MEETING
SPECIAL RICHMOND CITY COUNCIL
(Meeting is virtual)
Thursday, February 24, 2022, 5:30 p.m.
Community Services Building
440 Civic Center Plaza
Richmond, CA 94804
Members:
Thomas K. Butt, Mayor
Demnlus Johnson III, Councilmember at Large
NathanielBates, Councilmember at Large
Claudia Jimenez, Councilmember District 6
Eduardo Martinez, Vice Mayor at Large
Melvin Willis, Councilmember District 1
Gayle McLaughlin, Councilmember District 5
Link to City Council Agendas/Packets
http://www.ci.richmond.ca.us/4157/City-ofRichmond-Council-Meetings Register to receive notification of new agendas, etc.
http://www.ci.richmond.ca.us/list.aspx
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PURSUANT to the Governor of the State of California’s Assembly Bill 361 and in the interest of the public health and safety, attendance at the City of Richmond City Council meeting will be limited to Council members, essential City of Richmond staff, and members of the news media.
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During the pendency of Assembly Bill 361, the language in this Advisory portion of the agenda supersedes any language contemplating in-person public comment.
Pages
A. OPEN SESSION TO HEAR PUBLIC COMMENT BEFORE CLOSED SESSION 5:30 p.m.
B. ROLL CALL
C. CLOSED SESSION
.
C.1. CONFERENCE WITH LEGAL COUNSEL - EXISTING LITIGATION (paragraph (1) of Subdivision [d] of Government Code Section 54956.9) SPRAWLDEF et al. v. City of Richmond•
The Guidiville Rancheria of California, et al. v. The United States of America, et. al.
•
North Coast Rivers Alliance et al./Point Molate Alliance et al. v.
City of Richmond
•
C.2. CONFERENCE WITH LEGAL COUNSEL - ANTICIPATED LITIGATION (Significant exposure to litigation pursuant to paragraph (2) or (3) of Subdivision (d) [as applicable] of Government Code Section 54956.9) Three Cases•
In light of the California Court of Appeal's decision in Fowler v. City of Lafayette, the City Attorney's Office is attaching to this agenda four communications regarding the amended
judgment and various agreements related to Point Molate.
These letters provide the existing facts and circumstances for going into closed session on these items pursuant to
California Government Code Section 54956.9(d)(2) and
(e)(3).
D. PUBLIC COMMENT BEFORE CLOSED SESSION
E. ADJOURN TO CLOSED SESSION
________________________________________________________
F. SPECIAL MEETING OF THE RICHMOND CITY COUNCIL
6:30 P.M.
G. ROLL CALL
H. PUBLIC COMMENT INSTRUCTIONAL VIDEO
I. STATEMENT OF CONFLICT OF INTEREST
J. AGENDA REVIEW
K. REPORT FROM THE CITY ATTORNEY OF FINAL DECISIONS MADE
DURING CLOSED SESSION
L. REPORT FROM THE CITY MANAGER (public comment allowed under Open Forum)
M. NEW BUSINESS
M.1. Risks to the City from Formation of a Community Facilities District (CFD) for Point Molate, Role of Goals & Policies Statement in Addressing These Risks
6 RECEIVE a report and DISCUSS the financial feasibility of the proposed Winehaven Legacy/Point Molate Project and the risks posed to the City by the formation of a Community Facilities District (CFD).
N. ADJOURNMENT
February 24, 2022
Department
DATE: February 24, 2022
TO: Mayor Butt and Members of the City Council
FROM:
Anil Comelo, Interim Deputy City Manager
Belinda Brown, Director of Finance
Joe Leach, PE, Director of Public Works
Lina Velasco, Director of Community Development
Subject:
Risks to the City from Formation of a Community
Facilities District (CFD) for Point Molate, Role of Goals & Policies Statement in Addressing These Risks
FINANCIAL IMPACT: A Fiscal Impact Study was prepared on behalf of the developer, and the Study was peer reviewed by the City’s consultant. The Study projects a positive long-term
impact of the development. However, adverse fiscal
impacts in the short term are possible.
PREVIOUS COUNCIL
ACTION:
November 23, 2021
January 25, 2022
February 1, 2022
This item was agendized for January 25,2022, and
carried over to the February 1, 2022, Council Meeting
without formal action.
The technical consulting team for the Community Facilities District formation was approved at the meeting of
November 23, 2021.
STATEMENT OF THE
ISSUE:
The purpose of the study session is to review the risks to the City from formation of a CFD for Point Molate, and to present potential mitigation measures for these risks,
including a statutorily required Statement of Goals &
Policies.
AGENDA
REPORT
February 24, 2022
RECOMMENDED ACTION:
RECEIVE a report and DISCUSS the financial feasibility
of the proposed Winehaven Legacy/Point Molate Project
and the risks posed to the City by the formation of a
Community Facilities District (CFD).
DISCUSSION:
The Winehaven Legacy/Point Molate Project has been supported by significant financial analysis including studies demonstrating its financial feasibility. One of the actions required under the Development Agreement is to form a Mello Roos Community Facilities District (“CFD”). The Development Agreement provides that such a CFD cannot burden the City’s General Fund. In this regard, the City’s consultant team has been preparing information related to risks to the City arising from the formation and funding of a CFD. Additionally, at a City Council meeting on February 1, 2022, Councilmembers asked a number of questions about those risks and the consultant team encouraged submission of additional questions from the Council. After further analysis, the risks identified by the consultant team for the Council in the formation of the CFD are summarized as follows:
o Risk 1: The CFD allows the development of Point Molate to proceed, and the project has an adverse fiscal impact on the City's General Fund. o Risk 2: The CFD is formed, but bonds are never issued and the project is de facto abandoned.
o Risk 3: The CFD issues bonds and the bonds go into default. o Risk 4: The CFD issues bonds but the development of the project proceeds very slowly or is stalled for years.
Below is a more detailed discussion of each risk described above:
Risk 1: The CFD allows the development of Point Molate to proceed and the project has an adverse fiscal impact on the City's General Fund.
The primary fiscal challenge associated with the development of Point Molate is the need for both a fire station and a police substation to serve the area. While the DDA specifies that a combined police and fire station must be completed at the expense of the developer prior to sale or rental of housing units in Point Molate, there is no such special provision in the DDA regarding developer funding of the operational costs.
During the entitlement phase of land use planning, a Fiscal Impact Study was prepared by EPS on behalf of the developer, and the Study was peer reviewed by the City’s consultant. These studies were reviewed by the City Council prior to the granting of development entitlements in September 2020. The EPS study projects a positive long -term fiscal impact from the development, taking into consideration the full operational costs for the new fire and police stations in P oint Molate. City staff
February 24, 2022
has checked the assumptions on fire and police operating expenses and found them substantially accurate. The combined costs of staffing and operating the proposed combined police and fire station in Point Molate projected by the Fiscal Impact Study done in 2020 were estimated to be $5.2 million per year. City staff has done a detailed analysis of the costs to staff and operate the proposed combined police and fire station in Point Molate. The updated staff analysis indicated an annual cost of $5.355 million per year.
However, the staff analysis also indicated a cost of about $1.7 million to acquire police and fire rolling stock for the new station. In addition, this equipment will need to be replaced over time.
Given all these considerations, the peer reviewed fiscal impact analysis would indicate, when adjusted for SunCal's current development plans for Pt. Molate, an annual fiscal surplus of approximately $7.5 million per year.
However, prior to build out, staff and the finance team have determined that the need to fund $5 million+ per year in fire and police operating expenses for Pt. Molate will result in a negative fiscal impact prior to completion of about 600 of the 1,400+ units planned for Pt. Molate.
At the study session, the City's finance team will present potential mitigation measures for this risk, including one offered by SunCal.
Staff and the financing team have been presented with a number of specific fiscal impact questions from Council members. Answers to these questions will be provided at the study session as well.
Risk 2: The CFD is formed, but bonds are never issued and the project is de facto abandoned.
The formation of a CFD for a particular real estate development, such as Point Molate, does not directly trigger or result in the issuance of bonds or the actual construction of the project. There are a number of examples in California where CFD's were formed, and years passed before bonds were issued and the project started development. In a few cases, the project was de facto abandoned by the developer.
In this case the City's fiscal risk would arise from the need to provide basic public safety services to the Pt. Molate area in a vacant land and/or open space state. Neither staff nor the financing team has any estimates of what these costs would be.
If bonds are not issued, the City would not have any of the risks associated with bond issuance, as described under Risk 3.
With respect to the risk of project failure, staff and the financing team have been presented with a number of questions regarding anticipated absorption rate a development of Pt. Molate. While an absorption study has not been prepared at this time, staff and the finance team are developing answers to these questions for
February 24, 2022
presentation at the study session. "Best practices" amongst California public agencies with respect to the absorption study and appraisal for a potential CFD project is to require these documents at the time of bond issuance, as opposed to the time of CFD formation. Since two to three years may transpire between the time of CFD formation and the time when home construction can start, these studies are typically considered speculative at the time of CFD formation.
Risk 3: The CFD issues bonds and the bonds go into default.
As noted in a presentation to Council on November 23rd, the worst case for bond issuance is that the first series of bonds for a Pt. Molate CFD are issued, but the developer stops paying CFD special taxes and de facto abandons the project. Such a failure would most likely be accompanied by a bankruptcy filing by the developer.
Given the need to fully fund and construct a $40 million+ utility stub across 580 and up Stenmark Drive before the first building permit can be issued, the project could conceivably remain non-developable until the utility stub is completed.
In this case, the City would be required to (1) pursue statutory foreclosure proceedings against taxable property within the CFD and (2) retain bankruptcy counsel in the event the developer files for bankruptcy as well. Again, as noted before, the City has absolutely no obligation to pay debt service on defaulted CFD bonds. The CFD bonds are solely secured by special taxes on taxable property within the CFD. The disclosure to potential bond investors will make this fact very clear.
Nevertheless, the legal costs of statutory foreclosure and bankruptcy proceedings can be significant. Bankruptcy counsel for the City would be very expensive and could easily run $100,000+ per year. Note however that all of these expenses are reimbursable in full from future special taxes from the CFD. Note also that a Federal bankruptcy court has no authority to amend or extinguish the tax lien for the CFD. This means that it is extremely likely that the City will be repaid in full, with interest, for its expenses in pursuing foreclosure and representing itself in bankruptcy court.
The worst case in the City's municipal advisor's experience with respect to this interim adverse impact on the General Fund is with the Ritter Ranch CFD for the City of Palmdale. Foreclosure and bankruptcy court expenses over a 6 year period totaled approximately $1 million.
Potential mitigation measures for this risk will be presented as part of the Goals & Policies Statement discussion described below.
Risk 4: The CFD issues bonds but the development of the project proceeds very slowly or is stalled for years.
As noted above, staff and the City's finance team believe that the "cross-over point" where General Fund revenues from the project exceed General Fund expenses occurs when about 600 units have been constructed and occupied in Pt. Molate. The question is how does the City deal with the adverse fiscal impact of the project prior to that point?
February 24, 2022
This question goes to the core question of the anticipated absorption rate for the Pt.
Molate project. SunCal anticipates build out over a 7 year period, measuring from the time the first building permit can be pulled. City staff and its finance team have not seen any market feasibility or absorption study prepared for SunCal. As noted above, Council members have asked appropriate questions about the likely absorption schedule for the project. However, even if such a study were publicly available now, it would remain very speculative. The time for CFD formation, design, permitting and construction of the utility stub and CFD bond issuance in all likelihood puts the first building permit at least 2 years, if not 3 years in the future. Any absorption estimates done now may not be applicable for the real estate market 2 or 3 years from now.
The question then becomes, how can the City best protect itself against adverse fiscal impacts from Pt. Molate prior to the "crossover point", regardless of the actual absorption rate?
Staff and the finance team will present a proposal for delivering significant mitigation of this risk at the study session. The proposal is comprised of two key elements: (1) a conditional offer from SunCal to pay extra special taxes for up to 5 years to mitigate this risk and (2) a proposal to use the City's 50% share of the DDA mandated $45 million payment from SunCal, as well as real estate transfer taxes generated by the Pt. Molate project to fund a "Fiscal Security Fund". We believe that this proposal will significantly mitigate the adverse fiscal impact prior to build out, but will not absolutely eliminate it.
Goals and Policies Statement. State law requires that any public entity considering approval of formation of a CFD adopt a Goals and Policies Statement. This statement addresses the following major policies issues regarding CFDs:
Types of land development for which CFDs may be used. Types of facilities and services that CFDs may be used to fund. Minimum ratio of appraised or assessed value to bond amount ("value-to-lien" ratio) for any bond issuance.
Any requirements for developer cash contributions for funding facilities. Method of bond sale for CFD bonds, e.g., public offering and/or private placement.
Maximum term of any CFD bonds.
Minimum land use entitlements required for issuance of bonds. Security requirements from developers for the issuance of bonds Minimum requirements for CFD bond sale investor disclosure document. Requirements for an absorption study and an appraisal prior to bond issuance
The City Council will set all of these requirements through adoption of the Goals and Policies Statement. The Goals and Policies statement is typically adopted at the same meeting that the Resolution of Intent is adopted. Again, as noted above, the constraints in the Goals and Policies Statement are not covered by either the Resolution of Intent or Resolution of Formation in the CFD formation process.
February 24, 2022
Discussion of Proposed Draft Goals & Policies Statement
We want to direct the Council's attention to certain sections in particular o f the draft Goals & Policies Statement:
Section V - Security. This section mandates a 5 to 1 value to lien ratio (ratio between appraised value and bond amount. In addition, it also requires that the developer post a letter of credit payable to the City equ al to 2 years of debt service on their undeveloped property at the time of bond issuance.
Section VI - Disclosure Requirements. This section, amongst other things, requires the developer to disclose all of their past history with other CFD's, including tax delinquencies and bankruptcies.
Section VII - Other Requirements for Land Developers. This section, amongst other things, provides that the City can require funding by developer cash or from bond proceeds of a $100,000 reserve to fund the City costs i n the event of developer tax delinquencies or a bankruptcy.
Section XI - Privately Placed CFD Debt. This section provides that if debt for a CFD is privately placed with investors who absolve the City of any responsibility for disclosure, that the value to lien ratio may be as low as 2.5 to 1, and the letter of credit requirement can be waived.
DOCUMENTS ATTACHED:
Attachment 1 – Draft Statement of Goals and Policies
Attachment 2 – Thirty Year Fiscal Impact Projections for Point Molate Attachment 3 – CFD Debt Service Cash Flows
Attachment 4 – Answers to Council Member Questions for February 24, 2022 Study Session
Attachment 5 – Valuation Study dated February 7, 2022, for Potential Sales Prices of Residential Units in Point Molate by Integra Realty Resources
4871-6356-2503v7/200952-0001
CITY OF RICHMOND
STATEMENT OF GOALS AND POLICIES FOR THE USE OF
THE MELLO-ROOS COMMUNITY FACILITIES ACT OF 1982
ATTACHMENT 1
i
4871-6356-2503v7/200952-0001
TABLE OF CONTENTS
SECTION PAGE
I. INTRODUCTION ..................................................................................................................... 1 II. DEFINITIONS .......................................................................................................................... 1 III. ELIGIBLE PUBLIC FACILITIES, SERVICES AND PRIORITIES....................................... 2 IV. CREDIT QUALITY REQUIRED OF BOND ISSUES ............................................................ 3 V. SECURITY ............................................................................................................................... 3 VI. DISCLOSURE REQUIREMENTS ........................................................................................... 4 VII. OTHER REQUIREMENTS FOR LAND DEVELOPER ......................................................... 4 VIII. EQUITY OF TAX ALLOCATION FORMULAS ................................................................... 5 IX. APPRAISALS ........................................................................................................................... 6 X. POINT MOLATE COMMUNITY FACILITIES DISTRICT .................................................. 8 XI. PRIVATELY PLACED DEBT ................................................................................................. 8 XII. EXCEPTIONS TO THESE POLICIES .................................................................................... 9
ATTACHMENT 1
1 4871-6356-2503v7/200952-0001
STATEMENT OF GOALS AND POLICIES FOR THE USE
OF THE MELLO-ROOS COMMUNITY FACILITIES ACT OF 1982
I. INTRODUCTION
The City of Richmond (the “City”) has developed the following Goals and Policies on debt financing as guidelines to assist concerned parties in following the City’s approach to community facilities district debt financing. It is the City’s goal to support projects which address a public need and provide a public benefit. Proposed projects requesting community facilities district debt financing will be evaluated to determine if such financing is financially viable and in the best interest of the City and current and future City and project residents. These Goals and Policies are designed to comply with Section 53312.7 of the Government Code.
The City will consider applications requesting the formation of community facilities districts and the issuance of bonds to finance eligible public facilities pursuant to the Mello-Roos Act. The City reserves the right to request any additional reports, information, or studies reasonably necessary in evaluating these applications.
All City and any consultant costs incurred in evaluating applications requesting the establishment of Districts (as defined below) will be paid by the applicant(s) by advance deposit increments or as otherwise agreed in writing by the City. The City shall not incur any non-reimbursable expense for processing such applications. Expenses not chargeable to the District shall be borne by the applicant.
As a result of a judgment against the City, (i) that certain Disposition and Development Agreement for Point Molate Mixed-use Development, dated as of September 30, 2020, by and between the City and Winehaven Legacy LLC, and (iii) that certain Development Agreement, by and between the City and Winehaven Legacy LLC, dated as of October 21, 2020, the City was obligated to form a community facilities district encompassing a portion of the area formerly known as the Point Molate Naval Fuel Depot. It is the intent of the City that these Goals and Policies govern the Point Molate CFD in addition to the other Districts formed within the City.
II. DEFINITIONS
“Account Party” means, collectively, the owner of any land within a District or improvement area, together with land owned by any affiliate.
“Bonds” means bonds authorized and issued under the Mello-Roos Community Facilities Act of 1982.
