Baldwin Park City Council
December 6, 2023

D. Application Procedure:

1. Requests for naming and / or changing the name of a City Facility shall be gin by being submitted to the C EO’s o ffice in writing on the City’s Facility Naming Application Form. If the proposed Facility is in recognition of a person or organization, the applicant is required to provide clear evidence that the person or organization to be honored has made a significant and lasting contribution to the betterment of the City of Baldwin Park.

2. All submittals, whether from an individual, organization or City staff, must include the name and address of the submitter. No anonymous submittals will be accepted.

3. Upon receipt of the application, the CEO or his / her designee shall review the application. If the proposed Facility to be named / renamed is connected or associated with a park, the CEO or his / her designee shall provide the Facility Naming Application Form to the Director of Recreation and Community Services for public input & review. The Recreation Commission shall assist in the process, and then and render a recommendation to the City Council regarding the proposed name / rename.

4. Following that review, the CEO or his / her designee shall place the proposed facility naming / renaming item on a future City Council agenda for formal review and consideration by the City Council. If the request is denie d by the City Council, no further action is taken. If the City Council approves the request, staff shall be directed to go forward with implementing the naming of the Facility. The steps taken to implement the request will be developed as an internal City process. The decision of the City Council will be final.

STAFF REPORT
ITEM NO. 10

TO: Honorable Mayor and Members of the City Council
FROM: Enrique C. Zaldivar, City Manager
Rose Tam, Director of Finance
DATE: December 6, 2023
SUBJECT: Funding Assistance For the Baldwin Park Eastside Little League Youth Organization- To Reopen Following Temporary Closure Due to Covid-19 Impacts

SUMMARY
Eastside Little League (ELL) operations were severely impacted at the onset of the Covid -19 pandemic in April 2020 and ultimately suspended for the 2020 season and the following two years 2021 and 2022. Through much volunteer effort, ELL is resuming operations in the upcoming 2024 season and has requested financial assistance from the City. City Council directed Staff to present a funding recommendation.

RECOMMENDATION
It is recommended that the City Council:

1. Find that it is in the City’s best interest to provide financial support to the Baldwin Park Eastside Little League to resume operations and provide valuable youth sports services to our community.

2. Authorize the Director of Finance to appropriate $13,000 from anticipated potential savings from the America Rescue Plan Act (ARPA) Funds, Account No. 275-50-755-58100-55026, allocated to the Toilet Replacement Program, and to make necessary funding adjustments.

3. Authorize the Chief Executive Officer and the Director of Finance to issue a check to Eastside Little League for the amount of $13,000.

4. Authorize the Chief Executive Officer to make any technical adjustments to carry out the direction of the City Council.

FISCAL IMPACT
There is no additional fiscal impact in as much as the proposed funding will be reprogrammed from an already funded program. The Toilet Replacement Program was appropriated $600,000 of ARPA Funds. As of November 28, 2023, $89,000 have been expended with an additional $27,300 subscribed. While the program will run thru the end of December 2024, the reduction in funding is minimal and will be absorbed by making minor program adjustments.

BACKGROUND
The impact on ELL at the onset of the Covid 19 Pandemic was so devastating that they were compelled to suspend operations right as their Spring 2020 season was getting underway. Player registration fees were fully refunded, fund-raising activities were stopped, and all games were cancelled for the 2020, 2021, and 2022 seasons.

At the City Council meeting of November 15, 2023, ELL President Cecelia Bernal provided testimony during the public comments segment about the resolve of the ELL Board, coaches, parents, volunteers, and the players to

resume play for this upcoming Spring 2024 season, while also acknowledging the financial challenges of ELL as they have zero cash reserves and are facing difficulties with acquiring some of the most critical components such as equipment. Ms Bernal further made a request to the City Council for the City to provide ELL financial assistance if possible. City Council directed Staff to consider ELL’s request and present the City Council with a recommendation.

DISCUSSION
ELL is a volunteer-driven and managed non-profit youth sports organization, a critical element is our City’s youth development fabric. As many as 300 kids and as many as 14 teams have enrolled in a single season when it was active in three sports categories: T-Ball, baseball, and softball. ELL is hosted at Vineland Elementary School on 3609 Vineland Avenue, Baldwin Park, CA 91706.

Youth Development is one of the City Council’s priorities. ELL is a committed partner in such endeavor by mobilizing, activating, and organizing dozens of volunteers in the running of the league for th e benefit of our City’s youth. It is in the City’s interest to help ELL be successful in achieving their mission as they recover from the Covid-19 Pandemic. Utilizing ARPA funds in providing the financial assistance is an optimal nexus.

Attached is a table showing ELL’s proposed budget for 2024 season, with an itemization of cost elements. The recommended $13,000 in financial assistance will defray the cost for the following items:

Balls (T-Balls, baseballs, softballs) ---------- $4,000 Equipment---------------------------------------- $4,000 Trophies and Awards--------------------------- $ 5,000
Total --------------------------------------------- $13,000

LEGAL REVIEW
Report has been reviewed by the City Attorney.

ATTACHMENTS

1. Eastside Little League 2024 Proposed Budget

ITEM COST
Athletic Field Marker/Chalk 700.00$
Back Stop 400.00$
Balls, Tballs, Baseball, Softball 4,000.00$
Banners 400.00$
Bases 2 sets Minor/Major Fields 1,200.00$
Blue Bin Roof Repair 500.00$
CA Secretary of State 501©(3) 25.00$
Charter (15 teams @ $30 ea.) 450.00$
Crock Pots (3) 150.00$
District 19 Assessment Fees 1,800.00$
Domain 35.00$
Edger 400.00$
Equipment 4,000.00$
Flag Pole Rope 40.00$
Flyers 1,000.00$
Fryer (2) 650.00$
Gasoline 200.00$
Grill 600.00$
Hats 300.00$
Infield Dry Line Chalker x 2 550.00$
Insurance 2,800.00$
Lawn Mover 500.00$
Locks 200.00$
Logo 120.00$
Medals 500.00$
Misc Office Supplies 200.00$
Paint 200.00$
Permits 500.00$
PO Box (12 mos.) 176.00$
Printer & Paper 200.00$
Printer Ink 40.00$
Quad 1,500.00$
Refrigerator for Snackbar 500.00$
Score Keeping Ladder Repair 300.00$
Score Keeping Room Security 600.00$
Snack Bar Repairs 2,000.00$
Snack Bar Roof 500.00$
Snackbar Cash Register 400.00$
Snackbar Utensils 200.00$
Sweatshirts 500.00$
T-Shirts 500.00$
Taxes 850.00$
Tees for T-Ball 250.00$
Trophies 5,000.00$
Umpires 9,000.00$
USA Flag 26.00$
Total 44,962.00$
Baldwin Park Eastside Little League
2024 Budget

STAFF REPORT
ITEM NO. 11

TO: Honorable Mayor and Members of the City Council
FROM: Ron Garcia, Director of Community Development
Nick Baldwin, AICP, City Planner
DATE: December 6, 2023
SUBJECT: Adoption of Resolution No. 2023-039 to Approve Commercial Cannabis Agreement No. 23- 03 and Cannabis Permit
Application No. 23-02 to Amend the Ownership Parties of the Existing Cannabis Cultivation and Manufacturing Facility within the I, Industrial Zone (Location: 13460 Brooks Drive, APN 8535- 024-018); Applicant: Green Health Industries, LLC; Case Number: CCA 23-03 for CAN 23-02).

SUMMARY
On or about May 19, 2023, the City of Baldwin Park (“City”) received a Cannabis Permit Application-Ownership Amendment (“Application”) from Green Health Industries, LLC, a California limited liability company (“Applicant”), requesting to amend the ownership parties of the existing cannabis cultivation and manufacturing facility at 13460 Brooks Drive, Baldwin Park, CA; APN 8535-024-018 (“Site”). After review of the Application, Staff recommends that the City Council consider and approve proposed Commercial C annabis Agreement (“CCA”) No. 23 -03 between the City and Applicant to approve the amended ownership parties of the existing cannabis cultivation and manufacturing facility at the Site, which is located within the I, Industrial Zone.

Per Section 127.08(A) of the BPMC, An owner who obtains a permit under this chapter may not sell, transfer, pledge, assign, grant an option, or otherwise dispose of his or her ownership interest in the commercial cannabis production activity covered by any permit issued under this chapter without a written request deemed appropriate by Chief Executive Office of the city, or his/her designees, and City Council approved, fully executed and effective development agreement. This proposal is before the City Council in compliance with this requirement.

RECOMMENDATION
It is recommended that the City Council adopt Resolution No. 2023- 039 approving Commercial Cannabis Agreement No. 23 -03 and Cannabis Permit Application No. 23- 02 to Amend the Ownership Parties of the Existing Cannabis Cultivation and Manufacturing Facility within the I, Industrial Zone (Location: 13460 Brooks Drive, APN 8535-024-018); Applicant: Green Health Industries, LLC; Case Number: CCA 23- 03 for CAN 23- 02).

FISCAL IMPACT
The CCA has a financial component which provides a positive fiscal impact to the City.

DISCUSSION
In 2017, the Applicant submitted Cannabis Permit Application No. 17- 31 to operate a cannabis cultivation and manufacturing facility at the Site and received approval upon execution of a Development Agreement (DA 18- 15) associated with the use. The business has been successfully operating since that time. The business operates within a two -story, industrial building with 16,255 square -feet of floor area dedicated to cultiv ation and manufacturing.

Before the business was approved to operate in 2017, the City found that the proposal was in compliance with the requirements set forth in the City’s Commercial Cannabis Ordinance (Chapter 127 of the BPMC) (See Exhibit C, CAN 17-31 Development Agreement, Application, and Ordinance).

The proposal is to amend the ownership parties that make up the limited liability corporation made up of several ownership members. Some existing members will be removed and some new members will be added and the new membership make up will consist of 11 members, none of whom will own a stake greater than 20%. Per City requirements, all owners of a cannabis business must go through background checks administered by the Baldwin Park Police Department . The Police Department verified that all proposed partners of the ownership entity passed review and met the established criteria. The amendment to the ownership parties is the only change proposed and the business operations will remain unchanged from their current condition.

The existing business currently operates under a Development Agreement dated April 12, 2018 (“D.A.”), with the City. The City has invited the Applicant to replace that D.A., with a Commercial Cannabis Agreement (“CCA”), which is the new method by which the City sets terms and conditions with commercial cannabis operators and is intended to be fair and equitable to all operators engaged in commercial cannabis activity in the City. The Applicant agreed to this replacement and has consented to enter into a CCA (attached hereto as Exhibit B). The formal action to remove the DA requires actions at public hearings from the Planning Commission and the City Council and will occur at the upcoming meetings for those bodies in late January/ early February 2024. All outstanding fees owed to the City by the Applicant that required under the D.A. have been paid.

Upon submittal of the Application, the Applicant paid one -time fees for the Cannabis Permit Application and background checks in the amount of $18,196.93. Pursuant to the CCA, the Applicant also agreed to pay the City $250,000, as the Annual Public Benefi t Fee, which is subject to reassessment after five (5) years, provided the CCA is renewed as set forth therein.

CEQA REVIEW
In accordance with the provisions of the California Environmental Quality Act (CEQA), the City has determined that the proposed CCA No. 23- 03 and CAN 23- 02 will not have a significant impact of the environment and is categorically exempt pursuant to the California Code of Regulations, Article 19, Section 15301, Class 1, ‘existing facilities.’ Furthermore, the proposed facility is within an existing industrial building, which is in conformity with the City Planning and Land Use requirements, as set forth in the BPMC.

LEGAL REVIEW
This report has been reviewed and approved by the City Attorney, and Special Counsel, Commercial Cannabis Activity, as to legal form and content.

ATTACHMENTS

1. Resolution No. 2023-039

2. Commercial Cannabis Agreement, CCA 23-03

3. CAN 17-31 Development Agreement, Application, and Ordinance

4. Exhibit D, Vicinity Map

RESOLUTION NO. 2023-039

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BALDWIN PARK TO APPROVE COMMERCIAL CANNABIS AGREEMENT 23 -03
AND CANNABIS PERMIT APPLICATION NO. 23 -02 TO AMEND THE

OWNERSHIP PARTIES OF THE EXISTING CANNABIS CULTIVATION
AND MANUFACTURING FACILITY WITHIN THE “I,” INDUSTRIAL ZONE (LOCATION: 13460 BROOKS DRIVE ; APN: 8535-024-018);
APPLICANT: GREEN HEALTH INDUSTRIES , LLC. , CASE NUMBER:

CCA 23-03 FOR CAN 23-02).

WHEREAS, Green Health Industries, LLC, a California limited a liability company, (“Applicant”), sub mitted a Cannabis Permit Application (CAN 23 -02) on May 19, 2023 (“Application”), to the City of Baldwin Park (“City”) to amend the ownership parties of the existing cannabis cultivation and manufacturing facility within the Industrial (I) zone at 13460 Brooks Drive, Baldwin Park, CA; APN 8535 -024-018 (“Site”), pursuant to Chapter 127 of the City of Baldwin Park Municipal Code (“BPMC”); and

WHEREAS, Section 127.08(A) of the BPMC specifies that an owner who obtains a permit under this chapter may not sell, transfer, pledge, assign, grant an option, or otherwise dispose of his or her ownership interest in the commercial cannabis production activity covered by any permit issued under this chapter without a written request deemed appropriate by Chief Executive Office of the City, or his/her designees, and City Council approved, fully executed and effective development agreement; and

WHEREAS, The City Attorney confirmed that a Commercial Cannabis Agreement (CCA) can replace an existing development agreement and serve the same purpose as specified in Section 127.08(A) of the BPMC; and

WHEREAS, a CCA, attached as Exhibit B, was negotiated by and between the City and Applicant, and their respective counsel, which terms and conditions were mutually agreed upon; and

WHEREAS, the purpose and intent of the CCA is to set forth the terms and conditions under which the Applicant will operate a commercial cannabis cultivation and manufacturing facility, which include, but are not limited to, payment of community benefit fees, and other fees as mutually agreed upon, automatic termination for non -payment of fees, approval of architectural plans (including site plan, floor plan and elevations ) to conform with the requirements of the BPMC, and other terms and conditions that will protect and promote the public health, safety, and welfare of all persons in the City , as authorized in Chapter 127 of the BPMC; and

WHEREAS, In accordance with the provisions of the California Environmental Quality Act (CEQA), the City has determined that the proposed CCA No. 23 -03 and CAN Resolution 2023-039

23-02 will not have a significant impact of the environment and is categorically exempt pursuant to the California Code of Regulations, Article 19, Section 15301, Class 1, ‘existing facilities.’ Furthermore, the proposed facility is within an existing industrial building, which is in conformity with the City Planning and Land Use requirements, as set forth in the BPMC.

NOW, THEREFORE, IT BE RESOLVED AS FOLLOWS:

SECTION 1. The existing commercial cannabis cultivation and manufacturing facility (collectively, “Project”) that is located at the Site, which is located in the Industrial (I) Zone , is subject to the terms define d in Chapter 127 of the BPMC and will remain unchanged. The proposal is to amend the ownership parties of the business, which requires approval by the City Council per Section 127.08(A) of the BPMC. Th is Project, with the approved amendment of the ownership parties, is consistent with the purpose and intent of the BPMC, the Industrial Zone and the General Plan land use designation.

SECTION 2. The City Council does hereby adopt the Findings of Fact applicable to all Commercial Cannabis Permittees:

1) The CCA is consistent with the General Plan objectives, policies, land uses and implementation programs and any other adopted plans or policies applicable to the agreement.

Because the location of the Project is located within the I, Industrial Zone, it is anticipated that the use of the property is consistent with the other light industrial uses within the area.

The a pproval of the Project is also consistent with Goal 1.0 of the City’s Economic Development Element in the General Plan in that the City encourages and facilitates activities that expand the City’s revenue base. Furthermore, Goal 6.0 of the same element encourages the expansion of the City’s diverse industrial b ase. Policy 6.5 of Goal 6.0 encourages an on -going campaign with local businesses to hire local residents. The amendment of the ownership parties of the business will have no impact on the business operations.

2) The CCA is compatible with the uses authorized in, and the regulations prescribed for, the land use district in which the real property is located.

Pursuant to Ordinance 1401, adopted by the City Council on August 16, 2017, effective on September 16, 2017 (and as subsequently amended by Ordinance 1501 allowing commercial cannabis retail) commercial cannabis activity is allowed within the City provided all of the development standards in Chapter 127 of the City’s Municipal Code are met.

3) The CCA i s in conformance with the public convenience and general welfare of persons residing in the immediate area and will not be detrimental or injurious to property or persons in the general neighborhood or to the general welfare of the residents of the City as a whole.

Resolution 2023-039

The CCA is in conformance with the general area and City as a whole as it is located within the I, Industrial Zone surrounded by industrial uses. The use exceeds the distance requirement of fifty (50) feet between commercial cannabis activity and the closest residential zone; furthermore, pursuant to Section 127.07.E.1 of the BPMC, the commercial cannabis activity is not near any sensitive uses such as schools, day care centers, parks or youth centers.

4) The CCA has been freely negotiated between the Applicant and the City, and their respective counsel; the Applicant has agreed that there is no inequality in bargaining power and the CCA is not ambiguous. The Applicant has capacity to read and understand the CCA and has read and understands the terms and conditions therein. The Applicant acknowledges that the CCA is valid and fully enforceable according to its terms.

SECTION 3. Staff recommends that the City Council approve the proposed CCA for the proposed commercial cannabis cultivation and manufacturing facility, pursuant to the Findings of Fact for CCA 23-03 identified in Section 2 of this Resolution; and

SECTION 4. The City Clerk shall certify to the adoption of this Resolution.

Resolution 2023-039

PASSED AND APPROVED this 6th day of December 2023.

______________________________________
EMMANUEL J. ESTRADA
MAYOR

ATTEST:

STATE OF CALIFORNIA
COUNTY OF LOS ANGELES SS.

CITY OF BALDWIN PARK

I, Christopher Saenz City Clerk, of the City of Baldwin Park, do hereby certify that the foregoing Resolution No. 202 3-039 was duly and regularly approved and adopted by the City Council of the City of Baldwin Park at a regular meeting thereof, held on the 6th day of December, 2023 by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

________________________________
Christopher Saenz

CITY CLERK

______________________________________________________________________

COMMERCIAL CANNABIS AGREEMENT

by and between

CITY OF BALDWIN PARK

and

GREEN HEALTH INDUSTRIES, LLC,

Relating to

Commercial Cannabis Activity – Cultivation and Manufacturing

______________________________________________________________________

COMMERCIAL CANNABIS AGREEMENT
ARTICLE 1. PARTIES AND DATE.

This Commercial Cannabis Agreement dated December ___, 202 3 is Case No. ____________. This Agreement is entered into between (i) the CITY OF BALDWIN PARK ("CITY"), a California municipal corporation, and (ii) Green Health Industries, LLC, California limited liability company ("LICENSEE") ("AGREEMENT"). This AGREEMENT shall become effective on the Effective Date defined in Section 3.1.17 below.

ARTICLE 2. RECITALS.

WHEREAS, on or about May 2, 2018, the CITY approved a Statutory Development Agreement, which replaced a non -statutory Development Agreement, with LICENSEE (collectively, “Development Agreement”).

WHEREAS, pursuant to the Development Agreement, LICENSEE currently conducts commercial cannabis activity in the CITY pursuant to the Baldwin Park Municipal Code ("BPMC") Chapter 127 and all applicable state laws, rules, and regulations; specifically cultivation (adult- use-small-indoor) and manufacturing (Tyle 6 non-volatile solvent extraction); WHEREAS, the CITY seeks to enter into a Commercial Cannabis Agreement with LICENSEE, which shall replace the Development Agreement for the LICENSEE to continue to conduct commercial cannabis activity in the CITY;
WHEREAS, LICENSEE has demonstrated to the CITY that is continues to have legal and/or equitable interest in the subject real property for the continued operation of commercial cannabis activity in the CITY;
WHEREAS, LICENSEE voluntarily enters into this AGREEMENT and after extensive negotiations and proceedings have been taken in accordance with the rules and regulations of the CITY, LICENSEE has elected to execute this AGREEMENT as it provides LICENSEE with important economic and development benefits;
WHEREAS, this AGREEMENT and the Project, as defined herein, are consistent with the CITY's General Plan and Zoning Code and applicable provisions of the CITY's applicable Zoning Map and the Baldwin Park Municipal Code as of the AGREEMENT; WHEREAS, this AGREEMENT shall be subject to City Council approval pursuant to a duly noticed agenda;
WHEREAS, all actions taken, and approvals given by the CITY have been duly taken or approved in accordance with all applicable legal requirements for notice, public hearings, findings, votes, and other procedural matters;
WHEREAS, this AGREEMENT will eliminate uncertainty in planning and provide for the orderly development of the Project and/or Property, ensure progressive installation of necessary improvements, and provide for public services appropriate to the development of the Project; WHEREAS, in an effort to implement state policy to promote private participation in comprehensive planning and to strengthen the public planning process and to reduce the

economic risk of development, the CITY deems the approval of this AGREEMENT to be in the public interest and intends that the approval of this AGREEMENT be considered an exercise of the CITY's police powers to regulate the development of the Property, as d efined herein, during the Term of this AGREEMENT;
WHEREAS, this AGREEMENT is consistent with the public health, safety and welfare needs of the residents of the CITY and the surrounding region and the CITY has specifically considered and approved the impact and benefits of the development of the Property, as defined herein, in accordance with this AGREEMENT upon the general welfare of the region; WHEREAS, concurrently with execution of this AGREEMENT, CITY acknowledges that LICENSEE has been authorized to conduct commercial cannabis activity at its facility up to 19,100 square feet of Premises (as defined in California Code of Regulations, Section 15006); WHEREAS, LICENSEE’s location will be 13460 Brooks Drive, Baldwin Park, CA 91706 as more fully described in Attachment No. 1, herein; and WHEREAS, this AGREEMENT has been freely negotiated between the LICENSEE and the CITY. The LICENSEE and the CITY agree that there is no inequality in bargaining power and that the AGREEMENT is not ambiguous. The LICENSEE has the capacity to read and understand this AGREEMENT and has read and understands the terms and conditions herein.

The LICENSEE and the CITY acknowledge that this AGREEMENT is valid and fully enforceable according to its terms.

WHEREAS, all acts, conditions and things required by law to exist, to have happened and to have been performed precedent to and in connection with the execution and entering into this AGREEMENT do exist, have happened and have been performed in due time, form and manner as required by law, and the parties hereto are duly authorized to execute and enter into this AGREEMENT.

NOW, THEREFORE, in consideration of the promises, covenants, agreements, and understandings set forth herein, the parties agree as follows:

ARTICLE 3. GENERAL TERMS.

Definitions and Exhibits. The following terms when used in this AGREEMENT shall be defined as follows:

3.1 "Agreement" means this Commercial Cannabis Agreement.

3.2 “Application” means the CITY’s Commercial Cannabis Permit Application submitted by LICENSEE in furtherance of this AGREEMENT, upon which the CITY has relied upon in executing same, a copy of which is attached hereto as Attachment No. 3.

3.3 “BPMC” means Baldwin Park Municipal Code.

3.4 “California Cannabis Laws” means MAUCRSA, and the regulations adopted and promulgated by the State Licensing Authorities pursuant to “MAUCRSA”, as such laws and regulations may be amended from time to time.

3.5 “Cannabis” means all parts of the plant Cannabis sativa Linnaeus, Cannabis indica, or Cannabis ruderalis, whether growing or not; the seeds thereof; the resin, whether crude or purified, extracted from any part of the plant; and every compound, manufacture , salt, derivative, mixture, or preparation of the plant, its seeds, or resin. "Cannabis" also means the separated resin, whether crude or purified, obtained from cannabis. "Cannabis" also means marijuana as defined by Section 11018 of the California Health & Safety Code. "Cannabis" does not include the mature stalks of the plant, fiber produced from the stalks, oil or cake made from the seeds of the plant, any other compound, manufacture, salt, derivative, mixture, or preparation of the mature stalks (except the resin extracted therefrom), fiber, oil, or cake, or the sterilized seed of the plant which is incapable of germination. For the purpose of this agreement, “cannabis” does not mean industrial hemp as that term is defined by Section 81000 of the California Food & Agricultural Code or Section 11018.5 of the California Health & Safety Code.

3.6 “Cannabis Product” means cannabis that has undergone a process whereby the plant material has been transformed into a concentrate, including, but not limited to, concentrated cannabis, or an edible or topical product containing cannabis or concentrated cannabis and other ingredients.

3.7 “Certificate of Occupancy” (COO) means a document issued by the CITY stating that the Property is suitable for use and occupancy for Commercial Cannabis Activity, as defined herein, by the LICENSEE, that it is considered compliant with the building code and safety standards imposed by the CITY, and that the State has issued a commercial cannabis license to the LICENSEE to operate on the Property.

3.8 "CITY" means the CITY of Baldwin Park, a California municipal corporation.

3.9 "Commercial Cannabis Activity" has the same meaning as that term is defined under MAUCRSA and includes any legal use under MAUCRSA and the BPMC, including without limitation, cultivation, possession, manufacture, distribution, processing, storing, laboratory testing, packaging, labeling, transportation, delivery, or sale of cannabis and Cannabis Products as regulated under Chapter 5.18 of the BPMC.

3.10 "Commercial Cannabis Business License" or “License” means a regulatory license issued by the CITY pursuant to Chapter 127, et al., of the BPMC to a commercial cannabis business and is required before any Commercial Cannabis Activity may be conducted in the CITY and has the same meaning as that term is defined by the California Business and Professions Code§ 26001(k).

3.11 “Community Benefits” has the meaning set forth in Article 5, of this AGREEMENT.

3.12 “Community Benefit Fees” means any and all fees or monetary contributions required to be paid by Licensee, or which Licensee has committed to pay, pursuant to Article 5 of this AGREEMENT.

3.13 “Days" mean calendar days unless otherwise specified.

3.14 "Dedicate" means to offer the subject land for dedication and to post sufficient bonds or other security, if necessary, for the improvements to be constructed including, but not limited to: grading, the construction of infrastructure and public facilities related to the Project

whether located within or outside the Property, the construction of buildings and structures, and the installation of landscaping.

3.15 "Effective Date" means the day this AGREEMENT is approved and adopted by the City Council of the CITY and signed by the Mayor of the CITY, or his designee.

3.16 "Existing Project Approvals" if applicable, means all Project Approvals granted or issued prior to or on the Effective Date. Existing Project Approvals include the approvals set forth in Section 3.27 and all other approvals which are a matter of public rec ord prior to or on the Effective Date.

3.17 "Existing Land Use Regulations" if and where applicable, means all Land Use Regulations in effect on the Effective Date. Existing Land Use Regulations include all regulations that are a matter of public record on the Effective Date as they may be modified by the Existing Development Approvals.

3.18 “Landlord Consent” if applicable, means that the fee simple absolute owner (“Property Owner”) has granted the LICENSEE with written authorization to use the Property for commercial cannabis operations. The Property Owner shall execute a separate Property Maintenance Agreement confirming it understands it obligations to lease to a commercial cannabis operator in the CITY.

3.19 “Land Use Regulations" if and where applicable, means all ordinances, resolutions, codes, policies and procedures, adopted by the CITY governing the development and use of land, including the permitted use of land, the density or intensity of use, subdivi sion requirements, the maximum height and size of proposed buildings, the provisions for reservation or dedication of land for public purposes, and the design, improvement and construction and initial occupancy standards and specifications applicable to the Development of the Property.

3.20 “Licensee” has the meaning set forth in the preamble of this AGREEMENT, above.

A person who has been issued a commercial cannabis business permit by the CITY, under this chapter for a licensed premise.

3.21 “Licensee’s Application” means the application submitted by Licensee to conduct a Commercial Cannabis Business at the Property.

3.22 Major Amendment” means an amendment that shall have material effect on the terms of this AGREEMENT, which shall require approval by the City Council pursuant to California law.

3.23. “MAUCRSA” means the Medicinal and Adult-Use Cannabis Regulation and Safety Act, codified as Business and Professions Code Section 26000 et seq., as may be amended from time to time.

3.24 “Medicinal” with regard to cannabis or cannabis products means cannabis or Cannabis Products, respectively, intended to be sold or used for medicinal purposes as set forth in MAUCRSA.

3.25. “Minor Amendment” means a clerical amendment to this AGREEMENT that shall not materially affect the terms of this AGREEMENT and is subject to approval by the Chief Executive Officer.

3.26 “Mortgagee" if applicable, means a mortgagee of a mortgage, a beneficiary under a deed of trust or any other security-device lender and its successors-in interest.

3.27 "Processing Fees" means the normal and customary application, filing, plan check, permit fees for land use approvals, design review, tree removal permits, building permits, demolition permits, grading permits, and other similar permits and entitlements, and inspection fees, which fees are charged to reimburse the */ CITY's expenses attributable to such applications, processing, permitting, review and inspection and which are in force and effect on a general basis at such time as said approvals, permits, review, inspection or entitlements are granted or conducted by the CITY.

3.28 "Project" means the development of the Property contemplated by this AGREEMENT, as such Project may be further defined, enhanced, or modified pursuant to the provisions of this AGREEMENT. The Project shall consist of this AGREEMENT, the Application, any and all entitlements, licenses, and permits related to the Project.

3.29 "Project Approvals" if applicable, means all other entitlements for the development of the Property in furtherance of the Project, including any and all conditions of approval, subject to approval or issuance by the CITY in connection with Project. "Projec t Approvals" also include both the Existing Project Approvals and the Subsequent Project Approvals approved or issued by the CITY that are consistent with this AGREEMENT.

3.30 "Project Development" if applicable, includes grading, construction or installation of public and private facilities and the right to maintain, repair or reconstruct any private building, structure, improvement or facility after the construction and comple tion thereof; provided, however, that such maintenance, repair, or reconstruction take place within the Term of this AGREEMENT on the Property.

3.31 “Project Plan" if applicable, means the Project Approvals and the Existing Land Use Regulations applicable to development of the Property for the Project, as modified and supplemented by Subsequent Project Approvals.

3.32 "Property" means the real property commonly known as and identified in Attachment No. 1, herein ( common address, APN, and legal description of the Property), which is incorporated by this reference. LICENSEE may modify the location or locations , change locations, or add locations to the Property subject to approval by the City Council of the CITY approval and all applicable zoning and distance requirements.

3.33 "Reasonable" means using due diligence to accomplish a stated objective that the subject party is capable of performing or providing under the circumstances in a manner that is consistent with the intent and objective of the AGREEMENT.

3.34 “Reservations of Authority" means the rights and authority excepted from the assurances and rights provided to LICENSEE under this AGREEMENT and reserved to the CITY as described in Section 4.4, herein.

3.35 "Space or Canopy Space" means any space or ground, floor or other surface area (whether horizontal or vertical) which is used during the marijuana germination, seedling, vegetative, pre-flowering, flowering, curing and/or harvesting phases, including without limitation any space used for activities such as growing, planting, seeding, germinating, lighting, warming, cooling, aerating, fertilizing, watering, irrigating, topping, pinching, cropping, curing or drying marijuana or any such space used for s toring any cannabis, no matter where such storage may take place or such storage space may be located.

3.36 “State” means, collectively, the State of California and the Department of Cannabis Control of the State.

3.37 "Subsequent Project Approvals" if applicable, means all future discretionary approvals and all ministerial Project Approvals required subsequent to the Effective Date in connection with development of the Property, including without limitation, subdivision improvement agreements that require the provision of bonds or other securities. Subsequent Project Approvals include, but are not limited to, all excavation, grading, building, construction, demolition, encroachment, or street improvement permits, o ccupancy certificates, utility connection authorizations, or other permits or approvals necessary, convenient, or appropriate for the grading, construction, marketing, use and occupancy of the Project within the Property at such times and in such sequences as LICENSEE may choose consistent with the Project and this AGREEMENT.

3.38 "Subsequent Land Use Regulations" if applicable, means any Land Use Regulations defined in Section 3.19, herein, that are adopted and effective after the Effective Date of this AGREEMENT.

3.39 Binding Effect of AGREEMENT . The Property is hereby subject to terms and conditions of this AGREEMENT. Subject to LICENSEE's receipt of all Development Approvals relative thereto, the Development of the Property is hereby authorized and shall, except as otherwise provided in this AGREEMENT, be carried out only in accordance with the terms of this AGREEMENT.

3.40 Ownership of Property; Landlord Consent. LICENSEE represents and covenants that it has a legal or equitable interest in the Property, as defined herein. In the event that LICENSEE is not the fee simple absolute owner of the Property, LICENSEE shall provide CITY with Landlord Consent. Owner shall execute the Property Owner Agreement with the CITY.

3.41 Term. The parties agree that the Term of this AGREEMENT shall be five (5) years commencing on the Effective Date subject to the written extension and early termination provisions described in this AGREEMENT. Upon termination of this AGREEMENT, this AGREEMENT shall be deemed terminated and of no further force and effect, except terms t hat are expressly stated in this AGREEMENT to survive termination without the need of further documentation from the parties hereto. The LICENSE will expire at the close of the 5 th year and will require the LICENSEE to reapply with the CITY for a new LICENSE pursuant to the renewal provisions set forth below:

3.41.1 AGREEMENT Renewal . The Chief Executive Officer (CEO) shall determine whether to renew the AGREEMENT for an additional five (5) years. The CEO shall use the CCA Checklist, attached hereto and incorporated by reference, to determine renewal of

the AGREEMENT. If the CEO determines to renew, the AGREEMENT shall be forwarded to the City Council for formal approval as a consent calendar item.

3.41.2. Non-Renewal of AGREEMENT/Cure Period. If the CEO determines not to renew the AGREEMENT; he/she shall provide the LICENSEE with ability to remedy and/or cure the deficiencies set forth in the CCA Checklist, attached hereto, to be cured within sixty (60) days from date of written notice of Non -Renewal from the CEO to the LICENSEE. If the LICENSEE does not cure within the sixty (60) day period, the AGREEMENT shall not be renewed.

3.41.3. Appeal to the City Council. The LICENSEE shall appeal any Non-Renewal of AGREEMENT of the CEO to the City Council, within sixty (60) days from written notice of Non- Renewal. The decision of the City Council re Non -Renewal of AGREEMENT shall be final and binding.

3.42 Extension of Term . This AGREEMENT may only be extended by mutual agreement of CITY and LICENSEE in writing, following approval by the City Council, and signed by Mayor and the LICENSEE. If the City Council does not approve such an extension, any such agreement is null and void.

3.43 Automatic Termination. This AGREEMENT shall automatically terminate upon the happening of any of the following material events:

(a) Abandonment and/or Surrender by LICENSEE of State and/or CITY License that abandons and/or surrenders the License to operate a commercial cannabis activity in the CITY.

In the event of abandonment and/or surrender of License by LICENSEE, LICENSEE shall pay all fees due and payable to the CITY, up to date of abandonment and/or surrender.

(b) Expiration of the Term of this AGREEMENT as set forth in Section 3.5, herein, unless it is Renewed, as set forth in Section 3.41.1, herein.

(c) The entry of a final judgment (or a decision on any appeal therefrom) voiding the City's General Plan or any element thereof, which judgment or decision would preclude development of the Project, but only if the CITY is unable to cure such defect in the General Plan or element within one hundred and eighty (180) days from the later of entry of final judgment or decision on appeal.

(d) Failure of LICENSEE to timely pay any fees or monies due to the CITY; failure to timely pay the Administrative Fee as set forth in Section 5.7, herein; f ailure to pay the Annual Community Benefit Fee as set forth in Section 5.3, herein. If fees are not paid on a timely basis, the CITY may, in its sole and absolute discretion, terminate this AGREEMENT without any need for a public hearing and without any opportunity to be heard by anyone. There is no opportunity to cure and no opportunity to be heard available for failure to pay fees as set forth herein. Accordingly, Article 8 "Defaults and Remedies" and Section 7.3 (Review Hearing) do not apply to LICENSEE for failure to pay fees as set forth herein, because the CITY may, in its sole and absolute discretion, terminate immediately and automatically, without due process.

(e) Failure to move forward in a timely way and in good faith to obtain all necessary permits and approvals and to timely get a Certificate of Occupancy (COO) and begin operating your commercial cannabis activity in the CITY. In no event shall the COO take longer than one (1) year to acquire from the date the Mayor signs this AGREEMENT. If the COO is not acquired by LICENSEE within the one (1) as described in this section, this AGREEMENT may, in its sole and

absolute discretion, automatically and immediately terminated with no further notice. Accordingly, Article 8 "Defaults and Remedies" and Section 7.3 (Review Hearing) do not apply to a failure to timely obtain all necessary permits and approvals in order to get a COO because the City may, in its sole and absolute discretion, terminate immediately and automatically for such failures.

(f) Regulatory and/or Bureaucratic Delays will not trigger the automatic termination in this Section 3.43.

3.44 Effect of Automatic Termination. The Automatic Termination of this AGREEMENT (as set forth in section 3.43, above) shall constitute termination of all land use entitlements, certificates, and the business license approved for the LICENSEE and/or the Property. The CITY may, in its sole and absolute discretion, “red tag” the subject premises and LICENSEE shall be prohibited from conducting any further commercial cannabis activity in the CITY on the subject premises. Upon the termination of this AGREEMENT pursuant to Section 3.4 3, no party shall have any further right or obligation hereunder except with respect to any obligat ion to have been performed prior to such termination, or with respect to any default in the performance of the provisions of this AGREEMENT, which has occurred prior to such termination, or with respect to any obligations which are specifically and expressly set forth as surviving this AGREEMENT.

3.45. CITY shall immediately notify the State of California, Department of Commercial Cannabis Control (DCC), and any other applicable regulatory agency(ies) of any termination of this AGREEMENT.

3.46 Notices.

3.46.1 Notice Defined. As used in this AGREEMENT, notice includes, without limitation, the communication of notice, request, demand, approval, statement, report, acceptance, consent, waiver, appointment, or other communication required or permitted hereunder.

3.46.2 Written Notice and Delivery . All notices shall be in writing and shall be considered given:

(i) when delivered in person to the recipient named below; or three (3) days after deposit in the United States mail, postage prepaid, addressed to the recipient named below; or

(ii) on the date of personal delivery shown in the records of the delivery company after delivery to the recipient named below; or

(ii) on the date of delivery by facsimile transmission to the recipient named below if a hard copy of the notice is deposited in the United States mail, postage prepaid, addressed to the recipient named below. All notices shall be addressed as follows:

If to the CITY: Chief Executive Officer
14403 E. Pacific Avenue
Baldwin Park, CA 91706

With copy to:

Office of the City Attorney
14403 E. Pacific Avenue
Baldwin Park, CA 91706

If to LICENSEE:

Green Health Industries, LLC
13460 Brooks Drive

Baldwin Park, CA 91706
with copy to:

Eduardo Olivo
General Counsel
13191 Crossroads Parkway, North
Suite 340
Industry, CA 91746

3.46.3 Address Changes. Either party may, by notice given at any time, require subsequent notices to be given to another person or entity, whether a party or an officer or representative of a party or to a different address, or both. Notices given before actual receipt of notice of change shall not be invalidated by the change.

3.47 Validity of this AGREEMENT . LICENSEE and the CITY each acknowledge that neither party has made any representations to the other concerning the enforceability or validity of any one or more provisions of this AGREEMENT. The parties acknowledge and agree that neither party shall allege in any administrative or judicial proceeding that the entering into or the performance of any obligations created in this AGREEMENT violates federal or state law, with respect to all federal, state, and local statutes, or dinances, or regulations in effect as of the Effective Date.

3.48 Fee. Fee means the Community Benefits Fee and the Administrative Fee, set by the CITY, negotiated with LICENSEE, at arms-length, to provide CITY commensurate benefit based on a private benefit conferred upon LICENSEE. Fee shall include CITY’s cost to research commercial cannabis and commercial cannabis laws and regulations, draft commercial cannabis ordinance, conduct public meeti ngs, negotiate development agreements, process applications, and any other acts taken by the CITY in furtherance of medica l and adult commercial use of cannabis.

3.49 Commercial Cannabis Banking. The CITY will not accept cash payments for any fees or costs associated with this AGREEMENT. LICENSEE shall establish a banking relationship with a bank that allows for payments to the CITY via company check, cashier’s check, or money order. Alternatively, LICENSEE, may wire funds and/or ACH directly to the CITY.

3.50 Documents Attached . The following documents are attached to and, by this reference, are made part of this AGREEMENT:

No. 1 – Legal Description of the Property and/or Properties.

No. 2 – Map showing Property and its or their location(s).

No. 3 – CITY Cannabis Permit Application Form (no attachments required).

No. 4 – Landlord Consent, see separate Property Owner Agreement.

No. 5 – Personal Guaranty or Performance Bond, as appropriate.

No. 6 -- Project Plan.

No. 7 –Three years revenue projections from date of execution of AGREEMENT.

No. 8 – Community Benefit Plan.

No. 9 – California State License Type (Cultivation-adult, small-indoor, and/or Cultivation- adult use, medium-indoor, and/or Manufacturing-Type 6 (Non-Volatile Solvent Extraction) and/or Type 7 (Volatile Solvent Extraction).

ARTICLE 4. COMMERCIAL CANNABIS PROJECT.

4.1 Right to Develop . LICENSEE shall, subject to the terms of this AGREEMENT, develop the Property with a commercial cannabis facility in accordance with and to the extent of the Application. The Property shall remain subject to all Subsequent Project Approvals required to complete the Project as contemplated by the Application.

4.2 Effect of AGREEMENT on Land Use Regulations . Except as otherwise provided by this AGREEMENT, the rules, regulations and official policies and conditions of approval governing permitted uses of the Property, the density and intensity of use of the Property, the maximum height and size of proposed bu ildings, and the design, improvement, occupancy and construction standards and specifications applicable to development of the Property shall be the Application. Provided, however, that in approving tentativ e subdivision maps, the CITY may impose ordinary and necessary dedications for rights -of-way or easements for public access, utilities, water, sewers, and drainage, having a nexus with the particular subdivision; provided, further, that the CITY may impose and will require normal and customary subdivision improvement agreements and commensurate security to secure performance of LICENSEE's obligations thereunder.

4.3 Changes to Project. The parties acknowledge that changes to the Project may be appropriate and mutually desirable. The CITY shall act on such applications, if any, in accordance with the Existing Land Use Regulations, subject to the Reservations of Authority, or except as otherwise provided by this AGREEMENT. If approved, any such change in the Existing Development Approvals shall be considered an additional Existing Project Approval.

4.4 Reservations of Authority. Any other provision of this AGREEMENT to the contrary notwithstanding, the Project shall be subject to subsequently adopted ordinances, resolutions ("Subsequent Land Use Regulations" or sometimes referred to as "Reservation of Authority") on the following topics:

(i) Processing Fees imposed by the CITY to cover the estimated or actual costs to the CITY of processing applications for the Project or for monitoring compliance with any requirements for approval, granted or issued, which fees are charged to reimburse the CITY's lawful expenses attributable to such applications, proces sing, permitting, review, and

inspection and which are in force and effect on a general basis at such time as said approvals, permits, review, inspection, or entitlement are granted or conducted by the CITY.

(ii) Procedural regulations relating to hearing bodies, petitions, applications, notices, findings, records, hearings, reports, recommendations, appeals and any other matter of procedure.

(iii) Regulations governing engineering and construction standards and specifications including, any and all uniform codes adopted by the State of California and subsequently adopted by the CITY.

(iv) Regulations which may be in conflict with the Development Plan, but which are reasonably necessary to protect the public health and safety; provided, however, the following shall apply:
(a) That to the extent possible, such regulations shall be applied and construed so as to provide LICENSEE with the rights and assurances provided in this AGREEMENT.
(b) That such regulations apply uniformly to all new development projects of the same uses within the CITY.
(v) Regulations that do not conflict with the Project. The term "do not conflict" means new rules, regulations, and policies which: (a) do not modify the Project, including, without limitation, the permitted land uses, the density or intensity of use, the phasing or timing of the Project, the maximum height and size of propos ed buildings on the Property, provisions for dedication of land for public purposes and Development Exactions, except as expressly permitted elsewhere in this AGREEMENT, and standards for design, development and construction of the Project; (b) do not prev ent LICENSEE from obtaining any Subsequent Project Approvals, including, without limitation, all necessary approvals, permits, certificates, and the like, at such dates and under such circumstances as LICENSEE would otherwise be entitled by the Project; or (c) do not prevent LICENSEE from commencing, prosecuting, and finishing grading of the land, constructing public and private improvements, and occupying the Property, or any portion thereof, all at such dates and schedules as LICENSEE would otherwise be e ntitled to do so by the Development Plan.
(vi) The CITY shall not be prohibited from applying Subsequent Land Use Regulations that do not affect permitted uses of the land, density, design, public improvements (including construction standards and specifications) or the rate of development of the Development, nor shall the CITY be prohibited from denying or conditionally approving any Subsequent Project Applications on the basis of such Subsequent Land Use Regulations.

4.5 Other Public Agencies. It is acknowledged by the parties that other public agencies not within the control of the CITY possess authority to regulate aspects of the Project, separately from or jointly with the CITY, including, but not limited to the Los Angeles County Health Department, the Los Angeles County Fire Department, and the STATE. This AGREEMENT does not limit the authority of such other public agencies. The CITY shall reasonably cooperate with such other public agencies processing Project Approvals.

4.6 Tentative Subdivision Map and Project Approvals Lifespan . The term of any tentative subdivision map shall be in effect for a period of fi ve (5) years and may be extended pursuant to the provisions of the California Subdivision Map Act (Government Code §§ 66410 et seq.), and any AGREEMENT Renewal, as set forth herein. All Project Approvals shall not expire if LICENSEE commences Substantial Construction of the Project within one (1) year from the Effective Date of this AGREEMENT. "Substantial Construction" means the issuance of a building permit in furtherance of the Project.

4.7 Satisfaction of Conditions of Approval . LICENSEE shall comply with any and all conditions of approval for any entitlement, permit, or license it receives from the CITY.

4.8 Subsequent Entitlements. Prior to commencement of construction of the Project, LICENSEE shall be required to submit applications for any and all subsequent entitlements, if any, consistent with the terms and conditions set forth in this AGREEMENT.

4.9 CITY Records Inspection. LICENSEE acknowledges and agrees that the CITY is empowered to examine LICENSEE's books and records. The CITY has the power and authority to examine such books and records at any reasonable time, with seventy-two (72) hours written notice, including but not limited to, during normal business hours; provided however, that should the CITY elect to examine LICENSEE’s books and records more than one (1) time per calendar year, LICENSEE shall only bear the co sts of such review in the initial instance, and the costs of any subsequent examination(s) shall be borne solely by the CITY. CITY shall keep all books and records strictly confidential. If the CITY wishes to inspect the areas of the Property where the commercial cannabis is being cultivated and/or manufactured, CITY may do so at any time with no prior notice to LICENSEE. In addition, CITY agrees that all of its employees or agents which enter the cultivation and/or manufacturing facility shall follow all of the policies and guidelines imposed on LICENSEE's employees, including without limitation, the wearing of any clothing or equipment to ensure that no pests or impurities shall enter the cultivation and/or manufacturing areas.

4.10 Commencement of Project by LICENSEE . Within six (6) months after the execution of this AGREEMENT, LICENSEE shall commence the submittal of applications for and use entitlements, permits, etc. If LICENSEE fails to apply to CITY for entitlements, permits, etc., within six (6) months from the execution of the AGREEMENT, CITY shall have the right to Termination of the AGREEMENT, and may avail itself of any other remedies, as set forth herein.

The CITY, it its sole and absolute discretion, may grant extensions t o the LICENSEE to comply with this subsection, provided the LICENSEE demonstrates a good faith attempt to seek entitlements, permits, etc.

4.11 Audit. LICENSEE acknowledges and agrees that the CITY is empowered to audit LICENSEE's books and records, with written notice of seventy-two (72) hours.

ARTICLE 5. COMMUNITY BENEFITS.

5.1 Intent. The parties acknowledge and agree that the Project will result in substantial public needs and further acknowledge and agree that this AGREEMENT confers substantial private benefits on LICENSEE, which should be balanced by commensurate public benefits.

Accordingly, the parties intend to provide consideration to the community to balance the private benefits conferred on LICENSEE by providing more fully for the satisfaction of the public needs resulting from the Project. The Parties further acknowledge and agree that the LICENSE confers

substantial private benefits on the LICENSEE that will impose burdens on the CITY’s infrastructure, maintenance, repair, safety, services, traffic, noise, pollution, etc., and that the private benefits provided to the LICENSEE should be balanced with comme nsurate public benefits for the community (“Community Benefits”).

5.2 Community Benefits. LICENSEE agrees to provide Community Benefits as set forth in the Community Benefits Plan submit by LICENSEE with the Application. All commitments made by LICENSEE in the Application, inclusive of the Community Benefits Plan are incorporated into this AGREEMENT as if fully set forth in this AGREEMENT Attachment 8. The LICENSEE agrees that the Community Benefits Fee, which has been set by the City Council, is deemed fair and reasonable, and that full p ayment of such fees is required by L ICENSEE under this AGREEMENT.

5.3 Annual Community Benefits Fee. LICENSEE agrees to pay the CITY an annual Community Benefits Fee in the amount of two-hundred fifty thousand dollars ( $250,000.00), based upon 16,255 square feet of the “Premises” as defined in California Code of Regulations Section 15006.

5.4 Community Benefits Fee Schedule . LICENSEE shall commence payment of the Annual Community Benefits Fee to the CITY six (6) months after issuance of the Certificate of Occupancy from the CITY (COO).

5.5 Non-Payment Penalty. Failure to pay the Annual Community Benefits Fee, in lump sum, or in quarterly installments, as agreed upon, within thirty (30) days after the due date, shall result in a penalty for nonpayment in a sum equal to five percent (5%) of the total amount due and shall be referred to a City -selected independent collection agency, which shall subject LICENSEE to an additional nineteen percent (19%) collection fee.

5.6 Reassessment of Community Benefits Fee . The Community Benefits Fee is subject to reassessment by the CITY every five (5) years, after execution of the AGREEMENT. If this AGREEMENT is renewed, a t the end of year five (5), the CITY will set a new Community Benefits Fee which will be applied in years 6 through 10. At the end of year 10, if th is AGREEMENT is renewed, the CITY will set new Community Benefits Fee which will be applied in years 11 through 15. No one factor is dispositive in the CITY’s determination of reassessment of the Community Benefits Fee.

5.7 Administrative Fee Deposit . [This Licensee paid all regula tory fees in its initial application; Section 5.7 does not apply to this Licensee.] The Administrative Fee is a regulatory fee that LICENSEE shall be responsible for to compensate the CITY for all of the CITY's actual costs associated with processing, issuance, and compliance of the Project Approvals including, but not limited to, staff review of Project entitlements, including all environmental clearance documents, permits, licenses, and all documents evidencing compliance with state and local law, and Consultant and City Attorney Fees. As such, upon submittal of the application to the CITY for Project entitlements, LICENSEE must deposit of __dollars ($_) with the CITY for the purpose of reimbursing the CITY for a ll actual costs associated with the Project, as detailed above , and reimbursing the CITY for its actual costs incurred in processing future Project approvals and/or applications, and compliance by the State or the CITY. CITY and LICENSEE acknowledge and agree that this payment is only a deposit and LICENSEE will be requested to deposit additional funds, as needed, in increments of __ dollars ($_); this is not a cap on the amount of the CITY's actual costs incurred in processing this AGREEMENT. LICENSEE who has already processed

its application is not subject to an additional Administrative Fee Deposit , provided there is no expansion or other alteration to the business that requires staff time.

5.8 Possible Tax on Gross Receipts. In the event that an initiative is adopted by the voters of the CITY to impose a tax based on gross receipts or any other method of taxation, on LICENSEE to conduct commercial cannabis activity in the CITY, LICENSEE shall only be responsible for payment of the Community Benefit Fee or a tax, but not both.

5.9 Project Plan. LICENSEE shall provide a detailed Project Plan if LICENSEE has not already submitted a Project Plan in its Business Plan as part of its CITY Cannabis Permit Application Form.

5.10 Financial Projections. Three (3) years of Financial Projections will be provided with the AGREEMENT. Thereafter annual Financial Projections will be provided on the anniversary of the execution of this Agreement.

5.11 Jobs and Wage Creation.

5.11.1. Local Hiring. LICENSEE agrees to use its reasonable, good faith, efforts to hire qualified CITY residents for jobs at the Project. LICENSEE shall also use reasonable efforts to retain the services of qualified contractors and suppliers who are located in the CITY or who employ a significant number of CITY residents. The LICENSEE shall comply with the living wage requirement for all employees at the commercial cannabis facility. Unions shall be allowed, and LICENSEE shall not discriminate against such union activity.

5.11.2. Wage Creation. LICENSEE shall make good faith efforts to employ at least forty percent (40%) of the Project’s workforce consisting of CITY residents. Such reasonable, good faith efforts shall include without limitation, job announcements shall be posted at C ity Hall, along with proof that the job announcements were advertised in at least two (2) newspapers published, printed, or distributed in the CITY and , is applicable, on various social media sites accessible to the general public. In addition, LICENSEE shall make a good faith effort to advertise job announcem ents at local job fairs and /or on local radio, and another medium to advertise job announcements to the broadest audience possible.

5.11.3 Status Reports. LICENSEE shall provide the CITY with written annual status reports to monitor compliance with this Section 5.10. Status Report Form to be provided by CITY.

5.12 Personal Guaranty. LICENSEE shall execute a Personal Guaranty and/or secure a Performance Bond in favor of the CITY to secure the payment of all Fees associated with this AGREEMENT including, but not limited to, the Community Benefit Fee in the amount of two hundred seventy-five thousand dollars ($275,000.00), which is due and payable within six (6) after issuance of the COO by the CITY.

ARTICLE 6. DISTRIBUTION, SELF-DISTRIBUTION, AND TRANSPORTATION

6.1 Transportation of Commercial Cannabis. Transfers of commercial cannabis goods into and out of the CITY may be completed by a duly licensed commercial cannabis distributor in compliance with MAUCRSA and the BPMC.

6.2 Distribution of Commercial Cannabis. LICENSEE shall distribute its commercial cannabis and commercial Cannabis Products through any duly licensed commercial cannabis distributor in compliance with MAUCRSA.

6.3 Agreement with Distributor(s). LICENSEE and any distributors shall reach their own agreement regarding fees for the distributor’s services, if applicable.

6.4 Self-Distribution. LICENSEE may engage in “Self-Distribution” of Cannabis Products that are cultivated or manufactured on the P roperty for a period of five (5) years , provided LICENSEE pay s an annual fee of ten thousand dollars ($10,000.00) to the CITY in annual installments of two thousand dollars ($2,000.00) , for five (5) years, or one ten thousand dollars ($10,000.00) lump sum payment. LICENSEE shall also maintain current a d istributor transport permit from the State of California and comply with MAUCRSA. A distributor transport only self -distribution licensee is not permitted to transport cannabis goods cultivated or manufactured by other licensees.

ARTICLE 7. REVIEW FOR COMPLIANCE.

7.1 Periodic Review. The CITY Council shall have the option, in its sole and absolute discretion, to direct the Chief Executive Officer to review this AGREEMENT every six (6) months, on or before each anniversary of the Effective Date, in order to ascertain LICENSEE's good faith compliance with this AGREEMENT. During the Periodic Review, LICENSEE shall be required to demonstrate good faith co mpliance with all the terms and conditions of the AGREEMENT including good faith towards getting a Certificate of Occupancy.

7.2 Special Review. The CITY Council, in its sole and absolute discretion, may order a special review of compliance with this AGREEMENT by the Chief Executive Officer, at any time, if the Chief Executive Officer is informed and believes that LICENSEE is in default of any terms and conditions of the AGREEMENT. The CITY may also inspect any Property of the LICENSEE associated with the Project, at any reasonable time without notice. The failure by LICENSEE to allow entry into the Property or Properties, at an y time, shall be deemed a breach of this AGREEMENT and may result in the termination of this AGREEMENT, as originally agreed, or as modified.

7.3 Review Hearing. At the time and place set for the review hearing, before the Chief Executive Officer, LICENSEE shall be given an opportunity to be heard. If the C hief Executive Officer finds, based upon substantial evidence, that LICENSEE has not complied in good faith with the terms or conditions of this AGREEMENT, the C hief Executive Officer may: (a) recommend to the City Council, to terminate this AGREEMENT notwithstanding any other provision of this AGREEMENT to the contrary, or (b) modify this AGREEMENT and impose such conditions as are reasonably necessary to protect the best interests of the CITY, with any Minor Amendment to this AGREEMENT approved by the Ch ief Executive Officer, and any Major Amendment approved by the City Council. After the Review Hearing, the decision of the C hief Executive Officer shall be appealable to the Ci ty Council of the CITY; any City Council decision shall be final, subject only to judicial review.

7.4 Certificate of Agreement Compliance. If, at the conclusion of a periodic or special review following a LICENSEE’s default, the Chief Executive Officer determines that LICENSEE is in compliance with this AGREEMENT , the CITY shall issue a Certificate of Agreement Compliance ("Certificate") to LICENSEE stating that after the most recent Periodic Review or

Special Review and based upon the information known or made known to the C hief Executive Officer, that (a) this AGREEMENT is reinstated in full force and effect and (b) LICENSEE is not in default. The CITY shall not be bound by a Certificate if a default existed at the time of the Periodic Review or the Special Review, but was not disclosed, concealed, or otherwise not known to the City Council of the CITY, regardless of whether the Certificate is relied upon by assignees or other transferees or LICENSEE.

7.5 Failure to Conduct Review . The CITY's delay or failure to conduct a Periodic Review or a Special Review of this AGREEMENT shall not constitute a breach of this AGREEMENT.

7.6 Cost of Review . The costs incurred by CITY in connection with the Periodic Reviews or Special Review shall be borne by the CITY. The LICENSEE is not liable for any costs associated with any CITY Periodic Review or Special Review of this AGREEMENT.

ARTICLE 8. EVENTS OF DEFAULT.

8.1 Material Breach of this AGREEMENT . Any of the following events shall be deemed an Event of Default and a material breach of this AGREEMENT:

8.1.1 Final Judgment. The entry of a final judgment (or a decision on any appeal therefrom) voiding the CITY's General Plan or any element thereof, which judgment or decision would preclude development of the Project, but only if the CITY is unable to cure such defect in the General Plan or element within one hundred and eighty (180) days from the later of entry of final judgment or decision on appeal.

8.1.2 Payment of Fees. Failure to timely pay any fees to the CITY, as determined by the CITY in its sole and absolute discretion.

8.1.3 Land use entitlements, permits. Failure to apply for land use entitlements, permits, with the CITY and the State of California, Department of Cannabis Control, within six (6) months after execution of this AGREEMENT. The CITY will grant extensions upon written request and proof of progress in seeking entitlements, permits, etc.

8.1.4 Certificate of Occupancy. Failure to move forward in good faith to obtain a Certificate of Occupancy (COO).

8.1.5 Cure Period . In the event of any material breach of this AGREEMENT, the CITY shall mail a notice to LICENSEE, offering an opportunity to cure the breach, within sixty (60) days. Proof of the cure of the event MUST be presented within the sixty (60) days to CITY; provided however, that if such material breach is capable of being cured but is of such a nature that it cannot be cured within said time period, then the CITY shall not be entitled to terminate this AGREEMENT so long as LICENSEE is working diligently and in good faith to cure such breach, as determined by CITY , in its sole and absolute discretion. Failure to cure a material breach within the terms set forth herein, shall be grounds for Termination as set herein. LICENSEE shall only be entitled to ten (10) day cure period for Automatic Termination as set forth in Section 3.43 (a), herein.

ARTICLE 9. REMEDIES.

9.1 Remedies in General. It is acknowledged by the parties that the CITY would not have entered into this AGREEMENT if it were to be liable in damages with respect to this AGREEMENT or the Application thereof, except as hereinafter expressly provided. Subject to extensions of time by mutual consent in writing, failure, or delay by either party to perform any term or provision of this AGREEMENT shall constitute a default.

9.2 Event of Default. In the event of alleged default or breach of any terms or conditions of this AGREEMENT, the party alleging such default or breach shall give the other party thirty (30) days' notice in writing specifying the nature of the alleged default and the manner i n which said default may be satisfactorily cured during any such sixty (60) day period, the party charged shall not be considered in default for purposes of termination or institution of legal proceedings except for the events detailed in s ection 3.43, above, wherein a ten (10) day notice to cure is required.

9.3 Legal or Equitable; Monetary Damages. In general, each of the parties hereto may pursue any remedy at law or equity available for the breach of any provision of this AGREEMENT through any state court, except that the CITY shall not be liable in monetary damages, unless expressly provided for in this AGREEMENT, to LICENSEE, to any mortgagee or lender, or to any successors in interest of LICENSEE if successors in interest are permitted under this AGREEMENT or mortgagee or lender, or to any other person, and L ICENSEE covenants on behalf of itself and all successors in interest, if successors in interest are permitted under this AGREEMENT, to the Property or any portion thereof, not to sue for damages or claim any damages:

(i) For any breach of this AGREEMENT or for any cause of action which arises out of this AGREEMENT; or

(ii) For the impairment or restriction of any right or interest conveyed or provided under, with, or pursuant to this AGREEMENT, including, without limitation, any impairment or restriction which LICENSEE characterizes as a regulatory taking or inverse condemnation; or

(iii) Arising out of or connected with any dispute, controversy or issue regarding the Application or request for a permit for cultivation and/or manufacturing or interpretation or effect of the provisions of this AGREEMENT.

9.4 Waiver/Release of Claims. LICENSEE hereby agrees to waive and/or release the CITY for any claim or claims or cause of action, not specifically and expressly reserved herein, which LICENSEE may have at the time of execution of this AGREEMENT relating to any Application to the CITY including, but not limited to, any Application for any type of cultivation or manufacturing permit, any Application for any cultivation or manufacturing rights, or any Application for any cultivation or manufacturing license from the CITY.

CALIFORNIA CIVIL CODE SECTION 1542

LICENSEE expressly acknowledges that this AGREEMENT is intended to include in its effect, a waiver without limitation, of all claims or causes of actions which have arisen and of which each side knows or does not know, should have known, had reason to know or suspects to exist in their respective favor at the time of execution hereof, that this AGREEMENT contemplates the

extinguishment of any such Claim or Claims. The LICENSEE specifically acknowledges and waives and releases the rights granted to LICENSEE under California Civil Code Section 1542, which states as follows:

A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor.

By expressly waiving the rights granted to LICENSEE under California Civil Code Section 1542, the LICENSEE represents that they understand and acknowledge that if they have suffered any injury, damage as a result of the Application for or request for any permit from the CITY and (i) they are not presently aware of any damage or injury, or (ii) an y damage or injury has not yet manifested itself, any claims for any such damage or injury are forever released and discharged.

9.5 Reservation of Rights – CITY. Nothing herein shall modify or abridge any defenses or immunities available to the CITY and its employees pursuant to the Government Tort Liability Act and all other applicable statutes and decisional law.

9.6 Reservation of Rights – LICENSEE. Nothing contained herein shall modify or abridge LICENSEE's rights or remedies (including its rights for damages, if any) resulting from the exercise by the CITY of its power of eminent domain. Nothing contained herein shall modify or abridge LICENSEE's rights or remedies (including its rights for damages, if any) resulting from the grossly negligent or malicious acts of the CITY and its officials, officers, agents, and employees.

9.7 Limitation of Rights . Except as set forth in the preceding paragraph relating to eminent domain, LICENSEE's remedies shall be limited to those set forth in this Section 9.1, Section 9.2, and Section 9.3.

