Hanford City Council
April 4, 2023

RECORDING REQUESTED BY:

CITY OF HANFORD
When recorded return to:

City Clerk
City of Hanford
315 North Douty Street
Hanford, California 93230-3951

G.C. 27361.3 - Fee NIL

NOTICE OF COMPLETION
TO WHOM IT MAY CONCERN:

YOU ARE HEREBY NOTIFIED AS FOLLOWS:

1. The work of Improvement is located at: Tract No. 865 Live Oak East Unit No. 1

2.The Improvement is particularly described as: Subdivision Infrastructure Improvements

3. The date of completion of the work of Improvement: February 14, 2023

4. The Owner of the work of Improvement: City of Hanford

5. The nature of the owner’s interest or estate: Fee Simple

6. The name of the original contractor for the work of Improvement: San Joaquin Valley Homes, Presidio JJR Sterling Oaks 104, LLC and Presidio JJR Hidden Oaks 104, LLC a Delaware Limited Liability Company

7. The surety for the work of Improvement: SureTec Insurance Company

8. Accepted by minute action of the City Council of the City of Hanford on: April 4th, 2023.

I certify under penalty of perjury that the foregoing is true and correct.

Dated this 4th day of April, 2023.

BY: ________________________________________
Travis Paden, Mayor
City of Hanford, County of Kings, State of California

I, the undersigned, say:

I am the person who signed the foregoing notice. I have read the above notice and know its contents, and the facts stated therein are true of my own knowledge.

I declare under penalty of perjury that the foregoing is true and correct.

Executed at Hanford, California, this day of 2023.

BY: ________________________________________
Travis Paden, Mayor
City of Hanford, County of Kings, State of California
Authority: Section 1181 Civil Code

City of Hanford
Public Works Department

900 South 10th Ave. • Hanford, CA 93230-5234 • (559) 585-2550

June 9, 2022

Re: San Joaquin Valley Homes Tract 865 Unit I
Streetlight Bonding

To Whom it may concern:

The City of Hanford has agreed to allow San Joaquin Valley Homes (SJVH) an extension on the Notice of Completion requirement for Tract 865 Phase 1, as they pertain to the installed street lights. The current installed street lights do not conform to the Master Plan. However, due to the lead time on the replacement lights, SJVH will not be able to install the replacement lights until early in 2023.

The City of Hanford request’s a bond for the cost of replacing the street lights plus 30% in order to remove the street light correction from Notice of Completion. Referencing Exhibit A – Engineers Estimate, prepared by a licensed engineer on 5/27/22, the total bonding amount required by the City of Hanford is $160,160.00. The bonds shall be held by the City of Hanford until the completion of the work to replace the existing lights.

Sincerely,

Johnathan Doyel, PE/PLS
Public Works Director

12.M.

AGENDA

STAFF REPORT

MEETING DATE: 4/4/2023 AGENDA SECTION: CONSENT CALENDAR

SUBJECT:

Appropriation and authorization to purchase up to $32,000 in Gym Equipment to be paid from an Officer Wellness Grant in the City's Police Trust Fund

RECOMMENDATION:

Recommendation: That the City Council appropriate and approve the purchase of $32,000 worth of gym equipment from the City's Police Trust Fund from an Officer Wellness Grant received.

Recommended Motion: That the City Council by motion approve the purchase of up to $32,000 in gym equipment to be used for officer wellness and instruct the Hanford Police Department to work with the finance department to ensure the purchases are made within established policy.

BACKGROUND:

The Hanford Police Department was awarded $42,827.04 by the BSCC which is the California Board of State and Community Corrections. There is no City obligation with these funds except that they have to be spent on officer wellness and mental health.

Currently, the Hanford Police Department is ahead of most agencies in this area. Knowing that officers encounter traumatic incidents on a regular basis and recognizing that this impacts the officers' wellness and mental health, the Hanford Police Department has implemented several programs to assist our employees, which include;
Peer Support Program
Annual mental health checkups
City EAP program

One of the eligible expenses is for workout equipment. Strength and Cardio training is excellent for stress relief and provides many other benefits and is also something officers engage in on a regular basis. We are looking at purchasing approx. $32,000 worth of equipment. Attached you will find a quote from Frey Equipment in the amount of $31,088.20. Frey is gym quality equipment but also has a reasonable price. Also attached are two other quotes from Rogue and Superior Health and Fitness Solutions. The quotes are not comparable. For instance, Superior has much less equipment and they do not produce all of the equipment that is on the Frey Quote. The Rogue quote was considerably more for much less equipment and they did not produce much of the equipment that is listed on the Frey Quote.

It was not possible to find exact comparison quotes as every company produces different equipment with different quality levels under their own brand. The Hanford Police Department is interested in

getting the best deal for our money and want the most equipment and best quality we can get at the lowest price. There are also considerable delays in much of the exercise equipment that is out of stock.

In coordination with the Finance Department about those difficulties in this purchase staff is therefore requesting permission to spend up to $32,000 on gym equipment. We plan on using Frey for most of the equipment, but in the case of equipment that Frey cannot supply due to stock issues, we would like the flexibility to purchase from other vendors. In those purchases, we would have all of the purchases reviewed by purchasing, to ensure we receive 3 quotes and that we do not exceed our budgeted amount. We will also be using some of the $32,000 at Tractor Supply to purchase rubber flooring that already covers approximately 3/4 of the PAL building and was purchased through Tractor Supply in the past.

All of the equipment will be located in the PAL building in the space that has been freed up thanks to the Council's previous decision to do parking lot improvements, which have moved our armored vehicles outside the building.

The remainder of the funds we intend to spend on an Officer Wellness App which will connect all of our programs together and provide the officer with one touch and immediate access to our available programs. We have reserved enough funds to cover the cost of the app and test it over the next two year budget cycle.

FISCAL IMPACT:

The already awarded and received funds will cover the cost of this item. There is no fiscal impact to the City as this is covered by grant funds received, there is no impact to the General Fund. This purchase will be accounted for in the Police Trust Fund where the grant funds were deposited.

ATTACHMENTS:

1. Frey Quote

2. Superior Quote

3. Rogue Quote

13.A.

AGENDA

STAFF REPORT

MEETING DATE: 4/4/2023 AGENDA SECTION: GENERAL BUSINESS

SUBJECT:

Approval of a Purchase and Sale Agreement and Escrow Instructions for the purchase of forty (40) acres of Land for the future development of Heroes Park, a new fire station, and a new water tank site.

RECOMMENDATION:

Recommendation: It is recommended that the City Council, by motion, approve a Purchase and Sale Agreement and Escrow Instructions for the purchase of forty (40) acres from Thomas G. Loogman, Robert A. Loogman, Colette M. Quinn, John M. Loogman, Jr., Lisa M. Askins, and Trudy N. Simas for the future development of Heroes Park, a new fire station, and a new water tank site.

Recommended Motion: I move to approve the Purchase and Sale Agreement and Escrow Instructions and that the Mayor be authorized to sign that document and associated escrow material for the purchase of forty (40) acres of land that will be utilized for the development of Heroes Park, a new fire station, and a new water tank site.

BACKGROUND:

On December 8, 2021, the City of Hanford was awarded the Proposition 68 Statewide Park Development and Community Revitalization Program grant for $8,500,000 to acquire and develop the new forty (40) acre Heroes Park. The amenities and conceptual design of the park (copy attached) were established through extensive community outreach. The result is a regional park that will serve the community's future needs and attract visitors from throughout the State.

The original location selected for Heroes Park was on the northeast corner of Florinda and 9-¼ Avenue. This was based on the State's prescriptive criteria for their desire for new parks in underserved communities and located farther at least one-half (½) mile from an existing park.

Lengthy negotiations with the landowner failed because the State dictates that the purchase price may not exceed fair market value based on a current appraisal of the property.

Shortly thereafter, the City approached the owner of the adjacent property to the east of the original parcel. That owner, Latis, LLC (Latis), expressed an interest in selling the northern forty (40) acres of its sixty (60) acre parcel. Latis intends to transfer ownership of the property to the individuals who are the owners of the LLC, and those individuals will be the sellers for purposes of the City’s acquisition of the forty (40) acres.

A preliminary title report, property survey, appraisal, and environmental assessment were prepared, which led to the proposed Purchase and Sale Agreement and Escrow Instructions (PSA).

A copy of the appraisal is attached. The appraisal reflects a total appraised value of $4,664,000.00, which is allocated as follows:

• $4,600,000.00 for land.

• $36,000.00 for interim residence value.

o The appraiser projected that, if the sellers do not sell the forty (40) acres the City, they could sell the entire sixty (60) acre parcel in approximately three (3) years. The appraiser determined that, during the three (3) year period, the sellers could rent the existing residence for a total of $36,000.00.

The appraiser included an “interim residence value” as eminent domain compensation for the sellers’ loss of use of the residence over the three (3) year projected marketing period.

• $28,000.00 for loss of use of an existing irrigation system.

o The sellers’ sixty (60) acre property is irrigated by improvements located on the forty (40) acre portion that the City intends to purchase. The City’s development of Heroes Park will eliminate the irrigation system and will affect the sellers’ irrigation of their remaining twenty (20) acres. The appraiser identified the value of such loss of use for purposes of eminent domain compensation.

The following is a summary of the key terms of the attached Purchase and Sale Agreement:

• Purchase Price: $4,664,000.00

• Feasibility Period: Ninety (90) days for the City’s evaluation of the property. An environmental assessment has been completed and no contamination issues were identified.

• Rezone of Sellers’ Other Property: A portion of the property is designated Neighborhood Mixed Use. The sellers own property on the north side of Grangeville Blvd. that has a land use designation of Medium Density Residential, and they asked the City to change the use designation of ten (10) acres of their northern property to Neighborhood Mixed Use. The PSA indicates that the City will process a General Plan amendment and Zoning Ordinance amendment at the City’s cost. The Council may not, however, contractually commit to approving the amendments. Accordingly, when the Council considers the amendments in the future, the Council may approve the amendments only if the Council makes the required legal findings.

• Recognition of Sellers’ Relatives: The City will recognize:

o Mrs. Gertrude R. Thomas in association with the new park.

o Mr. John M. Loogman, a former fire fighter, in association with the fire station constructed at the property.

• Lease: The City will lease the forty (40) acres back to the sellers until the City is ready to develop the park. The Lease will contain the following terms:

o Either party may terminate the Lease by giving one hundred eighty (180) days’ prior written notice. This right to terminate will allow the City to move forward with Park development when the City is ready and will give the sellers’ adequate time to harvest crops.

o The sellers will not pay rent.

o The sellers will retain all crops that they grow at the property and will retain the proceeds from the sale of the crops.

o The City will not be obligated to perform any repair or improvement work under the Lease.

• Closing Deadline: Fifth (5) business day following the expiration of the ninety (90) day Feasibility Period, although the City may elect to close earlier.

FISCAL IMPACT:

The Proposition 68 Statewide Park Development and Community Revitalization Program grant, Fire Impact Fee funds, and Water Impact Fee funds will pay the purchase price for the property on a pro rata basis, and the committed $2,231,308 from the Park Impact Fee Reserve Account will be used for the design and development of the park.

ATTACHMENTS:

1. 2023.03.27 Purchase Agreement - Loogman Property - FINAL

2. 2023.03.27 Heroes Park Appraisal

3. 20002_UTF-Heros Park Schematic UPDATE 10.06.2022 (003)

4. Heroes park locations

1 PURCHASE AND SALE AGREEMENT

AND ESCROW INSTRUCTIONS

This PURCHASE AND SALE AGREEMENT AND ESCROW INSTRUCTIONS (“Agreement”) is made and entered into this ____ day of ______________, 2023 (“Effective Date”), by and between Thomas G. Loogman, Robert A. Loogman, Colette M. Quinn, John M.

