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HomeMy WebLinkAboutFEWEL AND ASSOCIATES 1O:CMO(/) Daniel Soto FER &Z'SOCIATES July 18, 2017 Ms. Cynthia Kurtz City Manager City of Santa Ana 20 Civic Center Plaza Santa Ana, CA 92701 N-2017-223 Commercial Real Estate Services Regarding: An Appraisal Report of 1405 French Street in Santa Ana, California Dear Ms. Kurtz, In response to your request, Fewel & Associates proposes to provide you with an Appraisal Report of the referenced property. The appraisal will be prepared in accordance with, and will conform to, the Uniform Standards of Professional Appraisal Practice (USPAP). Please note the Contingent and Limiting Conditions, as they are now known, which will apply to the analysis. Please review them carefully in order to determine if our services will be consistent with your expectations. The purpose of this report is to estimate, at the request of the client, the fee simple market value of the portion of 1405 French Street, Santa Ana, known as the Water Tower Site, based on the extraordinary assumption that the water tower parcel (16,331 SF) has been recorded as a separate parcel (see attached plat map of legal description). The intended use of the report is for the city's internal decision making purposes regarding the purchase of the Water Tower Site. The total fee is $4,500.00, which is due within 30 days of receipt of the final report. If this proposal meets with your approval, please sign the attached Contract for Services and return it to us along with the requested fee. if you have any questions, please contact me at your convenience. Thank you for the opportunity to serve you in this matter. Sincerely, Chris Fewel, MAI Certification #AG025545 129 W. Wilson Street • Suite 201 • Costa Mesa, California 92627 • (949) 764-2650 Fax (949) 764-9325 _ Commercial Real Estate Services FEW® SSOCIA"IES CONTRACT FOR SERVICES This contract represents the agreement between Fewel & Associates and City of Santa Ana, (the Client). 1. Fewel & Associates agrees to provide an Appraisal Report of the multi -family residential land located at 1405 French Street, Santa Ana, California. Attached to this contract is a copy of the "Scope of Work," Appraisal Certification," and "Contingent and Limiting Conditions" that will apply to the analysis. 2. Fewel & Associates understands that the appraisal is being requested by the Client in connection with the "purpose and intended use" contained in the cover letter of this contract. Fewel & Associates agrees to deliver two original copies and one electronic copy of the report within three to four weeks of the commencement date for the appraisal fee of $4,500.00. We can use a fax or email copy of this executed contract for the commencement date, as long as we receive the contract with your original signature and the requested submission items (see attached checklist) necessary to complete the appraisal within three to four working days thereafter. As soon as you return a signed copy of this contract to us, ajob number will be assigned to your appraisal and your job will be logged on our calendar. Please note that any delay in our receipt of these items may postpone the delivery date. Please call if you foresee any problems in obtaining the listed items. The fee reflects the estimated time that will be required to complete the appraisal and is in no way connected with any value to be estimated. The Client agrees to pay Fewel & Associates $4,500.00 within 30 days of receipt of the final report. 3. In addition to the "appraisal fee" as quoted in Paragraph 42, additional billing will be charged at the rate of $150.00 per hour, portal to portal, for additional meetings or conferences requested by the client or those meetings or conferences with the client's attorney or other agent. 4. In the event Fewel & Associates is subpoenaed or otherwise required to give testimony or to attend any public or private hearing as a result of having prepared this report, or attend any conferences pertaining thereto, the Client agrees to pay Fewel & Associates $250.00 per hour, portal to portal, for attendance or testimony required. 5. It is farther agreed and understood that if any portion of the compensation or costs due Fewel & Associates becomes delinquent, The Client will pay a rebilling charge of $15.00 or 1.5% per month (whichever is greater) from the due date Lentil paid, and further agrees to pay all costs of collection thereof, including reasonable attorney's fees, court costs, etc. 129 W. Wilson Street • Suite 201 • Costa Mesa, California 92627 • (949) 764-2650 Fax (949) 764-9325 Commercial Real Estate Services FEw SSOCIATES 6. In the event that the Client desires to cancel this contract, written notice thereof shall be delivered to Fewel & Associates, and it is agreed that Fewel & Associates shall receive compensation from the Client for all services rendered at the appropriate hourly rate for time actually spent prior to receipt of written notice to stop work, plus all costs