income, we believe makes this project much more viable than one that seeks to supplant the current tenants. There are, however, a great many difficulties that may be created by the inception of this project even without expulsion of the Legion and the mobilehome residents. Therefore, the following is offered as a best case scenario and is subject to modification and adjustment. This timeline is coordinated with the development milestones listed. a. Decision by City Council to Pursue Proposed Development Concepts: (i) Coordination with City Staff on design criteria, compliance with City General Plan, environmental, zoning and planning requirements. (ii) There will also be ongoing dialogue with City Council as the Council requests. Timing — 6 to 12 months b. Acceptance by Staff and Council of Project Concepts: (i) Beginning the entitlement process with the City and with the Coastal Commission. (ii) The process will address the three programs of development: The hotel element, the reconstruction of the existing marina and development of the new visitor serving marina and the enhancement and infrastructure work for the mobilehome park. Timing —10 to 14 months. c. Entitlements Approved by all Agencies: (i) Implementation of a development agreement based on approvals. (ii) Presentation to appropriate agencies, final plans for processing of the proj ect. (iii) Finalization of financing for the construction phase of the project. Timing — 6 to 9 months d. Construction of Improvements: (i) Demolition of current improvement on Balboa Boulevard, removal of the American Legion Hall. Timing — 2 months (ii) New visitor serving marina and rehabilitation of existing American Legion marina. To begin simultaneously with # 1. Timing — 4 months (iii) Construction of boardwalk, rehabilitation of mobilehome park gas and utility systems. To begin in coordination with the marina construction, probably after the completion of the seawall and bulkhead. Timing — 4 months (iv) Construction of the hotel parking areas which are proposed to be 4' below grade. Timing - 4 months (v) Construction of the hotel element, to commence 2 months after the start of the parking structure. Timing — 9 months (vi) Construction of Residential element, to commence after completion of demolition work on Balboa Boulevard. Timing — 9 to 12 months Overall timing for acceptance and entitlement — 22 to 35 months Construction of all improvements — 14 to 18 months 7. FINANCING PLAN Should the Bendetti Plan go forward with the City of Newport Beach, the Developer will demonstrate in a reasonable time frame the ability to procure financing for the development. To date no specific plan has been set forth for financing. The project economics and feasibility along with the track record of the Bendetti Company, Warmington Company, and The Edward Thomas Companies will lead to financing acceptable to all parties. It is projected that at a minimum, financing will be procured in the following manner: Total Project Cost $28,801,655 Stabilized Value 10% cap on 3rd year NOI $47,174,000 Construction Financing $25,9011,655 Developer Equity (10% of cost) 2,900,000 $28,801,655 8. TENANT COMMITMENTS : Not Applicable Mobile Home Park Marinapark mobilehome park is a truly unique community. Every home has a view of Newport Harbor. Aside from the bayfront homes at Lido Peninsula Resort, there is no other mobilehome park in the region with such an amenity. While the long term land use decisions for the mobile home park are still pending, it is generally accepted that the current lease payments are well below market levels. The new Marinapark development proposes to negotiate a new long term lease with the residents, and raise the rent to market levels. The mobilehome park will need to be updated with reconstructed infrastructure and architectural enhancements to tie the park into the balance of the development. $500,000 has been projected in the Development Budget to cover these upgrades. The increase in rent from current to market levels nearly doubles the revenue generated by the park. As part of the redevelopment plan, six of the fifty-eight spaces will need to be eliminated. The remaining fifty-two spaces all have bayfront views ranging from unobstructed (Space "A, B & F") to partially obstructed (Space "C, D & E"). CURRENT PROJECTED PROJECTED PROJECTED CURRENT TOTAL PROJECTED SPACE SPACE SPACE CURRENT SPACE SPACE PROJECTED SPACE RENT/MO. RENT/MO. RENT/MO. SPACES RENT/MO. RENT/MO. SPACES RENT/MO. YEAR 1 YEAR 2 YEAR 3 A, B & F SPACES 25 $ 1,151 $ 28,786 23 $ 2,200 $ 50,600 $51,612 $52,644.24 C & D SPACES 22 $ 875 19,241 20 $ 1,700 37,400 $38,148 $38,910.96 E SPACES 11 $ 819 9,012 9 $ 1,600 14,400 $14,688 $14,981.76 $ 57,039 $ 102,400 $ 104,448 $ 106,537 CURRENT ANNUAL $ 684,465 PROJECTED ANNUAL $ 1,228,800 $1,253,376 $1,278,444 OPERATING EXPENSES 136,893 EST. OPERATING EXPENSES 184,320 188,006 191,767 CURRENT NOI $ 547,572 PROJECTED NOI $ 1,044,480 $1, 065, 370 $1, 086, 677 Space rent increases annually at CPI or 2%, whichever is greater Market Support: Marinapark mobilehome park, Lido Penninsula Resort Marinapark - Residential Development Prepared by: Brian L. Sinderhoff WARMINGTON HOMES Plan: 1 2 Total: Average Size: Plan: 1 2 Premiums: Total Sales: Avg. Sales Price: SUMMARY Raw Land Land Carry Offsites Definitional Difference Direct Construction/SF Indirect Construction Marketing & Sales Commissions Broker Coop Incentives Master Marketing Finance Costs/Const. Gen'I/Administrative Total Cost: # of UNITS SIZE 18 Costs/Unit: Sales/Unit: Profit/Unit: Total Cost: Total Sales: Total Profit: BEFORE LAND LEASE EXPENSE UNIT MIX # of UNITS SIZE 1,350 TOTAL AVERAGE 14 2,500 18 14 2,500 32 1,350 1,350 1,853 SALES PRICE PER PLAN 18 $ 460,000 14 $ 675,000 $ 8,280,000 $ 9,450,000 $ 460,000 $ 675,000 $ 554,063 COST BREAKDOWN 50,000 75,000 1,950,000 60,938 60 81,000 65 162,500 3,733,000 116,656 25,000 25,000 800,000 25,000 6.0% 27,600 6.0% 40,500 1,063,800 33,244 1.0% 4,600 1.0% 6,750 177,300 5,541 2.0% 9,200 2.0% 13,500 354,600 11,081 0.0% - 0.0% - - - 9.0% 41,400 9.0% 60,750 1,595,700 49,866 3.0% 13,800 3.0% 20,250 531,900 16,622 $ 252,600 $ 404,250 $10,206,300 $ 318,948 PROFIT SUMMARY $ 252,600 $ 404,250 $ 318,947 $ 460,000 $ 675,000 $ 554,063 $ 207,400 $ 270,750 $ 235,116 $ 4,546,800 $ 5,659,500 $10,206,300 $ 8,280,000 $ 9,450,000 $17,730,000 45.1 % $ 3,733,200 40.1 % $ 3,790,500 $ 7,523,700 42.4% 7/17/00 Residential - Ground Lease Projections The potential ground lease revenue for the residential element of Marinapark has been modeled after Beacon Bay, a residential community located along the Newport Harbor bayfront, on land owned by the City of Newport Beach. At Beacon Bay, the revenues derived from ground leases are based upon 2.5% of the sales price. Similarly, at the proposed Marinapark, 2.5% has been calculated. As property values increase over time, and resales begin to occur, ground lease revenue will grow. It is projected that resales will be infrequent in years one through three. Thereafter, turnover from resales are projected to occur at a rate of 15 percent annually (rounded to 5 homes per year). The future sale price levels are difficult to predict, as are interest rates and the economy, therefore, an annual cost of living adjustment of two percent (2%) has been used to grow resale values. Ground lease revenue will be triple net, wherein the ground lessee (homeowner) pays all taxes, insurance and maintenance on each respective parcel. NO. OF SALE UNITS PRICE SFA 18 $ 460,000 SFD 14 $ 675,000 GROUND LEASE AS GROUND TOTAL PERCENT LEASE/PER LEASE OF SALE PARCEL REVENUE PRICE PER/MO. PER/MO. 2.5% $ 958 $ 17,250 2.5% 1,688 23,625 W $ 2,646 Annual NOI Year 1 Annual NOI Year 2 Annual NOI Year 3 $ 40,875 $ 490,500 $ 490,500 $ 490,500 Market Support: Beacon Bay Community, Newport Coast Properties v Zr fa o Eo N E O (n � M Y E o O N aLL �` O a`d } F > 0 lL LL 0000000 0000�00 00000 0 0 000 0 0 0 0 V 0 r r 0 0 0 0 0 O O LL' O O O r (D M 0 N C. O N 0 W V O V U) N LO V O r 0 V O N O W O O V r V M W M N U) M N f0 N O N W (D V r V r N Cl) N N p NOWo� r� OVf 0�00(�O OVi V (0-It 0) o fro ONn0) M 7 ON V V 0 co N (r00 V N V O N M V V N W O N r r N W r W V M M r <{ CD N r 0 �- �,. U) W (ti r (n ui r V N �- r 0 M V 0 co (D M O1 N (O Oo U') 0 (D CD (0 p rNM V OOrN 0 OOU)� O N M W 00 r h 00.t N W U) N O M V p Ffl O N W( O N M V W V N N r r 0 (0 N V r r N V' W V a O M N N O M U) N N (0 N r M cl �-- 0 0 0 0 0 0 0 0 0 0 0 o 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 �0rr 000 0000� 0o rr(0 Mr 0 O O N(O co r O r 0 N M V Oro ONo LL100 yr V c60 0 vi O rr N U) M N „R co N O N co U) '(t r N Cl) N N �0OWON ((0 m co V (D Of0 coo (MO r--m O2 hr W OONO 0 W 0 V coco 0 W W O �� D �U) V r(D(D V N(0 V (D Wr W Oo rNOrN U) f0 (DN C C O M N0 N L6 a U) r N V M O N Oi Oi W O (O V (0 CDr 0 W M V O N W N M V N r V 0 co N 0 0 M V O W f- LO W V V r V 0 V U7 (0 N V (O M W O N r M (D V N r W O O (O V N N V r N V (D N 0 M N .. 0 M V N N Ui ,Nr V m m i 0 0 0 0 0 0 0 0 0 0 0 o 0 0 0 0 0 0 0 0 0 0 o a o 0 0 V 0r r 00O OOOO�OO N N(0 V V (D O O Nr co W O W a U) N U) V O O V O N O W O O V r V m 0 O M O r r N V M CO N O N CO U) V r V r N Cl) N N e 0co 0 coo U) N00r00CD N M CD V N V OOOOM 00n LO 000 O Cl) OrN cn coo OM) 0 (00 d0'(r 0 WNM V V (O co W 0 N(n rr V V N O (O MN 0 0 (O N NM U) O UI r N •t r r O CO O N O 0 ao N 0 r V' (M V U) to (0 V N (n V (D Wl:trNMV U) V r r(A NON M W U) U)r (O M N (OM O O N CO N Cl) E 9 N N W N N r N U 7 V N r (O O O to V r (7 V r N V N V O 0 M N N'= 0 M V N N U) N M 0 0 0 0 0 0 0 O O O O O o 0 0 0 0 0 0 0 0 0 0 0 0 0 0 - 0 0 0 0 0 0 0 0 0 0 O LLO r r (0 0 (0 r N O O N co O N O N V O N 0 V O N O W O O Ui r V M r W M O r r M N M 0 (D N O N W LO V r V r m N fV r O 0ONOrOOGOO0N00ItOOOOW OO co U) r (D (O co (OOU 0 (n N U co 00ON OUV N V r MN0 Mr M O Ow O N(D U)r (V Cl)rONMM 0(D U) 0 r 0 0 0 to 0 (V r N co V O N W ( 0 W 0 0 0 0 W W U) 0 M 0 VLO W U) M W r W � M cm)M M r r l7) N 0 0 V V N r (V C 0 0 V O (O M r N co W M W Cl) N r 0-.0 0 0 0 0 0 0 0 0 0 o 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 r r000 MO 000 C) 00 U)Nr NO .- O O V r U) (0 0 (0 aq o i r 0 M O N O O (n 0 0 W 0 0 r 0 (n V (O V M O r N M r M V M co (D U) r V r r M r Nr 0VN NO�O0000000 OON0000000000N(O (fco00) Oo rD U7(n00NO MD UV V r0C 0OWr NO O OOOU)C OM U) (O O p (yN Wr U)00r ON 00W 0a 000 N V Or r O (n Or NK NN V O C. UN N Cl) 0U)U) 0O000 N N r N N 0 OrN r60 r V N W U) V 0r(n V O U) M M N co W Cl) V (O N N (O Cl) O r N N r r V r O 0 0 N O Ln r O r d (U u u d � n m a) x � y •• a m (A N c n aNi fu m L' ILx w d d a�i p F aw W w W m c a U)l (D wd a, am 0 0 (A W a'c O m 5.` 13Q m ))0 oL d N a�i m NNF a� u01i U O x fT0 00 > Z m0 ND O W.N C r >,O Q a) X N C (D pLL d xF C N 0 L f7) p) H N l0 L 0 Q C N > O N J X LL a) N T m a Z Ev (D a� u� Q E.0 a� am �O = -� arn0 LL W a �° nm� LL W o a�1-r a a ff1 W O O> L— 0 0> L— Of E N N 'O C 7 0 L— L •O fn rn fU �(°mFoU@O o a�u°mHC70 0 >Q2a`w o ° x� �LLO o A LL > m OQOQ F 0 F 0 F- f7 iL F U U. Q F(na APPROVAL: PROJECT COST PROJECT: Marina Park Hotel -Newport Beach, California DATE: ❑ July 12, 2000 REVISION: ❑ EST. CONSTRUCTION START: Jan.2002 NUMBER MODULES ESTIMATED OPENING DATE: Mar.2003 NUMBER KEYS: NUMBER OF FLOORS: 3 TOTAL SQ. FT.: 130 100000 NO.❑ ❑ ❑CATEGORY BUDGET COST/KEY 1. CONSTRUCTION❑ $14,820,000 $114,000 2. PERMITS, LICENSES, FEES❑ $100,000 $769 3. DESIGN CONSULTANTS❑ $750,000 $5,769 4. FINANCING❑ $1,000,000 $7,692 5. DEVELOPMENT[] $250,000 $1,923 6. KITCHEN/BAR/LAUNDRY EQUIP❑ $145,000 $1,115 7. OPERATING SUPPLIES❑ $135,000 $1,038 8. F & B SERVICE WARES/EQUIP❑ $142,000 $1,092 9. LINEN/UNIFORMS❑ $150,000 $1,154 10. GUEST ROOM FURNISHINGS❑ $1,300,000 $10,000 11. PUBLIC AREA FURNISHINGS❑ $350,000 $2,692 12. COMMUNICATIONS/MIS EQUIP❑ $420,000 $3,231 13. TAX, FREIGHT, PURCHASING❑ $350,000 $2,692 14. INITIAL SERVICES❑ $300,000 $2,308 15. PROJECT RESERVE $0 $0 16. LAND COSTS El $0 $0 TOTAL COST $20,212,000 $155,477 1--/\ 18 IT' J) Private Marina Visitor Serving Marina Visitor Serving Marina There is little dispute that there is a significant demand for a visitor serving marina. There are very few places to dock or moor a vessel unless you are a member of a yacht club. A marina dedicated to visiting yachtsman will provide accommodations ranging from one night to one month. Daily slip fees are considerably higher than those for long term. The visitor marina will contain thirty-four new slips ranging from 36' to 40' (handling yachts what are 40' to 55'), plus three side ties along the channel (two of which will handle yachts up to 100'). The marina will also include a number of visitor side ties for the bay packets cruising the harbor, and wishing to enjoy the restaurants and other amenities of Marinapark. Private Marina The Marinapark development plan will modernize and rebuild the existing private marina which has become old and tired. By dredging and reconstructing a portion of the southerly seawall, another 8 slips can be added to the existing marina for a total of 48 slips ranging in size from 20' to 40' which can accommodate yachts in the 25' to 45' range. Private Marina Vessel Mo. Rent Mo. Rent Occupancy Total Length/Feet No. of Slips Per Foot Per Slip Rate Mo. Rent 25' Slips 30 15 $ 15.00 $ 450 90% $ 6,075 35' Slips 40 10 $ 16.00 $ 640 90% $ 5,760 45' Slips 50 15 $ 18.00 $ 900 90% $ 12,150 $ 23,985 Annual $ 287,820 Visitor Serving Marina Vessel Daily Rent Mo. Rent Occupancy Total 35' Slips 40 7 $ 1.90 $ 1,596 70% $ 19,152 40' slips 48 24 $ 1.90 $ 1,778 65% $ 21,341 46' Side Tie 55 1 $ 2.00 $ 2,310 70% $ 27,720 82' Side Tie 92 1 $ 2.25 $ 4,658 75% $ 55,890 86' Side Tie 96 1 $ 2.25 $ 4,860 75% $ 58,320 $ 182,423 Annual $ 2,189,074 Combined Private & Visitor Serving Marinas $ 2,476,894 Private Marina Visitor Serving Marina Effective Gross Revenue: Operating Expenses: Repairs and Maintenance 123,800 Insurance 18,000 Property Tax 210,000 Utilities 9,200 Trash 14,000 Operation & Management 123,845 Net Operating Income - Year 1: Net Operating Income - Year 2: Net Operating Income - Year 3: $ 2,476,894 $ 1,978,049 $ 2,017,610 $ 2,057,962 It is projected that income from Marina revenue will grow at CPI or 2% annually, whichever is greater. Market Support: City of Newport Beach (Balboa Yacht Basin); California Recreation; The Balboa Bay Club; Marriott, San Diego; Marriot, Coronado Bay CONSTRUCTION COSTS In addition to retaining the assistance of Swift Slip to redesign the existing marina, and design the new visitor serving marina, a cost breakdown follows on the next page. Dredging has not been included in this breakdown, nor has the seawall extension at the existing marina. The Development Budget reflects those estimates by Swift, in addition to the costs mentioned above. SWIFT SLIP DOCK AND PIER BUILDERS 2027 PLACENTIA AVENUE COSTA MESA, CA 92627 TELEPHONE (949) 631-3121 - FAX (949) 631-3122 BUDGET NUMBERS FOR PROJECT SEA WALL WORK Remove wing -wall. Install 400' of seawall. Install 80' of wing -wall on west end of project to retain beach $550,000 (We haven't included dredging costs in this estimate) INSTALL NEW MARINA - Pile work (40) $64 000 Floating docks $494 500 Utilities $60,000 Gangway $4,000 Fire system $40,000 NEW DEEP WATER MARINA INCLUDING SEAWALL (We haven't included dredging costs in this estimate) REBUILD OLD MARINA Pile work $48,000 Floating docks $326,500 Utilities $50,000 Gangway $4,000 Fire system $28,000 Demolition $30,000 COST FOR REBUILT MARINA $1,202,500 $454,496 THERE ARE NO A.D.A. ALLOWANCES IN THESE COSTS. IF A LARGE RAMP IS REQUIRED (961) TO MQNaVIIZE THE SLOPE OF THE GANGWAY AT EXTREME TIDES THE COST RANGE IS $50,000 TO $100,000. THANK YOU FOR CALLING SWIFT SLIP Qu (/3 Tc, American Legion A commitment to the continued presence of the American Legion on this site represents part of the balance" the Marinapark proposal brings to the Balboa community. The Newport Harbor Post #291was established in 1924. They moved to the current site in 1936. They constructed their Hall in 1950. In 1979 it was destroyed by fire, but reconstructed in its present form just a year later. Over the years the Legion's presence has garnered great support from its neighbors. It is an integral part of the community. Under our proposal, the Legion will not be making any financial contributions for the use of the 8,600 square feet we have set aside for their new Hall. They will be responsible for their utility use, interior maintenance and other expenses will be the Legion's responsibility. Current users of the marina will continue to be able to rent slips, at a market rate. No revenue source for Marinapark has been considered from the American Legion. Ground Lease It is projected that once completed and stabilized, Marinapark will generate, before lease payments to the City, an annual NOI of $6,717,000 against a total project cost of $39,000,000. The sale of the residential element of the development will reduce the project cost to $28,801,000. The annual net revenue will be used to make ground lease payments to the City of Newport Beach, service debt, and achieve acceptable investment returns. Financial Proposal • 65 year ground lease from the City of Newport Beach. • Annual ground lease payments to the City of $2,000,000, commencing upon the cornpletion of improvements, based upon a Certificate of Occupancy. The City retains all income generated from the mobile home park and marina (prior to reconstruction) prior to commencement of the ground lease payments. • Ground Lease payments to the City adjust every five years based upon the increase in the Consumer Price Index, with a ceiling of four percent per annum. • City participates in the one time development profit from the sale of the homes. The development profit is estimated to be $7,523,700. Based upon a proposed 25% participation, the City would receive $1,880,925. • Transient Occupancy Tax is projected at $925,266 annually. • Sales tax is projected at $314,340 annually • Property Tax is estimated at $236,557 for the hotel and $494,427 from residential. The Developer would like a right of first refusal to purchase the land, and would consider an outright purchase should the City wish to sell all or part of the property. If the City would consider that approach, the Developer could prepare an offer upon request. Further Negotiations It is difficult for the Developer to specifically respond to all of the City's questions regarding form of lease guarantee (apart from the ownership's willingness to provide one), and need for subordination. With a sixty-five year lease it is unlikely that a lender will require subordination, however, the developer would like to leave the door open with regard to the subject of subordination. In summary, the developer and his team has put forward a plan which is both feasible, would provide a secure income stream from lease revenues and taxes at various levels. The development team is experienced in their respective roles in the development of Marinapark. It is the expectation of the developer that the City would work to develop and refine a more specific ground lease and general understanding of the proposal through meetings and/or further requests for information. Thank you for this opportunity. dward. and Thomas `slatkin founded the Edward Thomas Companies in 1982 in order to apply their extensive knowl- edge of the hotel industry to the acquisition and management of unique hotels, motels and resort properties. Combining a solid background in hotel management and operations with an entrepreneurial spirit and the ability to break from tradition when it makes good sense, The Edward Thomas Companies offer savvy, responsive management and years of first hand experience. The Edward Thomas philosophy is best embodied in its manage- ment structure. The Edward Thomas Companies are the antithesis of bureaucracy. Their streamlined management allows the partners to respond almost immediately to any opportunity. Since their formation, the companies have been recognized as aggressive, candid, ethical, responsive, and non-traditional. Repeat- edly, The Edward. Thomas Companies have identified hidden value in undervalued or underperforming hotels and transformed each property through expert management, restructuring, facility upgrading, and market repositioning. With a proven track record in the hotel and resort industry, The Edward Thomas Companies are currently exploring opportunities in other consumer products and service areas. TH EDWARD THOU./1AS � �OMPANIES THE EDWARD THOMAS COMPANIES CORPORATE PROFILE The Edward Thomas Companies is a privately held firm specializing in the acquisition and management of hotel real estate. Edward and Thomas Slatkin third generation hoteliers, formed The Edward Thomas Companies in 1982` ,. Today, the Beverly Hills based company owns and operates hotels in California and Utah. In 1995, in association with its partners, Goldman Sachs and Starwood Capital, The Edward Thomas Companies acquired Westin Hotels and Resorts, which included 80 hotels in 19 countries worldwide with revenues in excess of $2 billion dollars and was sold in 1998. "Shutters On The Beach Hotel" and "Hotel Casa Del Mar" in Santa Monica California are two hotels owned and operated by The Edward Thomas Companies. Both hotels are members of Leading Hotels of the World. Formerly, in association with their family, they were majority owners of the Northview Corporation which owned and operated approximately 44 hotels throughout California and were the owners of the famed Beverly Hills Hotel from 1954 until 1986. Thomas and Edward Slatkin are co -general partners of The Edward Thomas Companies. Timothy S. Dubois is President and is responsible for day to day operations of the company. Jon H. Andera is Vice President and Corporate Controller. 9950 Santa Monica Blvd., Beverly Hills, CA 90212 (310) 859-9366 Fax: (310) 859-0823 41C CASA DEL MAW II iiM �I 7VS V I I � i hr li I I III I I.I Iwl �lW'Ilw. auJ6 ;III Ili , III II IIiHi I ,I a � I16 II h.r I IIi�I l�9"nl Ihr rite r rr rc � K I. I9� I Idyll �� V I lu�ll��ll I I�i"�ii� I�ii,4, hI hr I_ p I J III I II1W����AI � I ° Fil �I GP tl' I I, Ill r' p i r„ iiiryllmlll"I i"I ^. P I d � ,I I wlnd Ir I II I I m, Hill .L �IIIIII +v N1 ........... «a 181 �u- ;Ili IYI' I II ,I I,II R III u I II` b . in dI i Y Irk y M I II�V �I ild I � IFFI !i.7 V II y tl I If'li III ,IIII � .. I II:IIII 0 d 1 IIII II � I l I'II p. will !Ill lill Mh � I IIII � I II �, III' I pua i III II II I II I I pull u!pl",I;� I . ;, IIhII"'!;gill N�I�„ nll�ll I�I�I I I I III I l u �III,II I I LI I III I � : III nl. .� � •r I{� ',.'�I � .�' '' r,; ' ,I 9Yli ,xA x I. I Ix, �� ✓< �� I �� ��� 'i,. � .. +FYI ��L, Illp I�I� �, � � �I � w ",Li yyIIII�� �� I III ,"4-. I .r •,� � .',�.. I I � � i I; I I�u'. . i � �'.�� II�I� I i��,ll P d I,, INa�l :I�.'" �.�'��,' "�i A�.� ���. I�I,��� "IIII �I ILII I I .;'IIII r I I I I I '- 1 I I I I II � lu h I I II IIII ;IVII „I, I h. IIII I��� III rll Iwl .. , IIII I (IIII IVII III �,' _ � flvlpl Il! a j I. � I I xlwmxnlommmlmmxxmmmmmnmmmxlx I � ,. Ikl .,Wu. ! IIII G I IW i v �I aul x^^ °III nl tl lii hdWluilnl.. I I I u^I mule r p r I I till II IIII I 11 I '� � I�� I I II r i l I II r a.IM WWI II III I,1 II. ��R��� M� d �� �r�Il�lr �I I� ���� uII�111NllluIll�V�IarIIIIIIIIIIIIIiI�llllllllll �� m� I ICI �I II � i IL � I � L �� ' , I. ii {I�p�, III�I�II�, I Ali i�iji ,jh� l I NI"ItiIL, IIIII IIII IIIII ._... .:.: �� IInI I III IIwIF .. . ,.. I d I r N: y ..., . L.ILI + ,W•Ip 9 :I.. I e�•,:Iwllnl II 1161. �� I IILII,:,II,L , I, „, . I I!IIIII III I I .l I . lwlnl r m' ,.'I lI �IdI� II,IP9NIIW � Ilu 111 rIl I 11 �dil � 1, �� �` Illul IIIIPI�I��IPIPI IlNdpm' �p91 II f hl l ,:: aY lggglX .:p � 'r�' tlm r�i I IRIII@ � II sr qqqqq a ww d%L �Y I I I I II I' ot % a..m iI 'I VIIIdII IUI IIUI I'..' I IIIII i' III II, .L.,. PIV pllr II Iati: p II I I III ll I Iwo • a�' `""^~w„ � � :,I � ��., I� I ,�. I, ll ��II, Ih' M r , p I III I l I' SantaMonica Beach. here, during Hollywood. Golden Era, the reigning kings and queens " -of the silent screen built their beachfront estates, private sanctuaries that were minutes i j from Los Angeles, yet ,thousands of. miles from the citys rustle and bustle. Stars like Mary - Pickford and Douglas Fairbanks, Norma Shearer, Max Sennett, even the mighty l_,ouis B. 1�1'aper'created a world of informal luxury, with every convenience close 3t Band. da ae6ae of relaxed , eganee lives on at Shutterseach, the only oceanfront lucury, F� sue" hole iba� 1 e � ture - Y� •}�. i. a: can escape the evenings coolness by sinking into an overstued chair before a f - Or find ' f rner for R is Monica famous beachfront promena o ai orE, a ops r and` p nightlife of -es. ' a� a Sant ica is again Ehe place Eo be. :. 4 Al z t ��: a tee. �' J, t c Shutters on the Beach is just a short strop from Santa Monic:+'s historic spier ,with its famous carousel. The motel offers superior facilities, including a choice of two beach - front restaurants, a lobby lounge, bar, spool and sundeck. The fully equipped Health Club has an aerobic room, massage; steam, and sauna, as well as separate men's and yeomen's locker rooms. Shutters' intimate meeting space includes three boardrooms that open onto an outdoor 4trace and The Grand Salon, a ballroom that accommodates up to 220 people for a meeting or 300 for a reception. Spacious rooms afford breathtaking views of the California coastline, while sliming shutters allow the refreshing sea breezes to waft through. You -can jog on tl►e board�wa ,, or rent a 1➢ cycle for a day of�eiauarely-exploring. -In F. every room and common area, prinfs,,#4intings and ohicts d'art-�,J 444*h of eclectic 2� 1. F { E j i s t o r W A R M I N G T O N H O M E S We have a very rich history of home building at Warmington Homes. The Warmington name represents superior value, beautiful architecture and flexible floorplans for thousands of fortunate families. Over the years, the Warmington family of companies has built approximately 26,000 homes throughout California. The Warmington companies began acquiring a reputation for building beautiful homes of exceptional quality and value with their first custom homes built in the late 1920's. That reputation has been proudly upheld from the first planned neighborhoods, developed in the 1940's, to every new community Warmington builds today. Larry Riggs - Executive Vice President Jim Warmington - Chairman of the Board Tim Hogan - President, C.E.O. Reputation, integrity, innovation, commitment, and pride. These are the qualities of the men and women who have been building homes for the Warmington family of companies for more than seven decades. Warmington Homes employs an experienced staff of professionals who manage all aspects of the home building process including land acquisition, site planning, architectural development, construction, finance, accounting, marketing, advertising, public relations, sales, and escrow coordination. division s Corporate Headquarters, Southern California/South Counties Division, Costa Mesa, CA Southern California/North Counties Division, Agoura, CA Northern California Division, San Ramon, CA Sacramento Division, Sacramento, CA Las Vegas Division, Las Vegas, NV In the finest locations throughout California and Nevada, Warmington Homes is presently developing a variety of residential projects including condominium and townhome communities, affordable single-family residences for the first-time buyer and luxury homes for the first, second and third move -up buyer. The company maintains a California presence via four division offices in specific market areas that are thought to offer the best prospects for consistent growth opportunities. A division office in Las Vegas also allows Warmington Homes to take advantage of the emerging markets in Nevada. arch i'tectu re Warmington uses only the best known and most respected architectural consultants. It should be noted that when appropriate, existing product packages are reused for cost effectiveness. However, more typically, a new product is created to perfectly meet current state-of-the-art standards, market demands, and site requirements. When developing new architecture, the goal is to create a series of floorplans that are each notably different, therefore appealing to a wide range of living styles. The street scenes often feature eclectic arrays of elevational designs that incorporate many of the elements that were shown in the very early Warmington years of custom home building. Normandy, Italian, Craftsman, and New England styles are not uncommon. A wide assortment of garage configurations are also used to further complement the diversity of the street scene. Through extensive consumer research gathered from focus groups, surveys of new home owners, and data collected from prospective new home buyers, Warmington has created a system of "value engineering" to identify specific product amenities and specifications appropriate for each market area and price range. P R E L I M I N A R Y ,haw S f: r. xl 9 S''A iVC fW •Tk b t pklug '� n �'I : .