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HomeMy WebLinkAboutC-3090(C) - Harbor Island, 829 - PSA for Property Appraisal for 829 Harbor Island DrivePROFESSIONAL SERVICES AGREEMENT tiu WITH CONTINENTAL REALTY ADVISORS FOR PROPERTY APPRAISAL FOR 829 HARBOR ISLAND DRIVE THIS PROFESSIONAL SERVICES AGREEMENT ( "Agreement ") is made and entered into as of this 27th day of June, 2413 ( "Effective Date "), by and between the CITY OF NEWPORT BEACH, a California municipal corporation and charter city ( "City'), and CONTINENTAL REALTY ADVISORS, a California partnership ( "Consultant "), whose address is 6 Venture, Suite 275, Irvine, California 92618, and is made with reference to the following: RECITALS A. City is a municipal corporation duly organized and validly existing under the laws of the State of California with the power to carry on its business as it is now being conducted under the statutes of the State of California and the Charter of City. B. City desires to engage Consultant to conduct a property appraisal for 829 Harbor Island Drive for market value and market value of various leasehold interests, excluding boatslips ( "Project "). C. Consultant possesses the skill, experience, ability, background, certification and knowledge to provide the professional services described in this Agreement. D. City has solicited and received a proposal from Consultant, has reviewed the previous experience and evaluated the expertise of Consultant, and desires to retain Consultant to render professional services under the terms and conditions set forth in this Agreement. NOW, THEREFORE, it is mutually agreed by and between the undersigned parties as follows: 1. TERM The term of this Agreement shall commence on the Effective Date, and shall terminate on May 31, 2014, unless terminated earlier as set forth herein. 2. SERVICES TO BE PERFORMED Consultant shall diligently perform all the services described in the Scope of Services and Schedule of Billing Rates attached hereto as Exhibit A and incorporated herein by reference ( "Services" or "Work "). City may elect to delete certain Services within the Scope of Services at its sole discretion. • •- 3.1 Time is of the essence in the performance of Services under this Agreement and Consultant shall perform the Services in accordance with the schedule included in Exhibit A. In the absence of a specific schedule, the Services shall be performed to completion in a diligent and timely manner. The failure by Consultant to strictly adhere to the schedule set forth in Exhibit A, if any, or perform the Services in a diligent and timely manner may result in termination of this Agreement by City. 12 Notwithstanding the foregoing, Consultant shall not be responsible for delays due to causes beyond Consultant's reasonable control. However, in the case of any such delay in the Services to be provided for the Project, each party hereby agrees to provide notice within two (2) calendar days of the occurrence causing the delay to the other party so that all delays can be addressed. 33 Consultant shall submit all requests for extensions of time for performance in writing to the Project Administrator as defined herein not later than ten (10) calendar days after the start of the condition that purportedly causes a delay. The Project Administrator shall review all such requests and may grant reasonable time extensions for unforeseeable delays that are beyond Consultant's control. 3.4 For all time periods not specifically set forth herein, Consultant shall respond in the most expedient and appropriate manner under the circumstances, by hand - delivery or mail. 4. COMPENSATION TO CONSULTANT 4.1 City shall pay Consultant for the Services on a time and expense not -to- exceed basis in accordance with the provisions of this Section and the Scope of Services and Schedule of Billing Rates attached hereto as Exhibit A. Consultant's compensation for all Work performed in accordance with this Agreement, including all reimbursable items and subconsultant fees, shall not exceed Twenty One Thousand Five Hundred Dollars and No /100 ($21,500.00), without prior written authorization from City. No billing rate changes shall be made during the term of this Agreement without the prior written approval of City. 4.2 Consultant shall submit an invoice to City upon delivery of the draft report, as described in Exhibit A, for Ten Thousand Seven Hundred Fifty Dollars and 00/100 ($10,750.00). Consultant shall submit an invoice for the remaining balance due of Ten Thousand Seven Hundred Fifty Dollars and 00 /100 ($10,750.00) upon delivery of the final report, as described in Exhibit A. Consultant's invoices shall include the name of the person who performed the Work, a brief description of the Services performed and /or the specific task in the Scope of Services to which it relates, the date the Services were performed, the number of hours spent on all Work billed on an hourly basis, and a description of any reimbursable expenditures. City shall pay Consultant no later than thirty (30) calendar days after approval of the invoice by City staff. 4.3 City shall reimburse Consultant only for those costs or expenses specifically identified in Exhibit A to this Agreement or specifically approved in writing in advance by City. Continental Realty Advisors Page 2 4.4 Consultant shall not receive any compensation for Extra Work performed without the prior written authorization of City. As used herein, "Extra Work" means any Work that is determined by City to be necessary for the proper completion of the Project, but which is not included within the Scope of Services and which the parties did not reasonably anticipate would be necessary at the execution of this Agreement. Compensation for any authorized Extra Work shall be paid in accordance with the Scope of Services and Schedule of Billing Rates as set forth in Exhibit A. 5. PROJECT MANAGER 5.1 Consultant shall designate a Project Manager, who shall coordinate all phases of the Project. This Project Manager shall be available to City at all reasonable times during the Agreement term. Consultant has designated Steven C. Kerhart to be its Project Manager. Consultant shall not remove or reassign the Project Manager or any personnel listed in Exhibit A or assign any new or replacement personnel to the Project without the prior written consent of City. City's approval shall not be unreasonably withheld with respect to the removal or assignment of non -key personnel. 5.2 Consultant, at the sole discretion of City, shall remove from the Project any of its personnel assigned to the performance of Services upon written request of City. Consultant warrants that it will continuously furnish the necessary personnel to complete the Project on a timely basis as contemplated by this Agreement. 