Loogman, Jr., Lisa M. Askins, and Trudy N. Simas ( collectively “Seller”), and the CITY OF HANFORD, a municipal corporation (“ Buyer”). Seller and Buyer are sometimes collectively referred to herein as th e “Parties” and singularly as a “ Party.” This Agreement is made with reference to the following facts:

RECITALS

A. Seller owns that land (“Seller’s Existing Property”) that is more particularly described in Exhibit “A,” which is attached hereto and made a part hereof.

B. Seller wishes to sell and Buyer wishes to purchase the northern forty (40) acres of Seller’s Existing Property. The portion of Seller’s Existing Property to be purchased by Buyer is hereinafter called “the Property ” and is more particularly described in Exhibits “B” and “C ,” which are attached hereto and made a part hereof.

C. The southern twenty (20) acres of Seller’s Existing Property that Buyer will not purchase, and which will be retained by Seller, is hereinafter called “Seller’s Retained Property” and is more particularly described in Exhibit “D,” which is attached hereto and made a part hereof.

NOW, THEREFORE, in consideration of the mutual covenants set forth herein and for other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, the Parties hereby agree as follows:

1. Purchase and Sale.

(a) S ubject to all of the terms, conditions and provisions of this Agreement and for the consideration set forth herein, Seller agrees to sell to Buyer and Buyer agrees to buy the Property at Closing (defined below), as defined in this Agreement . Buyer shall, at i ts sole cost, cause the Property to be surveyed. A legal description for the Property will be created using the data of Buyer’s survey.

(b) The sale and purchase of the Property shall be consummated by means of an escrow (“Escrow ”) opened at the offices of STEWART TITLE C OMPANY (“Escrow Holder”) located at 325 Mall Dr., Ste. 105, Hanford, California. This Agreement shall constitute the instructions for Escrow upon acceptance by Escrow Holder. The Parties shall also execute such additional escrow instructions as may be required by the Escrow Holder, but the same shall be consistent with this Agreement and not modify the terms hereof unles s specifically approved by the Parties, such approval to be given or withheld in its sole discretion.

2 2. Purchase Price. The purchase price for the Property s hall be FOUR MILLION, SIX HUNDRED SIXTY -FOUR THOUSAND DOLLARS ($4,664,000.00) (“Purchase Price”) , which is allocated as follows: (i) ONE HUNDRED FIFTEEN THOUSAND DOLLARS ($115,000.00) per acre, for a total of FOUR MILLION, SIX HUNDRED THOUSAND DOLLARS ($4,600,000.00) for acquisition of the land; (ii) THIRTY -SIX THOUSAND DOLLARS ($36,000.00) for interim residence value; and (iii) TWENTY-EIGHT THOUSAND DOLLARS ($28,000.00) for the loss of the ability to irrigate Seller’s Remaining Property as a result of Buyer’s post -Closing elimination of existing irrigation improvements located at the Property. The Purchase Price shall be paid in full on the Closing Date, as defined below in Section 23 of this Agreement.

3. Payment of Purchase Price. The Purchase Price shall be paid as follows:

(a) Upon execution of this Agreement by both Parties, Buyer shall deposit Ninety Thousand and No/100 Dollars ($90,000.00) (“Deposit”) with Escrow Holder.

(b) At least one (1) business day before Closing, Buyer shall deposit the balance of the Purchase Price with Escrow Holder, in cash, by wire transfer or other immediately available funds.

4. Liquidated Damages.

LIQUIDATED DAMAGES UPON BUYER'S DEFAULT . IF ESCROW FAILS TO CLOSE BY THE SCHEDULED CLOSING DATE SET FORTH IN SECTION 23 OF THIS

AGREEMENT AS A RESULT OF BUYER'S DEFAULT IN THE PERFORMANCE OF ITS

OBLIGATIONS UNDER THIS AGREEMENT, THE DEPOSIT SHALL BE RETAINED BY SELLER AS L IQUIDATED DAMAGES AND AS SELLER’S EXCLUSIVE REMEDY AGAINST BUYER, AT LAW OR IN EQUITY OR OTHERWISE. RETENTION OF SUCH

FUNDS BY SELLER AS LIQUIDATED DAMAGES IS NOT INTENDED AS A FORFEITURE OR PENALTY WITHIN THE MEANI NG OF CALIFORNIA CIVIL CODE SECTIONS 3275 OR 3369, BUT INSTEAD, IS INTENDED TO CONSTITUTE LIQUIDATED DAMAGES TO SELLER PURSUANT TO SECTIONS 1671, 1676 AND 1677 OF THE CALIFORNIA CIVIL CODE. BECAUSE OF THE SPECIAL NATURE OF THE NEGOTIATIONS THAT PRECEDED AC CEPTANCE BY SELLER OF BUYER ’S OFFER TO ACQUIRE THE

PROPERTY, THE PARTIES ACKNOWLEDGE THAT THE ACTUAL DAMAGE THAT

WOULD RESULT TO SELLER AS A RESULT OF SUCH FAILURE WOULD BE EXTREMELY DIFFICULT TO ESTABLISH. IN ADDITION, BUYER DESIRES TO LIMIT

ITS POTENTIAL LIABILITY TO SELLER IN THE EVENT THAT THIS TRANSACTION SHALL FAIL TO CLOSE. BY SEPARATELY INITIALING BELOW, THE PARTIES

3 HEREBY ACKNOWLEDGE THEIR AGREEMENT CONCERNING LIQUIDATED DAMAGES:

___________
Seller Initials
___________
Seller Initials
___________
Seller Initials
___________
Seller Initials
___________
Seller Initials
___________
Seller Initials

___________
Buyer Initials

5. Irrigation Improvements.

(a) The Property, including the Seller Retained Property, is irrigated by a water well (“Well”) located on the real property located directly east of the Property. Water from the Well is conveyed by a underground pipeline (“ Pipeline”), which runs in a east - west direction, located along the northern side of the Property.

(b) As part of Buyer’s development of the Property as a public park, the Pipeline will be eliminated for safety purposes.

(c) Seller acknowledges that the Purchase Price includes a damages component of TWENTY-EIGHT THOUSAND DOLLARS ($28,000.00) for the loss of the ability to irrigate Seller’s Remaining Property as a result of Buyer’s post -Closing elimination of existing irrigation improvements located at the Property.

(d) Seller further acknowledges that, since Buyer ’s payment of the Purchase Price will compensate Seller for the elimination of the irrigation system, Buyer will not be required to construct new irrigation improvements or take any other action to address the elimination of the existing irrigation system.

6. Condition of Title to the Property. Seller shall convey f ee title to the Property to Buyer, subject to those encumbrances, contracts, agreements, rights, easements, and rights-of-way as set forth in a preliminary report of title to the Property to be prepared by Escrow Holder (“Title Report”) and approved by Buyer in accordance with the provisions of this Section 6 . The Title Report shall be prepared by Escrow Holder and delivered to the Seller and Buyer promptly a fter the opening of Escrow. Upon receipt of the Title Report, and each document shown as an exception or encumbrance in the Title Report, Buyer shall have ten (10) calendar days within which to notify Seller and Escrow Holder in writing of any exceptions to title shown therein that Buyer disapproves (“Objectionable Exceptions”), plus any endorsements to title Buyer requires for the subject title policy. If Buyer notifies Seller and Escrow Holder of one (1) or more Objectionable Exceptions, Seller shall have fifteen (15) business days from receipt of such written notice to (i) remove the Objectionable Exception(s), or (ii) refuse to remove the Objectionable Exception(s) , in which c ase Buyer may elect to waive its objection(s) and consummate this transaction, or terminate this Agreement and receive a refund of the Deposit, whereupon neither Party shall have any further obligations under this Agreement. Buyer’s failure to provide Seller and Escrow Holder with written notice of Objectionable Exceptions within said ten (10) calendar day period shall

4 constitute B uyer’s approval of the Title Report and all exceptions shown therein (collectively “Permitted Exceptions”). After Buyer’s approval of the Title Report, Seller shall not allow, cause, or permit any additional exceptions to the condition of title to occur without Buyer’s approval , other than ongoing real property taxes and assessments already of record, but is not delinquent.

7. Title Insurance. At the Closing , and as a condition to Buyer ’s obligation to purchase and Seller ’s obligation to sell the Property, Escrow Holder shall commit to issue its standard ALTA Policy of Title Insurance (provided, however, Buyer may elect to obtain endorsements if Buyer so notifies Escrow Holder prior to the Closing and such election does not delay the close of Escrow ) showing title to the Property vested in Buyer , subject only to the Permitted Exceptions as determined in accordance with Section 6 of this Agreement (“ Title Policy”). The premium for the Title Policy shall be p aid as set forth i n Section 21 of this Agreement, provided that if Buyer elects to obtain endorsements to such coverage, it shall pay the additional cost associated with the endorsements.

8. Feasibility Period.

(a) Buyer shall have ninety (90) calendar days from the Effective Date (“Feasibility Period”) to undertake, at Buyer’s expense: (i) an inspection of the Property; (ii) a review of the physical condition of the Property, including ( but not limited to ), inspection and examination of soils, environmental factors, hazardous substances regulated by government agencies, and other information relating to the Property; (iii) a review and investigation of the effect of any zoning, maps, permits, reports, engineering data, regulations, ordinances and law affecting the Property ; and (iv) any other due diligence efforts that Buyer finds appropriate , including, without limitation, confirming the feasibility of Buyer’s intended use of the Property and change of the Property’s zoning to allow the development of a public park. Seller shall reasonably cooperate with Buyer and Buyer’s agents in providing documents in Seller’s possession and access to the P roperty relevant to Buyer’s inspection. Upon the Parties’ execution of this Agreement, Buyer will provide to S eller the Phase I Environmental Site Assessment that Buyer obtained for the Property.

(b) If Buyer, in its sole and absolute discretion, and for any reason disapproves the results of any aspect of Buyer’s inspection and review, Buyer shall give Seller, prior to 5:00 p.m. on the last day of the Feasibility Period, notice of disapprov al and termination of this Agreement (“Disapproval Notice”). If Buyer fails to give Seller the Disapproval Notice prior to 5:00 p.m. on the last day of the Feasibility Period, Buyer shall be deemed to have approved the results of its inspection and review of the Property. If the transaction is disapproved by Buyer, all parties hereto shall be relieved of all further obligations or liabilities hereunder except as is otherwise specifically provided in this Section 8(b) and in Section 8(c) immediately following. If Escrow terminates pursuant to this Section 8(b), the Deposit will be released by Escrow Holder to Buyer, and Buyer will provide to Seller at no charge, upon cancellation of Escrow, all reports and material regarding the Property that Buyer generates or are generated on Buyer’s behalf.

(c) Buyer shall, prior to Closing, indemnify, defend, and hold Seller and Seller’s representatives and agents harmless from and against any and all loss, cost, damage, expense, claim or liability, including personal injury, loss of life and/or property damage resulting

5 from the acts or omissions of Buyer or its representatives, employees, contractors, or agents in performing any inspection and/or testing activity on or about the Property. Buyer shall promptly pay all costs, fees and expenses incurred as a result of or associated with such inspection work done or caused to be done on the Property by Buyer as permitted by this Section 8. Buyer shall keep the Property free from any and all mechanics or similar liens or charges resulting from Buyer’s inspection work.