9.8 Specific Performance . The parties acknowledge that money damages and remedies at law are inadequate, and specific performance and other non -monetary relief are particularly appropriate remedies for the enforcement of this AGREEMENT and should be available to all parties for the following reasons:
(i) Except as provided in Section 9.1, money damages are unavailable against the CITY as provided in Section 9.1 above.

(ii) Due to the size, nature, and scope of the Project, it may not be practical or possible to restore the Property to its natural condition once implementation of this AGREEMENT has begun. After such implementation, LICENSEE may be foreclosed from other choices it may have had to use the Property or portions thereof. LICENSEE has invested significant time and resources and performed extensive planning and processing of the Project in agreeing to the terms of this AGREEMENT and will be investing even more significant time and resources in implementing the Project in reliance upon the terms of this AGREEMENT, and it is not possible to determine the sum of money which would adequately compensate LICENSEE for such efforts; the parties acknowledge and agree that any injunctive relief may be ordered on an expedited, priority basis.

9.9 Termination of Agreement for Default of the CITY. LICENSEE may terminate this AGREEMENT only in the event of a default by the CITY in the performance of a material term of this AGREEMENT and only after providing written notice to the CITY of default setting forth the nature of the default and the actions, if any, required by the CITY to cure such default and, where the default can be cured, the CITY has failed to take such actions and cure such default within sixty (60) days after the effective date of such notice or, in the event that such default cannot be cured within such sixty (60) day period but can be cured within a longer time, has failed to commence the actions necessary to cure such default within such sixty (60) day period and to diligently proceed to complete such actions and cure such default.

9.10 Attorneys' Fees and Costs. In any action or proceeding between the CITY and LICENSEE brought to interpret or enforce this AGREEMENT, or which in any way arises out of the existence of this AGREEMENT, or is based upon any term or provision contained herein, the "prevailing party" in such action or proceeding shall be entitled to recover from the non-prevailing party, in addition to all other relief to which the prevailing party may be entitled pursuant to this AGREEMENT, the prevailing party's reasonable attorneys' fees and litigation costs, in an amount to be determined by the court. The prevailing party shall be determined by the court in accordance with California Code of Civil Procedure Section 1032. Fees and costs recoverable pursuant to this Section 8.10 include those incurred during any appeal from an underlying judgment and in the enforcement of any judgment rendered in any such action or proceeding.

9.11 LICENSEE Default. No building permit shall be issued or building permit application accepted for any structure on the Property after LICENSEE is determined by the CITY to be in default of the terms and conditions of this AGREEMENT until such default thereafter is cured by LICENSEE or is waived by the CITY. If the CITY terminates this AGREEMENT because of LICENSEE'S default, then the CITY shall retain any and all benefits, including fees received by the CITY hereunder.

9.12. Termination by CITY. Upon default by LICENSEE, the CITY may, in its sole discretion, terminate this AGREEMENT and may, in its sole discretion and following a Review Hearing pursuant to Section 7.3 and the applicable appeal referenced therein, report said termination to the Department of Cannabis Control of the State of California (DCC).

ARTICLE 10. THIRD PARTY LITIGATION.

10.1 General Plan Litigation . The CITY has determined that this AGREEMENT is consistent with its General Plan. LICENSEE has reviewed the General Plan and concurs with the CITY's determination. The CITY shall have no liability under this AGREEMENT, or otherwise, for any failure of th e CITY to perform under this AGREEMENT, or for the inability of LICENSEE to develop the Property as contemplated by the Project Plan, which failure to perform or inability to develop is as the result of a judicial determination that the General Plan, or po rtions thereof, are invalid, inadequate, not in compliance with law, or that this AGREEMENT or any of the CITY's actions in adopting it, were invalid, inadequate, or not in compliance with law. Notwithstanding the foregoing, neither party shall contend in any administrative or judicial proceeding that the AGREEMENT or any Project Approval is unenforceable based upon federal, state, or local statutes, ordinances, or regulations in effect on the Effective Date.

10.2 Hold Harmless Agreement. LICENSEE hereby agrees to, and shall hold CITY, its elective and appointive boards, commissions, officers, agents, and employees harmless from any liability for damage or claims for damage for personal injury, including death, as well as from

claims for property damage which may arise from LICENSEE or LICENSEE's contractors, subcontractors, agents, or employees operations under this AGREEMENT, whether such operations be by LICENSEE, or by any of LICENSEE's contractors, subcontractors, agents, or employees operations under this AGREEMENT, whether such operations be by LICENSEE, or by any of LICENSEE's contractors, subcontractors, or by any one or more persons directly or indirectly employed by, or acting as agent for LICENSEE or any of LICENSEE' s contractors or subcontractors. LICENSEE agrees to and shall defend CITY and its elective and appointive boards, commissions, officers, agents and employees from any suits or actions at law or in equity for damage caused, or alleged to have been caused, by reason of any of the aforesaid operations.

10.3 Indemnification. LICENSEE shall defend, indemnify and hold harmless the CITY and defend its officers, agents, and employees, against and from any and all liabilities, demands, lawsuits, claims, government claims, actions or proceedings and costs and expenses incidental thereto (including costs of defense, settlement and reasonable attorneys' fees), which the CITY, its officers, agents, and employees, may suffer, incur, be responsible for or pay out as a result of or in connection with any challenge to the legality, validity or adequacy of any of the following: (i) this AGREEMENT and the concurrent and subsequent permits, licenses and entitlements approved for the Project or Property; (ii) if applicable, the environmental impact report, mitigated negative declaration or negative declaration, as the case may be, prepared in connection with the development of the Property; and (iii) the proceedings or procedure undertaken in connection with the adoption or approval of any permit or any of the above. In the event of any legal or equitable action or other proceeding instituted by anyone against the CITY, its officers, agents, and employees, and any third party (including a governmental entity or official) challenging the validity of any provision of this AG REEMENT or procedure upon which the permit was issued, or any portion thereof as set forth herein, the parties shall mutually cooperate with each other in defense of said action or proceeding. Notwithstanding the above, the CITY, at is sole option, may ten der to LICENSEE, and LICENSEE agrees to accept any such tender of the complete defense, of any third-party challenge as described herein. In the event the CITY elects to contract with special counsel to provide for such a defense, the CITY may do so in its sole discretion and LICENSEE will be required to pay the defense costs of the CITY as the costs are incurred. LICENSEE agrees to pay any and all attorney's fees or retainer regarding the selection of special counsel, and LICENSEE shall pay all costs and all attorneys' fees related to retention of such special counsel.

10.4 Environmental Contamination. LICENSEE shall indemnify and hold the CITY, its officers, agents, and employees, free and harmless from any liability, based or asserted, upon any act or omission of the LICENSEE, its officers, agents, employees, subcontractors, predecessors in interest, successors, assigns and independent contractors, excepting any acts or omissions of CITY as successor to any portions of the Property dedicated or transferred to CITY by LICENSEE, for any violation of any federal, state, or local law, ordinance or regulat ion relating to industrial hygiene or to environmental conditions on, under or about the Property, including, but not limited to, soil and groundwater conditions, and LICENSEE shall defend, at its expense, including attorneys' fees, the CITY, its officers, agents, and employees, in any action based or asserted upon any such alleged act or omission. The CITY may in its discretion participate in the defense of any such claim, action or proceeding. The provisions of this Section

9.4 do not apply to environmen tal conditions that predate the LICENSEE's ownership or control of the Property or applicable portion, which shall be determined exclusively by the CITY. However, the foregoing limitation shall not operate to bar, limit, or modify any of LICENSEE's statuto ry or equitable obligations as either a LICENSEE or seller of the Property.

10.5 CITY Selection of Counsel. With respect to Sections 10.1 through 10.4, the CITY reserves the right to select its own special counsel or otherwise engages special counsel to defend the CITY hereunder, which fees shall be paid by LICENSEE.

10.6 Acceptance of Reasonably Good Faith Settlement. With respect to this Article 10, the CITY shall not reject any reasonably good faith settlement. Before accepting any such settlement offer, CITY shall notify LICENSEE of the offer and provide LICENSEE with a copy of the settlement offer. If LICENSEE disagrees with the CITY's intention to accept the offer, prior to the CITY's r esponse to any offer, the parties shall meet and confer, in good faith, in order to attempt to resolve the parties' differences. If the CITY does reject a reasonable, good faith settlement that is acceptable to LICENSEE, LICENSEE may enter into a settlement of the action, as it relates to LICENSEE, and the CITY shall thereafter defend such action (including appeals) at its own cost and be solely responsible for any judgments rendered in connection with such action. This Section 9.6 applies exclusively to se ttlements pertaining to monetary damages or damages which are remedial by the payment of monetary compensation. LICENSEE and the CITY expressly agree that this Section 9.6 does not apply to any settlement that requires an exercise of the CITY's police powers, limits the CITY's exercise of its police powers, or affects the conduct of the CITY's municipal operations.

10.7 Administrative Actions. The parties acknowledge that in the future there could be claims, enforcement actions, requests for information, subpoenas, criminal or civil actions initiated or served by either the Federal Government or the State Government in connection with LICENSEE's development, operation, and use of the Property (collectively, "Actions"). The CITY shall not disclose information and documents to the Federal Government or State Government, its officers, or agents regarding any party to th is agreement absent a grand jury subpoena, civil or administrative subpoena, warrant, discovery request, summons, court order or similar process authorized under law hereinafter called "Governmental Notice." If any Action is brought by either the Federal or State Government, CITY shall immediately notify LICENSEE of the nature of the Claim including all correspondence or documents submitted to the CITY. Prior to responding to the Governmental Notice, CITY shall provide LICENSEE ten (10) days from the date of such notice subpoena or the like to serve and obtain on the CITY a protective order, or the like, from a court of competent jurisdiction.

10.8 Survival. The provisions of Sections 10.1 through 10.7 inclusive, shall survive the termination or expiration of this AGREEMENT, until such time as the uses of the Property established in the Development Plan are permanently terminated.

ARTICLE 11. THIRD PARTY LENDERS, ASSIGNMENT & SALE.

11.1 Encumbrances. The parties hereto agree that this AGREEMENT shall not prevent or limit LICENSEE, in any manner, at LICENSEE's sole discretion, from encumbering the Property or any portion thereof or any improvement thereon by any mortgage, deed of trust or other security device securing financing with respect to the Property.

11.2 Lender Requested Modification/Interpretation. The CITY acknowledges that the lenders providing such financing may request certain interpretations and modifications of this AGREEMENT and agrees upon request, from time to time, to meet with LICENSEE and representatives of such lenders to negotiate in g ood faith any such request for interpretation or modification. The CITY will not unreasonably withhold its consent to any such requested interpretation or modification provided such interpretation or modi fication is consistent with the

intent and purposes of this AGREEMENT and as long as such requests do not minimize, reduce, curtail, negate or in any way limit CITY’s rights under this AGREEMENT.

11.3 Non-Transferable Without CITY Approval . LICENSEE shall not sell or transfer it right, title, and interest in this AGREEMENT and any permits, licenses, entitlements, and related benefits cannot be sold or transferred without prior written approval by the City Council of the CITY. No new LICENSEEs shall be permitted without prior written approval by the CITY.

ARTICLE 12. MISCELLANEOUS PROVISIONS.

12.1 Amendment of Agreement. This Agreement shall be amended only by mutual consent of the Parties. All amendments shall be in writing and executed by both Parties. The City Council hereby expressly authorizes the Chief Executive Officer to approve a Minor Amendment to this Agreement. A Major Amendment to this Agreement shall be approved by the City Council. The Chief Executive Officer shall, on behalf of CITY, have sole discretion to determine if an amendment constitutes a Minor Amendment or a Major Amendment. Nothing in this Agreement shall be construed as requiring a noticed public hearing, unless required by law.

12.2 Entire Agreement. This AGREEMENT sets forth and contains the entire understanding and agreement of the parties, and there are no oral or written representations, understandings or ancillary covenants, undertakings or agreements that are not contained or expressly contained herein. No testimony or evidence of any such representations, understandings or covenants shall be admissible in any proceeding of any kind or nature to interpret or determine the terms or conditions of this AGREEMENT, provided, however, CITY shall rely on statements made by LICENSEE's agents, officers, or employees, at the public hearings leading to the CITY's approval of the project, or on written documents submitted by LICENSEE's agents, officers, or employees, that are a part of the public record.

12.3 Severability. If any term, provision, covenant, or condition of this AGREEMENT shall be determined invalid, void, or unenforceable, by a court of competent jurisdiction, the remainder of this AGREEMENT shall not be affected thereby and shall remain in full force and effect to the extent such remaining provisions are not rendered impractical to perform taking into consideration the purposes of this AGREEMENT. The foregoing notwithstanding, the provision of the Community Benefits set forth in Article 5, herein, including the payment of the fees set forth therein, are essential elements of this AGREEMENT and the CITY would not have entered into this AGREEMENT but for such provisions, and therefore in the event that any portion of such provisions are determined to be invalid, void or unenforceable, at the CITY's option, this entire AGREEMENT shall terminate and from that point on be null and void and of no force and effect whatsoever. The foregoing notwithstanding, the Project rights set forth in Article 4 of this AGREEMENT are essential elements of this AGREEMENT and LICENSEE would not have entered into this AGREEMENT but for such provisions, and therefore in the event that any portion of such provisions are determined to be invalid, void, or unenforceable, at LICENSEE's option, this entire AGREEMENT shall terminate and from that point on be null and void and of no force and effect whatsoever.

12.4. Federal Law. The Parties expressly agree that each Party is strictly prohibited from failing to perform any and all obligations under this Agreement on the basis that this AGREEMENT is invalid, unenforceable, or illegal under federal law. By entering into this AGREEMENT, each Party disclaims any right to tender an affirmative defense in any arbitration

or court of competent jurisdiction, that performance under this AGREEMENT is not required because the AGREEMENT is invalid, unenforceable, or illegal under federal law.

12.5 Interpretation and Governing Law. Any dispute arising hereunder shall be governed and interpreted in accordance with the laws of the State of California. This AGREEMENT shall be construed as a whole according to its fair language and common meaning to achieve the objectives and purposes of the parties hereto, and the rule of construction to the effect that ambiguities are to be resolved against the drafting party shall not be employed in interpreting this AGREEMENT, since all parties were represented by counsel in the negotiation and preparation of this AGREEMENT, and/or were advised to consult counsel and had the opportunity to obtain counsel for the negotiation and preparation of this AGREEMENT.

12.6 Section Headings. All section headings and subheadings are inserted for convenience only and shall not affect any construction or interpretation of this AGREEMENT.

12.7 Singular and Plural; Gender, and Person. Except where the context requires otherwise, the singular of any word shall include the plural and vice versa, and pronouns inferring the masculine gender shall include the feminine gender and neuter, and vice versa, and a reference to "person" shall include, in addition to a natural person, any governmental entity and any partnership, corporation, joint venture or any other form of Project entity.

12.8 Time of Essence. Time is of the essence in the performance of the provisions of this AGREEMENT as to which time is an element.

12.9 Waiver. Failure by a party to insist upon the strict performance of any of the provisions of this AGREEMENT by the other party, or the failure by a party to exercise its rights upon the default of the other party, shall not constitute a waiver of such party's right to insist and demand strict compliance by the other party with the terms of this AGREEMENT thereafter.

12.10 No Third-Party Beneficiaries. The only parties to this AGREEMENT are LICENSEE and the CITY. This AGREEMENT is made and entered into for the sole protection and benefit of the parties and their successors and assigns. There are no third-party beneficiaries, and this AGREEMENT is not intended, and shall not be construed, to benefit, or be enforceable by any other person whatsoever.

12.11 Mutual Covenants. The covenants contained herein are mutual covenants and also constitute conditions to the concurrent or subsequent performance by the party benefited thereby of the covenants to be performed hereunder by such benefited party.

12.12 Counterparts. This AGREEMENT may be executed by the parties in counterparts, which counterparts shall be construed together and have the same effect as if all of the parties had executed the same instrument.

12.13 Jurisdiction and Venue. Any action at law or in equity arising under this AGREEMENT or brought by a party hereto for the purpose of enforcing, construing or determining the validity of any provision of this AGREEMENT shall be filed and prosecuted in the Superior Court of the County of Los Angeles, State of California, and the parties hereto waive all provisions of federal or state law or judicial decision providing for the filing, removal or

change of venue to any other state or federal court, including, without limitation, Code of Civil Procedure Section 394.

12.14 Project as a Private Undertaking. It is specifically understood and agreed by and between the parties hereto that the development of the Project is a private development, that neither party is acting as the agent of the other in any respect hereunder, and that each party is an independent contracting entity with respect to the terms, covenants and conditions contained in this AGREEMENT. No partnership, joint venture or other association of any kind is formed by this AGREEMENT. The only relationship between the CITY and LICENSEE is that of a government entity regulating the development of private property and the LICENSEE of such property.

12.15 Further Actions and Instruments. Each of the parties shall cooperate with and provide reasonable assistance to the other to the extent contemplated hereunder in the performance of all obligations under this AGREEMENT and the satisfaction of the conditions of this AGREEMENT. Upon the request of either party at any time, the other party shall promptly execute, with acknowledgment or affidavit if reasonably required, and file or record such required instruments and writings and take any actions as may be reasonably necessary under the terms of this AGREEMENT to carry out the intent and to fulfill the provisions of this AGREEMENT or to evidence or consummate the transactions contemplated by this AGREEMENT.

12.16 Eminent Domain. No provision of this AGREEMENT shall be construed to limit or restrict the exercise by the CITY of its power of eminent domain.

12.17 Agent for Service of Process. In the event LICENSEE is not a resident of the State of California or it is an association, partnership or joint venture without a member, partner or joint venturer, resident of the State of California, or if it is a foreign corporation, then LICENSEE shall file, upon its execution of this AGREEMENT, with the Chief Executive Officer or his or her designee, upon its execution of this AGREEMENT, a designation of a natural person residing in the State of California, giving his or her name, residence and Project addresses, as its agent for the purpose of service of process in any court action arising out of or based upon this AGREEMENT, and the delivery to such agent of a copy of any process in any such action shall constitute valid service upon LICENSEE. If for any reason service of such process upon such agent is not feasible, then in such event LICENSEE may be personally served with such process out of the County of Los Angeles and such service shall constitute valid service upon LICENSEE. LICENSEE is amenable to the process so described, submits to the jurisdiction of the Court so obtained, and waives any and all objections and protests thereto.

12.18 Authority to Execute. The person or persons executing this AGREEMENT on behalf of LICENSEE warrants and represents that he/she/they have the authority to execute this AGREEMENT on behalf of his/her/their corporation, partnership or Project entity and warrants and represents that he/she/they has/have the authority to bind LICENSEE to the performance of its obligations hereunder. LICENSEE shall each deliver to CITY on execution of this AGREEMENT a certified copy of a resolution and or minute order of their respective board of directors or appropriate governing body authorizing the execution of this AGREEMENT and naming the officers that are authorized to execute this AGREEMENT on its behalf. Each individual executing this AGREEMENT on behalf of his or her respective company or entity shall represent and warrant that:

(i) The individual is authorized to execute and deliver this AGREEMENT on behalf of that company or entity in accordance with a duly adopted resolution of the company's board of directors or appropriate governing body and in accordance with that company's or entity's articles of incorporation or charter and bylaws or applicable formation documents; and

(ii) This AGREEMENT is binding on that company or entity in accordance with its terms; and
(iii) The company or entity is a duly organized and legally existing company or entity in good standing; and

(iv) The execution and delivery of this AGREEMENT by that company or entity shall not result in any breach of or constitute a default under any mortgage, deed of trust, loan agreement, credit agreement, partnership agreement, or other contract or instrument to which that company or entity is party or by which that company or entity may be bound.

12.19 Nexus/Reasonable Relationship Challenges. LICENSEE agrees that the fees imposed are in fact reasonable and related to the mitigation of the negative impacts of the Project on the CITY and consents to, and waives any rights it may have now or in the future to challenge the legal validity of, the conditions, requirements, policies or programs set forth in this AGREEMENT including, without limitation, any claim that the terms in this AGREEMENT constitute an abuse of the police power, violate substantive due process, deny equal protection of the laws, effect a taking of property without payment of just compensation, and/or impose an unlawful tax.

12.20 No Damages Relief Against CITY. The parties acknowledge that the CITY would not have entered into this AGREEMENT had it been exposed to damage claims from LICENSEE, its agents, officers, employees, or anyone acting on behalf of LICENSEE for any breach thereof. As such, the parties agree that in no event shall LICENSEE, or LICENSEES' agents, officers, employees, partners, or anyone acting on behalf of LICENSEE be entitled to recover damages against CITY for breach of this AGREEMENT.

12.21 Laws. LICENSEE agrees to comply with all applicable state, regional, and local laws, regulations, polices and rules. In addition, LICENSEE further agrees to comply with all issued entitlements, permits, licenses, including any and all applicable development standards.

Specifically, LICENSEE agrees to comply with all applicable provisions of BPMC.

12.22 Compliance with Conditions of Approval. LICENSEE agrees to comply with and fulfill all conditions of approval for any and all entitlement, permits, and/or licenses it receives from the CITY. All conditions of approval for all entitlements, permits and/or licenses are attached hereto and incorporated herein by this reference.

12.23 Consistent with State and Federal Regulations. The CITY acknowledges that this AGREEMENT shall be read consistent with any statewide or national regulation of commercial cannabis that is promulgated in the future, either by legislative action or voter approval. In the event national or statewide regulations are promulgated which decriminalize or legalize the adult-use of marijuana for recreational use, this AGREEMENT shall govern the conduct of the property under such future regulations.

12.24 Compliance with Applicable Laws. LICENSEE shall comply with all applicable laws, ordinances, administrative regulations, and permitting requirements in carrying out its obligations under this Agreement.

12.25 Necessary Acts. Each Party shall execute and deliver such papers, documents, and instruments, and perform such acts as are necessary or appropriate, to implement the terms of the Agreement and the intent of the Parties to the Agreement.

12.26 Consultation with Counsel. The Parties have entered and executed this Agreement freely and voluntarily based on their own independent judgment, after consultation with their respective counsel, and without duress, coercion, or undue influence of any kind.

12.27 Superseding Clause. This AGREEMENT supersedes any and all other agreements or contracts, either oral or written, between the parties with respect to the subject matter herein.

[Signatures on next page]

IN WITNESS WHEREOF, the parties hereto have caused this AGREEMENT to be executed as of the dates written above.

CITY OF BALDWIN PARK

By: ____________________________
Emmanuel J. Estrada, Mayor

GREEN HEALTH INDUSTRIES, LLC

By: _____________________________
Name: Henrik Avaness,, President

ATTEST:

By: ____________________________
City Clerk

Approved as to Form:

By: _______________________________
Julia Sylva, Special Counsel
Commercial Cannabis Activity,
City of Baldwin Park

Approved as to Form:

By: __________________________________
Eduardo Olivo, General Counsel,
Green Health Industries, LLC

No. 1 - Legal Description of the Property and/or Properties Common Address:

13460 Brooks Drive, Baldwin Park, CA 91076

Assessor’s Parcel Number: 8535-024-018

No. 2 – Map showing Property and its or their location(s)

No. 3 – CITY Cannabis Permit Application

No. 4 – Landlord Consent, if applicable

No. 5 – Personal Guaranty or Performance Bond

No. 6 – Project Plan

No. 7 – Financial Projections

No. 8 – Community Benefits Plan

The City of Baldwin Park will establish a “Community Benefit Fund” to allocate a portion of the Community Benefit Fee to support community-based programs and activities in the City . The City will adopt a policy to provide guidelines and procedures for the distribution and use of these public funds.

No. 9 – California State License Types

Cultivation: State License Type: Adult-Small-Indoor
Manufacturing: State License: Type 6-Non-Volative Solvent Extraction

Vicinity Map
LOCATION: 13460 Brooks Drive
CASE NUMBER: CCA 23-03
DATE: December 6, 2023

STAFF REPORT
ITEM NO. 12

TO: Honorable Mayor and Members of the City Council
FROM: Enrique C. Zaldivar, City Manager
Shirley Quinones, Chief Deputy City Clerk
DATE: December 6, 2023
SUBJECT: Approve and Adopt Resolution No. 2023 -044 casting its votes for the Water Quality Authority (WQA) Board Member
Representing Cities without Pumping Rights

SUMMARY
This report seeks City Council approval in adopting Resolution No. 2023-044, casting their full votes for Valerie Munoz to represent cities without prescriptive pumping rights on the Board of the San Gabriel Basin Water Quality Authority.

RECOMMENDATION
It is recommended that the City Council approve and adopt Resolution No. 2023-044 entitled, “ A RESOLUTION

OF THE CITY COUNCIL OF THE CITY OF BALDWIN PARK, CALIFORNIA, CASTING IT VOTE(S) FOR

COUNCILMEMBER VALERIE MUNOZ TO REPRESENT CITIES WITHOUT PRESCRIPT IVE PUMPING RIGHTS ON THE BOARD OF THE SAN GABRIEL BASIN WATER QUALITY AUTHORITY”.

FISCAL IMPACT
There is no fiscal impact associated with this item.

BACKGROUND
The San Gabriel Basin Water Quality Authority’s (WQA) mission is to coordinate, plan and implement groundwater quality management programs to efficiently remediate groundwater contamination and assist in preventing future contamination. The WQA is under the direction and leadership of a seven-member board, one member from an overlying municipal water district, one from a city with water pumping rights and one from a city without water pumping rights and two representing water purveyors.

On November 14, 2018, the City Council previously supported Valerie Munoz from the C ity of La Puente to serve as the Board Member representing cities without pumping rights, her term expires on January 1, 2024. The WQA is holding an election on December 19, 2023, for a board member and alternate for cities without pumping rights. The WQA provided a list of nominees with two candidates, listed in the order of which nominations were received by WQA:

• Margaret Clark, City of Rosemead
• Valerie Munoz, City of La Puente

The attached resolution would cast the City's vote for Valerie Munoz. Once the resolution is adopted, a certified copy will be mailed to the WQA.

ALTERNATIVES
The City Council may choose to direct staff according to one of the following alternatives:
1) Choose not to cast their votes for Valerie Munoz. 2) Choose to cast their votes for Margaret Clark.

LEGAL REVIEW
Not Applicable.

ATTACHMENTS

1. Resolution No. 2023-044

2. Letter from San Gabriel Basin Water Quality Authority

RESOLUTION NO. 2023-044

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

BALDWIN PARK, CALIFORNIA, CASTING IT VOTE(S) FOR

COUNCILMEMBER VALERIE MUNOZ TO REPRESENT CITIES

WITHOUT PRESCRIPTIVE PUMPING RIGHTS ON THE BOARD

OF THE SAN GABRIEL BASIN WATER QUALITY AUTHORITY

WHEREAS, on September 22, 1992, Senate Bill 1679 was signed into law by Governor Pete Wilson authorizing the creation of the San Gabriel Basin Water Quality Authority; and

WHEREAS, the Board of the San Gabriel Basin Water Quality Authority i s composed of seven members with three appointed members from each of the three municipal water districts, one elected city council person from cities in the San Gabriel Basin with prescriptive pumping rights, and one elected city council person from cities in the San Gabriel Basin without prescriptive pumping rights , and two appointed members representing water producers in the San Gabriel Basin; and

WHEREAS, the City of Baldwin Park is one of the cities in the San Gabriel Basin without prescriptive pumping rights; and

WHEREAS, the City of Ba ldwin Park may cast its vote(s) for a representative by resolution and delivered to the San Gabriel Basin Water Quality Authority no later than December 19, 2023 at 12:00 p.m.

NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF BALDWIN PARK, CALIFORNIA DOES FIND, DETERMINE AND RESOLVE AS FOLLOWS:

Section 1. The City Council of the City of Baldwin Park casts its full vote(s) for Councilmember Valerie Munoz as the representative for cities in the San Gabriel Basin without prescriptive pumping rights.

Resolution No. 2023-031

PASSED, APPROVED, AND ADOPTED this 6
th day of December, 2023.

_______________________________
EMMANUEL J. ESTRADA
MAYOR

ATTEST:

STATE OF CALIFORNIA
COUNTY OF LOS ANGELES SS:

CITY OF BALDWIN PARK

I, CHRISTOPHER SAENZ, City Clerk of the City of Baldwin Park do hereby certify that the foregoing Resolution No. 2023-044 was duly ad opted by the City Council of the City of Baldwin Park at a regular meeting thereof held on December 6, 2023 and that the same was adopted by the following vote to wit:

AYES:

NOES:

ABSENT:

ABSTAIN:

CHRISTOPHER SAENZ

CITY CLERK

STAFF REPORT
ITEM NO. 13

TO: Honorable Mayor and Members of the City Council
FROM: Ron Garcia, Director of Community Development
Victor Viramontes, Management Analyst
DATE: December 6, 2023
SUBJECT: Susan Rubio Zocalo Park Retail Tenant Search Update.

SUMMARY
The purpose of this staff report is to provide City Council with an update on the search for a tenant(s) for the retail building currently under construction at Susan Rubio Zocalo Park.

RECOMMENDATION
Staff recommends that the City Council receive and file this report.

FISCAL IMPACT
There is no fiscal impact.

BACKGROUND
On August 16, 2023, City Council directed staff to begin marketing the retail building that will be part of the Susan Rubio Zocalo Park that is currently under construction. Since then, staff has developed a marketing flyer, a list of potential targets and a Leasing Interest form. Food uses with successful track records with local following were primarily targeted. Staff targeted the following businesses that would be complementary to the park:

• Movita Juice Bar
• 7 Leaves Café
• Il Gusto (Gelato)
• The Artist Pizzeria
• Cafe Valer
• Mariachi Bakery
• La Cocinita
• Vaca Brunch
• Acai Joint
• Big Ds in Whittier
• Papas Best Sandwiches
& More
• La Monarca
• Caramelo Café
• Mi Lindo Oaxaca
• C & R Fresh Foods
• One Veg World
• Tierra Mia
• Edna Vees Public House
• Ground Up Coffee
• Chismosa Café
• Local Brewery

Staff made outreach efforts to the businesses including visiting, delivering a marketing flyer, and e-mailing the flyer to the business owners. Several of the businesses expressed interest including Café Valer submitting a completed Leasing Interest form and site visit from a local Brewery. Discussion items with the prospective businesses included incentives such as assistance with tenant improvements, deferred leasing payments, and assistance with signage.

LEGAL REVIEW
The item does not require a legal review.

ATTACHMENT
None.

STAFF REPORT
ITEM NO. 14

TO: Honorable Mayor and Members of the City Council
FROM: Sam Gutierrez, Director of Public Works
PREPARED BY: Bernardo Navarrete, Engineer Assistant
DATE: December 6, 2023
SUBJECT: Consideration for Approval Memorandum of Agreement (MOA) between the San Gabriel Valley Council of
Governments (SGVCOG), Heart of Compassion Distribution, and the City of La Canada Flintridge Participating in the Food Recovery Hub Program

SUMMARY
This item requests City Council approval of a Memorandum of Agreement (MOA) with the San Gabriel Valley Council of Governments (SGVCOG), Heart of Compassion Distribution, and the City of La Canada Flintridge participating in the Food Recovery Hub Program e stablishing a transfer of ownership of purchased equipment and associated responsibilities for all parties involved.

RECOMMENDATION
It is Staff’s recommendation that the City Council:

1. Authorize the Chief Executive Officer to execute the MOA between the City of Baldwin Park, SGVCOG, City of La Canada Flintridge, and the Heart of Compassion Distribution to establish a purchase equipment transfer of ownership and associated responsibilities for all parties; and,

2. Authorize the Director of Public Works to process the necessary documents.

FISCAL IMPACT
There is no impact on the General Fund. Participation in the Regional Food Recovery Program expansion is funded by the City’s awarded funds from CalRecycle’s SB 1383 Local Assistance Grant Program. There is no appropriation being requested as the cost for the equipment will not exceed the amount established in the existing MOA as approved by the City Council on June 20, 2022.

BACKGROUND
In September 2016, the passage of Senate Bill 1383 established statewide targets to reduce the disposal of organic waste from landfills and increase recovery of currently disposed edible food for human consumption. To recover 20 percent of edible food that would otherwise be sent to landfills by 2025, SB 1383 requires local jurisdictions to establish food recovery programs and strengthen their existing food recovery networks.

In Spring 2022, the City was awarded Round One SB 1383 Local Assistance Grant funding from CalRecycle in the amount of $108,044. This non-competitive grant program provides funding to local jurisdictions to assist with implementation of regulation requirements associated with SB 1383.

City Staff are working with the SGVCOG to provide a regional approach for SB 1383 compliance. The Regional Food Recover Program was established to help member agencies comply with SB 1383’s food recovery mandates and reduce food waste in the San Gabriel Valley. The program assesses commercial edible food waste generators,

identifies, and fosters partnerships with local food recovery organizations, implements outreach and education endeavors, and develops and implements inspection protocols. In July 2022, City Council approved and executed a Memorandum of Agreement (MOA) with SGVCOG for participation in the Program. Per the allocated $108,044 grant funding, $78,000 was earmarked to provide additional support to the Regional Food Recovery Program, and $30,000 was retained to provide support for the City’s SB 1383 outreach program.

Per the MOA, the SGVCOG would utilize a portion of the City’s CalRecyle Local Assistance Grant funds allocation for the purchase of equipment that will be used to increase the capacity of local food organizations to recover edible food waste. As a conformance requirement with CalRecycle’s grant guidelines, it was noted that Cities must own purchased equipment and that it be assigned to one of the participating Cities. As a result, the existing MOA was amended and approved by City Council on September 6, 2023.

DISCUSSION
At the time of amending the MOA it was indicated by Staff that a subsequent agreement would be required which established equipment ownership and associated responsibilities amongst the participating jurisdictions involved.

The equipment purchased will provide support to a subregional food recovery hub, namely the Heart of Compassion Distribution, which currently facilitates recovery of food from edible food generators (EFGs) in the participating cities, and provides food to people who live in, and nearby, those cities. Heart of Compassion focuses on recovering and donating edible food and developing the food recovery network in the participating cities as specified by the SGVCOG. Heart of Compassion shall utilize the equipment purchased by the SGVCOG to increase perishable food storage and distribution capacity through equipment such as forklifts, pallet jacks and trojan batteries. CalRecycle grant guidelines , however, specify that one of the participating cities must own equipment purchased using grant funds, but may transfer such ownership to the Grantee by way of written agreement. It is S taff’s recommendation to approve and execute the proposed MOA to better align with CalRecycle’s grant guidelines to establish a joint effort agreement amongst the participating jurisdictions involved and facilitate the transfer of ownership of the equipment to the Grantee.

ALTERNATIVES
City Council may choose not to accept this MOA and provide staff with alternate direction for further coordination with the various jurisdictions.

CEQA REVIEW
The action being considered by the city council is exempt from the California Environmental Quality Act (CEQA) because it is not a “project” under section 15378(b)(5) of CEQA guidelines. The action involves an organizational or administrative activity of g overnment that will not result in a direct or indirect physical change in the environment.

LEGAL REVIEW
This report has been reviewed and approved by the City Attorney as to legal form and content.

ATTACHMENTS

1. Food Recovery Hub Memorandum of Agreement

Food Recovery MOA

MEMORANDUM OF AGREEMENT

FOOD RECOVERY HUB PROGRAM MEMORANDUM OF AGREEMENT BETWEEN

HEART OF COMPASSION DISTRIBUTION, THE SAN GABRIEL VALLEY COUNCIL OF GOVERNMENTS, THE CITY OF BALDWIN PARK, AND THE CITY OF LA CAÑADA

FLINTRIDGE

This Memorandum of Agreement (“MOA”) is by and between Heart of Compassion Distribution (“Grantee”), the San Gabriel Valley Council of Governments, a joint power authority (“SGVCOG”), the City of Baldwin Park , a municipal corporation , and the City of La Ca ñada Flintridge, a municipal corporation, to be effective as of the date signed by all Parties. Collectively, the City of Baldwin Park and the City of La Cañada Flintridge are referred to as the “Cities”.

RECITALS:

A. The passage of SB 1383 (Lara, 2016) implemented statewide targets to reduce statewide disposal of organic waste and increase recovery of currently disposed edible food for human consumption. Specifically, SB 1383 aims to recover at least 20% of currently disposed edible food for human consumption by 2025.

B. To recover 20% of edible food that would otherwise be sent to landfills by 2025, SB 1383 requires local jurisdictions to establish food recovery programs and strengthen their existing food recovery networks.

C. The SGVCOG was established to have a unified voice to maximize resources and advocate for regional and member interests to improve the quality of life in the San Gabriel Valley by the member cities and other local governmental agencies and has established and is administering a Regional Food Recovery Program alongside several member cities.

D. To assist cities in complying with SB 1383’s edible food waste regulations, the SGVCOG administered a grant program to select subregional food recovery hubs. The hubs will expand regional food recovery efforts to recover additional surplus food for distribution and/or redistribution to smaller organizations and community members facing food insecurity.

E. The Grantee applied to SGVCOG’s grant program to implement the project as described in Exhibit “A”, which is attached hereto and incorporated herein by reference (the “Project”).

F. Participating cities were awarded funding from the California Department of Resources Recycling and Recovery’s (CalRecycle) SB 1383 Local Assistance Grant Program and have allocated a portion of their funding to the SGVCOG to support the development of hubs.

CalRecycle grant guidelines specify that one of the participating cities must own equipment purchased using grant funds, but may transfer such ownership to the Grantee by way of written agreement.

G. The Grantee, SGVCOG, and Cities desire to set forth the terms of their Project responsibilities under this MOA and transfer ownership of the equipment from the City to the Grantee.

Food Recovery MOA

NOW, THEREFORE, the Parties agree to the following:

I. TERM:

The MOA shall take effect as from the date of signing by the Parties, with a term of four (4) years.

The term of this MOA may be extended by mutual agreement of all Parties by way of an amendment to this MOA.

II. RESPONSIBILITIES OF EACH OF THE PARTIES:

A. SGVCOG’s Responsibilities

1. Review submitted deliverables, reports, and invoices from the Grantee and notify Grantee as to any additional documents that are required.

2. Manage reporting schedules and deadlines.

3. Coordinate conference calls and meetings with the Cities and Grantee as necessary.

4. Coordinate regional food recovery efforts with the Cities and Grantee and other grantees which are participating in SGVCOG’s regional food recovery program.

5. Purchase equipment that is identified in Exhibit “A” (the “Equipment”) and assign ownership of Equipment to the Cities at no cost.

6. Provide payment to the Grantee for eligible expenses within 30 days of approval of Grantee’s invoice.

7. Retain $59,248 to purchase equipment that is identified in Exhibit “A” (the “Equipment”) and assign ownership of Equipment to the City at no cost.

8. Upon receipt of a proper invoice, reimburse the Grantee up to a not to exceed amount of $8,752, as described in the budget attached as Exhibit B (the “ Project Budget”) for expenditures that are in compliance with the Project scope of work.

9. Perform other responsibilities as set forth in this MOA.

B. Cities’ Responsibilities

1. Assign its ownership rights to the Equipment to the Grantee at no cost in accordance with this MOA.

2. Cooperate with the SGVCOG in implementing the Project.

3. Participate in scheduled conference calls and meeting s with the SGVCOG and Grantee and other stakeholders.

4. Notify SGVCOG prior to releasing press materials related to the Project.

5. Perform other responsibilities as set forth in this MOA.

C. Grantee’s Responsibilities

1. Implement the Project in compliance with this MOA and applicable local and State food recovery laws and requirements, including, but not limited to SB 1383.

2. Expend funds on goods and services consistent with the Project scope of work and Project Budget.

3. Participate in and contribute to SGVCOG’s food recovery efforts.

Food Recovery MOA

4. Participate in scheduled conference calls and meeting s with the SGVCOG , the Cities, and other stakeholders.

5. Timely respond to SGVCOG and Cities requests related to the Project , including those related to the Grantee’s activities in SGVCOG’s food recovery efforts.

6. Submit expenditures of greater than $1,000 to the SGVCOG for pre -approval, as indicated in the Project scope of work.

7. Maintain and repair Equipment.

8. Utilize Equipment throughout the term of this MOA.

9. Notify SGVCOG prior to releasing press materials related to the Project.

10. Submit detailed invoices, reports, and deliverables to the SGVCOG in accordance with the Project and Budget.

11. Consistent with this MOA, e nsure that all funding is expended by the end of the MOA term and, if not, inform the SGVCOG as soon as practicable of delays in expending the funds. The SGVCOG reserves the right to retain any funds that it deems will not be spent in accordance with this MOA by the end of the MOA term.

12. Reimburse the SGVCOG for payments the SGVCOG has made to Grantee for Grantee expenditures that are later determined by the SGVCOG to be not in compliance with the Project scope of work or Project Budget.

13. Perform other responsibilities as set forth in this MOA.

III. INELIGIBLE EXPENSES

A. Work that is budgeted, but funded by another source.

B. Work not completed during the term of this MOA, including work performed prior to the effective date of this MOA.

C. Purchase of food.

D. Purchase or lease of land or buildings.

E. Advocacy and lobbying.

F. Grant preparation.

G. Any other activities or expenditures not set forth in Exhibit A or Exhibit B.

IV. EQUIPMENT

A. The SGVCOG shall purchase the Equipment. Upon such purchase and delivery to Grantee’s possession, the SGVCOG and the Cities assign all rights they have to ownership of the Equipment and any warranties thereunder to the Grantee. In making this assignment the SGVCOG and the Cities make no guaranty as to the quality of the Equipment, its merchantability and/or whether it will function for its intended purpose.

Upon the Grantee taking ownership of the Equipment , the SGVCOG and the Cities shall have no liability to each other or to the Grantee for any claims, actions, damages arising out of the use of the Equipment by Grantee or any malfunction of the Equipment. In accepting this assignment of ownership of the Equipment, the Grantee shall assume all of the Cities’ and the SGVCOG’s rights, duties, liabilities , and obligations for the Equipment. Notwithstanding the foregoing, to the extent the Project Budget provides funds for Equipment maintenance or repair, the SGVCOG shall pay

Food Recovery MOA
for such repair upon receipt of an appropriate invoice from Grantee during the term of this MOA.

B. At all times during Grantee’s possession of the Equipment, the Grantee shall be solely responsible for maintenance and repair of the Equipment and shall take all reasonable steps to maintain and repair the Equipment so that it remains in good working order and to pay the costs thereof ; provided that Grantee may be reimbursed for such maintenance and repair to the extent provided in the Project Budget. Grantee shall use the Equipment solely for Project purposes during the Term of this MOA. In the event Grantee does not utilize the Equipment or piece thereof during the Term of this MOA, Grantee shall reimburse the SGVCOG the depreciated value of the Equipment. The depreciated value shall be calculated by the following formula: (Equipment cost ÷ 4) × remaining MOA Term expressed in years or fractions thereof. By way of example if a piece of equipment cost $10,000 and there was 1 year and 6 months left in the MOA term, the depreciated value would be calculated as follows: ($10,000 ÷ 4 = $2,500) x

1.5 = $3,750.

V. INVOICING

A. Grantee must submit invoices on a monthly basis, no later than the tenth (10 th) day of each month, in accordance with the schedule in Exhibit B. Grantee must provide all necessary documentation, including but not limited to timesheets, invoices, and deliverables, as support for the invoice. Invoice must include all work completed during the previous month. Grantee’s final invoice shall be submitted within twenty (20) days after the end of the MOA term.

B. Grantee must submit a monthly report with the invoice indicating outcomes during the invoicing period, consistent with a format approved by the SGVCOG.

C. All reimbursable expenditures must be incurred by April 30, 2024, and an invoice must be received by the SGVCOG within 20 days thereof, i.e., by May 20, 2024. Any invoice received after that date for otherwise reimbursable expenditures shall not be paid.

VI. AMENDMENTS

A. For any change which materially affects the Project scope of work, or in any way modifies any term or condition included under this MOA, a written amendment to the MOA shall be prepared and executed by the Grantee, the Cities and the SGVCOG for such change to be effective.

B. Minor changes to the Project scope of work or Project Budget that shift funds among approved categories may be approved by the SGVCOG’s Project Manager, who shall in writing and in his or her reasonable discretion determine whether the change is minor. Any increase in the not to exceed amount of this MOA shall require a written amendment.

VII. PROJECT MANAGEMENT

A. For purposes of this MOA, the SGVCOG designates the following individual as its Project Manager to which any notices required under this MOA shall be sent:

Food Recovery MOA

Mackenzie Bolger
Senior Management Analyst
San Gabriel Valley Council of Governments
1333 S. Mayflower Avenue, Suite 360
Monrovia, CA 91016
[email protected]

B. For purposes of this MOA, the Grantee designates the following individual as its Project Manager to which any notices required under this MOA shall be sent:

Melissa Lomenzo
Heart of Compassion Distribution
600 S. Maple Ave.

Montebello, CA 90640
[email protected]

Christina Strickling
Controller
Heart of Compassion Distribution
600 S. Maple Ave.

Montebello, CA 90640
[email protected]

C. For purposes of this MOA, the Cities designate the following individuals as the Project Managers to which any notices required under this MOA shall be sent:

To City of Baldwin Park:

Sam Gutierrez
Director of Public Works
14403 E. Pacific Avenue
Baldwin Park, CA 91706
(626) 960-4011, ext 460
[email protected]

To City of La Cañada Flintridge:

Patrick V. DeChellis
Director of Public Works
One Civic Center Drive
La Cañada Flintridge, CA 91011
(818) 790-8882
[email protected]

Food Recovery MOA
D. Additional Parties’ contacts and copies of notices to whom shall be sent include the following individuals:

To SGVCOG:

Marisa Creter
Executive Director
San Gabriel Valley Council of Governments
1333 S. Mayflower Avenue, Suite 360
Monrovia, CA 91016
[email protected]

To City of Baldwin Park:

Enrique C. Zaldivar, PE
Chief Executive Officer
14403 E. Pacific Avenue
Baldwin Park, CA 91706
(626) 813-5204
[email protected]

To City of La Cañada Flintridge:

Daniel Jordan
City Manager
One Civic Center Drive
La Cañada Flintridge, CA 91011
[email protected]

Joshua Jeffrey
Management Analyst
One Civic Center Drive
La Cañada Flintridge, CA 91011
[email protected]

E. All notices required herein shall be sent by email, except for a notice of termination, default, or failure to cure, which shall be sent by certified mail, postage pre-paid, return receipt requested. Either Party may change its Project Manager or contact upon written notice to the other Party and shall promptly update the other Party in writing of any such changes.

VIII. TERMINATION

A. This MOA may be terminated by the SGVCOG as to the Grantee at any time without cause. Termination will occur 30 days after written notice is issued to Cities’ and Grantee’s Project Managers. The Grantee shall stop work and not incur any additional

Food Recovery MOA
expenses upon receipt of or issuance of such notice, except that which is reasonable and necessary to effectuate the termination. The Grantee shall be entitled to reimbursement for eligible expenses that are reasonably and necessarily incurred up to the date that such termination is effective. Within 15 days of receipt of the SGVCOG’s written notice, Grantee may, at its election and in writing, pay to the SGVCOG the depreciated value of the equipment as of the effective date of the termination and keep the equipment or return the equipment. If the equipment is to be returned, it shall be returned in good working order, normal wear and tear excepted. The SGVCOG shall provide direction as to where the equipment is to be returned.

B. This MOA may be terminated for cause at any time for a material default by one of the Parties upon written notice to the other two Parties. Prior to such termination, the non- defaulting Party shall notify the defaulting Party and the other Party of the action or non-action constituting the material default. The defaulting Party or other Party shall have 10 business days in which to cure the default. If the default cannot be reasonably cured within 10 days, the defaulting shall commence the cure within the 10 business days and work promptly to cure the default within in a reasonable time, but in no event, more than 30 calendar days. If not cured to the reasonable satisfaction of the non - defaulting Party issuing the written notice within such time periods, the non-defaulting Party shall provide notice of the failure to cure to the other Parties and the MOA shall terminate three days after the date the notice is deposited in the U.S. Mail , unless otherwise stated at a later time in the written notice.

IX. INDEMNITY

A. To the greatest extent permitted by law, Grantee agrees to defend, indemnify, and hold harmless the SGVCOG, its member agencies, including the Cities, and their respective elected and appointed boards, officials, officers, agents, employees, members, and volunteers (the “Agency Indemnitees”) , at Grantee’s sole expense, from and against any and all liability, loss, damage, cost, claims, actions, suits, or other legal proceedings of every nature (collectively, “Claims”) brought against the Agency Indemnitees arising out of or relating to the acts or omissions of Grantee in connection with this MOA, with counsel reasonably acceptable to the SGVCOG and the Cities. Grantee’s duty to defend, indemnify, and hold free and harmless the Agency Indemnitees shall also apply to any Claims arising out Grantee’s use of the Equipment during the term of the MOA or thereafter, if Grantee owns the Equipment. Should Grantee refuse to provide a defense for the Agency Indemnities upon written demand by the SGVCOG and/or Cities to do so, or do so with a reservation of rights, the SGVCOG and/or Cities may choose to provide its own defense, and Grantee shall be liable for all costs incurred in doing so, including, but not limited to, any judgment determined to be covered by Grantee’s obligations herein.

B. SGVCOG agrees to defend, indemnify, and hold free and harmless the Cities, its officers, employees, agents, and volunteers (“Cities Indemnitees”), at SGVCOG’s sole expense, from and against any and all Claims brought against the Cities Indemnitees

Food Recovery MOA
arising out of or relating to the acts or omissions of SGVCOG in connection with this MOA.

C. Cities agrees to defend, indemnify, and hold free and harmless the SGVCOG, its member agencies, and their officers, employees, agents, and volunteers (“SGVCOG Indemnitees”), at Cities’ sole expense, from and against any and all Claims arising out of or relating to the acts or omissions of Cities in connection with this MOA.

D. The provisions of this Article IX shall survive termination of this MOA.

X. INSURANCE

A. Cities and SGVCOG shall each maintain and keep in full force and effect during the term of this MOA insurance or a program of self -insurance against claims for injuries to persons or damages to property which may arise in connection with their respective performance of obligations hereunder.

B. Grantee shall procure and maintain, at its own cost and expense and for the duration of this MOA, the insurance coverage as set forth herein and the provisions applicable thereon shall survive the term of this MOA . All insurance policies shall be subject to approval by SGVCOG and Cities as to form and content. These requirements are subject to amendment or waiver if approved in writing by the SGVCOG and the Cities.

Insurance is to be placed with insurers with a current A.M. Best's rating of no less than A-VII and licensed to do business in the State of California. Grantee shall provide the following scope and limits of insurance:

1. Coverage shall be at least as broad as Insurance Services Office form Commercial General Liability coverage (Occurrence Form CG 0001) and Insurance Services Office form number CA 0001 (Ed. 1/87) covering Automobile Liability, including code 1 "any auto" and endorsement CA 0025, or equivalent forms subject to the written approval of the SGVCOG.

2. General Liability: $ 2,000,000 minimum limit written on an occurrence basis for bodily injury, death, and property damage.

3. Automobile Liability: $1,000,000 minimum limit written on an occurrence basis for bodily injury, death, and property damage.

4. Workers' Compensation and Employer's Liability: Workers' Compensation as required by the Labor Code of the State of California and Employers Liability limits of $1,000,000 per accident.

5. Each general liability and automotive liability insurance policy shall provide that the coverage shall not be non-renewed, cancelled or reduced by the insurer or Grantee except after at least ten (10) days' prior written notice by certified mail, return receipt requested, has been given to the SGVCOG and the Cities.

As soon as Grantee becomes aware, it shall provide to SGVCOG and the Cities notice of suspension or voiding of any coverage or reduction in coverage which results in Grantee not meeting the minimum requirements set forth in this MOA.

Food Recovery MOA

6. The Agency Indemnitees shall be named as additional insureds on all policies of general liability, property damage, and automotive liability insurance for all work performed by Grantee under this MOA. The coverage shall contain no special limitations on the scope of protection afforded to the A gency Indemnitees.

7. Grantee's insurance coverage shall be primary insurance with respect to the Agency Indemnitees.

8. Unless the SGVCOG and Cities otherwise agree in writing, the insurer shall agree to waive all rights of subrogation against the A gency Indemnitees for losses arising from services performed by Grantee.

9. Grantee agrees to deposit with SGVCOG and the Cities, at or before the performance of any services under this MOA, certificates of insurance and additional insured endorsements or a copy of the policy evidencing same, necessary to satisfy SGVCOG and the Cities that Grantee has complied with the insurance provisions of this MOA. The certificates and endorsements are to be signed by a person authorized by that insurer to bind coverage on its behalf. SGVCOG and the Cities reserve the right to inspect complete, certified copies of all required insurance policies, at any time.

XI. OTHER TERMS AND CONDITIONS

A. No Partnership. This MOA is not intended to be, and shall not be construed as, an agreement to form a partnership, agency relationship, or a joint venture between the Parties. Except as otherwise specifically provided in the MOA, neither Party shall be authorized to act as an agent of or otherwise to represent the other Party.

B. Entire MOA. This MOA constitutes the entire understanding between the Parties with respect to the subject matter herein and supersedes any and all other prior writings and oral negotiations. This MOA may be modified only in writing and signed by the Parties in interest at the time of such modification.

C. Governing Law. This MOA shall be governed by and construed under California law and any applicable federal law without giving effect to that body of laws pertaining to conflict of laws. In the event of any legal action to enforce or interpret this MOA, the Parties hereto agree that the sole and exclusive venue shall be a court of competent jurisdiction located in Los Angeles County, California.

D. Excusable Delays. Neither Party shall be considered in default in the performance of its obligations hereunder to the extent that the performance of any such obligation is prevented or delayed by unforeseen causes including acts of God, floods, earthquakes, fires, acts of a public enemy, pandemic, epidemic, and government acts beyond the control and without fault or negligence of the affected Party. Each Party hereto shall give notice promptly to the other of the nature and extent of any such circumstances claimed to delay, hinder, or prevent performance of any obligations under this MOA.

Food Recovery MOA
E. Waiver. Waiver by any Party to this MOA of any term, condition, or covenant of this MOA shall not constitute a waiver of any other term, condition, or covenant. No waiver of any provision of this MOA shall be effective unless in writing and signed by a duly authorized representative of the Party against whom enforcement of a waiver is sought.

F. Headings. The section headings contained in this MOA are for convenience and identification only and shall not be deemed to limit or define the contents to which they relate.

G. Assignment. Except for an assignment of the Equipment as provided in this MOA, neither Party may assign its interest in this MOA, or any part thereof, without the prior written consent of the other Party. Any assignment without consent shall be void and unenforceable.

H. Severability. If any provision of this MOA is held by a court of competent jurisdiction to be invalid, void, or unenforceable, the remaining provisions shall nevertheless continue in full force without being impaired or invalidated in any way.

I. Authority to Execute. The person executing this MOA on behalf of a Party warrant that they are duly authorized to execute this MOA on behalf of said Party, and that by doing so said Party is formally bound to the provisions of this MOA.

J. Counterparts. This MOA may be executed in multiple counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument.

K. Electronic Signatures . This MOA may be executed with electronic signatures in accordance with Government Code Section 16.5. Such electronic signatures will be treated in all respects as having the same effect as an original signature.

[Signature page to follow]

Food Recovery MOA
In witness whereof, the Parties enter into this MOA on the date of last execution by the Parties.

FOR HEART OF COMPASSION DISTRIBUTION

By: ___________________________
Eric Tietze
President

Date: __________________________

By: ___________________________
Melissa Lomenzo
Admin

Date: __________________________

FOR CITY OF BALDWIN PARK

By: ___________________________
Enrique C. Zaldivar, PE
Chief Executive Officer

Date: __________________________

APPROVED AS TO FORM:

_______________________________
Marco A. Martinez
City Attorney

FOR CITY OF LA CAÑADA

FLINTRIDGE
By: ___________________________
Daniel Jordan
City Manager

Date: __________________________

APPROVED AS TO FORM:

_______________________________
Adrian R. Guerra
City Attorney

FOR THE SAN GABRIEL VALLEY

COUNCIL OF GOVERNMENTS

By: ____________________________ APPROVED AS TO FORM:

Marisa Creter
Executive Director ____________________________
David DeBerry
Date: __________________________ General Counsel

STAFF REPORT
ITEM NO. ___15___

TO: Honorable Mayor and Members of the City Council
FROM: Enrique C. Zaldivar, Chief Executive Officer
Ron Garcia, Director of Community Development
DATE: December 6, 2023
SUBJECT: Approval of Amendment Number 2 to the Grant Agreement with Oath to Country Foundation (OTCF) to repair the last senior Veteran home as part of the Home Rehabilitation Pilot Program with the City of Baldwin Park.

SUMMARY
The purpose of this staff report is to consider the second amendment to the Grant Agreement with Oath to Country (OTCF) to extend the Agreement by twelve months to repair the last senior Veteran home as part of the Home Rehabilitation Pilot Program.

RECOMMENDATION
It is recommended that the City Council authorize the Chief Executive Officer to execute an amended Grant Agreement with Oath to Country (OTCF) subject to any non -substantive changes made by the CEO and City Attorney.

FISCAL IMPACT
There is no fiscal impact with the approval of the amendment. The amendment extends the term of the grant agreement twelve months to repair the last senior . The agreement amount of $25,000 ARPA grants funds will remain.

BACKGROUND
On June 6, 2022, the City Council approved a Grant Agreement to create a pilot program in partnership with Oath to Country Foundation. The pilot program envisioned home repairs of up to 6 homes to ensure a safe healthy living environment serving senior veterans, disabled veterans, widowed spouses of veterans and seniors who have difficulty maintaining their homes/properties.

On April 5, 2023 the City Council approved an amendment to the grant agreement for an additional $25,000 to repair the home of a combat Vietnam Veteran who is the owner of the two-bedroom, one bath single family home.

Extending the agreement will allow staff to continue working with the Oath to Country Foundation to complete the improvements necessary to restore the home to a safe and healthy environment.

LEGAL REVIEW
This report has been reviewed and approved by the City Attorney as to legal form and content.

ATTACHMENTS

1. Amendment Number 2

2.Copy of executed agreement
AMENDMENT NUMBER 2

TO THE GRANT AGREEMENT

BETWEEN THE CITY OF BALDWIN PARK AND OATH TO COUNTRY
FOUNDATION.

1. PARTIES AND DATE.

This Second Amendment to the Grant Agreement (“Second Amendment”) is made and entered into this December 6, 2023, by and between the City of Baldwin Park, (“City”), and Oath to Country Foundation. (“Public Charity”).

2. RECITALS.

2.1 Agreement. City and Oath to Country Foundation entered into that certain Grant Agreement dated June 6, 2022, (“Agreement”), was amended and restated April 5, 2023 whereby Oath to Country Foundation agreed to assist veterans and their families in need of home repairs.

2.2 Amendment. City and Oath to Country Foundation mutually desire to amend the Grant Agreement for the second time to extend the Agreement with Oath to Country Foundation for an additional twelve (12) months.

3. NOW, THEREFORE, City and Consultant agree as follows:

3.1 Section VI of the Grant Agreement is hereby amended by extending the term from December 31, 2023 to December 31, 2024.

3.2 Continuing Effect of Grant Agreement. Except as amended by this First Amendment and Second Amendment, all provisions of the Grant Agreement shall remain unchanged and in full force and effect. From and after the date of this Second Agreement, whenever the term “Grant Agreement” appears in the Grant Agreement, it shall mean the Grant Agreement as amended by the First and Second Amendments.

3.3 Adequate Consideration. The Parties hereto irrevocably stipulate and agree that they each received adequate and independent consideration for the performance of the obligations they have undertaken pursuant to this First Grant Agreement.

3.4 Counterparts. This Second Amendment may be executed in duplicate originals, each of which is deemed to be an original, but when taken together shall constitute but one and the same instrument.

3.5 Authority. The persons executing this Second Amendment on behalf of the parties hereto warrant that (i) such party is duly organized and existing, (ii) they are duly authorized to execute and deliver this Second Amendment on behalf of said party, (iii) by so executing this Second Amendment, such party is formally bound to the provisions of this Second Amendment and (iv) the entering into this Second Amendment does not violate any provision of any other agreement to which said party is bound.

*SIGNATURES ON NEXT PAGE*

IN WITNESS WHEREOF, the parties have executed this Second Amendment to be executed the day and year first above written.

CITY OF BALDWIN PARK: PUBLIC CHARITY: OATH TO

COUNTRY FOUNDATION

By:________________________________ By:_________________________________ Enrique C. Zaldivar, Chief Executive Officer Dr. Justin Gracieux, Founder/President

Attest:

By: ________________________________
Christopher Saenz, City Clerk

Approved as to Form:

By:________________________________
Marco A. Martinez
City Attorney

14403 E. Pacific Avenue * Baldwin Park, CA 91706 * (626) 813-5216

STATE OF CALIFORNIA }
} ss.

COUNTY OF LOS ANGELES }

I, Shirley Qui ñones, Chief Deputy City Clerk of the City of Baldwin Park , do hereby certify that the Amended and Restated Services Agreement between the City of Baldwin Park and Oath to Country Foundation is a true and correct copy of the official legislative proceedings for the Baldwin Park Regular City Council Meeting held on April 5, 2023.

Dated this 6th day of April, 2023.

___________________________________
Shirley Quiñones
Chief Deputy City Clerk

STAFF REPORT
ITEM NO. 16

TO: Honorable Mayor and Members of the City Council
FROM: Sam Gutierrez, Director of Public Works
PREPARED BY: Anthony Vazquez, Public Works Manager
DATE: December 6, 2023
SUBJECT: Consider Approval of Amendment No. 2 to the Maintenance Services Agreement (MSA) With Yunex LLC for Traffic
Signal and Street Light Maintenance Services

SUMMARY
This report seeks the City Council’s consideration of approval for Amendment No. 2 (second amendment) to the Maintenance Services Agreement (MSA) with Yunex LLC . (Yunex), for Traffic Signal and Street Light Maintenance Services. This amendment will allow the City to extend the original contract term for a period of two (2) additional years and to include an adjusted rate increase of 5% for Fiscal Year 2023 -24 and 2.5% for Fiscal Year 2024-25 pursuant to the Consumer Price Index (CIP) for Los Angeles/ Long Beach/ Anaheim Area.

All other provisions of the MSA will remain in effect.

RECOMMENDATION
Staff recommends that Council:

1. Approve Amendment No. 2 to the Maintenance Services Contract with Yunex for Traffic Signal and Street Light Maintenance Services, extending the term contract for an additional two (2) years and adjusting rates by 5% for Fiscal Year 2023-24 and 2.5% for Fiscal Year 2024-25 due to CPI increase; and,

2. Approve an increase to the annual not-to-exceed contract amount from $100,000 to $105,000 due to the CPI increase; and

3. Authorize the Mayor and City Clerk to execute Amendment No. 2; and,

4. Authorize the Finance Director to make necessary budget adjustments per the increase of rates to allow payments approved FY 2023-24.

FISCAL IMPACT
There is no impact to the General Fund. The FY 2023-24 operations budget approved by City Council on June 21, 2023, includes a budget ed amount of $125,000 for traffic signal and street light maintenance services. The Amendment No. 2 will not exceed the amount of $105,000 in the current fiscal year, nor will it exceed the budgeted amount in the subsequent fiscal years.

BACKGROUND
The City currently owns and maintains 60 traffic signal systems, approximately 430 streetlights, and various traffic control safety devices (e.g., speed feedback signs, flashing beacons, L.E.D. crosswalk systems). These facilities must be maintained in a s afe and efficient manner to ensure the proper operation of the city’s transportation system.

On August 15, 2018, the City Council awarded a maintenance service contract to SIEMENS Mobility, Inc. for the maintenance of these facilities. On November 12, 2020, SIEMENS AG (parent company) announced that their business unit, Intelligent Traffic Systems (ITS), will be carved out into a separately managed entity within Siemens and be named Yunex LLC. As of July 1st, 2021, SIEMENS Mobility became Yunex LLC.