5.3 If Consultant is performing inspection services for City, the Project Manager and any other assigned staff shall be equipped with a cellular phone to communicate with City staff. The Project Manager's cellular phone number shall be provided to City. This Agreement will be administered by the Community Development Department. City's Real Property Administrator or designee shall be the Project Administrator and shall have the authority to act for City under this Agreement. The Project Administrator shall represent City in all matters pertaining to the Services to be rendered pursuant to this Agreement. 7. CITY'S RESPONSIBILITIES To assist Consultant in the execution of its responsibilities under this Agreement, City agrees to provide access to and upon request of Consultant, one copy of all existing relevant information on file at City. City will provide all such materials in a timely manner so as not to cause delays in Consultant's Work schedule. �_- • 8.1 All of the Services shall be performed by Consultant or under Consultant's supervision. Consultant represents that it possesses the professional and technical personnel required to perform the Services required by this Agreement, and that it will Continental Realty Advisors Page 3 perform all Services in a manner commensurate with the highest professional standards. For purposes of this Agreement, the phrase "highest professional standards" shall mean those standards of practice recognized by one (1) or more first - class firms performing similar work under similar circumstances. 8.2 All Services shall be performed by qualified and experienced personnel who are not employed by City. By delivery of completed Work, Consultant certifies that the Work conforms to the requirements of this Agreement, all applicable federal, state and local laws, and the highest professional standard. 8.3 Consultant represents and warrants to City that it has, shall obtain, and shall keep in full force and effect during the term hereof, at its sole cost and expense, all licenses, permits, qualifications, insurance and approvals of whatsoever nature that is legally required of Consultant to practice its profession. Consultant shall maintain a City of Newport Beach business license during the term of this Agreement. 8.4 Consultant shall not be responsible for delay, nor shall Consultant be responsible for damages or be in default or deemed to be in default by reason of strikes, lockouts, accidents, acts of God, or the failure of City to furnish timely information or to approve or disapprove Consultant's Work promptly, or delay or faulty performance by City, contractors, or governmental agencies. 9. HOLD HARMLESS 9.1 To the fullest extent permitted by law, Consultant shall indemnify, defend and hold harmless City, its City Council, boards and commissions, officers, agents, volunteers and employees (collectively, the "Indemnified Parties ") from and against any and all claims (including, without limitation, claims for bodily injury, death or damage to property), demands, obligations, damages, actions, causes of action, suits, losses, judgments, fines, penalties, liabilities, costs and expenses (including, without limitation, attorneys' fees, disbursements and court costs) of every kind and nature whatsoever (individually, a Claim; collectively, "Claims "), which may arise from or in any manner relate (directly or indirectly) to any breach of the terms and conditions of this Agreement, any Work performed or Services provided under this Agreement including, without limitation, defects in workmanship or materials or Consultant's presence or activities conducted on the Project (including the negligent, reckless, and /or willful acts, errors and /or omissions of Consultant, its principals, officers, agents, employees, vendors, suppliers, consultants, subcontractors, anyone employed directly or indirectly by any of them or for whose acts they may be liable, or any or all of them). 9.2 Notwithstanding the foregoing, nothing herein shall be construed to require Consultant to indemnify the Indemnified Parties from any Claim arising from the sole negligence or willful misconduct of the Indemnified Parties, except insofar as a Claim arises from the use by Consultant, its principals, officers, agents, employees, vendors, suppliers, consultants, subcontractors, anyone employed directly or indirectly by any of them or for whose acts they may be liable, of an automobile(s), for which all claims of indemnity are hereby waived. Nothing in this indemnity shall be construed as Continental Realty Advisors Page 4 authorizing any award of attorney's fees in any action on or to enforce the terms of this Agreement. This indemnity shall apply to all claims and liability regardless of whether any insurance policies are applicable. The policy limits do not act as a limitation upon the amount of indemnification to be provided by Consultant. 10. INDEPENDENT CONTRACTOR It is understood that City retains Consultant on an independent contractor basis and Consultant is not an agent or employee of City. The manner and means of conducting the Work are under the control of Consultant, except to the extent they are limited by statute, rule or regulation and the expressed terms of this Agreement. No civil service status or other right of employment shall accrue to Consultant or its employees. Nothing in this Agreement shall be deemed to constitute approval for Consultant or any of Consultant's employees or agents, to be the agents or employees of City. Consultant shall have the responsibility for and control over the means of performing the Work, provided that Consultant is in compliance with the terms of this Agreement. Anything in this Agreement that may appear to give City the right to direct Consultant as to the details of the performance of the Work or to exercise a measure of control over Consultant shall mean only that Consultant shall follow the desires of City with respect to the results of the Services. 11. COOPERATION Consultant agrees to work closely and cooperate fully with City's designated Project Administrator and any other agencies that may have jurisdiction or interest in the Work to be performed. City agrees to cooperate with the Consultant on the Project. 12, CITY POLICY Consultant shall discuss and review all matters relating to policy and Project direction with City's Project Administrator in advance of all critical decision points in order to ensure the Project proceeds in a manner consistent with City goals and policies. 