9. Condition of Property. Except for represen tations made in writing by the Seller prior to the Closing Date, and except as specifically set forth in the Agreement:

(a) Buyer expressly acknowledges that Buyer is buying the Property in an “AS IS AND WHERE AS” condition, and that it has not relied on any warranties, promises, understandings or representations, express or implied, of Seller or any employee, agent or representative of Seller, or any document relating to the Property, except as are specifically set forth in this Agreement or made in writing by Seller prior to the Closing Date . Buyer further acknowledges that any and all feasibility or market reports, environmental assessments, engineering studies and other information of any type that Buyer has received or may receive from Seller or its agents are furnished on the express condition that Buyer shall make an independent verification of the accuracy of any and all such information, all such information being furnished without any warranty whatsoever.

(b) Buyer acknowledges and agrees that except as specifically set forth in this Agreement or made in writing by Seller prior to the Closing Date neither Seller nor any employee, agent or representative of Seller has made any representation or warranty to Buyer concerning the Property, including, without limitation, the suitability of the Property for Buyer’s intended use or its compliance with any statutes, ordinances, rules or regulations. Buyer shall perform and rely solely upon its own independent investigation concerning the Property and the Property’s compliance with any applicable law. Buyer acknowledges that it is acquiring the Property subject to all existing laws, ordinances, rules and regulations, and except as specifically set forth in this Agreement, neither Seller nor any of Seller’s representatives, agents or employees have made any warranties, representations or statements regarding any laws, ordinances, rules and regulations of any governmental or quasi -governmental body, entity, district or agency having authority with respect to the use, condition or occupancy of the Property.

(c) Buyer shall perform and rely solely upon its own investigation concerning Buyer’s intended use of the Property, the Property’s fitness therefor, and the permissibility of such intended use under applicable statutes, ordinances, rules and regulations.

10. Existing Surveys and Reports. Within ten (10) calendar days of the Effective Date, Seller shall furnish Buyer with copies of all existing surveys, soil reports, engineering studies, environmental audits or reports, site plans, and all other information and documents in Seller’ s possession pertaining to the Property.

11. Covenants, War ranties and Representations of Seller. Seller hereby makes the following covenants, representations, and warranties:

6 (a) Seller’s execution of this Agreement and performance of its obligations hereunder will not violate any agreement, option, covenant, condition, obligation or undertaking of Seller or which is in any way related to the Property.

(b) Seller is not a “foreign person” as defined in Section 1445(f) of the Internal Revenue Code of 1986, as amended. At the Closing, Seller shall provide Buyer an Affidavit of Non-Foreign Status made under penalty of perjury, if required by Escrow Holder.

(c) Except as otherwise disclosed herein or in the Title Report , there are no liens on title or actions, suits, or proceedings of any kind or nature whatsoever, legal or equitable, pending or to the best of Seller’s actual knowledge, threatened against Seller or the Property, and relating to or arising out of the ownership, management, or operation of the Property, in any court or before any federal, state, county or municipal department, commission, board, bureau, agency, or other governmental instrumentality.

(d) The Property is not subject to any third party leases or other use rights, with the exception of those rights, if any, which may be reflected in the Title Report or which are disclosed in writing by Seller to Buyer.

(e) Seller will not market the Property for sale or disposition to any other party while this Agreement is in effect.

(f) The Property currently is in compliance in all respects with the rules, regulations, ordinances and laws of all governmental authorities having jurisdiction over the Property to the best of Seller’s actual knowledge.

(g) To the best of Seller’s actual knowledge, there are no underground storage tanks located anywhere on the Property.

(h) To the best of Seller’s actual current knowledge, there has been no “release”, as defined in 42 U.S.C. Sec. 960 1(22) or, to the actual knowledge of Seller, threat of a “release” of any hazardous waste or substance (as such term in used in applicable environmental laws) on, from or under the Property.

(i) To the best of Seller’s actual knowledge, neither Seller nor any of Seller’s officers, agents or employees has received any notice that Seller has any potential liability with respect to the clean-up of the Property or of any other site to which hazardous wastes or substances taken from the Property may have been transported, and there are no past or present (or, to the actual knowledge of Seller, future) events, conditions or circumstances which may interfere with or prevent Buyer from using, occupying, and/or otherwise enjoying the Property or which would result in the Buyer incurring any liability with regard to any environmental laws or which would or may give rise to any common law or other legal liability on the part of Buyer based on or related to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling, or the emission, discharge, release or threatened release into the environment of hazardous substances or hazardous wastes, which are regulated by federal or state law, by Seller or as a result of any act or omission of Seller.

7 (j) Seller shall notify Buyer immediately if Seller becomes aware of any new information or material change concerning the Property that affects the representations and warranties of Seller under this Agreement.

(k ) Seller is the sole owner of the Property and has the legal power, right and authority to enter into this Agreement and the instruments referenced herein, and to consummate the transaction contemplated hereby.

(l) No party has a right of first refusal, rights of first offer or options to purchase in any part relating to the Property.

(m ) All requisite action has been taken by Seller in connection with entering into this Agreement, the instruments referenced herein, and the consummation of the transaction contemplated hereby. No consent of any trustee, settlor, trustor, beneficiary, judicial or administrative body, governmental authority or other party is required.

(n ) The individuals executing this Agreement and the instruments referenced herein on behalf of Seller have the legal power, right, and actual authority to bind the Seller to the terms and conditions hereof.

Seller shall indemnify, defend and hold Buyer harmless from and against all liability, loss, costs, damages, claims and expenses (including reasonable attorney’s fees) arising out of or in connection with the breach by Seller of any of the covenants and representations set forth in subsections (a) through (n) of this Section 11, all of which shall survive the Closing and be deemed to have been remade upon Closing. A condition that is contrary to a statement above and which is not within Seller’s actual current knowledge shall not constitute a breach by Seller.

12. Covenants, Warranties and Representations of Buyer. Buyer hereby makes the following covenants, representations, and warranties:

(a) Buyer has the authority to enter into this Agreement, purchase the Property, and to otherwise perform as set forth herein. The person executing this Agreement on behalf of Buyer has the full legal authority and is duly authorized to sign this Agreement on behalf of Buyer and to bind Buyer to all of the terms and conditions of this Agreement.

(b) Buyer’s execution of this Agreement and performance of its obligations hereunder will not violate any agreement, option, covenant, condition, obligation or undertaking of Buyer.

(c) There are no actions, suits, or proceedings of any kind or nature whatsoever, legal or equitable, pending or, to the best of Buyer’s knowledge, threatened against Buyer, in any court or before or by any federal, state, county or municipal department, commission, board, bureau, agency, or other governmental instrumentality seeking to challenge Buyer’s ability to purchase the Property.

8 (d) As additional consideration for the purchase of the Property, Buyer will lease the Property back to Seller in accordance with Section 15(d) below.

(e) Within one hundred eighty (180) calendar days of Closing Buyer shall, at no cost to Seller, commence the process to amend the City of Hanford General Plan (“General Plan”) and Zoning Ordinance to change the land use and zoning designation of ten (10) acres of land owned by Seller on the north side of Grangeville Boulevard from Medium Density Residential to Neighborhood Mixed Use. Buyer will work with Seller to more particularly identify the ten (10) acres to be redesignated. Buyer shall diligently pursue amendment of the General Plan and Zoning Ordinance through completion. Amendment of the Gene ral Plan and Zoning Ordinance entails the exercise of legislative authority by the Hanford City Council (“ City Council”), and Seller may not contractually commit to a particular result in the Council’s exercise of such authority. Amendment of the General Plan and Zoning Ordinance will be subject to all applicable legal requirements, including, without limitation the need for the City Council to make the necessary findings under the Hanford Municipal Code.

(f) Buyer, upon its development of the Property as a public park, shall recognize Mrs. Gertrude R. Thomas ~ GaGa. Buyer, upon its development of a parcel of the Property for a fire station, shall recognize John M. Loogman, a former fire fighter.

(g) Buyer acknowledges that there are (2) abandoned wate r wells and a septic tank in the vicinity of the existing residence located on the Property.

(h) Buyer confirms that the westernmost twenty-five feet (25’) of the Property is subject to right -of-way rights controlled by Kings County, which rights will aut omatically transfer to and bind Buyer upon the Property’s annexation into the City of Hanford. Buyer further confirms that since public right-of-way rights exist, Seller may utilize the right-of-way area after Closing to travel between Grangeville Boulevard and Seller’s Retained Property; provided however, use of the right-of-way area may be temporarily impacted when Buyer constructs the 9 th
Avenue roadway and related improvements between E. Lacey Boulevard and Grangeville Boulevard.

13. Survival of Warranties. The satisfaction, truth, accuracy, and completeness of each of the representations, warranties and covenants of Buyer and Seller contained in this Agreement, as of the date hereof and as of Closing, shall constitute a condition precedent to the obligations of Seller and Buyer, respectively, hereunder. All representations, warranties, covenants, obligations, responsibilities, and agreements set forth herein shall survive Closing, and Seller and Buyer each agree to indemnify, defend, and hold the other harmless from any claim, demand, liability, loss or cost (including without limitation, reasonable attorneys ’ fees and costs) which the other may sustain arising out of any breach of any provision of this Section 13.

14. Brokerage Commissions . Buyer and Seller each represents and warrants to the other that they have not engaged the services of any real estate broker, salesperson, agent, or finder, nor done any other act nor made any statement, promise or undertaking which would result in the imposition of liability for the payment of any real estate brokerage commiss ion, finder’s fee or

9 otherwise in connection with the transaction described in this Agreement. In the event that any person or entity perfects a claim for a brokerage commission, finder’s fee or otherwise, based upon any agreement, statement or act, the Party through whom such person or entity makes such claim shall be responsible therefor and shall defend, indemnify, and hold the other Party and the Property harmless from and against such claim and all loss, costs and expense associated therewith, including attorneys’ fees.

15. Conditions Precedent to Seller’s Obligations to Perform . Seller’s obligation to perform as set forth herein is hereby expressly conditioned on satisfaction of each and every of the following conditions precedent:

(a) Buyer shall have timely performed each of the acts to be performed by it hereunder.

(b) Each of Buyer’s representations and warranties set forth herein shall be true at Closing as if affirmatively made at that time.

(c) Buyer shall not have timely exercised any right set forth in this Agreement to cancel Escrow or terminate this Agreement.

(d) Buyer and Seller’s execution of a Lease (“Lease”) at Closing under which Seller will lease the Property back from Buyer. Buyer and Seller will negotiate the terms of the Lease in good faith, and the Parties agree that the Lease will contain the following provisions:

(i) Either party may terminate the Lease by providing one hundred eight (180) calendar days prior written notice to the other Party.

(ii) Seller shall pay no rent to Buyer during the term of the Lease.

(iii) Seller shall retain all crops harvested at the Property and proceeds generated by the sale of such crops.

(iv) Buyer will have no obligation to repair or improve any aspect of the Property, including, without limitation, improvements located thereon, during the Lease’s term.

Seller will deliver possession of the Property to Buyer upon termination of the Lease; provided however, if the P arties do not execute a Lease, Seller will deliver possession of the Property to Buyer at Closing.

16. Conditions Precedent to Buyer’s Obligations to Perform. Buyer’s obligation to perform as set forth herein is hereby expressly conditioned on satisfaction of each and every of the following conditions precedent:

(a) Seller shall have timely performed each of the acts to be performed by it hereunder.

10 (b) Each of Seller’s representations and warranties set forth herein shall be true at Closing as if affirmatively made at that time.

(c) Seller shall not have timely exercised any right set forth in this Agreement to cancel Escrow or terminate this Agreement.

(d) Escrow Holder is committed to issue the Title Policy as set forth above in Section 7.

(e) Seller has satisfied all legal requirements for the sale of the Property in order to grant clear title to Buyer , subject to those conditions and Permitted Exceptions approved by Buyer.