• y^iXJ° ,� .. >{ ' R•' C'. {) l P Y y� k' ,gnk j lk �'Z k W:rrr4 t '"I M u A I `k.1�i G lei rr CU I �:4F 2xt;1t_<K OJcf^t `�, 4 ='� 1 Q6k9 w'i ` Y �,'.7jr�y:. x��. �. ,.; i'n tz-1Q•,1 F �. }I �.�V3`I `��.r�"i �.',� �� � :�:u�e ..rV �' :nr.�`�h �� ".,�1' ja,,,,� f d'rJ lla �M �'rd ., la � AWN, '� n {rIE 1ttx id 1 d 44 A �-�GI 4'J'J i u+'� F rti Il Sllrr 21, atriylRyy Y w5� a .. y z• a a n �� 'rsyt,J ✓Rk-r�*" � ,�.w L�RFjJ 1k bn 2. Ak � r y 1 fi E 4 � S t I BY WARMINGTON HOMES CALIFORNIA WO B- / Sink Option PLAN TWO H04dlA PLAN TWO Approximately 4,424 square feet 3 bedrooms plus den and bonus room Master retreat 4 baths plus powder room 3 or 4-car split -garage Optional room over dining room adds approximately 204 square feet PLAN 2SC - SPANISH COLONIAL PLAN 2RM (MODEL) - MONTEREY PLAN 2S - SPANISH ---------- o - -------- F ------ Kitchen j .8 R 2 Car Garage lamlly Room F..Ily R— L---------- ------------- Nwk 11211 / Pi y �Omh��"Illl LIAg Room WOOPLAN THREE�� Second Floor WOO PLAN THREE Approximately 4,458 square feet 4 bedrooms plus den and bonus room Master retreat with deck 4 baths plus powder room 3-car split garage PLAN 3RSC (MODEL) - SPANISH COLONIAL PLAN 3M - MONTEREY PLAN 3RS - SPANISH Y C Q ZC G w 10 Covered oa Patio e.w3 _ Kitchen Nook Bedroom 3 S:mnBnon Den 7J Dluing Dm v ice Room aR A------------ r.n, --- ,,, r..e.. ' Entry ____� __ _______ 9Wdth Cd. j`p:� Mo fere)nodv � ., Sed SPneeh ' '$:Illn`anrtl rl, Family Room ____ _______________ Llrfug Room ---- A Courtyard -------- Master Bedroom ----- -,�--cd-- O O O ' Bedtoomv 4 Bedroom 4 Oquon 'Option 2 Garage . • M� i, �S a Bed— 2 M1 c r Works �,... ! First Floor PLAN ONE WOOOO PLAN ONE Approximately 3,430 square feet 3 bedrooms plus den 3 baths plus powder room 2-car garage with workspace Elevations SB and M have den 2 which adds approximately 181 square feet PLAN 1 SC (MODEL( - SPANISH COLONIAL PLAN iM - MONTEREY PLAN 15 - SPANISH PLAN 1 SB - SANTA BARBARA �ze��,�tiy�kti� �e����e2 k� ��W , • • Strongly themed exteriors featuring distinctive architectural styles • Long lasting fire resistant flat or "S" the concrete roofs • Decorative windows, wrought iron, shutters and balconies at front elevations (per plan) • Elegant eight foot themed entry doors • Dual -glazed French doors • Dual -glazed white solid vinyl windows • 3 and 4-car garages with raised panel sectional roll -up doors with glass windows (per plan) • Interior window casing detail in dining, living and master bedroom • Block or tubular steel side and rear yard fencing • Separate formal dining rooms • Elegant living rooms with optional woodburning fireplace • Family rooms with raised hearth woodburning fireplace stubbed for gas logs (per plan) • Dramatic, nine or ten foot textured ceilings A41" (604.) • Beautiful stair systems with oak handrails and footlights • Custom -styled radius bullnose corners on interior walls • Colonist interior doors with detailed casing • G.E. Professional 6-burner stainless steel gas cooktop with hood • G.E. profile white built-in self-cleaning double oven • G.E. white microwave oven • G.E. white multi -cycle dishwasher • Custom satin ivory cabinets with white interiors, concealed hinges adjustable upper shelves, and roller glide drawers • Large butler's pantry and walk-in pantry (all plans) • Convenient kitchen nooks and center islands • Ceramic tile countertops with full back splash • Kohler porcelain coated cast-iron, oversized sink with pullout faucet and disposal • Built-in recycle bins • Under cabinet lighting C4%W,4-a (CM4.) • Refrigerator space expandable to 42" • Recessed ceiling can lights • large cookware storage drawers • Upper cabinet glass doors (some areas) • Optional or second dishwasher or wine captain L.rAw:oaa Ha in S..:Yr, • 8' entry doors • Compartmental private bath/dressing area • Separate six foot Kohler brand tub with jets and ceramic tile doorless walk-in shower with seat, shampoo niche • Double basin satin ivory pullman cabinet with ceramic countertop and vanity • Kohler chrome and polished brass plumbing fixtures • Recessed ceiling can lights • Full -width, extra tall mirror and beveled glass extra tall medicine cabinet • Large walk-in closet with mirrored french doors • Leisure sitting areas (per plan) • Optional gas burning fireplace with gas logs, flame enhancer switch, and built-in N niche I �Ze�tiyf,,�i,y.,ti,Z� �el�Z�Ze� kZ ���/�%/'1✓fidi (co�Zti��.e�) • Pre -wired for cable television in all bedrooms and family rooms • Pre -wired for future satellite dish in attic • Category 5 wiring • Pre -wired for stereo sound system in living room, family room, and master suite • Ceramic the flooring in bathrooms and kitchen • Telephone outlets in all bedrooms and kitchen • Custom satin ivory cabinets in secondary baths and laundry areas • Pedestal sink in powder room • Full height recessed mirrors in bathrooms • Decorator selected lighting fixtures • Decora light switches • Stylized plant shelves • Baldwin entry door hardware with deadbolt • Dual -zone gas forced -air heating • Standard air conditioning A� Fes. f • Recirculating hot water system • Interior laundry service area with file counter, sink and cabinets • Plumbed for gas dryer hook-up • Underground utilities • Copper water lines • Concrete walkways and driveways • Garage door openers with two transmitters • 75 gallon water heater • All Kohler plumbing fixtures and faucets • Cast iron secondary bath tubs • G.E. drinking water filter system • Gas stub out for future barbecue • Prepared for soft water system Eby S fw,.4" • Exterior wall and ceiling insulation • Insulated air ducts • White solid vinyl dual -glazed windows • Weather-stripping on exterior doors • Flow control on all shower fixture heads • Water saving toilets • Pilotless gas forced -air heating • Energy -efficient gas water heater C"0,' Dy� • A full range of custom options are available through the Sales Office and Chateau Interiors. Please see your sales representative for complete details. The seller reserves the right to make changes in plans, features, prices, special offers and terms without prior notice. Square footages quoted are approximate only. Prices are not determined by square footage. All homes are subject to prior sale. All renderings, floor plans and maps are artist's conception and are not intended to be an accurate representation of buildings, fencing, walks, driveways or landscaping and are not necessarily to scale. Window locations and sizes as well as specific detailing may vary with different elevations. Tf- WM4f*- Reputation, integrity, innovation, commitment and pride. These are the qualities of the men and women.who build homes for the Warmington group. Over the years, the various companies that comprise the Warmington group have been responsible for the construction of more than 26,000 homes — from lavish custom estates for Hollywood stars and executives to extraordinary residential enclaves for a variety of California families in the most desirable locations. With the Warmington group, it is understood that today's discriminating homebuyers are searching for homes that both satisfy their desire for space and boldly proclaim their individuality, from the moment they pull into the driveway to the first step across the threshold. That is why the companies are relentless in their efforts to design and craft a diverse selection of homes, each capturing the contemporary spirit of active families while also providing traditional styling and precise detailing — at the very best possible prices. As a team of quality -oriented people, the employees of Warmington Homes California have dedicated themselves to creating exceptional, well -planned family neighborhoods. They enjoy an intimate knowledge of what home buyers are seeking — traditional yet innovative designs and high quality value — as well as,.all the very special comforts and amenities that help turn each house into a home. The employees at Warmington Homes California proudly remain steadfast in their commitment toward quality, value and service — to fulfill their customers' dreams and surpass their expectations. 1 5 o� Towns Q Tustin Ranch Rd. 0 3 m m -d a m Tustin Ranch c Golf Course 0 Jamboree Rd. 5 N A Mop not to scale 11732 Beswick Place • Tustin, CA 92782 • Fax (714)838-9481 OYou CAN SHARE THEDREAM (7/4)$39-7552 WARM1VGTON HOMES CALIFORNIA www.warmingtonhomes.com RHC C O M M U N I T I E S Marina Park Reuse Proposal Addendum Submitted to: Ms. Sharon Wood, Assistant City Manager City of Newport Beach 3300 Newport Blvd Newport Beach, California 92663 July 17, 2000 20201 S.W. BIRCH STREET, SUITE 250 • NEWFORr BEACH, CALIFORNIA 92660 • 949.224.0222 • FAX: 949.224.0223 RHC Communities Marina Park Reuse Plan Proposal Addendum A. Identification 1. Name of development entity — Marina Park Partners L.P. 2. Marina Park Partners L.P. is a California Limited Partnership 3. Project Team: Developer - Marina Park Partners L.P. General Partner - RHC Communities, LLC Financial Advisor - Paramount Pacific Realty Advisors, Steve Whyte Project Accountants - Novogradac & Co. Tax Consultant - Riordan & Mc Kinze General Counsel - Cox, Castle Nicholson, Gary Downs Architecture - Morris Skenderian & Associates Site Planing - FORMA, Van Stevens, Principal Land Use Planning / Coastal Commission Consultant - D. Bartlett & Associates Construction Management - Abacus Project Management, Russell Thompson Parking Structure — AMPCO System Parking, Jose Gutierrez, Vice President 4. Project Manager - Mr. David Rose, RHC Communities, LLC 5. Hotel Operator — Mission Inn Hotel Corporation 6. RHC Communities was the owner and successful developer of Treasure Island resort in Laguna Beach, California. Treasure Island consisted of 28 acres of Mobile Home Park and restricted access beach areas prior to RHC's acquisition. The development plan, which recently won unanimous Coastal Commission approval, involved the closure of the Mobile home park, extensive site work and the development of a five star resort, timeshares and a limited number of single family residences. Treasure Island was Laguna Beach's most contentious development project in the last twenty years. FORMA Company rovided the land use planning services and processed the coastal commission application. RHC and Merrill Lynch served as co - General Partners. RHC Communities remains one of the only developers in Orange County's history to close a mobile home park located in the coastal zone. Marina Park Proposal Addendum July 3, 2000 Page 1 of 4 7. RHC Communities owns and manages 21 mobile home parks, several of which are located within the coastal zone and are potentially affected by tidelands boundary issues. State law narrowly defines the types of uses permitted within areas designated as tidelands. RHC would be requesting the assistance of the City of Newport Beach in securing a determination allowing the mobile home to remain as a legal use in the recommended boundary report provided to the city by its consultant. RHC believes it is reasonably impractical to attempt to close and relocated the residents of Marina Park as part of the reuse plan. B. Project Description 1. Parcel Sizes: Hotel Site Parking Structure Mobile Home Park Girl Scout House Open Space 2. Project Description: 389.90 X 249.70 (2.2 acres) 276 X 110 (.69 acres) 779.80 X 249.70 (4.2 acres) Existing Site (no change) 175 X 178 .71 acres Total: 7.8 acres Hotel — 100 suites, 35 feet tall on average with terraced views of the bay, Spanish style architecture consistent with the early period of the Balboa Peninsula. On site restaurant operated by hotel proprietor. Parking Structure — 244 space, two stories with parking on two levels, Handicap accessible, concrete construction with stone facade and ivy covering non -stone areas. A landscaped parkway with trees will buffer Balboa Blvd from the parking structure and there will be park area on each end of the structure. Construction of the parking structure will be financed based on revenues at a 140% debt coverage ratio consistent with industry practice. Marina Facilities - Reconfigured marina facility to include slips in three sizes, 24, 35, and 42 feet in length. $560,000, financed via cash flow, will be spent to rehab the marina. RHC will operate and maintain the marina. Girl Scout House - RHC Communities will contribute approximately $100,000 to rehab and refurbish the Neva B. Scott Girl Scout House. We believe scouting is an important component to the success of a community as well as our proposed reuse plan. Marina Park Proposal Addendum July 3, 2000 Page 2 of 4 American Legion - RHC Communities will provide a waterfront for the American Legion facility. It shall be the Legion's responsibility to outfit the new facility to accommodate their respective uses. Open Space - Our plan defines a new tot playground and seven tenths of an acre of view corridor and open space area. A walking path will span the length of the property form 18th street to 15th street to increase pedestrian opportunities. 3. Estimated average annual revenues (excluding ground lease payments) Transient Occupancy Tax = $550,000 Retail Sales Tax = $61,200 = $611,200 The T.O.T. increase reflected in the proforma results from room rate adjustments of 2% annually. 4. See attachments for proforma information 5. See attachments 6. All redevelopment to be completed by April -May 2002 pending all agencies approvals. Please refer to original proposal for development schedule 7. Financing and equity to be secured by and subordinated RHC's land lease with the City through revenues generated by the hotel, marina, parking structure, and Mobile Home Park. Entrepreneurial Capital Corporation (Mission Inn) will provide equity and financing for the construction of the hotel facility. Estimated construction cost of hotel is $16,470,000. RHC will contribute equity and finance improvements to marina and Mobile Home Park. RHC/AMPCO parking systems will independently finance parking structure. 8. See attachments B. Ground Lease 1. RHC is requesting a non -subordinated ground lease for a period of 55 years with an option to renew for 20 years. General terms: Year 1 - $100,000 down payment, $700,000 lease payment Year 2 — Upon rehabilitation of the marina and its being placed in service, land lease payment to increase to $830,000 Following of Certificate of Occupancy for hotel land lease payments shall increase to minimum level of $1,200,000. Marina Park Proposal Addendum July 3, 2000 Page 3 of 4 ■ Minimum annual lease payment shall be no less than $1,200,000 for the duration of the lease. ■ Lease shall increase annually by CPI as published in the Wall Street Journal ■ Lease shall be paid quarterly or semi-annually (to be negotiated) 2. The City of Newport Beach shall assume a "first" position in the lease. The lease shall be guaranteed by all revenues generated from the property prior to the payment of any management fees. The lease will contain no subordination clause. Ground Lease Summary by Land Use Use Land Lease Value Hotel $357,691 Marina Facilities $129,353 Mobile Home Park $757,983 Total annual lease payment: $1,245,027 3. RHC Communities is prepared to begin submitting development documents upon execution of the lease and approvals of the City Council. 4. No pre -leasing requirements. Marina Park Proposal Addendum July 3, 2000 Page 4 of 4 Operating Proforma Hotel Marina Facilities Parking Structure Mobile Home Park Attachments AMPCO System Parking Information Girl Scout House Rehab Budget 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 Marina Paris Hotel Plan - RHC Communities Operating Pro Forma � �• . A :.. a O �., , .. , , .._Year4 <; Number of Suites 100 100 ��I , 100 Suites Occupied 25,550 25,550 25,550 25,550 Suites Available 36,500 36,500 36,500 36,500 Occupancy 70.0% 70.0% 70.0% 70.0% Average Daily Rate $200.00 $204.00 $208.08 $212.24 Revenue Per Available Room $199.00 $202.98 $207.04 $211.18 Amount Percent PAR Amount Percent PAR Amount Percent PAR Amount Percent PAR REVENUE Suites $5,084,450 99.5% $199.00 $5,186,139 99.5% $202.98 $5,316,444 99.5% $207.04 $5,395,659 99.5% $211.18 Telephone 25,422 0.5% $1.00 25,931 0.5% $1.01 26,582 0.5% $1.04 26,978 0.5%$1.06 Total $5,109,872 100.0% $200.00 $5,212,070 100.0% $203.99 $5,343,026 100.0% $208.07 $5,422,637 100.0% $212.24 DEPARTMENTAL EXPENSES Suites $549,120.60 10.8% $21.49 $687,993 13.2% $26.93 $683,907 12.8%, $26.63 $674,457 12.5% $26.40 Telephone 16,524 65.0%, $0.65 16,855 65.0% $0.66 17,278 65.0%, $1.35 17,536 65.0% $1.37 Total $565,645 11.0% $22.14 $704,848 78.2% $27.59 $701,186 77.8% $27.99 $691,993 77.5% $27.77 DEPARTMENTAL PROFIT $4,544,227 89.0% $177.86 $4,507,222 21.8% $176.41 $4,641,840 22.2% $180.09 $4,730,644 22.5% $184.47 OPERATING EXPENSES Administrative & General $162,702.40 3.2%, $6.40 $202,259 3.9%, $7.96 $202,025 3.8%, $7.91 $199,639 3.7% $7.81 Marketing 127,111 2.5% $5.00 160,770 3.1% $6.32 159,493 3.0% $6.24 156,474 2.9% $6.12 Operation & Maintenance 122,027 2.4% $4.80 155,584 3.0% $6.12 154,177 2.9% $6.03 151,078 2.8% $5.91 Utility Costs 71,182 1.4% $2.80 88,164 1.7% $3.47 90,380 1.7% $3.54 86,331 1.6% $3.38 Total $483,023 9.5% $19.00 606,778 11.7% $23.87 606,075 11.4% $23.72 $593,522 11.0% $23.23 GROSS OPERATING PROFIT $4,061,204 79.5% $158.86 $3,900,443 10.1% $152.54 $4,035,766 10.8% $156.37 $4,137,122 11.5% $161.24 FIXED EXPENSES Management $153,296 3.0%, $6.00 $156,362 3.0% $6.12 $160,291 3.0%, $6.24 $161,870 3.0% $6.34 Property Taxes 45,989 0.9%, $1.80 46,909 1.5% $3.06 69,459 1.3% $2.70 64,748 1.2% $2.53 Insurance 10,220 0.2% $0.40 10,424 0.3% $0.61 10,686 0.2% $0.42 10,791 0.2% $0.42 Annual Land Lease 357,691 7.0%, $14.00 364,845 7.0% $14.28 374,012 7.0% $14.57 377,696 7.0% $14.78 Total $567,196 11.1% $22.20 $578,540 11.8% $24.07 $614,448 11.5%, $23.93 $615,105 11.4°% $24.07 NET OPERATING INCOME $3,494,009 68.4% $136.66 $3,321,904 -1.7% $128.47 $3,421,318 -0.7% $132.44 $3,522,016 0.1% $137.16 DEBT SERVICE $1,798.439 $1,798,439 $1,798,439 $1,798,439 Transient Occupancy Tax (T.O.T) Projection $508,445.00 $518,613.90 $531,644 $539,566 Land Lease 357,691 364,845 374,012 377,696 Annual Revenues to City of Newport Beach $866,136 $883,459 $905,656 $917,262 Annual PAR Income $49,879.91 $46,891.22 $48,340.46 $50,064.01 1 of 3 55 Marina Park Hotel Plan - RHC Communities 56 Proforma Summary 57 58 59 60 Number of Suites 61 Suites Occupied 62 Suites Available 63 64 Occupancy 65 Average Daily Rate 66 Revenue Per Available Room 67 68 69 REVENUE 70 Suites 71 Telephone 72 Total 73 74 DEPARTMENTAL EXPENSES 75 Rooms 76 Telephone 77 Total 78 79 DEPARTMENTAL PROFIT 80 81 OPERATING EXPENSES 82 Administrative & General 83 Marketing 84 Operation & Maintenance 85 Utility Costs 86 Total 87 88 GROSS OPERATING PROFIT 89 90 FIXED EXPENSES 91 Management 92 Property Taxes 93 Insurance 94 Land Lease 95 Total 96 97 NET OPERATING INCOME 98 99 DEBT SERVICE 100 101 Transient Occupancy Tax (T.O.T) Projection 102 Annual Land Lease 103 Annual Revenues to City of Newport Beach 104 Annual PAR Income 105 106 107 108 ky 100 > m i... `��_ _`Fear 8 100 100 100 25,550 25,550 25,550 25,550 36,500 36,500 36,500 36,500 70.0% 70.0% 70.0% 70.0% $216.49 $220.82 $225.23 $229.74 $214.97 $219.27 $223.66 $228.13 Amount Percent PAR Amount Percent PAR Amount Percent PAR $5,492,510 99.3% $214.97 $5,602,360 99.3% $219.27 $5,714,407 99.3% $222.09 $5,828,695 99.4% $226.76 38,448 0.7% $1.50 39,217 0.7% $1.53 34,286 0.7% $1.55 34,972 0.6% 2.0983303 $5,530,957 100.0% $214.98 $5,641,576 100.0% $220.81 $5,748,694 100.0% $223.64 $5,863,667 100.0% $228.86 $686,564 12.5% $26.87 $683,488 12.2% $26.75 $680,014.45 11.9% $26.43 $676,129 11.6% $26.30 24,991 65.0% $1.40 25,491 65.0% $1.43 44,201 65.0% $1.44 37,887 65.0% $1.47 $711,555 77.5% $28.27 $708,979 77.2% $28.18 $724,215 76.9% $27.87 $714,015 76.6% $27.78 $4,819,403 22.5% $186.71 $4,932,598 22.8% $192.63 $5,024,478 23.1% $195.77 $5,149,652 23.4% $201.08 $203,223 3.7% $7.95 $201,685 3.6% $7.89 $200,004 3.5% $7.77 $198,176 3.4% $7.71 159,283 2.9% $6.23 162,468 2.9% $6.36 160,003 2.8% $6.22 157,375 2.7% $6.12 153,790 2.8% $6.02 156,866 2.8% $6.14 154,289 2.7% $6.00 151,546 2.6% $5.90 87,880 1.6% $3.44 89,638 1.6% $3.51 91,431 1.6% $3.55 87,430 1.5% $3.40 604,176 11.0% $23.65 610,657 10.9% $23.90 $605,727 10.6% $23.54 594,527 10.2% $23.13 $4,215,227 11.5% $163.06 $4,321,941 11.9% $168.73 $4,418,751 12.5% $172.23 $4,555,125 13.2% $177.95 $164,775 3.0% $6.45 $168,071 3.0% $6.58 $171,432 3.0% $6.66 $174.861 3.0% $6.80 65,910 1.2% $2.58 61,626 1.1% $2.41 57,144 1.0% $2.22 58,287 1.0% $2.27 10,985 0.2% $0.43 11,205 0.2% $0.44 11,429 0.2% $0.44 11,657 0.2% $0.45 384,476 7.0% $15.05 392,165 7.0% $15.35 400,008 7.0% $15.55 408,009 7.0% $15.87 $626,146 11.4% $24.51 $633,067 11.3% $24.78 $640,014 11.2% $24.87 $652,814 11.2% $25.40 $3,589,080 0.1% $138.56 $3,688,874 0.6% $143.95 $3,778,737 1.3% $147.36 $3,902,311 2.0% $152.55 $1, 798,439 $1, 798,439 $1, 798,439 $1, 798,439 $549,251 $537,585 $571,440.71 $682,889.94 384,476 270,662 400,008 408,009 $933,727 $808,247 $971,449 $1,090,899 $50,572.88 $52,542.13 $53,785.27 $55,682.11 2of3 109 Marina Park Hotel Plan - RHC Communities 110 Proforma Summary 111 112 113 114 Number of Suites 115 Suites Occupied 116 Suites Available 117 118 Occupancy 119 Average Daily Rate 120 Revenue Per Available Room 121 122 123 REVENUE 124 Rooms 125 Telephone 126 Total 127 128 DEPARTMENTALEXPENSES 129 Rooms 130 Telephone 131 Total 132 133 DEPARTMENTAL PROFIT 134 135 OPERATING EXPENSES 136 Administrative & General 137 Marketing 138 Operation & Maintenance 139 Utility Costs 140 Total 141 142 GROSS OPERATING PROFIT 143 144 FIXED EXPENSES 145 Management 146 Property Taxes 147 Insurance 148 Annual Land Lease 149 Total 150 151 NET OPERATING INCOME 152 153 DEBT SERVICE 154 155 Transient Occupancy Tax (T.O.T) Projection 156 Land Lease 157 Annual Revenues to City of Newport Beach 158 Annual PAR Income 159 160 161 162 100 100 25,550 25,550 36,500 36,500 70.0% $234.33 $232.69 Amount Percent PAR 70.0% $239.02 $237.35 Amount Percent PAR $5,945,269 99.4% $232.93 $6,064,175 99.4% $237.58 35,672 0.6% $1.40 36,385 0.6% $1.43 $5,980,941 100.0% $234.32 $6,100,560 100.0% $239.01 $671,815 11.3% $26.32 $685,252 11.3% $26.85 3,864,425 65.0% $1.51 3,941,713 65.0% $1.54 $4,536,240 76.3% $27.83 $4,626,965 76.3% $28.39 $1,444,700 23.7% $206.49 $1,473,594 23.7% $210.62 $196,194 3.3% $7.69 $200,118 3.3% $7.84 160,522 2.7% $6.29 163,733 2.7% $6.41 154,577 2.6% $6.06 157,669 2.6% $6.18 89,179 1.5% $3.49 90,963 1.5% $3.56 600,472 10.1 % $23.53 612,482 10.1 % $24.00 $844,228 13.6% $182.96 $861,113 13.6% $186.62 $178,358 3.0% $6.99 $181,925 3.0% $7.13 59,453 1.0% $2.33 60,642 1.0% $2.38 11,891 0.2% $0.47 12,128 0.2% $0.48 416,169 7.0% $16.30 424,492 7.0% $16.63 $665,870 11.2% $26.09 $679,188 11.2% $26.61 $178,358 2.4% $156.88 $181,925 2.4% $160.01 $1,798,439 $594,526.92 416,169 $1,010,696 $57,259.59 $1.798,439 $606,417.46 424,492 $1,030,910 $58,404.78 3of3 1 Marina Park 15th Street Marina Facilities 2 Operating Pro Forma 3 4iedtYer, 5 6 Number of Boat Slips 44 44 44 44 44 44 44 44 44 44 7 Occupancy 95.0% 95.0% 95.0% 95.0% 95.0% 95.0% 95.0% 95.0% 95.0% 95.0% 8 Combined Average Slip Rent $984.25 $1,003.94 1024.0137 1044.49397 1065.38385 1086.69153 1108.42536 1130.59387 1153.20575 1176.26986 9 (adjusts 2% annually) 10 11 REVENUE 12 13 Slip Fees $519,684 $530,078 $640,679 $551,493 14 Late Fees $1,440 $1,468.80 $1,498.18 $1,528.14 15 Interest Income $380 $387.60 $395.35 $403.26 16 17 Total Revenues $521,504 $531,934 $542,573 $553,424 18 19 OPERATING EXPENSES 20 21 Operations & Maintenance (35%) 182,526 186,177 189,900 193,698 22 Utility Costs (9%) 46,935 47,874 48,832 49,808 23 Management (5%) $26,075.20 $26,596.70 $27,128.64 $27,671.21 24 Replacement Reserves $7,260.00 $7,260.00 $7,260.00 $7,260.00 25 26 Total $262,797 $267,908 $273,121 $278,438 27 28 NET OPERATING INCOME $258,707 $264,026 $269,452 $274,986 29 30 LAND LEASE PAYMENT TO CITY $129,353.52 $132,014.21 $134,727.07 $137,494.20 31 32 DEBT SERVICE FOR REHAB COST $89,438.00 $89,438.00 $89,438.00 $89,438.00 33 34 PARTNERSHIP REVENUES $39,915.52 $42,574.17 $45,287.03 $48,054.16 35 36 37 38 Boat Slip Details Quantity Cost Per Foot Monthly Gross Slip fee 39 40 24 Foot Slips 11 $12.50 3300 $300.00 41 35 Foot Slips 11 $13.75 $5,293.75 $481.25 42 42 Foot Slips 22 $14.50 $13,398.00 $609.00 43 44 Combined average slip fee $984.25 45 Monthly Revenues Total 21991.75 46 47 48 49 50 $562,523 $573,773 $585,249 $596,954 $608,893 $621,070 $1,558.70 $1,589.88 $1,621.67 $1,654.11 $1,687.19 $1,720.93 $411.32 $419.55 $427.94 $436.50 $445.23 $454.14 $564,493 $575,783 $587,298 $599,044 $611,025 $623,246 197,572 201,524 205,554 209,665 213,859 218,136 50,804 51,820 52,857 53,914 54,992 56,092 $28,224.64 $28,789.13 $29,364.91 $29,952.21 $30,551.25 $31,162.28 $7,260.00 $7,260.00 $7,260.00 $7,260.00 $7,260.00 $7,260.00 $283,861 $289,393 $295,036 $300,792 $306,662 $312,650 $280,631 $286,389 $292,262 $298,253 $304,363 $310,595 $140,316.66 $143,195.57 $146,132.06 $149,127.28 $152,182.41 $155,298.64 $89,438.00 $89,438.00 $89,438.00 $89,438.00 $89,438.00 $89,438.00 $50,876.62 $53,755.53 $56,692.02 $59,687.24 $62,742.37 $65,858.60 M 1 Marina Park Parking Proforma 2 & Operating Summary 3 4 244 Spaces - open 8 am to 10 pm daily 5 6 7 Gross Annual Revenues 8 Expenses 9 10 Net Operating Income 11 12 Base Rent to Developer 13 Percentage Rent to Developer 14 Total 15 16 Debt Service $597,290 $609,235.80 $621,420.52 $633,848.93 $646,525.90 $659,456.42 $672,645.55 $686,098.46 $699,820.43 $713,816.84 $92,986 $94,845.72 $96,742.63 $98,677.49 $100,651.04 $102,664.06 $104,717.34 $106,811.69 $108,947.92 $111,126.88 $504,304 $514,390.08 $524,677.88 $535,171.44 $545,874.87 $556,792.37 $567,928.21 $579,286.78 $590,872.51 $602,689.96 $190,934 $194,752.68 $198,647.73 $202,620.69 $206,673.10 $210,806.56 $215,022.70 $219,323.15 $223,709.61 $228,183.80 $235,028 $239,728.56 $244,523.13 $249,413.59 $254,401.87 $259,489.90 $264,679.70 $269,973.30 $275,372.76 $280,880.22 $425,961 $434,480.22 $443,169.82 $452,033.22 $461,073.89 $470,295.36 $479,701.27 $489,295.30 $499,081.20 $509,062.83 $235,593 $235,593 $235,593 $235,593 $235,593 $235,593 $235,593 $235,593 $235,593 $235,593 17 Total $190,368 18 20 21 22 1 Construction Cost Estimate $2,440,000 23 ICost to Construct Per Space $10,000 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 $194,175.36 $198,058.87 $202,020.04 $206,060.45 $210,181.65 $214,385.29 $218,672.99 $223,046.45 $227,507.38 1 Marina Park Mobile Home Park 2 Operating Pro Forma 3 4 5 