13. PROGRESS Consultant is responsible for keeping the Project Administrator informed on a regular basis regarding the status and progress of the Project, activities performed and planned, and any meetings that have been scheduled or are desired. 14. INSURANCE Without limiting Consultant's indemnification of City, and prior to commencement of Work, Consultant shall obtain, provide and maintain at its own expense during the term of this Agreement or for other periods as specified in this Agreement, policies of insurance of the type, amounts, terms and conditions described in the Insurance Requirements attached hereto as Exhibit B, and incorporated herein by reference. Continental Realty Advisors Page 5 15. PROHIBITION AGAINST ASSIGNMENTS AND TRANSFERS Except as specifically authorized under this Agreement, the Services to be provided under this Agreement shall not be assigned, transferred contracted or subcontracted out without the prior written approval of City. Any of the following shall be construed as an assignment: The sale, assignment, transfer or other disposition of any of the issued and outstanding capital stock of Consultant, or of the interest of any general partner or joint venturer or syndicate member or cotenant if Consultant is a partnership or joint - venture or syndicate or co- tenancy, which shall result in changing the control of Consultant. Control means fifty percent (50 %) or more of the voting power or twenty -five percent (25 %) or more of the assets of the corporation, partnership or joint- venture. 16. SUBCONTRACTING The subcontractors authorized by City, if any, to perform Work on this Project are identified in Exhibit A. Consultant shall be fully responsible to City for all acts and omissions of any subcontractor. Nothing in this Agreement shall create any contractual relationship between City and any subcontractor nor shall it create any obligation on the part of City to pay or to see to the payment of any monies due to any such subcontractor other than as otherwise required by law. City is an intended beneficiary of any Work performed by the subcontractor for purposes of establishing a duty of care between the subcontractor and City. Except as specifically authorized herein, the Services to be provided under this Agreement shall not be otherwise assigned, transferred, contracted or subcontracted out without the prior written approval of City. 17. OWNERSHIP OF DOCUMENTS 17.1 Each and every report, draft, map, record, plan, document and other writing produced (hereinafter "Documents "), prepared or caused to be prepared by Consultant, its officers, employees, agents and subcontractors, in the course of implementing this Agreement, shall become the exclusive property of City, and City shall have the sole right to use such materials in its discretion without further compensation to Consultant or any other party. Consultant shall, at Consultant's expense, provide such Documents to City upon prior written request. 17.2 Documents, including drawings and specifications, prepared by Consultant pursuant to this Agreement are not intended or represented to be suitable for reuse by City or others on any other project. Any use of completed Documents for other projects and any use of incomplete Documents without specific written authorization from Consultant will be at City's sole risk and without liability to Consultant. Further, any and all liability arising out of changes made to Consultant's deliverables under this Agreement by City or persons other than Consultant is waived against Consultant, and City assumes full responsibility for such changes unless City has given Consultant prior notice and has received from Consultant written consent for such changes. Continental Realty Advisors Page 6 17.3 All written documents shall be transmitted to City in formats compatible with Microsoft Office and /or viewable with Adobe Acrobat. iE�tZ�P► l �iT�► i �T�>�� I All Documents, including drafts, preliminary drawings or plans, notes and communications that result from the Services in this Agreement, shall be kept confidential unless City expressly authorizes in writing the release of information. 19. INTELLECTUAL PROPERTY INDEMNITY Consultant shall defend and indemnify City, its agents, officers, representatives and employees against any and all liability, including costs, for infringement or alleged infringement of any United States' letters patent, trademark, or copyright, including costs, contained in Consultant's Documents provided under this Agreement. 20. RECORDS Consultant shall keep records and invoices in connection with the Services to be performed under this Agreement. Consultant shall maintain complete and accurate records with respect to the costs incurred under this Agreement and any Services, expenditures and disbursements charged to City, for a minimum period of three (3) years, or for any longer period required by law, from the date of final payment to Consultant under this Agreement. All such records and invoices shall be clearly identifiable. Consultant shall allow a representative of City to examine, audit and make transcripts or copies of such records and invoices during regular business hours. Consultant shall allow inspection of all Work, data, Documents, proceedings and activities related to the Agreement for a period of three (3) years from the date of final payment to Consultant under this Agreement. 21. WITHHOLDINGS City may withhold payment to Consultant of any disputed sums until satisfaction of the dispute with respect to such payment. Such withholding shall not be deemed to constitute a failure to pay according to the terms of this Agreement. Consultant shall not discontinue Work as a result of such withholding. Consultant shall have an immediate right to appeal to the City Manager or designee with respect to such disputed sums. Consultant shall be entitled to receive interest on any withheld sums at the rate of return that City earned on its investments during the time period, from the date of withholding of any amounts found to have been improperly withheld. 22. ERRORS AND OMISSIONS In the event of errors or omissions that are due to the negligence or professional inexperience of Consultant which result in expense to City greater than what would have resulted if there were not errors or omissions in the Work accomplished by Consultant, the additional design, construction and /or restoration expense shall be Continental Realty Advisors Page 7 borne by Consultant. Nothing in this Section is intended to limit City's rights under the law or any other sections of this Agreement. 