“City” means the City of Richmond.
“District” means a Community Facilities District formed under the Mello-Roos Community Facilities Act of 1982, as amended.
“Mello-Roos Act” means the Mello-Roos Community Facilities Act of 1982, as amended.
ATTACHMENT 1
2 4871-6356-2503v7/200952-0001
“Point Molate CFD” means the community facilities district formed by the City that encompasses a portion of the area formerly known as the Point Molate Naval Fuel Depot and each improvement area designated therein.
“Point Molate Development Agreements” means (i) that certain Disposition and Development Agreement for Point Molate Mixed-use Development, dated as of September 30, 2020, by and between the City and Winehaven Legacy LLC and (ii) that certain Development Agreement, by and between the City and Winehaven Legacy LLC, dated as of October 21, 2020. “Public Facilities” means improvements authorized to be constructed or acquired under the Mello-Roos Act including, but not limited to, fees for capital facilities imposed by public agencies as a condition to approval of the development encompassed by the District or as a condition to service the District.
“Value” or “Fair Market Value” means the amount of cash or its equivalent which property would bring if exposed for sale in the open market under conditions in which neither buyer nor seller could take advantage of a difficulty of the other and both have knowledge of all of the uses and purposes to which the property is adapted and for which it is capable of being used and of the enforceable restrictions upon uses and purposes.
III. ELIGIBLE PUBLIC FACILITIES, SERVICES AND PRIORITIES It shall be a goal and policy of the City that Public Facilities eligible to be financed must be owned by a public agency or public utility and must have a useful life of at least five (5) years. In any event, no bonds shall be issued with a maturity date greater than the average useful life of the facilities or improvements being financed. The development proposed within a District must be consistent with the City’s general plan, if any, and must have received any required zoning or specific plan approvals.
The list of Public Facilities eligible to be financed by a District include, but are not limited to, the following:
Streets, highways, and bridges
Street lighting
Traffic signals and safety lighting
Parks
Governmental facilities
Sanitary sewer facilities
Storm drain facilities
Potable and reclaimed water facilities
Flood control facilities
Libraries
Public utilities
Police and fire protection facilities
Recreation facilities, including open space
Biological mitigation measures involving land
acquisition, dedicating and revegetation
The City has final determination as to any facility’s eligibility for financing, as well as the prioritization of facilities to be included within or for the benefit of a District. The City may enter into ATTACHMENT 1
3 4871-6356-2503v7/200952-0001
joint community facilities agreements with other public entities for the purpose of financing any Public Facilities.
The foregoing list of eligible Public Facilities may include facilities included as part of the City’s or other public agencies’ development impact fee programs to the extent permitted by the Mello- Roos Act.
When it is determined by the City that only impact fees are to be financed by a series of Bonds, the City may collect a premium of the total fees to be financed. The amount of such premium shall be determined by the City. The City may use the premium to finance Public Facilities and improvements directly benefiting and identified by the City as the most necessary to serve the specific needs of the applicable District.
Additionally, a District may finance any one or more of the types of services specified in Section 53313 of the Act. Priority for District financing shall be given to services provided by or directly benefiting the City and, if multiple services are to be financed, with no service having priority over another service; provided, however, the City has final determination as to any service’s eligibility for financing. The City shall not finance services on behalf of other public agencies.
IV. CREDIT QUALITY REQUIRED OF BOND ISSUES
In evaluating a proposed Bond issuance, it shall be a goal and policy of the City that the City’s independent financing consultant, special tax consultant and/or a municipal advisor has reviewed and approved the proposed issuance of the Bonds.
Unless waived by the City Council, or as it relates to privately placed debt, as provided for in Section XI below, prior to the issuance of Bonds, the following credit criteria shall be satisfied: the ratio of the value of all parcels of property subject to the special tax securing the Bonds to the amount of outstanding community facilities district or assessment district bonds attributable to such parcels (the “Value-to-Lien Ratio”) may not be less than five-to-one (5:1). The fair market value of the property within the District or improvement area for purposes of determining the foregoing ratio will be determined based on the appraised value of the property or the assessed value of the property based on the valuation made by an appraiser selected by the City, with a valuation date preceding the issuance of the Bonds by not more than ninety (90) days, and as described more fully in Section IX.
V. SECURITY
It shall be a goal and policy of the City to require sufficient security in connection with the development within each District. To this end:
A. Value-to-Lien Ratios and Status of Development. Unless waived by the City Council, or as it relates to privately placed debt, as provided for in Section XI below, prior to the issuance of Bonds, the following credit criteria shall be satisfied: the ratio of the aggregated total value of all parcels of property subject to the special tax securing the Bonds to the amount of outstanding community facilities district or assessment district bonds attributable to such parcels (the “Value-to- Lien Ratio”) may not be less than five-to-one (5:1). The fair market value of the property within the District or improvement area for purposes of determining the foregoing ratio will be determined based on the assessed value of the property or the appraised value of the property based on the appraisal made ATTACHMENT 1
4 4871-6356-2503v7/200952-0001
by an appraiser selected by the City with a valuation date within ninety (90) days of the issuance of the Bonds, as more fully described in Section VII.
B. Developer Security. Prior to the issuance of a series of Bonds for a District, the owner of any land within the District or improvement area, together with land owned by any affiliate (collectively, an “Account Party”), for which the maximum levy of the special tax in the fiscal year following the fiscal year in which the Bonds are issued are equal to or exceed 20% of the total maximum special tax levy for such fiscal year, shall deliver to the City either (i) a renewable, irrevocable instrument of credit from a financial institution (rated “A” or better) or (ii) cash in-lieu thereof (a “Security”). The Security shall be in an amount equal to the expected special tax levy on the property owned by such Account Party in the fiscal year in which the Bonds are issued and the fiscal year following the fiscal year in which the Bonds are issued, based on ownership status as of a date that is within 60 days prior to the date of issuance of the Bonds.
VI. DISCLOSURE REQUIREMENTS
It shall be a goal and policy of the City to require sufficient developer disclosure and compliance with all applicable federal securities laws in connection with each District. To this end:
A. Disclosure Requirement for Developers. The applicant will be required to demonstrate, to the satisfaction of the City, that there will be full disclosure of the Mello-Roos special taxes and any other special tax, assessment, overlapping special taxes or assessment of other districts, or other liens on individual parcels to existing and future property owners, and to prospective purchasers of property including interim purchasers and sales to merchant builders (Section 53341.5 of the Government Code). In addition to all requirements of law, the City shall require the applicant to provide disclosure of such information as the City deems appropriate to the purchasers of property within the District or improvement area, with respect to the existence of the District or improvement area, maximum and/or backup special taxes to be levied within the District or improvement area, facilities to be constructed, the foreclosure process and the terms and conditions of Bond issues on behalf of the District. Such disclosure shall include home buyer notifications requiring signature prior to home purchases, as well as methods to notify subsequent home purchasers.
The land developer shall be required to disclose (a) all prior experience with CFDs in California, including subsidiaries or affiliated companies, (b) any tax delinquencies with respect to any such prior CFDs, (c) any foreclosures against their properties within such prior CFDs, and any bankruptcy filings by the land developer, including subsidiaries and affiliated companies, with respect to any such prior CFDs.
B. Compliance with Federal Securities Laws. The City shall use all reasonable means to ensure compliance with applicable federal securities laws in connection with the issuance of debt and the provision of annual information regarding any District established by the City with respect to which Bonds have been issued, including requiring any developer in a District or improvement area who is material to the Bond issue to transmit appropriate information to the City or its designee for disclosure to Bond investors.
VII. OTHER REQUIREMENTS FOR LAND DEVELOPERS
The City may make the following requirements from land developers with respect to the issuance of any bonds secured by special taxes from a CFD:
ATTACHMENT 1
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A. The land developer may be required to fund all major projects initially, and then be reimbursed in full or in part by bond proceeds through an acquisition agreement.
B. A reserve for future foreclosure and/or bankruptcy expenses related to the applicable District of at least $100,000 shall be funded by closing on the first series of Bonds from either costs of issuance or a developer cash contribution. If no foreclosure actions or bankruptcy actions are required prior to refunding or pay off of the first series of Bonds, such reserve can be released back to the developer, if funded by the developer, or re-allocated to other purposes, if funded by costs of issuance.
C. The City may charge a fee of up to $100,000, payable from proceeds of the bond issue, to reimburse itself for the costs of staff time and other expenses related to the issuance of bonds for a CFD.
VIII. EQUITY OF TAX ALLOCATION FORMULAS
It shall be a goal and policy of the City that the rate and method of apportionment of the special tax must be both reasonable and equitable in apportioning the costs of the Public Facilities to be financed to each of the parcels within the boundaries of the proposed District or improvement area.
The City prefers that this apportionment of costs be based on the benefit that each parcel is to receive from the Public Facilities.
The rate and method of apportionment of the special tax is to provide for the administrative expenses of the proposed District or improvement area, including, but not limited to, those expenses necessary for the enrollment and collection of the special tax and Bond administration.
All property not otherwise exempted by the Mello-Roos Act or the rate and method of apportionment of special tax from taxation shall be subject to the special tax. At the time of formation of the District or improvement area, exemptions from the special tax may be given to parcels which are publicly owned, are held by a property owners’ association, are used for a public purpose such as open space, are affected by public utility easements making impractical their utilization for other than the purposes set forth in the easements, or have insufficient value to support bonded indebtedness.
The annual special tax levy on each residential parcel developed to its final land use shall be approximately equal each year, except that a variation for administrative expenses and delinquencies will be allowed. It is further the policy of the City to comply with the provisions of Section 53321 of the Mello-Roos Act with respect to the escalation of maximum special taxes.
The maximum annual special tax, together with ad valorem property taxes, special assessments or taxes for an overlapping financing district, or any other charges, taxes, or fees payable from and secured by the property, including potential charges, taxes, or fees relating to authorized but unissued debt of public entities other than the City, in relation to the expected assessed value of each parcel upon completion of the private improvements to the parcel is of great importance to the City in evaluating the proposed financing.
It is the objective of the City that maximum special taxes or assessments on residential owner- occupied property, when taken together with ad valorem taxes, any other special taxes levied pursuant to the Mello-Roos Act and assessments applicable to such property, do not exceed in any year in which bonds are issued for the applicable District or improvement area two percent (2%) of the greater of the appraised value or assessed value of such property.
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In evaluating whether this objective can be met, the City will consider the aggregate public service needs for the proposed project. It will consider what public improvements the applicant is proposing to be financed in relation to these aggregate needs and decide what is an appropriate amount to extend in public financing to the identified public improvements.
This evaluation will be based on information obtained from other affected taxing entities that have jurisdiction to impose a levy on the proposed project.
The total maximum annual special taxes that can be collected from taxable property in a District or improvement area, taking into account any potential changes in land use or development density or rate, and less all projected administrative expenses, must be equal to at least one hundred ten percent (110%) of the gross annual debt service on any Bonds issued by or on behalf of the District or improvement area in each year that said Bonds will remain outstanding.
The rate and method of apportionment of the special tax may include a provision or a backup tax to protect against any changes in development that would result in insufficient special tax revenues to meet the debt service requirements of the district. Such backup tax shall be structured in such a manner that it shall not violate any provisions of the Mello-Roos Act regarding cross-collateralization limitations for residential properties.
A formula to provide for the prepayment of the special tax may be provided; however, neither the City nor the District shall be obligated to pay for the cost of determining the prepayment amount which is to be paid by the applicant.
IX. APPRAISALS
It shall be a goal and policy of the City to establish a uniform set of standards applicable to all appraisals undertaken in connection with the development of a District. To this end:
A. Definition of Appraisal. An appraisal is a written statement independently and impartially prepared by a qualified appraiser setting forth an opinion of defined value of an adequately described property as of a specific date, supported by the presentation and analysis of relevant market information.
B. Absorption Study and Discounted Present Value Cash Flow Analysis. Any appraisal for a CFD financed land development project with an estimated project build out schedule of more than one year shall include the following:
(1) The estimated build out period shall be based on an absorption study by an experienced consultant selected by the City and contracting with the City. The cost of the absorption study shall be paid for by the land developer.
(2) One of the bases for determining the appraised value of property within a District shall be a discounted present value cash flow analysis based on the results of the absorption study.
C. Standards of Appraisal. The format and level of documentation for an appraisal depend on the complexity of the appraisal problem. A detailed appraisal shall be prepared for complex appraisal problems. A detailed appraisal shall reflect nationally-recognized appraisal standards, including, to the extent appropriate, the Uniform Appraisal Standards for Federal Land Acquisition.
ATTACHMENT 1
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An appraisal must contain sufficient documentation, including valuation data and the appraiser’s analysis of the data, to support his or her opinion of value. At a minimum, the appraisal shall contain the following items:
(1) The purpose and/or the function of the appraisal, a definition of the estate being appraised, and a statement of the assumptions and limiting conditions affecting the appraisal. (2) An adequate description of the physical characteristics of the property being appraised, location, zoning, present use, an analysis of the highest and best use. (3) All relevant and reliable approaches to value consistent with commonly accepted professional appraisal practices. If a discounted cash flow analysis is used, it should be supported with at least one other valuation method such as a market approach using sales that are at the same stage of land development. If more than one approach is utilized, there shall be an analysis and reconciliation of approaches to value that are sufficient to support the appraiser’s opinion of value. (4) A description of comparable sales, including a description of all relevant physical, legal, and economic factors such as parties to the transaction, source, and method of financing, and verification by a party involved in the transaction. (5) A statement of the value of the real property.
(6) The effective date of valuation, date of appraisal, signature, and certification of the appraiser.
D. Conflict of Interest. No appraiser or review appraiser shall have any interest direct or indirect in the real property being appraised for the Agency that would in any way conflict with the preparation or review of the appraisal. Compensation for making an appraisal shall not be based on the amount of the valuation.
E. Community Facilities District Appraisal Premises. The valuation of proposed community facilities districts should be based on three premises:
(1) Raw Land Value (Premise No. 1). The total land within the project is valued “as is”
(a) With any existing infrastructure.
(b) Without proposed infrastructure being financed.
(c) With existing parcel configuration.
(d) Considering planned densities allowed by the specific plan of the project.
This is a typical type of land valuation.
ATTACHMENT 1
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(2) Project Build-Out Value (Premise No. 2). The total land within the project is valued under projected conditions:
(a) With proposed infrastructure being financed completely. (b) At the planned densities allowed by the specific plan. (c) Land development is at the stage of being marketed to merchant builders or tentative tract maps ready to be filed.
This is a projected value based on project plans predicated on market conditions continuing as projected.
(3) Bulk Land Value (Premise No. 3). The total land within the project is valued under projected conditions:
(a) With proposed infrastructure being financed completely. (b) With existing parcel configuration.
(c) Considering planned densities allowed by the specific plan of the project.
X. POINT MOLATE COMMUNITY FACILITIES DISTRICT
To the extent the formation, levy of special taxes, issuance of bonds, or other provisions with respect to the Point Molate CFD as required pursuant to the terms of the Point Molate Development Agreements and any acquisition or other agreement executed by the City in connection the Point Molate CFD is inconsistent with these Goals and Policies, the provisions of these Goals and Polices that are inconsistent therewith are hereby waived with respect to the Point Molate CFD.
XI. PRIVATELY PLACED DEBT
If determined to be in its best interests, the City may cause the issuance of Bonds by a District on a private placement basis. City staff shall be delegated the authority to negotiate and finalize the terms of any such privately placed debt. However, the following requirements shall apply to all privately placed debt, unless otherwise waived pursuant to Section XI below:
A. Privately placed debt shall only be sold to investors who sign an Investor Letter in form and substance acceptable to the City.
B. After the issuance of any privately placed debt, such debt shall only be transferred to subsequent transferees who sign an Investor Letter in form and substance acceptable to the City.
C. Unless waived by the City Council, prior to the issuance of the privately placed debt, the following credit criteria shall be satisfied: the ratio of the aggregated total value of all parcels of property subject to the special tax securing the Bonds to the amount of outstanding community facilities district or assessment district bonds attributable to such parcels (the “Value-to-Lien Ratio”) may not be less than two and 1/2-to-one (2.5:1).
ATTACHMENT 1
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D. No letter of credit, as described in Section V, shall be required for a private placement that otherwise meets the criteria of this section.
XII. EXCEPTIONS TO THESE POLICIES
The City may find in limited and exceptional instances that a waiver of any of the above stated policies, or portions thereof, is reasonable given identified special City benefits to be derived from such waiver. Such waivers are granted only by action of the City Council based upon specific public purpose and/or health and safety findings.