On March 18th, 2022, Amendment No. 1 to the MSA was executed pursuant to the change of name of service provider with the original terms of the MSA remaining in effect.

DISCUSSION
The existing Maintenance Service Agreement (MSA) with Yunex concluded its term on October 1st, 2021, and subsequently added two (2) additional one-year extensions in accordance with the original contract's provisions, which permitted time extensions through mutual agreement of the parties . However, the automatic renewal options outlined in the contract have been exhauste d and there is no mechanism in place for an additional extension. With the expiration of the current MSA on October 1st, 2023, there is a need for a second amendment to further extend the contract term . During the intervening time, t he City and Yunex have mutually decided to sustain current service levels on a month-to-month basis. This second amendment to the MSA is aimed at ensuring uninterrupted vital services while providing ample time for the City to initiate a Request for Proposal (RFP) process for a new MSA.

Additionally, Amendment No. 2 to the MSA also includes a provision for adjustments to the rates based on CPI and comprised of 5% for Fiscal Year 2023-24 and 2.5% for Fiscal Year 2024-25. All other provisions of the MSA will remain in effect. If approved, the rates will go into effect on January 1 st, 2024, and will be in place until
September 30th, 2025.

ALTERNATIVES

1. The City Council may choose not to approve a second amendment and request to send out a Request for Proposal (RFP) for a new Traffic Signal and Street Light Maintenance Agreement. This action is not recommended as this may interrupt vital services.

2. The City C ouncil may choose not to approve a second amendment and allow to piggy- back on another City’s Agreement with Yunex LLC.

3. City Council may direct staff with alternative direction.

CEQA REVIEW
Pursuant to CEQA, a "project" is defined as a "whole action" subject to a public agency's discretionary funding or approval that has the potential to either (1) cause a direct physical change in the environment or (2) cause a reasonably foreseeable indirect physical change in the environment. "Projects" include discretionary activity by a public agency, a private activity that receives any public funding, or activities that involve the public agency's issuance of a discretionary approval and is not statutor ily or categorically exempt from CEQA. (Pub. Res. Code § 21065.) To the extent that matters, it has been determined that the action does not constitute a “project” under CEQA.

LEGAL REVIEW
This report has been reviewed and approved by the City Attorney as to legal form and content.

ATTACHMENTS

1. Amendment No. 2 – Extension of Contract with CPI increase

2. Contract Extension Request with CPI Increase

3. Appendix “A” Updated Unit Price Schedule

4. Copy of original MSA for Traffic Signal and Street Light Maintenance services

5. Copy of Amendment No. 1 – Change of Name of Service Provider AMENDMENT NO. 2 TO TRAFFIC SIGNAL AND STREET LIGHT MAINTENANCE SERVICES AGREEMENT THIS AMENDS THE AGREEMENT entered into on the 5th day of September 2018. THE SECOND AMENDMENT TO TRAFFIC SIGNAL AND STREET LIGHT MAINTENANCE SERVICES AGREEMENT (this “Second Amendment”) is dated as of November 28, 2023 (the “Amendment Date”), and entered into by and between the CITY OF BALDWIN PARK, a California municipal corporation (the “City”), and YUNEX LLC, (Service Provider, Formerly known as SIEMENS Mobility Inc.) RECITALS A. The City and YUNEX LLC., entered into a TRAFFIC SIGNAL AND STREET LIGHT MAINTENANCE SERVICES Agreement dated September 5th, 2018 (the “Agreement”), which, assigned SIEMENS INC, INTELLENT TRAFFIC SYSTEMS UNIT (ITS) as the service provider named to perform during the term of this Agreement, the tasks, obligations, and services set forth in the “Scope of Services” listed as Exhibit A in the agreement; and, B. Subsequent to the Effective Date of the Agreement, Assignor divested its ITS business to a separate entity, YUNEX LLC; and, C. As of the Effective Date of this Amendment No. 2, the Agreement as amended by Amendment No. 1 on March 18, 2022, remains in effect. THEREFORE, THE TRAFFIC SIGNAL AND STREET LIGHT MAINTENANCE AGREEMENT IS AMENDED AS FOLLOWS: 1. The City and Yunex LLC mutually acknowledge and consent to extending the contract for an additional two (2) years with an adjustment of rates by 5% for FY23-24 and 2.5% for FY24-25, pursuant to the Consumer Price Index for the Los Angeles/ Long Beach/ Anaheim area. 2. Section 2, “COMPENSATION.” is amended to update compensation set forth in the Agreement as Exhibit B Titled “SCHEDULE OF COMPENSATION” Appendix "A” to reflect the adjustment of rates by 5% for FY23-24 and 2.5% for FY24-25 and shall not to exceed amount of $105,000 annual budget for each FY 23-24 and FY24-25. The schedule of compensation in Exhibit B, Appendix “A” of the Agreement shall be replaced with the attached revised Appendix “A” (Attachment 1). 3. Section 3, “TIME FOR PERFOMANCE.” is amended to update the Agreement’s performance term as follows: A. Commencement Date: October 1, 2023 B. Expiration Date: September 30, 2025 TO EFFECTUATE THIS SECOND AMENDMENT TO THE AGREEMENT, the parties have caused their duly authorized representatives to execute this Agreement on the dates set forth below. IN WITNESS WHEREOF, and in order to bind themselves legally to the terms and conditions of this Second Amendment, the duly authorized representatives of the parties have executed this Second Amendment as of the Amendment Date.

CITY OF BALDWIN PARK, a California municipal corporation By: ____________________________________ Emmanuel J. Estrada, Mayor Date: ______________________, 2023 YUNEX LLC, a limited liability company By: ____________________________________ Steve Teal, Portfolio Unit Head Date: _____________________, 2023 By: ____________________________________ Mike Hutchens, Operations Manager Date: ______________________, 2023 ATTEST: __________________________________ City Clerk

Yunex LLC
1026 E. Lacy Ave
Anaheim, CA 92805
714.284.0206
714.284.1150 Fax
https://yunextraffic.com

November 29, 2023

Anthony Vazquez
City of Baldwin Park
13135 Garvey Ave.

Baldwin Park, CA, 92648

Subject: FY23-24 & FY24-25; Contract Extension

Dear Mr. Vazquez,

This letter shall serve as our official request for a contract extension for the 2023-2024 and 2024-2025 fiscal years. With this extension our new rates will be adjusted by a rate increase of 5% for the 2023-2024 fiscal year and 2.5% for the 202 4-2025 fiscal year pursuant to the Consumer Price Index for the Los Angeles/Long Beach/Anaheim area. A copy of the report is attached for reference. With this increase, Yunex LLC will continue providing traffic signal maintenance services as per the terms and conditions of the existing agreement (“Traffic Signal and Street Light Maintenance Services Agreement by and between the City of Baldwin Park and Siemens Mobility, Inc.” Dated September 5th, 2018) between Yunex LLC, and the City of Baldwin Park for two additional years (October 1st , 2023 to September 30th , 2024) and (October 1st , 2024 to September 30th , 2025).

We feel we have completed another successful and mutually beneficial year with the City of Baldwin Park. We thank you for your business and we are looking forward to continuing servicing all your maintenance needs.

Please feel free to contact me if you have any questions or concerns.

Sincerely,

YUNEX LLC
Joshua Ferras
Joshua Ferras

Project Manager
June 6, 2018 Traffic Signal Maintenance Services - RFP Page 22 APPENDIX “A” CONTRACT UNIT PRICE SCHEDULE OF TRAFFIC SIGNAL MAINTENANCE ITEMS 1. Routine Maintenance: Each signalized intersection, per month Qty. Unit Cost TOTAL Each pole mounted Flashing Beacon, per month Overpass Bridge Light Maintenance, per month Sub-Total 2. Semi-Annual Maintenance (except after rains): a. Video Detection System maintenance where applicable, clean video detection camera lens as needed b. Signal Lenses and Signs maintenance c. CCTV Cameras where applicable, clean camera lens as needed d. Battery Back-Up System Maintenance e. Replace controller cabinet filter f. Stationary speed feedback signs Sub-Total: $ 60 69.83 4,189.80
4 33.60 134.40
1 31.50 31.50
4,355.70
Per Camera 52.50
Per Corner
Per Camera
Per System
Per Cabinet
Per Sign
126.00

57.75 30.45

3.68 29.40
*Sub-total assumes:
1 ea Item 2(a.)
1 ea Item 2(b.)
1 ea Item 2(c.)
22 ea Item 2(d.)
60 ea Item 2(e.)
20 ea Item 2(f.)
1,714.95*
Rev 1.0 August 27th, 2018
June 6, 2018 Traffic Signal Maintenance Services - RFP Page 23

3. Annual Maintenance: Field check paint condition and prepare an annual painting list of twenty (20) locations/year. a. Painting of pedestrian heads and signal heads 1) Signal Head $ Including frameworks per signalized intersection, 2) Ped Head $ excluding controller and electric service cabinets 3) PPB $ Sub-Total for 20 locations Unscheduled/Emergency Work (“Extra Work") 4. Extraordinary Maintenance: a. Replacement of standard 6’ circular detector Loops including saw cut lead-in and cable splicing b. Installation of completed new pedestrian head with Walkman/Hand indication and solid state transformer c. Completed testing of traffic signal controller cabinets, including all internal equipment and written certification d. Painting of traffic signal controller cabinet and Type II I electric service cabinet per signalized Intersection (if needed) e. Replace existing signal lights assembly with LED unit f. Installation of three-section traffic signal heads With 12-inch glass lenses, backplates, and frameworks g. Replace Type 1A pole $ h. Material and Parts: Supplier's invoice amount plus 15% markup $ 2,205.00
787.50
262.50
65,100.00*
*Sub-Total is based upon an average sized intersection (16 signals, 8 peds, 8 PPBs) 15% as noted
472.50
556.50
1,034.25
456.75
115.50
1,044.75
708.75
*Includes signal housing, framework, backplate, three visors, RYG or RA-YA-GA LEDs June 6, 2018 Traffic Signal Maintenance Services - RFP Page 24 Regular Time Per Hour Overtime Per Hour h. Labor: Traffic Signal Maintenance Supervisor Traffic Signal Technician I Traffic Signal Technician II $ Traffic Signal Laborer Traffic Signal Apprentice Trainer Other Other Rate per Hour i. Equipment: Pickup Truck Service Truck Service/Ladder Truck Boom/Ladder Truck Water Truck Concrete Saw and Truck Air Compressor with Tools Crane Bucket Truck 136.50 136.50 $136.50 128.10 158.00 $189.00

113.40 134.40 $156.45 Premium
Per Hour
*
*Premium to be charged for Sundays, Holidays and any additional circumstances as outlined per the Davis Bacon Act and the State of California Department of Industrial Relations (Prevailing Wage guidelines)

99.75 147.00 $147.00 105.00 126.00 $147.00 136.50 136.50 $136.50 128.10 158.55 $189.00Crane Operator None

23.10 26.25
Not Safe

27.30 23.10

26.25 5.25

47.25 27.30
Western Information Office
News Release Information
22-1852-SAN
Tuesday, September 13, 2022
Contacts
Technical information:
(415) 625-2270
[email protected]
www.bls.gov/regions/west
Media contact:
(415) 625-2270
Related Links
CPI historical databases
Bureau of Labor StatisticsGeographic InformationWesternNews Release Consumer Price Index, Los Angeles area — August 2022
Area prices were up 0.1 percent over the past month, up 7.6 percent from a year ago Prices in the Los Angeles area, as measured by the Consumer Price Index for All Urban Consumers (CPI-U), increased 0.1 percent in August, the U.S. Bureau of Labor Statistics reported today. (See table A.) Regional Commissioner Chris Rosenlund noted that the August increase was influenced by higher prices for shelter and apparel. (Data in this report are not seasonally adjusted.

Accordingly, month-to-month changes may reflect seasonal influences.) Over the last 12 months, the CPI-U increased 7.6 percent. (See chart 1 and table A.) Food prices advanced 9.2 percent. Energy prices rose 20.7 percent, largely the result of an increase in the price of gasoline. The index for all items less food and energy rose 6.2 percent over the year. (See table 1.)
View Chart Data
Food
Food prices increased 0.5 percent for the month of August. (See table 1.) Prices for food at home increased 0.3 percent, led by higher prices for cereals and bakery products (2.0 percent). Prices for food away from home advanced 0.7 percent for the same period.

Over the year, food prices advanced 9.2 percent. Prices for food at home rose 12.1 percent since a year ago. Price increases across food at home expenditure categories ranged from 7.6 percent for meats, poultry, fish, and eggs to 17.7 percent for other food at home. Prices for food away from home advanced 5.8 percent.

Energy
The energy index declined 5.0 percent over the month. The decrease was mainly due to lower prices for gasoline (-10.0 percent). Electricity prices were unchanged, while natural gas service prices advanced 11.0 percent for the same period.

Energy prices rose 20.7 percent over the year, largely due to higher prices for gasoline (22.6 percent). Prices paid for natural gas service increased 30.6 percent, and prices for electricity increased 10.4 percent during the past year.

All items less food and energy
The index for all items less food and energy increased 0.5 percent in August. Higher prices for apparel (9.2 percent) and shelter (0.8 percent) were partially offset by lower prices for medical care (-2.0 percent) and household furnishings and operations (-1.4 percent).

Over the year, the index for all items less food and energy rose 6.2 percent. Components contributing to the increase included new and used motor vehicles (13.4 percent), medical care (6.9 percent), and shelter (5.2 percent).

Table A. Los Angeles-Long Beach-Anaheim, CA, CPI-U 1-month and 12-month percent changes, all items index, not seasonally adjusted Month
2018 2019 2020 2021 2022
1-month12-month1-month12-month1-month12-month1-month12-month1-month12-month January 0.8 3.5 0.7 3.2 0.8 3.1 0.2 0.9 1.1 7.5
February 0.7 3.6 0.1 2.5 0.3 3.4 0.4 1.0 0.3 7.4
March 0.4 3.8 0.6 2.7 0.7 1.9 0.5 2.2 1.5 8.5
April 0.4 4.0 1.0 3.3 -0.3 0.7 1.1 3.6 0.5 7.9
May 0.4 4.1 0.2 3.1 0.4 0.9 0.6 3.9 0.8 8.0
June -0.2 4.0 0.0 3.3 0.5 1.4 0.6 4.0 1.1 8.6
July 0.2 3.9 0.1 3.3 0.6 1.9 0.6 3.9 -0.2 7.7
August 0.2 3.9 0.0 3.0 0.1 2.0 0.2 4.0 0.1 7.6
September 0.5 3.9 0.5 3.0 -0.3 1.2 0.3 4.6
U.S. BUREAU OF LABOR STATISTICS
Search Western RegionGo
Western Home Western Geography Western Subjects Western Archives Contact Western Month
2018 2019 2020 2021 2022
1-month12-month1-month12-month1-month12-month1-month12-month1-month12-month October 0.5 4.1 0.7 3.2 0.2 0.7 0.9 5.4
November -0.3 3.6 -0.3 3.2 0.1 1.0 0.6 6.0
December -0.3 3.2 -0.6 3.0 -0.2 1.5 0.4 6.6
The September 2022 Consumer Price Index for the Los Angeles area is scheduled to be released on October 13, 2022.

Technical Note
The Consumer Price Index (CPI) is a measures of the average change in prices over time in a fixed market basket of goods and services. The Bureau of Labor Statistics publishes CPIs for two population groups: (1) a CPI for All Urban Consumers (CPI-U) which covers approximately 93 percent of the total U.S. population and (2) a CPI for Urban Wage Earners and Clerical Workers (CPI-W) which covers approximately 29 percent of the total U.S. population. The CPI-U includes, in addition to wage earners and clerical workers, groups such as professional, managerial, and technical workers, the self-employed, short-term workers, the unemployed, and retirees and others not in the labor force.

The CPI is based on prices of food, clothing, shelter, and fuels, transportation fares, charges for doctors' and dentists' services, drugs, and the other goods and services that people buy for day-to-day living. Each month, prices are collected in 75 urban areas across the country from about 6,000 housing units and approximately 22,000 retail establishments—department stores, supermarkets, hospitals, filling stations, and other types of stores and service establishments. All taxes directly associated with the purchase and use of items are included in the index.

The index measures price changes from a designated reference date; for most of the CPI-U the reference base is 1982-84 equals 100. An increase of 7 percent from the reference base, for example, is shown as 107.000. Alternatively, that relationship can also be expressed as the price of a base period market basket of goods and services rising from $100 to $107. For further details see the CPI home page on the Internet at www.bls.gov/cpi and the CPI section of the BLS Handbook of Methods available on the internet at www.bls.gov/opub/hom/cpi/.

In calculating the index, price changes for the various items in each location are averaged together with weights that represent their importance in the spending of the appropriate population group. Local data are then combined to obtain a U.S. city average. Because the sample size of a local area is smaller, the local area index is subject to substantially more sampling and other measurement error than the national index. In addition, local indexes are not adjusted for seasonal influences. As a result, local area indexes show greater volatility than the national index, although their long-term trends are quite similar. NOTE: Area indexes do not measure differences in the level of prices between cities; they only measure the average change in prices for each area since the base period.

The Los Angeles-Long Beach-Anaheim, CA metropolitan area includes Los Angeles and Orange Counties in California.

Information in this release will be made available to sensory impaired individuals upon request. Voice phone: 202-691-5200; Telecommunications Relay Service: 7-1-1.

Table 1. Consumer Price Index for All Urban Consumers (CPI-U): Indexes and percent changes for selected periods Los Angeles-Long Beach-Anaheim (1982-84=100 unless otherwise noted) Item and Group

Indexes Percent change from-
Historical
data
Jun.
2022
Jul.
2022
Aug.
2022
Aug.
2021
Jun.
2022
Jul.
2022
Expenditure category
All items
314.072313.415313.6087.6 -0.1 0.1
All items (1967=100)
927.908925.967926.537 - - -
Food and beverages
314.494316.016317.7369.0 1.0 0.5
Food
315.862317.530319.0219.2 1.0 0.5
Food at home
307.614309.766310.55812.1 1.0 0.3
Cereals and bakery products
315.506325.385331.84117.4 5.2 2.0
Meats, poultry, fish, and eggs
340.484337.476337.2477.6 -1.0 -0.1
Dairy and related products
300.685302.333304.34713.5 1.2 0.7
Fruits and vegetables
421.056420.071417.611 9.3 -0.8 -0.6
Nonalcoholic beverages and beverage materials(1)
297.600295.495296.1948.4 -0.5 0.2
Other food at home
237.795243.595244.15917.7 2.7 0.2
Food away from home
318.245319.227321.6025.8 1.1 0.7
Alcoholic beverages
275.268274.646279.4735.9 1.5 1.8
Housing
349.329349.523352.2476.0 0.8 0.8
Shelter
396.161397.446400.6935.2 1.1 0.8
Rent of primary residence(2)
419.626420.576423.2394.9 0.9 0.6
Owners' equiv. rent of residences(2)(3)
410.336412.096415.1074.9 1.2 0.7
Footnotes
(1) Indexes on a December 1977=100 base.
(2) This index series was calculated using a Laspeyres estimator. All other item stratum index series were calculated using a geometric means estimator. (3) Indexes on a December 1982=100 base.
(4) Special index based on a substantially smaller sample. (5) Indexes on a December 1993=100 base.
(6) Indexes on a December 1997=100 base.
- Data not available
NOTE: Index applies to a month as a whole, not to any specific date.

Item and Group

Indexes Percent change from-
Historical
data
Jun.
2022
Jul.
2022
Aug.
2022
Aug.
2021
Jun.
2022
Jul.
2022
Owners' equiv. rent of primary residence(1)(2)
410.312412.073415.0834.9 1.2 0.7
Fuels and utilities
452.268438.677450.05014.1 -0.5 2.6
Household energy
413.181392.117405.97717.2 -1.7 3.5
Energy services(2)
410.501390.049403.90217.1 -1.6 3.6
Electricity(2)
429.503424.685424.68510.4 -1.1 0.0
Utility (piped) gas service(2)
415.134364.677404.711 30.6 -2.5 11.0
Household furnishings and operations
131.664132.307130.5007.1 -0.9 -1.4
Apparel
117.065112.323122.6209.8 4.7 9.2
Transportation
284.834279.034269.67713.8 -5.3 -3.4
Private transportation
285.890281.262272.44913.7 -4.7 -3.1
New and used motor vehicles(4)
115.058116.193116.34513.4 1.1 0.1
New vehicles(1)
194.139194.191194.8286.1 0.4 0.3
Used cars and trucks(1)
404.909406.991405.3608.5 0.1 -0.4
Motor fuel
480.589451.041406.12522.9-15.5-10.0
Gasoline (all types)
469.166439.859395.77022.6-15.6-10.0
Gasoline, unleaded regular(4)
471.683441.781396.97822.8-15.8-10.1
Gasoline, unleaded midgrade(4)(5)
445.477418.631377.87822.1-15.2 -9.7
Gasoline, unleaded premium(4)
443.040417.067377.30922.0-14.8 -9.5
Medical care
554.625557.440546.3726.9 -1.5 -2.0
Recreation(6)
118.720119.450120.0673.6 1.1 0.5
Education and communication(6)
154.579155.764157.3995.8 1.8 1.0
Tuition, other school fees, and child care(1)
2,163.8452,170.1052,216.40012.5 2.4 2.1
Other goods and services
484.584488.129489.1875.2 0.9 0.2
Commodity and service group
All items
314.072313.415313.6087.6 -0.1 0.1
Commodities
221.928220.404218.8539.9 -1.4 -0.7
Commodities less food & beverages
172.891170.243167.48010.7 -3.1 -1.6
Nondurables less food & beverages
247.147238.862232.39513.4 -6.0 -2.7
Durables
105.694106.710106.4957.1 0.8 -0.2
Services
394.879395.063396.9146.5 0.5 0.5
Special aggregate indexes
All items less medical care
303.497302.707303.3397.7 -0.1 0.2
All items less shelter
277.836276.302275.119 9.3 -1.0 -0.4
Commodities less food
177.844175.215172.61510.4 -2.9 -1.5
Nondurables
282.410278.960276.53210.8 -2.1 -0.9
Nondurables less food
252.050244.139238.29512.8 -5.5 -2.4
Services less rent of shelter(3)
403.984402.499402.2608.4 -0.4 -0.1
Services less medical care services
379.967379.974382.7026.4 0.7 0.7
Energy
456.205429.904408.39020.7-10.5 -5.0
All items less energy
307.564308.450309.9536.7 0.8 0.5
All items less food and energy
306.206306.958308.4636.2 0.7 0.5
Footnotes
(1) Indexes on a December 1977=100 base.
(2) This index series was calculated using a Laspeyres estimator. All other item stratum index series were calculated using a geometric means estimator. (3) Indexes on a December 1982=100 base.
(4) Special index based on a substantially smaller sample. (5) Indexes on a December 1993=100 base.
(6) Indexes on a December 1997=100 base.
- Data not available
NOTE: Index applies to a month as a whole, not to any specific date.

Last Modified Date: Tuesday, September 13, 2022
June 6, 2018
Traffic Signal Maintenance Services - RFP

APPENDIX “B
CONTRACT UNIT PRICE SC EDULE
OF TRAFFIC SI NAL MAINTENANCE ITEMS

1. Routine Maintenance:

Each signalized intersection,
per month
Qty. Unit Cost TOTAL
Each pole mounted Flashing
Beacon, per month
Overpass Bridge Light
Maintenance, per month
Sub-Total

2. Semi-Annual Maintenance (except after rains):
a. Video Detection System maintenance where applicable, clean video detection camera lens as needed
b. Signal Lenses and Signs maintenance
c. CCTV Cameras where applicable, clean camera lens as
needed
d. Battery Back-Up System Maintenance
e. Replace controller cabinet filter
f. Stationary speed feedback signs
Sub-Total: $
60 71.58 4,294.80
4 34.44 137.76
1 3 2.293 2.29
4,464.85
Per Camera 53.81
Per Corner
Per Camera
Per System
Per Cabinet
Per Sign
129.15

59.19 31.21
3.77

30.14 *Sub-total assumes:
1 ea Item 2(a.)
1 ea Item 2(b.)
1 ea Item 2(c.)
22 ea Item 2(d.)
60 ea Item 2(e.)
20 ea Item 2(f.)
1,757.77*
Rev 1.0 August 27th, 2018
June 6, 2018
Traffic Signal Maintenance Services - RFP

3. Annual Maintenance :

Field check paint condition and prepare an annual painting list of twenty (20) locations/year.
a. Painting of pedestrian heads and signal heads 1) Signal Head $ Including frameworks per signalized intersection, 2) Ped Head $ excluding controller and electric service cabinets 3) PPB $
Sub-Total for 20 locations
Unscheduled/Emergency Work (“Extra Work")

4. Extraordinary Maintenance:
a. Replacement of standard 6’ circular detector
Loops including saw cut lead-in and cable splicing
b. Installation of completed new pedestrian head with
Walkman/Hand indication and solid state
transformer
c. Completed testing of traffic signal controller
cabinets, including all internal equipment
and written certification
d. Painting of traffic signal controller cabinet and
Type II I electric service cabinet per signalized
Intersection (if needed)
e. Replace existing signal lights assembly with
LED unit
f. Installation of three-section traffic signal heads
With 12-inch glass lenses, backplates, and frameworks
g. Replace Type 1A pole $
h. Material and Parts:

Supplier's invoice amount plus 15% markup $
2,2 60.13
807.19
269.62
66,727.50*
*Sub-Total is based upon an average sized intersection (16 signals, 8 peds, 8 PPBs) 15% as noted
484.31
5 70.41
1,0 60.11
468.17
11 8.39
1,070.87
726.47
*Includes signal housing, framework, backplate, three visors, RYG or RA-YA-GA LEDs June 6, 2018
Traffic Signal Maintenance Services - RFP

Regular Time
Per Hour
Overtime
Per Hour
h. Labor:

Traffic Signal Maintenance
Supervisor
Traffic Signal Technician I
Traffic Signal Technician II $
Traffic Signal Laborer
Traffic Signal Apprentice
Trainer
Other
Other
Rate per Hour
i. Equipment:

Pickup Truck
Service Truck
Service/Ladder Truck
Boom/Ladder Truck
Water Truck
Concrete Saw and Truck Air
Compressor with Tools
Crane
Bucket Truck
139.91 139.91 $139.91
131.30 161.95 $193.73
116.24

137.76 $160.36
Premium
Per Hour
*
*Premium to be charged for Sundays, Holidays and any additional circumstances as outlined per the Davis Bacon Act and the State of California Department of Industrial Relations (Prevailing Wage guidelines) 102.24 150.68 $150.68
107.63 129.15 $150.68
139.91 139.91  $139.91
131.30 162.51 $193.73Crane Operator None

23.68 26.91
Not Safe

27.98 23.68

26.90 5.38

48.43 27.98
Western Information Office
News Release Information
23-709-SAN
Wednesday, April 12, 2023
Contacts
Technical information:
(415) 625-2270
[email protected]
www.bls.gov/regions/west
Media contact:
(415) 625-2270
Related Links
CPI historical databases
Bureau of Labor StatisticsGeographic InformationWesternNews Release Consumer Price Index, Los Angeles area — March 2023
Area prices were up 0.1 percent over the past month, up 3.7 percent from a year ago Prices in the Los Angeles area, as measured by the Consumer Price Index for All Urban Consumers (CPI-U), advanced 0.1 percent in March, the U.S. Bureau of Labor Statistics reported today. (See table A.) Regional Commissioner Chris Rosenlund noted that the March increase was influenced by higher prices for shelter and gasoline. (Data in this report are not seasonally adjusted.

Accordingly, month-to-month changes may reflect seasonal influences.) Over the last 12 months, the CPI-U advanced 3.7 percent. (See chart 1 and table A.) Food prices increased 6.4 percent. Energy prices declined 7.6 percent, largely the result of a decrease in the price of gasoline. The index for all items less food and energy advanced 4.3 percent over the year. (See table 1.)

View Chart Data
Food
Food prices declined 0.1 percent for the month of March. (See table 1.) Prices for food at home decreased 0.8 percent, with lower prices in four of the six grocery categories.

Prices for food away from home increased 0.8 percent for the same period.

Over the year, food prices increased 6.4 percent. Prices for food at home increased 5.4 percent since a year ago, with higher prices in five of the six grocery categories. Prices for food away from home increased 7.8 percent.

Energy
The energy index declined 0.9 percent over the month. The decrease was mainly due to lower prices for natural gas service (-20.4 percent). Prices for gasoline advanced 3.6 percent for the same period.

Energy prices declined 7.6 percent over the year, largely due to lower prices for gasoline (-15.2 percent). Prices paid for natural gas service advanced 4.4 percent during the past year.

All items less food and energy
The index for all items less food and energy increased 0.2 percent in March. Higher prices for new and used motor vehicles (0.6 percent) and shelter (0.5 percent) were partially offset by lower prices for household furnishings and operations (-1.2 percent) and medical care (-0.5 percent).

Over the year, the index for all items less food and energy advanced 4.3 percent. Components contributing to the increase included shelter (5.4 percent), education and communication (3.3 percent), and medical care (2.9 percent). Partly offsetting the increases were price decreases in used cars and trucks (-9.4 percent) and household furnishings and operations (-2.7 percent).

Table A. Los Angeles-Long Beach-Anaheim, CA, CPI-U 1-month and 12-month percent changes, all items index, not seasonally adjusted Month
2019 2020 2021 2022 2023
1-month12-month1-month12-month1-month12-month1-month12-month1-month12-month January 0.7 3.2 0.8 3.1 0.2 0.9 1.1 7.5 1.9 5.8
February 0.1 2.5 0.3 3.4 0.4 1.0 0.3 7.4 -0.3 5.1
March 0.6 2.7 0.7 1.9 0.5 2.2 1.5 8.5 0.1 3.7
U.S. BUREAU OF LABOR STATISTICS
Search Western RegionGo
ERRATA Index and average price data for electricity in Los Angeles for May through November 2022 were incorrectly published in the database. The error also includes related aggregate data within Los Angeles and several related areas. A list of affected series and the corrected indexes and average price values is available at https://www.bls.gov/bls/errata/data-series-affected-by-consumer-price- index-data-suppression-for-utilities-and-related-series-in-2022.htm.

Corrections to be made on 4/28/23.

Western Home Western Geography Western Subjects Western Archives Contact Western Month
2019 2020 2021 2022 2023
1-month12-month1-month12-month1-month12-month1-month12-month1-month12-month April 1.0 3.3 -0.3 0.7 1.1 3.6 0.5 7.9
May 0.2 3.1 0.4 0.9 0.6 3.9 0.8 8.0
June 0.0 3.3 0.5 1.4 0.6 4.0 1.1 8.6
July 0.1 3.3 0.6 1.9 0.6 3.9 -0.2 7.7
August 0.0 3.0 0.1 2.0 0.2 4.0 0.1 7.6
September 0.5 3.0 -0.3 1.2 0.3 4.6 0.5 7.8
October 0.7 3.2 0.2 0.7 0.9 5.4 0.6 7.5
November -0.3 3.2 0.1 1.0 0.6 6.0 -0.8 6.0
December -0.6 3.0 -0.2 1.5 0.4 6.6 -0.6 4.9
The April 2023 Consumer Price Index for the Los Angeles area is scheduled to be released on May 10, 2023.

Technical Note
The Consumer Price Index (CPI) is a measures of the average change in prices over time in a fixed market basket of goods and services. The Bureau of Labor Statistics publishes CPIs for two population groups: (1) a CPI for All Urban Consumers (CPI-U) which covers approximately 93 percent of the total U.S. population and (2) a CPI for Urban Wage Earners and Clerical Workers (CPI-W) which covers approximately 29 percent of the total U.S. population. The CPI-U includes, in addition to wage earners and clerical workers, groups such as professional, managerial, and technical workers, the self-employed, short-term workers, the unemployed, and retirees and others not in the labor force.

The CPI is based on prices of food, clothing, shelter, and fuels, transportation fares, charges for doctors' and dentists' services, drugs, and the other goods and services that people buy for day-to-day living. Each month, prices are collected in 75 urban areas across the country from about 6,000 housing units and approximately 22,000 retail establishments—department stores, supermarkets, hospitals, filling stations, and other types of stores and service establishments. All taxes directly associated with the purchase and use of items are included in the index.

The index measures price changes from a designated reference date; for most of the CPI-U the reference base is 1982-84 equals 100. An increase of 7 percent from the reference base, for example, is shown as 107.000. Alternatively, that relationship can also be expressed as the price of a base period market basket of goods and services rising from $100 to $107. For further details see the CPI home page on the Internet at www.bls.gov/cpi and the CPI section of the BLS Handbook of Methods available on the internet at www.bls.gov/opub/hom/cpi/.

In calculating the index, price changes for the various items in each location are averaged together with weights that represent their importance in the spending of the appropriate population group. Local data are then combined to obtain a U.S. city average. Because the sample size of a local area is smaller, the local area index is subject to substantially more sampling and other measurement error than the national index. In addition, local indexes are not adjusted for seasonal influences. As a result, local area indexes show greater volatility than the national index, although their long-term trends are quite similar. NOTE: Area indexes do not measure differences in the level of prices between cities; they only measure the average change in prices for each area since the base period.

The Los Angeles-Long Beach-Anaheim, CA metropolitan area includes Los Angeles and Orange Counties in California.

Information in this release will be made available to sensory impaired individuals upon request. Voice phone: 202-691-5200; Telecommunications Relay Service: 7-1-1.

Table 1. Consumer Price Index for All Urban Consumers (CPI-U): Indexes and percent changes for selected periods Los Angeles-Long Beach-Anaheim (1982-84=100 unless otherwise noted) Item and Group
Indexes Percent change from-
Historical
data
Jan.
2023
Feb.
2023
Mar.
2023
Mar.
2022
Jan.
2023
Feb.
2023
Expenditure category
All items
318.591317.571317.8733.7 -0.2 0.1
All items (1967=100)
941.261938.247939.139 - - -
Food and beverages
324.189326.720326.4156.2 0.7 -0.1
Food
326.080328.229327.7616.4 0.5 -0.1
Food at home
314.820317.053314.6065.4 -0.1 -0.8
Cereals and bakery products
348.891349.789351.27612.6 0.7 0.4
Meats, poultry, fish, and eggs
339.692339.260336.9771.0 -0.8 -0.7
Dairy and related products
305.558307.305301.8198.2 -1.2 -1.8
Fruits and vegetables
414.795415.390418.124-0.7 0.8 0.7
Nonalcoholic beverages and beverage materials(1)
298.893301.326297.1622.0 -0.6 -1.4
Other food at home
249.856255.402250.31711.7 0.2 -2.0
Footnotes
(1) Indexes on a December 1977=100 base.
(2) This index series was calculated using a Laspeyres estimator. All other item stratum index series were calculated using a geometric means estimator. (3) Indexes on a December 1982=100 base.
(4) Special index based on a substantially smaller sample. (5) Indexes on a December 1993=100 base.
(6) Indexes on a December 1997=100 base.
- Data not available
NOTE: Index applies to a month as a whole, not to any specific date.

Item and Group
Indexes Percent change from-
Historical
data
Jan.
2023
Feb.
2023
Mar.
2023
Mar.
2022
Jan.
2023
Feb.
2023
Food away from home
331.980333.904336.7387.8 1.4 0.8
Alcoholic beverages
277.175284.531286.3853.9 3.3 0.7
Housing
367.057361.568361.4224.8 -1.5 0.0
Shelter
409.720410.139412.2535.4 0.6 0.5
Rent of primary residence(2)
433.967434.905437.6775.5 0.9 0.6
Owners' equiv. rent of residences(2)(3)
424.353424.743426.2215.3 0.4 0.3
Owners' equiv. rent of primary residence(1)(2)
424.329424.718426.1975.3 0.4 0.3
Fuels and utilities
580.765477.230456.1245.8-21.5-4.4
Household energy
- - - - - -
Energy services(2)
- - - - - -
Electricity(2)
- - - - - -
Utility (piped) gas service(2)
839.299403.709321.3104.4-61.7-20.4
Household furnishings and operations
130.530133.353131.741-2.7 0.9 -1.2
Apparel
118.080120.473119.4490.6 1.2 -0.8
Transportation
255.814259.474261.838-1.7 2.4 0.9
Private transportation
256.904260.013262.710-2.4 2.3 1.0
New and used motor vehicles(4)
111.654111.731112.3483.9 0.6 0.6
New vehicles(1)
194.759195.514196.0383.2 0.7 0.3
Used cars and trucks(1)
354.971350.910355.382-9.4 0.1 1.3
Motor fuel
341.285357.624370.173-14.9 8.5 3.5
Gasoline (all types)
332.026348.035360.457-15.2 8.6 3.6
Gasoline, unleaded regular(4)
332.348348.609361.216-15.5 8.7 3.6
Gasoline, unleaded midgrade(4)(5)
318.398333.499344.842-14.7 8.3 3.4
Gasoline, unleaded premium(4)
319.306333.803345.131-14.3 8.1 3.4
Medical care
558.533556.341553.8042.9 -0.8 -0.5
Recreation(6)
120.785121.814121.3433.3 0.5 -0.4
Education and communication(6)
155.327155.873156.5573.3 0.8 0.4
Tuition, other school fees, and child care(1)
2,178.7942,179.8632,186.1495.1 0.3 0.3
Other goods and services
502.040500.949504.2685.8 0.4 0.7
Commodity and service group
All items
318.591317.571317.8733.7 -0.2 0.1
Commodities
213.853215.603216.3050.3 1.1 0.3
Commodities less food & beverages
158.273159.604160.539-4.2 1.4 0.6
Nondurables less food & beverages
218.373222.267223.709-5.4 2.4 0.6
Durables
101.579101.582102.119 -1.9 0.5 0.5
Services
411.538407.703407.5775.5 -1.0 0.0
Special aggregate indexes
All items less medical care
308.024307.054307.4693.7 -0.2 0.1
All items less shelter
278.306276.631276.112 2.5 -0.8 -0.2
Commodities less food
163.474164.958165.928-3.8 1.5 0.6
Nondurables
272.642275.948276.5791.2 1.4 0.2
Nondurables less food
224.834228.989230.475-4.7 2.5 0.6
Services less rent of shelter(3)
426.829415.924412.1085.6 -3.4 -0.9
Services less medical care services
397.345393.426393.3475.7 -1.0 0.0
Energy
432.933390.509386.921-7.6-10.6-0.9
All items less energy
314.015315.304315.8254.6 0.6 0.2
All items less food and energy
312.000313.159313.8284.3 0.6 0.2
Footnotes
(1) Indexes on a December 1977=100 base.
(2) This index series was calculated using a Laspeyres estimator. All other item stratum index series were calculated using a geometric means estimator. (3) Indexes on a December 1982=100 base.
(4) Special index based on a substantially smaller sample. (5) Indexes on a December 1993=100 base.
(6) Indexes on a December 1997=100 base.
- Data not available
NOTE: Index applies to a month as a whole, not to any specific date.

Item and Group
Indexes Percent change from-
Historical
data
Jan.
2023
Feb.
2023
Mar.
2023
Mar.
2022
Jan.
2023
Feb.
2023
Footnotes
(1) Indexes on a December 1977=100 base.
(2) This index series was calculated using a Laspeyres estimator. All other item stratum index series were calculated using a geometric means estimator. (3) Indexes on a December 1982=100 base.
(4) Special index based on a substantially smaller sample. (5) Indexes on a December 1993=100 base.
(6) Indexes on a December 1997=100 base.
- Data not available
NOTE: Index applies to a month as a whole, not to any specific date.

Last Modified Date: Wednesday, April 12, 2023
U.S. BUREAU OF LABOR STATISTICS Western Information Office Attn: EA & I, 90 Seventh Street Suite 14-100 San Francisco, CA 94103-6715
Telephone:1-415-625-2270 www.bls.gov/regions/west Contact Western Region

AMENDMENT AND ASSIGNMENT TO TRAFFIC SIGNAL AND STREET LIGHT

MAINTENANCE SERVICES AGREEMENT
THIS AMENDS THE AGREEMENT entered into on the 5 th day of September 2018. THE FIRST

AMENDMENT AND ASSIGNMENT TO TRAFFIC SIGNAL AND STREET LIGHT MAINTENANCE SERVICES AGREEMENT (this “First Amendment”) is dated as of March 18, 2022 (the “Effective Date”), and entered into by and between the CITY OF BALDWIN PARK, a California municipal corporation (the “City”), SIEMENS MOBILITY, INC. (“Assignor”) and YUNEX LLC (“Assignee”).

RECITALS
A. The City and Assignor, entered into a TRAFFIC SIGNAL AND STREET LIGHT MAINTENANCE SERVICES Agreement dated September 5th, 2018 (the “Agreement”), which, named A s s i g n o r as the service provider named to perform during the term of this Agreement, the tasks, obligations, and services set forth in the “Scope of Services” listed as Exhibit A in the agreement; and B. As of the Effective Date of this Amendment, the Agreement remains in effect; and C. Subsequent to the Effective Date of the Agreement, Assignor divested its ITS business to a separate entity, YUNEX LLC.

Therefore, the Traffic Signal and Street Light Maintenance Agreement is amended as follows:

1. In accordance with Section 6 of the Agreement, the City acknowledges and consents to assignment of the Agreement from Assignor to Assignee. Hence, the Agreement is amended by replacing named “Service Provider” in its entirety as follows:
“Siemens Mobility, Inc.” shall mean Yunex LLC, a limited liability company and its lawful successors or assigns. All rights, obligations, liabilities under the Agreement shall be transferred to Assignee as of the Effective Date.

2. Section 22 of Agreement is amended to update Yunex ’s notice information as follows:

Designated Service Providers Representative:

Yunex LLC
Attn: Anchal Bansal
9225 Bee Cave Road
Building B, Suite 201
Austin, TX 78733, USA
Phone: +1 770-598-4705
E-mail: [email protected]

3. Except as expressly modified by the language of this First Amendment, the Agreement remains unchanged.

TO EFFECTUATE THIS FIRST AMENDMENT AND ASSIGNMENT TO THE AGREEMENT, the parties have caused their duly authorized representatives to execute this Agreement on the dates set forth below.

IN WITNESS WHEREOF, and in order to bind themselves legally to the terms and conditions of this First Amendment, the duly authorized representatives of the parties have executed this First Amendment as of the Amendment Date.

CITY OF BALDWIN PARK, a California municipal corporation By: ____________________________________
Sam Gutierrez, Public Works Director
Date: ______________________, 2022
YUNEX LLC, a limited liability company
By: ____________________________________
Steve Teal, Portfolio Unit Head
Date: ______________________, 2022
By: ____________________________________
Mike Hutchens, Operations Manager
Date: ______________________, 2022
Siemens Mobility, Inc.

By: ____________________________________
Date: ______________________, 2022
By: ____________________________________
Date: ______________________, 2022
M
arc Buncher, CEO
Marsha Smith, CFO
April 1
Digitally signed by Hutchens Michael
DN: cn=Hutchens Michael, o=Siemens,
[email protected]
Date: 2022.04.05 14:00:10 -07'00'
Hutchens
Michael
April 5th
April 17
ATTEST:
__________________________________
City Clerk

STAFF REPORT
ITEM NO. 17

TO: Honorable Mayor and Members of the City Council
FROM: Sam Gutierrez, Director of Public Works
PREPARED BY: Bernardo Navarrete, Engineer Assistant
DATE: December 6, 2023
SUBJECT: Conduct a Public Hearing and Adopt of Resolution No. 2023- 040 “A Resolution of the City Council of the City of Baldwin Park, California, Ordering Vacationing of an Alley Between Bogart Avenue and Downing Avenue Pursuant to Streets and Highways Code 8300-8325.”

SUMMARY
This report requests that the City Council consider the ordering the vacation of an Alleyway between Bogart Avenue and Downing Avenue as shown on the map of Tract No. 94, in the City of Baldwin Park, County of Los Angeles, State of California, as requested by the adja cent property owner of 14617 Ramona Boulevard. The intended vacated public alley will allow for the owner, Cesar Chavez Foundation, to develop a 57 -unit multi- family residential building.

RECOMMENDATION
It is recommended that the City Council:

1. Hold a Public Hearing and consider all public testimony regarding this matter; and,

2. Waive further reading, read by title only and adopt Resolution No. 2023-040 entitled, “A RESOLUTION

OF THE CITY COUNCIL OF THE CITY OF BALDWIN PARK, CALIFORNIA, ORDERING

VACATIONING OF AN ALLEY BETWEEN BOGART AVENUE AND DOWNING AVENUE PURSUANT TO STREETS AND HIGHWAYS CODE 8300-8325.”

FISCAL IMPACT
The vacation of the alley will have no negative impact on the City’s General Fund. These actions will provide a minimal beneficial impact to certain restrictive funds as it allows the new property owner to move forward with the development of the property and eliminate the need for City resources and responsibility for the maintenance of the alley being vacated.

BACKGROUND
The property owner of 14617 Ramona Boulevard requested that the City vacate a 20-foot wide by 175-foot-wide strip of land currently utilized for public use purposes as an alley. The strip of land is paved with asphalt concrete pavement and is currently uti lized as a shared alley for driveway access to surrounding residential properties.

Although it is currently used as driveway access, it remains public right -of-way and is maintained by the City.

The affected properties will be acquired by the property owne r and will be included as part of the planned development.

An initial public hearing was held at the November 1, 2023, City Council regular meeting at which time there was no opposition announced regarding the City’s intent to vacate the Alley

DISCUSSION
The development proposes 57 -unit multi -family residential building, 2 and 3 stories over one level of semi - subterranean parking garage that includes a mix of one -bedrooms, two -bedrooms, and three -bedrooms. The development will include various indoor and outdoor amenities.

As part of the process of vacating said strip of alleyway, a public hearing is required. Pursuant to Resolution No. 2023-040, the subsequent Public Hearing is being held. Upon conclusion of the Public Hearing, the City Council may consider ordering the alley vacation. If so ordered, staff will ensure the documents submitted for recordation to the Los Angeles County Recorder’s office include an Irrevocable Offer of Dedication (IOD). The IOD will allow the city to re -establish ownership of said strip of land for future public right -of-way improvements.

Recordation will be contingent upon completion of review by the Planning Division under Government Code Section 65402.

ALTERNATIVES
City Council can direct staff with an alternate direction.

CEQA REVIEW
The action being considered by the city council is exempt from the California Environmental Quality Act (CEQA) because it is not a “project” under section 15378(b)(5) of CEQA guidelines. The action involves an organizational or administrative activity of government that will not result in a direct or indirect physical change in the environment.

LEGAL REVIEW
This report has been reviewed and approved by the City Attorney as to legal form and content.

ATTACHMENTS

1. Resolution No. 2023-040

2. Exhibits A, B & C

3. Public Hearing Notice

RESOLUTION NO. 2023-040

“A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

BALDWIN PARK, CALIFORNIA, ORDERING THE VACATION OF

AN ALLEY BETWEEN BOGART AVENUE AND DOWNING AVENUE
PURSUANT TO STREETS AND HIGHWAYS CODE 8300 -8325 UPON

FULFILLING ALL OF THE TERMS AND CONDITIONS HEREIN
ESTABLISHED”

WHEREAS, a request was made by the Cesar Chavez Foundation, property owner of 14617 Ramona Boulevard, pursuant to Streets and Highways Code Section 8300 et. seq. to vacate the Alley between Bogart Avenue and Downing Avenue; and
WHEREAS, pursuant to Streets and Highways Code Section 8300 et. seq. based upon staff’s analysis and assuming the conditions herein are accomplished, the proposed street vacation is unnecessary for present public use; and
WHEREAS, based upon staff’s analysis, the proposed vacation is not in conflict with the Circulation Element of the General Plan, or any other element of the General Plan, and
WHEREAS, pursuant to the provisions of the California Environmental Quality Act, Public Resources Code Section 21000 et. seq. (“CEQA” ), the State’s CEQA Guidelines, and Government Code Section 65962.5(f) (Hazardous Waste and Substances Statement), staff found no evidence that the proposed street vacation would have a significant effect on the environment and therefore a Negative Declaration will be prepared; and
WHEREAS, the vacation proceedings were initiated based on Street and Highways Code Section 8320 (a) where a public hearing is set administratively, with all required published legal notice; and
WHEREAS, notice and posting was completed per Street and Highways Code Section 8320 (b) where a description and map showing the proposed vacation has been conspicuously displayed at the site; and
WHEREAS, the City Council declared the intent to vacate the Alley between Bogart Avenue and Downing Avenue , with the adoption of Resolution No. 2023-035 on November 1, 2023.

Resolution No. 2023-040

NOW THEREFORE, IT IS HEREBY RESOLVED AS FOLLOWS:

SECTION 1. That the above recitals are all true and correct

SECTION 2. That the public interest, safety, and convenience will be satisfied with the street vacation described in Exhibit “A” and shown in Exhibit “B” attached hereto and made a part hereof; and

SECTION 3. That the City Council of the City of Baldwin Park does hereby elect to proceed under and by virtue of the provisions of Section 8300 et. seq. of the Street and Highways Code of the State of California; and

SECTION 4. That this Resolution shall become effective upon verification by the City’s Director of Public Works that (i) all necessary utility easements have been retained, and (ii) an Irrevocable Offer of Dedication to transfer ownership of a 175-foot strip adjacent to Bogart Avenue and Downing Avenue for future right-of-way purposes has been provided by the property owner; and

SECTION 5. That the street vacation requires that all the conditions of approval are satisfied before the land transaction documents are recorded in the Office of the County Recorder, such conditions of approval are shown in Exhibit “C” attached hereto and made a part hereof; and

SECTION 6. That title to the street vacated under this resolution shall be transferred to the owner of record of the property directly adjacent to the vacated land, such adjacent property also known as 14617 Ramona Boulevard.

SECTION 7. That the City Clerk shall certify to the adoption of the Resolution and shall cause the same as to be published or posted in the manner prescribed by law.

Resolution No. 2023-040

APPROVED AND ADOPTED this 6th day of December 2023.

___________________________________
Emmanuel J. Estrada
Mayor

ATTEST:

STATE OF CALIFORNIA
COUNTY OF LOS ANGELES SS:

CITY OF BALDWIN PARK

I, Christopher Saenz, City Clerk of the City of Baldwin Park do hereby certify that the foregoing Resolution No. 2023-040 was duly adopted by the City Council of the City of Baldwin Park at a regular meeting thereof held on December 6, 2023, and that the same was adopted by the following vote to wit:

AYES:

NOES:

ABSENT:

ABSTAIN:

____________________________
Christopher Saenz
City Clerk

EXHIBIT C

CONDITIONS OF APPROVAL
Submit an irrevocable offer of dedication for a 20-foot wide by 175-foot long strip of land adjacent to Bogart Avenue and Downing Avenue for future right-of-way purposes.

CITY OF BALDWIN PARK

NOTICE OF PUBLIC HEARING
NOTICE IS HEREBY GIVEN that the City Council of the City of Baldwin Park will hold public hearings on their regularly scheduled meeting of WEDNESDAY, December 6, 2023 at 7:00 p.m.(or soon there after) in the City Council Chambers located at 14403 E. Pacific Avenue, Baldwin Park, CA. Said public hearing shall consider:

The benefit of public input concerning an intent to vacate a portion of the alley located near the intersection of Ramona Boulevard and Downing Avenue. The right-of-way proposed to be vacated is located along Downing Avenue and is more particularly described as follows:

Alley shown on the map of Tract No. 94, in the City of Baldwin Park, County of Los Angeles, State of California, recorded in book 13, page 85 of maps, in the office of the County recorder of said county, lying Southerly of and adjacent to lot 57 of said tract; bounded on the West by the East line of lot 66 of said tract; and bounded on the East by the Southern prolongation of the East line of said lot 57.

Protests, comments or objections in reference to the intended vacated alley must be delivered in writing to the Chief Deputy City Clerk, City of Baldwin Park, 14403 E. Pacific Avenue, Baldwin Park, California 91706, prior to the conclusion of the public hearing on December 6, 2023. Please include the service address with any correspondence.

Every written protest shall be emailed to the Chief Deputy City Clerk at [email protected] before 4:00 PM on December 6, 2023.

For additional information, please contact Sam Gutierrez, Director of Public Works at (626) 960-4011.

STAFF REPORT
ITEM NO. 18

TO: Honorable Mayor and Members of the City Council
FROM: Ron Garcia, Director of Community Development
Nick Baldwin, AICP, City Planner
DATE: December 6, 2023
SUBJECT: A request for consideration and recommendation of approval of a Zoning Code Amendment to reduce the minimum number of hotel rooms, a Conditional Use Permit for the operation of a Hotel (Extended Stay America) , Variance to reduce the number of required parking space s, and a Design Review for architectural, parking lot, and landscaping improvements. (Location: 14624 Dalewood Street; Applicant: Lisette Sanchez- Mendoza - MIG for Sonjay Patel and Jayesh Patel of SNS
Hotels and Zyra Hospitality, LLC; Case Numbers: AZC 22 - 03, CP 22-11, ZV-22-07, PR 22-46).

SUMMARY
The Applicant is requesting approval to allow the renovation of the former Regency Hotel and site (the “Project”), located at 14624 Dalewood Street. The Applicant is proposing to renovate the vacant hotel, redesign the parking lot, and remove the swimming pool. The Applicant is also proposing to maintain the same number of hotel rooms and to increase the size of hotel room by enclosing the exterior balcony space, develop additional square footage for the hotel lobby area, and add a canopy over the main entrance. The project consists of the following requests:
1) Adopt a Mitigated Negative Declaration of Environmental Impact analysis for the Project. 2) Zoning Code Amendment (AZC 22-03) to reduce the minimum number of hotel or motel rooms from 100 rooms to 70 rooms or more;
3) Conditional Use Permit (CP 22-11) for the operation of the hotel use; 4) Variance (ZV 22-07) to reduce the number of parking spaces required from 76 to 60 parking spaces; and
5) Design Review (PR 22-46) for the renovation of the existing vacant hotel building, parking lot, and landscaping improvements.

On November 8, 2023, the Planning Commission reviewed the project and recommended approval to City Council.

RECOMMENDATION
It is recommended that the City Council

1. Open and conduct a Public Hearing; and

2. Adopt City Council Resolution 2023-041 entitled,
“A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BALDWIN PARK CERTIFYING

THE MITIGATED NEGATIVE DECLARATION OF ENVIRONMENTAL IMPACT PURSUANT TO THE CALIFORNIA ENVIRONMENTAL QUALITY ACT OF 1970”; AND

3. Waive further reading, read by title only and introduce Ordinance 1508 entitled:

“AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BALDWIN PARK, CALIFORNIA, AMENDING SECTION 153.120.310 (B) OF CHAPTER 153 TITLE XV OF THE

BALDWIN PARK MUNICIPAL CODE, RELATING TO THE MINIMUM NUMBER OF HOTEL AND MOTEL GUEST ROOMS”; AND

4. Adopt City Council Resolution 2023-042 entitled,

“RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BALDWIN PARK ADOPTING THE FINDINGS OF FACT AND APPROVING A CONDITIONAL USE PERMIT (CP 22 -11) FOR THE OPERATION OF A HOTEL, A VARIANCE (ZV 22 -07) TO DEVIATE FROM THE MINIMUM NUMBER OF REQUIRED PARKING SPACES, A ND DESIGN REVIEW (PR 22 -46) TO

FACILITATE THE RENOVATION AND REOPENING OF AN EXISTING VACANT HOTEL AS AN EXTENDED STAY AMERICA”.

FISCAL IMPACT
It is estimated that the General Fund will receive $275,000 potential Transit Occupancy Tax.

BACKGROUND
The project site is relatively flat and is the location of the vacant Regency Hotel. The Regency Hotel, built in 1967, is vacant and has ceased operation in February 2017. The 4-story hotel has 72 hotel rooms and 44 parking spaces. The small retail pad, which is detached from the hotel building, is not part of the Project and the Applicant is currently seeking potential tenant for the vacant 818 square foot space.

When the Regency Hotel was built in 1967, the structure and parking complied with the City’s zoning code at that time. However, the Regency Hotel became a legal, non -conforming use in 1981, when the City adopted an ordinance requiring all hotels and motels to receive a Conditional Use Permit. The property became more non - conforming in 1986, when the City adopted an ordinance requiring all hotels and motels to contain no fewer than 100 guest units or rooms.

The Applicant is the new owner of the Regency Hotel property. The Applicant wishes to renovate and reopen the hotel. The Applicant is proposing to maintain the same number of hotel rooms and to increase the number of on- site parking spaces. The first order of analysis would be the consideration of approving a code amendment to allow for fewer hotel rooms. The second order of analysis is the consideration of a CUP and a parking variance.

To provide additional context, a summary of the historical benchmark dates of the Regency Hotel is as follows:
− December 4, 1967, the City issued Certificate of Occupancy for the 4-story, 72-room motor lodge (motel), which is permitted by right in the C-2 General Commercial Zone. − May 6, 1981, the City adopted Ordinance 818, which required motels within C -2 Zone to have a Conditional Use Permit (CUP).
− June 4, 1986, the City adopted Ordinance 930, which amended the zoning code to include a new zone classification named Freeway Commercial (F-C).

− June 12, 1986, the City adopted Ordinance 929, which changed the Regency Hotel site from C -2 zone to F-C zone.
− June 12, 1986, the City adopted Ordinance 941, which created development standards for hotels and motels, such as hotels and motels shall be located within 300 feet of a freeway right-of-way and to contain a minimum of 100 guest units.
− December 2014, Dalewood Holding, LLC purchased the Regency Hotel property. − February 19, 2017, the third floor of the Regency Hotel caught on fire and remainder of hotel received smoke, heat, and water damage; the electrical, plumbing, and mechanical systems were also damaged. − December 31, 2017, the motel business license expired and was not renewed. − January 2, 2018, Dalewood Holding, LLC submitted plans to repair the fire damages. − January 30, 2018, Planning Division approved the plans to repair the fire damages, subject to the condition that all repairs be completed on or before February 19, 2018 per BPZC Section 153.200.160(C), which states that nonconforming structures damaged by any casualty may be restored to the condition that existed prior to the casualty if completed within 12 months from the date of causality. − February 12, 2018, the Building & Safety Division issued a final approval of the plans, thereby allowing a building permit to be issued.
− March 28, 2018, the City’s Community Development Director issued an Order of Abatement of Nonconforming Use to the property owner, Dalewood Holding LLC. − August 14, 2019, through to February 12, 2020, the Planning Commission and City staff met with Dalewood Holding LLC on their request to Appeal the Order of Abatement. On February 12, 2020, the Planning Commission denied the Appeal.
− February 16, 2022, the Applicant became the new owner of the Regency Hotel property.

DISCUSSION
The Applicant purchased the vacant hotel site with the intention to renovate the property into an Extended Stay America hotel. The Applicant has been in negotiations with the Extended Stay America (ESA) and has secured a letter of interest from the corpora tion to operate an Extended Stay America hotel on the site. To enable the redevelopment of the site, the Applicant wishes to amend the zoning code by reducing the minimum number of hotel and motel rooms from 100 rooms to 70 or more rooms. Should this code amendment be granted, the Planning Commission may then consider the Applicant’s request for a Conditional Use Permit to allow for the AZC 22 - 03, ZV-22-07, CP 22 -11, PR 22 -46 14624 Dalewood Street, Baldwin Park, CA Page 5 of 17 operation of the hotel, as well as the request for a Parking Variance, and Design Review. A Mitigated Negative Declaration has been prepared to evaluate and mitigate potential environmental impacts caused by the Project. Pursuant to Section 153.120.290, a market feasibility study was completed by an independent consultant for the Applicant. The Applicant has also prepared additional special studies, analyzing specific areas of concern identified by City staff.

These studies include a Parking Study to substantiate the request to provide fewer parking spaces than required by the zoning code, and a Traffic Impact Analysis to evaluate traffic impacts on specific intersections and the need for a traffic turn-lane entering the site. The study determined that there is no need for the left turn lane.

The Project is further described below as well as the corresponding required planning entitlements and highlighted findings from the special studies and reports. The Applicant wishes to renovate and reopen the existing, unoccupied 72-room hotel on a 1.23- acre site. A small expansion of the building area is proposed as part of the project. To enlarge the size of the hotel rooms, the existing outdoor balconies would be enclosed, and the façade of the structure would be redesigned to account for the removal of the balconies. In addition, approximately 350 square foot hotel lobby would be added and an approximately 300 square foot steel -framed canopy would be installed over the proposed passenger drop -off zone at the entrance of the hotel. The remodel and renov ation of the hotel would add approximately 3,944 square feet of total building area, thereby increasing the hotel square footage from 33,768 square feet to 37,712 square feet. The proposed Project would also include the demolition and backfilling of the ex isting 950 -square foot swimming pool with approximately 300 cubic yards of soil,

reconfiguration, and repaving of the existing parking lot to provide an additional 16 parking spaces and two loading spaces to the existing 44 spaces, and 7,710 square feet of landscaping improvements throughout the parking lot area. Vehicular access to the site would be provided by two existing driveways along Dalewood Street.

The westernmost driveway would be restricted to vehicles exiting and right-turn only. The easternmost driveway would allow vehicles to enter and exit. Although the stand -alone 818 square-foot retail pad is not a part of the Project, the Applicant included the retail pad as a restaurant use for purposes of analysis within the special studies.

Zoning Code Amendment (Section 153.210.720 to 153.210.760): The current zoning code requires hotels and motels to have a minimum of 100 guest units (Section 153.120.310 (B)). The Applicant wishes to amend the zoning code for hotels and motels to allow for fewer rooms by reducing the minimum number of rooms to no less than 70 guest rooms. To substantiate this request, the Applicant researched and compared the current zoning code requirements related to the minimum number of hotel or motel rooms of eight surrounding cities in the San Gabriel Valley and the Inland Empire to the City of Baldwin Park. As seen in the table below, Baldwin Park has the most restrictive requirement for the number of rooms, four times the room requirement when compared to Covina and West Covina. The Applicant has stated that with the approval of the reduction from 100 rooms to 70 or more rooms, Baldwin Park would still be more restrictive than the other test cities.

CITY MINIMUM NUMBER OF ROOMS
Baldwin Park 100
West Covina 25
Covina 25
San Dimas 6
El Monte No Minimum
Duarte No Minimum
Monrovia No Minimum
Glendora No Minimum
Upland No Minimum

In addition, the Applicant has prepared a Market Feasibility Report, which affirms the financial viability of the proposed hotel project, by analyzing the current market conditions, and considering the costs of renovation and the operational income and exp ense over a ten year period for this type of hotel. The Market Feasibility Report analyzed current and future conditions within the greater Los Angeles region as well as the immediate market area. The Market Feasibility Report is attached (Attachment # 6). A resolution recommending approval of the code amendment to the City Council has been prepared for Planning Commission consideration.

Conditional Use Permit (Section 153.210.450 to 153.210.500): Hotel and Motel uses require the approval of a Conditional Use Permit (Section 153.050.020). The existing Regency Hotel did not apply for a CUP and was, therefore, deemed a legal, non -conforming use in 1981 and has ceased operation since approximately Feb ruary 2017. Pursuant to BPZC Section 153.050.020, the Applicant is seeking a CUP for the operation of the hotel use.

The Applicant desires to renovate the hotel property and to reopen the hotel facility as an Extended Stay America hotel. The Applicant has been in negotiations with the Extended Stay America corporation and has secured a

letter of interest from the corporation. A resolution of approval has been prepared to grant the CUP and the Parking Variance, discussed below.

