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HomeMy WebLinkAboutMarina Park Mobile Home Park�t� f.71' � � � F�f a • AYRES HOTEL GROUP A Y R E S SINCE 1905 Marina Park Proposed 0 Hotel/Residential Development by the Ayres Group . C .br��cMrn�r n V ouMlfervt ,bn /ozvriry lt'i'��i mr�' COUNTRY INNS &.SUITES BY A)-RES Alpine Cardiff by the Sea. Corona Carona West Costa Mesa Diamond Bar Grapevine Ontario Airport Ontario at the Mills Mall Orange San Clemente Yorbo linda 355 Bristol Street Suite F Costa Mesa California 92626 Office. 714. 549. 0300 Facsimile: 714. 850. 0302 v countrysuites.com Ayres Hotel Group http://www.countrysultes.com/ahgroup.httnl ■ ■ Bom of the needs and wishes of actual leisure and business Z *H1 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 A e management style has made the Ayres Hotel Group and its AYRES mac. 1901 signature Country Inn & Suites hotels synonymous with m6l 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 inns, 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 111 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 Map Home Page Hotel Locations • 1 of 2 2/4/2000 3:31 PM 0 1. QUALIFICATIONS Company Name: Ayres Group Company Address: Current Officers: Total Employees Relevant Experience Project Name: Project Description: Location: Construction dates: Project Name: Project Description: Location: Construction Dates: Project Name: Project Description: Location: Construction Dates: 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 .oz 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 Country Suites at the Mills Mall 139 room hotel 4370 Mills Circle, Ontario, CA 91764 Start: 8/97 Complete: 7/98 Country Suites by Ayres — Diamond Bar 102 room hotel 21951 Golden Springs Drive, Diamond Bar, CA 91765 Start: 2/98 Complete: 2/99 Country Inn — Orange Remodel of 131 room hotel 3737 W. Chapman Avenue, Orange, CA 92868 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 -,v/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 0 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 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, Cardin, 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 0 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 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: Gregg Kleminsky Address: 355 Bristol Street, Suite F Costa Mesa, CA 92626 Telephone: (714)429 -9372 ext. 100 Job Title: Controller Job Desc: Oversees daily financial operations of hotels Years w /Co.: 13 Name: Douglas 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. Oversees operations jointly with VP of Operations on specific issues, upgrades, or changes. Years w /Co.: 10 Name: Jim Boitnott Address: 4370 Mills Circle Costa Mesa, CA 92626 Telephone: (909)481 -7703 Job Title: Regional Manager Job Desc.: Supervise General Managers and daily operations of area hotels. Years w /Co.: 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. • Purchase: Bay Front Lots (14) at Balboa Blvd Lots (35) at Lease: Bay Front Lots Balboa Blvd Lots Housine Proforma $625,000 x 14 $ 8,750,000 200,000 x 35 = 7,000,000 Total $15,750,000 at $43,740 /year x 14 at 14,000 /year x 35 Total *A more detailed proforma can be provided upon request $ 612,360 /year 490.000 /year $ 1,102,360 /year • • DEPARTMENTAL PROFIT $ 5.836.986 89.0% $ 192.67 $ 196.60 UNDISTRIBUTED OPERATING EXPENSES Administrative & General $ 207.824 3.2% $ 6.86 $ 7.00 Marketing 166.259 2.5% $ 5.49 5.60 Property Operation &.Maintenance 160.321 .2.4% Newport Beach - Balboa Island 5.40 Utility Costs 93.521 1.4% $ 3.09 3.15 Total 627.924 9.6% $ 20.73 $ 21.15 Income Summary Projections Year 10 Year 2 Year 3 Room Count 83 83 22.721 83 24.539 Rooms Occupied 29.689 30.295 30.295 Rooms Available 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 $ 186.48 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 DEPARTMENTALEXPENSES $ 705.116 10.8% $ 23.28 $ 23.75 $ 539.630 13.2% $ 17.81 $ 23.75 $ 582.800 12.0% $ 19.24 $ 23.75 Rooms 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 UNDISTRIBUTED OPERATING EXPENSES Administrative & General $ 207.824 3.2% $ 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% $ 20.73 $ 21.15 GROSS OPERATING PROFIT FIXED EXPENSES Management Fees Property Taxes Insurance Land Lease Total NET OPERATING INCOME $ 3.561.745 86.4% $ 117.57 $ 155.76 $ 159.049 3.9% $ 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 $ 5.209.061 79.4% $ 171.94 $ 175.45 $3.081.191 74.7% $ 101.71 $ 135.61 $ 196.848 3.0% $ 6.50 $ 6.63 60.000 0.9% 1.98 2.02 11.000 0.2°,'a. 0.36 0.37 328.080 5.0% 10.83 11.05 $ 595.928 9.1% $ 19.67 $ 20.07 $ 123.685 9.0% $ 4.08 $ 5.44 60.000 1.5%. 1.98 2.64 11.000 0.3% 0.36 0.48 206.141 5.02L 6.80 9.07 $ 400.826 9.7% $ 1323 $ 17.64 $ 4.613.133 70.3% $ 152.27 $ 155.38 $ 2.680.365 65.0% $ 88.48 $ 117.97 Occupancy Tax Projection $ 653,160 $ 408.983 Land Lease 328,080 206.141 S 981.240 $ 615,124 Page 1 $3,969.611 86.7% $ 131.03 $ 161.77 S 171.773 3.89% $ 5.67 $ 7.00 137.418 3.0% $ 4.54 5.60 132.510 2.9% $ 4.37 5.40 77.298 1.7% $ 2.55. 3.15 518.999 11.3% $ 17.13 $ 21.15 $ 3.450.612 75.4% $ 11190 $ 140.62 $ 137.280 3.0% $ 4.53 $ 5.59 60.000 1.3% 1.98 2.45 11.000 0.2% 0.36 OA5 228.800 5.0% 7,55 9.32 E 437.080 9.6% $ 14.43 $ 17.81 $ 3.013.531 65.9% $ 99.47 $ 122.81 S 453,971 228.800 $ 682,771 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 4 Year 5 Year 6 $ 4.293.894 87.1% $ 141.74 $ 166.75 UNDISTRIBUTED OPERATING EXPENSES $ 4.394.753 87.1% $ 145.07 $ 166.74 Administrative & General 83 180.255 3.7% $ 83 $ 7.00 $ 184.497 83 $ 6.09 $ 7.00 25.751 1925 144.204 2.9% 26.357 4.76 5.60 27,568 2.9% $ 4.87 30.295 Property Operation & Maintenance 139.054 30,295 $ 4.59 5.40 30.295 142.326 2.8% $ 85% 5.40 Utility Costs 87% 1.6% $ 2.68 91% 83.023 1.6% 190.00 $ 2.74 3.15 190.00 544.628 11.0% 195AD 17.98 $ 21.15 161.50 11.0% $ 16.40 165.30 GROSS OPERATING PROFIT $ 3.749.266 76.11%_S_123.76 177AS $ 145.60 $3.837.310 Amount ' Percent PAR POR Amount Percent PAR POR Amount Percent PAR POR $ 4.892.643 99.3% $ 161.50 $ 190.00 $ 5.007.764 99.3% $ 165.30 $ 190.00 $ 5,375.848 993% $ 177.45 $ 195.00 36.663 0.7°% 1.21 1.42 37.030 0.7% 122 1.40 37.400 0.7% 1.23. 1.36 $ 4.929.306 100.0% $ 162:71 $ 191.42 $ 5.044.793 100.0% $ 166.52 19140 $ 5.413.248 1g0A`x, $ 178.68 $ 196.36 $ 611.580 12.5% $ 20.19 $ 23.75 $ 625.970 12.5% $ 20.66 $ 23.75 $ 654.751 122% S 21.61 $ 23.75 23.831 65.0% 0.79 0.93 24.069 65.0% 0.79 0.91 24.310 659% 0.80 0.88 $ 635.411 12.9% $ 20.97 $ 24.68 $ 650440 12.9% T -21.46$ 24.66 $ 679.061 12.5% 5 22.41 $ 24.63 $ 4.293.894 87.1% $ 141.74 $ 166.75 UNDISTRIBUTED OPERATING EXPENSES $ 4.394.753 87.1% $ 145.07 $ 166.74 Administrative & General $ 180.255 3.7% $ 5.95 $ 7.00 $ 184.497 3.7% $ 6.09 $ 7.00 Marketing 1925 144.204 2.9% $ 4.76 5.60 147.597 2.9% $ 4.87 5.60 Property Operation & Maintenance 139.054 2.8% $ 4.59 5.40 142.326 2.8% $ 4.70 5.40 Utility Costs 81.115 1.6% $ 2.68 3.15 83.023 1.6% $ 2.74 3.15 Total 544.628 11.0% $ 17.98 $ 21.15 557.443 11.0% $ 16.40 21.15 GROSS OPERATING PROFIT $ 3.749.266 76.11%_S_123.76 $ 145.60 $3.837.310 76.1% $ 126.66 $ 145.59 FIXED EXPENSES Management Fees $ 147.879 3.0% $ 4.88 $ 5.74 $ 151.344 3.0% $ 5.00 $ 5.74 Property Taxes 60.000 12% 1.98 2.33 60.000 1.20/6 1.98 2.28 Insurance 11.000 02°% 0.36 0.43 11.000 0.2% 0,36 0.42 Land Lease 246.465 5.0% 8.14 9.57 252.240 5.0% 8.33 9.57 Total $ 465.344 9.4°% $ 15.36 $ 18.07 $ 474.583 9.4°% $ 15.67 $ 18.01 NET OPERATING INCOME $ 3.283.921 66.6% $ 108.40 S 127.53 $ 3.362.727 66.7% S 111.00 $ 127.59 Occupancy Tax Projection $ 489.264 $ 500,776 Land Lease $ 246.465 S 252,240 $ 735,730 $ 753,016 0 P6 $ 4.734.187 875°6., $158:27 $ 171.72 $ 192.979 3.16% $ 6.37 $ 7.00 154.383 29% $ 5.10 5.60 148.870 2.8% $ 4.91 5.40 86.841 1 B% $ 2.87 3.15 583.073 108% $ 1925 $ 21.15 $ 4.151.114 7 &7% S 137.02 $ 150.57 $ 162.397 32% $ 5.36 $ 5.89 60.000 1.1% 1.98 2.18 11.000 02% 0.36 0.40 270.662 SD% 8.93 9.82 $ 504.060 93% $ 16.64 $ 18.28 $ 3.647.055 67.4% $ 120.38 $ 132.29 $ 537,585 $ 270,662 $ 808,247 0 DEPARTMENTAL PROFIT $ 5.085.740 87.8% $167.87 S 176.71 UNDISTRIBUTED OPERATING EXPENSES 2.7 %$ 5.74 5.32 5.60 Administrative & General $ 201.462 3.5% $ 6.65 $ 7.00 Marketing 161,169 Newport Beach - Balboa Island $ 5.32 5.60 Property Operation& Maintenance 155.413 2.7% $ 5.13 5.40 Utility Costs 90:658 1.6% $ 2.99 Income Summary Projections Total 608.702 16.5% $ 20.09 $ 21.15 Year? Year Year Room Count 83 83 28.780 &9 29.689 Rooms Occupied 28.780 30.295 Rooms Available 30.295 30.295 Occupancy 95% 98% 210.00 Average D Average Daily Rate 200.00 205.00 205:80 Rooms Revenue Per Available Room 190.00 194.75 Amount Percent PAR POR Amount Percent PAR. FOR Amount Percent PAR POR REVENUE $ 5.756.050 99.3% $ 190.00 S 200.00 $ 5.899.951 99.4% $ 194.75 $ 205.00 $ 6,234.711 99:4% $ 205.80 E 210.00 Rooms Telecommunications 37.774 0.7% 1.25 1.31 -191.25$ 38.152 0.6% 1.26 1.33 38.533 $6.2 73.244 0.6% 100.0% 127 $ 207.07 1.30 $ 211.30 Total $ 5.793.824 100.0% $ 201.31 $ 5.938.103 100.0% $ 196.01 $266-373.24 DEPARTMENTALEXPENSES S 683.531 11.9% $ 22.56 S 23:75 $ 683.531 11.6% $ 22.56 S 23.75 $ 705.116 11.3% $ 23.28 S 23.75 Rooms 24.553 65.0% 0.81 0.85 24.799 65.0% 0.82' 0.86 25.047 65.0 %d 0.83 01 Telecommunications 708.084 12.2% S 23.37 $ 24.60 $ 708.330 11.9% $ 23.38 $ 24.61 $ 730.163 1111 $ 24.10 $ 24.59 Total $ DEPARTMENTAL PROFIT $ 5.085.740 87.8% $167.87 S 176.71 UNDISTRIBUTED OPERATING EXPENSES 2.7 %$ 5.74 5.32 5.60 Administrative & General $ 201.462 3.5% $ 6.65 $ 7.00 Marketing 161,169 2.8% $ 5.32 5.60 Property Operation& Maintenance 155.413 2.7% $ 5.13 5.40 Utility Costs 90:658 1.6% $ 2.99 3.15 Total 608.702 16.5% $ 20.09 $ 21.15 GROSS OPERATING PROFIT FIXED EXPENSES Management Fees Property Taxes Insurance Land Lease Total NET OPERATING INCOME $ 5.229.773 18.1%1 172.63 $ 181.71 $ 201A62 3.4% $ 6.65 S 7,00 161.169 2.7 %$ 5.74 5.32 5.60 155.413 2,6% $ 5.13 5.40 90.658 1.5% $ 2.99 3.15 608.702 10.3% S 20.09 $ 21.15 $ 4.477.038 77.3% $ 147.78 $ 155.56 $ 4.621.071 77.8% S 152.54 S 160.56 $ 173.815 3.0% $ 5.74 $ 6.04 60.000 1,0% 1.98 2.08 11.000 0.2% 0.36 0.38 289.691 5.0% 9.56 10.07 $ 534.506 9.2% $ 17.64 $ 16.57 $ 178.143 3.0% $ 5.88 S 6.19 60.000 1.0% 1.98 2.08 11.000 0.2% 0.36 0.38 296.905 5.0% 9.80 10.32 $ 546.048 9.2% $ 18.02 $ 18.97 $ 3.942.532 68.0% S 130.14 $ 136.99 $ 4.075.023 68.6% $ 134.51 $141,59 occupancy Tax Projection S 575.605 $ 589.995 Land Lease 289.691 296.905 $ 865,296 $ 886.900 Page 3 $.5.543.081 88.4% $ 182.97 $ 186.70 S 207.824 3.3% $ 6.86 S 7.00 166.259 2.7% $ 5.49 5.60 160.321 2.6% $ 5.29 5.40 93.521 1.5% $ 3.09 3.15 627.924 10.0% S 20.73 $ 21.15 $ 4.915.157 78.4% $162.24 $ 165.55 $ 188.197 3.0% $ 621 $ 6.34 60.000 1.0% 1.98 2.02 11.000 0.2% 0.36 0.37 313.662 5.0% 10.35 10.56 $ 572.860 9.1% $ 18.91 $ 19.30 $ 4.342.297 69.2% S 143:33 $ 146.26 $ 623.471 313.662 Newport Beath - .Balboa Island Income Summary Projections - Year-1 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 83 21.207 30.295 70% 170.00 119.00 Amount Percent PAR. POR $ 3.605.105 98.9% $ 119.00 $ 170.00 38.919 1.1% 1.28 1.84 $ 3.644,024 100.0% $ 120.28 $ 171.84 $ 503.654 14.0% $ 16.63 $ 23.75 25.297 65.0% 0.84 1.19 $ 528,951 14.5% $ 17.46 $ 24.94 $8,115.072 85.5% $ 102.82 $ 146.89 UNDISTRIBUTED OPERATING EXPENSES Administrative 8 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 SAO Utility Costs 66,800 1.8% $ 221 3.15 Total 448.517 12.3% $ 14.81 $ 21.15 GROSS OPERATING PROFIT FIXED EXPENSES Management Fees Property Taxes Insurance Land Lease Total NET OPERATING INCOME Occupancy Tax Projection Land Lease $.2.666.555 73.2% $ 88.02 $ 125.74 $ 109.321 3.0% $ 3.61 $ 5.16 60.000 1.6% 1.98 2.83 11,000 0.3% 0.36 0.52 182.201 5.0% 6.01 8.59 $ 362.522 9.9% $ 11.97 $ 17.09 $ 2.304.033 63.2% $ 76.05 $ 108.65 $ 360.511 182,201 . $ 542,712 r Page 4 • • is 0 Country Inn & Suites 3-5 Bristol -�trcet, Costa Mesa, California 92626 7 )4.549,1)300 TOLL FREE RESERVATIONS 800.322.9992 coast Plaza P� c �J A e T N 405 Feceway exit Bristol South, then 1 mile to the corner of Bristol and [zrd6il1. Fraau'av exit Baker. ;o riCbt, tum left on Bristol. fSo exit off Bri;ml on the 551. • NC) i EI. FEATURF,S & SERVICES 300 Deluxe Rooms & suites Non--Smoking Room: /'Two Line Telephoner High -Speed Internet Acce +s / Oversized Writing Desk Refrigerators./ net Bar / 'Whirlpool Batlis 'Micro Kitchens With Nlicrowaee / In -Room Coffee Hair Dryer- / fronine Boards with Iron Award Winning^ Restaurant and Garden-, Sleeting Rooms up to 200 Full Service Beauty' alon Two Outdoor Heated Pools/ Spas / Fitness Studio Complimentary Breakfast. / iNloming New =paper Complimentary Beverage' -/ Fresh Fruit/ Home6aked Cookies Pay- RrXlew Movies / HBO, ESPN, CNN, Disney Channel f�as, 6w0dir4 Ay -- [-I." w6:..n,r „ne Country Inns & Suites ey • Ontario at the Slills Mall 909.481.0703 • Ontario Airport 909.390.7778 • Corona W'cat 909.738.9113 • Diamond Bar 909.860.6290 • San Clemente 949,498.8800 • Canlfff 6y & 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 Visitour we],rite at: www,countrvsuitcs.com COSTA MESA %r I� Country Inn & Suites - ey t f f r kit 3 0 • Wu.. 17. L l?c a?hhlestone =arclel couitvarc{ is a i - i perfect _pot to unwind amidst lush, fragrant r flowers, plants, and the ` soothin, sound and visage of cascading water in our imported tile fountain. Enjoy hunch or dinner . in our Le Chateau Restaurant, a warm and intimate 5ettin offering a wide variety of continental cuisine, and always, the {inert service. I `/ /o matter what the occasion _ husine4s mcetin,_s,. social -gatherings or receptions for up to 200 people — our conference Facilities and caterin= professionals are always ready to care for your needs, large or small. �\ ur :Ill) i_un,1.ean- His pired =ttest rooms and suit, are eXLjUisitcw appointed wid, naabo_a :n 0-:teen Anne style furniture and matching arnl0ire with television, cedin_ Lan and refri_erator, all surrounded by the f eauhV of French inspired floral wallpaper. AP6,ir Cour 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 par of the formula for the perfect getaway. two heated pook, spas and a fitness studio are available to all guests. For the more outdoor - minded, Newport's scenic Back Ba,- joe_in� and hiking trails are the perfec. escape into nature. 0 ittAt4fct �R 1:1\�h� 3 �` -♦a lel.>rlW. r w�lc 774ia ALM . • _ .�. - - �_�>i!!•■1b: •�tg.�imi���� �1 t ■ '' r1�I� f ' fwi `i /� �t . ' �i� ie > . nl �.� .- �• 'fur'. r•y/�■���r» �i war �a'.ex� r: .l lll,ll3.Jlf�j��►1l�A'sHl.U1� \� '�� � �.� ,.'4 s� � � s'�® *• �"l��l►�l>i 1•M W�A Iitt�iY 1 � t` „1� .. - 'YZ - ---Y �.� �.. At�1■1 ■■ ■tr r . ,�� ` 1 .o r��l 1� bra ���, . //� �f...: i ,• J'•�..._��.. k � : r'win'. MM loll Mimmmm dry f1ti1 sw Sr f =- ✓ ��^ � j{ I catF•.: tt . .�_�� r•w• HI �., rul t t f r • f 1 1 bill ama� . Lry art 8; tz r► : 1. .1 i'i�l I JSTIng Site The Bendettl Company 1176 Mm Slmf Sull, 100 1 rlln. CA 92714 .j 0 N WILLIAM HEZMALHALCH A R C H I T E C T S I N C. OmWt I 9M2 Marinapark Request For Proposal 40 Executive Summary 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: o Maximization of revenue to the City of 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 0 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 • 1,500 square feet, all on ground leased property. The homes will be a continuation of the architectural theme of Marinapark. 4. 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. 5. A 44 room luxury seaside inn which include 25 unique • bay view rooms. 6. 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. 7. 9,000 square feet of small multi -tenant office space primarily serving the demand from the local community. 8. 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) 0 261 -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 0 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 0 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 11 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. 0 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. 9 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. 0 • A 60/40 revenue sharing formula adding additional annual revenues starting at $972,134. • A onetime $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. PJ 0 1 � u I MORE i Ilion it � Ii��I(Il�I�'� � ✓Fp I� 1 / � F .IJ • Project Description THE NEW MARINAPARK VISION 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 0 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: 0 • Strive for consistency with the character and atmosphere of is 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 0 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: 0 • 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. 0 • 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. • 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. is • 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 18", 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. 1J • 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, 0 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. 0 �--4, * 11 VIP nd /I ITI JL SPIELLAR MATJ ------------ �A A K ir V✓I1114M HEZMgLNPLCM .MARINAPARK Newport Beach, CA 're Bendem comppny :rte +.r" rte. lit i ♦. y1H i i.. f � i�'� ��J�y � �_`�� .. .�..S.uF�. �� 9�qi� :a" :::s:i y:i .• jj,.Y�� '�' � `' ,:, ice' _r: FCAx.. '�.r e a � "+r° ✓'•c`' ,�' �,-..� V✓I1114M HEZMgLNPLCM .MARINAPARK Newport Beach, CA 're Bendem comppny :rte +.r" rte. • 0 0 � sJ F • 0 0 Marinapark Development Budget PURCHASE PRICE Land Area 10.71 Acre 35,000 SF 466,528 SF Other: PSF Half -Tuck Subterranean 35,000 SF TOTAL LAND COST $ 20 PSF CONSTRUCTION COSTS "EXHIBIT A" Demo and Off /On -Site Work 466,528 SF @ $ 4.75 PSF Common Areas /Landmarks 200 PSF Townhomes - Attached Lighthouse 2 @ $125,000 EA Wood Planked Boardwalk 24 1,800 SF @ 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 SIT @ $ 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 $ - • 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 E • Seaside Inn Shell: T.I. Allowance: Project Management Hard Cost Contingency TOTAL HARD COSTS Marinapark Development Budget 16,995 SF Q $ 16,995 SF @ $ SOFT COSTS Architectural & Engineering Feasibility /Appraisal Soils & Environmental Development Fees & Permits Legal, Title & Closing Taxes & Insurance Marketing & Promotion Leasing Commissions Development/ Construction O/H Soft Cost Contingency TOTAL SOFT COSTS ,DEVELOPMENT COSTS (BEFORE FINANCING) FINANCING COSTS Loan Fees & Expenses Ground Lease Pmts. Interest 85 PSF 1,444,575 60 PSF 1,019,700 $ 29,949,281.10 1% 299,493 4% 1,197,971 $ 31,446,745.16 3% 4% 3% (Hard Cost) 5% 3% 12 Mo.'s Absorption (after CofO) MHP Income Offset Construction 16 Mo.'s rr 9.75 %, 60% dispursed Absorption 12 Mo.'s rr 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 0 $ 943,402 65,000 35,000 1,197,971 120,000 430,000 45,000 125,000 943,402 210,000 $ 4,114,776 $ 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 125,000.00 Landscape PROJECTED NOI EXHIBIT 27,000.00 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 "E" 53,851 Retail "F" 228,094 Office "F" 189,000 American Legion Hall "G" 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 % Common Area Utilities 322,154.05 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 • Summary Exhibit "A" Mobile Home Park ` 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 well 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 & FF") or partially obstructed (Space "C, D & E "). CURRENT ANNUAL OPERATING EXPENSES CURRENT NOI CURRENT TOTAL SPACE RENT /MO. $ 28,786 19,241 9,012 $ 57,039 $ 684,465 123,204 $ 561,262 CURRENT CURRENT SPACE PROJECTED SPACES RENT /MO. A, . B & P SPACES 25 $ 1,151 C & D SPACES 22 $ 875 E SPACES 11 $ 819 CURRENT ANNUAL OPERATING EXPENSES CURRENT NOI CURRENT TOTAL SPACE RENT /MO. $ 28,786 19,241 9,012 $ 57,039 $ 684,465 123,204 $ 561,262 PROJECTED ANNUAL EST. OPERATING EXPENSES PROJECTED POI 0 Market Support: Marinapark mobilehome park, Lido Penninsula Resort $ 102,400 $ 1,228,800 180,000` $ 1,048,800 PROJECTED PROJECTED TOTAL PROJECTED SPACE SPACE SPACES RENT /MO... RENT /MO.. 23 $ 2,200 $ 50,600 20 $ 1,700 37,400 9 $ 1,600 14,400 PROJECTED ANNUAL EST. OPERATING EXPENSES PROJECTED POI 0 Market Support: Marinapark mobilehome park, Lido Penninsula Resort $ 102,400 $ 1,228,800 180,000` $ 1,048,800 Exhibit "B" Luxury Residences - SFD Townhomes Lofts - SFA Summary The potential revenue for the residential element of Marinapazk 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) SFA 17 $ 725,000 $ 36,250 $ 130,500 SFD 24 $425,000 $ 21,250 $ 106,250 (i) A one -time development profit GROUND LEASE AS TOTAL PERCENT .SALE OF SALE PROFIT PRICE $ 2,218,500 2,550,000 $ 4,768,500 (i( 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 0 L_J 0 Summary Exhibit "C" Private Marina Visitor Serving Marina Visitor Serving Manna 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 Manna The Marinapark development plan will modernize and rebuild the existing private manna 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. 0 Private Marina Combined Private Ifs Visitor Serving Marina$ $ 2,476,894 Market Support: City of Newport Beach (Balboa Yacht Basin); California Recreation; The Balboa Bay Club; Marriott, San Diego; Marriot, Coronado Bay Vessel Mo. Rent Mo. Rent Occupancy Total Length /Feet Ho.. 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 Ifs Visitor Serving Marina$ $ 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. E 0 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 $1,202,500 (We haven't included dredging costs in this estimate) REBUILD OLD MARINA Pile work $48,000 Floating docks $326,500 Utilities $50,000 Agway $4,000 Fire system $28,000 Demolition $30,000 COST FOR REBUILT MARINA $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 T.O.T. T.O.T. of Rooms Rate Rate Revenue Revenue Rate Revenue Bay View Room 25 $235 70% $123,375 $1,480,500 Courtyard View Room 19 $185 70% $73,815 $885,780 TOTALS $197,190 $2,366,280 10% $236,628 30% Hotel Management, Operation and Expenses $ 709,884 $1,656,396 0 Exhibit "N' Resturant Summary Eleeant 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 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 "F" 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 0 J 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. 0 • • Implementatlon . Schedule 0 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 S. 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 0 THE BENDETTI CONSULTING TEAM I& 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. 11 Basic & Financial ,j Qualifications 9 is • 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. i 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 vaned 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: S • Wells Fargo Bank, Irvine • Bank of America, Irvine • City National Bank, Irvine • Union Bank, Irvine • Shearson Leahman, New York • Farmers & 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. • Mff WILLIAM HEZMALHALCH A R C H I T E C T S I N C. FIRM PROFILE 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 mufti- 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. 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 WILLIAM HEZMALHALCH A R C H I T E C T S I NC. Land Planning Design FIRM PHILOSOPHY Architecture 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. 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 0 wt 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 11112 7)al&a RM«Ivtlju 7��eac,/, A/I 7JU21j, 71ssl /CYI!/ Clyy 7.fjposcl/ (JeIIIP22 - Mld/) 4 701C 7%L012e.- (949) 2 ion/ac i. JW,, . 7ekl�al -d Nall 61-tiaiYVIA, 20,90 on 11 e MAwa J eninsa a 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 Legionnaires and the Balboa Peninsula community. Features of the Plan Features 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. 2�/Ci Cximmunili¢s .�ropasa //o /%ie icily of �¢mpor /,`�¢ac%t lnaye ! Marina Part Reuse Plan .m lle Jf f&a %ninsu�a b r "A cornerstone for future improvements reflecting the Peninsula's sense of community while balancing land use and economic interests." • The improvement of year -round visitor Performance Indicators parking opportunities with the creation of on -site parking facilities through the T he performance indicators for the construction of a two -story parking 1 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.4w*A-oOR*&-~ et. seq. C3 The rehabilitation of the existing : ❑ Neighboring property uses boating facility and limited expansion to complemented by project results. include options for 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. 2Y1C. Communa';", is. Ci yo`X.) '! rlSea " Page 2 r i is U s f t t ( ( ( f f l f L f f C f Marina Park Reuse Plan an 11"e zal&a AninFu /a 0 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 =* 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 In 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 THCCommunities P°op.fb I& City of Xemponl T¢acf Pays Marina Park Reuse Plan on Ilia �u /i a Aenimufa 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. X-VC Gommuni/ies AM'Oosa //o /le C'/' o!`Xe.'Ow / Zear Ay¢a `A B 0 i t r i 4 4 A c E f E 4 • Marina Park Reuse Plan on l/,e Baf&a 'Peninru%a ik NCO =�+F' A+�."'�*".R. .,a•.. �y.['� ,.}4r 'F� h�r•79� °r'� t�=v e K � ' ��.. Comm�.,r�y���. Fonxns.F ,�,`��``� - .... • � y ,: 4NM P'�•Sk2�JIQiS M�®ICYPIW�A a u�t ® Community Q8YI8Wyr nn mt sNN N. a ; d ^tY�"�'e�"�^Ina,ft•�y'A"�`�FJ� M �� 4 I�11QQt�t4. f{icR1U M 4 P cofnmt>�bn�eadnys city CFId y ` ` � ..... Coasfcl Cgnmisatoo ~ ' ��•��� w 4 13 5 Yts sY.�Vt'� k .Gy.y'.pM?*iF yy�'•°�� n Q18QC C11d If p8imlt5 tSSUG e� sitev ao-evan'�+�Y t i site 1 Oehdi .L y; ✓epaya-'_ sh Hotel & parking uchxe oonshuclion. hM Aunencm► tsgion, taifl SCOUT t101I5e I u ° r`�� Center constnxllon >.u�s �. Park, boor slip and vlsiloF se 12 `200 2 Apyq Marina Park Reuse Plan-, Project Description T he 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 O 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. W.%ic communiliex. JTropwa %lo I e cii y of xe porl _Mac 'page S �� �y.{+•l+.r- .,�������- -+.,rte � ' ♦ r '" n At Cl .� ,ter ���•° yr e L i :. i it, , Financial Impact Summar-y Marina � Park Re-use Plan an (!1e Baf&a 716p nla 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 15th 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 Proiect 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. 22XC QmmundAm 54npo a / (a (Fie Qi y of Zeac Taye9 0 • Marina Park Reuse Plan nn the %iu //H.a "/�nin.:ulo 00ualifications 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 ! r ❑ The project is consistent with Coastal Act's emphasis on visitor serving land uses t • 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 ❑ 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 a 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 9?NC Qommunilier iroposaflo /fie Qi y of :irempor! Xeacfi `Page 10 V RHC C O M M U N I i l[[ February 3, 2000 City of Newport Beach Attn: Sharon Wood 3300 Newport Blvd. Newport Beach, CA 92658 -8915 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 i 20201 S.W. Un<cu Srer..rr, Sum: 250 • NF.WPO >RT BEACH, CALIrORNIA 92660 • 949.224.0222 • FAX: 949.224.0223 CREDIT FIRST SUISSE I BOSTON 0 February 2, 2000 City of Newport Beach 3300 Newport Blvd. Newport Beach, CA. Re: Manna 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 -2$80. Ei V cc: Mark J. Zytko is EJWaay Fy 1'L. ''..�.: /'''.'_ /- � „y_t ., Gr.'s.. �l•'' y� • TABLE OF CONTENTS Executive Summary Section I RHC Portfolio Section II Industry Publications & Articles Section III 0 'WEXECUTIVE SUMMARY • 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 Souther 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. CORPO ATESTRUCTURE 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. 0 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 detemvne 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 fast 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 fast. 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. PROJECTS ACQUIRED BYRHC COMMUNITIES PROJECT LOCATION PROPERTYTYPE MHPSPACES APT UNITS YEAR ACQUIRED STATUS Capistrano Terrace San Juan Capistrano. 4/-P 154 0 1985 View Park La Habra M P 143 0 1986 Sold 1993 Cherryfield Paramount M-P 117 0 1987 Sold 1992 Park La Habra La Habra M P 107 0 1987 Sold 1993 Buena Park Manor Buena Park M P B5 0 1988 Towne and Country Concord M P 166 0 1988 .Sold 1998 Bayscene Chula Vista NFP 126 0 1 989 Dana Point Marina Dana Point M P 91 0 1989 Sunrise Terrace Arroyo Grande M-P 300 0 1989 Sold 1995 Treasure Island Laguna Beach M-P 266 0 1989 . Country Place Fullerton M-P 78 35 1989 Mulberry Santa Clarfta M-P 109 0 1990 Sole 1999 Continental Hayward M P 198 0 1990 Bahia Garden Grove M P 176 0 1991 Sold 1993 Santiago Estates Sylmar M P 303 0 1991 Sold 1995 Chatsworth Imperial Chatsworth M P 184 0 1991 Mountain View Estates Upland MHP 68 0 1992 Sold 1995. Westminster Apts Westminster APT 0. 55 1992 Adobe Mobile Lodge Concord M P 77 0 1994 Diablo Mobile Lodge Concord M-IP 73 0 1994 Club Marina Baypolnt 4/-P 156 0 1996 Orangevale Townhomes Orange APT 0 64 1997 CopacabanaMHP La. Verne M-IP 173 0 1998 Del Nldo Apartments Santa Rosa APT 0 206 1998 Paradise Ranch Casteic MP 94 0 199B Seal Beach Trailer Park Seal Beach MI-P 127 0 1998 Park Trailer Homes Long Beach M-P 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 1 1 1 1999 COE 4/2000 Total Number ofS acesfUnits 3,458 875 0 • 0 - 1' � s r San Diego (51 Frwy - -pz- CD nZr q, Jon w"Intn'0994k 14"1 7-11 CO AWS 47 IL .7. �7. 2le L Y - r ... :. • '. moo. _ _ _ e•-�v r a r .L .. 1, q. f r - 6.i\!• TAR R-L _ ,i� _ rl l_ / ,• ° ��. - ,. - . �I� ! � • < rid "rn* � >��ISIi'r - r... y r -'� 1 i �,f•/ � � >r _ Lc jHa s.feT C "eA 'r `. :/Q�4 � itE'cP xFA Aft Lr- a nd � a kx; S \; r. wli �' w.. - r t i N ,c+lr i "� U, .. � •.../ t ysd Y ^ 77 - / JE, �' �� i 96r- � '( ` ". �' Y f � e ° ..i} ..3r _ Y � 3 � l A •f1 w l ! '9 t dl i/ 6�, ���'• E. I � tX � ��� tr� .. "-n F Y 7r -er,,t -art I. t r - .- �` \ P > NA-d� ,' �4�9� 4 tirl� �'•Rt A n r/ t. ' I i - I. F' —Ir• �1 �� L'v� iri I }` ', v� i ',.r R.t Subject } � 9 1rK _ MW dw O'i�WAr ' ill �►fr�� �� T \`� 0.1, ow JQ f/ r. I s 2 � .. _ � A 1— rte••_+- •^..n"' -�.�{ t+� � '. ti - .Vt. N ,. � rt %e _ I It' I fix.. d ♦ . V '"� ::�� y.. :I iY ry/y�., -ry�� •4 i YID J , r �£ ru• - _ / ,, s '^q,,- " "fy+.'� "ice'.,,, -+w.`9 ^'w'' ►fir"', 6 V � r /�'f =. ^• ,,��e�:rs. ", -' � .ii._ �,, �;"� _ Vii' i�r4`�'• �' I OF low LAW aye 3V� Ar W� 44, IFfir. 40 . MW 1pl- Jr. 'x 1-7 "Al K5% *WK O�x F, ow -71 *;�alvjljj; ,W47- op— i IIIA It, ot= ow 4 r ------ - -- - -- ------- oian gethbrpe 111,111 1 111 2 1 11111 loll :rT. 4PA. QP 777 I "h amHY� Y Ne, Al- Ag 6 d � UNQ M- y _ _ _ , _�;a__ .. �.:__ ,. 'sC ^ 1 ,i :P1 THE KEY TO EXCELLENCE O'prn m"I"hc Ih,L Fi id:n `91:00111 6:00 Satnrdze 10:00 In 2:00 1300 N. Shaffer • Ocange:, CA • Newly RenR:atcd hilehalll • New Cerpctin„ •.New Landacnping •Swimming Pool A: Pla�'2r<nlnd Under (mist ruction • Ccnlral Air X Hc:u • Collie Read, • Fireplaces In All llnit.a • Rel i iL,eeatnrs In All Uims • Benciooe Clout Spaco • panos S Bulumics ^, • Carine On -Site Seal l' N uei l Tize,h Paid Cna sx,,'Slom,,c Acailablr Assign tl I akin^ • L:uutdr.. Aocihties • Oil Buslinc • Neal Oian2c Mall • Close To Anulichn Ponel • Minutes Flom. The 55171 ce wa, • Clo., • To School, Townhomes Aax.:.ranmaau -sew Coll 1- 800 -864 -3558 s and Enter Code 1583 pax., (714) 639 -6286 INDUSTRY PUBLICATIONS & ARTICLES riny The Apartment Report CRITTENDEN PUBLISHING, INC. • P.O. BOX 1150 • NOVATO, CA 94948 • CUSTOMER SERVICE•;: (800) 421 -3483 Vol. S, 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. L.J E • Crittenden 's Manufacturrd Housing CommunityReport 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. The property on 8.82 acres is just one block from Doheny State Beach. Residents have access to the beach from a private pathway owned by Dana Point Marina. 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- yearterm 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 county's rent control ordinance and rent increases historically run 3 % to 10% on turnover. They now average $440 a month, not including utilities. Cashflow from Other amenities include a swim- rent supports a 1.20 DSC. -Quotation not 0&rW tenal fflay not be rep nw e orin part in anylorm w Buyer Picks up Two California Communities . Newport Beach, Calif.-based RI{C , 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 Buyer Gets California Communities... Castaic through a distress sale. The $13M cash purchase of the northern Los Angeles Continued from Page 3 County MSA, and the affordable rated was not calculated. County property includes 300 acres that Occupancy at the family park is 100%. Seal Beach Trailer RHC bought while the seller was in foreclo• Park's only amenity is a 2,500 s.f clubhouse with a kitchen sure. Only 80 of the 300 acres are'develop- and entertainment space. RHC plans no improvements able because of largely hilly terrain. RHC because the park is in tip -top condition. It does plan to will expand Paradise Ranch by 25 sites as make $1 M in renovations at Paradise Ranch beyond soon as its receives county approvals. -The expenditures to expand the community. Renovations wil remaining developable land may be turned include upgrades to water and septic systems, road resur into other manufactured housing communities ing and the installation of lighting and landscaping. or stick -built housing subdivisions. Paradise Ranch includes a clubhouse, swimming pool, its RHC usually finances its acquisitions with tennis courts and hiking trails. The property has two quarter -horse race tracks, 60 stables and equestrian trails. Credit Suisse Firsts ac (CSFB) but Paradise Ranch will have 35 homesites available for rent turned to Tokai Bank of California since after expansion because 10 existing sites are vacant. 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 valve (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 I 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 • Crittenden's Mall Street Mortgage Report The Insider's Weekly Briefing on Moriguge:Condui4t & Securilizalion First Boston Books Big Mobile Home Park Deal Credit Suisse First Boston funds a 10-year, $40M mortgage for RHC, Inc. to finance the investor's purchase of three California mobile home parks and to refinance five of its existing 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 Ha rd; the 38- ear -old, 109 - site Mulberry Mobile Home Park in Santa Clanta; and the 34 -year- 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 $1 OM of the loan proceeds to buy out joint venture partner John Hancock Life. The Hayward park occup'es 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. c17 or ORANGE `.l�Lgav :O1' 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. Sincerely, �"_.'', ic: max:• � A ; anne Coontz Mayor q:recondevimeVln mayor -hall P.O. BOX 449 ORANGE civic CENTER 300 E. CHAPMAN AVE ORANGE. CA 92666 -1591 0 4 RHC C O M M Y N I T t a a Given the economic ups and downs of the 90s, • today's investment prof miomis have been forced to scrutinize their "report cards" when en mining real estate performance Time and again, despite dramatic market fluctuations, manufactured home communities continue to score higher than other MM property types. Buying Communities Not Buildings A New Decade For Upside Opportunity ��'+oar savvy investors in search of stable investment professionals hen been forced to 1'investment with in yidk4 . it scrutinize their `report cards" whm examining shouldnt come as too much of a surprise that real estate perfminance 11m: and spin, despite 1995 to 7005 his been dubbed the 'Decade of dramatic mnla t fluctmtion; nutru attunes the Manufactured Home Community.' home communities continue to store higher Although they lack the ghmouq Ault and when compared to other investment property allure of other investment nkegoric4 these types. These communities consistently exhibit properties have long been recognized as the lowest . national loan default rate and, during rewarding imemsrcnts The real question i4 the worst real estate cycle of the dcc* sustain what is driving this sudden surge . of interest in a continued rem increases without lost occupancy property type that has been around for years? That h why, now more than eves One significant reason is performance. Given manufactured hone communities are coming the economic ups and downs of the 104 today's into their own as the investment of choice. The Impact Of Institutional Recognition S awe 1993, four majormanufadured home community owners have gone public as REM Since that this; public interest by would-be investors of the END adstem and growing property portfolios have shed new light on this lessthan- glimorous property type The result le after three yeas of dramatic portfolio growth and.pa[amunos these REM are still going after manufactured home communities with vengeance Wall Strati interest in manufactured home communities is nnpraedented.Even though acquisition activity has dared this yea4 these new owners are maximizing profitability with their large portfolios through enhanced property management Activity is expected to resume. its :former pace titer this year While the holy-touted REM have eonunmded the capital source spotlight during the .bat two years syndicators and private investor; have been right on their beds taking advantage of the growing availability of capital from commercial bards; fife comp2nie4 credit companies and pension funds more imporhntig these private investor groups (rne a distinct advantage over the REM Due to yeast of experience in the manufactured hone community h adusul; they nor only haven keener ability to recognirn opportunity but: can provide highly-experienced and specahrtd prokssieiul property management that an drive madmum value increua. Why Manufactured Home Communities Make Sense ate a number of compdEng reatons. 1 muiubctwed hone Communities stand au as an imestrmit RHC Communities a trader in the manufactured (some communityirdustry, has identified the key factors that warrant a closer look at this ir emnentnidic HIGH OOCUPANCY LEVELS In major mctmpolian area; manufactured horde communities experience Very high occupancy tares when compared to any other investmeta type In Califomy, many regions boast oc uPIT levels ranging from 98 to 100 percent NatiOno resident turnover for apartments Weed 55 percent per year Ey comparison, once manufadurod home communities are iusa'K 90 to 95 peseetmr are never moved. This stability is due to prdmmm transportation and sa -up e0z Thee ousts an werar $1000 per 11114 a considerable portion of a residents equity in the home In addition, the homes value is largely attributed to its location within an established community. Given today's shortage Of alternative home Site' these 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-phce to new residents before considering a relocation of the entire structure The growing popularity of manufactured homes as a housing choice can be linked to several fact= Amitnuaam According to recent studies by the Manufactuned'Housing Institute (MM, 82 pecent of ranufaetured home buyers purchased their hate because it Was an aff rdable alternative to traditional stick-built single family homes Changing demographic pattern; dinging lifcstpla and high housing vests have anted even stronger consumer demand for a new affordable variety of housing .choices Simply put manufactured home communities are this country's only true form of afloalable housing. Buying in a manufactured home community is one of the few options a family [US to apartment living TO(* a family can Purchase a manufactured home including marga85 space rent and personal property axe for less than the neat most affordable alternative— apartments or condonuniums The down payment is lower it's easier to qualify for fumncPng and, on the Mragr; the monthly costs are lower In fact for most region;: the monthly housing costs associated with home ownership in a manufactured home community are the sure as or less than apartment. rent EsrtrA.asavHONMOwmaaM,. Will studies indicate that 58 percent of manufactured home b fryers purchased a lame because they desired the qualities and f.catutes inherent in hone ownership This factory -built housing product in many ways equals the advantages of traditional stick. built horsing but at far less cost to the conumerand would -be homeowner in terms of likstylq manufactured homes closely membk single family communities They provide privacy stability, pride of ownership opportunity for individual expression, 2 sense of community and detachment despite the fact the land is rented Bmtr Affur; Manufactured homes currently WF=t a snide spttttum of architectural style; interior dean and amenities and come in Sizes ranging from 6M to well over 2,500 square fat This diversity mans manufactured homes mat 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 afbrdablc housing option LIMITED COMPETITION The high demand and limited supply of n anufactued homes in major metropolitan awls will continue Moreover it is unlikely new manufactured home communities will appear in these aas due to existing shortag; zoning barriers and pricing of land Sim conventional housing cannot be produced at a comparable cost to manufactured home mmmanitie5 it is also eliminated as competition. LOW DELINQUENCY When a temntis grunted occupancy in the cornmurhitg they have committed to malt a significant capital hratstent to acquire the home that is situated on the lased lame site While the home smains the personal property of the truant the value of their property is only preserved if it remain on site As noteQ once the home is moved .off the property, it loses most of its value In Califomq state civil codes provide that if a manufactured hone tenant does not pry mat in a timely manse; the landowner may cause the removal of the home from the community. For obvious reason; tenants arc unlikely to jeopardize the equity in their home As a further stop gap to delinqua eg unkav the retain own the horse without debt the mortgage; refired to as the legal owner', with an interest in the tome sands behind the collateral. If a taautshouki GmT ro pry rent the fader will cure the default rather than lase the collateral searing Use bats LOW OPERATING EXPENSE RATIOS Manufactured home communities typically enjoy a 10 to 15 percent operating expense ratio advantage over mmpataNy -sized apartment projects In 1990, the nuionl average operating expense ratio for manufactured home communities was 372 percent For garden apartment; the ratio was 513 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 cartior unit maintenance operating costs are not only much lower but are easily controlled and projected with greater precision Since manufactured homecommunitia have better income and expense k xrjge dun other party typc4 their bmk even kvds are lower than apartment and office propertiq bringing more yield to the bottom line ThereforK manufactured home communities incrae in value faster flan most other property type& GREATER UPSME POTENTIAL Home site rental income accounts for about 95 parent Of an owner's revenuesmra Renal income growth mines from two major 2r as: yearly adjustments in rents of existing tenants and tent increases accompanying tenant turnover At a minimum, the standard home site lease provides for annual tent adjustments flat alx into account inflation increases in park expenses. In somemmmunitics, where there air no long -term kasa (renal agreements in excess of one year), rents may be escalated at the discretion of the landowner In the event of tenant turnove; rents an 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 lased investment type has as much tent disparity from project to project o; in some case; within the Butte community. This disparity is a function of two unique conditions. First tens are not always market driven, intend they are landowner driven. The level of rent that is clung d is big* dictated by the .type of property owner In an industry that is still dominated by 'mom and post' owner; the bA of investor acct management sophistication has resulted in undermarket rend Second, low turnover within each park mean space tent usually fall behind the market long before an opportunity to re -trot uisa. Investors an always count on rental streams that will outperform inflation &wets even in adown economic cydc Moteovc; since these is no expense offset to a turnmr; such as paint carpe; daning, 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 tilling vaancia, development and expansion opportunities, renovation and pasthrou& long{enn lase negotiation; implementation of social and recreational programs and instituting new management poUcie& • 0 0 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 hotrrS new tenants move in at a higher tent level. This market rate adjustment can range from 10 to 100 percent depending on the disparity of the previous tent from current market herds 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 arc incurred by the hndownet The sale is handled through a traditional escrow pmocu, with the rent pmrations 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 depredating asset.. buildings In manufactured hone communities, bemuse the units arc owned by the tenants you are essentially investing the majority of the investment dollar in an appreciating asset .. had. RENT CONTROL For apartment building; rent control can be a death kndl For manufactured home communities howevc; 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 mcrasing spa= Savvy investors view rent control as a guarantee for an inflation -proof real estate investment Under specific conditions buying in rent-controlled cities an offer more significant upside to the owner There arc many features that distinguish rent control in this product type from multifamily rent control • Ordinances arc in place that guarantee annual minimum inflationary rental adjustments • Unlike multifamily property, rent control does not result in unit deterioration Since the units axe 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 rcapturc of funds used for capital repairs and improvements to the common are • When home site rents arc restricted, homes because more valuablq tl=dOrq the collaretal securing the payment of rent tenant home equity, is gently enhanced • The caliber of rerun remains high because while the rents are lower homes in these communities trade at much higher prices than non - controlled communities of comparable quality. • A 1940 report by Real Estate Consulting Group stared that rent control can incense the resale price of a manufactured home by as much as S40,000. Buyers pay up front for anticipated savings in spas rent when they chose to purchase a home in a tent- 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 mull- limily rent control • The lower acquisition prim of properties in rent controlled jurisdictions can generate much higher future ale profits depending on the investor's exit strategy. COMMUNITY MODERNIZATION In any leased invettmcn, there conies a time when the leased unit requires modernization to keep up with market conditions This renovation work is usually, performed, at no small oost, by the property owner in order to keep occupancy high and rents at market level In manufactured home communities howeve; the tenants bar 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 [Hans 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 grater responsibility for maintaining their homes 2nd common areas than an apartment tenant As in any residential neighborhood, the residents recognize that the appearance of the common areas and amenities directly off ct 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 f:w improved structures to maintain, operate and insum This translates into reduced operating cent and lower risk. This risk can include catastrophic events such as fit; wind-driven min or Flood, loss and obsolescence MANAGEMENT EFFICDiNCIMS Prior to reaching institutional investment acclaim, the manufactured home community industry was predomimntly a mom and pop' industry with hew multiple property investors As such. there is far grater opportunity in newly equired properties for the implementation of management efficiencies which can significantly minimize expenses and maximize revenm opportunities. These efficiencies include burying powxy vendor whdonships, billing systems cost cummI4 loaf government relations construction expertisq collection audit procedures and implementation of community policies. gUBMETEBING OP UTILITIES In almost all manufactured communftie; gas and electric are submeteted to the homeowner In a growing number of communirie; the submacring of water sewer and trash is also implemented Ac orddnglK the landowner is only responsible for paying utilities for the common arms. In the case of gas and electric the landowner actually realizes a profit on the distribution of these utilities because the landowner is billed Y the commercial rate while the residents arc billed at the residential rate CAPITALIMPROVEMENT PASSTHROUGHS It is common practice in the industry and usually included in lase agtmsents and rent control ordinances that costa associated with Capital repairs or improvement to the common arms are passed through to the residents in monthly installments added to the rent until the cat and associated finance Barges are recaptured EXIT STRATEGIES In comparison, when examining exit sttaregies for manufactured home communitie; there are other unique options that an exceed the market price paid by a prim invests These include TRUM Cone OR SOEm mort Resident purchases of manufactured home communities, either through the subdivision process or a tenant copy have generated the highest riles Pi= for these investments typm In this car, the resident; committed to protecting or etsluncing their equity, will dfocdvdy'Overpay' for it= home sites For this teaso41pPrmm tardy, if eves; use the site prigs of resident punivsea as comparative sales in appraising manufactured home communities because the priors see so much higher While projects ate not traded to resident organizations with ghat fropo my due to Emitod financing program; there is a strong legidativepush underway to appropriate more state funding programs for theseconvasions: nis.64 combined with new private market . interest in resident funning will result in increased resident purchases in the future Mumc r;AL AcQuismart In t `aUfomia, them live been several cltiq since 1990, that have issued to =npt bonds to purchase existing manufactured home communitics within thdr jurisdictions fur the purpose of presemng existing of oolable housing AD& and Meeting suto' . mandated low income housing tcquitemasts Pricing for mpssulactsmd home communities acquired by >mmppalities tons; in 311 over e ¢xeded those paid by lris= parties Since housing agencies can fuiondeat low interest TM and are exempt from the payment of property tax pricing can be much higher white still providing esodknit coverage ratios on die tax exempt delbt CHANCE OF USE Unlike other property tyM manufactured home communities are seldomthe'higtestand best" use of the land Most communities in major mettapotitan am throughout California were constructed 20 to 30 years ago before the surrounding areas -wrn built out None with the scarcity of undeveloped land in these area4 . there is far grater demand for other product typq such as single or multi -[amity residential The RHC Communities Difference j� no new REIT' or private YY '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 op=dm manufactured home communities in Cdifornu, The Richard A. Hall Company her hunched a new entit% RHC Communities, that combines its expertise and established track record with a new vision and agressive Capital sources seeking to take down a substantial muimt shoe of new acquisitions. RHC Communities is poised to become the dynamic leader in this the 71c Fiutum 7'vert now current market predictions rjhWiaft this investment niche will continue to grow exponentially to mat detrund from senior and young people who cannot afford to live in tractional sing►o-Fitnily homes or may simply pte&r to live In a manufactured home urvimnment Tlsc 'Dade of the Manufactured manufactured home community investment atria. 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 her enjoyed unheralded suooms in its acquisitions over the past 10 years and her 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 her mine to aamine opportunities outside of traditional otfic; retail and multifamily markets and =*aloe markets where land and community arc the common dermrninatoc or commercial, other stun manufactured hone commudtim When a manufactured home community is situated on valuable land surrounded by more valuable usq it= is an opportunity to sell die land to a developer looking to convert it's use In this seenarici the price for the property will be scotch grater than one paid . by an investor who plans to continue to operate the property u manufactured home community. in addition to private developers, some California cities live recently purchased well, located existing manufactured home communities through condernnation for various City reuse pmjectr.The pries paid for pmlcets in this category also exceeded those paid by the private market According to the California Department. of Housing, more than 600 manufactured home communities live dosed.. since 1981, the ttujority for the purpose of conversias to higher and better use of die land by private and publicdevelopmecht entities institutional partners such as Merrlll • Lynch Hubbard and John Hanoodc properties, as well as private partners. The oompanyk. goal to..structute this planned growth in 1996 is based upon its belief that with the proven results of its portfolio, the strong management skills of its people and the criteria it his established for recognizing value it an realize significant invesunerit yields with a kuge portfolio expansion When compared to RHC Communities' former apartment portfolio as wen as other traditional investment types; manufactured home communities dearly stand out as the highest yield for the lowest risk. .RHC RICHARD HALL • DAVID ROSE 20201 SW. Birch Street Suite 250 Newport Bads Califortiia.92660 phone: 714.224.0222 • pas 714.224.0223 amaik the com ®aolcom DevehAiping md Financing Land -Lease C GEORGE 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, artrac- 'tive manufactured housing products. 1 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. in ,3amurry 1996 • Urban Land 35 Barriers to Overcome The developer's first major challenge . is to fire up farsighted, patient imrestors with deep pock- ets and a high tolerance for risk Allowing ter some leverage, internal rates of return of 25 to 30 percent year are not at all uncommon for newlyy developed manufactured home commura- ties. However; those attractive returns will not be rearved until seven to ten years after can - struction commences. It normally token several years until the rash flow from a newly developed manufac- tured home community turns positive. The de. velopment process for manufactured home communities requires sizable upfront oullays- for example, to acquire the land; install the roadways, sewer fines, and other edrastruc- toe; and build clubhouses, pools, :and other common area facilities. leasing occurs late in the development process. What disfinguishes newly built manufac- tured home communities from other types of real estate development is the prolonged lease- Lip period. The leasing "fillvp of manufactured home communities typically stretches out oar several Years. Prospective manulackdred home community residents usually are wary of being the first ones to move into an unfinished mama factored home community. In a lundamemaly healthy housing market, . developers might ex- pect to lease: about ten homesites a month. H the first phase of an upscale manufactured home communiy, contained 250 to 3gb home- Most land -lease communities are relatively small in size. In midwestern shares, 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 um- overrates 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 36 Urban Land • January 1996 sites, d would take two to dose years to com- plete the lease-up. At that point, only the find Phase Will have been completed and (eased up, and it probably will not generate enough cash flow to yield an attractive return on the cost of coaftcgng common area buildings and facil 'dies. It is usually not umg Phase 11, when the manufactured home community has been caw pleted and leased up (g at all ), that the prn • ect's investors will begin to realize handsome double -digg rates of return.. Sauce:leaurdsawmip. tae&W18eftwN=V ConmwnrylnGrsOy fn1kno sanBeam, arWftrw sib wYork Meml lynra, It Ca, February A. 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 mo popular, they also have become more difficult to oo twin in a timely fashion in some markets. Local re- tailers who have longstanding relations with produc- ers of manufactured housing generally can obtain homes when and where they need them. Most developers avoid designing a new manufac- red home community as a mixture of rental home - es 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 - *ssional property managers is becoming the norm d is a clear indicator of the maturation of the in- dustry. More and more of the Institute of Real Estate Managements 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: Homesile 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 tames from two major wellsprings: yearly adjusbnents in the rents of existing tenants and rent jumps accompanying tenant tumover. The standard homesite lease typically pm- 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 tumover are the second major source of same -store nue growth from existing manufactured ante communities. When "market - clearing" rents rise taster than inflation, many experienced manufactured home community owners are re- Rents credited Community Manager) program 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- tuctant to boost rents in their own properties by proportionate amounts for fear of sparking e tenant revoR But then, in the event of tenant turnover, community owners often make it a practice to adjust honestle rents to recoup any disparities between the current market - clearing rent level and the rents paid by previous teranLs. Many manufactured home community own- ers and operators, however, prefer not to elim- inate these disparities entirely. One veteran op- eratar explained that tie 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 ofaftemative housing costs-apartment rents, sales prices of slle -bralt housing, and homesite rents in competing nearby mamdac- tured home communities -in the local area. Armed with this Information, they try to main- lain 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 homeste ren6, some manu- lectured home community owners regard site- built houses as their main competition, while other owners view nearby apartment complex- es as their primary competitors. soarre: Leonard sahlnws Me Manfxt red Hoaskp tom wwy bdushr foe Amarkaa Dream Re'Fngeuered wew York. Merda.Linch & Co., febmary 6,.1a99. lanu ry 1996 • Urban Land 37 ties was 37.8 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. Ictakes 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 Rgwt, 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 (REM 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. 38 Urban Land • January 1996 As a general Wile, 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).. Anew, 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 wastewatersys- 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- Financing Manufactured Home Communities Manufactured home community developers pay ommercial interest rates, and the bommwed amount..ypicaly 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 tender participation deals are common. The Federal Housing Admirdshra800's IRWs) 2D7W program - though little used- offers a HUD -Bwired source of capital from commercial lenders to finance the construction of new manufactured housing land-lease earn- munities 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 homesiles; in areas where land costs are high loans for up to $18,900 per homeshe are possible. A 2D7W tun can be used as a cmr- sbuction loan and mini -perm, allowing develop- ers to refinance with a new lender once the property isluly 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. WAs 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 homesitesto 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- munitiesare concerned, conservative lenders (such as life insurance companies) peg DSC at 1.25/1 or 1.3/1. Commercial banks and savings and loan insti- ples include California redevelopment agencles' setasides of 20 percent of their annual properly 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- fd low- and moderateyncome 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 moderateincome housing. Saare: UU working paper. `fAawtatWred Housing, An Afiordabie Abemaevo,' 1995. rutions 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. -C- George Allen, a manufactured housing: industry consultant, is founder and omnerof 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 by John Wiley & Sons (available thorough ULI) and the ruproming How to Find, Buy, Manage and Sell a Manufactured Home Community, scheduled for release by John Wiley dr Sons thisyear. January 1996 • Urban Land 39 ASSETS IL M4 'iFi1r;zr � � y r y y f1 r _ MONEY GUIDE The REIT stuff isName Recent Yield price Chateau Properties 221? 7. ROC Communities 24 6. Sun Communities 2614 6. Manufactured Home Communities 181/2 6. United Mobil Homes I P 5. 'Indicated payout for 1996 Nontaxable portion is a return of IBES estimates for 1996. ?Debt outstanding plus market va fashionable as anxthing we can imag- inc. We vxcnt out looking for spmc- one to teach its the business. We found Nathan Bcndcrson, a wealthy 78 -year -old investor in Buthlo.N -Y. Forced to work while harch' in his teens. after his parents had lost all their mono• in the 1929 crash, Ben - derson started out rccscling beer hot - tics. t]icmnnoccd iiito breweries, From breweries he got into developing Of- fice buildings. strip mills and other real estate, along the way accuil laf- ing a fortune likely to he in the nine figures. In today -s lather firm real estate narI( t Bcndcrson sacs that mobile home pities are among the hest buys. Bcndcrson owns six nurlailc home park.. with spaces fin- a comhiincd 4.000 homes. He likes to ovyn hit, one. large enough to justih- a hdl- tinnc nnanagcr on the site He de-c1- ops the sites himself— huv-ing the ]and. getting the zoning perinission and bringing in state-. cicctricin and sevaCc lines. I)oing this work hinnscif he expects will enable hint to clear 30 %a wear on the money he has inx-csted in a park. Passive im-cstors vxho huy parks that are already de'clopcd hawc to settle for smaller returns. closer to 10% a vcar for- an unlerragcd purchase. But that isn't had for- a stream of rental inconnc that can he jaded up to keep pace vyith inflation. Bcndcrson sacs buyers can acquire de 'eloped parks for $72,000 per site. often with attractive financing ]ir the seller. But you nnight he [letter- off pnving all cash and getting a ]letter pate Without a meutgagc, you are Ids likclv to lull afoul of nx law's limiting NN itcofh for so- called passixc iinv:cstmcnts. Here's whit's in the deal for the park owner. The Bark tennt typically sigins a lease for at ]cast one year for 5200 a month. with a 5% annual increase on renecal. The residents hayc to spend 540,000 to $75,000fii u- thehonnc. Hauling it c]sdyhcrc casts another $8.000 or more: so they are loath to more out. Turnover in a typical park is usually nil, against 50% for an aparnncnt complex. If a mobile home owner sells his ]ionic, the net owner automatically assumes the Ieasc Rent control laws are not a problem except in Nev, Jerscx and California. and evcn in "Once the park is full, there isn't much to do, just pick up the monthly check." these states the' arc tolerable because you Can get cost -of- living increases. 1Nexst tenants ne•c- even dreann of skipping a rent pawnnent. If the' do. the lender assunne the honnc and the rent I wmcnts. Nlohilc ]ionic parks require a hit ofnnainte Ili ncc "It only• a [lit: l\losx the lawn. plow sonic snow, maybe do hit of repaving, collect file rent and paw property taxes. --Once the park is full. there isn't pinch to do, just pick up the nnonthlx cheek.'- sacs Bcndcrson Contrast that %with apartnncnt hlllldlings, where landlords are cv- pcecd to yip continuous maintenance on the paint the creators, the Plannhing and vvhatcvet itenns fill onto :un endless list. George Allen. author of the forthcpnning How to Find, BillY. Manage, and Sell a Mann - fgrtarrd Hamr C.onnnunitp (Wild. S75), estimates that owners of apart- ment huildings spend 52% of their rent roll on operating costs. versus 38% for mobile home park owners. Owners of the smallest parks often lire on -site and do all the work them sclycs. An ideal park fora nonresident, says Allen. xxotdd have 20 acres with about 100 dercloped units and an- other 20 acres that could he dcvcl- opcd, bringing the park to a size whet- it can be resold to a bigger- participant. You would pax ]ictwecn $I million and $1.5 million for such an establishment. depending on the rent roll and location. The smallest and crummiest parks can he acquired lirr as little as 55,000 a site. lint there might not he enough rermic to hire a full -time manager. And selling . is a pro]iIcm. It can he tricky to find three invest- menu. A numhet of states have rceu- laton agcncies4iv mohilc ]ionic parks and prin-idc directories of properties on request. Classified ads appear in 7hr Journal: The A4agazim _f n' Maau fartured Hontinr7 Proi`Luionalc(800- 80 -0471. $35 a scat-). George Allen sells a newsletter (317- 888 - 7156. S95 annually)_ Another option. far less lucrative lint a whole lot sinnplcr. is to own shares in one of the tire puhlich trad- cd real estate investment trusts that specialize in mohilc home parks (ser tablt). Look for a yield of 6% or so- with good prospects lifr growth in the payout. As you tan see Foul the etiC- tiwc pc' -site prices —and from yields well hdovr the I 0 %v ou could qt- on a park ovx tied outright thcRlilsfill-cc roe to glee till a nice piece of clnangc to the middlencn. 140 Forbes ■ June 17. 1996 . — Dividend'— funds --Per site— total currently from monthly putter taxable operations' rental portion 1% $1.62 $0.57 $1.79 '$283 $24.200 8 1.64. 0.94 1.96 234 22.700 9 1.82 0.95 2.25 239 23,100 With one of 6 1.22 0.61 1.47 309 27,400 these you 2 0.60 0.51 0.90° 250 17,000 gain liquidity capital that can ultimately give rise to a capital gains tax. Met income plus depreciation; and sacrifice rue of common stock. 'Companyeslwate. . return. � Here's whit's in the deal for the park owner. The Bark tennt typically sigins a lease for at ]cast one year for 5200 a month. with a 5% annual increase on renecal. The residents hayc to spend 540,000 to $75,000fii u- thehonnc. Hauling it c]sdyhcrc casts another $8.000 or more: so they are loath to more out. Turnover in a typical park is usually nil, against 50% for an aparnncnt complex. If a mobile home owner sells his ]ionic, the net owner automatically assumes the Ieasc Rent control laws are not a problem except in Nev, Jerscx and California. and evcn in "Once the park is full, there isn't much to do, just pick up the monthly check." these states the' arc tolerable because you Can get cost -of- living increases. 1Nexst tenants ne•c- even dreann of skipping a rent pawnnent. If the' do. the lender assunne the honnc and the rent I wmcnts. Nlohilc ]ionic parks require a hit ofnnainte Ili ncc "It only• a [lit: l\losx the lawn. plow sonic snow, maybe do hit of repaving, collect file rent and paw property taxes. --Once the park is full. there isn't pinch to do, just pick up the nnonthlx cheek.'- sacs Bcndcrson Contrast that %with apartnncnt hlllldlings, where landlords are cv- pcecd to yip continuous maintenance on the paint the creators, the Plannhing and vvhatcvet itenns fill onto :un endless list. George Allen. author of the forthcpnning How to Find, BillY. Manage, and Sell a Mann - fgrtarrd Hamr C.onnnunitp (Wild. S75), estimates that owners of apart- ment huildings spend 52% of their rent roll on operating costs. versus 38% for mobile home park owners. Owners of the smallest parks often lire on -site and do all the work them sclycs. An ideal park fora nonresident, says Allen. xxotdd have 20 acres with about 100 dercloped units and an- other 20 acres that could he dcvcl- opcd, bringing the park to a size whet- it can be resold to a bigger- participant. You would pax ]ictwecn $I million and $1.5 million for such an establishment. depending on the rent roll and location. The smallest and crummiest parks can he acquired lirr as little as 55,000 a site. lint there might not he enough rermic to hire a full -time manager. And selling . is a pro]iIcm. It can he tricky to find three invest- menu. A numhet of states have rceu- laton agcncies4iv mohilc ]ionic parks and prin-idc directories of properties on request. Classified ads appear in 7hr Journal: The A4agazim _f n' Maau fartured Hontinr7 Proi`Luionalc(800- 80 -0471. $35 a scat-). George Allen sells a newsletter (317- 888 - 7156. S95 annually)_ Another option. far less lucrative lint a whole lot sinnplcr. is to own shares in one of the tire puhlich trad- cd real estate investment trusts that specialize in mohilc home parks (ser tablt). Look for a yield of 6% or so- with good prospects lifr growth in the payout. As you tan see Foul the etiC- tiwc pc' -site prices —and from yields well hdovr the I 0 %v ou could qt- on a park ovx tied outright thcRlilsfill-cc roe to glee till a nice piece of clnangc to the middlencn. 140 Forbes ■ June 17. 1996 . " TWE RECENT Newport beach/ Re4 rt Prepared by developer: Sutherland Talla Hospitality 0 r i K/ / / I I '/ / / ff) WE le? E OiE IV 4 Propoaabto- th&CGty o1C1VP.wport ,6ea 4h- 4500 Campus Drive, Suite 500, Newport Beach, CA 92660; (949) 757 -1662 Fax (949) 660 -1252 TABLE OF CONTENTS Page 3 Preface Page 4 - 8 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/ is` 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 0 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 "ME ECiENT - NEW POR7 BEACH" 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 15° Street to 18t1 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 "77HE E(E ENT "— NFWP01Z7- 13EACf( RESOR7 will have a • definite positive effect on the community and the City of Newport Beach. 3 LJ 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 fmd 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 15th 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. • 4- 0 0 i PQ. 2 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 77(ERE67E UNEWPORT 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 (15 h 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. REQUIRED BY USE A. Hotel B. Meeting & Banquet C. Main Restaurant & Bar D. Speciality Restaurant E. Racquet Club F. Spa 1.56 Guestrooms 78 Spaces 7,600 s.f. 216 Spaces 1,500 net s.f.. 38 Spaces 1,500 net s.f. 38 Spaces 8 Courts 16 Spaces 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'b Street public docking facility is not a part of this proposal. THE PROPOSED LEASE. TERMS & CONDITIONS: TERM: 60 Years PAYMENT DUE: Quarterly in advance 6 E • E • • LEASE AMOUNT: Years one & two $ 800,000.00 Year three $1,200,000.00 Years four — ten $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: GEO -TECH SURVEYS: CONSTRUCTION OF PUBLIC PARK: PLAYGROUND CONSTRUCTION: RELOCATION OF AMERICAN LEGION REDEVELOPMENT OF TENNIS COURTS ALTERNATIVE 1 By Developer By Developer By Developer / Maintenance & Insurance By City By Developer / Maintenance &Insurance By City By Developer, up to $500,000.00 Cost & Expenses By Developer, Insurance Rider by City for Public User's. Developer to pay Annual lease rate of $1.00. Developer to Maintain. 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 7 Pg.5 the existing facility, on the 18'h 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. Stephen R: Principal P • • 9 0 dg ROM JIV Zf fIL WrVrIM4 - 9 xo( 1 P 170 M vw: OP �Aff J ?et ez 92. JaMe. —tan 1. 64,756aif3p 1 N C O R P O R A T E 0 MOTEL • RESORT 'OES1 1+II A UEVF.LOP MEW AMMMI1f '. A rtnvf. • �LT- 4 kwm4 " 1500 CAMPUS OO.• SUITE.. 5 O • Nf 6A°ORT OEACI I. C.A n]nr'I PHONE (940�]57.1nnp • fp Y. (A44) nm.l]SE F ,/ kv. T/\ 1 `O iD 0 V a O 0 12 0 F M es.. � r1 r ,f m PAR,, • BEACH r r �( PARrll lII 1 y0 / :] rr rrl.�l {rr�r�1� uU f� 7��oaa .Sd)dy GFC aCpeT It? A._ F m D: TENNfg COURTS BL VI) W L'S 7' r r R m 0 Area by Use Summary City -owned Property 15th to 58th Street S% Fc Km. Ih. i 55.677 US A erken L.gkn t5R00 AY Alh Sheol Px5 60.616 109 T.rda CDUrb 24.M as Grl 8Cnu1 Haw. a M... ollice WINSO .YS t 0s011 1.27 MarW Park T,. dx Coin SS,921 L26 Pu lc 8..0 G/ N O R T+4 147.080 9.80 Total sc.fc I. = now V.. evNU4. xuvtu ion ...41 of 'w n•m .4.W . e'<aAY. «e.w am Puup. � t_ F 7sTH STREET y _ -- — PARK .� R ", r h F, WE'S'T Co m t 0 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 0 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 BOSOUES 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 Finn 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- 16 0 • 0 Pg.1 oft — Stephaf R. Sutherland Company Press Release i • 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 orjogging. 17 - Atlantic American Sells Embassy To CapStar __ PHILSDELPHL =.— Atlantic American Properties Trust, based here. sold is interest - • in the Embassy Suites Cen- ter City to ZlashinRton. DC- based CapStar Hotel Com- pany. The 238 -suite proper- ty, located in the cit's Mar- ket Stree: West corridor, will unde -zo a S2.6 million renovation. Atian:ic 1-me.-;- can President James Stii; said the hotel was sold because the company is focusing on commercial] and industrial real estate. CapStar, which owns an c, manages 66 hotels, made its 27th acquisition since going public in August oo- with the purchase. The price was not disclosed. CapStar recently completed the $60 million acquisition of two other hotels the Georgetown Inn in Wasi,- ington, DC and the Radis- son Hotel & Suites in Chica- go from Philadelphia -based Amerimar Enterprises and New York -ba n elo, or on & 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 _REAL ESTATE built out by 2004. The firm has several hotel companies as clients, including Patriot American Hospitality, Hyatt Corp., Ritz - Carlton and Eour 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 No mm, 7 -10. 1997 • NO • 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, t1le 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. • • 0 ` . r •+ r , � 'tng ''r ■ � -'' 1.- �i ,; " 'Ci"ia^.� -�, i. '' _'f` . :. +r1`- Y -�„< < � 1i�56�i -` „ � ���.s _fit• �:> • M .{.rile -t �` +� � a� e� ) � ` � � „�� 1 4 " • ., xpansion y = eforma A -P D isenan desarrollo residential que ofrece alta calidad de vida "Club de Golf Bosques es un desarrollo resi- dencial que se caracte- riza por ofrecer a sus residentes un estilo de vida diferente ". p E Coda Inrrc. dlsehadn par The Stephen 5lmllterland Cu. p lirupa PICf7\IM. Ivunta Imo ^- 1.issidenvim dcpnrmmeoudes dv- :Wll metro cuadrndus trm 7luRrtres de csuiciuml- mienta andu una ldns pare Halt;mtes y einvo propins): hodepa. Iavndo de nutas. [res cleva- dores. plan to de luz de enterpuneia,1V por ca- hlr y,iu'wdiw. y helipuertu. La east. Chop. dkefmda par el d,5pachu Fr4.neisni Arai .c, aquilu to . enema can vino eanehm de Ienk. Im, ennehas de paddle teak. alh -rva. restmrnm- G toss lows. v I[a11151us sen'i- Sohn• an J - O rips IR-C Mmiue en Unit ins - lerre- v C tulacifm de primer nice[. nu de 4 • mas El entaruu del delu- de 100 mil mp- • • rrnlln, enu su eanipn Irtrs euadra- '?' do P.If de 0 h4.enn. pa. Jun. sc uljieun� disroioi y ronstruyoi 19 torres redden- .Inch\'i( k 14. nit f/esipn.nsf eiales que ofrettn �' eumu lus andadurva pars la pnAtilidad de nit. es. A ju�%np •r hieicletas. intcggra Lila du vida pun calidad. nt c1ciuvolus que permitirtin at Ins rani -. que el deaureollo 1 ntcjra Ins masavnuzudos deolcsdeClub de Gulf Basques aptener uni nistemnn de.WgUridad.;aunatlasit unn gmun estila de ride eon elecmin calidad. dentrrn egr[usividud. eon tudas lus satisfaeriunes de on nnihiente que lus pandrd en ennlae -• que la cido,mudernu requlrre- to pernwnrnu• run lu nutnrulezu. 19 NEWS FOR IMMEDIATE RELEASE CONTACT: Brian Theriot Vice President, Client Relations (949) 757 -1662 SRSC TO DESIGNHILTONHOTELS "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. 0 -END- - 2 0 ORANGE Cot n Busms o L Dur211 "Anniversary year JULY 13 - 19 1998 $1.50 Construction near the Disneyland Hotel The Mouse Has Coattails Disneyland Expansion Fuels $4 Billion Entertainment Explosion ■ By SUSAN DEEMER I and trade show bookings through 2008. Anaheim and sur- rounding cities are building about a dozen new hotels in a It hasn't been a small world for a long time, and it's about to market where room rates have risen about 10% over the past get a lot bigger. As the 21st century approaches, an ■ Qaiksilver ambitious series of construction projects Moving are transforming the area around Page 11 Disneyland from a major but creaky tour- ist district into a stale -of -the -art entertainment metropolis. Disneyland's Califomia 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 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 designingthe 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 Gtupo 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 New ch, CA 92660 PH: (949) 757 -1662; FAX: (949)2; e-mail; SLS1nC C1;conientrlc.112i 9 -W, P,; 'q SAO ow N AN4 pw w7w& CA Oil 0 • ! 7C �- LOS COW . M1)rbndrnu /C�rrf/xnlq .I NC 0 R P 0 R A: E'D ..�,.. ...... iii. ° r lei J THE 1999 COLLECTION AIX% Casa del Mar Golf Resort & Spa Los Cabos, Baia California Sur, Mexico r Casa del Mar Golf Resort & Spa Los Cabos, Baia California Sur, Mexico 0 FOR IMMEDIATE RELEASE FOR MORE INFORMATION: Brian K. Theriot Vice President, Client Relations (949) 757 -1662 CARLSON HOSPITALTI'Y WORLDWIDE & CARLSON LIFESTYLE LIVIN G SELECTS STEPHEN R. SUTHERLAND COMPANY AS DESIGNERS FOR CARLSON PARK "LIFESTYLE COMMUNUIES 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 tum -key construction management company located in Newport Beach, California. SRSC specializes is services to the hotel & resort industry. 27 -END- # IIee sm> ti � �1. gn �LL-,1J 9 Pt IT rl.il •• r rl °'"T;�''l7jlll.. ►�k }I i.t trn nn:t7r>IV lie Jot } jR' 'r it n ; mom xlan:w a I ` Ir ij ®!Al Ir. 4^ IF 4r s e _ - •Ir" 71 rr r Y` z , lI.ei�,�;� �Ir +o • FOR IMMEDIATE RELEASE 0 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.andbefitting 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." - q I I I I I* r,4 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. NNE, '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- - 31 0 0 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.. ID • 32 MIN THE SPORT S CLUB /IRVINE "Simply the finest sports and fitness complex in the World. " 130, 000 sq. R Sports and Fitness Facility • Sister Club to The Sports ClubAA and Reebok Sports Oub /NY • 14.000 sq. ft. state -of- the -art Coed Weight Training Gym • Two 2, 500 sq. R. Exercise Class Studios • 25 yard Outdoor Pool for lap swimming • Cardiovascular Deck — 5, 000 sq. h. of computerized training equipment • Two full court regulation- size Basketball and Volleyball Gymnasiums • Spin • Private Training • Treadwa0 Rock Climbing Simulator 35 • Racquet Sports: I 2 Regulation Racquetball Courts 4 International Squash Cam 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 Tie • Yoga • Sports Bar & Grill • Sidewalk Cafe • Conference Roans • SpornMedArvine - Physical Therapy and Wd Iness 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 • 0 Reebok SPORTS CLUB /NY in • 140,000 sq. R. Sports and Fitness complex • Sister Club to The . Two regulatiorrsize • Spacious Outdoor Sports Club /L9 and full court Basketball Sundeck with The Spores 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 64ap to • Nutritional Counseling/ Cardiovascular Center the mile Running Registered Dietician • Two 2500 sq. ft Track • Martial Arts and Self Exercise Class Studios • 40' Rock Climbing Wall Defense Classes • Cycle Reebok* Core Training - Dilates •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 160 Columbus Ate. Towels provided "Simply • Sidewalk Cafe New York, NY 10023 the finest sports and " • ConferencelMeeting/ (212) 362 6800 fitness complex in the world. Banquet Facilities in T FI E "Simply the finest sports and fitness complex in the World. " S P C L U B/ L A • • 100, 000 sq. ft. Sports • Cycling Studio with 50 • The Club Grill Restaurant and Fitness Facility Cycles • The Sidewalk Cafe • Sister Club to Reebok • Racquet Sports.' • Conference Room/ Sports Club /NY, The 3 Racquetball Courts Banquet Facilities Sports ClubAas Vegas 2 Squash Courts • SportsMed4A and The Sports 5 Outdoor Paddle - Physical Therapy and Club /Irvine Tennis Courts Wellness Center • State-of-the-art • Michaeljohn Nair Salon • Spacious Outdoor 12, 000 sq. ft. • Oasis Massage & Sundeck Weight Training Gym Skin Care • Events Director • Advanced Freeweight • Complete Spa Facilities • Sports Coordinator Area for men and women • Nutritional Counseling/ • Two 2, 500 sq. ft. including Steams, Registered Dietician Aerobics Studios Saunas and Jacuzzis • 'The Kids Club "Childcare • Junior Olympic • Martial Arts,,Self Defense Center for children Swimming Pool with Classes ages 6 mos. to 12 yrs 8 individual lap lanes • Executive Boxing. • Players Nigh Fashion • .Cardiovascular Deck Workout Athletic Wear with over 150 pieces of • Private Training • Shoeshine Service computerized cardio- • Lessons - Racquet • Car Washing and vascular equipment Sports, Swimming Detailing • Full court Basketball and Golf • Valet Parking and Volleyball • Yoga 1835 Sepulveda Blvd. Gymnasium • Large Luxurious Los les, CA 90025 • Rock Gin-bing Treadwa6 7 Locker Rooms with 310A431447 • Rooftori Dnvinq Range Towels Provided 0 "Simply the finest sports and fitness complex in Nevada." 