23. CITY'S RIGHT TO EMPLOY OTHER CONSULTANTS City reserves the right to employ other Consultants in connection with the Project. 24. CONFLICTS OF INTEREST 24.1 Consultant or its employees may be subject to the provisions of the California Political Reform Act of 1974 (the "Act "), which (1) requires such persons to disclose any financial interest that may foreseeably be materially affected by the Work performed under this Agreement, and (2) prohibits such persons from making, or participating in making, decisions that will foreseeably financially affect such interest. 242 If subject to the Act, Consultant shall conform to all requirements of the Act. Failure to do so constitutes a material breach and is grounds for immediate termination of this Agreement by City. Consultant shall indemnify and hold harmless City for any and all claims for damages resulting from Consultant's violation of this Section. 25, NOTICES 25.1 All notices, demands, requests or approvals, including any change in mailing address, to be given under the terms of this Agreement shall be given in writing, and conclusively shall be deemed served when delivered personally, or on the third business day after the deposit thereof in the United States mail, postage prepaid, first - class mail, addressed as hereinafter provided. 25.2 All notices, demands, requests or approvals from Consultant to City shall be addressed to City at: Attn: Lauren Wooding, Real Property Administrator Community Development Department City of Newport Beach 100 Civic Center Drive PO Box 1768 Newport Beach, CA 92658 25.3 All notices, demands, requests or approvals from City to Consultant shall be addressed to Consultant at: Attn: Steven C. Kerhart Continental Realty Advisors 6 Venture, Suite 275 Irvine, CA 92618 Continental Realty Advisors Page 8 Unless a shorter time is specified elsewhere in this Agreement, before making its final request for payment under this Agreement, Consultant shall submit to City, in writing, all claims for compensation under or arising out of this Agreement. Consultant's acceptance of the final payment shall constitute a waiver of all claims for compensation under or arising out of this Agreement except those previously made in writing and identified by Consultant in writing as unsettled at the time of its final request for payment. Consultant and City expressly agree that in addition to any claims filing requirements set forth in the Agreement, Consultant shall be required to file any claim Consultant may have against City in strict conformance with the Government Claims Act (Government Code sections 900 et seq.). 27, TERMINATION 27.1 In the event that either party fails or refuses to perform any of the provisions of this Agreement at the time and in the manner required, that party shall be deemed in default in the performance of this Agreement. If such default is not cured within a period of two (2) calendar days, or if more than two (2) calendar days are reasonably required to cure the default and the defaulting party fails to give adequate assurance of due performance within two (2) calendar days after receipt of written notice of default, specifying the nature of such default and the steps necessary to cure such default, and thereafter diligently take steps to cure the default, the non - defaulting party may terminate the Agreement forthwith by giving to the defaulting party written notice thereof. 27.2 Notwithstanding the above provisions, City shall have the right, at its sole and absolute discretion and without cause, of terminating this Agreement at any time by giving no less than seven (7) calendar days' prior written notice to Consultant. In the event of termination under this Section, City shall pay Consultant for Services satisfactorily performed and costs incurred up to the effective date of termination for which Consultant has not been previously paid. On the effective date of termination, Consultant shall deliver to City all reports, Documents and other information developed or accumulated in the performance of this Agreement, whether in draft or final form. 28. STANDARD PROVISIONS 28.1 Recitals. City and Consultant acknowledge that the above Recitals are true and correct and are hereby incorporated by reference into this Agreement. 28.2 Compliance with all Laws. Consultant shall, at its own cost and expense, comply with all statutes, ordinances, regulations and requirements of all governmental entities, including federal, state, county or municipal, whether now in force or hereinafter enacted. in addition, all Work prepared by Consultant shall conform to applicable City, county, state and federal laws, rules, regulations and permit requirements and be subject to approval of the Project Administrator and City. Continental Realty Advisors Page 9 28.3 Waiver. A waiver by either party of any breach, of any term, covenant or condition contained herein shall not be deemed to be a waiver of any subsequent breach of the same or any other term, covenant or condition contained herein, whether of the same or a different character. 28.4 Integrated Contract. This Agreement represents the full and complete understanding of every kind or nature whatsoever between the parties hereto, and all preliminary negotiations and agreements of whatsoever kind or nature are merged herein. No verbal agreement or implied covenant shall be held to vary the provisions herein. 28.5 Conflicts or Inconsistencies. In the event there are any conflicts or inconsistencies between this Agreement and the Scope of Services or any other attachments attached hereto, the terms of this Agreement shall govern. 28.6 Interpretation. The terms of this Agreement shall be construed in accordance with the meaning of the language used and shall not be construed for or against either party by reason of the authorship of the Agreement or any other rule of construction which might otherwise apply. 28.7 Amendments. This Agreement may be modified or amended only by a written document executed by both Consultant and City and approved as to form by the City Attorney. 28.8 Severability. If any term or portion of this Agreement is held to be invalid, illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining provisions of this Agreement shall continue in full force and effect. 28.9 Controlling Law and Venue. The laws of the State of California shall govern this Agreement and all matters relating to it and any action brought relating to this Agreement shall be adjudicated in a court of competent jurisdiction in the County of Orange, State of California. 