6 Number of Mobile Home Spaces 7 Occupancy 8 Combined Average of Space Rents 9 10 11 REVENUE 12 13 MHP Space Rent 14 Late Fees 15 Interest Income 16 17 Total Revenues 18 19 20 OPERATING EXPENSES 21 22 Operations & Maintenance 23 Utility Costs 24 Management 25 Capital Reserves 26 27 Total 28 29 NET OPERATING INCOME 30 31 LAND LEASE PAYMENT TO CITY 32 33 PARTNERSHIP REVENUES 34 35 36 37 38 39 40 61 61 61 61 61 61 61 61 61 61 97.0% 97.0% 97.0% 97.0% 97.0% 97.0% 97.0% 97.0% 97.0% 97.0% 1647 1679.94 1713.5388 1747.80958 1782.76577 1818.42108 1854.7895 1891.88529 1929.723 196 8.31746 $1,205,604 $1,229,716 $1,254,310 $1,279,397 $1,304,985 $1,331,084 $1,357,706 $1,384,860 $1,412,557 $1,440,808 $1,440 $1,468.80 $1,498.18 $1,528.14 $1,558.70 $1,589.88 $1,621.67 $1,654.11 $1,687.19 $1,720.93 $460 $469.20 $478.58 $488.16 $497.92 $507.88 $518.03 $528.40 $538.96 $549.74 $1,207,504 $1,231,654 $1,256,287 $1,281,413 $1,307,041 $1,333,182 $1,359,846 $1,387,043 $1,414,783 $1,443,079 241,501 246,331 251,257 256,283 261,408 266,636 271,969 277,409 282,957 288,616 48,300 49,266 50,251 51,257 52,282 53,327 54,394 55,482 56,591 57,723 $72,450.24 $73,899.24 $75,377.23 $76,884.77 $78,422.47 $79,990.92 $81,590.74 $83,222.55 $84,887.00 $86,584.74 $3,050.00 $3,050.00 $3,050.00 $3,050.00 $3,050.00 $3,050.00 $3,050.00 $3,050.00 $3,050.00 $3,050.00 $365,301 $372,546 $379,936 $387,474 $395,162 $403,005 $411,004 $419,163 $427,485 $435,974 $842,203 $859.108 $876,351 $893,939 $911,879 $930,177 $948,842 $967,880 $987,298 $1,007,105 $757,982.52 $773,198.09 $788,716.93 $804,546.15 $820,691.95 $837,160.67 $853,958.76 $871,092.82 $888,569.56 $906,395.83 $84,220.28 $85,909.77 $87,634.08 $89,392.88 $91,186.86 $93,016.72 $94,883.17 $96,786.96 $98,728.82 $100,709.51 1of1 AMPCO SYSTEM PARKING Corporate Headquarters 808 South Olive Street Los Angeles, CA 900014-3097 Telephone (213) 624-6085 Executive Fax (213) 312-2104 Marina Park Parking Proposal Submitted to: Mr. Richard Hall, President RHC Communities 20201 S.W. Birch Street Suite 250 Newport Beach, California 92660 July 13, 2000 OUR PROPOSAL MARINA PARK July 2000 TERM Ampco System Parking proposes a 5-year term with an automatic 5-year renewal. MANAGEMENT AGREEMENT WITH INCENTIVE BASED FEE Base Fee Ampco System Parking proposes a base management fee of Two Thousand dollars ($2,000.00) per month. Incentive Fee In addition to the monthly base management fee, Ampco System Parking proposes an incentive fee, equal to Five Percent (5%) of gross revenue in excess of $597,000 per year. Note that we have consolidated our management fee structure into one all- inclusive fee that includes; • Regional and Branch Supervision • Operations Managers • Corporate and Regional Overhead • Customer Service Support • Consulting Services Other Support Services Payroll Processing/Accounting Employee Training • Postage Travel Expenses Dues and subscriptions DESIGN/CONSULTING SERVICES Over the years, Ampco System has provided consulting services to developers, property owners, and managers on a variety of subjects including revenue control equipment, signs and graphics, traffic flow, as well as ADA evaluations, to name a few. From the pre -construction planning phases to major retrofits, with and without assistance from architects, Ampco System has participated in every aspect of parking design and consultation. Consistent with our past efforts,we will provide these services to RHC Communities. as part of our monthly management fee. Along this line, we have also developed many valuable working relationships with local vendors who are more than willing to become part of our consulting team to ensure that ownership is presented with a comprehensive shopping list of ideas from which to choose. Although additional costs may be borne if an outside firm(s) AMPCO SYSTEM PARKING is engaged, we are certain their services will be provided at a cost far lower than that which RHC Communities can obtain independently. CONDITIONS By the fifteenth of each month, Ampco System Parking shall provide RHC Communities with a complete detailed statement of income and expenses, along with the vouchers to support all approved expenditures for the prior period. Amoco System Parking shall be reimbursed by RHC Communities for all operational expenses including labor, insurance, payroll burden, tickets, equipment maintenance, supplies, sweeping, equipment repairs, uniform cleaning, business tax and licenses, and all other expenses deemed necessary for the operation of the parking facility. PROPOSED LEASE Base Rent. Ampco System Parking agrees to pay RHC Communities a base rent in the amount of $190,934 per year. Percentage Rent. Ampco System Parking shall pay as additional rent Seventy Five percent (75%) of the adjusted gross revenue (revenue after city parking and gross receipts taxes if applicable) in excess of $283,920 per year. The projected rent for the proposed five-year term is $2,268,288. CONDITIONS Ampco shall pay for all day-to-day operating expenses. RHC Communities shall pay for all property taxes, property insurance, elevator maintenance, and any major facility repair. Final lease contract will be subject to the approval of our Board of Directors. AMPCO SYSTEM PARKING ESTIMATE OF MONTHLY INCOME AND ASSOCIATED ASSUMPTIONS MARINA PARK (2003 Dallars) July 2000 Outside Parker Revenue Jan-03 Feb-03 Mar-03 Apr-03 May-03 Jun-03 Jul-03 Au0-03 Sep-03 Oc4-03 Nov-03 Dec-03 Totals Average V of CarsiDay _ 2D 20 50 50 75 100 ISO 150 100 50 JD :)0 Total Outside Parker Revenue 4.960 4,480 12,400 12,000 18,600 24,000 37,200 36,000 24,000 12,400 4,800 4,960 155,500 Consolidated Revenues Jan-03 Feb-03 Mar-03 Apr-03 May-03 Jun-03 Jul-03 Aug-03 Sap-03 Oct-03 Nov-03 Dac-03 Totals Ovemight Hotel Guest S 24,100 5 21,840 8 24 180 4D S 23 0 S 24,160 3 23,400 $ 24,130 5 23,400 S 23,400 S 24,100 S 23 400 S 24180 S 253 920 Ban uesl Guest 5 C1,000 $ 7,840 8 0,000 5 B ODO % 5,000 5 6,DO0 S 6 060 5 8.000 $ 3,009 S 8,060 S D 000 5 a.080 s 96 20 kmp4oyms 5 1250 S 1.250 5 1,250 5 1,250 S 2,500 $ 2,500 S 25D0 S 2.500 S 2500 S 125D 5 1,250 S 1 50 S 21,2S0 OvtsideParkerRevenue S 4,960 5 4,480 5 12,400 S 12,000 S 18,600 S 24,D00 S 37,2DO $ 36,000 $ 24,000 S 12.400 S 4.800 S 4.960 i 195,sDD I Total Ravanua f 31,470 S 35,41D S 45.910 $ 44,650 - $ 53,360 S 57,900 S 71,960 S 69,900 S 'S7,900 S 45,910 $ 27,450 S 38,470 $ 597.290 ESTIMATE OF MONTHLY INCOME AND ASSOCIATED ASSUMPTIONS MARINA PARK (2003 Dollars) July 2000 Ovemlght Hotel Guest Assumptions Jan-03 Feb-03 Mar-03 Apr-03 M2y-03 Jun-03 Jul-03 Aug-01 Sep-03 Oct-03 Nov-03 Dec-03 Totals Total Number of Rooms 100 1D0 100 100 100 100 100 100 100 1D0 too 100 Assumed Level of Occu snc 80% 80% 50% 90% 80% 60%. 80% 60% 80% 80% 80% 80%. Number of Raoms lXtyi "ed Pet Day 80 Bd BO 80 80 80 80 6o 80 80 80 80 De sin Month 31 28 31 30 31 30 31 30 30 31 30 31 364 Perrmte a of Guests With Vehicles 65% 65% 65% 65% 55% 65% 65% 65%' 65% 651/6 65% 65% Total Numl>er of VshlCles 1,012 1,456 1.612 1.560 1.612 1 560 1.812 1.560 1 S60 1.512 1,560 1.612 11,223 Self ParisinqRate S 15 $ 15 S 15 S /5 S 15 $ 15 S 15 $ 15 3 15 3 15 S 15 S 15 Total 0-might Guest Rownue S 24,130 3 Z1,840 S 24,190 S 23.400 3 24,15o S 23,400 S 24,1110 3 23,400 S 23400 S 24,150 S 23.400 S 24,130 S 263,920 Banquet Guest Ass. mptions Jan-03 Feb-01 Mar-03 Apr-03 May-03 Jun-03 Jul-03 Aug-03 Sep-03 Oct-03 Nov-03 Dec-03 Totals Number of Meals Rreakfast 155 140 155 150 155 150 155 150 150 155 150 155 1 820 Number o! Nleals: Lunch 310 230 310 300 310 300 310 300 300 310 300 310 3,640 Number c1 Meals. Dinner 1.400 1,400 1400 1,400 1.400 1,4D0 1,400 1,400 1.400 100 1,400 1 4D0 15,800 Number of Pcr m in Vehiek: Smakfast 1.5 1.5 1 5 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5 Number of Persons in Vehicle: Lunch Number of Persona in Vehicle: Dinner 1.5 2.0 1.5 2.0 1.5 2.0 15 2.0 15 20 1.5 2.0 1.5 2.0 1.5 2.0 1.5 2.0 1.5 Z.0 1.5 2.0 1.5 2.0 Number or Vehicles: Bmskfasl 103 93 103 100 103 100 103 100 100 103 100 103 1211 Number of VehicJea- Lunch 207 187 207 200 207 200 207 200 200 207 200 207 242E Number of Vehdes: Dinner 700 700 700 700 7D0 700 7D0 70D 700 700 7D0 700 9400 TMal Number of Vehicles 1010 NO 1010 1000 1010 1D00 1010 1000 1000 1010 1000 101D 12040 Sol( Pwking Rale $ B.00 $ &00 S B.00 3 8.00 3 6.00 4 8.00 $ B.DD S 9.00 S 8.00 $ 8.00 $ 8.00 S 8.00 Toul Ben uet Revenue S 9,080 S 7,540 S 2,090 3 8,00D S 8,080 S 8,000 3 S,oso S 8,000 $ 9,000 5 9,08D S 2,000 S 6,080 S 96.320 Employee Parking Assumptions Jan-03 Fsb-03 Mar-03 Apr-03 May-03 Jun-03 Jul-03 Au9-03 Sep-03 UC&Ui nov-ua uec-va Number otE 1 sea 25 25 25 25 50 50 50 50 So 25 25 25 R21e S 50 S 50 S 50 S 50 S 50 S 50 S 50 3 50 S 50 S 50 S R50 3 50 IAA ^��n� Tc=Emp1oyee Reven.s 1,250 1,250 1,250 1,2S0 2.500 2,500 2,50D 2.500 2A00 1,250 1,259 1,250 21,25D AMPCO SYSTEM PARKING Marina Park LOCATION PROFORMA BUDGET -....... .... ... _._......_.._ ........................_ :::..-::..-::k::. „-m.. ... ............ .......:/.. 1...4.....41.... ... S.v>:v:. .... .. ... .. ...... '2':5.. ...5^�6•\+1... .>f..}.. Y. AI,: [::c:4»YJ.}. FIRST 12 MONTHS REVENUESt(mt ofMx) 1 2 3 4 5 6 7 1 8 9 10 11 12 TOTAL OVERNIGHTGUESTS $24.180 $21,840 $24.180 $23,400 S24,180 $23.400 $24,180 $23,400 $23400 $24.180 $23.400 $24.183 $283,920 BANQUET REVENUE $8,080 $7.940 S6080 S8,0W 58,08U $8,000 $8,080 58,000 58.000 38,080 36.000 $0.000 '+96,320 EMPLOYEE PARKING $1,250 $1,250 $1,250 $1,250 $2500 $2500 SZ500 SZ500 $2,500 $1.250 $1250 S12W $21.250 OUTSIDE PARKERS $4,960 $4,480 $12.400 $12,000 518,600 S24,000 $37,200 $36.000 $24,000 S12,400 $4,800 $4,960 S195.800 GROSS RECEIPTS $38.470 $35,410 $45,910 $44.6501 $53,360 $57,900 $71,950 S69,900 S57,900 $45,910 $37.450 S38,470 $597,290 TAX TOTAL REVENUES EXPENSES' $38.470 $35,410 $45910 S44,850 $53,360 $57,900 $71960 56Q900 S57,900 $45,910 $37.450 S38,470 I $597,290 DIRECT EXPENSE: WAGES S3,300 S3,300 S3,300 $3.300 $3.300 $3.300 $3 300 S3,300 S3.300 $3 300 S3,300 S3 300 $39,600 VACATION ACCRUAL S142 $142 5142 $142 S142 5142 $142 3142 3142 $142 1142 3142 51,703 SICK LEAVE ACCRUAL TOTAL DIRECT LABOR $3,442 $3.442 $3,442 $3,442 $3,442 53,442 $3,442 93,442 $3.442 53,442 S3,442 53,442 $41,303 WORKER'S COMP S340 S340 $340 S340 $340 S340 $340 S340 $340 $340 S340 $340 $4.085 PAYROLLTAX $367 S367 S367 S367 S367 $367 S167 S367 1 $367 5367 $367 S367 1 $4,399 TOTAL LABOR $4,149 S4,149 $4.149 54,149 $4,149 $4.149 $4.149 $4.149 34,149 J$800 S4,149 S4,149 54.149 549,786 HEALTH &WELFARE $500 $600 $600 $600 $600 $600 S600 S600 $600 $600 5800 S7.200 PENSION UNIFORMS&LAUNDRY 5150 $150 $150 $150 5150 $150 $150 $150 S150 S150 $150 $150 $1800 INSURANCE -PLPO $500 5500 t $500 5500 $500 S500 $500 S500 5500 5500 3500 5500 S8.000 DAMAGE CLAIMS LIC & PERMITS $60 $50 $50 $50 $50 $50 S50 550 S50 $50 S50 $50 $600 REP.& MAINT $450 $450 5450 S4W $45U 5450 $450 5450 $450 $450 54;0 3450 $5,400 UTILITIES S1,500 $1.500 S1,500 S1,500 S1,500 51500 $1,500 $1.500 S1500 $1,500 $1,500 $1,500 $18.000 TELEPHONE 3100 $100 3100 $100 $100 $100 8100 $100 5100 $100 1100 S100 $1,200 SIGNS $50 $50 $50 $50 $50 550 $50 550 $50 $50 $50 $50 U00 OFFICE SUPPLIES $100 $100 5100 5100 $100 $100 $100 51[A1 1 $100 $100 5100 $100 $1 200 FORMS & PRINTING $100 $100 5100 $100 5100 $100 $100 $100 5100 5100 $100 5100 $1.200 EQUIPMENT AMORTIZATI CREDIT CARD FEES TOTAL OTHER DIRECT $3,600 $3.600 S3,600 S3,600 $3,600 $3.600 S3,600 S3,600 $3.600 $3,600 $3,600 S3.15W $43200 TOTAL DIRECT EXPENS S7,749 S7,749 $7,749 $7,749 $7,7491 $7,7491 $7.7491 $7,749 $7.749 1 S7.7491 S7,749 57,749 592986 NET RECEIPTS $30.721 $27.661 $38.161 $36,901 $45,611 $50.151 $64.211 $62,151 550,151 53B,151 529,7r11 $30.721 3504,304 MINIMUM RENT 13 15.911 1 1 15.911 5 15.911 is 15,511 8 15,511 Is 15.911 Is 15.911 1 15,911 is 16.911 S 16,011 5 15.011 S 16,011 S100,934 PERCENTAGE RENT 1 511,108 $8,813 1 $16,688 1 $15,743 1 $222761 $25,6801 $38,225 1 $34.880 1 $25,6801 $16,688 L $10,343 I S11,108 $235,028 TOTAL RENT 1 $27.0191 $24,724 1 S32,599 1 $31,654 1 $38.1861 $41.591 1 $52,136 1 $50,591 1 541,591 1 $32.599 I 526,254 I S27,019 S425,861 AMr4.V .JT.? I =IVI rr4nnrnSa v y . i..... .. .- . ... ..... _ Marina Park LOCATION PROFORMA BUDGET INCOME GROWTH INFLATION REVENUES: 2003 3.0% 3.0% 3.0% 3.0% 2.0% 2.0% 2.0% 2.01/6 2004 2005 2006 2007 HOTEL GUEST $ 263.920 S 292,438 $ 301,211 $ 310,247 $ 319,554 TRANSIENT $ 96320 $ 99,210 $ 102,186 $ 105,251 $ 108,409 VALIDATIONS $ 21.250 $ 21,88B S 22,544 $ 23,22D $ 23.917 CAR WASH S 195800 S 201,674 S 207,724 $ 213,956 $ 220,375 GROSS RECEIPTS $ 597290 $ 615,209 S 633,665 $ 652,675 $ 672,255 , PARKING TAX $ $ $ S $ $ S - TOTAL REVENUES EXPENSES: DIRECT EXPENSE: $ 597.290_1 S 615,209 $ 633,565 S '52,675 $ 672,255 WAGES $ 39.600 $ 40,392 $ 41,200 S 42,024 S 42,864 VACATIONACCRUAL $ 1.703 $ 1,737 $ 1,772 $ 1,807 S 1,843 SICK LEAVE ACCRUAL $ . $ - 3 . $ S TOTAL DIRECT LABOR S 41,303 $ 42,129 $ 42,971 S 43,831 S 44,707 WORKER'S COMP $ 4,085 $ 4,167 $ 4,250 $ 4,335 S 4,422 PAYROLL TAX $ 4,399 $ 4,467 $ 4,576 $ 4,668 S 4,761 SF PAYROLL TAX $ - S $ $ S TOTAL LABOR $ 49,786 S 50,782 $ 51,798 $ 52.834 S 53,890 HEALTH & WELFARE $ 7.200 S 7.344 $ 7,491 $ 7,641 $ 7,794 PENSION $ S $ $ $ UNIFORMS & LAUNDRY $ 1,800 S 1,835 $ 1,873 $ 1,910 $ 1,946 INSURANCE -PLPD $ 6,000 1 S 8,120 $ 6,242 $ 6.367 $ 6,495 DAMAGE CLAIMS $ - S $ - $ $ LIC & PERMITS $ 600 $ 612 S 624 $ 637 $ 549 REP, & MAINT $ 5,400 S 5.508 S 5,618 $ 5,731 $ 6,645 UTILITIES $ 18,000 $ 18.360 S 16.727 $ 19.102 $ 19,484 TELEPHONE $ 1,200 1 $ 1,224 S 1,248 $ 1.273 $ 1,299 SIGNS $ 600 $ 612 S 624 $ 637 $ 649 OF=ICE SUPPLIES $ 1,200 $ 1,224 S 1,240 $ 1.273 $ 1,299 FORMS & PRINTING S 1,200 $ 1,224 S 1,248 1 $ 1,279 $ 1,299 EQUIPMENT AMORTI7ATIO S $ - 5 - $ . $ CREDIT CARD FEES S $ - s . $ $ TOTAL OTHER DIRECT $ 43,20D $ 44,064 S 44,945 $ 45.644 S 46,761 $ TOTAL DIRECT EXPENSE1 $ 92,986 1 $ 94,646 S 96,743 S 98,678 S 100,651 NET RECEIPTS $ 504,304 $ 520,363 $ 536,922 S 553,997 $ 671,604 MINIMUM RENT PERCENTAGE RENT $ 190.934 $ 190.934 $ 190,934 $ 190,931 $ 190,84 S 235,028 S 248,467 $ 262,309 $ 270,68 23 TOTAL RENT $ 42E,961 I S 439,400 $ 453,242 $ 437.500 $ 482,185 Total $ 1.507,370 $ 511,376 $ 112,819 $ 1,039,529 $ 3.171,094 S $ 3,171.094 AMPCO SYSTEM PARKING RHC COMMUNITIES Neva B. Scott - Girl Scout House Rehab Newport Beach, CA Number of Square Feet 3,944 Construction Start 11/01/00 Project Acquisition 09/01/00 Construction Complete 02/01/01 Line Item Quantity Unit Total Per Number Description of Work Ln-Ft/Num Cost Cost Sq. Ft ARCHITECTURAL & ENGINEERING Architectural Plans 1 1,500 1,500 0.38 Permits (City) Request fee waiver 1 0 Q 0.00 Total 1,500 0.38 SITE IMPROVEMENTS Landscaping 1 2,200 2,200 0.56 Irrigation 1 300 300 0.08 Pavement Repairs & Replacement 1 1,300 1,300 0.33 Concrete Walks 1 975 975 0.25 Storm Drainage System -Hydro Jet 1 290 290 0.07 Signage 1 1,000 1,000 0.25 Wood Fensing Replacement 1 600 600 0.15 Miscellaneous 1 100 100 0.03 Total 6,765 1.72 ROOFS & GUTTERS Re -Roof all buildings 1 4,970 4,970 1.26 Rain Gutters 1 640 6440 0,16 Total 5,610 1.42 BUILDING INTERIORS Stucco Repairs 1 900 900 0.23 Dry Rot Wood Damage 1 2,000 2,000 0.51 Exterior Doors Replacement 4 600 2,400 0.61 Exterior Paint 1 3,400 3,400 0.86 Window Replacement (Quanity needs final count) 9 300 2,700 0.68 Key & Locks 6 24 144 0.04 Miscellaneous 1 100 100 0,03 Total 11,644 2.95 BUILDING INTERIORS Carpeting 1 980 980 0.25 Flooring (tile) 1 2,900 2,900 0.74 Kitchen -Counters 1 400 400 0.10 Kitchen -Refrigerators 1 900 900 0.23 Kitchen -Range 1 1,100 1,100 0.28 Kitchen -Garbage Disposals 1 65 65 0.02 Paint 1 1,600 1.600 0.41 Total 7,945 2.01 PLUMBING Slab Leaks 1 350 350 0.09 Waste & Sewer Lines (Hydro -jet) 1 500 500 0.13 Miscellaneous 1 100 190 Q,.Q,g Total 950 0.24 ELECTRICAL Exterior Security Lighting 8 70 560 0.14 Exterior Lighting 10 25 250 0.06 Replacement of Sub -Panels 1 900 QQQ Qm Total 1,710 0.43 7/17100, 11:03 AM/Marina Park GS House Rehab Budget Page 1 of 2 RHC COMMUNITIES Neva B. Scott - Girl Scout House Rehab Newport Beach, CA Number of Square Feet 3,944 Construction Start 11/01/00 Project Acquisition 09/01/00 Construction Complete 02/01/01 Line Item Quantity Unit Total Per Number Description of Work Ln-Ft/Num Cost Cost Sq. Ft MISCELLANEOUS Fire Extinguashers 4 90 360 0.09 Miscellaneous 1 100 100 Qm Total 460 0.12 TOTAL HARD CONSTRUCTION COSTS 30,974 8 7/17/00, 11:03 AM/Marina Park GS House Rehab Budget Page 2 of 2 7 SECTION B 0RA.&NGE Ot.& T Frl*d4y WWW.LATIMES.COM/OC JUNE16,2000 fSo� Angeles c�ime� Model for Developers: Treasure Island's OK by Coastal Commission By SEEMA MEHTA, TIMES STAFF WRITER The California Coastal Commission's approval of the Treasure Island project in South Laguna Beach was what some are calling a textbook case of how to develop the coast. Unlike acrimonious divisions on other projects, the developer of Treasure Island, environmental foes and commission staff were able to resolve major differ- ences and move forward. While not everyone was sat- isfied, most were pleased by the unprecedented pro- tection of the ocean. "This is the wave of the future. We're at the cross- roads where we can't continue to do business —or pol- lution —as usual," said Susan Jordan of the League for Coastal Protection. "It's also important because it showed that a constructive relationship can occur be- tween developers and the commission when they're Please see MODEL, B8 MODEL: Laguna Project Continued from B3 working toward a common goal of sound, sane development [and] protection of coastal resources." Other less cooperative develop- ers ought to follow the Athens Group's lead, she added. Commissioners said they sup- ported the $150-million, five-star resort and housing project because of a laundry list of conditions agreed to in advance by Athens Group of Phoenix. Those condi- tions include stringent water quality requirements, public access to beaches and coves that have been off-limits for decades, and ac- cess for the disabled. "I hope this becomes the stand- ard" for development, said Com- missioner Shirley Dettloff, also a Huntington Beach city council- woman. CoastKeeper Speaks in Favor of Project The 275-room hotel, 17 homes and 14 condominiums on 30 acres were approved by the Laguna Beach City Council in February. Orange County CoastKeeper, Vil- lage Laguna, the South Laguna Civic Assn. and two individuals ap- pealed the city's approval to the commission, which trumps local government. But by Wednesday's meeting, CoastKeeper was speaking in favor of the project because the devel- oper agreed to major diversion of water runoff and a five-year moni- toring program. "Whenever we can come to- gether at the table and reach com- promise and take steps toward cleaner water, we'll support a proj- ect," said Garry Brown of the Orange County CoastKeeper. "We're not against development. We're not against growth. We're against polluting the marine habi- tat." Michael Beanan, vice president of the South Laguna Civic Assn., said group members are pleased with the concessions they gar- nered. "Without our appeal, none of the more stringent water quality [con- ditions] would have been required . they're the most stringent in California. Nor would the amenities have been extended for the pub- lic." Activists said including picnic tables was crucial to allow lower in- come and multi -generational fami- lies to enjoy the bluff -top park. Athens plans to begin construc- tion in August and finish in two years. The commission's approval marks the eqd of a four-year saga that included hot debates at local meetings, a costly referendum and, finally, a long public hearing in Santa Barbara that drew dozens of passionate Orange County resi- dents before the commission. There were still opponents in the audience at Wednesday night's meeting. Toni Iseman, the only Laguna Beach City Council member to op- pose the resort, said the project re- mains too big, blocks public views and takes up some of Laguna Beach's last "sacred space." Iseman was one of about 40 peo- ple signed up to speak Wednesday at the hearing, which didn't begin until 8 p.m. Dozens of proponents wearing blue and white "I support Treasure Island" buttons, and op- ponents waving banners had waited since morning to speak. Tom Ahern, president of Laguna Beach's Chamber of Commerce, strongly supported the project. "This ... will bring high -quality visitors to Laguna Beach. It will stop the downward slide of more T- shirt shops and honky-tonk," he said. Ann Christoph, a Village Laguna board member and former Laguna Beach mayor, said some of the con- ditions, such as a bluff -top setback of 45 feet, were victories. However, she felt the staff and commission didn't have time to address other issues, such as the massive amount of grading. "It was just too late an hour, an unfortunate time of day to be get- ting into more details," she said. "The citizens who worked on this fought a valiant battle —it's not easy to be ... continuously .. . working against the developer and your own city." "The things we did achieve were really quite remarkable, consider- ing what we were up against," Christoph added, citing the con- sultants, attorney, architects, and landscapers the developer brought to the meeting. -IU 1 - 1 / - vv -- . -._.• Marcus Millichap Real Estate investment Brokerage Company One Lakeshore Centre 3281 F... Guastl Road Suite 900 Ontario, C&9176► July 17, 2000 Tel: 909 605 18M Fax: W9 605 1832 Mr. Richard Hall RHC Communities, LLC 20201 SW Birch Street Suite 250 Newport Beach, CA 92660 Qffces tbmugbout rbe u„rredsrores Reference: Marina Park Hotel Site. Balboa Peninsula, Newport Beach, CA Dear Richard: Thank you for the opportunity to review RHC Communities development proposal for a boutique hotel at the Marina Park Site on Balboa Peninsula. My client, Entrepreneurial Capital Corporation, has successfully owned and operated the Mission Inn for more than ten years. We believe the Marina Park Site has significant potential as a boutique hotel if run by a proven operator. The Mission Inn is a world famous hotel that is synonymous with quality and tradition. Recognized as a National and State Historic Landmark, the Mission Inn embraces the past while ensuring the needs of every guest are well attended. Similarly, we are excited about building a new facility at Marina Park that will embrace the cultural and historical influences of the Balboa Peninsula. Please consider this a formal letter of interest as you move forward with your developmental proposal. Given the exceptional location and numerous amenities surrounding the site, we believe a very successful partnership can be created between RHC Communities and the Mission Inn. Your track record of success particularly with Treasure Island in Laguna Beach is quite motivating to Entrepreneurial Capital Corporation as a prospective partner. We are providing the additional information we have previously discussed for your consideration, Please contact me directly with any questions. Sincerely, Marc Millichap n R nhardt YRES HOTEL GROUP • A Y R E S SINCE 1905 Marina Park Hotel/Residential 9 Development by the Ayres Group " - bo/�/edio„ ol'Spr,7lern �n�r,rra. lvvi�i „n . COUNTRY INNS & SUITES BY AIRES Alpine • Cardiff by the Sea • Corona • Corona West • Costa Mesa - Diamond Bar Grapevine - Ontario Airport - Ontario at the Mills Moll • Orange • San Clemenle - Yorbo Linda 355 Bristol Street + Suile F + Costa Mesa • California 92626 • Office: 714. 549. 0300 • Facsimile: 714. 850. 0302 ' �.countysuites.com I ( 14 Jt LJP Ilk P441 Ayres Group - Photos t 0 L l op v'41tor _Jr 'CIO I (_ Mil o , Ar 10 t _*� A— 0 y er 1 II V R t , _ f e m' I Of I. .. r . 4 A.Idendflcadon A. Identification 1. Ayres Hotel Group 355 Bristol Street, Suite A, Costa Mesa, CA 92626 Ayres Homes 2. Ownership Structure Corporation 3. Developer's Team Developer: Ayres Group, 355 Bristol St, Suite A, Costa Mesa Architect: Robert Tuttle, 27001 La Paz Road, Suite 446, Mission Viejo 4. Project Manager 5. Name of Operator 6. Development projects Hotels. - Firm rn1P Douglas Ayres, (714) 540-6060 ext. 125 Ayres Hotel Group — now managing 15 properties Country Inn & Suites Newport Beach 325 Bristol Street, Costa Mesa, CA 92626 Country Suites at the Mills Mall 4370 Mills Circle, Ontario, CA 92764 Country Suites Mission Viejo 28941 Los Alisos Blvd, Mission Viejo, CA 92692 * 12 other hotel locations Developer, Lender (None), Consulting (In-house) Homes: La Quinta Fairways Golf Course Community Carlsbad by the Sea Newport Shores — 400 homes Custom Home: 1730 Antigua Way, Npt Beach *Also, 20,000 single family homes throughout Southern California Firm rn1P Developer, Lender (None), Consulting (In-house and Forma Planning) 7. Familiarity with tidelands Consultant — Forma Planning, Irvine, CA Experience Country Inn — Alpine (99 rooms) 1251 Tavern Road, Alpine, CA 91901 Date began operations: 7/86 Country Inn — Cardiff by the Sea (103 rooms) 1661 Villa Cardiff Drive, Cardiff, CA 92007 Date began operations: 5/85 Country Inn — Corona (102 rooms) 2260 Griffin Way, Corona, CA 91719 Date began operations: 9/90 Country Suites — Corona West (115 rooms) 1900 Frontage Road, Corona, CA 91720 Date began operations: 2/99 Country Suites by Ayres — Diamond Bar (102 rooms) 21951 Golden Springs Dr., Diamond Bar, CA 91765 Date began operations: 2/98 Country Inn — Grapevine (74 rooms) 9000 Country Side Court, Lebec, CA 93243 Date began operations: 3/97 Country Inn — Newport Beach (176 rooms) 325 Bristol Street, Costa Mesa, CA 92626 Date began operations: 5/86 Country Suites — Newport Beach (1 13 rooms) 345 Bristol Street, Costa Mesa, CA 92626 Date began operations: 10/88 Country Side Suites — Ontario (107 rooms) 204 N. Vineyard, Ontario, CA 91764 Dote began operations: 4/91 Country Suites at the Mills Mall (139 rooms) 4370 Mills Circle, Ontario, CA 91764 Date began operations: 8/98 Country Suites by Ayres — Ontario (167 rooms) 1945 Molt Blvd., Ontario, CA 91764 Date began operations: 1 /95 LJ 0 B. Project Description l .F 1 „ ��� �, � � 3� � _ �y ," � 6 1 .. _ �' N �' b B. Project Description 1. Parcel Sizes 25 X 80 2. Project Description The proposed property is a mixed -use development comprised of a residential and Hotel/Resort component. Marina Resort shall have 85 Guest Suites, a small portion of units would be placed on the boulevard (8) and the balance would be on the bayfront. The preliminary concept includes two buildings; one situated to take advantage of the views of the bayfront and Newport Coast, the other will be plotted with views toward Cannary Village. Amenities: Tennis, swimming, sailing, kayaking, and surfing. Spa: The resort would also have a spa component, which will include facial, wraps, massages, etc. 3. Market Analysis 4. Plans and Performa are based on our many years of experience in building homes and Hotel Projects. This knowledge spans 4 generations nearly a century (since 1905). 