0 2100 Olympic Avenue Henderson, NV 89014 (702) 454-6000 -Sister Club to The Sports Club/LA, The Sports ClubArvine 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 • Racquet Sports - 3 Racquetball Courts, 4 Squash Courts -Cycle Reebok® -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 rMA(�Es OF RE(�ENr HOTELS FiROM MOROUND 7WE wo2LD 0 preced ecL w �dv a.letter fro-rvv the- Pred,6d�" of I2eW -*l t f nterna tfom.az YoteLk to- the/ Mayor of Newport l3eaciv 0 39 REGENT INTERNATIONAL HOTELS ICI. �. •�,�,,, , 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 fytn;e you have any questions, please feel free to contact me at my office in Minneapdjls. /We look forward to Regent joining your community. WatdHan�ley 1 4— 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 CAI:LSON N.}gt;W q,; P -0. ❑o.\ 57119. MINNE- 0- 01.1.1. MINNr *N TA. t'.4% .i5•I.i 7 -it_nl 'I ..I I..: IG 1'1) 2 1:'. -3301 1': }\: ;Lt31 2I: - :1:1 SII IN'r r it NI:'I': Phn ulr, uerc:.`i l h.. t. I...I 40 M �� s. F.. t r: n S ;r 4 i _ Avm OWN JIM Y x.. Jr ,.,., -4 a � i Yi4 r: p � i af f tK, IL Amp IRV AT,` • 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. 0 45 Consolidated Balance Sheets December 31. 1997 and 1993 The Sports Club Company, hic. (in thousands. except share ranowrts) ASSETS 0 -- 46 1997 1998 Current assets: Cash and cash equivalents .............................................................. ............................... $ 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 Other current assets ........................................................................ ............................... 354 569 Due from affiliates ......................................................................... ............................... 106 234 Total current assets ................................................................ ............................... 4,926 7,043 Property and 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 $163757 LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Current installments of notes payable and capitalized lease obligations ....................... $ 2,975 $ 7,746 Notespayable to bank .................................................................... ............................... 5,000 Accountspayable ........................................................................... ............................... 948 2,273 Accrued liabilities .......................................................................... ............................... 7,985 6,227 Deferred membership revenues ...................................................... ............................... 9,936 9,953 Total current liabilities .......................................................... ............................... 26,844 26,199 Notes payable and capitalized lease obligations, less current instal lments ......................... 42,823 18,755 Notespayable to bank .......................................................................... ............................... 10,940 Deferred lease obligations ................................................................... ............................... 2,817 2,724 Minorityinterest .................................................................................. ............................... 600 600 Total liabilities .............................................. ............................... ......................... 73,084 59,218 Stockholders' equity: Preferred stock, $.01 par value, 1,000,000 shares authorized; no shares issuedor outstanding .................. :.............................................................................. Common stock, S.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 Additional paid -in capit al ............................................................... ............................... 53,613 102,361 Retainedeamings ........................................................................... ............................... 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. 0 -- 46 02/01/2000 16:14 7146339217 BuM IHAM CAPITAL MABICF.T 7 February 1, 2000 i'I,,l FACS'IA3fiE. (94 9) 660.1252 Mr. Stephen R. Sutherland SUTHERLAND -TALLA HOSPITALITY 4500 Campus Drive, Suite 500 Newport Beach, CA 92660 Ref The Regent Newport Beach Dear Steve: PAGE 01 2 Paa,F Plau, Suite 700 hvine, CA 92614 -8517 .Direst R3 d, 949.2S2.4519 iav 949.833.921.7 aarholas@h"r"ha -n ealestste. tom 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 "Burnham" has successfully arranged $50.8MM in construction/rAw -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 would 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 look forward to working with you to secure financing for your hotel project. Very truly yours, Barry J. Nicholas, Jr. Investment Officer Transattinn services I Aim Services I Advisory Be Consulting, sarviees I Development Services I Cerporata Services I capital Markets Member Commercial Capital Alliance (t `it. A %) 0 i 0 Barry J. Nicholas. Jr. NEWS RELEASE BURNHIW CAI TALMARKE71 4A•I : jt 4"q lV M,.br Cay..W Capiul Alliance ++A,4,A11,umFmn +ed, war.•.m 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. BURNHAM CAPITAL MARKETS Burnham is a 109- year -old real estate services firm with headquarters in San Diego, and offices in Orange County and the Inland Empire. The 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 if 4 L11 Stephen R. Sutherland Company, Inc. ARCHITECTURE • ENGINEERING • CONSTRUCTION MANAGEMENT f ZE(�EN r September 7,1999 NEWPORT 13EACH RESO 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 0 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 ............................................... ............................... $ 1,200,000.00 e. Relocation cost (American Legion Post) ........ ............................... $ 500,000.00 f. Professional &Consulting Fee's ( EST) ........... ..............................$ 1,000,000.00 0 TOTAL .................................................. ............................... $29,685,980.00. 4500 Campus Drive, Suite 500, Newport Beach, CA 92660; Tel: (949) 757 -1662; Fax: (949) 660 -1252 47 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 - • E Ll PROJECTED REVENUE TO THE CITY OF NEWPORT BEACH • YEAR / GUESTROOM REVENUE / TOT (9 %) /GROSS FOOD & BEVERAGE ITAX 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. �J - 49 PROJECTED INCOME FROM OPERATIONS 0 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. i 50 • "TfE RE(. ENV' • Newport3each/Rw -rt PROJECTED INCOME FROM OPERATIONS YEAR 1 REVENUE FROM GUESTROOMS 110 Junior Suites x Average Daily Rate $325.00 x 365 Days x 70 %= $ 9,134,125.00 40 Double Queens x Average Daily Rate $325.00 x 365 Days x 70% _ $ 3,321,500.00 6 Full Suites x Average Daily Rate $425.00 x 365 Days x 70 %= $ 651,525.00 2 Vintage Yachts x Average Daily Rate $925.00 x 365 Days x 60 %= $ 472,675.00 SUB -TOTAL GUESTROOM REVENUE $13,579,825.00 PROJECTED REVENUE FROM MARINA 10 Yachts In Transit x Average Rate $225.00 x 365 Days x 50 %= $ 410,625.00 SUB -TOTAL MARINA REVENUE $ 410,625.00 PROJECTED REVENUE FROM FOOD & BEVERAGE 51 Pg.2 • Main Restaurant $1,800,000.00 Speciality Restaurant $1,314,000.00 Room Service $ 500,000.00 Meetings & Banquets $ 500,000.00 Weddings & Events $ 500,000.00 SUB -TOTAL REVENUE FOOD & BEVERAGE $4,614 000. PROJECTED REVENUE FROM SPA $1,000,000.00 TOTAL PROJECTED REVENUE FROM OPERATIONS $19,604,450.00 * Food & Beverage revenue projections are an estimate from the resorts proposed operator. 11 -- 52 0 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% _ 40 Double Queens x Average Daily Rate $341. x 365 Days x 71% _ 6 Full Suites x Average Daily Rate $446. x 365 Days x 71 %= 2 Vintage Yachts x Average Daily Rate $971. x 365 Days x 61% _ 10 Yachts In Transit x Average Daily Rate $236. x 365 Days x 51 %= Sub -total guestroom sales Revenue from Food & Beverage Revenue from Spa Total Revenue r -- 53 - $ 9,720,716. $ 3,534,806. $ 693,485. $ 432,386. $ 439.314. $14,820,707. $ 49844,700. $ 1,050,000. $20,715,4 07. 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% _ $10,349,064. 40 Double Queens x Average Daily Rate $358. x 365 Days x 72% _ $ 3,763,296. 6 Full Suites x Average Daily Rate $468. x 365 Days x 72% _ $ 737,942. 2 Vintage Yachts x Average Daily Rate $1,019. x 365 Days x 62 % = $ 461,199. 10 Yachts In Transit x Average Daily Rate $247. x 365 Days x 52% _ $ 468,806. Sub -total guestroom sales $15,780.307. Revenue from Food & Beverage $ 5,086,96 Revenue from Spa $ 1,102,500. Total Revenue $21,969,742. CJ 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 4 110 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 0 55 $10,991,062 $ 3,996,750. $ 784,961. $ 491,633. $ 501,035. $16,765,441. $ 5,341,281. $ 1,157,625. $23,264,347 PROJECTED INCOME FROM OPERATIONS 0 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 $ 5t608t3Ib Revenue from Spa $ 1,215,506 Total Revenue $29,681,680. is 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 %= 40 Double Queens x Average Daily Rate $414. x 365 Days x 75% _ 6 Full Suites x Average Daily Rate $540. x 365 Days x 75% _ 2 Vintage Yachts x Average Daily Rate $1,178. x 365 Days x 65 %= 10 Yachts In Transit x Average Daily Rate $285. x 365 Days x 55% _ Sub -total guestroom sales Revenue from Food & Beverage Revenue from Spa Total Revenue 0 57 $12,466,575. $ 4,533,300. $ 886,950. $ 558,961. $ 572,137. $18,997923. $ 5,888,762. $ 1,276,281. $26,162,966. PROJECTED INCOME FROM OPERATIONS n LJ 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 7 110 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% _ $ 595,504. 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 $ 6,183,26 Revenue from Spa $ 1,340,095. Total Revenue $27,717,255. 0 • 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% _ 40 Double Queens x Average Daily Rate $456. x 365 Days x 77% _ 6 Full Suites x Average Daily Rate $595. x 365 Days x 77% _ 2 VIntage Yachts x Average Daily Rate $1,297. x 365 Days x 67% _ 10 Yachts In Transit x Average Daily Rate $314. x 365 Days x 57% _ Sub -total guestroom sales Revenue from Food & Beverage Revenue from Spa Total Revenue I] 59 $14,097,468. $ 5,126,352. $ 1,003,348. $ 634,362. $ 882.497. $21,744,027. $ 6,492,360. $ 1,407,099. $29,643,486. PROJECTED INCOME FROM OPERATIONS L� 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% _ $14,969,526. 40 Double Queens x Average Daily Rate $478. x 365 Days x 78% = $ 5,443,464. 6 Full Suites x Average Daily Rate $625. x 365 Days x 78% _ $ 1,067,625. 2 Vintage Yachts x Average Daily Rate $1,362. x 365 Days x 68% _ $ 676,096. 10 Yachts In Transit x Average Daily Rate $330. x 365 Days x 58% _ $ 678,610. Sub -total guestroom sales $22,855,321. Revenue from Food & Beverage $ 6,816,94, Revenue from Spa $ 1,477,453. Total Revenue $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% = 40 Double Queens x Average Daily Rate $500. x 365 Days x 78 % = 6 Full Suites x Average Daily Rate $650. x 365 Days x 78 %a= 2 Vintage Yachts x Average Daily Rate $1,430. x 365 Days x 68% = 10 Yachts In Transit x Average Daily Rate $345. x 365 Days x 58 %0 = Sub -total guestroom sales • Revenue from Food & Beverage Revenue from Spa Total Revenue E 61 $15,658,500. $ 5,694,000. $ 1,110,330. $ 709,852. $ 730,365. $23,903,047. $ 7,1579826. $ 051,325. $32,612,198. 014 1:10 ID Task Name Duration Year I Year 2 —� �01 �stQus Ye I st lstQuarter 2nd Quarter T5id —Quarter 2nd Quarter I 3rd Quarter 4th under I 1 Pre-development Planning Design Development Financing Environmental Review Entitlement Coastal Commission Permit Processing Construction aw 12w 20w 26w 26w 24w aw sow 2 3 4 5 r Project: Projectl Date: Mon 1/24100 Task Summary ^ Rolled Up Progress Progress Rolled Up Task Milestone Rolled Up Milestone 0 Page I L-1 E 0 Quarter I Quarter 2 ID Task Name Duration Month I Month 2 1 ioZr 1 Month 4 month 5 1 month 6 1 Month 7 I Pre - development Planning Design Development Financing Environmental Review Entitlement Coastal Commission Permit Processing Construction 8w 112w 20w 26W 26W 24w Ow 50w 2 3 4 5 6 7 8 Task Summary ^ Rolled Up Progress Project: Projecti Progress Rolled Up Task Date: Mon 1124/00 Milestone Rolled Up Milestone Page 1 Quarter 3 Quarter 4 Quarters F- Quarter 6 -[--: Month 8 Month 10 Month I I Mw:�lhI2 Month Month 14 —F Month 15 onth 16 —Month 17 NOW Task summary ^ Rolled Up Progress Project: Projecti Date: Man V24100 Progress Rolled Up Task Milestone Rolled Up Milestone 0 Page 2 • 0 • r1 r, -I Quarter 7 Q a "Onlor: Month 18 Month 19 Month 20 1 Month 21 Month 22 Month 23 Month 24 Month 5 Moth 2 Month 27 Task Summary Rolled Up Progress Project: Projectl Progress Rolled Up Task Date: Mon 1124100 Milestone ♦ Rolled Up Milestone Page 3 F Quarter 10 Quarter 11 Quarter 12 Month 28 Month 29 Month 30 Month 31 Month 32 Month 33 Month 34 Month 35 Month 36 Month 37 Task ",:- i;�,`�a' Summary ^ Rolled Up Progress Project: Projeod Progress Rolled Up Task Date: Mon 124100 Milestone t� Rolled Up Milestone Q Page 4 0 LJ L J • CONSULTANT TEAM Land / Site Planning Stephen R. Sutherland Company, Inc. • Please refer to Basic Qualification section on pages 14 & 15 for project list and references Architecture Stephen R. Sutherland Company, Inc. Interior Design Stephen R. Sutherland Company, Inc. Landscape Architecture George Girvin & Associates Ref: Cabo del Sol Client: Koll Company Traffic Engineer WPA Traffic Engineering, Inc. Ref: Balboa Bay Club Client: International Bay Clubs ® Food & Beverage Consultant The Nyman Group Ref: Carlson Park -San Antonio Client: Carlson Hotels Worldwide • Hotel Development Consultant Regent International Hotels Ref: Development of Regent Hotels Hotel Management Regent International Hotels Ref: Management of Regent Hotels R7 0 • Sutherland Talla Hospitality Copyright 2000 All rights reserved 4500 Campus Dr., Suite 500, Newport Beach, California 92660 . • � S' � is �.. e - a''s v oil ME ,J •i f V � r f..� /► fI_�I ►��f -- - . "" _ .iii ^��`• �. 1 1 • 1 1 t 11 Z 1 111 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 is 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 $4,135,006 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: • ETWI-91111F.VaNWOUT1 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. P 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 18'' 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 18`' Street, or to a portion of the American Legion pTkerty. 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. 1] At the foot of I 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. rd 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. • 5 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 Ah 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 Michael Gelfan President Terra Vista Management 7 • 0 Marina Park City of Newport Beach Request for Proposals Submittal Addendum i 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 5'h 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 N Corporate Offices San Diego 2727 De Anza Rd San Diego, CA 92109 Los Angeles 6310 San Vicente Suite 560 Los Angeles, CA 90048 • 0 • 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 E 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: Funding Amount: Funding Date: De Anza Moon Valley Lender: Funding Amount: Funding Date: Tahoe Shores Prudential Insurance Company of America $25,750,000 August 1997 Anchor National Life Insurance $ 6,600,000 July 1997 Lender: Anchor National Life Insurance Funding Amount: $ 4,135,000 Funding Date: August 1997 10 1] • 0 is • Marina Park City of Newport Beach Request for Proposals Submittal Addendum 4 Banking 11 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, aLet--" o-Lti -Lcjx Alan J. Twedt Vice President 0 MARINA PARK VILLAGE COMMUNITY UTILIZATION PLAN PREPARED BY: r� 4 CC ., 3.. ,, ter,,., i;. -: '.,,.'lI. ._ �. �.; ^': _.- ...< -,•. ..:•'.� � a.. a--a - ��' -/ a r.' _ •r.. `�. E) � n 'f 7TT1I! "S71 Al ']' p !1 I S. ffi 14117 ULM go, Inl I��I I��I 3`4.7 V'�Litr -' vi�J ;1�[��ig7li.(Uiy['!(T�I ;jtlj g��iiA"n n n ■■ n u �If a fi!au�.g�'�� ��ll, ins nnn_n r�n.ncin.n0 1 A • ' 1 ' 11111 '�� 0 MARINA PARK VILLAGE 'OMMUNITY UTILIZATION PLAN INSTALL 6 -NEW HOMES 12 -TOTAL MARINA PARK VILLAGE COMMUNITY III L; A IO\ PLAN • Pi • RELOCATE TENNIS COURTS 0 - PROVIDE ACCESS TO RESTROOM /SHOWER FACILITY - NORTH /SOUTH ORIENTATION FOR COURTS I� 8) L I nwip �o �, i :�. i � .11h,. F3 v PLANT FLOWERING VINES FOR LANDSCAPE SCREENING AT TENNIS COURT FRONT -SIDE s 4 TRELLIS AWNING 0 ENHANCE EXISTING HOMES PROVIDE DOOR AND WINDOW TREATMENTS - AWNINGS, PLANTER BOXES AND POT SHELVES COMMUNITY UTILIZATION PLAN* 11 WIDEN BEACH ACCESS POINTS P5omowo-(K 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 VILLAGE COMMUNITY COLORFUL FLAGS FOR VERTICAL IDENTIFICATION REBAR METAL ARBOR WITH FLOWERING VINE! CONCRETE CAST4 -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 COMMUNITY UTILIZATION PLAN a �. 3G2. :3 ©��,'`��� ®� �� \\ ��\��«������ now ih • PROVIDE BEACH ACCESS AND PARKING SIGNAGE MARINA PARK VILLAGE COMMUNITY 1 U I II /•\ IO\ PLAN U Q y OA V PROVIDE BEACH ACCESS AND PARKING SIGNAGE MARINA PARK VILLAGE COMMUNITY 1 U I II /•\ IO\ PLAN • RENOVATE AND ENLARGE EXISTING RESTROOM FACILITY (ONE -HALF PUBLIC USE & ONE -HALF PRIVATE USE) MARINA PARK VILLAGE *COMMUNITY UTILIZATION PLAN m, a PROVIDE SIGNAGE AND AREA FOR NON - MOTORIZED HAND LAUNCH MARINA PARK' VILLAGE Footnoles DESCRIPTION I Total lacome 2 lhanc OMcc E:ipc+asc 2 Manager Expense Total Eapensm Adde..dum 6 Alternative 1 Year Year Year3 Year4 Yctr5 Year Ycar7 Year Year Year 10 1.299.656 1.325.649 1.352.162 1.070.845 1.379.2115 1,114.107 1.406.789 I A34.925 (24.000) 1.461623 1.492.896 1.5 21_.754 (35,978) 1.553.209 (170.950) (174.369) (177.857) 0 (181.414) 0 (135,042) (188.743) 0 (192.513) (.196.368) (200.295) 0 (204,301) .(99.443) (1111.432) (103.460) (5.476) (105.529) (5.697) (107.640) 1709.793) (1.11.989) (114.228) (116.513) (118.843) (270.393) (275.801) (231.317) (286.943) (292.682) (298.536) (31N.506) (3.10.596) (316.808) (323.145) Cash now Subtotal 1,029.363 1.049.848 1.070.845 1.092.262 1,114.107 1.136.339 1.159.117 1.182.300 1.205.946 1.230.064 Capital lutprovcldents (24.000) (24.480) (24.970) (25.469) (35,978) (26.498) (27.028) (27.568) (28.120) (28,682) Interest 0 0 0 0 0 Principal 0 0 0 0 0 CapitaVUtility Imprmctnerrl Rome (5163) (5.368) (5.476) (5.585) (5.697) (5:811) (5:927) (6.045) (6.166) (6:290) Base Rail to City I.MI0.000 1020.000 1.040,400 1061.208 1.082.432 1.104.081 1,126.162 1.148.686 1.171.659 1,1.95.093 3 Resales %to City 58.000 43.840 29.131 22.285 22.731 23.186 23.649 24,122 24.605 25.097 Total Rail to City 1.058.000 1.062,840 1.069.5311 1.083,493 1.105.163 1.127.267 1.149.812. 1.172.808 1.196;264 1.220.190 Footnotes, 1 Year One Monthly Roannl Rates: Walcrrronl- 52,300 /Wuferview 51:.800 /Tauiis Vipv 51.600. Rags arc adjusle d by CPI each yeay. assumed tubc2% for this pro romoa. 2 Based upon historical operations or Marina Park as appr pr ale. and Bayside Village as appr priatc. Adjusted by CPI. each year, assumd to be 2% for Phis pro romia. 3 51.000,000 ninimum plus CPI each year. assuntd to be 2 %. or 75 %orTutal hlcranc, whiehw r is greater. 1of12 • • • • Altdl& 1 • DIESI' RIP 1104 rl,wri,n GtnF, PUenlial Ran. I!eNJxn uIpaM R. R&,.e 1. VM.M'i1T IF Tmml Allnnm 112!1111 kmpbjeel int n Free Rml L.110.1 Na RIIIabk Rm. `01;1x11 Oanerl Ca Rm1 9 C.h R.A Canlnadms II C.h RmlA Cne.s !. DRneili Fatane l I`u BA Me; AbeeOaS n Emp4 et Rm. 1. TaS.Rellol l.ne• I: ^x.1111,1 PASII1TICb.n VnR I. GmE R a Renr Bi.MssA Rmlm .. flataba Rmlal livwne 11 ClIXb.nerw1 S,R 'l. Con F, Saks VNG Salespessm Sphne, n. Saiapmm cmeni..1. n In,.,— Ad %evtw11 R Mee SAS Erpmse IF FWillpb rmi .I Taal lmmlan SAS 0 Resale Canmissbm R SAF,enon.SaWkS n $akF,I eanmissitlb 11 Reek Adi, .WnR u gMSab Erpmse u Tmel Resate.rr%np G TIFACmm Sala R.A. 0 Vmfine 1. 4el tNTi:1a911N 91111 To.. VJnnInS I Melt ..r.a NeupPn Saebaya OF% treeee,l In(VIIe R Ribeelln. In,F,rnv IfiR Taa. O.IRr bwnle !J41 ToW Ilxvne 1!99,654 O.W. SNnI.ARY -YEAR ONE uDNE Gi 1'R'E F%PENSl; S(lINIARY A(CI DDS('KWI WIN I"A"ln 511ea1`1 Le.n leas 1`1x1 aln,n]I Amfil far 2,511. !111,111,1 Aaalmin,Sweet uP J,,.7 !xb4g1 INM1a PINasive I Fns :,Jml 110,42 1 l'anPmer SIPNM rairl 5111.8121 R,cimAN.,te li L.110.1 Me "MI Nsplga nneel I pm,0111 1.5921 alr"XW1 Icrislm%v Cmlsibu.iae n 5117 11 p. Cary. Telehone F\peme 1115 5117:,121 OnA111aN,MdI DUR 11 NPaCI ('ap. O.Tee Erpmse I`u T1val W ,heel Fees 4).4r] J. 1101!I Insl11'.InN "A', 5.121111 , \bsabal Anunae yeses 11 5199,11 NIrns1- LMc11n1 !t !. •p1.1 Pr, ? tar. Jl vs•1 Sl tlm!t Tm,O :,Jml 5151x1:1 Erse E.rpele, -NDDR 0 !IN1,21 \I'JmLfTml l''RS -,a I.W. 6411711 51719121 Tines i lkrrtn i enn 51e1x1!i Tma. 011nr[ peme .17A ""121 u9 Taaq.alle Olfue Erpmse _ MWO HO[ Imvn.. C.h u Rae Ra11 -(101 of Nbnlmll ..1xa1J""1 2 of 12 DI:SCRII.IR)S Ruinlim VAll'SJINrx 11 ataimmane Uhllm 11;ax1 Pant SA., its n RkA Nananm. Salvia 1.3 "1 u I NIT A. wn t 1'11np Sal Tman SabiXS ",4ry Pasrvll lazes :"v1, G., nit.. I,.rrol W1r6ees, C—P Insllmnce u9 0119, IMP RaijIM rrP. 1. 411 R rhn Cmlribu.iom _ Teat Pmroll Taus Aunmeei,e 0115 Wr1e S1 lies Eaahnrin, ❑Iln) GMIle,ine ( ,n ws 11 PAP." R amen C,neb Erpane R Rmirs S N Airmen 1,e VNG Plumbing Rryails 11 Povl NUN. C. n I'M R,A. U Trial RNVns A S,Vplia SJ.In" T[lerlx,le C,mnnW. iIFn 1.4u D1ks A Slbarrpllima 2!11 OIFeeI ,,,IeS Relate S:Y1 ]Iinelli. E,c,se n Tlaininp R Seninln n Taal OR Erpmse 5,95) Tmni RAalae 14511 Allientsi !iR Tares A lkmes I.rq TaI llek, Erpmse t,JRI Fkark R,axl Reimbu.vlM rie 11 Ekm147 .116ro.a1 R!.xi Gas 12.uli RmInk,ur,erl Gas 11 Gas S&IM21 12.4811 Warr 11 Snn 11 Taal UP44wF 117811 To.. Meni mElpeme 99.441 LL 1&. Add, , 6 Alternative 1 INCOME. SC I IEDVLE DIfSCRIPTION )AN FEB 11AR APit MAY 3L'N JUL At SVP fx1 SOY DFC TOTAL "1OIAL L'NITS -- - - - - - 58 TOTAL SQUARE FEF. T -� MARKE IAENI 114.000 114.000 II4.M9) II49Kq IIJ.(". 161.wr 11490) 111.99) IlkgXl II4.Rm 114390 II4I9m 1.1633p0 IRFNT PER S.F.I 0.00 0A0 OW OAD O.W 0(9) 0,00 UJ* O.W NKr 0100 0.00 0.00 0 LEASE GAIN (LOSS) RENT POTENTIAL 14.000 II4.0W II4.IKX) 114.(K.0 14.1tNr 114.1X4 IIJ.fAV IIJ.R9) 114.1X+0 111tM1 14.Ro IFIXO9 1368JAr0 (REST PER S.F.1 0.D0 0.00 0.00 0.0) 0.00 0.00 O.Iq O.m' 000 0.00 0.00 ODD 0.00 VACANCIES S( UNITS, 0 0 0 0 0 0 0 0 0 u 0 0 VACANCIFS(PERCF.NI'1 0.0". O.M+ OAP. 0.1p. O.W. OJP. 0.0"9 O.r. (.iP. O.M. O.V. OA'. VACANCIES LAXIOL'NI) 0 0 0 0 0 0 0 D 0 I. 0 0. 0 TENANT ALLOWANCES (6.000) 16AW) (6.( +9)1 120011 164X4) 16.(4) 16.000) (6.0001 (6.MX)I 160A1 16,00fn 1007) 11739X11 EAIP1.01 EE LODGING 0 0 AIODEL:.OFFICE 0 FREE RENT IOS.UOD 105.000 108.000 HUM 108.1X10 109.000 108.000 1(H.M91 I@8.W0 I09.M9r 1080M) 108.000 1.'.96.000 0 DEPOSITS FORFEITED HAD DEBISAIOVF. OUTS 0 EMPL01 "EE RENT 0 NET RENTAL INCOME 108.000 108AW 108340 I08J9X) I(.S,MA IUR.(w I{B!100 108.000 IOS.(Kq H41" 108.000 Hq.MIO 1?96.M4 ECONOMICOCCUPANCV 0. NI.,kel Rem) 94.7. 9J.7 °. 94.7 °. 94.7 °. 94.7 °. 94.r. 94.r. 94.79. 94] °s 94.r. W.P. 94.r. 94.r. ECONOMIC OCCUPANCY P. Rem Pnentia0 94.7 °e 94.7 °. 94.7. 94.7•. W] °. 94.70 W] °: 94.7 "a 94.r. 94:7. 94.7.. W.r. 94,1 ". PASSTHROL'GH INCOME 1 Emimme 0 TOTAL PASSTHROL'GH INCOME 0 0 0 0 0 0 0 0 0 0 0 0 0 GARAGE RENTAL INCOME 0 Garape5 Remal wcu0mcy D Rem per unit I EAimamd iarome 0 0 0 0 0 0 0 0 0 0 0 0 0 TOTAL GARAGE RENTAL INCOME 0 0 0 0 0. 0 0 0 0 0 0 0 0 BILLBOARD RENTAL INCOME 1 0 TOTAL BILLBOARD RENTAL INCOME 0 0 0 0 0 0 0 0 0 0 0 0 0 NEWPORT SURCHARGE 1 W.W Tee 58 58 58 58 58 58 50 58 58 58 50 53 6% TOTAL NEWPORT SURCHARGE 58 58 58 58 58 50 50 58 58 58 53 58 696 OWNED MACH RENT 30f 12 E 0 Adde 0 A. .. e 1 INCOSIE SCIIED1 LE DESCRIPTION JAN FIiD \IAR APR Y6YV JCN ICI. AL'G SIP f%'T NOV DEC TOTAL I Wow Space 0 1 Income Space 0 TO TAI. OA NED COACI I REN T U 0 U U U 0 0 U 0 0 0 U 0 COACII RF.N LM. COS I $ I 0 0 0 � 0 i 0 6 0 7 0 8 0 9 0 10 0 11 0 0 13 0 14 0 98 Miscellaneous 0 TOTAL COACI I RENTAL COSTS 0 0 U 0 U U 0 U 0 0 U 0 0 VENDING INCOME 3 Scda machine 100 100 100 100 400 TOTAL VENDING INCOME. 100 0 0 1U0 0 0 100 0 0 11M 0 0 um LAUNDRY INCOME' ' Evimale 58 58 58 58 53 58 58 SR 58 8 53 58 bib TOTAL LAUNDRY INCOME 58 58 58 '_10 53 58 58 58 58 58 58 58 9U8 VENDING COST OF SALES 1 C0910T. Sales - YCndm$ 0 TOTAL VENDING COST OF SALES 0 0 0 0. 0 0 0 0 0 0 0 0 0 INTEREST INCOME 1 _ 3 4 5 0 ] 8 9 10 II 12 0 0 TOTAL INTEREST INCOME 0 0 0 U 0 0 0 U 0 0 0 0 0 MISCELLANEOUS INCOME 4 WefNSF chag" 138 138 133 138 lib 138 138 138 US 138 138 138 1.652 TOTAL MISCELLANEOUS INCOME UB 138 IM lib 08 138 133 133 138 138 138 138 1.652 40f 12 Adden. um 6 Alternative 1 RESALES SCHEDULE Year Year Year Year Year Year Year? Year Year Year 10 Projection Projection Projection Projection Projection Projection Projection Projection Projection Projection # of Sales Waterfront 3 2 1 1 1 1 1 1 1 1 Waterview 3 2 2 1 1 1 1 1 1 1 Tennis View 2 2 1 1 1 1 1 1 1 1 New Homesites 0 0 0 0 0 0 0 0 0 0 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 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 New Homesites 0 0 0 0 0 0 0 0 0 0 Total 1,160,000 856,800 582,624 445,707 454,622 463,714 472,988 482,448 492,097 501,939 Resales % to City 5% 5% 5% 5 % 5 % 5% 5% 5% 5% 5% Revenue to City 58,000 42,840 29,131 22,285 22,731 23,186 23,649 24,122 24,605 25,097 5of12 • • • Ad AAA e 1 EXPENSE SCI IRDULE 0 DESCRIPI ION LAN FEB NIAR APR MAY iCN lUl Nl'G SEP WIT NOV DEC TOTAL RISK 61ANACIEMENT SALARIES I Estimate 137 137 U, U] 1 13' IS` 137 132 137 It` I3]. 1;31 TOTAL R1SKhIAN:NGINII: \T SAL, 133 U] 13` 13` 13` Ii`. 137 I3_ 11] U` 137 f ?] ISSI 11.0. PAN ROLL WORK COMP SAL. 1 LS'inale R6 86 46 Rb 99 $6 AU 86 Au in Rb So ID33 TOCALII.O. PAN ROLLIW'OItKCONIP. R6 Rb Rti 36 Rb 86 36 80 Re 81. 86 86 1A33 OTIIF.R ENIPLON'EE EXPENSE I Holiday pa0y 0 Dinhda•s 0 3 team -0uilding. 0 J UmOecue 0 TOIALOT'IWR LNIPI.ON'CEEXPE \SL 0 0 U 0 0 0 0 0 0 b V r' 0 401 -K PLAN CONTRIBUTIONS k Es uuate 5: 52 - 31 57 57 5' q 52 5: P_ 5` BJ TOTAL 401-K PLAN CONTRID, 5: 5: S 52 i_ 52 }_ 51 5: 5: 51 52 6_3 AUTONIOTIN'E ' I Gasanil II II II II II It 64 Truck gpairs 64 64 3 GNlcxnrePairs 86 54 54 54 747 93 hlimellanewa It It II 11 II II II II II 11 II 11 I_'9 TOTAL AUTOMOTIVE 8b 97 75 II 71 64 11 11 21 64 71 11 505 WASTE DISPOSAL I Trash Pickup 463 463 4q4 463 463 463 40 463 463 463 463 463. 5,556 98 hli.1laneous 0 TOTAL WASTE DISPOSAL 463 463 403 463 463 463 463 401 463 403 463 463 5556 SUPPLIES 1 Cleaners/chesinls 71 :I 11 11 11 71 11 71 11 71 21 71 24T Plastiapaper 21 21 21 71 ]1 43 J? 43 43 71 43 43 387 3 Flags 69 37 lot J Unilotms 193 195 5 Light bulbs 78 78 78 28 28 73 73 `8 ]3 73 ]8 78 335 6 Trash cans 39 37 75 98 Miscellaneous 0 TOTAL SUPPLIES 26 70 70 177 70 174 9] 178 97 70 9` 9] 1.340 LANDSCAPING I Olive vecspray ing 0 FIm%erflgnss seed ;spNpl ants 0 3 Treelmmning 0 J Treertmo.'slhapla"mml 0 98 c mposile 1.090 "m Low 1.090 1.090 1.090 1.090 1.090 1.090 IA90 1.090 1.090 13.080 6012 Add6. _m 6 Alternative 1 EXPENSE SCI IEDk'I:E DESCRIPTION JAN FEII MAR APR . %I.U. JUN 11 L. AL SI'P OC7 NOV DEC TOTAL TOI.At. LANDSCAPING I.(% I.IMIi 1.090 IL90 1.090 LIMO 1.090 Ilcq IIMO Lhs1 IA% IMau 11,080 GA RD ENING CONTRACTS I Emiraneenial Care 0 1'O'rALGARDENINGCONTRACTS D D n 0 0 0 0 6 D D 0 D 0 PARK PA FROI. I Pdlml One 0 98 hliscelhneaus D FOFAL.PARKPAIROL 0 U 0 0 O 0 0 0 0 0 0 0 0 OIPNED COACI I EXPENSE I Sldrrhousin6 0 2 Cleanccnpta. 0 98 kineellanevos sJ TOTAL OWNEDCOACII EXPENSE D D 0 0 U 0 0 It U D 0 0 P REPAIRS & MAINTENANCE I Plumbinp/seaer 2215 213 215 _213 215 215 2213 213 215 215 215 215 2.3;8 2 Electric 38 38 18 38 38 18 38 38 l8 m 18 38 414 3 T1' antennarepair 9 9 9 9 9 9 9 9 9 9 9 9 111 J Fence repair and transf career sheds 129 129 238 5 Cathodic protection 101 101 h Fire wring uishen Rq 500 7 Tools 150 21 21 21 21 21 21 21 2.1 21 21 21 387 8 Gas Mehra 40 40. 40 40 40 40 40 JD JO 41 40 4D 474 9 Pedewalirisen ID7 408 107 408 107 408 107 418 107 4D8 107 408 7.093 10 Pcu romml 16 16 I6 l6 lb In 16 l6 16 16 16 In 193 11 Fim Aid kits 125 123 11 Beach send 4.10 43D 13 Shophmuge bin rental 43 43 41 43 43 43 41 43 41 43 43 43 516 14 Reslmp and paint panic f umiture 0 15 Continue slice, l lght replacement 161 161 161 161 6.1.1 16 Equipment roman 21 21 _21 2_I 21 21 21 21 21 21 21 21 258 17 Maimewneenf Fitnev Equipinent 0 98 Miscellanenu0nateria1a I07 107 107 IIA IW 107 107 ID7 107 ID7 ID7 'ID7 1.299 TO I'AL RE PA I RS& MAINT ENANC E 747 1.209 618 919 1,338 919 618 1181 1.243 919 779 919 11.6D7 TELEPIIONE I Office phoned an, distance 0 2_ Pagen 0 3 Anwredn8 unice D 4 Pry phone D 5 AT &T contract D 6 RadiobAlerles D 98 Composite 117 117 117 117 117 117 117 117 117 117 117 117 1,401 TOTAL. TELEPHONE 117 17 117 117 117 117 117 117 117 117 117 117 1,104 7 of 12 0 0 0 DOES& SUBSCRIPT IONS I Barn Repi,n 2 Orange County Registoi 3 Ncolxtl Beach Bail y PilN a Ci, it codes 5 rde25 6 Kelly Blue Dock. 98 Miscellaneous TOTAL DUES & SUBSCRIPTIONS OFFICE EXPENSE. I Postace _+ Federal espses ✓del i, ery charges 3 Posrace comer rental a \\aler 5 Cnmputer supplies 6 Stalionery 7 Business cards 8 Copier paper aml F Cartridges 9 Copierpaper 10 COPier maimenance II TitleSemehes 98 Miscellaneous TOTAL OFFICE EXPENSE JAN PEES Adde_ Altern 1 EXPENSE SCIIEDI LE AL\V JLN A1. OCl' • O 107 9 IS 11 1n' 9 19 II 1 U 9 18 II 107 9 IN II 107 9 IR II 10" 9 IN II 107 9 18 II Im 9 I8 II 161 9 14 II. 107 9. I8 II 107 9 18 II NJ 131) IsB 0 21 107 21 21 107 0 250 D 0 U 0 U 0 0. U U 4 9 +_a D 107 9 18 II 107 9 IS 11 1n' 9 19 II 1 U 9 18 II 107 9 IN II 107 9 IR II 10" 9 IN II 107 9 18 II Im 9 I8 II 161 9 14 II. 107 9. I8 II 107 9 18 II 1289 103 219 1_•9 43 n 21 107 21 21 107 _•IS 9 +_a D •15 0 11 JI 11 0 II II II 11 11 II II II It 0 11 JI •I 19 +1 _•I 86 +1 21 •1 21 21 21 21 21 21 •I 21 21 258 166 166 IRS 274 166 INS 166 166 183 166 295 166 2-191, MISCELLANEOUS EXPENSE 0 t \P \h \metlings 0 2 Training classes 0 3 \Vh1A Cnm emion 0 98 M6.0lanto n TOTAL MISCELLANEOUS EXPENSE 0 0 0 0 U 0 kl 0 0 0 0 0 0 TENANT RELATIONS I Binhday cards 2 Iloliday panics 3 Chrimnas pany a July 4th party 5 Ilomovn r sm,oings 6 Bingo 7 Co1Tce 98 Miscellaneous TOTAL TENANT RELATIONS ADVERTISING I Vell6re pages 98 dliscdlaneous 28 +8 28 +8 •N 28 28 8 of 12 28 28 28 336 43 43 21 21 21 63 9 +_a 9_a •15 _ +I5 11 JI 11 111 II II II 11 11 II II II It 11 19 II 32 21 21 21 +1 •I 21 21 21 21 21 21 21 258 +I +I +I 21 21 +1 21 21 `I 21 +I _•1 _158 _ 76 54 210 54 A 54 65. 978 1,930 108 76 N 54 28 +8 28 +8 •N 28 28 8 of 12 28 28 28 336 Adde. . 6 Alternative 1 EXPENS1 SCIIEDULL DESCRIP PION JAN FIID hIAR APR M%Y JUN it 1. AUG MP O( 'T NOV of.(' TOTAL TOTALADVER I. ISING ?8 28 28 ?R ]R 28 IN 28 Is '_8 28 ]8 13h TAXES A LICENSES I Crediech «ks Track « gixlralian 3 DCDnpvrarng permit 1 Laundryn"din-, Fmnit 5 Mobilehome regixrations 6 M96i1eholne properly hies 7 WliyhR S measures meter pens it 8 Sp.V ml pc�mliu 98 AI&eellanenus TOTAL TAXES A LICENSES POOL SUPPLIF_S REP: IRS 1 Poet un i,e ? F9unta n sen i 3 Rep11r!h1a1n1enn. Pu91 s A Spas 1 C9ndtiorur 98 hliuelhne o TOTAL POOL.SIJPCI.I ESIREPAIRS LEGAL FEES I Evielimmennnirel aled Othm1eF61 TOTAL LEGAL FEES AUDIT ?AX FES I Eminnale TOTAL AUDIWAX FEES ACCOUNTING/B UDGETIDP I EUimale TOTAL ACCTGIBUDGETMP OTHER PROFESSIONAL FEES 1 Rem wia'ey 98 Aliuellnnmus TOTALOTIIER PROF. FEES COMPUTLRSUFPORT MRI Supp0 ClurBes TOTAL COMPUTER SUPPORT REGIONAL MANAGEMENT I Eaimate 10 IU IU 450 199 10 Q9 6U I 1 150 399 60 0 n 0 69 69 529 IU IU 50 10 10 10 70 V! IO 10 10 1.191 0 U 0 U U U U 0 U 0 0 fr 0 100 100 IV) RID 100 100 100 1181 IOU ICO 100 10h 1.2m 100 100 100 IOD 1w 100 1110 IM 100 100 100 Ilo 100 2:50D 2.500 0 0 2.500 o D D D U U D 0 D 2.500 1.697 1.697 1.697 1.697 1,697 1b97 1.697 1.697 Ib97 1.697 1.697 '10.000 28.667 1,697 1,697 1.697 1 1b9 1.697 1,697 1,07 1.697 1.697 1.697 1.697 10,000 1 _8.667 1.500 1.500 100 100 100 100 100 100 100 IV) 100 100 100 ILCI I,.IID 100 100 IW 100 100 1,600 100 Ito IOU IOD 100 100 2.70D 50 50 50 SO 50 50 50 50 50 50 50 50 600 9 o 12 • • • Alt rna* 1 14MIENSE BCIII:DVI.E DP.SCRIPI ION 1.\N Fl 11 \IAR APR 11.\1' II:N A'L .\I :G SIiP 0('i NO \' DFC TOLL TOI Al. REGIONAL IIANAGEMEN 1 SO81 nq 91u 5w 500 5f0 Aro i. 51.1 500 Aq SVt b1m LEGIS LAT I\ I'. CON IR TBUT IONS 0 1 ('9min. wSue CFnpeny Rights 0 \c11A me TO FA I. LEG ISLA I I V E CON T It I O. 0 U U 0 0 0 U U P q 0 1! 0 CORP. T EII[PI ION EXPENSE I Evii'ats TOTAL CORP. TELFPI IONE ORGANIZA I IO.N \L DI'LS I \PAIA D.cs TOTAL ORGANIA\ I IONAL DUES CORP. OFFICE EXPENSE 1 Estimme TO] A]. CORP. OFFICE EXPENSE INSURANCE I F.slimme TO ALINSCRANCE REAL ESTATE TAXES I Pelwnal pl:•pe0y RE Tar E9imxte TO I Al. REAL ESTATE TAXES TRAVEL. I Emimme TOTALTRAVEL MANAGEMENT FEES I 5 %of .. rnues TOTAL MANAGEMENT FEES RENT E \'PENSE I Cityof Neupvn.0n6 TOTAL RENT EXPENSE TA'X AND LICENSE 1 Nliidmum Tai 2 LLC Fee U 0 II II II II II 11 II II II II 11 fl I3v II II II 11 11 II 11 II II II II II 1:9 34'_ 547 54_' 547 542 547 547 542 54_' 542 11 542 4499 SA 542 54'_ 54_' 54_' N'_ 543 SJ'_ 54' N_' N] 547 6.499 5W 500 108 4.108 3.108. 4.108 4.108 4.108 49.3Iq 200 2W .Oq '_W 700 IN .vo NO :00 100 300 200 7.401) _'00 700 _'W _Nq `w 3W '_lq .NI _No 200 '(q 200 1.100 SAM 5.410 S.JIO SJ3U 5.410 5.410 5 ,170 5,410 5.410 5.470 5.410 5.410 64.970 5470 5,110 5.410 5.4.10 5.410 5.410 5.470 5.410 3.410 5.420 5,110 5.410 0.970 83.1313 W]D 83.133 83313 93.133 83.333 83,333 8'' +.333 83.333 83.333 8.3.333 83.333 1;000900 83333 10333 83_-,33 83.333 8 .1.3333 83-133 8.033 V333 83333 V.133 83.333 83.333 IAM.000 800 Sw 3AVo 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 PAYROLL TAXES TOTAL PAYROLL TAXES GROUP HEALTH INSURANCE TOTAL. GROUP HEALTH INSURANCE WORKERS' COMPENSATION INSURANCE TOTAL WORKERS'COMPENSATION INSURANCE LIMIT % OSADI $76.200 620% MA PARTIAL YEAR 1.450,5 TOTAL 57.000 0.80% NEXT $7.000 OTHER (151 10 ISI) EMPLOYEE CURRENT INCREASE: NEXT PAY ANNUAL START STOP SAL/TAXES EMPLOYEE POSITION PAY RATE PIO. °''o PAY RATE (PER MO) SALARY HRSACK MO. MO. FTE's R INS. SALARIES 1 Maim. And Asst Manalger 2.520.00 1 5 >0 2,646.00 31.800 40.0 1.00 37,980 2 1 3.0 0.00 0 40.0 1.00 0 3 1 3.0 0.00 0 40.0 1.00 0 4 1 10 0.00 0 40.0 1.00 0 5 0.0 8.00 '0 0.00 0 TOTAL SALARIES 31;800 4.00 37.980 PAYROLL TAXES TOTAL PAYROLL TAXES GROUP HEALTH INSURANCE TOTAL. GROUP HEALTH INSURANCE WORKERS' COMPENSATION INSURANCE TOTAL WORKERS'COMPENSATION INSURANCE AT $150 Per month pa FTE WORK LIMIT % OSADI $76.200 620% MA $130,200 1.450,5 FUI 57.000 0.80% SUI $7.000 3.64x, AT $150 Per month pa FTE WORK % OFFICE 0.38% MAINT. 4.54% SALES 0.24% 11 of 12 2;880 1,800 1,440 0 • 9 Ad, • Alter* 1 CAPI I AI. IMPR(1W.NCN I S W F6 410 U1:4n PSI 12 Of 12 SLU' 111; ALO SET OCT %OV DEC TOPAL REMARKS AClOI:NT DCSCRT fN)N 1dN IIR STAR APR' 1(N 14519121 MPREA'L %13U ITIPRMENIENTS 11 11 � 11 1 11 F ? ry 11 ry 11 in 11 n 1! IJ I? 14 J!XXI !411111 $.1Nxl ?411X1 2.1m !IXXI !JMXI !,01x1 _Ixryl : Add# 7 • Alterna ive 2 Footnoles 1.029,263 1.119,878 Year I Year 2 Year 3 Year 4 Year 5 Capital Improvenients DESCRIPTION Projeclioo Projcetiou Projection Projection Projecuoo 1,3 Total locrnnc 1.299.656 1.403.649 1A99.042 1.529.027 1.559:603 2.4 1 Ionic Office Expense (170.950) (179A 39) (193.023) (136,639) (190A22) 2.5 Manager Expense (99,443) (104.332) (106.419) (103.547) (110718) (5.263) (42.661) Total Expenses (270.393) (283.771) (239.447) (295.235) (301.140) Year Year? Year Year 90.795 1.622.611 1.655.063 1.688.165 94.231) (198.115) (202.078) (206.119) 17.9321 (115.191) (117.495) (119.845) Year 10 (210.242) Cash Flow Subtotal 1.029,263 1.119,878 1.209.595 1.233.787 1.258.463 1.146.767 1.233.632 1309305 1.335.491 1.362.201 1.389.445 Capital Improvenients (24.000) (24.480) 1.216.958 (24.970) 1,266.123 (25.469) (25.978) 0 (26.498) (27.028) (27,568) (28.120) (28.682) Interest (33.320) (99.670) (27.100) (99.620) (20.290) (12.830) 0 (4.670) Principal (66.320) 58:000 (72.550) 33.631 (79.330) (86.790) (94.950) Capital/Utility Improvement Reserve (5.263) (42.661) 29.091 (60.344) 30.266 (61.551) (62.732) 995.937 (64.038) (65.319) (66.625) (67.958) (69.317) 6 Base Rent to City 1.000.000 1.052.737 1.124.281 1.146.767 1.169.702 1.191.096 1.216.958 1.241.298 1,266.123 1.291.446 Real Credit fiom 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 26.375 27.411 27.961 28520 29.091 29.673 30.266 Total. Rent to City 1.058.000 995.937 1.053.263 1.073.972 1.097.495 1.121.418 1.245.479 1.270.388 1.295.796 1..321.712 Foolnoles; Year One Monthly Rental Rates: Watafronl- $2,300fWater icw$I.800/Taatis View$1.600. Rates areadjustd by CPleachy ear. assured lobe 2% For this pro forma. 2 Based upon hislorical operations of Marina Park as apprcprialcand Baysidc Villagc as appropriate. Adjusted by CPI each year. assunred to be 2 % for this pro forma. 3 Year 2 forward revenue increase front 12 nav homesiles on portion of current letmis cam laud at $1..000 pv spacdntadt. adjusld by 2 %CPI eacb year. One space reeled each month of year 2. 4 Variable Home Office Expenses relative to 12 new spans xremanagmacni fees. real estate taxes and insurallce 5 Variable Manager Expenses relative to 12 new spaces are repairs and suppler and utilities 6 $1.000.000 t inimum plus CPI each year. assumed lobe 2 %. or 75 %of Total Inane, whichever is greater. 1 Of 14 DESCRIPTION Pralaliun Grins Pwmsial Bell 00410x, Dinka] Rell R'bme n Vaeamies II Tina. Athel is IIIJIINII Em lee Laiin4 Flee Rent Net Billable Rm1 Oa lACmd-R. C'mah RaaaClxnmissime Coah Renal Cmrs Uepsils FWmlM Bat Della \I�[ 0m1 Emplmee Rea Trim Re,.111 I.. G..p Rmlola BillbeoM Bernal Tda- 01hm Rental i,.cmN Caah,mmlw $ales Call M$aks Salespersm Salaries Salapewll Cpmmissims ImOwel, AMxrluh-g Olber $ales E.yelx[. Fl.h, IM., Taal Im'enlo Saks Resale Cdn111issions Salepasm Salarie SaRapnsm Canmissiwn Resak A4venisi, Other Salo E.'p[me Toal Resale Ipaallle Taal Cmdl $ala.Resales VOdilg 1a Laundry 1. Td.M Voull1g 1. Nes.RUn $m[har p, mars, ln[arc hl&aRalx:ag Income Taal OW e.. TN.. 11i[Nrc T n I.!4M1JxMl n II 1 !X174401 u U u U 11 p p 11 a n B u all - wM I!1l9 (NM n -.OtI U' U.n'. Ad, .n 7 Alternative 3 SLAIMARY HOME OFFICE EXPENSE $IIMMARY ACCT DESCRIPTiON Psyeedm I10IU!I Laval FNS 1111,. !Iµ!1111 AWIII Tai !:1141 1aA!U!I Aasgaing nlMge. OP a!M'1 m10. Olhv Pm .6i F. � nW M"I!I Cmpmea SUrp.M MMI PW.ldl Rnimm hlanaRNnm, bJMxl JW1.11 EmplgRB .M. pa.wlD I'.S13 178411 P.'blalmc.t'bloirns e H11111JI Cl,. T dryMlle Erpmse 101 RojwI O,paninlpnal Dues u 5-174.1:, Cmpe Ogee E'perle ke I dm NU! imol Fen 43'1'! 1111 x-i, I..r. ne M4' 111!11!1 Abaa ...lx,e Ueses (1 l. x1!1 Inb -DeFmM 1( 3.114-11 Tia'd L410) $1!1x111 Lose Exp a - NBBR 11 1.04.1 1 Alamgemml Fees.,. '.?. N.n],. A PAQI T.,.A Liamses 341x1 SIM4111 Thal'Aher Eapme 121.46M Il,XWl I: nest Tdao lone ORir[ E'pmee 1-10,95s 2 of 14 • • am DES( R IP DON Pmjmlian OILCa.S'eWO M.m.Olarce Salaries l.All Palyd$alarles ` Risk MaMOnenl Salaries 1341 114) Pals W" L olnp Sin 1!0 TNID$alalilY JJ.IIV rallnll Ta.a l:}a1 Gle..r lnwmlwe I: nest b,vkei [NN`. uelna a -Test e hti Flee. ROOM E.p. U JUI R POn CNR,il,.6 a h!J TNil Paamll lien 1714 dmNlllti'[ .3.N Lareb,,*, IalM.. GAM h, C...s. U Park Pam. n PINd Cmdi E'pmse ` Repvrs S Maim...[ 11.017 P-aabim Repairs II P.1 Mail. Cmlral II Pml Repairs 11 Taal Repairs A SgTI'ys !!.UW. TO,lnwRCmmmunimmxrc 1114 Dan A S.bssriliNS !VI 011iae Elpnee A P.IW !.!W hliatdkanmw:Upelee 11 Trami,&Smimil li TNm 011lae E'peme 39I3 Tell. Rdaliom 1.9!11 Ae1'eem, !Jh Tales ALk. ..191 TNa13.M Eapasne tJb- ReimbasM Eleirri[ U ElRbie$abHNl natal Gal I! 1311 Reimh.rs Gas II Gal SO.O.1 JAM, wanes u sale B Taal Litilhles IM.IRII Trial MauE E.pemr 99.111 u.IP. 3 0114 Rd t uce = 19COfIF SCIISOLLF. W:1JPY J." FED MAIN \PR V. \1 AN JCL 4LG SEP D11 \0\ DFC TDIq RENLIRKS DF.S( RIP I ION yr4J�Rn.n�sxea a !111 Ll tMENOIJ IOT \L LNITS - •11'erN fM \)alrfigR !J !,vX1 TOI AL SQUARE FEET OaW\irv. _ i.)iq Te .I— !N1' RETI.'ET RENT IIJ,MM 1IJIYXI II4.I01 IIJ,IVD. 114011 114JIXI II 091 1140$1 IIl.1YX1 1141.11 114111. 1141X-1 IIM1:I,IXXI Nn 14 a4l I_ 001 1 RENT PER S.F. I1U1 LL1X1 R01 ROI N! +1 ROI 11.1X1 Wl. 4u1 Ilw Y! +1 Nw IMP. LEASE G UN I LOSS) 1. 114.1X11 110 -M1 114A.) 11 J,IMXI 114,191 .14,.. 14,1X1 1141X1 INIXXI 11 J.pq INuXI PIUn1 LrieLIXX1 SIak1!Mr pm P^ RENT POTF.NTIA 11.U1 11.1X1 111X1 111X1 IIIx1 11.111 1UX1 1NX1 I.M 114,y4ax 11 !x11 IRENT PER S.F.) 11111 U.INI 1MX1 1111 Nalv.lrn p ]±1q 1 9 n b q n TImaJ \'x+. n 1.11 V:U'.WCTESILN11S1 ➢ 9 1 I 1 n 4p.11ma+nn II 1.'11 \'.UlWC 1ES(PERCENT) D-m RICr' Rmc We. ,.,r. 11X4 rt1l'1. LLIP, I11Y. 14u', II IY. "!P. \' W NNC1F.SLNIOLNTI 11 0 1 11 O 0 I 11 4 U TEN.WT: \ILO % %,WCES Ifi.1Xx11 16uX11 Ifi!NXb 1M1!Ml 1fi1AX11 11i1N, 161011 141$X11 1I.0NO 1fillf)1 10,1X.11 1M1!$MI1 17181. EMPLOYER LODGING SIODEI.OFFICE y FREE RENT II Ipl!(MX/ IRN,IXX1 111.1$X1. 1181$X1 111.C,IXX1 IIq,IXXI 111 %IMMI 111$,1$X1 111X,1$$1 11fl11A1 111$.1$X1 IIM.IX /1 1,'- `M,I1r1 DEPOSI IS FORFEITED EMPLOYEE RENT u NET RENT&INCOME 11$10X1 11WXXI 11N0XI hrv.O11 IiF.0 Xl MIRY.. 11yyj1X1 01X.1$1 IIIa1X1 niM,Wl Vg 1Xn1 Vla!XII U'N.1it1 ECONOMIC OC CIPANC91% nIal RMI 94.Pt Y4Ja 94M W.1:% W.M. W.7.4 94.1 '1 Y4.71. 94.7 -i 94.7^: W.P. W.I': 94.1': ECONORKOCClP.tNC 1' 1% R1x McNN.I1 W.Pt 9J.T.: 94.7% W.7.1 94.7. W.P. 94.1". 94.7. 94]V 44.7'3 W.7 -, W.T. W.r: PASSTOIROLGH INCOME 1 1 6o.m, TOM PASSTI4ROLON INCIFIE 11 11 N U I R 9 1 11 0 11 9 G.UUGERENTN INCOME I C..m ReM.1 Ommsm p 0.1n Per wit 1 EIII.IHrllmn[ 0 11 9 I (1 I 1 I I I 11 I TOT& GARiGE RENT& 1NCOMB I 9 U I 11 1) U II o n U BILLBO JRD RENT iL INCOME TOTAL BILLBOMDRENT.iL INCOLfE 11 0 11 11 11 11 0 0 U 0 NEUPORT SLRCIT.WCE A MM M S% !M M $R !M M MR !IN M A% $1 InMIJRr PmWNPM1e I \\'nn E9 TOTR HEU PORT SCRCILU(GE Rx MM. }x fM MM !x !M !.v !x }x )M .x MM OWNED CO. CII RENT 11rv101 Sprt 11 IOTAm OINED O\\NEDCO [IIINENT +1 0 U I 11 I Y R n n COACT. RENTAL COSTS 1 T } a (1 11 M1 N 7 e 11 3 0114 AE, aN R Altematl4e f D:(011E SCHEDLLE gLFArIJI IC:IJ P \I DESL'RIP I ION 1 \V FEU. \1 \R . \PR \L\P ILN IL'L %1:0 SEP O(T M)\ OF( TOi V. REM\RAS 4 111 11 II 11 I� U U n IJ 11 4X Slia bJ II TOT LL COACH RENT& COSTS .1 U 4 U n li n U n D D \'ENDING INCOME J soda mI is UN) IUI IPI 11X1 !Iq TOT.V. \'ENDING INCOME IIXI 0 11 IIXI 11 11 IPI U II 11)1 II V Uit LAUNDRY INCORIE E E,mw $N 5A IN SX SX iN q SX !x !e !X VP.ofemLM1fdmc TOT& LADNORI' INCDRIE $N $N £X ]NI !x q 5x £A M ix A !X NP 41.0.1. 153041 mmlh' PENDING COST OFSR.ES I C -\ II \END1a TOI.JL LENDING COST OF S.4-E4 II 4 4 II 0 q 4 D D u II 4 INTEREST INCORIF. 1 _ 1 J 5 R i X 4 III II 1$ (1 n TOT& INTEREST INCONIE 11 R R n ll R n Y n n u MISCELLWFOLS INCOME I LlltlN$FAegn. IJR 11R 11X 11V IIN DX I!X IlN Ilx IIN I \x IIR 1,65! TOMMISCELLAJEOUSINCOME 13 N IIA I!A I!x Ux I!x Id. UN 1N IIN 11X 139 . Wl 40114 0 • • MAW 7 0 Alternative 2 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 # of Sales Waterfront 3 2 1 1 1 t 1 Waterview 3 2 2 1 1 1 1 I 1 I Tennis View 2 2 1 1 1 1 1 1 I I New Homesites 0 0 1 1 1 1 1 I I 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 117,166 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% Revenue to City 58,000 42,840 33,631 26,875 .27,413 27,961 28,520 29,091 29,673 30,266 5of14 Addi, +m 7 Alternative Z EXPENSE SCHEDULE DFSCRIP110N JAN 17EB .VAR APR 31 \Y JUN Jul. AI 'G SET OCr NO \ DEC IOhLL RISK .MANAGEMENT SALARIES I Eximale 137 Ii] 157 137 137 132 13' U'_ 67 131 It] U] 1.581 IOIAL RISK MANAGE.kILNT S.V.. 137 U` 131 13} Lt_` 137 135 U` 131 13 ^_ 132 13` L581 11.0. PAYROLLAVORK COMPSAL. I Estimale 86 86 R4 86 86 R6 R6 94 A4 96 8o 86 1.038 TOTAL 11.0. PAYROLLAVORK COMP. Sb 86 86 86 86 8o 86 86 Rig 80 80 86 1.08 OTHER EMPLOYEE EXPENSE 1 Iloliday p.my 0 '_ pinhdays 0 3 ream building 0 J parbecue 0 IOf ALOIIIER E.\IPI.Ok'EE. EXPENSE 0 0 0 0 11 0 li u U 0 0 0 0 401-K CLAW CON I RIEL' I IONS I Euhmate 5` e2 5' s` 57 57 52 57 57 5} 57 57 623 TOTAL40I -K PLAN CONTRIB. 57 57 57 57. 57 S7 51 57 57 i 6]3 AUTOMOTIVE 2 Truck repairs 64 bJ 3 Golfean repairs 86 54 54 5J 747 98 hiscelb.cer.s 11 11 11 II it 11 II 11 II 11 11 11 179 TOTAL AUTOMOTIVE 86 97 75 11 71 64 71 11 11 64 21 11 505 WASTE DISPOSAL I Trash Pickup 463 463 J0 Jh3 463 461 J41 463 403 403 40 463 5.356 98 hliseellanee. 0 TOTAL WASTE DISPOSAL J0 463 J41 J0 463 4(,_1 4,,1 463 Jut 403 443 463 5.556 SUPPLIES I Cleanersichemicals '1 11 'I 71 21 21 11 '1 '1 21 21 71 247 PI.,Iw?aper 21 21 it 71 21 43 .It 43 J3 21 43 41 .387 3 Flaps n9 37 101 4 Unifeens 195 195 5 Lighlbulbs 38 38 28 28 18 28 78 28 78 78 28 :8 335 6 Trash cans .19 37 73 98 Aliserllaneous 0 TOTAL SUPPLIES 765' 70 70 177 70 124 97 128 97 70 92 92 1 140 LANDSCAPING 1 011, a tree spray ing 0 Flmceralg rasa seed/sndpl ants 0 3' Tree Ubmnin8 0 J Tree relnw'alheplxement 0 98 C.P.O. 1.090 1.090 1.090 1.090 1.090 I.M 1.090 1.090 I119D 1.09D 1.090 1.090 13.080 TOTAL LANDSCAPING 1.090 1.090 1.090: 1.090 13,90 1.090 1.090 1.090 Low 1.090 IR90 Logo 13.080 6 of 14 9 0 0 Add 7 • AA d a 2 EXPENSE SCI IEDC LE DESCRIPI ION JAN FEII 3138 APR MAN JUN JC I. At 'G SIP OCT NON' DEC TOTAL GARDENING CONTRACTS I Gns irrnmemnl Care 0 TOTAL GARDENING CONTRACTS U D U U 0 0 V 0 PARKPATROL 0 I Pntrol One 98 0 hliseellamoous D 6 0 U U U TOTAL PARK. PA I ROL 0 U 0 U 0 0 U Ol3'NED COACH EXPENSE 0 1 Sutt housing 0 Clean empers 9¢ hliseellan<uus 0 U 0 0 0 0 TOTAL OWNED COACII EXPENSE 0 0 D U 0 0 0 U REPAIRS d MAINTENANCE 215 215 213 215 215 215 213 715 215 215 115 71.5 2.578 I Piombing!e er 38 39 38 M 38. 38 38 39 38 38 38 38 JIJ 2 Elmrie 9 9 9' 9 9 9 9 9 9 9' 9. 9 111 3 TVa6Xnnarcpirs 3¢ efep.w.rullransfolersheds 4 penf m 129 179 � 301 301 5 Cathodie groleelion 5W 6 Fire extinguishers J 21 500 21 71 21 21 387 7 Tools 150 40 21 40 21 40 21 40 21 40 21 10 40 JD 40 40 40 40 474 8 Gas .Velers 9 Pedeslalskistts 107 408 107 408 107 408 107 400 107 408 107 408 3.093 10 Pest control 16 16 16 16 16 to 16 16 16 16 16 16 193 1.15 q5 II First Aid kits 410 1'_ Beset, sand 43 43 43 43 430 43 43 43 43 43 43 43 43 516 13 Shop�storage bin rental 0 IJ Restrap and pint patio f umim. 15 Continue street l ight replaeonenl 161 161 161 161 644 16 Equipment rental 21 21 21 21 21 71 71 21 21 21 71 21 758 0 17 Flaimenanee of Fitness Equip. m1 107 107 1.289 98 Miscel laneous/malerial s 107 107' 107 107 107 107 107 107 407 107 919 1.338 9I9. 618 I'M1 1.243 919 779 919 11.607 TOTAL 'REPAIRS 3 hUINT ENANC E 747 1f09 618 TELEPIIONE 0 I Once Phanegbng.divatXe 0 2 'Paget 0 3 AIIA \'Ring Xrr, lee 0 J Pay phone 0 5 AT&T eomran 0 6 Radiob 98 Composite ite 117 117 117 ili 117 117 117 117 117 117 117 II] IrIW TOTALTELEPDONE 117 117 117 117 117 117 117 117 117 117 117 117 1A04 7 of 14 Adat_ .a1B 7 Alternative 2 EXPENSE SCIIL'DC LE DESCRIPrIGN JAN FEB MAR APR MAl JUN Jt'L At G SI-P OCT NOV DEC rOl AI, DUES & St BS( RIPHONS 1 Berlin Report 0 2 Orange Counly Register 0 7 Nerrpon Beach Daily Pilm 0 7 Ci, Icodes lot, I(Kl 5 title 25 151) b0 6 Kelly Blue Bonk 0 98 MiscellenemB 0 TO"LAL DUES. d: SUBSCRIP I' IONS 150 0 U 0 0 0 0 0 U 0 0 0 _'S0 OFFICE EXPENSE. I Posmge 2 Federal espresstdel I% cry charges J Posing a mcler rcnul A Water 5 Coinpular supplies •6 Smiionery 7 Businesseards 8 Copier paper and F as Conridg es 9 Copier paper 10 Copier maintenance II Tide Searches 98 hliscellancous TOTAL OFFICE EXPENSE MISCELLANEOUS EXPENSE 1 WM.A meetings 2 Training classes 3 WMA Convention 98 Miscellanrous TOTAL MISCELLANEOUS EXPENSE TENANT RELATIONS I Birthday cards _' Holiday Navies 3 Ch6slmas party A July 7th pony 5 Hounowness meetings 6 Bingo 7 Cdrcee 98 Miscellaneous TOTAL TENANT RELATIONS ADVERTISING I Yellow pages 98 Miscellaneous TOTAL ADVERTISING 107 107 107 107 111' 107 107 101 107 10s 107 107 1_'89 9 9 9 9 9 9 9 9 9 9 9 9 103 IS 1Y 18 18 IS 18 18 IA IB 18 18 IA 219 II II 11 11 II 11 11 II II II 11 11 129 21 21 21 258 108 76 57 57 76 57 280 0 76 57 In7 978 1.930 107 215 0 0 0 0 21 'I 21 21 86 'I 'I 21 21 'I 'I '1 _'1 21 21 71 21 _'58 166 166 188 277 166 188 166 166 188 166 295 166 2_99 0 0 0 0 U 0 0 4 0 0 0 0 0 0 43 215 7l M 927 927 215 II II II II II II II II II II II 11 137 11 32 '1 '1 21 21 21 21 21 21 'I '1 '_I 21 258 21 21 21 21 21 _'1 21 21 21 21 21 21 258 108 76 57 57 76 57 280 57 76 57 65 978 1.930 28 28 28 28 28 28 28 28 28 28 28 28 33b 0 28 28 '8 '8 28 28 28 28 28 28 28 '8 836 8 of 14 • .• • 0 Al[er *7 2 • EXPENSE SC'I IF.DULF DESCRIPTION JAN FEB MAR APR 61A1' WN IT Al'G SEP OCT NOk' DISC TOTAL TAXES S LICENSES I Credit ehndks 10 10 10 10 Ifl 10 10 10 19 10 10 10 116 ' Truck repisitation 450 450 N79 3 IICOePenting pennil 499 4 Laundrylvelking yennil 0 M 0 5 61obi1ehome regntmtiuns 0 6 6labilehume prryrny lases 0 i WeighlsAmeasmes meter permit 0 Fowain sera it, 0 A. Spa/prvl permits 98 hli,el hneoas 69 0 7 Repairlhlaimmanee Pool s A Spas RN 10 10 10 70 IV 10 10 10 1.194 T OTAL TAX HS A LIC F.NSES 5'9 10 10 POOL SGPPLIESREPAIRS 0 I Pool sen iee 0 Fowain sera it, 0 7 Repairlhlaimmanee Pool s A Spas 0 4 Conditioner 9$ Miscellaneous 0 0 0 0 0 0 0 0 TOTAL POOL SUPPLM.4REP.AIRS 0 0 D 0 0 0 LEGAL. FEES 0 I Eaielil'gal am rel aced ' Other legal IW 100 100 IW 100 100 100 Ifq 100 IW IW IW 1_00 TOTAL LEGAL FEES 100 IW IIX7. 100 IW IW 100 IW 11X1 100 IW 100 1,200 ADDIT/T.A.N FEE I Eslimalr 2.500 TOTAL AUOIT'r&X FEES 0 0 3.500 0 0 0 0 0 0 0 0 0 2300 ACCOUNTING/BUDGET/OP I Eslimalc 1.697 1,697 1.697 1.697 1.697 1.69' 1.697 1,697 1.597 1.69' 1.697 10,000 2M07 TOTAL ACCTG /BUDGET/DP 1.697 1.697 1.697 1.697 1,697 1.697 Ib97 1A97 1.697 1.697 1.07 10"D '8.667 0111ER PROFESSIONAL FEES I Renl r% 'y 1.500 1,500 98 Aliscellaneam 100 100 100 IW IW IW IW IW IW IW 100 IW 1:00 TOTAL OTHER PROF. FEES 100 100 IW IW IW IbW 100 100 1 I11V I IW '.NA CO61PUT ER St IPPORT hl Rl Shpporl Charges 50 50 50 50 50 50 50 50 50 50 50 50 600 TOT' AL COM PU T ER: SU PPOR T 50 50 50 50 50 50 50 50 50 50 50 50 600 REGIONAL MANAGEMENT 1 Euimate 500 500 51X1 500 500 500 500 500 500 500 500 300 6.000 TOTAL REGIONALMANAGEMENT 500 500 500 500 500 500' 5W 500 5W 500 500 500 6.1100 gar 14 Adde. ,m 7 :Alternative 2 EXPENSE SCHEDULE DESCRIPI ION /AN FLD . \L \It . \P14 51. \1 1L'N JC1, \CG R:P OCT NOV DEC 1OT, \1. LEGISLA II VE CONT R I D U L IONS 0 I Ceinin. toBase Pi9peny Rights D 1_ \VNIAPAC JOTALLEGISLAUVECONTRID. 0 0 0 U U 0 0 0 0 0 U 0 0 CORP. TELEPI IONS EXPENSE I Enimam TOM CORP. TELEPHONE ORGANIZAJ IONAL DUES 1 \VSIA Dues TOTAL. ORGANIZATIONAL DUES CORP. OFFICE EXPENSE .1 Estimate TOTAL. CORP. OFFICE EXPENSE INSURANCE I Enimme TOTAL INSURANCE REAL ESTATE TAXES I Personal Pe ^PMy 2 RE Tas Estimate TOTAL REAL ESTATE TAXES TRAVEL I Estimate TOTALTRAVEL MANAGEAIENI PEES I 5 ".oTrcsem¢a TOTAL MANAGEMENT FEES RENT EXPENSE I City of Nese0on Desch TOTAL RENT EXPENSE TAX AND LICENSE I hlinimom Tae 2 LLC Fee 542 SJ_1 SJ2 5421 54_ 5412 5421 342 541 SJ1 542 542 6.498 541 541 541 541 542 542 5412 541_ SJ_1 SJ1 54_1 SJ1. 6.498 4.108 4.1(,8 500 500 200 100 10 1W 1W 200 All) 2W 200 200 100 2m 2.400 100 200 200 200 '_fq 2w 2(ro 2w 2L0 ?00 200 W 2,100 5.4_10 5110 5:130 10 of 14 • • • goo PAYROLL TAXES TOTAL PAYROLL TAXES GROUP HEALTH INSURANCE TOTAL GROUP HEALTH INSURANCE WORKERTCOMPENSATION INSURANCE TOTAL WORKERS'COM PEN SATION INSURANCE LIMIT Adde 7 OSADI 576,200 6.20% MA $130,200 • FUI $7,000 Alteraa ve 2 SUI $7,000 3.60°'0 SALARY SCHEOULE PARTIAL YEAR TOTAL NEXT OTHER (15110 ISO EMPLOYEE CURRENT INCREASE, NEXT PAY ANNUAL START STOP SAUTAXES EMPLOYEE POSITION PAY RATE MO. "o PAY RATE (PER MO) SALARY I'IRSA1'K MO NIO FTE's & INS. I Maint. And Asst. Manager 2,520,00 1 5.0 2,646.00 31 301) 40.0 1.00 37.980 2 1 3.0 0.00 0 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 TOTAL PAYROLL TAXES GROUP HEALTH INSURANCE TOTAL GROUP HEALTH INSURANCE WORKERTCOMPENSATION INSURANCE TOTAL WORKERS'COM PEN SATION INSURANCE AT $150 Pcr month per FTE WORK % OFFICE 0.38% MAINT. 4.54% SALES 0.24% 11 of 14 2,830 1,300 1,440 LIMIT % OSADI 576,200 6.20% MA $130,200 1.45% FUI $7,000 0.90% SUI $7,000 3.60°'0 AT $150 Pcr month per FTE WORK % OFFICE 0.38% MAINT. 4.54% SALES 0.24% 11 of 14 2,830 1,300 1,440 Atli A 7 Alte[na Elva 2 CAM IAL KIPR(WENI \F5 m.Fm�O n':Il Pal ACCOW OF.SCRIPI ION )AN FE" MAR APR !IAN ILN R AI:G SEP OCT NOV DEC 101.0. RFNIARNA WINN DEPRECIABLE IMPRUNEME\IS I U n Q � n x . n f n ! n N II y It III u II n 12 n 1! II 14 U ENiAfle !.INA 21441 !.IM !!." DM 2.14x1 11.11 UvNI 2.14X1 !!UI igAl 2Jxxl 243.11 1411021 IOIAL 01iPRECMU IMPRONESIWS 2.1X0 !AXI 2.m1 2!xxI UM 1!4M 2JXN1 LMxI Lan 2.axl 2141 Lae '.tall 12 Of 14 0 • • Ad 0 .1. 10.7 e 2 LOAN DLSCRIPr10 DESCRIP rION JAN 11:11 MAR DIiOf S('IIEDCIX APR AI \Y AN JUL At SEP Mt NM DEC j,.r,b -m 0?:HPU FOCAL Community Utiliialio9 Pla a000M PRINCIPAL. \lo. Amon.• Loin It 0 0 0 Initial Piini4pnl SIMI O.0 Anaenim a. fears 5 rOf. \L PRINCIPAL 0 0 0 0 0 0 0 0 0 0 0 0 0 Intoost Rae 9.w.. DEFERRED INrERESr Loan If 0 Nou: PaymMCS bit in in yca fO fA L DEFERRED IN r. 0 0 0 0 0 0 0 11 0 0 0 0 0 too of thn, rorcast. IWEREST EXPENSE Loan nl 0 0 0 0 "fOrAL1NTEREST EXP. 0 0 0 0 0 0 0 0 0 0 0 0 0 13 Of 14 Add. .m 7 Alternative 2 I'em.is Courts (4) and 11 omrsites 02 Constracliul. Crsls 'Pearls Courts p Uuo Lm Midpoint knagtz ' Concrete. Poses: Nei. Striping 13.500 27.500 21.000 Maru6111 & Su i0 Srctiun 67 Page 6' l.ighling 6.000 $(ap 7.01x) Marcicdl C Swin Scction 67 Page 6 Fencing 4.750 7 -(X* 5,875 Marshall& Swill Sq.imr 67 Page Su6101nl 20,250 42.5110 15-4 13 •I.mil Cos. Mulliplier L17 .14.221 49.725 41.974 M.1,1.11 C Stli1't SMwa 99. Pagcb -Curren. Cost Mulliplier In 6.99 1.05 15.914 52.211 44.072 Marshall & Su ill Scction 99 Page 1 'Assure d Cost Mulliplier 7.99 -I 00 1.01 16.291 52.771 44.511 N Court Discount (5' -) 0.115 (IW? (2.617) 42. 26) Marshall$ Su ill Scoinn 67 Page (+ Calrulared Cost per Cam 34.473. 50.097 42.238 #Orcaurts 4 4 4 Total Calealoted Cost of Tennis CuaOs 117.911 200.157 I h9,1511 Ilomesltes Marshall & Swin'Gmd' Park 5 96 Engineering 705 Marshall A 51 ill Section 61 Page 1 Grading 645 Marshall R. Swill Section 63 Page.1 Sheet Paving 1.040 Mnmicill& Su9fl Section 63 Pagel Palias Walks 795 Mnrsdudl & Scrio Seclion 61 Page 1 Sewer 755 Marshall S Swin Section 61 Pace! Wafer 690 Marshall RSwill Section 61 Page 1 Electric I.L +o Mi simu & Sdin Section W Page 1 Buildings 0 No additional buildings projected Min. 825 6larsisdl & Suin Section 61 Page 1 Wmcr Fees. Meter and conacclion 260 City uI'Nc.po011rprh Scwcr Fees 455 City of Neapolt Rear. Subtotal 7.700 'Loral Cost Mulliplier 1.17 9.009 Minhill & Swin Saiion 99 Page 6 'Cu.mni Cost Muhiplicr In 6199 LOS 9.459 6 amliall & Swirl Section 99 Page 1 'Assumed Cost Multiplier 7.99. I-00 1.01 9.554 9 of I Iomesiles 1 t 114.6'19 Total CalanlNcd Cost of 1lonamdes Other Cosh. Ikmoli. ion, Rernmalof Faisting Couisand 6liscdknncous 100.000 Blinuile Total Curls 181.799 Before Rounding 14 Of 14 0 0 gkAq�'q�A (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, l tewart erks e, President 0 E 0 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 I e Street Newport Beach, California 92663 19 (949) 673 -5070 j (949 673 -9555 hftp:1/www.ca1eqionpost291.0rC1 �P�R f��yO .tom V�^r �i,� \2^ �= ' �jsi '1 The American Legion NEWPORT Roe: POST Newport 215 15th Street 070 HAND DELIVERED February 4, 2000 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 15t" 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. Very truly yours, PAUL N. CURTIS Commander PNC /ms P 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 11 (949 673 -9555 httg•llwww calegionaost291.ora 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 ................... ..............................a City Council Policy F-7 ............... .............................10 Other Considerations ................ .............................10 11 California Military and Veterans Code ................................ Comment ... ...................... Reference Material ..........................11 Appendix A — Copy of Existing Lease Appendix B —Aerial Photograph of Site Appendix C — Community Organizations that use the Legion Post 291 Facility 9 is 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 151' 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. 3 City Project Goals 0 High Quality Design The structures present at 215 East 15th 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. 4 • Respect for properly 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. • Provision for a secure revenue stream to the City E 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. 5 Form of Disposition • 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. 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 11. 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. 0 0 Financial Qualifications 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. 0 Project Description 0 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 TV, 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. 0 0 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. Implementation 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. M City Council Policv F -7 0 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. 0 10 iMilitary and Veterans Code 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 1 e 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 it's 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 • —L—E—A—S—E- THIS LEASE, made and'entered into this /,0 rAp day of - en A X e- M 1975, by and between the CITY OF NEWPORT BEACH, a chartered municipal corporation, hereinafter referred to as nLessor", and-NEWPORT HARBOR POST NO. 291 OF THE AMERICAN LEGION, a California corporation, hereinafter referred to as "Lessee": RE C I T L S: A. Lessor holds title to certain harbor frontage and tidelands, together with certain uplands abutting thereon located at 15th Street , and West Bay, 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 ficilities, 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 term of the lease for an additional twenty -five (25) years. C. it is the judgment-of the 'City'Council of the City of 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 jur2Vaent of Lessor that the leasing of the whole of said lands hereinafter desc?:ibed as one parcel is necessary for the proper deftlopmeat and use of said lands, water frontage and tidelands for recreational, public, civic, beaches, commerce, navigation and fishery purposes.,:. • D.,.., It is the judgment. of t-14 -City routtci,l of the City of k1e.W1?o_-i%ieach that the leoriiwig of :aid lands. I.; o j:.P�ni;ea, upon the the trust .imposed upon such portion of the lands hereinafter described, wb�ch may constitute tidelands, and it is further the Judgment of the City Council of the City bf Newport Beach that the leasing Of said uplands as hereinafter described upon the condition nn this agreement specified, is for apublic purpose and does not s Violate ' the'COnstitution of the State of California and is permis- sible under State law. ' E. Lessor ro 0 P P ses. to lease to Lessee the premises described hereinafter, and Lessee is willing 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 UAL C FOREGOING RECITALS AND THE .MUTOVENANTS set forth below, Lessor and Lessee hereby agree as follows: I• 'DESCRIPTION OF LEASED PREMISES Lessor hereby leases, and Lessee does hereh . lease of the and boat a • _ property, buildings and related parking and boat facilities located at.-15th Street and West Bay, as more described in Exhibi .particularly t "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 15, 1975, and expire on March 15,2000. _ III. USE Lessee shall use the demised premises, together with the E?uldings., 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 r not discriminate as to race, color, creed or the civil rights and liberties of individuals subject to the normal rules and operating I procedures of the American Legion. Lessor retains the right to locate an Acquatic Center in the area formerly used by the 1 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 i to use its,boat launching facilities in, connection with said 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 iecreation instruction facility by the City Parks, Beaches 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 BUS INESS.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.. .. -3- VII.,`"g TAXES AND UTILITIES Lessee shall promptly pay for all utility services Wynished to it and shall pay before delinquent any general and special taxes or assessments or other governmental charges, if 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 term hereof, or may be imposed upon Lessee as a result of its operations under the lease. Satisfactory .evidenceof 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- ' mentsofany 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 diiigently 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 provided shall be a 24 -hour notice to'remedy; in all other cases fAt shall be ,a 5 -day notice. ' E 0 �J I8. „INSURANCE -.HOLD HARMLESS 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 Dollar ($500,000.00) for injury or death of two or more persons; and Fifty Thousand Dollars ($50,000.00) £or 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 City of Newport Beach, its officers, agents and employees., free and harmless from all damage, claim, loss or liability of any.nameor nature whatsoever which the City of Newport Beach, its officers, agents or employees may hereafter sustain or incur; or may be' 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 acertified 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, employees or representatives to 'enter .the leased premises to inspect the same or any part thereof at any time and to attend to or protect the L sor'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 NewpertBeach or any other governmental body or agency having lawful ursidiction over the leased j Y 9 Y n9 7 Premises or the business, enterprises or activities conducted thereon. i XII. ASSIGNMENT !. Except as provided in .paragraph IV hereinabove, Lessee shall not assign, transfer, sublea3e 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 a 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 immedia£ely 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 `er termination of this lease, any additions or improvements made i 0 upon the.demiseR premises shall become the property of the Lessor. XV. DEFAULT AND TERMINATION OF LEASE A. Default - Time and each of theJterms, 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 required-, 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 IIoon Termination Lessee covenants and agrees that upon the expiration or sooner termination of this Lease, the Lessee will ' peaceably surrender-the leased premises with all,buildings and improvements, in the same condition as when received or constructed, reasonable use and wear thereof , and damage by..fzre, Ac 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'. 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 the termination of this Lease, whether by lapse of time or by reason of default. ' C. Remedies Cumulative �Z� 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 exercise of one or more rights, powers, elections or remedies shall not impair or be deemed a waiver of Le' ssor's right to exercise any I 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. .. . ff. Holding Over #t is mutually agreed that if the Lessee . shall hold over after the expiration of this lease for any cause, such holding over shall be deemed a. tenancy from month to month only,, /-up on the same terms, conditions and provisions of this lease. XVI. NOTICES 'St 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 orcertified, 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 it 211'15th Street, New Beach, California, 92660 or at such a"ther.address as may be hereafter furnished to the Lessor in writing; -8- i i 0 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 activitiesof 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 audit._ by the Lessor, its r . 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 borneby Lessee. i XVII2. RENTAL •''tea A. _Building Facilities Lessee covenants and agrees to pay'to Lessor - .a minimum rental for the use and occupancy of the building facili- tieslocated'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 (10.0 %) of the revenues derived from the parking lot, payable monthly. Lessee shall purchase ._a_ minimum of twenty-six x(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 w gross revenues derived from the new marina slips.. . D. Dry Boat Storage .. Lessee covenants and agrees to'pay to Lessor' the sum of fity percent.(50%) 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. i _ e�A . facilities. Upon payment of the entire debt incurred for the cost o£ the new dry boat storage and locker facilities, Lessee shall pay to Lessor the sum of fiftypercent (508) 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 an d^ 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,"axecutorsi administrators, successors, assign, 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 paragraphshall- in,any way alter the provisions herein 'contained against assignment or subletting or the granting of licenses or concessions. h B. Captions The captions of paragraphs and subparagraphs of this Lease are 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. i CITY OF NEWPORT BEACH a municipal corporation M A parcel of land situated in the City of Newport • Beach, California, being a portion of Lot 4, Section 33, To•.anship 6 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 point'in the northerly prolongation of the Westerly line of 15th 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 90 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. 2341 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 90,431 30" Easta . distance of 140 feet; thence south 800 16' 30" East, at distance . of 146 feet to the point of beginning. RESERVING for street purposes a strip of land 50 feet in width, lying 25 feet on each side of the following described center line: Beginning at a point in the northerly prolongation of the easterly line of Lot 13, Block 115, as shown on a map of Tract No. 234, recorded in Book 13, pages 36 and 37, Miscellaneous Maps, Records of Orange County, California, said point of begin- ning being 135 feet northerly of the northeasterly corner of said Lot 131 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 point which is 146 feet westerly of the westerly ' line of 15th Street. .• ,_, BRAIBIT "A" Appendix B fxa PL V b "d 77777777 • 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 Rohrbacheris 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 Report of American Legion Post 291 Tidelands Lease (Substantiated by Documents) t Introduction 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. 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 American 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,1949: "Groundbreaking ceremonies were, held and construction 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 E1 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. 0 J 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, 10% 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- cally, 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 60% 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%, controlled public use. (Refer to pages 7, Sa.,z�tt —i�� 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 10% 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. 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 3 r1 LJ CITY OF COSTA MESA CALIFORNIA 92626 P.O. BOX 1200 i J ` FROM THE OFFICE OF THE CITY CLERK A� 4`� ^NOFIIYU9 \`% January 22, 1908 Honorable City Council CITY OF N3 FOnT MACH Newport Beach, California Dear Madam ann Gentlemen: 1 was City Clerk of the City of Nowport Beach at the time the lease to Newport Harbor Post ,'291 of the American Legion, covering the tidelands property at 15th and nay Streets, was - xtended. "_s 1 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 Legion and Civic hall 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 0 /4� JOIN J. SAILORS 213 N'G8T I -ALM AVI4NU6 EL 96CUNRO, CALIFORNIA s� j s . +11 l.i, L. [�A111111-h /L Ut. , N'.! ) r`;�;itan.da: C[rl!<'gIL+/ .�:h'. Vi(U:h'lL, :• [!u'.' Uf': "( /;'r[.Ct� L(' [r /i(t ✓�' 1.3 +:1r1 /iccu.:.i.('f '. L. /. / /:1 .ii ,�.. J.i. pA .. .. , .l [i.L.t.% t-<[ .i.[+1.":. `. / [' U[! 4 /.'tJVli.J1 i .J /t 6i fl /uJ1JLUJR 1:� aAjo,:,._ Ue l.Jt uC:CUJU.1rj'1Cc' f /'!T.'t UI('. .fJ[.i.['J Li. Or. :il /C L[iuJlce.i ,i UC1::.4 po -61'. [ L ChLLR �. f�EUItA r '✓ (Retyped for easier reading) Honorable City Council City of Newport Beach Newport Beach, California Dear Madam and Gentlemen: January 31, 1968 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. 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 11Jewport Beach to extend this lease as requested by your local post. Yours very truly, 15 ©.ELL, PrnPru'for • . / �� .�r.y rya f.! v.�.':�w " +'f%� U'!'.''r��til,lf 1 I "EVERYTHING r'C'lR 'fr -f5i PLASTERER" r NEWPORT BEACH, CALIFORNIA October 12, 1967 City Crjuncil rirwport beach, California ii,`a r hfadam and Gentleman: f I the undersigned who was Mayor of the City of Newport Beach :nd s:gne.r of the last lease to the Newport Harbor Yost #Z91, of • the. American Legion on the tintlands property located at 15th and Ray Streets, would like to make the following statement This '.ease was passed: extending, the previous lease to the Legion carrying out comrnittnieits of the City of Newport Brach; that this property was being let,5ed to the Legion for a permanent .o, at %un for. a Legion. and Civic Hall.._ would like to see the City C„i.ncil extend this lease per the requ.'st of the members of the Nev.'port ;Iarhor Post #291 of the American Legion. Your'. truly, • I�lt: L. %. Isbell LI:If Sanua.ry 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 II 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 �! • 0 u Y3S YOUTH EMPLOYMENT. SERVICE OF THE HARBOR AREA • 642 -0474 LOCATED IN THE BOYS CLUB • 594 CENTER STREET, COSTA MESA. CALIFORNIA March 19 1973 American Legion Hall 215 15th Street Newoort Beach, California 92660 Dear Sirs; The Board of Directors of the Youth Employment Service are very grateful for your. participation in our first "A Ronan Feast" benefit. The facilities at the American Legion Hall were ideal • and everyone we had contact with there were so h-tlpful. Our volunteer chef,.Mr. Lew Yantorn of the Boys Club enjoyed the conveniences in your kitchen. Y.B.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 g Recording Secretary PRESIDENT SECRETARY- TREASURER NEWPORT HARBOR LAWN BOWLING CLUB GREENS AT 151. 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 Idembers 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 1;eeting, and a copy be forwarded to the American Legion Post No. 291, Newport Beach, California. Yours very truly, S J. yn Sec re ary E 0 • First American Title Insurance & Trust Company 421 NORTH MAIN STREET SANTA ANA,CALIrORNIA • KIMBERLY T -)]TI ROY V. SNAFER Senior Vice F,c idcai and C4ic( Coa.e7 March 19, 1968 Mr. Harry Eatus 610 Tustin Avenue Newport Beach, California 92660 Dear Mr. Eatus: 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 r . 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 rt for over 48 years. Roy'V. hafer Senior Vice President and Chief Counsel RVS:amm 0 A it First American Titletinsttranf-e & Trust Conapeny 421 NORTH MAIN STREET SANTA ANA, CALIFORNIA • $47 -6802 Ilila'CORT EABSOR POST. M. 291 OF T1-11Z A1; ICAN LEGIOtf % ;R?. W.RRY Ro:U3 610 'rJSIIPI A'> -14UE tali -.TORT B -;CF, CALIFORN!it 9.650 Your No. Our Order No.. OR 105P441;, The following is a report of the title to the lend described in your application for a Policy of Title ;nsurenca and is made without liability and without obligation to issue such policy. In addition to any exceptions shown herein, and 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, J Q63 at 7:30 a.m. TITLE 01 ICER , Ed Brouillard ' VESTEE: CIT'f,OF MPeTCY.0 B Wff, a Municipal.Corporation..,. Tnasts,.for the uses and parcoses and upon the exprees ccr_^dt ions. as provide @ "iri ` "An <('et:Gr ntinr cert °i:n tidelands and suhmerged l ds.of e the State of California'to the City of _Tie port Beach, upon cea-tain trusts end .. conditions, ",;.approved May 25, 1919 as amended by "An Act relattnu to.tae Granting of.Franchises u_ron, and J_ea,es of, certain tidelands heretofore. granted to the City of hev-o -t Beach by the State of Cal' 'iforni ," approved May: 29,'1929.and the rights. reserved therain to the people of the St'a` of . California, and the trusts for the u cs and g:t:pos_s and upon the ex_oress bonditiors as'.%Tmvided in "An pct gr=ntin- certain tidelanda. :urd sub7.ert;ed lands of: the..Stite of California to the City of Vewport Be-.ch upon'certain trusts and conditions," approved .. ".:ori' 5, 1927 as amended by "An ,pct relating to " the granting of franchises upon., anti lea:.es of certain tldAlct ^as heretofore ranted to the City of Ilc,,�ort Bench by tPe Silt° o: C.^-_li Orl2te.," - :,pprOfed rt°.y 29; °19eQ and one rights reserved therein to the people of the Stage of California S_id TnzstIs Affect that r,ortion of said land t' r °_o° w:7ic;, lies IiortnErly_.: of the Northerly line.of Lot 4 of Section 331 ibansinip 6 _out h) Ra:nre 10 ?'eat; S. $.' B.' & I-i. ::ecordirg to Govea :nraert Survey. (ccnt_nuea) OR 1057444 .: • DESCRIF-21Old .. J aa�• All that certain l r_d situated in the State of California, County of Orange, City of Newport Beach, described as follows:. rA,;41sXC eV of lend situated An ,the Citypjof;_Newport Beachp tCalifornia,•,-bj e portion of Lot 4, Section 33, Toanship..6`South,` :Rangy 10 West, & M., a portion of Lot 4, Section 34, Township 6 South,'R;nge 10 West, S. B. B. & M., and certain filled tidelands described as follows: Beginning at a point in the Northerly prolong tion of the Westerly line of 15th Street, as said 15th Street is laid out and sho•.m upon a trap'of Tract. No. 234, recorded in book 7.3, pages 36 and 37, Miscellaneous Maps records ' .of Orange County) California) said point of beginning being 160 feet North- '. erly from the Idortheasterly corner of Lot 4,.Block 115 of -said Tract No. 234; runn,n,g thence.North 9° 43' 3p" East along the Northerly prolongation of the Westerly line of said 15th Street a distance of 109.79 feet to an intersection with t'se United States Govermnent Bulkhea line a weep -ion No. 118 and Station 119, as said bulkhead line is-sbo'hn upon a map entitled "Harbor Lines - Newport Bay, Newp -srt Ii�rcor, California," approved M_y 2, 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, g, .cet— to- -'-'nMersection with the Northerly prolongation of the Easterly Tine of Lot 13, Block 115 of maid Tract No. 234; thence South 9° 43' 33" West along the said Northerly prolongation of the.E:sterly line of Lot: 13, a dista.nce.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 P?ortheily line of 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 of 146 feet to the point of beginning. ". - st M-vld Plats enclosed The information herein set forth is supplemental to Preliminary Report No OR 1057444 and is made a part there:. according to the public records there have been no deeds conveyn the property described in this reoort reco e within a.period o s x months prior o r•e awe o this report except as follows: P ?one Page 2 0 l5 4a-"N' Meeting Date: August 22, 2000 Agenda Item No.: 22 Subject: RESPONSE TO REQUEST FOR PROPOSALS FOR FUTURE/USE DEVELOPMENT OF MARINAPARK. SUPPLEMENTAL PROPOSALS F' fi a AD 4r All r' �r�• �, _ 111 �"at' j� 1 �� y' F � � ccOMElZb FIN ei NImpar -t B eadvR eso� • 0 4500 Campus Drive, Suite 500, Newport Beach, CA 92660; (949) 757 -1662 Fax(949) 660 -1252 n U • 0 TABLE OF CONTENTS PAGES 2 -5 Response To Request For Additional Information PAGE 6 Dimensioned Site Plan (Reduced) / Mounted Full Size Plan Submitted Separately PAGES 7 -8 Attachment 1 PAGES 9 -10 Attachment 2 PAGES 11 -23 Attachment 3 � / K ! 4 / / 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 seepage 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" 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. 15'" 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 3 ", 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 3 ". 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. r- J t a 7 Y en A SL" r�I1E11C rWr�nm ICHCM61 SITE PLAN murnss � � s rM Fyn. '.• u . M1aR�u.4 �R�vD. Simidul Ttlla NwpReflry Navpart8ra`h.RNmS .�.. .....�..e.. rug s�uv�r. 0 0 T H E S P 0 R TiS TIIE SPORTS L:LC6IEA TIIE SPORTS ILI:Bl1kV1sa July 6, 2000 Mr. Stephen R. Sutherland Stephen R. Sutherland Company, Inc. 4500 Campus Drive Suite 500 Newport Beach, CA 92660 Dear Steve, (JTT,JCJ+MEXrT -I- C L U B C O M P A N Y REE911R SPURTS. CJLVSI \1' TIIE SPORTS CLERILAS VEGAS 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 I 1 100 Santa Monica Boulevard • Suite 300 • West Los Angeles, CA 90025 (310) 479 -5200 • Fax (310) 479 -4350 7 s THE S PORfT S CLUB /IRVINE ",Simple the finest sports and fitness complex in the Wlodd. " • Sister Club to The Sports ClubAA and Reebok Sports Club /NY • 14,000 sq. ft. state-of- the-art Coed Weight Training Gym • Two Z 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 • Treadwali Rock Climbing Simulator ;7 itacqueroan �uum 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 0 0 0 REGENT I \TF]IHA?IOYAL HOTELS Numbwor Days OpnlNear Available Roam (Daily) Available Ragas (Armuelly) Occapmay Peremage Oacupicd Ranms(Annually) Avenge Dv'ly Rate RFyEh111FS Rooms Ynks (Iwo v(aAgc) Food Bewaage Spa Telcomase Minor Opcmled xscpetlmenls Rena :& Other income TOTALREVENUES DFPARWENP 1�E-S ROOMS Yecbm (IWO vinlap) Food &RnWage Spa Telepbona Weer Deparlmevels TOTAL DEPARTMENTAL EXPENSES HOUSE PROFIT Adm(niabviev & General Marketing (TcdM Eaergy & Willies Pmpa(y OPiR1m1l & MINI11ltnma TOTAL UNDISTRIEUTED EXPENSES ee- Memilemnl Fees ZBFC EMED CHARGES Leases Pmperry Taxes lAtueaaoe Rese ray Replacement TOTAL FIXED CHARGES EBITDA 20D3 365 156 56.940 66.0% 37,560 Ss"JW Amaunl. Ratio $13,153.100 55.7% 5443.676 1.9% 4,906.500 20.85E 2,899 ,200 12.3% 1.115.100 4.7% 660A00 2.8% 236,408 1.0% 379;500 0.8% $23,59).876 100.055 %2,801,200 21.3% 5133.103 30.0% &957.900 8%1% LOW= 95.8% 396,300 60.0% 141,800 60.0% I IA91J03 41.7% 512.095.173 513% 31,785.500 7.6% 1.629,700 6.9% 496300 1.9% 939,100 4.0% 14402600 200% $7,292.575 30.9% $702400 3.051 $6,584,773 27.9% $1.2001000 5.1% 330000 IA% 175.606 0.756 235,900 IA% 51941,500 8.2% "MW I r„ 365 156 56,940 76.0% 39,858 $367.00 Amounl Ratio 154,627;900 56,9% 1156.986 1.8% 5,221,0615 20:3% 3.019,201) 12.M 1,188, :00 4.6% 7D4Dw 2.8% 251.100 1.05: BMW 0.7% 525,740,616 100.0% 52,967,100 203% S137,096 30.0% 6.831,500 921Y. 1,106,400 93.(% 424,800 60.0% 151,100 60.0% SIIA24.996 45.2% $14,115.696 54,1% 51.771.500 6:7% 1.455,300 5.7% 465.500 12% 991,870 3.9% 57,644,100 41.0% 19471.59D 36.8% $772 ,200 3.0% S8.6991396 33.1% $1.400.000 5A% 336,600 1.3% 180,800 0.7% 2005 36s 156 36.940 75.0% 42,705 S379-OD Amaunl Ratio 516,142.500 57sA. 5470,695 1.7`6 5,609,200 20.0% 3 ,214300 1.1.856 1 ,274,100 4.5'.6 764,900 2.7% 270.200 1.0% 203,9DD 0.7% 528050,695 100.0% 33.161,500 19.6% 5141.209 30.0% 7.330900 80.0% 1,147,200 90.0% 459,000 60.086 162200 60.0% 512210009 435% 515,64007 56.5% S1401,500 &4% 1.524,300 5.4% 4143DO 1.7% 1053,2DO 3.8% 54 ,963.310 17.3% $10,977.367 39.1% 5841.500 3.0% 510.135,617 36.1% SIA00,000 50% 343 ,232 11% 186,300 0.7% 2606 305 156 58,940 76.6% 43,274 5390.00 Amami Raba 116,977AN ST.7% $061,916 1.7% 5.825.700 1919% 3,441 ,200 11.8% 1,323 ,500 4.5% 795200 2.7% 281500 IA% 211,610 0 W 529,257,516 1000% 53,2710D0 19.4% 5145,445 302% 7,372,706 19.6% 1,183,200 19.41A 477,200 602% 161,406 60.0% 912,624945 43.2% 516,6.12.571 5618% $1.159200 6A% 1.575.300 SA% 499400 1.1% IA91,300 3.7% 55.025.600 17.2% 311,586971 39.6% 5877.100 3.0% S10,709AM 3616% $1,400990 43% 350.199 12% 191,900 0.7% Neupnd Bach 0. Petal, 071MOM 1-48 FN 2067 M5 156 56,940 760% 43,274 S401-ft Mount Ratio 117,353000 57.7% t499361 13% 3.998A60 19.9% 3,544,400 11.9% 1 .363.200 4.5% 119,100 2.7% 289,000 Lots 211.000 0.7% 530,084,461 100.D% 53.376,400 19.5% S299 .616 60.056 7,593.100 79A% 1.211.700 690% 491,500 600% 173A00 60.0% SI3,153A 16 43.7% $16.931044 563% SI,915AOD 6A% 1.622.500 5.4% 514,900 0% 1.124.000 3.7% .55,:76,300 171% 514754.744 39.1% 5902,500 3.0% 510,852,244 36.1% S1A00,000 4.7% 357,703 1.2% 197AN 0.7% 1103A00 4.0% $4 56,009.790 233% 57 ,564755 263% 57490.673 27 -0% 57,694.012 25.6% Tie ebose projectimsrm the propmed Reseal. based open Wel-M tians sod WimemsrdRe Me sabjed to encenainry and ♦ari21Ion. In addition, R.Sem makes awumP"ll ax la the Ibiasc bcfiaviorarawuners and ehe general eoanaaY. whleh see highly uncertain.,. These(kem. Regent makes me wmsmmry. or my kind, that the po)atimn evil be blewd. Page l 07 2 3§ rA 0 RECENT INTF.RYATIOiVAL HOTELS N.bw of Days OprNYear Available Rooms (Duly) Available Room, (Annually) Oocirpmv peramlage Occupied it..(Anooally) Avenge Daily RW RF.19�?rDF� Rooms Yscbla(Mo vmm8e) Food Rersretta Spa Telephoas Minor Dpetaed DcpmOOents Rents & Other Income TOTAL REVENUES D PA1IF� TMENTAL xE- VFNSM Reams YIdla (lave Vintage) Food A Rnvrop Spa Tdepholla Olher Depmlments TOTAL DEPARTMENTAL MA HOUSE:PROPIT Administralve & Genenl Marketing (Tmd). Fnmgy'& Ud81iu Pmpmw Optmtlone& Mainteaanoe TOTALUNDISTRISU7ED EXPENSES GOP Managonerra Fees IRTC kumo- 11ARC.ES Leases Property Twos Inlermla Rnemv for Replaosmml TOTAL FIXED CHARGES 2000 2009 365 365 156 156 56.940 56,940 76.0% 76.0% 43274 43.774 5413-03 3475A2 Amoow Ratio Amoual Rado .