Parking Variance (Section 153.210.400 to 153.210.440): The Property currently has the original 44 parking spaces for the former 72-room Regency Hotel. The Applicant is maintaining the same number of hotel rooms and redesigning the parking lot to increase the number of parking spaces by adding 16 parking space s for passenger cars and two loading spaces for trucks. The additional 16 spaces for passenger cars are achieved by removing and filling the swimming pool and restriping the configuration of parking spaces. This results in a total number of 60 parking spaces for passenger cars plus two loading spaces for trucks. However, the provision of 60 parking spaces is still 16 spaces short of the code required 76 parking spaces for passenger cars - 72 spaces for the 72-room hotel and 4 spaces for the retail pad. The Applicant has prepared a Parking Study to determine if the proposed parking spaces would be sufficient to meet parking demand generated by the hotel and the retail pad as a “Food and Beverage Sales Facility Grocery Store, Liquor Store, and Specialty Food Shop” requiring 1 space/200 square feet of building area. The study utilized ITE industry standards as well as conducting a physical survey of six surrounding and comparable hotels on a daily basis over a one-week period. The survey was taken between 12:00 am and 3:00 a.m. April 28-May 4, 2023. The Parking Study concludes that the hotel and retail pad may generate a combined parking demand of 57 spaces weekdays and 60 spaces weekends, which is equivalent to the same number of parking spaces proposed for passenger cars, and therefore, should not generate any parking shortages.

The Parking Study further discusses the increasing usage of Uber and Lyft and recommends that the hotel staff park along the eastern edge of the property to allow the more easily accessi ble parking spaces to be used by the traveling public. The Parking Study also states that the two loading spaces, due to its wider dimensions (15’W and 15’L versus a passenger car space 9’W and 18’L), can be used for up to three passenger cars at the direction and supervision of the hotel staff, when needed. A resolution of approval has been prepared to grant the Parking Variance and the CUP discussed above.

The table below represents information pertaining to the hotel structure and the parking lot.

HOTEL AND PARKING LOT FEATURES

Existing Proposed Comments
Site Area 53,569 s.f. 53,569 s.f. 1.23 acres
Building Height 36’3” to parapet 40’3” to
elevator shaft
Before and After: 4-story
Building Square Footage 33,768 s.f. 37,712 s.f. An increase of 3,944 s.f.

Total Hotel Rooms 72 72

Total Parking Spaces 44 60 Required is 76 spaces
Deficient 16 spaces
Landscaping 7,665 s.f. Code requires 3,020 s.f. of
landscaping

FAR - 0.21 Max. FAR for FC is 2.0

Architecture
The Applicant is proposing to add architectural and paint treatments to the existing 4 -story hotel, which is perpendicular to the I-10 Freeway. The design is predicated on a simple aesthetic that will focus on attracting the travelling public. The paint pa lette consists of a soft muted white color for the stucco areas and two darker grey/brownish colors to highlight the trim areas. The easterly façade of the building is the front of the hotel facing the parking lot area. This façade is comprised of a grid p attern of hotel rooms, punctuated with architectural aluminum-screened air exchange units. At both ends of the facade, decorative vertical aluminum fins provide architectural detailing above a new electrical room at the southerly end and a new canopy/entrance at the northerly end. The westerly façade, facing the now vacant lot (future home for medical offices), is of similar architectural design and color palette with the decorative vertical aluminum fins extending towards the ground. The northerly façade, which faces the freeway, presents a modulated pattern of colored panels, separated by metal recessed screed lines. The southerly façade is of similar architectural design and color palette. The architectural plans are attached (Attachment #7).

Signage
The Applicant will submit a sign permit, for City review and ministerial approval, during the building permit/plan check phase and is made a condition of approval. It is anticipated that the Applicant may install one internally illuminated channel letter s ign on northern façade and on the eastern façade, and directional traffic signage throughout the site.

Landscaping
The applicant is proposing a total of 7,665 square feet of landscaping on the site. The landscaping is located around the perimeter of the building site, except for the westerly property line, and within the parking area. The landscaping proposed fronting Dalewood Street will serve to soften the aesthetic appearance of the building from the street. In addition, a landscape buffer along the easterly boundary of the project site would be provided. The Municipal Code requires that a minimum of ten percent of the parking lot area to be landscaped. The parking lot area is 30,195 square feet; therefore, 3,020 square feet of landscaping is required. The applicant is providing 7,665 square feet of landscaping, which is more than the required landscaping. A final landscape and irrigation plan are required per the conditions of approval. Presently, all the trees located in the public right-of-way along Dalewood Street are intended to remain undisturbed.

Final Design Review
Approval According to Baldwin Park Municipal Code Section 153.210.070, the highest designated Approving Authority for all requested permits shall take final action on all permits. Therefore, while the Planning staff has tentatively approved the design revi ew application for the proposed project in June 2023, staff recommends the Planning Commission forward the Design Review to the City Council for consideration and approve the design review application.

GENERAL PLAN CONSISTENCY
The project site is designated as “General Commercial (GC)” in the City of Baldwin Park General Plan. Further the project site is located within the Dalewood/Puente/I -10 Area. The Project is consistent with the following General Plan goals and policies. Land Use Goal 2.0: which encourages compatible development with existing land use. Land Use Goal 3.0: Provide for the revitalization of deteriorating land uses and properties. Land Use Goal 4.0: Redevelop the area with a large commercial user.

CEQA REVIEW

The initial study prepared for the Project disclosed that the Project will have a significant impact on the environment. Mitigation measures have been incorporated into the project’s design and as conditions of approval to reduce impacts on the environment to a less than significant level. A Mitigated Negative Declaration of Environmental Impact (MND) has been prepared pursuant to the requirements of the California Environmental Quality Act (CEQA) of 1970, as amended. The Notice of Intent to Adopt a Mitigated Negative Declaration was sent on October 4, 2023, to the California Office of Planning and Research and the County Clerk, County of Los Angeles. Also, the MND was circulated for public review and comment for 20 days, starting on October 5, 2023, and ending on October 24, 2023. The MND is provided herein as Attachment #6. On October 5, 2023, legal notice was published in the Baldwin Park Press, posted at City Hall and the City of Baldwin Park website. Public Hearing Notices/Notice of Intent were also mailed to the property owners and occupants within a 300 -foot radius of the subject property.

No comments were received by the City during the public review period.

LEGAL REVIEW
This report has been reviewed and approved by the City Attorney as to legal form and content.

ATTACHMENTS

1. Mitigated Negative Declaration, Resolution 2023-041

2. Design Review, Conditional Use Permit, and Variance Resolution 2023-042

3. Ordinance No. 1508

4. Vicinity Map

5. Initial Study/Mitigated Negative Declaration (https://www.baldwinpark.com/onlinedocuments/community- development/planning/environmental-documents)

6. Market Feasibility Study, Dated November 28, 2022

7.Exhibit “A”, Architectural Plans

RESOLUTION NO 2023-041

A RESOLUTION OF THE CITY COUNCIL OF THE CITY

OF BALDWIN PARK CERTIFYING THE MITIGATE D

NEGATIVE DECLARATION OF ENVIRONMENTAL
IMPACT PURSUANT TO THE CALIFORNIA
ENVIRONMENTAL QUALITY ACT OF 1970

THE CITY COUNCIL OF THE CITY OF BALDW IN PARK DOES HEREBY RESOLVE AS FOLLOWS:

WHEREAS, an appli cation has been filed by Sonjay Patel and Jayesh Patel, on behalf of SNS Hotels and ZYRA Hospitality, LLC. (Applicant) to renovate and reopen a vacant 4-story, 72-room hotel located at 14624 Dale wood Street, Baldwin Park by amending Baldwin Park’s Zoning Code (BPZC) Section 153.120.310 (B)) to reduce the minimum number of hotel and motel rooms from 100 rooms to no less than 70 rooms for properties that are zon ed Hotel or Motel; requesting a Parking Variance, as set forth in BPZC Section 153.210.400 to deviate from the minimum number of on -site parking spaces from 76 spaces to 62 spaces; requesting a Conditional Use Permit (CUP) for the operation of a hotel as set forth in BPZC Section 153.050.020 for properties located in the Freeway Commercial (FC) zone; and

WHEREAS, pursuant to the California Public Resources Code section 21067 and the State CEQA Guidelines (Cal. Code Regs., tit. 14 § 15000 et seq. ) section 15051, the city is the lead agency for the proposed Project; and

WHEREAS, an Initial Study was prepared for the project pursuant to State CEQA Guidelines section 15063; and

WHEREAS, on the basis of the Initial Study, which concluded that the P roject would have potential ly significan t impacts but that those impacts could be reduced to less t han significant levels with implementation of the proposed mitigation measures, the City determined that a Mitigated Negative Declaration (“MND”) should be p repared for the Project pursuant to Public Resources Code sections 21 064.5 and 21080(c), and the State CEQA Guidelines section 15070 et seq.; and

WHEREAS, on October 5, 2023 , staff distributed for public review copies of a proposed MND prepared for the P roject pursuant to the Califor nia Environme ntal Quality Act (Public Resources Code Section 21000 et seq.) (“CEQA”). The MND identified potentially significant but mitigable impacts relating to the issue areas of Biological Resources, Cultural Resources, Geology/Soils, and Tribal Cultural Resources. The mitigation measures for Tribal Cultural Resources are in corporated in CUL-1 through CUL -3 to address any previously undiscovered archeological resources related to TCRs encountered during project implementation. This includes measures for both funery /ceremonial and non -funery/non-ceremonial resources. Incorporation of Resolution No. 2023-041

these mitigation measures would ensure that potential impacts to buried TCRs are less than significant through requirements of evaluation, salvage, c uration, and report ing; and

WHEREAS, a 20-day public review period is required pursuant to Public Resources Code Section 21091 , the MND was made available for public review between October 5, 2023, to October 24, 2023; and

WHEREAS, the City has end eavored to take all steps and to impose all conditions necessary to ensure that impacts to the environment would not be significant; and

WHEREAS, the Planning Commission, upon giving the req uired notice, did on the 8th day of November, 2023 conduct a duly advertised public hearing to consider the subject application, at which time the Planning commissio n adopted Resolution PC 23- 23 recommending approval to the City Council; and

WHEREAS, the City Council did, on the 6th day of December, 20 23, conduct a duly advertised public hearing as prescribed by law, and considered evidence presented by the Planning Commission, Planning D ivision, and other interested parties; and

WHEREAS, The Planning Commission and City Council of the City of Baldwin Park reviewed and considered the MND and the information con tained in said MND; and

WHEREAS, in accordance with Section 15074(b) of the State CEQA Guidelines (California Code of Regulations Sections 1500 et seq.) the decision -making body of the lead agency must consider the MND and comments r eceived before approving the Project; and

WHEREAS, a Mitigation Monitoring and Reporting Program (“MMRP”) has been prepared for the project to implement mitigation measures required by the Project and is attached as Exhibit A.

NOW, THERFORE, the Planning Commission of the C ity of Baldwin Park does hereby resolve, find, determine, and declare as follows:

SECTION 1. The above recitatio ns are true and correct and are incorporated herein by this reference.

SECTION 2. As the decision -making body for the Project, the City Council has reviewed and consid ered the information contained in the Initial Study/MND and administrative record for the Pro ject, including all oral and written comments rece ived during the public revi ew period. The City Council finds that the Initial Study/ MND contains a complet e and accurate reporting of the environmental impacts a ssociated Resolution No. 2023-041

with the Projec t. The City Council further finds that the Initial Study/MND and the administrative record have been completed in compliance with CEQA.

SECTION 3. Based on the Initial Study/MND and the administrative record including all w ritten and oral evidence presented to the City Council, the City Council finds that all environmental impacts of the Project are either insignificant or can be mitigated to a level of in significance pursuant to the mitigation measures outline d in the MND and the MMRP. The City Council further finds that there is no substantial evidence in the administrative record supporting a fair argument that the Project may result in significant environmental impacts. No new significant environmenta l effects have bee n identified in the Initial Study/MND or otherwise do not constitute a substantial revision requiring recirculation under State CEQA Guidelines section 15073.5.

SECTION 4. In accord ance with the BPMC Section 153.010.060, the City Council hereby further finds that the Final Mitigated Negative Declaration for AZC 22- 03, ZV-22-07, CP 22-11, PR 22-46) is accurate, objective, complete and in compliance with the Guidelines for Implementation of the Cal ifornia Environmental Quality Act (CEAQ Guidelines) a nd Procedures of the State of California and the City of Baldwin Park and represents the independent ju dgment of the City Council. The City Council has reviewed all documentation comprisin g the F inal Mitigated Negative Declaration and consistent with the City Council’s recommendation, can (i) find the Final Mitigation Negative Declaratio n is adequate and complete and (ii) certify said Final Mitigated Negative Declaration as being in compliance with CEQA Guidelines Section 15074.

SECTION 5. The City Council hereby approves and adopts the Initial Study/MND pursuant to Public Resources Code section 21080, subdivision (c)(2).

SECTION 6. Pursuant to Public Resources code sectio n 21081.6, the City Council approves and adopts the MMRP prepared for the Project.

SECTION 7. The Mitigation Measure(s), including the Reporting/Mo nitoring Program, adopted for AZC 22-03, ZV-22-07, CP 22-11, PR 22-46 shall be fully complied with as specified in this Resolution and the Mitigation, Monitoring, and Repo rting Program (see Exhibit A). The measures shall be included as conditions o f required permit action, and compliance would result in potential impacts reduced to a level of less than significant and there would be no residual impacts from the p roposed project.

Proposed mitigation for those impacts is as follows:

BIO-1: If vegetation removal is scheduled during the nesting sea son (typically February 1 t o September 1), then a focused survey for active nests shall be conducted by a qualified biologist no more than five (5) days before the beginning of project-related activities (e.g., demolition, excavation, grading and vegetation removal). Surveys must be conducted in proposed work areas, staging and storage ar eas, and soil, equipment, and mate rial stockpile areas. For passerines and small raptors, surveys must be Resolution No. 2023-041

conducted within 250-foot radius surrounding the work area (in non - developed areas and where access is feasible). For larger raptors, such as those from the genus Buteo, the survey area must encompass a 500 - foot radius. Surve ys must be conducted by a qualified biologist d uring weather conditions suited to maximize the observation of possible nests and concentrate on areas of suitable habitat. If a lapse in project-related work of five d ays or longer occurs, an additional nest survey is required before work can be reinitiated. If nests are encountered during any preconstruction survey, a qualified b iologist must determine if it may be feasible for construction to continue as planned without impacting the success of the nest, depending on conditions specific to each nest and the relative location and rate of construction activities. Any nest(s) within the project site shall be monitored by a qualified biolo gist dur ing vegetation removal if work is occurring directly adjacent to the pre-determined no - work buffer. If the qualified biologist determines construction activities have potential to adversely a ffect a nest, the biologist would immediately inform the construction manager to halt construction activities within minimum exclusi on buffer of 50 feet for songbird nests, and 20 0 to 500 feet for raptor nests, depending on species and location. Construction activities within the no -work buffer may proceed after a qualified biologist determines the nest is no longer active due to natural causes ( e.g. young have fledged, predation or other non-anthropogenic nest failure).

CUL-1: Retain a Native American Mo nitor Prior to Commencement o f Ground-Disturbing Activities

A. The project applicant/lead agency shall retain a Native American Monitor from or approved by the Gabrieleño Band of Mi ssion Indians – Kizh Nation. The monitor shall be retained prior to the commencement of any “ground -disturbing activity” for the subje ct project at all project locations (i.e., both on -site and any off -site locations that are included in the project description/definition and/or required in connection with the project, such as publ ic improvement work). “ Ground disturbing activity” shall include, but is not limited to, demolition, pavement removal, potholing, au guring, grubbing, tree removal, boring, grading , excavation, drilling, and trenching.

B. A copy of the executed monitoring agreement shall be submitted to the lead agency prior to the earlier of the commencement of any ground- disturbing activity, or the issuance of any permit necessary to commence a ground disturbing activity.

C. The monitor will complete daily monitoring logs that w ill provide descriptions of the relevant ground -disturbing activities, the type of construction activities performed, locations of g round-disturbing activities, soil types, cultur al-related materials, and any other facts, conditions, materials, or discoveries of significance to the Tribe.

Monitor logs will ident ify and describe any discovered TCRs, including Resolution No. 2023-041

but not limited to, Native American cultural and historical artifacts, remains, places of significance, etc., (collectively, tribal cultural resources, or “TCR”), as well as any discovered Native American (ancestral) human remains and burial goods. Copies of monitor logs will be pro vided to the project applicant/lead agency upon written request to the Tribe.

D. On-site tribal monitoring shall conclude upon the latter of the following (1) written confirmation to t he Kizh from a designated point of contact for the project applicant/lead agency that all ground-disturbing activities and phases that may involve ground-disturbing activities on the project site or in connection with the project are complete; or (2) a determination and written notification by the Kizh to the project applicant/lead agency that no future, planned construction activity and/or development/construction phase at the project site possesses the potential to impact Kizh TCRs.

CUL-2: Unanticipated Discovery of Tribal Cultural Reso urce Objects (Non - Funerary/Non- Ceremonial)

A. Upon discovery of any TCRs, all construction activities in the immediate vicinity of the discovery shall cease (i.e., no t less than the surrounding 50 feet) and shall not resume until the discovered TCR has been fully assessed by the Kizh monitor and/or Kizh archaeologist.

The Kizh will recover
B. and retain all di scovered TCRs in the form and/or manner the Tribe deems appropriate, in the Tribe’s sole discretion, and for any purpose the Tribe deems appropriate, including for educational, cultural and/or historic purposes.

CUL-3: Unanticipated Discovery of Human Remains and Associated Funerary or Ceremonial Objects

A. A. Native American human remains are defined in PRC 5097.98 (d)(1) as an inhumation or cremation, and in any state of decomposition or skeletal completeness. Funerary objects, called associa ted grave goods in Public Resources Code Section 5097.98, are also to be treated according to this statute. If Native American human r emains and/or grave goods are disc overed or recognized on the project site, then Public Resource Code 5097.9 as well as Health and Safety Code Section 7050.5 shall be followed. Human remains and grave/burial goods shall be treated alike per California Public Resources Code section 5097.98(d)(1) and (2). Preservation in place (i.e., avoidance) is the preferred manner of treatm ent for discovered human remains and/or burial goods. Any discovery of human remains/burial goods shall be kept confidential to prevent further disturbance.

Resolution No. 2023-041

GEO-1: Conduct Paleontological Sensitivity Training for Construction Personnel.

The Applicant must retain a professional paleontologist, who meets the qualifications set forth by the Society of Vertebrate Paleontology, to conduct a Paleontological Sensitivity Training for construction personnel before commencement of excavation activities. The training will include a handout and will focus on how to identify paleontological resources that may be encountered during earthmoving activities, and the procedures to be followed in such an event; the duties of paleontological monitors; notification and other procedures to follow upon discovery of resources; and the general steps a qualified professional paleontologist would follow in conducting a salvage investigation if one is necessary.

GEO-2: Conduct Periodic Paleontological Spot Checks During Grading and Earth-Moving Activities.

The Applicant must retain a professional paleontologist, who meets the qualifications set forth by the Society of Vertebrate Paleontology, to conduct periodic Paleontological Spot Checks beginning at depths below six feet from the surface to determine if construction excavations extend into older Quaternary deposits. After the initial Paleontological Spot Check, further periodic checks will be conducted at the discretion of the qualified paleontologist. If the qualified paleontologist determines that construction excavations have extended into the older Quaternary deposits, construction monitoring for Paleontological Resources are required. The Applicant must retain a qualified paleontological monitor, who will work under the guidance and direction of a professional paleontologist, who meets the qualifications set forth by the Society of Vertebrate Paleontology. The paleontological monitor must be present during all construction excavations (e.g., grading, trenching, or clearing/grubbing) into the older Pleistocene alluvial deposits. Multiple earth-moving construction activities may require multiple paleontological monitors. The frequency of monitoring is based on the rate of excavation and grading activities, proximity to known paleontological resources and/or unique geological features, the materials being excavated (native versus artificial fill soils), and the depth of excavation, and if found, the abundance and type of paleontological resources and/or unique geological features encountered. Full-time monitoring can be reduced to part-time inspections if determined adequate by the qualified professional paleontologist.

GEO-3: Cease Ground-Disturbing Activities and Implement Treatment Plan If Paleontological Resources Are Encountered.

Resolution No. 2023-041

In the event that paleontological resources and or unique geological features are unearthed during ground -disturbing activities, ground - disturbing activities the paleontological monitor may halt or di vert away from the vicinity of the find so that the find can be evaluated. A buffer area of at least 50 feet must be established around the find where construction activities are no t allowe d to continue u ntil approp riate paleontological treatment plan is approved by the Applicant and the City. Work is allowed to continue outside of the buffer area. The Applicant and City will coordinate with a professional paleontologist, who meets the qualifications set forth by the Society of Vertebrate Paleontology, to d evelop an appropriate treatment plan for the re sources. Trea tment may include implementation of paleontological salvage excavations to remove the resource along with subsequent labo ratory p rocessing and analysis or preservation in place. At the paleontologist’s discretion and to reduce construction delay, the grading and excavation contractor will assist in removing rock samples for initial processing.

GEO-4: Prepare Report Upon Completion of Monitoring Services.

Upon completion of the above activities, the professional paleontologist will prepare a report summarizing the results of the monitoring and salvaging efforts, the methodology used in these efforts, as well as a description of the fossils collected and their significance. The report will be submitted to the Applicant, the City, the Natural History Museums of Los Angeles County, and representatives of other appropriate or concerned agencies to signify the satisfactory completion of the project and required mitigation measures.

SECTION 8: The custodian of records for all materials that consti tute the record of proceeding upon wh ich its decision is based is the City Planner. Those documents are available for public review in the Planning Division located at 14403 E.

Pacific Ave. Baldwin Park CA 91706.

SECTION 9. The City Clerk shall certify to the adoption of this resolution and hereafter the same shall be in full force and effect.

Resolution No. 2023-041

PASSED AND APPROVED this 6th day of December 2023.

_____________________________________
Emmanuel J. Estrada
Mayor

ATTEST:

STATE OF CALIFORNIA
COUNTY OF LOS ANGELES ss.

CITY OF BALDWIN PARK

I, Christopher Saenz, City Clerk of the City of Baldwin Park, do hereby certify that the foregoing Resolution No. 2023-041 was duly and regularly approved and adopted by the City Council at a regular meeting thereof, held on the 6 th day of December 2023 by the following vote:

AYES:

NOES:

ABSTAIN:

ABSENT:

________________________________________
Christopher Saenz
City Clerk

RESOLUTION NO 2023-042

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

BALDWIN PARK ADOPTING THE FINDINGS OF FACT
AND APPROVING A CONDITIONAL USE PERMIT (CP 22 -
11) FOR THE OPERATION OF A HOTEL, A VARIANCE
(ZV 22 -07) TO DEVIATE FROM THE MINIMUM NUMBER

OF REQUIRED PARKING SPACES, AND DESIGN
REVIEW (PR 22 -46) TO FACILITATE THE RENOVATION

AND REOPENING OF AN EXISTING VACANT HOTEL AS

AN EXTENDED STAY AMERICA

THE CITY COUNCIL OF THE CITY OF BALDWIN PARK DOES
HEREBY RESOLVE AS FOLLOWS:

WHEREAS, an application has been filed by Sonjay Patel and Jayesh Patel , on behalf of SNS Hotels and Zyra Hospit ality, LLC. to renovate and reopen a vacant hotel at 14624 Dalewood Street, Baldwin Park, hotel uses require the approval of a Conditional Use Permit as set forth in Baldwin Park Zoning Code (BPZC) Section 153.050.020; and

WHEREAS, an application has been filed by Sonjay Patel and Jayesh Patel , on behalf of SNS Hotels and Zyra Hospitality, LLC. to deviate from the minimum number of on-site parking spac es as set forth in Table 150.040 for Hotel Uses for the purpose of operating a hotel; and

WHEREAS, based on the information in the application s, an Initial Study was prepared for the Project pursuant to State CEQA Guidelines section 15063 . The In itial Study concluded that the Projec t would have potentially significant impacts but that those impacts could be reduced to less than significant levels with im plementation of proposed mitigation measures, the City determined that a Mitigated Negative Declaration (“MND”) sho uld be prepar ed for the Project pursuant to Public Resources Code sections 21064.5 and 21080(c), and the State CEQA Guidelines section 15070 et seq.; and

WHEREAS, the Planning Commission, upon giving the req uired notice, did on the 8th day of November, 2023 conduct a duly advertised public hearing to consider the subject application, at which time the Planning commissio n adopted Resolution PC 23- 25 recommending approval to the City Council; and

WHEREAS, the City Council did, on the 6th day of December, 20 23, conduct a duly advertised public hearing as prescribed by law, and considered evidence presented by the Planning Commission, Planning D ivision, and other interested parties; and

Resolution No. 2023-042

WHEREAS, the City Council has independently considered and reviewed t he information in the Mitigated Negat ive Declaration and Mitigation Monitoring and Reporting Program in making its recommendation on the Project; and

WHEREAS, the custodian of records for all materials that constitute the record of proceeding upon which its decision is based is the City Pla nner. Those documents are available for public review in the Planning Division loca ted at 14403 E. Pacific Ave.

Baldwin Park CA 91706; and

WHEREAS, all legal prerequisites t o the adoption of this Resolution have occurred.

NOW, THEREFORE, the City Council of the City of Baldwin Park does hereby resolve, find, determine and declare as follows:

SECTION 1. The City Council finds that all the facts set forth in the above recitals of this resolution are true and correct and are incorporated herein by this reference.

SECTION 2. A duly noticed public hearing was held on November 8 , 2023 on said Application s by the Planning Commission, and based upon evi dence presented including applicable staff reports and each member of the Commission being famili ar with the property, it was determined that the facts as required by the Baldwin Park Municipal Code for the granting of the Applic ation are set forth in the staff report dated November 8, 2023 from Ron Garcia, Director of Community Development, to the Chair and Planning Commiss ioners (“Staff Report”) which is true and correct and the Application should be approved.

SECTION 3. A duly noticed public hearing wa s held on December 6, 2023 on said Application s by the City Council , and based upon evidence presented including applicable staff reports and each member of the Commission being familiar with the property, it was determined that the facts as required by the Baldwin Park Municipal Code for the granting of the Application are set forth in the staff report dated December 6, 2023 from Ron Garcia, Director of Community Development, to the Chair and Planning Commissioners (“Staff Report”) which is true and correct and the Application should be approved.

SECTION 4. The City Council does hereby adopt the following Findings of Fact applicable to all conditional use permits:

(a) The use is conditionally permitted w ithin the subject zone and complies with the intent of all applicable provisions of this chapter.

The s ite is zoned Freeway Commercial (F -C) and hotels and motels are conditionally permitted. The site is developed with a n existing vacant 4-story, 72- room hotel and a parking lot with 44 parking spaces . A Cond itional Use Permit Resolution No. 2023-042

will allow the Applicant to renovate and reopen the v acant hotel and repave and restripe the parking lot with an additional 16 parking spaces for passenger cars and two loading spaces for trucks . As designed, the Project complies with the F- C development standards, the goals and policies of the General Plan, a nd will be conditioned to further reduce Project construction and operational impacts.

(b) The use will not impair the in tegrity and character of the zone in which it is to be located.

Implementation of the Project will revitalize a former hotel use that h as been vacated for approximately six years. The adjacent vacant lot to the west is scheduled for the construction of a medical office buildi ng. The Project would not disrupt or modify the existing roadway network or affect or disrupt residential neighborhoods in the Project vicinity. The vacant 818-square foot retail pad is not a part of the Project but will be integrated into the design and operation of the site. The Applicant is seeki ng a compatible commercial use, such as coffee purveyor, to occupy the space.

(c) The project site is physically suitable for the type of land use being proposed.

The Project is designed to comply wi th the developm ent standards of the F -C zone. No deviations from the F -C development standards are proposed. Further, the Project has been carefully desig ned to enhance the architectural integrity of the vacant hotel building and landscaping. The exi sting parking lot will be repaved and restriped to accommodate additional parking spaces and enhanced landscape features.

(d) The use is c ompatible with any land uses presently on the su bject property.

The project site was formerly occupied by the Regency Hotel and a small coffee shop, located in a detached 818 -square foot retail pad. The Applicant owns the entire project site. Built in 2017, the 4-story hotel offered 7 2 guest rooms to the traveling public. The parking lot provided 44 parking spaces. The App licant is proposing to improve the p roject site by first renovating and reopening the hotel facility as a n Extended Stay America hotel, with the same number of guest rooms. Although the parking lot will also be improved and restriped with an additional 16 passenger ca r parking spaces, it will be 16 spaces fewer tha n required by the zoning code. The Applicant has commissioned an independent parking consultant to prepare a Parking Study for the operation of the hotel and 818-square foot retail pad. The Parkin g Study concluded that , during the peak hours of demand, the number of parking spaces is sufficient to meet the demand of both uses and should not create a parking shortage or overflow issues ont o the neighborhood. Although the vacant retail pad is not a part of the Project, the Applicant is seeking a compatible tenant that will be synergistic with the hotel Resolution No. 2023-042

use, such as a co ffee purveyor. Further, the Project has been car efully designed to accentuate the building’s architectural qualities and to provide a focal point for travelers.

(e) The use will be compatible with exi sting and future land uses within the zone and the general area in w hich the proposed use is to be located.

The proposed hotel use of the property complies with the City’s 2020 General Plan (November 2002) and the City ’s Zoning Code. The property has a General Commercial land us e designation and a Freeway Commercial zone. The proposed Project fulfills a number of General Plan goals and policies, such as Land Use Goal 2, by encouraging compatible development, Land Use Goal 3, by revitalizing the deteriorated property, and Land Use Goal 4, by redeveloping the property with a ne w and branded hotel. The property is currently blighted and contains a v acant hotel and retail pad for approximately the past six years. The Project will enhance the outwardly appearance of the hotel structure with new architectural features and tr eatments, provide new landscaping to enhance the site, renovate the interior of the hotel with new lobby, entrance, an d larger guest rooms, and repave and restripe the parking lot with addition al parking spaces .

The Project does not conflict with any provisions in the City’s Gene ral Plan and Zoning Ordinance.

(f) Adequate provisions for water, sewer and public utilities and services are available to ensure that the use will not be detrimental to public health and safety.

The Initial Study has determined that there are no significant impacts to ut ilities and ser vices. Adequate provisions for water, sewer, and public utilities and services are available to ensure that the use will not be detrimental to public health and safety. The site is currently developed with a h otel and no expansion in the number of hotel rooms are envisioned.

(g) Adequate provisions for public access are available to serve the use.

Pedestrians accessing the Proj ect site may utilize pedestrian facilities (e.g., sidewalks and c rosswalks) that are par t of the surrounding street system.

Sidewalks are provided along Dalewood Street. Bike racks would be provided on the site pursuant to the Baldwin Park Zoning Code Section 153.150.150 and CalGreen building standards. Public and bus and rail transit servi ce is provided within the Project area and is currently provided by Foothill Transit, Baldwin Park Transit, and Metrolink . The Foothill Transit Silver Streak runs along the I -10 Freeway and has a sheltered bus stop approximately 375 feet from the Project .

Resolution No. 2023-042

The Project does not conflict w ith adopted plans, policies, or programs supporting alternative transportation.

(h) The use is consistent with the General Plan.

The Project is consistent with the Land Use Plan and the Zoning C ode. The Project satisfies Land Use Goal 2, which encourages compatible d evelopment with existing land uses, Lan d Use Goal 3, which encourages the revitalization of deteriorated land uses (i.e., renovation and reopening of the hotel , repaving and adding additional parking spaces, and new l andscaping throughout the pro ject site), and Land Use Goal 4, which encourages the development of larger commercial fa cilities. Further, the proposed hotel use is permitted as a conditional use within the Freeway Commercial zone.

(i) The use will not be detrimental to the public interest, health, safety, convenience or welfare.

The Initial Study prepared for the Project has determined tha t there are no significant impacts to safety and welfare. The Project will remove blighting conditions prevalent on the project site, transform the exterior features of the hotel with attractive architectural treatments, renovate the interior of the hotel with contemporary furniture and layout , relandsc ape the project site, and increase the number of on -site parking spaces by repaving and restriping the deteriorated parking lot.

SECTION 5. The City Council does hereby adopt the following Findings of Fact applicable to all parking variance:

(a) There are exceptional or extraordinary circumstances or conditions applicable to the property involved, or to the intended use of such property which do not generally apply to other p roperties in the same zone.

The Applicant is proposing to renovate and reopen the vacant hotel without increasing the number of guest rooms. The vacant hotel has 72 guest rooms and a parking lot with 44 parking spaces. While the number of guest rooms are remaining the same, the Applicant is increasing the number of parking spaces by re-asphalting and restriping the parking lot as well as removing and back filling the swimming pool to accommodate more parking spaces. Although an additional 16 passenger car parking spaces will be provided, it is still 16 spaces short of the 76 parking spaces that is required by code- 72 spaces for the hotel and 4 spaces for the retail pad . To further assess the sufficiency of parking, the Applicant has commissioned a parking study by an independent parking consultant, which indicates that the 60 passenger car parking spaces are sufficient to meet the parking needs of the hotel and retail pad during peak periods.

Resolution No. 2023-042

(b) Such variance is necessary for the preservation and enjoyment of a substantial property right possessed by other property similar ly situated, but which is denied by the property in question.

The Applicant purchased the existing hotel property for the purpose of renovating the hotel facility into an Extended Stay America hotel . The Applicant is maintaining the same number of hotel rooms and is not adding any new ancillary hotel uses, such as restaurants, and meeting rooms, that would create additional parking demand . The Applicant is providing additional parking spac es by demolishing and backfilling the swimming pool and redesigning the parking layout. The new parking lot will be repaved with 16 more passenger car parking spaces, resulting in a total number of 6 0 parking spaces. This is a deficienc y of 16 parking spaces.

(c) The granting of the variance will not be materially detrimenta l to the public welfare or injurious to the adjacent properties.

While still deficient in the number of code -required parking spaces, the Applicant is providing additional new parking spaces by demolishing and backfilling the swimming pool, repaving and restriping the parking lot. The Applicant will be able to provide an additional 16 passenger carparking spaces towards a fuller compliance of the parking requirement s. The Applicant is providing standard sized parking spaces plus two loading/unloading spaces ; there are no compact spaces. To further assess the sufficiency of the parking , the Applicant has commissioned a n independently prepared Parking Study, which concludes that the 60 passenger car parking spaces are sufficient to meet the parking demand during peak usage.

(d) The granting of the variance will not adversely affect the General Plan of the City of Baldwin Park.

The variance will not adverse ly or negative ly affect the General Plan or its goals because the property will be utilized for commercial p urposes in accordance with the site’s General Plan designation of General Commercial that allows hotel uses with the approval of a conditi onal use permit. In addition, the Project supports and furthers Goals 2, 3, and 4 of the General Plan by developing a major commercial project that is compatible with and enhances surrounding properties.

SECTION 6. The Application, as herein above described below, and the same is hereby approved subject to the following conditions:

(a) Comply with plans reviewed by the City Council on December 6, 2023; and

Resolution No. 2023-042

(b) The Mitigation Monitorin g and Reporting P rogram (MMRP) shall be adhered to as specified; and

(c) The building shall consist of high-quality materials as p roposed; and

(d) That the subject site sha ll be maintained in a neat and orderly manner; that the site shall be kept free of litter and that all graffiti (throughout th e sit e) shall be removed within twenty -four (24) hours at the expense of the applicant and/or owner; and

(e) That prior to the issua nce of any building permits, the applicant shall submit an application for the installa tion of new signs for ministerial review and approval by City staff; and

(f) The applicant shall submit plans, showing the locatio n, type, and dimensions of the signs to the Planning Division and Building Departments; and

(g) The applicant shall submit parking lot landscaping plan in compliance with Municipal Code Section 153.150.110 to the City for review and approval prior to the issuance of any b uilding permit; and

(h) The proposed project is subject to Water Efficient Landsc ape Standards, pursuant to Section 15 3.160.020 of the Baldwin Park Municipal Code. After entitlements are approved by the Planning Commission, the applicant shall s ubmit a Landscape
Documentation Package during Building Plan Check pursuant to Section 153.160.080. Th e Landscape Documentation Package shall incorporate an approved Preliminary Design Plan.

Landscape and Irrigation plans sha ll be prepared by a California licensed landscape architect; and

(i) That prior to the issuance of any building permits, t he Applicant shall pay applicable Dev elopment Impact F ees assessed for the project; and

(j) The applicant shall comply with any conditions of approval as required by the Public Works Department prior to the issuance of any building permits; and

(k) The applicant shall submit a Certificate of Compli ance to merge parcels as required by the Public Works Department prior to the issuance of any building permits; and

Resolution No. 2023-042

(l) If within two year s after the date of approval of AZC 22-03, ZV- 22-07, CP 22 -11, PR 22 -46 all conditions of approval have not been satisfied, then AZC 22-03, ZV-22-07, CP 22 -11, PR 22 -46 shall become null and void; and

(m)The applicant shall sign a notarized affidavit within ten (10) days of the date of this resolution stating that the applicant has read and accepts all of the conditions of approval.

(n) Should any existing tree on the property that are designated as a Mature Tree in accordance with the City ’s Tree Ordinance is removed, a tree removal application shall be submitted to the City’s Tree Department (Planning Division) for review and approval prior to any said removal; and

(o) Any fut ure development of the site(s) shall be subject to the current development standa rds contained in the Municipal Code and any Design Guidelines in effect at said time.

(p) Employee parking shall be located toward the back of the hotel property, along the westerly property line, so that guests can more readily find parking spaces in the main parking area in front of the hotel entrance.

(q) Shared parking opportunities between the h otel and retail pad use shall be available for use by both the hotel and retail pad uses, parking spaces shall not be restricted or reserved by either the hotel or retail pad uses.

(r) Approval of this resolution is contingent upon , and shall not be effective unless and until effective date of Ordinance No. 1508.

Public Works:

General Conditions

(s) An Erosion Control Plan shall be submitted concurrently with th e grading plan clearly detailing er osion control measures. These measures shall be implemented during construction. The erosion control plan shall conform to national Pollutant Discharge Elimination System (NPDES) standards and incorporate the appropriate Best Management Practices (BMP’s) as specified in the Storm Water BMP Certification. For construction activity which disturbs one a cre or greater so il a Storm Wate r Pollution Prevention Plan (SWPPP) will be needed.

Resolution No. 2023-042

(t) The applicant shall comply with Low Impact Development (LID) requirements to the satisfaction of the City Engineer . Please refer to City handouts. Applicant to ensure trash enclosure proposed will be covered per LID requirements.

(u) The applicant shall provide the proposed landscaping plans, specifically noting improvements proposed within the public right- of-way.

(v) Project indicates two separate parcels ( APN 8463-001-014 & 8463-001-015) being improved as on e parcel. Applicant to submit an application for a Parcel Map to merge the two lots.

Soils Report/Grading/Retaining Walls

(w) The Owner shall execute and record a covenant agreement to maintain and hold the City harmless for all existing improvements in the public right-of-way.

(x) Prior to grading plan submittal, a geotechnical report prepared by a Geotechnical Engineer, licensed by the State of California, shall be submitted by the applicant for approval by the City . (The report should include results of percolation test).

(y) The applicant shall submit drainage and grading plans prepared by a Civil Engineer, licensed by the State of C alifornia, prepared in accordance with the City’s requirements for the City ’s review and approval. A list of re quirements for grading plan check i s available from the Public Works Department. All grading (cut and fill) calculations shall be submitted to the City concurrently with the grading plan.

(z) All easements and flood hazar d areas shall be clearly identified on the grading plan.

(aa) The grading plan shall show the location of any retaining walls and the elevat ions o f the top of wall/footing/retaining and the finished grade on both sides of the retaining wall.

Construction deta ils for retaining walls shall be shown on the grading plan. Calculations and details of retaining walls shall be submitted to the Buildi ng and Safety Division for review and approval.

(bb) The grading plan sho uld include a photometric plan, including but not limited to the illumination levels at drive way entries, passenger loadin g zones and co llector driveways shall not be Resolution No. 2023-042

less than twice the average illumination of the adjacent parking lot. Show locat ion of all trees and distances to the ne arest light pole. Light standards shall be placed 20 ft. o r more from trees and other ob jects that may po tentially obstruct lightin g. Lighting spill-over shall not exceed 0.5 foot candles at any point on residential premises, churches and other sensitive uses.

(cc) All equipment staging areas shall be lo cated on the proj ect site.

Staging area, including material stockpile and equipment storage area, shall be enclosed within a 6 foot -high chain link fence. All access points in the fenced area shall be locked whenever the construction site is not supervised.

(dd) Grading of the subject pro perty shall be in accordance with the California Building Co de, City Gra ding Ordinanc e, Hillside Management Ordinance and acceptable grading practices.

(ee) All slopes shall be seeded per landscape plan and/or fuel modification p lan with native g rasses or pl anted with ground cover, shrubs, and trees for erosion control upon comp letion of grading or some other alternative method of er osion co ntrol shall be completed to the satisfaction of the City Engineer.

(ff) A pre-construction meeting shall be held at the project site with the grading contractor, applicant, and city grad ing inspector at least 48 hours prior to commencing grading operations.

(gg) Rough grade certifications by project soils and civil engineers shall be subm itted prior to issuance of build ing permits for the foundation of the commercial structure. Retaining wall permits may be issued concurrently with grading permits.

(hh) Final grade certifications by project civil engineers shall be submitted to the Public Works Department prior to the issuance of any projec t fina l inspections/certificate of occupancy respectively.

Drainage

(ii) Detailed drainage system information of the lot with careful attention to any flood hazar d area shall be submitted. Al l drainage/runoff from the devel opment shall be c onveyed from the site to the natural drainage course. No on -site drainage shall be conveyed to adjacent parcels, unless that is the natural drainage course.

Resolution No. 2023-042

(jj) Prior to the issuance of a grading permit, a c omplete hydrology and hydraulic study shall be prepared by a Civ il Eng ineer registered in the State of California to the sati sfaction of the City Engineer and Los Angeles Public Works Department.

Off-Site Street Improvements

(kk) Applicant shall replace any damaged sidewalks and curb & gutter matching th e exi sting width (the length of the subject property’s frontage) in accordance with current American Public Works Association (APWA) standards.

(ll) Applicant shall replace any existing driveway appro ach (fronting the subject pr operty) if it ’s damaged or does n ot meet ADA compliancy. New driveway approach to be constructed in
accordance with current American Public Works Associat ion (APWA) standards.

(mm) All public improvement shall be appro ved by the City Engineer, constructed with an enc roachment per mit and completed prior to final i nspection/certificate of occupancy issuance. Contractor to obtain all permits required by 3 rd party jurisdictions.

(nn) Future funding for 2” Coldmill and Overlay from edge of gutter to street centerline for remaining streets for Dalewood St. (Unless asphalt restoration is required per Condition below).

(oo) Any street cuts required due to proposed improvements are subject to City moratorium standards including but not limited to asphalt restoration, traffic loop replacement and re-striping.

(pp) The applicant shall replace and record an y centerline ties and monuments that are removed as part of this construction with the Los Angeles County Public Works Survey Division.

(qq) Prior to the issu ance of any permits, the applicant shall provide written per mission to the satisfaction of the Cit y from any property owners which will be affected by offsite grading.

(rr) Street improvement plans in a 24”x36” sheet format, prepared by a registered Civil Eng ineer, shall be submitted to and approve d by the City Engineer. Streets shall not exceed a maximum slope of 12 percent.

(ss) Prior to building occupancy, applicant shall constru ct base and Resolution No. 2023-042

pavement for all streets in accordance wit h soils report prepared by a California registered geotechnical en gineer and approved by the City Engineer or as otherwise directed by the City Engineer.

Utilities

(tt) Easements, satisfactory to the C ity Engineer and the utility companies, for public utility and public services purpose shall be offered and shown on the detailed sit e plan for dedication to the City or affected utility company.

(uu) Will Serve Le tters shall be submitted stating that adequate facilities are or will be available to serve the prop osed project shall be submitted to the City from all utilities such as, but not limited to, phone, gas, water, electric, and cable.

(vv) Applicant shall relocat e and undergro und any existing on -site utilities to the satisfaction of th e City Engineer and the respective utility owner.

(ww) Underground utilities shall not be constructed within the drip line of any mature tree except as approved by a registered arborist.

Sewers

(xx) Applicant shall obt ain connection permit(s) from the C ity and County Sanitation District prior to issuance of building permits.

(yy) Applicant, at applicant’s sole cost and expense, shall construct the sewer sy stem in ac cordance with the C ity, Los Angeles County Public Works Di vision. Sewer plans shall be submi tted for review and approval by the City.

(zz) Applicant to provide a sewer inspection report which will include results on the condition of the existing sewer line servicing the subject property. The report should also include a video from a CCTV sewer and pipe inspection.

Traffic Mitigations

(aaa) A Traffic Impact Analysis Report shall be submitted for re view and approval by the Cit y for the intersections; P uente Ave. & Dalewood St. , Dalewood St. & I -10 Freeway On/ Off-Ramps, Dalewood St. & Merced Ave. Such report shall address on-site Resolution No. 2023-042

circulation and parking requir ements and also the option of having a left-turn pocket on Dalewood St.

Building and Safety:

General Conditions

(bbb) All Conditions of Approval as approved by the Planning Commission shall appear as notes on the pl ans submitted for building plan check and permits.

(ccc) Building design shall comply with the Current Edition of the California Building Code (CBC).

(ddd) Submit complete construction plans to Building Divi sion for formal plans review and building permit.

(eee) Separate applica tion(s), plan check(s), and permit(s ) is/are required for:

a. Demolition work
b. Retaining walls (see E ngineering Divisi on for
requirements)
c. Block walls exceeding 6 feet in height
d. Signs
e. Plumbing
f. Mechanical
g. Electrical

(fff) Complete architectural plans prepar ed a by State licensed architect will be required. Submit design for review at formal plans review.

(ggg) Complete structura l plans with calculations by State licensed engineer or architect will be required. Submit design for review at formal plans review.

(hhh) Compliance to California T -24 Energy regulation s will be required. Submit design for review at formal plans review.

(iii) Compliance to California Green Building Standards Code will be required. Submit design for review at formal plans review.

(jjj) Separate plumbing, mechanical and electrical plan check may be required. Submit design for review at formal plans review.

Resolution No. 2023-042

(kkk) Los Angeles County Fire Prevention plans review and approval is required for the proposed occupancy. Contact (323) 890-4125 for plans submittal requirements.

(lll) Compliance with the State of Cali fornia Accessibility regulations is required, including:
a. Building entrances sh all be provided with an accessible path of travel connecting the building entrances from the public sidewalk, accessible parking, and other buildings or essential facilities located on the site.
b. Accessible parking:
i. Shall be located at each main entranc e. Where
multiple major entrances occur, accessible parking
shall be equally distributed among the entrances.
ii. Shall be 9 feet wide by 18 feet de ep and be
provided with a loading an d unloading passenger
access aisle of 8 feet wide for Van spac e and 5
feet wide for regular accessible spaces.
c. All restrooms serving the building shall be accessible. d. Comply with CBC 11B- 224 Transient Lodging

(mmm) Total pl umbing fixtures required shall be determined by California Plumbing Code (CPC).

SECTION 6. The City Clerk shal l certify to the adoption of this resolution and hereafter the same shall be in full force and effect.

Resolution No. 2023-042

PASSED AND APPROVED this 6th day of December 2023.

_____________________________________
Emmanual J. Estrada
Mayor

ATTEST:

STATE OF CALIFORNIA
COUNTY OF LOS ANGELES ss.

CITY OF BALDWIN PARK

I, Christopher Saenz, City Clerk of the City of Baldwin Park, do hereby certify that the foregoing Resolution No. 2023-042 was duly and regularly approved and ado pted by the City Council at a regular meeting thereof, held on the 6 th day of December 2023 by the following vote:

AYES:

NOES:

ABSTAIN:

ABSENT:

________________________________________
Christopher Saenz
City Clerk

1 ORDINANCE NO. 1508

AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BALDWIN

PARK, CALIFORNIA, AMENDING THE BALDWIN PARK MUNICIPAL
CODE, TITLE XV, LAND USAGE, CHAPTER 153, ZONING CODE,
SECTION 153.120.310 (B) RELATED TO THE MINIMUM NUMBER OF

REQUIRED GUEST ROOMS FOR HOTELS AND MOTELS

WHEREAS, Baldwin Park Municipal Code Title XV, Land Usage, Chapter 153, Zoning Code, implements the City’s General Plan, establishing land use and development regulations in the City of Baldwin Park (“City”), which includes regulations governing hotel and motel development projects;

WHEREAS, Baldwin Park Municipal Code Title XV, Land Usage, Chapter 15 3 Zoning Code, Section 153.120.310 (B) states that hotels and motels shall contain a minimum of one hundred (100) guest units as adopted by Ordinance 1346 on May 12, 2012;

WHEREAS, the City has received an application from Lisette Sanchez-Mendoza - MIG for Sonjay Patel and Jayesh Patel of SNS Hotels and Zyra Hospitality, LLC (Applicant) for the rehabilitation and re -opening of the former seventy -two (72) room Regency Hotel.

WHEREAS, the Applicant has prepared a comparative survey of surrounding cities’ zoning code regarding the minimum number of hotel/motel rooms, which determined that many cities either have none or a smaller number of required minimum number of hotel/motel rooms;

WHEREAS, the Applicant commissioned an independent consultant to prepare a market feasibility study for the proposed project, which concludes that the proposed 72 - room hotel is financially viable;

WHEREAS, the hospitality industry has recently experienced greater diversification of product types to reflect changing market demands;

WHEREAS, the City desires to amend it s local regulations to reduce the number of minimum hotel and motel guest units;

WHEREAS, the City Planning Commission held a duly noticed public hearing on November 8, 2023 to consider the proposed Zoning Ordinance Amendment related to reducing the number of minimum hotel and motel guest units , and approved Planning Commission Resolution No. 23-24, recommending that the City Council adopt Ordinance No. 1508; and

WHEREAS, on December 6, 2023, the City Council held a duly noticed public hearing on the proposed Zoning Ordinance Amendment related to related to reducing the number of minimum hotel and motel guest units , at which all those wishing to be heard were allowed to speak or present written comments and other materials.

2 NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF BALDWIN PARK DOES HEREBY ORDAIN AS FOLLOWS:

SECTION 1. The foregoing recitations are hereby adopted by the City Council as findings. Based on those findings, and the evidence and records presented, the City Council determines the public health, safety and general welfare of the City, its residents, and property owners can benefit by amending the Baldwin Park Municipal Code (BPMC) to reduce the minimum number of hotel and motel guest units from the current one hundred (100) guest units to seventy (70) or more guest rooms, and it is in the best interest of the community to amend the BPMC accordingly.

The City Council further finds and determines that:

A. The proposed amendment is consistent with the goals and policies of all elements of the General Plan, and any applicable specific plan , as they implement goals and policies of the General Plan.

B. The proposed amendment would not be detrimental to the public interest, health, safety, convenience or welfare of the City in that the change only affects the minimum number of hotel and motel guest units or rooms.

C. The proposed amendment has been analyzed pursuant to the requirements of the California Environmental Quality Act (“CEQA”), which concluded that any environmental impact created by the proposed code amendment would be less than significant with mitigation incorporated.

SECTION 2. Based on the foregoing findings and determinations, Baldwin Park Municipal Code Title XV (“Land Usage”), Chapter 153 (“Zoning Code”), Subchapter 153.120.310 (B) is hereby amended as follows:

PART 9 – Hotels and Motels
§ 153.120.310 Development Standards
In addition to the development standards set forth in subchapter 153.050, Commercial and Industrial Zones, the following shall apply to hotels and motels:

“(B) Minimum number of guest units. The hotel or motel shall contain a minimum of 100 guest units 70 or more guest rooms.

SECTION 3. California Environmental Quality Act (“CEQA”) . The City Council finds that this Ordinance based on the information in the applications, an Initial Study was prepared for the Project pursuant to State CEQA Guidelines section 15063. The Initial Study concluded that the Project would have potentially significant impacts but that those impacts could be reduced to less than significant levels with implementation of proposed mitigation measures, the City determined that a Mitigated Negative Declaration (“MND”) should be prepared for the Project pursuant to Public Resources Code sections 21064.5 and 21080(c), and the State CEQA Guidelines section 15070 et seq.; and

3 SECTION 4. Effective Date. This ordinance shall take effect thirty (30) days after its adoption by the City Council.

PASSED AND APPROVED ON THE ______DAY OF ____________ 2023

________________________________
EMMANUAL J. ESTRADA, MAYOR

ATTEST:

STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES ) ss:

CITY OF BALDWIN PARK )

I, CHRISTOPHER SAENZ, City Clerk of the City of Baldwin Park, do hereby certify that the foregoing Ordinance was regularly introduced and placed upon its first reading at a regular meeting of the City Council on December 6, 2023. Thereafter, said Ordinance No. 1508 was duly approved and adopted at a regular meeting of the City Council on ______________________, 2023 by the following vote:

AYES: COUNCILMEMBER
NOES: COUNCILMEMBER
ABSENT: COUNCILMEMBER
ABSTAIN: COUNCILMEMBER

________________________________

CHRISTOPHER SAENZ

CITY CLERK

Vicinity Map

LOCATION: 14624 Dalewood St

CASE NUMBER: AZC 22-03, ZV 22-07, CP 22-11, PR 22-46

DATE: December 6, 2023

AREA
MAP
Not to Scale
N

ATTACHMENT #5
Initial Study/Mitigated Negative Declaration (https://www.baldwinpark.com/online- documents/community-development/planning/environmental-documents)

FEASIBILITY STUDY
Pr opos ed Ext ended-St ay H ot el
Ba l dw i n Pa r k
14624 DALEWOOD STREET

BALDWIN PARK, CALIFORNIA

SUBMITTED TO: PR OP OSED
Mr. Jay Patel
Zyra Hospitality LLC
18543 Yorba Linda Boulevard, Suite 328
Yorba Linda, California 92886

+1 (323) 707-7934
PREPARED BY:

HVS Consulting & Valuation
Division of TS Worldwide, LLC
8430 Santa Monica Boulevard, Suite 200
West Hollywood, California 90069

+1 (310) 270-3240

O
ctober
-
2022

November 28, 2022

Mr. Jay Patel
Zyra Hospitality LLC
18543 Yorba Linda Boulevard, Suite 328
Yorba Linda, California 92886

Re: Proposed Extended-Stay Hotel Baldwin Park
Baldwin Park, California
HVS Reference: 2022021479

Dear Mr. Patel:

Pursuant to your request, we herewith submit our feasibility study pertaining to the above-captioned property. We have inspected the real estate and analyzed the hotel market conditions in the Baldwin Park , California, area. We have studied the proposed project, and the results of our fieldwork and analysis are presented in this report. We have also reviewed the proposed improvements for this site. This report is not an appraisal but has been prepared in accordance with the Uniform Standards of Professional Appraisal Practice (USPAP), as provided by the Appraisal Foundation.

We hereby certify that we have no undisclosed interest in the property, and our employment and compensation are not contingent upon our findings. This study is subject to the comments made throughout this report and to all assumptions and limiting conditions set forth herein.

Sincerely,
TS Worldwide, LLC

Luigi Major, MAI, Managing Director
[email protected], +1 (310) 270-3240
State Appraiser License (CA) 3005056

Marcus R. Lee, Director, Consulting & Valuation, Asset Management [email protected], +1 (310) 614-9945
State Appraiser License (CA) 3006899

HVS LOS ANGELES
8430 Santa Monica Boulevard,
Suite 200
West Hollywood, California 90069
+1 (310) 270-3240
+1 (415) 896-0516 FAX
www.hvs.com

Superior results through unrivaled
hospitality intelligence. Everywhere.

Table of Contents

SECTION TITLE PAGE

1. Executive Summary 4

2. Description of the Site and Neighborhood 17

3. Market Area Analysis 25

4. Supply and Demand Analysis 44

5. Description of the Proposed Improvements 69

6. Projection of Occupancy and Average Rate 76

7. Projection of Income and Expense 82

8. Feasibility Analysis 91

9. Statement of Assumptions and Limiting Conditions 106

10. Certification 109

Addenda

Qualifications
Copy of Appraisal License(s)

October-2022 Executive Summary
Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California 4

1. Executive Summary
The subject of the feasibility study is a site measuring 53,569 square feet ( 1.23 acres) that is planned to be redeveloped with an extended-stay lodging facility; the hotel is anticipated to be associated with the Extended Stay America Premier Suites brand. The property, which is expected to open on January 1, 2024, will feature 72 rooms, a coffee station, a lobby workstation, a fitness room, a market pantry, a guest laundry room, an outdoor patio and barbecue area, and vending areas . The hotel will also contain the appropriate parking capacity and all necessary back -of-the- house space.

RENDERING OF PROJECT

The East County of Los Angeles market area currently comprises hotels spanning all price ranges within the limited-service, select-service, and full-service segments. As of the date of this report, there are four extended -stay properties that operate in this market; however, a TownePlace Suites by Marriott is under construction in Monrovia. Our study assumes that the proposed subject hotel will operate as a midscale, limited-service, extended-stay hotel that is affiliated with the Extended Stay America Premier Suites brand. Our descriptions of the p roposed hotel are sourced from the ownership group, Zyra Hospitality LLC. The subject site’s location is 14624 Dalewood Street, Baldwin Park, California 91706.

Subject of the

Feasibility Study

October-2022 Executive Summary
Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California 5

The effective date of the report is November 28, 2022 . The subject site was inspected by Marcus R. Lee on September 22, 2022. Luigi Major, MAI, participated in the analysis and reviewed the findings but did not personally inspect the property.

The hospitality industry has been, and continues to be, affected by a variety of external factors that influence both the lodging and the investment markets. The following paragraphs outline the global factors that are the most impac tful to the lodging industry as of the effective date of this report.

The COVID -19 pandemic began in early 2020 and had a significant impact throughout the world and on the respective economies. The onset of the pandemic resulted in decreased business activity, causing widespread economic hardships, including increases in unemployment. The hospitality industry was severely affected, as travel declined sharply and as restrictions on group sizes resulted in the cancellations of meetings, conventions, and events. The depth and duration of this impact was influenced by the course of the pandemic and the na ture and extent of restrictions on business and travel activity; the period of greatest impact was 2020.

With the availability of vaccines and lifting of restrictions, conditions generally improved in 2021, although the Omicron variant slowed the recovery in the latter part of the year. Currently, the prevailing market outlook is that the peak impact of the pandemic on the travel industry is behind us. While group meetings and events have resumed, business travel remains below pre-pandemic levels given that office occupancy and work-related travel have been affected by more widespread remote work options. Travel patterns have shifted to include more leisure demand, anticipated to comprise a greater proportion of lodging demand in the future. While ADR and RevPAR have passed 2019 levels in most markets, our research reflects a general expectation that lagging occupancy levels will recover by 2024; the timing and pace of recovery for individual markets will vary based on market -specific characteristics and conditions.

Exacerbated by rising oil and gas prices in the wake of the Russia -Ukraine conflict, the inflationary trends that first emerged during the pandemic have continued.

Driven by supply -chain disruptions and pent -up consumer demand during the pandemic, prices for most goods and services increased substantially. The Federal Reserve is combating inflation through successive interest rate hikes (five thus far this year), with some initial success, as the pace of inflation and job growth have decelerated. However, further increases are possible and expected through the first part of 2023. The risk of a recession has emerged as a concern, as well, affecting the stock market, debt availability, and consumer confidence. The ongoing international conflicts have also contributed to economic uncertainty, continued supply disruptions, and increased energy costs . As a result, the near -term outlook is unclear, and investors are taking an increasingly cautious approach, which, when Pertinent Dates

Global Considerations

October-2022 Executive Summary
Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California 6

combined with the recent increases in interest rates, has put downward pressure on real estate values. As of October 2022, inflation le vels are anticipated to remain elevated in the near term, albeit below peak levels. Over the longer term, inflation is expected to moderate back to more normalized levels as the economy moves through the current cycle.

By its nature, the hospitality industry is a major employer and thus heavily reliant on the cost and availability of labor. Following the onset of the pandemic, roughly

33.0% of jobs were lost across the hotel industry between February 2020 and January 2021, according to Tourism Economics. While many of these jobs have returned, the workforce has not kept pace with the increased employme nt opportunities, and many hotels continue to report labor shortages. The industry has responded to this issue through wage increases, additional benefits, flexible schedules, and the implementation of cross -training and job sharing, as well as increased u se of technology. In response to the pandemic, many hotels revised, downsized, or eliminated some services, particularly in the food and beverage (F&B) and housekeeping departments. Given the ongoing labor shortages, operators are retaining some aspects of these solutions, which should somewhat offset rising labor costs. Nevertheless, notable increases in labor costs are anticipated to continue in the near term.

In preparing this report, we have considered the impact of these factors on the lodging and investment markets to the best of our ability, inclusive of the subject of this report. However, our analysis only considers what is known at the time of the effective date of the report, and there is a high degree of uncertainty currently influencing the market and the economy.

The subject site was last sold in February 2022; ZYRA Hospitality LLC has owned the site since that time, having purchased i t from Dalewood Holding LLC for a reported price of $3,800,000. The site is neither listed nor under contract for sale, and we have no knowledge of any recent listings.

Details pertaining to management terms were not yet determined at the time of this report; however, we assume that the pro posed hotel will be managed by a professional hotel-operating company, with fees deducted at rates consistent with current market standards. Our projections reflect a total management fee of 3.0% of total revenues.

The proposed subject hotel will reportedly operate under a franchise agreement with Extended Stay America, Inc., as an Extended Stay America Premier Suites; the agreement is expected to span 20 years. However, as of the date of this study, the franchise agreement had y et to be signed. Based on our understanding of the franchise fees associated with the Extended Stay America brand, t he associated Ownership
of the
Subject Site
Management and
Franchise Assumptions

October-2022 Executive Summary
Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California 7

franchise fees we have reflected in our forecasts are a royalty fee of 5% of rooms revenue, and a marketing assessment of 5% of rooms revenue.

During the illustrated historical period, RevPAR generally followed a strengthening trend through 2017, paced by year-over-year increases in both occupancy and ADR.

This improvement in market conditions was driven la rgely by the strengthening economic conditions, increased popularity in leisure travel to the Los Angeles area, and Baldwin Park's strong healthcare sector. RevPAR declined in 2018 as the market was affected by the entrance of new supply, with the Home2 Suites by Hilton opening mid-year 2017. RevPAR levels recovered in 2019 as ADR increased and occupancy remained stable. In March 2020, the COVID-19 pandemic began to affect the local market, similar to the rest of the nation, resulting in stay -at-home orders, group cancelations, and decreased business travel; thus, occupancy declined significantly in 2020. As much of the demand remaining was lower rated in nature, ADR declined in 2020, as well. General improvement has been registered since the low point that year. By year -end 2021, occupancy and ADR had recovered a substantial portion of their 2020 losses, gaining traction in the latter half of the year after the wide distribution of vaccines. Year -to-date 2022 data illustrate a slight softening in occupancy as travel patterns begin to normalize; however, despite the decrease in demand, rates have continued to improve, registering an approximately $15 increase over the same period in 2021.

The following table provides a historical perspective on the supply and demand trends for a selected set of hotels, as provided by STR.