5. Development Schedule Site plan and development. - Approval: June 2001 Permits: February 2002 Opening of Hotel: June 2002 Opening of Homes: June 2002 6. Financing - Ayres Group 5p 0 a W S m m N 0 � i 1�'p•ia IRV Z Rb } }:g�ii '� ■ pyil F g V ■ Fig Q n C ■ ■ • ■ ziccnF T FEr � it i i t 15TH STREET k AYRES GROUP HOTEt Q BALBOA PENINSULA PROPERTY ■ :5�as 9 Residential Proforma Leased Lots Marina Park Prepared for Ayres Group By: David K. Landes O'Donnell/Atkins Company U u H p, N =zv �o d J� L d � F" C Y O � u � F J Q �a U a r d � OA 61 nt = L C L y Qa O d � a IN 7 L a 1J� 0 a 0 0 z C 0 E_ I� W Q 1� v � r O V O A a� cli � a 00 'n 00 `7 N oC M 't 1-1cl ` N M M ^ . OC C N .0 ) V) V r r V) o V) V) V1n V) ) V 1n) V) V) s9 V) o r c N oio yr vri o0 0Oo 00 00 a` N 00 M N V1 V) V) 69 V) Vi V) Vi 1-1- M 1n C ul O 00 � r ^) C r M N ? - O •-.: ri � M � Vi � a N- V) V) (.i ul) V) ul v/ V) V) - rnIn oo oOOo O `7 fV ^ — N W) M of V) V) V) V) V) V) 1.9 1-1 V) o o o v, o o In In r C ClW) N 'o w N IC O O_ C� C M M r^ M M C 10 000 V) V) V) V) 0 0 Vi Vl 69 oog��$goo VC, oo vC r V V) 69 N V1 ^; V) r m Vl V1 1n 8 8 1n V"t Vl r r r^^ r r r x x x x x x x x 0 0 vl �n O O r C in M M N N M M x M M �jsj... 33(-. s j-s- (3--.3{-. {{s- ooa0003ao N N N N -� 1n 2255 rl N N 1V O O O O O O QQ 11. QQ W V) V) V) 1n 14 CA 2 un b 3 J v C NQ4 M Ma�pp M 0 O v s n m 3 ^ N M 11 c c cC a E 0 N C Y O7 C c 0 O LAND RESIDUAL Project: Marina Park Product Type: SFD on 2250 SQ FT Lots, 30' x 75' Units: Lots 1-5 (Leased Land) Location Newport Beach Revenue Gross Revenue Site Plan 7/17/00 [lase Acres: Avg Sq Ft: 2500 Absorb / Mo: l Tot Sq Ft: 12500 7/17/2000 1 1 $1,600,000 2500 $640.00 $1,600,000 21,62% 2 4 $1,450,000 2500 $580.00 $5,800,000 78.38% 3 4 5 Subtotal 5 $1,480,000 2500 $592.00 $7,400,000 100.00% Premium Location 1 $0 $0 0.00% Average $0 $0 0.00% Subtotal Gross Revenue $1,480,000 $7,400,000 100.00% Closing Costs Warranty $11,100 $55,500 0.75% % Rev Closing $19,050 $95,250 1.29% Per DU Discounts $0 $0 0.00% Per DU Subtotal Closing Costs $30,150 $150,750 2.04% Total Net Revenue $1,449,850 $7,249,250 97.96% Project Costs t Finishing Government Fees (Including school fees) $22,000 $ l 10,000 1.49% Per DU Land Improvement - Offsites $5,000 $25,000 0.34% Per DU Land lrnprovement - Onsites $18,000 $90,000 1.22% Per DU Rec / Amenities / Common Area $2,000 $10,000 0.14% Per DU Subtotal Finished Lot Costs $47,000 $235,000 3.18% Construction Costs Building Construction (Directs) $110.00 $275,000 $1,375,000 18.58% Per Sq Ft Indirect Contt / General Conditions $2.50 $6,250 $31,250 0.42% Per Sq Ft Soft Costs $1.50 $3,750 $18,750 0.25% Per Budget Contingency $1.00 $2,500 $12,500 0.17% Per SgFt Subtotal Construction Costs $115.00 $287,500 $1,437,500 19.43% Other Costs Marketing $44,400 $222,000 3.00% % Of Rev Interest Expense & Land Carry $62,900 $314,500 4.25% % Of Rev Finance $18,500 $92,500 1.25% % Of Rev Property Taxes $4,144 $20,720 0.28% Per DU HOA $1,036 $5,180 0.07% Per DU G & A $44,400 $222,000 3.00% % Of Rev Subtotal Other Costs $175,380 $876,900 11.85% Total Costs $509,880 $2,549,400 34.45% % Of Rev Builder Profit $296,000.00 $1,480,000 20.00% % Of Rev 1 ^nd Residual $643,970 $3,219,850 43.51% % Of Rev i ..dshed Lot Cost $690,970 46.69% MH Project: Marina Park Acres: Product Type: SFD on 2250 SQ FT Lots, 30' x 75' Avg Sq Ft: 2500 Units: Lots 7-11 (Leased Land) Absorb / Nlo: I Location Newport Beach Tot Sq Ft: 12500 Revenue Gross Revenue Site Plan 7/17/00 Base 1 1 $1,100,000 2500 $440,00 $1,100.000 22,45% 2 4 $950,000 2500 $380.00 $3,800,000 77.55%n 3 4 5 Subtotal 5 $980,000 2500 $392.00 $4,900,000 100.00% Premium Location 1 $0 $0 0.00% Average $0 $0 0.00% Subtotal Gross Revenue $980,000 $4,900,000 100.00% Closing Costs Warranty $7,350 $36,750 0.75% % Rev Closing $12,800 $64,000 1.31% Per DU Discounts $0 $0 0.00% Per DU Subtotal Closing Costs $20,150 $100,750 2.06% Total Net Revenue $959,850 $4,799,250 97.94% Project Costs Lot Finishing Government Fees (Including school fees) $22,000 $110,000' 2.24% Per DU Land Improvement - Offsites $5,000 $25,000 0.51 % Per DU Land Improvement - Onsites $18,000 $90,000 1.84% Per DU Rec / Amenities / Common Area $2,000 $10,000 0.20% Per DU Subtotal Finished Lot Costs $47,000 $235,000 4.80%n Construction Costs Building Construction (Directs) $90.00 $225,000 $1,125,000 22.96% Per Sq Ft Indirect Const / General Conditions $2.50 $6,250 $31,250 0.64% Per Sq Ft Soft Costs $1.50 $3,750 $18,750 0.38% Per Budget Contingency $1.00 $2,500 $12,500 0.26% Per Sq Ft Subtotal Construction Costs $95.00 $237,500 $1,187,500 24.23% Other Costs Marketing $29,400 $147,000 3.00% % Of Rev Interest Expense & Land Carry $41,650 $208,250 4.25% % Of Rev Finance $12,250 $61,250 1.25% % Rev Property Taxes $2,744 $13,720 0.28% Per DU HOA $686 $3,430 0.07% Per DU G & A $29,400 $147,000 3.00% % Of Rev Subtotal Other Costs $116,130 $580,650 11.85% Total Costs $400,630 $2,003,150 40.88% % Of Rev Builder Profit $196,000.00 $980,000 20.00% % Of Rev Land Residual $363,220 $1,816,100 37.06% % Rev Finished Lot Cost $410,220 41.86% Project: Marina Park Acres: Product Type: SFD on 1875 SQ FT Lots, 25' x 75' Avg Sq Ft: 2200 Units: Lots 6 and 12 (Leased Land) Absorb / Nlo: 1 Location Newport Beach Tot Sq Ft: 2200 Revenue Gross Revenue Site Plan 7/17/00 Base 1 1 $1,000,000 2200 $454.55 $1,000,000 62.50% 2 1 $600,000 2200 $272.73 $600,000 37.50% 3 4 5 Subtotal 2 $800,000 2200 $727.27 $1,600,000 100.00% Premium Location 1 $0 $0 0.00% Average $0 $0 0.00% Subtotal Gross Revenue $800,000 $1,600,000 100.00% Closing Costs Warranty $6.000 $12,000 0.75% % Rev Closing $10.550 $21,100 1.32% Per DU Discounts $0 $0 0.00% Per DU Subtotal Closing Costs $16.550 $33,100 2.07% Total Net Revenue $783,450 $1,566,900 97.93% Project Costs Lot Finishing Government Fees (Including school fees) $22.000 $44,000 2.75% Per DU Land Improvement - Offsites $5,000 $10,000 0.63% Per DU Land Improvement - Onsites $18,000 $36,000 2.25% Per DU Rec / Amenities / Common Area $2,000 $4,000 0.25% Per DU Subtotal Finished Lot Costs $47,000 $94,000 5.88% Construction Costs Building Construction (Directs) $90.00 $198,000 $396,000 24.75% Per Sq Ft Indirect Const / General Conditions $2.50 $5,500 $11,000 0.69% Per Sq Ft Soft Costs $1.50 $3.300 $6,600 0.41% Per Budget Contingency $1.00 $2,200 $4,400 0.28% Per Sq Ft Subtotal Construction Costs $95.00 $209,000 $418,000 26.13% Other Costs Marketing $24,000 $48,000 3.00% % Of Rev Interest Expense & Land Carry $34.000 $68,000 4.25% % Of Rev Finance $10,000 $20,000 1.25% % Of Rev Property Taxes $2,240 $4,480 0.28% Per DU HOA $560 $1,120 0.07% Per DU G & A $24,000 $48,000 3.00% % Of Rev Subtotal Other Costs $94,800 $189,600 11.85% Total Costs $350,800 $701,600 43.85% % Of Rev Builder Profit $160,000.00 $320,000 20.00% % Of Rev Land Residual $272,650 $545,300 34.08% % Of Rev Finished Lot Cost $319,650 39.96% Project: Marina Park Acres: Product 'Type: SFD on 2500 SQ FT Lots, 25' x 100' Avg Sq Ft: 2500 Units: Lots 13-23 (Leased Land) Absorb / 11to: I Location Newport Beach Tot Sq Ft: 27500 Revenue Gross Revenue Site Plan 7/17/00 Base 1 2 3 4 5 Subtotal 1 $700,000 2500 $280.00 $700,000 10.45% 10 $600,000 2500 $240.00 $6,000,000 89.55% 11 $609,091 2500 $243.64 $6,700,000 100.00% Premium Location 1 $0 $0 0.00% Average $0 $0 0.00% Subtotal Gross -Revenue $609,091 $6,700,000 100.00% Closing Costs Warranty $4,568 $50,250 0.75% % Of Rev Closing $8,164 $89,800 1.34% Per DU Discounts $0 $0 0.00% Per DU Subtotal Closing Costs $12,732 $140,050 2.09% Total Net Revenue $596,359 $6,559,950 97.91% Project Costs Lot Finishing Government Fees (Including school fees) $22,000 $242,000 3.61 % Per DU Land Improvement - Offsites $5,000 $55,000 0.82% Per DU Land Improvement - Onsites $18,000 $198,000 2.96% Per DU Rec / Amenities / Common Area $2,000 $22,000 0.33% Per DU Subtotal Finished Lot Costs $47,000 $517,000 7.72% Construction Costs Building Construction (Directs) $60.00 $150,000 $1,650,000 24.63% Per Sq Ft Indirect Const / General Conditions $2.50 $6,250 $68,750 1.03% Per Sq Ft Soft Costs $1.50 $3,750 $41,250 0.62% Per Budget Contingency $1.00 $2,500 $27,500 0.41 % Per Sq Ft Subtotal Construction Costs $65.00 $162,500 $1,787,500 26.68% Other Costs Marketing $18,273 $201,000 3.00% % Of Rev Interest Expense & Land Carry $25,886 $284,750 4.25% % Of Rev Finance $7,614 $83,750 1.25% % Of Rev Property Taxes $1,705 $18,760 0.28% Per DU HOA $426 $4,690 0.07% Per DU G & A $18,273 $201,000 3.00% % Rev Subtotal Other Costs $72,177 $793,950 11.85% Total Costs $281,677 $3,098,450 46.25% % Rev Builder ProCt Land Residual Finished Lot Cost $121,818.18 $1,340,000 20.00% % Rev $192,864 $2,121,500 31.66% % Rev $239,864 39.38% Project: Marina Park Acres: Product Type: SFD on 3000 SQ Fr Lots, 30' x 100' Avg Sq Ft: 2500 Units: Lots 24-30 (Leased Land) Absorb / 11io: 1 Location Newport Beach Tot Sq Ft: 17500 Revenue Gross Revenue Site Plan 7/17/00 Base 1 6 $750,000 2500 $300.00 $000,000 87,38% 2 1 $650,000 2500 $260.00 $650,000 12.62% 3 4 5 Subtotal 7 $735,714 2500 $294.29 $5,150,000 100.00% Prendum Location 1 $0 $0 0.00% Average $0 $0 0.00% Subtotal Gross Revenue $735,714 $5,150,000 100.00% Closing Costs Warranty $5,518 $38,625 0.75% % Of Rev Closing $9,746 $68,225 1.32% Per DU Discounts $0 $0 0.00% Per DU Subtotal Closing Costs $15,264 $106,850 2.07% Total Net Revenue $720,450 $5,043,150 97.93% Project Costs Lot Finishing Government Fees (Including school fees) $22,000 $154,000 2.99% Per DU Land Improvement - Offsites $5,000 $35,000 0.68% Per DU Land Improvement - Onsites $18,000 $126,000 2.45% Per DU Rec / Amenities / Common Area $2,000 $14,000 0.27% Per DU Subtotal Finished Lot Costs $47,000 $329,000 6.39% Construction Costs Building Construction (Directs) $60.00 $150,000 $1,050,000 20.39% Per SgFt Indirect Const / General Conditions $2.50 $6,250 $43,750 0.85% Per Sq Ft Soft Costs $1.50 $3,750 $26,250 0.51% Per Budget Contingency $1.00 $2,500 $17,500 0.34% Per Sq Ft Subtotal Construction Costs $65.00 $162,500 $1,137,500 22.09% Other Costs Marketing $22,071 $154,500 3.00% % Of Rev Interest Expense & Land Carry $31,268 $218,875 4.25% % Of Rev Finance $9,196 $64,375 1.25% % Of Rev Property Taxes $2,060 $14,420 0.28% Per DU HOA $515 $3,605 0.07% Per DU G & A $22,071 $154,500 3.00% % Of Rev Subtotal Other Costs $87,182 $610,275 11.85% Total Costs $296,682 $2,076,775 40.33% % Of Rev Builder Profit $147,142.86 $1,030,000 20.00% % Rev Land Residual $276,625 $1,936,375 37.60% % Of Rev Finished Lot Cost $323,625 43.99% Project: Marina Park Acres: Product Type: SFD on 2250 SQ FT Lots, 30' x 75' Avg Sq Ft: 2500 Units: Lots 31-33 (Leased Land) Absorb / Mo: Location Newport Beach Tot Sq Ft: 7500 Revenue Gross Revenue Site Plan 7/17/00 Base 1 2 3 4 5 Subtotal 2 $950,000 2500 $380.00 $1,900.000 63.33% 1 $1,100,000 2500 $440.00 $1,100,000 36.67% 3 $1,000,000 2500 $400.00 $3,000,000 100.00%n Premium Location 1 $0 $0 0.00% Average $0 $0 0.00% Subtotal Gross -Revenue $1,000,000 $3,000,000 100.00% ibl anill Warranty $7,500 $22,500 0.75% % Rev Closing $13,050 $39,150 1.31% Per DU Discounts $0 $0 0.00% Per DU Subtotal Closing Costs $20,550 $61,650 2.06% Total Net Revenue $979,450 $2,938,350 97.95% Project Costs Lot Finishing Government Fees (Including school fees) $22,000 $66,000 2.20% Per DU Land Improvement - Offsites $5,000 $15,000 0.50% Per DU Land Improvement - Onsites $18,000 $54,000 1.80% Per DU Rec / Amenities / Common Area $2,000 $6,000 0.20% Per DU Subtotal Finished Lot Costs $47,000 $141,000 4.70% Construction Costs Building Construction (Directs) $90.00 $225,000 $675,000 22.50% Per Sq Ft Indirect Const / General Conditions $2.50 $6,250 $18,750 0.63% Per Sq Ft Soft Costs $1.50 $3,750 $11,250 0.38% Per Budget Contingency $1.00 $2,500 $7,500 0.25% Per Sq Ft Subtotal Construction Costs $95.00 $237,500 $712,500 23.75% Other Costs Marketing $30,000 $90,000 3.00% % Of Rev Interest Expense & Land Carry $42,500 $127,500 4.25% % Of Rev Finance $12,500 $37,500 1.25% % Rev Property Taxes $2,800 $8,400 0.28% Per DU HOA $700 $2,100 0.07% Per DU G & A $30,000 $90,000 3.00% % Of Rev Subtotal Other Costs $118,500 $355,500 11.85% Total Costs $403,000 $1,209,000 40.30% % Of Rev Builder Profit $200,000.00 $600,000 20.00% % Of Rev Land Residual $376,450 $1,129,350 37.65% % Of Rev Finished Lot Cost $423,450 42.35%, Project: Marina Park Acres: Product Type: Multifamily Lot 4,125 55' x 75' Avg Sq Ft: 1100 Units: Lot 34 (Leased Land) Absorb / Dlo: 1 Location Newport Beach Tot Sq Ft: 4400 Revenue Gross Revenue Site Plan 7/17/00 Base 1 2 3 4 5 Subtotal 1 $1,600.000 4400 $363.64 $1,600,000 100.00% 1 $1,600,000 1100 $363.64 $1,600,000 100.00% Premium Location I $0 $0 0.00% Average $0 $0 0.00% Subtotal Gross Revenue $1,600,000 $1,600,000 100.00% Closing Costs Warranty $12,000 $12,000 0.75% % Rev Closing $20,550 $20,550 1.28% Per DU Discounts $0 $0 0.00% Per DU Subtotal Closing Costs $32,550 $32,550 2.03% Total Net Revenue $1,567,450 $1,567,450 97.97% Project Costs Lot Finishing Government Fees (Including school fees) $22,000 $22,000 1.38% Per DU Land Improvement - Offsites $5,000 $5,000 0.31 % Per DU Land Improvement - Onsites $18,000 $18,000 1.13% Per DU Rec / Amenities / Common Area $2.000 $2,000 0.13% Per DU Subtotal Finished Lot Costs $47,000 $47,000 2.94% Construction Costs Building Construction (Directs) $50.00 $55,000 $55,000 3.44% Per Sq Ft Indirect Const / General Conditions $2.50 $2,750 $2,750 0.17% Per Sq Ft Soft Costs $1.50 $1,650 $1,650 0.10%n Per Budget Contingency $1.00 $1,100 $1,100 0.07% Per SgFt Subtotal Construction Costs $55.00 $60,500 $60,500 3.78% Other Costs Marketing $48,000 $48,000 3.00% % Of Rev Interest Expense & Land Carry $69,000 $68,000 4.25% % Of Rev Finance $20.000 $20,000 1.25% % Of Rev Property Taxes $4,480 $4,480 0.28% Per DU HOA $1,120 $1,120 0.07% Per DU G & A $48,000 $48,000 3.00% % Of Rev Subtotal Other Costs $189,600 $189,600 11.85% Total Costs $297,100 $297,100 18.57% % Of Rev Builder Profit $320.000.00 $320,000 20.00% % Of Rev Land Residual $950,350 $950,350 59.40% % Of Rev Finished Lot Cost $997,350 62.33% Project: Marina Park Acres: Product Type. SFD on 2250 SQ Fl- Lots, 30' x 75' Avg Sq Ft: 2500 Units: Lots 35-39 (Leased Land) Absorb / Mo: I Location Newport Beach Tot Sq Ft: 12500 Revenue Gross Revenue Site Plan 7/17/00 Base f '4 $1,450,000 3500 $2111640 $7,290'oon 100.0onb 2 3 4 5 Subtotal 5 $1,450,000 > 2500 $580.00 $7,250,000 100.00% Premium Location 1 $0, $0 0.00% Average $0 $0 0.00% Subtotal Gross Revenue $1,450,000 $7,250,000 100.00% Closing Costs Warranty $10,875 $54,375 0.75% % Of Rev Closing $18,675 $93,375 1.29% Per DU Discounts $0 $0 0.00% Per DU Subtotal Closing Costs $29,550 $147,750 2.04% Total Net Revenue $1,420,450 $7,102,250 97.96% Project Costs Lot Finishing Government Fees (Including school fees) $22,000 $110,000 1.52% Per DU Land Improvement - Offsites $5,000 $25,000 0.34% Per DU Land Improvement - Onsites $18,000 $90,000 1.24% Per DU Rec / Amenities / Common Area $2,000 $10,000 0.14% Per DU Subtotal Finished Lot Costs $47,000 $235,000 3.24% Construction Costs Building Construction (Directs) $110.00 $275.000 $1,375,000 18.97% Per Sq Ft Indirect Contt / General Conditions $2.50 $6,250 $31,250 0.43% Per Sq Ft Soft Costs $1.50 $3,750 $18,750 0.26% Per Budget Contingency $1.00 $2,500 $12,500 0.17% Per Sq Ft Subtotal Construction Costs $115.00 $287,500 $1,437,500 19.83% Other Costs Marketing $41500 $217,500 3.00% % Of Rev Interest Expense & Land Carry $61,625 $308,125 4.25% % Of Rev Finance $18,125 $90,625 1.25% % Of Rev Property Taxes $4,060 $20,300 0.28% Per DU HOA $1,015 $5,075 0.07% Per DU G & A $43,500 $217,500 3.00% % Of Rev Subtotal Other Costs $171,825 $859,125 11.85% Total Costs $506,325 $2,531,625 34.92% % Of Rev Builder Profit $290,000.00 $1,450,000 20.00% % Rev Land Residual $624,125 $3,120,625 43.04% % Rev Finished Lot Cost $671,125 46.28% Project: Marina Park Acres: Product Type: SFD on 2625 SQ FT Lots, 35' x 75' Avg Sq Ft: 2500 Units: Lot 40 (Leased Land) Absorb / Nlo: 1 Location Newport Beach Tot Sq Ft: 2500 Revenue Gross Revenue Site Plan 7/17/00 are 1 1 $1,650,000 2500 $660.00 $1,650,000 100.00% 2 3 4 5 Subtotal 1 $1,650,000 2500 $660.00 $1,650,000 100.00% Premium Location 1 $0 $0 0.00% Average $0 $0 0.00% Subtotal Gross Revenue $1,650,000 $1,650,000 100.00% Closing Costs Warranty $12,375 $12,375 0.75% % Rev Closing $21,175 $21,175 1.28% Per DU Discounts $0 $0 0.00% Per DU Subtotal Closing Costs $33,550 $33,550 2.03% Total Net Revenue $1,616,450 $1,616,450 97.97% Project Costs Lot Finishing Government Fees (Including school fees) $22,000 $22,000 1.33% Per DU Land Improvement - Offsites $5,000 $5,000 0.30% Per DU Land Improvement - Onsites $18,000 $18,000 1.09% Per DU Rec / Amenities / Common Area $2,000 $2,000 0.12% Per DU Subtotal Finished Lot Costs $47,000 $47,000 2.85% Construction Costs Building Construction (Directs) $110.00 $275,000 $275,000 16.67% Per Sq Ft Indirect Const / General Conditions $2.50 $6,250 $6,250 0.38% Per Sq Ft Soft Costs $1.50 $3,750 $3,750 0.23% Per Budget Contingency $1.00 $2,500 $2,500 0.15% Per Sq Ft Subtotal Construction Costs $115.00 $287,500 $287,500 17.42% Other Costs Marketing $49,500 $49,500 3.00% % Of Rev Interest Expense & Land Carry $70,125 $70,125 4.25% % Of Rev Finance $20,625 $20,625 1.25% % Of Rev Property Taxes $4,620 $4,620 0.28% Per DU HOA $1,155 $1,155 0.07% Per DU G & A $49,500 $49,500 3.00% % Of Rev Subtotal Other Costs $195,525 $195,525 11.85% Total Costs $530,025 $530,025 32.12% % Of Rev Builder Profit $330,000.00 $330,000 20.00% % Of Rev Land Residual $756,425 $756,425 45.84% % Of Rev Finished Lot Cost $803,425 48.69% Newport Beach - Balboa Island Income Summary Projections Room Count Rooms Occupied Rooms Available Occupancy Average Daily Rate Rooms Revenue Per Available Room REVENUE Rooms Telecommunications Total DEPARTMENTALEXPENSES Rooms Telecommunications Total DEPARTMENTAL PROFIT Year 10 Year 2 Year 3 83 83 83 29,689 22,721 24.539 302% 30,295 30.295 98.0% 75% 81% 220.00 180.00 185.00 215-W 135.00 149-85 Amount ' Percent PAR POR Amount Percent PAR POR Amount Percerd PAR POR $ 6,531.602 99.51% $ 215.60 $ 220.00 $ 4,089,825 99.2% S 135.00 $ 180.00 $ 4.539,706 992% $ 149.85 $ 185.00 30.000 0.5% 0.99 1.01 33.000 0.8% 1.09 1.45 36.300 0.8% 1.20 1.48 $ 6,561.602 100.0% $ 216.59 $ 221.01 $ 4.122,825 100.0% $ 136.09 $ 181.45 $ 4,576,006 100.0% $ 151.05 $ 186.48 S 705.116 10.8% $ 23.28 $ 23.75 S 539,630 13.2% $ 17.81 $ 23.75 $ 582,800 12.8% $ 19.24 S 23.75 19.500 65.0% 0.64 0.66 21.450 65.0% 0.71 0.94 23.595 65.0% 0.78 0.96 $ 724.616 11.0% $ 23.92 S 24.41 $ 561,080 13.6% S 18.52 $ 24.69 $ 606.395 133% S 20.02 $ 24.71 S 5.836.986 89.0% S 192.67 S 196.60 $ 3.561,745 86.4% $ 117.57 S 156.76 $ 3.969.611 86.7% S 131.03 $ 161.77 UNDISTRIBUTED OPERATING EXPENSES Administrative & General $ 207.824 32% S 6.86 $ 7.00 Marketing 166,259 2.5% $ 5.49 5.60 Property Operation & Maintenance 160.321 2.4% $ 5.29 5.40 Utility Costs 93.521 1.4% $ 3.09 3.15 Total 627,924 9.6% S 20.73 $ 21.15 GROSS OPERATING PROFIT FIXED EXPENSES Management Fees Property Taxes Insurance Land Lease Total NET OPERATING INCOME $ 159,049 3.9% S 5.25 $ 7.00 127.239 3.1 % $ 4.20 5.60 122.695 3.0% $ 4.05 5.40 71.572 1.7% $ 2.36 3.15 480.554 11.7% $ 15.86 $ 21.15 $ 171,T73 38% S 5.67 S 7.00 137,418 3.0% $ 4.54 5.60 132.510 29% $ 4.37 5.40 77.298 1.7% $ 2.55 3.15 518.999 11.3% S 17.13 S 21.15 $ 5.209.061 79.4% $ 171.94 $ 175,45 $ 3,081.191 74.7% S 101.71 $ 135.61 S 3.450.612 75.4% $ 113.90 S 140.62 S 196.848 3.0% $ 6.50 $ 6.63 $ 123.685 3.0% S 4.08 $ 5.44 $ 137.280 3.0% $ 4.53 $ 5.59 60.000 0.9% 1.98 2.02 60,000 1.5% 1.98 2.64 60.000 1.3% 1.98 2.45 11.000 02% 0.36 0.37 11.000 0.3% 0.36 0.48 11.000 02% 0.36 0.45 328.080 5.0% 10.83 11.05 206,141 5.0% 6.80 9.07 228.800 5.09'0 7.55 9.32 $ 595.928 9.1% S 19.67 S 20.07 $ 400,826 9.7% $ 1323 $ 17.64 $ 437,080 9.6% $ 14.43 $ 17.81 $ 4.613.133 70.3% S 152.27 S 155.38 $ 2.680.365 65.0% S 88.48 S 117.97 $ 3.013.531 65.9% S 99.47 S 122.81 Occupancy Tax Projection S 653,160 $ 408.983 S 453,971 Land Lease 328.080 206,141 - 228,800 -• - $ 981.240 S 615,124 S 682,T71 Page 1 Newport Beach - Balboa Island Income Summary Projections Room Count Rooms Occupied Rooms Available Occupancy Average Daily Rate Rooms Revenue Per Available Room REVENUE Rooms Telecommunications Total DEPARTMENTAL EXPENSES Rooms Telecommunications Total DEPARTMENTAL PROFIT Year 4 Year 5 Year 6 83 83 83 25.751 26.357 27.568 30295 30,295 30295 85% 87% 91% 190.00 190.00 195A0 161.50 165.30 177.45 Amount Percent PAR POR Amount Percent PAR POR Amount Peraerd PAR POR $ 4.892.643 99.3% S 161.50 $ 190.00 $ 5.007,764 99.3% $ 165.30 S 190.00 $ 5.375.848 993% $ 177.45 $ 195.00 36.663 0.7% 1.21 1.42 37.030 0.7% 1.22 1.40 37,400 0.7% 123 1.36 $ 4.929.306 100.0% $ 162.71 $ 191.42 $ 5.044,793 100.0% $ 166.52 $ 191.40 $ 5.413,248 100.0% $ 178.68 $ 196.36 $ 611,580 12.5% S 20.19 S 23.75 $ 625.970 12.5% $ 20.66 $ 23.75 $ 654,751 122% $ 21.61 $ 23.75 23.831 65.0% 0.79 0.93 24,069 65.0% 0.79 0.91 24.310 65.0% 0.80 0.88 $ 635.411 12.9% S 20.97 $ 24.68 $ 650,040 12.9% $ 21.46 $ 24.66 $ 679,061 12S% S 22.41 $ 24.63 S 4,293.894 87.1 % S 141.74 S 166.75 $ 4.394,753 87.1 % S 145.07 $ 166.74 $ 4.734.187 87.5% $ 156.27 $ 171.72 UNDISTRIBUTED OPERATING EXPENSES Administrative & General $ 180,255 3.7% S 5.95 S 7.00 Marketing 144204 2.9% S 4.76 5.60 Property Operation & Maintenance 139,054 2.8% S 4.59 5.40 Utility Costs 81,115 1.6% S 2.68 3.15 Total 544.628 11.0% $ 17.98 $ 21.15 GROSS OPERATING PROFIT FIXED EXPENSES Management Fees Property Taxes Insurance Land Lease Total NET OPERATING INCOME $ 184.497 3.7% $ 6.09 $ 7.00 147.597 2.9% $ 4.87 5.60 142.326 . 2.8% $ 4.70 5.40 83.023 1.6% $ 2.74 3.15 557,443 11.0% $ 18.40 $ 21.15 S 3.749.266 76.1% S 123.76 $ 145.60 $ 3.837.310 76.1% S 126.66 S 145.59 $ 147,879 3.0% $ 4.88 S 5.74 $ 151.344 3.0% $ 5.00 $ 5.74 60.000 12% 1.98 2.33 60.000 1.2% 1.98 228 11,000 02% 0.36 0.43 11,000 0.2% 0.36 0.42 246.465 5.0% 8.14 9.57 252.240 5.0% 8.33 9.57 $ 465,344 9.4% $ 15.36 $ 18.07 $ 474,583 9.4% $ 15.67 $ 18.01 $ 3.283.921 66.6% $ 108.40 S 127.53 $ 3.362.727 66.7% S 111.00 S 127.59 Occupancy Tax Projection $ 489.264 $ 500,776 Land Lease $ 246,465 $ 252,240 $ 735,730 $ 753,016 $ 192.979 3-6% $ 6.37 $ 7.00 154.383 2.9% S 5.10 5.60 148.870 28% $ 4.91 5.40 86.841 1.6% S 2.87 3.15 583,073 10B% $ 1925 $ 21.15 S 4.151.114 76.7% $ 137.02 S 150.57 $ 162,397 3.0% $ 5.36 $ 5.89 60.000 1-1% 1.98 2.18 11,000 02% 0.36 0.40 270.662 5.0% 8.93 9.82 $ 504,060 9.3% $ 16.64 $ 18.28 S 3.647.055 67.4% $ 120.38 S 132.29 $ 537,585 $-27O,662 $ 808,247 Page 2 Newport Beach - Balboa Island Income Summary Projections Room Count Rooms Occupied Rooms Available Occupancy Average Daily Rate Rooms Revenue Per Available Room REVENUE Rooms Telecommunications Total DEPARTMENTAL EXPENSES Rooms Telecommunications Total DEPARTMENTAL PROFIT Year 7 Year 8 Year 9 83 28.780 30295 95% 200.00 190.00 Amount " Percent PAR POR 83 83 28,780 29.689 30,295 30,295 95% 98% 205.00 210.00 194.75 205.80 Amount Percent PAR POR Amount Percent PAR POR $ 5.756.050 99.3% $ 190AD $ 200.00 $ 5,899.951 99.4% $ 194.75 $ 205.00 $ 6.234.711 99.4% $ 205.80 $ 210.00 37.774 0.7% 1.25 1.31 38,152 0.6% 1.26 1.33 38.533 0.6% 1.27 1.30 $ 5,793,824 100.0% $ 191.25 $ 201.31 $ 5.938,103 100.0% $ 196.01 $ 206.33 $ 6273.244 100.0% S 207.07 S 211.30 $ 683.531 11.9% $ 2256 $ 23.75 $ 683.531 11.6% $ 22.56 $ 23.75 $ 705,116 11.3% $ 23.28 $ 23.75 24.553 65.0% 0.8f 0.85 24,799 65.0% 0.82 0.86 25.047 65.0% 0.83 0.84 $ 708,084 122% $ 23-V $ 24.60 $ 708.330 11.9% S 23.38 $ 24.61 $ 730.163 11.6% $ 24.10 $ 24.59 $ 5.085.740 87.8% S 167,ST $ 176.71 $ 5.229.773 88.1% S 172.63 S 181.71 $ 5.543.081 88.4% S 182.97 $ 186.70 UNDISTRIBUTED OPERATING EXPENSES Administrative 8 General S 201,462 3.5% $ 6A5 $ 7.00 $ 201,462 3.4% $ 6.65 $ 7.00 $ 207,824 3.3% $ 6.86 $ 7.00 Marketing 161,169 2.8% $ 532 5.60 161.169 2.7% $ 5.32 5.60 166.259 2.7% $ 5.49 5.60 Property Operation 8 Maintenance 155,413 2.7% $ 5.113 5.40 155.413 2.6% $ 5.13 5.40 160,321 2.6% $ 5.29 5.40 Utility Costs 90.658 1.6% $ 299 3.15 90.658 1.5% $ 2.99 3.15 93.521 1.5% $ 3.09 3.15 Total 608.702 10.5% $ 20M $ 21.15 608,702 10.3% $ 20.09 $ 21.15 627,924 10.0% $ 20.73 $ 21.15 GROSS OPERATING PROFIT S 4.477.038 77.3% $ 147.73 $ 155.56 S 4.621.071 77.8% $ 152.54 $ 160.56 $ 4.915.157 78.4% S 162.24 $ 165.55 FIXED EXPENSES Management Fees S 173,815 3.0% $ 5.74 $ 6.04 $ 178,143 3.0% S 5.88 $ 6.19 $ 188,197 3.0% S 6.21 S 6.34 Property Taxes 60.000 1.0% 135 2.08 60.000 1.0% 1.98 2.08 60.000 1.0% 1.98 2.02 Insurance 11.000 02% 0.35 0.38 11,000 02% 0.36 0.38 11,000 02% 0.36 0.37 Land Lease 289.691 5.0% 9.56 10.07 296.905 5.0% 9.80 10.32 313.662 5.0% 10.35 10.56 Total $ 534,506 92% $ 17.64 $ 18.57 S 546,048 92% $ 18.02 $ 18.97 $ 572.860 9.1 % $ 18.91 S 19.30 NET OPERATING INCOME $ 3.942.532 68.0% $ 130.14 S 136.99 $ 4.075.023 68.6% $ 134.51 $ 141.59 $ 4,342.297 69.2% S 143.33 S 146.26 Occupancy Tax Projection $ 575,605 $ 589,995 $ 623,471 Land Lease 289.691 296,905-313,662 $ 865,296 $ 886,900 Page 3 Newport Beach - Balboa Island Income Summary Projections Room Count Rooms Occupied Rooms Available Occupancy Average Daily Rate Rooms Revenue Per Available Room Year 1 83 21.207 30.295 70% 170.00 119.00 Amount - Percent PAR POR REVENUE Rooms $3.605.105 98.9% $ 119.00 $170.00 Telecommunications 38.919 1.1 % 1.28 1.84 Total $3.644.024 100.0% $12028 $171.84 DEPARTMENTAL EXPENSES Rooms $ 503,654 14.0% $ 16.63 S 23.75 Telecommunications 25.297 65.0% 0.84 1.19 Total S 528.951 14.5% $ 17.46 $ 24.94 DEPARTMENTAL PROFIT $3.115.072 85.5% $102.82 $146.89 UNDISTRIBUTED OPERATING EXPENSES Administrative & General $ 148.446 4.1% $ 4.90 $ 7.00 Marketing 118.756 3.3% $ 3.92 5.60 Property Operation 8 Maintenance 114.515 3.1% $ 3.78 5.40 Utility Costs 66.800 1.8% S 2.21 3.15 Total 448,517 12.3% $ 14.81 $ 21.15 GROSS OPERATING PROFIT $2.666.555 732% $ 88.02 $125.74 FIXED EXPENSES Management Fees $ 109.321 3.0% $ 3.61 $ 5.16 Property Taxes 60,000 1.6% 1.98 2.83 Insurance 11.000 0.3% 0.36 0.52 Land Lease 182201 5.0% 6.01 8.59 Total S 362,522 9.9% S 11.97 $ 17.09 NET OPERATING INCOME $2.304.033 632% $ 76.05 $108.65 Occupancy Tax Projection S 360,511 Land Lease 182201- S 542,712 Page 4 L� • C. Ground Lease r?'wrS 4 C. Ground Lease 1. Terms of Lease: 80 years 2. Master lessee : Ayres Group (no rent) 3. Guarantee to put in improvements 4. Sub leases commence on lot. Rent would go to developer until improvements are paid. 5. Assignment of the master lessee — to the City of Newport Beach so that the City would be the Lessor. SALE Close 10 days after opening of Escrow — All Cash AUG-22 -2000 16 :23 949 224 0223 P.02/02 "RECEI Ek D _ g� PRINTED" 0 RHC,00 AUG 22 P 4 :54 C O M M U N 1 7 1 E 5 T JY CLEPr� August z2,2000 cli :dRTBF.A0 Honorable Mayor and Members of the City Council City of Newport Beach, California 3300 Newport Blvd Newport Beach, CA 92658 Reference: Marina Park Reuse Plan Dear Mayor and Members of the Council: RHC Communities has been participating in the RFP process regarding the potential reuse of the Marina Park site. Our submitted reuse plan consists of all existing uses and increases revenues to the City as desired. Upon reviewing the staff report for the August 22, 2000 agenda it is however clear that the city would seriously consider a master lease for the entire Marina Park site that stipulates only improvements to the existing land uses. RHC Communities has very extensive ownership and management experience with mobile home parks particularly, parks within the Coastal zone. Currently, RHC operates and manages seven mobile home parks owned by southern California cities. As a supplement to our presented plan we respectfully request you consider RHC Communities as a potential lessor for the site under a "status quo" reuse assumption. The proforma provided in our most recent submission supports RHC's ability to provide a reasonable return to the City under these conditions. In affect, such action by the Council would serve to eliminate the proposed hotel and parking structure, and provide further opportunities to create public recreation areas, while maintaining all existing land uses. Thank you for your consideration of this matter. Sincerely, R4?000::;- UNITIES MM i �7�_` Richard A. Hall President 20201 S.W. BIRCH STREET. SUITE 2$0 • NEWPORT BEACH, CALIFORNIA 92660 • 949.224.0222 • FAX: 949.214.0223 TOTAL P.02 AUG -22 -2000 16 :45 949 224 0223 99% P.02 Meeting Date: August 22, 2000 Agenda Item No.: 22 Subject: RESPONSE TO REQUEST FOR PROPOSALS FOR FUTURE/USE DEVELOPMENT OF MARINAPARK. PROPOSALS REGENT INTERNATIONAL HOTELS August 14, 2000 Mayor John Noyes Members of the City Council City of Newport Beach 3300 Newport Boulevard Newport Beach, CA 92663 Dear Mayor Noyes and City Council Members: I would like to express to you the continued interest that Regent International Hotels has in being part of Stephen Sutherland's exciting project in Newport Beach. Regent looks forward to being very involved throughout the development process. As the hotel manager, we will be working closely with Mr. Sutherland to ensure that the resort meets both our 5-star luxury standards as well as those requirements of the City. We have reviewed the PKF market study and are in agreement that the project is ideally suited for Balboa Peninsula and that it will be highly competitive in the Southern California resort hotel market. We have completed a pro forma based on the PKF projected occupancies and average daily rates and believe the project has the greatest opportunity for success. If you have any questions as we proceed through the planning and development phases, please do not hesitate to contact me in Minneapolis at 612-212-0515 or Ruth Ormsby, Director of Development, at 949-760-0253. We look forward to being a part of this dynamic project. Sincerely, n Luis C. Acosta Vice President, Development cc: Council Member Gary Adams Council Member Jan Debay Council Member Norma Glover Council Member Dennis O'Neil Council Member Tod Ridgeway Council Member Tom Thompson CA131, ON 1';\Nh\\.