ATTACHMENT 1
30 YEARFISCALIMPACTPROJECTIONSFORPT. MOLATEPROJECTIONSANDPOSSIBLERISKMITIGATION February 24, 2022
2 30YearCashFlowProjectionsofFiscalImpact–The Assumptions}Use the EPS/BAE peer reviewed study as a basis}UpdatetheEPS/BAE assumptions basedonthe most recent proposed dwelling unit mix and non-residential development from SunCal}Updatetheassumptions for dwelling unit sales prices using the Integra study}Prorateprojectedrevenuesandexpenses at build out bydwellingunit}Showproratedexpenses both with and without police and fire expenses}PoliceandfireexpensescannotbegraduallyincreasedasPt.Molatebuildsout}Full operating costs must be shown from the first occupancies}Threebuildoutscenarios: 7 years (SunCal), 15 years and 30 years}Assumenon-residential builds out at same pace as residential
3 Scenario 1 –7 Year Build OutFY Ending
CFD Formation 2022
First Series of Bonds 2023
First Year of Home Construction 2025
FY Ending
New Units
Per Year
Cumulative
Total
2025 207.4 207.4
2026 207.4 414.9
2027 207.4 622.3
2028 207.4 829.7
2029 207.4 1,037.1
2030 207.4 1,244.6
2031 207.4 1,452.0
This represents SunCal’scurrentbuildoutprojection for Pt. MolateFirst occupied homes projected for 2025
4 Scenario 2 -15 Year Build OutFY Ending
CFD Formation 2022
First Series of Bonds 2024
First Year of Home Construction 2026
FY Ending
New Units
Per Year
Cumulative
Total
2025 - -
2026 96.8 97
2027 96.8 194
2028 96.8 290
2029 96.8 387
2030 96.8 484
2031 96.8 581
2032 96.8 678
2033 96.8 774
2034 96.8 871
2035 96.8 968
2036 96.8 1,065
2037 96.8 1,162
2038 96.8 1,258
2039 96.8 1,355
2040 96.8 1,452
The first series of bonds and first home construction is delayedoneyearcomparedwithScenario1 Scenario 2 is a conservative scenario for build out of amajorproject in the Bay Area
5 Scenario 3 –30 Year Build OutFY Ending
CFD Formation 2022
First Series of Bonds 2024
First Year of Home Construction 2026
FY Ending
New Units
Per Year
Cumulative
Total
2025 - -
2026 48.4 48.4
2027 48.4 96.8
2028 48.4 145.2
2029 48.4 193.6
2030 48.4 242.0
2031 48.4 290.4
2032 48.4 338.8
2033 48.4 387.2
2034 48.4 435.6
2035 48.4 484.0
2036 48.4 532.4
2037 48.4 580.8
2038 48.4 629.2
2039 48.4 677.6
2040 48.4 726.0
2041 48.4 774.4
2042 48.4 822.8
2043 48.4 871.2
2044 48.4 919.6
2045 48.4 968.0
2046 48.4 1,016.4
2047 48.4 1,064.8
2048 48.4 1,113.2
2049 48.4 1,161.6
2050 48.4 1,210.0
2051 48.4 1,258.4
2052 48.4 1,306.8
2053 48.4 1,355.2
2054 48.4 1,403.6
2055 48.4 1,452.0
Same assumptions on bond issuanceandfirsthome construction as Scenario2 Scenario3isaveryconservativescenario for build out of a major project in the BayArea
6 ProRated Fiscal Impact by Dwelling Unit
With Police and
Fire Expenses
Without Police
and Fire Expenses
Total Projected Annual General Fund Revenues at
Build Out 13,739,524 13,739,524
Total Projected Annual General Fund Expenses at
Build Out 6,173,182 818,200
Net Annual General Fund Revenue at Build Out 7,566,342 12,921,324 Net Annual General Fund Revenue at Build out Pro
Rate Per Housing Unt 5,211 8,899
BoththeEPSandBAEpeerreviewprojectedthatthebulkofGeneral Fund expenses for Pt. Molate would be for police and fire services
7 Scenario1(7Year Build Out) –Interim Fiscal Impact
FY Ending
Cumulative
Units
Net
Revenues
without
Police and
Fire
Police and
Fire
Expenses
Net
Revenues
with Police
and Fire
Expenses
2025 207.4 1,845,903 (5,355,000) (3,509,097) 2026 414.9 3,691,807 (5,355,000) (1,663,193) 2027 622.3 5,537,710 (5,355,000) 182,710
2028 829.7 7,383,614 (5,355,000) 2,028,614 2029 1,037.1 9,229,517 (5,355,000) 3,874,517
2030 1,244.6 11,075,421 (5,355,000) 5,720,421
2031 1,452.0 12,921,324 (5,355,000) 7,566,324
Full police and fire services are shown from the beginning of home construction The “crossover point”, where revenues exceed expenses, occurs in FY 2027
8 Scenario 2 (15 Year Build Out) –Interim Fiscal Impact FY Ending
Cumulative
Units
Net Revenues
without Police
and Fire
Police and
Fire Expenses
Net
Revenues
with Police
and Fire
Expenses
2025 - - - - 2026 96.8 861,422 (5,355,000) (4,493,578) 2027 193.6 1,722,843 (5,355,000) (3,632,157) 2028 290.4 2,584,265 (5,355,000) (2,770,735) 2029 387.2 3,445,686 (5,355,000) (1,909,314) 2030 484.0 4,307,108 (5,355,000) (1,047,892) 2031 580.8 5,168,530 (5,355,000) (186,470) 2032 677.6 6,029,951 (5,355,000) 674,951 2033 774.4 6,891,373 (5,355,000) 1,536,373 2034 871.2 7,752,794 (5,355,000) 2,397,794 2035 968.0 8,614,216 (5,355,000) 3,259,216 2036 1,064.8 9,475,638 (5,355,000) 4,120,638 2037 1,161.6 10,337,059 (5,355,000) 4,982,059 2038 1,258.4 11,198,481 (5,355,000) 5,843,481 2039 1,355.2 12,059,902 (5,355,000) 6,704,902 2040 1,452.0 12,921,324 (5,355,000) 7,566,324 Scenario 2 projects 6 years of negative fiscal impact on City, with ”cross-overinFY2032
9 Scenario 3 (30 Year Build Out) –Interim Fiscal Impact FY Ending
Cumulative
Units
Net
Revenues
without
Police and
Fire
Police and
Fire
Expenses
Net
Revenues
with Police
and Fire
Expenses
2025 - - - -
2026 48.4 430,711 (5,355,000) (4,924,289) 2027 96.8 861,422 (5,355,000) (4,493,578) 2028 145.2 1,292,132 (5,355,000) (4,062,868)
2029 193.6 1,722,843 (5,355,000) (3,632,157)
2030 242.0 2,153,554 (5,355,000) (3,201,446)
2031 290.4 2,584,265 (5,355,000) (2,770,735)
2032 338.8 3,014,976 (5,355,000) (2,340,024)
2033 387.2 3,445,686 (5,355,000) (1,909,314)
2034 435.6 3,876,397 (5,355,000) (1,478,603)
2035 484.0 4,307,108 (5,355,000) (1,047,892)
2036 532.4 4,737,819 (5,355,000) (617,181)
2037 580.8 5,168,530 (5,355,000) (186,470)
2038 629.2 5,599,240 (5,355,000) 244,240
2039 677.6 6,029,951 (5,355,000) 674,951
2040 726.0 6,460,662 (5,355,000) 1,105,662
2041 774.4 6,891,373 (5,355,000) 1,536,373
2042 822.8 7,322,084 (5,355,000) 1,967,084
2043 871.2 7,752,794 (5,355,000) 2,397,794
2044 919.6 8,183,505 (5,355,000) 2,828,505
2045 968.0 8,614,216 (5,355,000) 3,259,216
20461,016.4 9,044,927 (5,355,000) 3,689,927
20471,064.8 9,475,638 (5,355,000) 4,120,638
20481,113.2 9,906,348 (5,355,000) 4,551,348
20491,161.6 10,337,059 (5,355,000) 4,982,059
20501,210.0 10,767,770 (5,355,000) 5,412,770
20511,258.4 11,198,481 (5,355,000) 5,843,481
20521,306.8 11,629,192 (5,355,000) 6,274,192
20531,355.2 12,059,902 (5,355,000) 6,704,902
20541,403.6 12,490,613 (5,355,000) 7,135,613
20551,452.0 12,921,324 (5,355,000) 7,566,324
Scenario 12 projects 12 years of negativefiscalimpactontheCity,with ”cross-over” in FY 2038
10 Mitigation for Interim Negative Fiscal Impact: A Security Fund}The Security Fund would be comprised of the following:}CashreceivedfromSunCalorother developers through special tax levies intended to mitigate the interim fiscal impact}SunCalhasoffered up to $2 million per year for up to 5 years }Cashreceivedfromrealestatetransfers taxes on the $45 million sale of the property to SunCal as provided for in the DDA and future inter-developer transfers}SunCalsells property to merchantbuilderswhoactuallybuildthehomes}The EPS/BAE fiscal impact study includes real estate transfer taxes from sales to home buyers, but not for sales to merchant builders or other developers}AttheoptionoftheCity,theCity’s$22.5millionshareofthe $45 million payment from SunCal provided for in the DDA
11 Scenario 1 (7 Year Build Out) –Security Fund Projection, Counting $22.5 Million SunCal Payment FY Ending
Beginning Fund
Balance
Initial Deposit
from SunCal DDA
Payment
CFD Special Fiscal
Impact Tax on SunCal
and other developer
property
Property Transfer Tax on
SunCal DDA Payment and
Inter developer land sales
Draws to
mitigate
Adverse Fiscal
Impact
Ending Fund
Balance
2022 - 22,500,000 - 562,500 - 23,062,500 2023 23,062,500 - - - - 23,062,500 2024 23,062,500 - - - - 23,062,500 2025 23,062,500 2,000,000 129,643 (3,509,097) 21,683,046 2026 21,683,046 1,663,193 129,643 (1,663,193) 21,812,689 2027 21,812,689 - 129,643 182,710 22,125,042 SunCal pays $3.6+ million towards the City’s interim negativefiscalimpactbefore the “cross-over” point City is made whole in this scenario
12 Scenario 1 (7 Year Build Out) –Security Fund Projection, Not Counting $22.5 Million SunCal Payment on Title Transfer FY Ending
Beginning Fund
Balance
Initial Deposit
from SunCal DDA
Payment
CFD Special Fiscal
Impact Tax on SunCal
and other developer
property
Property Transfer Tax on
SunCal DDA Payment and
Inter developer land sales
Draws to
mitigate
Adverse Fiscal
Impact
Ending Fund
Balance
2022 - - - 562,500 - 562,500 2023 562,500 - - - - 562,500 2024 562,500 - - - - 562,500 2025 562,500 2,000,000 129,643 (3,509,097) (816,954) 2026 (816,954) 1,663,193 129,643 (1,663,193) (687,311) 2027 (687,311) 687,311 129,643 182,710 312,353 SunCal pays $3.6+ million towards the City’s interim negativefiscalimpactbefore the “cross-over” point City is made whole in this scenario. No difference from Scenario 1 withthe$22.5million
13 Scenario 2 (15 Year Build Out) –Security Fund Projection, Counting $22.5 Million SunCal Payment on Title Transfer FY Ending
Beginning Fund
Balance
Initial Deposit
from SunCal DDA
Payment
CFD Special Fiscal
Impact Tax on SunCal
and other developer
property
Property Transfer Tax on
SunCal DDA Payment and
Inter developer land sales
Draws to
mitigate
Adverse Fiscal
Impact
Ending Fund
Balance
2022 - 22,500,000 - 562,500 - 23,062,500 2023 23,062,500 - - - - 23,062,500 2024 23,062,500 - - - - 23,062,500 2025 23,062,500 - - - - 23,062,500 2026 23,062,500 - 2,000,000 60,500 (4,493,578) 20,629,422 2028 20,629,422 - 2,000,000 60,500 (3,632,157) 19,057,765 2029 19,057,765 - 2,000,000 60,500 (2,770,735) 18,347,530 2030 18,347,530 - 1,909,314 60,500 (1,909,314) 18,408,030 2031 18,408,030 - 1,047,892 60,500 (1,047,892) 18,468,530 2032 18,468,530 - - 60,500 (186,470) 18,342,559 2033 18,342,559 - - 60,500 674,951 19,078,010 SunCal pays $8.95 million over 5 years to mitigate negative fiscal impact$5.1 million is drawn from the Security Fund before “cross-over” is reached
14 Scenario 2 (15 Year Build Out) –Security Fund Projection, Not Counting $22.5 Million SunCal Payment on Title Transfer SunCal pays $8.95 million over 5 years to mitigate negative fiscal impactAggregatenegativefiscalimpactonCitypriorto“cross-overis$14+million FY Ending
Beginning Fund
Balance
Initial Deposit
from SunCal DDA
Payment
CFD Special Fiscal
Impact Tax on SunCal
and other developer
property
Property Transfer Tax on
SunCal DDA Payment and
Inter developer land sales
Draws to
mitigate
Adverse Fiscal
Impact
Ending Fund
Balance
2022 - - - 562,500 - 562,500 2023 562,500 - - - - 562,500 2024 562,500 - - - - 562,500 2025 562,500 - - - - 562,500 2026 562,500 - 2,000,000 60,500 (4,493,578) (1,870,578) 2028 (1,870,578) - 2,000,000 60,500 (3,632,157) (3,442,235) 2029 (3,442,235) - 2,000,000 60,500 (2,770,735) (4,152,470) 2030 (4,152,470) - 1,909,314 60,500 (1,909,314) (4,091,970) 2031 (4,091,970) - 1,047,892 60,500 (1,047,892) (4,031,470) 2032 (4,031,470) - 60,500 (186,470) (4,157,441) 2033 (4,157,441) - 60,500 674,951 (3,421,990)
15 Scenario 3 (30Year Build Out) –Security Fund Projection, Counting $22.5 Million SunCal Payment on Title Transfer FY Ending
Beginning Fund
Balance
Initial Deposit
from SunCal DDA
Payment
CFD Special Fiscal
Impact Tax on SunCal
and other developer
property
Property Transfer Tax on
SunCal DDA Payment and
Inter developer land sales
Draws to
mitigate
Adverse Fiscal
Impact
Ending Fund
Balance
2022 - 22,500,000 - 562,500 - 23,062,500 2023 23,062,500 - - - - 23,062,500 2024 23,062,500 - - - - 23,062,500 2025 23,062,500 - - - - 23,062,500 2026 23,062,500 - 2,000,000 60,500 (4,924,289) 20,198,711 2028 20,198,711 - 2,000,000 60,500 (4,493,578) 17,765,632 2029 17,765,632 - 2,000,000 60,500 (4,062,868) 15,763,265 2030 15,763,265 - 2,000,000 60,500 (3,632,157) 14,191,608 2031 14,191,608 - 2,000,000 60,500 (3,201,446) 13,050,662 2032 13,050,662 - - 60,500 (2,770,735) 10,340,427 2033 10,340,427 - - 60,500 (2,340,024) 8,060,902 2034 8,060,902 - - 60,500 (1,909,314) 6,212,089 2035 6,212,089 - - 60,500 (1,478,603) 4,793,986 2036 4,793,986 - - 60,500 (1,047,892) 3,806,594 2037 3,806,594 - - 60,500 (617,181) 3,249,913 2038 3,249,913 - - 60,500 (186,470) 3,123,943 2039 3,123,943 - - 60,500 244,240 3,428,683 SunCal pays full $10 million to mitigate fiscal impact $30+ million in draws on Security Fund prior to”cross-over” point
16 Scenario 3 (30Year Build Out) –Security Fund Projection, Not Counting $22.5 Million SunCal Payment on Title Transfer FY Ending
Beginning Fund
Balance
Initial Deposit
from SunCal DDA
Payment
CFD Special Fiscal
Impact Tax on SunCal
and other developer
property
Property Transfer Tax on
SunCal DDA Payment and
Inter developer land sales
Draws to
mitigate
Adverse Fiscal
Impact
Ending Fund
Balance
2022 - - - 562,500 - 562,500 2023 562,500 - - - - 562,500 2024 562,500 - - - - 562,500 2025 562,500 - - - - 562,500 2026 562,500 - 2,000,000 60,500 (4,924,289) (2,301,289) 2028 (2,301,289) - 2,000,000 60,500 (4,493,578) (4,734,368) 2029 (4,734,368) - 2,000,000 60,500 (4,062,868) (6,736,735) 2030 (6,736,735) - 2,000,000 60,500 (3,632,157) (8,308,392) 2031 (8,308,392) - 2,000,000 60,500 (3,201,446) (9,449,338) 2032 (9,449,338) - - 60,500 (2,770,735) (12,159,573) 2033 (12,159,573) - - 60,500 (2,340,024) (14,439,098) 2034 (14,439,098) - - 60,500 (1,909,314) (16,287,911) 2035 (16,287,911) - - 60,500 (1,478,603) (17,706,014) 2036 (17,706,014) - - 60,500 (1,047,892) (18,693,406) 2037 (18,693,406) - - 60,500 (617,181) (19,250,087) 2038 (19,250,087) - - 60,500 (186,470) (19,376,057) 2039 (19,376,057) - - 60,500 244,240 (19,071,317) SunCal pays full $10 million to mitigate fiscal impact Aggregatenegative fiscal impactonCityis$30+million prior to “cross-over”point
17 Conclusions}In order to protect it self from adverse interim negative fiscal impact the City needs to “escrow” the $22.5 million million payment from SunCal until the “cross-over” point is reached}Withoutthisformofprotection, slow absorption for the Pt. Molate project will result in significant interim negative fiscal impact}TheSunCal$10million special tax levy for fiscal impact mitigation is very helpful, but without other support, is not sufficient to protect the City from the impact of slow absorption}TheRateandMethodofApportionment (special tax formula) needs to accommodate the SunCal offer, and the City would need to formalize the “Security Fund” to provide adequate fiscal impact risk mitigation
18 Next Steps}City policy decision: Does the City want to “escrow” $22.5 million payment from SunCal as security for potential future negative fiscal impact?}If so, what is the release test for the “escrow”?}Future determination of ”cross-over” point in fiscal impact being reached?}Incorporate SunCal $10 million offer in Rate and Method of Apportionment
Maximum
Special Taxes
Potential Surplus
Special Taxes
Maximum
Special Taxes
Potential Surplus
Special Taxes
FY 2023 Bonds 2025 Bonds 2028 Bonds Total Entire CFD
After all bonds for
infrastructure
have been sold 2024 Bonds 2032 Bonds 2040 Bonds Total Entire CFD After all bonds for
infrastructure
have been sold
2024 0 0 0 0 9,504,103 0 0 0 0 9,504,103
2025 0 0 0 0 9,694,185 0 0 0 0 9,694,185