advanced in connection with said work prior to receipt of such written notice. Any unused portion of the advance payment shall be refunded to the Client. Sincerely, Chris Fewel, MAI Certification #AG025545 Agreed to and Accepted By: City Manager City of Santa Ana Date: 41AARIA D. THE COUNCIL��.x;.. O qt e r u Attorney SUBMISSION ITEMS REQUESTED Please submit all items marked by an X Title Report if available x Escrow Instructions Cost Breakdown Preleasing Information Rent Roll Previous Appraisal x Architectural Plans & Specifications if available x Proforma Leases Operating Expenses for past 3 ears 129 W. Wilson Street • Suite 201 • Costa Mesa, California 92627 • (949) 764-2650 Fax (949) 764-9325 EXHIBIT 11C" PLAT TO ACCOMPANY LEGAL DESCRIPTION LINCOLN PARK TRACT nn KA R/1 d x U Z w OJCL LL 30.00' R/W M.M. 6/14 o u EAST 580.08' P.O.C. N290 12'50"E 34.59' EASEMENT ENLARGEMENT SEE BELOW 1\ 14TH STREET I- w Zi 0- 0 AREA SUMMARY: PROPERTY ACQUISITION 16,331 SQ, FT t EASEMENT ACQUISITION 461 SQ. FT ± BASIS OF BEARINGS: THE CENTERLINE OF 14TH ST PER LINCOLN PARK TRACT M.M, 6/14 LEGEND POC POINT OF COMMENCEMENT TPOB TRUE POINT OF BEGINNING ROS RECORD OF SURVEY EASEMENTAREA --- CENTERLINE -- PROPERTY LINE /I -NO° 00' 00"E / 15.00' N900 00'00"W 134.23' t�FPirP�@�9'- ENLARGEMENT I CITY OF SANTA ANA, COUNTY OF ORANGE, CALIFORNIA NTS THIS PLAT IS SOLELY AN AID IN LOCATING THE LINES DESCRIBED IN THE�I TETRA TECH ATTACHED DOCUMENT. IT IS NOT A PART OF THE WRITTEN DESCRIPTION THEREIN. i ��• 44-41111 SCALE: DRAWN BY: DATE: SHEET: SUBJECT: JOB N0. NTS EM JUN 21, 2017 1 OF 7 ELEVATED WATER TANK 135-09382-14001-04 Commercial Real Estate Services SCOPE OF WORK 1405 French Street in Santa Ana The scope of our work will include an inspection of the subject property, complete with measurements and photographs thereof, in which we will note the characteristics of the property that are relevant to its valuation. We will inspect the surrounding neighborhood and photograph comparable properties. We consult a number of printed data sources as needed, including real estate reports and databases, and news articles to derive information on value indicators such as tax rates, zoning boundaries, comparable property information, and neighborhood and regional demographics. We also pursue conversations, as needed, with real estate brokers, developers, appraisers, property owners, and public officials regarding the real and personal property values, market conditions, zoning and building issues, capital market rates, and cost estimates in the subject area We investigate the available market data for use with the selected approach, including research of public records through the use of commercial data sources. Our search parameters, including dates of sales and leases, locations, sizes, types of properties, and distances from the subject start with relatively narrow constraints and, if necessary, we expand the constraints until we retrieve data sufficient to estimate market value or until we exhaust the available pool of data. Researched lease and sales data is viewed and, if found to be appropriate, efforts are made to verify the data with persons directly involved in the transactions, such as tenants, landlords, buyers, sellers, brokers, or agents. Some data may be used without personal verification if, in our opinion, the data appear to be correct and we were unable to contact any direct participants. In addition, we consider any appropriate listings or properties found through observation during our data collection process. We report all data deemed to be pertinent to the valuation problem. We will prepare an Appraisal Report, as defined in USPAP, that includes photographs of the subject property; descriptions of the subject neighborhood, site, any improvements on the site, and the zoning; a highest and best use analysis; a summary of the most important transactions used in our valuation; maps illustrating the transactions in relationship to the subject property; other data we deem relevant to the assignment and a reconciliation and conclusion. Pertinent data and analyses not included in the report may be retained in our files. For purposes of this report, the three traditional techniques of estimating value (the Cost Approach, Income Approach, and Sales Comparison Approach) have all been considered. Based on our discussions with the client and on our experience appraising similar properties, only a Land Sales Comparison Approach will be presented in the appraisal report. An Income and Cost Approach will not be included because they are not considered necessary in order to result in opinions or conclusions that are credible. 