\l. 1'.ft. 13UX 59159. MINNE:\I'(ll.1S. NJINN1:SOTA. I. S \ 55-159- 11, '_'.}_1 TE'L: t612t 212-3300 i'\S: 16121 212-3350 IN'1'I:13NFT: I,h.,nl,•\'arr11111!,t,•Is r•,rr REGENT INTERNATIONAL HOTELS P R O F I L E Regent International Hotels Company Background Regent International Hotels and The Regent brand name are synonymous with luxury and service in hotels and resorts around the world. Regent International Hotels is renowned for its total dedication to customer service and enjoys a clearly defined leadership role in the luxury market. As part of Carlson Hospitality Worldwide (USA), Regent International Hotels is in the midst of an ambitious development programme with the goal of entering new markets and offering an expanded worldwide presence in the luxury hotel category. At present, Regent hotels and resorts are located in the cities of Almaty (Kazakhstan), Bangkok, Chiang Mai, Hong Kong, Jakarta, Kuala Lumpur, Singapore, Taipei, Sydney, and Beverly Hills (Los Angeles), California. New hotels opened in 1999 include The Regent Mumbai (Bombay), India; The Regent Las Vegas, Nevada; and The Regent Wall Street, New York. In addition, two new properties are under development in The Americas. These include one city hotel, The Regent Mexico City in the Mexican capital, and one resort in Mexico, The Regent Resort Los Cabos. Further development announcements are expected throughout 2000. Guest Service and Quality Regent International Hotels established its reputation on a commitment to exceptional guest service, attention to detail, and an uncompromising commitment to quality. A defining characteristic of Regent hotels and resorts is the distinctive culture of the brand called "The Regent Experience." The essence of "The Regent Experience" combines the warmth and culture of the local community with global luxury standards, creating a hospitality experience that is genuine and personalized. Each Regent property prides itself on offering superior accommodations, innovative amenities, and guest facilities. Regent's service quality is enhanced by special touches including the afternoon tea served to the accompaniment of a string quartet in the Lobby Lounge at The Regent Bangkok; the selection of terry cloth bath robes and umbrellas provided to guests at The Regent Sydney; and by the staff who greet guests by name at The Regent Hong Kong. This extraordinary attention to detail has generated a devoted clientele at Regent properties in Asia -Pacific. Other examples of Regent's commitment to service include: 24-hour concierge, butler, room, and valet service; complimentary overnight shoe shine; twice daily maid service and "Concierge Best Buys," a shopping assistance programme available at Regent hotels in Asia -Pacific. Regent's focus on personalized service and guest amenities combine to offer a quality of hospitality that distinguishes Regent International Hotels as a leader in the world's travel industry. .../conlinued \\0111.1) 11F,ADI)l \HTFIRS: CARLSO\ P\RION kA . VA). IM\ -)9159. Ail\\I{AI'lll.lti, \11 N N F'S'OT k. lSA 55-159-820-1 'I'I{I.: 16121 212-:5151 • P\\: (612) 212-:3100 Regent International Hotels Company Background Page 2 Regent's accomplishments have long been noted by the media and critics, and its properties are constantly singled out for praise and acclaim. Accolades from prestigious publications include Institutional Investor, Conde Nast Traveler, Travel & Leisure as well as independent rating services. In 1999 and 1998, eight Regent properties were listed in Conde Nast Traveler's (USA) annual "Gold List." This is the fifth consecutive year in which more than seven hotels have been listed. Regent International Hotels also picked up seven awards fromBusiness Traveller (Asia -Pacific) in 1999. Regent Hotels in Hong Kong, Bangkok, Sydney and Taipei were voted "Best Hotel" in their respective cities. In addition, Gourmet Magazine (USA) "Rooms at the Top" 1998 reader's poll voted Regent International Hotels as one of the "Top Hotel Groups" both in the USA and Worldwide, with The Regent Hong Kong picking up "Best Business Hotel" in the world in both 1998 and 1999. Just as Regent has been consistent over the years in terms of quality, it has been unwavering in its total commitment to service throughout the group. Whether Regent International Hotels' expertise is exhibited at its properties located in Asia, Australia, or the United States, guests can count on high quality, personalized serviceand continued determination to offer each and every guest a stay that is truly outstanding and unique. The Regent Club In April 1996, Regent International Hotels set new standards in hospitality with the unveiling of The Regent Club at The Regent Bangkok and The Regent Jakarta. More recently, it extended this service to The Regent Kuala Lumpur, The Regent Almaty (Kazakhstan) and The Regent Sydney. The Regent Mumbai will launch The Regent Club this year. The Regent Club provides comprehensive and personalized service for the discerning business traveler on payment of a small premium above the relevant daily room rate. The concept is unique in that it operates 24-hours a day, seven days a week. Personalized attention begins well before the guest's arrival, with the club's home -to -hotel trip planning assistance. Onward trip planning is also available and includes assistance with airline ticketing and reconfirmation, ground transportation and hotel reservations at the next destination, regardless of where the guest is staying. The Regent Club has redefined the luxury benchmark for executive club accommodations providing an exceptional level of highly personalized service in a responsive environment. History Regent International Hotels was founded in Hong Kong in 1970 as a joint venture between Mr. Robert H. Burns, who became Chairman and Chief Executive Officer of the company, and Tokyu Corporation of Japan. ./contimied Regent International Hotels Company Background Page 3 From 1970 to 1979 the company opened and managed a number of prominent hotels, but gained truly international recognition in 1980 with the opening of its flagship property, The Regent Hong Kong. The creation of The Regent Hong Kong brought with it a new dimension in amenities and service to hotels in the city and attracted attention throughout the world. New Global Growth Vision for Regent International Hotels In November 1997, Carlson Hospitality Worldwide, one of the major operating divisions of the global travel and hospitality industry conglomerate, Carlson Companies, Inc., acquired Regent International Hotels from Four Seasons Hotels and Resorts. Regent International Hotels' headquarters are located at Carlson Companies, Inc. world headquarters in Minneapolis, Minnesota, USA. Regional offices are located in Los Angeles, New York, London, Tokyo and Hong Kong. Carlson Companies, Inc. is a US$22 billion global enterprise which includes over 5,300 travel agencies, a world renowned incentive travel and marketing company, plus over 1,100 hotels, resorts, restaurants, and cruise ships. The Carlson organization is leveraging its strengths and expertise in the hospitality, marketing, and travel industries to expand and develop Regent International Hotels globally. In just twelve months, the planned two-year expansion for the brand was achieved, making Regent International Hotels one of the world's fastest growing luxury hotel companies. Global Reservations Delivery System Reservations and business delivery to Regent International Hotels is provided through the industry -leading global reservations system of Carlson Hospitality Worldwide. This global system captures business for the individual Regent hotels through a worldwide network which includes over thirty toll -free telephone numbers plus electronic booking capabilities through the Internet Global Distribution Systems. Travel agents can book Regent locations using the chain code "RE." The reservation system's technology architecture includes Curtis-C, Carlson's sophisticated client server, and HARMONY®, the service delivery and property management system linking the hotels to the reservation centre. Curtis-C enables traditional toll -free telephone service to 41 countries and seamless interface to 125 countries through the GDS systems. The system also enables bookings via new channels of electronic commerce including The Regent web site on the Internet. /continued Regent International Hotels Company Background Page 4 The Brand Plays on... From its beginnings, Regent International Hotels was established to offer the very best in hotel and resort accommodations to a discerning clientele. In its new projects, Regent International Hotels continues to target the upscale business and leisure traveler who seeks and expects only the finest in service and accommodations. Carlson's ownership of The Regent brand has opened up a whole new era for this international luxury hotel group, expanding into some of the world's most exciting cities and alluring resort destinations. For further information, please contact: Kylie M. Perkin Regent International Hotels, Hong Kong Tel: (852) 2734 7241 Email: kperkin@regenthotels.com January, 2000 (RIH background.doc) (�K) REGENT INTERNATIONAL HOTELS Regent International Hotels Listing The Americas United States California: Los Angeles - The Regent Beverly Wilshire, Beverly Hills Number of Rooms: 395 Opening Date: 1928 (Wilshire Wing) 1971 (Beverly Wing) (Under The Regent brand since January 1986) Nevada: Las Vegas - The Regent Las Vegas Number of Rooms Opening Date: New York: New York - The Regent Wall Street Number of Rooms Opening Date: Mexico 541 July 1999 144 December 1999 F A C T S Los Cabos: Under Development The Regent Resort Los Cabos Number of Rooms: 128 including 40 luxury villas Opening Date: Late 2001 Mexico City: Under Development The Regent Mexico City Number of Rooms: 94 Opening Date: Mid 2001 ..Jcontinued \1 ))I{I.0 111" \UIII \IITI:R.�: C Alll.SON I'\Rh\\ \l. P.U. IM\ 59159. All\\F: AI MAS. Ail\ t S. A. .55159-220-1 TEE: 10 12 ) 212-5-I51 • F\\: (612) 212-3-100 Regent International Hotels Listing Page 2 Asia Hong Kong: Hong Kong - The Regent Hong Kong Number of Rooms: 602 Opening Date: October 1980 India: Mumbai - The Regent Mumbai (Bombay) (Bombay) Number of Rooms: 508 Opening Date: June 1999 Indonesia: Jakarta - The Regent Jakarta Number of Rooms: 365 Opening Date: October 1995 Kazakhstan: Almaty - The Regent Almaty Number of Rooms: 290 Opening date: December 1996 (Under The Regent brand since September 1998) Malaysia: Kuala Lumpur - The Regent Kuala Lumpur Number of Rooms: 468 Opening Date: October 1989 Singapore: Singapore - The Regent Singapore Number of Rooms: 441 Opening Date: June 1982 (Under The Regent brand since November 1988) Taiwan: Taipei - Grand Formosa Regent Taipei Number of Rooms: 546 Opening Date: September 1990 ..Jcontinued Regent International Hotels Listing Page 3 Thailand: Bangkok - The Regent Bangkok Number of Rooms: 356 Opening Date: 1983 (Under The Regent brand since May 1985) Chiang Mai - The Regent Resort Chiang Mai at Mae Rim Valley Number of Rooms: 75 Opening Date: April 1995 South Pacific Australia: Sydney- The Regent Sydney Number of Rooms: 531 Opening Date: October 1982 (Major refurbishment completed at the end of 1999) For further information, please contact: Kylie M Perkin Regent International Hotels (Hong Kong) Tel: (852) 2734 7241 Email: kperkin@regenthotels.com January, 2000 (RIH listing.doc) (�K) REGENT INTERNATIONAL HOTELS Almaty • Bangkok • Beverly Hills • Chiang Mai • Hong Kong • Jakarta • Kuala Lumpur • Mumbai New York • Singapore • Resort At Summerlin (Las Vegas) • Sydney • Taipei RESERVATIONS For reservations worldwide, call any one of these offices, or your travel counsellor. Toll -free tvithin: Direct dial: Argentina (800) 301 5723 Sweden (020) 790 464 Australia (1 800) 022 800 Switzerland (0800) 55 53 44 Austria (0800) 291 059 USA (1 800) 545 4000 Belgium (0800) 7 44 44 Canada (1 800) 545 4000 Direct dial: France (0800) 913 216 Dublin (353) (1) 706 0259 Germany (0800) 18 08 197 Omaha (402) 431 5555 Great Britain (0800) 917 8795 Singapore (65) 737 3555 Hong Kong (800) 96 8384 Sydney 61 (2) 9333 8669 Ireland (0800) 509 245 Tokyo 81 (3) 3239 2081 Italy (800) 791 035 Japan (01 20) 001 500 Mexico (800) 7133 539 The Netherlands (0800) 022 19 21 New Zealand (0800) 440 800 Portugal (0800) 853 083 Spain (900) 972 913 Visit us at our web site: wwwregenthotels.com Airline Reservations Systems Code: RE Amadeus, Apollo/Galileo, Sabre, System One, Worldspan The marks "REGENT INTERNATIONAL HOTELS", "THE REGENT" any combination thereof and the R and Oval R logos are trademarks of Regent Hospitality Worldwide, Inc. the Q� ant WALL STREET Daily Tariff Front 1 jmruary 2000 Room Category Single/Double Superior S 545 Superior Courtyard S 575 Deluxe* $ 650 Deluxe Courtyard S 675 Grand Deluxe $ 750 Executive Suite* $ 850 Courtyard Suite $ 1,000 Deluxe Suite* S 1,200 Grand Deluxe Suite $ 1,500 Grand Deluxe Loft Suite S 1,600 Prices are quoted on single and double occupancy basis. *Loft rooms with private outdoor terraces are available at a prerninm rate. Rates are quoted in U.S. currency and are ec, husive of prevailing state and local taxes. Weekend Packages A variety of packages are available .uniting at $375. Rates are commissionable to bona fide travel agents. All above rates are subject to change without notice. 55Wall Street, New York, New York 10005 Tel: (212) 845 8600 Fax: (212) 845 8601 Expansive and well appointed with lofty, twelve -foot ceilings. Our 144 guestroonzs including 46 suites offer are elegance unmatched by any other Nezv York hotel. Each room features every necessity for the executive busf szess traveller, including DVD, fsz-room fax machine, portable phone, CD player and in -room s,,fe. i At last the financial capital of the world has the definitive hotel it deserves: The Regent Wall Street. Once The Merchant Exchange, The Regent Wall Street is a masterpiece of Greek Revival and was considered one of the "most costly and pretentious" buildings within the United States when it opened in 1842. At the turn of the century, the majestic space pictured here was the banking room for the National City Bank. Today, with its four sets of Corinthian columns and the world's largest Wedgwood jasperware, The Regent Ballroom offers a breathtaking venue for elegant dinners, memorable weddings and important meetings. {tee; r i 'L 1 L i Ir sir � < i •� , i. a • i �i f M RECENT INTERNATIONAL MOTELS Almaty • Bangkok • Beverly Hills • Chiang Mai • Hong Kong • Jakarta • Kuala Lumpur • Mumbai New York • Singapore • Resort At Summerlin (Las Vegas) • Sydney • Taipei RESERVATIONS For reservations worldwide, call any one of these offices, or your travel counsellor Toll-F-ee within: Direct dial: Argentina (800) 301 5723 Sweden (020) 790 464 Australia (1 800) 022 800 Switzerland (0800) 55 53 44 Austria (0800) 291 059 USA (1 800) 545 4000 Belgium (0800) 7 44 44 Canada (1 800) 545 4000 Direct dial: France (0800) 913 216 Dublin (353) (1) 706 0259 Germany (0800) 18 08 197 Omaha (402) 431 5555 Great Britain (0800) 917 8795 Singapore (65) 737 3555 Hong Kong (800) 96 8384 Sydney 61 (2) 9333 8669 Ireland (0800) 509 245 Tokyo 81 (3) 3239 2081 Italy (800) 791 035 Japan (01 20) 001 500 Mexico (800) 7133 539 The Netherlands (0800) 022 19 21 New Zealand (0800) 440 800 Portugal (0800) 853 083 Spain (900) 972 913 Visit us at our web site: www.regenthotels.com Airline Reservations Systems Code: RE AmadCns, Apollo/Galileo, Sabre, System One, Worldspan The marks "REGENT INTERNATIONAL HOTELS", "THE REGENT" any combination thereof and the Rand Oval R logos are trademarks of Regent Hospitality Worldwide, Inc. The Regent Wall Street 55 Wall Street, New York, NY 10005 Tel: (212) 845 8600 Fax: (212) 845 8601 W Equipped to exceed your expectations. Exercise your options for health in our fitness center. Reward yotirself with a therapeutic massage in. The Regent Spa. At our restaurant, 55 Wall, savour the best of globally influenced American cuisine: only what you would expect from Wall Street. the Qegent BEVERLY WILSHIRE A FOUR SEASONS HOTEL For over 70 years, The Regent Beverly Wilshire has been a landmark at Wilshire Boulevard and Rodeo Drive — while around it have grown Beverly Hills and z magic of Hollywood. This magnificent hotel also has a more important heritage: the quiet confidence that comes of knowing how to satisfy a distinguished clientele. St99C� 2AA 9Y2�2�tw ��Y91f9� 3SR9�9q 9)AV �2YA9� 07 Y9kfo toq — 9vivQ o9�13Si iA s.jLmb"Lj A mom A ZIA oZ\A �,moA ?AAY -�() -�() nmo) IAAl 9J"AIANNAOJ 1'3W J 'Al '.9�pl-I A 3T O'A')gmt .9�9�5`�92�� �J9�2tJ���t2�21� A ��2f3A2 0� V.f05� �5Y2V.f05`fS� .MdP"viB8Z6G sI.)al(aa sl11H dIjdadg u! dggol mouvf8 asvu+ dt1j ` OLf djgjvm sp oa BuiltaJ paalrivn djwnssvp s-Ji UIOJJ WIN The Veranda Snite Wilshire Wing bathroom Understated and oversized, the suites offer exceptional luxury. They range frorn a 725-square foot Regent Si,dte — of Bring mountain and skyline views frorn the Beverly Wing's upper floors — to a 1,530-square foot Wilshire Suite. The Veranda Suite, with its rooftop terrace, and Ambassador Snite, with its bathside views, are simply one of a kind. One -bedroom Beverly Suite Regent Suite Situated in the Beverly Wing, and many with balconies Beverly Wing bathroom that open onto dazzling views, Regent Suites offer added privacy for business or entertaining. Beverly Wingguest room t The Presidential Suite w One -bedroom Beverly Suites add a new dimension to luxury accommodations at The Regent Beverly Wilshire. Their exclusive corner position makes possible sweeping 270' views and two fernished private balconies. Ort Fridays and Saturdays,( The Dirtirtg Romi hosts evertirtgs of dancing beneath its cloud -painted ceiling and Murartoglass chandeliers. 17ie Diming Room The Bar Uplifting dining, with award•winning menus and decor. From breakfast to late -night fare, The Lobby Lotntge is the Beverly Hills neighborhood bistro, overlooking Wilshire Boulevard arid Rodeo Drive. The Diming Room ranks amongst the finest restaurants in Los Angeles. And 24-hour Roorrt Service is st.tperb. The Penthouse Suite The only hotel in Los Angeles % the distinction of two presidential -caliber suites. Introduced by a dramatic foyer, the Wilshire Presidential Suite represents nearly 3,500 square feet of antique -filled luxury: hvo princely bedrooms, sunkenmarble bath- tubs, three sitting rooms and a dining room for eight. The Beverly Wing Penthouse Suite offers striking, nearly 360' views — the Hollywood Hills seem close enough to touch. At 5,000 stylish square feet, it includes three bedrooms and four bathrooms, a dining room, living room and private screening roorn, as well as high-tech amenities such as direct satellite hookup. Among the finest of their kind in the country, our Presidential Suites have entertained CEOs, diplomats, royalty and media stars. The Penthouse Suite i;- G� • s -•iM is x� iE } 1 f f �� l ` A new Spa and Fitness Center - lrehensive and luxurious. Extensive Spa services include the innovative touch: from hair care and massage to sea salt revitalizers, body bronzing and facialtronics. Enioy the most up-to-date fitness equiptnent, sauna and steam, and two whirlpools, each set to a precise temperatum. Lounging and dining beside the Italianesclue pool are always highly recommended. Le Grand Trianon Our experienced professional staff can help you satisfy the most sophisticated requirements. The established host to memorable society galas, weddings and corporate retreats. From an executive board meeting for teii to a black -tie dinner for 820 in. the Grand Ballroom, The Regent Beverly Wilshire has made a tradition of flawless hospitality. Spectacular venues have all been refreshed with new decor. Elegant, flexible spaces, all sup ed by advanced technology and expert assistance. After the Ballroom the options go on to include the very private Trianon — with its Grand and Petit salons. The Champagne Room seats up to 200guests. Four additional roorns are ideal_for more intimate groups of 20 to 80. The Ballroom Function Room Dimensions Capacii— HT (Fr.) L x W (Fr.) Sq. ft. Theater Classroom Reception Banquet The Ballroom 21 130 x 110 14,300 1,000 500 1,000 820 Le Grand Trianon 11 86 x 46 3,956 300 200 400 300 Champagne Room 10 50 x 48 2,400 200 80 250 200 Le Petit Trianon 10 33 x 44 1,452 80 50 250 120 Burgundy Room 10 27 x 34 918 70 40 80 60 Bordeaux Room 10 29 x 34 986 40 30 80 50 La Fiesta 9 16 x 43 688 24 24' 30 20 Chateau Room 10 16 x 34 544 20 20' 24 20 The Boardroom 9 15 x 19 285 N/A 10' N/A N/A -Conference set-up Beverly Wing Main Lobby (Ground Floor) AUDIO DRESSING VISUAL I STAGE I ROOM ROOM ■ THE BALLROOM ■ ■ WINTER GARDEN 8 ■ B Up TO LOGGIA ENTRANCE Beverly Wing Mezzanine > BORDEAUX w CHAMPAGNE d F ROOM G HALLWAY TO GAL!- IA ■ �ATE.A. BUROOM DV Wilshire Wing Mezzanine STAGE LE GRAND 0 TRIANON w TR IANON �--- 11 COAT �KITCri�`I•E{Iln�ll, ROOM LA FIESTA ROOM HALLWAY BOARDROOM Note: diagrams not to scale The Getty Center Rodeo Drive Shopping The Pacific Coast at 1111alibu Diversions are never far from The Regent Beverly Wilshire. The Hotel places you close to all the key attractions of the region. More personally, it gives you the resourceful assistance you need to arrange tickets, book reservations — and make your visit perfect. With 395 guest rooms, nearly one. of which are suites, the Hotel offers a superb array of choices. Ti,vo rmigne envirornnents meet in a single vision: the historic Wilshire Wing appeals to more classic tastes, r,vhile the Beverly Wing is elegantly contemporary. From well-appointed Superior Rooms to the 760-square foot Regent Deluxe Roorns — as spacious as a junior suite — all guest rooms cornbine the latest con farts and conveniences, including advanced telecormmnnications. Every guest enjoys an unusually spacior,rs bathroorn of Italian tile and marble, with separate shower and deep soaking tub. Wilshire Wing guest room The Lobby Lorm,�c An oasis of elegance, warmth and impeccable service, at the city's most renowned intersection. With a splendor further enhanced by a renovation that perfectly blends tradition and trend, The Regent Beverly Wilshire reflects a dignity that comes only with experience. For seven decades, it has been an integral part of Beverly Hills life — its daily special niornents as well as its important celebrations. With its European charm, 21st-century technologies and the Four Seasons ethic of attentive care, The Regent Beverly Wilshire is this enchanted destination's preferred address for business or leisure. (�K) REGENT INTERNATIONAL HOTELS REGENT INTERNATIONAL HOTELS Bangkok • Chiang Mai at Mae Rini Valley • Hong Kong • Jakarta Kuala Lumpur • Los Angeles in Beverly Hills (Beverly Wilshire) Singapore • Sydney • Taipei FOUR SEASONS MOTELS AND RESORTS Atlanta • Austin • Aviara • Bali at Jimbaran Bay • Bali at Sayan • Berlin Boston • Cairo at The First Residence • Chicago • Chicago (The Ritz -Carlton) Dallas at Las Colinas • Houston • Hualalai at Historic Ka`upulehu Istanbul • Las Vegas • Lisbon • London • London at Canary Wharf Los Angeles at Beverly Hills • Maldives at Kuda Huraa • Maui at Wailea Mexico, D.F. • Milan • Nevis, West Indies • New York • New York (The Pierl"O Newport Beach • Palm Beach • Paris • Philadelphia • Punta Mita, Mexico Santa Barbara • Scottsdale at Troon North • Seattle • Singapore Tokyo at Chinzan-so • Toronto • Vancouver • Washington, D.C. UNDER DEVELOPMENT Four Seasons: Caracas • Dublin • Prague • San Francisco • Shanghai • Sharm El Sheikh RESERVATIONS For reservations call your travel counselor or Toll -fire inithin: Argentina (800) 301-5723 The Netherlands (0800) 022 19 21 Australia (800) 022-800 New Zealand (0800) 440-800 Austria (0800) 29 1059 Portugal (0800) 853-083 Belgium (0800) 7 44 44 Singapore (800) 6161-777 Canada (800) 545-4000 Spain (900) 972-913 France (0800) 913 216 Sweden (020) 790-464 Gennany (0800) 18 08 197 Switzerland (0800) 55 53 44 Great Britain (0800) 917-8795 U.S.A. (800) 545-4000 Hong Kong 800-96-8384 Ireland (800) 509 245 Direct dial: Italy (800) 791035 Dublin 353 (1) 706-0259 Japan (00531) 61-3333 Omaha (402) 431-5555 Mexico (800) 7133 539 Sydney 61 (2) 9333-8669 Visit us at our web site: w%vw.regenthotels.coni Airline Resemntions Systems Amadeus, Apollo/Galileo, Sabre, System One, Worldspan The marks "REGENT", "THE REGENT", any combination thereof and the R and Oval R logos are registered trademarks of Regent Hospitality Worldwide, Inc. The marks "FOUR SEASONS", "FOUR SEASONS HOTELS AND RESORTS", any conrbinatio> thereof and the Tree Design are registered trademarks of Four Seasons Hotels Linuted in Canada and U.S.A. and of Four Seasons Hotels (Barbados) Ltd. elsewhere. -q% Carlson Companies is Dedicated to Providing Personalized Service Marilyn C. Nelson, to Customers Around the Globe Chair ofthe hoard, President and CEO, A message from Marilyn C. Nelson Carlson Contpanie<, Inc. Creating a Great Place for Great People to Do Great Work When Marilyn Carlson Nelson took on the role of president and CEO of Carlson Companies, Inc', she began with a vision of shaping Carlson Companies for the new millennium. Her vision is an integrated, unified, wall -less organization committed to building lifelong relationships with customers, business partners, and employees. "Building loyal relationships requires creating a work environment that is truly best in class," said Nelson. Why is employee satisfaction her top priority? "Current economic and demographic conditions have created an unprecedented tight job market. Carlson will maintain its competitive edge by recruiting and retaining the best people," she said. Carlson Companies World Headquarters, Minneapolis, Minnesota, USA "To create a memorable experience for every customer, we are creating a great place for great people to do great work. In the past, we've measured our progress largely in terms of business growth. Moving into the next millennium, the well-being of our employees will be measured as an equally important hallmark of our success," Nelson said. New Technology Center Consistent with Nelson's vision of a people - friendly work environment is the company's new Technology Center which opened in 1998. The $16 million, 155,500 square -foot structure features a contemporary, colorful setting with two open atriums complete with trees, greenery and casual furniture. The overall design of the center incorporates a new Carlson office