28.10 Equal Opportunity Employment. Consultant represents that it is an equal opportunity employer and it shall not discriminate against any subcontractor, employee or applicant for employment because of race, religion, color, national origin, handicap, ancestry, sex, age or any other impermissible basis under law. 28.11 No Attorneys' Fees. In the event of any dispute or legal action arising under this Agreement, the prevailing party shall not be entitled to attorneys' fees. 28.12 Counterparts. This Agreement may be executed in two (2) or more counterparts, each of which shall be deemed an original and all of which together shall constitute one (1) and the same instrument. [SIGNATURES ON NEXT PAGE] Continental Realty Advisors Page 10 IN WITNESS WHEREOF, the parties have caused this Agreement to be executed on the dates written below. APPROVED AS TO FORM: CITY Date: ATT�'7/I Z) OFFICE By. 1 Aaron C. Harp City Attorney ATTEST: Date: • f • 13 d i, Leilani 1. BrownCity Clerk Attachments CITY OF NEWPORT BEACH, a California municipal corporation Date: 69 By: Kimb rly �Brandt,AICP Community Development Director CONSULTANT: C Advisors, a lifor7 Date: // By: DE Steven C. Kerhart, CCIM, MRICS Managing Partner ntal Realty rsh i p% CPA, ASA, MAI, [END OF SIGNATURES] Exhibit A — Scope of Services and Schedule of Billing Rates Exhibit B — Insurance Requirements Continental Realty Advisors Page 11 EXHIBIT A SCOPE OF SERVICES /SCHEDULE OF BILLING RATES Continental Realty Advisors Page A -1 CONTINENTAL REALTY ADVISORS -VSG California / Nevada / Arizona / Washington www.cravaluation.com CORPORATE OFFICE: 6 Venture, Suite 275, Irvine, CA 92618 - Phone 949.221.09671 Fax 221.0973 Email SK @gravaluation.com / Office Team Email: craof iceteam()cravaluation.com June 19, 2013 Ms. Lauren Wooding lReai Property Administrator City of Newport Beach I Community Development Department I Building Division 3300 Newport Boulevard INewport Beach, CA 92663 T: (949) 644 -3236 1 lwooding@newportbeachca.gov www.newportbeachca.gov Re: 829 Harbor Island Drive, Newport Beach (Balboa Yacht Basin) -APN 050- 210 -02. Need appraisal for property's market value and market value of various leasehold interests currently on the property (for multiple respective uses including - restaurant, commercial boatyard, commercial yacht sales, apartments, storagegarages, `excluding' the boat slips.) Dear Ms. Wooding, At your request I am pleased to propose a fee of $21,500 for a summary complete narrative appraisal of the above referenced property. I anticipate a delivery date of about 4.5 weeks from receipt of an executed copy of this agreement. We will invoice you 50% upon completion of the PDF draft report. After review, and changes (if required), the hard copy 'final' will be issued. The remaining fee is due within 30 days of report delivery. Pursuant to our conversation of April 29th, we are excluding the boat slips from the engagement. As well- included in the fee are two (2) hours of review and response time (by product use) to stakeholders that will be reviewing the deliverable. As agreed, you will forward the report to all parties for comments and return with a single master comments / question list. These items (if any) will be addressed one time and a revised draft report will be delivered for final consideration. Any time above and beyond that will be billed at my standard hourly rate of $275 /hour. I will be as flexible as possible and work with your team recognizing that questions might arise 60 -90 days beyond issuance of the deliverable. I will not deliver a completed and final report (subject to public domain consideration) until receipt of written authorization. The appraisal will present discussions of the data, reasoning, and analysis used in the valuation process to develop the respective market values (by economic component) cited above. The valuation will be as of the date of inspection — unless otherwise directed. Page Two The report will be prepared in accordance with the Uniform Standards of Professional Appraisal Practice, and the supplemental Standards of Professional Appraisal Practice (SPP) of the Appraisal Institute. I would appreciate transmittal of as much of the following (if available) as possible so as not to delay the report. Digital copies (PDF or Word for documents and Excel for spreadsheets) are preferred. Any delay in receiving this information WILL delay report delivery to you: 9. A copy of the prior appraisals, a title report, deed or legal description; 2. Current and Historic (budgeted) Operating information; 3. Property Tax Bills, ALTA Survey, Building plans, marketing brochures; 4. Name and telephone number of contact person to arrange an inspection of the property; 5. Lease (ALL — including ground leases and P party tenant leases) or rental agreements; B. Surveys (geo, environmental, biologic, other?); 7. Any other information (offers, listings etc.) that you think may be helpful or appropriate to the assignment — certainly anything that might affect a 3rd party opinion of value (favorably or negatively); I will provide you with two (2) original copies of the report. Additional reports will be billed at $75 each (black and white) and $350 each for full color copy masters. It is understood that the quotation for delivery of my services is based on the order in which assignments are contracted, on a first -come- first -served basis. I am prepared to complete this assignment within the outlined time period, provided that this contract is returned within 48 hours this agreement. If this is not possible, please contact me to discuss this aspect. After the deadline, the delivery date of the report shall be based on priority of assignments received and will be subject to negotiation. The report will be subject to our standard Assumptions and Limiting Conditions and Certification and will be part of the work file and report (attached at end of proposal). Please understand that the terms, provisions, and conditions contained within the body of this letter, together with your additional instructions will constitute our agreement regarding the assignment of the described property. Page Three If satisfactory, please endorse and return a copy (to both skacravaluation.com and craofficeteamacravaluation.com) of this letter confirming this arrangement at your earliest convenience. Thank you very much for this opportunity, and I look forward to Working with you in the near future. Sincerely, Continental Realty Advisors -VSG f_ Steven C. Kerhart CPA, ASA, MAI, CCIM, MRICS Managing Partner Agreed and accepted this day of 2013 0 FOR IMMEDIATE ASSISTANCE - CONTACT JOCHEBED OR JUDD Mr. Judd Barber — VP, Director of Operations 949.221.0974 / Ibarber(dcravaluation.com