129 W. Wilson Street • Suite 201 • Costa Mesa, California 92627 • (949) 764-2650 Fax (949) 764-9325 CERTIFICATE OF APPRAISAL We certify that, to the best of our knowledge and belief, the statements of fact contained in this report are true and correct. the reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions, and are our personal, impartial, and unbiased professional analyses, opinions, and conclusions, we have no present or prospective interest in the property that is the subject of this report, and we have no personal interest with respect to the parties involved. we have no bias with respect to the property that is the subject of this report or to the parties involved with this assignment. our engagement in this assignment was not contingent upon developing or reporting predetermined results. our compensation is not contingent upon the reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value estimate, the attainment of a stipulated result, or the concurrence of a subsequent event directly related to the intended use of this appraisal. the assignment was not based upon a minimum valuation, a specific valuation, or the approval of a loan. our analyses, opinions, and conclusions were developed, and this report has been prepared in conformity with the Uniform Standards of Professional Appraisal Practice. an appraiser has made a personal inspection of the property that is the subject of this report. no one provided significant professional assistance to the person signing this report. we have not performed services as an appraiser, or provided any other service in regard to the subject property, within three years of this assignment. the reported analysis, opinions, and conclusions were developed, and this report has been prepared, in conformity with the requirements of the Code of Professional Ethics and the Standards of Professional Appraisal Practice of the Appraisal Institute, which include the Uniform Standards of Professional Appraisal Practice. the use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives. as of the date of this report, Chris Fewel, MAI, has completed the continuing education and the Standards and Ethics education requirements for practicing affiliates the Appraisal Institute. Chris Fewel, MAI Certification MAG025545 DEFINITION OF VALUE Market Valuer The most probable price which a property should bring in a competitive and open market wider all conditions requisite to a fair sale, the buyer and seller each acting prudently, and knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: (1) buyer and seller are typically motivated; (2) both parties are well informed or well advised, and acting in what they consider their own best interests; (3) a reasonable time is allowed for exposure in the open market; (4) payment is made in terms of cash in U.S, dollars or in terms of financial arrangements comparable thereto; and (5) the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale. "As Is" Market Value The estimate of the market value of real property in its current physical condition, use, and zoning as of the appraisal's effective date. ' OCC, 12 CFR, Part 34, Subpart C -Appraisals 34.42 Definitions (g). Z From the Interagency Appraisal and Evaluations Guidelines (December 2, 2010) and Federal Registry Vol 75 No 237 / Friday, December 10, 2010 CONTINGENT AND LIMITING CONDITIONS Acceptance of, and/or use of, this appraisal report by the client or any third party constitutes acceptance of the following conditions. The liability of Fewel & Associates (The Appraiser and/or firm), its employees, and subcontractors is limited to the client only and to the fee actually received by appraiser. Further, there is no accountability, obligation, or liability to any third party. If this report is placed in the hands of anyone other than the client, the client shall make such parry aware of all limiting conditions and assumptions of the assignment and related discussions. The appraiser is in no way to be responsible for any costs incurred to discover or correct any deficiencies of any type present in the property: physically, financially, and/or legally. The client agrees that, in the case of lawsuit (brought by lender, partner, or part owner in any form of ownership, tenant, or any other party), any and all awards or settlements of any type in such suit, regardless of outcome, client will hold appraiser completely harmless in any such action. -- Possession of this report or any copy thereof does not carry with it the right of publication, nor may it be used for other than its intended use; the physical report(s) remains the property of the appraiser for the use of the client, the fee being for the analytical services only. -- This appraisal is to be used only in its entirety, and no part is to be used without the whole report. All conclusions and opinions concerning the analysis as set forth in the report were prepared by the appraiser(s) whose signatme(s) appears on the appraisal report, unless indicated as "Review Appraiser." No change of any item in the report shall be made by anyone other than the appraiser and/or officer of the firm. The appraiser and firm shall have no responsibility if any such unauthorized change is made. -- No responsibility is assumed for accuracy of information furnished by others, the client, his designee, or public records. We are not liable for such