concept known as "OneSpace," which devotes open space to common areas and emphasizes flexible, communal team spaces. The new office concept, currently being used in many best -of -class businesses, is the future standard for all Carlson Companies' Minneapolis -based offices. The emphasis on a pleasant work environment is extremely important for technology -driven companies such as Carlson, which competes with other high-technology companies in attracting high -caliber professionals. The company has long been an innovator in technology, creating advanced systems to operate loyalty and frequent -flyer programs, streamline corporate travel management, sell travel via Internet web sites, and manage hotel inventory. Carlson Connected Carlson exemplifies a recently launched initiative known as "Carlson Connected," a set of cross -company initiatives designed to integrate Carlson's operations, foster collaboration and share resources. Collectively, these initiatives form an ambitious agenda for reaching a common goal: fostering a best -in -class workplace that builds strong relationships with customers and employees. Carlson Companies Child -Care Center Carlson Companies opened a new child-care center, one initiative amo*g many that foster a constructive balance between work and life. As the company strives to be operationally best -in -class, the new center provides high quality child care and innovative programming. Located on the Carlson Campus, adjacent to Carlson Marketing Group and the Carlson Technology Center, the building accommodates 115 children. About the Cover: The world headquarters of Carlson Companies, Inc., in suburban Minneapolis, Minnesota, features the sculpture "Man and His Genius" by world-famous Swedish sculptor Carl Milles. It portrays the winged horse Pegasus ridden by a man who seeks to climb even higher than the horse will take him. The symbolism of striving to the highest possible human potential expresses the spirit of the late Curtis L. Carlson (1914-1999), founder of Carlson Companies, Inc. His legacy includes a personal credo: Whatever you do, do with INTEGRITY. Wherever you go, go as a LEADER. Whomever you serve, serve with CARING. Whenever you dream, dream with your ALL. And never, ever give up. Carls�pitality Worldwidt CarlsonWagonlit I Carlson Leisure Group HOTELS Regent International Hotels Radisson Hotels Worldwide Country Inns & Suites By Carlson Carlson Vacation Ownership Carlson Lifestyle Living RESTAURANTS AquaKnox T.G.I. Friday's Friday's American Bar Front Row Sports Grill Italianni's Samba Room Star Canyon Taqueria Canonita Timpano Italian Chophouse CRUISE OPERATIONS Radisson Seven Seas Cruises PURCHASING Provisions"` Carlson Companies: Four Powerful Operating Groups Serve Customers Around the Globe Positioned to serve customers individually around the globe, Carlson Companies, Inc. was founded in 1938 with a borrowed $ 5 5 and a dream. Now a global giant, the company's worldwide brands generate annual systemwide revenues of more than $22 billion (USD). Carlson Companies continues to fulfill its original vision: to establish rewarding relationships between individual customers and businesses. One of the largest privately held corporations in America, Carlson Companies operates in more than 140 countries and its brands employ more than 160,000 people. Carlson businesses include one of the world's largest hospitality companies, which encompasses over 1,200 hotel, restaurant and cruise ship operations, plus the world's largest travel agency network, and a global marketing services and incentive travel leader. Four dynamic operating groups are dedicated to surrounding customers with products and services that satisfy their individual needs for quality, service and a memorable experience. Carlson Wagonlit Corporate Card Carlson Marketing Group Performance Improvement Loyalty Marketing Event & Sports Marketing Direct Marketing Sales Promotion Carlson Hospitality Worldwide (CHW) is a global leader in the hotel, resort, restaurant, and cruise industries. Unified by a brand management strategy that empowers brands to share resources and operate synergistically, Carlson Hospitality Worldwide operations encompass more than 1,200 hotel, resort, restaurant and cruise ship operations in 73 countries. Its hotel and resort operations include over 600 locations in 54 countries. Its cruise vessels sail to all seven continents. And its restaurants franchise more than 560 locations in 46 countries. Carlson Wagonlit Travel (CWT) is a world leader in corporate travel and expense manage- ment and the first truly global company in the industry with international management. Today, the Carlson Wagonlit Travel network has more than 3,000 locations in 141 countries and generates more than $11 billion in annual sales. In 1994, Carlson Companies and Paris, France -based Actor combined the business travel interests of their two companies tinder the name Carlson Wagonlit Travel. The merged company brings together two of the most legendary names in travel "Ask Mr. Foster," the oldest travel network in the United States (later acquired by Carlson Companies) and Wagonlit, originators of the famed Orient Express passenger trains of Europe. Today, in cities throughout the world, Carlson Wagonlit Travel provides a familiar and trusted name for business travelers while assisting their companies with the development, management assessment and future success of their travel and expense management solutions. Carlson Wagonlit Travel Travel Agents International Thomas Cook Carlson Travel Academies Neiman Marcus Travel Services Carlson Destination Marketing Services Carlson Leisure Fulfillment Services Carlson Leisure Group (CLG) is the largest franchisor of leisure travel agencies in the United States with over 1,300 Carlson Wagonlit Travel and 30 Travel Agents International locations. The company manages leisure and franchise travel operations world- wide under a variety of diversified companies and brands, including Thomas Cook in the United Kingdom. Entrepreneur magazine has ranked Carlson Leisure Group the top travel franchise brand for the past three years. Together, Carlson's travel agency interests include 5,300 travel locations in more than 140 countries around the world. Carlson Marketing Group (CMG) creates individualized solutions that help clients establish rewarding relationships with the key audiences they depend on for their success: customers, employees, and distribution channel partners. Ranked by Adlertising Age magazine as one of the world's largest marketing organizations, Carlson Marketing Group is a full -service, multi -dimensional marketing company with international capabilities spanning 21 countries. This global relationship marketing giant helps Fortune 1000 clients improve their sales and profits by designing winning marketing strategies in the following areas: Direct Marketing, Performance Improvement, Loyalty Marketing, Sales Promotion, and Event and Sports Marketing. n, Carlson Hospitality Worldwide® Serving Markets of One in the Experience Economy A nwisage from Curtis C. Nelson Think back to a memorable event: a birthday celebration, a special dinner or vacation. Chances are, what made it unforgettable was the special way it made you feel. During the significant "experiences" of our lives, emotions are intertwined with memories. Curtis C. Nelson, president and CEO, Carlson Hospitality Worldwide Carlson HHospitality Worldwide' HOTELS Regent International Hotels Radisson Hotels Worldwide Country Inns & Suites By Carlson Carlson Vacation Ownership Carlson Lifestyle Living RESTAURANTS AquaKnox T.G.I. Friday's Friday's American Bar Front Row Sports Grill Italianni's Samba Room Star Canyon Taqueria Canonita Timpano Italian Chophouse CRUISE OPERATIONS Radisson Seven Seas Cruises PURCHASING Provisionssm cols Seven Seas Navigator Why is this important in the hospitality industry? Because hotel rooms, cruise ships, and restaurant meals are only commodities. Delivered competently, they become services. Made personalized and memorable, however, they become experiences. As the world evolves from a service economy to an experience economy, brands will distinguish themselves to the extent that they provide memorable experiences for their customers. To satisfy our customers' growing desire for experiences, we at Carlson Hospitality Worldwide are focusing on three imperatives: First, we are continually searching for new and fresh experiences for our guests. Second, we are providing experiences that generate positive emotions. Whether a customer is holding a family reunion in one of our hotels, taking an anniversary cruise, or treating someone to a birthday dinner, our businesses are ideal for creating memorable moments. Third, we are focusing on making our guests' experiences personal. Our technology infrastructure is giving us the ability to remember the specific needs and desires of individual guests - in effect, to serve markets of one. Carlson Companies is investing over $1 billion in innovative technological systems that will empower us to serve our customers as individuals. (See Technology article on pg. I8.) In addition to offering an award -winning hotel reservations system, we are constructing a systemwide technological network similar to a human nervous system. This neuro-network will enable us to respond to individual guests as one caring person responds to another, remembering preferences and anticipating them in the next encounter. It will allow our business enterprise to take on human characteristics. Our technology puts us at the forefront of the experience economy and positions our brands for future success. It gives our entire organization a vast memory capacity and the organizational power necessary to respond to customers' individual needs. It also underpins the single most powerful technical tool ever created to provide personal, memorable experiences: Gold Points Rewards" (See Gold Points article on pg. 7.) Gold Points Rewards is our vehicle for understanding our customers' needs and preferences ... for becoming more aware of special events in their lives ... for creating personalized offerings that bring their experiences to a higher level. This unique and powerful loyalty program allows us to learn and remember our customers' needs and to personalize our relationships with tens of millions of customers across all of Carlson Companies' hospitality, marketing, and travel businesses. The Internet will be another significant learning and marketing tool. With it, we CARLSON HOSPITALITY WORLDWIDE NAMED LODGING INDUSTRY "BEST PRACTICES" CHAMPION Four of Carlson Hospitality Worldwide's key business practices were recently named as industry best practices in a major research study of the hotel industry by Cornell University's School of Hotel Administration in conjunction with the American Hotel Foundation. The four practices include. 1. Carlson Hospitality Worldwide's award -winning worldwide reservations system, Curtis-C . SJf 2. Its patented Look To Book® travel -consultant loyalty program. 3. The co -branding strategy pursued by Country Inns & Suites By Carlson, through which the mid -tier lodging chain collaborates with established restaurant concepts. 4. Radisson Hotels Worldwide's creative methods of assuring total customer satisfaction, including innovative employee training and 100 percent guest satisfaction programs. CURTIS NELSON LAUNCHES NATIONAL TASK FORCE TO ATTRACT WORKERS TO LODGING INDUSTRY Curtis Nelson is leading a historic national task force of lodging industry leaders to address the vital need of attracting and retaining workers for America's lodging hospitality operations. As chairman of the three-year Blue Ribbon Task Force appointed by the American Hotel and Motel Association (AH&MA), Nelson cites employment as the most critical issue facing the industry today. "All across America, in every hotel, resort and roadside inn, managers are faced with a daily challenge of staffing all of the positions necessary to provide hospitality services to the industry's customer," Nelson said. Called "Experience Lodging - A Hospitality Workforce Initiative," the task force has identified its mission as "the development and implementation of a comprehensive strate- gic plan to enable the lodging hospitality industry to resolve and meet its current and future human resource needs." The task force will address the following goals: 1. Attract and retain the 'best of the best in the labor force. 2. Improve the workplace environment through improved wage and benefit packages, career development, recognition and mentoring. 3. Improve the industry's connectivity with the communities in which they serve, through outreach programs, educational efforts, inclusion initiatives and youth mentoring. 4. Improve the image of the hospitality industry by communicating the many opportunities . it offers as a great place to work and for career growth. can reach customers in ways we could not have dreamed of, even a few years ago. Each time we reach customers, and they reach out to us, we will learn more about their identity, their needs, and their preferences. And each time, we will improve our ability to anticipate, meet and exceed their expectations. We will be the first company with product offerings and a loyalty system that includes both the marketplace and the marketspace. We will be able to move seamlessly between actual locations and virtual locations. AquaKnox, Dallas, Texas, USA Technology allows us to develop loyal, personalized relationships with our customers. In the new millennium, this will be a necessity, not a luxury. The fact is, customers want us to anticipate and meet their individual needs. We are rapidly moving into a world in which consumers will have more power to control their environment than they ever have. The more they experience this control, the more they will demand customized experiences. In this wired, experiential world, the companies that succeed will be the ones that can touch people individually at all points of their lives. By touching people individually, successful companies will provide superior value. Carlson Hospitality Worldwide falls naturally into this category. As we harness the knowledge gained at every one of our touchpoints, we will make the next series of experiences all the more valuable. As customers receive the caring, trust, and respect we extend to them, they will continue to prefer the value-added experiences we provide. The Regent Wall Street, New York, New York, USA Caring. Trust. Respect. These are not mere words. They are the essence of hospitality relationships. Our business, for all its exponential growth and complexity, is still fundamentally simple. We are completely committed to serving the needs of our customers and creating loyal, learning relationships. The business strategy of providing one-to- one experiences will result in tremendous rewards. For example, we will charge pre- mium prices for greater value while reduc- ing the number of discounts necessary to persuade a customer to accept other offer- ings. We will also generate higher revenues per customer by knowing more about them and finding ways to offer more solu- tions. This will enhance customer retention and increase business volume through the positive word-of-mouth that results from satisfied customers. Our goal is to build trusting, caring, and respectful relationships, making our brands the brands of choice by learning from each encounter with every individual. And, finally, we will succeed by providing fresh, memorable, and personal experiences for markets of one. "An experience is a memorable event that engages individuals in a personal way, The company staging the experience uses its goods as props and its services as a stage, — Joseph Pine Co-author of The Experience Econonzy Carlson Hotels Worldwide® Providing the Experience of Value to Guests, Employees and Investors A message fmi Eric Dawziger By vigorously pursuing a strategy of creating value for employees and guests, Carlson Hotels Worldwide will deliver top dollar to investors around the globe. Employees. Hospitality travel is now the largest industry on earth, but will it have the best employees? And will these employees stay long enough to make an impact? At Carlson Hospitality Worldwide, we are working to make our hotels first choice by providing a positive work environment and The Regent Beverly Wilshire Beverly Hills, California, USA industry leading support programs in order to attract and retain the best people. We are emphasizing the retention issue throughout our hotels because we know the value of longevity in the hospitality business. People who are enjoying their work and feeling fulfilled will stay with us, and they will naturally create an atmosphere in which guests will feel welcome, as well. By attracting and retaining the best people, we are building brand value. Guests. One of my strategic goals for Carlson Hotels Worldwide is to ensure that we deliver the level of consistency that ensures guests will regard our hotels as their favored choice of lodging in their class. We will achieve this goal by creating a personalized, customized, and Ein experience for our guests; by hiring and retaining an outstanding staff who thoroughly enjoy their work; and by investing in cutting -edge technology. Our state-of-the-art CustomerKAREs" (Knowledge And Relationship Enabling) system allows us to learn from each encounter with a guest - to remember the little details that make a stay at our hotels personal, pleas- ant, and memorable. Guests will prefer our hotels because we provide an exceptional and personalized hospitality experience. Owners. From an investment perspective, owners are paying as much for the value of the brand as for direct reservations. That is why we focus on creating a superior guest experience and a satisfying employee environment. That is also why we have invested millions of dollars in developing a technological infrastructure unparalleled in the industry. Our acclaimed Curtis -Cs" reservation system, for example, delivers approximately 50 percent of hotel room revenues in North America, a figure which leads the industry. Eric Danziger; president, Carlson Hotels Worldevide Country Inn & Suites By Carlson, Minneapolis, Minnesota, USA At Carlson Hotels Worldwide, we are the stewards, guardians and gatekeepers of our brands for all of our hotels. My goal is to strengthen the value of each brand - to ensure that each is promoted and grown in a thoughtful, considered manner. This requires pursuing separate and distinct opportunities for each brand because each one is unique. Our hotels will never be dots on a map. Each one will be the right product in the right market for the right reasons. Our overarching goal is to provide value over the long term to all of our constituencies. By building on a solid foundation of respectful treatment of employees and individualized service for guests, we will become the most efficient, profitable company for our investors. We know that hospitality is a living, breathing, human business that is fundamentally about creating meaningful experiences. By excelling at this part of the business in all of our brands, we are creating the best hotel company in the world. Radisson Royal Santiago Hotel, Santiago, Chile ®® g®Idp®ir° c- %O •9rewards Gold Points Rewards Positioned to Become the World's Most Valued Points -based Currency universal, online points system gives customers unprecedented flexibility and provides partners with vastly increased sales. "We are very excited about the successfid launch of Gold Points Rewards because it sets new standards for the hospitality industry and exponentially increases the business opportunities within the brand network of Carlson Hospitality Worldwide," said Curtis Nelson, president and CEO, Carlson Hospitality Worldwide. This dynamic consumer incentive program is designed to fizlfill two main goals: generously reward consumers for their loyalty; and stimulate sales growth for the well-known retail, service and hospitality partners within the Gold Points network. GOLD POINTS REWARDS SPANS A NETWORK OF RESPECTED BRANDS • Radisson Hotels Worldwide® • Country Inns & Suites By Carlson® • T.G.I. Fridays' • Front Row Sports Grill • Friday's American Bar' • Italianni's° • SkyMall®, including 135 select retail merchants • MCI WorldCom • National Car Rental Gold Points takes the power of Carlson Companies and communicates it to customers, not as a marketing position, but as a value proposition. "We are providing loyalty currency while offering experiences customers desire. The result is loyal, long-term relationships. The reward itself is the short-term value we deliver. The lasting value is customized service, as we learn more about our customers' needs and preferences at each touchpoint," Nelson noted. GOLD POINTS REWARDS The Gold Points Rewards program allows members to earn and redeem points within a network of leading brands. Customers earn dining, travel and merchandise awards throughout the Gold Points Rewards network, which includes several of Carlson Hospitality Worldwide® dining and hotel brands, as well as some of the country's lead- ing travel, retail and communication companies. Gold Points® can be redeemed for future hotel stays, restaurant dining, airline miles, services, and merchandise; they can also be donated to selected non-profit organizations such as Make -A -Wish Foundation. Awards include some of today's most sought-after products and services. A state-of-the-art electronic system tracks all points earned throughout the partner net- work. This on-line, universal point system allows consumers to redeem their points quickly after earning them. For more inforination, connect to www.goldpoints.com "Our objective is to make Gold Points the most valuable points -based currency in the world by providing value in three important ways," Nelson said. "First, Gold Points can be earned in a wide variety of locations, allowing the customer to accrue them rapidly. Second, they can be redeemed anywhere within the wide network of brands, not only where they were earned. This adds further value. Third, they can be redeemed often because they are accrued so quickly. This further increases their value and positions Gold Points to be the world's most valued points -based currency. Key marketing strategies for Gold Points Rewards include customer retention and loyalty, acquisition, recognition, and continual learning about the needs and preferences of individual customers. "When we present customers with additional products and services through Gold Points Rewards and the Internet, we will do so on the basis of what we have learned about each customer. This focus on learning distinguishes Gold Points Rewards from traditional cross -selling tools. Our customers will choose only the value-added goods and services that are of interest to them as individuals. With Gold Points Rewards, the customer is always in charge," Nelson said. "Through our expanded network of Carlson Companies, we touch customers in many different locations and many different ways. We estimate that we will reach approximately two-thirds of the U.S. population every single year. No other hospitality company can provide such a high level of value over such a broad range of network partners. Only Carlson Hospitality Worldwide offers this unique and powerful opportunity," Nelson said. r^ REGENT INTERNATIONAL HOTELS Regent International Hotels Expands Worldwide as Exciting New Development Continues Five-star, luxury hotel and resort company expands in strategic locations A message from Paul Hanley Capping off an extraordinary year of global growth, Regent International Hotels has also unveiled spectacular new properties in two strategic key U.S. locations: New York and Las Vegas. Regent is in the midst of a vigorous drive to expand from its Asian heritage into major business and leisure destinations worldwide. "We will continue to pursue dramatic growth while preserving Regent's treasured reputation for excellent locations, quality architecture, inspirational interior design and superb personalized service," said Paul Hanley, president of Regent International Hotels. "The newest generation of Regent The Regent Grand Palms Las Vegas, Nevada, USA hotels and resorts not only honors its heritage, but takes it to new and exciting levels," Hanley added. Having joined Carlson Hotels Worldwide in 1997, Regent now has a portfolio of 14 luxury hotels and resorts with four more under construction or development. Regent International Hotels has established its position as a world leader in the luxury market, offering exceptional guest service, attention to detail, and uncompromising dedication to quality. A defining characteristic of these fine hotels and resorts is the distinctive culture of the company, called "The Regent Experience." Its essence is Luxury for All the Senses;"` which combines the warmth and culture of the local commu- nity with global luxury standards. The result is a caring hospitality experience that is genuine and personalized. Regent International Hotels offers the very best in hotel and resort accommodations to the upscale business and leisure traveler who seeks and expects only the finest service experience. From afternoon tea served to the accompaniment of a string quartet in the lobby lounge at The Regent Bangkok, to the luxurious revitalizing spa treatments offered at The Regent Grand Spa Las Vegas, Paul Hanley, pendent, Regent International Hotels Regent's extraordinary attention to detail has generated a devoted global clientele. Other amenities include 24-hour concierge, butler and valet service, complimentary overnight shoeshine, and a host of other indulgences. Regent's accomplishments have been noted by the media and critics. Its properties are consistently singled out for praise and acclaim from prestigious publications, including Institutional Investor,, Conde Nast Traveler and Travel & Leisure magazines, as well as independent rating services. High points of 1999 include the opening of The Regent Wall Street, a 144-room luxury property on New York City's Wall Street. Designed to offer the personalized hospitality of a luxurious private home rather than a business hotel, the property's exterior retains its historic Greek Revival design, while the interior reflects the strong Italian Revival architecture. The renovation of this 160-year-old landmark building includes the newest and most luxurious ballroom in New York City. This year also marked the opening in Las Vegas of two new properties that redefine the luxury resort experience. M The Regent Singapore, Singapore The Regent Grand Spa and The Regent Grand Palms anchor the south and west ends of the affluent master -planned community, The Resort At Summerlin, offering a refined ambiance and panoramic views of Red Rock Canyon and the glittering Las Vegas strip. State-of-the-art spa and a choice of numerous, nationally -acclaimed golf courses distinguish these properties. A new hotel was added in India with the opening of The Regent Mumbai. This elegant 508-room property is located in India's financial capital and has set new standards for luxury accommodation throughout the country. The hotel is situated in the historic Band Stand area of Mumbai, close to the Bandra Kurla, Aandheri and Worli business districts and just minutes from the city's international airport. Panoramic views over the Arabian Sea are enjoyed from every one of the extravagantly appointed guest rooms and suites. In 1998, The Regent Almaty, Kazakhstan was added, bringing Regent to this key business center of Central Asia for the first time. From