2026 2,566,000 0 0 2,566,000 9,888,069 0 0 0 0 9,888,069 2027 2,566,000 0 0 2,566,000 10,085,830 2,566,000 0 0 2,566,000 10,085,830 2028 2,596,000 1,915,000 0 4,511,000 10,287,547 2,566,000 0 0 2,566,000 10,287,547 2029 2,649,500 1,915,000 0 4,564,500 10,493,297 2,596,000 0 0 2,596,000 10,493,297 2030 2,700,250 1,940,000 0 4,640,250 10,703,163 2,649,500 0 0 2,649,500 10,703,163 2031 2,753,250 1,978,750 1,915,000 6,647,000 10,917,227 4,270,227 2,700,250 0 0 2,700,250 10,917,227 2032 2,813,250 2,015,500 1,915,000 6,743,750 11,135,571 4,391,821 2,753,250 0 0 2,753,250 11,135,571 2033 2,864,750 2,055,250 1,940,000 6,860,000 11,358,283 4,498,283 2,813,250 0 0 2,813,250 11,358,283 2034 2,923,000 2,097,750 1,978,750 6,999,500 11,585,448 4,585,948 2,864,750 0 0 2,864,750 11,585,448 2035 2,982,500 2,137,750 2,015,500 7,135,750 11,817,157 4,681,407 2,923,000 1,915,000 0 4,838,000 11,817,157 2036 3,043,000 2,180,250 2,055,250 7,278,500 12,053,500 4,775,000 2,982,500 1,915,000 0 4,897,500 12,053,500 2037 3,104,250 2,225,000 2,097,750 7,427,000 12,294,570 4,867,570 3,043,000 1,940,000 0 4,983,000 12,294,570 2038 3,166,000 2,271,750 2,137,750 7,575,500 12,540,462 4,964,962 3,104,250 1,978,750 0 5,083,000 12,540,462 2039 3,228,000 2,315,250 2,180,250 7,723,500 12,791,271 5,067,771 3,166,000 2,015,500 0 5,181,500 12,791,271 2040 3,295,000 2,360,500 2,225,000 7,880,500 13,047,097 5,166,597 3,228,000 2,055,250 0 5,283,250 13,047,097 2041 3,361,500 2,407,250 2,271,750 8,040,500 13,308,038 5,267,538 3,295,000 2,097,750 0 5,392,750 13,308,038 2042 3,427,250 2,460,250 2,315,250 8,202,750 13,574,199 5,371,449 3,361,500 2,137,750 0 5,499,250 13,574,199 2043 3,497,000 2,509,000 2,360,500 8,366,500 13,845,683 5,479,183 3,427,250 2,180,250 1,915,000 7,522,500 13,845,683 6,323,183 2044 3,565,250 2,558,500 2,407,250 8,531,000 14,122,597 5,591,597 3,497,000 2,225,000 1,915,000 7,637,000 14,122,597 6,485,597 2045 3,636,750 2,608,500 2,460,250 8,705,500 14,405,049 5,699,549 3,565,250 2,271,750 1,940,000 7,777,000 14,405,049 6,628,049 2046 3,711,000 2,658,750 2,509,000 8,878,750 14,693,150 5,814,400 3,636,750 2,315,250 1,978,750 7,930,750 14,693,150 6,762,400 2047 3,782,500 2,714,000 2,558,500 9,055,000 14,987,013 5,932,013 3,711,000 2,360,500 2,015,500 8,087,000 14,987,013 6,900,013 2048 3,856,000 2,768,750 2,608,500 9,233,250 15,286,753 6,053,503 3,782,500 2,407,250 2,055,250 8,245,000 15,286,753 7,041,753 2049 3,936,000 2,822,750 2,658,750 9,417,500 15,592,488 6,174,988 3,856,000 2,460,250 2,097,750 8,414,000 15,592,488 7,178,488 2050 4,016,750 2,880,750 2,714,000 9,611,500 15,904,338 6,292,838 3,936,000 2,509,000 2,137,750 8,582,750 15,904,338 7,321,588 2051 4,092,750 2,937,250 2,768,750 9,798,750 16,222,425 6,423,675 4,016,750 2,558,500 2,180,250 8,755,500 16,222,425 7,466,925 2052 4,178,750 2,997,000 2,822,750 9,998,500 16,546,873 6,548,373 4,092,750 2,608,500 2,225,000 8,926,250 16,546,873 7,620,623 2053 4,258,750 3,054,500 2,880,750 10,194,000 16,877,811 6,683,811 4,178,750 2,658,750 2,271,750 9,109,250 16,877,811 7,768,561 2054 4,347,500 3,119,500 2,937,250 10,404,250 17,215,367 6,811,117 4,258,750 2,714,000 2,315,250 9,288,000 17,215,367 7,927,367 2055 4,434,000 3,181,250 2,997,000 10,612,250 17,559,674 6,947,424 4,347,500 2,768,750 2,360,500 9,476,750 17,559,674 8,082,924 2056 4,522,750 3,244,500 3,054,500 10,821,750 17,910,868 7,089,118 4,434,000 2,822,750 2,407,250 9,664,000 17,910,868 8,246,868 2057 4,613,000 3,308,750 3,119,500 11,041,250 18,269,085 7,227,835 4,522,750 2,880,750 2,460,250 9,863,750 18,269,085 8,405,335 2058 0 3,373,500 3,181,250 6,554,750 18,634,467 12,079,717 4,613,000 2,937,250 2,509,000 10,059,250 18,634,467 8,575,217 2059 0 3,443,250 3,244,500 6,687,750 19,007,156 12,319,406 0 2,997,000 2,558,500 5,555,500 19,007,156 13,451,656 2060 0 0 3,308,750 3,308,750 19,387,299 16,078,549 0 3,054,500 2,608,500 5,663,000 19,387,299 13,724,299 2061 0 0 3,373,500 3,373,500 19,775,045 16,401,545 0 3,119,500 2,658,750 5,778,250 19,775,045 13,996,795 2062 0 0 3,443,250 3,443,250 20,170,546 16,727,296 0 3,181,250 2,714,000 5,895,250 20,170,546 14,275,296 2063 0 0 0 0 20,573,957 20,573,957 0 3,244,500 2,768,750 6,013,250 20,573,957 14,560,707 2064 0 0 0 0 20,985,436 20,985,436 0 3,308,750 2,822,750 6,131,500 20,985,436 14,853,936 2065 0 0 0 0 21,405,145 21,405,145 0 3,373,500 2,880,750 6,254,250 21,405,145 15,150,895 2066 0 0 0 0 21,833,248 21,833,248 0 3,443,250 2,937,250 6,380,500 21,833,248 15,452,748 2067 0 0 0 0 22,269,913 22,269,913 0 0 2,997,000 2,997,000 22,269,913 19,272,913 2068 0 0 0 0 22,715,311 22,715,311 0 0 3,054,500 3,054,500 22,715,311 19,660,811 2069 0 0 0 0 23,169,617 23,169,617 0 0 3,119,500 3,119,500 23,169,617 20,050,117 2070 0 0 0 0 23,633,009 23,633,009 0 0 3,181,250 3,181,250 23,633,009 20,451,759 2071 0 0 0 0 24,105,670 24,105,670 0 0 3,244,500 3,244,500 24,105,670 20,861,170 2072 0 0 0 0 24,587,783 24,587,783 0 0 3,308,750 3,308,750 24,587,783 21,279,033 2073 0 0 0 0 25,079,539 25,079,539 0 0 3,373,500 3,373,500 25,079,539 21,706,039 2074 0 0 0 0 25,581,129 25,581,129 0 0 3,443,250 3,443,250 25,581,129 22,137,879 2075 0 0 0 0 26,092,752 26,092,752 0 0 0 0 26,092,752 26,092,752 Total 110,488,250 82,455,750 82,455,750 275,399,750 855,525,210 528,317,017 110,488,250 82,455,750 82,455,750 275,399,750 855,525,210 425,713,692 Scenario 1 Scenario 2
Special Tax Bonds: Net Debt Service
ATTACHMENT 3
Memorandum
DATE: February 24, 2022
TO: Honorable Mayor and City Councilmembers
CC: Anil Comelo, Interim Deputy City Manager
Belinda Brown, Director of Finance
Lina Velasco, Director of Community Development
Joe Leach, PE, Director of Public Works
FROM: Mark Northcross, Principal, NHA Advisors
Eric Segal, MAI, Managing Director, Integra Realty Resources Mike Medve, Senior Project Manager, Willdan Financial
Services
Brian Forbath, Special Counsel (Bond Counsel), Stradling Yocca Carlson & Rauth
Reed Glyer, Special Counsel (Bond Counsel), Stradling Yocca Carlson & Rauth
SUBJECT: Point Molate CFD Formation – Council Questions and Responses from the City’s Technical Team
Note: Following please find written questions from Council members that have been submitted to the City’s technical team for response. Some questions may also best be answered by the Staff Report for the February 24, 2022, Study Session, and its attachments. Please consider and refer to those attachments when reading these responses. Please note that the technical professionals have been independently and directly hired by the City Council to provide technical assistance to the City Council and by extension City staff; they have not been hired by the Point Molate developer.
Questions about the Point Molate Project’s Impact on Richmond’s General Fund
Real estate market questions - to help city council and the public set ranges for average unit prices and ranges for time to sell 1,002 condos and townhome units.
These questions are typically answered by what is called an absorption study, which is a ATTACHMENT 4
detailed look at applicable real estate market trends and conditions as they relate to a particular project. The absorption study projects the rate of sale for each residential product type proposed for a project based on current market trends and conditions.
The City does not have an absorption study for Point Molate at this time. SunCal has commissioned such work from absorption consultants but considers that information confidential.
Nevertheless, the City's finance team has prepared answers to these questions based on the limited information available.
Why does the City not have an absorption study for Pt, Molate at this time? Absorption studies are typically done as the basis for an appraisal of the property securing the special tax lien at the time of bond issuance. By practice in the municipal securities industry, both an absorption study and an appraisal should be finalized within 90 days of the actual bond sale. Since both the absorption and appraisal reflect current real estate market conditions, if the date of these reports is more than 90 days before the bond sale, the reports are considered inadequate to meet the Federally-mandated disclosure requirements for a municipal bond offering.
A bond issuance for a Point Molate CFD is at least one year, if not two years, in the future.
Consequently, following the standard for "best practices" in the municipal securities industry, it is too early to prepare an absorption study for the purpose of risk disclosure to potential bond investors.
However, the Council's key questions about absorption for the Point Molate project remain.
While such a study could be commissioned, it would take about 2 months to prepare. This means that the report would not be available until after the April 20, 2022, deadline in the DDA for CFD formation.
Even if we had an absorption study now for Council review, there is another key reason why its findings at this time should not be given much weight. In all likelihood, the Bay Area is at the top of the real estate market. The question that consequently arises is whether public policy decisions regarding Point Molate should be based on an absorption study done at the top of real estate market.
Questions from the Council on fiscal impact and on the CFD debt service cash flows have focused on the risk of slow absorption. This is a good approach to addressing the absorption risk when absorption projections would otherwise be based on market conditions at the top of a real estate market. A 30-year absorption analysis, as requested in one of the questions, is a prudent way of gauging the potential negative interim fiscal impact of Point Molate on the City’s General Fund. The City’s finance team has used this approach, and determined that with slow absorption, the fiscal impact of the project on the City’s General Fund is likely to be negative for a number of years, as described elsewhere in this summary. We can, however, bracket the number of years of negative impact as follows:
Projected Case: If buildout takes place over 7 years, the negative impact to the General Fund will occur in the first 3 years.
ATTACHMENT 4
Worst Case: If buildout takes place over 30 years, which we consider to be the very worst-case scenario, the negative impact to the General Fund will occur in the first 12 years.
What has been the average annual absorption of new shoreline condos and townhomes in the Marin, Contra Costa, and Alameda markets over the last twenty years? What percentage of these have been in 5-6 story block buildings with over 40 units?
The updated Integra study as of February 7, 2022, shows absorption data for 7 comparable shoreline projects in Contra Costa and Alameda County: the Breeze at Bay 37 in Alameda; the Villas in Newark; the Bungalows in Newark; the Cottages in Newark; the Crest at Alameda Point in Alameda; Village 29 in El Cerrito; and Skyview in Oakland. The estimated home sales prices by product type in Point Molate prepared by Integra in their attached February 7, 2022, report reflect this and other current market data.
Integra did not look at Marin County real estate market data because they believe that data would not be comparable for the Point Molate project.
How many shoreline condos and townhomes are in the current construction pipeline for Marin, Contra Costa, and Alameda counties?
Data on the actual pace or rate of sales is provided in the February 7, 2022, Integra report for the projects mentioned above, as well as the total units planned to be offered. Under current market conditions, the sales pace is brisk. These projects comprise a total 2,875 units in aggregate.
In addition, Integra has provided the following information regarding the construction pipeline:
The Treasure Island project, including Yerba Buena Island (Improvement Area 1), consists of 461± acres which, at build-out, contain 8,000 residential units primarily in mid- and high- rise residential condos and apartments. Further, Treasure island will also include approximately 140,000 square feet of new commercial and retail space, adaptive reuse of three historic buildings with up to 311,000 square feet of commercial/flex space, up to 500 hotel rooms, and up to approximately 100,000 square feet of office space.
On the Island of Alameda, the former US Navy’s Fleet Industrial Supply Center, which comprises approximately 218 acres, is being developed with 889 residential units of market rate and inclusionary housing (including low income housing to be developed by the Housing Authority), 300,000 square feet of retail space, up to 400,000 square feet of office space, and an eight‐acre waterfront park or other allowable uses consistent with the approved master plan. The retail component of Alameda Landing is anchored by Target and Safeway. Other tenants within the retail center include Michaels, Chipotle, Panda Express, Famous Dave’s, and the Habit Burger Grill.
To initiate development of Alameda Landing, the former Community Improvement Commission of the City of Alameda, now the Successor Agency, entered into a Disposition and Development Agreement with Catellus Alameda Development, LLC (“Catellus”) as ATTACHMENT 4
Master Developer of the project. Subsequent to the Disposition and Development Agreement, Catellus and the City entered into a Development Agreement for Alameda Landing. The following map shows the planned uses of Alameda Landing.
In accordance with the Development Agreement, the City formed two Community Facility Districts (“CFDs”) to facilitate the development of Alameda Landing. The first CFD (CFD No. 13‐1) was formed in January 2014. After voter approval was received on the formation of the CFD, the City subsequently annexed 44.13 additional acres (gross) in April 2015, and increased the total bond authorization of the CFD from $20 million to $40 million.
In addition to Alameda Landing, Alameda Point is part of a former naval air station which closed in 1997. The area includes historic buildings, wildlife habitats, a shoreline on the San Francisco Bay. In June of 2013, the United States Navy gave title of approximately 1,400 acres of land and water, which encompasses nearly a quarter of the 10‐square‐mile island’s land mass, to the City of Alameda. Since this time, the city has overseen the redevelopment of the property.
Alameda Point consists of two sites, the 68‐acre Site A and the 82‐acre Site B.
Development of Site A Phase 1 commenced in the first quarter of 2018. The following table summarizes plans for the development of Site A, Phase 1.
ATTACHMENT 4
At build-out, Alameda Point will include 800 market rate residential housing units, 200 affordable housing units and up to 600,000 square feet of commercial space, with the balance dedicated to public open spaces and parks.
We probably need two numbers for each market: units approved (getting close to breaking ground or under construction) and units being planned or considered. In Richmond this would be the difference between the 316 units approved for Terminal One.
City staff will provide data on the potential for new home construction along the Richmond waterfront.
We need to understand the market difference between condos that are less than a ¼ mile from the water and ones that are just “near” the water. And how these compare to condos not on the shoreline but with better access to mass transit, shopping and restaurants - projects such as Village 29 in El Cerrito.
The relative distance of these projects to amenities, as well as the relative distance of existing residential to the Richmond, Phillips 66, and Shell refineries was all factored into the Integra February 7, 2022, sales price analysis. Also, as referenced above, and most particularly by the current development on Treasure Island, (new) commercial development intended to serve emerging market areas are often infeasible until sufficient housing supply has been added. This doesn’t appear to be a deterrent for homebuyers/rents.
ATTACHMENT 4
By year to show trending, what has been the average selling price per sq ft for these units over the last 20 years? What can we say about market price differences between Alameda, Emeryville, Marina Bay, Point Richmond, Tiburon, Sausalito and San Rafael?
The selling price for the comparable new home developments listed above vary from $490/square foot to $1,200/square foot depending on type of product, location, and amenities. This is covered in detail in the Integra report. Again, as noted above, Marin County was not considered a good comparable for Point Molate by Integra.
Over the last 5 years, what types of units have gone for over $900/sf? And for over $800/sf? What percentage of the units sold go for $800-900 and for over $900? Who are these buyers? Will they be attracted to Point Molate?
Integra projects that the detached 3,500 square foot homes in Point Molate will sell for about $514 per square foot. The 1,800 square foot condominiums will sell for $750 per square foot, and the 1,500 square foot condominiums will sell for $875 per square foot.
All these projections by Integra are less than $900 per square foot.
Have units in large (40-60 unit) multi-story buildings fetched less than units in smaller developments?
The low-rise townhomes in Point Molate are projected to sell at $750 per square foot.
The mid-rise condominiums are projected to sell at $875 per square foot. This indicates that with respect to the product types proposed for Pt. Molate that the mid- rise condominium units sell for $125 more per square foot than the low-rise condominium units.
We need to verify the breakdown of the proposed Point Molate condos and townhome units by size. They won’t all be 3-BR 1,500 sq ft units right? What’s the proposed breakdown by number of bedrooms and sq footage? What will be the average size of the 1,002 units?
This information will be developed by the actual merchant builders to whom SunCal will sell the parcels for these projects. Consequently, this information is not available at this time.
For the Main condo buildings, how many will have water views and how many will be looking at the side of a hill or Chevron’s storage tanks? How much less will these fetch per sq ft than units with water views from multiple rooms?
As noted above, this information will be developed by the actual merchant builders to whom SunCal will sell the parcels for these projects. Consequently, this information is not available at this time.