Summary of Hotel
Market Trends

October-2022 Executive Summary
Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California 8

FIGURE 1-1 HISTORICAL SUPPLY AND DEMAND TRENDS
Year
Average Daily
Room Count
Available
Room Nights
Change
Occupied
Room Nights
Change
Occupancy
Average
Rate
Change
RevPAR
Change
2009 989 360,858 — 205,218 — 56.9 % $79.48 — $45.20 —
2010 1,026 374,608 3.8 % 221,203 7.8 % 59.0 79.44 (0.1) % 46.91 3.8 % 2011 1,108 404,406 8.0 255,595 15.5 63.2 81.86 3.0 51.73 10.3 2012 1,135 414,153 2.4 288,075 12.7 69.6 86.04 5.1 59.85 15.7 2013 1,112 405,919 (2.0) 282,772 (1.8) 69.7 92.20 7.2 64.23 7.3 2014 1,048 382,565 (5.8) 292,318 3.4 76.4 102.17 10.8 78.07 21.5 2015 1,138 415,370 8.6 326,132 11.6 78.5 105.66 3.4 82.96 6.3 2016 1,137 415,127 (0.1) 334,145 2.5 80.5 112.73 6.7 90.74 9.4 2017 1,193 435,610 4.9 340,877 2.0 78.3 116.15 3.0 90.89 0.2 2018 1,248 455,520 4.6 347,322 1.9 76.2 114.67 (1.3) 87.43 (3.8) 2019 1,248 455,520 0.0 347,032 (0.1) 76.2 115.57 0.8 88.05 0.7 2020 1,163 424,405 (6.8) 248,871 (28.3) 58.6 101.01 (12.6) 59.23 (32.7) 2021 1,217 444,090 4.6 298,368 19.9 67.2 112.93 11.8 75.87 28.1 Year-to-Date Through August
2019 1,248 303,264 — 236,944 — 78.1 % $116.26 — $90.83 — 2020 1,184 287,643 (5.2) % 164,298 (30.7) % 57.1 102.85 (11.5) % 58.74 (35.3) % 2021 1,201 291,834 1.5 199,504 21.4 68.4 109.25 6.2 74.68 27.1 2022 1,248 303,264 3.9 199,834 0.2 65.9 125.99 15.3 83.02 11.2 Average Annual Compounded Change:
2009 – 2019 2.4 % 5.4 % 3.8 % 6.9 %
2009 – 2020 1.5 1.8 2.2 2.5
Competitive
Hotels Included in Sample Class Status Comments
Residence Inn Pasadena Arcadia Upscale Class Primary 120 Jan 1989 Jan 1989 Extended Stay America Los Angeles - Arcadia Economy Class Primary 122 Apr 1998 Apr 1998 Quality Inn Near City Of Hope Midscale Class Secondary 39 Mar 2009 Jan 1994 Extended Stay America Los Angeles - Monrovia Economy Class Primary 123 Apr 2012 May 1998 Home2 Suites by Hilton Azusa Upper Midscale Class Primary 110 Jul 2017 Jul 2017 Courtyard Los Angeles Baldwin Park Upscale Class Secondary 196 Sep 2004 Jun 1989 Comfort Suites Near City Of Industry Los Angeles Upper Midscale Class Secondary 41 Dec 2009 Dec 2009 Holiday Inn West Covina Upper Midscale Class Secondary 135 Sep 2014 Jan 1966 Best Western Plus West Covina Inn Upper Midscale Class Secondary 125 Apr 2011 Jul 1987 Hampton by Hilton Inn Los Angeles/West Covina Upper Midscale Class Secondary 127 Apr 2021 May 1988 S/O: May '20; R/O: April '21 Fairfield Inn & Suites Los Angeles West Covina Upper Midscale Class Secondary 110 Apr 2011 Apr 2011 Total 1,248 S/O: Suspended Operations; R/O: Resumed Operations Year
Opened
Year
Affiliated
Source: STR
Number
of Rooms

The following tables reflect our estimates of operating data for hotels on an individual basis. These trends are presented in detail in the Supply and Demand Analysis chapter of this report.

October-2022 Executive Summary
Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California 9

FIGURE 1-2 PRIMARY COMPETITORS – OPERATING PERFORMANCE
Est. Segmentation Estimated 2019 Estimated 2021
Commercial/ Extended-
Stay
Leisure
Group
Weighted
Annual
Weighted
Annual
Property Occ. RevPAR RevPAR
Occupancy
Penetration
Yield
Penetration
Home2 Suites by Hilton Azusa 110 70 % 15 % 15 % 110 80 - 85 % $125 - $130 $105 - $110 110 85 - 90 % $125 - $130 $110 - $115 120 - 130% 140 - 150% Extended Stay America Los
Angeles Monrovia 123 80 15 5 123 75 - 80 85 - 90 65 - 70 123 75 - 80 90 - 95 70 - 75 110 - 120 90 - 95 Residence Inn by Marriott
Pasadena Arcadia 120 70 15 15 120 80 - 85 180 - 190 150 - 160 120 65 - 70 170 - 180 115 - 120 100 - 110 150 - 160 Extended StayAmerica Los
Angeles Arcadia 122 80 15 5 122 75 - 80 80 - 85 60 - 65 122 75 - 80 90 - 95 70 - 75 110 - 120 90 - 95 Sub-Totals/Averages 475 75 % 15 % 10 % 475 80.4 % $120.58 $96.92 475 78.8 % $117.26 $92 115 % 119.4 % Secondary Competitors 773 66 % 19 % 15 % 618 73.6 % $112.26 $82.64 618 60.2 % $109.46 $66 88 % 85.1 % Totals/Averages 1,248 70 % 17 % 13 % 1,093 76.5 % $116.06 $88.84 1,093 68.3 % $113.37 $77 100 % 100.0 % * Specific occupancy and average rate data were utilized in our analysis, but are presented in ranges in the above table for the purposes of confidentiality.

Average Rate
Commercial/ Extended-
Leisure
Group
Annual
Room
Count
Number
of Rooms
Average Rate
Occ.

Annual
Room
Count

October-2022 Executive Summary
Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California 10

FIGURE 1-3 SECONDARY COMPETITORS – OPERATING PERFORMANCE Est. Segmentation

Estimated 2019 Estimated 2021

Property
Number of
Rooms

Occ.

Average
Rate
RevPAR Occ.

Average
Rate
RevPAR
Courtyard by Marriott Los
Angeles Baldwin Park 196 70 % 15 % 15 % 80 % 157 65 - 70 % $120 - $125 $75 - $80 157 55 - 60 % $115 - $120 $70 - $75 Comfort Suites La Puente 41 65 30 5 80 33 60 - 65 110 - 115 65 - 70 33 55 - 60 105 - 110 60 - 65 Quality Inn Near City of
Hope Monrovia 39 65 30 5 80 31 60 - 65 90 - 95 55 - 60 31 55 - 60 85 - 90 50 - 55 Best Western Plus West
Covina Inn 125 60 30 10 80 100 55 - 60 105 - 110 60 - 65 100 55 - 60 100 - 105 55 - 60 Fairfield by Marriott Los
Angeles West Covina 110 70 15 15 80 88 80 - 85 115 - 120 95 - 100 88 65 - 70 110 - 115 75 - 80 Hampton by Hilton Los
Angeles West Covina 127 70 15 15 80 102 70 - 75 115 - 120 85 - 90 102 30 - 35 125 - 130 40 - 45 Holiday Inn West Covina 135 60 20 20 80 108 95 - 100 105 - 110 100 - 105 108 75 - 80 105 - 110 80 - 85 Totals/Averages 773 66 % 19 % 15 % 80 % 618 73.6 % $112.26 $82.64 618 60.2 % $109.46 $65.85 * Specific occupancy and average rate data was utilized in our analysis, but is presented in ranges in the above table for the purposes of confidentiality.

Total
Competitive
Level
Weighted
Annual
Room
Count
Weighted
Annual
Room
Count
Group
Commercial/
Extended-Stay
Leisure

October-2022 Executive Summary
Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California 11

Based on our analysis presented in the Projection of Occupancy and Average Rate chapter, we have chosen to use a stabilized occupancy level of 80% and a base-year rate position of $110.00 for the proposed subject hotel. The following table reflects a summary of our proposed subject hotel occupancy and average rate projections.

FIGURE 1-4 FORECAST OF OCCUPANCY AND AVERAGE RATE
Year
2024 67 % $129.54 3.0 % $125.65
2025 77 133.42 1.0 132.09
2026 80 137.42 0.0 137.42
Occupancy
Average Rate
Before Discount
Discount
Average Rate
After Discount

Our positioning of each revenue and expense level is supported by comparable operations or trends specific to this market. Our forecast of income and expense is presented in the following table.

Summary of Forecast
Occupancy and
Average Rate
Summary of Forecast
Income and Expense
Statement

October-2022 Executive Summary
Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California 12

FIGURE 1-5 DETAILED FORECAST OF INCOME AND EXPENSE

2024 (Calendar Year) 2025 Stabilized 2027 2028
Number of Rooms: 72 72 72 72 72
Occupancy: 67% 77% 80% 80% 80%
Average Rate: $125.65 $132.09 $137.42 $141.55 $145.79
RevPAR: $84.19 $101.71 $109.94 $113.24 $116.64
Days Open: 365 365 365 365 365
Occupied Rooms: 17,608 %Gross PAR POR 20,236 %Gross PAR POR 21,024 %Gross PAR POR 21,024 %Gross PAR POR 21,024 %Gross PAR POR

OPERATING REVENUE
Rooms $2,212 98.3 % $30,722 $125.63 $2,673 98.4 % $37,125 $132.09 $2,889 98.5 % $40,125 $137.41 $2,976 98.5 % $41,333 $141.55 $3,065 98.5 % $42,569 $145.79 Other Operated Departments 25 1.1 344 1.41 26 1.0 368 1.31 28 0.9 383 1.31 28 0.9 395 1.35 29 0.9 407 1.39 Miscellaneous Income 15 0.6 203 0.83 16 0.6 217 0.77 16 0.6 226 0.78 17 0.6 233 0.80 17 0.6 240 0.82 Total Operating Revenues 2,251 100.0 31,269 127.86 2,715 100.0 37,710 134.18 2,933 100.0 40,735 139.50 3,021 100.0 41,961 143.70 3,112 100.0 43,216 148.00 DEPARTMENTAL EXPENSES *
Rooms 560 25.3 7,780 31.82 608 22.7 8,442 30.04 636 22.0 8,828 30.23 655 22.0 9,093 31.14 674 22.0 9,366 32.07 Other Operated Departments 14 57.0 196 0.80 15 55.4 204 0.73 15 55.0 211 0.72 16 55.0 217 0.74 16 55.0 224 0.77 Total Expenses 574 25.5 7,976 32.62 623 22.9 8,646 30.76 651 22.2 9,039 30.96 670 22.2 9,310 31.88 690 22.2 9,589 32.84 DEPARTMENTAL INCOME 1,677 74.5 23,293 95.25 2,093 77.1 29,064 103.41 2,282 77.8 31,696 108.55 2,351 77.8 32,651 111.82 2,421 77.8 33,627 115.16

UNDISTRIBUTED OPERATING EXPENSES
Administrative & General 185 8.2 2,574 10.52 198 7.3 2,748 9.78 206 7.0 2,863 9.81 212 7.0 2,949 10.10 219 7.0 3,038 10.40 Info & Telecom Systems 23 1.0 322 1.32 25 0.9 343 1.22 26 0.9 358 1.23 27 0.9 369 1.26 27 0.9 380 1.30 Marketing 69 3.1 965 3.95 74 2.7 1,030 3.67 77 2.6 1,074 3.68 80 2.6 1,106 3.79 82 2.6 1,139 3.90 Franchise Fee 221 9.8 3,072 12.56 267 9.8 3,713 13.21 289 9.9 4,013 13.74 298 9.9 4,133 14.16 307 9.9 4,257 14.58 Prop. Operations & Maint. 74 3.3 1,029 4.21 94 3.5 1,305 4.64 103 3.5 1,432 4.90 106 3.5 1,475 5.05 109 3.5 1,519 5.20 Utilities 100 4.5 1,394 5.70 107 3.9 1,488 5.30 112 3.8 1,551 5.31 115 3.8 1,597 5.47 118 3.8 1,645 5.63 Total Expenses 674 29.9 9,356 38.26 765 28.1 10,627 37.81 813 27.7 11,290 38.66 837 27.7 11,629 39.83 862 27.7 11,978 41.02 GROSS OPERATING PROFIT 1,003 44.6 13,936 56.99 1,327 49.0 18,437 65.60 1,469 50.1 20,406 69.88 1,514 50.1 21,022 71.99 1,559 50.1 21,649 74.14 Management Fee 68 3.0 938 3.84 81 3.0 1,131 4.03 88 3.0 1,222 4.19 91 3.0 1,259 4.31 93 3.0 1,296 4.44 INCOME BEFORE NON-OPR. INC. & EXP. 936 41.6 12,998 53.15 1,246 46.0 17,305 61.57 1,381 47.1 19,184 65.70 1,423 47.1 19,763 67.68 1,465 47.1 20,353 69.70

NON-OPERATING INCOME & EXPENSE
Property Taxes 140 6.2 1,948 7.97 143 5.3 1,987 7.07 146 5.0 2,027 6.94 149 4.9 2,067 7.08 152 4.9 2,109 7.22 Insurance 40 1.8 562 2.30 42 1.5 579 2.06 43 1.5 597 2.04 44 1.5 614 2.10 46 1.5 633 2.17 Total Expenses 181 8.0 2,510 10.26 185 6.8 2,566 9.13 189 6.5 2,623 8.98 193 6.4 2,682 9.18 197 6.4 2,741 9.39 EBITDA 755 33.6 10,488 42.89 1,061 39.2 14,739 52.44 1,192 40.6 16,561 56.71 1,230 40.7 17,081 58.50 1,268 40.7 17,611 60.31 Reserve for Replacement 45 2.0 625 2.56 81 3.0 1,131 4.03 117 4.0 1,629 5.58 121 4.0 1,678 5.75 124 4.0 1,729 5.92 EBITDA LESS RESERVE $710 31.6 % $9,863 $40.33 $980 36.2 % $13,608 $48.42 $1,075 36.6 % $14,931 $51.13 $1,109 36.7 % $15,403 $52.75 $1,144 36.7 % $15,883 $54.39 *Departmental expenses a re expressed as a percenta ge of depa rtmenta l revenues.

October-2022 Executive Summary
Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California 13

FIGURE 1-6 TEN-YEAR FORECAST OF INCOME AND EXPENSE
2024 2025 2026 2027 2028 2029 2030 2031 2032 2033
Number of Rooms: 72 72 72 72 72 72 72 72 72 72
Occupied Rooms: 17,608 20,236 21,024 21,024 21,024 21,024 21,024 21,024 21,024 21,024 Occupancy: 67% 77% 80% 80% 80% 80% 80% 80% 80% 80%
Average Rate: $125.65 % of $132.09 % of $137.42 % of $141.55 % of $145.79 % of $150.17 % of $154.67 % of $159.31 % of $164.09 % of $169.01 RevPAR: $84.19 Gross $101.71 Gross $109.94 Gross $113.24 Gross $116.64 Gross $120.13 Gross $123.74 Gross $127.45 Gross $131.27 Gross $135.21

OPERATING REVENUE
Rooms $2,212 98.3
%
$2,673 98.4 % $2,889 98.5
%
$2,976 98.5
%
$3,065 98.5
%
$3,157 98.5 % $3,252 98.5
%
$3,349 98.5
%
$3,450 98.5 % $3,553 98.5
%
Other Operated Departments 25 1.1 26 1.0 28 0.9 28 0.9 29 0.9 30 0.9 31 0.9 32 0.9 33 0.9 34 0.9 Miscellaneous Income 15 0.6 16 0.6 16 0.6 17 0.6 17 0.6 18 0.6 18 0.6 19 0.6 19 0.6 20 0.6 Tota l Opera ting Revenues 2,251 100.0 2,715 100.0 2,933 100.0 3,021 100.0 3,112 100.0 3,205 100.0 3,301 100.0 3,400 100.0 3,502 100.0 3,607 100.0 DEPARTMENTAL EXPENSES *
Rooms 560 25.3 608 22.7 636 22.0 655 22.0 674 22.0 695 22.0 715 22.0 737 22.0 759 22.0 782 22.0 Other Operated Departments 14 57.0 15 55.4 15 55.0 16 55.0 16 55.0 17 55.0 17 55.0 18 55.0 18 55.0 19 55.0 Total Expens es 574 25.5 623 22.9 651 22.2 670 22.2 690 22.2 711 22.2 732 22.2 754 22.2 777 22.2 800 22.2 DEPARTMENTAL INCOME 1,677 74.5 2,093 77.1 2,282 77.8 2,351 77.8 2,421 77.8 2,494 77.8 2,569 77.8 2,645 77.8 2,725 77.8 2,807 77.8

UNDISTRIBUTED OPERATING EXPENSES
Administrative & General 185 8.2 198 7.3 206 7.0 212 7.0 219 7.0 225 7.0 232 7.0 239 7.0 246 7.0 254 7.0 Info & Telecom Systems 23 1.0 25 0.9 26 0.9 27 0.9 27 0.9 28 0.9 29 0.9 30 0.9 31 0.9 32 0.9 Marketing 69 3.1 74 2.7 77 2.6 80 2.6 82 2.6 84 2.6 87 2.6 90 2.6 92 2.6 95 2.6 Franchise Fee 221 9.8 267 9.8 289 9.9 298 9.9 307 9.9 316 9.9 325 9.9 335 9.9 345 9.9 355 9.9 Prop. Operations & Maint. 74 3.3 94 3.5 103 3.5 106 3.5 109 3.5 113 3.5 116 3.5 119 3.5 123 3.5 127 3.5 Utilities 100 4.5 107 3.9 112 3.8 115 3.8 118 3.8 122 3.8 126 3.8 129 3.8 133 3.8 137 3.8 Total Expens es 674 29.9 765 28.1 813 27.7 837 27.7 862 27.7 888 27.7 915 27.7 942 27.7 971 27.7 1,000 27.7 GROSS OPERATING PROFIT 1,003 44.6 1,327 49.0 1,469 50.1 1,514 50.1 1,559 50.1 1,606 50.1 1,654 50.1 1,703 50.1 1,755 50.1 1,807 50.1 Management Fee 68 3.0 81 3.0 88 3.0 91 3.0 93 3.0 96 3.0 99 3.0 102 3.0 105 3.0 108 3.0 INCOME BEFORE NON-OPR. INC. & EXP. 936 41.6 1,246 46.0 1,381 47.1 1,423 47.1 1,465 47.1 1,509 47.1 1,555 47.1 1,601 47.1 1,650 47.1 1,699 47.1

NON-OPERATING INCOME & EXPENSE
Property Taxes 140 6.2 143 5.3 146 5.0 149 4.9 152 4.9 155 4.8 158 4.8 161 4.7 164 4.7 168 4.6 Insurance 40 1.8 42 1.5 43 1.5 44 1.5 46 1.5 47 1.5 48 1.5 50 1.5 51 1.5 53 1.5 Total Expens es 181 8.0 185 6.8 189 6.5 193 6.4 197 6.4 202 6.3 206 6.3 211 6.2 216 6.2 220 6.1 EBITDA 755 33.6 1,061 39.2 1,192 40.6 1,230 40.7 1,268 40.7 1,308 40.8 1,349 40.8 1,390 40.9 1,434 40.9 1,478 41.0 Reserve for Replacement 45 2.0 81 3.0 117 4.0 121 4.0 124 4.0 128 4.0 132 4.0 136 4.0 140 4.0 144 4.0 EBITDA LESS RESERVE $710 31.6
%
$980 36.2 % $1,075 36.6
%
$1,109 36.7
%
$1,144 36.7
%
$1,179 36.8 % $1,217 36.8
%
$1,254 36.9
%
$1,294 36.9 % $1,334 37.0
%
0 0
0 0
0 0
0 0
0 0
% of
Gross

October-2022 Executive Summary
Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California 14

As illustrated, the hotel is expected to stabilize at a profitable level. Please refer to the Forecast of Income and Expense chapter of our report for a detailed explanation of the methodology used in deriving this forecast.

The proposed subject hotel has an opportunity to serve an underserved niche in the market. Based on our market analysis, there is sufficient market support for the proposed Extended Stay America Premier Suites (or a similar extended -stay product). Based on the current market -appropriate discount rate and terminal capitalization rate for the proposed 72-room subject hotel, the present value of the cash flows at opening for the proposed subject hotel is $12,400,000. In order for the redevelopment of the exist ing structure into the proposed subject hotel to remain feasible, the all -in redevelopment costs for the proposed subject hotel should remain below this amount. Our estimate of redevelopment costs remains below the present value of cash flows upon the project’s conclusion, thus rendering the project feasible.

Per USPAP, an “Extraordinary Assumption” is defined as follows:

An assignment -specific assumption as of the effective date regarding uncertain information used in an analysis which, if found to be false, could alter the appraiser’s opinions or conclusions. Comment: Uncertain information might include physical, legal, or economic characteristics of the subject property; or conditions external to the property, such as market conditions or trends; or the integrity of data used in an analysis.1 The analysis is based on the extraordinary assumption that the described improvements have been completed as of the stated date of opening. The reader should understand that the completed subject property does not yet exist as of the date of this report. Our feasibility study does not address unforeseeable events that could alter the proposed project, and/or the market conditions reflected in the analyses; we assume that no significant changes, other than those anticipated and explained in this report, shall take place between the date of inspection and stated date of opening. The use of this extraordinary assumption may have affected the assignment results. We have made no other extraordinary assumptions specific to this feasibility study. However, several important ge neral assumptions have been made that apply to this feasibility study and our studies of proposed hotels in general. These aspects are set forth in the Assumptions and Limiting Conditions chapter of this report.

1 The Appraisal Foundation, Uniform Standards of Professional Appraisal Practice, 2020–2021 ed.

Feas
ibility Conclusion

Assignment Conditions

October-2022 Executive Summary
Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California 15

This feasibility report is being prepared for use in the development of the proposed subject hotel.

The client for this engagement is Zyra Hospitality LLC and its assignees. This report is intended for the addressee firm and its assignees and may not be distributed to or relied upon by other persons or entities.

The methodology used to develop this study is based on the market research and valuation techniques set forth in the textbooks authored by Hospitality Valuation Services for the American Institute of Real Estate Appraisers and the Appraisal Institute, entitled The Valuation of Hotels and Motels,2 Hotels, Motels and Restaurants:

Valuations and Market Studies,3 The Computerized Income Approach to Hotel/Motel Market Studies and Valuations, 4 Hotels and Motels: A Guide to Market Analysis, Investment Analysis, and Valuations,5 and Hotels and Motels – Valuations and Market Studies.6

1. All information was c ollected and analyzed by the staff of TS Worldwide, LLC. Information was supplied by the client and/or the property’s development team.

2. The subject site has been evaluated from the viewpoint of its physical utility for the future operation of a hotel, as well as access, visibility, and other relevant factors.

3. The subject property's propose d improvements have been reviewed for their expected quality of construction, design, and layout efficiency.

4. The surrounding economic environment, on both an area and neighborhood level, has been reviewed to identify specific hostelry -related economic and demographic trends that may have an impact on future demand for hotels.

5. Dividing the market for hotel accommodations into individual segments defines specific market characteristics for the types of travelers expected to utilize the area's hotels. The factors investigated include purpose of visit,

2 Stephen Rushmore, The Valuation of Hotels and Motels . (Chicago: American Institute of Real Estate Appraisers, 1978).
3 Stephen Rushmore, Hotels, Motels and Restaurants: Valuations and Market Studies . (Chicago: American Institute of Real Estate Appraisers, 1983). 4 Stephen Rushmore, The Computerized Income Approach to Hotel/Motel Market Studies and Valuations. (Chicago: American Institute of Real Estate Appraisers, 1990). 5 Stephen Rushmore, Hotels and Motels: A Guide to Market Analysis, Investment Analysis, and Valuations (Chicago: Appraisal Institute, 1992).
6 Stephen Rushmore and Erich Baum, Hotels and Motels – Valuations and Market Studies. (Chicago: Appraisal Institute, 2001).

Intended Use of the
Feasibility Study
Identification of the
Client and Intended
User(s)
Scope of Work

October-2022 Executive Summary
Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California 16

average length of stay, facilities and amenities required, seasonality, daily demand fluctuations, and price sensitivity.

6. An analysis of existing and proposed competition provides an indicat ion of the current accommodated demand, along with market penetration and the degree of competitiveness. Unless noted otherwise, we have inspected the competitive lodging facilities summarized in this report.

7. Documentation for an occupancy and ADR projection is derived utilizing the build-up approach based on an analysis of lodging activity.

8. A detailed projection of income and expense made in accordance with th e Uniform System of Accounts for the Lodging Industry (USALI) sets forth the anticipated economic benefits of the proposed subject property.

9. A feasibility analysis is performed, in which the total property yield that the project would generate is compared to the total property yields indicated by market surveys.

October-2022 Description of the Site and Neighborhood
Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California 17

2. Description of the Site and Neighborhood
The suitability of the land for the operation of a lodging facility is an important consideration affecting the economic viability of a property and its ultimate marketability. Factors such as size, topography, access, visibility, and the availability of utilities have a direct impact on the desirability of a particular site.

The subject site is located in Baldwin Park, a city within Los Angeles County, southwest of the intersection formed by West Garvey Avenue South and West Merced Avenue. We note that the site is currently improved with a four -story, disused, former motel building which will be redeveloped into the proposed subject hotel. This site is in the city of Baldwin Park, California.

The subject site measures approximately 1.23 acres, or 53,569 square feet . The parcel's adjacent uses are set forth in the following table.

FIGURE 2-1 SUBJECT PARCEL'S ADJACENT USES
Direction
North Dalewood Street
South
Residential
East
Prestige Mercedes-Benz Imports
West
Vacant Land
Adjacent Use

The topography of the site is generally flat and its shape should permit efficient use of the site fo r the building and other improvements, as well as ingress and egress.

Upon completion of construction, the subject site will not contain any significant portion of undeveloped land that could be sold, entitled, and developed for alternate use. It is expect ed that the site will be developed fully with building and site improvements, thus contributing to the overall profitability of the hotel.

Physical Characteristics

Topography and

Site Utility

October-2022 Description of the Site and Neighborhood
Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California 18

VIEW OF SITE (EXISTING BUILDING TO BE REDEVELOPED)

SITE PLAN

October-2022 Description of the Site and Neighborhood
Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California 19

AERIAL PHOTOGRAPH

VIEW FROM SITE TO THE NORTH

VIEW FROM SITE TO THE SOUTH

October-2022 Description of the Site and Neighborhood
Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California 20

VIEW FROM SITE TO THE EAST

VIEW FROM SITE TO THE WEST

It is important to analyze the site w ith respect to regional and local transportation routes and demand generators, including ease of access. The subject site is readily accessible to a variety of local and county roads, as well as state and interstate highways.

Access and Visibility

October-2022 Description of the Site and Neighborhood
Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California 21

MAP OF REGIONAL ACCESS ROUTES

Vehicular access to the subject site is provided by Dalewood Street. The subject site is located near a busy intersection and is relatively simple to locate from Interstate 10, which is the closest major thoroughfare. The proposed subject hotel is anticipated to have adequate signage at the street, as well as on its façade. Overall, the subject site benefits fr om very good accessibility, and the proposed hotel is expected to enjoy very good visibility from within its local neighborhood.

The proposed subject hotel will be served by the multiple airports in the Los Angeles Basin. The primary airport, however, will likely be the Los Angeles International Airport, located approximately 25 miles to the southwest of the subject site.

The neighborhood surrounding a lodging facility often has an impact on a hotel's status, image, class, style of operation, and sometimes its ability to attract and properly serve a particular market segment. This section of the report investigates the subject n eighborhood and evaluates any pertinent location factors that could affect its future occupancy, average rate, and overall profitability.

Airport Access

Neighborhood

October-2022 Description of the Site and Neighborhood
Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California 22

The neighborhood that surrounds the subject site is generally defined by Baldwin Park Boulevard to the north and west, West Pacific Avenue to the east, and North Hacienda Boulevard to the south. The neighborhood is characterized by restaurants, office buildings, and retail shopping centers along the primary thoroughfares, with residential areas located along the secondary roadways. Some specific businesses and entities in the area include Plaza West Covina, Kaiser Permanente Baldwin Park Medical Center, and Kindred Hospital Baldwin Park; nearby hotels include the Courtyard by Marriott and Covina Motel. Restaurants located near the subject site include La Cocinita, Orchid Thai, and Pepe's Finest Mexican Food. In general, this neighborhood is in the stable stage of its life cycle. The proposed subject hotel's opening should be a positive influence on the area, and the property is expected to be in character with and to complement surrounding land uses.

MAP OF NEIGHBORHOOD

The subject site will reportedly be served by all necessary utilities.

Utilities

October-2022 Description of the Site and Neighborhood
Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California 23

The property is not located within an identified earthquake fault zone, liquefaction zone, or landslide zone; however, the state of California is considered to be seismically active. This condition is consistent with the surrounding real estate and does not affect the subject site's utility or marketability. Geological and soil reports were not provided to us or made available for our review during the preparation of this report. We are not qualified to evaluate soil conditions other than by a visual inspection of the surface; no extraordinary conditions were apparent.

We were not informed of any site-specific nuisances or hazards, and there were no visible signs of toxic ground contaminants at the time of our inspection. Because we are not experts in this field, we do not warrant the absence of hazardous waste and urge the reader to obtain an independent analysis of these factors.

According to the Federal Emergency Management Agency, the subject site is located in flood zone Zone X . The flood zone definition for the Zone X designation is as follows: the flood insurance rate zone that corresponds to areas outside the 100 - year floodplains, areas of 100 -year sheet flow flooding where average depths are less than 1 foot, areas of 100-year stream flooding where the contributing drainage area is less than 1 square mile, or areas protected from the 100-year flood by levees.

No Base Flood Elevations or depths are shown within this zone.

According to the local planning office, the subject property is zoned as follows: GC - General Commercial . Additional details pertaining to the proposed subject property’s zoning regulations are summarized in the following table.

FIGURE 2-2 ZONING
Municipality Governing Zoning City of Baldwin Park
Current Zoning General Commercial (GC/C-2)
Current Use Former (disused) hotel
Is Current Use Permitted? Yes
Is Change in Zoning Likely? No
Permitted Uses Retail Stores, Bank or Financial Institutions, Drug Stores and Pharmacies, Food and Beverage Outlets, and
Medical Offices
Hotel Allowed Yes, with a Conditional Use Permit
Legally Non-Conforming Not Applicable

We assume that all necessary permits and approvals will be secured (including the appropriate liquor license as applicable) and that the subject property will be constructed in accordance with local zoning ordinances, building codes, and all Seismicity,
Soil and

Subsoil Conditions
Nuisances

and Hazards
Flood Zone

Zoning

October-2022 Description of the Site and Neighborhood
Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California 24

other applicable regulations. Our zoning analysis should be verified before any physical changes are made to the site.

A copy of the subject property's legal description is provided in the addenda to this report. We are not exp erts in interpreting legal descriptions. The description appears to be accurate; however, we suggest obtaining verification of this description from a qualified expert. We are not aware of any easements attached to the property that would significantly affect the utility of the site or marketability of this project.

We have analyzed the issues of size, topography, access, visibility, and the availability of utilities. The subject site is favorably located near Interstate 10 and a major interchange. In general, the site should be well suited for future hotel use, with acceptable access, visibility, and topography for an effective operation.

Legal Description,
Easements and
Encroachments
Legal Description,
Conclusion

October-2022 Market Area Analysis
Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California 25

3. Market Area Analysis
The economic vitality of the market area and neighborhood surrounding the subject site is an important consideration in forecasting lodging demand and future income potential. Economic and demographic trends that reflect the amount of visitation provide a basis from which to project lodging demand. The purpose of the market area analysis is to review available economic and demographic data to determine whether the local market will undergo economic growth, stabilize, or decline. In addition to predicting the direction of the economy, the rate of change must be quantified. These trends are then correlated based on their propensity to reflect variations in lodging dem and, with the objective of forecasting the amount of growth or decline in visitation by individual market segment (e.g., commercial, meeting and group, and leisure).

The market area for a lodging facility is the geographical region where the sources of demand and the competitive supply are located. The subject site is located in the city of Baldwin Park, the county of Los Angeles, and the state of California. Baldwin Park is a city located in the central San Gabriel Valley region of Los Angeles County.

Los Angeles, also known as L.A., is the largest city in California and the second - largest city in the United States. The Los Angeles area is the cultural, financial, and commercial center of Southern California and one of the world's major centers of business, entertainment, international trade, culture, media, fashion, science, technology, and education. L.A. is also c onsidered a world city, a status afforded to major cities that are a primary node in the global economic network and have a direct and tangible effect on global socio-economic affairs. The greater Los Angeles area is home to multiple Fortune 500 companies including the Walt Disney Company, AECOM, Live Nation Entertainment, and Farmers Insurance. According to the Los Angeles Area Economic Development Corporation, Los Angeles County is one of the most dynamic economies in the world, with a fast-growing and immense high-tech industry, a world -leading creative economy, tremendous strength in aerospace and advanced transportation, the nation’s largest manufacturing base, and the nation’s largest international trade industry, with over $200 billion in imports and exports annually. L.A. is known as the "Entertainment Capital of the World" because it is home to Hollywood, many famous actors and actresses, and several famous entertainment awards shows including the Oscars and Grammys.

The subject property’s market area can be defined by its Combined Statistical Area (CSA): Los Angeles-Long Beach, CA. The CSA represents adjacent metropolitan and micropolitan statistical areas that have a moderate degree of employment interchange. Micropolitan statistical areas represent urban areas in the United Market Area Definition

October-2022 Market Area Analysis
Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California 26

States based around a core city or town with a population of 10,000 to 49,999; the MSA requires the presence of a core city of at least 50,000 people and a total population of at least 100,000 (75,000 in New England). The following exhibit illustrates the market area.

MAP OF MARKET AREA

A primary source of economic and demographic statistics used in this analysis is the Complete Economic and Demographic Data Source published by Woods & Poole Economics, Inc. — a well-regarded forecasting service based in Washington, D .C.

Using a database containing more than 900 variables for each county in the nation, Woods & Poole employs a sophisticated regional model to forecast economic and demographic trends. Historical statistics are based on census data and information published by the Bureau of Economic Analysis. Projections are formulated by Woods & Poole, and all dollar amounts have been adjusted for inflation, thus reflecting real change.

These data are summarized in the following table.

Economic and
Demographic Review

October-2022 Market Area Analysis
Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California 27

FIGURE 3-1 ECONOMIC AND DEMOGRAPHIC DATA SUMMARY
Average Annual
Compounded Change
2010 2019 2021 2026 2010-19 2019-21 2021-26
Resident Population (Thousands)
Los Angeles County 9,823.2 10,039.1 10,095.9 10,280.5 0.2 % 0.3 % 0.4 % Los Angeles-Long Beach-Anaheim, CA MSA 12,838.4 13,214.8 13,307.3 13,596.1 0.3 0.3 0.4 Los Angeles-Long Beach, CA CSA 17,905.9 18,711.4 18,931.5 19,574.4 0.5 0.6 0.7 State of California 37,319.5 39,512.2 40,021.5 41,481.2 0.6 0.6 0.7 United States 309,321.6 328,241.4 332,219.5 343,776.8 0.7 0.6 0.7 Per-Capita Personal Income*
Los Angeles County $45,550 $59,256 $61,561 $67,001 3.0 1.9 1.7 Los Angeles-Long Beach-Anaheim, CA MSA 47,072 60,704 62,962 68,452 2.9 1.8 1.7 Los Angeles-Long Beach, CA CSA 43,426 55,093 57,019 61,657 2.7 1.7 1.6 State of California 45,594 60,645 62,758 67,743 3.2 1.7 1.5 United States 42,366 51,424 53,262 57,739 2.2 1.8 1.6
W&P Wealth Index
Los Angeles County 107.3 113.5 113.7 114.1 0.6 0.1 0.1
Los Angeles-Long Beach-Anaheim, CA MSA 111.1 117.0 117.1 117.4 0.6 0.1 0.1 Los Angeles-Long Beach, CA CSA 103.2 107.1 107.0 106.8 0.4 (0.0) (0.0) State of California 108.0 117.1 117.0 116.5 0.9 (0.0) (0.1) United States 100.0 100.0 100.0 100.0 (0.0) 0.0 0.0
Food and Beverage Sales (Millions)*
Los Angeles County $17,265 $26,846 $28,051 $31,159 5.0 2.2 2.1 Los Angeles-Long Beach-Anaheim, CA MSA 23,561 36,176 37,864 42,323 4.9 2.3 2.3 Los Angeles-Long Beach, CA CSA 30,013 45,844 48,131 54,234 4.8 2.5 2.4 State of California 61,674 95,162 100,010 112,860 4.9 2.5 2.4 United States 475,553 683,513 718,507 814,042 4.1 2.5 2.5 Total Retail Sales (Millions)*
Los Angeles County $131,596 $172,078 $180,568 $195,749 3.0 2.4 1.6 Los Angeles-Long Beach-Anaheim, CA MSA 180,690 232,182 243,988 265,457 2.8 2.5 1.7 Los Angeles-Long Beach, CA CSA 243,659 318,346 335,928 369,347 3.0 2.7 1.9 State of California 510,394 675,389 713,490 786,486 3.2 2.8 2.0 United States 4,387,108 5,538,706 5,846,867 6,434,974 2.6 2.7 1.9 * Infl ati on Adj us ted
Source: Woods & Poole Economics, Inc.

October-2022 Market Area Analysis
Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California 28

The U.S. population grew at an average annual compounded rate of 0.7% from 2010 through 2019. The county’s population has increased at a quicker pace than the nation’s population; the average annual growth rate of 2.8% between 2010 and 2019 reflects a rapidly expanding area. Following this population trend, per-capita personal income increased modestly, at 2.7% on average annually for the county between 2010 and 2019. Local wealth indexes have remained stable in recent years, registering a high 169.0 level for the county in 2019.

Food and beverage sales totaled $634 million in the county in 2019, versus $352 million in 2010. This reflects a 6.7% average annual change. The pace of growth is anticipated to be 4.5% through 2026. The retail sales sector demonstrated an annual increase of 3.5% in the decade spanning from 2010 to 2019. An increase of

3.7% average annual change is expected in county retail sales through 2026.

The characteristics of an area's workforce provide an indication of the type and amount of transient visitation likely to be generated by local businesses. Sectors such as finance, insurance, and real estate (FIRE); wholesale trade; and services produce a considerable number of visitors who are not particularly rate sensitive.

The government sector often generates transient r oom nights, but per -diem reimbursement allowances often limit the accommodations selection to budget and mid-priced lodging facilities. Contributions from manufacturing, construction, transportation, communications, and public utilities (TCPU) employers can also be important, depending on the company type.

The following table sets forth the county workforce distribution by business sector in 2019, 2020, and 2021, as well as a forecast for 2026.

Workforce
Characteristics

October-2022 Market Area Analysis
Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California 29

FIGURE 3-2 HISTORICAL AND PROJECTED EMPLOYMENT (000S)
Average Annual
Compounded Change
Percent Percent Percent Percent
Industry 2019 of Total 2020 of Total 2021 of Total 2026 of Total Farm 0.4 0.1 % 0.4 0.1 % 0.4 0.1 % 0.4 0.1 % (0.2) % 0.0 % (0.2) % Forestry, Fishing, Related Activities And Other 0.2 0.0 0.2 0.0 0.2 0.0 0.2 0.0 (6.3) 5.4 (0.7) Mi ni ng 0.4 0.1 0.3 0.1 0.4 0.1 0.4 0.1 (15.3) 16.5 (0.6) Utilities 1.4 0.2 1.4 0.2 1.4 0.2 1.3 0.2 (0.7) (0.7) (0.8) Cons tructi on 31.0 4.6 30.4 4.8 30.9 4.6 30.7 4.4 (2.0) 1.8 (0.1) Ma nufa cturi ng 52.6 7.9 50.5 7.9 52.2 7.7 50.0 7.1 (4.0) 3.3 (0.9) Total Trade 75.2 11.3 72.3 11.4 74.4 11.0 72.3 10.3 (3.8) 2.9 (0.6) Wholesale Trade 26.3 3.9 25.4 4.0 25.9 3.8 25.0 3.6 (3.3) 2.0 (0.7) Retail Trade 48.9 7.3 46.9 7.4 48.5 7.2 47.3 6.8 (4.1) 3.4 (0.5) Transportation And Warehousing 22.3 3.3 21.8 3.4 22.3 3.3 22.2 3.2 (2.1) 2.3 (0.1) Information 10.4 1.6 9.9 1.6 10.3 1.5 9.9 1.4 (5.3) 4.1 (0.7) Finance And Insurance 45.5 6.8 47.0 7.4 48.6 7.2 55.4 7.9 3.2 3.4 2.7 Real Estate And Rental And Lease 29.1 4.4 28.1 4.4 29.5 4.4 31.3 4.5 (3.7) 5.1 1.2 Total Services 337.4 50.6 314.1 49.3 345.7 51.0 365.0 52.2 (6.9) 10.1 1.1 Profes s i ona l And Techni ca l Servi ces 56.4 8.5 56.4 8.9 58.4 8.6 62.9 9.0 (0.0) 3.6 1.5 Ma na ge me nt Of Compa ni e s And Ente rpri s e s 26.5 4.0 25.6 4.0 26.5 3.9 26.3 3.8 (3.1) 3.3 (0.1) Administrative And Waste Services 42.3 6.3 38.6 6.1 42.6 6.3 43.1 6.2 (8.7) 10.4 0.2 Educa tional Services 16.5 2.5 15.5 2.4 17.5 2.6 20.0 2.9 (5.7) 12.6 2.7 Health Care And Social Assistance 97.7 14.6 95.6 15.0 100.4 14.8 107.4 15.3 (2.1) 5.0 1.4 Arts, Entertainment, And Recreation 18.7 2.8 13.9 2.2 19.5 2.9 21.3 3.1 (25.7) 40.1 1.8 Accommodation And Food Services 49.0 7.3 40.5 6.4 50.5 7.5 54.0 7.7 (17.4) 24.7 1.3 Other Services, Except Public Administra tion 30.4 4.6 27.9 4.4 30.3 4.5 30.0 4.3 (8.1) 8.6 (0.2) Total Government 61.4 9.2 60.2 9.5 61.1 9.0 60.4 8.6 (1.9) 1.5 (0.2) Federal Civilian Government 8.5 1.3 8.9 1.4 8.4 1.2 8.2 1.2 4.5 (5.4) (0.5) Federal Military 2.2 0.3 2.2 0.3 2.2 0.3 2.2 0.3 0.0 (0.0) 0.0 State And Local Government 50.7 7.6 49.1 7.7 50.5 7.5 50.0 7.2 (3.0) 2.8 (0.2) TOTAL 667.5 100.0 % 636.7 100.0 % 677.5 100.0 % 699.6 100.0 % (4.6) % 6.4 % 0.6 % MSA 1,414.6 — 1,346.5 — 1,445.0 — 1,516.4 — (4.8) % 7.3 % 1.0 % U.S. 203,809.5 — 191,619.5 — 209,319.1 — 222,948.2 — 1.3 9.2 1.3 Source: Woods & Poole Economics, Inc.
2019-
2020
2020-
2021
2021-
2026

October-2022 Market Area Analysis
Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California 30

Woods & Poole Economics, Inc. reports that during the period from 2019 to 2021, total employment in the county grew at an average annual rate of 1.3%. Of the primary employment sectors, Total Services recorded the highest increase in number of employees during the period from 2019 to 2021, increasing by 125,647 people, or 22.2%, and rising from 49.2% to 49.7% of total employment. Of the various service sub-sectors, Health Care And Social Assistance and Professional And Technical Services were the largest employers. Strong growth was also recorded in the Finance And Insurance sector, as well as the Real Estate And Rental And Lease sector, which expanded by 12.6% and 14.6%, respectively, in the period from 2019 to 2021. Forecasts developed by Woods & Poole Economics, Inc. anticipate that total employment in the county will change by 1.3% on average annually through 2026.

The trend is on par with the forecast rate of change for the U.S. as a whole during the same period.

The following table illustrates histori cal and projected employment, households, population, and average household income data, as provided by REIS for the overall Los Angeles market.

October-2022 Market Area Analysis
Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California 31

FIGURE 3-3 HISTORICAL & PROJECTED EMPLOYMENT, HOUSEHOLDS, POPULATION, AND HOUSEHOLD INCOME STATISTICS Year
2009 3,919,570 — 1,127,936 — 619,034 — 3,255,590 — 9,805,350 — $124,264 — 2010 3,932,130 0.3 % 1,132,488 0.4 % 619,366 0.1 % 3,250,010 (0.2) % 9,847,710 0.4 % 132,670 6.8 % 2011 3,961,700 0.8 1,140,256 0.7 616,627 (0.4) 3,290,940 1.3 9,905,860 0.6 138,743 4.6 2012 4,071,530 2.8 1,168,541 2.5 629,032 2.0 3,327,860 1.1 9,964,890 0.6 150,098 8.2 2013 4,157,700 2.1 1,191,862 2.0 637,318 1.3 3,358,360 0.9 10,016,730 0.5 145,676 (2.9) 2014 4,215,700 1.4 1,196,846 0.4 636,573 (0.1) 3,377,050 0.6 10,064,390 0.5 154,764 6.2 2015 4,335,230 2.8 1,223,844 2.3 635,307 (0.2) 3,391,180 0.4 10,098,780 0.3 162,909 5.3 2016 4,413,270 1.8 1,240,262 1.3 625,587 (1.5) 3,400,710 0.3 10,107,950 0.1 167,196 2.6 2017 4,482,070 1.6 1,262,034 1.8 617,809 (1.2) 3,393,090 (0.2) 10,091,410 (0.2) 174,132 4.1 2018 4,544,300 1.4 1,289,298 2.2 614,303 (0.6) 3,383,070 (0.3) 10,055,150 (0.4) 180,998 3.9 2019 4,584,300 0.9 1,293,057 0.3 608,570 (0.9) 3,397,100 0.4 10,033,970 (0.2) 188,834 4.3 2020 4,132,400 (9.9) 1,188,613 (8.1) 545,875 (10.3) 3,396,420 (0.0) 10,040,460 0.1 198,670 5.2 2021 4,407,130 6.6 1,248,169 5.0 561,876 2.9 3,425,990 0.9 10,052,180 0.1 213,080 7.3 Forecasts
2022 4,572,710 3.8 % 1,282,505 2.8 % 579,276 3.1 % 3,451,240 0.7 % 10,070,990 0.2 % 225,877 6.0 % 2023 4,641,010 1.5 1,296,835 1.1 582,918 0.6 3,474,400 0.7 10,088,410 0.2 237,565 5.2 2024 4,694,880 1.2 1,310,387 1.0 585,752 0.5 3,495,310 0.6 10,098,360 0.1 249,133 4.9 2025 4,722,820 0.6 1,317,411 0.5 585,124 (0.1) 3,515,220 0.6 10,105,160 0.1 260,207 4.4 2026 4,737,440 0.3 1,324,699 0.6 582,268 (0.5) 3,533,060 0.5 10,112,550 0.1 271,139 4.2 Average Annual Compound Change
2009 - 2021 1.0 % 0.8 % (0.8) % 0.4 % 0.2 % 4.6 %
Forecast 2022 - 2026 0.9 % 0.8 % 0.1 % 0.6 % 0.1 % 4.7 % % Chg% Chg
Office
Employment
Total
Employment % Chg
Household
Avg. Income % Chg
Source: REIS Report, 2nd Quarter, 2022
Households % Chg Population
Industrial
Employment % Chg

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Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California 32

For the Los Angeles market, of the roughly 4,400,000 persons employed, 28% are categorized as office employees, while 13% are categorized as industrial employees.

Total employment is expected to expand by 3.8% in 2022, while office employment is forecast to expand by 2.8% in 2022.

The number of households is forecast to expand by 0.6% on average annually between 2022 and 2026. Population is forecast to expand during this same period, at an average annual compounded rate of 0.1%. Household average income is forecast to grow by 4.7% on average annually from 2022 through 2026.

The following table reflects radial demograp hic trends for our market area measured by three points of distance from the subject site.

Radial Demographic
Snapshot

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Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California 33

FIGURE 3-4 DEMOGRAPHICS BY RADIUS
Population
2027 Projection 31,927 226,298 534,791
2022 Estimate 31,942 226,428 534,147
2010 Census 32,151 227,626 535,189
2000 Census 31,975 227,827 532,187
Percent Change: 2022 to 2027 -0.1% -0.1% 0.1%
Percent Change: 2010 to 2022 -0.7% -0.5% -0.2%
Percent Change: 2000 to 2010 0.6% -0.1% 0.6%
Households
2027 Projection 7,808 55,422 139,414
2022 Estimate 7,815 55,405 139,129
2010 Census 7,877 55,489 138,979
2000 Census 7,894 55,380 136,929
Percent Change: 2022 to 2027 -0.1% 0.0% 0.2%
Percent Change: 2010 to 2022 -0.8% -0.2% 0.1%
Percent Change: 2000 to 2010 -0.2% 0.2% 1.5%
Income
2022 Est. Average Household Income $101,599 $103,328 $101,087 2022 Est. Median Household Income 83,274 83,436 79,985
2022 Est. Civ. Employed Pop 16+ by Occupation
Architecture/Engineering 179 1,257 3,353
Arts/Design/Entertainment/Sports/Media 184 1,564 3,881
Building/Grounds Cleaning/Maintenance 726 5,614 12,068
Business/Financial Operations 635 3,901 10,271
Community/Social Services 139 1,308 3,153
Computer/Mathematical 235 1,691 4,545
Construction/Extraction 926 7,126 16,141
Education/Training/Library 692 4,131 10,304
Farming/Fishing/Forestry 80 517 1,050
Food Preparation/Serving Related 1,019 7,130 16,896
Healthcare Practitioner/Technician 714 4,811 11,355
Healthcare Support 676 4,982 11,235
Installation/Maintenance/Repair 382 3,705 8,345
Legal 33 484 1,154
Life/Physical/Social Science 79 581 1,309
Management 897 6,899 17,222
Office/Administrative Support 1,986 14,735 33,907
Production 1,542 9,770 21,644
Protective Services 420 2,406 4,903
Sales/Related 1,219 10,307 24,942
Personal Care/Service 492 3,590 8,442
Transportation/Material Moving 1,756 11,935 27,873

0.00 - 1.00 miles 0.00 - 3.00 miles 0.00 - 5.00 miles
Source: Environics Analytics

October-2022 Market Area Analysis
Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California 34

This source reports a population of 534,147 and 139,129 households within a five- mile radius of the subject site. The a verage household income within this radius is reported at $101,087, while the median is $79,985.

The following table presents h istorical unemployment rates for the proposed subject hotel’s market area.

FIGURE 3-5 UNEMPLOYMENT STATISTICS
Year
2012 14.3 % 10.2 % 10.4 % 8.1 %
2013 12.8 9.0 8.9 7.4
2014 10.9 7.6 7.5 6.2
2015 8.8 6.1 6.2 5.3
2016 5.5 5.0 5.5 4.9
2017 5.1 4.5 4.8 4.4
2018 4.9 4.2 4.3 3.9
2019 4.7 4.0 4.0 3.7
2020 13.2 11.5 10.2 8.1
2021 9.4 8.2 7.3 5.4
Recent Month - Jul
2021 9.9 % 8.8 % 7.8 % 5.4 %
2022 5.1 4.5 3.9 3.5
U.S.City MSA State
Source: U.S. Bureau of Labor Statistics

After the U.S. unemployment rate declined to an annual average of 4.6% in 2006 and 2007, the Great Recession, which spanned December 2007 through June 2009, resulted in heightened unemployment rates. The unemployment rate peaked at

10.0% in October 200 9, after which job growth resumed; the national unemployment rate has steadily declined since 2010. Total nonfarm payroll employment increased by 155,000, 238,000, and 235,000 jobs in December, January, and February, respectively. The strongest gains in February were recorded in the construction, private educational services, manufacturing, health care, and mining sectors. The national unemployment rate remains low, at 4.7% in December,

4.8% in January, and 4.7% in February; it has remained near the 5.0% ma rk since August 2015, reflecting a trend of relative stability and the overall strength of the U.S. economy.

Unemployment
Statistics

October-2022 Market Area Analysis
Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California 35

Locally, the unemployment rate was 9.4% in 2021; for this same area in 2022, the most recent month’s unemployment rate was registered at 5.1%, versus 9.9% for the same month in 2021. Local unemployment declined in 2013, and this trend continued through 2019. Local economic development officials reported that the entertainment, retail, tourism and leisure, finance, and healt hcare sectors and industries have historically provided strong employment in the market. In 2020, the city and MSA registered noticeably higher unemployment levels than that of the nation, reportedly attributed to the severe income inequality, which was intensified over the course of the pandemic. Data from 2021 illustrate a decline in unemployment as the economy reopened. The most recent comparative period shows where the local market stands in 2022 relative to the same month last year, reflecting further improvement given the strengthening economic conditions.

Providing additional context for understanding the nature of the regional economy, the following table presents a list of the major employers in the proposed subject property's market.

FIGURE 3-6 MAJOR EMPLOYERS
Number of
Rank Firm Employees
1 Baldwin Park Unified School District 2,354
2 Southern California Permanente Medical Group 1,578
3 United Parcel Service, Inc. 1,359
4 Walmart 447
5 Baldwin Park City Hall 365
6 Freudenberg Medical LLC 195
7 Home Depot 190
8 Target Stores 162
9 Universal Plastic Mold 123
10 From Factor Inc. 105
Source: City of Baldwin Park CAFR, 2021

Baldwin Park and its surrounding cities are home to several important medical facilities. Anchored by the 270 -bed Kaiser Permanente Baldwin Park Medical Center, the Kaiser Permanente network also operates smaller medical centers in the surrounding cities of Diamond Bar, San Dimas, and West Covina. Other medical centers in the area include the Emanate Health Queen of the Valley Hospital, Kindred Hospital Baldwin Park, and Greater El Monte Community Hospital. While the healthcare sector is the area's largest economic anchor, tourism also play an Major Business and
Industry

October-2022 Market Area Analysis
Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California 36

important role in the local economy. Ra ging Waters, located in San Dimas, is California's largest waterpark and home to the state's only hydromagnetic water attraction. It is open annually from mid-May through late September and recognized by USA Today as a "Top 10 Water Park." Moreover, the Sa n Bernardino Line is a Metrolink rail line running from Downtown Los Angeles to Baldwin Park. The line's extension to Redlands is expected to be complete by year-end 2022. Although many employers in the market temporarily reduced staffing and/or suspended operations following the onset of the COVID -19 pandemic in March 2020, an economic recovery began mid -year 2021; moreover, tourism rebounded rapidly during the summer of 2021. The return of international travel, increasing convention activity, and improvin g office -space occupancy should bolster the economic recovery going forward.

Trends in occupied office space are typically among the most reliable indicators of lodging demand, as firms that occupy office space often exhibit a strong propensity to attract commercial visitors. Thus, trends that cause changes in vacancy rates or occupied office space may have a proportional impact on commercial lodging demand and a less direct effect on meeting demand. The following table details office space statistics for the pertinent market area.

Office Space Statistics

October-2022 Market Area Analysis
Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California 37

FIGURE 3-7 OFFICE SPACE STATISTICS – MARKET OVERVIEW
Submarket
1 Beverly Hills 100 7,574,000 6,508,000 14.1 % $58.89
2 Burbank 95 6,950,000 6,169,000 11.2 40.63
3 Century City 26 10,192,000 9,195,000 9.8 58.39
4 Downtown 171 38,667,000 32,553,000 15.8 44.45
5 East County 204 9,175,000 7,938,000 13.5 30.82
6 Glendale 83 7,341,000 6,085,000 17.1 36.29
7 Hollywood/Sunset 70 5,554,000 4,745,000 14.6 48.12
8 LAX/El Segundo 167 17,394,000 13,490,000 22.4 37.37
9 Long Beach 106 8,695,000 7,154,000 17.7 $30.90
10 Marina/Culver City 127 6,977,000 5,753,000 17.5 $42.54 11 Mid-Cities 48 1,772,000 1,568,000 11.5 $27.85
12 Mid-Wilshire/Miracle Mile/Park Mile 140 16,098,000 13,309,000 17.3 $39.50 13 Pasadena 142 8,044,000 6,430,000 20.1 $39.80
14 Santa Clarita Valley 38 2,218,000 1,817,000 18.1 $37.62 15 Santa Monica 148 8,378,000 6,756,000 19.4 $60.91
16 SFV - Central 157 9,475,000 7,778,000 17.9 $34.99
17 SFV - East 67 3,642,000 3,048,000 16.3 $40.74
18 SFV - West 243 15,040,000 12,734,000 15.3 $32.03
19 South Bay 136 7,735,000 6,636,000 14.2 $32.33
20 West LA 118 11,790,000 9,848,000 16.5 $48.78
21 West San Gabriel Valley 67 4,752,000 4,032,000 15.2 $28.97 Totals and Averages 2,453 207,463,000 173,546,000 16.3 % $41.44 Inventory Occupied Office
Space
Vacancy
Rate
Average Asking
Lease RateBuildings Square Feet
Source: REIS Report, 2nd Quarter, 2022

The greater Los Angeles market comprises a total of 207.5 million square feet of office space. For the 2nd Quarter of 2022, the market repo rted a vacancy rate of

16.3% and an average asking rent of $41.44. The subject property is located in the East County submarket, which houses 9,175,000 square feet of office space. The submarket's vacancy rate of 13.5% is below the overall market average. The average asking lease rate of $30.82 is below the average for the broader market.

The following table illustrates a trend of office space statistics for the overall Los Angeles market and the East County submarket.

October-2022 Market Area Analysis
Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California 38

FIGURE 3-8 HISTORICAL AND PROJECTED OFFICE SPACE STATISTICS – GREATER MARKET VS. SUBMARKET Year
2009 195,862,000 — 169,665,000 — 13.4 % $32.55 — 9,091,000 — 8,018,000 — 11.8 % $26.60 — 2010 195,807,000 (0.0) % 166,280,000 (2.0) % 15.1 31.93 (1.9) % 9,053,000 (0.4) % 7,786,000 (2.9) % 14.0 26.02 (2.2) % 2011 196,546,000 0.4 166,691,000 0.2 15.2 32.09 0.5 9,053,000 0.0 7,704,000 (1.1) 14.9 26.13 0.4 2012 197,279,000 0.4 165,877,000 (0.5) 15.9 32.53 1.4 9,053,000 0.0 7,686,000 (0.2) 15.1 26.88 2.9 2013 197,618,000 0.2 165,994,000 0.1 16.0 33.05 1.6 9,012,000 (0.5) 7,588,000 (1.3) 15.8 26.90 0.1 2014 197,516,000 (0.1) 166,481,000 0.3 15.7 34.18 3.4 9,112,000 1.1 7,882,000 3.9 13.5 26.93 0.1 2015 198,843,000 0.7 168,875,000 1.4 15.1 35.49 3.8 9,278,000 1.8 8,063,000 2.3 13.1 27.70 2.9 2016 199,214,000 0.2 170,323,000 0.9 14.5 36.68 3.4 9,278,000 0.0 7,608,000 (5.6) 18.0 27.96 0.9 2017 200,749,000 0.8 171,549,000 0.7 14.5 37.73 2.9 9,278,000 0.0 7,552,000 (0.7) 18.6 28.03 0.3 2018 203,089,000 1.2 173,863,000 1.3 14.4 38.97 3.3 9,143,000 (1.5) 7,598,000 0.6 16.9 28.80 2.7 2019 204,243,000 0.6 175,332,000 0.8 14.2 40.54 4.0 9,143,000 0.0 7,607,000 0.1 16.8 29.53 2.5 2020 205,432,000 0.6 174,088,000 (0.7) 15.3 40.67 0.3 9,143,000 0.0 7,630,000 0.3 16.5 29.70 0.6 2021 207,220,000 0.9 174,227,000 0.1 15.9 41.13 1.1 9,175,000 0.3 7,796,000 2.2 15.0 30.47 2.6 Forecasts
2022 210,320,000 1.5 % 175,975,000 1.0 % 16.3 % 41.51 0.9 % 9,185,000 0.1 % 7,888,000 1.2 % 14.1 % 30.82 1.1 % 2023 210,630,000 0.1 176,080,000 0.1 16.4 42.14 1.5 9,185,000 0.0 7,680,000 (2.6) 16.4 31.33 1.7 2024 210,932,000 0.1 176,562,000 0.3 16.3 42.88 1.8 9,212,000 0.3 7,551,000 (1.7) 18.0 31.81 1.5 2025 212,195,000 0.6 177,960,000 0.8 16.1 43.67 1.8 9,262,000 0.5 7,509,000 (0.6) 18.9 32.27 1.4 2026 212,992,000 0.4 179,112,000 0.6 15.9 44.50 1.9 9,316,000 0.6 7,478,000 (0.4) 19.7 32.72 1.4 Average Annual Compound Change
2009 - 2021 0.5 % 0.2 % 2.0 % 0.1 % (0.2) % 1.1 %
Forecast 2022 - 2026 0.3 % 0.4 % 1.8 % 0.4 % (1.3) % 1.5 % Los Angeles Market East County Submarket
Available Office
Space % Chg
Occupied Office
Space
Asking Lease
Rate % Chg
Available
Office Space % Chg
Occupied
Office Space
Asking Lease
Rate % Chg
Vacancy
Rate% Chg
Source: REIS Report, 2nd Quarter, 2022
% Chg
Vacancy
Rate

October-2022 Market Area Analysis
Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California 39

The level of occupied office space is forecast to initially increase in this Los Angeles market, to roughly 7,900,000 square feet in 2022. Occupied office space recovers to 7,700,000 by 2026. According to REIS, despite the onset of the COVID-19 pandemic in 2020, vacancy rates in the East County of Los Angeles submarket decreased in 2021. Vacancy rates are expected to continue to decline in 2022 be fore increasing in 2023, a trend that is expected to continue through 2026. Similar to vacancy rates, average asking lease rates continued to increase despite the onset of the COVID-19 pandemic in 2020. Rates are expected to continue increasing through 2026.

A convention center serves as a gaug e of visitation trends to a particular market.

Convention centers also generate significant levels of demand for area hotels and serve as a focal point for community activity. Typically, hotels within the closest proximity to a convention center — up to thre e miles away— will benefit the most.

Hotels serving as headquarters for an event benefit the most by way of premium rates and hosting related banquet events. During the largest conventions, peripheral hotels may benefit from compression within the city as a whole.

The award -winning Los Angeles Convention Center (LACC) is one of the key contributors to the economic and cultural vitality of Los Angeles. As one of the most technologically advanced, architecturally pleasing, and functionally superb venues in the world, the LACC features two exhibit halls and a 299 -seat theatre for a total of roughly 720,000 square feet of exhibit space, as well as 64 meeting rooms totaling 147,000 square feet of meeting space. Additional features include a full -service business center, a few food courts, and 5,600 onsite parking spaces. AEG filed plans for an 850-room expansion of the JW Marriott Los Angeles L.A. Live. The 40 -story hotel tower will reportedly include 51,000 square feet of meeting space and connect to the Los Angeles Convention Center through multiple pedestrian bridges. AEG is also in the plann ing stages of a $500 -million expansion of the convention center, which is expected to include 350,000 square feet of additional meeting space. The expansion of the convention center is expected to improve the competitive level of L.A. as a destination for meetings and events relative to other West Coast convention markets, such as Anaheim, San Diego, San Francisco, and Seattle. The expansion project was approved by the city planning commission in February 2022; however, a construction timeline has yet to be announced.

The following table illustrates recent usage statistics for this facility.