its birthplace in Asia, Regent International Hotels is now expanding throughout the world. New projects are also under development in the Caribbean, Canada, Mexico, Europe and the Middle East. The Regent Bererl) Wilshire Beverly Hills, California. USA What differentiates Regent hotels from other operators? "Without question, it is the power of Carlson Companies and our organizational sales, marketing and communications muscle," said Hanley. "Carlson Hospitality Worldwide's brand management strategy centralizes brand support resources to drive individual brand development, marketing, and operations. Together we are stronger, we have more resources, and more experience than any other company in our segment. This powerful combination of resources positions Regent as the luxury brand of choice for world -class cities and destination resort developments," Hanley said. The Regent rlhnaty, Kazakhstan The Regent Grand Spa Las Vegas, Nevada, USA 9 Radisson HOTELS WORLDWIDE' The difference is genuine.s"' Building Superior Brand Value for Investors A message from Brian Stage o increase market share and deliver superior brand value to our investors, Radisson Hotels Worldwide has set four strategic imperatives. They are: to drive relentlessly for quality and consistency, pro- vide Genuine Hospitality' with a personal- ized guest experience, leverage the synergistic power of Carlson Companies, and invest in developing "halo" hotels in key markets. Radisson SAS St. Helens Hotel Dublin Drtblin, Ireland Drive for quality and consistency. Earning the trust of consumers is vital. Radisson has retained a quality assurance firm to conduct an objective, guest -oriented review of the product and service experience in each hotel. At the same time, to maintain our competi- tive edge, Radisson is developing a proactive, long-term plan for renovating each hotel with a special focus on enhancing the quality of guest rooms. These efforts are coupled with a disciplined approach to evaluating hotels that seek to join the system. Radisson Hotels Worldwide introduced a neiv industry -leading, premier collection of guest body care amenities named ASiRA Body Care - Genuine Essence. The name ASiR.A symbolizes some of the collection's unique attributes that include Authentic, Stimulating. Indulgent, Revitalizing and Alluring. Designed exclusively for Radisson, ASiRA conveys the brand'. foals on quality and genuine hospitality service culture featuring a natural blend of environmentally friendly ingredients and patented packaging. Provide Genuine Hospitality and a personalized guest experience. Natural, gracious hospitality has long been the hallmark of Radisson success. To give guests the feeling that they are welcome and anticipated, Radisson is developing technologies that will allow our hotels to provide more personalized services to meet individual guest needs. Leverage the synergistic power of Carlson Companies. One unique advantage Radisson has over any other hotel company is its syner- gistic relationship with Carlson Companies. The powerful network of Carlson Wagonlit Travel;" Carlson Marketing Group" and Carlson Hospitality Worldwide' drives guests into every Radisson in the world. All of these companies will be participating in the Gold Points Rewards" program. This guest incentive program is an important tool for reaching the common customer base of Carlson's related businesses. Invest in developing halo hotels in key markets. There are destinations where Carlson's travel businesses and the Carlson Marketing Group send thousands of their clients every year. These are the places where we need to be, because they are where our customers need to be: New York, Chicago, Boston and other key cities and resort destinations. To ensure that the properties we add to our system will be in strategic Ana BODY CARE Brian Stage, hretident, Radisson Hotels Worldwide locations, we are gaining access to significant sources of investment capital with the goal of adding about 30 Radisson-owned and managed hotels to our brand over the next three years. This initiative, plus our continuing success in franchising hotels, will enable Radisson to add at least one location per week during the next three years. The value of the brand to an individual hotel manifests itself in an increased volume of reservations and strong average rates. For this reason, we have developed the most powerful reservations delivery system in the industry. This award -winning distribution and delivery system delivers approximately 50 percent of all revenues. All our efforts to increase the value of the brand lead straight to the bottom line. By focusing on quality and consistency, providing Genuine Hospitality, leverag- ing Carlson Companies' technology and synergy, and owning and managing hotels in key markets, we will deliver outstanding profitability for every hotel in our system. 10 Radisson Marketing Focuses on Strong, Unified Global Message Focusing on presenting the message of a superior guest experience A message f °om Maureen O'Hanlon "Providing guests with a superior experience requires presenting a strong, unified global message. Our goal is, therefore, to consistently present the Radisson brand across our over 400 hotels, all the while listening to the voice of the customer to create the ultimate guest experience," said Maureen O'Hanlon, executive vice president, sales and marketing, Radisson Hotels Worldwide. Four marketing vehicles deliver the Radisson message to guests worldwide. Global Marketing. A strong force for presenting a consistent message to customers is the Radisson Global Brand Council, comprised of senior management from each region. This multi -national group bridges local market needs with a worldwide vision by creating marketing policies that ensure consis- tency across all hotels. "Since the Council began its work three years ago, we have had remarkable upturns in international business," O'Hanlon said. The initial efforts of the Global Brand Council resulted in the widely acclaimed Genuine Hospitality" ad campaign. Radisson Gold Rewards. Launched this year, Radisson Gold Rewards is a unique, industry -leading guest loyalty program that allows its members to earn and redeem points at Radisson hotels, as well as with an exclusive network of leading dining, travel, retail and communication companies. This program is designed to attract new customers from a national network of partners, including the T.G.I. Fridays° family of restaurants, Country Inns & Suites By Carlson® MCI WorldCom and SkyMall. "Extraordinary customer service is the cornerstone of the Radisson Yes I Can!° philosophy, and providing a choice of rewards allows us to satisfy our customers more powerfully than ever before," said Brian Stage, president of Radisson Hotels Worldwide. Look To Book' the travel industry's premier on line travel consultant loyalty program, was recently recognized as an example of excellence in the lodging industry. The recognition follows a year of research conducted by the School of Hotel �® Administration at Cornell University. The program allows individual travel m consultants to automatically and electronically accumulate award points booking guests at Radisson and Country Inns & Suites By Carlson. The points can be redeemed for valuable merchandise, including clothing, travel and gift certificates for a number of retail outlets. Global Sales. Radisson direct sales generate nearly a quarter of a billion dollars from strategic relationships with key leisure, transient, and group clients. To improve the quality of these relationships, serve its clients more knowledgeably, and increase revenues, 65 sales people from around the world met in Dublin to discuss 50 of our top global accounts. They pooled information such as previously negotiated rates, typical number of corporate travelers, upcoming meetings, technology issues, and other factors that affect each client's experience with Radisson. `Rather than treating our key clients as individual accounts located in different countries, we now have the ability to approach them on a truly global basis. And with all of our sales people able to share account information through our award -winning technology, we have a decided edge on the competition," O'Hanlon said. This meeting was the first of many to come. Manrren O'Hanlon, execntaw vice president sales and marketing, Radisson Hotels Worldivide Genuine Hospitality Campaign. The "captured moments" Genuine Hospitality advertising campaign clarifies the Radisson positioning and creates a powerful impression of consistency to its guests worldwide. "We are powering up to a higher level with two new initiatives," O'Hanlon noted. A hard- hitting promotional print ad package builds on the momentum and adds a strong retail message including rates and program logos. Increasing the momentum, a television commercial conveys the message that Radisson is an oasis of genuine caring. 11 Radisson Growth Explodes Worldwide Brand makes dramatic inroads in key world business theaters A message from T. Peter Blyth Penetrating key markets around the world, Radisson Hotels Worldwide is continuing its aggressive drive toward worldwide expansion while maintaining a focus on quality. The addition of 50 hotels in 1999 puts the hotel industry leader well ahead of its development goals. New additions bring the total number of properties to over 400 and the number of rooms under the Radisson flag to nearly 100,000 worldwide. As Radisson progresses in its strategy to build a preferred hotel brand for consumers, investors, and employees, it is opening properties in key markets around the world. Development this year has succeeded in upholding this strategy. Radisson is gaining visibility and, at the same time, intensifying the synergy with its sister companies within Carlson Companies, whose businesses are concentrated in key locations. Radisson Hotel & Suites Sydney Sydney, Australia Asia Pacific Radisson has greatly strengthened the brand in Asia Pacific by acquiring controlling interest of Sydney, Australia -based DC International Limited (DCI), which operates 18 Radisson hotels and resorts in Australia, Indonesia and Malaysia. This acquisition sets the stage for corporate - directed management and expansion of Radisson hotels and resorts in this region. It also expands the geographic area within Asia in which DCI can exclusively operate Radisson hotels to include ten additional countries: Singapore, Thailand, Vietnam, Brunei, Cambodia, Indonesia, Mynmar, Laos, Malaysia and the Philippines. Highlights of recent Radisson development in this region include the addition of The Wales House Hotel, a historic landmark being restored to a five-star Radisson hotel in the heart of Sydney, Australia, in time for the 2000 Olympics. This year also marked the opening of three Radisson hotels in India. "India is a top development priority in the continuing globalization of Radisson Hotels Worldwide, and our presence in the gateway cities of India and other key Asian markets will give us a competitive advantage," said James Olson, senior vice president of development, Asia/Pacific, Carlson Hospitality Worldwide. The international five-star Radisson Hotel Delhi, adjacent to the New Delhi International Airport, is an ideal location as the first international hotel seen by foreign travelers arriving in the capitol. The Radisson Hotel St. Thomas Mount, T. Peter Blyth, president, Radisson Hotels Worldwide Development Chennai (formerly known as Madras) is located in an important film and technology center in the country. The Ffort, A Radisson Resort, is located in West Bengal, Raichak, near Calcutta. Radisson Suite Hotel Boea Raton, Florida, USA Europe, the Middle East and North Africa Radisson SAS Hotels Worldwide, the brand's sole franchisor in these regions, is rapidly expanding toward a goal of 200 locations at the end of 2000. Hotel growth has been dra- matic in Europe, where a large percentage of hotels are, as yet, unaffiliated with brands. "As the European market continues to consolidate through a common currency and easing of trade barriers, the power of branding will serve an increasingly important role in the European hotel industry of the new millennium," said T. Peter Blyth, president, Radisson Hotels Worldwide Development. RADISSON'S STRATEGIC BUSINESS GOAL IS TO BUILD A BRAND THAT IS TRUSTED BY CONSUMERS, PREFERRED BY INVESTORS, AND SOUGHT BY THE FINEST EMPLOYEES. "Our brand will be trusted by consumers because it will deliver consistent quality and Genuine Hospitality. We will demand higher rates, create greater profits, and improve the value of investments. For these reasons, we will be preferred by investors. And because we will treat our employees as individually as our guests, we will be a company that is sought by the finest employees." T. Peter Blyth, president Radisson Hotels Worldwide Development 12 Radissot Hotel St Thomas Mount, Clwinai, India Radisson is now the largest upscale international hotel operator in Germany, and has achieved complete coverage of the Nordic countries. The Middle East remains a major growth area; at the end of 1999, Radisson SAS was operating a total of 10 hotels in the region. Radisson Edwardian Hotels has enjoyed a record - breaking year in the United Kingdom. They currently operate 10 hotels in London's business and entertainment district, and the Radisson Edwardian Hotel at Heathrow airport has repeatedly been rated by Business Traveler magazine as the best airport hotel in the world. Africa An exciting new venture has resulted in the introduction of Radisson hotels in South Africa. Plans include a beautiful 182-room hotel on the waterfront in Cape Town. In conjunction with T.B.B. Holdings, a leading South African invest- ment bank, Radisson has penetrated the leisure hotel industry in the burgeoning Southern Africa region. Latin America, Central America and The Caribbean Radisson growth in Latin America is spearheaded by the company's development partner for the region, Radisson Hotels International Latin America, which holds the exclusive license to the World Trade Center franchise in Central America and most capital cities of South America. The World Trade Center concept unites local entrepreneurs, chambers of commerce, medium -to -large businesses, and govern- ment agencies in a common goal: to pro- mote and facilitate international business. Radisson Hotels Latin America currently operates 14 hotels, most of which are adja- cent to world trade centers. Radisson Latin America intends to add five more hotels and world trade center facilities in the next five years. Future development plans include hotels in Montevideo, Uruguay; Buenos Aires, Argentina; Sao Paulo, Brazil; Colon, Panama; and a new breed of Radisson Resorts on the beautiful Caribbean island of Aruba. i-,ADISSON RECEIVES INDUSTRY ACCOLADES • European readers of Tour and Travel Neus ranked Radisson SAS the Top European Hotel Company. The Gold award is the highest honor given by this respected magazine. • Radisson was honored with the prestigious Destino award for Best Hotel Chain in Latin America. Radisson received the top award from the Latin American tourism industry. • For the third successive year, readers of Business Traveler magazine voted London's Radisson Edwardian at Heathrow the best airport hotel in the world. • Radisson Seoul Plaza was ranked as the top hotel in Korea in products and services in the annual National Customer Satisfaction Index (NCSI). The index interviews patrons directly and is recognized in the United States and Europe as the most complete and accurate survey of its kind. North America In line with Radisson Hotels Worldwide strategy of developing managed hotels in strategic locations, highlights in North America this year included openings in Denver, Colorado; Annapolis, Maryland; San Francisco, California and Toronto, Canada. Future development will include properties in New York, Los Angele, Las Vegas and a premier Radisson Resort in the Oro Valley in Tucson, Arizona. Radisson Hotel Delhi, New Delhi, India Radisson Cape Town,, South Africa 13 j COUNTRY INNS 6t SUITES Ji Country Inns & Suites By Carlson is Fast Becoming the Preferred Mid -tier Brand This rapidly growing brand is rising to prominence with great people, great resources and great expectations. A message from Paul Kirwin Im pleased to report that our star continues to rise, and the past year was a terrific one for our business," said Paul Kirwin, president, Country Inns & Suites By Carlson, an established leader in the mid -tier segment of the lodging industry. Country Inns & Suites is continuing with an annual growth rate of over 35 percent. Over 200 hotels are now open and operating in six countries, with another I10 license agreements signed, under construction or in property development. This dynamic company is well on its way to reaching its goal of 300 hotels in the year 2000. In the year 2003, it expects to have 500 properties. Minneapolis, Minnesota, USA Its unique physical design and warm, 'country hospitality' differentiates Country Inns & Suites By Carlson from its competitors. When guests enter, they experience a residential interior complete with oak floors, a fireplace, an open staircase and the aroma of freshly baked cookies. The instant message is "comfort, security and home." Country Inns & Suites' rooms combine the elements of a charming bed and breakfast with modern conveniences and amenities such as complimentary breakfast; in -room irons, ironing boards and coffeemakers; weekday morning newspapers; and free local telephone calls. Many locations feature exercise facilities and swimming pools. Rates in North America average $65 per night, and children 18 and under stay free with an adult. Add to this list a welcoming style of service associated with being a guest in the home of a friend, and the unique selling proposition is clear. Three factors fiuel the success of Country Inns & Suites, Kirwin said: great resources, great people and great expectations. Grew ReSOUrces. Country Inns & Suites By Carlson delivers a high quality development, product design, training, sales, and marketing programs that enable franchisees to drive premium sales and profitability. Ptasuing an aggressite development pace, balanced ivith careful attention to quality and location. "As we grow, we are increasingly sought out by large corporate travel accounts looking for mid -tier properties around the world," Kirwin said. To encourage development in key locations, the company developed a Franchise Increment Financing (FIF) program, which offers qualifying franchisees a cash payment of up to $250,000 per newly constructed hotel. Constantly improving product design and operating standards. "Our new cost- effective interior design package offers a prototypical scheme that includes fabrics and furniture, as well as wall and floor coverings for all interior areas. Changes in the room setup are making the rooms friendlier to business travelers needing an 'office' in the evenings. Better lighting, swiveling TVs, more comfortable chairs, and easily moveable telephones are just some of the changes that will make our rooms first choice among value -conscious business travelers," Kirwin noted. • Increases in training, consulting and quality assurance for general managers and franchisees ensure that product quality remains high, brand equity increases, and that franchisees generate the best revenue from their hotels. Paid Kirwin, President, County, bins & Suites By Carlson Leveraging marketing resources to boost the potter of each hotels local entrepreneurial spirit. "We have pooled our marketing dollars to buy and develop a television advertising campaign; spots can be customized to allow individual properties additional exposure in their markets. Our entry into the medium of TV will greatly increase our visibility," Kirwin said. Using technology in innovative ways to increase revenues. "Our CountryLine® reservations delivery system delivers 35 percent of systemwide revenues. As we have updated and improved our web site, we have noticed a significant jump in reservations. And buy -in to the Gold Points' program is building brand loyalty and increasing the amount of revenue we generate," he added. Great People. Of all the accomplishments Country Inns & Suites has achieved, Kirwin is most proud of the people the company attracts. How else, he asks, could Country Inns & Suites achieve a 98 percent guest satisfaction rating for the seventh year in a row. "We've been told again and again that Country Inns & Suites has some of the finest, kindest, most caring people in this business. We are committed to making life better for our franchisees and employees, as well as our guests," he added. "We're working hard to inspire that kind of attitude and commitment in all of our people," Kirwin continued. "In addition, we provide franchisees with the services of committed professionals in every department at the corporate level. And we support them in finding and enlarging a core group of superstar employees who ensure guest satisfaction," Kirwin said. In addition, he noted, the guest service training tool, Country Hospitality I Promise® has recently been revamped, resulting in a powerful training instrument to help franchisees provide lifetime value for guests. 14 INDUSTRY ACCOi1 a)ES FOR. COUNTRY INNS & SU j. i ES BY CA RLSON This was a banner year for Country Inns & Suites, which received significant honors from respected industry magazines. • Country Inns & Suites was ranked number -one in several mid -tier -segment categories in the 1999 Top U.S. Hotel Chain survey published by Business Travel News. This survey is an annual measure of corporate travel planners' opinions of the properties their companies and clients use. Country Inns & Suites was ranked best in quality of business amenities, helpful and courteous staff, overall price/value relationship, and promptness of commission payments. • Business Travel News also ranked Country Inns & Suites number two in the mid -price category for hotels without food and beverage, a significant move that is up from fifth place in 1998s survey. • Success magazine's "Franchise Gold 100," a list of the most sought after franchises that offer the best opportunities for owners, included Country Inns & Suites for the first time in 1998, • For the third year in a row, Entrepreneur magazine ranked Country Inns & Suites to its 1999 "Franchise 500" list. "We are fast becoming the brand of choice in the mid -tier segment," said Scott Meyer, vice president of operations -franchise services. "Surveys such as the one in Business Travel News indicate how strongly the brand appeals to our guests. This is the most important compliment we can receive, coming directly from the people we serve," he added. Dallas, Texas, USA Great expectations. Country Inns & Suites By Carlson has great expectations for global development, increased revenue and brand equity. Development. "In addition to our vigorous expansion in North America, we are growing in Europe, the United Kingdom, India, Central and South America, and Australia, and we are actively pursuing growth in the Middle East. As more and more countries encourage private enterprise to raise standards of living, there is a growing need for mid -market products. Our goal of becoming a global company, combined with the powerful support of our parent company, positions us to successfully bring our product to the rest of the world," Kirwin commented. Flexibility in the concept gives Country Inns & Suites an additional advantage over other brands. "Flexibility is the key to our prosperity and growth," said Nancy Johnson, senior vice president of development. "Developers can start from scratch or convert an existing building. Plan a cozy inn with 60 rooms or a multi -story mid -rise with 200 suites. No matter where you're targeting a property - country or booming metropolis - we'll help you develop and design just the right property for your market and budget," she added. • Revenue. "With year-end 1998 occupancy exceeding 70 percent in North America and an average rate of $65, we continue to be an industry leader in RevPAR and market share," Kirwin said. Brand equity. Building consistency and reliability across our brand requires holding high standards for our business partners as well as ourselves. By enforcing quality standards, we are maintaining the integrity of the entire system. This returns to us in the form of repeat business and increased RevPAR," he added. Nangjohnson, senior she president of d—lohment, Coanti y Isms & Suites By Carlson For owners and operators, Kirwin s fundamental message is this: "We want Country Inns & Suites By Carlson to be known for four things: 1. providing excellent guest, employee and owner/operator satisfaction; 2. providing a strong Country Culture of teamwork, innovation, improvement and service; 3. providing consistent Country Hospitality in our product, service and marketing; and 4. achieving premium revenue and profit performance around the globe. By working together to address our mutual expectations, we can build a truly great brand - one that meets all of our needs for long-term profit and success." Orlando, Florida, USA 15 Carlson Cruises Worldwide ~ RADISSON SEVEN SEAS CRUISES Radisson Seven Seas Cruises Pursues Extraordinary Rise to Leadership in the Luxury Cruise Industry Named World's Best Small Cruise Line by readers of Travel & Leisure A message from Mark Conroy Radisson Seven Seas has taken another bold step toward its goal of launching a new generation of luxury vessels: the six -star cruise line has commissioned a new ship for its award -winning fleet. The 708-guest cols Seven Seas Mariner will be the company's first all balcony, all -suite ship and also its largest. "We are seizing the opportunity in the luxury market for a ship of this size and further expanding the options available to our guests," said Mark Conroy, president, Radisson Seven Seas Cruises. ssc Radisson Diamond "While the Sewn Sear Mariner will preserve the intimacy, personalized service and generous space -to -guest ratios of our other vessels, she will satisfy those who wish to experience a larger vessel, giving them more dining and entertainment options while preserving the special cruise experience that makes them loyal to Radisson Seven Seas —impeccable service, fine dining, destination -intensive itineraries, and luxurious amenities and accommodations," Conroy added. The [Mariner will bring to six the number of vessels in the world's most diverse luxury fleet, each with a distinctive itinerary, design and ambiance. In its extraordinary rise to leadership in the cruise industry, Radisson Seven Seas Cruises has achieved the highest levels of customer satisfaction while offering an unprecedented choice of product in the luxury market under a single operation. In addition, the company has been named the World's Best Small Cruise Line by Travel & Leisure magazine in its prestigious annual readers survey in 1999. Well on course with its strategic goal of adding one ship every year for the next five years, Radisson Seven Seas Cruises in 1999 celebrated the launch of the Seven Seas Navigator, a 490-passenger luxury cruise ship. The first in a new generation of luxury vessels owned by the cruise line, it is to date the fleet's fastest and largest vessel. "The Navigator has the ability to operate virtually anywhere in the world while preserving the small -ship intimacy our guests value so highly, along with spaciousness, varied itineraries and luxurious amenities; Conroy said. Feedback from guests guided its design, which includes 350 to 1,000-square-foot suites and private