Interest rates have gone up 25% in the last year - from 3.25% to 4% currently for 30- year fixed mortgages. If mortgage rates go up to 5 or 6% over the next 5 years, what will be the likely impact on selling prices? Will it affect all housing units equally or will the condo market get hit harder?
ATTACHMENT 4
The most recent increases in interest rates are reflected in the data provided by Integra in their February 7, 2022, report. The expectation of rising interest rates this year may impact the housing market, especially the entry-level housing market, as these buyers are more susceptible to interest rates. In certain markets we’ve seen a recent push by homebuyers hoping to buy homes and lock in the historically low rates. There is the potential for impact on the housing market with rising interest rates, generally speaking.
For different possible price points ($900K, $1,200K, $1,500K), how much higher will monthly non-mortgage carrying costs be for a buyer at Point Molate than for a resale unit at Brickyard Landing, The Waterline or Marina Bay in Richmond or similar projects in Alameda or Marin? Include regular property taxes, CFD assessments and HOA fees.
SunCal will provide estimated HOA fees for Point Molate. The combined impact of all property taxes, special assessments, and CFD taxes for the Point Molate project will be the equivalent of 2% of the assessed valuation. The maximum CFD taxes will be adjusted by valuation estimates done at the time of each new component project approval for Point Molate. HOA fees, by common practice in California, are not included in the 2% of assessed valuation combined tax burden analysis.
What is the income that would really be required to buy a 1,500-sf condo at Point Molate ?00K? Is it $350K? Do people with this kind of income want to live in a condo building at Point Molate? How much higher is this than if buying for $1 million? How much higher than buying a single-family home for $1.5 w/o a CFD or HOA?
The Integra study includes an analysis of the income required to purchase new homes in Point Molate. Depending on the product type, the annual incomes range from $203,000 per year to $281,000 per year. Within a 7-mile radius of Point Molate, households with incomes in this range comprise 19.2% of all households.
Annual Richmond General Fund Cost Questions
The costs will be a 3-shift Fire Station and a new beat - 1 sergeant and five officer Police Station. A lot of numbers have been tossed around, but it is time to see how the numbers are calculated. There will be 3 firefighters per shift (9 firefighters needed at the new Fire Station).
What are the assumptions we are making? What are the true labor costs of a new fire and police station? Today’s fire department costs us between $350,000 and $375,000 per person per year (fully loaded - all expenses divided by total headcount). The reason these costs are so high, I think, is because most of our fire people are working a lot of overtime. Last budget, staff suggested adding a % for OT. Can you provide information on what is the current OT in the police and fire departments? Has the percentage assumed by the staff been correct or what is the current OT percentage? And how much have both departments exceeded the OT proposed budget and how much will OT be at the end of this fiscal year?
City staff has done a detailed analysis of the operating costs for the combined police and fire station in Point Molate. That analysis is attached.
ATTACHMENT 4
Then there is covering the schedule for vacations, sickness, training, and accidents/disability leave. What are the assumptions we are making? What are the true labor costs of a new fire and police stations?
City staff has done a detailed analysis of the operating costs for the combined police and fire station in Point Molate. That analysis is attached.
For both Police and Fire, what assumptions should we make around the inflation rate for wages and benefits? Historically, they seem as though they have generally kept up with inflation. If inflation averages 4-5 over the next 10 years, what annual cost increase in police and fire costs should we anticipate?
Performing an annual analysis in nominal dollars with arbitrary escalators applied differently to revenues and expenditures is generally not very useful. Over a long period of time, both revenues and expenditures tend to go up by about 3% per year. This is why inflation assumptions are not included in EPS/BAE studies. If the inflation assumptions match on both the revenue and expenditure side, then including inflation does not change the conclusion of the analysis.
CalPERS expenses for public safety employees in California cities are generally increasing quickly. CalPERS is doing this to fully amortize the unfunded actuarial liability (UAL) for its member entities. CalPERS intends to fully amortize the UAL over about a 20-year period, depending on the City. This means that projections of employers’ payroll contribution rates are likely to increase for the next several years, and then decline significantly. The EPS study did not factor in changes in Richmond’s CalPERS payroll contribution rate over the next 20 years. However, since the projections of fiscal surplus at build out are based on current payroll contribution rates, amongst the highest in history, it is likely that these projections at build out are conservative.
Annual cost of maintaining a new fire/police station - insurance, utilities, building depreciation, equipment lease expense or depreciation, maintenance?
City staff has done a detailed analysis of the operating costs for the combined police and fire station in Point Molate. That analysis is attached.
Capital cost of fire station equipment?
City staff estimated the cost of rolling stock for the fire station at approximately $1.4 million, and the cost of rolling stock for the police station at $110,000. If this rolling stock were leased financed over typical financing terms, the cost to the City would be about $200,000 per year. In addition, the City staff estimated one time police training costs of $119,000.
These costs were not included in the EPS study.
Annual normal CFD administration costs.
Administrative costs for a CFD that has bonds outstanding typically run between $15,000 and $40,000 per year, depending on the complexity of the CFD. This includes Willdan’s consulting fees for annual administration, continuing disclosures, arbitrage rebate ATTACHMENT 4
calculations and delinquency management, as well as City costs for carrying out their duties related to the CFD.
Extra CFD admin costs if we have to deal with a CFD default - money that might eventually be reimbursed
If judicial foreclosure is required, additional legal costs will be incurred for the retention of Foreclosure Counsel by the City. These costs are fully reimbursable from two sources (1) special taxes levied on the CFD and (2) proceeds of a foreclosure sale for delinquent property. If no CFD special taxes are being collected from any property within the CFD, and if the delinquent property owner files for bankruptcy, the foreclosure process will be stayed.
In that case, the City will need to retain Bankruptcy Counsel to represent its interests in Bankruptcy Court. Those costs are fully reimbursable from the proceeds of sale of the delinquent property through a Bankruptcy Court auction. Note that Federal Bankruptcy Courts have no authority to amend or extinguish a CFD tax lien.
Nevertheless, the General Fund of the City could bear expenses of $100,000 per year or more during a bankruptcy proceeding. Reimbursement might take several years, but such reimbursement would include interest, as well as the penalties and interest on the delinquent taxes. This is a rare event, but the Ritter Ranch CFD bankruptcy took 6 years to reach a successful bankruptcy court auction. The City of Palmdale's total legal expenses amounted to over $1 million. These expenses were reimbursed in full, with interest, from the proceeds of the bankruptcy court auction.
Bond Issuer Questions
How much will a bond issuer be willing to lend to the project? What happens if they are only willing to lend $60 mil instead of the desired $100 mil?
The amount of bonds that can be issued for a CFD is controlled primarily by the value-to- lien ratio. This ratio is the ratio between the total appraised value of undeveloped property combined with the assessed value of any developed property, to the amount of bonds being issue. Most CFD bonds for undeveloped property are sold with a value to lien ratio between 3-to-1 and 5-to-1.
If the net proceeds are insufficient, as controlled by the value-to-lien ratio, to fully fund needed infrastructure, the developer must fund the shortfall from internal sources. The availability of these alternate funds must be verified to the satisfaction of potential CFD investors before any CFD bonds can be sold.
Why wouldn’t we say we want SunCal to spend its share ($90 mil or more) before the bonds are issued?
The expenditure of CFD bond proceeds is typically controlled through what is called an "Acquisition Agreement". This agreement mandates the following:
The developer must fund all project costs independently of the bond proceeds. Bond proceeds will be used to reimburse the developer for those costs as each "discrete component" of the infrastructure package is accepted as complete by the City.
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Consequently, the use of an Acquisition Agreement to control the use of bond proceeds is the approach most commonly used to address the concern expressed in this question.
How would a bond issuer react to the choice between a 3:1 or a 4:1 or a 5:1 valuation to loan amount? Wouldn’t they view 5:1 as safer?
Yes. Bond investors view higher value-to-lien ratios as being safer.
Timing of the Mello Roos payments
Attached is a PDF of a spreadsheet showing the estimated timing of debt service payments for three series of CFD bonds potentially issued to fund infrastructure in Point Molate. Two different scenarios are shown, as summarized in the table below:
CFD Debt Service Projection Scenarios
Scenario 1 Scenario 2
Description
SunCal projected build out
over 7 years
Hypothetical slow build out over 20
years
First Series of Bonds $40 million net in 2023 $40 million net in 2024 Second Series of Bonds $30 million net in 2025 $30 million net in 2032 Third Series of Bonds $30 million net in 2028 $30 million net in 2040
Estimated maximum special taxes from the CFD are also shown in the attached table, assuming that the CFD special taxes inflate at an annual rate of 2%, as allowed under the State authorizing statute. Debt service on the CFD bonds is also escalated at an annual rate of 2%. As provided for in the financing plan in the DDA, a total of approximately $100 million in infrastructure is funded through the CFD.
The analysis shows that over time, the maximum special taxes collectible within the CFD will exceed the debt service requirements by several million dollars per year. This surplus can be used to fund the infrastructure maintenance requirements and other services needs for the CFD. It can also be used to fund community benefits through facilities or services for the City.
More information on potential community benefits
Under State law, public entities can levy CFD taxes to fund a wide variety of both public facilities and public services. The authority is very broad with respect to public facilities.
With respect to public services, it is more limited, but police, fire and recreational services can all be funded.
Revenue Assumption Questions
What is the range of possible annual sales tax per “upper-middle class family” that moves into Point Molate? The original assumptions were high. If you take Richmond’s current annual sales tax and take away commercial payers like Chevron and divide the remainder by ATTACHMENT 4
the number of households in Richmond (45,000?), you get a current number per household.
Point Molate residents, like Point Richmond and Marina Bay residents, would probably spend 70% or more of their taxable shopping dollars outside of Richmond. Could be as little as 15 - 30% of what they generate in total. We certainly have no reason to think upper middle class Richmond residents spend most of their taxable shopping dollars in Richmond. Am I right?
While it is hard to pinpoint a range, the EPS fiscal impact study estimates that each household will spend an average of $12,703 outside the project but in ways that are captured by the City’s Sales and Use Tax. The City’s standard 1% sales tax captures this expenditure, and a fraction of a percent more will be captured by other sales tax measures allocated to the City. Nationwide, about 12.5% of total retail sales were online, but this percentage is likely much higher in the Bay Area, where customers are more tech savvy.
This trend has increased in the pandemic, and since younger shoppers are more likely to shop online, it will likely continue to trend upward over time. All online sales are captured by the City’s Sales and Use Tax.
It is important to note that only 5% of the revenues projected in the EPS study come from sales tax sources. If the projection ends up being off by 100%, the projected fiscal surplus at build out would decrease by about 4%.
Property taxes - We need to determine how to handle the special assessments and other ad valorem taxes. Do we count the significant Richmond pension tax as GF money? What about the WCCUSD and Richmond sewer taxes? Assuming that these things should be excluded from our financial analysis of the Point Molate project, we are left with about .003% of assessed value for the Richmond GF. But maybe it should be a bit higher.
The pension tax is included in the EPS study. The general Property Tax allocation to the City and the Property Tax In-Lieu of Vehicle License Fee were also reflected in the EPA study. No other overrides were included in the analysis, including any utility charges for the City or EBMUD or dedicated assessments/taxes for other public entities.
Real estate transfer fees need to be tracked with property sales. Do they lag by a year? They certainly come in differently if it takes 30 years to sell all of the units than if they sell in 10 or 20.
They also depend upon assumptions about resale activity. What percentage of the sold units get sold again each year? Does it build over time? Do they all turnover within 10 years? What are the assumptions? What are the worst- and best-case scenarios?
Real Estate Transfer fees to homebuyers are included in the EPS study. Real Estate Transfer taxes from the possible sale of the property by the City to SunCal, or subsequent sales by SunCal to merchant builders or other developers were not included. The BAE peer review did note that one-time taxes from the sale of the land and the subsequent sale of homes would have a significant one-time impact on City revenues. A detailed analysis of the assumptions behind the long-term Real Estate Transfer fees from sales to home buyers is included in the BAE peer review.
“Other” City fees have been a murky area. Some initial development fees normally charged to developers have already been waived for SunCal. Others remain. Some fees might be charged to homeowners over time. Can you get a list of developer fees that normally a ATTACHMENT 4
developer will pay to the city and compare that with what SunCal will pay?
Development Impact Fees are not included in EPS study, as these are one time fees dedicated for particular capital projects. There is an “Other Taxes” category in the EPS study which is projected using a proportionate increase in the population resulting from the project. That is a fairly standard assumption.
Spreadsheet Support of What-if Analysis
It may be easiest to do 3 GF Impact spreadsheets for selling & renting all of the homes over 10, 20 and 30 years. Of course, it will be great to see 15-, 25- and 35-year absorption versions.
The City's finance team has done a proration of the build out fiscal impact for three build out scenarios: 7 years (SunCal estimate), 15 years, and 30 years. This analysis is contained in the slide deck also provided to Council for the February 24, 2022, Council Study Session.
The police and fire operating expenses for Point Molate cannot be prorated or gradually increased as Point Molate builds out. The Finance Team's analysis assumes that the full $5.35 million per year operating expense for combined police and fire commences the first fiscal year of occupancy of homes in Point Molate. Accordingly, the analysis in the slide deck does project negative interim fiscal impacts, particularly for the 15-year and 30-year build out scenarios.
CFD spreadsheets need to model the term of the bonds. If the bonds are repaid in 40 years, then we just need a 40-year spreadsheet. If it is a choice between 30, 40 and 50, then we should have three spreadsheets. They must be separate from the GF Impact ones. Here we need to decide on how to model the 2% limit on total taxes and fees. Does this include estimated HOA fees? It certainly needs to include all of the “regular” special assessments which bring “regular” property taxes to around 1.6% of assessed value. That leaves only .4% for CFD assessments and (maybe) HOA fees.
HOA fees are excluded by common practice from analyses of overlapping tax burden for CFDs and assessment districts. Only public entity tax/assessment liens are included. The analysis the City's finance team is using for sizing the maximum possible CFD special tax for Point Molate includes all public entity taxes and assessments applicable within the Point Molate area.
Each GF Impact spreadsheet should use an average property tax payment per rental unit and per sale unit. These figures should be easily modifiable using subroutines that calculate averages based on actual achieved prices for different types of units.
The projections of fiscal impact for the three scenarios described above use the February 7, 2022, updated Integra analysis for projected sales prices. These assumptions can be changed, if the City's Finance Team is directed to do so by staff.
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We need to be able to see what happens if the single-family homes go for $2.2 million instead of $2 mil while the 3 BR condos go for $1 mil instead of $1.485 mil.
This analysis can be done at the request of City staff. However, it is important to note that the projected revenues at build out now are in excess of twice that of projected expenses, including the full $5.35 million per year combined police and fire costs. Adjustments as suggested above are very unlikely to change the projection of fiscal surplus at build out.
The fiscal impact risk that remains is from a slow build-out for Point Molate. As noted in the slide deck attachment, depending on how slow actual build out is, the period of negative fiscal impact on the City could persist for a number of years.
We should also be able to assume/use .003 of assessed value as well as .0028 and .0032. (Almost 40% of Richmond “regular” property taxes are special assessments, so people might disagree over how much of these revenues should be included in our Point Molate project GF impact analysis)
Special assessments are not included in the AB 1209 apportionment. That number comes from the County auditor and does not change over time. No special assessments not allocated directly to the City were included in the EPS study.
EPS/BAE excluded special assessments.
Richmond base GF property taxes should go up 2% per year if units don’t get resold at new market prices.
Performing an annual analysis in nominal dollars with arbitrary escalators applied differently to revenues and expenditures is generally not very useful. Over a long period of time, both revenues and expenditures tend to go up by about 3% per year. This is why inflation assumptions are not included in EPS/BAE studies. If the inflation assumptions match on both the revenue and expenditure side, then including inflation does not change the conclusion of the analysis.
Price inflation in selling prices should be adjustable. If one type of unit could sell now for $1 million, we should be able to say that in 10 years they will go for $1.2 or $1.5 million.
As explained above, we do not believe that inflation assumptions, matching historic observations of matched inflation in revenues and expenditures, will change the conclusion.
Sales tax revenue per occupied unit should be adjustable.
As noted above, the EPS study did a detailed analysis of sales tax capture for new households living in Point Molate. In addition, sales tax is relatively small component of the overall General Fund revenue stream projected by the EPS study.
Cost inflation assumptions need to be changeable - for all GF costs, but especially for police and fire wages & benefits. (A key problem is that police and fire wage and benefit costs will likely go up at a significantly higher rate than property tax revenues).
CalPERS expenses for public safety employees in California cities are generally increasing ATTACHMENT 4
quickly. CalPERS is doing this to fully amortize the unfunded actuarial liability (UAL) for its member entities. CalPERS intends to fully amortize the UAL over about a 20-year period, depending on the City. This means that projections of payroll contribution rate are likely to increase for the next several years, and then decline significantly. The EPS study did not factor in changes in the CalPERS payroll contribution rate over the next 20 years. However, since the projections of fiscal surplus at build out are based on current payroll contribution rates, amongst the highest in history, it is likely that these projections at build out are conservative.
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Integra Realty Resources
Sacramento
Valuation Consultation
Point Molate
Redevelopment Project
Western Dr.
Richmond, Contra Costa County, California 94801
Prepared For:
City of Richmond
Date of the Report:
February 7, 2022
Report Format:
Appraisal Report
IRR – Sacramento
File Number: 193‐2021‐0618
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ATTACHMENT 5
1 Integra Realty Resources 590 Menlo Drive T 916.436.3883 Sacramento Suite 1 F 916.435.4774
Rocklin, CA 95765 www.irr.com
February 7, 2022
Belinda Brown, Finance Director/Treasurer
City of Richmond
450 Civic Center Plaza
Richmond, CA 94804
SUBJECT: Valuation and Consulting
Point Molate Project
Western Dr.