$17.873.600 57:7"2 511.409.800 57.7% 3514.342 1.7% 5529.777 1.7% 6.178,400 19.9% 6,763.800 19.9% 3,650.700 11.1% 3.760200 11.8% 1.404:100 4.5% 1.446200 4.5% 143.700 7-7% 169400 7.79: 797.700 1.0!5 306.600 IAl% 734.500 0.7% 731200 0.7% 530.987.042 10&0% 531:916.572 100.0% S3A77.700 19.5% 5308,806 604% 7.82100 79.6% 1.253,300 89.4% 506200 6a0% 178,600 410.0% $13.548.005 43:7% 317139.037 563% St.97730D 6.4% 1.671200 5.4% 530.200 1.7% 1,157.700 3.7% 55.331AW 17.2% 317,107.437 39.1% 3929AN 3.0°% 311:177.837 36.1% SIAD&0D0 43% 364,347 1.7% 703.500 QT.S 53:382,800 19.5% S317.163 60.0% &056 ,100 79.6% 1.293400 89.4% 521,400 600% 1141)00 60.0% S13.954A63 43736 $17. 967.109 56.3% 37031.700 6A% 1.77r 400 5.4% 3411,100 1.7% 1.19L400 3.7% 55.491 600 172% $17,470,509 39.1% 9957.500 3D% 511.513 .009 36.1% 5IA011,000 4.4% 371.634 12% 209.600 0.7% 2010 365 156 56.940 76.0% 43.274 5138:19 Amsuo4 Ratto 818.962;100 57.7% 5545.66" 1.7% 6,554.700 19.9% 3,873.000 II.6% 1:489.600 4.5% 695.100 L7% 31 S;e0D 1.11% 238.100 0.7% 537,874.065 100.0% $3;689.501) 193% 33177:399 60.0% 8297.900 79.6% 1.331.160 89.4% 537:000 60.0% 189.500 60.0% S14 373.099 43.7% SI &500.966 $6.3% 52,097.700 6A% 1:773000 8.4% 567.300 1.7% 1278.700 3.7% 55A36.01) 171% 517.844,566 39.1% 593&2w 3.0% 7011 156 56.946 76.0% 43.274 S451J3 Amounl Ratio 519.531.000 57.3:5 S567.035 1.7% 6.751.300 19.9% 3.989.700 1. 1.8% I ,334.300 4.5% 921000 7.7% 325.300 IA% 745.200 &7% 533.860.335 100.0% 33.100.200 193% 5337,221 611.0% 1346.100 79A% 1]71,800 19.4% 553.100 60.0% 195200 60.0% S 14,804,371 43.7% 519.056.014 36.3% 1Se6vpon.Beach WGJcdim PLEXIs 07/142000 1:48 PM Approved by:_ Dec_ Will 365 156 56.940 76.0% 43.774 3464.87 Amouol R280. 520.116.900 57.7% 55T&196 I.Y.1 6.953.800 19.9% 4.10&900 1 L11% 080.100 4.5% 949.700 7.7% 335.100 1.0% 257.800 0.7% S34.e76.196 100.0°% 53.914,200 19.5% 5747.338 .60.0% 8J03.200 79.6% 1.413.000 194% 569.700 6G0% 701:100 604% $15246.5311 43.7% S19A77,651 Sd .3% -0:155.508 6A% S2.2R1.200 6A% 1.8766200 3A% 1.881.000 3.4% 579.400 1.7% ."6:800 1.7% 1265,000 3.7% I:103,a70 3.7% S5;11M,100 172°6 56.001000 17.2% 513279,914 39.1% 513.626058 39.1% 31.015,800 3.0% 51146 -300 3.0% 511.855,366 36.1% 517.714.114 36.1% $12380 .358 36.1% S1A00A00 4.3% "1.478-000 421% 51.436.560 4.2% 379.066 12% 386,641 Ll% 394-361 1.1% 715.900 &795 227:400 0.7% 729.100 a7% ERTTDA $7970490 357% 5/455075 75.9% 58341,400 76.0% 31,82706 7111% 39,103,318 263% The above pm)eerions for the proposed RcewI =based Upon msuraprious and eslimalu Ihdmesabied to unoeriatoty mid vadstiom In addition, Reece make, ate mplins ft to the fame behavior of consumers and the gourd MOWW. xhich am highly uncertain. • Thecefine. Regent makes nowartmay, of WY t the proicefloos ill arbinad.. . 02 1 • 11 June 28, 2000 Mr. Stephen Sutherland Stephen R. Sutherland Company, Inc. 4500 Campus Drive Suite 500 Newport Beach, California 92660 Dear Mr. Sutherland: ftTT7c+4dT1e11y1 6 KF CONSULTING 011 Wilshire Building Suits 600 Los Angeles CA 90017 Telephone (213) 680.0400 Teletax (213) 6258240 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, 181" Street to the west, 15'h 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 151' Street. 11 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 is 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. 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. 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. D 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. r1 LJ 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 Compato, Inc. Regent Hotel, N",port Beach 13 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 285 285 265 285 290 295 295 295 295 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 19B 198 198 19B 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% 17J 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 Company, Inc. Regent Hotel, Newport Beach 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. YTD reflects the period from January through April . source: PKF Consulting Stephen Sutherland Company, Inc. Regent Hotel, Neevport Beach 15 II bLUFM4I Md UKCI rCUIUVIIIII MU VI IIIC a.ou, c o4Y 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 NIA 1997 482;895 0.0% 388,638 2.1% 80.5% 243.97 10.4% 196.35 1.2.7% 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% 99ytd* 160,965 NIA 1 125,031 NIA 77.7% $277.53 N/A $295.58 N/A 00ytd* 178,850 11.1% 139,997 12.0% 78.3% 303.65 9.4% 237.69 10.3% YTD reflects the period from January through April . source: PKF Consulting Stephen Sutherland Company, Inc. Regent Hotel, Neevport Beach 15 6 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 I Ratio •. Commercial 80,100 21% Leisure 125,900 33% Group 172,000 46% Total 378,000 100% 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, Inc. Regent Hotel, Newport Beach 16 • 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. 0 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 Compony, Inc. Regent Hotel, /Voiport Beach 17 Stephen Sutherland Camparo, Inc. Regent Hotel, Newport Beach • • 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 5t. Regis Monarch Beach Resort 133 267 Treasure Island 338 137 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 5upply 585,460: 733,285 928,195 1,089,525 1,163,620 1,163,620 1,163,620 11163;620 Growth Over the Prior Year 21.2% 25.2% 26.6% 17.4% 6.8% 0.0% 0.0% 0.0% IN DUCE DAU N5AT15FIED) 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 16,600 28,100 19,400 8,800 0 0 0 TOTAL INDUCEDAUN5AT15FIED) 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 1.12,076 115,438 118,901 Induced/(Unsatisfied) 5,800 0 0 0 0 0 0 D Total 93,900 98,600 102,600 105,600 108,800 112,100 115,400 116,900 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 Inducedl(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 1.8,600 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 Camparo, Inc. Regent Hotel, Newport Beach • • 0 • 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% 21.8.58 -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% 807,190 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% 75% 377.00 3.0% 282.03 7.0% CAAG 1 10.3% 9.5% 1 1 3.2% 1 2.4% Source: PKF Consulting 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 Sutherland Company, Inc. Regent Hotel, Newport Beach I5 The Regent Newport Beach Market Penetration and Projected Occupancy 2003 2004 2005 2006 2007 'AL ROOMS AVAILABLE Regent Newport Beach 47,450 57,670 57,670 57,670 57,670 ipetitive Market 1,089,525 1,163,620 1,163,620 1,163,620 1,163,620 Share of Supply 4.4% 5.0% 5.0% 5.0% 5.0% TOTAL MARKET DEMAND SHARE OF DEMAND 105,600 108,800 112,100 115,400 118,900 262,900 290,100 304,600 316,800 329,400 342,400 371,800 390,400 406,000 422,200 710,900 770,700 807,1.00 838,200 870,500 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 SUBJECT PENETRATION 5,100 6,500 Commercial 110% 120% 125% 120% 110% Leisure 110% 120% 125% 120% 112% Group 90% 90% 90% 90% 90% NIGHTS CAPTURED rcial 5,100 6,500 6,900 6,900 6,500 12,600 17,300 16,900 18,800 18,300 13,400 16,600 17,400 18,100 18,800 CAPTURED DEMAND 31,100 40,400 43,200 43,800 43,600 T SHARE CAPTURED 4.4% 5.2% 5.4% 5.2% 5.0% LL MARKET PENETRATION 100% 106% 108% 105% 101% T OCCUPANCY 66% 70% 75% 76% 76% T MIX ,rcial 16% 16% 16% 16% 15% 41% 43% 44% 43% 42% 43% 41% 40% 41% 43% 100% 100% 100% 100% 100% PKF Consulting Stephen Sutherland Company, Inc. Regent Hotel, Newport Beach 20 10 n •I •I 11 . 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 0 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 NIA 31,100 N/A 66% 350.00 3.0% 229.40 NIA 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% 1 401.00 3.0°% 303.17 2.4°% 101% 107% CAAG 5.0°% 8.801. 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 Baltin Senior Vice President Stephen SutherlandCompony, Inc. Regent Hotel, Nmvport Beach 21 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 consultanPs 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. 0 22 0 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 orattendance 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 fling 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 0 0 Sutherland Talla Hospitality Copyright 2000 All rights reserved 4500 Campus Dr., Suite 500, Newport Beach, California 92660 • • 0 City of Newport Beach Marina Park Request for Proposals Additional Information July 17, 2000 1 f Terra Vista Management ! i I Marina Park • City ofNewport 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 -31884 Re: Marina Park Dear Ms. 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 Managnient- Michael Geltand Director of Finance ofTena Vista Management- Richard Newman, CPA Architectural- Timothy Rhoads Associates, Newport Beach, California Homeowner Association President - Stewart Berkshire is Marina Park City of Newport Beach Request ti)r Proposals Additional Information Project Manager: Michael Geltand (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 370 -space mobile home community and 224 -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: Cerra Vista Management operates three properties on Mission Bay in San Die-o. California. The properties were given to the City of San Dievo as part of a tidelands (Trant, and as such, are subject to all of the State of California Tidelands requirements. Terra Vista Management and its affiliates have conscientiously managed these properties within those boundaries for over 30 years. B. Project Description: ( O'here applicable. the discus.vi )n thGI'olloirs i -till reference :-llfernutive J and .-lhernative 7. us described below in project description). Parcel Sizes: The parcel size of alternative I is 4.27 acres. The parcel size of alternative 2 is 6.2 1 acres. 1) Marina Park • City of Newport Beach Request for Proposals Additional Information Project Description: Alternative I 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 sunroundina 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 featurinfy trellises, planter bores. 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 existing easy public access and parkin, currently existing on the west side ofthe mobile home park, improved beach access along the east side ol'the property could be added. An arbor could. be constructed over the existin, 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 for joint use with the American Legion. 4 at Balboa Boulevard and 6 -4 at the Balboa and 18"' Street lot • Enlargement of the existing 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 Lesion 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 I 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 o!' Newport Beach Request fur 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 wc1l 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 Tax For the Next Three Years: There are no projected retail sales. transient occupancy taxes or property taxes included in this proposal. However, approximately $139,000 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 parking stalls will providc a significant amount ofrevenue 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 ofapproximatcly $1 50,000. Cost and Revenue Pro forma: The cost of Alternative I is approximately $25,000 to Terra Vista Management. Residents of the park would be responsible for enhancements to their individual home sites. The $23.000 would pay for the aesthetic improvements contained in Alternative 1. The cost of Alternative 2 is $400.000. The $25,000 costs of Alternative I would still apply. The additional costs are to pay $170,000 to demolish and construct four tennis courts, S 120,000 for the cost of developing 12 home rites, and $35,000 for additional community aesthetics. Under this alternative. Terra Vista Mana-cment would finance and manage the construction project, following city approval of the plan, and subsequently M 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 $12,036,640 (before rent credits), respectively, over the 10 years immediately following execution of the lease. The annual lease payment total, guaranteed by Terra Vista Management, would be the greater of 75'%, of the property's gross income or $1,000,000, adjusted annually by CPI. 0 R • Altdotive 1 • 14�oun rtes Yclr I Yrar'_ Ycm 3 Ycm- 4 Yen] 5 Ycm 6 )'car 7 Year 9 Ycar 9 Year 10 RISCRIII HON I'mjcction Pro.1cunon Projection 11rojcclion projection Projection Projection Projection Projcclion Projection I Total Income 1199,656 1.325,649 1 351. 1 6? 1.379105 1.406.789 1.434.925 1,41630623 1,492.396 1.5,3.7;4 1.553,209 2 1lonte0111cc6spense 1170.951)) 1174.369) (177.457) (131:114) (185042) (138:743) (192.118) (196.368) (200195) 1204301) 2 Nnnagcr I:Xpcnse (94.4 -I ;) 001.432) 32) (103.460) (105.5,91 1107040) ( I09.793) (111.989) (114.228) (116.513) (113.843) Tomlfspcnsei 1_271) r.;) (275.4) 1) ('_81. ?17) ('_86943) (292642) (293536) (304.5(16) (310.596) (316:303) (323.145) C•a h Flow Subtotal I.o291h3 L049.848 I.t17O.845 I.09L262 L 4.107 1.136.;89 1.159.117 1. 182.300 1._'051)46 1,230.064 Capitallnlprovemcnu 1'_4011)41 12-1.431)) 1'_4970) (_'5.469) ('_5.978) 1.2 6.498) (_27,033) (27.568) (28.1_11)) (23,632) Interest ) 0 0 U 0 Principal n li 0 U 0 Capital Utility lulpl-memcnr 15.2631 (5.364) (5.416) (3.585) (5.697) (5.3111 (5927) (6.045) 16.166) (6290) 3 Base Rim to City I IAU),()UO 1.n20.00O 10411.400 1.061.208 1,082A32 1,104.081 1126.163 1,143.686 1171.659 1.19;,093 4 Resales lo to City 54.000 42,840 29.131 22,85 22.731 2 3, 186 23,649 24,122 24,605 25,097 Total Rcm to City 1 1158 000 1 062.840 1,069.531 1.083.493 1,105.163 1,127167 1.149.812 1.172,808 1.191; 264 1.220.190 Fooutotci: I Ycar One 61,111110). RcIlLul Ralcs: \Yuicrli'ont- $'_.31111: \4;ner� sew $ L3UU l Innis Vicw $10600. Ratcs arc adjusted by CPI each year. aisumcd lobe 2% for this pro forma. 2 Dimcd upon historical operalioni of Marino Turk as appropriate and I3aysidc Village ni appropriate, Adjusted by CPI each year, assumed to he 2% for this pro forma. 3 $1,0011.1100 ntinil nuu plus CPI each year, assumed to Ix '_ "d, or 7590 ol`l oral Income. whichever ii _greater. 4 5 ^;,01 Gross Re\enue dcri\cd Isom reioici E • AlLOative 2 r 00111016 Year I Year _' Yem 3 Ycetr 4 Year i Year 6 fear 7 Year 8 Year 1) Year 10 DESCRIP'I'111N Projection Projeclitm Projection Projection Proieciiou Ptojection Projection Projectim Projection Projection 1.3 1 owl Income 1.299.4136 1.4113!49 1.499042 1.529,033 1.159.603 1,390,793 1,622.611 1.655.063 1.68X,(61 1 721928 2.4 1lome office L•xpell.ic 117U.931p (179.439) (1831128) IIMA89) (190.4_1_11 (194,231) 1198,115) i_'U_2A78) 120h.1191 1210242) '.i Mauager11spense (99.443) (104.332) 1106.119) (10$•347) (110.718) (11'.93') (IIi.1911 (117.49:) 11198 -11) (1 222411 row rspetlies (270.393) 083.771) 1289.4 -171 ('93.233) (301.140) (307,163) (313.30h) 1319.57'1 (3'; 9641 133-2.483) Ca ill Flon'Suhtota1 1 029.263 1.119.878 1.209.395 1 233.7-47 1.1.33.463 I '83.63? 1,309.30; 1.33i.491 1.363,3111 1.389.445 C'upitai h11prmemews ('4.1x)(1) (_'•1.4x0) (3497(1) (33.469) (_'5!)78) ('6.4981 (27.11381 1'Zih$1 (28.1211) (28.682) huerest (33.3211) (]7,1111)) (211'911) (12.83111 (4.671) >111incipld (hh.320) (75511) (79,380) (36.791) (94:950) Capital Wilily 1111proicwem 15:263) 01.6h11 (fi0.344) (61.ii11 (62.78_11 (64.138) 16 33 19) 166.625) 167958) (69317) Ilus¢.RewtoCity 11)1111,0(111 1.05 1,737 1.114'31 1.146.767 1.169.714' 1,(93.0% 1'I695R 1.'41_'9.9 I. 26h.1'3 1?91.446 Rem Cie,lii from City Il 1t9.h4 ). (990511) 199.6711.1 (99.62(1) (99 h_'0) 0 0 Il 0 Resnle.:;%toCity 38.000 41.841) 33.631 2 6,8 75 -17.413 '7.961 28.520 29.091 29.673 30.266 Total Rem to City 1.039,000 993.937 1.658,263 1.073,97_' 1,097.495 1.121,438 1,245.479 1,2711.388 1295,79h 1,321 712 •oo notes: Year 0114 Mot it Remal Rntei: Wiiieili-0w- $2.300,w,,ilcn•icw 51.800- Ccimis Vice $1.6!10. Rtnrs arc ndju >trJ by C'PI raeh yc:gt nssnwcJ l0 hr 2 °� for this pro forum _' nosed !0x,11 hjstarical 0peruious al' hlarina Park as appn,(x'ialc anJ R11ysidc Yilla =•c i1, appropriiue. Adjusted by CPI raeh year. assumed 1a he (e,rlhis pro lorum 3 Your 3 loim:a•d maemic hicrcdsc linty 12 11ew houlesi(cs art ptniion oreurrew (cimis court land m $1 1100 per spacc'momh. w1jjnsted by 21, CPI each )-ear. One apace reined per month oryea r 1 4 Vw inble I lame- 011iee I:.\Ixuses rehlik c h, 12 new spaces are namageulcul 1i cs, real eitaic ntws nml iommulee 5 Valiahle Al III lager I_apclues rcluIi,c m I'vew spaces are repairs and supplies awl oolitic, 6 S I AU).000 wiuiuuuo phis CPI cacti year. assumed to he 21.'•., or 75"„ of I oud hlcoule, whichever is erecter. 7 5uu of (hose Re,<11ue Jerked Irou1 resille5 F 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 difference 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 Ica:sc rates, we offer Addendum I, a Current rent study performed by JLT Associates, which suggests a current lease rate ranee of $1,600-$2300. 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 I -Work would conlni rice immediately upon City approval of the concept and design, and conservatively, would be Completed within 4 illo lths of the start O COI1atrUCtiOn. Alternative ?- Again, work could start immediately upon the approval of the 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 is City of Newport Beach Request for Proposals Additional Information Terra Vista Management has an existing $500,000 line ofcredit, 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. Tema 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 I -Terra Vista Management proposes a minimum 35 -year ground lease with rent equal to 75 of gross income or minimum annual payments of $1.000.000. adjusted for CP1 changes each year. Additionally. the City 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- Virtually the same as alternative 1. The difference would be that with more home site~, more revenue would inure to the City over the lone 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, if 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 others the City additional revenue from the leasin, 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 timeframe could be as short as 120 days. • Pre - leasing needs and marketing time frames None. i 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 City. While other proposals may suggest higher revenues several years out, subject to uncertainty and requiring subordination, this proposal hits the ground running with a `51.000.000 annual guarantee beginning immediately. and the likelihood of more. 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 of 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 Beads community. 10 Marina Park City of Newport Beach Request for Proposals Additional Information Sincerely, Michael D. .nd President Terra Vista Mana,ement • • 0 MARINA PARK MARKET RENT SURVEY TUNE 2000 Addendum l • 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. 3741 Lower Honoa ilani Road #107 Lahaina, HI 96761 (808) 283 -3380 Fax (808) 669 -5517 i 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. H. 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 1999) Water View - $1,650 (up 6.5% over 1999) 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. MARINA 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 longterm 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 11 iJ 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 - em 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' comer 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 (comer site is $3,000). Alarina Park is very close to Lido Peninsula and can be seen from Lido's private beach. 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 "baps" 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 0 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 IS% 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 arecord. "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) $1,80042,100 $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. 0 MARINA PARK MARKET RENT SURVEY 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 oceanfront 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 comer). 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. L J 2. 0 • Oxhibit A MANUFACTURED HOME COMMUNITY RENT SURVEY FOR MARINA PARK -JUNE 2000 Bayslde Village TOTAL: Clubhouses - 2 LAST MONTHLY W/S? ADJUSTED MOVE-IN 300 East Coast Highway # OF COMMUNITY RENT HOMESITE PAID BY HOMESITE I MARKET COMMUNITY HOMESITES AMENITIES INCREASE RENT RESIDENTS RENT• RENT Bayslde Village TOTAL: Clubhouses - 2 DATE: TYPE: SERVICE. Effective 10127199 300 East Coast Highway 270 Billiard Room January 2000 1 Low 1 Included $742 Waterfront - $2,200 Newport Beach, CA 92660 Shuffleboard Courts 2 High 2 In the rent $2,200 Water View - $1,650 949- 673 -1331 OCCUPIED: Activities 3 Average 3 $1,000 Bluff View - $1,275 Type of Community: 55+ 259 Swimming Pools - 2 AMOUNT: 4 4 Interior North - $1,250 Jacuzzl - 2 Various 5 5 South Side - $1,000 Water Orientation %OCCUPIED: Exercise Room CPI AMOUNT. VALUE: be 2 story units 96% Newport Beach Back Bay Laundry Rooms - 2 CPI +2% 1 $742 1 Two Story Homes RV Storage CPI minimum 4% 2 $2,200 2 Market Lease Site Rents 10/27199 Marina maximum 8% 3 $1,000 3 10 years Waterfront - $2,500 Comparison to Subject Beach CPI minimum 4% 4 4 (or less) Water View - $1,950 Superior amenities and story homes with 1,100 Leases expire 5 Supplied by 5 CPI Bluff View - $1.475 Inferior water orientation to 1,400 square feel at various tones Pally Pamper minimum 4•% Interior North - $1,450 Long term leases from $269,900 from 2009 from rent roll South Side - $1,300 DONE to $374,900 to 2026 Cannery Village TOTAL: None Planned DATE: TYPE,, SERVICE: 700 Lido Park Drive 34 NIA 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 NIA 5 5 The new homes will Water Orientation % OCCUPIED: removed all of the older AMOUNT: YALM. be 2 story units Newport Bay Rhine Channel 0% homes 8 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 feel CPI. Minimum 5% Proposed Rents from $269,900 DONE to $374,900 . Adjusted for Services Included In Rent Exhibit A MANUFACTURED HOME COMMUNITY RENT SURVEY FOR MARINA PARK - JUNE 2000 Capistrano Shores TOTAL: Modest Clubhouse LAST MONTHLY W/S!T ADJUSTED MOVE -IN 1880 N. El Camino Real # OF COMMUNITY RENT HOMESlTE PAID BY HOMESITE MARKET COMMUNITY HOMESITES AMENITIES INCREASE RENT RESIDENTS RENT• RENT Capistrano Shores TOTAL: Modest Clubhouse DATE: TYPE; SERVICE, 1880 N. El Camino Real 90 Small Swimming Pool June 2000 1 North 1 Included In $2,100 Same San Clemente, CA Playground Rolling on 2 South 2 the rent $2.000 as existing 949 -492 -6616 OCCUPIED: anniversary date 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 DoheneyStale Beach Park Previous 2 $2,000 2 DONE increase was 3 3 Comparison to Subject January 1999 4 4 Superior water orientation $100 5 5 No leases DONE Dana Point Marina MHP TOTAL: Modest Clubhouse DAIS: TYPE: SERVICE: 34202 Del Obispo Road $I Small Swimming Pool 2000 1 All Homesites 1 Water $837 Same Dana Point, CA 92629 Playground Rolling on 2 2 Sewer as existing 949A96 -1372 OCCUPIED: anniversary date 3 3 Trash resident Type of Community: All Ages 81 AMOUNT: 4 4 $50 5 5 Water Orientation % OCCUPIED: AMOUNT: VALUE, Across the sireet from 100°% 1 $790 1 $20 DoheneyStale Beach Park 2 2 $15 3 3 $12 Comparison to Subject 4 4 Inferior water orientation and 5 5 Inferior quallty homes DONE Long term leases 9 0 • Adjusted for Services InAs In Rent MANUFACTURED HOME COMMUNITY RENT SURVEY FOR MARINA PARK - JUNE 2000 •Exhibit A El Morro MHP TOTAL None DATE: LAST MONTHLY W/S/T ADJUSTED MOVE -IN 21851 Newland Avenue #OF COMMUNITY RENT HOMESITE PAID BY HOMESITE MARKET COMMUNITY HOMESITES AMENITIES INCREASE RENT RESIDENTS RENT` RENT El Morro MHP TOTAL None DATE: TYPE: SERVICE: SERVICE; 8811 N. Coast Highway 296 21851 Newland Avenue January 2000 1 Ocean 1 included In $650-$803 Same Laguna Beach, CA 92651 Market rents vary Huntington Beach, CA 2 Valley 2 rent $300-$485 as existing 949 -494 -7581 OCCUPIED: $906 by site and range 3 Terrace 3 $625 - $1,052 resident Type of Community: All Ages 296 3 AMOUNT: 4 4 306 Swimming Pool AMOUNT; 4 CPI- $3 -$15 5 5 Water Orientation % OCCUPIED: Leases - 3% 5 AMOUNT: VALUE. Normally, rents Water Orientation 73 homes on Pacific Ocean 100% Gated Enhance 20 year leases 1 $650-$803 1 are Increased 3% Also view and non -view sites 100% expired 12/99; 2 $300-$485 2 1 $15 when a home Is park owned by 3 $625 - $1.052 3 2 $875 2 $16 Comparison to Subject sold CA Parks Dept. 4 4 3 $760 Superior water orientation DONE Scheduled to 5 5 4 4 close and be Interior water Orientation DONE Community was scheduled to dose in 1999. 5 converted to They have been granted a 5 year extension to 2004. lbeach 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 dale 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 Jacuzzl Leases - 3% 5 5 Normally, rents Water Orientation % OCCUPIED: Gated Enhance 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 Interior water Orientation DONE 5 5 Most existing residents pay Long term leases $750 Adjusted for Services Included In Rent Exhibit A MANUFACTURED HOME COMMUNITY RENT SURVEY FOR MARINA PARK - JUNE 2000 Laguna Terrace TOTAL: Clubhouse LAST MONTHLY W /S? ADJUSTED MOVE -IN 30802 S. Coast Highway # OF COMMUNITY RENT HOMESITE PAID BY HOMESITE MARKET COMMUNITY HOMESITES AMENITIES INCREASE RENT RESIDENTS RENT' RENT Laguna Terrace TOTAL: Clubhouse DA 7 TYPE: SEFV!r.Er - 85 % Small Silas - $860 30802 S. Coast Highway 156 Billiard Room Rolling on 1 Low 1 Water $600 Canyon $1.140 - $1.360 Laguna Beach. CA 92651 3 $1.340 3 per month Swimming Pool anniversary date 2 High 2 Sewer $1.689 View Section 'no view* 949- 499 -3000 OCCUPIED: Jacuzzi 1 car garage start 3 Average 3 $1.054 $1.060 Type of Community: All Ages 156 Laundry Room AMOUNT' 4 4 View $1.140 - $1.760 market on adjustment (maximum 10 %) in Comer $1.200- $1.500 Various 5 5 resale of home Premium View Water Orientation %OCCUPIED: New Homes CPI (most) AMOUNT: VAL1lF latedor sites $1.900 - $2.090 Inland side of Pacific Coast 100% Resales CPI minimum 4 1 $756 1 $20 two story homes at $189.000 Highway CPI, no Boor and capped at 6 %. To 2016. Foot 2 Story Homes 8% (old leases) 2 $1.645 2 $24 two story homes new move -in rents Comparison to Subject 1.400 to 1.500 square foot homes 30 year leases 3 $1.010 3 The owners have vary by location and Inferior homes (some new) on new homes 4 4 quality of ocean view Superior amenities DONE 1 deter s. 5 5 Superior long range ocean views Long term leases Lido Peninsula 710 Lido Park Drive Newport Beach. CA 92663 949 -673 -6030 Type of Community: All Ages Water Orientation Located on Lido Peninsula TOTAL, 214 OCCUPIED: 182 % OCCUPIED: Swimming Pool Jacuzzi Rents Storage Units 6'x 8'$75 8'x 12'$150 approximately 8 sites cannot be used. DA 7 Rolling on anniversary date AMOUNT: CPI. no minimum maximum of 6% TYPE: SERVICE: 1 Low 1 Included In $809 2 High 2 the rent. $3.200 3 Average 3 Meter water $1.340 4 4 on new homes 5 5 and resales. AMOUNT., VAL(fE; 1 $809 1 Water 8 Sewer Market Rents Bay View sites Premium anchorage way $3.200 Facing Private eeach $2,750 85 % Prestigious Location New Homes Existing 2 $3.200 2 runs $20- $35 Aland Gham it Road Comparison to Subject 1.385 square foot Residents 3 $1.340 3 per month $2.350- $2.550 ' LT leases major upgrading of homes two story homes with a 4 4 based on Comer- $3.eoo New homes superior 1 car garage start 12193 to 2016. 5 5 usage Interior Sites mostly 30'x 35'spaces at $184.000 Assumable at Leases provide for a market Std. $1050 - $1.300 Similar water orientation market on adjustment (maximum 10 %) in Comer $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 latedor sites 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 Boor and capped at 6 %. To 2016. Foot 2 Story Homes start a[ $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 their rents The owners have are being placed on I adjusted to market over a maximum 5 established over 60 Anchorage Way year period starting In 2003. 1 1 deter s. Adjusted for Services Inc1W In Rent 0 0 MANUFACTURED HOME COMMUNITY RENT SURVEY FOR MARINA PARK - JUNE 2000 is Exhibit A Marina Park TOTAL, Laundry Room LAST MONTHLY W/S!r ADJUSTED MOVE -IN 1770 Newport Boulevard # OF COMMUNITY RENT HOMESfTE PAID BY I HOMESITE I MARKET COMMUNITY HOMESITES AMENITIES INCREASE RENT RESIDENTS RENT• RENT Marina Park TOTAL, Laundry Room DAIS; TYPE., SERVICE., 1770 Newport Boulevard 60 Beach October 1999 1 Bay View 1 Included In $1,129 Same as Newport Beach, CA 2 Partial View 2 the rent $853 existing 949 - 261 -6111 (mg ml. 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: VALUE: various proposals 95% Balboa Peninsula on 1 $1,129 1 for the community Newport Bay 2 $853 2 submitted by Comparison to Subject Owned and 3 $708 3 local companies Subject operated by city 4 4 quality homes and of Newport Residents were 5 5 Residents have vastly inferior meter orientation 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, 20001 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 OCCUPIED: 3 Average 3 Trash Removal $706 Multi- Section - $765 Type of Community: All Ages 58 AMOUNT: 4 4 $18 5 5 Water Orientation %OCCUPIED: AMOUNT: VALU 6 blocks from ocean 94% 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 meter orientation DONE No leases " Adjusted for Services included in Rent Exhibit A MANUFACTURED HOME COMMUNITY RENT SURVEY FOR MARINA PARK - JUNE 2000 Pacific Mobile Home Park TOTAL; Clubhouse LAST MONTHLY WIS(T ADJUSTED MOVE -IN 80 Huntington Street # OF COMMUNITY RENT HOMESITE PAID BY HOMESITE MARKET COMMUNITY HOMESITES AMENITIES INCREASE RENT RESIDENTS RENT RENT Pacific Mobile Home Park TOTAL; Clubhouse DATE: TYPE: SERVICE: 80 Huntington Street 264 Billiard Room April 1998 1 Low 1 Included in $400 $500 Huntington Beach, CA Swimming Pool 2 High 2 the rent $500 All homesites 714 - 536 -3832 OCCUPIED: Jacuzzi 3 Average 3 $400 rent control Type of Community: All Ages 264 AMOUNT, 4 4 Market rents Unknown 5 5 increased $50 Water Orientation % OCCUPIED: AMOUNT., VALUE, In 2000 100% 2 blocks from ocean 1 $400 1 Coast Highway 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 DONE 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 310454 -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: VA UF. East side of Pacific 100% 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 is' Adjusted for Services InJ in Rent • • MANUFACTURED HOME COMMUNITY RENT SURVEY FOR MARINA PARK - JUNE 2000 •xhlbit A Palos Verdes Shores TO L: Clubhouse LAST MONTHLY W /S/T ADJUSTED MOVE -IN 2275 West 25th Street # OF COMMUNITY RENT HOMESITE PAID BY HOMESITE MARKET COMMUNITY HOMESITES AMENITIES INCREASE RENT RESIDENTS RENT* RENT Palos Verdes Shores TO L: Clubhouse DATE: TYPE: SERVICE: 2275 West 25th Street 242 Billiard Room Rolling, most in I Low I Water $606 10% on turnover San. Pedro, CA 90732 Library October 2 High 2 Sewer $1,116 as permitted by 310 - 5474403 OCCUPIED: Shuffleboard - Indoor 3 Average 3 Trash $945 Maximum rates set Type of Community: 55+ 242 Exercise Room AMOUNT: 4 4 by parkowner in 1992 Swimming Pool 3% 5 5 "CAPPED RENTS" Water Orientation %OCCUPIED: Jacuzzi AMOUNT: VALUE: View - $1,085 Terraced comnunityovedooking 100% 9 Hole Executive Got 1 $575 1 $15 View - $1,010 the Pacific Ocean Tennis Courts 2 $1,085 2 $4 View -$985 Horseshoes 3 $914 3 $12 Non View -$905 Comparison to Subject Gated Entrance 4 4 Non View- $855 Superior homes, homesites, 5 5 amenities and long range DONE " CAPPED RENTS' ocean views DONE Increased $35 in 2000 LA City Rent Control Paradise Cove TOTAL: Clubhouse DATE; TYPE: SERVICE_ 28128 Pacific Coast Highway 257 Swimming Beach Rolling on I Low I Included In $358 15% on resale Malibu, CA 90265 Pier anniversary dale 2 High 2 the rent $1,200 as permitted by 310457 -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: Hillside community overlooking 100% 1 $358 1 the Pacific Ocean 2 $1,200 2 3 $614 3 Comparison to Subject 4 4 Mostly inferior fames, 5 5 superior long range ocean views DONE Malibu Rent Control • Adjusted for Services Included in Rent Exhibit A MANUFACTURED HOME COMMUNITY RENT SURVEY FOR MARINA PARK - JUNE 2000 Point Dume' Club of Malibu TOTAL: Clubhouse LAST MONTHLY W /S? ADJUSTED MOVE -IN 29500 Heathercliff Road # OF COMMUNITY RENT HOMESITE PAID 8Y HOMESITE MARKET COMMUNITY HOMESITES AMENITIES INCREASE RENT RESIDENTS RENT' RENT Point Dume' Club of Malibu TOTAL: Clubhouse DATE: TYPE: SERVICE., 29500 Heathercliff Road 297 Billiard Room Rolling on 1 Low 1 Water $725 15% on resale Malibu. CA 90265 Library anniversary date 2 High 2 Trash $2,025 as permitted by 310- 457 -2119 OCCUPIED, Card Room 3 Average 3 $1,200 rent control Type of Community: All Ages 297 Swimming Pool AMOUNT.' 4 4 Jacuzzi AMOUNT., 5 5 15% on new sublease Water Orientation % OCCUPIED, Tennis Courts 2.3 % AMOUNT: VALUE: as permitted by Terraced community, east side Terraced community overlooking 100% Gated Entrance 1 $416 1 $700 1 $20 rent control the Pacific Ocean Car Wash 2 $1,062 2 $2,000 2 $5 Pacific Ocean Laundry Room 3 $675 3 $1,175 3 Over 100 homes Comparison to Subject RV Storage 4 4 4 are subleased for Superior homes and amenities, 5 5 5 $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 Orienta(ion %OCCUPIED, AMOUNT: VALUE: Terraced community, east side 900% 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 0 . ' Adjusted for Services Incein Rent Exhibit B MANUFACTURED HOME COMMUNITY RENT SURVEY FOR MARINA PARK - JUNE 2000 # OF HOME W /S? 100% HOME SITES % MONTHLY HOMESITE RENT PAID BY ADJUSTED HOMESITE RENT COMMUNITY SITES OCC OOC LOW HIGH AVG RESIDENTS LOW HIGH AVG MOVE -IN HOMESITE RENT Bayside Village Cannery Village 270 259 96% $742 $2,200 $1,000 None 34 0 0% $1,800 $3,250 WIS - $33 Capistrano Shores 90 90 100% $2,000 $2,100 None Dana Point Marina 81 81 100% $790 $790 $790 WIS/T - $47 El Morro MHP - Ocean 296 296 100% $650 $803 None El Morro MHP - Valley $837 $637 Same as existing resilient $300 $485 None El Morro MHP - Terrace $485 Same as existing resident $625 $1,052 None Huntington by the Sea 306 306 100% $750 $875 $760 WIT - $31 Laguna Terrace 156 156 100 %, $756 $1,645 $1,010 WIS - $44 Lido Peninsula 214 182 85% $809 $3,200 $1,340 None Marina Park 60 57 95% $798 $1,129 $B53 None Madneland 62 58 94% $525 $783 $678 WISIT -$28 Pacific 264 264 100% $400 $500 $400 None Palisades Bowl 168 168 100% $400 $850 $565 WIS - $22 Palos Verdes Shores 242 242 100% $575 $1,085 $914 WISIT -$31 Paradise Cove 257 257 100% $358 $1,200 $614 None Point Dume' Club 297 297 100% $700 $2,000 $1,175 WIT -$25 Tahitian Terrace 158 158 100% $416 $1,062 $675 W1S - $20 9 $742 $2,200 $1,000 Waterfront - $2,200, Water View $1,650 Bluff View - $1,275, Interior North - $1,250 South Side .$1,000 $1,833 $3,283 Waterfront - $3,250, Perimeter- $2,200 Interior - $1,800 $2,000 $2,100 North of Clubhouse - $2,100, South of CH - $2,000 $837 $837 $637 Same as existing resilient $650 $803 Same as existing resident $300 $485 Same as existing resident $625 $1,052 Same as existing resident $781 $906 $791 Markel rents $750 to $B75 based on sizeBocallon $800 $1,689 $1,054 Canyon - $1,140 - $1,360; View $1.140- $1,760 Premium View - $1,900 - $2,090 $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 comer $1,200 - $1.500,. Interior sites two story homes- $1,585 - $1,665, $798 $1,129 $853 Same as existing resident - Partial View $798 Partial View - $053, On the Bay - $1.129 $553 $811 $706 Market rents; SW -$700 oW -$765 $400 $500 $400 $500 all homesites $422 $872 $587 10% on resales as per rent control ordinance, $605 $1,116 $945 10 % on resales as per rent control ordinance, $358 $1,200 $614 15% on resales as per rent control ordinance, $725 $2,025 $1,200 15% on resales as per rent control ordinance, $436 $1,082 $695 10% on resales as per rent control ordinance, ;I111111101 MANUFACTURED HOME COMMUNITY RENT SURVEY FOR MARINA PARK - JUNE 2000 MARKET RENT ANALYSIS 0 OF HOME MARKETRENTS COMMUNITY TYPE SITES Category Rent Category Rent Category Rent Category Rent Category Rent COMMENTS Bsyside Village 55+ 270 waterfront $2,200 marview $1.650 Blus Vkw $1,275 Interior North $1.250 Interior South $1,000 Subject Community, - Traditional Homes Bayside Village 55+ 270 Waterfront $2,500 Walervlew $1,950 elu6 View $1.475 Interim North $1,450 Interior South $1,300 Subject Community -Two Story Homes Cannery Village All Ages 34 walertrml $3.600 Perimeter $2,200 Merin $1,800 100% upgraded. Superior Bay Mews Capistrano Shores All Ages 90 Ocean6mt $2,100 Oceanfront. $2,000 Directly on Pacific Ocean; vastly Inferior amenities Dana Point Marina All Ages 81 All Hmnesites $790 Inferbrio subject (water orientation, quality of homes and amenities) El Morro MHP All Ages 295 0mantrom '$650-$803 Ocean View $625-$1,052 Valley $300-$485 Long lean leases CPI, no Increase on resale Owned by State; to close I2M. Residents granted a five year lease extension Huntington by the Sea Ali Ages 306 An Sites $750-$875 Family community Laguna Terrace An Ages 156 Premium View 51;900 - 52.090 Oman Mew $1,740•x1.780 Canyon SiA40- f1.360 Inferior homes isome new) and amen8les; superior long range ocean views Lldo Peninsula Ali Ages 214 Prime Water $3,200 Facing Beach 52;750 2sim Mentor 51,585. $7,665 Internet 51.050' $1.360 Interim 57,050- 51,300 Rental rates based upon size of site, location Fedrg 9mch $2.750 Charnel View $2.350 - $2,550 Interior $1,050:$1.2168 truen.Craver $1.20x- 51.5110 Manor Comer $1200- $1.500 and quality of view Channel Yew 62.350 - $2.550 Manna Park All Ages bu Waterfrm! $1,129 say New 1853 Third Ric Same as existing resident Marineland All Ages 62 Single section $700 Lower quality, Trailer park' Mufti-SWIM $765 Pacific All Ages 264 All Sites $500 Very small sites, inferior quality and. water Palisades Bowl All Ages 168 High $850 Palos Verdes Shores 55+ 242 Paradise Cove All Ages 257 High $1.200 Point Dume' Club All Ages 297 High $2,000 Tahitian Terrace 55+ 158 wen $1,062 Low $400 Average $585 Ocean Mew 5985. - $7.085 Low $350 Average $614 Law $700 Average $1,175 Low $416 Average $575 Non -view $855 -$905 oriedallon to% on resales as per rare control ordinance. Very small sites, vasty Inferior homes and amenities; superior long range ocean views Owner - capped- reds in 1992, Increased caps $35 In 2000; 10% Increase oe resale: superior homes, amenities 8 tap range ocean views 15% on resales as per rem control ordinance. Mostly Inferior homes and scrambles; superior long range oceanvlewa 15% on resales as per red control Migration. Superior homes (mufti - section), better amenities; superior gong range Oman views 10% on resales as per red control ordinance. Comparable homes. Inferior amenll superior long range mean views 0 0 0 ., 6 rxwof y - 0 Co,,6 Augeles &imes 20 inches: 712 words TUESDAY. JUNE 13.2000. BUSINESS. PART C. PAGE 1 000055877 COPYRIGHT2(x10 /THE TIMES MIRROR COMPANY FAX page 771 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 wRrrER A sudden burst of home buying in late May led tc 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 IW6% from May of last year to 10.119, DataQuick reported. The pical 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 5268.000, 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 �ry 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. '"111e 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 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 ONDEMANDOFTHELOSrANGELES SERVICE TIMES. Dial 800- 700-0004 FEELING RIGHT 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 4/-.4/0 The Orange County Register Hame 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 us May pays $1,62.2 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 j1,602. Back the Ne median price of a home was r. 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 19905. In some ways, the market is just now returning to ground zero. 'N terms of monthly pay- ments, homes aren't a lot more expensive. " said Fsmael Adibi, economist at Chapman Uni- versity. Last month, the median price of a home in Orange. County was $268;000. The aver- age imeml: 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 4.660 home and condominium sales. Buyers aren't complaining much about prices, said James Joseph, who co-own Century 21 offices in Anaheim, Garden Grove and Ins Alamitos. So tar this year, sales are up 14 percent compared with a year ago. Attibudes have shifted signif- ic�dysince the recession, Jo- seph was nervous about getting a pink slip the next day," he said. Now they're saying,'If I get . fired tomorrmv, there are two or three other places I could D g That's just what. Ron Errart, 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. Last months change from a year before. +3 -9% 1- family home resale volume +11.5% 1•family home resale price ,I -5.4% Defaults +132.8% Adjustable loan share 4 .+29.B% Cost Index a +10% Price /sq. ft Definitloru: MEDIAN is midpoint of all values NEW includes 1.family and condos: ACTIVITY BY PRICE breaks down home and condo win by sales prim: PRICE BY HOME SIZE breaks down home and condo saes by square footage of the property. DEFAULTS are notices of lateness filed by lenders; LOAN- TD-VALUE is percentage of purchase Price financed: ADJUSTABLE LOAN SHARE is percentage of purchase loans with aditIV a rates; PAYMENT COST INDEX is monthly Payment for median price Lfamily home at average, 30yeac fixed mortgagn and PRICE PER SQUARE FOOT U for 1-family homes. The Orange Cowmy Register w Wmrcets uikk a amnion $ym ms - . .. .. _ .. . Last month, Erratt and his write Mary bought a four -bed- room house in Garden Grove for 5280,000: 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 afar have more bnr- rowing option. Lenders have cushioned the blow of rising prices by offering a slew 0 new loan Products des'ggnned to make buying a house cheaper, at least 4sitiaily. At F'trst Rupubbc Mortgage in Santa Ana, mughlya quarter of the borrowers opt for a loan with a miniynal down Payment or rso down payment at all, said President Ironel Punchard. The office rarely has to turn a pirospeetive 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 .ONL' O.G home prices hit an alpdrne high in May. News 1 Prices and Saks volume by ZP Mee. Business R • 0 i CHG. CHG. YEARTO [HG. FROM YEAR DATE FROM MAY APR AGO AVG. 1999 All 4,660 15.5% so% 3.893 1.4% 1•lamilyresale 1.915 14.0% 3.9% 2,400 4.0 %. Condo resale 1,313 133% 15.7% 1,074 8.7% New 432' 35.8% 252% 418- All $256.000 2.3% 112% $258.000 11.2% 1•familyresale S292,o0o 1.B% 11.5% $279.060 120% Condo.resale 5175,000 0.6% 7.4% 5169.000 7.0% New 5388.00o 1.6% 19.0% 5369.000 14.2% e$100;000 17o 223% 4.5% 148 •22.4% $100,001.$200,000 1.186 91% -17.1% 1,072• .18.3% 1.266 635 S20o,001•S300.000 1,524 19.3% 16.24 5300.001.5400,000 833 9.2% 40.0% X701 32:9% •41.3% >$400.000 1.102 27.5% 51.6% 824 ... c 1.000 sq.'h. 5133,000 2 % 1.1% 5131.100 6.3% 11001.1,500 5207.250 7.6% 12.0% f2ot,000 712% 1.501.2,000 $285.000 0.0% 7.8% $278.000 10.0% 2mo1.2.Soo $375.000 1.S% 13.1% 5356.000 8.9% >2.Sw $485.000 I. -7.3% 31% 5498.100 12.3% r Defaults 348 4.2% 5.4% 366 foreclosures 26 4.014 52.7% 35 -64.9% Avg. loan•to-ralue 82.8% -0.4% -21% 832% -1,8% Ad'rystihle loon share 42.9% -1.6% 1132.13% X44.9% 166.f% Payment cost index 7.9 %-Il 29.8% 51.511.67 25.6 %_ _$1.621.88' Median price per sq, it $172.77 0.6% 1 10.0% S16734 9.6% Last months change from a year before. +3 -9% 1- family home resale volume +11.5% 1•family home resale price ,I -5.4% Defaults +132.8% Adjustable loan share 4 .+29.B% Cost Index a +10% Price /sq. ft Definitloru: MEDIAN is midpoint of all values NEW includes 1.family and condos: ACTIVITY BY PRICE breaks down home and condo win by sales prim: PRICE BY HOME SIZE breaks down home and condo saes by square footage of the property. DEFAULTS are notices of lateness filed by lenders; LOAN- TD-VALUE is percentage of purchase Price financed: ADJUSTABLE LOAN SHARE is percentage of purchase loans with aditIV a rates; PAYMENT COST INDEX is monthly Payment for median price Lfamily home at average, 30yeac fixed mortgagn and PRICE PER SQUARE FOOT U for 1-family homes. The Orange Cowmy Register w Wmrcets uikk a amnion $ym ms - . .. .. _ .. . Last month, Erratt and his write Mary bought a four -bed- room house in Garden Grove for 5280,000: 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 afar have more bnr- rowing option. Lenders have cushioned the blow of rising prices by offering a slew 0 new loan Products des'ggnned to make buying a house cheaper, at least 4sitiaily. At F'trst Rupubbc Mortgage in Santa Ana, mughlya quarter of the borrowers opt for a loan with a miniynal down Payment or rso down payment at all, said President Ironel Punchard. The office rarely has to turn a pirospeetive 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 .ONL' O.G home prices hit an alpdrne high in May. News 1 Prices and Saks volume by ZP Mee. Business R • 0 i • • • BUSINESS 12 The Orange County Register FROM PAGE 1 Tuesday. June13.2000 O.C. HOUSING PAST Here's how May housing prices and sales volume compare to the five-year average. +28% +25% +28% HO E.PRICE CONDO PRICE SALES 1- family home tondo resale Volume, all type resale price HISTORY I '88-'00 ae-'a0 S-YEAR PEAK I ILON'EST �,r•f J39yC1�gLn�kAy�V&a�5yIMONTH AMOUNT MONTH AMOUNT C'..La•2:A'1L�;i13'2 a`..a6 AN 3.631' Jul -981 5.259 Feb-92 1.474 _.L -3bi* _ lfamily resale 7.355 1uh98. 3.583, ie492 891 Cnndoresale _790 1u,n99 1328 Feb-92 226 New �486 &t94� 842 tan -93 176 G€bTA' kl , "'asra �I A0 1216.000, May -0015268.000; last - 97$165.600 .Condo resale 1140.ODU rr..May-00 $175 000 Nov-96 $112,500 New - -_- 3278A00! May-00I 3388,000 fei, 3 $194,000 SI00.001. 3200.000 1.352 5200.9Id300A00 1.071 5300:001 - 5400000 468 >S400.000 453 41.000 sq. IL $112.000 �_.__ 1un418 Aug -88 Au9$9 May-00 ' May-92 --- 1384 1am00 7fi7 2 1 95 504 -689 Feb 95 167 1.1021 Jan -95. 113 1145.000 Mar -97 $97.000 �- 1. .1.500 5166,000 M�ap00 5207,250' Maa00 5136 000 1.5012.000 3229.D00I May-00 3265.000 Mar-00 $180.000 2A01 -2.500 -T292.000 I Ma y-00 3375000L iFbN M33.W >s2.508 ,;,�•aI'7g�,y�3399.000 rlie 9 5` 15 t9a.1k�Ar, T {550;000; lan-8B $297.500 Defaults 735 Ma196 1.620 an-92 . 327 266 Ocl•96 "-'s56 May.9I 31 2rF�4o;;rsse��4bsuryyla1��yy77�'�;p ��y1 R^^^.. Y'NlTlPwL3ir SL:Z $266.000 Ave ban- lo•vtlue 84.2% Oct-95. 87.4% May91 80.3% Adjustable loan share 458% Od -94 66.6% 7eb98. I�.SS{ 8 c. If 4... w I.R. y1 ,000 fhymtm cost Index $1.176.96 May-0p 31.fi27.B6 tan -96 3987.47 Med. PtICEP054.h. 3137.63 Mdym MIX Jan-611 $107.47 ■ ORANGE COUNTY HOME PRICES AND SALES For the month of May. Orange County home sales rose 9 percent, compared with 1999. The median sales price rose 11.7 percent. The median is where half the home sold for mare and half for less. Types of homes selling. as well as home value changes, cause the median to change. M Prices - - -- - -- ! Sales volume - -- 11.5% * 7.4% 19.0% 3.9x/4 * 16.7% * 25.2% Resale Resale New Resale Resale New homes condos homes homes rondos Isonles' MEDIAN SALE PRICE SALES VOLUME MEDIAN SALE PRICE SAL25 VOLUME DV MIME %c1WlGt PAM4 %C MGI l DP PREY./ %QU461 PRIME CCHANGE Oft' CODE MIKE WWII MIKE rails,'" ! Ory In., nnane.m 92801 1184.000 5.1% Anaheim 92302 119Ao00 15.4% Anaheim 92804 1201.000 11.7% Anaheim 92805 $187.750 7.9% Anaheim 92806 $212.500 -0.7% Anaheim 92807 $266.000 7.7% Anaheim 92808 $288.000 0.7% Cie '.. ITAAUI {ark . P063 r If 4... w I.R. y1 ,000 Buena Park 90620 $218,000 16.6% 16.6% Rppu.�,ens Park $$221175500p�rp 436% �x�{{9,•,0t622�«14 "M"E.:.��i3I,1'S°_s.3., 47_, C4lLl��,0� Costa Mesa 92626 .W{Z $271.500 2.5% Mesa $25x,8,.000 %% PC�osts $2792627 .`-srdONF �e'� y.]0.4} �9q .µ!RJR. Dana Point 92624 1345.000 - 11.5%' Dana Point 92fi29 1410.000 22.4% L"P.o.N_y Mli. lk !A9152=19- Fountain Valley 92708 $308.500 20A% Garden Grove 928x0 $210.750 17.1% Garden Grove 926411 3200.250 8.2% Garden Grove 92843 $182.500 1.4% Garden Grove 92661 $191.750 15.5% Garden Grove SINS $150.5o0 .6% Inane 92604 $270.000 12.5% Irvine 97606 $167.000 .17S% Inane 92611 $317.500 5.8% Irvine 92614 3237.500 4.6% Inams 926M 1278350 141% 2s 35.9% 37 85.0% 1 74 17.5% i 48 17.1% i 30 15.4% 78 219% 73 76% 41 25.0% i 35 44A% 00W 57 16.3% l 56 -22.2% UV;W 7 -4U% k73 �•4I..+�7�7%7�1 POW 431 78 2S8% Turin mmi21 i 66 17.9% 30 •18.9% 40 •48% I 32 IBS% I 22 4.8% 48 do% 39 •2.5% 74 57.4% 53 10.4% 103 39.2% 906231 $287.000 2.9% 1 It 0.0% E `ma l . a �' `14:� fY ='i °' } S. "'. �. ; °r ",1i.. •.t':i1 ,,pq f l•rd. ( : J: Orange 92865 Orange 92866 Orange 92267 Orange 92968 Orange 92369 >,,li;a rit p •vr,i r� {'I >irin, ;f 1 :� 4i,L $y"L� >1ilyc2#' 1, f Y4y' {f7r- .•ti;'.f'i C.jt ienrit{ ?:1�fi{'f!l`t''•4.: t ,,I. •' f:'"G•�`:i�hiiL'i;''r .lt'' �jii. 'F�'.:y.Lt+�3'1 4$;111 ,1, {v E `ma l 41 BENDETTI COMPANY July 17, 2000 Robert D. Bendetti rdbabendetti.com 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, 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 reet to 100 Irvine CA 92614 (949) 261 -6111 (949) 261 -6660 FAX Enclosed is the response to the "Proposed Guidelines" mailed to the Real Estate proponents of the Marinapark RFP on May 31,, 2000. 6elopment 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 reet to 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: (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) Stabilized year 3. (5) Increasing every 5 years. 0 JULY 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 150' to 180' Street Included Included 9. Residential SFA SFD 18 14 17 24 10. Mobile Home Park (tl 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 (4) $925,266 Omitted 16. Sales Tax (4) $314,340 Omitted 17. Revenue Sharing with City Residential sales 25% 40% Cash Flow 0 % 40% 18. Guaranteed Ground Lease (5) $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) Stabilized year 3. (5) Increasing every 5 years. 0 • Sharon K. Wood July 17, 2000 Page Three ID C� 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. I look forward to discussing the plan and proposal in more detail with the City. 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: 0 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 Bendetiti 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 fast 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: Location: Seller: Project Size: • Lot size: Home size: Price Range: Treviso Tustin Ranch Irvine Community Development Co. (The Irvine Co.) 44 single family lots 8- 10,000 square feet 3,450 -4,450 square feet $600,0004800,000 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 $62,500,000. 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. 0 0 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 21,000 210' 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 4`h 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. • 0 L���fm�� -s__.� 0 �Fiu� Iaf�N 9 4- sP�i 0 FZlb0/0-, w /hi4t'�/�f�Pf f�e78� • G �M 5 / a.s✓Ev %, Svc — sPAI� �E t//V/73 I -Ep. 9j vy vNrrS �9)o VNl7tj y,tMW r✓Nr73 fby�m oP 7T7A`^ 0 � fteu9E 5P� O Pbovmwnrr covey 6P02 00606 ,oy 5.: OW I N p 4 TL&--Y 17, 'Y °o0 THe-= el r=7o vbF---7-r-/ WNr* ire- . /9aw 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 4t` 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 a 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 Manna 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 4h 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 Bxturization 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. 0 • 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 ExWbit'B ") SFA $82,800 84,456 86,145 SFD 94,500 96,390 99,282 $222,932 $342,295 $494,427 0 0 I] 4. Project Cost & Revenue Proforma 9 PURCHASE PRICE Land Area 466,528 @ PSF Other TOTAL LAND COST LEASED CONSTRUCTION COSTS 1. Demo and Off/On -Site Work 466,528 @ $ 2.75 PSF $ 1,282,952 2. Public Areas/Landmarks (a) Wood Planked Boardwalk - Hard /Softscape, Street Furniture 110,000 @ $ 7.75 PSF 852,500 (b) Lighthouse 2 @ $125,000 EA 250,000 (c) Tot Lot 45,000 (d) Tennis Court 55,000 3. Mobile Home Park Exhibit "A" 500,000 4. Residential Exhibit "B" (a) Single Family Homes - Detached 2,500 14 @ 172 PSF 6,020,000 (b) Townhomes - Attached 1,350 18 @ 172 PSF 4,179,600 5. Hotel - Exhibit "C" Hotel and Resturant Project Costs incl. Parking 21,212,000 6. Marina - Exhibit "D" (a) Private Marina Reconstruction 484,500 (b) Visitor Serving Marina 1,877,500 7. American Legion Hall Exhibit "E" 385,000 $ 37,144,052 Project Management 2.0% 742,881.04 Soft Cost & Contingency (Item Ys 1, 2, 3, 6 & 7) 3.0% 1,114,321.56 TOTAL DEVELOPMENT COSTS $ 39,001,255 Repay costs from Residential Sales (10,199,600) TOTAL REMAINING DEVELOPMENT COSTS $ 28,801,655 Assumptions: 1. Soft costs are included in the total costs projections of Item Vs 4 & 5 , "Residential" and "Hotel" 0 Summary of Income Proforma Projected N01 Mobile Home Park Residential Ground Lease Hotel & Resturant Marina - Private & Visitor Total Projected Lease Payment Available Cash for Debt Service Return on Costs EXHIBIT Year 1 Year 2 Year 3 "A" $ 1,044,480 $1,065,370 $1,086,677 "B" 490,500 490,500 490,500 3,082,269 "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 6.97% 14.10% 16.38% i i 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 tern 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. 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 project. (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 • 11 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 P year NOI $47,174,000 Construction Financing $25,901,655 Developer Equity (10% of cost) 2,900,000 $28,801,655 8. TENANT CON MHTMENTS: Not Applicable Exhibit A • Mobile Home Park 1 l l l l l l C C C C C C C C C C C C C C C C C C C C C l C Mobile Home Park 0 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"). A. B & F SPACES 25 $ C & D SPACES 22 $ E SPACES 11 $ CURRENT ANNUAL OPERATING EXPENSES CURRENT NOI 1.151 $ 28.786 875 19,241 819 9,012 $ 57.039 $ 684.465 136.893 D4 /.D /L CURRENT CURRENT TOTAL CURRENT SPACE SPACE SPACES RENT /MO. RENT /MO. A. B & F SPACES 25 $ C & D SPACES 22 $ E SPACES 11 $ CURRENT ANNUAL OPERATING EXPENSES CURRENT NOI 1.151 $ 28.786 875 19,241 819 9,012 $ 57.039 $ 684.465 136.893 D4 /.D /L Space rent increases amuallp at CPI or 2%, whichever is greater Market Support: Marinapark mobilehome park. Lido Penninsula Resort 0 PROJECTED PROJECTED PROJECTED PROJECTED SPACE SPACE SPACE PROJECTED SPACE RENT /MO, RENT/MO, RENT/MO. SPACES RENT/MO. YEAR I YEAR 2 YEAR S 23 $ 2.200 S 50.600 $51,612 $52.644.24 20 $ 1,700 37.400 $38,148 $38,910.96 9 $ 1.600 14,400 $14,688 $14,981.76 $ 102.400 $ 104.448 $ 106.537 PROJECTED ANNUAL $ 1.228.800 $1,253.376 $1,278.444 EST, OPERATING EXPENSES 184.320 188.006 191,767 PROJECTED NOI $ 1,044,480 $1.065.370 $1.086.677 Space rent increases amuallp at CPI or 2%, whichever is greater Market Support: Marinapark mobilehome park. Lido Penninsula Resort 0 •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 Costs /Unit: Sales/Unit: ProfiUUnit: Total Cost: Total Sales: Total Profit: or EFORE LAND LEASE EXPENSE 7/17/00 $ 8,280,000 $ 9,450,000 $ 460,000 $ 675,000 $ 554,063 COST BREAKDOWN UNIT MIX # of UNITS SIZE # of UNITS SIZE TOTAL AVERAGE 18 1,350 14 2,500 18 14 2,500 32 50,000 1,350 1,350 1,853 1,950,000 SALES PRICE PER PLAN 60,938 18 $ 460,000 81,000 65 162,500 14 $ 675,000 Costs /Unit: Sales/Unit: ProfiUUnit: Total Cost: Total Sales: Total Profit: or EFORE LAND LEASE EXPENSE 7/17/00 $ 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°/. Residential - Ground Lease Projections 0 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. Tbereafter, 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. Market Support: Beacon Bay Community, Newport Coast Properties 0 GROUND LEASE AS GROUND TOTAL PERCENT LEASE /PER LEASE NO. OF SALE OF SALE PARCEL REVENUE UNITS PRICE PRICE PER /MO. PER /MO. SFA 18 $ 460,000 2.5% $ 958 $ 17,250 SFD 14 $ 675.000 2.5% 1,688 23,625 0) $ 2.646 $ 40,875 Annual NOI Year 1 $ 490,500 Annual NOI Year 2 $ 490,500 Annual NOI Year 3 $ 490,500 Market Support: Beacon Bay Community, Newport Coast Properties 0 • Exhibit C Hotel L L l L C L L L L L L L L L C L O=pancy ADR Occupied Rooms Available Rooms REVENUES Rooms Food Beverage Telephone Garage Other Depts Total Revenues OPERATING DEPTS Rooms Food Beverage Telephone Garage Other Depts Total Operating Expenses OVERHEAD DEPTS Administrative & General. Marketing Property Operations Energy Costs Total Overhead Expenses Gross Operating Profit Mgt Fees Fixed Expenses Rent/Leases Insurance Property Taxes Other Total Fixed Expenses Cash Flow before Debt Service and FF &EReserve FF & E Reserve Available Cash for Debt Service Type Transient Occupancy Tax Sales Tax. (F &B) Property Taxes Madnapark Hotel Five Year Pro Forme Summary For The Years, 20M thru 2007 2003 59.1% 8,303,667 64.0% 9,252,657 65.4% 9,622,764 65.4% 22.9% 10,007,674 3,509,576 65.4% 22.9% 60.0% 70.0% 75.0% 75.0% 75.0% $281.21 $225.00 3250.00 $260.00 8270.40 35,508 35,588 27,470 33,215 47,450 35,588 47;450 47,450 47,450 130 47;450 600,466 4.1% 624,485 4.1% 6;405;750 59.1% 8,303,667 64.0% 9,252,657 65.4% 9,622,764 65.4% 22.9% 10,007,674 3,509,576 65.4% 22.9% 3,000,000 27.7% 3,120,000 24.0% 3,244,800 22.9% 3,374,592 843,648 5.7% 877,394 5.7% 750,000 6.9% 780,000 6.0% 811,200 5.7% 41% 600,466 4.1% 624,485 4.1% 427,050 3.9% 518,154 4.0% 577,372 4,D43,000 0 0.0% 0 0.0% 0 0.0% 2.3% 0 260,000 0.0% 2.0% 0 270,400 0.0% 1.9% 261,216 1.9% 292,465 1.9% 250,000 10,832,800 100.0°/ 12,981,821 100.0% 14,156,429 100.0% 14,722,688. 100.0% 15,311,594 100.0% 1,921,725 30.0% 1,992,880 2,550,000 85.0% 2;496,000 450,000 60.0°/6 405,600 213,525 50:0°/. 207,202 0 ERR 0 175,000 70.0% 182000 5,310,250 49.0% 5,203,742 1,900,000 17.5% 1,957,000 1,100,000 10.2% 990,000 550,000 5.1% 632,500 450,000 4.2% 463,500 4,000,000 36.9% 4,D43,000 1,522,550 14.1x/. 3,655,079 324,984 3.0% 309,455 24.0% 2,220,638 24.0% 2,309,463 24.0% 2,401,842 24.0% 80.0% 2,595,840 80.0% 2,699,674 80.0% 2,807,661 60.0% 52.0% 421,824 52.0% 438,697 52.0% 456,245 52.0% 40.0% 230,949 40.0% 240,187 40.0% 249,794 40.0% ERR 0 ERR 0. ERR 0 ERR 70.0% 189,280 70.0% X851 70.0% 204,725 70.0% 40.7% 5,658,530 40.0% 5,884,872 40.D% 6,120,267 40.0% 15.1% 2,015,710 7.6% 1,019,700 4.9% 651,475 3.6% 477,405 31.1% 4,164;280 28.2% 4,333,609 3.0% 424;693 14.2% '2,076,181 7.2% 1,050,291 4.6% 671,019 3.4% 491,727 29.4% 4,289,219 30.6% 4,548,596 3.0% 441,681 14.1% 2,138,467 7.1% 1,081,000 4.6% 691,150 3:3% 506;479 29.1% 4,417,895 30.9% 4,773,432 3,D% 459,345 14.0% 7.1% 4.5% 3.3% 28.9% 31.2% 3.0% 0 0.0% 0 0.0% 0 0.0% 0 0.0% 0 0.0% 150,000 1.4% 157,500 1.2% 165,375 11% 173,644 1.2% 182,326 1.2% 227,371 2.1% 231,919 1.8% 236,557 1.7% 241,288 1.6% 246,114 1.6% 377,371 3.5% 389,419 3.01% 401,932 2.8% 414,932 2.8% 428,440 2.6% 020,195 7.6% 2,876,206 22.2% 3,506,984 24.8% 3,691;984 25.1% 3,885,644 25.4% 324,984 3.0% 389,455 3.0% 424,693 3.0% 441,601 3.0% 459,348 3.0% 495,211 4.6% 2,486,752 19,2% 3,082,291 21.8% 3,250,303 22.1% 3,426,297 22.4% Rate 962,276 1,000,767 10.00% 640,575 830;367 925,288 7.75% 290,625 302,250 314,340 326,914 339,990 227,371 231,919 236,557 241,266 246,114 APPROVAL: PRMCT COST PROJECT: Marina Park Hotel- Newport Beach, California DATE:❑ July 12, 2000 REVISION:❑ EST. CONSTRUCTION START: Jan.2002 NUMBER MODULES: 135 ESTIMATED OPENING DATE: Mar.2003 NUMBER KEYS: 130 NUMBER OF FLOORS: 3 TOTAL SQ. FT.: 100000 N0.000CATEGORY 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 • $1,038 7. OPERATING SUPPLIESU $135,000 8. F 8 B SERVICE WARES /EQUIPO $142,000 $1,092 9. LINEN /UNIFORMS❑ $150,000 $1,154 10. GUEST ROOM FURNISHINGS❑ $1,300,000 $10,000 11. PUBLIC AREA FURNISHINGSO $350,000 $2,692 12. COMMUNICATIONSIMIS 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 COSTSO $0 $0 TOTAL COST $20,212,000 $155,477 Exhibit D Marina • L� (.(.( (((((E (E f f E F E E f f (f 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 551, 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 $ 900 900/6 $ 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 E Private Marina Visitor Serving Marina Effective Gross Revenue: Operating Expenses: Repairs and Maintenance Insurance Property Tax Utilities Trash Operation & Management Net Operating Income - Year 1: Net Operating Income - Year 2: Net Operating Income - Year 3: $ 2.476.894 123.800 18.000 210.000 9.200 14.000 123.845 $ 498,845 $ 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 $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 MIN MME THE SLOPE OF THE GANGWAY AT EXTREME TIDES THE COST RANGE IS $50,000 TO $100,000. THANK YOU FOR CALLING SWIFT SLIP U Exhibit E American Legion 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. • 0 • Ground Lease LJ 0 C (.(( ( ( ((( ( 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 completion 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. 0 Further Negotiations 0 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. L-1 u Supplemental 1 0 k ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( (A ( ( ( ( ( ( ( Thomas Edward Co. t • ( (((((((((((((((((((((((.(.((((� 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. THE EDWARD THOMAS COMPANIES 9 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 Slatldn 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 Sterwood 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 Main' 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 Slatl in 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 (3 10) 859 -9366 Fax: (3 10) 859 -0823 E Cm Ii1F !.1 X11 .:4W ti 4w. 74 A }j ok Op m AM • 0 0 Santa Monica Bench. Mere, during Ho'Ilywoodrs Golden Fi'ra, the reigning Icings and queens ' of the silent . screen built their heachfronE "fates'. private sanctuaries that were minutes !J� from Lou Angeles, yet thousands of. miles from the city's bustle "and bustle. Stare like Mery_ Pichford and Douglas Faiyhanks, Norma Shearer; Max Sennett, even the mighty Louie B. %Ksyer treated o world of infornSal luniry, wifb e46ryr'convenience"blose a£ sehse of relaxed yJegan6is lives on of Shutters wSi fe Seei6, the only oceenfronf luxury i r .{14 hotel" f! �A°',�,�r fy cfure fZtt r�o A A d pp } { { {g t: 5 rY can escgpu the evenings coolness by sinking into nn ov"ersju(fed chair before a ° a.. ..." ".# Or find n ever for quiet so fa Monicaa famous he"hfmnE promen 1 o a " rf e o e4 d too." " n .� ' nightlife o s. Santa ica is again Eke p]a to be. L{ '�r O � � 1 � y d'r.,A I��a fi ,. �� .a- ,:..�...: ��TT�� - �'?l f �, t i�,r, . _... - ,pis -.,: nsus�w'..- ....,.«.aL_�:_.. '���. I �, �, _ 6 CcL_._n f`� �*� y. rrFS , pppp , �- yp L IV F l i s<^ S r ,,L n t� A �.ky .1' ~ 4 ift;�' a , �'?` 4�! *' R . �•.� �, Y �. k � �r N. r: i��.w '`. �n r vylr lr 11 �� :. ����� . ` D, �j. ., � � .. ' - ^r. I 9 i P Shutters on the leach is just a'short stroll from Santa Monicn8 historic pier with its Famous carousel. The hotel offers superior Facilities, including a choice of two leacl- froht restaurants,, a lohhy lounge, harp pool And sundecic. The fully equipped Hc.1th Cluh message: steam, end sauna, es well As separate mess end womens has an eerolic loche ?rooms. Shpiters`intimete meeting space includes th ree hosrdrooms that open onto on outdoor rrpcc end The Grand Salon, a lallroom that accoodefes up to 220 min people for n meeting or 300 for a reception. Spacious rooms afford lreafhfelcing vieq`e of the California coastline, while sliding shutters elload the refreshing sea lyeezes to waft _ th rough. You can jog on the•loardwpc�por rent a hicycle For allay- oF]eisurely exploring.,jn _ Sf Rt ery i nf,n s and oljeta d arb room nn d common area, pr�gfq ve h of eclecEic' . nlhat'Shutters on -iii • cou>,fork... i J n to'}lef8il.' 6 H V T T E R 6 �' O; ♦J T H'E a E A C'H For reservations information, call- .1 .800.334,9000. • cou>,fork... i J n to'}lef8il.' Warmington Co. j u L� ll ((((((((((((((((((C(CCC(E(EECCC ji ip r 4t e- Z.4 �. � -,. ,� 1 _ / `J ` / _.: *� % ! I >; ,� ,%� ;�� . J '1r�'t4it�.r, �� �� �, �3 ��l�; x'. ,.�;,�,� `��k� ! �� � 4 �'..' �f f` %. °.:.. � ,> Fes. ,, , '�- _ � r' r� u 0 0 i s t o r Y 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 rim Hogan - President, C.E.O. • t I C 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. • d ii v sion 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. architecture Wormingtan uses only the best known and mast respected architectural consultants. It should be noted that when appropriate, existing product packages are reused for cast effectiveness. However, mare typically, a new product is created to perfectly meet current state -of- the -art standards, market demands, and site requirements. • u When developing new architecture, the goal is to create a series of flaarplans that are each notably different, therefore appealing to a wide range of living styles. The street scenes often feature eclectic arrays of elevatianal designs that incorporate many of the elements that were shown in the very early Wormington 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, �I i P \P N O HoV4dJ,,A �� PLAN TWO Wa�Mr�/v31nk BW., o w Dual :� 'r.r�Pve�m`o,s inwbeRmm ti z w 6 • • M� WOO*PLAN TWO Approximately 4,424 square feet 3 bedrooms plus den and bonus room Master retreat 4 baths plus powder room 3 or A-car split - garage Optional room over dining room adds approximately 204 square feet PLAN 2SC - SPANISH COLONIAL PLAN 2RM tMODEL) - MONTEREY PLAN 25 - SPANISH a z E w 6 I �. , iuidaa : F.,*Roam � ..i d d; Foot I li •••� -'1 ��m GHip R. y k xvJ I : h •• r + eu ° #�t�:j;,, PartEji ,fir p. Pwei�l k Flea Fleee L .+' , n Mme- - �N se��� � ♦ W PaAVVn ' A�+I Ratire- F1.aar PeA�om I PLAN THREE 9xed Fb.. 9 54VV400*4 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 IMODELI • SPANISH COLONIAL PLAN 3M . MONTEREY PLAN 3RS - SPANISH r rc Q Z i w s 6 a Z E w d yr W.8 ! I IAY>sy Be® it I I �. Oou>MN • - - -. �.i M ham:: CNe -: ilk, - 'HiMratdea 'Y` eG. .gym eem.rm, rte-! 6 ®� ❑ - RM Rme PLAN ONE • • 1s' . � _' ,e, .• ?;�� � �+ - i+21n N'f .. ... + 1 ii 5:�..I x r v; ,, Aid D • Strongly themed exteriors featuring distinctive architectural styles • Long lasting fire resistant flat or "S" tile 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) Sp.tic«K t zoLq Ate, (tent) • Beautiful stair systems with oak handrails and footlights • Custom - styled radius bullnose corners on interior walls • Colonist interior doors with detailed casing C 1V rt; • 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 • Interior window casing detail in dining. living . G.E. white multi-cycle dishwasher and master bedroom e Block or tubular steel side and rear yard fencing 5tAaaw L;vu q Au-44 • 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 • Custom satin Ivory cabinets with white interiors. concealed hinges adjustable upper shelves. and roller glide drawers • Large butler's pantry and walk -in pantry loll plans) • Convenient kitchen nooks and center islands • Ceramic file countertops with full back splash • Kohler porcelain coated cast -iron. oversized sink with pullout faucet and disposal • Built -in recycle bins • Under cabinet lighting CN4. X"" (ura.a! ) • 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 b4 w. a" HA444 " • 8' entry doors • Compartmental private both /dressing area • Separate six foot Kohler brand tub with jets and ceramic the 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 builMn N niche • 0 • A ,.d &af" Fit • Pre -wired for cable television in all bedrooms and family rooms • Pre -wired for future satellite dish in attic • Category S wiring • Pre-wired for stereo sound system in living room, family room, and master suite • Ceramic tile 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 roam L.J 0 TWO;Aloow • Recirculating hat water system • Interior laundry service area with tile 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 • Cost iron secondary both tubs • Full height recessed mirrors in bathrooms • G.E. drinking water filter system • Decorator selected lighting fixtures • Gas stub out for future barbecue • Decoro light switches • Prepared For soft water system • Stylized plant shelves • Baldwin entry door hardware with deodbolt • Dual -zone gas forced-air hooting • Standard air conditioning E,.V* 5(4 : f"4w,0 • Exterior wall and ceiling insulation • Insulated air ducts • White solid vinyl duafglozed windows • Weother•stripping on exterior doors • Flaw control on all shower fixture heads • Water saving toilets • Pilotless gas forced-air hooting • Energy -efficient gas water heater e o00, • A full range of custom options ore 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 ore approximate only. Prices ore not determined by square footage. All homes are subject to prior sole. All renderings, Roar plans and mops ore criisrs conception and are not intended to 6e an accurate representafian of buildings, fencing, walks, driveways or landscaping and ate not necessarily to scale. Wndav locations and sizes as well as specific detailing may vary with different elevations. 'A W 4-44 ' Reputation, integrity, innovation, commitment and pride. These are the qualifies of the men and women who build homes for the Warmington group. Over the years, the various companies that comprise the Wormington 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 todays discriminating home6uyers 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 assall 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. 11732 8eswick Place • Tustin, CA 92782 • Fax (714)838.9481 (714) 939 -7552 WAR ILNGTON HOMES CALIFORNIA MSM AN IKORM www.waffningtonhomes.com • 9 5 � Tov Taetin Ranch Rd. o. m Ti. � : '�Golf,Course '. dr a Jambws Rd. N 5 A Map wl b xn6 11732 8eswick Place • Tustin, CA 92782 • Fax (714)838.9481 (714) 939 -7552 WAR ILNGTON HOMES CALIFORNIA MSM AN IKORM www.waffningtonhomes.com • 9 • V RHC C.O MM UNIT I ES • E 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 • NEWPORT BEACH, CALIFORNIA 92660 • 949.224.0222 • FAX: 949.224.022.3 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. 0 Marina Park Proposal Addendum July 3, 2000 Page I of 4 w7. 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 Descrintion 1. Parcel Sizes: Hotel Site 389.90 X 249.70 (2.2 acres) Parking Structure 276 X 110 (.69 acres) Mobile Home Park 779.80 X 249.70 (4.2 acres) Girl Scout House Existing Site (no change) Open Space 175 X 178 .71 acres 2. Project Description: Total: 7.8 acres is 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 manna. Girl Scout House RHC Communities will contribute approximately $100,000 to rehab and refurbish the Neva B. Scott Girl Scout House. We believe scouring 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 ■ 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 0 0 0 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 28 27 28 29 30 31 32 33 34 35 36 37 38 39 40 0 0 Marina Park Hotel Plan - RHC Communities .Operating Pro Forma Numberof Suites 100 MUMBRIUM 100 Suites Occupied 25,550 25,550 Suites Available 36,500 38,500 Occupancy 70.0%. 70.0% Average Daily Rate $200.00 $204.00 Revenue Per Available Room $199.00 $202.98 REVENUE Suites Telephone Total DEPARTMENTALEXPENSES Suites Telephone Total DEPARTMENTAL PROFIT OPERATING EXPENSES Administrative 8 General Marketing Operation 8 Maintenance Utility Costs Total GROSS OPERATING PROFIT FIXED EXPENSES Management Property Taxes Insurance Annual Lard Lease 41 Total 42 43 NET OPERATING INCOME' 44 45 DEBTSERVICE 46 47 Transient Occupancy Tax (f.O.T) Projection 48 Lend Lease 49 Annual Revenues to City of Newport Beach 50 Annual PAR Income 51 52 53 54 70.0% $208.08 $207.04 0 �iNda,�'mi.•', a.Y.N 70.0% $212.24 $211.10 Amount Percent PAR Anlour8 Percent PAR Amount Percent PAR Amount Percent PAR 71,182 1.4% $2.80 $483,023 9.5% $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 25,422 0.5% $1.00 25;931 0.5% $1.01 26,582 0.5% 11.04 26,978 0.5% $1.06 $5,109,872 100.0% $200.00 $5;212,070 100.0°/a $203.99 $5,343,028 100.0% $206.07 $5,422,637 100.0% $212.24 $549,120.60 10.8% $21.49 $687,993 13.2% $26.93 $663,907 12.8% $28.63 $674,457 12.5% $26A0 16,524 65.0% $0.65 18,855 65.0% $0.66 17,278 65.0% $1,35. 17,538 65.0% $1.37 $565;645 11.0% 322.14 5704;848 78.2% $27.59 $701,186 77,8% $27.99 $691,993 77.5% $27.77 $4,544,227 89.0% $177.88 54,507,222 21.8% $178.41 $4,641,840 22.2% $180.09 $162,702.40 3.2% $6.40 160,770 127,111 2,5% $5.00 3.0% 122,027 2.4% $4.80 33.47 71,182 1.4% $2.80 $483,023 9.5% $19.00 $4,061,204 79.5% $758.86 $153,296 3.0% $6.00 160,770 45,989 0.9% $1.80 3.0% 10,220 0.2% $0.40 33.47 357;891 7.0% $14.00 $567,196 11.1% $22.20 13;494;009 68.4% $138.66 $1,798,439 $508,445.00 357,691 $888,136 $49,979.91 $202,259 3.9% $7.96 160,770 3.1% $6.32 155,564 3.0% $6.12 86,164 1,7% 33.47 806,778 11.7% $23.57 $3;900,443 10.1% $152.54 $156,362 3.0% $6.12 46,909 1.5% $3.06 10,424 0.3% $0.61 364,645 7.0% 574.28 $ 576,540 11.8 °!a $24.07 $3,321,904 -1.7% $128.47 $1.798,439 $518,613.90 384,845 $883,459 546,891.22 $202,025 3.8% $7.91 159,493 3.0% $6.24 154,177 2.9% $6.03 90,380 1.7% $3.54 806;075 11.4% $23.72 $4,035,766 10.8% $156.37 $160,291 3.0% $6.24 69,459 1.3% $2.70 10,686 02% 50.42 374,012 7.0% $14_57 5614;446 11.5% $23,93 $3,421,318 A.7% $132.44 $1,798,439 $531,644 374,012 $905,656 $46,340.46 $4,730,644 22.5% $194.47 $199,639 3.7% $7.81 64,748 156,474 2.9% $6:12 0.2% 151,078 2.8% $5.91 $14.78 $0,331 1.6% $3.39 4593,522 11.0% $23.23 $4,137,122 11.5% $161.24 $161,070 3.0% $6.34 64,748 1.2% $2.53 10,791 0.2% $0.42 377,696 7.0% $14.78 5815,105 11,4% $24.07 $3,522,016 0.1% $137.16 $1,798,439 $539,566 377,696 $917,262 $50,064.01 1 of 55 56 57 58 59 60 61 62 93 64 65 66 87 68 69 70 71 72 73 74 75 76 77 78 79 80 81 82 83 04 05 66 87 88 89 90 91 92 93 94 95 g8 97 98 99 100 101 102 103 104 105 106 107 108 Marina Park Hotel Plan - RHC Communities Praforma Summary REVENUE Suites Telephone Total DEPARTMENTAL EXPENSES Rooms Telephone Total DEPARTMENTAL PROFIT OPERATING EXPENSES Administrative & General Marketing Operation & Maintenance Utility Costs Total GROSS OPERATING PROFIT FIXED EXPENSES Management Property Taxes Insurance Land Lease Total NET OPERATING INCOME DEBT SERVICE Transient Occupancy Tax (T.O.T) Projection Annual Land Lease Annual Revenues to City of Newport Beach Annual PAR Income 0 IDO 70.0% $225.23 $223.86 100 25,550 30,500 70:0% $229.74 $228.13 Amount Percent PAR 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% $228.76 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 55,748,694 100.0% $223.64 55.663,687 100.0% $228.86 $686,564 12.5 °% $26.87 $683,480 12.2% $28.75 $680,014.45 11.9% $26.43 $876,129 11.6% $26.30 24,991 65.0% $1.40 25,491 05.0% $1.43 44.201 65.0% S1.44 37,887 65.0% $1.47 $711,555 77.5 °% $28.27 $708,979 77.2% $28.18 $724,215 78.9% $27.87 $714,015 76.6% $27.78 $4,619,403 22.5% $186.71 $4,932,598 22.6% $192.63 55,024,478 23.1% $195.77 $203,223 e 5 Ba Numberor Suites 100 100 Suites Occupled 25,550 25,550 Suites Available 36,500 36,500 Occupancy 70.0% 700% Average Daily Rate $216.49 $220.82 Revenue Per Available Room $214.97 $219.27 REVENUE Suites Telephone Total DEPARTMENTAL EXPENSES Rooms Telephone Total DEPARTMENTAL PROFIT OPERATING EXPENSES Administrative & General Marketing Operation & Maintenance Utility Costs Total GROSS OPERATING PROFIT FIXED EXPENSES Management Property Taxes Insurance Land Lease Total NET OPERATING INCOME DEBT SERVICE Transient Occupancy Tax (T.O.T) Projection Annual Land Lease Annual Revenues to City of Newport Beach Annual PAR Income 0 IDO 70.0% $225.23 $223.86 100 25,550 30,500 70:0% $229.74 $228.13 Amount Percent PAR 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% $228.76 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 55,748,694 100.0% $223.64 55.663,687 100.0% $228.86 $686,564 12.5 °% $26.87 $683,480 12.2% $28.75 $680,014.45 11.9% $26.43 $876,129 11.6% $26.30 24,991 65.0% $1.40 25,491 05.0% $1.43 44.201 65.0% S1.44 37,887 65.0% $1.47 $711,555 77.5 °% $28.27 $708,979 77.2% $28.18 $724,215 78.9% $27.87 $714,015 76.6% $27.78 $4,619,403 22.5% $186.71 $4,932,598 22.6% $192.63 55,024,478 23.1% $195.77 $203,223 3.7% $7.95 $201,685 3.6% $7.89 $200,004 3.5% $7.77 159,283 2.9% $5.23 162,460 2.9% $6.36 160,003 2.8% $5.22 153,790 2.8% $6.02 156,866 2.8% $6.14 164,289 2.7% $8.00 87,080 1.6% $3A4 89,638 1.6% $3.51 91,431 1.6% $3.55 604,176 11.0% $23.65 610,657 10.9% $23.90 $605,727 10.81. $23.54 $4,215,227 11.5% $163.08 $4,321,941 11.9% $168.73 $4,418,751 12.5% $172.23 $184,775 3.0% $6.45 65,910 1.2 °% $2.58 10,985 0.2% $0.43 384,476 7.0% $15.05 .$626,146 11.4% $24.51 $168,071 3.0% $6.58 61,626 1.1% $2.41 11,205 0.2% $0.44 392,165 7.0% $15.35 $633,067 11.3% $24.78 $171,432 3.0% $6.68 57,144 1.0% $222 11,429 0.2% $0.44 400,008 7.0% $15.55 5640,014 11.2% $24,87 $3,509,080 0.1% $138.56 $3,688,874 0.6% $143.95 $3,778,737 1.3% $147.38 $1;798,439 $1,798,439 $549,251 $537,505 384,476 270,662 $933,727 5808,247 $50;572.88 i $52,542.13 $1,798,439 $571,440.71 400,008 $971,449 $53,785.27 $5,149,852 23.4% $201.08 $196,176 3A% $7.71 157,375 2.7% $8.12 151,546 2,6% $5.90 87,430 1.5% $3.40 594,527 10.2% $23.13 $4,555,125 13.2% $177.95 $174,861 3.0% $6.80 58,287 1.0% $2.Z7 11,657 0.2% $0.45 408,009 7.0% $15.87 $852,814 11.2% $25.40 $3,902,311 2.00/6 $152.55 $1,798,439 $682;889.94 408,009 51,090,999 $55.682.11 C� 2 of r7 LJ 109 Marina Park Hotel Plan - RHC Communities 110 Proforma Summary 111 112 113 114 Number of Suites 115 Suites Occupied 116 Suites Available 117 118 Occupancy 119 Average Daily Rate 120 Revenue Per Available Room 121 122 123 REVENUE 124 Rooms 125 Telephone 126 Total 127 128 DEPARTMENTALEXPENSES 129 Rooms 130 Telephone 131 Total 132 133 DEPARTMENTAL PROFIT 134 135 OPERATING EXPENSES 138 Administrative & General 137 Marketing 138 Operation &.Maintenance 139 Utility Costs 140 Total 141 142 GROSS OPERATING PROFIT 143 144 FIXED EXPENSES 145 Management 145 Property Taxes 147 Insurance 148 Annual Lard Lease 149 Total 150 151 NET OPERATING INCOME 152 153 DEBT SERVICE 154 155 Transient Occupancy Tax (f,O.T) Projection 156 Land Lease 157 Annual Revenues to City of Newport Beach 158 Annual PAR Income 159 160 161 182 M �.ailx �"s._r;�tx �.�s��t�at• t, �.. m�.;.::., � },."�di�$:`cL'4s.,t;.,�..�as`�: 25,550 25,550 36;500 36,500 70.0% 70.0% $234.33 $239.02 $232.69 $237.35 Amount Percent PAR 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 11.34 $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;985 7B.3% $28.39 $1,444,700 23.70A $206.49 $1,473,594 23.7% $210.62 $196,194 3.37. $7.69 160,522 2.7% $6.29 154,577 2.6% $6.06 89,179 1.5% $3.49 .600,472 10.1% $23.53 $200,118 3.3% $7.84 163,733 2.7% $6.41 157,669 2.6% $6.18 90,963 1.5% $3.56 612,482 10.1% $24.00 $844,228 13.6% $182.98 :$861,113 13.6% $186.62 $178,358 3.0% $6.99 59,453 1.0% $2.33 11,891 0.2% $0.47 416,169 7.0% $10..30 $665,870 11.2% $26.09 $181,925 3.0% $7.13 60,642 1.0% $2.38 12,128 0.2% $0.48 424,492 7.0% $18.63 $679,188 11.2% $26.61 $178,358 2.4% $156.88 $181,925 2.4% $160.01 $1,798,439 $694,528.92 416,169 $1,010,696 $57,259.59 $1,798,439 $606,417.45 424,492 $1,030,910 $5B,4D4.78 0 3 of I Marina Park 115th Street Marina Facilities 2 Operating Pro Forma 3 4 5 6 Number or Boat Slips 7 Occupancy 8 Combined Average Slip Rent 9 (adjusts 2% annually) 10 11 REVENUE 12 13 Slip Fees 14 Late Fees 15 Interest Income 16 17 Total Revenues 18 19 OPERATING EXPENSES 20 5£0°8. Year:B, rBtYearl0u; 44 44 44 44 44 44 44 44 44 44 95.0% 95.01y. . 95.0% 95.0% 95.0% 95.0% 95.0% 95.0% 95.0% 95.0% $984.25 $1,003.94 1024.0137 1044.49397 1065.38385 1086.69153 1108.42536 1130.59387 1153.20575 1176.26986 $519;084 $530,078 $540,679 $551,493 $582,523 $573;773 $585,249 $598,954 $606,893 $821,070 $1,440 $1,488.80 $1,498.18 $1,528.14 $1,558.70 $1,589.88 $1,621.67 $1,654.11 $1,687.19 111,720.93 $300 $387.60 $395.35 $403.28 $411.32 $419.55 $427.94 5436.50 $445.23 $454.14 $521,504 $531,934 $542,573 $553,424 $584,493 $575,783 $587,298 $599,044 $611,025 $623,246 21 Operations 8 Maintenance (35 %) 182,526 188,177 189,900 22 Utility Costs 46,935 47,874 48,832 23 Management(5%) $26,075.20 $26,598.70 $27,128.84 24 Replacement Reserves $7,260.00 $7,260.00 $7,260.00 25 $904.25 26 Total $262,797 $287,908 $273,121 27 28 NET OPERATING INCOME $258,707 • $264,026 $269,452 29 �: %e#d 30 LAND LEASE PAYMENT TO CITY $12,353.52o $132,014,21 $134,727.07 31 32 DEBT SERVICE FOR REHAB COST $89,438.00 $69,438.00 $89,438.00 33 34 PARTNERSHIP REVENUES $39,915.52 $42,574.17 $45,287.03 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 193,698 197,572 49,808 50,604 $27,671.21 $28,224.04 $7,280.00 $7,260.00 $278,438 S2113,661 $274,986 $280,631 $137,494.20 $140,316.66 $89,438.00 $89,438.00 $48,054.18 $50,870.02 Boat Slip Details Ouantiy Cost Per Foot. Monthly Gross Slip fee 24 Foot Slips 11 $12.50 3300 $300.00 35 Foot Slips 11 $13.75 $5,293.75 $481.25 42 Foot Slips 22 $14.50 $13,398.00 $609.00 Combined average slip fee $904.25 Monthly Revenues Total 21991.75 0 201,524 51,820 528,709.13 $7,260.00 $289,393 $288,389 $143,195.57 $89,438.00 $53,755.53 205,554 52,857 $29,364.91 $7,260.00 $295,035 $202,262 $146,132.06 $69,438.00 $56,692.02 209,665 213,859 218,136 53,914 54,992 56,092 $29,952.21 $30,551.25 $31,162.28 $7,260.00 $7,260.00 $7,260.00 $300,792 $306,682 $312,650 $298,253 $304,363 $310,595 $149,127.28 $152,182.41 $155,298.64 $89,438.00 $89,43B.00 $89,438.00 $59,687.24 $62,742.37 $65,858.60 1 011 11 1 Marina Park Parking Proforma $190.368 2 S Operating Summary 3 4 244 Spaces • open 8 am to 10 pm daily 5 Construction Cosl Estimate 6 23 7 Gross Annual Revenues $10,000 8 Expenses 9 10 Net Operating Income 11 12 ease Rent to Developer 13 Percentage Rent to Developer 14 Total 15 16 Debt Service $235,593 • • $597,290 $609,235.80 $621,420.52 $633,848.93 $646,525.90 $659,456.42 $672,645555 $686,098.46 $699,820.43 $713,816.84 .$92,986 $94,845.72 $98,742.63 $98,677.49 $100.651.04 $102,664.08 $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 $205,673.10 $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 $290,880.22 $425,961 344 $443,169.82 $452,033.22 $461,073.89 $470,295.36 $479,70127 $488,285.30 .