(f) Amendment of Buyer’s California Statewide Park Development and Community Revitalization Program grant (“ Grant”), in the amount of EIGHT MILLION, FIVE HUNDRED THOUSAND DOLLARS ($8,500,000.00), to allow for Buyer’s use of Grant funds to purchase the Property and for the development of a new municipal park at the Property .

Amendment of the Grant is necessary because the Grant was originally rewarded to Buyer for the purchase of land other than the Property and for the development of a new park at that site.

(g) Completion of the survey referenced in Section 1 above.

17. Establishment of Escrow. Upon execution of this Agreement by the Parties, a duplicate of this Agreement shall be deposited with Escrow Holder. The general provisions of Escrow Holder’s escrow instructions shall not impose any additional obligations or liabilities on the Parties. If any of the general provisions conflict with the provisions of this Agreement, the provisions of this Agreement shall control.

18. Deposits into Escrow. The Parties shall make the following deposits into Escrow at or prior to Closing:

(a) Seller shall deposit an executed and acknowledged original G rant Deed conveying good and marketable title to the Property, subject to all Permitted Exceptions.

(b) Buyer shall deposit all funds when and as required hereby (including without limitation the Purchase Price and all amounts necessary to pay Buyer’s share of the closing costs), and such other amounts as Buyer has agreed to pay under this Agreement, or as required by Escrow Holder, and a preliminary change of ownership report for Kings County.

(c) Both Parties shall execute and deliver such additional documents as Escrow Holder reasonably may deem necessary in order to effectuate the transaction set forth in this Agreement and to close Escrow.

19. Prorations . Escrow Holder shall prorate the following items, as of the Closing, using a three hundred sixty-five (365) day year: all real and personal property taxes and all other charges or assessments relating to the Property using the latest tax bills. Seller sh all pay any

11 supplemental taxes assessed against the Property prior to the Closing. Buyer shall pay any supplemental taxes assessed pursuant to Chapter 3.5 ( Section 75) of the California Revenue and Taxation Code resulting from the sale of the Property to Buyer.

20. Title Insurance. At Closing, Escrow Holder shall issue, effective as of that date, the Title Policy described in Section 7 of this Agreement.

21. Costs and Expenses. Closing costs shall be borne by the Parties as follows:

(a) T he Title Policy premium shall be paid by Seller; provided, however, any endorsements that are not included with Escrow Holder’s standard ALTA Policy of Title Insurance that are requested by Buyer shall be paid by Buyer;

(b) D ocumentary transfer taxes and costs of preparing and recording the Grant Deed shall be paid by Seller; and

(c) A ll Escrow fees shall be shared equally between Buyer and Seller.

All other costs of closing Escrow, including, without limitation, filing fees, other recording fees and otherwise, shall be shared by the Parties equally. Each Party shall bear its own legal fees and costs. Buyer shall deposit additional funds into Escrow in an amount equal to its share of the closing costs as determined by Escrow Holder. Escrow Holder is hereby authorized to withhold Seller’s share of the closing costs from funds otherwise distributable to Seller.

22. Closing Date. Unless otherwise extended by the Parties in writing or as specified herein, the closing of Escrow for the Property shall occur on or before the fifth (5th) business day following the expiration of the Feasibility Period , subject to the prior satisfaction (or waiver) of the conditions precedent to the Closing identified in Sections 15 and 16 of this Agreement (“Closing”). The date on which Closing occurs is referred to herein as “Closing Date.” If Escrow is not in a condition to close by the Closing Date, Escrow Holder, except as otherwise provided herein, shall cancel Escrow upon receipt of written notice from both Parties of such cancellation; provided, however, if Escrow is not in a condition to close by the Closing Date due to the failure of only one Party to perform, and such failure to perform constitutes a default under this Agreement, and the other Party has fully performed all of the obligations required of it in order to close Escrow, only the performing Party shall be entitled to provide Escrow Holder with written notice of cancellation. In the absence of any written notice of cancellation, Escrow Holder shall proceed to close Escrow as soon as possible.

23. Procedure for Closing. Escrow Holder shall close Escrow by doing the following:

(a) Pay from funds deposited by Buyer all claims, demands and liens necessary to place title to the Property in the condition set forth in Section 6 of this Agreement;

(b) Pay Seller’s share of the closing costs from funds otherwise distributable to Seller;

12 (c) Pay from funds deposited by Buyer (other than the Purchase Price), Buyer’s share of closing costs;

(d) Prorate real and personal property taxes and all other charges or assessments as set forth in Section 19 of this Agreement;

(e) Record Seller’s Grant Deed in the Official Records of Kings County and direct the County Recorder to affix the transfer tax after recording, return the recorded Grant Deed to Buyer with a conformed copy to Seller, and file Buyer’s preliminary change of ownership report in Kings County, as appropriate;

(f) Unless otherwise instructed by Seller, unilaterally deliver the remaining funds held in Escrow, less payments authorized hereunder, to Seller; and

24. Failure to Close. If Escrow shall fail to close as a result of Buyer’ s breach of any of its obligations hereunder, then, in accordance with the provisions of Section 4 hereinabove, upon demand of Seller, Escrow H older shall terminate Escrow, immediately deliver the Deposit, and all documents that Seller previously deposited into E scrow (collectively “Seller’ s Documents”) to Seller, deliver Buyer’s preliminary change of ownership report and all documents that Buyer previously deposited into Escrow (collectively, “Buyer’s Documents”) to Buyer, and charge Buyer for any cancellation charges. If Escrow shall fail to close as a result of Seller’s breach of any of its obligations hereunder, or upon Buyer ’s election to terminate in accordance with the provisions of this Agreement, then upon demand of Buyer, Escrow Holder shall terminate Escrow, immediately cause to be delivered the Deposit and Buyer’s Doc uments to Buyer, deliver Seller’s Documents to Seller, deliver Buyer’s preliminary change of ownership report to Buyer, and charge Seller for any cancellation charges. If Escrow fails to close through no fault of either Buyer or Seller, upon the demand of either Party, E scrow Holder shall return Buyer’s preliminary change of ownership report and Buyer’s Documents to Buyer, return Seller’s Documents to Seller, return the entire Deposit to Buyer, and cancel Escrow, with all cancellation charges to be borne eq ually by Buyer and Seller.

25. Attorneys’ Fees. Subject to Section 4 of this Agreement, in the event of any action between Buyer and Seller seeking enforcement of any of the terms and conditions of this Agreement, or in connection with the Property, the prevailing Party in such action shall be awarded, in addition to damages, injunctive or other relief, its reasonable costs and expenses, including, but not limited to, reasonable attorneys’ fees. Seller and Buyer agree that any such action shall be venued in Kings County, California or in the Federal District Court in Fresno, California.

26. Indemnification of Escrow Holder. Escrow Holder shall be indemnified and held harmless by Buyer and Seller against any and all costs, damages, attorneys' fees, expenses and liabilities which it incurs or sustains in connection with Escrow, except for such items as may be caused by Escrow Holder's misconduct or negligence.

27. Notice. Except as otherwise expressly provided herein, any notice, consent, authorization or other communication to be given hereunder shall be in writing and shall be deemed duly given and received when delivered personally, one (1) business day after being deposited for

13 next-day delivery with a nationally recognized overnight delivery service, or five (5) business days after being mailed by registered or certified mail, with return receipt requested, properly addressed to the Party to receive notice as follows:

To Buyer: Brad Albert

CITY OF HANFORD
3 21 N. Douty
Hanford, CA 93230

To Seller: Robert Loogman
2010 Woodridge Way
Hanford, CA 93230

28. Sole and Only Agreement. This Agreement supersedes any and all other agreements, either oral or in writing, between the Parties hereto with respect to the matters set forth herein and contains all of the covenants and agreements between the Parties regarding said matters. Except as is otherwise provided herein, e ach party to this Agreement acknowledges that no representations, inducements, promises or agreements, orally or in writing, have been made by any Party or anyone acting on behalf of any Party which are not embodied in this Agreement and no other agreement, statement or promise shall be valid or binding.

29. Successors and Assigns. The covenants and agreements contained in this Agreement shall be binding upon and shall inure to the benefit of the successors and assigns of the Parties.

30. Further Action. The Parties agree to perform all further acts, and to execute, acknowledge, and deliver any documents that may be reasonably necessary, appropriate or desirable to carry out the purposes of this Agreement.

31. Waiver. A waiver of any breach of this Agreement by any Party shall not constitute a continuing waiver or a waiver of any subsequent breach of the same or any other provision of this Agreement.

32. Choice of Laws . This Agreement shall be governed by the laws of the State of California and any question arising hereunder shall be construed or determined according to such law.

33. Headings . Headings at the beginning of each numbered Section of this Agreement are solely for the convenience of the Parties and are not a part of this Agreement.

34. Survival . All of the provisions of this Agreement shall survive the Closing and shall remain binding upon the Parties.

35. Time. Time is of the essence, it being understood that each date set forth herein, particularly the Closing, and the obligations of the Parties to be satisfied by such dates have been the subject of specific negotiations by the Parties.

14 36. Counterparts. This Agreement may be signed by the Parties in differ ent counterparts and the signature pages combined to create a document binding on all Parties.

37. Construction. The Parties acknowledge that each Party and its counsel or other representatives have reviewed this Agreement and that the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting Party shall not be employed in the interpretation of this Agreement and any amendments or exhibits hereto.

38. Waiver of Conflict

(a) This Agreement has been prepared by Ty Mizote (“Mizote”) for Buyer and reviewed by Jeffrey Levinson (“Levinson”) for Seller. Levinson and Mizote are partners in the law firm of Griswold, LaSalle, Cobb, Dowd & Gin, L.L.P. (“the law firm”). The law firm is counsel for Buyer and Seller in other matters.

(b) The law firm has explained to each of the undersigned that, in the event of a dispute involving this Agreement, or the rights of the parties hereunder, each of the parties will be required to retain independent legal counsel. The law firm has also explained to each of the undersigned potential areas of conflict of interest in the law firm’s preparation and review of this Agreement for the respective parties.

(c) Each of the undersigned acknowledges the aforementioned advisements and waives any such conflict of interest. Buyer and Seller warrant and represent that, prior to executing this document, each has reviewed this Agreement with that counsel, legal or otherwise, which the undersigned have deemed necessary, reasonable and appropriate to protect their respective interests.

(d) Each of the undersigned is knowingly, willingly, and voluntarily executing this Agreement after such advice and counsel, and with the understanding and intent that this Agreement shall be enforceable by and against each of the Parties in accordance with its terms, and the Agreement will not be void or voidable due to any conflict of interest arising from the law firm’s review of this document for the respective parties.

39. Execution in Counterpart. This Agreement may be executed simultaneously in two (2) or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

[REMAINDER OF PAGE LEFT INTENTIONALLY BLANK]

15 IN WITNESS WH EREOF, the Parties have executed this Agreement on the dates identified below.

Dated: ____________, 2023

SELLER

ROBERT A. LOOGMAN

Dated: ____________, 2023

THOMAS G. LOOGMAN

Dated: ____________, 2023

TRUDY N. SIMAS

Dated: ____________, 2023

COLETTE M. QUINN

Dated: ____________, 2023

JOHN M. LOOGMAN, JR.

Dated: ____________, 2023

LISA M. ASKINS

Dated: ____________, 2023

BUYER

CITY OF HANFORD

By:

TRAVIS PADEN
Mayor

EXHIBIT “A”

SELLER’S EXISTING PROPERTY LEGAL DESCRIPTION

Real property situated in the City of Hanford, County of Kings, State of California, more particularly described as follows:

The West 3/8 of the Northwest Quarter of Section 29, Township 18 South, Range 22 East, Mount Diablo Base and Meridian, in the County of, State of California.