Richmond, Contra Costa County, California 94801
IRR ‐ Sacramento File No. 193‐2021‐0618
Dear Ms. Brown:
Thank you for considering Integra Realty Resources – Sacramento for your real estate valuation and consulting needs. To follow is our findings as it relates to the market data and analyses for the purposes of aiding in the formation of a proposed Community Facilities District (CFD) to assist in the redevelopment of Point Molate. This consulting assignment includes our preliminary analysis of current home pricing and annual rental rates for non‐residential development within the boundaries of the proposed CFD.
This report is intended to comply with the requirements for a Restricted Appraisal Report contained in Standards Rule 2‐2 (b) of the Uniform Standards of Professional Appraisal Practice (USPAP). As such, it presents limited discussions of the data, reasoning and analysis used in the appraisal process to develop the opinions herein.
According to the Richmond Point Molate Fiscal and Economic Impact Analysis, prepared by Economic & Planning Systems, Inc. (EPS), dated June 17, 2020, The Point Molate Project is proposed and entitled for between 1,260 and 2,040 residential dwelling units, approximately 625,000 square feet of nonresidential development and 15,000 square feet of civic/community uses. The present proposed DRAFT
ATTACHMENT 5
2 land use for Point Molate, which is excerpted from the Total Tax Rate Analysis, prepared by DPFG, calls for 1,160 for‐sale residential dwelling units and 292 for‐rent dwelling units, for a total of 1,452 residential dwelling units, and 390,774 square feet of mixed‐use restaurant/retail and office/R&D development.
Presented below is an exhibit of the Point Molate Project:
The use of public, land‐secured financing mechanisms like community facilities districts (CFDs) and assessment districts (ADs) are often used as part of the development of public infrastructure for master planned communities throughout the State of California. In fact, most new developments and redevelopments throughout the San Francisco Bay Area are encumbered by community facilities districts to aid in the financing of public improvements. Interviews with both land developers and merchant homebuilders in emerging areas and infill locations with onerous infrastructure costs, affirm land‐secured financing is necessary for residential development, and several merchant builders we’ve interviewed confirm land‐secured financing must be in place prior to acquiring developable residential lots/land for home development.
For instance, the following developments, which contain single‐family, multifamily and non‐residential (office, retail and industrial) land uses, are encumbered by a CFD for the purposes of funding public improvements:
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3 Treasure Island (City and County of San Francisco) East Garrison (County of Monterey) Mission Rock (City and County of San Francisco) Oyster Point (City of South San Francisco) Alameda Landing (City of Alameda) University District (City of Rohnert Park) Warm Springs (City of Fremont) Napa Pipe Redevelopment (City of Napa) Dublin Crossing (City of Dublin)
In an interview with a land developer of master planned communities, he noted land developers (sellers) will typically insist on using land‐secured financing, especially in a market where most, if not all, of the competition has it, in order to remain competitive of land prices; without the ability to transfer land‐secured debt to a buyer (in this case, a merchant homebuilder), the land prices will necessarily be higher and less appealing to a buyer. Similarly, for homebuilders, not having a CFD may seem favorable from a marketing standpoint (think sales banner out front: “NO MELLO‐ROOS”), but shoppers see the corresponding higher home prices for that builder’s homes when compared to the competition and often don’t spend enough time in the sales office to understand that the cost of ownership is the same.
For‐Sale Residential Analysis
According to the information provided and available for this analysis, the proposed Point Molate Project will include three for‐sale residential product lines: 185 single‐family homes (3,500 square foot average unit size), 173 low rise apartment and townhomes (1,800 square foot average unit size) and 802 mid‐rise condominiums (1,500 square foot average unit size). In the collection of market data we surveyed the local Multiple Listing Service (MLS) for recent resales of homes proximate to former or existing refineries, similar to the subjects location proximate to the Chevron refinery. In addition, we utilized The Gregory Group, who surveys active new home projects in California and Nevada, to analyze current base prices of active projects in the surrounding market area.
We surveyed four areas proximate to former or existing refineries, which included the neighborhood immediately south of the Chevron Richmond Refinery, as well as the area east of the Chevron Richmond Refinery, neighborhoods adjacent to the Phillips 66 San Francisco Refinery and the NuStar Energy within Hercules and Rodeo, and the neighborhoods adjacent to the Shell Martinez Refinery.
A summary of detached single‐family home resales within each of these queried locations since January 1, 2021 is provided in the table below. Further detail of these quires as provided by the MLS are provided at the end of this letter.
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4 There is also one active detached project within Richmond, developed by William Lyon Homes; this is a small lot (2,000 sf) subdivision of 95 homes. The project summery as provided by The Gregory Group is shown on the following page; this project is located at the southeast quadrant of Marina Way S. and Wright Avenue, south of Interstate 580. It is east of the Harbor Channel and north of the Inner Harbor Basin, approximately 0.8 miles north of the waterfront.
Nighborhood:
South of Chevron
Richmond Refinery
East of Chevron
Richmond Refinery
Adjacent to Phillips 66
San Francisco Refinery &
NuStar Energy
Adjacent to Shell
Martinez Refinery
No. of Sales Since 1/2021 2 19 42 32
Home Price
Minimum $1,575,000 $490,000 $750,000 $385,000
Maximum $1,800,000 $805,000 $1,425,000 $1,125,000
Avera ge $1,687,500 $622,833 $1,032,448 $774,154
Home Size
Minimum 2,300 991 2,053 1,231
Maximum 3,161 2,869 4,200 3,118
Avera ge 2,731 1,814 2,856 1,890
Price per SF
Minimum $569.44 $263.03 $277.38 $298.27
Maximum $684.78 $600.40 $488.00 $564.13
Avera ge $627.11 $356.39 $365.89 $425.56
Days on Market
Minimum 4 2 0 3
Maximum 41 163 92 68
Avera ge 23 26 19 17
Year Built
Minimum 2006 2001 2000 2002
Maximum 2014 2020 2021 2019
Avera ge 2010 2006 2007 2011
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5 The homes within this project are smaller than the average single‐family home (detached) proposed for the subject (3,500 square feet). Further, given its location further removed from the waterfront, a base price for the subject above this project is reasonable.
Of the recent single‐family home resales (detached) within the immediate area of the Chevron Richmond Refinery, the homes located to the south, most proximate to the water are considered most similar to the subject. Two homes sold within this surveyed area:
Address Year Built Bed / Bath Home Size Sales Price 500 Tremont Avenue 2014 3 bed/3 bath 2,300 SF $1,575,000 531 Santa Fe Avenue 2006 4 bed/ 4 bath 3,161 SF $1,800,000
In addition to the date above, we also surveyed the East Bay Area region for new home redevelopment projects actively marketing (or recently closed out) new homes. These projects are presented on the following pages.
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6 As the subject property will be developed as a master planned community of multiple product lines, with multiple new homebuilders, the following projects resemble similar such master planned developments:
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7 Considering the subject would be new construction and within a new community of Richmond, as well as the subject’s hillside location, which would promote views of the Bay, based on the data herein a base price for the average 3,500 square foot home of $1,800,000 is considered reasonable (approximately $514 per square foot).
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ATTACHMENT 5
8 As for the attached for‐sale product, there was limited resales within the queried areas. Specifically, there were five attached resales within a project in Martinez, adjacent to the Shell Martinez Refinery, which ranged from $650,000 and $714,688. These homes were constructed in 2016 and were between 1,874 and 2,074 square feet in size.
There are two active attached projects located in El Cerrito and Martinez. Again, given the inland location of Martinez, limited reliance is given to the active project in this market area. El Cerrito is located southeast of Richmond, east of Interstate 80. While this project does not feature a waterfront location, or close proximity to the waterfront, we have considered the current base pricing of this project in order to estimate the base price of the subject’s attached for‐sale product types (low rise apartments and townhomes, and mid‐rise condominiums).
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ATTACHMENT 5
9 DRAFT
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10 The low‐rise apartments and townhomes are proposed to have an average unit size of 1,800 square feet, and mid‐rise condominiums 1,500 square feet. Based on the subject’s location and development along the hillside of Point Molate, it is reasonable to expect base prices towards the upper end of the range indicated by the Village 29 project (excluding the smallest (410 sf units)), which range from $928,952 to $1,598,499). Therefore, a base price for the average 1,800 square foot townhome unit of $1,350,000 is considered reasonable (approximately $750 per square foot), and for the 1,500 square foot condominium unit a price of $1,300,000 is reasonable (approximately $875 per square foot).
As part of this analysis recent sales data was also obtained from the Point Richmond area; specifically, within the Brickyard Landing and Waterline projects. Since January 1, 2020, there have been 69 sales within these communities. Excluding homes/units constructed prior to 2000, homes have sold at price points from $635,000 to $2,450,000. The lower price points are reflective of attached units; the lowest sale price of detached units was $850,000. A summary of the most applicable sales are shown on the next page. DRAFT
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11 DRAFT
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12 Finally, we will examine the ability to pay among prospective buyers for the highest estimated price points concluded for each of the for‐sale residential components. First, we will estimate the required annual household income based on typical mortgage parameters in the subject’s market area.
Specifically, we will employ a loan‐to‐value ratio of 80% (down payment of 20%), mortgage interest rates of 3.00%, 360 monthly payments, and a 40% ratio for the housing costs as a percent of monthly income (inclusive of principal, interest, all taxes and insurance). As alluded to above, property tax payments are accounted for in the analysis. Total taxes (ad valorem taxes, direct charges and bond payments) of 2.0% of assessed value, which includes future proposed CFD Special Taxes, is utilized for this analysis.
The following table shows the estimate of the annual household income that would be required to afford homes priced at the estimated price points.
In the following table we show the income brackets within a seven‐mile radius of the subject along with estimates of the percentage of households able to afford the low rise townhomes priced at $1,350,000 within each income bracket. Although, a representative area of typical buyers for the subject property would likely characterize a broader area.
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13 For‐Rent Residential
The for‐rent residential component is proposed to include three product lines: 68 low rise apartments and townhomes (1,500 square foot average unit size), 157 mid‐rise apartments (1,000 square foot average unit size) and 67 affordable units (800 square foot average unit size).
In the collection of market data we searched for multifamily properties have sold since January 1, 2020 within market areas surrounding Richmond, which included, but not limited to, Oakland, Berkley, Martinez, San Pablo, El Cerrito and Alameda. We compiled 21 sales; although, a majority of these properties were constructed between 1960 and 2000. Only four sales were of newer construction, between 2003 and 2020, and are summarized in the following table:
Considering the sales above, the estimated value of $400,000 per low rose apartment/townhome unit as shown in the finance place is supportable, as well as the $450,000 per mid‐rise apartment unit.
Due to the limited information available related to the affordable for‐rent units (i.e., very low, low, moderate income restrictions, etc.), it is difficult to opine on the anticipated sale price, as affordable housing transactions can be influenced by deed restrictions, housing assistance programs and whether low‐income housing tax credits (LIHTC) are available. Thus, a value to some degree less than the market rate units is probable.
Address City Specific Use Sale Date
Effective
Sale Price Occupan c
Gross
Building
Area SF
GLA/
Rentable
Area
No.
of
Units Price/Units
Year
Built
1401 Jackson St. Oakland Multifamily-Retail 2/24/2020 $20,500,000 100% 39,041 39,041 45 455,556 $ 2009 334 Main St. Martinez Garden/Low Rise 4/2/2020 $1,500,000 100% 2,530 2,530 4 375,000 $ 2003 625 16th Street Oakland Mid/High-Rise 6/2/2020 $77,900,000 0% 130,000 96,005 140 556,429 $ 2020 4901 Broadway Oakland Multifamily-Retail 3/31/2020 $80,995,000 94% 98,618 98,618 130 623,038 $ 2018 DRAFT
ATTACHMENT 5
14 Non‐Residential
The non‐residential component is proposed to include approximately 55,000 square feet of rentable restaurant/retail space, 304,580 square feet of rentable mixed use office R&D space, and 31,194 square feet of rentable office space.
According to CompStak, a nationwide commercial real estate data platform, the average commercial (office, retail and industrial) lease rate over the past six months in the Richmond/San Pablo submarket was $35.40 per square foot and an average net effective lease rate of $37.68 per square foot. The average lease term was four years and six months, while the average tenant improvement allowance was $3.47 per square foot and average free rent was 2.3 months.
For purposes of analyzing non‐residential land uses encumbered by a CFD, we identified the Pacific Commons Power Center, which is part of the City of Fremont Community Facilities District (CFD) No. 1 (Pacific Commons). This project was predominately constructed between 2004 and 2006. We queried CoStar Property Analytics for recent leasing activity of commercial properties (office, retail, R&D) within the Pacific Commons Power Center and the surrounding properties within the boundaries of the City of Fremont CFD No. 1 (Pacific Commons), a map of which is provided on the following page (CFD boundary lines are approximate).
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ATTACHMENT 5
15 Address Property Type Tenant/Occupant
Building
Class
Rentable
Building Area
(SF)
CoStar Estimated
Rent ($/SF/Yr.)*
Current Asking
Rent ($/SF/Yr.)
43950 Pacific Commons Blvd. Department Store Target B1 3 8 , 0 0 0 $ 2 0 . 0 0 ‐ 25.00 43923 Pacific Commons Blvd. Freestanding Dick's Sporting Goods B 46,000 $22.00 ‐ 26.00 43917 Pacific Commons Blvd. Freestanding Century Theaters C 60,000 $21.00 ‐ 25.00 43621 Pacific Commons Blvd. Freestanding Costco B1 1 9 , 1 1 8 $ 2 8 . 0 0 ‐ 34.00 43612 Pacific Commons Blvd. Freestanding B1 6 8 , 5 9 3 $ 2 5 . 0 0 ‐ 31.00 43349 Pacific Commons Blvd. Fast Food In ‐N‐Out Burger B 3,160 $30.00 ‐ 37.00 43330 Pacific Commons Blvd. Restaurant B 14,300 $31.00 ‐ 38.00 43810 Cushing Pky. Freestanding B2 2 , 7 1 8$ 1 5 . 0 0 ‐ 19.00 5318‐5338 Curie St. Freestanding B6 , 6 8 0 $ 2 7 . 0 0 ‐ 33.00 43960‐43986 Christy St. Freestanding B1 2 , 0 0 0$ 2 0 . 0 0 ‐ 25.00 43810 Christy St. Freestanding B7 , 5 3 9 $ 3 1 . 0 0 ‐ 38.00 43782 Christy St. Freestanding Kohl's B9 8 , 8 8 8$ 2 8 . 0 0 ‐ 35.00 43706‐43756 Christy St. Freestanding B9 2 , 0 7 7$ 2 2 . 0 0 ‐ 27.00 43522‐43598 Christy St. Freestanding B7 8 , 2 4 7$ 2 9 . 0 0 ‐ 35.00 43405‐43425 Christy St. Freestanding B8 , 9 0 6 $ 2 9 . 0 0 ‐ 36.00 43316 Christy St. Restaurant B6 , 6 0 3 $ 3 1 . 0 0 ‐ 37.00 * The CoStar Estimated Rent™ is CoStar’s estimated starting rent for new leases in a building. Estimated Rents are determined through a proprietary algorithm that includes several key data points, such as current historical asking rents, historical lease transactions, market submarket trends, and more.
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16 According to CoStar, the market retail lease rate for the city of Fremont is $33.40 per square foot and the market industrial lease rate is $16.53 per square foot. Based on the market averages for the city of Fremont as reported by CoStar, the data for commercial properties encumbered by a CFD (Pacific Commons) are generally consistent, if not slightly less than lease rates of unencumbered commercial properties.
In the collection of market data we searched for new lease comparable for commercial properties (office, retail, R&D) within market areas surrounding Richmond, which included, but not limited to, Oakland, Berkley, El Cerrito and Alameda. Our query identified six full service leases, three triple net leases and two modified gross leases. A majority of the comparables are of newer construction, or renovated within the last 20 years. The comparables are summarized in the following table by lease reimbursement method.
Address Property Type
Building
Class
Rentable
Building Area
(SF)
CoStar Estimated
Rent ($/SF/Yr.)*
Current Asking
Rent ($/SF/Yr.)
44320 Nobel Dr. Light Distribution B 105,700 $14.00 ‐ 17.00 44259 Nobel Dr. R&D C6 0 , 0 0 0$ 1 3 . 0 0 ‐ 16.00
44235 Nobel Dr. R&D B7 4 , 1 6 6 $21.00
44217 Nobel Dr. Light Manufacturing B 65,332 $15.00 ‐ 18.00 44201 Nobel Dr. Light Manufacturing B 129,931 $15.00 ‐ 18.00 44091‐44131 Noebl Dr. Light Manufacturing B 187,298 $10.00 ‐ 12.00 44051‐44061 Nobel Dr. Light Manufacturing B 53,250 $11.00 ‐ 13.00 6700 Automall Pky. Warehouse B 474,454 $10.00 ‐ 12.00
44509 Pacific Commons Blvd. Warehouse B 178,910 $10.00 ‐ 12.00 44508 Pacific Commons Blvd. Warehouse B 104,399 $10.00 ‐ 12.00 44109 Pacific Commons Blvd. Warehouse B 369,180 $10.00 ‐ 12.00 44108 Pacific Commons Blvd. Manufacturing B 101,191 $14.00 ‐ 17.00 5588 Cushing Pky. Warehouse A 814,852 $10.00 ‐ 12.00
5567 Cushing Pky. Warehouse A 163,193 $10.00 ‐ 12.00
44307 Christy St. R&D B8 8 , 2 4 6$ 1 5 . 0 0 ‐ 19.00
44300 Christy St. R&D B4 2 , 6 0 4$ 1 0 . 0 0 ‐ 12.00
44200 Christy St. R&D B4 2 , 5 1 5$ 1 5 . 0 0 ‐ 19.00
5210 Bunche Dr. R&D B3 5 , 1 0 9$ 1 5 . 0 0 ‐ 18.00
5165‐5177 Brandin Ct. R&D B1 5 , 1 1 2$ 9 . 0 0 ‐ 11.00 5121‐5127 Brandin Ct. Manufacturing B 21,619 $13.00 ‐ 16.00 5120 Brandin Ct. Warehouse B 15,400 $13.00 ‐ 16.00
5071‐5087 Brandin Ct.L i g h t Manufacturing B 32,626 $15.00 ‐ 18.00 5070 Brandin Ct. Manufacturi ng B 56,257 $12.00 ‐ 15.00 5020 Brandin Ct. R&D B7 6 , 5 9 9$ 1 2 . 0 0 ‐ 14.00
5005‐5055 Brandin Ct. Light Manufacturing B 70,074 $12.00 ‐ 14.00 * The CoStar Estimated Rent™ is CoStar’s estimated starting rent for new leases in a building. Estimated Rents are determined through a proprietary algorithm that includes several key data points, such as current historical asking rents, historical lease transactions, market submarket trends, and more.