$489,081.20 $509,062:83 17 Total $190.368 18 20 21 22 Construction Cosl Estimate $2,440,000 23 Cost to.Conslmct Per Space $10,000 24 25 28 27 28 29 30 31 32 33 34 35 35 37 38 39 40 41 42 43 44 45 46 47 48 49 50 $235,593 $235,593 $235,593 $235,593 $235,593 $235,593 $235,593 $235,593 $235,593 $194,175.36 $198,058.87 $202,020:04 $206,060.45 $210,181.65 $214,385.29 $218,672.98 $223,046A5 $227,507.38 1 Marina Park Mobile Home Park 2 Operating Pro Forma 3 05FRWR 4 5 A8610.Ai 6 Number of Mobile Home Spaces 7 O=pancy 8. Combined Average of Space Rents 9 61 10 $1 11 REVENUE 12 97.0% 13 MHP Space Rent 14 Late Fees 15 Interest Income 16 1879.94 17 Total Revenues 18 1818.42108 19 1891.88529 20 OPERATING EXPENSES 21 22 Operations 8: 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 0 $1,205,604 $1,229,716 $1,254,310 $1,440 $1,468.80 $1,498.18 $460 $469.20 $478.58 $1,207,504 '$1,231,654 $1,256,287 241,501 246,331 251,257 48,300 49,260 50,251 $72,450.24 $73,899.24 $75,377.23 $3,050.00 $3,050.00 $3.050.00 $365,301 $372,546 $379,936 $842,203 $859,108 5876.351 $757,982.52 $773,198.09 $788,716.93 $84,220.28 $85,909.77 $87,634.08 $1,279,397 $1,528.14 $488.16 $1,281,413 258,283 51,257 $76,884.77 $3,050.00 $367,474 $893,939 $804,548.15 $89,392.88 0 $1,304,985 $1,558.70 $497.92 $1,307,041 261,408 52.282 $78,422.47 $3,050.00 $395,162 $911,879 $820,691.95 $91,186.86 $1,331,084 $1,357,706 $1,589.88 $1,621.67 $507.88 $518.03 $1.333,182 $1,359,846 266,636 271,969 53,327 54,394 $79,990.92 $81,590.74 $3,050.00 $3.050.00 $403,005 $411,004 $930,177 $948,842 $837,160.67 $853,958.76 $93,016.72 $94,863.17 $1,384,860 $1,654.11 $528.40 $1,387,043 277,409 55,482 $83,222.55 $3,050.00 $419,163 $967,880 $871,092.82 $98,786.96 $1,412,557 $1,440,808 $1,687.19 $1,720.93 $538.96 $549.74 $1,414,783 $1.443.079 282,957 288,616 56,591 57,723 584,887.00 $86,584.74 $3,050.00 $3,050.00 $427,455 $435,974 $987,298 $1,007,105 $868,569.56 S906,395.63 $98,728.82 $100,709.51 1 011 .88t` 05FRWR A8610.Ai 61 61 61 61 61 61 61 61 61 $1 97.0% 97.0% 97.0% 97.0% 97.0% 97.0% 97.0% 97.0% 97.0% 97.0% 1647 1879.94 1713.5388 1747.80958 1782.76577 1818.42108 1854.7695 1891.88529 1929.723 1968.31746 $1,205,604 $1,229,716 $1,254,310 $1,440 $1,468.80 $1,498.18 $460 $469.20 $478.58 $1,207,504 '$1,231,654 $1,256,287 241,501 246,331 251,257 48,300 49,260 50,251 $72,450.24 $73,899.24 $75,377.23 $3,050.00 $3,050.00 $3.050.00 $365,301 $372,546 $379,936 $842,203 $859,108 5876.351 $757,982.52 $773,198.09 $788,716.93 $84,220.28 $85,909.77 $87,634.08 $1,279,397 $1,528.14 $488.16 $1,281,413 258,283 51,257 $76,884.77 $3,050.00 $367,474 $893,939 $804,548.15 $89,392.88 0 $1,304,985 $1,558.70 $497.92 $1,307,041 261,408 52.282 $78,422.47 $3,050.00 $395,162 $911,879 $820,691.95 $91,186.86 $1,331,084 $1,357,706 $1,589.88 $1,621.67 $507.88 $518.03 $1.333,182 $1,359,846 266,636 271,969 53,327 54,394 $79,990.92 $81,590.74 $3,050.00 $3.050.00 $403,005 $411,004 $930,177 $948,842 $837,160.67 $853,958.76 $93,016.72 $94,863.17 $1,384,860 $1,654.11 $528.40 $1,387,043 277,409 55,482 $83,222.55 $3,050.00 $419,163 $967,880 $871,092.82 $98,786.96 $1,412,557 $1,440,808 $1,687.19 $1,720.93 $538.96 $549.74 $1,414,783 $1.443.079 282,957 288,616 56,591 57,723 584,887.00 $86,584.74 $3,050.00 $3,050.00 $427,455 $435,974 $987,298 $1,007,105 $868,569.56 S906,395.63 $98,728.82 $100,709.51 1 011 0 • 0 Fz If " i 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 parking services to RHC (Comm Communities. as part of past ur monthly management nt 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 tis hat engaged, which RHC Communities ties their can obtain independently. pedentl provided at a cost far lower than 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. Ampco System Parking shall be reimbursed by RHC roll burden, tickets, equipment expenses including labor, insurance, p Y 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. is AMPCO SYSTEM PARKING • • s ESTIMATE OF MONTHLY INCOME AND ASSOCIATED ASSUMPTIONS MARINA PARK (2003 Dollars) July 2000 Outside P".rRivW.v Jro-b] Nb4l M4r43 Ape43 ury 43 Jun-00 lulA Augd M043 Or143 NOV43 Decd T.W, ESTIMATE OF MONTHLY INCOME AND ASSOCIATED ASSUMPTIONS MARINA PARK (2003 Dollars) July 2090 T.ww AMPCO SYSTEM PARKING • • 0 0 5500 &"W TIES PHONE 5 CE SNPP NS A PRI I � 7pfAl DIRECT E %PEN I I NET RECEIPTS 600 MINIMUM RENT (1509 PERCENTAGE RENT i {w0 1109 TOTAL RENT also 550 550 S'A 2 S1A2 3150 i 3150 3500 1 3500 ss0 $50 350 95e 5399 fW 600 51.500 (1509 3100 5100 {w0 1109 floc also 550 550 S'A i�M 3190 f199 s w $150 ] sm 5501 950 5150 9450 I 5150 1.500 si.wal 31,509 3100 5100 {w0 350 550 4m 5100 3100 Sim t f 3 10.!11 f18,BB6 f 1!.911 itf,]30 a 10.911 f22y75 f 15.911 $25.650 s A 531 599 f31.053 A6.f% $11.591 AMPCO SYSTEM PARKING t0 ss9 fe90 33'A 3339 3tOD {300 f5o 3d9 {100 {109 atw ""a 93,= {3.000 $7,739 [7139 21.73p $011151 $38,161 329.]01 $ 15.911 $ 16.811 $ 15.011 { 0 INCOME. GROWTH INFLATION REVENUES: Is 3.0%1 2.0% 104% 3.0Y IS 190.934 PERCENTAGE RENT 2,0X 241A 2.0% 2.0°6 2003 2004 2005 2006 2007 Total HOTELGUE57 15 293.920 9 292.439 6 301,211 % 310247 S 319,551 5 1.507,370 TRANSIENT S 96:320 S 99.210 S 102,188 S 105,251 S 109,409 5 511,370 VALIDATIONS 5 21:250 S 21,999 5 22.5444 S 29220 S 23,917 S 112,619 CAR WASH 9 195800 S 201,874 S 207,"4 S 2tS.955 S 2206375 S 1.039,529 GROSS RECEIPTS $ 597290 S 615,209 S 693865 S 652,675 S 972.255. S 3.171,094 PARKING TAX S I S S S S S 5 S TOTAL REVENUES S 597:290 S 615,209 S 933,665 S 6+'2,676 S UM265 S 3.171,094 MINIMUM RENT Is 180.031 $ 1SD,W4 1 $ 190.934 15 190.934 IS 190.934 PERCENTAGE RENT Is 235.028. 5 ZU.4671 5 262,309 I S 279.SBB 13 291,251 TOTAL RENT S 42:,961 5 939,400 5 453,242 5 417.500 S 492.16E AMPCO SYSTEM PARKING RHC COMMUNITIES Neva B. Scott - Girl Scout House Rehab Newport Beach, CA Number of Square Feel 3,944 Construction Start 77101100 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 So: Ft ARCHITECTURAL &. ENGINEERING Architectural Plans 1 1,500 1,500 0.38 Permits (City) Request fee waiver t 0 0 am Total 1,500 0.38 SITEIMPROVEMENTS 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 Stone Drainage System -Hydro Jet t 290 290 0.07 Signage 1 1,000 1,000 0.25 Wood Fensing Replacement t 600 600 0.15 Miscellaneous 1 100 ]QQ 2,400 Total Exterior Paint 6,765 1.72 ROOFS & GUTTERS Re -Roof all buildings 1 4,970 4,970 1.26 Flooring (tile) Rain Gutters t 640 544. 0.1.5 1 Total 400 0.10 5,610 1.42 900 BUILDING INTERIORS 0.23 Kitchen -Range t 1,100 1,100 Stucco Repairs I goo 900 0.23 0.02 Dry Rol Wood Damage 1 2,000 2,000 0.51 Total Exterior Doors Replacement 4 600 2,400 0.61 Exterior Paint t 3,400 3,400 0.86 Window Replacement (Quanity creeds final count) 9 300 2,700 0.68 Key & Locks 6 24 144 0.04 Miscellaneous t 100 E Q Total 77,644 2.95 BUILDING INTERIORS Carpeting: t 980 980 0.25 Flooring (tile) t 2,900 2,900 0.74 Kitchen - Counters 1 400 400 0.10 Kitchen- Refrigerators 1 900 900 0.23 Kitchen -Range t 1,100 1,100 0.28 Kitchen- Garbage Disposals 1 65 65 0.02 Paint t 1,600 1.600 0,41 Total t 900 7,945 2.01 PLUMBING Slab Leaks t 350 350 0.09 Waste & Sewer Lines (Hydro-jet) t 500 500 0.13 Miscellaneous t 100 144 Total 950 :0.24 ELECTRICAL Exterior Security Lighting & 70 560 0.14 Exterior Lighting 10 25 250 0.06 Replacement of Sub - Panels t 900 20 0,23 Total 7,710 0.43 7/17/00,11:03 AM/Marina Park GS House Rehab Budget Page I of 2 • u • RHC COMMUNITIES Neva B. Scott - GiA Scout House Rehab Newport Beach, CA Number of Square Feet 3,944 Construction. Start 11101100 Project Acquisition 09/01/00 Construction Complete 02/01101 Line Item Number Description of Work MISCELLANEOUS Fire .Extinguashers Miscellaneous Total TOTAL HARD CONSTRUCTION COSTS 7!17100, 11:03 AM/Marina Park GS House Rehab Budget Page 2 of 2 Quantity Unit Total Per Ln- FtlNum C.99 909 Sp —Ft 4 90 360 0.09 1 100 144 4.43 460 0.12 30,974 a OR.ANGE COUNT Frida° B Y wV4ROMES.C°MI°C ]°aEis,s°°° Model for Developers: Treasure Island's OK by Coastal Commission By SEE?AA dFJILA,tJMFsarr,FF WRITER The California Coastal Commission's approval of the Treasure Island project m South Laguna Beach was what some are callinga textbook case of how to develop the coast. Unlike acrimonious divisions on other projects. the developer of Treasure Island, environmental foss and commission staff were able to resolve major differ- ences and move forward. While not everyone was sat- IsCmd, most were pleased by the unprecedented pro- tection of the oce m, "This is the wave of the future. We're at the crass- roads where we cant continue to do business —or pol- lution—as usual:' said Susan Jordan of the League for Carol protection- `It's also important: because it shored that a constructive relationship can occur be• tween developers and the commission when they're Please see MODEL. B8 MODEL: Laguna Project Continued Imm B3 working toward acommon goal of sound, sane development [and] protection of cosetal resouccee•" Other Is. cooperative develop - ere ought to follow the Athens Groups lead, sheadded Com ilsslonere said they sup- ported the 8150- miRion, five-star resort and housing Project because of alaundry list of comdiUons agreed to In advance by Athens Group of Phoenix. Those condi -. tions include stringent water quality requirements, . public access to beaches and caves that have been offdunite for decades, and ac- came for the disabled, 'T hope this becomes the stand- ard" for development. said Com- missioner Shirley Dettloff, also Huntington Beach city council- woman, coastKeeper Speaks , in Favor of Project The 275 -room hotel, 17 homes and 14 condominiums on 30 acreswere approved by the Laguna Beach City Council. in February, Orange county CoaxtKeeper. Cage faguna, the South IAgnna Civic Assn. and two individuals ap- pealed the city's approval to the commission, which trumps local government But by Wednesday a meeting. CoaslKeeper was speaking in favor of the project because the devel- oper agreed to major diversion of water nmdf and a five -year mod- bringprogram, 'Whenever we can come t gethei at the table and reach cam promise and take steps toward cleaner water, well support a p ect:' said Garry Brown of th Orange County CoastKeeper, "We're not against development We're not against growth, We' ,against pollotmgthe marine habi tat." Michael Beaman, vice presiders of the South Iaguna Civic Amn, said group members are please with the concessions they gar nered "Without our appeal, now of N more stringent water quality [w ditiona] would have been .requl , they re the most stringent California. Nor would the ameni ban been extended for the pub- lic:' Activists said including picnic tables was crucial to SHOW lower in- comes and multi- gelerallonal faml- Iles to enjoy the bluff -top park, Athens plans. to 6egin:oonetmc- lion In August and tWeh to two years. The comudsslon's approval marks the end of a four-year saga that Included hot debates at local meetfugs, a costly referendum and, finally, a long public hearing In Santa Barbara that drew dozens of passionate Orange County resi- dente before the conomesion. There were still opponents In the audience at Wednesday night's meeting. Toni iceman, the only Laguna Beach City Councg member to oP- posethe resort, said the project re- mains too big, blocks public views and takes up wine of Laguna Beach's last "sacred space." Iseman was one of about 10 Peo- pie signed up to speak Wednesday at the hearing, which didn't begin until 8p.m, Dozens of proponents wearing blue and white "1 support Treasure Island "buttons: and op- ponents waving banners had waited since morning to speak. Tom Ahem, president of Laguna. Beach's Chamber of Commerce, atmngly eupported the project "This, .. will bri ighigbVuabty visitors to Laguna Beach, It will stop the downward slide of more T- shirt shops and honky-tonk," he sad, Ann Christopb, a Pillage Laguna board member and former Laguna Beach mayor, said some of the mm- dlUons. such as a bluff -top setback o- of 45 feet, were victories, However, she felt. the staff and commission didn't have time to address other roj- Issues, such as the massive amount e of grading, It was just too late an hour, ma unfortunate time of day to be get- We're Ung Into more detnils,' she said. "The citizens who worked out this fought a valiant battle —it's not t easy to be continuously ... working against the developer and d your own city." 'The things we did achieve werE really quite remarkable, consider e ing what we were up against,' n- Christoph added, citing the con red snitants, attorney, architect0. anc m landscapers the developer brough Use to the meeting, .... u arcus �,Millichap Real Estate investment Brokerage Company one Lakeshore Ccetre 3281 E. Goasd Road suite 800 Ontario, CA 91761 July 17, 2000 ,rei! 909 605 1800 Fax: 9096051832 Mr. Richard Hall RHC Communities, LLC 20201 SW Birch Street Suite 250 Newport Beach, CA 92660 offWas aruugbour rhea» rredswres Reference: Mir a ark Hotej Site. Balboa Peninsula..Ne o Beacci 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 buildings 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 •/nR ardt A Y R E r S HOTEL GROUP • A Y R E S 5 1 N GE 1905 Marina Park Hotel /Residential 0 Development by the Ayres Group t•= 0n /lr'chrr o/7 orr /�cr•rr t�rr�jo'vrrirr lc�r /� <nn� . COUNTRY INNS & SUITLS in, EARLS Alpine Cardiff by the Sea. • Corona • Corona West • Costa Mesa • Diamond Bar Grapevine • Ontario Airport • Ontario at the Nulls Mall • Orange • Son Clemente • Yorloo Linda 355 Bristol Street • Suite f • Costa Mesa • California 92626 • Office: 714. 549. 0300 • Facsimile: 714. 850. 0302 • w .countrysultes.com L�l .1 = ®r, al ti .1 = J r^ I -J - :\It�) �: � '" - ,Rr ..r �_- � < - .- ' .�.., � �' - _- ..iii- _ ..t+4Yr !.: �- �` - as - - ` -' ..r _ '.� >� r. L. 1 � � � . �. �� � x `' �'i Country Inn & Suites 325 Bristol Street, Costa Mesa, California 92626 714.549.0300 TOLL FREE RESERVATIONS 800.322.9992 South coast Nara T N 405 Freeway exit Bristol South, then 1 mile to the comer of Bristol and.Redhill. 55 Freeway exit Baker, go right, turn left on Bristol. (No exit off Bristol on the 55). HOTEL FEATURES & SERVICES 300 Deluxe Rooms U 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** reakfast * / Morning Newspaper Complimentary Beverage °Y Fresh Fruit / Homebaked Cookies Pav -Per -View Movies / HBO, ESPN, CNN; Disney Channel s.a" b iMmq Only - t.d„kd .;th a ax. Country QQI..,,n^^,n���s & Suites 'a QAY- • Ontario at the Mills Mall 909.481.0703 909.390.7778 909.738.9113 • Ontario Airport • Corona West • Diamond.. Bar • San Clemente • Cardiff by the Sea Alpine 619.445.5800 Corona 909.734.2140 Grapevine 805.248.1530 909.860.6290 949.498.8800 760.944.0427 Ontario 909.937.9700 Orange 714.978.9168 Yorba Linda 714.921.8688 Visit our website at: www.countrysuites.com COSTA MESA Y Y ) ya iR Country Inn &�• ^^,�S----_uites_ °y CAY"a A . i t- t �... ice-- r a �. t " Z. At IN am 11 as Not ion IN, ME OR 111 7- ti A-- 0f activity and recreation are part of the formula for the perfect getaway, ' two heated pools, spas and a fitness studio, 0 cobblestone I� garden courtyard is a perfect spot to unwind amidst lush, fragrant flowers, plants, and the soothing sound and visage of cascading water in our imported tile fountain. Enjoy lunch or dinner in our Le Chateau Restaurant, a warm and intimate setting offering . a wide variety of continental cuisine, and always, the finest service. 0 rw o matter what the occasion —business meetings, social gatherings or receptions for up to ZOO people — our conference facilities and catering professionals are always ready to care for your needs, large or small. L.J SAII, European- inspired guest rooms and suites are exquisitely appointed with 4 mahogany Queen Anne style furniture and matching . armoire with television, ceiling fan and refrigerator, all surrounded by the beauty of French inspired floral wallpaper. (our studio suites add the sensual pleasure of a whirlpool spa, a four- poster bed and the convenience of a micro - kitchen. ,t A.Idendflcadon 1 0 • A. Identification 1. Ayres Hotel Group Ayres Homes 2. Ownership Structure 355 Bristol Street, Suite A, Costa Mesa, CA 92626 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 Douglas Ayres, (714) 540 -6060 ext. 125 5. Name of Operator Ayres Hotel Group — now managing 15 properties 6. Development proiects Hotels: 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 Firm role 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 role 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 (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 134te 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 0 0 B. Project Description • i. ry , -s. , 40 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 Plan, - Ayres Group BALBOA BLVD WEST t 0 0 0 I r Cc r II r Site Elam Gvnce t wwa7 tunulO aPr[w[r �6! n(qu[Q rua lo[n urt w Baal a r. wr¢ a1Wlw sn �o .ml auulwl uWlw• uWnca uae[c wa. a.an ar. ac IIAI)ar. a ®6 RU MV .M anria MPO alAaG 4.Har, CN ar. MNi al. L9lal. lAll al. 90an[aRy 1.1W aI. mra &war. a.mr ar. aanaa, anwr i.lmar. ONO alWlw (P6 M.IR a (, N \iC IWa 11D a f. rtRa m.n e {arrnuMi sar a r. ubl I.Ml WM a lan IW rO DaMarC �I�II�layl af. as 9VKilK Vr yr,Vr.11 a Grua TL T Vr a�lw MWIM T V. LLI F— cc W Oa. 33: 2[or CL a. O co rf-? C'3 z w �a LLI p to to ALT Ram -+_0 0 Residential Proforma Leased Lots C Marina Park Prepared for Ayres Group [O David K. Landes O'DonnelUAtkins Company Marina Park Newport Beach, CA Site Plan Concept (Robert Tuttle) 7/17/2000 Leased Land Lots 1.5 (leased Land). SFD on 2250. SQ FT Lots. 30 x 75' 5 $1.480.000 Average S 4.030.66 $ 20.153 S 241.840 59.862.88 Lots 7 -11 (Leased Land) SFD on 2250 SQ FT Lots. 30 x 75' 5 Average Projected 1 S 2.392.95 S 11.965 S 143.577 Sales Tax to City Lots 6 and 12 (Leased Land) SFD on 1875 SQ FT lots. 25'X 75' 2 Projected Finished Lot Average Lease Total Monlly Total Yearly Lease of Newport Reach DestHlition Dimensions No. of Lots Home Value Value Revenue (7 CAP) Lease Revenue Revenue (1.25%) Lots 1.5 (leased Land). SFD on 2250. SQ FT Lots. 30 x 75' 5 $1.480.000 5690 770 S 4.030.66 $ 20.153 S 241.840 59.862.88 Lots 7 -11 (Leased Land) SFD on 2250 SQ FT Lots. 30 x 75' 5 $980.000 $410.220 1 S 2.392.95 S 11.965 S 143.577 $7.122.25 Lots 6 and 12 (Leased Land) SFD on 1875 SQ FT lots. 25'X 75' 2 5800.000 $319.650 $ 1.964.63 S 3.729 $ 44.751 S6.IX0,138 Lots 13 -23 (Leased Land) SFD on 2500 SQ FT Lots. 25'x 100' 11 5609.091 5239.864 S 1.399.20 S 15.391 S 184.695 54.415.34 Lots 24 -30 (Leased Land) SFD nn 30(81 SQ FT Lots. 30 x I W 7 5735.714 5323:625 S 1.887.81 S 11215 S 158.576 55.151.12 Lots 31 -33 (Leased Land) SFD ran 2250 SQ FT lots. 30'x 75' 3 S1.0001000 5423.450 S 2.470.13 S 7.410 S 88.925 S7,206.88 Lot 34 (Leased Land? Multifamily Lot 4.125 55'x 75' 1 51.600.000 S997.350 S 5.817.88 S 5.818 S 69.815 S7.533.13 Lots 35 -39 (Leased Land) SFD on 2250 S FT lots. 30 x 75' 5 SI 450.000. 5671.125 5 3.914:40 S 19.574 S 234.894 59.735.94 Lot 40 (Leased Land) SFD on.2625 SQ FT Lots..35' x 75' 1 81.650.000 $803.425 S 4.686.65 S 4.687 S 56.240 $10.582.19 Totals 40 Assumptions: I All M the residential (and is leased from the City of Neupon Beach at a 7 CAP 2 No School Fee credit for exisiung units 3 No Affordable Housing Component included 4 No relocation money included O'Donne ns Company 101,943 $ 1,223 ,311 $ 67,814 L J LAND RESIDUAL Project: Marina Park Product Type:. SFD on 2250 SQ FT Lots. 30'x 75' Units: Lots 1 -5 (Leased Land) ovation Newport Beach venue Cross Revenue Site Plan 7/17/00 Acres: Avg Sq Fit Absorb /Mo: Tot Set Ft: 2500 1 12500 1.492 7/17/2000 Base S5.000 $25.000 0.34% Per DU 1 1 $1.600.000 2500 $670.00 $1.600.000 21.62'% Per DU 2 4 $1,450.000 2500 $580.00 $5.800.000 78.39'% Per DU 3 $47.000 $235.000 3.182 4 $275.000 $1375.000 18.58% PerSq Pt 5 $6.250 $31.250 0.422 PerSq Ft Subtotal 5 $1.480.000 2500 $592.00 $7.400.000 100.002 Per Budget Premium $2.500 $12.500 0.17'% Per SgFt Location 1 $0 $287.500 $0 0.002 Average $0 S44.400 $0 0.00% 2 Of Rev Subtotal Gross Revenue $1,480.000 $62.900 $7.400.000 100.002 2 Of Rev Closing Costs $18.500 S92.500 1.2595 2 Of Rev Warranty $11,100 $55.500 0.752 2OfRev Closing $19.050 $95.250 1.29% Per DU Discounts $0 $0 0.00'% Per DU Subtotal Closing Costs $30.150 $150.750 2.042 Total Net Revenue $1,449.850 $7,249,250 97.96% % Rev Project Costs Finishing overnment Fees (Including school fees) Land improvement • Offsitcs Land Improvement - Onsitcs Rec / Amenities / Common Area Subtotal Finished Lot Costs Construction Costs Building Construction (Directs) Indirect Const / General Conditions Soft Costs Contingency Subtotal Construction Costs Other Costs Marketing Interest Expense & Land Carry Finance Property Taxes HOA G &A Subtotal Other Costs Total Costs Builder Profit Land Residual shed Lot Cost MH $690.970 46.692 $22,000 $110,000 1.492 Per DU S5.000 $25.000 0.34% Per DU $18.000 $90.000 122% Per DU $2.000 $10.000 0.14% Per DU $47.000 $235.000 3.182 $110.00 $275.000 $1375.000 18.58% PerSq Pt $2.50 $6.250 $31.250 0.422 PerSq Ft $1.50 $1750 $18.750 0.2590 Per Budget $1.00 $2.500 $12.500 0.17'% Per SgFt S115.00 $287.500 $1.437.500 19.43% S44.400 $222.000 3.002 2 Of Rev $62.900 $314.500 4.25% 2 Of Rev $18.500 S92.500 1.2595 2 Of Rev $4,144 $20.720 0.28% Per DU $1.036 $5.180 0.07'% Per DU $44.400 $222,000 3.00% 2 Of Rev S175380 $876.900 11.852 $509.880 $2,549.400 34.452 % Rev $296.000.00 $1A80.000 20.00% '%OfRev $673,970 $3.219.850 43.51% '%+OfRcv $690.970 46.692 Project: Product Type: Units: Location Revenue Gross Revenue Marina Park SFD on 2250 SQ FT Lots, 30' x 75' Lots 7-11 (Leased Land) Newport Beach Site Plan 7/17/00 Acres: Avg Sul FII Absorb /him Tot Sul Ft: 2500 1 12500 Base $959,850 S4,799,250 97.94% I I $1.100.000 2500 5440.00 $1,100.000 22.45% 2 4 $950.OD0 2500 $380.00 $3,800,000 77.55% 3 $18,000 $90,000 1.84% Per DU 4 $2,000 $10,000 0.20% Per DU 5 $47,000 $235.000 4.80% Subtotal 5 $980,000 2500 $392.00 $4,900,000 100 -00% Premium $6,250 $31,250 0.64% Per Sri FI Location I $0 $18,750 $0 0.06°6 Average $0 $12.500 $0 0.00% Subtotal Gross Revenue $980,000 $237,500 $4,900,000 100.00% Closing Costs $29,400 $147,000 3.00% 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 Total Net Revenue Project Costs Lot Finishing Government Fees (including school fees) Land Improvement - Offsites Land Improvement - Onsites Rec / Amenities I Common Area Subtotal Finished Lot Costs Construction Costs Building Construction (Directs) Indirect Contt /General Conditions Soft Costs Contingency Subtotal Construction Costs Other Costs Marketing Interest Expense & Land Carry Finance Property Taxes HOA G &A Subtotal Other Costs Total Costs Builder Profit Land Residual Finished Lot Cost u J $20,150 $100,750 2.06% $959,850 S4,799,250 97.94% $22,000 $110,000' 2.24% Per DU $5,000 $25,000 0.51% Per DU $18,000 $90,000 1.84% Per DU $2,000 $10,000 0.20% Per DU $47,000 $235.000 4.80% $90.00 $225,000 S1,125.000 22.96% Per Sri Ft $2.50 $6,250 $31,250 0.64% Per Sri FI $1.50 $3,750 $18,750 0.38% Per Budget $1.00 $2,500 $12.500 0.26% Per Sri Ft $95.00 $237,500 $1,187,500 24.23% $29,400 $147,000 3.00% %Of Rev $41.650 $208,250 4.25% %Of Rev $12,250 $61,250 1.25% % Rev $2,744 $13,720 0.28% Per DU $686 $3,430 0.07% Per DU $29,400 $147,000 3.00% % Rev $116,130 $580.650 11.8570 $400.630 $2.003.150 40.88% %Of Rev $196,000.00 $980.000 20.0070 % Rev $363,220 51,816,100 37.06% % Rev $410.220 41.86% u J 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 / Ala I Location Newport Beach Tot Sq Ft: 2200 Revenue Gross Revenue Site Plan 7 /17/011 Base 1 I $1.000.000 2200 E454.55 E1:000.000 62.50% 2 1 5600.000 2200 $272.73 $600.000 37.50% 3 4 5 Subtotal 2 $800.000 2200 $727.27 $1.600.000 100.00% Premium Location I $0 EO 0.00% Average $0 EO 0.00% Subtotal Gross Revenue $800.000 $1.600.000 100.00% Closing Costa Ea.aw $ I2.Wb 0.1611E qF Or nav Warranty $10.550 $21.100 1.32% Per DU Closing 50 so 0.00% Per DU Discounts :Subtotal Closing Costs $16.550 533.100 2.07% Total Net Revenue $783.450 $1.566.900 97.93`.6 Project Costs ' Lotovernmen Government Fees (Including school ices) $22.000 $44.000 2.75% Per DU Land Improvement - Offsites $5.000 $10.000 0.63% Per DU Land Improvement - Onsilcs. $18.000 $36.000 2.25% Per DU Rce/ Amenities / Common Area $2.000 $4.000 015% 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 Coast / General Conditions $2.50 $5.500 $11.000 0.69% Per Sy Ft Soft Costs $1.50 $3.300 $6.600 0.41% Per 0udget Contingency $1.00 52.200 $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% % Rev Interest Expense & Land Carry $34.000 $68.000 4.25% % Of Rev Finance $10.000 $20.000 1.25% % Rev Property Taxes $2.240: $4,480 0.29% 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 5350.800 $701.600 43.85% % Rev Builder Profit $160.000.00 $320.000 20.00% % Rev Land Residual 5272.650 $545.300 34.08% % Rev Finished Lot Cost $319.650 39.96% F-1 L-j Project: Marina Park Acres: Product Type SFD on 2500 SQ FT Lots. 25'x lay Avg Sq Ft; $22.000 2500 3.61:5 Per DU Units: Lots 13-23 (Leased land) Absorb /Mo: I $55.000 0.82% Location Newport Beard, Tot Sq Fl: 27500 $198.000 2.96% Revenue Rcc /Amcni ties /Common Area SZ.000 $22.000 0.33% Gross Revenue Site Plan 7/17!00 Suhlolal Finished Lot Costs $47,000 S517,000 7.72% Base Construction Costs I I 5700.000 2500 :Building Construction (Directs) 5280.00 5700.000 10.45'16 24.63% 2 10 5600.000 1500 Indirect Consl / General Conditions $240.00 $6.000.000 89.59% 1.03% 3 Sufi Costs 51.50 $3.750 $41.250 0.62% 4 Contingency $1.00 $2.500 $27,500 0.41% 5 Subtotal Construction Costs 565.00 $162.500 SI,787.500 26.68% Subtotal II $'09,091 2500 Other Costs $243.64 $6.700.000 100.00% Premium Marketing $18,273 $201.000 3.00% Location 1 $0 Interest Expense & Land Carty $0 0.00% 4.25% Average $0 Finance $0 0.00% 1.25% Subtotal Gross Revenue $609.091 Property Taxes $6.700,000 100.00% 0.28% Closing Costs IIDA 44,864 440 450 0.93% 46 Of Rev Pcr DU G & A E8,I64 $89.600 1.34% Per DU Closing Closng Subtotal Other Costs SO $0 0.00`90 Per DU Discounts Total Costs 5281.677 53,098,450 46.25% Subtotal Closing Costs Builder Profit $12.732 $140.050 2.090% 20.00% Total Net Revenue Land Residual $596.359 $6.559,950 97.91% 31.66% Project Costs Lot Government Fees (Including school fees) overnmen $22.000 $242.000 3.61:5 Per DU Land Improvement - Offsitcs $5.000 $55.000 0.82% Per DU Land Improvement.-.Onsites $18.000 $198.000 2.96% Per DU Rcc /Amcni ties /Common Area SZ.000 $22.000 0.33% PerDU Suhlolal Finished Lot Costs $47,000 S517,000 7.72% Construction Costs :Building Construction (Directs) $60.00 5150.000 $1,650.000 24.63% Per Sq Fl Indirect Consl / General Conditions S2.50 56.250 $68.750 1.03% Per Sq Fl Sufi Costs 51.50 $3.750 $41.250 0.62% Per Budget Contingency $1.00 $2.500 $27,500 0.41% Per Sq Fl Subtotal Construction Costs 565.00 $162.500 SI,787.500 26.68% Other Costs Marketing $18,273 $201.000 3.00% % Rev Interest Expense & Land Carty $25.886 $294,750 4.25% % Of Rev Finance 57.614 $83.750 1.25% % Rev Property Taxes $1.705 $18.760 0.28% Per DU IIDA $426 $4.690 0.071k Pcr DU G & A $18,273 S2011000 3.00% % Rev Subtotal Other Costs $72.177 $793.950 11.85% Total Costs 5281.677 53,098,450 46.25% % Rev Builder Profit $121,818.18 $1.340.000 20.00% % Rev Land Residual $192.964 $2.121.500 31.66% % Rev Finished Lot Cost $239.964 39.38% ProJcct: Marina Park Acres: Product Type: SFI7 on 3000 SQ FT Lots, 30' x 100' Avg Sq Ft: 2500 Units: Lots 24 -30 (Leased land) Absorb / ¢lo: I Location Newport Beach Tot Sq Ft: 17500 Revenue Gross Revenue Site Plan 7/17170 Base 8Y 3896 1 6 5750.000 2300 $)00,00 $4100100 2 1 $650,000 2500 $260.00 5650.000 12.62% 3 4 5 Subtotal 7 $735,714 2500 $294.29 $5,150,000 100.00% Premium Location 1 $0 $0 0.00% Average E0. 50 0.00% Subtotal Gross- Rcvcnuc $735,714 $5,150,000 100.00% Closing Costs $5,318 $38:625 0.75% % Rev Warranty $9.746 $68.225 1.32% Per DU Closing s0 $0 0.00% Per DU Discounts Subtotal Closing Costs $15.264 $106.850 217% Total Net Revenue 5720.450 $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 Recd 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 Sq Ft Indirect Const / General Conditions $2.50 $6.250 $43.750 0.85% Per Sq Ft Soft Costs $1.50 $3.750 526.250 0.51% Per Budget Contingency $1.00 52.500 $17500 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% % Rev Finance $9.196 $64.375 1.25% % Rev Property Taxes $2,060 $14,420 0.28% Per DU HOA 5515 $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'% % Rev Finished Lot Cost 5323.625 43.99% . r� u Project: Marina Park Product Type. SFD on 2250 SQ FT Lots. 30'.x 75' Udlst Lois 31-33 (Leased Land) Location Newport Beach Revenue Gross Revenue Site Plan 7/17/00 Acres: Avg Set Ft: Absorb /Mo: Tot Sq Ft: 2500 1 7500 97.95% Base $22.000 $66,000 2.20% 1 2 !Dl0.0o0 2l06 f9l0.t10 11.600.006 09.997E 2 1 $1,1(10.000 2500 $440.00 $1.100.000 36.67% 3 $2.000 $6.000 0.20% 4 $47,000 $141.(00 4.70% 5 $90,00 $225.000 $675.000 22.50% Subtotal 3 $1.000,000 2500 $2.50 $400.00 $3,000.000 100.00% Premium $1.50 $3.750 $11,250 0.38% Location I g0 $1.00 $2.500 $0 0.00% Average s0 $95.00 $237.500 $0 0.00% Subtotal Gross.Rcvcnuc $1.000.000 $30.000 $3.000.000 100'00% Closing Costs $42.500 $127,500 4.25% Warranty $7.500 $22.500 0.75% % Rev Closing $13.050 $39.150 1.31% Per DU Discounts s0 $0 0.00% Per DU Subtotal Closing Costs $20.550 $61.650 2.06% Total Net Revenue Project Costs Lot Finishing Government Fees (Including school fees) Land Improvement - Offsilcs Land Improvement - Onsiles Rcc.I Amenities / Common Area Subtotal Finished Lot Costs Construction Costs Building Construction (Directs) Indirect Consl / General Conditions son Costs Contingency Subtotal Construction Costs Other Costs Marketing Interest Expense& Land Carry Finance Property Taxes HOA G & A Subtotal Other Costs Total Costs Builder Profit Land Residual Finklled Lot Cost $423,450. 42.35% • $979.450 $2.938.350 97.95% $22.000 $66,000 2.20% Per DU $5,000 $15.000 0.50% Per DU $18,000 $54.000 1.80 %. Per DU $2.000 $6.000 0.20% Per DU $47,000 $141.(00 4.70% $90,00 $225.000 $675.000 22.50% Per Sq FI $2.50 $6.250 $18.750 0.63% Per Sq Ft $1.50 $3.750 $11,250 0.38% Per Budget $1.00 $2.500 $7.500 0025% Per Set F1 $95.00 $237.500 $712.500 23.75% $30.000 $90.000 3.00% %Of Rev $42.500 $127,500 4.25% %Of. Rev $12,500 $37.500 1.25% % Rev $2,800 $8.400 0.28% Per DU $700 $2,100 0.07% Per DU $30,000 $90,000 3.00% %Of Rev $118.500 $355,500 11.85% $403,000 $1,209,000 40.30% %Of Rev $200.000.00 $600.000 20.00% % Rev $376.450 $1,129.350 37.65% % Rev Finklled 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 341 Lcasc(J Land) Absorb f \Io: 1 Location Ncaport Beach Tot Sq Fl: 4400 Revenue Gross Rcvcnuc Site Plan 7117100 Base I I $1.600.00 4400 $363.64 $1,600,000 100.00% 2 3 4 5 Subtotal I 31.600.000 1100 f363.64 51.600.000 100.00% Premium Location I $0 so 0:00% Average So $0 0100% Subtotal Gross- Acvcnue $1,600.00 $1.600,000 100.00% Closing Costs Warranty $12.000 $12.000 0.75% % Rev Closing 520.550 $20.550 1.28% Per DU Discounts S0 So 0.00% Per DU Subtotal Closing Costs 532,550 $32.550. 2.03% Total Net Revenue 51.567,450 $1,567.450 97.97% Project Costs Lot Finishing Government Fees (Including school fees) $22.00o 522.000 1.389E Per DU Land Improvement • Offsites $5.000 55.000 031% Per DU Land Improvement • Onsites 518.000 $18,000 1.13% Per DU Rcc /Amenities /Common Area S2.0W $2,000 0.13% Per DU Subtotal Finished Lot Costs $47.000 547,000. 2.94% Construction Costs Building Construction !Directs) $50.00 $55,000 $55.000 3.44% Per Sq FI Indirect CosstI General Conditions $2.50 $2,750 $2.750 0.17% Per Sq Ft Soft Costs $1.50 $1.650 $1.650 0 -10% Per Budget Contingency $1.00 $9,100 $1,100 0.07% Pcr Sq Ft Subtotal Construction Costs $55.00 560;500 560.500 3.78% Other Costs Marketing $48,000 $4&000 3.00%. % Rev Interest Expcnse & Land Carry $68.000 $68.000 4.25% % Of Rev Finance $20.000 S20.W0 1.25% % Rev Property Taxes $4,480 54.480 0.28% Per DU HOA $1.120 $1,120 0.07% Per DU G & A S48.ODO S48.00D 3.00% % Of Rev Subtotal Other Costs S189.600 $189,600 11.85% Total Costs 5297,100 $297.100 18.57 %. % Rev Builder Profit $320.000.00 5320.000 20.00% % Rev Land Residual $950.350 5950,350 59.40% % Rev Finished Lot Cost %997,350 62.33% Project: M Marina Park A Gross Revenue Site flan 7117100 1 5 $1.450.000 2 3 4 5 Subtotal 5 $1.450.000 2500 $580.00 $7,250.000 100.00',5 2500 5580.00 57.250.000 100.0040 Premium Location 1 s0 $0 0.00% Average 50 $0 0.00% Subtotal Grass Revenue $1.450,000 $7.250.000 100.00% Closing Cosh Warranty $10.875 $54.375 0.75% % Rev Closing $18.675 $93.375 1.29% Per DU Discounts s0 $0 0.00% Per DU Subtotal Closing. Costs $29.550 5147,750. 2.04% Total Net Revenue $1,420.450 $7,102.250 97.96% Project Costs Lot Finishing Government Fees (Including school fees) Land Improvement - Of'sites Land Improvement - On5ites Ree I Amenities / Common Area Subtotal Finished Lot Costs Construction Cosh Building Construction (Directs) Indirect Cons[ / General Conditions Soft Costs Contingency Subtotal Construction Costs Other Costs Marketing Interest Expense & land Carty Finance Property Taxes HOA G &A Subtotal Other Cosh Total Costs Builder Profit Land Residual Finished Lot Cost $22.000 $110,000 1,527, Per DU $5.000 $25.000 0.34% Per DU EI8A00 590.000 114% Per DU $2.000 510.0011 0.14% Per DU 547,000 $235.000 3.24% $110.00 $275.000 $1,375,000 18.97% Per Sq F/ 52.50 $6,250 $31.250 0.43% Per Sq Ft $1.50 53.750 S18.750 0.26% Per Budget $1.00 $2,500 $12.500 0.17% Per Sq Ft 5115.00 5287.500 51.437.500 19.83% $43,500 5217,500 3.00% % Rev $61.625 $308.125 4.25% % Rev $18,125 590,625 1.25% % Rev $4.060 $20.300 018% Per DU $1.015 55.075 0.07% Per DU $43.500 $217.500 3.00% % Rev $171.825 $859,125 11.85% $506.325 S2.531.625 34.92% %Of Rev $290,000.00 $1,450.000 20.00% % Rev $624.125 $3,120.625 43.04% % Of Rev $671.125 46.28% • 0 Project Costs Lot Finishing Government Fees (Including school fees) Land Improvement - Of'sites Land Improvement - On5ites Ree I Amenities / Common Area Subtotal Finished Lot Costs Construction Cosh Building Construction (Directs) Indirect Cons[ / General Conditions Soft Costs Contingency Subtotal Construction Costs Other Costs Marketing Interest Expense & land Carty Finance Property Taxes HOA G &A Subtotal Other Cosh Total Costs Builder Profit Land Residual Finished Lot Cost $22.000 $110,000 1,527, Per DU $5.000 $25.000 0.34% Per DU EI8A00 590.000 114% Per DU $2.000 510.0011 0.14% Per DU 547,000 $235.000 3.24% $110.00 $275.000 $1,375,000 18.97% Per Sq F/ 52.50 $6,250 $31.250 0.43% Per Sq Ft $1.50 53.750 S18.750 0.26% Per Budget $1.00 $2,500 $12.500 0.17% Per Sq Ft 5115.00 5287.500 51.437.500 19.83% $43,500 5217,500 3.00% % Rev $61.625 $308.125 4.25% % Rev $18,125 590,625 1.25% % Rev $4.060 $20.300 018% Per DU $1.015 55.075 0.07% Per DU $43.500 $217.500 3.00% % Rev $171.825 $859,125 11.85% $506.325 S2.531.625 34.92% %Of Rev $290,000.00 $1,450.000 20.00% % Rev $624.125 $3,120.625 43.04% % Of Rev $671.125 46.28% • 0 $43,500 5217,500 3.00% % Rev $61.625 $308.125 4.25% % Rev $18,125 590,625 1.25% % Rev $4.060 $20.300 018% Per DU $1.015 55.075 0.07% Per DU $43.500 $217.500 3.00% % Rev $171.825 $859,125 11.85% $506.325 S2.531.625 34.92% %Of Rev $290,000.00 $1,450.000 20.00% % Rev $624.125 $3,120.625 43.04% % Of Rev $671.125 46.28% • 0 $290,000.00 $1,450.000 20.00% % Rev $624.125 $3,120.625 43.04% % Of Rev $671.125 46.28% • 0 Project: Marina Park Acres: Product Type: SFD an 2625 SO Fr Lots. 35' x 75• .Avg Sq Ft: 2500 Units; Lot 40 (Leased Land) Absorb / Mo: I Location Newport Beach Tot Sq FI: 2500 Revenue Grass Revenue Site flan 7117/1x1 Base 1 I $1.650.000 2500 $660:00 $1.650.000 100.00'.6 2 3 4 5 Subtotal I Eh650.000 2500 $660.00 $1.650.000 100.00% Premiurn Location I $0 SO 0.00% Average so $0 0.00% Subtotal Gross.Revenue $1.650.000 $1.650,000 100.00 %. Vin.lna t-NwtA $12.375 $12.375 0.75% % Rev Warranty Closing $21.175 $21.175 1.28% Per DU Discounts so $0 0100% Per DU Subtotal Closing Costs $33.550 $33.550 2.03 %. Total Net Revenue $1.616.450 51,616.450 97.97% Project Costs Lot Government Fees (Including school fees) vern n $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 Casts $115.00 5287:500 $287.500 17.42% Other Costs Marketing $49.500 $49.500 3.00% % Rev Interest Expense & Land Carry $70.125 $70.125 425% % 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% % 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% % Rev Land Residual $756.425 $756.425 45.84% % Rev Finished Lot Cost $803.425 48.69% 1r u • Residential Proforma Combination of Leased Lots and Fee Lots Marina Park Prepared for Ayres Group By: David K. Landes o'DonnelUAlkins Company • s Marina Park Newport Beach, CA Site Plan Concept (Robert Tuttle) 7/17/2000 Combination of Leased Land and Fee Land Lots 1-5 (Leased Intl) SFD on 2250 SQ FT Lots: 30' x 75' S SL480,000 $690,970 Average $ 20,153 S 241,840 $9.863 Lots 7 -11 (Leased Land) SFD on 2250 SQ FIF Lots, 30'x 75' 3 $980.000 $410,220 Average Projected $ 143.577 57,122 Lots and 12 (Leased Land) SFD on 1875 SQ FT Lots. 25' x 75' Sales Tax to City $800.000 $319.650 $ 1.864.63 Projected Finished Lot Average Lease Total Morally Total Yearly Lease Total Revenue or Newport Beach Description Dimensions Lots Home Valuc Value Revenue (7 CAP) Lease Revenue Revenue from Lot Sales (1.25 90) Lots 1-5 (Leased Intl) SFD on 2250 SQ FT Lots: 30' x 75' S SL480,000 $690,970 $ 4.030.66 $ 20,153 S 241,840 $9.863 Lots 7 -11 (Leased Land) SFD on 2250 SQ FIF Lots, 30'x 75' 3 $980.000 $410,220 1 $ 2.392.95 $ 11.965 $ 143.577 57,122 Lots and 12 (Leased Land) SFD on 1875 SQ FT Lots. 25' x 75' 2 $800.000 $319.650 $ 1.864.63 $ 3,729 $ 44.751 $6,004 Lots 13 -23 (Fee Ownership) SFD on 2500 SQ FT Lots. 25' x 100' 11 $609.091 $239,864 $2.638,500 $7.614 Lots 24 -30 (Fee Ownership) SFD on 3000 SQ FT Lots, 30'x 100' 7 $735.714 $323,625 $2.265.375 $9,196 Lots 31 -33 (Leased Lund ) SFD on 2250 SQ FT LoM 30' x 75' 3 $1 .000.000 $423.450 $ 2.470.13 $ 7.410 S 89.925 57.207 Lot 34 (Leased land) Multifamily Lot 4.125 55`k 75' I $1.600,000 $997.350 $ 5,81718 S 51818 $ 69,815 $7,533 Lots 35 -39 (Leased land) SFD on 2250 SQ FT Lots, 30' x 75' 5 $1,450.000 $671.125 S 3,914.90 $ 19,574 S 234.894 $9,736 Lot 40 (Leased Land) sFD on 2625 SQ FT Lots. 35' x 75' 1 $1,650,000 5803.425 $ 4.686.65 $ 4,687 $ 56.240 $10;582 Totals 40 Assumptions: I Lots 13-23 and 24 -30 are sold by the City of Newport Beach 2 No School Fee credit for exishing units 3 No Affordable Housing Component included 4 No relocation money included O'Donnell/Alkins Company 73,337 $ 880,040 $ 4,903,875 $ 7058 Project: Marina Park Product Type: SFD on 2250 SQ FT Lou. 39 x 75' Units: Lots 1 -5 (Leased Land) Location Newport Beach Revenue Acres: Avg Sell Ft: 2500 Absorb / Mo: I Tot Sq Ft: 12500 Gross Revenue Site Plan 7/17/00 Base - 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 51,480.000 2500 $592.00 $7.400,000 100.00% Premium Location 1 $0 s0 0.00% Average s0 $0 0.00% Subtotal Gross Revenue $1,480,000 $7,400,000 100.00% Financing Value of Leased land $690,970 $0 Monthly Lease Payment @ 7 CAP 0.07 ($4,031) $0 Value of Structure $789.030 $1,480.000 Down Payment 20% $157,806 $296,000 $138,194 Principal $631,224 $1,184,000 Monthly Principal and Interest 8.50% ($4,854) ($9,040) Total Monthly Home Payments ($8,884) ($9,040) ($156) 0 0 • 0 Project: Product Type: Units: Location Revenue Marina Park SFD on 2250 S FT Lots, 30'x 75' Lots 7 -11 (Leased Land) Newport Beach Gross Revenue Site Plan 7/17/00 Base Acres: Avg Sq Ft: 2500 Absorb / Mo: I Tot Sq Ft: 12500 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% 3 $5,000 $25,000 0.51% Per DU 4 $18,000 $90,000 1.84% Per DU 5 $2,000 $10.000 0.20% Per DU Subtotal 5 $980,000 2500 $392.00 $4,900,000 100.00% Premium $225,000 $1,125,000 22.96% Per Sq Ft Location 1 $0 $31,250 $0 0.00% Average $0 $18,750 $0 0.00% Subtotal Gross Revenue $980,000 $12,500 $4,900,000 100.00% Closing Costs $237,500 $1,187,500 24.23% Warranty $29,400 $7,350 $36,750 0.75% % Of Rev Closing $41,650 $12,800 $64,000 131% Per DU Discounts $12,250 $0 $0 0.00% Per DU Subtotal Closing Costs $2,744 $20,150 $100,750 2.06% Total Net Revenue Project Costs Lot Finishing Government Fees (Including school fees) Land Improvement - Offshes. Land Improvement - Onsites Rec / Amenities / Common Area Subtotal Finished Lot Costs Construction Costs Building Construction (Directs) Indirect Const / General Conditions .Soft Costs Contingency Subtotal Construction Costs Other Costs Marketing Interest Expense & Land Cary Finance Property Taxes HOA G &A Subtotal Other Costs Total Costs Builder Profit Land Residual Finished Lot Cost $959,850 $4,799,250 97.94% $22,000 $110,000 2.24% Per DU $5,000 $25,000 0.51% Per DU $18,000 $90,000 1.84% Per DU $2,000 $10.000 0.20% Per DU $47,000 $235,000 4.80% $90.00 $225,000 $1,125,000 22.96% Per Sq Ft $2.50 $6,250 $31,250 0.64% Per Sq Ft $1.50 $3,750 $18,750 038% Per Budget $1.00 $2,500 $12,500 0.26% Per Sq Ft $95.00 $237,500 $1,187,500 24.23% $29,400 $1.47,000 3.00% % Of Rev $41,650 $208,250 4.25% % Rev $12,250 $61,250 1.25% % Rev $2,744 $13,720 0.28% Per DU $686 $3;430 0.07% Per DU $29,400 $147,000 3.00% % Of Rev $116,130 $580,650 11.85% $400,630 $2,003,150 40.88% % Of Rev $196.000.00 $980,000 20.00% % Of Rev $363,220 $1,816,100 37.06% % Rev $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 / bfo: 1 Location Newport Beach Tot Sq Ft: 2200 Revenue Gross Revenue Site Plan 7117100 Base 1 1 $1,000,000 2 1 $600,000 3 4 5 Subtotal 2 $800,000 2200 $454.55 $1,000,000 62.50% 2200 $272.73 $600.000 37.50% 2200 $727.27 $1,600.000 IOOAO% Premium $22,000 $44,000 2.75% Location 1 $0 $0 0.00% Average $0 PerDU $0 0.00% Subtotal Gross Revenue $800,000 2.25°5 $1,600,000 100.00% Closing Costs $4,000 0.25% Per DU 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`Po Project Costs Lot Finishing Government Fees (Including school fees) Land Improvement - Offshes Land Improvement - Onsiles Reel Amenities / Common Arm, Subtotal Finished Lot Costs Construction Costs Building Construction (Directs) Indirect Const / General Conditions Soft Costs Contingency Subtotal Construction Costs Other Costs Marketing Interest Expense & Land Carry Finance Property Taxes HOA G &A Subtotal Other Costs Total Costs Builder Profit Land Residual Finished Lot Cost $319,650 39.96% Is 0 $22,000 $44,000 2.75% Per DU $5.000 $10,000 0.63% PerDU $18,000 $36,000 2.25°5 Per DU $2,000 $4,000 0.25% Per DU $47,000 $94,000 5.88% $90.00 5198,000 $396,000 24.75% Per Sq Ft $2.50 $5,500 $11,000 0.69% Per Sq Ft $1.50 $3,300 $6,600 0.41% Per Budget 51.00 $2,200 $4,400 0.28% Per Sq Ft $95.00 $209,000 $418,000 26.13% $24,000 $48,000 3.00% % Rev $34,000 $68,000 4.25% % Rev $10,000 $20,000 1.25% % Rev $Y240 $4,480 0.28% Per DU $560 $1,120 0.07% Per DU $24,000 $48,000 3.00% % Rev $94,800 $189,600 11.85% $350,800 $701,600 43.85% % Rev $160,000.00 $320,000 20.00% % Rev $272,650 $545.300 34.08% %Of Rev $319,650 39.96% Is 0 Pro Product Type: Units: Location Revenue Gross Revenue 1 2 3 4 5 Subtotal Marina Park Acres: SFD on 2500 SQ FT Lots. 25'x 100' Avg Sq Ft: 2500 Lots 13 -23 (Fee Ownership) Absorb / MO; I Newport Beach Tot Sq Ft: 27$00 Site Plan 7/17100 1 $700.000 2500 $280.00 $700.000 10 $600.000 2500 $240.00 $6.000.000 10.45% 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 $4,568 $50.250 0.75% % Rev Warranty 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 - Offsftes $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 Flnished 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 SqP Subtotal Construction Costs $6500 $162.500 $1.787.500 26.68% Other Costs Marketing $18,273 $201.000 3.00% % Rev Interest Expense & Land Carry $25.886 $284.750 4.25% %Of Rev Finance $7.614 $83,750 1.25% % Rev Property Taxes $1.705 $18.760 018% Per DU HOA $426 $4.690 0.07% Per DU G & -A $18.273 $201,000 3.00% % Rev Subtotal Other Costs Total Costs Builder Profit Land Residual Finished Lot Cost • $72,177 $791950 11.85% $281,677 $3.098.450 46.25% % Rev $121.818.18 $1.340.000 20.00% % Rev $192.864 $2,121500 31.66% % Rev $239.864 39.38% Project: Marina Park Acres: Product Type: SFD on 3000 SQ FT Lou. 30'x 100' Avg Sq Ft: 2500 • Units: Lou 24 -30 (Fee Ownership) Absorb /Mo: 1 Location Newport Beach Tot Sq Ft: 0.68% 17500 Land Improvement - Onsites Revenue $18,000 $126,000 2.45% Per DU Gross Revenue Site Plan 7/17100 $2,000 $14.000 0.27% Base Subtotal Finished Lot Costs $47,000 $329,000 1 6 $750,000 2500 $300.00 $4,500,000 87.38% 2 1 $650.000 2500 $260.00 $650,000 12.62% 3 $1,050,000 20.39% Per Sq Fl Indirect Contt / General Conditions 4 56,250 $43,750 0.85% Per Sq Fl 5 $1.50 $3,750 $26,250 0.51% Subtotal 7 $735,714 2500 Contingency $294.29 $5,150,000 100.00% Premium Per Sq Ft Subtotal Construction Costs $65.00 $162,500 Location 1 $0 22.09% $0 0.00% Average $0 $0 0:00% Subtotal Gross Revenue $735.714 $22,071 $154,500 $5,150,000 100.00% Closing Costs $31,268 $218,875 4.25% Warranty Finance $5,518 $38.625 0.75% % Rev Closing % Rev $9.746 $68,225 1.32% Per DU Discounts 0.28% $0 $0 0.00% Per DU Subtotal Closing Costs $3,605 $15.264 $106,850 2.07% Total Net Revenue , $720,450 $5,043,150 97,93% Project Costs Lo[ 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 Sq Fl Indirect Contt / General Conditions $2.50 56,250 $43,750 0.85% Per Sq Fl 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% % Rev Interest Expense & land Carry $31,268 $218,875 4.25% % Of Rev Finance $9,196 $64,375 1.25% % 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% % Rev Subtotal Other Costs $87,182 $610,275 11.85% Total Costs $296,682 $2,076,775 40.33% % Rev Builder Profit $147,142.86 $1,030.000 20.00% % Rev Land Residual $276,625 $1,936,375 37.60% % Rev Finished Lot Cost $323,625 43.99% r� U Project: Marina Park Acres: Product Type: • SFD on 2250 SO FT Lots, 30'x 75' Avg Sq Ft: 2500 Units: Lots 31 -33 (Leased Land) Absorb./ MO: l Location Newport Beach Tot Sq Ft: 7500 Revenue Gross Revenue Site Plan 7 117/00 - -- 1 2 $950,000 2500 $380.00 $1,9001000 63.33% 2 1 $1,100,000 2500 $44000 $1,100,000 36.67% 3 4 5 Subtotal 3 $1,000,000 2500 $400.00 $3,000,000 100.00% Premium $0 0.00% Location 1 $0 Average $0 $0 0.00% Subtotal Gross Revenue $1,000,000 $3,000,000 100.00% Closing Costs $7,500 $22,500 0.75% % Rev Warranty $13,050 $39,150 1.31% Per DO Closing $0 $0 0.00% Per DU Discounts Subtotal Closing Costs $20,550 561,650 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 DO Land Improvement - Onsites $18,000 $54,000 1.80% Per DO 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 Cons(/ 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 $71500 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% % 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 DO HOA $700 $2,100 0.07% Per DO G & A $30,000 $90,000 3.00% % Rev Subtotal Other Costs $118,500 $355500 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% % Rev Finished Lot Cost $423A50 42,35% Protect: Marina Park Acres: $0 Product Type: Multifamily Lot 4,125 55'x 75' Avg Sq Ft: 1100 $1,600,000 Units: Lot 34 (Leased Land) Absorb / Me: I $0 Location Newport Beach Tot Sq Ft: 4400 Revenue Gross Revenue Site Plan 7117100 Base 1 2 3 4 5 Subtotal 1 $1,600,000 4400 $1,600,000 Premium 512,W0 Location 1 $0 Average $0 Subtotal Gross Revenue $1,600,000 Closing Costs Warranty Closing Discounts Subtotal Closing Costs Total Net Revenue Project Costs Lot Finishing Government Fees (Including school fees) Land Improvement - Offshes Land Improvement - Onsites Rec / Amenities / Common Area Subtotal Finished Lot Costs Construction Costs Building. Construction (Directs) Indirect Const / General Conditions Soft Costs Contingency Subtotal Construction Costs Other Costs Marketing Interest Expense & Land Carry Finance Property Taxes HOA G &A Subtotal Other Costs Total Costs Builder Prot7l Land Residual Finished Lot Cost $363,64 $1,600,000 100.0090 1100 $363.64 51,600,0110 100.00% $0 0.00% $0 0.00% $1,600,000 100.00% i 512,W0 $12,000 0.75% % Rev $20,550 $20,550 128% Per DU $0 $0 0.00% Per DU $32,550 $32,550 2.03% 51,567,450 $1,567,450 97.97% $22,000 $22,000 1.38% Per DU %5,000 $5,000 0.31% Per DU $18,000 $18,000 1.13% Per DU $2000 $2,000 0.13% Per DU $47.000 $47,000 2.94% $50.00 $55,000 $55,000 3.44% Per Sq Ft $2.50 $2,750 $2,750 0.17% Per Sq .R $1.50 $1,650 $1,650 0.10% Per Budget $1.00 $1,100 $1,100 0.07% Per SqR $55.00 $60,500 $60,500 3.78% $48,000 $48,000 3.00% % Rev $68,000 $68,000 4.25% % Rev $20000 $20.000 1.25% % Rev $4;480 $4,480 0.28% Per DU $1,120 $1,120 0.07% Per DU $48,000 $48,000 3.00% % Rev $189,600 $189,600 11.85% $297,100 $297,100 18.57% % Rev $320000.00 $320,000 20.00% % Of Rev $950,350 $950,350 59.40% % Rev $997,350 62.33% i Project. Marina Park Acres: Product Type: SFD on 2250 SQ FT 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 7 117/00 Ruor 2 3 4 5 Subtotal 5 $1.450,000 2500 $580.00 $7.250,000. 100.00% 5 $1;450.000 2500 $580.00 $7,250.000 100.00% Premium $0 0.00% Location 1 $0 Average $0 $0 0.00% Subtotal Gross Revenue $1,450,000 $7,250,000 100.00% Closing Costs $10,875 $54,375 0,75% '%Of Rev Warranty $18675 $93,375 1.29% Per DU Closing $0 $0 0.00% Per DU Discounts 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 1.2d% Per DU Rec / Amenities / Common Area $2,000 $10,000 0.14% Per DU Subtotal Finished Lot Costs $47.000 $235,000 324% Construction Costs Building. Construction (Directs) $110.00 $275.000 $1,375,000 18.97% Per Sq Ft Indirect Coast/ 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 0417% Per Sq Fl Subtotal Construction Costs $115.00 $287,500 $1,437,500 19.8390 Other Costs Marketing. $43,500 $217500 3.00% % Rev Interest Expense & Land Carry $61,625 $308,125 4.25% % Rev Finance $18,125 $90,625 1.25% % Rev Property Taxes $4,060 $20.300 0.28% Per DU HOA $1015 $5.075 0.07% Per DU G & A $43500 $217500 3.00% % Of Rev Subtotal Other Costs $17 LIM $859,125 11.85% Total Costs $506,325 $2,531,625 34.92% % Rev Builder Profit $29Q000.00 $1,450.000 20:00% % Rev Land Residual $624,125 $3,12025 43.04% % Rev Finished Lot Cost $671,125 46:28% u Project Marina Park Ate: Product Type: SFD on 2625 SQ FT Lots, 35' x 75' Avg Sq. Ft: 2500 • Units: Lot 40(Leased land) Absorb /Mo: I Location Newport Beach Tot Sq Ft: 2500 Revenue Gross Revenue Site Plan 7/17/00 Base 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`90 Per DO Discounts $0 $0 0.00% Per DO 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 DO Land Improvement- Onsites $18,000 $18,000 1.09% Per DO Rec / Amenities / Common Area $2,000 $2,000 0.12% Per DO 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 R Indirect Const / General Conditions $2.50 $6,250 $6,250 0.38% Per Sq R Soft Costs $1.50 $3,750 $3,750 0.23% Per Budget Contingency $1.00 $2500 $2.500 0.15% Per Sq R Subtotal Construction Costs $115.00 $287,500 $287,500 17'42% Other Costs Marketing $49,500 $49,500 3.00% % Rev Interest Expense & Land . Carry $70,125 $70,125 4.25%u % Rev Finance .$20,625 $20,625 115% % Rev Property Taxes $4,620 $4,620 0.28% Per DO HOA $1,155 $1,155 0.07% Per DO 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% % Rev Builder ProPtl $330,000.00 $330,000 20.00% % Rev Land Residual $756,425 $756,425 45.84% % Rev Finished Lot Cost $803,425 48.69% r� �J n LJ Newpon Beads - 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 0 0 - - Year 10. 32% S 6.86 Year 2 Marketing 166259 Year 3 SA9 5.60 Property Operation 8 Maintenance 160.321 2.4% $ 3.79 5.40 Utility Costs 83 1.4%5 309 83 Total 627.924 9.6% S 83 S 21.15 11.000 02% 29.689 - 0.37 11.000 22.721 0.36 0.48 24.539 5.0% 1ID23 11.05 30296 5.0% 30.295 9.07 S 595.928 9.1% S 30295 S 20.07 S 400.826 9.7% 98.0% 1323 $ 17.64 75% 70.3% $352-27 S155.38 $2.680.365 81% $ 88.48 S 117.97 210.01) 160.00 1 &&W 215.60 135.00 149.85 Amount - Percent RaR POR Amount Percent PAR FOR Amount Pei wn PAR POR S6.531.602 99% S'2850 $220.00 54.069.625 99.2% S 135.00 $180.00 54.539.706 992% S 149.55 S185.00 30.000 0.5% 099 1.01 33.000 0.8% 1.09 1.45 36.300 0.8% 1.20 1.48 S6.561.602 100.016 S'2%59 $221.01 $4.122.825 100.0% $136.09 $181.45 f 4.576.006 100.0% S151.05 S106.48 S 705.116 10.85 S 2326 S 23.75 S 539.630 13.2% S 17.81 S 23.75 S 582.800 128% S 1924 S 2175 19.500 65.0% 0.64 0.66 21.450 65.0% 0.71 0.94 23595 65.05. 0.78 0.96 S 724.616 11.0% S '9192 S 24.41 S 567.080 13.6% S 18.52 $ 24.69 $ 606.395 133% S 20.02 S 24.71 S5.836.986 890% S 192.67 S 196.60 UNDISTRIBUTED OPERATING EXPENSES Administrative 8 General S 207.824 32% S 6.86 S 7.00 Marketing 166259 2.41E S SA9 5.60 Property Operation 8 Maintenance 160.321 2.4% $ 3.79 5.40 Utility Costs 93.521 1.4%5 309 3.15 Total 627.924 9.6% S ID.73 S 21.15 GROSS OPERATING PROFIT FIXED EXPENSES Management Fees Property Taxes Insurance Land Lease Total NET OPERATING INCOME $3.561.745 66.4% S 117.57 S 156.76 S 159.049 3.9% S 5.25 S 7.00 127.239 3.1% S 4.20 5.60 122.695 3.0% S 4.05 5A0 71.572 1.7% S 2.36 3.15 480.554 11.7% S 15.86 S 21.15 $ 5.209.061 79.4% S 17194 S 175.45 $3.081.191 74.7% $101.71 S135.61 S 195.848 3.0E S 650. S 6.63 S 123.685 30% S 4.08 S 5.44 60.000 0.9% 196 2.02 60.000 1.5% 1.98 2.64 11.000 02% 036 0.37 11.000 0.3% 0.36 0.48 328.080 5.0% 1ID23 11.05 206.141 5.0% 6.80 9.07 S 595.928 9.1% S 19.67 S 20.07 S 400.826 9.7% S 1323 $ 17.64 S4.613.133 70.3% $352-27 S155.38 $2.680.365 65.0% $ 88.48 S 117.97 Occupancy Tax Projection S 653.160 S 408,983 Land Lease 326,080 206.141 S 981 ,240 $ 615.124 Page 1 $3.959.611 86.7% S 131.03 S 161.77 S 171.773 3.8% S 5.67 S 7.00 137.418 3.0% S 454 5.60 132.510 29% S 4.37 5.40 77.298 1.7% S 2.55 3.15 518.999 113% S 17.13 S 21.15 S3.450.612 75.4% S 113.90 S 140.62 S 137260 30% S 4.53 S 5.59 60.000 13% 1.98 2A5 11.000 02% 0.36 OAS 228.800 50% 7.55 9.32 S 437.080 91% S 14A3 S 17.81 S3.013.531 65.9% S 99.47 S 122.81 S 453,971 -228.900---'- S 682,771 Newport Beach Balboa Island Income Summary Projections - r $ 180.255 Year 4 $ 5.95 Years Marketing 144101 Year 6 1 Room Count 5.60 83 139.054 2.8°% $ 87 5.40 Utility Costs 81.115 83 27.568 $ 2.68 Rooms Occupied Total 25151 11.0°% $ 17.98 26357 1.98 218 11.000 30.295 0.36 0.43 Rooms Available 0.2% 30.295 0.42 246.465 5.D% .30295 9.57 252.240 5.0°% 8.33 9.57 $ 465:344 Occupancy $ 15.36 85% S 474.583 9.4% S 15.67 87% S 3.263.921 66.6% S108.40 91% 13.362.727 66.7% Average Daily Rate S 127.59 190.00 190.00 19500 Rooms Revenue Per Available Room 161.50 16530 177 -45 Amount ' Percent PAR POR Amount Percent PAR POR Amount Permt PAR POR REVENUE Rooms $ 4,892.643 99.3% $ 161.50 S 190.00 S 5.007.764 .993% $ 165.30 $ 190.00 S 5.375.848 993X, S 177.45 $ 195.00 Telemmmuniotions 76.653 01% 121 1.42 37.030 0,7 °% 1.22 110 37.400 0.7% 113 1.36 Total $ 4.928.306 100.0% $ 162.71 $ 191.42 5.044.793 100.0% S 166.52 S 191.40 S 5.413148 700.0% $ 178.66 $ 196.36 DEPARTMENTALEXPENSES $ 2175 Rooms $ 611380 12.5% $ 20.19 $ 2175 $ 625.970 12.5% S 20.66 $ 2175 $ 654:751 122% S 21.61 Telemmmunica6ons 23:837 65.0% 0.79 0.93 24.069 65.0% 0.79 0.91 24.710. 65.0% 0.80 0.88 Total S 635.411 129 °1. S 20.97 S 24.68 S 550.040 12:9% S 21.46 $ 24.66 S 679.061 125'% $ 22.41 $ 24.63 DEPARTMENTAL. PROFIT 54.293894 87.1% $ 141.74 S 166.75 UNDISTRIBUTED OPERATING EXPENSES Administrative d General $ 180.255 3.7% $ 5.95 $ 7.00 Marketing 144101 2.9% S 4.76 5.60 Property Operation 8 Maintenance 139.054 2.8°% $ 4.59 5.40 Utility Costs 81.115 1.6% $ 2.68 3.15 Total 544.6M 11.0°% $ 17.98 S 21.15 GROSS OPERATING PROFIT FIXED EXPENSES Management Fees Property Taxes Insurance Land Lease Total NET OPERATING INCOME $4.394.753 87.1% $ 145.07 $ 166.74 $ 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% S _2.74 3.15 557.443 11.0% S 18.40 S 21.15 S 3.749266 76.1% $ 123.76 $ 145.60 S3.837.310 76.1% $ 12666 S145.59 5.10 5.60 148,870 28% $ 4.91 5.40 86.841 $ 147,878 3.0% $ 4.88 $ 5.74 $ 151.344 3.0% $ 5.00 S 5.74 60.000 12% 1.98 2.33 60.D00 11% 1.98 218 11.000 01% 0.36 0.43 11.000 0.2% 0.36 0.42 246.465 5.D% 8.14 9.57 252.240 5.0°% 8.33 9.57 $ 465:344 9.4% $ 15.36 S 18.07 S 474.583 9.4% S 15.67 S 18.01 S 3.263.921 66.6% S108.40 $ 127.53 13.362.727 66.7% S 111.00 S 127.59 Occupancy Tax Projection $ 489264 $ 500.776 Land Lease $ 24SAN S 252.240 $ 735.730 S 753.016 Pa� $ 4.734.187 87.17'% $ 15627 $ 171.72 S 192.979 3E% $ 637 S 7.00 154.383 29% $ 5.10 5.60 148,870 28% $ 4.91 5.40 86.841 18% $ 2.87 3.15 583.073 10.8% $ 1915 $ 21.15 $4.151.114 76.7% S 137.02 $ 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 93% S 16.64 $ 1818 S3647055 67.4% $.120.38 S 132.29 $ 537.585 $-274).662.---' -° - 608.247 0 DEPARTMENTAL PROFIT $ 5.085:740 87.8% S 167th S 176.71 $ 5.229.773 88.1% $ 172.63 S 181.71 UNDISTRIBUTED OPERATING EXPENSES 3.3% S 6:86 $ 7.00 S 201A62 3.4% S 6.65 S 7.00 Administrative 8 General S 201.462 3.5% Newport Beach - Balboa Island 6M S 7.00 1.5% S 3.09 5.32 5.60 Marketing 161.169 2.8% 5 532 Income Summary Projections 161.169 2.7% $ property Operation 6 Maintenance 155.413 2.7% S 5.13 5.40 155.413 26% $ Year 7 5.40 3.15 Utility Costs Year 8 1.6% S. Year 9 3.15 90.658 1.5% S 83 S 2009 $ 21.15 83 608.702 10.5% Room Count 20M $ 21.15 608.702' 10.3% 28.780 Total 29.689 Rooms Occupied 28.780 30295 $ 4.477.038 '77.3% $ 147.78 30295 $ 4.621.071 77.8% Rooms Available $ 160.56 30295 FIXED EXPENSES $ 173.815 3.0% S 5:74 9596 S 178.143 3.0% $ 95% S 6.19 Management. Fees 60.000 98% 196 Occupancy 60.000 200.00 1.98 2.08 205.00 11.000 .210.00 0.38 11.000 Average Daily Rate 0.36 0.38 Insurance 289.691 194.75 9.55 10.07 205:80 5.0% Rooms Revenue Per Available Room 10.32 . 190.00 S 534506 92% S 17. S 18:57 S 546.048 92% S 18.02 S. 18.97 Total Amount Percent PAR POR Amount Percent PAR POR Amount Percent PAR POR REVENUE $ 5.756 :050 993% S 190.0 $ 200.00 $ 5.899.951 99:4% $ 194.75 $ 205.00 S 6234.711 99.4% $ 205.80 270.00 Rooms Telecommunications $ 589.995 S 206 33 $6273244 700 0% $ 207.07 5 271.30 Total S 5.793 24 100.0% S 1973 3 201.31 S 5.938.103 100.0% S 196:07 S 865.296 DEPARTMENTAL EXPENSES S 23.75 $ 683.531 11.6% $ 22.58 $ 23.75 5 705.116 11.3% S 23.28 S .7 Rooms S 683.531 11.9% $ 2255 65.0% 65.0% Telecommunications 65.0% 24.0 S 708.3 0 1.99E S 2338 S 24.67 S 730. 63 16% S 24.70 $ 24.59 Total 724'553 S 08.084 % S 2337 S DEPARTMENTAL PROFIT $ 5.085:740 87.8% S 167th S 176.71 $ 5.229.773 88.1% $ 172.63 S 181.71 UNDISTRIBUTED OPERATING EXPENSES 3.3% S 6:86 $ 7.00 S 201A62 3.4% S 6.65 S 7.00 Administrative 8 General S 201.462 3.5% $ 6M S 7.00 1.5% S 3.09 5.32 5.60 Marketing 161.169 2.8% 5 532 5 :60 161.169 2.7% $ property Operation 6 Maintenance 155.413 2.7% S 5.13 5.40 155.413 26% $ 5.13. 2.99 5.40 3.15 Utility Costs 90658 1.6% S. 299 3.15 90.658 1.5% S S 2009 $ 21.15 608.702 10.5% S 20M $ 21.15 608.702' 10.3% Total GROSS OPERATING PROFIT $ 4.477.038 '77.3% $ 147.78 $ 155.56 $ 4.621.071 77.8% S152.54 $ 160.56 FIXED EXPENSES $ 173.815 3.0% S 5:74 S 6:04 S 178.143 3.0% $ 5.88 S 6.19 Management. Fees 60.000 1.0% 196 2.08 60.000 1.0% 1.98 2.08 Property Taxes 11.000 02% 036 0.38 11.000 02% 0.36 0.38 Insurance 289.691 5.0% 9.55 10.07 296.905 5.0% 9.80 10.32 . Land Lease S 534506 92% S 17. S 18:57 S 546.048 92% S 18.02 S. 18.97 Total NET OPERATING INCOME. $ 3.942.532 68.0 % S 130.14 S136.99 $ 4.075.023 66.6% S 134.51 S 141..59 Occupancy Tax Projection S 575.605 $ 589.995 Land Lease 289.691 296.905 S 865.296 $ 886:900 Page 3 $ 5.543.081 BSA% S 182.97 S 186 :70 S 207.824 3.3% S 6:86 $ 7.00 166.259 2.7% S 5.49 5.60 160.321 2.6% S 5.29 5.40 93.521 1.5% S 3.09 3.15 627.924 10.0% S. 20.73 S 21.15 $4.915.157 78.4% E 162.24 S 165.55 S 188.197' 3.0% S 6.21 $ 6.34 60.000 1.0% 1.98 2.02 11.000 02% 0.36 0.37 313.662 5.0% 10.35 10.56 S 572.860 9.1% S 18.91 $ 19.30 $4.342297 69.2% S 143.33. S 146.26 $ 623.471 _3!3.662 _... • _. Newport Beach - Balboa Island Income Summary Projections Occupancy Average Daily Rate Rooms Revenue. Per Available Roan REVENUE Rooms Telecommunications Taal DEPARTMENTALEXPENSES Rooms Telecommunications Total DEPARTMENTAL PROFIT 70% 170.00 119.00 Amount • Percent PAR POR S 3.605.105 98.9% S 119.00 S 170.00 38.919 1.1% 126 1.64 $3.544.024 100.0% S 12MZ $171.64 S 503.654 14.0% S 1663 S 23.75 25297 65.0% 0.84 1.19 S 528.951 14.5% S 17.46 S 24.94 $3.115.072 05.5% S 10232 $ 146.89 UNDISTRIBUTED OPERATING EXPENSES Administrative 6 General Year 1 4.1% Room Count 83 Rooms Occupied 21.207 Rooms Available 30.295 Occupancy Average Daily Rate Rooms Revenue. Per Available Roan REVENUE Rooms Telecommunications Taal DEPARTMENTALEXPENSES Rooms Telecommunications Total DEPARTMENTAL PROFIT 70% 170.00 119.00 Amount • Percent PAR POR S 3.605.105 98.9% S 119.00 S 170.00 38.919 1.1% 126 1.64 $3.544.024 100.0% S 12MZ $171.64 S 503.654 14.0% S 1663 S 23.75 25297 65.0% 0.84 1.19 S 528.951 14.5% S 17.46 S 24.94 $3.115.072 05.5% S 10232 $ 146.89 UNDISTRIBUTED OPERATING EXPENSES Administrative 6 General S 148.446 4.1% S 4.90 S 7.00 Marketing 118.756 3.3% S 392 5.60 Property Operation 6 Maintenance 114.515 3.1% S 3.78 5.40 Utiliy Costs 66.600 1.8% S 221 3.15 Total 448.517 12.3X, S 1431 S 21.15 GROSS OPERATING PROFIT FIXED EXPENSES Management Fees Property Taxes. Insurance Land Lease Total NET OPERATING INCOME Occupancy Tax Projection Land Lease $2.666.555 732%. S 80.02 S 125.74 S 109.321 3.0% S 361 S 5.16 60.000 1.6% 196 2.83 11.000 0.3% 0.36 0.52 182201 5.0% 6.01 8.59 S 362.522 9.9% $ 1197 S 17.09 $2.304.033 .632% S 76.05 S 108.65 S 360.511 182201, S 542.712 0 Palo • a 9 0 C. Ground Lease C Ground Lease 0 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 lJ 0. Council Agenda Item #9 March 25, 2008 Approval of Professional Services Agreement for the Preparation of Schematic Design Services, Environmental Impact Report, Geotechnical Investigation, and Project Management Services for Marina Park. Please see Contract File #'s C -4030 TerraCosta Consulting Group C- 4030(A) Rabben/Herman Design Office C- 4030(B) Michael Brandon Associates C- 4030(C) Gable Engineering, Inc. (19 �e>EWPORT CITY OF NEWPORT BEACH Hearing Date: August 22, 2000 COMMUNITY AND ECONOMIC Agenda Item. = DEVELOPMENT No.: 22 PLANNING DEPARTMENT Staff Person: Sharon Z. Wood 3300 NEWPORT BOULEVARD (949) 644 -3222 NEWPORT BEACH, CA 92658 (714) 644 - 3200; FAX (714) 644 -3250 REPORT TO THE MAYOR AND CITY COUNCIL sE£ofjC4AL_I/vAA j'S 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: BACKGROUND 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. DISCUSSION 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 Lesal 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 Matinapark 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 Assis ant City Manager Attachments: 1. Proposal Summary . 2. Proposal Guidelines 3. Letter from Ficker & Stevens 4. Letter from Parks, Beaches and Recreation Commission 5. Letter from Girl Scout Council Page 3 Marina Park Proposals Proposal SvMMaly 0 0 hnplemenliallon Mobile Hand Residenilal Senedvla Development Lease Ta ove Project Oescrlpton Units Lease Revenue Other Revenue Costs A. American Legion Renovation & extended lease of existing building. No Change. No Change. None... $500,000 B. Ayres Group 63 room - 2 story hotel, keeps Legion Hall and removes 49 8mobile homes $162.20110 $326.060(1) TOT of $760,511 to $20,000,000 mobile home sites. $653.160 Removes 6 mobile home sites. Builds new on-site Legion 52 mobile homes, 17 single There would be a one C. Bendeai Company Hall. Adds new detached and aaachea housing. boat sops. family homes, 'and 24 $2,000.000 to time development profit of $41.323,300 44 room seaside inn with a resbr aanl and diner. and $1000,000(1) $2.8 million paid to She 21,000 s.f of retailroffice space. lownh0uses City. U. V'I1 & H Cinunu5sin° I'mpuses lu,,sm ve ul least 2.56cres OI iaa vabOnNpen No Illnblle hate: a hoes not apply E49,000r $'L,000.dJO ,lute m any redevelopment. rosidanhal units. Realms the American Legion without the slips, builds new L F,cker 6 Stevens visitors marina and service facility, repair shipyard. marine No mobile homes a Not induced. 50% of the net M.Illr(21. 515.000.000 !dialed retail, and several reslOwaills Possible future . site reSACnlinl WLIS lot IIIO NuwpOlt Nau16ID Mu5ew11 Keeps all mobile liana sites. Builds claw on-site LegiOil P IO IC t.alVlnnlillci Ilan Adds a butuliguc 100 roan l'Olel, restaurant. Iwo 56 moUiie 110li1e's. $100,000 down payment, TOT and sales taxes 41 $4.700.000(3) storyparklnp Uaego. reconligurLs recreation areas. and $700.00010$1,100,00011) $360.000. tioa expanua, tit the exisliLd marina. I'rur,,es a I b6 vide slyka resort hold, teslwrtanl, luniled G. Sutherland I Ala l larpilabty lead. redeveluri d routine with addda)rtaI viYitor (JOCKS. Up to 20 of [tic roams could be used as title share unils NO mobile homes Of $000,000 to $1,400.000 IOi and sales taxes OF al s taxe.652 S30.000.000 subleci bu l0f. Would pay up 10 $500.ODO 10 relocate residential units. $ 1 268.164 Anlencan Legicai Or relocate m;fte. Continuation Of the Mobile "me use with some minor 75% Of the gross income of 5% of the gross sales Ht. Terra Vista Management impfovemetle to landscaping, beach access, and 56 mobile homes, the properly or a minimum priced all mobile home $25.600 additional public parking. of S10DOX0. sales. Same as above but would reconfigure lemis courts and 75 %01 the gross income. Of 5% Of the gross sates H2. Terra Vista Management add new mobile home sites where the Girl Scour Mouse 66 to 70 mobile homes. the piopedy or a minimum price of all mobile home $400.000(3) and Clly maintenance building are WrenilY located, of 51, 130.000(4). sales. Wes: (I) There would also be revenue Otmenued hpn life re vehag mObt10 W a 91es. (2) Assumes [for MO City wood take a 50% Owr enhip in the project. (3) ides IUI Include heel devMfprnenl oxYM. (4) fKV !real, would request a rear Redil to COV9r the WORESl and AniarfUng boxes 0 0 hnplemenliallon oRerdting Senedvla Pro Forma Lease Ta ove As soon as lease Is e Existing. Long-term signet. lease. 10 months for Lease. jNo lean aronshucGon. IndOtletl . given] 2 years far enllllemem and 16 months far Included. 65 Year Lease. Construction. I Nor Indeded. oriel Ones not apply. Infonnalian. Nor Included Not Included. 50 Year Lease. 2 Years. Nol Included. 55 Year Lease. 2 Years, 3 Morns. Included. 60 Ywr Lease. As soon as lease is Inauaetl Lease. (NO Term signed. given) given) Months, Included, Lease. (NO term olven) 0 n U �J City of Newport Beach Proposal Guidelines A. Identification A�A1�,H1qe-k) t X 1. Name of development entity 2. Ownership structure of proposed project (corporation, partnership, etc.) 3. Identification of Developer's team including engineer, architect, builder etc. 4. 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 firm's role in the development, the primary lender, financial partners and consulting team. 7. Describe your familiarity with tidelands requirements B. Project Description 1. 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 h; - tc4t,K6-1u7- S. Ficker & Stevens 301 Shipyard Way, Newport Beach, California 92663 949.723.7780 Date July 10, 2000 Copies Sent To: ay0f _ a until Member —0 manager o t`. /..� ❑ Attor ey F Honorable Members of the City Council w r City of Newport Beach City Hall v� 3300 Newport Blvd. p :Yin : 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. 0 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 0 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 Manna 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. K) Provide parking to meet code. L) 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 William P. Ficker LEGEND IDENTIFICATION AREA (SFI PARKING 1. American Legion 7,500 50 2. Not a part of this project 3. Public Y.C. and facilities for slips & offshore moorings 5,400 35 4. Dry storage 5. Float and landing for offshore moorings 6. Recreation and play area 10 7. Scouts - Boy and Girl 5,000 20 8. Tennis Courts -4 Parking Under 8 9. Retail 7,500 25 10. Restaurant 5,000 50 11. Retail 2,500 10 12. Restaurant 6,500 75 13. Retail 7,000 25 14. Water and beach sports 4,500 30 15. Parking -two story 16. Boatslips - 900 LF 15 17. Boatslips - 610 LF 10 18. Shipyard 20 19. Existing slips 10 Reference Total 50,900 SF 393 Note total parking shown = 404 FICKER / STEVENS - CONCEPT PLAN 0 0 0 0 EIGHTEENTH STREET v 1 1 , 0 r i I HEA is N F- W. w M z w w N BALBOA BOULEAW 17 is N F- W. w M z w w N BALBOA BOULEAW O O O O O ------------ A FIFTFFNTH qTRFFT City of 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: ,jT Ac.rttre T- �( PHONE 949 - 6443151 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 16`h 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 t0 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 grogram 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 i• J 0 h7-iTltcA1'4E-AJ !` Girl Scouts. One 15, 2000 .6 Mayor John E. Noyes Newport Beach City Hall P.O. Box 1768 Newport Beach, CA 92658 -8915 Dear Mayor Noyes: Girl Scout Council of Orange County 1620 Adams Avenue Costa Mesa. CA 92626 T714 979 -7900 F714 850 -1299 giriscoits @gscocorg 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. 0No 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 Umea Way Agency d K � o S 3 here Girls 'Grow Strong Hearing Date: Agenda Item: No.: Staff Person: SUPPLEMENTAL 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 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 Manage %W ART CITY OF NEWPORT BEACH ��1 COMMUNITY AND ECONOMIC u s DEVELOPMENT • °'��oa "� PLANNING DEPARTMENT 3300 NEWPORT BOULEVARD NEWPORT BEACH, CA 92658 (714) 644 -3200; FAX (714) 644 -3250 Hearing Date: Agenda Item: No.: Staff Person: SUPPLEMENTAL 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 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 Manage August 18, 2000 Sharon Wood Assistant City Manager 3300 Newport Blvd. Newport Beach, CA 92663 Dear Sharon: The American Legion NEWPORT HARBOR POST 291 215 ]5th 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-enni+sPl. Lahey Commander American Legion Post 291 • cc: Council Member Tod Ridgeway June 15, 2000 Stephen R. Sutherland Sutherland Talla Hospitality 4500 Campus Drive, Suite 500 Newport Beach, CA 92660 Dear Mr. Sutherland: D Girl Scouts. Girl scout Council of Orange County 1620 Adams Avenue Costa Mesa. CA 92626 7714979.7900 F714850 -1299 giriscoutsC gscocarg 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 anal 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 specifics 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 U.IM0 Way Agenc, Where Girls Grow Strong ' O r REGENT INTERNATIOINAL 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, 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 1 : \ It I. < 19 \ 1 ' 1 11 6 P' \ l . 11. 1 P . ! i I I \ . r 9 1 1-)- \ I I .0 N r \ P I 1 1. 1 S . •V I C \ 1: < 11 ' I 1 I ? 1 5 -i .13 9 - P =1 .1 TT: 1.: 161.:121 _ -3 a 0 11 P\\: 11, 12. 212 :13:0 1\TVItN 1. "1 ': phunl��.E� �•li�•�;�I- -�i�n; • I W 10 �/ / / �/ August 15, 2000 Mr. Dennis Lahey Commander American Legion Post 291 215 1511 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 BESDING 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 TaIa 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, Neu 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 artrier 0 0 LJ RUG -22 -2000 16:23 949 224 0223 P.02/02 "RECEI FED ARE G PRINTED:" p C O M M U N I T I E S August 22, 2000 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 proforrna 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, IMMUNITIES ��¢� 'C Richard A. Hall President 20201 S.W. BIRCH STREET. Sun'E 2$0 • NEWPORT BEACH. CALITORNIA 92660 • 949,224.0222 • FAX: 949.224,0223 TOTAL P.02 AUG' -22 -2000 16:45 949 224 0223 99 P.02 coo � Meeting Date: August 22, 2000 Agenda Item No.: 22 Subject: RESPONSE TO REQUEST FOR PROPOSALS FOR FUTUREIUSE DEVELOPMENT OF MARINAPARK. SUPPLEMENTAL PROPOSALS 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 I Street Newport Beach, California 92663 9W (949) 673.5070 11 (949 673 -9555 hftJhyww.ca1eaionpost291.org °�RlC ar' 9 t' �fG70� ., a •• The American Legion NEWPORT HARBOR POST 291 215 15th Street Newport Beach, CA 92663 (949) 673 -5070 HAND DELIVERED February 4, 2000 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 1 e 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. Very truly yours, PAUL N. CURTIS Commander PNC /ms Table of Contents Title i i 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 2 1 / ' 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. 1 1 City Project Goals 1 High Quality Design ' The structures present at 215 East 15"' 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. 1 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. 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. 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. 1 1 Form of Disposition ' 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. ' Post 291 originally operated west of its current facility at 10' 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 II. 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. 1 ' / I Financial Qualifications 1 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 1 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 t 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. 1 Prolect 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 TV, 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. 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. Implementation 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. ' 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. 1 10 Military and Veterans Code 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 15th and 18r" 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 it's 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 1 1 L E A S E ' THIS LEASE, made and entered into this _/O rAL.day ' of Ly p &Z,& , 1975, by and between the CITY OF NEWPORT BEACH, a chartered municipal corporation, hereinafter referred to ' as "Lessor ", and NEWPORT HARBOR POST NO. 2'91 OF THE AMERICAN LEGION, ' a California corporation, hereinafter referred to as "Lessee ": ' E R E I T A L S: A. Lessor holds title to certain harbor frontage and tidelands, together with certain uplands abutting thereon located at 15th Street and West Bay, 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, 1 moorings, Slips, docks ramps, launching facilities, p ' ' ram l 4 es , parking .lot, and dry.boat storage which Lessee presently operates and maintains 1 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 term of the lease for an additional ' twenty -five (25) years. ' C- at is the judgment-of the City Council of the City of 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 juri gent of Lessor that the leasing of the whole of said lano hereinafter described as one parcel is necessary ' for the proper daN�elopmeZ. and use of said lands, water frontage and tidelands for recreational, public, civic, beaches, commerce, navigation and fishery purposes.. is the judgment of :the .City c'au:;eC-0. of the City of �TEiiJF'!L?S "t'Beacll tlSa% thf?. .i.:9 Oi klair ?.tends Z:Q ) :,F2 4:5 t,?, upon thy' conditions in this agr%e:nent specified, is'ivt inconsistent with the trust imposed upon such portion of the lands hereinafter described, which may constitute tidelands, and it is further the judgment of the City Council of the City of Newport Beach that the leasing of said uplands as hereinafter described upon the conditions in this agreement specified, is for a public purpose and does not violate the Constitution 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 willing 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, 1 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, . 31, 1976. The term of this lease will commence on March 15, 975, and expire on.March 15,2000. III. USE Lessee shall use the demised premises, together with the lcli gs, 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 Acquatic Center.. IV. USE AS A COMMUNITY CENTER BY OTHER ORGANIZATIONS When the demised premises and buildings are not in use Iby the Lessee, the premises and buildings shall be available for the use as a community center and recreation instruction facility ' by the City Parks, Beaches 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. 1 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. -3- VII.1" TAXES AND UTILITIES Lessee shall promptly pay for all utility services Y.uynished to it and shall pay before delinquent any general and special taxes or assessments or other governmental charges, if 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 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 n 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 IX. ,,,INSURANCE - HOLD HARMLESS Lessee shall save and keep Lessor, its officers, agents �rtd 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 City, of 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 may be "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, HOP10yees or representatives to'enter.the leased premises to inspect t the same or any part thereof at any time and to attend to or protect the L scores 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 Newport Beach 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, sublea3e 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 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 cox termination of this lease, any additions or.improvements made upon the.demi"a 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 required, 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 leased premises with all,•buildings and improvements, in the same condition.as when received or constructed, reasonable use and wear thereof, and damage by.fire, Act 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 placed upon the leased premises by the Lessee, or anyone holding by, under, or through it, shall remain on the leased premises and C. Remedies Cumulative ..'1 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 exercise of one or more rights, powers, elections or remedies, shall 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 Xt is mutually agreed that if the Lessee shall hold over after the expiration of this lease for any cause, such holding over shall be deemed a tenancy from month to month only, ` /upon the same terms, conditions and provisions of this lease. XVI. 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, - pr at such other address as may be hereafter furnished to the Lessee n writing, and if intended for the Lessee, addressed to its Director t 211'15th Street, Newport Beach, California, 92660 or at such Cher address as may be hereafter furnished to the Lessor in writing; -8- F1 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 finan cial 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 audit.;, by the Lessor, its M 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 �a — Lessee covenants and agrees to 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 (100 %) of the revenues derived from the parking lot, payable monthly. Lessee shall purchase ,a minimum of twenty-six x(2) 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 1 the sum of forty percent (40 %) 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 finanqe 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 (40%) of the gross revenues derived from the new marina slips.. D. Dry Boat Storage Lessee covenants and agrees to pay to Lessor the sum of fity percent (50 %) 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 (508) of the gross revenues ' derived from the new dry boat storage and locker facilities. 1 ' XIX. RENEGOTIATION OF RENTS If either party deems it necessary at the end 1 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, le4atees, 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- way alter the provisions herein 'contained against assignment or subletting or the granting of licenses or concessions. 1 ■ B. Captions sra The captions of paragraphs and subparagraphs of this Lease are 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 �O rvaua: City Attorney CITY OF NEWPORT BEACH a municipal corporation ATTEST: By: Cr . C ty Clerk NEWPORT HARBOR POST NO. 291 OF.'THE AMERICAN LEGION a.California corporation Bye Beginning at a n of the Westerly lineofl5thStreet ,1e northerly assaid 15thr Street tisn 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 90 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 Stati.on 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 9° 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. RESER`fNG for street purposes a strip of land 50 feet in width, lying 25 feet on each side of the following described center line: Beginning at a point in the northerly prolongation of the easterly line of Lot 13, Block 115, as shown on a map of Tract No. 234, recorded in Book 13, pages 36 and 37, Miscellaneous Maps, Records of Orange County, California, said point of begin- ning being 135 feet northerly of the northeasterly corner of said Lot 13; running thence south 800 16' 301"East along6a line parallel to the northerly line of said Block 115, a distance of 203.9 feet to a point which is 146 feet westerly of.the westerly line of 15th Street. ' Beach, California, beingna Township 6 South, portiondofnLote4, Range 10 West, S.B.B. & M., Section 33, a Lot 4, Section 34; & M., and Township 6 South, Range 10 portion of [Jest, S.B.B. certain to wit: filled.tidelands'described as follows, Beginning at a n of the Westerly lineofl5thStreet ,1e northerly assaid 15thr Street tisn 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 90 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 Stati.on 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 9° 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. RESER`fNG for street purposes a strip of land 50 feet in width, lying 25 feet on each side of the following described center line: Beginning at a point in the northerly prolongation of the easterly line of Lot 13, Block 115, as shown on a map of Tract No. 234, recorded in Book 13, pages 36 and 37, Miscellaneous Maps, Records of Orange County, California, said point of begin- ning being 135 feet northerly of the northeasterly corner of said Lot 13; running thence south 800 16' 301"East along6a line parallel to the northerly line of said Block 115, a distance of 203.9 feet to a point which is 146 feet westerly of.the westerly line of 15th Street. I .. 