APN: 014-230-030

L:\Projects\2022\220290\ACAD\Legals\40 Acres fee\220290_LEGAL_40 ACRE FEE.docx EXHIBIT “B”

CITY OF HANFORD PARCEL

That portion of the West three-eighths of the Northwest quarter of Section 29, Township 18 South, Range 22 East, Mount Diablo Base and Meridian, situated in the City of Hanford, County of Kings, State of California, more particularly described as follows:

BEGINNING at the Northwest corner of said Northwest quarter of Section 29; Thence along the North line of said Section 29, South 89˚59’35” East, a distance of 990.64 feet to the East line of said West three-eighths;
Thence along said East line, South 00°00’05” West, a distance of 1,758.31 feet, to an intersection with a line being parallel with said North line, said intersection being marked by a 3/4-inch iron pipe tagged “PLS 9399” set 6 inches below grade; Thence along said parallel line, North 89°59’35” West, a distance of 991.26 feet to the West line of said Northwest quarter, the terminus of last said course being witnessed by a 3/4-inch iron pipe tagged “PLS 9399” set 6 inches below grade, 55.00 feet East, as measured along said parallel line, of said West line;
Thence along said west line, North 00°01’18” East, a distance of 1,728.31 feet, to the POINT OF BEGINNING.

Containing 40.000 acres (gross), more or less.

Said Parcel depicted as “City of Hanford Parcel”, on Exhibit “C”, attached hereto and made a part hereof.

3/22/2022

GRANGEVILLE BLVD.
9th AVENUE (ALIGNMENT)LOOGMAND.N.8911351CITY OF HANFORDPARCEL

SELLER RETAINEDPROPERTY
Ó
N
3/22/2022

L:\Projects\2022\220290\ACAD\Legals\40 Acres fee\220290_LEGAL_LATIS LLC PARCEL.docx EXHIBIT “D”

SELLER RETAINED PROPERTY

The West three-eighths of the Northwest quarter of Section 29, Township 18 South, Range 22 East, Mount Diablo Base and Meridian, situated in the City of Hanford, County of Kings, State of California:

Excepting THEREFROM the following:

BEGINNING at the Northwest corner of said Northwest quarter of Section 29; Thence along the North line of said Section 29, South 89˚59’35” East, a distance of 990.64 feet to the East line of said West three-eighths;
Thence along said East line, South 00°00’05” West, a distance of 1,758.31 feet, to an intersection with a line being parallel with said North line, said intersection being marked by a 3/4-inch iron pipe tagged “PLS 9399” set 6 inches below grade; Thence along said parallel line, North 89°59’35” West, a distance of 991.26 feet to the West line of said Northwest quarter, the terminus of last said course being witnessed by a 3/4-inch iron pipe tagged “PLS 9399” set 6 inches below grade, 55.00 feet East, as measured along said parallel line, of said West line;
Thence along said west line, North 00°01’18” East, a distance of 1,728.31 feet, to the POINT OF BEGINNING.

Containing 20.140 acres, more or less.

Said Parcel depicted as “Seller Retained Property”, on Exhibit “C”, attached hereto and made a part of hereof.

3/22/2022

APPRAISAL REPORT

HEROES PARK PROJECT

LATIS LLC

HANFORD, CA

AS OF
JANURAY 15, 2023

PREPARED FOR

BRADLEY ALBERT

PARKS AND COMMUNITY SERVICES DIRECTOR

CITY OF HANFORD

Jacob I. Hower, MAI, R/W-AC
Mark Myers
Jeremy Hansen
Karley Nelson

1306 N. Irwin Street
Hanford, Ca 93230
Phone: (559) 582-9112

March 27, 2023

Bradley Albert
Parks and Community Services Director
City of Hanford

Re: Heroes Park
Latis LLC Property
Hanford, CA

Dear Mr. Albert:

At your request, I have appraised a real property interest for the above captioned real estate. My objective was to form an opinion about the market value for a 100% ownership interest in the subject property's fee simple estate, assuming no liens or encumbrances other than normal covenants and restrictions of record.

This valuation contains analyses, opinions, and conclusions along with market data and reasoning appropriate for the scope of work detailed later herein. It was prepared solely for the intende d use and intended users explicitly identified in the attached report. Unauthorized users do so at their own risk. The appraisal is communicated in the attached narrative report and conforms to the version of the Uniform Standards of Professional Apprais al Practice (USPAP) in effect on this report's preparation date.

This letter is not an appraisal report and only serves as an introduction to the attached appraisal. If this letter is disjoined from the attached appraisal report, then the value opinions set forth in this letter are invalid because the analyses, opinions, and conclusions cannot be properly understood. The value opinion must be placed in the context of the analysis.

The value opinion is affected by all the information, assumptions, hypoth eses, general limiting conditions, facts, descriptions, and disclosures stated in the attached appraisal report.

A portion of the subject property is being acquired by the City of Hanford for a park .

Any decrease or increase in the fair market value of the subject real property prior to the date of valuation caused by the project or improvements for which a portion of such property is acquired, or by the likelihood that the property would be acquired for such project or improvements, other than due to physical deterioration within the reasonable control of the owner, has been disregarded in appraising the subject property.

After careful consideration of all factors pertaining to and influencing value, the data and analysis thereof supports the following value opinion for the subject property as of January 15, 2023:

Market Value

$4,664,000

The value excludes any personal property, furniture, fixtures, or equipment. The value is also subject to hypothetical and extraordinary assumptions outlined on page

8. Respectfully submitted,

Jacob I. Hower, MAI, R/W-AC
Certified General Real Estate Appraiser
California License 3002762 (Expires 11/14/2024)
[email protected]

CERTIFICATION

I certify that, to the best of my knowledge and belief:

− The statements of fact contained in this report are true and correct.

− The reported analyses, opinions, and conclusions are limited only by the reported assumptions and limiting conditions and are my personal, impartial, and unbiased professional analyses, opinions, and conclusions.

− I have no present or prospective interest in t he property that is the subject of this report and no personal interest with respect to the parties involved.

− I have appraised the subject numerous times in the past three years as various easements and acquisitions have been added or ammended. I have performed no other services, as an appraiser or in any other capacity, regarding the property that is the subject of this report within the three-year period immediately preceding acceptance of this assignment.

− I have no bias with respect to the property that is the subject of this report or to the parties involved with this assignment.

− My engagement in this assignment was not contingent upon developing or reporting predetermined results.

− My compensation for completing this assignment is not contingent u pon the development or reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value opinion, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use of this appraisal.

− My analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Uniform Standards of Professional Appraisal Practice.

− I have made a personal inspection of the property that is the subject of this report.

− No one provided significant real property appraisal assistance to the person signing this certification.

− The reported analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Code of Professional Ethics and Standards of Professional Appraisal Practice of the Appraisal Institute.

− The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives.

− As of the date of this report, I, Jacob Hower, have completed the continuing education program for Designated Members of the Appraisal Institute.

Jacob I. Hower, MAI, R/W-AC
Certified General Real Estate Appraiser
California License 3002762 (Expires 11/14/2024)
[email protected]

Limitations & Assumptions

1. Surveys of the subject property have been provided by the City of Hanford. I have relied upon these surveys and Assessors maps to value the larger parcel and acquisition.

2. Title is presumed to be marketable, and that any liens or encumbrances can be removed.

3. No separation of land and building values may be used for any other purpose than that delineated elsewhere in this report.

4. Neither all nor any part of the contents of this report shall be conveyed to the public through advertising, public relations, news, sales, or other media without the written consent and approval of the author, particularly as to the valuation conclusion.

5. No right to expert testimony is included with this report, and the fee for this appraisal does not include payment for pre -trial conferences or taking of depositions.

6. No survey or soil tests of the land have been made by the appraiser.

7. This report and all information contained herein was prepared for the sole and exclusive use of the client. No one except the client specified herein may rely on this report for any purpose. Any person or entity who obtained or reads this report, or a copy thereof, other than the client specified herein, expressly assumes all risk of damages to himself or third persons arising out of reliance thereon or use thereof and waives the right to bring any action based on the appraisal, directly or indirectly, and the appra iser shall have no liability to any such person or entity.

8. Possession of this report or any copy thereof does not carry with it the right of publication, nor may the same be used for any purpose by anyone except the appraiser’s employer, without the pre vious written consent of the appraiser, and in any event, only in its entirety.

9. The information and data reported in this appraisal have been obtained from sources which are deemed to be reliable. They are believed to be accurate but cannot be guaranteed by the appraiser. This condition applies generally throughout the appraisal rep ort regarding verification of data and information about the subject property provided by the client.

10. This appraisal report sets forth all the limiting conditions (imposed by the terms of the assignment or by the appraiser) affecting the analyses, opini ons, and conclusions contained in this report.

11. It is assumed the property complies with all zoning and land use restrictions unless otherwise stated.

12. Unless otherwise stated in this report, the existence of hazardous material, which may or may not be pr esent on the property, was not observed by the appraiser.

The appraiser has no knowledge of the existence of such materials on or in the property. The appraiser, however, is not qualified to detect such substances. The presence of substances such as asbestos, urea–formaldehyde foam insulation or other potentially hazardous materials may affect the value of the property. The value estimate is predicated on the assumption that there is no such material on or in the property that would cause a loss in valu e. No responsibility is assumed for any such conditions or for any expertise or engineering knowledge required discovering them. The client is urged to retain an expert in this field, if desired.

13. Personal property is excluded from the value.

TABLE OF CONTENTS

APPRAISAL OVERVIEW ................................ ................................ ................................ ........................ 7 SCOPE OF WORK ................................ ................................ ................................ .......................... 7 APPRAISAL DEFINITIONS ................................ ................................ ................................ ................. 8 PROPERTY LOCATION CHARACTERISTICS ................................ ................................ ............................ 10 CITY OF HANFORD ................................ ................................ ................................ ...................... 10 NORTHEAST HANFORD SUB-MARKET ................................ ................................ ............................ 16 THE PROJECT ................................ ................................ ................................ ............................ 19 PROPERTY DATA ................................ ................................ ................................ ............................ 20 VALUATION ANALYSIS & CONCLUSIONS ................................ ................................ .............................. 24 VALUE OF THE LARGER PARCEL ................................ ................................ ................................ ........ 26 SALES COMPARISON APPROACH – LAND ................................ ................................ ........................ 26 DESCRIPTION OF THE ACQUISITION ................................ ................................ ................................ 30 VALUATION OF THE PART ACQUIRED AS PART OF THE WHOLE ................................ ............................. 32 VALUE OF THE REMAINDER AS PART OF THE WHOLE ................................ ................................ ........ 32 VALUE OF THE REMAINDER AFTER THE ACQUISITION AND BEFORE CONSIDERATION OF BENEFITS ............ 32 VALUE OF THE REMAINDER AFTER THE ACQUISITION AND AFTER CONSIDERING BENEFITS ...................... 32 NET DAMAGES ................................ ................................ ................................ ........................... 33 TEMPORARY CONSTRUCTION EASEMENT (TCE) ................................ ................................ ............... 33 VALUATION SUMMARY ................................ ................................ ................................ ................. 33 ADDENDA ................................ ................................ ................................ ................................ ..... 34 QUALIFICATIONS OF JACOB I. HOWER, MAI, R/W-AC ................................ ................................ ...... 34 SUBJECT PHOTOGRAPHS ................................ ................................ ................................ ............. 36 LEGAL DESCRIPTION OF THE ACQUISITION ................................ ................................ ...................... 37 SURVEY ................................ ................................ ................................ ................................ .... 38

APPRAISAL OVERVIEW

SCOPE OF WORK

Introduction: The larger parcel (also referred to as the “subject” or “subject property”) is 60 acres and located east of the city of Hanford . A portion of the property will be purchased to facilitate a new 40 -acre park (Heroes Park). The park will be funded by a gran t received by the City of Hanford.