balconies for 85 percent of its cabins. The Navigator also features a seafaring Is Paid Gauguin Mark Conroy, president, Radisson Saw Seas Cruises aromatherapy spa by Judith Jackson, the renowned health and beauty advisor and author. Preceding the Seven Seas Navigator are two vessels which consistently delight guests and industry critics alike. The 350-guest ssc Radisson Diamond, the fleet's first vessel, distinguished herself immediately with spacious ocean view accommodations and generous crew -to -guest ratios. The world's first twin -hulled cruise ship, she delivers unprecedented stability at sea. The Radisson Diamond routinely receives top industry awards, including a six -star rating from Fielding's Worldwide Cruises and a six ribbon rating from Stern's Guide to the Cruise Vacation. In addition, the ship was named the Best Cruise Value in the ultra -deluxe category by Ocean & Cruise Nevus. Also earning top industry honors is the mis Song of Flower, sharing the "Best Cruise Value" award in the ultra -deluxe category by Ocean & Cruise News. This extraordinary ship has also received Fielding's Worldwide Guide to Cruises' top six -star rating for the third year in a row - as well as six ribbons from Stern's Guide to the Cruise Vacation. Also in 1998, Song of Flower captured first place in four of seven categories (best ship overall, top value for the money, best 16 rn1s Seven Sear Navigator cuisine and best shore excursions) in the second annual poll conducted by Cruise Critic on America Online. This intimate vessel, which serves 190 guests, traces the exotic shores of Asia, New Zealand and the Southern Pacific seasonally and spends cols Song of Mono summers in the Mediterranean and Baltic. She is renowned for her yacht -like ambiance and Scandinavian refinement. Rounding out this distinguished fleet are two other remarkable vessels. The nds Paul Gauguin is the most deluxe cruise ship ever based in Tahiti and French Polynesia year- round. Specially designed for warm water cruising, she boasts the highest space -to -guest ratio of any ship in the U.S. market and features menus created by award -winning chef Jean-Pierre Vigato of Paris' exclusive Apicius restaurant. In 1999, this 320- guest deluxe vessel was also awarded six ribbons from Stern's Guide to the Cruise Vacation and received a five star rating from Fielding's Worldwide Cruises. The cruise line also markets select sailings for the 184- guest luxury adventure ship inIs Hanseatic, which circumnavigates the globe with exploration cruises in the Antarctic. The only cruise line to cover all the earth's continents, Radisson Seven Seas Cruises continues to be a leading global player in the luxury segment of the cruise industry. Backed by the global marketing power of Carlson Companies, Inc. and strengthened by synergistic relationships with its sister companies, the cruise line has access to far- reaching capabilities spanning the hospitali- ty, marketing and travel industries. Its reservations center is located within Carlson Hospitality Worldwide's state-of-the-art worldwide reservations center and benefits from the highly successful Look To Book® travel consultant incentive program. Its rise to distinction has been founded on unwavering commitment to the highest standards in quality, service and value. "At Radisson Seven Seas Cruises, we understand that our guests want a destinational experience. We provide them with itineraries to some of the most exotic and intriguing destinations in the world, serve them with impeccable attention to detail, and treat them as the distinguished individuals that they are. These outstanding services, combined with our aggressive strategic growth plan, position us for continuing leadership within the luxury cruise industry," Conroy said. m/s Hanseatic 17 Award -Winning Technology Drives Carlson Hospitality Worldwide's Global Success Technology delivers innovative global marketing, superior property - management capabilities and a customized guest experience. A message f rom Scott Heintzeman We have passed a significant milestone in our drive to deliver industry - leading technological capabilities to our hotels," said Scott Heintzeman, vice president, knowledge technologies, Carlson Hospitality Worldwide. "A three year investment of time, energy, and money has resulted in the com- pletion of our monumental project: creating a cutting -edge infrastructure for our core business -delivery systems. These systems give us world -class capability to deliver guests to our hotels, serve them, and retain them," he noted. Sell them with Curtis-C. Carlson Hospitality Worldwide's industry -leading global reservations system, Curtis-C (pronounced courtesy), was a three year journey completed in seven phases while accomplishing three major initiatives: integrated the company's worldwide systems; prepared it for massive growth; and created a clear focus on the customer service imperative. "The new Curtis-C system is a global system with the ability to create and distribute products worldwide in seconds and implement yield management strategies instantaneously. It provides faster, easier and more accurate information which improves sales performance and customer satisfaction," said Heintzeman. It is a vital cornerstone in achieving the customer -focused strategic vision of Carlson Hospitality Worldwide for the next millennium. "Our Curtis-C global reservation system puts customer information where it can be best used to customize the hospitality experience," added Heintzeman. This multi -million dollar system supports all of the hotel brands within Carlson Hospitality Worldwide, serving over 600 locations in 54 countries. Curtis-C's phenomenal effectiveness can be seen in its delivery power. In the United States, Curtis-C delivers over 48 percent of room revenues and captures over 70 percent of our centrally processed business electronically via the Global Distribution Systems (GDS). In Europe, Curtis-C delivers over 25 percent of hotel room revenues and over 15 percent in Asia. A 1997 survey by Graycon Company ranked Curtis-C as number one in occupancy contribution. Curtis-C harvests business and manages hotel reservations business of Carlson's brands in real time worldwide. It is built upon a three-tier client -server architecture, utilizing an Oracle database; global data network; Sequent computer; and Forte language. Through these advanced components, Curtis-C is highly scaleable, enabling the delivery of new marketing programs to Carlson's hotels and sales force, enhancing the selling process and allowing hotels to better manage rates and availability. Serve them with HARMONY. Carlson's state -of -the art property management system, known as HARMONY, provides hotel managers with the tools they .need to manage revenue and market their hotels through global reservation distribution channels. "The HARMONY database management system allows each property to manage its own revenue, thus increasing efficiency and sales effectiveness," Heintzeman explained. "Each hotel can now react immediately to a rapidly changing market. Within seconds, new rate products can be placed on the shelf, existing products modified, new selling strategies implemented and availability controls adjusted," he added. Scott Heintzeiitan, vice pnerident, knowledge tahnologies, Carlson Hospttahty Worlds ide Two new tools provide additional property management support. The Guest Communication Management System is unique in the hospitality industry. It monitors and centrally manages all customer service issues in all hotels, supporting 100 percent customer satisfaction initiatives. It stores information with the guest central profile to provide a complete history of the guest's experience with the brands. The GDS Rate Shopper provides information about hotels in the competitive set. It automatically searches the GDS and gathers data on the rates, packages, and availability of local competitors. A vast improvement on its market competitor, this system drills deeply into the pricing and availability for all competitors' products, giving Carlson hotels a large competitive advantage. HARMONY also includes a suite of business -building tools that connect individual hotels with the rest of the brand. It is now tightly interfaced and synchronized with Curtis-C, enabling total control of hotel databases and selling strategies and resulting in increased RevPAR and improved guest service. Bring them back with KARE. The CustomerKARE system -Knowledge And Relationship Enabling system —allows hotel staff to communicate with guests individually and serve them personally by bundling together all the information concerning an individual guest's needs and preferences. In effect, it provides a "service memory" from one visit to another, so that staff can remember guests' needs, anticipate them, and provide customized service. "It is a key tool in providing superior customer satisfaction because it helps us know our guests and build long-term, loyal relationships with them," Heintzeman noted. CustomerKARE also supports the Gold Points Rewards" loyalty program. 18 Superior technology Radiation Seven Sear Cruises Country Inns & Suites By Carlson "We now have a rock -solid technical foundation on which to build a large, successful family of hospitality businesses," Heintzeman said. "Going forward," he added, "our strategy will be to continue to heavily leverage our three core platforms. Because markets and technologies change so rapidly, we have the capabilities to quickly deploy new versions and upgrades to our systems. With the highly defined standardized hardware platform of Curtis-C, it lowers the training requirements for new applications, reducing the cost of adding new capabilities." "We remain focused on our vision — enabling our hotels to deliver a personalized, caring experience to each of our guests. Our high-tech systems are designed to support our 'high touch' initiatives. In this way, Carlson Hospitality Worldwide will increase brand value, grow RevPAR, and enhance customer satisfaction," he said. SMITHSONIAN INSTITUTION PLACES CURTIS-C RESERVATIONS SYSTEM IN ITS PERMANENT COLLECTION Curtis-C, Carlson Hospitality Worldwide's reservations system, is now on permanent display at the Smithsonian Museum in Washington, D.C. The award -winning system was chosen for a collection that includes the most innovative applications in the history of information technology. "The primary source material submitted by Carlson Hospitality Worldwide will enrich the National Museum of American History's growing collection and contribute significantly to the museum's ongoing efforts to chronicle the Information Age," said Spencer R. Crew, director, the Smithsonian's National Museum of American History. The laureates in the collection have demonstrated superior ability to utilize new information -age tools to extend the benefits of technology to society, according to Dan Morrow, executive director of the Computerworld Smithsonian Award Program. Naturally, the Technology group is pleased. "It is an incredible honor to have our reservations technology as a permanent fixture in one of the world's most prestigious museums," said Scott Heintzeman. "Providing our brands and hotel locations with the industry's most advanced reservation technologies has been a top priority for Carlson Hospitality Worldwide. This honor reflects the success of these efforts," Heintzeman added. 19 Carlson Restaurants Worldwide"" Carlson Restaurants Worldwide is a Global Leader in the Casual Dining Industry A message from Wallace B. Doolin Aglobal leader in the casual dining 1 lindustry, Carlson Restaurants Worldwide is building on the strength of its core T.G.I. Friday's brand, while selectively developing new restaurant concepts in the sophisticated and upscale dining segments. "T.G.I. Fridays is a leading global brand whose success is driven by a combination of upbeat atmosphere, innovative menu items and legendary service. We understand that diners want a memorable experience, not just an incredible tasting meal," said Wallace B. Doolin, president, Carlson Restaurants Worldwide. The first T.G.I. Friday's opened in 1965 in Manhattan's Upper East Side. Today, Carlson Restaurants Worldwide has achieved over $1.4 billion in systemwide revenues. The company currently owns, operates or franchises more than 560 restaurants in 46 countries. Carlson Restaurants Worldwide's mission is to be the global champion of branded retail businesses distinguished by innovation in food, beverage and communication and its legendary service culture. T.G.I. Fridays T.G.I. Friday's guests have come to enjoy the innovation Fridays'offers with food items such as Pizzadillas"', Friday's Jack Daniels' Grill and Friday's Chop House Classics, as well as innovative beverages such as the Ultimate Margarita. Front Row Sports Grill combines two of America's greatest loves - food and sports -in one location and appeals to men, women, singles and families alike. Designed for development in major sports stadiums, this innovative concept offers a complete entertainment and dining experience that features state-of-the-art technology with multiple television screens for viewing a variety of spotting events. Front Row Sports Grill was the first full - service, casual dining chain restaurant to open in a professional American ballpark. Promptly considered a home run by its fans when it debuted in Arlington, Texas, in 1994, Front Row Sports Grill locations also include Bank One Ballpark in Phoenix, Arizona. Friday's American Bar builds on Friday's extensive experience in the bar business to bring Friday's American atmosphere into airports and downtown Cuban locations. Friday's American Bar units are designed to be quaint, neighborhood -style gathering places. The menu contains tasty American appetizers as well as additional classic T.G.I. Friday's items, such as Loaded Potato Skins, Friday's Wrappers'"', Chicken Fingers and Friday's great hamburgers. The Friday's American Bar drink menu includes an extensive range of beverages, both alcoholic and non-alcoholic, presented with the T.G.I. Friday's bartender's signature flair. Star Canyon features the New Texas Cuisine created by renowned chef Stephan Pyles, a fifth -generation Texan, who has based his unique recipes on the many cultures and historical eras of the Lone Star State. The Wallace B. Doolin, president, Carlson Retantants Worldivide Tinipano Italian Chophouse, Rockville, [blatyland, USA interior of the Star Canyon restaurants is a sophisticated Texas ranch ambiance, combined with contemporary decor and a bit of cowboy whimsy. The restaurants focus on the exposed kitchen, where diners can view and enjoy the cooking production. Careftilly selected prod- ucts indigenous to Texas and Mexico are the focus of the menu. There are currently two Star Canyon restaurants — Dallas, Texas and Las Vegas, Nevada. AquaKnoxs" features Pyles' Global Water Cuisine, inspired original seafood dishes adapt- ed from the cuisine of the Far East, Europe, North Africa, Mexico, and Central and South America. Sophisticated seafood dishes include Potato Crusted Sea Bass with Olive Oil Poached Tomatoes, Artichokes and Black Olive Essence. The interior design of the Dallas, Texas restaurant features contemporary minimalist Asian influences and water themes, including a 400-gallon decorative aquarium and an etched -glass "wall of water" that separates the exhibition kitchen from the dining room. 20 }itIDAYS a "I AQ U%KN OX TIMPANO Taqueria Canorutas' brings to mind the authentic taquerias of the legendary market- places of Mexico. Developed through years of research, this innovative casual concept offers guests an authentic taste of Mexico with a decidedly New American ambiance. The Taqueria Canonita menu features tacos, tamales, tostados, gorditas and rellenos prepared with savory fire -roasted meats, grilled vegetables and fresh seafood. Taqueria Canonita is located in Las Vegas at The Venetian Resort -Hotel -Casino, a themed mega -resort and entertainment complex. The Taqueria Canonita menu offers small plates and sides that encourage patrons to sample and share a wide variety of items in the tapas tradition. Entres, salads and Mexican - style desserts are also featured. Star Canyon, Dallas, Texas, USA The robust menu offers a wide variety of fla- vorful tacos, tamales, tostadas, gorditas and rellenos made with grilled and roasted meats, vegetables and seafood. Fresh, warm hand- made tortillas, exotic juice cocktails, fresh lime margaritas, Mexican beers, and a wide variety of premium tequilas and mezcals add to the dining experience. . The menu includes Tacos al Carbon; Tacos con Rajas y Queso; Tortilla Soup with Grilled Chicken; Chicken Empanadas; and Pollo en Mole Poblano Tamales. RBIERI(BBBflR Italiannis �A-MO..Ko.oM Timpanos' Italian Chophouse, reminiscent of the classic restaurants and clubs of Chicago and New York in the mid -fifties to early - sixties, revives the big city dining experience. This big city chophouse adds classic Italian flavors to all-American big -bone chargrilled steaks and bone -in chops, complemented with full-bodied red wines. With feature dishes including Bone -In New York Strip, Grilled Swordfish Steak and One -Pound Center -Cut Pork Chops, Executive Chef Peter Heise designed a menu that marries the all-American flavor of chargrilled large -cut steaks and bone -in chops with classic Italian flavors. Chops and steaks may be served AI Balsamico with a balsamic vinegar glaze; Al Forno with a fresh garlic and parmesan crust; or simply chargrilled. In addition to the steak and chop dishes, Heise emphasizes classic Italian dishes like Linguini with Clams in a White Sauce, Veal Scaloppine, Baked Ziti and Scampi -Style Shrimp with Angel Hair Oreganata. Italianni's', introduced in 1992, translates to many languages the traditional Italian - American belief that food is a celebration of life meant to be shared with family and friends. Italianni's features a wide selection of authentic Italian favorites as well as signature dishes. The combination of creative menu items served in large portions and an inviting family atmosphere creates a unique lunch and dinner house experience. The Italianni's menu was built on a wide selection of classic Italian favorites, inspired Italian fare and signature dishes unique to Italianni's. From traditional favorites such as Spaghetti and Meatballs, to more original creations like Salmon Oreganato and Veal Saltimbocca, everything is prepared with the finest and freshest ingredients. All sauces, like our rich and robust marinara sauce, are made fresh every day, in every restaurant. Friaay's American Bar, Boston, Massachusetts, USA Samba Rooms" evokes memories of a 1960s jet -set bistro. This Cuban bar and Latin cafe is distinguished by the creative talents of executive chef Phil Butler, a South Florida native. Butler's Latin fusion cuisine is an updated blend of traditional South American flavors, featuring fresh seafood, spiced rums, grilled meats, exotic fruits and rare spices. The upscale, white -linen style of the Samba Room has been described by one reviewer as "sharp and engaging with a menu that's as accessible as it is imaginative." Keeping a sense of humor about the rhythms driving Samba Room's food and festivity, the reasonably priced menu gives patrons a "tasteful" lesson in Spanish and Portuguese with English translations of the dishes. Selections include Large Plates, Small Plates, Sandwiches and Desserts. 21 roymons- woddW de Procurement soMloo: Provisions Provides Unparalleled Purchasing Power Achieving a total purchasing volume of $800 million per year, Provisions is one of the hospitality industry's largest procurement companies. A niersage from T wdy Rautio Provisions supplies Carlson Hospitality Worldwide brands with everything they need for successful operations. Achieving a total purchasing volume of $800 million per year, Provisions is one of the hospitality industry's largest procurement companies. This purchasing powerhouse provides unparalleled services and volume purchasing leverage for all of Carlson's hotel and restaurant brands, as well as for independent hoteliers and restaurateurs. Provisions negotiates contracts and develops programs worldwide with suppliers for products and services ranging from food and beverages to furniture, fixtures, operating supplies and equipment. It also offers a wide range of restaurant and hotel programs that include food and beverage distribution, project management, rebate administration, freight management, and export management. Timpano ltalimn Chopbome, Rockville, Matylaud, USA Provisions provides purchasing services designed to meet the needs for all segments of hotels, restaurants, and resorts. It also partners with firms specializing in interior design, financing and kitchen design. In the past three years, Provisions has contracted with over 1,000 vendors. A distinctive capability of the company is its global food purchasing and distribution network which is unique in the industry because of its combination of buying power, administrative expertise and attention to quality. Through its 500 food and beverage contracts, which generate $450 million annually, Provisions has access to 350 distributors worldwide. While Provisions has tremendous purchasing strength, the company also prides itself on its ability to respond to the individual needs of each customer. Last year it developed an exclusive customized purchasing program for Interval International, a leading vacation Trudy Rautio, maitive vice piwideut and CFO, Carlson Hospitalit,, Moddiv, Guest Room Solutions by Ra lissou exchange network. The program, Interval Purchasing Services (IPS), provides Interval resort clients exclusive access to a completely customized purchasing program. Provisions also created Guest Room Solutionsby Radisson, a program that offers Radisson properties three different pre -selected decorating styles, with cost pre -determined on a per room basis. "Provisions offers a unique combination of cost-effective solutions, expert advisors, and tailor-made programs that increase clients' buying power while meeting their unique business needs," said Trudy Rautio, executive vice president and chief financial officer, Carlson Hospitality Worldwide. 22 Carlson Lifestyle Living A Lifestyle Experience of Liberated Living for Empty Nesters A message from Paul Wischermann Carlson Lifestyle Living embraces a new concept of lifestyle communities, combining the full -service hospitality of resorts and hotels with upscale residential developments. The country club membership program creates an exclusive setting, fostering camaraderie and recreational opportunities. America's baby boomer population is approaching a new lifesyyle where lifestyles are no longer dictated by school calendars or family schedules. Carlson Park - A Lifestyle Comrnnnity is an ideal answer to hassle -free living, the tasks of housekeeping and home maintenance reduced to a phone call. A flexible all-inclusive food and beverage program offers dining choices throughout the resort with a private dining club with entertainment, restaurants, lounges, and other casual dining opportunities. The health club and spa pampers body and soul. Personalized fitness and wellness programs can be combined with creative spa cuisine delicacies. Beautiful views onto dramatic landscaping with intertwining walkways, golf courses, or lakes are essential lifestyle community ingredients. The interior design carries an overture to the region while displaying understated elegance and a residential feel. The average " condominium and townhouse will vary in size between 1,800 and 2,500 square feet and villas up to 3,000__e square feet in size. P.ml Wischo-Iran. "crr o rice president. (.<nlson Lifestyle Living The Carlson Park Club extends the lifestyle experience beyond the physical border of the community. The residents gain access via an onsite web page to concierge and shopping services, a travel club, and Gold Points Remands, Carlson Companies' loyalty program. CarlsonPar'k— 1 Conaalnii) Carlson Vacation Ownership Carlson Hospitality Enters Vacation Ownership Segment with Innovative Brand Positioning Targets growth in the leisure segment as a key strategy for the new millennium A message from Michael DeNicola Carlson Hospitality Worldwide has hoisted its flags in the vacation owner- ship industry, targeting growth in the leisure segment as a key strategy for the new millennium. Using an innovative brand positioning approach, Carlson Vacation Ownership licenses vacation -ownership properties in leading resort destinations under Carlson Hospitality Worldwide's global lodging brands. Carlson Vacation Ownership resorts will be designed to reflect the core culture of each hotel brand and provide services uniquely suited to targeted consumer profiles. Concepts include Club Regent, Radisson Vacation Villas and Country Vacation Villas By Carlson. "We are the first global hospitality company to offer multi -brand, multi -tier franchising in the vacation ownership industry," said Michael DeNicola, executive vice president, Carlson Radcuon Pahn Beach Show Resort & Vacatimt Villas Pahn Beach Shmer, Florida, USA Vacation Ownership. "Our entry into vacation ownership provides a unique opportunity for independent developers to access the marketing power of our brands and their partners. With 90 percent of all vacation ownership developers currently independent, there is significant interest in partnering with a major hotel brand, backed by a global hospitality company, to gain a competitive edge in the face of rising marketing costs," he added. hlidbael A. DeNicola, excartite trice pizudent. Carlson Venation Ou-nership "Carlson Vacation Ownership provides developers instant and recognizable credibility with consumers and investors, allowing them to pursue profitability, not positioning," DeNicola said. "Carlson Vacation Ownership offers a perfect fit between the needs of developers and the desires of consumers," DeNicola continued, noting that 71 percent of leisure travelers interested in timeshare prefer brand -affiliated properties. Carlson Vacation Ownership offers developers and consumers alike a choice of brands that cover a range of market segments. "As vacation ownership becomes increasingly popular, investors will have brands they can trust and a global hospitality giant to rely on," DeNicola said. 23 r,'r Carlson Hospitality Worldwide® Carlson Hotels Worldwide® Eric Danziger President 612-212-2812 Ii Lc I' \T INTERNATIONAL HOTELS Radisson HOTELS WORLDWIDE' The difference is genuine.'° COUNTRY INN, SUIT" Carlson Vacation Ownership CarlsoWestn Living Curtis C. Nelson President and CEO Carlson Restaurants Worldwide Wallace Doolin President 972-450-5775 AquaKnox T.G.I. Friday's Friday's American Bar Front Row Sports Grill Italianni's Samba Room Star Canyon Taqueria Canonita Timpano Italian Chophouse For Additional Information Contact: Carlson Cruises Worldwide Mark Conroy President 800-477-7500 a RADISSON SEVEN SEAS CRUISES 00 visions," Worldwide Procurement Solutions Trudy Rautio Executive Vice President and CFO 612-212-2524 Carlson Hospitality Worldwide • Carlson Parkway, P.O. Box 59159 • Minneapolis, MN 55459 • 612-212-5000 © 1999 Carlson Companies, Inc. � `: a� , ,..�• � , .. � _ n�c�n�o.Oft .o-r ocnr�u �n e ?" i el _ ++ 1 ^rom c 2(M WIWAM HEZMALIIALCH ARCiiIE ,PC. - ter..-"n._. ," .... ...�-._._,."�_....•....._-.A_ W WILLIAM HEZMALHALCH A R C H I T E C T S I N C. L- .MARINAPARK. Newport Beach, CA The Bendetti Company -4i 2UW WIWAM HUMALHALCH ARCMECT5, INC. - ,MARINAPARK. Newport Beach, CA WILLIAM HEZMALHALCH The Bendetti Company ARCHITECTS INC. �IARI\APARK