DRAFT
ATTACHMENT 5
17 Focusing on the newer construction, or properties renovated within the last 20 years, the market suggests a commercial lease rate within the following ranges: $62.28 to $68.88 per square foot, full service, and $45.00 to $65.00 per square foot, triple net. The modified gross lease comparables are of older construction (1962 and 1987); thus, limited reliance is placed on these comparables.
Considering the lease data presented herein, the estimated market lease rate for the subject’s non‐ residential components in the range of $60.00 to $70.00 per square foot, full service, is considered reasonable given the subject will be of new construction, but also considers the additional CAM related to special taxes (proposed CFD).
Sara Gilbertson
Certified General Real Estate Appraiser
California Certificate # 3002204
Eric Segal, MAI
Certified General Real Estate Appraiser
California Certificate # AG026558
Address City Start Date
Rentable Area
(Lease)
Lease
Term
Lease
Reimbursement
Method Lessee
Effective Rental
Rate ($/SF/Yr)
Effective Rental
Rate ($/SF/Mo)
Property
Class
Year
Built
Year
Renovated Stories
1221 Broadway Oakland 12/1/2021 79,357 126 Full Service Fivetran $65.04 $5.42 A 1976 24 1300 Clay St. Oakland 11/15/2021 9,441 128 Full Service Terrphase Engineering $62.28 $5.19 A 1990 2002 11 501 14th St. Oakland 10/1/2021 8,448 64 Full Service Allied Administrators $51.84 $4.32 B 1990 3 426 17th St. Oakland 9/1/2021 9,243 84 Full Service Haley & Aldrige $63.48 $5.29 B 1927 2001 7 1111 Broadway Oakland 9/1/2021 14,647 91 Full Service Gibbs Law Group $68.88 $5.74 A 1990 2002 24 1999 Harrison St. Oakland 5/1/2021 9,106 39 Full Service Husch Blackwell $64.20 $5.35 A 1985 2006 27 Minimum 8,448 39 $51.84 $4.32
Maximum 79,357 128 $68.88 $5.74
Av erage 21,707 89 $62.62 $5.22
2580 Bancroft Way Berkeley 8/1/2021 3,400 180 Triple Net Raising Cane's $65.00 $5.42 A 2021 8 11720-11760 San Pablo Ave. El Cerrito 7/19/2021 898 36 Triple Net Gangnam Tofu $27.00 $2.25 B 1977 4 2450 Valdez St. Oakland 7/1/2021 4,123 120 Triple Net Limon Rotisserie $45.00 $3.75 A 2019 7 Minimum 898 36 $27.00 $2.25
Maximum 4,123 180 $65.00 $5.42
Av erage 2,807 112 $45.67 $3.81
3017 Telegraph Ave. Berkeley 8/1/2021 2,462 120 Modified Gross Yip, P. $37.76 $3.15 B 1987 3 396-398 Colusa Ave. Kensington 1/1/2021 1,075 36 Modified Gross Natura Health & Wellness $30.00 $2.50 B 1962 1 Minimum 1,075 36 $30.00 $2.50
Maximum 2,462 120 $37.76 $3.15
Av erage 1,769 78 $33.88 $2.82
DRAFT
ATTACHMENT 5
18 MLS Resale Data
DRAFT
ATTACHMENT 5
Map Report
Listings
# Listing # Status Address City ZIP Code Area Type Price Beds Baths Sq Ft Acres 1 40950983 Closed 500 Tremont Ave Richmond 94801 Richmond-Point Richm RESI $1,575,000 3 3 2300 0.1492 2 40954299 Closed 531 Santa Fe Ave Richmond 94801 Richmond-Point Richm RESI $1,800,000 4 4 3161 0.1376 Presented By: Eric Segal Lic: AG026558 / Seevers Jordan Ziegenmeyer Phone: 415-435-3883 Lic:
Copyright: 2021 by San Francisco Assoc of REALTORS - All data, including all measurements and calculations of area, is obtained from various sources and has not been, and will not be, verified by broker or MLS. All information should be independently reviewed and verified for accuracy.
Copyright ©2021 Rapattoni Corporation. All rights reserved.
U.S. Patent 6,910,045
Map data ©2021 Google
DRAFT
ATTACHMENT 5
Statistical Summary
Criteria
Map Draw 1 Shape Property Types RESI, RESL, INCP Status Closed (1/1/2021 or after) Year Built 2000 or more Listing Statuses
Active Pending Closed Other Total
0 0 2 0 2
Aggregate Statistics
Minimum Average Median Maximum Tot. Val.
Bedrooms 3 4 4 4
Bathrooms 3 3 3 4
Square Feet 2,300 2,731 2,730 3,161
Approx Lot Size Acres 0.14 0.14 0.14 0.15
Approx Lot Size SqFt 5,996 6,248 6,248 6,500
Year Built* 2006 2010 2010 2014
Listing Price $1,699,000 $1,699,500 $1,699,500 $1,700,000 Listing Price Per Sq. Ft. $537.49 $638.31 $638.31 $739.13 Lot Size Listing Per Acre $11,392,615.38 $11,867,792.02 $11,867,792.02 $12,342,968.65 Closed Price $1,575,000 $1,687,500 $1,687,500 $1,800,000 $3,375,000 Closed Price Per Sq. Ft. $569.44 $627.11 $627.11 $684.78 Lot Size Closed Price Per Acre $10,554,923.08 $11,815,820.44 $11,815,820.44 $13,076,717.81 DOM 4 22 22 41
CDOM 4 22 22 41
*Calculations for this field only use listings with valid values; listings with blank or zero values are excluded DOM Statistics for Closed Listings
# of Listings % of Total SP % LP
0-30 Days 1 50 105.94
31-60 Days 1 50 92.65
61-90 Days 0 0
91-120 Days 0 0
120+ Days 0 0
DRAFT
ATTACHMENT 5
# of Listings % of Total SP % LP
Totals/Averages 2 100 99.30
CDOM Statistics for Closed Listings
# of Listings % of Total SP % LP
0-30 Days 1 50.00 105.94
31-60 Days 1 50.00 92.65
61-90 Days 0 0.00
91-120 Days 0 0.00
120+ Days 0 0.00
Totals/Averages 2 100 99.30
Eric Segal
Seevers Jordan Ziegenmeyer
Phone: Primary:415-435-3883
Office: 415-435-3883
Email: [email protected]
Lic: AG026558 Office Lic.:
Copyright: 2021 by San Francisco Assoc of REALTORS - All data, including all measurements and calculations of area, is obtained from various sources and has not been, and will not be, verified by broker or MLS. All information should be independently reviewed and verified for accuracy.
Copyright ©2021 Rapattoni Corporation. All rights reserved.
U.S. Patent 6,910,045
Generated: 12/13/2021 10:35 AM
DRAFT
ATTACHMENT 5
Map Report
Listings
# Listing # Status Address City ZIP Code Area Type Price Beds Baths Sq Ft Acres 1 40915899 Closed 642 5th N St Richmond 94801 Richmond-North & Wes RESI $545,000 4 2 2072 0.1993 2 81807312 Closed 11 Willard Ave Richmond 94801 20803 RESI $490,000 4 3 1361 0.0574 3 40922734 Closed 1541 Giaramita St Richmond 94801 Richmond-North & Wes RESI $629,000 4 2 1686 0.1148 4 40926889 Closed 535 Marina Bay Pkwy Pkwy Richmond 94804 Richmond-South INCP $1,050,000 0 4158 0.1256 5 40929019 Closed 145 Ellison Ln Richmond 94801 Richmond-North & Wes RESI $608,000 4 3 2055 0.0597 6 40942310 Closed 1318 York St Richmond 94801 Richmond-North & Wes RESI $520,000 3 3 1580 0.0574 7 40946808 Closed 116 Spears Cir Richmond 94801 Richmond-North & Eas RESI $805,000 5 3 2401 0.0597 8 40947576 Closed 481 Metro Walk Way Richmond 94801 Richmond-North & Eas RESI $581,000 4 4 1760 0.0293 9 40946807 Closed 1533 Hoffman Blvd Richmond 94804 Richmond-South RESI $775,000 4 2 2869 0.2009 10 40949853 Closed 251 S 3rd St Richmond 94804 Richmond-South RESI $600,000 3 3 1631 0.0646 11 421561858 Closed 479 Metro Walk Way Richmond 94801 Richmond/San Pablo RESI $585,000 4 4 1649 0.0253 12 40954442 Closed 140 Spears Cir Richmond 94801 Richmond-North & Eas RESI $720,000 4 3 2401 0.0551 13 40955718 Closed 407 Malcolm Dr Richmond 94801 Richmond-North & Wes RESI $750,000 3 3 2067 0.0590 14 40956997 Closed 310 Village Ln Richmond 94801 Richmond-North & Wes RESI $590,000 4 4 1760 0.0325 15 40960863 Closed 580 Sanford Ave North Richmond 94801 Richmond-North & Wes RESI $595,000 3 2 991 0.1148 16 81856442 Closed 272 Malcolm Dr Richmond 94801 Richmond-North & Wes RESI $675,000 3 3 1829 0.0823 17 81859461 Closed 465 Metro Walk Way Richmond 94801 Richmond-North & Wes RESI $595,000 4 4 1666 0.0300 18 40966470 Closed 448 Marina Way Richmond 94801 Richmond-North & Wes RESI $608,000 3 4 1640 0.0224 19 40970459 Closed 1344 Battery St Richmond 94801 Richmond-North & Wes RESI $540,000 3 2 1226 0.0574 Presented By: Eric Segal Lic: AG026558 / Seevers Jordan Ziegenmeyer Phone: 415-435-3883 Lic:
Copyright: 2021 by San Francisco Assoc of REALTORS - All data, including all measurements and calculations of area, is obtained from various sources and has not been, and will not be, verified by broker or MLS. All information should be independently reviewed and verified for accuracy.
Copyright ©2021 Rapattoni Corporation. All rights reserved.
U.S. Patent 6,910,045
Map data ©2021 Google
DRAFT
ATTACHMENT 5
Statistical Summary
Criteria
Contains selected listings. Map Draw 1 Shape Property Types RESI, RESL, INCP Status Closed (1/1/2021 or after) Year Built 2000 or more Listing Statuses
Active Pending Closed Other Total
0 0 19 0 19
Aggregate Statistics
Minimum Average Median Maximum Tot. Val.
Bedrooms 0 3 4 5
Bathrooms 0 2 3 4
Square Feet 991 1,937 1,760 4,158
Approx Lot Size Acres 0.02 0.08 0.06 0.20
Approx Lot Size SqFt 975 3,318 2,570 8,750
Year Built* 2001 2006 2006 2020
Listing Price $449,999 $614,505 $575,000 $1,098,000
Listing Price Per Sq. Ft. $236.21 $333.18 $335.44 $552.98 Lot Size Listing Per Acre $2,760,138.25 $11,388,236.95 $9,234,720.00 $25,689,230.77 Closed Price $490,000 $645,316 $600,000 $1,050,000 $12,261,000 Closed Price Per Sq. Ft. $252.53 $350.92 $354.76 $600.40 Lot Size Closed Price Per Acre $2,735,046.08 $11,983,802.70 $9,408,960.00 $27,163,569.23 DOM 2 25 16 163
CDOM 2 27 17 163
*Calculations for this field only use listings with valid values; listings with blank or zero values are excluded DOM Statistics for Closed Listings
# of Listings % of Total SP % LP
0-30 Days 15 78 105.82
31-60 Days 3 15 99.89
61-90 Days 0 0
91-120 Days 0 0
120+ Days 1 5 108.89
DRAFT
ATTACHMENT 5
# of Listings % of Total SP % LP
Totals/Averages 19 100 104.87
CDOM Statistics for Closed Listings
# of Listings % of Total SP % LP
0-30 Days 14 73.68 105.81
31-60 Days 4 21.05 101.31
61-90 Days 0 0.00
91-120 Days 0 0.00
120+ Days 1 5.26 108.89
Totals/Averages 19 100 105.34
Eric Segal
Seevers Jordan Ziegenmeyer
Phone: Primary:415-435-3883
Office: 415-435-3883
Email: [email protected]
Lic: AG026558 Office Lic.:
Copyright: 2021 by San Francisco Assoc of REALTORS - All data, including all measurements and calculations of area, is obtained from various sources and has not been, and will not be, verified by broker or MLS. All information should be independently reviewed and verified for accuracy.
Copyright ©2021 Rapattoni Corporation. All rights reserved.
U.S. Patent 6,910,045
Generated: 12/13/2021 10:39 AM
DRAFT
ATTACHMENT 5
Map Report
Listings
# Listing # Status Address City ZIP Code Area Type Price Beds Baths Sq Ft Acres 1 22029852 Closed 163 Trestle Cv Hercules 94547 21137 RESI $945,000 5 4 3170 0.1295 2 22030132 Closed 160 Watermark Ter Hercules 94547-2658 21137 RESI $1,085,000 4 3 3027 0.1605 3 40914545 Closed 701 San Pablo Ave Rodeo 94572 Rodeo INCP $2,400,000 0 17652 0.6200 4 40913953 Closed 172 Watermark Ter Hercules 94547 Hercules-1301 RESI $1,100,000 5 4 3239 0.1753 5 40925020 Closed 181 Copper Beech Gln Hercules 94547 Hercules-1301 RESI $750,000 4 3 2123 0.0959 6 40928942 Closed 512 Laurelwood Dr Hercules 94547 Hercules-1302 RESI $830,000 5 3 2703 0.1104 7 40932406 Closed 163 Trestle Cv Hercules 94547 Hercules-1302 RESI $945,000 5 4 3170 0.1295 8 40933373 Closed 160 Maritime Ter Hercules 94547 Hercules-1302 RESI $1,135,000 4 5 3489 0.2689 9 40934253 Closed 139 Dockside Bay Hercules 94547 Hercules-1302 RESI $1,040,000 6 4 3634 0.2302 10 40933007 Closed 1042 Gardenia Loop Hercules 94547 Hercules-1302 RESI $920,000 5 4 2803 0.0803 11 40935034 Closed 121 S Arbor Bay Hercules 94547 Hercules-1302 RESI $1,125,000 5 5 3489 0.1287 12 40936703 Closed 1975 Vista Del Rio St Crockett 94525 Crockett/Port Costa RESI $1,165,000 4 4 4200 0.3444 13 40937534 Closed 124 Jacaranda Ct Hercules 94547 Hercules-1301 RESI $810,000 4 3 2108 0.1031 14 40937502 Closed 1045 Rock Harbor Pt Hercules 94547 Hercules-1302 RESI $1,270,000 5 4 3410 0.1399 15 40938177 Closed 118 Hidden Cove Hercules 94547 Hercules-1302 RESI $1,200,000 5 4 3228 0.1661 16 40938875 Closed 1159 Lantern Bay Hercules 94547 Hercules-1301 RESI $950,000 4 3 2459 0.1060 17 221017058 Closed 1942 Tioga Loop Hercules 94547-2793 Hercules-1302 RESI $910,000 4 4 2419 0.0538 18 221021129 Closed 1851 Shasta Ln Hercules 94547-2748 Hercules-1302 RESI $855,000 3 3 2555 0.0501 19 40940532 Closed 121 Watermark Ter Hercules 94547 Hercules-1302 RESI $1,250,000 4 4 3389 0.1519 20 40943741 Closed 181 Trestle Cv Hercules 94547 Hercules-1301 RESI $1,128,888 4 3 2506 0.1440 21 321021922 Closed 2009 Shasta Ln Hercules 94547-2788 Hercules-1301 RESI $920,000 4 4 2441 0.0451 22 321022611 Closed 1045 S Shelter Bay Hercules 94547-2633 Hercules-1301 RESI $1,005,000 5 3 3170 0.1148 23 321027090 Closed 1012 N Shelter Bay Hercules 94547-2617 Hercules-1302 RESI $1,264,000 5 4 3410 0.1449 24 40948399 Closed 1039 Regatta Pt Hercules 94547 Hercules-1302 RESI $1,425,000 5 5 3832 0.1545 25 321027921 Closed 759 Edward Werth Dr Rodeo 94572-1458 Rodeo RESI $769,999 5 3 2300 26 40949943 Closed 112 White Cap Cv Hercules 94547 Hercules-1302 RESI $1,200,000 4 3 2459 0.1014 27 81845098 Closed 2007 Tioga Loop Hercules 94547 Hercules-1301 RESI $922,500 4 4 2419 0.0433 28 40948082 Closed 1060 Victoria Park Hercules 94547 Hercules-1301 RESI $1,310,000 5 4 3410 0.1391 29 40951906 Closed 169 Trestle Cv Hercules 94547 Hercules-1302 RESI $1,275,000 4 4 2937 0.1430 30 40950434 Closed 154 Driftwood Cv Hercules 94547 Hercules-1302 RESI $1,050,000 4 3 2459 0.1165 31 40953674 Closed 1009 Gardenia Loop Hercules 94547 Hercules-1301 RESI $1,078,000 4 3 3034 0.0781 32 421564184 Closed 1066 Gardenia Loop Hercules 94547-2621 Hercules-1301 RESI $1,104,000 5 4 2803 0.0871 33 40955207 Closed 115 Boxwood Ln Hercules 94547 Hercules-1302 RESI $960,000 4 3 2108 0.1258 34 40958189 Closed 130 Copper Beech Gln Hercules 94547 Hercules-1302 RESI $860,000 4 3 2257 0.0792 35 40958929 Closed 169 Copper Beech Gln Hercules 94547 Hercules-1302 RESI $990,000 5 3 2418 0.0890 36 81855250 Closed 1150 Waverly Cir Hercules 94547 Hercules-1301 RESI $870,000 4 3 2400 0.0933 37 81857555 Closed 1970 Tioga Loop Hercules 94547 Hercules-1301 RESI $901,000 4 4 2419 0.0444 38 40962687 Closed 515 Laurelwood Dr Hercules 94547 Hercules-1302 RESI $900,000 4 3 2400 0.1088 39 40963160 Closed 202 Stone Pine Ct Hercules 94547 Hercules-1302 RESI $845,000 3 3 2053 0.0997 Map data ©2021 Google
DRAFT
ATTACHMENT 5
# Listing # Status Address City ZIP Code Area Type Price Beds Baths Sq Ft Acres 40 40965281 Closed 1027 Gardenia Loop Hercules 94547 Pinole RESI $1,017,000 4 3 3034 0.0781 41 40966833 Closed 145 Driftwood Cv Hercules 94547 Hercules-1302 RESI $1,000,000 5 3 2730 0.0918 42 321088115 Closed 109 Watermark Ter Hercules 94547-2648 Hercules-1301 RESI $1,250,000 5 5 3489 0.1301 Presented By: Eric Segal Lic: AG026558 / Seevers Jordan Ziegenmeyer Phone: 415-435-3883 Lic:
Copyright: 2021 by San Francisco Assoc of REALTORS - All data, including all measurements and calculations of area, is obtained from various sources and has not been, and will not be, verified by broker or MLS. All information should be independently reviewed and verified for accuracy.