This report is communicated in a way to logically follow the appraiser’s methodology and conclusion of value. Pertinent information such as the market area, conditions, subject property, market data, analysis, and conclusions are summarized.

Effective Date of the Appraisal : I performed the most recent inspection of the subject property including the site and surrounding neighborhood on January 15, 2023.

Appraisal Development: This is the extent of research and anal yses that produce one or more credible opinions of value for one or more specifically identified intended users and an explicitly stated intended use. Depending upon the intended use, intended users, and agreements between the appraiser and the client, the appraisal development process includes but was not limited to the following tasks:

• Observation of the property appraised
• Research for appropriate market data
• Data verification
• Consideration of influential market area, physical, economic, and Governmental factors
• Determination of the subject’s highest and best use
• Development of one or more applicable approaches to value • Reconciliation of value indications
• Preparation of this report following the nine -step State Rule as it applies to partial acquisitions.

Approaches to Value: Applicable and necessary approaches to value were selected for development after consideration of available market data, intended use, and intended user.

The sales comparison approach is the most relevant for transitional land. The cost approach and income approach are not relevant.

Intended Use of the Appraisal: The appraisal will be used to establish the va lue of the property to be acquired and damages to the remainder, if any.

Intended Users of the Appr aisal: The client and intended user of the appraisal is Bradley Albert and the City of Hanford.

Hypothetical Conditions:
- To value the larger parcel in the before condition I have ignored the project and any influence it may have on the subject’s current value.
- To value the remainder, Heroes Park is assumed to have been completed. - Use of these hypothetical conditions may have affected assignment results.

APPRAISAL DEFINITIONS

Market Value:

a) The fair market value of the property taken is the highest price on the date of valuation that would be agreed to by a seller, being willing to sell but under no particular or urgent necessity for doing so, nor obliged to sell, and a buyer, being ready, willing, and able to buy but under no particular nece ssity for so doing, each dealing with the other with full knowledge of all the uses and purposes for which the property is reasonably adaptable and available.

b) The fair market value of property taken for which there is no relevant comparable market is its value on the date of valuation as determined by any method of valuation that is just and equitable.

[California Code of Civil Procedure Section 1263.320]

Fee Simple Estate : Absolute ownership unencumbered by any other interest or estate, subject only to the limitations imposed by the governmental police powers of taxation, eminent domain, police power, and escheat.1

Larger Parcel: In governmental land acquisitions and in valuation of charitable donations of partial interest in property such as easements, the tract or tracts of land that are under the beneficial control of a single individual or entity and have the same, or an integrated, highest and best use. Elements for consideration by the appraiser in making a determination in the regard are contiguity, or proximity, as it bears on the highest and best use of the property, unity of ownership and unity of highest and best use. In most states, unity of ownership contiguity, and unity of use are the three conditions that establish the larger parcel for the consideration of severance damages. In federal and some state cases, however, contiguity is sometimes subordinated to unitary use.2

Partial Taking: The taking of par t of a property for public use under the power of eminent domain; requires the payment of compensation.3

Remainder: In eminent domain condemnation, that portion of a larger parcel remaining in the ownership of the property owner after a partial taking.4

1 The Dictionary of Real Estate Appraisal, Sixth Edition, 2015. 2ibid
3ibid

Damages: Damage to the remainder is the damage, if any, caused to the remainder by either or both of the following:

(a) The severance of the remainder from the part taken. (b) The construction and use of the project for which the property is taken in the manner proposed by the plaintiff whether or not the damage is caused by a portion of the project located on the part taken. [California Code of Civil Procedure Section 1263.420]

Easement: The right to use another’s land for a stated purpose.5

Temporary Easement: An easement granted for a specific purpose and applicable for a specific time period. A construction easement, for example, is terminated after the construction of the improvement and the unencumbered fee interest in the land reverts t o the owner.6

4 ibid
5 ibid
6 ibid

PROPERTY LOCATION CHARACTERISTICS

CITY OF HANFORD

Overview: Kings County is situated in the southern
half of the San Joaquin Valley, an eight -county
region centralized within the State of California.

Hanford is the largest city in Kings County and the
county seat. The city is about 190 miles north of
Los Angeles, and 225 miles south of San Francisco along the corridor of State Highway 99. State Highway 99 stretches from Sacramento to Interstate 5 in Kern County.

Transportation: State Highway 198 bisects Hanford in an east-west direction and provides access to State Highway 99 to the east. Highway 198 also provides access to the city of Lemoore and I -5 to the west. Highway 43 runs north /south and connects Selma, Hanford, Corcoran, Wasco, and Shafter.

Economic/Financial Data: Recent economic statistics for the City of Hanford are summarized below and provided by the US. Census Bureau:

Agriculture: Kings County is a national leader in agricultural production, accounting for $2,343,144,000 in total crop value in 20 21. This represents a 7.5% increase from the 2020 amount. Field crops had increased (10.6%) primarily due to high commodity prices .

Livestock and poultry increase d in value ( 4.4%) primarily due to an increase in milk production. Milk continues to be the top commodity with a value of $722,744,000 in 2021.

Over 100 commodities are produced in Kings County and over 50 countries worldwide receive commodities grown here. The top five are The Republic of Korea, China, Canada, Japan and Taiwan . The following chart summarizes the top ten commodities by value in 2021.

Total Population (2021) 58,496
Average household size: 3.09
High school graduate or higher: 80.0%
Bachelor’s degree or higher: 19.2%
Median household income: $62,413
Per-capita income: $27,379
Mean travel time to work: 22.4 minutes
Owner-occupied housing units: 57%
Unemployment Rate (July 2022): 6.2%

Real Estate: Real estate values have been rising for the past eight years but stagnated briefly between March and July, 2020. New construction is still generally a feasible undertaking and projects are ongoing within the city of Hanford. The chart below is provided by CBRE and indicates an all-time high of capital investment volume.

“Total investment volume in 2022 is projected to increase 5% -10% over 2021 levels, which are on track to roughly equal pre -pandemic volumes from 2019 (currently the highest annual tota l on record). Although industrial and multifamily assets will likely continue to capture the most investor interest given the tailwinds of e -commerce and demographic shifts, investment in office and retail assets should also pick up. Industrial and multifa mily volumes are projected to increase 10% to 15% over 2021 levels, while office and retail volumes will rise 5% -10%. Meanwhile, hotel volume in the first three quarters of 2021 recovered to pre-pandemic levels, a positive sign for the sector heading into 2022.”7

The adjacent chart highlights the
year-over-year national price
trends for 2021. According to
the Real Capital Analytics,
“Prices are on the rise. The RCA
CPPI US National All -Property
Index rose 11.8% YOY in July.

The only other time when the
RCA CPPI grew so quickly was in

7 CBRE Market Outlook Report, 2022

the period from 2004 to 2005 in the midst of the housing boom. The apartment sector delivered the strongest growth for the month, with the index up 13.5% YOY. The laggard was CBD offices where prices fell 4.6% YOY.”8

Industrial: On a national level, “the U.S. industrial sector started to show signs of deceleration during the third quarter. While the development pipeline remains incredibly full and quarterly new supply achieved a new record during the quarter, demand is start ing to wane for industrial product. The headwinds affecting the market remain prevalent and rising inflation is causing uncertainty with consumers which could lead to a decrease in retail sales and lower industrial demand.9

The following charts are provided by Colliers U.S. National Q3 2022 Industrial Report.

“The outlook for the remainder of 2022 continues to be optimistic, although industrial activity is expected to ease as economic conditions worsens. Companies continue to reassess their supply chain strategies, and outsourced distribution will become a more appealing option to some occupiers. This strategy allows product to be kept closer to the end consumer, shortening delivery times and allowing businesses to scale efficientl y. The reshoring of manufacturing is becoming a trend in the U.S. While in the early days, geopolitical turmoil, sanctions and tariffs affecting many products and materials are prompting more companies to move some of their manufacturing back to the U.S. Although these global events increase risks on our supply chain and cost more over the short run, it may prove to be the best cost option when evaluating supply chain resiliency.6F 10 8 Real Capital Analytics: Capital Trends US Big Picture, July 2021 9 Colliers U.S. Industrial Market Outlook Q3 2022
10 Colliers U.S. Industrial Market Outlook Q2 2022

There are 18 manufacturing plants in Hanfor d. Leading group classes of products are petroleum, flour, mill products, synthetic yard, fertilizers, micronutrients, and canned tomato products. The Kings Industrial Park is located on the south side of Hanford and hosues the majority of Hanford’s industrial base , including Del Monte Foods (Co ntadina tomato processing), Exopack (paper manufacturing), Wal -Mart (photo -lab), Cargil (livestock feed), Calcot (cotton storage), and Marquez Brothers (cheese processing) , Tessenderlo Kurley Inc. (mining and engineering) and Pitman Farms (poultry processi ng). The former Pirelli Plant was purchased in 2013 and leased to an electric car manufacturer; no vehicles have been manufactured. Fry’s Electronics recently vacated a 138,282 square foot warehouse in the industrial park, eliminating roughly 150 jobs in Hanford.

The Hanford area is served by the Burlington Northern and Santa Fe Railroad, the Southern Pacific Railroad, and Amtrak. Amtrak San Joaquin serves the San Joaquin Valley from Bakersfield to Sacramento with connections to the Los Angeles region a nd the Bay Area.

Hanford has a small airport for light private aircraft. In October 2001, the city of Hanford received a grant from the FAA for $820,000 to facilitate an expansion of the airport. The runway was extended 1,200 feet, making it 5,000 feet. Commercial airline service is available in the city of Visalia, approximately 30 miles east of Hanford, and in the city of Fresno, approximately 45 miles northeast of Hanford. The Orange Belt bus lines provide bus service to Hanford. State Highways 198 and 43 serve the city of Hanford. Over 30 motor freight carriers service Hanford with overnight deliveries to most points in California.

Residential Housing: Demand continues to outpace supply and building permits for single - family residences have incr eased year over year since 2014. Lennar, Woodside and San Joaquin Valley Homes are all active selling new homes ranging between the mid $300,000’s to upper $600,000’s. The chart below summarizes statistics derived from the Kings County MLS:

Year Sales Average Price Days on Market
2014 492 $197,618 64
2015 610 $204,752 51
2016 590 $221,276 45
2017 688 $230,935 39
2018 681 $244,142 37
2019 694 $265,690 40
2020 702 $281,135 23
2021 732 $328,764 14
2022 572 $363,314 18

Retail: One of the reasons Hanford is attracting workers from neighboring communities is the quality of life and availability of retail services. 12 th Avenue is the main retail corridor and houses many national retailers.

Home Depot is located at the northeast corner of 12 th Avenue and Lacey Boulevard. The 96,000 square foot store employs 150 to 200 people. The southwest quadrant of 12 th Avenue and Lacey Boulevard is home to Target, Michael’s, Marshall’s, Famous Footwear, Alta Beauty, Old Navy and PetSmart. Further west along Lacey Boulevard is a Lowe’s Home

Improvement center. Planet Fitness, Aldi’s, Raising Canes Chicken and Dutch Bro’s Coffee recently opened in front of Lowe’s in a new retail center. A Wal-Mart Supercenter is positioned just south of the Target site.

The Hanford Mall opened in April 1993 at the southeast quadrant of 12 th Avenue and Lacey Boulevard. At that time, the mall was the main retail attraction in the city; however, in recent years the mall has experienced high vacancy and has struggle d to backfill suites. Some of the most recent additions are Serrano Furniture, Urban Air trampoline center and Boot Barn.