Convention Activity

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Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California 40

FIGURE 3-9 CONVENTION CENTER STATISTICS
Percent Percent
Year Change Change
2014/15 25 — 221,016 —
2015/16 24 (4.0) % 234,753 6.2 %
2016/17 32 33.3 301,364 28.4
2017/18 27 (15.6) 283,798 (5.8)
2018/19 23 (14.8) 226,608 (20.2)
Number of Room
Nights
Source: Los Angeles Convention Center
Number of
Citywide
Conventions

The number of citywide conventions generally trended upward year -over-year between 2012/13 and 2016/17. Eleven new events at the LACC contributed to a strong year in 2014/15, and the booking pace continued to be strong in 2015/16, including events related to the Special Olympics and the U.S. Green Building Council conference. This event and the LACC's continued push to attract more national conventions, including the National Science Teachers Association's National Conference and the American Association of Neurological Surgeons Annual Scientific Meeting, contributed to the increase in the number of events held in 2016/17. The number of conventions and attendees then declined through the 2018/19 fiscal year, largely attributed to several rotating associations and bi-annual groups, rather than the loss of one large group. However, record attendance was reported at several key events, including the Anime Expo and the Los Angeles Auto Show. As expected, the number of events and room nights generated by the convention center decreased in fiscal 2019/20 due to the COVID-19 pandemic. The LACC remained closed for the entirety of fiscal 2020/21. However, the LACC began to welcome events in July 2021. The convention center reported an operating loss of $3.2 million in the 2020/21 fiscal year due to the impact of COVID -19. Data for the most recent fiscal year has not yet been published at the time of this report, but many events have returned, including the Los Angeles Comic Con and the National Science Teachers Association Conference.

Airport passenger counts are important indicators of lodging demand. Depending on the type of service provided by a particular airfield, a sizable percentage of arriving passengers may require hotel accommodations. Trends showing changes in passenger counts also reflect local business activity and the overa ll economic health of the area.

Los Angeles International Airport (LAX) is the primary airport serving Los Angeles, California. With service to destinations across the globe, LAX reportedly handles Airport Traffic

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Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California 41

more "origin and destination" passengers than any other airport and serves as a major hub for American Airlines, Delta Air Lines , and United Airlines. Los Angeles World Airports (LAWA), the airport authority that owns and operates LAX, is amid a multibillion -dollar capital improvements program that includes terminal and runway projects. In 2019, LAWA completed a $1.6-billion project that expanded the Tom Bradley International Terminal (TBIT), adding a 750,000-square-foot Midfield Satellite Concourse with an additional twelve gates. In 2017, Delta commenced construction on a $1.9-billion project to modernize, upgrade, and connect Terminal 2, Terminal 3, and the north side of the TBIT through its Delta Sky Way. A 24 -hour automated people mover is also under construction and will connect passengers with the central terminal area and the Metro Green Line, the future Metro Crenshaw/LAX Li ne, and a new consolidated car -rental facility. These improvements are considered the largest public works program in the history of Los Angeles and are anticipated to be completed in 2023. Separately, in 2019, LAWA announced that initial preparations had begun for the future development of two new terminals, Terminals 0 and 9, to be located east of Terminals 1 and 7, respectively; this expansion will help prepare the city to host the 2028 Summer Olympic Games.

The following table illustrates recent oper ating statistics for the Los Angeles International Airport , whi ch is the primary airport facility serving the proposed subject hotel’s submarket.

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Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California 42

FIGURE 3-10 AIRPORT STATISTICS - LOS ANGELES INTERNATIONAL AIRPORT Year
2012 63,688,121 — —
2013 66,665,726 4.7 % 4.7 %
2014 70,662,212 6.0 5.3
2015 74,956,305 6.1 5.6
2016 80,921,527 8.0 6.2
2017 84,558,776 4.5 5.8
2018 87,533,177 3.5 5.4
2019 88,068,013 0.6 4.7
2020 28,779,527 (67.3) (9.5)
2021 48,007,284 66.8 (3.1)
Year-to-date, August
2021 28,664,406 — —
2022 43,069,862 50.3 % —
*Annual average compounded percentage change from the previ ous year **Annual average compounded percentage change from first year of data Change**
Passenger
Change*Traffic
Percent Percent
Source: Los Angeles International Airport

This facility recorded 48,007,284 passengers in 2021. The change in passenger traffic between 2020 and 2021 was 66.8%. The average annual change during the period shown was -3.1%. Following years of growth in passenger traffic, a significant decline was recorded in 2020 given the impact of the COVID -19 pandemic and the t ravel restrictions that were implemented; however, data for 2021 show a positive trend now that most travel restrictions have been rescinded and economic activity has improved. Although passenger levels have increased since 2020, performance for 2021 remai ned around 45% below 2019 levels. On November 8, 2021, travel restrictions were lifted for fully vaccinated international visitors to the United States. Data for the year-to-date 2022 period show continued improvement compared to the same period in 2021.

Tourism is an important factor for Los Angeles area hotels. As the nation’s entertainment capital, Los Angeles County is home to a variety of well -known television, movie, and other media production studios. The area benefits from optimal year-round weather conditions and miles of beaches. Primary attractions in the East County area include The Huntington Library, Art Museum, and Botanical Gardens; Raging Waters Los Angeles; and Irwindale Speedway. We note that many Tourist Attractions

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Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California 43

of the tourist attractions and en tertainment venues temporarily closed or enacted visitor restrictions because of the COVID -19 pandemic, although most reopened mid-year 2021 once the governmental restrictions were lifted.

This section discussed a wide variety of economic ind icators for the pertinent market area. The greater Los Angeles market, including Baldwin Park, is currently experiencing an economic rebound following the impacts of the COVID -19 pandemic, which peaked from the second quarter of 2020 through the second quarter of 2021. As noted previously, the local economy is primarily led by th e entertainment, retail, tourism and leisure, finance, and healthcare industries and sectors. Additionally, tourism rebounded in the summer of 2021 and is expected to strengthen further this year, with key attractions such as The Huntington Library, Art Museum, and Botanical Gardens; Raging Waters Los Angeles; and the Irwindale Speedway being primary draws. Thus, the near -term market outlook is overall positive.

Conclusion

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Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California 44

4. Supply and Demand Analysis
In the lodging industry, price varies directly, but not proportionately, with demand and inversely, but not proportionately, with supply. Supply is measured by the number of guestrooms available, and demand is measured by the number of rooms occupied; the net effect of supply and demand toward equilibrium results in a prevailing price, or average daily rate (ADR). The purpose of this section is to investigate current supply and demand trends, as indicated by the current competitive market, and to set forth a basis for the projection of future supply and demand growth.

The subject property is located in the greater Los Angeles-Long Beach market. The following table presents the historical occupancy, average rate, and RevPAR data for this metropolitan area for 2001 through September 2022. The d ata reflect the historical performance of the market, including the impact of and recovery from the 2001 and 2008/09 downturns.

Los Angeles
-
Long
Beach, CA Lodging
Market

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Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California 45

FIGURE 4-1 LOS ANGELES-LONG BEACH LODGING MARKET DATA – 2001 TO YTD SEPTEMBER 2022
Year
2001 66.8 % — $95.54 — $63.82 —
2002 65.3 (2.2) % 91.39 (4.3) % 59.68 (6.5) %
2003 67.4 3.2 91.10 (0.3) 61.40 2.9
2004 71.6 6.2 96.05 5.4 68.77 12.0
2005 74.6 4.2 103.95 8.2 77.55 12.8
2006 75.1 0.7 113.90 9.6 85.54 10.3
2007 75.2 0.1 122.59 7.6 92.19 7.8
2008 71.3 (5.2) 127.94 4.4 91.22 (1.0)
2009 64.3 (9.8) 114.20 (10.7) 73.43 (19.5)
2010 68.0 5.8 116.20 1.8 79.02 7.6
2011 71.7 5.4 123.15 6.0 88.30 11.7
2012 75.4 5.2 130.12 5.7 98.11 11.1
2013 76.8 1.9 136.55 4.9 104.87 6.9
2014 78.8 2.6 147.28 7.9 116.06 10.7
2015 79.5 0.9 158.40 7.6 125.93 8.5
2016 81.1 2.0 172.42 8.9 139.83 11.0
2017 80.0 (1.4) 175.98 2.1 140.78 0.7
2018 79.5 (0.6) 180.38 2.5 143.40 1.9
2019 79.7 0.3 180.39 0.0 143.77 0.3
2020 49.3 (38.1) 137.68 (23.7) 67.88 (52.8)
2021 63.7 29.2 162.68 18.2 103.63 52.7
Year to date through September
2021 62.2 % $155.68 $96.83
2022 71.8 15.4 % 202.12 29.8 % 145.12 49.9 %
Average Annual Compound Growth
2001 to 2021 (0.2) % 2.7 % 2.5 %
Source: STR Global, STR Monthly Hotel Review
Percent
Change
Average Rate
Percent
Change
RevPAR
Percent
Change
Occupancy

Los Angeles is a major global center for business, entertainment, international trade, media, fashion, science, technology, and education. The Los Angeles hotel market (defined as Los Angeles County) is one of the largest in the United States and includes a variety of dynamic hotel submarkets, ranging from world-famous luxury destinations in Santa Monica, West Hollywood, and Beverly Hills to the coastal communities of Malibu, Venice Beach, Manhattan Beach, and Hermosa Beach, as well as smaller and more industrial areas to the south in Long Beach and to the east in the San Gabriel Valley. Following declines in 2009, concurrent with the local and

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Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California 46

national economic downturns, market -wide RevPAR registered steady year -over- year growth from 2010 through 2019, resulting in occupancy levels approaching

80.0% in 2019. The Los Angeles market realized the quickest occupancy recovery among all major Southern California markets after the Great Recession. Growth continued in the last decade despite steady increases in supply, pa rticularly in the vibrant submarkets of Downtown L.A., Hollywood, and West Hollywood.

To assess the impact of COVID -19 on this market, we have reviewed the following data, as published by STR, which track market performance on a weekly basis. The weekly data illustrate the timing and degree of impact that the market is experiencing.

FIGURE 4-2 LOS ANGELES-LONG BEACH OCCUPANCY TRENDS – WEEKLY DATA -2.7%

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%

80.0%

90.0%
100.0%

J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O Months of the Year
2020 - 2022
2019

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Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California 47

FIGURE 4-3 LOS ANGELES-LONG BEACH ADR TRENDS – WEEKLY DATA

18.9%
$40
$60
$80
$100
$120
$140
$160
$180
$200
$220
$240

J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O Months of the Year
2020 - 2022
2019

FIGURE 4-4 LOS ANGELES-LONG BEACH REVPAR TRENDS – WEEKLY DATA

15.7%
$0
$50
$100
$150

J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O Months of the Year
2020 - 2022
2019

Travel and visitation slowed significantly in 2020 as a result of COVID-19; thus, the market ended the year with an occupancy of 48.9% and an ADR of $138.95, reflecting a RevPAR dec rease of 52.6% when compared to 2019. In Los Angeles, many small and large businesses, as well as the entertainment industry, were significantly affected by strict government restrictions implemented to reduce the spread of COVID-19. Group events at area hotels and at the Los Angeles Convention Center were canceled through mid-year 2021; however, re-bookings started in the

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Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California 48

fall of 2021. As of year -end 2021, occupancy and ADR rebounded to 66.0% and $177.34, respectively, showing significant improvements over 2020. Year-to-date data for 2022 show an acceleration in the rebound from 2021. The market’s RevPAR for year -to-date 2022 exceeds that of the same period in 2019, illustrating the resiliency of the Los Angeles market. The return of in-person "awards season" galas and events, as well as the 2022 Super Bowl, assisted in the recovery of demand for this year. Over the long term, the popularity of this market with leisure and business travelers, limited supply increases, and the diversity and strength of the lo cal economy should support continued growth in the lodging sector.

The subject site is located in the greater Los Angeles County lodging market. Within this greater market, the proposed subject hotel will compete with a smaller set of hotels based on various factors, such as location, price point, and product type.

A hotel’s local lodging market is most directly affected by the supply and demand trends within the immediate area. However, individual markets are also influenced by conditions in the national lodging market. We have reviewed national lodging trends to provide a context for the for ecast of the supply and demand for the proposed subject hotel’s competitive set.

STR is an independent research firm that compiles data on the lodging industry, and this information is routinely used by typical hotel buyers. The following STR diagram presents annual hotel occupancy, ADR, and rooms revenue per available room (RevPAR) data since 1989. RevPAR is calculated by multiplying occupancy by ADR and provides an indication of how well rooms revenue is being maximized.

Definition of Subject
Hotel Market
National Trends
Overview

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Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California 49

FIGURE 4-5 NATIONAL OCCUPANCY, ADR, AND REVPAR TRENDS

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

70.0%
$0
$20
$40
$60
$80
$100
$120
$140
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
Source: STR
RevPAR
Average Rate
Occupancy

The preceding chart illustrates the impact of the recessions of the early 1990s, 2000s, the financial crisis of 2008/09, and the recent pandemic on the U.S. lodging industry. In each case, the downturn caused lodging demand to drop, resulting in an occupancy decline. The aggregate ADR also fell, as hoteliers used price as a marketing tool to attract demand and support occupancy levels. As occupancy recovered, ADR growth resumed, although the ADR recovery lagged somewhat behind occupancy leve ls, as price discounts contributed to the initial recovery of demand. Following the financial crisis of the Great Recession, occupancy fell by over eight points, and ADR declined by 5.9%, resulting in an 18.3% decrease in RevPAR.

The market recovered stead ily thereafter, with occupancy surpassing the 65.0% mark in 2015, and ADR also consistently growing, albeit at a decelerating pace.

October-2022 Supply and Demand Analysis
Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California 50

FIGURE 4-6 NATIONAL OCCUPANCY AND ADR TRENDS: 2019, 2020, 2021

United States 66.0 % 44.0 % (33.3) % 57.7 % 31.1 % $131.23 $103.25 (21.3) % $124.68 20.7 % $86.64 $45.48 (47.5) % $71.88 58.2 % 5.2 % 37.8 % Region
New England 64.7 % 38.8 % (40.1) % 55.7 % 44.4 % $161.08 $123.17 (23.5) % $156.04 25.8 % $104.25 $47.77 (54.2) % $86.93 81.6 % 5.6 % 52.5 % Mi ddl e Atl a nti c 69.0 41.3 (40.1) 55.4 34.1 166.27 115.26 (30.7) 143.60 24.1 114.81 47.65 (58.5) 79.52 66.4 4.8 40.6 South Atlantic 67.5 45.7 (32.2) 59.9 31.2 128.41 107.99 (15.9) 130.29 20.7 86.68 49.40 (43.0) 78.08 58.3 6.2 39.3 E. North Central 61.1 39.1 (36.0) 52.4 34.2 112.64 86.72 (23.0) 105.15 20.6 68.82 33.93 (50.7) 55.11 61.9 4.5 40.2 E. South Central 62.4 45.7 (26.8) 59.5 30.6 103.58 85.74 (17.2) 104.49 21.8 64.61 39.18 (39.4) 62.21 59.0 3.1 34.6 W. North Central 58.3 39.1 (32.9) 51.1 31.1 99.28 83.65 (15.7) 97.01 15.7 57.88 32.72 (43.5) 49.58 51.7 2.4 34.3 W. South Central 62.6 44.9 (28.2) 58.2 29.7 101.84 82.88 (18.6) 95.84 15.8 63.77 37.25 (41.6) 55.73 50.1 3.4 34.0 Mounta i n 66.9 46.7 (30.1) 59.6 28.2 121.89 105.70 (13.3) 124.82 18.5 81.54 49.39 (39.4) 74.44 51.9 6.3 36.3 Pacific 73.6 47.1 (36.0) 60.3 27.6 171.40 129.57 (24.4) 157.57 22.1 126.16 61.01 (51.6) 94.97 55.8 7.2 36.8 Cl a s s
Luxury 70.9 % 36.8 % (48.1) % 52.3 % 42.0 % $304.11 $285.78 (6.0) % $342.63 19.7 % $215.73 $105.29 (51.2) % $179.24 70.0 % 18.3 % 68.0 % Upper-Upscale 72.6 34.8 (52.1) 49.8 43.4 188.24 159.14 (15.5) 179.35 12.6 136.67 55.30 (59.5) 89.39 61.5 13.3 62.5 Upscale 71.5 42.8 (40.1) 59.3 38.8 143.60 117.80 (18.0) 133.72 13.4 102.68 50.45 (50.9) 79.35 57.4 7.1 48.6 Upper-Midscale 67.5 45.3 (32.9) 61.1 35.1 115.91 98.80 (14.8) 114.82 16.1 78.20 44.72 (42.8) 70.20 56.8 4.2 40.7 Mi ds ca l e 59.5 44.4 (25.4) 57.0 28.8 95.82 84.47 (11.8) 99.25 17.9 57.03 37.52 (34.2) 56.59 51.8 2.5 32.0 Economy 59.4 49.2 (17.1) 58.8 20.0 75.50 65.45 (13.3) 77.94 18.1 44.83 32.30 (28.2) 45.83 41.8 0.0 20.0 Loca tion
Urban 73.2 % 37.9 % (48.2) % 51.8 % 35.9 % $183.20 $127.80 (30.2) % $153.22 20.2 % $134.12 $48.47 (63.9) % $79.30 63.3 % 9.9 % 49.4 % Suburban 66.7 46.4 (30.4) 60.0 29.3 111.26 88.81 (20.2) 104.76 17.9 74.24 41.24 (44.4) 62.88 52.5 3.5 33.9 Airport 73.7 44.5 (39.6) 60.5 35.8 119.22 93.71 (21.4) 104.53 11.4 87.85 41.72 (52.5) 63.20 51.3 2.8 39.5 Interstate 57.9 44.8 (22.7) 57.8 29.5 87.86 79.05 (10.0) 92.05 16.6 50.85 35.39 (30.4) 53.22 50.9 2.0 32.1 Resort 70.0 42.9 (38.6) 57.9 35.4 182.74 170.36 (6.8) 208.73 22.4 127.85 73.13 (42.8) 120.93 65.7 14.3 54.7 Small Town 57.8 44.4 (23.1) 57.0 28.9 107.26 96.95 (9.6) 116.63 20.0 61.98 43.07 (30.5) 66.43 54.8 2.0 31.6 Cha i n Sca l e
Luxury 73.8 % 32.0 % (56.7) % 47.8 % 49.7 % $343.02 $329.54 (3.9) % $383.64 16.1 % $253.17 $105.40 (58.4) % $183.44 73.8 % 23.2 % 84.3 % Upper-Upscale 73.9 33.4 (54.8) 48.7 45.6 189.25 158.86 (16.1) 175.87 10.8 139.80 53.10 (62.0) 85.69 61.3 14.7 67.0 Upscale 72.6 43.0 (40.7) 59.7 38.9 142.38 115.11 (19.2) 128.58 11.7 103.32 49.52 (52.1) 76.75 55.1 6.8 48.4 Upper-Midscale 67.5 45.4 (32.7) 61.6 35.9 112.80 96.04 (14.9) 111.18 15.8 76.14 43.61 (42.7) 68.53 57.3 4.2 41.6 Mi ds ca l e 58.1 44.2 (23.8) 56.6 28.1 86.61 77.29 (10.8) 89.42 15.7 50.30 34.19 (32.0) 50.61 48.2 1.5 30.1 Economy 58.7 50.9 (13.2) 59.7 17.6 63.70 58.21 (8.6) 66.80 14.8 37.36 29.64 (20.7) 39.89 35.0 (1.3) 16.0 Independents 63.5 44.8 (29.5) 57.2 28.2 133.08 110.74 (16.8) 137.78 24.8 84.44 49.56 (41.3) 78.87 60.0 4.6 34.1

2020
% Change
2020
% Change
2021
RevPAR
% Change
Rms.

Avail.

Rms.

Sold
Percent Change
% Change
Occupancy
Average Rate
2021
% Change
2020
% Change
2019
2019
2019
2021
Source: STR - December 2020 and December 2021 Lodging Reviews

October-2022 Supply and Demand Analysis
Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California 51

The onset of the COVID -19 pandemic in March 2020 had a severe impact on the lodging industry, causing occupancy, ADR, and RevPAR to decline by unprecedented levels. The impact on the national lodging industry peaked mid-April; for the week ending April 11, 2020, STR reported that national RevPAR was 83.6% lower than the level recorded for the same week in 2019. By the conclusion of 2020, occupancy had declined 22 points, with ADR decreasing by roughly $28.00, resulting in a RevPAR loss of 48.0% (rounded). The shar p downturn in travel caused by COVID - 19 continued into early 2021, as the months of January and February 2020 had not been notably affected by the pandemic.

Hotels that traditionally derive a significant component of their demand from the larger group and convention subsegment were the hardest hit by the pandemic, followed by properties in markets with a high proportion of business and international travel. For this reason, the major metropolitan areas reported deep RevPAR declines through the first half of 2021. Hotels in locations that depend primarily on automobile traffic have fared better (including drive -to leisure destinations), and the extended -stay category has also outperformed the national average, fueling the illustrated 2021 recovery. Gaining traction in the summer of 2021, group demand began to show signs of recovery, albeit at a slower pace.

Accordingly, by the end of 2021, nationwide occupancy had rebounded to nearly

58.0%, with ADR reaching roughly $125, representing a RevPAR gain of 58.0% (rounded).

Many corporations and institutions have begun to return to offices, at least in some capacity. Group travel is recovering at an accelerating pace, as participants feel increasingly comfortable gathering in larger numbers. Leisure demand, which led the recovery in many markets, remains strong, with ADR levels in most destinations surpassing historical levels. With a significant portion of the recovery now behind us, and further interest rate increases likely on the horizon, hotel owners, operators, and investors generally expect less-significant gains in 2023 than those achieved in 2021 and 2022. Employment levels are high, and the return of group travel in the summer and fall of 2022 were definite bright spots for the industry. However, the inflation rate remains elevated, and the related increases in the federal funds rate may impact the degree of continued growth through 2023.

October-2022 Supply and Demand Analysis
Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California 52

FIGURE 4-7 RECENT NATIONAL OCCUPANCY AND ADR TRENDS
United States 51.1 % 59.9 % 17.1 % $106.75 $142.82 33.8 % $54.56 $85.50 56.7 % 3.4 % 21.1 % Region
New England 54.6 % 65.0 % 18.9 % $154.86 $189.67 22.5 % $84.63 $123.29 45.7 % 2.1 % 21.4 % Middle Atlantic 54.2 63.0 16.3 135.99 176.27 29.6 73.69 111.05 50.7 6.5 23.8 South Atlantic 59.9 65.7 9.6 129.18 152.14 17.8 77.38 99.89 29.1 2.7 12.5 E. North Central 52.4 58.9 12.2 103.72 124.17 19.7 54.40 73.07 34.3 2.1 14.5 E. South Central 59.8 62.6 4.8 102.30 119.43 16.7 61.13 74.77 22.3 1.5 6.4 W. North Central 51.4 57.0 10.9 96.79 110.03 13.7 49.73 62.69 26.0 0.3 11.2 W. South Central 58.1 61.2 5.4 92.87 111.46 20.0 53.93 68.20 26.5 1.1 6.6 Mountain 59.3 65.1 9.9 122.90 146.83 19.5 72.87 95.65 31.3 0.9 10.9 Pacific 59.8 68.6 14.7 154.15 193.58 25.6 92.22 132.82 44.0 3.3 18.5 Class
Luxury 50.6 % 63.3 % 25.1 % $318.17 $362.83 14.0 % $160.97 $229.66 42.7 % 6.2 % 32.8 % Upper-Upscale 48.2 63.6 31.9 170.62 207.34 21.5 82.22 131.79 60.3 6.7 40.8 Upscale 58.7 67.5 14.9 129.79 157.07 21.0 76.22 105.96 39.0 3.7 19.1 Upper-Midscale 61.3 66.4 8.2 113.02 130.61 15.6 69.33 86.73 25.1 2.5 10.9 Midscale 57.5 60.0 4.4 98.74 111.44 12.9 56.73 66.84 17.8 0.0 4.4 Economy 59.6 59.7 0.2 75.86 84.96 12.0 45.22 50.74 12.2 (1.0) (0.8) Location
Urban 50.0 % 63.4 % 26.8 % $144.12 $194.54 35.0 % $72.11 $123.42 71.2 % 7.8 % 36.7 % Suburban 59.9 64.9 8.3 102.67 123.63 20.4 61.53 80.27 30.4 1.2 9.6 Airport 59.5 69.0 16.1 102.19 127.62 24.9 60.77 88.09 45.0 1.4 17.7 Interstate 58.3 60.0 2.9 91.61 102.00 11.3 53.45 61.21 14.5 0.5 3.4 Resort 57.2 66.5 16.3 207.54 236.89 14.1 118.71 157.65 32.8 4.0 21.0 Small Town 57.8 59.6 3.1 117.91 130.78 10.9 68.12 77.89 14.3 0.4 3.5 Chain Scale
Luxury 44.7 % 63.1 % 40.9 % $370.80 $421.47 13.7 % $165.90 $265.78 60.2 % 7.1 % 51.0 % Upper-Upscale 46.5 63.8 37.1 170.83 210.06 23.0 79.43 133.94 68.6 7.5 47.4 Upscale 59.0 68.1 15.4 125.81 153.58 22.1 74.19 104.55 40.9 4.2 20.2 Upper-Midscale 61.7 66.8 8.2 109.96 126.99 15.5 67.90 84.82 24.9 3.1 11.5 Midscale 57.3 59.0 3.0 89.18 99.79 11.9 51.12 58.92 15.3 (0.2) 2.8 Economy 60.6 60.1 (0.7) 66.57 73.16 9.9 40.34 44.00 9.1 (2.4) (3.1) Independents 57.2 61.5 7.4 136.40 160.44 17.6 78.09 98.68 36.4 1.4 8.9

Rms.

Avail.

Rms.

Sold
2021
2021
2022
Source: STR - September 2022 Lodging Review
2021
2022
2022
%
Change
%
Change
% Change
Occupancy - YTD September
Average Rate - YTD September
RevPAR - YTD September
Percent Change

To further understand the nature, timing, and degree of the impact of the pandemic and subsequent recovery, we have reviewed the following weekly da ta for the U.S. lodging industry, as published by STR.

October-2022 Supply and Demand Analysis
Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California 53

FIGURE 4-8 NATIONAL OCCUPANCY TRENDS – WEEKLY DATA
-2.8%
20%
40%
60%
80%

J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O Months of the Year
2020 - 2022
2019

FIGURE 4-9 NATIONAL ADR TRENDS – WEEKLY DATA

15.6%
$70
$120
$170

J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S Months of the Year
2020 - 2022
2019

October-2022 Supply and Demand Analysis
Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California 54

FIGURE 4-10 NATIONAL REVPAR TRENDS – WEEKLY DATA

12.5%
$10
$30
$50
$70
$90
$110

J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O Months of the Year
2020 - 2022
2019

STR is an independent research firm that compiles and publishes data on the lodging industry, routinely used by typical hotel buyers. HVS has ordered and analyzed an STR Trend Report of historical supply and demand data for a group of hotels considered applicable to this analysis for the proposed subject hotel. This information is presented in the following table, along with the market -wide occupancy, ADR, and RevPAR.

In response to the travel restrictions and the decline in demand associated with the COVID-19 pandemic, numerous hotels in markets across the nation temporarily suspended operations. During these suspensions, hotels were typically closed to the public, with the majority of staff furloughed; however, key management and maintenance staff were retained to preserve the property and prepare for reopening. The Hampton by Hilton suspended operations because of the COVID-19 pandemic; however, it has since reopened. Our analysis considers the full supply of competitive rooms, inc luding any hotels that may have temporarily suspended operations.

Hi
storical Supply

and
Demand Data

October-2022 Supply and Demand Analysis
Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California 55

FIGURE 4-11 HISTORICAL SUPPLY AND DEMAND TRENDS
Year
Average Daily
Room Count
Available
Room Nights
Change
Occupied
Room Nights
Change
Occupancy
Average
Rate
Change
RevPAR
Change
2009 989 360,858 — 205,218 — 56.9 % $79.48 — $45.20 —
2010 1,026 374,608 3.8 % 221,203 7.8 % 59.0 79.44 (0.1) % 46.91 3.8 % 2011 1,108 404,406 8.0 255,595 15.5 63.2 81.86 3.0 51.73 10.3 2012 1,135 414,153 2.4 288,075 12.7 69.6 86.04 5.1 59.85 15.7 2013 1,112 405,919 (2.0) 282,772 (1.8) 69.7 92.20 7.2 64.23 7.3 2014 1,048 382,565 (5.8) 292,318 3.4 76.4 102.17 10.8 78.07 21.5 2015 1,138 415,370 8.6 326,132 11.6 78.5 105.66 3.4 82.96 6.3 2016 1,137 415,127 (0.1) 334,145 2.5 80.5 112.73 6.7 90.74 9.4 2017 1,193 435,610 4.9 340,877 2.0 78.3 116.15 3.0 90.89 0.2 2018 1,248 455,520 4.6 347,322 1.9 76.2 114.67 (1.3) 87.43 (3.8) 2019 1,248 455,520 0.0 347,032 (0.1) 76.2 115.57 0.8 88.05 0.7 2020 1,163 424,405 (6.8) 248,871 (28.3) 58.6 101.01 (12.6) 59.23 (32.7) 2021 1,217 444,090 4.6 298,368 19.9 67.2 112.93 11.8 75.87 28.1 Year-to-Date Through August
2019 1,248 303,264 — 236,944 — 78.1 % $116.26 — $90.83 — 2020 1,184 287,643 (5.2) % 164,298 (30.7) % 57.1 102.85 (11.5) % 58.74 (35.3) % 2021 1,201 291,834 1.5 199,504 21.4 68.4 109.25 6.2 74.68 27.1 2022 1,248 303,264 3.9 199,834 0.2 65.9 125.99 15.3 83.02 11.2 Average Annual Compounded Change:
2009 – 2019 2.4 % 5.4 % 3.8 % 6.9 %
2009 – 2020 1.5 1.8 2.2 2.5
Competitive
Hotels Included in Sample Class Status Comments
Residence Inn Pasadena Arcadia Upscale Class Primary 120 Jan 1989 Jan 1989 Extended Stay America Los Angeles - Arcadia Economy Class Primary 122 Apr 1998 Apr 1998 Quality Inn Near City Of Hope Midscale Class Secondary 39 Mar 2009 Jan 1994 Extended Stay America Los Angeles - Monrovia Economy Class Primary 123 Apr 2012 May 1998 Home2 Suites by Hilton Azusa Upper Midscale Class Primary 110 Jul 2017 Jul 2017 Courtyard Los Angeles Baldwin Park Upscale Class Secondary 196 Sep 2004 Jun 1989 Comfort Suites Near City Of Industry Los Angeles Upper Midscale Class Secondary 41 Dec 2009 Dec 2009 Holiday Inn West Covina Upper Midscale Class Secondary 135 Sep 2014 Jan 1966 Best Western Plus West Covina Inn Upper Midscale Class Secondary 125 Apr 2011 Jul 1987 Hampton by Hilton Inn Los Angeles/West Covina Upper Midscale Class Secondary 127 Apr 2021 May 1988 S/O: May '20; R/O: April '21 Fairfield Inn & Suites Los Angeles West Covina Upper Midscale Class Secondary 110 Apr 2011 Apr 2011 Total 1,248 S/O: Suspended Operations; R/O: Resumed Operations Year
Opened
Year
Affiliated
Source: STR
Number
of Rooms

October-2022 Supply and Demand Analysis
Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California 56

FIGURE 4-12 HISTORICAL SUPPLY AND DEMAND TRENDS

0.0 10.0

20.0 30.0

40.0 50.0

60.0 70.0

80.0 90.0
0 50,000
100,000
150,000
200,000
250,000
300,000
350,000
400,000
450,000
500,000
2012 2013 2014 2015 2016 2017 2018 2019 2020 2021
Occupancy (%)
Room Nights
Available Room Nights
Occupied Room Nights
Occupancy

It is important to note some limitations of the STR data. Hotels are occasionally added to or removed from the sample; furthermore, not every property reports data in a consistent and timely manner. These factors can influence the overall quality of the information by skewing the results, and these inconsistencies may also cause the STR data to differ from the results of our competitive survey. Nonetheless, STR data provide the best indication of aggregate growth or decline in existing supply and demand; thus, these trends have been considered in our analysis. Opening dates, as available, are presented for each reporting hotel in the previous table.

The STR data for the competitive set reflect a market-wide occupancy level of 2021 in 67.2%, which compares to 58.6% for 2020. The STR data for the competitive set reflect a market-wide ADR level of $112.93 in 2021, which compares to $101.01 For 2020. These occupancy and ADR trends resulted in a RevPAR level of $75.87 in 2021.

During the illustrated historical period, RevPAR generally followed a strengthening trend through 2017, paced by year-over-year increases in both occupancy and ADR.

This improvement in market conditions was driven largely by the strengthening economic conditions, increased popularity in leisure travel to the Los Angeles area,

October-2022 Supply and Demand Analysis
Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California 57

and Baldwin Park's strong healthcare sector. RevPAR declined in 2018 as the market was affected by the entrance of new supply, with the Home2 Suites by Hilton opening mid-year 2017. RevPA R levels recovered in 2019 as ADR increased and occupancy remained stable. In March 2020, the COVID-19 pandemic began to affect the local market, similar to the rest of the nation, resulting in stay -at-home orders, group cancelations, and decreased busines s travel; thus, occupancy declined significantly in 2020. As much of the demand remaining was lower rated in nature, ADR declined in 2020, as well. General improvement has been registered since the low point that year. By year -end 2021, occupancy and ADR h ad recovered a substantial portion of their 2020 losses, gaining traction in the latter half of the year after the wide distribution of vaccines. Year -to-date 2022 data illustrate a slight softening in occupancy as travel patterns begin to normalize; howev er, despite the decrease in demand, rates have continued to improve, registering an approximately $15 increase over the same period in 2021.

The following table summarizes the important operating characteristics of the future primary competitors and the aggregate secondary competitors ( as applicable). This information was compiled from personal interviews, inspections , online resources, and our in-house database of operating and hotel facility data. The room count of each secondary competitor has been weighted based on its assumed degree of competitiveness with the Proposed Extended-Stay Hotel Baldwin Park.

In cases where exact operating data for an individual property (or properties) were not available, we have used these resources, as well as the STR data, to estimate positioning within the market.

SUPPLY

October-2022 Supply and Demand Analysis
Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California 58

FIGURE 4-13 PRIMARY COMPETITORS – OPERATING PERFORMANCE Est. Segmentation Estimated 2019 Estimated 2021
Commercial/ Extended-
Stay
Leisure
Group
Weighted
Annual
Weighted
Annual
Property Occ. RevPAR RevPAR
Occupancy
Penetration
Yield
Penetration
Home2 Suites by Hilton Azusa 110 70 % 15 % 15 % 110 80 - 85 % $125 - $130 $105 - $110 110 85 - 90 % $125 - $130 $110 - $115 120 - 130% 140 - 150% Extended Stay America Los
Angeles Monrovia 123 80 15 5 123 75 - 80 85 - 90 65 - 70 123 75 - 80 90 - 95 70 - 75 110 - 120 90 - 95 Residence Inn by Marriott
Pasadena Arcadia 120 70 15 15 120 80 - 85 180 - 190 150 - 160 120 65 - 70 170 - 180 115 - 120 100 - 110 150 - 160 Extended StayAmerica Los
Angeles Arcadia 122 80 15 5 122 75 - 80 80 - 85 60 - 65 122 75 - 80 90 - 95 70 - 75 110 - 120 90 - 95 Sub-Totals/Averages 475 75 % 15 % 10 % 475 80.4 % $120.58 $96.92 475 78.8 % $117.26 $92 115 % 119.4 % Secondary Competitors 773 66 % 19 % 15 % 618 73.6 % $112.26 $82.64 618 60.2 % $109.46 $66 88 % 85.1 % Totals/Averages 1,248 70 % 17 % 13 % 1,093 76.5 % $116.06 $88.84 1,093 68.3 % $113.37 $77 100 % 100.0 % * Specific occupancy and average rate data were utilized in our analysis, but are presented in ranges in the above table for the purposes of confidentiality.

Average Rate
Commercial/ Extended-
Leisure
Group
Annual
Room
Count
Number
of Rooms
Average Rate
Occ.

Annual
Room
Count

October-2022 Supply and Demand Analysis
Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California 59

FIGURE 4-14 PRIMARY COMPETITORS – FACILITY PROFILES
Property
Number of
Rooms
Year
Opened
Last Major
Renovation(s)
Approx.

Miles To
Subject
Property
Food and Beverage Outlets
Indoor
Meeting
Space (SF)
Meeting Space
per Room
Facilities & Amenities
Home2 Suites by Hilton Azusa 110 2017 — 4.5 0 0.0
229 South Azusa Avenue
Extended Stay America Los Angeles Monrovia 123 1998 — 6.1 0 — 930 South 5th Avenue
Residence Inn by Marriott Pasadena Arcadia 120 1989 2015 6.1 400 3.3 321 East Huntington Drive
Extended StayAmerica Los Angeles Arcadia 122 1998 — 6.3 0 — 401 East Santa Clara Street
Coffee Station Guest Laundry Area, Vending Area(s)
Business Center; Guest Laundry Area; Outdoor
Swimming Pool; Fitness Room; Market Pantry
Coffee Station Guest Laundry Area, Vending Area(s)
Breakfast Dining Area Business Center; Guest Laundry Area; Outdoor Swimming Pool; Fitness Room; Sport Court; Outdoor
Patio & Barbecue Area
Breakfast Dining Area

October-2022 Supply and Demand Analysis
Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California 60

FIGURE 4-15 SECONDARY COMPETITOR(S) – OPERATING PERFORMANCE Est. Segmentation

Estimated 2019 Estimated 2021

Property
Number of
Rooms

Occ.

Average
Rate
RevPAR Occ.

Average
Rate
RevPAR
Courtyard by Marriott Los
Angeles Baldwin Park 196 70 % 15 % 15 % 80 % 157 65 - 70 % $120 - $125 $75 - $80 157 55 - 60 % $115 - $120 $70 - $75 Comfort Suites La Puente 41 65 30 5 80 33 60 - 65 110 - 115 65 - 70 33 55 - 60 105 - 110 60 - 65 Quality Inn Near City of
Hope Monrovia 39 65 30 5 80 31 60 - 65 90 - 95 55 - 60 31 55 - 60 85 - 90 50 - 55 Best Western Plus West
Covina Inn 125 60 30 10 80 100 55 - 60 105 - 110 60 - 65 100 55 - 60 100 - 105 55 - 60 Fairfield by Marriott Los
Angeles West Covina 110 70 15 15 80 88 80 - 85 115 - 120 95 - 100 88 65 - 70 110 - 115 75 - 80 Hampton by Hilton Los
Angeles West Covina 127 70 15 15 80 102 70 - 75 115 - 120 85 - 90 102 30 - 35 125 - 130 40 - 45 Holiday Inn West Covina 135 60 20 20 80 108 95 - 100 105 - 110 100 - 105 108 75 - 80 105 - 110 80 - 85 Totals/Averages 773 66 % 19 % 15 % 80 % 618 73.6 % $112.26 $82.64 618 60.2 % $109.46 $65.85 * Specific occupancy and average rate data was utilized in our analysis, but is presented in ranges in the above table for the purposes of confidentiality.

Total
Competitive
Level
Weighted
Annual
Room
Count
Weighted
Annual
Room
Count
Group
Commercial/
Extended-Stay
Leisure

October-2022 Supply and Demand Analysis
Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California 61

The following map illustrates the locations of the proposed subject hotel and its future competitors.

MAP OF COMPETITION

October-2022 Supply and Demand Analysis
Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California 62

It is important to consider any new hotels that may have an impact on the proposed subject hotel’s operating performance. The hotels that have recently opened, are under construction, or are in the stages of early development (if any) in the Baldwin Park market are noted below. T he list is categorized by the principal submarkets within the city.

FIGURE 4-16 AREA DEVELOPMENT ACTIVITY
Proposed Hotel Name
Hotel Product Tier
Development Stage
Address
Proposed Hotel
0 Proposed TownePlace Suites by Marriott 113 Upper-Midscale Under Construction Q1 '23 102 W Huntington Dr, Monrovia, CA Estimated
Number of
Rooms
Expected
Qtr. & Year
of Opening

Of the hotels listed in the preceding table, we have identified the f ollowing new supply that is expected to have some degree of competitive interaction with the proposed subject hotel based on location, anticipated market orientation and price point, and/or operating profile.

FIGURE 4-17 NEW SUPPLY
Total
Proposed Property
Number of
Rooms

Competitive
Level
Estimated
Opening Date

Developer
Development Stage
Proposed Subject Property 72 100 % 72 January 1, 2025 Zyra Hospitality Early Development Proposed TownePlace Suites by Marriott 113 100 113 January 1, 2023 Tharaldson Under Construction Totals/Averages 185 185
Weighted
Room
Count

A proposed TownePlace Suites by Marriott is under construction on a site approximately five miles from the subject site. This hotel will be similar to the proposed subject hotel in terms of extended -stay product offering and location in the East County submarket; therefore, it is expected to be fully competitive.

In response to the travel restrictions and the decline in demand associated with the COVID-19 pandemic, numerous hotels in markets across the nation temporarily suspended operations. During these suspensions, hotels were typically closed to the public, with the majority of staff furloughed; however, key management and maintenance staff were retained to preserve the property and prepare for reopening. The Hampton by Hilton suspended operations because of the COVID-19 pandemic; however, it has since reopened. Our analysis considers the full supply of competitive rooms, including any hotels that may have temporarily sus pended operations.

Supply Changes

October-2022 Supply and Demand Analysis
Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California 63

While we have taken reasonable steps to investigate proposed hotel projects and their status, due to the nature of real estate development, it is impossible to determine with certainty every hotel that will be opened in the future or what their marketing strategies and effect on the market will be. Depending on the outcome of current and future projects, the future operating potential of the proposed subject hotel may be affected. Future improvement in market conditions will raise the risk of increased competition. Our forthcoming forecast of stabilized occupancy and ADR is intended to reflect such risk.

We have identified various properties that are expected to be competitive to some degree with the proposed subject hotel . We have also investigated potential increases in competitive supply in this Baldwin Park submarket. The Proposed Extended-Stay Hotel Baldwin Park should e nter a dynamic market of varying product types and price points . Next, we will present our forecast for demand change, using the historical supply data presented as a starting point.

The following table presents the most recent trends for the subject hotel market as tracked by HVS. These data pertain to the competitors discussed previously in this section; performance results are estimated, rounded for the competition, and weighted if there are secondary competitors present . In this respect, th e information in the table differs from the previously presented STR data and is consistent with the supply-and-demand analysis developed for this report.

FIGURE 4-18 HISTORICAL MARKET TRENDS
Year
Est. 2019 305,501 — 399,091 — 76.5 % $116.06 — $88.84 — Est. 2020 234,926 (23.1) % 399,091 0.0 % 58.9 100.78 (13.2) % 59.32 (33.2) % Est. 2021 272,432 16.0 399,091 0.0 68.3 113.37 12.5 77.39 30.5 Avg. Annual Compounded
Chg., Est. 2019-Est. 2021: (5.6) % (0.0) % (1.2) % (6.7) % %
Change
Market
Occupancy
Market ADR
%
Change
Room Nights
Available
%
Change
%
Change
Market
RevPAR
Accommodated
Room Nights

For the purpose of demand analysis, the overall market is divided into individual segments based on the nature of travel. Based on our fieldwork, area analysis, and knowledge of the local lodging market, we estimate the 2019 distribution of accommodated-room-night demand as follows.

Supply Conclusion

DEMAND

Demand Analysis

Using Market
Segmentation

October-2022 Supply and Demand Analysis
Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California 64

FIGURE 4-19 BASE-YEAR ACCOMMODATED-ROOM-NIGHT DEMAND
2019 Marketwide
Market Segment
Commercial/ Extended-Stay 214,083 70 % 185,254 68 %
Leisure 53,175 17 59,935 22
Group 38,243 13 27,243 10
Total 305,501 100 % 272,432 100 %
2021 Marketwide
Accommodated
Demand
Percentage
of Total
Accommodated
Demand
Percentage
of Total

FIGURE 4-20 MARKET-WIDE ACCOMMODATED-ROOM-NIGHT DEMAND
68%
22%
10%
Commercial/ Extended-Stay
Leisure
Group

In the base year, the market’s demand mix compri sed commercial/ extended-stay demand, with this segment representing roughly 70% of the accommodated room nights in this Baldwin Park submarket. The leisure segment comprised 17% of the total, with the final portion group in nature, reflecting 13%.

The purpose of segmenting the lodging market is to define each maj or type of demand, identify customer characteristics, and estimate future growth trends .

Starting with an analysis of the local area, three segments were defined as representing the proposed subject hotel ’s lodging market . Various types of economic and demographic data were then evaluated to determine their propensity to reflect changes in hotel demand . Based on this procedure, we forecast the following average annual compounded market-segment growth rates.

October-2022 Supply and Demand Analysis
Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California 65

FIGURE 4-21 AVERAGE ANNUAL COMPOUNDED MARKET-SEGMENT GROWTH RATES Annual Growth Rate
Market Segment
Commercial/ Extended-Stay -4.0 % 23.0 % 5.0 % 5.0 % 1.5 % Leisure -4.0 12.0 5.0 5.0 1.5
Group 0.0 35.0 5.0 5.0 1.5
Base Demand Growth -3.6 % 21.8 % 5.0 % 5.0 % 1.5 %
2022
2023
2024
2025
2026

A table presented earlier in this section illustrated the accommodated -room-night demand in the proposed subject hotel’s competitive market. Because this estimate is based on historical occupancy levels, it includes only those hotel rooms that were used by guests . Latent demand reflects potential room-night demand that has not been realized by t he existing competitive supply , further classified as either unaccommodated demand or induced demand.

Unaccommodated demand refers to individuals who are unable to secure accommodations in the market because all the local hotels are filled. These travelers must defer their trips, settle for less desirable accommodations, or stay in properties located outside the market area. Because this demand did not yield occupied room nights, it is not included in the estimate of historical accommodated- room-night demand. If additional lodging facilities are expected to enter the market, it is reasonable to assume that these guests will be able to secure hotel rooms in the future, and it is therefore necessary to quantify this demand.

Unaccommodated demand is further indicated if the market is at all seasonal, with distinct h igh and low seasons; such seasonality indicates that although year -end occupancy may not average in excess of 70 .0%, the market may sell out certain nights during the year. To evaluate the incidence of unaccommodated demand in the market, we have reviewed the average occupancy by the night of the week for the past twelve months for the competitive set, as reflected in the STR data. This is set forth in the following table.

Latent Demand

Unaccommodated

Demand

October-2022 Supply and Demand Analysis
Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California 66

FIGURE 4-22 OCCUPANCY BY NIGHT OF THE WEEK
Month Sunday Monday Tuesday Wednesday Thursday Friday Saturday Total Month Sep - 21 63.0 % 58.5 % 60.4 % 60.6 % 63.0 % 69.3 % 79.6 % 64.7 % Oct - 21 55.7 57.1 59.4 59.5 64.4 73.3 81.0 64.9
Nov - 21 53.6 54.7 56.8 60.9 66.0 74.9 79.0 63.2
Dec - 21 60.0 59.9 60.6 62.1 67.3 79.4 77.1 66.9
Jan - 22 50.4 54.6 55.2 54.8 56.1 59.2 66.8 56.8
Feb - 22 57.2 61.1 61.1 62.4 65.2 70.8 75.7 64.8
Mar - 22 57.2 61.0 65.1 66.6 66.4 76.1 81.4 67.5
Apr - 22 51.6 56.8 60.9 66.2 68.8 77.5 79.8 66.8
May - 22 56.5 54.6 58.8 62.3 67.2 81.0 86.7 65.8
Jun - 22 58.3 60.5 63.3 63.5 65.4 74.7 82.3 66.7
Jul - 22 66.2 66.3 69.0 68.5 69.8 74.5 82.5 71.3
Aug - 22 58.7 61.7 64.7 64.6 68.9 75.2 81.5 67.5
Average 57.3 % 58.7 % 61.3 % 62.7 % 65.7 % 74.0 % 79.3 % 65.6 % Source: STR

The following table presents our estimate of unaccommodated demand in the subject market.

FIGURE 4-23 UNACCOMMODATED DEMAND ESTIMATE
Market Segment
Commercial/ Extended-Stay 214,083 0.5 % 1,026
Leisure 53,175 0.7 394
Group 38,243 0.5 208
Total 305,501 0.5 % 1,628
Unaccommodated
Demand
Unaccommodated
Room Night Demand
Accommodated Room
Night Demand

Accordingly, we have forecast unaccommodated demand equivalent to 0.5% of the base-year demand, resulting from our analysis of monthly and weekly peak demand and sell-out trends.

Based upon a review of the market dynamics in the proposed subject hotel ’s competitive environment, we have forecast growth rates for each market segment.

Using the calculated potential demand for the market, we have determined market- wide accommodated demand based on the inherent limitations of demand fluctuations and other factors in the market area.

Accommodated
Demand and Market-
wide Occupancy

October-2022 Supply and Demand Analysis
Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California 67

The following table details our projection of lodging demand growth for the subject market, including the total number of occupied room nights and any residual unaccommodated demand in the market.

FIGURE 4-24 FORECAST OF MARKET OCCUPANCY
214,083 185,254 177,844 218,748 229,685 241,170 244,787 Unaccommodated Demand 888 852 1,049 1,101 1,156 1,173
214,083 186,142 178,696 219,796 230,786 242,326 245,960 Growth Rate (13.1) % (4.0) % 23.0 % 5.0 % 5.0 % 1.5 %
53,175 59,935 57,538 64,442 67,664 71,048 72,113
444 426 477 501 526 534
53,175 60,379 57,964 64,920 68,166 71,574 72,647

13.5 % (4.0) % 12.0 % 5.0 % 5.0 % 1.5 %
38,243 27,243 27,243 36,778 38,617 40,548 41,156
148 148 200 210 220 224
38,243 27,391 27,391 36,978 38,827 40,768 41,380
(28.4) % 0.0 % 35.0 % 5.0 % 5.0 % 1.5 %
Base Demand 305,501 272,432 262,625 319,969 335,967 352,765 358,057 Unaccommodated Demand 1,480 1,427 1,726 1,812 1,903 1,931 Total Demand 305,501 273,912 264,052 321,694 337,779 354,668 359,988 less: Residual Demand 1,480 1,427 672 705 0 0
Total Accommodated Demand 305,501 272,432 262,625 321,023 337,074 354,668 359,988 Overall Demand Growth — 16.0 % (3.6) % 22.2 % 5.0 % 5.2 % 1.5 % Market Mix

70.1 % 68.0 % 67.7 % 68.3 % 68.3 % 68.3 % 68.3 %

17.4 22.0 22.0 20.2 20.2 20.2 20.2

12.5 10.0 10.4 11.5 11.5 11.5 11.5
1,093 1,093 1,093 1,093 1,094 1,093 1,093
Propos ed Subject Property
1 72 72 72
Propos ed TownePl a ce Sui tes by Ma rriott
2 113 113 113 113
Available Room Nights per Year 399,091 399,091 399,091 440,336 466,616 466,616 466,616 Nights per Year 365 365 365 365 365 365 365
Total Supply 1,093 1,093 1,093 1,206 1,278 1,278 1,278
Rooms Supply Growth 0.0 % 0.0 % 0.0 % 10.3 % 6.0 % 0.0 % 0.0 % Marketwide Occupancy 76.5 % 68.3 % 65.8 % 72.9 % 72.2 % 76.0 % 77.1 % 1 Opening in January 2024 of the 100% competitive, 72-room Proposed Subject Property 2 Opening in January 2023 of the 100% competitive, 113-room Proposed TownePlace Suites by Marriott Group
Existing Hotel Supply
Proposed Hotels
Totals
Comme rci a l / Exte nde d-Sta y
Leisure
Total Demand
Growth Rate
Group
Base Demand
Unaccommodated Demand
Total Demand
Growth Rate
Unaccommodated Demand
Base Demand
Total Demand
Leisure
Base Demand
Commercial/ Extended-Stay
2021
2022
2023
2024
2025
2026
2019

October-2022 Supply and Demand Analysis
Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California 68

The defined competitive market of hotels experienced a sharp occupancy decline in 2020 and early 2021 because of the severe downturn in travel associated with the COVID-19 pandemic. Occupancy levels in 2022, however, have remained flat from 2021 levels, as tour groups and leisure travelers from Asian feeder markets have been slow to return to this set of competitive hotels. We expect market occupancy to continue to recover ov er the coming years given the ongoing return of many employees to offices, stronger levels of both commercial and leisure travel, and an increase in group gatherings.

October-2022 Description of the Proposed Improvements
Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California 69

5. Description of the Proposed Improvements
The quality of a lodging facility's physical improvements has a direct influence on marketability, attainable occupancy, and average room rate . The design and functionality of the structure can also affect operating efficiency and overall profitability. This section investigates the subject property' s proposed physical improvements and personal property in an effort to determine how they are expected to contribute to attainable cash flows.

The Proposed Extended-Stay Hotel Baldwin Park will be an extended-stay lodging facility containing 72 rentable units. The 4-story property is planned to open on January 1, 2024. The East County of Los Angeles market area currently comprises hotels spanning all price ranges within the limited -service, select-service, and full- service segments. As of the date of thi s report, there are four extended -stay properties that operate in this market; however, a TownePlace Suites by Marriott is under construction in Monrovia. Our study assumes that the proposed subject hotel will operate as a midscale, limited-service, extended-stay hotel that is affiliated with the Extended Stay America Premier Suites brand. Our descriptions of the proposed hotel are sourced from the ownership group, Zyra Hospitality LLC.

RENDERING OF PROPOSED SUBJECT PROPERTY EXTERIOR

Project Overview

October-2022 Description of the Proposed Improvements
Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California 70

Based on information provided by the proposed subject hotel ’s development representatives, the following table summarizes the facilities that are expected to be available at the proposed subject hotel.

FIGURE 5-1 PROPOSED FACILITIES SUMMARY
Guestroom Configuration
King
49 Queen/Queen
19 Accessible (ADA-Compliant Room)
4 Total 72
Amenities & Services
Market Pantry Fitness Room
Guest Laundry Area Lobby Workstation
Vending Area(s)
Infrastructure
Parking Spaces
As Needed
Elevators
Life-Safety Systems
Construction Details
1 Guest
Smoke Detectors
Wood Framing, Poured Concrete
Number of Units

The proposed hotel is a rehabilitation of an existing four -story, former motel building. Upon completion, surface parking will be located around the building.

Other site improvements will include freestanding signage, located at the main entrance to the site, as well as landscaping and sidewalks. Additional signage is expected to be placed on the exterior of the building. The hotel's main entrance will lead directly into the lobby, and the first (ground) floor will house the public areas and the back-of-the-house space. Guestrooms are planned to be located on all floors.

The site and building components are anticipated to be normal for a hot el of this type and should meet the standards for this Baldwin Hills market.

The proposed hotel's coffee station will be located opposite the front desk in the lobby. The furnishings of the space are expected to be of a similar style and finish as lobby and guestroom furnishings. In line with the Extended Stay America brand requirements, the proposed hotel is not expected to offer a daily continental or hot breakfast. The proposed hotel's amenities will include a lobby workstation, a fitness room, a market pantry located adjacent to the front desk, a guest laundry room, and vending areas on sele ct guestroom floors. The hotel will feature studio suites, inclusive of kitchenettes, and the typical in -room amenities associated with the Extended Stay America Premier Suites brand. Guestroom bathrooms will be of a Summary of the
Facilities

October-2022 Description of the Proposed Improvements
Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California 71

standard size, with a shower -in-tub, commode, and single sink with vanity area, featuring a stone countertop. Overall, the hotel's guestrooms and facilities should be appropriate for a property of this type, and we assume that they will meet brand standards.

The hotel is expected to be served by the necessary back -of-the-house space, including an in -house laundry facility and adm inistrative offices. These spaces should be adequate for a hotel of this type and should allow for the efficient operation of the property under competent management.

TYPICAL EXTENDED STAY AMERICA PREMIER SUITES LOBBY

TYPICAL EXTENDED STAY AMERICA PREMIER SUITES DINING AREA

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Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California 72

TYPICAL EXTENDED STAY AMERICA PREMIER SUITES MEETING ROOM

TYPICAL EXTENDED STAY AMERICA PREMIER SUITES GUESTROOM

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Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California 73

FIRST-FLOOR (MAIN LEVEL) PLAN

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Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California 74

GUESTROOM FLOOR PLAN

We assume that the property will be redeveloped according to all pertinent codes and applicable brand standards. Moreover, we assume that renovations will not create any environmental ha zards (such as mold) and that the property will fully comply with the Americans with Disabilities Act.

Our analysis assumes that the hotel will require ongoing upgrades and periodic renovations after its opening in order to maintain its competitive level in this market and to remain compliant with brand st andards. These costs should be adequately funded by the forecasted reserve for replacement, as long as hotel staff employs a successful, ongoing preventive-maintenance program.

A detailed redevelopment budget was not provided by the developer at the time of this report. As such, we have developed our own estimate of the total redevelopment costs associated with redeveloping the existing site improvements (a vacant, four-story, former hotel building) into the proposed extended-stay hotel.

Our estimate of the costs include hard costs, FF&E, soft costs, pre-opening costs, and ADA and
Environmental
Capital Expenditures

Construction Budget

October-2022 Description of the Proposed Improvements
Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California 75

working capital, as well as the developer's fee. Our development cost estimate is supported by reported costs of comparable projects and the annual HVS Development Cost Survey. We recommend that the development team obtain a more detailed development cost estimate from actual construction companies. It is also advised that developers consult more than one source in their hotel development process to more accurately assess the true cost of development.

Overall, the proposed subject property should offer a well -designed, functional layout of support areas and guestrooms. All typical and market -appropriate features and amenities are expected to be included in the hotel's design. We assume that the building will be fully open and operational on the stipulated opening date and will meet all local building codes and brand standards. Furthermore, we assume that the hotel staff will be adequately trained to allow for a successful opening and that pre-marketing efforts will have introduced the product to major local accounts at least six months in advance of the opening date.

Conclusion

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Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California 76

6. Projection of Occupancy and Average Rate
Along with ADR results, the occupancy levels achieved by a hotel are the foundation of the property's financial performance and market value. Most of a lodging facility's other revenue sources (such as food and beverage, other operated departments, and miscellaneous income) are driven by the number of guests, and many expense levels vary with occupancy. To a certain degree, occupancy attainment can be manipulated by management. For example, hotel operators may choose to lower rates in an effort to maximize occupancy. Our forecasts reflect an operating strategy that we believe would be implemented by a typical, professional hotel management team to achieve an optimal mix of occupancy and average rate.

The proposed subject hotel 's occupancy forecast is set forth as follows, with the adjusted projected penetration rates used as a basis for calculating the amount of captured market demand.

Forecast of Subject
Property’s Occupancy

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Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California 77

FIGURE 6-1 FORECAST OF SUBJECT PROPERTY'S OCCUPANCY
Market Segment
Commercial/ Extended-Stay
Demand 230,358 242,326 245,960
Ma rket Sha re 5.6 % 6.1 % 6.2 %
Ca pture 12,938 14,863 15,343
Penetra ti on 100 % 109 % 111 %
Leisure
Demand 67,971 71,574 72,647
Ma rket Sha re 5.4 % 5.9 % 6.0 %
Ca pture 3,669 4,239 4,380
Penetra ti on 96 % 105 % 107 %
Group
Demand 38,745 40,768 41,380
Ma rket Sha re 2.3 % 2.9 % 3.2 %
Ca pture 905 1,181 1,315
Penetra ti on 42 % 51 % 56 %
Total Room Nights Captured 17,513 20,284 21,039
Ava ilable Room Nights 26,208 26,280 26,280
Subject Occupancy 67 % 77 % 80 %
Ma rket-wi de Ava i l a bl e Room Ni ghts 466,616 466,616 466,616 Fair Share 6 % 6 % 6 %
Ma rket-wi de Occupi ed Room Ni ghts 337,074 354,668 359,988 Market Share 5 % 6 % 6 %
Market-wide Occupancy 72 % 76 % 77 %
Total Penetration 93 % 102 % 104 %
2024
2025
2026

Within the commercial/extended -stay segment, the proposed subject hotel’s occupancy penetration is positioned above the market-average level, supported by its proposed all-suite, extended-stay product offering. The proposed subject hotel's occupancy penetration in the leisure segment is positioned above the market - average level; we expect the property's all -suite product offering, i nclusive of in - room kitchenettes, to be popular among transient leisure travelers. Extended -stay hotels are not known for group accommodations; thus, within the group segment, the proposed subject hotel's occupancy penetration is positioned below the market- average level. Furthermore, the proposed hotel will not offer any meeting space.

October-2022 Projection of Occupancy and Average Rate
Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California 78

These positioned segment penetration rates result in the following market segmentation forecast.

FIGURE 6-2 MARKET SEGMENTATION FORECAST – SUBJECT PROPERTY Comme rci a l / Exte nde d-Sta y 74 % 73 % 73 %
Lei s ure 21 21 21
Group 5 6 6
Total 100 % 100 % 100 %
2024
2025
2026

FIGURE 6-3 STABILIZED MARKET SEGMENTATION – SUBJECT PROPERTY 73%
21%
6%
Commercial/ Extended-Stay
Leisure
Group

Based on our analysis of the proposed subject hotel and market area, we have selected a stabilized occupancy level of 78%. The stabilized occupancy is intended to reflect the anticipated results of the property over its remaining economic life given all changes in the life cycle of the hotel. Thus, the stabilized occupancy excludes from consideration any abnormal relationship between supply an d demand, as well as any nonrecurring conditions that may result in unusually high or low occupancies. Although the proposed subject hotel may operate at occupancies above this stabilized level, we believe it equally possible for new

October-2022 Projection of Occupancy and Average Rate
Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California 79

competition and temporary economic downturns to force the occupancy below this selected point of stability.

Although the ADR analysis presented here follows the occupancy projection, these two statistics are highly correlated; in reality, one cannot project occupancy without making specific assumptions regarding ADR. This relationship is best illustrated by revenue per available room (RevPAR), which reflects a property's ability to maximize rooms revenue. The following table summarizes the historical ADR an d RevPAR levels of the proposed subject hotel’s future primary competitors.

FIGURE 6-4 BASE-YEAR ADR AND REVPAR OF THE COMPETITORS
Property
Home2 Suites by Hilton Azusa $125 - $130 111.1 % 85 - 90 % 120 - 130% $110 - $115 140 - 150% Extended Stay America Los Angeles
Monrovia 90 - 95 79.4 75 - 80 110 - 120 70 - 75 90 - 95 Residence Inn by Marriott Pasadena
Arcadia 170 - 180 149.9 65 - 70 100 - 110 115 - 120 150 - 160 Extended StayAmerica Los Angeles
Arcadia 90 - 95 79.4 75 - 80 110 - 120 70 - 75 90 - 95
Average - Primary Competitors $117.26 103.4 % 78.8 % 115.5 % $92.41 119.4 % Average - Secondary Competitors 109.46 96.6 60.2 88.1 65.85 85.1 Overall Average $113.37 100.0 % 68.3 % 100.0 % $77.39 100.0 % .

Subject As If Stabilized (In 2021 Dollars) $110.00 97.0 % 70.6 % 103.4 % $77.63 100.3 % Estimated 2021
Average Room
Rate
Average Room
Rate
Penetration
Rooms Revenue
Per Available
Room (RevPAR)
RevPAR
Penetration
Occupancy
Occupancy
Penetration

We have selected the rate position of $110.00, in base-year dollars (2021), for the proposed subject hotel. We have positioned the proposed subject hotel's stabilized ADR in the 2021 base year in consideration of its new facility, strong brand affiliation, and all -suite extended -stay product offering. Average rates for this competitive market are anticipated to continue the strengthening trend that began in 2021, with the highest growth rate forecast for 2022 given the swift recovery from the particularly low ADRs in the first half of 2021, as indicated by the month - over-month comparisons in the first half of 2022. ADR growth is then anticipated to moderate in the following years. The projected recovery related to the market's ADR Average Rate Analysis

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Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California 80

growth in our forecast is based upon the expectation that commercial, leisure, and group demand will return to the greater Los Angeles County area.