Ms. Jochebed Ho — VP, Office Manager 949.221.0972 /'hoCa)cravaluation.com Mr. Walter Mophett — AVP, Associate 949.221.0975 / wmophett(a)cravaluation.com REGIONAL OFFICES Las Vegas: 410 S. Rampart, Suite 390 Las Vegas, NV 89145 T: (702) 726 -6786 F: (702) 726 -6701 Phoenix: 2575 E. Comeback Rd., Suite 450 Phoenix, AZ 85016 T: (602) 343 -7431 F: (602) 343 -2301 San Diego: 4445 Eastgate Mall, Suite 2000 San Diego, CA 92121 T: (858) 812 -3090 F: (858) 812 -2001 San Francisco: 1 Embarcadero Ctr, #500 San Francisco, CA 94111 T: (415) 315 -1558 F: (415) 433 -5994 Seattle: 2211 Elliott Ave, Suite 200 Seattle, WA 98121 T: (206) 455 -2880 F: (206) 455 -2701 CURRICULUM VITAE Steven Charles (Steve) Kerhart CPA, ASA, MAI, CCIM, MRICS Mr. Kerhart is Managing Partner of Continental Realty Advisors (CRA), a full service consulting valuation firm. Mr. Kerhart is one of less than 100 individuals in the United States that has held (CPA) and presently maintains the ASA, MAI, MRICS, and CCIM designations. Mr. Kerhart was recently 'invited' to become a candidate for the CRE — the 'premiere' real estate designation recognized worldwide. Mr. Kerhart is also working on achieving his MCR designation — another coveted achievement held by fewer than 1,800 individuals worldwide. Mr. Kerhart was formerly the Real Estate Chair for the California Society of CPA's (1996/1997), on the Real Estate Advisory Board for California State University at Fullerton (97/98), and on Wachovia's National. Valuation Advisory Panel. between 1999 and 2002. Mr. Kerhart is also a real estate investor— focusing on niche opportunities in Southern California. Prior to forming CRA he was President of CKQ Inc. (1991 -1995) and a Senior Analyst in The Real Estate Services Group with a Big 8 Accounting Firm (1986- 1990). Mr. Kerhart has prepared and supervised consulting assignments involving most major categories of real estate, going concern, machinery and equipment, and personal property. Mr. Kerhart has appraised and reviewed over $40+ Billion of real property and other assets since 1986. The firm typically completes 500+ appraisals, evaluations, and market studies per year throughout California, Nevada, and Arizona. Most involve valuations and /or consulting for financing, workouts, sale and purchase, litigation support and investment analyses. Business Philosophy: Client focused and centered service - acting as ambassadors for our clients while providing impartial 'timely, professional., credible' valuations. The firm's key clients include bankers, insurance companies, attorneys, CPA's, property owners, managers, and developers of real and personal properties and operating concerns. Areas of Appraisal / Valuation specialization include: - Automotive Dealership / Automate / Full and Limited Service Carwashes - Apartments / Subdivisions / Master - planned Communities / Facilities Districts (STD's) - Hotels / Marinas / Resorts / Theaters - Commercial Retail, Office, Medical Office — Industrial, Industrial Parks, -Land, all types (residential, commercial, industrial, rural) - Litigation Support / Expert Witness 1 Testimony -Tax and Estate Planning Valuations / Fractional / Marketability and Minority Interests - Market Studies / Feasibility Analysis / Highest and Best Use Studies Professional Designations (Current / Past) / State Licensing — Market Coverage: CCIM Certified Commercial Investment Member - Current MAI Member of the Appraisal Institute- Current CPA Certified Public Accountant, State of California (1996 -2006) ASA Accredited Senior Member Urban Real Property- Current MRICS Accredited Member Royal Institute of Chartered Surveyors- Current SCREA Certified General Appraiser — California SCREA Certified General Appraiser — Arizona SCREA Certified General Appraiser — Nevada SCREA Certified General Appraiser — Washington Professional Organizations: - Candidate Masters of Corporate Real Estate (MCR), CoreNet Global - Member, National and California Association of Realtors - Candidate for Senior Member /Business Valuation, ASA - Candidate for CAE designation from the IAAO - Member of the Institute of Property Taxation (IPT) - Member Urban Land Institute (ULI) - Member of the Society of Auditors and Appraisers (SAA) - Member, American Institute of Certified Public Accountants (AICPA) - Member, California Society of Certified Public Accountants (CSCPA) Education i Continuing Education: - Bachelors of Science: Accounting and Economics, Loyola Marymount University, 1982 -1986, Los Angeles, CA - Massachusetts Institute of Technology (MIT) - Center for Real Estate, Exec. Dev. Program, 2006 -2009, Cambridge, MA- Typically 150 -200 hours per year on CE classes, conferences, seminars. Personal: Very happily married to my first love, three wonderful children, enjoy auto racing, skiing, and tennis, 2nd degree black belt, avid reader of technology, futurist, spirituality, business and real estate related books and periodicals. STANDARD ASSUMPTIONS AND LIMITING CONDITIONS Extraordinary Assumptions Yes, see transmittal letter. Limiting Conditions and Assumptions In compliance with Uniform Standards of Professional Appraisal Practice, and to assist the reader in interpreting this report, the analyses and opinions set forth in this appraisal are subject to the following assumptions and limiting conditions. The conclusions and opinions expressed in this report apply to the date of value set forth in the letter of transmittal accompanying this report. The dollar amount of any value opinion or conclusion rendered or expressed in this report is based upon the purchasing power of the American dollar existing on the date of value. The appraiser 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 appraiser is not obligated to predict future political, economic or social trends. In preparing this report, the appraiser 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 expressed or implied, is given by the appraiser for the accuracy of such information and the appraiser assumes no responsibility for information relied upon later found to have been inaccurate. The appraiser 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. No opinion as to the title of the subject property is rendered. Data related to ownership and legal description were obtained from a recent title report and/or public records. However, title is assumed marketable, free, and clear of all liens, encumbrances, easements and restrictions except those specifically discussed in the report. The property is appraised assuming it to be under responsible ownership and competent management, and available for its highest and best use. The appraiser assumes no responsibility