An auto mall is located at the northwest quadrant of 12 th Avenue and State Highway 198; it includes 37 acres built to an ARCO and two car dealerships. The most recent activity includes a build to suit Premier Collision Auto Center (recently converted to Caliber Collision) at the west end of the development and a new hotel east of 12 th Avenue along Glendale Avenue.

At the east end of town near Highway 43 and Highway 198, Costco recently constructed a new facility. Starbucks, Verizon, Panda Express , AT&T and Taco Bell are the first to join the location on outparcels.

Office: On a national level, the office market is recovering from the pandemic and many companies continue to work remotely. The following chart is provided by Colliers U.S. Office Outlook Report Q3 2022. According to the report, “the U.S. office marke cooled in Q3 2022.

Vacancy ticked up, while sublease space hit a new record high.”11

11 Colliers U.S. Industrial Market Outlook Q3 2022

There are no industry surveys available for the Hanford Market. Our observations of the local market were based on a visual survey of two key districts: Downtown and Lacey Boulevard. City wide vacancy is estimated to be near 5.0%. Despite low vacancy, rental rates in the Downtown District have been slow to rise. Historically, downtown has struggled to expand and redevelop but some restoration and new construction has taken place.

Family Healthcare constructed a three-story medical clinic that opened in 2017. The City of Hanford occupies roughly 20,000 square feet of office along Irwin Street. A newer two -story retail/office/apartment was constructed, and several ren ovations have taken place, including law offices and insurance offices. The Downtown District’s stagnant rental rates limit appreciation. Rates are typically between $0.60 and $1.25 per square foot, per month.

Hanford’s premier office development is cen tered near Lacey Boulevard and 12 th Avenue.

There are a few PUD style offices constructed in the 1990s and early 2000s. The most recent development is near Lacey Boulevard and Mall Drive. On the north side of Lacey, office pads are available and have been for several years. New construction is limited by feasibility, due to increasing construction costs, despite market rental rates between $1.50 and $2.00 per square foot in the Lacey Boulevard District.

Brokers report positive absorption over the past two years but “leasing office space in Hanford can be very difficul t, especially for triple -net assets,” claims Shari Aguirre of Zeeb Commercial Real Estate. Free-rent and concessions are less prevalent, but tenants generally have the upper hand in lease negotiations, especially in the downtown district.

Summary: The long-term outlook for Hanford is positive. It has a diversified economy based on agriculture, manufacturing, retail, and large public sector employers. The real estate market is prosp erous. Absorption across all commercial sectors is positive; vacancy is declining. Construction is ongoing throughout Hanford with new retail and multifamily projects in the construction phase.

NORTHEAST HANFORD SUB-MARKET

The subject property has a transitional location within the northeastern portion of the city of Hanford. The submarket is generally bound by Fargo to the north, Lacey Boulevard to the south, Highway 43 to the east and 10 th Avenue to the west. East of 9 ¼ most properties are being farmed and remain in the county , although this area is planned for residential development, according to Hanford’s General Plan.

The surrounding area to the north, east and south mainly consists of agricultural with intermittent rural residences. Crop s grown in the area include corn, alfalfa and wheat. The soils are conducive for permanent plantings and there is an abundance of almonds, walnuts, and pistachio trees. Groundwater is typically 100-200 feet in the area and water quality is good. The Hanford City limit currently runs along 9 ¼ Avenue to the west.

West of the subject are numerous residential subdivisions and special purpose properties.

Moving south is Lacey Boulevard, a mixed -use corridor planned for annexation into the city limits. At 9th Avenue, there will eventually be a roundabout and crossing at the railroad tracks. 9th Avenue will then proceed north to connect at the subject’s western boundary line.

Further south is a regional commercial development anchored by Costco, a t the intersection of Highway 43 and Highway 198 . Municipal utilities have been extended to the region for future development.

Summary: The subject is well located as a transitional property. Residential and commercial markets have cooled since mid -2022. Inflationary pressures along with rising interest rates have resulted in extended marketing times. Some developers have sidelined options to purchase land. Despite a slowdown in the residential housing market and softening values, investors remain interest ed in short -midterm development opportunities. T he subject is in the county but could easily be annexed by a developer. Due to the short interim timeline for potential development farming the property is an interim use . The northeast Hanford submarket is primed for rapid expansion . The subject property is well positioned to capture residential demand with proximity to retail services, schools, and parks.

THE PROJECT

The subject property will be purchased for the development of a 40-acre park that will be known as Heroes Park. The diagram below is a conceptual plan of how the park could be constructed.

“The proposed park project is part of an $8.5 million grant application through the California Department of Parks and Recreation’s Statewide Park Development and Community Revitalization Program to create new parks in underserved communities across California…. The conceptual design includes athletic courts, a nearly mile -long walking and jogging path, a skate park, athletic fields, nighttime lighting, playgrounds, an amphitheater, community gardens, shade structures, outdoor fitness equipment, a dog park, a water feature, a disc golf course and a central hub with a playground.”12

12 https://hanfordsentinel.com/news/heroes-park-comes-out-on-top/article_dc544136-0455-5ee1-9fc6-24f917420de4.html

PROPERTY DATA

Larger Parcel Determination: The larger parcel is identified in the following diagram and consists of a single Assessor’s parcel number.

APN Assessor Size (Acres) Ownership
014-230-030 60 Latis LLC

In determining the larger parcel, I considered additional properties under similar use and ownership. The property adjacent to the east is farmed and owned by a family member.

Further, the subject property is irrigated with an offsite agricultural well on the adjacent parcel via informal agreement. Despite the intermingled well use, and contiguity, these parcels are not under the same ownership; therefore, only APN 014-230-030 is concluded as the larger parcel.

Zoning: The subject is zoned AL-10 by Kings County, which is designated as a general agriculture zone with a 10-acre minimum parcel size. Any land divisions must conform to this parcel size. Permitted uses include the production of row crops, fruits, the raising of poultry and livestock, and the p rocessing of agricultural goods. One single -family residence per minimum parcel is permitted. Accessory residential structures can also be allowed.

General Plan Designation: The subject is within the City of Hanford’s General Plan and zoned for neighborhood commercial uses on the north end and low-mid density residential

on the south end . Due to the short-term development timeline , the General Plan zoning designations are given heavy consideration.

Soils: According to the USDA Web Soil Survey the subject is comprised of class 2 soil.

Water: There is a single well on the north side of the property near the residence. According to the owner, the well is approximately 300 feet deep with a 30 -horsepower submersible pump. The well was formerly utilized to flood irrigate the subject but over the years the gallons per minute declined. Subsequently the wel l was converted for domestic use but still has the capacity to farm something less than 60 acres.

When the agricultural well was converted to domestic use, the neighbors well was connected to the subject’s underground pipeline and valves along the northern property line.

Agricultural irrigation is now conveyed from the neighboring property.

Plantings: The subject site is planted to annual row crops.

Improvements: There is a single -family residence that is 1,281 square feet and constructed in 1982. The residence is owner -occupied, in average condition with three bedrooms and one bathroom. I did not view the interior of the residence as it has only interim value.

Easements or Encroachments: A preliminary title report was requested but not provided.

Land Preserve: The larger parcel is enrolled in the Williamson Act.

Property History: The subject property has not sold in the prior three years and has not been formally marketed for sale by a broker. The property owner has been in private negotiations with the City of Hanford to sell a portion of the larger parcel, but that amount is largely being determined by an appraisal.

FEMA Flood Zone : The subject property is within flood zone X. FEMA Panel N umber 06031C0205C dated 06/16/2009.

VALUATION ANALYSIS & CONCLUSIONS

Highest and Best Use in the Before Condition

In the valuation of the subject property, consideration has been given to its highest and best use. The highest and best use analysis involved a study of the present use of the property, uses of surrounding properties, and zoning availability for the subj ect. Highest and best use may be defined as follows:

“The reasonably probable and legal use of vacant land or an improved property, which is physically possible, appropriately supported, financially feasible, and that results in the highest value” (The Appraisal of Real Estate, 6thEdition, p.275)

For highest and best use of both the land as if vacant and the property as if improved, a use must meet four criteria. The criteria for highest and best use are that the use must be physically possible, legall y permissible, appropriately supported, and financially feasible.

Usually, these criteria are considered sequentially as it makes no difference that a use is financially feasible if it is physically impossible to construct the improvements or if such an improvement is not legally permitted.

There are two types of highest and best use - “as though vacant” and “as improved.” The former presumes the land is vacant and available for development. The later considers whether the improvements should be retained as is, renovated, remodeled, repaired, enlarged, demolished, or converted to an alternate use.

Highest and Best Use As Vacant
The appraiser has examined the physical characteristics of the larger parcel including its access, visibility, shape, topography and soil. The site is suitable for farming numerous types of commodities including both field crops and permanent plantings. The size and shape are economic, ground water is available . The site is also ideally located for residential subdivision development and is within the City of Hanford’s General Plan. Without any project influence it is probable the subject could have been annexed and developed within a two to five-year period.

Based upon this analysis, the highest and best use of the larger parcel, assuming it was vacant and available for development , is to farm open row crops until annexation and residential development occurs. The most likely buyer is a developer.

Highest and Best Use as Improved
The larger parcel is improved with a single-family residence and farmed to row crops. Due to the near-term development potential of the subject property, the land value has appreciated beyond the value as an agricultural use . For this reason, the highest and best use is continued farming, until the property is annexed and developed to residential. The residence should be occupied or leased until development is feasible. The development timeline is estimated by the appraiser at two to five years. The most likely buyer is a developer.

Highest and Best Use After the Acquisition
In the after condition the remainder is farmable if a water source from the neighboring property can be secured. Due to the subject’s short -term development timeline, it is not feasible to drill a new well or install underground pipelines and valves. The subject could be dry farmed or potentially rented for ground water credits. In my opinion, the property should be dry farmed during the interim, until it is developed to single -family residences. The most likely buyer is a developer.

VALUE OF THE LARGER PARCEL

SALES COMPARISON APPROACH – LAND

Sale 1 is located on the south side of
Fargo Avenue west of 12 th Avenue in the
city of Hanford. The property consists of
just over 20 acres and was purchased by
San Joaquin Valley Homes . The
negotiated price for the takedown was
$174,346 per acre.

Sale 2 is at the southeast corner of Fargo
Avenue and Centennial Drive, in the city of
Hanford. The site is phase two of San
Joaquin Valley Homes new development.

The property consists of 24.24 acres
zoned for residential development. In
December 202 1, the property was
purchased for $ 3,882,642 or $ 160,175
per acre.

Sale 3 is on the east side of Centennial
Drive, south of Fargo Avenue, in the city of
Hanford. The site is phase one of San
Joaquin V alley Homes new development.

The property consists of 39.63 acres
zoned for residential development. In
December 2020, the property was
purchased for $6,024,930 or $152,030
per acre.

Sale 4 is on the east side of 13 th Avenue,
north of Stagecoach Drive. The property is
on the western edge of the city of Hanford
and is in the process of being
incorporated into the city. The site is
phase two of Lennar’s Ironside
community. The property consists of

24.62 acres with future zoning of low
density resident ial. In December 2020,
the property was purchased by Lennar
Homes for $3,673,205 or $149,196 per
acre.

Sale 5 is on the east side of 13 th Avenue,
north of Mustang Drive, in Hanford, CA.

The site consists of 37.50 acres that were
formerly used as a da iry. In April 2020,
Woodside Homes purchased the property
for $3,803,000 or $101,413 per acre.

Prior to development, concrete and debris
from the old dairy needed to be removed
from the site. We have estimated the cost
to clean the site at $125,000. There was
a farmhouse on the dairy that the seller
kept. The homesite consisted of
approximately three acres. Woodside
Homes purchased a portion of the
homesite in a separate transaction that is
not included in this analysis.