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 Homeowners 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 Report of American Legion Post 291 Tidelands Lease ' (Substantiated by Documents) f Introduction 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 I0th ' 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. ttApril 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 American 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 construction was begun on the present hall. The materials for construction were paid for by the sale of the Legion t 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 E1 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, Vt under agreement with the City of Newport Beach, with Trautwein Brothers of Newport Beach doing the construction and financing which the American 'Z' Legion repaid on the installment plan over a period of ten years. 1 , Phase 2, construction of toilet facilities, paving of the parking lot and 1 the addition of more slips was executed by The American Legion. July 1968: The American Legion made final payment to Trautwein Brothers 1 and started paying, to the City of Newport Beach, 10"/0 of the gross revenue from the marina docks as per agreement. 1 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 1 Those Who Fought For Freedom ". 1973: The Lawn Bowling green. on City Fee Property will be vacated. The 1 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 1 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 1 of Special Note 1. The American Legion has been wholly responsible, financially and physi- cally, 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 60% of the leased 1 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. ) 1 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 1 and a number of inland cities - -- approximating a 50%, controlled public use. (Refer to pages 7, Fa,,,._� 1 3. Use of subject Tidelands is in keeping with the density trend on the penin- sula. 1 4. The American Legion pays to the County of Orange all unsecured property taxes ($6, 36 5. 41 in 1972), to the City of Newport Beach 109/o of the gross revenue from the docks ($3, 678. 70 in 1972), all repairs, maintenance, in- 1 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., 1 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. 1 6. Development of tidelands as executed by The American Legion is what Tideland leases are all about -- no expense to the City or State. 1 The State of California has spent billions of dollars constructing harbors and marinas and then leased them to private operators, e. g. Dana Point. 1 1 1 1 1 1 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 a I yi 1 �. 7•..a .a..l: EITY air EUSTA ZEPa CALIFORNIA 92626 P.O. BOX 1200 FROM THE OFFICE OF THE CITY CLERK Januar-i 22, 1908 1 ' Honorable City Council CITY 0'r' N ri-ORT B-,ACH Newport Beach, California ' Dear 13adam and Gentlemen: was City Clerk of the City of No:mort Brach at the time the ' lease to Newport Harbor Post ;'2.91 o£ the American Legion, covering the tidelands Property at 15th and Bay Streets, was extended. ' ":s 1 recall, it was the desire of the City Council at that time to extend the previous lease in such a manlier that the Legion would have a permanent location for a Legion and Civic Hall 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. 1 Yours very truly, C. K. Priest 1 1 1 1 1 /6 !f JOHN J. SA11.011S 215 NEST MALI[ AVENUE EL SEGUNUG, CALIFORNIA i /t'�') c•. \'i .'/n.d.., Ct/Vr..L/Ll/ .�: /i' '.,ICU:),' /L. =/ /ft.e:. V(', "[(.v L.'i, f!lf�l. i,/t' ,�.': " "fu.'Ci. J✓,. J,) /; // iiCCU.i, i•i :. (. /.l /:f .i, /i ,.. ,f..� / "- A :: R.' .(i i�.' /l.% �i( .L (�' i.J,.: :. fJ /! /1l'!�. v ��/ ;'<L •:/rl.: r %f .i; f1.0 6:0 'inU. a[,ii.Lib/ /. f;lit o/. /•,' /;.o- /W [C' /fi: . i.Ucu Ulr ;>,4JV4.A.^:.' J �L@.l :ILT/d L),�[q.: a;, /.L: ,Y.JNE':� '(lC .:.2:7 (l.( /u.l+: LIL •. r . , 0". ..i2 / @[ i lci!! 0., �l�lr ")[o;,'(.� ut'..c1t to c�,� <• /n[ .'Jtt.a Z/hc� t;,} /cu;u;',�,•:�-.. ,. • �,fU,x�. J (Retyped for easier reading) ' Honorable City Council City of Newport Beach ' Newport Beach, California January 31, 1968 ' 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. '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 'Newport Beach to extend this lease as requested by your local post. ' Yours very truly, John J. Sailors iS ©ELL. 11!- ,- Prietor / Lfn aA9 ritJi'/.u'- •Y%ir3 "EYV+uEwRYTHING FOR THE PLASTERER!" 3104 WCC, Nr` T U�Vo NEWPORT BEACH, C.ALiFORNIA October 12, 1967 City Council Newport heath, California !;e-ar Madam and Gentleman; T cite undersigned who was Mayor of the City of Newport Beach .no signer of the last lease to the Newport Harbor Post #291, of the American Legion on the tiurlands property located at 15th and Bay Streets, would like to make the following statement. This :ease was passed; extending; the previous lease to the Tet;;on carrying out cornmitttne.nts of the City of Newport Beach; that this property was 'being lrased to the Legion for a permanent .oe attun for a Legion and Civic: hall. would like to see the City CeeUncil extend this lease per the requ,,.1t of the mernbers of the Newport SIarhor Post #291 of the Americas. Legion. Yours truly, Isbell LI:If / ' Sanuary 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 II and for the use of all future veterans of all wars. ' Ithink the present City Council should extend this lease because it would be carrying out a moral obligation of the pre- vious City Councils 1 Yours truly, O, Z. Robertson ,� / -------------- YES YOUTH EMPLOYMENT SERVICE OF THE HARBOR AREA • 642 -0474 LOCATED IN THE BOYS CLUB • 594 CENTER STREET. COSTA MESA, CALIFORNIA American Legion Hall 215 15th Street Newoort Beach, California 92660 Dear Sirs: March 11 1973 The Board of Directors of the Youth Employment Service are very grateful for your oartieipation 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 h- n1vful. Our volunteer chef, Mr. Lew Yantorn of the Boys Club enjoyed the conveniences in your kitchen. ' Y.E.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. Very sincerely, ��:,:��auid✓�. inn- -� Mrs. Edward H. Kelly Recording Secretary "Help Youth Help Themselves" V V 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 tr'_embers of the Newport Harbor lawn Bowling Club extend to the Officers, and through them to the T7iembers 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 Yembers 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 Meeting, and a copy be forwarded to the American legion Post No. 291, Newport Beach, California. Yours very truly, 1. J. yn Seer ary i Ja First American Title Insurance & Trust Company 421 NORTH. MAIN STREET SANTA ANA,CAIIFORN.IA • KIMBERLY 7-7371 1 ROY V. SH.AFER Senior Vice Preeidew and .Chic) Co.,Mel 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 r over 48 years. Roy V. hater Senior Vice President and Chief Counsel RVS -amm 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 r over 48 years. Roy V. hater Senior Vice President and Chief Counsel RVS -amm S t. F.. ..s ..r 4 First American Title Insurance & Trust Corr)u.my 421 NORTH MAIN STREET SANTA ANA, CALIFORNIA 547.6092 TraT1'ORT iLt:i'm.i FOST DU. 291 OF TrTr A14KRICAid LEGION A^? W3RY L'STUS 610 TJu:I.T Av i;Vz' ITLI- TORT B_'.CFI CALIFOR7I11 9x660 Your No. Our Order No.. OR 105 �1iL l} The following is a report of the title to the lend described iri your application for a Policy of Title Insurance end is made ' without liability and without obligation to issue such policy. In addition to any exceptions shown herein, and not cleared, the policy, if issued, will contain conditions and stipulations and also exceptions from its coverage as may be embodied by the particufar form of policy issued. '•Dated as of '.'-Arch 19, )048 at 7:30 a.m. . 1 ... •r7 , t�e ocrlcl:x Ed Brouillard n VESTEE: CITY OF NE1,TFOR'l' B _10E, a Municipal Corpora"cion. l; ':; 2tlB iY1 Sts' fnr the uses and parpoSSG and uron the express con!5 it tons. as -provided "iri, "An lct Granting certain tidelands and sub:rergee lands of the r` 'State bf'Cal'ifornla'to the City'of Ne -,00rt Beach, unon certain trusts end conditions," approved May 25a 1019 as attended by "tin Act relat n;g to the Granting of FrancMses upon, and 1-aces of', cer�ain tidelands heretofore - ^' granted to the City of Ne*.rrort Beach 'Ly the State of C•_.1 .fornia, " apnro•!ed Yl ay 29). 19' ra the rights, reaerv_:d tnerain to the people of t;ie State of C�.lifornia, and the tr ists for the uses and g.i:xases an,-1 upon the ex_cress conditions as:umvidPd in "An Act ' _ '. �r =ntin? certain tair. tidelar.�.s az r.'. sucTer� cd lands.of the State of California to 't'-:e City of Ne:roort Beac:.I t_ n' certain trusts and conditions," approved !.pri1.5, 1927 as amended by An Act relating to the; granting, of franchises upon, end lea es of certain tid.ela`:ds heretofore .?:(rented to the .City o; T ?e: port Beach by the State of Ca1`_for, i_.;" pproved �tsy; 29) `1920.. axid ti tE rights reserved thereinto .the peop).e of the Stag of .... .. . . .. :J•. 'Said Trusts affect t;Zat rr,,rton of said Lind thereof c,;zica lies SbrtTierly';`':• - of the:Northerly line of Lot !; of Section 33, ;btn;aip c Sou +.a, Rtr•ce 10 West) S. B. B.1 9i Id. ace_ording to Government Survey. ' (c::nt-Muc-d) 1 1' DESCRIEVION All that certain Enna situated in the State of California, County of Orange, City of liewport Beach, described as follows: Q?ycel ot•'land' situated in'the., ;CityoiNewport Beach Clifornia;; b e. portion of Lot 4, Section 33, Township 6 °South;' ' Range 16 West, S.: B.` P.i' & M., e. portion of Lot 4, Section 34, Township 6 South, Range 10 West, S.' B. B. & M., and certain filled tidelands described as follows: Beginning at a point in. the Northerly prolongation of the Westerly line of 15th Street, as said 15th Street is laid out and sho,,m upon a crap of Tract No. 234•, recorded in book 3.3, paged 36 and 371 Miscellaneous Maps records of Orange County,.C.lifornia, said point of beginning being 160 feet North- erly from the IvTortheasterly corner of Lot 4, Block 115 of•said Tract No. 234; running thence .North 9° 43' 3C" East along the Northerly prolongation of the 1•;esterly line of said 15th Street, a dis�ance of 109.79 feet to an- 4 n 4'n- 7T,.4 +- AC +o +-� A..l ti nn No ". 118 and station 1191 as said bulkhead line is sho*�m upon a m:.p entitled "Harbor Lines - Newport Bay, Newport Heroor, California:," -pproved K y 21 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 3!+;?,9,7cet �cr�YY iii£ersection with the Northerly prolongation of the :'masterly line of Lot 131 Block 115 of said.Tract No. 234; thence South 9° 43' 33" West along the said Northerly prolongation of the Easterly line of Lot 131 a distance of 249.79 feet to. an intersection with a line 20 feet Northerly of and parallel with the .Northerly lire of said Block 115; thence South 80 °.16' 30" East along the Said line 20 feet Northerly of and parallel with the Northerly line of .. Block 1151 a distance of 203.9 feet; thence North 9° 43' 30" ?ast, a dis- tance of 140 feet; thence South 80° 16' 30" cast, a distance of 146 feet to the point of beginning. EB :vld Plats enclosed The information herein set forth is supplemental to Prelimi -nary Report No. OR 105744 and is made a part thereof. According to the public records there have been no deeds conveying the property describtrl in this report recorded within a period o: s x months prior re as e o this report except as follows: None — 1 J , 1 Page 2 Country Inn & Suites 325 Bristol fStreet, Costa Mesa, California 92626 714.549.0300 TOLL. FREE RESERVATIONS 800.322.9992 405 Fnerway exit Brig,d > „ulh, then I unie in the 'unur el miaiel anal R'bWL -a Ir,..way exit Batwr, gu right, iuru lalt on Bristol. (Nu exit el( Bristu1 on till, 55). HOTEL FENFURES & SERVW S 300 Deluxe Rooms & Suites Non - Smoking Rooms /'�livo Line Teleplumes High -Speed Internet Acces, / Oversized Writing Desk W- Gigcralnrs / WeL Bar /'Whirlpool Bathe 'Micro Kitchens with Microwave / In -Room Coffee Hair Dryers / mining Boards with iron Award Winning Restaurant and Gardens Meeting Rooms up to 2(X1 Full Service Beauty Salon Two Outdoor Heated Iriools / Spas / Fitness Studio Complimentary Breah(ast ­ i Morning Newspaper Complimentary Beverage"/ Freah Fruit / Homehalred Cookies Pay -Der -View Movies / HBO, ESPN, CNN, Disney Channel I. b .. hJ„ 61, 6 ., -. ' Country Inns & Suites • Ontario at the MiNs 11 909.481.0703 • Ontario Airport T • Corona West 405 Sonto) Disneyland dst plaza plaza Knolls Knows Berry Farm 55) • Cardiff by the Sea 760.944.0427 e ■ Ontario 909.937-9700 • Comm 909.734.2140 • Orange 714.978.9168 BAKER ST. ■ Yorha Linda 714.921.8688 VWL our weheite at: www.countrysuites.c'om °P j �� N ��stQ�Q v�y�Pg �rlinn 405 Fnerway exit Brig,d > „ulh, then I unie in the 'unur el miaiel anal R'bWL -a Ir,..way exit Batwr, gu right, iuru lalt on Bristol. (Nu exit el( Bristu1 on till, 55). HOTEL FENFURES & SERVW S 300 Deluxe Rooms & Suites Non - Smoking Rooms /'�livo Line Teleplumes High -Speed Internet Acces, / Oversized Writing Desk W- Gigcralnrs / WeL Bar /'Whirlpool Bathe 'Micro Kitchens with Microwave / In -Room Coffee Hair Dryers / mining Boards with iron Award Winning Restaurant and Gardens Meeting Rooms up to 2(X1 Full Service Beauty Salon Two Outdoor Heated Iriools / Spas / Fitness Studio Complimentary Breah(ast ­ i Morning Newspaper Complimentary Beverage"/ Freah Fruit / Homehalred Cookies Pay -Der -View Movies / HBO, ESPN, CNN, Disney Channel I. b .. hJ„ 61, 6 ., -. ' Country Inns & Suites • Ontario at the MiNs 11 909.481.0703 • 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 • Comm 909.734.2140 • Orange 714.978.9168 • Grapevine 805.248.1530 ■ Yorha Linda 714.921.8688 VWL our weheite at: www.countrysuites.c'om COSTA MESA A i Country Inn & Suites.. sy C' 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 the French countryside. The Country Inn & Suites at Newport Beach surrounds its guests with sumptuously upholstered furniture, classic marble fireplaces, fresh floral bouquets, specially selected antiques and splendid worizs of art. LV�ur 300 European- inspired guest rooms and suites are exquisitely appointed with mahogany Queen Anne style furniture: and matching armoire with television, ceiling fan and refrigerator, all surrounded by the beauty of French inspired floral wallpaper. r studio suites add the sensual pleasure of a whirlpool spa, a four - poster hed 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 availahle to all guests. For the more outdoor - minded, Newport's scenic Back Bay jogging and hitting trails are the perfect escape into nature. . f A g7� e cohhlestonc garden courtyard is a perfect spot to unwind amidst lush, fragrant flowers, plants, and the soothing sound and visage of cascading water in our imported the fountain. Enjoy lunch or dinner in our Le Chateau Restaurant, a warm and intimate setting offering a wide variety of continental cuisine, and always, the finest service. n matter what the occasion — husiness meetings, social gatherings or receptions for up to 200 people — our conference facilities and catering professionals are always ready to care for your needs, large or small. PLEASE SEE AYRES GROUP HOTEL BALBOA PENINSULA PROPERTY (FULL MAP) IN FILE 73 MARINAPARK MOBILE HOME PARK 6 ,k AYRES HOTEL GROUP AY R E 5 SINCE 1905 Marina Park Proposed Hotel /Residential Development by the Ayres Group C4 `C,,Xex(e' vc n�Cfaufii nror. �aP aoeiah vxs ,V WA COUNTRY INNS & SrrrES ByAyin Es Alp ;ne Cardiff by the Sea Corona Corono West Costa Meso Diamond Bar Gopevine Ontario Airport Ontario al the Mills Mall Orange Son Clemente Yorba Undo 355 &istol Street Sude F Costa Mesa California 92626 Office: 714. 549, 0300 Facsimile: 714. 850. 0302 awn, +.counlrysuiies.com Ayres Hotel Group http://www.countrysuites.com/ahgroup.html ■ n Bom 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 A 9ES All e management style has made the Avres Hotel Group and its signature "Country Inn & Suites" hotels synonymous with ■ — - -t® 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 inns, 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 11 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 111 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 lrms and Country Suites -- where the best of the Old World and the New Age meet. California Location Map Home Page Hotel Locations 1 of 2 2/4/2000 3:31 PM 1. QUALIFICATIONS Company Name: Ayres Group Company Address: 355 Bristol Street, Suite A Costa Mesa, CA 92626 Current Officers: Donald B. Ayres, Jr. Bruce Ayres Douglas Ayres Donald B. Ayres, III Allyson Ayres Total Employees: 600 Relevant Experien Project Name: Project Description: Location: Construction dates: Project Name: Project Description: Location: Construction Dates: Chairman of the Board President Vice President of Construction Vice President of Operations Secretary /Treasurer ce Country Suites — Corona West 115 room hotel 1900 Frontage Road, Corona, CA 9172C Start: 2/98 Complete: 2/99 Country Suites at the Mills Mall 139 room hotel 4370 Mills Circle, Ontario, CA 91764 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 Wk l . a i 4 � i� s� lb t_ 4 f - ,:1. 69r t' t 44.;j- *,%_ jW4 �II�I'I�I�IIIIII�IIII �t }'�.',r .1. 0 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. Proiect Manager Douglas Ayres, (714) 540 -6060 ext. 125 5. Name of Operator Ayres Hotel Group — now managing 15 properties 6. Development proiects Hotels: 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 Firm role 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 role 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 (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 Mte 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) 19451lolt Blvd., Ontario, CA 91764 Date began operations: 1/95 • A lab - W-F a. a 40 • 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 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 Plan - Ayres Group • Residential Proforma Combination of • Leased Lots and Fee Lots Marina Park Prepared for Ayres Group By: David K. Landes O'Donnell/Atkins Company 0 • • Marina Park Newport Beach, CA Site PlanConceprlRoben Tuttle) 7/172000 Combination of Leased Land and Fee Land Loa 1 -5 (Wsed land) SfD on 2250 SQ FT lots. 30' x 75' 5 41,480.000 Average S 4.030.66 1 5 20.153 S 241.840 59.867 Ints 7 -11 (Leased Wnd) SFD on 2250 SQ FT Lots. V x 75' 5 Average Projected S 2992.95 S 11.965 S 143.577 Sales Tax to City Lots 6 and I_' (leased land) SFD on 1875 SQ. FT I.ots._25' x 75' 2 Projected Finished Lot Average Lease Total Montly Total Yearly Lease Total Revenue of Newport Beach Description Dimensions No. of Lots Home Value Value Revenue (7 CAP) Lease Revenue .Revenue from Lot Sales 57.614 Loa 1 -5 (Wsed land) SfD on 2250 SQ FT lots. 30' x 75' 5 41,480.000 5690.970 S 4.030.66 1 5 20.153 S 241.840 59.867 Ints 7 -11 (Leased Wnd) SFD on 2250 SQ FT Lots. V x 75' 5 5980.000 S410.220 S 2992.95 S 11.965 S 143.577 57.122 Lots 6 and I_' (leased land) SFD on 1875 SQ. FT I.ots._25' x 75' 2 5800.000 S319.650 S 1.864.63 S 3.729 S 44.751 '56.004 s 13 -23 (fre Owncrshi 3. Lots SFD on 2500 SQ FT Loa. 25' x 100' 11 3609.091 S239.864 52.638:500 57.614 Lots '_4- 30(Fee Ownershi) SFD on 3000 SQ FT Lots, 30'x 100' 7 3735.714 . $323.625 52.265.375 $9.1% Lots 31.33 (Leased [And) SFD on 2250 SQ FT Los, 30'x 75' 3 SI.000.000 $423.450 S 2:470.13 S 7.410 S 88.925 57 ?07 lot 34 Heased Land) Multifamily W 4, 125 55' x 75' 1 S1,600.000 8997,350 S 5.817.88 'S 5.818 S 69:815 57.533 Lots 35 -39 (based [And) SFD on 2250 SQ FT Las. 30' x 75' 5 81.450.000 $671.125 S 3.914.90 S 19.574 S 234.894 S9.736 Irn 40 (Leased land) JSFD on 2625 SQ FT flits. 35'x 75' 1 $1,650.000 $803.425 S 4.686.65 S 4.687 S 56.240 310.582 Totals 40 Assumptions: 1 Lots 13 -23 and 24-M are sold by the City of Newport Beach 2 No School Fee credit for extsiting units 3 No Affordable Housing Component included 4 No relocation money included O'DonnelVAlkins Company 73 ,337 $ 880,040 $ 4,903,875 $ 74,858 Project: Marina Park Acres: Product Type: • SFD on 2250 SQ FT Lots. 30'x 75' AvgSq FE 2500 UnILS: Lots 1 -5 (Leased Land) Absorb I Mo: I Location Newport Beach Tot Sq Ft: 12500. Revenue Gross Revenue Site Plan 7 /17/00 Base 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 I $0 $0 0.00% Average $0 $0 0.00% Subtotal Gross Revenue $1.480,000 57;400.000 100.00`70 Financing Value of Leased Land $690.970 $0 Monthly Lease Payment @ 7CAP 0:07 ($4,03.1) $0 Value of Slruclure $789.030 $1,480,000 Dawn Payment 20% $157.806 $296.000 $138,194 Principal $631.224 $1.184,000 Monthly Principal and Interest 8.50% ($4.854) ($9,040) Tidal Monthly Home Payments ($8,884) ($9,040) ($156) 0 • Project: Marina: Park Acres: Product Type: SFD on 2250 SQ FT Lots, 30'x 75' Avg Sq Ft: 2500 Units: Lots 7 -11 (Lemcd Land) Absorb / Me: Location Newport Beach Tot Sq Ft: 12500 Revenue Cross Revenue Site Plan 7/17100 Base 1 1 $1.100,000 2500 $440.00 51,100,000 22.45% 2 4 $950,008 2$00 $300,66 33,®001060 77.5$% 3 4 5 Subtotal 5 $960,000 2500 $392.00 $4,900,000 100.00% Premium $22,000 $110,000 2.24% $12,250 Location 1 $0 0.51% $0 0.00% Average $0 $116,130 $0 0.00% Subtotal Cross Revenue $980.000 $47A00 $4900.000 IM00% Closing Costs $225,000 $1,125,000 22.96% $2.50 Warranty $31.250 $7350 $36.750 0.75% % Rev Closing 0.38% $12,800 $64,000 1,31% Per DU Discounts $95.00 $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). Land Improvement - Offsites Land Improvement - Onsites Rec /.Amenities I Common Area Subtotal Finished Lot Costs Construction Costs Building Construction (Directs) Indirect Cons[ I General Conditions Soft Costs Contingency Subtotal Construction Costs Other Costs Marketing Interest Expense & Land Carry Finance Property Taxes HOA G &A Subtotal Other Costs Total Costs Builder Profit Land Residual Finished Lot Cost $29.400 $22,000 $110,000 2.24% $12,250 $5,000 $25.000 0.51% $686 $18.000 $90A00 1.84% $116,130 $2,000 $10:000 0.20 %. $196.000.00 $47A00 S235.000 4.80% $90.00 $225,000 $1,125,000 22.96% $2.50 $6,250 $31.250 0.64% $1.50 $3350 $18,750 0.38% $1.00 $1500 $12,500 0.26% $95.00 $237,500 $1.187,500 24.23% $29.400 $147,000 $41.650 $208,250 $12,250 $61,250 $2,744 $13.720 $686 $3,430 $29,400 $147,000 $116,130 $58050 $400,630 $2,003.150 $196.000.00 $980,000 $363,220 $1,816,100 $410,220 3.00% 4.25% 1.25% 0.28% 0.07% 3.00% Per Per DU Per DU Per DU Per Sq Ft Per Sq Ft Per Budget Per Sq Ft • Of Rev • Of Rev • Of Rev Per DU Per DU % Of Rev 11.85% 40.88% % Of Rev 20.00% % Of Rev 37.06% % Rev 41.96% Project: Marina Park Acres: Product Type: • SFD on 1875 SQ FT tots. 25'x 75' Avg Sq FL 2200 Units: tots 6 and 12 (Leased Land) Absorb I bto: I Location. Newport Beach Tot Sq Ft: 2200 Revenue Gross Revenue Site Plan 7/17/00 Base 1 1 $10[x1000 2206. 5454.115 51000060 6240% 2 1 $600.000 2200 $272.73 $600,000 37.50% 3 4 5 Subtotal 2 $800.000 2200 $727.27 51,600,000 100.00% Premium Location 1 $0 $0 0.00% Average. $0 80 0.00% Subtotal Gross Revenue $800,000 $1,600,000 10.0% Closing Costs. Warranty $6,000 $12000 0.75% % Rev Closing $10.550 $21,100 1.32% Per DU Discounts so $0 0.00% Per DU Subtotal Closing Costs $16550 $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 $44000 2.75°9 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 $6400 0.41% Per Budget Contingency $1.00 $2.2110 $4.400 0.28% Per Sq Ft Subtotal Construction Costs $95.0 $209.000 $418,000 26.13% Other Costs Marketing $24,000 $48,00 3.00% % Rev Interest Expense & Land Carry $34.00 $68,00 4.25% % Of Rev .Finance $10.000 $20,00 1.25% % Rev Property Taxes $2.240 $4,480 0.28% Per DU HOA $560 $1,120 0.07% Per DU G &A $24,00 $48,000 3.0% % Rev Subtotal Other Costs $94.800 $789,60 1 1..85% Total Costs $350.80 $701,60 4185% % Rev Builder Profit $160,00.0 $320,00 20.0% % Rev Land Residual '$272.650 $545,30 34.08% % 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 (Fee Ownership) .Absorb /Mo: I Location Newport Beach Tot Sq Ft: 27500 Revenue Gross Revenue Site Plan 7/17100 Base I , 1 1 $700,000 2500 $280.00 $700,000 10.45% 2 10 $600,000 2500 $240.00 $6A00,000 89.55% 3 4 5 Subtotal 11 $609,091 2500 $243.64 $6.700A00 100.00% Premium Location 1 $0 $0 0.00% Average $0 $0 0.00% Subtotal Gross Revenue $609,09.1 $6,700,000 100.00% Closing Costs Warranty $4.568 $50,250 0.75% % Rev Closing $8J64 $89,800 1.34% Per DU Discounts $0 _ $0 0.00% Per 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 - O((sites $5.000 $55.000 0.82% Per DU Land Improvement - Onsites $1 R,000 $198,000 296% Per DU Rec /A menitics / Common Area '$2,000 _ $22.000 0.33% Per DU Subtotal Finished Lot Costs $47,000 $517.000 7.72% Constraetion Costs Building Construction (Dirccts) $60.00 $150.000 51.650.000 24.63% Per Sq Ft Indirect Cons[ / 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% % 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% % Of Rev Subtotal Other Costs $72.177 $793.950 11.85% Total Costs $281.677 $3,098,450 46.25% % Of Rev Builder Profit $121,818.18 .$1,340,000 20.00% %O(Rev Land Residual $192.864 $2,121,500 31.66% % Rev Finished Lot Cost 523064 39.38% I , Project: Marina Park Acres: Product Type: • SFD on 3Wg SQ h7 Lots. 30'x 100' Avg Sq Ft: 2500 Units: Lots 24 -30 (Fee Ownership) Absorb / Mo: I Location Newport Beach Tot Sq Ft: 17500 Revenue Gross Revenue Site Plan 7 /17/00 Base 1 6 $750.000 2500 $300.00 $4,500.000 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% Premium Location I $0 $0 0.00% Average $0 $0 0.00% Subtotal Gross Revenue $735.714 S5,150,000 100.0090 Closing Costs Warranty $5,518 $38.625 0.75% % Of Rev Closing $9,746 S68,225 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 .$5,1700 $35.000 0.68% Per DU Land Improvement - Onsites $18,000 $126.000 2,45% Per DU Rec / Amenities /Common Area $2.700 $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 Sq Ft Indirect Cosst / 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 $2500 $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 Carty $31,268 $218.875 4.25% % 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% % Rev Subtotal Other Costs $87,182 $610.275 11..85% Total Costs 5296.682 $2,076.775 40.33% % Rev Builder Profit $147,142.86 $1.030.000 20.00% % Rev Land Residual $276.625 $1,936.375 37.60% % Rev Finished Lot Cost 5927,625 43.99% • • Projecu Marina Park Acres: Product Type: SFD on 2250 SQ FT Lots, 30'x 75' Avg Set FI: 2500 Units: Lots: 31-33 (Leased land) Absorb /Mo: I Location Newport Reach Tot S9 FI: 7500 Revenue Gross Revenue Site Plan 7 /17/00 Base 1 2 $930.000 2500 $380.00 $1A00.000 63.337E 2 1 $1,100.0110 2500 $440.00 $1,100.000 36.67% 3 4 5 Subtotal 3 $1,000,000 2500 $400.00 $3,000,000 100.00% Premium Location 1 $0 $0 0.00% Average $0 $0 0.00 %. Subtotal Gross Revenue $1,000.000 $3.000.000 100.00% Closing Costs 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 52,938,350 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 - Ohsites $18.000 $54.000 1.80% Per DU Rec I Amenities / Common Area $2.000 $6.000 010% Per DU Subtotal Finished Lot Costs 547,000 $141,000 4.70% Construction Costs Building Construction (Directs) $9000 $225.000 5675,000 22.50% Per Sq Fl Indirect Cons[ / General Conditions $2.50 $6.250 $18,750 0.63% Per Sq F[ Soft Costs $1.50 $3.750 $11,250 0.38% Per Budget Contingency 51.00 $2.500 $7,500 0.25% Per Sq Ft Subtotal Construction Costs $95.00 $237,500 $712,500 2375% Other Costs .Marketing $30.000. $90.000 3.00% % Rev Interest Expense & Land Carry $42,500 $127.500 4.25% % Of Rev Finance $12.500 $37,500 1.25% %.Of 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 51,209,000 40.30% % Rev Builder Profit $200.000.00 $600;000 20.00% % Of Rev Land Residual $376,450 $1,129.350 37.65% % Rev Finished Lot Cost $423.450 42.35% • • Project: Product Type: Marina Park Multifamily Lot 4,125 55'x 75' Acres: Avg $q F4 1100 Units: Lot .34(Leased Land) Absorb I Mo: I Location Newport Beach Tot-Sq FL- 4400 Revenue 0.00% Gross Revcnue Site Plan 7117100 Base I 2 3 4 5 Subtotal $1,600.000 4400 $363.64 .$1,600.000 100.00% $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 f Amenities! Common Area $2.000 $21000 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% PerSq Ft Indirect ConstI General Conditions .$2.50 $2.750 $2.750 0.17% Pcr Sq Ft Soft Costs $1.50 $1.650 $1,650 0.10% Per Budget Contingency '$1.00 $1.100 $1,100 0.07% PerSq Ft Subtotal Construction Costs $55.00 $60.500 $60,500 3.78 %. Othcr Costs Marketing $48.000 $48.000 3.00% % Rev Interest Expense & Land Carry $68.000 $68.000 4.25% % Of Rev Finance $20.000 $20,000 1.25% % 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 5297,100 18.57% % Rev Builder Profit $320,000.00 $320,000 20.00% % Rev Land Residual $950.350 $950,350 59.40% % Rev Finished Lot Cost $997,350 62.33% r1 L-J • Project: Marina Park Acres: Product Type: SFD on 2250 S FP Lots. 30' x 75' Avg.Sq Ft: 2500 Units: huts 35 -39 (Leased Land) Absorb /Mo: I Location Newport Beach Tot Set Ft: 12500 Revenue Construction Costs Building Construction (Directs) Indirect Const / General Conditions Soft Costs Contingency Subtotal Construction Casts Other Costs Marketing Interest Expense& Land Carry Finance Property Taxes HOA G &A Subtotal Other Costs Total Costs Builder Profit Land Residual Finished Lot Cost 5110.00 Gross Revenue Site Plan 7/.17/00 $1.375,000 18.97% Per Sq Ft 5250 Base $31.250 0.43% Per Sq Ft $1.50. $3.750 1 5 $1.450.000 2500 $580.00 $7,250.000 10.0% $2.50 $12.500 il Per Sq Ft $115.00 $287.50 $1,437,50 19.83% 3 $43.50 $217,50 3.00% % Rev 4 $61.625 $308.125 4.25% `b Of Rev 5 $18.125 $90.625 1.25% % Rey Subtotal 5 $1.450.000 2500 $560.00 $7,250,000 100.00% 51,015 Premium 0.07% Per DU $43.500 $217.50 Location I $0 $0 0.00% $859,125 11.85% Average $0 $0 0.00% 34.92% % Rev Subtotal Gross Revenue $1;450:00 $290.00.0 $7,250,000 100.00% % Rev Closing Costs $624.125 $3,120,625 43.04% % Rev Warranty $10.875 $54,375 0.75% % Rev Closing $18.675 $93,375 1.29% Per DU Discounts 50 $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) $22.00 $110,00 1,52% Per DU Land Improvement - Offsites $5.00 $25,00 0.34% Per DU Land Improvement - Onsites $18.00 $90.00 1.24% Per DU Rec /.Amenities / Common Area $2.00 $10.000 0.14% Per DU Subtotal Finished Lot Costs '$47,000 $235,000 3.24% Construction Costs Building Construction (Directs) Indirect Const / General Conditions Soft Costs Contingency Subtotal Construction Casts Other Costs Marketing Interest Expense& Land Carry Finance Property Taxes HOA G &A Subtotal Other Costs Total Costs Builder Profit Land Residual Finished Lot Cost 5110.00 $275.00 $1.375,000 18.97% Per Sq Ft 5250 $6.250 $31.250 0.43% Per Sq Ft $1.50. $3.750 $18.750 0.26% Per Budget $1.00 $2.50 $12.500 0.17% Per Sq Ft $115.00 $287.50 $1,437,50 19.83% $43.50 $217,50 3.00% % Rev $61.625 $308.125 4.25% `b Of Rev $18.125 $90.625 1.25% % Rey $4.060 $20.300 0:28% Per DU 51,015 $5.075 0.07% Per DU $43.500 $217.50 100% % Rev $171.825 $859,125 11.85% .$506.325 $2.531,625 34.92% % Rev $290.00.0 $1,450,000 20.00% % Rev $624.125 $3,120,625 43.04% % Rev $671,125 46.28% • is • Project: Marina Park Acres: Product Type: SFD on 2625 SO Pi' Lou, 35' x 75' Avg Sq Ft: 2500 Urdu: Lot 40 (Leased Land) Absorb / Mlo: 1 Location Newport Beach Tot Sq FI: 2500 Revenue Gross. Revenue Site flan 7117/00 Base t 1 $1.650.000 1300 $660,00 $1,650,000 100.00% 2 3 4 5 Subtotal 1 $1.650,000 2500 $660.00 $1,650.000 100:00% Prenelum Location I $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 0J5% % Rev Closing $21,175 $21,175 1.28% Per DU Discounts $D SO 0.00% Per DU Subtotal Closing Co.qu 533:550 $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 DI Land Improvement - Offsites $5,000 $5,000 0.30% Per DU Land Improvement - Onsites $181000 $18;000 1.09% Per DU Rec I Amenities I Common Area $2,000 $2,OW 0.12% Per DU Subtotal Finished Lot Costs $47,000 547,000 2.85% Construction Costs Building Construction (Directs) $11000 $275,000 $275.000 16.67% Per Sq Ft Indirect Cons[ / General Conditions $2.50 $6,250 $6,250 0.38% Per Sq Ft Soft Costs $1..50 53.750 .$3,750 0.23% Per Budgel Contingency $1,00 52.50 :$2,500 0.15% Per Sq Ft Subtotal Construction Costs $115.00 $287.500 $287,500 17.42 %: Other Cosh Marketing $49,500 $49,500 3.00!% % Rev Interest Expense & Land Carry $70.125 $70,125 4.25 %. % Of Rev Finance $20.625 $20,625 1.25% % Rev Property Taxes $4.620 $4,620 0.28% Per DU HOA SI.155 $.1,155 0.07% Per DU G & A $49,500 $49.500 3.00% % Of Rev Subtotal Other Costs Total Costs Builder Profit Land.. Residual Finished Lot Cost $195.525 $195,525 11.85% $530.025 $530,025 32.12% % Rev $330.000.00 $330,000 20.00% % Rev $756.425 $756,425 45.84% % Rev $803,425 48.69% Residential Proforma Leased Lots Marina Park Prepared for Ayres Group By: David K. Landes O'Donnell/Atkins Company L -A 0 Marina Park Newport Beach, CA Site Plan Concept (Robert Tuttle) 7117/2000 0 0 Leased Land Lots 1 -5 (Leased Land) SFD on 2250 SQ Fr Lou. V z 75' S 1 $1.480.000 Average 1 5 4.030.66 $ 20.153 5 241.840 $9.862.88 Lots 7.11 (Leased Land) SFD on 2250 SQ Fr Lou. 3Q z 75' S Average .Projected 1 5 2.392.95 $ 11.965 $ 143.577 Sales Tax to City Lots 6 and 12 (leased Land) SFD on 1875 SQ Fr Lou. 25"x 75" 2 Projected Finished Lot Average Lease Total Moody Total Yearly Lease of Newport Beach Description Dimensions No. of Lots Home Valuc Value Revenue (7 CAP) Lease Revenue Revenue (1.25 ) Lots 1 -5 (Leased Land) SFD on 2250 SQ Fr Lou. V z 75' S 1 $1.480.000 1 $690.970 1 5 4.030.66 $ 20.153 5 241.840 $9.862.88 Lots 7.11 (Leased Land) SFD on 2250 SQ Fr Lou. 3Q z 75' S 1 5980.000 $410.220 1 5 2.392.95 $ 11.965 $ 143.577 57,122.25 Lots 6 and 12 (leased Land) SFD on 1875 SQ Fr Lou. 25"x 75" 2 $800.000 $319.650 $ 1.864.63 S 3.729 S 44.751 $6.004.38 Lots 13-23 (Leased Land) SFD on 2500 SQ F'r Lots. 25' z 100' 11 I $609.091 5239.864 S 1.399.20 $ 15.391 $ 184.695 54.615;34 Lots 24 -30 (Leased Land - SFD on 3000. SQ Fr Lou. NY z 100' 7 5735.714 $323.625 $ 1.887.81 S 13.215 S 158.576 55.151.12 Lots 31 -33 (Leased land) SFD on 22505Q Fr Lots. 30' z 75' 3 51.000.000 $423.450 S 2.470.13 $ 7.410 $ 88.925 57.206.88 l.ot 34 (Leased land) Muldfamil Lot 4.125 55' z 75' I $1.600.000 $997.350 $ 5.817.88 $ 5.818 5 69.815 57.533.13 LoLS 35 -39 leased Land) SFD oa 2250 S F'r Lots. 3Q z 75' S $1.450.000 $671.125 $ 3.914:90 S 19.574 $ 234;894 $9.735.94 Lot 40 (Leased Land). JSFD on 2625 SQ Fr Lou. 35"x 75' 1 $1.650.000 $803.425 1 S 4.686.65 1 S 4.687 1 S 56.2401 $10.582.19 Totals 40 $ 101,943 $ 1,223,311 $ 67,814 Assumptions: I All of the residential land is leased from the City of Newport Beach at a 7 CAP 2 No School Fee credit for ezisiting units 3 No Affordable Housing Component included 4 No relocation money included O'DonnelVAtkins Company LAND RESIDUAL 7/17/2000 Project: Marina Park Acres: Product Type: SFD on 2250 SQ FT Lots, 30'x 75' Avg Sq Fl: 2500 nits: Lots 1- 5. (Leased Land) Absorb /Mo: 1 ocallon Newport Beach Tot Sq Ft: 12500 Revenue Gross Revenue Site Plan 7 /17/00 Base I I $1.600.000 2500 $640.00 $1.61)0.000 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% P ect Costs a Finishing Government Fees (Including school fees) $22.000 $110,000 1.4917o Per DU Land Improvement - Offsiles $5.000 $25.000 0.34% Per DU Land Improvement - Onsites $18.000 $90.000 1.22% Per DU Rec / Amenities / Common Area $2.000 $10,000 0.14% Per DU Subtotal Finished "I 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 Costt/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 Sq Ft Subtotal Construction Costs $115.00 $287,500 $1,437,500 19.47% Other Costs Marketing $44,400 $222,000 3.00% % Rev Interest Expense &. Land Carry $62.900 $314,500 4.25% % Rev Finance $18,500 $92,500 1.25% % 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% % Rev Builder Profit $296,000.00 $1,480,000 20.00% % Rev d Residual $643,970 $3,219.850 43.51% % Rev shed Lot Cost $690.970 46.69% M 0 0 U 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 / Alo: 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% 3 $12.500 $95.00 $237.500 $1,187.500 4 $29,400 $147.000 $41,650 5 $12,250 $61,250 Subtotal 5. $980.000 2500 $392.00 $4,900,000 100.00'% Premium $29.400 $147,000 $116.130 Location I $0 $400.630 $0 0.00% Average so $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 s0 $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 Pees (Including school fees) Land Improvement - Offsites Land Improvement - Onsites Rec/ Amenities /Common Area Subtotal Finished Lot Costs Construction Costs Building. Construction (Directs) Indirect Const / General Conditions Soft Costs Contingency Subtotal Construction Costs Other Costs Marketing Interest Expense & Land Carty Finance Property Taxes HOA G &A Subtotal Other Costs Total Costs Builder Profit Land Residual Finished Lot Cost $22.000 $110,000 $5.000 $25.000 $18,000 $90.000 $2,000 $10.000 $47.000 $235.000 $90.00 $225,000 $1.125.000 $2.50 $6.250 $31,250 $1.50 $3.750 $18.750 $1.00 $2.500 $12.500 $95.00 $237.500 $1,187.500 $29,400 $147.000 $41,650 $208.250 $12,250 $61,250 $2,744 $ 13.720 $686 $3.430 $29.400 $147,000 $116.130 $580.650 $400.630 $2.003.150 $196,000.00 $980.000 $363.220 $1.816,100 $410.220 2.24% 0.51% 1.84% 010% 4.80% 22.96% 0.64% 0.38% 0.26% iklP #S1 Per DU Per DU Per DU Per DU Per Sq Ft Per Sq Ft Per Budget Per Sq Ft 3.00% %'Of Rev 4.25% % Rev 125°% % Rev 0.28% Per DU 0.07% Per DU 3.00% % Rev 11.85% 40.88% % Of Rev 20.00% % Rev 37.06% % Rev 41.86% • Project: Marina Park Acres: Product Type: SFD an 1875 SQ FT Lots. 25' x 75' Avg Sq Ft: 2200 Units: Lots 6. and 12 (Leased Land) Absorb /Mm. I Location Newport Beach Tot Sq Ft: 2200 Revenue Gross Revenue Site Plan 7117/00 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 $!,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% %.Of Rev Closing $10.550 $21,100 1.32% Per DU Discounts $0 $0 0.00% Per DU Subtotal Closing Costs $10.550 $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 Ind Improvement - Onsilcs $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 Construciion(Directs) $90:00 $198.000 $396,000 24.75% Per Sq Fl Indirect Contt / General Conditions $2.50 $5,500 $11,000 0.69% Per Sq Ft Son 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 $24,0110 $48.000 3.00% % Rev Interest Expense & Land Carry $34.000 $68.000 4.25% % Of Rev Finance $10.400 $20.000 1.25% % 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% % Rev Subtotal Other Costs $94.800 $189,600 11.85% Total Costs $350.800 $701.600 43.85% % Rev Builder Profit $160.000.00 $320.000 20.00% % Rev Land Residual $272,650 $545,300 34.08% % Rev Finished Lot Cost $319,650 39.96% r • Project: Marina Park Acres: Product Type: SFO on 2500 SQ FT Lou. 25'x 100 Avg.Sq Ft: 2500 Units: Lots 13-23 (Leased land) Absorb / Mo: I Location Newport Beach TotSq Ft: 27500 Revenue Gross Revenue Site Plan 7/17100 Base r 1 LJ I I 5700.000 2500 $280.00 $700.000 10.45% 2 10 $600.000 2500 $240.00 $6.000.000 89.55% 3. 4 5 Subtotal II $609:09.1 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 Costa Warranty $4.568. .$50.250 0.75% % 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% Constructln Costs Building Construction (Directs) $60.00 $150,000 $1.650.000 24:63% Per Sci Ft Indirect Contt/ General Conditions $2.50 .$6.250 $68.750 1.03% Per Sci Ft Soft Costs $1.50 $3.750 $41.250 0.62% Per Budget Contingency $1.00 $2.500 $27,500 0.41% Per Sri Ft Subtotal Construction Costs $65.00 $162,500 $1.787500 .26.68% Other Costs Marketing $18,273 5201.000 3.00% %Of Rev Interest Expense& Land Carty $25.886 $284.750 4.25% % Rev Finance $7.614 $83.750 .1.25% % 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% %.Of Rev Builder Profit $121.8.18.18 $1,340.000 20.00% % Rev Land Residual $192.864 $2,121500 31.66% % Rev Finished Lot Cost $239.864 39.38% r 1 LJ • Project: Marina Park Acres: Product Type: SFD on 3000 SQ FT Lou. 30'x 100' Avg Sq Ft: 2500 Units: Lou 24 -30 (Leased Land) Absorb s No; 1 Location Newport Beach Tot 5q FU 17500 Revenue Gross Revenue Site Plan 7117/00 Base 1 0 $730.000 2100 5300.0o 54.100,000 87.38% 2 I $650.000 1500 $260.00 $650.000 12.62% 3 4 S Subtotal 7 $735.714 2500 $294.29 55.150.(100 100,00`% Prendum Location I s0 $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% % Rev Closing $9,746 $68.225 1.32% Per DU Discounts so s0 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 Sq. Fl Indirect Const / General Conditions $2.50 $6.250 S43.750 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% % Rev Interest Expense & Land Carry $31.268 $218.875 4.25% % Of Rev Finance $9.196 $64,375 1.25% % Rev Property Taxes $2.060 $14,420 0.29% Per DU HOA $515 $3,605 0.07% Per DU G & A $22,071 $154.500 3.00% % Rev Subtotal Other Costs $87.182 $610,275 I1.85% Total Costs $296,692 $2.076.775 40.33% % Of Rev Builder Prolit $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% r1 L_.I • 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: Locution Newport Beach Tot Sq Ft: 7500 Revenue Gross Revenue Site Plan 71I7100 Base 1 2 3 4 5 Subtotal Premium Location Average Subtotal G rnss Revenue lilaelad prism Warranty Closing Discounts Subtotal Closing Costs Total Net Revenue $950.000 2500 $380.00 $1,900.000 63.33% $1.100,000 2500 $440.00 $1,100,000 36.67% 3 $1,000,000 1 $0 $0 $1,000,000 2500 $400.00 $3.000.000 100.00% $0 0.00% $o 0.00% $3,000,000 100.00% Project Costs •: Lot Finishing % Rev Government Fees (Including school fees) $13,050 Land Improvement - Offsites 1.31% Land Improvement - Onsites 1.25% Rec / Amenities / Common Area $0 Subtotal Finished Lot Costs Per DU Construction Costs $20.550 Building Construction (Directs) 2.06% Indirect ConstI General Conditions $30,000 Soft Costs $2,938,350 Contingency $118.500 Sublolal Conslruclion Costs $22,000 Other Costs 2.20% Marketing 40.30% Interest Expense & Land Carty $15,000 Finance Per DU Property Taxes $18,000 HOA 1.80% G &A Subtotal Other Costs $6.000 Total Costs Per DU Builder Protlt $47.000 Land Residual 4.70% Finished Lot Cost $90.00 $225.000 2500 $400.00 $3.000.000 100.00% $0 0.00% $o 0.00% $3,000,000 100.00% $30,000 $7.500 $22,500 0.75% % Rev $127.500 $13,050 $39.150 1.31% Per DU 1.25% $0 $0 0.00% Per DU Per DU $20.550 $61.650 2.06% Per DU $30,000 $979.450 $2,938,350 97.95% $118.500 $355.500 $22,000 $66,000 2.20% Per DU 40.30% $5.000 $15,000 0.50% Per DU $18,000 $54.000 1.80% Per DU $2,000 $6.000 0.20% Per DU $47.000 $141,000 4.70% $90.00 $225.000 $675,000 22.50% Per Sq Ft $2.50 $6.250 $18.750 0.63% Per Sq Ft $1.50 $3.750 $11.250 0.38% Per Budget $1,00 $2.500 $7,500 0.25% Per Sq Ft $95.00 $237,500 $712,500 23.75% $30,000 $90.000 3.00% % Rev $42.500 $127.500 4:25% % Rev $.12,500 $37.500 1.25% % Rev $2.800 $8,400 0:28% Per DU $700 $2.100 0.07% Per DU $30,000 $90.000 3.00% % Rev $118.500 $355.500 11.85% $403,000 $1:209.00 40.30% % Rev $200,000.00 $600:000 20.00% % Rev $376,450 $1.129350 37.65% % Rev $423,450 42.35% • Project: Marina Park Acres: Product T-vpet Multifamily Lot 4.125.55' x 75' Avg Sri Ft: 1100 Units: Lot 34 (Leased Land) Absorb /Mo: I Location Newport Beach Tot Sq Ft: 4400 Revenue Gross Revenue Silc Plan 7117/00 Base Subtotal Other Costs Total Costs Builder Profit Land Residual Finished Lot Cost • $189:600 I 51.600.000 4400 $363.64 $1,600.00 100.00% Rev $320.000.00 2 20.00% % Rev $950,350 $950,350 59.40% % Rev 3 4 5 Subtotal I. $1.600.000 1100 $363.64 $1,6011000 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% %Of Rev Closing $20.550 $20.550 1.28% Per DU Discounts $0 $D 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 .Offsnes $5.000 $5,0DD 0.31% Per DU Land Improvement - Onsites $18.000 $18,000 1.13% Per DU Rec / Amenities / Common Area $2.000 $2.00 0.13% Per DU Subtotal Finished Lot Costs $47.000 $47,0011 194% Construction Costs Building Construction (Directs) $50.00 $55.000 $55,000 3.44% Per Sq R Indirect Contt/ General Conditions $2.50 $2.750 $2.750 0.17% Per Sri Ft Soft Costs $1.50 $1,650 $1.650 0.10% Per Budget Contingency $1.00 $1,100 $1.100 0.07% Per Sri Ft Subtotal Construct Ion Costs $55.00 $60,500 $60.500 3.78% Other Costs Marketing $48.000 $48.000 3.00% %OfRev Interest Expense & land Carry $68.000 $68,000 4.25% % Rev Finance S20.OD0 $20.000 1.25% % Rev Property Taxes $4.480 $4.480 018% Per DU HOA $1.120 $1,120 0.07% Per DU G & A. $48,000 $48.000 3.00% %Of Rev Subtotal Other Costs Total Costs Builder Profit Land Residual Finished Lot Cost • $189:600 $189.600 11.85% $297.100 $297.100 18.57% % Rev $320.000.00 $320,000 20.00% % Rev $950,350 $950,350 59.40% % Rev $997,350 l4ta <i26 • ProjecL• Marina Park Product Type: SFD on 2250 SQ FT Lots, 30' x 75' Units: Lots 35 -39 (Leased land) Location Newport Beach Revenue Gross Revenue Site Plan 7117100 Ames: Avg Sq Ft: Absorb IMe: Tot Sq Ft: 2500 I 12500 Bud I i 51.4310.000 'j. 2300 1766.00 !7.250.000 100.00% 2 3 4 5 Subtotal 5 $1,450.000 i 2500 $580.00 $7,250.000 100.00% Premium S Location 1 so, $0 0.00% Average $0„ $0 0.00'% Subtotal Gross Revenue $1.450.000 $7,250.000 100.00'% Cimino Costa Warranty 4 $10,875 $54,37! 0.794 % 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 5710.000 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 f Amenities / Common Area $2.000 S10.000 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 $18.750 016% Per Budget Contingency $1.00 $2,500 $12;500 0.17% Per Sq Fl Subtotal Coasixuclion Costs $115.00 $287,500 $1.437.500 19.83% Other Costs Marketing - $43.500 $217.500 3.00% % Rev Interest Expense & Land Carry $61.,625 $308.125 4.25% % Of Rev Finance $18.125 $90,625 1.25% % Rev Property Taxes $4,060 $20.300 0.28% Per DU HOA 1 $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% % Rev Builder Profit. $290.00000 $1.450,000 20.00% % Of Rev Land Residual i $624,125. $3.120,625 43.04% % Rev Finished Lot. Cost - $671,125 46.28% r 1 U . Project: Marina Park Acres: .Product Type: SFD on 2625 SQ Fr Lots. 35'x 75' Avg Sq Ft: 2500 Units: Lot 40 (Leased Land) Absorb / Mo: Location Newport Newport Beach Tot Sq Ft: 2500 Revenue Gross Revenue Site Plan 7 /17/00 Base T 3 4 5 Subtotal 31.690,000 2500 $660.00 $1,640,000 100.00% $1,650,000 2500 $660.00 $1,650,000 100.00% Construction Costs Building Construction (Directs) Indirect Const/ General Conditions Soft Costs Contingency Subtotal Construction Costs Other Costs Marketing Interest Expense. & Land Carry Finance Property Taxes HOA G &A Subtotal Other Costs Total Costs Builder Profit Land Residual Finished Lot Cost $110.00 Premium Location 1 $o Average $o Subtotal Gross Revenue $1,650,000 $275,000 $0 $0 $1,650,000 0.00% 9:00% 100.00% $2.50 $6,250 Closing Costs t 0.38% Per Sq Ft $1.50 $3,750 $3,750 Warranty $12.375 $12,975 0.75% % Rev 0.15% 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% $20,625 Total Net Revenue $1,616,450 $1.616.450 97.97% $4,620 $4,620 Project Costs Per DU $1.155 $1,155 0.07% Lot Finishing $49,500 $49,500 3.00% % Rev Government Fees (including school. fees) $22.000 $22,000 1.33% Per DU Land Improvement • Offsites $5,000 $5,000 0.30% Per DU $330.000.00 Land Improvement • Onsites $18.000 $18,000 1.09% Per DU $756,425 Rec./ Amenities / Common Area $2.000 $2,000 0.12% Per DU. 48.69% Subtotal Finished Lot Costs $47,000 $47,000 2.85% Construction Costs Building Construction (Directs) Indirect Const/ General Conditions Soft Costs Contingency Subtotal Construction Costs Other Costs Marketing Interest Expense. & Land Carry Finance Property Taxes HOA G &A Subtotal Other Costs Total Costs Builder Profit Land Residual Finished Lot Cost $110.00 $275,000 $275,000 16.67% Per Sq Ft $2.50 $6,250 $6,250 0.38% Per Sq Ft $1.50 $3,750 $3,750 0.23% Per Budget $1.00 $2.500 $2;500 0.15% Per Sq Ft $115.00 $287,500 $287.500 17.42% $49,500 $49,500 3.00% % Rev $70,125 $70,125 4.25% % Rev $20,625 $20,625 1.25% % Of Rev $4,620 $4,620 0.28% Per DU $1.155 $1,155 0.07% Per DU $49,500 $49,500 3.00% % Rev $195,525 $195,525 11.85% $530,025 $530,025 32.12% % Rev $330.000.00 $330.000 20.00% %Of.Rev $756,425 $756,425 45.84% % Rev $803,425 48.69% U Newport Beady - 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 Tout DEPARTMENTAL PROFIT • • Year 10 Year 2 Year 3 83 83 83 29.689 22.721 24.519 30,2% .30295 30295 98.0% 75% 81% 220.8 180:00. 185.00 215.60 135.00 149.85 Amount ' Percent PAR POR Amount Percent PAR. POR Amount Percent PAR POR S6.5311.602 99.5% S 215.60 $ 220.00 $ 4.089.825 992% S 135.00. $ 180.00 S4.539.706 '992% $ 149.85 $ 185.00 30.000 0.5% 0.99 1.01 33.000 0.8% 1.09 1.45 36.300 02% 120 1.48 $6.561.602 100.0% $ 216.59 $ 221.01 54.122.825 100.0 31. S 136.09 $181.45 $ 4.576.006 100.0% $ 151.05 S 186.48 S 705.116 10.8% S 2128 S 23.75 S 539.630 132% S 17.81 $ 23.75 S 582.800 12.8% $ 1924 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 S 724.616 11.0% $ 23.92. 3 24.41 $ 561.080 13.6% 3 18.52 S 24.69 S 606.395 13.3% S 20.02 S 24.71 S5.836.986 89.0% $ 192.67 $ 196.60 UNDISTRIBUTED OPERATING EXPENSES $3.561,745 86.4% $ 117.57 $ 156.76 Administrative 8 General S 207124 32%. $ 6.86 S 7.00 S 159.D49 3.9% S 525 S' 7.00 Marketing 9.32 166.259 25% $ 5.49 $ 17.81 5.60 127239 3.1% S 420 5.60 Property Operation 8 Maintenance 160.321 2.4% S 529 5.40 122.695 3.0% $ 4.05 5.40 Utility Costs 93.521 1.4% $ 3.09 3.15 71.572 1:7% $ 2.36 3.15 Total 627.924 9.6% $ 20.73 $ 21.15 480.554 11..7% S 15.86 $ 21.15 GROSS OPERATING: PROFIT S 5209.061 79.4% $ 171.94 S 175.45 $ 3.081,191 74.7% S 101.71. $ 135.61 FIXED EXPENSES Management Fees S 196.848 3.0% S 6.50 $ .6.63 S 123.685 3.0% S 4.08 S 5.44 Property Taxes 60.000 0.9% 1.98 2.02 60.000 1.5% 1.98 2.64 Insurance 11.000 02% 0.36 0.37 11.000 0.3% 0.36 0.48 Land Lease 328.080 5.0% 10.83 11.05 206,141 5.0% 6.80 9.07 Total S 595.928 9.1% S 19.67 S 20.07 S 400226 9.7% S 1323 $ 17.64 NET OPERATING INCOME Occupancy Tax Projection Land Lease $ 4.613.133 70.3% $ 15227 S 155.38 S 653.160 328.080 $ 981.240 $ 2.680.365 65.0 %. $ 88.48 $ 117.97 S 408.983 206.141 S 615,124 Page 1 $ 3.969.611 86.7% $ 131.03 3 161.77 S 171.773. 3.8% 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% $ 17.13 $ 21.15 $ 3:450:612 75.4% $ 113.90 $ 140.62 S 137.280 3.% S 4.53 S 5.59 60.000 1.3% 1.98 2.45 11.000. 02% 0.36 0.45 228,800 5.0% 7.55 9.32 S 437.060 9.6% $ 14.43 $ 17.81 $ 3.013 -.531 65.9% $ 99.47 $ 122.81 $ 453.971 -228.8011-- . S 682,771 0 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 Year S Year 83 83 83 25.751 26.357 27.568 30295 30.295 30.295 85% 87% 91% 190.00 190.00. 195.00 161.50 165.30 177.45 Amount ' Percent PAR POR Amount Percent PAR POR Amount Permd PAR POR $ 4.892.643 99.3% 5.161.50 $ 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 0.7% 1.23 1.36 $ 4.929.306 100.0% $ 162.71 $ 191.42 S 5.044.793 100.0% $ 166.52 $ 191.40 $ 5.413248 100A% $ 178.68 $ 196.36 $ 611.580 125% $ 20.19 $ 23.75 S 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.D40 12.9% $ 21.46 $ 24.66 $ 679.051 125% $ 22.41 $ 24.63 $4.293.894 87.1% S 141.74 S 166.75 UNDISTRIBUTED OPERATING EXPENSES $ 4.394.753 87.1% $ 145.07 $ 166.74 Administrative. 8 General S 180.255 3.7% S 5.95 S 7.00 $. 184.497 3.7% S 6.09 $ 7.00 Marketing 1.6% 144.204 2.9% S 4.76 5.60 $ 18.28 147.597 2.9% $ 4.87 5.60 Property Operation 8 Maintenance 139.054 2.8% S 4.59 5.40 142.326 . 2.8% S 4.70 5.40 Utility Costs 81.115 1.6% $ 2.68 3.15 83.023 1.6% $ 2.74 3.15 Total 544.628 11.0% $ 17.98 S 21.15 557.443 11.0% $ 18.40 $. 21.15 GROSS OPERATING PROFIT S3.749.266 76.1% $ 123.76 $ 145.60 $ 3.837.310 76.1% $ 126.66 $ 145.59 FIXED EXPENSES Management Fees $ 147.879 3.0% S 4.88 $ 5.74 $ 151.344 3.0% S 5.00 $ 5.74 Property Taxes 60.000 12% 1.98 2.33 60.000 1.2% 1.98 2.28 Insurance 11.000 0.2% 0.36 0.43 11.000 0.2% 0.36 0.42 Land Lease 246.465 5.0% 8.14 9.57 252.240 5.0% 8.33 9.57 Total $ 465.344 9.4% S 15.36 $ 18.07 $ 474.583 9.4% S 15.67 S 18.01 NET OPERATING INCOME $ 3.283.921 66.6% $ 108.40 $127.53 $ 3.362.727 66.7 %. $ 111.00 $ 127.59 Occupancy Tax Projection $ 489,264 S 500.776 Land Lease S 246.465 $ 252.240 $ 735.730 $ 753.016 Page 2 $ 4.734.187 87.5% S 156.27 S 171.72 $ 192.979 3.6% $ 6.37 S 7.00 154.383 29% $ 5.10 5.60 148.870 2B% $ 4.91 5.40 86.841 1.6% S 2.87 3.15 583.073 10.8% $. 19.25 $ 21.15 $ 4.151.114 7&7% $ 137.02 S150.57 $ 162.397 10% S 5.36 $ 5.89 60.000 1.1% 1.98 2.18 11.000 02% 036 0.40 270.662 5.0% 8.93 9.82 $ 504.060 939/6 $ 16.64 $ 18.28 $ 3.647.055 67.4% $ 120.38. S 13229 S 537.585 $,270.662. .. S 608.247 n u 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 0 0 Year 7 = r Year B 1 1 Year 9 $ 5.085.740 87.8% S 167AT S 176.71 UNDISTRIBUTED OPERATING EXPENSES $.5229.773 88.1% S 172.63 S 181..71 Administrative d General 83 201.462 3.5% $ 8.65 83 $ 201.462 3.4% 83 S 7.00 Marketing S 28.780 2.8% S S32 5.60 28.780 161.169 2.7% S 5.32 29.689 Property Operation 8 Maintenance 155.413 30.295 $ 5.13 5.40 30.295 2.6% $ 5.13 5.40 30.295 90.659 1.6% 95% 3.15 90.658 95 %. $ 2.99 3.15 Total 98% 608.702 10.5% $ 20L9 200.00 608.702 10.3% 205.00 $ 21.15 GROSS OPERATING PROFIT S 4.4771038 210.00 $ 147.78 $ 155.56. $ 4.621.071 190.00 $.152.54 S 160.56 194,75 205.80 Amount ' Percent PAR FOR Amount Percent PAR FOR Amount Percent PAR FOR S5.756.050 99.3% S 190AD $ 200.00 $ 5.899.951 99.4% $ 194.75. $ 205.00 $ 6.234.711 99.4% $ 205.80 $ 210.00 37774 0.7% 125 1.31 38.152 0.6% 1.26 1.33 .38.533 0.6% 1.27 1.30 $ 5.793.824 100.0% $ 19125 $ 201.31 $ 5.938.103 100.0% $ 196.01 $ 206.33 $6273244 100.0% $ 207.07 $ 211.30 S 683.531 11.9% S 2255 S 23.75 $ 683.531 11.6% $ 22.56 E 23.75 $ 705.116 11.3% S 23.28 $ 23.75 24.553 65.0% 0911 0.85 24.799. 65.0% 0.82 0.86 25.D47 65.0% 0.83 0.84 S 708.084 122% S 2337 S 24.60 S 708.330 11.99E S 23.38 $ 24.61 S 730.163 11.6% S 24.10 S 24.59 $ 5.085.740 87.8% S 167AT S 176.71 UNDISTRIBUTED OPERATING EXPENSES $.5229.773 88.1% S 172.63 S 181..71 Administrative d General S 201.462 3.5% $ 8.65 $ 7.00 $ 201.462 3.4% S. 6.65 S 7.00 Marketing S 161.169 2.8% S S32 5.60 S 161.169 2.7% S 5.32 5.60 Property Operation 8 Maintenance 155.413 2.7% $ 5.13 5.40 1.55.413 2.6% $ 5.13 5.40 Utility Costs 90.659 1.6% S 298 3.15 90.658 1.5% $ 2.99 3.15 Total 608.702 10.5% $ 20L9 S 21.15 608.702 10.3% S 20.09 $ 21.15 GROSS OPERATING PROFIT S 4.4771038 77:3% $ 147.78 $ 155.56. $ 4.621.071 77.8% $.152.54 S 160.56 FIXED EXPENSES Management Fees S 173.815 3.0% $ 5.74 S 6.D4 S 178.143 3.0% S 5.88 S 6.19 Property Taxes 60.000 1.0% 198 2.06 60.000 1.0% 1.98 2.08 Insurance 11.0D0 02% 036 0.38 11.000 02% 0.36 0.38 Land Lease 289.691 5.0% 955 10.07 296.905 5.0% 9.80 10.32 Total 'S 534.506 92% $ 17.64 S 18.57 $ 546.D48 92% S 18.02 S 18.97 NET OPERATING INCOME $ 3.942.532 68.0% $ 130.14 $ 136.99 $ 4.075.023 68.6% $ 134.51 $ 141.59 Occupancy Tax Projection S 57S.605 S S89.995 Land Lease 289.691 296.905 S 865,296 $ 886,900. Page 3 $ 5.543.081 88.4% S 182.97 S 186.70 $ 207.824 3.3% S 6.86 $ 7.00 166.259 2.7% S 5.49 5.60 160.321. 2.6% S 5.29 5.40 93.521 1.5% S 3.09 3.15 627.924 10.0% $ 20.73 S. 21.15 $4.915.157 78.4% S 162.24 S 165.55 $ 188.197 3.0% S 6.21 $ 6.34 60.000 1.0% 1.98 2.02 11.000 02% 0.36 0.37 313.662 5.0 %. 10.35 10.56 S 572.860 9.1 %. $ 18.91 S 19.30 $ 4.342.297 69.2% $ 143.33 '$ 146.26 S 623.471 ._313.662 Page 4 0 Newport. Beach - Balboa Island Income Summary Projections year 1 Room Count 63 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 FOR 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% S 12028 $171.84 DEPARTMENTAL EXPENSES Rooms 5 503.654 14.0% $ 16.63 S 23.75 Telecommunications 25297 65.0% 0.84 1.19 Total S 528.951 14.5% S 17.46 5 24.94 DEPARTMENTAL PROFIT $.3.115.072 65.5% $102.82 $146.89 UNDISTRIBUTED OPERATING EXPENSES Administrative 6 General S 148.446 4.1% S 4.90 5 7.00 Marketing 118.756 3.3% S 3.92 5.60 Property Operation 6 Maintenance 114.515 3.1% S 3.78 5.40 Utility Costs 66.800 1.8% S 221 3.15 Total 448.517 123% 5 14.81 S 21.15 GROSS OPERATING. PROFIT 52.666.555 732% S 88.02 $125.74 FIXED EXPENSES Management Fees $ 109.321 3.0% S 3.61 S 5.16 Property Taxes 60AM 1.6% 1.98 2.83 Insurance 11A00 0.3% 0.36 0.52 Land Lease 182201 5.0% 6.01 8.59 Total S 362.522 9.9% $ 11.97 5 17.09 NET OPERATING INCOME $2.304.033 632% S 76.05 $ 108.65 Occupancy Tax Projection S 360,511 Land Lease 182201. S 5{2,712 Page 4 0 C Ground Lease 1. Terms of Lease: 80 years 2. Master lessee : Ayres Group (no rent) I 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 • r1 LJ Close 10 days after opening of Escrow — All Cash s RHC C O M M U N I T I E 5 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 • NEWPORT' BEACH, CALIFORNIA 92660 • 949.224.0222 • FAX: 949.2'24.0223 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. Proiect Descriotion 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 fagade 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 anew 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 18'' street to 15t' 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 Marina Park Hotel Plan.- RHC Communities 2 Operating Pro Forma 3 4 5 6 Number of Suites 7 Suites O=pied 8 Suites Available 9 10 Occupancy 11 Average Daily Rate 12 Revenue Per Available Room 13 14 15 REVENUE 16 Suites 17 Telephone 18 Total 19 20 DEPARTMENTALEXPENSES 21 Suites 22 Telephone 23 Total 24 25 DEPARTMENTAL PROFIT 26 27 OPERATING EXPENSES 28 Administrative & General 29 Marketing 30 Operation & Maintenance 31 Utility Costs 32 Total 33 34 GROSS OPERATING PROFIT 35 36 FIXED EXPENSES 37 .Management 38 Property Taxes 39 Insurances 40 Annual Land Lease 41 Total 42 43 NET OPERATING INCOME 44 45 DEBT SERVICE 46 47 Transient Occupancy Tax (T.O.T) Projection 48 Land Lease 49 Annual Revenues to City of Newport Beach 50 Annual PAR Income 51 52 53 54 $4,544,227 89.0% $177.86 $162,702.40 100.. $6.40 127,111 100 $5.00 122,027 100 $4.80 71,182 100 $2.80 $483;023 25,550. $19.00 $615,105 25;550. 11.0% $23.23 25,550 25;550 38,500 30,500 36,500 35,500 70.0% 70.0% 70.0% 70.0% $200.00.. $204.00. $208.08 $212.24 $199.00. $202.98. $207.04 $211.18 Amount Percent PAR Amount Peroerd PAR Amount Percent PAR Amount Percent PAR $5,084,450 9915% $199.00 $5,186,139 99.5% $202.98 $5,316,444 99.5% $207.04 $5,395,659 99.5% $211.18 25,422 0.5% $1.00 25,931 0.5% $1.01 28,582 0.5% $1.04 26,978 9:5% $1.06 $5,109,872 100.0% $200.00 $5,212,070 100.0% $20199 $5.343,028 100.0% $208.07 $5422,637 100.0% $212.24 $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 16,524 65.0% $0.65 16,855 65.0% $0.66 17,278 65.0% $1.35 17,536 65.0% $1.37 $565,645 11.0% $22.14 $704;848 78.2% $27.59 $701,186 77.8% $27.99 $691.993 77,5% $27.77 $4,544,227 89.0% $177.86 $162,702.40 3.2% $6.40 127,111 2.5% $5.00 122,027 2.4% $4.80 71,182 1.4% $2.80 $483;023 9.5% $19.00 $4;061;204 79.5% .$158.86 $153,296 3.0% $6.00 45,989 0.9% $1.80 10,220 0.2% $0.40 357,691 7.0% $14.00 $567,196 11.1% $22.20 $3,494,009 884% $136.86 $1.798;439 $508.445.00 357,691 $866,136 $49,879.91 $4;507,222 21.8% $176:41 $202,259 3.9% $7.96 160,770 3.1% .$6.32 155,584 3.0% $6.12 88,164 1.7% $3.47 606,778 11.7% $23.87 $3;900,443 10.1% $152.54. $156,362. 3.0% $6.12 46,909 1.5% $3.06 10;424 0.3% $0.61 364.645. 7.0% $14.28 $578,540 11.8 -A $24.07 $3,321,904 -1.7% $128.47 $1,798,439 $518,613.90 364,845 $883,459 $46,891.22 $4,641,840 22.2% $180.09 $202,025 3.8% $7.91 159,493 3.0% $6.24 164;177 2.9% $6.03 90,380 1.7% $3.54. 608,075 11.4% $23.72 $4,035,786 10.8% $156.37 $160,291 3.0% $6.24 68,459 1.3% $2.70 10,686 0.2% $0.42 374,012 7.0% $14.57 $614,448 11.5% $23.93 $3,421,318 -0.7% $132.44 $1,798,438 $531,844 374,012 $905,656 $48,340.46 $4,730,644 22.5% $184.47 $199,639 3.7% $7.81 64,748. 156,474 2;9% .$6112 10,791 151,078 2.8% $5.91 377,696 86,331 1.6% $3;38 $615,105 $593,522 11.0% $23.23 $4,137.122 11.5% $161.24 $161,870 3.0% $6.34 64,748. 1.2% $2.53 10,791 0.2% $0.42 377,696 7.0% $14.78 $615,105 11..4% $24.07 $3;522,016 0.1% $137.16 $1,798,439 $539,566 377,696 $917,262 $50,064.01 1 of 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 68 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 Texas 93 Insurance 94 Land tease 95 Total 96 97 NET OPERATING INCOME 98 99 DEBT SERVICE 100 101 Transient Occupancy Tax (T.O.T) Projection 102 Annual Land tease 103 Annual Revenues to City of Newport Beach 104 Annual PAR Income 105 106 107 108 $1,798,439 $549,251 384,476 $933,727 $50,572.88' $1,798,439 $537.585 270,662 $808,247 $52,542.13 $1,798,439 $571,44.0.71 400,008 $971,449 $53,785.27 $1,798,439 $682.889.94 408,009 $1,090,899 .$55,682.11 2 of 100 100. 100 100 25,550 25.550 25,550 25.550 36,500.. 36.500 36,500 36,600 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 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% $22676 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% $28:87 $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% $192.03 $5,024,478 23.1% $195.77 $5,149,652 23.4% $201.08 $203,223 3.7% $7.95 $201,685 3.0% $7.89 $200,004 3.5% $7.77 $198,176 3.4% $7.71 159,283 2.9% $6.23 102,468 2.9% $6.36 160,003 2.8% $6.22 157,375 2.7% $6,12. 153,790 2.8 %. $6.02 155,865 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°A $168.73 $4.418,751 12.5% $172.23 $4,555,125 13.2% $177.95 $184;775 3.0% $6.45 $168,071 3.0 %. S6.58 $171.432 3.0% $6.66 $174.861 3.0% $6.80 65,910 1.2% $2.58 61,626 11% $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 01% $0.44 11;657 0.2% $0.45 384,476 7.0% $15.05 392.165 7.0% $15.35 400;008 7.0% $15.55 408,000 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 $549,251 384,476 $933,727 $50,572.88' $1,798,439 $537.585 270,662 $808,247 $52,542.13 $1,798,439 $571,44.0.71 400,008 $971,449 $53,785.27 $1,798,439 $682.889.94 408,009 $1,090,899 .$55,682.11 2 of 109 110 111 112 113 114 115 116 117 118 119 120 121 122 123 124 125 126 127 128 129 130 131 132 133 134 135 136 137 138 139 140 141 142 143 144 145 146 147 148 149 150 151 152 153 154 155 156 157 158 159 160 161 162 Marina Park Hotel Plan - RHC Communities Proforma.Summary Number of Suites 3.3% 100 160,522 2.7% 100 154,577 Suites Occupied $6.06 25,550 1.5% $3.49 25,550 10.1% Suites Available 12,128 36,500 $0.48 416,169 38;500 $16.30 Occupancy 7.0% 70.0% $665,870 11.2% 70.0% $679,188 Average Daly Rate $26.61 $234.33 2.4% $156.88 $239.02 2.4% Revenue Per Available Room $232.69 $237.35 $1,798,439 Amount Percent PAR Amount Percent PAR REVENUE $506,417.46 416,169 Rooms $5,945,269 99.4% $232.93 $6,064,175 99.4% $237.58 Telephone 35,872 0.6% $1.40 38.385 016% $1.43 Total $5,980,941 100.0% $234.32 $6,100,560 100.0% $239.01 DEPARTMENTALEXPENSES Rooms $671,815 11.3% $26.32 $685,252 11.3% $26.85 Telephone 3,864,425 65.0% $1.51 3,941,713 65.0% $1.54 Total $4,536,240 76.3% $27.83 $4,626,965 76.3% $28.39 DEPARTMENTAL PROFIT $1,444,700 23.7% $206.49 $1,473,594 23.7% $210.62 OPERATING EXPENSES Administrative & General Marketing Operation & Maintenance Utility Costs Total GROSS OPERATING PROFIT FIXED EXPENSES Management Property Taxes Insurance Annual Land Lease Total NET OPERATING INCOME DEBT SERVICE Transient Occupancy Tax (T -O.T) Projection Land. Lease Annual Revenues to City of Newport Beach Annual PAR Income $196,194 3.3% $7.69 160,522 2.7% $6.29 154,577 2.6% $6.06 89,179 1.5% $3.49 600,472 10.1% $23.53 $200,118 9.3% $7:.84 163,733 2.7% $641 157,669 2.6% $6.18 90.963 1.5% $3.56 612,482 10.1% $24.00 $844,228 13.8% $182.96 $861,113 13.6% $186..62 $178.358 3.0% $6.99 $181,925 3.0% $713 59,453 1.0% $2.33 60,642 1.0% $2.38 11,891 0.2% $0.47 12,128 02% $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% $180.01 $1,798,439 $1,798,479 $594,526.92 $506,417.46 416,169 424,492 $1,010,696 $1,070,910 $57,259.59 $58,404.78 3 of 1 Marina Park 15M Street Marina Facilities Quantity Cost Per Foot Monthly Gross Slip fee 24 Foot Slips 11 $12.50 3300 $300.00 2 Operating Pro Forma 11 $13.75 $5,293.75 $481.25. 42 foot: Slips 22 $14.50 .$13,398.00 $609;00 Combined average slip fee. 3 $984.25 Monthly Revenues Total 21991.75 4 8 5 6 Number of Boat Slips 44 44 44 44 44 44 44 44 44 44 7 C=pancy 95.0% 95.0% 96.0% 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 $519,664 $530,078 $540,679 $551,493 $562,523 $573,773 $586,249 $596,954 $606,893 $621.070 14 Late Fees .$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 15 Interest Income $380 $387.60 $395.35 $403.26 $411.32 $419.55 $427.94 $436.50 $445.23 $454.14. 16 17 Total Revenues $521,504 $531,934 $542,573 $553,424 $564,493 $575,783 $587,298 $599,044 $611,025 $623,246. 18 19 OPERATING EXPENSES 20 21 Operations$ Maintenance (35%) 182,526 186,177 189,900 193,698 197,572 201,524 205,554 209,665 213,859 218.136 22 Utility Costs (9%) 46,935 47,874 48,832 49,808 50,804 51,820 52,857 53,914 54,992 56,092 23 Management (5%) $26,075.20 $26,596.70 $27,128.64 $27,671.21 $28,224.64 $28,789.13 $29,364.91 $29,952.21 $30,551.25 $31.162.28 24 Replacement Reserves $7,260.00 $7,260.00 $7,260.00 $7,260.00 $7;260.00 $7,260.00 $7,260.00 $7.260.00 $7,260.00 $7,260.00 25 26 Total $262,797 $267,908 $273,121 $278,438'. $283,861 $289,393 $295,036 $300,792 $306,662 $312,650 27 28 NET OPERATING INCOME $258,707 $264,026 $269,452 $274,986. $280,631 $286,389 $292,262 $298,253 $304,363 $310,595 29 30 LAND LEASE PAYMENT TO CITY $1.29,353.52 $132,014.21 $134,727.07 $137,494.20 $140,316.66 $143,195.57 $148,132.06 $149;127.28 $152,182.41 $155,298.64 31 32 DEBT SERVICE FOR REHAB COST $89,438.00 $89,438.00 $89,438.00 $89,438.00 $89,438.00 $89,438.00 $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 $46,054.16 $50,876.62 $53,755.53 $56,692.02 $59687.24 $62,742.37 $65,858.60 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 Boat Slip Details Quantity Cost Per Foot Monthly Gross Slip fee 24 Foot Slips 11 $12.50 3300 $300.00 35 Foot Slips 11 $13.75 $5,293.75 $481.25. 42 foot: Slips 22 $14.50 .$13,398.00 $609;00 Combined average slip fee. $984.25 Monthly Revenues Total 21991.75 1 Of 1 1 Marina Park Parking Proforma Total 2 S Operating Summary 18 3 4 244 Spaces - open 8 am to 10 pm daily 5 Noffm 6 7 Gross Annual Revenues Construction Cost Estimate 8 Expenses 23 9 $10,000 10 Net Operating Income 11 25 12 Base Rent to Developer 13 Percentage Rent to Developer 14 Total 27 15 18 Debt Service $235,593 $597,290 $609.235.80 $621,420.52 $633,848.93 $646,525.90 $659,458.42 $672,645.55 $686,09846 $699,820.43 $713,816.84 $92,888 $94,845:72 $96,742.63 $98;677.49 $100.651.04 $102,864.06 $104;717.34 $106,811.69 $108,947.92 $111,126.88 $504,304 $514,390.08 $524,677.68 $535;171.44 $645,874.87 $556,792.37 $567,928.21 $579,286.78 $590,872:51 $602,689.96 $190954 $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 $254,481.87 $259,489.90 $264,679.70 $269,973.30 $275,372.76 $280,880.22 $425.981 $434,480.27 $ 443 ,18982 $452;033.22 $461,073.89 $470,295.36 $479,701.27 5489,295.30 $499,081.20 $509,062.83 17 Total $190,368 18 20 21 22 Construction Cost Estimate $2,440,000 23 Cost to Construct PerSpam $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 $235,593 $235,593 $235,593 $235,593 $235,593 $235,593 $235,593 $235;593 $235,593 $194,175.36 $198,058.87 $202,020.04 $206,060.45 $210,181.65 $214,385.29 $218,672.99 5223,046,45 $227,507.38 1 Marina Park Mobile Home Park 2 Operating Pro Forma 3 $1,331;084 4 $1,384,860 5 61 6 Number of Mobile Home Spaces 7 O=pancy 8 Combined Average of Space Rents 9 61 10 97.0% 97.0% 11 REVENUE 12 97.0% 13 MHP Space Rent 14 Late Fees 15 Interest Income 16 1818.42108 17 Total Revenues 18 1968.31746 19 $1,387.043 20 OPERATING EXPENSES. 21 $372,546 22 Operations & Maintenance 23 Utility Costs 24 Management 25 Capital Reserves 26 $859,108 27 Total 28 $930,177 29 NETOPERATING INCOME 30 $1,007,105 31 LAND. LEASE PAYMENT TO CITY 32 $804.546.15 33. PARTNERSHIP REVENUES 34 $871,092.82 35 $906,395.53 36 $85,909.77 37 $89,392.88 38 $93,016.72 39 $96,786.98 40 $100,709.51 $1,205,604 $1,229,716 $1,254,310 $1,279,397 $1,304,985 $1,331;084 $1,357,706 $1,384,860 f�4 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 1702.76577 1818.42108 1854.7895 1891.88529 1929.723 1968.31746 $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 $1,488.80 $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 $480.18 $497.92 $507,88 $518.03 $528A0 $538.96 $549.74 $1.287,584 $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 .261.408 286,636 271,969 277,409 282,957 286,616 48,388 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 $81,598.74 $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 $875;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 $906,395.53 $84,220.28 $85,909.77 $87,634.08 $89,392.88 $91,186.86 $93,016.72 $94,883.17 $96,786.98 $98.726.82 $100,709.51 I of AMPCO SYSTEM PARKING Corporate Headquarters 808 South Olive Street Los Angeles, CA 9000143097 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 flowhases 111 as AD retrofits, and without a few. From the pre - construction planning p of assistance from architects„ Ampco System has participated in,we will pro parking design and consultation. Consistent with our past these services to RHC Communities. as part of our monthly management fee. Along this line, we have also developed many valuable working relationships with MIME to become part of our consulting team to local vendors who are more than h a comprehensive that ownership is presented wit e shopping list of ideas from which to choose. Although additional costs may be borne if an outside firm(s) AMPCO SYSTEM PARKWIS 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. Ampco 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 $2,268,288. CONDITIONS Ampco shall pay for all day -to -day operating expenses. RHC Communities shall pay for all property taxes, property insurance, elevator maintenance, and any major facility repair. Final lease contract will be subject to the approval of our Board of Directors. AMPCO SYSTEM PARKfNG ESTIMATE OF MONTHLY INCOME AND ASSOCIATED ASSUMPTIONS MARINA PARK (2003 Dollars) July 2000 Outside Perk., Rsvenue An 43 Fe043 Mar -03 AprA May-0] J..A Ju143 Au943 MP-0e 09-03 Novi yrzJ Tooth, Consolidated Revenues An -07 Febdl Mar-07 Apr -07 May-07 Jun 47 Jul -0i Auy-03 6cp -07 00-07 NOV42 lk"l ToLie ESTIMATE OF MONTHLY INCOME AND ASSOCIATED ASSUMPTIONS MARINA PARK (2003 Dollars) July 20ou ♦...mW Level of 0= .nc E09f EO% 80% 30% Eon W% 80% W% am Boll 801E an Nu , of Rt D, q O . '.d ftr D.V 8D E0 E0 80 80 90 so ED 80 w E0 00 n...i. u..m ]t ]E 11 00 ]t ]0 ]t 00 w 08 ]o 11 ]E1 Nvnbe mMed L ch ]lo zW 5tD ]00 ']10 ]00 Sto 700 WD ]1D 300 310 31ES0 Numkr of Msel. annex 140D 1.600 Moo 16W 14W 16D0 1,600 110D IAO. 16n0 1600 11600 18.em Nvrtner W Pcwrc in VaNCl4 Dmekz.n 1.5 1.5 15 1.5 15 1.5 1.5. 1.1 15 N.mW of Penon. in Vvhkk; Lunch 1.5 1.5 1.5 Is 15 1.5 1.5 1.5 1.5 1.5 1.5 1.5 NvlNler of VCM1N..'lwrN••, zDi 187 307 ]00 207 ]00 207 IN 70D ]O7 IN 207 3438 NvMberWVe1N.* Dinner 700 700 IN IN 700 700 700 700 700 700 IN IN EWO AMPCO SYSTEM PARKING Marina Park LOCATION PROFORMA BUDGET . ;yKC�,�, 1..tN yy'�SCf M' xi� K:f.a➢l )L Sx#�'%wH'�yP't'^^ R i `.ty"C FKn`fip.:iwµ." ��yy/((yy py� Q' e .::. . S`Y.., ::W,N�. ..rt'W & ..� :.:�..,'daAa,r ..$r aF c.nSfo Y.9.9Y�Haj. •N:H:Y�, Y#1. "A�'F rfv qY .., r i 4 ;x« FIRST 12 MONTHS REWENUES.161 a W) OVERNIGMGUEST5 DANOUEEDMKUE EMPLOYEE PARXINC OUTSIpE PARKERS GROSS RECEIPTS TA% 1 $24180 50,080 {1,250 54,880 531L470 2 321,841 S7.B10 51250 34.460 {35,410 3 SaA180 f90W {1,250 512,4W 543810 . 523,000 36.1%X1 $1,250 512.0m 140. `6A. s 524,180 3080 {2500 518,6W 553360 B V" sa'Im SZ.500 S24,OW 351,@0$3 7 SMf80 39.090 SZ50D 537700 A1,980 9 sM400 S80W 52600 S38.DW S658W p W.4W sum 22500 134.1100 957,eW 10 PA. ISO 38980 $1750 {12400 345.910 11 523,400 33,000 ft 250 S4p09 537.450 to 324.180 mm 31.150 140® 539,470 rout 3293.520 39.370 121750 2185.800 359T3W TOTAL REVENUES 538,470 335,410 sMi I I I 540.651 557,380 557,900 {71,960 388,$30$3 357,@00 545910 537.150 SJ3.470 SS7;2W EXPENSES: DIRECT EXPENSE. WAGES VACATION ACCRUAL SICK LEAVE ACCRUAL 57300 $142 53,300 5142 53,300 {142 $3,300 5142 57.300 S14L {3, 300 5142 $7.300 $t42 53,300 SH2 S3.3W bI42 53,5W 3142 57,3W 5142 53 }W PQ TOTAL D IVICT l m OR WORHERS COMP PAYROLL TAX 33492 {340 5387 ]3442 {340 $367 P.442 334D $367 33,442 {340 5367 $3.442 {340 5387 33.442 5340 $387 f3t4 5340 {581 ",442 5340 5367 p,M2 5340 E387 f3.442 5340 5351 53.442 5340 f561 53.442 5319 1367 4$41� TOTAL IAaOR HEALTHA WELFARE PENSION 54, Ia9 .3600 54,348 S00o 30.140 3600 54.149 5800 34.749 SBW 34,148 S8W E4, 148 S6OD 5414$3 3800 54148 5600 HfN MW 34,14@ 36W 11,140 IUD 57,7W UNIFORMSbIAUNORV DAMAGE CE .PLED DAMAGE CLAIMS SI50 $500 5150 SS00 5150 5500 $ISO {5W $150 {SW $150 5500 S150 SSW 3150 5500 $1501 55W S150 5500 S1W 7500 SPA 3530 $1,600 Se9W LIC 3P5RMITS REP. b -..NT UTLITIFS SIGNS. OFFICE IT PRIM IN FORAIS.3 PRBJTIHC EQUIPMENT AMIXiT?ATI 550 $460 E1,SW 5100 $50 {1W E100 $50 5450 $1.500 310 {50 3100 3700. 550 MS3,SDD $50 3450 57.500 510 $50 31m 510 $50 545u 31,500 310 550 5100 510 S50 5450 31.500 $100 550 Sim {100 550 3450 SIAM {1W 150 Sf00 Sim 550 345$3 5f,5W {1W SIM S1W SiW SBD 3450 S1.5W 9100 550 5100 5tW S50 5450 31,500 Sim 550 S1W {100 550 540$3 SLSW S1W 350 S1W ifW 550 1430 51,505 S 1W 3(O fim SI00 5600 35.1 W 118,00 3170 660 1120 S1,aW CREDIT CARD FEES TOTAL OTHER OIRECT 43.800 53,600 53,BW 53,600 53.60 {3.80 53,60D 53,W0 3300 $3,600 57,sm S43710 TONAL DIRECT EXPENS 57,749 i7, 749 $7,740 57,7491 57,749 17,74$3 17,749 57,74$3 A,74p 1 17,749 57,749 37,749 392688 NETRECEIPTS 530.721 527,661 $38.1511 S30.9011 E4M811 550.151 .384,211 182,151 550,151 13@,161 529,701 334111 5594,$04 MINIMUM RENT 3 15.811 f 15,911 { 15,911 5 15,31113 15,911 S 15911 S 13,811 9 15,911 S 15.811 f 16,011 5 16.911 ! t1911 PERCENTAGE RENT b11,1W 59,917 518.888 515,713 32227b 525,630 539,215 sulsAw 323660 I 516,689 319]43 St1:108 3100,934 5255,078 TOTAL RENT 527,018 1 S24,7241 532,590 1 331.80 536186 341,591 1 35ZIM SWZ91 311.591 f32,599 3261 527018 $123901 AMPCO SYS7IEMPARKMG Manna Park INCOME GROWTH RUES; 2003 2004 2005 2006 2007 V ACATIONACCRUAL Total :GUEST 15 287.920. S 292,436 E. 301;211 S. 710,217 $ 319,554 3 1507.370 VENT E 96720 S 99.210 $ 102,188 S 105.251 S 108;409 'S 511,378 1TIONS S 21.250 S 21,688 S 22,544 f 23:220 3 23,917 3 112.819 ASH S 195600 S 201.674 S 207.724 S 213.956 S 220.375 5 1,039,529 I RECEIPTS S 597290 111 615,209 S 639,685 S 852,675 S 672:255. 3 7.171,094 4G TAX Y S $ S 57,890 HEALTH WELFARE S 7.344. ; S 7,641 $ 7.794 PENSION r; 3 3 g $ UNIFORMS B. LAUNDRY S 1.900 S T836 S REVENUES S 597,290 S 615.209 S 633,665 S 652.876 $ 612.255 $ 3.171,094. WAGES f 39,600 $ 40,392 S 41,200 1 S 42.024 S 42.864 V ACATIONACCRUAL S 1.703 S'. 1,737 S 1,772 5 1.807 S 1;843 SICK LEAVE ACCRUAL S S 3 Is S TOTAL DIRECT LIBOR S 41,305 3 42,129 S 42,971 IS 43,891 S 44,707 WORKERIS COMP S 4;085 S 4.167 S 4.250 15 4.335 S 4.422 PAYROLL TAX S 4.399 S 4,487 S 4.576 S 4.668 5 4,761 SFPAYROLLTAX $ 5 S 5 S TOTALLASOR 6 49,788. S 50,782 S 31,798 S 52.834 S 57,890 HEALTH WELFARE $ 7,200 S 7.344. S 1.491 S 7,641 $ 7.794 PENSION r; S 3 $ $ UNIFORMS B. LAUNDRY S 1.900 S T836 S 1.877 S 1.910 $ 1,946 INSURANCE -PLPD S 6,000 S 8;120 S 5,242 f 6:367 $ 8,495 DAMAGE CLAIMS f S $ S . $ UC S PERMITS $ 600 $ 612 S 624 1 $ 637 5 598 REP.6MAINT E 5,400 S 5.508 S .5,618 S 5;731 S 6.845 UTILITIES f 19.000. S 111,360 S 18,727 3 19,102 S 19,484. TELEPHONE S 1,x00 S 1,224 S 1;248 S. 1.273 $ 1,299 SIGNS $ 600 $ 612 S 624 S. 537 $ 649 OF-ICE SUPPLIES $ 5;200. $ 1,224 S 1;248 S 1.273 S' 1,209 FORMS .8 PRINTING $ 1.200. S 1,224 S 1,248 S 1.273 3 1,299 EOUIPMENT'AMORTIZATIO 8 - S - S - S S - f TOTAL DIRECT EXPENSEI 4 02.98616 94.846 19 96,747 1 S 98.67111 S 100;651 .709 S 270,508 S x91.251 VET RECEIPTS S 504.3041 S 520,383 E 578;922 $ 555997 3. 671,804 MINIMUM RENT PERCENTAGE RENT TOTAL RENT S 100,87/ $ x3026 5 $ 42'_,861 S 190,934 S 24BA87 $ 439,4001$ { 190.931 S 262 457,242 S 190.034 $ 457,50D S 190.93{ $ 482:165 AMPCO SYSTEM PARKING .709 S 270,508 S x91.251 AMPCO SYSTEM PARKING RHC COMMUNITIES Neva B. Scott - Girl Scout House Rehab Newport Beach, CA Number of Square Feet Project. Acquisition 3,944 09 /01 /00 Construction Start Construction Complete 4,970 11/01/00 0210110.1 Line Item Quantity Unit Total Per Number .Description of Work Ln -FUNum .Cost Cost %"F ARCHITECTURAL & ENGINEERING Architectural Plans 1 1,500 1,500 0.38 Permits (City) Request fee waiver 1 0 Q UD Total 4 600 1,500 0.38 SITE IMPROVEMENTS 1 3,400 3,400 0.86 Landscaping 1 2,200 2,200 0.56 Irrigation 1. 300 300 0.08 Pavement Repairs & Replacement 1 1,300 9,300 0.33 Concrete Walks 1 975 975 0.25 Storm Drainage System -Hydro Jet 1 290 290 0.07 Signage 1 1,000 11000 0.25 Wood Fensing Replacement 1 600 600 0.15 Miscellaneous 1 100 10 0M Total 1 .900 6,765 1.72 ROOFS & GUTTERS Re -Roof all buildings 1 4,970 4,970 1.26 Rain Gutters. 1 640 54.4 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 1Q.Q 4.43 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 0,4 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 10 4.Q3 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 gQQ Q.23 Total 1,710 0.43 7117100,11:03 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 Nu be Description of Work MISCELLANEOUS Fire Extinguashers Miscellaneous Total TOTAL HARD CONSTRUCTION COSTS 7/17/00, 11;03 AM /Marina Park GS House Rehab Budget Page 2 of 2 Quantity Unit Total Per Ln- Ft/Num Cost COSt Sa. Ft 4 90 360 0.09 1 100 100 om 460 0.12 30,974 a ORANGE COUNTY Frida °' www:uinMES.CO��oc JUNE 6,2000 I f [or, Angeles Timeo f Model for Developers: Treasure Island's OK by Coastal Commission By SEEMAMEHT47imis STAFF WRITER , The California. Coastal Commission's approval of the Treasure Island project In South Laguna Beach was what some are tailing a textbook case of how to develop the mast, 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 aman, "This is the wave of the future, We're A the =as- 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 we MODEL, Bg MODEL: Laguna Project Continued from B3 working toward a common goal o S( sane development .[and] protection of coastal resoumes:" Other less cooperative. develop. era ought to follow the Athens Groups lead, she added. Commissioners said they sup- ported the =150 - million, five -star resort mad Musing project because of a laundry list of conditions agreed to in advance by Athena Group of Phoenix. Those condl- tions. Include stringent water quality requirements, public access to beaches and cores that have been off-Bmits for decades, and ae- cese for the daaWed. "I hope this becomes the stand- ard" for development, said Com- missioner Shirley. Dettloff, also a Huntington Beach city council- woman. CoastKeeperSpeaks 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 frumps local government, But by Wednesdays meeting, CoamtKeeper was speaking In favor of the project because the devel- oper agreed to major diversion of water runoff and five -year mom. �. Loring program. "Whenever we can mine lo- gether at the table and reach cam• 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, Were against polluting the marine habi- t,V, Mchael Beaman, vice president of the South Laguna Civic Asap, said group members are pleased with the concessions they gar- nered. "Without am appeal. none of the more stringent water quality I=- ditlons] would have been required . , they're the moat Stringent in California. Nor would the amemities have been extended for the pub- HE:' 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 moRtruo- tion in August and finish in two years, The commission's approval marks the end of a four -year saga that Included hot debates at local . meetings, a. costly referendum and, finally, along public heating in Santa Barbara that drew dozens of passionate Orange County resi- dentsbefore 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 tin big, blocks public views and takes up some of Laguna Beach's last . "sacred space." Imman was one of about 40 pm- pie signed up to speak Wednesday at the hearing, widIch didn't begin until g p.m. Dozens of proponents wearing blue and white 'T 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 "'Phis.. , will bringhtgh-qualhy 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 coo- ditione, 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 I of grading. "It was just too late an hour, as 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." '"Phe 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, ,.A Y. , 1 I y r - Marcus &Millichap Real Estate Investment Brokerage Company One Lakeshore Centre 3281 r.. Guest) Road suite 806 OmazW,G91761 July 17, 2000 Tel: 909 605 L806 raa: 909 605 1832 Mr. Richard Hall RHC Communities, LLC 20201 SW Birch Street Suite 250 Newport Beach, CA 12660 Officas t6roa86out ux u,rradswrer Reference: Marina Park Hotel S•te ARort BV4ch. CA Bal oaPeninsula.,New Dear Richard: Thank you for the opportunity to review R1-IC 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 buildings 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 THE ENDETTI COMPANY July 17, 2000 Sharon Z. Wood Assistant City Manager City of Newport Beach 3300 Newport Blvd. Newport Beach, CA 92663 -3884 Res 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: (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. JULY 17 FEB 4 1. Retail Omitted Included 2. Office Omitted Included 3. Restaurant — Elegant (Z) 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 15'h to 18`h 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 (z) Omitted Included 13. Hotel 130 44 14. American Legion (3) Included Included 15. Transient occupancy tax $900,000 Omitted 16. Sales Tax $700,000 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. I look forward to discussing the plan and proposal in more detail with the City. RDB:sI 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 fiurther 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 $62,500,000. 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: Recreational "Tot" lot/tennis 21,000 210' 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 4'h 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. 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 21,000 210' 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 4'h 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. I M�JN a —" ; r. ra� Y �Xr977N� i. �. /ti °F3/ca froM�S t� 9 f� ys= l uN" ,MARINAPARK. Newport Beach, CA The Bendetti Company uNr>� ff Site Plan va 7�� l At WpLUTM H6Lwn'i�. u C Innnnilunnu�l 0. 