for hidden or unapparent conditions of the property, subsoil, groundwater 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. Unless otherwise stated in the report, the appraiser died not become aware of the presence of any such toxic or hazardous material or substance during the appraiser's inspection of the subject property. However, the appraiser 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 appraiser 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 complies with all federal, state and local environmental laws, regulations and rules. Unless otherwise stated, the subject is appraised assuming it to be in full compliance with all applicable zoning and land use regulations and restrictions. Unless otherwise stated, the property is appraised assuming that 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 upon which the value estimate contained in this report is based. Except as specifically stated, data relative to size and area was taken from sources considered reliable, and no encroachment of real property improvements is considered to exist. No opinion its expressed as to the value of sub - surface 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 included in this report are for illustration only to serve as an aid in visualizing matters discussed within this 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 this report. No opinion is expressed on matters, which require legal expertise or specialized investigation, or knowledge beyond that customarily employed by real estate appraisers. The distribution, if any, of the total valuation in this report between land and improvements applies only under the stated program of utilization. The separate allocations for land and buildings must not be used in conjunction with any other appraisal and are invalid if so used. The possession of this report, or copy thereof, does not carry with it the right of publication. Without the written consent of the appraiser, 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 the written qualification and only in its entirety for its stated purpose. Any dispute of claim made with respect to this report shall be submitted to and resolved in accordance with the rules of the American Arbitration Association for arbitration, and the decision of the Association shall be binding. All appraisal services, pursuant to this report, shall be deemed contracted for and rendered in Orange County, California, and any arbitration or judicial proceedings shall take place in Orange County, California. Any value estimates provided in the report apply to the entire property, and any proration or division of the total into fractional interests will invalidate the value estimate, unless such proration or division of interests has been set forth in the report. This report may contain prospective financial information, estimates, or opinions that represent the appraiser's view of expectations at a particular point in time, but such information, estimates, or opinions are not offered as predictions or as assurances that a particular level of income or profit will be achieved, that events will occur, or that a particular price will be offered or accepted. This appraisal is based on market conditions existing as of the date of the appraisal. Steven Kerhart is a designated member (MAI) of the Appraisal Institute. The Bylaws and Regulations of the Institute require each member or candidate to control the use and distribution of each report signed by such member or candidate. Therefore, except as hereinafter provided, the party for whom this report was prepared may distribute copies of this report, in its entirety, to such third parties as may be selected by the party for whom this report was prepared; however, selected portions of this report shall not be given to third parties without the prior written consent of the signatory of this report. We shall not be required, because of this report, to give testimony or to attend in court or any governmental or other hearing with reference to the property without prior arrangements having first been made with us relative to such additional employment. Under the terms of the engagement, we will have no obligation to revise this report to reflect events or conditions, which occur subsequent to the date of the transmittal. However, we will be available to discuss the necessity for revision resulting from changes in economic or market factors affecting the subject. The Americans with Disabilities Act (ADA) became effective January 26, 1992. We have not made a specific compliance survey and analysis of the property to determine whether it is in conformity with the various detailed requirements of the ADA, it is possible that a compliance survey of the property together with a detailed analysis of the requirements of the ADA could reveal that the property does not comply with one or more of the requirements of the Act. If so, this could have a negative effect on the property's market value. Since we have no direct evidence relating to this issue, we did not consider possible non - compliance with the requirements of the ADA in our market value estimates. In accordance with the Fair Housing Amendments Act, it is illegal for an appraiser to discriminate against any person because of race, color, religion, sex, hardship, familial status, or national origin. This appraisal complies with all rules and regulations prohibiting discrimination based on race, color, religion, sex, national origin, and marital status. WINUIM INSURANCE REQUIREMENTS — PROFESSIONAL SERVICES 1. Provision of Insurance. Without limiting Consultant's indemnification of City, and prior to commencement of Work, Consultant shall obtain, provide and maintain at its own expense during the term of this Agreement, policies of insurance of the type and amounts described below and in a form satisfactory to City. Consultant agrees to provide insurance in accordance with requirements set forth here. If Consultant uses existing coverage to comply and that coverage does not meet these requirements, Consultant agrees to amend, supplement or endorse the existing coverage. 2. Acceptable Insurers. All insurance policies shall be issued by an insurance company currently authorized by the Insurance Commissioner to transact business of insurance in the State of California, with an assigned policyholders' Rating of A- (or higher) and Financial Size Category Class VII (or larger) in accordance with the latest edition of Best's Key Rating Guide, unless otherwise approved by the City's Risk Manager. 