The following table presents the ADR forecast for the market and the proposed subject hotel on a calendar-year basis, as well as the resulting ADR penetration level.

The proposed subject hotel’s projected ADR (as if st abilized) is then fiscalized to correspond with the hotel’s anticipated date of opening for each forecast year .

Discounts of 3% and 1% have been applied to the stabilized room rates projected for the first two years of operation, as would be expected for a new property of this type as it builds its reputation and becomes established in the market.

FIGURE 6-5 ADR FORECAST – MARKET AND PROPOSED SUBJECT PROPERTY Calendar Year 2019 2021 2022 2023 2024 2025 2026 2027 2028 2029 Ma rke t ADR $116.06 $113.37 $125.84 $129.62 $133.51 $137.51 $141.64 $145.89 $150.27 $154.77 Projected Ma rket ADR Growth Ra te — — 11.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% Propos ed Subject Property ADR (As -I f Sta bi l i zed) $110.00 $122.10 $125.76 $129.54 $133.42 $137.42 $141.55 $145.79 $150.17 ADR Growth Rate 11.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% 3.0% Propos ed Subject Sta bi l i zed ADR Pe netra ti on 97% 97% 97% 97% 97% 97% 97% 97% 97% Fiscal Year 2024 2025 2026 2027 2028 2029
Propos ed Subject Property Avera ge Ra te $129.54 $133.42 $137.42 $141.55 $145.79 $150.17 Opening Di scount 3.0% 1.0% 0.0% 0.0% 0.0% 0.0%
Average Rate After Discount $125.65 $132.09 $137.42 $141.55 $145.79 $150.17 Real Average Rate Growth — 5.1% 4.0% 3.0% 3.0% 3.0%
Ma rke t ADR $133.51 $137.51 $141.64 $145.89 $150.27 $154.77 Propos ed Subject ADR Pene tra ti on (After Di s count) 94% 96% 97% 97% 97% 97% ADR Express ed in Base-Yea r Dollars Deflated @ Inflation Rate $110.63 $112.91 $114.05 $114.05 $114.05 $114.05 Historical

The proposed subject hotel’s ADR penetration level is forecast to reach 97% by the stabilized period, consistent with our stabilized ADR positioning. The following occupancies and average rates will be used to project the proposed subject hotel’s rooms revenue; this forecast reflects years beginning on January 1, 2024 , which correspond with our financial projections.

October-2022 Projection of Occupancy and Average Rate
Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California 81

FIGURE 6-6 FORECASTS OF OCCUPANCY AND ADR
Year
2024 67 % $129.54 3.0 % $125.65
2025 77 133.42 1.0 132.09
2026 80 137.42 0.0 137.42
Occupancy
Average Rate
Before Discount
Discount
Average Rate
After Discount

October-2022 Projection of Income and Expense
Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California 82

7. Projection of Income and Expense
In this chapter of our report, we have compiled a forecast of income and expense for the proposed subject hotel. This forecast is based on the facilities program set forth previously, as well as the occupancy and average rate forecast discussed previously.

In order to project future income and expense for the proposed subject hotel , we have included a sample of individual comparable operating statements from our database of hotel statistics . All financial data are presented according to the three most common measures of industry performance: ratio to sales (RTS), amounts per available room (PAR), and amounts per occupied room night (POR). These historical income and expense statements will be used as benchmarks in our forthcoming forecast of income and expense. The proposed subject hotel’s stabilized statement of income and expense, deflated to 2019 dollars, is also presented.

Comparable Operating
Statements

October-2022 Projection of Income and Expense
Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California 83

FIGURE 7-1 COMPARABLE OPERATING STATEMENTS: RATIO TO SALES Comp 1 Comp 2 Comp 3 Comp 4 Comp 5 Subject
Year: 2021 2021 2019 2018 2018 2021
Number of Rooms: 50 to 80 90 to 130 90 to 120 100 to 130 80 to 110 72 Days Open: 365 365 365 365 365 365
Occupancy: 81% 78% 91% 85% 82% 80%
Average Rate: $111 $107 $116 $123 $141 $115
RevPAR: $90 $83 $106 $105 $115 $92

REVENUE
Rooms 98.2 % 99.0 % 97.5 % 98.6 % 99.1 % 98.5 %
Other Operated Departments 0.8 0.6 1.9 0.9 0.9 0.9
Mi s ce l l a ne ous Income 0.9 0.3 0.7 0.5 0.0 0.6
Total 100.0 100.0 100.0 100.0 100.0 100.0
DEPARTMENTAL EXPENSES*
Rooms 24.5 19.9 23.0 23.1 23.6 22.0
Other Operated Departments 60.3 70.3 41.4 53.1 34.2 55.0 Total 24.6 20.1 23.2 23.2 23.7 22.2
DEPARTMENTAL INCOME 75.4 79.9 76.8 76.8 76.3 77.8

UNDISTRIBUTED OPERATING EXPENSES
Administrative & General 6.0 8.0 5.2 7.8 7.6 7.0
Info. and Telecom. Systems 0.8 0.6 0.7 0.7 1.7 0.9
Marketing 4.2 0.0 3.7 6.2 3.9 2.6
Franchise Fee 4.9 15.1 6.0 6.7 7.5 9.9
Property Operations & Maintenance 2.2 4.3 2.5 3.6 5.7 3.5 Utilities 3.4 6.2 2.8 3.2 3.2 3.8
Total 21.5 34.1 20.9 28.2 29.5 27.7
GROSS OPERATING PROFIT 53.9 45.8 55.9 48.6 46.8 50.1
Ma nagement Fee 3.9 5.5 0.0 3.0 2.5 3.0
INCOME BEFORE NON-OPER. INC. & EXP. 50.0 40.3 55.9 45.6 44.4 47.1 EBITDA LESS RESERVE 40.4 % 34.7 % 53.1 % 36.9 % 33.3 % 36.7 % * Departmental expense ratios are expressed as a percentage of departmental revenues Stabilized $

October-2022 Projection of Income and Expense
Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California 84

FIGURE 7-2 COMPARABLE OPERATING STATEMENTS: AMOUNTS PER AVAILABLE ROOM Comp 1 Comp 2 Comp 3 Comp 4 Comp 5 Subject
Year: 2021 2021 2019 2018 2018 2021
Number of Rooms: 50 to 80 90 to 130 90 to 120 100 to 130 80 to 110 72 Days Open: 365 365 365 365 365 365
Occupancy: 81% 78% 91% 85% 82% 80%
Average Rate: $111 $107 $116 $123 $141 $115
RevPAR: $90 $83 $106 $105 $115 $92

REVENUE
Rooms $32,685 $30,429 $38,642 $38,389 $42,036 $33,635
Other Operated Departments 273 191 743 342 384 321
Mi s ce l l a ne ous Income 310 105 265 208 7 190
Total 33,268 30,725 39,650 38,939 42,427 34,146

DEPARTMENTAL EXPENSES
Rooms 8,008 6,044 8,887 8,850 9,903 7,400
Other Operated Departments 165 134 308 181 131 177
Total 8,172 6,179 9,195 9,031 10,034 7,576
DEPARTMENTAL INCOME 25,095 24,547 30,455 29,908 32,393 26,570

UNDISTRIBUTED OPERATING EXPENSES
Administrative & General 1,980 2,466 2,043 3,026 3,235 2,400 Info. and Telecom. Systems 266 175 283 287 707 300
Marketing 1,407 0 1,480 2,417 1,652 900
Franchise Fee 1,634 4,633 2,362 2,595 3,163 3,363
Property Operations & Maintenance 746 1,324 998 1,392 2,398 1,200 Utilities 1,118 1,893 1,106 1,252 1,355 1,300
Total 7,152 10,491 8,272 10,969 12,511 9,463
GROSS OPERATING PROFIT 17,943 14,056 22,183 18,939 19,882 17,107 Ma na gement Fee 1,310 1,682 0 1,168 1,061 1,024
INCOME BEFORE NON-OPER. INC. & EXP. 16,633 12,374 22,183 17,771 18,821 16,082 EBITDA LESS RESERVE $13,453 $10,672 $21,070 $14,363 $14,118 $12,518 Stabilized $

October-2022 Projection of Income and Expense
Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California 85

FIGURE 7-3 COMPARABLE OPERATING STATEMENTS: AMOUNTS PER OCCUPIED ROOM Comp 1 Comp 2 Comp 3 Comp 4 Comp 5 Subject
Year: 2021 2021 2019 2018 2018 2021
Number of Rooms: 50 to 80 90 to 130 90 to 120 100 to 130 80 to 110 72 Days Open: 365 365 365 365 365 365
Occupancy: 81% 78% 91% 85% 82% 80%
Average Rate: $111 $107 $116 $123 $141 $115
RevPAR: $90 $83 $106 $105 $115 $92

REVENUE
Rooms $110.64 $107.16 $115.83 $123.07 $140.55 $115.19
Other Operated Departments 0.92 0.67 2.23 1.10 1.28 1.10 Mi s ce l l a ne ous I ncome 1.05 0.37 0.79 0.67 0.02 0.65 Total 112.61 108.20 118.85 124.83 141.86 116.94

DEPARTMENTAL EXPENSES
Rooms 27.11 21.29 26.64 28.37 33.11 25.34
Other Operated Departments 0.56 0.47 0.92 0.58 0.44 0.61 Total 27.66 21.76 27.56 28.95 33.55 25.95
DEPARTMENTAL INCOME 84.95 86.44 91.29 95.88 108.31 90.99

UNDISTRIBUTED OPERATING EXPENSES
Administrative & General 6.70 8.68 6.12 9.70 10.82 8.22 Info. and Telecom. Systems 0.90 0.62 0.85 0.92 2.36 1.03 Marketing 4.76 0.00 4.44 7.75 5.52 3.08
Franchise Fee 5.53 16.32 7.08 8.32 10.58 11.52
Property Operations & Maintenance 2.52 4.66 2.99 4.46 8.02 4.11 Utilities 3.78 6.67 3.32 4.01 4.53 4.45
Total 24.21 36.95 24.80 35.16 41.83 32.41
GROSS OPERATING PROFIT 60.74 49.50 66.49 60.71 66.48 58.58 Ma na gement Fee 4.43 5.92 0.00 3.74 3.55 3.51
INCOME BEFORE NON-OPER. INC. & EXP. 56.31 43.58 66.49 56.97 62.93 55.08 EBITDA LESS RESERVE $45.54 $37.59 $63.15 $46.04 $47.21 $42.87 Stabilized $

October-2022 Projection of Income and Expense
Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California 86

The comparable statements’ departmental income ranged from 75.4% to 79.9% of total revenue. The comparable properties achieved a gross operating profit ranging from 45.8% to 55.9% of total revenue.

In consideration of the trends in the Consumer Price Index (CPI), inflation factors that directly influence lodging prop erties, projections set forth by economists surveyed, and the Federal Reserve’s target inflation rate, we have applied the underlying inflation rates as reflected in the following table.

FIGURE 7-4 INFLATION ASSUMPTIONS
2021 to 2022 6.0 %
2022 to 2023 3.0
2023 to 2024 3.0
2024 to 2025 3.0
2025 to 2026 3.0
Rate of Inflation
Assumed
Timeframe

Beyond the illustrated year, we have applied a 3.0% annual rate of growth to income and expenses to reflect the longer-term expectation of asset appreciation by typical investors. This position is based on interviews with numerous market participants indicating a distinction in the expectations of near -term cost inflation (i.e., related to labor and supplies) versus long -term income growth that dr ives appreciation.

Any exceptions to the application of the assumed underlying inflation and EBITDA Less Replacement Reserve growth rates are discussed in our write-up of individual income and expense items.

Based on an analysis that will be deta iled throughout this section, we have formulated a forecast of income and expense. The following table presents a detailed forecast through the fifth projection year, including amounts per available room and per occupied room. The second table illustrates our ten-year forecast of income and expense, presented with a lesser degree of detail. The forecasts pertain to years that begin on January 1, 2024, expressed in inflated dollars for each year.

I
nflation
and
Appreciation
Assumptions
Forecast of Revenue
and Expense

October-2022 Projection of Income and Expense
Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California 87

FIGURE 7-5 DETAILED FORECAST OF INCOME AND EXPENSE

2024 (Calendar Year) 2025 Stabilized 2027 2028
Number of Rooms: 72 72 72 72 72
Occupancy: 67% 77% 80% 80% 80%
Average Rate: $125.65 $132.09 $137.42 $141.55 $145.79
RevPAR: $84.19 $101.71 $109.94 $113.24 $116.64
Days Open: 365 365 365 365 365
Occupied Rooms: 17,608 %Gross PAR POR 20,236 %Gross PAR POR 21,024 %Gross PAR POR 21,024 %Gross PAR POR 21,024 %Gross PAR POR

OPERATING REVENUE
Rooms $2,212 98.3 % $30,722 $125.63 $2,673 98.4 % $37,125 $132.09 $2,889 98.5 % $40,125 $137.41 $2,976 98.5 % $41,333 $141.55 $3,065 98.5 % $42,569 $145.79 Other Operated Departments 25 1.1 344 1.41 26 1.0 368 1.31 28 0.9 383 1.31 28 0.9 395 1.35 29 0.9 407 1.39 Miscellaneous Income 15 0.6 203 0.83 16 0.6 217 0.77 16 0.6 226 0.78 17 0.6 233 0.80 17 0.6 240 0.82 Total Operating Revenues 2,251 100.0 31,269 127.86 2,715 100.0 37,710 134.18 2,933 100.0 40,735 139.50 3,021 100.0 41,961 143.70 3,112 100.0 43,216 148.00 DEPARTMENTAL EXPENSES *
Rooms 560 25.3 7,780 31.82 608 22.7 8,442 30.04 636 22.0 8,828 30.23 655 22.0 9,093 31.14 674 22.0 9,366 32.07 Other Operated Departments 14 57.0 196 0.80 15 55.4 204 0.73 15 55.0 211 0.72 16 55.0 217 0.74 16 55.0 224 0.77 Total Expenses 574 25.5 7,976 32.62 623 22.9 8,646 30.76 651 22.2 9,039 30.96 670 22.2 9,310 31.88 690 22.2 9,589 32.84 DEPARTMENTAL INCOME 1,677 74.5 23,293 95.25 2,093 77.1 29,064 103.41 2,282 77.8 31,696 108.55 2,351 77.8 32,651 111.82 2,421 77.8 33,627 115.16

UNDISTRIBUTED OPERATING EXPENSES
Administrative & General 185 8.2 2,574 10.52 198 7.3 2,748 9.78 206 7.0 2,863 9.81 212 7.0 2,949 10.10 219 7.0 3,038 10.40 Info & Telecom Systems 23 1.0 322 1.32 25 0.9 343 1.22 26 0.9 358 1.23 27 0.9 369 1.26 27 0.9 380 1.30 Marketing 69 3.1 965 3.95 74 2.7 1,030 3.67 77 2.6 1,074 3.68 80 2.6 1,106 3.79 82 2.6 1,139 3.90 Franchise Fee 221 9.8 3,072 12.56 267 9.8 3,713 13.21 289 9.9 4,013 13.74 298 9.9 4,133 14.16 307 9.9 4,257 14.58 Prop. Operations & Maint. 74 3.3 1,029 4.21 94 3.5 1,305 4.64 103 3.5 1,432 4.90 106 3.5 1,475 5.05 109 3.5 1,519 5.20 Utilities 100 4.5 1,394 5.70 107 3.9 1,488 5.30 112 3.8 1,551 5.31 115 3.8 1,597 5.47 118 3.8 1,645 5.63 Total Expenses 674 29.9 9,356 38.26 765 28.1 10,627 37.81 813 27.7 11,290 38.66 837 27.7 11,629 39.83 862 27.7 11,978 41.02 GROSS OPERATING PROFIT 1,003 44.6 13,936 56.99 1,327 49.0 18,437 65.60 1,469 50.1 20,406 69.88 1,514 50.1 21,022 71.99 1,559 50.1 21,649 74.14 Management Fee 68 3.0 938 3.84 81 3.0 1,131 4.03 88 3.0 1,222 4.19 91 3.0 1,259 4.31 93 3.0 1,296 4.44 INCOME BEFORE NON-OPR. INC. & EXP. 936 41.6 12,998 53.15 1,246 46.0 17,305 61.57 1,381 47.1 19,184 65.70 1,423 47.1 19,763 67.68 1,465 47.1 20,353 69.70

NON-OPERATING INCOME & EXPENSE
Property Taxes 140 6.2 1,948 7.97 143 5.3 1,987 7.07 146 5.0 2,027 6.94 149 4.9 2,067 7.08 152 4.9 2,109 7.22 Insurance 40 1.8 562 2.30 42 1.5 579 2.06 43 1.5 597 2.04 44 1.5 614 2.10 46 1.5 633 2.17 Total Expenses 181 8.0 2,510 10.26 185 6.8 2,566 9.13 189 6.5 2,623 8.98 193 6.4 2,682 9.18 197 6.4 2,741 9.39 EBITDA 755 33.6 10,488 42.89 1,061 39.2 14,739 52.44 1,192 40.6 16,561 56.71 1,230 40.7 17,081 58.50 1,268 40.7 17,611 60.31 Reserve for Replacement 45 2.0 625 2.56 81 3.0 1,131 4.03 117 4.0 1,629 5.58 121 4.0 1,678 5.75 124 4.0 1,729 5.92 EBITDA LESS RESERVE $710 31.6 % $9,863 $40.33 $980 36.2 % $13,608 $48.42 $1,075 36.6 % $14,931 $51.13 $1,109 36.7 % $15,403 $52.75 $1,144 36.7 % $15,883 $54.39 *Departmental expenses a re expressed as a percenta ge of depa rtmenta l revenues.

October-2022 Projection of Income and Expense
Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California 88

FIGURE 7-6 TEN-YEAR FORECAST OF INCOME AND EXPENSE
2024 2025 2026 2027 2028 2029 2030 2031 2032 2033
Number of Rooms: 72 72 72 72 72 72 72 72 72 72
Occupied Rooms: 17,608 20,236 21,024 21,024 21,024 21,024 21,024 21,024 21,024 21,024 Occupancy: 67% 77% 80% 80% 80% 80% 80% 80% 80% 80%
Average Rate: $125.65 % of $132.09 % of $137.42 % of $141.55 % of $145.79 % of $150.17 % of $154.67 % of $159.31 % of $164.09 % of $169.01 RevPAR: $84.19 Gross $101.71 Gross $109.94 Gross $113.24 Gross $116.64 Gross $120.13 Gross $123.74 Gross $127.45 Gross $131.27 Gross $135.21

OPERATING REVENUE
Rooms $2,212 98.3
%
$2,673 98.4 % $2,889 98.5
%
$2,976 98.5
%
$3,065 98.5
%
$3,157 98.5 % $3,252 98.5
%
$3,349 98.5
%
$3,450 98.5 % $3,553 98.5
%
Other Operated Departments 25 1.1 26 1.0 28 0.9 28 0.9 29 0.9 30 0.9 31 0.9 32 0.9 33 0.9 34 0.9 Miscellaneous Income 15 0.6 16 0.6 16 0.6 17 0.6 17 0.6 18 0.6 18 0.6 19 0.6 19 0.6 20 0.6 Tota l Opera ting Revenues 2,251 100.0 2,715 100.0 2,933 100.0 3,021 100.0 3,112 100.0 3,205 100.0 3,301 100.0 3,400 100.0 3,502 100.0 3,607 100.0 DEPARTMENTAL EXPENSES *
Rooms 560 25.3 608 22.7 636 22.0 655 22.0 674 22.0 695 22.0 715 22.0 737 22.0 759 22.0 782 22.0 Other Operated Departments 14 57.0 15 55.4 15 55.0 16 55.0 16 55.0 17 55.0 17 55.0 18 55.0 18 55.0 19 55.0 Total Expens es 574 25.5 623 22.9 651 22.2 670 22.2 690 22.2 711 22.2 732 22.2 754 22.2 777 22.2 800 22.2 DEPARTMENTAL INCOME 1,677 74.5 2,093 77.1 2,282 77.8 2,351 77.8 2,421 77.8 2,494 77.8 2,569 77.8 2,645 77.8 2,725 77.8 2,807 77.8

UNDISTRIBUTED OPERATING EXPENSES
Administrative & General 185 8.2 198 7.3 206 7.0 212 7.0 219 7.0 225 7.0 232 7.0 239 7.0 246 7.0 254 7.0 Info & Telecom Systems 23 1.0 25 0.9 26 0.9 27 0.9 27 0.9 28 0.9 29 0.9 30 0.9 31 0.9 32 0.9 Marketing 69 3.1 74 2.7 77 2.6 80 2.6 82 2.6 84 2.6 87 2.6 90 2.6 92 2.6 95 2.6 Franchise Fee 221 9.8 267 9.8 289 9.9 298 9.9 307 9.9 316 9.9 325 9.9 335 9.9 345 9.9 355 9.9 Prop. Operations & Maint. 74 3.3 94 3.5 103 3.5 106 3.5 109 3.5 113 3.5 116 3.5 119 3.5 123 3.5 127 3.5 Utilities 100 4.5 107 3.9 112 3.8 115 3.8 118 3.8 122 3.8 126 3.8 129 3.8 133 3.8 137 3.8 Total Expens es 674 29.9 765 28.1 813 27.7 837 27.7 862 27.7 888 27.7 915 27.7 942 27.7 971 27.7 1,000 27.7 GROSS OPERATING PROFIT 1,003 44.6 1,327 49.0 1,469 50.1 1,514 50.1 1,559 50.1 1,606 50.1 1,654 50.1 1,703 50.1 1,755 50.1 1,807 50.1 Management Fee 68 3.0 81 3.0 88 3.0 91 3.0 93 3.0 96 3.0 99 3.0 102 3.0 105 3.0 108 3.0 INCOME BEFORE NON-OPR. INC. & EXP. 936 41.6 1,246 46.0 1,381 47.1 1,423 47.1 1,465 47.1 1,509 47.1 1,555 47.1 1,601 47.1 1,650 47.1 1,699 47.1

NON-OPERATING INCOME & EXPENSE
Property Taxes 140 6.2 143 5.3 146 5.0 149 4.9 152 4.9 155 4.8 158 4.8 161 4.7 164 4.7 168 4.6 Insurance 40 1.8 42 1.5 43 1.5 44 1.5 46 1.5 47 1.5 48 1.5 50 1.5 51 1.5 53 1.5 Total Expens es 181 8.0 185 6.8 189 6.5 193 6.4 197 6.4 202 6.3 206 6.3 211 6.2 216 6.2 220 6.1 EBITDA 755 33.6 1,061 39.2 1,192 40.6 1,230 40.7 1,268 40.7 1,308 40.8 1,349 40.8 1,390 40.9 1,434 40.9 1,478 41.0 Reserve for Replacement 45 2.0 81 3.0 117 4.0 121 4.0 124 4.0 128 4.0 132 4.0 136 4.0 140 4.0 144 4.0 EBITDA LESS RESERVE $710 31.6
%
$980 36.2 % $1,075 36.6
%
$1,109 36.7
%
$1,144 36.7
%
$1,179 36.8 % $1,217 36.8
%
$1,254 36.9
%
$1,294 36.9 % $1,334 37.0
%
0 0
0 0
0 0
0 0
0 0
% of
Gross

October-2022 Projection of Income and Expense
Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California We anticipate that it will take three years for the proposed subject hotel to reach a stabilized level of operation . Each revenue and expense item has been forecast based upon our review of the proposed subject hotel 's operating budget and comparable income and expense statements . The forecast is based upon calendar years beginning January 1, 2024, expressed in inflated dollars for each year.

Revenues associated with the proposed subject hotel's other operated departments and miscellaneous income category have been forecast to reflect the hotel's planned facilities and amenities, including a market pantry, guest laundry room, and vending areas. Expense levels fall within a range of reasonableness given the provide d comparable operating statements; furthermore, franchise and management fees are set forth in accordance with our assumptions provided earlier in our report.

Real estate in the state of California is assessed at 100% of market value upon the sale, expansion, or new construction of a property. Once established, t he assessed value of a property can increase by no more than 2.0% per year, according to state law. A reassessment is triggered by the sale, expansion, or improvement of a property. Because this analysis is predicated upon a hypothetical sale, we have calculated the first year’s property tax burden based on the estimated fee -simple market value of the subject property determined by our analysis. Real and personal property are taxed at the same rate. Property taxes are “stepped up” upon the assumed sale of t he hotel at the end of the tenth year by loading the terminal capitalization rate with the tax rate.

In most states, the comparison of a hotel’s assessed value with that of comparable hotels in the same taxing jurisdiction can provide insight into whether or not the property is fairly assessed. The assessed value of the land and improvements is divided by the hotel’s number of rooms to provide a unit of comparison with other hotels. This is a useful tool in most states, where properties are periodically reassessed to market value. However, in California, the comparison of assessed values is generally irrel evant due to Proposition 13, enacted in 1978, which removed the relationship between a property’s assessed value and its market value.

Under Proposition 13, a property is reassessed upon sale to market value, which is generally presumed to be the sales price; thereafter, the assessed value is increased at a maximum of 2% per year. Trends in appreciation and depreciation caused by market fluctuations are not reflected in a property’s assessed value in California, unless there is a sales transaction. Thus, co mparable hotels in California can have markedly different assessed values, depending upon when the last sales transaction occurred. For this reason, we have not researched the assessed values of comparable hotels to assess the reasonableness of the subject property’s assessed value. The following table details the subject property's assessment history.

Property Taxes

October-2022 Projection of Income and Expense
Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California Tax rates are based on the city and county budgets, which c hange annually. The most recent tax rate in this jurisdiction was reported at 1.13110%. The following table shows changes in the tax rate during the last several years.

FIGURE 7-7 COUNTY TAX RATES
Real Property
Year
2021 1.13110
Tax Rate
Source: Los Angeles County
Assessors Office

Based on state law and the current tax rate, the proposed subject property’s projected property tax expense levels are calculated as follows.

FIGURE 7-8 SUBJECT PROPERTY TAX CALCULATION
$12,400,000 x $140,256
Estimated Market Value of
Tax Rate
First Year's

1.13%

Tax payments are due twice yearly. We estimate that property taxes for the Proposed Extended-Stay Hotel Baldwin Park will equal approximately $140,256 in the first forecast year of our projection period, increasing by 2.0% annually thereafter, the maximum allowed by state law.

In conclusion, our analysis reflects a profitable operation, with net income expected to total 36.7% of total revenue by the stabilized year . The stabilized total revenue comprises primarily rooms and food and beverage revenue, with a secondary portion derived from other income sources. On the cost side, departmental expenses total 22.2% of revenue by the stabilized year, while undistributed operating expenses t otal 27.7% of total revenues; this assumes that the property will be operated competently by a well -known hotel operator . After a 3.0% of total revenues management fee, and 6.4% of total revenues in fixed expenses, a net income ratio of 36.7% is forecast by the stabilized year.

Conclusion

October-2022 Feasibility Analysis
Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California

8. Feasibility Analysis
Return on investment can be defined as the future benefits of an income-producing property relative to its acquisition or construction cost. The first step in performing a return-on-investment analysis is to determine the amount to be initially invested.

For a proposed property, this amount is most likely to be the deve lopment cost of the hotel. Based on the total development cost, the individual investor will utilize a return-on-investment analysis to determine if the future cash flow from a current cash outlay meets his or her own investment criteria and at what level above or below this amount such an outlay exceeds or fails to meet these criteria.

As an individual or company considering investment in hotel real estate, the decision to use one’s own cash, an equity partner's capital, or lender financing will be an internal one. Because hotels typically require a substantial investment, only the largest investors and hotel companies generally have the means to purchase properties with all cash. We would anticipate the involvement of some financing by a third party for th e typical investor or for those who may be entering the market for hotel acquisitions at this time. In lev eraged acquisitions and developments where investors typically purchase or build upon real estate with a small amount of equity cash (20% to 50%) and a large amount of mortgage financing (50% to 80%), it is important for the equity investor to acknowledge the return requirements of the debt participant (mortgagee), as well as his or her own return requirements.

Therefore, we will begin our rate -of-return analysis by reviewing the debt requirements of typical hotel mortgagees.

The process of converting the projected income stream into an estimate of value via the DCF method is described as follows.

1. An appropriate discount rate is selected to apply to the projected net income before debt service. This rate reflects the " free and clear" internal rate of return to an all-cash purchaser or a blended rate of debt and equity return requirements. The discount rate takes into consideration the degree of perceived risk, anticipated income growth, market attitudes, and rates of return on other investment alternatives, as well as the availability and cost of financing. The discount rate is chosen by reviewing sales transactions and investor surveys and interviewing market participants.

2. A reversionary value reflecting the sales price of the property at the end of the ten-year holding period is calculated by capitalizing the eleventh -year net income by the terminal capitalization rate and deducting typical brokerage and legal fees.

Discounted Cash Flow
Analysis

October-2022 Feasibility Analysis
Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California

3. Each year's forecasted net income before debt service and depreciation and the reversionary sales proceeds at the end of the ten-year holding period are converted to a present value by multiplying the cash flow by the chosen discount rate for that year in the forecast. The sum of the discounted cash flows equates to the value of the subject property.

The following chart summarizes the averages presented for discount rates in various investor surveys during the past decade.

FIGURE 8-1 HISTORICAL TRENDS OF DISCOUNT RATES

7.0 8.0

9.0 10.0

11.0 12.0

13.0 2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
Discount Rate (%)
PWC - Limited-Service Hotels
PWC - Select-Service Hotels
HVS Broker Survey - Limited-Service/Economy Hotels
HVS Broker Survey - Select-Service Hotels
USRC - Limited-Service Hotels
Situs RERC - Second-Tier Hotels
Situs RERC - Third-Tier Hotels

October-2022 Feasibility Analysis
Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California FIGURE 8-2 OVERALL DISCOUNT RATES DERIVED FROM SALES AND INVESTOR SURVEYS Source Data Point Range Average Data Point Range Average HVS Hotel Sales - Full-Service & Luxury 7.6% - 12.5% 10.1% 7.6% - 11.9% 9.6% HVS Hotel Sales - Select-Service & Extended-Stay 8.3% - 12.7% 10.6% 9.2% - 12.7% 10.6% HVS Hotel Sales - Limited-Service 10% - 13.9% 11.6% 9.6% - 13.4% 11.1% HVS Brokers Survey
Luxury & Upper Upscale Hotels 7.0% - 12.0% 9.4% 8.5% - 10.0% 9.7% Full-Service Hotels 8.0% - 15.0% 10.7% 9.0% - 11.0% 10.1% Select-Service Hotels 8.0% - 18.0% 11.0% 9.5% - 12.0% 10.3% Limited-Service & Economy Hotels 9.0% - 20.0% 11.8% 10.0% - 12.5% 10.8% PWC Real Estate Investor Survey
Luxury Hotels 6.25% - 12.0% 9.3% 6.0% - 11.0% 9.3%
Full-Service Hotels 8.5% - 11.0% 10.0% 8.0% - 12.0% 10.0% Select-Service Hotels 8.0% - 12.0% 10.0% 9.0% - 13.5% 11.0% Limited-Service Hotels 7.5% - 12.0% 10.0% 9.0% - 13.0% 10.7% USRC Hotel Investment Survey
Full-Service Hotels 7.0% - 10.5% 9.8% 9.5% - 11.5% 10.3% Limited-Service Hotels 7.5% - 11.0% 10.5% 10.4% - 11.5% 10.9% Situs RERC Real Estate Report
First Tier Hotels 8.0% - 11.0% 9.4% 7.5% - 12.0% 10.0%
Second Tier Hotels 6.5% - 13.5% 10.1% 9.3% - 14.3% 11.2% Third Tier Hotels 9.5% - 13.5% 11.0% 9.5% - 15.0% 12.1% Winter 2020 Survey
Mid-Year 2022 Survey
Fall 2019 Survey
Spring 2022 Survey
1st Quarter 2020 Survey
3rd Quarter 2022 Survey
Pre-COVID
Current
1st Quarter 2020 Report
3rd Quarter 2022 Report

We note that the averages illust rated in the previous table are derived from wide arrays of data points, and a range of reasonableness extends both lower and higher than the indicated data points. Based on our review of these surveys and sales transactions (see total property yields show n in the table titled Sample of Hotels Sold), as well as our interviews of market participants, we have selected a discount rate of 8.25% for our analysis.

Inherent in this valuation process is the assumption of a sale at the end of the ten - year holding period. The estimated reversionary sale price as of that date is calculated by capitalizing the projected eleventh -year net income by an overall terminal capitalization rate. An allocation for the selling expenses is deducted from this sale price, and the net proceeds to the equity interest (also known as the equity residual) are calculated by deducting the outstanding mortgage balance from the reversion.

Terminal Capitalization
Rate

October-2022 Feasibility Analysis
Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California We have reviewed several recent investor surveys. The following chart summarizes the averages presented for terminal capitalization rates in various investor surveys during the past decade.

FIGURE 8-3 HISTORICAL TRENDS OF TERMINAL CAPITALIZATION RATES

6.0 7.0

8.0 9.0

10.0 11.0

12.0 13.0
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
Terminal Cap Rate (%)
PWC - Limited-Service Hotels
PWC - Select-Service Hotels
HVS Broker Survey - Limited-Service/Economy Hotels
HVS Broker Survey - Select-Service Hotels
USRC - Limited-Service Hotels
Situs RERC - Second-Tier Hotels
Situs RERC - Third-Tier Hotels

October-2022 Feasibility Analysis
Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California FIGURE 8-4 TERMINAL CAPITALIZATION RATES DERIVED FROM INVESTOR SURVEYS Source Data Point Range Average Data Point Range Average HVS Brokers Survey
Luxury & Upper Upscale Hotels 5.5% - 10.0% 7.8% 4.0% - 8.0% 6.8% Full-Service Hotels 7.5% - 10.0% 8.4% 5.5% - 9.0% 7.5%
Select-Service Hotels 7.5% - 12.0% 8.8% 5.0% - 9.0% 7.9% Limited-Service & Economy Hotels 7.5% - 12.0% 9.3% 8.0% - 9.5% 8.6% PWC Real Estate Investor Survey
Luxury Hotels 5.5% - 9.5% 7.5% 6.0% - 11.0% 9.3%
Full-Service Hotels 7.0% - 10.0% 8.3% 8.0% - 12.0% 10.0% Select-Service Hotels 7.0% - 10.0% 8.4% 9.0% - 13.5% 11.0% Limited-Service Hotels 7.75% - 12.0% 9.3% 9.0% - 13.0% 10.7% USRC Hotel Investment Survey
Full-Service Hotels 5.5% - 8.5% 7.6% 6.5% - 8.5% 7.9%
Limited-Service Hotels 6.5% - 9.3% 8.6% 7.5% - 9.9% 8.7% Situs RERC Real Estate Report
First Tier Hotels 6.8% - 9.5% 8.7% 7.5% - 10.5% 9.0%
Second Tier Hotels 7.3% - 11.5% 9.1% 7.3% - 13.5% 10.1% Third Tier Hotels 8.0% - 12.0% 10.2% 7.8% - 14.0% 10.8% 1st Quarter 2020 Survey
3rd Quarter 2022 Survey
Mid-Year 2022 Survey
3rd Quarter 2022 Report
1st Quarter 2020 Report
Winter 2020 Survey
Fall 2019 Survey
Spring 2022 Survey
Pre-COVID
Current

Furthermore, we have reviewed regional capitalization rates presented in the following table.

FIGURE 8-5 REGIONAL TERMINAL CAPITALIZATION RATES
Property Location Sale Date
Year
Opened
Royalty Inn Bellflower Bellflower, CA Jun-22 $11,175,000 63 $177,381 9.5% 1984 Element Palmdale Palmdale, CA Jun-22 32,800,000 123 266,667 11.3% 2017 Home2 Suites by Hilton Victorville Victorville, CA Feb-22 26,350,000 105 250,952 7.9% 2018 Country Inn & Suites San Bernardino Redlands Redlands, CA Feb-22 13,300,000 79 168,354 8.2% 2006 Home2 Suites by Hilton Barstow Barstow, CA Jan-22 22,500,000 106 212,264 7.4% 2020 Hyatt Place Glendale Los Angeles Glendale, CA Nov-21 44,232,500 179 247,109 10.1% 2018 Residence Inn by Marriott Cypress Los Alamitos Los Alamitos, CA Sep-21 42,193,992 155 272,219 6.8% 2002 Hilton Garden Inn Arcadia Pasadena Arcadia, CA Feb-20 20,165,000 124 162,621 8.4% 1999 SpringHill Suites by Marriott Corona Riverside Corona, CA Jul-19 21,000,000 130 161,538 8.4% 2009 Residence Inn by Marriott Anaheim Hills Yorba Linda Anaheim Hills, CA Jan-19 25,333,333 128 197,917 8.0% 2002 Price
Rooms
Price/Rm
Overall
Cap

For purposes of this analysis, we have applied a terminal capitalization rate of

7.75%.

October-2022 Feasibility Analysis
Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California Utilizing the discount rate and terminal capitalization rat e set forth, the DCF procedure is summarized as follows. Due to the subject property's California location and the higher property tax implications upon the sale at the end of the hold, the terminal capitalization rate is loaded with the tax rate and is applied to the NOI estimate prior to property taxes.

FIGURE 8-6 “WHEN COMPLETE” DISCOUNTED CASH FLOW ANALYSIS 3 10.0 %

10.1 3.0
Discounted
Year 10.0 Cash Flow
2024 $850,370 $140,256 $710,113 0.90909 $645,557
2025
1,122,833
143,062
979,772

0.82645
809,729
2026
1,220,967
145,923
1,075,044

0.75131
807,696
2027 1,257,855 148,841 1,109,014 0.68301 757,471
2028 1,295,371 151,818 1,143,553 0.62092 710,056
2029 1,334,271 154,854 1,179,417 0.56447 665,750
2030 1,374,299 157,951 1,216,348 0.51316 624,179
2031 1,415,528 161,111 1,254,418 0.46651 585,195
2032 1,457,994 164,333 1,293,661 0.42410 548,639
2033 1,501,734 167,619 16,143,783 * 0.38554 6,224,127
Estimated Market Value $12,378,400
(SAY) $12,400,000
Per Room 170,000
Reversion Analysis
$1,546,786
Ca pi ta l i za ti on Ra te (l oa de d wi th ta x ra te ) 10.1% Total Sales Proceeds $15,267,699
Less: Transaction Costs @ 3.0% 458,031
Net Sales Proceeds (Say) 14,809,668
11th Year's EBITDA Les s Res erves (not
*10th year NOI after taxes, plus the reversionary value.

Stabilized Year
Discount Rate
Loaded Terminal Cap
Transaction Costs
Net Income,
Before Taxes
Property
Taxes
Net Income,
After Taxes
Discount Factor

October-2022 Feasibility Analysis
Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California FIGURE 8-7 “WHEN STABILIZED” DISCOUNTED CASH FLOW ANALYSIS 3 10.0 %

10.1 3.0
Discounted
Year 10.0 Cash Flow
2026 $1,220,967 $152,699 $1,068,268 0.90909 $971,153
2027 1,257,596 155,752 1,101,843 0.82645 910,614
2028 1,295,324 158,868 1,136,456 0.75131 853,836
2029 1,334,183 162,045 1,172,138 0.68301 800,586
2030 1,374,209 165,286 1,208,923 0.62092 750,646
2031 1,415,435 168,591 1,246,844 0.56447 703,811
2032 1,457,898 171,963 1,285,935 0.51316 659,888
2033 1,501,635 175,403 1,326,233 0.46651 618,697
2034 1,546,684 178,911 1,367,774 0.42410 580,069
2035 1,593,085 182,489 17,121,140 * 0.38554 6,600,941
Estimated Market Value $13,450,242
(SAY) $13,500,000
Per Room 190,000
Reversion Analysis
11th Year's EBITDA Les s Res erves (not includi ng taxes ) $1,640,877
Ca pi ta l i za ti on Ra te (l oa de d wi th ta x ra te ) 10.1% Total Sales Proceeds $16,196,437
Less: Transaction Costs @ 3.0% 485,893
Net Sales Proceeds (Say) 15,710,544
Property
Taxes
Net Income,
After Taxes
*10th year NOI after taxes, plus the reversionary value.

Stabilized Year
Discount Rate
Loaded Terminal Cap
Transaction Costs
Net Income,
Before Taxes
Discount Factor

A detailed redevelopment budget was not provided by the developer at the time of this report. As such, we have develo ped our own estimate of the total redevelopment costs associated with redeveloping the existing site improvements (a vacant, four-story, former hotel building) into the proposed extended-stay hotel.

Our estimate of the costs include hard costs, FF&E, soft costs, pre-opening costs, and working capital, as well as the developer's fee. Our development cost estimate is supported by reported costs of comparable projects and the annual HVS Development Cost Survey. We recommend that the development team obtain a more detailed development cost estimate from actual construction companies. It is also Development Cost
Estimate

October-2022 Feasibility Analysis
Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California advised that developers consult more than one source in their hotel development process to more accurately assess the true cost of development.

As a basis for estimating the redevelopment costs, we have used a hotel development cost survey conducted by HVS. The survey presents the range of per - room costs associated with various c omponents of hotel development, including improvements, furniture, and equipment; pre -opening expenses; and operating capital. Statistics are compiled for budget hotels, midscale hotels with and without food and beverage, extended-stay hotels, full-service hotels, and luxury hotels and resorts. The results of the development cost survey are presented in the following table.

October-2022 Feasibility Analysis
Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California 99

FIGURE 8-1 HOTEL DEVELOPMENT COST SURVEY (AMOUNTS PER ROOM) Total
Limited-Service Hotels
Average $14,168 $96,154 $14,439 $14,968 $2,938 $4,243 $146,910 Median $9,787 $91,024 $10,750 $13,574 $2,153 $4,465 $131,752 % of Total* 10% 68% 10% 10% 2% 1% 100%
Extended-Stay Hotels (Midscale)
Average $20,686 $95,735 $16,794 $14,414 $2,889 $3,984 $154,502 Median $16,822 $80,719 $12,662 $14,414 $2,737 $3,721 $131,076 % of Total* 14% 63% 11% 9% 2% 2% 100%
Extended-Stay Hotels (Upscale)
Average $17,377 $129,130 $28,200 $19,932 $4,640 $6,699 $205,979 Median $14,593 $125,090 $21,366 $20,320 $3,040 $7,212 $191,620 % of Total* 8% 64% 14% 10% 2% 2% 100%
Dual-Branded Hotels
Average $25,354 $152,378 $29,792 $22,659 $8,004 $7,051 $245,238 Median $19,642 $129,429 $27,605 $23,148 $7,212 $6,818 $213,854 % of Total* 9% 64% 12% 10% 3% 2% 100%
Select-Service Hotels
Average $20,950 $181,786 $25,041 $26,189 $5,512 $9,824 $269,302 Median $11,486 $138,384 $23,066 $23,221 $4,500 $8,502 $209,158 % of Total* 8% 68% 9% 10% 2% 3% 100%
Full-Service Hotels
Average $51,397 $291,937 $64,437 $38,097 $16,494 $14,696 $477,058 Median $28,090 $220,976 $51,134 $32,584 $13,596 $14,792 $361,172 % of Total* 7% 66% 13% 8% 3% 2% 100%
Luxury Hotels
Average $81,329 $497,468 $129,875 $52,459 $26,333 $17,546 $805,010 Median $47,508 $482,319 $94,194 $45,900 $21,868 $20,490 $712,279 % of Total* 10% 63% 16% 7% 3% 2% 100%
Redevelopment Projects
Average $45,302 $195,436 $49,860 $31,468 $10,787 $15,878 $348,731 Median $22,165 $145,020 $33,862 $23,046 $7,166 $13,208 $244,467 % of Total* 13% 58% 15% 9% 3% 3% 100%
Total
Average $34,509 $201,739 $44,512 $27,672 $10,285 $11,094 $329,810 Median $15,101 $116,792 $21,254 $19,551 $3,103 $813 $176,613 % of Total* 9% 64% 14% 9% 3% 2% 100%
*The percentage of total is calculated based on the total sample of all budgets.

Land Building and Site
Improvements Soft Costs FF&E Pre-Opening and
Working Capital Developer Fee

October-2022 Feasibility Analysis
Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California In addition to the survey data, we have also reviewed a selectio n of cost budgets from developers of comparable redevelopment projects , as illustrated in the following table. We note that given the individuality and variances associated with hotel redevelopment projects, such as the scope of redevelopment needed, profi le and quality level of the hotel, these four comparable redevelopment projects could have differences from the proposed subject hotel.

FIGURE 8-2 COMPARABLE COST BUDGETS
Item
Building $117,490 58.8 % $98,370 58.8 % $41,172 59.9 % $68,027 66.7 % Soft Costs 32,575 16.3 35,018 20.9 10,572 15.4 13,946 13.7 Furniture, Fixtures, & Equipment 15,229 7.6 22,724 13.6 17,017 24.7 20,068 19.7 Pre-Opening Costs & Working Capital 8,333 4.2 11,129 6.7 0 0.0 0 0.0 Developer Fee (if Applicable) 26,286 13.1 0 0.0 0 0.0 0 0.0 Total (Excluding Site Cost)
$199,913

78.3 %
$167,241

64.7 %
$68,761

85.1 %
$102,041

70.3 %
Approx. 150 Rooms
Approx. 30 Rooms
Approx. 30 Rooms
Approx. 150 Rooms
Per Room
% of Total
Per Room
% of Total
Per Room
% of Total
Per Room
% of Total
Primary, TX
Redevelopment
Redevelopment
Redevelopment
Redevelopment
Comp #1
Comp #2
Comp #3
Comp #4
Tertiary, CA
Secondary, CA
Tertiary, CA

Building and site improvements include all buildings and other relatively permanent structures located on, or attached to, the subject parcel. The cost of the improvements includes costs of materials, fees, and labor to construct the subject property’s improvements. We note that the proposed su bject property is a redevelopment of an existing, disused motel building; thus, we would not expect certain hard costs such as the building frame to be factored into the redevelopment cost. We estimate the redevelopment cost of the proposed subject propert y's improvements to be roughly $80,000 per room, or a total of $5,760,000.

Furniture, fixtures, and equipment (FF&E) include all non -permanent, removable items at the subject property, such as guestroom furnishings, kitchen equipment, and items of décor. The cost of the FF&E, along with all fees associated with the installation of such items, comprise the total cost of FF&E. Based on our understanding of t he expected quality of furnishings, we have estimate the development cost of the proposed subject property's FF&E (as if new) at approximately $16,000 per room, or a total of $1,152,000.

Pre-opening costs include expenses such as marketing, staffing, training, and administrative expenditures. Working capital includes a working capital reserve to maintain adequate cash flow until the operation reaches a break-even point. We estimate the pre -opening costs for the proposed subject property to be roughly $2,900 per room, or a total of $208,800.

Building and Site
Improvements
Furniture, Fixtures and
Equipment
Pre
-
Opening and
Working Capital Costs

October-2022 Feasibility Analysis
Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California Soft costs include items other than labor and material that are necessary for construction but are not typically part of the construction contract. Soft costs can include professional fees, financing costs and the interest paid on construction loans, taxes and the builder’s or developer’s all-risk insurance during construction, marketing, sales, and lease -up costs incurred to achieve occupancy or sales. We estimate the amount of soft costs for the proposed subject property to be approximately $16,000 per room, or a total of $1,152,000.

The developer’s fee represents a recovery of costs to the project developer, including salaries, travel, administrative costs, and other expenses related to coordinating the development. It is separate from a developer’s anticipated profit or entrepreneurial incentive. The developer’s fee is typically dependent upon the complexity of project coordination and the length of the development timeline. In the case of relatively simple project s in markets with low barriers to entry, a developer’s fee may not be considered, whereas complicated projects in high - barrier-to-entry markets may incur more substantial costs for coordination and administration during an extended planning and construction period. In some cases, the developer’s administrative costs are included within other line times, rather than allocated to an individual developer’s fee line item. We estimate the developer’s fee for the proposed subject property to be approximately $2,900 per room, equating to 2.0% of the project cost.

Based on the preceding analysis, we estimate the development cost of the proposed subject property as follows.

FIGURE 8-3 COST SUMMARY
Item
Building Renovation Costs $80,000 $5,760,000
Soft Costs 16,000 1,152,000
Furniture, Fixtures, & Equipment 16,000 1,152,000
Pre-Openi ng Cos ts & Worki ng Ca pi ta l 2,900 208,800 Developer Fee (if Applicable) 2,900 208,800
Total Estimated Redevelopment Cost $117,800 $8,481,600
Cost per Room
Cost

The following table presents a comparison of this budget to the comparable cost budgets presented previously.

Soft Costs

Developer’s Fee

Cost Summary

October-2022 Feasibility Analysis
Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California FIGURE 8-4 SUBJECT COST VS COMPABLE BUDGETS
Item
Building $41,172 58.8 % $117,490 66.7 % $81,265 61.0 % $80,000 56.0 % Soft Costs 10,572 13.7 35,018 20.9 23,028 16.6 16,000 11.2 Furniture, Fixtures, & Equipment 15,229 7.6 22,724 24.7 18,760 16.4 16,000 11.2 Pre-Openi ng Cos ts & Worki ng Ca pi ta l 0 0.0 11,129 6.7 4,866 3.6 2,900 2.0 Developer Fee (if Applicable) 0 0.0 26,286 13.1 6,571 4.4 2,900 2.0 Total (Excluding Site Cost) $68,761 $199,913 $134,489 $117,800 82.5 % Average
Subject Property
Per Room
% of Total
Per Room
% of Total
Per Room
% of Total
Per Room
% of Total
Minimum
Maximum

A portion of the overall development cost includes the cost of the land. The range of per-room land cost was illustrated in the previously presented cost -survey data; land cost typically ranges from 5% to 20% of overall development cost but may be substantially higher for premium locations in markets with high barriers to entry.

The portion of a hotel’s overall net income that can be attributed to the land, like a ground-lease payment, is directly correlated to the cost or value of the site. Using the forecasted revenues for the proposed subject hotel and applying a typical hotel ground-lease rental formula, we can determine the income attributed to the land.

The land cost can then be estimated by capitalizing the hypothetical ground rent.

The self-adjusting aspect of this approach is a key element to its reliability.

Hotels are often constructed on leased land. While the lease terms differ somewhat from property to property, the basis for the rental calculation is often tied to a percentage-of-revenue formula. We have researched actual long -term ground leases encumbering hotels. The following table summarizes our findings, showing the property, its room count, and its rental formula.

Land Allocation

October-2022 Feasibility Analysis
Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California FIGURE 8-5 SUMMARY OF HOTEL GROUND LEASES
Hotel
City
ST
Ground Lease Formula
Doral Desert
Princess Hotel
Cathedral City CA 285 5% Gross Receipts $123 5.1 % 5.0 % Sheraton Cerritos Cerritos CA 203 5% Gross Room Revenue 121 5.0 4.9 Sheraton Park Hotel
Anaheim
Anaheim CA 486 Greater of either 5.25% of gross revenue, or 75% of the average actual annual rent paid in the three years before 2011
129 5.3 5.3
Ace Hotel & Swim
Club
Palm Springs CA 176 2% of gross revenue 49 2.0 2.0
Courtyard Marina del
Rey
CA 276 $11 per month for each sleeping unit, in addition to 3% of gross room revenues 74 3.0 3.0 Fairfield Inn Placentia CA 134 From 1994 70,000 annually until 1995, then 90,000 until 2000, then adjusted by the average minimum rental multiplied by 50% of the CPI or 80% of the average actual annual rental paid during such previous five-year period. The percentage used to determine rental in any fiscal year shall be as follows: 1989-1994 3.0%, 1995-2002 4.5%, 2003-2088 6.5% of gross room revenue.
160 6.6 6.5
Marriott Courtyard El Segundo CA 150 4% of rooms revenue and 7% of food and beverage revenue, against a minimum 97 4.0 3.9 Marriott Hotel Irvine CA 504 5% of rooms revenue plus 2% of beverage revenue up to $300,000, 3% of beverage revenue from $300,000 to $500,000, and 4% of beverage revenue over $500,000, against a minimum
121 5.0 4.9
Holiday Inn Crowne
Plaza (LAX)
Los Angeles CA 612 Base rent equal to 6% of fair market value plus supplemental rent equal to 25% of the first $200,000 in percentage rent, 20% of the next $200,000 in percentage rent, and 15% of the next $200,000 in percentage rent; percentage rent is defined as 3% of gross rooms revenue in excess of $196,125
73 3.0 3.0
Number
of Rooms
Dollar
Amount
(+000)
Percentage
of Rooms
Revenue
Percentage
of Total
Revenue
Rental Based on
Year 1 Revenue of the
72-Unit Subject Property

October-2022 Feasibility Analysis
Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California 104

Our analysis of these ground-lease rental formulas indicates that economic ground rents for hotels such as the proposed subject hotel typically range from approximately 2% to 5% of rooms revenue. Hotels with a significant amount of land relative to the property’s room count, hotels in resort areas, or hotels in land-sparse downtown markets may command higher ground rent.

Based on the revenue projections set forth for the proposed subject hotel as part of this feasibility study, the following table shows how the economic ground rent has been calculated. Note that the stabilized revenue level has been deflated back to first-projection-year dollars.

Deflated Stabilized Rooms Revenue $2,567,000
Rental Percentage 4.5 %
Economic Ground Rent $115,515

Rent generated from an unsubordinated ground lease represents a low-risk flow of income. Because the tenant improvements typically amount to more than five times the value of the land, the risk of default is almost nonexistent. For hotel ground leases where rent is tied to revenue, the property owner is also protected from the adverse effects of inflation. Based on these minimal risk factors and the current cost of long-term capital, it is our opinion that the appropriate overall capitalization rate would be as indicated in the following table because of the low level of risk.

Applying the indicated capitalization rate to the proposed subject hotel's economic ground rent results in the following estimate of land cost.

Economic Ground Rent
Capitalization Rate 6.5 %=
$118,980
= $1,830,462

This indicates an estimated land cost of $1,800,000, or $33.60 per square foot, for the proposed subject hotel. We note that t he subject site was acquire d by the ownership group, ZYRA Hospitality LLC, for a reported price of $3,800,000 in February 2022. The acquisition of the site included an existing four -story, disused, former motel building.

In the estimation of development cost for the proposed improvements, the costs of several components of the tota l property were quantified. The development cost was estimated based on a hotel development cost survey conducted by HVS. The following table summarizes our estimate of the total cost to develop the proposed subject property.

Conclusion

October-2022 Feasibility Analysis
Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California 105

FIGURE 8-6 HVS ESTIMATED DEVELOPMENT COST
Item
Building Renovation Costs $80,000 $5,760,000 47 %
Soft Costs 16,000 1,152,000 9
Furniture, Fixtures, & Equipment 16,000 1,152,000 9
Pre-Openi ng Cos ts & Worki ng Ca pi ta l 2,900 208,800 2 Developer Fee (if Applicable) 2,900 208,800 2
Total Estimated Redevelopment Cost $117,800 $8,481,600
Site Acquisition Cost $52,780 $3,800,000 31 %
Total Estimated Development Cost $170,000 $12,280,000 100 % Estimated Present Value Upon Completion $170,000 $12,400,000 % of Total
Cost
Cost per Room
Cost

In determining the potential feasibility of the Proposed Extended -Stay Hotel Baldwin Park, we analyzed the lodging market, researched the area’s economics, reviewed the e stimated development cost, and prepared a ten -year forecast of income and expense, which was based on our review of the current and historical market conditions, as well as comparable income and expense statements.

The proposed subject hotel has an opportunity to serve an underserved niche in the market. Based on our market analysis, the re is sufficient market support for the proposed Extended Stay America Premier Suites (or a similar extended -stay product). Based on the current market -appropriate discount rate and terminal capitalization rate for the proposed 72-room subject hotel, the present value of the cash flows at opening for the proposed subject hotel is $12,400,000. In order for the redevelopment of the existing structure into the proposed subject hotel to remain feasible, the all -in redevelopment costs for the proposed subject ho tel should remain below this amount. Our estimate of redevelopment costs remains below the present value of cash flows upon the project’s conclusion, thus rendering the project feasible.

Conclusion

October-2022 Statement of Assumptions and Limiting Conditions Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California 106

9. Statement of Assumptions and Limiting Conditions

1. This report is set forth as a feasibility study of the proposed subject hotel; this is not an appraisal report.

2. This report is to be used in whole and not in part.

3. No responsibility is assumed for matters of a legal nature, nor do we render any opinion as to titl e, which is assumed marketable and free of any deed restrictions and easements. The property is evaluated as though free and clear unless otherwise stated.

4. We assume that there are no hidden or unapparent conditions of the sub - soil or structures, such as underground storage tanks, that would affect the property’s development potential. No responsibility is assumed for these conditions or for any engineering that may be required to discover them.

5. We have not considered the presence of potentially hazardous materials or any form of toxic waste on the project site. We are not qualified to detect hazardous substances and urge the client to retain an expert in this field if desired.

6. The Americans with Disabilities Act (ADA) became effective on January 26, 1992. We have assumed the proposed hotel would be designed and constructed to be in full compliance with the ADA.

7. We have made no survey of the site, and we assume no responsibility in connection with such matters. Sketches, photographs, maps, and other exhibits are included to assist the reader in visualizing the proper ty. It is assumed that the use of the described real estate will be within the boundaries of the property described, and that no encroachment will exist.

8. All information, financial operating statements, estimates, and opinions obtained from parties not employed by TS Worldwide, LLC are assumed true and correct. We can assume no liability resulting from misinformation.

9. Unless noted, we assume that there are no encroachments, zoning violations, or building violations encumbering the subject site.

10. The property is assumed to be in full compliance with all applicable federal, state, local, and private codes, la ws, consents, licenses, and regulations (including the appropriate liquor license if applicable), and that all licenses, permits, certificates, franchises, and so forth can be freely renewed or transferred to a purchaser.

October-2022 Statement of Assumptions and Limiting Conditions Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California 107

11. All mortgages, liens, encumbrances , leases, and servitudes have been disregarded unless specified otherwise.

12. None of this material may be reproduced in any form without our written permission, and the report cannot be disseminated to the public through advertising, public relations, news, sales, or other media.

13. We are not required to give testimony or attendance in court because of this analysis without previous arrangements and shall do so only when our standard per -diem fees and travel costs have been paid prior to the appearance.

14. If the reader is making a fiduciary or individual investment decision and has any questions concerning the material presented in this report, it is recommended that the reader contact us.

15. We take no responsibility for any events or circumstances that take place subsequent to the date of our field inspection.

16. The quality of a lodging facility's onsite management has a direct effect on a property's economic viability. The financial forecasts presented in this analysis assume responsible ownership and competent manag ement. Any departure from this assumption may have a significant impact on the projected operating results.

17. The financial analysis presented in this report is based upon assumptions, estimates, and evaluations of the market conditions in the local and national economy, which may be subject to sharp rises and declines. Over the projection period considered in our analysis, wages and other operating expenses may increase or decrease because of market volatility and economic forces outside the control of the hotel’s management. We assume that the price of hotel rooms, food, beverages, and other sources of revenue to the hotel will be adjusted to offset any increases or decreases in related costs. We do not warrant that our estimates will be attained, but they h ave been developed based upon information obtained during the course of our market research and are intended to reflect the expectations of a typical hotel investor as of the stated date of the report.

18. This analysis assumes continuation of all Internal Revenue Service tax code provisions as stated or interpreted on either the date this analysis or the date of our field inspection, whichever occurs first.

19. Many of the figures presented in this report were generated using sophisticated computer models that ma ke calculations based on numbers carried out to three or more decimal places. In the interest of simplicity, most numbers have been rounded to the nearest tenth of a percent. Thus, these figures may be subject to small rounding errors.

October-2022 Statement of Assumptions and Limiting Conditions Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California 108

20. It is agreed that our liability to the client is limited to the amount of the fee paid as liquidated damages. Our responsibility is limited to the client ; the use of this report by third parties shall be solely at the risk of the client and/or third parties. The use of this r eport is also subject to the terms and conditions set forth in our engagement letter with the client.

21. Evaluating and comprising financial forecasts for hotels is both a science and an art. Although this analysis employs various mathematical calculations to provide projections, the final forecasts are subjective and may be influenced by our experience and other factors not specifically set forth in this report.

22. This study was prepared by TS Worldwide, LLC . All opinions, recommendations, and conclusions expressed during the course of this assignment are rendered by the staff of TS Worldwide, LLC as employees, rather than as individuals.

October-2022 Certification
Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California 109

10. Certification
The undersigned hereby certify that, to the best of our knowledge and belief:

1. the statements of fact presented in this report are true and correct;

2. 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;

3. we have no present or prospective interest in the property that is the subject of this report and no personal interest with respect to the parties involved;

4. we have no bias with respect to the property that is the subject of this report or to the parties involved with this assignment;

5. our engagement in this assignment was not contingent upon developing or reporting predetermined results;

6. our compensation for completing this assignment is not contingent upon the development or reporting of a predetermined result or direction in performance that favors the cause of the client, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use of this study;

7. our analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Uniform Standards of Professional Appraisal Practice (USPAP);

8. Marcus R. Lee personally inspected the property described in this report; Luigi Major, MAI, participated in the analysis and reviewed the findings, but did not personally inspect the property;

9. no one other than those listed above and the under signed prepared the analyses, conclusions, and opinions concerning the real estate that are set forth in this report;

10. neither Luigi Major, MAI, nor Marc us Lee has performed appraisal or consulting work on the property that is the subject of this report within the three-year period immediately preceding acceptance of this assignment;

11. the reported analyses, 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;

October-2022 Certification
Proposed Extended-Stay Hotel Baldwin Park – Baldwin Park, California 110

12. the use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives; and

13. as of the date of this report, Luigi Major, MAI, has completed the continuing education program for Designated Members of the Appraisal Institute.