0000000000000000000000000000000000000000999000000000 0 116�E&r N q 4- SPel-,� w ��G voo,c ��iv Fu►7�A 7v�S/ /7, yea• �M 5 �i Tt�NV� BF�.ewaPPrl� %PRGG � ON h°ACE I_ g-¢ vIvrr5 G ¢ VNrr3 - 1-' ✓Nrr5 f6jo vN/T j 5PA t4rTr #^AS jeere4fawy e a — a i IJ 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 4`h 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 4 I 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. I) 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. 0 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 0 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 4t' 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: Year 1 Year 2 Year 3 Sales Tax $290,625 $302,250 $314,346 (b) Projected Transient Occupancy Tax (see Exhibit "C ") 10 %o 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 `V') SFA $82,800 SFD 94,500 84,456 96,390 86,145 99,282 $222,932 $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 Project Management Soft Cost & Contingency (Item #'s 1, 2, 3, 6 & 7) TOTAL DEVELOPMENT COSTS Repay costs from Residential Sales TOTAL REMAINING DEVELOPMENT COSTS 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" 2.0°/, 3.0% 852,500 250,000 45,000 55,000 500,000 172 PSF 6,020,000 172 PSF 4,179,600 21,212,000 484,500 1,877,500 $ 37,144,052 742,8131.04 1,114,321.56 $ 39,001,255 (10,199,600) $ 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 NO[ 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" 3,082.289 "D" 1,978,049 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 Casts 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 aadjustment. 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. Presentation to appropriate agencies, final plans for processing of the project. (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 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 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 3`a year NOI $47,174,000 Construction Financing $25,901,655 Developer Equity (10% of cost) 2,900,000 $28,801,655 TENANT CONIlIMIITMENTS: 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 tern 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 Lie 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 bavfront views ranging from unobstructed (Space "A, B & F") to partially obstructed (Space "C, D & E "). Space rent increases annually at CPI 'or 2 %. whichever is greater Markel Support: Marinapark mobilehome park, Lido Penninsula Resort �x�ti��T l3 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, s e P 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 ESPACES 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 CURRENTNOI $ 547,572 PROJECTED NOI $ 1,044,480 $1,065,370 51,086,677 Space rent increases annually at CPI 'or 2 %. whichever is greater Markel Support: Marinapark mobilehome park, Lido Penninsula Resort �x�ti��T l3 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 UNIT MIX # of UNITS SIZE # of UNITS SIZE 18 1,350 Costs /Unit: Sales /Unit: Profit/Unit: Total Cost: Total Sales: Total Profit: BEFORE LAND LEASE EXPENSE 7/17/00 Wi6IT 14 2,500 18 14 2,500 1,350 1,350 SALES PRICE PER PLAN 18 $ 460,000 14 $ 675,000 $ 8,280,000 $ 9,450,000 $ 460,000 $ 675,000 COST BREAKDOWN E TOTAL 32 AVERAGE 1,853 $ 554,063 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 $ 4,546,600 $ 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% 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. Market Support: Beacon Bay Community, Newport Coast Properties GROUND LEASE AS GROUND TOTAL PERCENT LEASE /PER LEASE NO. OF SALE OF SALE PARCEL REVENUE UNITS PRICE PRICE PER /MO. PER /MO. SFA 18 $ 460,000 2.50A $ 958 $ 17,250 SFD 14 $ 675,000 2.5% 1,688 23,625 R) $ 2.646 $ 40,875 Annual NOI Year 1 $ 490.500 Annual NOI Year 2 $ 490,500 Annual NOI Year 3 $ 490,500 Market Support: Beacon Bay Community, Newport Coast Properties Occupancy ADR Occupied Rooms Available Rooms REVENUES Rooms Food Beverage Telephone Garage Other Depts Total Revenues OPERATING DEPTS Rooms Food Beverage Telephone Garage Other:Depts Total Operating Expenses OVERHEAD DEPTS Administrative & General Marketing Property Operations Energy Costs Total Overhead Expenses Gross Operating Profit Mgt Fees Fixed Expenses RenULeases Insurance Property Taxes Other Total Fixed Expenses Cash Flow before Debt Service and FF &E Reserve FF& E Reserve Available Cash for Debt Service Type Transient Occupancy Tax Sales Tax (F &B) Property Texas 130 Rate 10.00% 7.75% Mar Pro F rk Hotel Five e Year Forma Summary For The Years 2003 thru 2007 fig: 59.1% 8,303,667 64.0% 9,252,657 60.0% 70.0% 75.0% 75.0% 75.0% $225.00 $250.00 $260.00 $270.40 $281.21 28,470 33,215 35,586 35,588 35,588 47,450 47,450 47,450 47,450 47,450 6,405,750 59.1% 8,303,667 64.0% 9,252,657 654% 9,622,764 65.4% 10,007,674 65.4% 3,000.000 27:7% 3,120,000 24.0% 3,244,800 22.9% 3,374,592 22.9% 3,509,576 22.90/. 750,000 6.9% 780,000 6.0% 811,200 5.7% 943,648 5.7% 877,394 5.7% 427,050 3.9% 518,154 4.0% 577,372 4.1% 600,466 4.1% 624,485 4.1% 0 0.0% 0 0,0% 0 0.0% 0 0.0% 0 0.0% 250,000 2.3% 260,000 2.0% 270,400 1.9% 281,216 1.9% 292,465 1.9% 10.832,800 100.0% `12,981,821 100.0% 14,156,429 100.0% 14,722,6116 100.0% 15,311,594 100.0% 1,921,725 30.0% 1,992,880 24.0% 2,220,638 24.0% 2,309,463 24.0% 2,401,842 24.0% 2,550,000 85.0% 2,496,000 80.0% 2,595,840 80.0% 2,699,674 80.0% 2,807,661 80.0% 450,000 60.0% 405,800 52.0% 421,824 52.0% 438,697 52.0% 456,245 52.0% 213,525 50.0% 207,262 40.0% 230,949 40.0% 240,187 40.0% 249,794 40.0% 0 ERR 0 ERR 0 ERR 0 ERR 0 ERR 175,000 70.0% 182,000 70.0% 189,280 70.0% 196,851 70.0% 2D4,725 70.D% 5,310,250 49.0% 5,281742 40.7% 5,658;530 40.0% 5,884,872 40.0% 6,120,267 40.D% 1,900,000 17.5% 1.957,000 15.1% .2,015,710 14.2% 2,076,181 14.1% 2,138,467 14.0% 1,100,000 10.2% 990,000 7.6% 1,019,700 7.2% 1,050,291 7.1% 1,081,800 7.1% 550,000 5.1% 632,500 4.9% 651,475 4.6% 671,019 4.6% 691,150 4.5% 450,000 4.2% 463,500 3.6% 477,405 9.4% 491,727 33% 506,479 3.3% 4,000,000 38,9% 4,043,000 31.1% 4,164,290 29.4% 4,289,219 29.1% 4,417,895 28.9% 1,522,550 14.1% 3;655,079 28.2% 4,333;609 30.6% 4;548.596 302% 4,773,432 31.2% 324,984 3.0% 389,455 3.0% 424,693 3.0% 441,681 3.0% 459,348 3.0% 0 0.0% 0 0.0% 0 0.0% 0 0.0% 0 0.0% 950,000 1.4% 157,500 1.2% 165,375 1.2% 173,644 1.2% 182,326 1.2% 227,371 2.1% 231,919 1.8% 236,597 1.7% 241,288 1.6% 246,114 1.6% 377,371 3.5% 389,419 3.0% 401,932 2.8% 414,932 2,8% 428,440 2.8% 820,195 7.6% 2,876,206 22.2% 3,506,984 24.8% 3,691,984 251% 9,885,644 25.4% 324,981 3.0% 389,455 9.0% 424,693 3.0% 441,681 3.0% 459,348 3.0% 495,211 4.6% 2,486,752. 19.2% 3,082,291 21.8% 3,250,303 22.1% 3,426,297 22.4% 640.575 290,625 227,371 630,367 302,250 231,919 925,266 314,340 236,557 962,276 1,000,767 326,914 339,990 241,288 246,114 APPROVAL: PROJECT COST PROJECT: Marina Park Hotel- Newport Beach, California DATE:❑ July 12, 2000 REVISION:o EST. CONSTRUCTION START: Jan.2002 NUMBER MODULES: 135 ESTIMATED OPENING DATE: Mar.2003 NUMBER KEYS: 130 NUMBER OF FLOORS: 3 TOTAL SO. FT.: 100000 NO.000CATEGORY BUDGET COST /KEY 1. CONSTRUCTION❑ $14,820,000 $114,000 2. PERMITS, LICENSES, FEESO $100,000 $769 3. DESIGN CONSULTANTSO $750,000 $5,769 4. FINANCINGO $1,000,000 $7,692 5. DEVELOPMENTO $250,000 $1,923 6. KITCHEN /BAR/LAUNDRY EQUIPO $145,000 $1,115 7. OPERATING SUPPLIESO $135,000 $1,038 B. F & B SERVICE WARES /EQUIP❑ $142,000 $1,092 9. LINEN/UNIFORMSO $150,000 $1,154 10. GUEST ROOM FURNISHINGS❑ $1,300,000 $10,000 11. PUBLIC AREA FURNISHINGS❑ $350,000 $2,692 12. COMMUNICATIONS /MIS EQUIPO $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❑ $0 $0 TOTAL COST $20,212,000 $155,477 L--,I\ 'v H 6 I 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 1001 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 modemize 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 $ 182,423 Ammai $ 2,189,074 Combined Private ✓4 Visitor serving Marinas $ 2,476,894 Vessel Mo. Rent Mo. Rest Occupancy Total Length /Feet No. of Slips Per Foot Per Slip Rate Mo. Rent 25' slips 30 15 $ 15.00 $ 450 900/b $ 6,075 35' slips 40 10 $ 16.00 $ 640 900/b $ 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 I $ 2.00 $ 2,310 70% $ 27,720 82' side Tie 92 1 S 2.25 $ 4,658 750/b $ 55,890 86' side Tie 96 1 $ 2.25 $ 4,860 75/0 $ 58,320 $ 182,423 Ammai $ 2,189,074 Combined Private ✓4 Visitor serving Marinas $ 2,476,894 Private Marina Visitor Serving Marina Effective Gross Revenue: Operating Expenses: Repairs and Maintenance Insurance Property Tax Utilities Trash Operation & Management Net Operating Income - Year 1: Net Operating Income - Year 2: Net Operating Income - Year 3: 123,800 18,000 210,000 9,200 14,000 123,845 $ 2,476,894 8 1,978,049 8 2,017,610 82,057,962 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 $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) I: n P 9 P I, 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 EAMO) ( C 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. N 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 completion 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. 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. • 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 0 per annum. 0 • City participates in the one time development profit from the sale of the 0 homes. The development profit is estimated to be $7,523,700. Based • upon a proposed 25 % participation, the City would receive $1,880,925. 0 • Transient Occupancy Tax is projected at $925,266 annually. 0 0 • Sales tax is projected at $314,340 annually I0 • Property Tax is estimated at $236,557 for the hotel and $494,427 from a 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. t F 4� \ dt I ' 1 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. THE EDWARD THOMAS COMPANIES 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 Slatlan third generation hoteliers, formed The Edward Thomas Companies in 1982a 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 famed Beverly Hills Hotel from 1954 until 1986. Thomas and Edward Slatldn 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: (3 10) 859 -0823 CASA El MAR i "I F , lq_-w &- �17 Of Ali lip .1 iW i "I F , lq_-w &- �17 bm- Fkl bm- . !- .� � » ^ \ \ \\ ® + � � � } \* \ \� • ' ®�� M PEN=. w / ©f \ .�. ... . � Z�` \\ I. \ \< I Santa 1®'lanica. };each. Mere, during Hollywood, VOlden E., the reigning Icings and queens of the- silent screen 6uilf their beach {rant estates,privafe sanctuaries that were minutes from Los Angeles, yet thousands of. miles from the city, hustle.md buckle. Stars like Mary Pickford and Douglas F'airl anks, Norma Shearer, Max Sennett, even the mighty Louis B. Mayer'creafed a world of informal luxury' uxury, with every convenience close dk Land.; ,��.. .. a.... } seSxse of relaxed sllegance lives on at Shutters .ggiC&D Beach, the only ocean front luxury ir hotel._ efS4l refe can escape the evening's coolness 6y -si nto an oversf Ni[Y� 1 i r ol r F � f C e b b N{ 'c 1 a.' Y aX.: rE _z s 7 1 t eM��y liy , 4 �4 r a r 7• aq �s F ti l : /&\I ƒ� }t : Io ; / \/ / \ � /. j /&\I ƒ� }t : Io h i s t o r Y 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 Wormington builds today. Larry Riggs - Executive Vice President Jim Warmington - Chairman of the Board rim Hogan - President, C.E.O. re i c 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. architecture 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 Wormington 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. zn P R E L I M I N A R Y 114 m pg� . A BY W A R M I N G T O N HOMES CALIFORNIA H Y dI4 fto �PLAN �TWO � Aik- R M 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 (MOOED - MONTEREY PLAN 2S - SPANISH Z w a ••9*•******••••****••******00000000000000000000000000• WOPOPLAN THREE am Masfn Lo 5� � ------------ - Rlmn� I .°•=, O - � WOPOPLAN THREE am Masfn Lo 5� � u Ream s. WOPOPLAN THREE am Masfn Lo 5� � ....................... ......:........................ S"v4ltA "OOOPOLAN 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 IMODELI - SPANISH COLONIAL PLAN 3M.. MONTEREY PLAN 3RS - SPANISH Z w ---------- ---------- ---------- ------------- i F.Mv, R. urar 11 - -------------- BW. 2 T Wo**'PLAN ONE f i A r4,.[ D SNw a a UVZq Aura (CO4.) e4j4 I z*" (c,4) • Strongly themed exteriors featuring disfinctive • Beautiful stair systems with oak handrails and • Refrigerator space expandable to 42" architectural styles footlights • Recessed telling can lights • Long lasting fire resistant flat or "S" tile concrete roofs • Decorative windows, wrought iron, shutters and balconies of front elevations (per plan) • Elegant eight fool themed entry doors • Dual - glazed French doors • Dualglazed 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 L4�L*& A4w4 • Separate formal dining rooms • Elegant living rooms with oplional woodburning fireplace • Family rooms with raised hearth woodburning fireplace stubbed for gas logs (per plan) • Dramatic, nine or ten foot textured ceilings • Custom styled radius 6ullnose corners on interior walls • Colonist interior doors with detailed casing 04i11iiiiiifta d • 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 • Large cookware storage drawers • Upper cabinet glass doors (some areas) • Optional or second dishwasher or wine captain G.r+ Zd" H"I t SwXas • 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 ptie&n ,a.%.y FuLU et kx ,",O � Aavn+�d E"X" F"44o A l &atv" F 6"* S"w F"-w • Pre -wired for cable television in all • Recirculating hot water system • Exterior wall and ceiling insulation bedrooms and family rooms • Interior laundry service area with tile • Insulated air ducts • Pre -wired for future satellite dish in attic counter, sink and cabinets a White solid vinyl dual- glazed windows • Category 5 wiring • Pre -wired for stereo sound system in living room, family room, and master suite • Ceramic tile 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 • Duol- zone ,gas forced-air heating • Standard air conditioning • 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 • 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 e..410«.00'" • 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 ore not determined by square {outage. All homes are subject to prior sale. All renderings, floor plans and mops are artist's conception and are not intended to be an accurate representation of buildings, Fencing, waiks, driveways or landscaping and are not necessarily to scale, Window locations and sizes as well as spe6lic detailing may vary with different elevations. T4 W Reputation, integrity, innovation, commitment and pride. These are the qualities of the men and women who build homes for the Wormington group. Over the years, the various companies that comprise the Wormington 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 o variety of California families in the most desirable locations. With the Wormington 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 o diverse selection of homes, each capturing the contemporary spirit of active families while also providing traditional styling and precise detailing — of the very best possible prices. As a team of quality- oriented people, the employees of Wormington 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 os,all the very special comforts and amenities that help turn each house into o home. The employees at Wormington Homes California proudly remain steadfast in their commitment toward quality, value and service — to fulfill their customers' dreams and surpass their expectations. 11732 Beswick Place • Tustin, CA 92782 • Fox (714)838 -9481 toucan SHAW TxFORFAM (7*939 -7552 WARNIINGTON HOMES CALIFORNIA. www.worm i ngtonhomes.com LT,h. J.� a ^, TusRn Ranch' � 'z GolkCourie a z – - a Jamboree Rd..' 5 N p M.,. �u �wb 11732 Beswick Place • Tustin, CA 92782 • Fox (714)838 -9481 toucan SHAW TxFORFAM (7*939 -7552 WARNIINGTON HOMES CALIFORNIA. www.worm i ngtonhomes.com City of Newport Beach Marina Park Request for Proposals Additional Information July 17, 2000 Terra Vista Management Marina Park City of Newport Beach Request tier Proposals Additional Information July 17, 2000 Sharon Z. Wood Assistant City Manager City of Newport Beach 3300 Newport Boulevard Newport Beach, California 92663 -3884 Re: Marina Park Dear Ms. 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 Geltand 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 fbr Proposals Additional Information Project Manager: Michael Gelfand (553) 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 197 1, subject to a leasehold. In 1997, the land was purchased out Of a 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 Bay in San Diego, California. The properties were given to the City of San Diego as part of a tidelands grant, and as such, are subject to all of the State of California Tidelands requirements. Terra Vista Management and its affiliates have conscientiously managed these properties within those boundaries for over )0 years. 13. Project Description: { Where applicable, the disc'ussirm that fbi(outs ivi(l r•e ference .41tern(ftire° e174(,4(ternutiv< 2, asdescrihrd below in prgject description). Parcel Sizes: The parcel size of alternative I is 4.27 acres. The parcel size of alternative 2 is 6.21 acres. I 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 existing 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 parkin, and additional beach access. Lowcr walls for bench scatim, could be constructed. • Ovcr 40 new mctered public parking spaces could be created, including 30 stalls for joint use with the American Legion, 4 at Balboa Boulevard and 6 -S at the Balboa and IS "' Strut lot • Enlargement of the existing American Legion bathroom to provide public use on one side and private American Legion use on the other • Relocation ofthe children's play area to the currently unused American Lcoion barbecue area • Swim platform added to the existing swimming area at 18'x' Street • Acccss 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 fit, the addition of 12 mobile home sites on the space currently occupied by the city Marina Park City ol" 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 Tax For the Next 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 parking 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 least:, projected over the next three years would be a total ofapproximatcly $150,000. Cost and Revenue Pro forma: The cost of Alternative 1 is approximately $25,000 to Terra Vista Managenu:nt. Residents of the 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 l would still apply. The additional casts are to pay $170,000 to demolish and construct four tennis courts, S 120.000 for the cost of developing 12 home sites, and .$35,000 for additional conununity 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 1,245,364 and $12,036,640 (before rent credits), respectively, over the 10 years immediately following execution or the lease. The annual lease payment total, guaranteed by Terra Vista Management, would be the greater of 7S%, ofthe property's gross income or $1,000,000, adjusted annually by CPT. 5 Alternative 1 Poouu!les bear I Year 2 }'car 3 Ye:v 4 fear 5 Year 6 Ycar 7 DGSC'RlPHON I'rojo6011 Projection Pr.+jection Projection Projection Projection Projection I Total Income L 299.650 1315,649 1,35,.161 1379 205 1.406.789 1.434.925 1 A63.613 2 1101neOftWel:.gxuse (170.950) (174.369) (177,±7) (IR1,414) (1851142) (188.743) 1192.515 Khw crE.pru;e (99.4 -1i) II fit .43_') (103.461) I .5,1 111): )1 1107.!,401 1109]931 (111,9,9 1'ttallicprnsrs 07,1.39;1 (175.801) (2R 1.3171 f286A431 ('92.081 ' (_9,3x36) , (3o4,:n6 Ycar R n Projection Year 9 Projection Year 10 Proieclion 1,492.896 1.5_22.754 1.553,209 1 ( 196.365) 1 (114.228) 1'ti0 ?95) (116.513) (204.301) 0 18.843) (310.596) (316.808) (3 33,1451 Cilsh Flow Subtotal I.1)2'7?l,.; 1049.848 1:1170,845 1.1191. 62 1.114.107 1.136.389 1.159.117 1.181.301) 1?05.94R 1.230.064 Capitalhnprnvelnrnu 124.0110) 124.480) ('4.970) (_'5.469) 1'5.97,4) (16.498) (27.022) (2 7-56R) 08.120) (286,2) Interest 1) Il 0 0 fl Principal I) 0 0 0 0 Capital Utility 1111pro5emcnt 05'63) 15363) (5,4�6) 15.585) 15.697) 15.311) (5917) (6.045) ((,.166) (6,290) 3 Base Rent toCav 1.000.000 1,020000 1.040,400 1.061,2113 1,083,432 1,104;081 1,126.162 I.148.686 1,171.659 1.195,093 4 Resales %, to City 5,.000 41,840 29.131 22.285 22.731 23,186 23,649 14.131 24,605 '5,097 Total Rent to City 1.1158;001) 1062,840 1,069.531 1.083.493 1;105,163 1,117,167 1.149,811 1,171.808 1,1961264 1.110,190 PnolnOtes: I Year One NIpnthly Rcul:d R:IIeN: %% :11Vr)ronl- :42,3110 Walcrvim $1.801r Tennis View'Fl,t +01). Rates are adjuslcd by C111 each year. assumed to be 2% 1'.x )his pro filmm. 2 13ascd upon historical operations III Marina Park as appropriate and 133ysidc Villaee as !Ippropriate. Adjusted by CPl each year, assumed n+ be 2% for this pro h11'Ma. 3 t 1,000.000 minimmil plus C'PI each )'e:n', assumed n, be 2 ".,, or 75"x, of Total Inconm, . whiche5ct' is greater. 4 5 "u nl'Grc+ S Re %emle deChal l'C. 111 resales 6 Alternative 2 Fuolm'te5 )'car I Year _' )'em- 3 )'ear 4 )'car 5 Year h )'ear 7 fear R Year 9 )'ear 10 DESCRIPI ION ProjeL fioii Projection Projection Projection Projection Projection Projection Projection Projection Projection 1.3 focal Income 1?99.656 1.41)3.649 1.499,042 1.529,023 1.559.603 1,590.793 1,622.611 1.655,063 IRIS. 165 1,721,928 2.4 Home OfficeF.xpouse 1 0.950) (179.439) (I8 12x) (136,689) (190.422) 1194. -'311 (195.115) (2025179) 1'_04,119) (210,242) - 5 Manager Blicnse (99,4431 (104,332) (106.419) (108.547) (110.718) (112,932) 1115.191) (117,495) (1198-15) (121241) row E.xpeuses (271).393) 1243,771) (289,447) (295.235) (301,140) (307,163) (313,366) (319.572) (3 -5964) (332483) Cash Flom Subtotal 1.029.263 1.119.874 1,209.595 1,.233.787 1.259,463 1.283632 1.309305 1.335.491 1.362,201 1,349,445 Capitalln(provemonts 124 -0010 1_)4.4WI) 124.970) (25,469) 1],5,978) (264981 (27.028) (27.568) (- 28.1211) (- _8.,682) Inleresl (33.320) (2 _7,1111)) f20290) (1_',8101 14.6711) Principal (66.320) 172.550) (79,380) ($6.790) (94.950) Capital Utility Intprovelncnf (5,-163) (42.461) (60.344) (61.551) (62,742) (64.038) (65.310) (66.625) (67,959) (69.317) 7 Base Reut to City 1.0011.000 1.052.73' 1.124.281 1,146,767 1.169.702 1.193.096 1216,955 1.241,298 1266.12 -3 1'91.446 Rem Credit front City 0 (99,640) (99;650) f99..670) (99.610) 199.420) 0 1) l) 0 Resales' I. to City 54,000 42.840 33.631 2(5,875 27.413 37.961 28,520 29.091 29,673 30?66 Total Rent to City 1.058.000 995,937 1,059,263 1.073.972 1,097,495 1,121,438 1245.479 1,270,389 1295,796 1,321712 Footnotes: Year One Monllily Rrn1al Rales: Wmerfnnu- $2.300,Waterview $ I.800-Tennis View $1,600, Rates are adjusted by CPI each year. assumed to be 2% Ibr this pro forum 2 Based upon historical operuious ol'hlarino Park as appropriate and Bayside Villagc as approprimo.. Adjusted by CP1 each year. assumed to lie 2'Sk for this Pro linatta 3 )'ear 2 foruaid tt'lennC inCreasc lions 12 new homesitcs rnt portion of currenl lenris court land ai $1.000 per space mouth, adjusted by 21.1, CPI each year. Oue space «rued per month of year 2 4 Variable Ilome 011icc Lxpeuses relalivr to L' now sparks are management fecs,.real estate taxes and insurance 5 Variable Manager Lspenscs icIaticc to 12 nets spikes are repairs acid supplies and utilities 6 $1,000.000 ntininuun Plus CM C.1Ch year. assumed to be 2'.,, or 75'!, of Total Income, whichever is greater. 7 5 ",, of6ross Res critic (lei it ed trout resalos 7 Marina Park City of Newport Beach Request for Proposals Additional Intormation Comparables to Support Project Pro forma, Market Feasibility Analvsis: 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 difference 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 tier the monthly ]case rates, we offer Addendum 1, a current rent study performed by .ILT Associates, which suggests a current lease rate range of .51,(200-53,300. 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 I -Work would wmmencL: immediately upon City approval of the concept and design, and conservatively, would be completed within 4 months ot'the start of construction. Alternative 2- Again, work could start immediately upon the approval of the City. It could be completed within 9 months of the start of construction. Please note that the development timeti-ame 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 I Jerra Vista Management proposes a minimum 35 -year ground lease with rent equal to 75'/b of cross income or minimum annual payment, of $1,000 -000- adjusted for CPI changes each year. Additionally. the City would be entitled to 5`0 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- Virtually the same as alternative L The difference would be that with more home sites, more revenue would inure to the City over the long* run. Rent credits trom the City for 5 years to repay the funds expended by Terra Vista Management on public facilities would he 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, if 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 from 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 timcframe could be as short as 120 days. Pre - leasing needs and marketing time frames Nonc. 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 si- nificantly increased revenues to the City. While other proposals may suggest hi her revenues several years out, subject to uncertainty and requiring subordination, this proposal hits the around running with a $1,000,000 annual uuarantee beginning immediately, and the likelihood of morc. Furthermore, maintaining the current mobile home community would foster other (Yowls 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 of 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 Bcach community. 10 Marina Park City of Newport Beach Request for Proposals Additional Information Sincerely, VZI "9xS Michael D. nd President Terra Vista ManaLzement MARINA PARK MARKET RENT SURVEY JUNE 2000 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, )bhn M.I President Enc. 3741 Lower gonospiilani Road #107 Labaina, HI 96761 (808) 283 -3380 Fax (808) 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 tbru 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 fiat 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 1999) Water View - $1,650 (up 6.5% over 1999) 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. MARINA 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 - em 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' comer 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 (comer site is $3,000). Marina Park is very close to Lido Peninsula and can be seen from Lido's private beach. 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 Sbores 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. 13 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 150% 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. E MARINA PARK MARKET RENT SURVEY 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 oceanfront 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 comer). 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. Exhibit A MANUFACTURED HOME COMMUNITY RENT SURVEY FOR MARINA PARK - JUNE 2000 Bayslde Village TOTAL, Clubhouses - 2 LAST MONTHLY W/S/T ADJUSTED MOVE -IN 300 East Coast Highway # OF COMMUNITY I RENT I HOMESITE PAID BY HOMESITE I MARKET COMMUNITY HOMESITES AMENITIES INCREASE RENT RESIDENTS RENT* RENT Bayslde Village TOTAL, Clubhouses - 2 DATE: TYPE: SERVCE, Effective 10/27/99 300 East Coast Highway 270 Billiard Room January 2000 1 Low 1 Included $742 Waterfront - $2,200 Newport Beach, CA 92660 Shuffleboard Courts 2 High 2 in the rent $2,200 Water View - $1,650 949 - 673 -1331 OCCUPIED: Activities 3 Average 3 $1,000 Bluff View - $1,275 Type of Community: 55+ 259 Swimming Pools - 2 AMOUNT, 4 4 Interior North - $1,250 Jacuzzi - 2 Various 5 5 South Side - $1,000 Water Orientation %OCCUPIED, Exercise Room CPI AMOUNT, VALUE, be 2 story units .Newport Beach Back Bay 96% Laundry Rooms - 2 CPI +2% 1 $742 1 Two Story Homes RV Storage CPI minimum 4% 2 $2,200 2 Market Lease Site Rents 10/27/99 Marina maximum 8% 3 $1,000 3 10 years Waterfront - $2,500 Comparison to Subject Beach CPI minimum 4% 4 4 (or less) Water View - $1,950 Superior amenities and story homes. with 1,100 Leases expire 5 Supplied by 5 CPI Bluff View - $1,475 inferior water orientation to 1,400 square feet at various times Patty Pamper minimum 4% Interior North - $1,450 Long term leases from $269,900 from 2009 from rent roll South Side - $1,300 DONE to $374,900 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 NIA 5 5 The new homes will Water Orientation % OCCUPIED: removed all of the older AMOUNT: VALUE: be 2 story units 0% Newport Bay Rhine Channel 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 Exhibit A MANUFACTURED HOME COMMUNITY RENT SURVEY FOR MARINA PARK - JUNE 2000 Capistrano Shores TOTAL: Modest Clubhouse LAST MONTHLY W/S/T ADJUSTED MOVE -IN 1880 N. El Camino Real # OF COMMUNITY RENT HOMESITE PAID By HOMESITE MARKET COMMUNITY HOMESITES AMENITIES INCREASE RENT RESIDENTS RENT• RENT Capistrano Shores TOTAL: Modest Clubhouse DATE- TYPE: SERVICE: 1880 N. El Camino Real 90 Small Swimming Pool June 2000 1 North 1 Included in $2,100 Same San Clemente, CA Playground Rolling on 2 South 2 the rent $2,000 as existing 949492 -6616 OCCUPIED: anniversary date 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 PaclficOcean 1 $2,100 1 Doheney State Beach Park Previous 2 $2,000 2 DONE increase was 3 3 Comparison to Subject January 1999 4 4 Superior water orientation $100 5 5 No leases DONE 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 Playground Rolling on 2 2 Sewer as existing 949 - 496 -1372 OCCUPIED: anniversary date 3 3 Trash 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 COMMUNITY # OF HOMESITES COMMUNITY AMENITIES LAST RENT INCREASE MONTHLY HOMESITE RENT W/S/T PAID BY RESIDENTS ADJUSTED HOMESITE RENT• MOVE -IN MARKET RENT 8811 N. Coast Highway 296 El Morro MHP TOTAL: None DATE: TYPE: SERVICE: 8811 N. Coast Highway 296 Billiard Room Library January 2000 1 Ocean 1 Included In $650-$803 Same Laguna Beach, CA 92651 OCCUPIED: Exercise Room 2 Valley 2 rent $300-$485 as existing 949-494 -7581 OCCUPIED, Swimming Pool AMOUNT: 3 Terrace 3 $625 - $1,052 resident Type of Community: All Ages 296 Jacuzzl AMOUNT. 4 4 Normally, rents Water Orientation %OCCUPIED: Gated Entrance CPI- $3 -$15 5 5 are increased 3% Water Orientation % OCCUPIED: Laundry Room AMOUNT, • VALUE: when a home Is 73 homes on Pacific Ocean 100% RV Storage 20 year leases 1 $650-$803 1 sold Also view and non -view sites expired 12199; 2 $300-$485 2 Comparison to Subject park owned by 3 $625 - $1,052 3 Comparison to Subject DONE CA Parks Dept. 4 4 Superior water orientation DONE Scheduled to 5 5 close and be residents pay Community was scheduled to close in 1999. converted to $750 They have been granted a 5 year extension to 2004. beach park. Huntington by the Sea TOTAL: Clubhouse DATE, TYPE: SERVICE. 21851 Newland Avenue Huntington Beach, CA 306 Billiard Room Library Rolling on anniversary date 1 Low 2 High 1 Water 2 Trash Removal $781 $906 Market rents vary by site and range 714 -536 -3626 OCCUPIED: Exercise Room 3 Average 3 $791 from $750 to $875 Type of Community: All Ages 306 Swimming Pool AMOUNT: 4 4 Jacuzzl Leases - 3% 5 5 Normally, rents Water Orientation %OCCUPIED: Gated Entrance Month/Month -5% AMOUNT. VALUE, are increased 3% 100% 2 blocks from the Pacific Ocean 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 3 "Adjusted for Services Included In Rent Exhibit A MANUFACTURED HOME COMMUNITY RENT SURVEY FOR MARINA PARK - JUNE 2000 Laguna Terrace TOTAL: Clubhouse LAST MONTHLY W/S/T ADJUSTED MOVE -IN 30802 S. Coast Highway # OF COMMUNITY RENT HOMESITE PAID BY HOMESITE MARKET COMMUNITY HOMESITES AMENITIES INCREASE RENT RESIDENTS RENT' RENT Laguna Terrace TOTAL: Clubhouse DATE: TYPE: sFRV+r.F• 85% Small Sites -$860 30802 S. Coast Highway 156 Billiard Room Rolling on 1 Low 1 Water $800 Canyon $1,140 - $1.360 Laguna Beach, CA 92651 3 $1,340 3 per month Swimming Pool anniversary date 2 High 2 Sewer $1.689 View Sectlon'no view' 949 -499 -3000 OCCUPIED: Jacuzzi 1 car garage start 3 Average 3 $1,054 $1.060 Type of Community: All Ages 156 Laundry Room AMOUNT, 4 4 View $1,140 - $1.760 market on adjustment (maximum 10 %o)in Comer $1.200- $1.500 Various 5 5 resale of home Premium View Water Orientation Ya OCCUPIED, New Homes CPI (most) AMOUNT: VAL([ for 31lq $1.900- $2,090 Inland side of Pacific Coast 100% Resales CPI minimum 4 1 $756 1 $20 two story homes at $189.000 Highway CPI, no floor and capped at 6 %. To 2016. Foot 2 Story Homes 8% (old leases) 2 $1.645 2 $24 two story homes new move -in rents Comparison to Subject 1.400 to 1.500 square fool homes 30 year leases 3 $1.010 3 The owners have vary by location and Inferior homes (some new) on new homes 4 q quality of ocean view Superior amenities DONE dltferent rents. 5 5 Superior long range ocean views Long term leases Lido Peninsula 710 Lido Park Drive Newport Beach, CA 92663 949 - 673.6030 Type of Community: All Ages Water Orientation Located on Lido Peninsula TOTAL7 214 OCCUPIED: 182 % OCCUPIED: Swimming Pool Jacuzzl Rents Storage Units 6' x 8'$75 8'x 12'$150 approximately 8 sites cannot be used. DATE Rolling on anniversary date AMOUNT, CPI: no minimum maximum of 6% TYPE: SERVICE, 1 Low 1 Included in $809 2 High 2 the rent. $3,200 3 Average 3 Meter water $1,340 4 4 on new homes 5 5 and resales. AMOUNT - VALUF; 1 $809 1 Water & Sewer Market Rents Bay View sites Premium Anchorage Way $3.200 EWng Private Reach $2.750 85% Prestigious Location New Homes Existing 2 $3,200 2 runs $20 - $35 Along 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 ' LTleases 4 4 based on Comer - $3.000 New Mmes 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 %o)in Comer $1.200- $1.500 Long term leases 1.469 square fool resale of home years 2006 and 2011. New Homes two story homes with a I for 31lq 1.000 square foot The owners rent X15 older homes 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 fool CPI, no floor and capped at 6 %. To 2016. Foot 2 Story Homes start at $139.000. two story homes I I $1,585- $1.665 1.400 to 1.500 square fool homes start at $157,000. Existing residents will have their 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. 1 1 dltferent rents. Adjusted for Services Included In Rent Exhibit A MANUFACTURED HOME COMMUNITY RENT SURVEY FOR MARINA PARK - JUNE 2000 Marina Park TOTAL Laundry Room LAST MONTHLY WIS/T ADJUSTED MOVE -1N 1770 Newport Boulevard # OF COMMUNITY RENT HOMESITE PAID BY I HOMESITE I MARKET COMMUNITY HOMESITES AMENITIES INCREASE RENT RESIDENTS RENT' RENT Marina Park TOTAL Laundry Room DATA TYPE: SERVICE: 1770 Newport Boulevard 60 Beach October 1999 1 Bay View 1 Included in $1,129 Same as Newport Beach, CA 2 Partial View 2 the rent $853 existing 949 - 261-6111 (mgml. co.) OCCUPIED, 3 Partial View 3 $796 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., VALUE, various proposals 94% Balboa Peninsula on 95% 1 $525 1 $1,129 1 for the community Newport Bay 2 $783 2 $853 2 submitted by Owned and 3 $678 3 $798 3 local companies Subject operated by city 4 4 4 quality homes and of Newport Residents were 5 5 5 Residents have DONE Beach. Land granted a two year Plus $22 per offered to double DONE lease expired extension lhru month for gas the monthly rent March 31, 20001 March 31, 2002 Marineland MHP TOTAL: Laundry Room DATA 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 OCCUPIED: 3 Average 3 Trash Removal $706 Multi- Section - $765 Type of Community: All Ages 58 AMOUNT: 4 4 $18 5 5 Water Orientation !OCCUPIED: AMOUNT: VAL1( 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 interior water orientation DONE No leases ' Adjusted for Services Included in Rent Exhibit A MANUFACTURED HOME COMMUNITY RENT SURVEY FOR MARINA PARK - JUNE 2000 Pacific Mobile Nome Park TOTAL, Clubhouse LAST MONTHLY W/S/T ADJUSTED MOVE -IN 80 Huntington Street # OF COMMUNITY RENT HOMESITE PAID BY NOMESITE MARKET I COMMUNITY HOMESITES AMENITIES INCREASE RENT RESIDENTS RENT• RENT Pacific Mobile Nome Park TOTAL, Clubhouse DATE: TYPE: SERVICE: 80 Huntington Street 264 Billiard Room April 1998 1 Low 1 Included in $400 $500 Huntington Beach, CA Swimming Pool 2 High 2 the rent $500 All homesites 714- 536 -3832 OCCUPIED: Jacuui 3 Average 3 $400 rent control Type of Community: All Ages 264 AMOUNT - 4 4 Market rents Unknown 5 5 increased $50 Water Orientation % OCCUPIED, AMOUNT, • VA UE, in 2000 100% 2 blocks from ocean 1 $400 1 Coast Highway 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 DONE No leases Palisades Bowl TOTAL, Clubhouse DA 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, East side of Pacific 100% 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•amenifies 5 5 Superior long range ocean views DONE LA City Rent Control Adjusted for Services Included in Rent Exhibit A MANUFACTURED HOME COMMUNITY RENT SURVEY FOR MARINA PARK - JUNE 2000 Palos. Verdes Shores TOTAL: Clubhouse LAST MONTHLY W/S/T ADJUSTED MOVE -IN 2275 West 25th Street # OF COMMUNITY I RENT I HOMESITE PAID BY I HOMESITE MARKET COMMUNITY HOMESITES AMENITIES INCREASE RENT RESIDENTS RENT' RENT Palos. Verdes Shores TOTAL: Clubhouse DA IJu TYPE: SERVICE: 2275 West 25th Street 242 Billiard Room Rolling, most in 1 Low 1 Water $606 10% on turnover San Pedro, CA 90732 Library October 2 High 2 Sewer $1,116 as permitted by 310 - 547.4403 OCCUPIED: Shuffleboard - Indoor 3 Average 3 Trash $945 Maximum rates set Type of Community: 55+ 242 Exercise Room AMOUNT: 4 4 by parkowner in 1992 Swimming Pool 3% 5 5 'CAPPED RENTS' Water Orientation %OCCUPIED: Jacuzzl AMOUNT: VALUE, View - $1,085 Hillside community overlooking Terraced community overlooking 100% 9 Hole Executive Got 1 $358 1 $575 1 $15 View-$1,010 the Pacific Ocean Tennis Courts 2 $1,200 2 $1,085 2 $4 View -$985 Horseshoes 3 $614 3 $914 3 $12 Non View - $905 Comparison to Subject Gated Entrance 4 4 4 Non View - $855 Superior homes, homesiles. 5 5 5 superior long range ocean views amenities and long range 'CAPPED RENTS' ocean views DONE increased $351n 2000 LA City Rent Control Paradise Cove TOTAL: Clubhouse DAIS, 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: Hillside community overlooking 100% 1 $358 1 the Paclflc 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 Exhibit A MANUFACTURED HOME COMMUNITY RENT SURVEY FOR MARINA PARK - JUNE 2000 Point Dume'Club of Malibu TOTAL: Clubhouse LAST ONTHLY W/SIT ADJUSTED MOVE -IN 29500 Heathercliff Road # OF COMMUNITY RENT OMESITE LM PAID BY HOMESITE MARKET COMMUNITY HOMESITES AMENITIES INCREASE RENT RESlOENTS RENT* RENT Point Dume'Club of Malibu TOTAL: Clubhouse DATE. TYPE- SERWCE. 29500 Heathercliff Road 297 Billiard Room Rolling on 1 Low 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 AMOUNT: 4 4 Jacuzzi AMOUNT: 5 5 15% on new sublease Water Orientation % OCCUPIED: Tennis Courts 2.3% AMOUNT. VALUE. as permitted by Terraced community overlooking 100% Gated Entrance 1 $700 1 $20 rent control the Pacific Ocean Car Wash 2 $2,000 2 $5 Pacific Ocean Laundry Room 3 $1,175 3 Over 100 homes Comparison to Subject RV Storage 4 4 are subleased for Superior homes and amenities. 5 5 $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, Terraced .community, .east side 100° 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 8 MANUFACTURED HOME COMMUNITY RENT SURVEY FOR MARINA PARK - JUNE 2000 # OF HOME 0% W/S/T $3,250 HOME SITES % MONTHLY HOMESITE RENT PAID BY ADJUSTED HOMES17F RENT COMMUNITY SITES OCC OCC LOW HIGH AVG RESIDENTS LOW HIGH AVG MOVE-IN HOMESITE RENT Bayside Village Cannery Village Capistrano Shores Dana Point Marina El Morro MHP - Ocean El Morro MHP - Valley El Morro MHP - Terrace Huntington by the Sea Laguna Terrace Lido Peninsula Marina Park 270 259 96% $742 $2,200 $1,000 None 34 0 0% $1,800 $3,250 $783 WIS -$33 90 90 100 % $2,000 $2,100 $400 None 81 81 100% $790 $790 $790 W /Sri -$47 296 296 100% $650 $803 242 None $575 $1,085 $914 $300 $485 257 None 100% $358 $1,200 $625 $1,052 Point Dume' Club None 306 306 100% $750 $875 $760 Wrf -$31 156 156 100% $756 $1,645 $1,010 WIS -$44 214 182 85% $809 $3,200 $1,340 None 60 57 95% $798 $1,129 $853 None Marineland 62 58 94 % $525 $783 $678 W /S/T -$28 Pacific 264 264 100% $400 $500 $400 None Palisades Bowl 168 168 100% $400 $850 $565 WIS - $22 Palos Verdes Shores 242 242 100% $575 $1,085 $914 W /Sri -$31 Paradise Cove 257 257 100% $358 $1,200 $614 None Point Dume' Club 297 297 100 % $700 $2,000 $1,175 Wrf - $25 Tahitian Terrace 158 158 100% $416 $1,062 $675 W/S - $20 $742 $2,200 $1,000 Waterfront - $2;200, Water View $1.650 Bluff View - $1,275, Interior North - $1,250 South Side - $1,000 $1,633 $3,283 Waterfront - $3,250, Perimeter- $2,200 Interior- $1,800 $2,000 $2,100 North of Clubhouse - $2,100, South of CH - $2,000 $837 $837 $837 Same as existing resident $650 $803 Same as existing resident $300 $485 Same as existing resident $625 $1,052 Same as existing resident $781 $906 $791 Market rents $750 to $1175 based on slzellocation $800 $1,689 $1,054 Canyon - $1,140 - $1,360; View $1,140- $1,760 Premium View - $1,900 - $2,090 $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 comer $1,200 - $1,500. Interior sites two story homes - $1,585 - .$1,685, $798 $1,129 $853 Same as existing resident - Partial View $798 Partial View - $853, On the Say - $1,129 $553 $811. $706 Market rents: SW - $700 DW - $765 $400 $500 $400 $500 all homesites $422 $872 $587 10% on resales as per rent control ordinance. $606 $1,116 $945 10% on resales as per rent control ordinance. $358 $1,200 $614 15% on resales as per rent control ordinance. $725 $2,025 $1,200 15% on resales as per rent control ordinance.. $436 $1,082 $695 10% on resales as per rent control ordinance. Exhibit C MANUFACTURED HOME COMMUNITY RENT SURVEY FOR MARINA PARK - JUNE 2000 MARKET RENT ANALYSIS # OF HOME MARKETRENTS COMMUNITY TYPE SITES Category Rent Category Rent Category Rent Category Rent Category Rent COMMENTS Bayslde Village 55+ 270 Watedont $2,200 Walervlew $1,650 Blue vkw $1,275 Inledor North $1,250 hied" South $1.000 Subject Community - TradBWnal Homes Bayside Village 55+ 270 Waterfront $2.500 W8tervlew $1,950 BNB View $1,475 Interior North $1,450 Interior south $1,300 Subject Community - Two Story Homes Cannery Village Ail Ages 34 Waterhom $3,600 Perimeter $2.200 Interior $1,800 100% upgraded. Superior Bay Views Capistrano Shores All Ages 90 Oceanfront $2,100 Oceanfront $2.1100 Directly on Pacific Ocean; vastly interior amenities Dana Point Marina All Ages 81 All Hwnesiles $790 Interior to subject("ter orientation. quality of homes and amens les) El Morro MHP All Ages 296 Oceanfront $650 - $803 :Ocean View $625 - $1,052 Valley $300-$485 Long learn leases CPI, no Increase on resale Owned by Stare: to close 12!99. Residents granted a trve year lease extension Huntington by the Sea All Ages 308. All Sites $750-$975 Family community Laguna Terrace. All Ages 156 P Oumvlew $1900 -$2.090 Ocean View $1,140 - $1;760 Canyon $1.140 - $1.360 interior homes (some new) and amenities: superior long range ocean views Lido Peninsula All Ages 214 prime Water $3.200 Facing Beach $2.750 25bylnkdor $1.585.$1.685 Interior $1,050 - $1,300 manor $1.050 - $1.300 Rental rates based upon size of she, location Facing Beech. $2:750 Channel Vww. $2.350 - $2.550 Inferior $1,050 - $1.300 Interior Comer $1,200. $1.500 Inledor Comer $t.200 -51.500 and quality of view Channel View $2,350 - $2.550 [We nna Park XT Ag as 60 Waterfront $1,129 Bay Mau, 3 Third Row Same as exlsding re s em Madneland All Ages 62 Single Sectlon $700 Lower quality, Tracer Park' Much- Secllon $765 Pacific All Ages 264 All Silas $500 Very small. sties. Interior quality and water orlerdalion Palisades Bowl Ah Ages 168 High $850 Lox $400 Average $565 10% on resales as per rand control ordinance. Very small saes. vastly infector homes and amenities; superior long range ocean views Palos Verdes Shores 55+ 242 Ocean New $985 - $1.085 Non -wew $ 855 -$905 Owner *capped' rents In 1992, Increased cap$ $35 In 21100; 10% incresse on resale: superior homes, amenities & long range Ocean views Paradise Cove All Ages 257 High $1 2170 Lox $358 Average. $614 15% on resales as par rent control ordinance. Mostly inferior homes and emanates:. superior long range ocean views Point Dum l' Club All Ages 297 High $2.000 Low $700 Average $1,175 15% on resales as per rant control ommance. Superior homes (multi - section), better amens ies; superior long range ocean views Tahitian Terrace 55+ 158 High $1062 Low $416 Average $675 10% on resales as perrent cordrotpminance. Comparable Mmes. Interior amenities, superior long range mean views 10 Fx1qC,4• - D E0,6 Anaqeles 20 inches; 712 words TUESDAY, JUNE 13, 2000, BUSINESS, PART C; PAGE 1 000055877 COPYRIGHT 20001 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 T Es srA w n-a A sudden burst of home buying in late May led tc 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 10,1 19, 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 barged 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 malting a purchase out of concern over stockmarket 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- von," 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. TIIvIESONDEMANDOFTHE SE LOS SERVICE TIMES. Dial 800 -788 -8804 FEELING RIGHT 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 T1ie 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. merit and obtained a 30.year. raced -rate loan at the going in- terest rate. That's high, but Orange Counry has bfxm there before. The previous peals 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 lung slide that began in the early 1990s. In some ways, the market is just now returning to ground zero. In terms of monthly pay- meets. homes aren't a lot more expensive" said Esmsel 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 But higher 2 percent Rage ring pay- ments don'tseem to be scaring buyers away. Last month was the busiest May on record, with 4,660 home 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 next day," he said. Now they're saying,'If I get fired tomorrow, there are two or three other places. I could g0.' That's just what Rm1 Errant, 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 ADM. 1520! CHG. CHG. YEAR TO CHG. FROM YEAR DATE FROM MAY APR. AGO AVG. 1999 All 4.660 15.5% 9.0% 3.893 1.4% 1- family resale 2.915 14.0% 3.9% 2:400 4.0% Cando resale 1.313 13.3% 16.7% 1.074 8.7% New 432 35.8% 25.2% 418 20.1% All $268;000 2.3% 1 11.2% S258.000. 11.2% 1- family resale $292000 1.8% 11.5% $279.000 12.0% Condo resale $175.o00 0.6% 7.4% $169.000. 7.o% New f388,0o0 1.6% 19.0% S369.Dp0 14.2% < $100.000 170 22.3% -4 " 148 -22.4% Stoaoot- $200.000 9.1% 171 A - 1.072 -183% S200.001-5300.000 - -- -1186 1.524 19.3% 162% 1.266 6.3% $300:0014400.000 833 9.2% 40.0% 701 32.9% _ ,$400.000 1.102 27.5% •61.6% 824 41.3% <1.000 sq. ft. $133.000 -2.2% 1.1% $131,000 6.3% 1.0014,500 S2o7,250 1.6% 12.0% $261,000 11.2% 1.501.2,000 $285,000 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;000 -7.3% .. 3.2% ..-- -' - 5498.000 - ... _ 12.3% Defaults 348 4.2% 75.4% 366 Foreclosures 26 4.0% -52.7% 35 •64.9% Avg loam- to-value 82.8% -0.4% •2.1% 632% -1.8% Adjustable loan share 42.9% •1.6 %{732.6% `44.954 166.1% Payment cost index $1,621.88 7.9% 29.8% $1.511.67 25.6% Median price per sq. ft. 5172:77 0.6% fOp% $167.34 9.6% 1 Last month's change from a year before. +3.90/6 1- family home resale volume 1- family home resale price LAA -5.4% Defaults 4 +132.8% Adjustable loan share +29.8 %. Cost Index +10% Pricelsq, ft. Definftianr..MEDIAN is midpoint of all value; NEW includes 1- family and condos ACTIVITY BY PRICE breaks down home and condo sales by sales price; PRICE BY HOME 51ZE breaks down home and condo saws by square footage of the property, DEFAULTS are notices of lateness filed by lenders; LOAN -TO -VALUE is percentage of purchase price financed; ADJU5TABLE LOAN SHARE is percentage of purchase loans with adjustable races: PAYMENT COST INDEX is monthly payment for median price 1-- family home at average. 30yeaa fixed mortgage; and PRICE PER SQUARE. FOOT Is for Warmly homes. 'S.. AraomrUata9uid, Information Systems The Orange County Register last manth, Erratt and his wife Mary bought a four -bed. ronm 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," Errattsahl 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 flown payment at all, said President lionel Punchard. 11w office rarely has to turn 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 ► SY THE NUMBEIM. Home prices and sales volume by ZIP code. Business 12 FXH�iI 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 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. 6"i Street Corona, CA 91720 (909) 736 -2400 Project: Country Suites — Corona West Start Date: 2/98 Completer 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 (1 15 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 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 lndustrias, 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, 111 Address: 325 Bristol Street Costa Mesa, CA 92626 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: Gregg Kleminsky Address: 355 Bristol Street, Suite F Costa Mesa, CA 92626 Telephone: (714)429 -9372 ext. 100 Job Title: Controller Job Desc: Oversees daily financial operations of hotels Years w /Co.: 13 Name: Address: Telephone: Job Title: Job Desc. Years w /Co.: Name: Address: Telephone: Job Title: Job Desc.: Years w /Co. 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 18 10 1 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 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 10 Year 2 Year 3 83 29,689 30.295 98.0% 220.00 215.60 Amount Percent PAR POR 83 83 22.721 24.539 30.295 30.296 75% 81% 180.00 185.00 135.00 149.85 Percent PAR POR Amount Percent PAR POR $ 6,531.602 99.5% $ 215.60 $ 220.00 $ 4.089.825 99.2% $ 135.00 $ 180.00 $ 4,539.706 99.2% S 149.85 $ 185.00 30.000 0.5% 0.99 1,01 33.000 018% 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 $ 705.116 10.8% $ 23.28 $ 23.75 $ 539.630 13.2% $ 17.81 $ 23.75 S 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 $ 24.41 $ 561,080 13.6% $ 18.52 $ 24.69 $ 606.395 13.3% $ 20.02 $ 24.71 $ 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 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% $ 20.73 $ 21.15 GROSS OPERATING PROFIT FIXED EXPENSES Management Fees Property Taxes Insurance Land Lease Total NET OPERATING INCOME $ 159.049 3.9% $ 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 $ 5.209.061 79.4% $ 171.94 $ 175.45 $ 3,081,191 74.7% $ 101.71 $ 135.61 $ 196,848 3.0% $ 6.50 $ 6.63 60,000 0.9% 1.98 2,02 11.000 0.2% 0.36 0.37 328.080 5.0% 10.83 11..05 $ 595.928 9.1% $ 19.67 $ 20.07 $ 123.685 3.0% $ 4.08 $ 5.44 60.000 1.5% 1.98 2.64 11,000 0.3% 0.36 0.48 206.141 5.0% 6.80 9.07 $ 400.826 9.7% $ 13.23. S 17.64 $ 4,613.133 70.3% $ 152.27 $ 155.38 $ 2,680.365' 65.0% $ 88.48 $ 117.97 Occupancy Tax Projection $ 653,160 Land Lease 328,080 $ 981,240 $ 408.983 206.141 $ 615.124 Page 1 $ 171.773 3.8% $ 5.67 $ 7.00 137,418 3.0% $ 4.54 5.60 132,510 2.9% S .4.37 5.40 77.298 1.7% S 2.55 3.15 518,999 11.3% $ 17.13 $ 21.15 $ 3.450.612 75.4% S 113.90 $ 140.62 S 137.280 3.0% $ 4.53 S 5.59 60.000 1.3% 1.98 2.45 11.000 0.2% 0.36 0.45 228.800. 5.0% 7.55 9.32 $ 437.080 9.6% $ 14.43 $ 17.81 $ 3.013,531 65.9% $ 99.47 $ 122.81 S 453,971 228,800 $ 682,771 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 4 Year 5 Year 6 83 83 83 25,751 26,357 Z7b68 30.295 30,295 30,295 85% 87% 91% 190.00 190.00 M1100 161.50 165.30 974.45 Amount ' Percent PAR POR Amount Percent PAR POR Amount itmuxit PAR POR $ 4.892.643 99.3% $ 16150 $ 190.00 $ 5.007.764 99.30/6 $ 165.30 $ 190.00 $ 5375,848 2&3% $ 177.45 $ 195.00 36.663 0.7% 1.21 1.42 37.030 0.7% 1.22 1.40 37.400 62% 123 1.36 $ 4.929.306 100.0% $ 162.71 $ 191.42 $ 5.044.793 100.0% $ 166.52 $ 191.40 $ 5.413.248 1838 $ 178.65 $ 196.36 $ 611.580 12.5% $ 20.19 $ 23.75 $ 625.970 125% $ 20.66 $ 23.75 $ 654.751 W-2% $ 21.61 $ 23.75 23.831 65.0% 0.79 0.93 24,069 65A% 0.79 0.91 24.310 f5II% 0.60 0.88 $ 635.411 12.9% $ 20.97 $ 24.68 $ 650.040 129% $ 21.46 $ 24.66 $ 679.061 W-9% 5 22.41 $ 24.63 $ 4.293.894 87.1% $ 141.74 $ 166.75 UNDISTRIBUTED OPERATING EXPENSES .Administrative & General $ 180.255 3.7% $ 5.95 $ 7.00 Marketing 144.204 2.9% $ 4.76 5.60 Property Operation & Maintenance 139.054 2.8% S 4.59 5.40 Utility Costs 81.115 1.6% $ 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 $ 4,394.753 87.1% $ 145.07 $ 166.74 $ 184.497 3.7% $ 6.09 $ 7.00 147,597 25% $ 4.87 5.60 142.326 28% $ 4.70 5.40 83.023 1.6% $ 2.74 3.15 557.443 11.0% 18.40 $ 21.15 $ 3.749.266 76.1% $ 123.76 $ 145.60 $ 3.837.310 76_1% $ 126.66 $ 145.59 0.40 270.662 5.0% 8.93 9.82 $ 504.060 93% $ $ 147.879 3.0% $ 4.88 $ 5.74 $ 151.344 3.0% $ 5.00 $ 5.74 60.000 1.2% 1.98 2.33 60.000 12% 1.98 2.28 11,000 0.2% 0.36 0.43 11.000 02% 0.36 0.42 246.465 5.0% 8.14 9.57 252.240 5.0% 833 9.57 $ 465.344 9.4% $ 15.36 $ 18.07 $ 474.583 9.4% $ 15.67 $ 16.01 $ 3,283.921 66.6% $ 108.40 $ 127.53 $ 3.362.727 66.7% $ 111.00 $ 12759 Occupancy Tax Projection $ 489,264 Land Lease $ 246,465 $ 735,730 $ 500,776 $ 252,240 $ 753,016 Page 2 $ 4.734.187 875% $ 156.27 $ 171.72 $ 192.979 3.6% $ 6.37 $ 7.00 154.383 2.9% $ 510 5.60 148.870 28% $ 4.91 5.40 86.841 1.6% $ 2.87 3.15 583.073 10.8% $ 1925 $ 21.15 $ 4151.114 1W% $ 137.02 $ 150.57 $ 162.397 3.0% $ 5.36 $ 5.89 60.000 1A% 1.98 2.18 11,000 02% 0.36 0.40 270.662 5.0% 8.93 9.82 $ 504.060 93% $ 16.64 $ 18.28 $ 3.647.055 87.4% $ 12038 $ 13229 $ 537,565 $ 270,882 $ 808,247 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 7 Year 8 Year 9 83 B3 83 28;780. 28,780 29.689 30,295 30,295 30295 95% 95% 98% 200.00 205.00 210.00 190.00 194.75 20580 Amount . Percent PAR POR Amount Percent PAR POR Amount Percent PAR FOR $ 5,756.050 993% $ 190.00 $.200.00 $3,899,951 99.4% $ 194.75 $ 205.00 $ 6.234,711 99.4% $ 205.80 $ 210.00 37.774 0.7% 125 1.31 38,152 0.6% 1.26 1.33 38,533 0.6% 1.27 1.30 $3,793,824 100.0% $ 19125 $201.31 $ 5,938,103 100.0%-T196.011 196.01 $ 206.33 $6;273,244 100.0% $ 207.07 $.211.30 $ 683.,631 11.9% $ 22.56 $ 23.75 $ 683.531 11.6% $ 22.56 $ 23.75 $ 705,116 113% $ 23,28 $ 23.75 24,553 65.0% 0.81 0.85 24,799 65.0% 0.82 0.86 25.047 65.0% 0.83 0.84 $ 708,084 12.2% $ 23.37 $ 24.60. $ 708,330 11.9% $ 23.38. $ 24.61 $. 730.163 11.6% $ 24.10 $ 24.59 $5.085,740 87.8% $ 167.87 $.176.71 UNDISTRIBUTED OPERATING EXPENSES 2.7% $ 5.32 5.60 155,413 2.6% Administrative & General $ 201,462 3.5 %. $ 6.65 $ 7.00 Marketing 161.169 2.8% $ 5.32. 5.60 Property Operation &. Maintenance 155.413 2.7 %. $ 5.13 5.40 Utility Costs 90.658 1.6% $ 2.99 3.15 Total 608.702 10.5% $ 20.09 $ 21.15 GROSS, OPERATING PROFIT FIXED EXPENSES Management Fees Property Taxes Insurance Land Lease Total NET OPERATING INCOME $ 5.229,773 88.1% $ 172.63 $ 181.71 $ 201.462 3.4% $ 6.65 $ 7.00 161.,169 2.7% $ 5.32 5.60 155,413 2.6% $ 5.13 .5.40 90,658 1.5% $ 2.99 3.15 608,702. 103% $ 20.09 $ 21.15 $4477,038 77.3°/x. $.147.78. $ 155.56 $4.621.071 77.8 %. $.152.54. $ 160.56 $ 173,815 3.0% $ 5.74 $ 6.04 60,000 1.0% 1.98 2.08 11,000 0.2% 0.36 0.38 289.691 5.0% 9.56 10.07 $ 534.506 9.2% $ 17.64 $ 18.57 $ 178.143 3.0% $ 5.88 $ 6.19 60.000 1.0% 1.98 2.08 11,000 02% 0.36 0.38 296,905 5.0% 9.80 10.32 $ 546,048 9.2% $ 18.02 $ 18.97 $ 3,942.532 68.0% $ 130.14 $ 136.99 $ 4.075.023 68.6% $134.51 $.141.59 Occupancy Tax Projection $ 575.605 $ 589.995 Land Lease 289,691 296.905 $ 865,296 $ 886.900 Page $3,543.081 88.4X. $182.97 $186.70 $ 207.824 3.3% $ 6.86 $ 7.00 166.259 27% $ 5.49 5.60 160,321 26% $ 5.29. 5.40 93,521 15% $ 3.09 3.15 627,924 10.0% $ 20.73 $ 21.15 $4,915.157 78:4% $162.24 $.165.55 $ 188;197 3.0% $ 6.21 $ 6.34. 60,000 1.0% 1.98 2,02 11.000 02% 0.36 0.37 313,662 5.0% 10.35 10.56 $ 572,860. 9.1% $ 18.91 $ 19.30 $4,342.297 002% $ 143.33 $ 146.26 $ 623.471 313,662 Newport Beach - Balboa Island Income Summary Projections $ 542,712 Page 4 I Year 1 Roan 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 $ 3.64.024 100.0% $ 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 66.600 1.8% $ 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 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 I TERRA VISTA MANAGEMENT Matins Park Request for Proposals Submission 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. 0 Marina Park City of Newport Beach • Request for Proposals Submittal I. 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. FinancialOualifications: 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. 0 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 now 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 18'' 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 18'' 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. M 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. 5 • 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 S 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 fj!( , Michael Gelfan President Terra Vista Management n u 7 Apt -MOOM 1-4 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 5`h 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 State_line, South Shore Mobile Home Sites 155 • Total 1999 Revenues (not audited) $ 861,000 Operated Since 1989 12 Corporate Offices San Diego 2727 De Anza Rd. San Diego, CA 92109 Los Angeles 6310 San Vicente Suite 560 Los Angeles, CA 90048 n U 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 Vol 0 0 • 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: Funding Amount: Funding Date: De Anza Moon Valley Lender: Funding Amount: Funding Date: Tahoe Shores Prudential Insurance Company of America $25,750,000 August 1997 Anchor National Life Insurance $ 6,600,000 July 1997 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 11 n U • 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, alc'� rt"' --ejz Alan J. Twedt Vice President • 0 ADN004 MARINA I mmc N VILLAGE COMMUNITY UTILIZATION PLAN PREPARED BY: f W'. L� �. Y... M,Y... _... R a c WIM � /� \ \.��� / \ / / /�../ \� � � \ a... � \ / f by pF NEW MARINA PARK COMPLEX ENTRANCE PROVIDE NEW STREET TREES AND BLOCK PLANTERS WITH LANDSCAPE 0 COMMUNITY UTILIZATION PLAN 0 n LJ INSTALL 6 -NEW HOMES 12 -TOTAL MARINA PARK VILLAGJ 0 COMMUNITY UTILIZATION PLAN � 1 RELOCATE TENNIS COURTS - PROVIDE ACCESS TO RESTROOM /SHOWER FACILITY - NORTH /SOUTH ORIENTATION FOR COURTS 1) 7 L \���i�'. 001 111 PLANT FLOWERING VINES FOR LANDSCAPE SCREENING AT TENNIS COURT FRONT -SIDE FARINA PARK VILLAGE OMMUNITY UTILIZATION PLAN .1 TRELLIS AWNING ENHANCE EXISTING HOMES PROVIDE DOOR AND WINDOW TREATMENTS - AWNINGS, PLANTER BOXES AND POT SHELVES �1 \�t\m\\\Rf W 1pe'N � Ftc cV s s �oardv�ra(I� o-� 40 WIDEN BEACH ACCESS POINTS ,; mou- f> V40LIK 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 40 COMMUNITY UTILIZATION ]ALAN • 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 0 COMMUNITY UTILIZATION PLAN 0 0 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 Y UTILIZATION PLAID 0 • PROVIDE BEACH ACCESS AND PARKING SIGNAGE ATION PLAN cn U Q P� V PROVIDE BEACH ACCESS AND PARKING SIGNAGE ATION PLAN U 0 no RENOVATE AND ENLARGE EXISTING RESTROOM FACILITY (ONE -HALF PUBLIC USE & ONE -HALF PRIVATE USE) LIZATION PLAN b� 0 PROVIDE SIGNAGE AND AREA FOR NON- MOTORIZED HAND LAUNCH � � w 0 COMMUNITY UTILIZATION • Add0um 6 At V 0 JUN�Alternative 1 / l Footnotes DESCRIPTION 1 Total Income 2 Home OBice Expense 2 Manager Expense Total Expenses Year Year boar3 Year4 Year Year 6 Year 7 Ycar 8 Year 9 Year 10 1.299,656 1,325.649 1.352.162 1,379,205 1,406,789 IA34,925 1,463.623 1,492.896 1.522.754 L553,209 (170,950) (174,369) (177.857) (181,414) (185.042) (188.743) (192,518) (196,368) (200.295) (204,301) (99.443). (101.432) (103.460) (105.529) (.107,640) (109,793) (111,989) (114.228) (116.513) (118,843) (270.393) (275,301) (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 1,114,107 1,136;389 1,159.117 1,182,300 1,205,946 1,230,U64 Capital lmpro•emenis (24,000) (24.380) (24,970) (2iA69) (25,973) 126,498) (27,028) (27,568) (28,120) (28,682) InlergI 0 0 0 0 0 Principul 0 0 0 0 0 CapilaVUliliiy Improccmenl Reserve (5.263) (5,368) (5.476) (5,535) (5.697) (5.811) (5;927) (6,045) (6,166) (6,290) Base Rail to City 1,000.000 1.020.000 1.040:400 1,061,208 1,032,432 1,104.031 1,126,162 1,14806 1,171,659 1,195,093 3 Resales % 19 City 58.000 42.840 29.131 22,285 22.731 23,186 23,649 24,122 24,605 25,097 Total Real to City ).058.00(1 1.062,840 1.069.531 1,033,493 1,105.163 1,127,267 1,149:812 1,172.808 1,196.264 1,220,190 Fromotes I Year One Monthly Rental Rates: Walerfront- 52,300 /Waterview $1,8001Ta nis View $1,600. Rates are adjusted by CPI inch year, assmned m be 2% for this pro R,mm. 2 Bassi upon historical operations of Marina Park . as apprevriate and Bayside Village as appropriate. Adjusted by CPI each year, assured to be 2% for this pro forma. 3 $1;000,000 ninimmr plus CPl each year, assumed to 1x2 %, or 75 %ofTntal laconic, xhichcccr is greater. 1of12 DESCRIP I RJN PrenIion Grc55 PWe611 Rmr L!R,v,mnl Clspnm Rmr R16nle 0 vacln."us 1• Imml MROUantt 11.1 ."11' EmplmeeL one Frm R.m Nn Bilbble Rm. On ad Ctod Rm. G,, h Rmnl Canmissinns C.lh Rnn» ('art Daposin FM61M B;W Olt" Mmv Om; kmplMeeRml Taal Rm1al Innnne Pmslnlouun Income Owego R.nbls BiIINVd Rm..L I"d O'M1 Rmbl Insane Cn,Id In, emno Sak Cw. pi Sala Salap.+.Sabd. $,ilnpnsm Cnnlnissiom Imml"n Ad,wis.ne O,h,, SA,l F+pmse rk ,;np lmemst foul b..anlw+ .Saks RmeR Canmissiom Snlnp. S.W. Salapesson C.'W"iom Rmle Abmimne O1nn NRS Bpmse T(nal R6ale IN+XI.e Total f W ch Saks Rmaln Ve ing Income Fnumi, meome ro.al V-di, m. nn, 710+00'1 S.iMane Inlnal Nnme M'Ltdbnmus In.ne Taal Olha Income Tom1 Inmee n "29"1111 II I 1r i I T 79 n Jug v.a IYA kM II 2.!219 L?Y k+ fi 11.11 °^ As 6 • Alternative 1 SUMMARY \ EAR ONV 110 \II Ofl'C'E FYff. \SI. Sb. \I \I: \R1" ACCT DESCRWIION Piw.Ylion 3'.11121 Leml Fem I,ym 1.1101 Audi' Tl< _ ioM1:u21 A.munrina RMem Of 42111 Pe"01 OIMr P'AtOinnal Fees 2,111 5"6.10 1'a nnn S""p ! +w 4,".121 Rninnal\Immnneln Ann. Alb.W1 rmpin.a B.mm l.P,db I x; 3M.ln"9 I.e_klmn e[w..dbuGns n 971101 ('op Td ho,m, E,ense .n! 0021121 Oreanicmipml OUm v ('4,P OILdF1'P le 1:+ I Mal Pmfnslmul Fns 4! U2 i 114,1121 Imulun" A.4" 5112n21 Abspbml Wmame l.'i U !LnU ?I In ",I Wk 'm 1. q ];4,'I P."' Tivi 42111 11 m@ I lull 1.4P1 41$1X1,1 l.mte T.rpmKebBBR " 5i.mo1 \mwamem Tm'n Ir.. 14'117'. 11711021 Imm.h l b0 511n,Q1 lolal O'b E",ns 127A.1 'M9 101 LJJn 1,,W I IYme OW., Larcnse ISU,*O ax Inlnn. C., p 2 Of 12 DL$(RWIION PIm.+.inn OITrd Snw6s \Immmv:we5ahries Slpol Pmni$ibms n Rnk \Inncmbn l.ln— I,ca1 Ili. P.mfl"a V, mails( IP)N Taal SJBUm ! ;AY Psmll lmm� _ +su 1071. A'A"mulart Nndni Ynry1 Inmlam6 LJJn Onli Ell. R,bW Ell. " ,.a run f.nn;b.wm leal Pa.dl icon ALI An1.vIMmP +4,c Sgrydiz Lou LanduaPin, I'!INn frndenine l :mra :s •. ml Pnutl IT +nMC.mi. Ey.mce n RnIeln A Wrat,n , Il.un PImnM1.ne N�uin .r Pml\lain..('muan n Poll R,,m, Ir TOUI Rapersd SI,Ik+ JL.nX Ie4ThaYle favmnnni;'nims I.InI U1nd S16s <riP.inns .'n� 0RiM Fapmiek Rauee aY1 Alntellarmus F.apmse 1) Ininincd Srniw[ n TOIL I)Ritt Papmae �'�_ Tnum ft.U.iort Lv n+ n06m'sine 1lr. Inrn A�U<mus 1.1 :'J IdL fTM k+Pmtr iMl I:IRYM FIIXr Re.hnM l:btk 1 CIMIA SIfIIOIiI A, IINI Gaz I ;aw) RnmM1ursM Ux A fiE $tM1l01aI 12.410 WaM Ir Sma U Ioul Vrib.im 11.7.411 TVO Malmo Ecpmse W.JJ! 0.11 ^n A 6 • Alternative 1 INCOME SCHEDCLE DLS(' RIP [ION JAN FLB MAR APR MAY JUN JU'L At SLAP OCI %Ol DEC IOIAL IOI AL UNITS . - - - - -= 58 TOTAL SQUARE FEEL -5 1MARKE TRENT II4.0W IId.000 1IJ,I +W 114.019, 114,0(W 114.00 114.01" II4JhW 111(0* 114.1 W0 114.140 114.I*u 1.368.Wi• (RENT PER S.FJ 0.W 0.00 6.00 0.!O 0AW Oou 1101.. UJO 0.0 0,f91 0.19, (1160 k0A LEAS F. GAIN ILOSS) V RENT POTENTIAL 114.000 114100 114.0W 11400V 114.000 114.00 114..0w 1141W0 1110111) II4.m.61 I14.1W II4AW I_368.WU (RENT PER S.F.) 0.00 0.00 O.VO 0.00: (11A) 0AU 0AW 0.00 0.1.1) OJW O.In) 1100 0.00 V'ACANCIES(UNITSI 0 0 0 0 0 0 U 6 0 0 U V V.ACIANCIES(PERCENI I ox. 0.0". 0.1A. V.W. 0.00. OA °. O.P. U.0 °.. 0.000 O.1)°. O.W. 1)0. VAL ANCIES(:AMOUN I -) V U U U U 0 0 0 0 1 0 U U TENANT ALLOWANCES )6.0001 16.000) m.U06) mm) 16.6001 (6!9('1 16.0001 16.001)) Wocgl1 AeMxo (6.0001 16.(W) 177,1001 EMPLOYEE LODGING 0 MODEL.'OFFICE 0 FREE RENT p 108.000 108,000 I98.6W IOB.U)V IV8.IA0 IOSW6 IU8.000 IU8.(ft W&K'U If..8;VU1 108.1ID0 108691 I296.IXR, DEPOSITS FORFEITFD 0 B kD DEB rS)MOVE OUl S U EnIPLO ) 'EE RENT 0 NET RENTAL INCOME 108.000 108.001) Ios.u00 IUS.OfO 108,000 I0R.000 losmon 109.01 108.060 108.000 T080W I(4.060 1296.W0 ECONOMIC OCCUPANCY(°.Minkel Reno 94.7 °. 94,7.0 94.700 94.7 ". 94.7 '0 94, ?O. 94.70. 94.1. 94.7 ^. 9170 94.7.. 94.7 °. 94.N. ECONOMIC OCCUPANCY ('. Rem Pman,W) 94.70. 94.700 94.100 94.70. 94.70. 94.70. 94.70: 94]0. 94.7 °. 94.7.0 94.7.0 94.7 ^. 94.70. PASSTHROUGHINCOME 1 Esdmele 0 'IOrALPASSTHROUGHINCOME 0 0 0 0 0 0 U U V V U V U GARAGE RENTAL INCOME 4 Garages Rental ocwpeuy 0 Rem Per unit I Eslimsied incmne 0 0 0 0 0 0 0 U U 0 0 0 U TOTAL GARAGE REN TAL INCOME 0 0 0 0 0 0 0 V U V U 0 0 BILLBOARD REN 1 AL INCOME 1 0 TOT AL BILLBOARD RENTAL INCOME 0 0 0 0 0 0 V 0 0 V 0 V 0 NEWPORTSURCHARGE 1 Wa¢r rue 58 58 58 53 58 58 58 58 58 58 58 58 696 TOTAL NEWPORT SURCHARGE 58 58 58 58 58 58 38 58 58 58 58 58 696 OWNEDCOACII REST 3 of 12 rAdd* 6 • Alternative 1 DESCRIPIION, . I Incrnne Space I Income Space TOTAL OWNED COACH RENT COAT 11 RENTAL COSTS i 4 i 6 7 8 9 IO LI 12 13 14 98 MisceRhneuus 101 AL COACH RENTAL COS FS VENDING INCOME 3. Soda nnchine TOTAL VENDING INCOMt LAUNDRY INCOME 2 Estinnn, TOTAL LAUNDRY INCOME VENDING COST OP SALES I COST Of Sales- Vending 'TOT'AL VENDING COST OF SALES INTER EST INCOMI TO'f.1L INTEREST INCOME MISCELLANEOUS MCOME I La(e1NSF charges TOTAL MISCELLANEOUS INCOME I\('OSIE SCHEDL LE I {N 1 :1!B MAR APR MAN JLN it 1. \LG SEP 0('1 \()\' DL( TOTAL U U 0 0 n 0 0 U U U 0 U U 0 0 0 U U U 0 D 0 U U 0 D D 0 0 U D. 0 D. 0 0 0 0 U 0 0 0 U 100 IOU lw 100 400 100 0 6 to() U 0 I W 0 0 I'll, U 0 400 58 58 58 270 58 58 58 58 58 58 58 58 908 B 0 0 0 0 0 0 0 0 0 0 a 0 0 6 7 8 9 IU 19 P_. 0 0 U 0 0 0 0 0 0 0 0 0 118 138 qS 138 133 Lib 138 118 131f 138 138 138 1,65, 138 138 138 138 1318 138 138 Lib 138 138 138 138 1,652 40f 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 Adde& 6 Alternative 1 RESALES SCHEDULE Year l 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 Add* 6 • Alternative 1 F.XPFNSF SCI IFDI'I.E DESCRIPTION JAN FEB MAR AI'R ?IAN 11 N 11'L NI,(I SLP OTT NO% DF.(' TOTAL RISK :MANAGEMENT SALARIES II '17 64 64 43 I Eou,,ie 13'_ 1 ?' L•] 13' 1 ?' LL• 13' 13' I ?' 13> 0, IL 1.581 IOfAL RISK MANACHMENT SAL. 13' b: 1 3n_ 1 ?' Ii' 13' 13' 1 ?' 13' 13' 13' I?? IS81 H.O. PAYROLLAN OR COMP SAL. I Csiimse 86 S6 So R6 S9 Sn fte 146 v+• 8� Ni Bo 603N: T O I,LL 11.0. PAN' ROI:V \N OR COMP. 86 WI 80 80 86 86 86 N6 9i. Sr• 86 So 1.038 OTHER EMPLOYEE EXPENSE. I Tolid, perry 0 Binhdays 3 femn building 0 4 Rmhecue 0 f01 AL 0111 ER E11PLON' EL EXPENSE U 0 u D 0 u U V V 6 V u 0 a01 -K PLAN CON] RIBUTIONS. I Esliuuwe TOTAL 401 -K PLAY CONTRIB. AUTOK10"VC I Gas &oil ' Truck repairs 3 Gulfcmtrepairs 98'. hlittdlaneous TOTAL AUTOMOTIVE WASTE DISPOSAL 1 Trash Pickup 98 Miuellaneous TOTAL WASTE DISPOSAL SUPPLIES I Cleanc%Vchem icals 1 Plmiicipaper 3 Flags 4 Uniforms 5. Lighl bulbs 6 TIa56 cans 98 Miscellaneous TOTAL SUPPLIES LANDSCAPING I Olir a Irccspray ipg Plorrers'gmss .,rV,.ApI anus 3 'free ldm ming 4 Treelanovalaaplaeenem 98 Compusile 5 2 I 5' 5' - 51 5' - 51 5' 5' 5' 5' 6'1 5' 5' 5- 5' 5' 5' S' 52 5' 6.3 II ]I 21 II II •I II 11 II '17 64 64 43 13 13 41 21 43 41 187 64 3' 86 54 54 75 101 S4 '47 11 II II 11 II II II II II II II 11 I 1_9 86 9: 75 II 11 64 II 11 '_i 64 _1 11 SOS 463 .In? J6? 463 463 463 403 463 463 403 46-, 463 5.556 463 463 .463 463 403 463 463 463 463 463 463 463 5.556. 'I ]1 11 ]I 21 '1 ^I •I 'I •I •1 21 '17 '_8 11 .1 43 13 13 41 21 43 41 187 69 3' 75 101 195 195 18 :8 ?8 28 28 'ft '_ft '8 '8 '_8 18 '_B 335 39 37 75 0 165 70 70 177 70 114 9' I'8 9' 70 9_n 9' 1340 0 1,090 1.090 I,p9V 1.090 I:U90 LINO 1,090 I.0%I 1,090 I'M 1,090 1.0% 13.080 6af12 Add* 6 • Alternative 1 EXPENSE SCHEDULE DESCRIPTION JAN FEB \IAR APR MA. JL-N JL 1, AI'(. SlP OCI NOV DEC I'OT U. IOIAL LANDSCAPING 1.090 1.090 LU90 199.) 1.090 1 .090 1.090 1(NU I.W. 1,,n) 19uu LOW 131ol- GARDENING CONTRAC'1S I Emirunmental Carc IOTALGARDEATNGCONTRACIS PARKPAIROL I Patrol One 98 bbscellaneous 1'017ALPARKPATROL OU NED COAC H EXPENSE I Staff housing 2 Clean empds 98 Miscellaneous TOTAL O W NED COACT I EXPENSE 0 0 U U It U U 0 0 G V 0 V V a U V 0 0 U 0 0 0 0 U 0 0 V REPAIRS & MAINI ENANCE U I PlumbinS.'sewer 215 _'I? '_I5 '_15 _15 113 n '_I5 _LI 715 315 315 2_i78 ' Electie r 38 38 38 U 0 0 V 0 U 0 U 0 U U V It U REPAIRS & MAINI ENANCE I PlumbinS.'sewer 215 _'I? '_I5 '_15 _15 113 ]U '_I5 _LI 715 315 315 2_i78 ' Electie r 38 38 38 is i3 38 33 38 18 18 18 38 114 3 T% swoon re,ir 9 9 9 9 9 9 0 9 9 9 9 9 III 4 Fence repair and transf nnn,c h,ds 179 C9 258 5 Calhudic pmlcetipn 101 lot 6 Fire e,luillushcoa 3110 500 7 Tools 150 _'1 !1 '1 21 '_1 _1 '1 '_I '_I `1 '_I 387 8 Gas Meters 40 413 JO N. 40 40 JD 40 40 40 40 40 J74 9 Pedestal sn isers 107 JOB 107 Jlfi 107 Jos 107 JOB 107 laot 107 408 1.093 10 Pcse control 16 16 10 16 Its 16 16 16 I0 16 16 10 193 II First Aid kits C5 115 12 Beach sand J30 J30 13 Shop /storage bin rental 43 4.1 43 4l 43 43 43 43 43 43 J3 J:1 516 1 Resimp and paint pallo Eumimre 0 15 Continue street l ight replacement 161 161 161 101 6JJ 16 Equipmentantal 21 'I 21 _'1 '_1 'I '_I '_1 '_I _'I _1 _I 758 17 Maintenance of Fitness Equiprnmt 0 98 Miscellinenusmwd.l s 107 107 ID7 107 107 107 IU7 107 107 107 107 107 1,189 TO I AL REPAIRS & MAINTENANCE 747 1109 018 919 L338 919 618 11381 1243 919 779 919 11.607 TELEPHONE I Office phoned ong distance 0 _' Papers 0 3 Ansaering'semice 0 J Pay phone 0 5 AT &T cennact 0 6 Radio bx0enes 0 96 Cmnp aw 117 117 117 117 117 117 117 117 117 117 117 117 1.404 TOTAL TELEPHONE IV 117 117 117 117 IU 117 117 111 117 IV 117 1.404 7 OF 12 Add1b 6 0 Alternative 1 EXPENSE SCI IEDOLE DESCRIPTION JAN 1'EB M \R APR A11\1 JL'N .IL'1. Al cl'I' O( 'P NM IN IOIAI. DUES & SI; BSCRIP 1 1055 I Berlin Report 0 J. O. angc ('cunt, Regime, 0 3 Nettpmi Beach Daily Pilot 0 J Cirif". 100 Punk 5 Fide 25 150 150 5 Kelly Blne Book 0 98 Miscellanee. 0 TOT AL DUES $SUBSCRIP FIOSS 250 0 0 0 0 0 0 0 0 0 0. 0 250 OFFICE EXPENSE 1 Posm,e 107 lfr Iu* 107 IIP 107 107 10' 197 In) 107 1(i' 1'89 federal eepesedelherycharges 9 9 I 9 9 9 4 9 9 9 9 9 103 3 Pesiage meter rental I8 IS I% is 18 18 13 18 1$ 18 18 IN 119 J \Pater 19 II II 11 II II II II II II II II 119 5 Coni sappl ies 0 6 8mlionny 107 107 '_IS 7 Business cards 0 8 Copier paper and E al ranrid8es D 9 Copier paper 0 10 Copier maintenance 0 II Title Searehes 21 11 !1 21 86 98 A1itee11ane9us 21 .I 11 !1 21 21 11 '_1 '_1 !1 !I !1 158 MAL OFFICE EXPENSE ten 166 188 1:4 161, 188 166 166 188 166' 295 166 2,299 MISCELLANEOUS EXPENSE I WMA omings 0 ! Gaining losses 0 3 6'MAC9memion 0 98 Miscellaneous 0 TOTAL MISCELLANEOUS EXPENSE 0 0. 0 0 D 0 D 0 0 0 0 0 0 TENANT RELATIONS 1 BinEday cards 43 Ji Holiday parties 3 CM1nsmss party 924 914 J July Jlh patty '_IS '_IS 5 Hofor iferamcelings II 19 11 II II II II 11 II 11 II 11 137 6. Bingo II 11 11 3' 7 Coffee !I _1 21 _I 21 11 21 11 21 21 21 SI 758 98 Miscellaneous 21 11 11 11 '_I !I !1 _'1 _'1 !I '_1 11 258 TOTAL TENANT RELATIONS 108 76 54 54 76 54 280 54 76 54 65 978 1,930 ADVERTISING I Yellm pages !8 !8 lfl 18 '_8 '_8 18 28 28 28 336 98 Miscellaneous 0 8 of 12 . Add* 6 • Alternative 1 E3PE.NSF. SCHEOI LE DESCRIP 110% 1: \N FEn ,11 \R APR MIA) JUN 11'1. U 81P Oct NO\ DE( TOTAL TorALADVER f (SING ]$ 28 18 ?R '8 _$ '8 3R `, '_S M '_8 336 TANESR 11CFNSE.S U '_ Founrain sen-ice I C,eda check s 10 ID 10 10 IU IO 10 IU IO It) 10 10 110 TmcT registration 450 0 a Conditioner ago 3 HCDepei9ting permit 499 98 0.lixel lanenus 499 4 Lnund,A,ttdieg permit U TOTAL POOL $L'PPLIES,REPAIR3 66 U 0 0 U bu 5 Mt,bilehomeregistriti6ns 0 U 0 0 D 0 LEGAL FEES u 6 Mebilehome pmpeny roses I E %iCIiWV1Cnant1e1ated 0 7 Weights & measures meter pennn 0 '- Otherlegal 100 IOU 0 8 Spa:pc91 peen its 100 100 IW IOU 100 100 100 100 1.100 TOTAL LEGAL FEES 100 0 98 NESmllan,.d 69 IOU 100 IW 100 100 100 IUU 106 L'0} AUDIUFA% FES 69 TOTAL TATESF LICFNSES 519 10 IU 509 lit 10 10 70 t0 I0 IU 10 L194 POOL SUPPLIES.REP URS I Pod see ice U '_ Founrain sen-ice 0 3 Repmr!Alainienance Pool s& Spas 0 a Conditioner 0 98 0.lixel lanenus U TOTAL POOL $L'PPLIES,REPAIR3 0 U 0 0 U 0 0 0 U 0 0 D 0 LEGAL FEES I E %iCIiWV1Cnant1e1ated 0 '- Otherlegal 100 IOU 100 100 100 100 IW IOU 100 100 100 100 1.100 TOTAL LEGAL FEES 100 IOU 100 100 IOU 100 IW 100 100 100 IUU 106 L'0} AUDIUFA% FES I Estimate 1300 ;00 I OPAL AUDITA'.4Y PIiF,S 0 0 2,500 U 0 D 0 U 0 0 0 D 'SUO ACCOUNTINGN U IR:ETIDP I Emit,." 1,697 I,697 1.697 1,691. 1697 1.697 1,69] 1.69] 1,09] 1.69] 1.69) 10000 28.6b7 TOTAL ACCTG;BUDGET:DP 1,697 1,69] 1,697 1.097 1.697 1.697 1697 1b97 1,697 1.697 L697 101001I 28,667 OTHER PROFESSIONAL FEES I Renlsumey 1.500' 1,510 98 Mixellanenus 100 100 IN 100. 100 100 IW IW IDu 100 100 100 1,200 TOTAL OTHER PROF. FENS 100 100 100 100 100' 1,600 100 100 100 100 100 100 1.700 COMPU T ER SO PPORF MR] Support Charges 50 50 50 50 50 50 50 50 50 50 50 50 600 TO TAL COMPU T ER SUPPOR T 50 50 50 50 50 50 50 50 50 50 50 50 6lq REGIONAL MANAGEMENT I EsOmate 5U0 500 500 5W 500 500. 50U 500 500 500 500 500 E OW 9 of 12 Add* 6 • Alternative 1 EXPENSE SCNEDL I.L DES('RIPI IOC I \N FEE VAR APR MAP AN 31L \IG SEP Oct 60t' DEC 101 \L TMAL REGIONAL MANAGEMLM 500 50U 510 5bo SOU gO 51+1 kID 31WI 500 sub 500 6.UNt LEGISLATM CONTRIBUTIONS I Camnt. ra Sna Properly Rights _'. W:MA PAC 54' 54' 54' 54' V` 54' 54' 54' 541 54'_ 54' 54'_ p 0 TOFALLEGNI.AFI\'ECONMIT. 0 U U 0 U U 0 U U U U B 0 ("ORP. T F.LEPIIONE EXPENSE 1 Estinmtc 9 9 9 9 9 9 9 9 9 9 9 9 103 IOIALCORP.TELEPIIONE 9 9 9 9. 9 9 9 9 9 9 9 9 101 ORGANIZA 1105 V. DUES I W \LA Ducs LIPS L108 4.105 LEA 4.108 4.103 4.608 4.IUS 4.108 4;108 4.108 4.108 4 I OLV. ORGANIYA I TONAL DUES 0 U. u 0 0 0 u 0 U U 0 0 A CORP. OFFICE ESPEFSF. I Eslimale 11 II 11 It 11 11 It 11 11 11 II II 119 TOT AL CORP. OFFICE EXPENSE 11 IT 11 II 11 11 It 11 IT 11 11 II 119 INSURANCE Eainmle 54-' SL 54' S' 54' 5L' V_ 5 +' 54' >!' 54' 54-1 b.198 TOT AL INSURANCE 54' 54' 54' 54' V` 54' 54' 54' 541 54'_ 54' 54'_ 6,498 REAL ESTATE TAXES 1 Peemnal ptopeny 500 500 1 RE. Tax Estimate 4,108 4.108 L U8 4:108 4:103 4.103 4.108 4.Ia8 .4.11,8 4,108 4,108 4,108 49,31A TOTAL REAL ESTA FE I AXES LIPS L108 4.105 LEA 4.108 4.103 4.608 4.IUS 4.108 4;108 4.108 4.108 49!800 TRAVEL 1 Eslintate '00 2I4 'W IOU 'W 100 'I@ _IOU '0p IOU 'W 200 '40Q 'FO'I'ALTRAVEL '00 1170 'W on 100 700 200 no 200 200 '00 'W '.400 MANAGEMENT FEES 1 5 °60F¢ienues 5:410 5,410 5.410 5430 1.410 5,410 5.4'0 5.410 5A10 '5420 5,410 5.41U 64:970 TOTAL MANAGEMENT FEES 54'0 5,410 5410 5,430 5.410 5,410 54'0 5,410 5410 5,4'0 5,410 5.410 64.970 RENT EXPENSE I City omeopon Beach 87.7.,3 87,737 83,311 83.131 83373 83.377 83.373 83:337 83:373 83.333 87,377 83;131 L000.000 TOTAL RENT. EXPENSE 83.333 87.377 83.733 33.733 83.:133 81177 S3..3J3 R3.333 S3,3J3 8:333 83.333 87.333. Wom TAX AND LICENSE I Mmimmn Tat 8110 BW LLC Fee 3,000 3,000 0 0 3.800 O 0 0 0 0. 0 O 0 U 3.800 10 Of 12 PAYROLLTAXES TOTAL PAYROLL TAXES GROUP HEALTH INSURANCE TOTAL. GROUP HEALTH INSURANCE WORKERS'COMPENSATION INSURANCE TOTAL WORKERS' COMPENSATION INSURANCE LIMIT Add& 6 OSADI 576,200 6.20% MA $130,200 • FUI 57,000 Alternative 1 S7,000 3.60% SALARY SCHEDULE PARTIAL YEAR TOTAL NEXT OTHER (Isl it, ISo EMPLOYEE CURRENT INCREASE: NEXT PAY ANNUAL START STOP SAUTAXES EMPLOYEE POSITION PAY RATE MO. % PAY RATE (PER MO) SALARY IIRSA' K MO MO FTE's '. INS. SALARIES I Maim. And Asst Mana6er 2,570.00 1 5.0. 2,646.00 31 300 411.0 L(!0 37.980 2 1 3.0 0.00 0 40.0 1.00 0 3 1 3.0 0.00 0 40.0 1.01) 0 4 1 3.0 0.00 0 40.0 1.00 0 5 0.0 8.00 n 0,00 0 TOTAL SALARIES 31,400 4.00 37,980 PAYROLLTAXES TOTAL PAYROLL TAXES GROUP HEALTH INSURANCE TOTAL. GROUP HEALTH INSURANCE WORKERS'COMPENSATION INSURANCE TOTAL WORKERS' COMPENSATION INSURANCE AT .$150 Per month pa FTE WORK LIMIT % OSADI 576,200 6.20% MA $130,200 1.45% FUI 57,000 0.806 SUI S7,000 3.60% AT .$150 Per month pa FTE WORK % OFFICE. 0.38° MAINT. 4.54% SALES 0.24% 11 Of 12 2,880 1,800 1,440 Ad4k 6 Alternative 1 '('API I AI. PIPROGFSIEN IS ID -0Ib 110 11:4, PNI ACCO.NT DESCRIPIIOA JAN FEB 1IAR APR IIAU A,N R1. .ALG SET OCT %O� DEC TOIAL RFIIARIS 143111121 DEPRECIABLE INIPRO%E .NIENTS I J 0 1 11 � II 0 I to x II I I 11 I'- 0 14 n ESllmi[P >,IIU11 21111{1 2.UIU !JIU11 '2,111x1 !111111 jllllll 2�Nxr �;U�N) !IIUII _�N111 21X111 !1,141X1 14501121 TOTAI,DVRECIABLFPIPROV6\IENIS 2,,1 11111 2,1111 !.(" 2j1110 2jM 1]11111 21)1X1 1101 !INNI. jnlxl ?.Nxl 24 xXl 12 OF 12 • Add *ivm 7 Alternative 2 Footnotes Year I Year 2 Year 3 Year 4 ADXNDUM q • Year 5 Year 6 Year 7 )'ear 8 Ycar 9 Year 10 DESCRIPTION Projection Projection Projection Pm9ection Pmjection Projectivn Projection Pnjection Projection Projection 1.3 Total Income 1,299,656 1,403,649 1.499,042 1,529,023 1,559,603 1,590,795 1,621611 1,655,063 1,688,165 1,721.928 2.4 Home Office Expense (170,950) (179.439) (183,028) (186.689) (190,422) (194.231) (198.11.5) (202.078) (206.119) (210.242) 2.5 Manager Expense (99,443) (104.332) (106,4 19) (108.547) (110,718) (112.932) (115,191) (117,495) (119,845) (122,241) Total Expenses (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 1,119,878 12 09,595 1,233,787 1,258.463 1283,632 1.309305 1335A91 1.362.201 1389.445 Capital Improvements (24,000) (24,480) (24,970) (25,469) (25.978) (26,498) (27,023) (27,568) (28.120) (28.682) Interest (33320) (27.100) (20,290) (12.830) (4.67U) Principal (66,320) (72.350) (79380) (86,790) (94,950) Capital/Utility Improvement Reserve (5263) (42.661) (60,344) (61.551) (62,782) (64,038) (65.319) (66,625) (67,953) (69,317) Base Rent to City 1,000,000 1,052,737 1,124,281 1.146,767 1,169,702 1,193.096 1.216:953 1,241,298 1.266.123 1.291 A46 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.(158.263 1,073.972 1,097.495 1.121.438 1,245.479 1,270388 1295.796 1.321.712 Footnotes: Year One Monthly Rental Rates: Waterfront$2, 300 /Waterview$I,SOOITmnis Vicv$1,600. Rate: are adjusted by CPl each year, assmrcd to be 2% for this pro fomta. Based upon historical operations of 6larina Parkas appnpriate and Bayside Village as appropriate Adjusled by CPI each year. assumed to be 2% for this pro fomta. Year 2 forward revenue incrmse from 12 nevi hontesite on por(iou of cunntt tennis court land at S 1,000 par space(month. adjusted by 2% CPI each year. One spaceretted each oxmth of year 2. Variable Home Office Expenses relative to 12 new spaces are management fees, real estate taxes and insurance Variable Manager Expenses relative to 12 rim spaces are repairs and suppics and utilities $1.000,000 ninimum plus CPI each year, assumed to be 2 %. or 75 %of Total Income, whichever is greater, 1of14 DISCRIP110N Pminlwrl Ui S Pgmlial Renl t3.1 111111 D¢pmel RmlR4me 1 Vaaanire n Temnl Allwanm 72aw l Euiplmtt UIM, o Fm Rijn Plakelim Ne DAlable Rml 1,81ndMlu QinM Cinch Rml n (oxb Rv,cll C,mvnissinrs n Caa[h Rmul CMls II Dgrrsls Ftr Ri1M NIu Dad Debts Alm 'e Oue n Empl"Renl II T.1.1 Rmlal ln,V -- 1:�4M1J11111 Gvape Rmnk 11 Rlllbwrd Rmial nu Tmal Oihtr Rndal Income U Coazb mrm[a. $ala as I 5 I pees S I Sal"posm C _ Im'mla, Adrea 5 ng Mts Olhn Sales E.,n Floainp lnleaal ldal Immlpl. Sala Rnale Canmisswns Salwnspn Salaries Salapasnn fomldlssmis Resale Adveniaing Other Sala Eapeme. Total Resale W., Total Coach Sal¢ Raald Vm,linglA'ume Ia11Mry 111[pme Trial. VelJiny In[mne Nmyorl Sula'har�e Inlelal I..Pe Mis[ellanmus lneme Total 0,W, lnrome Tool 1. n 0 0 II II II MNI 911, LJ61 rvin p 2J49 1.`yJJttfi A 7 • Alternative SOMARV DDUE OFFICE EXPENSE SL]I.\IARY ACCI DES( 'Rip r io...N Plakelim ]1X.11121 I.ivl Fm I.N't illfi21121 A14 lox n _ 0a01 .Aaoanlille Bud,, DIP !x.W :nbal'rl OIIin Pmfarnmal Fees J. ?On. N)"Ol Conryum S..Plr NIu Snnn1i21 Regimaldlanagntlml nimd S16 7f4I Englgre DclItsl l pasm1h Iw 0121 L14.11alire Cm eiAlliD6 II .11111:1 C., TelmbotleErpelKe 111, yln!1'_I Olc amional and nu usLl'I CMpnOniae Fxps c U+ foul Pminsionn Fm 41.1x2 91'IICI Insuelnae 6A" 511!121 .Absm bM lnsnnu[e LOSSn 0 A 2uN1 Inlnesl- DelerrM n <1lbldl halal !.Jun 51¢61!1 Ltase Frpmm- %PER '1 I 1619 it AlamaInmbFm n :,0'. M I!eo 517M21 Taa69 'Limnsas 1 %iNl it rnn21 Inal(hhn F%pmSe 117,461 nm21 MINI T,,al l lane.OlRCe Expense 171 1.1111 Olbn Fit, M310 F.rp. nu tlh[e Rent - Ciro of Nnr pP I I JNa1.Ik1U 2 of 14 DI;S(RIPFIOn I.11-i «lion 011ice Salaiia . \L inlmanre Solari¢ II:eUI Pau nl Salmi, O Risk Nlangnnenl Salarnn 1.111 110 11 all U n A('enip Sal Ir:i fuel 14A Ps roll lases -sn G' MP lns a MINI W"Ans (!lmp IIKUIan[2 I,4411 Olbn Fit, M310 F.rp. u N)IK plan( ilnllibulums TmA Paaoll. Tasn 6J43 Aulnnilvile illi Supplix 1.3411 LmabmPio_ I1n11 6W .m. i1 Pink Pmml 11 P M Cw.h F probe 1 RT &VI marce Il;fin' Pllmb t, R,av,l u Prot. \1 iln C van n PM Rrymrs 1. 1 Mal Rgrairs A Supplis 11,01Xz I,"ne Cpmnnuni[mials 1.414 Dua S'Sllb,i6panlls .. OIRm F.rMlse& POmaue 1:11 :: \Iiscel6 tRms E.apma 0 Tldinill & Smlmals tt TdaI ORePIP. J.,I, Tewnl ROw. LvUI ATmisinu Un 1 at.& Lw. 1, IV4 To1a1(hbn Eapmse ;.Ml Elmlie bJial RnlilbursM Elxnc II Ele[rrie sat.,.[ n.Nnl Gas 12.Nn R—,buuM.G. II Gas Soblmdl 'AItI Wain n Sm R foul vwifis IA,i%II fool %u.1. Erpnlse 99.141 II.1r. A* 7 Alternative 9 EMPLOP EE LODGING INCOME SCHEDULE 4 \ -Fm4a1 11ODEL.OFFICE 1 4'14 P1 DESCRIPTION ill FEB MAR APR MAY 1LN IL'1. iLG 5EP Ot I �Oy DEC WI IL RE\1 \R" TOTM. LNITS - 11 er I, 11 IIALIXPI III %I!NI 111X;4!1 Illy 1191 IIIi1Xl1 %NINA, 14'11)X1! D IIYI I v011 L'•S.o. DEPO51 t FORTE I I ED Nn1!nL94 �— TOT SQUARE FEET I EMPLOSEE RENT OauFfi9nl n NET RENTAL INCOME 11M.121I 00KIM) IUN,VYI IS RKT l R, IUU IYNI IIM; IIYI 14%.0X1 IIIX.IIIYI IIW,<XXi NG.IYAI IUit,VFl KIRW. I."M"p ECONONIIC OCQPANL'1' 1-5 hlarW Rmn w.r. W.i 9!]':. W.I °.. I mm[ "14 AI\RNEI RENT II41NX1 114,1M 114.101 Ill.." 114011 11I.nIXI HVIAI 114!910 IIl1Y4 IILPnI 111201 1111111 1.ltXI'll Na, H.uts RENT PERS.F.l II IN1 11.1111 II IXI 11.141 II!YI II.IYI 11.01 11.1%1 11.111 11.101 11111 11!X1 LEASE D %IN. LOSSI 4 EAinBle R RENT POI ENT LY. II1.PX1 H4,IIXI I14.11Tl II LIXFI III.IVN 111111 1141011 II I.PYI IIUXFl 111140 111.".1 III!YA LY.