3. Coverage Requirements. A. Workers' Compensation Insurance. Consultant shall maintain Workers' Compensation Insurance, statutory limits, and Employer's Liability Insurance with limits of at least one million dollars ($1,000,000) each accident for bodily injury by accident and each employee for bodily injury by disease in accordance with the laws of the State of California, Section 3700 of the Labor Code. Consultant shall submit to City, along with the certificate of insurance, a Waiver of Subrogation endorsement in favor of City, its officers, agents, employees and volunteers. B. General Liability Insurance. Consultant shall maintain commercial general liability insurance, and if necessary umbrella liability insurance, with coverage at least as broad as provided by Insurance Services Office form CG 00 01, in an amount not less than one million dollars ($1,000,000) per occurrence, one million dollars ($1,000,000) general aggregate. The policy shall cover liability arising from premises, operations, personal and advertising injury, and liability assumed under an insured contract (including the tort liability of another assumed in a business contract) with no endorsement or modification limiting the scope of coverage for liability assumed under a contract. 4. Insurance Requirements. The policies are to contain, or be endorsed to contain, the following provisions: A. Waiver of Subrogation. All insurance coverage maintained or procured pursuant to this Agreement shall be endorsed to waive subrogation Continental Realty Advisors Page B -1 against City, its elected or appointed officers, agents, officials, employees and volunteers or shall specifically allow Consultant or others providing insurance evidence in compliance with these requirements to waive their right of recovery prior to a loss. Consultant hereby waives its own right of recovery against City, and shall require similar written express waivers from each of its subconsultants. B. Additional Insured Status. All liability policies including general liability, excess liability, pollution liability, and automobile liability, if required, but not including professional liability, shall provide or be endorsed to provide that City and its officers, officials, employees, and agents shall be included as insureds under such policies. C. Primary and Non Contributory. All liability coverage shall apply on a primary basis and shall not require contribution from any insurance or self - insurance maintained by City. D. Notice of Cancellation. All policies shall provide City with thirty (30) calendar days notice of cancellation (except for nonpayment for which ten (10) calendar days notice is required) or nonrenewal of coverage for each required coverage. 5. Additional Agreements Between the Parties. The parties hereby agree to the following: A. Evidence of Insurance. Consultant shall provide certificates of insurance to City as evidence of the insurance coverage required herein, along with a waiver of subrogation endorsement for workers' compensation and other endorsements as specified herein for each coverage. Insurance certificates and endorsement must be approved by City's Risk Manager prior to commencement of performance. Current certification of insurance shall be kept on file with City at all times during the term of this Agreement. City reserves the right to require complete, certified copies of all required insurance policies, at any time. B. City's Right to Revise Requirements. City reserves the right at any time during the term of the Agreement to change the amounts and types of insurance required by giving Consultant sixty (60) calendar days advance written notice of such change. If such change results in substantial additional cost to Consultant, City and Consultant may renegotiate Consultant's compensation. C. Enforcement of Agreement Provisions. Consultant acknowledges and agrees that any actual or alleged failure on the part of City to inform Consultant of non - compliance with any requirement imposes no additional obligations on City nor does it waive any rights hereunder. D. Requirements not Limiting. Requirements of specific coverage features or limits contained in this Section are not intended as a limitation on Continental Realty Advisors Page B -2 coverage, limits or other requirements, or a waiver of any coverage normally provided by any insurance. Specific reference to a given coverage feature is for purposes of clarification only as it pertains to a given issue and is not intended by any party or insured to be all inclusive, or to the exclusion of other coverage, or a waiver of any type. E. Self- insured Retentions. Any self- insured retentions must be declared to and approved by City. City reserves the right to require that self- insured retentions be eliminated, lowered, or replaced by a deductible. Self - insurance will not be considered to comply with these requirements unless approved by City. F. City Remedies for Non - Compliance. If Consultant or any subconsultant fails to provide and maintain insurance as required herein, then City shall have the right but not the obligation, to purchase such insurance, to terminate this Agreement, or to suspend Consultant's right to proceed until proper evidence of insurance is provided. Any amounts paid by City shall, at City's sole option, be deducted from amounts payable to Consultant or reimbursed by Consultant upon demand. G. Timely Notice of Claims. Contractor shall give City prompt and timely notice of claims made or suits instituted that arise out of or result from Contractor's performance under this Contract, and that involve or may involve coverage under any of the required liability policies. City assumes no obligation or liability by such notice, but has the right (but not the duty) to monitor the handling of any such claim or claims if they are likely to involve City. H. Consultant's Insurance. Consultant shall also procure and maintain, at its own cost and expense, any additional kinds of insurance, which in its own judgment may be necessary for its proper protection and prosecution of the Work. I. Automobile Liability Insurance. Consultant shall cause each of its principals, officers, agents, employees, vendors, suppliers, consultants, subcontractors, anyone employed directly or indirectly by any of them or for whose acts they may be liable, or any or all of them, to maintain automobile insurance covering bodily injury and property damage for all activities of Consultant arising out of or in connection with Work to be performed under this Agreement, including coverage for any owned, hired, non - owned or rented vehicles, in an amount not less than the minimum required under California law. Continental Realty Advisors Page B -3