Luigi Major, MAI
Managing Director
TS Worldwide, LLC
State Appraiser License (CA) 3005056

Marcus R. Lee
Director, Consulting & Valuation, Asset Management
TS Worldwide, LLC
State Appraiser License (CA) 3006899

HVS, Los Angeles, California Qualifications of Luigi Major, MAI 1 Luigi Major, MAI

HVS CONSULTING AND VALUATION SERVICES
Los Angeles, California

BS – Hotel & Restaurant Management, University of Houston Other Specialized Training Classes Completed:

Uniform Standards of Professional Appraisal Practice – 15 hours Basic Appraisal Procedures – 30 hours
Basic Appraisal Principles – 30 hours
General Appraiser Income Approach (Parts I and II) – 60 hours General Appraiser Sales Comparison Approach – 30 hours
General Appraiser Market Analysis and HBU – 30 hours
General Appraiser Site Valuation and Cost Approach – 30 hours General Appraiser Report Writing and Case Studies – 30 hours Business Practices and Ethics – 7 hours
Statistics, Modeling and Finance – 15 hours
Advanced Income Capitalization – 40 hours
Advanced Sales Comparison & Cost Approach – 40 hours
Report Writing and Valuation Analysis – 40 hours
Advanced Applications – 40 hours
Fundamentals of Separating Real, Personal Property, and Intangible Business Assets – 15 hours
General Demonstration Report Writing
The Appraiser as an Expert Witness: Preparation and Testimony – 16 hours California Law – 4 hours
Mortgage Fraud – Protect Yourself – 7 hours
Supervisor Trainee Course for Texas – 7 hours
Appraisal of Land Subject to Ground Lease – 7 hours
Basic Hotel Appraising – 7 hours
Advanced Hotel Appraising – 7 hours
Appraisal of Land Subject to Ground Lease – 7 hours
CA Supervisor/Trainee – 4 hours
The Dirty Dozen – 3 hours

EMPLOYMENT
2007 to present

EDUCATION AND OTHER

TRAINING

HVS, Los Angeles, California Qualifications of Luigi Major, MAI 2 Income Approach – 7 hours
Small Hotel/Motel Valuation – 7 hours
NV Law – 3 hours
Basics of Expert Witness – 7 hours
Appraisal of Owner-Occupied Commercial Properties – 7 hours CA Law – 4 hours
Appraisal of REO and Foreclosed Properties – 7 hours
Biennial USPAP Updates

Arizona, California, Hawaii, Nevada, Texas

Appraisal Institute – Designated Member (MAI)

“COVID-19’s Impact on the Los Angeles Hotel Market,” April 2021

“U.S. Hotel Development Cost Survey 2020,” October 2020

“Impact of COVID-19 on the Tucson Hotel Market,” July 2020

“Impact of COVID-19 on Los Angeles & Southern California Hotel Markets,” April 2020

“U.S. Hotel Development Cost Survey 2018/19,” September 2019

“Market Pulse: Los Angeles, CA,” March 2019

“HVS Hotel Development Cost Survey 2017/18,” November 2018

“Blurred Lines between Hotels and Airbnb,” September 2018

“Market Pulse: Palm Springs & Desert Cities,” February 2018

“Top 6 Hotel Success Factors,” August 2017

“In Focus: Houston, Texas,” February 2016

“Four Key Takeaways: Meet the Money 2015,” co-authored with Li Chen and Susan Furbay, May 2015

“In Focus: Houston, Texas,” co-authored with Yimei Tang, July 2014

“Effects of Major Renovations on Hotel Market Penetration and Net Present Value,” February 2014

EDUCATION
(CONTINUED)

STATE CERTIFICATIONS

PROFESSIONAL

AFFILIATIONS

PUBLISHED ARTICLES
HVS Journal
HVS Journal
HVS Journal
HVS Journal
HVS Journal
HVS Journal
HVS Journal
HVS Journal
HVS Journal
HVS Journal
HVS Journal
HVS Journal
HVS Journal
HVS Journal

HVS, Los Angeles, California Qualifications of Luigi Major, MAI 3 “HVS Market Intelligence Report 2013: Houston,” June 2013

“HVS Market Intelligence Report: Houston Hotels in 2012,” April 2012

“HVS Report: Foreign Direct Investment, Commercial Real Estate, and Hotel Development in Mexico City.” Co-authored by Raul Duarte and Richard Katzman, February 2011

“San Miguel de Allende – A Beacon for the Tourism Potential of Colonial Towns and Villages,” January 2009

“Mexico’s Growing Trend: Master-Planned Resort-Residential Communities,” November 2008

“Guadalajara – Preparing for the Future,” May 2008

“HVS Market Intelligence Report: San Juan, Puerto Rico,” November 2007

“HVS Market Intelligence Report: Liberia, Costa Rica,” September 2007

HVS Journal
HVS Journal
HVS Journal
HVS Journal
HVS Journal
HVS Journal
HVS Journal
HVS Journal

HVS, Los Angeles, California Qualifications of Luigi Major, MAI 4 EXAMPLES OF PROPERTIES APPRAISED

OR EVALUATED

PORTFOLIO ANALYSIS
Portfolio of 6 Embassy Suites Hotels,
Various Locations
Portfolio of 5 Proposed Hotels,
Colombia
Ladder Capital Portfolio of 6 Hotels,
Colorado and Texas
Ladder Capital Package of 4 Hotels,
Texas
Portfolio of 8 Embassy Suites Hotels,
Various Locations
Lone Star Portfolio of 38 Hyatt Hotels,
Various Locations
Portfolio of 13 Hotels for JPMorgan
Chase, Texas and New Mexico
Portfolio of 5 Extended-Stay Hotels
throughout the South
Portfolio of 3 Hotels, San Diego
Portfolio of 2 Full-Service Hotels,
Houston
Portfolio of 8 Marriott or Embassy
Suites Hotels, California and Nevada
Portfolio of 2 Proposed Hotels, Mesa,
Arizona
Portfolio of 2 Ayres Hotels, Southern
California
Portfolio of 2 Hotels, Beverly Hills
Portfolio of 3 Proposed Hotels,
Western U.S.

Portfolio of 4 Closed Full-Service
Hotels
Portfolio of 9 Hotels for Blue Torch
Capital
Portfolio of 2 Proposed Resorts, La
Quinta, California

ALABAMA
Hampton Inn, Birmingham
City Lodge, Florence
Holiday Inn, Hoover
Hampton Inn, Pell City

ARIZONA
Home2 Suites by Hilton Phoenix
Avondale, Avondale
Proposed EVEN Hotel Avondale,
Avondale
Proposed Home2 Suites by Hilton,
Avondale
Home2 Suites by Hilton Buckeye
Phoenix, Buckeye
Proposed Dual-Branded TownePlace
Suites and Fairfield Inn, Buckeye
Proposed Hotel, Campe Verde
Holiday Inn, Casa Grande
Proposed Limited-Service Hotel at the
Promenade, Casa Grande
Proposed Holiday Inn Flagstaff,
Flagstaff
Proposed Hotel near Gilbert Heritage
District, Gilbert
Proposed SpringHill Suites by
Marriott, Lake Havasu
Proposed Hotel near Harrah's Ak-Chin
Casino, Maricopa
Proposed La Quinta Maricopa,
Maricopa
Proposed Hotel, Mesa
Proposed Hotel near Phoenix Mesa
Gateway Airport, Mesa
Proposed Resort Page, Page
Courtyard Phoenix Airport, Phoenix
Four Points by Sheraton Phoenix
North, Phoenix
Proposed Dual-Brand AC/Element,
Phoenix
Proposed Hampton Inn at Metro
Center, Phoenix
Proposed Holiday Inn Express &
Suites - Phoenix Airport North,
Phoenix
Proposed Home2 Suites by Hilton
Phoenix Airport North, Phoenix
Proposed Hotel at Park Central Mall,
Phoenix
Proposed Hotel Central Station,
Phoenix
Proposed Hyatt Place Downtown
Phoenix, Phoenix
Proposed La Quinta - Banner-
University Medical Center, Phoenix
Proposed La Quinta Inn & Suites
McDowell Road, Phoenix
Proposed Marriott Tribute, Phoenix
Proposed Midtown Hotel, Phoenix
Proposed WoodSpring Suites Happy
Valley, Phoenix
Ramada, Phoenix
Red Roof Inn Phoenix Bell Road,
Phoenix
Residence Inn by Marriott at Mayo
Clinic, Phoenix
Proposed Quartzsite Limited-Service
Hotel, Quartzsite
Proposed Hotel, Queen Creek
Proposed Hotel, Rancho Sahuarita
Navajoland Inn & Suites / Saint
Michaels Arizona, Saint Michaels
Proposed Ceasars Hotel at Scottsdale
Fashion Square, Scottsdale
Proposed Hilton Hotel at Cavasson,
Scottsdale
Proposed Holiday Inn, Scottsdale
Proposed Hyatt Place and Hyatt
House Dual-Branded Hotel,
Scottsdale
Talking Stick Resort, Scottsdale
Las Posadas of Sedona, Sedona
Aloft, Tempe
Comfort Suites Airport, Tempe
MOXY Phoenix Tempe/ASU Area,
Tempe
Proposed Full-Service Hotel, Tempe
Proposed Hilton Tempe, Tempe
Proposed Residence Inn by Marriott,
Tempe
Proposed Westin Tempe, Tempe
Proposed Best Western, Topock
Four Points by Sheraton Tucson
Airport, Tucson
La Posada Lodge & Casitas Ascend
Hotel Collection, Tucson
Proposed Graduate Hotel Tucson,
Tucson
Proposed Hotels at the Marketplace,
Tucson

HVS, Los Angeles, California Qualifications of Luigi Major, MAI 5 Radisson Suites, Tucson
Sheraton Hotel & Suites Tucson,
Tucson
Westin La Paloma Resort & Spa,
Tucson
Proposed Grand Canyon Resort,
Tusayan
Grand Canyon Railway Hotel,
Williams

ARKANSAS
Proposed Hotel, Fairfield Bay
Proposed Hotel, Hot Springs
La Quinta Inn & Suites, Russellville

CALIFORNIA
Proposed Hotel Adelanto, Adelanto
Proposed Holiday Inn Express
Alameda, Alameda
Alhambra Inn & Suites, Alhambra
Fremont Inn, Alhambra
Proposed Hotel American Canyon,
American Canyon
Candlewood Suites Anaheim - Resort
Area, Anaheim
Four Points by Sheraton, Anaheim
Gaia Hotel & Spa, Anderson
Apple Valley Lodge, Apple Valley
Best Western, Bakersfield
Proposed Best Western Bakersfield,
Bakersfield
Proposed Staybridge Suites,
Bakersfield
Holiday Inn Express Hotel & Suites
Barstow Outlet Center, Barstow
Proposed Dual-Branded Marriott,
Barstow
Quality Inn & Suites Santa Cruz
Mountains Ben Lomond, Ben
Lomond
Hampton Inn & Suites Buellton/Santa
Ynez Valley, Buellton
Proposed Aloft Buena Park, Buena
Park
Proposed Hilton at the Source, Buena
Park
Proposed Stanford Hotel, Buena Park
The Hotel at the Source, Buena Park
Quality Inn Burbank, Burbank
Radisson Suites Buena Park, Buena
Park
Proposed Cabazon Glamping
Recreation Center, Cabazon
Cape Rey Carlsbad a Hilton Resort,
Carlsbad
Proposed Beach Village Hotel Day Spa
Condo Project, Carlsbad
DoubleTree by Hilton Golf Resort
Palm Springs Area, Cathedral City
Staybridge Suites Cathedral City Golf
Resort, Cathedral City
Proposed Gaylord Pacific Resort &
Convention Center, Chula Vista
Proposed The GlenRoy, Coachella
Motel 6 Coalinga East, Coalinga
Proposed Everhome Suites Corona,
Corona
Blue Lantern Inn, Dana Point
Proposed Boutique Hotel, Diablo
Grande
Proposed Hampton Inn, Diamond Bar
Proposed Select Service Hotel
Downey, Downey
Proposed Home 2 Suites by Hilton, El
Centro
Proposed Residence Inn El Centro, El
Centro
Proposed Hotel El Dorado Hills, El
Dorado Hills
Holiday Inn Express, Elk Grove
Proposed Candlewood Suites, Elk
Grove
Hyatt Place, Emeryville
Proposed Home2 Suites by Hilton,
Fairfield
La Quinta Inn & Suites, Fresno
San Joaquin Hotel, Fresno
Proposed Tapestry Collection by
Hilton Fullerton, Fullerton
Hampton Inn, Goleta
Holiday Inn Express, Grover Beach
Home2 Suites by Hilton Hanford
Lemoore, Hanford
Proposed Home2 Suites, Hanford
Proposed Dual-Branded Hotel,
Hawthorne
TownePlace Suites by Marriott Los
Angeles LAX Hawthorne,
Hawthorne
Proposed Hotel, Hermosa Beach
Godfrey Hotel Hollywood, Hollywood
Proposed Kokoro Wellness Resort,
Howard Springs
Paséa Hotel & Spa, Huntington Beach
Miramonte Indian Wells Resort & Spa
Curio Collection by Hilton, Indian
Wells
Irvine Marriott, Irvine
Holiday Inn San Diego La Mesa, La
Mesa
Best Western Laguna Brisas Spa
Hotel, Laguna Beach
Coast Inn, Laguna Beach
Pacific Edge Hotel, Laguna Beach
Seaside Laguna Inn & Suites, Laguna
Beach
Proposed Laguna Hills Hotel, Laguna
Hills
Hilton Garden Inn, Lompoc
Hampton Inn Long Beach Airport,
Long Beach
Proposed Breakers Hotel Long Beach,
Long Beach
Dixie Hollywood Hotel, Los Angeles
hClub, Los Angeles
InterContinental Los Angeles
Downtown, Los Angeles
Loews Hollywood, Los Angeles
Mr C Beverly Hills, Los Angeles
Proposed Found Santa Monica, Los
Angeles
Proposed Hampton Inn & Suites
Koreatown, Los Angeles
Proposed Hotel Koreatown, Los
Angeles
Proposed Hyatt Place Olive Street, Los
Angeles
Proposed Spring Street Hotel, Los
Angeles
Proposed Staybridge Suites Los
Angeles, Los Angeles

HVS, Los Angeles, California Qualifications of Luigi Major, MAI 6 Proposed Tommie Hotel, Los Angeles
Proposed Unscripted Hotel, Los
Angeles
Silver Lake Pool & Inn, Los Angeles
Thompson Hollywood, Los Angeles
Proposed Wellness Hotel Malibu,
Malibu
Proposed Hotel Mammoth Village,
Mammoth Lakes
Proposed Resort Mammoth Lakes,
Mammoth Lakes
Proposed Hampton Inn & Suites,
Marina
Proposed SpringHill Suites by
Marriott, Marina
Jolly Roger Motor Hotel, Marina Del
Rey
Proposed Menifee Hotel, Menifee
Best Western, Merced
Mountain Home Inn, Mill Valley
Proposed Montebello Hotel,
Montebello
Monterey Hotel, Monterey
Comfort Inn & Suites Temecula Wine
Country, Murrieta
Proposed Murrieta Hotel, Murrieta
Best Western Elm House Inn, Napa
Hampton by Hilton Napa, Napa
Aloft Silicon Valley, Newark
TownePlace Suites by Marriott,
Newark
Proposed Hotel North Hollywood,
North Hollywood
Proposed Select-Service Hotel,
Northridge
Proposed Homage Oakland, Oakland
Courtyard by Marriott Oceanside,
Oceanside
Proposed Cambria Hotel Ontario,
Ontario
Proposed Dual-Branded Homewood
Suites by Hilton and Hampton by
Hilton Ontario, Ontario
Proposed Element by Westin Ontario,
Ontario
Proposed Dual-Branded Residence
Inn & Courtyard by Marriott
Orange, Orange
Hampton Inn Channel Islands Harbor,
Oxnard
Proposed Tru, Oxnard
Ivy Palm Resort & Spa, Palm Springs
Proposed Andaz Palm Springs, Palm
Springs
Proposed BODE: Palm Springs, Palm
Springs
Riviera Palm Springs, a Tribute
Portfolio Resort, Palm Springs
Tova Hotel & Beach Club, Palm
Springs
Travelodge Palm Springs, Palm
Springs
Holiday Inn Palmdale Lancaster,
Palmdale
Motel 6 Paso Robles, Paso Robles
Proposed Hotel Ava, Paso Robles
Proposed Patterson Hotel, Patterson
Proposed Hotel Perris, Perris
Sheraton Sonoma County Petaluma,
Petaluma
Motel 6, Pittsburg
Proposed Courtyard by Marriott
Pittsburg, Pittsburg
Comfort Inn Near Fairplex Pomona,
Pomona
Comfort Inn & Suites, Rancho Cordova
Proposed Hampton Inn, Rancho
Cucamonga
Proposed Hotel at The River Mall,
Rancho Mirage
Proposed Home2 Suites, Ridgecrest
Proposed Roseville Hotel, Roseville
Courtyard by Marriott Cal Expo,
Sacramento
DoubleTree by Hilton, Sacramento
Fairfield Inn Cal Expo, Sacramento
La Quinta Inn by Wyndham
Sacramento North, Sacramento
Quality Inn & Suites, Sacramento
DoubleTree by Hilton Golf Resort, San
Diego
DoubleTree by Hilton San Diego Del
Mar, San Diego
Fairmont Grand Del Mar, San Diego
Holiday Inn Express Hotel & Suites
Otay Mesa, San Diego
Holiday Inn Express & Suites San
Diego Mission Valley, San Diego
Hotel Iris, San Diego
Hotel Palomar San Diego, San Diego
Lafayette Hotel Swim Club &
Bungalows, San Diego
Marriott San Diego Del Mar, San Diego
The Monsaraz Inn, Tapestry
Collection by Hilton, San Diego
Proposed Fairfield Inn, San Diego
Proposed Hotel, San Diego
San Diego Marriott Del Mar, San Diego
SpringHill Suites by Marriott San
Diego Mission Valley, San Diego
US Grant, San Diego
Proposed Boutique Hotel San Dimas,
San Dimas
Holiday Inn Fisherman's Wharf San
Francisco, San Francisco
Proposed Fairfield Inn & Suites by
Marriott South San Francisco, South
San Francisco
San Jacinto Inn, San Jacinto
Proposed Hyatt Place, San Jose
La Cuesta Motor Inn, San Luis Obispo
Proposed Dual-Brand Hotel San
Marcos, San Marcos
Proposed Home2 Suites, San Marcos
Proposed La Quinta Inn & Suites, San
Pablo
Proposed AC Hotel by Marriott San
Rafael, San Rafael
Proposed Homewood Suites, Santa
Clarita
Hampton Inn, Santa Cruz
Proposed Hampton by Hilton Santa
Cruz, Santa Cruz
Holiday Inn & Suites, Santa Maria
Proper Hotel, Santa Monica
Hotel Santa Rosa, Santa Rosa
Proposed Residence Inn Scotts Valley,
Scotts Valley

HVS, Los Angeles, California Qualifications of Luigi Major, MAI 7 Proposed Hotel, Sonora
Sonora Inn, Sonora
Alpenrose Inn, South Lake Tahoe
Firelite Lodge, Tahoe Vista
Proposed Galway House, Temecula
Proposed Hampton Inn Three Rivers,
Three Rivers
Travelodge Yucca Valley, Twentynine
Palms
Embassy Suites by Hilton, Valencia
Hotel Erwin, Venice Beach
Four Points by Sheraton Ventura
Harbor Resort, Ventura
Pierpont Inn Ventura, Ventura
Proposed Avid Hotel Victorville,
Victorville
Marriott, Walnut Creek
Proposed Hyatt Place Walnut Creek,
Walnut Creek
Proposed Residence Inn Walnut
Creek, Walnut Creek
Proposed Home2 Suites by Hilton
Watsonville, Watsonville
Hampton Inn, West Covina
Holiday Inn West Covina, West Covina
Andaz West Hollywood, West
Hollywood
The Charlie Hotel, West Hollywood
London West Hollywood at Beverly
Hills, West Hollywood
DoubleTree by Hilton Whittier Los
Angeles, Whittier
Comfort Suites Woodland, Woodland
Marriott Warner Center, Woodland
Hills
Proposed Staybridge Suites
Woodland, Woodland

COLORADO
Proposed Gaylord Rockies Hotel &
Convention Center, Aurora
Hyatt Summerfield Suites, Broomfield
Best Western Academy Hotel,
Colorado Springs
Proposed EVEN Hotel Victory Ridge,
Colorado Springs
All Inn Motel, Denver

DISTRICT OF COLUMBIA
Georgetown Suites Land Valuation
Proposed Maison Kesh Hotel

FLORIDA
Marriott, Boca Raton
Proposed Dual-Branded Residence
Inn/SpringHill Suites by Marriott,
Clearwater Beach
Mayfair Hotel & Spa, Coconut Grove
Hyatt Place, Delray Beach
Hyatt Place at Coconut Point, Estero
Hyatt Place, Fort Lauderdale
Hilton Garden Inn, Fort Myers
Four Points, Ft. Walton Beach
Holiday Inn, Houston
Proposed Courtyard, Jacksonville
Wyndham Riverwalk, Jacksonville
Terrace Hotel, Lakeland
Proposed Holiday Inn & Suites, Miami
Proposed Hotel, Miami
Proposed Le Meridien, Miami
Proposed Meininger Hotel, Miami
Beach
Proposed Hilton, Miami Beach
The Raleigh Hotel, Miami Beach
Proposed SpringHill Suites by
Marriott, Navarre
Embassy Suites Orlando Lake Buena
Vista, Orlando
Holiday Inn Express Hotel & Suites
Orlando International Airport,
Orlando
Proposed WoodSpring Suites, Orlando
Proposed Comfort Inn & Suites
Panama City Beach, Panama City
Beach
Sheraton Suites Fort Lauderdale
Plantation, Plantation
Proposed Hotel, St. Augustine
SpringHill Suites by Marriott, Sarasota
Sawgrass Grand Hotel & Suites,
Sunrise
Hampton Inn, Tallahassee
Hampton Inn Veterans Expressway,
Tampa

GEORGIA
Proposed Curio - A Collection by
Hilton, Alpharetta
Courtyard by Marriott, Atlanta
Holiday Inn Atlanta Perimeter
Dunwoody, Atlanta
Proposed Radisson, College Park
Country Inn & Suites, Hiram
Candlewood Suites, Lithia Springs
Proposed Full-Service Tribute Hotel,
Macon
Holiday Inn Express, St. Simons Island
Island Inn, St. Simons Island

HAWAII
Sheraton Keauhou Bay Resort & Spa,
Kailua
Proposed Kona Village, a Rosewood
Resort, Kailua-Kona
Four Seasons Resort O'ahu at Ko
Olina, Kapolei

IDAHO
Proposed Hotel Boise Airport, Boise
Proposed Economy Extended Stay,
Coeur D’Alene

ILLINOIS
Proposed Extended-Stay Hotel,
Bolingbrook
Proposed Hampton Inn, Burr Ridge
SpringHill Suites by Marriott, Burr
Ridge
Renaissance Chicago O’Hare Suites,
Chicago
Courtyard by Marriott Chicago
Elmhurst Oakbrook Area, Elmhurst
SpringHill Suites by Marriott,
Elmhurst

INDIANA
Proposed Aloft, Indianapolis

IOWA
Proposed Waterpark Hotel,
Davenport

HVS, Los Angeles, California Qualifications of Luigi Major, MAI 8 Proposed University of Iowa Hotel,
Iowa City

KANSAS
Crowne Plaza Kansas City Overland
Park, Lenexa

LOUISIANA
Proposed Residence Inn by Marriott,
Bossier City
Hampton Inn, Houma
Hotel Acadiana, Lafayette
Wyndham Garden, Lafayette
Proposed Candlewood Suites,
Leesville
Astor Crowne Plaza, New Orleans
Hilton Garden Inn French Quarter,
New Orleans
Hyatt Regency, New Orleans
Proposed Hotel Alessandra, New
Orleans
Troubadour Hotel New Orleans,
Tapestry Collection by Hilton, New
Orleans
Wyndham Chateau Bourbon, New
Orleans
Holiday Inn, Ruston
Holiday Inn Express Hotel & Suites,
Ruston
Proposed La Quinta Inn & Suites,
Ruston
Nottoway Plantation Resort, White
Castle

MARYLAND
Proposed Hilton Garden Inn,
Baltimore
Sheraton Washington North, Beltsville
Country Inn & Suites by Carlson,
Frederick
Proposed Hotel Sorella, Rockville

MINNESOTA
Loews, Minneapolis
Westin, Minneapolis

MISSISSIPPI
Four Points, Biloxi
Proposed SpringHill Suites, Biloxi
South Beach Biloxi Hotel, Biloxi
Hampton Inn, Brookhaven
Magnuson Hotel Hattiesburg, North
Hattiesburg
Jackson Downtown Convention
Center Hotel, Jackson
Staybridge Suites Ridgeland,
Ridgeland

MISSOURI
Hilton Kansas City Airport, Kansas
City

MONTANA
Proposed Hotel, Big Sky
Proposed Hotel Gardiner, Gardiner
Proposed Best Western, Shelby
Holiday Inn Express, Sidney

NEVADA
Hampton Inn, Las Vegas
Proposed Delta Las Vegas, Las Vegas
Proposed Fairfield Inn & TownePlace
Suites Dual-Branded Hotel, Las
Vegas
Proposed Hotel Raiders Stadium, Las
Vegas
Proposed Limited/Select-Service
Hotel, Las Vegas
Holiday Inn Express Hotel & Suites
Mesquite, Mesquite
The Retreat On Charleston Peak,
Mount Charleston
Extended Stay America Reno South
Meadows, Reno
Vegas Vacant Land, Spring Valley

NEW JERSEY
Proposed Holiday Inn, Bayonne
Montreal Beach Resort, Cape May
TownePlace Suites by Marriott, Mount
Laurel
Holiday Inn, Princeton

NEW MEXICO
Proposed Home2 by Hilton
Alamogordo, Alamogordo
Proposed Downtown Hotel,
Albuquerque
Proposed TownePlace Suites
Albquerque, Albuquerque
Sleep Inn & Suites, Hobbs
Proposed La Quinta Inn, Los Lunas
Holiday Inn Express, Portales
Proposed Hotel, Ruidoso
Hotel Santa Fe, Santa Fe
Inn at Loretto, Santa Fe
Proposed Boutique Hotel, Santa Fe
Hampton Inn, Santa Rosa
Holiday Inn Express, Santa Rosa
La Quinta Inn, Santa Rosa
Sagebrush Inn, Taos

NEW YORK
Marriott, Buffalo
Proposed Hampton Inn, Dewitt
Courtyard by Marriott New York
LaGuardia Airport, East Elmhurst
Proposed Tryp by Wyndham Long
Island City, Long Island City
Residence Inn, White Plains
Proposed Selina Woodstock,
Woodstock

NORTH CAROLINA
Proposed Fairfield Inn by Marriott,
Maggie Valley
Courtyard by Marriott, Raleigh

OHIO
Proposed Hilton, Chippewa Lake
Proposed Baldwin Hotel, Cincinnati
Holiday Inn, West Chester
Proposed Holiday Inn & Conference
Center, West Chester
Radisson Hotel at the University of
Toledo, Toledo

OKLAHOMA
Hilton Skirvin, Oklahoma City

OREGON

HVS, Los Angeles, California Qualifications of Luigi Major, MAI 9 Hilton, Eugene

PENNSYLVANIA
DoubleTree by Hilton Pittsburgh
Garden Tree, Pittsburgh

SOUTH CAROLINA
Proposed 5-Star Hotel, Charleston
Proposed Marion Square Hotel,
Charleston
3 Palms Hotel, Myrtle Beach

TENNESSEE
Holiday Inn, Chattanooga
Proposed Select-Service Hotel,
Knoxville
Holiday Inn Memphis Downtown
Beale Street, Memphis
BentoLiving Chestnut Hill, Nashville
Proposed Dual-Brand Tru & Hampton
Inn, Nashville

TEXAS
Holiday Inn Express, Allen
Proposed 21c Hotel, Austin
Proposed Hotel Granduca, Austin
Proposed SpringHill Suites, Baytown
Value Place, Beaumont
Homewood Suites by Hilton, Bedford
Proposed Hotel Texas A&M
University, College Station
Proposed Tryp by Wyndham, College
Station
Proposed Staybridge Suites, The
Colony
Fairfield Inn & Suites Houston Conroe,
Conroe
Candlewood Suites, Corpus Christi
Comfort Suites Calallen, Corpus
Christi
Embassy Suites, Corpus Christi
Holiday Inn Airport, Corpus Christi
Holiday Inn Downtown, Corpus
Christi
Holiday Inn Express, Corpus Christi
La Quinta Inn & Suites, Corpus Christi
Proposed Schlitterbahn Resort,
Corpus Christi
Staybridge Suites, Corpus Christi
Proposed Hotel, Cypress
Le Méridien The Stoneleigh, Dallas
Proposed Aloft/Element Dual-
Branded Hotel, Dallas
Proposed Autograph Collection
Trinity Groves, Dallas
Proposed Courtyard/Residence Inn
Dual-Brand Hotel, Dallas
Proposed Residence Inn by Marriott,
Dallas
Proposed Residence Inn and AC by
Marriott Dual-Branded Hotel, Dallas
Proposed Saint Elm Hotel, Dallas
Hilton Garden Inn Denison Sherman
at Texoma Event Center, Denison
Proposed Hotel, Edinburg
Proposed Hyatt Place, Edinburg
Proposed Artisan Hotel Conversion, El
Paso
Sheraton Fort Worth Downtown
Hotel, Fort Worth
Proposed Hilton Garden Inn, Frisco
Westin Stonebriar, Frisco
Sheraton Fort Worth Downtown
Hotel, Fort Worth
SpringHill Suites by Marriott Fort
Worth University, Fort Worth
Proposed Full-Service Hotel Baybrook
Mall, Friendswood
Courtyard by Marriott, Galveston
Proposed Beachfront Hotel, Galveston
Proposed Beachtown Grand Hotel,
Galveston
Proposed Courtyard by Marriott,
Galveston
Proposed Downtown Hotel, Galveston
Proposed TownePlace Suites,
Galveston
TownePlace Suites by Marriott,
Galveston
Proposed Hotel, Georgetown
Best Western Fountainview, Houston
Crowne Plaza, Houston
Crowne Plaza Suites, Houston
DoubleTree Suites by Hilton Houston
Galleria, Houston
DoubleTree IAH, Houston
Four Seasons, Houston
Hampton Inn Houston Interstate 10
West, Houston
Hampton Inn & Suites Houston
Medical Center, Houston
Hilton Garden Inn Houston Bush
Intercontinental Airport, Houston
Hilton Garden Inn Houston
Northwest, Houston
Hilton Houston North, Houston
Hilton Houston Westchase, Houston
Holiday Inn Southwest, Houston
Holiday Inn Westchase, Houston
Homewood Suites by Hilton, Houston
Hotel Icon, Houston
Hyatt Regency, Houston
Intercontinental Houston Medical
Center, Houston
Magnolia Hotel, Houston
Marriott Houston North Greenspoint,
Houston
Proposed 314 Hotel, Houston
Proposed AC Hotel Houston
Downtown, Houston
Proposed Aloft, Houston
Proposed Embassy Suites, Houston
Proposed Hampton Inn/Homewood
Suites Downtown, Houston
Proposed Heights Hotel, Houston
Proposed Holiday Inn & Conference
Center Willowbrook, Houston
Proposed Holiday Inn Downtown,
Houston
Proposed Homewood Suites by
Hilton, Houston
Proposed Hotel Alessandra, Houston
Proposed Hotel Galleria, Houston
Proposed Hotel Zaza & Apartments,
Houston
Proposed Hyatt Place and Hyatt
House Dual-Brand Hotel, Houston
Proposed Hyatt Place, Houston
Proposed InterContinental Hotel,
Houston

HVS, Los Angeles, California Qualifications of Luigi Major, MAI 10 Proposed JW Marriott, Houston
Proposed Le Méridien, Houston
Proposed Lifestyle Hotel, Houston
Proposed Luxury Hotel Houston
Galleria, Houston
Proposed Marriott Marquis, Houston
Proposed Montrose Hotel, Houston
Proposed Select-Service Hotel,
Houston
Proposed SpringHill Suites, Houston
Proposed Triple-Branded Hotel
Houston Downtown, Houston
Sam Houston Hotel (Curio
Conversion), Houston
Sheraton Houston North, Houston
Sheraton Houston West, Houston
Staybridge Suites, Houston
Staybridge Suites Houston IAH
Beltway 8, Houston
Staybridge Suites Houston West
Energy Corridor, Houston
Staybridge Suites Houston
Willowbrook, Houston
Westin Galleria, Houston
Westin Oaks, Houston
Wingate by Wyndham Houston Bush
Intercontinental, Houston
Proposed Hotel & Conference Center,
Huntsville
Studio 6, Ingleside
Proposed Westin, Irving
Staybridge Suites DFW Airport North,
Irving
Wingate Las Colinas, Irving
Sleep Inn & Suites, Jourdanton
Super 8, Karnes City
Homewood Suites by Hilton
Houston/Katy Mills Mall, Katy
Proposed Homewood Suites by
Hilton, Katy
South Shore Harbour Resort & Spa,
League City
Best Western, Luling
Renaissance, McAllen
Proposed Home2 Suites by Hilton,
McKinney
Proposed SpringHill Suites by
Marriott, McKinney
Proposed Westin, McKinney
Proposed Limited-Service Hotel,
Melissa
Proposed Extended-Stay Hotel,
Midland
Candlewood Suites, Monahans
La Toretta del Lago Resort & Spa,
Montgomery
Candlewood Suites, Odessa
Proposed Home2 Suites by Hilton,
Pasadena
Courtyard by Marriott Houston
Pearland, Pearland
Proposed Pearland Hotel, Pearland
Proposed Fairfield Inn by Marriott,
Pecos
TownePlace Suites by Marriott Plano,
Plano
Holiday Inn Express Hotel & Suites,
Port Aransas
Holiday Inn Express, Port Arthur
Proposed Hilton Garden Inn Porter,
Porter
Holiday Inn Express, Rockport
Microtel Inn & Suites, Round Rock
Proposed Holiday Inn (land), San
Angelo
Hilton San Antonio Airport, San
Antonio
Homewood Suites by Marriott, San
Antonio
Marriott Plaza, San Antonio
Microtel Inn & Suites Airport, San
Antonio
Microtel Inn & Suites SeaWorld, San
Antonio
Proposed Thompson Hotel, San
Antonio
Baymont Inn & Suites, Snyder
Proposed Fairfield Inn by Marriott,
Snyder
Schlitterbahn Resort, South Padre
Island
Proposed Home2 Suites, Stafford
Marriott Hotel and Conference Center,
Sugar Land
Proposed Red Lion Inn & Suites, Texas
City
Baymont Inn & Suites, Victoria
Proposed Hotel, Webster
Proposed Hotel & Conference Center,
Webster
Proposed Extended-Stay Hotel, The
Woodlands
Woodlands Resort & Conference
Center, The Woodlands

UTAH
Peery Hotel, Salt Lake City
Proposed Inn at St. George, St. George

VIRGINIA
Wingate Inn Dulles Airport, Chantilly
Proposed Staybridge Suites,
Charlottesville
Delta Hotels, Chesapeake
Westin Tysons Corner, Falls Church
Proposed Hampton Inn, Gordonsville
Holiday Inn, Lynchburg
Magnuson Hotel & Convention Center
at Oyster Point, Newport News
Proposed Hotel Norfolk, Norfolk
Holiday Inn Express & Suites
Petersburg Fort Lee, Petersburg
TownePlace Suites by Marriott,
Stafford

WASHINGTON
Proposed AC Hotel, Bellevue
Holiday Inn Express, Marysville
Proposed Homewood Suites, Richland
Proposed 4/C Tower Hotel, Seattle
Holiday Inn Express, Sumner

WISCONSIN
Holiday Inn, Milwaukee

INTERNATIONAL

Colombia
Proposed Hyatt Place, Bogota

HVS, Los Angeles, California Qualifications of Luigi Major, MAI 11 Conrad, Cartagena
Proposed City Express Hotel,
Cartagena
Proposed Luxe Resort by The Charlee,
Guatape
Proposed City Express Hotel, Medellín
Proposed Courtyard by Marriott,
Medellin
Proposed Marriott, Medellín
Proposed Hilton Garden Inn, Rionegro
Proposed Airport Hotel, Rionegro

Costa Rica
Proposed Andaz, Guanacaste
Proposed Boutique Resort,
Guanacaste
Proposed Paradisus Papagayo Bay
Resort & Luxury Villas, Guanacaste
Proposed Resort, Guanacaste
Punta Cacique Proposed Resort,
Guanacaste
Proposed Boutique Resort,
Guanacaste
Proposed Limited-Service Hotel,
Liberia
Proposed Wellness Boutique Hotel,
Matapalo
Marriott Los Suenos, Playa Herradura
Proposed Extended-Stay, San Jose
Proposed Hyatt Place Pinares, San
Jose
Proposed Select-Service Hotel, San
Jose
Marriott Costa Rica, San Jose
Proposed Hyatt Place, San Jose
Proposed Lifestyle Hotel & Club, San
Jose
Proposed Luxury Hotel, San Jose

Dominican Republic
Proposed Auberge Resort, El Seibo
Proposed Four Seasons, El Seibo

El Salvador
Proposed Full-Service Hotel, San
Salvador
Proposed Select-Service Hotel, San
Salvador

Guatemala
Proposed Four Seasons, Antigua
Proposed Hotel, Guatemala City

Honduras
Proposed Hotel, San Pedro Sula

Mexico
Fairmont Acapulco Princess, Acapulco
Fairmont Pierre Marques, Acapulco
Proposed Hotel, Acapulco
Bacalar Land Parcels, Bacalar
Proposed Bacalar Hotel, Bacalar
Cabo de Cortes Fairmont/Raffles
Development, Cabo San Lucas
Cabo San Cristobal, Cabo San Lucas
Proposed Luxury Hotel & Villa Project,
Campeche
Proposed Master-Planned
Development (2), Campeche
Dreams Resort, Cancun
Elan Resort & Spa, Cancun
El Pueblito, Cancun
Fiesta Americana Condesa Cancun,
Cancun
Le Meridien, Cancun
Yalmakan Resort, Cancun
Westin Soberano, Chihuahua
Proposed Quinta Real Hotel
Development, Culiacán
Proposed Banyan Tree, Ensenada
Proposed Boutique Hotel Project,
Guadalajara
Proposed Fiesta Inn del Tapatio,
Guadalajara
Proposed Hotel Project, Guadalajara
Proposed Mixed-Use Development,
Guadalajara
Proposed Vi Hotel, Guadalajara
Hotel Condesa, Leon, Guanajuato
Tesoro, Ixtapa
Proposed Hotel & Residential
Development, Ixtapan de la Sal
Proposed Park Hyatt, Kanai
Proposed St. Regis, Kanai
Proposed W Hotel, Kanai
Desire Resort, Los Cabos
Esperanza Resort, Los Cabos
Proposed Thompson Hotel, Los
Veneros
Tesoro Manzanillo, Manzanillo
Embassy Suites, Mexico City
Le Méridien, Mexico City
Proposed City Express Hotel, Mexico
City
Proposed Limited-Service Hotel,
Mexico City
Proposed Hotel & Condo, Monterrey
Proposed Hotel, Monterrey
Proposed Limited-Service Hotel, Playa
del Carmen
Proposed Resort, Playa del Carmen
Ceiba del Mar, Puerto Morelos
Paraiso de la Bonita, Puerto Morelos
Proposed Puerto Telchac Hotel &
Residential Project, Puerto Progreso
Presidente InterContinental, Puerto
Vallarta
Proposed City Express Hotel,
Queretaro
Proposed Capella Punta Maroma,
River Maya
Proposed Grand Hyatt, Riviera Maya
El Dorado Ranch Hotel & Excess Land,
San Felipe
Proposed Hotel, San Miguel de
Allende
Prposed Quinta Real Hotel &
Residential, San Miguel de Allende
Dreams Resort, Tulum
Secrets Capri Resort, Tulum

Panama
Proposed Boutique Hotel, Panama
City
Proposed Full-Service Hotel, Panama
City
Proposed Limited-Service Hotel,
Panama City

Peru

HVS, Los Angeles, California Qualifications of Luigi Major, MAI 12 Proposed Hyatt Place, Lima

Puerto Rico
Hilton, Caribe
Embassy Suites San Juan Hotel &
Casino, Carolina
Proposed Boutique Hotel, Ponce
Proposed El Vigía Hotel and
Residences, a Tribute Portfolio
Resort, Ponce
Courtyard by Marriott (Expansion),
San Juan
Proposed 1,000-Room Hotel & Casino
San Juan, San Juan

Saint Lucia
Proposed Master Planned
Development

Spain
Villaitana Wellness Golf & Business
Sun Resort, Benidorm

HVS, Los Angeles, California Qualifications of Marcus R. Lee 1 Marcus R. Lee

HVS CONSULTING AND VALUATION SERVICES
Los Angeles, California

THE JEFFERSON HOTEL
Washington, D.C.

CAPELLA WASHINGTON D.C., GEORGETOWN
Washington, D.C.

THE RITZ-CARLTON GEORGETOWN
Washington, D.C.

FOUR SEASONS WASHINGTON DC
Washington, D.C.

INTERNATIONAL MONETARY FUND
Washington, D.C.

OFFICE OF U.S. CONGRESSMAN BLAINE LUETKEMEYER
Washington, D.C.

THE CENTER FOR SOCIO-ECONOMIC DEVELOPMENT
Geneva, Switzerland

BA – Frederick S. Pardee School of Global Studies, Boston University

MS (Hospitality and Tourism) – School of Business, The George Washington University

Other Specialized Training Classes Completed:

Basic Appraisal Principles – 30 hours
Basic Appraisal Procedures – 30 hours
Uniform Standards of Professional Appraisal Practice (USPAP) – 15 hours General Appraiser Income Approach (Parts I and II) – 60 hours General Appraiser Market Analysis and HBU – 30 hours
General Appraiser Site Valuation and Cost Approach – 30 hours General Appraiser Sales Comparison Approach – 30 hours
Real Estate Finance, Statistics, Valuation Modeling – 15 hours

EMPLOYMENT
Nov 2016 to present
Jan – Oct 2016
Sept 2014 – Jan 2016
2014
2013
2013
2012
2012

EDUCATION AND OTHER

TRAINING

HVS, Los Angeles, California Qualifications of Marcus R. Lee 2 General Appraiser Report Writing and Case Studies – 30 hours Appraisal Electives – 20 hours
CA Supervisor/Trainee – 4 hours
CA Law – 2 hours
Expert Witness for Commercial Appraisers – 15 hours

California

“COVID-19’s Impact on the San Diego Lodging Market,” November 2020

“HVS Market Pulse: San Diego, CA,” March 2019

“Market Pulse: Orange County Beaches, CA,” September 2018

“Market Pulse: Annapolis, MD,” co-authored with Chelsey Leffet, April 2018

“HVS Market Pulse: Richmond, VA,” July 2017

“Lesotho, a tourism destination: An analysis of Lesotho’s current tourism products and potential for growth.” Angelo A. Camillo (editor), IGI Global Publ., Hershey, PA, 2015

EDUCATION
(CONTINUED)

STATE CERTIFICATIONS

PUBLISHED ARTICLES
HVS Journal
HVS Journal
HVS Journal
HVS Journal
HVS Journal
Handbook of Research on
Global Hospitality and
Tourism Management

HVS, Los Angeles, California Qualifications of Marcus R. Lee 3 EXAMPLES OF PROPERTIES APPRAISED

OR EVALUATED

PORTFOLIO WORK

7 Motel 6 Properties, Southern
California
10 Extended Stay America Hotels,
Southern California

ARIZONA

Hampton Inn Phoenix Chandler,
Chandler
Proposed Hotel near Gilbert Heritage
District, Gilbert
Hotel San Carlos, Phoenix
Proposed Hampton Inn at Metro
Center, Phoenix
Proposed Hotel Phoenix, Phoenix
Proposed La Quinta Inn & Suites
McDowell Road, Phoenix
Red Roof Inn Phoenix Bell Road,
Phoenix
Holiday Inn Hotel & Suites Scottsdale
North Airpark, Scottsdale
Proposed Ceasars Hotel at Scottsdale
Fashion Square, Scottsdale

ARKANSAS

Residence Inn by Marriott Little Rock
Downtown, Little Rock

CALIFORNIA

Proposed Hotel Adelanto, Adelanto
Courtyard by Marriott Thousand Oaks
Agoura Hills, Agoura Hills
Candlewood Suites Anaheim - Resort
Area, Anaheim
Embassy Suites by Hilton Anaheim
North, Anaheim
Holiday Inn & Suites Anaheim (1
Blk/Disneyland), Anaheim
Holiday Inn Anaheim Disneyland,
Anaheim
Embassy Suites Arcadia Pasadena,
Arcadia
Proposed Hilton at The Source, Buena
Park
Carmel Resort Inn, Carmel
DoubleTree by Hilton Golf Resort Palm
Springs Area, Cathedral City
Proposed The GlenRoy, Coachella
Residence Inn San Diego Chula Vista,
Chula Vista
Proposed Everhome Suites, Corona
SpringHill Suites by Marriott Corona
Riverside, Corona
Courtyard by Marriott Los Angeles
Westside, Culver City
DoubleTree Suites by Hilton Hotel
Doheny Beach Dana Point, Dana
Point
Proposed Hilton Garden Inn UC Davis,
Davis
Courtyard by Marriott San Diego El
Cajon, El Cajon
Yosemite Cedar Lodge, El Portal
Yosemite View Lodge, El Portal
Embassy Suites by Hilton Anaheim
South, Garden Grove
Hampton Inn & Suites Los Angeles
Glendale, Glendale
Proposed Caption by Hyatt, Hollywood
Paséa Hotel & Spa, Huntington Beach
Miramonte Indian Wells Resort & Spa
Curio Collection by Hilton, Indian
Wells
Pacific Edge Hotel, Laguna Beach
Proposed Hotel Lathrop Towne
Centre, Lathrop
Hilton Garden Inn Lompoc, Lompoc
Proposed Breakers Hotel Long Beach,
Long Beach
Residence Inn by Marriott Cypress Los
Alamitos, Los Alamitos
Marriott Los Angeles Airport, Los
Angeles
Proposed Found Santa Monica, Los
Angeles
Proposed Spring Street Hotel, Los
Angeles
Proposed Tommie Hotel, Los Angeles
Proposed Unscripted Hotel, Los
Angeles
Thompson Hollywood, Los Angeles
Proposed Murrieta Hotel, Murrieta
Proposed Hampton Inn, Needles
Hyatt Regency, Newport Beach
Proposed Oakland Hotel, Oakland
Proposed Cambria Hotel Ontario,
Ontario
Embassy Suites by Hilton Palm Desert,
Palm Desert
Holiday House, Palm Springs
Proposed Andaz Palm Springs, Palm
Springs
Proposed BODE: Palm Springs, Palm
Springs
Courtyard by Marriott, Palmdale
Residence Inn by Marriott, Palmdale
Proposed Hotel Perris, Perris
Proposed Hotel at The River Mall,
Rancho Mirage
Courtyard by Marriott San Diego
Downtown, San Diego
DoubleTree by Hilton San Diego Del
Mar, San Diego
Holiday Inn Express San Diego
Downtown, San Diego
Lafayette Hotel Swim Club &
Bungalows, San Diego
The Monsaraz Inn, Tapestry Collection
by Hilton, San Diego
Proposed Hampton Inn San Diego, San
Diego
Proposed Hotel San Diego, San Diego
San Diego Marriott Del Mar, San Diego
SpringHill Suites by Marriott San Diego
Mission Valley, San Diego
Proposed Home2 Suites, San Marcos
Crowne Plaza Los Angeles Harbor, San
Pedro
Embassy Suites Santa Ana Orange
County Airport North, Santa Ana
Ambrose Hotel, Santa Monica
Proposed Hilton Garden Inn, Simi
Valley

HVS, Los Angeles, California Qualifications of Marcus R. Lee 4 Wine Valley Inn & Cottages Solvang,
Solvang
Proposed Hotel Sonora, Sonora
Sonora Inn, Sonora
Embassy Suites Temecula Valley Wine
Country, Temecula
Hotel Erwin, Venice Beach
Pierpont Inn Ventura, Ventura
Fairfield by Marriott Visalia Sequoia,
Visalia
Proposed Hyatt Place, Walnut Creek
Holiday Inn West Covina, West Covina

COLORADO

SpringHill Suites Denver Tech Center,
Greenwood Village
Proposed The Pad Hostel, Silverthorne

DISTRICT OF COLUMBIA

Avery Georgetown
Hampton Inn & Suites Washington DC
Navy Yard

GEORGIA

Proposed Hotel, Hapeville
Hotel Indigo Savannah Historic
District, Savannah

INDIANA

Clarion Hotel & Conference Center,
Indianapolis

MARYLAND

Hampton Inn & Suites
Baltimore/Aberdeen, Aberdeen
La Quinta Inn, Aberdeen
Proposed Fairfield Inn & Suites,
Aberdeen
Proposed TownePlace Suites by
Marriott, Belcamp
Days Inn & Suites, Cambridge
Super 8, Havre de Grace
Cambria Hotel & Suites, Rockville
Holiday Inn Express, Waldorf

MAINE

Budget Traveler Motor Lodge, Presque
Isle

MISSOURI

AC Hotels by Marriott Kansas City
Westport, Kansas City

NEW JERSEY

Brick Motor Inn, Brick
Ramada Inn Wayne Fairfield, Wayne
Econo Lodge, Elmira

NEW YORK

La Quinta Inn & Suites, Batavia
Holiday Inn Express, Grand Island
Budget Inn, Huntington
Crowne Plaza, Suffern

OHIO

Super 8, Coshocton
Motel 6, Grove City
Motel 6 Canton, North Canton

PENNSYLVANIA

Red Roof Inn, Chambersburg
Hampton Inn, Clarion
Comfort Inn Cranberry Township,
Mars
Hampton Inn Pittsburgh Monroeville,
Monroeville
Rodeway Inn, York

TEXAS

Proposed Autograph Collection Trinity
Groves, Dallas
Sheraton Fort Worth Downtown Hotel,
Fort Worth
SpringHill Suites by Marriott Fort
Worth University, Fort Worth
La Quinta Inn & Suites Houston
Magnolia, Magnolia

UTAH

Comfort Inn & Suites Salt Lake City
Airport, Salt Lake City
Tru by Hilton Salt Lake City Airport,
Salt Lake City

VIRGINIA

Indian Hills Interstate Inn, Colonial
Heights
Proposed Hampton Inn & Suites,
Culpeper
SpringHill Suites by Marriott Fairfax
Fair Oaks, Fairfax
Candlewood Suites Richmond West
End Short Pump, Glen Allen
Hyatt Place Richmond Innsbrook Glen
Allen, Glen Allen
Hampton Inn Norfolk/Naval Base,
Norfolk
Hyatt House Richmond West,
Richmond
Hyatt Place Richmond Arboretum,
Richmond
Suburban Extended Stay Northwest,
Richmond
Hyatt House Sterling/Dulles Airport-
North, Sterling

WEST VIRGINIA

Comfort Suites Bridgeport Clarksburg,
Bridgeport
Proposed Best Western, Morgantown

A-0.0
PROJECT NO.DATESHEET NO.

SEAL / SIGNATURE
ISSUED / REVISEDNO.DATEREMARK
architecturestudioMAArchitecture I Interior I Planning DRAWING NAME ADDITION & REMODEL TOEXISTING 4-STORY INN BUILDING14624 DALEWOOD STREET, BALDWIN PARK, CA 91706 inc
1808 Borrego DriveWest Covina, CA [email protected]) 213.422.6976 PLANNING DR 3RD SUBMIT: REV 1, AUG - 29 -2023

COUNTY OF LOS ANGELES

FIRE DEPARTMENT

FIRE PREVENTION ENGINEERING

APPROVED

By________________________
Fire Prevention Engineer

Date_______________________

12/05/2022

REVISED

By_______________________
Fire Prevention Engineer

Date_____________________
10/10/2023

WWW
W
WW
G

TOPOGRAPHIC MAP
14624 Dalewood Street,T-1Baldwin Park, CA 91706PROJECT LOCATION:N dba QUARTECH CONSULTANTSCALLAND ENGINEERING, INC.CALLAND ENGINEERING, INC.ABBREVIATIONS/LEGEND:

DSV

A-1.0
PROJECT NO.DATESHEET NO.

SEAL / SIGNATURE
ISSUED / REVISEDNO.DATEREMARK
architecturestudioMAArchitecture I Interior I Planning DRAWING NAME ADDITION & REMODEL TOEXISTING 4-STORY INN BUILDING14624 DALEWOOD STREET, BALDWIN PARK, CA 91706 inc
1808 Borrego DriveWest Covina, CA [email protected]) 213.422.6976 A-1.1-FD
PROJECT NO.DATESHEET NO.

SEAL / SIGNATURE
ISSUED / REVISEDNO.DATEREMARK
architecturestudioMAArchitecture I Interior I Planning DRAWING NAME ADDITION & REMODEL TOEXISTING 4-STORY INN BUILDING14624 DALEWOOD STREET, BALDWIN PARK, CA 91706 inc
1808 Borrego DriveWest Covina, CA [email protected]) 213.422.6976

COUNTY OF LOS ANGELES

FIRE DEPARTMENT

FIRE PREVENTION ENGINEERING

APPROVED

By________________________
Fire Prevention Engineer

Date_______________________

12/05/2022

REVISED

By_______________________
Fire Prevention Engineer

Date_____________________
10/10/2023

A-2.0
PROJECT NO.DATESHEET NO.

SEAL / SIGNATURE
ISSUED / REVISEDNO.DATEREMARK
architecturestudioMAArchitecture I Interior I Planning DRAWING NAME ADDITION & REMODEL TOEXISTING 4-STORY INN BUILDING14624 DALEWOOD STREET, BALDWIN PARK, CA 91706 inc
1808 Borrego DriveWest Covina, CA [email protected]) 213.422.6976 A-2.1
PROJECT NO.DATESHEET NO.

SEAL / SIGNATURE
ISSUED / REVISEDNO.DATEREMARK
architecturestudioMAArchitecture I Interior I Planning DRAWING NAME ADDITION & REMODEL TOEXISTING 4-STORY INN BUILDING14624 DALEWOOD STREET, BALDWIN PARK, CA 91706 inc
1808 Borrego DriveWest Covina, CA [email protected]) 213.422.6976 A-2.2
PROJECT NO.DATESHEET NO.

SEAL / SIGNATURE
ISSUED / REVISEDNO.DATEREMARK
architecturestudioMAArchitecture I Interior I Planning DRAWING NAME ADDITION & REMODEL TOEXISTING 4-STORY INN BUILDING14624 DALEWOOD STREET, BALDWIN PARK, CA 91706 inc
1808 Borrego DriveWest Covina, CA [email protected]) 213.422.6976 A-2.3
PROJECT NO.DATESHEET NO.

SEAL / SIGNATURE
ISSUED / REVISEDNO.DATEREMARK
architecturestudioMAArchitecture I Interior I Planning DRAWING NAME ADDITION & REMODEL TOEXISTING 4-STORY INN BUILDING14624 DALEWOOD STREET, BALDWIN PARK, CA 91706 inc
1808 Borrego DriveWest Covina, CA [email protected]) 213.422.6976

COUNTY OF LOS ANGELES

FIRE DEPARTMENT

FIRE PREVENTION ENGINEERING

APPROVED
FOR_____________________

OCCUPANCY ONLY
By________________________
Fire Prevention Engineer
Date______________________
□ Subject to field inspection approval.
□ Subject to conditions on plans.

The stamping of this plan and specifications
SHALL NOT be held to permit or to be an
approval of the violation of any provisions of
any County/City Ordinance or State Law.
**One printed set of stamped
approved plans is required to be
brought to the jurisdictional Fire
Inspection office upon approval and
48 hours prior to any inspection
requests.**
12/05/2022
R1
FEPC2022-1348

REVISED

By_______________________
Fire Prevention Engineer

Date_____________________
10/10/2023

A-2.4
PROJECT NO.DATESHEET NO.

SEAL / SIGNATURE
ISSUED / REVISEDNO.DATEREMARK
architecturestudioMAArchitecture I Interior I Planning DRAWING NAME ADDITION & REMODEL TOEXISTING 4-STORY INN BUILDING14624 DALEWOOD STREET, BALDWIN PARK, CA 91706 inc
1808 Borrego DriveWest Covina, CA [email protected]) 213.422.6976

COUNTY OF LOS ANGELES

FIRE DEPARTMENT

FIRE PREVENTION ENGINEERING

APPROVED
FOR_____________________

OCCUPANCY ONLY
By________________________
Fire Prevention Engineer
Date______________________
□ Subject to field inspection approval.
□ Subject to conditions on plans.

The stamping of this plan and specifications
SHALL NOT be held to permit or to be an
approval of the violation of any provisions of
any County/City Ordinance or State Law.
**One printed set of stamped
approved plans is required to be
brought to the jurisdictional Fire
Inspection office upon approval and
48 hours prior to any inspection
requests.**
12/05/2022
R1
FEPC2022-1348

REVISED

By_______________________
Fire Prevention Engineer

Date_____________________
10/10/2023

A-2.5
PROJECT NO.DATESHEET NO.

SEAL / SIGNATURE
ISSUED / REVISEDNO.DATEREMARK
architecturestudioMAArchitecture I Interior I Planning DRAWING NAME ADDITION & REMODEL TOEXISTING 4-STORY INN BUILDING14624 DALEWOOD STREET, BALDWIN PARK, CA 91706 inc
1808 Borrego DriveWest Covina, CA [email protected]) 213.422.6976

COUNTY OF LOS ANGELES

FIRE DEPARTMENT

FIRE PREVENTION ENGINEERING

APPROVED
FOR_____________________

OCCUPANCY ONLY
By________________________
Fire Prevention Engineer
Date______________________
□ Subject to field inspection approval.
□ Subject to conditions on plans.

The stamping of this plan and specifications
SHALL NOT be held to permit or to be an
approval of the violation of any provisions of
any County/City Ordinance or State Law.
**One printed set of stamped
approved plans is required to be
brought to the jurisdictional Fire
Inspection office upon approval and
48 hours prior to any inspection
requests.**
12/05/2022
R1
FEPC2022-1348

REVISED

By_______________________
Fire Prevention Engineer

Date_____________________
10/10/2023

A-2.6
PROJECT NO.DATESHEET NO.

SEAL / SIGNATURE
ISSUED / REVISEDNO.DATEREMARK
architecturestudioMAArchitecture I Interior I Planning DRAWING NAME ADDITION & REMODEL TOEXISTING 4-STORY INN BUILDING14624 DALEWOOD STREET, BALDWIN PARK, CA 91706 inc
1808 Borrego DriveWest Covina, CA [email protected]) 213.422.6976 A-3.0
PROJECT NO.DATESHEET NO.

SEAL / SIGNATURE
ISSUED / REVISEDNO.DATEREMARK
architecturestudioMAArchitecture I Interior I Planning DRAWING NAME ADDITION & REMODEL TOEXISTING 4-STORY INN BUILDING14624 DALEWOOD STREET, BALDWIN PARK, CA 91706 inc
1808 Borrego DriveWest Covina, CA [email protected]) 213.422.6976 A-3.1
PROJECT NO.DATESHEET NO.

SEAL / SIGNATURE
ISSUED / REVISEDNO.DATEREMARK
architecturestudioMAArchitecture I Interior I Planning DRAWING NAME ADDITION & REMODEL TOEXISTING 4-STORY INN BUILDING14624 DALEWOOD STREET, BALDWIN PARK, CA 91706 inc
1808 Borrego DriveWest Covina, CA [email protected]) 213.422.6976 A-4.0
PROJECT NO.DATESHEET NO.

SEAL / SIGNATURE
ISSUED / REVISEDNO.DATEREMARK
architecturestudioMAArchitecture I Interior I Planning DRAWING NAME ADDITION & REMODEL TOEXISTING 4-STORY INN BUILDING14624 DALEWOOD STREET, BALDWIN PARK, CA 91706 inc
1808 Borrego DriveWest Covina, CA [email protected]) 213.422.6976 A-4.1
PROJECT NO.DATESHEET NO.

SEAL / SIGNATURE
ISSUED / REVISEDNO.DATEREMARK
architecturestudioMAArchitecture I Interior I Planning DRAWING NAME ADDITION & REMODEL TOEXISTING 4-STORY INN BUILDING14624 DALEWOOD STREET, BALDWIN PARK, CA 91706 inc
1808 Borrego DriveWest Covina, CA [email protected]) 213.422.6976 A-4.2
PROJECT NO.DATESHEET NO.

SEAL / SIGNATURE
ISSUED / REVISEDNO.DATEREMARK
architecturestudioMAArchitecture I Interior I Planning DRAWING NAME ADDITION & REMODEL TOEXISTING 4-STORY INN BUILDING14624 DALEWOOD STREET, BALDWIN PARK, CA 91706 inc
1808 Borrego DriveWest Covina, CA [email protected]) 213.422.6976 A-5.0
PROJECT NO.DATESHEET NO.

SEAL / SIGNATURE
ISSUED / REVISEDNO.DATEREMARK
architecturestudioMAArchitecture I Interior I Planning DRAWING NAME ADDITION & REMODEL TOEXISTING 4-STORY INN BUILDING14624 DALEWOOD STREET, BALDWIN PARK, CA 91706 inc
1808 Borrego DriveWest Covina, CA [email protected]) 213.422.6976 A-6.0
PROJECT NO.DATESHEET NO.

SEAL / SIGNATURE
ISSUED / REVISEDNO.DATEREMARK
architecturestudioMAArchitecture I Interior I Planning DRAWING NAME ADDITION & REMODEL TOEXISTING 4-STORY INN BUILDING14624 DALEWOOD STREET, BALDWIN PARK, CA 91706 inc
1808 Borrego DriveWest Covina, CA [email protected]) 213.422.6976 A-6.1
PROJECT NO.DATESHEET NO.

SEAL / SIGNATURE
ISSUED / REVISEDNO.DATEREMARK
architecturestudioMAArchitecture I Interior I Planning DRAWING NAME ADDITION & REMODEL TOEXISTING 4-STORY INN BUILDING14624 DALEWOOD STREET, BALDWIN PARK, CA 91706 inc
1808 Borrego DriveWest Covina, CA [email protected]) 213.422.6976

COUNTY OF LOS ANGELES

FIRE DEPARTMENT

FIRE PREVENTION ENGINEERING

APPROVED

By________________________
Fire Prevention Engineer

Date_______________________

12/05/2022

REVISED

By_______________________
Fire Prevention Engineer

Date_____________________
10/10/2023

A-7.0
PROJECT NO.DATESHEET NO.

SEAL / SIGNATURE
ISSUED / REVISEDNO.DATEREMARK
architecturestudioMAArchitecture I Interior I Planning DRAWING NAME ADDITION & REMODEL TOEXISTING 4-STORY INN BUILDING14624 DALEWOOD STREET, BALDWIN PARK, CA 91706 inc
1808 Borrego DriveWest Covina, CA [email protected]) 213.422.6976

NO DOOR SCHEDULEWIDTH REMARKSLOCATIONTYPEHEIGHTTHICKSIZEMATFINMATFINFRAMEDOOR

EXTERIORTYPEWINDOW SCHEDULEWIDTHHEIGHTGLAZINGFRAMECOLORFRAMEMATERIALREMARKSLOCATIONNO

INTERIOR

COUNTY OF LOS ANGELES

FIRE DEPARTMENT

FIRE PREVENTION ENGINEERING

APPROVED

By________________________
Fire Prevention Engineer

Date_______________________

12/05/2022

REVISED

By_______________________
Fire Prevention Engineer

Date_____________________
10/10/2023

A-7.1
PROJECT NO.DATESHEET NO.

SEAL / SIGNATURE
ISSUED / REVISEDNO.DATEREMARK
architecturestudioMAArchitecture I Interior I Planning DRAWING NAME ADDITION & REMODEL TOEXISTING 4-STORY INN BUILDING14624 DALEWOOD STREET, BALDWIN PARK, CA 91706 inc
1808 Borrego DriveWest Covina, CA [email protected]) 213.422.6976

NO STOREFRONT SCHEDULEWIDTHHEIGHTGLAZINGFRAMECOLORFRAMEMATERIALREMARKSLOCATIONROOMNAMEFLOORWALLCEILINGMATERIALBASEMATERIALFINISHMATERIALFINISHREMARKSINTERIOR FINISH SCHEDULEMOULDING PROJECT NO.DATESHEET NO.

SEAL / SIGNATURE
ISSUED / REVISEDNO.DATEREMARK
architecturestudioMAArchitecture I Interior I Planning DRAWING NAME ADDITION & REMODEL TOEXISTING 4-STORY INN BUILDING14624 DALEWOOD STREET, BALDWIN PARK, CA 91706 inc
1808 Borrego DriveWest Covina, CA [email protected]) 213.422.6976 A-8.0

STAFF REPORT
ITEM NO. 19