Copyright ©2021 Rapattoni Corporation. All rights reserved.
U.S. Patent 6,910,045
DRAFT
ATTACHMENT 5
Statistical Summary
Criteria
Contains selected listings. Map Draw 1 Shape Property Types RESI, RESL, INCP Status Closed (1/1/2021 or after) Year Built 2000 or more Listing Statuses
Active Pending Closed Other Total
0 0 42 0 42
Aggregate Statistics
Minimum Average Median Maximum Tot. Val.
Bedrooms 0 4 4 6
Bathrooms 0 3 3 5
Square Feet 2,053 3,208 2,803 17,652
Approx Lot Size Acres 0.04 0.13 0.11 0.62
Approx Lot Size SqFt 1,885 5,839 4,905 27,007
Year Built* 2000 2007 2004 2021
Listing Price $750,000 $1,005,729 $936,250 $2,450,000
Listing Price Per Sq. Ft. $138.79 $339.05 $352.95 $427.00 Lot Size Listing Per Acre $2,889,480.00 $9,335,088.98 $8,226,635.60 $20,279,174.34 Closed Price $750,000 $1,065,009 $1,011,000 $2,400,000 $44,730,387 Closed Price Per Sq. Ft. $135.96 $360.41 $369.76 $488.00 Lot Size Closed Price Per Acre $3,383,160.00 $9,900,954.44 $8,834,288.25 $21,317,824.93 DOM 0 22 10 151
CDOM 0 23 10 151
*Calculations for this field only use listings with valid values; listings with blank or zero values are excluded DOM Statistics for Closed Listings
# of Listings % of Total SP % LP
0-30 Days 33 78 107.52
31-60 Days 5 11 99.10
61-90 Days 2 4 109.63
91-120 Days 1 2 101.01
120+ Days 1 2 97.96
DRAFT
ATTACHMENT 5
# of Listings % of Total SP % LP
Totals/Averages 42 100 103.04
CDOM Statistics for Closed Listings
# of Listings % of Total SP % LP
0-30 Days 31 73.81 107.86
31-60 Days 7 16.67 99.87
61-90 Days 2 4.76 109.63
91-120 Days 1 2.38 101.01
120+ Days 1 2.38 97.96
Totals/Averages 42 100 103.27
Eric Segal
Seevers Jordan Ziegenmeyer
Phone: Primary:415-435-3883
Office: 415-435-3883
Email: [email protected]
Lic: AG026558 Office Lic.:
Copyright: 2021 by San Francisco Assoc of REALTORS - All data, including all measurements and calculations of area, is obtained from various sources and has not been, and will not be, verified by broker or MLS. All information should be independently reviewed and verified for accuracy.
Copyright ©2021 Rapattoni Corporation. All rights reserved.
U.S. Patent 6,910,045
Generated: 12/13/2021 10:29 AM
DRAFT
ATTACHMENT 5
Map Report
Listings
# Listing # Status Address City ZIP Code Area Type Price Beds Baths Sq Ft Acres 1 40903570 Closed 14 Goree Ct Martinez 94553 Martinez RESI $640,000 3 2 1679 0.2124 2 40934620 Closed 1241 Santa Fe Ave Martinez 94553 Martinez RESI $540,000 2 2 0.0918 3 40935099 Closed 113 Tierney Pl Martinez 94553 Martinez RESI $650,000 4 4 2065 4 40935929 Closed 516 Falling Star Dr Martinez 94553 Martinez RESI $670,000 3 3 1516 0.0644 5 421516446 Closed 965 Shadow Hill Martinez 94553-4849 Martinez RESI $718,000 3 3 1726 0.0672 6 40938863 Closed 221 Tierney Pl Martinez 94553 Martinez RESI $710,000 4 4 1874 7 40939073 Closed 4472 Actriz Pl Martinez 94553 Martinez RESL $3,100 4 3 1772 0.1377 8 40939250 Closed 527 Falling Star Dr Martinez 94553 Martinez RESI $775,000 4 3 2146 0.0682 9 40939485 Closed 12 Emshee Ln Martinez 94553 Martinez RESI $925,000 4 3 2661 0.1808 10 40941621 Closed 1147 Vine Ave Martinez 94553 Martinez RESI $850,000 4 3 2177 0.1217 11 40942523 Closed 117 Tierney Pl Martinez 94553 Martinez RESI $701,000 4 4 2074 12 81837268 Closed 810 Waterbird Pl Rio Vista 94571 Rio vista RESI $385,000 2 2 1231 0.1211 13 40944787 Closed 800 Little Valley Rd Martinez 94553 Martinez RESL $3,000 3 3 1516 0.0683 14 40944298 Closed 258 Ladybug Ln Martinez 94553 Martinez RESI $760,000 3 3 1516 0.0483 15 40945544 Closed 602 Falling Star Dr Martinez 94553 Martinez RESI $698,000 3 3 1516 0.0681 16 40945771 Closed 1131 Vine Ave Martinez 94553 Martinez RESI $830,000 3 3 2055 0.1217 17 40945340 Closed 16 Emshee Ln Martinez 94553 Martinez RESI $975,000 5 3 2976 0.1808 18 40946705 Closed 836 Little Valley Rd Martinez 94553 Martinez RESI $725,000 3 3 1581 0.0593 19 40947505 Closed 2220 Pomona Ave Martinez 94553 Martinez RESI $735,000 3 3 1726 0.1012 20 40948938 Closed 4424 Actriz Pl Martinez 94553 Martinez RESI $777,000 4 3 1772 0.1395 21 40952119 Closed 1355 Plaza Dr Martinez 94553 Martinez RESI $762,500 3 2 1647 0.2553 22 421553575 Closed 1161 Plaza Dr Martinez 94553 Martinez RESI $720,390 3 2 1277 0.1138 23 40952443 Closed 129 Ladybug Ln Martinez 94553 Martinez RESI $790,000 3 3 1516 0.0731 24 40951478 Closed 611 Falling Star Dr Martinez 94553 Martinez RESI $700,000 3 3 1572 0.0526 25 40954999 Closed 977 Shadow Hill Dr Martinez 94553 Martinez RESI $840,000 3 3 1726 0.1001 26 40955800 Closed 1040 Delacy Ave Martinez 94553 Martinez RESI $852,000 5 3 2584 0.1851 27 40957266 Closed 808 Little Valley Rd Martinez 94553 Martinez RESI $740,000 3 3 1581 0.0647 28 40959638 Closed 140 Silva Ct Martinez 94553 Martinez RESI $1,125,000 4 3 2929 0.2904 29 40960558 Closed 4536 Actriz Pl Martinez 94553 Martinez RESI $785,148 4 3 1771 0.1907 30 40961212 Closed 801 Tierney Pl Martinez 94553 Martinez RESI $714,688 4 4 2073 31 40961273 Closed 4456 Actriz Pl Martinez 94553 Martinez RESI $930,000 5 4 3118 0.2134 32 40961835 Closed 926 Shadow Hill Dr Martinez 94553 Martinez RESI $815,000 4 3 2146 0.0715 33 40962370 Closed 615 Falling Star Dr Martinez 94553 Martinez RESI $735,000 3 3 1572 0.0526 34 40962970 Closed 301 Tierney Pl Martinez 94553 Martinez RESI $710,000 4 4 2073 35 40964907 Closed 177 Ladybug Ln Martinez 94553 Martinez RESI $725,000 3 3 1516 0.0445 36 40965107 Closed 1035 Sierra Ave Martinez 94553 Martinez RESI $795,000 3 3 1825 0.1205 37 40967558 Closed 252 Explorer Way Martinez 94553 Martinez RESI $910,000 4 3 2371 0.2787 38 40967896 Closed 29 Ladybug Ct Martinez 94553 Martinez RESI $749,900 3 3 1582 0.0480 39 40969379 Closed 157 Ladybug Ln Martinez 94553 Martinez RESI $795,000 3 3 1582 0.0552 Map data ©2021 Google
DRAFT
ATTACHMENT 5
Presented By: Eric Segal Lic: AG026558 / Seevers Jordan Ziegenmeyer Phone: 415-435-3883 Lic:
Copyright: 2021 by San Francisco Assoc of REALTORS - All data, including all measurements and calculations of area, is obtained from various sources and has not been, and will not be, verified by broker or MLS. All information should be independently reviewed and verified for accuracy.
Copyright ©2021 Rapattoni Corporation. All rights reserved.
U.S. Patent 6,910,045
DRAFT
ATTACHMENT 5
Statistical Summary
Criteria
Map Draw 1 Shape Property Types RESI, RESL, INCP Status Closed (1/1/2021 or after) Year Built 2000 or more Listing Statuses
Active Pending Closed Other Total
0 0 39 0 39
Aggregate Statistics
Minimum Average Median Maximum Tot. Val.
Bedrooms 2 3 3 5
Bathrooms 2 3 3 4
Square Feet 1,231 1,896 1,726 3,118
Approx Lot Size Acres 0.04 0.12 0.07 0.29
Approx Lot Size SqFt 1,938 5,205 3,184 12,651
Year Built* 2002 2011 2011 2019
Listing Price $3,000 $695,218 $699,950 $979,000
Listing Price Per Sq. Ft. $1.75 $375.48 $388.02 $508.22 Lot Size Listing Per Acre $22,506.00 $7,657,069.93 $5,880,600.00 $15,731,498.45 Closed Price $3,000 $724,737 $740,000 $1,125,000 $28,264,726 Closed Price Per Sq. Ft. $1.75 $392.50 $403.89 $564.13
Lot Size Closed Price Per Acre $22,506.00 $7,991,060.32 $6,331,757.14 $16,295,665.63 DOM 3 16 11 68
CDOM 3 16 11 68
*Calculations for this field only use listings with valid values; listings with blank or zero values are excluded DOM Statistics for Closed Listings
# of Listings % of Total SP % LP
0-30 Days 35 89 104.70
31-60 Days 3 7 99.34
61-90 Days 1 2 98.39
91-120 Days 0 0
120+ Days 0 0
DRAFT
ATTACHMENT 5
# of Listings % of Total SP % LP
Totals/Averages 39 100 100.81
CDOM Statistics for Closed Listings
# of Listings % of Total SP % LP
0-30 Days 34 87.18 104.80
31-60 Days 4 10.26 99.53
61-90 Days 1 2.56 98.39
91-120 Days 0 0.00
120+ Days 0 0.00
Totals/Averages 39 100 100.91
Eric Segal
Seevers Jordan Ziegenmeyer
Phone: Primary:415-435-3883
Office: 415-435-3883
Email: [email protected]
Lic: AG026558 Office Lic.:
Copyright: 2021 by San Francisco Assoc of REALTORS - All data, including all measurements and calculations of area, is obtained from various sources and has not been, and will not be, verified by broker or MLS. All information should be independently reviewed and verified for accuracy.
Copyright ©2021 Rapattoni Corporation. All rights reserved.
U.S. Patent 6,910,045
Generated: 12/13/2021 11:05 AM
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19 Appraiser Qualifications
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20 Eric Segal, MAI
Integra Realty
Resources ‐ Sacramento
irr .com
T 916‐435‐3883
F 916‐435‐4774
590 Menlo Drive
Suite 1
Rocklin, CA 95765
Experience
Mr . Segal is a Certified General real estate appraiser and holds the Appraisal Institute's MAI designation. In 1998, Mr . Segal began his career in real estate as a research analyst/appraiser trainee for Richard Seevers and Associates. By 1999, he began writing narrative appraisal reports covering a variety of commercial properties, with an emphasis on residential master planned communities and subdivisions. Today, Mr . Segal is a partner in the firm and is involved in appraisal assignments covering a wide variety of properties including office, retail, industrial, multifamily housing, master planned communities, and specializes in the appraisal of Mello‐Roos Community Facilities Districts and Assessment Districts for land‐secured municipal financings, as well as multifamily developments under the U.S. Department of Housing and Urban Development’s Multifamily Accelerated Processing (MAP) Guide. He has developed the experience and background necessary to deal with complex assignments covering an array of property types, with a particular focus on urban redevelopment in the cities of San Francisco, Monterey, Alameda and San Mateo. He has developed the experience and background necessary to deal with complex assignments covering an array of property types. Eric is currently Managing Director of the Integra‐San Francisco office and Senior Managing Director of the Integra‐Sacramento office.
Professional Activities & Affiliations
Appraisal Institute, Member (MAI) Appraisal Institute, January 2016 Licenses
California, Certified General, AG026558, Expires February 2023 Nevada, Certified General, A.0207666‐CG, Expires January 2023 Arizona, Certified General, CGA ‐ 1006422, Expires January 2022 Washington, Certified General, 20100611, Expires June 2023 Education
Academic:
Bachelor of Science in Business Administration (Concentrations in Finance and Real Estate & Land Use Affairs), California State University, Sacramento
Appraisal and Real Estate Courses:
Uniform Standards of Professional Appraisal Practice
Appraisal Principles
Basic Income Capitalization
Highest & Best Use and Market Analysis
Advanced Income Capitalization
Report Writing and Valuation Analysis
Self‐Storage Economics and Appraisal Seminar
Appraisal Litigation Practice and Courtroom Management
Hotel Valuations: New Techniques for today’s Uncertain Times Computer Enhanced Cash Flow Modeling
Advanced Sales Comparison & Cost Approaches
Advanced Applications
Supervisor‐Trainee Course for California
[email protected] ‐ 916‐435‐3883 x228
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21 Sara Gilbertson
Integra Realty
Resources ‐ Sacramento
irr .com
T 916‐435‐3883
F 916‐435‐4774
590 Menlo Drive
Suite 1
Rocklin, CA 95765
Experience
Ms. Gilbertson is a licensed appraiser with Integra Realty Resources, a real estate appraisal firm that engages in a wide variety of real estate valuation and consultation assignments. She joined the firm in April 2011 after completing her bachelor's degree at California State University, Sacramento and has been writing narrative appraisal reports for a variety of commercial properties. She has experience in writing narrative appraisal reports covering a variety of commercial properties, as well as special use properties including self storage facilities, hotels and mobile home parks. She also specialized in the appraisal of residential master planned communities and subdivision, as well as Mello Roos and Assessment Districts for land secured municipal financings. Ms. Gilbertson has developed the experience and background necessary to deal with complex assignments covering an array of property types.
Licenses
California, Certified General Real Estate Appraiser, 3002204, Expires May 2022 Education
Academic:
Bachelor of Science in Business Administration (Concentration in Real Estate and Land Development), California State University, Sacramento
Appraisal Institute Courses:
Basic Appraisal Principles
Basic Appraisal Procedures
Uniform Standards of Professional Appraisal Practice
Real Estate Finance and Statistics and Valuation Modeling Sales Comparison Approach
Report Writing and Case Studies
Market Analysis and Highest and Best Use
Site Valuation and Cost Approach
Basic Income Capitalization
4‐Hour Federal and California Statutory and Regulator Laws Quantitative Analysis
Business Practices and Ethics
Advanced Market Analysis and Highest and Best Use
Advanced Income Capitalization
Advanced Concepts and Case Studies
7‐Hour National USPAP Update Course
[email protected] ‐ 916‐435‐3883 x248
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About IRR
Integra Realty Resources, Inc. (IRR) provides world‐class commercial real estate valuation, counseling, and advisory services. Routinely ranked among leading property valuation and consulting firms, we are now the largest independent firm in our industry in the United States, with local offices coast to coast and in the Caribbean.
IRR offices are led by MAI‐designated Senior Managing Directors, industry leaders who have over 25 years, on average, of commercial real estate experience in their local markets. This experience, coupled with our understanding of how national trends affect the local markets, empowers our clients with the unique knowledge, access, and historical perspective they need to make the most informed decisions.
Many of the nation's top financial institutions, developers, corporations, law firms, and government agencies rely on our professional real estate opinions to best understand the value, use, and feasibility of real estate in their market.
Local Expertise...Nationally!
irr.com
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