Sale 6 is located at the northeast corner
of Grangeville Boulevard and 13th Avenue,
in Hanford, CA. The site consists of 27.27
acres used for field crops. The property is
in the city of Hanford sphere of influence
and planned for low density residential. In
January 2020, the property was
purchased by Lennar Homes for
$3,600,000 or $123,013 per acre. The
property was subsequently incorporated
into the city and development is
underway.

The sales display a range from $ 104,747 to $156,911 per acre. All sales are superior in their northwest Hanford location. As the development land market softens, the most recent sales require negative adjustments, and the mature sales are likely consistent with current market trends.

Sale 5 is the most similar in size to the subject. Due to economies of scale, Sale 5 is heavily weighted in the analysis . That being noted, the buyer took additional risk, to clear an old dairy facility from the property. In my opinion, Sale 5 is a good low -end indicator, but the subject’s value should be below all other sales on per acre basis. In my opinion, the underlying land is worth $115,000 per acre. The underlying land is valued as follows:

60 Acres X $115,000/ Acre = $6,900,000
Subject Sale 1 Sale 2 Sale 3 Sale 4 Sale 5 Sale 6
Location 8887 Grangeville
Blvd. Hanford, CA
SS of Fargo, E. of
Centennial Dr.,
Hanford
SEC of Fargo
Avenue and
Centennial Drive,
Hanford
E.S. of
Centennial
Drive, South of
Fargo Avenue,
Hanford
E.S. of 13th
Avenue, north of
Stagecoach Drive,
Hanford
8403 13th
Avenue, Hanford
NEC of
Grangeville Blvd
and 13th Avenue,
Hanford
APN 014-230-030 Pending 009-030-170 009-030-158 009-030-161 009-030-042 009-030-146 Date of Sale - June-2022 December-2021 December-2020 December-2020 April-2020 January-2020 Doc. Number - 11501 28683 23601 23625 6366 248
Buyer - Presidio JJR Bella
Vista II, LLC, et al
Presidio JJR Bella
Vista II, LLC
Presidio JJR
Bella Vista II,
LLC
Lennar Homes of
CA, Inc.

Woodside 06N LP Lennar Homes of
CA Inc.

Seller - Cal-Clark Farms,
Inc
Cal-Clark Farms,
Inc
Cal-Clark Farms,
Inc
Cal-Clark Farms,
Inc
McCutcheon Cal-Clark Farms,
Inc
Source - Contract Contract Contract Contract Buyer Seller Sale Price - $3,601,980 $3,882,642 $6,024,930 $3,673,205 $3,803,000 $3,600,000 Price/Acre - $174,346 $160,175 $152,030 $149,196 $101,413 $132,013 Site Size (Ac.) 60.00 20.66 24.24 39.63 24.62 37.50 27.27 Zoning AL-10 R-L-5 R-L-5 R-L-5 AE-20 AE-20 AE-20
Future Land Use Low-Mid Density
Residential
Low Den
Residential
Low Den
Residential
Low Den
Residential
Low Den
Residential
Low Den
Residential
Low Den
Residential
Improvements Residence None None None Residence Old Dairy None Adjustments
Buildings/Other $0 $0 $0 $0 $125,000 $0
Net Sale Price $3,601,980 $3,882,642 $6,024,930 $3,673,205 $3,928,000 $3,600,000 Net SP/Acre $174,346 $160,175 $152,030 $149,196 $104,747 $132,013 Property Rights Fee Simple 0% 0% 0% 0% 0% 0%
Adj. Price/Ac. ----- $174,346 $160,175 $152,030 $149,196 $104,747 $132,013 Financing Conventional 0% 0% 0% 0% 0% 0%
Adj. Price/Ac. ----- $174,346 $160,175 $152,030 $149,196 $104,747 $132,013 Sale Conditions Normal 0% 0% 0% 0% 0% 0%
Adj. Price/Ac. ----- $174,346 $160,175 $152,030 $149,196 $104,747 $132,013 Exp. After Sale None 0% 0% 0% 0% 0% 0%
Adj. Price/Ac. ----- $174,346 $160,175 $152,030 $149,196 $104,747 $132,013 Market Conditions Current -10% -5% 0% 0% 0% 0%
Adj. Price/Ac. - $156,911 $152,166 $152,030 $149,196 $104,747 $132,013 Rating Superior Superior Sl. Superior Sl. Superior Sl. Inferior Sl. Superior

COMPARABLE LAND SALES

The subject is also improved with a residence that will provide interim income. I estimate annual rent at $18,000 (net of costs) based on conversations with property managers and review of actual lease comparables contained in my workfile. An appropriate discount rate of

6.0% is applied to the lost income stream that would otherwise have been received from interim leasing of the improvements . The value of $18,000 for three years discounted to a present value utilizing a rate of 6.0% equates to $36,000 (rounded). The value of the residence is added to the value of the underlying land.

60 Acres X $115,000/ Acre = $6,900,000
Interim Residence Value = $36,000

Value of the Larger Parcel =

$6,936,000

DESCRIPTION OF THE ACQUISITION

The acquisition encompasses the northern portion of the larger parcel and is 40 acres in size. The area is improved with irrigation pipeline and val ves, single family residence and former agricultural well, utilized as a domestic well . The remainder is 20 acres and situated at the south end of the subject site. The remainder will be accessible via road right of way, along the western property line that will be established as part of the Heroes Park project.

VALUATION OF THE PART ACQUIRED AS PART OF THE WHOLE

Fee Acquisition: The fee acquisition is valued at 100% of fee value as follows:

40 Acres X $115,000/ Acre = $4,600,000
Interim Residence Value = $36,000
Total Value of the Acquisition = $4,636,000

VALUE OF THE REMAINDER AS PART OF THE WHOLE

Value of the Larger Parcel Before the Taking $6,936,000 Value of the Part Taken ($4,636,000)
Value of the Remainder as Part of the Whole $2,300,000

VALUE OF THE REMAINDER AFTER THE ACQUISITION AND BEFORE CONSIDERATION OF BENEFITS

The remainder should continue to be farmed in the after condition until annexation and development occur. As a result of the acquisition the subject loses the ability to irrigate the remainder. The cost to reestablish a pipeline and valves to the irrigate the remainder is compared to the loss of income that would result from not farming. As previously forecast, a three-year timeline is reasonable for development of the remainder. Three years of lost farmland rent is compared to the cost of re -establishing a pipeline to the neighboring property, an arrangement the owner currently has.

Open land with access to well water is renting at approximately $500 per acre (see Addenda). This results in a loss of $10,000 per year ($30,000 total) of rental income to the subject remainder. Using a rate of 3.0%, the income stream is discounted to a present value of $28,000 (rounded). Based on my review of Marshall Valuation and contractor bids for similar improvements, it is my opinion that a 1,000 linear foot pipe line and valves would cost at least as much as the diminution in value resulting from the taking. In this case, the lost revenue accounts for all damage incurred by the property owner. The value after the acquisition and before benefits, is calculated as follows:

20 Acres X $115,000 = $2,300,000
Lost income from renting irrigated open farmland = (28,000)

Remainder Value After the Acquisition before Benefits = $2,272,000

VALUE OF THE REMAINDER AFTER THE ACQUISITION AND AFTER CONSIDERING BENEFITS

There are no benefits.

NET DAMAGES

Damages are the difference between the value after remainder before the taking and the value after the remainder after the taking with benefits:

Value of the remainder before the taking

$2,300,000

Value of the remainder after with benefits

($2,272,000)

Damages $ 28,000

TEMPORARY CONSTRUCTION EASEMENT (TCE)

There are no temporary construction easements.

VALUATION SUMMARY

The valuation summary is outlined in the following chart.

Value of the Larger Parcel 6,936,000$
Value of the Part Taken as Part of the Whole (4,636,000)$ 4,636,000$ Value of the Remainder as Part of the Whole 2,300,000$
Value of the Remainder, Before Benefits 2,272,000$
Damages 28,000$
Remainder with Benefits 2,272,000$
Benefits -$
Net Severance Damages 28,000$
Fair Market Value of the Permanent Rights Acquired 4,664,000$ Fair Market Value of the Temporary Rights Acquired -$
Total Fair Market Value of Permanent and Temporary Rights 4,664,000$ Total Fair Market Value of Permanent and Temporary Rights Rounded $4,664,000

SUMMARY OF FAIR MARKET VALUE

ADDENDA
QUALIFICATIONS OF JACOB I. HOWER, MAI, R/W-AC
[email protected]
www.jhower.com

STATE OF CALIFORNIA CERTIFICATION
California Certified General Real Estate Appraiser #3002762 State of California Department of Real Estate #01892235

PROFESSIONAL AFFILIATIONS
The Appraisal Institute - designated member
Tulare County Association of Realtors
International Right of Way Association- designated member

APPRAISAL EXPERIENCE
J. Hower & Associates, Inc. Hanford, CA January 1, 2022 – Present, Owner, CEO Simon & Hower, Inc. Hanford, CA January 1, 2018 - Present, CEO Simon Company Inc. Hanford, CA 2010-January 1, 2018, Real Estate Appraiser

EDUCATION

California State University, Fresno
Bachelor of Science, Criminology- Law Enforcement Option – 2008

Appraisal Institute
Numerous courses including all prerequisites to attai n the MAI designation and multiple condemnation and litigation courses/seminars.

International Right of Way Association
Numerous courses and prerequisites to attain the R-W/AC designation.

TYPES OF PROPERTIES APPRAISED

Commercial Properties
Office, medical, industrial, apartments, retail, subdivisions, vacant land, self -storage, special purpose, cold storage, warehouse, packing facilities

Agricultural
Nut crops, stone fruit, citrus, irrigated field crops, rangeland, conservation easements, vineyards, dairies

RIGHT-OF-WAY EXPERIENCE

Appraisal experience involving full and partial acquisitions, road widenings, permanent and temporary easements, overcrossings, undercrossings and High-Speed-Rail corridor

PARTIAL LIST OF CLIENTS

Cities and Government & Administrative Agencies: Hanford, Lindsay, Coalinga; Porterville, Avenal, Tulare, Corcoran, Tulare County, Kings County, USDA, SBA, Kings Area Rural Transit

Attorneys: Dias Law Firm, Inc.; Kahn, Soares & Conway, LLP.; Law Offices of Mark A. Wasser; Griswold, LaSalle, Cobb, Dowd & Gin, LLP; Chielpegian Cobb; Ruddell Cochran Stanton Smith & Bixler, LLP; McCormick Barstow, LLP ; Hatherley Law; Lerandeau & Lerandeau Divorce Attorneys, Motschiedler, Michaelides, Wishon, Brewer & Ryan, LLP; Fennemore Dowling Aaron, Wild Carter & Tipton, Wanger Jones Helsley PC

Lenders: Bank of the Sierra; Bank of the West; Westamerica Bank; Central Valley Community Bank; Valley Republic Bank ; Tri Counties Bank; Rabobank; Wells Fargo Bank; Comerica Bank; Agribusiness Financial Inc.; First Bank; Murphy Bank; Corpo rate America Lending; Zions Bank; AgFi; Citizens Business Bank; Mechanics Bank; Farm Credit West; Madera Farm Credit; Heartland Financial

Healthcare: Adventist Health, Tulare Local Healthcare District, Corcoran District Hospital , Family Healthcare Network

SUBJECT PHOTOGRAPHS

East view of acquisition area

South view of acquisition area

West view of acquisition area

East view along Grangeville Boulevard

Single family residence

Domestic well

LEGAL DESCRIPTION OF THE ACQUISITION

SURVEY

TRENDS IN AGRICULTURAL LAND & LEASE VALUES 2022 (KINGS COUNTY REGION)

END OF REPORT

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