information or the work of possible subcontractors. Be advised that some of the people associated with our firm and possibly signing the report are independent contractors. The comparable data relied upon in this report has been confirmed with one or more parties familiar with the transaction or from affidavit or other source thought reasonable; all are considered appropriate for inclusion to the best of our factual ,judgment and knowledge. An impractical and uneconomic expenditure of time would be required in attempting to famish unimpeachable verification in all instances, particularly as to engineering and market -related information. It is suggested that the client consider independent verification as a prerequisite to any transaction involving sale, lease, or other significant commitment of funds or subject property. -- The contract for appraisal, consultation, or analytical service is fulfilled and the total fee is payable upon execution of the contract for services. The appraiser(s) or those assisting in preparation of the report will not be asked or required to give testimony in court or hearing because of having made the appraisal, in full or in part, nor engage in post -appraisal consultation with client or third parties except under separate and special arrangement and at additional fee. If testimony or deposition is required because of any subpoena, the client shall be responsible for any additional time, fees, and charges regardless of issuing party. -- The sketches and maps in this report are included to assist the reader in visualizing the property and are not necessarily to scale. Various photos, if any, are included for the same purpose as of the date of the photos. Site plans are not surveys unless shown from separate surveyor. -- No responsibility is assumed for matters legal in character or nature, nor of any architectural, structural, mechanical, or engineering nature. No opinion is rendered as to the title, which is presumed to be good and merchantable. The property is appraised as if free and clear, unless otherwise stated in particular parts of the report. The legal description is assumed to be correct as used in this report as furnished by the client, his designee, or as derived by the appraiser. -- Please note that no advice is given regarding mechanical equipment or structural integrity or adequacy; nor soils and potential for settlement, drainage, and such (seek assistance from qualified architect and/or engineer); nor matters concerning liens, title status, and legal marketability (seek legal assistance); and such. The lender and owner should inspect the property before any disbursement of funds; further, it is likely that the lender or owner may wish to require mechanical or structural inspections by a qualified and licensed contractor, civil or structural engineer, architect, or other expert. CONTINGENT AND LIMITING CONDITIONS The appraiser has inspected as far as possible, by observation, the land and the improvements; however, it was not possible to personally observe conditions beneath the soil or hidden structural or other components. The appraisal is based on there being no hidden, unapparent, or apparent conditions which would render it more or less valuable. We have not critically inspected mechanical components within the improvements unless specifically stated and considered in the report. All mechanical components are assumed to be in operable condition and status standard for properties of the subject type. No judgment may be made by us as to adequacy of insulation, type of insulation, or energy efficiency of the improvements or equipment which is assumed standard for subject age and type. The value estimate considers there being no such conditions that would cause a loss of value. The land or the soil of the area being appraised appears firm; however, subsidence in the area is unknown. The appraiser(s) does not warrant against this condition or occurrence of problems arising from soil conditions. -- Unless otherwise stated in this report, the existence of hazardous material, which may or may not be present on the property, was not observed by the appraiser. The appraiser has no knowledge of the existence of such materials on or in the property. The appraiser, however, is not qualified to detect such substances. The presence of substances such as asbestos, urea -formaldehyde foam insulation, or other potentially hazardous materials may affect the value of the property. The value estimate is predicated on the assumption that there is no such material on or in the property that would cause a loss in value. No responsibility is assumed for any such conditions, or for any expertise or engineering knowledge required to discover them. The client is urged to retain an expert in this field, if desired. -- If the appraiser has not been supplied with a termite inspection, survey, or occupancy permit, no responsibility or representation is assumed or made for any costs associated with obtaining same or for any