%!Ya1 �Adv[ml NO Vl (KEN I PER S.F., 4111 111X, 41X1 11.11, 4111 LLMl R1H1 1110) 11.111 ILVf 1VXI @NI 111%1 \l 4 Llan$a \\.11m.1"v. VACANCIES"" S 4 I , 11 ,I 11 y 9 U 0 U 1. 11 Tram[ \m +' VACANCIES LPERCEM, II I1% UII':. IT 1'A 4u', ILn".. ojll 11,11'1 21111 1110.. 411" m}v yrYe Na1'H.yI4n %ACANC IE S I ll.IOLNT I 11 4 IT 11 IT IT IT 4 9 U 11 11 I TOIAG. AGERENTAINCUAIE TENANT ALO \ \IWC£S Ifi UUI IfiNXII I6.11X10 INYg1 1, MAUI 11.1101 111,0X, 11,1111 K."Y" Ih,np1 1yvg1 'W"ll 01."11 EMPLOP EE LODGING I 11ODEL.OFFICE 1 FREE RENT' U IIIX,IXXI 14X.1 %XI 111X1 %NI IIALIXPI III %I!NI 111X;4!1 Illy 1191 IIIi1Xl1 %NINA, 14'11)X1! D IIYI I v011 L'•S.o. DEPO51 t FORTE I I ED I EMPLOSEE RENT n NET RENTAL INCOME 11M.121I 00KIM) IUN,VYI 1.0.11X1 IUU IYNI IIM; IIYI 14%.0X1 IIIX.IIIYI IIW,<XXi NG.IYAI IUit,VFl KIRW. I."M"p ECONONIIC OCQPANL'1' 1-5 hlarW Rmn w.r. W.i 9!]':. W.I °.. 4l % 91) l^. 9l y {PN Yl 1': 94.1 °. WP. 9A "4 W1 '. ECONOMIC OCCUPANCY M Rml PmnluL 94.1X: W.P.I. 9471. Ill 1-:. 94]", 11)4,7': 94.1 ". 91)7".1 9yPi. 91,", WS'. 41):'.. 911' PASSTHROMMINCOFIE v 4 EAinBle 11 TOTAL P.SSSTHROLGH INCOME U U U IT fl IT II U 11 U U {4 ll OARAGERCNT.A INCOME 4 Llan$a Rmlal Omplm U Rml pm wil I Olanne\11MVIR D U IT II U IT 4 IT 11 11 II TOIAG. AGERENTAINCUAIE 11 , U , p 0 II IT 11 U 4 B BILLBO WD REN I A- INL'DME I TOLALBILLBOARDRENIU.INCW4E U U U II U U 4 U 11 U U IT 4 NEWPORT SURCHARGE T \\'alaR $% sy [X SX 5F S. SN iN S% iN Sk SN NM $I IM1VNIP{i0.mPin11i1f TOTAL NE\\PORT SURCHARGE, 11 [% [N 5N SS 51 [X S. !% S. 59 S. fi9fi OWNEDCOVII RENT I INIlnRSpI 1. I Ircnne Spl[e. 4 IOT.LL MINED CG 4 U 11 4 '0 IT II 0 IT 4 11 4 4 COACH RENTAL COSTS 1 2 IT 4 11 ! u e u 1 9 8 0 30f 14 9 Ihmilak IT .11 %1 lWIT = XI 1` I:iXnt U 401 4 '141 4 I.XIYI U I!Itl1 A* ASLBCnOCSvB NCUNIE S('l(EDLLE Ip.Por +p RZAA P \1 DESCRIPTION )AN FEB N \R APR 11 O' JUN JLL AF(; SEP 0(1 101 01C it" V. RE.4ARAS 0 n In p IT 1 It p Ia p I`llsmlbU Io Lti L coAcfNRENTAL p CD$R. \'ENDING INCOME I SN41msM1ilie 10) PXI 1`XI UP, Uni TOTAL VENDING NCOMi ITT II `I IM II II I.N 11 O Im1 11 n u111 LAUNDM INCOME EsN1m1X !x SR m FX 11 SM yX }s 5.1 1`SV mr.,N,t w'Xi. 10TAL LAUNDRY INCOMC !M SR fN 3:11 M 5. SY !] Yn fl!p o-aSM1'S.!II IOnirt M' VENDING COST OF S.Y.ES I ('alofmhN N 11 TOE4CENDINGCOSt DF S. ES 0 4 0 n 11 U IF 0 n n '1 U INTEREST INCOME 1 } 1 J t fi i x p 1U 1) IS p 0 T01.4L INTEREST INCOME 0 0 4 11 0 0 11 0 p V U V n MISCELL.NE.OUS INCOME. I L.NNST'0urgn 13X ON 08 1!R I}+ up IIX 11 Itrc 0.1 PIT "A 1,451 101+ All SCE LL ANEOLS INCOME 133 138 UN P% 1!x Ip Vx 0. ISX ON ISX U% LNSS 4 0f 14 Add *um 7 Alternative 2 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 # of Sales Waterfront 3 2 1 1 1 1 1 1 1 1 Waterview 3 2 2 1 1 1 1 1 1 1 Tennis View 2 2 1 1 1 1 1 1 1 1 New Homesites 0 0 1 1 1 1 1 1 1 1 Sales Prices: Waterfont 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 Waterview Tennis View No View Total Resales %to City Revenue to City 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 90,000 91,800 93,636 95,509 97,419 99,367 101,355 103,382 1,160,000 856,800 672;624 537,507 548,258 559,223 570,407 581,815 593,452 605,321 5% 5% 5'% 5% 5% 5% 5% 5% 5% 5% 58,000 42,840 33,631 26,875 27,413 27,961 28,520 29,091 29,673 30,266 5of14 AA. 7 • Alternative 2 F.SP4NSF. SCHEDULE OTSCRIPTION JAN FhB MAR APR ALAI" JUN JI.L ALG SEP OCI N05 DEC TOTAL RISK MANAGEMENT SALARIES I F.slimale I32 132 U` 111 131 U' q` 13 13' 13` 13' I3' 1.581 I OTAL RISK AI.ANAGF.SIFS f SAL. 133 133 13' 1, 1?` Il• 112 111 1 132 I32 1.531 11.0. PAYROLLJWORK CONIP SAL. I Eslimaa 86 86 86 86 86 86 86 So 86 86 86 86 1 -033 I Ol AL 11.0. PAN ROLLAVORKCOMP. 86 86 86 86 86 86 86 86 56 S6 86 86. 1.038 OTHER EMPLOYEE EXPENSE I Holiday party 0 ' Bu Ordays 0 3 Tean building 0 4 Barbecue 0 1 OTAI. OTHER EMPLOYEE EXPENSE 0 0 0 0 0 0 0 0 n 0 0 0 0 401 -K PLAN CONTRIBUTIONS . I Eslimale i' S' i` is 5' ;1 i_ 57 - 5' 57 621 I DIAL 401 -K PLAN CONTRIB. 5' 53 5` 5` 53 i` - i'_ C 57 57 57 611 AUTOMOTIVE r ' Truck repairs 64 64 3 Got I can mpails 86 54 54 54 '_47 98 M;e,cllane0us II II II 11 II II II II II II II II 1 29 TOTAL AUTOMOTIVE 86 97 75 11 '_1 64 11 II '1 64 71 11 505 WAS I E DISPOSAL 1 Trash Pickup 461 461 463 463 465 40 463 4ti3 4e3 463 463 46? 5.556 99 Miscellaneous 0 TOUT. WASTE DISPOSAL 461 461 463 463 463 463 463 4e3 4001 463 463 461 5.556 SUPPLIES 1 Cleenersehenficals '1 '_1 31 '1 _1 1_1 21 'I 21 71 '1 ?I '47 2 Plastic/Paper 21 J. _1 '1 '_I 41 43 41 43 11 43 43 387 3 Flags 69 33 101 4 UnifOnns 195 195 5 Light bulbs 28 28 '8 ?8 38 '_8 '8 11 28 18 '_8 18 335 6 Trish cans 39 37 75 98 Miscellaneous D TOT'. A]. SUPPLI FS 165 7D 70 111 70 IV 9? 11_8 9? 70 9' 9' 1 3JO LANDSCAPING 1 Olk a free spray ine 0 ? FIO..e�igsass seed/s0d/pl ants 6 1 Trrerrimming 0 4 Tree removallreplacnnenf 0 98 Composite 1,090 1.090 1.090 1.090 1,090 Low 1.090 1.090 1.090 1,090 1.090 1,090 UASo TOTAL LANDSCAPING 11090 11090 11090 IMo 11090 1,090 1,090 1.090 1,090 1.09D 1,040 Low 131080 6 of 14 Ad& 7 • Alternative 2 EXPENSE SCHEDULE DESCRIPTION JAS PEI1 11 NR APR 61Ati JUN JCL AIG SCP OCT NOV DEC TOTAL GARDENING CONTRACTS I Enciranmenml Care 0 TOTALGARUENINGCONTRACIS 0 0. 0 0 0 0 0 0 0 0 0 0 0 PARK PATROL 1 Patent OnP 0 98 MRCPHaneOUS 0 TOTAL PARK PATROL 0 0 0 0 0 U 0 0 0 0 {i 0 0 OWNED COACH EXPENSE I Stall hoosing 0 _ Clean cmpels 0 98 Miscellaneous 0 IOrAL OWNED( OACH EXPENSE 0 0 0 0 0 0 0 0 0 0 0 0 0 REPAIRS &MAINTENANCE I Plumbinglsewer 215 215 211 215 315 215 315 1I5 115 215 115 215 '.578 '_ Elect is 38 38 38 JS 38 38 38 38 i8 38 ?8 38 414 3 TV antenna repair, 9 9 9 9 9 9 9 9 9 9 0 9 111 4 Fence repair and nansf unner sheds 129 1 19 358 5 Cathodic poolection 301 301 6 Fire extinguishers 50p 500 7 Tools 150 31 21 'I ?I ?1 '_1 ?I '_1 31 21 '_1 387 8 Gas Mete's 40 J0 40 40 40 40 40 40 40 40 40 40 474 9 Pedestal Yriurs 107 403 107 403 107 408 107 -1011 107 418 107 408 3.093 ID Pest a,ternl 16 I6 16 16 16 Ifi 16 16 16 16 ID In 193 11 Flom Aid kits 1 15 113 13 Beach sand 430 43D 13 Shoplslnrag a bin renal 43 43 J? 43 Ji 43 43 43. 43 43 43 43 516 14 Resnap and pdinl patio f umnum 0 15 Conlinue street l ighl.repiaccnant 161 161 161 161 644 16 Equip nenl rental 21 ?1 21 21 21 21 ?I ?I ?I ?I 21 21 138 17 Maintenance of Fitness Equipll ent 0 98 hliuellaneousM1naenals 107 107 107 ID7 107 107 107 107 107 107 107 107 1.289 3'OTAL REPAIRS .@ MAINTENANCE 747 1.109 ti18 919 1338 919 618 1.381 1_43 919 779 919 11607 TELEPHONE. I OITce phonepbng distance 0 2 Pagers 0 3 Answering c,6a, 0 4 Pay phone 0 5 AT &T connan 0 6 Radio baneries 0 98 Composite 117 117 117 117 117 117 117 111 117 117 117 117 1.407 TOTAL TELEPHONE. 117 117 117 117 111 117 117 117 Ill 117 117 117 1,404 7 of 14 0 DESCRIPI ION DU ES & SCBSCRIP r IONS I Berlin Repori 2 Orange County Register J Norpm1 Beach Daily Pilot 1 Civil codes 5 Title 25 6 Kelly Blue Boo! 98 Miscellaneous TOTAL DUES & SOBSCRIRI IONS OFFICE EXPENSE I Pow, '_ Rdeml e\,,Wdel R,,,ehaegei 3 Poaxpe mekrrcmml J Wake 5 Computer suppl ies 6 Smtionery 7 Business cards 8 Copier paper and P. al Cartridges 9 Copier papet 10 Copier moim,mm e II title Searches 98 Aliseellaneous 1 OI AL OFFICE EXPENSE Add* 7 Alternative 2 EXPENSGSCIIEDULE BIAS JUN JCL AL Ci SEP OC1 NOV 106 1511 • DEC IOIAL U D 0 I00 ISU 0 0 250' U 0 U U 0 6 0 0 0 0 U _ ^5U 197 107 107 107 107 IW 107 I!1' to- 197 101 103 1289. 9 9 9 9 9 9 9 9 9 9 9 9 103 18 IB IS is 18 18 18 IS 18 IS IS IS 219 II 11 11' 11 II II 11 II 11 11 It 11 1_19 11 it II 11 II 11 11 11. II II II II 0 II I07 11 107 215 21 21 21 21 21 _'1 21 _'I 21 21 _'I 21 U 21 21 21 71 21 21 21 21 '1 '1 61 21 0 0 108 76 A 54 76 54 380 54 76 54 65 978 0 '_I 21 21 21 86 21 _'1 _'1 '_1 _'1 _I _'I '_I 233 166 166 188 2_7J 166 188 166 166 188 166 1_95 Ibb 2, 299 MISCELLANEOUS EXPENSE I W'MAlneering5 0 '_ Training classes 0 J W'MA Canaeutinn 0 98 Misccllaneaus 0 TOTAL MISCELLANEOUS EXPENSE 0 0 0 0 0 0 0 0 0 0 0 0 0 7 ENANI' RELATIONS I Binhdoy cards ' Holiday parries 3 CAriouas yany J July Ali parry 5 Homa.rnersmeeli68s 6 Bingo 7 Coffee 98 6lisoellaneeus 'TOTAL TENANT RELATIONS ADVERTISING I Yellow edges 98 Miscellaneous TOTAL ADVER TISING Ji {3 _'1 JI 64 9'_J 9_'4 _I5 215 11 it II 11 II 11 11 11. II II II II 137 II 11 11 ' 21 21 21 21 21 _'1 21 _'I 21 21 _'I 21 'S8 21 21 21 71 21 21 21 21 '1 '1 61 21 258 108 76 A 54 76 54 380 54 76 54 65 978 1,930 28 28 28 28 '_8 28 28 28 28 28 28 28 336 0 28 3R 28 28. '_8 _'a 28 28 28 28. '_e 28 336 8 of 14 • A 7 Alternative 2 EXPENSE SCI IEU01 F DESCRIPTION JAN FEB. >I. \R APR AIAN 11 -N it 1. %1 G Slip O['I %Ul DEC 'to 1L I AXES& LICENSES I Creditslielki 10. IO 10 10 10 10 10 10 10 10 I0 10 116 1 liurk. lrgislralton 450 450 3 1ICD opeiming permit 499 399 4 Laundry:. ending pencil M bit 5 Mobilehnmempsmilwns 0 6 Mobilehumepropeny u,,es 0 7 Weights S measures m etei Penn it 0 8 Spipoul penrnts 0 98 Aliscellmtenus 69 69 I DIAL TAXES & LICENSES 579 Ifr 10 569 10 10 10 TD In 10 10. 10. 1.194 POOL SOPPLIESREPAIRS 1 Pool sen'ice 0 _ FdunWitt sec ice 0 3 Repair Alaintenance Pool a@ SPas 0 4 C6n0itmecr 0 98 Miscellaneous 0 101. SL POOL.SCPLI IyS,RE PA IRS 0 0 0 0 0 0 0 0 0 0 0 0 0 LEGAL FEES 1 E,ictienyfcnmtrelated 0 7 Other legal 100 100. 100 100 100 IOU 100. 1!0 Ito Ito 100 IOU I.-IN TOTAL LEGAL FEES 100 100 100 IOU 100 100 100 100 IOU Iw IW 100 Law AUDI VPAS FES I Estimate '_300 2.500 TOTAL AUDIMAC FEES 0 0 1560 0 0 0 D 0 0 '0 0 /l 2.500 ACCOUNFING,BUDGEVDP I Estimme Ib97 1.697 Ib97 1.697 1.697 1.697 11697 1.697 1.097 1,691 1.69: IO.IXW 28.667 TOFAL.ACCTG,BUDGET,DP 1.697 1.697 Ib97 L697 L697 1,697 1.697 1a97 1.697 Lt,97 1.697 WOO '_ &667 OTHER PROFESSION.%]. FEES I Rent sun ey 1,500 1,500 98 Miscellaneous 100 100 100 100 100 100 100 100 IOU IW IW 100 1.200 TO TAL onIE R PROF.. FE ES 100 10O IW IOU 100 1,600 100 100 100 100 100 IOU _700 COAIPU I ER SUPPORI hlRI Suppoil Char, es 50 50 50 5U 50 SD 50 5P 50 5D SU 50 uk. TO TAIL COMPUT ER SUPPOR I 50 50 50 50 5U 50 50 50 50 >U 50 50 2,01, REGIONAL MANAGEMENr I Estimate 500 500 5X0 500 s00 500 500 50D 500 5W 500 500 6.000 TOTAL REGIONAL MANAGEMENT 500 500 500 500 500 500 5OU 500 SID 500 50D 500 61M 9 of 14 Add& 7 • Alternative 2 EXPENSE SCI EMILY JAN FLD MAIL APR :1L\Y it 31L ALG SLF 1301 NOV DEC IO1AL LEGISLA II VE CONTRIBG I IONS I Conun. I.Sac a hnperty Riph,s W':MA PAC 0 0 LOCAL LEGISLATIVE CONTRIB. 0 0 0 0 0 0 9 V 0 0 0 0 0 fORP, 1 ELEPIIONE PXPENSL 1 Esturnale 9 9 9 9 9 9 Y 9 9 9 9 9 103. TOTAL CORP. TELE,PTONE 9 9 9 9 9 9 9 9 9 Y 9 9 103 ORG.ANIZA I'.IONAL DUES I WMA Dues 0 TOTAL ORGANIZATIONAL DUES 0 0 0 0 0 0 0 0 0 0 0 6 0 CORP.OFEICE EXPENSE I Esrilnale II It II II IT 11 II II It II II 11 179 I C I AL CORP.OFFICE EXPENSE 11 It 11 11 11 11 11 11 11 11 11 11 119 INSURANCE 1 Bturuie 54' 1342 54_ 54, 54! 54' 54_ 543 U_ 54' 54] 547 6.498 TOTAL INSURANCE 541 54, 541 54' 54: 54C 54_ 5402' 54_ 54: 54 ^_ 541 6.498 REAL ESTATE TAXES I Personal property ! RE Ia, Eslinnate 4,108 4.108 4,108 4,1 GA 4.168 4.10$ 500 -TWA 4,108 4.108 4.108 1,103 1108 501, 493410 TOTAL REA L E S TAT G T AYES 4.108 4.IU8 4.IUS 4.1(13 4.109 4.108 4.6033 4.108 4.108 4.108 4.108 4.108 49,800 TRAVEL I Bslimme _DO lnll luo ]ryU 100 100 3" 100 _nil _OU 200 `W _,400 TOTALTRAVEL _00 100 100 '200 100 _00 700 ]W 300 ]00 .00 10 'AIX MANAGEMENT' FEES I 5'o9herenues 5110 5,410 5.410 5430 541U 5.410 5,4_0 5.410 5.410 5.420 5.410 5,410 64.970 TOTALMANAGEAIFNT FEES 5.4 20 5.410 .5.410 5.430 5.410 5330 5,4]0 5.410 \410 5.4'0 5,410 5.410 64.970 RENT EXPENSE I C4,.fNeupon Beach 83'333 83,133 83333 83;333 83.333 83.333 83333 83.333 93.333 33.333 83,333 83.331 1.000.000 TOTAL RENT EXPENSE. 83.333 83:333 83,333 83.333 83.333 83333 83_133 83,333 83333 83.333 83,333 8.333 1,000,000 TAX AND LICENSE: I Minimwn Tap ? LL(' Fee 800 3;000 Soo 3,000 0 0 3.800 0 0 0 0 6' 0 0 U o RS00 10 of 14 AdA 7 Alternative 2 SALAR}'SCHEDULE PAYROLLTAXES LIMIT % OSADI PARTIAL YEAR 6.20% TOTAL MA NEXT 1.45% OTHER FUI $7.000 (Istlo Is0 EMPLOYEE $7.000 CURRENT INCREASE: NEXT PAY .ANNUAL START STOP SAUTAXES EMPLOYEE POSITION PAY RATE NIO. % PAY RATE (PER MO) SALARY HRSIWK NIO MO FTE's k INS. I Mainz. And Asst. Manager 1520.00 1 5.0 2,646.00 % .1L800 40.0 OFFICE 1.00 37.980 2 1 3.0 0.00 0 40.0 0.24% 1.00 0 3 1 30 0.00 (1 4u.0 1.00 0 4 1 31) 0.00 0 40.0 1.00 0 5 0.0 8.00 0 0.00 0 TOTAL SALARIES 3.1.800 4.00 37;980 PAYROLLTAXES LIMIT % OSADI $76300 6.20% MA $130200 1.45% FUI $7.000 0.80% SUI $7.000 3.60% TOTAL PAYROLL TAXES GROUP HEALTH INSURANCE AT $1.50 Per month per FTE TOTAL GROUP HEALTH INSURANCE WORK ERS'COM PEN SATION INSURANCE WORK % OFFICE 0:38% MAINT. 4.54% SALES 0.24% TOTAL WORKERS' COMPENSATION INSURANCE 11 of 14 2.880 1,800 1,440 • A* T Alternative 2 CCAPITALIMPROWMPNIS .11-rd e In U PM ACCOUNT DLSCRIPIIOA JA] FEB SL {R AP0. \L \1' /lv IlL ALG \PP UCI MW DEr TOM REMAM 6411)IL`1 DEPRECIABIEIMPRO\LMLNTS I p A ! e t q t e 1 n N e q y I IT U e e U n U p Esliinse 2.1.X1 !,11110 lnlnr 2j, !Ui N =.IxX• !, {p l !JXIr NIIr 'Jnln •JrNNI IJNr0J1 TOT Al. DEPRECI, \BLE IAIPROCE. \IEi.1S ],IIUrI !,u]0 !!11111 !lrllll !/X111 :!IIMr •n1Xl !,INNI ±nln l,luxr LNrll ! "Il pp- !J q19 12 of 14 Ad& 7 • AlYernaYive 2 LOAN DESCRIPTIO DESCRIPTION JAN EEU .MAR DEB I SCIII..DVLP. APR .NAT JLN 111 .%10 SEP M, I' NOV DEL' O) Te6 00 01:14 P31 TOTAL Communlly Cnlpainn Pl. 400.000 PRINCIPAL - M, Annti,. y Loan yl 0 0 Initial Principal $400.00000 0 Amoniialian Year 5 I06LL PRINCIPAL. 0 0 0 0 0 0 0 0 '0 0 0 0 0 Inlera9l Rae DEFER RED INI EREST Loan =1 0 Note: Paymemsbegiminyear IOTALDEFF.RREDINT 0 0 0 0 0 0 0 0 0 0 0 0 0 n. o of This F.reeaa INTEREST' EXPENSE I..a e I 0 0 0 0 TOTAL INTEREST CRP. 0 0 0 0 0 0 0 u 0 0 0 0 0 13 of 14 • Ad& 7 Alternative 2 Teuuis C'uulls WIand lanieslesf12I Constouclinn Costs 'tennis Coo Is p LA—. Nicer Mid utol B4 Concrele, Poses Net, Sniping 19,500 27.500 21,00(1 NlarshalI & Swi f Seel co 67 Page 6 Lighting 6,000 3.01)0 7,000 Alac:hall & Sreili Seelion 67 ['age 6 Fencing 4.750 7.000 5,87s M1larllall& S,,WI Seeliuu 67 Pa_ee6 Subtotal 29250 4],500 15.,$75 •Local Cos( Mulliplier 1.17 34,223 44.725 41.974 Marshall& S, ill Setlinit 99. Page If urrem ('a sl Multiplier to 6 99 1.05 15,933 52,2 1 f 44.072 Mastill I & S,ai 11 Sec l it 99 Page 3. - Assunud Cost M uliip Her 7.99. 1 W. 1.01 16.293 52.731 44.513' 9.554 2 -Coin Diseuunll5 °.'0l Calculated 'Cost per Coast 0 of Courts Total Calculated Cost of Tennis Goals llolnesites Engineering Grading Street Pa�'iug Patios Walks Sewer Water [ledde Buildings Misc. Water Fees:Meleraod conneetion Sewer Fees Subtotal 9.oeal Cost Multiplier 'Current Cost Multiplier to 6;99 - Assumed Cost Multiplier 7.99.1.00 # or I lontesites Total Calculated Cost of Ilbntesites 011ier Casts: D,in. it ion, Bent oeal of I'xisliag Courts and M iseel lancous 0.05 (1.815) (2.637) 12.2161 Marshall & So ifl Section 67 Page 6 14.479 50.097 42.138 4 4 4 137911 200187 Ih9, LSU Marshall & Su in "Ciovd" Park 5 96 705. nlardiall & Sw in Seetwo 63 Page 3 645' Marshall & Sa in Section 63 Pa-e 3 1.0411 Marshall & Sw in Section 63 rage 3 795 Marshall &Swill Section 63 Page 3. 755 Marshall & Sw ifl Seelion 63 Page 3 690 Marshall &Su ill Section 63 Page 3. 1.120 Marshall & So ift Section 03 Passe 1 0 No additional buildings projected 825 Marital & Swin Section 63 Page 260 City of Newport Beach 455 City fNewporl Bench 7,700 1.17 9.009 Mlarshall & S. if, Section 99 Page 6 Los 9.459 NI., shut & S,, in Section 99 Page 3 1.01 9.554 12 1'14,649 00,000 Estinta(c I oral Costs 78 ?,799 Before Bounding 14 of 14 • AODCAI )L)q 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, /rdenIt g few s e res • (:a:::) 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, 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 CA IUSI.l5 P1 RI 0.\1. P.O. II0\ 591.19. MI\NF'11101..1 }. III \V 1: iI1T \. 1 :5\ 3.b459- 82.5.4 T1:1.: ;612} 212.J:100 I' A.A.: 1612 ^12.3:1 :i0 I'`'I'ERN Ii 0 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-h01.117 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. ... /continued 1cORLD 1­1E.AUQL 16TERS: C%lfl,SON VA14K %O A1'. P.O. ROX 59159. 111NA EA YO I.I S. MINNESor, %. USA 554..59 -82114 'I'RI.: (61;2) 212 -5451 • PIA: (612)'!1'2 -8400 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 inCondi 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. ... /continued 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 Januaty.2000 (RIH background,doc) 0 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 .../conlinued VAIIRL11ill! kDQI ARl"ERS: f, Ili 1, ii hN PARKR%)', P.O. RON' SCI Li!1. NLVNF.APOLIS, MINNESOTA. L..S.A. 554;9 -820+4 'rEL: if, 121 21'2 -54,51 •. FA\: (612) 2 12- 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 ... /continued Regent International Hotels.Lisling Rage 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) Q�he�cn�t WALL STREET Dally TOM Fran, 1 January 2000 Room Cs&egory Single/Double Superior $545 Superior Courtyard $575 Dehar" S 650 Delusw Cmreyard $675 Grand Dehvxt. S 750 Exeaffrr State* $850 Courtyard Suite S 1,000 Deluxe Stare- $ 1.200 Grand Deluxe Suire $ 1,500 Grand Deluxe 4ftt Suire $ 1,600 Fleet are quoted on single and double anrpaney basis. *L,fr "wnis u4rh private outdoor terraces an• avwilable at a preu iunr rate. Rates am quoted in I.! S. nom icy and am exclusive a f pmimiling state and local tares. Weekend Packages A wnrry aj pukgeo arc asvilable starting at S375. Rate.., are cornrnusionable to bona fide travel agents. All above rates arc subject to rhaggr u4Amut "offer. 55 Wall Simi, New York, New Yurk 10005 Tel: (21 21 845 8600 Far: (212) 845 8601 RECENT INTERNATIONAL. HOTELS Almaty • Bangkok • Beverly Hills • Chiang. Mar • Hong Kong • Jakarta • Kuala Lumpur • Mumbai New York • Singapore • Resort At Summerlin (La, Vegas) • Sydney • Taipei RESERVATIONS For reservations worldwide, call any one of these offices, or your travel counsellor. Toll -free within) Direct dial: Argentina (800) 301 3723 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 (08.00) 509 243 Tokyo 81 (3) 3239 2081 Italy (800) 791 035 Japan (01 20) 001 500 Mexico. (800) 7133 539 The Netherlands (0800) 022 19 2.1 New Zealand (0800) 340 800 Portugal (0800). 853 083 Spain (900) 972 913. Visit us at our web site: wNtiwrcgenthotek.com Airline Reservations Systems Cade: RE Ainadeus, Apollo /Galileo,:Sabrc, System Cine. Worldspan The marks "REGENT INTERNATIONAL HOTELS , "THE RECENT" any cumbinatiou thereof and the R and Oval R logos are trademarks of Regent Hospitality Worldwide. Inc. At last the, f nancial 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 it? 1842. At the turn of the cenutr), 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 fasperware, The Regent Ballroom offers a breathtaking venue,for elegant dinners, memorable weddings and important meetings, Expansive and well appointed with lofty, twelve -foot ceilings. Our 144.gaestrooms including 46 suites offer art eleganre unmatched by any other New York hotel. Each room features every necessity or the exenutire business traveller, including DVD, in -room fax machine, portable phone, CD player and in -wom safe. �� 1 ' ^+ ^^� •�- t ��� the Qegent WALL STREET 0 RECENT INTERNATIONAL HOTELS Ahnaty • Bangkok • Beverly HO)s • Chiang Mai • Hong Hong • Jakarta • Kuala Lumpur • Mumbai New York • Singapore • Resort At.Summerlin (Las Vegas) • Sydney -Taipei RESERVATIONS For reservations worldwide, call anv one of these offices, or your travel counsellor. 71 -free unthin: Direct dial: Argentina (800) 301 5723 Sweden (020) 790 464 Australia (1 800) 022 800 Switzerland (6800) 55 53 44 Austria (0800) 291 059 USA (1 800) 545 4000 Belgium (0800) 7 44 44 Canada (1 800) 545 4600 Direct dial: France (0800) 913 216 Dublin (353) (1) 706 0259 Geunany (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) 44(1 800 Portugal (()800) 853 083 Spain (900) 972 913 Viar vc a our wehpie: www.rcganhorrls.com Aiihnc Rasn.iiiom Syctoaia. t btic: RE Amadeue, Apnllb /Galileo, Sabre, Systcm One. Wnddapan Thy marks "RECENT INTERNATIONAL HOTELS ". "THE REGENT "anv ovnbmauon rhrreni and ihr R and Ova) R :genr ! lnspuahey Worldwid, I,. The Regent Wall Street 55 Wall Sireet, New York, JVY 1000.5 Tel: (212) 845 8600 Fax: (212) 845 8601 U H K Equipped to exceed your expectations. Exercise your options (or health in our fitness center. Reward yourself with a therapeutic massage in The Regent Spa. At our restaurant, 55 Wall, savour the best of globally influenced Arnerican cuisine: only what you world expecr.(rorn Wall Street. ..w ,,. �� ..�� � �� _ - x. :�=, v -; � �. •q� .�v� ;, ?✓ Qedwent BEVERLY WILSHIRE A FOUR SEASONS HOTEL PLO ow 70 pm Wk mcat o . J Nwk Im hw 0 IL+ d a Ii1Y1f.�2�IlLYLL n° u • . a i a I- 6 OO M-o"Dum = amoo, A, IIL *.SatA? . m Aabm .f 5241& �7A," t" a,* (117 RTWO �fl a a a `-rrD ap < IW(k,''R aim kw, a 0 oo lb A- �?! r �i parr 4 1 .e 1 bJt•Lt i' From its classically vauller ceiling to its marble door, the most gracious lobby in &mery Hills rcllects the Hotel's 1928gmnrcur. 7he Libby Lun{ e An oasis of elegance, warmth and impeccable swWaer at the cap's most renowned intersection. With a splendor }imher enhmued by a wn,w,aion dreg prilrcdy blends tradition and trend, The Regent Beverly Wilshire ri fleas a dtinity that conies only with experieua•. Far seven decades, it has been an integral part r+f Beverly Hills life — its daily special nnontents as until w ifs important celebrutians. With its Lamrpean chant, 21st - century terhuolggirs and the Four Seasons ethic W ntreutive can-, The Regent Beverly Wilshire is this enlranted destination's pre%rrrd address f r business or leisure. With 395 guest rooms, nearly one -third of which are suites, the Motel offers a superb array of choices. Tiro unique rtiviromncias meet in a sh(& vision: the historic Wilshirr Wing appeals to more classic tastes, while the Beverly Wing is elegantly contemporary. From well- appointed Superior Rooms to the 760 -square foor Regent Deluxe Rooms — as sparious as a junior suite — all guest rooms combine the latest muftrts and conveniences, including advanred telecommunications. Every guest enjoys an unusually spacious bathroom o( Italian tile and manic, wiih separate shouter and deep soaking tub. Wilshire Wingguest room Rryett Suite Simutrd in the BchMdy Wing, and nnnuy with balconies that open onto dazzling views, Regent Suites o .fter added Beverly Wing hutnonm pnvaey fin business or en tatainixg. Beverly IVinggury room 'I he Veranda .Suite I I'iWim iI mQ bmhrnnm Understated and oversized, the suites offer exceptional luxury. They range front a 725 - square -root Regent Suite — ifering mountain and skyline views noun the Beverly Wing's upprr Jloors — to a 1,5.10- square font W'ilshim Suite. The Veranda .Suite, with its rooftop terraer, and Ambassador Suite, with its bathside vienrs, are simply one of a kind. nne- lwdroom Beverly Suite One - bedroom Beverly Suites add a netv dimension to luxury accommodations at The Regent Betrerly Wilshim. Their exclusive confer position makes possible saweping 270' views and tom (umished private balconies. v The Penthouse .Suite The only hotel in Los Angeles with the distinction of two presidential- caliber suites. Itmodwed by a dnnnati, th, Wilshire Presidential Suite represents nearly 3,500 squaw feet of antique- .filled Luxury: nro princely bedrooms, sunken marble bath- tubs, three sitting rooms and a dining room Jbr eight. The &verly Wing Penthouse Suite offers striking, nearly 360° views — the Hollywood Hills scan close enough to touch. At 5,000 stylish squaw feet, it includes three bedrooms and cur bathrooms, a dining room, living wont and private screrning root, as well as high -tech amenities such as direct satellite hookup. Among the' finest of their Rind in the comary, our Presidential Suites have entertained CFOs, diplomats, royalty and nedia stars. 'flu' Penthouse Sum On Fridays and Sai mdays, The Dining Room hosts evenings of dancing beneath its cloud - painted reiliq and Murano glass chandeliers. '11u, Diuigg Room Tie Bar Uplifting dining. with awar6minning moms and dbew. Front break(st to late -night lure. T7te Lobby Lounge is the Beverly Hills arigbborhaad bistro, overlookigg Wilshire Boulevard and Rader, Drive. The Dining Room ranks amongst the finest restaurants in Los Angeles. .And 24-ham Roorn Service is superb. The Lobby Lour+gc d" r' r a, s�, (*go #,* os*0• ••*9• r- Elegant, flexible spaces, all supported by advanced technology and expert assistance..iher tv B,ilhoom tilt' options go ore to include flee very private 7kianon — with its Grand and Petit salotu. The Glramn>gru Room sears up to 200guats. Pon additional rooms are idedl (or more intimare•,gmups rJ20 to 80. The Cwrty Center Rodeo Drive Shopp ig The Pacific Coast at Malibu Diversions am never for from The Regent Beverly Wilshire. The Hotel places you close to all the key attractions of the region. Afore personally, it gives you the resource(ttl assistance you need to arange tickets, book reservations — and snake your visit perfirl. Function Room NOOM Dimensions flOOM Capacities sEAGF HT(rrj L z W tvr.) Sq. ft. Theater Classroom Reception Banque[ The Ballroom 21 130 x 110 14,300 1,000 500 1,000 820 Le Grand Trianon 11 86 x46 3,956 300 200 400 300 Champagne Room 10 50R 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 z 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 t0' N/A rdA 'Gpn/eieoceset -ap Beverly Wing Main Lobby (Ground Floor) Wilshire Wing Mezzanine \'ISVAt I sigGE ' NOOM J ( flOOM • sEAGF - -f, I J 1)I L P O TXE BALLPOOM • • • • F rt[XFn wiNiEa cAXUtn E n /'FSTA VP iO EOGGiN FNTflntlGi xO JN GPat ERIA oxOpM Beverly Wing Mezzanine eOFP0F. . l Cw .OM y p�AaPGNF 8 Oom • �� vnOVUV a00m Nor: diagraws uo to stale ocp- REGENT INTF,RNATION,IL HOTELS RECEN1 fN I FRNATIONAL FIOTPLS 15an kok - Cln,uig Mat at Man 0.n.. \(alley. - Hony Kong - pkwtu. Kuala Lwpplu - LwAugck, m. Beverly I hil, (flrordy Wdkhh,) Singap.I, - S,,Inry. Thrpei FOUR SEASONS HUTELS AND Rh.tOIRTS Athiur4 - Au,un . Avurn •Bali a1 Jimbaun Ba.. Bali at SvYan • B,rhn Beiwu • Gauu at 1 he Fv.. Residence . Chicago • Clnuagu (The Wtz- Culmnj Dj11- at Las (:nhmss. • I Mmton • Hualalal It Hrtunv K,'upuRhu Istanbul • La, Vegas • Lnbh ,u . Londar • London It Canary Wharf L., A, del,, nt Br,ed, Hills . M.Adrvn m Knda Hums • M.mI at WaA. Mdxleo. D.F •.Mda1 • Nct1 We,, Indio =. Nrw Yerk • Nom York (I h,, PterreJ N,,,port BCAch - 1'dw Beach - Pua • Philadelphu • Puny Ala,. Mf.II'u SIIa. Ba10Ara - Slou: dale al Tenon Noclh . Scaule • Smgaputc Token .0 Chw<au -,. - 'Ibrt.nn • Vaum,v ,, • \Vashin¢lon, D.C. UNDER Dtl'Y :L014.IFNT Fosse Seasons: C.uasr.. Dubhn . Prat , . Sal Elan: isco - Shanghai - Shan. M :Sheikh R E S E RV AT I NS Fur I "o veuons call vnni'travd counsdm' of '1 o!L {rre 11.1111111: Argeiulna (8110) 301 -5723 '1 he NechaA.mdn (08110) M° 19 LI An .... lia (81111) V22 -800 NCI!' 7Cal,i"a 08,10) 1111 -01111 Austria (11800)29 1055' L'nrrugAl (11800) 853 -083 Brlguun {uy06)744 -11 Su'pporr (83)6161 -177 C'u "'U (,too) 545 -400" Spam (900) 972 9I3 Fnu.v (1000)913216 Smvdok ry,2n)7911 -464 Grnn:my ((1001))1878197 (08110).555344 Grr.0 BrI.m !(R!i0) 017 -8795 U.S A. (Win1 545 -4011, Hon, I("n¢ 800 -96 -8384 Ireland (80111 50'1345 Unr1 Ai,il. Inly (8(10)7911135 Dublin 313(1)7'16 -0239 Japu'+ N0531)61 -3333 0mah,+ (4112) 4315555 Mcs+co ib(V 711 +539 Sydnc; 61 ri 93; -0E164 Vtav u= ar our wr6 she. ww.+ Icgcuthot.6 +rom Ad.,,, R..+rnmric,r..S'y.tr.0 A nn.deus. .Apollo /Golilru, Sabre. tiysram OIi;. W.,ld.pau The mnk, "REGENT" THE RhOLN I ". :w..al :Iblmnon th.r:i and,he R. Ind ❑ed It Inc The. ,Irks 'TOUR SEASONS" "FOUR SEASONS HOTELS AND RES)RTS', any a +nbluonu. !hereof and rbv T,,, Dcslgu.ne mgbv...I In:.kmarks of Pnnr >mfsn I lyuv LuwleaLn Cx,.d, a.a V S,.1, and o(fu,, inn, ns Ho,, 1, (N nWOn,) L0 r§wehw - i ,1 r tall SSW a Carlson Companies is Dedicated to Providing Personalized Service to Customers Around the Globe A mefsage from Marilyn C. Nelson Creating a Great Place for Great People to Do Great Work When Marilyn Carlson NeL©n cook on V V 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 requites creating a work environment that is truly bat in class,' said Nelson. Why is employee satisfaction her cop priority? "Current economic and demographic conditions have created an unprecedented tight job market. Carlson will maintain its competitive edge by recruiring and retaining the bat people," she said. Girton Cmtpmra :tlmmo ,, L'SA A(rmlp C. ,Nehm,, Clvrr f dx berm pnodou and CEO, C.nlrnn Cmgvw, fm'. "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 reons 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 environmenr is the company's new Technology Center which opened in 1998. The S16 million, 155,500 square-foot structure feamns 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 "OneSpwe," which devotes open space to common areas and emphasizes flexible, communal ream 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 riven 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 imegrae Cadson'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 drat builds strong relationships with customers and employees. Carlson Companies Child -Care Center Carlson Companies opened a new child -care center, one initiative among 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 Cm.er: 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 lace 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. Carl on , Rilaily Worldwide HOTELS Regent International Hotels Radisson Hotels Worldwide Country Isms. & Suites By Carlson Carlson Vacation Ownership Carlson Lifestyle Living RESTAURANTS AquaKnox T.G.I. Friday's Friday's American Bar Front Row Sports Grill I[alianni's Samba Room Star Canyon Taqueria Canonim 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 $55 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 cc fulfill its original vision: to establish rewarding relationships between individual customers and businesses. One of the larbasr privately held corporations in America, Carlson Companies operates in more than 140 countries and its brands employ more than 160,000 people. Callum businesses include one of the worlds 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 reeds for quality, service and a memorable experience. CaThonWagoat Thy'( Carlson Wagonlit Corporate Card LU� on Marketing croup 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 counrries. Its cruise vessels sail to all seven continents. And its restaurants franchise more than 560 locations in 46 countries. Callum Wagonlit Travel (CWT) is a world leader in corporate travel and expense manage- ment and the first Duly 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 311 billion in annual sales. In 1994, Carlson Companies and Paris, France -based Actor combined the business travel interests of their two companies under the name Godson Wagunlit Travel. The merged company brings together nvo of the most legendary names in travel "Ask Nir. Foster;' the oldest travel network in the United Scares (later acquired by Carlson Companies) and Wagon ir, originators of the famed Orient Express passenger trains of Europe. Today, in cities throughout the world, C Ison Wagonlit Travel provides a Emiliar 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 Leisum Group 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 ages leisure and finchise travel operations world- wide under a variety of diversified companies and brands, including Thomas Cook in the United Kingdom Er np wn magazine has ranked Carlson Leisure Group the rap travel franchise brand for the past three years. Together, Carlson•s travel agency interests include 5,300 travel locations in mote than 140 counmes amund 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: cusmmets, employees, and distribution channel partners. Ranked by A&ewtng Age magazine as one of the world's largest marketing organizations, Carlson Marketing Group is a full - smite, mulridimenuional marketing company with international capabilities spanning 21 countries. This global relarionship 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 Sprats Marketing. W U w x W a w 7/ z_ 1~ W ix U Carlson spy W r dwide Serving Markets of One in the Experience Economy A nwzage fiwn Cartir C. Nelsola 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. CaR,� C. lvelron. pwdw and CEO. Cudm HaspeaMy Wwidu'de Carlson Hospilality Worldwide HOTELS Regent International Hotels Radisson Hotels Worldwide Coumsy 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 Crises PURCHASING Provisions'' wii Sam Sru Nacigmw Why is this important in the hospitality industry? Because hotel rooms, anise ships, and restaurant meals are only commodities. Delivered competently, they became 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 cu tourers' growing desire for experiences, wear Carlson Hospitality Worldwide are focusing on three imperatives: Fite, we are continually searching for new and fresh experiences for our guests. Second, we are providing experiences that generate positive emotions. Whether a cusmmer is holding a family reunion in are of our hotels, taking an anniversary cruise, or treating someone to a birthday dinner, our businesses are ideal for coating memorable moments. Thud, we are incasing 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 Terhmlogy article mpg. 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 in 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 a 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 powerfiil tectima l tool ever created to provide personal, memorable experiences: Gold Points Rewards'" (Sur Good Poina arrkle m pg. 'J 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 chat 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'" 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 sarisfaction programs. CURTIS NELSON LAUNCHES NATIONAL TASK FORCE TO ATTRACT WORKERS TO LODGING INDUSTRY Curtis Nelson is leading a historic national risk 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 tires employment as the most critical issue facing the industry today. "All across America, in every horel, 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." Tlx task fair uill adaiw the ji kuyng gmis: 1. Attract and retain the'best of the best' in the Libor 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 effots, inclusion initiatives and youth menroring. 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 teach customers in ways we could not have dreamed of, even a few years ago. Each time we teach customers, and they teach 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. Aq.Kmox, Dutkw. Tcwr, 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 rouchpoints, we will make the next series of experiences all the more valuable. As customers receive the caring, tout, and respect we extend to them, they will continue to prefer the value -added experiences we provide. T& Repw Walk Stmt. Neu Yw.F. Neu Ywk USA Caring. Trutt. Retaert. 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 Th E\Perraar Ermaawl Carlson Hotels Worldwide- Providing the Experience of Value to Guests, Employees and Investors 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 TJx Regea Baefy WArbim anwly H11G, Ca/ifu USA industry leading support programs in order to attract and retain the best people. We are emphasizing the retention issue rhioughout 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 Horels Worldwide is to ensure char we deliver the level of consistencv 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 fun experience for our guests; by tiring and retaining an outstanding staff who thoroughly enjoy their work; and by investing in cutting-edge technology Our state- of -the-art CustomerKARE" (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, plea - 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 Cuais -C° reservation system, for example, delivers approximately 50 percent of hotel room revenues in North America, a figure which leads the industry. R.dwm Royal Santiago Hwd. Santwgyi. Chife Em Danagw. jmdeen. C"&'n Had, w,.ret,iik Giwntrr !nn 6 Saito Br Carlton, ,5limp4h. Nltnwwa. 1- "SA 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 dwughtful, 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 marker 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. • *% g ildaoints % 00 *rewards Gold Points Rewards Positioned to Become the World's Most Valued Points -based Currency Auniversal, online points system gives customers unprecedented flexibility and provides partners with vastly increased sales. "We are very excited about the successful 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 CFO, Carlson Hospitality Worldwide. This dynamic consumer incentive program is designed to fulfill two main goals: generously reward consumers for their loyalty; and stimulate sales growth for the well -known retail, service and hospitality parmers within the Gold Points network. GOLD POINTS RL \ \'ARD,) SPANS A NET \ \'ORK OF RG�,PLCTLD 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 rakes the power of Carlson Companies and communicates it to customers, tot as a marketing position, but as a value proposition. "We are providing loyalty currency while ofkring 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. Fv nm infoonatnnr mrmar to www.guldpoints.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 mid. "First, Gold Points can be mmed 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 cart 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 teaming about the reeds and preferences of individual customers. "When we presenr 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 teaming distinguishes Gold Points Rewards from traditional cross - setting 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 nerwrirk of Carlson Companies, we touch customers in many different locations mid many different ways. We estimate that we will reach appmximately 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 pamuers. Only Carlson Iuiospitality Worldwide oflin this unique and powerful opportunity;' NeLson mid. W U z W fyr w a w z H W U C REGENT INTERNATIONAL HOTELS Regent International Hotels Expands Worldwide as Exciting New Development Continues File - star, &voy hotel and mart mipany errands in strategic lowions 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 far excellent locations, quality architecture, inspirational interior design and superb personalized service;" said Paul Hanley, president of Regent International Hotels. "The newest generation of Regent T& Regmt Grand Palau L. Vqw. ,N.wb. 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 chew fine hotels and resorts is the distinctive culture of the company, called "The Regent Experience." Its essence is LAxur}_fw All the Seawe which combines the warmth and culture of the local commu- nity with global luxury standards. The result is a taring 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 aftlmmn rea served to the accompaniment of a string quartet in the lobby lounge a The Regent Bangkok, to the luxurious revitalizing spa treatments offered at The Regent Grand Spa Las Vegas, Pawl Hanky. Regent lnrmwuiaral Had, Regent's extraordinary attention to detail has generated a devoted global clientele. Other amenities include 24 -hoar 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 larptatirmal lmerta, Coale Naar Tratder and Trmr( Fo Las m magazines, as well as independent rating services. High points of 1999 include the opening of The Regent Wall Street, a 141 -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. Tln Ream, Smeap. r 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 Canynn and the glittering Las Vegas strip. Stareof -the -art spa and a choice of numerous, nationally- acclaimed golfcouries 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 Bands Kuria, 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 mums and suites. In 1998, The Regent Almary, Kazakhstan was added, bringing Regent to this key business center of Central Asia for thr 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; Eumpe and the Middle Eau. Th, 2eggmr Bawl) WGbm Barr ?y Hm,. G,G/aviu. Usn 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 managemenr 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. Th, Regent Gratin S(w I,, 4'ega. Nawdu. USA Th, Rgeat Abewo. K,, k)w m fo,w lie senses Radisson HOTELS WORLDWIDE' The difference is genuine.'H Building Superior Brand Value for Investors A nresrage from Brian Stage To 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 consistent}, 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. R.daton SAS St. Hrh„] Hold L),4& DYIAIM, lr4„d Drive for quality and consistency. Earning the trust of consumers is viral. 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 moms. These efforts are coupled with a disciplined approach to evaluaring hotels that seek m join the system. Radmw Harek Wadduide inotidrard a mn'tudtuty- t- dt/tg. prsmur id1wim ofgmst bndp tare miunitie, uanud ASMA Bally Care - Gouim Enenre The nano AURA tymhdiza tone rf the roUatiwry unique aunbaw tfui ialude Auibisior. Stimizkvnng, tndidgat, Reuitdizing aad Alluring. Dargmd arl -rely far Podirton, ASNA nmsrys du brandy fact m quality and gsauim bospiwlity tervne rvltare featuring a natural blind of Mimnmenutlly friudly ing-d -os and patented pat:Ferging. - 10 Pmvide 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. UNerage 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 pnvvedid network of Carlson Wagotdit Travel;" Carlson Marketing Group' and Carlson Hospitality Woddwide drives guests into every Radisson in the warld. All of these companies will be partidparing in the Cold Points Rewards' program. This guest incentive program is an important tool fur reaching die common customer base of Carlson's related businesses. Invest in developing halo hotels in key markets. There are deuirruions wlxre Carlson's travel businesses and the Car" Marketing Group send thousands of then clients every year. lhese are the places where we need in be, because dxy 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 Mi M BODY CARE Brian Sorge. pmibm. Radu,oa Had, WorLfRile locations, we are gaining access to significant sources of investmenr 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 must 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 kev markets, we will deliver outstanding profitability for every hotel in our system. Radisson Marketing Focuses on Strong, Unified Global Message Focusing on presenting the message of a superior guest experience A message from Afaureen O'Hanlon "Providing guests with a superior r 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 face for presenting a consistent message to customers is the Radisson Global Brand Council, comprised of senior management from each region. This multi - rational group bridges local market needs with a worldwide vision by creating marketing policies that ensure consis- rencat across all hotels. "Since the Gwmil began its work dmree }rears ago, we have had remarkable upturns in inrernuional business," OTIanlon said. The initial efforts of the Global Brand Council resulted in the widely aecLuimed Genuine Hospitality" ad nunpaign. Radisson Gold Rewards.Iaunched this year, Radisson Gold Rewards is a unique, industry- leading guest loyalty program char allows its members co 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 die T.G.J. Friday's' family of tsra uants, Country Inns & Suites By Carlson' MCI WorldCom and SkyMall. "lxttao dinar} customer service is the cornerstone of the Radisson yet I Cat" philosophy, and providing a choice of tewaods 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 excellen, in the lodging industry. The recognition follows a year of research conducted by the School of Hotel Administration at O Comell University, The program allows O individual travel m consultants in 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 reLuionships with key leisure, ttansient, 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 infomation such as previously negaiand rates, typical number of corporate travelers, upcoming meetings, technology issues, and ocher factors that affecr each client's experience with Radissou'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 in share account information through our award- winning technolog$ we have a decided edge on the cnmperition." OHanlon said. This meeting was the first of many to come. Ala` n O'HnnAM. CtBWIttC t')t2 geodM( L/b .d m,,knixg, R✓deiw Howb W,m'dride Genuine Hospitality- Campaign. The `captured nornencs'.Genuine Hospitality advertising campaign clarifies the Radisson positioning and creares a powerful impression of consistency ro its guests worldwide. -We .tie powering up to a higher level with two new initiatives,' O'Hanlon noted. A hard - hitting promotional print ad package builds on the nxomentarm and adds a strong retail . message including rates and program logos. Increasing the momentum, a television commercial conveys the message char Radisson is an MIS of genuine caring. 11 Radisson Growth Explodes Worldwide Brand makes dramatic Inroads in key world business theaters A message from T. Peter Blyth Penermting key markers 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 meal number of properties to over 400 and the number of moms under the Radisstxn 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 markers around the world. Development this year has succeeded in upholding this srmregy. 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. Radivwr Had & Sm,k Sydno Sydmj. Awftdia Asia Pacific Radisson has greatly strengrhened the brand in Asia Pacific by acquiring co ntrollurg 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 mrporare- 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, Lau, 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 Olympia. This year also marked the opening of three Radisson hotels in India "India is a cop development priority in the continuing globalization of Radisson Hotels Worldwide, and our presence in the gateway cities of India and other key Asian markers will give us a competitive advantage;' said James Olson, senior vim president of development, AsiarPacific, Carlson Hospimliry Worldwide. The international five -star Radlsson 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, 7: Pero Blyth. prutdwt. Radutoa Mede WWdu,ide oadq v 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. Rudwmt Snit, Had Iru'a Ratan. Flmnlu, f,'.4A Europe, the huddle East and North Africa Radisson SAS Hotels Worldwide, the brand's sole franchisor in these regions, is rapidly expanding roward 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 Eumpean marker continues to consolidate through a common currency and easing of trade barriers, the power of braiding 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 /referred 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 ernptnyees." T. Peter Blyth, president Radisson Hotels Worldwide Development 12 .,.. _ Ihwr,llmv, Clonal. fmlin 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 Busimsr Trntvler 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- co-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. Rnda.G*e To v. Sm1h A,Fva RADISSON RECEIVES INDUSTRY ACCOLADES • Eumpean rcalers of Tiwr and Tradd Nees ranked Radisson SAS the Top Eumpean Hotel Company The Gold award is the highest honor given by this respected magazine. • Radisson was honored with the prestigious Destino award lit Best Hotel Chain in Latin America. Radisson received the top award from the Latin American tourism industry.. • For the third successive year, readers of Bzttirrecc Trader 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 Sarisfation Index (NCSD. The index interviews par ons directly and is recognized in the United States and Europe as the most complete and accurare 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 Om Valley in Tucson, Arizona PGhm Had Edb..Nat Odbi. In7a Z -r COUNTRY INNS fl SUITES Country Inns & Suites By Carlson is Fast Becoming the Preferred Mid -tier Brand This rapidly growing bland is rising to prominence with great people, great resources and great expectations, fr. rr I'm 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. Cwer 200 hotels are now open and operating in six countries, with another 110 license agreements signed, under construction or in property development. This dynamic company is well on its way to reaching its goal of 3W hotels in the year 2000. In the year 2003, it expects to have 500 properties. dtinrmgmlii.:Ninms,uo. GSA 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 modem 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 14 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 cleat. Three Factors fuel the success of Country Inns & Suites, Kirwin said: great recoians. great paple and graft eatwea u. '. r . t 1, , , . , I Country Inns & Suites By Carlson delivers a high quality development, product design, training, sales. and marketing programs chat enable franchisees m drive premium sales and profitability. Praruing an aggreune detdgvixrn /axe, lakmad urth rmefitl attention in gAm6D and lamum. "As we grow, we are increasingly sought out by large corpor ire 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 improring prodxe design and operating standards. "Our new cost - effeaive 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 chat will make our rooms first choice among value- conscious business travelers;' Kirwin noted. • loms a in training ccmulong and quality ameame forgaaeral oanagm and Jrannnines ensure that product quality remains high, brand equity increases, and that franchisees generate the best revenue from their hotels. Pmn Ktnreu. prcvkur. Coconut loco, & Snira Bt Cad mr Lorraging nunkeing mramtr to icon thepousn- oi "-h lxilets local entromeerial 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 may into the medium of TV will greatly increase our visibility;' Kirwin said. Using rahnol(O in irnonaim uvyl to inmase miouev. "Our ComtryLine reservations delivery system delivers 35 peon 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. t.-„v 1, .,I,i 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 their in finding and enlarging a core group of superstar employees who ensum guest satisfaction," Kirwin said. In addition, he noted, the guest service training cool, Country Hospitality I Promisef has recently been revamped, resulting in a powerful training instrument to help franchisees provide lifetime value for guests. IN, Dl'S RY ACC )LADEN FVR �, �,l I i I ?�, h) ( AIO."t !\ This uas a h mw year for Cannot' Inm & Suites which ma red signihmm ba from raped industry magazines. • Country Inns & Suites was tanked numbervne in several mid - tier - segment categories in the 1999 Top US. Hotel Chain survey published by Buriiiar Trani Neu +u. This survey is an annual measure of corporate travel planners' opinions of the properties their companies and clients use. Country Inns & Suites was tanked best in quality of business amenities, helpful and courteous staff, overall priceivaiue relationship, and promptness of commission payments. • Busineo Trawl Near also ranked Country Intl & 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. • Statxu 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 rime in 1998. • For the third year in a row, Entreprenanr magazine ranked Country Inns & Suites to its 1999 "Franchise 500" list. "We are fast becoming the brand of choice in the raid -tier segment;" said Scar Meyer, vice president of operations - franchise services. "Surveys such as the one in Businen Tram( Nero 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. Datloe. To . USA c,i.- . t.y� .r _n: Country Inns &Suites By Carlson has great expectations for global development, increased revenue and brand equity. Deteloptwia.. "In addition to our vigorous expansion in North America, we are growing in Eumpe, the United Kingdom, India, Central and South America, and Australia, and we are actively pursuing growth in the Middle Fast. 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 supporr 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 & Suices 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 suires. No matter where you're rargering a property - country or booming metropolis - we'll help you develop and design just the right property for your marker and budget;' she added. • Rartme. "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 marker share;' Kirwin said. Brand equity. Building consistency and reliability across nor 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. Name Jdnuan. emus vc P"'4wr of Jr (I" , cwmm I= 6 Seim ap 6.m4w, "We want Comm Inns & Sums By Carlson m be known for four things: 1. providing excellent guest, employee and owner,opentor 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 d. achieving premium revenue and profit performance anund the globe. By working togtther to address our mutual expecran.ons, we can build a truly great brand - one that meets a0 of our needs for long -term profit and success.'. (hlanA. Frond,. USA 15 W U z w rH W w a w r z F Q W U 1 G a 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 61 modem of Travel & Leisure A message from Mark Con", Radisstm 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 m/r Sam Seas Marour will be the company's first all balcony, all -scare 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. . halt,& , D %6D o d "While the Saar Sit Afarimr will preserve the Immmacy, personalized service and genemus space - ro-guest ratios of our other vessels, she will sari* those who wish m 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, destinstion- 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 discincaw itinerary, design and ambiance. In in 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 Tratel & 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 Cmises in 1999 celebrated the launch of the Sam Sear ,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 hourirxa amenities;' Conroy said. Feedback from I,vesa guided its design, which includes 350 to I,W(l- square -hues swtes and private balconies for 85 percent of its cabins. The Navigatoe also features a seafaring %4 k C,.q, P-u t aadw. Sate, SIMI ci' w aromacherapy, spa by Judith Jackson, the renowned health and beauty advisor and author. preceding the Sam Sear Navigator are two vessels which consistently delight guests and industry critics alike. The 350 -guest err Radirmn 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 Radium Diamond routinely receives top industry awards, including a six -star rating from Fielding} Wmlduide Cruiser and a six ribbon rating from Stern'' Guide to for Cruise Vacation. In addition, the ship was named the Best Cruise Value in the ulrradeluxe category by Ocean & Cruise Newt. Also earning top industry honors is the cols Song of Fkmw, sharing the "Best Cruise Value" award in the ultra-deluxe category by Ocean & Cruise Navx. This extraordinary ship has also received Fielding's WWduide Guide to Cruise' rop six -star rating for the third year in a row - as well as six ribbons from Sums Guide to the Cruise Vamtiom Also in 1998, Song of Ftww captured first place in four of seven categories (best ship overall, top value for the money, best +w, Pawl G.Xoo ed, Sam Srw Nm igaro 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 air S"g of Flaps 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 mis Paul Gauguin is the most deluxe cruise ship ever based in Tahiti and French Polynesia year - mund. Specially designed for warn water causing, she boasts die highest space ro-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 i20- guest deluxe vessel was also awarded six ribbons from Sterns Guide to the Cruise Vacation and received a five star rating from Fielding' W'Wdmide Cruises. The cruise line also markets select sailings for the 184 - guest luxury adventure ship nut Hanseatic, which circumnavigates the globe with exploration cruises in the Antarctic. The only cruise line to cover all the earths 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 faz- reaching capabilities spanning the hospitah- ty, marketing and travel industries. Its reservations center is located within Carlson Hospitality Worldwide's state -of-the -act 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 destinacional 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. mA Hmitmtu Award - Winning Te Carlson Hospitality Global Success cbnology Drives Worldwide's Techrarlou &,itws innovative glolwl nutr&ing, superior pmperty- nianagenrent capabilities and a castomnized guest experience, A message from Scott Heintzcnnan 'Winpassed a signific ni milestone in our drive to deliver industry - leading technological capabilities to our hotels;' said Scott Heinrzeman, 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 curing -edge infrastructure for nor core business-delivery systems. These systems give us world -class capability to deliver guests m our hotels, serve them, and retain them,' he noted. Sell them with Curds -C. Carlson Hospitality Worldwide's industry - leading global reservations system, Curris -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. —Me new Curtis -C system is a global system with the ability m create and distribute products worldwide in seconds and implement yield management strategies instantaneously. It provides faster, easier and more accurate information which improves sales perfomnnce and customer satisfaction," said Heinizeman. 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 Heinrzeman. 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, Curis-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 surrey by Graymn Company tanked Curtis -C as number one in occopanq 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 archirecuue, utilizing an Oracle database; global data network; Sequent computer; and ForE language. Through these advanced components, Curtis -C is highly scaleable, enabling the de ivety of new nmdceting pit)grarnsi to Cvlm's hotels and sales fuar, enhancing the selling process and allowing hotels to better manage rates and availability. Serve them with HARMONY. Carlson's state­of- -the are properry management system, known as HARMONY, provides hotel managers with the tools they need to manage revenue and market their hotels through gloMl reservation distribution channels. "The HARMONY database management system allows each property to manage its own revenue, thus increasing efficiency and sales effectiveness;' Heinaeman explained. "Each horel 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 straegies implemented and availability controls adjusted;' he added. 5',w Hwnnanam . sir pmidmt. A—idge mbrrd14m. Cv,/M Hmp4d t) wwlduilk 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 cistomer satisfaction initiatives. It scores 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 razes, packages, and availability of local competitors. A vast improvement on its market competitor, this system drills deeph, into die pricing and availability for all competitors' products, giving Carlson hotels a large competitive advantage. HARMONY also includes a suite of business- building tools that connecr individual hotels with the rest of the brand. It is now rightly interlaced 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 char 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 guess and build long-rem, loyal relationships with diem:' Heintzeman noted. CustomerKARE also supports the Gold Points Rewards' loyalty program. "We now, have a rock -solid technical foundation on which to build a large, successful family of hospitality businesses," Heineman 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 m our systems. With the highly defined standardized hardware platform of Cuais -C, it lowers the training requirements for new applications, reducing the cost of adding new capabilities." "We remain focused on our vision — enabling nor hotels to deliver a personalized, caring experience to each of our guests. Our h gh -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 a 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 benefice of rechnology to society, according to Dan Morrow, executive director of the Compurerwodd Smithsonian Award Program. Naturally, the Technology group is pleased. "It is an incredible honor to have our reservations technology as a permanent future in one of the world's most prestigious museums;' said Scott Heinrzemao. "Providing our brands and hotel locations with de industry's most advanced reservation technologies has been a top priority for Carlson Hospitaliry Worldwide. This honor reflects the success of dose efforts," Heintzeman added. C..rn rnm E A,itm 6p C.mlmn 19 Carlson Restaurants Worldwide Carlson Restaurants Worldwide is a Global Leader in the Casual Dining Industry A message froin Wallace B. Doolin global leader in the casual dining ustry•, Carlson Restaurants Worldwide is building on the strength of its core T.G.I. Friday; brand, while selectively developing new restaurant concepts in the sophisticated and upscale dining segments. •r..G.I. Friday's is a leading global brand whose success is driven by a combination of upbeat atmosphere, innovative menu items and legendary service. We understand dim diners want a memorable experience, not just an incredible tasting meal;' said Wallace B. Doulin, president, Carlson Restaurants Worldwide. The first T.G.J. Friday's opened in 1965 in Manharran's Upper East Side. Today, Cadaor Restaurants Worldwide has achieved over $1.4 billion in systemwide revenues. The company currently owns, operates or hanchises more than 560 restaurants in 46 countries. Carlson Restaurants Worldwide's mission is to be the global champion of branded retail businesses distinguished by innovarm in food, beverage and communicariot and its legendary service ailture. TG.L Fid), 20 T.G.I. Friday's guests have come to enjoy the innovation Fridays'ofhn with food items such as Pizuddlas', Friday's Jack Daniel's' Grill and Friday's Chop House Classics, as well as inovative beverages such as the Ultimate Margarita Front Row' Sports Grill combines two of America's greatest loves - tood and sports -in one location and appeals to men, women, singles and larnAies alike. Designed for development in major sports stadiums, this imsovarive concept offers a complete entertainment and dining experience that features state-of-the -art technology with multiple relevisiorn screens for viewing a variety of sporting events. Front Row Sports Grill was the first fi U- service, casual dining chain nsrauranc to open in a protessional American ballpark. Promptly considered a home mn by its fairs 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 Fridays extensive experience in the bar business to bring Friday's American atmosphere into airports and downtown urban locations. Friday's American Bar umm are designed to be quaint, neighborhood -style gathering per. The menu contains tasty American apperizers 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 exremive range of beverages, both alcoholic and non - alcoholic, presented with theTG.1 Friday's bartenders signature flair. Star Canvon' features the New Texas Cuisne created by renowned chef Stephan Pyles, a fifth- genxermon Texan, who has based his unique recipes on the many cultures and historical eras of the Irene Star State. The W;4ar B. DQ m CmGm� Ratwmamt� W4�rldu nk Ttntp m1tallan Clwp1N.. Rrrku''71e. rtln.y/nmd. 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 kirchen, where [liners can view and enjoy the cooking production. Carehilly selected prod- ucts indigenous to Texas and Mexico are the fteus of the menu. There are currently two Star Canyon restaurants — Dallas, Texas and I. Vegas, Nevada AquaKnox'" 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 Cnuted Sea Bass with Olive Oil Poached Tomatoes, Artichokes and Black Oliva 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 during room. '4p j'A 0, g*,% QOUAKNOX Taqueria Canonie brings to mind the authentic aquerias of the legendary market- places of Mexico. Developed through years of research, this innovative casual concept offers guests an authentic caste of Mexico with a decidedly New American ambiance. The Tagmeria Cahoon menu features mcos, tamales, tosados, gorditas and rellenos prepared with savory fire- masted meats, grilled vegetables and fresh seafood. Taqueria Caiania is located in Las Vegas at The Venetian Resort - Hotel- Casino, a clamed mega -resort and entertainment complex. The Taqueria Cahonia menu offers small places and sides that encourage parrons to sample and share a wide variery of items in the spas tradition. Enrns, salads and Mexican - style desserts are also kamad. Scar Caiym Da11m. Tea,. USA The robust menu oilers a wide varier, of fla- vorful acos, Tamales, costadas, gordiras and rellenos made with grilled and roasted meats, vegetables and sadood. Fresh, warn hand- made tortillas, exotic juice cocktails, fresh lime margaritas, Alexican been, and a wide variety, of premium tequilas and mezcals add to the dining experience. The menu includes Tacos al Carbon; Taco con Rajas y Quest; Tortilla Soup with Grilled Chicken; Chicken Empanalas; and Polio en Mole Poblano Tamales. rr.r.r 13QuElle T�'ulL *� O � SAMBA R ° °M Ym4wo- Italian Chophouse, reminiscent of the classic resarhrants and dubs of Chicago and New York in the mid - fifties m early - sixties, revives the big city dining experience. This big city chophouse adds classic Italian tlav ois 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 drargrilled large -cut steaks and bnn&m chops with classic Italian flavors. Chops and steaks may be served Al Balsamico with a balsamic vinegar glaze; Al Fond with a fish garlic and parmesan crust; or simply dhargrilled. In addition to the steak and chop dishes, Heise emphasizes classic Italian dishes like linguini with Clams in a Wlute Sauce, Veal Scaloppine, Baked Ziti and Scampi-Style Shrimp with Angel Hair Oreganaa. Itatianni's , introduced in 1992, translates to many languages the traditional Indian- American belief that food is a celebration of life meant to be shag with family and friends. Inalianni'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 Italiannis menu was built on a wide selection of classic Italian favorites, inspired Italian fate and signature dishes unique to ludiamu's. From traditional favorites such as Spaghetti and Meatballs, to mom original creations like Salmon Oreganam and Veal Saltimbocca, everything is prepared with the finest and freshest ingredients. All sauces, Wee our rich and robust marinas sauce, are made fish every day, in every rescatantt. Fn4)'s Am iva B,,, l3r mm. Af uw`Arxar. USA Samba Room' evokes memories of a 1960s jet -ser bistro. This Cuban bar and Imin cafe is distinguished by the creative talents of executive chef Phil Butler, a South Florida native. Butler's Iarin fusion cuisine is an updated blend of traditional South American flavors, featuring fresh seati od, spiced mum, grilled meats, exotic fruits and tare 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 parrons a "tasteful" lesson in Spanish and Portuguese with English translations of the dishes. Selections include large Planes, Small Plates, Sandwiches and Desserts. 21 I r VOVMOM- vwa.u.e,a,..".nxaw.. Provisions Provides Unparalleled Purchasing Power Achming a total putrhasing volume of $800 million per year Pmmions rs mote of the hospitality indaatry' largest prommient amipanier. Provisions supplies Carlson Hospitality Worldwide brands with everything they need for successful operations. Achieving a rural 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 ftom food and beverages to furniture, fixtures, operating supplies and equipment. It alsu offers a wide range of restaurant and hotel programs that include food and beverage distribution, projecr management, rebate administration, freight management, and export management. Provisions provides purchasing services designed to meet the needs for all segments of hotels. restaurants, and mom. It also partners with firms specializing in interior design, Financing and kitchen design. In the past three years. Provisions has contracted with over I,(W vendors. A distinctive capability of the company is its global find 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 Tartly Rwdia. a Inrtatpmidmr "dffo. C,d mH padrpyW ddu-� Cwt Hum 5dow I &d. exchange network. The program, Interval Purchasing Services UPS), provides Interval resort clients exclusive access to a completely customized purchasing program. Provisions also created Guest Room Solutions" by Radisson, a program that offers Radisson properties three different pre- selected decorating styles, with cost pre - determined on a per nom 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 outer, Carlson Hospitality Worldwide. Carl_ Lyle Living A Lifestyle Experience of Liberated Living for Empty Nesters A message from Paul Wischennann arLson lifestyle Living embraces a new concept of lifestyle communities, combining the full -service hospitality of resorts and hotels with upscale residential developments. The swmny club membership program creates an exclusive setting, filtering camaraderie and recreational opportunities. Americas baby boomer population is approaching a new lifecyxle where lifestyles are no longer dictated by school calendars or family schedules. Ca Ison Pmk - A IJfer(}le Comnwnhiy 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 otber 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 avenge condominium and townhouse will vary in size between 1,800 and 2,500 square feet and villas up to 30X) square feet in size, Fred Ir tui,nncarm. mo rtixpnraknt, t4d=lafuryk Bring The Car/mn Park Club extends the lifestyle experience beyond the physical border of the community. The residents gain access via an onsire web page to concierge and shopping services, a travel club, and Gold Points Rmurds, Carlson Companies' loyalty program. C.nl.0 Prod -A 147crykCo .no) 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 nheaage fans Miehael DeNnIa 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 comfy to offer multi- brand, multi -tier franchising in the vacation ownership industry,' said Michael DeNicola, executive vice president, Carlson Pelt 16d,� Shia, FkrFdu. USA Vacation Ownership. "Our entry into vacation ownership provides a unique oppoauntry• for independent ent 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 hospicliry• company, to gain a competitive edge in the face of rising marketing costs," he added. ,M&1i k D,NA,4n. certan o,�,rw, oea�Gep "Carlson Vacation Ownership provides developers instant and recognizable credibility with consumers and investors, allowing them to pursue profitability, not positioning," DeNiccla said. "Carlson Vacation Ownership offers a perfect fit between the needs of developers and the desires of consumers;' DeNicola continual, 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 test and a global hospitality giant to rely on," DeNicola said. 23 Carlson Hospitality Worldwide' Carlson Hotels Worldwide' Eric Danziger President 612 -212 -2812 ca `J REGENT INTERNATIONAL HOTELS Radisson Carlson Vacatlo n Ownership Carlson Westylg 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 OO / �VISI0115" Trudy Rautio Executive Vice President and CFO 612- 212 -2524 Carlson Hospiraliry Worldwide • Carlson Parkway, P.O. Box 59159 • Minneapolis, MN 55459 • 612 -212 -5000 0 i999cadwm Campania. Irc. On &" emrnsuf� osalcS u /�nilleo�lo: G'f yOf ewP °r! JjeaCG Jou /eu�[d e✓�lion: c ' � � or�tiu g?6S�Y_BgIS rbn ?rJOO� /!SS /P! l Qnayer• Su6lni!!ed/� . 'G'ornrnunilfea 211201 c5. ��frrGcSl-eel' CSuife 2N ��eajrol! �Je¢rl GQG�liva 9266% Gone. Kg_ C /OnlQCf' �: /!IC!)QIYJ���QIJ �� ■nom on ffe �a16oQ � JQ•njnsrr/¢ asa /�Su6inilleo�lo, or y o1'ev',wV %Je 3� act �ewpor! %'ou /eu Q<d _ � �ea�rl ljegel pia %i%. �? /lei1lrorr, csl�n orr?ia 92658 -B9lS ood �ssrslgil! �iilY l�ai�gyer J�JOSq/ CS rIci cionzrtturrilies ;�ew urf��lreel, CSuile'SO poi! �eacl ��a/rf rrria y?660 ✓�lrorre: ryy�y •�,� Gorzlacl.•��y J- -st -.. �, .�e "41' 4.111 Y 6,1rr on ISe . /3agoa J enrnsula Introduction In 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 Legionnaires and the Balboa Peninsula community. Features of the Plan L eatures of the plan are intended to reflect the goals and policies of the City's 1 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 hadscape, 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. TWC cioa unities !le C,i , of X¢apor! J�ear%i Page / Marina Park Reuse Plan on llia BaMoa N¢ninsula ❑ The improvement of year -round visitor parking opportunities with the creation of on -site parking facilities through the construction of a two -story parking structure. ❑ D The provision of roof top tennis courts and basketball courts on the parking structure available for public use. The parking structure's visual impact would be lessened through the use of a stone fagade and ivy or similar vegetation. An increase of visitor access to Newport Bay through the creation of public recreation space, including a children's playground and scenic view area, from Balboa Boulevard. Performance Indicators The performance indicators for the project are identified below: ❑ Land uses would increase the view corridor from Balboa Blvd. to Newport Bay. ❑ New public open space/ recreation areas adjacent to the Bay. �/ The rehabilitation of the existing : ❑ boating facility and limited expansion to include options for a community marine recreation center. ❑ If desired by the City, the creation of affordable housing opportunities in conjunction with the Marina Park mobile home community. ❑ Visitor serving, revenue generating 6. bay front accommodations. ❑ Tidelands mitigation achieved and consistency with the California Coastal Act of 1976, et. seq. Neighboring property uses complemented by project results. ❑ Additional revenues, direct and indirect to the City of Newport Beach. ❑ Architectural styles modeled after the historical significance of the Balboa Peninsula's early period. -Z% /(i Cno unilies )4, pp sah. /lie Cily of xcapan! Bead Paya2 The Stakeholders RHC 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 Me l3 &a /Pena /a Marina Park Reuse Plan Proiect 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 u 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 1 significance both architecturally and historically. Efforts are being made to research the WNG com vn;r;es /lie c; /y of iYempo�r 7jeac/i Aye 3 Marina Park Reuse Plan nnMe Lin /bon Aeninea /o 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 l the key members are listed below: Developer: General Partner: Financial Adviser: Project Accountants: Tax Consultant: General Counsel: Marina Park Partners LLC, to be formed RHC Communities Paramount Realty Advisers — Mr. Steve Whyte Novogradac £r 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. X)YC Q vndler /Vmpo ra //o I e Gdy of xempor/ Beat /Da9e 4 Marina Park Reuse Plan on /lie Zalboa A6 mula Marina Park Reuse Plan Implementation Timeline Community Forums ..................................... ............................... Project site plans and elevations complete ............................... CommunityReview... ................................................................. Project Application to City.. ........................................................ Mitigated Negative Declaration or EP ....... ............................... 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 const ruction ..................................... ............................... 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. XYIC C. Un;Les J-4v' sn //a /So G iy of Xempor/ Y? ..S i'aye S Marina Park Reuse Plan nn /4e /iu//x,u /enmsrdu Marina Park Existing Conditions Aerial Photograph and Approximate Project Boundary AMERICAN LEGION CLUB. 24w SQ. FT FAMILY PARK- Il VETERAN'S MEMORIAL MOBILEHOMEPARK`!� Ql� Iv MARINA i I BALBOA BOULEVARD VIEW AND PEDESTRIAN GIRL SCOUTICOMMUNITY __ CORRIDOR INTO THE PROPERTY 1 r— CENTER -3,900 SQ. FT —� r Marina Park Land Use Diagram of the Proposed Project ,TXC) Cam unibes Proposallo iFie Cily of `%empor! Zeaufi Paye 6 I I BALBOA BOULEVARD MARINA PARK ILLUSTRATIVE SITE PLAN Financial Impact Summary Marina Park Reuse Plan oa l6e .30160a /mmsu /a Contingencies: summary the proposed lease terms Approvals form all regulatory agencies and conditions are provided below for the City's consideration: Lease Tenn: 55 years Lease Payment Schedule: Phase 1- 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 15'^ 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 Joumal, 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. 7r3/CCoauauai/ies A ,Oora /!o !6e Q* of xempor/ Y%ac6 Afe 9 Marina Park Reuse Plan on 40 Aal&a 761nsa1a Oualifications and Financials Acomplete brochure outlining RHC Communities qualifications and a financial statement is attached to this proposal. Summary RHC 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 ❑ 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 ,VC GOO Un &es 7 q, Saha I e C, /Y of x�por/ zearsi Aye 10 RHC i '.Oa`r µL. r t T :.d' S - 6 � RHC C O M M U M I r I S S February 3, 2000 City of Newport Beach Attn: Sharon Wood 3300 Newport Blvd. Newport Beach, CA 92658 -8915 i/.11.....i 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. BlRcil STREET, SUITE 250 • NEWPORT BEACII. CAI,IPoRNIA 92660 • 949.224.0222 • FAX: 949.224.0223 CREDIT FIRST SUISSE BOSTO[,J 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 cc: Mark J. Zytko EJH/aay TABLE OF CONTENTS Executive Summary Section I RHC Portfolio Section II Industry Publications & Articles Section III 1 11_-__xEW -1VE 1 RHC COMMUNITIES Company Profile 1 RHC Communities (the "Company ") is based in Newport Beach, California. The Company is one 1 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 1 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. II ' 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 atJLM 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. II U 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 recognized the unique opportunities existing in this property type. a detailed acquisition, management and exit strategy which seek s ' returns attainable through manufactured housing. I! II 1985, RHC Communities The Company developed to maximize the superior 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 futureappreciation or redevelopment opportunities, RHC Communities cams 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 thud 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. r r r r r r r r r r r r r PROJECTS ACQUIRED BY RHC COMMUNITIES M M M M r M �C PDRTf0 u O PROJECT LOCATION PROPERTYiYPE MHP-SPACES APT UNITS YEAR ACQUIRED STATUS Capistrano Terrace San Juan Capistrano F& 154 0 1985 View Park La Habra MHP 143 0 1986 Sold 1993 Cherryfield Paramount M-P 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 MHP 166 0 1988 Sold 1998 Bayscene Chula Vista MHP 126 0 1989 Dana Point Marina Dana Point M-P 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 MHP 109 0 1990 Sold 1999 Continental Hayward MHP 198 0 1990 Bahia Garden Grove MHP 176 0 1991 Sold 1993 Santiago Estates Sylmar MHP 303 0 1991 Sold 1995 Chatsworth Imperial Chatsworth MHP 184 0 1991 Mountain View Estates Upland M-P 68 0 1992 Sold 1995 Westminster Apts Westminster APr 0 55 1992 Adobe Mobile Lodge Concord MHP 77 0 1994 Diablo Mobile Lodge Concord MHP 73 0 1994 Club Marina Baypoint Mf 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 1996 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 1 1 1 1999 COE 412000 Total Number of Spaces/Units 3,458 875 I . CAPISTRANO TERRACE • 19 ACRES . SAN JUAN CAPISTRANO, CALIFORNIA . 154 SPACES . BAYSCENE MOBILEHOME PARK *8 ACRES . CHULA VISTA, CALIFORNIA . 126 SPACES OTPW' I � j t lv: AEI' pp� - .' - w rw P J :A • DANA POINT MARINA *9 ACRES • DANA POINT, CALIFORNIA -91 SPACES 1 i� y vqt AI L t� bb 4 � . . TM1. • . _. _ :. Lev T. • COUNTRY PLACE • 5.5 ACRES • FULLERTON, CALIFORNIA • 92 SPACES �i. d. !�. F �.yf,' � � y - -.� inr � `� mow•,.....' go TTT j y AW Je .r' • `ate ob _ Vfk' , CLUB MRRINR MOBILE HOME PRRK Bay Point, California SUBJECT PROPERTY :;ye THE KEY TO EXCELLENCE Open Mundav thm Fridav 9:00 to 6:00 Samrdav 10:00 to 2aW 1300 N. Shaffer • Orange, CA -fin ■ "I,.,d..I , . • Newly Renovated Kitchens • New Carpeting • New Landscaping • Swimming. Pool & Playground Under Construction • Central Air & Heat • 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 • Laundry Facilities • On Busline, • Near Orange Mall • Close To Anaheim Pond • Minutes From The 55 Freeway • Close To Schools Townhomes © 1-800. Call 88643338 ©mod! wd E.w Code 1583 w (714) 639 -6286 V MORY FU LICAFiNW I The Apartment Report CRI TENDEN PUB LISIIING, INC.' P.O. BOX IJ;O . NOVATO, CA 94948 • CUSTOMIiR SERVICEI: (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. 