deficiencies discovered before or after they are obtained. No representation or warranties are made concerning obtaining the above-mentioned items. The appraiser assumes no responsibility for any costs or consequences arising due to the need, or the lack of need, for flood hazard insurance. An agent for the Federal Flood Insurance Program should be contacted to determine the actual need for flood hazard insurance. The appraisal is based on the premise that there is full compliance with all applicable federal, state, and local environmental regulations and laws unless otherwise stated in the report; further, that all applicable zoning, building, use regulations, and restrictions of all types have been complied with unless otherwise stated in the report; further, it is assumed that all required licenses, consents, permits, or other legislative or administrative authority, local, state, federal, and/or private entity or organization have been or can be obtained or renewed for any use considered in the value estimate. The distribution of the total valuation in this report between land and improvements applies only under the existing program of utilization. The separate valuations for land and building must not be used in conjunction with any other appraisal and are invalid if so used. No environmental or impact studies, special market study or analysis, highest and best use analysis study, or feasibility study has been requested or made unless otherwise specified in an agreement for services or in the report -- The market value estimated, and the costs used, are as of the date of the estimate of value. All dollar amounts are based on. the purchasing power and price of the dollar as of the date of the value estimate. -- Furnishings and equipment or personal property or business operations, except as specifically indicated and typically considered as a part of real estate, have been disregarded with only the real estate being considered in the value estimate unless otherwise stated. In some property types, business and real estate interests and values are combined. -- Improvements proposed, if any, on- or off-site, as well as any repairs required, are considered, for purposes of this appraisal, to be completed in a good and workmanlike manner according to information submitted and/or considered by the appraisers. In cases of proposed construction, the appraisal. is subject to change upon inspection of property after construction is completed. This estimate of market value is as of the date shown, as proposed, as if completed, and operating at levels shown and projected. CONTINGENT AND LIMITING CONDITIONS -- The estimated market value, which is defined in the report, is subject to change with market conditions over time; value is highly related to exposure, time, promotional effort, terms, motivation, and conditions surrounding the offering. The value estimate considers the productivity and relative attractiveness of the property physically and economically in the marketplace. -- In cases of appraisals involving the capitalization of income benefits, the estimate of market value or investment value or value in use is a reflection of such benefits and the appraiser's interpretation of income and yields and other factors derived fitom general and specific client and market information. Such estimates are based on income as of the appraisal date along with any reasonable expectations of change in that income over the succeeding 12 months to the extent estimable on the appraisal date; they are, however, subject to change or outcomes other than anticipated due to the dynamic nature of the real estate market. -- The "estimate of market value" in the appraisal report is not based in whole or in part upon the race, color, or national origin of the present owners or occupants of the properties in the vicinity of the property appraised. -- The appraisal report and value estimate are subject to change if physical, legal, or taxing entity or financing is different than that envisioned in this report. Values are based on present property tax laws and do not anticipate future changes in property tax laws. -- It is assumed that the properly, which is the subject of this report, will be under prudent and competent ownership and management, neither inefficient nor superefficient. -- The fee for this appraisal or study is for the service rendered and not for the time spent on the physical report or the physical report itself. -- Unless otherwise noted herein, the review appraiser has supervised and directed all of the research effort, has taken a major role in the analysis of the data produced by this research, but has not personally performed the research and has not necessarily inspected the subject or market comparable properties. -- The appraiser(s) reserves the right to alter statements, analyses, conclusions, or any value estimates in the appraisal if there becomes known to us facts pertinent to the appraisal process which were unknown to us when the report was finished.