1 The McBride Apartments in Santa Rosa is around the comer 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. II II II II II I 1 Crittenden's Manufactured Housing Community Report t RHC Takes Sole Ownership Through Two Refis II II I1 II II II II II II II 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. RAC 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. The property on 8.82 acres is just one block from Doheny State Beach. Residents have access to the beach from a private pathway owned by Dana Point Marina. Other amenities include a swim- ming pool and a clubhouse. The 1001/6 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 county's rent control ordinance and rent increases historically run 3% to 10% on turnover. They now average $440 a month, not including utilities. Cashflow from rent supports a 1.20 DSC. 1 quotation na tera inaynot be repniduced in whofe ormpartinanytorrttw Buyer Picks up Two California Communities Newport Beach, Calif. -based RIdC , 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 S3M 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 $1.71vi 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 I % for an effective rate of 8.75 %. Rents that average $300 a month support a 1.12 to I debt service coverage (DSC) ratio. RI4C 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. Renovationswill 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-year, $40M mortgage for RHC, Inc. y 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 m 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. iI CITY OF ORANGE OFFICE OF MAYOR PHONE: (714) 744 -2200 • FAX (714) 744 -5147 March 29, 1998 Mr. Richard A. Hall President P.HC 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. Sincerely, �✓ : (� %: � �K-� �� . L.G� -tea if Xl anne Coontz Mayor q:,=ondevimeVltt nuyor -hall ORANGE CIVIC CENTER 300 E. CHAPMAN AVE ORANGE, CA 92666 -1591 P.O. BOX 449 4 C O Mi HC Aft Given the economic ups and downs of the `90s, today's investment prokcsionals 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 stalk investment with significant ykW4 it shouldnt come as too muds of a surprise that 1993 to 2005 has been dubbed the 'Decade of the Manufactured Home Community' Although they lack the glamour sizzle and allure of other investment categories, these properties haw long been recognized as rewarding investments. The ml question 4 what is driving this sudden surge of interest in a property type that has been around for years? One tignifimm reason is performance Given the economic ups and downs of the 904 today�s investment prokssionals have been (brad to scrutinize their 'report aids' when mmining teal estate pedormana Time and again, despite dramatic market fluctu2tion4 manufactured home communities continue to soore highs when compared to other investment property types. These communities consistently exhibit the lowest national ban default rare and during the worst real state cycle of the dead; sustain continued tent increases without lost occupancy That is why, now more than ever manufactured home communities are coming into their own as the investment of dsoia The Impact of Institutional Recognition Smce 1993, four mjor manufactured home community owners have gone public as REM Since that time public interest by would -be investors of the RErrs existent and growing property portfolios have shed new light on this less - thin - glamorous property type The result k after three years of dramatic portfolio growth and performance, these REITs are still going after manufactured home communities with a vengamz Will Street's interest in manufactured home communities is unprecedented Even though acquisition activity has slowed this year these new owners ate maximizing profitability with their large portfolios through enhanced property management Activity u expand to resume its former pace later this year While the highty- touted REITs have commanded the capital source spotlight during the last two year; syndicators and private investors have been right on their heels taking advantage of the growing availability of apical from commercial bardµ life companies, credit companies and pension funds Mote importantly, these private investor groups Iave a distinct advantage ova the REM Due to years of experience in the manufactured home community industry, they not only have a keener ability to recognize opportunity but an provide highly xperienad and specialized professional property management that an drive maximum value incense& Why Manufactured Home Communities Make Sense occupancy rates when compared to any other investment type In California, puny regions boast occupanry levels ranging from 98 to 100 percent National resident turnover for apartments exceed 55 percent per year By companion, once manufactured home communities ate installed, 90 to 95 percent ate never moved This stability is due to pmhbim transportation and set-up torts Tbese costs an average $10,000 per unit � are o a number of compelling rcans, Tmanufactured home communities stand out as an itwatment RHC Communitic4 a leader in the manufactured home community industry, has identified the key factors that warrant a closer look at this investment nkhe HIGH OCCUPANCY LEVELS In major metropolitan area; manufactured horse communities aperients very high a considerable portion of a resident's equity in the home In addition, the home's glut is largely attributed to its location within . an established community. Given today's shortage of alternative home site; there arc few places 2 manufactured home could be moved that would allow it to sustain its value Instal resident looking to teloate will sell their home in -place to new resident before considering a relocation of the entire structure The growing popularity of manufactured homes as a housing choice be linked to several. factors AFroenatsuxm According to recent studies by the Manufactured Housing Institute IMIQ, 82 percent of manufactured home buyers purdnsed their home: beaux it was an affordable alternative to traditional stick -built single family homes Changing demographic pattem5 clanging lifestyles and high . housing . costs have created even stronger consumer demand for anew affordable variety of housing choices Simply put manufactured home communities ate 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 an purchases manufactured home including mortgagq spas rent and personal property axes for less than the next most affordable alternative — apartments or condominiums The down payment is lowe4 it's easier to qualify for financing and, on the averagS the monthly costs are Iowa In fact for most region% . the monthly housing costs associated with home ownership in a manufactured hoine community are the same as or less than apartment. rent Es pmo om Hok Owe Bmms WE studies indicate that 58 percent of manufactured home buyers purchased a. home became they desired the qualities and katutes 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 homeownec In terms of likstyle 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 Lind is rented Beow AePrwr: Manufactured homes currently represent a wide: spectrum of architectural style4.interior decors and amenities and come in sizes: ranging. from 600 to well over 2,500 square fat This diversity mans manufactured homes meet the dennndsof 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. LE1411ED COMPETITION The high demand and limited supply of manufactured homes in major metropolitan arcs will continue Moreovc4 it is unlikely new manufactured home communities will appear in these areas due to existing shortag . zoning . barriers and pricing . of land Since conventional housing cannot be produced at a comparable cost to manufactured home mmmunitic; it is also eliminated as competition. LOW DELINQUENCY When a tenant is granted occupancy in the community they have committed to make tniFiant capital investment to acquire the home that is situated on the lased home site While the home remains the personal property of the tenant the value of their pmp¢ty is only preserved if it remains on site As noted; once the home is moved off the property, it lases most of its value In California,. start civil codes provide that if a manufactured home tenant does not pay tent m a titndy rm ncS the landowner may cause the removal of the he= from the community. For obvious reasons textumts are unlikely to jeopardize . the equity in their home As a further stop gap to delinquency, unless the tenant owns the home without debt the mortgagee mkned to as die q*d owner', with an intetot in die home stands behind the C0112=1 If a.tenant should fail to pay M 4 the lender will cure the defadt rather than lose the collateral seeming the loan LOW OPERATING EXPENSE RATIOS Manufactured hoax: communities typically enjoy a.10 to 15 percent operating . expense ratio advantage over comparably -sized apartment projects. In 1990, the national avenge operating expense ratio for manufactured home communities was 37S percent For garden apartment; the ratio was 513 percent The manufactured home community ratio is even loser in major metropolitan areas due to higher home site rent in these alas With virtually no cost associated with interior or exterior unit maintemne4 operating costs are not only much Iowa but are easily controlled and projected with greater precision Since manufactured home communities have better income and expense leverage than other property type; their break-even levels are lower than apartment and office properties bringing more yield to the bottom line Therefore, manufactured. Nome communities increase in value faster than most other property types GREATER UPSIDE POTENTIAL Home site rental income accounts for about 95 percent of an owneCs revenue stream. Rental income growth . comes from two major it= yearly adjustments in rents of existing tenants and rent increases accompanying tenant turnover At minimum, the standard home site lax provides for annual rent adjustments that take into account inflation increases in park expenses In some communitie4 . where there are no long -term kcaset(rental agreements in excess of one year), rents may be escalated at the discretion of the landowner In the event of tenant turnovq . rents an 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 tent disparity from project to project . o4 in somc . ax; within the same community. This disparity is a function of two unique. conditions. First rents ate 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 lade of investor and management sophistication has resulted in undermarket rent. Second, . low turnover within eadm park mans space rents usually fill behind . the market long before an opportunity to re -rent. arises Investors an always count on rental strams that will outperform inflation levels even in a down economic cycle Moreove4.since there is no expense offset to a turnove4 such as paint arpe4 deaning advertising any increaw to the rent level goes directly to the bottom lint Other project specific opportunities for achieving additional upside in s manufactured home community include filling vaancic5 development and expansion opportunitieq renovation and passthrough; long -term least negotiation4 implementation of social and tecmtiotul programs and instituting new management policies 'I THE BENEFIT OF TENANT TURNOVER Tenant turnover B rarely viewed as a benefit fa most investment typo In a manufactured home community, when a tenant sell their home, new tenants move in at a higher tent level This market rate adjustment an range from 10 to 100 percent depending on the disparity of the previous sent from curmtt market kvds Since the homes am purchased and sold by the resident; the landowner is only responsible for approving the prospective resident Otherwise management is not invoked and no additional costs arc incurred by the landowner The sale is handled through a traditional escrow process, with the rent proration oavrring 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 communitie; beaus the units are owned by the tenant; you are essentially investing the majority of the investment dollar in an appreciating asset .. land. RENT CONTROL For apartment building; rent control an be a death knell For ranufactured home communities howcm; tent control room often creates opportunity One of the primary masons these communititia perform so well, even in tent 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 teal esam investment Under specific condition; buying in rent-controlled cities an offer mom significant upside to the owner Them am many feature that distinguish rent control in this product type from multi - family tent control • Ordinances am in place that guarantee annual minimum inflationary rental adjustments • Unlike muli-family property, tent control does not fault in unit deterioration. Since the units am owned and maintained by the resident, they am more likely to apply their 'rent savings' on unit upgrades and improvements • Most ordinances provide for a rcaptum of funds used for capital repairs and improvements to the common am • When home site rents am restricted, homes become mom valuable t}erefoR the collateral securing the payment of rent, tenant home equity, is greatly enhanced • The alter of tenant retrains high because while the tents are lower, homes in these communities trade at muds higher prices than non-controlled communities of comparable quality. • A 1990 report by Real Estate Consulting Group stated that rent control an increase the resak 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 natum of operating expenses such as non- existent unit maintenance • These ordinances am 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 an generate much higher future sale profits depending on the investor's exit strategy. COMMUNITY MODERNIZATION In any lased investment, them coma a time when the lased 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 bar the cost and responsibility of all upgrades to the dwelling units Them 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 arcs than an apartment tenant As in any msidential neighborhood, the residents recognize thin 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' MIPROVEMENTS As discused, manufactured home communities have very few improved structures to maintain, operate and insure This translates into reduced operating cost and lower risk. This risk an include catastrophic events suds as free wind-driven rain or flood, loss and obsolescence MANAGEMENT EFFICIENCIES Prior to reacting institutional investment acclaim, the manufactured home community industry was predominantly a "mom and pop" industry with few multiple property investors As suds, there is far getter opportunity in newly - squired properties for the implementation of management efficiencies which an significantly, minimize expenses and maximize mvenue opportunities These efficiencies include buying power vendor relsionhip; billing system; ten control.; local government reltion; construction expertise collection audit procedures and implementation of community policies SUBMETERING OF UTHdTM In almost all manufactured communitie; gat 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 as of gat and clectrk the landowner actually realizes a profit on the distribution of these utilities because the landowner is billed at the commercial rue while the residents am billed at the residential rue CAPITAL IMPROVEMENT PASSTHROUGHS It is common pritioc in the industry and usually included in lease agreements and tent control ordinances, that costs associated with capital repairs or imptovenems to the common areas are passed through to the residents in monthly installments added to the tent until the cost and associated fiance charges am recaptured EXIT STRATEGIES In comparison, when examining exit strategies for manufactured home communities, there am other unique option that an exxed the market price paid by a private investor These include TMANT CooP oft Sueorvtstom Resident purduses of manufactured home communities, either through the subdivision process or a tenant cooly hoes generated the highest sales prior for these investments types In this case the resident; committed to protecting or enhancing their equity, will effectively 'overpay' for their home sits For this reason, appraisers rarely, if evq use the irk prim 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 Gunned (mincing Prognnts, there is a prong legislative push underway to appropriate more pate 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 Mmmemu, AcQuurrtons In Califomia, there have been several citic4 since 1990, that have issued tax exempt bonds to purchase existing manufactured home communities within their jurisdictions for the purpose of preserving c istigg affordable housing stock and meeting OIL- mandated low income housing M*Ur nests pricing fir numiaern red home communitks acquired by municipalities lmS in all asey exceeded those paid by Private Parses Smac housing agencies an fi u= at lower micica rata and are exempt from the payment of property tax, pricing an be much higher while still providing cxaBent coverage ruins on the ax exempt debt CHANGE OF USE Unlike other property type, manufactured home communities are seldom the 'highest and bear use of the land Most communities in major metropolitan areas throughout CalifiDmia were constructed 20 to 30 years ago before the surrounding aces were built out Now, with the scarcity of undeveloped land in these 1a4 there is fu grater demand for other product type; such as single or multH2mily residential The RHC Communities Difference Wile no new REIT or private YY 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 decide of experience owning and operating manufactured home communities in California, The Richard A. Hall Company has hundred a new entity, RHC Communities, that combing its expertise and established crack record with a new vision and agressivc 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 Puture -LINtn now current market predictions Lindiate 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 pre6:r to live in a manufactured home environment 11ve'Deade 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 vet 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 tnadets and explore markets where land and community are the common denominator or commercial, other than manufactured home communities When a manufactured home community is situated on valuable land surrounded by more valmble use; there is an opportunity to sell the land to a developer looking to convert it's use In this scenatiq the prig for the property will be much grater than one paid by an investor who phm to continue to operate the property as a manufactured home community In addition to private developer; some California cities have recently purchased well - located existing manufactured home communities through condemnation for various city muse projects The prices paid for projects in this category also exceeded those paid by the private market Aaotding 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 patters 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 an realize significant investment yields with a large portfolio expansion When compared to RHC Communities' former apartment portfolio as well as other traditional investment type; manufactured home communities dearly stand out as the highest yield for the lowest risk. ' RH,C RICHARD HALL 9 DAVID ROSE 20201 SW Birch Stmt, Suite 250 Newport Beach, California 92660 Phone: 714. 224.0222 • Fax: 714.224.0223 e-mail the oom®aolcom such as Santiago Estates in Los Angeles. Developing and Financing in lie Land -Lease Communities GEORGE 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 -hem 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. January 1996 • 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 2510. 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 fiow 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 inkasbu c- lure; and build clubhouses. :pools, and other common area facilities. teasing occurs late in me 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 communces . 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 hind -lease communities are relatively small in size. In midw-estern 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 communises 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.) 13y 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 36 Urban Land • 7a pna)y 1996 sites, h 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 g probably will not generate enough cash now to yield an attractive return on the cost of constructing common area buildings andtacil- ides. It is usually not until Phase II, when the manufactured home community has been com- pleted and leased up In at all ), that the pro} get's investors will begin to realize . handsome double - digit . rates of return. Saurce;leonard Sahrmg, 1he.Madarechaed HousV Commoo1ndusby: The American Dream, RrEnpneered Wow 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- ses can decide whether to sell new homes on site them - selves onto 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 constructi on 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, iris 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 maµ 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- ers of manufactured housing generally can obtain homes when and where rhey need them. Most developers avoid designing: a new manufac- cored home community as a mixture of rental home - sites and for -sale or.suhdivision homesites unless the two sections or phases are clearIv 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 conununay rules. Noncompliant lessees always face the possibil- ity of eviction; those who own their own land do nor. A manufactured ']ionic 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: llomesite Rents Homesite rental income usually accounts for about 95 percent of the revenue: sneamhom 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 Manager) program 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 coin mmnityowners. Rents for homesites in land -lease communities vary widely by locale and specific marker 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 doe rent, for example, 5200 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 manufactur €d 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. Asa 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 (NOn; however, is an- other matter. Since thev 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 pmpoNOnafe 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 homeshe rents to recoup any disparities between the current market-clearing rent level and the rents paid by previous tenants. Many manufactured home community own - am and operators, however, prefer not to elim- inate these disparities entirety. 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 she -built housing, and homesite rents in competing nearhyymanuFac- tured home communities -in the local area.. Armed with this information, they by to main- tain a parity between the "all -in" cost of living in their manufactured home community versus: The costs of living in these alternative 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. Souiw: Leonard Sahfing, the Man ifartured Housirng Commrmfry IndusRy: Mo American Dream, He- FAgareered (New York Merrill Lynch & Co., Febmry 6. 1995). 302xmy 1996 e Urban Land 37 I I I 1 L ' 38 ties was 37.8 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 multproperty owners suggest key planning guidance for would-be developers. In the 1996 Alkn Report, the average port- foho 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 (REM 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. Urban Land e 7anuary 1996 As a general rule, investors prefer to buycommu- 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, hilly 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 perfomnance.. 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- 1 Financing Manufactured Home 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. tenders 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 THA's1207W 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- munibesand to expand and improve existing MHCs. The 207W program insures loans of up to 90 percent of the project's value for 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 homesfte are possible. A 207(nd loan can be used as a con - strucfion loan and mini -perm, allowing develop- ers to refinance With a new lender once the property is fully occupied and the cash flow is stabilited. 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 thar sold bonds to underwrite the desired new man - ufacrured 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 $l 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 (M% the property would need to have at least 90 homesites to interest the lender ($15,000 a site x 0.75 LTV = $11,250a 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 die 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- pies include California redevelopment agencies' setasides of 20 percent of their annual property tax revenue to increase, improve, and preserve low -and moderale-income housing; housing authorities' substantial federal resources (such as community development block grantalloca- bons) that must be spent on activities [hat 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: Un Working. Paper. "Manufactured Housing, An Affordable Alternative," 1995. turions 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 tumover. The remarkably low OER gives the developer /owner at least 2 10 to IS 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. d• George Allen, a manufactured bousneg indusny rouniltmu, is founder and owner of Indimtapolis -based GE A4mmgetnent, fire.; PAIN Publishing; and Seale Aelodel Homes. He is atthor of several?Tal estate — related texts, irxhuling Development, N•lar- keting, and Operation ofa\tlanufactured Home Communi- ties, published in 1994 hyyobri Wiley 1 Sons (avrtilrihle through ULI) and the upcoming How to Find, Buy; Manage and Sell a Manufactured Home Community, scheduled for release by ,%bn Wiley & Sons this yea: .7anualy 1996 • Unbars Land 39 i 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. I Real estate for bargain hunters BY Thomas Easton IN KFAL FS I \ I I-, as In uncks, there are fashionable imestmcnts that trade at high prices, and there are untashion- able investments that don't. Rocke- feller Center is a fashionable piece of real estate. \lobile home parks tall into the other category. Which is the better investment? When Rockcieller Center Properties, the real estate investment trust that ossned the midto%vn Manhattan of- fice complex, %N as ot}ired to the pub- lic in 1985 at S20 a share, people rushed to buy. They ended up losing most of their capital. We'll stager that most investors will be better of busing unfashionable real estate. Mobile homes are as un- Nat; P ' Done buildings, done malls, now doing mobile home parks. II Forbcr ■ ]Line 17, 1996 MONEY GUIDE The REIT stuff Name Recent Yield — Dividend'— funds — Per site— price total currently from monthly prices taxable operations' rental portion Chateau Properties 2271, 7.1% $1.62 5157 $179 $283 $24,200 ROC Communities 24 6,8 1.64 0.94 L95 234 22,700 Sun Communities 261,. 6.9 1.82 0.95 225 239 23.100 With one of Manufactured Home Communities tail 6.6 1.22 0.61 147 309 27,400 tube you United Mobil Homes iR, 5.2 0.60 0.51 0.90' 250 17.000 gain liquidity 'Indicated payout for 1996. Nontaxable portion is a return of capital trill can ultimately give nse toa capital gains tar. 'Netmcomeplodepreciahon: end l8pillfe IBESest,matesforl99b xDebtoutstanding pluSmaiae• value of common slocN. °Companyestimale return. fashionable as anything we can imag- uhe. We went out looking for some- one to teach us the business. We found Nathan Benderson, a wealthy 78 -rear -old investor in Buffalo, N.Y. Forced to work while barer in his teens, after his parents had lost all their money in the 1929 crash, Ben- derson started out recycling beer hot - ties, then moved into breweries. From brewerics he got into developing of- fice buildings, strip malls and other real estate, along the way accumulat- ing a fbiTune likely to be in the nine figures. In today's rather firm real estate market, Benderson says that mobile home parks are among the best buys. Benderson orans six mobile [ionic parks, with spaces for a combined 4,000 homes. He likes to own big ones, large enough to justifi- a fitll- time manager on the site. He dc%-cl- ops the sites hinhself— buying the land, getting the zoning permission and bringing in water, electricity and sewage lines. Doing this work himself he expects will enable him to drtr 30% a year nn the money he has inycstcd in a park. Passive inu•cstors %A ho buy parks that arc already developed have to settle for smaller returns, closer to 10% a year for an unleveraged purchase- But that isn't bad for a stream of rental income that can be jacked up to keep pace v ith inflation. Benderson sans buyers can acquire developed parks For $12,000 per site, often with attractive financing by the seller. But you might he better off paying all cash and getting a better price. Without a mortgage, you are less likely to run afoul of tax laws limiting o ritcoRs for so- called passive investments. Here's what's in the deal for the park otyner. The park tenant n picalh• signs a lease for at (cast one rear for $200 a month, with a 5% annual increase on renewal. The residents have to spend $40,000 to $75,000 ti >r rile home. Hauling it elsewhere costs another $8,000 or more, so they arc loath to more out. Tumover in a typical park is usually nil, against 50% for an apartment complex. If a mobile home owner sells his home, the nets owner automatichltc assumes the lease. Rent control laws are not a problem except in New Jersey and California, and even in "Once the park is full, there isn't much to do, just pick up the monthly check." these sta tcs they arc tolerable because yott can get cost -of- living increases. Most tenants never even dream of skipping a rent payment. If they do, the lenders assume the hone and the rent payments. Mobile hone parks require a bit of maintenance, but only a bit. Mrny the lawn, plow some snow, maybe do a bit of repaving, collect the rent and Pay property taxes. "Once the park is fill, there isn't much to do, just pick up the month]\• check," says Benderson Contrast that with apartment buildings, there landlords are cx- pceted to do Conti n uc xrs m ai ntnhance on the paint, the elevators, the plumhing and whatcycr items fall onto an Cndless list. Gcort gc Alien, author of the tiarrthcoming Harr ht Find, Bray, Mantkoc, and Sella Manu- factured Hanel Cornmunity (Wiley, $75), estimates that Owners ofapart- ment buildings spend 52% of their rent roll on operating costs, versus 38% for mobile home park owners. Owvers of the smallest parks often live on -site and do all the work them- selves. 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 $1.5 million for such an establishment, depending on the rent roll and location. The smallest and crummiest parks can be acquired for as little as 55,000 a site, but there might not be enough revenue to hire a fill -time manager. And selling is a problem. It can be tricky to find direct invest- ments. A numberofstates have regu- laton agencies for mobile home parks and provide directories of properties on request. Classified ads appear in Tin•Jounial. TorMnga_-insFa•Mann- thctnred Housing I'rolctsionalr (800- 869 -0471, $35 a year). C Gorge Allen sells a newsletter (317 -888 -7156, $95 annual]\•). Another option, far less lucrative but a whole lot simpler, is to own shares in one of the five publicly trad- ed real estate investment trtrsts that specialize in mobile home parks (see tablr). I,Ook for a yield of 6% or so, with gout prospects for growth in the payout. As you can sec from the cffcc- lice per -site prices —and from yields well below the 10 %you could get on a park owned outright —the RFrrs tivCC you to give tip a nice piece of change to the middlemen. 140 Forbes ■ June 17, 1996 i � s 1 1 Development Proposal := . .,,,• . , Vr p -1. Marinapark Newport Beach, CA 1] February 4, 2000 f i The Bendetti Company �*�Js f' Ilk".. 1 1 1 � 1 ' The Bendetti Company 1176 Main Street Suite 100 Irvine CA 92714 y , t I 41� V- 0 PPW WFIL=' ?14 ■ Existing AA Site Conditions ■ 1 I Marinapark Request For Proposal I I ' INTRODUCTION Executive Summary 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. IWhile reconstructing infrastructure and "dressing up" the bayside courtyards of the mobile home park with arbors, the 1 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 City of 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 1,500 square feet, all on ground leased property. The homes will be a continuation of the architectural theme of Marinapark. 4. 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. 5. A 44 room luxury seaside inn which include 25 unique bay view rooms. 6. 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. 7. 9,000 square feet of small multi -tenant office space primarily serving the demand from the local community. 8. 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. IGROUND LEASE — The Developer proposes to enter into a 1 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 1 1 ' payment would commence approximately 40 months from IMarinapark'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. I 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 I I I ' 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. I. A sixty-five year ground lease with annual payments Istarting at $2,000,000 upon completion of construction. 1 11 1 • A 60/40 revenue sharing formula adding additional annual 1 revenues starting at $972,134. • A onetime $2,861,000 project profit from the sale of the SFD residences and SFA townhomes. I• 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. 1 J 1 1 1 ■ The Bendetti Company 1176 Main Street Suite 100 Irvine CA 92714 Inspiration Vision N WILLIAM HEZMALHALCH A R C H I T E C T S I NC. Project # 9926''4 DES* PP 0/0 1 THE NEW MARINAPARK VISION 1 It's not very often that an opportunity presents itself 1 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: 1 1 II • 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. I ' • 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. • 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. 1 • 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 18t" 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. 1 I 1 • Parking to accommodate these activities by a combination ' surface and half -tuck subterranean parking structure. 1 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. II �l ,1 1 ,MARINAPARK, Newport Beach, CA The Bendetti Company Site Plan �.r view �Y- s Innnnilnuuuil —41 j •�i J r r ,%Nv0. 1 `W I. •I _ I 4 v r ,MARINAPARK, M Newport Beach, CA The Bendetti Company WILLIAM HEZMALHALCH A R C H I T E C T S I N C 6� 3�� r a t Co MARINAPARKE Newport Beach, CA The Bendettl Company I /ut /qua�iibiai = ms MIA a MAN : . • :? _ �.�k �Q 6a�•:iS A WILLIAM HEZMALHALCH ' A R C H I T E C T 5 I N G Co MARINAPARKE Newport Beach, CA The Bendettl Company I /ut /qua�iibiai = ms MIA a MAN : . • :? _ �.�k �Q 6a�•:iS KA- Im. 1 1 1 1 f = NNIEiMV W.IO, n1, i WILLIAM HEZMALHALCH A R C H t T E C T 5 I NC y: l .I -Y� ,MARINAPARK. Newport Beach, CA The Bendetti Company t, T1 -4 AOL L I 1 ,MARINAPARK. Newport Beach, CA The Bendetti Company WIWAM HEZMALHALCH ARCHITECTS 1 NC. ,MARINAPARK. Newport Beach, CA The Bendetti Company Marinapark Development Budget PURCHASE PRICE 35,000 SF @ $ Land Area 10.71 Acre 466,528 SF Other: $ 20 PSF TOTAL LAND COST "EXHIBIT A" CONSTRUCTION COSTS Demo and Off /On -Site Work 17 2,800 SF @ 466,528 SF @ $ 4.75 PSF Common Areas /Landmarks Lighthouse 2 @ $125,000 EA Wood Planked Boardwalk 165 PSF Private Marina - Reconstruction 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 Fancily Homes - Detached 17 2,800 SF @ $ 200 PSF Townhomes - Attached 24 1,800 SF @ $ 165 PSF Private Marina - Reconstruction "EXHIBIT C" Visitor Serving Manna "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.1. Allowance: 2,450 SF @ $ 10 PSF Retail Office Shell: 11,800 SF @ $ T.1. 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.1. Allowance: 8,600 SF @ $ 20 PSF 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 @ $ T.I. Allowance: 16,995 SF @ $ ' Project Management Hard Cost Contingency TOTAL HARD COSTS ' SOFT COSTS Architectural & Engineering Feasibility/ Appraisal Soils & Environmental Development Fees & Permits Legal, Title & Closing Taxes & Insurance Marketing & Promotion Leasing Commissions Development /Construction O/H Soft Cost Contingency TOTAL SOFT COSTS DEVELOPMENT COSTS (BEFORE FINANCING) FINANCING COSTS Loan Fees 8s Expenses Ground Lease Pmts. Interest 85 PSF 1,444,575 60 PSF 1,019,700 $ 29,949,281.10 1% 299,493 4% 1,197,971 $ 31,446,745.16 3 % 4% 3% (Hard Cost) 5% 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 1 & attached townhomes TOTAL REMAINING DEVELOPMENT COSTS 1 1 $ 943,402 65;000 35;000 1,197,971 120,000 430,000 45,000 125,000 943,402 210,000 $ 4,114,776 $ 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 1 PROJECTED OPERATING INCOME t PROJECTED NOI Mobile Home Park Ground Lease - SFD & SFA Marina: Private & Visitor Seaside Inn Resturant Resturant - Galley Style Retail Office American Legion Hall P 1 1 COMMON AREA OPERATING EXPE Repair & Maintenance/ Marina Landscape Property & Lia. Insurance Property Tax Operation and Management Common Area Utilities Trash Disposal Ground Lease Payment TOTAL RENTAL EXPENSES NET OPERATING INCOME STABILIZED VALUE EXHIBIT "B„ „C„ "D" "E" E" '7" „F„ "G„ Yr. 1 Stabilized Net Operating Income Stabilized Cash on Cash Return 5% Debt Service (on Remaining Development Cost) Cash Flow Revenue Share, Ground Lessor 60% ASSUMPTION: 1,048,800 675,750 2,476,894 1,656,396 114,296 53,851 228,094 189,000 0 $ 6,443,081 125,000.00 30,000.00 27,000.00 78,000.00 322,154.05 36,000.00 32,000.00 2,000,000 $ 2,650,154 $ 3,792,927 $ 41,004,616 $ 3,792,927 $ 2,172,703 $ 1,620,224 $ 972,134.37 (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 Fbrhibit "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 areavell 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"). A, B & P SPACES 25 $ 1,151 C & D SPACES 22 $ 875 E SPACES 11 $ 819 CURRENT ANNUAL OPERATING EXPENSES CURRENT NOI 1 $ 28,786 19,241 9,012 $ 57,039 $ 684,465 123,204 $ 561,262 CURRENT CURRENT TOTAL CURRENT SPACE SPACE SPACES RENT /MO. RENT /MO. A, B & P SPACES 25 $ 1,151 C & D SPACES 22 $ 875 E SPACES 11 $ 819 CURRENT ANNUAL OPERATING EXPENSES CURRENT NOI 1 $ 28,786 19,241 9,012 $ 57,039 $ 684,465 123,204 $ 561,262 IMarket Support: Marinapark mobilehome park, Lido Penninsula Resort PROJECTED PROJECTED TOTAL PROJECTED SPACE SPACE SPACES RENT /MO. RENT /MO. 23 $ 2,200 $ 50,600 20 $ 1,700 37,400 9 $ 1,600 14,400 $ 102,400 PROJECTED ANNUAL $ 1,228,800 EST. OPERATING EXPENSES 180,000 PROJECTED NoI $ 1,048,800 IMarket 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 BALE UNITS PRICE FEE PROFIT (i) SFA 17 $ 725,000 $ 36,250 $ 130,500 SFD 24 $ 425,000 $ 21,250 $ 106,250 (i) A one -time development profit GROUND LEASE AS TOTAL PERCENT SALE OF SALE PROFIT PRICE $ 2,218,500 2,550,000 $ 4,768,500 (i) 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 SExhibit "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. I Private Manna 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 1& 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 I Exhibit "C" Private Marina 1 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. I I I I 1 I ' 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 T.O.T. T.O.T. of Rooms Rate Rate Revenue Revenue Rate Revenue Bay View Room 25 $235 70% $123,375 $1,480,500 Courtyard View Room 19 $185 70% $73,815 $885,780 TOTALS $197,190 $2,366,280 10% $236,628 30% Hotel Management, Operation and Expenses $ 709,884 $1,656,396 Exhibit "E" Restumnt I ISummary 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 1 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. IMarket 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. I I i J 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. Taming - 6 to 12 months I 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. 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 1 I • 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 & 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. n Ll II II II 4 WILLIAM HEZMALHALCH A R C H I T E C T S I N C. FIRM PROFILE 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. 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 M 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 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. ' Land Planning FIRM SUMMARY Design Architecture 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 1 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 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 �L� Meeting Date: August 22, 2000 Agenda Item No.: 22 Subject: RESPONSE TO REQUEST FOR PROPOSALS FOR FUTURE/USE DEVELOPMENT OF MARINAPARK. PROPOSALS Newport Bead 2e art Prepared by developer Sutherland Talla Hospitality Full Map of "The Regent" Newport Beach Resort Is Located in the File "AME RD ENV? Newport3eac,YV?ey)*t J J i' I' J J J I I i 4500 Campus Drive, Suite 500, Newport Beach, CA 91660; (949) 757 -1661 Fox(949) 660 -1151 TABLE OF CONTENTS PAGES 2 -5 PAGE 6 PAGES 7 -S 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 1 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 Camws Drive, Suite 500, Newport Beach, CA 926W (949) 757 -1662 Fax (949) 660 -1252 2 I 1 [1 1 1 1 "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. 15' 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. ' "The Regent' ' Page 3 6. Development schedule. ' 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. proposal. 1 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 3 ", 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 p709,33 1.00. c. Property tax. 1. Based on improvements made to the property totaling $ 30,000,000.00, and a property tact 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 3". 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 Interest" on page 46A of original of proposal. ' 4 1 "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 fast 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. Sin ce rel 1 Step R. Sutherland ■ Partner II II II R1'1 x F m ROnT DOCK DOR J 6 r i • • l a / r PreparN by d..OoNn .Sutherland Talla Hospitality H 4Wy S y F SCHEMEI • BWLBING AREA: IRO,122SF. • SITE AREA: a7,MSV. FAR: M."% 7y� j��-r� tt f 2 LE Rf ( r FFN / SCHEME.2 • BUJLDINCAREA: I00,112W. Newport8ea.ch.Resort- • S1TEAREA: • FAR: 322.7"SF: 31.0% J 6 r i • • l a / r PreparN by d..OoNn .Sutherland Talla Hospitality H 4Wy S y F I I 1 (JTTf C,J+rAEAJ-% -I- 1. T H E S P Q R T;S C L U B C O M P A N Y T 11L SFOR Is Ci.l'RIL4 - Till SRO R Is C1. l'.N II K %IA1 - RI Y,POA $1'ORIs CI. I'R}$V - TIIE SF(U"IN CL E'RI I.o VF(:A( 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, z:9 ' Mike Talla CEO MT:rab 1 Enclosure 1 1 1100 Santa Monica Boulevard • Suite 300 • West Los Angeles, CA 90025 (310) 479 -5200 • Fax (310) 479 -4350 7 II THE SPORIT S CLUB/IRVINE ' ".Simply the finest sports and fitness complex in the World. " • 130, 000 sq. R. Sports and Fitness Facility Sister Club to The Sports OubAA and Reebok Sports Club/NY • 14, 000 sq. ft. stateof- the,art Coed Weight Training Gym • Two 1, S00 sq. h. Exercise Class Studios • 15 yard Outdoor Pool for lap swimming • Cardiovascular Deck — 5, 000 sq. ft. of computerized training equipment • Two full court regulation - size Basketball and l/otleyball Gymnasiums • Spin • Private Training • Treadwall Rock Climbing Simulator 11 8 • Racquet Sports. I 2 Regulation Racquetball Courts 4 International Squash Courts 1 Outdoor Paddle Tennis Courts • Toni b 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 • Goff Sky Tee Yoga • Sports Bar d Grill • Sidewalk Cafe • Conference Rooms • SponsMed/Ilvine - 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 QR Neu7mal BeachPmjecdan Pat,k ProRmed Reveal NewBar( Beach 0714201R1 1:48 PAS O10•Year Proiectiuns REGENT I \TERNATIOYAL HOTELS 20D3 2004 5005 2006 2007 Namberof Days OpeVYw 365 365 365 365 365 AveilaDk R., (Daily) 156 156 156 IM 156 Available Rooms.(Armuelly) 56.940 56,940 56,940 56,940 56.940 Q:cupmey Percentage WIM-6 70.0% 75.0% 76.0% 76,0% Oceupicd Ronms(Anavally) 37,580 39,858 47.705 43,274 43,274. A.., Daily Raw 5350.OD 5367110 5378.00 5390.0 5401.00 REVENUES Amcum Ratio Amount Ratio Amoonf Rods Amount Relic Amount Rail. Rooms S13.03,100 55.7% S14.627.90D 5618% 516,142,500 57.5% S16.11i 57.7% SI7.353,000 37.7% Yeeks(two visage) 5443.676 1,9% 3456.986 1.9% 5670,695 1,7% 5414,816 1.7% 5499.361 1.7% Food 4,906,500 20.8% 5,228,000 20.3% 5,609,200 30.0% 5,923,700 ;9,9% 5,99BA00 19,9% Betaag4 2;699,200 12.36 3.089,209 .12.0% 3,314300 11.8% 3;440110 ILM %544,400 1.1.8% Spa 1.115.100 4.7% 1,18B,170 416% 1,274.800 4.5% 1.323500 4,5% 1 .363.20D 4.5% Telepbonn 660,400 2.8% 708,DDO 2.8% 764,900 2.1% 795.200 2.7% 819,100 2.7% Mina Operened D paAmenN 236,40D 1.0% 251,600 111% 270.200 I.0% 280500 1.41°6 289,000 1.0% Rents &.Other Income 179,500 0:9% 190,700 0.77. 203,9DD 0.7% 211,600 0.1% .216.000 0.7% TOTAL. REVENUES 52303.876 100.0% $25,740,686 100.0% 528.50,691 100.0% S29;237,516 1000% 530,084,461 100.0% DEPARUIENTAL RXPENSFS Rmma 52,801,200' 212% S2.%'3.100 20.3% S3. 161.560 19.6% S1,278,000 19.4% 53,376,400 19.5% Yacbs(two vimage) S133,103 30.0% 5137,096 30.0% 5141,209 30,0% $145,445 30.0% S299,616 60.0'A Food &8e,wMc 6,957,900 89.18 6,038.500 92,2% 7.138,9110 80,0%. 7,372,700 79.6% 7,593,990 79b% Spa 1,068,400 95876 1,106;500 93.1% 1,147,200 90.0% 1,183,200 89.4% 1,218,700 894% Telepfiom 396,300 ISM 424,800 60.0% 459,000 60.0% 477,200 60:0% 491,500 60.K Other Deparimenls 141,800 60.0% 151,100 60.0% 162.200 60.0% I68AN 60.0% 113,400 60.0% TOTAL DEPARTMENTAL EXPENSES S77.491,703 48.7% 511.624,996 45.2% S12210,009 43.5%. 512;624,945 43.2% S13,153,416 432% HOUSE PROFIT 512,093.173 51.3% 514,115,690 54,8% SPS,370,687 56.5% 576,612,571 56.8% $16.931044 56.3% IINOLCO[OI aEugP .TIN •FXPFNm Admiamnstive &General SI,785.500 7A% 51,731,500 6.7% 51,801,500 6.4% S1.859200 64% $1,915.00 6,4% Marketing(Tmq 1A29,700 6.9% 1.455,300 5.7% 1.524,30D 5A% 1575.300. Mist 1.622.500 5.4% Energy & Utililies 448,3011 1.9% 465,500 18% 484.300 1.7% 499800. 1.7% 514,800 1,7% Pmpery Opsratiens &Maialedmee 939,100 4.0% 991,100 3.9% IA53,2DO 3.8% 1.091030. 3.7% 1.124.000 3.7% TOTAL UNDISTRIBUTED EXPENSES S4,802600 20.4% 54,644,100 18.0% $486330 17.3% .55;025.600 171% 55,176,301) 171% GOP' 57,292,573 30.9% 39.471,590 36.8% 310,977.397 391% 511,596,971 396% $11,754,744 39.1% Management Feb 5707800 3,0% 5772,200 3.0% 5841.900 3.0% S877JIM) 3 .0% S90',500 3A% 7BFC $6,584,173 27.9% 58.699,390 33.8% 50.135,887 36.1% .510,709871 35.6% S10,952,244 36.1% '..T....jj1 FIXED CHARGES Loam S1.200,000 511% SL400,000 3.4% 51,40000 5.0% 51,400.000 4:8% $1.400,00(1 4.7% 1 Property Tn. 330,001) IA% 336;600 1.3% 343,332. 1.2% 350,199 1.2% 357.203 1.2% rlBaumm; 175,600 0.7% 180,800 0,7% 186,300 0.7% 191,900 0.7% 197.600 03% Reserve for Replacement 235900 1.6% 712XO 3.0% 841.500 3.0% 877,100 3.D% 1103.400 4.0% TOTAL FIXED CHARGES SI.941,59D 9.2% 52.689800 10.4% 52,771,132 9.9% 32819,199 9.6% $3,158.203 10.55: EBITDA 54643,273 19.7% 56,009.790 23.3% 57 ,364,755 26.3% 57.890673 27:0% 37,696,11R 25.6% Tine abo%v PmjWions for the pf0pmed.Regem are based upon Mumptions and Wimates Ihalme svbjea an ancertaivy and .ariation. In addition. Regent makes assump0ans as to the futavc hdoviwoTemuumars and cha iteneml eeenomy. w'hieh ave hFoly uncerlarn: 3hesefine, Regent makes no,,.mry, of my kind, Thai The Projections will be achieved. Page 1 of 2 _ _ M M M M M M 0 Ritain INTERNATIONAL HOTELS Narobcr of DaysOpen/Yeea Available Rooms (Daily) A,a ldlc Romps (AOnuelly) Oecupancy Pervntlega Occupied Roams (Annually) Aveaage Bally Rase RF,�}7 IFC Room: Vachle (M.v it ar e) Food Beverage Spa Telephvee Mium Operated Depemaenla Rana & Other Iar'al m TOTAL. REVENUES DEPAIITMENIAL EXPENSES Rama Yaphls (two yinlage) Food & Besa W Spa Tclaphone Olher Dcpm9aenH TOTAL DEPARTMENTAL EXPENSES HOUSE PROFIT UNDISTRIBUTED OP ATIN .NSES AdminiltratiVe & General Marketing (rolat) Energy & Utililies Property Operation, & Maln2nam'a TOTAL UNDISTRIBUTED EXPENSES GOP M nagmanl FCCa IBSC FTXFD GNARIS Laasea Property Taa4a Insurance Resesve for Replaeemenl TOTAL FIXED CHARGES 2908 165 156 56,940 76.0% 43,274 84 13.03 2009 365 156 56,940 ]6.0% 43,274 S425AZ Amounl Rato Amaadl Ratio $17.873.600 57.7% 518;409,80(I 57.7% 5514,342 1.1% S529;772 1.7% 6,178,400 19.9% 6,363,800 19.9% 3,650,700 11.8% 3,760200 11.8% 3.404.100 4.5% 1,446201) 4.5% 843,100 7.7% 169,000 2.7% 29].]00 10% 306,600 1.0% 224.500 0.1% 231,20D 0.1% 530.987,042 100,0% 531,916,572 100.0% S3 477,700 19.5% 5306.605 60.0% 7,821,600 79.6% 1255,300 89A% 506200 6o.M. 178,600 60,054 S13,548,005 43.7% 517,439.037 56.3% 53,582,0410 19.5% $317,863 60.0% 8,056,200 790% 1,293,060 89.4% 521/160 60.D% 194,000 60.0% $13,954.463 43.7% $17, 962.109 56.3% 2010 365 156 56,940 76,0% 47.274 $438.18 Amaam Ratio 318,962,100 57,71/6 5545,665 1.7% 6,554,700 1919% 3,873000 11.8% 1,489,600 4.5% 895,100 2.7% 315.100 I A'% 238,100 0.7% S32A74.065 100.0% 53089,50D 19.3% 1327,399 60.0% 6297900 79.6% 1,331.800 $0.4% 537,060 69.0% 1827.500 60.0% 514,373099 43.7% 518,M, %6 5613% 2011 156 56,940 76.0% 43,274 545137 AmouAl Ratio SIQ531,000 57.7% 3562,35 1.7% 6,751.300 19.9% 1;989.200 11.831. 1 534,300 4.5% 922,000 2.7% 525,300 10% 245.200 0,7% 533,8611.335 100.0% 53,800,200 19.5% 513] 221 60.0% 1.546900 796?. 1.371.800 89.4% 553.100 W,W. 195:200 69.0% 514.804,321 43.7% S19,056.014 56.34. Nn%pvrt Oeacb l9rojcc1lon pkCSls 07114OMD 1:48 Ph4 Approved b3,_ Date:_ 2932 365 156 56,940 76.0% 43.274 5464.87 Amounl Ratio 520,116,900 57.7% 5578896 1.7716 6.953;11DO 19.9% 4,108,900 11.8% 1.110,790 4.5 ... 949,700 2.7% 335.100 1.0% 252600 0.7% S34,916.196 100.0% 53.914200 19.5% 5347.338 60.0% 8903.201) 79.6% 1,413.000 89.4% 569.70D 69.0% 201.100 60.0% 315,248,538 43.7% S19,627,658 563% SI,971,50D 6.49. 32,071,709 6.4% 52092.700 6A% 52.155,500 6A% %2,220.200 6A% 1.671.265 5,4% 1(72r,400 5,11% 1,773,000 5.4% 1,824,200 3A% 1,801,000 5.4% 530.200 I.]% 546.400 1.7% $62300 1.7% 579,400 1-7% $ %,000 1.7% 1,157;700 3:5% 1.1944410 3 .7% 1228,200 3.7% 1365,000 3.7% 1,303,000 3.7% 55,331000 11.2% $5,491.600 17.2% 53.656400 17.2% $5,026,100 47'2% $6,OOIXO 13.2% S12.107,437 391% S12A70:509 39.14: 512.844.5" 391% 513229,914 39.1% 513,626,658 39.1% 5929600 346% 9937.500 3.0% 5966.700 3.0% 51,015,800 3.0% $1.066;300 3.0% SI1277;817 36.1% $11.513.009 36.1% $11,058,366 36,1% 512.214.114 36,1% $12.580,359 36.1% S1A00.000 4,5% 51,400,000 4.4% S1A00,000 43% 51:428001) 4.2% 51,456,560 4.2% 364,347 1.2% 371,614 1.2% 379,066 12% 366,646 1.1% 394.381 1.1% 203,500 0.7% 209.600 0.7% 215,900 0.1.% 222,400 0.7% 229,[00 0.7% 1339.500 4,035 1276,110 1.0% 1-315.000 4.0% 1354,400 4.035 t,395,000 40% 53.20734] IOA5 S3257.934 10.2% 53309,966 10.1% $3;391448 10.0% 57,475041 10.0% ROITDA 37.970,490 25.7% $3.255,075 25.9% 58,548400 26.0% $8,822066 26.1% 59:105)18 26.1% The abmx projections for the proposed Ragan, are based upon a mpticvs and eslimales Ihm we mbkd IQ unxrlaialy and variation . in adddimi, Regantmakes assumptions es to the falma behavior or consumer andthe gencrAaom Y.%hicb are highlyuncertain. Therefore. Regan makes no warranty. of any kind, that the pmicetiaos will be acbieved, Page 2 of 2 10 June 28, 2000 Mr. Stephen Sutherland Stephen R. Sutherland Company, Inc. 4500 Campus Drive Suite 500 Newport Beach, California 92660 Dear Mr. Sutherland: KF CONSULTING 611 Wilshire: Building Suite eoo .Los Angeles CA 90017 Telephone (213) 680.0900 Teletax.(213).623 -6240 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, 1:8' Street to the west, 15`h 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 1 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`h Street. 1 ' 11 1 A wholly owned subsidiary of .Hospitality Asset Advisors International, Inc. a 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. ' ➢ 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. ➢ 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 1 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 Canpany, Inc. ' Regent Hotel, Newport Beach i3 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 1.28 128 128 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 Company, Inc. ' Regent Hotel; Newport Beach 14 S 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. l Hictn6ral Mar4nf PnrFnrmanrn of f6n rmmnp i}iva Snnnly - Yiu ref Ieo[S the penod trorn January through ApnI Source: PKF Consulting Stephen Staherlond Company, Inc. Regent Hotel, Neyvport Beach 15 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* 1160,965 N/A 125,031 N/A 77.7% $277.53 N/A $215.58 N/A 00 ytd* 1178,850 11.1 % 139,997 12.0% 1 78.3% 1 303.65 9.4% 237.69 10.3% - Yiu ref Ieo[S the penod trorn January through ApnI Source: PKF Consulting Stephen Staherlond Company, Inc. Regent Hotel, Neyvport Beach 15 6 ■ 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 I Ratio Commercial 80,100 21 Leisure 125,900 33% Group 172,000 46% Total 378,000 100% 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, Inc. Regent Hotel, Newport Beach 16 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 Company, Inc.. Regent Hotel, Newport Beady 17 I Commercial 5,800 The Regent Newport Beach 0 0 0 0 0 Competitive Market Leisure 11,900 12,400 18,700 Estimated Future Growth in Lodging Supply and .Demand 0 0 0 Group 2000 -2009 18,600 28,100 19,400 8,800 2000 2001 2002 .2003 2004 2005 2006 2007 Additions/(Deletions) to Supply .46,800 38,800 17,600 0 0 The Regent Newport Beach GROWTH RATES 130 28 Four Seasons Hotel Newport Beach 5 5 Commercial 10.0% Casa Del Mar 128 3.0% 3.0% 3.0% 3.0% La Valencia 1.5 13.0% 12.0% 10.0% 8.0% SI. Regis Monarch Beach Resort 5.0% 133 .267 4.0% Group 15.0% Treasure Island 8.0% .138 137 6.0% 5,0% 4.0% Balboa. Bay Club PROJECTED DEMAND 129 Bacara Resort 133 267 Commercial 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% 17.4% 6.6% 0.0% 0.0% 0.0% I N DUCEDAU NSATISF I E D) Total 93,900 98,600 102,600 105,600 DEMAND 112,100 115,400 118,900 Growth Over Prior Year 17.2% 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 13.0% 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 1.2,400 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% 5.011. 4.0% 4.0% Group Demonstrated 197,855 234,925 273,808 323,041 362,988 390,377 405,992 422,232 Inducedt(Unsatisfied) 11,900 18;600 28,100 19,400 6,800 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% 41% 3.9% 3.9% Market Occupancy 79% 74% 68% 65% 66% 69% 72% 75% Source: PKF Consulting. Stephen Sutherland Company, Inc. Regent Hotel, Newport Beach I 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. 1 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 1,163,620 0.0%: 870,500 3.9% 75% 377.00 3.0% 282.03 7.0% CAAG 1 30.3% 9.5% 1 1 3.2% 1 2.4% Source: PKF Consulting ' 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. 1 I Stephen Sutherland Company, Inc. ' Regent Hotel, Ne}i port Beach iy 10 Stephen Sutherland Company, Inc. Regent Hotel, Newport Beach . 20 The Regent Newport Beach Market Penetration and Projected Occupancy 2003 2004 2005 2006 2007 TOTAL ROOMS AVAILABLE The Regent Newport Beach 47,450 57,670 57,670 57,670 57,670 Competitive Market 1,089,525 1,163,620 1,163,620 1,163,620 6 1,163,620 s Fair Share of Supply 4.4% s 5.0 %5.0% m 5.0% ' 5.0 % ESTIMATED TOTAL. MARKET DEMAND Commercial 105,600 108,800 112,100 115,400 118,900 Leisure 262,900 290,100 304,600 31.6,800 329,400 Group 342,400 371,800 390,400 406,000 422,200 TOTAL 710,900 770,700 807,100 838,200 870,500 IFAIR SHARE OF DEMAND Commercial 4,600 5,400 5,600 5,700 5,900 Leisure 11,400 14,400 15,100 15,700 16,300 Group 14,900 18,400 19,300 20,100 .20,900 TOTAL 30,900 38,200 40,000 41,500 43,100 SUBJECT PENETRATION Commercial 110% 120% 125% 120% 110% Leisure 110% 120% 125% 120% 112% Group 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% 4201. Group 43% 41% 40% 41% 43% TOTAL 100% 100% 100°% 100% 100% Source: PKF Consulting Stephen Sutherland Company, Inc. Regent Hotel, Newport Beach . 20 11 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 0.09/ 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 5.0% 8.8% 3.5% 7.2% Source: PKF 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 r- Stephen Sutherland Company, Inc. ' Regent Hotel Newport Beach L1 t By Baltin Senior Vice President r- Stephen Sutherland Company, Inc. ' Regent Hotel Newport Beach L1 I 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. 1 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 bythe 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. 1 1 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 Sutherland Talla Hospitality Copyright 2000 All rights reserved 4500 Campus Dr., Suite 500, Newport Beach, California 92660 OwNw- Newport Bec c IZ"i" t • Nom, Prepared by developer: Sutherland Talla Hospitality A IT) WE le?E 4�iENrvj 4 ProposaLto -the City of Newport 8eachk 4500 Campus Drive, Suite 500, Newport Beach, CA 91660; (949) 757 -1662 Fax (949) 660 -1252 TABLE OF CONTENTS Page 3 Page 4 8 Page 9 Page 10 12 Preface Development Proposal/ Project Description Proposed Conceptual Site Plan 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/ ist 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 I t PREFACE Newport Beach is one of the finest beach communities in Southern California. Within a 1 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 t 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 "ME 12EGEN7 - N oRr BEACff "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 15`h Street to 18`' 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 "THE RE(7ENP'— NEWP01 - BEACH Rti=SORT will have a definite positive effect on the community and the City of Newport Beach.. :3 1 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 15'h and 18'' 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. 4- I Pg_2 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 77tt- R&jEN7NEWPORT 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 (15`h 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 1 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 1 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 1 -- 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"' Street public docking facility is not a part of this proposal. THE PROPOSED LEASE, TERMS & CONDITIONS: TERM: 60 Years PAYMENT DUE: Quarterly in advance 6 LEASE AMOUNT: Years one & two $ 800,000.00 Year three $1,20000.00 Years four — ten $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: GEO -TECH SURVEYS: CONSTRUCTION OF PUBLIC PARK: PLAYGROUND CONSTRUCTION: RELOCATION OF AMERICAN LEGION REDEVELOPMENT OF TENNIS COURTS ALTERNATIVE 1 By Developer By Developer By Developer / Maintenance & Insurance By City By Developer / Maintenance &Insurance By City By Developer, up to $500,000.00 Cost & Expenses By Developer, Insurance Rider by City for Public User's. Developer to pay Annual lease rate of $1.00. Developer to Maintain. 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 -- 7 . -w the existing facility, on the 18'h 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 Sutherland Principal Partner 8 = 4C x _J 1 1 Xc'�rEL �RFSVRr VILLA FIDRtiVrtAW NFpr"I RLALN.CALIFORNIA LO I r Inrinllr nir4 r.11 - ' a oY nM/.il. e.4norM IIMIw I ruan.wwlY 4d rN44 IIIII N.NMMN.TY II II.h nYN �IUF N^ ; e 1: 4lU4Qp4gp3 ! �rr1 >�J t�. 9 MrrL.�N rnM.1..r /I.�S.N C4'f Y0 IMI Ii r I.IINn nYM MII411N 1111111! UI r I r Inrinllr nir4 r.11 - ' a oY nM/.il. e.4norM IIMIw I ruan.wwlY 4d rN44 IIIII N.NMMN.TY II II.h nYN �IUF N^ ; e 1: 4lU4Qp4gp3 ! �rr1 >�J t�. 9 MrrL.�N rnM.1..r /I.�S.N 0 YOM � �£S01zT lilt L,4 flC?9FNTl1V4 NEWPORT BEACH, CAIFORNIA VIEW OF SPECIALTY RESTAURANT, INFINITY POOL AND TYPICAL VILLAS 0 MOTEL RESORT VIL L,4 �MRENTINW NEWPORT BEACH. CALIFORNIA VIEW OF TYPICAL VILLA AND ENTRY COURTYARD ' Jle�r/iez tw. Jiu�erlu�rd (�i h, N C O R. P O R A T E D ' IIOTEL • R15ORT 0E11111 4 UEVEIOPOF.PI A'rtflli(TPf • Mi�f.FT/:'rclltitl "4'1Y� nWIVT�M 4500 CMAPU 5 OR.. SUITE. 500 • 11 IMOIIT REACP, CA Q1P0" PNONF. (940) T5, „nn.f.Al. 1n4.1 nr,n.I)52 12 MrCAO If F IQ _4 _ h BEACH 0a4„111; (� 1 J i (NA' PA)? j J' 1 / 11.1 On ti PARKq.0 e Q 1 0� — — — — jL 'sK4' SE BWL ac — MOLIaE 1 f 1-1 G TENNIS COURTS. WEST C 4 �ln �j 4 k F 0 F f m I PLq Area by Use Summary City -owned Property 15th to 18th Street sa n. was use 58,611 L35 Amer &an Legion 111;200 .42 151n Streel Park 12.818 .30 May6rourM 60,846 1.39 TenNs Cousin 24,000 .55 Gil Scoul House 6 Museum 011re 186850 .RS Munlon Park T,c 186,011 l2i 'MarNe Party TraNer Court 55,,24 Lee inAdc eeacn N O. R T .H 423,06D 9.80 T.t.1 Scale: 1' = I200' Use WNrtivb. einuiehti Kee earl. skusaa a. "..a rcWt F,,ca. .ee . W w'kN LINE Nznlltncf�:ll D: LIEANDER F - - r� Z' F rte., h �'ES r 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: Construction 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 1 14 I 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 1 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" HE -more- Pg. 2 of2 — Stephen R. Suthedand Company Press Release ' Sub -level parking and around the clock guard -gazed 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 orjogging. 17 - ? Atlantic American Sells Embassy To CapStar PHIL4DELPHL 4.— Atlantic American Properties Trust, ._ based here. sold is interest in the Embassy Suites Cen- ter City to Washington. DC- based CapStar Hotel Com- pany. The 9-SS -suite proper- ty, located in the cites \Mar- ket Street West corridor, will unde -Le a S2.6 r. :llior. renovation.. Atiantit r-*ne :- can President ;amen Sal:. said the hotel was soic because the company is focusing on commercial and industrial real estate„ CapStar, which owns zna' manages 66 hotels, made its 27th acquisition since going public in August 3f-4OOr with the purchase. The price was not disclosed. CapStar recenth. comoietec the $60 million acquisition of two other hotels. the Georgetown Inn in Viash- ington, DC and the Radis- son Hotel & Suites in Chica- go from Philadelphia -based Amerimar Enterprises and New York n elo, or on & 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 H%TBUSIATES .REAL ESTATE built out by 2004. The firm has several hotel companies as clients, including Patriot American Hospitaliry, 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 M M M Nmemm, 7 -20. 5497 • Hs • 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. I A . t4o lit, TZ W OWN PT I rcr +• t - i oRL:PO CAS.A. S.A. L L 'ii Dt- GOLF BOSQUES M. cay HDTEL RG'crs; .^1exico cm DG�cx Otl'EIDPYEPT IAY El PAR L T'Tt _• I 1 1 1 Ex ansion y Re-fom�� : REFORMA • SUPLEMENTO COMERCIAL ; JUEVES 19 DE SEwnEMDRE DE198�^x:y,,. I que ofrece alta calidad de vida 1 II 1 11 "Club de Golf Bosques es un desarrollo resi- dencial que se ca- racte- riza por OfrcCer a sus residentes un estilo de arda dfferente ". nhrr nu lrrrr- v nu de m;i s de AOd mil mil- • Iro, c•n:ull :o- .dos.. so uhicun q um ves residen- cialos que ofmben In posihilidlid do un,, S Q lili, dv Vida .rnn ealid:ul, ra q 1.r el dosarrollo lntegrd Ins it avanrnilos sis4•mas de:i +¢lu•idad. nmiailns:I unn:{n•un oX, Iusiridad. Con todas I:u Antisfaroi ia.ex quo )a Vida modrrna rrquinrv. D E Cahn form, dinflada por The titephen souilloviund Co -, Cnt po 11ICONI'Lik. rurma. ,,III ° -1 I Aithulrias depurtnnu•nLdrq do 1V1 nn•tros rumtrailusrun 71nlmros de vstariimn- mienbi rndo min (dos pure 11nitan11`5 c rinrn pmpios): hodega, la"do do nntos. tres eleva- dores. planla de Joy. drrmm7gria'ia,'ry por ea- hIc y via satrlite. % liolip11rrtn. Ut rasn CIA diseliada poi el despacho li lanrisro A,Lilme :lrgnilrrbis. enema rm crow ranrhan dr tenis, Iris c:ulrbas do paddlr toil in, nllavrn. mstmlrnn- w" balrs. V Indus lo"""- oms nrr...al IN rIt mm ill - r' t:dncion doprinn:r nivel. u Ei rntonw del drsa -. molo, rnn n ramps. disriui V :onaammi• .I;l,- k.Nwklinls llosign.as( .` 11.1111, Ihs do, luliurn pars Y j1.., I �+ birirlenuI. intrgra rlemmuns clot, permitir:in it Ins reei- dontcs do I:IbU de Uol r Bnsgnrs nht1.n pr urli. rslilo dr Vida rnn elev'nda validad. drmrm dr mi 1.1.;6;111. lc. que lo.e pu�id ri c1. rnnolr - to permunentc ron la outuraleza. 19 I 1 1 11 [1 NEWS FOR IMMEDIATE 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 ", ia 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 1 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 tPresident 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 1 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- 2 0 ORANGE COUNTY OURML USES our2O 13 - 19, 1998 11.50 Construction near the Disneyland Hotel The Mouse Has Coattails Disneyland ■ By SUSAN DEEMER Expansion Fuels $4 Billion Entertainment Explosion 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 and trade show bookings through 2008. Anaheim and sur- rounding cities are building about a dozen new hotels in a 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 W 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 founderof the l0 - year-old company. The Newport Beach company, which pro- vides architecture, engineering and construc- tion management, began designingthe 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 ArehitecturelInterior DesignMumbasing/Constmction Management 4500 Campus Drive, Suite 500 Newport Beach, CA 92660 PH: (949) 757 -1662; FAX: (949) 660.1252; e -mail; Sl-SJJICagcOntentric.net lu t: I 4 .A/M"." SR.. /Cbrnr0nn!% I N C O R P O R A T E D 1 ..l �° ��r 1 J wo i 6 Elle�/rez E.IP.. Jict/irrGzar� C'ony6rrs�y N C O R P O R A T E D MOTEL • NE60E1T DESIGN 6 neVELOPYENI .WOERtl N • B4l� • ala� w40B4H 4690CAMPUSON., SLATE SOO• MCWPONTSPACN. CA 92660 PONE (14 9) ?5?-1602 • EA%. (949) 660.1252 I 1 ' FOR IMMEDIATE RELEASE FOR MORE INFORMATION: Brian K. Theriot Vice President, Client Relations ' (949) 757 -1662 CARLSON HOSPITALITY WORLDWIDE & CARLSON LIFESTYLE LIVING ' SELECTS STEPHEN IL 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. 1 Stephen R. Sutherland Company is an architecture, interior design, purchasing ' and tum -key construction management company located in Newport Beach, California. SRSC specializes is services to the hotel & resort industry. ' -END- # 27 \i 1J. CARLSON PARK -SAN ANTONIO u _ r. • ;-� - ri r LOUNGE /BAR m m m m = m = = m m m m m m m m m m m CARLSON PARK -SAN ANTONIO MAIN ENTRY .Mqk4,- $R_kffAw.06.f(_,j*w N C 0 R P 0 R A 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 DASHMLL 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." 3 0 1 1 1 1 1 1 I 1 1 1 FOR IMMEDIATE RELEASE, FOR MORE INFORMATION: Brian K. Theriot Vice President, Marketing (714) 757 -1662 NNE, '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- 31 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 Pg. 2 oft — 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. - 32 A A WE S T C 0 AST NO T E I. W W :A >algc) t. v. j 1 u a` 7 THE VILLAGE AT CABO REAL CAD) SAN LUCAS, &C %_ MF.\ICtt- I w PARTIAL RI ILDING ELE \'ATlll\ . B PARTIAL III ILDISG F.LE \'ATIO\ - \ aAp THE VILLAGE ,f (:.48 AL CABORFAI. ._.` 1 1 THE S PO -i `Simply the finest sports and fitness complex in the World. U B I I A V I N E • 130, 000 sq. R. Sports and Fitness Facility • Sister Club to The Sports ClubltA and Reebok Sports Club /NY • 14,000 sq. ft. state -of- th"rt Coed Weight Training Gym • Two Z 500 sq. ft. Exercise Class Studios • 25 yard Outdoor Pool for lap swimming • Cardiovascular Deck — S. 000sq, ft. of computerized training equipment • Two full court regulation - size Basketball and Volleyball Gymnasiums • Spin • Private Training Treadwall Rock Climbing Simulator 35 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 /Irvine - Physical Therapy and Wellness Center • Outdoor Sundeck • Lessons - Racquet Sports, Swimming and Golf • Nutritional Counselingl 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 .�' L2 "Simply the finest sports and fitness complex in the world. " Reebok SPORTS CLUB /NY • 14Qo00sq. ft. Sports and Fitness complex • Sister Club to The Sports Club/LA and The Spores Club/Irwne • Four Fuly Equipped Weight Training Gyms • 150 Piece Computerized Cardiovascular Center • Two Z, 500 sq. ft. Exercise Class Studios • Cycle Reebok® • JuniorOympic Swimming Pool with underwater music system • The Grill at Reebok Sports Club/NY • Paul Labrecque Salon and Spa • Edge Training Aerial Ropes Course 36 • Two regulation -size full court Basketball and Volleyball gymnasiums • Rooftop In -Line Skating and 6-lap to the mile Running Track • 40' Rock Climbing Wall • Core Training - Dilates based exercise • Complete Spa Facilities For Men and Women including Steams. Saunas and JaCUMS • Personalized Instruction • Private Trainers • Yoga • Large, luxurious Locker Rooms with Towels provided • Sidewalk Cafe • Conference/Meeting/ Banquet Facilities • Spacious Outdoor Sundeck with spectacular city views • Activities Director • Fitness Evaluation Center • Nutritional Counseling/ Registered Dietician • Martial Arts and Self Defense Classes • Sports Coordinator • For Kids OnV Child Care Center • Pro Shop • Executive Business Center • Dry Cleaning, Tailoring and Shoe Shine Service • Training Center of Reebok Professional Athletes 160 Columbus Ave. New York, NY 10023 (212) 362 6800 T H E S P C C L U B/ L n ".Simply the finest sports and ' fitness complex in the World. " • rwu c, wv 3q. u. Aerobics Studios • Junior Olympic Swimming Pool with 8 individual lap lanes • Cardiovascular Deck with over ISO pieces of computerized cardio- vascular equipment • Full court Basketball and Volleyball Gymnasium • Rock Oimbing Treadwo • Rooftop Driving Range 3 rr r�rumr ry �iconr; Saunas and Jacuzzis • Martial ArtvSelf Defense Classes • Executive Boxing Workout • Private Training • Lessons - Racquet Sports Swimming and Golf • Yoga • Large Luxurious Locker Rooms with Towels Provided ncyuia cu ✓rnrvorr • 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 rMA(�Es OF 2E(�ENr T(OrELS FIROM A/24LLND T}fE W012LD Preced p,& wily a letter fronvthel Pre4ae nr of RegevitIntzwnatt&na/Rote kto-the.May&rof Newport3each• 39 REGENT INTERNATIONAL HOTELS I'It I 111 ♦i L\ 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 bttroduce 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 f e you have any questions, please feel free to contact me at my office in Minncs is�Ve look forward to Regent joining your community. 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 1: 11: 1. 51IN P \ItKW %). I'. Q. 1111\ S')11'/. At IV N NA P411.1 i. MINN CS0 I'A. V.i4. �i 5� I., 9.82.1.1 l'1'I..: 141 -191 3A 00 1': \C. :6l °_1 L'IL -33So IN'r 1:8 N r:'r: ph��:�. I. I.., „u. - -- 4 0 1 1 m . - ` J r . SZ it u1 �IQi 'llii4�' . � 1 � � � �ullj //1/• � _ ��I�1Y'll�� Il► �` IIII�I' I�i11�1h 1 �1� Y , MW Mw� r �M� i i r I O ........ ... rymmrl/ iu npral .bm nwr r and h.,rwe rurvrmJ hp flap; I:a!¢' .IWIIAVU r�.'yln4 w..r.r ti,•rmlr �r "I dn�p�Y�rrrr,.Yrra.w ryml mrr! nmr.rul .n IOr .WU '-Fmo-r O."' me by hr;b. IanJ -� dpJ p.vJ. i�. E�p.rinlrrlY frYlntl meelrnq .�nrl .....rues.. 43 ..weoY roY� umeY..on.r.oe weN ml ...woe.o.r•.,.r tLNrrrlyd ru rn- Ypalien irn4 lYlrt IINN.a,h InemmGmYl.7br kryrnl Rrwr (7Mirrf .Ud lnmir CInF n� e nwhnlQ,Wiliuu ler Lxb lxgmnm and rwvr w�YrmldrJv,l leap+• i rtnumr q FcJIL .m.l F „arty �nvr.. .m� ul.n,nvil.rMr, ur.ludlnp Fv Wr. Iha IrfJN1 ,MJlrr .rr:vrrN111rnrt.y. YNJ ,W,'l, IbYr .md Ar Jhh mau.ryr 44 n' I 1 1 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 1 1 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. 1 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. 1 II II II II II II II 45 C I1 f1 - 46 Consolidated Balance Sheets December 31, 1997 and 1998 The Sports Club Company, lac. II' (in thousand'. except shm t, aniounls) ASSETS 1997 1998 Current assets: Cash and cash equivalents .............................................................. ....... ........... ............. $ 1,581 $ 2.233 Accounts receivable, net of allowance for doubtful accounts of 5385 and $215 in ' 1997 and 1998, res pectively .................................. ................................................... 2,072 2,480 Inventories...................................................................................... ............................... 813 1.527 Othercurrent assets ........................................................................ ............................... 354 569 Due from affiliates ......................................................................... ............................... 106 234 ' Total current assets ................................................................ ............................... 4,926 7,043 Property and 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, respectivelv ................................... 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 $ 7,746 ' Notes payable to bank .................................................................... ............................... 5,000 -- ' Accounts payable ........................................................................... ............................... 948 2,273 Accruedliabilities .......................................................................... ............................... 7,985 6,227 Deferred membership revenues ...................................................... ............................... 9.936 9.953 Total current liabilities .......................................................... ............................... 26,844 26,199 1 Notes payable and capitalized lease obligations, less current installments ......................... 42,823 1 8,755 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 out standing .................................................................. ............................... 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. I1 f1 - 46 ' 02/01/2000 16:14 7148339217 PAGE 01 1 1 Fzhruary 1 2000 ' 1.7A rACSL14ILE: (94 9) 660 -1252 Mr Stephen R. '-�utherland ' SUTHERLAND-TALLA HOSPITALITY 4500 Campus Drive, Suite 500 Newport Beach, CA 92660 ' Ref The Regent Newport Beach 2 Pa?k Plaz . Satre 700 f,vine, CA 92614-3517 Direct Li:aG 949.2524519 FWv 949.833.9217 •ntSa G�s@bu rnh" ••: +ee ler ts[c. eon: ' Dear Steve: On behalf of Scott Calder and myself, thank you again for taking the time 10 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 "Burnham" 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 would feel comfortable in recommending a conditional request for financing. 1 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 look forward to working with you to secure financing for your hotel project. Very truly yours, Barry J. Nicholas, Jr. Investment Officer I Tnusacsioo Services I Asset Services I A6visory u Coasulging, Services Devclopmeas Services I Corporate Services I ' Gpital Markers Member Commercial Capital Alliance 46A li Barry]. Nicholas, Jr I,i v.,,n: ni (Ilhrrr r,..,l C•i,�rr F.,...,.,. NHAM ; w, NEWS RELEASE BUR bleinF<r Commercml C. ,,A A116G ,, .... hap,,r I „i,m....... BURNHAM SECURES $$0 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, 1 capital markets; asset services, advisory and consulting, corporate services, and development ' and construction services. The Burnham web address is www.johnburnham . com. 4 6' A' BUIRNHAM CAPI ru. \I% RN ff, Burnham is a 109 - year -old real estate services firm with headquarters in San Diego, and offices in Orange County and the Inland Empire. The 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)IFortis 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 r(?-, Stephen R. Sutherland Company, Inc. ARCHITECTURE e ENGINEERING • CONSTRUCTION MANAGEMENT RE(�EN r September 7,1999 NEWPORT BEAC74 RESORT 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 AUNNA 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 ............................................... ............................... $ 1,200,000.00 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 Be CA 92660; Tel: (949) 757 -1662; Fax: (949) 660 -1252 II II II STABILIZED YEAR REVENUES / EXPENSES STATEMENT YEAR 1 Projected Income from Operations (see pages ) Expense Statement ' Salarys & Wages 980;222.00 Maintenance & Laundry 800,000.00 Ground Lease Cost (year 1) $ Management Fee Reserve for Defered Maint. II' Supplies Advertising & Promotion $ Interest ' Utilities $ Insurence I' Food & Beverage Cost Depreciation & Amortization 784,178.00 TOTAL EXPENCES TOTAL INCOME NET INCOME $19,604,450.00 $ 3,528,801.00 $ 980;222.00 $ 800,000.00 $ 1,960,445.00 $ 588,133.00 490,111.00 $ 294,066.00 $ 1,600,00.00 $ 245,055.00 $ 392,089.00 1,960,455.00 $ 784,178.00 $13,623,555.00 $19,604,450.00 $ 5,980,895.00 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. 5 16,784,850. $ 58,034,387 5580,343. 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 5I2,600,000. PROJECTED 10 YEAR REVENUE TO THE CITY OF NEWPORT BEACH $29,965,193. 49 ' PROJECTED INCOME FROM OPERATIONS 1 ' 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. - 50 Newport'8eadv1Zefit 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 1/o= SUB -TOTAL GUESTROOM REVENUE PROJECTED REVENUE FROM MARINA 10 Yachts In Transit x Average Rate $225.00 x 365 Days x 50 1/o= SUB -TOTAL MARINA REVENUE PROJECTED REVENUE FROM FOOD & BEVERAGE 51 - $ 9,134,125.00 $ 3,321,500.00 $ 651,525.00 $ 472,675.00 $13,579,825.00 $ 410,625.00 $ 410,625.00 Pg.2 Main Restaurant $1,800,000.00 Speciality Restaurant $1,314,000.00 Room Service $ 500,000.00 Meetings & Banquets $ 500,000.00 Weddings & Events $ 500,000.00 SUB -TOTAL REVENUE FOOD & BEVERAGE $4,614,000.00 PROJECTED REVENUE FROM SPA $1.000.000.00 TOTAL PROJECTED REVENUE FROM OPERATIONS $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 % _ 40 Double Queens x Average Daily Rate $341. x 365 Days x 71% _ 6 Full Suites x Average Daily Rate $446. x 365 Days x 71% _ 2 Vintage Yachts x Average Daily Rate $971. x 365 Days x 61% _ 10 Yachts In Transit x Average Daily Rate $236. x 365 Days x 51 % _ Sub -total guestroom sales Revenue from Food & Beverage Revenue from Spa Total Revenue 53 $ 9,720,716. $ 3,534,806 $ 693,485. $ 432,386. $ 439,314. $14,820,707. $ 4,8441700. $ 1,050,000. $20,715,467. 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. 1 - WEVOOW 110 Junior Suites x Average Daily Rate $358. x 365 Days x 72 % = $10,349,064. 40 Double Queens x Average Daily Rate $358. x 365 Days x 72 %= $ 3,763,296. 6 Full Suites x Average Daily Rate $468. x 365 Days x 72% _ $ 737,942. 2 Vintage Yachts x Average Daily Rate $1,019. x 365 Days x 62 %= $ 461,199. 10 Yachts In Transit x Average Daily Rate $247. x 365 Days x 52 % = $ 468,806. Sub -total guestroom sales $15,780,307. Revenue from Food & Beverage $ 590869935. Revenue from Spa $ 1,102,500. Total Revenue $210969,742. 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 4 110 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 - 55 $10,991,062 $ 3,996,750. $ 784,961. $ 491,633. $ 501,035. $16,765,441. $ 5,341,281. $ 1,157,625. $23,264,347. 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% _ 40 Double Queens x Average Daily Rate $394. x 365 Days x 74% _ 6 Full Suites x Average Daily Rate $515. x 365 Days x 74% _ 2 Vintage Yachts x Average Daily Rate $1,122. x 365 Days x 64% _ 10 Yachts In Transit x Average Daily Rate $272. x 365 Days x 54% _ Sub -total guestroom sales Revenue from Food & Beverage Revenue from Spa Total Revenue 56 $11,706,134. $ 4,256,776. $ 834,609. $ 524,198. $ 536.112. $17,857,829. $ 51608,345. $ 1,215,506 $24,681,680. 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. YEAR 7 110 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% _ $ 595,504. 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 $ 6,183,200 Revenue from Spa $ 1,340,095. Total Revenue $27,717,255. 1 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 %= 40 Double Queens x Average Daily Rate $456. x 365 Days x 77% _ 6 Full Suites x Average Daily Rate $595. x 365 Days x 77% _ 2 Vintage Yachts x Average Daily Rate $1,297. x 365 Days x 67 % = 10 Yachts In Transit x Average Daily Rate $314. x 365 Days x 57% _ Sub -total guestroom sales Revenue from Food & Beverage Revenue from Spa Total Revenue 59 $14,097,468. $ 5,126,352. $ 1,003,348. $ 634,362. $ 882,497. $21,744,027. $ 69492,360. $ 1,407,099. $29,643,486. 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 369 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 -- 60 - $14,969;526. $ 5,443,464. $ 1,067,625. $ 676,096. $ 678,610. $22,855,321. $ 698169978. $ 1,477,453. $31,848,362. 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 $ 791579826. Revenue from Spa $ 1,551,325. Total Revenue $32,612,198. 61 m iV M M ID Task Name Duration Year 1 Year 2 Ye 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter 1st Quarter 2nd Quarter 3rd Quarter Ch Quarter tat Quarter 2nd Quarter 1 Pre -development Planning. Design Development Financing Environmental Review Entitlement Coastal Commission Permit Processing Construction Ow 12w 20w 26w 26w 24w 8w 50w ; 2. 3 4 6 6 7 8 Project: Projectt Date: Mon 124100 Task '! Summary ^ Progress Rolled Up Task' Milestone . Rolled Up Milestone �\ Rotted Up Progress Page 1 M M M = M = M M M M M M M = M M = = M ID Task Name Duration Quarter 1 Quarter 2 Month I Month 2 Month 3Morml 4 Month 6 Month 6 Month 7 I Pre-development Planning Design Development Financing Environmental Review Entitlement Coastal Commission Permit Processing Construction ew 12W 20w 26W 26w 24W 8w 50w film NW TENT 2 3 4 6 6 7 a Project'. Prole cti Date: Mon 1/24/00 Task Progress Milestone Summary ^ Rolled Up Task Rolled Up Milestone 0 Rolled Up Progress Page I m m m m m m m m m m m m m m m m m m m I; mil 1=100 'IMF affluff-Anamilt 910-43INSH HOW WHIORM Task Summary qPNEOMMW Rolled Up Prowess Project: Projectl Dole: Mon V24100 Progress Rolled Up Task Milestone Rolled Up Milestone 0 Page 2 9 a Task ;' r Summary ^ Roiled Up Progress Project:. Projectl Date: Mon 12 Progress 4/00 9 Rolled Up Task Milestone Rolled Up Milestone Page 3 M M M M M M M M M M M M M M M M M M = Quarter 10 Quarter 11 Quarter 12 Month 28 Month 29 Monfin 30 Month 31 Month 32 Month 33 Month 34 1 Month 35 1 Month 36 Month 37 Project: projectl Date: Mon 1/24100 Task Progress Milestone Summary Rolled Up Task RoNed Up Milestone 0 Rolled Up Progress Page 4 I 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 67 - -- Sutherland Talla Hospitality copyright 2000 All rights reserved 4500 Campus Dr., Suite 500, Newport Beach, California 92660